Back to GetFilings.com
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 2003 Commission File Number: 2-35669
- ------------------------------------ -------------------------------
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Exact Name of Registrant.
FLORIDA 59-1231733
- --------------------------------- ---------------------------
(State or other jurisdiction (IRS Identification Number)
of incorporation or organization)
755 Rinehart Road, Lake Mary, Florida 32746
- ------------------------------------- -------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including Area Code (407) 321-7113
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class A Common Stock, $1.00 par value 2,103,600
- ------------------------------------- -----------------------------
Title of Class Number of Shares Outstanding
as of September 30, 2003
SOUTHERN SECURITY LIFE INSURANCE COMPANY
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements Page No.
- ------ --------
Statement of Operations - Nine and Three Months
ended September 30, 2003 and 2002 (unaudited)....................3
Balance Sheet - September 30, 2003 (unaudited)
and December 31, 2002............................................4-5
Statement of Cash Flows - Nine Months ended September 30,
2003 and 2002 (unaudited)........................................6
Notes to Condensed Financial Statements..........................7
Item 2
Management's Discussion and Analysis......................... 7-10
Item 3
Quantitative and Qualitative Disclosure of Market Risk........10
Item 4
Controls and Procedures.......................................11
PART II - OTHER INFORMATION
Other Information..........................................11-13
Signature Page.............................................14
Certifications.............................................15-17
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Statement of Operations
(Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----
Revenues:
Net insurance revenues $5,432,512 $5,185,999 $1,851,610 $1,840,583
Net investment income 2,965,062 2,881,643 939,799 970,488
----------- ----------- ----------- -----------
8,397,574 8,067,642 2,791,409 2,811,071
----------- ----------- ----------- -----------
Benefits, claims and expenses:
- -----------------------------
Benefits and claims 4,171,203 3,659,021 1,412,193 1,273,964
Amortization of deferred policy
acquisition costs 1,630,366 1,750,453 565,919 635,484
Operating expenses 2,687,263 2,749,540 983,087 919,175
----------- ----------- ----------- -----------
8,488,832 8,159,014 2,961,199 2,828,623
----------- ----------- ----------- -----------
Income (loss) before income taxes (91,258) (91,372) (169,790) (17,552)
Income tax expense (benefit) (17,215) (18,512) (33,798) (2,000)
----------- ----------- ----------- -----------
Net income (loss) $(74,043) $(72,860) $(135,992) $(15,552)
=========== =========== =========== ===========
Basic and diluted net income (loss)
per share of common stock $(.04) $(.04) $(.06) $(.01)
=========== =========== =========== ===========
Weighted average outstanding
common shares - basic and diluted 2,070,198 1,971,592 2,103,600 2,003,388
=========== =========== =========== ===========
See accompanying notes to condensed financial statements.
SOUTHERN SECURITY LIFE INSURANCE COMPANY
BALANCE SHEET
September 30, 2003 December 31,
(Unaudited) 2002
Assets:
Investments:
Fixed maturities held-to-maturity $3,808,128 $3,971,539
Securities available-for-sale,
at fair value:
Fixed maturities 17,789,937 18,439,961
Equity securities 378,355 309,218
Mortgage loans 2,220,595 2,244,597
Policy and student loans 8,073,681 8,027,736
Short-term investments 17,052,691 16,283,759
----------- -----------
Total Investments 49,323,387 49,276,810
----------- -----------
Cash and cash equivalents 3,493,713 3,067,284
Accrued investment income 609,708 473,789
Deferred policy acquisition costs 13,571,150 13,391,535
Policyholders' account balances on
deposit with reinsurer 6,822,334 6,955,691
Reinsurance receivable 420,859 279,090
Receivables:
Agent balances, net 366,286 776,244
Parent Company 22,546 --
Other 818,393 614,150
Property and equipment, net, at cost 2,342,330 2,430,404
----------- -----------
Total assets $77,790,706 $77,264,997
=========== ===========
See accompanying notes to condensed financial statements.
