INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE INC, S-1, 1997-05-02

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE INC
S-1, 1997-05-02
LIFE INSURANCE

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As filed with the Securities and Exchange Commission on May 1, 1997

Registration No. __________

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________

FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
__________________________

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
(Exact name of registrant as specified in its charter)

Texas 6411 75-1731373
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation
or organization)

4100 South Hulen Street, Fort Worth, Texas 76109 (817) 731-8621
Address, including zip code, and telephone, including area code, of
registrant's principal executive offices)
______________________________

Lamar C. Smith, Chairman of the Board
4100 South Hulen Street, Fort Worth, Texas 76109 (817) 731-8621
(Address, including zip code, and telephone, including area code, of
agent for service)
______________________________

Copies of all Communications and Notices to:
Vernon E. Rew, Jr., Esq.
Law, Snakard & Gambill, P.C.
3200 Bank One Tower
Fort Worth, Texas 76102

Approximate date of commencement of proposed sale to the public:
June 1, 1997.

If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box.

CALCULATION OF REGISTRATION FEE

Proposed Proposed
Title of each Amount to maximum maximum Amount of
class of be offering aggregate registration
securities to registered price per offering fee
be registered unit price

Class B Nonvoting
Common Stock $.02 150,000 $27.04 $4,056,000.00 $1,230.00

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.

CROSS REFERENCE SHEET

Pursuant to Item 501(b) of Regulation S-K under the Securities Act of
1933, as amended.

Item in Part I of Caption and Subcaption
Form S-1 in Prospectus

___________________________________________________________________________

1. Forepart of the Registration Statement and Cover Page
Outside Front Cover Page of Prospectus

2. Inside Front and Outside Back Cover Inside Front Cover Page
Pages of Prospectus of Prospectus

3. Summary Information, Risk Factors and Prospectus Summary; Risk
Ratio of Earnings to Fixed Charges Factors

4. Use of Proceeds Purpose of Offering/Use
of Proceeds

5. Determination of Offering Price Determination of Offering
Price

6. Dilution Dilution

7. Selling Security Holders *

8. Plan of Distribution Plan of Distribution

9. Description of Securities Description of Securities
to be Registered

10. Interest of Named Experts and Counsel *

11. Information with Respect to the Prospectus Summary; Risk
Registrant Factors; Capitalization;
Price Range of Common
Stock; Dividend Policy;
Selected Financial Data;
Management's Discussion
and Analysis of
Financial Condition and
Results of Operations;
Business of the
Company; Management;
Executive Compensation;
Principal Shareholders;
Certain Transactions;
Description of Securities

Disclosure of Commission Position on *
Indemnification for Securities Act
Liabilities
______________________

* Omitted since answer is either inapplicable or in the negative.

This page intentionally left blank

PROSPECTUS
(June 1, 1997)

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.

150,000 Shares
CLASS B NONVOTING COMMON STOCK
(par value $.02 per share)

THERE IS NO PUBLIC MARKET FOR THE COMMON STOCK OF INDEPENDENT RESEARCH
AGENCY FOR LIFE INSURANCE, INC. (the "Company") AND IT IS VERY UNLIKELY THAT
A MARKET WILL DEVELOP FOLLOWING THIS OFFERING. THESE SECURITIES INVOLVE A
HIGH DEGREE OF RISK (See "Risk Factors").

The Company is offering hereby a minimum of 36,983 shares and a maximum
of 150,000 shares of its Class B Nonvoting Common Stock at a price of $27.04
per share. The shares will only be offered to agents of the Company by an
officer of the Company who will receive no commission or other remuneration
for such service. If a minimum of $1,000,000 of shares are not sold by June
30, 1997 (unless extended by the Company for up to an additional thirty (30)
days) on which date this offering will terminate, then no shares will be
issued and any funds received shall be refunded to subscribers. Funds
received for the purchase of shares shall be placed in an escrow account with
Central Bank & Trust, Fort Worth, Texas, pending the determination as to
whether $1,000,000 of the shares have been sold. (See "Plan of
Distribution.")
___________________________________________________________________________
___________________________________________________________________________

Underwriting
Price Discounts and Proceeds to
to Public Commissions (1) the Company (2)
__________________________________________________________________________

Per Share $27.04 None $27.04
Total Minimum $1,000,000.00 None $1,000,000.00
Total Maximum $4,056,000.00 None $4,056,000.00

__________________________________________________________________________
__________________________________________________________________________

(1) All shares offered will be sold through the Registrant (the
Company). This offer is not underwritten, and no commissions will
be paid to any party in connection with such sales.

