----

----

| For the quarterly period endedJune 30, 2011 | Commission File Numbers: 2-99959, 33-29851, 33-31711, 33-41858, 33-43008, 33-58853, 333-11699, 333-77041, 333-62837, 333-45923, 333-88069, 333-39306, 333-46566, 333-82816, 333-82824, 333-111636, 333-130699, 333-130703, 333-130704, 333-133684, 333-133685, 333-133686, 333-39034, 333-144903-01, 333-144908-01, 333-144911-01, 333-144912-01, 333-155716, 333-155726, 333-155791, 333-155792, 333-155793, 333-155797, 333-156303, 333-156304, 333-156308, 333-160605, 333-160606, 333-160607, 333-169558-01, 333-169559-01, 333-169560-01, and 333-169561-01 |
|---------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Delaware                                                       | 04-2461439                        |
|----------------------------------------------------------------|-----------------------------------|
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |

| One Sun Life Executive Park, Wellesley Hills, MA | 02481      |
|--------------------------------------------------|------------|
| (Address of principal executive offices)         | (Zip Code) |

| Large accelerated filer ¨          |                                          | Accelerated filer ¨         |
|-----------------------------------------|-----------------------------------------------|----------------------------------|
| Non-accelerated filer  þ | (Do not check if a smaller reporting company) | Smaller reporting company ¨ |

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----

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|   | Page |
|--------|------|

| PART I  - FINANCIAL INFORMATION |
|-------------------------------------------|
|                                      |   |   |
| Item 1.                                   | Financial Statements: |   |
|                                      |   |   |
|                                      | Condensed Consolidated Statements of Operations for the six-month periods ended June 30,     2011 and 2010 (Unaudited) | 3 |
|                                      |   |   |
|                                      | Condensed Consolidated Statements of Operations for the three-month periods ended June 30,     2011 and 2010 (Unaudited) | 4 |
|                                      |   |   |
|                                      | Condensed Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010     (Unaudited) | 5 |
|                                      |   |   |
|                                      | Condensed Consolidated Statements of Comprehensive Income for the six and three-month     periods ended June 30, 2011 and 2010 (Unaudited) | 6 |
|                                      |   |   |
|                                      | Condensed Consolidated Statements of Changes in Stockholder’s Equity for the six-month     periods ended June 30, 2011 and 2010 (Unaudited) | 7 |
|                                      |   |   |
|                                      | Condensed Consolidated Statements of Cash Flows for the six-month periods ended June 30,     2011 and 2010 (Unaudited) | 8 |
|                                      |   |   |
|                                      | Notes to Condensed Consolidated Financial Statements | 10 |
|                                      |   |   |
| Item 2.                                   | Management's Discussion and Analysis of Financial Position and Results of Operations | 73 |
|                                      |   |   |
| Item 3.                                   | Quantitative and Qualitative Disclosures About Market Risk | 84 |
|                                      |   |   |
| Item 4.                                   | Controls and Procedures | 84 |
|                                      |   |   |
|                                      |   |   |

| PART II – OTHER INFORMATION |
|-----------------------------------|
|                              |   |   |
| Item 1 .                          | Legal Proceedings | 84 |
|                              |   |   |
| Item 1A.                          | Risk Factors | 84 |
|                              |   |   |
| Item 2 .                          | Unregistered Sales of Equity Securities and Use of Proceeds | 84 |
|                              |   |   |
| Item 3.                           | Defaults Upon Senior Securities | 84 |
|                              |   |   |
| Item 4 .                          | (Removed and Reserved) | 84 |
|                              |   |   |
| Item 5 .                          | Other Information | 84 |
|                              |   |   |
| Item 6 .                          | Exhibits | 85 |

----

|                                                                                                                    | Unaudited  |
|-------------------------------------------------------------------------------------------------------------------------|-----------------|
|                                                                                                                    |  2011      |   |  2010 |
|                                                                                                                    |            |   |   |   |   |
| Revenues                                                                                                                |            |   |   |   |   |
|                                                                                                                    |            |   |   |   |   |
| Premiums and annuity considerations                                                                                     | $               | 70,547 |   | $ | 68,242  |
| Net investment income (1)                                                                                               |            | 536,730 |   |   | 851,447  |
| Net derivative loss (Note 5)                                                                                            |            | (107,999) |   |   | (567,165) |
| Net realized investment gains, excluding impairment   losses on available-for-sale securities            |            | 23, 074 |   |   | 16,339  |
| Other-than-temporary impairment losses (2)  (Note 5)                                                          |            | (71) |   |   | (885) |
| Fee and other income                                                                                                    |            | 305,173 |   |   | 236,228  |
|                                                                                                                    |            |   |   |   |   |
| Total revenues                                                                                                          |            | 827,454 |   |   | 604,206  |
|                                                                                                                    |            |   |   |   |   |
| Benefits and Expenses                                                                                                   |            |   |   |   |   |
|                                                                                                                    |            |   |   |   |   |
| Interest credited                                                                                                       |            | 184,155 |   |   | 176,811  |
| Interest expense                                                                                                        |            | 22,601 |   |   | 26,452  |
| Policyowner benefits                                                                                                    |            | 79,491 |   |   | 116,577  |
| Amortization of deferred policy acquisition costs and value of   business and customer renewals acquired |            | 237,465 |   |   | (253,232) |
| Other operating expenses                                                                                                |            | 176,194 |   |   | 159,793  |
|                                                                                                                    |            |   |   |   |   |
| Total benefits and expenses                                                                                             |            | 699,906 |   |   | 226,401  |
|                                                                                                                    |            |   |   |   |   |
| Income before income tax expense                                                                                        |            | 127,548 |   |   | 377,805  |
|                                                                                                                    |            |   |   |   |   |
| Income tax expense                                                                                                      |            | 35,749 |   |   | 121,354  |
|                                                                                                                    |            |   |   |   |   |
| Net income                                                                                                              | $               | 91,799 |   | $ | 256,451  |

| (1) | Net investment income includes an increase in market value of trading fixed maturity securities of $210.6 million and $449.9 million for the six-month periods ended June 30, 2011 and 2010, respectively. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The other-than-temporary impairment (“OTTI”) losses for the six-month periods ended June 30, 2011 and 2010 represent solely credit losses.  The Company incurred no non-credit OTTI losses during the six-month periods ended June 30, 2011 and 2010, and as such, no non-credit OTTI losses were recognized in other comprehensive income for the periods. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                    | Unaudited  |
|-------------------------------------------------------------------------------------------------------------------------|-----------------|
|                                                                                                                    |  2011      |   |  2010 |
|                                                                                                                    |            |   |   |   |   |
| Revenues                                                                                                                |            |   |   |   |   |
|                                                                                                                    |            |   |   |   |   |
| Premiums and annuity considerations                                                                                     | $               | 36,270 |   | $ | 33,178  |
| Net investment income (1)                                                                                               |            | 244,732 |   |   | 407,618  |
| Net derivative loss (Note 5)                                                                                            |            | (135,769) |   |   | (525,715) |
| Net realized investment gains, excluding impairment   losses on available-for-sale securities            |            | 18,991 |   |   | 11,174  |
| Other-than-temporary impairment losses (2)                                                                              |            | - |   |   | -  |
| Fee and other income                                                                                                    |            | 157,152 |   |   | 120,475  |
|                                                                                                                    |            |   |   |   |   |
| Total revenues                                                                                                          |            | 321,376 |   |   | 46,730  |
|                                                                                                                    |            |   |   |   |   |
| Benefits and Expenses                                                                                                   |            |   |   |   |   |
|                                                                                                                    |            |   |   |   |   |
| Interest credited                                                                                                       |            | 96,279 |   |   | 87,428  |
| Interest expense                                                                                                        |            | 11,509 |   |   | 9,355  |
| Policyowner benefits                                                                                                    |            | 34,524 |   |   | 81,974  |
| Amortization of deferred policy acquisition costs and value of   business and customer renewals acquired |            | (10,649) |   |   | (424,941) |
| Other operating expenses                                                                                                |            | 86,709 |   |   | 78,883  |
|                                                                                                                    |            |   |   |   |   |
| Total benefits and expenses                                                                                             |            | 218,372 |   |   | (167,301) |
|                                                                                                                    |            |   |   |   |   |
| Income before income tax expense                                                                                        |            | 103,004 |   |   | 214,031  |
|                                                                                                                    |            |   |   |   |   |
| Income tax expense                                                                                                      |            | 31,590 |   |   | 69,231  |
|                                                                                                                    |            |   |   |   |   |
| Net income                                                                                                              | $               | 71,414 |   | $ | 144,800  |

| (1) | Net investment income includes an increase in market value of trading fixed maturity securities of $89.2 million and $179.5 million for the three-month periods ended June 30, 2011 and 2010, respectively. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | No OTTI losses, credit or non-credit, were recorded for the three-month periods ended June 30, 2011 and 2010. |
|-----|---------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                              | Unaudited           |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------|
| ASSETS                                                                                                                                                            |  June 30, 2011 |   |  December 31, 2010 |
| Investments                                                                                                                                                       |                |   |   |   |   |
| Available-for-sale fixed maturity securities at fair value (amortized cost of $1,585,903   and $1,422,951 in 2011 and 2010, respectively) (Note 5) | $                   | 1,642,931 |   | $ | 1,495,923  |
| Trading fixed maturity securities at fair value (amortized cost of $10,766,411 and   $11,710,416 in 2011 and 2010, respectively) (Note 5)          |                | 10,728,334 |   |   | 11,467,118  |
| Mortgage loans (Note 5)                                                                                                                                           |                | 1,605,920 |   |   | 1,737,528  |
| Derivative instruments – receivable (Note 5)                                                                                                                |                | 220,844 |   |   | 198,064  |
| Limited partnerships                                                                                                                                              |                | 39,286 |   |   | 41,622  |
| Real estate                                                                                                                                                       |                | 222,763 |   |   | 214,665  |
| Policy loans                                                                                                                                                      |                | 607,346 |   |   | 717,408  |
| Other invested assets                                                                                                                                             |                | 41, 669 |   |   | 27,456  |
| Short-term investments                                                                                                                                            |                | 12,997 |   |   | 832,739  |
| Cash and cash equivalents                                                                                                                                         |                | 1,978,125 |   |   | 736,323  |
| Total investments and cash                                                                                                                                        |                | 17,100,215 |   |   | 17,468,846  |
|                                                                                                                                                              |                |   |   |   |   |
| Accrued investment income                                                                                                                                         |                | 182,963 |   |   | 188,786  |
| Deferred policy acquisition costs and sales inducement asset                                                                                                      |                | 1,595,829 |   |   | 1,682,559  |
| Value of business and customer renewals acquired                                                                                                                  |                | 102,954 |   |   | 134,985  |
| Net deferred tax asset (Note 9)                                                                                                                                   |                | 328,837 |   |   | 394,297  |
| Goodwill (Note 11)                                                                                                                                                |                | 7,299 |   |   | 7,299  |
| Receivable for investments sold                                                                                                                                   |                | 7,687 |   |   | 5,328  |
| Reinsurance receivable                                                                                                                                            |                | 2,235,769 |   |   | 2,347,086  |
| Other assets                                                                                                                                                      |                | 142,438 |   |   | 125,529  |
| Separate account assets                                                                                                                                           |                | 28,301,272 |   |   | 26,880,421  |
|                                                                                                                                                              |                |   |   |   |   |
| Total assets                                                                                                                                                      | $                   | 50,005,263 |   | $ | 49,235,136  |
|                                                                                                                                                              |                |   |   |   |   |
| LIABILITIES                                                                                                                                                       |                |   |   |   |   |
|                                                                                                                                                              |                |   |   |   |   |
| Contractholder deposit funds and other policy liabilities                                                                                                         | $                   | 14,027,877 |   | $ | 14,593,228  |
| Future contract and policy benefits                                                                                                                               |                | 831,897 |   |   | 849,514  |
| Payable for investments purchased                                                                                                                                 |                | 43,404 |   |   | 44,827  |
| Accrued expenses and taxes                                                                                                                                        |                | 46,023 |   |   | 52,628  |
| Debt payable to affiliates                                                                                                                                        |                | 783,000 |   |   | 783,000  |
| Reinsurance payable                                                                                                                                               |                | 2,131,514 |   |   | 2,231,835  |
| Derivative instruments – payable (Note 5)                                                                                                                   |                | 335,495 |   |   | 362,023  |
| Other liabilities                                                                                                                                                 |                | 269,726 |   |   | 285,056  |
| Separate account liabilities                                                                                                                                      |                | 28,301,272 |   |   | 26,880,421  |
|                                                                                                                                                              |                |   |   |   |   |
| Total liabilities                                                                                                                                                 |                | 46,770,208 |   |   | 46,082,532  |
|                                                                                                                                                              |                |   |   |   |   |
| Commitments and contingencies (Note 7)                                                                                                                            |                |   |   |   |   |
|                                                                                                                                                              |                |   |   |   |   |
| STOCKHOLDER’S EQUITY                                                                                                                                        |                |   |   |   |   |
|                                                                                                                                                              |                |   |   |   |   |
| Common stock, $1,000 par value – 10,000 shares authorized; 6,437 shares   issued and outstanding in 2011 and 2010                       | $                   | 6,437 |   | $ | 6,437  |
| Additional paid-in capital                                                                                                                                        |                | 3,929,192 |   |   | 3,928,246  |
| Accumulated other comprehensive income                                                                                                                            |                | 36,259 |   |   | 46,553  |
| Accumulated deficit                                                                                                                                               |                | (736,833) |   |   | (828,632) |
|                                                                                                                                                              |                |   |   |   |   |
| Total stockholder’s equity                                                                                                                                  |                | 3,235,055 |   |   | 3,152,604  |
|                                                                                                                                                              |                |   |   |   |   |
| Total liabilities and stockholder’s equity                                                                                                                  | $                   | 50,005,263 |   | $ | 49,235,136  |

----

|                                                                                                                | Unaudited |
|---------------------------------------------------------------------------------------------------------------------|-----------|
|                                                                                                                |      |  2011 |   |   |  2010 |
|                                                                                                                |      |   |   |   |   |
| Net income                                                                                                          | $         | 91,799  |   | $ |     256,451  |
|                                                                                                                |      |   |   |   |   |
| Other comprehensive (loss) income:                                                                                  |      |   |   |   |   |
|                                                                                                                |      |   |   |   |   |
| Change in unrealized holding gains on available-for-sale fixed   maturity securities, net of tax (1) |      | 6,757  |   |   | 26,986  |
| Reclassification adjustment for OTTI losses, net of tax (2)                                                         |      | 1,111  |   |   | 363  |
| Reclassification adjustments of net realized investment gains into   net income, net of tax (3) |      | (18,162) |   |   | (10,118) |
|                                                                                                                |      |   |   |   |   |
| Other comprehensive (loss) income                                                                                   |      | (10,294) |   |   | 17,231  |
|                                                                                                                |      |   |   |   |   |
| Comprehensive income                                                                                                | $         | 81,505  |   | $ | 273,682  |

|   | (1) | Net of tax expense of $(3.6) million and $(14.5) million for the six-month periods ended June 30, 2011 and 2010, respectively. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Represents an adjustment to OTTI losses due to the sale of other-than-temporarily impaired available-for-sale fixed maturity securities. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Net of tax benefit of $9.8 million and $5.4 million for the six-month periods ended June 30, 2011 and 2010, respectively. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                 | Unaudited |
|----------------------------------------------------------------------------------------------------------------------|-----------|
|                                                                                                                 |      |  2011 |   |   |  2010 |
|                                                                                                                 |      |   |   |   |   |
| Net income                                                                                                           | $         | 71,414  |   | $ | 144,800  |
|                                                                                                                 |      |   |   |   |   |
| Other comprehensive (loss) income:                                                                                   |      |   |   |   |   |
|                                                                                                                 |      |   |   |   |   |
| Change in unrealized holding losses on available-for-sale fixed   maturity securities, net of tax (4) |      | 11,462  |   |   | 18,818  |
| Reclassification adjustment for OTTI losses, net of tax (2)                                                          |      | 1,111  |   |   | 259  |
| Reclassification adjustments of net realized investment gains into   net income, net of tax (5)  |      | (14,245) |   |   | (7,735) |
|                                                                                                                 |      |   |   |   |   |
| Other comprehensive (loss) income                                                                                    |      | (1,672) |   |   | 11,342  |
|                                                                                                                 |      |   |   |   |   |
| Comprehensive income                                                                                                 | $         | 69,742  |   | $ | 156,142  |

|   | (4) | Net of tax expense of $6.2 million and $10.1 million for the three-month periods ended June 30, 2011 and 2010, respectively. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Net of tax benefit of $7.7 million and $4.2 million for the three-month periods ended June 30, 2011 and 2010, respectively. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------|

----

|                                                       | CommonStock |   | AdditionalPaid-InCapital |   | AccumulatedOtherComprehensive Income (1) |   | AccumulatedDeficit |         | TotalStockholder’sEquity |
|------------------------------------------------------------|-------------|--------|--------------------------|--------|-----------------------------------------------|--------|--------------------|--------------|--------------------------------|
|                                                       |        |   |                     |   |                                          |   |               |         |                           |   |   |   |   |   |
| Balance at December 31, 2009                               | $           | 6,437  |                     | $      | 3,527,677                                     |   | $                  | 35,244  |                           | $ | (962,906) |   | $ | 2,606,452 |
|                                                       |        |   |                     |   |                                          |   |               |         |                           |   |   |   |   |   |
| Net income                                                 |        | -      |                     |   | -                                             |   |               | -       |                           |   | 256,451  |   |   | 256,451 |
| Tax benefit from stock options                             |        | -      |                     |   | 198                                           |   |               | -       |                           |   | -  |   |   | 198 |
| Capital contribution from Parent   (Note 2) |        | -      |                     |   | 400,000                                       |   |               | -       |                           |   | -  |   |   | 400,000 |
| Other comprehensive income                                 |        | -      |                     |   | -                                             |   |               | 17,231  |                           |   | -  |   |   | 17,231 |
|                                                       |        |   |                     |   |                                          |   |               |         |                           |   |   |   |   |   |
| Balance at June 30, 2010                                   | $           | 6,437  |                     | $      | 3,927,875                                     |   | $                  | 52,475  |                           | $ | (706,455) |   | $ | 3,280,332 |
|                                                       |        |   |                     |   |                                          |   |               |         |                           |   |   |   |   |   |
|                                                       |        |   |                     |   |                                          |   |               |         |                           |   |   |   |   |   |
|                                                       |        |   |                     |   |                                          |   |               |         |                           |   |   |   |   |   |
| Balance at December 31, 2010                               | $           | 6,437  |                     | $      | 3,928,246                                     |   | $                  | 46,553  |                           | $ | (828,632) |   | $ | 3,152,604 |
|                                                       |        |   |                     |   |                                          |   |               |         |                           |   |   |   |   |   |
| Net income                                                 |        | -      |                     |   | -                                             |   |               | -       |                           |   | 91,799 |   |   | 91,799 |
| Tax benefit from stock options                             |        | -      |                     |   | 946                                           |   |               | -       |                           |   | -  |   |   | 946 |
| Other comprehensive loss                                   |        | -      |                     |   | -                                             |   |               | (10,294)     |                           |   | -  |   |   | (10,294) |
|                                                       |        |   |                     |   |                                          |   |               |         |                           |   |   |   |   |   |
| Balance at June 30, 2011                                   | $           | 6,437  |                     | $      | 3,929,192                                     |   | $                  | 36,259       |                           | $ | (736,833) |   | $ | 3,235,055 |

|   | (1)  As of June 30, 2011, the total amount of after tax non-credit OTTI losses recorded in the Company’s accumulated other comprehensive income was $6.9 million. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                       | Unaudited |
|--------------------------------------------------------------------------------------------------------------------------------------------|-----------|
|                                                                                                                                       | 2011      |   | 2010 |
|                                                                                                                                       |      |   |   |   |   |
| Cash Flows From Operating Activities:                                                                                                      |      |   |   |   |   |
| Net income                                                                                                                                 | $         | 91,799 |   | $ | 256,451 |
| Adjustments to reconcile net income to net cash provided by operating   activities:                                         |      |   |   |   |   |
| Net amortization of premiums on investments                                                                                                |      | 22,129 |   |   | 10,365 |
| Amortization of deferred policy acquisition costs and value of   business and customer renewals acquired                    |      | 237,465 |   |   | (253,232) |
| Depreciation and amortization                                                                                                              |      | 6,641 |   |   | 2,430 |
| Net losses on derivatives                                                                                                                  |      | 82,082 |   |   | 509,669  |
| Net realized gains and OTTI credit losses on available-for-   sale investments                                              |      | (23,003) |   |   | (15,454) |
| Net increase in fair value of trading investments                                                                                          |      | (210,600) |   |   | (449,854) |
| Net realized losses on trading investments                                                                                                 |      | 6,099 |   |   | 30,822 |
| Undistributed (gain) loss on private equity limited partnerships                                                                           |      | (3,994) |   |   | 492 |
| Interest credited to contractholder deposits                                                                                               |      | 184,155 |   |   | 176,811 |
| Deferred federal income taxes                                                                                                              |      | 71,003 |   |   | 143,756 |
| Changes in assets and liabilities:                                                                                                         |      |   |   |   |   |
| Additions to deferred policy acquisition costs, sales inducement    asset, value of business and customer renewals acquired |      | (111,805) |   |   |    (117,946) |
| Accrued investment income                                                                                                                  |      | 5,823 |   |   | 4,723 |
| Net change in reinsurance receivable/payable                                                                                               |      | 60,487 |   |   | 36,789 |
| Future contract and policy benefits                                                                                                        |      | (17,617) |   |   | 11,707 |
| Other, net                                                                                                                                 |      | (22,768) |   |   | 138,028 |
|                                                                                                                                       |      |   |   |   |   |
| Net cash provided by operating activities                                                                                                  |      | 377,896 |   |   | 485,557 |
|                                                                                                                                       |      |   |   |   |   |
| Cash Flows From Investing Activities:                                                                                                      |      |   |   |   |   |
| Sales, maturities and repayments of:                                                                                                       |      |   |   |   |   |
| Available-for-sale fixed maturity securities                                                                                               |      | 213,769 |   |   | 284,652 |
| Trading fixed maturity securities                                                                                                          |      | 2,067,550 |   |   | 1,488,444 |
| Mortgage loans                                                                                                                             |      | 115,551 |   |   | 92,420 |
| Other invested assets (1)                                                                                                                  |      | (71,630) |   |   | 152,900 |
| Purchase of:                                                                                                                               |      |   |   |   |   |
| Available-for-sale fixed maturity securities                                                                                               |      | (352,185) |   |   | (602,292) |
| Trading fixed maturity securities                                                                                                          |      | (1,157,234) |   |   | (2,472,109) |
| Mortgage loans                                                                                                                             |      | (1,495) |   |   | (28,551) |
| Real estate                                                                                                                                |      | (8,056) |   |   | (1,974) |
| Other invested assets (2)                                                                                                                  |      | (44,271) |   |   | (28,255) |
| Net change in policy loans                                                                                                                 |      | (11,276) |   |   | 8,756 |
| Net change in short-term investments                                                                                                       |      | 819,742 |   |   | 1,192,225 |
|                                                                                                                                       |      |   |   |   |   |
| Net cash provided by investing activities                                                                                                  | $         | 1,570,465 |   | $ | 86,216  |

----

|                                           | Unaudited  |
|------------------------------------------------|------------|
|                                           |  2011 |   |  2010 |
|                                           |       |   |   |   |   |
| Cash Flows From Financing Activities:          |       |   |   |   |   |
| Additions to contractholder deposit funds      | $          | 542,793  |   | $ | 647,901  |
| Withdrawals from contractholder deposit funds  |       | (1,230,954) |   |   | (1,336,122) |
| Capital contribution from Parent               |       | -  |   |   | 400,000  |
| Other, net                                     |       | (18,398) |   |   | (12,761) |
|                                           |       |   |   |   |   |
| Net cash used in financing activities          |       | (706,559) |   |   | (300,982) |
|                                           |       |   |   |   |   |
| Net change in cash and cash equivalents        |       | 1,241,802  |   |   | 270,791  |
|                                           |       |   |   |   |   |
| Cash and cash equivalents, beginning of period |       | 736,323  |   |   | 1,804,208  |
|                                           |       |   |   |   |   |
|                                           |       |   |   |   |   |
| Cash and cash equivalents, end of period       | $          | 1,978,125  |   | $ | 2,074,999  |

----

----

|                     | June 30, 2011 |   |   | December 31, 2010       |
|--------------------------|---------------|--------|--------|-------------------------------------------------------|
|                     |          |   |   |                                                  |   |
| Assets                   | $             | 36,786 |   | $                                                     | 36,324  |
| Liabilities              |          | 22,563 |   |                                                  | 27,341  |
| Maximum exposure to loss |          | 37,400 |   |                                                  | 37,400  |

