----

| [X] | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|-----|-----------------------------------------------------------------------------------------|

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

| Missouri                        | 44-0308260          |
|---------------------------------|---------------------|
| (State or other jurisdiction of | (I.R.S. Employer    |
| incorporation or organization)  | Identification No.) |

| 3520 Broadway, Kansas City, Missouri(Address of principal executive offices) | 64111-2565(Zip Code) |
|------------------------------------------------------------------------------|----------------------|

| Common Stock, $1.25 par | 11,496,290 shares          |
|-------------------------|----------------------------|
| Class                   | Outstanding March 31, 2010 |

----

| Part I.   Financial Information……………………………………………………………………………………………..                    | 3      |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                     |   |
| Item 1.  Financial Statements (Unaudited)………………………………………………………………………………...                                                 | 3      |
|                                                                                                                                                                                                                                                                                                                     |   |
| Consolidated Balance Sheets…………………………………………………………………………………………...                                             | 3      |
|                                                                                                                                                                                                                                                                                                                     |   |
| Consolidated Statements of Income…………………………………………………………………………………….                                                       | 4      |
|                                                                                                                                                                                                                                                                                                                     |   |
| Consolidated Statements of Stockholders' Equity………………………………………………………………………                                                                             | 5      |
|                                                                                                                                                                                                                                                                                                                     |   |
| Consolidated Statements of Cash Flows………………………………………………………………………………..                                                                | 6      |
|                                                                                                                                                                                                                                                                                                                     |   |
| Notes to Consolidated Financial Statements……………………………………………………………………………                                                                    | 7      |
|                                                                                                                                                                                                                                                                                                                     |   |
| Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations…………………….                                                                                                                                                  | 34     |
|                                                                                                                                                                                                                                                                                                                     |   |
| Item 3.  Quantitative and Qualitative Disclosures About Market Risk……………………………………………………                                                                                                | 65     |
|                                                                                                                                                                                                                                                                                                                     |   |
| Item 4.  Controls and Procedures………………………………………………………………………………………….                                | 65     |
|                                                                                                                                                                                                                                                                                                                     |   |
| Part II.  Other Information…………………………………………………………………………………………………                 | 66     |
|                                                                                                                                                                                                                                                                                                                     |   |
| Item 1.  Legal Proceedings………………………………………………………………………………………………...                      | 66     |
|                                                                                                                                                                                                                                                                                                                     |   |
| Item 1A. Risk Factors …………………………………………………………………………………………………......                          | 66     |
|                                                                                                                                                                                                                                                                                                                     |   |
| Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds……………………………………………………                                                                                               | 67     |
|                                                                                                                                                                                                                                                                                                                     |   |
| Item 5.  Other Information………………………………………………………………………………………………...                      | 68     |
|                                                                                                                                                                                                                                                                                                                     |   |
| Item 6.  Exhibits…………………………………………………………………………………………………………...   | 70     |
|                                                                                                                                                                                                                                                                                                                     |   |
| Signatures…………………………………………………………………………………………………………………. | 71     |

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| KANSAS CITY LIFE INSURANCE COMPANY                                                         |   |        |      |   |        |   |
|--------------------------------------------------------------------------------------------|--------|-------------|-----------|--------|-------------|--------|
| CONSOLIDATED BALANCE SHEETS                                                                |   |        |      |   |        |   |
|                                                                                       |   |        |      |   |        |   |
|                                                                                       |   | March 31    |      |   | December 31 |   |
|                                                                                       |   | 2010        |      |   | 2009        |   |
| ASSETS                                                                                     |   | (Unaudited) |      |   |        |   |
| Investments:                                                                               |   |        |      |   |        |   |
| Fixed maturity securities available for sale, at fair value                                |   | $           | 2,539,151 |   |        | $      | 2,469,272 |   |
| Equity securities available for sale, at fair value                                        |   |        | 37,826    |   |        |   | 36,876 |   |
| Mortgage loans                                                                             |   |        | 456,489   |   |        |   | 457,582 |   |
| Real estate                                                                                |   |        | 115,017   |   |        |   | 114,076 |   |
| Policy loans                                                                               |   |        | 84,896    |   |        |   | 85,585 |   |
| Short-term investments                                                                     |   |        | 106,770   |   |        |   | 138,704 |   |
| Total investments                                                                          |   |        | 3,340,149 |   |        |   | 3,302,095 |   |
|                                                                                       |   |        |      |   |        |   |   |   |
| Cash                                                                                       |   |        | 5,809     |   |        |   | 4,981 |   |
| Accrued investment income                                                                  |   |        | 37,300    |   |        |   | 32,989 |   |
| Deferred acquisition costs                                                                 |   |        | 198,540   |   |        |   | 209,495 |   |
| Value of business acquired                                                                 |   |        | 60,325    |   |        |   | 66,114 |   |
| Reinsurance receivables                                                                    |   |        | 183,373   |   |        |   | 179,365 |   |
| Property and equipment                                                                     |   |        | 24,066    |   |        |   | 24,393 |   |
| Income taxes                                                                               |   |        | 3,762     |   |        |   | 8,784 |   |
| Other assets                                                                               |   |        | 33,146    |   |        |   | 35,145 |   |
| Separate account assets                                                                    |   |        | 324,924   |   |        |   | 312,824 |   |
| Total assets                                                                               |   | $           | 4,211,394 |   |        | $      | 4,176,185 |   |
|                                                                                       |   |        |      |   |        |   |   |   |
| LIABILITIES                                                                                |   |        |      |   |        |   |   |   |
| Future policy benefits                                                                     |   | $           | 872,987   |   |        | $      | 866,889 |   |
| Policyholder account balances                                                              |   |        | 2,044,534 |   |        |   | 2,048,828 |   |
| Policy and contract claims                                                                 |   |        | 33,667    |   |        |   | 33,484 |   |
| Other policyholder funds                                                                   |   |        | 142,606   |   |        |   | 137,847 |   |
| Income taxes                                                                               |   |        | 30,336    |   |        |   | 21,851 |   |
| Other liabilities                                                                          |   |        | 122,484   |   |        |   | 126,099 |   |
| Separate account liabilities                                                               |   |        | 324,924   |   |        |   | 312,824 |   |
| Total liabilities                                                                          |   |        | 3,571,538 |   |        |   | 3,547,822 |   |
|                                                                                       |   |        |      |   |        |   |   |   |
| STOCKHOLDERS' EQUITY                                                                       |   |        |      |   |        |   |   |   |
| Common stock, par value $1.25 per share                                                    |   |        |      |   |        |   |   |   |
| Authorized 36,000,000 shares,                                                              |   |        |      |   |        |   |   |   |
|  issued 18,496,680 shares                                                             |   |        | 23,121    |   |        |   | 23,121 |   |
| Additional paid in capital                                                                 |   |        | 41,072    |   |        |   | 41,068 |   |
| Retained earnings                                                                          |   |        | 755,077   |   |        |   | 757,225 |   |
| Accumulated other comprehensive loss                                                       |   |        | (20,721   | )      |        |   | (36,477 | ) |
| Treasury stock, at cost (2010 - 7,000,390 shares;                                          |   |        |      |   |        |   |   |   |
| 2009 - 6,931,589 shares)                                                                   |   |        | (158,693  | )      |        |   | (156,574 | ) |
| Total stockholders' equity                                                                 |   |        | 639,856   |   |        |   | 628,363 |   |
|                                                                                       |   |        |      |   |        |   |   |   |
|         Total liabilities and stockholders' equity |   | $           | 4,211,394 |   |        | $      | 4,176,185 |   |
|                                                                                       |   |        |      |   |        |   |   |   |

----

|                                     KANSAS CITY LIFE INSURANCE COMPANY |   |                   |    |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|--------|--------|--------|
| CONSOLIDATED STATEMENTS OF INCOME                                                                                                                                                                                                                     |   |                   |    |   |
|                                                                                                                                                                                                                                                  |   |                   |    |   |   |   |
|                                                                                                                                                                                                                                                  |   |                   |    |   |   |   |
|                                                                                                                                                                                                                                                  |   | Quarter Ended March 31 |    |
|                                                                                                                                                                                                                                                  |   | 2010                   |    |   | 2009   |   |
| REVENUES                                                                                                                                                                                                                                              |   | (Unaudited)            |    |   |   |   |
| Insurance revenues:                                                                                                                                                                                                                                   |   |                   |    |   |   |   |
| Premiums                                                                                                                                                                                                                                              |   | $                      | 47,929  |   |   | $      | 46,540 |   |
| Contract charges                                                                                                                                                                                                                                      |   |                   | 26,679  |   |   |   | 26,768 |   |
| Reinsurance ceded                                                                                                                                                                                                                                     |   |                   | (13,302 | )      |   |   | (12,539 | ) |
| Total insurance revenues                                                                                                                                                                                                                              |   |                   | 61,306  |   |   |   | 60,769 |   |
| Investment revenues:                                                                                                                                                                                                                                  |   |                   |    |   |   |   |   |   |
| Net investment income                                                                                                                                                                                                                                 |   |                   | 43,304  |   |   |   | 43,139 |   |
| Realized investment gains, excluding                                                                                                                                                                                                                  |   |                   |    |   |   |   |   |   |
| impairment losses                                                                                                                                                                                                                                     |   |                   | 1,323   |   |   |   | 1,414 |   |
| Net impairment losses recognized in earnings:                                                                                                                                                                                                         |   |                   |    |   |   |   |   |   |
| Total other-than-temporary impairment losses                                                                                                                                                                                                          |   |                   | (1,591  | )      |   |   | (21,406 | ) |
| Portion of impairment losses recognized in                                                                                                                                                                                                            |   |                   |    |   |   |   |   |   |
| other comprehensive income                                                                                                                                                                                                                            |   |                   | 5       |   |   |   | 15,288 |   |
| Net impairment losses recognized in earnings                                                                                                                                                                                                          |   |                   | (1,586  | )      |   |   | (6,118 | ) |
| Total investment revenues                                                                                                                                                                                                                             |   |                   | 43,041  |   |   |   | 38,435 |   |
| Other revenues                                                                                                                                                                                                                                        |   |                   | 2,420   |   |   |   | 2,431 |   |
| Total revenues                                                                                                                                                                                                                                        |   |                   | 106,767 |   |   |   | 101,635 |   |
|                                                                                                                                                                                                                                                  |   |                   |    |   |   |   |   |   |
| BENEFITS AND EXPENSES                                                                                                                                                                                                                                 |   |                   |    |   |   |   |   |   |
| Policyholder benefits                                                                                                                                                                                                                                 |   |                   | 47,791  |   |   |   | 48,687 |   |
| Interest credited to policyholder account balances                                                                                                                                                                                                    |   |                   | 21,200  |   |   |   | 21,174 |   |
| Amortization of deferred acquisition costs                                                                                                                                                                                                            |   |                   |    |   |   |   |   |   |
| and value of business acquired                                                                                                                                                                                                                        |   |                   | 10,519  |   |   |   | 12,479 |   |
| Operating expenses                                                                                                                                                                                                                                    |   |                   | 24,290  |   |   |   | 26,254 |   |
| Total benefits and expenses                                                                                                                                                                                                                           |   |                   | 103,800 |   |   |   | 108,594 |   |
|                                                                                                                                                                                                                                                  |   |                   |    |   |   |   |   |   |
| Income (loss) before income tax expense (benefit)                                                                                                                                                                                                     |   |                   | 2,967   |   |   |   | (6,959 | ) |
|                                                                                                                                                                                                                                                  |   |                   |    |   |   |   |   |   |
| Income tax expense (benefit)                                                                                                                                                                                                                          |   |                   | 2,004   |   |   |   | (2,411 | ) |
|                                                                                                                                                                                                                                                  |   |                   |    |   |   |   |   |   |
| NET INCOME (LOSS)                                                                                                                                                                                                                                     |   | $                      | 963     |   |   | $      | (4,548 | ) |
|                                                                                                                                                                                                                                                  |   |                   |    |   |   |   |   |   |
| Comprehensive income (loss), net of taxes:                                                                                                                                                                                                            |   |                   |    |   |   |   |   |   |
| Change in net unrealized gains and (losses) on                                                                                                                                                                                                        |   |                   |    |   |   |   |   |   |
| securities available for sale                                                                                                                                                                                                                         |   | $                      | 15,756  |   |   | $      | 442 |   |
| Other comprehensive income                                                                                                                                                                                                                            |   |                   | 15,756  |   |   |   | 442 |   |
|                                                                                                                                                                                                                                                  |   |                   |    |   |   |   |   |   |
| COMPREHENSIVE INCOME (LOSS)                                                                                                                                                                                                                           |   | $                      | 16,719  |   |   | $      | (4,106 | ) |
|                                                                                                                                                                                                                                                  |   |                   |    |   |   |   |   |   |
|                                                                                                                                                                                                                                                  |   |                   |    |   |   |   |   |   |
| Basic and diluted earnings per share:                                                                                                                                                                                                                 |   |                   |    |   |   |   |   |   |
| Net income (loss)                                                                                                                                                                                                                                     |   | $                      | 0.08    |   |   | $      | (0.40 | ) |
|                                                                                                                                                                                                                                                  |   |                   |    |   |   |   |   |   |

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| KANSAS CITY LIFE INSURANCE COMPANY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | Quarter Ended |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | March 31, 2010 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | (Unaudited) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |
| COMMON STOCK, beginning and end of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | $ | 23,121 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |
| ADDITIONAL PAID IN CAPITAL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |
| Beginning of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   | 41,068 |   |
| Excess of proceeds over cost of treasury stock sold                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   | 4 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |
| End of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |   | 41,072 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |
| RETAINED EARNINGS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |
| Beginning of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   | 757,225 |   |
| Net income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   | 963 |   |
| Stockholder dividends of $0.27 per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |
|    (2009 - $1.08)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   | (3,111 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |
| End of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |   | 755,077 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |
| ACCUMULATED OTHER COMPREHENSIVE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |   |   |   |
| LOSS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |
| Beginning of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   | (36,477 | ) |
| Other comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   | 15,756 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |
| End of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |   | (20,721 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |
| TREASURY STOCK, at cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |
| Beginning of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   | (156,574 | ) |
| Cost of 69,104 shares acquired                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |
|    (2009 - 396,821 shares)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   | (2,123 | ) |
| Cost of 303 shares sold                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |
|    (2009 - 526,708 shares)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   | 4 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |
| End of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |   | (158,693 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |
| TOTAL STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | $ | 639,856 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |

----

|                                     KANSAS CITY LIFE INSURANCE COMPANY |   |                   |     |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|----------|--------|--------|--------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                                                                                                                                                 |   |                   |     |   |
|                                                                                                                                                                                                                                                  |   |                   |     |   |   |   |
|                                                                                                                                                                                                                                                  |   |                   |     |   |   |   |
|                                                                                                                                                                                                                                                  |   | Quarter Ended March 31 |     |
|                                                                                                                                                                                                                                                  |   | 2010                   |     |   | 2009   |   |
|                                                                                                                                                                                                                                                  |   | (Unaudited)            |     |   |   |   |
| OPERATING ACTIVITIES                                                                                                                                                                                                                                  |   |                   |     |   |   |   |
| Net cash provided                                                                                                                                                                                                                                     |   | $                      | 1,750    |   |   | $      | 12,557 |   |
|                                                                                                                                                                                                                                                  |   |                   |     |   |   |   |   |   |
| INVESTING ACTIVITIES                                                                                                                                                                                                                                  |   |                   |     |   |   |   |   |   |
| Purchases of investments:                                                                                                                                                                                                                             |   |                   |     |   |   |   |   |   |
| Fixed maturity securities                                                                                                                                                                                                                             |   |                   | (108,969 | )      |   |   | (68,657 | ) |
| Equity securities                                                                                                                                                                                                                                     |   |                   | (475     | )      |   |   | (592 | ) |
| Mortgage loans                                                                                                                                                                                                                                        |   |                   | (7,625   | )      |   |   | (12,260 | ) |
| Real estate                                                                                                                                                                                                                                           |   |                   | (1,888   | )      |   |   | (4,060 | ) |
| Sales of investments:                                                                                                                                                                                                                                 |   |                   |     |   |   |   |   |   |
| Fixed maturity securities                                                                                                                                                                                                                             |   |                   | 12,729   |   |   |   | 9,039 |   |
| Equity securities                                                                                                                                                                                                                                     |   |                   | -        |   |   |   | 1,406 |   |
| Real estate                                                                                                                                                                                                                                           |   |                   | 600      |   |   |   | 2,736 |   |
| Other investment assets                                                                                                                                                                                                                               |   |                   | 32,623   |   |   |   | 4,043 |   |
| Maturities and principal paydowns of investments:                                                                                                                                                                                                     |   |                   |     |   |   |   |   |   |
| Fixed maturity securities                                                                                                                                                                                                                             |   |                   | 65,301   |   |   |   | 48,130 |   |
| Mortgage loans                                                                                                                                                                                                                                        |   |                   | 8,718    |   |   |   | 11,654 |   |
| Net dispositions of property and equipment                                                                                                                                                                                                            |   |                   | 113      |   |   |   | 291 |   |
| Net cash provided (used)                                                                                                                                                                                                                              |   |                   | 1,127    |   |   |   | (8,270 | ) |
|                                                                                                                                                                                                                                                  |   |                   |     |   |   |   |   |   |
| FINANCING ACTIVITIES                                                                                                                                                                                                                                  |   |                   |     |   |   |   |   |   |
| Repayment of borrowings                                                                                                                                                                                                                               |   |                   | -        |   |   |   | (2,900 | ) |
| Deposits on policyholder account balances                                                                                                                                                                                                             |   |                   | 53,728   |   |   |   | 53,947 |   |
| Withdrawals from policyholder account balances                                                                                                                                                                                                        |   |                   | (53,424  | )      |   |   | (59,435 | ) |
| Net transfers from (to) separate accounts                                                                                                                                                                                                             |   |                   | (467     | )      |   |   | 3,920 |   |
| Change in other deposits                                                                                                                                                                                                                              |   |                   | 3,340    |   |   |   | 3,093 |   |
| Cash dividends to stockholders                                                                                                                                                                                                                        |   |                   | (3,111   | )      |   |   | (3,112 | ) |
| Net acquisition of treasury stock                                                                                                                                                                                                                     |   |                   | (2,115   | )      |   |   | (1,566 | ) |
| Net cash used                                                                                                                                                                                                                                         |   |                   | (2,049   | )      |   |   | (6,053 | ) |
|                                                                                                                                                                                                                                                  |   |                   |     |   |   |   |   |   |
| Increase (decrease) in cash                                                                                                                                                                                                                           |   |                   | 828      |   |   |   | (1,766 | ) |
| Cash at beginning of year                                                                                                                                                                                                                             |   |                   | 4,981    |   |   |   | 9,720 |   |
|                                                                                                                                                                                                                                                  |   |                   |     |   |   |   |   |   |
| Cash at end of period                                                                                                                                                                                                                                 |   | $                      | 5,809    |   |   | $      | 7,954 |   |
|                                                                                                                                                                                                                                                  |   |                   |     |   |   |   |   |   |

