SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-K

              [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                 For the fiscal year ended December 31, 2002, 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 2-35669

                    Southern Security Life Insurance Company
             (Exact name of registrant as specified in its Charter)

     FLORIDA                                               59-1231733
(State or other jurisdiction of incorporation          (I.R.S. Employer
 or organization)                                    Identification Number)



755 Rinehart Road, Lake Mary, Florida                       32746
     (Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code:    (407)  321-7113

Securities registered pursuant to Section 12(b) of the Act:

         Title of each Class          Name of each exchange on which registered
          None                                        None

Securities registered pursuant to Section 12(g) of the Act:

         Title of each Class         Name of each exchange on which registered
               None                                   None

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 the  filing
requirements for the past 90 days.

                        X      Yes                 No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Company's  knowledge,  in  definitive  proxy or  information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant as of March 28, 2003 was approximately $9,115,415.

As of March 31, 2003,  registrant had issued and outstanding 2,003,388 shares of
Common Stock.

DOCUMENTS  INCORPORATED BY REFERENCE  Portions of the definitive Proxy Statement
for the Registrant's  2002 Annual Meeting of  Stockholders'  are incorporated by
reference into Part III hereof.

  ===========================================================================

<PAGE>

                                     PART I

Item 1.  Business.

Southern Security Life Insurance Company (the "Company") is a legal reserve life
insurance  company  authorized  to  transact  business in the states of Alabama,
Florida,  Georgia, Hawaii, Indiana,  Illinois,  Kentucky,  Louisiana,  Michigan,
Missouri,  Oklahoma,  South Carolina,  Tennessee and Texas. It was  incorporated
under  Florida  law in 1966 and was  licensed  and  commenced  business in 1969.
During  2002  approximately  43% of the  premium  income of the Company was from
business in force in Florida, its state of domicile. The Company's only industry
segment is the ordinary life, accident and health, and annuity business.

Effective December 17, 1998, Security National Financial  Corporation  ("SNFC"),
an SEC registrant,  acquired 100% of the assets of Consolidare Enterprises, Inc.
("Consolidare"),  which owned 57.4% of the  outstanding  shares of the  Company.
During March 1999,  SNFC changed  Consolidare's  name to SSLIC Holding  Company,
Inc.

The Company at present sells  universal  life  policies  with various  companion
riders as well as traditional life products.  The Company's  accident and health
insurance  business  has  never  been a  significant  portion  of the  Company's
business.  It does not presently  sell  industrial  life or group life insurance
other than through its  participation as a reinsurer in the  Servicemen's  Group
Life Insurance Program ("SGLI").

The Company  introduced  its first  universal life product in 1986 and currently
has two  principal  universal  life  products  in force.  These  universal  life
products  offer  flexibility  to the  client  as  well as tax  advantages,  both
currently and upon the death of the insured. These products allow the Company to
better compete in the current market environment. In excess of 3% and 12% of the
first year  premiums  collected  by the Company in 2002 and 2001,  respectively,
were universal life products.

One of the  products in the  Company's  traditional  line of life  insurance  is
10-Pay Whole Life with an Annuity Rider. The savings aspect of the Annuity Rider
is  marketed  as a tool  for  parents  to  help  fund  their  children's  higher
education.  The product is offered to parents who have children under the age of
25. This  represented  64% and 59% of the first year premiums  collected in 2002
and 2001, respectively.

The Company introduced in 1996 a new series of products designed for the seniors
market.  This new series targets the needs of senior citizens especially as they
plan for their final expenses. These new policies are traditional endowment type
policies.  Because  they are  written to a senior  market  they are  designed to
accommodate adverse health conditions.  Because of the size of the policies they
are usually  issued with only limited  underwriting.  The  coverage  size of the
policy is roughly  equivalent to the insured's  anticipated  funeral costs. This
new series  represented 29% and 28% of the first year premiums collected in 2002
and 2001, respectively.

The following table provides  information (on a statutory basis)  concerning the
amount and  percentage of premium income  resulting from the principal  lines of
insurance written by the Company during the periods indicated:

<TABLE>
<CAPTION>
                               2002                      2001                           2000
                      Amount          Percentage  Amount       Percentage       Amount         Percentage
<S>                 <C>                   <C>   <C>                  <C>     <C>                   <C>
Life Insurance-
Ordinary (1)(2)     $7,158,696            85%   $7,167,157         89%       $7,568,550            91%

Individual
Annuities (1)          396,352             5%      149,424          2%           89,623             1%

Life Insurance-
Group (SGLI)           735,987             9%      589,779          7%          497,070             6%

Other -
Accident & Health      123,042             1%      145,134          2%          169,203             2%
                    $8,414,077           100%   $8,051,494        100%       $8,324,446           100%
</TABLE>

<PAGE>

(1)  A portion  of each of the  deposit  term  policies  previously  sold by the
     Company  represents  ordinary life insurance and the balance  represents an
     individual annuity.

(2)  The 2002, 2001, and 2000 premium income for life insurance-ordinary are net
     of reductions of $794,537, $831,358, and $923,648,  respectively,  in ceded
     premium paid to all reinsurers, including Mega Life.

The  following  table  gives  information  according  to  accounting  principals
generally accepted in the United States of America  concerning  operating ratios
of the Company for the periods indicated:

                                           2002        2001           2000
Total Net Insurance Revenues           $7,075,257  $6,736,027      $6,698,869

Benefit Costs Paid or Provided:
  Amount                               $5,343,573  $4,482,588      $5,109,411
  Ratio to Net Insurance Revenue            75.5%       66.6%           76.3%

Amortization of Deferred Policy
 Acquisition Expenses:
  Amount                               $1,969,966  $2,197,399      $1,797,320
  Ratio to Net Insurance Revenue            27.8%       32.6%           26.8%
General Insurance Expenses:
  Amount                               $3,678,920  $3,835,165      $3,529,381
  Ratio to Net Insurance Revenue            52.0%       56.9%           52.7%

Income (loss) before Income Taxes:
  Amount                                 $(82,820)    $87,841        $198,365
  Ratio to Net Insurance Revenue            (1.2)%       1.3%            3.0%
  Ratio to Total Revenue and
   Investment Income                         (.8)%        .8%            1.9%
  Ratio to Equity                            (.5)%        .5%            1.2%

<PAGE>


     The  following  table  provides  information  about the Company  concerning
     changes in life insurance in force during the periods indicated  (exclusive
     of accidental death benefits):

                                             2002          2001        2000
                                             (In thousands except lapse ratios)
      Total life insurance in force
      at beginning of period:
        Ordinary Whole Life and
         Endowment-Participating         $      180    $       30        238
        Ordinary Whole Life and
         Endowment-Non-Participating        708,789       732,433    892,962
       Term                                  72,752        78,770      3,646
        Reinsurance Assumed                 786,273       558,575    558,571
                                         ----------    ---------- ----------
          Total                          $1,567,994    $1,369,808 $1,455,417
                                         ----------    ---------- ----------
      Additions (including reinsurance assumed):
        Ordinary Whole Life and
         Endowment-Participating         $     --      $    --    $    --
        Ordinary Whole Life and
         Endowment-Non-Participating        52,633        55,785      60,589
        Term                                 1,390         2,487       --
        Reinsurance Assumed                 10,352       250,240       4,121
                                        ----------     ---------  ----------
          Total                         $   64,375     $ 308,512  $   64,710
                                        ----------     ---------  ----------
      Terminations:
        Death                           $    3,550         2,822  $    2,313
        Lapse and Expiry                    17,888        21,875      22,398
        Surrender                           83,064        97,483     125,086
        Other                                1,089       (11,854)        522
                                        ----------     ---------  ----------
        Total                           $  105,591     $ 110,326  $  150,319
                                        ----------     ---------  ----------

      Life Insurance in force at end of period:
        Ordinary Whole Life and
         Endowment-Participating        $    2,205     $     180  $       30
        Ordinary Whole Life and
         Endowment-Non-Participating       659,718       708,789     732,433
        Term                                69,135        72,752      78,770
        Reinsurance Assumed                795,720       786,273     558,575
                                        ----------     ---------  ----------
        Total                            1,526,778     1,567,994   1,369,808
      Reinsurance Ceded                   (164,248)     (179,242)   (210,365)
                                        ----------    ----------  ----------
      Total after Reinsurance Ceded     $1,362,530    $1,388,752  $1,159,443
                                        ==========    ==========  ==========
      Lapse Ratio (Reflecting termina-
      tion by surrender and lapse;
      ordinary life insurance only):          11.9%        13.8%       16.1%

     The Company  invests  and  reinvests  portions of its funds in  securities,
     which are permitted investments under the laws of the State of Florida, and
     part of its  revenue is derived  from this  source.  Generally,  securities
     comprising permitted investments include obligations of Federal,  state and
     local  governments;  corporate bonds and preferred and common stocks;  real
     estate mortgages and certain leases. The following table summarizes certain
     information regarding the Company's investment activities:

             Average              Gross             Net
Fiscal      Investment         Investment        Investment          Net
Year         Assets (1)         Income(2)         Income (3)        Yield (4)
-----      -----------        ------------      ------------      -----------
2002       $51,758,382         $3,846,090        $3,835,420          7.41%
2001       $50,560,334         $3,876,422        $3,866,966          7.65%
2000       $50,444,329         $3,959,061        $3,935,607          7.80%

<PAGE>

(1)  Computed by summing the beginning and ending  investment  and cash balances
     and dividing by 2.
(2)  Excludes investment gains and losses.
(3)  Net of investment expense and before income taxes.
(4)  Computed on an annualized basis.  Represents ratio of net investment income
     to average invested assets.

The Company  continues its  activities  as a qualified  lender under the Federal
Family Educational Loan Program.  Through this program the Company makes various
types of student  and parent  loans  available.  All  student  loans made by the
Company are  guaranteed by the Federal  Government.  As it has in the past,  the
Company  sells  these  student  loans on a periodic  basis to the  Student  Loan
Marketing Association ("SLMA") thereby keeping these funds liquid.

The Company  presently  sells its policies on a general  agency basis  through a
field force consisting of approximately 161 agents. All such agents are licensed
as agents of, and sell for, the Company and are independent  contractors who are
paid exclusively on a commission basis for sales of the Company's policies. Some
of the Company's agents are part-time  insurance  agents.  Most of the Company's
agents are associated with Insuradyne Corporation,  a wholly-owned subsidiary of
Security National Financial Corporation.  See "Certain Relationships and Related
Transactions" in item 13, Part III of this Report.

Effective January 1, 1999, the Company entered into an  Administrative  Services
Agreement  with its ultimate  parent  Security  National  Financial  Corporation
(Security National).  Under the terms of the Administrative  Services Agreement,
all  of  the  Company's   employees  became  employees  of  Security   National.
Administrative  functions  previously  performed  by the  Company  are now being
furnished to the Company under this Agreement.  The Company will pay to Security
National  $250,000  per  month or $3  million  per  year for the  Administrative
services.

Section 624.408 of the Florida Statutes  requires a stock life insurance company
to maintain minimum surplus on a statutory basis at the greater of $1,500,000 or
four percent of total  liabilities.  The Company's  required  statutory  minimum
surplus calculated in accordance with this section is approximately  $1,874,000.
If the capital and  surplus of the  Company  computed on such basis  should fall
below that amount,  then the Company's license to transact insurance business in
the State of Florida,  the Company's most significant  market,  could be revoked
unless the  deficiency  is promptly  corrected.  As of December  31,  2002,  the
Company had statutory  capital and surplus of $8,582,968,  well in excess of the
required minimum.

The  Risk-Based  Capital for Life and/or Health  Insurers  Model Act (the "Model
Act") was adopted by the National Association of Insurance  Commissioners (NAIC)
in 1992.  The main  purpose of the Model Act is to provide a tool for  insurance
regulators  to  evaluate  the  capital  resources  of insurers as related to the
specific risks,  which they have incurred and is used to determine whether there
is a need for possible  corrective action. The Model Act or similar  regulations
may have been or may be enacted by the various states.

The Model Act provides for four different levels of regulatory  action,  each of
which may be  triggered if an insurer's  Total  Adjusted  Capital is less than a
corresponding "level" of Risk-Based Capital ("RBC").

     The "Company  Action  Level" is triggered  if an insurer's  Total  Adjusted
     Capital is less than 200% of its "Authorized Control Level RBC" (as defined
     in the Model Act),  or less than 250% of its  Authorized  Control Level RBC
     and the insurer has a negative trend ("the Company Action  Level").  At the
     Company Action Level,  the insurer must submit a comprehensive  plan to the
     regulatory  authority of its state of domicile,  which  discusses  proposed
     corrective actions to improve its capital position.

     The  "Regulatory  Action Level" is triggered if an insurer's Total Adjusted
     Capital  is less than 150% of its  Authorized  Control  Level  RBC.  At the
     Regulatory  Action Level,  the regulatory  authority will perform a special
     examination of the insurer and issue an order specifying corrective actions
     that must be followed.

     The "Authorized  Control Level" is triggered if an insurer's Total Adjusted
     Capital is less than 100% of its Authorized  Control Level RBC, and at that
     level the  regulatory  authority is  authorized  (although not mandated) to
     take regulatory control of the insurer.

     The "Mandatory  Control Level" is triggered if an insurer's  Total Adjusted
     Capital is less than 70% of its  Authorized  Control level RBC, and at that
     level the regulatory authority must take regulatory control of the insurer.
     Regulatory control may lead to rehabilitation or liquidation of an insurer.

<PAGE>

Based on  calculations  using the NAIC  formula as of  December  31,  2002,  the
Company was well in excess of all four of the control levels listed.

The industry in which the Company is engaged is highly competitive. There are in
excess of 850 life insurance companies licensed in Florida,  where a substantial
amount of the Company's  premium  income is produced,  and there are  comparable
numbers of insurance companies licensed in Alabama,  Georgia,  Hawaii, Illinois,
Indiana,  Kentucky,  Louisiana,  Michigan,  Missouri,  Oklahoma, South Carolina,
Tennessee and Texas. Many of the Company's competitors have been in business for
longer periods of time, have substantially  greater financial resources,  larger
sales organizations,  and have broader  diversification of risks. A large number
of the  Company's  competitors  engage in business in many states and  advertise
nationally  while the Company  conducts  its business on a regional  basis.  The
Company is not a significant  factor in the life insurance business in any state
where the Company does business.

The states of Alabama,  Florida, Georgia, Hawaii, Illinois,  Indiana,  Kentucky,
Louisiana,  Michigan,  Missouri,  Oklahoma, South Carolina,  Tennessee and Texas
require that insurers  secure and retain a license or a certificate of authority
based on compliance with established  standards of solvency and demonstration of
managerial  competence.  The Company,  like other life  insurers,  is subject to
extensive regulation and supervision by state insurance regulatory  authorities.
Such regulation relates generally to such matters as minimum capitalization, the
nature of and  limitations on  investments,  the licensing of insurers and their
agents,  deposits of securities for the benefit and protection of policyholders,
the  approval of policy forms and premium  rates,  periodic  examination  of the
affairs of insurance  companies,  the  requirement of filing annual reports on a
specified form and the provision for various reserves and accounting standards.

The  Company  reinsures  or places a portion  of its  insured  risks  with other
insurers.  Reinsurance  reduces the amount of risk  retained  on any  particular
policy  and,  correspondingly,  reduces  the risk of loss to the  Company,  thus
giving it greater financial  stability.  Reinsurance also enables the Company to
write more  policies  and  policies in larger  amounts  than it would  otherwise
consider prudent. On the other hand,  reinsurance  potentially reduces earnings,
since a portion of the premiums  received must be paid to the insurers  assuming
the reinsured portion of the risk.

The Company  currently  cedes its new  reinsurance  to  Businessmen's  Assurance
Company  ("BMA")  and the  Reinsurance  Company of  Hannover,  both of which are
unaffiliated  reinsurers.  Under the terms of the  reinsurance  agreements,  the
Company cedes all risks in excess of the Company's current retention limits.

The  Company  currently  retains a maximum of $75,000 on any one life and lesser
amounts on substandard risks.

Reinsurance  for policy amounts in excess of the Company's  retention  limits is
ceded on a renewable  term  basis,  under  which the amount  reinsured  normally
decreases annually by the amount of increase in the policy reserve. In addition,
the  Company has  coinsurance  agreements  with  several  insurers,  under which
premiums are shared based upon the share of the risk assumed.

The Company remains directly liable to policyholders  for the full amount of all
insurance  directly  written by it,  even though all or a portion of the risk is
reinsured.  Reinsurers,  however, are obligated to reimburse the Company for the
reinsured  portion of any claims paid.  Consequently,  if any reinsurer  becomes
insolvent or is otherwise unable to make such  reimbursement,  the Company would
suffer an unexpected  loss. The Company has no reason to believe that any of its
reinsurers  will  be  unable  to  perform  their   obligations   under  existing
reinsurance agreements.

On  December  31,  1992,  the Company  entered  into a  Coinsurance  Reinsurance
Agreement with United Group Insurance Company  ("UGIC"),  now Mega Life. In this
agreement,  UGIC agreed to indemnify and the Company  agreed to transfer risk to
UGIC in the amount of 18% of all  universal  life premium  paying  polices which
were in force on December 31, 1992.  Mega Life is an A- rated  company with A.M.
Best and is an authorized reinsurer in the State of Florida.

As a result of the 1992 agreement,  the Company will continue to pay reinsurance
premiums  to Mega Life  while  receiving  ceding  commissions.  As a part of the
coinsurance  agreement,  Mega  Life  agreed  to share in the  expenses  of death
claims, surrenders, commissions, taxes and the funding of policy loans.

The Company does not assume any  reinsurance  at the present time other than its
minor  participation  in  Servicemembers'  Group Life  Insurance and other small
blocks of business.

<PAGE>

For  reporting  to state  regulatory  authorities  the  Company is  required  to
establish  policy  benefit and other  reserves that are calculated in accordance
with statutory  requirements and standards of actuarial practice and established
at amounts  which,  with  additions  from  premiums to be  received  and assumed
interest on policy reserves compounded  annually,  are believed to be sufficient
to meet policy  obligations  as they mature.  Life  reserves for the Company are
based  upon  the  Commissioner's  1958  and  1980  Standard  Ordinary  Table  of
Mortality,  with  interest  on  policies  computed at 3%, 3 1/2% , 4 1/2% or 5%.
Annuity  reserves are based on the 1983 and 2000  Individual  Annuity  Mortality
Tables,  with interest on policies  computed at 6 1/2%, 6 3/4%, 7%, 7 3/4%, or 8
1/4%. Reserves on the annuity portion of the Company's deposit term policies are
computed on the accumulation method. Reserves for universal life policies, which
comprise most of the Company's insurance in force, have been valued by using the
CRVM method.

