** **

**UNITED STATES**SECURITIES AND EXCHANGE COMMISSION

**Washington, D.C. 20549**

** **

----

 

**FORM 10-Q**

 

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

**x****QUARTERLY REPORTPURSUANT TO SECTION 13 OR 15(d)**

**OF**

**THESECURITIES EXCHANGE ACT OF 1934**

**FOR THE QUARTERLY PERIOD ENDEDSEPTEMBER 30, 2006**

**OR**

**o****TRANSITION REPORTPURSUANT TO SECTION 13 OR 15(d)**

**OF**

**THESECURITIES EXCHANGE ACT OF 1934**

**Commission file number:333-111553**

** **

**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 84****th Street**      |   |                                  |
| **Lincoln,  Nebraska**                    |   | **68506**                             |
| (Address of  principal executive offices) |   | (Zip code)                            |

** **

**Registrant’s telephone number,including area code: 800-525-9287**

**Indicate bycheck mark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months, and (2) has been subject to such filing requirements forthe past 90 days.**

**Yes****x          No****o**

**Indicate by check mark whetherthe registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer. See definition of “accelerated filer and largeaccelerated filer” in Rule 12b-2 of the Exchange Act.**

| **Large accelerated filer** |   | **Accelerated  filer** |   | **Non-accelerated  filer** |
|-----------------------------|--------|------------------------|--------|----------------------------|
| **o**                       |   | **o**                  |   | **x**                      |

 

**Indicate by check mark whetherthe registrant is a shell company (as defined in Rule 12b-2 of the ExchangeAct).**

**Yes**o          Nox

**None of the common equity of theregistrant is held by non-affiliates. Therefore, the aggregate market value of common equity held bynon-affiliates of the registrant is zero.**

**As of November 7, 2006, theRegistrant had 25,000 common shares, $100 par value, outstanding, all of whichare held by Allstate Life Insurance Company.**

 

 

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##### **LINCOLN BENEFIT LIFE COMPANYINDEX TO QUARTERLY REPORT ON FORM 10-QSeptember 30, 2006**

| **PART I.**  | ** ** | **FINANCIAL INFORMATION**                                                                                                     |   |   |   |
|--------------|------------|-------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|         |       |                                                                                                                          |   |   |   |
| Item  1.     |       | Financial Statements                                                                                                          |   |   |   |
|         |       |                                                                                                                          |   |   |   |
|         |       | Condensed  Statements of Operations for the Three-Month and Nine-Month Periods Ended  September 30, 2006 and 2005 (unaudited) |   | 3      |   |
|         |       |                                                                                                                          |   |   |   |
|         |       | Condensed  Statements of Financial Position as of September 30, 2006 (unaudited) and  December 31, 2005                       |   | 4      |   |
|         |       |                                                                                                                          |   |   |   |
|         |       | Condensed  Statements of Cash Flows for the Nine-Month Periods Ended September 30, 2006  and 2005 (unaudited)                 |   | 5      |   |
|         |       |                                                                                                                          |   |   |   |
|         |       | Notes to Condensed  Financial Statements (unaudited)                                                                          |   | 6      |   |
|         |       |                                                                                                                          |   |   |   |
| Item  2.     |       | Management’s Discussion  and Analysis of Financial Condition and Results of Operations                                   |   | 12     |   |
|         |       |                                                                                                                          |   |   |   |
| Item  4.     |       | Controls and Procedures                                                                                                       |   | 15     |   |
|         |       |                                                                                                                          |   |   |   |
| **PART II.** | ** ** | **OTHER INFORMATION**                                                                                                         |   |   |   |
|         |       |                                                                                                                          |   |   |   |
| Item  1.     |       | Legal Proceedings                                                                                                             |   | 16     |   |
|         |       |                                                                                                                          |   |   |   |
| Item  1A.    |       | Risk Factors                                                                                                                  |   | 16     |   |
|         |       |                                                                                                                          |   |   |   |
| Item  6.     |       | Exhibits                                                                                                                      |   | 16     |   |
|         |       |                                                                                                                          |   |   |   |

 

2

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#### **PART I.FINANCIAL INFORMATION**

#### **ITEM 1.FINANCIAL STATEMENTS**

#### **LINCOLNBENEFIT LIFE COMPANY**

**CONDENSEDSTATEMENTS OF OPERATIONS**

 
|                                                       | ** ** | Three Months Ended | ** ** | **Nine Months Ended** | ** ** |
|-------------------------------------------------------|------------|------------------------------|------------|---------------------------------|------------|
| ** **                                            | ** ** | **September 30,**       | ** ** | **September 30,**          | ** ** |
| **(in thousands)**                               | ** ** | **2006**                     | ** ** | **2005**                        | ** ** | **2006** | ** ** | **2005** | ** ** |
| ** **                                            | ** ** | **(unaudited)**              | ** ** | **(unaudited)**                 | ** ** |
| **Revenues**                                          |       |                         |       |                            |       |   |   |   |   |
| Net investment income                                 |       | $                            | 3,524      |                            | $          | 3,420 |   | $ | 10,481 |   | $ | 10,210 |   |
| Realized capital gains  and losses                    |       | (408                         | )          | —                          |       | (1,255 | ) | (117 | ) |
|                                                  |       |                         |       |                            |       |   |   |   |   |
| **Income from operations before  income tax expense** |       | 3,116                        |       | 3,420                           |       | 9,226 |   | 10,093 |   |
| Income tax expense                                    |       | 1,089                        |       | 1,195                           |       | 3,222 |   | 3,526 |   |
| **Net income**                                        |       | $                            | 2,027      |                            | $          | 2,225 |   | $ | 6,004 |   | $ | 6,567 |   |

 

See notes to condensedfinancial statements.

