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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003

OR

¨    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                 

Commission file number 0-23375

GE Financial Assurance Holdings, Inc.

(Exact name of registrant as specified in its charter)

(804) 281-6000

(Registrant’s telephone number, including area code)

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 by check mark whether the registrant is an accelerated filed (as defined in Rule 12b-2 of the Act). Yes ¨    No x

At August 1, 2003, 1,000 shares of common stock with a par value of $1.00 were outstanding. The common stock of GE Financial Assurance Holdings, Inc. is not publicly traded.

REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF  FORM 10-Q AND IS THEREFORE FILING THIS FORM 10-Q WITH THE REDUCED DISCLOSURE FORMAT.

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PART 1 – FINANCIAL INFORMATION

Item 1. Financial Statements

GE FINANCIAL ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES

Condensed, Consolidated Statements of Current and Retained Earnings

(Dollar amounts in millions)

(Unaudited)

See Notes to Condensed, Consolidated Financial Statements.

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Item 1. Financial Statements (continued)

GE FINANCIAL ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES

Condensed, Consolidated Statements of Financial Position

(Dollar amounts in millions)

See Notes to Condensed, Consolidated Financial Statements.

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Item 1. Financial Statements (continued).

GE FINANCIAL ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES

Condensed, Consolidated Statements of Cash Flows

(Dollar amounts in millions)

(Unaudited)

See Notes to Condensed, Consolidated Financial Statements.

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Item 1. Financial Statements (continued).

GE FINANCIAL ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES

Condensed, Consolidated Statements of Current and Retained Earnings

(Dollar amounts in millions)

(Unaudited)

In April 2002, GE Edison Life Insurance Company (“GE Edison”) acquired Saison Life Insurance Company Limited (“Saison Life”) from Credit Saison Co., Ltd., Saison Group, Ltd. and its other shareholders (“Saison Acquisition”) for 7.8 billion yen, or approximately $61 million, representing 12.8 billion yen of payments to shareholders less 5.0 billion yen of contingent debt. On the date of acquisition, Saison Life had approximately $4.3 billion of assets, including $2.4 billion of cash and $1.9 billion of other assets, and $4.3 billion of liabilities and equity, including $82 million of perpetual subordinated debt (included in minority interest). Results of operations are reflected in condensed, consolidated financial statements from the date of acquisition.

The condensed, consolidated quarterly financial statements are unaudited. These statements include all adjustments (consisting of normal recurring accruals) considered necessary by management to present a fair statement of the results of operations, financial position and cash flows. The results reported in these condensed, consolidated quarterly financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. The condensed, consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and related notes contained in our annual report on Form 10-K for the fiscal year ended December 31, 2002.

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These businesses, classified as held for sale on the balance sheet, comprise almost all of the Japan and Auto and Home Insurance Segments. Summarized financial information, net of assets expected to be included in the pre-closing dividend, is set forth below:

The Retirement Income and Protection segment provides products that include investment products (including fixed, variable and income annuities, institutional stable value products and distribution of mutual funds), life insurance and long term care insurance. The Japan segment includes life insurance, certain annuity products and supplemental health insurance provided in the Japanese market. The Mortgage Insurance segment provides protection to mortgage lenders against losses from mortgage defaults. The Auto and Home Insurance segment primarily provides private passenger auto insurance. Corporate and Other includes small group insurance and

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affinity marketing that are not sufficiently material on an individual basis to warrant separate disclosure, as well as other corporate activities.

The following is a summary of reporting segment activity:

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The following is a summary of assets by operating segment:

Under SFAS 142, we were required to test all existing goodwill for impairment as of January 1, 2002, on a “reporting unit” basis. A reporting unit is an operating segment unless, at businesses one level below that operating segment (the “component” level), discrete financial information is prepared and regularly reviewed by management, in which case the component is the reporting unit.

