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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003

Commission file number: 333-96595

MONY HOLDINGS, LLC

(Exact name of Registrant as specified in its charter)

1740 Broadway

New York, New York 10019

(212) 708-2000

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:    None

Securities registered pursuant to Section 12(g) of the Act:    None

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes  ¨    No   x

The aggregate market value of the membership interests of Registrant held by non-affiliates as of March 8, 2004 was $0, because all outstanding membership interests are owned by Registrant’s parent, The MONY Group Inc.

REDUCED DISCLOSURE FORMAT:

Registrant meets the conditions set forth in General Instruction (I)(1)(a) and (b) of Form 10-K and is therefore filing this form with the Reduced Disclosure Format.

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FORWARD-LOOKING STATEMENTS

The Company’s management has made in this report, and from time to time may make in its public filings and press releases as well as in oral presentations and discussions, forward-looking statements concerning the Company’s operations, economic performance, prospects and financial condition. Forward-looking statements include, among other things, discussions concerning the Company’s potential exposure to market risks, as well as statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. The Company claims the protection afforded by the safe harbor for forward-looking statements as set forth in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to many risks and uncertainties. Actual results could differ materially from those anticipated by forward-looking statements due to a number of important factors including the following: satisfaction of the closing conditions set forth in the merger agreement among AXA Financial, Inc., AIMA Acquisition Co. and The MONY Group Inc., including the MONY Group Inc.’s shareholders and regulatory approvals; a significant delay in the expected completion of, or failure to complete, the contemplated merger; the Company could experience losses, including venture capital losses; the Company could be subjected to further downgrades by rating agencies of the claims-paying ability and financial-strength ratings of the Company’s insurance subsidiaries; recent improvements in the equities markets may not be sustained into the future; the Company could have to accelerate amortization of deferred policy acquisition costs if market conditions deteriorate; the Company may be required to recognize in its earnings “other than temporary impairment” charges on its invested assets if market conditions and/or the issuer’s financial condition deteriorates; the Company could have to write off investments in certain securities if the issuers’ financial condition deteriorates; recent improvements in the equity markets may not be sustained in the future; actual death-claim experience could differ from the Company’s mortality assumptions; the Company could have liability from as-yet-unknown litigations and claims; larger settlements or judgments than the Company anticipates could result in pending cases due to unforeseen developments; and changes in laws, including tax laws, could affect the demand for the Company’s products. The Company does not undertake to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

STATUTORY FINANCIAL INFORMATION

Dividends from MONY Life Insurance Company (“MONY Life”) are the principal source of cash inflow which will enable MONY Holdings, LLC (“MONY Holdings”) to meet its debt obligations. See “Business — Overview”, “Business Summary of the Insured Notes” and “Business — Source of Payment” for further information. The ability of MONY Life to declare and pay MONY Holdings a dividend is governed by the Insurance Law of the State of New York. The Insurance Law of the State of New York permits a stock life insurance company to pay dividends each calendar year, without the prior approval of the superintendent of the insurance department, in an amount equal to the lesser of ten percent of its policyholders’ surplus as of the end of the preceding calendar year or the company’s net gain from operations for the preceding calendar year (not including realized capital gains), as determined in accordance with Statutory Accounting Practices prescribed or permitted by the Insurance Department of the State of New York. The law also provides that, if the company desires to distribute dividends to its shareholders in excess of the amount described in the preceding sentence, it may make such distribution only upon giving notice of its intention to declare such dividend, and the amount thereof, to the New York Superintendent no less than thirty days in advance of such distribution. The New York Superintendent may disapprove such distribution by giving written notice to such company within thirty days after such filing if he finds that the financial condition of the company does not warrant such distribution. Accordingly, to assist investors in evaluating MONY Life’s ability to pay dividends to MONY Holdings, presented herein are: (i) audited statutory financial statements of MONY Life as of and for the years ended December 31, 2003 and 2002, and (ii) management’s discussion and analysis of the statutory financial condition and results of operations of MONY Life as of and for the year ended December 31, 2003 as compared to the year ended December 31, 2002.

The statutory financial information presented herein is based on Statutory Accounting Practices, which are those accounting principles or practices prescribed or permitted by an insurer’s domiciliary state. Statutory

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Accounting Practices are set forth in the insurance laws, regulations and administrative rulings of each state, publications of the National Association of Insurance Commissioners and other documents and accordingly, a reconciliation of statutory financial information to financial information determined in accordance with accounting principles generally accepted in the United States of America would not be meaningful.

In addition, pursuant to the indenture, as defined in Part I — Business — Overview, dividends to MONY Holdings from MONY Life are required to be allocated between the Ongoing Businesses and the Closed Block Business (as defined herein). The amount of the dividend attributable to the Closed Block Business is required to be deposited in the Debt Service Coverage Account — Closed Block Business. As described in the indenture, the amount of the dividend deposited in the Debt Service Coverage Account — Closed Block Business generally is not available for dividend to the MONY Group until all of MONY Holdings’ obligations to pay principal, interest and other amounts on the Insured Notes issued under the indenture are fully extinguished. Under limited circumstances, if the fair value of the assets in the Debt Service Coverage Account exceeds amounts set forth in the indenture, such excess can become available for dividend to the MONY Group. The amount of such dividend attributable to the Ongoing Businesses will generally be available to MONY Holdings to pay dividends to the MONY Group. Accordingly, where applicable, financial information presented herein has been segregated between amounts attributable to the Ongoing Businesses and to the Closed Block Business to assist investors in evaluating the relative contributions to MONY Life’s dividend from the Ongoing Businesses and the Closed Block Business, respectively.