3

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**LINCOLN BENEFIT LIFE COMPANY**

**CONDENSEDSTATEMENTS OF FINANCIAL POSITION**

 
|                                                                                                          | ** ** | **September 30,** | ** ** | **December 31,** | ** ** |
|----------------------------------------------------------------------------------------------------------|------------|------------------------|------------|-----------------------|------------|
| **($ in thousands, except par value data)**                                | ** ** | **2006**               | ** ** | **2005**              | ** ** |
| ** **                                                                                               | ** ** | **(Unaudited)**        | ** ** | ** **            | ** ** |
|                                                                                                     |       |                   |       |                  |       |
| **Assets**                                                                                               |       |                   |       |                  |       |
| Investments                                                                                              |       |                   |       |                  |       |
| Fixed income securities,  at fair value (amortized cost $263,269 and $266,457)                           |       | $                      | 263,364    |                  | $          | 267,545 |   |
| Short-term                                                                                               |       | 2,613                  |       | 3,824                 |       |
| Total  investments                                                                                       |       | 265,977                |       | 271,369               |       |
|                                                                                                     |       |                   |       |                  |       |
| Cash                                                                                                     |       | 6,893                  |       | 8,349                 |       |
| Reinsurance recoverable  from Allstate Life Insurance Company                                            |       | 19,005,373             |       | 18,350,983            |       |
| Reinsurance recoverable  from non-affiliates                                                             |       | 1,154,137              |       | 1,019,850             |       |
| Receivable from  affiliates                                                                              |       | 31,831                 |       | 10,394                |       |
| Other assets                                                                                             |       | 96,625                 |       | 96,059                |       |
| Separate Accounts                                                                                        |       | 2,954,742              |       | 2,718,509             |       |
| **Total  assets**                                                                                        |       | $                      | 23,515,578 |                  | $          | 22,475,513 |   |
|                                                                                                     |       |                   |       |                  |       |
| **Liabilities**                                                                                          |       |                   |       |                  |       |
| Contractholder funds                                                                                     |       | $                      | 18,088,143 |                  | 17,462,104 |   |
| Reserve for life-contingent  contract benefits                                                           |       | 2,051,177              |       | 1,892,194             |       |
| Unearned premiums                                                                                        |       | 26,252                 |       | 26,992                |       |
| Deferred income taxes                                                                                    |       | 243                    |       | 591                   |       |
| Current income taxes  payable                                                                            |       | 3,222                  |       | 4,769                 |       |
| Other liabilities and  accrued expenses                                                                  |       | 117,189                |       | 101,103               |       |
| Separate Accounts                                                                                        |       | 2,954,742              |       | 2,718,509             |       |
| **Total  liabilities**                                                                                   |       | 23,240,968             |       | 22,206,262            |       |
|                                                                                                     |       |                   |       |                  |       |
| **Commitments and Contingent  Liabilities (Note 3)**                                                     |       |                   |       |                  |       |
| ** **                                                                                               |       |                   |       |                  |       |
| **Shareholder’s equity**                                                                            |       |                   |       |                  |       |
| Common stock, $100 par  value, 30 thousand shares authorized, 25 thousand shares issued and  outstanding |       | 2,500                  |       | 2,500                 |       |
| Additional capital paid-in                                                                               |       | 180,000                |       | 180,000               |       |
| Retained income                                                                                          |       | 92,048                 |       | 86,044                |       |
| Accumulated other  comprehensive income:                                                                 |       |                   |       |                  |       |
| Unrealized net  capital gains and losses                                                                 |       | 62                     |       | 707                   |       |
| **Total  accumulated other comprehensive income**                                                        |       | 62                     |       | 707                   |       |
| **Total  shareholder’s equity**                                                                     |       | 274,610                |       | 269,251               |       |
| **Total liabilities and  shareholder’s equity**                                                     |       | $                      | 23,515,578 |                  | $          | 22,475,513 |   |

See notes to condensedfinancial statements.

 

4

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#### **LINCOLN BENEFIT LIFE COMPANY**

##### **CONDENSED STATEMENTS OF CASH FLOWS**

 
|                                                                                                           | ** ** | **Nine Months Ended  September 30,** | ** ** |
|-----------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------|------------|
| **(in thousands)**                                                                                   | ** ** | **2006**                                            | ** ** | **2005** | ** ** |
| ** **                                                                                                | ** ** | **(Unaudited)**                                     | ** ** |
|                                                                                                      |       |                                                |       |   |   |
| **Cash flows from operating  activities**                                                                 |       |                                                |       |   |   |
| ** **                                                                                                |       |                                                |       |   |   |
| Net income                                                                                                |       | $                                                   | 6,004      |   | $ | 6,567 |   |
| Adjustments to  reconcile net income to net cash provided by operating activities:                        |       |                                                |       |   |   |
| Amortization and  other non-cash items                                                                    |       | 354                                                 |       | 343 |   |
| Realized capital  gains and losses                                                                        |       | 1,255                                               |       | 117 |   |
| Changes in:                                                                                               |       |                                                |       |   |   |
| Reserve for  life-contingent contract benefits and contractholder funds, net of  reinsurance recoverables |       | (3,655                                              | )          | 1,290 |   |
| Income taxes  payable                                                                                     |       | (1,547                                              | )          | 3,564 |   |
| Receivable/payable  to affiliates, net                                                                    |       | (21,437                                             | )          | 28,827 |   |
| Other operating  assets and liabilities                                                                   |       | 24,150                                              |       | (22,716 | ) |
| Net cash  provided by operating activities                                                                |       | 5,124                                               |       | 17,992 |   |
|                                                                                                      |       |                                                |       |   |   |
| **Cash flows from investing  activities**                                                                 |       |                                                |       |   |   |
| ** **                                                                                                |       |                                                |       |   |   |
| Fixed income securities                                                                                   |       |                                                |       |   |   |
| Proceeds from  sales                                                                                      |       | 10,735                                              |       | 3,099 |   |
| Investment  collections                                                                                   |       | 12,358                                              |       | 16,705 |   |
| Investment  purchases                                                                                     |       | (30,884                                             | )          | (58,209 | ) |
| Change in short-term  investments                                                                         |       | 1,211                                               |       | 28,153 |   |
| Net cash used in  investing activities                                                                    |       | (6,580                                              | )          | (10,252 | ) |
|                                                                                                      |       |                                                |       |   |   |
| **Net (decrease) increase in cash**                                                                       |       | (1,456                                              | )          | 7,740 |   |
| **Cash at beginning of period**                                                                           |       | 8,349                                               |       | 10,532 |   |
| **Cash at end of period**                                                                                 |       | $                                                   | 6,893      |   | $ | 18,272 |   |

 

See notes to condensedfinancial statements.

