FORM 10-Q

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

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

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

                  For the quarterly period ended: June 30, 1999

                                       OR

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

Commission file number:   333-59765
                          333-59769

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

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

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

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

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

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

Yes. . ./X/. .       No

     Indicate  the  number of shares of each of the  issuer's  classes of common
stock as of June 30,  1999;  there were 25,000  shares of common  capital  stock
outstanding,  par value $100 per share all of which  shares are held by Allstate
Life Insurance Company.


<PAGE>
<TABLE>
<CAPTION>

                     PART I - FINANCIAL INFORMATION
<S>        <C>                                                              <C>

Item 1.    FINANCIAL STATEMENTS

           Consolidated Statements of Financial Position
           June 30, 1999 (Unaudited) and December 31,1998................     3

           Consolidated Statements of Operations
           Three Months Ended June 30, 1999 and June 30, 1998,
           and Six Months Ended June 30, 1999 and June 30, 1998
           (Unaudited)...................................................     4

           Consolidated Statements of Cash Flows
           Six Months Ended June 30, 1999 and June 30, 1998
           (Unaudited)...................................................     5


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


Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................    11

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


                       PART II OTHER INFORMATION

Item 1.    LEGAL PROCEEDINGS............................................     17

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

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

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

Item 5.    OTHER INFORMATION............................................     17

Item 6.    EXHIBITS AND REPORTS ON FORM 8-K..............................    17

SIGNATURE PAGE...........................................................    19


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

</TABLE>


                                    2


<PAGE>

                          LINCOLN BENEFIT LIFE COMPANY
                  CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

<TABLE>
<S>                                                              <C>            <C>
                                                                   June 30,     December 31,
                                                                     1999           1998
                                                                 -------------  -------------
($ in thousands)                                                 (Unaudited)

Assets
Investments
   Fixed income securities at fair value
      (amortized cost $143,046 and $149,898)                      $   144,746    $   158,984
   Short-term                                                          15,605          3,675
                                                                       ------          -----
         Total investments                                            160,351        162,659

Cash                                                                    1,115          1,735
Reinsurance recoverable from
   Allstate Life Insurance Company                                  7,162,569      6,938,717
Reinsurance recoverable from non-affiliates                           231,846        191,092
Receivable from affiliates, net                                        51,962         37,073
Other assets                                                           26,989         25,286
Separate Accounts                                                   1,004,983        763,416
                                                                    ---------        -------
         Total assets                                             $ 8,639,815    $ 8,119,978
                                                                  ===========    ===========

Liabilities
Reserve for life-contingent contract benefits                     $   395,602    $   338,069
Contractholder funds                                                6,989,125      6,785,070
Current income taxes payable                                            5,308          3,659
Deferred income taxes                                                   2,982          5,546
Other liabilities and accrued expenses                                 83,729         64,440
Separate Accounts                                                   1,004,983        763,416
                                                                    ---------        -------
         Total liabilities                                          8,481,729      7,960,200
                                                                    ---------      ---------

Commitments and Contingent Liabilities (Note 4)


Shareholder's Equity
Common stock, $100 par value, 30,000 shares
      authorized, 25,000 issued and outstanding                         2,500          2,500
Additional capital paid-in                                            116,750        116,750
Retained income                                                        37,731         34,622

Accumulated other comprehensive income:
    Unrealized net capital gains                                        1,105          5,906
                                                                        -----          -----
         Total accumulated other comprehensive income                   1,105          5,906
                                                                        -----          -----
         Total shareholder's equity                                   158,086        159,778
                                                                      -------        -------
         Total liabilities and shareholder's equity               $ 8,639,815    $ 8,119,978
                                                                  ===========    ===========
</TABLE>


See notes to consolidated financial statements.

