##### Table of Contents

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



x    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES
EXCHANGE ACT OF 1934



For the quarterly period ended
June 30, 2003



OR



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



For the transition period from
 to



Commission file number 0-23375



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GE Financial Assurance Holdings, Inc.

(Exact name of registrant as specified
in its charter)



|Delaware (State or other jurisdiction of incorporation or organization)             |  | 54-1829180 (I.R.S. Employer Identification No.)
|----------------------------------------------------------------------------------- |  | -----------------------------------------------
|                                                                                    | 
|6604 West Broad Street, Richmond, Virginia (Address of principal executive offices) |  | 23230 (Zip Code)                               



(804) 281-6000

(Registrants telephone number, including area code)



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Indicate by
check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No ̈



Indicate by check mark whether the registrant
is an accelerated filed (as defined in Rule 12b-2 of the Act). Yes ̈No x



At August 1, 2003, 1,000 shares of common stock
with a par value of $1.00 were outstanding. The common stock of GE Financial Assurance Holdings, Inc. is not publicly traded.



REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF  FORM 10-Q AND IS THEREFORE FILING THIS FORM 10-Q WITH THE REDUCED
DISCLOSURE FORMAT.



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##### Table of Contents

TABLE OF CONTENTS



|                                |  |                                                                                       |  | Page
|------------------------------- |  | ------------------------------------------------------------------------------------- |  | ----
|PART I  FINANCIAL INFORMATION.
|                                |  |                                                                                      
|Item 1.                         |  | Financial Statements                                                                  |  | 1   
|                                |  |                                                                                      
|Item 2.                         |  | Managements Discussion and Analysis of Results of Operations and Financial Condition |  | 10  
|                                |  |                                                                                      
|Item 4.                         |  | Controls and Procedures                                                               |  | 13  
|                               
|PART II  OTHER INFORMATION.   
|                                |  |                                                                                      
|Item 1.                         |  | Legal Proceedings                                                                     |  | 14  
|                                |  |                                                                                      
|Item 6.                         |  | Exhibits and Reports on Form 8-K                                                      |  | 14  
|                                | 
|Signatures                      |  | 15                                                                                   
|                                | 
|Certifications                  |  | 17                                                                                   





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##### Table of Contents

PART 1  FINANCIAL INFORMATION



Item 1. Financial Statements



GE
FINANCIAL ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES



Condensed, Consolidated Statements of Current and Retained Earnings

(Dollar amounts in millions)

(Unaudited)



|                                                                                                        |  | Three Months Ended |               |   | Six Months Ended |  
|------------------------------------------------------------------------------------------------------- |  | ------------------ | ------------- | - | ---------------- | -
|                                                                                                        |  |                    | June 30, 2003 |   |                  |  
|Revenues:                                                                                               |  |                    |               |   |                  |  
|Premiums                                                                                                |  | $                  | 1,768         |   |                  | $
|Net investment income                                                                                   |  |                    | 1,180         |   |                  |  
|Net realized investment gains (losses)                                                                  |  |                    | (45           | ) |                  |  
|Other income                                                                                            |  |                    | 218           |   |                  |  
|                                                                                                        |  |                    |               |   |                  |  
|Total revenues                                                                                          |  |                    | 3,121         |   |                  |  
|                                                                                                        |  |                    |               |   |                  |  
|                                                                                                        |  |                    |               |  
|Benefits and expenses:                                                                                  |  |                    |               |   |                  |  
|Benefits and other changes in policy reserves                                                           |  |                    | 1,528         |   |                  |  
|General expenses                                                                                        |  |                    | 701           |   |                  |  
|Interest credited                                                                                       |  |                    | 429           |   |                  |  
|Amortization of intangibles                                                                             |  |                    | 78            |   |                  |  
|Change in deferred acquisition costs, net                                                               |  |                    | (168          | ) |                  |  
|Interest expense                                                                                        |  |                    | 31            |   |                  |  
|                                                                                                        |  |                    |               |   |                  |  
|Total benefits and expenses                                                                             |  |                    | 2,599         |   |                  |  
|                                                                                                        |  |                    |               |   |                  |  
|                                                                                                        |  |                    |               |  
|Earnings before income taxes, minority interest and cumulative effect of change in accounting principle |  |                    | 522           |   |                  |  
|Provision for income taxes                                                                              |  |                    | (192          | ) |                  |  
|                                                                                                        |  |                    |               |   |                  |  
|Earnings before minority interest and cumulative effect of change in accounting principle               |  |                    | 330           |   |                  |  
|                                                                                                        |  |                    |               |  
|Minority interest                                                                                       |  |                    | (1            | ) |                  |  
|                                                                                                        |  |                    |               |   |                  |  
|Earnings before cumulative effect of change in accounting principle                                     |  |                    | 329           |   |                  |  
|                                                                                                        |  |                    |               |  
|Cumulative effect of change in accounting principle, net of tax                                         |  |                    |              |   |                  |  
|                                                                                                        |  |                    |               |   |                  |  
|                                                                                                        |  |                    |               |  
|Net earnings                                                                                            |  |                    | 329           |   |                  |  
|                                                                                                        |  |                    |               |  
|Retained earnings at beginning of period                                                                |  |                    | 7,667         |   |                  |  
|                                                                                                        |  |                    |               |   |                  |  
|                                                                                                        |  |                    |               |  
|Retained earnings at end of period                                                                      |  | $                  | 7,996         |   |                  | $
|                                                                                                        |  |                    |               |   |                  |  



See Notes to Condensed,
Consolidated Financial Statements.





