<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the period ended SEPTEMBER 30, 1996
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 : 333-2796
CERULEAN COMPANIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Georgia 58-2217138
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3350 Peachtree Road, N.E., Atlanta, Georgia 30326
(Address of principal executive offices) (Zip Code)
</TABLE>
(404) 842-8000
(Registrant's telephone number, including area code)
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
--------- ----------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class: Class A Convertible Common Stock, no par value, $0.01 stated value.
Outstanding as of November 12, 1996 - 350,615 shares
<PAGE> 2
CERULEAN COMPANIES, INC.
FORM 10-Q
SEPTEMBER 30, 1996
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
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<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of
September 30, 1996 and December 31, 1995 Page 3
Consolidated Statements of Income for the three months and nine months
ended September 30, 1996 and 1995 Page 4
Consolidated Statements of Cash Flow for the nine months
ended September 30, 1996 and 1995 Page 5
Notes to Consolidated Financial Statements Page 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations Page 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings Page 11
Item 2. Changes in Securities Page 11
Item 3. Defaults Upon Senior Securities Page 11
Item 4. Submission of Matters to a Vote of Security Holders Page 11
Item 5. Other Information Page 11
Item 6. Exhibits and Reports on Form 8-K Page 11
Signatures Page 12
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
CERULEAN COMPANIES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Available-for-sale, at fair value (amortized cost: $158,266,647; $160,970,767 $131,055,098
$126,115,087)
Equity securities, at fair value (cost: $47,467,791; $39,657,474) 55,029,636 42,729,087
Short-term investments, at fair value (cost: $575,000; $932,958) 523,788 905,383
------------- ------------
Total investments 216,524,191 174,689,568
Cash and cash equivalents 79,958,096 49,304,688
Reimbursable portion of estimated benefit liabilities 102,273,300 102,132,300
Accounts receivable 46,428,171 36,063,899
FEP assets held by agent 12,533,497 12,137,107
Property and equipment 31,983,271 33,952,436
Other assets 9,627,801 8,798,587
------------- ------------
Total assets $499,328,327 $417,078,585
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Estimated benefit liabilities $184,091,859 $175,846,250
Unearned premiums 7,151,754 7,289,126
FEP stabilization reserve 12,533,497 12,137,107
Accounts payable and accrued expenses 28,542,746 16,635,534
Payables to other plans 3,115,871 2,442,748
Other liabilities 29,231,499 27,688,394
Note payable 3,500,000 2,000,000
------------- ------------
Total liabilities 268,167,226 244,039,159
------------- ------------
Mandatorily redeemable preferred stock:
Class B Convertible Preferred Stock, no par value; liquidation preference,
$1,000 per share; mandatory redemption, $900 per share.
Authorized, issued and outstanding, 49,900 shares 46,633,000 -
------------- ------------
Shareholders' equity:
Blank Preferred Stock, no par value.
Authorized and unissued 100,000,000 shares - -
Class A Convertible Common Stock, no par value, $0.01, stated value.
Authorized 50,000,000 shares; issued and outstanding 350,615 shares 3,506 -
Common Stock, no par value.
Authorized and unissued 100,000,000 shares - -
Net unrealized appreciation on securities 5,681,880 6,429,375
Retained earnings 178,842,715 166,610,051
------------- ------------
Total shareholders' equity 184,528,101 173,039,426
------------- ------------
Total liabilities and shareholders' equity $ 499,328,327 $417,078,585
============= ============
See accompanying notes.
</TABLE>
3
<PAGE> 4
CERULEAN COMPANIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Premiums $331,291,694 $290,412,536 $980,044,809 $855,729,715
Investment and other income 3,878,136 2,195,346 10,399,223 7,839,799
Realized gains 1,831,692 2,822,203 2,732,042 5,156,217
------------ ------------ ------------ ------------
Total revenues 337,001,522 295,430,085 993,176,074 868,725,731
Benefits expense 292,608,422 258,789,214 871,659,861 766,139,988
Operating expenses, net of expense
reimbursements
of $24,149,477, $17,813,482, $65,351,958, and
$50,628,174, respectively 34,483,186 32,025,014 102,831,510 93,851,495
------------ ------------ ------------ ------------
Operating income 9,909,914 4,615,857 18,684,703 8,734,248
Non-operating income - - 1,275,000 -
------------ ------------ ------------ ------------
Income before income taxes and minority interest 9,909,914 4,615,857 19,959,703 8,734,248
Income tax expense 1,951,427 893,337 3,898,078 1,646,495
Minority interest (173,080) (4,871) (477,089) (4,871)
------------ ------------ ------------ ------------
Net income $ 7,785,407 $ 3,717,649 $ 15,584,536 $ 7,082,882
============ ============ ============ ============
</TABLE>
See accompanying notes.
