FORM 10-Q

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

The registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore  filing this Form with the reduced  disclosure
format.

           [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended: March 31, 1999

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

Commission file number:    333-59765
                           333-59769

                          LINCOLN BENEFIT LIFE COMPANY
             (Exact name of registrant as specified in its charter)

         Nebraska                                      470221457
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                    Identification No.)

                              206 South 13th Street
                             Lincoln, Nebraska 68508
               (Address of principal executive offices)(zip code)

                                 1-800-525-9287
              (Registrant's telephone number, including area code)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                          if changed since last report)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes. . ./X/. .             No

         Indicate the number of shares of each of the issuer's classes of common
stock as of March 31, 1999;  there were 25,000  shares of common  capital  stock
outstanding,  par value $100 per share all of which  shares are held by Allstate
Life Insurance Company.

<PAGE>



                         PART I - FINANCIAL INFORMATION

Item 1.     FINANCIAL STATEMENTS

            Consolidated Statements of Financial Position
            March 31, 1999 (Unaudited) and December 31, 1998.............    3

            Consolidated Statements of Operations
            Three Months Ended March 31, 1999 and March 31, 1998
            (Unaudited)..................................................    4

            Consolidated Statements of Cash Flows
            Three Months Ended March 31, 1999 and March 31, 1998
            (Unaudited)..................................................    5

            Notes to Financial Statements................................    6

Item 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS................    9

Item 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURE
            ABOUT MARKET RISK*...........................................  N/A



                                

                           PART II - OTHER INFORMATION

Item 1.     LEGAL PROCEEDINGS..........................................   13

Item 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS*.................   N/A

Item 3.     DEFAULTS UPON SENIOR SECURITIES*...........................   N/A

Item 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY
            HOLDERS*...................................................   N/A

Item 5.     OTHER INFORMATION..........................................   13

Item 6.     EXHIBITS AND REPORTS ON FORM 8-K...........................   13

SIGNATURE PAGE.........................................................   14




*Omitted pursuant to General Instruction H(2) of Form 10-Q.



                                       2
<PAGE>


<TABLE>
<CAPTION>

                                                                  
                          LINCOLN BENEFIT LIFE COMPANY
                  CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


                                                                                     MARCH 31,  DECEMBER 31,
                                                                                       1999         1998
                                                                                   -----------  -----------   
<S>                                                                                <C>           <C>    

($ in thousands)                                                                   (UNAUDITED)

ASSETS
Investments
   Fixed income securities at fair value (amortized
     cost $151,857 and $149,898)                                                    $  157,777   $  158,984
   Short-term                                                                            4,191        3,675
                                                                                    ----------   ----------   
        Total investments                                                              161,968      162,659

Cash                                                                                     1,112        1,735
Reinsurance recoverable from Allstate Life
    Insurance Company                                                                7,044,779    6,933,084
Reinsurance recoverable non-affiliates                                                 215,981      191,092
Receivable from affiliates, net                                                         40,761       37,103
Other assets                                                                            29,634       30,919
Separate Accounts                                                                      861,531      763,416
                                                                                    ----------   ----------   
          TOTAL ASSETS                                                              $8,355,766   $8,120,008
                                                                                    ==========   ==========

LIABILITIES
Reserve for life-contingent contract benefits                                       $  373,997   $  338,069
Contractholder funds                                                                 6,878,531    6,785,070
Current income taxes payable                                                             4,566        3,659
Deferred income taxes                                                                    4,453        5,546
Other liabilities and accrued expenses                                                  73,275       64,470
Separate Accounts                                                                      861,531      763,416
                                                                                    ----------   ----------   
          TOTAL LIABILITIES                                                          8,196,353    7,960,230
                                                                                    ----------   ----------   

COMMITMENTS AND CONTINGENT LIABILITIES (NOTE 4)

SHAREHOLDER'S EQUITY
Common stock, $100 par value, 30,000 shares
    authorized, 25,000 issued and outstanding                                            2,500        2,500
Additional capital paid-in                                                             116,750      116,750
Retained income                                                                         36,315       34,622

