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, 2002 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 XX 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 2,003,388
- ------------------------------------- ------------------------------
Title of Class Number of Shares Outstanding as
of September 30, 2002
SOUTHERN SECURITY LIFE INSURANCE COMPANY
FORM 10Q
QUARTER ENDED September 30, 2002
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements Page No.
- ------ --------
Statement of Operations - Nine and Three Months
ended September 30, 2001 and 2002 (unaudited)................3
Balance Sheet - September 30, 2002 (unaudited)
and December 31, 2001........................................4-5
Statement of Cash Flows - Nine Months ended September 30,
2002 and 2001 (unaudited)....................................6
Notes to Condensed Financial Statements......................7
Item 2
Management's Discussion and Analysis........................ 7-9
Item 3
Quantitative and Qualitative Disclosure of Market Risk.......9
Item 4
Controls and Procedures......................................9
PART II - OTHER INFORMATION
Other Information............................................10-12
Signature Page...............................................13
Certification................................................13-15
2
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Statement of Operations
(Unaudited)
Nine Months Ended September 30, Three Months Ended September 30,
2002 2001 2002 2001
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
Revenues:
- --------
Net insurance revenues $5,185,999 $5,206,038 $1,840,583 $1,804,409
Net investment income 2,881,643 2,782,242 970,488 944,831
----------- ----------- ----------- -----------
8,067,642 7,988,280 2,811,071 2,749,240
----------- ----------- ----------- -----------
Benefits, claims and expenses:
-----------
Benefits and claims 3,659,021 3,618,786 1,273,964 1,309,841
Amortization of deferred policy
acquisition costs 1,750,453 1,947,070 635,484 647,319
Operating expenses 2,749,540 2,659,710 919,175 853,995
----------- ----------- ----------- -----------
8,159,014 8,225,566 2,828,623 2,811,155
----------- ----------- ----------- -----------
Income (loss) before income taxes (91,372) (237,286) (17,552) (61,915)
Income tax expense (benefit) (18,512) (49,000) (2,000) (14,000)
----------- ----------- ----------- -----------
Net income (loss) $(72,860) $(188,286) $(15,552) $(47,915)
=========== =========== =========== ===========
Basic and diluted net income
(loss) per share of common stock $(.04) $(.10) $(.01) $(.03)
=========== =========== =========== ===========
Weighted average outstanding
common shares - basic and
diluted 1,971,592 1,907,989 2,003,388 1,907,989
=========== =========== =========== ===========
See accompanying notes to financial statements.
3
SOUTHERN SECURITY LIFE INSURANCE COMPANY
BALANCE SHEET
September 30, 2002 December 31,
(Unaudited) 2001
-------------- -----------
Assets:
Investments:
Fixed maturities held-to-maturity $4,025,550 $3,156,650
Securities available-for-sale,
at fair value:
Fixed maturities 18,516,129 21,364,731
Equity securities 258,692 372,183
Mortgage loans 2,252,553 2,268,292
Policy and student loans 8,003,000 8,181,223
Short-term investments 16,922,463 13,860,534
----------- -----------
49,978,387 49,203,613
Cash and cash equivalents 1,730,457 1,969,055
Accrued investment income 678,101 613,280
Deferred policy acquisition costs 13,110,180 12,974,390
Policyholders' account balances on
deposit with reinsurer 7,011,221 7,148,068
Reinsurance receivable 300,405 569,163
Receivables:
Agent balances 784,030 1,005,535
Other 775,523 722,075
Property and equipment, net, at cost 2,424,767 2,491,062
Investment in affiliate at cost 745,263 783,087
----------- -----------
Total assets $77,538,334 $77,479,328
=========== ===========
See accompanying notes to financial statements.