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PART I

Item 1. Business.

The information required by this Item is presented in a reduced disclosure format pursuant to General Instruction I to Form 10-K.

Overview

On February 27, 2002, MONY Holdings, LLC (“MONY Holdings”) was formed as a downstream, wholly-owned, holding company of The MONY Group Inc. (“MONY Group”). MONY Group formed MONY Holdings for the purpose of issuing debt tied to the performance of the Closed Block Business (as defined below) within MONY Life Insurance Company (“MONY Life”), a wholly-owned and principal operating subsidiary of MONY Group. On April 30, 2002, MONY Holdings commenced its operations and, through a structured financing tied to the performance of the Closed Block Business within MONY Life, issued $300 million of MONY Holdings’ Series A Floating Rate Insured Notes due 2017 (the “Original Notes”) in a private placement. In addition, MONY Group, pursuant to the terms of the structured financing, transferred all of its ownership interest in MONY Life to MONY Holdings. The Original Notes and the Exchange Notes (as described below) are senior, secured indebtedness and are governed by an indenture, dated as of April 30, 2002 (the “Indenture”), among MONY Holdings, Ambac Assurance Corporation (“Ambac”), MONY Group (solely for the limited purposes set forth therein), and Bank One Trust Company, N.A., as Trustee (the “Trustee”). MONY Holdings’ ability to meet its obligations under the Original Notes and the Exchange Notes is dependent upon the results of the Closed Block Business and the ability of MONY Life to dividend sufficient funds to MONY Holdings.

Under an exchange and registration rights agreement that MONY Holdings entered into in connection with the issuance of the Original Notes (the “Registration Rights Agreement”), MONY Holdings agreed to:

In the event MONY Holdings did not comply with its obligations under the Registration Rights Agreement, MONY Holdings agreed to pay liquidated damages in the form of additional interest to holders of the Insured Notes until such time that such obligations were complied with. These liquidated damages are not covered by the Insurance Policy that guarantees timely payment of principal and interest on the Insured Notes and the Exchange Notes.

As required under the Registration Rights Agreement, MONY Holdings filed the Exchange Offer Registration Statement on Form S-4 with the SEC, prior to the expiration of the 90 day period, relating to the issuance of its Series B Floating Rate Insured Notes due 2017 (the “Exchange Notes”), which constitute new notes substantially identical to the Original Notes and which evidence the same underlying indebtedness as the Original Notes. The Exchange Offer Registration Statement was not, however, declared effective by the SEC within the 180 day period. Accordingly, MONY Holdings was required to pay, and did pay, certain liquidated

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damages to the holders of the Original Notes through December 31, 2002 aggregating $0.1 million as required under the Registration Rights Agreement until the Exchange Offer Registration Statement was declared effective on February 14, 2003.

Following the effectiveness of the Exchange Offer Registration Statement, MONY Holdings conducted an exchange offer (the “Exchange Offer”) in accordance with the provisions of the Registration Rights Agreement pursuant to which MONY Holdings offered the Exchange Notes for the outstanding Original Notes. At the closing of the Exchange Offer, which occurred on March 26, 2003, the holders exchanged in the aggregate $145 million principal amount of the Original Notes for $145 million aggregate principal amount of newly issued Exchange Notes. The Exchange Notes were issued under and are entitled to the benefits of the Indenture. The Original Notes, together with the Exchange Notes, are hereinafter referred to as the “Insured Notes”.

MONY Holdings may issue additional series of notes until December 31, 2004, up to an aggregate principal amount of $150 million, subject to the satisfaction of conditions for each additional issuance required by the Indenture. MONY Holdings does not currently expect to issue any such additional notes.

MONY Holdings through MONY Life its direct and indirect wholly owned subsidiaries (MONY Holdings and its subsidiaries are collectively referred to herein as the “Company”), provides life insurance, annuities, corporate-owned and bank-owned life insurance (“COLI and BOLI”), mutual funds, securities brokerage, business and estate planning. The Company distributes its products and services through Retail and Wholesale distribution channels. The Company’s Retail distribution channels are comprised of (i) the career agency sales force operated by its principal life insurance operating subsidiary, and (ii) financial advisors and account executives of its securities broker dealer subsidiary. The Company’s Wholesale channel is comprised of (i) MONY Partners, a division of MONY Life, (ii) independent third party insurance brokerage general agencies and securities broker dealers and (iii) its corporate marketing team which markets COLI and BOLI products. For the year ended December 31, 2003, Retail distribution accounted for approximately 17.6%, and 42.6% of sales of protection and accumulation products, respectively, while Wholesale distribution accounted for 82.4% and 57.4% of sales of protection and accumulation products, respectively. The Company principally sells its products in all 50 of the United States, the District of Columbia, the U.S. Virgin Islands, Guam and the Commonwealth of Puerto Rico, and currently insures or provides other financial services to more than one million individuals. See Management’s Discussion and Analysis — Organization and Business.

Other than acting as a holding company of MONY Life and servicing the Insured Notes in accordance with the Indenture, MONY Holdings has no operations and engages in no other activities.