In preparing  financial  statements in accordance with U.S.  generally  accepted
accounting  principles,  the cost of  insurance,  expense  charges and surrender
charges on universal  life  products  are  recognized  as revenue.  For "Annuity
Contracts"  with flexible terms,  amounts  received from  policyholders  are not
recognized  as revenue  but are  recorded  as  deposits  in a manner  similar to
interest-bearing instruments.  Accumulations on these universal life and annuity
contracts are held as "Policyholders'  Account Balances." For all other policies
(primarily  whole-life)  premiums  are  recorded  as revenue  and  reserves  are
calculated  using the net level premium  method.  Accumulation  values for these
types of policies are held as benefit reserves.  See "Future Policy Benefits" in
Note 1 of the Notes to Financial Statements included in this report.

The Company maintains its own policy files,  prepares its own policy forms (with
the assistance of its consulting actuaries), selects risks, calculates premiums,
prepares premium notices,  preauthorized checks and commission  statements,  and
maintains all of its accounting records.

The Company is not affected by Federal,  state or local  provisions  relating to
discharge  of  materials  into the  environment.  The  Company  has not  spent a
material  amount of money  during the last three  fiscal  years on research  and
development  activities.  The  business of the Company is not seasonal in nature
and is not  dependent  on the sources and  availability  of raw  materials.  The
business  of the  Company  is not  dependent  upon a  single  customer  or a few
customers,  and no  material  portion of the  Company's  business  is subject to
renegotiation of profits or termination at the election of the Government.

Item 2.  Properties.

The Company's  corporate  headquarters is located in a two story office building
in Lake Mary,  Florida,  which is owned by the  Company.  The  Company  occupies
approximately one-half of the second floor of the building.  One-hundred percent
of the remaining rentable space was leased as of December 31, 2002.

Item 3.  Legal Proceedings.

An action was brought  against the Company in July 1999 by Dorothy Ruth Campbell
in the Circuit  Court of Escambia  County,  Alabama.  The action  arose out of a
denial of coverage under a $10,000 insurance policy.  The claims were for breach
of contract, bad faith and fraudulent misrepresentation. In the action, Campbell
sought  compensatory and punitive damages plus interest.  The case was dismissed
by order of summary  judgment on January 21, 2003. The appeal time, if appeal is
taken, is 42 days.

An action was  brought  against  Southern  Security  Life  Insurance  Company by
National Group Underwriters,  Inc. ("NGU") in state court in the State of Texas.
The case was removed by the Company to the United States  District Court for the
Northern District of Texas, Fort Worth Division,  with Civil No.  4:01-CV-403-E.
An Amended  Complaint was filed on or about July 18, 2001. The Amended Complaint
asserts  that NGU had a  contract  with the  Company  wherein  NGU would  submit
applications for certain  policies of insurance to be issued by the Company.  It
is alleged that disputes have arisen  between NGU and the Company with regard to
the calculation and payment of certain  advanced  commissions as well as certain
production bonuses.

NGU  alleged  that it has been  damaged  far in  excess of the  $75,000  minimum
jurisdictional limits of this Court. NGU also seeks attorney's fees and costs as
well as prejudgment and postjudgment  interest. A second amended complaint and a
third amended  complaint  that  included a fraud claim were filed.  A motion was
filed by the Company to dismiss the third amended complaint, including the fraud
claim. The court denied the motion.  The Company has  counterclaimed for what it
believes to be a debit balance owing to it pursuant to the relationship  between
the parties with said counterclaim seeking a
<PAGE>

substantial  amount from NGU (the amount  potentially  subject to  reduction  as
premiums are received).  The Company is also seeking to recover  attorney's fees
and costs,  as well as  punitive  damages on three of its causes of action.  The
change of venue motion of the Company was denied.  Certain  discovery  has taken
place. The federal case was dismissed per stipulation. The matter was refiled in
Texas state  court,  Tarrant  County,  Case No. 348 195490 02. The claims of the
respective  parties are  essentially  the same as set forth above,  which claims
include  fraudulent  inducement  relative  to entering  into a contract,  fraud,
breach of contract,  breach of duty of good faith and fair  dealing,  attorneys'
fees  and  exemplary  damages.   Further  discovery  involving  the  parties  is
anticipated.  The  Company  intends to  vigorously  defend the matter as well as
prosecute its counterclaim.

An action was brought by Bernice Johnson against the Company in May, 2002 in the
Circuit Court of Jefferson County, Alabama, Civil Action No. CV02 2963. The face
amount of coverage  under the policy is $15,000.  The insured died in July 2001.
Claims  are made for  non-payment  of the policy  amount.  The claims for relief
include  misrepresentation,   mental  anguish  and  emotional  distress,  fraud,
intentional and bad faith non payment of the benefit,  intentional and bad faith
failure to investigate the claim for benefits, reckless and negligent and wanton
action relative to misrepresentation and/or concealment of facts, negligence and
the wanton hiring, training and supervision of agents. Compensatory and punitive
damages are sought along with  interest  and costs.  An answer has been filed by
the Company and discovery is in process.

The Company is not a party to any other legal  proceedings  outside the ordinary
course of the Company's  business or to any other legal  proceedings,  which, if
adversely determined, would have a material adverse effect on the Company or its
business.

Item 4. Submission of Matters to a Vote of Security Holders.

None

                                     PART II

Item 5. Market for the Company's Common Stock and Related Stockholder Matters.

     (a) Principal  Market and Stock Price.  The  principal  market on which the
Company's  common  stock  is  traded  is the  over-the-counter  market.  Trading
information  with  respect to the  Company's  shares is  available  through  the
National  Association of Securities Dealers Automated  Quotation (NASDAQ) System
under the symbol SSLI.

The table below presents the high and low market closed prices for the Company's
common  stock during the calendar  quarters  indicated,  as quoted in the NASDAQ
system. The quotations represent prices between dealers in securities and do not
include  retail  markups,  markdowns  or  commissions  and  do  not  necessarily
represent actual transactions.


Period (Calendar Year)                          Price Range
                                               -------------
                                        High                         Low
                                       -----                        -----
         2001
              First Quarter           $3.57                         $2.98
              Second Quarter           3.10                          2.97
              Third Quarter            3.17                          2.98
              Fourth Quarter           3.33                          2.67
         2002
              First Quarter            3.50                          3.01
              Second Quarter           3.30                          3.15
              Third Quarter            3.65                          3.19
              Fourth Quarter           4.25                          3.21
         2003
              First Quarter            5.96                          3.48

The above prices have been adjusted for the effect of annual stock dividends.


     (b) Approximate Number of Holders of Common Stock. There were 1,276 holders
of record of the Company's Common Stock at December 31, 2002.
<PAGE>

     (c)  Dividends.  The Company  has paid no cash  dividends  to  stockholders
during the past two years,  and it is not  anticipated  that any cash  dividends
will be paid at any time in the foreseeable  future. The payment of dividends by
the Company is subject to the  regulation of the State of Florida  Department of
Insurance. Under such regulation an insurance company may pay dividends, without
prior approval of the State of Florida Department of Insurance, equal to or less
than the  greater  of (a) 10% of its  accumulated  capital  gains  (losses)  and
accumulated  operating income (losses) (i.e.  unassigned surplus) or (b) certain
net  operating  profits  (losses) and  realized  capital  gains  (losses) of the
Company, as defined in the applicable  insurance  statutes.  In no case can such
dividends  be paid if the  Company  will  have  less  than  115% of the  minimum
required  statutory surplus as to policyholders  after the dividend is paid. The
maximum amount that the Company could pay as a dividend  during 2003 pursuant to
such regulation is $75,000.


<PAGE>

Item 6.  Selected Financial Data.

The  following  table  presents  selected  financial  data  (on  a  GAAP  basis)
concerning the Company and its financial results during the periods indicated.
<TABLE>
<CAPTION>

                                                                YEARS ENDED DECEMBER 31,

                                        2002             2001                 2000             1999               1998
Revenues:                              -----            -----                ------           ------             -----
<S>                                <C>            <C>                   <C>             <C>                   <C>
Net insurance revenues          $   7,075,257    $    6,736,027       $    6,698,869   $    6,901,546     $    7,228,227

Net investment income               3,835,420         3,866,966            3,935,607        3,909,373          3,587,147
Realized Gain (loss)
 on investments                        (1,038)           --                   --                --               525,181
Other revenue, net                       --              --                   --              715,128              --
                               --------------    --------------       --------------   --------------     --------------
Total Revenue                      10,909,639        10,602,993           10,634,476       11,526,047         11,340,555

Benefits, Losses & Expenses:
 Insurance living benefits          2,144,629         2,186,664            2,243,331        2,614,754          2,483,197
 Insurance death benefits           2,583,062         2,360,265            1,549,116        1,917,134          1,529,294
 Increase (decrease)
    in policy reserves                615,882           (64,341)           1,316,964          (78,324)           334,329
 Amortization of deferred
     policy acquisition costs       1,969,966         2,197,399            1,797,320        3,029,223          3,484,689
Operating expenses                  3,678,920         3,835,165            3,529,380        3,261,134          4,134,686
                               --------------    --------------       --------------   --------------     --------------
Total expenses                     10,992,459        10,515,152           10,436,111       10,743,921         11,966,195
Income (loss) before income
    taxes                             (82,820)           87,841              198,365          782,126           (625,640)
Income tax expense (benefit)          (12,254)           16,865               38,105          150,168           (241,907)
                               --------------    --------------       --------------   --------------     --------------
Net Income (loss)              $      (70,566)   $       70,976       $      160,260   $      631,958     $     (383,733)
                               ==============    ==============       ==============   ==============     ==============
Weighted average number of
    shares outstanding
    (basic and diluted)             1,979,291         1,907,989            1,907,989        1,907,989          1,907,989
                               --------------    --------------       --------------   --------------     --------------
Basic income (loss)
    per common share                    $(.04)             $.04                 $.08             $.33              $(.20)
                                        =====              ====                 ====             ====              =====
Diluted income (loss)
    per common share                    $(.04)             $.04                 $.08             $.33              $(.20)
                                        =====              ====                 ====             ====              =====

Shareholders' Equity           $   17,145,770    $   16,903,270       $   16,198,535   $   15,637,320     $   15,912,106
                               ==============    ==============       ==============   ==============     ==============
Shareholders' equity per
    Common share                        $8.56             $8.86                $8.49            $8.20              $8.34
                                        =====             =====                =====            =====              =====

Assets                         $   77,264,997    $   77,479,328       $   77,125,931   $   77,208,941     $   81,205,193
                               --------------    --------------       --------------   --------------     --------------
Life Insurance:
    Insurance in force         $1,526,778,000    $1,567,994,000       $1,369,808,000   $1,455,417,000     $1,467,529,000
                               --------------    --------------       --------------   --------------     --------------
Individual insurance
    issued during current
    year                       $   54,216,000    $   72,083,000       $   64,710,000   $   66,591,000     $   68,935,000
                               --------------    --------------       --------------   --------------     --------------
Long term obligation           $    1,000,000    $    1,000,000       $    1,000,000   $    1,000,000     $    1,000,000
                               --------------    --------------       --------------   --------------     --------------
Cash Dividends declared per
    common share                         $.00              $.00                 $.00             $.00               $.00
                                         ====              ====                 ====             ====               ====
</TABLE>
<PAGE>

Item 7. Management's  discussion and analysis of financial condition and results
of operation.

Overview

This analysis of the results of operations  and financial  condition of Southern
Security Life should be read in conjunction with the Selected Financial Data and
Financial  Statements  and Notes to the  Financial  Statements  included in this
report.

The Company has primarily  issued three types of insurance  products:  universal
life,  10-Pay  Whole Life with an Annuity  Rider,  and final  expense  products.
Universal  life  provides  insurance  coverage with  flexible  premiums,  within
limits,  which allow  policyholders  to accumulate cash values.  The accumulated
cash values are credited with tax-deferred  interest, as adjusted by the Company
on a periodic basis.  Deducted from the cash  accumulations  are  administrative
charges and mortality  costs.  Should a policy surrender in its early years, the
Company assesses a surrender fee against the cash value accumulations based on a
graded formula.

Final expense products are traditional endowment type insurance policies written
for the senior market.  Because the products are written to a senior market they
are designed to accommodate  adverse health  conditions.  Because of the size of
the policies,  the products are usually  issued with only limited  underwriting.
The  coverage  size  of the  policy  is  roughly  equivalent  to  the  insured's
anticipated funeral costs.

The 10-Pay Whole Life with an Annuity  Rider product is designed for the student
loan market.  The savings  aspect of the Annuity Rider is marketed as a tool for
parents to help fund their children's higher  education.  The product is offered
to parents who have children under the age of 25.

The Company  established a lead generation  program that has been coupled with a
recruiting program for new sales agents to help generate new business.

An additional source of income to the Company is investment  income. The Company
invests those funds  deposited by  policyholders  of universal  life and annuity
products in debt and equity  securities,  mortgage loans, and warehouse mortgage
loans on a short-term  basis before selling the loans to investors in accordance
with the requirements and laws governing life insurance  companies,  in order to
earn  interest and dividend  income,  a portion of which is credited back to the
policyholders.  Interest  rates  and  maturities  of  the  Company's  investment
portfolio play an important  part in determining  the interest rates credited to
policyholders.

Product  profitability  is  affected  by  several  different  factors,  such  as
mortality  experience  (actual versus  expected),  interest rate spreads (excess
interest earned over interest credited to policyholders)  and controlling policy
acquisition costs and other costs of operation. The results of any one reporting
period  may be  significantly  affected  by the  level of death  claims or other
policyholder benefits incurred due to the Company's relatively small size.

Significant Accounting Policies and Estimates

The following is a brief summary of our  significant  accounting  policies and a
review of our most critical accounting estimates.  For a complete description of
our significant accounting policies, see Note 1 to our financial statements.

In accordance with accounting principles generally accepted in the United States
(GAAP),  premiums and  considerations  received for interest  sensitive products
such as  universal  life  insurance  and  ordinary  annuities  are  reflected as
increases in liabilities for policyholder  account balances and not as revenues.
Revenues  reported for these products  consist of policy charges for the cost of
insurance,  administration  charges,  amortization of policy initiation fees and
surrender  charges assessed against  policyholder  account  balances.  Surrender
benefits  paid  relating  to  these  products  are  reflected  as  decreases  in
liabilities for policyholder  account balances and not as expenses.  The Company
receives  investment  income  earned  from  the  funds  deposited  into  account
balances,  a portion of which is passed through to the policyholders in the form
of interest  credited.  Interest  credited to policyholder  account balances and
benefit  claims in excess of  policyholder  account  balances  are  reported  as
expenses in the financial statements.

<PAGE>

Premium revenues reported for traditional life insurance products are recognized
as revenues when due. Future policy benefits are recognized as expenses over the
life of the policy by means of the provision for future policy benefits.

The costs related to acquiring new business,  including certain costs of issuing
policies and other variable selling expenses (principally commissions),  defined
as deferred  policy  acquisition  costs,  are  capitalized  and  amortized  into
expense.  For  traditional  life  products,  these costs are amortized  over the
premium  paying  period of the related  policies,  in proportion to the ratio of
annual premium revenues to total anticipated premium revenues.  Such anticipated
premium  revenues are  estimated  using the same  assumption  used for computing
liabilities for future policy benefits and are generally "locked in" at the date
the  policies  are issued.  For  interest  sensitive  products,  these costs are
amortized  generally in  proportion  to expected  gross  profits from  surrender
charges and  investment,  mortality and expense  margins.  This  amortization is
adjusted  when the  Company  revises  the  estimate  of current or future  gross
profits or margins. For example, deferred policy acquisition costs are amortized
earlier  than  originally  estimated  when policy  terminations  are higher than
originally  estimated  or when  investments  backing  the  related  policyholder
liabilities are sold at a gain prior to their anticipated maturity.

Death and other  policyholder  benefits  reflect  exposure to mortality risk and
fluctuate  from  year to year on the level of claims  incurred  under  insurance
retention  limits.  The  profitability  of the Company is primarily  affected by
fluctuations in mortality, other policyholder benefits, expense levels, interest
spreads  (i.e.,  the  difference  between  interest  earned on  investments  and
interest  credited to  policyholders)  and  persistency.  We have the ability to
mitigate  adverse  experience  through  adjustments to credited  interest rates,
policyholder dividends or cost of insurance charges.

The  preparation  of  financial  statements  in  conformity  with GAAP  requires
management to make estimates and assumptions that affect the reported amounts of
assets,  liabilities,  revenues and expenses and the  disclosure  of  contingent
assets and liabilities.  It is reasonably  possible that actual experience could
differ from the estimates and  assumptions  utilized which could have a material
impact  on  the  financial  statements.  The  following  is  a  summary  of  our
significant accounting estimates, and critical issues that impact them:

Fixed Maturities Available for Sale

Securities available-for-sale are carried at fair value, with unrealized holding
gains and losses  reported in accumulated  other  comprehensive  income which is
included in stockholders'  equity after adjustment for deferred income taxes and
deferred acquisition costs related to universal life products.

The Company uses fair market values based on National  Association  of Insurance
Commissioners  (NAIC) values,  versus values  associated  with normal  marketing
pricing services. The Company considers the difference to be immaterial.

The Company is required to exercise  judgment to determine when a decline in the
value of a  security  is other  than  temporary.  When the  value of a  security
declines and the decline is determined to be other than temporary,  the carrying
value of the  investment  is reduced  to its fair  value and a realized  loss is
recorded to the extent of the decline.

Deferred Acquisition Costs

Amortization  of  deferred  policy  acquisition  costs  for  interest  sensitive
products is dependent  upon  estimates  of current and future  gross  profits or
margins on this business. Key assumptions used include the following:

o   Yield on investments supporting the liabilities
o   Amount of interest or dividends credited to the policies
o   Amount of policy fees and charges
o   Amount of expenses necessary to maintain the policies, and
o   Amount of death and surrender benefits and the length of time the policies
    will stay in force.

These estimates, which are revised periodically, are based on historical results
and our best estimate of future expenses.

<PAGE>

Future Policy Benefits

Reserves for future policy  benefits for  traditional  life  insurance  products
requires the use of many  assumptions,  including  the duration of the policies,
mortality experience,  expenses, investment yield, lapse rates, surrender rates,
and dividend crediting rates.

These assumptions are made based upon historical experience,  industry standards
and a best  estimate of future  results  and,  for  traditional  life  products,
include a provision for adverse deviation. For traditional life insurance,  once
established for a particular series of products, these assumptions are generally
held constant.

Unearned Revenue

The  universal  life  products  the  Company  sells  have a  significant  policy
initiation fees (front-end load), which are deferred and amortized into revenues
over the estimated expected gross profits from surrender charges and investment,
mortality and expense margins.  The same issues that impact deferred acquisition
costs would apply to unearned revenue.

Results of Operations

2002 Compared to 2001

Total revenues  increased by $307,000,  or 2.9%, to $10,910,000  for fiscal year
2002 from  $10,603,000 for fiscal year 2001.  Offsetting some of the increase in
total revenues was a $32,000 reduction in net investment income.

Net insurance revenues increased by $339,000,  or 5.0%, to $7,075,000 for fiscal
year 2002 from  $6,736,000 for fiscal year 2001. This increase was primarily the
result of an increase in traditional life sales.

