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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

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.

|ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|- | ----------------------------------------------------------------------------------------
|  | FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003                                           
|  | OR                                                                                      
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 333-66452

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

|Nebraska                                 |  | 47-0221457                          
|---------------------------------------- |  | ------------------------------------
|(State of Incorporation)                 |  | (I.R.S. Employer Identification No.)
|2940 South 84th Street
Lincoln, Nebraska |  | 68506                               
|(Address of principal executive offices) |  | (Zip Code)                          

Registrant's telephone number, including area code:800/525-9287

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 ý    No o

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.

Yes o    No ý

As
of April 30, 2003, the registrant had 25,000 common shares, $100 par value, outstanding, all of which are held by Allstate Life Insurance Company

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LINCOLN BENEFIT LIFE COMPANY
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 2003

|PART I.  |  | FINANCIAL INFORMATION                                                                                    |  |   
|-------- |  | -------------------------------------------------------------------------------------------------------- |  | --
|Item 1.  |  | Financial Statements                                                                                     |  |   
|         |  | Condensed Statements of Operations for the Three Month Periods Ended March 31, 2003 and 2002 (unaudited) |  | 3 
|         |  | Condensed Statements of Financial Position as of March 31, 2003 (unaudited) and December 31, 2002        |  | 4 
|         |  | Condensed Statements of Cash Flows for the Three Month Periods Ended March 31, 2003 and 2002 (unaudited) |  | 5 
|         |  | Notes to Condensed Financial Statements (unaudited)                                                      |  | 6 
|Item 2.  |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                    |  | 10
|Item 4.  |  | Controls and Procedures                                                                                  |  | 14
|PART II. |  | OTHER INFORMATION                                                                                        |  |   
|Item 1.  |  | Legal Proceedings                                                                                        |  | 14
|Item 6.  |  | Exhibits and Reports on Form 8-K                                                                         |  | 14

2

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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

LINCOLN BENEFIT LIFE COMPANY
CONDENSED STATEMENTS OF OPERATIONS

|                                                 |  | Three Months Ended
March 31,
|------------------------------------------------ |  | ----------------------------
|
|
|Revenues                                         |  |                             
|Net investment income                            |  | $                           
|Realized capital gains and losses                |  |                             
|                                                 |  |                             
|Income from operations before income tax expense |  |                             
|Income tax expense                               |  |                             
|                                                 |  |                             
|Net income                                       |  | $                           
|                                                 |  |                             

See
notes to condensed financial statements.

3

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LINCOLN BENEFIT LIFE COMPANY
CONDENSED STATEMENTS OF FINANCIAL POSITION

