AMERICAN CHAMBERS LIFE INSURANCE COMPANY (Ohio) Ð This accident and health underwriter was placed in liquidation on May 8, 2000. All A & H policies were canceled not later than October 1, 2000. The Association has completed processing and paying outstanding claims. As of year end $675,697 in health claims had been paid. One life policy was transferred to Madison National retro to 12/1/01 and reserves of $1,593 were paid. Administrative expenses total $162,886. Funds from the S. C. special deposit will be sufficient to pay all claims and expenses.

AMERICAN INTEGRITY INSURANCE COMPANY (Pennsylvania) -- On June 25, 1993, the company was placed in liquidation. All policies were reinsured in 1994 and claim payments completed in 1995. There are no outstanding policyholder obligations. To date the Association has received a total $1,243,340 which includes receipts from an assessment, premium collections, SC deposit, interest and the liquidator. Expenses to date total $74,098. Claims and reserves paid to date total $721,086 which includes direct paid health claims, reserves paid to MEGA and reserves paid to UNUM. The closing of the estate has been delayed by a reinsurance dispute with Cologne Re that is now in arbitration. If the liquidator is successful, there may be an additional $20 to $30 million available for distribution.

AMERICAN MUTUAL LIABILITY INSURANCE COMPANY (Massachusetts) -- The Association has completed all policyholder claims for this 1989 insolvency. A total of $347,717 in receipts included assessment proceeds, premium collections and interest. Overall expenses totaled $24,130. Claims and reserves totaled $221,853. The account currently has a positive balance of $101,734. There is no prospect for recovery of additional assets from the receiver. This account will be closed in 2005 and the remaining balance transferred to the Health Contingency Reserve account.

AMERICAN STANDARD LIFE AND ACCIDENT INSURANCE COMPANY (Oklahoma) -- This company was placed in rehabilitation in 1989. On September 22, 1998, the receiver was granted a liquidation order. All SC policies were assumed by American Fidelity Life. This Association has paid a total of $211,554 in reserves and claims to date. All claims have been settled. The SC special deposit of $195,000 was transferred to the Association in late 2000. No additional recovery from the Liquidator is anticipated. Expenses to date total $103,752. Recoveries of $196,386 were primarily the SC Deposit. This account will be closed in 2005 and the negative balance of $118,719 charged to the Life Contingency Reserve account.

CENTENNIAL LIFE (Kansas) Ð This company was placed in liquidation on May 27, 1998. All individual health policies were cancelled in 1999. The small block of life policies was assumed by New Era Life in 2000. Late in 2000 an assumption agreement was reached with Hartford to assume the long-term disability business. As of 12/31/04 the Association has paid a total of $376,674 in expenses, $3,103,984 in A&H claims and reserves, and life reserves of $4,801. Receipts as of year end included $2,168,433 from the SC special deposit, premiums of $679,762, refunds of $73,092, and $247,727 from the estate for a total of $3,169,014. All claims have been processed and all business transferred. The receiver anticipates no further distributions and plans to close the estate in 2005.

COASTAL STATES LIFE (Georgia) -- Originally placed in conservation January 24, 1996, and in liquidation October 1, 1996. All S.C. policyholders (life and annuity) were placed with Security First Life Insurance Company November 8, 1996. SCLAHIGA had $43,551.35 of administrative expenses and reserves paid of $51,528 through the end of 2004. Recoveries total $8,402. SC released the special deposit held to the liquidator as one of the conditions of participation in the assumption agreement. In December of 2004 the estate was closed. A distribution of $16,386 was received in early 2005. This account will be closed in 2005.

CONSECO Group (Various) Ð This monitoring account was closed in 2004 and the expenses written off against the General Administrative Account.

EXECUTIVE LIFE INSURANCE COMPANY (California) -- The company was declared insolvent December 6, 1991. This Association agreed to participate in the NOLHGA Enhancement Plan for the Aurora assumption. Total estimated liability under current assumptions is projected at $35,000,000. The Association made an annual support payment under the Enhancement Plan of $959,787. As of 12/31/04 administrative expenses totaled $1,614,764, reserves and claims paid total $27,826,058. Receipts of $23,231,991 include assessments totaling $19,518,127. Future reserve liabilities are estimated at over $9,000,000.