1



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##### Table of Contents

Item 1. Financial Statements (continued)



GE FINANCIAL ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES



Condensed, Consolidated Statements of Financial Position

(Dollar amounts in millions)



|                                                             |  | June 30, 2003 |             |   | December 31,2002 |  
|------------------------------------------------------------ |  | ------------- | ----------- | - | ---------------- | -
|                                                             |  |               | (Unaudited) |   |                  |  
|Assets                                                       |  |               |             |   |                  |  
|Investments:                                                 |  |               |             |   |                  |  
|Fixed maturities available-for-sale, at fair value           |  | $             | 61,824      |   |                  | $
|Equity securities available-for-sale, at fair value          |  |               | 763         |   |                  |  
|Mortgage and other loans, net of valuation allowance         |  |               | 6,026       |   |                  |  
|Policy loans                                                 |  |               | 997         |   |                  |  
|Other invested assets                                        |  |               | 3,206       |   |                  |  
|Short-term investments                                       |  |               | 1,190       |   |                  |  
|                                                             |  |               |             |   |                  |  
|Total investments                                            |  |               | 74,006      |   |                  |  
|Cash and cash equivalents                                    |  |               | 644         |   |                  |  
|Accrued investment income                                    |  |               | 1,208       |   |                  |  
|Deferred acquisition costs                                   |  |               | 4,222       |   |                  |  
|Goodwill                                                     |  |               | 1,600       |   |                  |  
|Intangible assets                                            |  |               | 1,356       |   |                  |  
|Reinsurance recoverable                                      |  |               | 2,261       |   |                  |  
|Other assets                                                 |  |               | 1,458       |   |                  |  
|Separate account assets                                      |  |               | 7,636       |   |                  |  
|Assets held for sale                                         |  |               | 22,708      |   |                  |  
|                                                             |  |               |             |   |                  |  
|Total assets                                                 |  | $             | 117,099     |   |                  | $
|                                                             |  |               |             |   |                  |  
|Liabilities and Shareholders Interest                       |  |               |             |   |                  |  
|Liabilities:                                                 |  |               |             |   |                  |  
|Future annuity and contract benefits                         |  | $             | 58,318      |   |                  | $
|Liability for policy and contract claims                     |  |               | 2,775       |   |                  |  
|Other policyholder liabilities                               |  |               | 316         |   |                  |  
|Other liabilities                                            |  |               | 6,931       |   |                  |  
|Short-term debt                                              |  |               | 1,884       |   |                  |  
|Long-term debt                                               |  |               | 478         |   |                  |  
|Separate account liabilities                                 |  |               | 7,636       |   |                  |  
|Liabilities associated with assets held for sale             |  |               | 20,264      |   |                  |  
|                                                             |  |               |             |   |                  |  
|Total liabilities                                            |  |               | 98,602      |   |                  |  
|                                                             |  |               |             |   |                  |  
|Minority interest in and equity of consolidated subsidiaries |  |               | 266         |   |                  |  
|                                                             |  |              
|Shareholders interest:                                      |  |               |             |   |                  |  
|Net unrealized investment gains                              |  |               | 3,746       |   |                  |  
|Derivatives qualifying as hedges                             |  |               | (459        | ) |                  |  
|Foreign currency translation adjustments                     |  |               | (5          | ) |                  |  
|                                                             |  |               |             |   |                  |  
|Accumulated non-owner changes in equity                      |  |               | 3,282       |   |                  |  
|Common stock                                                 |  |               |            |   |                  |  
|Additional paid-in capital                                   |  |               | 6,953       |   |                  |  
|Retained earnings                                            |  |               | 7,996       |   |                  |  
|                                                             |  |               |             |   |                  |  
|Total shareholders interest                                 |  |               | 18,231      |   |                  |  
|                                                             |  |               |             |   |                  |  
|Total liabilities and shareholders interest                 |  | $             | 117,099     |   |                  | $
|                                                             |  |               |             |   |                  |  



See Notes to
Condensed, Consolidated Financial Statements.



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Item 1. Financial Statements (continued).



GE FINANCIAL ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES



Condensed, Consolidated Statements of Cash Flows

(Dollar amounts in millions)

(Unaudited)