On September 17, 2003, MONY Group entered into an Agreement and Plan of Merger with AXA Financial, Inc. (“AXA Financial”) and AIMA Acquisition Co., which was subsequently amended on February 22, 2004 (hereafter referred to collectively as the “AXA Agreement”), pursuant to which MONY Group will become a wholly owned subsidiary of AXA Financial in a cash transaction valued at approximately $1.5 billion. Under the terms of the AXA Agreement, which has been approved by the boards of directors of AXA Financial and MONY Group, MONY Group’s shareholders will receive $31.00 for each share of MONY Group’s common stock. The acquisition contemplated by the AXA Agreement is subject to various regulatory approvals and other customary conditions, including the approval of MONY Group’s shareholders. A special meeting of MONY Group’s shareholders is scheduled for May 18, 2004 to vote on the proposed acquisition of MONY Group by AXA Financial. The transaction is expected to close in the second quarter of 2004. See Note 18 to the MONY Holdings and Subsidiary Consolidated Financial Statements for further information regarding MONY Group’s pending merger transaction with AXA Financial.

Summary of the Insured Notes

The Insured Notes will mature on January 21, 2017. Pursuant to the terms of the Indenture, annual scheduled amortization payments will begin on January 21, 2008. The Insured Notes accrue interest at an annual rate equal to three-month London InterBank Offered Rate (“LIBOR”) plus 0.55%. Interest on the Insured Notes

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is payable quarterly in arrears on each January 21, April 21, July 21 and October 21. Concurrent with the issuance of the Insured Notes, MONY Holdings entered into an interest rate swap contract (the Swap), which locked in a fixed rate of interest on this indebtedness at 6.44%. Including debt issuance costs of $7.4 million and the cost of the insurance policy (75 basis points per annum), which guarantees the scheduled principal and interest payments on the Insured Notes, the total effective interest rate on the indebtedness is 7.36%. See Note 22 to the MONY Holdings and Subsidiary Consolidated Financial Statements.

The Insured Notes are and will at all times be senior, secured indebtedness of MONY Holdings. Recourse in respect of the Insured Notes is limited to the collateral as described below under “Security Interest”, except in the limited circumstances described below for Deficiency Claims.

In connection with the issuance of the Insured Notes, MONY Life’s and MONY Holdings’ assets and liabilities have been allocated between the “Ongoing Businesses” (the “OB”) and the “Closed Block Business” (the “CBB”) of each of MONY Life and MONY Holdings pursuant to the terms of the Indenture. Below is a brief summary of MONY Life’s “closed block” and of certain of MONY Life’s and MONY Holdings’ assets and liabilities which have been allocated to the CBB and the OB.

Closed Block

Prior to its demutualization in 1998, MONY Life (formerly known as The Mutual Life Insurance Company of New York (“Mutual of New York”)) issued participating individual life insurance policies. Under these participating individual life insurance policies, policyholders are eligible to receive policyholder dividends as declared by the board of directors of MONY Life.

Under the New York Demutualization statute, a plan of reorganization of a mutual insurer must provide for the reasonable dividend expectations of owners of participating individual life insurance policies on which the company expects to pay experience-based dividends by the creation of a regulatory mechanism known as a “Closed Block.” The plan of reorganization (the “Plan of Reorganization”) of Mutual of New York complied with this requirement.

The MONY Life closed block (the “Closed Block”) was established for the purpose of providing, over time, for the reasonable dividend expectations of the holders of the Closed Block policies by allocating to the Closed Block assets to be used exclusively for the payment of the Closed Block liabilities.

The Closed Block assets consist of those assets allocated to the Closed Block by MONY Life as of December 31, 1997, cash flows from those assets, assets resulting from the reinvestment of those cash flows, net cash flows from the Closed Block policies including due premiums on the Closed Block policies and payment on policy loans, assets resulting from the investment of those cash flows, and accrued interest on any of the above assets. MONY Life cannot use the Closed Block assets for any purpose other than the payment of benefits on Closed Block policies (including policy dividends), certain taxes and assessments, without the prior approval of the Superintendent of Insurance of the State of New York. The Closed Block assets are assets of MONY Life and are subject to the same liabilities and the same priority of claims as MONY Life’s general account assets in the event of MONY Life’s rehabilitation or liquidation. The Closed Block is one component of CBB.

A further description of the Closed Block and the policies included in the Closed Block is set forth below under “The Closed Block”.

Closed Block Business

In addition to the Closed Block assets and Closed Block liabilities, which are within MONY Life and together comprise the statutory Closed Block, there are additional assets and liabilities held outside of the Closed

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Block that also support the policies included in the Closed Block. Those additional assets and liabilities consist of the following and, together with the Closed Block assets and Closed Block liabilities, constitute the CBB:

Ongoing Businesses

All of MONY Holdings’ remaining assets and liabilities outside of those defined as part of the CBB, constitute the OB.

Surplus and Related Assets

The Surplus and Related Assets (“SRA”) are those assets of MONY Life held outside the Closed Block to meet initial capital requirements related to the CBB within MONY Life as well as those assets that initially represent the difference between the assets of the Closed Block and the sum of liabilities of the Closed Block as designated by MONY Life on or prior to the initial date of issuance of the Original Notes. The SRA were approximately $1.7 billion on a statutory book value basis as of December 31, 2003.

