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, 1997 to September 30, 1997
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
6,153,203
Number of shares of common stock outstanding as of November 10, 1997
1 of 12
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
UNICO AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
Investments
Available for sale:
Fixed maturities, at market value (amortized cost: September
30, 1997 $85,836,196; December 31, 1996 $75,984,966 $87,292,984 $77,109,214
Equity securities at market (cost: September 30, 1997
$230,460; December 31, 1996 $0) 215,630 -
Short-term investments, at cost 3,554,947 4,861,745
----------- -----------
Total Investments 91,063,561 81,970,959
Cash 157,782 82,637
Accrued investment income 1,605,064 1,443,551
Accounts and notes receivable, net 7,647,754 8,898,839
Reinsurance recoverable:
Paid losses and loss adjustment expenses 402,060 452,943
Unpaid losses and loss adjustment expenses 2,087,779 2,629,019
Prepaid reinsurance premiums 1,252,781 1,647,806
Deferred policy acquisition costs 4,967,800 4,953,085
Property and equipment (net of accumulated depreciation) 210,841 229,972
Deferred income taxes 1,470,430 1,503,655
Other assets 677,811 638,856
----------- -----------
Total Assets $111,543,663 $104,451,322
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Unpaid losses and loss adjustment expenses $42,356,119 $39,740,865
Unearned premiums 21,991,362 22,120,241
Advance premiums 1,337,113 1,358,671
Funds held as security for performance 731,947 730,426
Accrued expenses and other liabilities 2,283,962 2,395,699
Income taxes payable 107,874 -
Note payable - bank - 750,001
---------- ----------
Total Liabilities $68,808,377 $67,095,903
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, no par - authorized 10,000,000 shares issued and outstanding
shares 6,153,203 at September 30, 1997
and 6,028,781 at December 31, 1996 2,836,781 2,836,422
Net unrealized investment gains 951,692 742,004
Retained earnings 38,946,813 33,776,993
---------- ----------
Total Stockholders' Equity 42,735,286 37,355,419
----------- -----------
Total Liabilities and Stockholders' Equity $111,543,663 $104,451,322
=========== ===========
</TABLE>
See notes to consolidated financial statements.
2 of 12
<PAGE>
UNICO AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
------ ------ ------ ------
<S> <C> <C> <C> <C>
REVENUES
Insurance Company Revenues
Premium earned $10,997,409 $9,847,786 $31,784,235 $28,524,110
Premium ceded 1,856,727 953,363 4,410,728 3,049,660
---------- --------- ----------- -----------
Net Premium Earned 9,140,682 8,894,423 27,373,507 25,474,450
Investment income 1,239,020 1,043,134 3,584,168 2,979,269
Net realized investment gains 24,174 - 25,093 210,716
Other income 223 60 383 150
---------- --------- ---------- ----------
Total Insurance Company Revenues 10,404,099 9,937,617 30,983,151 28,664,585
Other Revenues from Insurance Operations
Gross commissions and fees 1,422,735 1,499,851 4,320,194 4,441,296
Investment income 35,894 47,515 105,607 123,361
Finance charges and late fees earned 302,555 298,460 894,480 885,257
Other income 729 1,456 7,083 4,712
---------- ---------- ---------- ----------
Total Revenues 12,166,012 11,784,899 36,310,515 34,119,211
---------- ---------- ---------- ----------
EXPENSES
Losses and loss adjustment expenses 4,846,266 5,159,096 14,742,677 14,274,359
Policy acquisition costs 2,726,391 2,269,463 7,965,440 6,734,043
Salaries and employee benefits 885,196 928,726 2,745,272 2,762,264
Commissions to agents/brokers 242,139 312,200 811,600 950,274
Other operating expenses 653,822 598,293 2,007,258 2,089,964
--------- --------- ---------- ----------
Total Expenses 9,353,814 9,267,778 28,272,247 26,810,904
--------- --------- ---------- ----------
Income Before Taxes 2,812,198 2,517,121 8,038,268 7,308,307
Income Tax Provision 861,392 768,380 2,437,724 2,210,655
------- ------- --------- ---------
Net Income $1,950,806 $1,748,741 5,600,544 5,097,652
========= =========
Retained earnings January 1, 33,776,993 27,345,753
Dividend paid to stockholders (430,724) (418,087)
---------- ----------
Retained Earnings September 30, $38,946,813 $32,025,318
========== ==========
PER SHARE DATA
Weighted Average Shares Outstanding 6,403,457 6,248,511 6,396,280 6,227,995
Earnings Per Share $0.30 $0.28 $0.88 $0.82
</TABLE>
See notes to consolidated financial statements.