|(in thousands, except par value data)                                                        |                                                                               | March 31,
2003                               |            | December 31,
2002
|-------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------- | -------------------------------------------- | ---------- | -----------------
|
|Assets                                                                                       |                                                                               |                                              |            |                  
|Investments                                                                                  |                                                                               |                                              |            |                  
|                                                                                             | Fixed income securities, at fair value (amortized cost $186,462 and $182,757) |                                              | $          | 202,964          
|                                                                                             | Short-term                                                                    |                                              |            | 2,073            
|                                                                                             |                                                                               |                                              |            |                  
|                                                                                             |                                                                               | Total investments                            |            |                  
|Cash                                                                                         |                                                                               |                                              | 86,512     |                  
|Reinsurance recoverable from Allstate Life Insurance Company, net                            |                                                                               |                                              | 12,765,058 |                  
|Reinsurance recoverable from non-affiliates, net                                             |                                                                               |                                              | 600,082    |                  
|Current income taxes receivable                                                              |                                                                               |                                              |           |                  
|Other assets                                                                                 |                                                                               |                                              | 47,509     |                  
|Separate Accounts                                                                            |                                                                               |                                              | 1,406,145  |                  
|                                                                                             |                                                                               |                                              |            |                  
|                                                                                             |                                                                               | Total assets                                 |            | $                
|                                                                                             |                                                                               |                                              |            |                  
|Liabilities                                                                                  |                                                                               |                                              |            |                  
|Contractholder funds                                                                         |                                                                               | $                                            | 12,094,106 |                  
|Reserve for life-contingent contract benefits                                                |                                                                               |                                              | 1,265,406  |                  
|Current income taxes payable                                                                 |                                                                               |                                              | 940        |                  
|Deferred income taxes                                                                        |                                                                               |                                              | 4,536      |                  
|Payable to affiliates, net                                                                   |                                                                               |                                              | 60,764     |                  
|Other liabilities and accrued expenses                                                       |                                                                               |                                              | 73,984     |                  
|Separate Accounts                                                                            |                                                                               |                                              | 1,406,145  |                  
|                                                                                             |                                                                               |                                              |            |                  
|                                                                                             |                                                                               | Total liabilities                            |            |                  
|                                                                                             |                                                                               |                                              |            |                  
|Commitments and Contingent Liabilities (Note 3)                                              |                                                                               |                                              |            |                  
|Shareholder's equity                                                                         |                                                                               |                                              |            |                  
|Common stock, $100 par value, 30,000 shares authorized, 25,000 shares issued and outstanding |                                                                               |                                              | 2,500      |                  
|Additional capital paid-in                                                                   |                                                                               |                                              | 126,750    |                  
|Retained income                                                                              |                                                                               |                                              | 64,486     |                  
|Accumulated other comprehensive income:                                                      |                                                                               |                                              |            |                  
|                                                                                             | Unrealized net capital gains and losses                                       |                                              |            | 10,726           
|                                                                                             |                                                                               |                                              |            |                  
|                                                                                             |                                                                               | Total accumulated other comprehensive income |            |                  
|                                                                                             |                                                                               |                                              |            |                  
|                                                                                             |                                                                               | Total shareholder's equity                   |            |                  
|                                                                                             |                                                                               |                                              |            |                  
|                                                                                             |                                                                               | Total liabilities and shareholder's equity   |            | $                
|                                                                                             |                                                                               |                                              |            |                  

See notes to condensed financial statements.

4

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LINCOLN BENEFIT LIFE COMPANY
CONDENSED STATEMENTS OF CASH FLOWS

|                                                                                  |                                       | Three Months Ended
March 31,                                                                                |                                                    
|--------------------------------------------------------------------------------- | ------------------------------------- | ----------------------------------------------------------------------------------------------------------- | ---------------------------------------------------
|
|
|Cash flows from operating activities                                              |                                       |                                                                                                             |                                                    
|Net income                                                                        |                                       | $                                                                                                           | 1,958                                              
|Adjustments to reconcile net income to net cash provided by operating activities: |                                       |                                                                                                             |                                                    
|                                                                                  | Amortization and other non-cash items |                                                                                                             |                                                    
|                                                                                  | Realized capital gains and losses     |                                                                                                             |                                                    
|                                                                                  | Changes in:                           |                                                                                                             |                                                    
|                                                                                  |                                       | Reserve for life-contingent contract benefits and contractholder funds, net of
    reinsurance recoverables |                                                    
|                                                                                  |                                       | Income taxes payable                                                                                        |                                                    
|                                                                                  |                                       | Receivable/payable to affiliates, net                                                                       |                                                    
|                                                                                  |                                       | Other operating assets and liabilities                                                                      |                                                    
|                                                                                  |                                       |                                                                                                             |                                                    
|                                                                                  |                                       |                                                                                                             | Net cash (used in) provided by operating activities
|                                                                                  |                                       |                                                                                                             |                                                    
|Cash flows from investing activities                                              |                                       |                                                                                                             |                                                    
|Fixed income securities                                                           |                                       |                                                                                                             |                                                    
|                                                                                  | Proceeds from sales                   |                                                                                                             |                                                    
|                                                                                  | Investment collections                |                                                                                                             |                                                    
|                                                                                  | Investment purchases                  |                                                                                                             |                                                    
|Change in short-term investments, net                                             |                                       |                                                                                                             | 1,128                                              
|                                                                                  |                                       |                                                                                                             |                                                    
|                                                                                  |                                       |                                                                                                             | Net cash used in investing activities              
|                                                                                  |                                       |                                                                                                             |                                                    
|Net (decrease) increase in cash                                                   |                                       |                                                                                                             | (43,737                                            
|Cash at beginning of period                                                       |                                       |                                                                                                             | 130,249                                            
|                                                                                  |                                       |                                                                                                             |                                                    
|Cash at end of period                                                             |                                       | $                                                                                                           | 86,512                                             
|                                                                                  |                                       |                                                                                                             |                                                    

See
notes to condensed financial statements.