FIDELITY BANKERS LIFE INSURANCE COMPANY (Virginia) -- A rehabilitation plan was submitted to and approved by the court on September 29, 1992. During 2000 the Association reached a settlement agreement with the receiver to handle any liability it might have. Under the agreement $633,206 was paid to the receiver and distributed by him to the SC policyholders. No recoveries will be available from the estate. Administrative expenses through year end totaled $200,485.

FIDELITY MUTUAL LIFE INSURANCE COMPANY (Pennsylvania) -- The company was placed in rehabilitation on November 6, 1992 and the rehabilitation plan amended June 1996. The plan did not require Association participation. SC had policyholder liabilities of approximately $7,200,000. Through 12/31/04 a total of $33,825 in administrative expenses has been incurred. The rehab plan appears to be successful and these charges will be written off primarily against the life contingency reserve account and this account closed in 2005.

FIRST CAPITAL LIFE INSURANCE COMPANY (California) -- This company was placed in rehabilitation in 1992. A rehabilitation plan was presented by the receiver and approved by the California courts. The plan has proceeded to date without funding from this Association. As of 12/31/04 the Association has received $34,537 which includes $25,739 from the company. Expenses total $12,330. The positive account balance of $22,207 will be transferred to the Annuity Contingency Account and this account closed in 2005.

FIRST NATIONAL LIFE INSURANCE COMPANY (Alabama) Ð An order of liquidation was issued August 5, 1997. As of 12/31/04 a total of $1,885 in health claims were paid. Expenses totaled $10,049 and receipts totaled $5,631. The negative account balance of $6,302 will be charged to the Health Contingency Reserve Account and this will be closed in 2005.

FIRST NATIONAL LIFE INSURANCE COMPANY OF AMERICA (Mississippi) Ð This company was placed in liquidation June 29, 1999. The SC block of business, estimated at $2,000,000, was 12.5% life and 87.5% annuity. All business was assumed by Madison National Life at the end of 1999. The Association funded its reserves with a note payable in the amount of $2,015,821 due in 2001. The note plus interest, a total of $2,177,088, was paid in early 2001. An assessment in the amount of $2,200,000 was voted in 2000 and called in January of 2001. Through year end expenses totaled $82,435. It is unknown if any further distributions will be received from the estate.

FRANKLIN AMERICAN LIFE (Tennessee) Ð This company was placed in liquidation October 26, 1999. The SC block of business was assumed by Investors Heritage in 2000 and reserves paid to them of $6,522. Total expenses to date total $12,123 and receipts total $677. It is unknown if any additional distribution will be received from the estate.

GEORGE WASHINGTON LIFE INSURANCE COMPANY (West Virginia) -- There are no remaining policies in force policies and no pending claims. The Association has incurred a total of $175,027 in expenses and $616,898 in claims and reserve payments. In 1993 all policies were sold to Hill Country Life. Receipts to date total $618,117 and include funds from the SC deposit, premium collections, and the estate. In early 2005 an additional $71,632 was received from the liquidator.

GUARANTEE SECURITY LIFE INSURANCE COMPANY (Florida) Ð Declared insolvent and placed in liquidation 12/3/92. During 1992 the Association's Board voted to participate in a NOLHGA Enhancement Agreement to make covered policyholders whole. All except a handful of policies were assumed by Midland National Life in October 1997. A total of $300,995 has been incurred in expenses; reserves and claims paid total $3,438,778. Receipts include $1,301,252 from the liquidator, $2,725,552 from an assessment and $16,804 in interest for a total of $4,043,608. It is anticipated that the estate will close in 2005.

INTER-AMERICAN INSURANCE COMPANY (Illinois) -- On December 23, 1991, this company was placed in liquidation and declared insolvent. All in force policies were assumed by Jackson National Life and all claim payments have been concluded. Administrative expenses from inception total $122,564, claims and reserves total $1,334,198, and receipts total $1,870,634. There is one additional property to be liquidated. Some small additional distribution may be received.