4
SOUTHERN SECURITY LIFE INSURANCE COMPANY
BALANCE SHEET (Continued)
September 30, 2002 December 31,
(Unaudited) 2001
-------------- -----------
Liabilities and Shareholders' Equity:
Liabilities:
Policy liabilities and accruals $3,091,469 $2,901,599
Future policy benefits:
Policyholders' account balances 47,142,612 47,601,259
Unearned revenue 4,582,816 4,694,563
Other policy claims and benefits
payable 1,325,977 1,147,403
Other policyholders' funds, dividend
and endowment accumulations 62,947 64,045
Funds held related to reinsurance
treaties 1,343,970 1,379,640
Note payable to related party 1,000,000 1,000,000
Due to affiliated companies 53,883 193,689
General expenses accrued 111,780 93,436
Unearned investment income 371,481 357,322
Other liabilities 241,035 247,665
Income taxes 1,060,371 895,437
----------- -----------
Total liabilities 60,388,341 60,576,058
----------- -----------
Shareholders' equity:
Common stock, $1 par, authorized
3,000,000 shares; issued and out-
standing, 2,003,388 shares in 2002
and 1,907,989 in 2001 2,003,388 1,907,989
Capital in excess of par 4,267,188 4,011,519
Accumulated other comprehensive
income (loss) 877,715 558,131
Retained earnings 10,001,702 10,425,631
----------- -----------
Total shareholders' equity 17,149,993 16,903,270
----------- -----------
Commitments and contingencies -- --
Total liabilities and
shareholders' equity $77,538,334 $77,479,328
=========== ===========
See accompanying notes to financial statements.
5
SOUTHERN SECURITY LIFE INSURANCE COMPANY
STATEMENT OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
2002 2001
---- ----
Net cash provided by operating activities $2,064,806 $1,945,792
----------- -----------
Cash flows (used in) provided by
investing activities:
Proceeds from maturity of
held-to-maturity securities 924,791 2,163,463
Proceeds from maturity of available
for-sale securities 3,300,000 1,064,816
Proceeds from sale of available for
sale equity securities 37,824 11,270
Purchase of investments held to
maturity (1,784,283) --
Mortgage loan repayments 15,739 20,509
Net change in short-term investments (3,061,929) (4,609,951)
Net change in policy and student loans 178,223 14,943
Acquisition of property and equipment (31,378) (78,009)
----------- -----------
Net cash used in investing activities (421,013) (1,412,959)
----------- -----------
Cash flow used in financing activities:
Receipts from universal life and
certain annuity policies credited
to policyholder account balances 3,700,109 3,811,132
Return of policyholder balances
on universal life and certain
annuity policies (5,582,500) (6,343,381)
----------- -----------
Net cash used in financing activities (1,882,391) (2,532,249)
----------- -----------
Decrease in cash and cash equivalents (238,598) (1,999,416)
Cash and cash equivalents at beginning
of period 1,969,055 2,513,668
----------- -----------
Cash and cash equivalents at
end of period $1,730,457 $514,252
=========== ===========
See accompanying notes to financial statements.
6
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Notes to Condensed Financial Statements
September 30, 2002
(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 2001 Annual Report on Form 10-K for the fiscal year ended
December 31, 2001 (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, 2002 and 2001, total comprehensive
income was $246,724 and $471,814, respectively. For the three months ended
September 30, 2002 and 2001, total comprehensive income was $194,693 and
$253,661 respectively.
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.
In recent years, the Company has primarily issued two types of insurance
products: universal life 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.
An additional source of income to the Company is investment income. The Company
invests those funds deposited by policyholders of 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.
7
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, 2002 compared to Nine Months Ended September 30,
2001
Total revenues increased by $80,000, or 1.0%, to $8,068,000 for the nine months
ended September 30, 2002, from $7,988,000 for the nine months ended September
30, 2001. Contributing to this increase was a $100,000 increase in net
investment income.
Net insurance revenues decreased by $20,000, or .4%, to $5,186,000 for the nine
months ended September 30, 2002, from $5,206,000 for the nine months ended
September 30, 2001. This decrease was primarily the result of the declining
sales of the Company's universal life business.
Net investment income increased by $100,000, or 3.6%, to $2,882,000 for the nine
months ended September 30, 2002, from $2,782,000 for the nine months ended
September 30, 2001. This increase was due to additional rental income from new
tenants in the Company's office building.
Benefits and claims increased by $40,000, or 1.1%, to $3,659,000 for the nine
months ended September 30, 2002, from $3,619,000 for the comparable period in
2001. This increase was primarily due to an increase in death claims.
Amortization of deferred policy acquisition costs decreased by $197,000, or
10.1%, to $1,750,000 for the nine months ended September 30, 2002, from
$1,947,000 for the comparable period in 2001. This decrease was in line with
actuarial assumptions.
Operating expenses increased by $90,000, or 3.4%, to $2,750,000 for the nine
months ended September 30, 2002, from $2,660,000 for the same period in 2001.
This increase was primarily the result of additional legal fees expended for
litigation purposes.
Third Quarter of 2002 Compared to Third Quarter of 2001
Total revenues increased by $62,000, or 2.2%, to $2,811,000 for the three months
ended September 30, 2002, from $2,749,000 for the three months ended September
30, 2001. Contributing to this increase was a $37,000 increase in net insurance
revenues and a $25,000 increase in net investment income.
