10-Q 1 sslic10q0603.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended June 30, 2003 Commission File Number: 2-35669 ------------------------------- ------------------------------- SOUTHERN SECURITY LIFE INSURANCE COMPANY Exact Name of Registrant. FLORIDA 59-1231733 ---------------- ------------- (State or other jurisdiction of (IRS Identification Number) incorporation or organization) 755 Rinehart Road, Lake Mary, Florida 32746 ------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including Area Code (407) 321-7113 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class A Common Stock, $1.00 par value 2,103,600 ------------------------------------- ---------------------------- Title of Class Number of Shares Outstanding as of June 30, 2003 SOUTHERN SECURITY LIFE INSURANCE COMPANY FORM 10-Q QUARTER ENDED JUNE 30, 2003 TABLE OF CONTENTS PART I - FINANCIAL INFORMATION Item 1 Financial Statements Page No. ------ -------- Statement of Operations - Six and Three Months ended June 30, 2003 and 2002 (unaudited).................3 Balance Sheet - June 30, 2003 (unaudited) and December 31, 2002..................................4-5 Statement of Cash Flows - Six Months ended June 30, 2003 and 2002 (unaudited)................................6 Notes to Condensed Financial Statements..................7 Item 2 Management's Discussion and Analysis................. 7-10 Item 3 Quantitative and Qualitative Disclosure of Market Risk..........................................10 Item 4 Controls and Procedures.................................10 PART II - OTHER INFORMATION Other Information....................................10-12 Signature Page..........................................13 Certifications.......................................14-16

See accompanying notes to condensed financial statements. SOUTHERN SECURITY LIFE INSURANCE COMPANY BALANCE SHEET June 30, 2003 December 31, (Unaudited) 2002 Assets: Investments: Fixed maturities held-to-maturity $3,863,137 $3,971,539 Securities available-for-sale, at fair value: Fixed maturities 18,363,798 18,439,961 Equity securities 351,615 309,218 Mortgage loans 2,229,016 2,244,597 Policy and student loans 7,877,032 8,027,736 Short-term investments 19,171,115 16,283,759 ----------- ----------- Total Investments 51,855,713 49,276,810 ----------- ----------- Cash and cash equivalents 281,837 3,067,284 Accrued investment income 538,479 473,789 Deferred policy acquisition costs 13,666,892 13,391,535 Policyholders' account balances on deposit with reinsurer 6,877,703 6,955,691 Reinsurance receivable 658,862 279,090 Receivables: Agent balances, net 458,460 776,244 Parent Company 1,245,363 -- Other 639,273 614,150 Property and equipment, net, at cost 2,373,369 2,430,404 ----------- ----------- Total assets $78,595,951 $77,264,997 =========== =========== See accompanying notes to condensed financial statements. SOUTHERN SECURITY LIFE INSURANCE COMPANY BALANCE SHEET (Continued) June 30, 2003 December 31, (Unaudited) 2002 Liabilities and Shareholders' Equity: Liabilities: Policy liabilities and accruals $3,903,755 $3,517,481 Future policy benefits: Policyholders' account balances 47,020,393 47,222,857 Unearned revenue 4,511,526 4,551,265 Other policy claims and benefits payable 1,167,268 701,312 Other policyholders' funds, dividend and endowment accumulations 94,471 78,811 Funds held related to reinsurance treaties 1,312,974 1,334,963 Note payable to related party 1,000,000 1,000,000 Due to affiliated companies 299,645 83,941 General expenses accrued 89,332 98,480 Unearned investment income 354,214 355,529 Other liabilities 65,220 111,786 Income taxes 1,260,336 1,062,802 ----------- ----------- Total liabilities 61,079,134 60,119,227 ----------- ----------- Shareholders' equity: Common stock, $1 par, authorized 3,000,000 shares; issued and out- standing, 2,103,600 shares in 2003 and 2,003,388 shares in 2002 2,103,600 2,003,388 Capital in excess of par 4,614,924 4,267,189 Accumulated other comprehensive income 1,180,296 871,197 Retained earnings 9,617,997 10,003,996 ----------- ----------- Total shareholders' equity 17,516,817 17,145,770 Commitments and contingencies -- -- ----------- ----------- Total liabilities and shareholders' equity $78,595,951 $77,264,997 =========== =========== See accompanying notes to condensed financial statements.

