Premium income		$15,470	$13,090 $14,479(f) $7,100 10,468(e) Investment activity Net investment Income 43,173 44,821 34,221 29,197 20,871 Net realized investment gains (losses)	 (4,492) 78 353 396 1,302 Total revenues		 76,063	 72,963 63,275 46,855 40,205 Interest expense and financing costs	 3,417 3,385 2,955 2,381 805 Total benefits and expenses			 69,659	 65,565 56,964 43,593 36,670(e) Income before income taxes and extraordinary gain (loss)		 	 6,404	 7,398 6,311 3,262 3,535 Operating income (b) 7,333	 5,221 4,448 2,384 1,174 Net income		 5,267	 5,272 4,681	 2,645 4,767
(a)	Comparison of consolidated financial information is significantly affected by the acquisitions of Dixie Life on October 2, 1995, Shelby Life on November 8, 1996, Savers Life on March 12, 1998, Midwestern Life on October 30, 1998 and the disposal of First International on March 18, 1996. Refer to the notes to the consolidated financial statements in this report for a description of business combinations.
The magnitude of the risks associated with each of the actuarial assumptions used in determining expected future cash flows (as described above).
Net investment income includes interest earned on invested assets and fluctuates with changes in i) the amount of average invested assets supporting insurance liabilities, and ii) the average yield earned on those invested assets. Net investment income also fluctuates due to equity-indexed products which are hedged with call options to limit risk against unusually favorable returns in the equity market. The market value of these options fluctuate from period to period and are substantially compensated by increases or decreases in the offsetting liability. Refer to "Interest credited to interest sensitive annuities and other financial products" in Item 7.
Interest credited to interest-sensitive annuities and other financial products represents interest credited to insurance liabilities of the FPDA's, equity-indexed annuities, SPIA's, interest sensitive and other financial products. This expense fluctuates with changes in i) average interest-sensitive insurance liabilities and ii) the average credited rate on those liabilities. Also refer to "Net investment income" in Item 7.
Standard Management loaned $27.0 million to Standard Life pursuant to Unsecured Surplus Debenture Agreements ("surplus debenture") which requires Standard Life to make quarterly interest payments to Standard Management at a variable corporate base rate plus 2% per annum, and annual principal payments of $1.0 million per year beginning in 2007 and concluding in 2033. The interest and principal payments are subject to quarterly approval by the IDOI, depending upon satisfaction of certain financial tests relating to levels of Standard Life's capital and surplus and general approval of the Commissioner of the IDOI. Standard Management currently anticipates these quarterly approvals will be granted. Assuming the approvals are granted and the December 31, 2000 interest rate of 11.50% continues, Standard Management will receive interest income of $3.1 million from the surplus debenture in 2001.
Management Fees. Pursuant to a management services agreement, Standard Life paid Standard Management $3.6 million during 2000 and $3.4 million during 1999 for certain management services related to the production of business, investment of assets and evaluation of acquisitions. Prior to its merger into Standard Life, Savers Life paid Standard Management $.8 million during for certain management services pursuant to a management services agreement. In addition, Dixie Life paid Standard Life $1.2 million and $.9 million in 2000 and 1999, respectively, for certain management services provided. Both of these agreements provide that they may be modified or terminated by the Indiana and Mississippi Departments of Insurance in the event of financial hardship of Standard Life or Dixie Life.
SMC operates in a highly competitive environment and is in direct competition with a large number of insurance companies, many of which offer a greater number of products through a greater number of agents and have greater resources. In addition, SMC may be subject, from time to time, to new competition resulting from additional private insurance carriers introducing products similar to those offered by SMC. Moreover, as a result of recent federal legislation, commercial banks, insurance companies, and investment banks may now combine, provided certain requirements are satisfied, and SMC expects to encounter increased competition from these providers of financial services. This competitive environment could result in lower premiums, loss of sales and reduced profitability.