Net insurance revenues increased by $37,000, or 2.0%, to $1,841,000 for the
three months ended September 30, 2002, from $1,804,000 for the comparable period
in 2001. This increase was primarily the result of an increase in the
amortization of unearned revenue to the Company's current actuarial assumptions.
Net investment income increased by $25,000, or 2.7%, to $970,000 for the three
months ended September 30, 2002, from $945,000 for the comparable period in
2001. This increase was due to additional rental income from new tenants in the
Company's office building.
Benefits and claims decreased by $36,000, or 2.7%, to $1,274,000 for the three
months ended September 30, 2002, from $1,310,000 for the comparable period in
2001. This decrease was primarily due to a decrease in policyholder reserves.
Amortization of deferred policy acquisition costs decreased by $12,000 or 1.8%,
to $635,000 for the three months ended September 30, 2002, from $647,000 for the
comparable period in 2001. The decrease was primarily due to the adjustment of
the amortization rate to the Company's current actuarial assumptions.
8
Operating expenses increased by $65,000, or 7.6%, to $919,000 for the three
months ended September 30, 2002, from $854,000 for the comparable period in
2001. This increase was primarily the result of additional legal fees expended
for litigation purposes.
Liquidity and Capital Resources
The Company attempts to match the duration of invested assets with its
policyholder liabilities. The Company may sell investments other than those
held-to-maturity in the portfolio to help in this timing; however, to date, that
has not been necessary. The Company purchases short-term investments on a
temporary basis to meet the expectations of short-term requirements of the
Company's products. The Company's investment philosophy is intended to provide a
rate of return which will persist during the expected duration of policyholder
liabilities regardless of future interest rate movements.
The Company's investment policy is to invest predominantly in fixed maturity
securities, mortgage loans, and warehouse mortgage loans on a short-term basis
before selling the loans to investors in accordance with the requirements and
laws governing life insurance companies. Bonds owned by the Company amounted to
$22,542,000 as of September 30, 2002, as compared to $24,522,000 as of December
31, 2001. This represents 45% and 50% of the total investments as of September
30, 2002 and December 31, 2001, respectively. Generally, all bonds owned by the
Company are rated by the National Association of Insurance Commissioners. Under
this rating system, there are nine categories used for rating bonds. At
September 30, 2002, and at December 31, 2001, the Company had investments in
bonds in rating categories three through nine, which are considered
non-investment grade, of $482,000.
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 September 30, 2002
and December 31, 2001, the Company exceeded the regulatory criteria.
Lapse rates measure the amount of insurance terminated during a particular
period. The Company's lapse rate for life insurance in 2001 was 13.8% as
compared to a rate of 16.1% for 2000. The 2002 lapse rate is approximately the
same as 2001.
At September 30, 2002, $8,394,000 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, 2001.
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 a
date within 90 days of the filing of this report) 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.
9
Part II Other Information:
Item 1. Legal Proceedings
An action was brought against the Company in July 1999 by Dorothy
Ruth Campbell in the Circuit Court of Escambia County, Alabama.
The action arises out of a denial of coverage under a $10,000
insurance policy. The claims are for breach of contract, bad
faith and fraudulent misrepresentation. In the action, Campbell
seeks compensatory and punitive damages plus interest. The
Company has filed its response to the complaint and certain
discovery has taken place. A motion for summary judgment filed on
behalf of the Company was denied. A trial date has yet to be set
as the Company continues to vigorously defend the matter.
An action was brought against the Company by National Group
Underwriters, Inc. ("NGU") in state court in the State of Texas.
The case was removed by the Company to the United States District
Court for the Northern District of Texas, Fort Worth Division,
with Civil No. 4:01-CV-403-E. An Amended Complaint was filed on
or about July 18, 2001. The Amended Complaint asserts that NGU
had a contract with the Company wherein NGU would submit
applications for certain policies of insurance to be issued by
the Company. It is alleged that disputes have arisen between NGU
and the Company with regard to the calculation and payment of
certain advanced commissions as well as certain production
bonuses.
NGU alleged that it "has been damaged far in excess of the
$75,000 minimum jurisdictional limits of this Court." NGU also
seeks attorney's fees and costs as well as prejudgment and
postjudgment interest. A second amended complaint and a third
amended complaint 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 has counterclaimed for what it claims to be a
debit balance owing to it pursuant to the relationship between
the parties with the counterclaim seeking a substantial amount
from NGU (the amount potentially subject to reduction as premiums
are received). The Company is also seeking to recover attorney's
fees and costs, as well punitive damages on three of its causes
of action. The change of venue motion of the Company was denied.