 

5

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**LINCOLNBENEFIT LIFE COMPANYNOTES TO CONDENSED FINANCIAL STATEMENTS(unaudited)**

## **1.   Basis of Presentation**

The accompanyingcondensed financial statements include the accounts of Lincoln Benefit LifeCompany (the “Company”), a wholly owned subsidiary of Allstate Life InsuranceCompany (“ALIC”), which is wholly owned by Allstate Insurance Company (“AIC”),a wholly owned subsidiary of The Allstate Corporation (the “Corporation”).

The condensedfinancial statements and notes as of September 30, 2006, and for thethree-month and nine-month periods ended September 30, 2006 and 2005 areunaudited.  The condensed financialstatements reflect all adjustments (consisting only of normal recurringaccruals) which are, in the opinion of management, necessary for the fairpresentation of the financial position, results of operations and cash flowsfor the interim periods.  These condensedfinancial statements and notes should be read in conjunction with the financialstatements and notes thereto included in the Company’s Annual Report on Form10-K for the year ended December 31, 2005. The results of operations for the interim periods should not beconsidered indicative of results to be expected for the full year.

### **Adopted accounting standards**

*Financial Accounting Standards BoardStaff Position No. FAS 115-1, “The Meaning of Other-Than-Temporary Impairmentand Its Application to Certain Investments”  (“FSP FAS 115-1”)*

The Company adopted Financial Accounting StandardsBoard (“FASB”) FSP FAS 115-1 as of January 1, 2006.  FSP FAS 115-1 nullifies the guidance inparagraphs 10-18 of Emerging Issues Task Force Issue No. 03-1 (“EITF Issue 03-1”),“The Meaning of Other-Than-Temporary Impairment and Its Application to CertainInvestments” and references existing other-than-temporary impairmentguidance.  FSP FAS 115-1 clarifies thatan investor should recognize an impairment loss no later than when theimpairment is deemed other-than-temporary, even if a decision to sell thesecurity has not been made, and also provides guidance on the subsequentaccounting for income recognition on an impaired debt security.  The adoption of FSP FAS 115-1 was required ona prospective basis and did not have a material effect on the results ofoperations or financial position of the Company.

*Statement of Financial Accounting Standards No. 154, “AccountingChanges and Error Corrections” (“SFAS No. 154”)*

TheCompany adopted SFAS No. 154 on January 1, 2006.  SFAS No. 154 replaces Accounting PrinciplesBoard (“APB”) Opinion No. 20, “Accounting Changes”, and SFAS No. 3, “ReportingAccounting Changes in Interim Financial Statements”.  SFAS No. 154 requires retrospectiveapplication to prior periods’ financial statements for changes in accountingprinciple, unless determination of either the period specific effects or thecumulative effect of the change is impracticable or otherwise promulgated.  The Company had no accounting changes orerror corrections affected by the new standard.

### **Pending accounting standards**

*Statement of Position 05-01, “Accounting by InsuranceEnterprises for Deferred Acquisition Costs in Connection with Modifications orExchanges of Insurance Contracts” (“SOP 05-1”)*

In October 2005, theAmerican Institute of Certified Public Accountants (“AICPA”) issued SOP05-1.   SOP 05-1 provides accountingguidance for deferred policy acquisition costs associated with internalreplacements of insurance and investment contracts other than those alreadydescribed in SFAS No. 97, “Accounting and Reporting by Insurance Enterprisesfor Certain Long-Duration Contracts and for Realized Gains and Losses from theSale of Investments”.  SOP 05-1 definesan internal replacement as a modification in product benefits, features, rightsor coverages that occurs by the exchange of a contract for a new contract, orby amendment, endorsement or rider to a contract, or by the election of afeature or coverage within a contract. The provisions of SOP 05-1 are effective for internal replacementsoccurring in fiscal years beginning after December 15, 2006.  The Company is currently assessing the impactof the SOP on its results of operations and financial position. Based on theissued standard, the Company does not expect the impact of the adoption to havea material effect on its results of operations or financial position; however,the standard is currently under review and clarifications or revisions may beissued by the AICPA and/or the FASB that could affect the Company’s impactassessment.  Any impact resulting fromthe adoption of SOP 05-1 on the Company’s results of operations will be cededto ALIC under the terms of the reinsurance agreements.

6

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*Financial Accounting Standards BoardInterpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”)*

InJuly 2006, the FASB issued FIN 48, which clarifies the accounting foruncertainty in income taxes recognized in an entity’s financial statements inaccordance with FASB Statement No. 109, “Accounting for Income Taxes”.  FIN 48 requires an entity to recognize thetax benefit of tax positions only when it is more likely than not, based on theposition’s technical merits, that the position would be sustained uponexamination by the respective taxing authorities.  The tax benefit is measured as the largestbenefit that is more than fifty percent likely of being realized upon finalsettlement with the respective taxing authorities.   FIN 48 is effective for fiscal yearsbeginning after December 15, 2006.  FIN48 is not expected to have a material effect on the results of operations orfinancial position of the Company.

*SFAS No. 157, “Fair ValueMeasurements” (“SFAS No. 157”)*

InSeptember 2006, the FASB issued SFAS No. 157 which defines fair value,establishes a framework for measuring fair value in generally acceptedaccounting principles (“GAAP”), and expands disclosures about fair valuemeasurements.  SFAS No. 157 applies whereother accounting pronouncements require or permit fair value measurements; itdoes not require any new fair value measurements under GAAP.  SFAS No. 157 is effective for fiscal yearsbeginning after November 15, 2007.  Theeffects of adoption will be determined by the types of instruments carried atfair value in the Company’s financial statements at the time of adoption aswell as the method utilized to determine their fair values prior to adoption.  Based on the Company’s current use of fairvalue measurements, SFAS No. 157 is not expected to have a material effect onthe results of operations or financial position of the Company.

*Securities and ExchangeCommission (“SEC”) Staff Accounting Bulletin No. 108, “Considering the Effectsof Prior Year Misstatements when Quantifying Misstatements in Current YearFinancial Statements” (“SAB 108”)*

InSeptember 2006, the SEC issued SAB 108 in order to eliminate the diversity ofpractice in the process by which misstatements are quantified for purposes ofassessing materiality on the financial statements.  SAB 108 establishes a single quantificationframework wherein the significance measurement is based on the effects of themisstatements on each of the financial statements as well as the relatedfinancial statement disclosures.  If acompany’s existing methods for assessing the materiality of misstatements arenot in compliance with the provisions of SAB 108, the initial application ofthe provisions may be adopted by restating prior period financial statementsunder certain circumstances or otherwise by recording the cumulative effect ofinitially applying the provisions of SAB 108 as adjustments to the carryingvalues of assets and liabilities as of January 1, 2006 with an offsettingadjustment recorded to the opening balance of retained earnings.  The provisions of SAB 108 must be applied nolater than the annual financial statements issued for the first fiscal year endingafter November 15, 2006.  The Company’sadoption of SAB 108 in the fourth quarter of 2006 for the fiscal year thenended is not expected to have a material effect on its results of operations orfinancial position.