|                                                                                                       |  | Six Months Ended June 30, |        
|------------------------------------------------------------------------------------------------------ |  | ------------------------- | -------
|                                                                                                       |  | 2003                      |        
|Cash Flows From Operating Activities                                                                   |  |                           |        
|Net earnings                                                                                           |  | $                         | 624    
|Adjustments to reconcile net earnings to net cash provided by operating activities:                    |  |                           |        
|Change in reserves                                                                                     |  |                           | (385   
|Cumulative effect of change in accounting principle, net of tax                                        |  |                           |       
|Other, net                                                                                             |  |                           | (658   
|                                                                                                       |  |                           |        
|                                                                                                       |  |                          
|Net cash provided by operating activities                                                              |  |                           | (419   
|                                                                                                       |  |                           |        
|                                                                                                       |  |                          
|Cash Flows From Investing Activities                                                                   |  |                           |        
|Short term investment activity, net                                                                    |  |                           | (361   
|Proceeds from sales, securitizations and maturities of investment securities and other invested assets |  |                           | 9,763  
|Principal collected on and sale and securitizations of mortgage and policy loans                       |  |                           | 598    
|Purchases of investment securities and other invested assets                                           |  |                           | (10,869
|Mortgage and policy loan originations                                                                  |  |                           | (1,040 
|                                                                                                       |  |                           |        
|                                                                                                       |  |                          
|Net cash used in investing activities                                                                  |  |                           | (1,909 
|                                                                                                       |  |                           |        
|                                                                                                       |  |                          
|Cash Flows From Financing Activities                                                                   |  |                           |        
|Proceeds from issuance of investment contracts                                                         |  |                           | 5,744  
|Redemption and benefit payments on investment contracts                                                |  |                           | (4,173 
|Net commercial paper borrowings                                                                        |  |                           | 34     
|Proceeds from other short-term debt                                                                    |  |                           | 70     
|Payments on other short-term debt                                                                      |  |                           | (70    
|Cash received from acquisition of Saison Life Insurance Company Limited                                |  |                           |       
|                                                                                                       |  |                           |        
|                                                                                                       |  |                          
|Net cash provided by financing activities                                                              |  |                           | 1,605  
|                                                                                                       |  |                           |        
|                                                                                                       |  |                          
|Effect of Exchange Rate Changes on Cash                                                                |  |                           | (118   
|                                                                                                       |  |                           |        
|                                                                                                       |  |                          
|Increase (decrease) in Cash and Cash Equivalents                                                       |  |                           | (841   
|Cash and Cash Equivalents at Beginning of Period                                                       |  |                           | 2,101  
|                                                                                                       |  |                           |        
|                                                                                                       |  |                          
|Cash and Cash Equivalents at End of Period(a)                                                          |  | $                         | 1,260  
|                                                                                                       |  |                           |        



|(a) |  | Cash and cash equivalents at June 30, 2003 includes $616 million of cash classified as assets held for sale (see note 4).
|--- |  | -------------------------------------------------------------------------------------------------------------------------



See Notes to Condensed, Consolidated Financial Statements.









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Item 1. Financial Statements (continued).



GE FINANCIAL ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES



Condensed, Consolidated Statements of Current and Retained Earnings

(Dollar amounts in millions)

(Unaudited)



|1. |  | The accompanying condensed, consolidated quarterly financial statements represent GE Financial Assurance Holdings, Inc. and its consolidated subsidiaries (collectively the
Company, we, us, or our). All significant intercompany transactions have been eliminated.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In April 2002, GE Edison Life Insurance Company (GE Edison) acquired Saison Life Insurance Company Limited (Saison Life) from
Credit Saison Co., Ltd., Saison Group, Ltd. and its other shareholders (Saison Acquisition) for 7.8 billion yen, or approximately $61 million, representing 12.8 billion yen of payments to shareholders less 5.0 billion yen of contingent
debt. On the date of acquisition, Saison Life had approximately $4.3 billion of assets, including $2.4 billion of cash and $1.9 billion of other assets, and $4.3 billion of liabilities and equity, including $82 million of perpetual subordinated debt
(included in minority interest). Results of operations are reflected in condensed, consolidated financial statements from the date of acquisition.



|2. |  | These financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of
financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. Certain prior year amounts have been
reclassified to conform to the current year presentation. We label our quarterly information using a calendar convention, that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30, and third quarter as
ending on September 30. It is our longstanding practice to establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on a Saturday in order to normalize the potentially disruptive
effects of quarterly closings on business processes. The effects of this practice are modest and only exist within a reporting year. The fiscal closing calendar from 1993 through 2013 is available on the GE Web site,
www.ge.com/en/company/investor/secreports.htm.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The condensed, consolidated quarterly financial statements are unaudited. These statements include all adjustments (consisting of normal recurring accruals) considered necessary by management to present a fair statement of the results of
operations, financial position and cash flows. The results reported in these condensed, consolidated quarterly financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. The condensed,
consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and related notes contained in our annual report on Form 10-K for the fiscal year ended December 31, 2002.



|3. |  | A summary of changes in shareholders interest that did not result directly from transactions with the shareholder follows:
|-- |  | ---------------------------------------------------------------------------------------------------------------------------



|                                               |  | Three Months Ended June 30, |      
|---------------------------------------------- |  | --------------------------- | -----
|                                               |  | 2003                        |      
|Net earnings                                   |  | $                           | 329  
|Unrealized gains on investment securities, net |  |                             | 1,676
|Foreign currency translation adjustments       |  |                             | 138  
|Derivatives qualifying as hedges               |  |                             | (455 
|                                               |  |                             |      
|Total                                          |  | $                           | 1,688
|                                               |  |                             |      