Net  investment  income  decreased by $32,000,  or .8%, to $3,835,000 for fiscal
year 2002 from  $3,867,000  for fiscal  year  2001.  Investment  yield  slightly
decreased for the fiscal year 2002 from 7.65% in 2001 to 7.41% in 2002.

Benefits and claims  increased by $861,000,  or 19.2%,  to $5,344,000 for fiscal
year 2002 from  $4,483,000 for the  comparable  period in 2001. The increase was
primarily due to an increase in traditional life reserves and death claims.

The amortization of deferred policy acquisition costs decreased by $227,000,  or
10.3%,  to $1,970,000  for fiscal year 2002 from  $2,197,000  for the comparable
period in 2001. The decrease in amortization  expense was in line with actuarial
assumptions.

Operating expenses decreased by $156,000, or 4.1%, to $3,679,000 for fiscal year
2002 from $3,835,000 for the same period in 2001. The decrease was primarily due
to a reduction in general office expenses.

2001 Compared to 2000

Total revenues decreased by $31,000, or .3%, to $10,603,000 for fiscal year 2001
from  $10,634,000  for fiscal year 2000.  Contributing to this decrease in total
revenues was a $68,000 reduction in net investment income.

Net insurance  revenues  increased by $37,000,  or .6%, to $6,736,000 for fiscal
year 2001 from  $6,699,000 for fiscal year 2000. This increase was primarily the
result of an increase in traditional life sales.

Net investment  income  decreased by $68,000,  or 1.7%, to $3,867,000 for fiscal
year 2001 from  $3,935,000  for fiscal  year  2000.  Investment  yield  slightly
decreased for the fiscal year 2001 from 7.8% in 2000 to 7.65% in 2001.

Benefits and claims  decreased by $626,000,  or 12.2%,  to $4,483,000 for fiscal
year 2001 from  $5,109,000 for the  comparable  period in 2000. The decrease was
primarily due to a decrease in traditional life reserves.

The amortization of deferred policy acquisition costs increased by $400,000,  or
22.3%,  to $2,197,000 for fiscal year 2001,  from  $1,797,000 for the comparable
period in 2000. The increase in amortization  expense was in line with actuarial
assumptions.

<PAGE>

Operating expenses increased by $305,000, or 8.6%, to $3,835,000 for fiscal year
2001 from $3,530,000 for the same period in 2000. The increase was primarily due
to increased  marketing and legal  expenses and an increase in the provision for
doubtful accounts.

Liquidity and Capital Resources

The  Company  attempts  to  match  the  duration  of  invested  assets  with its
policyholder  liabilities.  The  Company may sell  investments  other than those
held-to-maturity in the portfolio to help in this timing; however, to date, that
has not been  necessary.  The  Company  purchases  short-term  investments  on a
temporary  basis to meet the  expectations  of  short-term  requirements  of the
Company's products. The Company's investment philosophy is intended to provide a
rate of return which will persist during the expected  duration of  policyholder
liabilities regardless of future interest rate movements.

The Company's  investment  policy is to invest  predominantly  in fixed maturity
securities,  mortgage loans, and warehouse  mortgage loans on a short-term basis
before selling the loans to investors in accordance  with the  requirements  and
laws governing life insurance companies.  Bonds owned by the Company amounted to
$22,412,000  as of December 31, 2002 as compared to  $24,521,000  as of December
31,  2001.  This  represents  45.5%  and 49.8% of the  total  investments  as of
December  31, 2002 and December 31,  2001,  respectively.  Generally,  all bonds
owned  by the  Company  are  rated  by the  National  Association  of  Insurance
Commissioners.  Under this rating  system,  there are nine  categories  used for
rating bonds.  At December 31, 2002,  and at December 31, 2001,  the Company had
investments  in bonds  in  rating  categories  three  through  nine,  which  are
considered non-investment grade of $485,000 and $482,000, respectively.

If market conditions were to cause interest rates to change, the market value of
the fixed income portfolio  (approximately  $24.852 million) could change by the
following  amounts  based on the  respective  basis  point  swing (the change in
market values were calculated using a modeling technique):

(in millions of dollars)       -200bps      -100bps      +100bps       +200bps

Change in Market Value          $1.395      $.672        $(.624)      $(1.205)

The  Company  has no  other  financial  instruments  that  would  be  materially
susceptible to market risk.

The Company's insurance operations have historically  provided adequate positive
cash flow enabling the Company to continue to meet operational  needs as well as
increase  its  investment-grade  securities  to  provide  ample  protection  for
policyholders.

The Company has classified  certain of its fixed income  securities as available
for  sale,  with the  remainder  classified  as held to  maturity.  However,  in
accordance with Company policy, any such securities purchased in the future will
be classified as held to maturity. Business conditions,  however, may develop in
the future  which may  indicate a need for a higher  level of  liquidity  in the
investment  portfolio.  In  that  event  the  Company  believes  it  could  sell
short-term  investment  grade  securities  before  liquidating   higher-yielding
longer-term securities.

The Company is subject to risk based capital guidelines established by statutory
regulators  requiring  minimum  capital  levels based on the  perceived  risk of
assets, liabilities,  disintermediation, and business risk. At December 31, 2002
and December 31, 2001, the Company exceeded the regulatory criteria.

Lapse  rates  measure the amount of  insurance  terminated  during a  particular
period.  The  Company's  lapse  rate for  life  insurance  in 2002 was  11.9% as
compared to a rate of 13.8% for 2001.

Effective December 17, 1998, the Company entered into an Administrative Services
Agreement with Security National Financial Corporation ("SNFC"). Under the terms
of the  agreement,  SNFC has agreed to provide the Company with certain  defined
administrative and financial services,  including accounting services, financial
reports and statements,  actuarial,  policyholder services,  underwriting,  data
processing,   legal,  building  management,   marketing  advisory  services  and
investment  services.  In consideration for the services to be provided by SNFC,
the Company shall pay SNFC an administrative services fee of $250,000 per month,
provided,  however,  that such fee shall be  reduced  to zero for so long as the
capital and surplus of the Company is less than or equal to  $6,000,000,  unless
the Company and SNFC  otherwise  agree in writing and such agreement is approved
by the Florida Department of Insurance.

<PAGE>

The administrative services fee may be increased,  beginning on January 1, 2001,
to reflect  increases in the Consumer  Price Index,  over the index amount as of
January 1, 2000. The  Administrative  Services  Agreement shall remain in effect
for an initial term expiring on December 16, 2003. The term of the agreement may
be  automatically  extended for  additional  one-year  terms  unless  either the
Company or SNFC shall deliver a written notice on or before September 30, of any
year  stating to the other its  desire not to extend the term of the  agreement.
However, in no event can the agreement be terminated prior to December 16, 2003.

Student loans are a service the Company has  historically  made available to the
public as well as an  investment.  While the Company  anticipates  the  seasonal
demand  for  student  loan  funds and the  subsequent  sale of such loans to the
Student Loan Marketing Association (SLMA), there are times when additional funds
are  required  to meet  demand  for  student  loans  until such time as the sale
thereof to SLMA can be  completed.  In 1997 the Company  renewed its  $5,000,000
line of credit  with SLMA until 2007 in order to meet these  seasonal  borrowing
requirements.  The Company  made no draws  against  this line of credit  through
December 31, 2002.

The Company began a new association with USA Group, CAP Program in 1996, for the
purpose of making more student loan funds available  without  increased costs to
the Company. This association aided in eliminating borrowings for 2002 and 2001.

The Company has leased approximately 80% of the available space in its principal
office building and does not anticipate  significant capital expenditures to the
rental space.

The Private  Securities  Litigation  Reform Act of 1995 (the  "Act")  provides a
"safe harbor" for  forward-looking  statements to encourage companies to provide
prospective  information  about their  businesses  without fear of litigation so
long as those statements are identified as  forward-looking  and are accompanied
by meaningful  cautionary  statements  identifying  important factors that could
cause  actual  results  to  differ  materially  from  those  projected  in  such
statements.  The  company  desires  to  take  advantage  of  the  "safe  harbor"
provisions of the Act.

This Annual Report of Form 10-K contains  forward-looking  statements,  together
with related  data and  projections,  about the  Company's  projected  financial
results and its future plans and strategies.  However,  actual results and needs
of  the  Company  may  vary  materially  from  forward-looking   statements  and
projections  made from time to time by the Company on the basis of  management's
then-current expectations. The business in which the Company is engaged involves
changing and competitive  markets,  which may involve a high degree of risk, and
there can be no assurance that  forward-looking  statements and projections will
prove accurate.

Factors that may cause the Company's  actual results to differ  materially  from
those contemplated or projected, forecast, estimated or budgeted in such forward
looking  statements  include among  others,  the  following  possibilities:  (i)
heightened competition,  including the intensification of price competition, the
entry  of new  competitors,  and the  introduction  of new  products  by new and
existing competitors;  (ii) adverse state and federal legislation or regulation,
including  decreases  in rates,  limitations  on premium  levels,  increases  in
minimum capital and reserve requirements,  benefit mandates and tax treatment of
insurance products;  (iii) fluctuations in interest rates causing a reduction of
investment  income or increase in  interest  expense and in the market  value of
interest rate sensitive investment;  (iv) failure to obtain new customer, retain
existing customers or reductions in policies in force by existing customers; (v)
higher  service,  administrative,  or  general  expense  due  to  the  need  for
additional  advertising,  marketing,  administrative  or management  information
systems  expenditures;  (vi) loss or retirement of key  executives or employees;
(vii) increases in medical costs;  (viii) changes in the Company's liquidity due
to changes in asset and  liability  matching;  (ix)  restrictions  on  insurance
underwriting based on genetic testing and other criteria; (x) adverse changes in
the ratings obtained by independent  rating  agencies;  (xi) failure to maintain
adequate  reinsurance;  (xii) possible  claims  relating to sales  practices for
insurance  products and claim denials and (xiii) adverse trends in mortality and
morbidity.

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  ("SFAS")  No. 142,   "Goodwill  and  Other
Intangible Assets".  Under SFAS No. 142,  amortization of goodwill is precluded;
however,  its  recoverability  must be periodically (at least annually) reviewed
and tested for  impairment.  Goodwill must be tested at the reporting unit level
for  impairment  in the year of adoption,  including  an initial test  performed
within six  months of  adoption.  If the  initial  test  indicates  a  potential
impairment,  then a more detailed analysis to determine the extent of impairment
must be completed  within twelve months of adoption.  SFAS No. 142 also requires
that  useful  lives for  intangibles  other  than  goodwill  be  reassessed  and
remaining  amortization  periods be adjusted  accordingly.  The adoption of SFAS
No. 142 did not have a material impact on the Company's  financial  condition or
results of operations.

<PAGE>

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal of Long-Lived Assets". SFAS No. 144 establishes an accounting model for
long-lived  assets to be  disposed  of by sale that  applies  to all  long-lived
assets,  including  discontinued  operations.  SFAS No. 144  requires that those
long-lived assets be measured at the lower of carrying amount or fair value less
cost to sell,  whether  reported in  continuing  operations  or in  discontinued
operations.   The  provisions  of  SFAS  No. 144  are  effective  for  financial
statements issued for fiscal years beginning after December 15,  2001.  Adoption
of SFAS  No. 144  did not have a  material  impact  on the  Company's  financial
condition or results of operations.

In April 2002, FASB issued SFAS No. 145,  "Rescission of FASB Statements  No. 4,
44, and 64,  Amendment of FASB  Statement  No. 13,  and Technical  Corrections".
Under   historical   guidance,   all  gains  and  losses   resulting   from  the
extinguishment  of  debt  were  required  to be  aggregated  and,  if  material,
classified as an  extraordinary  item,  net of related  income tax effect.  SFAS
No.145  rescinds  that  guidance  and  requires  that  gains  and  losses  from
extinguishments  of debt be classified as  extraordinary  items only if they are
both unusual and infrequent in occurrence. SFAS No. 145 also amends SFAS No. 13,
"Accounting for Leases" for the required  accounting  treatment of certain lease
modifications that have economic effects similar to sale-leaseback transactions.
SFAS No. 145  requires  that those lease  modifications  be accounted for in the
same manner as  sale-leaseback  transactions.  The  provisions  of SFAS  No. 145
related to SFAS No. 13 are effective for  transactions  occurring  after May 15,
2002.  Adoption of the provisions of SFAS No. 145 related to SFAS No. 13 did not
have a  material  impact on the  Company's  financial  condition  or  results of
operations.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities",  which  addresses  financial  accounting and
reporting for costs  associated  with exit or disposal  activities and nullifies
EITF Issue No. 94-3,  "Liability  Recognition for Certain  Employee  Termination
Benefits and Other Costs to Exit an Action (including  Certain Costs Incurred in
a Restructuring)"  ("Issue 94-3"). The principal difference between SFAS No. 146
and  Issue  94-3 is that  SFAS  No. 146  requires  that a  liability  for a cost
associated with an exit or disposal activity be recognized when the liability is
incurred,  rather  than at the date of an entity's  commitment  to an exit plan.
SFAS No. 146 is effective  for exit or disposal  activities  after  December 31,
2002. Based upon a preliminary review, adoption of SFAS No. 146 would not have a
material impact on the Company's financial condition or results of operations.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness  of Others" ("FIN 45").  FIN 45 requires  certain  guarantees to be
recorded at fair value and also  requires a guarantor  to make new  disclosures,
even when the likelihood of making  payments  under the guarantee is remote.  In
general, the interpretation  applies to contracts or indemnification  agreements
that contingently require the guarantor to make payments to the guaranteed party
based on changes in an underlying that is related to an asset,  liability, or an
equity security of the guaranteed  party.  The recognition  provisions of FIN 45
are effective on a prospective  basis for  guarantees  issued or modified  after
December 31,  2002.  The  disclosure  requirements  are  effective for financial
statements of interim and annual periods ending after  December 15,  2002. Based
upon a preliminary review,  adoption of FIN 45 not have a material impact on the
Company's financial condition or results of operations.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation - Transition  and Disclosure and Amendment to FASB No. 123",  which
provides  three  optional   transition  methods  for  entities  that  decide  to
voluntarily  adopt  the  fair  value  recognition  principles  of SFAS  No. 123,
"Accounting  for  Stock  Issued  to  Employees",  and  modifies  the  disclosure
requirements  of that  Statement.  Under  the  prospective  method,  stock-based
compensation expense is recognized for awards granted after the beginning of the
fiscal  year in which  the  change  is made.  The  modified  prospective  method
recognizes  stock-based  compensation expense related to new and unvested awards
in the year of change  equal to that which would have been  recognized  had SFAS
No. 123 been adopted as of its  effective  date,  fiscal years  beginning  after
December 15,   1994.  The  retrospective  restatement  method  recognizes  stock
compensation costs for the year of change and restates financial  statements for
all prior periods presented as though the fair value  recognition  provisions of
SFAS No. 123 had been adopted as of its effective  date.  Since the Company does
not intend to voluntarily  adopt the fair value provisions of FASB 123, adoption
of SFAS 148  would not have a  material  effect on the  financial  condition  or
results of operations of the Company. However, pro forma disclosures required by
SFAS 148 will be included in the Company's future interim  financial  statements
when necessary.

<PAGE>

In January 2003, the FASB issued  Interpretation 46,  "Consolidation of Variable
Interest  Entities"  ("FIN  46"),  which  requires  an  enterprise  to assess if
consolidation  of an entity is  appropriate  based  upon its  variable  economic
interests in a variable  interest  entity (VIE).  The initial  determination  of
whether  an  entity  is a VIE  shall be made on the date at which an  enterprise
becomes  involved  with the  entity.  A VIE is an  entity  in which  the  equity
investors do not have the characteristics of a controlling financial interest or
do not have  sufficient  equity at risk for the entity to finance its activities
without  additional  subordinated  financial  support  from  other  parties.  An
enterprise  shall  consolidate  a VIE if it has a  variable  interest  that will
absorb a majority of the VIE's expected losses if they occur, receive a majority
of the  entity's  expected  residual  returns if they occur or both. A direct or
indirect ability to make decisions that significantly  affect the results of the
activities of a VIE is a strong indication that an enterprise has one or both of
the characteristics that would require consolidation of the VIE.

FIN 46 is effective for new VIE's established subsequent to January 31, 2003 and
for existing  VIE's as of July 1,  2003.  Based upon a preliminary  review,  the
adoption of FIN 46 would not have a material  impact on the Company's  financial
condition or results of  operations as there were no material  VIE's  identified
which would require  consolidation.  FIN 46 further  requires the  disclosure of
certain  information  related to VIE's in which the Company  holds a significant
variable interest.  The Company does not believe that it owns any such interests
that require disclosure at this time.

<PAGE>

Item 8.  Financial Statements and Supplementary Data.

The following  financial  statements of Southern Security Life Insurance Company
are included in Part II, Item 8:






                                                                 Page
                                                                Number

Independent Auditors' Report......................................19

Balance Sheet-December 31, 2002 and 2001..........................20

Statement of Operations - years ended
December 31, 2002, 2001 and 2000..................................22

Statement of Shareholders' Equity-years
ended December 31, 2002, 2001 and 2000............................23

Statement of Cash Flows - years ended
December 31, 2002, 2001 and 2000..................................24

Notes to Financial Statements.....................................26

<PAGE>

                         Report of Independent Auditors













Board of Directors & Shareholders
Southern Security Life Insurance Company:




We have  audited  the  accompanying  balance  sheet of  Southern  Security  Life
Insurance Company as of December 31, 2002 and 2001 and the related statements of
operations,  shareholders'  equity,  and cash  flows for the three  years in the
period ended  December 31, 2002. In connection  with our audits of the financial
statements, we have also audited the amounts included in the financial statement
schedules as listed in the accompanying  index under Item 14(a). These financial
statements  and  financial  statement  schedules are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  Southern  Security  Life
Insurance  Company  at  December  31,  2002 and  2001,  and the  results  of its
operations  and its cash flows for the three years in the period ended  December
31, 2002, in conformity with  accounting  principles  generally  accepted in the
United States of America.  Also in our opinion,  the related financial statement
schedules,  when considered in relation to the basic financial  statements taken
as a whole, present fairly, in all material respects,  the information set forth
therein.

Tanner + Co.

