SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange
Act of 1934
For the quarterly period from July 1, 1996 to September 30, 1996
Commission File No. 0-3978
UNICO AMERICAN CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 95-2583928
(State or other jurisdiction of (I.R.S. Employee
incorporation or organization)
Identification No.)
23251 Mulholland Drive, Woodland Hills, California 91364
(Address of Principal Executive Offices) (Zip Code)
(818) 591-9800
Registrant's telephone number
Securities registered pursuant to Section 12(b) of the Act:
None
(Title of each class)
Securities registered pursuant to section 12(g) of the Act:
Common Stock, No Par Value
(Title of Class)
No Change
(Former name, former address and former fiscal year,
if changed since last report)
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
5,972,868
Number of shares of common stock outstanding as of November 8 , 1996
1 of 11
<PAGE>
FINANCIAL STATEMENTS FINANCIAL INFORMATION PART 1
UNICO AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, March 31,
1996 1996
------------- -----------
<S> <C> <C>
ASSETS
Investments
Available for sale:
Fixed maturities, at market value
(amortized cost: September 30, 1996
$74,604,987; March 31, 1996 $68,085,376 $75,185,115 $68,888,277
Equity securities at market (cost: September
30, 1996 $989,450; March 31, 1996 $995,237) 930,000 998,075
Short-term investments, at cost 3,299,548 3,466,032
---------- ----------
Total Investments 79,414,663 73,352,384
Cash 367,804 154,346
Accrued investment income 1,295,075 1,261,049
Accounts and notes receivable, net 8,693,348 8,141,243
Reinsurance recoverable:
Paid losses and loss adjustment expenses 95,033 212,368
Unpaid losses and loss adjustment expenses 3,424,968 4,324,305
Prepaid reinsurance premiums 1,474,501 1,363,624
Deferred policy acquisition costs 4,615,668 4,333,708
Property and equipment (net of accumulated 247,570 278,618
depreciation)
Deferred income taxes 1,722,084 1,523,778
Other assets 372,217 871,954
----------- ----------
Total Assets $101,722,931 $95,817,377
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Unpaid losses and loss adjustment expenses $39,762,333 $37,006,458
Unearned premiums 20,955,161 19,646,502
Advance premiums 1,538,285 1,588,628
Funds held as security for performance 753,769 758,135
Accrued expenses and other liabilities 2,379,656 2,332,398
Income taxes payable 28,735 98,097
Note payable - bank 1,100,001 2,000,001
---------- ----------
Total Liabilities $66,517,940 $63,430,219
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, no par - authorized 10,000,000
shares issued and outstanding shares 5,972,868 at
September 30, 1996 and 5,957,738 at March 31, 1996 2,836,026 2,834,801
Net unrealized investment gains 343,647 531,787
Retained earnings 32,025,318 29,020,570
---------- ----------
Total Stockholders' Equity 35,204,991 32,387,158
---------- ----------
Total Liabilities and Stockholders' Equity $101,722,931 $95,817,377
=========== ==========
</TABLE>
See notes to consolidated financial statements.