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|                                               |  | Six MonthsEnded June 30, |      
|---------------------------------------------- |  | ------------------------ | -----
|                                               |  | 2003                     |      
|Net earnings                                   |  | $                        | 624  
|Unrealized gains on investment securities, net |  |                          | 2,542
|Foreign currency translation adjustments       |  |                          | 165  
|Derivatives qualifying as hedges               |  |                          | (361 
|                                               |  |                          |      
|                                               |  |                         
|Total                                          |  | $                        | 2,970
|                                               |  |                          |      



|4. |  | On June 25, 2003, we announced a definitive agreement to sell our Japanese life insurance and U.S. Auto and Home businesses to American International Group, Inc. for approximately
$2.15 billion in cash following a pre-closing dividend. A portion of these proceeds will be used to retire intercompany debt with GE affiliates related to these entities of approximately $500 million. The transaction is subject to regulatory
approvals and is expected to close in the third quarter.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



These businesses, classified as held for sale on the balance sheet, comprise almost all of the Japan and Auto and Home Insurance Segments. Summarized financial information, net of assets expected to be included in the pre-closing dividend,
is set forth below:



|                                                                                                       |  | June 30, 2003
|------------------------------------------------------------------------------------------------------ |  | -------------
|                                                                                                       |  | (Unaudited)  
|Cash and cash equivalents                                                                              |  | $            
|Investment Securities (debt and equity)                                                                |  |              
|Goodwill                                                                                               |  |              
|Other intangibles                                                                                      |  |              
|All other assets                                                                                       |  |              
|                                                                                                       |  |              
|Total assets held for sale                                                                             |  | $            
|                                                                                                       |  |              
|Future annuity and contract benefits and other policyholder liabilities                                |  | $            
|Other                                                                                                  |  | $            
|                                                                                                       |  |              
|Total liabilities associated with assets held for sale                                                 |  | $            
|                                                                                                       |  |              
|Unrealized investment gains, derivatives qualifying as hedges and foreign translation adjustments, net |  | $            
|                                                                                                       |  |              



|5. |  | During the first quarter of 2003, we redefined our operating segments. Beginning in 2003, management realigned the business on a product line and market basis to intensify its focus
on return on equity, optimal deployment of capital and distribution effectiveness. As a result of this change, our operations are conducted under five reporting segments corresponding to major products and markets: Retirement Income and Protection,
Japan, Mortgage Insurance, Auto and Home Insurance, and Corporate and Other. Prior to this, our four reporting segments were Wealth Accumulation and Transfer, Mortgage Insurance, Lifestyle Protection and Enhancement, and Auto and Home Insurance.
June 30, 2002 and December 31, 2002 amounts have been reclassified to conform to the June 30, 2003 presentation.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Retirement Income and Protection segment provides products that include investment products (including fixed, variable and income annuities,
institutional stable value products and distribution of mutual funds), life insurance and long term care insurance. The Japan segment includes life insurance, certain annuity products and supplemental health insurance provided in the Japanese
market. The Mortgage Insurance segment provides protection to mortgage lenders against losses from mortgage defaults. The Auto and Home Insurance segment primarily provides private passenger auto insurance. Corporate and Other includes small group
insurance and





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affinity marketing that are not sufficiently material on an individual basis to warrant separate
disclosure, as well as other corporate activities.



The
following is a summary of reporting segment activity:



|                                                                                                               |  | Three Months Ended |      
|-------------------------------------------------------------------------------------------------------------- |  | ------------------ | -----
|                                                                                                               |  | June 30, 2003      |      
|Revenues                                                                                                       |  |                    |      
|Retirement Income and Protection                                                                               |  | $                  | 1,897
|Japan                                                                                                          |  |                    | 687  
|Mortgage Insurance                                                                                             |  |                    | 156  
|Auto and Home Insurance                                                                                        |  |                    | 149  
|Corporate and Other                                                                                            |  |                    | 232  
|                                                                                                               |  |                    |      
|Total revenue                                                                                                  |  | $                  | 3,121
|                                                                                                               |  |                    |      
|Earnings (loss) before income taxes, minority interest and cumulative effect of change in accounting
principle |  |                    |      
|Retirement Income and Protection                                                                               |  | $                  | 236  
|Japan                                                                                                          |  |                    | 174  
|Mortgage Insurance                                                                                             |  |                    | 137  
|Auto and Home Insurance                                                                                        |  |                    | 19   
|Corporate and Other                                                                                            |  |                    | (44  
|                                                                                                               |  |                    |      
|Total earnings before income taxes, minority interest and cumulative effect of change in accounting principle  |  | $                  | 522  
|                                                                                                               |  |                    |      



|                                                                                                              |  | Six Months Ended |      
|------------------------------------------------------------------------------------------------------------- |  | ---------------- | -----
|                                                                                                              |  | June 30, 2003    |      
|Revenues                                                                                                      |  |                  |      
|Retirement Income and Protection                                                                              |  | $                | 3,807
|Japan                                                                                                         |  |                  | 1,264
|Mortgage Insurance                                                                                            |  |                  | 323  
|Auto and Home Insurance                                                                                       |  |                  | 295  
|Corporate and Other                                                                                           |  |                  | 539  
|                                                                                                              |  |                  |      
|Total revenues                                                                                                |  | $                | 6,228
|                                                                                                              |  |                  |      
|Earnings before income taxes, minority interest and cumulative effect of change in accounting principle       |  |                  |      
|Retirement Income and Protection                                                                              |  | $                | 468  
|Japan                                                                                                         |  |                  | 252  
|Mortgage Insurance                                                                                            |  |                  | 240  
|Auto and Home Insurance                                                                                       |  |                  | 33   
|Corporate and Other                                                                                           |  |                  | (45  
|                                                                                                              |  |                  |      
|Total earnings before income taxes, minority interest and cumulative effect of change in accounting principle |  | $                | 948  
|                                                                                                              |  |                  |      