The Closed Block is designed so that the cash flows and assets from the SRA should not be necessary to fund payments of Closed Block liabilities, including payment of dividends based on the experience of the Closed Block. MONY Life is not required to support the payment of dividends on Closed Block policies from its general funds, including the SRA. However, MONY Life could choose to provide such support, subject to its fiduciary duties to shareholders and its obligations to non-Closed Block policyholders, but would do so only for competitive purposes. The SRA are not further funded. The earnings on, and distribution of, the SRA over time will be a source of payment of the principal, interest and other amounts with respect to the Insured Notes. The use of SRA or earnings on them to pay Closed Block liabilities would reduce funds available for payment of principal, interest and other amounts with respect to the Insured Notes. Those payments, however, would constitute an event of default under the Insured Notes. The Closed Block assets will not be available to pay principal, interest or other amounts with respect to the Insured Notes.

The SRA are required to conform to the investment policy set forth in the Indenture.

Debt Service Coverage Account and Additional Reserve Account

As long as MONY Holdings remains obligated under the Insured Notes or has any outstanding obligations to Ambac, MONY Holdings is required to maintain an account controlled by the Trustee (the “Debt Serivce Coverage Account” or the “DSCA”) consisting of the following three sub-accounts: DSCA — Sub-account OB, DSCA — Sub-account OB (Deposit), DSCA — Sub-account CBB. The assets held in the sub-accounts will not be commingled with MONY Holdings’s general assets or the assets of the Trustee. MONY Holdings will deposit funds in each of the sub-accounts in accordance with the terms of the Indenture. Each of the three sub-accounts includes

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all earnings on amounts contained in that sub-account. The DSCA is pledged to the Trustee for the benefit of the holders of the Insured Notes and Ambac and Ambac Financial Services pursuant to the terms of the Indenture.

Pursuant to the terms of the Indenture, MONY Holdings may be required to create an additional reserve account in connection with the Insured Notes. If MONY Holdings determines that the value of the Closed Block assets expressed as a percentage of Closed Block liabilities has deviated by more than three percent from the ratios that MONY Holindgs has projected or it determines that the collateral held in the DSCA is less than the greater of 10 percent of the outstanding Insured Notes or the aggregate amounts required by the Indenture for the next four scheduled dates for payments of principal and interest, then, subject to certain limitations set forth in the Indenture, MONY Holdings will require MONY Life to stop making quarterly administrative payments required under the Indenture (“Administrative Payments”) and instead hold such funds in a book entry account in the CBB (the “Additional Reserve Account”). Upon the discontinuance of the conditions mandating payments to the Additional Reserve Account, MONY Holdings will cause MONY Life to release the Additional Reserve Account and transfer the amounts held in it to the OB within MONY Life.

Source of Payment

Without taking into account payments, if any, required to be made by Ambac under the financial guaranty insurance policy entered into in respect of the Insured Notes, as more fully described below under “Bond Insurer,” the cash and cash flows available to pay principal, interest and other amounts on the Insured Notes will be:

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In addition to the aforementioned cash flows and collateral, investors in the Insured Notes have limited recourse to MONY Holdings in the event of any default under the Insured Notes.

The amount of dividends attributable to the CBB is determined by applying the New York dividend regulation to the surplus and net gain from operations of MONY Life which is attributable to the CBB, subject to certain adjustments described in the indenture. All of these sources of cash flow are subject to restrictions and limitations further described in this Report and in the Indenture.

Bond Insurer

Ambac has issued a financial guaranty insurance policy guaranteeing the timely payment of scheduled principal and interest on the Insured Notes (the “Insurance Policy”), excluding any redemption premium. However, under the Insurance Policy, Ambac will not guarantee the payment of any redemption premium, the early repayment of principal on the Insured Notes as a result of acceleration or early redemption, taxes, payment of liquidated damages under the Registration Rights Agreement or shortfalls for withholding taxes. In addition, Ambac has issued a financial guaranty insurance policy guaranteeing certain of MONY Holdings’ obligations under the interest rate swaps relating to the Insured Notes (the “Swap Policy”), excluding any termination payments. Ambac will have the discretion to accelerate the Insured Notes if it makes payments under either policy.

Interest Rate Hedge

MONY Holdings has entered into interest rate swaps with Ambac Financial Services in order to hedge the anticipated interest rate risk under the Insured Notes. The interest rate swaps have been allocated to the CBB outside of the DSCA and outside the Closed Block. Net payments that MONY Holdings makes under the interest rate swaps relating to the Insured Notes, other than termination payments, are insured by Ambac under the Swap Policy.

Optional Redemption

MONY Holdings may, at its option, at any date for scheduled payment of principal and interest under the terms of the Insured Notes (a “Scheduled Payment Date”), redeem all or a portion of the Insured Notes for a redemption price payable in cash.

MONY Holdings would have redeemed the Insured Notes for a redemption price of 103.5% of the outstanding principal amount of the Insured Notes to be redeemed, if MONY Holdings had redeemed those Insured Notes on or before April 21, 2003. The redemption ratably to 100% on April 21, 2012 and remaining constant at 100% thereafter, together with interest accrued to — but not including — the date of redemption.

In all cases, the redemption price of each Note or portion of Note to be redeemed will not be less than 100% of the outstanding principal amount to be redeemed.

Regulatory Redemption

MONY Holdings may also, at its option upon the occurrence of a regulatory event described below, redeem all or a portion of the Insured Notes at any Scheduled Payment Date.

MONY Holdings will redeem the Insured Notes at a redemption price equal to 100% of the outstanding principal amount of the Insured Notes to be redeemed, together with interest accrued to — but not including — the date of redemption.

In all cases, the redemption price of each Note or portion of Note to be redeemed will not be less than 100% of the outstanding principal amount to be redeemed.