7

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## **2.****              Reinsurance**

The Company hasreinsurance agreements under which it reinsures all of its business to ALIC orother non-affiliated reinsurers.  Underthe agreements, premiums, contract charges, interest credited to contractholderfunds, contract benefits and certain expenses are reinsured.  The Company continues to have primaryliability as the direct insurer for risks reinsured.

Investment incomeearned on the assets which support contractholder funds and the reserve forlife-contingent contract benefits is not included in the condensed financialstatements as those assets are owned and managed by ALIC or third partyreinsurers under terms of the reinsurance agreements.  The timing of the transfer of funds under thereinsurance agreements may result in fluctuations in net cash provided by operatingactivities in the Condensed Statements of Cash Flows.

The effects ofreinsurance on premiums and contract charges are as follows:
|                                                    | ** ** | **Three Months Ended** | ** ** | **Nine Months Ended** | ** ** |
|----------------------------------------------------|------------|----------------------------------|------------|---------------------------------|------------|
| ** **                                         | ** ** | **September 30,**           | ** ** | **September 30,**          | ** ** |
| **(in  thousands)**                                | ** ** | **2006**                         | ** ** | **2005**                        | ** ** | **2006** | ** ** | **2005** | ** ** |
| ** **                                         |       |                             |       |                            |       |   |   |   |   |
| **Premiums  and contract charges**                 |       |                             |       |                            |       |   |   |   |   |
| Direct                                             |       | $                                | 237,789    |                            | $          | 211,928 |   | $ | 691,334 |   | $ | 613,524 |   |
| Assumed-non-affiliate                              |       | 1,133                            |       | 1,614                           |       | 6,054 |   | 4,217 |   |
| Ceded                                              |       |                             |       |                            |       |   |   |   |   |
| Affiliate                                          |       | (136,098                         | )          | (116,993                        | )          | (401,069 | ) | (339,448 | ) |
| Non-affiliate                                      |       | (102,824                         | )          | (96,549                         | )          | (296,319 | ) | (278,293 | ) |
| Premiums and  contract charges, net of reinsurance |       | $                                | —     |                            | $          | — |   | $ | — |   | $ | — |   |

 

Theeffects of reinsurance on interest credited to contractholder funds, contractbenefits and certain other expenses are as follows:
|                                                                                                               | ** ** | **Three Months Ended** | ** ** | **Nine Months Ended** | ** ** |
|---------------------------------------------------------------------------------------------------------------|------------|----------------------------------|------------|---------------------------------|------------|
| ** **                                                                                                    | ** ** | **September 30,**           | ** ** | **September 30,**          | ** ** |
| **(in thousands)**                                                                                       | ** ** | **2006**                         | ** ** | **2005**                        | ** ** | **2006** | ** ** | **2005** | ** ** |
| ** **                                                                                                    | ** ** | ** **                       | ** ** | ** **                      | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Interest  credited to contractholder funds, contract benefits and certain other  expenses**                 |       |                             |       |                            |       |   |   |   |   |
| Direct                                                                                                        |       | $                                | 521,165    |                            | $          | 451,731 |   | $ | 1,420,646 |   | $ | 1,488,143 |   |
| Assumed-non-affiliate                                                                                         |       | 1,829                            |       | 2,050                           |       | 6,706 |   | 5,168 |   |
| Ceded                                                                                                         |       |                             |       |                            |       |   |   |   |   |
| Affiliate                                                                                                     |       | (392,321                         | )          | (344,857                        | )          | (1,069,095 | ) | (1,142,824 | ) |
| Non-affiliate                                                                                                 |       | (130,673                         | )          | (108,924                        | )          | (358,257 | ) | (350,487 | ) |
| Interest  credited to contractholder funds, contract benefits and certain other  expenses, net of reinsurance |       | $                                | —     |                            | $          | — |   | $ | — |   | $ | — |   |

##  

8

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## **3.  Guarantees and Contingent Liabilities**

## **Guarantees**

In the normalcourse of business, the Company provides standard indemnifications tocounterparties in contracts in connection with numerous transactions, includingacquisitions and divestitures.  The typesof indemnifications typically provided include indemnifications for breaches ofrepresentations and warranties, taxes and certain other liabilities, such asthird party lawsuits.  Theindemnification clauses are often standard contractual terms and were enteredinto in the normal course of business based on an assessment that the risk ofloss would be remote.  The terms of theindemnifications vary in duration and nature. In many cases, the maximum obligation is not explicitly stated and thecontingencies triggering the obligation to indemnify have not occurred and arenot expected to occur.  Consequently, themaximum amount of the obligation under such indemnifications is notdeterminable.  Historically, the Companyhas not made any material payments pursuant to these obligations.

The aggregate liabilitybalance related to all guarantees was not material as of September 30, 2006.

## **Regulation**

The Company is subject tochanging social, economic and regulatory conditions.  From time to time regulatory authorities orlegislative bodies seek to impose additional regulations regarding agent andbroker compensation and otherwise expand overall regulation of insuranceproducts and the insurance industry.  Theultimate changes and eventual effects of these initiatives on the Company’sbusiness, if any, are uncertain.

**Legaland regulatory proceedings and inquiries**

**Background**

The Company and certainaffiliates are involved in a number of lawsuits, regulatory inquiries, andother legal proceedings arising out of various aspects of its business.  As background to the “Proceedings”sub-section below, please note the following:

·                  Thesematters raise difficult and complicated factual and legal issues and aresubject to many uncertainties and complexities, including but not limited to,the underlying facts of each matter; novel legal issues; variations betweenjurisdictions in which matters are being litigated, heard or investigated;differences in applicable laws and judicial interpretations; the length of timebefore many of these matters might be resolved by settlement, throughlitigation or otherwise and, in some cases, the timing of their resolutionsrelative to other similar matters involving other companies; the fact that someof the lawsuits are putative class actions in which a class has not beencertified and in which the purported class may not be clearly defined; the factthat some of the lawsuits involve multi-state class actions in which theapplicable law(s) for the claims at issue is in dispute and therefore unclear;and the current challenging legal environment faced by large corporations andinsurance companies.

