<PAGE>
Form 10-Q
(conformed)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999 or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to_______
For Quarter Ended March 31, 1999 Commission File No. 2-35669
SOUTHERN SECURITY LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
Florida 59-1231733
(State of incorporation) (I.R.S. tax number)
755 Rinehart Road, Lake Mary, FL 32746
Registrant's telephone number, including area code: (407) 321-7113
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
None None
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all annual,
quarterly and other reports required to be filed with the Commission during the
preceding 12 months and (2) has been subject to the filing requirements for at
least the past 90 days.
Yes X No
The number of Registrant's shares outstanding as of the close of the period
covered by this report is as follows:
Number Outstanding at
Title of class March 31, 1999
Class A Common Shares 1,907,989
$1.00 per share
<PAGE>
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Form 10-Q
Quarter Ended March 31, 1999
INDEX
Part I
FINANCIAL INFORMATION
ITEM 1 Condensed Financial Statements
Balance sheets - March 31, 1999 and December 31, 1998 3-4
Statements of Income - Three Months Ended
March 31, 1999 and 1998 5
Statements of Cash Flows - Three Months Ended
March 31, 1999 and 1998 6
Notes to Condensed Financial Statements 7-8
ITEM 2 Management's Discussion and Analysis of
Financial Condition of Results of Operations,
March 31, 1999 9-15
ITEM 3 Quantitative and Qualitative Disclosure of Market Risk
PART II
Other Information 16-17
Signature Page 18
2
<PAGE>
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Balance Sheets
March 31, 1999 and December 31, 1998
<TABLE>
<CAPTION>
March 31, 1999 December 31,
Assets (unaudited) 1998
------ ----------- ----
<S> <C> <C>
Investments:
Fixed maturities held-to-maturity
(fair value, $5,017,910 and
$5,064,541 at March 31, 1999
and December 31, 1998 respectively) $ 4,932,956 $4,956,910
Securities available-for-sale,
at fair value:
Fixed maturities (cost of
$27,635,196 at March 31, 1999 and
$27,671,425 at December 31,
1998) 27,939,967 28,479,161
Equity securities (cost, $210,370
and $210,370 at March 31, 1999 and
December 31, 1998, respectively) 255,784 250,232
Policy and student loans 8,122,139 8,462,438
Short-term investments 5,058,037 11,434,983
Short-term investments with related party 4,010,239 -
--------- ---------
50,319,122 53,583,724
Cash and cash equivalents 2,615,198 682,389
Accrued investment income 838,464 564,118
Deferred policy acquisition costs 13,473,338 13,583,956
Policyholders' account balances on
deposit with reinsurer 8,426,975 8,518,571
Reinsurance receivable 302,426 306,258
Receivables:
Agent balances 1,276,311 994,493
Other 179,352 351,478
Refundable income taxes 42,599 34,951
Property and equipment, net, at cost 2,547,185 2,585,255
--------- ---------
$80,020,970 $81,205,193
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements
3
<PAGE>
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Balance Sheets (continued)
March 31, 1999 and December 31, 1998
<TABLE>
<CAPTION>
March 31, 1999 December 31,
Liabilities and Shareholders' Equity (unaudited) 1998
- ------------------------------------ ----------- ----
<S> <C> <C>
Liabilities:
Policy liabilities and accruals: $1,806,867 $1,727,300
Future policy benefits:
Policyholders' account balances 52,139,821 52,520,300
Unearned revenue 5,752,121 6,023,399
Other policy claims and benefits payable 623,775 540,789
Other Policyholders' funds, dividend
and endowment accumulations 66,001 64,738
Funds held related to reinsurance treaties 1,405,916 1,419,357
Note payable to related party 1,000,000 1,000,000
Due to affiliated insurance agency 76,425 22,871
General expenses accrued 554,405 747,148
Unearned investment income 331,071 340,622
Other liabilities 75,476 90,489
Deferred income taxes 606,808 796,074
--------- ---------
64,438,686 65,293,087
---------- ----------
Shareholders' equity:
Common stock, $1 par, authorized
3,000,000 shares; issued and out-
standing, 1,907,989 shares 1,907,989 1,907,989
Capital in excess of par 4,011,519 4,011,519
Accumulated other comprehensive income 175,242 430,161
Retained earnings 9,487,534 9,562,437
--------- ---------
15,582,284 15,912,106
Commitments and contingencies - -
----------- -----------
$80,020,970 $81,205,193
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements
4
<PAGE>
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Statements of Income (unaudited)