----

| USE OF ESTIMATES |
|------------------|

| SIGNIFICANT ACCOUNTING POLICIES |
|---------------------------------|

| For a description of the Company’s significant accounting policies, refer to Note 1 to the consolidated financial statements included in Part II, Item 8 of the Company’s annual report on Form 10-K for the year ended December 31, 2010, which should be read in conjunction with the accompanying condensed consolidated financial statements. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | 1. | The borrower is experiencing financial difficulties, and |
|--------|----|----------------------------------------------------------|

|   | 2. | The lender has granted a concession to the borrower. |
|--------|----|------------------------------------------------------|

|   | · | A borrower’s inability to access funds at a market rate for a new loan with similar risk characteristics as the modified loan indicates that the modification was executed at a below-market rate and therefore may indicate that a concession was granted. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A temporary or permanent increase in the contractual interest rate as a result of restructuring does not preclude the restructuring from being considered a concession because the rate may still be below market. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A restructuring that results in an insignificant delay in contractual cash flow is not considered to be a concession. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

|                                                         | Six-month period ended June 30, 2011                          |   |                                                           |
|--------------------------------------------------------------|---------------------------------------------------------------|--------|----------------------------------------------------------------|
|                                                         |                                                          |   |                                                           |   |   |   |   |   |   |
|                                                         | Wealth                                                        |   | Individual                                                     |   | Group |   |   |   |   |
|                                                         | Management                                                    |   | Protection                                                     |   | Protection |   | Corporate |   | Totals |
| Total revenues                                               | $       714,899            |   | $        36,976   |   | $           62,876 |   | $       12,703 |   | $       827,454 |
| Total benefits and expenses                                  | 589,961                                                       |   | 44,696                                                    |   | 58,425 |   | 6,824 |   | 699,906 |
| Income (loss) before income  tax expense (benefit) | 124,938                                                       |   | (7,720)                                                        |   | 4,451 |   | 5,879 |   | 127,548 |
| Net income (loss)                                            | $         90,677 |   | $         (4,901) |   | $             2,909 |   | $         3,114 |   | $         91,799 |
|                                                         | Six-month period ended June 30, 2010               |   |                                                                                     |
|--------------------------------------------------------------|----------------------------------------------------|--------|------------------------------------------------------------------------------------------|
|                                                         |                                               |   |                                                                                     |   |   |   |   |   |   |
|                                                         | Wealth                                             |   | Individual                                                                               |   | Group |   |   |   |   |
|                                                         | Management                                         |   | Protection                                                                               |   | Protection |   | Corporate |   | Totals |
| Total revenues                                               | $       545,477 |   | $        27,671                             |   | $          64,576 |   | $     (33,518) |   | $       604,206 |
| Total benefits and expenses                                  | 126,187                                            |   |  26,308                                                                        |   | 61,992 |   |   11,914  |   |       226,401 |
| Income (loss) before income tax  expense (benefit) |  419,290                                      |   | 1,363                                                                               |   | 2,584 |   | (45,432) |   |   377,805 |
| Net income (loss)                                            | $       282,658 |   | $             971  |   | $            1,682 |   | $     (28,860) |   | $       256,451 |

|                                                         | Three-month period ended June 30, 2011                        |   |                                                                |
|--------------------------------------------------------------|---------------------------------------------------------------|--------|---------------------------------------------------------------------|
|                                                         |                                                          |   |                                                                |   |   |   |   |   |   |
|                                                         | Wealth                                                        |   | Individual                                                          |   | Group |   |   |   |   |
|                                                         | Management                                                    |   | Protection                                                          |   | Protection |   | Corporate |   | Totals |
| Total revenues                                               | $       255,011            |   | $          17,470 |   | $          31,569 |   | $       17,326 |   | $       321,376 |
| Total benefits and expenses                                  |  165,433                                                 |   |     22,803                                      |   | 28,007 |   | 2,129 |   | 218,372 |
| Income (loss) before income  tax expense (benefit) |  89,578                                                  |   |      (5,333)                               |   | 3,562 |   |  15,197 |   | 103,004 |
| Net income (loss)                                            | $         62,714 |   | $         (3,412)      |   | $            2,326 |   | $         9,786 |   | $         71,414 |

|                                                         | Three-month period ended June 30, 2010                                   |   |                                                                                           |
|--------------------------------------------------------------|--------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|
|                                                         |                                                                     |   |                                                                                           |   |   |   |   |   |   |
|                                                         | Wealth                                                                   |   | Individual                                                                                     |   | Group |   |   |   |   |
|                                                         | Management                                                               |   | Protection                                                                                     |   | Protection |   | Corporate |   | Totals |
| Total revenues                                               | $          3,352  |   | $         12,445                             |   | $          32,315  |   | $       (1,382) |   | $        46,730  |
| Total benefits and expenses                                  | (211,278)                                                                |   | 12,093                                                                                    |   | 30,844  |   | 1,040  |   | (167,301) |
| Income (loss) before income  tax expense (benefit) | 214,630                                                             |   | 352                                                                                       |   | 1,471  |   | (2,422) |   | 214,031  |
| Net income (loss)                                            | $      144,523                        |   | $              260  |   | $               959  |   | $          (942) |   | $      144,800  |

----

|   | · | Unadjusted quoted prices for identical assets or liabilities in an active market. |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | Quoted prices in markets that are not active or significant inputs that are observable either directly or indirectly. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

|   | a) | Quoted prices for similar assets or liabilities in active markets, |
|--------|----|--------------------------------------------------------------------|

|   | b) | Quoted prices for identical or similar assets or liabilities in non-active markets, |
|--------|----|-------------------------------------------------------------------------------------|

|   | c) | Inputs other than quoted market prices that are observable, and |
|--------|----|-----------------------------------------------------------------|

|   | d) | Inputs that are derived principally from or corroborated by observable market data through correlation or other means. |
|--------|----|------------------------------------------------------------------------------------------------------------------------|

|   | · | Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.  They reflect management's assumptions about what a market participant would use in pricing the asset or liability. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                     |   | Level 1 |       | Level 2 |   | Level 3    |   | Total  |
|----------------------------------------------------------|--------|---------|------------|---------|--------|------------|--------|--------|
| Assets                                                   |   |    |       |    |   |       |   |   |   |   |   |   |
| Available-for-sale fixed maturity securities:            |   |    |       |    |   |       |   |   |   |   |   |   |
| Asset-backed securities                                  |   | $       | -          |    | $      | 205        |   | $      | 3 |   | $ | 208 |
| Residential mortgage-backed securities                   |   |    | -          |    |   | 30,658     |   |   | - |   |   | 30,658 |
| Commercial mortgage-backed securities                    |   |    | -          |    |   | 12,542     |   |   | 2,137 |   |   | 14,679 |
| Foreign government & agency securities               |   |    | -          |    |   | -          |   |   | - |   |   | - |
| U.S. states and political subdivisions securities        |   |    | -          |    |   | 220        |   |   | - |   |   | 220 |
| U.S. treasury and agency securities                      |   |    | 488,949    |    |   | -          |   |   | - |   |   | 488,949 |
| Corporate securities                                     |   |    | -          |    |   | 1,100,755  |   |   | 7,462 |   |   | 1,108,217 |
| Total available-for-sale fixed maturity securities       |   |    | 488,949    |    |   | 1,144,380  |   |   | 9,602 |   |   | 1,642,931 |
|                                                     |   |    |       |    |   |       |   |   |   |   |   |   |
| Trading fixed maturity securities:                       |   |    |       |    |   |       |   |   |   |   |   |   |
| Asset-backed securities                                  |   |    | -          |    |   | 302,947    |   |   | 75,535 |   |   | 378,482 |
| Residential mortgage-backed securities                   |   |    | -          |    |   | 666,785    |   |   | 157,814 |   |   | 824,599 |
| Commercial mortgage-backed securities                    |   |    | -          |    |   | 726,745    |   |   | 67,031 |   |   | 793,776 |
| Foreign government & agency securities               |   |    | -          |    |   | 109,482    |   |   | 13,003 |   |   | 122,485 |
| U.S. states and political subdivisions securities        |   |    | -          |    |   | 627        |   |   | - |   |   | 627 |
| U.S. treasury and agency securities                      |   |    | 320,658    |    |   | 1,631      |   |   | 963 |   |   | 323,252 |
| Corporate securities                                     |   |    | -          |    |   | 8,178,459  |   |   | 106,654 |   |   | 8,285,113 |
| Total trading fixed maturity securities                  |   |    | 320,658    |    |   | 9,986,676  |   |   | 421,000 |   |   | 10,728,334 |
|                                                     |   |    |       |    |   |       |   |   |   |   |   |   |
| Derivative instruments - receivable:                     |   |    |       |    |   |       |   |   |   |   |   |   |
| Interest rate contracts                                  |   |    | -          |    |   | 100,122    |   |   | - |   |   | 100,122 |
| Foreign currency contracts                               |   |    | -          |    |   | 36,988     |   |   | - |   |   | 36,988 |
| Equity contracts                                         |   |    | 28,751     |    |   | 35,811     |   |   | 18,035 |   |   | 82,597 |
| Futures contracts                                        |   |    | 1,137      |    |   | -          |   |   | - |   |   | 1,137 |
| Total derivative instruments - receivable                |   |    | 29,888     |    |   | 172,921    |   |   | 18,035 |   |   | 220,844 |
|                                                     |   |    |       |    |   |       |   |   |   |   |   |   |
| Other invested assets                                    |   |    | 3,276      |    |   | 28,236     |   |   | 2,133 |   |   | 33,645 |
| Short-term investments                                   |   |    | 12,997     |    |   | -          |   |   | - |   |   | 12,997 |
| Cash and cash equivalents                                |   |    | 1,978,125  |    |   | -          |   |   | - |   |   | 1,978,125 |
| Total investments and cash                               |   |    | 2,833,893  |    |   | 11,332,213 |   |   | 450,770 |   |   | 14,616,876 |
|                                                     |   |    |       |    |   |       |   |   |   |   |   |   |
| Separate account assets:                                 |   |    |       |    |   |       |   |   |   |   |   |   |
| Mutual fund investments                                  |   |    | 23,506,664 |    |   | -          |   |   | - |   |   | 23,506,664 |
| Equity investments                                       |   |    | 187,826    |    |   | 26,925     |   |   | 59 |   |   | 214,810 |
| Fixed income investments                                 |   |    | 290,954    |    |   | 6,008,621  |   |   | 97,452 |   |   | 6,397,027 |
| Alternative investments                                  |   |    | 9,754      |    |   | 75,916     |   |   | 366,109 |   |   | 451,779 |
| Other investments                                        |   |    | 1,894      |    |   | -          |   |   | - |   |   | 1,894 |
| Total separate account assets (1) (2)                    |   |    | 23,997,092 |    |   | 6,111,462  |   |   | 463,620 |   |   | 30,572,174 |
|                                                     |   |    |       |    |   |       |   |   |   |   |   |   |
| Total assets measured at fair value on a recurring basis |   | $       | 26,830,985 |    | $      | 17,443,675 |   | $      | 914,390 |   | $ | 45,189,050 |

| (1) | Pursuant to the conditions set forth in FASB ASC Topic 944, “Financial Services - Insurance,” the value of separate account liabilities is set to equal the fair value of the separate account assets. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Excludes $2,270.9 million primarily related to investment purchases payable, net of investment sales receivable, that are not subject to FASB ASC Topic 820, “Fair Value Measurement.” |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                          |   | Level 1 |   | Level 2 |   | Level 3 |   | Total  |
|---------------------------------------------------------------|--------|---------|--------|---------|--------|---------|--------|--------|
| Liabilities                                                   |   |    |   |    |   |    |   |   |   |   |   |   |
| Other policy liabilities:                                     |   |    |   |    |   |    |   |   |   |   |   |   |
| Guaranteed minimum withdrawal benefit liability (1)           |   | $       | -      |    | $      | -       |   | $      | (7,645) |   | $ | (7,645) |
| Guaranteed minimum accumulation benefit liability (1)         |   |    | -      |    |   | -       |   |   | (2,554) |   |   | (2,554) |
| Derivatives embedded in reinsurance contracts (1)             |   |    | -      |    |   | 78,075  |   |   | 18,035 |   |   | 96,110 |
| Fixed index annuities (1)                                     |   |    | -      |    |   | -       |   |   | 132,804 |   |   | 132,804 |
| Total other policy liabilities                                |   |    | -      |    |   | 78,075  |   |   | 140,640 |   |   | 218,715 |
|                                                          |   |    |   |    |   |    |   |   |   |   |   |   |
| Derivative instruments – payable:                       |   |    |   |    |   |    |   |   |   |   |   |   |
| Interest rate contracts                                       |   |    | -      |    |   | 282,615 |   |   | - |   |   | 282,615 |
| Foreign currency contracts                                    |   |    | -      |    |   | 6,767   |   |   | - |   |   | 6,767 |
| Credit contracts                                              |   |    | -      |    |   | -       |   |   | 22,563 |   |   | 22,563 |
| Futures contracts                                             |   |    | 23,550 |    |   | -       |   |   | - |   |   | 23,550 |
| Total derivative instruments – payable                  |   |    | 23,550 |    |   | 289,382 |   |   | 22,563 |   |   | 335,495 |
|                                                          |   |    |   |    |   |    |   |   |   |   |   |   |
| Other liabilities:                                            |   |    |   |    |   |    |   |   |   |   |   |   |
| Bank overdrafts                                               |   |    | 41,883 |    |   | -       |   |   | - |   |   | 41,883 |
|                                                          |   |    |   |    |   |    |   |   |   |   |   |   |
| Total liabilities measured at fair value on a recurring basis |   | $       | 65,433 |    | $      | 367,457 |   | $      | 163,203 |   | $ | 596,093 |

| (1) | The balances are included within the contractholder deposits funds and other policy liabilities in the Company’s unaudited condensed consolidated balance sheet.  At June 30, 2011, the net balances of guaranteed minimum withdrawal and accumulated benefits were in an asset position. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                     |   | Level 1 |       | Level 2 |   | Level 3    |   | Total  |
|----------------------------------------------------------|--------|---------|------------|---------|--------|------------|--------|--------|
| Assets                                                   |   |    |       |    |   |       |   |   |   |   |   |   |
| Available-for-sale fixed maturity securities:            |   |    |       |    |   |       |   |   |   |   |   |   |
| Asset-backed securities                                  |   | $       | -          |    | $      | 704        |   | $      | 11 |   | $ | 715 |
| Residential mortgage-backed securities                   |   |    | -          |    |   | 34,614     |   |   | - |   |   | 34,614 |
| Commercial mortgage-backed securities                    |   |    | -          |    |   | 13,003     |   |   | 2,047 |   |   | 15,050 |
| Foreign government & agency securities               |   |    | -          |    |   | 563        |   |   | - |   |   | 563 |
| U.S. states and political subdivisions securities        |   |    | -          |    |   | 214        |   |   | - |   |   | 214 |
| U.S. treasury and agency securities                      |   |    | 375,233    |    |   | -          |   |   | - |   |   | 375,233 |
| Corporate securities                                     |   |    | -          |    |   | 1,068,399  |   |   | 1,135 |   |   | 1,069,534 |
| Total available-for-sale fixed maturity securities       |   |    | 375,233    |    |   | 1,117,497  |   |   | 3,193 |   |   | 1,495,923 |
|                                                     |   |    |       |    |   |       |   |   |   |   |   |   |
| Trading fixed maturity securities:                       |   |    |       |    |   |       |   |   |   |   |   |   |
| Asset-backed securities                                  |   |    | -          |    |   | 321,129    |   |   | 90,851 |   |   | 411,980 |
| Residential mortgage-backed securities                   |   |    | -          |    |   | 834,074    |   |   | 88,719 |   |   | 922,793 |
| Commercial mortgage-backed securities                    |   |    | -          |    |   | 737,024    |   |   | 82,171 |   |   | 819,195 |
| Foreign government & agency securities               |   |    | -          |    |   | 116,986    |   |   | 13,790 |   |   | 130,776 |
| U.S. states and political subdivisions securities        |   |    | -          |    |   | 613        |   |   | - |   |   | 613 |
| U.S. treasury and agency securities                      |   |    | 737,936    |    |   | 8,582      |   |   | 1,101 |   |   | 747,619 |
| Corporate securities                                     |   |    | -          |    |   | 8,301,586  |   |   | 132,556 |   |   | 8,434,142 |
| Total trading fixed maturity securities                  |   |    | 737,936    |    |   | 10,319,994 |   |   | 409,188 |   |   | 11,467,118 |
|                                                     |   |    |       |    |   |       |   |   |   |   |   |   |
| Derivative instruments - receivable:                     |   |    |       |    |   |       |   |   |   |   |   |   |
| Interest rate contracts                                  |   |    | -          |    |   | 97,060     |   |   | - |   |   | 97,060 |
| Foreign currency contracts                               |   |    | -          |    |   | 32,504     |   |   | - |   |   | 32,504 |
| Equity contracts                                         |   |    | 14,873     |    |   | 30,739     |   |   | 13,785 |   |   | 59,397 |
| Futures contracts                                        |   |    | 9,103      |    |   | -          |   |   | - |   |   | 9,103 |
| Total derivative instruments - receivable                |   |    | 23,976     |    |   | 160,303    |   |   | 13,785 |   |   | 198,064 |
|                                                     |   |    |       |    |   |       |   |   |   |   |   |   |
| Other invested assets                                    |   |    | 2,890      |    |   | 11,120     |   |   | 8,343 |   |   | 22,353 |
| Short-term investments                                   |   |    | 832,739    |    |   | -          |   |   | - |   |   | 832,739 |
| Cash and cash equivalents                                |   |    | 736,323    |    |   | -          |   |   | - |   |   | 736,323 |
| Total investments and cash                               |   |    | 2,709,097  |    |   | 11,608,914 |   |   | 434,509 |   |   | 14,752,520 |
|                                                     |   |    |       |    |   |       |   |   |   |   |   |   |
| Separate account assets:                                 |   |    |       |    |   |       |   |   |   |   |   |   |
| Mutual fund investments                                  |   |    | 21,892,209 |    |   | 30,517     |   |   | - |   |   | 21,922,726 |
| Equity investments                                       |   |    | 188,216    |    |   | 277        |   |   | - |   |   | 188,493 |
| Fixed income investments                                 |   |    | 317,713    |    |   | 5,812,900  |   |   | 56,323 |   |   | 6,186,936 |
| Alternative investments                                  |   |    | 24,094     |    |   | 78,164     |   |   | 293,254 |   |   | 395,512 |
| Other investments                                        |   |    | 900        |    |   | -          |   |   | - |   |   | 900 |
| Total separate account assets (1) (2)                    |   |    | 22,423,132 |    |   | 5,921,858  |   |   | 349,577 |   |   | 28,694,567 |
|                                                     |   |    |       |    |   |       |   |   |   |   |   |   |
| Total assets measured at fair value on a recurring basis |   | $       | 25,132,229 |    | $      | 17,530,772 |   | $      | 784,086 |   | $ | 43,447,087 |

|   | (1) Pursuant to the conditions set forth in FASB ASC Topic 944, the value of separate account liabilities is set to equal the fair value of the separate account assets. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2)Excludes $1,814.1 million, primarily related to investment purchases payable, net of investment sales receivable, that are not subject to FASB ASC Topic 820. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                          |   | Level 1 |   | Level 2 |   | Level 3 |   | Total  |
|---------------------------------------------------------------|--------|---------|--------|---------|--------|---------|--------|--------|
| Liabilities                                                   |   |    |   |    |   |    |   |   |   |   |   |   |
| Other policy liabilities:                                     |   |    |   |    |   |    |   |   |   |   |   |   |
| Guaranteed minimum withdrawal benefit liability               |   | $       | -      |    | $      | -       |   | $      | 2,245 |   | $ | 2,245 |
| Guaranteed minimum accumulation benefit liability             |   |    | -      |    |   | -       |   |   | 49 |   |   | 49 |
| Derivatives embedded in reinsurance contracts                 |   |    | -      |    |   | 41,272  |   |   | - |   |   | 41,272 |
| Fixed index annuities                                         |   |    | -      |    |   | -       |   |   | 131,608 |   |   | 131,608 |
| Total other policy liabilities                                |   |    | -      |    |   | 41,272  |   |   | 133,902 |   |   | 175,174 |
|                                                          |   |    |   |    |   |    |   |   |   |   |   |   |
| Derivative instruments – payable:                       |   |    |   |    |   |    |   |   |   |   |   |   |
| Interest rate contracts                                       |   |    | -      |    |   | 329,214 |   |   | - |   |   | 329,214 |
| Foreign currency contracts                                    |   |    | -      |    |   | 3,878   |   |   | - |   |   | 3,878 |
| Credit contracts                                              |   |    | -      |    |   | -       |   |   | 27,341 |   |   | 27,341 |
| Futures contracts                                             |   |    | 1,590  |    |   | -       |   |   | - |   |   | 1,590 |
| Total derivative instruments – payable                  |   |    | 1,590  |    |   | 333,092 |   |   | 27,341 |   |   | 362,023 |
|                                                          |   |    |   |    |   |    |   |   |   |   |   |   |
| Other liabilities:                                            |   |    |   |    |   |    |   |   |   |   |   |   |
| Bank overdrafts                                               |   |    | 61,227 |    |   | -       |   |   | - |   |   | 61,227 |
|                                                          |   |    |   |    |   |    |   |   |   |   |   |   |
| Total liabilities measured at fair value on a recurring basis |   | $       | 62,817 |    | $      | 374,364 |   | $      | 161,243 |   | $ | 598,424 |