----

----

----

| ·   | The current fair value of the security as compared to cost; |
|--------------------|-------------------------------------------------------------|

| ·   | The credit rating of the security; |
|--------------------|------------------------------------|

| ·   | The extent and the length of time the fair value has been below amortized cost; |
|--------------------|---------------------------------------------------------------------------------|

| ·   | The financial position of the issuer, including the current and future impact of any specific events, material declines in the issuer’s revenues, margins, cash positions, liquidity issues, asset quality, debt levels and income results; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Significant management or organizational changes; |
|--------------------|---------------------------------------------------|

| ·   | Significant uncertainty regarding the issuer’s industry; |
|--------------------|----------------------------------------------------------------|

| ·   | Violation of financial covenants; |
|--------------------|-----------------------------------|

| ·   | Consideration of information or evidence that supports timely recovery; |
|--------------------|-------------------------------------------------------------------------|

| ·   | The Company’s intent and ability to hold an equity security until it recovers in value; |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | Whether the Company intends to sell a debt security and whether it is not more likely than not that the Company will be required to sell a debt security before recovery of the amortized cost basis; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other business factors related to the issuer’s industry. |
|--------------------|----------------------------------------------------------------|

| ·   | The risk that the Company’s assessment of an issuer’s ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | The risk that the performance of the underlying collateral for securities could deteriorate in the future and the Company’s credit enhancement levels and recovery values do not provide sufficient protection to the Company’s contractual principal and interest; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The risk that fraudulent, inaccurate or misleading information could be provided to the Company’s credit, investment and accounting professionals who determine the fair value estimates and accounting treatment for securities; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The risk that new information obtained by the Company or changes in other facts and circumstances may lead the Company to change its intent to sell the security before it recovers in value; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The risk that facts and circumstances change such that it becomes more likely than not that the Company will be required to sell the investment before recovery of the amortized cost basis; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The risk that the methodology or assumptions used to develop estimates of the portion of impairments due to credit prove, over time, to be inaccurate or insufficient. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Critical Accounting Estimate | Determination Methodology                                                                                                                                                                          | Potential One-Time Effect on DAC, VOBA and Related Items                                                                                                                                                         |
|------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Mortality Experience         | Based on Company mortality experience.  Industry experience and trends are also considered.                                                                                              | A 2.5% increase in expected mortality experience for all future years would result in a reduction in DAC and VOBA, and a 2% decrease in DAC and VOBA, which would be an increase in current period amortization. |
| Surrender Rates              | Based on Company surrender experience.  Industry experience and trends are also considered.                                                                                              | A 10% increase in expected surrender rates for all future years would result in a reduction in DAC and VOBA, and a 1% decrease in DAC and VOBA, which would be an increase in current period amortization.       |
| Interest Spreads             | Based on expected future investment returns and expected future crediting rates applied to policyholder account balances; future crediting rates include constraints imposed by policy guarantees. | A 10 basis point reduction in future interest rate spreads would result in a reduction in DAC and VOBA, and a 1% decrease in DAC and VOBA, which would be an increase in current period amortization.            |
| Maintenance Expenses         | Based on Company experience using an internal expense allocation methodology.                                                                                                                      | A 10% increase in future maintenance expenses would result in a reduction in DAC and VOBA, and a 1% decrease in DAC and VOBA, which would be an increase in current period amortization.                         |

----

----

----

----

----

----

|                                                                               |   | March 31, 2010 |   |
|------------------------------------------------------------------------------------|--------|----------------|--------|
| Assets:                                                                            |   | Level 1        |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Bonds:                                                                             |   |           |   |   |   |   |   |   |   |   |   |   |
|     U.S. Treasury securities and                               |   |           |   |   |   |   |   |   |   |   |   |   |
|         obligations of U.S. Government     |   | $              | 11,152 |   |   | $ | 112,824 |   |   | $ | 8,246 |   |   | $ | 132,222 |   |
|     Federal agencies 1                                         |   |           | -      |   |   |   | 28,951 |   |   |   | - |   |   |   | 28,951 |   |
|     Federal agency issued                                      |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        residential mortgage-backed securities 1 |   |           | -      |   |   |   | 167,158 |   |   |   | - |   |   |   | 167,158 |   |
|             Subtotal   |   |           | 11,152 |   |   |   | 308,933 |   |   |   | 8,246 |   |   |   | 328,331 |   |
| Corporate obligations:                                                             |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Industrial                         |   |           | -      |   |   |   | 425,412 |   |   |   | 2,963 |   |   |   | 428,375 |   |
|         Energy                             |   |           | -      |   |   |   | 199,303 |   |   |   | - |   |   |   | 199,303 |   |
|         Technology                         |   |           | -      |   |   |   | 41,206 |   |   |   | - |   |   |   | 41,206 |   |
|         Communications                     |   |           | -      |   |   |   | 82,647 |   |   |   | - |   |   |   | 82,647 |   |
|         Financial                          |   |           | -      |   |   |   | 368,554 |   |   |   | 2,726 |   |   |   | 371,280 |   |
|         Consumer                           |   |           | -      |   |   |   | 276,602 |   |   |   | 22,254 |   |   |   | 298,856 |   |
|     Public utilities                                           |   |           | -      |   |   |   | 293,452 |   |   |   | - |   |   |   | 293,452 |   |
|             Subtotal   |   |           | -      |   |   |   | 1,687,176 |   |   |   | 27,943 |   |   |   | 1,715,119 |   |
|     Corporate private-labeled residential                      |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         mortgage-backed securities         |   |           | -      |   |   |   | 199,951 |   |   |   | - |   |   |   | 199,951 |   |
|     Other                                                      |   |           | -      |   |   |   | 272,955 |   |   |   | 8,783 |   |   |   | 281,738 |   |
|     Redeemable preferred stocks                                |   |           | 14,012 |   |   |   | - |   |   |   | - |   |   |   | 14,012 |   |
| Subtotal                                                                           |   |           | 25,164 |   |   |   | 2,469,015 |   |   |   | 44,972 |   |   |   | 2,539,151 |   |
|     Equity securities                                          |   |           | 3,691  |   |   |   | 27,986 |   |   |   | 6,149 |   |   |   | 37,826 |   |
| Total                                                                              |   | $              | 28,855 |   |   | $ | 2,497,001 |   |   | $ | 51,121 |   |   | $ | 2,576,977 |   |
|                                                                               |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Percent of Total                                                                   |   |           | 1      | % |   |   | 97 | % |   |   | 2 | % |   |   | 100 | % |
|                                                                               |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                                                       |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other policyholder funds                                                           |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Guaranteed minimum withdrawal benefits                                             |   | $              | -      |   |   | $ | - |   |   | $ | (1,873 | ) |   | $ | (1,873 | ) |
| Total                                                                              |   | $              | -      |   |   | $ | - |   |   | $ | (1,873 | ) |   | $ | (1,873 | ) |
|                                                                               |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                               |   | December 31, 2009 |   |
|------------------------------------------------------------------------------------|--------|-------------------|--------|
| Assets:                                                                            |   | Level 1           |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Bonds:                                                                             |   |              |   |   |   |   |   |   |   |   |   |   |
|     U.S. Treasury securities and                               |   |              |   |   |   |   |   |   |   |   |   |   |
|         obligations of U.S. Government     |   | $                 | 9,939  |   |   | $ | 97,723 |   |   | $ | 14,275 |   |   | $ | 121,937 |   |
|     Federal agencies 1                                         |   |              | -      |   |   |   | 28,321 |   |   |   | - |   |   |   | 28,321 |   |
|     Federal agency issued                                      |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        residential mortgage-backed securities 1 |   |              | -      |   |   |   | 172,515 |   |   |   | - |   |   |   | 172,515 |   |
|             Subtotal   |   |              | 9,939  |   |   |   | 298,559 |   |   |   | 14,275 |   |   |   | 322,773 |   |
| Corporate obligations:                                                             |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Industrial                         |   |              | -      |   |   |   | 412,292 |   |   |   | 3,654 |   |   |   | 415,946 |   |
|         Energy                             |   |              | -      |   |   |   | 200,340 |   |   |   | - |   |   |   | 200,340 |   |
|         Technology                         |   |              | -      |   |   |   | 40,864 |   |   |   | - |   |   |   | 40,864 |   |
|         Communications                     |   |              | -      |   |   |   | 86,264 |   |   |   | - |   |   |   | 86,264 |   |
|         Financial                          |   |              | -      |   |   |   | 361,768 |   |   |   | 2,840 |   |   |   | 364,608 |   |
|         Consumer                           |   |              | -      |   |   |   | 284,910 |   |   |   | 22,596 |   |   |   | 307,506 |   |
|     Public utilities                                           |   |              | -      |   |   |   | 287,687 |   |   |   | - |   |   |   | 287,687 |   |
|             Subtotal   |   |              | -      |   |   |   | 1,674,125 |   |   |   | 29,090 |   |   |   | 1,703,215 |   |
|     Corporate private-labeled residential                      |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         mortgage-backed securities         |   |              | -      |   |   |   | 200,002 |   |   |   | - |   |   |   | 200,002 |   |
|     Other                                                      |   |              | -      |   |   |   | 220,572 |   |   |   | 9,109 |   |   |   | 229,681 |   |
|     Redeemable preferred stocks                                |   |              | 13,601 |   |   |   | - |   |   |   | - |   |   |   | 13,601 |   |
| Subtotal                                                                           |   |              | 23,540 |   |   |   | 2,393,258 |   |   |   | 52,474 |   |   |   | 2,469,272 |   |
|     Equity securities                                          |   |              | 3,400  |   |   |   | 27,427 |   |   |   | 6,049 |   |   |   | 36,876 |   |
| Total                                                                              |   | $                 | 26,940 |   |   | $ | 2,420,685 |   |   | $ | 58,523 |   |   | $ | 2,506,148 |   |
|                                                                               |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Percent of Total                                                                   |   |              | 1      | % |   |   | 97 | % |   |   | 2 | % |   |   | 100 | % |
|                                                                               |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                                                       |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other policyholder funds                                                           |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Guaranteed minimum withdrawal benefits                                             |   | $                 | -      |   |   | $ | - |   |   | $ | (1,642 | ) |   | $ | (1,642 | ) |
| Total                                                                              |   | $                 | -      |   |   | $ | - |   |   | $ | (1,642 | ) |   | $ | (1,642 | ) |
|                                                                               |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                           |   | March 31, 2010 |   |
|------------------------------------------------|--------|----------------|--------|
|                                           |   |           |   |   |   |   |   |   |   |   |   |   |
|                                           |   | Level 1        |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Fixed maturities available for sale:           |   |           |   |   |   |   |   |   |   |   |   |   |
| Priced from external pricing services          |   | $              | 25,164 |   |   | $ | 2,353,240 |   |   | $ | - |   |   | $ | 2,378,404 |   |
| Priced from independent broker quotations      |   |           | -      |   |   |   | 111,210 |   |   |   | - |   |   |   | 111,210 |   |
| Priced from internal matrices and calculations |   |           | -      |   |   |   | 4,565 |   |   |   | 44,972 |   |   |   | 49,537 |   |
| Subtotal                                       |   |           | 25,164 |   |   |   | 2,469,015 |   |   |   | 44,972 |   |   |   | 2,539,151 |   |
| Equity securities available for sale:          |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Priced from external pricing services          |   |           | 3,691  |   |   |   | 2,491 |   |   |   | - |   |   |   | 6,182 |   |
| Priced from independent broker quotations      |   |           | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Priced from internal matrices and calculations |   |           | -      |   |   |   | 25,495 |   |   |   | 6,149 |   |   |   | 31,644 |   |
| Subtotal                                       |   |           | 3,691  |   |   |   | 27,986 |   |   |   | 6,149 |   |   |   | 37,826 |   |
| Total                                          |   | $              | 28,855 |   |   | $ | 2,497,001 |   |   | $ | 51,121 |   |   | $ | 2,576,977 |   |
| Percent of Total                               |   |           | 1      | % |   |   | 97 | % |   |   | 2 | % |   |   | 100 | % |
|                                           |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                           |   | December 31, 2009 |   |
|------------------------------------------------|--------|-------------------|--------|
|                                           |   |              |   |   |   |   |   |   |   |   |   |   |
|                                           |   | Level 1           |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Fixed maturities available for sale:           |   |              |   |   |   |   |   |   |   |   |   |   |
| Priced from external pricing services          |   | $                 | 23,540 |   |   | $ | 2,277,303 |   |   | $ | - |   |   | $ | 2,300,843 |   |
| Priced from independent broker quotations      |   |              | -      |   |   |   | 111,587 |   |   |   | - |   |   |   | 111,587 |   |
| Priced from internal matrices and calculations |   |              | -      |   |   |   | 4,368 |   |   |   | 52,474 |   |   |   | 56,842 |   |
| Subtotal                                       |   |              | 23,540 |   |   |   | 2,393,258 |   |   |   | 52,474 |   |   |   | 2,469,272 |   |
| Equity securities available for sale:          |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Priced from external pricing services          |   |              | 3,400  |   |   |   | 2,407 |   |   |   | - |   |   |   | 5,807 |   |
| Priced from independent broker quotations      |   |              | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Priced from internal matrices and calculations |   |              | -      |   |   |   | 25,020 |   |   |   | 6,049 |   |   |   | 31,069 |   |
| Subtotal                                       |   |              | 3,400  |   |   |   | 27,427 |   |   |   | 6,049 |   |   |   | 36,876 |   |
| Total                                          |   | $                 | 26,940 |   |   | $ | 2,420,685 |   |   | $ | 58,523 |   |   | $ | 2,506,148 |   |
| Percent of Total                               |   |              | 1      | % |   |   | 97 | % |   |   | 2 | % |   |   | 100 | % |
|                                           |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                        |   | March 31, 2010  |   |
|-----------------------------|--------|-----------------|--------|
|                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Ending |   |   |   |   |
|                        |   | Beginning       |   |   |   |   |   | Included in |   |   |   |   |   |   |   |   | Balance |   |   | Net |   |
|                        |   | Balance as      |   |   | Included |   |   | Other |   |   | Purchases |   |   | Net |   |   | as of |   |   | Unrealized Gains |   |
|                        |   | of December 31, |   |   | in |   |   | Comprehensive |   |   | and |   |   | Transfers |   |   | March 31, |   |   | (Losses) at |   |
|                        |   | 2009            |   |   | Earnings |   |   | Income |   |   | Dispositions |   |   | in (out) |   |   | 2010 |   |   | March 31, 2010 |   |
| Assets:                     |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed maturities available  |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for sale                    |   | $               | 23,540 |   |   | $ | (3 | ) |   | $ | 329 |   |   | $ | - |   |   | $ | 1,298 |   |   | $ | 25,164 |   |   | $ | 329 |   |
| Equity securities available |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for sale                    |   |            | 3,400  |   |   |   | - |   |   |   | 291 |   |   |   | - |   |   |   | - |   |   |   | 3,691 |   |   |   | 291 |   |
| Total                       |   | $               | 26,940 |   |   | $ | (3 | ) |   | $ | 620 |   |   | $ | - |   |   | $ | 1,298 |   |   | $ | 28,855 |   |   | $ | 620 |   |
|                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                        |   | March 31, 2010  |      |
|-----------------------------|--------|-----------------|-----------|
|                        |   |            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                        |   |            |      |   |   |   |   |   |   |   |   |   |   |   |   |   | Ending |   |   |   |   |
|                        |   | Beginning       |      |   |   |   |   | Included in |   |   |   |   |   |   |   |   | Balance |   |   | Net |   |
|                        |   | Balance as      |      |   | Included |   |   | Other |   |   | Purchases |   |   | Net |   |   | as of |   |   | Unrealized Gains |   |
|                        |   | of December 31, |      |   | in |   |   | Comprehensive |   |   | and |   |   | Transfers |   |   | March 31, |   |   | (Losses) at |   |
|                        |   | 2009            |      |   | Earnings |   |   | Income |   |   | Dispositions |   |   | in (out) |   |   | 2010 |   |   | March 31, 2010 |   |
| Assets:                     |   |            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed maturities available  |   |            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for sale                    |   | $               | 2,393,258 |   |   | $ | 706 |   |   | $ | 39,176 |   |   | $ | 27,240 |   |   | $ | 8,635 |   |   | $ | 2,469,015 |   |   | $ | 39,897 |   |
| Equity securities available |   |            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for sale                    |   |            | 27,427    |   |   |   | - |   |   |   | 85 |   |   |   | 474 |   |   |   | - |   |   |   | 27,986 |   |   |   | 85 |   |
| Total                       |   | $               | 2,420,685 |   |   | $ | 706 |   |   | $ | 39,261 |   |   | $ | 27,714 |   |   | $ | 8,635 |   |   | $ | 2,497,001 |   |   | $ | 39,982 |   |
|                        |   |            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                        |   | March 31, 2010  |   |
|-----------------------------|--------|-----------------|--------|
|                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Ending |   |   |   |   |
|                        |   | Beginning       |   |   |   |   |   | Included in |   |   |   |   |   |   |   |   | Balance |   |   | Net |   |
|                        |   | Balance as      |   |   | Included |   |   | Other |   |   | Purchases |   |   | Net |   |   | as of |   |   | Unrealized Gains |   |
|                        |   | of December 31, |   |   | in |   |   | Comprehensive |   |   | and |   |   | Transfers |   |   | March 31, |   |   | (Losses) at |   |
|                        |   | 2009            |   |   | Earnings |   |   | Income |   |   | Dispositions |   | in (out) |   |   | 2010 |   |   | March 31, 2010 |   |
| Assets:                     |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed maturities available  |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for sale                    |   | $               | 52,474 |   |   | $ | (336 | ) |   | $ | (200 | ) |   | $ | 2,967 |   |   | $ | (9,933 | ) |   | $ | 44,972 |   |   | $ | (200 | ) |
| Equity securities available |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for sale                    |   |            | 6,049  |   |   |   | - |   |   |   | 100 |   |   |   | - |   |   |   | - |   |   |   | 6,149 |   |   |   | 100 |   |
| Total                       |   | $               | 58,523 |   |   | $ | (336 | ) |   | $ | (100 | ) |   | $ | 2,967 |   |   | $ | (9,933 | ) |   | $ | 51,121 |   |   | $ | (100 | ) |
|                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other policyholder funds-   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| guaranteed minimum          |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| withdrawal benefits         |   | $               | (1,642 | ) |   | $ | (233 | ) |   | $ | - |   |   | $ | 2 |   |   | $ | - |   |   | $ | (1,873 | ) |   | $ | - |   |
|                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                        |   | December 31, 2009 |   |
|-----------------------------|--------|-------------------|--------|
|                        |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Ending |   |   | Net |   |
|                        |   | Beginning         |   |   |   |   |   | Included in |   |   |   |   |   |   |   |   | Balance |   |   | Unrealized Gains |   |
|                        |   | Balance as        |   |   | Included |   |   | Other |   |   | Purchases |   |   | Net |   |   | as of |   |   | (Losses) at |   |
|                        |   | of December 31,   |   |   | in |   |   | Comprehensive |   |   | and |   |   | Transfers |   |   | December 31, |   |   | December 31, |   |
|                        |   | 2008              |   |   | Earnings |   |   | Income |   |   | Dispositions |   |   | in (out) |   |   | 2009 |   |   | 2009 |   |
| Assets:                     |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed maturities available  |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for sale                    |   | $                 | 89,499 |   |   | $ | (1,172 | ) |   | $ | 3,100 |   |   | $ | (1,985 | ) |   | $ | (36,968 | ) |   | $ | 52,474 |   |   | $ | 2,533 |   |
| Equity securities available |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for sale                    |   |              | 5,141  |   |   |   | - |   |   |   | 229 |   |   |   | (129 | ) |   |   | 808 |   |   |   | 6,049 |   |   |   | 228 |   |
| Total                       |   | $                 | 94,640 |   |   | $ | (1,172 | ) |   | $ | 3,329 |   |   | $ | (2,114 | ) |   | $ | (36,160 | ) |   | $ | 58,523 |   |   | $ | 2,761 |   |
|                        |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other policyholder funds-   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| guaranteed minimum          |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| withdrawal benefits         |   | $                 | 755    |   |   | $ | (2,452 | ) |   | $ | - |   |   | $ | 55 |   |   | $ | - |   |   | $ | (1,642 | ) |   | $ | - |   |
|                        |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                     |   |      |      |   | Gross      |   |    |   |   |
|------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|------------|--------|---------|--------|--------|
|                                                                                     |   | Amortized |      |   | Unrealized |   |    | Fair   |   |
| Bonds:                                                                                   |   | Cost      |      |   | Gains      |   |    | Losses |   |   | Value |   |
|     U.S. Treasury securities and                                     |   |      |      |   |       |   |    |   |   |   |   |   |
|         obligations of U.S. Government           |   | $         | 127,726   |   |       | $      | 5,325   |   |   | $ | 829 |   |   | $ | 132,222 |   |
|     Federal agencies 1                                               |   |      | 27,453    |   |       |   | 1,498   |   |   |   | - |   |   |   | 28,951 |   |
|     Federal agency issued                                            |   |      |      |   |       |   |    |   |   |   |   |   |   |   |   |   |
|         residential mortgage-backed securities 1 |   |      | 158,378   |   |       |   | 8,807   |   |   |   | 27 |   |   |   | 167,158 |   |
|             Subtotal         |   |      | 313,557   |   |       |   | 15,630  |   |   |   | 856 |   |   |   | 328,331 |   |
|     Corporate obligations:                                           |   |      |      |   |       |   |    |   |   |   |   |   |   |   |   |   |
|         Industrial                               |   |      | 408,570   |   |       |   | 21,826  |   |   |   | 2,021 |   |   |   | 428,375 |   |
|         Energy                                   |   |      | 186,121   |   |       |   | 13,473  |   |   |   | 291 |   |   |   | 199,303 |   |
|         Technology                               |   |      | 39,352    |   |       |   | 2,171   |   |   |   | 317 |   |   |   | 41,206 |   |
|         Communications                           |   |      | 79,884    |   |       |   | 3,598   |   |   |   | 835 |   |   |   | 82,647 |   |
|         Financial                                |   |      | 368,771   |   |       |   | 11,363  |   |   |   | 8,854 |   |   |   | 371,280 |   |
|         Consumer                                 |   |      | 281,560   |   |       |   | 18,760  |   |   |   | 1,464 |   |   |   | 298,856 |   |
|     Public utilities                                                 |   |      | 276,506   |   |       |   | 18,853  |   |   |   | 1,907 |   |   |   | 293,452 |   |
|     Total corporate obligations                                      |   |      | 1,640,764 |   |       |   | 90,044  |   |   |   | 15,689 |   |   |   | 1,715,119 |   |
|     Corporate private-labeled residential                            |   |      |      |   |       |   |    |   |   |   |   |   |   |   |   |   |
|         mortgage-backed securities               |   |      | 235,946   |   |       |   | 622     |   |   |   | 36,617 |   |   |   | 199,951 |   |
|     Other                                                            |   |      | 295,555   |   |       |   | 5,248   |   |   |   | 19,065 |   |   |   | 281,738 |   |
| Redeemable preferred stocks                                                              |   |      | 14,866    |   |       |   | 208     |   |   |   | 1,062 |   |   |   | 14,012 |   |
| Fixed maturity securities                                                                |   |      | 2,500,688 |   |       |   | 111,752 |   |   |   | 73,289 |   |   |   | 2,539,151 |   |
| Equity securities                                                                        |   |      | 35,880    |   |       |   | 2,108   |   |   |   | 162 |   |   |   | 37,826 |   |
| Total                                                                                    |   | $         | 2,536,568 |   |       | $      | 113,860 |   |   | $ | 73,451 |   |   | $ | 2,576,977 |   |
|                                                                                     |   |      |      |   |       |   |    |   |   |   |   |   |   |   |   |   |