(2) This amount is the gross proceeds to the Company. If a minimum of
$1,000,000 of shares are not sold by June 30, 1997, (unless
extended by the Company for up to an additional thirty (30) days)
on which date this offering will terminate, then no shares shall
be issued and any funds received to purchase shares shall be
refunded to the subscribers. The expenses of this offering will
be borne by the Company and will be in the amount of approximately
$75,000 including filing fees, printing, legal, accounting and
other miscellaneous fees and expenses.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus is June 1, 1997.
_________________________

No person has been authorized in connection with the offering made
hereby to give any information or to make any representation not contained in
this Prospectus and, if given or made, such information or representation
must not be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, any of the securities offered hereby to any person or by anyone
in any jurisdiction in which it is unlawful to make such an offer or
solicitation. Neither delivery of this Prospectus nor any sale made
hereunder at any time implies that information contained herein is correct as
of any time subsequent to its date.

______________________

AVAILABLE INFORMATION

The Company is subject to the informational reporting requirements of
Section 13(a) of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), as a result of filing a registration statement pursuant to
Section 12(g) of the Securities Exchange Act of 1934 (which became effective
on January 24, 1997) with respect to the Company's Class B Non-Voting Common
Stock, which was held of record by greater than 500 shareholders at the
Company's fiscal year end on September 30, 1996 (although such class of
Common Stock is presently held of record by only 480 shareholders), and in
accordance therewith files periodic and current reports and other information
with the Securities and Exchange Commission (the "Commission"). Prior to the
effectiveness of such registration statement, the Company was subject to the
informational reporting requirements of Section 15(d) of the Exchange Act.
Copies of such reports and other information can be obtained by mail from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such reports and other
information can also be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at
500 West Madison Street (Suite 1400), Chicago, Illinois 60661 and at 75 Park
Place, 14th Floor, New York, New York 10007.

The Company has filed with the Commission a registration statement on
Form S-1 (herein, together with all amendments and exhibits, referred to as
the "Registration Statement") under the Act. This Prospectus does not
contain all of the information set forth in the Registration Statement. For
further information, reference is hereby made to the Registration Statement.

___________________

TABLE OF CONTENTS

Item Page

PROSPECTUS SUMMARY .....................................................1

RISK FACTORS............................................................3

PURPOSE OF OFFERING/USE OF PROCEEDS.....................................5

DETERMINATION OF OFFERING PRICE........................................ 6

DILUTION............................................................... 7

CAPITALIZATION..........................................................7

PRICE RANGE OF COMMON STOCK.............................................8

DIVIDEND POLICY.........................................................8

SELECTED FINANCIAL DATA.................................................9

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS..........................................................10

BUSINESS OF THE COMPANY................................................14

MANAGEMENT.............................................................18

EXECUTIVE COMPENSATION.................................................21

PRINCIPAL SHAREHOLDERS.................................................23

CERTAIN TRANSACTIONS...................................................24

DESCRIPTION OF SECURITIES..............................................25

PLAN OF DISTRIBUTION...................................................28

LEGAL MATTERS..........................................................29

EXPERTS................................................................30

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS.............................F-1

APPENDICES

STOCK AGREEMENT APPENDIX A.................................A-1
SUBSCRIPTION AGREEMENT APPENDIX B.................................B-1

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more
detailed information and financial statements and notes thereto appearing
elsewhere in this Prospectus.

The Company

The Company was incorporated on December 9, 1980 under the laws of the
state of Texas, and is engaged in the business of a life insurance general
agency for sales to United States military personnel. The Company has six
wholly-owned subsidiaries engaged in the same business in the states of
Hawaii, Wyoming, Montana, New York, Nevada, and Alabama respectively. The
Company's wholly-owned subsidiary, United Services Planning Association, Inc.
("USPA"), is also a Texas corporation, and is a broker-dealer of securities.
The Company's wholly-owned subsidiary, First Command Bank, is a federal
savings bank. (See "Business of the Company.") The Company's principal
executive offices are located at 4100 South Hulen Street, Fort Worth, Texas
76109.

The Offering

Type of Securities Class B Nonvoting Common Stock
Number of Shares Outstanding
Prior to Offering 922,257
Number of Shares Offered to be Sold 150,000
Number of Shares to be Outstanding
After Offering assuming that all
of the Shares offered hereby are sold 1,072,257
Estimated Net Proceeds to Company assuming
that all of the Shares offered hereby
are sold $3,981,000

This offer is extended to agents and certain key employees of the
Company only, pursuant to a Form S-1 filing with the Securities and Exchange
Commission and compliance with state securities laws in the states where
offered. Prior to this offering there has been no public market for the
common stock of the Company and it is extremely unlikely that a market for
the common stock will ever develop. Therefore, the stock price cannot be and
is not determined by actions and considerations of any such market. The
Company has made prior offerings of Class B Nonvoting Common Stock as
follows: a Regulation A offering in 1981 to Company agents, an S-18 offering
to this group in 1982, a Regulation A offering to this group in 1984, a
Regulation A offering to this group in 1985, a Regulation A offering to this
group in 1987, an S-18 offering to this group in 1990, an S-18 offering to
this group in 1993, an S-1 offering to this group in 1995, and an S-1
offering to this group in 1996. Presently, the Company has approximately
four hundred eighty (480) shareholders, all of whom are required by Texas law
to hold licenses as Texas insurance agents.