----

----

----

| Assets                                                                               | Beginningbalance                                    | Total realized andunrealized gains (losses)                       |  Purchases                                                                  | Sales                                                                      | Issuances                                                                        | Settlements                                  | Transfersintolevel 3                                                             | Transfersout of level 3                                                    |  Endingbalance                                                                                | Change in totalgains (losses)included inearningsrelating toinstrumentsstill held at thereporting date |
|--------------------------------------------------------------------------------------|-----------------------------------------------------|-------------------------------------------------------------------|----------------------------------------------------------------------------------|----------------------------------------------------------------------------|----------------------------------------------------------------------------------|----------------------------------------------|----------------------------------------------------------------------------------|----------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|
| Included inearnings                                                                  | Included inOCI                                      |
|                                                                                 |                                                |                                                              |                                                                             |                                                                       |                                                                             |                                         |                                                                             |                                                                       |                                                                                               |                                                                                                  |   |
| Available-for-sale fixed maturity securities:                                        |                                                |                                                              |                                                                             |                                                                       |                                                                             |                                         |                                                                             |                                                                       |                                                                                               |                                                                                                  |   |
| Asset-backed                                                                         | $        11 | $          (12) | $             4 | $            - | $             - | $      -       | $             - | $            - | $                - | $         3                                              | $                      - |
| Residential mortgage-backed                                                          |  -                                             |                                                              |                                                                             |                                                                       |                                                                             |                                         |                                                                             |                                                                       |                                                                                               |                                                                                                  | - |
| Commercial mortgage-backed                                                           |  2,047                                         | (199)                                                        | 289                                                                              |                                                                       |                                                                             |                                         |                                                                             |                                                                       |                                                                                               |  2,137                                                                                           | - |
| Foreign government & agency                                                      | -                                                   |  -                                                           | -                                                                           | -                                                                     |  -                                                                          | -                                            | -                                                                           | -                                                                     | -                                                                                             | -                                                                                                | - |
| U.S. states & political subdivisions                                             | -                                                   |  -                                                           | -                                                                           | -                                                                     | -                                                                                |  -                                      | -                                                                           | -                                                                     | -                                                                                             | -                                                                                                | - |
| U.S. treasury and agency                                                             | -                                                   | -                                                                 | -                                                                           | -                                                                     |  -                                                                          |  -                                      | -                                                                           | -                                                                     | -                                                                                             |  -                                                                                               | - |
| Corporate                                                                            |  1,135                                         | 11                                                                | 248                                                                              | 6,102                                                                 |  -                                                                          |  -                                      | (34)                                                                        | -                                                                     | -                                                                                             | 7,462                                                                                                 | - |
| Total available-for-sale fixed maturity securities                                   |  3,193                                         |  (200)                                                       |  541                                                                        | 6,102                                                                 | -                                                                           |  -                                      | (34)                                                                        |  -                                                                    | -                                                                                             | 9,602                                                                                                 | - |
|                                                                                 |                                                |                                                              |                                                                             |                                                                       |                                                                             |                                         |                                                                             |                                                                       |                                                                                               |                                                                                                  |   |
| Trading fixed maturity securities:                                                   |                                                |                                                              |                                                                             |                                                                       |                                                                             |                                         |                                                                             |                                                                       |                                                                                               |                                                                                                  |   |
| Asset-backed                                                                         |  90,851                                        | 9,464                                                             |  -                                                                          | -                                                                          | -                                                                                | -                                            | (3,198)                                                                          | 5,192                                                                      | (26,774)                                                                                           | 75,535                                                                                                | 9,072 |
| Residential mortgage-backed                                                          | 88,719                                              | 12,472                                                            |  -                                                                          | -                                                                          | -                                                                                | -                                            | (20,315)                                                                         | 133,509                                                                    | (56,571)                                                                                           | 157,814                                                                                               | 14,918 |
| Commercial mortgage-backed                                                           | 82,171                                              | (967)                                                             |  -                                                                          | -                                                                          | -                                                                                | -                                            | (19,127)                                                                    | 4,954                                                                      | -                                                                                                  | 67,031                                                                                                | (7) |
| Foreign government & agency                                                      | 13,790                                              | (787)                                                             | -                                                                                | -                                                                          | -                                                                                | -                                            | -                                                                                | -                                                                          | -                                                                                                  | 13,003                                                                                                | 45 |
| U.S. states & political subdivisions                                             |  -                                             | -                                                            | -                                                                                | -                                                                          | -                                                                                | -                                            | -                                                                                | -                                                                          | -                                                                                                  | -                                                                                                |  - |
| U.S. treasury and agency                                                             | 1,101                                               | (22)                                                              |  -                                                                          | -                                                                          |  -                                                                          |  -                                      | (116)                                                                            |  -                                                                    |  -                                                                                            | 963                                                                                                   | (7) |
| Corporate                                                                            | 132,556                                             | 7,567                                                             | -                                                                                | 6,932                                                                      | (3,404)                                                                          | -                                            | (4,578)                                                                          | 3,202                                                                      | (35,621)                                                                                           | 106,654                                                                                               | 7,019 |
| Total trading fixed maturity securities                                              |  409,188                                       | 27,727                                                            | -                                                                                | 6,932                                                                      | (3,404)                                                                          | -                                            | (47,334)                                                                         | 146,857                                                                    | (118,966)                                                                                          | 421,000                                                                                               | 31,040 |
|                                                                                 |                                                |                                                              |                                                                             |                                                                       |                                                                             |                                         |                                                                             |                                                                       |                                                                                               |                                                                                                  |   |
| Derivative instruments – receivable:                                           |                                                |                                                              |                                                                             |                                                                       |                                                                             |                                         |                                                                             |                                                                       |                                                                                               |                                                                                                  |   |
| Interest rate contracts                                                              | -                                                   | -                                                            | -                                                                           | -                                                                     | -                                                                           | -                                       | -                                                                                | -                                                                          | -                                                                                                  | -                                                                                                     | - |
| Foreign currency contracts                                                           | -                                                   | -                                                            | -                                                                           | -                                                                     | -                                                                           | -                                       |  -                                                                          |  -                                                                    |  -                                                                                            |  -                                                                                               |  - |
| Equity contracts                                                                     |  13,785                                        | 5,330                                                             | -                                                                           | 3,124                                                                      | -                                                                           | -                                       | (4,204)                                                                          |  -                                                                    |  -                                                                                            | 18,035                                                                                                | 5,330 |
| Futures contracts                                                                    | -                                                   | -                                                            | -                                                                           | -                                                                     | -                                                                           | -                                       | -                                                                           |  -                                                                    |  -                                                                                            |  -                                                                                               |  - |
| Total derivative instruments – receivable                                      |  13,785                                        | 5,330                                                             | -                                                                           | 3,124                                                                      | -                                                                           | -                                       | (4,204)                                                                          |  -                                                                    |  -                                                                                            | 18,035                                                                                                | 5,330 |
|                                                                                 |                                                |                                                              |                                                                             |                                                                       |                                                                             |                                         |                                                                             |                                                                       |                                                                                               |                                                                                                  |   |
| Other invested assets                                                                |  8,343                                         | 440                                                          | -                                                                           | 1,000                                                                      | -                                                                           | -                                       | -                                                                           |  -                                                                    | (7,650)                                                                                            | 2,133                                                                                                 | 440 |
| Short-term investments                                                               | -                                                   | -                                                            | -                                                                           |  -                                                                    | -                                                                           | -                                       | -                                                                           |  -                                                                    |  -                                                                                            |  -                                                                                               |  - |
| Cash and cash equivalents                                                            | -                                                   | -                                                            | -                                                                           | -                                                                     | -                                                                           | -                                       | -                                                                           |  -                                                                    |  -                                                                                            |  -                                                                                               |  - |
| Total investments and cash                                                           | 434,509                                             | 33,297                                                            | 541                                                                              | 17,158                                                                     | (3,404)                                                                          | -                                       | (51,572)                                                                         | 146,857                                                                    | (126,616)                                                                                          | 450,770                                                                                          | 36,810 |
|                                                                                 |                                                |                                                              |                                                                             |                                                                       |                                                                             |                                         |                                                                             |                                                                       |                                                                                               |                                                                                                  |   |
| Separate account assets:                                                             |                                                |                                                              |                                                                             |                                                                       |                                                                             |                                         |                                                                             |                                                                       |                                                                                               |                                                                                                  |   |
| Mutual fund investments                                                              | -                                                   | -                                                                 | -                                                                                | -                                                                          | -                                                                                | -                                            |  -                                                                          | -                                                                          | -                                                                                                  |  -                                                                                               | - |
| Equity investments                                                                   | -                                                   |  -                                                           |  -                                                                          |  -                                                                    |  -                                                                          |  -                                      |  -                                                                          | 59                                                                    |  -                                                                                            | 59                                                                                               |  - |
| Fixed income investments                                                             |  56,323                                        | (393)                                                        |  -                                                                          | 142,395                                                                    | (91,583)                                                                         |  -                                      | (10,216)                                                                         | 32,618                                                                | (31,692)                                                                                           | 97,452                                                                                           | (762)  |
| Alternative investments                                                              | 293,254                                             | 18,067                                                       |  -                                                                          | 148,821                                                                    | (92,047)                                                                         |  -                                      | (5,186)                                                                          | 3,200                                                                      |  -                                                                                            | 366,109                                                                                               | 16,706  |
| Other investments                                                                    | -                                                   |  -                                                           |  -                                                                          |  -                                                                    |  -                                                                          |  -                                      |  -                                                                          |  -                                                                    |  -                                                                                            |  -                                                                                               |  - |
| Total separate account assets (1)                                                    | 349,577                                             | 17,674                                                       |  -                                                                          | 291,216                                                                    | (183,630)                                                                        |  -                                      | (15,402)                                                                         | 35,877                                                                     | (31,692)                                                                                           | 463,620                                                                                               | 15,944 |
|                                                                                 |                                                |                                                              |                                                                             |                                                                       |                                                                             |                                         |                                                                             |                                                                       |                                                                                               |                                                                                                  |   |
| Total assets measured at fair value    on a recurring basis | $784,086                                            | $     50,971                             | $          541                 | $ 308,374                                                                  | $ (187,034)                                                                      | $       - | $(66,974)                                                                        | $182, 734                                                                  | $  (158,308)                                                                             | $914,390                                                                                              | $         52,754 |

|   | (1) The gains and losses included in net income for separate account assets are offset by an equal amount for separate account liabilities which results in a net zero impact on net income for the Company. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Liabilities                                                                                | Beginningbalance               | Total realized and unrealized (gains) losses | Purchases                                                                                    | Sales                                                                | Issuances                                                | Settlements | Transfersintolevel 3                                                       | Transfersout oflevel 3                                   | Endingbalance                                                  | Change intotal (gains)losses includedin earningsrelating toinstrumentsstill held at thereporting date |
|--------------------------------------------------------------------------------------------|--------------------------------|----------------------------------------------|----------------------------------------------------------------------------------------------|----------------------------------------------------------------------|----------------------------------------------------------|-------------|----------------------------------------------------------------------------|----------------------------------------------------------|----------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|
| Included inearnings                                                                        | Included inOCI                 |
|                                                                                       |                           |                                         |                                                                                         |                                                                 |                                                     |        |                                                                       |                                                     |                                                           |                                                                                                  |   |
| Other policy liabilities:                                                                  |                           |                                         |                                                                                         |                                                                 |                                                     |        |                                                                       |                                                     |                                                           |                                                                                                  |   |
| Guaranteed minimum withdrawal   benefit liability (1)                       | $    2,245 | $ (115,180)                                  | $               - | $           - | $         - | $105,290    | $            - | $         - | $          - | $(7,645)                                                                                              | $(118,199) |
| Guaranteed minimum accumulation   benefit liability (1)                     |  49                       | (14,131)                                |  -                                                                                      |                                                                 |                                                     | 11,528      |  -                                                                    |  -                                                  | -                                                              | (2,554)                                                                                               | (14,893) |
| Derivatives embedded in reinsurance   contracts                             | -                              | (1,344)                                 |  -                                                                                      |  3,124                                                          |                                                     | 20,459      | (4,204)                                                                    |  -                                                  |  -                                                        | 18,035                                                                                                | (1,344) |
| Fixed index annuities                                                                      | 131,608                        | (19,438)                                |  -                                                                                      |                                                                 |                                                     | 20,634      |  -                                                                    |  -                                                  |  -                                                        | 132,804                                                                                               | 16,427 |
| Total other policy liabilities                                                             | 133,902                        | (150,093)                               | -                                                                                            | 3,124                                                                |                                                     | 157,911     | (4,204)                                                                    |  -                                                  |  -                                                        | 140,640                                                                                               | (118,009) |
|   Derivative instruments – payable:                                             |                           |                                         |                                                                                         |                                                                 |                                                     |        |                                                                       |                                                     |                                                           |                                                                                                  |   |
| Interest rate contracts                                                                    | -                              | -                                            |  -                                                                                      | -                                                                    | -                                                   |  -     |  -                                                                    |  -                                                  |  -                                                        | -                                                                                                     | - |
| Foreign currency contracts                                                                 | -                              | -                                            | -                                                                                            | -                                                                    | -                                                   | -           |  -                                                                    |  -                                                  |  -                                                        | -                                                                                                     | - |
| Credit contracts                                                                           |  27,341                   | (4,778)                                      | -                                                                                            |  -                                                              | -                                                   | -           |  -                                                                    |  -                                                  |  -                                                        | 22,563                                                                                                | (4,778) |
| Futures contracts                                                                          | -                              | -                                            | -                                                                                            | -                                                                    | -                                                   | -           |  -                                                                    |  -                                                  |  -                                                        | -                                                                                                     | - |
| Total derivative instruments – payable                                          |  27,341                   | (4,778)                                      | -                                                                                            | -                                                                    | -                                                   | -           |  -                                                                    |  -                                                  |  -                                                        | 22,563                                                                                                | (4,778) |
|                                                                                       |                           |                                         |                                                                                         |                                                                 |                                                     |        |                                                                       |                                                     |                                                           |                                                                                                  |   |
|                                                                                       |                           |                                         |                                                                                         |                                                                 |                                                     |        |                                                                       |                                                     |                                                           |                                                                                                  |   |
| Other liabilities:                                                                         |                           |                                         |                                                                                         |                                                                 |                                                     |        |                                                                       |                                                     |                                                           |                                                                                                  |   |
| Bank overdrafts                                                                            | -                              | -                                            | -                                                                                            | -                                                                    | -                                                        | -      |  -                                                                    |  -                                                  |  -                                                        | -                                                                                                     | - |
| Total liabilities measured at fair value     on a recurring basis | $161,243                       | $ (154,871)                                  | $               - | $    3,124                                       | $         - | $157,911    | $  (4,204)                                                       | $         - | $          - | $  163,203                                                                                  | $        (122,787) |

| (1) | The balances are included within the contractholder deposits funds and other policy liabilities in the Company’s unaudited condensed consolidated balance sheet.  At June 30, 2011, the net balances of guaranteed minimum withdrawal and accumulated benefits were in an asset position. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                      |   | Total gains(losses) included inearnings |   | Change inunrealized gains(losses) related toassets and liabilities still held at the reporting date |
|---------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|-----------------------------------------------------------------------------------------------------|
| Net investment income                                                                                                     | $      | 28,167                                  | $      | 31,480                                                                                              |
| Net derivative income                                                                                                     |   | 160,201                                 |   | 128,117                                                                                             |
| Net realized investment losses, excluding impairment     losses on available-for-sale securities |   | (200)                                   |   | -                                                                                                   |
| Net gains                                                                                                                 | $      | 188,168                                 | $      | 159,597                                                                                             |

----

| Assets                                                                                     | Beginningbalance                                                | Total realized andunrealized gains (losses) | Purchases,issuances, andsettlements (net)                                                                      | Transfers inand/or (out)oflevel 3                                                                                                            | Endingbalance                                                                                                  | Change in unrealizedgains (losses) included inearnings relating toinstruments still held atthe reporting date |
|--------------------------------------------------------------------------------------------|-----------------------------------------------------------------|--------------------------------------------------|----------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|
| Includedinearnings                                                                         | Included inothercomprehensiveincome                             |
| Available-for-sale fixed maturity securities:                                              |                                                            |                                             |                                                                                                           |                                                                                                                                         |                                                                                                           |                                                                                                          |   |
| Asset-backed securities                                                                    | $          37 | $       (22)  | $                 7  | $                      -  | $                 -  | $                22      | $                              -  |
| Residential mortgage-backed securities                                                     | -                                                               | -                                           | -                                                                                                         | -                                                                                                                                       | -                                                                                                         | -                                                                                                        | -  |
| Commercial mortgage-backed   securities                                     | 1,930                                                           | (307)                                            | (252)                                                                                                          | -                                                                                                                                       | -                                                                                                         | 1,371                                                                                                    | -  |
| Foreign government & agency   securities                                | -                                                               | -                                           | -                                                                                                         | -                                                                                                                                       | -                                                                                                         | -                                                                                                        | -  |
| U.S. states and political subdivisions   securities                         | -                                                               | -                                           | -                                                                                                         | -                                                                                                                                       | -                                                                                                         | -                                                                                                        | -  |
| U.S. treasury and agency securities                                                        | -                                                               | -                                           | -                                                                                                         | -                                                                                                                                       | -                                                                                                         | -                                                                                                        | -  |
| Corporate securities                                                                       | 7,936                                                           | (12)                                             | (5)                                                                                                            | (57)                                                                                                                                         | (7,184)                                                                                                        | 678                                                                                                      | -  |
| Total available-for-sale fixed maturity     securities            | 9,903                                                           | (341)                                            | (250)                                                                                                          | (57)                                                                                                                                    | (7,184)                                                                                                        | 2,071                                                                                                    | -  |
|                                                                                       |                                                            |                                             |                                                                                                           |                                                                                                                                         |                                                                                                           |                                                                                                          |   |
| Trading fixed maturity securities:                                                         |                                                            |                                             |                                                                                                           |                                                                                                                                         |                                                                                                           |                                                                                                          |   |
| Asset-backed securities                                                                    | 111,650                                                         | (8,524)                                          | -                                                                                                         | (18,975)                                                                                                                                     | (36,483)                                                                                                       | 47,668                                                                                                   | 7,159  |
| Residential mortgage-backed securities                                                     | 154,551                                                         | 2,505                                       | -                                                                                                         | (6,416)                                                                                                                                      | (52,317)                                                                                                       | 98,323                                                                                                   | 5,066  |
| Commercial mortgage-backed   securities                                     | 14,084                                                          | 798                                         | -                                                                                                         | 48,607                                                                                                                                  | (696)                                                                                                          | 62,793                                                                                                   | 1,670  |
| Foreign government & agency   securities                                | 15,323                                                          | (685)                                       | -                                                                                                         | -                                                                                                                                       | -                                                                                                         | 14,638                                                                                                   | 103  |
| U.S. states and political subdivisions   securities                         | -                                                               | -                                           | -                                                                                                         | -                                                                                                                                       | -                                                                                                         | -                                                                                                        | -  |
| U.S. treasury and agency securities                                                        | -                                                               | -                                           | -                                                                                                         | -                                                                                                                                       | -                                                                                                         | -                                                                                                        | -  |
| Corporate securities                                                                       | 107,886                                                         | (6,196)                                          | -                                                                                                         | 2,187                                                                                                                                   | (55,326)                                                                                                       | 48,551                                                                                                   | 1,635  |
| Total trading fixed maturity securities                                                    | 403,494                                                         | (12,102)                                         | -                                                                                                         | 25,403                                                                                                                                  | (144,822)                                                                                                      | 271,973                                                                                                  | 15,633  |
|                                                                                       |                                                            |                                             |                                                                                                           |                                                                                                                                         |                                                                                                           |                                                                                                          |   |
| Derivative instruments – receivable:                                                 |                                                            |                                             |                                                                                                           |                                                                                                                                         |                                                                                                           |                                                                                                          |   |
| Interest rate contracts                                                                    | -                                                               | -                                           | -                                                                                                         | -                                                                                                                                       | -                                                                                                         | -                                                                                                        | -  |
| Foreign currency contracts                                                                 | -                                                               | -                                           | -                                                                                                         | -                                                                                                                                       | -                                                                                                         | -                                                                                                        | -  |
| Equity contracts                                                                           | 8,821                                                           | (3,894)                                          | -                                                                                                         | (3,204)                                                                                                                                      | -                                                                                                         | 1,723                                                                                                    | (3,894) |
| Futures contracts                                                                          | -                                                               | -                                           | -                                                                                                         | -                                                                                                                                       | -                                                                                                         | -                                                                                                        | -  |
| Total derivative instruments– receivable                                             | 8,821                                                           | (3,894)                                          | -                                                                                                         | (3,204)                                                                                                                                      | -                                                                                                         | 1,723                                                                                                    | (3,894) |
|                                                                                       |                                                            |                                             |                                                                                                           |                                                                                                                                         |                                                                                                           |                                                                                                          |   |
| Other invested assets                                                                      | -                                                               | 128                                         | -                                                                                                         | 1,486                                                                                                                                   | -                                                                                                         | 1,614                                                                                                    | 127  |
| Short-term investments                                                                     | -                                                               | -                                           | -                                                                                                         | -                                                                                                                                       | -                                                                                                         | -                                                                                                        | -  |
| Cash and cash equivalents                                                                  | -                                                               | -                                           | -                                                                                                         | -                                                                                                                                       | -                                                                                                         | -                                                                                                        | -  |
| Total investments and cash                                                                 | 422,218                                                         | (16,209)                                         | (250)                                                                                                          | 23,628                                                                                                                                  | (152,006)                                                                                                      | 277,381                                                                                                  | 11,866  |
|                                                                                       |                                                            |                                             |                                                                                                           |                                                                                                                                         |                                                                                                           |                                                                                                          |   |
| Separate account assets:                                                                   |                                                            |                                             |                                                                                                           |                                                                                                                                         |                                                                                                           |                                                                                                          |   |
| Mutual fund investments                                                                    | -                                                               | -                                           | -                                                                                                         | -                                                                                                                                       | -                                                                                                         | -                                                                                                        | -  |
| Equity investments                                                                         | 7                                                               | 11                                          | -                                                                                                         | 179                                                                                                                                     | -                                                                                                         | 197                                                                                                      | 10  |
| Fixed income investments                                                                   | 276,530                                                         | 4,140                                       | -                                                                                                         | (78,387)                                                                                                                                     | (109,320)                                                                                                      | 92,963                                                                                                   | 1,313  |
| Alternative investments                                                                    | 267,196                                                         | (10,652)                                         | -                                                                                                         | 16,182                                                                                                                                  | (2,969)                                                                                                        | 269,757                                                                                                  | (10,741) |
| Other investments                                                                          | 4,108                                                           | -                                           | -                                                                                                         | -                                                                                                                                       | (4,108)                                                                                                        | -                                                                                                        | -  |
| Total separate account assets (1)                                                          | 547,841                                                         | (6,501)                                          | -                                                                                                         | (62,026)                                                                                                                                     | (116,397)                                                                                                      | 362,917                                                                                                  | (9,418) |
|                                                                                       |                                                            |                                             |                                                                                                           |                                                                                                                                         |                                                                                                           |                                                                                                          |   |
| Total assets measured at fair value on     a recurring basis | $   970,059                                      | $(22,710)                                        | $               (250)               | $            (38,398)                                                            | $     (268,403)                                                                       | $          640,298                                          | $                             2,448 |

|   (1) | The gains and losses included in net income for separate account assets are offset by an equal amount for separate account liabilities which results in a net zero impact on net income for the Company. |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Liabilities                                                                                | Beginningbalance                    | Total realized and unrealized(gains) losses | Purchases,issuances, andsettlements (net)                                                                      | Transfers inand/or (out)oflevel 3                                                                       | Endingbalance                                                                                            | Change in unrealized(gains) losses includedinearnings relating toinstruments still held atthe reporting date |
|--------------------------------------------------------------------------------------------|-------------------------------------|---------------------------------------------|----------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|
| Includedinearnings                                                                         | Included inothercomprehensiveincome |
|                                                                                       |                                |                                        |                                                                                                           |                                                                                                    |                                                                                                     |                                                                                                         |   |
| Other policy liabilities:                                                                  |                                |                                        |                                                                                                           |                                                                                                    |                                                                                                     |                                                                                                         |   |
| Guaranteed minimum withdrawal   benefit liability (1)                       | $168,786                       | $385,563                          | $                 -  | $            63,680               | $                -  | $      618,029                                                            | $                      387,678   |
| Guaranteed minimum accumulation    benefit liability (1)               | 81,669                         | 138,727                           | -                                                                                                         | 11,515                                                                                        | -                                                                                                   | 231,911                                                                                                 | 139,536   |
| Derivatives embedded in reinsurance    contracts                       | -                              | -                                 | -                                                                                                         | -                                                                                             | -                                                                                                   | -                                                                                                       | -   |
| Fixed index annuities                                                                      | 140,966                        | (27,126)                               | -                                                                                                         | 4,447                                                                                         | -                                                                                                   | 118,287                                                                                                 | (7,166)  |
| Total other policy liabilities                                                             | 391,421                        | 497,164                           | -                                                                                                         | 79,642                                                                                        | -                                                                                                   | 968,227                                                                                                 | 520,048   |
|                                                                                       |                                |                                        |                                                                                                           |                                                                                                    |                                                                                                     |                                                                                                         |   |
| Derivative instruments – payable:                                                    |                                |                                        |                                                                                                           |                                                                                                    |                                                                                                     |                                                                                                         |   |
| Interest rate contracts                                                                    | -                              | -                                 | -                                                                                                         | -                                                                                                  | -                                                                                                   | -                                                                                                       | -   |
| Foreign currency contracts                                                                 | -                              | -                                 | -                                                                                                         | -                                                                                                  | -                                                                                                   | -                                                                                                       | -   |
| Credit contracts                                                                           | 34,349                         | (623)                                  | -                                                                                                         | -                                                                                                  | -                                                                                                   | 33,726                                                                                                  | (623)  |
| Futures contracts                                                                          | -                              | -                                 | -                                                                                                         | -                                                                                                  | -                                                                                                   | -                                                                                                       | -   |
| Total derivative instruments – payable                                               | 34,349                         | (623)                                  | -                                                                                                         | -                                                                                                  | -                                                                                                   | 33,726                                                                                                  | (623)  |
|                                                                                       |                                |                                        |                                                                                                           |                                                                                                    |                                                                                                     |                                                                                                         |   |
|                                                                                       |                                |                                        |                                                                                                           |                                                                                                    |                                                                                                     |                                                                                                         |   |
| Other liabilities:                                                                         |                                |                                        |                                                                                                           |                                                                                                    |                                                                                                     |                                                                                                         |   |
| Bank overdrafts                                                                            | -                              | -                                 | -                                                                                                         | -                                                                                                  | -                                                                                                   | -                                                                                                       | -   |
|                                                                                       |                                |                                        |                                                                                                           |                                                                                                    |                                                                                                     |                                                                                                         |   |
| Total liabilities measured at fair value on     a recurring basis | $425,770                            | $496,541                                    | $                  - | $                79,642 | $                 - | $     1,001,953                                                                     | $                        519,425 |

| (1) | The balances are included within the contractholder deposits funds and other policy liabilities in the Company’s unaudited condensed consolidated balance sheet. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                          |   | Total lossesincluded inearnings |   | Change inunrealized gains(losses) related toassets andliabilities still heldat the reportingdate |
|---------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|--------------------------------------------------------------------------------------------------|
| Net investment (loss) income                                                                                  | $      | (11,974)                        | $      | 15,760                                                                                      |
| Net derivative loss                                                                                           |   | (500,435)                       |   | (523,319)                                                                                        |
| Net realized investment losses, excluding   impairment losses on available-for-sale securities |   | (341)                           |   | -                                                                                           |
| Net losses                                                                                                    | $      | (512,750)                       | $      | (507,559)                                                                                        |