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The following is a summary of assets by operating segment:



|                                 |  | June 30, 2003 |         | December 31, 2002
|-------------------------------- |  | ------------- | ------- | -----------------
|Assets                           |  |               |         |                  
|Retirement Income and Protection |  | $             | 76,812  |                  
|Japan                            |  |               | 21,466  |                  
|Mortgage Insurance               |  |               | 3,985   |                  
|Auto and Home Insurance          |  |               | 1,679   |                  
|Corporate and Other              |  |               | 13,157  |                  
|                                 |  |               |         |                  
|Total assets                     |  | $             | 117,099 |                  
|                                 |  |               |         |                  



|6. |  | The Financial Accounting Standards Boards (FASB) Statement of Financial Accounting Standards (SFAS) 142, Goodwill and Other Intangible Assets,generally became effective on January 1, 2002. Under SFAS 142, goodwill is no longer amortized but is tested for impairment using a fair value methodology, at least annually.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Under SFAS 142, we were required to test all existing goodwill for impairment
as of January 1, 2002, on a reporting unit basis. A reporting unit is an operating segment unless, at businesses one level below that operating segment (the component level), discrete financial information is prepared and
regularly reviewed by management, in which case the component is the reporting unit.



A fair value approach is used to test goodwill for impairment. An impairment charge is recognized for the amount, if any, by which the carrying amount of goodwill exceeds its fair value. Fair values of reporting units
and the related fair values of their respective goodwill were established using discounted cash flows. When available and as appropriate, comparative market multiples were used to corroborate results of the discounted cash flows.



The result of testing our goodwill for impairment in accordance with SFAS
142, as of January 1, 2002, was a non-cash charge of $539 million ($380 million after tax), which is reported in the caption Cumulative effect of change in accounting principle, net of tax. All of the charges relate to the Auto and Home
Insurance segment. The primary factor resulting in the impairment charge was increased price competition in the auto insurance industry. No impairment charge was appropriate under the FASBs previous goodwill impairment standard, which was
based on undiscounted cash flows.



Intangibles Subject to
Amortization



|                                         |  | At June 30, 2003 (a) |       |                          | At December 31, 2002 |       
|---------------------------------------- |  | -------------------- | ----- | ------------------------ | -------------------- | ------
|                                         |  | GrossCarryingAmount  |       | Accumulated Amortization |                      |       
|Present Value of Future Profits (PVFP) |  | $                    | 2,670 |                          | $                    | (1,557
|All other                                |  |                      | 615   |                          |                      | (372  
|                                         |  |                      |       |                          |                      |       
|Total                                    |  | $                    | 3,285 |                          | $                    | (1,929
|                                         |  |                      |       |                          |                      |       



| | (a) |  | Amounts have been adjusted to reflect $597 million of intangibles which have been reclassified as Assets Held For Sale (see Note 4).
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------



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Amortization expense related to intangible assets, excluding goodwill, for the second quarter of 2003 and
2002 was $78 million and $64 million, respectively, and for the first six months of 2003 and 2002 was $162 million and $133 million, respectively. The estimated percentage of the December 31, 2002 net PVFP balance before the effect of unrealized
investment gains or losses and adjusted for assets held for sale (See Note 4), to be amortized over each of the next five years, is as follows:



|2003 |  | 8.6% |  |  |  |  |  |  |  | 
|---- |  | ---- |  |  |  |  |  |  |  | 
|2004 |  | 8.1% |  |  |  |  |  |  |  | 
|2005 |  | 7.7% |  |  |  |  |  |  |  | 
|2006 |  | 7.1% |  |  |  |  |  |  |  | 
|2007 |  | 6.5% |  |  |  |  |  |  |  | 





Amortization expenses for PVFP in future periods will be affected by acquisitions, dispositions, realized capital gains/losses or other factors affecting
the ultimate amount of gross profits realized from certain lines of business. Similarly, future amortization expenses for other intangibles will depend on future acquisitions, dispositions and other business transactions.



Goodwill



|                           |  | Retirement Incomeand Protection |       | Japan |   |      | Mortgage Insurance |  | AutoandHome |    | Corporateand Other |   | Total | 
|-------------------------- |  | ------------------------------- | ----- | ----- | - | ---- | ------------------ |  | ----------- | -- | ------------------ | - | ----- | 
|Balance, December 31, 2002 |  | $                               | 1,148 |       | $ | 736  |                    |  | $           | 22 |                    | $ |      | 
|(a) Other                  |  |                                 |      |       |   | (736 | )                  |  |             |   |                    |   |      | 
|                           |  |                                 |       |       |   |      |                    |  |             |    |                    |   |       | 
|Balance, June 30, 2003     |  | $                               | 1,148 |       | $ |     |                    |  | $           | 22 |                    | $ |      | 
|                           |  |                                 |       |       |   |      |                    |  |             |    |                    |   |       | 



(a) Other adjustments
include final purchase accounting adjustments related to the Saison Acquisition and foreign exchange translation adjustments of $40 million, offset by a reduction of $(776) million of goodwill which has been reclassified as Assets Held For Sale (See
Note 4).