For The Three Months Ended March 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Revenues:
Net insurance revenues $1,751,040 $1,763,427
Net investment income 904,557 933,728
Realized gain on investments - 332,283
--------- -------
2,655,597 3,029,438
Benefits, losses & expenses:
Annuity, death, surrender and
other benefits 1,132,790 1,086,402
Increase in future policy
benefits 127,104 128,855
Amortization of deferred
policy acquisitions costs 828,668 927,211
Operating expenses 627,086 786,085
Interest expense with
related party 22,500 22,500
------ ------
2,738,148 2,951,053
Income (loss) before income
taxes (82,551) 78,385
Income tax expense (benefit) (7,648) 29,394
------- ------
Net income (loss) $(74,903) $48,991
======== ======
Basic net income (loss) per
share of common stock $.(04) $.03
==== ===
Diluted net income (loss) per
share of common stock $.(04) $.03
==== ===
</TABLE>
See accompanying notes to condensed financial statements
5
<PAGE>
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Statements of Cash Flows (unaudited)
For Three Months Ended March. 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Net cash provided by operating activities $84,557 $983,546
Cash flows provided by (used in) investing activities:
Purchase of investments available
for sale (equity & fixed maturity) - (5,771,931)
Proceeds from maturity of held to maturity securities 21,097 2,017,761
Proceeds from maturity of available for
sale securities - 257,240
Proceeds from sale of available for sale
securities (equity and fixed maturity) - 5,681,917
Net change in short term investments 2,366,707 -
Net change in policy and student loans 340,299 6,583
Acquisition of property & equipment - (11,103)
------- -------
Net cash provided by investing activities $2,728,103 $2,180,467
Cash flows provided by (used in) financing activities:
Receipts from universal life and certain
annuity policies credited to policyholder
account balances 1,751,831 921,719
Return of policyholder account balances on
universal life and certain annuity policies (2,631,682) (996,897)
---------- --------
Net cash used in financing activities $(879,851) $(75,178)
--------- --------
Increase in cash and cash equivalents 1,932,809 3,088,835
Cash and cash equivalents at
beginning of period $682,389 $2,448,994
-------- ----------
Cash and cash equivalents at
end of period $2,615,198 $5,537,829
========== ==========
</TABLE>
See accompanying notes to condensed financial statements
6
<PAGE>
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Notes to Condensed Financial Statements (unaudited)
For Three Months Ended March 31, 1999
1. Unaudited Financial Statements:
The accompanying financial statements have been prepared by management in
conformity with generally accepted accounting principles for interim
financial statements and with instructions to Form 10-Q and Regulation
S-X. Accordingly, they do not include all the disclosures required by
generally accepted accounting principles for complete financial
statements. All adjustments and accruals considered necessary for fair
presentation of financial information have been included in the opinion
of management, and are of a normal recurring nature. Quarterly results of
operations are not necessarily indicative of annual results. These
statements should be read in conjunction with the consolidated financial
statements and the notes thereto included in the Southern Security Life
Insurance Company 1998 Annual Report on Form 10-K for the fiscal year
ended December 31, 1998.
2. Comprehensive Income:
Total comprehensive income (loss) was $(329,822) and $56,487, for the
three months ended March 31, 1999 and 1998, respectively.
3. Management Fees
Effective December 17, 1998, the Company entered into an Administrative
Services Agreement with Security National Financial Corporation ("SNFC").
Under the terms of the agreement, SNFC has agreed to provide the Company
with certain defined administrative and financial services, including
accounting services, financial reports and statements, actuarial,
policyholder services, underwriting, data processing, legal, building
management, marketing advisory services and investment services. In
consideration for the services to be provided by SNFC, the Company shall
pay SNFC and administrative services fee of $250,000 per month, provided,
however, that such fee shall be reduced to zero for so long as the
capital and surplus of the Company is less than or equal to $6,000,000,
unless the Company and SNFC otherwise agree in writing and such agreement
is approved by the Florida Department of Insurance.