In addition, all holders of common shares are subject to Stock
Agreements with the Company. The form of Stock Agreement which first time
subscribers to shares of Class B Nonvoting Common Stock will be required to
enter into is set forth in "Appendix A" attached hereto. Under this Stock
Agreement the holder agrees that, in accordance with Texas law pertaining to
incorporated insurance agencies, the holder must be duly licensed as a Texas
life insurance agent, and, in the event the holder ceases to be so licensed,
the holder and the Company agree that the holder's shares will be repurchased
by the Company. The shares will also be repurchased by the Company (1) in
the event that the holder ceases to be a duly authorized agent of the
Company, (2) in the event of the holder's death, or (3) in the event that the
holder desires to sell or otherwise dispose of his/her shares. Upon the
receipt of written notice of any such event, the Company has ninety (90) days
within which to close the repurchase of such shares. Under the terms of the
Stock Agreement, the price at which the Company will repurchase such shares
is determined by the Company, in its sole and absolute discretion, at least
annually. The Company will determine to pay the repurchase price in cash, by
delivery of the Company's unsecured promissory note containing such terms and
provisions as the Company shall determine, or by a combination of cash and
such a promissory note. Under the Stock Agreement, the holder agrees not to
transfer, pledge, assign, or otherwise in any manner encumber any such
shares, except pursuant to the terms of the Stock Agreement. (See
"Description of Securities.")

As a result of these statutory and contractual restrictions on disposal
of the Company's Class B Stock, no market, other than the Company, has ever
developed for the Stock, and it is very unlikely that such a market ever will
develop. Therefore, the stock price cannot be and is not determined by
actions and considerations of any such market.

While the Company may change its methodology or adjust the Stock price
based on other factors at any time in the future, the price at which the
Company has purchased Class B Nonvoting Common Stock in the past has been
determined from the per share book value* of the Stock at the end of the
Company's current fiscal year, reduced by dividends declared for payment on
the current year's earnings. In the event that in a given year the entire
current year's earnings are not paid as a dividend, the resultant net
increase in per share book value over the previous year's similarly computed
Stock price is then added incrementally, 1/12th per month for the ensuing 12
months to the current September 30 Stock price (based upon the prior year's
computation). The book value per share at the end of the fiscal year ended
September 30, 1995, less any dividends declared at the end of fiscal year
1995 resulted in a Class B Stock price at September 30, 1996, of $27.04 per
share. The increase in book value per share for the fiscal year ended
September 30, 1996, based on the Company's earnings for such fiscal year, was
$7.63*, all of which was paid as a dividend on December 2, 1996. Because the
Company paid out the full increase in book value between September 30, 1995
and September 30, 1996 as a dividend, the price which the Company will pay
throughout fiscal 1997 will remain $27.04 per share. Because there is no
public market for the Class B Stock of the Company, this method of
determining the price the Company will pay for the Stock may be deemed to be
arbitrary. (See "Determination of Offering Price.")

The shares will be offered until fully subscribed, but in no event
beyond midnight on June 30, 1997 (unless extended by the Company for up to an
additional thirty (30) days). Ownership of these shares is limited to those
agents executing Stock Agreements and licensed as life insurance agents in
Texas. The shares offered are Class B Nonvoting Common Stock. (See "Risk
Factors," "Plan of Distribution" and "Description of Securities.")

Risk Factors

The offered stock involves numerous risks, including the absence of a
public market for the shares after the offering, restrictions applicable to
the shares by the nature of this offering and under the Stock Agreement, and
the nature of the Company's market. (See "Risk Factors.")

__________________________

______________________

RISK FACTORS

1. Competition. The Company faces keen and increasing competition. A
number of insurance sales groups solicit within the military market. To some
extent, the Company relies on replacing competitors' policies with more cost
effective ones for a portion of its sales. Competition is equally keen for
USPA, due to the numerous investment opportunities available to military
personnel. (See "Business of the Company.")

2. War. Business could be reduced if armed conflict (or even the
prospect of armed conflict) involving United States military forces occurs.
Such reductions have occurred in the past. In such event, insurance
companies can be expected to limit or cease writing policies on military
personnel which provide war coverage. Members of the sales force may be
called to active duty. The Company could then be unable to cover its current
high level of fixed operating expenses.

3. Reduction in Force. The U.S. military has experienced base closures
and a reduction in force over the past few years resulting in a smaller
market of active duty members of the military for the Company's services.
Further such reductions can occur at any time. However, with approximately
1,500,000 active duty members currently, the Company will still be selling,
and providing service, to less than twenty-five percent of its potential
market (Rank of E-6 and above including all warrant and commissioned officer
ranks). (See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Business of the Company.")