----

| Assets                                                                                     | Beginningbalance                                               | Total realized and unrealized gains (losses)                     |  Purchases                                                                                    | Sales                                                                      | Issuances                                                                                                | Settlements                                              | Transfersintolevel 3                                                                                                       | Transfers outof level 3                                                    |  Endingbalance                                                                                                  | Change inunrealizedgains (losses)included inearningsrelating toinstrumentsstill held atthe reportingdate |
|--------------------------------------------------------------------------------------------|----------------------------------------------------------------|------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|----------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|
| Included in earnings                                                                  | Included inOCI                                                 |
| Available-for-sale fixed maturity     securities:                 |                                                           |                                                             |                                                                                               |                                                                       |                                                                                                     |                                                     |                                                                                                                       |                                                                       |                                                                                                                 |                                                                                                     |   |
| Asset-backed                                                                               | $          7 | $          (5) | $                1 | $            - | $               -   | $         - | $                  -   | $            - | $                   - | $           3                                     | $                -  |
| Residential mortgage-backed                                                                | -                                                              | -                                                           | -                                                                                                  | -                                                                          |  -                                                                                                  |  -                                                  |   -                                                                                                              | -                                                                          |       -                                                                                | -                                                                                                        | -  |
| Commercial mortgage-backed                                                                 | 2,089                                                          |   (66)                                                 | 114                                                                                                |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    |     -                                                                                            | 2,137                                                                                                    | -  |
| Foreign government & agency                                                            | -                                                              |  -                                                     | -                                                                                                  |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    |  -                                                                                                              | -                                                                                                        | -  |
| U.S. states & political subdivisions                                                   | -                                                              |  -                                                     | -                                                                                                  |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    |  -                                                                                                              | -                                                                                                        | -  |
| U.S. treasury and agency                                                                   | -                                                              |  -                                                     | -                                                                                                  |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    |  -                                                                                                              | -                                                                                                        | -  |
| Corporate                                                                                  | 7,386                                                          | 6                                                           | 70                                                                                                 | -                                                                          |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    |  -                                                                                                              | 7,462                                                                                                    | -  |
| Total available-for-sale fixed    maturity securities                  |  9,482                                                    | (65)                                                             |   185                                                                                    | -                                                                          |  -                                                                                                  |  -                                                  | -                                                                                                                          |  -                                                                    |  -                                                                                                              | 9,602                                                                                                    | -  |
|                                                                                       |                                                           |                                                             |                                                                                               |                                                                       |                                                                                                     |                                                     |                                                                                                                       |                                                                       |                                                                                                                 |                                                                                                     |   |
| Trading fixed maturity securities:                                                         |                                                           |                                                             |                                                                                               |                                                                       |                                                                                                     |                                                     |                                                                                                                       |                                                                       |                                                                                                                 |                                                                                                     |   |
| Asset-backed                                                                               | 90,706                                                         | 582                                                         | -                                                                                                  |  -                                                                    |  -                                                                                                  |  -                                                  | (1,272)                                                                                                                    | 1,696                                                                      | (16,177)                                                                                                             | 75,535                                                                                                   | 500  |
| Residential mortgage-backed                                                                | 145,035                                                        | 3,223                                                       |  -                                                                                            |  -                                                                    |  -                                                                                                  |  -                                                  | (7,356)                                                                                                                    | 78,250                                                                     | (61,338)                                                                                                             | 157,814                                                                                                  | 3,778  |
| Commercial mortgage-backed                                                                 | 81,994                                                         | (1,710)                                                     |  -                                                                                            |  -                                                                    |  -                                                                                                  |  -                                                  |  (18,119)                                                                                                             | 4,866                                                                      |  -                                                                                                              | 67,031                                                                                                   | (1,144) |
| Foreign government & agency                                                            | 13,165                                                         | (162)                                                            |  -                                                                                            |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    |  -                                                                                                              | 13,003                                                                                                   | 257  |
| U.S. states & political subdivisions                                                   | -                                                              | -                                                           |  -                                                                                            |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    |  -                                                                                                              | -                                                                                                        |  -  |
| U.S. treasury and agency                                                                   | 1,096                                                          |  (17)                                                       |  -                                                                                            |  -                                                                    |  -                                                                                                  |  -                                                  | (116)                                                                                                                      |  -                                                                    |  -                                                                                                              | 963                                                                                                      | (10)  |
| Corporate                                                                                  | 106,537                                                        | 568                                                         |  -                                                                                            | -                                                                          | -                                                                                                        |  -                                                  | (451)                                                                                                                      | -                                                                          | -                                                                                                                    | 106,654                                                                                                  | 588  |
| Total trading fixed maturity securities                                                    | 438,533                                                        | 2,484                                                       |  -                                                                                            | -                                                                          | -                                                                                                        |  -                                                  | (27,314)                                                                                                                   |  84,812                                                               |     (77,515)                                                                                     | 421,000                                                                                                  | 3,969  |
|                                                                                       |                                                           |                                                             |                                                                                               |                                                                       |                                                                                                     |                                                     |                                                                                                                       |                                                                       |                                                                                                                 |                                                                                                     |   |
| Derivative instruments – receivable:                                                 |                                                           |                                                             |                                                                                               |                                                                       |                                                                                                     |                                                     |                                                                                                                       |                                                                       |                                                                                                                 |                                                                                                     |   |
| Interest rate contracts                                                                    | -                                                              |  -                                                          | -                                                                                                  |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    |  -                                                                                                              | -                                                                                                        |  -  |
| Foreign currency contracts                                                                 | -                                                              |  -                                                          | -                                                                                                  |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    |  -                                                                                                              | -                                                                                                        |  -  |
| Equity contracts                                                                           | 20,459                                                         | 350                                                         | -                                                                                                  | 1,586                                                                 |  -                                                                                                  |  -                                                  | (4,360)                                                                                                                    |  -                                                                    |  -                                                                                                              | 18,035                                                                                                   | 350 |
| Futures contracts                                                                          | -                                                              |  -                                                          | -                                                                                                  |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    |  -                                                                                                              | -                                                                                                        |  -  |
| Total derivative instruments –      receivable         | 20,459                                                         | 350                                                              | -                                                                                                  | 1.586                                                                      |  -                                                                                                  |  -                                                  | (4,360)                                                                                                                    |  -                                                                    |  -                                                                                                              | 18,035                                                                                                   | 350 |
|                                                                                       |                                                           |                                                             |                                                                                               |                                                                       |                                                                                                     |                                                     |                                                                                                                       |                                                                       |                                                                                                                 |                                                                                                     |   |
| Other invested assets                                                                      | 10,156                                                         | (193)                                                            |    -                                                                                |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    | (7,830)                                                                                                              | 2,133                                                                                                    | (193) |
| Short-term investments                                                                     | -                                                              |  -                                                          | -                                                                                                  |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    |  -                                                                                                              | -                                                                                                        |  -  |
| Cash and cash equivalents                                                                  | -                                                              |  -                                                          | -                                                                                                  |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    |  -                                                                                                              | -                                                                                                        |  -  |
| Total investments and cash                                                                 | 478,630                                                        |  2,576                                                      |  185                                                                                          |  1,586                                                                | -                                                                                                        |  -                                                  | (31,674)                                                                                                                   | 84,812                                                                     | (85,345)                                                                                                             |  450,770                                                                                            |  4,126 |
|                                                                                       |                                                           |                                                             |                                                                                               |                                                                       |                                                                                                     |                                                     |                                                                                                                       |                                                                       |                                                                                                                 |                                                                                                     |   |
| Separate account assets:                                                                   |                                                           |                                                             |                                                                                               |                                                                       |                                                                                                     |                                                     |                                                                                                                       |                                                                       |                                                                                                                 |                                                                                                     |   |
| Mutual fund investments                                                                    | -                                                              |  -                                                          | -                                                                                                  |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    |  -                                                                                                              | -                                                                                                        |  -  |
| Equity investments                                                                         |  64                                                       |  -                                                          | -                                                                                                  |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |                                                                       |  (5)                                                                                                            | 59                                                                                                       |  -  |
| Fixed income investments                                                                   | 66,935                                                         | (396)                                                            | -                                                                                                  | 78,155                                                                     | (24,369)                                                                                                 |  -                                                  | (5,411)                                                                                                                    | 7,188                                                                      | (24,650)                                                                                                             | 97,452                                                                                                   | (632) |
| Alternative investments                                                                    | 348,076                                                        | 4,863                                                       | -                                                                                                  | 104,227                                                                    | (88,337)                                                                                                 |  -                                                  | (2,720)                                                                                                                    | -                                                                          |  -                                                                                                              | 366,109                                                                                                  | 4,164  |
| Other investments                                                                          | -                                                              |  -                                                          | -                                                                                                  |  -                                                                    |  -                                                                                                  |  -                                                  |  -                                                                                                                    |  -                                                                    |  -                                                                                                              | -                                                                                                        |  -  |
| Total separate account assets (1)                                                          | 415,075                                                        | 4,467                                                       | -                                                                                                  | 182,382                                                                    | (112,706)                                                                                                |  -                                                  | (8,131)                                                                                                                    | 7,188                                                                      | (24,655)                                                                                                             | 463,620                                                                                                  | 3,532  |
|                                                                                       |                                                           |                                                             |                                                                                               |                                                                       |                                                                                                     |                                                     |                                                                                                                       |                                                                       |                                                                                                                 |                                                                                                     |   |
| Total assets measured at fair value     on a recurring basis | $893,705                                                       | $     7,043                             | $          185                                   | $183,968                                                                   |  $(112,706)                                                                                         | $       -        | $   (39,805)                                                                                                | $   92,000                                                  |  $    (110,000)                                                                             | $914,390                                                                                                 | $          7,658 |

|      | (1)     The realized/unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities which results in a net zero impact on net income for the Company. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Liabilities                                                            | Beginningbalance                      | Total realized and unrealized (gains) losses | Purchases                                                                                    | Sales                                                                | Issuances                                                                                                 | Settlements           | Transfers intolevel 3                                                | Transfersout oflevel 3                                   | Endingbalance                                                  | Change inunrealized(gains) lossesincluded inearningsrelating toinstrumentsstill held at thereporting date |
|------------------------------------------------------------------------|---------------------------------------|----------------------------------------------|----------------------------------------------------------------------------------------------|----------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|-----------------------|----------------------------------------------------------------------|----------------------------------------------------------|----------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|
| Included inearnings                                                    | Included inOCI                        |
|                                                                   |                                  |                                         |                                                                                         |                                                                 |                                                                                                      |                  |                                                                 |                                                     |                                                           |                                                                                                      |   |
| Other policy liabilities:                                              |                                  |                                         |                                                                                         |                                                                 |                                                                                                      |                  |                                                                 |                                                     |                                                           |                                                                                                      |   |
| Guaranteed minimum withdrawal   benefit liability (1)   | $(122,682)                            | $ 60,797                                     | $               - | $           - |  $      -          - |  $ 54,240   | $           - | $         - | $          - | $ (7,645)                                                                                                 |        $   59,234 |
| Guaranteed minimum accumulation   benefit liability (1) | (34,560)                              | 26,377                                       | -                                                                                            |  -                                                              |  -                                                                                                   | 5,629                 |  -                                                              |  -                                                  |  -                                                        | (2,554)                                                                                                   |             26,010 |
| Derivatives embedded in reinsurance   contracts         | 20,459                           |  350                                    | -                                                                                            | 1,587                                                                |  -                                                                                                   | -                     | (4,361)                                                              |  -                                                  |  -                                                        | 18,035                                                                                                    |  350  |
| Fixed index annuities                                                  | 139,577                          | (24,962)                                     | -                                                                                            |  -                                                              |  -                                                                                                   |  -               | 18,189                                                               |  -                                                  |  -                                                        | 132,804                                                                                                   | 593  |
| Total other policy liabilities                                         | 2,794                            | 62,562                                       | -                                                                                            |  1,587                                                          |  -                                                                                                   |  59,869          |  13,828                                                         |  -                                                  |  -                                                        | 140,640                                                                                                   | 86,187 |
|                                                                   |                                  |                                         |                                                                                         |                                                                 |                                                                                                      |                  |                                                                 |                                                     |                                                           |                                                                                                      |   |   |
| Derivative instruments – payable:                                |                                  |                                         |                                                                                         |                                                                 |                                                                                                      |                  |                                                                 |                                                     |                                                           |                                                                                                      |   |   |
| Interest rate contracts                                                | -                                |  -                                      | -                                                                                            |  -                                                              |  -                                                                                                   |  -               |  -                                                              |  -                                                  |  -                                                        | -                                                                                                         |  -  |
| Foreign currency contracts                                             | -                                |  -                                      | -                                                                                            |  -                                                              |  -                                                                                                   |  -               |  -                                                              |  -                                                  |  -                                                        | -                                                                                                         |  -  |
| Credit contracts                                                       | 23,846                           | (1,283)                                      | -                                                                                            |  -                                                              |  -                                                                                                   |  -               |  -                                                              |  -                                                  |  -                                                        | 22,563                                                                                               | (1,283) |
| Futures contracts                                                      | -                                |  -                                      | -                                                                                            |  -                                                              |  -                                                                                                   |  -               |  -                                                              |  -                                                  |  -                                                        | -                                                                                                         |  -  |
| Total derivative instruments – payable                      | 23,846                           | (1,283)                                      | -                                                                                            |  -                                                              |  -                                                                                                   |  -               |  -                                                              |  -                                                  |  -                                                        |        22,563                                                          | (1,283) |
|                                                                   |                                  |                                         |                                                                                         |                                                                 |                                                                                                      |                  |                                                                 |                                                     |                                                           |                                                                                                      |   |
|                                                                   |                                  |                                         |                                                                                         |                                                                 |                                                                                                      |                  |                                                                 |                                                     |                                                           |                                                                                                      |   |
| Other liabilities:                                                     |                                  |                                         |                                                                                         |                                                                 |                                                                                                      |                  |                                                                 |                                                     |                                                           |                                                                                                      |   |
| Bank overdrafts                                                        | -                                |  -                                      | -                                                                                            |  -                                                              |  -                                                                                                   |  -               |  -                                                              |  -                                                  |  -                                                        | -                                                                                                         |  -  |
| Total liabilities measured at fair value on a recurring basis          | $    26,640  | $    61,279              | $               - | $  1,587                                                   | $         -                                                  | $59,869          | $  13,828                                             | $         - | $          - |     $163,203                                                                          | $        84,904 |

| (1) | The balances are included within the contractholder deposits funds and other policy liabilities in the Company’s unaudited condensed consolidated balance sheets.  At June 30, 2011, the net balances of guaranteed minimum withdrawal and accumulation benefits were in an asset position. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                          |   | Total gains(losses) included inearnings |   | Change inunrealized gains(losses) related toassets and liabilities still held at thereporting date |
|---------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|----------------------------------------------------------------------------------------------------|
| Net investment income                                                                                         | $      | 2,291                                   | $      | 3,776                                                                                              |
| Net derivative loss                                                                                           |   | (60,929)                                |   | (84,554)                                                                                           |
| Net realized investment losses, excluding impairment   losses on available-for-sale securities |   | (65)                                    |   | -                                                                                                  |
| Net losses                                                                                                    | $      | (58,703)                                | $      | (80,778)                                                                                           |

----

| Assets                                                                               | Beginningbalance                                                | Total realized and unrealizedgains (losses)                 | Purchases,issuances, andsettlements (net)                                                                                  | Transfers inand/or (out) oflevel 3                                                                                                           | Endingbalance                                                                                                              | Change in unrealized gains(losses) included inearningsrelating to instruments stillheld at the reporting date |
|--------------------------------------------------------------------------------------|-----------------------------------------------------------------|-------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|
| Included inearnings                                                                  | Included inothercomprehensiveincome                             |
|                                                                                 |                                                            |                                                        |                                                                                                                       |                                                                                                                                         |                                                                                                                       |                                                                                                          |   |
| Available-for-sale fixed maturity securities:                                        |                                                            |                                                        |                                                                                                                       |                                                                                                                                         |                                                                                                                       |                                                                                                          |   |
| Asset-backed securities                                                              | $          29 | $         (10) | $                    3 | $                       - | $                    - | $                 22     | $                                          - |
| Residential mortgage-backed securities                                               | -                                                               | -                                                           | -                                                                                                                          | -                                                                                                                                            | -                                                                                                                          | -                                                                                                             |  - |
| Commercial mortgage-backed   securities                               | 1,135                                                           | (64)                                                        | 300                                                                                                                        | -                                                                                                                                            | -                                                                                                                          | 1,371                                                                                                         | - |
| Foreign government & agency   securities                          | -                                                               | -                                                           | -                                                                                                                          | -                                                                                                                                            | -                                                                                                                          | -                                                                                                             | - |
| U.S. states and political subdivisions   securities                   | -                                                               | -                                                           | -                                                                                                                          | -                                                                                                                                            | -                                                                                                                          | -                                                                                                             | - |
| U.S. treasury and agency securities                                                  | -                                                               | -                                                           | -                                                                                                                          | -                                                                                                                                            | -                                                                                                                          | -                                                                                                             | - |
| Corporate securities                                                                 | 939                                                             | (6)                                                         | (1)                                                                                                                        | -                                                                                                                                            | (254)                                                                                                                      | 678                                                                                                           | - |
| Total available-for-sale fixed maturity   securities                  |  2,103                                                     | (80)                                                        | 302                                                                                                                        | -                                                                                                                                            | (254)                                                                                                                      | 2,071                                                                                                         | - |
|                                                                                 |                                                            |                                                        |                                                                                                                       |                                                                                                                                         |                                                                                                                       |                                                                                                          |   |
| Trading fixed maturity securities:                                                   |                                                            |                                                        |                                                                                                                       |                                                                                                                                         |                                                                                                                       |                                                                                                          |   |
| Asset-backed securities                                                              | 48,924                                                          | 769                                                         | -                                                                                                                          | (261)                                                                                                                                        | (1,764)                                                                                                                    | 47,668                                                                                                        | 921 |
| Residential mortgage-backed   securities                              | 105,554                                                         | 473                                                         | -                                                                                                                          | (3,268)                                                                                                                                      | (4,436)                                                                                                                    | 98,323                                                                                                        | 1,388 |
| Commercial mortgage-backed   securities                               | 12,892                                                          | 1,294                                                       | -                                                                                                                          | 48,607                                                                                                                                       | -                                                                                                                          | 62,793                                                                                                        | 2,439 |
| Foreign government & agency   securities                          | 15,093                                                          | (455)                                                       | -                                                                                                                          | -                                                                                                                                            | -                                                                                                                          | 14,638                                                                                                        | (58) |
| U.S. states and political subdivisions   securities                   | -                                                               | -                                                           | -                                                                                                                          | -                                                                                                                                            | -                                                                                                                          | -                                                                                                             | - |
| U.S. treasury and agency securities                                                  | -                                                               | -                                                           | -                                                                                                                          | -                                                                                                                                            | -                                                                                                                          | -                                                                                                             | - |
| Corporate securities                                                                 | 96,653                                                          | (6,863)                                                     | -                                                                                                                          | 4,416                                                                                                                                        | (45,655)                                                                                                                   | 48,551                                                                                                        | 979 |
| Total trading fixed maturity securities                                              | 279,116                                                         | (4,782)                                                     | -                                                                                                                          | 49,494                                                                                                                                       | (51,855)                                                                                                                   | 271,973                                                                                                       | 5,669 |
|                                                                                 |                                                            |                                                        |                                                                                                                       |                                                                                                                                         |                                                                                                                       |                                                                                                          |   |
| Derivative instruments – receivable:                                           |                                                            |                                                        |                                                                                                                       |                                                                                                                                         |                                                                                                                       |                                                                                                          |   |
| Interest rate contracts                                                              | -                                                               | -                                                           | -                                                                                                                          | -                                                                                                                                            | -                                                                                                                          | -                                                                                                             | - |
| Foreign currency contracts                                                           | -                                                               | -                                                           | -                                                                                                                          | -                                                                                                                                            | -                                                                                                                          | -                                                                                                             | - |
| Equity contracts                                                                     | 11,956                                                          | (7,048)                                                     | -                                                                                                                          | (3,185)                                                                                                                                      | -                                                                                                                          | 1,723                                                                                                         | (7,049) |
| Futures contracts                                                                    | -                                                               | -                                                           | -                                                                                                                          | -                                                                                                                                            | -                                                                                                                          | -                                                                                                             | - |
| Total derivative instruments– receivable                                       | 11,956                                                          | (7,048)                                                     | -                                                                                                                          | (3,185)                                                                                                                                      | -                                                                                                                          | 1,723                                                                                                         | (7,049) |
|                                                                                 |                                                            |                                                        |                                                                                                                       |                                                                                                                                         |                                                                                                                       |                                                                                                          |   |
| Other invested assets                                                                | -                                                               | 128                                                         |        -                                                                                | 1,486                                                                                                                                        | -                                                                                                                          | 1,614                                                                                                         | 128 |
| Short-term investments                                                               | -                                                               | -                                                           | -                                                                                                                          | -                                                                                                                                            | -                                                                                                                          | -                                                                                                             | - |
| Cash and cash equivalents                                                            | -                                                               | -                                                           | -                                                                                                                          | -                                                                                                                                            | -                                                                                                                          | -                                                                                                             | - |
| Total investments and cash                                                           | 293,175                                                         | (11,782)                                                    | 302                                                                                                                        | 47,795                                                                                                                                       |  (52,109)                                                                                                             | 277,381                                                                                                       | (1,252) |
|                                                                                 |                                                            |                                                        |                                                                                                                       |                                                                                                                                         |                                                                                                                       |                                                                                                          |   |
| Separate account assets:                                                             |                                                            |                                                        |                                                                                                                       |                                                                                                                                         |                                                                                                                       |                                                                                                          |   |
| Mutual fund investments                                                              | -                                                               | -                                                           | -                                                                                                                          | -                                                                                                                                            | -                                                                                                                          | -                                                                                                             | - |
| Equity investments                                                                   | 7                                                               | 11                                                          | -                                                                                                                          | 179                                                                                                                                          | -                                                                                                                          | 197                                                                                                           | 10 |
| Fixed income investments                                                             | 313,747                                                         | (78)                                                        | -                                                                                                                          | (88,136)                                                                                                                                     | (132,570)                                                                                                                  | 92,963                                                                                                        | (2,723) |
| Alternative investments                                                              | 259,762                                                         | (10,187)                                                    | -                                                                                                                          | 20,182                                                                                                                                       | -                                                                                                                          | 269,757                                                                                                       | (9,519) |
| Other investments                                                                    |   725                                                 | -                                                           | -                                                                                                                          | -                                                                                                                                            | (725)                                                                                                                      | -                                                                                                             | -  |
| Total separate account assets (1)                                                    | $ 574,241                                                       | $(10,254)                                                   | -                                                                                                                          | (67,775)                                                                                                                                     | (133,295)                                                                                                                  | 362,917                                                                                                       | (12,232) |
|                                                                                 |                                                            |                                                        |                                                                                                                       |                                                                                                                                         |                                                                                                                       |                                                                                                          |   |
| Total assets measured at fair value on    a recurring basis | $ 867,416                                                       | $  (22,036)                                       | $             302                                         | $           (19,980)                                                                  | $      (185,404)                                                                             | $        640,298                                                      | $                              (13,484) |

|   | (1) The realized/unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities which results in a net zero impact on net income for the Company. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Liabilities                                                        | Beginningbalance                    | Total realized and unrealized(gains) losses | Purchases,issuances, andsettlements (net)                                                                                                    | Transfers inand/or (out) oflevel 3                                                                            | Endingbalance                                                                                                                    | Change in total (gains)losses included inearnings relating toinstruments still heldat the reporting date |
|--------------------------------------------------------------------|-------------------------------------|---------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|
| Includedinearnings                                                 | Included inothercomprehensiveincome |
|                                                               |                                |                                        |                                                                                                                                         |                                                                                                          |                                                                                                                             |                                                                                                     |   |
| Other policy liabilities:                                          |                                |                                        |                                                                                                                                         |                                                                                                          |                                                                                                                             |                                                                                                     |   |
| Guaranteed minimum withdrawal benefit  liability         | $ 168,786                           | $   385,563                  | $                       - | $                 63,680 | $                     - | $      618,029                                                             | $                       480,587 |
| Guaranteed minimum accumulation   benefit liability | 46,030                              | 180,406                                     | -                                                                                                                                            |  5,475                                                                                                   | -                                                                                                                                | 231,911                                                                                                  | 181,178 |
| Derivatives embedded in reinsurance   contracts     | -                                   | -                                           | -                                                                                                                                            | -                                                                                                             | -                                                                                                                                | -                                                                                                        | - |
| Fixed index annuities                                              | 139,012                             | (21,771)                                    | -                                                                                                                                            |  1,046                                                                                                   | -                                                                                                                                | 118,287                                                                                                  | (11,167) |
| Total other policy liabilities                                     | 353,828                             | 544,198                                     | -                                                                                                                                            | 70,201                                                                                                        | -                                                                                                                                | 968,227                                                                                                  | 650,598 |
|                                                               |                                |                                        |                                                                                                                                         |                                                                                                          |                                                                                                                             |                                                                                                     |   |
| Derivative instruments – payable:                            |                                |                                        |                                                                                                                                         |                                                                                                          |                                                                                                                             |                                                                                                     |   |
| Interest rate contracts                                            | -                                   | -                                           | -                                                                                                                                            | -                                                                                                             | -                                                                                                                                | -                                                                                                        | - |
| Foreign currency contracts                                         | -                                   | -                                           | -                                                                                                                                            | -                                                                                                             | -                                                                                                                                | -                                                                                                        | - |
| Credit contracts                                                   | 34,612                              | (886)                                       | -                                                                                                                                            | -                                                                                                             | -                                                                                                                                | 33,726                                                                                                   | (886) |
| Futures contracts                                                  | -                                   | -                                           | -                                                                                                                                            | -                                                                                                             | -                                                                                                                                | -                                                                                                        | - |
| Total derivative instruments – payable                  | 34,612                              | (886)                                       | -                                                                                                                                            | -                                                                                                             | -                                                                                                                                | 33,726                                                                                                   | (886) |
|                                                               |                                |                                        |                                                                                                                                         |                                                                                                          |                                                                                                                             |                                                                                                     |   |
|                                                               |                                |                                        |                                                                                                                                         |                                                                                                          |                                                                                                                             |                                                                                                     |   |
| Other liabilities:                                                 |                                |                                        |                                                                                                                                         |                                                                                                          |                                                                                                                             |                                                                                                     |   |
| Bank overdrafts                                                    | -                                   | -                                           | -                                                                                                                                            | -                                                                                                             | -                                                                                                                                | -                                                                                                        | - |
|                                                               |                                |                                        |                                                                                                                                         |                                                                                                          |                                                                                                                             |                                                                                                     |   |
| Total liabilities measured at fair value on arecurring basis       | $ 388,440                           | $   543,312                  | $                       - | $                 70,201 | $                     - | $   1,001,953                                                                             | $                       649,712 |

|                                                                                                          |   | Total realizedlosses included inearnings |   | Change inunrealized gains(losses) related toassets and liabilities still held  at the reporting date |
|---------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------|
| Net investment (loss) income                                                                                  | $      | (4,654)                                  | $      | 5,797                                                                                                     |
| Net derivative loss                                                                                           |   | (550,360)                                |   | (656,761)                                                                                                      |
| Net realized investment losses, excluding impairment   losses on available-for-sale securities |   | (80)                                     |   | -                                                                                                         |
| Net loss                                                                                                      | $      | (555,094)                                | $      | (650,964)                                                                                                      |

