UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
COMMISSION FILE NUMBER: 0-2616
CONSUMERS FINANCIAL CORPORATION
1200 CAMP HILL BY-PASS
CAMP HILL, PA 17011
PENNSYLVANIA 23-1666392
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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
filing such requirements for the past 90 days.
Yes XX No
Indicate the number of shares outstanding of each of the issuer s classes
of common stock, as of the latest practicable date.
Outstanding at
Class of Common Stock April 30, 1999
$.01 Stated Value 2,578,295 shares
CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
INDEX
PAGE
PART 1. FINANCIAL INFORMATION NUMBER
Item 1. Financial Statements:
Consolidated Statements of Net Assets in Liquidation - 3
March 31, 1999 and December 31, 1998
Consolidated Statement of Changes in Net Assets in Liquidation - 4
For the Three Months ended March 31, 1999
Consolidated Statement of Operations - 5
For the Period from January 1, 1998 to March 24, 1998
Consolidated Statement of Cash Flows - 6
For the Period from January 1, 1998 to March 24, 1998
Notes to Consolidated Financial Statements 7 - 13
Item 2. Management s Discussion and Analysis of Results of 14 -16
Operations and Financial Condition
PART 2. OTHER INFORMATION
Item 1. Legal Proceedings 17
Item 2. Changes in Securities 17
Item 3. Defaults upon Senior Securities 17
Item 4. Submission of Matters to a Vote of Security Holders 17
Item 5. Other Information 17
Item 6. Exhibits and Reports on Form 8-K 17
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF NET ASSETS IN LIQUIDATION
<TABLE>
<CAPTION> MARCH 31,
1999 December 31,
(in thousands) (UNAUDITED) 1998
<S> <C> <C>
Assets
Investments:
Fixed maturities $1,033 $1,043
Mortgage loans on real estate 1,582 1,600
Other invested assets 5 75
Short-term investments 1,608 1,732
Total investments 4,228 4,450
Cash 177 172
Accrued investment income 20 36
Receivables 21,866 21,590
Prepaid reinsurance premiums 33,313 34,840
Deferred policy acquisition costs 38 50
Property and equipment 1,006 1,018
Other real estate 184 187
Other assets 353 345
Total assets 61,185 62,688
Liabilities and Redeemable Preferred Stock
Liabilities:
Future policy benefits 17,501 17,645
Unearned premiums 33,641 35,163
Other policy claims and benefits payable 3,258 2,882
Other liabilities 1,760 1,800
56,160 57,490
Redeemable preferred stock:
Series A, 8 1/2% cumulative convertible 4,815 4,815
Total liabilities and redeemable preferred stock 60,975 62,305
Net assets in liquidation $210 $383
/TABLE
<PAGE>
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>(in thousands)
<S> <C>
Revenues:
Earned premiums $111
Net investment income 74
Fees from sale of customer accounts 78
Joint venture fees 41
Miscellaneous 42
346
Benefits and expenses:
Policyholder benefits 117
Rent and related costs 60
Salaries, wages and employee benefits 92
Professional fees 62
Taxes, licenses and fees 24
Miscellaneous 53
408
Loss before income tax benefit (62)
Income tax benefit 3
Decrease in unrealized appreciation of debt securities (12)
Preferred stock dividends (102)
Decrease in net assets for the period (173)
Net assets at beginning of period 383
Net assets at March 31, 1999 $210
</TABLE>
(IN PROCESS OF LIQUIDATION)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JANUARY 1, 1998 TO MARCH 24, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
(in thousands, except per share data)
<S> <C>
Revenues:
Premiums written ($4)
Decrease in unearned premiums 87
Premium income 83
Net investment income 60
Net realized investment gains 24
Fees and other income 181
348
Benefits and expenses:
Death and other benefits 83
Operating expenses 368
451
Loss from continuing operations before income tax benefit (103)
Income tax benefit (15)
Loss from continuing operations (88)
Discontinued operations:
Gain on disposal of discontinued businesses (net of income taxes) 112
Net income $24
Basic and diluted income (loss) per common share:
Loss from continuing operations ($0.08)
Discontinued operations 0.04
Net loss ($0.04)
Weighted average number of shares outstanding 2,596
Cash dividends declared per common share NONE
</TABLE>
(IN PROCESS OF LIQUIDATION)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JANUARY 1, 1998 TO MARCH 24, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Cash flows from operating activities:
Net income $24
Adjustments to reconcile net income to net cash provided by operating
activities:
Other amortization and depreciation 24
Change in amounts due reinsurers (142)