Accumulated other comprehensive income:
    Unrealized net capital gains                                                         3,848        5,906
                                                                                    ----------   ----------   
           TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME                                  3,848        5,906
                                                                                    ----------   ----------  
           TOTAL SHAREHOLDER'S EQUITY                                                  159,413      159,778
                                                                                    ----------   ----------   
           TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY                               $8,355,766   $8,120,008
                                                                                    ==========   ==========

<FN>

See notes to consolidated financial statements.
</FN>
</TABLE>


                                       3
<PAGE>


<TABLE>
<CAPTION>


                          LINCOLN BENEFIT LIFE COMPANY
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                                            THREE MONTHS ENDED
                                                                                  MARCH 31,
                                                                         -----------------------
($ in thousands)                                                             1999        1998  
                                                                         ----------   ----------
<S>                                                                      <C>          <C>  

                                                                                (UNAUDITED)

REVENUES
Net investment income                                                    $    2,621   $    2,579
Realized capital gains and losses                                                 1         --
                                                                         ----------   ----------   

INCOME BEFORE INCOME TAX EXPENSE                                              2,622        2,579

Income tax expense                                                              929          912
                                                                         ----------   ----------

NET INCOME                                                               $    1,693   $    1,667
                                                                         ==========   ==========


<FN>

See notes to consolidated financial statements.

</FN>
</TABLE>


                                       4
<PAGE>



<TABLE>
<CAPTION>

                          LINCOLN BENEFIT LIFE COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                       THREE MONTHS ENDED
                                                                                             MARCH 31,
                                                                                 ----------------------------
($ in thousands)                                                                    1999              1998
                                                                                 -----------       ----------
                                                                                         (UNAUDITED)
<S>                                                                              <C>               <C>   

CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                                       $    1,693        $    1,667
Adjustments to reconcile net income to net
    cash provided by operating activities
      Amortization and other non-cash items                                              20                11
      Realized capital gains and losses                                                  (1)                -
      Changes in:
        Life-contingent contract benefits and
          contractholder funds                                                       (1,561)              213
        Income taxes payable                                                            922               913
        Other operating assets and liabilities                                          646              (781)
                                                                                 ----------        ----------
           Net cash provided by operating activities                                  1,719             2,023
                                                                                 ----------        ----------

CASH FLOWS FROM INVESTING ACTIVITIES
Fixed income securities
    Investment collections                                                            4,986             1,792
    Investment purchases                                                             (6,812)           (3,070)
Change in short-term investments, net                                                  (516)           (3,473)
                                                                                 ----------        ----------
           Net cash used in investing activities                                     (2,342)           (4,751)
                                                                                 ----------        ----------

NET DECREASE IN CASH                                                                   (623)           (2,728)
CASH AT BEGINNING OF PERIOD                                                           1,735             4,220
                                                                                 ----------        ----------
CASH AT END OF PERIOD                                                            $    1,112        $    1,492
                                                                                 ==========        ==========


<FN>


See notes to consolidated financial statements.
</FN>
</TABLE>



                                       5
<PAGE>


                          LINCOLN BENEFIT LIFE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.    BASIS OF PRESENTATION

              The accompanying  consolidated  financial  statements  include the
       accounts of Lincoln  Benefit  Life  Company  ("LBL") and its wholly owned
       subsidiary,  Allstate  Financial  Distributors,  Inc.,  (formerly Lincoln
       Benefit   Life   Financial    Services)   a   registered    broker-dealer
       (collectively,  the  "Company").  LBL is a  wholly  owned  subsidiary  of
       Allstate  Life  Insurance  Company  ("ALIC"),  which is  wholly  owned by
       Allstate  Insurance  Company  ("AIC"),  a wholly owned  subsidiary of The
       Allstate  Corporation (the "Corporation").  These consolidated  financial
       statements  have been  prepared in  conformity  with  generally  accepted
       accounting principles.

              The  consolidated  financial  statements and notes as of March 31,
       1999 and for the three  month  periods  ended March 31, 1999 and 1998 are
       unaudited.  The consolidated financial statements reflect all adjustments
       (consisting only of normal recurring  accruals) which are, in the opinion
       of  management,  necessary  for the fair  presentation  of the  financial
       position,  results of operations and cash flows for the interim  periods.
       The  consolidated  financial  statements  and  notes  should  be  read in
       conjunction with the consolidated  financial statements and notes thereto
       included in the Lincoln  Benefit Life Company  Annual  Report on Form 10K
       for 1998. The results of operations for the interim periods should not be
       considered indicative of results to be expected for the full year.

