10-Q 1 sslic10q0604.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, 2004 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 2,105,235 ------------------------------------- ---------------------------- Title of Class Number of Shares Outstanding as of June 30, 2004 SOUTHERN SECURITY LIFE INSURANCE COMPANY FORM 10-Q QUARTER ENDED JUNE 30, 2004 TABLE OF CONTENTS PART I - FINANCIAL INFORMATION Item 1 Financial Statements Page No. ------ -------- Statement of Operations - Six and Three Months ended June 30, 2004 and 2003 (unaudited).................3 Balance Sheet - June 30, 2004 (unaudited) and December 31, 2003..................................4-5 Statement of Cash Flows - Six Months ended June 30, 2004 and 2003 (unaudited)................................6 Notes to Condensed Financial Statements..................7 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations........ 8-10 Item 3 Quantitative and Qualitative Disclosures About Market Risk.............................................11 Item 4 Controls and Procedures.................................11 PART II - OTHER INFORMATION Other Information....................................11-13 Signature Page..........................................14 Certifications.......................................15-17

See accompanying notes to condensed financial statements. SOUTHERN SECURITY LIFE INSURANCE COMPANY BALANCE SHEET June 30, 2004 December 31, (Unaudited) 2003 Assets: ------------- ----------- ------- Investments: Fixed maturities held-to-maturity $14,071,598 $3,691,064 Securities available-for-sale, at fair value: Fixed maturities 13,121,959 14,213,317 Equity securities 493,949 424,165 Mortgage loans 1,536,641 2,211,183 Policy and student loans 7,845,020 8,131,980 Short-term investments 14,300,429 17,497,249 ----------- ----------- Total investments 51,369,596 46,168,958 ----------- ----------- Cash and cash equivalents 225,153 7,075,394 Accrued investment income 601,034 462,846 Deferred policy acquisition costs 14,007,274 13,624,107 Policyholders' account balances on deposit with reinsurer 6,765,401 6,795,983 Reinsurance receivable 326,452 442,574 Receivables: Agent balances, net 510,743 461,133 Receivable from affiliates 1,317,891 28,091 Other 697,517 292,234 Property and equipment, net, at cost 2,279,037 2,313,119 ----------- ----------- Total assets $78,100,098 $77,664,439 =========== =========== See accompanying notes to condensed financial statements. SOUTHERN SECURITY LIFE INSURANCE COMPANY BALANCE SHEET (Continued) June 30, 2004 December 31, (Unaudited) 2003 Liabilities and Shareholders' Equity: Liabilities: Future policy benefits $4,772,084 $4,279,281 Policyholders' account balances 46,979,607 46,887,592 Unearned revenue 4,416,740 4,334,299 Other policy claims and benefits payable 1,228,766 798,050 Other policyholders' funds, dividend and endowment accumulations 99,858 98,071 Funds held related to reinsurance treaties 1,288,832 1,294,589 Note payable to related parties 1,000,000 1,433,100 Due to affiliated insurance agency 107,260 57,065 General expenses accrued 87,543 81,942 Unearned investment income 357,704 355,650 Other liabilities 119,140 62,798 Income taxes 865,019 967,516 ----------- ----------- Total liabilities 61,322,553 60,649,953 ----------- ----------- Commitments and contingencies -- -- Shareholders' equity: Common stock, $1 par, authorized 3,000,000 shares; issued and out- standing, 2,105,235 shares in 2004 and 2,103,600 shares in 2003 2,105,235 2,103,600 Capital in excess of par 4,619,747 4,614,925 Accumulated other comprehensive income 700,519 835,784 Retained earnings 9,352,044 9,460,177 ----------- ----------- Total shareholders' equity 16,777,545 17,014,486 ----------- ----------- Total liabilities and shareholders' equity $78,100,098 $77,664,439 =========== =========== 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, 2004 (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 2003 Annual Report on Form 10-K for the fiscal year ended December 31, 2003 (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, 2004 and 2003, total comprehensive income (loss) was $(236,939) and $371,047, respectively. For the three months ended June 30, 2004 and 2003, total comprehensive income (loss) was $(359,610) and $298,179, respectively. 3. Earnings (loss) per common share The computation of basic earnings (loss) per common share is based on the weighted average number of shares outstanding during each quarter. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the quarter, plus the common stock equivalents that would arise from the exercise of stock options outstanding, using the treasury stock method and the average market price per share during the quarter. There were no common stock equivalents outstanding during the six months ended June 30, 2004 and 2003, and during the quarters ended June 30, 2004 and 2003. Common stock equivalents are not included in the diluted earnings (loss) per share calculation when their effect is antidilutive. 4. Stock-based compensation The Company measures expense for stock-based employee compensation using the intrinsic value method and provides pro-forma disclosures of net income (loss) and net income (loss) per common share as if the fair value method had been applied in measuring compensation expense. For the six months ended June 30, 2004 and 2003, and for the quarters ended June 30, 2004 and 2003, there was no stock-based employee compensation expense or pro-forma expense. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ---------------------------------------------------------------- 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: 10-Pay Whole Life with an Annuity Rider, final expense products and universal life. The 10-Pay Whole Life with an Annuity Rider product is designed for the higher education 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. 