5

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LINCOLN BENEFIT LIFE COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)

1.     Basis of Presentation

The accompanying condensed financial statements include the accounts of Lincoln Benefit Life Company (the "Company"), 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").

The
condensed financial statements and notes as of March 31, 2003, and for the three-month periods ended March 31, 2003 and 2002, are unaudited. The condensed 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. These condensed financial statements and notes should be read in conjunction with the financial statements and notes thereto included in the Lincoln
Benefit Life Company Annual Report on Form 10-K for the year ended December 31, 2002. The results of operations for the interim periods should not be considered indicative of
results to be expected for the full year.

Adopted Accounting Standard

In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others." FIN 45 requires that upon issuance of a guarantee or modification of a previously issued guarantee, the guarantor must recognize a liability
for the fair value of the obligation it assumes under that guarantee. The provisions for initial recognition and measurement are effective on a prospective basis for guarantees that are issued or
modified after December 31, 2002. The adoption of FIN 45 did not have a material impact on either the financial position or results of operations of the Company.

Exposure Drafts

On July 31, 2002, the American Institute of Certified Public Accountants issued an exposure draft Statement of Position ("SOP") entitled "Accounting and
Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts". The accounting guidance contained in the proposed SOP applies to several
of the Company's products and product features. The proposed effective date of the SOP is for fiscal years beginning after December 15, 2003, with earlier adoption encouraged. If adopted early,
the provisions of the SOP must be applied as of the beginning of the fiscal year. Accordingly, if the SOP were adopted during an interim period of 2003, prior interim periods would be restated. A
provision of the proposed SOP requires the establishment of a liability in addition to the account balance for contracts and contract features that provide guaranteed minimum death benefits or other
insurance benefits. The final SOP may also require a liability for guaranteed income benefits. These liabilities are not currently recognized by the Company, and their establishment may have a
material impact on the amounts ceded to and reinsurance recoverable from ALIC depending on the market conditions at the time of adoption, but are not expected to have a material impact on the
Company's Condensed Statements of Financial Position.

The
Emerging Issues Task Force ("EITF") issued Topic No. 03-01, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments", which attempts to define other-than-temporary impairment and highlight its application to investment securities accounted for under either the cost or equity
method under Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities". The issue summary, which has yet to be finalized,
proposes that if, at the evaluation date, the fair value of an investment security is less than its carrying value then an impairment exists for which a determination must be made as to whether that
impairment is other-than-temporary. The impairment would likely be considered other-than-temporary if the investment's carrying value exceeds its fair
value for a period exceeding one year or more. If it is determined that an impairment is other-than-temporary, then an impairment loss should be recognized equal to the
difference between the investment's carrying value

6

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and
its fair value at the reporting date. The estimated impact to the Company's Condensed Statements of Operations and Financial Position is not determinable until such time as a final consensus is
reached.

2.     Reinsurance

The Company has reinsurance agreements whereby all premiums, contract charges, interest credited to contractholder funds, contract benefits and expenses are ceded
to ALIC and certain non-affiliates and are reflected net of such reinsurance in the Condensed Statements of Operations. The Company follows a comprehensive evaluation process involving
credit scoring and capacity to select reinsurers. Reinsurance recoverable and the related Reserve for life-contingent contract benefits and Contractholder funds are reported separately in
the Condensed Statements of Financial Position. The Company continues to have primary liability as the direct insurer for risks reinsured.

Investment
income earned on the assets which support Contractholder funds and the Reserve for life-contingent contract benefits are not included in the Company's Condensed
Statements of Operations as those assets are owned and managed by ALIC or third party reinsurers under terms of the reinsurance agreements.