----

|                                                                                     |   |      |      |   | Gross      |   |   |   |   |
|------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|------------|--------|--------|--------|--------|
|                                                                                     |   | Amortized |      |   | Unrealized |   |   | Fair   |   |
| Bonds:                                                                                   |   | Cost      |      |   | Gains      |   |   | Losses |   |   | Value |   |
|     U.S. Treasury securities and                                     |   |      |      |   |       |   |   |   |   |   |   |   |
|         obligations of U.S. Government           |   | $         | 118,284   |   |       | $      | 4,674  |   |   | $ | 1,021 |   |   | $ | 121,937 |   |
|     Federal agencies 1                                               |   |      | 27,640    |   |       |   | 681    |   |   |   | - |   |   |   | 28,321 |   |
|     Federal agency issued                                            |   |      |      |   |       |   |   |   |   |   |   |   |   |   |   |   |
|         residential mortgage-backed securities 1 |   |      | 165,350   |   |       |   | 7,220  |   |   |   | 55 |   |   |   | 172,515 |   |
|             Subtotal         |   |      | 311,274   |   |       |   | 12,575 |   |   |   | 1,076 |   |   |   | 322,773 |   |
|     Corporate obligations:                                           |   |      |      |   |       |   |   |   |   |   |   |   |   |   |   |   |
|         Industrial                               |   |      | 400,775   |   |       |   | 17,773 |   |   |   | 2,602 |   |   |   | 415,946 |   |
|         Energy                                   |   |      | 190,836   |   |       |   | 10,703 |   |   |   | 1,199 |   |   |   | 200,340 |   |
|         Technology                               |   |      | 39,358    |   |       |   | 1,919  |   |   |   | 413 |   |   |   | 40,864 |   |
|         Communications                           |   |      | 84,146    |   |       |   | 3,492  |   |   |   | 1,374 |   |   |   | 86,264 |   |
|         Financial                                |   |      | 371,179   |   |       |   | 9,247  |   |   |   | 15,818 |   |   |   | 364,608 |   |
|         Consumer                                 |   |      | 294,732   |   |       |   | 15,210 |   |   |   | 2,436 |   |   |   | 307,506 |   |
|     Public utilities                                                 |   |      | 273,796   |   |       |   | 16,012 |   |   |   | 2,121 |   |   |   | 287,687 |   |
|     Total corporate obligations                                      |   |      | 1,654,822 |   |       |   | 74,356 |   |   |   | 25,963 |   |   |   | 1,703,215 |   |
|     Corporate private-labeled residential                            |   |      |      |   |       |   |   |   |   |   |   |   |   |   |   |   |
|         mortgage-backed securities               |   |      | 242,545   |   |       |   | 387    |   |   |   | 42,930 |   |   |   | 200,002 |   |
|     Other                                                            |   |      | 247,009   |   |       |   | 4,349  |   |   |   | 21,677 |   |   |   | 229,681 |   |
| Redeemable preferred stocks                                                              |   |      | 14,866    |   |       |   | 98     |   |   |   | 1,363 |   |   |   | 13,601 |   |
| Fixed maturity securities                                                                |   |      | 2,470,516 |   |       |   | 91,765 |   |   |   | 93,009 |   |   |   | 2,469,272 |   |
| Equity securities                                                                        |   |      | 35,405    |   |       |   | 1,657  |   |   |   | 186 |   |   |   | 36,876 |   |
| Total                                                                                    |   | $         | 2,505,921 |   |       | $      | 93,422 |   |   | $ | 93,195 |   |   | $ | 2,506,148 |   |
|                                                                                     |   |      |      |   |       |   |   |   |   |   |   |   |   |   |   |   |

|                                 |   | March 31, 2010 |      |   | December 31, 2009 |   |
|--------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
|                                 |   | Carrying       |      |   | Fair              |   |   | Carrying |   |   | Fair |   |
|                                 |   | Value          |      |   | Value             |   |   | Value |   |   | Value |   |
| Assets:                              |   |           |      |   |              |   |   |   |   |   |   |   |
| Investments:                         |   |           |      |   |              |   |   |   |   |   |   |   |
| Fixed maturities available for sale  |   | $              | 2,539,151 |   |              | $      | 2,539,151 |   |   | $ | 2,469,272 |   |   | $ | 2,469,272 |   |
| Equity securities available for sale |   |           | 37,826    |   |              |   | 37,826 |   |   |   | 36,876 |   |   |   | 36,876 |   |
| Mortgage loans                       |   |           | 456,489   |   |              |   | 471,530 |   |   |   | 457,582 |   |   |   | 456,819 |   |
| Policy loans                         |   |           | 84,896    |   |              |   | 84,896 |   |   |   | 85,585 |   |   |   | 85,585 |   |
| Cash and short-term investments      |   |           | 112,579   |   |              |   | 112,579 |   |   |   | 143,685 |   |   |   | 143,685 |   |
| Separate account assets              |   |           | 324,924   |   |              |   | 324,924 |   |   |   | 312,824 |   |   |   | 312,824 |   |
|                                 |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                         |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Individual and group annuities       |   |           | 1,001,724 |   |              |   | 980,164 |   |   |   | 999,500 |   |   |   | 977,573 |   |
| Notes payable                        |   |           | -         |   |              |   | - |   |   |   | - |   |   |   | - |   |
| Supplementary contracts without      |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| life contingencies                   |   |           | 58,963    |   |              |   | 57,234 |   |   |   | 59,399 |   |   |   | 57,023 |   |
| Separate account liabilities         |   |           | 324,924   |   |              |   | 324,924 |   |   |   | 312,824 |   |   |   | 312,824 |   |

----

|                                        |   | Amortized |      |   | Fair   |   |
|---------------------------------------------|--------|-----------|-----------|--------|--------|--------|
|                                        |   | Cost      |      |   | Value  |   |
|                                        |   |      |      |   |   |   |
| Due in one year or less                     |   | $         | 91,889    |   |   | $      | 93,485 |   |
| Due after one year through five years       |   |      | 528,032   |   |   |   | 556,438 |   |
| Due after five years through ten years      |   |      | 813,971   |   |   |   | 855,834 |   |
| Due after ten years                         |   |      | 554,553   |   |   |   | 544,909 |   |
| Securities with variable principal payments |   |      | 497,377   |   |   |   | 474,473 |   |
| Redeemable preferred stocks                 |   |      | 14,866    |   |   |   | 14,012 |   |
|                                        |   |      |      |   |   |   |   |   |
|                                        |   | $         | 2,500,688 |   |   | $      | 2,539,151 |   |
|                                        |   |      |      |   |   |   |   |   |

----

|                                     |   | Quarter Ended |   |
|------------------------------------------|--------|---------------|--------|
|                                     |   | March 31      |   |
|                                     |   | 2010          |   |   | 2009 |   |
| Gross gains resulting from:              |   |          |   |   |   |   |
| Sales of investment securities:          |   |          |   |   |   |   |
| Corporate obligations:                   |   |          |   |   |   |   |
| Industrial                               |   | $             | 229    |   |   | $ | - |   |
| Communications                           |   |          | 297    |   |   |   | - |   |
| Consumer                                 |   |          | 477    |   |   |   | - |   |
| Investment securities called and other:  |   |          |   |   |   |   |   |   |
| Federal agency issued                    |   |          |   |   |   |   |   |   |
| residential mortgage-backed securities 1 |   |          | -      |   |   |   | 191 |   |
| Corporate obligations:                   |   |          |   |   |   |   |   |   |
| Industrial                               |   |          | 175    |   |   |   | - |   |
| Energy                                   |   |          | 53     |   |   |   | - |   |
| Consumer                                 |   |          | 19     |   |   |   | - |   |
| Corporate private-labeled residential    |   |          |   |   |   |   |   |   |
| mortgage-backed securities               |   |          | 1      |   |   |   | - |   |
| Other                                    |   |          | 50     |   |   |   | 58 |   |
| Sales of real estate                     |   |          | -      |   |   |   | 661 |   |
| Total gross gains                        |   |          | 1,301  |   |   |   | 910 |   |
|                                     |   |          |   |   |   |   |   |   |
| Gross losses resulting from:             |   |          |   |   |   |   |   |   |
| Sales of investment securities           |   |          | -      |   |   |   | - |   |
| Investment securities called and other:  |   |          |   |   |   |   |   |   |
| Other                                    |   |          | (88    | ) |   |   | (1 | ) |
| Total gross losses                       |   |          | (88    | ) |   |   | (1 | ) |
| Amortization of DAC and VOBA             |   |          | 110    |   |   |   | 505 |   |
| Net realized investment gains, excluding |   |          |   |   |   |   |   |   |
| impairment losses                        |   |          | 1,323  |   |   |   | 1,414 |   |
|                                     |   |          |   |   |   |   |   |   |

----

|                                          |   | Quarter Ended |   |
|-----------------------------------------------|--------|---------------|--------|
|                                          |   | March 31      |   |
|                                          |   | 2010          |   |   | 2009 |   |
| Net impairment losses recognized in earnings: |   |          |   |   |   |   |
| Corporate obligations:                        |   |          |   |   |   |   |
| Industrial                                    |   |          | -      |   |   |   | (4,332 | ) |
| Financial                                     |   |          | -      |   |   |   | (2,011 | ) |
| Consumer                                      |   |          | -      |   |   |   | (1,697 | ) |
| Corporate private-labeled residential         |   |          |   |   |   |   |   |   |
| mortgage-backed securities                    |   |          | (851   | ) |   |   | (13,366 | ) |
| Other                                         |   |          | (740   | ) |   |   | - |   |
| Total other-than-temporary impairment losses  |   |          | (1,591 | ) |   |   | (21,406 | ) |
| Portion of loss recognized in other           |   |          |   |   |   |   |   |   |
| comprehensive income:                         |   |          |   |   |   |   |   |   |
| Corporate obligations:                        |   |          |   |   |   |   |   |   |
| Industrial                                    |   |          | -      |   |   |   | 1,676 |   |
| Financial                                     |   |          | -      |   |   |   | 465 |   |
| Consumer                                      |   |          | -      |   |   |   | 462 |   |
| Corporate private-labeled residential         |   |          |   |   |   |   |   |   |
| mortgage-backed securities                    |   |          | 5      |   |   |   | 12,685 |   |
| Net impairment losses recognized in earnings  |   |          | (1,586 | ) |   |   | (6,118 | ) |
| Realized investment losses                    |   | $             | (263   | ) |   | $ | (4,704 | ) |
|                                          |   |          |   |   |   |   |   |   |

