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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 June 30, 2004 Commission File Number: 2-35669
- ------------------------------- -------------------------------
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Exact Name of Registrant.
FLORIDA 59-1231733
- ----------------------------------- --------------------------
(State or other jurisdiction of (IRS Identification Number)
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 2,105,235
- ------------------------------------- ----------------------------
Title of Class Number of Shares Outstanding
as of June 30, 2004
SOUTHERN SECURITY LIFE INSURANCE COMPANY
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements Page No.
- ------ --------
Statement of Operations - Six and Three Months
ended June 30, 2004 and 2003 (unaudited).................3
Balance Sheet - June 30, 2004 (unaudited)
and December 31, 2003..................................4-5
Statement of Cash Flows - Six Months ended June 30,
2004 and 2003 (unaudited)................................6
Notes to Condensed Financial Statements..................7
Item 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations........ 8-10
Item 3
Quantitative and Qualitative Disclosures About
Market Risk.............................................11
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)
Six Months Ended Three Months Ended
June 30, June 30, June 30 June 30,
2004 2003 2004 2003
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues:
Net insurance revenues $3,799,263 $3,580,902 $1,883,481 $1,806,191
Net investment income 1,200,870 1,222,508 662,339 613,171
Related party interest income 726,458 802,755 343,989 410,694
----------- ----------- ----------- -----------
5,726,591 5,606,165 2,889,809 2,830,056
----------- ----------- ----------- -----------
Benefits, claims and expenses:
- -----------------------------
Benefits and claims 2,781,731 2,759,010 1,342,179 1,417,214
Amortization of deferred policy
acquisition costs 994,693 1,064,447 542,205 664,370
Related party operating expenses 1,544,630 1,544,630 772,438 772,438
Operating expenses 520,830 159,546 241,100 9,265
----------- ----------- ----------- -----------
5,841,884 5,527,633 2,897,922 2,863,287
----------- ----------- ----------- -----------
Income (loss) before income taxes (115,293) 78,532 (8,113) (33,231)
Income tax (expense) benefit 13,619 (16,583) 1,106 6,202
----------- ----------- ----------- -----------
Net income (loss) $(101,674) $61,949 $(7,007) $(27,029)
=========== =========== =========== ===========
Basic and diluted net income (loss)
per share of common stock $(.05) $.03 $.00 $(.01)
=========== =========== =========== ===========
Weighted average outstanding
common shares - basic and diluted 2,104,145 2,053,494 2,104,418 2,103,600
=========== =========== =========== ===========
See accompanying notes to condensed financial statements.
SOUTHERN SECURITY LIFE INSURANCE COMPANY
BALANCE SHEET
June 30, 2004 December 31,
(Unaudited) 2003
Assets: ------------- -----------
- -------
Investments:
Fixed maturities held-to-maturity $14,071,598 $3,691,064
Securities available-for-sale,
at fair value:
Fixed maturities 13,121,959 14,213,317
Equity securities 493,949 424,165
Mortgage loans 1,536,641 2,211,183
Policy and student loans 7,845,020 8,131,980
Short-term investments 14,300,429 17,497,249
----------- -----------
Total investments 51,369,596 46,168,958
----------- -----------
Cash and cash equivalents 225,153 7,075,394
Accrued investment income 601,034 462,846
Deferred policy acquisition costs 14,007,274 13,624,107
Policyholders' account balances on
deposit with reinsurer 6,765,401 6,795,983
Reinsurance receivable 326,452 442,574
Receivables:
Agent balances, net 510,743 461,133
Receivable from affiliates 1,317,891 28,091
Other 697,517 292,234
Property and equipment, net, at cost 2,279,037 2,313,119
----------- -----------
Total assets $78,100,098 $77,664,439
=========== ===========
See accompanying notes to condensed financial statements.
SOUTHERN SECURITY LIFE INSURANCE COMPANY
BALANCE SHEET (Continued)
June 30, 2004 December 31,
(Unaudited) 2003
Liabilities and Shareholders' Equity:
Liabilities:
Future policy benefits $4,772,084 $4,279,281
Policyholders' account balances 46,979,607 46,887,592
Unearned revenue 4,416,740 4,334,299
Other policy claims and benefits payable 1,228,766 798,050
Other policyholders' funds, dividend
and endowment accumulations 99,858 98,071
Funds held related to reinsurance treaties 1,288,832 1,294,589
Note payable to related parties 1,000,000 1,433,100
Due to affiliated insurance agency 107,260 57,065
General expenses accrued 87,543 81,942
Unearned investment income 357,704 355,650
Other liabilities 119,140 62,798
Income taxes 865,019 967,516
----------- -----------
Total liabilities 61,322,553 60,649,953
----------- -----------
Commitments and contingencies -- --
Shareholders' equity:
Common stock, $1 par, authorized
3,000,000 shares; issued and out-
standing, 2,105,235 shares in 2004 and
2,103,600 shares in 2003 2,105,235 2,103,600
Capital in excess of par 4,619,747 4,614,925
Accumulated other comprehensive income 700,519 835,784
Retained earnings 9,352,044 9,460,177
----------- -----------
Total shareholders' equity 16,777,545 17,014,486
----------- -----------
Total liabilities and shareholders' equity $78,100,098 $77,664,439
=========== ===========
See accompanying notes to condensed financial statements.