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A regulatory event that would trigger MONY Holdings’ right to redeem the Insured Notes as described above would be a change in New York law or regulation (other than with respect to taxes) that changes MONY Life’s ability to declare shareholder dividends without regulatory approval in a manner that materially adversely affects the cash and cash flows available to pay principal of, and interest on, the Insured Notes, without taking into account payments under the Insurance Policy.

Partial Redemption

Whenever MONY Holdings redeems only a portion of the Insured Notes, the amount to be redeemed will be allocated pro rata as determined by outstanding principal amount among all of the Insured Notes outstanding.

Bond Insurer Redemption

So long as no Ambac default (as described below under “Control of Waivers and Remedies by Ambac”) has occurred and is continuing, Ambac will have the option to require MONY Holdings to redeem all of the Insured Notes if:

If Ambac exercises its option under either of the first two circumstances above, MONY Holdings will redeem, not later than 120 days from the time MONY Holdings receives written notice from Ambac that it is exercising its option, the Insured Notes using the same formulas for redemption prices that would be applicable in the case of a regulatory event triggering the right to redeem the Insured Notes as described above.

If Ambac exercises its option under the third circumstance above, MONY Holdings will redeem, not later than 60 days from the time MONY Holdings receives written notice from Ambac that it is exercising its option, the Insured Notes using the same formulas for redemption prices that would be applicable in the case of an optional redemption by MONY Holdings as described above.

In all cases, the redemption price of each Insured Note or portion of Insured Note to be redeemed will not be less than 100% of the outstanding principal amount to be redeemed.

Redemption upon the Sale of the CBB

Upon the sale of all or substantially all the assets of the CBB, MONY Holdings will be required to redeem all of the Insured Notes.

MONY Holdings will redeem the Insured Notes using the same formulas for redemption prices that would be applicable in the case of an optional redemption by MONY Holdings as described above.

In all cases, the redemption price of each Insured Note or portion of Insured Note to be redeemed will not be less than 100% of the outstanding principal amount to be redeemed.

Significant Covenants

MONY Holdings is subject to certain restrictive covenants pursuant to the terms of the Indenture, including:

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Security Interest

The Trustee, for the benefit of the holders of the Insured Notes and Ambac and the swap counterparty, Ambac Financial Services, L.P. (“Ambac Financial Services”), an affiliate of Ambac, have a perfected security interest in the following collateral:

Collectively, these assets are referred to as the “collateral”. The Insured Notes are MONY Holdings’ senior, secured indebtedness, but holders of the Insured Notes have recourse only to the collateral except in the limited circumstances described below with respect to a Deficiency Claim.

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Deficiency Claim

Any principal of and interest on the Insured Notes that remains unpaid following transfer of the collateral to Ambac or to the holders of the Insured Notes (depending on the circumstances) will continue to be full recourse, senior, unsecured indebtedness of MONY Holdings, but only to the extent of the fair market value of the CBB. The fair market value will be determined by an appraisal jointly conducted by two nationally recognized investment banks respectively selected by MONY Group and by Ambac or, if an Ambac default has occurred and is continuing, by holders of not less than 50.1% in remaining principal amount of the Insured Notes. The selected investment banks will jointly obtain the services of a nationally recognized actuarial appraisal firm in order to determine projected cash flows. If these selected investment banks cannot reach agreement within 60 days after they have been selected, they will designate as a third appraiser, within 30 days of their determination that they cannot agree, a nationally recognized investment bank, whose appraisal will be determinative.

Control of Waivers and Remedies by Ambac

So long as Ambac is not in default of its obligations to make any payment to holders of the Insured Notes under the Insurance Policy and is not subject to insolvency or other delinquency proceedings (an “Ambac default”), Ambac will be entitled to exercise all rights and remedies with respect to the Insured Notes under the Indenture, except as described in the Indenture. As a consequence, under these conditions, Ambac will be able to determine the outcome of all votes taken by holders of the Insured Notes, including in respect of the exercise of waivers and remedies by holders of the Insured Notes.

Modification of the Terms of the Insured Notes

Clarifications and other specified amendments to the terms of the Indenture under which the Insured Notes are issued and to the Insured Notes themselves do not require the consent of holders of the Insured Notes. These changes require the consent of Ambac or Ambac Financial Services, which generally may not unreasonably withhold its consent. Changes to specified material terms of the Insured Notes and the Indenture will require the consent of Ambac and holders of the Insured Notes, if holders of the Insured Notes are affected. All other changes will require the consent of Ambac, but will not require the consent of holders of the Insured Notes.

Events of Default and Foreclosure

So long as no Ambac default has occurred and is continuing, Ambac will control any election to accelerate the Insured Notes and foreclose on the collateral. However, Ambac is not required to accelerate its own payments under the Insurance Policy if it elects to accelerate payment on the Insured Notes from MONY Holdings. Ambac may direct the trustee to foreclose on the collateral if any of the following occurs, subject to any applicable grace periods:

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Upon foreclosure, the proceeds from the liquidation of the collateral will be allocated pro rata, based upon the then outstanding principal amounts, to the holders of the Insured Notes or to Ambac. Except in the limited circumstances described above with respect to a Deficiency Claim, holders of the Insured Notes must look solely to Ambac for further payment on the Insured Notes, and all claims by holders of the Insured Notes against MONY Holdings will be extinguished.