----

|                                                                            | Level 1 Transfers                                                                                                                | Level 2 Transfers                                                                                                                      | Level 3 Transfers                                                                                                          |
|---------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|
|                                                                            | Into                                                                                                                             | (Out of)                                                                                                                               | Into                                                                                                                       | (Out of) | Into | (Out of) |
| Assets                                                                          |                                                                                                                             |                                                                                                                                   |                                                                                                                       |   |   |   |
| Available-for-sale fixed maturity securities:                                   |                                                                                                                             |                                                                                                                                   |                                                                                                                       |   |   |   |
| Asset-backed securities                                                         | $                     - | $                      - | $                    - | $                        - | $                   - | $                          - |
| Residential mortgage-backed securities                                          | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Commercial mortgage-backed securities                                           | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Foreign government & agency securities                                      | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| U.S. states and political subdivisionssecurities                                | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| U.S. treasury and agency securities                                             | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Corporate securities                                                            | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Total available-for-sale fixed maturitysecurities                               | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
|                                                                            |                                                                                                                             |                                                                                                                                   |                                                                                                                       |   |   |   |
| Trading fixed maturity securities:                                              |                                                                                                                             |                                                                                                                                   |                                                                                                                       |   |   |   |
| Asset-backed securities                                                         | -                                                                                                                                | -                                                                                                                                      | 26,774                                                                                                                     | (5,192) | 5,192 | (26,774) |
| Collateralized mortgage obligations                                             | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | (4,954) | 4,954 | - |
| Residential mortgage-backed securities                                          | -                                                                                                                                | -                                                                                                                                      | 56,571                                                                                                                     | (133,509) | 133,509 | (56,571) |
| Commercial mortgage-backed securities                                           | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| U.S. states and political subdivisionssecurities                                | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| U.S. treasury and agency securities                                             | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Corporate securities                                                            | -                                                                                                                                | -                                                                                                                                      | 35,621                                                                                                                     | (3,202) | 3,202 | (35,621) |
| Total trading fixed maturity securities                                         |                                                                                                                             |                                                                                                                                   | 118,966                                                                                                                    | (146,857) | 146,857 | (118,966) |
|                                                                            |                                                                                                                             |                                                                                                                                   |                                                                                                                       |   |   |   |
| Derivative instruments – receivable:                                      |                                                                                                                             |                                                                                                                                   |                                                                                                                       |   |   |   |
| Interest rate contracts                                                         | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Foreign currency contracts                                                      | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Equity contracts                                                                | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Futures contracts                                                               | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Total derivative instruments– receivable                                  | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
|                                                                            |                                                                                                                             |                                                                                                                                   |                                                                                                                       |   |   |   |
| Other invested assets                                                           | -                                                                                                                                | -                                                                                                                                      | 7,650                                                                                                                      | - | - | (7,650) |
| Total investments and cash                                                      | -                                                                                                                                | -                                                                                                                                      | 126,616                                                                                                                    | (146,857) | 146,857 | (126,616) |
|                                                                            |                                                                                                                             |                                                                                                                                   |                                                                                                                       |   |   |   |
| Equity investments                                                              | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | (59) | 59 | - |
| Fixed income investments                                                        | -                                                                                                                                | -                                                                                                                                      | 31,692                                                                                                                     | (32,618) | 32,618 | (31,692) |
| Alternative investments                                                         | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | (3,200) | 3,200 | - |
| Other investments                                                               | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Total separate account assets                                                   | -                                                                                                                                | -                                                                                                                                      | 31,692                                                                                                                     | (35,877) | 35,877 | (31,692) |
|                                                                            |                                                                                                                             |                                                                                                                                   |                                                                                                                       |   |   |   |
| Total assets measured at fair value on a    recurring basis | $                     - | $                     -       | $        158,308                                                                   | $          (182,734) | $       182,734 | $           (158,308) |

----

|                                                                            | Level 1 Transfers                                                                                                                | Level 2 Transfers                                                                                                                      | Level 3 Transfers                                                                                                                      |
|---------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|
|                                                                            | Into                                                                                                                             | (Out of)                                                                                                                               | Into                                                                                                                                   | (Out of) | Into | (Out of) |
| Assets                                                                          |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Available-for-sale fixed maturity securities:                                   |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Asset-backed securities                                                         | $                     - | $                      - | $                      - | $                        - | $                   - | $                         - |
| Residential mortgage-backed securities                                          | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| Commercial mortgage-backed securities                                           | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| Foreign government & agency securities                                      | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| U.S. states and political subdivisionssecurities                                | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| U.S. treasury and agency securities                                             | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| Corporate securities                                                            | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| Total available-for-sale fixed maturitysecurities                               | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
|                                                                            |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Trading fixed maturity securities:                                              |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Asset-backed securities                                                         | -                                                                                                                                | -                                                                                                                                      | 16,177                                                                                                                                 | (1,696) | 1,696 | (16,177) |
| Residential mortgage-backed securities                                          | -                                                                                                                                | -                                                                                                                                      | 61,338                                                                                                                                 | (78,250) | 78,250 | (61,338) |
| Commercial mortgage-backed securities                                           | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | (4,866) | 4,866 | - |
| Foreign government & agency securities                                      | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| U.S. states and political subdivisionssecurities                                | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| U.S. treasury and agency securities                                             | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| Corporate securities                                                            | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| Total trading fixed maturity securities                                         | -                                                                                                                                | -                                                                                                                                      | 77,515                                                                                                                                 | (84,812) | 84,812 | (77,515) |
|                                                                            |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Derivative instruments – receivable:                                      |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Interest rate contracts                                                         | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| Foreign currency contracts                                                      | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| Equity contracts                                                                | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| Futures contracts                                                               | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| Total derivative instruments– receivable                                  | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
|                                                                            |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Other invested assets                                                           | -                                                                                                                                | -                                                                                                                                      | 7,830                                                                                                                                  | - | - | (7,830) |
| Total investments and cash                                                      | -                                                                                                                                | -                                                                                                                                      | 85,345                                                                                                                                 | (84,812) | 84,812 | (85,345) |
|                                                                            |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Equity investments                                                              | -                                                                                                                                | -                                                                                                                                      | 6                                                                                                                                      |   | - | (6) |
| Fixed income investments                                                        | -                                                                                                                                | -                                                                                                                                      | 24,649                                                                                                                                 | (7,188) | 7,188 | (24,649) |
| Alternative investments                                                         | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| Other investments                                                               | -                                                                                                                                | -                                                                                                                                      | -                                                                                                                                      | - | - | - |
| Total separate account assets                                                   | -                                                                                                                                | -                                                                                                                                      | 24,655                                                                                                                                 | (7,188) | 7,188 | (24,655) |
|                                                                            |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Total assets measured at fair value on a    recurring basis | $                    -       | $                      - | $          110,000                                                                   | $            (92,000) | $         92,000 | $           (110,000) |

----

|                                                                                  | Level 1 Transfers                                                                                                    | Level 2 Transfers                                                                                                                      | Level 3 Transfers                                                                                                          |
|---------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|
|                                                                                  | Into                                                                                                                 | (Out of)                                                                                                                               | Into                                                                                                                       | (Out of) | Into | (Out of) |
| Assets                                                                                |                                                                                                                 |                                                                                                                                   |                                                                                                                       |   |   |   |
| Available-for-sale fixed maturity securities:                                         |                                                                                                                 |                                                                                                                                   |                                                                                                                       |   |   |   |
| Asset-backed securities                                                               | $                   - | $                      - | $                    - | $                        - | $                   - | $                   - |
| Residential mortgage-backed securities                                                | -                                                                                                                    | -                                                                                                                                      | -                                                                                                                          |  - | - |  - |
| Commercial mortgage-backed securities                                                 | -                                                                                                                    | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Foreign government & agency securities                                            | -                                                                                                                    | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| U.S. states and political subdivisionssecurities                                      |  -                                                                                                              | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| U.S. treasury and agency securities                                                   | -                                                                                                                    | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Corporate securities                                                                  | -                                                                                                                    | -                                                                                                                                      | 7,184                                                                                                                      | - | - | (7,184) |
| Total available-for-sale fixed maturitysecurities                                     | -                                                                                                                    | -                                                                                                                                      | 7,184                                                                                                                      | - | - | (7,184) |
|                                                                                  |                                                                                                                 |                                                                                                                                   |                                                                                                                       |   |   |   |
| Trading fixed maturity securities:                                                    |                                                                                                                 |                                                                                                                                   |                                                                                                                       |   |   |   |
| Asset-backed securities                                                               | -                                                                                                                    | -                                                                                                                                      | 45,553                                                                                                                     | (9,070) | 9,070 | (45,553) |
| Residential mortgage-backed securities                                                | -                                                                                                                    | -                                                                                                                                      | 91,399                                                                                                                     | (39,082) | 39,082 | (91,399) |
| Commercial mortgage-backed securities                                                 | -                                                                                                                    | -                                                                                                                                      | 696                                                                                                                        | - | - | (696) |
| Foreign government & agency securities                                            | -                                                                                                                    | -                                                                                                                                      | -                                                                                                                          | - | - |  - |
| U.S. states and political subdivisionssecurities                                      | -                                                                                                                    | -                                                                                                                                      | -                                                                                                                          | - | - |  - |
| U.S. treasury and agency securities                                                   | -                                                                                                                    | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Corporate securities                                                                  | -                                                                                                                    | -                                                                                                                                      | 55,326                                                                                                                     | - | - | (55,326) |
| Total trading fixed maturity securities                                               |                                                                                                                 |                                                                                                                                   | 192,974                                                                                                                    | (48,152) | 48,152 | (192,974) |
|                                                                                  |                                                                                                                 |                                                                                                                                   |                                                                                                                       |   |   |   |
| Derivative instruments – receivable:                                            |                                                                                                                 |                                                                                                                                   |                                                                                                                       |   |   |   |
| Interest rate contracts                                                               | -                                                                                                                    | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Foreign currency contracts                                                            | -                                                                                                                    | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Equity contracts                                                                      | -                                                                                                                    | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Futures contracts                                                                     | -                                                                                                                    | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Total derivative instruments– receivable                                        | -                                                                                                                    | -                                                                                                                                      | -                                                                                                                          | - | - | - |
|                                                                                  |                                                                                                                 |                                                                                                                                   |                                                                                                                       |   |   |   |
| Separate account assets:                                                              |                                                                                                                 |                                                                                                                                   |                                                                                                                       |   |   |   |
| Mutual fund investments                                                               | -                                                                                                                    | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Equity investments                                                                    | -                                                                                                                    | -                                                                                                                                      | -                                                                                                                          | - | - | - |
| Fixed income investments                                                              | -                                                                                                                    | -                                                                                                                                      | 109,320                                                                                                                    | - | - | (109,320) |
| Alternative investments                                                               | -                                                                                                                    | -                                                                                                                                      | 2,969                                                                                                                      | - | - | (2,969) |
| Other investments                                                                     | 4,108                                                                                                                | -                                                                                                                                      | -                                                                                                                          | - | - | (4,108) |
| Total separate account assets                                                         | 4,108                                                                                                                | -                                                                                                                                      | 112,289                                                                                                                    | - | - | (116,397) |
|                                                                                  |                                                                                                                 |                                                                                                                                   |                                                                                                                       |   |   |   |
| Total assets measured at fair value on a     recurring basis | $             4,108                                 | $                      - | $        312,447                                                                   | $            (48,152) | $         48,152 | $       (316,555) |

----

|                                                                                  | Level 1 Transfers                                                                                                                | Level 2 Transfers                                                                                                                      | Level 3 Transfers                                                                                                                      |
|---------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                  | Into                                                                                                                             | (Out of)                                                                                                                               | Into                                                                                                                                   | (Out of) | Into | (Out of) |
| Assets                                                                                |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Available-for-sale fixed maturity securities:                                         |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Asset-backed securities                                                               | $                    -  | $                     -  | $                     -  | $                       -  | $                  -  | $                        -  |
| Residential mortgage-backed securities                                                | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| Commercial mortgage-backed securities                                                 | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| Foreign government & agency securities                                            | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| U.S. states and political subdivisionssecurities                                      | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| U.S. treasury and agency securities                                                   | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| Corporate securities                                                                  | -                                                                                                                           | -                                                                                                                                 | 254                                                                                                                                    | -  | -  | (254) |
| Total available-for-sale fixed maturitysecurities                                     | -                                                                                                                           | -                                                                                                                                 | 254                                                                                                                                    | - | -  | (254) |
|                                                                                  |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Trading fixed maturity securities:                                                    |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Asset-backed securities                                                               | -                                                                                                                           | -                                                                                                                                 | 7,908                                                                                                                                  | (6,144) | 6,144 | (7,908) |
| Residential mortgage-backed securities                                                | -                                                                                                                           | -                                                                                                                                 | 57,646                                                                                                                                 | (53,210) | 53,210 | (57,646) |
| Commercial mortgage-backed securities                                                 | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| Foreign government & agency securities                                            | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| U.S. states and political subdivisionssecurities                                      | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| U.S. treasury and agency securities                                                   | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| Corporate securities                                                                  | -                                                                                                                           | -                                                                                                                                 | 45,655                                                                                                                                 | -  | -  | (45,655) |
| Total trading fixed maturity securities                                               | -                                                                                                                           | -                                                                                                                                 | 111,209                                                                                                                                | (59,354) | 59,354  | (111,209) |
|                                                                                  |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Derivative instruments – receivable:                                            |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Interest rate contracts                                                               | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| Foreign currency contracts                                                            | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| Equity contracts                                                                      | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| Futures contracts                                                                     | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| Total derivative instruments– receivable                                        | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
|                                                                                  |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Separate account assets:                                                              |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Mutual fund investments                                                               | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| Equity investments                                                                    | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| Fixed income investments                                                              | -                                                                                                                           | -                                                                                                                                 | 132,570                                                                                                                                | -  | -  | (132,570) |
| Alternative investments                                                               | -                                                                                                                           | -                                                                                                                                 | -                                                                                                                                 | -  | -  | -  |
| Other investments                                                                     | 725                                                                                                                         | -                                                                                                                                 | -                                                                                                                                 | -  | -  | (725) |
| Total separate account assets                                                         | 725                                                                                                                         | -                                                                                                                                 | 132,570                                                                                                                                | -  | -  | (133,295) |
|                                                                                  |                                                                                                                             |                                                                                                                                   |                                                                                                                                   |   |   |   |
| Total assets measured at fair value on a     recurring basis | $               725                              | $                     -  | $          244,033                                                                   | $            (59,354) | $         59,354 | $           (244,758) |

----

|                   |                                                                                   |                                                                       | June 30, 2011                                                        |       | December 31, 2010                                                    |
|------------------------|----------------------------------------------------------------------------------------|----------------------------------------------------------------------------|----------------------------------------------------------------------|------------|----------------------------------------------------------------------|
|                   |                                                                                   |                                                                       | Carrying                                                             | Estimated  |                                                                 | Carrying | Estimated |
|                   |                                                                                   |                                                                       | Amount                                                               | Fair Value |                                                                 | Amount | Fair Value |
| Financial assets:      |                                                                                   |                                                                       |                                                                 |       |                                                                 |
|                   | Mortgage loans                                                                         | $        1,605,920                 | $       1,697,206                 |       | $       1,737,528                 | $       1,811,567 |
|                   | Policy loans                                                                           | $           607,346 | $          741,368 |       | $          717,408 | $          859,668 |
|                   |                                                                                   |                                                                       |                                                                 |       |                                                                 |   |
| Financial liabilities: |                                                                                   |                                                                       |                                                                 |       |                                                                 |
|                   | Contractholder deposit funds and other     policy liabilities | $      11,255,962                            | $     10,946,084                            |       | $     11,944,058                            | $     11,490,525 |
|                   | Debt payable to affiliates                                                             | $           783,000 | $          783,000 |       | $          783,000 | $          783,000 |

----

|                                               |                                                                                     |                                                                                                           | Gross                                                                                                      |                                                                                                                 |                                                                                     |
|----------------------------------------------------|------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|
| Available-for-sale fixed maturity securities       | AmortizedCost                                                                            | GrossUnrealizedGains                                                                                           | UnrealizedTemporaryLosses                                                                                  | OTTILosses(1)                                                                                                        | FairValue                                                                                |
| Non-corporate securities:                          |                                                                                     |                                                                                                           |                                                                                                       |                                                                                                                 |                                                                                     |
| Asset-backed securities                            | $              204 | $                  5 | $                 (1) | $                   - | $              208 |
| Residential mortgage-backed securities             | 28,291                                                                                   | 2,367                                                                                                          | -                                                                                                          | -                                                                                                               | 30,658                                                                                   |
| Commercial mortgage-backed securities              | 15,459                                                                                   | 402                                                                                                            | (1,182)                                                                                                    | -                                                                                                               | 14,679                                                                                   |
| U.S. states and political subdivision securities   | 216                                                                                      | 4                                                                                                              | -                                                                                                     | -                                                                                                               | 220                                                                                      |
| U.S. treasury and agency securities                | 480,051                                                                                  | 9,754                                                                                                          | (856)                                                                                                      | -                                                                                                               | 488,949                                                                                  |
| Total non-corporate securities                     | 524,221                                                                                  | 12,532                                                                                                         | (2,039)                                                                                                    | -                                                                                                               | 534,714                                                                                  |
|                                               |                                                                                     |                                                                                                           |                                                                                                       |                                                                                                                 |                                                                                     |
| Corporate securities                               | 1,061,682                                                                                | 58,611                                                                                                         | (1,481)                                                                                                    | (10,595)                                                                                                             | 1,108,217                                                                                |
|                                               |                                                                                     |                                                                                                           |                                                                                                       |                                                                                                                 |                                                                                     |
| Total available-for-sale fixed maturity securities | $    1,585,903                                                       | $         71,143                                                  | $          (3,520)                                       | $       (10,595)                                                                  | $    1,642,931                                                       |

| Trading fixed maturity securities                | AmortizedCost                                      | GrossUnrealizedGains                                          | GrossUnrealizedLosses                          | FairValue                                                |
|--------------------------------------------------|----------------------------------------------------|---------------------------------------------------------------|------------------------------------------------|----------------------------------------------------------|
| Non-corporate securities:                        |                                               |                                                          |                                           |                                                     |
| Asset-backed securities                          | $       500,138 | $         11,478 | $      (133,134) | $        378,482 |
| Residential mortgage-backed securities           | 1,025,901                                          | 16,290                                                        | (217,592)                                      | 824,599                                                  |
| Commercial mortgage-backed securities            | 844,370                                            | 54,212                                                        | (104,806)                                      | 793,776                                                  |
| Foreign government & agency securities       | 113,996                                            | 8,489                                                         | -                                         | 122,485                                                  |
| U.S. states and political subdivision securities | 603                                                | 24                                                            | -                                         | 627                                                      |
| U.S. treasury and agency securities              | 321,033                                            | 3,530                                                         | (1,311)                                        | 323,252                                                  |
| Total non-corporate securities                   | 2,806,041                                          | 94,023                                                        | (456,843)                                      | 2,443,221                                                |
|                                             |                                               |                                                          |                                           |                                                     |
| Corporate securities                             | 7,960,370                                          | 417,725                                                       | (92,982)                                       | 8,285,113                                                |
|                                             |                                               |                                                          |                                           |                                                     |
| Total trading fixed maturity securities          | $  10,766,411                            | $       511,748            | $      (549,825) | $   10,728,334                            |

|  (1) | Represents the pre-tax non-credit OTTI loss recorded as a component of accumulated other comprehensive income (“AOCI”) for assets still held at the reporting date. |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                     |                                                                                     |                                                                                                | Gross                                                                                                            |                                                                                               |                                                                                           |
|----------------------------------------------------------|------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|
|  Available-for-sale fixed maturity securities       | AmortizedCost                                                                            | GrossUnrealizedGains                                                                                | UnrealizedTemporaryLosses                                                                                        | OTTILosses (1)                                                                                     | FairValue                                                                                      |
| Non-corporate securities:                                |                                                                                     |                                                                                                |                                                                                                             |                                                                                               |                                                                                           |
| Asset-backed securities                                  | $              694 | $                27 | $                  (6) | $               -  | $               715 |
| Residential mortgage-backed securities                   | 32,263                                                                                   | 2,351                                                                                               | -                                                                                                           | -                                                                                             | 34,614                                                                                         |
| Commercial mortgage-backed securities                    | 15,952                                                                                   | 522                                                                                                 | (1,424)                                                                                                          | -                                                                                             | 15,050                                                                                         |
| Foreign government & agency securities               | 506                                                                                      | 57                                                                                                  | -                                                                                                           | -                                                                                             | 563                                                                                            |
| U.S. states and political subdivision securities         | 217                                                                                      | -                                                                                                   | (3)                                                                                                              | -                                                                                             | 214                                                                                            |
| U.S. treasury and agency securities                      | 371,704                                                                                  | 4,500                                                                                               | (971)                                                                                                            | -                                                                                             | 375,233                                                                                        |
| Total non-corporate securities                           | 421,336                                                                                  | 7,457                                                                                               | (2,404)                                                                                                          | -                                                                                             | 426,389                                                                                        |
|                                                     |                                                                                     |                                                                                                |                                                                                                             |                                                                                               |                                                                                           |
| Corporate securities                                     | 1,001,615                                                                                | 82,490                                                                                              | (2,267)                                                                                                          | (12,304)                                                                                           | 1,069,534                                                                                      |
|  Total available-for-sale fixed maturity securities | $    1,422,951                                                       | $         89,947                                       | $           (4,671)                                       | $     (12,304)                                                            | $     1,495,923                                                       |

| Trading fixed maturity securities                | AmortizedCost                                      | GrossUnrealizedGains                                          | GrossUnrealizedLosses                                | FairValue                              |
|--------------------------------------------------|----------------------------------------------------|---------------------------------------------------------------|------------------------------------------------------|----------------------------------------|
| Non-corporate securities:                        |                                               |                                                          |                                                 |                                   |
| Asset-backed securities                          | $       544,106 | $         10,104 | $       (142,230) | $     411,980 |
| Residential mortgage-backed securities           | 1,184,184                                          | 17,259                                                        | (278,650)                                            | 922,793                                |
| Commercial mortgage-backed securities            | 917,650                                            | 42,368                                                        | (140,823)                                            | 819,195                                |
| Foreign government & agency securities       | 122,537                                            | 8,239                                                         | -                                               | 130,776                                |
| U.S. states and political subdivision securities | 605                                                | 8                                                             | -                                               | 613                                    |
| U.S. treasury and agency securities              | 745,460                                            | 3,037                                                         | (878)                                                | 747,619                                |
| Total non-corporate securities                   | 3,514,542                                          | 81,015                                                        | (562,581)                                            | 3,032,976                              |
|                                             |                                               |                                                          |                                                 |                                   |
| Corporate Securities                             | 8,195,874                                          | 368,893                                                       | (130,625)                                            | 8,434,142                              |
| Total trading fixed maturity securities          | $  11,710,416                            | $       449,908            | $       (693,206) | $11,467,118                            |

|   | (1)  Represents the pre-tax non-credit OTTI loss recorded as a component of AOCI for assets still held at the reporting date. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                           |                                                    |                                                                                               |                                                                                   | Amortized Cost | Fair Value |
|--------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|----------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|----------------|------------|
| Maturities of available-for-sale fixed securities:                                                                             |                                                    |                                                                                               |
|                                                                                                                           | Due in one year or less                                 | $               237,811 | $             239,362 |
|                                                                                                                           | Due after one year through five years                   | 591,891                                                                                            | 626,846                                                                                |
|                                                                                                                           | Due after five years through ten years                  | 136,986                                                                                            | 139,594                                                                                |
|                                                                                                                           | Due after ten years                                     |                                                                                               |                                                                                   | 575,261        | 591,584    |
|           Subtotal – Maturities of available-for-sale fixed securities |                                                    | 1,541,949                                                                                          | 1,597,386                                                                              |
| ABS, RMBS and CMBS securities(1)                                                                                               |                                                    | 43,954                                                                                             | 45,545                                                                                 |
|           Total available-for-sale fixed securities                          |                                                    | $           1,585,903                       | $          1,642,931                 |
|                                                                                                                           |                                                    |                                                                                               |                                                                                   |
| Maturities of trading fixed securities:                                                                                        |                                                    |                                                                                               |
|                                                                                                                           | Due in one year or less                                 | $               653,140 | $             670,813 |
|                                                                                                                           | Due after one year through five years                   | 4,481,531                                                                                          | 4,702,305                                                                              |
|                                                                                                                           | Due after five years through ten years                  | 1,742,272                                                                                          | 1,857,984                                                                              |
|                                                                                                                           | Due after ten years                                     | 1,519,059                                                                                          | 1,500,375                                                                              |
|                                                                                                                           | Subtotal – Maturities of trading fixed securities | 8,396,002                                                                                          | 8,731,477                                                                              |
| ABS, RMBS and CMBS securities(1)                                                                                               | 2,370,409                                               | 1,996,857                                                                                          |
|                                                                                                                           | Total trading fixed securities                          | $          10,766,411                            | $        10,728,334                            |

|   | (1) | ABS, RMBS and CMBS securities are shown separately in the above table as they are not due at a single maturity. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------|