              Effective  January 1,  1999,  the  Company  adopted  Statement  of
        Position  ("SOP") 97-3,  "Accounting by Insurance and Other  Enterprises
        for Insurance-Related Assessments." The SOP provides guidance concerning
        when to recognize a liability for insurance-related  assessments and how
        those liabilities  should be measured.  Specifically,  insurance-related
        assessments  should  be  recognized  as  liabilities  when  all  of  the
        following  criteria have been met: 1) an assessment  has been imposed or
        it is  probable  that  an  assessment  will  be  imposed,  2) the  event
        obligating an entity to pay an assessment has occurred and 3) the amount
        of the  assessment  can be  reasonably  estimated.  The adoption of this
        statement  was  immaterial to the  Company's  results of operations  and
        financial position.

              To  conform  with the 1999  presentation,  certain  amounts in the
       prior  years'  consolidated  financial  statements  and  notes  have been
       reclassified.


2.     REINSURANCE

              The Company has reinsurance agreements whereby premiums,  contract
       charges,  credited  interest,  policy  benefits and certain  expenses are
       ceded,  primarily to ALIC and  reflected net of such  reinsurance  in the
       consolidated statements of operations. The amounts shown in the Company's
       consolidated  statements of operations  relate to the investment of those
       assets  of  the  Company  that  are  not  transferred  under  reinsurance
       agreements.   Reinsurance   recoverable   and  the  related  reserve  for
       life-contingent  contract benefits and contractholder  funds are reported
       separately  in the  consolidated  statements of financial  position.  The
       Company  continues  to have primary  liability as the direct  insurer for
       risks reinsured.


                                       6
<PAGE>

                          LINCOLN BENEFIT LIFE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


              Investment   income   earned   on   the   assets   which   support
       contractholder  funds  and  the  reserve  for  life-contingent   contract
       benefits is not included in the Company's  financial  statements as those
       assets are owned and managed under the terms of  reinsurance  agreements.
       The following amounts were ceded to ALIC under reinsurance agreements.

                                                      THREE MONTHS ENDED
                                                            MARCH 31,
                                                 ----------------------------
       ($ in thousands)                            1999                 1998
                                                 --------             -------

       Premiums                                  $ 13,383             $ 9,148
       Contract charges                            31,897              24,569
       Credited interest, policy benefits,
           and expenses                           167,288             123,098


3.      COMPREHENSIVE INCOME

               The  components  of other  comprehensive  income on a pretax  and
        after-tax basis for the three months ended March 31, are as follows:

<TABLE>
<CAPTION>

       ($ in thousands)                                  1999                          1998
                                            ----------------------------    ---------------------------
                                                                  AFTER-                         AFTER-
                                             PRETAX      TAX       TAX       PRETAX     TAX       TAX
                                             ------      ---       ---       ------     ---       ---
<S>                                         <C>        <C>       <C>        <C>       <C>       <C>

       Unrealized capital gains and losses:
       ------------------------------------

       Unrealized holding (losses) gains
           arising during the period        $(3,165)   $ 1,108   $(2,057)   $    23   $     8   $    15
       Less: reclassification adjustment
           for realized net capital gains
           included in net income                 1         --         1         --        --        --
                                            -------    -------   -------    -------   -------   -------
       Other comprehensive
       (loss) income                        $(3,166)   $ 1,108    (2,058)   $    23   $     8        15
                                            =======    =======   -------    =======   =======   -------

Net income                                                         1,693                          1,667
                                                                 -------                        -------

Comprehensive (loss) income                                      $  (365)                       $ 1,682
                                                                 =======                        =======


</TABLE>


                                       7
<PAGE>




                          LINCOLN BENEFIT LIFE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


      4.       REGULATION AND LEGAL PROCEEDINGS

               The  Company  is subject  to the  effects  of a changing  social,
      economic and regulatory  environment.  Public and  regulatory  initiatives
      have varied and have included efforts to adversely  influence and restrict
      premium rates,  restrict the Company's ability to cancel policies,  impose
      underwriting standards and expand overall regulation. The ultimate changes
      and eventual effects, if any, of these initiatives are uncertain.