                                       -3-










<PAGE>

                           LINCOLN BENEFIT LIFE COMPANY
                       CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<S>                                  <C>           <C>         <C>          <C>


                                      Three Months Ended         Six Months Ended
                                           June 30,                  June 30,
                                    ----------------------   -----------------------
($ in thousands)                          1999        1998         1999         1998
                                    ----------  ----------   ----------  -----------
                                         (Unaudited)              (Unaudited)

Revenues
Net investment income                 $ 2,727     $ 2,619      $ 5,386      $ 5,179
Realized capital gains and losses        (410)          -         (409)           -
Other income (expense)                   (153)         35         (191)          54
                                         ----          --         ----           --

Income from operations before
   income tax expense                   2,164       2,654        4,786        5,233
Income tax expense                        748         929        1,677        1,841
                                          ---         ---        -----        -----

Net income                            $ 1,416     $ 1,725      $ 3,109      $ 3,392
                                      =======     =======      =======      =======

</TABLE>

See notes to consolidated financial statements.

                                      -4-





<PAGE>


                  LINCOLN BENEFIT LIFE COMPANY
             CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<S>                                                                <C>          <C>

                                                                        Six Months Ended
                                                                            June 30,
                                                                     ---------------------
($ in thousands)                                                        1999       1998
                                                                     ---------  ----------
                                                                          (Unaudited)

Cash flows from operating activities
Net income                                                          $ 3,109     $ 3,392
Adjustments to reconcile net income to net cash
    provided by operating activities:
       Depreciation, amortization and other non-cash items                7           -
       Realized capital gains and losses                                409           -
       Changes in:
           Reserve for life-contingent contract benefits
               and contractholder funds                              (3,018)     (6,728)
           Income taxes payable                                       1,670       7,500
           Other operating assets and liabilities                     1,337      55,546
                                                                      -----      ------
               Net cash provided by operating activities              3,514      59,710
                                                                      -----      ------


Cash flows from investing activities
Fixed income securities
       Proceeds from sales                                            9,193           -
       Investment collections                                         8,397       4,163
       Investment purchases                                          (9,805)     (6,200)
Change in short-term investments, net                               (11,919)     (4,846)
                                                                    -------      ------
               Net cash used in investing activities                 (4,134)     (6,883)
                                                                     ------      ------

Net (decrease) increase in cash                                        (620)     52,827
Cash at the beginning of year                                         1,735       4,220
                                                                      -----       -----
Cash at end of year                                                 $ 1,115    $ 57,047
                                                                    =======    ========

</TABLE>

See notes to consolidated financial statemetns.

                                      -5-


<PAGE>

                          Lincoln Benefit Life Company
               Notes to Consolidated Financial Statements
                               (Unaudited)


1.   Basis of Presentation

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

The consolidated  financial statements and notes as of June 30, 1999 and for the
three month and six month  periods  ended June 30, 1999 and 1998 are  unaudited.
The consolidated  financial statements reflect all adjustments  (consisting only
of normal recurring accruals) which are, in the opinion of management, necessary
for the fair presentation of the financial  position,  results of operations and
cash flows for the interim periods.  The consolidated  financial  statements and
notes should be read in conjunction with the consolidated  financial  statements
and notes thereto  included in the Lincoln Benefit Life Company Annual Report on
Form 10-K for 1998. The results of operations for the interim periods should not
be considered indicative of results to be expected for the full year.

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

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

2.  Reinsurance

The Company has  reinsurance  agreements  whereby  premiums,  contract  charges,
credited interest,  policy benefits and certain expenses are ceded, primarily to
ALIC and reflected net of such  reinsurance  in the  consolidated  statements of
operations.  The  amounts  shown in the  Company's  consolidated  statements  of
operations  relate to the investment of those assets of the Company that are not
transferred  under  reinsurance  agreements.  Reinsurance  recoverable  and  the
related reserve for life-contingent  contract benefits and contractholder  funds
are reported separately in the consolidated
                                      -6-


<PAGE>
                          Lincoln Benefit Life Company
               Notes to Consolidated Financial Statements
                               (Unaudited)

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  is not  included  in the
Company's  consolidated  financial  statements  as those  assets  are  owned and
managed under the terms of reinsurance  agreements.  The following  amounts were
ceded to ALIC under reinsurance agreements.

