SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

FOR QUARTERLY AND TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly Period Ended September 30, 2003
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number 1-8538

ASCENT ASSURANCE, INC.
(Exact Name of Registrant as Specified in its Charter)

	DELAWARE (State or Other Jurisdiction of Incorporation or Organization)			73-1165000 (I.R.S. Employer Identification No.)
	3100 Burnett Plaza, 801 Cherry Street, Unit 33, Fort Worth, Texas (Address of Principal Executive Offices)			76102 (Zip Code)

Registrant's Telephone Number, including Area Code
(817) 878-3300

Registrant's Shareholder and Investor Relations Telephone Number
(817) 877-3048

Securities Registered Pursuant to Section 12(b) of the Act:
None

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock (par value $.01)
Warrants to purchase Common Stock

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, by check mark whether the Registrant has filed all documents and reports, required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934, subsequent to the distribution of securities under a plan confirmed by a court.

YES X NO

Indicate, by check mark, whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

YES NO X

Common Stock – Par value $0.01; 6,532,100 shares outstanding at November 12, 2003.

ASCENT ASSURANCE, INC.
INDEX TO FORM 10-Q

PART 1 —	FINANCIAL INFORMATION	Page No.

Item 1 —	Financial Statements
	Ascent Assurance, Inc. Condensed Consolidated Balance Sheets at September 30, 2003 and December 31, 2002	3
	Ascent Assurance, Inc. Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2003 and 2002	4
	Ascent Assurance, Inc. Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2003 and 2002	5
	Ascent Assurance, Inc. Consolidated Statement of Changes in Stockholders' Equity for the Nine Months Ended September 30, 2003	6
	Ascent Assurance, Inc. Condensed Consolidated Statements of Cash Flow for the Three and Nine Months Ended September 30, 2003 and September 30, 2002	7
	Notes to Condensed Consolidated Financial Statements	8

Item 2 —	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	General	14
	Operating Results	17
	Financial Condition	20
	Liquidity, Capital Resources and Statutory Capital and Surplus	22

Item 3 —	Quantitative and Qualitative Disclosures About Market Risk	24

Item 4 —	Controls and Procedures	24

PART II —	OTHER INFORMATION

Item 6 —	Exhibits and Reports on Form 8-K	26

ASCENT ASSURANCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30, 2003			December 31, 2002
	(Unaudited)
	(in thousands, except share data)
Assets
Investments:
Fixed Maturities:
Available-for-sale, at market value (amortized cost $93,591 and 95,580)	$	97,457		$	99,051
Short-term investments		9,507			10,877
Other investments (cost $387 and $381)		387			368

Total Investments		107,351			110,296
Cash		2,212			1,878
Accrued investment income		1,248			1,312
Receivables from agents, net of allowance for doubtful accounts of
$5,257 and $4,630		4,812			6,298
Deferred policy acquisition costs		21,962			22,546
Property and equipment, net of accumulated depreciation of $5,527 and $4,986		3,288			3,806
Other assets		8,608			9,304

Total Assets	$	149,481		$	155,440

Liabilities, Preferred Stock and Stockholders' Equity
Liabilities:
Policy liabilities and accruals:
Future policy benefits	$	58,949		$	60,660
Claim reserves		25,801			30,899

Total Policy Liabilities and Accruals		84,750			91,559
Accounts payable and other liabilities		11,512			9,535
Notes payable to bank		1,400			4,660
Notes payable to related party		14,811			13,529
Redeemable convertible preferred stock (Notes 2 and 4)		36,567			-

Total Liabilities		149,040			119,283

Commitments and Contingencies (Note 6)
Redeemable Convertible Preferred Stock (Notes 2 and 4)		-			33,896

Stockholders' Equity:
Common stock ($.01 par value, 30,000,000 shares authorized;
6,532,100 and 6,517,100 shares issued and outstanding)		65			65
Capital in excess of par value		28,079			28,072
Accumulated other comprehensive income		3,866			3,457
Retained deficit		(31,569	)		(29,333	)

Total Stockholders' Equity		441			2,261

Total Liabilities, Redeemable Convertible Preferred Stock
Stockholders' Equity	$	149,481		$	155,440

See the Notes to the Condensed Consolidated Financial Statements.