               Various other legal and regulatory  actions are currently pending
      that involve the Company and specific  aspects of its conduct of business.
      In the opinion of management,  the ultimate  liability,  if any, in one or
      more of these  actions  in excess of  amounts  currently  reserved  is not
      expected to have a material effect on the results of operations, liquidity
      or financial position of the Company.


                                       8
<PAGE>

                          LINCOLN BENEFIT LIFE COMPANY
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



     The following discussion highlights significant factors influencing results
of operations and changes in financial  position of Lincoln Benefit Life Company
("LBL") and its wholly owned subsidiary,  Allstate Financial Distributors,  Inc.
(formerly Lincoln Benefit Life Financial Services) (collectively the "Company").
It should be read in conjunction with the consolidated  financial statements and
related  notes  thereto  found  under  items 7 and 8 of  Part II of the  Lincoln
Benefit Life Company  Annual Report on Form 10-K for the year ended December 31,
1998.

     LBL is a  wholly  owned  subsidiary  of  Allstate  Life  Insurance  Company
("ALIC"),  which is wholly owned by Allstate Insurance Company ("AIC"), a wholly
owned subsidiary of The Allstate Corporation. The Company markets life insurance
and savings products  through  independent  insurance  agents and brokers.  Life
insurance includes  traditional life, such as term and whole life insurance,  as
well as variable life and universal life products.  Savings  products consist of
fixed annuity products,  including indexed and market value adjusted  annuities,
as well as variable  annuities.  The Company has  identified  itself as a single
segment entity.

     The assets and liabilities  related to flexible premium  deferred  variable
annuity  contracts  and  variable  life  policies  are  legally  segregated  and
reflected as Separate  Account assets and  liabilities and carried at fair value
in the  consolidated  statements of financial  position.  Investment  income and
realized  gains and  losses of the  Separate  Accounts  accrue  directly  to the
contractholders (net of fees) and, therefore,  are not included in the Company's
consolidated statements of operations.

CONSOLIDATED RESULTS OF OPERATIONS

($ in thousands)
                                                       
                                                        THREE MONTHS ENDED
                                                             MARCH 31,
                                                    1999              1998
                                                  --------          ---------
Net investment income                          $       2,621     $       2,579
                                               =============     =============
Realized capital gains and losses, after-tax   $           1     $           -
                                               =============     =============
Net income                                     $       1,693     $       1,667
                                               =============     =============
Total investments                              $     161,968     $     153,780
                                               =============     =============

     The Company has  reinsurance  agreements  under which  contract  and policy
related   transactions   are  transferred   primarily  to  ALIC.  The  Company's
consolidated  results  of  operations  include  only net  investment  income and
realized  capital  gains and losses earned on the assets of the Company that are
not  transferred  under the reinsurance  agreements,  and income provided by the
Company's broker-dealer subsidiary, Allstate Financial Distributors, Inc..

     Net income in the first quarter of 1999 increased $26 thousand  compared to
the first  quarter of 1998.  The increase in net income was driven by higher net
investment  income  as higher  investment  balances  from  positive  cash  flows
generated  from  operations  were partially  offset by slightly lower  portfolio
yields.  Lower investment yields are due, in part, to the investment of proceeds
from  calls and  maturities  and the  investment  of  positive  cash  flows from
operations  in  securities  yielding  less than the average  portfolio  rate. In
relatively low interest rate environments,  funds from maturing  investments may
be reinvested at interest rates lower than those which  prevailed when the funds
were previously invested resulting in lower investment yields.