4. No Civilian Sales Market. The Company's sales force has never sold
competitively in the civilian market, and the Company has no plans to attempt
to sell to such market. (See "Business of the Company.")

5. High Level of Compensation for Company's Agents. The Company must
maintain a high level of compensation for its agents, inasmuch as the Company
encourages its agents to maintain a high degree of professionalism, and the
Company's business is highly competitive. (See "Business of the Company.")

6. Offering Price. The offering price of $27.04 per share was
determined by the Company, in its sole and absolute discretion. There is no
established public trading market for the shares, therefore, market forces do
not and cannot determine share price. The offering prices results in a
price/earnings ratio of approximately 3:1. (See "Prospectus Summary,"
"Determination of Offering Price" and "Description of Securities.")

7. No Control for New Investors; Voting Shareholders Control the
Company. The Class A voting shareholders will continue to control the
Company after the offering, regardless of whether or not the offering is
complete, since all of the offered shares will be Class B Nonvoting Stock.
The Company has made prior offerings of Class B Nonvoting Common Stock as
follows: A Regulation A offering in 1981 to Company agents, an S-18 offering
to this group in 1982, a Regulation A offering to this group in 1984, a
Regulation A offering to this group in 1985, a Regulation A offering to this
group in 1987, an S-18 offering to this group in 1990, an S-18 offering to
this group in 1993, an S-1 offering to this group in 1995, and an S-1
offering to this group in 1996. Presently, the Company has approximately
four hundred eighty (480) shareholders. The Class A voting shareholders will
continue to control the Company after the offering is completed. (See
"Principal Shareholders" and "Description of Securities.")

8. Restrictive Legend; Restrictions on Share Ownership and Transfer.
All shares sold pursuant to the offering will bear the following legend which
describes additional restrictions on ownership and transfer, more fully
described in paragraph "9" below:

"The transferability of these shares is limited by the provisions of
Article 2.22 of the Texas Business Corporation Act and Articles 21.07-1
of the Texas Insurance Code, as well as the provisions of the Stock
Agreement identified on the reverse side hereof."

9. Restrictions on Ownership and Transfer of Shares. As required by
Texas law, only persons licensed as insurance agents by the state of Texas
are permitted to own shares in an insurance agency incorporated in the state
of Texas. Each first time shareholder must also execute a Stock Agreement
which provides that in the event the shareholder fails to continue as a
licensed insurance agent, ceases to be a duly authorized agent of the
Company, dies, or desires to sell his shares, the Company will repurchase
such shares within a period of ninety (90) days, and that the shares may not
be pledged, assigned or encumbered. (See "Description of Securities" and
"Appendix A - Stock Agreement.")

10. Stock Offered Hereunder. All of the Stock offered hereunder is
Class B Nonvoting Common Stock. It is unlikely that any Class A Voting
Common Stock will be offered in the foreseeable future, and the Class A
Voting Common Stock is, and will likely continue to be, owned and voted by
present shareholders. (See "Description of Securities.")

11. Payne Family Stock Agreement. Surviving members of the family of
Carroll H. Payne, the Company's founder, Freda J. Payne, Debra Sue Payne,
Carroll H. Payne II, and Naomi K. Payne, own 12 of the 25 outstanding shares
of the Company's Class A Voting Common Stock and are parties to a certain
Stock Agreement dated March 22, 1983, between such family members and the
Company which provides, among other things, that in the event that any of
such persons desire to sell or otherwise dispose of all or any portion of
their Class A Voting Common Stock or in the event of the death of any such
person, the other Payne family members shall have the option to purchase such
shares, on a proportionate basis, for a period of sixty (60) days. These
provisions of such Stock Agreement can be expected to have the effect of
concentrating ownership of a significant number of the shares of Class A
Voting Common Stock in the hands of first three, then two, and eventually one
of these Payne family members.

12. No Market. There is not now and never has been a market for the
Company's Class B Stock other than the Company itself. Because of the
statutory and contractual restrictions on disposal of this Stock, it is
extremely unlikely that a public market for the Stock will ever develop or
that purchasers will be able to sell their shares other than in accordance
with the "Stock Agreement." Investors may not be able to readily liquidate
their shares of Stock of the Company. (See "Prospectus Summary,"
"Description of Securities," and "Appendix A-Stock Agreement.")

13. Management Will Have Broad Discretion Over the Allocation of
Proceeds. All (100%) of the net cash proceeds to the Company from this
offering (estimated to be $925,000 if the minimum number of shares is sold
and $3,981,000 if the maximum number of shares is sold) shall become a part
of its working capital, and shall be used for the continuing operation of the
Company's business, for further development and expansion, and for limited
contingency planning. Management of the Company will have broad discretion
in determining the specific application of all of such net cash proceeds.
(See "Purpose of Offering/Use of Proceeds.")