SOUTHERN SECURITY LIFE INSURANCE COMPANY
BALANCE SHEET (Continued)
September 30, 2003 December 31,
(Unaudited) 2002
Liabilities and Shareholders' Equity:
Liabilities:
Policy liabilities and accruals $4,079,251 $3,517,481
Future policy benefits:
Policyholders' account balances 46,858,474 47,222,857
Unearned revenue 4,396,270 4,551,265
Other policy claims and benefits payable 1,432,893 701,312
Other policyholders' funds, dividend
and endowment accumulations 103,948 78,811
Funds held related to reinsurance treaties 1,304,981 1,334,963
Note payable to related party 1,000,000 1,000,000
Due to affiliated companies 60,455 83,941
General expenses accrued 109,422 98,480
Unearned investment income 368,731 355,529
Other liabilities 1,042 111,786
Income taxes 1,029,525 1,062,802
----------- -----------
Total liabilities 60,744,992 60,119,227
----------- -----------
Shareholders' equity:
Common stock, $1 par, authorized
3,000,000 shares; issued and out-
standing, 2,103,600 shares in 2003 and
2,003,388 shares in 2002 2,103,600 2,003,388
Capital in excess of par 4,614,924 4,267,189
Accumulated other comprehensive income 845,185 871,197
Retained earnings 9,482,005 10,003,996
----------- -----------
Total shareholders' equity 17,045,714 17,145,770
Commitments and contingencies -- --
----------- -----------
Total liabilities and shareholders' equity $77,790,706 $77,264,997
=========== ===========
See accompanying notes to condensed financial statements.
SOUTHERN SECURITY LIFE INSURANCE COMPANY
STATEMENT OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
2003 2002
---- ----
Net cash provided by operating activities $2,374,126 $2,064,806
----------- -----------
Cash flows provided by (used in) investing activities:
Proceeds from maturity of held-to-maturity
securities 180,984 924,791
Proceeds from maturity of available
for-sale securities 360,000 3,300,000
Proceeds from sale of available for sale
equity securities -- 37,824
Purchase of investments held to maturity -- (1,784,283)
Mortgage loan repayments 24,002 15,739
Net change in short-term investments (768,932) (3,061,929)
Net change in policy and student loans (45,945) 178,223
Acquisition of property and equipment (5,986) (31,378)
----------- -----------
Net cash provided by (used in) investing
activities (255,877) (421,013)
----------- -----------
Cash flow used in financing activities:
Receipts from universal life and
certain annuity policies credited
to policyholder account balances 3,274,648 3,700,109
Return of policyholder balances
on universal life and certain
annuity policies (4,966,468) (5,582,500)
----------- -----------
Net cash used in financing activities (1,691,820) (1,882,391)
----------- -----------
Increase (decrease) in cash and cash
equivalents 426,429 (238,598)
Cash and cash equivalents at beginning
of period 3,067,284 1,969,055
----------- -----------
Cash and cash equivalents at end of period $3,493,713 $1,730,457
=========== ===========
See accompanying notes to condensed financial statements.
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Notes to Condensed Financial Statements
September 30, 2003
(Unaudited)
1. Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared by
management in conformity with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include
all of the disclosures required by accounting principles generally accepted in
the United States of America for complete financial statements. All adjustments
and accruals considered necessary for fair presentation of financial information
have been included in the opinion of management, and are of a normal recurring
nature. Quarterly results of operations are not necessarily indicative of annual
results. These statements should be read in conjunction with the financial
statements and the notes thereto included in the Southern Security Life
Insurance Company 2002 Annual Report on Form 10-K for the fiscal year ended
December 31, 2002 (file number 2-35669).
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
The estimates susceptible to significant change are those used in determining
the liability for future policy benefits and claims. Although some variability
is inherent in these estimates, management believes the amounts provided are
adequate.
2. Comprehensive Income
For the nine months ended September 30, 2003 and 2002, total comprehensive
income (loss) was $(100,056) and $246,724 respectively. For the three months
ended September 30, 2003 and 2002, total comprehensive income (loss) was
$(471,103) and $194,693, respectively.