                                       9
<PAGE>

FINANCIAL POSITION

($ in thousands)

                                                   MARCH 31,      DECEMBER 31,
                                                     1999             1998
                                                   ---------      ------------
Fixed income securities (1)                   $      157,777    $      158,984
Short-term investments                                 4,191             3,675
                                              --------------    --------------
         Total investments                    $      161,968    $      162,659
                                              ==============    ==============
Reinsurance recoverable from ALIC             $    7,044,779    $    6,933,084
                                              ==============    ==============
Separate Account assets and liabilities       $      861,531    $      763,416
                                              ==============    ==============
Contractholder funds                          $    6,878,531    $    6,785,070
                                              ==============    ==============

(1)Fixed income  securities are carried at fair value.  Amortized cost for these
   securities was $151,857 and $149,898 at March 31, 1999 and December 31, 1998,
   respectively.

     Total  investments were $162.0 million at March 31, 1999 compared to $162.7
million at December 31, 1998. Positive cash flows generated from operations were
more than  offset by a decrease  in  unrealized  capital  gains on fixed  income
securities.  At March 31,  1999,  unrealized  net capital  gains on fixed income
securities were $5.9 million compared to $9.1 million at December 31, 1998.

     At March 31, 1999, all of the Company's fixed income  securities  portfolio
is  rated   investment   grade,   with  a  National   Association  of  Insurance
Commissioners  ("NAIC") rating of 1 or 2, a Moody's rating of Aaa, Aa, A or Baa,
or a comparable Company internal rating.

     During  the  three  months  ended  March  31,  1999,  contractholder  funds
increased $93.5 million and reinsurance  recoverable from ALIC under reinsurance
agreements  increased  $111.7  million.  Sales of fixed  annuity  contracts  and
interest  credited to  contractholders  were  partially  offset by fixed annuity
surrenders  and  withdrawals.  Reinsurance  recoverable  from  ALIC  relates  to
contract benefit obligations ceded to ALIC.

     Separate  Account assets and liabilities  increased $98.1 million to $861.5
million at March 31, 1999. The increase was primarily  attributable  to sales of
flexible  premium  deferred   variable  annuity   contracts  and  the  favorable
investment performance of the Separate Account investment portfolios,  partially
offset by transfers to the fixed  account  contract  option and  surrenders  and
withdrawals.


LIQUIDITY AND CAPITAL RESOURCES

     Under the terms of  reinsurance  agreements,  all  premiums  and  deposits,
excluding  those relating to Separate  Accounts,  are  transferred  primarily to
ALIC,  which  maintains  the  investment  portfolios  supporting  the  Company's
products.  Payments  of  policyholder  claims,  benefits,  contract  maturities,
contract  surrenders  and  withdrawals  and  certain  operating  costs  are also
reimbursed primarily by ALIC, under the terms of the reinsurance agreements. The
Company  continues  to have  primary  liability  as a direct  insurer  for risks
reinsured.  The  Company's  ability to meet  liquidity  demands is  dependent on
ALIC's ability to meet those demands. ALIC's claim-paying ability was rated Aa2,
AA+ and A+ by Moody's,  Standard & Poor's and A.M. Best,  respectively  at March
31, 1999.

     The  primary   sources  for  the  remainder  of  the  Company's  funds  are
collections of principal and interest from the investment  portfolio and capital
contributions  from ALIC.  The primary uses for the  remainder of the  Company's
funds are to purchase  investments and pay costs associated with the maintenance
of the Company's investment portfolio.

                                       10
<PAGE>
YEAR 2000

     The Company is  dependent  upon  certain  services  provided  for it by the
Corporation  including  computer-related  systems, and systems and equipment not
typically  thought of as  computer-related  (referred to as "non-IT").  For this
reason,  the Company is reliant upon the Corporation for the  establishment  and
maintenance of its computer-related systems and non-IT.

     The Corporation is heavily  dependent upon complex computer systems for all
phases of its operations,  including  customer  service,  insurance  processing,
underwriting,  loss reserving,  investments and other enterprise systems.  Since
many of the Corporation's  older computer  software programs  recognize only the
last two  digits  of the year in any date,  some  software  may fail to  operate
properly  in or after  the  year  1999,  if the  software  is not  reprogrammed,
remediated,  or replaced,  ("Year 2000").  Also,  non-IT often contains embedded
hardware  or  software  that  may  have a Year  2000  sensitive  component.  The
Corporation  believes that many of its  counterparties  and suppliers  also have
Year 2000 issues and non-IT issues which could affect the Corporation.