See accompanying notes to condensed financial statements. SOUTHERN SECURITY LIFE INSURANCE COMPANY Notes to Condensed Financial Statements June 30, 2003 (Unaudited) 1. Basis of Presentation The accompanying unaudited condensed financial statements have been prepared by management in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. All adjustments and accruals considered necessary for fair presentation of financial information have been included in the opinion of management, and are of a normal recurring nature. Quarterly results of operations are not necessarily indicative of annual results. These statements should be read in conjunction with the financial statements and the notes thereto included in the Southern Security Life Insurance Company 2002 Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (file number 2-35669). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The estimates susceptible to significant change are those used in determining the liability for future policy benefits and claims. Although some variability is inherent in these estimates, management believes the amounts provided are adequate. 2. Comprehensive Income For the six months ended June 30, 2003 and 2002, total comprehensive income (loss) was $371,047and $52,031, respectively. For the three months ended June 30, 2003 and 2002, total comprehensive income was $298,179 and $164,542, respectively. Item 2. Management's Discussion and Analysis Overview This analysis of the results of operations and financial condition of Southern Security Life should be read in conjunction with the Condensed Financial Statements and Notes to the Condensed Financial Statements included in this report. The Company has primarily issued three types of insurance products: universal life, 10-Pay Whole Life with an Annuity Rider, and final expense products. Universal life provides insurance coverage with flexible premiums, within limits, which allow policyholders to accumulate cash values. The accumulated cash values are credited with tax-deferred interest, as adjusted by the Company on a periodic basis. Deducted from the cash accumulations are administrative charges and mortality costs. Should a policy surrender in its early years, the Company assesses a surrender fee against the cash value accumulations based on a graded formula. Final expense products are traditional endowment type insurance policies written for the senior market. Because the products are written to a senior market they are designed to accommodate adverse health conditions. Because of the size of the policies, the products are usually issued with only limited underwriting. The coverage size of the policy is roughly equivalent to the insured's anticipated funeral costs. The 10-Pay Whole Life with an Annuity Rider product is designed for the student loan market. The savings aspect of the Annuity Rider is marketed as a tool for parents to help fund their children's higher education. The product is offered to parents who have children under the age of 25. The Company established a lead generation program that has been coupled with a recruiting program for new sales agents to help generate new business. An additional source of income to the Company is investment income. The Company invests those funds deposited by policyholders of universal life and annuity products in debt and equity securities, mortgage loans, and warehouse mortgage loans on a short-term basis before selling the loans to investors in accordance with the requirements and laws governing life insurance companies, in order to earn interest and dividend income, a portion of which is credited back to the policyholders. Interest rates and maturities of the Company's investment portfolio play an important part in determining the interest rates credited to policyholders. Product profitability is affected by several different factors, such as mortality experience (actual versus expected), interest rate spreads (excess interest earned over interest credited to policyholders) and controlling policy acquisition costs and other costs of operation. The results of any one reporting period may be significantly affected by the level of death claims or other policyholder benefits incurred due to the Company's relatively small size. Results of Operations Six Months Ended June 30, 2003 Compared to Six Months Ended June 30, 2002 Total revenues increased by $349,000, or 6.7%, to $5,606,000 for the six months ended June 30, 2003, from $5,257,000 for the six months ended June 30, 2002. Contributing to this increase was a $236,000 increase in net insurance revenues and a $114,000 increase in net investment income. Net insurance revenues increased by $236,000 or 7.0%, to $3,581,000 for the six months ended June 30, 2003, from $3,345,000 for the six months ended June 30, 2002. This increase was primarily the result of an increase in traditional life sales. Net investment income increased by $114,000, or 6.0%, to $2,025,000 for the six months ended June 30, 2003, from $1,911,000 for the six months ended June 30, 2002. This increase was due to additional interest income earned on warehouse mortgage loans included in short-term investments. Benefits and claims increased by $374,000, or 15.7%, to $2,759,000 for the six months ended June 30, 2003, from $2,385,000 for the comparable period in 2002. This increase was primarily due to an increase in death claims and future policy benefits. Amortization of deferred policy acquisition costs decreased by $51,000, or 4.5%, to $1,064,000 for the six months ended June 30, 2003, from $1,115,000 for the comparable period in 2002. This decrease was in line with actuarial assumptions. Operating expenses decreased by $126,000, or 6.9%, to $1,704,000 for the six months ended June 30, 2003, from $1,830,000 for the same period in 2002. This decrease was primarily the result of insurance recovery of legal fees expended for litigation purposes. Second Quarter of 2003 Compared to Second Quarter of 2002 Total revenues increased by $117,000, or 4.3%, to $2,830,000 for the three months ended June 30, 2003, from $2,713,000 for the three months ended June 30, 2002. Contributing to this increase was a $53,000 increase in net insurance revenues and a $64,000 increase in net investment income. Net