Salt Lake City, Utah
March 27, 2003

<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                  Balance Sheet

                           December 31, 2002 and 2001

Assets                                                 2002            2001
Investments (note 3):
    Fixed maturities held-to-maturity
      (fair value, $4,167,028 and
      $3,250,894 at December 31,
      2002 and 2001, respectively)                   $3,971,539       $3,156,650
    Securities available-for-sale,
      at fair value:
      Fixed maturities (cost of
        $17,078,241at December 31,
        2002 and $20,459,833 at
        December 31, 2001)                           18,439,961       21,364,731
      Equity securities
        (cost, $316,293 and
        $316,293 at December 31,
        2002 and 2001, respectively)                    309,218          372,183
    Mortgage loans                                    2,244,597        2,268,292
    Policy and student loans                          8,027,736        8,181,223
    Short-term investments (note 11)                 16,283,759       13,860,534
                                                    -----------      -----------
        Total Investments                            49,276,810       49,203,613
                                                    -----------      -----------
Cash and cash equivalents                             3,067,284        1,969,055
Accrued investment income                               473,789          613,280
Deferred policy acquisition costs
    (note 4)                                         13,391,535       12,974,390
Policyholders' account balances on
    deposit with reinsurer (note 7)                   6,955,691        7,148,068
Reinsurance receivable (note 7)                         279,090          569,163
Receivables:
    Agent balances, net                                 776,244        1,005,535
    Other                                               614,150          722,075
Property and equipment, net,
    at cost (note 5)                                  2,430,404        2,491,062
Investment in affiliate at cost                              --          783,087
                                                    -----------      -----------
    Total Assets                                    $77,264,997      $77,479,328
                                                    ===========      ===========














See accompanying notes to financial statements.

<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                            Balance Sheet (continued)

                           December 31, 2002 and 2001



Liabilities and Shareholders' Equity                        2002          2001
Liabilities:
    Policy liabilities and accruals (notes 6 and 7):    $3,517,481    $2,901,599
  Future policy benefits:
      Policyholders' account balances                   47,222,857    47,601,259
      Unearned revenue                                   4,551,265     4,694,563
      Other policy claims and benefits payable             701,312     1,147,403
    Other policyholders' funds, dividend
      and endowment accumulations                           78,811        64,045
    Funds held related to reinsurance
      treaties (note 7)                                  1,334,963     1,379,640
    Note payable to related party
      (note 9)                                           1,000,000     1,000,000
    Due to affiliated insurance
      agency (note 11)                                      83,941       193,689
    General expenses accrued                                98,480        93,436
    Unearned investment income                             355,529       357,322
    Other liabilities                                      111,786       247,665
    Income taxes (note 10)                               1,062,802       895,437
                                                       -----------   -----------
        Total liabilities                               60,119,227    60,576,058
                                                       -----------   -----------
Shareholders' equity (notes 2,3 and 12):
    Common stock, $1 par, authorized
      3,000,000 shares; issued and out-
      standing, 2,003,388 shares in 2002
      and 1,907,989 in 2001                              2,003,388     1,907,989
    Capital in excess of par                             4,267,189     4,011,519
    Accumulated other comprehensive
        income                                             871,197       558,131
    Retained earnings                                   10,003,996    10,425,631
                                                       -----------   -----------
        Total shareholders' equity                      17,145,770    16,903,270
Commitments and contingencies
    (notes 7 and 15)                                       --            --
                                                       -----------   -----------
        Total liabilities and shareholders' equity     $77,264,997   $77,479,328
                                                       ===========   ===========








See accompanying notes to financial statements.

<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                             Statement of Operations

                  Years ended December 31, 2002, 2001 and 2000


                                           2002            2001           2000
Revenues:
    Net insurance revenues             $7,075,257      $6,736,027    $6,698,869
    Net investment income
       (notes 3 and 11)                 3,835,420       3,866,966     3,935,607

    Realized loss on investments           (1,038)         --             --
                                     ------------     -----------   -----------
       Total revenues                  10,909,639      10,602,993    10,634,476
                                     ------------     -----------   -----------
Benefits, claims and expenses:

    Benefits and claims                 5,343,573       4,482,588     5,109,411
    Amortization of deferred
      policy acquisition costs
      (note 4)                          1,969,966       2,197,399     1,797,320
    Operating expenses
      (notes 9 and 11)                  3,678,920       3,835,165     3,529,380
                                      -----------     -----------   -----------
    Total benefits, claims
        and expenses                   10,992,459      10,515,152    10,436,111
                                      -----------     -----------   -----------
 Income (loss) before
    income taxes                          (82,820)         87,841       198,365

Income tax (benefit) expense
    (note 10)                             (12,254)         16,865        38,105
                                        ---------     -----------   -----------
Net income (loss)                       $ (70,566)    $    70,976   $   160,260
                                        =========     ===========   ===========
Basic and diluted net  income
   (loss) per share
    of common stock (note 12)               $(.04)           $.04          $.08
                                            =====            ====          ====


















See accompanying notes to financial statements.

<PAGE>
<TABLE>
<CAPTION>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                        Statement of Shareholders' Equity

                  Years ended December 31, 2002, 2001 and 2000



                                                                                   Accumulated
                                                                    Capital           other
                                        Common        Stock        in excess      comprehensive  Retained
                                        Shares        Amount        of par           income      earnings          Total
                                     -----------    -----------   ------------   -------------- ------------     ------------
<S>                                  <C>            <C>           <C>             <C>            <C>           <C>
Balances, January 1, 2000             1,907,989     $1,907,989     $4,011,519      $(476,583)    $10,194,395     $15,637,320

Comprehensive Income (loss):
     Net income for the year             --             --             --              --            160,260         160,260
     Unrealized appreciation of
       securities available  for sale    --             --             --            400,955          --             400,955
                                     ----------    ------------    -----------    ----------     ------------    ------------
Total comprehensive gain                                                                                             561,215

Balances, December 31, 2000           1,907,989      1,907,989      4,011,519        (75,628)     10,354,655      16,198,535
                                     ----------     ----------     ----------     ----------     -----------     -----------
Comprehensive Income (loss):
     Net income for the year             --             --             --             --              70,976          70,976
     Unrealized appreciation of
       securities available  for sale    --             --             --            633,759           --            633,759
                                     ----------    -----------     ----------    -----------     ------------    -----------
Total comprehensive gain                                                                                             704,735
                                                                                                                 -----------
Balances, December 31, 2001           1,907,989      1,907,989      4,011,519        558,131      10,425,631      16,903,270
                                     ----------    -----------     ----------     ----------     -----------     -----------
Comprehensive Income (loss):
     Net loss for the year               --             --             --             --             (70,566)        (70,566)
     Unrealized appreciation of
       securities available  for sale    --             --             --           313,066              --          313,066
                                     -----------   ------------    -----------    ---------     ------------     -----------
Total comprehensive gain                                                                                             242,500
                                                                                                                 -----------
Stock dividend                           95,399         95,399        255,670         --            (351,069)         --
                                     ----------    -----------     -----------    ----------    ------------     -----------

Balances, December 31, 2002           2,003,388     $2,003,388     $4,267,189       $871,197     $10,003,996     $17,145,770
                                     ==========    ===========     ==========     ==========     ===========     ===========
</TABLE>

See accompanying notes to financial statements.

<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                             Statement of Cash Flows

                  Years ended December 31, 2002, 2001 and 2000



                                             2002        2001        2000
Cash flows provided by (used in)
operating activities:
      Net income (loss)                   $(70,566)    $70,976      $160,260
      Adjustments to reconcile net income
            (loss) to net cash provided
             by operating activities:
      Depreciation and amortization        196,497        270,792     260,956
      Net realized loss                      1,038             --       --
      Loss on disposal of property,
            plant & equipment                  --             --        1,886
      Deferred income taxes (benefit)      (16,500)        22,623      (9,426)
      Amortization of deferred
            policy acquisition costs     1,969,966      2,197,399   1,797,320
      Acquisition costs deferred        (2,129,428)    (1,898,971) (2,206,125)
      Change in assets and liabilities
            affecting cash provided by operations:
            Accrued investment income      139,491         (2,806)    (27,566)
            Accounts receivable            337,216       (239,665)    (78,683)
            Reinsurance receivable         290,073       (244,370)     48,666
            Other policy claims and
                  future benefits payable  169,791        502,866   1,356,753
            Policyholders'
             account balances            2,107,681      2,119,312   2,080,769
            Funds held under
               reinsurance                (44,677)       (37,576)    (58,296)
            Unearned premiums            (297,910)      (291,269)   (331,998)
            Dividend and endowment
               accumulations               14,766         (8,845)      3,101
            Payable to affiliated
              insurance agent            (109,748)        47,894     (44,096)
            Income taxes payable            --           (57,470)    (46,738)
            Other liabilities            (132,625)       182,378     (16,125)
                                       ----------     ----------  ----------
      Net cash provided by
        operating activities           $2,425,065     $2,633,268  $2,890,658
                                       ----------     ----------  ----------
Cash flows from (used in) investing activities:
      Purchase of investments:
      Purchase of investments
        held-to-maturity             $ (1,784,283)   $    --     $(2,606,749)
      Purchase of equity securities        --             --        (916,815)
      Proceeds from maturity of
            held-to maturity
            securities                   983,820      2,220,802    1,210,272
      Proceeds from maturity of
            available-for-sale
              securities               3,300,000      2,814,816    1,225,522
      Proceeds from sale of available-
            for-sale securities
            (equity and
            fixed maturity)              782,048        794,356       --
      Purchase of mortgage loan            --             --       (825,000)
      Repayment of mortgage loans         23,695         29,871      24,525
      Net change in short-term
        investments                   (2,423,225)    (6,045,721)    780,280
      Net change in policy and
        student loans                    153,487         39,513     238,236
      Acquisition of property
        and equipment                    (68,672)       (78,009)   (224,129)
                                      ----------      --------- -----------
      Net cash provided ( used in)
           investing activities       $  966,870      $(224,372)$(1,093,858)
                                      ----------      --------- -----------
<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                             Statement of Cash Flows

                   Years ended December 31, 2002, 2001 and2000



                                                2002        2001         2000
Cash flows from financing activities:
      Receipts from universal life and
            certain annuity policies
            credited to policyholder
            account balances                $4,816,639  $5,037,521   $5,765,790
      Return of policyholder account
            balances on universal life
            and certain annuity policies    (7,110,345) (7,991,030)  (9,129,406)
                                           ----------- -----------  -----------
Net cash used in financing
      Activities                           $(2,293,706)$(2,953,509) $(3,363,616)
                                           ----------- -----------  -----------
Increase (decrease) in cash and
      cash equivalents                       1,098,229    (544,613)  (1,566,816)

Cash and cash equivalents at
      beginning of year                      1,969,055   2,513,668    4,080,484
                                           -----------  ----------   ----------
Cash and cash equivalents at
      end of year                          $ 3,067,284  $1,969,055   $2,513,668
                                           ===========  ==========   ==========
Supplemental schedule of cash flow
      information:
      Interest paid during the  year       $    90,000  $   97,240   $  105,000
                                           ===========  ==========   ==========
      Income taxes paid during the year    $     4,246  $   57,470   $   94,365
                                           ===========  ==========   ==========
Change in market value adjustments-
investments available-for-sale:
      Fixed maturities                        $456,823    $956,773     $786,282
      Equity securities                        (62,965)     24,632     (121,202)

Change in deferred acquisition costs           257,686      61,405      (71,611)
Change in premium deposit funds               (154,613)    (36,843)      42,967
Deferred income tax asset (liability)         (183,865)   (372,208)    (235,481)
                                           -----------   ---------  -----------
Accumulated comprehensive income
Net change in unrealized appreciation         $313,066    $633,759     $400,955
                                             =========   =========    =========





See accompanying notes to financial statements.

<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                          Notes to Financial Statements
                        December 31, 2002, 2001 and 2000

1.     Nature of business and summary of significant accounting policies:

       (a)     Nature of business
               ------------------
               The primary business of Southern  Security Life Insurance Company
               (the  "Company") is the issuance of long duration  universal life
               insurance  contracts.  The majority of the Company's  business is
               conducted  in the states of Alabama  (12%),  Florida  (43%),  and
               Georgia (11%).  None of the remaining  eleven states in which the
               Company is licensed to conduct  business  account for over 10% of
               the Company's total business.

               Prior to  December  17,  1998,  certain  executive  officers  and
               directors of the Company were  shareholders of  approximately  60
               percent of the shares of SSLIC Holding Company,  Inc.,  (formerly
               Consolidare Enterprises,  Inc.). SSLIC Holding Company, Inc. owns
               75.0% of the Company's voting securities at December 31, 2002.

               Effective  December 17,  1998,  100% of the common stock of SSLIC
               Holding Company, Inc. was acquired by Security National Financial
               Corporation  ("SNFC").  Accordingly,  from December 17, 1998, the
               Company is a 75.0% owned, indirect subsidiary of SNFC.

               The  following is a  description  of the most  significant  risks
               facing life and health  insurers  and how the  Company  mitigates
               those risks:

               Legal/regulatory  risk is the risk that  changes  in the legal or
               regulatory  environment in which an insurer  operates will create
               additional expenses not anticipated by the insurer in pricing its
               products.  That is,  regulatory  initiatives  designed  to reduce
               insurer  profits,   new  legal  theories  or  insurance   company
               insolvencies  through  guaranty fund assessments may create costs
               for  the  insurer   beyond  those   recorded  in  the   financial
               statements.  The  Company  seeks to  mitigate  this risk  through
               geographic marketing of these insurance products.

               Credit risk is the risk that issuers of  securities  owned by the
               Company will default or that other parties, including reinsurers,
               which owe the Company money,  will not pay. The Company  attempts
               to mitigate  this risk by adhering to a  conservative  investment
               strategy,  by maintaining  sound reinsurance and by providing for
               any amounts deemed uncollectible.

               Interest  rate risk is the risk that  interest  rates will change
               and cause a decrease  in the value of an  insurer's  investments.
               This  change  in  rates  may  cause  certain   interest-sensitive
               products to become uncompetitive, may cause disintermediation, or
               may cause the Company to not achieve its target interest  margins
               between interest earned on invested assets and interest  required
               to be  credited to  policyholder  account  balances.  The Company
               mitigates  this risk by  charging  fees for  nonconformance  with
               certain  policy  provisions,  by offering  products that transfer
               this risk to the  purchaser,  and/or by  attempting  to match the
               maturity  schedule of its assets with the expected payouts of its
               liabilities. To the extent that liabilities come due more quickly
               than assets mature, an insurer would have to sell assets prior to
               maturity and potentially recognize a gain or loss.

       (b)     Basis of financial statements
               -----------------------------
               The financial  statements have been prepared on the basis of U.S.
               generally accepted  accounting  principles  ("GAAP"),  which vary
               from  reporting  practices  prescribed or permitted by regulatory
               authorities.

               The  accompanying  financial  statements have been prepared using
               the  historic  cost basis of  accounting  and do not  reflect any
               adjustments  related to allocation  of the purchase  price of the
               Company's  parent,   SSLIC  Holding  (Formerly   Consolidare)  by
               Security National Financial Corporation at December 17, 1998.

<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (Continued)



       (c)     Use of estimates
               ----------------
               In preparing the financial statements,  management is required to
               make estimates and assumptions  that affect the reported  amounts
               of  assets  and   liabilities.   Actual   results   could  differ
               significantly from those estimates.

               The estimates susceptible to significant change are those used in
               determining  the liability for future policy benefits and claims,
               deferred  income taxes and  deferred  policy  acquisition  costs.
               Although  some   variability  is  inherent  in  these  estimates,
               management believes that the amounts provided are adequate.

       (d)     Investments
               -----------
               Investments in all debt  securities  and those equity  securities
               with readily  determinable  market values are classified into one
               of    three    categories:    held-to-maturity,     trading    or
               available-for-sale.  Classification  of investments is based upon
               management's current intent. Debt securities which management has
               a  positive  intent  and  ability  to  hold  until  maturity  are
               classified  as  securities  held-to-maturity  and are  carried at
               amortized cost. Unrealized holding gains and losses on securities
               held-to-maturity  are not reflected in the financial  statements.
               Debt and equity  securities  that are  purchased  for  short-term
               resale  would  be  classified  as  trading  securities.   Trading
               securities  would  be  carried  at fair  value,  with  unrealized
               holding gains and losses included in earnings; the Company has no
               securities  classified as trading securities.  All other debt and
               equity  securities  not included in the above two  categories are
               classified   as   securities    available-for-sale.    Securities
               available-for-sale  are  carried at fair value,  with  unrealized
               holding   gains  and  losses   reported  in   accumulated   other
               comprehensive  income which is included in  shareholders'  equity
               after   adjustment   for  deferred   income  taxes  and  deferred
               acquisition costs related to universal life products.

               The   Company's   carrying   value   for   investments   in   the
               held-to-maturity and available-for-sale  categories is reduced to
               its estimated  realizable  value if a decline in the market value
               is deemed  other than  temporary.  Such  reductions  in  carrying
               values are recognized as realized losses and charged to income.

               Interest  on  fixed  maturities  and  short-term  investments  is
               recognized  to  income as it  accrues  on the  principal  amounts
               outstanding  adjusted for  amortization of premiums and discounts
               computed  by  the  scientific   method  which   approximates  the
               effective yield method.  Realized gains and losses on disposition
               of  investments   are  included  in  net  income.   The  cost  of
               investments  sold is  determined  on the specific  identification
               method.  Dividends  are  recorded  as income  on the  ex-dividend
               dates.

               Mortgage  loans on real estate and  mortgage  loans held as short
               term investments are reported at the unpaid  principal  balances,
               adjusted  for  amortization  of premium or accretion of discount,
               less allowance for possible losses.

               Policy  loans  and  student  loans  are  carried  at  the  unpaid
               principal  balance,  less any amounts deemed to be uncollectible.
               The  Company's  policy  is that  policy  loans  are not  made for
               amounts  in excess  of the cash  surrender  value of the  related
               policy. Accordingly, policy loans are fully collateralized by the
               related  liability  for future  policy  benefits for  traditional
               insurance policies and by the policyholders'  account balance for
               interest sensitive policies.

       (e)     Cash and cash equivalents
               -------------------------
               For  purposes  of the  statements  of  cash  flows,  the  Company
               considers all highly liquid debt  instruments  purchased  with an
               original maturity of three months or less to be cash equivalents.


<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (Continued)



       (f)     Deferred policy acquisition costs
               ---------------------------------
               The  costs of  acquiring  new  business,  net of the  effects  of
               reinsurance,   principally  commissions  and  those  home  office
               expenses that tend to vary with and are primarily  related to the
               production  of new  business,  have been  deferred  to the extent
               recoverable   from  future  profit   margins.   Deferred   policy
               acquisition  costs  applicable to  traditional  life policies are
               being  amortized  over the  premium-paying  period of the related
               policies in a manner that will charge each year's  operations  in
               direct  proportion to the estimated premium revenue over the life
               of the  policies.  Premium  revenue  estimates are made using the
               same interest,  mortality and withdrawal  assumptions as are used
               for computing liabilities for future policy benefits. Acquisition
               costs relating to universal life policies are being  amortized in
               relation to the incidence of expected gross profits over the life
               of the  policies.  Gross  profits for  universal  life  contracts
               consist of revenue  representing  policy  charges for the cost of
               insurance,  administration of the contracts and surrender charges
               plus  investment  income less  expenses for interest  credited to
               policyholder account balances, policy administrative expenses and
               expected benefit  payments in excess of policy account  balances.
               Deferred  policy  acquisition  costs are  adjusted to reflect the
               impact  of  unrealized   gains  and  losses  on  fixed   maturity
               securities available for sale.