2 of 11
<PAGE>
UNICO AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
---------------------- ----------------------
1996 1995 1996 1995
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
REVENUES
Insurance Company Revenues
Premium earned $9,847,786 $9,394,397 $19,229,918 $18,907,572
Premium ceded 953,363 1,725,645 1,969,295 3,726,469
Net premium earned 8,894,423 7,668,752 17,260,623 15,181,103
Investment income 1,043,134 898,222 2,021,313 1,792,068
Net realized investment
gains - 7,192 191,174 7,192
Other income 60 - 120 713
--------- --------- ---------- ----------
Total Insurance Company
Revenues 9,937,617 8,574,166 19,473,230 16,981,076
Other Revenues from Insurance
Operations
Gross commissions and fees 1,499,851 1,443,159 2,972,956 2,850,792
Investment income 47,515 37,969 80,831 76,004
Finance charges and late
fees earned 298,460 341,419 591,632 653,284
Other income 1,456 3,488 4,947 8,637
---------- ---------- ---------- ----------
Total Revenues 11,784,899 10,400,201 23,123,596 20,569,793
---------- ---------- ---------- ----------
EXPENSES
Losses & loss adjustment
expenses 5,159,096 4,272,103 9,874,998 8,394,877
Policy acquisition costs 2,269,463 2,127,910 4,518,914 4,213,557
Salaries and employee
benefits 928,726 904,675 1,849,583 1,828,996
Commissions to agents/brokers 312,200 331,882 643,690 657,772
Other operating expenses 598,293 760,043 1,325,194 1,643,154
---------- --------- ---------- ----------
Total Expenses 9,267,778 8,396,613 18,212,379 16,738,356
---------- --------- ---------- ----------
Income Before Taxes 2,517,121 2,003,588 4,911,217 3,831,437
Income Tax Provision 768,380 589,443 1,488,382 1,089,986
--------- --------- --------- ---------
Net Income $1,748,741 $1,414,145 3,422,835 2,741,451
========== =========
Retained Earnings April 1, 29,020,570 23,490,124
Dividends Paid to Stockholders (418,087) (417,035)
---------- ----------
Retained Earnings September 30, $32,025,318 $25,814,540
========== ==========
PER SHARE DATA
Weighted Average Shares
Outstanding 6,248,511 6,141,924 6,236,677 6,117,200
Earnings Per Share $0.28 $0.23 $0.55 $0.45
</TABLE>
See notes to consolidated financial statements
3 of 11
<PAGE>
UNICO AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30,
<TABLE>
<CAPTION
1996 1995
------ ------
<S> <C> <C>
Net Income $3,422,835 $2,741,451
Adjustments to reconcile net income to net
cash from operations
Depreciation & amortization 55,071 53,880
Bond amortization, net 289,430 295,974
Net realized (gain) on sale of securities (191,174) (7,192)
Changes in assets and liabilities
Premium, notes & investment income receivable (586,131) (553,577)
Reinsurance recoverable 1,016,672 (594,215)
Prepaid reinsurance premiums (110,877) 1,133,124
Deferred policy acquisitions costs (281,960) (12,114)
Other assets 499,737 (194,154)
Reserve for unpaid losses & loss
adjustment expenses 2,755,875 2,870,228
Unearned premium reserve 1,308,659 (576,523)
Funds held as security & advanced premiums (54,709) 28,606
Accrued expenses & other liabilities 47,258 357,338
Income taxes current/deferred (170,747) (457,273)
---------- ---------
Net Cash Provided from Operations 7,999,939 5,085,553
--------- ----------
Investing Activities
Purchase of fixed maturity investments (10,950,919) (12,504,658)
Proceeds from maturity of fixed
maturity investments 4,128,378 8,442,840
Purchase of equity securities - cost (2,253,112) (299,840)
Proceeds from sale of fixed securities 2,450,073 324,189
Net decrease in short-term investments 179,983 174,614
Additions to property & equipment (24,022) (20,981)
---------- ---------
Net Cash (Used) by Investing Activities (6,469,619) (3,883,836)
---------- ----------
Financing Activities
Proceeds from issuance of common stock 1,225 -
Repayment of note payable - bank (900,000) (305,000)
Repayment of note payable - related - party - (500,000)
Dividends paid to shareholders (418,087) (417,035)
-------- --------
Net Cash (Used) by Financing Activities (1,316,862) (1,222,035)
---------- ----------
Net increase (decrease) in cash 213,458 (20,318)
Cash at beginning of period 154,346 173,232
-------- -------
Cash at End of Period $367,804 $152,914
======== ========
Supplemental cash flow information
Cash paid during the period for:
Interest $60,867 $175,497
Income taxes $1,665,000 $1,234,615
</TABLE>
See notes to consolidated financial statements.