The
effects of reinsurance on premiums and contract charges are as follows:

|                              |               | Three months ended
March 31,                      |        
|----------------------------- | ------------- | ------------------------------------------------- | -------
|
|
|Premiums and contract charges |               |                                                   |        
|Direct                        |               | $                                                 | 295,029
|Ceded                         |               |                                                   |        
|                              | Affiliate     |                                                   |        
|                              | Non-affiliate |                                                   |        
|                              |               |                                                   |        
|                              |               | Premiums and contract charges, net of reinsurance |        
|                              |               |                                                   |        

The
effects of reinsurance on interest credited to contractholder funds, contract benefits and other expenses are as follows:

|                                                                                |               | Three months ended
March 31,                                                                        |        
|------------------------------------------------------------------------------- | ------------- | --------------------------------------------------------------------------------------------------- | -------
|
|
|Interest credited to contractholder funds, contract benefits and other expenses |               |                                                                                                     |        
|Direct                                                                          |               | $                                                                                                   | 408,664
|Ceded                                                                           |               |                                                                                                     |        
|                                                                                | Affiliate     |                                                                                                     |        
|                                                                                | Non-affiliate |                                                                                                     |        
|                                                                                |               |                                                                                                     |        
|                                                                                |               | Interest credited to contractholder funds, contract benefits and other expenses, net of reinsurance |        
|                                                                                |               |                                                                                                     |        

7

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3.     Regulation, Legal Proceedings and Guarantees

Regulation

The Company is subject to changing social, economic and regulatory conditions. State and federal regulatory initiatives and proceedings have varied and have
included efforts to remove barriers preventing banks from engaging in the securities and insurance businesses, to change tax laws affecting the taxation of insurance companies and the tax treatment of
insurance products which may impact the relative desirability of various personal investment products, and to expand overall regulation. The ultimate changes and eventual effects, if any, of these
initiatives are uncertain.

Legal Proceedings

The Company sells its products through a variety of distribution channels including Allstate agencies. Consequently, the outcome of some legal proceedings that
involve AIC regarding the Allstate agencies may have an impact on the Company.

AIC
is defending various lawsuits involving worker classification issues. Examples of these lawsuits include a number of putative class actions challenging the overtime exemption claimed
by the Company under the Fair Labor Standards Act or state wage and hour laws. These class actions mirror similar lawsuits filed recently against other carriers in the industry and other employers.
Another example involves the worker classification of staff working in agencies. In this putative class action, plaintiffs seek damages under the Employee Retirement Income Security Act ("ERISA") and
the Racketeer Influenced and Corrupt Organizations Act alleging that agency secretaries were terminated as employees by Allstate and rehired by agencies through outside staffing vendors for the
purpose of avoiding the payment of employee benefits. A putative nationwide class action filed by former employee agents also includes a worker classification issue; these agents are challenging
certain amendments to the Agents Pension Plan and are seeking to have exclusive agent independent contractors treated as employees for benefit purposes. AIC has been vigorously defending these and
various other worker classification lawsuits. The outcome of these disputes is currently uncertain.

AIC
is also defending certain matters relating to its agency program reorganization announced in 1999. These matters include an investigation by the U.S. Department of Labor and a
lawsuit filed in December 2001 by the U.S. Equal Employment Opportunity Commission ("EEOC") with respect to allegations of retaliation under the Age Discrimination in Employment Act, the
Americans with Disabilities Act and Title VII of the Civil Rights Act of 1964. A putative nationwide class action has also been filed by former employee agents alleging various violations of ERISA,
breach of contract and age discrimination. AIC has been vigorously defending these lawsuits and other matters related to its agency program reorganization. In addition, AIC is defending certain
matters relating to its life agency program reorganization announced in 2000. These matters include an investigation by the EEOC with respect to allegations of age discrimination and retaliation. AIC
is cooperating fully with the agency investigation and will continue to vigorously defend these and other claims related to the life agency program reorganization. The outcome of these disputes is
currently uncertain.

The
Company is currently defending a nationwide class action, alleging among other things, breach of contract and breach of the implied covenant of good faith and fair dealing as a
result of a change in the rate and cap on an annuity product. The court certified the class and entered summary judgment in favor of the Company and against the certified class. Plaintiff has filed
notice of appeal. The Company has been vigorously defending the suit. The outcome of the appeal is currently uncertain.

Various
other legal and regulatory actions are currently pending that involve the Company and specific aspects of its conduct of business. Like other members of the insurance industry,
the Company is the target of an increasing number of class action lawsuits and other types of litigation, some of which involve claims for substantial and/or indeterminate amounts (including punitive
and treble damages) and the outcomes of which are unpredictable. This litigation is based on a variety of issues including insurance and claim settlement practices. However, at this time, based on
their present status and the existence of the reinsurance agreement with ALIC, it is the opinion of management that the ultimate liability, if any, in one

8

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or
more of these other 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.

