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 Quarter Ended September 30, 1996
------------------
( ) 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 0-8804
THE SEIBELS BRUCE GROUP, INC.
- -----------------------------
(Exact name of the registrant as specified in its charter)
South Carolina 57-0672136
- ---------------------- ---------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
1501 Lady Street (P.O. Box One), Columbia, S.C. 29201(2)
- ---------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (803) 748-2000
----------------
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
---- ----
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date: 24,647,686 shares of
----------------------
Common Stock, $1 par value, at October 31, 1996.
- ------------------------------------------------
<TABLE>
THE SEIBELS BRUCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars shown in thousands)
<S> <C> <C>
September 30, December 31,
ASSETS 1996 1995
Investments: (Unaudited)
Fixed maturities, at market (cost of $36,390
at 1996 and $33,171 at 1995) $ 35,623 $ 33,581
Equity securities available-for-sale, at market
(cost of $39 at 1996 and $222 at 1995) 34 377
Cash and short-term investments 11,459 16,649
Other long-term investments 34 34
Total cash and investments 47,150 50,641
Accrued investment income 371 697
Premiums and agents' balances receivable, net 6,191 7,005
Reinsurance recoverable on paid losses and loss
adjustment expenses 25,453 27,423
Reinsurance recoverable on unpaid losses and loss
adjustment expenses 88,157 84,492
Property and equipment, net 5,343 5,396
Prepaid reinsurance premiums - ceded business 45,874 43,469
Deferred policy acquisition costs 121 293
Other assets 6,134 4,589
-------- --------
Total assets $ 224,794 $ 224,005
======== ========
LIABILITIES
Losses and claims:
Reported and estimated losses and claims
- retained business $ 39,732 $ 47,445
- ceded business 79,217 74,918
Adjustment expenses - retained business 10,984 13,586
- ceded business 8,940 9,574
Unearned premiums:
Property and casualty - retained business 1,700 1,900
- ceded business 45,874 43,469
Credit life 312 758
Balances due other insurance companies 12,548 12,438
Notes payable 0 2,476
Current income taxes payable 4 191
Escrow liability 0 0
Other liabilities and deferred items 3,582 7,063
-------- -------
Total liabilities 202,893 213,818
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Special stock, no par value, authorized 5,000,000
shares, none issued and outstanding -
Common stock, $1 par value, authorized 50,000,000
shares, issued & outstanding 24,647,686 shares
(16,772,686 at 1995) 24,647 16,773
Additional paid-in capital 35,537 34,080
Unrealized gain/(loss) on securities (937) 401
Accumulated deficit (37,346) (41,067)
------- --------
Total shareholders' equity 21,901 10,187
------- --------
Total liabilities and shareholders' equity $ 224,794 $ 224,005
======= =======
</TABLE>
<TABLE>
THE SEIBELS BRUCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts shown in thousands, except per share amounts)
Nine Months Ended
September 30, Third Quarter
---------------- -----------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Premiums:
Property and casualty:
Net premiums written $ 5,906 $ 5,466 $ 2,932 $ 409
Change in unearned premiums 199 3,043 (652) 2,588
Premiums earned 6,105 8,509 2,280 2,997
Credit life premiums earned 305 612 80 197
Commission and service income 33,247 38,036 11,647 12,484
Net investment income 2,046 2,502 798 925
Other interest income 628 986 441 212
Realized gains on investments 196 35 2 0
Other income 121 816 80 9
------ ------ ------ ------
Total revenue 42,648 51,496 15,328 16,824
------ ------ ------ ------
Expenses:
Property and casualty:
Losses and loss adjustment
expenses 5,594 10,323 2,263 3,159
Policy acquisition costs 1,668 1,855 903 (258)
Credit life benefits 204 347 73 81
Interest expense 142 194 17 91
Other operating costs and expenses 31,463 39,180 10,504 12,406
------ ------ ------ ------
Total expenses 39,071 51,899 13,760 15,479
------ ------ ------ ------
Income (loss) from operations,
before income tax 3,577 (403) 1,568 1,345