insurance revenues increased by $53,000, or 3.0%, to $1,806,000 for the three months ended June 30, 2003, from $1,753,000 for the comparable period in 2002. This increase was primarily the result of an increase in traditional life sales. Net investment income increased by $64,000, or 6.6%, to $1,024,000 for the three months ended June 30, 2003, from $960,000 for the comparable period in 2002. This increase was primarily due to additional interest income earned on warehouse mortgage loans included in short-term investments. Benefits and claims increased by $85,000, or 6.4%, to $1,417,000 for the three months ended June 30, 2003, from $1,332,000 for the comparable period in 2002. This increase was primarily due to an increase in death claims and traditional life reserves. The amortization of deferred policy acquisition costs increased by $57,000, or 9.4%, to $664,000 for the three months ended June 30, 2003, from $607,000 for the comparable period in 2002. The increase was primarily due to the adjustment of the amortization rate to the Company's current actuarial assumptions. Operating expenses decreased by $120,000, or 13.4%, to $782,000 for the three months ended June 30, 2003, from $902,000 for the comparable period in 2002. This decrease was primarily the result of insurance recovery of legal fees expended for litigation purposes. Liquidity and Capital Resources The Company attempts to match the duration of invested assets with its policyholder liabilities. The Company may sell investments other than those held-to-maturity in the portfolio to help in this timing; however, to date, that has not been necessary. The Company purchases short-term investments on a temporary basis to meet the expectations of short-term requirements of the Company's products. The Company's investment philosophy is intended to provide a rate of return that will persist during the expected duration of policyholder liabilities regardless of future interest rate movements. The Company's investment policy is to invest predominantly in fixed maturity securities, mortgage loans, and warehouse mortgage loans on a short-term basis before selling the loans to investors in accordance with the requirements and laws governing life insurance companies. Bonds owned by the Company amounted to $22,227,000 as of June 30, 2003, as compared to $22,412,000 as of December 31, 2002. This represents 43% and 45% of the total investments as of June 30, 2003 and December 31, 2002, respectively. Generally, all bonds owned by the Company are rated by the National Association of Insurance Commissioners. Under this rating system, there are six categories used for rating bonds. At June 30, 2003, and at December 31, 2002, the Company had investments in bonds in rating categories three through six, which are considered non-investment grade, of $485,000. The Company has classified certain of its fixed income securities as available for sale, with the remainder classified as held to maturity. However, in accordance with Company policy, any such securities purchased in the future will be classified as held to maturity. Business conditions, however, may develop in the future which may indicate a need for a higher level of liquidity in the investment portfolio. In that event the Company believes it could sell short-term investment grade securities before liquidating higher-yielding longer-term securities. The Company has a substantial portion of its assets invested in high-yield, short-term investments. If market conditions were to change so that rates for short-term investments were to drop or if these investments and higher yielding long-term investments were not available, the Company's interest rate spread (excess interest earned over interest credited to policyholders) would be adversely affected and could result in significant decreases in the Company's overall profitability or losses. The Company is subject to risk based capital guidelines established by statutory regulators requiring minimum capital levels based on the perceived risk of assets, liabilities, disintermediation, and business risk. At June 30, 2003 and December 31, 2002, the Company exceeded the regulatory criteria. Lapse rates measure the amount of insurance terminated during a particular period. The Company's lapse rate for life insurance in 2002 was 11.9% as compared to a rate of 13.8% for 2001. The 2003 lapse rate has been approximately the same as 2002. At June 30, 2003, $8,930,000 of the Company's stockholders' equity represented the statutory stockholders' equity. The Company cannot pay a dividend to its parent company without the approval of insurance regulatory authorities. The Company has no material commitments for capital expenditures. Item 3. Quantitative and Qualitative Disclosure of Market Risk There have been no significant changes since the annual report Form 10-K filed for the year ended December 31, 2002. Item 4. Controls and Procedures The Company's Chief Executive Officer and its Chief Financial Officer (the "Certifying Officers"), are responsible for establishing and maintaining disclosure controls and procedures for the Company. The Certifying Officers have concluded (based on their evaluation of these controls and procedures as of June 30, 2003) that the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934) are effective. No significant changes were made in the Company's internal controls or in other factors that could significantly affect those controls subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Part II Other Information: Item 1. Legal Proceedings An action was brought against Southern Security Life Insurance Company by National Group Underwriters, Inc. ("NGU") in state court in the State of Texas. The case was removed by the Company to the United States District Court for the Northern District of Texas, Fort Worth Division, with Civil No. 4:01-CV-403-E. An Amended Complaint was filed on or about July 18, 2001. The Amended Complaint asserts that NGU had a contract with the Company wherein NGU would submit applications for certain policies of insurance to be issued by the Company. It is alleged that disputes have arisen between NGU and the Company with regard to the calculation and payment of certain advanced commissions as well