Guarantees

The Company has issued universal life insurance contracts to third parties who finance the premium payments on the universal life insurance contracts through a
commercial paper program. The Company has issued a repayment guarantee on the outstanding commercial paper balance which is fully collateralized by the cash surrender value of the universal life
insurance contracts. At March 31, 2003, the amount due under the commercial paper program is $300 million and the cash surrender value of the policies is $304 million. The
repayment guarantee expires April 30, 2006. These contracts are ceded to ALIC under the terms of the reinsurance agreements.

In
the normal course of business, the Company provides standard indemnifications to counterparties in contracts in connection with numerous transactions, including indemnifications for
breaches of representations and warranties, taxes and certain other liabilities, such as third party lawsuits. The indemnification clauses are often standard contractual terms and were entered into in
the normal course of business based on an assessment that the risk of loss would be remote. The terms of the indemnifications vary in duration and nature. In many cases, the maximum obligation is not
explicitly stated and the contingencies triggering the obligation to indemnify have not occurred and are not expected to occur. Because the obligated amounts of the indemnifications are not explicitly
stated in many cases, the maximum amount of the obligation under such indemnifications is not determinable. Historically, the Company has not made any material payments pursuant to these obligations.

In
addition, the Company indemnifies its respective directors, officers, non-officer employees and other individuals to the extent provided in its charter and
by-laws. Since these indemnifications are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum
potential amount due under these indemnifications.

The
aggregate liability balance related to all guarantees was not material as of March 31, 2003.

4.     Other 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:

|                                                            |  | Three months ended March 31, |     
|----------------------------------------------------------- |  | ---------------------------- | ----
|
|
|Unrealized capital gains and losses                         |  |                              |     
|Unrealized holding gains (losses) arising during the period |  | $                            | (141
|Less: reclassification adjustments                          |  |                              | 6   
|                                                            |  |                              |     
|Unrealized net capital gains (losses)                       |  |                              | (147
|                                                            |  |                              |     
|Other comprehensive income (loss)                           |  | $                            | (147
|                                                            |  |                              |     
|Net income                                                  |  |                              |     
|                                                            |  |                              |     
|Comprehensive income                                        |  |                              |     
|                                                            |  |                              |     

9

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Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2003 AND 2002.

The following discussion highlights significant factors influencing results of operations and changes in financial position of Lincoln Benefit Life Company (the
"Company"). It should be read in conjunction with the condensed financial statements and notes thereto found under Part I. Item 1. contained herein, and with the discussion, analysis,
financial statements and notes thereto in Part I. Item 1. and Part II. Item 7. and Item 8. of the Lincoln Benefit Life Company Annual Report on
Form 10-K for 2002.

Management has identified the Company as a single segment entity.

RESULTS OF OPERATIONS

|                                  |  | Three months ended
March 31,
|--------------------------------- |  | ----------------------------
|
|Net investment income             |  | $                           
|Realized capital gains and losses |  |                             
|Income tax expense                |  |                             
|                                  |  |                             
|Net income                        |  | $                           
|                                  |  |                             

The
Company has reinsurance agreements whereby all premiums, contract charges, interest credited to contractholder funds, contract benefits and certain expenses are ceded to Allstate
Life Insurance Company ("ALIC") and certain non-affiliated reinsurers, and reflected net of such reinsurance in the Condensed Statements of Operations. The Company's results of operations
include net investment income and realized capital gains and losses on the assets of the Company that are not transferred under the reinsurance agreements.

Net
income decreased $256 thousand to $2.0 million in the first quarter of 2003 from $2.2 million in the same period last year due to a decrease in realized capital
gains partially offset by lower Income tax expense and an increase in Net investment income.

Pre-tax
Net investment income increased 1.7% in the first quarter of 2003 compared to the same period in 2002. The increase was due to a higher percentage of the investment
portfolio being invested in fixed income securities rather than short-term investments as compared to the same period in 2002. The portfolio balance, excluding assets invested in Separate
Accounts and unrealized net capital gains on fixed income securities, decreased 0.4% from March 31, 2002.