Provision for income taxes (144) 72 (54) 61
------ ------ ------ ------
Net income (loss) $ 3,721 $ (475) $ 1,622 $ 1,284
====== ====== ====== ======
Per share and common equivalent share:
Net income (loss) -
primary and fully diluted $ 0.20 $ (0.03) $ 0.09 $ 0.08
====== ======= ====== =======
Shares used in computing per common
and common equivalent share: 18,620,208 16,491,653 18,332,090 16,749,262
========== ========== ========== ==========
Change in value of marketable securities
credited /(charged) directly to
equity $ (1,338) $ 2,000 $ 49 $ 95,532
======== ======= ====== =======
</TABLE>
<TABLE>
THE SEIBELS BRUCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Temporary Cash Investments
(Unaudited)
Nine Months Ended
September 30,
1996 1995
-------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 3,721 $ (475)
Adjustments to reconcile net income (loss) to - -
net cash used in operating activities: - -
Depreciation 724 604
(Gains) on investments (196) (35)
Net change in assets and liabilities affe - -
-
cash flows from operating activities (12,797) (18,638)
-------- --------
Net cash used in operating activities (8,549) (18,544)
-------- --------
Cash flows from investing activities:
Proceeds from investments sold 1,343 8,165
Proceeds from investments matured 3,095 2,030
Cost of investments acquired (7,282) (3,184)
Net change in short-term investments - 88
Proceeds from property and equipment sold 116 106
Purchases of property and equipment (766) (38)
------- -------
Net cash provided by (used in) investing activities (3,495) 7,168
------- -------
Cash flows from financing activities:
Issuance of capital stock 9,333 -
Repurchase of Treasury Stock (3)
Repayment of notes payable (2,476) -
Proceeds from stock rights offering - 5,321
Increase in notes payable - 2,037
------- ------
Net cash provided by financing activities 6,854 7,358
------- ------
Net increase (decrease) in cash and temporary
cash investments (5,190) (4,018)
Cash and temporary cash investments, January 1, 16,649 20,243
------ ------
Cash and temporary cash investments, September 30 $ 11,459 $ 16,225
====== ======
Supplemental cash flow information:
Cash paid for - interest $ 319 -
- income taxes paid $ 43 $ 147
Non-cash financing activities:
Cancellation of shares issued to Directors
in June, 1995 $ 10
Notes payable exchanged for accrued interest $ 439
Issuance of common stock 39
</TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Notes to Consolidated Financial Statements
NOTE 1. NOTES PAYABLE
Notes payable at September 30, 1996 and December 31, 1995, are
summarized as follows:
September 30, December 31,
1996 1995
(amounts in thousands)
-----------------------------
Note payable (due 5/1/96, interest accrues
at a rate equal to NationsBank's Prime
Rate plus 2%, compounded daily $ 0 $ 2,000
Interest note payable, due 5/1/96,
interest at 8.5% 0 476
------- ------
Notes payable $ 0 $ 2,476
======= ======
As discussed in Note 2, the proceeds of the capital contribution made at the
end of the first quarter of 1996 were used to pay off the above note balances
on May 1, 1996. This leaves The Seibels Bruce Group, Inc. ("the Company")
debt-free as of September 30, 1996.
NOTE 2. CAPITAL CONTRIBUTIONS
During the first quarter of 1996, the Company issued 6,250,000 shares of
authorized but unissued common stock, par value $1.00 per share (the
"Common Stock"), at a price of $1.00 to several related investors. On June
14, 1996, the shareholders approved the transaction at a special meeting. On
September 26, 1996, the last of the regulatory approvals were obtained and
the cash was released from escrow. The proceeds were used to make a
contribution to the policyholders' surplus for one of the Company's
subsidiaries, South Carolina Insurance Company, in the amount of $6.3
million. In conjunction with the sale of common stock, the Company also
issued to the related investors stock options to acquire an additional
3,125,000 shares at the higher of $1.50 per share or book value at date of
exercise, expiring on December 31, 1998 and 3,125,000 shares at the higher of
$2.00 or book value at date of exercise, expiring on December 31, 2000.
