<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-K

(Mark One)
        [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934 (FEE REQUIRED)

For the fiscal year ended December 31, 1996
                                       OR

        [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

Commission File No. 2-35669

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
               (Exact name of Company as specified in its charter)

                 Florida                           59-1231733
       (State or other jurisdiction    (Employer Identification Number)
    of incorporation or organization)

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

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

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

                                      Name of Each Exchange on
              Title of Each            Class Which Registered
                   None                           None

          Securities registered pursuant to Section 12(g) of the Act:
                                      None
                                (Title of Class)

         Indicate  by check mark  whether  the Company (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 Company
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.    X

State the aggregate market value of the voting stock held by nonaffiliates of
the Company:  $3,989,366 as of March 31, 1996.

The number of shares of the Company outstanding as April 1, 1996 is as follows:
                                                Number Outstanding at
             Title of Class                        April 1, 1996
             Common Stock
             Par value $1.00 per share                1,907,989

                                        1

<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.  The  Company  obtained  authorization  in the  states of  Indiana  and
Oklahoma  in 1996  and will  continue  the  process  of  seeking  authorization,
directly or through  acquisition,  to transact  business  in  additional  states
during 1997. During 1996, approximately 43% of the premium income of the Company
was from business in force in its state of domicile. The Company's only industry
segment is the ordinary life, accident and health and annuity business.

         The Company at present  writes  universal  life  policies  with various
companion  riders  as well as a  traditional  life  product.  In the past it has
written various forms of ordinary life insurance policies and annuity contracts.
The  Company's   accident  and  health  insurance  business  has  never  been  a
significant  portion of the  Company's  business.  It does not  presently  write
industrial life or group life insurance other than through its  participation as
a reinsurer in the Servicemen's Group Life Insurance Program ("SGLI").  In 1996,
the Company  introduced a new whole life product designed to appeal to the final
expense market.

         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 60% and 98% of
the policies written by the Company in 1996 and 1995 respectively,  were for the
universal life products.

         During  first  quarter  1996,  the Company  introduced  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.  A lead
generation  program was used to support  this new product as it was  introduced.
New field sales representatives are actively recruiting to market the product.

         The Company is continuing  to support its  traditional  universal  life
marketing as well. The Company  established a lead generation  program which has
been coupled with a recruiting  program for new sales agents to help rebuild the
market.  This has  helped  to  increase  opportunities  to  expand  sales of its
universal  life products  which are designed to provide an insurance  program as
well as a savings vehicle through the cash values of the policy.

                                        2

<PAGE>



         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>
                               1996                             1995                                1994
                               ====                             ====                                ====

                                      Per-                            Per-                               Per-
                       Amount         centage           Amount        centage             Amount         centage
<S>                  <C>           <C>             <C>              <C>              <C>               <C>
Life
Insurance-
Ordinary
(1)(2)                 $9,225,755        92%          $10,220,659       93%              $11,549,563      95%

Individual
Annuities
(1)                       307,618         3%              195,473        2%                  102,992       1%

Life
Insurance-
Group
(SGLI)                    529,554         5%              518,597        5%                  536,880       4%

Other -
Accident &
Health                      1,274         0%                1,385        0%                    1,628       0%
                      -----------       ----         ------------      ----              -----------     ----

                      $10,064,201       100%          $10,936,114      100%              $12,191,063     100%
                      ===========       ====          ===========      ====              ===========     ====

</TABLE>


(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 1995 and 1996 premium income for life insurance-ordinary
                    are net of reductions of $2,105,768 and $1,767,418,
                    respectively, in ceded premium paid to all reinsurers,
                    including Mega Life.

            (The remainder of this page is intentionally left blank)


                                        3

<PAGE>



          The  following  table  gives  information  [on  a  generally  accepted
accounting principles basis] for the Company concerning operating ratios for the
periods indicated:

<TABLE>
<CAPTION>
                                                 1996                    1995                     1994
                                                 ----                    ----                     ----

<S>                                           <C>                      <C>                      <C>    
Total Net Insurance
 revenues                                     $7,915,027              $8,158,938               $9,299,789


Benefit Costs:
  Amount                                      $3,818,562              $4,061,096               $4,115,257
  Ratio to Net Premium
   Income                                           48.2%                   49.8%                    44.3%

Acquisition Expenses:
  Amount                                      $3,364,738              $3,069,742               $3,242,706
  Ratio to Net Premium
   Income                                           42.5%                   37.6%                    34.9%

General Insurance Expenses:
  Amount                                      $3,246,552              $2,825,280               $3,276,386
  Ratio to Net Premium
    Income                                            41%                   34.6%                    35.2%

Income Before Income Taxes:
  Amount                                      $1,588,505              $1,274,903               $1,543,979
  Ratio to Net Premium
   Income                                           20.1%                   15.6%                    16.6%
  Ratio to Total Income                             13.1%                   11.4%                    12.7%
  Ratio to Equity                                   10.1%                    8.6%                    12.2%
</TABLE>



            (The remainder of this page is intentionally left blank)



                                        4

<PAGE>



         The following table provides  information about the Company  concerning
changes in life insurance in force (shown in thousands -000 omitted)  during the
periods indicated (exclusive of acciden tal death benefits):
<TABLE>
<CAPTION>

                                                            1996                  1995                     1994
                                                            ----                  ----                     ----
<S>                                                  <C>                 <C>                          <C>   
Total life insurance in force at
beginning of period:
   Ordinary Whole Life &
    Endowment-Participating                                 $584                     $583                     $750
   Ordinary Whole Life &
    Endowment-Non-Participating                        1,289,250                1,459,149                1,603,358
   Term                                                    8,371                    9,422                   12,051
   SGLI                                                  507,552                  531,502                  564,828
                                                         -------                  -------                  -------

   Total                                              $1,805,757               $2,000,656               $2,180,987

Additions (including re-insurance assumed):
   Ordinary Whole Life &
    Endowment-Participating                                - 0 -                    - 0 -                    - 0 -
   Ordinary Whole Life &
    Endowment-Non-Participating                          122,578                  125,961                  188,622
   Term                                                    - 0 -                    - 0 -                    - 0 -
   SGLI                                                   64,071                        8                        9
                                                         -------                  -------                  -------

   Total                                                $186,649                 $125,969                 $188,631


Terminations:
  Death                                                   $1,756                   $2,204                   $1,849
  Lapse and Expiry                                        73,919                   89,868                  114,372
  Surrender                                              212,801                  228,334                  251,306
  Other                                                      280                      463                    1,435
                                                         -------                  -------                    -----
  Total                                                 $288,756                 $320,869                 $368,962

Life Insurance in force at end of period:
   Ordinary Whole Life &
   Endowment-Participating                                  $441                     $583                     $583
   Ordinary Whole Life &
   Endowment-Non-Participating                         1,157,624                1,289,250                1,459,149
   Term                                                    7,884                    8,371                    9,422
   SGLI                                                  537,701                  507,552                  531,502
                                                         -------                  -------                  -------

   Total                                              $1,703,650               $1,805,756               $2,000,656
                                                       ---------                ---------                ---------
Reinsurance Ceded                                       (386,084)                (448,382)                (502,185)
                                                        --------                 --------                 --------
Total after Reinsurance Ceded                         $1,317,566               $1,357,374               $1,498,471


Lapse Ratio (Reflecting termina-
tion by surrender and lapse;
ordinary life insurance only):                              20.5%                    21.1%                    21.5%

</TABLE>

                                        5

<PAGE>



     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:
<TABLE>
<CAPTION>

                     Mean                        Gross                     Net
Fiscal            Investment                   Investment               Investment                Net
Year              Assets (1)                    Income(2)               Income (3)              Yield (4)
-----             ----------                   ----------               ----------              ---------
<S>            <C>                          <C>                      <C>                     <C>   

1996              $51,752,712                  $3,508,161               $3,318,267                6.41%

1995              $46,899,142                  $3,225,630               $2,998,875                6.39%

1994              $46,573,901                  $3,111,186               $2,750,771                5.91%
</TABLE>


(1)               Computed pursuant to valuations prescribed under generally
                  accepted accounting principles.

(2)               Includes capital gains and net of capital losses.

(3)               Net of investment expense and before income taxes or extra
                  ordinary terms.

(4)               Computed on an annualized basis.  Represents ratio of net
         investment income to mean 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  247 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 the Company's parent,  Consolidare Enterprises,  Inc.
See "Certain  Relationships  and Related  Transactions"  in item 13, Part III of
this Report.

         The  Company  presently  employs 37  persons,  none of whom are covered
under  any  collective  bargaining  agreements.  The  Company  feels it has good
relations with its employees.


                                        6

<PAGE>



         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 (4%) of total  liabilities.  The  Company's  required
statutory  minimum  surplus  calculated  in  accordance  with  this  section  is
approximately  $1,800,000. 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, 1996, the Company had statutory  capital and surplus of $9,283,928,
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

                                        7

<PAGE>



         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.

         Based on  calculations  using the NAIC formula as of December 31, 1996,
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, Kentucky, Louisiana, Michigan, Missouri, 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 diver sification 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

                                        8

<PAGE>



of Hanover,  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 participation in SGLI.

         The Company is required to establish  policy benefit and other reserves
which 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 or 4-1/2%.  Annuity  reserves are based on the 1937 Standard Annuity
Table, with interest on policies computed at 3-1/2 or 4%. Reserves on the

                                        9

<PAGE>



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 the California Method
which was approved by the Florida  Department of Insurance.  Reserves under this
method are the linear  average of the policy  account  value and the policy cash
surrender value (account value less the surrender charge).

         In 1994,  the Florida  Department of Insurance  issued a new regulation
that  required all  companies who are not already using the CRVM method to phase
into that method over a period of five years. As required, the Company has filed
with the Department  its plan to comply with the new regulation and  implemented
the plan beginning  January 1, 1995. This has resolved then pending  discussions
with the Florida Insurance  Department on the Company's  reserving methods.  The
CRVM  reserving  method  applies  only  to  the  Company's  statutory  financial
statements.  For the year 1995 the increase in the statutory  reserve due to the
implementation  of this  regulation  was  approximately  $404,000,  for 1996 the
increase was $158,000.

         Estimation  and provision for the cost of  HIV-related  claims  covered
under life and accident and health  insurance  policies of the Company have been
made. The Company  utilizes the services of KPMG Peat Marwick,  LLP,  consulting
actuaries, in calculating such reserves.

         In  preparing   generally  accepted   accounting   principle  Financial
Statements, the cost of insurance and expense 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)  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,  pre  authorized  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

                                       10

<PAGE>



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 the entire second floor of the building.  The remaining  rentable space
is fully leased as of December 31, 1996.


Item 3.  Pending Legal Proceedings.

         Lawsuits  against  the  Company  may have  arisen in the  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.   The  Company  maintains  insurance  coverage  for
unforeseen  events  and the  insurance  carriers,  to the  best  of  managements
knowledge, have no solvency issues.


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

         During the fourth  quarter of the Company's  fiscal year, no matter was
submitted to a vote of security holders.





                                       11

<PAGE>



                                                      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  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.

<TABLE>
<CAPTION>
                                         QUARTER ENDED
----------------------------------------------------------------------------
                           1996                            1995
----------------------------------------------------------------------------

          Mar.31  Jun.30  Sep.30  Dec.31    Mar.31  Jun.30  Sep.30  Dec.31
<S>      <C>     <C>     <C>     <C>       <C>     <C>     <C>     <C>
Common
Shares:
  High    5       5 5/8   7 1/2    7 7/8    5 7/8   5 3/8   5 3/8   5 3/8
  Low     4 7/8   4 7/8   5 3/8    7 1/8    4 5/8   4 7/8   5       4 7/8
</TABLE>

         (b)      Approximate Number of Holders of Common Stock.  There
were 1,499 holders of record of the Company's Common Stock at
December 31, 1996.

         (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)  (i.e.
unassigned  surplus) or (b)  certain net  operating  profits  and  realized  net
capital gains 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 which the Company could pay as a dividend  during 1997
pursuant to such regulation is $1,022,183.


                                       12

<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.