After-tax
realized capital gains and losses were $4 thousand in the first quarter of 2003 compared to $293 thousand in the same period in 2002. Realized capital
gains and losses resulted from sales of fixed income securities.

10

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FINANCIAL POSITION

|(in thousands)                                   |                   | March 31,
2003
|------------------------------------------------ | ----------------- | --------------
|Fixed income securities(1)                       |                   | $             
|Short-term                                       |                   |               
|                                                 |                   |               
|                                                 | Total investments |               
|                                                 |                   |               
|Cash                                             |                   | $             
|Reinsurance recoverable from ALIC, net           |                   |               
|Reinsurance recoverable from non-affiliates, net |                   |               
|Contractholder funds                             |                   |               
|Reserve for life-contingent contract benefits    |                   |               
|Separate Accounts assets and liabilities         |                   |               

---

Total
investments increased to $205.0 million at March 31, 2003 from $202.6 million at December 31, 2002 due to cash flows from operations.

The
Unrealized net capital gains on fixed income securities at March 31, 2003 were $16.5 million, a decrease of $147 thousand or less than 1% since
December 31, 2002. The net unrealized gain for the fixed income portfolio was comprised of $16.6 million of unrealized gains and $75 thousand of unrealized losses at
March 31, 2003, compared to a net unrealized gain for the fixed income portfolio totaling $16.7 million at December 31, 2002, comprised of $16.7 million of unrealized gains
and $38 thousand of unrealized losses. Corporate fixed income portfolio net unrealized gains totaled $6.2 million comprised of $6.3 million of unrealized gains and
$75 thousand of unrealized losses. The unrealized losses for the corporate fixed income portfolio related to securities in the public utility sector. This sector also comprised
$924 thousand or 14.6%, of the unrealized gains in the corporate fixed income portfolio.

Approximately
99.3% of the Company's fixed income securities portfolio is rated investment grade, which is defined by the Company as a security having a rating from the National
Association of Insurance
Commissioners ("NAIC") of 1 or 2, a Moody's equivalent rating of Aaa, Aa, A or Baa, a Standard & Poor's equivalent rating of AAA, AA, A or BBB, or a comparable Company internal rating.

The
Company monitors the quality of its fixed income portfolio, in part, by categorizing certain investments as problem, restructured or potential problem. Problem fixed income
securities are securities in default with respect to principal and/or interest and/or securities issued by companies that have gone into bankruptcy subsequent to the Company's acquisition of the
security. Restructured fixed income securities have modified terms and conditions that were not at current market rates or terms at the time of the restructuring. Potential problem fixed income
securities are current with respect to contractual principal and/or interest, but because of other facts and circumstances, management has serious concerns regarding the borrower's ability to pay
future principal and interest in accordance with the contractual terms of the security, which causes management to believe these securities may be classified as problem or restructured in the future.

11

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The following table summarizes the problem fixed income securities.

|(in thousands)                    |  | March 31, 2003 |       | December 31, 2002 |  
|--------------------------------- |  | -------------- | ----- | ----------------- | -
|
|Problem                           |  | $              | 1,785 |                   | $
|                                  |  |                |       |                   |  
|Total net carrying value          |  | $              | 1,785 |                   | $
|                                  |  |                |       |                   |  
|Cumulative write-downs recognized |  | $              | 4,323 |                   |  
|                                  |  |                |       |                   |  

As
of March 31, 2003, the balance of fixed income securities that the Company categorizes as problem was consistent with the balance as of year-end 2002. The Company
expects the eventual recovery of these securities but evaluated each security through its watch list process at March 31, 2003 and did not record any write-downs in the first quarter of 2003.
Approximately $75 thousand of net unrealized losses at March 31, 2003 are related to securities that the Company has included in the problem category. These securities represent less
than 1% of the fixed income portfolio. The Company concluded, through its watch list monitoring process, that these unrealized losses were temporary in nature. While it is possible for these balances
to increase in the future if economic conditions continue to be unfavorable, the total amount of securities in these categories is expected to remain a relatively low percentage of the total fixed
income securities portfolio. The Company did not have any fixed income securities categorized as potential problem or restructured at March 31, 2003 or December 31, 2002.