Also during the first quarter of 1996, the Company issued 1,635,000 shares
of authorized but unissued Common Stock at a price of $2.00 per share to a
different group of investors. The proceeds of this stock sale were used to
liquidate the notes payable that were due May 1, 1996. In addition, the
Company has issued to this group stock options expiring December 31, 2000
to acquire an additional 1,635,000 shares at the higher of $2.50 per share or
book value at the date of exercise.
NOTE 3. BENEFIT PLANS
On June 14, 1996, the Company's shareholders approved the following benefit
plans:
a) The 1996 Stock Option Plan for Employees supersedes the 1987
Stock Option Plan and became effective November 1, 1995. The
1996 Plan reserves 5 million shares of Company stock which may be
issued as stock options, incentive stock and restricted stock to
employees of and consultants to the Company. The exercise price will
be greater than or equal to the market value on the date of grant.
During the nine months ended September 30, 1996, 997,425 options
were granted at exercise prices ranging from $1.50 to $5.50 per share.
b) The 1995 Stock Option Plan for Non-employee Directors became
effective June 15, 1995. Under the plan, all non-employee directors
will be automatically granted 5,000 options to purchase Company
stock on an annual basis every June 15th. The exercise price will be
the market value at the date of grant. The options will be fully vested
at the date of grant. On June 15, 1996, 35,000 options were granted
at an exercise price of $2.625 per share.
c) The 1995 Stock Option Plan for Independent Agents became effective
December 21, 1995. The exercise price will be greater than or equal
to the market value on the date of grant. Vesting will be determined
on an individual grant basis. During the nine months ended September
30, 1996, 291,000 options were granted at exercise prices ranging
from $1.50 to $2.94 per share.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
The interim financial statements in Item 1 are unaudited, but in the opinion of
management, reflect all adjustments necessary for fair presentation of results
for such periods. All such adjustments are of a normal recurring nature. The
results of operations for any interim period are not necessarily indicative of
results for the full year. These financial statements should be read in
conjunction with the financial statements and notes thereto contained in the
Company's annual report Form 10-K for the year ended December 31, 1995.
The following table indicates the more significant financial comparisons with
the applicable prior periods (dollars shown in thousands, except per share
amounts):
<TABLE>
September 30, December 31,
FINANCIAL CONDITION 1996 1995
------------- -------------
<S> <C> <C>
Total cash and investments $ 47,150 $ 50,641
Total assets 224,794 224,005
Total liabilities 202,893 213,818
Shareholders' equity 21,901 10,187
Per Share 0.89 0.61
</TABLE>
<TABLE>
Nine Months Ended
September 30, Third Quarter
RESULTS OF OPERATIONS 1996 1995 1996 1995
------------------ -------------------
<S> <C> <C> <C> <C>
Operating revenues
Insurance
Commission and service income $ 33,247 $ 38,036 $ 11,647 $ 12,484
Premiums earned 6,410 9,121 2,360 3,194
Net investment and other
interest income 2,674 3,488 1,239 1,137
Realized gains (losses) on investments 196 35 2 -
Other income 121 816 80 9
Total operating revenues $ 42,648 $ 51,496 $ 15,328 $ 16,824
Net income (loss) $ 3,721 $ (475) $ 1,622 $ 1,284
Per share $ 0.20 (0.03) $ 0.09 $ 0.08
</TABLE>
Results of Operations
The Company had net income during the third quarter of 1996 of $1.6 million,
compared to $1.3 million for the third quarter of 1995. The nine months
ended September 30, 1996 reflect net income of $3.7 million, compared to a
net loss of $0.5 million in 1995. Total revenues in the third quarter of 1996
decreased $1.5 million (8.9%), when compared to the third quarter of 1995.
Total revenues for the nine month period ended September 30, 1996
decreased $8.8 million (17.2%), when compared to the same period in 1995.
The majority of this is due to the decrease in commission and service income
related to the Company's participation in the South Carolina Reinsurance
Facility. The Company obtained a smaller book of business at lower rates
during the bid process, the effects of which began in the fourth quarter of
1995. The Company's servicing segment that includes its participation in the
National Flood Insurance Program has shown increased revenues and profits
specifically related to its claim services arising from Hurricane Fran.