----

|                                   |  Less Than Twelve Months |                                                                                         |  Twelve Months or More                                                                  |   |  Total   |
|----------------------------------------|-------------------------------|----------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|--------|---------------|
|                                   |  No. (1)                 |  FairValue                                                                              | GrossUnrealizedLosses                                                                        |   |  No. (1) |  FairValue | GrossUnrealizedLosses |   |  No. (1) |  FairValue | GrossUnrealizedLosses |
|                                   |                          |                                                                                         |                                                                                         |   |          |   |   |   |   |   |   |
| Non-corporate securities:              |                          |                                                                                         |                                                                                         |   |          |   |   |   |   |   |   |
| Asset-backed securities                | -                             | $               - | $               - |   | 1             | $            3 | $            (1) |   | 1 | $            3  | $            (1) |
| Residential mortgage-backed securities | 1                             | 23                                                                                           | -                                                                                            |   | -             | - | - |   | 1 | 23 | - |
| Commercial mortgage-backed securities  | 3                             | 3,221                                                                                        | (58)                                                                                         |   | 4             | 2,137 | (1,124) |   | 7 |     5,358 | (1,182) |
| U.S. treasury and agency securities    | 1                             | 15,801                                                                                       | (856)                                                                                        |   | -             | - | - |   | 1 |  15,801 | (856) |
| Total non-corporate securities         | 5                             | 19,045                                                                                       | (914)                                                                                        |   | 5             | 2,140 | (1,125) |   | 10 | 21,185 | (2,039) |
|                                   |                          |                                                                                         |                                                                                         |   |          |   |   |   |   |   |   |
|  Corporate securities             | 68                            | 205,879                                                                                      | (4,907)                                                                                      |   | 19            | 41,696 | (5,091) |   | 87 | 247,575 | (9,998) |
| Total                                  | 73                            | $    224,924                                                             | $     (5,821)                                                       |   | 24            | $    43,836 | $     (6,216) |   | 97 | $  268,760 | $    (12,037) |

|                                       |  Less than Twelve Months |                                                                                         |  Twelve Months or More                                                                  |   |  Total   |
|--------------------------------------------|-------------------------------|----------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|--------|---------------|
|                                       |  No. (1)                 |  FairValue                                                                              | GrossUnrealizedLosses                                                                        |   |  No. (1) |  FairValue | GrossUnrealizedLosses |   |  No. (1) |  FairValue | GrossUnrealizedLosses |
|                                       |                          |                                                                                         |                                                                                         |   |          |   |   |   |   |   |   |
| Non-corporate securities:                  |                          |                                                                                         |                                                                                         |   |          |   |   |   |   |   |   |
| Asset-backed securities                    | -                             | $               - | $               - |   | 1             | $           11 | $           (6) |   | 1 | $           11 | $            (6) |
| Residential mortgage-backed securities     | 1                             | 26                                                                                           | -                                                                                            |   | -             | - | - |   | 1 | 26 | - |
| Commercial mortgage-backed securities      | -                             | -                                                                                            | -                                                                                            |   | 5             | 2,534 | (1,424) |   | 5 | 2,534 | (1,424) |
| Foreign government & agency securities | -                             | -                                                                                            | -                                                                                            |   | -             | - | - |   | - | - | - |
| U.S. states and political subdivisions     | 1                             | 214                                                                                          | (3)                                                                                          |   | -             | - | - |   | 1 | 214 | (3) |
| U.S. treasury and agency securities        | 2                             | 23,636                                                                                       | (971)                                                                                        |   | -             | - | - |   | 2 | 23,636 | (971) |
| Total non-corporate securities             | 4                             | 23,876                                                                                       | (974)                                                                                        |   | 6             | 2,545 | (1,430) |   | 10 | 26,421 | (2,404) |
|                                       |                          |                                                                                         |                                                                                         |   |          |   |   |   |   |   |   |
|  Corporate securities                 | 72                            | 187,916                                                                                      | (5,211)                                                                                      |   | 35            | 91,154 | (9,360) |   | 107 | 279,070 | (14,571) |
| Total                                      | 76                            | $    211,792                                                             | $     (6,185)                                                       |   | 41            | $    93,699 | $   (10,790) |   | 117 | $  305,491 | $   (16,975) |

| (1) | These columns present the number of securities (not in thousands) in an unrealized loss position. |
|-----|---------------------------------------------------------------------------------------------------|

----

----

----

|                                                                    |   | 2011        |   |   | 2010        |
|-------------------------------------------------------------------------|--------|-------------|--------|--------|-------------|
|                                                                    |   |        |   |   |        |
| Beginning balance, at January 1,                                        | $      | 5,847  |   | $      | 9,148  |
| Add: Credit losses on OTTI not previously recognized                    |   | 71     |   |   | 885    |
| Less: Credit losses on securities sold                                  |   | (5,427)     |   |   | (1,699)     |
| Less: Increases in cash flows expected on previouslyimpaired securities |   | -      |   |   | (1,276)     |
| Other                                                                   |   | 3,341  |   |   | -      |
| Ending balance, at June 30,                                             | $      | 3,832  |   | $      | 7,058  |

|                                                                    |   | 2011        |   |   | 2010        |
|-------------------------------------------------------------------------|--------|-------------|--------|--------|-------------|
|                                                                    |   |        |   |   |        |
| Beginning balance, at April 1,                                          | $      | 5,315  |   | $      | 7,976  |
| Less: Credit losses on securities sold                                  |   | (1,483)     |   |   | (731)       |
| Less: Increases in cash flows expected on previouslyimpaired securities |   | -      |   |   | (187)       |
| Ending balance, at June 30,                                             | $      | 3,832  |   | $      | 7,058  |

----

|                 | June 30,2011                                                                 | December 31,2010                                           |
|----------------------|------------------------------------------------------------------------------|------------------------------------------------------------|
|                 |                                                                         |                                                       |
| Total mortgage loans | $           1,605,920 | $        1,737,528 |

|                                        | Gross Carrying Value                                                                                                                   |
|---------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|
|                                        | June 30,                                                                                                                               | December 31, |
|                                        | 2011                                                                                                                                   | 2010 |
| Past due:                                   |                                                                                                                                   |   |
| Between 30 and 59 days                      | $                      - | $            16,607 |
| Between 60 and 89 days                      | 5,653                                                                                                                                  | 12,333 |
| 90 days or more                             | 17,253                                                                                                                                 | 19,310 |
| Total past due                              | 22,906                                                                                                                                 | 48,250 |
| Current (1)                                 | 1,630,792                                                                                                                              | 1,743,060 |
| Total mortgage loans                        | $       1,653,698                                                                                   | $       1,791,310 |
| Past due 90 days or more and still accruing | $                      - | $                      - |

|               | Allowance for Loan Loss                                                         |
|--------------------|---------------------------------------------------------------------------------|
|               | June 30,                                                                        | December 31, |
|               | 2011                                                                            | 2010 |
|               |                                                                            |   |
| General allowance  | $            23,662 | $            23,662 |
| Specific allowance | 24,116                                                                          | 30,120 |
| Total              | $            47,778 | $            53,782 |

| (1) | Included in the $1,630.8 million and $1,743.1 million of the Company’s mortgage loans in current status at June 30, 2011 and December 31, 2010 are $176.9 million and $165.6 million, respectively, of mortgage loans that are impaired but not past due. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|         | June 30,                                                                                                                                                                   | December 31,                                                                                                                                             |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
|         | 2011                                                                                                                                                                       | 2010                                                                                                                                                     |
| Insured      | $                           -  | $                        -  |
| High         | 373,319                                                                                                                                                               | 394,288                                                                                                                                             |
| Standard     | 510,333                                                                                                                                                               | 544,243                                                                                                                                             |
| Satisfactory | 308,921                                                                                                                                                               | 333,086                                                                                                                                             |
| Low quality  | 461,125                                                                                                                                                               | 519,693                                                                                                                                             |
| Total        | $             1,653,698                                                                              | $         1,791,310                                                                                    |

|                        | With noallowancerecorded                                                                                                               |   | With anallowancerecorded                                                              |   | Total                                                                                       |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|
| Gross carrying value        | $         127,008                                                                    |   | $            72,808  |   | $           199,816             |
| Unpaid principal balance    | $         128,320                                                                    |   | $            77,563  |   | $           205,883             |
| Related allowance           | $                     -  |   | $            24,116  |   | $             24,116  |
| Average recorded investment | $         126,333                                                                    |   | $            80,613  |   | $           206,946             |

|                        | With noallowancerecorded                                                                                                                |   | With anallowancerecorded                                                        |   | Total                                                                                       |
|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|
| Gross carrying value        | $          119,323                                                               |   | $           85,281  |   | $           204,604             |
| Unpaid principal balance    | $          120,417                                                               |   | $           88,625  |   | $           209,042             |
| Related allowance           | $                      -  |   | $           30,120  |   | $             30,120  |
| Average recorded investment | $          113,701                                                                    |   | $           86,575  |   | $           200,276             |

----

|                      |   | For the six-month periodsended June 30, |   | For the three-month periodsended June 30, |
|---------------------------|--------|-----------------------------------------|--------|-------------------------------------------|
|                      |   | 2011                                    |   | 2010                                      |   | 2011 |   | 2010 |
|                      |   |                                    |   |                                      |   |   |   |   |
| Average investments       | $      | 206,946                                 | $      | 176,642                                   | $ | 208,118 | $ | 179,948 |
| Interest income           | $      | 3,492                                   | $      | 3,345                                     | $ | 2,030 | $ | 1,537 |
| Cash receipts on interest | $      | 2,995                                   | $      | 2,869                                     | $ | 1,533 | $ | 1,513 |

|                     | June 30,2011 |         |   | December 31,2010 |
|--------------------------|--------------|--------------|--------|------------------|
|                     |         |         |   |             |   |
| Beginning balance        | $            | 53,782  |   | $                | 42,782  |
| Provisions for allowance |         | 4,471   |   |             | 26,742  |
| Charge-offs              |         | (7,908)      |   |             | (6,892) |
| Recoveries               |         | (2,567)      |   |             | (8,850) |
| Ending balance           | $            | 47,778  |   | $                | 53,782  |

----

----

----

|                 | At June 30, 2011 | At December 31, 2010 |
|----------------------|------------------|----------------------|
|                 |             | Number of            |   | Principal |   | Number of |   | Principal |
|                 |             | Contracts            |   | Notional (2) |   | Contracts |   | Notional (2) |
|                 |             |                 |   |   |   |   |   |   |
| Interest rate swaps  |             | 73                   |   | $           5,602,500 |   | 70 |   | $        5,443,500 |
| Currency swaps       |             | 6                    |   | 368,440 |   | 7 |   | 349,460 |
| Credit default swaps |             | 1                    |   | 37,400 |   | 1 |   | 37,400 |
| Currency forwards    |             | 24                   |   | 36,985 |   | 36 |   | 44,149 |
| Swaptions            |             | -                    |   | - |   | 1 |   | 350,000 |
| Futures (1)          |             | (27,160)             |   | 3,248,425 |   | (25,699) |   | 2,918,839 |
| Index call options   |             | 8,895                |   | 1,803,013 |   | 9,604 |   | 1,858,109 |
| Index put options    |             | 3,000                |   | 396,192 |   | 4,100 |   | 515,632 |
| Total                |             |                 |   | $         11,492,955 |   |   |   | $      11,517,089 |

----

|                         | At June 30, 2011  | At December 31, 2010                                                 |
|------------------------------|-------------------|----------------------------------------------------------------------|
|                         | Asset Derivatives | LiabilityDerivatives                                                 |       Asset Derivatives |             Liability               Derivatives |
|                         |              | Fair Value (a)                                                       |   | Fair Value (a) |   | Fair Value (a) |   | Fair Value (a) |
|                         |              |                                                                 |   |   |   |   |   |   |
| Interest rate contracts      |              | $          100,122 |   | $           282,615 |   | $          97,060  |   | $       329,214  |
| Foreign currency contracts   |              | 36,988                                                               |   | 6,767 |   | 32,504  |   | 3,878  |
| Equity contracts             |              | 82,597                                                               |   | - |   | 59,397  |   | -  |
| Credit contracts             |              | -                                                                    |   | 22,563 |   | -  |   | 27,341  |
| Futures contracts (b)        |              | 1,137                                                                |   | 23,550 |   | 9,103  |   | 1,590  |
| Total derivative instruments |              | 220,844                                                              |   | 335,495 |   | 198,064  |   | 362,023  |
| Embedded derivatives (c)     |              | 10,199                                                               |   | 228,914 |   | 2,896  |   | 178,069  |
| Total                        |              | $          231,043 |   | $           564,409 |   | $        200,960  |   | $       540,092  |

| (a) | Amounts are presented without consideration of cross-transaction netting and collateral. |
|-----|------------------------------------------------------------------------------------------|

| (b) | Futures contracts include interest rate, equity price and foreign currency exchange risks. |
|-----|--------------------------------------------------------------------------------------------|

| (c) | Embedded derivatives expose the Company to a combination of credit, interest rate and equity price risks. |
|-----|-----------------------------------------------------------------------------------------------------------|

|                       |   | For the six-month periodsended June 30,                                              |   | For the three-month periodsended June 30,                 |
|----------------------------|--------|--------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|
|                       |   | 2011                                                                                 |   | 2010                                                      |   | 2011 |   | 2010 |
|                       |   |                                                                                 |   |                                                      |   |   |   |   |
| Interest rate contracts    |   | $             8,085 |   | $        (78,669) |   | $           17,007 |   | $         (36,225) |
| Foreign currency contracts |   | (4,289)                                                                              |   | (5,425)                                                   |   | (1,666) |   | (1,966) |
| Equity contracts           |   | (4,166)                                                                              |   | (14,012)                                                  |   | (14,670) |   | (8,783) |
| Credit contracts           |   | 4,778                                                                           |   | 623                                                  |   | 1,283 |   | 886  |
| Futures contracts          |   | (113,701)                                                                            |   | 140,402                                              |   | 7,178 |   | 212,177  |
| Embedded derivatives       |   | 1,294                                                                           |   | (610,084)                                                 |   | (144,902) |   | (691,804) |
| Net derivative loss        |   | $      (107,999)                                       |   | $      (567,165)            |   | $       (135,770) |   | $       (525,715) |

----

----

|                                                                 | June 30, |      | December 31, |
|----------------------------------------------------------------------|----------|-----------|--------------|
|                                                                 | 2011     |      | 2010         |
| AssetsReinsurance receivable                                         | $        | 1,325,155 |         | $ | 1,466,247 |
|                                                                 |     |      |         |   |   |
| LiabilitiesContractholder deposit funds and other policy liabilities |     | 1,348,846 |         |   | 1,478,459 |
| Future contract and policy benefits                                  |     | 1,823     |         |   | 1,823 |
| Reinsurance payable                                                  |     | 1,410,618 |         |   | 1,555,336 |

----

|                                                                 | June 30, |    | December 31, |
|----------------------------------------------------------------------|----------|---------|--------------|
|                                                                 | 2011     |    | 2010         |
| AssetsReinsurance receivable                                         | $        | 453,953 |         | $ | 419,684 |
|                                                                 |     |    |         |   |   |
| LiabilitiesContractholder deposit funds and other policy liabilities |     | 493,292 |         |   | 465,035 |
| Reinsurance payable                                                  |     | 464,753 |         |   | 432,160 |

----

|                                                                 | June 30, |    | December 31, |
|----------------------------------------------------------------------|----------|---------|--------------|
|                                                                 | 2011     |    | 2010         |
| AssetsReinsurance receivable                                         | $        | 144,895 |         | $ | 133,088 |
|                                                                 |     |    |         |   |   |
| LiabilitiesContractholder deposit funds and other policy liabilities |     | 109,664 |         |   | 104,795 |
| Future contract and policy benefits                                  |     | 21,463  |         |   | 21,662 |
| Reinsurance payable                                                  |     | 236,949 |         |   | 225,387 |

----

----

| Benefit Type                      | Account Balance                                                                                          | Net Amountat Risk 1                                                                                     | AverageAttained Age |
|-----------------------------------|----------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|---------------------|
| Minimum death                     | $           21,247,973                            | $           1,558,058                            | 66.5                |
| Minimum income                    | $                165,929 | $                49,276 | 62.4                |
| Minimum accumulation orwithdrawal | $           13,641,410                            | $              133,017            | 63.9                |

| Benefit Type                      | Account Balance                                                                                          | Net Amountat Risk 1                                                                                     | AverageAttained Age |
|-----------------------------------|----------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|---------------------|
| Minimum death                     | $           20,061,043                            | $           1,742,139                            | 66.0           |
| Minimum income                    | $                179,878 | $                59,322 | 62.2           |
| Minimum accumulation orwithdrawal | $           12,233,731                            | $              152,571            | 63.2           |

|                                     | GuaranteedMinimumDeath Benefit                                                                     |   | GuaranteedMinimumIncome Benefit                                                       |   |   Total                                              |
|------------------------------------------|----------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|
| Balance at December 31, 2010             | $             123,605        |   | $           14,630        |   | $        138,235  |
|                                     |                                                                                               |   |                                                                                  |   |                                                           |
| Benefit ratio change /Assumption changes | (319)                                                                                              |   | (1,748)                                                                               |   | (2,067)                                                        |
| Incurred guaranteed benefits             | 10,056                                                                                        |   | 588                                                                              |   | 10,644                                                    |
| Paid guaranteed benefits                 | (18,688)                                                                                           |   | (604)                                                                                 |   | (19,292)                                                       |
| Interest                                 | 4,182                                                                                         |   | 454                                                                              |   | 4,636                                                     |
|                                     |                                                                                               |   |                                                                                  |   |                                                           |
| Balance at June 30, 2011                 | $              118,836  |   | $            13,320  |   | $        132,156  |

----

|                                     | GuaranteedMinimumDeath Benefit                                                                                      |   | GuaranteedMinimumIncome Benefit                                                       |   |   Total                                                          |
|------------------------------------------|---------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|
| Balance at December 31, 2009             | $                 96,267  |   | $             10,058 |   | $          106,325  |
|                                     |                                                                                                                |   |                                                                                  |   |                                                                       |
| Benefit ratio change /Assumption changes |  15,471                                                                                                   |   | 2,651                                                                            |   | 18,122                                                                |
| Incurred guaranteed benefits             | 4,536                                                                                                          |   | 755                                                                              |   |    5,291                                               |
| Paid guaranteed benefits                 |  (16,678)                                                                                                      |   |  (1,997)                                                                         |   |   (18,675)                                                       |
| Interest                                 | 13,687                                                                                                         |   |   336                                                                  |   |   14,023                                                    |
|                                     |                                                                                                                |   |                                                                                  |   |                                                                       |
| Balance at June 30, 2010                 | $               113,283             |   | $            11,803  |   | $          125,086       |