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                                       13

<PAGE>

<TABLE>
<CAPTION>


                                                          YEARS ENDED DECEMBER 31,

                                     1996                    1995                   1994                  1993               1992
                                  ----------               ---------            -----------           -----------         --------
<S>                             <C>                     <C>                    <C>                   <C>               <C>    
Revenues:
Life insurance                   $7,915,027              $8,158,938             $9,299,789            $10,738,921        $9,512,468
Net investment
    income                        3,318,627              $2,998,875              2,750,771              2,518,005         2,445,460
Realized Gain
  (Loss)on
Investments                         869,502                  60,237                 60,732                138,985           169,955
Gain on
 Reinsurance
 Transaction                           -                       -                      -                      -              639,455
                                   --------             -----------            -----------            -----------          --------

Total Revenue                   $12,103,156             $11,218,050            $12,111,292            $13,395,911       $12,767,338

Benefits, Losses
 & Expenses:
 Insurance
    living
    benefits                     $2,420,021              $2,636,851             $2,815,194             $2,848,888        $2,934,734
 Insurance death
    benefits                      1,398,541               1,424,245              1,300,063              1.871,590         1,562,431
    in policy
    reserves                         (5,201)               (12,971)               (67,036)               (152,011)        (246,642)
 Amortization of
    deferred policy
    acquisition
    costs                         3,364,738               3,069,742              3,242,706              5,216,871         4,411,788
 Commissions and
    General
    Expenses                      3,246,552               2,735,280              3,186,386              2,814,921         2,292,977
 Interest expense
    with related
    party                            90,000                  90,000                 90,000                 90,000            91,250
                                     ------                  ------                 ------                 ------            ------

Total Expenses:                 $10,514,651              $9,943,147            $10,567,313            $12,690,259       $11,046,538
                                -----------              ----------            -----------            -----------       -----------
Income before
  Income Taxes                   $1,588,505              $1,274,903             $1,543,979               $705,652        $1,720,800
                                 ----------              ----------             ----------               --------        ----------
  Income taxes                      196,000                $160,000               $530,000                 $1,000         $(49,400)
                                 ----------                --------               --------                 ------         ---------


NET INCOME                       $1,392,505              $1,114,903             $1,013,979               $704,652        $1,770,200
                                 ==========              ==========             ==========               ========        ==========

Weighted average
  number of
  shares
  outstanding                     1,907,989               1,907,989              1,907,989              1,844,694         1,844,694
                                  ---------               ---------              ---------              ---------         ---------

Net income per
  common
  share                                $.73                    $.58                   $.53                   $.38              $.96
                                        ---                    ----                   ----                   ----              ----

Shareholders'
  Equity                        $15,661,588             $14,826,610            $12,644,525            $12,238,101       $11,352,540
                                ===========             ===========            ===========            ===========       ===========

Shareholders'
  equity per
  common
  share                               $8.20                   $7.77                  $6.63                  $6.63             $6.15
                                      =====                  ======                  =====                  =====             =====
</TABLE>

                                       14

<PAGE>


<TABLE>
<CAPTION>

                                     1996                  1995                   1994                    1993            1992
                                  ----------          --------------         --------------          -------------    --------
<S>                             <C>                     <C>                    <C>                    <C>              <C>   
Assets                           $81,809,360             $81,872,350            $77,185,070            $81,211,540      $64,431,214
                                 -----------             -----------            -----------            -----------      -----------

Life Insurance:
  Insurance in
  force                        $1,703,650,00          $1,805,756,000         $2,000,656,000         $2,180,987,000   $2,063,910,000
                               -------------          --------------         --------------         --------------   --------------

Individual
  insurance
  issued during
  current
  year                          $121,646,000            $124,222,000           $184,364,000           $325,869,000     $556,570,000
                                ------------            ------------           ------------           ------------     ------------

Long term
  obligation                      $1,000,000              $1,000,000             $1,000,000             $1,000,000       $1,000,000

Dividends
  declared per
  common share                         $0.00                   $0.00                  $0.00                  $0.00            $0.00

</TABLE>

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                                       15

<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.

         In recent years the Company has primarily  issued one type of insurance
product,  universal  life.  Universal  life  provides  insurance  coverage  with
flexible premiums,  within limits,  which allow policyholders to accumulate cash
values.  These accumulated cash values are credited with tax-deferred  interest,
as  adjusted  by the  Company  on a  periodic  basis.  Deducted  from these cash
accumulations are  administrative  charges and mortality costs.  Should a policy
surrender in its early years, the Company assesses a surrender fee against these
same  cash  accumulations,  based on issue  age of the  insured,  smoker  verses
non-smoker status, sex of the insured and the duration of the policy at the time
of surrender.

         Pursuant to the accounting methods prescribed by Statement of Financial
Accounting  Standards No. 97 (SFAS 97), premiums received from  policyholders on
universal  life  products  are  credited to  policyholder  account  balances,  a
liability,  rather  than  income.  Revenues  on such  products  result from the
mortality and administrative  fees charged to policyholder  balances in addition
to surrender  charges assessed at the time of surrender as explained above. Such
costs of  insurance,  expense  charges,  and  surrender  fees are  recognized as
revenue as earned. In addition,  the Company has adopted policy designs with the
characteristic  of having higher  expense  charges  during the first policy year
than in renewal  years.  Under SFAS 97, the excess of these charges are reported
as unearned revenue. The unearned revenue is then amortized into income over the
life of the policy  using the same  assumptions  and  factors  used to  amortize
capitalized  acquisition  costs.  Interest credited to policyholder  balances is
shown as a part of benefit expenses.

         In accordance with generally accepted  accounting  principles,  certain
costs  directly  associated  with the  issuance of new policies are deferred and
amortized  over the lives of the  policies.  These costs are defined as deferred
policy acquisition costs and are shown in the asset section of the balance sheet
of the Company. Capitalized acquisition costs are amortized over the life of the
business at a constant rate,  based on the present value of the estimated  gross
profits expected to be realized over the life of the business.  SFAS 97 requires
that  estimates of expected  gross profits used as a basis for  amortization  be
evaluated on a regular basis, and the total  amortization to date be adjusted as
a charge or credit to earnings if actual  experience or other evidence  suggests
that earlier estimates be revised. Thus, variations in

                                       16

<PAGE>



the amortization of the deferred policy  acquisition  costs,  from one period to
the next,  are a normal  aspect of  universal  life  insurance  business and are
generally  attributed to the  recognition of current and emerging  experience in
accordance with the principles of SFAS 97.

         Annuity  products,  of which the Company  currently has a minor amount,
are  recorded in similar  fashion to  universal  life  products.  Considerations
received by the Company are credited to the annuity  account  balances which are
shown as a  liability  in the  balance  sheet.  Interest  is  credited  to these
accounts  as well and shown as an  expense  of the  Company.  Income is  derived
primarily from surrender charges on this type product.

         An additional  source of income to the Company is  investment  revenue.
The Company  invests those funds deposited by  policy-holders  of universal life
and annuity products in debt and equity securities 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 a 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.

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                                       17

<PAGE>



         The following table sets forth certain percentages reflecting financial
data  and  results  of  operations  (a) for  1996,  1995 and  1994  premium  and
investment revenues and (b) for period to period increases and (decreases).

<TABLE>
<CAPTION>
                                                  Relationships to
                                                   Total Revenues                             Period to Period
                                              Years Ended December 31                      (Increase or Decrease)

                                       1996          1995         1994                     96-95            95-94
                                      ------        ------       ------                   -------          ------
<S>                                  <C>           <C>          <C>                      <C>              <C>   
Insurance Revenues                       65%           73%          77%                      (3%)            (12%)
Net Investment Income                    35            27           23                       11%               9%
Other Income

  Total Revenues                        100%          100%         100%                       8%              (7%)

Losses, claims and
 loss adjustment
 expenses                                31%           36%          33%                       6%              (0%)
Acquisition costs                        28            27           27                       10%               5%

Other operating
  costs and
  expenses                               27            26           27                       18%             (14%)
                                        ----          ----         ----                      ----            -----

  Total Expenses                         86%           89%          87%                       6%              (4%)

Income before income
  taxes                                  14%           11%          13%                      24%             (17%)
Provision for
  taxes                                   2             1            5                       22%             (70%)
                                         ---           ---         ----                      ---             -----

Net Income                               12%           10%           8%                      25%              10%
</TABLE>



Results of Operations.

         New business written was 122, 124 and 189 million dollars in face value
for 1996,  1995 and 1994,  respectively.  While the face amount issued  declined
again in 1996, new business production actually increased. The company entered a
new market known as the final expense market. Generally, policies issued in this
market are of a lesser face value than those of the Universal Life market.  That
being the case, the face amount of insurance  appears to have declined,  however
the actual number of policies issued increased. In 1995 the Company issued 1,696
new policies.  In 1996,  2,702  policies were issued for an increase of 59%. The
Company is encouraged by these results and  anticipates a  continuation  of this
trend throughout 1997.

         Premium and policy charges for 1996 was recorded at $7.7 million,  1995
was recorded at $7.9 million and 1994 at $9.1 million.  While policy  production
was up for 1996, premium and policy cahrges went down.


                                       18

<PAGE>



         The 1996  premium  and policy  charges  for 1996 was  recorded at 7.7%.
Several factors have combined to create this decline. Continued lapsation in the
universal   life  book  of  business  has   resulted  in  reduced   revenues  in
administrative   and  mortality  fees.  New  production  has  not  increased  as
significantly as would be needed to be beneficial and the new product  currently
being  marketed has lower  premiums  than those of the  universal  life product.
Surrender fee income  declined 13.7% from that of 1995.  Surrender fee income is
dependent  upon the  duration  and value of the  policies  lapsing.  Should  the
policies be in their early years, the fee is high, however, limited to the value
in the policy which is smaller in the early years. The older policies have lower
surrender fees and greater account values from which to collect those fees.

         The 1995  decline of 13% in premium and policy  charges was  attributed
somewhat to the decline in the  Company's  insurance  in force and  therefore an
associated  reduction in administrative  and mortality fees.  Surrender fees for
1995 decreased by approximately 5% from 1994.

         The  balance of the decline in 1996,  1995 and 1994  premium and policy
charges is related to the  unlocking,  for  current  and future  experience,  of
unearned premium.  Unearned premium essentially represents the excess first year
charges  in the  policy.  With  the  advice  and  assistance  of our  consulting
actuaries,  each year the  Company  reviews  its  current  experience  rates for
mortality,  credited interest spreads, lapse rates, surrender fees and the like,
and adjusts its amortization of deferred  acquisition costs and unearned premium
to the appropriate levels for both the current experience and anticipated future
experience. This is an ongoing refinement process.

         Increased  investment in debt securities  coupled with reduced expenses
for student loan  processing are responsible for the 10% increase in 1996 and 9%
increase  in 1995  investment  income.  The  Company  continues  to  review  its
investment  strategies to increase its earned  interest  rate. As a part of this
process of review and  refinement,  the Company sold its entire stock  portfolio
just prior to year end 1996.  This  created a  significant  increase in realized
gains for 1996.  The  resulting  funds are to be invested  in a more  aggressive
stock  market  fund which  should  create an  increased  yield for the  Company.
Additional changes in the Company's holdings are being planned for 1997.

         Annuity,  death and other benefits  decreased slightly in both 1996 and
1995. This expense line is a combination of several  expenses with death claims,
annuity benefits and surrender benefits  comprising the most significant portion
of the total line. In 1996 each of these expenses declined slightly,  whereas in
1995 death claims actually rose slightly.  A significant increase or decrease in
death claims in any given year can have a marked impact on the

                                       19

<PAGE>



results of operations in a small company.

         The  amortization  of deferred  acquisition  costs  increased  in 1996,
following  a two year  decline in 1995 and 1994.  The  amortization  of deferred
acquisition  costs is a continuous  refinement  process which relates to current
experience in connection  with revenues,  mortality  gains and losses,  credited
interest rate spreads,  expense charges and surrender charges. The change in the
rate of amortization  of both deferred  acquisition  costs and unearned  premium
liabilities is due to "unlocking" for current and future experience based on the
results of the changing experience encountered as required under FAS 97.

         Operating expenses for the Company were $3.3 million,  $2.7 million and
$3.2  million  for  1996,  1995  and  1994,  respectively.   Several  items  are
responsible for the increased  operating costs of 1996. The lead program used to
introduce  and promote our new product was not without  cost.  The Company  also
attempted some new marketing  procedures in 1996 which added to these costs.  In
addition,  legal  expenses  were  higher in 1996 than in 1995.  The  Company has
reviewed its promotional expenses and now that the new product has established a
market,  has cut back on these expenses.  The increased legal costs were related
to the settlement of another lawsuit whereby the Company received  settlement of
approximately  $400,000,  which flowed  through  income and paid the  associated
attorneys  fees.  Operating  expenses  for 1994  also  reflect  increased  legal
expenses,  however these expenses were associated with  settlements  paid rather
than received.

         Reinsurance  premiums  ceded for 1996,  1995 and 1994 were  $1,767,418,
$2,112,884  and  $2,508,749  respectively.  Policy  benefits were reduced due to
reinsurance  recoveries  of $709,643,  $405,345 and $679,622 for 1996,  1995 and
1994,  respectively.  Reinsurance  commissions amounted to $308,179 for 1996 and
$397,253  and $679,522 for 1995 and 1994  respectively.  In addition,  under the
terms of the Company's  treaty with Mega Life (formerly  United Group  Insurance
Company)  expenses  of  $956,143  were  transferred  for 1996 and  $911,452  and
$1,163,843 for 1995 and 1994  respectively.  In 1995, the company  amortized the
remaining  $200,000 of deferred gain, under the aforementioned  treaty,  against
deferred acquisition costs for 1995.

        Income,  before income taxes, in 1996 was $1,588,505,  inclusive of gain
on equity securities of $873,299,  compared to $1,274,903 in 1995 and $1,543,979
in 1994.  The 1995  income  declined  17% from prior year as a result of reduced
premium income and level amortization expenses.

Liquidity and Capital Resources.

         Effective January 1, 1994, the Company adopted Statement of
Financial Accounting Standards No. 115 ("SFAS 115"), "Accounting

                                       20

<PAGE>



for Certain  Investments in Debt and Equity  Securities." SFAS 115 required that
investments  in all debt  securities  and those equity  securities  with readily
determinable   market  values  be  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 are classified as trading  securities.  Trading securities are
carried at market value,  with  unrealized  holding gains and losses included in
earnings.  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 market value,  with unrealized  holding gains
and losses reported as a separate component of stockholders'  equity, net of tax
and a valuation allowance against deferred  acquisition costs.  Adoption of this
statement had no effect on the income of the Company.

         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.

         Student loans are a service the Company  makes  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 1995 the Company  renewed its  $5,000,000  line of credit with
SLMA in order to meet these seasonal borrowing requirements. The Company made no
draws against this line of credit  throughout the seasonal  period for 1996. The
Company anticipates  continued borrowings to be made through this line of credit
with SLMA to the extent that student loan borrowings are required for 1997. SLMA
offers a more  competitive  rate of interest on such borrowings than the Company
has been able to obtain through banks.


                                       21

<PAGE>



         The  following  table  displays  pertinent  information  regarding  the
short-term borrowings of the Company as they relate to these credit lines:
<TABLE>
<CAPTION>

                                                                     1995 SLMA                           1994 SLMA
                                                                     =========                           =========
<S>                                                             <C>                                <C>   
Balance @ Year End                                               $1,400,553.30                         $891,823.47

Weighted Avg. Interest
@ Year End                                                              6.3705%                              6.566%

Maximum Balance                                                  $1,891,823.47                       $3,823,957.61

Average Balance                                                  $1,159,300.15                       $1,443,478.84

Weighted Rate                                                           6.3705%                             6.1024%
</TABLE>

         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 1996.  In 1995,  a similar  program  was in effect with  University  Support
Services.