Income taxes (15)
Change in other receivables 1,497
Change in other liabilities (376)
Other (434)
Total adjustments 554
Net cash provided by operating activities 578
Cash flows from investing activities:
Purchase of investments (3)
Maturity of investments 1,000
Sale of investments 1,829
Net assets transferred in sale of credit insurance business (3,647)
Net cash used in investing activities (821)
Cash flows from financing activities:
Cash dividends to shareholders (109)
Net cash used in financing activities (109)
Net decrease in cash (352)
Cash at beginning of period 641
Cash at end of period $289
</TABLE>
(IN PROCESS OF LIQUIDATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)
1. OVERVIEW AND BASIS OF ACCOUNTING:
The operating losses incurred by the Company over the past five years have
significantly reduced its net worth and liquidity position. As a result, in
late 1997, the Company signed an agreement to sell its core credit insurance
and related products business, which had been its only remaining business
operation, following the sales in 1994 and 1997 of all of its universal life
insurance business and the 1996 sale of its auto auction business.
Settlement on the sale of the credit insurance business took place in May
1998. The Company s income or loss from operations now consists principally
of (i) earned premium and related costs associated with a small, closed
block of extended service contract business, (ii) fee revenues received from
Life of the South Corporation (LOTS), a Georgia-based financial services
holding company which acquired the Company s credit insurance customer
accounts, (iii) investment income on remaining assets and (iv) corporate
expenses.
On March 24, 1998, the Company s shareholders approved a Plan of Liquidation
and Dissolution, as discussed in Note 2 below. Accordingly, the Company
adopted a liquidation basis of accounting for periods subsequent to March
24, 1998. Under the liquidation basis of accounting, assets are stated at
their estimated net realizable values and liabilities are stated at their
anticipated settlement amounts. Prior to March 25, 1998, the Company
reported the results of its operations and its asset and liability amounts
using accounting principles applicable to going concern entities.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These financial statements
should be read in conjunction with the financial statements and notes
thereto included in the Company's 1998 Form 10-K.
The changes in net assets for the three months ended March 31, 1999 are not
necessarily indicative of the changes to be expected for the full year.
2. DISCONTINUED OPERATIONS AND PLAN OF LIQUIDATION:
On December 30, 1997, the Company entered into an agreement with LOTS,
pursuant to which the Company (i) sold its credit insurance and fee income
accounts to LOTS effective October 1, 1997, (ii) sold its September 30, 1997
inforce block of credit insurance business to American Republic Insurance
Company (American Republic), LOTS financial partner in the transaction,
effective January 1, 1998 and (iii) sold one of its wholly-owned reinsurance
subsidiaries to LOTS as of August 31, 1998. LOTS and the Company also agreed
that, with respect to the Company s principal insurance subsidiary, new
credit insurance business produced by that subsidiary s former customer
accounts, which were transferred to LOTS, will continue to be written on the
policy or certificate forms of the subsidiary until September 30, 1999, or
an earlier date which may be agreed to by the parties. This premium and the
related insurance risk are also being reinsured 100% to American Republic.
The sale of the inforce block of business referred to in (ii) above was
completed on May 13, 1998 after the required approvals of the Company s
preferred and common shareholders and state insurance regulators in the
states of Delaware and Ohio were received. The sale of the reinsurance
subsidiary was approved by the insurance regulators in the State of Arizona
in August 1998 and closing on the sale occurred in September 1998.
The sale of the inforce block of business resulted in an after-tax loss of
approximately $3,665,000, of which $3,919,000 was reflected in the Company s
fourth quarter 1997 financial statements through a write-down of deferred
policy acquisition costs. An offsetting gain on disposal of $254,000, which
resulted from adjustments to certain estimates made in 1997, was included in
the Company s 1998 financial statements.