·                  Inthe lawsuits, plaintiffs seek a variety of remedies including equitable reliefin the form of injunctive and other remedies and monetary relief in the form ofcontractual and extra-contractual damages. In some cases, the monetary damages sought include punitivedamages.  Often specific informationabout the relief sought, such as the amount of damages, is not availablebecause plaintiffs have not requested specific relief in their pleadings.  In our experience, when specific monetarydemands are made in pleadings, they bear little relation to the ultimate loss,if any, to the Company.

·                  Inconnection with regulatory examinations and proceedings, government authoritiesmay seek various forms of relief, including penalties, restitution and changesin business practices.  The Company maynot be advised of the nature and extent of relief sought until the final stagesof the examination or proceeding.

9

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·                  Forthe reasons specified above, it is often not possible to make meaningfulestimates of the amount or range of loss that could result from the mattersdescribed below in the “Proceedings” subsection.  The Company reviews these matters on anon-going basis and follows the provisions of SFAS No. 5, “Accounting forContingencies” when making accrual and disclosure decisions.  When assessing reasonably possible andprobable outcomes, the Company bases its decisions on its assessment of theultimate outcome following all appeals.

·                  Dueto the complexity and scope of the matters disclosed in the “Proceedings”subsection below and the many uncertainties that exist, the ultimate outcome ofthese matters cannot be reasonably predicted. In the event of an unfavorable outcome in one or more of these matters,the ultimate liability may be in excess of amounts currently reserved and maybe material to the Company’s operating results or cash flows for a particularquarter or annual period.  However, basedon information currently known to it, management believes that the ultimateoutcome of all matters described below as they are resolved over time is notlikely to have a material adverse effect on the financial position of theCompany.

**Proceedings**

Legal proceedings involving Allstate agencies and AICmay impact the Company, even when the Company is not directly involved, becausethe Company sells its products through a variety of distribution channelsincluding Allstate agencies. Consequently, information about the moresignificant of these proceedings is provided in the following paragraph.

AIC is defending certain matters relating to itsagency program reorganization announced in 1999. These matters include alawsuit filed in December 2001 by the U.S. Equal Employment OpportunityCommission (“EEOC”) alleging retaliation under federal civil rights laws (the “EEOCI” suit) and a class action filed in August 2001 by former employee agentsalleging retaliation and age discrimination under the Age Discrimination inEmployment Act (“ADEA”), breach of contract and ERISA violations (the “Romero I”suit).  In March 2004, in theconsolidated EEOC I and Romero I litigation, the trial court issued amemorandum and order that, among other things, certified classes of agents,including a mandatory class of agents who had signed a release, for purposes ofeffecting the court’s declaratory judgment that the release is voidable at theoption of the release signer.  The courtalso ordered that an agent who voids the release must return to AIC “any andall benefits received by the [agent] in exchange for signing the release.”  The court also stated that, “on theundisputed facts of record, there is no basis for claims of age discrimination.”  The EEOC and plaintiffs have asked the courtto clarify and/or reconsider its memorandum and order.  The case otherwise remains pending.  The EEOC also filed another  lawsuit in October 2004 alleging age discriminationwith respect to a policy limiting the rehire of agents affected by the agencyprogram reorganization (the “EEOC II” suit). In EEOC II, in October 2006, the court granted partial summary judgmentto the EEOC.  Although the court did notdetermine that AIC was liable for age discrimination under the ADEA, itdetermined that the rehire policy resulted in a disparate impact, reserving fortrial the determination on whether AIC had reasonable factors other than age tosupport the rehire policy.  AIC is alsodefending a certified class action filed by former employee agents whoterminated their employment prior to the agency program reorganization.  These plaintiffs have asserted breach ofcontract and ERISA claims. A putative nationwide class action has also beenfiled by former employee agents alleging various violations of ERISA, includinga worker classification issue.  Theseplaintiffs are challenging certain amendments to the Agents Pension Plan andare seeking to have exclusive agent independent contractors treated asemployees for benefit purposes.  Thismatter was dismissed with prejudice by the trial court, was the subject offurther proceedings on appeal, and was reversed and remanded to the trial courtin April 2005.  In all of these variousmatters, plaintiffs seek compensatory and punitive damages, and equitablerelief.  AIC has been vigorouslydefending these lawsuits and other matters related to its agency programreorganization.  The outcome of thesedisputes is currently uncertain.

 

10

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**Other Matters**

The Corporation and some of its subsidiaries,including the Company, have received interrogatories and demands forinformation from regulatory and enforcement authorities relating to variousinsurance products and practices.  Theareas of inquiry include variable annuity market timing and late trading.  The Corporation and some of its subsidiaries,including the Company, have also received interrogatories and demands forinformation from authorities seeking information relevant to on-going investigationsinto the possible violation of antitrust or insurance laws by unnamed partiesand, in particular, seeking information as to whether any person engaged inactivities for the purpose of price fixing, market allocation, or bid rigging.  The Company believes that these inquiries aresimilar to those made to many financial services companies as part ofindustry-wide investigations by various authorities into the practices,policies and procedures relating to insurance and financial services products.   The Corporation and its subsidiaries haveresponded and will continue to respond to these inquiries.

## Various otherlegal and regulatory actions are currently pending that involve the Company andspecific aspects of its conduct of business. Like other members of theinsurance industry, the Company is the target of a number of lawsuits andproceedings, some of which involve claims for substantial or indeterminateamounts. These actions are based on a variety of issues and target a range ofthe Company’s practices. The outcome of these disputes is currentlyunpredictable.

## However, basedon information currently known to it and the existence of the reinsuranceagreements with ALIC, management believes that the ultimate outcome of allmatters described in this “Other Matters” subsection, in excess of amountscurrently reserved, as they are resolved over time is not likely to have amaterial effect on the operating results, cash flows or financial position ofthe Company.