4
<PAGE> 5
CERULEAN COMPANIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1996 1995
-------------- --------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 15,584,536 $ 7,082,882
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Items that did not use cash:
Depreciation 6,641,666 6,164,866
Amortization 241,458 331,039
Uncollectable receivables 1,217,350 626,921
Gain on sale of investments (2,732,042) (5,156,217)
Loss on sale of property and equipment 60,371 38,813
Increase in certain assets:
Reimbursable portion of estimated benefit liabilities (141,000) (3,399,000)
Accounts receivable (11,581,622) (5,650,768)
Other assets (587,671) (124,069)
Increase (decrease) in certain liabilities:
Estimated benefit liabilities 8,245,609 1,193,145
Unearned premiums (137,372) 3,184,131
Accounts payable and accrued expenses 8,557,845 (6,243,586)
Payables to other plans 673,123 (384,900)
Other liabilities 1,542,993 (3,512,113)
------------ ------------
Net cash provided by (used in) operating activities 27,585,244 (5,848,856)
INVESTING ACTIVITIES
Investments available-for-sale:
Investments purchased (100,952,562) (138,944,067)
Investments sold or matured 60,620,598 138,833,594
Investments held-to-maturity:
Investments purchased - (199,750)
Investments matured - 12,017,931
Property and equipment purchased (5,486,967) (7,439,436)
Property and equipment sold 754,095 12,521
------------ ------------
Net cash (used in) provided by investing activities (45,064,836) 4,280,793
FINANCING ACTIVITIES
Proceeds from note payable 1,500,000 -
Proceeds from the issuance of preferred stock 46,633,000 -
------------ ------------
Net cash provided by financing activities 48,133,000 -
------------ ------------
Increase (decrease) in cash and cash equivalents 30,653,408 (1,568,063)
Cash and cash equivalents at beginning of period 49,304,688 25,484,560
------------ ------------
Cash and cash equivalents at end of period $ 79,958,096 $ 23,916,497
============ ============
</TABLE>
See accompanying notes.
5
<PAGE> 6
CERULEAN COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
UNAUDITED
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Cerulean Companies, Inc. (the "Company") was incorporated under the laws
of the State of Georgia on February 2, 1996 to act as the holding company
for Blue Cross and Blue Shield of Georgia, Inc. ("Georgia Blue") and its
subsidiaries, and for other lawful purposes. On February 2, 1996, the
Company acquired all of the outstanding capital stock of Georgia Blue,
following Georgia Blue's conversion from a not-for-profit corporation to
a for-profit corporation pursuant to a Plan of Conversion approved by the
Georgia Commissioner of Insurance on December 27, 1995 (the
"Conversion"). In connection with the Conversion, the Company issued
49,900 shares of Class B Convertible Preferred Stock ("Preferred Stock")
to raise $49.9 million in capital. After deducting offering costs, the
net proceeds to the Company were $46.6 million.
Although the Company did not become a holding company for Georgia Blue
until the Conversion on February 2, 1996, the consolidated results of
operations include the historical operations of Georgia Blue and its
subsidiaries prior to February 2, 1996 and the Company (including Georgia
Blue and its subsidiaries on a consolidated basis) from the period
February 2, 1996 through September 30, 1996.
Effective May 14, 1996, the Company's registration of its Class A
Convertible Common Stock (the "Class A Stock") with the Securities and
Exchange Commission became effective. As part of the Conversion, the
Company agreed to offer to each of Georgia Blue's approximately 160,000
eligible subscribers five shares of Class A stock at no cost. The
Company issued 800,000 shares of Class A Stock to an Escrow Agent for
distribution to eligible subscribers. Upon completion of the offering
eligible subscribers accepted 350,615 shares of no par value Class A
Stock. The remaining 449,385 shares which eligible subscribers rejected,
or were deemed to be rejected, were canceled. Currently, the Class A
Stock is not publicly traded.