3. Recent Accounting Pronouncements
In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. SFAS No. 149 amends and clarifies
financial accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. This Statement is effective for
contracts entered into or modified after June 30, 2003, with certain exceptions,
and for hedging relationships designated after September 30, 2003. We are
currently evaluating the effect that the adoption of SFAS No. 149 will have on
our results of operations and financial position.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
requires that certain financial instruments, which under previous guidance may
have been accounted for as equity, must now be accounted for as liabilities (or
an asset in some circumstances). The financial instruments affected include
mandatory redeemable stock, certain financial instruments that require or may
require the issuer to buy back some of its shares in exchange for cash or other
assets and certain obligations that can be settled with shares of stock. This
Statement is effective for all such financial instruments entered into or
modified after May 31, 2003, and otherwise is effective at the beginning of the
first interim period beginning after June 15, 2003. Management does not believe
the adoption of SFAS No. 150 will have a material effect on the Company's
financial position or results of operations.
In January 2003, the FASB issued SFAS No. 46, "Consolidation of Variable
Interest Entities." SFAS No. 46 is currently effective for periods beginning
after December 15, 2003. SFAS No. 46 clarifies the application of Accounting
Research Bulletin No. 51, "Consolidated Financial Statements," to certain
entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from a separate enterprise. Such entities are identified as Variable
Interest Entities. The objective of SFAS No. 46 is to improve financial
reporting by those separate enterprises involved with variable interest
entities. If those separate enterprises have a controlling financial interest in
a variable interest entity, the assets, liabilities, and results of the
activities of the variable interest entity should be included in the financial
statements with those of the business enterprise. Management does not believe
the adoption of SFAS No. 46 will have a material effect on the Company's
financial position or results of operations. SFAS No. 46 further requires the
disclosure of certain information related to variable interest entities in which
the Company holds a significant variable interest. The Company does not believe
that it owns any such interests that require disclosure at this time.
Item 2. Management's Discussion and Analysis
Overview
This analysis of the results of operations and financial condition of Southern
Security Life should be read in conjunction with the Condensed Financial
Statements and Notes to the Condensed Financial Statements included in this
report.
The Company has primarily issued three types of insurance products: universal
life, 10-Pay Whole Life with an Annuity Rider, and final expense products.
Universal life provides insurance coverage with flexible premiums, within
limits, which allow policyholders to accumulate cash values. The accumulated
cash values are credited with tax-deferred interest, as adjusted by the Company
on a periodic basis. Deducted from the cash accumulations are administrative
charges and mortality costs. Should a policy surrender in its early years, the
Company assesses a surrender fee against the cash value accumulations based on a
graded formula.
Final expense products are traditional endowment type insurance policies written
for the senior market. Because the products are written to a senior market they
are designed to accommodate adverse health conditions. Because of the size of
the policies, the products are usually issued with only limited underwriting.
The coverage size of the policy is roughly equivalent to the insured's
anticipated funeral costs.
The 10-Pay Whole Life with an Annuity Rider product is designed for the student
loan market. The savings aspect of the Annuity Rider is marketed as a tool for
parents to help fund their children's higher education. The product is offered
to parents who have children under the age of 25.
The Company established a lead generation program that has been coupled with a
recruiting program for new sales agents to help generate new business.
An additional source of income to the Company is investment income. The Company
invests those funds deposited by policyholders of universal life and annuity
products in debt and equity securities, mortgage loans, and warehouse mortgage
loans on a short-term basis before selling the loans to investors in accordance
with the requirements and laws governing life insurance companies, in order to
earn interest and dividend income, a portion of which is credited back to the
policyholders. Interest rates and maturities of the Company's investment
portfolio play an important part in determining the interest rates credited to
policyholders.
Product profitability is affected by several different factors, such as
mortality experience (actual versus expected), interest rate spreads (excess
interest earned over interest credited to policyholders) and controlling policy
acquisition costs and other costs of operation. The results of any one reporting
period may be significantly affected by the level of death claims or other
policyholder benefits incurred due to the Company's relatively small size.
Results of Operations
Nine Months Ended September 30, 2003 Compared to Nine Months Ended September 30,
2002
Total revenues increased by $330,000, or 4.1%, to $8,398,000 for the nine months
ended September 30, 2003, from $8,068,000 for the nine months ended September
30, 2002. Contributing to this increase was a $247,000 increase in net insurance
revenues and an $83,000 increase in net investment income.
Net insurance revenues increased by $247,000 or 4.8%, to $5,433,000 for the nine
months ended September 30, 2003, from $5,186,000 for the nine months ended
September 30, 2002. This increase was primarily the result of an increase in
traditional life sales.