     In 1995, the  Corporation  commenced a plan consisting of four phases which
are intended to mitigate  and/or prevent the adverse effects of Year 2000 issues
on its systems:  1) inventory and assessment of affected  systems and equipment,
2) remediation and compliance of systems and equipment  through  strategies that
include  the  replacement  or  enhancement  of  existing  systems,  upgrades  to
operating systems already covered by maintenance agreements and modifications to
existing  systems to make them Year 2000 compliant,  3) testing of systems using
clock-forward  testing  for both  current  and future  dates and for dates which
trigger  specific  processing,  and 4)  contingency  planning which will address
possible   adverse   scenarios  and  the  potential   financial  impact  to  the
Corporation's results of operations, liquidity or financial position.

     The  Corporation  believes  that  the  first  three  steps  of  this  plan,
assessment,  remediation and testing,  including  clock-forward testing which is
being performed on the Corporation's systems and non-IT, are mostly complete for
the  Corporation's  critical  systems.  The  Corporation  is  relying  on  other
remediation techniques for its midrange and personal computer environments,  and
certain mainframe applications.

     Certain other processing systems are planned to be remediated by the middle
of 1999, and the implementation and rollout of the remediated  personal computer
environment  will continue  through the third quarter of 1999.  Some systems and
non-IT related to discontinued or non-critical  functions of the Corporation are
planned to be abandoned by the end of 1999.

     The Corporation is currently in the process of developing contingency plans
in the  event  that the  systems  supporting  key  processes  are not Year  2000
compliant in or after the year 1999. Management believes these contingency plans
should be completed by mid-1999 with testing of these plans conducted throughout
the second half of 1999.  Management  has also begun to  identify  and model the
impacts of the most reasonably  likely worst case  scenarios.  Until these plans
are  complete,  management  is  unable  to  determine  an  estimate  of the most
reasonably likely worst case scenario due to issues relating to the Year 2000.

     In addition,  the  Corporation is actively  working with its major external
counterparties  and  suppliers  to  assess  their  compliance  efforts  and  the
Corporation's  exposure to both their Year 2000 issues and non-IT  issues.  This
assessment  has  included  the  solicitation  of  external   counterparties  and
suppliers,  evaluating responses received and testing third party interfaces and
interactions to determine compliance.  Currently,  the Corporation has solicited
and  has  received  responses  from  the  majority  of  its  counterparties  and
suppliers.  These responses  generally state that they believe they will be Year
2000  compliant  and that no  transactions  will be affected.  However,  certain
vendors are also in ongoing  assessment  and testing of their  products  whereby
they are currently unable to identify all potential problems in certain products
which are used by the Corporation.  The Corporation  believes that these vendors
will make no  statements  regarding  their  Year 2000  readiness  other  than to
publish declarations addressing specific compliance issues identified with their
products.  The  Corporation  has begun to work with  these  key  vendors  and is
developing   procedures  in  order  to  stay  aware  of  any  compliance  issues
encountered by these vendors.  The  Corporation has also decided to test certain
interfaces  and  interactions  to  gain  additional  assurance  on  third  party
compliance.  If key  vendors are  determined  to be unable to meet the Year 2000
requirement,  the Corporation is preparing contingency plans that will allow the
Corporation  to continue  to sell its  products  and to service  its  customers.
Management believes these contingency plans should be completed by mid-1999. The
Corporation currently does not have sufficient  information to determine whether
or not all of its external counterparties and suppliers will be Year 2000 ready.

                                       11
<PAGE>



     The  Corporation may be exposed to the risk that the issuers of investments
in  its  portfolios  will  be  adversely  impacted  by  Year  2000  issues.  The
Corporation assesses the impact which Year 2000 issues have on the Corporation's
investments  as part of due  diligence for proposed new  investments  and in its
ongoing review of all current portfolio  holdings.  Any recommended actions with
respect to  individual  investments  are  determined  by taking into account the
potential impact of Year 2000 on the issuer. The Corporation  currently does not
have sufficient  information to determine the impacts of such exposures on their
results of operations, liquidity or financial position.