         Except as otherwise provided herein, management believes that cash flow
levels in future  periods will be such that the Company will be able to continue
its prior growth  patterns in writing life  insurance  policies,  fund Federally
insured student loans and meet normal operating expenses.

         The  National  Association  of  Insurance  Commissioners,  in  order to
enhance the  regulation  of insurer  solvency,  issued a model law to  implement
risk-based  capital (RBC) requirements for life insurance  companies,  which are
designed to assess capital adequacy.  Pursuant to the model law, insurers having
less statutory  surplus than required by the RBC calculation  will be subject to
varying  degrees of regulatory  action.  While Florida,  the Company's  state of
domicile,  had yet to adopt the  provisions of the RBC model law, the Company is
monitoring their RBC results in anticipation of future adoption. At December 31,
1996,  the Company had statutory  surplus well in excess of any RBC action level
requirements.

         The Company has now fully leased all rentable  space on the first floor
of its office  building.  The Company has no  material  commitments  for capital
expenditures throughout the balance of the year 1997.


Item 8.  Financial Statements and Supplementary Data.



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                                       22

<PAGE>










                          Independent Auditors' Report



Board of Directors
Southern Security Life Insurance Company:

We have audited the accompanying  financial statements of Southern Security Life
Insurance  Company as listed in the  accompanying  index  under Item  14(a).  In
connection with our audit 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)2.  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  generally   accepted  auditing
standards.  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 as of  December  31,  1996 and 1995,  and the  results of its
operations  and its cash  flows for each of the years in the three  year  period
ended  December 31, 1996,  in  conformity  with  generally  accepted  accounting
principles. 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.




KPMG Peat Marwick, LLP

Orlando, Florida
April 18, 1997


                                       23

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                 Balance Sheets

                           December 31, 1996 and 1995
<TABLE>
<CAPTION>

    Assets                                                                        1996                   1995
    ------                                                                        ----                   ----
<S>                                                                            <C>                  <C>   
Investment (note 3):
    Fixed maturities held to maturity
      (fair value, $15,140,919 and
      $15,494,540   at December 31,
      1996 and 1995, respectively)                                              $14,974,962            15,165,395
    Securities available for sale,
      at fair value:
      Fixed maturities (cost of
        $24,298,618 at December 31,
        1996 and $21,077,410 at
        December 31, 1995)                                                       24,476,239            21,812,096
      Equity securities (cost, $0
        and $1,297,041 at
        December 31, 1996 and
          1995, respectively)                                                          -                1,715,386
    Policy and student loans                                                      7,315,809             9,971,653
    Short-term investments                                                        4,539,106             1,499,100
    Other invested assets                                                            13,100                22,578
                                                                                 ----------            ----------

                                                                                 51,319,216            50,186,208

Cash and cash equivalents                                                           206,056               406,752
Accrued investment income                                                           687,699               638,809
Deferred policy acquisition costs
    (note 4)                                                                     16,979,612            18,145,111
Policyholders' account balances on
    deposit with reinsurer (Note 7)                                               8,522,449             8,440,660
Reinsurance receivable (note 7)                                                     379,692               514,341
Receivables:
    Agent balances                                                                  588,290               345,014
    Other                                                                           340,680               318,274
    Refundable income taxes                                                            -                     -
Property and equipment, net,
    at cost (note 5)                                                              2,785,666             2,877,181



                                                                                $81,809,360            81,872,350
                                                                                ===========            ==========

</TABLE>












                 See accompanying notes to financial statements

                                       24

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                           Balance Sheets (continued)

                           December 31, 1996 and 1995

<TABLE>
<CAPTION>


    Liabilities and Shareholders' Equity                                            1996                     1995
    ------------------------------------                                            ----                     ----
<S>                                                                             <C>                   <C>         
Liabilities:
    Policy liabilities and accruals (notes 6 and 7):
      Future policy benefits                                                      $ 985,720             1,050,498
      Policyholders' account balances                                            52,347,996            50,624,276
      Unearned premiums                                                           8,249,190             9,116,890
      Other policy claims and benefits
        payable   293,221                                                           191,955
    Other policyholders' funds, dividend
      and Endowment accumulations                                                    59,596                57,444
    Funds held in reinsurance treaties
      with Reinsurers (note 7)                                                    1,193,366               977,416
    Note payable (note 8)                                                              -                1,400,553
    Note payable to related party
      (note 9)                                                                    1,000,000             1,000,000
    Due to affiliated insurance
      agency (note 11)                                                               33,411               243,368
  General expenses accrued                                                          894,131             1,025,372
  Unearned investment income                                                        228,032               188,360
    Other liabilities                                                               204,845               248,258
    Income taxes payable                                                             70,164                16,350
    Deferred income taxes (note 10)                                                 588,100               905,000
                                                                                    -------               -------

                                                                                 66,147,772            67,045,740
                                                                                 ----------            ----------


Shareholders' equity (notes 2,3 and 12):
    Common stock, $1 par, authorized
      2,000,000 shares; issued and out-
      standing, 1,907,989 shares                                                  1,907,989             1,907,989
    Capital in excess of par                                                      4,011,519             4,011,519
    Unrealized appreciation (depreciation)
      on securities available for sale, net
      of adjustment to deferred policy acquisition
      costs of $187,196 ($(273,077)
      in 1995) and net of deferred Federal
      income tax benefit of ($675)
      ($331,000 expense in 1995)                                                    (8,880)               548,647
    Retained earnings                                                             9,750,960             8,358,455
                                                                                  ---------             ---------

                                                                                 15,661,588            14,826,610
Commitments and contingencies
    (notes 7 and 14)




                                                                                $81,809,360            81,872,350
                                                                                ===========            ==========
</TABLE>



                                       25

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                              Statements of Income

                  Years ended December 31, 1996, 1995, and 1994


<TABLE>
<CAPTION>

                                                                1996                1995                  1994
                                                                ----                ----                  ----
<S>                                                       <C>                  <C>                  <C>    
Revenues:
    Premium and policy
    charges                                                 $7,702,639           7,919,362             9,122,389
    Less reinsurance ceded                                  (1,030,673)         (1,201,432)           (1,344,907)
    Surrender fee income                                     1,243,061           1,441,008             1,522,307
                                                             ---------           ---------             ---------

        Net insurance revenue                                7,915,027           8,158,938             9,299,789
    Net investment income
      (notes 3 & 8)                                          3,318,627           2,998,875             2,750,771
    Realized gain on
      investments (note 3)                                     869,502              60,237                60,732
                                                               -------              ------                ------

                                                            12,103,156          11,218,050            12,111,292
                                                            ----------          ----------            ----------


Benefits, losses and expenses:
    Annuity, death, surrender
      and other benefits                                     3,818,562           4,061,096             4,115,257
    Decrease in future policy
      benefits                                                  (5,201)            (12,971)              (67,036)
    Amortization of deferred
      policy acquisition
      costs (note 4)                                         3,364,738           3,069,742             3,242,706
    Operating expenses
      (note 11)                                              3,246,552           2,735,280             3,186,386
    Interest expense with
      related party (Note 9)                                    90,000              90,000                90,000
                                                                ------              ------                ------

                                                            10,514,651           9,943,147            10,567,313
                                                            ----------           ---------            ----------

        Income before income taxes                           1,588,505           1,274,903             1,543,979

Income tax expense (benefit) (note 10)                         196,000             160,000               530,000
                                                              --------             -------               -------

        Net income                                          $1,392,505           1,114,903             1,013,979
                                                            ==========           =========             =========

Earnings per share, based on
    1,907,989 weighted average
    shares outstanding in 1996,
    1995 and 1994                                                 $.73                 .58                   .53
                                                                  ====                 ===                   ===
</TABLE>









                       See accompanying notes to financial statements.

                                       26

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                       Statements of Shareholders' Equity

                  Years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>


                                                                                   Unrealized
                                                                                  Appreciation
                                                                                 (depreciation)         Agents
                                                                Capital             of equity          Incentive
                                 Common stock                  in excess            security            Stock            Retained
                           Shares             Amount             of par             investments          Bonus            earnings
<S>                     <C>                 <C>               <C>                    <C>             <C>                <C>
Balances,
 December 31,
 1993                    1,844,694           1,844,694         3,918,292               120,542          125,000          6,229,573

Capital Stock
 issued                     63,295              63,295            93,227                  -            (125,000)
Net income for
 the year                     -                   -                 -                     -                -             1,013,979
Unrealized
 depreciation
 of securities
 available
 for sale
 investments                  -                   -                 -                 (639,077)            -                  -
                           -------             -------           -------              --------          --------          -----

Balances,
 December
 31, 1994                1,907,989           1,907,989        $4,011,519              (518,535)            -             7,243,552
                         ---------           ---------        ----------              ---------         --------         ---------

Net income for
 the year                     -                   -                 -                     -                -             1,114,903
Unrealized
 appreciation
 of securities
 available
 for sale                     -                   -                 -                1,067,182             -                  -
                           -------             -------           -------             ---------          --------          -----

Balances,
 December
 31, 1995                1,907,989          $1,907,989         4,011,519               548,647             -             8,358,455
                         ---------           ---------         ---------               -------          --------         ---------

Capital Stock
 issued
Net income for
 the year to
 date                         -                   -                 -                     -                -             1,392,505
Unrealized
 depreciation
 of securities
 available
 for sale
 investments                  -                   -                 -                 (557,527)            -                  -
                           -------             -------           -------              ---------         --------           ----

Balances,
 December 31,
 1996                    1,907,989          $1,907,989         4,011,519                (8,880)            -             9,750,960
                         =========          ==========         =========                ======          ========         =========
</TABLE>
                 See accompanying notes to financial statements.

                                       27

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                            Statements of Cash Flows

                  Years ended December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>

                                                                            1996                        1995                  1994
                                                                            ----                        ----                  ----

<S>                                                                    <C>                      <C>                   <C>    
Cash flows provided by (used in)
    operating activities:
  Net income (including net realized
    gains and losses on investments)                                    $1,392,505                $1,114,903           $1,013,979
  Adjustments to reconcile net cash
    provided by (used in) operating
    activities:
      Depreciation                                                         173,601                   182,971              190,288
    Net realized (gains) or
      losses on investments                                               (873,298)                  (60,237)             (60,732)
    Loss on disposal of property,
      plant & equipment                                                                                  918                5,326
    Deferred income taxes                                                   16,900                  (221,000)             430,000
    Amortization of deferred
      policy acquisition costs                                           3,364,738                 3,069,742            3,242,706
    Acquisition costs deferred                                          (2,018,043)               (2,779,393)          (3,967,255)
    Change in assets and liabilities
      affecting cash provided by
      operations:
        Accrued investment income                                          (48,890)                  (33,958)             842,643
        Due from affiliated insurance
          agency                                                              -                       10,419                  (50)
        Accounts receivable                                               (265,682)                  305,725              324,561
        Reinsurance Receivable                                             134,649                  (191,157)             (11,835)
        Other policy claims and
          future benefits payable                                           36,488                   (96,568)            (403,263)
        Policyholders' Account balances                                  2,332,863                 2,388,047            2,325,599
        Funds held under reinsurance                                       215,950                   276,715              202,827
        Unearned premiums                                                 (962,941)                 (427,955)            (525,609)
        Dividend and endowment
          accumulations                                                      2,152                     2,069                  838
        Payable to affiliated insurance
          agent                                                           (209,957)                   18,155             (123,959)
        Income taxes payable                                                53,814                    16,350                 -
        Other liabilities                                                 (134,983)                 (361,184)            (800,006)
                                                                          --------                  --------             --------

    Net cash provided by operating
        activities                                                       3,209,866                 3,214,562            2,686,058
                                                                         ---------                 ---------            ---------

</TABLE>





                                   (continued)






                                       28

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                      Statements of Cash Flows (continued)

                  Years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>


                                                                            1996                        1995                  1994
                                                                            ----                        ----                  ----
<S>                                                                    <C>                       <C>                  <C>  

Cash flows from (used in) investing activities:
  Purchase of investments:
  Purchase of investments held to maturity                              (1,965,240)               (3,492,860)          (6,471,251)
  Purchase of investments available for sale                            (8,085,785)               (3,754,242)          (8,599,060)
  Proceeds from maturity of held to
    maturity securities                                                  2,165,750                 1,135,203            1,955,675

  Proceeds from maturity of available
    for sale securities                                                    635,533                   141,150            2,508,813
  Proceeds from sale of available for
    sale securities (equity and fixed
    maturity)                                                            6,367,780                 2,664,089              650,294
  Net change in short term investments                                  (3,040,006)                  376,658           (1,247,532)
  Net change in policy and student loans                                 2,655,845                (1,104,685)          15,693,088
  Net change in other investments                                            7,605                     8,476                  -
  Acquisition of property and equipment                                    (60,559)                 (204,142)             (41,787)
                                                                           -------                  --------              -------


    Net cash provided by (used in)
      investing activities                                              (1,319,077)               (4,230,353)           4,448,240
                                                                        ----------                -----------           ---------

Cash flows from financing activities:
   Receipts from universal life and
     certain annuity policies credited
     to policyholder account balances                                    5,213,760                  5,609,910           6,103,433
   Return of policyholder account
     balances on universal life and
     certain annuity policies                                           (5,904,692)               (5,334,176)          (4,142,868)
   Proceeds from short-term borrowings                                   2,500,000                 3,250,000            8,462,932
   Repayment of short-term
     borrowings                                                         (3,900,553)               (2,741,270)         (17,009,177)
                                                                        -----------               ----------          -----------

Net cash provided by (used in)
   financing activities                                                 (2,091,485)                  784,464           (6,585,680)
                                                                        -----------                  -------           ----------

Increase (decrease) in cash and cash
   equivalents                                                            (200,696)                 (231,327)             548,618

Cash and cash equivalents at
   beginning of year                                                       406,752                   638,079               89,461
                                                                           -------                   -------               ------

Cash and cash equivalents at
   end of year                                                            $206,056                  $406,752             $638,079
                                                                          ========                  ========             ========

</TABLE>







                                       29

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                      Statements of Cash Flows (continued)

                  Years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>


                                                                            1996                        1995                  1994
                                                                            ----                        ----                  ----
<S>                                                                     <C>                      <C>                  <C>  

Supplemental schedule of cash flow
 Information:
   Interest paid during the year, net                                       12,094                    24,935              164,790
                                                                            ======                    ======              =======

   Income taxes paid during the year                                       130,500                   249,000              145,000
                                                                           =======                   =======              =======

Change in market value adjustments-
 investments available for sale:
  Fixed maturities                                                        (557,065)                2,109,314           (1,374,628)
  Equity securities                                                       (418,345)                  406,612               11,733

Change in deferred acquisition costs                                       181,196                (1,669,168)            1,100,581
Change in premium deposit funds                                            (95,241)                  871,220             (575,711)
Deferred income tax asset (liability)                                      333,800                  (651,000)             320,000
Other                                                                       (1,872)                      204                 (510)
                                                                            ------                       ---                 ----

Net change in unrealized appreciation
 (depreciation)                                                           (557,527)                1,067,182             (518,535)
                                                                          ========                 =========             ========
</TABLE>







                       See accompanying notes to financial statements.