In addition to approving the sale of the inforce credit insurance business,
at the Special Meeting of Shareholders held on March 24, 1998, the Company s
shareholders also approved a Plan of Liquidation and Dissolution, pursuant
to which the Company intends to liquidate its remaining assets, provide for
all of its liabilities, redeem its preferred stock and distribute all
remaining cash to its common shareholders. Pursuant to the terms of its
agreement with LOTS, the Company is receiving payments from LOTS until
September 30, 2002 based on the amount of credit insurance premiums produced
by the customer accounts sold by the Company to LOTS. The Company may also
receive a payment from a contingency fund established by the parties based
on the claims experience on the inforce credit insurance business from
October 1, 1997 to September 30, 2002. As a result, the final distribution
to the Company s common shareholders will not be made until late in 2002
when the amounts due from LOTS have been received. The Company has made
substantial personnel reductions during the past several years as a result
of the discontinuation of its various businesses. As of May 14, 1999, the
Company had three full-time employees and two part-time employees. During
1999, the Company intends to outsource most of the functions which will
continue to be required.
3. INCOME TAXES:
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant
components of the Company's deferred tax liabilities and assets are as
follows (in 000's):
<TABLE>
<CAPTION> March 31, December 31,
1999 1998
<S> <C> <C>
Deferred tax liabilities:
Fixed maturities $4 $9
Deferred policy acquisition costs 13 17
Other 41 41
58 67
Deferred tax assets:
Future policy benefits 66 64
Net operating loss carryforwards 2,182 2,175
Other 309 259
2,557 2,498
Valuation allowance for deferred tax assets (2,499) (2,431)
58 67
Net deferred tax asset $0 $0
</TABLE>
Significant components of the provision for income taxes are as follows (in
000's):
<TABLE>
<CAPTION> Three Months Ended March 31,
1999 1998
<S> <C> <C>
Current:
Federal ($18)
State 2
Total current (16)
Deferred 1
Income tax benefit for period prior to adoption
of liquidation basis of accounting (15)<PAGE>
Income tax benefit for period subsequent to
adoption of liquidation basis of
accounting:
Current ($3)
Deferred
(3)
Total income tax benefit ($3) ($15)
</TABLE>
The reconciliation of the provision for income taxes and the amount which
would have been provided at statutory rates is as follows (in 000's):
<TABLE>
<CAPTION> For the Period
from
January 1, 1998
to March 24,
1998
<S> <C>
Loss from continuing operations before income tax benefit ($103)
Income tax benefit at 34% statutory rate on pre-tax loss ($35)
Dividends received deduction (4)
State income taxes 2
Items not includable for tax purposes 79
Other, net (57)
Actual income tax benefit ($15)
</TABLE>
4. COMMITMENTS AND CONTINGENCIES:
In 1989, the Company entered into an agreement for the lease of office space.
The facility contains approximately 44,500 square feet of office space. The term
of the lease is ten years with an option to renew for one additional term of
five years. Until March 1994, monthly lease payments were $35,000. In March
1994, the Company exercised its option to acquire a 50% interest in this
property at a price of $1,750,000. The Company continues to lease the portion of
the building it does not own for $17,000 per month through July 1999, although
the Company has subleased a portion of the office space which it does not
otherwise occupy. The building lease is classified as an operating lease. The
Company has no other significant leases.
In connection with the cancellation of a joint venture agreement in 1996, the
Company agreed to pay its former joint venture partner a pro rata share of the
proceeds it receives from the sale of its credit insurance accounts.
Accordingly, over the next three and one-half years, the Company will pay its
former partner approximately 19% of any gross fee revenues received from LOTS
for the sale of its customer accounts.
Reinsured risks would give rise to liability to the insurance subsidiaries only
in the event that the reinsuring company is unable to meet its obligations under
the reinsurance agreements in force.
In November 1997, the Company and a third party reinsurer were sued by a
former general agency with whom the Company had a partnership agreement.