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. 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. In connection with its higher education sales, the Company has 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 in debt and equity securities, mortgage loans, and to warehouse mortgage loans 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, 2004 Compared to Six Months Ended June 30, 2003 Total revenues increased by $121,000, or 2.1%, to $5,727,000 for the six months ended June 30, 2004, from $5,606,000 for the six months ended June 30, 2003. Contributing to this increase was a $218,000 increase in net insurance revenues offset by a $98,000 decrease in net investment income and related party interest income. Net insurance revenues increased by $218,000, or 6.1%, to $ 3,799,000 for the six months ended June 30, 2004, from $3,581,000 for the comparable period in 2003. This increase was primarily the result of an increase in traditional life sales. Net investment income and related party interest income decreased by $98,000, or 4.8%, to $1,927,000 for the six months ended June 30, 2004, from $2,025,000 for the comparable period in 2003. This decrease was due to a reduction in investment yield due to a reduction in higher yielding short-term investments. Benefits and claims increased by $23,000, or 0.8%, to $2,782,000 for the six months ended June 30, 2004, from $2,759,000 for the comparable period in 2003. This increase was primarily due to a reduction in death claims of $192,000 offset by an increase in future policy benefits of $221,000. Amortization of deferred policy acquisition costs decreased by $70,000, or 6.6%, to $995,000 for the six months ended June 30, 2004, from $1,065,000 for the comparable period in 2003. This decrease in amortized expenses was in line with actuarial assumptions. Operating expenses increased by $361,000, or 226.4% to $521,000 for the six months ended June 30, 2004, from $160,000 for the same period in 2003. This increase was primarily the result of insurance recovery of legal fees in 2003 expended for litigation purposes and due to increased marketing expenses in line with increased sales and premiums collected. Second Quarter of 2004 Compared to Second Quarter of 2003 Total revenues increased by $60,000, or 2.1%, to $2,890,000 for the three months ended June 30, 2004, from $2,830,000 for the three months ended June 30, 2003. Contributing to this increase was a $77,000 increase in net insurance revenues and a $49,000 increase in net investment income offset by a $67,000 decrease in related party interest income. Net insurance revenues increased by $77,000, or 4.3%, to $1,883,000 for the three months ended June 30, 2004, from $1,806,000 for the comparable period in 2003. This increase was primarily the result of an increase in traditional life sales. Net investment income and related party interest income decreased by $18,000, or 1.7%, to $1,006,000 for the three months ended June 30, 2004, from $1,024,000 for the comparable period in 2003. This decrease was due to a reduction in investment yield due to a reduction in higher yielding short-term investments. Benefits and claims decreased by $75,000, or 5.3%, to $1,342,000 for the three months ended June 30, 2004, from $1,417,000 for the comparable period in 2003. This increase was primarily due to a reduction in death claims of $110,000 offset by an increase in future policy benefits of $35,000. Amortization of deferred policy acquisition costs decreased by $122,000, or 18.4%, to $542,000 for the three months ended June 30, 2004, from $664,000 for the comparable period in 2003. This decrease in amortized expenses was in line with actuarial assumptions. Operating expenses increased by $232,000, to $241,000 for the three months ended June 30, 2004, from $9,000 for the same period in 2003. This increase was primarily the result of insurance recovery of legal fees in 2003 expended for litigation purposes and due to increased marketing expenses in line with increased sales and premiums collected. 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 the warehousing of 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 $27,194,000 as of June 30, 2004, as compared to $17,904,000 at December 31, 2003. The Company has invested more of its short-term investments in bonds. This represents 53% and 39% of the total investments as of June 30, 2004 and December 31, 2003, 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, 2004, and at December 31, 2003, the Company had investments in bonds in rating categories three through six, which are considered non-investment grade, of $490,000 and $488,000, respectively. The Company has classified certain of its fixed income securities as available for sale, with the remainder classified as held to maturity. However, in accordance with Company policy, any such securities purchased in the future will be classified as held to maturity. Business conditions, however, may develop in the future which may indicate a need for a higher level of liquidity in the investment portfolio. In that event the Company believes it could sell short-term investment grade securities before liquidating higher-yielding longer-term securities. The Company is subject to risk based capital guidelines established by statutory regulators requiring minimum capital levels based on the perceived risk of assets, liabilities, disintermediation, and business risk. At June 30, 2004 and December 31, 2003, 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 2003 was 10.7% as compared to a rate of 11.9% for 2002. The 2004 lapse rate has been approximately the same as 2003. At June 30, 2004, $10,743,902 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 Disclosures about Market Risk There have been no significant changes since the annual report Form 10-K filed for the year ended December 31, 2003. Item 4. Controls and Procedures (a) Evaluation