Net investment income increased by $83,000, or 2.9%, to $2,965,000 for the nine
months ended September 30, 2003, from $2,882,000 for the nine months ended
September 30, 2002. This increase was due to additional interest income earned
on warehouse mortgage loans included in short-term investments.
Benefits and claims increased by $512,000, or 14.0%, to $4,171,000 for the nine
months ended September 30, 2003, from $3,659,000 for the comparable period in
2002. This increase was primarily due to an increase in death claims and future
policy benefits.
Amortization of deferred policy acquisition costs decreased by $120,000, or
6.9%, to $1,630,000 for the nine months ended September 30, 2003, from
$1,750,000 for the comparable period in 2002. This decrease was in line with
actuarial assumptions.
Operating expenses decreased by $63,000, or 2.3%, to $2,687,000 for the nine
months ended September 30, 2003, from $2,750,000 for the same period in 2002.
This decrease was primarily the result of an insurance recovery in May 2003 for
the legal fees expended for litigation purposes in previous years.
Third Quarter of 2003 Compared to Third Quarter of 2002
Total revenues decreased by $20,000, or 0.7%, to $2,791,000 for the three months
ended September 30, 2003, from $2,811,000 for the three months ended September
30, 2002. Contributing to this decrease was a $30,000 reduction in net vestment
income.
Net insurance revenues increased by $11,000, or 0.6%, to $1,852,000 for the
three months ended September 30, 2003, from $1,841,000 for the comparable period
in 2002. This increase was primarily the result of an increase in traditional
life sales.
Net investment income decreased by $30,000, or 3.1%, to $940,000 for the three
months ended September 30, 2003, from $970,000 for the comparable period in
2002. This decrease was primarily due to a reduction in interest income earned
on warehouse mortgage loans included in short-term investments.
Benefits and claims increased by $138,000, or 10.9%, to $1,412,000 for the three
months ended September 30, 2003, from $1,274,000 for the comparable period in
2002. This increase was primarily due to an increase in death claims and
traditional life reserves.
The amortization of deferred policy acquisition costs decreased by $69,000, or
10.9%, to $566,000 for the three months ended September 30, 2003, from $635,000
for the comparable period in 2002. The decrease was primarily due to the
adjustment of the amortization rate to the Company's current actuarial
assumptions.
Operating expenses increased by $64,000, or 7.0%, to $983,000, for the three
months ended September 30, 2003, from $919,000 for the comparable period in
2002. This increase was primarily the result of higher agency expenses.
Liquidity and Capital Resources
The Company attempts to match the duration of invested assets with its
policyholder liabilities. The Company may sell investments other than those
held-to-maturity in the portfolio to help in this timing; however, to date, that
has not been necessary. The Company purchases short-term investments on a
temporary basis to meet the expectations of short-term requirements of the
Company's products. The Company's investment philosophy is intended to provide a
rate of return that will persist during the expected duration of policyholder
liabilities regardless of future interest rate movements.
The Company's investment policy is to invest predominantly in fixed maturity
securities, mortgage loans, and warehouse mortgage loans on a short-term basis
before selling the loans to investors in accordance with the requirements and
laws governing life insurance companies. Bonds owned by the Company amounted to
$21,598,000 as of September 30, 2003, as compared to $22,412,000 as of December
31, 2002. This represents 44% and 45% of the total investments as of September
30, 2003 and December 31, 2002, respectively. Generally, all bonds owned by the
Company are rated by the National Association of Insurance Commissioners. Under
this rating system, there are six categories used for rating bonds. At September
30, 2003, and at December 31, 2002, the Company had investments in bonds in
rating categories three through six, which are considered non-investment grade,
of $487,000 and $485,000, respectively.
The Company has classified certain of its fixed income securities as available
for sale, with the remainder classified as held to maturity. However, in
accordance with Company policy, any such securities purchased in the future will
be classified as held to maturity. Business conditions, however, may develop in
the future which may indicate a need for a higher level of liquidity in the
investment portfolio. In that event the Company believes it could sell
short-term investment grade securities before liquidating higher-yielding
longer-term securities.
The Company has a substantial portion of its assets invested in high-yield,
short-term investments. If market conditions were to change so that rates for
short-term investments were to drop or if these investments and higher yielding
long-term investments were not available, the Company's interest rate spread
(excess interest earned over interest credited to policyholders) would be
adversely affected and could result in significant decreases in the Company's
overall profitability or losses.