                                       30

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                          Notes to Financial Statements
                        December 31, 1996, 1995 and 1994


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

       (a)     Nature of Business

               The primary business purpose of Southern  Security Life Insurance
               Company  (the   "Company")  is  the  issuance  of  long  duration
               universal life insurance contracts.  Prior to 1986, the Company's
               business included  traditional whole life and annuity  contracts.
               The majority of the Company's business is conducted in the states
               of Florida  (43%),  Georgia  (13%) and Texas  (14%).  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.

               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  consolidated
               financial  statements.  The Company  seeks to mitigate  this risk
               through geographic marketing of their 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 minimizes
               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 or may cause  disintermediation.
               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

                                       31

<PAGE>



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


1.     Nature of business and summary of significant accounting
       policies, continued

       (a)     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
               generally accepted  accounting  principles  ("GAAP"),  which vary
               from  reporting  practices  prescribed or permitted by regulatory
               authorities.

       (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 are classified as trading  securities.  Trading securities
               are  carried at fair value,  with  unrealized  holding  gains and
               losses included in earnings. 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,

                                       32

<PAGE>



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


1.     Nature of business and summary of significant accounting
       policies, continued

           (d) with  unrealized   holding   gains  and  losses  reported   as  a
               separate  component  of  stockholders'  equity,  net of tax and a
               valuation  allowance  against  deferred   acquisition  costs.  At
               December  31,  1996  and  1995,  the  Company  did not  have  any
               investments categorized as trading securities.

               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
               credited  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.

               Policy  loans  and  student  loans  are  carried  at  the  unpaid
               principal balance,  less any amounts deemed to be uncol-lectible.
               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 one month or less to be cash equivalents.

       (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

                                       33

<PAGE>



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


1.     Nature of business and summary of significant accounting
       policies, continued

           (f) to  the  production   of  new  business,    have  been  deferred.
               Deferred policy  acquisition  costs  applicable to non- universal
               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  receipt  of
               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 at a constant rate based on the
               present value of the estimated  gross profit amounts  expected to
               be  realized  over  the  life of the  policies.  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   several  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)                Depreciation

               Depreciation is being provided on the  straight-line  method over
               the estimated useful lives of the assets.

       (h)                Future Policy Benefits

               The liability  for future policy  benefits 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.






                                       34

<PAGE>



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


1.     Nature of business and summary of significant accounting
       policies, continued

       (i)     Recognition of Premium Revenue and Related Costs

               Premiums are recognized as revenue as follows:

               Universal life policies - premiums  received from  policy-holders
               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.

       (j)                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.

       (k)                Earnings Per Share

               Earnings  per  share  are  computed  based  on  weighted  average
               outstanding shares for each year.

       (l)                Reclassification

               Certain  amounts   presented  in  the  1995  and  1994  financial
               statements   have  been   restated   to   conform   to  the  1996
               presentation.

                                       35

<PAGE>



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


2.     Basis of Financial Statements

       The more significant  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 (which are primarily designed to demonstrate solvency) 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
               conservative   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  Statement  No. 97,
               rather than on the statutory rates for mortality and interest.

       d.      Investments  in securities  are reported  as  described  in  Note
               1,(c),  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  including
               common stocks, other than stocks of affiliates, at market value.

       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.      Expenses  attributable  to  the  public  offering  of  the common
               shares have been  reclassified  from retained earnings to capital
               in excess of par.

                                       36

<PAGE>



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


2.     Basis of financial statements, continued


       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 shareholder's  equity for statutory  purposes are treated as a
               liability under 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.

       A  reconciliation  of net income (loss) for the years ended  December 31,
       1996, 1995 and 1994 and shareholders'  equity as of December 31, 1996 and
       1995  between the amounts  reported on a statutory  basis and the related
       amounts  presented  on  the  basis  of  generally   accepted   accounting
       principles is as follows:











            (The remainder of this page is intentionally left blank)



                                       37

<PAGE>



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


2.     Basis of financial statements, continued

<TABLE>
<CAPTION>

                                                                                                   Shareholders'
                                                     Net income                                        equity
                                               Years ended December 31,                            December 31,
                                        1996             1995             1994                1996              1995
                                        ----             ----             ----                ----              ----
<S>                             <C>               <C>                 <C>              <C>              <C>    

As reported
 on a statutory
 basis                            1,022,183         $232,180             55,816           9,283,928         8,770,411
                                  ----------        --------             ------           ---------         ---------

Adjustments:
  Deferred policy
  acquisition
  costs, net                     (1,346,695)        (290,344)           724,549          16,979,611        18,145,111

Future policy
  benefits, un-
  earned premiums
  and policy-
  holders' funds                  1,626,090        1,006,862            586,243         (10,643,224)      (12,340,766)

 Deferred
  income taxes                      (16,900)         221,000           (430,000)          (588,100)          (905,000)

 Asset valuation
  reserve                              -                -                  -               307,364            807,899

 Interest main-
  tenance reserve                   (18,221)          24,909             (4,092)           209,736            227,957
 Non-admitted
  assets                               -                -                  -               795,659            265,507
 Unrealized gains
  -SFAS 115                            -                -                  -               177,621            734,686
Capital and
  surplus note                         -                -                  -            (1,000,000)        (1,000,000)
 Other adjustments,
  net                               126,048          (79,704)            81,463             138,993           120,805
                                    -------          -------             ------             -------           -------
 Net increase
  (decrease)                        370,322          882,723            958,163           6,377,660         6,056,199
                                  ---------          -------            -------           ---------         ---------

As reported on a
 GAAP basis                      $1,392,505        1,114,903          1,013,979          15,661,588        14,826,610
                                  =========        =========          =========          ==========        ==========

</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 $1,800,000.

          The payment of dividends  by the Company is subject to the  regulation
          of the State of Florida  Department  of  Insurance.  A dividend may be
          declared and paid without prior Florida


                                       38

<PAGE>



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


2.     Basis of financial statements, continued

       Insurance  Commissioner's  approval  if the  dividend is equal to or less
       than  the   greater  of:  (a)  10%  of  the   Company's   surplus  as  to
       policyholder's  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 payable by
       the  Company  during  1997  without  prior   approval  is   approximately
       $1,022,183.

       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, 1996.


3.     Investments

       (a)  Equity Securities and Fixed Maturities

       Equity  securities  consist  of $0 and  $1,715,385  of  common  stock  at
       December 31, 1996 and 1995 respectively.

       Unrealized   (depreciation)   appreciation   in   investments  in  equity
       securities for the years ended  December 31, 1996,  1995, and 1994 is $0,
       $406,611 and ($108,809), respectively.

       The amortized  cost and estimated  market values of  investments  in debt
       securities are as follows:












                                       39

<PAGE>



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


3.     Investments, continued

       (a)  Continued

<TABLE>
<CAPTION>
                                                                        Gross             Gross          Estimated
                                                     Amortized       Unrealized        Unrealized           Fair
                                                        Cost            Gains            Losses            Value

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

December 31, 1996:
   Held to maturity:
    U.S. Treasury securities
     and obligations of U.S.
     government corporations
     and agencies (guaranteed)                     $ 4,503,477          61,523              -            4,565,000

    Corporate securities                             9,461,064         120,955              -            9,582,019

    Special revenue and
     special  assessment  
     obligations  and all  
     nonguaranteed obligations
     of agencies and authorities
     of governments and their
     political subdivisions                          1,010,421            -               16,521           993,900
                                                     ---------          ------            ------           -------

                                                    14,974,962         182,478            16,521        15,140,919
                                                    ----------         -------            ------        ----------
   Available for sale:
   U.S. Treasury securities
     and obligations of U.S.
     government corporations
     and agencies (guaranteed)                      20,383,080         180,672              -           20,563,752

   Corporate securities                              3,585,084            -                2,084         3,583,000

   Special  revenue and 
     special  assessment 
     obligations  and all
     nonguaranteed obligations 
     of agencies and authorities 
     of governments and their
     political subdivisions                            330,454            -                  967           329,487
                                                       -------         -------               ---           -------

                                                    24,298,618         180,672             3,051        24,476,239
                                                    ----------         -------             -----        ----------

                                                   $39,273,580         363,150            19,572        39,617,158
                                                   ===========         =======            ======        ==========

</TABLE>










                                       40

<PAGE>



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


3.     Investments, continued

       (a)  Continued

<TABLE>
<CAPTION>

                                                                        Gross             Gross          Estimated
                                                     Amortized       Unrealized        Unrealized           Fair
                                                       Cost             Gains            Losses            Value


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

December 31, 1995:
   Held to maturity:
    U.S. Treasury
     securities and
     obligations of U.S.
     government corpora-
     tions and agencies
     (guaranteed)                                    6,410,291          157,709            -             6,568,000

   Corporate securities                              7,743,286          171,436            -             7,914,722

   Special revenue and
     special assessment
     obligations and all
     nonguaranteed obligations
     of agencies and
     authorities of
     governments and
     their political
     subdivisions                                    1,011,818             -               -             1,011,818
                                                     ---------          -------          ------          ---------

                                                    15,165,395          329,145               0         15,494,540
                                                    ----------          -------               -         ----------

   Available for sale:
    U.S. Treasury
     securities and
     obligations of U.S.
     government corporations
     and agencies (guaranteed)                      16,533,564          721,436            -            17,255,000

   Corporate securities                              3,931,378           16,622            -             3,948,000

   Special revenue and
     special assessment
     obligations and all
     nonguaranteed
     obligations of agencies
     and authorities of
     governments and their
     political subdivisions                            612,468             -              3,372            609,096
                                                       -------          -------           -----            -------

                                                    21,077,410          738,058           3,372         21,812,096
                                                    ----------          -------           -----         ----------

                                                   $36,242,805        1,067,203           3,372         37,306,636
                                                   ===========        =========           =====         ==========

</TABLE>



                                       41

<PAGE>



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


3.     Investments, continued

       (a) Continued

               Unrealized  (depreciation)  appreciation of fixed  maturities for
               years  ending  December 31,  1996,  1995 and 1994 is  ($720,253),
               $2,779,872 and $(2,534,413) respectively.

               The amortized cost and estimated  fair value of fixed  maturities
               at December 31, 1996, 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:
<TABLE>
<CAPTION>

                                                                               Amortized              Estimated
                                                                                  Cost                Fair value
             
<S>                                                                          <C>                     <C>    
             Due in one year or less                                             $998,865                998,865
             Due after one year through
                five years                                                     11,706,730             11,862,590
             Due after five years through
                ten years                                                         983,382              1,010,000
             Due after ten years                                                  275,564                275,564
                                                                                  -------                -------

                                                                               13,964,541             14,147,019
             Mortgage backed securities                                         1,010,421                993,900
                                                                                ---------                -------

                                                                              $14,974,962             15,140,919
                                                                              ===========             ==========


           Fixed maturity securities available-for-sale:

            Due in one year or less                                             3,005,565              3,000,000
            Due after one year through
               5 years                                                         12,011,351             12,057,800
            Due after five years through
               ten years                                                        6,163,237              6,138,952
            Due after ten years                                                 2,788,011              2,950,000
                                                                                ---------              ---------

                                                                               23,968,164             24,146,752
            Mortgage backed securities                                            330,454                329,487
                                                                                  -------                -------

                                                                              $24,298,618             24,476,239
                                                                              ===========             ==========

</TABLE>



                                       42

<PAGE>



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


3.     Investments, continued

       (a) Continued

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

                                                               1996                 1995                 1994
                                                            ----------           ----------           -------
<S>                                                       <C>                  <C>                   <C>

         Proceeds from sale of
          equity securities                                $2,885,010             $854,339              650,294
                                                            =========              =======              =======


         Proceeds from sale of
          fixed maturities
           available for sale                               3,482,770           $1,809,750                 -
                                                            =========            =========              ====


         Fixed maturities:
          Gross realized gains                                 15,013              145,136               67,146
          Gross realized (losses)                             (18,881)            (119,908)             (16,474)
         Equity securities:
          Gross realized gains                                930,919               55,543                 -
          Gross realized (losses)                             (57,620)             (20,540)                -
                                                              --------             -------               ------


                                                             $869,431              $60,231               50,672
                                                              =======               ======               ======
</TABLE>



         Certain of the fixed  maturity  securities  classified as available for
         sale and held to maturity  were called  during the year ended  December
         31, 1996,  1995 and 1994 resulting in the following  realized gains and
         losses:

<TABLE>
<CAPTION>
                                                                  1996                 1995                  1994
                                                                  ----                 ----                  ----
<S>                                                             <C>                  <C>                <C>
         Held to maturity:
           Gross realized gains                                    $71                    6                     -
         Available for sale:
           Gross realized gains                                      -                    -                10,060
                                                                   ---                    -                ------
                                                                   $71                    6                10,060
                                                                   ===                    =                ======


</TABLE>





                                       43

<PAGE>



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


3.     Investments, continued

       (b)     Concentrations of credit risk

               At  December  31,  1996 and 1995,  the  Company  did not hold any
               unrated or less-than-investment  grade corporate debt securities.
               The Company also invests in subsidized and  unsubsidized  student
               loans  totaling  $514,483 and $4,403,061 at December 31, 1996 and
               1995, respectively,  which are guaranteed by the U.S. government.
               Subsequent to December 31, 1996,  all of these loans were sold at
               their unpaid principal balance.