of disclosure controls and procedures - The Company's principal executive officer and principal financial officer have reviewed and evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 240.13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934 (the "Exchange Act") as of the end of the period covered by this quarterly report. Based on that evaluation, the principal executive officer and the principal financial officer have concluded that the Company's disclosure controls and procedures are effective, providing them with material information relating to the Company as required to be disclosed in the reports the Company files or submits under the Exchange Act on a timely basis. (b) Changes in internal controls - There were no significant changes in the Company's internal controls over financial reporting or in other factors that could significantly affect the Company's internal controls and procedures subsequent to the date of their most recent evaluation, nor were there any significant deficiencies or material weaknesses in the Company's internal controls. As a result, no corrective actions were required or undertaken. 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 asserted 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 was alleged that disputes had arisen between NGU and the Company with regard to the calculation and payment of certain commissions as well as certain production bonuses. NGU alleged that it had been damaged far in excess of the $75,000 minimum jurisdictional limits of the federal court. NGU also sought attorney's fees and costs as well as prejudgment and post judgment interest. A second amended complaint and a third amended complaint, which included a fraud claim, were filed. A motion was filed by the Company to dismiss the third amended complaint, including the fraud claim. The court denied the motion. The Company counterclaimed for what it claimed to be a debit balance owing to it pursuant to the relationship between the parties (the amount subject to reduction as premiums are received). The Company also sought to recover attorney's fees and costs, as well as punitive damages on three of its causes of action in the counterclaim. Following initial discovery, the federal case was dismissed by 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 those in federal court, which claims of NGU (estimated to be $2,133,625 through September 30, 2004) include fraudulent inducement relative to entering into a contract, breach of contract as to commissions and production bonuses as well as policy fees, certain dues and debits of other agents, attorney's fees and exemplary damages as well as seeking an accounting with the appointment of an auditor and contesting the interest charges. Certain discovery has taken place, including depositions, since the filing again in state court and further discovery is in process and is anticipated. The Company filed a motion for partial summary judgment with respect to certain items in the case, which motion was denied. The Company anticipates filing another motion for partial summary judgment prior to trial. A trial is presently set for October 2004. The Company intends to vigorously defend the matter as well as prosecute its counterclaim. 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 and Use of Proceeds 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 3.1 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. 10.1 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. 10.2 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. 10.3 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. 10.4 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. 10.5 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. 10.6 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. 10.7 Reinsurance Agreement between the Company and Security National Life Insurance Company dated December 26, 2003, incorporated by reference from Annual Report on Form 10-K for fiscal year ended December 31, 2003. 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 13, 2004 By: George R. Quist, ---------------- Chairman of the Board and Chief Executive Officer (Principal Executive Officer) DATED: August 13, 2004 Stephen M. Sill --------------- Vice President, Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer) Exhibit 31.1 CERTIFICATIONS I, George R. Quist, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Southern Security Life Insurance Company; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15-d-15(e)) for the registrant to 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 registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period covered in which this 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 officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: August 13, 2004 By: George R. Quist Chairman of the Board and Chief Executive Officer Exhibit 31.2 CERTIFICATIONS I, Stephen M. Sill, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Southern Security Life Insurance Company; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15-d-15(e)) for the registrant to 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 registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period covered in which this 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 officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: August 13, 2004 By: Stephen M. Sill Vice President, Treasurer and Chief Financial 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, 2004, 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 results of operations of the Company. George R. Quist Chief Executive Officer August 13, 2004 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, 2004, 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 results of operations of the Company. Stephen M. Sill Chief Financial Officer August 13, 2004

SOUTHERN SECURITY LIFE INSURANCE CO 10-Q