as certain production bonuses. NGU alleged that it has been damaged far in excess of the $75,000 minimum jurisdictional limits of this Court. NGU also seeks attorney's fees and costs as well as prejudgment and postjudgment interest. A second amended complaint and a third amended complaint that included a fraud claim were filed. A motion was filed by the Company to dismiss the third amended complaint, including the fraud claim. The court denied the motion. The Company has counterclaimed for what it believes to be a debit balance owing to it pursuant to the relationship between the parties with said counterclaim seeking a substantial amount from NGU (the amount potentially subject to reduction as premiums are received). The Company is also seeking to recover attorney's fees and costs, as well as punitive damages on three of its causes of action. The change of venue motion of the Company was denied. Certain discovery has taken place. The federal case was dismissed per stipulation. The matter was refiled in Texas state court, Tarrant County, Case No. 348 195490 02. The claims of the respective parties are essentially the same as set forth above, which claims against Southern Security Life Insurance Company include fraudulent inducement relative to entering into a contract, fraud, breach of contract, breach of duty of good faith and fair dealing, attorneys' fees and exemplary damages. Further discovery involving the parties is anticipated. The Company intends to vigorously defend the matter as well as prosecute its counterclaim. A trial is presently set for November 2003. The Company is not a party to any other legal proceedings outside the ordinary course of the Company's business or to any other legal proceedings, which, if adversely determined, would have a material adverse effect on the Company or its business. Item 2. Changes in Securities NONE Item 3. Defaults Upon Senior Securities NONE Item 4. Submission of Matters to a Vote of Security Holders NONE Item 5. Other Information NONE Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 3. Articles of Incorporation, as amended, and Bylaws, as amended, dated September 1994, incorporated by reference from the Annual Report filed on Form 10-K for fiscal year ended December 31, 1994. 10. A Revolving Financing Agreement between the Company and the Student Loan Marketing Association, dated September 19, 1996, incorporated by reference from Annual Report on Form 10-K for fiscal year ended December 31, 1997. B. Reinsurance Agreement between the Company and United Group Insurance Company, dated as of December 31, 1992 incorporated by reference from Annual Report on Form 10-K for fiscal year ended December 31, 1992. C. Agency Agreement between the Company and Insuradyne Corporation incorporated by reference from Annual Report on Form 10-K for fiscal year ended December 31, 1993. D. Administrative Services Agreement between the Company and Security National Financial Corporation effective December 17, 1998, incorporated by reference from Annual Report on Form 10-K for fiscal year ended December 31, 1998. E. Agency Agreement between the Company and Security National Mortgage Company dated December 28, 1998 incorporated by reference from Annual Report on Form 10-K for fiscal year ended December 31, 1999. F. Loan Funding and Fee Agreement between the Company and Security National Mortgage Company dated December 28, 1998, incorporated by reference from Annual Report on Form 10-K for fiscal year ended December 31, 1999. 31.1 Certification pursuant to 18 U.S.C. Section 1350 as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification pursuant to 18 U.S.C. Section 1350 as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K: NONE ----------------------------------------- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. REGISTRANT SOUTHERN SECURITY LIFE INSURANCE COMPANY Registrant DATED: August 14, 2003 By: George R. Quist, ---------------- Chairman of the Board and Chief Executive Officer (Principal Executive Officer) DATED: August 14, 2003 By: Stephen M. Sill --------------- Vice President, Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer) EXHIBIT 31.1 CERTIFICATION PURSUANT TO 18 U.S.C. ss. 1350, AS ENACTED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, George R. Quist, certify that: 1. I have reviewed this quarterly Report on Form 10-Q of Southern Security Life Insurance Company; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 14, 2003 By: George R. Quist Chairman of the Board and Chief Executive Officer (Principal Executive Officer) EXHIBIT 31.2 CERTIFICATION PURSUANT TO 18 U.S.C. ss. 1350, AS ENACTED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Stephen M. Sill, certify that: 1. I have reviewed this quarterly Report on Form 10-Q of Southern Security Life Insurance Company; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 14, 2003 By: Stephen M. Sill Vice President, Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer) EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. ss. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Southern Security Life Insurance Company (the "Company") on Form 10-Q for the period ending June 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, George R. Quist, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. George R. Quist Chief Executive Officer August 14, 2003 A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Southern Security Life Insurance Company and will be retained by Southern Security Life Insurance Company and furnished to the Securities and Exchange Commission or its staff upon request. EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. ss. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Southern Security Life Insurance Company (the "Company") on Form 10-Q for the period ending June 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Stephen M. Sill, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. Stephen M. Sill Chief Financial Officer August 14, 2003 A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Southern Security Life Insurance Company and will be retained by Southern Security Life Insurance Company and furnished to the Securities and Exchange Commission or its staff upon request.

SOUTHERN SECURITY LIFE INSURANCE CO 10-Q