Trigger Events with respect to the Insured Notes

Upon (i) the occurrence of a downgrade of the senior debt rating of MONY Group to BB+ or below by Standard & Poor’s Rating Services or Ba2 or below by Moody’s Investors Service, Inc., or (ii) the occurrence of an event of default under the Indenture that is not waived by the holders of the Insured Notes or Ambac, as the case may be, then either or both of the following may occur, at the option of Ambac, so long as no Ambac default has occurred and is continuing:

Use of Proceeds

Upon the issuance of the Original Notes, MONY Holdings (i) deposited $60 million into the sub-account of the DSCA Sub-account OB, (ii) used approximately $7.4 million to pay transaction expenses and (iii) distributed the remainder as a dividend to MONY Group to be used for general corporate purposes.

Listing

The Insured Notes are not listed in any trading system or on any securities exchange.

Treatment of the CBB and the OB

The CBB has its own “notional” balance sheet and income statement reflecting its own assets and liabilities and profits and losses, accounting for them as if it were a legally separate company. The allocation of assets and liabilities does not require the transfer by MONY Holdings, MONY Group, MONY Life or any of their respective subsidiaries or the Closed Block, of any specific assets or liabilities to a separate legal entity. However, the CBB and its related cash flows are separately identified in MONY Life’s and MONY Holdings’ operating systems.

The establishment of the CBB does not affect the cash flows of the Closed Block assets or the operation of the Closed Block as described in the Plan of Reorganization. Transfers of assets between the OB (including those

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MONY Life assets used in the OB) and the CBB will not be permitted other than as described below under “— Inter-Business Transfer and Allocation Policies Relating to the OB and the CBB” and subject to certain covenants set forth in the Indenture.

Because the separation of the OB and the CBB described above does not create actual separate legal entities, the claims of creditors relating to the CBB, except for claims of the holders of the Insured Notes, or the OB (including if there is a bankruptcy or insolvency or by levy of judicial, creditor or other liens) will be against MONY Life’s or MONY Holdings’ total assets. However, unless MONY Life or MONY Holdings are in bankruptcy, insolvency, rehabilitation or other delinquency proceedings, each will ensure that all liabilities of its OB are satisfied out of assets of its OB other than the DSCA — Sub-account OB and the DSCA — Sub-account OB (Deposit). Neither the terms of the Closed Block nor the separation of the businesses, as described above, will affect the rights of Closed Block policyholders, non-Closed Block policyholders, nor any other creditors of MONY Life to have their claims satisfied out of MONY Life’s total assets.

The following table sets forth the assets and liabilities comprising the CBB on a consolidated basis in accordance with GAAP as of December 31, 2003 and indicates the legal entity in which such assets and liabilities are reported on a stand-alone basis.

Inter-Business Transfer and Allocation Policies Relating to the OB and the CBB (Excluding Taxation)

The transactions described below are permitted between the CBB and the OB.

(a) The OB in MONY Holdings may lend to the CBB within MONY Holdings on a basis subordinated to the Insured Notes. The OB within MONY Life may not lend funds to the CBB within MONY Holdings.

(b) Lending is permitted pursuant to any inter-business loans that may be established pursuant to the terms of the Indenture to reflect usage of the funds held in the DSCA-Sub-account OB and the DSCA-Sub-account OB (Deposit) as set forth in the Indenture.

(c) MONY Life is permitted to make loans from the SRA to the OB of MONY Life for cash management purposes of MONY Life only.

(d) Administrative payments from the SRA to the OB that are made to properly allocate dividends paid by MONY Life on its common stock in accordance with the Indenture and to facilitate the operation of the Additional Reserve Account.

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(e) Cash payments for investment management fees from the CBB, but not the Closed Block, that are paid from the SRA to the OB within MONY Life.

Tax Allocations/Tax Treatment

For financial reporting purposes, the CBB within each of MONY Holdings and MONY Life is treated as if it were a consolidated subsidiary under the consolidated federal income tax sharing agreement of MONY Group and its affiliates.

Policies with Respect to Inter-Business Transactions and Transfers Regarding Taxation

If the CBB has taxable income attributable to tax periods, or portions of periods, after the date of issuance of the Insured Notes, it pays its share of federal income tax in cash to the OB. If the CBB has losses or credits attributable to tax periods, or portions of periods, after the date of issuance of the Insured Notes, including from the characterization of the Insured Notes as debt for tax purposes, it receives its federal income tax benefit in cash from the OB.

The CBB also pays or receives its appropriate share of tax and related interest resulting from adjustments attributable to the settlement or other resolution of tax controversies or the filing of amended tax returns to the extent that such amounts relate to controversies or amended returns arising with respect to the CBB and attributable to tax periods, or portions of periods, after the date of issuance of the Insured Notes. However, to the extent that such tax is directly attributable to the characterization of the Insured Notes as other than debt for tax purposes, the tax is borne solely by the OB. If a change of law after the date of issuance of the Insured Notes, including any change in the interpretation of any law, results in the recharacterization of all or part of the Insured Notes as other than debt for tax purposes or a significant reduction in the income tax benefit associated with the interest expense on all or part of the Insured Notes, the OB continue to pay the forgone income tax benefit to the CBB within MONY Holdings for as long as MONY Holdings remains obligated on the Insured Notes or any amounts are owed to Ambac as if such recharacterization or reduction of actual benefit has not occurred. The OB will bear all tax liabilities not properly attributable to the CBB. Any settlement involving the CBB will be made in good faith and with due regard to the merits of the position taken by the CBB.