----

----

|                                                                                                                        | SLUSas Parent |          | SLNY   |   | OtherSubs     |   | Elimination |        | ConsolidatedCompany |
|-----------------------------------------------------------------------------------------------------------------------------|---------------|---------------|--------|--------|---------------|--------|-------------|-------------|---------------------|
|                                                                                                                        |          |          |   |   |          |   |        |        |                |   |   |   |   |   |
| Revenues                                                                                                                    |          |          |   |   |          |   |        |        |                |   |   |   |   |   |
|                                                                                                                        |          |          |   |   |          |   |        |        |                |   |   |   |   |   |
| Premiums and annuity considerations                                                                                         | $             | 11,645   |   | $      | 58,902   |   | $           | -      |                | $ | -  |   | $ | 70,547  |
| Net investment income (1)                                                                                                   |          | 477,741  |   |   | 57,016   |   |        | 1,973  |                |   | -  |   |   | 536,730  |
| Net derivative (loss) income                                                                                                |          | (110,048)     |   |   | 2,049    |   |        | -      |                |   | -  |   |   | (107,999) |
| Net realized investment gains (losses), excluding    impairment losses on available-for-sale securities |          | 24,541   |   |   | (1,383)       |   |        | (84)        |                |   | -  |   |   | 23,074  |
| Other-than-temporary impairment losses                                                                                      |          | (71)          |   |   | -        |   |        | -      |                |   | -  |   |   | (71) |
| Fee and other income                                                                                                        |          | 282,079  |   |   | 16,415   |   |        | 6,679  |                |   | -  |   |   | 305,173  |
|                                                                                                                        |          |          |   |   |          |   |        |        |                |   |   |   |   |   |
| Total revenues                                                                                                              |          | 685,887  |   |   | 132,999  |   |        | 8,568  |                |   | -  |   |   | 827,454  |
|                                                                                                                        |          |          |   |   |          |   |        |        |                |   |   |   |   |   |
| Benefits and Expenses                                                                                                       |          |          |   |   |          |   |        |        |                |   |   |   |   |   |
|                                                                                                                        |          |          |   |   |          |   |        |        |                |   |   |   |   |   |
| Interest credited                                                                                                           |          | 157,021  |   |   | 26,611   |   |        | 523    |                |   | -  |   |   | 184,155  |
| Interest expense                                                                                                            |          | 22,601   |   |   | -        |   |        | -      |                |   | -  |   |   | 22,601  |
| Policyowner benefits                                                                                                        |          | 37,002   |   |   | 42,327   |   |        | 162    |                |   | -  |   |   | 79,491  |
| Amortization of DAC, VOBA and VOCRA                                                                                         |          | 227,933  |   |   | 9,532    |   |        | -      |                |   | -  |   |   | 237,465  |
| Other operating expenses                                                                                                    |          | 146,453  |   |   | 23,284   |   |        | 6,457  |                |   | -  |   |   | 176,194  |
|                                                                                                                        |          |          |   |   |          |   |        |        |                |   |   |   |   |   |
| Total benefits and expenses                                                                                                 |          | 591,010  |   |   | 101,754  |   |        | 7,142  |                |   | -  |   |   | 699,906  |
|                                                                                                                        |          |          |   |   |          |   |        |        |                |   |   |   |   |   |
| Income before income tax expense                                                                                            |          | 94,877   |   |   | 31,245   |   |        | 1,426  |                |   | -  |   |   | 127,548  |
|                                                                                                                        |          |          |   |   |          |   |        |        |                |   |   |   |   |   |
| Income tax expense                                                                                                          |          | 24,730   |   |   | 10,593   |   |        | 426    |                |   | -  |   |   | 35,749  |
| Equity in the net income of subsidiaries                                                                                    |          | 21,652   |   |   | -        |   |        | -      |                |   | (21,652) |   |   | -  |
|                                                                                                                        |          |          |   |   |          |   |        |        |                |   |   |   |   |   |
| Net income                                                                                                                  | $             | 91,799   |   | $      | 20,652   |   | $           | 1,000  |                | $ | (21,652) |   | $ | 91,799  |

| (1) | SLUS as Parent, SLNY’s and Other Subs’ net investment income includes an increase in market value of trading fixed maturity securities of $196.7 million, $13.9 million and $0.0 million, respectively, for the six-month period ended June 30, 2011. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                | SLUSas Parent |                  | SLNY   |   | OtherSubs     |   | Elimination |        | ConsolidatedCompany |
|-----------------------------------------------------------------------------------------------------|---------------|-----------------------|--------|--------|---------------|--------|-------------|-------------|---------------------|
|                                                                                                |          |                  |   |   |          |   |        |        |                |   |   |   |   |   |
| Revenues                                                                                            |          |                  |   |   |          |   |        |        |                |   |   |   |   |   |
|                                                                                                |          |                  |   |   |          |   |        |        |                |   |   |   |   |   |
| Premiums and annuity considerations                                                                 | $             | 8,307            |   | $      | 59,935   |   | $           | -      |                | $ | -  |   | $ | 68,242  |
| Net investment income (1)                                                                           |          | 771,636          |   |   | 78,304   |   |        | 1,507  |                |   | -  |   |   | 851,447  |
| Net derivative loss                                                                                 |          | (520,184)             |   |   | (46,981)      |   |        | -      |                |   | -  |   |   | (567,165) |
| Net realized investment gains (losses), excludingimpairment losses on available-for-sale securities |          | 16,382           |   |   | 600      |   |        | (643)       |                |   | -  |   |   | 16,339  |
| Other-than-temporary impairment losses                                                              |          | (735)                 |   |   | (150)         |   |        | -      |                |   | -  |   |   | (885) |
| Fee and other income                                                                                |          | 218,342          |   |   | 13,499   |   |        | 4,387  |                |   | -  |   |   | 236,228  |
|                                                                                                |          |                  |   |   |          |   |        |        |                |   |   |   |   |   |
| Total revenues                                                                                      |          | 493,748          |   |   | 105,207  |   |        | 5,251  |                |   | -  |   |   | 604,206  |
|                                                                                                |          |                  |   |   |          |   |        |        |                |   |   |   |   |   |
| Benefits and Expenses                                                                               |          |                  |   |   |          |   |        |        |                |   |   |   |   |   |
|                                                                                                |          |                  |   |   |          |   |        |        |                |   |   |   |   |   |
| Interest credited                                                                                   |          | 151,353          |   |   | 25,011   |   |        | 447    |                |   | -  |   |   | 176,811  |
| Interest expense                                                                                    |          | 26,495           |   |   | (43)          |   |        | -      |                |   | -  |   |   | 26,452  |
| Policyowner benefits                                                                                |          | 71,083           |   |   | 45,374   |   |        | 120    |                |   | -  |   |   | 116,577  |
| Amortization of DAC, VOBA and VOCRA                                                                 |          |  (294,707)  |   |   | 41,475   |   |        | -      |                |   | -  |   |   | (253,232) |
| Other operating expenses                                                                            |          | 136,147          |   |   | 19,509   |   |        | 4,137  |                |   | -  |   |   | 159,793  |
|                                                                                                |          |                  |   |   |          |   |        |        |                |   |   |   |   |   |
| Total benefits and expenses                                                                         |          | 90,371           |   |   | 131,326  |   |        | 4,704  |                |   | -  |   |   | 226,401 |
|                                                                                                |          |                  |   |   |          |   |        |        |                |   |   |   |   |   |
| Income (loss) before income tax expense (benefit)                                                   |          | 403,377          |   |   | (26,119)      |   |        | 547    |                |   | -  |   |   | 377,805  |
|                                                                                                |          |                  |   |   |          |   |        |        |                |   |   |   |   |   |
| Income tax expense (benefit)                                                                        |          | 130,618          |   |   | (9,411)       |   |        | 147    |                |   | -  |   |   | 121,354  |
| Equity in the net loss of subsidiaries                                                              |          | (16,308)              |   |   | -        |   |        | -      |                |   | 16,308  |   |   | -  |
|                                                                                                |          |                  |   |   |          |   |        |        |                |   |   |   |   |   |
| Net income (loss)                                                                                   | $             | 256,451               |   | $      | (16,708)      |   | $           | 400    |                | $ | 16,308  |   | $ | 256,451  |

|   | (1) | SLUS as Parent, SLNY’s and Other Subs’ net investment income includes an increase in market value of trading fixed maturity securities of $415.0 million, $34.9 million and $0.0 million, respectively, for the six-month period ended June 30, 2010. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                | SLUSas Parent |          |  SLNY |   | OtherSubs    |   |  Elimination |        | ConsolidatedCompany |
|-----------------------------------------------------------------------------------------------------|---------------|---------------|------------|--------|--------------|--------|-------------------|-------------|---------------------|
|                                                                                                |          |          |       |   |         |   |              |        |                |   |   |   |   |   |
| Revenues                                                                                            |          |          |       |   |         |   |              |        |                |   |   |   |   |   |
|                                                                                                |          |          |       |   |         |   |              |        |                |   |   |   |   |   |
| Premiums and annuity considerations                                                                 | $             | 6,641    |       | $      | 29,629  |   | $                 | -      |                | $ | -  |   | $ | 36,270  |
| Net investment income (1)                                                                           |          | 209,643  |       |   | 33,594  |   |              | 1,495  |                |   | -  |   |   | 244,732  |
| Net derivative loss                                                                                 |          | (122,639)     |       |   | (13,130)     |   |              | -      |                |   | -  |   |   | (135,769) |
| Net realized investment gains (losses), excludingimpairment losses on available-for-sale securities |          | 20,091   |       |   | (930)        |   |              | (170)       |                |   | -  |   |   | 18,991  |
| Other-than-temporary impairment losses                                                              |          | -        |       |   | -       |   |              | -      |                |   | -  |   |   | -  |
| Fee and other income                                                                                |          | 143,766  |       |   | 9,941   |   |              | 3,445  |                |   | -  |   |   | 157,152  |
|                                                                                                |          |          |       |   |         |   |              |        |                |   |   |   |   |   |
| Total revenues                                                                                      |          | 257,502  |       |   | 59,104  |   |              | 4,770  |                |   | -  |   |   | 321,376  |
|                                                                                                |          |          |       |   |         |   |              |        |                |   |   |   |   |   |
| Benefits and Expenses                                                                               |          |          |       |   |         |   |              |        |                |   |   |   |   |   |
|                                                                                                |          |          |       |   |         |   |              |        |                |   |   |   |   |   |
| Interest credited                                                                                   |          | 82,569   |       |   | 13,421  |   |              | 289    |                |   | -  |   |   | 96,279  |
| Interest expense                                                                                    |          | 11,509   |       |   | -       |   |              | -      |                |   | -  |   |   | 11,509  |
| Policyowner benefits                                                                                |          | 15,608   |       |   | 18,809  |   |              | 107    |                |   | -  |   |   | 34,524  |
| Amortization of DAC, VOBA and VOCRA                                                                 |          | (10,769)      |       |   | 120     |   |              | -      |                |   | -  |   |   | (10,649) |
| Other operating expenses                                                                            |          | 71,807   |       |   | 11,568  |   |              | 3,334  |                |   | -  |   |   | 86,709  |
|                                                                                                |          |          |       |   |         |   |              |        |                |   | -  |   |   |   |
| Total benefits and expenses                                                                         |          | 170,724  |       |   | 43,918  |   |              | 3,730  |                |   | -  |   |   | 218,372  |
|                                                                                                |          |          |       |   |         |   |              |        |                |   |   |   |   |   |
| Income before income tax expense                                                                    |          | 86,778   |       |   | 15,186  |   |              | 1,040  |                |   | -  |   |   | 103,004  |
|                                                                                                |          |          |       |   |         |   |              |        |                |   |   |   |   |   |
| Income tax expense                                                                                  |          | 26,196   |       |   | 5,140   |   |              | 254    |                |   | -  |   |   | 31,590  |
| Equity in the net income of subsidiaries                                                            |          | 10,832   |       |   | -       |   |              | -      |                |   | (10,832) |   |   | -  |
|                                                                                                |          |          |       |   |         |   |              |        |                |   |   |   |   |   |
| Net income                                                                                          | $             | 71,414   |       | $      | 10,046  |   | $                 | 786    |                | $ | (10,832) |   | $ | 71,414  |

|   | (1)SLUS as parent, SLNY’s and Other Subs’ net investment income includes an increase in market value of trading fixed maturity securities of $74.4 million, $14.8 million and $0.0 million, respectively, for the three-month period ended June 30, 2011. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                | SLUSas Parent |          |  SLNY |   | OtherSubs            |   |  Elimination |              | ConsolidatedCompany |
|-----------------------------------------------------------------------------------------------------|---------------|---------------|------------|--------|----------------------|--------|-------------------|-------------------|---------------------|
|                                                                                                |          |          |       |   |                 |   |              |              |                |   |   |   |   |   |
| Revenues                                                                                            |          |          |       |   |                 |   |              |              |                |   |   |   |   |   |
|                                                                                                |          |          |       |   |                 |   |              |              |                |   |   |   |   |   |
| Premiums and annuity considerations                                                                 | $             | 3,216    |       | $      | 29,962          |   | $                 | -            |                | $ | -  |   | $ | 33,178  |
| Net investment income (1)                                                                           |          | 367,226  |       |   | 40,005          |   |              | 387          |                |   | -  |   |   | 407,618  |
| Net derivative loss                                                                                 |          | (472,235)     |       |   | (53,480)        |   |              | -            |                |   | -  |   |   | (525,715) |
| Net realized investment gains (losses), excludingimpairment losses on available-for-sale securities |          | 12,012   |       |   | 204             |   |              | (1,042)      |                |   | -  |   |   | 11,174  |
| Other-than-temporary impairment losses                                                              |          | -        |       |   | -               |   |              | -            |                |   | -  |   |   | -  |
| Fee and other income                                                                                |          | 109,625  |       |   | 8,492           |   |              | 2,358        |                |   | -  |   |   | 120,475  |
|                                                                                                |          |          |       |   |                 |   |              |              |                |   |   |   |   |   |
| Total revenues                                                                                      |          | 19,844   |       |   | 25,183          |   |              | 1,703        |                |   | -  |   |   | 46,730  |
|                                                                                                |          |          |       |   |                 |   |              |              |                |   |   |   |   |   |
| Benefits and Expenses                                                                               |          |          |       |   |                 |   |              |              |                |   |   |   |   |   |
|                                                                                                |          |          |       |   |                 |   |              |              |                |   |   |   |   |   |
| Interest credited                                                                                   |          | 74,697   |       |   | 12,478          |   |              | 253          |                |   | -  |   |   | 87,428  |
| Interest expense                                                                                    |          | 9,383    |       |   | (28)            |   |              | -            |                |   | -  |   |   | 9,355  |
| Policyowner benefits                                                                                |          | 60,497   |       |   | 21,390          |   |              | 87           |                |   | -  |   |   | 81,974  |
| Amortization of DAC, VOBA and VOCRA                                                                 |          | (430,028)     |       |   | 5,087           |   |              | -            |                |   | -  |   |   | (424,941) |
| Other operating expenses                                                                            |          | 66,161   |       |   | 10,527          |   |              | 2,195        |                |   | -  |   |   | 78,883  |
|                                                                                                |          |          |       |   |                 |   |              |              |                |   |   |   |   |   |
| Total benefits and expenses                                                                         |          | (219,290)     |       |   | 49,454          |   |              | 2,535        |                |   | -  |   |   | (167,301) |
|                                                                                                |          |          |       |   |                 |   |              |              |                |   |   |   |   |   |
| Income (loss) before income tax expense (benefit)                                                   |          | 239,134  |       |   | (24,271)        |   |              | (832)        |                |   | -  |   |   | 214,031  |
|                                                                                                |          |          |       |   |                 |   |              |              |                |   |   |   |   |   |
| Income tax expense (benefit)                                                                        |          | 78,133   |       |   | (8,628)         |   |              | (274)        |                |   | -  |   |   | 69,231  |
| Equity in the net loss of subsidiaries                                                              |          | (16,201)      |       |   | -               |   |              | -            |                |   | 16,201  |   |   | -  |
|                                                                                                |          |          |       |   |                 |   |              |              |                |   |   |   |   |   |
| Net income (loss)                                                                                   | $             | 144,800  |       | $      |  (15,643)  |   | $                 |  (558)  |                | $ | 16,201  |   | $ | 144,800  |

|   | (1)SLUS as parent, SLNY’s and Other Subs’ net investment income includes an increase in market value of trading fixed maturity securities of $161.7 million, $17.8 million and $0.0 million, respectively, for the three-month period ended June 30, 2010. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                         | SLUSas Parent |       |  SLNY |   | OtherSubs |   |  Elimination |    | ConsolidatedCompany |
|--------------------------------------------------------------|---------------|------------|------------|--------|-----------|--------|-------------------|---------|---------------------|
| ASSETS                                                       |          |       |       |   |      |   |              |    |                |   |   |   |   |   |
|                                                         |          |       |       |   |      |   |              |    |                |   |   |   |   |   |
| Investments                                                  |          |       |       |   |      |   |              |    |                |   |   |   |   |   |
| Available-for-sale fixed maturity securities at fair value   | $             | 1,328,010  |       | $      | 254,261   |   | $                 | 60,660  |                | $ | - |   | $ | 1,642,931 |
| Trading fixed maturity securities at fair value              |          | 9,178,799  |       |   | 1,549,535 |   |              | -       |                |   | - |   |   | 10,728,334 |
| Mortgage loans                                               |          | 1,409,766  |       |   | 164,645   |   |              | 31,509  |                |   | - |   |   | 1,605,920 |
| Derivative instruments – receivable                    |          | 220,844    |       |   | -         |   |              | -       |                |   | - |   |   | 220,844 |
| Limited partnerships                                         |          | 39,286     |       |   | -         |   |              | -       |                |   | - |   |   | 39,286 |
| Real estate                                                  |          | 190,848    |       |   | -         |   |              | 31,915  |                |   | - |   |   | 222,763 |
| Policy loans                                                 |          | 585,517    |       |   | 1,010     |   |              | 20,819  |                |   | - |   |   | 607,346 |
| Other invested assets                                        |          | 32,456     |       |   | 7,336     |   |              | 1,877   |                |   | - |   |   | 41,669 |
| Short-term investments                                       |          | 12,997     |       |   | -         |   |              | -       |                |   | - |   |   | 12,997 |
| Cash and cash equivalents                                    |          | 1,861,118  |       |   | 102,129   |   |              | 14,878  |                |   | - |   |   | 1,978,125 |
| Investment in subsidiaries                                   |          | 577,805    |       |   | -         |   |              | -       |                |   | (577,805) |   |   | - |
| Total investments and cash                                   |          | 15,437,446 |       |   | 2,078,916 |   |              | 161,658 |                |   | (577,805) |   |   | 17,100,215 |
|                                                         |          |       |       |   |      |   |              |    |                |   |   |   |   |   |
| Accrued investment income                                    |          | 160,177    |       |   | 21,388    |   |              | 1,398   |                |   | - |   |   | 182,963 |
| Deferred policy acquisition costs and sales inducement asset |          | 1,484,823  |       |   | 111,006   |   |              | -       |                |   | - |   |   | 1,595,829 |
| Value of business and customer renewals acquired             |          | 99,059     |       |   | 3,895     |   |              | -       |                |   | - |   |   | 102,954 |
| Net deferred tax asset                                       |          | 318,264    |       |   | 6,988     |   |              | 3,585   |                |   | - |   |   | 328,837 |
| Goodwill                                                     |          | -          |       |   | 7,299     |   |              | -       |                |   | - |   |   | 7,299 |
| Receivable for investments sold                              |          | 5,474      |       |   | 2,213     |   |              | -       |                |   | - |   |   | 7,687 |
| Reinsurance receivable                                       |          | 2,077,247  |       |   | 158,428   |   |              | 94      |                |   | - |   |   | 2,235,769 |
| Other assets                                                 |          | 107,765    |       |   | 34,553    |   |              | 1,226   |                |   | (1,106) |   |   | 142,438 |
| Separate account assets                                      |          | 26,881,371 |       |   | 1,378,582 |   |              | 41,319  |                |   | - |   |   | 28,301,272 |
|                                                         |          |       |       |   |      |   |              |    |                |   |   |   |   |   |
| Total assets                                                 | $             | 46,571,626 |       | $      | 3,803,266 |   | $                 | 209,280 |                | $ | (578,911) |   | $ | 50,005,263 |
|                                                         |          |       |       |   |      |   |              |    |                |   |   |   |   |   |
| LIABILITIES                                                  |          |       |       |   |      |   |              |    |                |   |   |   |   |   |
|                                                         |          |       |       |   |      |   |              |    |                |   |   |   |   |   |
| Contractholder deposit funds and other policy liabilities    | $             | 12,466,431 |       | $      | 1,536,963 |   | $                 | 24,483  |                | $ | - |   | $ | 14,027,877 |
| Future contract and policy benefits                          |          | 710,952    |       |   | 120,667   |   |              | 278     |                |   | - |   |   | 831,897 |
| Payable for investments purchased                            |          | 38,964     |       |   | 4,440     |   |              | -  |                |   | - |   |   | 43,404 |
| Accrued expenses and taxes                                   |          | 40,253     |       |   | 5,442     |   |              | 1,434   |                |   | (1,106) |   |   | 46,023 |
| Debt payable to affiliates                                   |          | 783,000    |       |   | -    |   |              | -  |                |   | - |   |   | 783,000 |
| Reinsurance payable                                          |          | 1,883,098  |       |   | 248,381   |   |              | 35      |                |   | - |   |   | 2,131,514 |
| Derivative instruments – payable                       |          | 335,495    |       |   | -    |   |              | -  |                |   | - |   |   | 335,495 |
| Other liabilities                                            |          | 197,007    |       |   | 58,656    |   |              | 14,063  |                |   | - |   |   | 269,726 |
| Separate account liabilities                                 |          | 26,881,371 |       |   | 1,378,582 |   |              | 41,319  |                |   | - |   |   | 28,301,272 |
|                                                         |          |       |       |   |      |   |              |    |                |   |   |   |   |   |
| Total liabilities                                            | $             | 43,336,571 |       | $      | 3,353,131 |   | $                 | 81,612  |                | $ | (1,106) |   | $ | 46,770,208 |
|                                                         |          |       |       |   |      |   |              |    |                |   |   |   |   |   |
| STOCKHOLDER’S EQUITY                                   |          |       |       |   |      |   |              |    |                |   |   |   |   |   |
|                                                         |          |       |       |   |      |   |              |    |                |   |   |   |   |   |
| Common stock                                                 | $             | 6,437      |       | $      | 2,100     |   | $                 | 2,542   |                | $ | (4,642) |   | $ | 6,437 |
| Additional paid-in capital                                   |          | 3,929,192  |       |   | 389,963   |   |              | 104,489 |                |   | (494,452) |   |   | 3,929,192 |
| Accumulated other comprehensive income                       |          | 36,259     |       |   | 3,035     |   |              | 2,199   |                |   | (5,234) |   |   | 36,259 |
| (Accumulated deficit) retained earnings                      |          | (736,833)  |       |   | 55,039    |   |              | 18,438  |                |   | (73,477) |   |   | (736,833) |
|                                                         |          |       |       |   |      |   |              |    |                |   |   |   |   |   |
| Total stockholder’s equity                             |          | 3,235,055  |       |   | 450,137   |   |              | 127,668 |                |   | (577,805) |   |   | 3,235,055 |
|                                                         |          |       |       |   |      |   |              |    |                |   |   |   |   |   |
| Total liabilities and stockholder’s equity             | $             | 46,571,626 |       | $      | 3,803,268 |   | $                 | 209,280 |                | $ | (578,911) |   | $ | 50,005,263 |

----

|                                                         | SLUSas Parent |                |  SLNY |   | OtherSubs             |   |  Elimination |              | ConsolidatedCompany |
|--------------------------------------------------------------|---------------|---------------------|------------|--------|-----------------------|--------|-------------------|-------------------|---------------------|
| ASSETS                                                       |          |                |       |   |                  |   |              |              |                |   |   |   |   |   |
|                                                         |          |                |       |   |                  |   |              |              |                |   |   |   |   |   |
| Investments                                                  |          |                |       |   |                  |   |              |              |                |   |   |   |   |   |
| Available-for-sale fixed maturity securities at fair value   | $             | 1,193,875      |       | $      | 246,944          |   | $                 | 55,104       |                | $ | -  |   | $ | 1,495,923  |
| Trading fixed maturity securities at fair value              |          | 9,911,284      |       |   | 1,555,834        |   |              | -            |                |   | -  |   |   | 11,467,118  |
| Mortgage loans                                               |          | 1,531,545      |       |   | 176,518          |   |              | 29,465       |                |   | -  |   |   | 1,737,528  |
| Derivative instruments – receivable                    |          |  198,064  |       |   |  -          |   |              | -            |                |   | -  |   |   | 198,064  |
| Limited partnerships                                         |          |  41,622   |       |   |  -          |   |              | -            |                |   | -  |   |   | 41,622  |
| Real estate                                                  |          |  161,800  |       |   |  -          |   |              | 52,865       |                |   | -  |   |   | 214,665  |
| Policy loans                                                 |          |  695,607  |       |   | 1,217            |   |              | 20,584       |                |   | -  |   |   | 717,408  |
| Other invested assets                                        |          |  19,588   |       |   | 7,868            |   |              | -            |                |   | -  |   |   | 27,456  |
| Short-term investments                                       |          |  813,745  |       |   | 18,994           |   |              | -            |                |   | -  |   |   | 832,739  |
| Cash and cash equivalents                                    |          | 647,579        |       |   | 72,978           |   |              | 15,766            |                |   | -  |   |   | 736,323  |
| Investment in subsidiaries                                   |          | 559,344        |       |   | -                |   |              | -            |                |   | (559,344) |   |   | -  |
| Total investments and cash                                   |          | 15,774,053     |       |   | 2,080,353        |   |              | 173,784      |                |   | (559,344) |   |   | 17,468,846  |
|                                                         |          |                |       |   |                  |   |              |              |                |   |   |   |   |   |
| Accrued investment income                                    |          | 165,841        |       |   | 21,130           |   |              |  1,815  |                |   | -  |   |   | 188,786  |
| Deferred policy acquisition costs and sales inducement asset |          | 1,571,768      |       |   | 110,791          |   |              | -            |                |   | -  |   |   |  1,682,559  |
| Value of business and customer renewals acquired             |          | 130,546        |       |   | 4,439            |   |              | -            |                |   | -  |   |   | 134,985  |
| Net deferred tax asset                                       |          | 378,078        |       |   | 12,057           |   |              |  4,162  |                |   | -  |   |   | 394,297  |
| Goodwill                                                     |          | -              |       |   | 7,299            |   |              | -            |                |   | -  |   |   |  7,299  |
| Receivable for investments sold                              |          | 5,166          |       |   | 162              |   |              | -            |                |   | -  |   |   |  5,328  |
| Reinsurance receivable                                       |          | 2,184,487      |       |   | 162,522          |   |              | 77           |                |   | -  |   |   |  2,347,086  |
| Other assets                                                 |          | 93,755         |       |   | 31,729           |   |              |  2,918  |                |   | (2,873) |   |   | 125,529  |
| Separate account assets                                      |          | 25,573,382     |       |   |  1,265,464  |   |              | 41,575       |                |   | -  |   |   |  26,880,421  |
|                                                         |          |                |       |   |                  |   |              |              |                |   |   |   |   |   |
| Total assets                                                 | $             | 45,877,076     |       | $      | 3,695,946        |   | $                 | 224,331      |                | $ | (562,217) |   | $ | 49,235,136  |
|                                                         |          |                |       |   |                  |   |              |              |                |   |   |   |   |   |
| LIABILITIES                                                  |          |                |       |   |                  |   |              |              |                |   |   |   |   |   |
|                                                         |          |                |       |   |                  |   |              |              |                |   |   |   |   |   |
| Contractholder deposit funds and other policy liabilities    | $             | 12,991,306     |       | $      | 1,577,556        |   | $                 | 24,366       |                | $ | -  |   | $ |  14,593,228  |
| Future contract and policy benefits                          |          |  732,368  |       |   | 116,946          |   |              | 200          |                |   | -  |   |   | 849,514  |
| Payable for investments purchased                            |          |  44,723   |       |   | 104              |   |              | -            |                |   | -  |   |   | 44,827  |
| Accrued expenses and taxes                                   |          |  49,224   |       |   | 4,612            |   |              |  1,665  |                |   | (2,873) |   |   | 52,628  |
| Debt payable to affiliates                                   |          |  783,000  |       |   |  -          |   |              | -            |                |   | -  |   |   | 783,000  |
| Reinsurance payable                                          |          | 1,995,083      |       |   | 236,718          |   |              | 34           |                |   | -  |   |   |  2,231,835  |
| Derivative instruments – payable                       |          |  362,023  |       |   |  -          |   |              | -            |                |   | -  |   |   | 362,023  |
| Other liabilities                                            |          |  193,363  |       |   | 66,118           |   |              | 25,575       |                |   | -  |   |   | 285,056  |
| Separate account liabilities                                 |          | 25,573,382     |       |   |  1,265,464  |   |              | 41,575       |                |   | -  |   |   |  26,880,421  |
|                                                         |          |                |       |   |                  |   |              |              |                |   |   |   |   |   |
| Total liabilities                                            | $             | 42,724,472     |       | $      | 3,267,518        |   | $                 | 93,415       |                | $ | (2,873) |   | $ | 46,082,532  |
|                                                         |          |                |       |   |                  |   |              |              |                |   |   |   |   |   |
| STOCKHOLDER’S EQUITY                                   |          |                |       |   |                  |   |              |              |                |   |   |   |   |   |
|                                                         |          |                |       |   |                  |   |              |              |                |   |   |   |   |   |
| Common stock                                                 | $             | 6,437          |       | $      | 2,100            |   | $                 |  2,542  |                | $ | (4,642) |   | $ |  6,437  |
| Additional paid-in capital                                   |          | 3,928,246      |       |   | 389,963          |   |              | 108,450      |                |   | (498,413) |   |   |  3,928,246  |
| Accumulated other comprehensive income                       |          |  46,553   |       |   | 1,977            |   |              |  1,707  |                |   | (3,684) |   |   | 46,553  |
| (Accumulated deficit) retained earnings                      |          | (828,632)           |       |   | 34,388           |   |              | 18,217       |                |   | (52,605) |   |   |  (828,632) |
|                                                         |          |                |       |   |                  |   |              |              |                |   |   |   |   |   |
| Total stockholder’s equity                             |          | 3,152,604      |       |   | 428,428          |   |              | 130,916      |                |   | (559,344) |   |   | 3,152,604  |
|                                                         |          |                |       |   |                  |   |              |              |                |   |   |   |   |   |
| Total liabilities and stockholder’s equity             | $             | 45,877,076     |       | $      | 3,695,946        |   | $                 | 224,331      |                | $ | (562,217) |   | $ | 49,235,136  |