               The Company has performed tests concerning the  recoverability of
               deferred acquisition costs. These methods include those typically
               used by many companies in the life insurance  industry.  Further,
               the Company  conducts a sensitivity  analysis of its  assumptions
               that are used to  estimate  the future  expected  gross  profits,
               which management has used to determine the future  recoverability
               of the deferred acquisition costs.

       (g)     Property and Equipment
               ----------------------
               Property and  equipment  are recorded at cost,  less  accumulated
               depreciation. Depreciation and amortization on capital leases and
               property and equipment  are  determined  using the  straight-line
               method over the estimated  useful lives of the assets or terms of
               the lease.  Expenditures for maintenance and repairs are expensed
               when incurred and betterments are  capitalized.  Gains and losses
               on sale of property and equipment are reflected in operations.

       (h)     Investment in affiliate
               -----------------------
               Prior  to  2002  the  Company  held  investments  in  its  parent
               company's common stock. This reciprocal stockholding is accounted
               for  based  on the  treasury  stock  approach.  The  value of the
               investment is recorded at cost and will be classified as treasury
               stock upon consolidation with its parent company.

       (i)     Future policy benefits
               ----------------------
               The  liability for future policy  benefits for  traditional  life
               policies  has been  provided on a net level  premium  basis based
               upon  estimated  investment  yields,  withdrawals,  mortality and
               other  assumptions that were appropriate at the time the policies
               were issued.  Such estimates are based upon industry data and the
               Company's  past  experience  as adjusted to provide for  possible
               adverse deviation from the estimates.

       (j)     Policyholders' account balances
               -------------------------------
               Insurance  reserves for universal  life  policies are  determined
               following the retrospective  deposit method and consist of policy
               values that accrue to the benefit of the policyholder,  unreduced
               by surrender charges.

       (k)     Recognition of premium revenue and related costs
               ------------------------------------------------
               Premiums are recognized as revenue as follows:

<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)



               Universal  life policies - premiums  received from  policyholders
               are   reported   as   deposits.   Cost   of   insurance,   policy
               administration  and surrender  charges which are charged  against
               the   policyholder   account  balance  during  the  period,   are
               recognized  as revenue as earned.  Amounts  assessed  against the
               policyholder  account balance that represent  compensation to the
               Company  for  services  to be  provided  in  future  periods  are
               reported as unearned  revenue and  recognized in income using the
               same assumptions and factors used to amortize  acquisition  costs
               capitalized.

               Annuity  contracts with flexible  terms - premiums  received from
               policyholders are reported as deposits.

               All other  policies  -  recognized  as revenue  over the  premium
               paying period.

       (l)     Income taxes
               ------------
               Deferred tax assets and liabilities are recognized for the future
               tax   consequences   attributable  to  differences   between  the
               financial  statement  carrying  amounts  of  existing  assets and
               liabilities and their  respective tax bases.  Deferred tax assets
               and  liabilities are measured using enacted tax rates expected to
               apply to  taxable  income in the years in which  those  temporary
               differences  are expected to be recovered or settled.  The effect
               on deferred tax assets and  liabilities  of a change in tax rates
               is recognized in income in the period that includes the enactment
               date.

       (m)     Impairment of Long-Lived Assets
               -------------------------------
               The Company reviews its long-lived assets for impairment whenever
               events or changes in  circumstances  indicate  that the  carrying
               amount of the assets may not be recoverable through  undiscounted
               future cash flows.  If it is determined  that an impairment  loss
               has  occurred  based  on  expected  cash  flows,   such  loss  is
               recognized in the statement of operations.

       (n)     Earnings (Loss) Per Common Share
               --------------------------------
               The  computation  of basic  earnings  (loss) per common  share is
               based on the weighted average number of shares outstanding during
               each year.

               The computation of diluted  earnings per common share is based on
               the  weighted  average  number of shares  outstanding  during the
               year, plus the common stock equivalents that would arise from the
               exercise of stock options  outstanding,  using the treasury stock
               method and the average  market  price per share  during the year.
               There were no common  stock  equivalents  outstanding  during the
               years ended December 31, 2002 and 2001.  Common stock equivalents
               are  not  included  in the  diluted  earnings  (loss)  per  share
               calculation when their effect is antidilutive.

       (o)     Stock-based Compensation
               ------------------------
               The   Company   measures   expense   for   stock-based   employee
               compensation  using  the  intrinsic  value  method  and  provides
               pro-forma  disclosures of net income (loss) and net income (loss)
               per common  share as if the fair value method had been applied in
               measuring compensation expense.

        (p)    Concentration of Credit Risk
               ----------------------------
               The Company maintains its cash in bank deposit accounts, which at
               times may exceed  federally  insured limits.  The Company has not
               experienced  any losses in such  accounts  and believes it is not
               exposed  to  any  significant   credit  risk  on  cash  and  cash
               equivalents.

<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


       (q)     Reclassification

               Certain  amounts   presented  in  the  2001  and  2000  financial
               statements  have  been   reclassified  to  conform  to  the  2002
               presentation.

       (r)     Recent Account Pronouncements

               In June 2001, the Financial  Accounting  Standards Board ("FASB")
               issued  Statement  of  Financial  Accounting  Standards  ("SFAS")
               No. 142,  "Goodwill  and Other  Intangible  Assets".  Under  SFAS
               No. 142,  amortization  of goodwill is  precluded,  however,  its
               recoverability  must be periodically (at least annually) reviewed
               and  tested  for  impairment.  Goodwill  must  be  tested  at the
               reporting  unit  level for  impairment  in the year of  adoption,
               including  an  initial  test  performed   within  six  months  of
               adoption.  If the initial test indicates a potential  impairment,
               then  a  more  detailed  analysis  to  determine  the  extent  of
               impairment  must be completed  within  twelve months of adoption.
               SFAS No. 142  also  requires  that useful  lives for  intangibles
               other than  goodwill be  reassessed  and  remaining  amortization
               periods be adjusted accordingly. The adoption of SFAS No. 142 did
               not have a material impact on the Company's  financial  condition
               or results of operations.


               In August 2001, the FASB issued SFAS No. 144, "Accounting for the
               Impairment  or  Disposal  of  Long-Lived  Assets".  SFAS  No. 144
               establishes  an  accounting  model  for  long-lived  assets to be
               disposed  of by  sale  that  applies  to all  long-lived  assets,
               including  discontinued  operations.  SFAS No. 144  requires that
               those  long-lived  assets be  measured  at the lower of  carrying
               amount or fair  value  less  cost to sell,  whether  reported  in
               continuing   operations  or  in  discontinued   operations.   The
               provisions of SFAS No. 144 are effective for financial statements
               issued  for  fiscal  years  beginning  after  December 15,  2001.
               Adoption of SFAS  No. 144  did not have a material  impact on the
               Company's financial condition or results of operations.

               In April  2002,  FASB issued SFAS  No. 145,  "Rescission  of FASB
               Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13,
               and Technical Corrections".  Under historical guidance, all gains
               and  losses  resulting  from  the  extinguishment  of  debt  were
               required to be  aggregated  and, if  material,  classified  as an
               extraordinary  item,  net of  related  income  tax  effect.  SFAS
               No. 145 rescinds that guidance and requires that gains and losses
               from extinguishments of debt be classified as extraordinary items
               only if they are both unusual and infrequent in occurrence.  SFAS
               No. 145 also amends SFAS No. 13,  "Accounting for Leases" for the
               required accounting treatment of certain lease modifications that
               have economic  effects  similar to  sale-leaseback  transactions.
               SFAS No. 145 requires that those lease modifications be accounted
               for  in the  same  manner  as  sale-leaseback  transactions.  The
               provisions  of SFAS No. 145  related to SFAS No. 13 are effective
               for transactions  occurring after May 15,  2002.  Adoption of the
               provisions of SFAS No. 145  related to SFAS No. 13 did not have a
               material impact on the Company's  financial  condition or results
               of operations.

               In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
               Associated  with Exit or Disposal  Activities",  which  addresses
               financial accounting and reporting for costs associated with exit
               or  disposal   activities  and  nullifies  EITF  Issue  No. 94-3,
               "Liability  Recognition for Certain Employee Termination Benefits
               and  Other  Costs  to Exit an  Action  (including  Certain  Costs
               Incurred  in a  Restructuring)"  ("Issue  94-3").  The  principal
               difference  between  SFAS No.  146 and  Issue  94-3 is that  SFAS
               No. 146  requires  that a for a cost  associated  with an exit or
               disposal  activity be recognized  when the liability is incurred,
               rather  than at the  date of an  entity's  commitment  to an exit
               plan.  SFAS No. 146 is effective for exit or disposal  activities
               after  December 31,   2002.  Based  upon  a  preliminary  review,
               adoption of SFAS No. 146 would not have a material  impact on the
               Company's financial condition or results of operations.

<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


               In  November  2002,  the  FASB  issued   Interpretation   No. 45,
               "Guarantor's   Accounting   and   Disclosure   Requirements   for
               Guarantees,  Including  Indirect  Guarantees of  Indebtedness  of
               Others"  ("FIN 45").  FIN 45 requires  certain  guarantees  to be
               recorded at fair value and also  requires a guarantor to make new
               disclosures,  even when the  likelihood of making  payments under
               the guarantee is remote. In general,  the Interpretation  applies
               to  contracts or  indemnification  agreements  that  contingently
               require the  guarantor to make payments to the  guaranteed  party
               based on  changes in an  underlying  that is related to an asset,
               liability,  or an equity  security of the guaranteed  party.  The
               recognition  provisions  of FIN 45 are effective on a prospective
               basis for guarantees issued or modified after December 31,  2002.
               The   disclosure   requirements   are   effective  for  financial
               statements   of  interim   and  annual   periods   ending   after
               December 15,  2002. Based upon a preliminary review,  adoption of
               FIN 45  would  not  have a  material  impact  on  the  Company's
               financial condition or results of operations.

               In December 2002, the FASB issued SFAS No. 148,  "Accounting  for
               Stock-Based   Compensation   -  Transition   and  Disclosure  and
               Amendment  to  FASB  No. 123",   which  provides  three  optional
               transition  methods for entities that decide to voluntarily adopt
               the  fair  value   recognition   principles   of  SFAS   No. 123,
               "Accounting  for Stock  Issued to  Employees",  and  modifies the
               disclosure requirements of that Statement.  Under the prospective
               method, stock-based compensation expense is recognized for awards
               granted  after  the  beginning  of the  fiscal  year in which the
               change  is  made.  The  modified  prospective  method  recognizes
               stock-based  compensation  expense  related  to new and  unvested
               awards in the year of change  equal to that which would have been
               recognized  had SFAS  No. 123  been  adopted as of its  effective
               date,  fiscal  years  beginning  after  December 15,   1994.  The
               retrospective  restatement  method recognizes stock  compensation
               costs for the year of change and  restates  financial  statements
               for  all  prior  periods  presented  as  though  the  fair  value
               recognition provisions of SFAS No. 123 had been adopted as of its
               effective date.  Since the Company does not intend to voluntarily
               adopt the fair value provisions of FASB 123, adoption of SFAS 148
               would not have a material  effect on the  financial  condition or
               results  of  operations  of  the  Company.   However,  pro  forma
               disclosures  required  by  SFAS  148  will  be  included  in  the
               Company's future interim financial statements when necessary.

               In   January   2003,   the   FASB   issued   Interpretation   46,
               "Consolidation of Variable  Interest  Entities" ("FIN 46"), which
               requires an enterprise to assess if consolidation of an entity is
               appropriate  based  upon its  variable  economic  interests  in a
               variable  interest  entity (VIE).  The initial  determination  of
               whether  an entity is a VIE shall be made on the date at which an
               enterprise  becomes  involved with the entity. A VIE is an entity
               in which the equity investors do not have the  characteristics of
               a controlling financial interest or do not have sufficient equity
               at  risk  for  the  entity  to  finance  its  activities  without
               additional  subordinated financial support from other parties. An
               enterprise shall  consolidate a VIE if it has a variable interest
               that will absorb a majority of the VIE's expected  losses if they
               occur,  receive a  majority  of the  entity's  expected  residual
               returns if they occur or both.  A direct or  indirect  ability to
               make  decisions  that  significantly  affect  the  results of the
               activities of a VIE is a strong indication that an enterprise has
               one  or  both  of  the   characteristics   that   would   require
               consolidation of the VIE.

               FIN 46 is  effective  for new  VIE's  established  subsequent  to
               January 31, 2003 and for existing VIE's as of July 1, 2003. Based
               upon a preliminary  review, the adoption of FIN 46 would not have
               a material impact on the Company's financial condition or results
               of operations as there were no material  VIE's  identified  which
               would  require   consolidation.   FIN  46  further  requires  the
               disclosure of certain  information  related to VIE's in which the
               Company holds a significant  variable interest.  The Company does
               not  believe  that  it  owns  any  such  interests  that  require
               disclosure at this time.

<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)



2.     Basis of financial statements

          The more significant U.S.  generally  accepted  accounting  principles
          applied in the  preparation of financial  statements  that differ from
          life insurance statutory  accounting practices prescribed or permitted
          by regulatory authorities are as follows:

     a.   Costs of acquiring  new business  are deferred and  amortized,  rather
          than being charged to operations as incurred.

     b.   The  liability  for future  policy  benefits  and expenses is based on
          reasonable  estimates  of  expected  mortality,  morbidity,  interest,
          withdrawals  and future  maintenance and settlement  expenses,  rather
          than on statutory rates for mortality and interest.

     c.   The liability for  policyholder  funds  associated with universal life
          and certain annuity contracts are based on the provisions of Statement
          of Financial Accounting Standards No. 97, rather than on the statutory
          rates for mortality and interest.

     d.   Investments  in  securities  are  reported as described in Note 1.(d),
          rather than in accordance with valuations  established by the National
          Association  of  Insurance  Commissioners  ("NAIC").  Pursuant to NAIC
          valuations,  bonds eligible for amortization are reported at amortized
          value;  other securities are carried at values prescribed by or deemed
          acceptable by NAIC.

     e.   Deferred  income taxes,  if applicable,  are recognized for future tax
          consequences   attributable  to  differences   between  the  financial
          statement  carrying  amounts of existing  assets and  liabilities  and
          their respective tax bases.

     f.   The statutory liabilities for the asset valuation reserve and interest
          maintenance   reserve  have  not  been   provided  in  the   financial
          statements.

     g.   Certain assets, principally receivables from agents and equipment, are
          reported as assets rather than being charged directly to surplus.

     h.   Costs  attributable  to the public  offering of the common shares have
          been  reclassified  from  accumulated  surplus to capital in excess of
          par.

     i.   Realized  gains or losses on the sale or maturity of  investments  are
          included in the  statement of income and not recorded net of taxes and
          amounts transferred to the interest maintenance reserve as required by
          statutory accounting practices.

     j.   Certain  proceeds  from a note  payable  (note 9) that are  treated as
          shareholders' equity for statutory purposes are treated as a liability
          under U.S. generally accepted accounting principles.

     k.   Reinsurance  assets and  liabilities  are  reported  on a gross  basis
          rather than shown on a net basis as permitted by statutory  accounting
          practices.


<PAGE>
<TABLE>
<CAPTION>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


A  reconciliation  of net income  (loss) for the years ended  December 31, 2002,
2001, 2000 and shareholders' equity as of December 31, 2002 and 2001 between the
amounts  reported on a statutory basis and the related amounts  presented on the
basis of U.S. generally accepted accounting principles is as follows:

                                                 Net Income (loss)                     Shareholders' Equity
                                             Years Ended December 31,                       December 31,
                                       2002           2001             2000          2002                 2001
<S>                                <C>             <C>               <C>          <C>             <C>
As reported on a
Statutory basis                    $(427,439)      $(429,143)        $80,477     $  8,582,968     $ 8,459,703
                                   ---------       ---------       ---------      ----------     -----------
Adjustments:
  Deferred policy acquisition
  costs, net                         159,459        (298,428)        408,805      13,391,535      12,974,390
Future policy benefits, un-
     earned premiums
     and policyholders' funds        291,503       1,191,046        (203,129)     (5,064,659)     (5,201,550)
 Deferred  income taxes               16,500        (159,189)         15,008        (878,152)       (710,787)
 Asset valuation reserve                  --              --              --         471,993         592,535
 Interest maintenance
      reserve                        (34,476)        (34,017)        (36,063)        430,606         465,082
 Non-admitted assets                      --        (100,000)             --         859,361       1,190,406
 Unrealized gains
  -SFAS 115                               --              --              --         795,097         664,326
Capital and surplus note                  --              --              --      (1,000,000)     (1,000,000)
 Other adjustments, net              (76,113)        (99,293)       (104,838)       (442,979)       (530,835)
                                   ---------        --------       ---------     -----------     -----------
 Net difference                      356,873         500,119          79,783       8,562,802       8,443,567
                                   ---------        --------       ---------     -----------     -----------
As reported on a
 GAAP basis                         $(70,566)        $70,976        $160,260     $17,145,770     $16,903,270
                                   =========        ========        ========     ===========     ===========

</TABLE>


Under  applicable  laws and  regulations,  the  Company is  required to maintain
minimum  surplus as to  policyholders,  determined in accordance with regulatory
accounting practices, in the aggregate amount of approximately $1,874,000.

The  payment of  dividends  by the Company is subject to the  regulation  of the
State of Florida Department of Insurance.

The Insurance  Commissioner's  approval is not required if the dividend is equal
to or  less  than  the  greater  of:  (a)  10% of the  Company's  surplus  as to
policyholders'  derived from realized net operating  profits on its business and
net realized  capital gains; or (b) the Company's  entire net operating  profits
and realized net capital gains derived during the immediately preceding calendar
year, if the Company will have surplus as to policyholders equal to or exceeding
115% of the minimum required  statutory  surplus as to  policyholders  after the
dividend is declared  and paid.  As a result of such  restrictions,  the maximum
dividend  which may be paid by the Company during 2003 without prior approval is
approximately $75,000.  Accordingly, GAAP excess earnings over a statutory basis
are not available for dividends.

The Risk-Based  Capital  ("RBC") for Life and/or Health  Insurers Model Act (the
"Model Act") was adopted by the National Association of Insurance  Commissioners
(NAIC) in 1992.  The main  purpose  of the  Model  Act is to  provide a tool for
insurance regulators to evaluate the capital of insurers.  Based on calculations
using the appropriate NAIC formula, the Company exceeded the RBC requirements at
December 31, 2002.



<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)




3.   Investments

          (a)  Equity securities and fixed maturities

          Equity securities  consist of $309,218 and $372,183 of common stock at
          fair value at December 31, 2002 and 2001 respectively.

          Unrealized  (depreciation)   appreciation  in  investments  in  equity
          securities  for the years ended  December 31, 2002,  2001, and 2000 is
          $(62,965), $24,632 and $(121,202), respectively.