## **4.   Other Comprehensive Income**

The components ofother comprehensive income (loss) on a pretax and after-tax basis are asfollows:
|                                                                         | ** ** | **Three Months Ended September 30,** | ** ** |
|-------------------------------------------------------------------------|------------|----------------------------------------------------------|------------|
| **(in thousands)**                                                 | ** ** | **2006**                                                 | ** ** | **2005** | ** ** |
| ** **                                                              | ** ** | ** **                                               | ** ** | ** ** | ** ** | **After-** | ** ** | ** ** | ** ** | ** ** | ** ** | **After-** | ** ** |
| ** **                                                              | ** ** | **Pretax**                                               | ** ** | **Tax** | ** ** | **tax** | ** ** | **Pretax** | ** ** | **Tax** | ** ** | **tax** | ** ** |
| * *                                                                | * *   | * *                                                 | * *   | * * | * * | * * | * * | * * | * * | * * | * * | * * | * * |
| Unrealized  holding gains (losses) arising during the period            |       | $                                                        | 6,450      |   | $(2,257 | ) | $4,193 |   | $ | (5,766 | ) | $ | 2,018 |   | $ | (3,748 | ) |
| Less:  reclassification adjustment of realized capital gains and losses |       | (408                                                     | )          | 143 |   | (265 | ) | — |   | — |   | — |   |
| Other comprehensive  income (loss)                                      |       | $                                                        | 6,858      |   | $(2,400 | ) | 4,458 |   | $ | (5,766 | ) | $ | 2,018 |   | (3,748 | ) |
|                                                                    |       |                                                     |       |   |   |   |   |   |   |   |   |   |   |
| Net income                                                              |       |                                                     |       |   |   | 2,027 |   |   |   |   |   | 2,225 |   |
|                                                                    |       |                                                     |       |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income  (loss)                                            |       |                                                     |       |   |   | $6,485 |   |   |   |   |   | $ | (1,523 | ) |

 
|                                                                         | ** ** | **Nine Months Ended September 30,** | ** ** |
|-------------------------------------------------------------------------|------------|---------------------------------------------------------|------------|
| **(in thousands)**                                                 | ** ** | **2006**                                                | ** ** | **2005** | ** ** |
| ** **                                                              | ** ** | ** **                                              | ** ** | ** ** | ** ** | **After-** | ** ** | ** ** | ** ** | ** ** | ** ** | **After-** | ** ** |
| ** **                                                              | ** ** | **Pretax**                                              | ** ** | **Tax** | ** ** | **Tax** | ** ** | **Pretax** | ** ** | **Tax** | ** ** | **Tax** | ** ** |
| * *                                                                | * *   | * *                                                | * *   | * * | * * | * * | * * | * * | * * | * * | * * | * * | * * |
| Unrealized  holding losses arising during the period                    |       | $                                                       | (2,233     | ) | $ | 782 |   | $ | (1,451 | ) | $ | (5,319 | ) | $ | 1,862 |   | $ | (3,457 | ) |
| Less:  reclassification adjustment of realized capital gains and losses |       | (1,240                                                  | )          | 434 |   | (806 | ) | (117 | ) | 41 |   | (76 | ) |
| Other  comprehensive loss                                               |       | $                                                       | (993       | ) | $ | 348 |   | (645 | ) | $ | (5,202 | ) | $ | 1,821 |   | (3,381 | ) |
|                                                                    |       |                                                    |       |   |   |   |   |   |   |   |   |   |   |
| Net income                                                              |       |                                                    |       |   |   | 6,004 |   |   |   |   |   | 6,567 |   |
|                                                                    |       |                                                    |       |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income                                                    |       |                                                    |       |   |   | $ | 5,359 |   |   |   |   |   | $ | 3,186 |   |

 

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**Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS FOR THETHREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2006 AND 2005.**

## **OVERVIEW**

The followingdiscussion highlights significant factors influencing the financial positionand results of operations of Lincoln Benefit Life Company (referred to in thisdocument as “we”, “our”, “us” or the “Company”).  It should be read in conjunction with thecondensed financial statements and notes thereto found under Part I. Item 1.contained herein, and with the discussion, analysis, financial statements andnotes thereto in Part I. Item 1. and Part II. Item 7. and Item 8. of theLincoln Benefit Life Company Annual Report on Form 10-K for 2005.  We operate as a single segment entity, basedon the manner in which we use financial information to evaluate businessperformance and to determine the allocation of resources.

## **OPERATIONS**

 

|                                    | ** ** | **Three  Months Ended  September 30,** | ** ** | **Nine  Months Ended  September 30,** | ** ** |
|------------------------------------|------------|----------------------------------------|------------|---------------------------------------|------------|
| **(in thousands)**            | ** ** | **2006**                               | ** ** | **2005**                              | ** ** | **2006** | ** ** | **2005** | ** ** |
|                               |       |                                   |       |                                  |       |   |   |   |   |
| Net investment  income             |       | $                                      | 3,524      |                                  | $          | 3,420 |   | $ | 10,481 |   | $ | 10,210 |   |
| Realized capital  gains and losses |       | (408                                   | )          | -                                     |       | (1,255 | ) | (117 | ) |
| Income tax  expense                |       | (1,089                                 | )          | (1,195                                | )          | (3,222 | ) | (3,526 | ) |
| Net income                         |       | $                                      | 2,027      |                                  | $          | 2,225 |   | $ | 6,004 |   | $ | 6,567 |   |

 

We havereinsurance agreements whereby all premiums, contract charges, interestcredited to contractholder funds, contract benefits and certain expenses areceded to Allstate Life Insurance Company (“ALIC”) and certain non-affiliatedreinsurers, and reflected net of such reinsurance in the Condensed Statementsof Operations.  Our results of operationsinclude net investment income and realized capital gains and losses on ourassets that are not transferred under the reinsurance agreements.

On June 1, 2006,ALIC, its subsidiary, Allstate Life Insurance Company of New York, and TheAllstate Corporation completed the disposal of substantially all of theirvariable annuity business pursuant to a definitive agreement with PrudentialFinancial, Inc. and its subsidiary, The Prudential Insurance Company ofAmerica (“collectively Prudential”), which was entered into on March 8, 2006.The disposal was effected through a combination of coinsurance and modifiedcoinsurance reinsurance agreements.  The Company is not a directparticipant in this agreement and its reinsurance agreements with ALIC remainunchanged.

**Net income** decreased 8.9% and 8.6%in the third quarter and the first nine months of 2006, respectively, comparedto the same periods in 2005.  Thedeclines were due to higher net realized capital losses, partially offset byincreased net investment income.