3 of 12
<PAGE>
UNICO AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
1997 1996
------ ------
<S> <C> <C>
Net Income $5,600,544 $5,097,652
Adjustments to reconcile net income to net cash from operations
Depreciation and amortization 63,438 109,670
Bond amortization, net 393,858 445,872
Net realized (gain) on sale of securities (25,093) (210,716)
Changes in assets and liabilities
Premium, notes and investment income receivable 1,089,572 (260,396)
Reinsurance recoverable 592,123 1,562,915
Prepaid reinsurance premiums 395,025 (9,997)
Deferred policy acquisitions costs (14,715) (395,582)
Other assets (38,956) 425,383
Reserve for unpaid losses and loss adjustment expenses 2,615,254 3,065,451
Unearned premium reserve (128,879) 1,593,069
Funds held as security and advanced premiums (20,037) (43,876)
Accrued expenses and other liabilities (111,733) 74,862
Income taxes current/deferred 33,077 (214,742)
---------- ----------
Net Cash Provided from Operations 10,443,478 11,239,565
----------- ----------
Investing Activities
Purchase of fixed maturity investments (15,372,354) (14,839,296)
Proceeds from maturity of fixed maturity investments 5,098,000 5,946,892
Purchase of equity securities - cost (1,019,500) (3,546,673)
Proceeds from sale of equity securities 814,132 2,767,938
Net decrease in short-term investments 1,336,062 1,058,389
Additions to property and equipment (44,307) (48,100)
---------- -----------
Net Cash (Used) by Investing Activities (9,187,967) (8,660,850)
---------- -----------
Financing Activities
Proceeds from issuance of common stock 359 1,225
Repayment of note payable - bank (750,001) (1,795,000)
Dividends paid to shareholders (430,724) (418,087)
----------- -----------
Net Cash (Used) by Financing Activities (1,180,366) (2,211,862)
----------- -----------
Net increase in cash 75,145 366,853
Cash at beginning of period 82,637 951
-------- --------
Cash at End of Period $157,782 $367,804
======= =======
Supplemental cash flow information Cash paid during the period for:
Interest $21,954 $107,930
Income Taxes $2,295,000 $2,440,000
</TABLE>
See notes to consolidated financial statements.
4 of 12
<PAGE>
UNICO AMERICAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Unico American Corporation ("Unico") is an insurance holding company. Unico 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 deferred income
taxes. 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 12
<PAGE>
UNICO AMERICAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBR 30, 1997
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 a September 30,
1997, these trust funds represent $2,021,155 of the Company's cash and
short-term investments. In addition, $2,725,000 of the Company's investments
represents 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, 1997, 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, 1997, 374,313 options were outstanding of which 275,411 were
currently exercisable. 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 they 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 12
<PAGE>
UNICO AMERICAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
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 were at least as favorable to
the Company as could have been obtained from unaffiliated third parties. The
Company utilizes for its own operations 100% of the space it leases.
NOTE 8 - RECENTLY ISSUED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 (SFAS No. 128), "Earnings per Share."
SFAS No. 128 requires the Company to disclose a basic and diluted earnings per
share calculation. Basic earnings per share excludes common stock equivalents
from the EPS calculation, while diluted EPS is calculated consistent with the
Company's primary earnings per share calculation. The Company will adopt the
provisions of SFAS No. 128 in the 1997 year-end consolidated financial
statements.