          The amortized  cost and estimated  fair values of  investments in debt
          securities are as follows:
<TABLE>
<CAPTION>

                                                                        Gross             Gross       Estimated
                                                   Amortized         Unrealized        Unrealized       Fair
                                                     Cost               Gains            Losses         Value
                                                 -------------      -------------     ------------   ------------
December 31, 2002:
<S>                                              <C>              <C>             <C>          <C>
     Held-to-maturity:
       U.S. Treasury securities and obligations
       of U.S. government corporations
       and agencies (guaranteed)                 $      --       $         --     $     --      $    --

     Corporate securities                           3,690,569          201,213        12,837     3,878,945

     Mortgage-backed securities                       280,970            7,113          --         288,083
                                                  -----------       ----------      --------    ----------
                                                    3,971,539          208,326        12,837     4,167,028
                                                  -----------       ----------      --------    ----------
     Available-for-sale:
       U.S. Treasury securities and obligations
       of U.S. government corporations
       and agencies (guaranteed)                      595,993          103,697          --         699,690

     Corporate securities                          16,482,248        1,258,023          --      17,740,271

     Mortgage-backed securities                        --               --              --           --
                                                  -----------       ----------       -------   -----------
                                                   17,078,241        1,361,720          --      18,439,961
                                                  -----------       ----------       -------   -----------
                                                  $21,049,780       $1,570,046       $12,837   $22,606,989
                                                  ===========       ==========       =======   ===========
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


                                                                        Gross             Gross       Estimated
                                                   Amortized         Unrealized        Unrealized       Fair
                                                     Cost               Gains            Losses         Value
                                                 -------------      -------------     ------------   ------------
December 31, 2001:
<S>                                              <C>                  <C>        <C>               <C>
     Held-to-maturity:
       U.S. Treasury securities and obligations
       of U.S. government corporations
       and agencies (guaranteed)                     $500,000           $1,560   $      --            $501,560

     Corporate securities                           2,092,104           97,916        29,771         2,160,249

     Mortgage-backed securities                       564,546           24,539         --              589,085
                                                   ----------         --------      --------       ------------
                                                    3,156,650          124,015        29,771         3,250,894
                                                   ----------         --------      --------       -----------
     Available-for-sale:
       U.S. Treasury securities and obligations
       of U.S. government corporations
       and agencies (guaranteed)                      595,585           58,415         --              654,000

     Corporate securities                          19,864,248          846,483         --           20,710,731

     Mortgage-backed securities                            --            --            --               --
                                                  -----------       ----------      --------       -----------
                                                   20,459,833          904,898         --           21,364,731
                                                  -----------       ----------      --------       -----------
                                                  $23,616,483       $1,028,913       $29,771       $24,615,625
                                                  ===========       ==========       =======       ===========
</TABLE>

     Fair values reflected in available-for-sale and held-to-maturity categories
     are based on NAIC  values,  versus  values  associated  with normal  market
     pricing  services.   The  estimated  difference  for  both  categories  was
     immaterial for all years presented.

     Unrealized  appreciation of fixed  maturities for years ending December 31,
     2002, 2001 and 2000 is $558,067, $1,152,189, and $678,644 respectively.

     The amortized cost and estimated fair value of fixed maturities at December
     31,  2002,  by  contractual   maturity,   are  summarized  below.  Expected
     maturities will differ from contractual  maturities  because  borrowers may
     have the  right  to call or  prepay  obligations  with or  without  call or
     prepayment penalties.

Fixed maturity securities held-to-maturity:
                                                   Amortized         Estimated
                                                     Cost           Fair value
Due in 2003                                        $   --            $    --
Due in 2004 through 2007                              863,469           930,401
Due in 2008 through 2012                            2,037,355         2,137,037
Due after 2012                                        789,745           811,507

Mortgage-backed securities                            280,970           288,083
                                                   ----------       -----------
                                                   $3,971,539       $ 4,167,028
                                                   ==========       ===========
Fixed maturity securities available-for-sale:

Due in 2003                                        $3,854,862       $ 3,972,109
Due in 2004 through 2007                            9,943,233        10,798,772
Due in 2008 through 2012                            3,182,315         3,551,580
Due after 2012                                         97,831           117,500

Mortgage-backed securities                                 --             --
                                                  -----------       -----------
                                                  $17,078,241       $18,439,961
                                                  ===========       ===========
<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


     Proceeds from the sale of equity securities and fixed maturities  available
     for sale and the  related  realized  gains and  losses  are  summarized  as
     follows:

                                          2002            2001          2000
Proceeds from sale of
    equity securities                  $782,048       $  794,356     $    --
                                     ----------       ----------     ----------
Proceeds from sale of
    fixed maturities
    available-for-sale               $3,300,000       $2,814,816     $1,225,522
                                     ----------       ----------     ----------
Realized gains (losses)
Fixed maturities:
Gross realized gains                 $    --          $   --         $    --
Gross realized (losses)                   --              --              --
Equity securities:
Gross realized gains                      --              --              --
Gross realized (losses)                  (1,038)          --              --
                                     ----------       ---------      ---------
                                     $   (1,038)      $   --         $    --
                                     ==========       ==========     ==========


     There  were no  realized  gains and losses  for fixed  maturity  securities
     classified  as  available-for-sale  and  held-to-maturity  that were called
     during the year ended December 31, 2002, 2001 and 2000.

     Investments, aggregated by issuer, in excess of 10% of shareholders' equity
     (before net unrealized gains and losses on  available-for-sale  securities)
     at December 31, 2002 and 2001, other than investments  issued or guaranteed
     by the United States government are as follows:

      2002                                          Carrying Amount
             Dean Witter Discover                       $4,049,379
             Philip Morris, Inc.                         5,529,454

      2001

             Federal Express                            $2,036,560
             Dean Witter Discover                        4,252,500
             Philip Morris Inc.                          5,813,260

      (b)   Concentrations of credit risk
            -----------------------------

          At  December  31,  2002 and  2001,  the  Company  owned  $485,000  and
          $482,000,  respectively,  of less-than-investment grade corporate debt
          securities.  The Company also invests in subsidized  and  unsubsidized
          student  loans  totaling  $97,671 and $95,819 at December 31, 2002 and
          2001,  respectively,  which  are  guaranteed  by the U.S.  government.
          Subsequent to December 31, 2002, all of these loans were sold at their
          unpaid principal balance.

<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


      (c)   Investment income

          Net investment income for the years ended December 31, 2002, 2001, and
          2000 consists of the following:

                                             2002           2001          2000
Interest:
Fixed maturities                          $1,526,706    $1,790,992   $2,014,883
Policy and student loans                     515,141       468,904      505,319
Short-term investments                     1,235,823     1,105,434      937,077
Mortgage loans                               179,193       206,212      190,068
Rental income                                388,843       304,879      278,302

Dividends on equity securities
      common  stock, including
      mutual fund                                384            --       33,412
                                          ----------    ----------   ----------
                                           3,846,090     3,876,421    3,959,061
Less investment expenses                      10,670         9,455       23,454
                                          ----------    ----------   ----------
                                          $3,835,420    $3,866,966   $3,935,607

      (d)   Investments on deposit

          In order to comply with  statutory  regulations,  investments  were on
          deposit with the Insurance Departments of certain states as follows:

                                        2002             2001              2000
Florida                             $1,702,867       $1,707,042      $1,708,735
Alabama                                100,634          100,737         100,199
South Carolina                         301,903          302,210         300,595
Georgia                                252,233          252,933         250,496
Indiana                                201,787          202,347         200,000
                                    ----------       ----------      ----------
                                    $2,559,424       $2,565,269      $2,560,025
                                    ==========       ==========      ==========

          Certain of these assets,  totaling  approximately $850,000 for each of
          the years ended  December 31, 2002 and 2001,  are  restricted  for the
          future benefit of policyholders in a particular state.

4.    Deferred policy acquisition costs

     Deferred policy  acquisition costs at December 31, 2002, 2001, 2000 consist
     of the following:

                                          2002             2001          2000
Deferred policy acquisition
     costs at beginning of year       $12,974,390     $13,211,413   $12,874,219
Policy acquisition costs deferred:
Commissions                             1,544,860       1,249,453     1,384,782
Underwriting & issue costs                242,162         269,070       398,622
Other                                     342,404         380,448       422,721
Change in unrealized appreciation
     (depreciation)                       257,686          61,405       (71,611)
                                      -----------     -----------   -----------
                                        2,387,112       1,960,376     2,134,514
Amortization of deferred policy
     acquisition costs                 (1,969,967)     (2,197,399)   (1,797,320)
                                      -----------     -----------   -----------
Deferred policy acquisition
     Costs at end of year             $13,391,535     $12,974,390   $13,211,413
                                      ===========     ===========   ===========

<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)




5.    Property and equipment

     Property and equipment consists of the following:

                                  December 31,   December 31,
                                     2002           2001
                                 ------------   ------------
Land                               $982,027       $982,027
Building and improvements         2,441,849      2,397,325
Furniture and equipment             968,761        956,533
                                 ----------    -----------
                                  4,392,637      4,335,885
Less accumulated depreciation    (1,962,233)    (1,844,823)
                                 ----------     ----------
                                 $2,430,404     $2,491,062
                                 ==========     ==========

     Depreciation  expense for the years ended  December  31, 2002,  2001,  2000
     totaled $129,330, $129,330, and $115,425, respectively.

6.    Future policy benefits

     At  December  31,  2002 and 2001,  future  policy  benefits,  exclusive  of
     universal life and flexible term annuities consist of the following:

                              December 31,   December 31,
                                 2002          2001
                              -----------   ------------
Life insurance                $3,291,275    $2,600,757
Annuities                         64,738       193,744
Accident & health insurance      161,468       107,098
                              ----------    ----------
Total life & health
 future policy benefits       $3,517,481    $2,901,599
                              ==========    ==========

     Life  insurance  in-force  aggregated  approximately  $1.5 billion and $1.6
     billion  at  December  31,  2002,  and 2001,  respectively.  Mortality  and
     withdrawal   assumptions  are  based  upon  the  Company's  experience  and
     actuarial  judgment with an allowance for possible  unfavorable  deviations
     from the expected experience.

     The mortality tables used in calculating benefit reserves for non universal
     life contracts are the 1975-1980 Basic Tables and the 1980 U.S.  Population
     mortality table modified for company expected experience.

     For the principal non-universal life policies an interest rate beginning at
     6.75% net of investment  expenses was used.  For universal  life  policies,
     spreads  between  1.25%  and  1.50%  were  used  in  developing  the FAS 97
     amortization schedules.

7.    Reinsurance

     The Company routinely cedes and, to a limited extent,  assumes  reinsurance
     to limit its  exposure to loss on any single  insured.  Ceded  insurance is
     treated as a risk and liability of the assuming companies.

     As of December 31, 2002,  ordinary  insurance coverage in excess of $75,000
     is  reinsured;  however  for some  policies  previously  issued,  the first
     $30,000,  $40,000  or  $50,000  was  retained  and the  excess  ceded.  The
     retention limit for some substandard risks is less than $75,000.  Reinsured
     risks  would give rise to  liability  to the  Company in the event that the
     reinsuring company was unable to meet its obligations under the reinsurance
     agreement  in force,  as the  Company  remains  primarily  liable  for such
     obligations.

<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)




     Under  reinsurance  agreements  exclusive of the MEGA  agreement  discussed
     below,  the Company has ceded premium of $303,536,  $278,828,  and $275,288
     included  in  reinsurance   premiums  ceded,  and  received  recoveries  of
     $286,817,  $624,314  and  $131,886,  included in  annuity,  death and other
     benefits for the years ended December 31, 2002, 2001, 2000, respectively.

     On December 31, 1992, the Company entered into a reinsurance agreement with
     The MEGA Life and Health Insurance Company ("MEGA"), ceding an 18% share of
     all  universal  life policies in force at December 31, 1992 as a measure to
     manage the future  needs of the  Company.  The  reinsurance  agreement is a
     co-insurance  treaty  entitling  the assuming  company to 18% of all future
     premiums,  while making them  responsible  for 18% of all future claims and
     policyholder loans relating to the ceded policies. In addition, the Company
     receives certain commission and expense reimbursements.

     For the years ended  December  31,  2002,  2001,  2000,  the Company  ceded
     premiums  to  MEGA  of  $344,981,   $365,247  and  $419,353,   included  in
     reinsurance  ceded,  and  received  recoveries  of  $496,751,  $494,683 and
     $478,485, included in annuity, death and other benefits,  respectively. The
     funds held related to  reinsurance  treaties of $1,334,963  and  $1,379,640
     represent  the 18% share of policy loans ceded to the reinsurer at December
     31, 2002 and 2001, respectively.

8.    Notes payable

     As of  December  31,  2002,  the  Company  had an unused  line of credit of
     $5,000,000  which is secured by student  loans  equaling 115% of the unpaid
     principal balance. The facility bears interest at a variable rate per annum
     payable monthly and expires on April 30, 2007.

9.    Note payable to related party

     A note  payable to a related  party  consists  of amounts  due on demand to
     Security   National  Life   Insurance   Company.   The  note  qualifies  as
     shareholders'  equity for statutory  accounting purposes in accordance with
     Section 628.401 of the Florida Statutes. At December 31, 2002 and 2001, the
     note bears interest at 9.0% percent (payable monthly);  principal repayment
     is contingent upon the Company  maintaining  statutory surplus in excess of
     $1,874,000 and obtaining  approval in advance by the Florida  Department of
     Insurance.  Interest expense relating to the balance of the note payable to
     the related party during 2002, 2001, and 2000 aggregated $90,000,  $97,000,
     and $105,000 respectively.

10.    Income taxes

     The Company's income tax liability at December 31 is summarized as follows:

                             2002                    2001

Current                   $   --                   $  --
Deferred                   1,062,802                895,437
                          ----------               --------
Total                     $1,062,802               $895,437
                          ==========               ========

     Total  income  taxes  including  taxes  on  the  change  in  the  value  of
     investments  for the years ended December 31, 2002,  2001, and 2000 were as
     follows:

                                                 2002        2001       2000
                                                -----       -----      ------

Tax expense (benefit)  in operations           $(12,254)   $16,865     $38,105
Tax on unrealized appreciation
    (depreciation) of  investments              183,865    372,208     235,481
                                               --------   --------    --------
                                               $171,611   $389,073    $273,586
                                               ========   ========    ========
<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


Income tax expense  (benefit) for the years ended December 31, 2002,  2001, 2000
is summarized as follows:

                                       2002             2001             2000
                                      -----            -----            ------
Current:
Federal                              $4,246           $(5,759)          $40,812
State                                    --                --             6,719
                                     ------           -------           -------
                                      4,246            (5,759)           47,531
                                    -------           -------           -------
Deferred:
 Federal                            (14,678)           20,691            (7,073)
 State                               (1,822)            1,933            (2,353)
                                   --------           -------           -------
                                    (16,500)           22,624            (9,426)
                                   --------           -------           -------
                                   $(12,254)          $16,865           $38,105
                                   ========           =======           =======

Income tax expense  (benefit) for the years ended December 31, 2002,  2001, 2000
differs from  "expected"  tax (computed by applying the U.S.  federal income tax
rate to pretax income) as a result of the following:

                                               2002          2001         2000
Computed "expected" tax expense
   (benefit)                                 $(28,158)     $29,866      $67,444
Increase (reduction) in income
   taxes resulting from:
     Small life insurance
          company deduction                    17,107       (7,162)      (3,485)
     Changes in the valuation
          allowance for deferred
          tax assets, allocated to
          income tax expense                       --       (7,115)     (27,338)
   State taxes, net of federal
     income tax benefit                        (1,203)       1,276        1,484
                                             --------      -------      -------
                                             $(12,254)     $16,865      $38,105
                                             ========      =======      =======

     Under  tax laws in effect  prior to 1984,  a  portion  of a life  insurance
     company's gain from  operations was not currently taxed but was accumulated
     in a memorandum  "Policyholders'  Surplus  Account." As a result of the Tax
     Reform Act of 1984, the balance of the  Policyholders'  Surplus Account has
     been  frozen as of  December  31, 1983 and no  additional  amounts  will be
     accumulated in this account.  However,  distributions from the account will
     continue  to be  taxed,  as under  previous  law,  if any of the  following
     conditions occur:

     a.   The Policyholders' Surplus exceeds a prescribed maximum, or;
     b.   Distributions, other than stock dividends, are made to shareholders in
          excess of Shareholders' Surplus, as defined by prior law, or;
     c.   The entity ceases to qualify for taxation as a life insurance company,
          or;
     d.   the tax  deferred  status of the  Policyholder's  Surplus  Account  is
          modified by future tax legislation.

     At December 31, 2002,  the balance of the  Policyholders'  Surplus  account
     aggregated  approximately  $236,000.  The Company has not recorded deferred
     income taxes totaling  approximately  $80,000 relating to this amount as it
     has no plan to  distribute  the  amounts in  Policyholders'  Surplus in the
     foreseeable  future.  The Tax  Reform  Act of 1986  enacted a new  separate
     parallel  tax  system  referred  to as the  Alternative  Minimum  Tax (AMT)
     system.  AMT is based on a flat rate  applied to a broader tax base.  It is
     calculated separately from the regular federal income tax and the higher of
     the two  taxes is paid.  The  excess of the AMT over  regular  tax is a tax
     credit,  which can be carried  forward  indefinitely  to reduce regular tax
     liabilities of future years. In 2002,  2001, 2000, AMT exceeded regular tax
     by $-0-, $-0-, and $19,854, respectively. At December 31, 2002, the AMT tax
     credit  available to reduce future regular tax totaled  $269,643.

<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


The tax effect of temporary  differences that give rise to significant  portions
of the deferred tax assets and deferred tax liabilities at December 31, 2002 and
2001 are presented below:

                                                       2002              2001

Deferred tax assets:
Unearned revenue, due to deferral of
  "front-end" fee                                   $1,717,492       $1,829,505
Policy liabilities and accruals,
   principally due to adjustments
   to reserves for tax purposes                      1,718,852        1,683,457
Deferred policy acquisition costs
  related to unrealized appreciation
  (depreciation)                                        89,390          128,365

Alternative minimum tax credit
   carry forwards                                      269,643          269,643
                                                    ----------       ----------
Total gross deferred tax assets                      3,795,377        3,910,970
Less valuation allowance                              (269,643)        (269,643)
                                                    ----------       ----------
Net deferred tax assets                              3,525,734        3,641,327
                                                    ----------       ----------
Deferred tax liabilities:
Deferred policy acquisition costs                   (4,544,629)      (4,469,612)
Other                                                  465,440          294,104
Unrealized (appreciation)
depreciation of securities                            (509,347)        (361,256)
                                                   -----------      -----------
Total gross deferred tax liabilities                (4,588,536)      (4,536,764)
                                                   -----------      -----------
Net deferred tax (liability)                       $(1,062,802)     $  (895,437)
                                                   ==========       ===========

The net change in the total valuation allowance for the years ended December 31,
2002 and 2001 was an increase of $-0-and $7,115, respectively.