----

----

|                                     |   | Less Than 12 Months |    |   | 12 Months or Longer |   |   | Total  |   |
|------------------------------------------|--------|---------------------|---------|--------|---------------------|--------|--------|--------|--------|
|                                     |   | Fair                |    |   | Unrealized          |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| Bonds:                                   |   | Value               |    |   | Losses              |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| U.S. Treasury securities and             |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| obligations of U.S. Government           |   | $                   | 41,373  |   |                | $      | 724    |   |   | $ | 3,024 |   |   | $ | 105 |   |   | $ | 44,397 |   |   | $ | 829 |   |
| Federal agency issued                    |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| residential mortgage-backed securities 1 |   |                | -       |   |                |   | -      |   |   |   | 5,964 |   |   |   | 27 |   |   |   | 5,964 |   |   |   | 27 |   |
| Subtotal                                 |   |                | 41,373  |   |                |   | 724    |   |   |   | 8,988 |   |   |   | 132 |   |   |   | 50,361 |   |   |   | 856 |   |
| Corporate obligations:                   |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Industrial                               |   |                | 59,510  |   |                |   | 1,160  |   |   |   | 15,580 |   |   |   | 861 |   |   |   | 75,090 |   |   |   | 2,021 |   |
| Energy                                   |   |                | 9,322   |   |                |   | 42     |   |   |   | 5,085 |   |   |   | 249 |   |   |   | 14,407 |   |   |   | 291 |   |
| Technology                               |   |                | 4,069   |   |                |   | 17     |   |   |   | 7,407 |   |   |   | 300 |   |   |   | 11,476 |   |   |   | 317 |   |
| Communications                           |   |                | 4,422   |   |                |   | 36     |   |   |   | 17,432 |   |   |   | 799 |   |   |   | 21,854 |   |   |   | 835 |   |
| Financial                                |   |                | 36,380  |   |                |   | 606    |   |   |   | 103,428 |   |   |   | 8,248 |   |   |   | 139,808 |   |   |   | 8,854 |   |
| Consumer                                 |   |                | 16,014  |   |                |   | 716    |   |   |   | 17,869 |   |   |   | 748 |   |   |   | 33,883 |   |   |   | 1,464 |   |
| Public utilities                         |   |                | 31,662  |   |                |   | 725    |   |   |   | 11,783 |   |   |   | 1,182 |   |   |   | 43,445 |   |   |   | 1,907 |   |
| Total corporate obligations              |   |                | 161,379 |   |                |   | 3,302  |   |   |   | 178,584 |   |   |   | 12,387 |   |   |   | 339,963 |   |   |   | 15,689 |   |
| Corporate private-labeled residential    |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| mortgage-backed securities               |   |                | 12,724  |   |                |   | 163    |   |   |   | 155,628 |   |   |   | 36,454 |   |   |   | 168,352 |   |   |   | 36,617 |   |
| Other                                    |   |                | 42,877  |   |                |   | 714    |   |   |   | 139,452 |   |   |   | 18,351 |   |   |   | 182,329 |   |   |   | 19,065 |   |
| Redeemable preferred stocks              |   |                | 831     |   |                |   | 2      |   |   |   | 7,973 |   |   |   | 1,060 |   |   |   | 8,804 |   |   |   | 1,062 |   |
| Fixed maturity securities                |   |                | 259,184 |   |                |   | 4,905  |   |   |   | 490,625 |   |   |   | 68,384 |   |   |   | 749,809 |   |   |   | 73,289 |   |
| Equity securities                        |   |                | -       |   |                |   | -      |   |   |   | 2,009 |   |   |   | 162 |   |   |   | 2,009 |   |   |   | 162 |   |
| Total                                    |   | $                   | 259,184 |   |                | $      | 4,905  |   |   | $ | 492,634 |   |   | $ | 68,546 |   |   | $ | 751,818 |   |   | $ | 73,451 |   |
|                                     |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                     |   | Less than 12 months |    |   | 12 months or longer |   |   | Total  |   |
|------------------------------------------|--------|---------------------|---------|--------|---------------------|--------|--------|--------|--------|
|                                     |   | Fair                |    |   | Unrealized          |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| Bonds:                                   |   | Value               |    |   | Losses              |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| U.S. Treasury securities and             |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| obligations of U.S. Government           |   | $                   | 30,616  |   |                | $      | 913    |   |   | $ | 3,040 |   |   | $ | 108 |   |   | $ | 33,656 |   |   | $ | 1,021 |   |
| Federal agency issued                    |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| residential mortgage-backed securities 1 |   |                | 1,363   |   |                |   | 4      |   |   |   | 6,191 |   |   |   | 51 |   |   |   | 7,554 |   |   |   | 55 |   |
| Subtotal                                 |   |                | 31,979  |   |                |   | 917    |   |   |   | 9,231 |   |   |   | 159 |   |   |   | 41,210 |   |   |   | 1,076 |   |
| Corporate obligations:                   |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Industrial                               |   |                | 55,724  |   |                |   | 562    |   |   |   | 24,393 |   |   |   | 2,040 |   |   |   | 80,117 |   |   |   | 2,602 |   |
| Energy                                   |   |                | 12,392  |   |                |   | 167    |   |   |   | 11,822 |   |   |   | 1,032 |   |   |   | 24,214 |   |   |   | 1,199 |   |
| Technology                               |   |                | 4,012   |   |                |   | 76     |   |   |   | 7,369 |   |   |   | 337 |   |   |   | 11,381 |   |   |   | 413 |   |
| Communications                           |   |                | 2,353   |   |                |   | 44     |   |   |   | 20,797 |   |   |   | 1,330 |   |   |   | 23,150 |   |   |   | 1,374 |   |
| Financial                                |   |                | 35,437  |   |                |   | 568    |   |   |   | 126,213 |   |   |   | 15,250 |   |   |   | 161,650 |   |   |   | 15,818 |   |
| Consumer                                 |   |                | 21,753  |   |                |   | 898    |   |   |   | 34,167 |   |   |   | 1,538 |   |   |   | 55,920 |   |   |   | 2,436 |   |
| Public utilities                         |   |                | 34,108  |   |                |   | 731    |   |   |   | 19,916 |   |   |   | 1,390 |   |   |   | 54,024 |   |   |   | 2,121 |   |
| Total corporate obligations              |   |                | 165,779 |   |                |   | 3,046  |   |   |   | 244,677 |   |   |   | 22,917 |   |   |   | 410,456 |   |   |   | 25,963 |   |
| Corporate private-labeled residential    |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| mortgage-backed securities               |   |                | 18,319  |   |                |   | 2,266  |   |   |   | 158,813 |   |   |   | 40,664 |   |   |   | 177,132 |   |   |   | 42,930 |   |
| Other                                    |   |                | 25,747  |   |                |   | 940    |   |   |   | 149,415 |   |   |   | 20,737 |   |   |   | 175,162 |   |   |   | 21,677 |   |
| Redeemable preferred stocks              |   |                | 831     |   |                |   | 2      |   |   |   | 7,672 |   |   |   | 1,361 |   |   |   | 8,503 |   |   |   | 1,363 |   |
| Fixed maturity securities                |   |                | 242,655 |   |                |   | 7,171  |   |   |   | 569,808 |   |   |   | 85,838 |   |   |   | 812,463 |   |   |   | 93,009 |   |
| Equity securities                        |   |                | -       |   |                |   | -      |   |   |   | 1,986 |   |   |   | 186 |   |   |   | 1,986 |   |   |   | 186 |   |
| Total                                    |   | $                   | 242,655 |   |                | $      | 7,171  |   |   | $ | 571,794 |   |   | $ | 86,024 |   |   | $ | 814,449 |   |   | $ | 93,195 |   |
|                                     |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| ·   | 79 security issues representing 40% of the issues with unrealized losses, including 95% being rated as investment grade, were below cost for less than one year; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 77 security issues representing 39% of the issues with unrealized losses, including 74% being rated as investment grade, were below cost for one year or more and less than three years; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 43 security issues representing 21% of the issues with unrealized losses, including 77% being rated as investment grade, were below cost for three years or more. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 84 security issues representing 36% of the issues with unrealized losses, including 93% being rated as investment grade, were below cost for less than one year; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 96 security issues representing 41% of the issues with unrealized losses, including 80% being rated as investment grade, were below cost for one year or more and less than three years; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | 52 security issues representing 23% of the issues with unrealized losses, including 81% being rated as investment grade, were below cost for three years or more. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                        |   | March 31, 2010 |    |
|---------------------------------------------|--------|----------------|---------|
|                                        |   |           |    |   | Gross |   |
| Fixed maturity security securities          |   | Fair           |    |   | Unrealized |   |
| available for sale:                         |   | Value          |    |   | Losses |   |
| Due in one year or less                     |   | $              | 5,389   |   |   | $ | 9 |   |
| Due after one year through five years       |   |           | 50,234  |   |   |   | 2,959 |   |
| Due after five years through ten years      |   |           | 177,188 |   |   |   | 6,587 |   |
| Due after ten years                         |   |           | 298,049 |   |   |   | 25,423 |   |
| Total                                       |   |           | 530,860 |   |   |   | 34,978 |   |
| Securities with variable principal payments |   |           | 210,145 |   |   |   | 37,249 |   |
| Redeemable preferred stocks                 |   |           | 8,804   |   |   |   | 1,062 |   |
| Total                                       |   | $              | 749,809 |   |   | $ | 73,289 |   |
|                                        |   |           |    |   |   |   |   |   |

|                                        |   | December 31, 2009 |    |
|---------------------------------------------|--------|-------------------|---------|
|                                        |   |              |    |   | Gross |   |
| Fixed maturity security securities          |   | Fair              |    |   | Unrealized |   |
| available for sale:                         |   | Value             |    |   | Losses |   |
| Due in one year or less                     |   | $                 | 10,483  |   |   | $ | 26 |   |
| Due after one year through five years       |   |              | 65,359  |   |   |   | 4,842 |   |
| Due after five years through ten years      |   |              | 220,600 |   |   |   | 12,402 |   |
| Due after ten years                         |   |              | 295,339 |   |   |   | 30,521 |   |
| Total                                       |   |              | 591,781 |   |   |   | 47,791 |   |
| Securities with variable principal payments |   |              | 212,179 |   |   |   | 43,855 |   |
| Redeemable preferred stocks                 |   |              | 8,503   |   |   |   | 1,363 |   |
| Total                                       |   | $                 | 812,463 |   |   | $ | 93,009 |   |
|                                        |   |              |    |   |   |   |   |   |

----

| Security                                             |   | Description                                                                 |
|------------------------------------------------------|--------|-----------------------------------------------------------------------------|
| Specialty retailer of home items                     |   | Negative impact of consumer defaults and delinquency rates.                 |
|                                                 |   | Issuer recently amended credit agreements and the security                  |
|                                                 |   | continues to perform within contractual obligations.                        |
|                                                 |   |                                                                        |
| Two financial institutions                           |   | Institutions impacted by housing and mortgage crisis.  Securities |
|                                                 |   | continue to perform within contractual obligations.                         |
|                                                 |   |                                                                        |
| Collateralized debt obligation backed by residential |   | Impacted by delinquencies and foreclosures in subprime and                  |
| mortgage-backed securities                           |   | Alt-A markets and extreme declines in market valuations regardless          |
|                                                 |   | of individual security performance.  Investment continues to      |
|                                                 |   | perform within contractual obligations.                                     |
|                                                 |   |                                                                        |
| Native American hotel and entertainment security     |   | Negative impact of economy on hotel and entertainment business              |
|                                                 |   | in Northeast.  Guarantees from monoline insurer have begun to     |
|                                                 |   | supplement required payments.                                               |

| Credit losses on securities held at beginning of period in other        |   |   |   |
|-------------------------------------------------------------------------|--------|--------|--------|
| comprehensive income (loss)                                             |   | $      | 8,179  |   |
| Additions for credit losses not previously recognized in other-than-    |   |   |   |   |
| temporary impairment                                                    |   |   | 334    |   |
| Additions for increases in the credit loss for which an other-than-     |   |   |   |   |
| temporary impairment previously recognized when there was no            |   |   |   |   |
| intent to sell the security before recovery of its amortized cost basis |   |   | 1,252  |   |
| Reductions for securities sold during the period (realized)             |   |   | -      |   |
| Reductions for securities previously recognized in other                |   |   |   |   |
| comprehensive income (loss) earnings because of intent to sell          |   |   |   |   |
| the security before recovery of its amortized cost basis                |   |   | -      |   |
| Reductions for increases in cash flows expected to be collected         |   |   |   |   |
| that are recognized over the remaining life of the security             |   |   | (437   | ) |
| Credit losses on securities held at the end of period in other          |   |   |   |   |
| comprehensive income (loss)                                             |   | $      | 9,328  |   |
|                                                                    |   |   |   |   |

----

| Net unrealized gains (losses) arising during the year     |   | $      | 39,807  |   |
|-----------------------------------------------------------|--------|--------|---------|--------|
| Less:                                                     |   |   |    |   |
| Realized investment gains, excluding                      |   |   |    |   |
| impairment losses                                         |   |   | 1,213   |   |
| Other-than-temporary impairment losses                    |   |   |    |   |
| recognized in earnings                                    |   |   | (1,591  | )      |
| Other-than-temporary impairment losses                    |   |   |    |   |
| recognized in other comprehensive income                  |   |   | 5       |   |
| Net unrealized gains (losses) excluding impairment losses |   |   | 40,180  |   |
| Change in benefit plan obligations                        |   |   | -       |   |
| Effect on DAC and VOBA                                    |   |   | (14,059 | )      |
| Policyholder account balances                             |   |   | (1,881  | )      |
| Deferred income taxes                                     |   |   | (8,484  | )      |
| Other comprehensive income                                |   |   | 15,756  |   |
| Net income                                                |   |   | 963     |   |
| Comprehensive income                                      |   | $      | 16,719  |   |
|                                                      |   |   |    |   |

|                              |   | Unrealized     |   |   | Unrealized     |   |    |        |   |   |    |   |   |         |    |   |       |   |   |   |   |
|-----------------------------------|--------|----------------|--------|--------|----------------|--------|---------|-------------|--------|--------|---------|--------|--------|--------------|---------|--------|------------|--------|--------|--------|--------|
|                              |   | Gain (Loss) on |   |   | Gain (Loss) on |   |    | Benefit     |   |   | DAC/    |   |   | Policyholder |    |   |       |   |   |   |   |
|                              |   | Non-Impaired   |   |   | Impaired       |   |    | Plan        |   |   | VOBA    |   |   | Account      |    |   |       |   |   |   |   |
|                              |   | Securities     |   |   | Securities     |   |    | Obligations |   |   | Impact  |   |   | Balances     |    |   | Tax Effect |   |   | Total  |   |
|                              |   |           |   |   |           |   |    |        |   |   |    |   |   |         |    |   |       |   |   |   |   |
| Beginning of year                 |   | $              | 22,795 |   |           | $      | (22,566 | )           |   | $      | (57,402 | )      |   | $            | 1,055   |   |       | $      | -      |   |   | $ | 19,641 |   |   | $ | (36,477 | ) |
| Other comprehensive income (loss) |   |           | 36,293 |   |           |   | 3,887   |        |   |   | -       |   |   |         | (14,059 | )      |       |   | (1,881 | )      |   |   | (8,484 | ) |   |   | 15,756 |   |
| End of period                     |   | $              | 59,088 |   |           | $      | (18,679 | )           |   | $      | (57,402 | )      |   | $            | (13,004 | )      |       | $      | (1,881 | )      |   | $ | 11,157 |   |   | $ | (20,721 | ) |
|                              |   |           |   |   |           |   |    |        |   |   |    |   |   |         |    |   |       |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                   |   |   | Individual |   |   | Group     |   |   | Old      |   |   | Intercompany  |   |   |   |   |
|------------------------|--------|--------|------------|--------|--------|-----------|--------|--------|----------|--------|--------|---------------|--------|--------|--------|--------|
|                   |   |   | Insurance  |   |   | Insurance |   |   | American |   |   | Eliminations1 |   |   | Total  |   |
| Insurance revenues:    |   |   |       |   |   |      |   |   |     |   |   |          |   |   |   |   |
| First quarter:         | 2010   |   | $          | 33,533 |   |      | $      | 11,892 |     |   | $      | 16,012        |   |   | $      | (131   | ) |   | $ | 61,306 |   |
|                   | 2009   |   |       | 32,731 |   |      |   | 12,816 |     |   |   | 15,366        |   |   |   | (144   | ) |   |   | 60,769 |   |
|                   |   |   |       |   |   |      |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |
| Net investment income: |   |   |       |   |   |      |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |
| First quarter:         | 2010   |   | $          | 40,095 |   |      | $      | 151    |     |   | $      | 3,058         |   |   | $      | -      |   |   | $ | 43,304 |   |
|                   | 2009   |   |       | 39,917 |   |      |   | 137    |     |   |   | 3,085         |   |   |   | -      |   |   |   | 43,139 |   |
|                   |   |   |       |   |   |      |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |
| Net income (loss):     |   |   |       |   |   |      |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |
| First quarter:         | 2010   |   | $          | 1,901  |   |      | $      | (535   | )        |   | $      | (403          | )      |   | $      | -      |   |   | $ | 963 |   |
| 2009                   |   |   | (4,571     | )      |   |      | (204   | )      |     |   | 227    |          |   |   | -      |   |   |   | (4,548 | ) |

|                               |   | Pension Benefits |   |   | Other Benefits |   |
|------------------------------------|--------|------------------|--------|--------|----------------|--------|
|                               |   | Quarter Ended    |   |   | Quarter Ended  |   |
|                               |   | March 31         |   |   | March 31       |   |
|                               |   | 2010             |   |   | 2009           |   |   | 2010 |   |   | 2009 |   |
|                               |   |             |   |   |           |   |   |   |   |   |   |   |
| Service cost                       |   | $                | 473    |   |           | $      | 488 |   |   | $ | 204 |   |   | $ | 169 |   |
| Interest cost                      |   |             | 1,819  |   |           |   | 1,557 |   |   |   | 458 |   |   |   | 328 |   |
| Expected return on plan assets     |   |             | (2,159 | )      |           |   | (1,897 | ) |   |   | (11 | ) |   |   | (10 | ) |
| Amortization of:                   |   |             |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Unrecognized actuarial gain (loss) |   |             | 1,034  |   |           |   | 483 |   |   |   | (59 | ) |   |   | 35 |   |
| Unrecognized prior service cost    |   |             | (142   | )      |           |   | (131 | ) |   |   | (57 | ) |   |   | (46 | ) |
| Net periodic benefit cost          |   | $                | 1,025  |   |           | $      | 500 |   |   | $ | 535 |   |   | $ | 476 |   |
|                               |   |             |   |   |           |   |   |   |   |   |   |   |   |   |   |   |