A fair value approach is used to test goodwill for impairment. An impairment charge is recognized for the amount, if any, by which the carrying amount of goodwill exceeds its fair value. Fair values of reporting units and the related fair values of their respective goodwill were established using discounted cash flows. When available and as appropriate, comparative market multiples were used to corroborate results of the discounted cash flows.

The result of testing our goodwill for impairment in accordance with SFAS 142, as of January 1, 2002, was a non-cash charge of $539 million ($380 million after tax), which is reported in the caption “Cumulative effect of change in accounting principle, net of tax.” All of the charges relate to the Auto and Home Insurance segment. The primary factor resulting in the impairment charge was increased price competition in the auto insurance industry. No impairment charge was appropriate under the FASB’s previous goodwill impairment standard, which was based on undiscounted cash flows.

Intangibles Subject to Amortization

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Amortization expense related to intangible assets, excluding goodwill, for the second quarter of 2003 and 2002 was $78 million and $64 million, respectively, and for the first six months of 2003 and 2002 was $162 million and $133 million, respectively. The estimated percentage of the December 31, 2002 net PVFP balance before the effect of unrealized investment gains or losses and adjusted for assets held for sale (See Note 4), to be amortized over each of the next five years, is as follows:

Amortization expenses for PVFP in future periods will be affected by acquisitions, dispositions, realized capital gains/losses or other factors affecting the ultimate amount of gross profits realized from certain lines of business. Similarly, future amortization expenses for other intangibles will depend on future acquisitions, dispositions and other business transactions.

Goodwill

(a) Other adjustments include final purchase accounting adjustments related to the Saison Acquisition and foreign exchange translation adjustments of $40 million, offset by a reduction of $(776) million of goodwill which has been reclassified as Assets Held For Sale (See Note 4).

We will consolidate approximately $2 billion of securitized assets at transition. Assets and liabilities in FIN 46 entities differ from other consolidated assets and liabilities, thus our future financial statements will distinguish assets and liabilities that are included solely as a result of FIN 46. Because we will not sell any additional assets to these consolidated FIN 46 entities, these balances will decrease as the assets mature. Our July 1, 2003, consolidation of FIN 46 entities had no transition effect on earnings.

In April 2003, the Financial Accounting Standards Board issued SFAS 133 Implementation Issue No. B36, Modified Coinsurance Arrangements with Debt Instruments that Incorporate Credit Risk Exposures that are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under those Instruments, which is effective for us on October 1, 2003. In summary, B36 states that modified coinsurance arrangements—where the ceding insurer withholds funds—may include an embedded derivative that must be bifurcated from the host instrument. We are currently evaluating the effect that this guidance may have on our financial statements; however, based on preliminary analysis performed, we do not believe it will materially impact our financial position.

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In July 2003 the American Institute of Certified Public Accountants issued Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts, which we intend to adopt on January 1, 2004. The impact on our consolidated financial statements is not known at this time.

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I tem 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition

THREE MONTHS ENDED JUNE 30, 2003 COMPARED WITH THE THREE MONTHS ENDED JUNE 30, 2002

Operating Results

Premiums increased $150 million, or 9.3%, to $1,768 million for the three month period ended June 30, 2003 from $1,618 million for three month period ended June 30, 2002. The increase is primarily a result of premiums from the continued growth in certain whole life products, long-term care contracts, and higher sales of life contingent structured settlements. These increases were partially offset by a slight decline in renewals of term life contracts and a decrease in our Mortgage Insurance segment related to higher levels of ceded premiums, as well as higher lapse rates associated with a high level of mortgage refinancings given the low interest rate environment.

Net investment income increased $92 million, or 8.5%, to $1,180 million for the three month period ended June 30, 2003 from $1,088 million for the three month period ended June 30, 2002. The increase was primarily attributable to higher levels of average invested assets ($87.0 billion for the three month period ended June 30, 2003 vs. $76.8 billion for the three month period ended June 30, 2002). This increase was partially offset by a decrease in weighted average yields to 5.47% for the three month period ended June 30, 2003 from 5.64% for the three month period ended June 30, 2002 due to the overall declining interest rate environment.