4 of 11
<PAGE>
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Unico American Corporation is an insurance holding company. Unico
American and its subsidiaries, all of which are wholly owned (the
"Company"), provide, primarily in California, property, casualty,
health and life insurance, and related premium financing.
Principles of Consolidation
The consolidated financial statements include the accounts of Unico
American Corporation and its subsidiaries. All significant
inter-company accounts and transactions have been eliminated in
consolidation.
Basis of Presentation
The consolidated financial statements have been prepared in conformity
with generally accepted accounting principles (GAAP) which differ in
some respects from those followed in reports to insurance regulatory
authorities.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosure of
certain assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. While every effort is made to ensure the integrity of such
estimates, actual results could differ from those estimates.
Investments
Although all of the Company's fixed maturity investments are classified
as available-for-sale and are stated at market value, the Company's
investment guidelines place primary emphasis on buying and holding
high-quality investments. Investments in equity securities are
carried at market value. The unrealized gains or losses from fixed
maturities and equity securities are reported as a separate component
of stockholders' equity, net of any deferred tax effect. Short-term
investments are carried at cost which approximates market value. When
a decline in the value of a fixed maturity or equity security is
considered other than temporary, a loss is recognized in the
consolidated statement of operations. Realized gains and losses are
included in the consolidated statements of operations based upon the
specific identification method.
Property and Equipment
Property and equipment are stated at cost less accumulated
depreciation. Depreciation is computed using accelerated depreciation
methods over the estimated useful lives of the related assets.
Income Taxes
The provision for income taxes is computed on the basis of income as
reported for financial reporting purposes under generally accepted
accounting principles. Deferred income taxes arise principally from
certain assets and liabilities which are recognized for income tax
purposes in different periods than for financial statements.
5 of 11
<PAGE>
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE 2 - RESTRICTED FUNDS
As required by law, the Company segregates from its operating accounts
premiums collected from insureds into separate trust accounts. As of
September 30, 1996, these trust funds represent $2,674,524 of the
Company's cash and short-term investments. In addition, $725,000 of
the Company's investments represent statutory deposits of Crusader
which are assigned to and held by the California State Treasurer and
the Insurance Commissioner of the State of Nevada. These deposits are
required for Crusader to write certain lines of business in California
and for its admission in states other than California.
NOTE 3 - FUNDS HELD AS SECURITY
Funds held as security for performance represent funds received in
order to guarantee the contractual obligations entered into with
customers.
NOTE 4 - STATUTORY CAPITAL AND SURPLUS
As of September 30, 1996, Crusader's statutory capital and surplus were
deemed sufficient to support its present insurance premium writings.
NOTE 5 - INCENTIVE STOCK OPTION PLAN
The Company's 1985 stock option plan provided for the grant of
"incentive stock options" to officers and key employees. The plan
covers an aggregate of 1,500,000 shares of the Company's common stock
(subject to adjustment in the case of stock splits, reverse stock
splits, stock dividends, etc.). As of September 30, 1996, 646,620
options were outstanding of which 519,147 were currently exercisable.
During the quarter ended September 30, 1996, options on 200 shares of
common stock were exercised and 4,650 options expired. There are no
additional options available for future grant under the 1985 plan.
NOTE 6 - CLAIMS AND LITIGATION
The Company, by virtue of the nature of the business conducted by it,
becomes involved in numerous legal proceedings in which it may be
named as either plaintiff or defendant. The Company is required to
resort to legal proceedings from time-to-time in order to enforce
collection of premiums and other commissions or fees for the services
rendered to customers or to their agents. These routine items of
litigation do not materially affect the Company and are handled on a
routine basis by the Company through its general counsel.