Charges for premium taxes, guaranty fund payments as well as state and local income taxes and franchise taxes are allocated between the CBB and the OB in the manner in which they are allocated between the Closed Block and the remainder of MONY Life, in accordance with the Plan of Reorganization. For purposes of calculating the state and local income tax for the CBB within MONY Life, the actual MONY Life state and local income taxes paid will be used. For purposes of calculating the state and local income tax on the CBB in MONY Holdings (including the state and local income tax benefits related to the interest payable on the Insured Notes) a fixed rate of 0% is used. For purposes of calculating the federal income tax for the CBB in MONY Holdings, the highest marginal tax rate applicable to corporations is used.

The Closed Block

Transition from the Traditional Participating Products Business of Mutual of New York to the Closed Block of MONY Life

As a mutual life insurance company, Mutual of New York issued most of its individual life insurance products on a “participating” basis, whereby policyholders are eligible to receive experience-based dividends. In its demutualization, Mutual of New York segregated the liabilities for most traditional individual in force participating products — together with assets that will be used exclusively for the payment of policyholder benefits and dividends, certain expenses and taxes with respect to the these policies — to form the Closed Block.

Mutual of New York also issued (and MONY Life and its subsidiaries continue to issue) interest-sensitive and variable life policies with non-guaranteed elements such as interest crediting rates. These policies do not pay experience-based dividends and are not in the Closed Block. In addition, Mutual of New York sold a relatively

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small group of participating products that MONY Life no longer sells. These policies are not part of the Closed Block, either. They include Individual Medical Care and Disability Income policies, Module Ordinary Life Policies, Group Fixed and Variable Annuity policies and Individual Variable Annuity policies.

MONY Life will continue to service policyholders with Closed Block policies through MONY Life agents and other distributors as well as centralized service centers. No new policies have been added to the Closed Block following Mutual of New York’s demutualization and we expect the in force business to decline over time as policyholder benefits are paid in full. We also expect that the proportion of MONY Life’s business represented by the Closed Block will decline as MONY Life’s other businesses grow. MONY Life intends to maintain the Closed Block as required by the Plan of Reorganization until all policyholder benefits are paid in full.

The following table sets forth in force data for MONY Life’s Closed Block since demutualization in November 1998.

Description of the Closed Block Policies

Policies in the Closed Block include traditional participating individual, joint and Last Survivor Whole Life insurance policies, individual term life insurance policies and individual retirement annuity contracts that are currently paying or are expected to pay policy dividends based on experience or that currently pay no dividends only because they are in extended term insurance status, along with all supplementary benefits and riders attached to these policies.

Approximately 96.7% of the Closed Block liabilities are associated with traditional participating individual single life products (including whole life, endowment, limited payment, insurance with modified premium or benefit patterns, fully paid-up and reduced paid-up insurance). The balance is made up of term, joint and Last Survivor Whole Life policies.

Mutual of New York’s traditional whole life insurance policies typically included the following features:

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The owners of traditional whole life policies often have a right to purchase supplementary benefits or term insurance riders for an additional premium. The most common forms of supplementary benefits are waiver of premium, which provides that premiums on the policy will be waived if the insured becomes disabled before a certain age (typically, age 60 with a more limited benefit if disability occurs between ages 60 and 65) and various kinds of accidental death or dismemberment coverage that pay additional benefits if the insured dies accidentally or loses eyesight or limbs in an accident. Life insurers generally consider these benefits “non participating” in that incremental dividends are not usually paid to policyholders with these benefits. For most policy forms, gains or losses for supplementary benefits are considered in the calculation of the aggregate amount of dividends that can be paid to all participating life insurance policyholders.

Most traditional whole life insurance policies cover only one life. However, the Closed Block also contains a few remaining joint whole life policies, which pay a death benefit when the first of two insured dies, and 1,586 Last Survivor Whole Life policies, which pay a death benefit upon the death of the second of two insured lives. Mutual of New York also issued “family policies,” which provided whole life insurance coverage on the primary insured, and term insurance coverage on the spouse and the couple’s dependent children.

Endowment policies typically provide life insurance coverage until a certain age (such as 65 or 85). At that point, the policy matures for a guaranteed cash value equal to the policy’s original face amount. Income endowment policies were designed to mature at a specified age for a cash value that, when reinvested, would provide a certain amount of annuity income for the remainder of the insured’s life.

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The following table shows the most common types of policies included in the Closed Block. These policy types represent 99.6% of the policies in the Closed Block, by amount of statutory base policy reserves.

Common Types of Policies in the Closed Block(1)

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Common Types of Policies in the Closed Block(1)

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The following table shows the distribution of the life policies in the Closed Block by year of issue, as of December 31, 1997 and December 31, 2003.

Policies in the Closed Block(1)

By Year of Issue

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The distribution of attained ages for Closed Block policyholders with life policies in the Closed Block as of December 31, 2003 is shown in the following table:

Closed Block(1)

By Attained Age

As of December 31, 2003

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The following table shows the geographic distribution of life policies:

Policies in the Closed Block(1)

By Geographic Distribution

As of December 31, 2003

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Other Closed Block Policies

The Closed Block also contains a small number of retirement annuities. These retirement annuities include 2,213 policies representing 0.2% of Closed Block reserves. These are deferred annuities, which require regular premiums, or deposits, from the insured. Dividends are generally either paid in cash or used to purchase additions. The accumulated cash value of the contract can be used to purchase an annuity benefit at rates guaranteed in the contract.