In assessing  the  realizability  of deferred tax assets,  management  considers
whether it is more likely than not that some  portion or all of the deferred tax
assets will not be realized.  The ultimate realization of deferred tax assets is
dependent  upon the  generation of future  taxable  income during the periods in
which those temporary  differences become deductible.  Management  considers the
scheduled reversal of deferred tax liabilities, projected future taxable income,
and tax planning  strategies in making this assessment.  Based upon the level of
historical  taxable  income and  projections  for future taxable income over the
periods which the deferred tax assets are deductible,  management believes it is
more likely than not the Company will  realize the benefits of these  deductible
differences, net of the existing valuation allowances at December 31, 2002.

11.  Related party transactions
     --------------------------
     The Company's  general  agent,  Insuradyne  Corporation,  is a wholly-owned
     subsidiary of Security National Financial Corporation.  The balances due to
     an affiliated insurance agency reflected in the accompanying balance sheets
     principally  represent  earned  commission due to  Insuradyne.  The Company
     incurred commission expense to Insuradyne  aggregating  $109,268,  $122,787
     and $180,941,  in 2002,  2001,  and 2000,  respectively.  These amounts are
     included  as  components  of   acquisition   costs   deferred  and  related
     amortization.  Insuradyne incurred  insurance-related  expenses aggregating
     $206, $77, and $1,147 in 2002, 2001, 2000, respectively.

<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


Effective December 31, 1998, the Company entered into an Administrative Services
Agreement  with its ultimate  parent  Security  National  Financial  Corporation
(Security National).  Under the terms of the Administrative  Services Agreement,
all  of  the  Company's   employees  became  employees  of  Security   National.
Administrative  functions  previously  performed  by the  Company  are now being
furnished  to the Company  under the  Agreement.  The  Company  pays to Security
National  $250,000  per month or $3  million  per year for these  administrative
services.

On December 28, 1998 the Company  entered into a Loan Funding and Fee  Agreement
and Agency Agreement (the  "Agreement")  with Security National Mortgage Company
("SNMC"),  a subsidiary of Security National.  Under the terms of the Agreement,
SNMC  assigns  their  interest  in  residential  mortgage  loans  that have been
pre-sold to third party  investors to the Company.  The Company  purchases these
loans and holds them as  short-term  investments  until it receives the proceeds
from the third party investors.  The Company receives  interest income from SNMC
based upon how long the loans were  outstanding.  At December  31, 2002 and 2001
the Company had  outstanding  loan  purchases of  $16,283,759  and  $13,860,534,
respectively.  Included in investment  income is $1,130,231 and $984,872 for the
years ended December 31, 2002 and 2001, respectively.

The Company  received for the years ended  December 31, 2002 and 2001,  $168,933
and $132,141  respectively,  as rental income from Security National for a lease
of office space in the Company's  building under the terms of the Administrative
Services Agreement.

The Company received for the years ended December 31, 2002 and 2001, $75,622 and
$77,394  respectively,  in interest income from Security National for short-term
loans of which  $113,707 and $344,308 were  outstanding  as of December 31, 2002
and 2001, respectively.

12.  Earnings (loss) per share
     -------------------------
     The  following  table  sets  forth the  computation  of basic  and  diluted
     earnings per share:

                                               2002           2001         2000
Numerator for basic and
  diluted Earnings per share:
      Net income (loss)                   $(70,566)       $70,976      $160,260
Denominator:
      Denominator for basic earnings
      per share weighted average shares  1,979,291      1,907,989     1,907,989

      Effective dilutive securities:
        Agent stock options                  --             --            --

Dilutive potential common shares             --             --            --
Denominator for diluted earnings
   per share weighted average shares
   and assumed conversions              1,979,291      1,907,989     1,907,989
Basic earnings (loss) per share             $(.04)          $.04          $.08
Diluted earnings (loss) per share           $(.04)          $.04          $.08

13.  Agents' incentive stock bonus plan
     ----------------------------------
     The Company has an incentive bonus plan for agents that was adopted January
     1, 1995 by the Company's Board of Directors and effective  through December
     31, 2002.  Agents that  qualify  under the plan have the option to purchase
     shares of common stock.  The number of shares of common stock is determined
     on the date of the award as the number of whole  shares  equal to the award
     based on the  applicable  stock  price on December 31 of the year the agent
     has  qualified for the bonus.  For each share of common stock  purchased by
     the agent,  the Company will  concurrently  award an  equivalent  number of
     shares to the agent.  Awards  were  granted  in 1999  under this plan.  The
     Company incurred expenses of approximately $5,010 relating to the Company's
     matching number of shares.  There were no awards granted in 2002, 2001, and
     2000.  If the agent  does not  purchase  the shares  within the  designated
     period,  then the agent  forfeits  their  rights to purchase  the shares of
     common stock as well as the matching  number of shares to be contributed by
     the Company.
<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)





14.  Disclosures about fair value of financial instruments

     Statement of Financial  Accounting Standards No. 107 Disclosures About Fair
     Value of Financial  Instruments (SFAS 107) requires the Company to disclose
     estimated fair value  information.  The following  methods and  assumptions
     were used by the Company in estimating fair values of financial instruments
     as disclosed herein:

     Cash and cash  equivalents,  short-term  investments and policy and student
     loans:  The  carrying  amount  reported  in the  balance  sheet  for  these
     instruments approximate their fair value.

     Investment securities  available-for-sale and held-to-maturity:  Fair value
     for fixed  maturity and equity  securities is based on quoted market prices
     at the reporting date for those or similar investments.

     Policyholders'  account balances:  The fair values for policyholder account
     balances are based on their approximate surrender values.

     The following table presents the carrying amounts and estimated fair values
     of financial instruments held at December 31, 2002 and 2001. The fair value
     of a financial  instrument is the amount at which the  instrument  could be
     exchanged in a current transaction between willing parties.
<TABLE>
<CAPTION>

                                                         2002                                  2001
                                                        -----                                 ------
                                              Carrying        Estimated              Carrying       Estimated
                                              amount         fair value              amount         fair value
                                            -----------     ------------           -----------     ------------
          Financial assets:
         <S>                               <C>                 <C>                 <C>             <C>
          Fixed maturities
             held-to-maturity
             (see note 3)                   $3,971,539         $4,167,028          $ 3,156,650      $ 3,250,894
          Fixed maturities
             available-for-
             sale (see note 3)              18,439,961         18,439,961           21,364,731       21,364,731
          Equity securities
             available-for-sale                309,218            309,218              372,183          372,183
          Mortgage loans                     2,244,597          2,244,597            2,268,292        2,268,292
          Policy and student loans           8,027,736          8,027,736            8,181,223        8,181,223
          Short-term investments            16,283,759         16,283,759           13,860,534       13,860,534
          Cash and cash equivalents          3,067,284          3,067,284            1,969,055        1,969,055

          Financial liabilities:
          Policy liabilities
             policyholders' account
               balances                    $47,222,857        $44,593,662          $47,601,259      $44,808,386

15.  Legal proceedings
     -----------------
     Lawsuits  against  the  Company  have  arisen in the  normal  course of the
     Company's business. However, contingent liabilities arising from litigation
     and other matters are not considered  material in relation to the financial
     position of the Company.

     To the best of the  Company's  knowledge,  it has no  potential  or pending
     contingent  liabilities  that might be material to the Company's  financial
     condition,  results of  operations  or  liquidity  pursuant  to product and
     environmental liabilities.
<PAGE>
</TABLE>

<TABLE>
<CAPTION>

                                                                                         Schedule I

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
        Summary of Investments Other Than Investments in Related Parties
                                December 31, 2002


                                             Number of shares or                                                 Amount at
                                              units-principal                                                   which shown
                                                amounts of                                 Fair                      in the
Type of investment                            bonds or notes              Cost            value                 balance sheet
<S>                                           <C>                  <C>                <C>                 <C>
Fixed maturities held-for-investment:
   U.S. Government and government
     agencies and authorities                        --             $      --         $      --            $           --
   Public utilities                                  --                    --                --                        --
   Industrial and miscellaneous                   3,705,803          3,690,569         3,878,945                 3,690,569
   Special revenue and special assessment
      of agencies and authorities of
      governments and political subdivisions        281,155            280,970           288,083                   280,970
                                                 ----------         ----------       -----------               -----------
   Total fixed maturities held for investment     3,986,958          3,971,539         4,167,028                 3,971,539

Fixed maturities available-for-sale:
   U.S. Government and government agencies
       and authorities                              600,000            595,993           699,690                   699,690
  Public utilities                                  655,000            665,576           693,854                   693,854
   Industrial and miscellaneous                  15,560,000         15,816,672        17,046,417                17,046,417
   Special revenue and special assessment
      of agencies and authorities of
      governments and political subdivisions          --                 --               --                         --
                                                -----------        -----------       -----------               -----------
   Total fixed maturities available for sale     16,815,000         17,078,241        18,439,961                18,439,961
                                                -----------        -----------       -----------               -----------
                                                 20,801,958         21,049,780        22,606,989                22,411,500
                                                -----------        -----------       -----------               -----------
Equity securities:
   Common, including investments in mutual fund      44,602            316,293       $   309,218                   309,218
                                                ===========                          ===========
Mortgage loans                                                       2,244,597                                   2,244,597

Policy loans                                                         7,930,065                                   7,930,065

Student loans                                                           97,671                                      97,671

Short-term investments                                              16,283,759                                  16,283,759
                                                                   -----------                                 -----------

   Total investments                                               $47,922,165                                 $49,276,810
                                                                   ===========                                 ===========
</TABLE>
<PAGE>

See accompanying auditors' report.

<PAGE>
<TABLE>
<CAPTION>

                                  Schedule III
                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                       Supplementary Insurance Information

                          December 31, 2002, 2001, 2000


                        Future policy                           Other                          Benefits Amortization
             Deferred     benefits,     Policy-                policy                          claims    of deferred
             policy     losses claims  holders'                claims &              Net      losses &    policy        Other
           acquisition   and loss      account    Unearned    benefits   Premium  investment  settlement acquisition   operating
              cost        expenses     balances   premiums    payable     revenue   income     expenses     costs      expenses
           -----------  -----------  ----------  ----------  --------- ---------- ---------  ----------  --------     -----------
<S>         <C>          <C>        <C>         <C>           <C>     <C>        <C>         <C>         <C>          <C>
2002 Life
  and
  annuities $13,391,535  3,517,481  47,222,857  4,551,265    701,312  7,075,257   3,835,420   5,343,573  1,969,966     3,678,920

2001 Life
  and
  annuities $12,974,390  2,901,599  47,601,259  4,694,563  1,147,403  6,736,027   3,866,966   4,482,588  2,197,399     3,835,165

2000 Life
  and
  annuities $13,211,413  2,965,940  48,722,138  4,948,989    580,196  6,698,869   3,935,607   5,109,411  1,797,320     3,529,381
</TABLE>











See accompanying auditors' report.


<PAGE>
<TABLE>
<CAPTION>

                                                                                                           Schedule IV
                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                   Reinsurance

                          December 31, 2002, 2001, 2000


                                                         Ceded to         Assumed                           Percentage
                                                           other         from other                          of amount
                                     Direct amount       companies       companies      Net amount         assumed to net
December 31, 2002:
<S>                                  <C>              <C>              <C>            <C>                          <C>
   Life insurance in force           $702,535,000     $164,248,000     $824,243,000   $1,362,530,000               60%
                                     ============     ============     ============   ==============               ===
   Premiums:
     Life insurance                    $6,812,419         $648,517         $789,453       $6,953,355               11%
     Accident & health insurance          121,902            --               --             121,902               --
                                     ------------     ------------     ------------   --------------             -----
   Total Premiums                      $6,934,321         $648,517         $789,453       $7,075,257               11%
                                     ------------     ------------     ------------   --------------             -----
December 31, 2001:
   Life insurance in force           $750,557,000     $179,242,000     $817,437,000   $1,388,752,000               59%
                                     ============     ============     ============   ==============               ===
   Premiums:
     Life insurance                    $6,579,409         $635,733         $649,916       $6,593,592               10%
     Accident & health insurance          150,777            8,342               --          142,435               --
                                     ------------     ------------     ------------   --------------             -----
   Total Premiums                      $6,730,186         $644,075         $649,916       $6,736,027               10%
                                     ============     ============     ============   ==============              ====
December 31, 2000:
   Life insurance in force           $811,233,000     $210,365,000     $558,575,000   $1,159,443,000               48%
                                     ============     ============     ============   ==============               ===
   Premiums:
     Life insurance                    $6,641,835         $668,323         $557,352       $6,530,864                9%
     Accident & health insurance          194,323           26,318               --          168,005               --
                                     ------------     ------------     ------------   --------------              ----
   Total Premiums                      $6,836,158         $694,641         $557,352       $6,698,869                8%
                                     ============     ============     ============   ==============               ====
</TABLE>

See accompanying auditor's report.

<PAGE>

Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure.

None

                                    PART III

Item 10.  Directors and executive officers of the Company.

The Company's Board of Directors consists of eight persons, four of whom are not
employees of the Company.  There is no family relationship  between or among any
of the directors, except that Scott M. Quist and G. Robert Quist are the sons of
George R. Quist. The following table sets forth certain information with respect
to the directors and executive officers of the Company.

                                  Director/Officer
      Name             Age          Since          Position(s) with the Company
--------------        ------      ---------------- ----------------------------
George R. Quist          82       December 1998    Chairman of the Board and
                                                   Chief Executive Officer

Scott M. Quist           49       December 1998    President,  General
                                                   Counsel,  Chief  Operating
                                                   Officer and Director

G. Robert Quist          51       April 1999       Vice President, Secretary
                                                   and Director

J. Lynn Beckstead, Jr.   49       March 2002       Vice President and Director

Charles L. Crittenden    82       December 1998    Director

Robert G. Hunter         43       December 1998    Director

H. Craig Moody           51       December 1998    Director

Norman G. Wilbur         64       December 1998    Director

Stephen M. Sill          57       March 2002       Vice President, Treasurer
                                                   and Chief Financial Officer

Committees of the Board of Directors  include an executive  committee,  on which
Messrs. George Quist, Scott Quist, and Moody serve; an audit committee, on which
Messrs.  Crittenden,  Moody, and Wilbur serve; and a compensation  committee, on
which Messrs. Crittenden, Wilbur and George Quist serve.

The  following  is a  description  of the  business  experience  of  each of the
directors and executive officers.

George R. Quist has been  Chairman of the Board and Chief  Executive  Officer of
the Company since  December 1998. He has served as President of the Company from
December  1998 until July 2002.  Mr.  Quist has also  served as  Chairman of the
Board and Chief  Executive  Office of Security  National  Financial  Corporation
since October 1979,  and its President  from October 1979 until July 2002.  From
1960 to 1964, he was Executive Vice President and Treasurer of Pacific  Guardian
Life Insurance Company. From 1946 to 1960, he was an agent, District Manager and
Associate General Agent for various insurance  companies.  Mr. Quist also served
from  1981  to  1982  as the  President  of The  National  Association  of  Life
Companies, a trade association of 642 life insurance companies, and from 1982 to
1983 as its Chairman of the Board.

Scott M. Quist has been  President  of the  Company  since July 2002,  its Chief
Operating  Officer since October 2001, and as its General Counsel and a director
since  December  1998. In addition,  Mr. Quist served as First Vice President of
the  Company  from  December  1998 to July 2002.  Mr.  Quist has also  served as
President of Security  National  Financial  Corporation  since July 2002, as its
Chief Operating Officer since October 2001, and its General
<PAGE>


Counsel and a director  since May 1986.  From 1980 to 1982,  Mr. Quist was a tax
specialist with Peat, Marwick,  Mitchell, & Co., in Dallas,  Texas. From 1986 to
1991,  he was a treasurer  and  director  of The  National  Association  of Life
Companies,  a trade association of 642 insurance companies until its merger with
the American Council of Life Companies. Mr. Quist has been a member of the Board
of Governors of the Forum 500 Section  (representing small insurance  companies)
of the American Council of Life Insurance. Mr. Quist has also served as regional
director  of Key Bank of Utah since  November  1993.  Mr.  Quist is  currently a
director  and  immediate  past  president  of  the  National  Alliance  of  Life
Companies, a trade association of over 200 life companies.

G. Robert Quist has been a director of the Company  since April 1999.  Mr. Quist
has also served as Vice President and Secretary of Security  National  Financial
Corporation  since March 2002.  He has served as President and a director of Big
Willow  Water  Company  since 1987 and as a  director  of  Associated  Investors
Company  of  Hawaii   since  1987.   He  has  also  served  as  a  director  and
Secretary-Treasurer of the Utah Cemetery Association since 1987.

J. Lynn  Beckstead  Jr. has been a Vice  President and a director of the Company
since March 2002.  Mr.  Beckstead has also served as Vice President and director
of Security National  Financial  Corporation since March 2002. In addition he is
President of Security National  Mortgage  Company,  an affiliate of the Company,
and has  served  in this  position  since  July  1993.  From  1990 to 1993,  Mr.
Beckstead was Vice  President and a director of Republic  Mortgage  Corporation.
From 1983 to 1990,  Mr.  Beckstead  was Vice  President and director of Richards
Woodbury Mortgage Corporation.  From 1980 to 1983, he was a principal broker for
Boardwalk  Properties.  From 1978 to 1980, Mr.  Beckstead was a residential loan
officer for Medallion Mortgage Company.  From 1977 to 1978, he was a residential
construction loan manager of Citizens Bank.

Charles L.  Crittenden  has been a director of the Company since  December 1998.
Mr. Crittenden is also a director of Security National Financial Corporation and
has served in this position  since October 1979.  Mr.  Crittenden  has been sole
stockholder of Crittenden  Paint & Glass Company since 1958. He is also an owner
of Crittenden Enterprises, a real estate development company and Chairman of the
Board of Linco, Inc.

Robert G. Hunter,  M.D. has been a director of the Company since  December 1998.
Dr. Hunter is also a director of Security National Financial Corporation and has
served in this position since October 1998. Dr. Hunter is currently a practicing
physician  in  private  practice.  Dr.  Hunter  created  the State  Wide  E.N.T.
Organization (Rocky Mountain E.N.T., Inc.) where he is currently a member of the
Executive  Committee.  He is  Chairman  of Surgery  at  Cottonwood  Hospital,  a
delegate to the Utah Medical Association and a delegate representing Utah to the
American Medical Association, and a member of several medical advisory boards.

H. Craig Moody has been a director of the Company since December 1998. Mr. Moody
is also a director of Security National Financial  Corporation and has served in
this position since September 1995. Mr. Moody is owner of Moody & Associates,  a
political  consulting and real estate company.  He is a former Speaker and House
Majority Leader of the House of Representatives of the State of Utah.

Norman G. Wilbur has been a director of the Company  since  December  1998.  Mr.
Wilbur is also a director of Security  National  Financial  Corporation  and has
served in this position since October 1998.  Mr. Wilbur worked for J.C.  Penny's
regional  offices in budget and  analysis.  His final  position  was  Manager of
Planning  and  Reporting  for J.C.  Penney's  stores.  After 36 years  with J.C.
Penny's,  he took an option of an early retirement in 1997. Mr. Wilbur is a past
board member of a homeless organization in Plano, Texas.

