Beleaguered Bermuda life insurance company Annuity and Life Re (Holdings) Ltd. reported a net loss of $3.1 million or 12 cents per share for the three-month period ended September 30. This compares to a net loss of $3.8 million or 15 cents share for the three month period ended September 30, 2003.

Annuity and Life Re (Holdings), Ltd. was the first life reinsurer to open for business on the Island in 1998, but it has in recent times faced an annuity reinsurance contract dispute with Transamerica, shareholder litigation and GMIB/GMDB exposure through its reinsurance agreement with CIGNA. It was de-listed from the New York Stock Exchange on July 29 because it was in breach of minimum listing requirements after its share price fell to trading below $1 for a prolonged period.

In an earnings statement this week, the company said that the third quarter 2004 loss includes a $2.4 million charge related to the recapture of its GMDB/GMIB agreement with CIGNA. It also recorded a net loss of $2.1 million from the company?s annuity reinsurance agreement with Transamerica, a loss of $700,000 from its second largest life reinsurance agreement and a loss of $300,000 from its second largest annuity reinsurance agreement.

?These losses were partially offset by income from some of the company?s other remaining life reinsurance agreements, including income of approximately $2.1 million from the company?s largest life reinsurance agreement,? the statement said.

Jay Burke, the Company?s Chief Executive Officer, said: ?We are very pleased that the company and CIGNA were able to work together to resolve the long-standing problems with the GMDB/GMIB agreement.

?We still have the Transamerica annuity reinsurance agreement, which continues to negatively impact the company?s operating results and cash position, but we are seeking to work with Transamerica to find a mutually acceptable resolution to the problems created by that agreement.?

Unrealised gains on the company?s investments were $1 million as of September 30, as compared to gains of $1.8 million at December 31, 2003.

The company?s investment portfolio currently maintains an average credit quality of AA.

Cash used by operations for the nine months ended September 30 was $57 million as compared to cash used by operations of $98 million for the nine-month period ended September 30, 2003.

The cash used by operations in the nine months ended September 30 includes payments made in connection with the settlement of the Met Life recapture, payments made to Transamerica under an annuity reinsurance agreement and payments made to CIGNA related to the recapture of the company?s GMDB/GMIB reinsurance agreement with CIGNA.

Book value per share at September 30 was $4.78, as compared to $5.11 at December 31, 2003.

The company adopted SOP 03-1 effective as of January 1, which required it to increase its liabilities by approximately $36.6 million and its deferred acquisition costs by approximately $36.2 million.

As a result, the company?s tangible book value, which is GAAP book value less deferred acquisition costs, declined from $2.50 per share at December 31, 2003, to $1.12 as of January 1. Tangible book value per share has increased to $1.15 at September 30.