|7. |  | FIN 46, Consolidation of Variable Interest Entities is effective for us on July 1, 2003. Based on the new criteria in the Interpretation, we will consolidate
certain entities in our third quarter financial statements. While FIN 46 represents a significant change in accounting principles governing consolidation, it does not change the economic or legal characteristics of asset sales. Important
considerations that differentiate FIN 46 entities from others included in our consolidated statements include the following:
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Assets in FIN 46 entities were previously owned by us. We, or our parent, normally provides financial support to these entities; while the nature of that support differs from entity
to entity, it is generally the reason that consolidation is required under FIN 46.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The assets we sold to FIN 46 entities remain legally isolated and our use of the assets is often restricted.
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | Liabilities of FIN 46 entities are expected to be repaid with cash flows generated by the related assets.
| | - |  | ---------------------------------------------------------------------------------------------------------



We will consolidate approximately $2 billion of securitized assets at transition. Assets and liabilities in FIN 46 entities
differ from other consolidated assets and liabilities, thus our future financial statements will distinguish assets and liabilities that are included solely as a result of FIN 46. Because we will not sell any additional assets to these consolidated
FIN 46 entities, these balances will decrease as the assets mature. Our July 1, 2003, consolidation of FIN 46 entities had no transition effect on earnings.



In April 2003, the Financial Accounting Standards Board issued SFAS 133 Implementation Issue No. B36, Modified Coinsurance Arrangements with Debt
Instruments that Incorporate Credit Risk Exposures that are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under those Instruments, which is effective for us on October 1, 2003. In summary, B36 states that modified
coinsurance arrangementswhere the ceding insurer withholds fundsmay include an embedded derivative that must be bifurcated from the host instrument. We are currently evaluating the effect that this guidance may have on our financial
statements; however, based on preliminary analysis performed, we do not believe it will materially impact our financial position.



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In July 2003 the American Institute of Certified Public Accountants issued Statement of Position 03-1,
Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts, which we intend to adopt on January 1, 2004. The impact on our consolidated financial statements is not known at
this time.





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I
tem 2. Managements Discussion and Analysis of Results of Operations and Financial Condition



THREE MONTHS ENDED JUNE 30, 2003 COMPARED WITH THE THREE MONTHS ENDED JUNE 30, 2002



Operating Results



Premiumsincreased $150 million, or 9.3%, to $1,768 million for the three month period ended June 30, 2003 from $1,618 million for
three month period ended June 30, 2002. The increase is primarily a result of premiums from the continued growth in certain whole life products, long-term care contracts, and higher sales of life contingent structured settlements. These increases
were partially offset by a slight decline in renewals of term life contracts and a decrease in our Mortgage Insurance segment related to higher levels of ceded premiums, as well as higher lapse rates associated with a high level of mortgage
refinancings given the low interest rate environment.



Net
investment income increased $92 million, or 8.5%, to $1,180 million for the three month period ended June 30, 2003 from $1,088 million for the three month period ended June 30, 2002. The increase was primarily attributable to
higher levels of average invested assets ($87.0 billion for the three month period ended June 30, 2003 vs. $76.8 billion for the three month period ended June 30, 2002). This increase was partially offset by a decrease in weighted average yields to
5.47% for the three month period ended June 30, 2003 from 5.64% for the three month period ended June 30, 2002 due to the overall declining interest rate environment.



Net realized investment gains/(losses) increased $166 million to a loss of $(45) million for the three month period ended June 30,
2003 from a loss of $(211) million for the three month period ended June 30, 2002. Investment gains are comprised of gross investment gains and gross investment (losses). For the three month period ended June 30, 2003, gross gains and (losses) were
$148 million and $(193) million, respectively. For the three month period ended June 30, 2002, gross gains and (losses) were $219 million and $(430) million, respectively. Realized losses in the second quarter of 2003 include impairments of $72
million comprised primarily of debt and equity securities. The realized losses in 2002 include the Companys portfolio losses on securities issued by WorldCom, Inc. and its affiliates of $167 million ($110 million net of tax).



Other income decreased $16 million, or 6.8%, to $218 million for the three month
period ended June 30, 2003, from $234 million for the three month period ended June 30, 2002. Other income is principally comprised of insurance charges made against universal life contracts, revenues from sales of income protection packages, fees
assessed against policyholder account values, surrender fees, other fee income, and commission income. The decrease in the three month period ended June 30, 2003 was primarily attributable to lower surrender fees and a decline in club membership
revenues.



Benefits and other changes in policy reserves includes both
activity related to future policy benefits on long-duration life and health insurance products as well as claims costs incurred during the year under these contracts and mortgage insurance and property and casualty products. These amounts increased
$145 million, or 10.5%, to $1,528 million for the three month period ended June 30, 2003 from $1,383 million for the three month period ended June 30, 2002. This increase in benefits is primarily the result of growth in sales of certain whole-life
products, long-term care policies, structured settlements, and certain deferred annuities. This increase was partially offset by a decrease in benefits on term life contracts.



General expenses decreased $30 million to $701 million for the three month period ended June 30, 2003 from $731 million for the three
month period ended June 30, 2002. This decrease is primarily related to cost savings initiatives and integration and consolidation activities.