SOUTHERN SECURITY LIFE INSURANCE COMPANY
STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
2004 2003
---- ----
Net cash provided by (used in) operating activities $353,388 $560,084
------------ ------------
Cash flows used in investing activities:
Purchase of investments held-to-maturity (11,534,751) --
Proceeds from maturity of held-to-maturity securities 1,159,089 120,000
Proceeds from maturity of available for-sale securities 655,000 360,000
Mortgage loan repayments 7,928 15,581
Net change in short-term investments 3,196,820 (2,887,356)
Net change in policy and student loans 286,960 150,704
Acquisition of property and equipment (27,864) (7,706)
------------ ------------
Net cash used in investing activities (6,256,818) (2,248,777)
------------ ------------
Cash flow used in financing activities:
Receipts from universal life and
certain annuity policies credited
to policyholder account balances 2,126,748 2,189,873
Return of policyholder balances
on universal life and certain annuity policies (3,073,559) (3,286,627)
------------ ------------
Net cash used in financing activities (946,811) (1,096,754)
------------ ------------
Decrease in cash and cash equivalents (6,850,241) (2,785,447)
Cash and cash equivalents at beginning of period 7,075,394 3,067,284
------------ ------------
Cash and cash equivalents at end of period $225,153 $281,837
============ ============
See accompanying notes to condensed financial statements.
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Notes to Condensed Financial Statements
June 30, 2004 (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 2003 Annual Report on Form 10-K for the fiscal year ended
December 31, 2003 (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 six months ended June 30, 2004 and 2003, total comprehensive income
(loss) was $(236,939) and $371,047, respectively. For the three months ended
June 30, 2004 and 2003, total comprehensive income (loss) was $(359,610) and
$298,179, respectively.
3. Earnings (loss) per common share
The computation of basic earnings (loss) per common share is based on the
weighted average number of shares outstanding during each quarter.
The computation of diluted earnings per common share is based on the weighted
average number of shares outstanding during the quarter, plus the common stock
equivalents that would arise from the exercise of stock options outstanding,
using the treasury stock method and the average market price per share during
the quarter. There were no common stock equivalents outstanding during the six
months ended June 30, 2004 and 2003, and during the quarters ended June 30, 2004
and 2003. Common stock equivalents are not included in the diluted earnings
(loss) per share calculation when their effect is antidilutive.
4. Stock-based compensation
The Company measures expense for stock-based employee compensation using the
intrinsic value method and provides pro-forma disclosures of net income (loss)
and net income (loss) per common share as if the fair value method had been
applied in measuring compensation expense. For the six months ended June 30,
2004 and 2003, and for the quarters ended June 30, 2004 and 2003, there was no
stock-based employee compensation expense or pro-forma expense.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
----------------------------------------------------------------
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: 10-Pay Whole
Life with an Annuity Rider, final expense products and universal life.
The 10-Pay Whole Life with an Annuity Rider product is designed for the higher
education 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.
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.
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.
In connection with its higher education sales, the Company has 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 in debt and equity securities,
mortgage loans, and to warehouse mortgage loans 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
Six Months Ended June 30, 2004 Compared to Six Months Ended June 30, 2003
Total revenues increased by $121,000, or 2.1%, to $5,727,000 for the six months
ended June 30, 2004, from $5,606,000 for the six months ended June 30, 2003.
Contributing to this increase was a $218,000 increase in net insurance revenues
offset by a $98,000 decrease in net investment income and related party interest
income.
Net insurance revenues increased by $218,000, or 6.1%, to $ 3,799,000 for the
six months ended June 30, 2004, from $3,581,000 for the comparable period in
2003. This increase was primarily the result of an increase in traditional life
sales.
Net investment income and related party interest income decreased by $98,000, or
4.8%, to $1,927,000 for the six months ended June 30, 2004, from $2,025,000 for
the comparable period in 2003. This decrease was due to a reduction in
investment yield due to a reduction in higher yielding short-term investments.
Benefits and claims increased by $23,000, or 0.8%, to $2,782,000 for the six
months ended June 30, 2004, from $2,759,000 for the comparable period in 2003.
This increase was primarily due to a reduction in death claims of $192,000
offset by an increase in future policy benefits of $221,000.
Amortization of deferred policy acquisition costs decreased by $70,000, or 6.6%,
to $995,000 for the six months ended June 30, 2004, from $1,065,000 for the
comparable period in 2003. This decrease in amortized expenses was in line with
actuarial assumptions.
Operating expenses increased by $361,000, or 226.4% to $521,000 for the six
months ended June 30, 2004, from $160,000 for the same period in 2003. This
increase was primarily the result of insurance recovery of legal fees in 2003
expended for litigation purposes and due to increased marketing expenses in line
with increased sales and premiums collected.
Second Quarter of 2004 Compared to Second Quarter of 2003
Total revenues increased by $60,000, or 2.1%, to $2,890,000 for the three months
ended June 30, 2004, from $2,830,000 for the three months ended June 30, 2003.