BASIS OF PRESENTATION
The Company's accompanying unaudited consolidated financial statements
have been prepared in conformity with generally accepted accounting
principles ("GAAP") and require the use of management's estimates. As to
the Company's managed care, health and life insurance operations, GAAP
varies in some respects from statutory accounting practices permitted or
prescribed by insurance regulatory authorities. The Company's health
care plan subsidiary, its health maintenance organization and its life
insurance subsidiary are subject to regulation by the Georgia Insurance
Department, including minimum capital and surplus requirements and
restrictions on payment of dividends. These statements should be read in
conjunction with the Company's Prospectus dated May 14, 1996 (which is a
part of the Registration Statement filed on Form S-1, Registration No.
333-2796, filed on March 27, 1996 and subsequent amendments). Because of
the nature of the Company's operations, the results for interim periods
are not necessarily indicative of results expected for the entire year.
In the opinion of management, all material adjustments necessary for a
fair presentation of the financial position and results of operations for
the interim periods have been made. All such adjustments are of a normal
recurring nature.
PRINCIPLES OF CONSOLIDATION
The Company's accompanying consolidated financial statements include the
accounts of the Company, Georgia Blue and its wholly-owned health
maintenance and life insurance subsidiaries, a non-insurance subsidiary
and community health partnership network joint ventures ("CHPNs") in
which Georgia Blue has a majority interest. All significant intercompany
transactions and balances have been eliminated in consolidation.
ACCOUNTING FOR A SALE OF STOCK BY A SUBSIDIARY
Gains arising from a subsidiary issuing its own stock to third parties are
recorded as non-operating income and are presented as a separate line item
in the consolidated income statements.
6
<PAGE> 7
CERULEAN COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
UNAUDITED
2. EARNINGS PER SHARE
Earnings per share are omitted because such data are not meaningful at
the present time; there is presently no market for Class A Stock or any
equity securities of the Company, and the Company does not anticipate
development of such a market in the foreseeable future.
7
<PAGE> 8
CERULEAN COMPANIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the consolidated
financial statements and notes thereto. The Company's actual future results
could differ materially from its historical results.
OVERVIEW
Cerulean Companies, Inc. (the "Company") was incorporated under the laws of the
State of Georgia on February 2, 1996 to act as the holding company for Blue
Cross and Blue Shield of Georgia, Inc. ("Georgia Blue") and its subsidiaries,
and for other lawful purposes. On February 2, 1996 the Company acquired all of
the outstanding capital stock of Georgia Blue, following Georgia Blue's
conversion from a not-for-profit corporation to a for-profit corporation
pursuant to a Plan of Conversion approved by the Georgia Commissioner of
Insurance on December 27, 1995 (the "Conversion"). In connection with the
Conversion, the Company issued 49,900 shares of Class B Convertible Preferred
Stock ("Preferred Stock") to raise $49.9 million in capital. After deducting
offering costs, the net proceeds to the Company were $46.6 million.
Effective May 14, 1996, the Company's registration of its Class A Convertible
Common Stock (the "Class A Stock") with the Securities and Exchange Commission
became effective. As part of the Conversion, the Company agreed to offer to
each of Georgia Blue's approximately 160,000 eligible subscribers five shares
of Class A Stock at no cost. The Company issued 800,000 shares of Class A
Stock to an Escrow Agent for distribution to eligible subscribers. Upon
completion of the offering eligible subscribers accepted 350,615 shares of no
par value Class A Stock. The remaining 449,385 shares which eligible
subscribers have rejected, or have been deemed to be rejected were canceled.
Currently, the Class A Stock is not publicly traded.
Because the Company was not organized until February 2, 1996 and did not become
a holding company for Georgia Blue and its subsidiaries until the Conversion on
February 2, 1996, the discussions below relate to the historical operations of
Georgia Blue and its subsidiaries prior to February 2, 1996 and to the Company
(including Georgia Blue and its subsidiaries on a consolidated basis) for the
period from February 2, 1996 through September 30, 1996.
