Bermuda-based Annuity and Life Re (Holdings) Ltd. announced last night that it is in discussions with a third party regarding the possible sale of the company.

The news was revealed in Annuity's third-quarter results statement, which showed a net loss of $275,108, or one cent per share.

Any decision on a sale would have to be approved by shareholders, Annuity said.

The company's third-quarter loss compared to a loss of $1.7 million, or seven cents per share, in the same period last year.

For the first nine months of this year the company recorded a net loss of $566,779, or two cents per share, compared to a net loss of $1.7 million, or seven cents per share, for the nine months ended September 30, 2007.

The company made no investment gains during the three months ended September 30, 2008, as compared to $3,323 during the three months ended September 30, 2007 and $21,017 for the nine months ended September 30, 2008 versus $94,780 for the nine months ended September 30, 2007.

Net investment income was significantly reduced as a result of the settlement of the arbitration announced on February 27, 2008 and the cash distribution to shareholders made on May 15, 2008.

Gross unrealised gains on the company's investments were $106,758 as of September 30, 2008, compared to gross unrealised gains of $281,209 at December 31, 2007.