Net realized investment gains/(losses) increased $166 million to a loss of $(45) million for the three month period ended June 30, 2003 from a loss of $(211) million for the three month period ended June 30, 2002. Investment gains are comprised of gross investment gains and gross investment (losses). For the three month period ended June 30, 2003, gross gains and (losses) were $148 million and $(193) million, respectively. For the three month period ended June 30, 2002, gross gains and (losses) were $219 million and $(430) million, respectively. Realized losses in the second quarter of 2003 include impairments of $72 million comprised primarily of debt and equity securities. The realized losses in 2002 include the Company’s portfolio losses on securities issued by WorldCom, Inc. and its affiliates of $167 million ($110 million net of tax).

Other income decreased $16 million, or 6.8%, to $218 million for the three month period ended June 30, 2003, from $234 million for the three month period ended June 30, 2002. Other income is principally comprised of insurance charges made against universal life contracts, revenues from sales of income protection packages, fees assessed against policyholder account values, surrender fees, other fee income, and commission income. The decrease in the three month period ended June 30, 2003 was primarily attributable to lower surrender fees and a decline in club membership revenues.

Benefits and other changes in policy reserves includes both activity related to future policy benefits on long-duration life and health insurance products as well as claims costs incurred during the year under these contracts and mortgage insurance and property and casualty products. These amounts increased $145 million, or 10.5%, to $1,528 million for the three month period ended June 30, 2003 from $1,383 million for the three month period ended June 30, 2002. This increase in benefits is primarily the result of growth in sales of certain whole-life products, long-term care policies, structured settlements, and certain deferred annuities. This increase was partially offset by a decrease in benefits on term life contracts.

General expenses decreased $30 million to $701 million for the three month period ended June 30, 2003 from $731 million for the three month period ended June 30, 2002. This decrease is primarily related to cost savings initiatives and integration and consolidation activities.

Amortization of intangibles increased $14 million, or 22.0%, to $78 million for the three month period ended June 30, 2003 from $64 million for the three month period ended June 30, 2002. Our significant intangible asset consists of the present value of future profits (“PVFP”), representing the estimated future gross profit in acquired insurance and annuity contracts. Other intangibles subject to amortization include software and licenses. The increase is primarily related to PVFP amortization which fluctuates based on the emergence of profits.

Change in deferred acquisition costs, net decreased by $40 million, or 19.2%, to $168 million for the three month period ended June 30, 2003 from $208 million for the three month period ended June 30, 2002. The decrease is primarily due to an increase in amortization on our long-term care and term life insurance products.

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Provision for income taxes increased $129 million to $192 million for the three month period ended June 30, 2003 from $63 million for the three month period ended June 30, 2002. The Company’s effective tax rate of 36.8% for the three month period ended June 30, 2003 was 15.3 percentage points higher than the effective tax rate of 21.5% for the comparable period ended June 30, 2002. This increase is primarily attributable to the non-recurring reduction of certain deferred tax liabilities in 2002, to the establishment of a valuation allowance on foreign losses, the reduction of tax exempt income, and an increase in state tax expense in 2003.

SIX MONTHS ENDED JUNE 30, 2003 COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 2002

Operating Results

Premiums increased $338 million, or 10.6%, to $3,512 million for the first six months of 2003 from $3,174 million for the first six months of 2002. This increase is primarily related to premiums from the Saison Acquisition, which contributed $109 million in premiums. Continued growth in the number of long-term care contracts in force and higher sales of life contingent structured settlements also contributed to the increase. These increases were partially offset by a decline in renewals of term life contracts and a decrease in premiums in our Mortgage Insurance segment related to higher levels of ceded premiums, as well as higher lapse rates associated with a high level of mortgage refinancings given the low interest rate environment.