RESULTS OF OPERATIONS
Three Months Ended September 30, 1996 Compared to Three Months Ended September
30, 1995
Premium revenues increased 14% to $331.3 million for the three months ended
September 30, 1996 from $290.4 million for the three months ended September 30,
1995. Premium revenues for Indemnity and PPO products increased $9.8 million
to $259.7 million for the three months ended September 30, 1996, as the result
of a 2% increase in enrollment. HMO and POS premiums increased 79% to $68.8
million for the three months ended September 30, 1996 resulting from a 73%
increase in membership. New sales, in group growth, and to a lesser extent
migrations from traditional indemnity products into HMO and POS products,
continued to drive HMO and POS membership growth to 209,000 members at
September 30, 1996 from 121,000 members at September 30, 1995.
Investment and other income increased 77% to $3.9 million for the three months
ended September 30, 1996 from $2.2 million for the same period in 1995
principally due to an increase in the Company's cash and investment portfolio
from proceeds relating to the issuance of the Preferred Stock and improved cash
flows from operating activities.
Realized gains on the sale of marketable securities of $1.8 million for the
three months ended September 30, 1996 were $.9 million lower compared to the
three months ended September 30, 1995.
The medical loss ratio (benefits expense as a percentage of premium revenues)
decreased to 88.3% for the three months ended September 30, 1996 from 89.1% for
the three months ended September 30, 1995. The medical loss ratio for HMO and
POS products was 81.9% for the three months ended September 30, 1996. The
medical loss ratio for HMO and POS products was favorably impacted by risk
sharing settlements during the three month period ending September 30, 1996.
Excluding the impact of these settlements, the medical loss ratio for the three
months ended September 30, 1996 would be 84.1% compared to 83.4% for the three
months ended September 30, 1995 due to higher levels of utilization in non-CHPN
markets in 1996. The medical loss ratio for indemnity and PPO products
increased to 90.4% for the three months ended September 30, 1996 from 90.2% for
the three months ended September 30, 1995.
8
<PAGE> 9
CERULEAN COMPANIES, INC.
Operating expenses increased 8% to $34.5 million for the three months ended
September 30, 1996 from $32.0 million for the three months ended September 30,
1995; however, the operating expense ratio (operating expenses as a percentage
of premium revenues) decreased to 10.4% during the 1996 period from 11.0% for
the 1995 period. This was primarily the result of lower personnel costs as a
percentage of premium revenues due to operating efficiencies gained in 1996.
As a result of the foregoing factors, net income increased to $7.8 million for
the three months ended September 30, 1996 from $3.7 million for the three
months ended September 30, 1995.
Nine Months Ended September 30, 1996 Compared to Nine Months Ended September
30, 1995
Premium revenues for the nine months ended September 30, 1996 were $980.0
million, an increase of 15% over the premium revenues of $855.7 million for the
nine months ended September 30, 1995. Premium revenues for Indemnity and PPO
products increased $41.9 million to $791.8 million for the nine months ended
September 30, 1996 from $749.9 million for the nine months ended September 30,
1995, as the result of a 2% increase in membership. HMO and POS premiums
increased to $179.9 million for the nine months ended September 30, 1996, up
from $100.3 million for the nine months ended September 30, 1995, as a result
of a 73% increase in membership. New sales, in group growth, and to a lesser
extent migrations from traditional indemnity products into HMO and POS
products, continued to drive HMO and POS membership growth to 209,000 members
at September 30, 1996 from 121,000 members at September 30, 1995. HMO and POS
products accounted for 18% of total premiums for the nine months ended
September 30, 1996, up from 12% of total premiums for the nine months ended
September 30, 1995.
Investment and other income increased 33% to $10.4 million for the nine months
ended September 30, 1996 from $7.8 million for the same period in 1995
principally due to an increase in the Company's cash and investment portfolio
from proceeds relating to the issuance of the Preferred Stock.
Realized gains on the sale of marketable securities of $2.7 million for the
nine months ended September 30, 1996 were $2.4 million lower compared to the
nine months ended September 30, 1995.