Likewise, the Company is sometimes named as a cross-defendant in
litigation which is principally directed against that insurer who has
issued a policy of insurance directly or indirectly through the
Company. Incidental actions are sometimes brought by customers or
other agents which relate to disputes concerning the issuance or
non-issuance of individual policies. These items are also handled on
a routine basis by the Company's general counsel, and the do not
materially affect the operations of the Company. Management is
confident that the ultimate outcome of pending litigation should not
have an adverse effect on the Company's consolidated operation or
financial position.
6 of 11
<PAGE>
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE 7 - LEASE COMMITMENTS AND CONTINGENCIES
The Company presently occupies a 46,000 square foot building located at
23251 Mulholland Drive, Woodland Hills, California, under a master
lease expiring March 31, 2007. The lease provides for an annual gross
rental of $1,025,952. Erwin Cheldin, the Company's president,
chairman and principal stockholder, is the owner of the building. The
terms of the lease at inception and at the time the lease extension
was executed were at least as favorable to the Company as could have
been obtained from unaffiliated third parties. The Company utilizes
for its own operation 100% of the space it leases.
NOTE 8
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all necessary adjustments, which consist
of normal recurring adjustments, to present fairly the results of
operations for the three and six months ended September 30, 1996, and
September 30, 1995.
NOTE 9
The results of operations for the three and six months ended September
30, 1996, should not be considered as necessarily indicative of the
results to be expected for the full year.
7 of 11
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(a) Liquidity and Capital Resources:
Due to the nature of the Company's business (insurance and insurance
services) and whereas Company growth does not normally require
material reinvestment of profits into property or equipment, the cash
flow generated from operations usually results in improved liquidity
for the Company.
Crusader's losses and loss adjustment expense payments are the most
significant cash flow requirement of the Company. These payments are
continually monitored and projected to ensure that the Company has the
liquidity to cover these payments without the need to liquidate its
investments. As of September 30, 1996, the Company had cash and cash
investments of $79,261,789 (at amortized cost) of which $75,900,556
(96%) were investments of Crusader.
As of the quarter ended September 30, 1996, the Company had invested
$74,604,987 (at amortized cost) or 95% of its invested assets in fixed
maturity obligations. Although all of the Company's fixed maturity
investments are classified as available-for-sale, the Company's
investment guidelines place primary emphasis on buying and holding
high quality investments. The balance of the Company's investments
were in equity securities of a regional telephone company and a
regional utility company and high-quality short-term investments that
include a U.S. treasury bill, bank money market accounts, certificates
of deposit, commercial paper and a short-term treasury money market
fund.
The Company's investments in fixed maturity obligations of $74,604,987
(at amortized cost) include $39,793,222 (53%) of tax exempt,
pre-refunded state and municipal bonds, $21,442,793 (29%) of U.S.
treasury securities, $12,570,972 (17%) of high quality industrial
bonds and $798,000 (1%) of FDIC insured certificates of deposit. The
tax exempt interest income earned for the three and six months ended
September 30, 1996, was $454,961 and $898,218 respectively. The tax
exempt interest income earned for the three and six months ended
September 30, 1995, was $432,558 and $927,013 respectively.
The Company's investment policy limits investments in any one company
to no more than $1,000,000. This limitation excludes bond premiums
paid in excess of par value and U.S. Government or U.S. Government
guaranteed issues. All Unico investments are high-grade investment
quality.
On August 14, 1996, the Company paid the $0.07 (seven cents) per common
share cash dividend which was declared by the Board of Directors on
May 14, 1996, to shareholders of record at the close of business on
July 31, 1996.
The Company's premium finance subsidiary, American Acceptance
Corporation ("AAC"), has a bank credit line of $6,000,000 with a
variable rate of interest based on fluctuations in the London Inter
Bank Offered Rate ("LIBOR"). This credit line is only used to provide
AAC with the additional funds it requires to finance insurance
premiums. AAC has been paying down its bank note payable from its
internal cash flow as well as from intercompany loans from Unico. The
bank note payable has been reduced from $2,000,001 as of March 31,
1996 to $1,100,001 as of September 30, 1996.