Net investment income increased $126 million, or 5.9% to $2,266 million for the first six months of 2003 from $2,140 million for the first six months of 2002. The increase was primarily attributable to higher levels of average invested assets ($86.0 billion in first six months of 2003 vs. $75.4 billion in first six months of 2002). This increase was partially offset by a decrease in weighted average yields to 5.27% for the first six months of 2003 from 5.57% for the first six months of 2002 due to the overall declining interest rate environment. The Saison Acquisition provided for a $32 million increase in net investment income year over year due to the timing of the Acquisition in April of 2002.

Net realized investment gains (losses) increased $58 million to a gain of $1 million for the first six months of 2003 from a loss of $(57) million for the first six months of 2002. Investment gains are comprised of gross investment gains and gross investment (losses). For the first six months of 2003, gross gains and (losses) were $353 million and $(352) million, respectively. For the first six months of 2002, gross gains and (losses) were $530 million and $(587) million, respectively. Realized losses in 2003 include $151 million of impairments, primarily related to debt and equity securities. Realized losses in 2002 include the Company’s portfolio losses on securities issued by WorldCom, Inc. and its affiliates of $167 million ($110 million net of tax). These portfolio losses in 2002 were partially offset by realized gains on the securitization of certain financial assets of $29 million and a gain on certain real estate held for investment of $24 million.

Other income decreased $49 million, or 9.8%, to $449 million in the first six months of 2003 from $498 million in the first six months of 2002. The decrease in the first six months of 2003 was primarily attributable to a decline in club membership revenue and lower surrender fees.

Benefits and other changes in policy reserves includes both activity related to future policy benefits on long-duration life and health insurance products as well as claims costs incurred during the year under these contracts and mortgage insurance and property and casualty products. These amounts increased $383 million, or 13.9%, including $98 million related to the Saison Acquisition, to $3,144 million for the six month period ended June 30, 2003 from $2,761 million for the six month period ended June 30, 2002. The increase in benefits is primarily the result of growth in sales of long-term care and structured settlement products.

General expenses decreased $62 million to $1,411 million for the six month period ended June 30, 2003 from $1,473 million for the three month period ended June 30, 2002. This decrease is primarily related to reduced compensation and benefit costs, cost savings initiatives and integration and consolidation activities.

Amortization of intangibles increased $29 million, or 21.8%, to $162 million for the first six months of 2003 from $133 million for the first six months of 2002. Our significant intangible asset consists primarily of PFVP, as well as software and licenses. The increase is related to PVFP amortization primarily as a result of the Saison Acquisition.

Provision for income taxes increased $69 million or 27.3% to $322 million for the six-month period ended June 30, 2003 from $253 million for the comparable period ended June 30, 2002. The Company’s effective tax rate of 34.0% for the six-month period ended June 30, 2003 was 4.5 percentage points higher than the effective tax rate of 29.5%

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for the comparable period ended June 30, 2002. This increase is primarily attributable to the non-recurring reduction of certain deferred tax liabilities in 2002, to the establishment of a valuation allowance on foreign losses, the reduction of tax exempt income, and an increase in state tax expense in 2003. This increase was partially offset by favorable developments related to the examination of our federal income tax returns.

Financial Condition

Total assets increased $7.8 billion, or 7.1%, at June 30, 2003 from December 31, 2002. Total investments decreased $10.4 billion or 12.3%. The decrease was primarily the result of a reclassification of $16.4 billion of investments to assets held for sale (See Note 4). Absent this reclassification, investments would have increased $8.6 billion. The increase that would have occurred absent the reclassification is primarily related to the market impact of investments securities as well as net purchases of securities funded by operating cash flows, cash received under securities lending programs and net investment income, partially offset by mortgage and policy loan repayments. Assets other than investments decreased $0.8 billion. This decrease was primarily the result of a decrease in cash and cash equivalents offset by a slight increase in separate account assets.