       (c)     Investment Income

               Net  investment  income for the years ended  December  31,  1996,
               1995, and 1994 consists of the following:

<TABLE>
<CAPTION>
                                                                           1996              1995             1994
                                                                           ----              ----             ----
<S>                                                                <C>                 <C>               <C>

          Interest:
             Fixed maturities                                        $2,581,198         2,319,914        2,080,464
             Policy and student loans                                   526,820           483,382          768,631
             Short-term investments                                     280,158           333,850          176,941

          Dividends on equity securities
             Common stock, including mutual
               fund                                                      31,245            28,247           24,418
                                                                         ------            ------           ------

                                                                      3,419,421         3,165,393        3,050,454
          Less investment expenses                                      100,794           166,518          299,683
                                                                        -------           -------          -------

                                                                     $3,318,627         2,998,875        2,750,771
                                                                      =========         =========        =========
</TABLE>

          (d)    Investments on Deposit

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

<TABLE>
<CAPTION>
                                                 1996                      1995                    1994
                                                 ----                      ----                    ----

<S>                                          <C>                        <C>                     <C>      
             Florida                         $1,718,751                 1,735,900               1,744,017
             Alabama                            100,000                   100,000                 100,000
             South Carolina                     306,028                   304,696                 305,356
             Georgia                            255,024                   251,193                 250,000
             Indiana                            199,752                      -                       -
                                                -------                  --------               ---------

                                             $2,579,555                 2,391,789               2,399,373
                                              =========                 =========                =========

</TABLE>

                                       44

<PAGE>



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


3.     Investments, continued

       (d)     Continued

               Certain of these assets, totaling approximately $650,000 for each
               of the years ended December 31, 1996 and 1995, are restricted for
               the future benefit of policyholders in a particular state.


4.     Deferred policy acquisition costs

       Deferred  policy  acquisition  costs at December 31, 1996,  1995 and 1994
       consist of the following:
<TABLE>
<CAPTION>
                                                                1996                 1995              1994
                                                                  ----                 ----              ----
<S>                                                       <C>                     <C>                 <C>

         Deferred policy acquisition
         costs at beginning of year                            18,145,111          $20,104,624        18,279,497

         Policy acquisition costs
          deferred:
           Commissions                                          1,030,875            1,418,644         2,200,505
           Underwriting and issue
            costs                                                 652,868              805,794         1,060,192
           Other                                                  334,300              554,955           706,558
           Change in unrealized
            appreciation, (depreciation)                          181,196           (1,669,164)        1,100,578
                                                                  -------           ----------         ---------
                                                                2,199,239            1,110,229         5,067,833

         Amortization of deferred
           policy acquisition costs                            (3,364,738)          (3,069,742)       (3,242,706)
                                                               ----------           ----------        ----------

         Deferred policy acquisition
           costs at end of year                                16,979,612          $18,145,111        20,104,624
                                                               ==========          ===========        ==========

</TABLE>


5.     Property and equipment

       Property and equipment consists of the following:
<TABLE>
<CAPTION>

                                                                    December                     December
                                                                      1996                          1995
<S>                                                                  <C>                            <C>    
             Land                                                    $982,027                      $982,027
             Building and improvements                              2,173,955                     2,152,203
             Furniture and equipment                                1,019,621                     1,013,268
                                                                    ---------                     ---------

                                                                    4,175,603                     4,147,498
             Less accumulated depreciation                          1,389,937                     1,270,317
                                                                    ---------                     ---------


                                                                   $2,785,666                    $2,877,181
                                                                    =========                     =========
</TABLE>

                                       45

<PAGE>



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


5.     Property and equipment, continued

       Depreciation expense for the years ended December 31, 1996, 1995 and 1994
       totaled $151,950, $150,213, and $148,355, respectively.


6.     Future policy benefits

       At December  31, 1996 and 1995,  future  policy  benefits,  exclusive  of
       universal life and flexible term annuities consist of the following:

<TABLE>
<CAPTION>
                                                                        December                  December
                                                                          1996                      1995

<S>                                                                      <C>                      <C>    
           Life insurance                                                $672,913                   746,477
            Annuities                                                     304,394                   296,242
            Accident & health
             insurance                                                      8,413                     7,779
                                                                            -----                     -----

           Total life
            insurance policies                                           $985,720                $1,050,498
                                                                          =======                 =========

</TABLE>

         Life insurance in-force aggregated  approximately $1.2 billion and $1.3
         billion at December 31, 1996, and 1995, 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  table  used  in  calculating  benefit  reserves  is the
         1965-1970 Basic Select and Ultimate for males.

         For  non-universal  life  policies  written  during 1983 through  1988,
         interest  rates used are 8.0 percent for policy years one through five,
         decreasing by .1 percent per year for policy years six through  twenty,
         to  6.5  percent  for  policy  years  twenty-one  and  thereafter.  For
         non-universal  life policies written in 1982 and prior,  interest rates
         vary,  depending on policy type, from 7 percent for all policy years to
         6 percent for policy years one through five and 5 percent for years six
         and  thereafter.  For universal  life policies  written since 1988, the
         interest  rate  used  is a  credited  rate  based  upon  the  Company's
         investment yield plus 1 percent.


                                       46

<PAGE>



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


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, 1996,  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  only in the event that the  reinsuring
       company  might be unable to meet its  obligations  under the  reinsurance
       agreement  in force,  as the Company  remains  primarily  liable for such
       obligations.  Under these  contracts,  the  Company has ceded  premium of
       $448,327,  $525,662  and  $585,957  included in  reinsurance  ceded,  and
       received  recoveries  of  $608,355,  $204,171  and  $514,868  included in
       annuity,  death and other benefits for the years ended December 31, 1996,
       1995 and 1994, respectively.

       On December 31, 1992,  the Company  entered into a reinsurance  agreement
       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.

       As of December 31, 1992, the Company ceded premiums of $5,240,058,  equal
       to the 18% of net statutory  reserves  ceded on the effective date of the
       contract.  In return,  the  Company  received a  commission  and  expense
       allowance of $2,497,370. The economic gain on the reinsurance transaction
       amounted  to  approximately  $1,600,000,   however,  management  deferred
       approximately  $1,000,000 of the gain against deferred  acquisition costs
       as  a  provision  for  the  recoverability  of  such  costs.  Based  upon
       management's and actuarial  evaluation of such costs,  approximately  $0,
       $200,000  and  $500,000  of the amount  deferred  was  amortized  against
       deferred acquisition costs during 1996, 1995 and 1994, respectively.

        For the years ended December 31, 1996,  1995 and 1994, the Company ceded
        premiums of $582,346,  $675,770 and  $758,956,  included in  reinsurance
        ceded,  and  received  recoveries  of $367,295,  $459,090 and  $386,509,
        included in annuity, death

                                       47

<PAGE>



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


7.     Reinsurance, continued

       death and other  benefits,  respectively.  The funds held in  reinsurance
       treaties  with  reinsurer of  $1,193,366  and $977,416  represent the 18%
       share of policy  loans ceded to the  reinsurer  at December  31, 1996 and
       1995, respectively.


8.     Notes Payable

       The note  payable of $0, and  $1,400,553  at  December  31, 1996 and 1995
       respectively,  secured  by  student  loans  equaling  115% of the  unpaid
       principal balance,  relates to advances under a $5,000,000 line of credit
       ($5,000,000  available to be drawn at December 31, 1996).  The note bears
       interest at a variable rate and matures on September 18, 1997.

       Interest  expense  relating to these notes payable during the three years
       ended  December 31, 1996,  1995 and 1994 totaled  $12,094,  $26,240,  and
       $60,864, respectively and is included in net investment income.


9.     Note Payable to Related Party

       Note  payable  to related  party  consists  of  amounts  due on demand to
       Consolidare  Enterprises,  Inc., the Company's majority shareholder.  The
       note proceeds were obtained in December,  1988 and the note  qualifies as
       shareholders' equity for statutory accounting purposes in accordance with
       Section 628.401 of the Florida  Statutes.  At December 31, 1996, the note
       bears interest at 9.0% percent (payable monthly);  principal repayment is
       contingent upon the Company  maintain-ing  statutory surplus in excess of
       $1,750,000  and  approval  in  advance  by  the  Florida   Department  of
       Insurance.  Interest  expense  relating to the balance of note payable to
       related party during 1996, 1995 and 1994 aggregated $90,000, $90,000, and
       $90,000 respectively.











                                       48

<PAGE>



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


10.     Income taxes

        Total income taxes for the years ended December 31, 1996, 1995, and 1994
        were allocated as follows:

<TABLE>
<CAPTION>

                                                               1996                   1995                1994
                                                               ----                   ----                ----

<S>                                                          <C>                     <C>                 <C>    
         Net income                                          196,000                 160,000             530,000
         Unrealized appreciation
           (depreciation) of
           investments                                          (675)                331,000            (319,500)
                                                                ----                 -------            --------
                                                             195,325                 491,000             210,500
                                                             =======                 =======             =======

</TABLE>

         Income taxes for the years ended  December  31, 1996,  1995 and 1994 is
         summarized as follows:


<TABLE>
<CAPTION>
                                              1996                    1995                    1994
                                              ----                   ------                  ------

<S>                                     <C>                     <C>                     <C>
         Current:
          Federal                            167,700                 $370,800               100,000
          State                               11,400                   10,200                  -
                                            --------                 --------               -------

                                             179,100                  381,000               100,000
                                            --------                 --------               -------
         Deferred:
          Federal                             14,450                 (188,700)              387,000
          State                                2,450                  (32,300)               43,000
                                            --------                 ---------              -------

                                              16,900                 (221,000)              430,000
                                            --------                 ---------              -------

                                            $196,000                 $160,000               530,000
                                            ========                  =======               =======

</TABLE>


                                       49

<PAGE>



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


10.      Income taxes, continued

         Income tax expense for the years ended December 31, 1996, 1995 and 1994
         differs from  "expected"  tax  (computed  by applying the U.S.  federal
         income  tax  rate of 35% in 1996,  35% in 1995  and 1994 and to  pretax
         income) as a result of the following:

<TABLE>
<CAPTION>
                                                                     1996                  1995             1994
                                                                   --------              --------         ------


<S>                                                                <C>                   <C>              <C>    
         Computed "expected" tax expense                           540,100               446,200          541,000
         Increase (reduction) in income
          taxes resulting from:
           Small life insurance
             company deduction                                    (346,000)             (340,200)         (83,000)
           Changes in the valuation
             allowance for deferred
             tax assets, allocated to
             income tax expense                                     64,900                62,600           14,000
           (Over) under accrual of
             prior year expense                                    (82,000)               11,000           29,000
           State taxes, net of federal
             income tax benefit                                      9,000               (14,600)          28,000
           Other, net                                               10,000                (5,000)           1,000
                                                                    ------                -------           -----

                                                                  $196,000              $160,000          530,000
                                                                  ========               ========         =======

</TABLE>

         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.

         At December 31, 1996, the balance of the Policyholders' Surplus account
         aggregated   approximately  $236,000.  The  Company  has  not  recorded
         deferred income taxes totaling approximately
                                
                                       50

<PAGE>

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


10.     Income taxes, continued

        $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 1996,  1995 and 1994,  AMT  exceeded  regular  tax by
        $64,900, $62,600, and $14,000,  respectively.  At December 31, 1996, the
        AMT tax credit available to reduce future regular tax totaled $398,500.