----

----

| ·   | The sale of life, annuity, and accident and health products; |
|--------------------|--------------------------------------------------------------|

| ·   | The rate of mortality, lapse and surrenders of future policy benefits and policyholder account balances; |
|--------------------|----------------------------------------------------------------------------------------------------------|

----

| ·   | The rate of morbidity, disability and incurrence of other policyholder benefits; |
|--------------------|----------------------------------------------------------------------------------|

| ·   | Persistency of existing insurance policies; |
|--------------------|---------------------------------------------|

| ·   | Interest rates credited to policyholders; |
|--------------------|-------------------------------------------|

| ·   | The effectiveness of reinsurance programs; |
|--------------------|--------------------------------------------|

| ·   | The amount of investment assets under management; |
|--------------------|---------------------------------------------------|

| ·   | Investment spreads earned on policyholder account balances; |
|--------------------|-------------------------------------------------------------|

| ·   | The ability to maximize investment returns and minimize risks such as interest rate risk, credit risk and equity risk; |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| ·   | Timely and cost-effective access to liquidity; and |
|--------------------|----------------------------------------------------|

| ·   | Management of distribution costs and operating expenses. |
|--------------------|----------------------------------------------------------|

----

|                                |   | Quarter Ended March 31 |   |
|-------------------------------------|--------|------------------------|--------|
|                                |   | 2010                   |   |   | % Change |   |   | 2009 |   |   | % Change |   |
| New premiums:                       |   |                   |   |   |   |   |   |   |   |   |   |   |
| Individual life insurance           |   | $                      | 3,934  |   |   |   | 20 |   |   | $ | 3,268 |   |   |   | 4 |   |
| Immediate annuities                 |   |                   | 5,386  |   |   |   | 24 |   |   |   | 4,359 |   |   |   | 47 |   |
| Group life insurance                |   |                   | 629    |   |   |   | 39 |   |   |   | 451 |   |   |   | (12 | ) |
| Group accident and health insurance |   |                   | 3,327  |   |   |   | 39 |   |   |   | 2,399 |   |   |   | (8 | ) |
| Total new premiums                  |   |                   | 13,276 |   |   |   | 27 |   |   |   | 10,477 |   |   |   | 13 |   |
| Renewal premiums                    |   |                   | 34,653 |   |   |   | (4 | ) |   |   | 36,063 |   |   |   | 2 |   |
| Total premiums                      |   | $                      | 47,929 |   |   |   | 3 |   |   | $ | 46,540 |   |   |   | 5 |   |
|                                |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                              |   | Quarter Ended March 31 |   |
|-----------------------------------|--------|------------------------|--------|
|                              |   | 2010                   |   |   | % Change |   |   | 2009 |   |   | % Change |   |
| New deposits:                     |   |                   |   |   |   |   |   |   |   |   |   |   |
| Universal life insurance          |   | $                      | 3,436  |   |   |   | 88 |   |   | $ | 1,830 |   |   |   | (24 | ) |
| Variable universal life insurance |   |                   | 241    |   |   |   | (40 | ) |   |   | 404 |   |   |   | (20 | ) |
| Fixed deferred annuities          |   |                   | 11,008 |   |   |   | (28 | ) |   |   | 15,312 |   |   |   | 176 |   |
| Variable annuities                |   |                   | 5,923  |   |   |   | 107 |   |   |   | 2,860 |   |   |   | (63 | ) |
| Total new deposits                |   |                   | 20,608 |   |   |   | 1 |   |   |   | 20,406 |   |   |   | 26 |   |
| Renewal deposits                  |   |                   | 33,120 |   |   |   | (1 | ) |   |   | 33,541 |   |   |   | 3 |   |
| Total deposits                    |   | $                      | 53,728 |   |   |   | - |   |   | $ | 53,947 |   |   |   | 11 |   |
|                              |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                                          |   | Quarter Ended |   |
|-----------------------------------------------|--------|---------------|--------|
|                                          |   | March 31      |   |
|                                          |   | 2010          |   |   | 2009 |   |
| Gross gains resulting from:                   |   |          |   |   |   |   |
| Sales of investment securities                |   | $             | 1,003  |   |   | $ | - |   |
| Investment securities called and other        |   |          | 298    |   |   |   | 249 |   |
| Sales of real estate                          |   |          | -      |   |   |   | 661 |   |
| Total gross gains                             |   |          | 1,301  |   |   |   | 910 |   |
| Gross losses resulting from:                  |   |          |   |   |   |   |   |   |
| Sales of investment securities                |   |          | -      |   |   |   | - |   |
| Investment securities called and other        |   |          | (88    | ) |   |   | (1 | ) |
| Total gross losses                            |   |          | (88    | ) |   |   | (1 | ) |
| Amortization of DAC and VOBA                  |   |          | 110    |   |   |   | 505 |   |
| Net realized investment gains, excluding      |   |          |   |   |   |   |   |   |
| impairment losses                             |   |          | 1,323  |   |   |   | 1,414 |   |
|                                          |   |          |   |   |   |   |   |   |
| Net impairment losses recognized in earnings: |   |          |   |   |   |   |   |   |
| Total other-than-temporary impairment losses  |   |          | (1,591 | ) |   |   | (21,406 | ) |
| Portion of loss recognized in other           |   |          |   |   |   |   |   |   |
| comprehensive income (loss)                   |   |          | 5      |   |   |   | 15,288 |   |
| Net impairment losses recognized in earnings  |   |          | (1,586 | ) |   |   | (6,118 | ) |
| Realized investment losses                    |   | $             | (263   | ) |   | $ | (4,704 | ) |
|                                          |   |          |   |   |   |   |   |   |

| Bonds:                                                                        |   |   |   |
|-------------------------------------------------------------------------------|--------|--------|--------|
|     Corporate private-labeled residential                 |   |   |   |
|         mortgage-backed securities    |   | $      | 1,252  |   |
|     Other                                                 |   |   | 334    |   |
|             Total |   | $      | 1,586  |   |
|                                                                          |   |   |   |   |

----

|                          |   | Impairment |   |        |
|-------------------------------|--------|------------|--------|-------------|
| Security                      |   | Loss       |   | Description |
|                          |   |       |   |        |
| Other - 8 securities          |   | $          | 1,586  |        |   |
|     Total |   | $          | 1,586  |        |   |
|                          |   |       |   |        |   |

| Bonds:                                                                        |   |   |   |
|-------------------------------------------------------------------------------|--------|--------|--------|
|     Corporate obligations:                                |   |   |   |
|         Industrial                    |   | $      | 2,656  |   |
|         Financial                     |   |   | 1,546  |   |
|         Consumer                      |   |   | 1,235  |   |
|     Total corporate obligations                           |   |   | 5,437  |   |
|     Corporate private-labeled residential                 |   |   |   |   |
|         mortgage-backed securities    |   |   | 681    |   |
|             Total |   | $      | 6,118  |   |
|                                                                          |   |   |   |   |

|                                           |   | Impairment |   |        |
|------------------------------------------------|--------|------------|--------|-------------|
| Security                                       |   | Loss       |   | Description |
|                                           |   |       |   |        |
| Trucking company                               |   | $          | 1,636  |        | Reduced shipping volume from the recession, new |
|                                           |   |       |   |        | credit restrictions due to renegotiation of debt |
|                                           |   |       |   |        | covenants, the need to retire longer-term debt |
|                                           |   |       |   |        | and additional stress on cash resources. |
| Mortgage and financial guaranty insurer        |   |       | 1,546  |        | Mortgage delinquencies and defaults coupled |
|                                           |   |       |   |        | with rating downgrades and the need to raise |
|                                           |   |       |   |        | additional capital to meet future needs. |
| Developer and manufacturer of imaging products |   |       | 1,235  |        | Sales decrease from economic decline, declining |
|                                           |   |       |   |        | revenues and declining liquidity position. |
| Printing and publishing company                |   |       | 1,020  |        | Acceptance of a tender offer resulted in an |
|                                           |   |       |   |        | impairment to fair value. |
| Other - 3 securities                           |   |       | 681    |        |   |
|     Total                  |   | $          | 6,118  |        |   |
|                                           |   |       |   |        |   |

| ·   | Credit risk, relating to the uncertainty associated with the continued ability of a given obligor to make timely payments of principal and interest; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Interest rate risk, relating to the market price and/or cash flow associated with changes in market yields and curves; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Liquidity risk, relating to the risk that investments cannot be converted into cash when needed or that the terms for conversion have a negative effect on the Company. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                     |   |   |      |   |     |   |   | Fair Value    |   |   |       |   |   | Fair Value    |    |   |       |   |
|------------------------------------------|--------|--------|-----------|--------|----------|--------|--------|---------------|--------|--------|------------|--------|--------|---------------|---------|--------|------------|--------|
|                                     |   |   |      |   |     |   |   | of Securities |   |   |       |   |   | of Securities |    |   |       |   |
|                                     |   | Total  |      |   |     |   |   | with Gross    |   |   | Gross      |   |   | with Gross    |    |   | Gross      |   |
|                                     |   | Fair   |      |   | %        |   |   | Unrealized    |   |   | Unrealized |   |   | Unrealized    |    |   | Unrealized |   |
|                                     |   | Value  |      |   | of Total |   |   | Gains         |   |   | Gains      |   |   | Losses        |    |   | Losses     |   |
| U.S. Treasury securities and             |   |   |      |   |     |   |   |          |   |   |       |   |   |          |    |   |       |   |
| obligations of U.S. Government           |   | $      | 132,222   |   |     |   | 5      | %             |   | $      | 87,825     |   |   | $             | 5,325   |   |       | $      | 44,397 |   |   | $ | 829 |   |
| Federal agencies 1                       |   |   | 28,951    |   |     |   | 1      | %             |   |   | 28,951     |   |   |          | 1,498   |   |       |   | - |   |   |   | - |   |
| Federal agency issued                    |   |   |      |   |     |   |   |          |   |   |       |   |   |          |    |   |       |   |   |   |   |   |   |   |
| residential mortgage-backed securities 1 |   |   | 167,158   |   |     |   | 6      | %             |   |   | 161,194    |   |   |          | 8,807   |   |       |   | 5,964 |   |   |   | 27 |   |
| Subtotal                                 |   |   | 328,331   |   |     |   | 12     | %             |   |   | 277,970    |   |   |          | 15,630  |   |       |   | 50,361 |   |   |   | 856 |   |
| Corporate obligations:                   |   |   |      |   |     |   |   |          |   |   |       |   |   |          |    |   |       |   |   |   |   |   |   |   |
| Industrial                               |   |   | 428,375   |   |     |   | 17     | %             |   |   | 353,285    |   |   |          | 21,826  |   |       |   | 75,090 |   |   |   | 2,021 |   |
| Energy                                   |   |   | 199,303   |   |     |   | 8      | %             |   |   | 184,896    |   |   |          | 13,473  |   |       |   | 14,407 |   |   |   | 291 |   |
| Technology                               |   |   | 41,206    |   |     |   | 2      | %             |   |   | 29,730     |   |   |          | 2,171   |   |       |   | 11,476 |   |   |   | 317 |   |
| Communications                           |   |   | 82,647    |   |     |   | 3      | %             |   |   | 60,793     |   |   |          | 3,598   |   |       |   | 21,854 |   |   |   | 835 |   |
| Financial                                |   |   | 371,280   |   |     |   | 14     | %             |   |   | 231,472    |   |   |          | 11,363  |   |       |   | 139,808 |   |   |   | 8,854 |   |
| Consumer                                 |   |   | 298,856   |   |     |   | 12     | %             |   |   | 264,973    |   |   |          | 18,760  |   |       |   | 33,883 |   |   |   | 1,464 |   |
| Public utilities                         |   |   | 293,452   |   |     |   | 11     | %             |   |   | 250,007    |   |   |          | 18,853  |   |       |   | 43,445 |   |   |   | 1,907 |   |
| Subtotal                                 |   |   | 1,715,119 |   |     |   | 67     | %             |   |   | 1,375,156  |   |   |          | 90,044  |   |       |   | 339,963 |   |   |   | 15,689 |   |
| Corporate private-labeled residential    |   |   |      |   |     |   |   |          |   |   |       |   |   |          |    |   |       |   |   |   |   |   |   |   |
| mortgage-backed securities               |   |   | 199,951   |   |     |   | 8      | %             |   |   | 31,599     |   |   |          | 622     |   |       |   | 168,352 |   |   |   | 36,617 |   |
| Other                                    |   |   | 281,738   |   |     |   | 11     | %             |   |   | 99,409     |   |   |          | 5,248   |   |       |   | 182,329 |   |   |   | 19,065 |   |
| Redeemable preferred stocks              |   |   | 14,012    |   |     |   | 1      | %             |   |   | 5,208      |   |   |          | 208     |   |       |   | 8,804 |   |   |   | 1,062 |   |
| Fixed Maturities                         |   |   | 2,539,151 |   |     |   | 99     | %             |   |   | 1,789,342  |   |   |          | 111,752 |   |       |   | 749,809 |   |   |   | 73,289 |   |
| Equity Maturities                        |   |   | 37,826    |   |     |   | 1      | %             |   |   | 35,817     |   |   |          | 2,108   |   |       |   | 2,009 |   |   |   | 162 |   |
| Total                                    |   | $      | 2,576,977 |   |     |   | 100    | %             |   | $      | 1,825,159  |   |   | $             | 113,860 |   |       | $      | 751,818 |   |   | $ | 73,451 |   |
|                                     |   |   |      |   |     |   |   |          |   |   |       |   |   |          |    |   |       |   |   |   |   |   |   |   |

----

|                                     |   |   |      |   |     |   |   | Fair Value    |   |   |       |   |   | Fair Value    |   |   |       |   |
|------------------------------------------|--------|--------|-----------|--------|----------|--------|--------|---------------|--------|--------|------------|--------|--------|---------------|--------|--------|------------|--------|
|                                     |   |   |      |   |     |   |   | of Securities |   |   |       |   |   | of Securities |   |   |       |   |
|                                     |   | Total  |      |   |     |   |   | with Gross    |   |   | Gross      |   |   | with Gross    |   |   | Gross      |   |
|                                     |   | Fair   |      |   | %        |   |   | Unrealized    |   |   | Unrealized |   |   | Unrealized    |   |   | Unrealized |   |
|                                     |   | Value  |      |   | of Total |   |   | Gains         |   |   | Gains      |   |   | Losses        |   |   | Losses     |   |
| U.S. Treasury securities and             |   |   |      |   |     |   |   |          |   |   |       |   |   |          |   |   |       |   |
| obligations of U.S. Government           |   | $      | 121,937   |   |     |   | 5      | %             |   | $      | 88,281     |   |   | $             | 4,674  |   |       | $      | 33,656 |   |   | $ | 1,021 |   |
| Federal agencies 1                       |   |   | 28,321    |   |     |   | 1      | %             |   |   | 28,321     |   |   |          | 681    |   |       |   | - |   |   |   | - |   |
| Federal agency issued                    |   |   |      |   |     |   |   |          |   |   |       |   |   |          |   |   |       |   |   |   |   |   |   |   |
| residential mortgage-backed securities 1 |   |   | 172,515   |   |     |   | 7      | %             |   |   | 164,961    |   |   |          | 7,220  |   |       |   | 7,554 |   |   |   | 55 |   |
| Subtotal                                 |   |   | 322,773   |   |     |   | 13     | %             |   |   | 281,563    |   |   |          | 12,575 |   |       |   | 41,210 |   |   |   | 1,076 |   |
| Corporate obligations:                   |   |   |      |   |     |   |   |          |   |   |       |   |   |          |   |   |       |   |   |   |   |   |   |   |
| Industrial                               |   |   | 415,946   |   |     |   | 17     | %             |   |   | 335,829    |   |   |          | 17,773 |   |       |   | 80,117 |   |   |   | 2,602 |   |
| Energy                                   |   |   | 200,340   |   |     |   | 8      | %             |   |   | 176,126    |   |   |          | 10,703 |   |       |   | 24,214 |   |   |   | 1,199 |   |
| Technology                               |   |   | 40,864    |   |     |   | 2      | %             |   |   | 29,483     |   |   |          | 1,919  |   |       |   | 11,381 |   |   |   | 413 |   |
| Communications                           |   |   | 86,264    |   |     |   | 3      | %             |   |   | 63,114     |   |   |          | 3,492  |   |       |   | 23,150 |   |   |   | 1,374 |   |
| Financial                                |   |   | 364,608   |   |     |   | 15     | %             |   |   | 202,958    |   |   |          | 9,247  |   |       |   | 161,650 |   |   |   | 15,818 |   |
| Consumer                                 |   |   | 307,506   |   |     |   | 12     | %             |   |   | 251,586    |   |   |          | 15,210 |   |       |   | 55,920 |   |   |   | 2,436 |   |
| Public utilities                         |   |   | 287,687   |   |     |   | 11     | %             |   |   | 233,663    |   |   |          | 16,012 |   |       |   | 54,024 |   |   |   | 2,121 |   |
| Subtotal                                 |   |   | 1,703,215 |   |     |   | 68     | %             |   |   | 1,292,759  |   |   |          | 74,356 |   |       |   | 410,456 |   |   |   | 25,963 |   |
| Corporate private-labeled residential    |   |   |      |   |     |   |   |          |   |   |       |   |   |          |   |   |       |   |   |   |   |   |   |   |
| mortgage-backed securities               |   |   | 200,002   |   |     |   | 8      | %             |   |   | 22,870     |   |   |          | 387    |   |       |   | 177,132 |   |   |   | 42,930 |   |
| Other                                    |   |   | 229,681   |   |     |   | 9      | %             |   |   | 54,519     |   |   |          | 4,349  |   |       |   | 175,162 |   |   |   | 21,677 |   |
| Redeemable preferred stocks              |   |   | 13,601    |   |     |   | 1      | %             |   |   | 5,098      |   |   |          | 98     |   |       |   | 8,503 |   |   |   | 1,363 |   |
| Fixed Maturities                         |   |   | 2,469,272 |   |     |   | 99     | %             |   |   | 1,656,809  |   |   |          | 91,765 |   |       |   | 812,463 |   |   |   | 93,009 |   |
| Equity Maturities                        |   |   | 36,876    |   |     |   | 1      | %             |   |   | 34,890     |   |   |          | 1,657  |   |       |   | 1,986 |   |   |   | 186 |   |
| Total                                    |   | $      | 2,506,148 |   |     |   | 100    | %             |   | $      | 1,691,699  |   |   | $             | 93,422 |   |       | $      | 814,449 |   |   | $ | 93,195 |   |
|                                     |   |   |      |   |     |   |   |          |   |   |       |   |   |          |   |   |       |   |   |   |   |   |   |   |

|                      |   |   |                         | March 31, 2010 |     |      | December 31, 2009 |   |
|---------------------------|--------|--------|------------------------------|----------------|----------|-----------|-------------------|--------|
|                      |   |   |                         | Fair           |     |      | %                 |   |   | Fair |   |   | % |   |
| Equivalent S&P Rating |   | Value  |                         |           | of Total |      |              | Value  |   |   | of Total |   |
| AAA                       |   | $      | 611,808                      |           |     |      | 24                | %      |   | $ | 601,262 |   |   |   | 24 | % |
| AA                        |   |   | 198,144                      |           |     |      | 8                 | %      |   |   | 150,543 |   |   |   | 6 | % |
| A                         |   |   |                         |           |     | 704,464   |              |   |   | 28 | % |   |   | 696,861 |   |   |   | 29 | % |
| BBB                       |   |   | 855,568                      |           |     |      | 33                | %      |   |   | 866,902 |   |   |   | 35 | % |
|                      |   |   | Total investment grade       |           |     | 2,369,984 |              |   |   | 93 | % |   |   | 2,315,568 |   |   |   | 94 | % |
| BB                        |   |   | 81,943                       |           |     |      | 3                 | %      |   |   | 78,996 |   |   |   | 3 | % |
| B and below               |   |   | 87,224                       |           |     |      | 4                 | %      |   |   | 74,708 |   |   |   | 3 | % |
|                      |   |   | Total below investment grade |           |     | 169,167   |              |   |   | 7 | % |   |   | 153,704 |   |   |   | 6 | % |
|                      |   |   |                         |           | $        | 2,539,151 |              |   |   | 100 | % |   | $ | 2,469,272 |   |   |   | 100 | % |
|                      |   |   |                         |           |     |      |              |   |   |   |   |   |   |   |   |   |   |   |   |