ASCENT ASSURANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2003			2002			2003			2003
	(in thousands, except per share data)
First-year premium	$	4,306		$	5,715		$	14,583		$	17,603
Renewal premium		21,255			22,156			62,727			67,224

Total premiums		25,561			27,871			77,310			84,827
Net investment income		1,563			1,929			4,798			5,891
Fee and service income		3,023			2,564			8,808			7,729
Other insurance revenues		558			665			1,805			1,996
Net realized gain (loss) on investments		53			84			330			(333	)

Total revenue		30,758			33,113			93,051			100,110

Benefits and claims		17,447			19,525			52,620			60,344
Change in deferred acquisition costs		561			30			583			(243	)
Commissions		2,859			3,596			9,127			10,602
General and administrative expenses		5,416			5,765			16,938			17,511
Fee and service operating expenses		3,044			2,567			8,727			7,399
Taxes, licenses and fees		921			847			2,775			2,825
Interest expense on notes payable		624			629			1,844			1,846
Interest expense on redeemable convertible preferred stock		914			-			914			-

Total expenses		31,786			32,959			93,528			100,284
(Loss) income before income taxes		(1,028	)		154			(477	)		(174	)
Federal income taxes		-			-			-			-

Net (loss) income	$	(1,028	)	$	154		$	(477	)	$	(174	)
Preferred stock dividends		-			826			1,759			2,416

Loss applicable to common stockholders	$	(1,028	)	$	(672	)	$	(2,236	)	$	(2,590	)

Basic and diluted loss per common share	$	(.16	)	$	(.10	)	$	(.34	)	$	(.40	)

Weighted average shares outstanding:
Basic		6,532			6,502			6,530			6,501

Diluted		6,532			6,502			6,530			6,501

See the Notes to the Condensed Consolidated Financial Statements.

ASCENT ASSURANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
		2003			2002			2003			2002

				(in thousands)

Net (loss) income	$	(1,028	)	$	154		$	(477	)	$	(174	)
Other comprehensive income:
Unrealized holding (loss) gain on investments
arising during period		(1,374	)		3,144			739			3,573
Reclassification adjustment of net realized (gain)
loss on investments included in net (loss) income		(53	)		(84	)		(330	)		333

Comprehensive (loss) income	$	(2,455	)	$	3,214		$	(68	)	$	3,732

See the Notes to the Condensed Consolidated Financial Statements.

ASCENT ASSURANCE, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
(in thousands, except share data)


	Common Stock Shares Amount				Capital in Excess Of Par Value		Accumulated Other Comprehensive Income		Retained (Deficit) Earnings			Total Stockholders' Equity

Balance at December 31, 2002		6,517,100	$	65	$	28,072	$	3,457	$	(29,333	)	$	2,261
Net loss										(477	)		(477	)
Preferred Stock dividends										(1,759	)		(1,759	)
Other comprehensive gain								409					409
Amortization of unearned
compensation						7							7
Common Stock issued		15,000		-									-

Balance at September 30, 2003		6,532,100	$	65	$	28,079	$	3,866	$	(31,569	)	$	441

See the Notes to the Condensed Consolidated Financial Statements.

ASCENT ASSURANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
		2003			2002			2003			2002

				(in thousands)

Cash Flow From Operating Activities:
Net (loss) income	$	(1,028	)	$	154		$	(477	)	$	(174	)
Adjustments to reconcile net (loss) income to cash
provided by (used for) operating activities
Decrease in accrued investment income		71			198			64			300
Decrease (increase) in deferred acquisition costs		561			30			583			(243	)
Decrease in receivables from agents		237			176			859			165
Provision for uncollectible agent receivables		302			153			627			465
Decrease (increase) in other assets		139			459			696			(502	)
Decrease in policy liabilities and accruals		(2,394	)		(1,711	)		(6,809	)		(6,818	)
Increase (decrease) in accounts payable and other liabilities		541			(4,037	)		1,977			(3,355	)
Interest expense on redeemable convertible preferred stock		914			-			914			-
Other, net		870			863			2,726			3,231

Net Cash Provided By (Used For) Operating Activities		213			(3,715