8 of 11
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
(a) Liquidity and Capital Resources (continued)
Although material capital expenditures may also be funded through
borrowings, the Company believes that cash generated from operations,
plus cash and short-term investments at the quarter end, net of trust
restrictions of $2,674,524 and statutory deposits of $725,000, should
be sufficient to meet its operating requirements during the next
twelve months without the necessity of borrowing additional funds.
Crusader is restricted in the amount of dividends it may pay to its
parent, Unico, without prior regulatory approval by the California
Insurance Department. Crusader anticipates that it will not be
required to obtain prior regulatory approval for any dividend which it
may pay to Unico in the next twelve months.
There are no material commitments for capital expenditures as of the
date of this report.
(b) Results of Operations:
All comparisons made in this discussion are comparing the three and six
months ended September 30, 1996 to the three and six months ended
September 30, 1995, unless otherwise indicated.
The Company recognized net income of $1,748,741 for the three months
and $3,422,835 for the six months ended September 30, 1996, compared
to net income of $1,414,145 for the three months and $2,741,451 for
the six months ended September 30, 1995. Total revenues increased
$1,384,698 (13%) for the three months and $2,553,803 (12%) for the six
months ended September 30, 1996, when compared to the three and six
months ended September 30, 1995. The increase in net income was
primarily the result of:
a) An increase in Crusader's underwriting profit (net earned
premium less loss and loss adjustment expenses and policy
acquisition costs) of $197,125 (16%) for the three months and
$294,042 (11%) for the six months ended September 30, 1996.
b) An increase in investment income (excluding realized investment
gains) of $154,458 (16%) for the three months and $234,072 (13%)
for the six months ended September 30, 1996.
c) An decrease in other operating expenses of $161,750 (21%) for
the three months and $317,960 (19%) for the six months ended
September 30, 1996.
d) An increase in realized investment gains for the six months
ended September 30, 1996 of $183,982.
Premium earned before reinsurance increased $453,389 (5%) for the three
months and $322,346 (2%) for the six months ending September 30, 1996.
Crusader's primary line of business is its Commercial Package
business, representing 96% of all premiums earned in the three months
and 97% of all premiums earned in the six months ended September 30,
1996. The Commercial Package business continued to grow, with earned
premium increasing $563,562 (6%) to $9,495,710 for the three months
and $1,270,403 (7%) to $18,694,071 for the six months ended September
30, 1996 as compared to the corresponding periods of the prior year.
Crusader has been intentionally reducing its Other Liability line of
business in an effort to improve the utilization of its surplus. This
has resulted in a reduction of Other Liability earned premium of
$187,582 for the three months and $972,701 for the six months ended
September 30, 1996 as compared to the corresponding periods of the
prior year.
9 of 11
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
(b) Results of Operations (continued)
Ceded premium decreased from 18% of premium earned to 10% for the three
months and decreased from 20% of premium earned to 10% for the six
months primarily as a result of the reduction in Other Liability
premium which cedes a higher percentage of premium than Crusader's
other lines, and to reduced reinsurance rates due to favorable
reinsurance loss experience and an increase in loss retention from
$100,000 to $150,000 on April 1, 1995.
Losses and loss adjustment expenses were 58% of net premium earned for
the three months and 57% for the six months ended September 30, 1996,
compared to 56% of net premium earned for the three months and 55% of
net premiun earned for the six months ended September 30, 1995.
Crusader has continued to experience favorable development of prior
period losses.
Policy acquisition costs consist of commissions, premium taxes,
inspection fees, and certain other underwriting costs which are
directly or indirectly related to the production of Crusader insurance
policies. These costs include both Crusader expenses and allocated
expenses of other Unico subsidiaries. Crusader's reinsurer pays
Crusader a ceding commission which is primarily a reimbursement of the
acquisition cost related to the ceded premium.