----

| ·   | Intent and ability to make all principal and interest payments when due; |
|--------------------|--------------------------------------------------------------------------|

| ·   | Near-term business prospects; |
|--------------------|-------------------------------|

| ·   | Cash flow and liquidity; |
|--------------------|--------------------------|

| ·   | Credit ratings; |
|--------------------|-----------------|

| ·   | Business climate; |
|--------------------|-------------------|

| ·   | Management changes; |
|--------------------|---------------------|

| ·   | Litigation and government actions; and |
|--------------------|----------------------------------------|

| ·   | Other similar factors. |
|--------------------|------------------------|

| ·   | The current fair value of the security as compared to cost; |
|--------------------|-------------------------------------------------------------|

| ·   | The credit rating of the security; |
|--------------------|------------------------------------|

| ·   | The extent and the length of time the fair value has been below amortized cost; |
|--------------------|---------------------------------------------------------------------------------|

| ·   | The financial position of the issuer, including the current and future impact of any specific events, material declines in the issuer’s revenues, margins, cash positions, liquidity issues, asset quality, debt levels and income results; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Significant management or organizational changes; |
|--------------------|---------------------------------------------------|

| ·   | Significant uncertainty regarding the issuer’s industry; |
|--------------------|----------------------------------------------------------------|

| ·   | Violation of financial covenants; |
|--------------------|-----------------------------------|

| ·   | Consideration of information or evidence that supports timely recovery; |
|--------------------|-------------------------------------------------------------------------|

| ·   | The Company’s intent and ability to hold an equity security until it recovers in value; |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | Whether the Company intends to sell a debt security and whether it is more likely than not that the Company will be required to sell a debt security before recovery of the amortized cost basis; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other business factors related to the issuer’s industry. |
|--------------------|----------------------------------------------------------------|

----

| ·   | The risk that the Company’s assessment of an issuer’s ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | The risk that the performance of the underlying collateral for securities could deteriorate in the future and the Company’s credit enhancement levels and recovery values do not provide sufficient protection to the Company’s contractual principal and interest; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The risk that fraudulent, inaccurate or misleading information could be provided to the Company’s credit, investment and accounting professionals who determine the fair value estimates and accounting treatment for securities; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The risk that new information obtained by the Company or changes in other facts and circumstances may lead the Company to change its intent to sell the security before it recovers in value; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The risk that the facts and circumstances change such that it becomes more likely than not that the Company will be required to sell the investment before recovery of the amortized cost basis; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The risk that the methodology or assumptions used to develop estimates of the portion of impairments due to credit prove, over time, to be inaccurate or insufficient. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                               |   | Fair   |    |   | Amortized |   |    | Unrealized |   |   | %        |   |
|------------------------------------|--------|--------|---------|--------|-----------|--------|---------|------------|--------|--------|----------|--------|
|                               |   | Value  |    |   | Cost      |   |    | Losses     |   |   | of Total |   |
| Residential & Non-agency MBS 1 |   |   |    |   |      |   |    |       |   |   |     |   |
| Investment Grade:                  |   |   |    |   |      |   |    |       |   |   |     |   |
| Vintage 2003 and earlier           |   | $      | 74,241  |   |      | $      | 74,595  |       |   | $      | (354     | )      |   |   | 1 | % |
| 2004                               |   |   | 68,593  |   |      |   | 79,552  |       |   |   | (10,959  | )      |   |   | 23 | % |
| 2005                               |   |   | 31,930  |   |      |   | 42,394  |       |   |   | (10,464  | )      |   |   | 21 | % |
| 2006                               |   |   | 4,064   |   |      |   | 4,278   |       |   |   | (214     | )      |   |   | - |   |
| 2007                               |   |   | -       |   |      |   | -       |       |   |   | -        |   |   |   | - |   |
| Total investment grade             |   |   | 178,828 |   |      |   | 200,819 |       |   |   | (21,991  | )      |   |   | 45 | % |
|                               |   |   |    |   |      |   |    |       |   |   |     |   |   |   |   |   |
| Below Investment Grade:            |   |   |    |   |      |   |    |       |   |   |     |   |   |   |   |   |
| Vintage 2003 and earlier           |   |   | -       |   |      |   | -       |       |   |   | -        |   |   |   | - |   |
| 2004                               |   |   | -       |   |      |   | -       |       |   |   | -        |   |   |   | - |   |
| 2005                               |   |   | 32,389  |   |      |   | 49,928  |       |   |   | (17,539  | )      |   |   | 35 | % |
| 2006                               |   |   | 2,465   |   |      |   | 4,777   |       |   |   | (2,312   | )      |   |   | 5 | % |
| 2007                               |   |   | 4,034   |   |      |   | 5,812   |       |   |   | (1,778   | )      |   |   | 4 | % |
| Total below investment grade       |   |   | 38,888  |   |      |   | 60,517  |       |   |   | (21,629  | )      |   |   | 44 | % |
|                               |   |   |    |   |      |   |    |       |   |   |     |   |   |   |   |   |
| Other Structured Securities:       |   |   |    |   |      |   |    |       |   |   |     |   |   |   |   |   |
| Investment grade                   |   |   | 104,368 |   |      |   | 107,225 |       |   |   | (2,857   | )      |   |   | 6 | % |
| Below investment grade             |   |   | 42,354  |   |      |   | 44,621  |       |   |   | (2,267   | )      |   |   | 5 | % |
| Total other                        |   |   | 146,722 |   |      |   | 151,846 |       |   |   | (5,124   | )      |   |   | 11 | % |
| Total structured securities        |   | $      | 364,438 |   |      | $      | 413,182 |       |   | $      | (48,744  | )      |   |   | 100 | % |
|                               |   |   |    |   |      |   |    |       |   |   |     |   |   |   |   |   |

----

|                               |   | Fair   |    |   | Amortized |   |    | Unrealized |   |   | %        |   |
|------------------------------------|--------|--------|---------|--------|-----------|--------|---------|------------|--------|--------|----------|--------|
|                               |   | Value  |    |   | Cost      |   |    | Losses     |   |   | of Total |   |
| Residential & Non-agency MBS 1 |   |   |    |   |      |   |    |       |   |   |     |   |
| Investment Grade:                  |   |   |    |   |      |   |    |       |   |   |     |   |
| Vintage 2003 and earlier           |   | $      | 78,263  |   |      | $      | 80,303  |       |   | $      | (2,040   | )      |   |   | 4 | % |
| 2004                               |   |   | 67,494  |   |      |   | 80,074  |       |   |   | (12,580  | )      |   |   | 22 | % |
| 2005                               |   |   | 30,729  |   |      |   | 42,761  |       |   |   | (12,032  | )      |   |   | 21 | % |
| 2006                               |   |   | 3,706   |   |      |   | 4,318   |       |   |   | (612     | )      |   |   | 1 | % |
| 2007                               |   |   | -       |   |      |   | -       |       |   |   | -        |   |   |   | - |   |
| Total investment grade             |   |   | 180,192 |   |      |   | 207,456 |       |   |   | (27,264  | )      |   |   | 48 | % |
|                               |   |   |    |   |      |   |    |       |   |   |     |   |   |   |   |   |
| Below Investment Grade:            |   |   |    |   |      |   |    |       |   |   |     |   |   |   |   |   |
| Vintage 2003 and earlier           |   |   | -       |   |      |   | -       |       |   |   | -        |   |   |   | - |   |
| 2004                               |   |   | -       |   |      |   | -       |       |   |   | -        |   |   |   | - |   |
| 2005                               |   |   | 30,897  |   |      |   | 50,565  |       |   |   | (19,668  | )      |   |   | 34 | % |
| 2006                               |   |   | 2,669   |   |      |   | 5,715   |       |   |   | (3,046   | )      |   |   | 5 | % |
| 2007                               |   |   | 3,944   |   |      |   | 5,859   |       |   |   | (1,915   | )      |   |   | 3 | % |
| Total below investment grade       |   |   | 37,510  |   |      |   | 62,139  |       |   |   | (24,629  | )      |   |   | 42 | % |
|                               |   |   |    |   |      |   |    |       |   |   |     |   |   |   |   |   |
| Other Structured Securities:       |   |   |    |   |      |   |    |       |   |   |     |   |   |   |   |   |
| Investment grade                   |   |   | 106,822 |   |      |   | 110,327 |       |   |   | (3,505   | )      |   |   | 6 | % |
| Below investment grade             |   |   | 42,659  |   |      |   | 44,965  |       |   |   | (2,306   | )      |   |   | 4 | % |
| Total other                        |   |   | 149,481 |   |      |   | 155,292 |       |   |   | (5,811   | )      |   |   | 10 | % |
| Total structured securities        |   | $      | 367,183 |   |      | $      | 424,887 |       |   | $      | (57,704  | )      |   |   | 100 | % |
|                               |   |   |    |   |      |   |    |       |   |   |     |   |   |   |   |   |

----

|                                     |   | Less Than 12 Months |    |   | 12 Months or Longer |   |   | Total  |   |
|------------------------------------------|--------|---------------------|---------|--------|---------------------|--------|--------|--------|--------|
|                                     |   | Fair                |    |   | Unrealized          |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| Bonds:                                   |   | Value               |    |   | Losses              |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| U.S. Treasury securities and             |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| obligations of U.S. Government           |   | $                   | 41,373  |   |                | $      | 724    |   |   | $ | 3,024 |   |   | $ | 105 |   |   | $ | 44,397 |   |   | $ | 829 |   |
| Federal agency issued                    |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| residential mortgage-backed securities 1 |   |                | -       |   |                |   | -      |   |   |   | 5,964 |   |   |   | 27 |   |   |   | 5,964 |   |   |   | 27 |   |
| Subtotal                                 |   |                | 41,373  |   |                |   | 724    |   |   |   | 8,988 |   |   |   | 132 |   |   |   | 50,361 |   |   |   | 856 |   |
| Corporate obligations:                   |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Industrial                               |   |                | 59,510  |   |                |   | 1,160  |   |   |   | 15,580 |   |   |   | 861 |   |   |   | 75,090 |   |   |   | 2,021 |   |
| Energy                                   |   |                | 9,322   |   |                |   | 42     |   |   |   | 5,085 |   |   |   | 249 |   |   |   | 14,407 |   |   |   | 291 |   |
| Technology                               |   |                | 4,069   |   |                |   | 17     |   |   |   | 7,407 |   |   |   | 300 |   |   |   | 11,476 |   |   |   | 317 |   |
| Communications                           |   |                | 4,422   |   |                |   | 36     |   |   |   | 17,432 |   |   |   | 799 |   |   |   | 21,854 |   |   |   | 835 |   |
| Financial                                |   |                | 36,380  |   |                |   | 606    |   |   |   | 103,428 |   |   |   | 8,248 |   |   |   | 139,808 |   |   |   | 8,854 |   |
| Consumer                                 |   |                | 16,014  |   |                |   | 716    |   |   |   | 17,869 |   |   |   | 748 |   |   |   | 33,883 |   |   |   | 1,464 |   |
| Public utilities                         |   |                | 31,662  |   |                |   | 725    |   |   |   | 11,783 |   |   |   | 1,182 |   |   |   | 43,445 |   |   |   | 1,907 |   |
| Total corporate obligations              |   |                | 161,379 |   |                |   | 3,302  |   |   |   | 178,584 |   |   |   | 12,387 |   |   |   | 339,963 |   |   |   | 15,689 |   |
| Corporate private-labeled residential    |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| mortgage-backed securities               |   |                | 12,724  |   |                |   | 163    |   |   |   | 155,628 |   |   |   | 36,454 |   |   |   | 168,352 |   |   |   | 36,617 |   |
| Other                                    |   |                | 42,877  |   |                |   | 714    |   |   |   | 139,452 |   |   |   | 18,351 |   |   |   | 182,329 |   |   |   | 19,065 |   |
| Redeemable preferred stocks              |   |                | 831     |   |                |   | 2      |   |   |   | 7,973 |   |   |   | 1,060 |   |   |   | 8,804 |   |   |   | 1,062 |   |
| Fixed maturity securities                |   |                | 259,184 |   |                |   | 4,905  |   |   |   | 490,625 |   |   |   | 68,384 |   |   |   | 749,809 |   |   |   | 73,289 |   |
| Equity securities                        |   |                | -       |   |                |   | -      |   |   |   | 2,009 |   |   |   | 162 |   |   |   | 2,009 |   |   |   | 162 |   |
| Total                                    |   | $                   | 259,184 |   |                | $      | 4,905  |   |   | $ | 492,634 |   |   | $ | 68,546 |   |   | $ | 751,818 |   |   | $ | 73,451 |   |
|                                     |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                     |   | Less than 12 months |    |   | 12 months or longer |   |   | Total  |   |
|------------------------------------------|--------|---------------------|---------|--------|---------------------|--------|--------|--------|--------|
|                                     |   | Fair                |    |   | Unrealized          |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| Bonds:                                   |   | Value               |    |   | Losses              |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| U.S. Treasury securities and             |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| obligations of U.S. Government           |   | $                   | 30,616  |   |                | $      | 913    |   |   | $ | 3,040 |   |   | $ | 108 |   |   | $ | 33,656 |   |   | $ | 1,021 |   |
| Federal agency issued                    |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| residential mortgage-backed securities 1 |   |                | 1,363   |   |                |   | 4      |   |   |   | 6,191 |   |   |   | 51 |   |   |   | 7,554 |   |   |   | 55 |   |
| Subtotal                                 |   |                | 31,979  |   |                |   | 917    |   |   |   | 9,231 |   |   |   | 159 |   |   |   | 41,210 |   |   |   | 1,076 |   |
| Corporate obligations:                   |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Industrial                               |   |                | 55,724  |   |                |   | 562    |   |   |   | 24,393 |   |   |   | 2,040 |   |   |   | 80,117 |   |   |   | 2,602 |   |
| Energy                                   |   |                | 12,392  |   |                |   | 167    |   |   |   | 11,822 |   |   |   | 1,032 |   |   |   | 24,214 |   |   |   | 1,199 |   |
| Technology                               |   |                | 4,012   |   |                |   | 76     |   |   |   | 7,369 |   |   |   | 337 |   |   |   | 11,381 |   |   |   | 413 |   |
| Communications                           |   |                | 2,353   |   |                |   | 44     |   |   |   | 20,797 |   |   |   | 1,330 |   |   |   | 23,150 |   |   |   | 1,374 |   |
| Financial                                |   |                | 35,437  |   |                |   | 568    |   |   |   | 126,213 |   |   |   | 15,250 |   |   |   | 161,650 |   |   |   | 15,818 |   |
| Consumer                                 |   |                | 21,753  |   |                |   | 898    |   |   |   | 34,167 |   |   |   | 1,538 |   |   |   | 55,920 |   |   |   | 2,436 |   |
| Public utilities                         |   |                | 34,108  |   |                |   | 731    |   |   |   | 19,916 |   |   |   | 1,390 |   |   |   | 54,024 |   |   |   | 2,121 |   |
| Total corporate obligations              |   |                | 165,779 |   |                |   | 3,046  |   |   |   | 244,677 |   |   |   | 22,917 |   |   |   | 410,456 |   |   |   | 25,963 |   |
| Corporate private-labeled residential    |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| mortgage-backed securities               |   |                | 18,319  |   |                |   | 2,266  |   |   |   | 158,813 |   |   |   | 40,664 |   |   |   | 177,132 |   |   |   | 42,930 |   |
| Other                                    |   |                | 25,747  |   |                |   | 940    |   |   |   | 149,415 |   |   |   | 20,737 |   |   |   | 175,162 |   |   |   | 21,677 |   |
| Redeemable preferred stocks              |   |                | 831     |   |                |   | 2      |   |   |   | 7,672 |   |   |   | 1,361 |   |   |   | 8,503 |   |   |   | 1,363 |   |
| Fixed maturity securities                |   |                | 242,655 |   |                |   | 7,171  |   |   |   | 569,808 |   |   |   | 85,838 |   |   |   | 812,463 |   |   |   | 93,009 |   |
| Equity securities                        |   |                | -       |   |                |   | -      |   |   |   | 1,986 |   |   |   | 186 |   |   |   | 1,986 |   |   |   | 186 |   |
| Total                                    |   | $                   | 242,655 |   |                | $      | 7,171  |   |   | $ | 571,794 |   |   | $ | 86,024 |   |   | $ | 814,449 |   |   | $ | 93,195 |   |
|                                     |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| ·   | 79 security issues representing 40% of the issues with unrealized losses, including 95% being rated as investment grade, were below cost for less than one year; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 77 security issues representing 39% of the issues with unrealized losses, including 74% being rated as investment grade, were below cost for one year or more and less than three years; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 43 security issues representing 21% of the issues with unrealized losses, including 77% being rated as investment grade, were below cost for three years or more. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 84 security issues representing 36% of the issues with unrealized losses, including 93% being rated as investment grade, were below cost for less than one year; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 96 security issues representing 41% of the issues with unrealized losses, including 80% being rated as investment grade, were below cost for one year or more and less than three years; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | 52 security issues representing 23% of the issues with unrealized losses, including 81% being rated as investment grade, were below cost for three years or more. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                  |   | March 31, 2010 |    |
|-------------------------------------------------------|--------|----------------|---------|
|                                                  |   |           |    |   |   |   |   | Gross |   |
|                                                  |   | Amortized      |    |   | Fair |   |   | Unrealized |   |
|                                                  |   | Cost           |    |   | Value |   |   | Losses |   |
| Securities owned without realized impairment:         |   |           |    |   |   |   |   |   |   |
| Unrealized losses of 10% or less                      |   | $              | 602,530 |   |   | $ | 582,204 |   |   | $ | 20,326 |   |
| Unrealized losses of 20% or less and greater than 10% |   |           | 80,024  |   |   |   | 69,416 |   |   |   | 10,608 |   |
| Subtotal                                              |   |           | 682,554 |   |   |   | 651,620 |   |   |   | 30,934 |   |
| Unrealized losses greater than 20%:                   |   |           |    |   |   |   |   |   |   |   |   |   |
| Investment grade                                      |   |           |    |   |   |   |   |   |   |   |   |   |
| Less than six months                                  |   |           | 15,583  |   |   |   | 12,348 |   |   |   | 3,235 |   |
| Six months or more and less than twelve months        |   |           | 13,207  |   |   |   | 10,177 |   |   |   | 3,030 |   |
| Twelve months or greater                              |   |           | 27,499  |   |   |   | 17,850 |   |   |   | 9,649 |   |
| Total investment grade                                |   |           | 56,289  |   |   |   | 40,375 |   |   |   | 15,914 |   |
| Below investment grade                                |   |           |    |   |   |   |   |   |   |   |   |   |
| Less than six months                                  |   |           | -       |   |   |   | - |   |   |   | - |   |
| Six months or more and less than twelve months        |   |           | -       |   |   |   | - |   |   |   | - |   |
| Twelve months or greater                              |   |           | 16,931  |   |   |   | 11,973 |   |   |   | 4,958 |   |
| Total below investment grade                          |   |           | 16,931  |   |   |   | 11,973 |   |   |   | 4,958 |   |
| Unrealized losses greater than 20%                    |   |           | 73,220  |   |   |   | 52,348 |   |   |   | 20,872 |   |
| Subtotal                                              |   |           | 755,774 |   |   |   | 703,968 |   |   |   | 51,806 |   |
|                                                  |   |           |    |   |   |   |   |   |   |   |   |   |
| Securities owned with realized impairment:            |   |           |    |   |   |   |   |   |   |   |   |   |
| Unrealized losses of 10% or less                      |   |           | 8,486   |   |   |   | 8,054 |   |   |   | 432 |   |
| Unrealized losses of 20% or less and greater than 10% |   |           | 6,846   |   |   |   | 5,587 |   |   |   | 1,259 |   |
| Subtotal                                              |   |           | 15,332  |   |   |   | 13,641 |   |   |   | 1,691 |   |
| Unrealized losses greater than 20%:                   |   |           |    |   |   |   |   |   |   |   |   |   |
| Investment grade                                      |   |           |    |   |   |   |   |   |   |   |   |   |
| Less than six months                                  |   |           | -       |   |   |   | - |   |   |   | - |   |
| Six months or more and less than twelve months        |   |           | -       |   |   |   | - |   |   |   | - |   |
| Twelve months or greater                              |   |           | 9,432   |   |   |   | 7,325 |   |   |   | 2,107 |   |
| Total investment grade                                |   |           | 9,432   |   |   |   | 7,325 |   |   |   | 2,107 |   |
| Below investment grade                                |   |           |    |   |   |   |   |   |   |   |   |   |
| Less than six months                                  |   |           | -       |   |   |   | - |   |   |   | - |   |
| Six months or more and less than twelve months        |   |           | -       |   |   |   | - |   |   |   | - |   |
| Twelve months or greater                              |   |           | 44,731  |   |   |   | 26,884 |   |   |   | 17,847 |   |
| Total below investment grade                          |   |           | 44,731  |   |   |   | 26,884 |   |   |   | 17,847 |   |
| Unrealized losses greater than 20%                    |   |           | 54,163  |   |   |   | 34,209 |   |   |   | 19,954 |   |
| Subtotal                                              |   |           | 69,495  |   |   |   | 47,850 |   |   |   | 21,645 |   |
|                                                  |   |           |    |   |   |   |   |   |   |   |   |   |
| Total unrealized losses                               |   | $              | 825,269 |   |   | $ | 751,818 |   |   | $ | 73,451 |   |
|                                                  |   |           |    |   |   |   |   |   |   |   |   |   |