The Company is subject to risk based capital guidelines established by statutory
regulators requiring minimum capital levels based on the perceived risk of
assets, liabilities, disintermediation, and business risk. At September 30, 2003
and December 31, 2002, the Company exceeded the regulatory criteria.
Lapse rates measure the amount of insurance terminated during a particular
period. The Company's lapse rate for life insurance in 2002 was 11.9% as
compared to a rate of 13.8% for 2001. The 2003 lapse rate has been approximately
the same as 2002.
At September 30, 2003, $8,772,000 of the Company's stockholders' equity
represented the statutory stockholders' equity. The Company cannot pay a
dividend to its parent company without the approval of insurance regulatory
authorities.
The Company has no material commitments for capital expenditures.
Item 3. Quantitative and Qualitative Disclosure of Market Risk
There have been no significant changes since the annual report Form 10-K filed
for the year ended December 31, 2002.
Item 4. Controls and Procedures
The Company's Chief Executive Officer and its Chief Financial Officer (the
"Certifying Officers"), are responsible for establishing and maintaining
disclosure controls and procedures for the Company. The Certifying Officers have
concluded (based on their evaluation of these controls and procedures as of
September 30, 2003) that the design and operation of the Company's disclosure
controls and procedures (as defined in Rule 13a-14(c) under the Securities
Exchange Act of 1934) are effective. No significant changes were made in the
Company's internal controls or in other factors that could significantly affect
those controls subsequent to the date of the evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Part II Other Information:
Item 1. Legal Proceedings
An action was brought against Southern Security Life Insurance Company by
National Group Underwriters, Inc. ("NGU") in state court in the State of Texas.
The case was removed by the Company to the United States District Court for the
Northern District of Texas, Fort Worth Division, with Civil No. 4:01-CV-403-E.
An Amended Complaint was filed on or about July 18, 2001. The Amended Complaint
asserted that NGU had a contract with the Company wherein NGU would submit
applications for certain policies of insurance to be issued by the Company. It
alleged that disputes had arisen between NGU and the Company with regard to the
calculation and payment of certain advanced commissions as well as certain
production bonuses.
NGU alleged that it had been damaged far in excess of the $75,000 minimum
jurisdictional limits of the Federal Court. NGU also sought attorney's fees and
costs as well as prejudgment and post judgment interest. A second amended
complaint and a third amended complaint that included a fraud claim were filed.
A motion was filed by the Company to dismiss the third amended complaint,
including the fraud claim. The court denied the motion. The Company
counterclaimed for what it claimed to be a debit balance owing to it pursuant to
the relationship between the parties with said counterclaim seeking such from
NGU (the amount subject to reduction as premiums are received). The Company also
sought to recover attorney's fees and costs, as well as punitive damages on
three of its causes of action. Certain discovery took place. The federal case
was dismissed per stipulation. The matter was refiled in Texas state court,
Tarrant County, Case No. 348 195490 02. The claims of the respective parties are
essentially the same as set forth above, which claims against the Company
include fraudulent inducement relative to entering into a contract, fraud,
breach of contract, breach of duty of good faith and fair dealing, attorneys'
fees and exemplary damages. Certain depositions have been taken since the filing
again in state court and further discovery is anticipated. The Company intends
to vigorously defend the matter as well as prosecute its counterclaim. A trial
is presently set for July, 2004.
The Company is not a party to any other legal proceedings outside the ordinary
course of the Company's business or to any other legal proceedings, which, if
adversely determined, would have a material adverse effect on the Company or its
business.
Item 2. Changes in Securities
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders
At the annual stockholders meeting held on July 11, 2003, the
following matters were acted upon: (i) eight directors consisting
of, J. Lynn Beckstead, Jr., Charles L. Crittenden, Dr. Robert G.
Hunter, H. Craig Moody, George R. Quist , G. Robert Quist, Scott
M. Quist, and Norman G. Wilbur were elected to serve until the
next annual stockholders meeting or until their respective
successors are elected and qualified (for George R. Quist,
1,527,234 votes were cast in favor of election, no votes were
cast against election and there were 270 abstentions; for J. Lynn
Beckstead, Jr., 1,527,234 votes were cast in favor of election,
no votes were cast against election and there were 270
abstentions; for Scott M. Quist, 1,527,234 votes were cast in
favor of election, no votes were cast against election and there
were 270 abstentions; for Charles L. Crittenden, 1,527,234 votes
were cast in favor of election and no votes were cast against
election and there were 270 abstentions; for Dr. Robert G.