**Net investment income** increased 3.0%in the third quarter and 2.7% in the first nine months of 2006 compared to thesame periods of 2005 due primarily to increased investment yields.

**Net realized capital losses**increased $408 thousand and $1.14 million in the third quarter and first ninemonths of 2006, respectively, when compared to 2005 due to higher losses ondispositions of fixed income securities.

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**FINANCIAL POSITION**

|                                                | ** ** | **September 30,** | ** ** | **December 31,** | ** ** |
|------------------------------------------------|------------|------------------------|------------|-----------------------|------------|
| **(in thousands)**                        | ** ** | **2006**               | ** ** | **2005**              | ** ** |
| Fixed income  securities (1)                   |       | $                      | 263,364    |                  | $          | 267,545 |   |
| Short-term                                     |       | 2,613                  |       | 3,824                 |       |
| Total investments                              |       | $                      | 265,977    |                  | $          | 271,369 |   |
|                                           |       |                   |       |                  |       |
| Cash                                           |       | $                      | 6,893      |                  | $          | 8,349 |   |
|                                           |       |                   |       |                  |       |
| Reinsurance  recoverable from ALIC             |       | 19,005,373             |       | 18,350,983            |       |
|                                           |       |                   |       |                  |       |
| Reinsurance  recoverable from non-affiliates   |       | 1,154,137              |       | 1,019,850             |       |
|                                           |       |                   |       |                  |       |
| Contractholder  funds                          |       | 18,088,143             |       | 17,462,104            |       |
|                                           |       |                   |       |                  |       |
| Reserve for  life-contingent contract benefits |       | 2,051,177              |       | 1,892,194             |       |
|                                           |       |                   |       |                  |       |
| Separate Accounts  assets and liabilities      |       | 2,954,742              |       | 2,718,509             |       |

----

(1)             Fixedincome securities are carried at fair value. Amortized cost basis for these securities was $263.3 million and $266.5million at September 30, 2006 and December 31, 2005, respectively.

Total investmentsdecreased to $266.0 million at September 30, 2006 from $271.4 million atDecember 31, 2005 due to the disposition of fixed income securities and adecline in unrealized net capital gains.

At September 30, 2006, all securities in the fixed income portfolio wererated investment grade, which is defined as a security having a rating from theNational Association of Insurance Commissioners (“NAIC”) of 1 or 2; a rating ofAaa, Aa, A or Baa from Moody’s or a rating of AAA, AA, A or BBB from S&P,Fitch or Dominion; or a comparable internal rating if an externally providedrating is not available.

The unrealized net capital gains on fixed income securities at September30, 2006 were $95 thousand, compared to unrealized net capital gains of $1.1million at December 31, 2005.  Thenet unrealized gains were comprised of $4.6 million of unrealized gains and$4.5 million of unrealized losses at September 30, 2006.  The unrealized gains at December 31, 2005were comprised of $5.3 million of unrealized gains and $4.2 million ofunrealized losses.

Of the total grossunrealized losses at September 30, 2006, $1.9 million or 42.2% were related tosecurities in our corporate fixed income securities portfolio and are believedto be a result of a rising interest rate environment or company specificissues.  These losses were primarilycomprised of losses in the financial services, capital goods and consumer goodssectors.  Of the remaining $2.6 millionof unrealized losses, $1.4 million or 53.8% were related to securities in ourU.S. government and government agencies portfolio and are believed to beinterest rate related.

Our portfolio monitoring process identifies andevaluates, on a case-by-case basis, fixed income securities whose carryingvalue may be other-than-temporarily impaired. The process includes a quarterly review of all securities using ascreening process to identify those securities whose fair value compared toamortized cost is below established thresholds for certain time periods, orwhich are identified through other monitoring criteria such as ratingsdowngrades or payment defaults.  As aresult of approved programs involving the disposition of investments such aschanges in duration and revisions to strategic asset allocations, and certaindispositions anticipated by portfolio managers, we also conduct a portfolioreview to recognize impairment on securities in an unrealized loss position forwhich we do not have the intent and ability to hold until recovery.  All securities in an unrealized loss positionat September 30, 2006 were included in our portfolio monitoring process fordetermining which declines in value were not other-than-temporary.

  We also monitor the quality of our fixedincome portfolio by categorizing certain investments as “problem”, “restructured”or “potential problem.”  Problem fixedincome securities are securities in default with respect to principal orinterest and/or securities issued by companies that have gone into bankruptcysubsequent to our acquisition of the security. Restructured fixed income securities have rates and terms that are notconsistent with market rates or terms prevailing at the time of therestructuring.  Potential problem fixedincome securities are current with respect to contractual principal and/orinterest, but because of other facts and circumstances, we have concernsregarding the borrower’s ability to pay future principal and interest, whichcauses us to believe these securities may be classified as problem orrestructured in the future.

As of September30, 2006 and December 31, 2005, we had no securities categorized as “problem”, “restructured”or “potential problem”.

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**NetRealized Capital Gains and Losses** The following tablepresents the components of realized capital gains and losses and the relatedtax effect.
|                                               | ** ** | **Three Months Ended  September 30,** | ** ** | **Nine Months Ended  September 30,** | ** ** |
|-----------------------------------------------|------------|------------------------------------------------------|------------|-----------------------------------------------------|------------|
| (in thousands)                           | ** ** | **2006**                                             | ** ** | **2005**                                            | ** ** | **2006** | ** ** | **2005** | ** ** |
|                                          |       |                                                 |       |                                                |       |   |   |   |   |
| Dispositions                                  |       | $                                                    | (408       | )                                                   | $          | - |   | $ | (1,255 | ) | $ | (117 | ) |
| Realized capital  gains and losses, pretax    |       | (408                                                 | )          | -                                                   |       | (1,255 | ) | (117 | ) |
| Income tax  benefit                           |       | 143                                                  |       | -                                                   |       | 439 |   | 41 |   |
| Realized capital gains  and losses, after-tax |       | $                                                    | (265       | )                                                   | $          | - |   | $ | (816 | ) | $ | (76 | ) |

 

Dispositions in the above table include sales andother transactions such as calls and prepayments.  We may sell fixed income securities duringthe period in which fair value has declined below amortized cost.  In certain situations, new factors such asnegative developments, subsequent credit deterioration, relative valueopportunities, market liquidity concerns and portfolio reallocations cansubsequently change our previous intent to continue holding a security.