<TABLE>
<S>                                <C>        <C>       <C>       <C>

                                   Three Months Ended    Six Months Ended
                                        June 30,             June 30,
                                  -------------------  -------------------
      ($ in thousands)               1999      1998      1999       1998
                                  ---------  --------  --------  ---------

      Premiums                     $ 16,541  $  8,815  $ 29,924   $ 17,963

      Contract charges               29,041    25,307    60,938     49,876
      Credited interest, policy
        benefits, and certain
        expenses                    182,651   165,134   349,939    288,232


</TABLE>

                                      -7-


<PAGE>
                          Lincoln Benefit Life Company
                   Notes to Consolidated Financial Statements
                                  (Unaudited)

3.    Comprehensive Income
<TABLE>
<CAPTION>

The components of other comprehensive income on a pretax and after-tax basis are
as follows:
<S>                                <C>        <C>      <C>      <C>      <C>     <C>

                                                Three Months Ended June 30,
                                    ---------------------------------------------------
     ($ in thousands)                          1999                       1998
                                    -----------------------     -----------------------

                                                       After-                    After-
                                    Pretax     Tax        tax    Pretax    Tax     tax
                                    ------     ---        ---    ------    ---     ---

     Unrealized capital
       gains and losses:
     Unrealized holding
       (losses) gains arising
       during the period           $(4,630)  $1,620   $(3,010)   $ 895    $(313)  $582

     Less: reclassification
       adjustment for realized
       net capital losses
       included in net
       income                         (410)     143     (267)        -        -      -
                                       ----     ---     ----      ----     ----   ----
     Unrealized net capital
       (losses) gains               (4,220)   1,477   (2,743)     895    (313)     582
                                    ------    -----   ------      ---    ----     ----
     Other comprehensive
       (loss) income               $(4,220)  $1,477   (2,743)   $ 895   $(313)     582
                                   =======   =======            ======= =======
     Net income                                        1,416                     1,725
                                                       -----                     -----
     Comprehensive
       (loss) income                                 $(1,327)                   $2,307
                                                     =======                    ======



</TABLE>


                                      -8-


<PAGE>
                          Lincoln Benefit Life Company
                   Notes to Consolidated Financial Statements
                                   (Unaudited)


3.    Comprehensive Income (continued)

<TABLE>
<S>                                <C>        <C>      <C>      <C>       <C>    <C>

                                                   Six Months Ended June 30,
                                    ---------------------------------------------------
     ($ in thousands)                          1999                       1998
                                    -----------------------     -----------------------

                                                       After-                    After-
                                    Pretax     Tax        tax    Pretax    Tax     tax
                                    ------     ---        ---    ------    ---     ---

     Unrealized capital
       gains and losses:
     Unrealized holding
       (losses) gains arising
       during the period           $(7,795)  $2,728   $(5,067)   $ 918    $(321)  $597

     Less: reclassification
       adjustment for realized
       net capital losses
       included in net
       income                         (409)     143     (266)        -        -      -
                                       ----     ---     ----      ----     ----   ----
     Unrealized net capital
       (losses) gains               (7,386)   2,585   (4,801)     918    (321)     597
                                    ------    -----   ------      ---    ----     ----
     Other comprehensive
       (loss) income               $(7,386)  $2,585   (4,801)   $ 918   $(321)     597
                                   =======   =======            ======= =======
     Net income                                        3,109                     3,392
                                                       -----                     -----

     Comprehensive
       (loss) income                                 $(1,692)                   $3,989
                                                     =======                    ======