INTERNATIONAL FINANCIAL SERVICES LIFE (Missouri) Ð On November 30, 1999 this company was placed in liquidation. SC has two life policies and one annuity policy with total reserves of $632. These policies were assumed by Madison National Life in 1999. Administrative expenses to date total $6,842, and receipts total $50.55. The SC deposit is sufficient to cover all expenditures.

INVESTMENT LIFE INSURANCE COMPANY OF AMERICA (North Carolina) -- The company was placed in liquidation April 2, 1993. All policies were transferred to Mid-West National Life under an assumption agreement and funded by the Association in the amount of $8,295,792. Liability for surrender charges that exceed the guaranteed policy surrender charges remained with the Association and totaled $278,027 and have been paid. A small block of GIC contracts was denied coverage. Under an agreement between Liberty Life and the liquidator, Liberty funded those contracts. The Association filed suit against Liberty seeking a declaratory judgement concerning coverage of the contracts. This case was heard in 1996 and the Association received a favorable ruling. Liberty appealed to the Court of Appeals which upheld the Circuit CourtÕs decision. In 1998 Liberty appealed to the SC Supreme Court. The Supreme Court heard the case in September and issued a decision in early 2001. That decision upheld the prior decision. To date the Association has incurred $493,410 in expenses, $8,573,820 in reserves and claims, and had receipts of $11,724,554. We are awaiting distributions from the receiver.

KENTUCKY CENTRAL LIFE INSURANCE COMPANY (Kentucky) -- On August 18, 1993, the company was placed in liquidation. SCLAHIGA is a participant in an assumption of the business by Jefferson-Pilot Life and paid $754,738 in reserves. Administrative expenses through year end totaled $209,757 and receipts total $2,274,546. Some additional distribution is anticipated from the estate.

LEGION INSURANCE COMPANY (Pennsylvania) Ð The company was put in liquidation 7/28/03. This P&C company wrote group accident and health insurance. Policies were cancelled not later than 5/30/02. To date the Association has incurred $4,793 in administrative expenses.

LONDON PACIFIC LIFE & ANNUITY INSURANCE COMPANY (North Carolina) Ð This company was placed in liquidation 9/30/04. The company had 18 life and 146 annuity policies in this state. Total obligations were reported to be in excess of $6,000,000. Of that $6,000,000 in company obligations approximately $1,500,000 appears to be in excess of Association limits. The life policies were placed with another carrier prior to liquidation. Annuity policyholders were offered the option to exchange their London Pacific policy for a Hartford policy, to cash surrender, or to remain with the Association. Most policyholders went with Hartford. To date the Association has incurred $29,600 in expenses, $171,992 in annuity reserves and has received $354,643 from the SC deposit.

MONARCH LIFE INSURANCE COMPANY (Massachusetts) -- This company was placed in conservation June 27, 1994. The products written were a variety of life and annuity products and disability insurance. The Association has incurred $21,875 in administrative expenses. The situation continues to be monitored. No Association participation is anticipated at this point.

MUTUAL BENEFIT LIFE INSURANCE COMPANY (New Jersey) -- This company was placed in rehabilitation on July 16, 1991. The Association's Board of Directors voted to participate in the Rehabilitation Agreement as sponsored by the NOLHGA Mutual Benefit Task Force. The Association incurred $146,689 in administrative expenses and $131,408 in reserves paid. Recoveries from the receiver total $211,974. This estate has been closed. The account will be closed in 2005.

MUTUAL SECURITY LIFE INSURANCE COMPANY (Indiana) -- This company was declared insolvent and placed in liquidation on December 6, 1991. Other carriers assumed all policies in 1993 and 1994. The Association paid $721,904 in claims and reserves. Administrative expenses since inception total $45,393. To date the liquidator has distributed $575,500. Total receipts as of year end are $1,660,809. A last distribution was received in 2004. This account will close in 2005.

NATIONAL AFFILIATED INVESTORS LIFE INSURANCE COMPANY (Louisiana) Ð This company was placed in liquidation April 26, 2000. During 2000 the South Carolina block of life policies was placed with Citizens Security Life. The assumption required reserve payments of $496,909. Administrative expenses to date total $160,603. The only recovery was from the SC special deposit in the amount of $367,820. No distribution is planned from the liquidator. This account will be closed in 2005.