Mortality and Persistency Characteristics of Closed Block Policies

MONY Life typically conducts studies of mortality and persistency experience each year as part of the dividend determination process for participating policies. MONY Life primarily measures its mortality experience compared to industry mortality tables.

Mutual of New York used its own mortality experience to set the mortality rates for various categories of business included in the Closed Block. The Closed Block was funded using mortality assumptions based on the combined experience from five study years (policy years ending in 1992 through 1996).

MONY Life has used more recent experience in determining dividend scales subsequent to its demutualization in November of 1998. For example, changes to the mortality component of the 2002 dividend scale as described below in “Recent Policyholder Dividend History” reflect changes in mortality experience from the period underlying the initial funding to the combined experience of calendar years 1996-2000.

To put this experience in perspective, based on MONY Life’s traditional participating business in the Closed Block, the following table shows ratios of MONY Life death claims to the claims that would have been expected based on the 1975-80 Basic Tables for traditional-premium paying life policies issued on a standard or preferred (smoker or non-smoker) basis. The 1975-80 Basic Tables are mortality tables based on industry-wide experience and compiled by the Society of Actuaries, and are often used as a basis for monitoring mortality trends.

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The following table shows historical lapse rates for MONY Life’s permanent Closed Block life insurance line of business. Lapse rates are given for policy durations 1-5, 6-10, 11-15 and in the ultimate period (durations 16 and later).

Historical Lapse Rates for MONY Life’s Permanent Closed Block Life Insurance Business(1)

Lapse Rates Based on Face Amount(2)

The lapse assumption used in the Closed Block funding was based on the combined experience from two study years (policy years ending in 1995 and 1996). Although lapse assumptions are not a direct component in the calculation of the dividend payable to specific policies (as are interest, mortality, and expenses), lapse assumptions are an important element of the projection of in force business to assure that the ratio of assets to liabilities will remain consistent with the projections established in the initial funding of the Closed Block. MONY Life used lapse rates for 1999 through 2002 in the development of the 2004 dividend scale.

Lapse rates tend to vary by face amount of insurance, by policy type, and by policy duration. Generally, lapses are relatively high in the first several policy years and gradually decrease with increasing duration.

The following table shows historical MONY Life policy loan utilization rates for Closed Block policies for the period 1988 to 2003. Available Cash Value includes the cash value of the base policy, dividend additions, growth option rider and any dividend deposits. The decline in policy loan utilization rates in more recent years is primarily due to the increasing proportion of business with variable (rather than fixed) policy loan rates.

Policy Loan Utilization Rates for Closed Block Life Insurance Business(1)

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Reserves

MONY Life establishes insurance reserves in accordance with Statutory Accounting Practices as described in Note 3 to the Financial Statements of MONY Life included herein.

Reinsurance

MONY Life utilizes a variety of indemnity reinsurance agreements with third-party reinsurers to control its loss exposure with respect to policies in the Closed Block. MONY Life’s retention limits were $1 million from October 1, 1972 through May 31, 1984, $3 million from June 1, 1984 through March 31, 1996, and $4 million ($6 million for last survivor whole life products) from April 1, 1996 to date.

As of December 31, 2003, liabilities ceded through MONY Life’s automatic and facultative reinsurance programs in the Closed Block are $13.8 million. In addition, MONY Life has entered into coinsurance agreements related to a portion of its extended term insurance and paid-up life insurance policies. As of December 31, 2003, liabilities ceded under these contracts were $68.7 million.

Policyholder Dividend Philosophy

Since the demutualization, MONY Life has operated with a dividend philosophy of paying policyholder dividends on the Closed Block policies as appropriate over time to reflect the underlying experience of the Closed Block. MONY Life also considers the objective of managing aggregate dividends so as to exhaust Closed Block assets when the last Closed Block policy terminates. The reason for this objective is to avoid an outcome where the relatively few last surviving owners of Closed Block policies receive dividends that are substantially higher or substantially lower than those previously received by other owners of Closed Block policies. Although the Closed Block is designed to provide for policyholders’ reasonable dividend expectations, no particular dividend scale is guaranteed.

The dividends to be distributed to holders of Closed Block policies are intended to reflect the actual experience of the Closed Block. In addition, MONY Life has covenanted to use reasonable efforts to ensure that cash flows from the SRA will not be necessary to fund the cash flows required by the Closed Block liabilities, which include declared but unpaid policyholder dividends. Notwithstanding the foregoing, the board of directors of MONY Life retains the discretion to pay higher policyholder dividends than is supported by experience and to use SRA to pay declared policyholder dividends. These payments may reduce the cash flows available to MONY Holdings for payment of the Insured Notes. The payments, however, would constitute an event of default under the Insured Notes.

MONY Life manages the dividend scales primarily through analysis of the ratio of assets to liabilities in the Closed Block and analysis of projected results of operations for the Closed Block. When the Closed Block was originally funded, assets were allocated to the Closed Block such that if the experience underlying the 1998 dividend scale continued, the assets would be sufficient to continue the 1998 dividend scale and pay all policy benefits until the expiration of the Closed Block. The level of assets in the Closed Block was initially substantially lower than the liabilities in the Closed Block because, among other reasons, commissions and maintenance expenses are not paid from the Closed Block and statutory reserve assumptions are conservative. As the Closed Block ages, the ratio of assets to liabilities in the Closed Block increases, so that, at the expiration of the Closed Block, the assets will equal the liabilities.

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