Amortization of intangibles increased $14 million, or 22.0%, to $78 million for the three month period ended June 30, 2003 from $64 million for the three month
period ended June 30, 2002. Our significant intangible asset consists of the present value of future profits (PVFP), representing the estimated future gross profit in acquired insurance and annuity contracts. Other intangibles subject to
amortization include software and licenses. The increase is primarily related to PVFP amortization which fluctuates based on the emergence of profits.



Change in deferred acquisition costs, net decreased by $40 million, or 19.2%, to $168 million for the three month period ended June 30, 2003 from $208 million for
the three month period ended June 30, 2002. The decrease is primarily due to an increase in amortization on our long-term care and term life insurance products.



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Provision for income taxes increased $129 million to $192 million for the three month period ended June 30, 2003
from $63 million for the three month period ended June 30, 2002. The Companys effective tax rate of 36.8% for the three month period ended June 30, 2003 was 15.3 percentage points higher than the effective tax rate of 21.5% for the comparable
period ended June 30, 2002. This increase is primarily attributable to the non-recurring reduction of certain deferred tax liabilities in 2002, to the establishment of a valuation allowance on foreign losses, the reduction of tax exempt income, and
an increase in state tax expense in 2003.



SIX MONTHS ENDED JUNE 30, 2003
COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 2002



Operating Results



Premiums increased $338 million, or 10.6%, to $3,512 million for
the first six months of 2003 from $3,174 million for the first six months of 2002. This increase is primarily related to premiums from the Saison Acquisition, which contributed $109 million in premiums. Continued growth in the number of long-term
care contracts in force and higher sales of life contingent structured settlements also contributed to the increase. These increases were partially offset by a decline in renewals of term life contracts and a decrease in premiums in our Mortgage
Insurance segment related to higher levels of ceded premiums, as well as higher lapse rates associated with a high level of mortgage refinancings given the low interest rate environment.



Net investment income increased $126 million, or 5.9% to $2,266 million for the first six months of 2003 from $2,140 million for the
first six months of 2002. The increase was primarily attributable to higher levels of average invested assets ($86.0 billion in first six months of 2003 vs. $75.4 billion in first six months of 2002). This increase was partially offset by a decrease
in weighted average yields to 5.27% for the first six months of 2003 from 5.57% for the first six months of 2002 due to the overall declining interest rate environment. The Saison Acquisition provided for a $32 million increase in net investment
income year over year due to the timing of the Acquisition in April of 2002.



Net realized investment gains (losses) increased $58 million to a gain of $1 million for the first six months of 2003 from a loss of $(57) million for the first six months of 2002. Investment gains are comprised of gross investment
gains and gross investment (losses). For the first six months of 2003, gross gains and (losses) were $353 million and $(352) million, respectively. For the first six months of 2002, gross gains and (losses) were $530 million and $(587) million,
respectively. Realized losses in 2003 include $151 million of impairments, primarily related to debt and equity securities. Realized losses in 2002 include the Companys portfolio losses on securities issued by WorldCom, Inc. and its affiliates
of $167 million ($110 million net of tax). These portfolio losses in 2002 were partially offset by realized gains on the securitization of certain financial assets of $29 million and a gain on certain real estate held for investment of $24 million.



Other income decreased $49 million, or 9.8%, to $449 million in the
first six months of 2003 from $498 million in the first six months of 2002. The decrease in the first six months of 2003 was primarily attributable to a decline in club membership revenue and lower surrender fees.



Benefits and other changes in policy reserves includes both activity related to future
policy benefits on long-duration life and health insurance products as well as claims costs incurred during the year under these contracts and mortgage insurance and property and casualty products. These amounts increased $383 million, or 13.9%,
including $98 million related to the Saison Acquisition, to $3,144 million for the six month period ended June 30, 2003 from $2,761 million for the six month period ended June 30, 2002. The increase in benefits is primarily the result of growth in
sales of long-term care and structured settlement products.



General
expenses decreased $62 million to $1,411 million for the six month period ended June 30, 2003 from $1,473 million for the three month period ended June 30, 2002. This decrease is primarily related to reduced compensation and benefit costs, cost
savings initiatives and integration and consolidation activities.



Amortization of intangibles increased $29 million, or 21.8%, to $162 million for the first six months of 2003 from $133 million for the first six months of 2002. Our significant intangible asset consists primarily of PFVP, as well as
software and licenses. The increase is related to PVFP amortization primarily as a result of the Saison Acquisition.



Provision for income taxes increased $69 million or 27.3% to $322 million for the six-month period ended June 30, 2003 from $253 million for the comparable period
ended June 30, 2002. The Companys effective tax rate of 34.0% for the six-month period ended June 30, 2003 was 4.5 percentage points higher than the effective tax rate of 29.5%



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for the comparable period ended June 30, 2002. This increase is primarily attributable to the non-recurring reduction of
certain deferred tax liabilities in 2002, to the establishment of a valuation allowance on foreign losses, the reduction of tax exempt income, and an increase in state tax expense in 2003. This increase was partially offset by favorable developments
related to the examination of our federal income tax returns.