7
<PAGE>
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Notes to Condensed Financial Statements (unaudited)
For Three Months Ended March 31, 1999
4. Subsequent Event
The Company received $719,000 on April 23, 1999 as partial settlement to
a lawsuit filed by Southern Security against AEGON USA and PFL Life
Insurance Company.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
Overview.
This analysis of the results of operations and financial condition of
Southern Security Life should be read in conjunction with the Condensed
Financial Statements and Notes to the Condensed Financial Statements included in
this report.
In recent years, the Company has primarily issued two types of
insurance products, universal life and final expense products. Universal life
provides insurance coverage with flexible premiums, within limits, which allow
policyholders to accumulate cash values. The accumulated cash values are
credited with tax-deferred interest, as adjusted by the Company on a periodic
basis. Deducted from the cash accumulations are administrative charges and
mortality costs. Should a policy surrender in its early years, the Company
assesses a surrender fee against the cash value accumulations based on a graded
formula. Final expense products are traditional endowment type insurance
policies written for the senior market. Because they are written to a senior
market they are designed to accommodate adverse health conditions. Because of
the size of the policies they are usually issued with only limited underwriting.
The coverage size of the policy is roughly equivalent to the insured's
anticipated funeral costs.
Pursuant to the accounting methods prescribed by Statement of Financial
Accounting Standards No. 97 (SFAS 97), premiums received from policyholders on
universal life products are credited to policyholder account balances and
treated as a liability rather than income. Revenues on such products result from
the mortality and administrative fees charged to policyholder balances in
addition to surrender charges assessed at the time of surrender as explained
above. Such costs of insurance, expense charges, and surrender charges are
recog-nized as revenue is earned. In addition, the Company has adopted policy
designs with the characteristic of having higher expense charges during the
first policy year than in renewal years. Under SFAS 97, the excess of these
charges are reported as unearned revenue. The unearned revenue is then amortized
into income over the life of the policy using the same assumptions and factors
used to amortize capitalized acquisition costs. Interest credited to
policyholder balances is shown as a part of benefit expenses. Premiums received
from final expense products are treated as revenue when received.
In accordance with generally accepted accounting principles, certain
costs directly associated with the issuance of new policies are deferred and
amortized over the lives of the policies. These costs are defined as deferred
policy acquisition costs and are shown in the asset section of the balance sheet
of the Company. Capitalized acquisition costs for universal life and annuity
policies are amortized over the life of the business at a constant rate, based
on the present value of the estimated gross profits expected to be realized over
the life of the business. SFAS 97 requires that estimates of expected gross
profits used as a basis for amortization be evaluated on a regular basis, and
the total amortization to date be adjusted as
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
Overview continued.
a charge or credit to earnings if actual experience or other evidence suggests
that earlier estimates be revised. Thus, variations in the amortization of the
deferred policy acquisition costs, from one period to the next, are a normal
aspect of universal life insurance business and are generally attributed to the
recognition of current and emerging experience in accordance with the principles
of SFAS 97.
Annuity products, of which the Company currently has a minor amount,
are recorded in similar fashion to universal life products. Considerations
received by the Company are credited to the annuity account balances which are
shown as a liability in the balance sheet. Interest is credited to these
accounts as well and shown as an expense of the Company. Income is derived
primarily from surrender charges on this type of product.
An additional source of income to the Company is investment revenue.
The Company invests those funds deposited by policyholders of universal life and
annuity products in debt and equity securities in order to earn interest and
dividend income, a portion of which is credited back to the policyholders.
Interest rates and maturities of the Company's investment portfolio play a part
in determining the interest rates credited to policyholders.