Certain discovery has taken place. By stipulation of the parties,
the case was dismissed without prejudice. 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. Further discovery involving the parties is
anticipated. The Company intends to vigorously defend the matter
as well as prosecute its counterclaims.
An action was brought by Bernice Johnson against the Company in
May, 2002 in the Circuit Court of Jefferson County, Alabama,
Civil Action No. CV02 2963. The face amount of coverage under the
policy is $15,000. The insured died in July 2001. Claims are made
for non-payment of the policy amount. The claims for relief
include misrepresentation, mental anguish and emotional distress,
fraud, intentional and bad faith non-payment of the benefit,
intentional and bad faith failure to investigate the claim for
benefits, reckless and negligent and wanton action relative to
misrepresentation and/or concealment of facts, negligence and the
wanton hiring, training and supervision of agent. Compensatory
and punitive damages are sought along with interest and costs. An
answer has been filed by the Company and discovery is in process.
The Company is not a party to any other legal proceedings outside
the ordinary course of the Company's business or to any other
legal proceedings which, if adversely determined, would have a
material adverse effect on the Company or its business.
Item 2. Changes in Securities
NONE
Item 3. Defaults Upon Senior Securities
NONE
10
Item 4. Submission of Matters to a Vote of Security Holders
At the annual stockholders meeting held on July 23, 2002, the
following matters were acted upon: (i) eight directors consisting
of George R. Quist, J. Lynn Beckstead Jr., Scott M. Quist,
Charles L. Crittenden, Dr. Robert G. Hunter, H. Craig Moody, G.
Robert 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,
1,706,212 votes were cast in favor of election, 866 votes were
cast against election and there were no abstentions; for J. Lynn
Beckstead Jr., 1,705,960 votes were cast in favor of election,
1,496 votes were cast against election and there were no
abstentions; for Scott M. Quist, 1,705,960 votes were cast in
favor of election, 1,118 votes were cast against election and
there were no abstentions; for Charles L. Crittenden, 1,706,212
votes were cast in favor of election and 866 votes were cast
against election and there were no abstentions; for Dr. Robert G.
Hunter, 1,706,212 votes were cast in favor of election, 866 votes
cast against election and there were no abstentions; for H. Craig
Moody, 1,705,582 votes were cast in favor of election, 1,496
votes cast against election and there were no abstentions; for G.
Robert Quist 1,750,960 votes were cast in favor of election and
1,118 votes were cast against election and there were no
abstentions; for Norman G. Wilbur, 1,706,212 votes were cast in
favor of election, 866 votes were cast against election and there
were no abstentions; and (ii) the appointment of Tanner + Co., as
the Company's independent accountants for the fiscal year ended
December 31, 2002, was ratified (with 1,706,847 votes cast for
appointment, 231 votes against appointment and there were no
abstentions).
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3. Articles of Incorporation, as amended, and By-laws, 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.A Revolving Financing Agreement between the Company and the Student
Loan Marketing Association, dated September 19, 1996,
incorporated by reference from Annual Report on Form 10-K for
fiscal year ended December 31, 1997.
B. 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.
C. Agency Agreement between the Company and Insuradyne Corporation
incorporated by reference from Annual Report on Form 10-K for
fiscal year ended December 31, 1993.
D. 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.
E. Agency Agreement between the Company and Security National
Mortgage Company dated December 28, 1998 incorporated by
reference from Annual Report on Form 10-K for fiscal year ended
December 31, 1999.
F. 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.
11
99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2 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
12
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, 2002 By: George R. Quist,
----------------
Chairman of the Board,
Chief Executive Officer
(Principal Executive Officer)
DATED: November 14, 2002 By: Stephen M. Sill
---------------
Vice President, Treasurer and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
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-14 and 15d-14) for the registrant and have:
(a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
(c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
13
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 14, 2002
By: George R. Quist
Chairman of the Board,
Chief Executive Officer
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-14 and 15d-14) for the registrant and have:
(a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
(c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 14, 2002
By: Stephen M. Sill
Vice President, Treasurer and
Chief Financial Officer
14
EXHIBIT 99.1
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 10Q for the period ending September 30, 2002, as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, George R. Quist, Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. 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, 2002
EXHIBIT 99.2
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 10Q for the period ending September 30, 2002, as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Stephen M. Sill, Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. 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, 2002
15