     The Corporation presently believes that it will resolve the Year 2000 issue
in a timely  manner.  Year 2000 costs are  expensed as incurred,  therefore  the
majority of the expenses  related to this project have been incurred as of March
31, 1999. The  Corporation  estimates that  approximately  $125 million in costs
will be incurred between the years of 1995 and 2000. These amounts include costs
directly  related to fixing Year 2000  issues,  such as  modifying  software and
hiring  Year  2000  solution  providers,  as well as  costs to  replace  certain
non-compliant systems which would not have been otherwise replaced. A portion of
these  costs will be incurred by the Company on a pro rata basis of usage of the
computer-related  systems and non-IT,  as compared to the usage of all  entities
which share these services with the Corporation.  These amounts are not expected
to be material to the results of operations of the Company.

FORWARD-LOOKING STATEMENTS

     The statements contained in this Management's  Discussion and Analysis that
are not historical information are forward-looking  statements that are based on
management's  estimates,  assumptions and  projections.  The Private  Securities
Litigation Reform Act of 1995 provides a safe harbor under The Securities Act of
1933 and The Securities Exchange Act of 1934 for forward-looking statements.



                                       12


<PAGE>



                           PART II - OTHER INFORMATION

Item 1.           LEGAL PROCEEDINGS

The Company and its Board of  Directors  know of no material  legal  proceedings
pending to which the  Company is a party or which  would  materially  affect the
Company.  The Company is involved in pending and  threatened  litigation  in the
normal course of its business in which claims for monetary damages are asserted.
Management,  after  consultation  with legal  counsel,  does not  anticipate the
ultimate liability arising from such pending or threatened  litigation to have a
material effect on the financial condition of the Company.

Item 5.           OTHER INFORMATION

Not applicable.

Item 6.           EXHIBITS AND REPORTS ON FORM 8-k

         (a)      Exhibits required by Item 601 of Regulation S-K
                  (2)      None
                  (3) (i)  Articles of Incorporation*
                      (ii) By-laws*
                  (4)      Lincoln Benefit Life Company Flexible Premium
                           Deferred Annuity Contract and Application**
                  (10)     Reinsurance Agreement between Lincoln Benefit Life
                           Company and Allstate Life Insurance Company*
                  (11)     None
                  (15)     None
                  (18)     None
                  (19)     None
                  (22)     None
                  (23)(a)  Consent of Independent Public Accountants***
                      (b)  Consent of Attorneys***
                  (24)     None
                  (27)     Financial Data Schedule
                  (99)     None

         (b)      Reports on 8-K

                  No reports  on Form 8-K were  filed  during the second quarter
                  of 1998.

*Incorporated herein by reference to the Registration  Statement on Form N-4 for
Lincoln Benefit Life Variable  Annuity Account (File No.  333-50545,  811-07924)
filed April 21, 1998.

**Incorporated herein by reference to the Registration Statement on Form N-4 for
Lincoln Benefit Life Variable  Annuity Account (File No.  333-50545,  811-07924)
filed April 21,  1998.  Incorporated  herein by  reference  to the  Registration
Statement on Form N-4 for Lincoln  Benefit Life Variable  Annuity  Account (File
No. 333-50737, 811-07924) filed April 22, 1998.

***Incorporated  herein  by  reference  to the  Post-effective  Amendment  #1 to
Registration  Statement on Form S-1 for Lincoln  Benefit life Company  (File No.
333-59765)  filed  April  1,  1999.  Incorporated  herein  by  reference  to the
Post-effective  Amendment #1 to  Registration  Statement on Form S-1 for Lincoln
Benefit Life Company (File No. 333-59769) filed April 1, 1999.


                                       13
<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registration  has duly  caused  this  report to be  signed on its  behalf by the
undersigned thereunto duly authorized, on the 14th day of May, 1999.



                          LINCOLN BENEFIT LIFE COMPANY
                                  (Registrant)


/s/  B. EUGENE WRAITH                          PRESIDENT, CHIEF OPERATING
---------------------                          OFFICER AND DIRECTOR
B. EUGENE WRAITH                               (Principal Executive Officer)



/s/  MARVIN P. EHLY                            SENIOR VICE PRESIDENT
---------------------                          TREASURER AND DIRECTOR
MARVIN P. EHLY                                 (Principal Financial Officer)




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