Product profitability is affected by several different factors, such as
mortality experience ( actual versus expected), interest rate spreads (excess
interest earned over interest credited to policyholders) and controlling policy
acquisition costs and other costs of operation. The results of any one reporting
period may be significantly affected by the level of death claims or other
policyholder benefits incurred due to the Company's relatively small size.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
Overview, continued
The following table sets forth certain percentages reflecting financial
data and results of operations (a) for 1999, 1998 and 1997 premium and
investment revenues and (b) for period to period increases and (decreases).
<TABLE>
<CAPTION>
Relationships to Total Revenues Period to Period
Period Ended March 31, (Increase or Decrease)
1999 1998 1997 99-98 98-97
---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C>
Insurance Revenues 66% 58% 74% (2%) (16%)
Net Investment Income 34 31 30 (3%) 8%
Realized Investment Gains - 11 (4) (100%) 391%
Total Revenues 100% 100% 100% (12%) 6%
Losses, claims and loss
adjustment expenses 47% 40% 38% 4% 11%
Acquisition costs 31 31 33 (10%) 0%
Other operating costs and
expenses 25 26 32 (20%) (13%)
Total expenses 103% 97% 103% (7%) 0%)
Income (loss) before income taxes (3%) 3% (4%) (205%) 171%
Provision for income taxes -% -% 1% (126%) 195%
Net income (loss) (3%) 3% (3%) (253%) 162%
</TABLE>
Results of Operations.
First Quarter 1999 Compared to First Quarter 1998
Total revenues decreased by $374,000, or 12%, to $2,656,000 for the three
months ended March 31, 1999, from $3,029,000 for the three months ended March
31, 1998. Contributing to this decrease was a $13,000 decrease in net insurance
revenues, a $332,000 decrease in realized gains on investments, and a $30,000
decrease in net investment income.
11
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
Results of Operations continued
The Company's decision to reduce its mutual fund holdings in early 1998
resulted in $332,000 in realized gains on investments for the three months ended
March 31, 1998 as compared to no realized gains on investments for the same
period of 1999.
Annuity, death, surrender, and other benefits and increase in future
policy benefits increased by $45,000, or 4%, to $1,260,000 for the three months
ended March 31, 1999 from $1,215,000 for the comparable period in 1998. The
increase was due primarily to increased ordinary benefits and future policy
reserves for new in-force policies.
The amortization of deferred policy acquisitions costs decreased by
$99,000 or 10% to $829,000 for the three months ended March 31, 1999, from
$927,000 for the comparable period in 1998. The decrease in amortization
expenses was primarily due to a significant improvement in persistency in death
claims as well as the interest spread between the amounts credited to
policyholders and the amounts the Company has earned on its investment
portfolio.
Operating expenses decreased by $159,000, or 20%, to $627,000 for the
three months ended March 31, 1999 from $786,000 for the same period of 1998.
Effective December 17, 1998, the Company entered into an Administrative
Services Agreement with Security National Financial Corporation ("SNFC"). Under
the terms of the agreement, SNFC has agreed to provide the Company with certain
defined administrative and financial services, including accounting services,
financial reports and statements, actuarial, policyholder services,
underwriting, data processing, legal, building management, marketing advisory
services and investment services. In consideration for the services to be
provided by SNFC, the Company shall pay SNFC an administrative services fee of
$250,000 per month, provided, however, that such fee shall be reduced to zero
for so long as the capital and surplus of the Company is less than or equal to
$6,000,000, unless the Company and SNFC otherwise agree in writing and such
agreement is approved by the Florida Department of Insurance.
The administrative services fee may be increased, beginning on January
1, 2001, to reflect increases in the Consumer Price Index, over the index amount
as of January 1, 2000. The Administrative Services Agreement shall remain in
effect for an initial term expiring on December 16, 2003. The term of the
agreement may be automatically extended for additional one-year terms unless
either the Company or SNFC shall deliver a written notice on or before
12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
Results of Operations continued
September 30 of any year stating to the other its desire not to extend the term
of the agreement. However, in no event can the agreement be terminated prior to
December 16, 2003. It is anticipated that the Company will realize a reduced
level of general and administrative costs in the future as a result of the
Administrative Services Agreement.