</TABLE>


4.    Commitments and Contingent Liabilities

Regulation  and Legal  Proceedings

The  Company is  subject to the  effects  of a  changing  social,  economic  and
regulatory  environment.  Public and regulatory initiatives have varied and have
included employee benefit regulations, removal of barriers preventing banks from
engaging in securities  and insurance  business,  tax law changes  affecting the
taxation of insurance companies, and tax treatment of insurance products and its
impact on the relative desirability of personal investment vehicles and proposed
legislation  to prohibit the use of gender in  determining  insurance  rates and
benefits.   The  ultimate  changes  and  eventual  effects,  if  any,  of  these
initiatives are uncertain.

Various other legal and  regulatory  actions are currently  pending that involve
the Company and specific  aspects of its conduct of business.  In the opinion of
management,  the ultimate liability,  if any, in one or more of these actions in
excess of

                                      -9-

<PAGE>

                          Lincoln Benefit Life Company
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

amounts  currently  reserved is not  expected  to have a material  effect on the
results of operations, liquidity or financial position of the Company.


                                      -10-

<PAGE>


                          Lincoln Benefit Life Company
                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations


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

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

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


Consolidated Results of Operations
<TABLE>
<S>                             <C>         <C>       <C>        <C>

      ($ in thousands)           Three Months Ended      Six Months Ended
                                      June 30,                June 30,
                                ---------------------  ---------------------
                                   1999       1998       1999        1998
                                ----------  ---------  ---------  ----------

      Net investment
         income                 $  2,727   $   2,619   $ 5,386     $ 5,179
                                ========   =========   =======     =======

      Realized capital gains
         and losses, after-tax  $   (267)   $      -   $  (266)    $     -
                                =========   ========   ========    =======

      Net income                $  1,416    $  1,725   $  3,109    $  3,392
                                ========     =======   ========    ========

      Total investments         $160,351    $156,904   $160,351    $156,904
                                ========    ========   ========    ========
</TABLE>



The Company has reinsurance  agreements  under which contract and policy related
transactions  are  transferred  primarily to ALIC.  The  Company's  consolidated
results of operations  include only net investment  income and realized  capital
gains and losses  earned on the assets of the Company  that are not  transferred
under the reinsurance agreements. The results of AFDI and certain non-investment
related expenses which

                                      -11-

<PAGE>
                          Lincoln Benefit Life Company
                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations

are not  transferred  under the  reinsurance  agreements  are presented in other
revenues and expenses.

Net  income  for the  second  quarter  of 1999 and  first  half of 1999 was $1.4
million  and $3.1  million,  respectively,  compared  to $1.7  million  and $3.4
million for the comparable  periods in 1998. The decrease in net income for both
periods was primarily due to realized  capital  losses  arising from the sale of
publicly-traded corporate bonds in the second quarter of 1999.

Pretax net  investment  income for the second  quarter of 1999 increased 4.1% to
$2.7  million  compared to $2.6  million for the same period last year.  For the
first six months of 1999,  pretax net investment  income increased $207 thousand
to $5.4 million  compared to $5.2 million for the same period in 1998.  For both
periods  higher  investment  balances from positive  cash flows  generated  from
operations  were  offset  by  lower  investment  yields  and  higher  investment
expenses.  Investments  at  June  30,  1999,  excluding  Separate  Accounts  and
unrealized gains on fixed income securities, grew 6.0% from the same period last
year.  Lower  investment  yields are due, in part, to the investment of proceeds
from  calls and  maturities  and the  investment  of  positive  cash  flows from
operations  in  securities  yielding  less than the average  portfolio  rate. In
relatively  low  interest  rate  environments,  funds  from  called or  maturing
investments may be reinvested at interest rates lower than those which prevailed
when the funds were previously invested, resulting in lower investment yields.