Pro forma basic and diluted earnings per share for the three months and nine
months ended September 30, 1997 and 1996, assuming that SFAS No. 128 was
effective as of the beginning of the year, are presented below:
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
1997 1996 1997 1996
---- ---- ---- ----
Basic EPS $0.32 $0.29 $0.91 $0.85
Diluted EPS $0.30 $0.28 $0.88 $0.82
Statement of Financial Accounting Standards No. 130 (SFAS No. 130), "Reporting
Comprehensive Income," and Statement of Financial Accounting Standards No. 131
(SFAS No. 131), "Disclosures about Segments of an Enterprise and Related
Information," were issued in June 1997 and are effective for fiscal years
beginning after December 15, 1997. SFAS No. 130 establishes standards for the
reporting and display of comprehensive income, which includes net income and
changes in equity except those resulting from investments by, or distributions
to stockholders. SFAS No. 131 establishes standards for disclosures related to
business operating segments. The Company is currently evaluating the impact that
these statements will have on the consolidated financial statements.
NOTE 9
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 nine
months ended September 30, 1997, and September 30, 1996.
NOTE 10
The results of operations for the three and nine months ended September 30,
1997, should not be considered as necessarily indicative of the results to be
expected for the full year.
7 of 12
<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 loss 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,
1997, the Company had cash and cash investments of $89,779,385 (at amortized
cost) of which $86,625,573 (96%) were investments of Crusader.
As of the quarter ended September 30, 1997, the Company had invested $85,836,196
(at amortized cost) or 96% 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 are in equity securities of 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 $85,836,196 (at
amortized cost) include $38,539,394 (45%) of tax exempt, pre-refunded state and
municipal bonds, $18,472,565 (21%) of U.S. treasury securities, $28,224,237
(33%) in high-quality industrial bonds and $600,000 (1%) of FDIC insured
certificates of deposit. The tax exempt interest income earned for the three and
nine months ended September 30, 1997, was $448,986 and $1,353,148 respectively.
The tax exempt interest income earned for the three and nine months ended
September 30, 1996, was $454,961 and $1,308,706 respectively.
The Company's investment policy limits investments in any one company to no more
than $1,500,000. This limitation excludes bond premiums paid in excess of par
value and U.S. Government or U.S. Government guaranteed issues. The Company's
fixed maturity obligations have maturities no greater than eight years. All of
the Company's investments are high-grade investment quality.
On August 15, 1997, the Company paid the $0.07 (seven cents) per common share
cash dividend which was declared by the Board of Directors on March 4, 1997, to
shareholders of record at the close of business on August 1, 1997.
The Company's premium finance subsidiary, American Acceptance Corporation
("AAC"), has a bank credit line with a variable rate of interest based on the
London Inter Bank Offered Rate ("LIBOR"). This bank 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 its parent, Unico. The bank note payable
was paid in full on July 3, 1997, resulting in no amounts being outstanding
under the bank credit line. Due to decreased utilization, AAC decreased this
bank credit line from $4,000,000 to $2,000,000 in September, 1997.
8 of 12
<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 borrowing, the
Company believes that cash generated from operations, plus cash and short-term
investments at the quarter end, net of trust restriction of $2,021,155 and
statutory deposits of $2,725,000, should be sufficient to meet its operating
requirements during the next twelve months without the necessity of borrowing
funds. Crusader is restricted in the amount of dividends it may pay to its
parent, Unico, without prior regulatory approval by the California Department of
Insurance. 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 nine months
ended September 30, 1997, to the three and nine months ended September 30, 1996,
unless otherwise indicated.
The Company's net income increased $202,065 (12%) to $1,950,806 for the three
months and $502,892 (10%) to $5,600,544 for the nine months ended September 30,
1997, compared to net income of $1,748,741 for the three months and $5,097,652
for the nine months ended September 30, 1996. Total revenues increased $381,113
(3%) for the three months and $2,191,304 (6%) for the nine months ended
September 30, 1997, when compared to the three and nine months ended September
30, 1996.
Premium earned before reinsurance increased $1,149,623 (12%) for the three
months and $3,260,125 (11%) for the nine months ending September 30, 1997.
Crusader's primary line of business is its Commercial Package business
representing 96% of all premiums earned in both the three months and the nine
months ended September 30, 1997. The Commercial Package business continued to
grow with earned premium increasing $1,090,596 (11%) to $10,586,308 for the
three months and $2,692,302 (10%) to $30,486,304 for the nine months ended
September 30, 1997, as compared to the corresponding period of the prior year.