The partnership agreement provided that the agency would market universal life
insurance business for the Company, pursuant to specific criteria established by
the Company, and would also be entitled to a share of the profits, if any, which
arose from the business produced. The claimant is seeking monetary
damages to compensate it for the Company s alleged failure to share profits and
for other alleged losses resulting from the Company s rejection of policy
applications involving unacceptable risks. While management believes this claim
is completely without merit and intends to vigorously defend itself in this
matter, the ultimate outcome of this claim cannot be determined at this time.
The Company has filed two counterclaims against this agency seeking damages for
losses the Company sustained as a result of the agency s alleged
breach of the partnership agreement and to recover an unpaid loan made to the
agency.
Certain claims, suits and complaints arising in the ordinary course of
business have been filed or are pending against the Company or its subsidiaries.
In the opinion of management, based on opinions of legal counsel, adequate
reserves, if deemed necessary, have been established for these matters and
their outcome will not result in a significant effect
on the financial condition or future operating results of the Company or its
subsidiaries. The Company has taken certain income tax positions in previous
years that it believes are appropriate. If such positions were to be
successfully challenged by the Internal Revenue Service, the Company could
incur additional income taxes as well as interest and penalties.
Management believes that the ultimate outcome of any such challenges will not
have a material effect on the Company s financial statements.
5. PER SHARE INFORMATION:
The following table sets forth the computation of basic and diluted per
share data for the period prior to the adoption of the liquidation
basis of accounting.
<TABLE>
<CAPTION> For the Period
from
(in thousands, except per share amounts) January 1, 1998
to March 24,
1998
<S> <C>
Loss from continuing operations ($88)
Preferred stock dividends (109)
Accretion of carrying value of preferred stock (9)
Numerator for basic loss per share - loss attributable to
common shareholders (206)
Effect of dilutive securities 0
Numerator for diluted loss per share ($206)
Denominator for basic loss per share - weighted average shares 2,596
Effect of dilutive securities 0
Denominator for diluted loss per share 2,596
Basic and diluted loss per common share ($0.08)
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
A review of the significant factors which affected the Company s net assets
in liquidation at March 31, 1999 and the changes in its net assets in
liquidation for the three months ended March 31, 1999 is presented below. This
analysis should be read in conjunction with the Consolidated Financial
Statements and the related Notes appearing elsewhere in this Form 10-Q and in
the Company s 1998 Form 10-K.
OVERVIEW
The Company s shareholders approved a Plan of Liquidation and Dissolution at
a Special Meeting held on March 24, 1998. Accordingly, the Company adopted a
liquidation basis of accounting in its financial statements for periods
subsequent to March 24, 1998. Under liquidation accounting rules, assets are
stated at their estimated net realizable values and liabilities are stated at
their anticipated settlement amounts. Prior to March 25, the Company reported
the results of its operations and its asset and liability amounts using
accounting principles applicable to going concern entities.
The agreement with the purchaser of the Company s credit insurance business
provides that the proceeds from the sale of the customer accounts are to be
received over a five-year period ending September 2002, based on the amount of
credit insurance premiums produced by those customer accounts during that
period. The Company may also receive a payment from a contingency fund
established by the Company and the purchaser based on the claims experience on
the inforce credit insurance business from October 1, 1997 to September 30,
2002. Because of these future payments and potential future payments, the
distribution, if any, to the Company s common shareholders will not be made
until late in 2002, when all amounts due from the purchaser have been received.
The Company has made substantial reductions in its number of employees during
the past several years as a result of the discontinuation of its various
businesses. As of May 14, 1999, three people are employed on a full-time basis
by the Company. During the liquidation period, the Company intends to out source
most of the functions which will continue to be required.
The Company s net assets in liquidation declined during the first quarter of
1999 from $383,000 to $210,000 due to preferred shareholder dividends totalling
$102,000 and an excess of expenses over income of $62,000. Expenses for the
period included $47,000 in accounting and actuarial fees incurred in connection
with the Company s year end 1998 financial reporting. In addition, the fees
which the Company receives from the sale of its customer accounts were lower in
the first quarter than the levels expected in the remaining quarters of the
year.