## **Reinsurancerecoverable, Contractholder funds and Reserve for life-contingent contractbenefits**

Contractholderfunds increased $626.0 million to $18.09 billion at September 30, 2006, from$17.46 billion at December 31, 2005 as a result of new and additional depositson fixed annuities and interest-sensitive life products and interest creditedto contractholder funds, partiallyoffset by surrenders, withdrawals and benefit payments.  The reserve for life-contingent contractbenefits increased $159.0 million to $2.05 billion at September 30, 2006resulting from sales of immediate annuities with life contingencies and otherlife-contingent products, partially offset by benefits paid and policylapses.  Reinsurance recoverable fromALIC and reinsurance recoverable from non-affiliates increased correspondinglyby $654.4 million and $134.3 million, respectively.

We purchasereinsurance after evaluating the financial condition of the reinsurer, as wellas the terms and price of coverage.  Wereinsure certain of our risks to non-affiliated reinsurers under yearlyrenewable term and coinsurance agreements. Yearly renewable term and coinsurance agreements result in the passingof the agreed-upon portion of risk to the reinsurers in exchange for negotiatedreinsurance premium payments.

## **CAPITALRESOURCES AND LIQUIDITY**

**CapitalResources**consist of shareholder’s equity.  The following table summarizes our capitalresources:

| (in thousands)                                           | ** ** | **September 30, 2006** | ** ** | **December 31, 2005** | ** ** |
|---------------------------------------------------------------|------------|----------------------------------|------------|---------------------------------|------------|
| Common stock,  additional capital paid-in and retained income |       | $                                | 274,548    |                            | $          | 268,544 |   |
| Accumulated  other comprehensive income                       |       | 62                               |       | 707                             |       |
| Total  shareholder’s equity                              |       | $                                | 274,610    |                            | $          | 269,251 |   |

 

*Shareholder’sequity* increased in the first nine months of 2006 due to netincome, partially offset by lower unrealized capital gains and losses.

**FinancialRatings and Strength** We share the insurance financial strength ratings of our parent, ALIC,as our business is reinsured to ALIC. ALIC’s ratings are influenced by many factors including operating andfinancial performance, asset quality, liquidity, asset/liability management,overall portfolio mix, financial leverage (i.e., debt), exposure to risks, thecurrent level of operating leverage, Allstate Insurance Company’s (“AIC”)ratings and other factors.  There havebeen no changes to ALIC’s insurance financial strength ratings since December31, 2005.

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## **Item4.    Controlsand Procedures**

*Evaluationof Disclosure Controls and Procedures. *Wemaintain disclosure controls and procedures as defined in Rule 13a-15(e) and15(d)-15(e) under the Securities Exchange Act of 1934.  Under the supervision and with theparticipation of our management, including our principal executive officer andprincipal financial officer, we conducted an evaluation of the effectiveness ofour disclosure controls and procedures as of the end of the period covered bythis report.  Based upon this evaluation,the principal executive officer and the principal financial officer concludedthat our disclosure controls and procedures are effective in providingreasonable assurance that material information required to be disclosed in ourreports filed with or submitted to the Securities and Exchange Commission underthe Securities Exchange Act is made known to management, including theprincipal executive officer and the principal financial officer, as appropriateto allow timely decisions regarding required disclosure.

*Changesin Internal Control over Financial Reporting. *During the fiscal quarter ended September 30, 2006,there have been no changes in our internal control over financial reportingthat have materially affected, or are reasonably likely to materially affect,our internal control over financial reporting.

 

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## **PARTII.  OTHER INFORMATION**

## **Item1. Legal Proceedings**

Informationrequired for this Part II, Item 1, is incorporated by reference to thediscussion under the heading “Regulation” and under the heading “Legal andregulatory proceedings and inquires” in Note 3 of the Company’s CondensedFinancial Statements in Part I, Item 1, of this Form 10-Q.

**Item 1A.Risk Factors**

Thisdocument contains “forward-looking statements” that anticipate results based onour estimates, assumptions and plans that are subject to uncertainty. Thesestatements are made subject to the safe-harbor provisions of the PrivateSecurities Litigation Reform Act of 1995. We assume no obligation to update anyforward-looking statements as a result of new information or future events ordevelopments.

Theseforward-looking statements do not relate strictly to historical or currentfacts and may be identified by their use of words like “plans,” “seeks,”“expects,” “will,” “should,” “anticipates,” “estimates,” “intends,” “believes,”“likely,” “targets” and other words with similar meanings. These statements mayaddress, among other things, our strategy for growth, product development,regulatory approvals, market position, expenses, financial results, litigationand reserves. We believe that these statements are based on reasonableestimates, assumptions and plans. However, if the estimates, assumptions orplans underlying the forward-looking statements prove inaccurate or if otherrisks or uncertainties arise, actual results could differ materially from thosecommunicated in these forward-looking statements. Risk factors which couldcause actual results to differ materially from those suggested by suchforward-looking statements include but are not limited to those discussed oridentified in this document, in our public filings with the Securities andExchange Commission, and those in Part I, Item 1A of Lincoln Benefit LifeCompany Annual Report on Form 10-K for 2005, which are hereby incorporatedherein by reference.  There have been nomaterial changes from the risk factors previously disclosed in our AnnualReport on Form 10-K.

## **Item 6.Exhibits**

(a)  Exhibits

An Exhibit Index has been filed as part of this report on page E-1.

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## **SIGNATURE**

Pursuant to therequirements of the Securities Exchange Act of 1934, the Registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.

Lincoln Benefit Life Company

(Registrant)

November 7, 2006
|        | By                                                                    | /s/ Samuel H. Pilch |   |
|--------|-----------------------------------------------------------------------|---------------------|--------|
|   |                                                                  |
|   | Samuel H. Pilch                                                       |
|   | Controller                                                            |
|   | (chief accounting officer and duly authorized  officer of Registrant) |

 

17

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| Exhibit No. | ** ** | **Description** |
|-------------|------------|-----------------|
|        |       |            |
| 31.1        |       |            | Rule 15d-14(a) Certification of Principal Executive  Officer |
|        |       |            |   |
| 31.2        |       |            | Rule 15d-14(a) Certification of Principal Financial  Officer |
|        |       |            |   |
| 32          |       |            | Section 1350 Certifications |

 

E-1

----