----

|                                                  |   | December 31, 2009 |    |
|-------------------------------------------------------|--------|-------------------|---------|
|                                                  |   |              |    |   |   |   |   | Gross |   |
|                                                  |   | Amortized         |    |   | Fair |   |   | Unrealized |   |
|                                                  |   | Cost              |    |   | Value |   |   | Losses |   |
| Securities owned without realized impairment:         |   |              |    |   |   |   |   |   |   |
| Unrealized losses of 10% or less                      |   | $                 | 633,514 |   |   | $ | 608,280 |   |   | $ | 25,234 |   |
| Unrealized losses of 20% or less and greater than 10% |   |              | 109,379 |   |   |   | 94,348 |   |   |   | 15,031 |   |
| Subtotal                                              |   |              | 742,893 |   |   |   | 702,628 |   |   |   | 40,265 |   |
| Unrealized losses greater than 20%:                   |   |              |    |   |   |   |   |   |   |   |   |   |
| Investment grade                                      |   |              |    |   |   |   |   |   |   |   |   |   |
| Less than six months                                  |   |              | 13,125  |   |   |   | 9,821 |   |   |   | 3,304 |   |
| Six months or more and less than twelve months        |   |              | 25,413  |   |   |   | 19,627 |   |   |   | 5,786 |   |
| Twelve months or greater                              |   |              | 34,906  |   |   |   | 22,225 |   |   |   | 12,681 |   |
| Total investment grade                                |   |              | 73,444  |   |   |   | 51,673 |   |   |   | 21,771 |   |
| Below investment grade                                |   |              |    |   |   |   |   |   |   |   |   |   |
| Less than six months                                  |   |              | -       |   |   |   | - |   |   |   | - |   |
| Six months or more and less than twelve months        |   |              | 4,654   |   |   |   | 2,954 |   |   |   | 1,700 |   |
| Twelve months or greater                              |   |              | 15,139  |   |   |   | 11,139 |   |   |   | 4,000 |   |
| Total below investment grade                          |   |              | 19,793  |   |   |   | 14,093 |   |   |   | 5,700 |   |
| Unrealized losses greater than 20%                    |   |              | 93,237  |   |   |   | 65,766 |   |   |   | 27,471 |   |
| Subtotal                                              |   |              | 836,130 |   |   |   | 768,394 |   |   |   | 67,736 |   |
|                                                  |   |              |    |   |   |   |   |   |   |   |   |   |
| Securities owned with realized impairment:            |   |              |    |   |   |   |   |   |   |   |   |   |
| Unrealized losses of 10% or less                      |   |              | 4,850   |   |   |   | 4,634 |   |   |   | 216 |   |
| Unrealized losses of 20% or less and greater than 10% |   |              | 10,594  |   |   |   | 8,720 |   |   |   | 1,874 |   |
| Subtotal                                              |   |              | 15,444  |   |   |   | 13,354 |   |   |   | 2,090 |   |
| Unrealized losses greater than 20%:                   |   |              |    |   |   |   |   |   |   |   |   |   |
| Investment grade                                      |   |              |    |   |   |   |   |   |   |   |   |   |
| Less than six months                                  |   |              | -       |   |   |   | - |   |   |   | - |   |
| Six months or more and less than twelve months        |   |              | -       |   |   |   | - |   |   |   | - |   |
| Twelve months or greater                              |   |              | 17,937  |   |   |   | 12,298 |   |   |   | 5,639 |   |
| Total investment grade                                |   |              | 17,937  |   |   |   | 12,298 |   |   |   | 5,639 |   |
| Below investment grade                                |   |              |    |   |   |   |   |   |   |   |   |   |
| Less than six months                                  |   |              | 514     |   |   |   | 362 |   |   |   | 152 |   |
| Six months or more and less than twelve months        |   |              | 5,859   |   |   |   | 3,944 |   |   |   | 1,915 |   |
| Twelve months or greater                              |   |              | 31,760  |   |   |   | 16,097 |   |   |   | 15,663 |   |
| Total below investment grade                          |   |              | 38,133  |   |   |   | 20,403 |   |   |   | 17,730 |   |
| Unrealized losses greater than 20%                    |   |              | 56,070  |   |   |   | 32,701 |   |   |   | 23,369 |   |
| Subtotal                                              |   |              | 71,514  |   |   |   | 46,055 |   |   |   | 25,459 |   |
|                                                  |   |              |    |   |   |   |   |   |   |   |   |   |
| Total unrealized losses                               |   | $                 | 907,644 |   |   | $ | 814,449 |   |   | $ | 93,195 |   |
|                                                  |   |              |    |   |   |   |   |   |   |   |   |   |

----

----

|                      |   |   |                         |   |     |    |   |   |   | Gross      |     |   |   |   |
|---------------------------|--------|--------|------------------------------|--------|----------|---------|--------|--------|--------|------------|----------|--------|--------|--------|
|                      |   |   |                         | Fair   |     |    | %      |   |   | Unrealized |     |   | %      |   |
| Equivalent S&P Rating |   | Value  |                         |   | of Total |    |   | Losses |   |       | of Total |   |
| AAA                       |   | $      | 261,697                      |   |     |    | 35     | %      |   | $          | 17,199   |   |   |   | 23 | % |
| AA                        |   |   | 58,506                       |   |     |    | 8      | %      |   |       | 5,269    |   |   |   | 7 | % |
| A                    |   |   |                         |   |     | 138,859 |   |   |   | 18         | %        |   |   | 8,171  |   |   |   | 12 | % |
| BBB                       |   |   | 165,093                      |   |     |    | 22     | %      |   |       | 13,247   |   |   |   | 18 | % |
|                      |   |   | Total investment grade       |   |     | 624,155 |   |   |   | 83         | %        |   |   | 43,886 |   |   |   | 60 | % |
| BB                        |   |   | 49,609                       |   |     |    | 7      | %      |   |       | 3,734    |   |   |   | 5 | % |
| B and below               |   |   | 76,045                       |   |     |    | 10     | %      |   |       | 25,669   |   |   |   | 35 | % |
|                      |   |   | Total below investment grade |   |     | 125,654 |   |   |   | 17         | %        |   |   | 29,403 |   |   |   | 40 | % |
|                      |   |   |                         |   | $        | 749,809 |   |   |   | 100        | %        |   | $      | 73,289 |   |   |   | 100 | % |
|                      |   |   |                         |   |     |    |   |   |   |       |     |   |   |   |   |   |   |   |   |

|                      |   |   |                         |   |     |    |   |   |   | Gross      |     |   |   |   |
|---------------------------|--------|--------|------------------------------|--------|----------|---------|--------|--------|--------|------------|----------|--------|--------|--------|
|                      |   |   |                         | Fair   |     |    | %      |   |   | Unrealized |     |   | %      |   |
| Equivalent S&P Rating |   | Value  |                         |   | of Total |    |   | Losses |   |       | of Total |   |
| AAA                       |   | $      | 273,810                      |   |     |    | 34     | %      |   | $          | 24,801   |   |   |   | 27 | % |
| AA                        |   |   | 38,618                       |   |     |    | 5      | %      |   |       | 3,023    |   |   |   | 3 | % |
| A                    |   |   |                         |   |     | 148,706 |   |   |   | 18         | %        |   |   | 11,041 |   |   |   | 12 | % |
| BBB                       |   |   | 235,671                      |   |     |    | 29     | %      |   |       | 24,047   |   |   |   | 26 | % |
|                      |   |   | Total investment grade       |   | $        | 696,805 |   |   |   | 86         | %        |   | $      | 62,912 |   |   |   | 68 | % |
| BB                        |   |   | 49,136                       |   |     |    | 6      | %      |   |       | 4,032    |   |   |   | 4 | % |
| B and below               |   |   | 66,522                       |   |     |    | 8      | %      |   |       | 26,065   |   |   |   | 28 | % |
|                      |   |   | Total below investment grade |   |     | 115,658 |   |   |   | 14         | %        |   |   | 30,097 |   |   |   | 32 | % |
|                      |   |   |                         |   | $        | 812,463 |   |   |   | 100        | %        |   | $      | 93,009 |   |   |   | 100 | % |
|                      |   |   |                         |   |     |    |   |   |   |       |     |   |   |   |   |   |   |   |   |

----

|                                        |   | March 31, 2010 |    |
|---------------------------------------------|--------|----------------|---------|
|                                        |   |           |    |   | Gross |   |
| Fixed maturity security securities          |   | Fair           |    |   | Unrealized |   |
| available for sale:                         |   | Value          |    |   | Losses |   |
| Due in one year or less                     |   | $              | 5,389   |   |   | $ | 9 |   |
| Due after one year through five years       |   |           | 50,234  |   |   |   | 2,959 |   |
| Due after five years through ten years      |   |           | 177,188 |   |   |   | 6,587 |   |
| Due after ten years                         |   |           | 298,049 |   |   |   | 25,423 |   |
| Total                                       |   |           | 530,860 |   |   |   | 34,978 |   |
| Securities with variable principal payments |   |           | 210,145 |   |   |   | 37,249 |   |
| Redeemable preferred stocks                 |   |           | 8,804   |   |   |   | 1,062 |   |
| Total                                       |   | $              | 749,809 |   |   | $ | 73,289 |   |
|                                        |   |           |    |   |   |   |   |   |

|                                        |   | December 31, 2009 |    |
|---------------------------------------------|--------|-------------------|---------|
|                                        |   |              |    |   | Gross |   |
| Fixed maturity security securities          |   | Fair              |    |   | Unrealized |   |
| available for sale:                         |   | Value             |    |   | Losses |   |
| Due in one year or less                     |   | $                 | 10,483  |   |   | $ | 26 |   |
| Due after one year through five years       |   |              | 65,359  |   |   |   | 4,842 |   |
| Due after five years through ten years      |   |              | 220,600 |   |   |   | 12,402 |   |
| Due after ten years                         |   |              | 295,339 |   |   |   | 30,521 |   |
| Total                                       |   |              | 591,781 |   |   |   | 47,791 |   |
| Securities with variable principal payments |   |              | 212,179 |   |   |   | 43,855 |   |
| Redeemable preferred stocks                 |   |              | 8,503   |   |   |   | 1,363 |   |
| Total                                       |   | $                 | 812,463 |   |   | $ | 93,009 |   |
|                                        |   |              |    |   |   |   |   |   |

| Security                                             |   | Description                                                                 |
|------------------------------------------------------|--------|-----------------------------------------------------------------------------|
| Specialty retailer of home items                     |   | Negative impact of consumer defaults and delinquency rates.                 |
|                                                 |   | Issuer recently amended credit agreements and the security                  |
|                                                 |   | continues to perform within contractual obligations.                        |
|                                                 |   |                                                                        |
| Two financial institutions                           |   | Institutions impacted by housing and mortgage crisis.  Securities |
|                                                 |   | continue to perform within contractual obligations.                         |
|                                                 |   |                                                                        |
| Collateralized debt obligation backed by residential |   | Impacted by delinquencies and foreclosures in subprime and                  |
| mortgage-backed securities                           |   | Alt-A markets and extreme declines in market valuations regardless          |
|                                                 |   | of individual security performance.  Investment continues to      |
|                                                 |   | perform within contractual obligations.                                     |
|                                                 |   |                                                                        |
| Native American hotel and entertainment security     |   | Negative impact of economy on hotel and entertainment business              |
|                                                 |   | in Northeast.  Guarantees from monoline insurer have begun to     |
|                                                 |   | supplement required payments.                                               |