Stephen M. Sill has been Vice President,  Treasurer and Chief Financial  Officer
of the Company  since March 2002.  He has been a Vice  President,  Treasurer and
Chief Financial Officer of Security National  Financial  Corporation since March
2002.  From 1998 to 2002,  Mr. Sill was Vice  President  and  Controller  of the
Company.  From 1997 to 2002,  Mr.  Sill was Vice  President  and  Controller  of
Security National  Financial  Corporation.  From 1994 to 2002, Mr. Sill was Vice
President and Controller of Security National Life Insurance Company.  From 1989
to 1993, he was  Controller  of Flying J, Inc.  From 1978 to 1989,  Mr. Sill was
Senior Vice President and Controller of Surety Life Insurance Company. From 1975
to 1978, he was Vice President and Controller of Sambo's  Restaurant,  Inc. From
1974 to  1975,  Mr.  Sill  was  Director  of  Reporting  of  Northwest  Pipeline
Corporation. From 1970 to 1974, he was an auditor with Arthur Andersen & Co. Mr.
Sill is a  director  and  president  of the  Insurance  Accounting  and  Systems
Association (IASA), a national association of over 1,300 insurance companies and
associate members.

<PAGE>

Executive Officers

The following table sets forth certain information with respect to the executive
officers of the Company (the business biographies set forth above):

      Name                Age           Title
-------------------      ------      --------------
George R. Quist (1)        82        Chairman of the Board and Chief Executive
                                     Officer

Scott M. Quist (1)         49        President, General Counsel and Chief
                                     Operating Officer

G. Robert Quist (1)        51        Vice President and Secretary

Stephen M. Sill            57        Vice President, Treasurer and
                                     Chief Financial Officer

(1) George R. Quist is the father of Scott M. Quist and G. Robert Quist.

The Board of Directors  of the Company has a written  procedure  which  requires
disclosure to the board of any material  interest or any affiliation on the part
of any of its officers, directors or employees which is in conflict or may be in
conflict with the interests of the Company.

No director,  officer or 5% stockholder of the Company or its  subsidiaries,  or
any  affiliate  thereof  has  had  any  transactions  with  the  Company  or its
subsidiaries during 2002 or 2001.

Each  of  the  directors  are  board  members  of  Security  National  Financial
Corporation (the ultimate parent of the Company) with the exception of G. Robert
Quist,  which has a class of equity  securities  registered under the Securities
Exchange  Act of 1934,  as amended.  In  addition,  Scott M. Quist is a regional
director of Key Bank of Utah. All directors of the Company hold office until the
next annual meeting of  stockholders,  until their  successors have been elected
and qualified, or until their earlier resignation or removal.

Item 11.  Executive compensation.

     (a) Summary  compensation.  The following table sets forth, for each of the
last three fiscal years, the compensation  received by George R. Quist, Chairman
of the Board and Chief Executive Officer of the Company, and all other executive
officers at December  31,  2002,  whose salary and bonus for all services in all
capacities exceed $100,000 for the fiscal year ended December 31, 2002.
<TABLE>
<CAPTION>

                                                      SUMMARY COMPENSATION TABLE
                                                                                       Long Term Compensation

                                           Annual Compensation                Awards           Awards       Payouts
                            ________________________________________________             __________________________________
    (a)                  (b)        (c)           (d)          (e)           (f)              (g)         (h)           (i)
                                                              Other      Restricted       Securities                All other
Name and                                                     Annual         Stock         Underlying     LTIP         Compen-
Principal                                                 Compensation     Awards          Options/     Payouts       sation
Position                Year     Salary($)     Bonus($)        ($)           ($)            SARs(#)       ($)            $
Chief
Executive
Officer
<S>                      <C>      <C>            <C>           <C>             <C>           <C>         <C>            <C>

George R. Quist(1)        2002    $0              $0           $0              $0             N/A         N/A            N/A
George R. Quist(1)        2001    $0              $0           $0              $0             N/A         N/A            N/A
George R. Quist(1)        2000    $0              $0           $0              $0             N/A         N/A            N/A
</TABLE>

<PAGE>

(1)  Effective  January 1, 1999,  the  Company  entered  into an  Administrative
     Services  Agreement with its ultimate  parent Security  National  Financial
     Corporation  (Security  National).  Under the  terms of the  Administrative
     Services  Agreement,  all of the Company's  employees  became  employees of
     Security National.  Administrative  functions  previously  performed by the
     Company are now being  furnished to the Company under this  Agreement.  The
     Company pays to Security National $250,000 per month or $3 million per year
     for the Administrative services.

     (b)  Perquisites.  The Company does not have a pension, retirement or other
          deferred compensation plan, or any other similar arrangement.

     (c)  Director's  fees  and  other  fees.  Directors  did  not  receive  any
          compensation in 2000, 2001 or 2002.

     (d)  Compensation  committee  interlocks  and  insider  participation.  The
          Executive   Committee  of  the  Company's  Board  of  Directors  makes
          recommendation  to  the  board  concerning  the  compensation  of  the
          Company's executive officers.  Subsequently, the board makes all final
          decisions concerning such compensation.

     (e)  Employee contracts. The Company does not have any employee contracts.

Item 12.  Security ownership of certain beneficial owners and management.

The  following  table sets forth,  as of December  31,  2002,  information  with
respect to the only persons known by the Company to be the  beneficial  owner of
more than 5% of the Company's outstanding voting securities:

                                               Number of Shares
  Title of         Name and Address of       and Nature of Beneficial  Percent
   Class             Beneficial Owner            Ownership             of Class
-------------  -------------------------    ------------------
Common Shares  SSLIC Holding Company Inc., formerly
               Consolidare Enterprises, Inc.           1,150,271         57.4%
               c/o Security National Life Ins. Co.       Direct
               5300 S 360 W, Suite 200
               Salt Lake City, UT 84123

Common Shares  Security National Life Insurance Company  350,942         17.5%
  Shares       5300 South 360 West, Suite 200            Direct
               Salt Lake City, Utah 84123

Item 13.  Certain relationships and related transactions.

Insuradyne Corporation, a wholly owned subsidiary of Security National Financial
Corporation,  serves as general  agent for the  Company,  pursuant  to a general
agency  agreement,  which is terminable by either party with 30 days notice.  In
such capacity, Insuradyne receives a commission on the first year commissionable
premium  on  certain  of the  Company's  policies  as well  as a  small  renewal
commission on certain other policies.  In accordance with the Florida  Insurance
Code,  a  copy  of  the  Company's  General  Agency  Agreement  with  Insuradyne
Corporation was filed with and approved by the Florida  Department of Insurance.
Management  of the  Company  believes  that  the  terms  of its  General  Agency
Agreement  with  Insuradyne are as favorable to the Company as terms which could
be obtained from independent third parties.

During 2002 and 2001, gross commissions in the amounts of $109,268 and $122,787,
respectively,  were earned by Insuradyne Corporation.  At December 31, 2002, the
Company  owed  $83,941  to  Insuradyne  as a result  of  commissions  earned  by
Insuradyne but for which Insuradyne has not yet requested payment.

No  director  or officer of the  Company or any  associates  of any  director or
officer of the Company was indebted to the Company at December 31, 2002.

The Company  continues  to be indebted to its  parent,  Security  National  Life
Insurance Company (SNLIC), in the amount of $1,000,000, pursuant to a promissory
note dated  December  1988,  which bears interest at the annual rate of interest
equal to the prime rate (as  hereinafter  defined)  plus 2%, with such  interest
rate  not to be  less  than  9% nor in  excess  of  11%.  For  purposes  of this
promissory  note,  prime rate is defined to mean the prime rate as  announced by
Compass Bank,  Birmingham,  Alabama, from time to time, as its prime rate (which
interest  rate  is  only  a  bench  mark,  is  purely  discretionary  and is not
necessarily  the  best  or  lowest  rate  charged  borrowing  customers).   This
promissory note is due on demand and is payable out of capital surplus in excess
of  $1,874,000,  pursuant  to Florida  Statutes  628.401  (1990).  Interest  and
principal  can only be repaid upon the express  written  approval of the Florida
Department of Insurance.


<PAGE>

The Company entered into an Administrative Services Agreement dated December 17,
1998 with SNFC. Under the terms of the agreement, SNFC has agreed to provide the
Company  with   certain   defined   administrative   and   financial   services,
underwriting,  data processing,  legal, building management,  marketing advisory
services  and  investment  services.  In  consideration  for the  services to be
provided by SNFC, the Company shall pay SNFC an  administrative  services fee of
$250,000 per month,  which may be  increased,  beginning on January 1, 2001,  to
reflect  increases in Consumer Price Index,  over the index amount as of January
1, 2000.

The Administrative Services Agreement shall remain in effect for an initial term
expiring  on  December  16,  2003.  However,  the term of the  agreement  may be
automatically extended for an additional one-year term unless either the Company
or SNFC shall  deliver a written  notice on or before  September  30 of any year
stating to the other its desire not to extend the term of the  agreement.  SSLIC
Holding Company, a wholly owned subsidiary of SNLIC, owns 75% of the outstanding
shares of common stock of the Company.  SNLIC is a wholly  owned  subsidiary  of
SNFC. In addition, George R. Quist, the Company's Chief Executive Officer is the
Chief  Executive  Officer of SNFC;  Scott M.  Quist,  the  Company's  President,
General Counsel and Chief Operating Officer,  is the President,  General Counsel
and Chief  Operating  Officer of SNFC;  G.  Robert  Quist,  the  Company's  Vice
President and Secretary, is the Vice President and Secretary of SNFC; Stephen M.
Sill, the Company's Vice President,  Treasurer and Chief Financial  Officer,  is
the Vice President,  Treasurer and Chief Financial Officer of SNFC. Finally, the
directors of the Company,  with the exception of G. Robert Quist,  also serve as
the  directors  of SNFC.  See Item 7.  Management's  Discussion  and Analysis of
Financial Condition and Results of Operation.

On December 28, 1998 the Company  entered into a Loan Funding and Fee  Agreement
and Agency Agreement (the  "Agreement")  with Security National Mortgage Company
("SNMC"),  a subsidiary of SNFC. Under the terms of the Agreement,  SNMC assigns
its  interest in  residential  mortgage  loans that have been  pre-sold to third
party investors to the Company. The Company purchases these loans and holds them
as short-term  investments  until it receives the proceeds from the  third-party
investors.  The  Company  receives  fee income from SNMC based upon how long the
loans  were  outstanding.  At  December  31,  2002 and  2001,  the  Company  had
outstanding  loan  purchases  of  $16,283,759  and  $13,860,534,   respectively.
Included in  investment  income is  $1,130,231  and $984,872 for the years ended
December 31, 2002 and 2001, respectively.

The Company  received for the years ended  December 31, 2002 and 2001,  $168,933
and  $132,141,  respectively,  as rental  income from SNFC for a lease of office
space in the Company's building under the terms of the  Administrative  Services
Agreement.

The Company received for the year ended December 31, 2002 and 2001,  $75,622 and
$77,394,  respectively,  in interest  income from SNFC for  short-term  loans of
which  $85,617 and $344,300 were  outstanding  as of December 31, 2002 and 2001,
respectively.

Item 14. Controls and Procedures

     (a)  Evaluation  of  disclosure  controls and  procedures  - The  Company's
Principal  Executive  Officer and Principal  Financial Officer have reviewed and
evaluated the effectiveness of the Company's  disclosure controls and procedures
(as  defined in Rules  240.13a-14(c)  and  15d-14(c)  under the  Securities  and
Exchange Act of 1934 (the "Exchange Act") as of a date within ninety days before
the filing date of this annual report.  Based on that evaluation,  the Principal
Executive  Officer and the Principal  Financial  Officer have concluded that the
Company's disclosure controls and procedures are effective,  providing them with
material  information relating to the Company as required to be disclosed in the
reports the Company files or submits under the Exchange Act on a timely basis.

     (b) Changes in internal controls - There were no significant changes in the
Company's  controls  or in other  factors  that could  significantly  affect the
Company's  disclosure  controls and  procedures  subsequent to the date of their
evaluation,  nor were there any significant  deficiencies or material weaknesses
in the Company's  internal  controls.  As a result,  no corrective  actions were
required or undertaken.


<PAGE>

                                     PART IV


Item 15.  Financial statements, exhibits filed and reports on Form 10-K.

                                                                Page Number
         (a) 1.       See item 8

             2.       Supplemental Schedules

                      Required Financial Data - for the years ended
                      December 31, 2002, 2001 and 2000 - included in
                      Part II, Item 8:

                      Schedule I - Summary of Investments -
                      Other than Investments in Related
                      Parties                       ................41

                      Schedule III - Supplementary Insurance
                      Information                   ................42

                      Schedule IV - Reinsurance     ................43

Schedules  other than those listed above have been omitted  because they are not
applicable  or because the  required  information  is included in the  financial
statements and notes thereto or in Item 7 - Management's Discussion and Analysis
of Financial Condition and Results of Operations.

3.       Exhibits

      Exhibit     Document No.

     3.   Articles of Incorporation,  as amended, and Bylaws, as amended,  dated
          September  1994,  incorporated  by reference from the Annual Report on
          Form 10-K for fiscal year ended December 31, 1994.

     10.A Revolving Financing Agreement between the Company and the Student Loan
          Marketing  Association,  dated  September  19, 1996,  incorporated  by
          reference  from  Annual  Report on Form  10-K for  fiscal  year  ended
          December 31, 1997.

     10.B Reinsurance  Agreement  between the Company and United Group Insurance
          Company, dated December 31, 1992 incorporated by reference from Annual
          Report on Form 10-K for fiscal year ended December 31, 1992.

     10.C Agency  Agreement  between  the Company  and  Insuradyne  Corporation,
          incorporated  by reference  from Annual Report on Form 10-K for fiscal
          year ended December 31, 1993.

     10.D Administrative  Services  Agreement  between the Company and  Security
          National Financial  Corporation dated December 17, 1998,  incorporated
          by  reference  from  Annual  Report on Form 10-K for fiscal year ended
          December 31, 1998.

     10.E Agency Agreement  between the Company and Security  National  Mortgage
          Company dated December 28, 1998, incorporated by reference from Annual
          Report on Form 10-K for fiscal year ended December 31, 1999.

     10.F Loan  Funding and Fee  Agreement  between  the  Company  and  Security
          National  Mortgage Company dated December 28, 1998, from Annual Report
          on Form 10-K for fiscal year ended December 31, 1999.

     11.  Statement Re Computation of Net Income per common share

b)        Reports on Form 8-K

                  None
<PAGE>


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY


Dated: March 31, 2003     By: s/s   George R. Quist
                              George R. Quist
                              Chairman of the Board and Chief Executive Officer

Pursuant to the requirements of the Securities  Exchange Act of 1934 as amended,
this report has been signed by the following persons in counterpart on behalf of
the Company on the dates indicated:



Signature                         Title                         Date
----------                     ----------
George R. Quist          Chairman of the                     March 31, 2003
                         Board and Chief Executive
                         Officer (Principal Executive
                         Officer)

Scott M. Quist           President, General Counsel,         March 31, 2003
                         Chief Operating Officer and
                         Director

Stephen M. Sill          Vice President, Treasurer and
                         Chief Financial Officer (Principal
                         Financial and Accounting
                         Officer)                            March 31, 2003

G. Robert Quist          Vice President, Secretary
                         and Director                        March 31, 2003

J. Lynn Beckstead, Jr.   Vice President and Director         March 31, 2003

Charles L. Crittenden    Director                            March 31, 2003

Robert G. Hunter         Director                            March 31, 2003

H. Craig Moody           Director                            March 31, 2003

Norman G. Wilbur         Director                            March 31, 2003

<PAGE>

                                 CERTIFICATIONS

I, George R. Quist, certify that:

     1. I have  reviewed  this annual  report on Form 10-K of Southern  Security
Life Insurance Company;

     2. Based on my  knowledge,  this annual  report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The  registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     (a)  Designed  such  disclosure  controls  and  procedures  to ensure  that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this annual report is being prepared;

     (b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures  as of a date  within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

     (c) Presented in this annual report our conclusions about the effectiveness
of the  disclosure  controls and  procedures  based on our  evaluation as of the
Evaluation Date;

     5. The registrant's other certifying  officers and I have disclosed,  based
on our most  recent  evaluation,  to the  registrant's  auditors  and the  audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

     (a) All  significant  deficiencies  in the design or  operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     (b) Any fraud,  whether or not material,  that involves management or other
employees who have a significant role in the registrant's internal controls; and

     6. The registrant's other certifying  officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 31, 2003

                                         By:      George R. Quist
                                                  Chairman of the Board,
                                                  Chief Executive Officer

<PAGE>

                                 CERTIFICATIONS

I, Stephen M. Sill, certify that:

     1. I have  reviewed  this annual  report on Form 10-K of Southern  Security
Life Insurance Company;

     2. Based on my  knowledge,  this annual  report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The  registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     (a)  Designed  such  disclosure  controls  and  procedures  to ensure  that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this annual report is being prepared;

     (b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures  as of a date  within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

     (c) Presented in this annual report our conclusions about the effectiveness
of the  disclosure  controls and  procedures  based on our  evaluation as of the
Evaluation Date;

     5. The registrant's other certifying  officers and I have disclosed,  based
on our most  recent  evaluation,  to the  registrant's  auditors  and the  audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

     (a) All  significant  deficiencies  in the design or  operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     (b) Any fraud,  whether or not material,  that involves management or other
employees who have a significant role in the registrant's internal controls; and

     6. The registrant's other certifying  officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date:  March 31, 2003

                                   By:      Stephen M. Sill
                                            Vice President, Treasurer and
                                            Chief Financial Officer

<PAGE>

                                  EXHIBIT 99.1
                            CERTIFICATION PURSUANT TO
                             18 U.S.C. Section 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Southern Security Life Insurance Company
(the  "Company") on Form 10K for the period  ending  December 31, 2002, as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
I, George R. Quist, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that, to the best of my knowledge and belief:

(1)  the Report fully complies with the  requirements  of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

(2)  the information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and result of operations of the Company.

George R. Quist
Chief Executive Officer
March 31, 2003

                                  EXHIBIT 99.2
                            CERTIFICATION PURSUANT TO
                             18 U.S.C. Section 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Southern Security Life Insurance Company
(the  "Company") on Form 10K for the period  ending  December 31, 2002, as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
I, Stephen M. Sill, Chief Financial Officer of the Company, certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that, to the best of my knowledge and belief:

(1)  the Report fully complies with the  requirements  of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

(2)  the information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and result of operations of the Company.

Stephen M. Sill
Chief Financial Officer
March 31, 2003

<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                   EXHIBIT 11

                            COMPUTATION OF NET INCOME

                                PER COMMON SHARE



                                            2002           2001          2000
Weighted Average Shares Outstanding       2,003,388      1,907,989    1,907,989
Net Income (Loss)                          $(70,566)       $70,976     $160,260
Per Share Amount                              $(.04)          $.04         $.08