NATIONAL HEALTH INSURANCE COMPANY (Texas) Ð This company has not been placed in receivership. Currently a task force is monitoring the situation. The 2003 annual statement reported a drop in surplus from $21.4 million to negative $941,500. Business reported in SC was $3.7 million in A&H, $130,000 in annuity premium and $10,500 in life premium. SC has 960 A&H contracts; the company wrote group as well as individual. A&H claims paid for 2003 totaled $4.2 million. SC has 14 group life contracts, probably no individual life policies. There are 58 SC annuity contracts with an account value of $1.5 million. Company has been unable to cover the interest spread on 34,000 annuity contracts which have an account value of $815,000,000. There is a SC special deposit of $776,000. Shortly after the first of 2004 owner took $15,000,000 out of the company; this transaction was not authorized by the Texas DOI. Petition for insolvency will be contested. Through 12/31/04 this Association has spent $6,269 in administrative expenses.

NATIONAL HERITAGE LIFE INSURANCE COMPANY (Delaware) -- This company was placed in liquidation November 21, 1995. An assumption of the business by Metropolitan Life was completed in 1996. SCLAHIGA paid $387,052 in reserves to fund the assumption. Administrative expenses to date total $140,055; recoveries include $15,041 in premium collections, $219,745 from the estate and $233,400 from the SC special deposit. The account remains open pending a final distribution from the estate.

OLD COLONY LIFE (Georgia) -- On June 30, 1994, this company was placed in liquidation. All policies were reinsured with Aetna Life & Annuity in 1994 for a net cost of $187,090. Expenses to date total $34,890. Recoveries total $463,063. The account remains open awaiting final distribution of assets.

PENN TREATY INSURANCE (Pennsylvania) Ð Penn Treaty was suspended by order of the South Carolina Director of Insurance on September 11, 2001. The administrative expenses incurred to date total $3,280. The Association has continued to follow the financial situation of Penn Treaty. No other action has been necessary. On March 4, 2002, the SCDOI restored Penn TreatyÕs certificate and the company is again writing long term care in SC. This account will be closed in 2005 and written off to general administrative expenses.

PIEDMONT INSURANCE COMPANY (South Carolina) Ð Following a brief supervision period, this company was placed in liquidation on November 27, 2002. Piedmont was a SC licensed only company that did primarily home service life with some A & H policies. The Association has continued the policies in force and is currently collecting premiums and paying all claims. In late 2004 by contract the Association engaged Atlantic Coast Life as a TPA to collect premium and process claims. To date the administrative expenses total $217,505, claims total $390,873 and receipts total $366,120.

RELIANCE INSURANCE COMPANY (Pennsylvania) Ð The company was placed in liquidation October 3, 2001. This was a property and casualty company that had accident and health authority. As of 12/31/04 administrative expenses total $480,909 and claims payments total $834,706. An estate distribution of $772,324 was received. It is anticipated that a small amount of claims will continue through 2005.

STATESMAN NATIONAL LIFE INSURANCE COMPANY (Texas) Ð On June 10, 1999, this company was placed in liquidation. SC had a small block of health policies with reserves totaling $1,042 that was reinsured in 1999. Policyholder claims paid directly totaled $4,578. Expenses incurred to date total $9,849. Recoveries include $10,300 from the liquidator and a refund of $2,700 from NOLHGA. This estate will be closed in 2005 and written off to the Health Contingency Reserve account.

SUMMIT NATIONAL LIFE INSURANCE COMPANY (Pennsylvania) -- This company was placed in liquidation on November 1, 1994. Under a reinsurance assumption agreement, Midland National assumed all in force policies in 1994; reserves paid totaled $2,731,287. Life claims were paid in the total amount of $220,856. Administrative expenses through 12/31/04 totaled $593,644. Recoveries to date total $5,089,376. The account remains open pending final distribution from the estate.

VILLANOVA INSURANCE COMPANY (Pennsylvania) Ð The company was put in liquidation 7/28/03. This P&C company wrote group accident and health insurance. Policies were cancelled not later than 5/30/02. To date the Association has incurred $10,349.00 in administration expense. This company is a subsidiary of Legion Insurance Company.