Policy acquisition costs, net of ceding commission, are deferred and
amortized as the related premiums are earned. These costs increased
by $141,553 (7%) for the three months ended September 30, 1996 and
$305,357 (7%) for the six months ended September 30, 1996, compared to
the three and six months ended September 30, 1995. The increase in
costs is due to the related increase in Crusader's net earned premium.
Investment income, excluding realized investment gains, increased
$154,458 (16%) to $1,090,649 for the three months and increased
$234,072 (13%) to $2,102,144 for the six months ended September 30,
1996, compared to the three and six months ended September 30, 1995.
This increase was primarily due to a 16% increase (at amortized cost)
in invested assets.
Other operating expenses decreased $161,750 (21%) for the three months
and $317,960 (19%) for the six months ended September 30, 1996
compared to the three and six months ended September 30, 1995. The
decrease in expenses for the three months was primarily due to a
$48,286 decrease in interest expense due to decreased borrowings, and
a $38,175 decrease in insurance department examination fees. The
decrease in expenses for the six months was primarily due to a
$114,630 decrease in interest expense due to decreased borrowings,
and a $54,289 decrease in insurance department examination fees.
There were no significant changes in other revenue or expense items.
The effect of inflation on net income of the Company during the three
and six months ended September 30, 1996, and 1995 was not significant.
10 of 11
<PAGE>
PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) On September 6, 1996 the Company held its Annual Meeting of
Stockholders.
(b) Proxies for the meeting were solicited pursuant to Regulation
14 under the Securities Exchange Act of 1934; there was no
solicitation in opposition to nominees of the Board of Directors
as listed in the Proxy Statement and all such nominees were
elected.
(c) At the meeting, the following persons were elected by the vote
indicated (there were no abstentions or broker non-votes) as
directors to serve until the next annual meeting of shareholders
and until their successors are duly elected and qualified:
<TABLE>
<CAPTION>
Against or
Name For Withheld
---- --------- ----------
<S> <C> <C>
Erwin Cheldin 5,646,818 3,431
Lester A. Aaron 5,646,815 3,434
Cary L. Cheldin 5,644,306 5,943
George C. Gilpatrick 5,645,845 4,404
Roger H. Platten 5,645,845 4,404
David A. Lewis 5,645,858 4,391
Bernard R. Gans 5,573,058 77,191
</TABLE>
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K:
None
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 there unto authorized.
UNICO AMERICAN CORPORATION
Date: November 11, 1996 By: /s/ ERWIN CHELDIN
Erwin Cheldin
Chairman of the Board, President and Chief
Executive Officer, (Principal Executive Officer)
Date: November 11, 1996 By: /s/ LESTER A. AARON
Lester A. Aaron
Treasurer, Chief Financial Officer,(Principal
Accounting and Principal Financial Officer)
11 of 11
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> SEP-30-1996
<DEBT-HELD-FOR-SALE> 75,185,115
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 930,000
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 79,414,663
<CASH> 367,804
<RECOVER-REINSURE> 95,033
<DEFERRED-ACQUISITION> 4,615,668
<TOTAL-ASSETS> 101,722,931
<POLICY-LOSSES> 39,762,333
<UNEARNED-PREMIUMS> 20,955,161
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 2,292,054
<NOTES-PAYABLE> 1,100,001
0
0
<COMMON> 2,836,026
<OTHER-SE> 32,368,965
<TOTAL-LIABILITY-AND-EQUITY> 101,722,931
17,260,623
<INVESTMENT-INCOME> 2,102,144
<INVESTMENT-GAINS> 191,174
<OTHER-INCOME> 3,569,655
<BENEFITS> 9,874,998
<UNDERWRITING-AMORTIZATION> 4,518,914
<UNDERWRITING-OTHER> 3,818,467
<INCOME-PRETAX> 4,911,217
<INCOME-TAX> 1,488,382
<INCOME-CONTINUING> 3,422,835
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,422,835
<EPS-PRIMARY> 0.55
<EPS-DILUTED> 0.55
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