        The  principal   elements  of  deferred  income  taxes  consist  of  the
        following:

<TABLE>
<CAPTION>
                                                                       1996              1995              1994
                                                                     --------         ---------          -------

<S>                                                                 <C>              <C>                 <C>    
         Deferred policy acquisition costs                          (431,500)        $(155,500)          213,000
         Future policy benefits                                      532,000           (23,000)          175,000
         Other                                                       (83,600)          (42,500)           42,000
                                                                     -------          --------            ------
                                                                      16,900          (221,000)          430,000
                                                                      ======          ========           =======

</TABLE>

         The tax effect of temporary  differences  that give rise to significant
         portions of the deferred tax assets and  deferred  tax  liabilities  at
         December 31, 1996 and 1995 are presented below:

<TABLE>
<CAPTION>
                                                                                  1996                   1995
                                                                               ----------             -------

<S>                                                                          <C>                      <C>
         Deferred tax assets:
         Unearned premiums, due to deferral of
           "front-end" fee                                                     $3,180,000             $3,542,000
         Policy liabilities and accruals,
            principally due to adjustments
            to reserves for tax purposes                                        1,814,000              1,984,000
         Deferred policy acquisition costs
           related to unrealized appreciation
           (depreciation)                                                          68,900                103,100
         Other                                                                    141,900                 39,200
         Alternative minimum tax credit
            carry forwards                                                        398,500                333,600
                                                                                  -------                -------

         Total gross deferred tax assets                                        5,603,300              6,001,900
         Less valuation allowance                                                (398,500)              (333,600)
                                                                                 --------               --------
         Net deferred tax assets                                                5,204,800              5,668,300
                                                                                 ---------              ---------
</TABLE>


                                       51

<PAGE>



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


10.     Income taxes, continued
<TABLE>
<CAPTION>
                                                                                  1996                   1995
                                                                               ----------             -------
  
<S>                                                                           <C>                    <C>
        Deferred tax liabilities:
          Deferred policy acquisition costs,
           principally due to
           deferrals                                                           (5,645,000)            (6,076,500)
         Other                                                                    (81,100)               (62,800)
         Unrealized appreciation                                                  (66,800)              (434,000)
                                                                                  -------               --------

         Total gross deferred tax liabilities                                  (5,792,900)            (6,573,300)
                                                                               ----------              ---------

         Net deferred tax asset (liability)                                      (588,100)              (905,000)

                                                                                 ========               ========
</TABLE>


          The net change in the total  valuation  allowance  for the years ended
          December 31, 1996, 1995, and 1994 was an increase of $64,900,  $62,000
          and $14,000, 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, 1996.


11.     Related party transactions

        The Company's general agent, Insuradyne  Corporation,  is a wholly-owned
        subsidiary of Consolidare  Enterprises,  Inc., which owns  approximately
        fifty-seven  percent  (57%)  of the  Company's  outstanding  stock.  The
        balances  due (to) from  affiliated  insurance  agency  reflected in the
        accompanying  balance sheets principally  represent unearned  commission
        advances paid to Insuradyne.  The Company incurred commission expense to
        Insuradyne  aggregating $344,904,  $422,121 and $582,059, in 1996, 1995,
        and 1994,  respectively.  These  amounts are included as  components  of
        acquisition costs

                                       52

<PAGE>



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


12.     Agents' Incentive Stock Bonus Plan

        deferred and related amortization. Insuradyne incurred insurance-related
        expenses  aggregating  $31,703,  $35,271, and $192,332 in 1996, 1995 and
        1994, respectively.

        The Company had an  incentive  bonus plan for agents that was adopted in
        1983 and effective through December 31, 1990.  Bonuses granted under the
        plan  were  vesting  over a five  year  period  commencing  on the fifth
        anniversary date of the award. Once vested,  the agent had the option to
        receive  the  bonus in cash or shares of  common  stock.  The  number of
        shares of common  stock was  determined  on the date of the award as the
        number of whole shares equal to the award based on the applicable  stock
        price on that date.

        The first awards  granted  became fully vested  during  April,  1993. On
        November 17, 1993,  the Board of Directors  approved an amendment to the
        plan to  provide  an early  payment  option.  The  agents  were given an
        increased award in exchange for settling the awards early.  During 1994,
        a total  award was  distributed  in the form of 63,295  shares of common
        stock, totaling $125,000 and cash of $3,336.


13.     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.

        The following  table  presents the carrying  amounts and estimated  fair
        values of financial  instruments held at December 31, 1996 and 1995. The
        fair  value  of a  financial  instrument  is the  amount  at  which  the
        instrument could be exchanged in a current  transaction  between willing
        parties.

                                       53

<PAGE>



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


13.     Disclosures About Fair Value of Financial Instruments,
        continued

<TABLE>
<CAPTION>

                                                          1996                                   1995
                                                  ----------------------                 ----------------
                                                Carrying        Estimated              Carrying        Estimated
                                                 amount         fair value              amount         fair value
<S>                                        <C>               <C>                  <C>                <C>
          Financial assets:
          Fixed maturities
             held to maturity
             (see note 3)                    $14,974,962        15,140,919          $15,165,395        15,494,540
          Fixed maturities
             Available for
             sale (see note 3)                24,476,239        24,476,239           21,812,096        21,812,096
          Equity securities
             Available for sale                        0                 0            1,715,386         1,715,386
          Policy and student
             loans                             7,315,809         7,315,809            9,971,653         9,971,653
          Short-term invest-
             ments                             4,539,106         4,539,106            1,499,100         1,499,100
          Cash and cash
             equivalents                         206,056           206,056              406,752           406,752

          Financial liabilities:
          Policy liabilities-
             Policyholders'
             account balances                 52,347,996        52,347,996           50,624,276        50,624,276

</TABLE>


14.       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.







                                       54

<PAGE>



                                   Schedule I
                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
        Summary of Investments Other Than Investments in Related Parties
                                December 31, 1996

<TABLE>
<CAPTION>

                                                            Number of shares
                                                               or units-                                                  Amount at
                                                                Principal                                               which shown
                                                            amounts of bonds                                                in the
                                                               or notes                Cost                  Value    balance sheet
<S>                                                        <C>                     <C>                     <C>       <C>       
Type of investment 
Fixed maturities held for investment:
   U.S. Government and government agencies and authorities    4,500,000             $4,503,477             $4,565,000    $4,503,477
   Public utilities                                           2,000,000              1,976,675              2,007,500     1,976,675
   Industrial and miscellaneous                               7,500,000              7,484,389              7,574,519     7,484,389
   Special revenue and special assessment of agencies and
      authorities of governments and political
     subdivisions                                             1,000,000              1,010,421                993,900     1,010,421
                                                              ---------              ---------                -------     ---------

   Total fixed maturities                                    15,000,000             14,974,962             15,140,919    14,974,962
                                                             ----------             ----------             ----------    ----------

Fixed maturities available for sale:
   U.S. Government and government agencies and authorities    20,400,000             20,383,080             20,563,752   20,563,752
  Public utilities                                             2,300,000              2,289,605              2,298,000    2,298,000
   Industrial and miscellaneous                                1,300,000              1,295,479              1,285,000    1,285,000
   Special revenue and special assessment of agencies and
     authorities of governments and political
     subdivisions                                                332,322                330,454                329,487      329,487
                                                                 -------                -------                -------      -------

                                                              24,332,322             24,298,618             24,476,239   24,476,239
                                                              ----------             ----------             ----------   ----------

   Total fixed maturities                                     39,332,322             39,273,580             39,617,158   39,451,201
                                                              ==========             ==========             ==========   ==========

Equity securities:
   Common, including investments in Mutual fund                      -                     -                      -           -
                                                                  ======                =======                =======      ====

Policy loans                                                                          6,801,326                           6,801,326
                                                                                      ---------                           ---------

Student loans                                                                           514,483                             514,483
                                                                                        -------                             -------

Short-term investments                                                                4,539,106                           4,539,106
                                                                                      ---------                           ---------

Other invested assets                                                                    13,100                              13,100
                                                                                         ------                              ------

   Total investments                                                                $51,141,595                         $51,319,216

                                                                                     ----------                         -----------
</TABLE>



                       See accompanying auditors' report.

                                       55

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                             Financial Data Schedule

             For the periods ending December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>

                                                              YTD                        YTD                      YTD
                                                          December 31,               December 31,             December 31,
                                                              1996                       1995                     1994
                                                          -----------                -----------              --------
<S>                                                      <C>                       <C>                       <C>
Fixed maturities held
  for sale                                                 24,276,239                 $21,812,096               18,641,197
Fixed maturities held
  To maturity (carrying
  value)                                                   14,974,962                  15,165,395               12,816,337
Fixed maturities held
  to maturity (market
  value)                                                   15,140,919                  15,494,540               12,474,492
Investment in equity
  securities                                                     -                      1,715,386                1,380,761
Mortgage loans on real
  estate                                                         -                           -                        -
Investment in real estate                                        -                           -                        -
Total investments                                          51,319,216                  50,186,208               43,612,075
Cash and cash equivalents                                     206,056                     406,752                  638,079
Reinsurance recoverable on
  paid losses                                                 379,692                     514,341                  323,184
Deferred policy acquisition costs                          16,979,612                  18,145,111               20,104,624
Total assets                                               81,809,360                  81,872,350               77,185,070
Policy liabilities-future
  benefits, losses, claims                                    985,720                   1,050,498                1,041,645
Policy liabilities-unearned
  premiums                                                  8,249,190                   9,116,890               10,416,064
Policy liabilities-other claims
  and benefits                                                293,221                     191,955                  297,376
Other policyholder funds                                       59,596                      57,444                   55,375
Notes payable, bonds, mortgages,
  and similar debt                                          1,000,000                   2,400,553                1,891,823
Preferred stocks mandatory
  Redemption                                                     -                           -                        -
Preferred stocks non-
  mandatory redemption                                           -                           -                        -
Common stock                                                1,907,989                   1,907,989                1,907,989
Other stockholders equity                                   4,011,519                   4,011,519                4,011,519
Total liabilities and
  stockholders equity                                      81,809,360                  81,872,350               77,185,070
Premiums                                                    7,915,019                   8,158,938                9,299,789
Net investment income                                       3,318,627                   2,998,875                2,750,771
Realized investment gains
  and losses                                                  869,502                      60,237                   60,732
Other income                                                     -                           -                        -
Benefits, claims, losses
  and settlement expenses                                   3,812,463                   4,048,125                4,048,221
Underwriting acquisition and
  insurance expenses-
  amortization of deferred
  policy acquisition costs                                  3,364,738                   3,069,742                3,242,706

</TABLE>





                                       56

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                       Financial Data Schedule, continued


<TABLE>
<CAPTION>

                                                              YTD                        YTD                      YTD
                                                          December 31,               December 31,             December 31,
                                                             1996                        1995                     1994
                                                          -----------                -----------              --------

<S>                                                     <C>                          <C>                     <C>
Underwriting acquisitions and
  insurance expense other                                   3,246,552                   2,735,280                3,186,386
Income or loss before taxes                                 1,588,505                   1,274,903                1,543,979
Income tax expense                                            196,000                     160,000                  530,000
Income/Loss continuing
  operations                                                1,392,505                   1,114,903                1,013,979
Discontinued operations                                          -                           -                        -
Extraordinary items                                              -                           -                        -
Cumulative effect-changes in
  accounting principals                                          -                           -                        -
Net income or loss                                          1,392,505                   1,114,903                1,013,979

Earnings per share - primary                                      .73                        0.58                     0.53
Earnings per share - fully diluted                                .73                        0.58                     0.53

</TABLE>























                                       57

<PAGE>



                                  Schedule III

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                       Supplementary Insurance Information

                        December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>

                             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>     
 
1996 Life
  and
  annuities     $16,979,612     985,720    52,347,996  8,249,190   293,221  7,915,019   3,318,627  3,812,463   3,364,738   3,246,552
                ===========     =======    ==========  =========   =======  =========   =========  =========   =========   =========

1995 Life
  and
  annuities     $18,145,111    1,050,498   50,624,276  9,116,890   191,955   8,158,938   2,998,875  4,048,125   3,069,742  2,735,280
                ===========    =========   ==========  =========   =======   =========   =========  =========   =========  =========

1994 Life
  and
  annuities     $20,104,624    1,041,645   47,618,490 10,416,064   297,376   9,299,789   2,750,771  4,048,221   3,242,706  3,186,386
                ===========    =========   ========== ==========   =======   =========   =========  =========   =========  =========

</TABLE>



                       See accompanying auditors' report.
















                                       58

<PAGE>



                                   Schedule IV
                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                   Reinsurance

                        December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>

                                                                                                                         Percentage
                                                                       Ceded to          Assumed                          of amount
                                                                         other         from other                          assumed
                                                   Gross amount        companies        companies          Net amount       to net

<S>                                             <C>                 <C>                  <C>            <C>            <C>      
December 31, 1996:
   Life insurance in force                        1,165,948,000      386,084,000      537,743,000        1,317,607,000         41%
                                                  =============      ===========      ===========        =============         ===
   Premiums:
     Life insurance                                   8,315,790        1,030,673          528,636            7,813,753          7%
     Accident & health insurance                          1,274             -                -                   1,274          -
                                                          -----          -------          -------                -----          -

   Total Premiums                                     8,317,064        1,030,673          528,636            7,815,027          7%
                                                      =========        =========          =======            =========          ==

December 31, 1995:
   Life insurance in force                       $1,298,205,000      448,382,000      507,552,000        1,357,375,000          37%
                                                 ==============      ===========      ===========        =============          ===

   Premiums:
     Life insurance                                   8,829,072        1,201,432          529,912            8,157,552           7%
     Accident & health insurance                          1,385             -                -                   1,385           -
                                                          -----            -----            -----                -----           -

   Total Premiums                                    $8,830,457        1,201,432          529,912            8,158,937           7%
                                                     ==========        =========          =======            =========           ==


December 31, 1994:
   Life insurance in force                       $1,469,154,000      502,185,000      531,502,000        1,498,471,000          35%
                                                 ==============      ===========      ===========        =============          ===

   Premiums:
     Life insurance                                  10,047,808        1,344,907          595,260            9,298,161           6%
     Accident & health insurance                          1,628             -                -                   1,628           -
                                                          -----           -----             -----                -----           -

   Total Premiums                                   $10,049,436        1,344,907          595,260            9,299,789           6%
                                                    ===========        =========          =======            =========           ==

</TABLE>






                                       59
<PAGE>



Item 9.  Change in and disagreements on Accounting and Financial
Disclosure.

       Not applicable
                                                       PART III

Item 10.  Directors and Executive Officers of the Company.