Total liabilities increased $4.8 billion, or 5.1%, at June 30, 2003 from December 31, 2002. Future annuity and contract benefits decreased $14.6 billion or 20.1%. The decrease was primarily the result of a reclassification of $16.4 billion of future annuity and contract benefits to assets held for sale (See Note 4). Absent this reclassification, future annuity and contract benefits would have increased approximately $1.8 billion, or 2.4%, at June 30, 2003 from December 31, 2002. This increase is primarily the result of growth in our structured settlement and whole life type contracts. Other liabilities increased $3.0 billion primarily related to obligations under securities lending programs.

Portfolio Quality

We principally invest in investment grade debt and equity securities. The aggregate value of our debt and equity investments was $62.6 billion as compared to $74.0 billion at December 31, 2002. Gross unrealized gains and (losses) were $7.2 billion and $(0.7) billion, respectively, at June 30, 2003, including $2.4 billion and $(0.1) billion, respectively, related to assets held for sale (See Note 4). Goss unrealized gains and (losses) were $3.5 billion and $(1.5) billion, respectively, as of December 31, 2002. Market value for these purposes is defined by relevant accounting standards and should not be viewed as a forecast of future gains or losses. We estimate that available gains, net of hedging positions and estimated impairment of intangible and other insurance related assets, could be as much as $1.6 billion.

We regularly review the investment securities in our portfolio for impairment based on criteria that include the extent to which cost exceeds market value, the duration of that market decline and the financial health and specific prospects for the issuer. Of those securities whose carrying amount exceeds fair value at June 30, 2003, and based upon application of our accounting policy for impairment, approximately $175 million of portfolio value is at risk of being charged to earnings over the next 12 months. Impairment losses recognized for the first six months of 2003 were $151 million, primarily related to mutual fund and equity investments. Impairment losses recognized for the three month period ended June 30, 2003 were $72 million, primarily related to mutual fund and equity investments.

Forward Looking Statements

This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements which represent our belief regarding potential investment gains and losses. These statements are based on our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in global economic, business, competitive market and regulatory factors. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

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Item 4. Controls and Procedures

As required by Rule 13a-15(b), our management, including the Chief Executive Officer (serving as the principle executive officer) and Chief Financial Officer, conducted an evaluation as of the end of the period covered by this report, of the effectiveness of the company’s disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report. As required by Rule 13a-15(d), our management, including the Chief Executive Officer and Chief Financial Officer, also conducted an evaluation of the company’s internal control over financial reporting to determine whether any changes occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting. Based on that evaluation, there has been no such change during the quarter covered by this report.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The Company, like other insurance companies, is involved in lawsuits, including class action lawsuits. In some class action and other lawsuits involving insurance companies, substantial damages have been sought and/or material settlement payments have been made. Except for the McBride case described below, the ultimate outcome of which, and any effect on the Company, cannot be determined at this time, management believes that at the present time there are no pending or threatened lawsuits that are reasonably likely to have a material adverse impact on the Company’s Condensed Consolidated Financial Statements.

On November 1, 2000, GE Life and Annuity Assurance Company (“GE Life”) was named as a defendant in a lawsuit filed in Georgia state court related to the sale of universal life insurance policies (McBride v. Life Insurance Co. of Virginia dba GE Life and Annuity Assurance Co.). On December 1, 2000, we successfully removed the case to the United States District Court for the Middle District of Georgia. The complaint is brought as a class action on behalf of all persons who purchased certain universal life insurance policies from GE Life and alleges improper sales practices in connection with the sale of universal life policies. No class has been certified. On February 27, 2002, the court denied our motion for summary judgment. We have vigorously denied liability with respect to the plaintiff’s allegations and the ultimate outcome, and any effect on us, of the McBride litigation cannot be determined at this time.

Item 6. Exhibits and Reports on Form 8-K.

Exhibit 12 Computation of ratio of earnings to fixed charges.

Exhibit 31.1 CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2 CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

None.

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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.

Date: August 1, 2003

Date: August 1, 2003

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