    Financial Position
<TABLE>
<S>                                         <C>             <C>

    ($ in thousands)                          June 30,       December 31,
                                                1999            1998
                                             ----------     ------------
    Fixed income securities (1)              $  144,746      $   158,984

    Short-term investments                       15,605            3,675
                                             ----------      -----------
      Total investments                      $  160,351      $   162,659
                                             ----------      -----------
                                             ----------      -----------
    Reinsurance recoverable from ALIC        $7,162,569      $ 6,938,717
                                             ----------      -----------
                                             ----------      -----------
    Separate Account assets and liabilities  $1,004,983      $   763,416
                                             ----------      -----------
                                             ----------      -----------
    Contracholder funds                      $6,989,125      $ 6,785,070
                                             ----------      -----------
                                             ----------      -----------
</TABLE>

(1)Fixed income  securities are carried at fair value.  Amortized cost for these
securities  was  $143,046  and  $149,898 at June 30, 1999 and December 31, 1998,
respectively.



Total  investments  were  $160.4  million at June 30,  1999  compared  to $162.7
million at December 31, 1998. Positive cash flows generated from operations were
more than  offset by a decrease  in  unrealized  capital  gains on fixed  income
securities. At June 30,
                                      -12-

<PAGE>

                          Lincoln Benefit Life Company
                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations

1999,  unrealized net capital gains on fixed income securities were $1.7 million
compared to $9.1 million at December 31, 1998.

At June 30, 1999,  all of the  Company's  fixed income  securities  portfolio is
rated investment grade, with a National  Association of Insurance  Commissioners
("NAIC")  rating  of 1 or 2, a  Moody's  rating  of  Aaa,  Aa,  A or  Baa,  or a
comparable Company internal rating.

Contractholder  funds grew  $204.1  million to $6.99  billion at June 30,  1999,
primarily due to sales of indexed and market value  adjusted  annuity  contracts
and higher levels of interest  credited to  contractholder  balances,  partially
offset by fixed annuity surrenders and withdrawals. Reinsurance recoverable from
ALIC at June 30, 1999 was $7.16  billion  versus  $6.94  billion at December 31,
1998. Reinsurance  recoverable from ALIC relates to contract benefit obligations
ceded to ALIC.

Separate  Account  assets  and  liabilities  increased  $241.6  million to $1.00
billion at June 30, 1999.  The increase was primarily  attributable  to sales of
flexible  premium  deferred   variable  annuity   contracts  and  the  favorable
investment performance of the Separate Account investment portfolios.

Liquidity and Capital Resources

Under the terms of reinsurance agreements, all premiums and deposits,  excluding
those relating to Separate  Accounts,  are transferred  primarily to ALIC, which
maintains the investment portfolios supporting the Company's products.  Payments
of policyholder claims, benefits,  contract maturities,  contract surrenders and
withdrawals and certain  operating costs are also reimbursed  primarily by ALIC,
under the terms of the  reinsurance  agreements.  The Company  continues to have
primary liability as a direct insurer for risks reinsured. The Company's ability
to meet liquidity  demands is dependent on ALIC's ability to meet those demands.
ALIC's  financial  strength  was rated Aa2,  AA+ and A+ by  Moody's,  Standard &
Poor's and A.M. Best, respectively, at June 30, 1999.

The primary source for the remainder of the Company's funds is the collection of
principal  and  interest  from the  investment  portfolio.  The Company may also
receive capital  contributions  from ALIC. The primary uses for the remainder of
the Company's funds are to purchase  investments  and pay costs  associated with
the maintenance of the Company's investment portfolio.

Year 2000

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

                                      -13-

<PAGE>

                          Lincoln Benefit Life Company
                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations

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

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

The Corporation  believes that the first three phases of this plan,  assessment,
remediation and testing,  including clock-forward testing which was performed on
the Corporation's systems and equipment and non-IT, are complete. It is expected
that  the  implementation  and  rollout  of  the  remediated  personal  computer
environment will continue into fourth quarter of 1999. In addition, some systems
and equipment and non-IT related to discontinued  or  non-critical  functions of
the Corporation are planned to be abandoned by the end of 1999.