Hunter, 1,526,837 votes were cast in favor of election, no votes
cast against election and there were 667 abstentions; for H.
Craig Moody, 1,526,308 votes were cast in favor of election, no
votes cast against election and there were 1,196 abstentions; for
G. Robert Quist, 1,527,234 votes were cast in favor of election
and no votes were cast against election and there were no
abstentions; for Norman G. Wilbur, 1,526,705 votes were cast in
favor of election, no votes were cast against election and there
were 799 abstentions; (ii) the appointment of Tanner + Co., as
the Company's independent accountants for the fiscal year ended
December 31, 2003, was ratified (with 1,525,218 votes cast for
appointment, 270 votes against appointment and 2,016
abstentions).
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Articles of Incorporation, as amended, and Bylaws, as amended,
dated September 1994, incorporated by reference from the Annual
Report filed on Form 10-K for fiscal year ended December 31,
1994.
10.1 Revolving Financing Agreement between the Company and the Student
Loan Marketing Association, dated September 19, 1996,
incorporated by reference from Annual Report on Form 10-K for
fiscal year ended December 31, 1997.
10.2 Reinsurance Agreement between the Company and United Group
Insurance Company, dated as of December 31, 1992 incorporated by
reference from Annual Report on Form 10-K for fiscal year ended
December 31, 1992.
10.3 Agency Agreement between the Company and Insuradyne Corporation
incorporated by reference from Annual Report on Form 10-K for
fiscal year ended December 31, 1993.
10.4 Administrative Services Agreement between the Company and
Security National Financial Corporation effective December 17,
1998, incorporated by reference from Annual Report on Form 10-K
for fiscal year ended December 31, 1998.
10.5 Agency Agreement between the Company and Security National
Mortgage Company dated December 28, 1998 incorporated by
reference from Annual Report on Form 10-K for fiscal year ended
December 31, 1999.
10.6 Loan Funding and Fee Agreement between the Company and Security
National Mortgage Company dated December 28, 1998, incorporated
by reference from Annual Report on Form 10-K for fiscal year
ended December 31, 1999.
31.1 Certification pursuant to 18 U.S.C. Section 1350 as enacted by
Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification pursuant to 18 U.S.C. Section 1350 as enacted by
Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K:
NONE
-----------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REGISTRANT
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Registrant
DATED: November 14, 2003 By: George R. Quist,
----------------
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
DATED: November 14, 2003 By: Stephen M. Sill
---------------
Vice President, Treasurer and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. ss. 1350,
AS ENACTED BY SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, George R. Quist, certify that:
1. I have reviewed this quarterly Report on Form 10-Q of Southern Security Life
Insurance Company;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
10.7 Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the small business issuer,
including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this quarterly report is
being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: November 14, 2003
By: George R. Quist
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. ss. 1350,
AS ENACTED BY SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Stephen M. Sill, certify that:
1. I have reviewed this quarterly Report on Form 10-Q of Southern Security Life
Insurance Company;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the small business issuer,
including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this quarterly report is
being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: November 14, 2003
By: Stephen M. Sill
Vice President, Treasurer and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. ss. 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Southern Security Life Insurance
Company (the "Company") on Form 10-Q for the period ending September 30, 2003,
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, George R. Quist, Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) the Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of
the Company.
George R. Quist
Chief Executive Officer
November 14, 2003
A signed original of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the electronic version of this written statement
required by Section 906, has been provided to Southern Security Life Insurance
Company and will be retained by Southern Security Life Insurance Company and
furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. ss. 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Southern Security Life Insurance
Company (the "Company") on Form 10-Q for the period ending September 30, 2003,
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Stephen M. Sill, Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) the Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of
the Company.
Stephen M. Sill
Chief Financial Officer
November 14, 2003
A signed original of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the electronic version of this written statement
required by Section 906, has been provided to Southern Security Life Insurance
Company and will be retained by Southern Security Life Insurance Company and
furnished to the Securities and Exchange Commission or its staff upon request.