320335--2/26/2010--TORCHMARK

related topics

{regulation, government, change}

{system, service, information}

{capital, credit, financial}

{condition, economic, financial}

{loss, insurance, financial}

{regulation, change, law}

{operation, natural, condition}

{product, market, service}

{debt, indebtedness, cash}

{financial, litigation, operation}

Risks Related to Our Business Product Marketplace and Operational Risks: The development and maintenance of our various distribution systems are critical to growth in product sales and profits. Economic conditions may materially adversely affect our business and results of operations. Variations in expected to actual rates of mortality, morbidity, persistency, and healthcare utilization could negatively affect our results of operations and financial condition. A ratings downgrade or other negative action by a rating agency could materially and negatively affect our business, financial condition and results of operations. Our life products are sold in selected niche markets. We are at risk should any of these markets diminish. Congress could make changes to the Medicare program which could impact our Medicare Supplement and Medicare Part D prescription drug insurance business. Medicare Supplement insurance constitutes a significant portion of our in-force health insurance business. Our Medicare Supplement business could be negatively affected by alternative healthcare providers. Our Medicare Supplement and other health insurance business is subject to intense competition primarily on the basis of price which could restrict future sales. Our health insurance business is at risk in the event of government-sponsored under-age-65 health insurance. An inability to obtain timely and appropriate premium rate increases for the health insurance policies we sell due to regulatory delay could adversely affect our results of operations and financial condition. Proposals for national health care reform could have a negative effect on the profitability or marketability of the health insurance products that we sell. Our variable annuity business is at risk should equity markets decline. Our investments are subject to market and credit risks. Difficulties in the business of particular issuers or in industries in which we hold investments could cause significant downgrades, delinquencies and defaults in our investment portfolio, potentially resulting in lower net investment income and increased realized and unrealized investment losses. A decline in interest rates could negatively affect income. Our liquidity to fund operations is substantially dependent on funds available, primarily dividends, from our insurance subsidiaries. Adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs or access capital, as well as affect our cost of capital. Our businesses are heavily regulated, and changes in regulation may reduce our profitability and growth. Changes in U.S. federal income tax law could increase our tax costs. Changes in accounting standards issued by accounting standard-setting bodies may adversely affect our financial statements and reduce our profitability. If we fail to comply with restrictions on patient privacy and information security, including taking steps to ensure that our business associates who obtain access to sensitive patient information maintain its confidentiality, our reputation and business operations could be materially adversely affected. Litigation could result in substantial judgments against us or our subsidiaries. Our business is subject to the risk of the occurrence of catastrophic events. The occurrence of computer viruses, network security breaches, disasters, or other unanticipated events could affect the data processing systems of Torchmark or its subsidiaries and could damage our business and adversely affect our financial condition and results of operations.

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320335--2/26/2010--TORCHMARK_CORP