14. Agency Agreements Terminable at Will or Upon Short Notice. All of
the agency agreements which the Company or its insurance agency subsidiaries
have with the ten insurance carriers the Company represents as general agent
are terminable at will or upon short notice. The Company has been doing
business with these insurance carriers for from nine to twenty-six years or
more (with the exception of the newest of the carriers represented by the
Company, which the Company has done business with for less than one year) and
is not aware of any intent on the part of any of these carriers to terminate
any agency agreement. (See "Business of the Company.")

15. Make-Up of Company's Assets. Marketable securities, consisting of
mutual fund shares, make up approximately sixty three percent (63%) of the
Company's assets. Such securities are subject to fluctuations in value as a
result of market forces. Furthermore, under applicable accounting policies,
such securities are reported by the Company at such fair market value. (See
"Index to Consolidated Financial Statements - Note 2, Summary of Significant
Accounting Policies - Marketable Securities.")

16. Excess of Current Liabilities Over Current Assets. As of March 31,
1997 the Company's current liabilities of $27.4 million exceed its current
assets of $19.6 million by $7.8 million. This is principally due to the
amount of outstanding loans to the Company from insurance carriers calculated
on first year commissions to be earned by the Company on certain insurance
policies sold by its agents. See paragraph "17" below. If, for any reason,
the Company is unable to meet its current liabilities as they become due,
this could have an adverse impact on the Company's operations.

17. Loans From Insurance Carriers. The Company has loan agreements
with five of the insurance carriers it represents as general agent whereby
the carriers loan an amount to the Company equal to the difference between
the total amount of first year commissions to be earned by the Company on
certain insurance policies sold by its agents and the amount of commissions
actually earned by the Company as of any particular date. As of March 31,
1997, outstanding loans from insurance carriers to the Company totalled
approximately $11.6 million. Each of the loan agreements provides that the
outstanding balance of any loan be repaid immediately by the Company if the
policy upon which the loan was calculated is canceled during its first year.
However, historically, less than five percent (5%) of the policies sold by
the Company are canceled during the first year of the policy. (See "Business
of the Company - Insurance Agency Operations.")

18. Government Regulation of the Company's Insurance, Securities and
Banking Businesses. The insurance, securities and banking industries are
heavily regulated as to trade practices. The Company and its agents, USPA
and its registered representatives, and its bank employees must be
continuously aware of such regulations and comply fully at all times.
Regulatory fines, sanctions and suspensions do occur in the insurance,
securities and banking industries, and can have a negative effect on
financial results. (See "Business of the Company - Regulation and
Competition.")

19. Possible Dilution of Ownership as a Result of Future Stock
Offerings. Over the past fifteen years the Company has made a total of ten
stock offerings to its agents, including this offering, and the Company may
make additional stock offerings to its agents in future years. Any such
future stock offerings may have the effect of diluting the percentage
ownership of a stockholder in the Company's Class B Common Stock and the
accompanying benefits with respect thereto, including dividends declared and
paid on such stock, if any. (See "Prospectus Summary - The Offering" and
"Purpose of Offering/Use of Proceeds".)

PURPOSE OF OFFERING/USE OF PROCEEDS

The primary purpose of this offering is not to raise capital, but to
provide the Company's Agents and certain key employees an opportunity to
purchase the shares being offered hereby. The Company's need for capital has
long been satisfied by its earnings history. The Company is vitally
committed to its long-term perpetuation as currently constituted to the
degree practical. The Company believes that offering the opportunity of
stock ownership to its Agents and key employees provides an incentive to
produce and to be concerned with efficiency, and encourages longer term
representation or employment. The stock ownership structure of the Company
is predicated on the belief that the incentive benefits of stock ownership
serve these purposes. In that connection, the Company also believes that
stock should be retained only by those who are currently actively involved in
the conduct of the Company's business, hence the Company has been
consistently interested in exercising its right to repurchase all shares
offered back to treasury and in limiting to five percent of shares
outstanding any individual shareholder's interest in the Company.

Over the past fifteen years the Company has made a total of ten stock
offerings to its agents, including this offering, and the Company may make
additional stock offerings to its agents in future years. Any such future
stock offerings may have the effect of diluting the percentage ownership of
a stockholder in the Company's Class B Common Stock and the accompanying
benefits with respect thereto, including dividends declared and paid on such
stock, if any. (See "Prospectus Summary - The Offering").

The proceeds received by the Company from this offering will be
contributed to the capital of the Company. The Company estimates that the
cost of this offering (including filing fees, printing, legal, accounting,
and other miscellaneous fees and expenses) will amount to approximately
$75,000 regardless of the number of shares sold, and the Company shall use a
portion of the proceeds received by it from this offering to pay such costs.
All of the net cash proceeds to the Company from this offering (estimated to
be $925,000 if the minimum number of shares is sold and $3,981,000 if the
maximum number of shares is sold) shall become a part of its working capital,
and shall be used for the continuing operation of the Company's business, for
further development and expansion, and for limited contingency planning. It
is not anticipated that any part of the net proceeds will be used for the
purpose of retiring or reducing any indebtedness of the Company. Management
of the Company will have broad discretion in determining the specific
application of all of such net cash proceeds consistent with the above.