----

|                                                                                                                                            | SLUSas Parent |            |  SLNY |   | OtherSubs     |   |  Elimination |         | ConsolidatedCompany |
|-------------------------------------------------------------------------------------------------------------------------------------------------|---------------|-----------------|------------|--------|---------------|--------|-------------------|--------------|---------------------|
|                                                                                                                                            |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Cash Flows From Operating Activities:                                                                                                           |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Net income                                                                                                                                      | $             | 91,799     |       | $      | 20,652   |   | $                 | 1,000   |                | $ | (21,652) |   | $ | 91,799  |
| Adjustments to reconcile net income  to net       cash provided by (used in) operating activities: |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Net amortization of premiums on investments                                                                                                     |          | 18,280     |       |   | 3,296    |   |              | 553     |                |   | -  |   |   | 22,129  |
| Amortization of DAC, VOBA and VOCRA                                                                                                             |          | 227,933    |       |   | 9,532    |   |              | -       |                |   | -  |   |   | 237,465  |
| Depreciation and amortization                                                                                                                   |          | 5,995      |       |   | 156      |   |              | 490     |                |   | -  |   |   | 6,641  |
| Net losses (gains) on derivatives                                                                                                               |          | 84,131     |       |   | (2,049)       |   |              | -       |                |   | -  |   |   | 82,082  |
| Net realized (gains) losses and OTTI credit losseson available-for-sale investments                                                             |          | (24,470)        |       |   | 1,383    |   |              | 84      |                |   | -  |   |   | (23,003) |
| Net increase in fair value of trading investments                                                                                               |          | (196,691)       |       |   | (13,909)      |   |              | -       |                |   | -  |   |   |    (210,600) |
| Net realized losses (gains) on trading investments                                                                                              |          | 11,200     |       |   | (5,101)       |   |              | -       |                |   | -  |   |   | 6,099  |
| Undistributed gains on private equity limited partnerships                                                                                      |          | (3,994)         |       |   | -             |   |              | -       |                |   | -  |   |   | (3,994) |
| Interest credited to contractholder deposits                                                                                                    |          | 157,021    |       |   | 26,611   |   |              | 523     |                |   | -  |   |   | 184,155  |
| Deferred federal income taxes                                                                                                                   |          | 66,191     |       |   | 4,499    |   |              | 313     |                |   | -  |   |   | 71,003  |
| Equity in net income of subsidiaries                                                                                                            |          | (21,652)        |       |   | -        |   |              | -       |                |   | 21,652  |   |   | -  |
| Changes in assets and liabilities:                                                                                                              |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Additions to DAC, SIA, VOBA and VOCRA                                                                                                           |          | (102,601)       |       |   | (9,204)       |   |              | -       |                |   | - |   |   | (111,805) |
| Accrued investment income                                                                                                                       |          | 5,664      |       |   | (258)         |   |              | 417     |                |   | - |   |   | 5,823  |
| Net change in reinsurance receivable/payable                                                                                                    |          | 42,315     |       |   | 18,188   |   |              | (16)         |                |   | - |   |   | 60,487  |
| Future contract and policy benefits                                                                                                             |          | (21,416)        |       |   | 3,721    |   |              | 78      |                |   | - |   |   | (17,617) |
| Other, net                                                                                                                                      |          | (12,456)        |       |   | (261)         |   |              | (10,051)     |                |   | - |   |   | (22,768) |
|                                                                                                                                            |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Net cash provided by (used in) operating activities                                                                                             |          | 327,249    |       |   | 57,256   |   |              | (6,609)      |                |   | -  |   |   | 377,896  |
|                                                                                                                                            |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Cash Flows From Investing Activities:                                                                                                           |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Sales, maturities and repayments of:                                                                                                            |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Available-for-sale fixed maturity securities                                                                                                    |          | 165,844    |       |   | 35,342   |   |              | 12,583  |                |   | -  |   |   | 213,769  |
| Trading fixed maturity securities                                                                                                               |          | 1,863,404  |       |   | 204,146  |   |              | -       |                |   | -  |   |   | 2,067,550  |
| Mortgage loans                                                                                                                                  |          | 116,163    |       |   | 11,182   |   |              | 3,039   |                |   |  (14,833) |   |   | 115,551  |
| Real estate transfer to (from) Subs                                                                                                             |          | (27,388)        |       |   | -        |   |              | 27,388  |                |   | -  |   |   | -  |
| Other invested assets (1)                                                                                                                       |          | (73,074)        |       |   | 1,444    |   |              | -       |                |   | -  |   |   | (71,630) |
| Purchases of:                                                                                                                                   |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Available-for-sale fixed maturity securities                                                                                                    |          | (292,156)       |       |   | (43,265)      |   |              | (16,764)     |                |   | -  |   |   | (352,185) |
| Trading fixed maturity securities                                                                                                               |          | (978,879)       |       |   | (178,355)     |   |              | -       |                |   | -  |   |   | (1,157,234) |
| Mortgage loans                                                                                                                                  |          | (14)            |       |   | (549)         |   |              | (13,556)     |                |   | 12,624  |   |   | (1,495) |
| Real estate                                                                                                                                     |          | (8,678)         |       |   | -        |   |              | (1,587)      |                |   | 2,209  |   |   | (8,056) |
| Other invested assets (2)                                                                                                                       |          | (44,271)        |       |   | -        |   |              | -       |                |   | -  |   |   | (44,271) |
| Net change in other investments                                                                                                                 |          | -               |       |   | -        |   |              | -       |                |   | -  |   |   | -  |
| Net change in policy loans                                                                                                                      |          | (11,248)        |       |   | 207      |   |              | (235)        |                |   | -  |   |   | (11,276) |
| Net change in short-term investments                                                                                                            |          | 800,748    |       |   | 18,994   |   |              | -       |                |   | -  |   |   | 819,742  |
|                                                                                                                                            |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Net cash provided by investing activities                                                                                                       | $             | 1,510,451  |       | $      | 49,146   |   | $                 | 10,868  |                | $ | -  |   | $ | 1,570,465  |

| (1) | SLUS as parent’s sale of other invested assets includes $(84.6) million related to settlement of derivative instruments during the six-month period ended June 30, 2011. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | SLUS as parent’s purchase of other invested assets include $43.2 million related to issuances of derivative instruments during the six-month period ended June 30, 2011. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                           | SLUSas Parent |            |  SLNY |   | OtherSubs     |   |  Elimination |         | ConsolidatedCompany |
|------------------------------------------------|---------------|-----------------|------------|--------|---------------|--------|-------------------|--------------|---------------------|
|                                           |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Cash Flows From Financing Activities:          |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Additions to contractholder deposit funds      | $             | 481,944    |       | $      | 60,849   |   | $                 | -       |                | $ | -  |   | $ | 542,793  |
| Withdrawals from contractholder deposit funds  |          | (1,102,115)     |       |   | (128,433)     |   |              | (406)        |                |   | -  |   |   | (1,230,954) |
| Additional capital contributed to subsidiaries |          | (23,888)        |       |   | -        |   |              | -       |                |   | 23,888  |   |   | -  |
| Return of capital from Subsidiaries            |          | 28,629     |       |   | -        |   |              | -       |                |   | (28,629) |   |   | -  |
| Capital contribution from Parent               |          | -          |       |   | -        |   |              | 23,888  |                |   | (23,888) |   |   | -  |
| Return of capital to Parent                    |          | -          |       |   | -        |   |              | (28,629)     |                |   | 28,629  |   |   | -  |
| Other, net                                     |          | (8,731)         |       |   | (9,667)       |   |              | -            |                |   | -  |   |   | (18,398) |
| Net cash used in financing activities          |          | (624,161)       |       |   | (77,251)      |   |              | (5,147)      |                |   | -  |   |   | (706,559) |
|                                           |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Net change in cash and cash equivalents        |          | 1,213,539  |       |   | 29,151   |   |              | (888)        |                |   | -  |   |   | 1,241,802  |
|                                           |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Cash and cash equivalents, beginning of period |          | 647,579    |       |   | 72,978   |   |              | 15,766  |                |   | -  |   |   | 736,323  |
|                                           |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Cash and cash equivalents, end of period       | $             | 1,861,118  |       | $      | 102,129  |   | $                 | 14,878  |                | $ | -  |   | $ | 1,978,125  |
|                                           |          |            |       |   |          |   |              |         |                |   |   |   |   |   |

----

|                                                                                                                                          | SLUSas Parent |                                  |  SLNY |   | OtherSubs      |   |  Elimination |                 | ConsolidatedCompany |
|-----------------------------------------------------------------------------------------------------------------------------------------------|---------------|---------------------------------------|------------|--------|----------------|--------|-------------------|----------------------|---------------------|
|                                                                                                                                          |          |                                  |       |   |           |   |              |                 |                |   |   |   |   |   |
| Cash Flows From Operating Activities:                                                                                                         |          |                                  |       |   |           |   |              |                 |                |   |   |   |   |   |
| Net income (loss)                                                                                                                             | $             | 256,451                          |       | $      | (16,708)       |   | $                 | 400             |                | $ | 16,308  |   | $ | 256,451  |
| Adjustments to reconcile net income (loss) to net         cash provided by operating activities: |          |                                  |       |   |           |   |              |                 |                |   |   |   |   |   |
| Net amortization of premiums on investments                                                                                                   |          | 8,356                            |       |   | 1,597     |   |              | 412             |                |   | -  |   |   | 10,365  |
| Amortization of DAC, VOBA and VOCRA                                                                                                           |          | (294,707)                             |       |   | 41,475    |   |              | -               |                |   | -  |   |   | (253,232) |
| Depreciation and amortization                                                                                                                 |          | 1,858                            |       |   | 156       |   |              | 416             |                |   | -  |   |   | 2,430  |
| Net losses on derivatives                                                                                                                     |          | 462,688                          |       |   | 46,981    |   |              | -               |                |   | -  |   |   | 509,669  |
| Net realized (gains) losses and OTTI credit losseson available-for-sale investments                                                           |          | (15,647)                              |       |   | (450)          |   |              | 643             |                |   | -  |   |   | (15,454) |
| Net increase in fair value of trading investments                                                                                             |          | (414,928)                             |       |   | (34,926)       |   |              | -               |                |   | -  |   |   | (449,854) |
| Net realized losses (gains) on trading investments                                                                                            |          | 37,643                           |       |   | (6,821)        |   |              | -               |                |   | -  |   |   | 30,822  |
| Undistributed loss on private equity limitedpartnerships                                                                                      |          | 492                              |       |   | -         |   |              | -               |                |   | -  |   |   | 492  |
| Interest credited to contractholder deposits                                                                                                  |          | 151,353                          |       |   | 25,011    |   |              | 447             |                |   | -  |   |   | 176,811  |
| Deferred federal income taxes                                                                                                                 |          | 152,706                          |       |   | (8,684)        |   |              | (266)                |                |   | -  |   |   | 143,756  |
| Equity in net loss of subsidiaries                                                                                                            |          | 16,308                           |       |   | -         |   |              | -               |                |   | (16,308) |   |   | -  |
| Changes in assets and liabilities:                                                                                                            |          |                                  |       |   |           |   |              |                 |                |   |   |   |   |   |
| Additions to DAC, SIA, VOBA and VOCRA                                                                                                         |          | (104,733)                             |       |   | (13,213)       |   |              | -               |                |   | -  |   |   | (117,946) |
| Accrued investment income                                                                                                                     |          | 7,446                            |       |   | (2,792)        |   |              | 69              |                |   | -  |   |   | 4,723  |
| Net change in reinsurance receivable/payable                                                                                                  |          | 32,707                           |       |   | 4,023     |   |              | 59              |                |   | -  |   |   | 36,789  |
| Future contract and policy benefits                                                                                                           |          | 6,552                            |       |   | 5,155     |   |              | -               |                |   | -  |   |   | 11,707  |
| Other, net                                                                                                                                    |          | 110,812                          |       |   | 27,657    |   |              | (441)                |                |   | -  |   |   | 138,028  |
|                                                                                                                                          |          |                                  |       |   |           |   |              |                 |                |   |   |   |   |   |
| Net cash provided by operating activities                                                                                                     |          | 415,357                          |       |   | 68,461    |   |              | 1,739           |                |   | -  |   |   | 485,557  |
|                                                                                                                                          |          |                                  |       |   |           |   |              |                 |                |   |   |   |   |   |
| Cash Flows From Investing Activities:                                                                                                         |          |                                  |       |   |           |   |              |                 |                |   |   |   |   |   |
| Sales, maturities and repayments of:                                                                                                          |          |                                  |       |   |           |   |              |                 |                |   |   |   |   |   |
| Available-for-sale fixed maturity securities                                                                                                  |          | 263,284                          |       |   | 15,673    |   |              | 5,695           |                |   | -  |   |   | 284,652  |
| Trading fixed maturity securities                                                                                                             |          | 1,085,123                        |       |   | 403,321   |   |              | -               |                |   | -  |   |   | 1,488,444  |
| Mortgage loans                                                                                                                                |          | 103,022                          |       |   | 5,428     |   |              | 178             |                |   | (16,208) |   |   | 92,420  |
| Real estate                                                                                                                                   |          | -                                |       |   | 1,000     |   |              | -               |                |   | (1,000) |   |   | -  |
| Other invested assets (1)                                                                                                                     |          | 151,609                          |       |   | 790       |   |              | 501             |                |   | -  |   |   | 152,900  |
| Purchases of:                                                                                                                                 |          |                                  |       |   |           |   |              |                 |                |   |   |   |   |   |
| Available-for-sale fixed maturity securities                                                                                                  |          | (519,345)                             |       |   | (79,282)       |   |              | (3,665)              |                |   | -  |   |   | (602,292) |
| Trading fixed maturity securities                                                                                                             |          | (2,050,758)                           |       |   | (421,351)      |   |              | -               |                |   | -  |   |   | (2,472,109) |
| Mortgage loans                                                                                                                                |          | (43)                                  |       |   | (28,440)       |   |              | (16,276)             |                |   | 16,208  |   |   | (28,551) |
| Real estate                                                                                                                                   |          | (2,627)                               |       |   | -         |   |              | (347)                |                |   | 1,000  |   |   | (1,974) |
| Other invested assets (2)                                                                                                                     |          | (27,963)                              |       |   | (292)          |   |              | -               |                |   | -  |   |   | (28,255) |
| Net change in policy loans                                                                                                                    |          | 9,680                            |       |   | (1,229)        |   |              | 305             |                |   | -  |   |   | 8,756  |
| Net change in short-term investments                                                                                                          |          | 1,133,234                        |       |   | 58,991    |   |              | -               |                |   | -  |   |   | 1,192,225  |
|                                                                                                                                          |          |                                  |       |   |           |   |              |                 |                |   |   |   |   |   |
|    Net cash provided by (used in) investing activities                                                                         | $             |     145,216  |       | $      |  (45,391) |   | $                 |   (13,609) |                | $ | -  |   | $ | 86,216 |

|   | (1) | SLUS as parent’s sale of other invested assets includes $100.5 million related to settlement of derivative instruments during the six-month period ended June 30, 2010. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | SLUS as parent’s purchase of other invested assets includes $27.4 million related to issuances of derivative instruments during the six-month period ended June 30, 2010. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                | SLUSas Parent |            |  SLNY |   | OtherSubs     |   |  Elimination |         | ConsolidatedCompany |
|-----------------------------------------------------|---------------|-----------------|------------|--------|---------------|--------|-------------------|--------------|---------------------|
|                                                |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Cash Flows From Financing Activities:               |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Additions to contractholder deposit funds           | $             | 552,828    |       | $      | 95,073   |   | $                 | -       |                | $ | -  |   | $ | 647,901  |
| Withdrawals from contractholder deposit funds       |          | (1,210,817)     |       |   | (123,089)     |   |              | (2,216)      |                |   | -  |   |   | (1,336,122) |
| Additional capital contributed to subsidiaries      |          | (17,520)        |       |   | -        |   |              | -       |                |   | 17,520  |   |   | -  |
| Capital contribution from Parent                    |          | 400,000    |       |   | -        |   |              | 17,520       |                |   | (17,520) |   |   | 400,000 |
| Other, net                                          |          | (9,086)         |       |   | (3,610)       |   |              | (65)         |                |   | -  |   |   | (12,761) |
|                                                |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Net cash (used in) provided by financing activities |          | (284,595)       |       |   | (31,626)      |   |              | 15,239  |                |   | -  |   |   | (300,982) |
|                                                |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Net change in cash and cash equivalents             |          | 275,978    |       |   | (8,556)       |   |              | 3,369   |                |   | -  |   |   | 270,791  |
|                                                |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Cash and cash equivalents, beginning of period      |          | 1,616,991  |       |   | 175,322  |   |              | 11,895  |                |   | -  |   |   | 1,804,208  |
|                                                |          |            |       |   |          |   |              |         |                |   |   |   |   |   |
| Cash and cash equivalents, end of period            | $             | 1,892,969  |       | $      | 166,766  |   | $                 | 15,264  |                | $ | -  |   | $ | 2,074,999  |

----

|   | Ø | Deferred policy acquisition costs (“DAC”), including sales inducement asset (“SIA”) |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | Ø | Value of business acquired (“VOBA”); |
|--------|--------|--------------------------------------------------|

|   | Ø | Value of customer renewals acquired (“VOCRA”); |
|--------|--------|------------------------------------------------------------|

|   | Ø | Derivative instruments; |
|--------|--------|-------------------------|

|   | Ø | Fair value of financial instruments; |
|--------|--------|--------------------------------------|

|   | Ø | Unearned revenue reserves; |
|--------|--------|----------------------------|

|   | Ø | Policy liabilities and accruals; |
|--------|--------|----------------------------------|

|   | Ø | Other-than-temporary impairments (“OTTI”) of investments; |
|--------|--------|-----------------------------------------------------------------------|

|   | Ø | Goodwill valuation; |
|--------|--------|---------------------|

|   | Ø | Allowance for loan loss; |
|--------|--------|--------------------------|

|   | Ø | Valuation allowance on deferred tax assets; and |
|--------|--------|-------------------------------------------------|

|   | Ø | Provisions for income taxes. |
|--------|--------|------------------------------|

----

----

|                       |   | 2011                                                                                 |   | 2010                                                      |
|----------------------------|--------|--------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|
|                       |   |                                                                                 |   |                                                      |
| Interest rate contracts    |   | $            8,085  |   | $        (78,669) |
| Foreign currency contracts |   | (4,289)                                                                              |   | (5,425)                                                   |
| Equity contracts           |   | (4,166)                                                                              |   | (14,012)                                                  |
| Credit contracts           |   | 4,778                                                                           |   | 623                                                  |
| Futures contracts          |   | (113,701)                                                                            |   | 140,402                                              |
| Embedded derivatives       |   | 1,294                                                                           |   | (610,084)                                                 |
| Net derivative loss        |   | $      (107,999)                                       |   | $      (567,165)            |

----

----

----

----

|                             | 2011   |    | 2010   |
|----------------------------------|--------|---------|--------|
|                             |   |    |   |   |   |
| Total revenues                   | $      | 714,899 |   | $ | 545,477  |
| Total benefits and expenses      |   | 589,961 |   |   | 126,187  |
| Income before income tax expense |   | 124,938 |   |   | 419,290  |
|                             |   |    |   |   |   |
| Net income                       | $      | 90,677  |   | $ | 282,658  |

----

----

|                                                         |  2011                                                    |   |  2010                                                                               |
|--------------------------------------------------------------|---------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|
| Total revenues                                               | $         36,976 |   | $         27,671                            |
| Total benefits and expenses                                  | 44,696                                                        |   | 26,308                                                                              |
| (Loss) income before income tax  (benefit) expense |  (7,720)                                                 |   | 1,363                                                                               |
|                                                         |                                                          |   |                                                                                     |
| Net (loss) income                                            | $        (4,901)      |   | $              971 |

----

|                                   | 2011                                                                     |   | 2010                                                         |
|----------------------------------------|--------------------------------------------------------------------------|--------|--------------------------------------------------------------|
| Total revenues                         | $        62,876             |   | $      64,576             |
| Total benefits and expenses            | 58,425                                                              |   | 61,992                                                  |
|  Income before income tax expense | 4,451                                                                    |   | 2,584                                                   |
|                                   |                                                                     |   |                                                         |
| Net income                             | $          2,909  |   | $        1,682  |

----

|                                                                           | 2011                                                                                                   |   | 2010                                                                  |
|--------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|
| Total revenues                                                                 | $              12,703            |   | $          (33,518) |
| Total benefits and expenses                                                    |        6,824                                                        |   | 11,914                                                                |
| Income (loss) before income tax expense     (benefit) | 5,879                                                                                                  |   | (45,432)                                                              |
|                                                                           |                                                                                                   |   |                                                                  |
| Net income (loss)                                                              | $                3,114 |   | $          (28,860) |

----

----

| 31.1   | Certification pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|--------|------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                         |
| 31.2   | Certification pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|   |                                                                                                                         |
| 32.1   | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-OxleyAct of 2002        |
|   |                                                                                                                         |
| 32.2   | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-OxleyAct of 2002        |

----

|   | Sun Life Assurance Company of Canada (U.S.)(Registrant) |
|--------|---------------------------------------------------------|

| August 12, 2011 | /s/ Westley V. Thompson                                                                                |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Date            | Westley V. Thompson, President, SLF U.S.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|            | (Principal Executive Officer)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

| August 12, 2011 | /s/ Ronald H. Friesen                                                                                    |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Date            | Ronald H. Friesen, Senior Vice President and Chief Financial Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|            | (Principal Financial Officer)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

----