The fourth phase of this plan,  contingency  planning,  is currently in process.
Detailed  plans have been created in the event that the systems and equipment or
major external  counterparties and suppliers  supporting  critical processes are
not Year 2000 compliant in or after the year 1999. These plans,  created by each
corporate  function and business unit of the Corporation,  identify and document
the risks  associated with Year 2000 and their business  processes.  Appropriate
plans have been developed to mitigate those risks. A common inclusion in many of
the plans is a description of manual processes and personnel needed in the event
of a temporary Year 2000 failure. Contingency plans will be tested appropriately
by the corporate function or business unit for their effective operation and for
achieving their desired results. In addition,  during the third quarter of 1999,
the  Corporation's  management is reviewing all corporate  function and business
units' plans for accuracy and comprehensiveness.  Monitoring of these plans will
continue throughout the end of 1999 and beyond, as needed.

                                      -14-

<PAGE>
                          Lincoln Benefit Life Company
                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations


The  Corporation has considered  numerous risk scenarios  during the contingency
planning  phase.  Through this planning,  management  believes that the scenario
which could be  considered  the worst  case,  includes a  widespread,  prolonged
failure of public  utility  systems which would not only cause power outages for
the  Corporation,   but  also  cause  telecommunication,   banking  or  external
counterparty and supplier  service  outages.  While the Corporation has assessed
and will continue to assess data on the utility,  telecommunication  and banking
industries,  it acknowledges the possibility that a prolonged  widespread outage
in any or all of these industries could lead to a worst case scenario.  However,
the  Corporation  does not  consider  such  prolonged  widespread  outages to be
reasonably  likely.  Therefore,  the Corporation has focused its most reasonably
likely worst case  scenario  contingency  planning on limited  scale  outages in
order to ensure the ability to deal with risks of likely scenarios.  Because the
Corporation  is  prepared  for  outages on a  localized  basis as part of normal
business  operations,  the  Corporation  considers  the  impacts  of  this  most
reasonably  likely  scenario to be  immaterial to the  Corporation's  results of
operations, liquidity or financial position.

The Company markets products primarily through independent  agencies,  which are
independent  of the  Corporation,  and have not been  directly  included  in the
Corporation-wide four phase plan, and potentially may not be Year 2000 compliant
during or after the year 1999. Because the risk associated with this scenario is
diffused across thousands of appointed independent agencies,  located throughout
the  United  States,  using  many  different  technologies,  the  impact  on the
Company's  results  of  operations,  liquidity  or  financial  condition  is not
determinable.

In  addition,  the  Corporation  is  actively  working  with its major  external
counterparties  and suppliers,  including public utility companies and banks and
brokers involved in its distribution channel, to assess their compliance efforts
and the Corporation's exposure to both their Year 2000 issues and non-IT issues.
This assessment has included soliciting  external  counterparties and suppliers,
evaluating   responses   received  and  testing  third  party   interfaces   and
interactions to determine  compliance.  Currently the Corporation has solicited,
and  has  received  responses  from,  the  majority  of its  counterparties  and
suppliers.  These responses  generally state that they believe they will be Year
2000  compliant  and that no  transactions  will be affected.  However,  certain
vendors are also in ongoing  assessment  and testing of their  products  whereby
they are currently unable to identify all potential problems in certain products
which are used by the Corporation.  The Corporation  believes that these vendors
will make no  statements  regarding  their  Year 2000  readiness  other  than to
publish declarations addressing specific compliance issues identified with their
products.  The  Corporation is working with these key vendors and has procedures
in place to stay aware of any  compliance  issues  encountered by these vendors.
The Corporation has also decided to test certain  interfaces and interactions to
gain additional assurance on third party compliance.  Currently, the Corporation
does not have  sufficient  information to determine  whether all of its external
counterparties  and suppliers will be Year 2000 compliant.  If they are not Year
2000  compliant,  the  Corporation  is unable  to  determine  the  impact of any
consequent losses on its results of operations, liquidity or financial position.