The medical loss ratio for HMO and POS products was 84.7% for the nine months
ended September 30, 1996. The medical loss ratio for HMO and POS products was
favorably impacted by risk sharing settlements during the nine month period
ending September 30, 1996. Excluding the impact of these settlements, the
medical loss ratio for the nine months ended September 30, 1996 would be 85.6%
compared to 82.9% for the nine months ended September 30, 1995 due to higher
levels of utilization in non-CHPN markets in 1996. The 1995 loss ratio for HMO
and POS products was favorably impacted by adjustments to medical costs for
prior periods. The medical loss ratio for indemnity and PPO business decreased
to 90.3% during the first nine months of 1996 compared to 90.6% for the first
nine months of 1995. The Company has realized more favorable medical loss
ratio experience in its traditional indemnity products during the first nine
months of 1996 compared to the same period in 1995. Additionally, during the
nine month period ended September 30, 1995, the Company had experienced
increasing medical cost trends in all markets of its indemnity products which
related to the third and fourth quarters of 1994. As a result, an additional
$5.6 million was recorded in medical expenses during the 1995 period. The
combination of these factors resulted in a more favorable medical loss ratio of
90.3% for the nine months ended September 30, 1996 compared to 90.6% for the
nine months ended September 30, 1995.
Operating expenses of $102.8 million for the nine months ended September 30,
1996 increased by $9.0 million over the nine month period in 1995; however, the
operating expense ratio improved to 10.5% for the 1996 period from 11.0% for
the 1995 period. Due to improved operating efficiencies, personnel costs as a
percentage of premiums were lower during the 1996 period.
Non-operating income of $1.3 million for the nine months ended September 30,
1996 related to a gain on the sale of a 5% interest in one of the Company's
CHPN subsidiaries to a third party.
As a result of the foregoing factors, net income of $15.6 million for the nine
months ended September 30, 1996 exceeded net income of $7.1 million for the
same period in 1995 by $8.5 million.
9
<PAGE> 10
CERULEAN COMPANIES, INC.
LIQUIDITY AND CAPITAL RESOURCES
Nine Months Ended September 30, 1996 Compared to Nine Months Ended September
30, 1995
The Company has both short-term and long-term liquidity needs and has
structured its investment portfolios accordingly. Over $177.5 million of the
Company's investment portfolio is held at Georgia Blue and is subject to
limitations prescribed by Georgia insurance statutes. Short-term liquidity
needs to fund its operating costs as well as the payment obligations to its
customers are met from funds invested primarily in institutional money market
accounts. Assets not required for short-term liquidity needs are transferred
to a portfolio of investments in the fixed income and equity markets. These
investments provide for reserves for future payment obligations and funds for
long-term liquidity needs. The Company's investment policies are designed to
provide liquidity to meet anticipated payment obligations, to preserve capital
and to maximize yield in conformance with all regulatory requirements.
Net cash provided by operating activities amounted to $27.6 million for the
nine months ended September 30, 1996 compared to net cash used in operating
activities of $5.8 million for the same period in 1995. Cash used in operations
in the 1995 period was primarily the result of an increase in claim payouts and
a onetime payout in January 1995 for unused vacation accumulated for prior
years. Because of the nature of the Company's business, the cash flows from
operations for interim periods are not necessarily indicative of cash flows
from operations expected for the entire year. The Company believes that its
long-term capital requirements can be met with its current resources, including
proceeds from the sale of the Preferred Stock.
In February 1996, the Company received $46.6 million in connection with its
Preferred Stock offering, net of estimated offering costs of $3.3 million.
10
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit
Number Description
27 Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K
None
11
<PAGE> 12
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.
CERULEAN COMPANIES, INC.
Registrant
Date: November 12, 1996 By: /s/ Richard D. Shirk
---------------------------
Richard D. Shirk, President and
Chief Executive Officer
Date: November 12, 1996 By: /s/ John A. Harris
----------------------------
John A. Harris, Treasurer
12
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CERULEAN
COMPANIES, INC. ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY RERERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 160,970,767
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 55,029,636
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 216,524,191
<CASH> 79,958,096
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 499,328,327
<POLICY-LOSSES> 184,091,859
<UNEARNED-PREMIUMS> 7,151,754
<POLICY-OTHER> 12,533,497
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 3,500,000
46,633,000
0
<COMMON> 0
<OTHER-SE> 184,528,101
<TOTAL-LIABILITY-AND-EQUITY> 499,328,327
980,044,809
<INVESTMENT-INCOME> 10,399,223
<INVESTMENT-GAINS> 2,732,042
<OTHER-INCOME> 0
<BENEFITS> 871,659,861
<UNDERWRITING-AMORTIZATION> 102,831,510
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 19,959,703
<INCOME-TAX> 3,898,078
<INCOME-CONTINUING> 15,584,536
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,584,536
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