The
Company recorded net realized gains on sales of fixed income securities of $6 thousand and $450 thousand, for the three months ended March 31, 2003 and 2002,
respectively.

Reinsurance recoverable, Contractholder funds and Reserve for life-contingent contract benefits

Contractholder funds increased to $12.09 billion at March 31, 2003, from $11.66 billion at December 31, 2002 as a result of additional
deposits from fixed annuities and interest credited to contractholder funds partially offset by surrenders, withdrawals and benefit payments. The Reserve for life-contingent contract
benefits increased $168.4 million to $1.27 billion at March 31, 2003 resulting from new sales of structured settlement and immediate annuities and other
life-contingent products, partially offset by benefits paid. Reinsurance recoverable from ALIC and Reinsurance recoverable from non-affiliates increased correspondingly by
$586.2 million and $16.2 million, respectively, because all contractholder obligations are reinsured.

The
Company purchases reinsurance after evaluating the financial condition of the reinsurer, as well as the terms and price of coverage. The Company reinsures certain of its risks with
non-affiliated reinsurers under yearly renewable term and coinsurance agreements. Yearly renewable term and coinsurance agreements result in the passing of a portion of the risk to the
reinsurers. Generally, the reinsurer receives a proportionate amount of the premiums less commissions and is liable for a corresponding proportionate amount of all benefit payments.

12

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CAPITAL RESOURCES AND LIQUIDITY

Capital Resourcesconsist of Shareholder's equity. The following table summarizes the Company's capital resources:

|(in thousands)                                               |                            | March 31,
2003 |         | December 31,
2002
|------------------------------------------------------------ | -------------------------- | -------------- | ------- | -----------------
|Common stock, additional capital paid-in and retained income |                            | $              | 193,736 |                  
|Accumulated other comprehensive income                       |                            |                | 10,726  |                  
|                                                             |                            |                |         |                  
|                                                             | Total shareholder's equity |                | $       | 204,462          
|                                                             |                            |                |         |                  

Shareholder's equityincreased $1.9 million in the first quarter of 2003 when compared to December 31, 2002, due to Net
income of $2.0 million partially offset by a decrease in net unrealized capital gains and losses of $0.1 million.

RISK FACTOR

The following risk factor should be considered in addition to the risk factors identified in the Management's Discussion and Analysis of Financial Condition and
Results of Operations, under the heading "Forward-Looking Statements and Risk Factors" in the Company's Form 10-K filed on March 28, 2003.



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Item 4. Controls and Procedures

Based upon the evaluation of the Company's disclosure controls and procedures conducted within 90 days prior to the date of the filing of this report, the
principal executive officer and the principal financial officer concluded that these disclosure controls and procedures are effective in timely alerting them to material information relating to the
Company (including its consolidated subsidiaries) required to be included in the Company's periodic reports filed with the Securities and Exchange Commission. However, the design of any system of
controls and procedures is based in part upon assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all
potential future conditions, regardless of how remote.

In
addition, there were no significant changes in the Company's internal controls or in other factors that could significantly affect these internal controls subsequent to the date of
their evaluation.

PART II.    OTHER INFORMATION

Item 1.    Legal Proceedings

The discussion "Regulation, Legal Proceedings and Guarantees" in Part I, Item 1, Note 3 of this Form 10-Q is incorporated herein
by reference.

Item 6.    Exhibits and Reports on Form 8-K





SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|             |  | Lincoln Benefit Life Company
(Registrant)                                                                    
|------------ |  | -------------------------------------------------------------------------------------------------------------
|May 13, 2003 |  | By /s/SAMUEL H. PILCHSamuel H. Pilch
(chief accounting officer and duly
authorized officer of the registrant)

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CERTIFICATIONS

I,
Casey J. Sylla, certify that:

|Date:    May 13, 2003 |  | /s/CASEY J. SYLLACasey J. Sylla
Chairman of the Board and Chief Executive Officer
|--------------------- |  | ---------------------------------------------------------------------------------

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I, Steven E. Shebik, certify that:

|Date:    May 13, 2003 |  | /s/STEVEN E. SHEBIKSteven E. Shebik
Senior Vice President and Chief Financial Officer
|--------------------- |  | -------------------------------------------------------------------------------------

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