During the third quarter of 1996, the Company obtained approval from the
South Carolina Department of Insurance to retain business. In line with this
approval, the Company has started retaining risks and plans to cautiously
grow this business profitably in upcoming quarters.
Total expenses (including losses and loss adjustment expenses) decreased in
the third quarter of 1996 and the nine months ended September 30, 1996 by
$1.7 million (11.1%) and $12.8 million (24.7%), respectively, when compared
to 1995. While the Company has seen premiums earned decrease as the
related policies runoff, the losses and loss adjustment expenses on the business
earned prior to 1996 have stabilized. Results in the first nine months of 1996,
and the last three quarters of 1995, confirm management's opinion that
reserves appear to be adequate to cover any future development on this
business. In addition, the Company continues its constant monitoring of
expenses related to the contracts it services to keep the profit margin from
decreasing at the same rate as revenues.
Net investment income for the third quarter of 1996 was $0.8 million,
compared to $0.9 million for the same quarter in 1995. The nine months
ended September 30, 1996 shows a decrease of $0.5 million, when compared
to the same time period in 1995. These decreases are due to lower average
invested assets during 1996, as compared to 1995. However, investment
income is increasing when compared to previous 1996 quarters due to investment
income earned on escrowed funds held prior to the capital contributions
discussed below.
Other income in 1995 includes a settlement received on litigation the
Company was involved in for several years. Also included in other income is
a gain on the sale of certain assets of Forest Lake Travel Service, Inc. This
subsidiary was dissolved in the second quarter of 1995 as it was no longer a
part of the Company's operating plans.
Capital Resources and Liquidity
Cash used in operations during the nine months ended September 30, 1996
was $8.6 million, compared to $18.5 million in 1995. The negative cash flow
in both periods was due to reduced premium collections and the payment of
claims for the nine months. The $9.9 million improvement in the negative
cash flow in 1996 compared to 1995 is due to primarily to decreases in loss
payments. While additional cash drain is anticipated during
1996, the expected amount is less than the $11.5 million of cash and short-
term investments held at September 30, 1996.
Shareholders' equity at September 30, 1996 was $21.9 million ($0.89 per
share), compared to $10.2 million ($0.61 per share) at December 31, 1995.
This increase million is attributable to the two capital contributions discussed
below and the net income of $3.7 million for the nine months ended
September 30, 1996. In addition, shareholders' equity has been reduced for
depreciation in the market value on the Company's investment portfolio of
$1.3 million during the nine months ended September 30, 1996.
During the first quarter of 1996, the Company issued 6,250,000 shares of
authorized but unissued common stock, par value $1.00 per share (the
"Common Stock"), at a price of $1.00 to several related investors. On June
14, 1996, the shareholders approved the transaction at a special meeting. On
September 26, 1996, the last of the regulatory approvals were obtained and
the cash was released from escrow. The proceeds were used to make a
contribution to the policyholders' surplus for one of the Company's
subsidiaries, South Carolina Insurance Company, in the amount of $6.3
million. In conjunction with the sale of common stock, the Company also
issued to the related investors stock options to acquire an additional
3,125,000 shares at the higher of $1.50 per share or book value at date of
exercise, expiring on December 31, 1998 and 3,125,000 shares at the higher of
$2.00 or book value at date of exercise, expiring on December 31, 2000.
Also during the first quarter of 1996, the Company issued 1,635,000 shares
of authorized but unissued Common Stock at a price of $2.00 per share to a
different group of investors. The proceeds of this stock sale were used to
liquidate the notes payable that were due May 1, 1996. In addition, the
Company has issued to this group stock options expiring December 31, 2000
to acquire an additional 1,635,000 shares at the higher of $2.50 per share or
book value at the date of exercise.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Due to the nature of their business, certain subsidiaries of the Company are
parties to various legal proceedings which are considered routine litigation
incidental to the insurance business.
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits
(10) Material Contracts
First Amendment to Employment Agreement, dated September 30, 1996, by
and between The Seibels Bruce Group, Inc. and John A. Weitzel, indexed as
Exhibit (10)(2)-1.