DETERMINATION OF OFFERING PRICE

While the Company may change its methodology or adjust the Stock price
based on other factors at any time in the future, the price at which the
Company has purchased Class B Nonvoting Common Stock in the past has been
determined from the per share book value* of the Stock at the end of the
Company's current fiscal year, reduced by dividends declared for payment on
the current year's earnings. The resultant net increase in per share book
value over the previous year's similarly computed Stock price is then added
incrementally, 1/12th per month for the ensuing 12 months to the current
September 30 Stock price (based upon the prior year's computation). For
example, the book value per share at the end of the fiscal year ended
September 30, 1995, less any dividends declared at the end of fiscal year
1995 resulted in a Class B Stock price at September 30, 1996, of $27.04 per
share. The increase in book value per share for the fiscal year ended
September 30, 1996, was $7.63*, all of which was paid as a dividend on
December 2, 1996. Because the Company paid out the full increase in book
value between September 30, 1995 and September 30, 1996 as a dividend, the
price which the Company will pay throughout fiscal 1997 will remain $27.04
per share. Because there is no public market for the Class B Stock of the
Company, this method of determining the price the Company will pay for the
Stock, if applied by the Company, may be deemed to be arbitrary.

* The calculation of per share book value does not include the effect of
reporting the Company's investments at market value as a result of the
adoption by the Company of Financial Accounting Standards Board (FASB)
Statement #115. For fiscal year 1996, the application of FASB Statement #115
resulted in an addition to stockholders equity reported as Unrealized Holding
Gains. The Board of Directors determined that, for purposes of the
determination of the price per share, such Unrealized Holding Gains should be
excluded so that the method of calculation will be consistent with historical
practice.

DILUTION

Based on the balance sheet of the Company as of September 30, 1996, **
the net tangible book value ("book value") per share before this offering is
$27.04 and the book value per share as a result of this offering, assuming
the sale of all 150,000 shares offered hereby, will be $26.97. This offering
therefore results in a decrease in book value per share of $0.07 and a
dilutive effect to purchasers in this offering of $0.07 per share (the
difference between the per share offering price of $27.04, and the post-
offering per share book value of $26.97).
___________________
** Adjusted to reflect the December 1996 dividend of $7.63 per share and the
currently outstanding number of shares of 922,257. In addition, the shares
of Class A Voting Common Stock, of which there are only 25 outstanding, are
not included. This calculation does not include Unrealized Holding Gains
resulting from the adoption of FASB Statement #115. (See "Determination of
Offering Price".)
____________________

CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company as of September 30, 1996, and as adjusted to give effect to the sale
by the Company of the 150,000 shares of the Class B Nonvoting Common Stock
offered hereby and the application of the estimated net proceeds therefrom.
See "Purpose of Offering/Use of Proceeds."

September 30, 1996
-------------------
Actual As
Adjusted

Long-Term Obligations:

Building tenant deposits . . . . . . . . . . . . . $ 1,611 $ 1,611

Notes Payable(1) . . . . . . . . . . . . . . . . . 494,650 494,650

Deferred Career Commission Plan payable (2) . . 14,571,565 14,571,565

Deferred income taxes(3) . . . . . . . . . . . . 1,930,874 1,930,874

Total Long-Term Obligations . . . . . . . .16,998,700 16,998,700

Stockholders' Equity(4):
Common Stock
Class A - Voting . .. . . . . . . . . . . . . . . . .10 10

Class B - Non-Voting . . . . . . . . . . . . . 55,729 55,729

Additional paid-in capital. . . . . . . . . . . 2,830,260 6,808,260

Retained earnings(5). . . . . . . . . . . . . . 31,223,388 31,223,388

Unrealized holding gains(6) . . . . . . . . . . 9,875,400 9,875,400

Treasury stock - Class A Common, at par . . . . (8) (8)

Treasury stock - Class B Common, at par . . . . (36,072) (33,072)

Total Stockholders' Equity . . . . . . . . 43,948,707 47,929,707

Total Capitalization . . . . . . . . . . $ 60,947,407 $64,928,407

</TABLE>
________________________
(1) See Note 5 to the Company's Consolidated Financial Statements
(2) See Note 10 to the Company's Consolidated Financial Statements
(3) See Note 8 to the Company's Consolidated Financial Statements
(4) See Note 6 to the Company's Consolidated Financial Statements
(5) See Notes 7 and 11 to the Company's Consolidated Financial Statements
(6) See Note 3 to the Company's Consolidated Financial Statements

PRICE RANGE OF COMMON STOCK

Market Information

There is presently no market for the Company's common stock, of either
class, and it is very unlikely that a market will develop in the future. As
an insurance agency incorporated in Texas, only insurance agents licensed in
Texas can own the Company's stock. Therefore, the stock price cannot be and
is not determined by actions and considerations of any such market. See
"Prospectus Summary," "Determination of Offering Price," and "Description of
Securities."