In the first quarter of 1998, prior to the adoption of the liquidation basis
of accounting, the Company s net income was $24,000, which included a $112,000
gain representing an adjustment to the $3,100,000 loss reported in 1997 from the
disposal of the Company s credit insurance business.
RESULTS OF OPERATIONS AND CHANGES IN NET ASSETS
As a result of the sale of its remaining insurance business and the adoption
of the Plan of Liquidation, the Company s income and expenses now consist
principally of (i) fee income from the sale of the Company s customer accounts,
(ii) investment income on existing assets and (iii) corporate expenses,
primarily salaries, professional fees and home office and related real estate
costs. A discussion of the material factors which affected the changes in net
assets in liquidation for the three months ended March 31, 1999 and its results
of operations for the period from January 1, 1998 to March 24, 1998 is presented
below.
For the first quarter of 1999, the Company s expenses exceeded its income by
$62,000. The Company incurred approximately $47,000 in accounting and actuarial
fees related to its year end 1998 financial reporting requirements which will
generally not recur during the remaining quarters of 1999. In addition, fees
received from the sale of the credit insurance customer accounts were lower in
the first quarter than the levels expected in the remaining quarters of the
year. Since the fees are based on the amount of premiums produced by the
customer accounts which were transferred and because credit insurance premium
production is typically lower in the first quarter of the year, the fees were
predictably smaller. Rent and related costs, which totaled $60,000 in the first
quarter, will decline significantly beginning in the third quarter of 1999 when
the Company s lease on one-half of its home office building expires. Net assets
also decreased as a result of the $102,000 quarterly dividend payment to the
Company s preferred shareholders.
ESTIMATED NET EXPENSES DURING LIQUIDATION PERIOD
As indicated above, the liquidation of the Company is expected to continue
for approximately three and one-half more years until all fee payments and other
potential distributions are received from the purchaser of the credit insurance
business. During this period, certain corporate expenses will continue to be
incurred and investment income will continue to be earned on existing invested
funds. The Board of Directors may determine during this period that the amount
of funds available for ultimate distribution to shareholders may be increased by
transferring all of the Company s remaining net assets into a liquidating trust,
in which case the trustees of such trust would be responsible for liquidating
all remaining assets, paying all liabilities and making any distributions to the
preferred and common shareholders. Based on current estimates, which exclude the
potential savings, if any, from the use of a liquidating trust, the Company
believes that its future operating expenses and other costs, including preferred
stock dividends, will exceed fee income and other revenues during the
liquidating period by approximately $100,000 to $200,000. Actual income and
expenses could vary significantly from the present estimates due to
uncertainties as to when certain assets will be liquidated, when the preferred
stock will be redeemed, the level of actual expenses which will be incurred and
the ultimate resolution of various contingencies which may arise.
FINANCIAL CONDITION
The Company s net assets in liquidation were $383,000 at the beginning of
1999 compared to $210,000 at March 31, 1999. Net assets declined primarily as a
result of the $62,000 excess of expenses over income discussed above and the
$102,000 quarterly dividend on preferred stock. The Company s total invested
assets (consisting of bonds, mortgage loans and short-term investments)
decreased from $4,450,000 to $4,228,000 during the first quarter of 1999. The
reduction is attributable to the excess of expenses over income and the
preferred dividends referred to above and to the payment of certain liabilities.
YEAR 2000 COMPLIANCE
Because the Company is no longer conducting any business operations and is
in the process of liquidating its remaining assets, it is therefore relying,
both directly and indirectly, on fewer computer systems than in the past to
maintain all of its financial and other records and to file all required
financial reports with state insurance departments and other regulators. In
fulfilling its continuing, although limited, responsibilities, the Company
directly utilizes only two computer systems, one for its general ledger
accounting and one for maintenance of its shareholder records (since the Company
continues to perform its own stock transfer agent functions). The Company has
received written assurances from both software vendors that their respective
systems have been tested and will operate problem free during and after the year
2000. The Company also receives certain computer generated information from the
purchaser of its credit insurance business, and has obtained a year 2000
certification from the purchaser stating that all of its hardware and software
systems have been tested and are year 2000 compliant. Based on the above,
management does not believe that its very limited operations will be adversely
impacted by year 2000 computer problems.