(a) Directors.  The following table lists the names and ages of all directors of
the Company at December 31, 1996,  states the date when service as a director of
the Company  began,  and lists all other  positions  or offices with the Company
presently held by each such person.
<TABLE>
<CAPTION>

                                             Director                  Other Positions &
Name                                Age       Since                    Offices with Company

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

Samuel F. Brewer                    61       May, 1978                 Member, Audit Committee

A. Thomas Frank                     72       June, 1986                Member, Executive Committee

Frank A. Hulet                      77       May 1978                  Chairman, Audit Committee

C. Wesley Johnson                   77       May, 1978

Lewis E. Kassis                     84       Jan., 1981

Robert L. Martin                    55       June, 1979                Member, Audit Committee

Charles W. Mullenix                 80       April, 1979               Member, Executive Committee

George Pihakis                      71       May, 1978                 President & Chief Executive
                                                                       Officer, Member, Executive
                                                                       Committee

Ferris Ritchey, Jr.                 67       April, 1978               Chairman of the Board, Chairman
                                                                       Executive Committee

John M. Roehm                       43       July, 1996

David C. Thompson                   59       April, 1978               Executive Vice President & Chief
                                                                       Operating Officer, Secretary,
                                                                       Treasurer

Lloyd C. Zobrist                    69       May, 1978                 Member, Executive Committee
</TABLE>

          All Directors serve until the next Annual Meeting of Shareholders  and
until their  respective  successors are duly elected and  qualified.  All of the
Directors named in the table above are stock-holders of Consolidare Enterprises,
Inc., which purchased  effective  control of the Company on May 3, 1978.  Except
for such affiliation with Consolidare

                                       60

<PAGE>



Enterprises,  Inc.,  there exists no  arrangement or  understanding  between any
Director and any other person or persons pursuant to which any of such Directors
were selected as Directors of the Company.

(b)  Executive  Officers.  The  following  table lists the names and ages of the
executive officers of the Company, the positions with the Company presently held
by each such officer, and the period during which each has served as such:

<TABLE>
<CAPTION>
                                      Position                                                   Commencement
Name                          Age      Held                                                       of Service

<S>                           <C>                                                               <C> 
George Pihakis                71      President & Chief Executive                                June, 1979
                                      Officer; Director

David C. Thompson             59      Executive Vice President and                               April, 1978
                                      Chief Operating Officer;
                                      Treasurer; Secretary; Director

Terri Seamon                  42      Vice President; Controller                                 July, 1992

Nikki Clark                   49      Vice President; Director of                                July, 1992
                                      Financial Services

Stephen Reck                  55      Vice President; Chief Actuary                              July, 1995
</TABLE>

       The Company has an executive  compensation agreement with George Pihakis,
President and Chief Executive Officer of the Company.  The term of the agreement
is  automatically  extended each year for an additional  five year period unless
either  party gives notice of  termination.  The  agreement  provides for annual
increases in Mr. Pihakis' compensation in such amounts as shall be determined by
the Board of Directors.

       At a meeting of the Company's  Board of Directors in January of 1993, the
base  compensation  payable to Mr.  Pihakis  under the  agreement  was raised to
$244,800.

       Except as set forth herein,  the officers of the Company have no definite
terms of office as such;  they serve at the pleasure of the Board of  Directors.
The Board of Directors customarily elects officers annually.

   (c) Business Experience of Officers and Directors. The  following  is a brief
account of the business experience of each executive officer and Director of the
Company during the past five years or more:

      Samuel F.  Brewer - Since  July of 1990,  Mr. Brewer has been the owner of
Brewer  Development  Corporation,  Inc.,  a food service  company.  From 1976 to
present,  Mr.  Brewer  has  been  owner  and  President  of  Brewer-Costin  Inc.
Insurance.  From 1983 to 1989, Mr. Brewer served as the State Executive Director
of  the  Georgia  office  of the  Agricultural  Stabilization  and  Conservation
Services of the U.S. Department of

                                       61

<PAGE>



     Agriculture.  Mr. Brewer is the brother-in-law of Ferris S. Ritchey, Jr., a
director of the Company.

     Nikki Clark - Ms. Clark has been employed by the Company since 1988.  Since
her  employment  by the Company,  her duties have  included  responsibility  for
policyholder services, data processing services, agent advances and commissions,
agent  licensing  matters and record  keeping.  In July of 1992,  Ms.  Clark was
elected to the office of Vice  President and Director of Financial  Services for
the Company.  Ms. Clark is the daughter of Mr. George Pihakis, the President and
Chief Executive Officer of the Company.

     A. Thomas Frank - Mr. Frank was the Chairman of the Board and the President
of Medidentic,  Inc., a financial  consulting firm for  physicians,  from 1959 -
1989. Mr. Frank retired from this position in 1989.

     Frank A. Hulet - Mr. Hulet served as a consultant to Food-Mills, Inc. d/b/a
Jayhawk  Manufacturing  Company,  a manufacturer  of food  processing  machinery
located in Hutchinson,  Kansas until he retired in 1992.  From 1977 to 1983, Mr.
Hulet served as Secretary/Treasurer and General Manager of Jayhawk Manufacturing
Company.

     C. Wesley Johnson - For more than five years,  Mr. Johnson had been manager
of the Sacramento  Field Office of the Fort Worth  Division of General  Dynamics
Corporation,  a diversified  aerospace  company.  Mr. Johnson  retired from this
position in 1984.

     Lewis E.  Kassis - Mr.  Kassis has for many years been the  Chairman of the
Board  and  part  owner  of  Wholesale  Cash  &  Carry  (Grocers),   Sacramento,
California.  He is also a partner of Kassis  Enterprises,  Country  Club  Lanes,
Kassis Wholesale Co. and an officer of Kassis Building Co.

     Robert L.  Martin - Mr.  Martin is a rancher  and  cattlebroker.  He is the
owner of Robert Lee Martin  Ranch and a partner in I. L. Martin  Ranch,  both of
which are located in Jacksboro, Texas.

     Charles W. Mullenix - Dr. Mullenix is an ophthalmologist who has served for
more than five years as President of Charles W. Mullenix and Richard B. O'Grady,
S. C., Ophthalmologists, Glenview, Illinois.

     George  Pihakis - Mr.  Pihakis has served as President and Chief  Executive
Officer  of the  Company  since  June of  1978.  He is  also  the  President  of
Insuradyne  Corporation.  Mr.  Pihakis is the father of Ms. Nikki Clark,  a Vice
President and the Director of Financial Services for the Company.

     Stephen  L.  Reck - Mr.  Reck has been an FSA,  Fellow  of the  Society  of
Actuaries,  since 1972. He has been with Southern Security since 1993 serving as
the Chief Actuary.  His primary  responsibility has been developing new products
as the Company expands its marketing

                                       62

<PAGE>



     efforts to other distribution  outlets.  Prior to joining Southern Security
he was the President of Coastal States Life Insurance Company.  In July of 1995,
Mr. Reck was elected to the office of Vice President and Chief Actuary.

     Ferris S. Ritchey, Jr. - Mr. Ritchey, an attorney, is the senior partner in
the law firm of Ritchey & Ritchey,  P. A., a position  which he has occupied for
more than five years.  He is an officer of Bowlo- Mac, Inc.,  Super Bowl,  Inc.,
Stonehenge, Inc., Vestavia Bowl, Inc., and P.R. Leasing Co., Inc. Mr. Ritchey is
the brother-in-law of Samuel F. Brewer, a Director of the Company.

     John M. Roehm - Mr.  Roehm,  RPH, is a pharmacist  and  President of Fisher
Pharmacy in Defuniak  Springs,  FL. Mr. Roehm is the son of Charles J. Roehm who
served as a Director of Southern Security for many years.

     Terri Seamon - Ms.  Seamon has been an employee of the Company since August
of 1985.  Since her  employment  by the Company her duties have  included  chief
accountant and controller.  In July of 1992 Ms. Seamon was elected to the office
of Vice President and Controller of the Company.  Ms. Seamon resigned subsequent
to December 31, 1996.

     David C.  Thompson  - Since  April of 1978,  Mr.  Thompson  has  served  as
Executive  Vice  President  and Chief  Operating  Officer and  Treasurer  of the
Company.  Since 1982,  Mr.  Thompson has served as Secretary of the Company.  He
also serves as Vice President of Consolidare  Enterprises  and is Vice President
and  Treasurer  of  Insuradyne  Corporation.  He is also the  President of and a
stock-holder  in  BBQ  Rib  Ranch,  Inc.  Mr.  Thompson  is a  certified  public
accountant.

     Lloyd C. Zobrist - Mr.  Zobrist is a retired  general  contractor  and real
estate developer from Morton,  Illinois.  He is a partner in Zobrist Development
Co., WRCL, Co., and Cross Creek Development  Company and is  Secretary/Treasurer
of N. Zobrist & Sons, Inc.

     Except as otherwise noted above, no family  relationships exist between any
of the Directors or executive officers of the Company.

          No officer or Director of the Company  presently  holds a directorship
in any other company with a class of securities  registered  pursuant to Section
12 of the  Securities  Exchange  Act or subject to the  requirements  of Section
15(d) of the Securities  Exchange Act or any company registered as an investment
company under the Investment Company Act of 1940.

          No person named as an officer or Director of the Company  has,  during
the past five years,  filed a petition under the Bankruptcy Code, been convicted
of a crime,  or been  enjoined  from  participating  in  activities  related  to
securities  or engaging in any type of business  practice.  Neither has any such
person  been the  subject  of any  order  suspending  his right to engage in any
securities related

                                       63

<PAGE>



activity  or finding any person so named to have  violated  any Federal or state
securities laws.

   (d)  Compliance  with Section  16(a) of the Exchange  Act. The Company has no
class of securities registered pursuant to Section 12 of the Exchange Act.

Item 11.  Executive Compensation.

   (a)  Summary  Compensation.  The  following  summary  compensation  table  is
provided with respect to the Company's Chief Executive Officer and its Executive
Vice  President,  who  constitute  all of the executive  officers of the Company
whose total annual salary and bonus exceed $100,000:
<TABLE>

                           SUMMARY COMPENSATION TABLE

                                                                                       Long Term Compensation

                                                    Annual Compensation            Awards         | Awards     Payouts
                                                                               |                                        |
   (a)                  (b)       (c)             (d)            (e)           |    (f)           |   (g)        (h)          (i)
                                                                               |                              
                                                                Other          |                  Securities              All other
Name and                                                        Annual         |  Restricted      Underlying   LTIP         Compen-
Principal                                                    Compensation      |  Stock Awards    Options/    Payouts    |  sation
Position               Year     Salary ($)      Bonus ($)        ($)           |     ($)          SARs(#)       ($)      |     ($)
                                                                               |                                         |
President                                                                      |                                         |
and Chief                                                                      |                                         |
Executive                                                                      |                            |            |
Officer                                                                        |                            |            |
                                                                               |                            |            |
<S>                    <C>      <C>             <C>          <C>                  <C>         <C>             <C>         <C>  
George Pihakis         1996     $244,800        $0.00        $11,500(1)        |  $0.00           N/A       |  N/A       |  N/A
                                                                               |                            |            |
George Pihakis         1995     $247,976        $0.00         $9,574(1)        |  $0.00           N/A       |  N/A       |  N/A
                                                                               |                            |            |
George Pihakis         1994     $244,800        $0.00         $8,624(1)        |  $0.00           N/A       |  N/A       |  N/A
                                                                               |                            |            |
                                                                               |                            |            |
                                                                               |                            |            |
Executive Vice                                                                 |                            |            |
President                                                                      |                            |            |
                                                                               |                            |            |
David C. Thompson      1996     $121,275        $0.00        $13,625(2)        |  $0.00           N/A       |  N/A       |  N/A
                                                                               |                            |            |
David C. Thompson      1995     $114,634        $0.00        $11,770(2)        |  $0.00           N/A       |  N/A       |  N/A
                                                                               |                            |            |
David C. Thompson      1994     $114,300        $0.00        $10,700(2)        |  $0.00           N/A       |  N/A       |  N/A
                                                                               |                            |            |
</TABLE>
                

(1)  During 1996 this amount  included  $6,300 paid in the form of a  Director's
     fee, $550 paid in the form of an Executive  Committee  Fee, and $4,650 paid
     in the form of a car  allowance.  During 1995 this amount  included  $4,800
     paid in the form of a Director's fee, $250 paid in the form of an Executive
     Committee Fee, $4,524 paid in the form of a car allowance. During 1994 this
     amount  included  $3,600 paid in the form of a Director's fee, $500 paid in
     the form of an  Executive  Committee  Fee, and $4,524 paid in the form of a
     car allowance.
                                       64
         
<PAGE>



(2)  During 1996 this amount  included  $6,300 paid in the form of a  Director's
     Fee, $550 paid in the form of an Executive  Committee  Fee,  $6,000 paid in
     the form of a car allowance,  and $835 paid in the form of dues at a social
     club used  exclusively  for  business  purposes.  During  1995 this  amount
     included $4,800 paid in the form of a Director's Fee, $250 paid in the form
     of an Executive  Committee Fee, $6,000 paid in the form of a car allowance,
     and $720  paid in the form of dues at a social  club used  exclusively  for
     business purposes. During 1994 this amount included $3,600 paid in the form
     of a Director's  fee, $500 paid in the form of an Executive  Committee fee,
     $6,000  paid in the form of a car  allowance  and $600  paid in the form of
     dues at a social club used exclusively for business purposes.

     (b) Perquisites. Executive officers of the Company who are employees of the
Company are covered under a group life, group  disability,  and  hospitalization
plan that  does not  discriminate  in favor of  officers  and that is  generally
available  to all  salaried  employees.  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  of the Company  receive a
Director's fee of $6,300 per year for serving as Directors of the Company.  Each
director  of the Company  also  receives  the sum of $275.00 for each  committee
meeting attended, if such committee meeting is not in conjunction with a meeting
of the Company's Board of Directors held at the same time and place.

     (d)  Employment  Contracts.  The  Company  has  an  executive  compensation
agreement  with George  Pihakis,  President and Chief  Executive  Officer of the
Company.  The term of the agreement is  automatically  extended each year for an
additional five year period unless either party gives notice of termination. The
agreement  provides for annual  increases in Mr.  Pihakis'  compensation in such
amounts as shall be determined by the Board of Directors.  The base compensation
payable to Mr. Pihakis under the agreement is $244,800.