Number of Security Holders

As of March 31, 1997, the Company had 14 stockholders of record of its
Class A - Voting Common Stock, and 480 stockholders of record of its Class B
- - Nonvoting Common Stock.

DIVIDEND POLICY

Dividend History and Restriction

Holders of common shares are generally entitled to receive dividends as
may be declared by the Board of Directors from funds legally available
therefor. Although the Company has paid dividends on its common shares in
the years 1987, 1988, 1989, 1990, 1991, 1992, 1993, 1994, 1995, and 1996, no
assurance can be given that any dividends will be declared and paid in the
future. Future dividend policies shall be subject to the discretion of the
Board of Directors and will depend upon a number of factors, including, among
other things, future earnings, capital requirements (particularly capital
needed for rapid growth or a major business initiative), war, and the
financial condition of the Company, any one of which could cause the Company
to be unable to pay dividends in one or more years. There are currently no
legal or contractual restrictions that materially limit the Company's ability
to pay dividends.

Following is a history of the dividends paid by the Company since
inception. Dividends have only been paid on its Class B - non-voting common
stock.
<TABLE>
<C> <C> <C>
Date of Record Payment Date Per Share
(1)

October 20, 1987 December 3, 1987 $8.00
September 30, 1988 November 30, 1988 2.10
September 30, 1989 November 30, 1989 2.65
September 30, 1990 November 28, 1990 3.00
September 30, 1991 November 30, 1991 4.00
September 30, 1992 December 1, 1992 6.59
September 30, 1993 December 1, 1993 7.31
September 30, 1994 December 1, 1994 4.88
September 30, 1995 December 1, 1995 4.50
September 30, 1996 December 2, 1996 7.63
</TABLE>

(1) On October 31, 1988, the Company's stockholders approved an
amendment to the Company's Articles of Incorporation whereby the Company's
Class B common stock would split on a basis of five new shares for each one
share then outstanding. The par value of the stock was correspondingly
reduced from a par value of $.10 per share to a par value of $.02 per share.
The stock split became effective on November 1, 1988.

SELECTED FINANCIAL DATA

The following table sets forth selected consolidated financial data of the
Company for the five years ended September 30, 1992 through 1996, and for the
periods ended March 31, 1996 and 1997. This information should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the financial statements and related notes
thereto included elsewhere herein. The selected consolidated financial data
for the years ended September 30, 1992 through 1996 was derived from the
audited financial statements of the Company. The financial data for
March 31, 1996 and 1997 is unaudited.
<TABLE>
<S> <C> <C>
Six Months Ended March 31,

Income Statement 1997 1996
Data:

Commissions $59,557,969 $57,412,659
Revenue

Operating Expenses (55,641,437) (54,129,323)

Operating Income 3,916,532 3,283,336

Other Income 5,246,052 3,682,394

Income before 9,162,584 6,465,730
Income Taxes

Income Taxes (2,957,992) (2,216,056)

Net Income $ 6,204,592 $ 4,749,674

Earnings Per Share $ 6.56 $ 4.91

Cash Dividends $ --- $ ---
Declared

Balance Sheet Data:

Working Capital $(7,815,510) $(9,563,382)
(Deficit)

(1) Loans from 11,582,720 10,819,335
Insurance Companies
(Included in Working
Capital)

Total Assets 85,981,910 75,097,451

Long Term 17,761,137 14,020,897
Obligations

Stockholders' Equity 40,796,239 38,734,541

</TABLE>

<TABLE>
<S> <C> <C> <C> <C> <C>
Years Ended September 30,

Income Statement 1996 1995 1994 1993 1992
Data:

Commissions $116,632,069 $108,443,810 $100,491,633 $ 93,767,954 $ 83,885,886
Revenue

Operating Expenses (109,040,366) (102,510,314 (93,421,636) (86,224,269) (77,374,218)

Operating Income 7,591,703 5,933,496 7,069,997 7,543,685 6,511,668

Other Income 3,719,793 4,201,478 3,464,253 3,280,284 3,368,056

Income before 11,311,496 10,134,974 10,534,250 10,823,969 9,879,724
Income Taxes

Income Taxes (3,842,639) (3,417,024) (3,561,062) (3,567,212) (3,592,814)

Net Income $7,468,857 $6,717,950 $6,973,188 $7,256,757 $6,286,910

Earnings Per Share $ 7.97 $ 7.18 $ 7.51 $ 7.65 5.89

Cash Dividends $ 7.63 $ 4.50 $ 4.88 $ 7.31 6.59
Declared

Balance Sheet Data:

Working Capital $(3,816,198) $(5,876,390) $(6,577,744) $(2,510,885) $(11,642,662)
(Deficit)

(1) Loans from 10,458,853 12,319,485 11,128,518 10,681,383 12,528,037
Insurance Companies
(Included in Working
Capital)

Total Assets 88,689,932 79,634,999 66,095,600 54,590,033 56,262,287

Long Term 16,998,700 12,376,835 7,256,834 3,006,623 589,624
Obligations

Stockholders' 43,948,707 40,014,745 32,193,799 29,121,614 28,212,818
Equity
</TABLE>
(1) This loan balance will continue to perpetuate as long as the Company
continues to do business with these insurance companies on the same premise
as in the past.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results during the periods included in the accompanying consolidated
financial statements.