Crusader's other lines of business, which include Commercial Property and Other
Liability increased $59,027 (17%) for the three months and $567,823 (78%) for
the nine months ended September 30, 1997 as compared to the corresponding period
of the prior year. The growth in earned premium in California represented 73% of
the total increase in earned premium for the three months and 63% for the nine
months ended September 30, 1997.
The ratio of premium ceded to premium earned increased from 10% to 17% for the
three months and increased from 11% to 14% for the nine months ending September
30, 1997. Although this ratio increased, it is still less than the 18% average
over the last three fiscal years. Effective July 1, 1997, Crusader increased its
per risk loss retention from $150,000 to $250,000. This is only one of many
factors which determine ultimate reinsurance costs.
9 of 12
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
(b) Results of Operations (continued)
Losses and loss adjustment expenses were 53% of net premium earned for the three
months and 54% of net premium earned for the nine months ended September 30,
1997, compared to 58% of net premium earned for the three months and 56% of net
premium earned for the nine months ended September 30, 1996.
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
reinsurers pay 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 were 30% of net premium earned
for the three months and 29% of net premium earned for the nine months ended
September 30, 1997, compared to 26% of net premium earned for the three and nine
months ended September 30, 1996. This increase was primarily due to a decrease
in reinsurance ceding commissions as a percentage of premium ceded.
Investment income, excluding realized investment gains, increased $184,265 (17%)
to $1,274,914 for the three months and increased $587,145 (19%) to $3,689,775
for the nine months ended September 30, 1997, compared to the three and nine
months ended September 30, 1996. This increase was primarily due to a 16%
increase (at amortized cost) in invested assets.
Commission and fee income decreased $77,116 (5%) to $1,422,735 for the three
months and decreased $121,102 (3%) to $4,320,194 for the nine months ended
September 30, 1997, compared to the three and nine months ended September 30,
1996. This decrease was primarily due to a decline in commissions and fees from
the Company's health and life insurance program of $104,177 (15%) for the three
months and $255,655 (12%) for the nine months ended September 30, 1997.
Commissions to agents/brokers decreased $70,061 (22%) for the three months and
$138,674 (15%) for the nine months ended September 30, 1997, compared to the
three and nine months ended September 30, 1996. The decrease was primarily due
to decreased sales in the health and life insurance program.
Other operating expenses increased $55,529 (9%) for the three months and
decreased $82,706 (4%) for the nine months ended September 30, 1997, compared to
the three and nine months ended September 30, 1996.
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 nine
months ended September 30, 1997, and 1996 was not significant.
10 of 12
<PAGE>
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K:
On Form 8-K dated August 27, 1997, with date of earliest event reported
being August 25, 1997, Registrant reported under Item 4, a change in
Registrant's Certifying Accountant. Item 4 of the Form 8-K was amended by
Form 8-KA dated August 29, 1997.
11 of 12
<PAGE>
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 12, 1997 By:/s/ Erwin Cheldin
---------------------
Erwin Cheldin
Chairman of the Board, President and Chief
Executive Officer, (Principal Executive Officer)
Date: November 12, 1997 By:/s/ Lester A. Aaron
-----------------------
Lester A. Aaron
Treasurer, Chief Financial Officer, (Principal
Accounting and Principal Financial Officer)
12 of 12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<DEBT-HELD-FOR-SALE> 90,847,931
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 215,630
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 91,063,561
<CASH> 157,782
<RECOVER-REINSURE> 402,060
<DEFERRED-ACQUISITION> 4,967,800
<TOTAL-ASSETS> 111,543,663
<POLICY-LOSSES> 42,356,119
<UNEARNED-PREMIUMS> 21,991,362
<POLICY-OTHER> 2,069,060
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,836,781
<OTHER-SE> 39,898,505
<TOTAL-LIABILITY-AND-EQUITY> 111,543,663
27,373,507
<INVESTMENT-INCOME> 3,689,775
<INVESTMENT-GAINS> 25,093
<OTHER-INCOME> 5,222,140
<BENEFITS> 14,742,677
<UNDERWRITING-AMORTIZATION> 7,965,440
<UNDERWRITING-OTHER> 5,564,130
<INCOME-PRETAX> 8,038,268
<INCOME-TAX> 2,437,724
<INCOME-CONTINUING> 5,600,544
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,600,544
<EPS-PRIMARY> .88
<EPS-DILUTED> .88
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