     (e)  Compensation  Committee  Interlocks  and  Insider  Participation.  The
Executive Committee of the Company's Board of Directors makes  recommendation to
the Board of Directors  concerning the  compensation of the Company's  executive
officers.  Subsequently,  the  Board of  Directors  makes  all  final  decisions
concerning such  compensation.  The Company's  Executive  Committee  consists of
Charles W. Mullenix,  Ferris S. Ritchey,  Jr., A. Thomas Frank, Lloyd C. Zobrist
and George Pihakis, President and Chief Executive Officer.

     (f) Board  Compensation  Committee  Report on  Executive  Compensation.  In
determining  what  level  and type of  compensation  was made  available  to the
Company's  executive officers during 1996, the Executive  Committee and Board of
Directors  considered the over-all performance of the Company and each officer's
contribution to that performance.  Specifically, in determining the compensation
of Mr. Pihakis, the

                                       65

<PAGE>



Company's  President and Chief Executive  Officer,  the Executive  Committee and
Board of Directors  considered  his length of employment  with the Company,  his
experience in the industry,  the  financial  condition of the Company,  payments
received by other executive  officers  holding similar  positions and performing
similar duties, and other subjective criteria.


                                       66

<PAGE>



Item 12. Security Ownership of Certain Beneficial Owners and Management.

     (a) The following  table sets forth,  as of December 31, 1996,  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:
<TABLE>
<CAPTION>

                                                                     Number of Shares
Title                                                                 and Nature of
 of               Name and Address of                                    Beneficial                   Percent
Class             Beneficial Owner                                        Ownership                  of Class

<S>                                                                       <C>                          <C>  
Common            Consolidare Enterprises, Inc                            1,095,496                    57.4%
Shares            c/o Southern Security Life                                Direct
                   Insurance Company
                  755 Rinehart Road
                  Lake Mary, FL 32746

Common            Capital Indemnity Corp.,                                  142,872                     7.5%
Shares            George A. Fait                                            Direct
                  4610 University Ave, Madison, WI
</TABLE>

         Executive  officers and  directors of the Company are  shareholders  of
Consolidare  Enterprises,  Inc., which was the owner of approximately 57% of the
Company's  voting  securities  at  December  31,  1996.  At December  31,  1996,
approximately  62.8% of the issued and outstanding  common shares of Consolidare
Enterprises,  Inc. was owned by directors and executive officers of Company. The
following  table sets forth  information  as to the common  shares of  Company's
parent,  Consolidare Enterprises,  Inc., beneficially owned by all directors and
executive officers of the Company at December 31, 1996.
<TABLE>
<CAPTION>

Name                                                           Number of Shares                    Percent of Class

<S>                                                            <C>                                 <C>  
Samuel F. Brewer                                                       95,966                              2.84%

A. Thomas Frank(1)                                                     75,640                              2.24%

Frank A. Hulet(2)                                                     129,180                              3.82%

C. Wesley Johnson(3)                                                  109,999                              3.25%

Lewis Kassis(4)                                                       280,152                              8.29%

Robert L. Martin(5)                                                   135,987                              4.02%

Charles W. Mullenix(6)                                                315,548                              9.33%

George Pihakis(7)                                                     167,446                              4.95%

Ferris S. Ritchey, Jr.                                                326,870                              9.67%

John M. Roehm                                                         194,298                              5.74%
</TABLE>

                                       67

<PAGE>


<TABLE>
<CAPTION>

Name                                                           Number of Shares                    Percent of Class

<S>                                                           <C>                                 <C>  
David C. Thompson(8)                                                   69,043                              2.04%

Lloyd C. Zobrist(9)                                                   153,550                              4.54%

All Directors &
 Officers                                                           2,053,679                              60.8%

</TABLE>

(1)      Includes 70,645 shares registered in the name of Margaret
         Jeanne Frank, his wife.

(2)      Shares registered in the name of Frank and Virginia Hulet.

(3)      Shares registered in the name of Johnson Family Revocable Trust.

(4)      Shares registered in the name of Lewis and Helen Kassis Trust.

(5)      Shares attributed to Mr. Martin are registered in the name of
         his children.

(6)      240,000 shares attributed to Mr. Mullenix are registered to the
         Mullenix Family Partnership. 75,548 shares are registered in the
         name of Mr. Mullenix and his wife, Mary Jane Mullenix.

(7)      Shares attributed to Mr. Pihakis are registered in the name of
         his wife, Dolores Pihakis. Mr. Pihakis disclaims any beneficial
         ownership of such shares.

(8)      Shares registered in the name of David C. and Patricia M.
         Thompson.

(9)      141,799 Shares registered in the name of WRCL Company, of which
         Mr. Zobrist is a principal, and 11,751 shares are registered to
         Lloyd C. Zobrist, individually.

         In  addition  to  common  stock,  Consolidare  Enterprises,   Inc.  has
outstanding one additional class of securities,  14.25% Convertible Subordinated
Debentures which are convertible into common shares of Consolidare.












                                       68

<PAGE>



Item 13.  Certain Relationships and Related Transactions.

         Insuradyne  Corporation,   a  wholly-owned  subsidiary  of  Consolidare
Enterprises,  Inc.,  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 1996, gross  commissions in
the amount of $344,904  were earned by Insuradyne  Corporation.  At December 31,
1996, the Company owed $17,841 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, 1996.

         The  Company  continues  to be  indebted  to  its  parent,  Consolidare
Enterprises,  Inc., 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  $1,750,000,  pursuant  to
Florida Statutes  ss.628.401  (1990).  Interest and principal can only be repaid
upon the express written approval of the Florida Department of Insurance.

         On December 31, 1996, approximately 60.8% of the issued and outstanding
stock of Consolidare Enterprises,  Inc. was owned by the directors and executive
officers of the Company.  See item 12 Security  Ownership of Certain  Beneficial
Owners and Management.

         Ferris S.  Ritchey,  Jr.,  a  Director  and a member  of the  Executive
Committee,  is a member of the law firm of Ritchey & Ritchey, P.A., which serves
as legal counsel to the Company on certain matters.


                                       69

<PAGE>



                                     PART IV


Item 14. Financial Statements, Exhibits filed and Reports on Form 8-K.
<TABLE>
<CAPTION>

         (a)      1.       Financial Statements                                    Page Number

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

                           Independent Auditors' Report............                    23

                           Balance Sheets - December 31,
                           1996 and 1995...........................                    24

                           Statements of Income - years ended
                           December 31, 1996, 1995 and 1994........                    26

                           Statements of Shareholders' Equity - years
                           ended December 31, 1996, 1995 and 1994..                    27

                           Statements of Cash Flows - years ended
                           December 31, 1996, 1995 and 1994........                    28

                           Notes to Financial Statements...........                    31

                  2.       Supplemental Schedules.

                           Required Financial Data  -  for  the  years 
                           ended December 31, 1996, 1995 and 1994 - 
                           included in Part II, Item 8:

                           Schedule I - Summary of Investments -
                           Other than Investments in Related
                           Parties...........................                          55

                           Financial Data Schedule.................                    56

                           Schedule III - Supplementary Insurance
                           Information...................                              58

                           Schedule IV - Reinsurance...............                    59
</TABLE>

         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.

                                       70

<PAGE>



3.       Exhibits

<TABLE>
<CAPTION>

         Exhibit Number                                                            Page Number

<S>                                                                               <C>
                   3.      Articles of Incorporation, as
                           amended, and By-Laws, as amended
                           (without exhibits) dated September 1994,
                           incorporated by reference herein from
                           From Exhibit 3(1) of the Annual Report of
                           the Company filed on Form 10-K for the
                           fiscal year ended December 31, 1994.....                    83

                  10.      Executive  Compensation Agreement between the Company
                           and George Pihakis (without exhibits) incorporated by
                           reference  herein  from  Exhibit  10(B) of the Annual
                           Report  of the  Company  filed  on Form  10-K for the
                           fiscal year
                           ended December 31, 1984.................                    84

                  10.A     Revolving Financing Agreement between
                           the Company and the Student Loan
                           Marketing Association, dated as of
                           September 19, 1996......................                    85

                  10.B     Reinsurance  Agreement between the Company and United
                           Group  Insurance  Company,  dated as of December  31,
                           1992  incorporated  by reference  herein from Exhibit
                           10(B) of the Annual  Report of the  Company  filed on
                           Form 10-K for the fiscal
                           year ended December 31, 1992............                    86

                  10.C     Agency  Agreement  between the Company and Insuradyne
                           Corporation  incorporated  by  reference  herein from
                           Exhibit  10(C) of the  Annual  Report of the  Company
                           filed on Form 10-K for the fiscal year ended
                           December 31, 1993.......................                    87

                  11.      Statement Re Computation of Net Income per
                           common share............................                    88

                  20.      Definitive proxy materials for the
                           Annual Meeting of Shareholders held
                           July 13, 1996.................                              89

                  (b)      Reports on Form 8-K

                           None.
</TABLE>

                                       71

<PAGE>







                                   SIGNATURES


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


                              By: /s/George Pihakis
                                 George Pihakis
                                 President, Chief Executive
                                 Officer and Director


                             By: /s/David C. Thompson
                                 David C. Thompson
                                 Executive Vice President
                                 Secretary, Treasurer,
                                 Chief Operating Officer and
                                 Director


Date: April 30, 1997




















(F:\USERS\TINA\MEMOS\10K96)

                                       72

<PAGE>



Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been  signed  below by the  following  Director  of the  Company on the date
indicated.

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY


                             By: /s/Samuel F. Brewer
                                 Samuel F. Brewer (Director)
                                 April 30, 1997



                                       73

<PAGE>



Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been  signed  below by the  following  Director  of the  Company on the date
indicated.

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY


                            By:  /s/Alfred T. Frank
                                 Alfred T. Frank (Director)
                                 April 30, 1997



                                       74

<PAGE>



Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been  signed  below by the  following  Director  of the  Company on the date
indicated.

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY


                           By:  /s/Frank A. Hulet
                                Frank A. Hulet (Director)
                                April 30, 1997


                                       75

<PAGE>



Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been  signed  below by the  following  Director  of the  Company on the date
indicated.

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY


                       By:  /s/C. Wesley Johnson
                            C. Wesley Johnson (Director)
                            April 30, 1997



                                       76

<PAGE>



Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been  signed  below by the  following  Director  of the  Company on the date
indicated.

SOUTHERN SECURITY LIFE INSURANCE COMPANY


                         By:  /s/Robert Lee Martin
                              Robert Lee Martin (Director)
                              April 30, 1997



                                       77

<PAGE>



Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been  signed  below by the  following  Director  of the  Company on the date
indicated.

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY


                    By: /s/Dr. Charles W. Mullenix
                        Dr. Charles W. Mullenix (Director)
                        April 30, 1997
                    


                                       78

<PAGE>



Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been  signed  below by the  following  Director  of the  Company on the date
indicated.

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY


                  By:  /s/Ferris S. Ritchey, Jr.
                       Ferris S. Ritchey, Jr. (Director)
                       April 30, 1997



                                       79

<PAGE>



Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been  signed  below by the  following  Director  of the  Company on the date
indicated.

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY


                    By:  /s/John M. Roehm
                        John M. Roehm (Director)
                        April 30, 1997         


                                       80

<PAGE>



Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been  signed  below by the  following  Director  of the  Company on the date
indicated.

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY


                        By:  /s/Lloyd C. Zobrist
                            Lloyd C. Zobrist (Director)
                            April 30, 1997



                                       81

<PAGE>



Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been  signed  below by the  following  Director  of the  Company on the date
indicated.

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY


                         By:  /s/Lewis Kassis
                             Lewis Kassis (Director)
                             April 30, 1997
























                                       82

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                    EXHIBIT 3

                 EXHIBITS FILED WITH ANNUAL REPORT ON FORM 10-K
                      FOR THE YEAR ENDED DECEMBER 31, 1994


                                       83

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                   EXHIBIT 10

                 EXHIBITS FILED WITH ANNUAL REPORT ON FORM 10-K
                      FOR THE YEAR ENDED DECEMBER 31, 1984


                                       84

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                  EXHIBIT 10.A

                      REVOLVING FINANCING AGREEMENT BETWEEN
                        THE COMPANY AND THE STUDENT LOAN
                              MARKETING ASSOCIATION


                                       85

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                  EXHIBIT 10.B

                              REINSURANCE AGREEMENT
                             BETWEEN THE COMPANY AND
                         UNITED GROUP INSURANCE COMPANY


                       EXHIBIT FILED WITH ANNUAL REPORT ON
                          FORM 10-K FOR THE YEAR ENDED
                                DECEMBER 31, 1992


                                       86

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                  EXHIBIT 10.C

                          AGENCY AGREEMENT BETWEEN THE
                       COMPANY AND INSURADYNE CORPORATION

                       EXHIBIT FILED WITH ANNUAL REPORT ON
                          FORM 10-K FOR THE YEAR ENDED
                                DECEMBER 31, 1993


                                       87

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                                      EXHIBIT 11

                                               COMPUTATION OF NET INCOME

                                                   PER COMMON SHARE


<TABLE>
<CAPTION>

                                        1996                     1995                1994    
                                      -------                   --------           ----------   

<S>                               <C>                        <C>                 <C>
Weighted Average
Shares Outstanding                  1,907,989                  1,907,989            1,907,989    

Net Income                         $1,392,505                 $1,114,903           $1,013,979   

Per Share Amount                         $.73                       $.58                 $.53  

</TABLE>



                                       88

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                   EXHIBIT 20

                DEFINITIVE PROXY MATERIALS FOR THE ANNUAL MEETING



                                       89