The net loss before income taxes for the three months ended March 31,
1999 was $82,000 as compared to a net gain of $78,000 for 1998. This loss was
attributed to a net reduction in revenues of $373,000 but this reduction was
partially offset by a net decrease in benefits, losses, expenses and taxes of
$213,000.
Liquidity and Capital Resources
Statement of Financial Accounting Standards No. 115 ("SFAS 115"),
"Accounting for Certain Investments in Debt and Equity Securities" requires
investments in all debt securities and those equity securities with readily
determinable market values be classified into one of three categories:
held-to-maturity, trading or available-for-sale. Classification of investments
is based upon management's current intent. Debt securities, which management has
a positive intent and ability to hold until maturity, are classified as
securities held-to-maturity and are carried at amortized cost. Unrealized
holding gains and losses on securities held-to- maturity are not reflected in
the financial statements. Debt and equity securities that are purchased for
short-term resale are classified as trading securities. Trading securities are
carried at market value, with unrealized holding gains and losses included in
earnings. All other debt and equity securities not included in the above two
categories are classified as securities available-for-sale. Securities
available-for-sale are carried at market value, with unrealized holding gains
and losses reported as a separate component of other comprehensive income, net
of tax and a valuation allowance against deferred acquisition costs.
The Company's insurance operations have historically provided adequate
positive cash flow enabling the Company to continue to meet operational needs as
well as increase its investment-grade securities to provide ample protection for
policyholders. Management believes that cash flow levels in future periods will
be such that the Company will be able to continue its prior growth patterns in
writing life insurance policies and meet normal operating expenses.
The National Association of Insurance Commissioners, in order to
enhance the regulation of insurer solvency, issued a model law to implement
risk-based capital (RBC) requirements for life insurance companies, which are
designed to assess capital adequacy. Pursuant to the model law, insurers having
less statutory surplus than required by the RBC
13
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Liquidity and Capital Resources continued
calculation will be subject to varying degrees of regulatory action. At March
30, 1999, and December 31, 1998 the Company had statutory surplus well in excess
of any RBC action level requirements.
The Company has no material commitments for capital expenditures
throughout the balance of the year 1999 as all rentable space on the first floor
of its office building is fully leased.
Year 2000
The Company is currently completing its efforts to resolve the
potential impact of the year 2000 on the processing of information by the
Company's insurance systems. The year 2000 problem is the result of computer
programs being written using two digits (rather than four) to define the
applicable year. Any of the Company's systems that have time-sensitive software
may recognize a date using "00" as the year 1900 rather than year 2000, which
could result in miscalculations or system failures. The Company has
substantially completed the necessary system upgrades and compliance testing and
expects the system to be entirely complete by September 30, 1999.
The Company's most significant operational system is currently being
replaced through conversion pursuant to an Administrative Services Agreement.
Under the Administrative Services Agreement entered into by the Company
effective December 17, 1998, Security National made available a new LifePro
Administration system. LifePro is a subsidiary of IBM. Since May of 1998, SNFC
has invested in excess of $1.0 million to implement a system conversion for the
Company. For further discussion on the Administrative Services Agreement, see
the "Results of Operations" section discussion on operating expenses.
The anticipated future costs of addressing potential Year 2000 problems
are not currently expected to have a material adverse impact on the Company's
financial position, results of operations or cash flows in future periods.
However, if the Company, its customers or vendors are unable to resolve such
processing issues in a timely manner, it could result in a material financial
risk. Management believes that manual policy and claims administration could be
performed in the unlikely event that one or more of its systems did not
function. The Company plans to devote the necessary resources to test and
remediate all remaining Year 2000 issues in a timely manner.
14
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Year 2000 continued
The cost that has been incurred and paid in achieving Year 2000
compliance is approximately $1.0 million as discussed above. As of March 31,
1999, management does not anticipate any other significant costs to be incurred
associated with its year 2000 initiatives.
Item 3. Quantitative and Qualitative Disclosure of Market Risk
There have been no significant changes since the annual report Form
10-K filed for the year ended December 31, 1998.