Separation Agreement, dated August 1, 1996, by and between The Seibels
Bruce Group, Inc. and William W. Shealy, indexed as Exhibit (10)(2)-2.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
THE SEIBELS BRUCE GROUP, INC.
(Registrant)
Date: November 14, 1996 /s/ John A. Weitzel
-----------------------
John A. Weitzel
Chief Financial Officer and Director
Date: November 14, 1996 /s/ Ernst N. Csiszar
------------------------
Ernst N. Csiszar
President and Director
Date: November 14, 1996 /s/ Mary M. Gardner
-------------------------
Mary M. Gardner
Controller (Principal Accounting Officer)
EX-10.(2)-1
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment, dated September 25, 1996 is made by and between The Seibels
Bruce Group, Inc. (the "Company") and John A. Weitzel (the "Employee").
WHEREAS, Company and Employee executed an Employee Agreement dated September
28, 1995 (the "Agreement");
NOW, THEREFORE, Company and Employee hereby agree that Paragraph 2 of the
Agreement is hereby amended so it reads in its entirety as follows:
"2. Term: The Company hereby employs the Employee for a term beginning
September 30, 1995, through December 31, 1996, renewable for one year
terms thereafter, and subject to the conditions set forth below. Each
party shall have the right to terminate this Agreement at any time during
the term upon thirty (30) days written notice to the other party."
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized representatives.
THE SEIBELS BRUCE GROUP, INC. EMPLOYEE
By: /s/ Ernst N. Csiszar By: /s/ John A. Weitzel
--------------------- ------------------------
Name: Ernst N. Csiszar Name: John A. Weitzel
Title: Chief Executive Officer Date: September 30, 1996
Date: September 30, 1996
EX-10.(2)-2
SEPARATION AGREEMENT
THIS AGREEMENT is made this 1st day of August, 1996, by and between
THE SEIBELS BRUCE GROUP, INC., a South Carolina corporation (the "Company"),
and WILLIAM WALTER SHEALY (the "Employee"). In consideration of the mutual
covenants and agreements contained in this Agreement, the parties agree as
follows:
1. Separation Date. The Employee shall terminate employment with the
Company on September 30, 1996 (the "Separation Date").
2. Winding Up Activities. In addition to any and all functions presently
performed by the Employee, Employee promises to undertake any training of
employees necessary or requested by the Company (the "Winding Up
Activities"). The Company will request such training by delivering a
list of required task to Employee whereby upon the completion of a given
task, the employee receiving the training will initial the list to
indicate satisfactory training. The Winding Up Activities shall be
completed when all task on the list have been initialed by the appropriate
employee.
3. Consideration. In consideration for completely performing the Winding
Up Activities by the Separation Date, the Company agrees to the following:
a. Employee shall continue to receive compensation at his current rate
until December 31, 1996.
b. Company will continue to provide Employee with medical insurance until
he reaches the age of sixty-five (65). Beginning October 1, 1996, the
Company will pay the entire monthly premium.
c. Company will provide Employee with life insurance at the reduced
retirement amount until he reaches the age of sixty-five (65). Beginning
October 1, 1996, the Company will pay the entire monthly premium.
4. Breach of Duty. In the event the Winding Up Activities are not completed
in accordance with Paragraph 2, no consideration whatsoever will be given
to Employee after the time of the breach.
5. Release. Employee acknowledges that the separation incentives that are
provided under the terms of the Agreement represent valuable consideration
in addition to other forms of compensation or benefits to which he
presently is entitled. Employee fully understands the binding nature of
the Agreement, and affirms that his decision to enter into the Agreement
has been made voluntarily and upon consultation with and advise of legal
counsel.
Employee hereby fully waives, discharges, and releases any and all claims
of whatever nature, known or unknown, he may have against The Seibels
Bruce Group, Inc., its subsidiaries, affiliated and related companies,
their respective owners, representatives, officers, directors, attorneys,
agents, employees, successors and assigns (hereinafter collectively
referred to as "TSBG") as a result of actions or omissions occurring
through the Separation Date. Specifically included in this waiver and
release are aany and all claims of alleged employment discrimination,
either as a result of Employee's separation of employment from the
Company or otherwise, under the Age Discrimination in Employment Act of
1967, as amended, 29 U.S.C. subsection 621, et seq., Title VII of the
Civil Rights Act of 1964, as amended, 42 U.S.C. subsection 2000e, et seq.,
and any and all claims under any other federal, state or local statutory
or common law or regulation. Employee also agrees not to institute a
lawsuit against TSBG related to or arising out of any claim encompassed
by this Release.