Financial
Condition



Total assets increased $7.8 billion, or 7.1%, at June 30, 2003
from December 31, 2002. Total investments decreased $10.4 billion or 12.3%. The decrease was primarily the result of a reclassification of $16.4 billion of investments to assets held for sale (See Note 4). Absent this reclassification, investments
would have increased $8.6 billion. The increase that would have occurred absent the reclassification is primarily related to the market impact of investments securities as well as net purchases of securities funded by operating cash flows, cash
received under securities lending programs and net investment income, partially offset by mortgage and policy loan repayments. Assets other than investments decreased $0.8 billion. This decrease was primarily the result of a decrease in cash and
cash equivalents offset by a slight increase in separate account assets.



Total
liabilities increased $4.8 billion, or 5.1%, at June 30, 2003 from December 31, 2002. Future annuity and contract benefits decreased $14.6 billion or 20.1%. The decrease was primarily the result of a reclassification of $16.4 billion of future
annuity and contract benefits to assets held for sale (See Note 4). Absent this reclassification, future annuity and contract benefits would have increased approximately $1.8 billion, or 2.4%, at June 30, 2003 from December 31, 2002. This increase
is primarily the result of growth in our structured settlement and whole life type contracts. Other liabilities increased $3.0 billion primarily related to obligations under securities lending programs.



Portfolio Quality



We principally invest in investment grade debt and equity securities. The aggregate value of our debt and equity investments was $62.6
billion as compared to $74.0 billion at December 31, 2002. Gross unrealized gains and (losses) were $7.2 billion and $(0.7) billion, respectively, at June 30, 2003, including $2.4 billion and $(0.1) billion, respectively, related to assets held for
sale (See Note 4). Goss unrealized gains and (losses) were $3.5 billion and $(1.5) billion, respectively, as of December 31, 2002. Market value for these purposes is defined by relevant accounting standards and should not be viewed as a forecast of
future gains or losses. We estimate that available gains, net of hedging positions and estimated impairment of intangible and other insurance related assets, could be as much as $1.6 billion.



We regularly review the investment securities in our portfolio for impairment based on
criteria that include the extent to which cost exceeds market value, the duration of that market decline and the financial health and specific prospects for the issuer. Of those securities whose carrying amount exceeds fair value at June 30, 2003,
and based upon application of our accounting policy for impairment, approximately $175 million of portfolio value is at risk of being charged to earnings over the next 12 months. Impairment losses recognized for the first six months of 2003 were
$151 million, primarily related to mutual fund and equity investments. Impairment losses recognized for the three month period ended June 30, 2003 were $72 million, primarily related to mutual fund and equity investments.



Forward Looking Statements



This document includes certain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements which represent our belief regarding potential investment gains and losses. These statements are based on our current expectations and are subject to
uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in global economic, business, competitive market and regulatory factors. We undertake no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future developments or otherwise.



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Item 4. Controls and Procedures



As required by
Rule 13a-15(b), our management, including the Chief Executive Officer (serving as the principle executive officer) and Chief Financial Officer, conducted an evaluation as of the end of the period covered by this report, of the effectiveness of the
companys disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures were
effective as of the end of the period covered by this report. As required by Rule 13a-15(d), our management, including the Chief Executive Officer and Chief Financial Officer, also conducted an evaluation of the companys internal control over
financial reporting to determine whether any changes occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the companys internal control over financial reporting. Based
on that evaluation, there has been no such change during the quarter covered by this report.





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PART II  OTHER INFORMATION



Item 1. Legal Proceedings



The Company, like other
insurance companies, is involved in lawsuits, including class action lawsuits. In some class action and other lawsuits involving insurance companies, substantial damages have been sought and/or material settlement payments have been made. Except for
the McBride case described below, the ultimate outcome of which, and any effect on the Company, cannot be determined at this time, management believes that at the present time there are no pending or threatened lawsuits that are reasonably
likely to have a material adverse impact on the Companys Condensed Consolidated Financial Statements.



On November 1, 2000, GE Life and Annuity Assurance Company (GE Life) was named as a defendant in a lawsuit filed in Georgia state court related to the sale of universal life insurance policies (McBride
v. Life Insurance Co. of Virginia dba GE Life and Annuity Assurance Co.). On December 1, 2000, we successfully removed the case to the United States District Court for the Middle District of Georgia. The complaint is brought as a class action on
behalf of all persons who purchased certain universal life insurance policies from GE Life and alleges improper sales practices in connection with the sale of universal life policies. No class has been certified. On February 27, 2002, the court
denied our motion for summary judgment. We have vigorously denied liability with respect to the plaintiffs allegations and the ultimate outcome, and any effect on us, of the McBride litigation cannot be determined at this time.



Item 6. Exhibits and Reports on Form 8-K.



| | a. |  | Exhibits.
| | -- |  | ---------



Exhibit 12 Computation of ratio of earnings to fixed charges.



Exhibit 31.1 CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002



Exhibit 31.2 CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002



Exhibit 32 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002



| | b. |  | Reports on Form 8-K.
| | -- |  | --------------------



None.





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SIGNATURES



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



GE FINANCIAL ASSURANCE HOLDINGS, INC. (Registrant)By:

/s/ Richard P. McKenneyRichard P. McKenney, Senior Vice President and Chief Financial Officer (Principal Financial Officer)


Date: August 1, 2003



By:

/s/ Jamie S. MillerJamie S. Miller Vice President and Controller (Principal Accounting Officer)


Date: August 1, 2003





15