PART 2. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Except for the matters discussed in Note 4 of the Notes to Consolidated
Financial Statements included elsewhere in this Form 10-Q, neither the
registrant nor its subsidiaries are involved in any pending legal
proceedings other than routine litigation incidental to the normal conduct
of its business nor have any such proceedings been terminated during the
three months ended March 31, 1999.
ITEM 2. CHANGES IN SECURITIES
During the three months ended March 31, 1999, there have been no
limitations or qualifications, through charter documents, loan agreements
or otherwise, placed upon the holders of the registrant's common or
preferred stock to receive dividends.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The registrant has not defaulted in the payment of principal, interest or
in any other manner on any indebtedness and is current with all its
accounts. There is no arrearage in the payment of dividends on the
registrant's preferred stock.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the stockholders of the registrant
during the three months ended March 31, 1999.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required to be filed by Item 601 of Regulation S-K:
None
(b) No reports on Form 8-K were filed by the Company during the three
months ended March 31, 1999.
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.
CONSUMERS FINANCIAL CORPORATION
Registrant
Date May 14, 1999 By /S/
James C. Robertson, President
(Chief Executive Officer)
Date May 14, 1999 By /S/
R. Fredric Zullinger
Senior Vice President,
Chief Financial Officer
and Treasurer<PAGE>
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS YEAR
<FISCAL-YEAR-END> MAR-31-1999 MAR-31-1998 DEC-31-1998
<PERIOD-END> MAR-31-1999 MAR-31-1998 DEC-31-1998
<DEBT-HELD-FOR-SALE> 1,032,593 0 1,042,900
<DEBT-CARRYING-VALUE> 0 0 0
<DEBT-MARKET-VALUE> 0 0 0
<EQUITIES> 0 0 0
<MORTGAGE> 1,582,322 0 1,600,283
<REAL-ESTATE> 0 0 0
<TOTAL-INVEST> 4,227,888 0 4,449,872
<CASH> 176,933 0 171,822
<RECOVER-REINSURE> 33,312,862 0 34,840,247
<DEFERRED-ACQUISITION> 37,500 0 50,000
<TOTAL-ASSETS> 61,184,764 0 62,687,602
<POLICY-LOSSES> 17,500,926 0 17,644,637
<UNEARNED-PREMIUMS> 33,640,989 0 35,162,710
<POLICY-OTHER> 3,258,041 0 2,882,411
<POLICY-HOLDER-FUNDS> 1,760,709 0 1,800,639
<NOTES-PAYABLE> 0 0 0
0 0 0
4,814,610 0 4,814,610
<COMMON> 29,438 0 29,438
<OTHER-SE> 180,151 0 353,157
<TOTAL-LIABILITY-AND-EQUITY> 61,184,764 0 62,687,602
449,654 0 3,003,103
<INVESTMENT-INCOME> 74,473 111,997 962,490
<INVESTMENT-GAINS> 0 23,510 (102,128)
<OTHER-INCOME> 369,779 181,382 1,312,104
<BENEFITS> 566,136 0 2,630,017
<UNDERWRITING-AMORTIZATION> 44,778 0 24,837
<UNDERWRITING-OTHER> 345,000 420,227 2,400,426
<INCOME-PRETAX> (62,008) (103,338) 120,289
<INCOME-TAX> (2,952) (15,106) 511,794
<INCOME-CONTINUING> 0 0 0
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> (59,056) (88,232) (391,505)
<CHANGES> 0 0 0
<NET-INCOME> (59,056) 24,420 (177,719)
<EPS-PRIMARY> 0 0 0
<EPS-DILUTED> 0 0 0
<RESERVE-OPEN> 0 0 0
<PROVISION-CURRENT> 0 0 0
<PROVISION-PRIOR> 0 0 0
<PAYMENTS-CURRENT> 0 0 0
<PAYMENTS-PRIOR> 0 0 0
<RESERVE-CLOSE> 0 0 0
<CUMULATIVE-DEFICIENCY> 0 0 0
</TABLE>