6. Employee Acknowledgments. Employee understands and agrees that the terms
and conditions contained in the Seibels, Bruce & Company Employee
Handbook regarding Confidential Information survive the termination of
his employment with the Company.
Employee agrees not to encourage, support or solicit claims against TSBG.
Employee also agrees that he will not criticize, denigrate or otherwise
speak adversely regarding TSBG. Specifically, and by example, Employee
agrees not to oppose or otherwise comment upon or file or give testimony
related to any filing by TSBG with regulatory agencies unless required to
do so by law. In the event of a violation of this provision, TSBG may
present this Agreement to a court of competent jurisdiction for purposes of
obtaining injunctive, monetary and/or other appropriate relief.
7. Severability. In the event one or more of the provisions of this
Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such a determination shall not affect any
other provision of this Agreement, and this Agreement shall be construed
as if such invalid or illegal or unenforceable provisions had never been
contained herein.
8. Confidentiality of Agreement. Employee acknowledges that the terms of
this Agreement are strictly confidential and Employee agrees not to
disclose them at anytime to any person other than his attorney and his
immediate family without the prior written consent of the Company,
except as necessary in any legal proceedings to enforce the provisions of
this Agreement, to prepare and file income tax forms, or pursuant to court
order after notice to the Company.
9. Entire Agreement. This Agreement embodies the entire agreement of the
parties relating to the subject matter hereof. No amendment or modification
of this Agreement shall be valid or binding upon the parties unless made in
writing and signed by the parties.
10. Binding Effect. This Agreement shall be binding upon the parties and
their respective heirs, representatives, successors, transferees and
assigns.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with laws of the State of South Carolina.
THE SEIBELS BRUCE GROUP, INC. EMPLOYEE
By: /s/ Ernst N. Csiszar /s/ William Walter Shealy
-------------------- -------------------------
Ernst N. Csiszar, President and CEO William Walter Shealy
Fax Number: (803) 748-2839
1501 Lady Street (PO Box 1)
Columbia, SC 29201(2)
WITNESSTH:
/s/ Priscilla Brooks
- --------------------
Priscilla Brooks, Corporate Secretary
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<DEBT-HELD-FOR-SALE> 35,623,000
<DEBT-CARRYING-VALUE> 35,623,000
<DEBT-MARKET-VALUE> 35,623,000
<EQUITIES> 34,000
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 53,704,000
<CASH> (6,554,000)
<RECOVER-REINSURE> 25,453,000
<DEFERRED-ACQUISITION> 121,000
<TOTAL-ASSETS> 224,794,000
<POLICY-LOSSES> 53,266,000
<UNEARNED-PREMIUMS> 2,012,000
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
0
<COMMON> 24,647,000
<OTHER-SE> (2,746,000)
<TOTAL-LIABILITY-AND-EQUITY> 224,794,000
6,410,000
<INVESTMENT-INCOME> 2,674,000
<INVESTMENT-GAINS> 196,000
<OTHER-INCOME> 33,368,000
<BENEFITS> 5,798,000
<UNDERWRITING-AMORTIZATION> 1,668,000
<UNDERWRITING-OTHER> 31,605,000
<INCOME-PRETAX> 3,577,000
<INCOME-TAX> (144,000)
<INCOME-CONTINUING> 3,721,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,721,000
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0
<RESERVE-OPEN> 61,031,000
<PROVISION-CURRENT> 3,985,000
<PROVISION-PRIOR> 1,609,000
<PAYMENTS-CURRENT> 3,620,000
<PAYMENTS-PRIOR> 9,739,000
<RESERVE-CLOSE> 53,266,000
<CUMULATIVE-DEFICIENCY> 1,609,000
</TABLE>