Contributing to this increase was a $77,000 increase in net insurance revenues
and a $49,000 increase in net investment income offset by a $67,000 decrease in
related party interest income.
Net insurance revenues increased by $77,000, or 4.3%, to $1,883,000 for the
three months ended June 30, 2004, from $1,806,000 for the comparable period in
2003. This increase was primarily the result of an increase in traditional life
sales.
Net investment income and related party interest income decreased by $18,000, or
1.7%, to $1,006,000 for the three months ended June 30, 2004, from $1,024,000
for the comparable period in 2003. This decrease was due to a reduction in
investment yield due to a reduction in higher yielding short-term investments.
Benefits and claims decreased by $75,000, or 5.3%, to $1,342,000 for the three
months ended June 30, 2004, from $1,417,000 for the comparable period in 2003.
This increase was primarily due to a reduction in death claims of $110,000
offset by an increase in future policy benefits of $35,000.
Amortization of deferred policy acquisition costs decreased by $122,000, or
18.4%, to $542,000 for the three months ended June 30, 2004, from $664,000 for
the comparable period in 2003. This decrease in amortized expenses was in line
with actuarial assumptions.
Operating expenses increased by $232,000, to $241,000 for the three months ended
June 30, 2004, from $9,000 for the same period in 2003. This increase was
primarily the result of insurance recovery of legal fees in 2003 expended for
litigation purposes and due to increased marketing expenses in line with
increased sales and premiums collected.
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 the warehousing of 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 $27,194,000 as of June 30, 2004, as compared to $17,904,000
at December 31, 2003. The Company has invested more of its short-term
investments in bonds. This represents 53% and 39% of the total investments as of
June 30, 2004 and December 31, 2003, 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
June 30, 2004, and at December 31, 2003, the Company had investments in bonds in
rating categories three through six, which are considered non-investment grade,
of $490,000 and $488,000, 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 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 June 30, 2004 and
December 31, 2003, 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 2003 was 10.7% as
compared to a rate of 11.9% for 2002. The 2004 lapse rate has been approximately
the same as 2003.
At June 30, 2004, $10,743,902 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 Disclosures about Market Risk
There have been no significant changes since the annual report Form 10-K filed
for the year ended December 31, 2003.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures - The Company's principal
executive officer and principal financial officer have reviewed and
evaluated the effectiveness of the Company's disclosure controls and
procedures (as defined in Rules 240.13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934 (the "Exchange Act") as of the end of the
period covered by this quarterly report. Based on that evaluation, the
principal executive officer and the principal financial officer have
concluded that the Company's disclosure controls and procedures are
effective, providing them with material information relating to the Company
as required to be disclosed in the reports the Company files or submits
under the Exchange Act on a timely basis.
(b) Changes in internal controls - There were no significant changes in the
Company's internal controls over financial reporting or in other factors
that could significantly affect the Company's internal controls and
procedures subsequent to the date of their most recent evaluation, nor were
there any significant deficiencies or material weaknesses in the Company's
internal controls. As a result, no corrective actions were required or
undertaken.
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
was alleged that disputes had arisen between NGU and the Company with regard to
the calculation and payment of certain 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, which 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 (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 in the
counterclaim.
Following initial discovery, the federal case was dismissed by 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 those in
federal court, which claims of NGU (estimated to be $2,133,625 through September
30, 2004) include fraudulent inducement relative to entering into a contract,
breach of contract as to commissions and production bonuses as well as policy
fees, certain dues and debits of other agents, attorney's fees and exemplary
damages as well as seeking an accounting with the appointment of an auditor and
contesting the interest charges. Certain discovery has taken place, including
depositions, since the filing again in state court and further discovery is in
process and is anticipated. The Company filed a motion for partial summary
judgment with respect to certain items in the case, which motion was denied. The
Company anticipates filing another motion for partial summary judgment prior to
trial. A trial is presently set for October 2004. The Company intends to
vigorously defend the matter as well as prosecute its counterclaim.
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 and Use of Proceeds
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
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.
10.7 Reinsurance Agreement between the Company and Security National Life
Insurance Company dated December 26, 2003, incorporated by reference
from Annual Report on Form 10-K for fiscal year ended December 31,
2003.
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: August 13, 2004 By: George R. Quist,
----------------
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
DATED: August 13, 2004 Stephen M. Sill
---------------
Vice President, Treasurer and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Exhibit 31.1
CERTIFICATIONS
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-15(e) and 15-d-15(e)) for the registrant to 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
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period
covered in which this 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 officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting.
Date: August 13, 2004
By: George R. Quist
Chairman of the Board and
Chief Executive Officer
Exhibit 31.2
CERTIFICATIONS
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-15(e) and 15-d-15(e)) for the registrant to 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
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period
covered in which this 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 officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting.
Date: August 13, 2004
By: Stephen M. Sill
Vice President, Treasurer and
Chief Financial 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 June 30, 2004, 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 results of operations of the Company.
George R. Quist
Chief Executive Officer
August 13, 2004
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 June 30, 2004, 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 results of operations of the Company.
Stephen M. Sill
Chief Financial Officer
August 13, 2004