15
<PAGE>
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
3. Exhibits
(a)
Exhibit No. Document
3. Articles of Incorporation, as amended, and By-Laws,
as amended (without exhibits) dated September 1994,
incorporated by reference herein from Exhibit 3(1) of
the Annual Report of the Company filed on Form 10-K
for the fiscal year ended December 31, 1994
10.A Executive Compensation Agreement between the Company
and George Pihakis (without exhibits) incorporated by
reference herein from Exhibit 10(B) of the Annual
Report of the Company filed on Form 10-K for the
fiscal year ended December 31, 1984
10.B Revolving Financing Agreement between the Company and
the Student Loan Marketing Association, dated as of
September 19, 1996
16
<PAGE>
3. Exhibits
Exhibit No. Document
10.C Reinsurance Agreement between the Company and United
Group Insurance Company, dated as of December 31,
1992 incorporated by reference herein from Exhibit
10(B) of the Annual Report of the Company filed on
Form 10-K for the fiscal year ended December 31, 1992
10.D Agency Agreement between the Company and Insuradyne
Corporation incorporated by reference herein from
Exhibit 10C of the Annual Report of the Company filed
on Form 10-K for the fiscal year ended December 31,
1993
10.E Administrative Services Agreement between the Company
and Security National Financial Corporation effective
December 17, 1998, incorporated by reference herein
from exhibit 10.E of the Annual Report of the Company
filed on Form 10-K for the fiscal year ending
December 31, 1998.
27. Financial Data Schedule
(b) Reports on Form 8-K
On February 26, 1999 the Company filed a report on Form 8-K regarding a
change in its certifying accountant.
17
<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 duly authorized.
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Registrant
Dated: May 20, 1999 BY: George R. Quist
President and Chief Executive Officer (Principal
Executive Officer)
Dated: May 20, 1999 BY: Scott M. Quist
First Vice President, General Counsel and
Treasurer (Principal Financial and Accounting
Officer)
18
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C> <C>
<PERIOD-TYPE> 3-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-END> MAR-31-1998 DEC-31-1998
<DEBT-HELD-FOR-SALE> 27,939,967 28,479,161
<DEBT-CARRYING-VALUE> 4,932,956 4,956,910
<DEBT-MARKET-VALUE> 5,017,910 5,064,541
<EQUITIES> 255,784 250,232
<MORTGAGE> 0 0
<REAL-ESTATE> 0 0
<TOTAL-INVEST> 50,319,122 53,583,724
<CASH> 2,615,198 682,389
<RECOVER-REINSURE> 302,426 306,258
<DEFERRED-ACQUISITION> 13,473,338 13,583,956
<TOTAL-ASSETS> 80,020,970 81,205,193
<POLICY-LOSSES> 1,806,867 1,727,300
<UNEARNED-PREMIUMS> 5,752,121 6,023,399
<POLICY-OTHER> 623,775 540,789
<POLICY-HOLDER-FUNDS> 66,001 64,738
<NOTES-PAYABLE> 1,000,000 1,000,000
0 0
0 0
<COMMON> 1,907,989 1,907,989
<OTHER-SE> 4,011,519 4,011,519
<TOTAL-LIABILITY-AND-EQUITY> 80,020,970 81,205,193
1,751,040 7,228,227
<INVESTMENT-INCOME> 904,557 3,587,147
<INVESTMENT-GAINS> 0 525,181
<OTHER-INCOME> 0 0
<BENEFITS> 1,259,894 4,346,820
<UNDERWRITING-AMORTIZATION> 828,668 3,484,689
<UNDERWRITING-OTHER> 627,086 4,044,686
<INCOME-PRETAX> (82,551) (625,640)
<INCOME-TAX> (7,648) (241,907)
<INCOME-CONTINUING> (74,903) (383,733)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (74,903) (383,733)
<EPS-PRIMARY> (.04) (.20)
<EPS-DILUTED> (.04) (.20)
<RESERVE-OPEN> 0 0
<PROVISION-CURRENT> 0 0
<PROVISION-PRIOR> 0 0
<PAYMENTS-CURRENT> 0 0
<PAYMENTS-PRIOR> 0 0
<RESERVE-CLOSE> 0 0
<CUMULATIVE-DEFICIENCY> 0 0
</TABLE>