                                      -15-

<PAGE>
                          Lincoln Benefit Life Company
                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations

The  Corporation  may be exposed to the risk that the issuers of  investments in
its portfolio will be adversely  impacted by Year 2000 issues.  The  Corporation
assesses the impact which Year 2000 issues have on the Corporation's investments
as part of due diligence for proposed new  investments and in its ongoing review
of all current  portfolio  holdings.  Any  recommended  actions  with respect to
individual  investments  are  determined  by taking into  account the  potential
impact of Year 2000 on the issuer.  Based on its current review, the Corporation
believes  that although  Year 2000 issues may  temporarily  affect the market or
individual  issuers,  the  potential  impact  of  Year  2000  on its  investment
portfolio will not be material.

The Corporation presently believes that it will resolve the Year 2000 issue in a
timely  manner.  Year 2000 costs are expensed as  incurred.  The majority of the
expenses  related to this  project have been  incurred as of June 30, 1999.  The
Corporation  estimates that approximately $125 million in costs will be incurred
between the years of 1995 and 2000. These amounts include costs directly related
to fixing Year 2000  issues,  such as  modifying  software  and hiring Year 2000
solution providers,  as well as costs incurred to replace certain  non-compliant
systems which would not have been otherwise  replaced.  A portion of these costs
will  be  incurred  by  the  Company  on a  pro  rata  basis  of  usage  of  the
computer-related  systems and equipment and non-IT,  as compared to the usage of
all entities which share these services with the Corporation.  These amounts are
not expected to be material to the results of operations of the Company.

Forward-Looking Statements

The statements  contained in this Management's  Discussion and Analysis that are
not historical  information  are  forward-looking  statements  that are based on
management's  estimates,  assumptions and  projections.  The Private  Securities
Litigation Reform Act of 1995 provides a safe harbor under The Securities Act of
1933 and the Securities Exchange Act of 1934 for forward-looking  statements. In
order to comply with the terms of the safe  habor,  the  Company  notes  several
important  factors that could cause the Company's  actual results and experience
with  respect  to  forward-looking  statements  to  differ  materially  from the
anticipated   results  or  other   expectations   expressed  in  the   Company's
forward-looking statements:

1.   The  Corporation  presently  believes  that it will  resolve  the Year 2000
     issues affecting its computer  operations in a timely manner,  and that the
     costs incurred between the years of 1995 and 2000 in resolving those issues
     will be  approximately  $125  million.  However,  the  extent  to which the
     computer  operations  of  the  Corporation's  external  counterparties  and
     suppliers are adversely  affected could, in turn,  affect the Corporation's
     ability  to  communicate  with such  counterparties  and  suppliers,  could
     increase the cost of resolving the Year 2000 issues,  and could  materially
     affect the  Corporation's  results of  operations,  liquidity and financial
     condition in any period or periods.

                                      -16-

<PAGE>


                       PART II - OTHER INFORMATION

Item 1.    LEGAL PROCEEDINGS

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

Item 5.    OTHER INFORMATION

Not applicable.

Item 6.    EXHIBITS AND REPORTS ON FORM 8-k

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

      (b)  Reports on 8-K

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

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

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

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




                                   -17-


<PAGE>


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




























                                   -18-

<PAGE>


                               SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registration  has duly  caused  this  report to be  signed on its  behalf by the
undersigned thereunto duly authorized, on the 13th day of August, 1999.



                      LINCOLN BENEFIT LIFE COMPANY
                              (Registrant)


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


_____________________                         SENIOR VICE PRESIDENT
MARVIN P. EHLY                                TREASURER AND DIRECTOR
                                              (Principal Financial Officer)


























                                   -19-