----

----

----

|                                               |   | Quarter Ended |    |
|----------------------------------------------------|--------|---------------|---------|
|                                               |   | March 31      |    |
|                                               |   | 2010          |    |   | 2009 |   |
| Insurance revenues:                                |   |          |    |   |   |   |
| Premiums                                           |   | $             | 16,985  |   |   | $ | 15,807 |   |
| Contract charges                                   |   |          | 26,679  |   |   |   | 26,768 |   |
| Reinsurance ceded                                  |   |          | (10,131 | ) |   |   | (9,844 | ) |
| Total insurance revenues                           |   |          | 33,533  |   |   |   | 32,731 |   |
| Investment revenues:                               |   |          |    |   |   |   |   |   |
| Net investment income                              |   |          | 40,095  |   |   |   | 39,917 |   |
| Realized investment gains, excluding               |   |          |    |   |   |   |   |   |
| impairment losses                                  |   |          | 940     |   |   |   | 1,391 |   |
| Net impairment losses recognized in earnings:      |   |          |    |   |   |   |   |   |
| Total other-than-temporary impairment losses       |   |          | (1,542  | ) |   |   | (19,227 | ) |
| Portion of impairment losses recognized in         |   |          |    |   |   |   |   |   |
| other comprehensive income                         |   |          | 65      |   |   |   | 13,192 |   |
| Net impairment losses recognized in earnings       |   |          | (1,477  | ) |   |   | (6,035 | ) |
| Total investment revenues                          |   |          | 39,558  |   |   |   | 35,273 |   |
| Other revenues                                     |   |          | 2,342   |   |   |   | 2,392 |   |
| Total revenues                                     |   |          | 75,433  |   |   |   | 70,396 |   |
|                                               |   |          |    |   |   |   |   |   |
| Policyholder benefits                              |   |          | 27,904  |   |   |   | 28,986 |   |
| Interest credited to policyholder account balances |   |          | 21,200  |   |   |   | 21,174 |   |
| Amortization of deferred acquisition costs         |   |          |    |   |   |   |   |   |
| and value of business acquired                     |   |          | 6,649   |   |   |   | 8,823 |   |
| Operating expenses                                 |   |          | 15,245  |   |   |   | 18,416 |   |
| Total benefits and expenses                        |   |          | 70,998  |   |   |   | 77,399 |   |
|                                               |   |          |    |   |   |   |   |   |
| Income (loss) before income tax expense (benefit)  |   |          | 4,435   |   |   |   | (7,003 | ) |
|                                               |   |          |    |   |   |   |   |   |
| Income tax expense (benefit)                       |   |          | 2,534   |   |   |   | (2,432 | ) |
|                                               |   |          |    |   |   |   |   |   |
| Net income (loss)                                  |   | $             | 1,901   |   |   | $ | (4,571 | ) |
|                                               |   |          |    |   |   |   |   |   |

----

|                      |   | Quarter Ended March 31 |   |
|---------------------------|--------|------------------------|--------|
|                      |   | 2010                   |   |   | % Change |   |   | 2009 |   |   | % Change |   |
| New premiums:             |   |                   |   |   |   |   |   |   |   |   |   |   |
| Individual life insurance |   | $                      | 1,307  |   |   |   | (1 | ) |   | $ | 1,321 |   |   |   | (4 | ) |
| Immediate annuities       |   |                   | 5,386  |   |   |   | 24 |   |   |   | 4,359 |   |   |   | 47 |   |
| Total new premiums        |   |                   | 6,693  |   |   |   | 18 |   |   |   | 5,680 |   |   |   | 31 |   |
| Renewal premiums          |   |                   | 10,292 |   |   |   | 2 |   |   |   | 10,127 |   |   |   | (1 | ) |
| Total premiums            |   | $                      | 16,985 |   |   |   | 7 |   |   | $ | 15,807 |   |   |   | 9 |   |
|                      |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                              |   | Quarter Ended March 31 |   |
|-----------------------------------|--------|------------------------|--------|
|                              |   | 2010                   |   |   | % Change |   |   | 2009 |   |   | % Change |   |
| New deposits:                     |   |                   |   |   |   |   |   |   |   |   |   |   |
| Universal life insurance          |   | $                      | 3,436  |   |   |   | 88 |   |   | $ | 1,830 |   |   |   | (24 | ) |
| Variable universal life insurance |   |                   | 241    |   |   |   | (40 | ) |   |   | 404 |   |   |   | (20 | ) |
| Fixed deferred annuities          |   |                   | 11,008 |   |   |   | (28 | ) |   |   | 15,312 |   |   |   | 176 |   |
| Variable annuities                |   |                   | 5,923  |   |   |   | 107 |   |   |   | 2,860 |   |   |   | (63 | ) |
| Total new deposits                |   |                   | 20,608 |   |   |   | 1 |   |   |   | 20,406 |   |   |   | 26 |   |
| Renewal deposits                  |   |                   | 33,120 |   |   |   | (1 | ) |   |   | 33,541 |   |   |   | 3 |   |
| Total deposits                    |   | $                      | 53,728 |   |   |   | - |   |   | $ | 53,947 |   |   |   | 11 |   |
|                              |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| Bonds:                                                                     |   |   |   |
|----------------------------------------------------------------------------|--------|--------|--------|
|     Corporate private-labeled residential              |   |   |   |
|         mortgage-backed securities |   | $      | 1,143  |   |
|     Other                                              |   |   | 334    |   |
|            Total    |   | $      | 1,477  |   |
|                                                                       |   |   |   |   |

|                          |   | Impairment |   |        |
|-------------------------------|--------|------------|--------|-------------|
| Security                      |   | Loss       |   | Description |
|                          |   |       |   |        |
| Other - 8 securities          |   | $          | 1,477  |        |   |
|     Total |   | $          | 1,477  |        |   |
|                          |   |       |   |        |   |

| Bonds:                                                                     |   |   |   |
|----------------------------------------------------------------------------|--------|--------|--------|
|     Corporate obligations:                             |   |   |   |
|         Industrial                 |   | $      | 2,656  |   |
|         Financial                  |   |   | 1,546  |   |
|         Consumer                   |   |   | 1,235  |   |
|     Total corporate obligations                        |   |   | 5,437  |   |
|     Corporate private-labeled residential              |   |   |   |   |
|         mortgage-backed securities |   |   | 598    |   |
|            Total    |   | $      | 6,035  |   |
|                                                                       |   |   |   |   |

|                                           |   | Impairment |   |        |
|------------------------------------------------|--------|------------|--------|-------------|
| Security                                       |   | Loss       |   | Description |
|                                           |   |       |   |        |
| Trucking company                               |   | $          | 1,636  |        | Reduced shipping volume from the recession, new |
|                                           |   |       |   |        | credit restrictions due to renegotiation of debt |
|                                           |   |       |   |        | covenants, the need to retire longer-term debt |
|                                           |   |       |   |        | and additional stress on cash resources. |
| Mortgage and financial guaranty insurer        |   |       | 1,546  |        | Mortgage delinquencies and defaults coupled |
|                                           |   |       |   |        | with rating downgrades and the need to raise |
|                                           |   |       |   |        | additional capital to meet future needs. |
| Developer and manufacturer of imaging products |   |       | 1,235  |        | Sales decrease from economic decline, declining |
|                                           |   |       |   |        | revenues and declining liquidity position. |
| Printing and publishing company                |   |       | 1,020  |        | Acceptance of a tender offer resulted in an |
|                                           |   |       |   |        | impairment to fair value. |
| Other - 3 securities                           |   |       | 598    |        |   |
|     Total                  |   | $          | 6,035  |        |   |
|                                           |   |       |   |        |   |

----

----

|                           |   | Quarter Ended |   |
|--------------------------------|--------|---------------|--------|
|                           |   | March 31      |   |
|                           |   | 2010          |   |   | 2009 |   |
| Insurance revenues:            |   |          |   |   |   |   |
| Premiums                       |   | $             | 14,360 |   |   | $ | 14,667 |   |
| Reinsurance ceded              |   |          | (2,468 | ) |   |   | (1,851 | ) |
| Total insurance revenues       |   |          | 11,892 |   |   |   | 12,816 |   |
| Investment revenues:           |   |          |   |   |   |   |   |   |
| Net investment income          |   |          | 151    |   |   |   | 137 |   |
| Other revenues                 |   |          | 76     |   |   |   | 39 |   |
| Total revenues                 |   |          | 12,119 |   |   |   | 12,992 |   |
|                           |   |          |   |   |   |   |   |   |
| Policyholder benefits          |   |          | 8,295  |   |   |   | 8,601 |   |
| Operating expenses             |   |          | 4,647  |   |   |   | 4,705 |   |
| Total benefits and expenses    |   |          | 12,942 |   |   |   | 13,306 |   |
|                           |   |          |   |   |   |   |   |   |
| Loss before income tax benefit |   |          | (823   | ) |   |   | (314 | ) |
|                           |   |          |   |   |   |   |   |   |
| Income tax benefit             |   |          | (288   | ) |   |   | (110 | ) |
|                           |   |          |   |   |   |   |   |   |
| Net loss                       |   | $             | (535   | ) |   | $ | (204 | ) |
|                           |   |          |   |   |   |   |   |   |

|                       |   | Quarter Ended March 31 |   |
|----------------------------|--------|------------------------|--------|
|                       |   | 2010                   |   |   | % Change |   |   | 2009 |   |   | % Change |   |
| New premiums:              |   |                   |   |   |   |   |   |   |   |   |   |   |
| Group life insurance       |   | $                      | 629    |   |   |   | 39 |   |   | $ | 451 |   |   |   | (12 | ) |
| Group dental insurance     |   |                   | 2,160  |   |   |   | 16 |   |   |   | 1,860 |   |   |   | (11 | ) |
| Group disability insurance |   |                   | 1,112  |   |   |   | 133 |   |   |   | 477 |   |   |   | 4 |   |
| Other group insurance      |   |                   | 55     |   |   |   | (11 | ) |   |   | 62 |   |   |   | (6 | ) |
| Total new premiums         |   |                   | 3,956  |   |   |   | 39 |   |   |   | 2,850 |   |   |   | (9 | ) |
| Renewal premiums           |   |                   | 10,404 |   |   |   | (12 | ) |   |   | 11,817 |   |   |   | 12 |   |
| Total premiums             |   | $                      | 14,360 |   |   |   | (2 | ) |   | $ | 14,667 |   |   |   | 7 |   |
|                       |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                                              |   | Quarter Ended |   |
|---------------------------------------------------|--------|---------------|--------|
|                                              |   | March 31      |   |
|                                              |   | 2010          |   |   | 2009 |   |
| Insurance revenues:                               |   |          |   |   |   |   |
| Premiums                                          |   | $             | 16,715 |   |   | $ | 16,210 |   |
| Reinsurance ceded                                 |   |          | (703   | ) |   |   | (844 | ) |
| Total insurance revenues                          |   |          | 16,012 |   |   |   | 15,366 |   |
| Investment revenues:                              |   |          |   |   |   |   |   |   |
| Net investment income                             |   |          | 3,058  |   |   |   | 3,085 |   |
| Realized investment gains, excluding              |   |          |   |   |   |   |   |   |
| impairment losses                                 |   |          | 383    |   |   |   | 23 |   |
| Net impairment losses recognized in earnings:     |   |          |   |   |   |   |   |   |
| Total other-than-temporary impairment losses      |   |          | (49    | ) |   |   | (2,179 | ) |
| Portion of impairment losses recognized in        |   |          |   |   |   |   |   |   |
| other comprehensive income                        |   |          | (60    | ) |   |   | 2,096 |   |
| Net impairment losses recognized in earnings      |   |          | (109   | ) |   |   | (83 | ) |
| Total investment revenues                         |   |          | 3,332  |   |   |   | 3,025 |   |
| Other revenues                                    |   |          | 2      |   |   |   | - |   |
| Total revenues                                    |   |          | 19,346 |   |   |   | 18,391 |   |
|                                              |   |          |   |   |   |   |   |   |
| Policyholder benefits                             |   |          | 11,592 |   |   |   | 11,100 |   |
| Amortization of deferred acquisition costs        |   |          |   |   |   |   |   |   |
| and value of business acquired                    |   |          | 3,870  |   |   |   | 3,656 |   |
| Operating expenses                                |   |          | 4,529  |   |   |   | 3,277 |   |
| Total benefits and expenses                       |   |          | 19,991 |   |   |   | 18,033 |   |
|                                              |   |          |   |   |   |   |   |   |
| Income (loss) before income tax expense (benefit) |   |          | (645   | ) |   |   | 358 |   |
|                                              |   |          |   |   |   |   |   |   |
| Income tax expense (benefit)                      |   |          | (242   | ) |   |   | 131 |   |
|                                              |   |          |   |   |   |   |   |   |
| Net income (loss)                                 |   | $             | (403   | ) |   | $ | 227 |   |
|                                              |   |          |   |   |   |   |   |   |

|             |   | Quarter Ended March 31 |   |
|------------------|--------|------------------------|--------|
|             |   | 2010                   |   |   | % Change |   |   | 2009 |   |   | % Change |   |
|             |   |                   |   |   |   |   |   |   |   |   |   |   |
| New premiums     |   | $                      | 2,627  |   |   |   | 35 |   |   | $ | 1,947 |   |   |   | 10 |   |
| Renewal premiums |   |                   | 14,088 |   |   |   | (1 | ) |   |   | 14,263 |   |   |   | (2 | ) |
| Total premiums   |   | $                      | 16,715 |   |   |   | 3 |   |   | $ | 16,210 |   |   |   | (1 | ) |
|             |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                                |   | March 31 |      |   | December 31 |   |
|-------------------------------------|--------|----------|-----------|--------|-------------|--------|
|                                |   | 2010     |      |   | 2009        |   |
| Total assets less separate accounts |   | $        | 3,886,470 |   |        | $      | 3,863,361 |   |
| Total stockholders' equity          |   |     | 639,856   |   |        |   | 628,363 |   |
| Ratio of stockholders' equity       |   |     |      |   |        |   |   |   |
| to assets less separate accounts    |   |     | 16        | %      |        |   | 16 | % |

----

----

----

|              |   | Total         |   |   |   |           |   |               |   |               |   |
|-------------------|--------|---------------|--------|--------|--------|----------------|--------|--------------------|--------|--------------------|--------|
|              |   | Number of     |   |   |   |           |   | Total Number of    |   | Maximum Number     |   |
|              |   | Shares        |   |   |   |           |   | Shares Purchased   |   | of Shares that May |   |
|              |   | Purchased     |   |   |   | Average        |   | as a Part of       |   | Yet be Purchased   |   |
|              |   | Open Market/  |   |   |   | Purchase Price |   | Publicly Announced |   | Under the          |   |
| Period            |   | Benefit Plans |   |   |   | Paid per Share |   | Plans or Programs  |   | Plans or Programs  |   |
|              |   |          |   |   |   |           |   |               |   |               |   |
|              |   |          |   |   |   |           |   |               |   |               |   |
| 1/01/10 - 1/31/10 |   |          | 42,137 |   | 1      |           | $      | 30.72              |   |               | 42,137 |   |   | 957,863 |   |
|              |   |          | -      |   | 2      |           |   | -                  |   |               |   |   |   |   |   |
|              |   |          |   |   |   |           |   |               |   |               |   |   |   |   |   |
| 2/1/10 - 2/28/10  |   |          | -      |   | 1      |           |   | -                  |   |               | -      |   |   | 957,863 |   |
|              |   |          | 927    |   | 2      |           |   | 28.55              |   |               |   |   |   |   |   |
|              |   |          |   |   |   |           |   |               |   |               |   |   |   |   |   |
| 3/1/10 - 3/31/10  |   |          | 26,040 |   | 1      |           |   | 30.82              |   |               | 26,040 |   |   | 931,823 |   |
|              |   |          | -      |   | 2      |           |   | -                  |   |               |   |   |   |   |   |
|              |   |          |   |   |   |           |   |               |   |               |   |   |   |   |   |
| Total             |   |          | 69,104 |   |   |           |   |               |   |               | 68,177 |   |   |   |   |
|              |   |          |   |   |   |           |   |               |   |               |   |   |   |   |   |

----

----

|                                        KANSAS CITY LIFE INSURANCE COMPANY |   |          |       |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|------------|--------|
| CONDENSED CONSOLIDATED INCOME STATEMENT (Unaudited)                                                                                                                                                                                                                          |   |
|                                      (amounts in thousands, except share data)           |   |          |       |   |
|                                                                                                                                                                                                                                                                         |   |          |       |   |   |   |
|                                                                                                                                                                                                                                                                         |   |          |       |   |   |   |
|                                                                                                                                                                                                                                                                         |   |          |       |   |   |   |
|                                                                                                                                                                                                                                                                         |   | Quarter Ended |       |
|                                                                                                                                                                                                                                                                         |   | March 31      |       |
|                                                                                                                                                                                                                                                                         |   | 2010          |       |   | 2009 |   |
|                                                                                                                                                                                                                                                                         |   |          |       |   |   |   |
| Revenues                                                                                                                                                                                                                                                                     |   | $             | 106,767    |   |   | $ | 101,635 |   |
|                                                                                                                                                                                                                                                                         |   |          |       |   |   |   |   |   |
| Net income (loss)                                                                                                                                                                                                                                                            |   | $             | 963        |   |   | $ | (4,548 | ) |
|                                                                                                                                                                                                                                                                         |   |          |       |   |   |   |   |   |
| Net income (loss) per share,                                                                                                                                                                                                                                                 |   |          |       |   |   |   |   |   |
| basic and diluted                                                                                                                                                                                                                                                            |   | $             | 0.08       |   |   | $ | (0.40 | ) |
|                                                                                                                                                                                                                                                                         |   |          |       |   |   |   |   |   |
|                                                                                                                                                                                                                                                                         |   |          |       |   |   |   |   |   |
| Dividends paid                                                                                                                                                                                                                                                               |   | $             | 0.27       |   |   | $ | 0.27 |   |
|                                                                                                                                                                                                                                                                         |   |          |       |   |   |   |   |   |
|                                                                                                                                                                                                                                                                         |   |          |       |   |   |   |   |   |
| Average number of shares outstanding                                                                                                                                                                                                                                         |   |          | 11,526,435 |   |   |   | 11,452,398 |   |
|                                                                                                                                                                                                                                                                         |   |          |       |   |   |   |   |   |

----

|   | (a) | Exhibits: |
|--------|-----|-----------|

| 31(a)  | Section 302 Certification.  |
|--------|-----------------------------|
|   |                        |
| 31(b)  | Section 302 Certification.  |
|   |                        |
| 32(a)  | Section 1350 Certification. |

----

| /s/ R. Philip Bixby                |
|------------------------------------|
| R. Philip Bixby                    |
| President, Chief Executive Officer |
| and Chairman of the Board          |
|                               |

| /s/ Tracy W. Knapp             |
|--------------------------------|
| Tracy W. Knapp                 |
| Senior Vice President, Finance |
|                           |
|                           |

----