Results of Operations

Six Months Ended March 31, 1997 and 1996 - Comparison

During the six months ended March 31, 1997, the demand for life
insurance and mutual fund investments marketed by the Company to U.S.
military personnel remained strong. Commission revenue for the six months
ended March 31, 1997, increased 3.7% to $59,557,969 from $57,412,659 recorded
during the comparable period in 1996. This overall increase in commission
revenue is a trend which has occurred over the past several years, and is
expected to continue in the future due to the long term personal financial
management philosophy espoused to clients, an effectively trained sales force
and efficient marketing practices used by the Company's sales agents. The
Company's analysis of the impact of base closures and force reduction in the
U.S. Military indicates to the Company a minimal impact upon existing agents
in the field and a market which will continue to present an opportunity for
growth of the Company's business.

Commissions, incentive commissions and agent expenses for the six months
ended March 31, 1997 increased 2.5% or $1,072,769 from the same period in
1996. Generally, in the past there has been a constant relationship between
commission revenues and commissions, incentive commissions and agent
expenses. Commissions, incentive commissions, and agent expenses have
decreased as a percentage of commission revenues due to a decline in the
voluntary allocation to the agents' Deferred Career Commission Plan (DCCP) of
$248,000 from the comparative six month period in 1996. Without this
reduction to the DCCP, commissions, incentive commissions and agent expenses
would have increased 3.1% from the comparative period.

General and administrative expenses for the six months ended March 31,
1997 increased 3.7%, or $439,345, from the same period in 1996. This
increase is primarily due to costs involved in the redesign of the corporate
database used by the home office. This redesign will result in improved
efficiencies in both personnel and computer hardware costs in the future. In
addition, increased data processing costs and general inflationary factors
contributed to higher operating costs.

The total of other income for the initial six months of fiscal year 1997
increased 42.5% to $5,246,052 from $3,682,394 earned in the comparable six
month period for 1996. This increase is primarily attributable to greater
distributions from mutual funds.

Three Months Ended March 31, 1997 and 1996 - Comparison

Income from operations for the current quarter increased $1,089,655 or 60.7%,
from the comparable period in 1996. The increase is attributable to a 5.4%
improvement in commission revenue for the quarter. This favorable change was
enhanced by a 1.4% decrease in general and administrative expenses and
partially offset by a 2.7% increase in commissions, incentive commissions and
agent expenses.

The total of other income for the current quarter of 1997 increased to
$285,632 from $207,127 earned in the comparable three month period in 1996.
This increase is primarily attributable to greater interest and investment
income in 1997.

Fiscal Years Ended September 30, 1996, 1995 and 1994 - Comparison

During the year ended September 30, 1996, the demand for life insurance
and mutual fund investments marketed by the Company to U.S. military
personnel remained strong and total current sales continued to increase.
Commission revenue for the year ended September 30, 1996 increased 7.6% to
$116,632,069 from $108,4443,810 recorded during the year ended September 30,
1995. This compares to a 7.9% increase from fiscal year 1994 to 1995. The
percentage increase in commission revenue for fiscal year 1996 is the second
lowest increase since fiscal year 1992. However, the largest increases in
recent years has been 11.8%. After factoring in the recent low inflation
rates, the increase in commission revenue of 7.6% is still very comparable to
the past several years. These variances are attributable to IRA, Inc. and
each of its subsidiaries. This overall increase in commission revenue is
considered to be continuing a trend which has occurred over the past several
years, and is expected to continue in the future due to the long term
personal financial management philosophy espoused to clients, an effectively
trained sales force and efficient marketing practices used by the Company's
sales agents.

The overall growth in commission revenue occurred at a lower rate for
insurance sales than it did for mutual fund sales. During the past fiscal
year commission revenue for insurance sales increased 5.5% to $72,975,873 and
commission revenue for mutual fund sales increased 11.1% to $43,656,196. The
percentage increases from fiscal year 1994 to 1995 were 9.2% and 5.8%,
respectively, for insurance and mutual fund sales. The larger percentage
increase in mutual fund sales was due mainly to the abundance of favorable
press given to mutual funds over the past couple of years and the public's
increased recognition of the importance of saving for retirement. The
Company does not foresee a decrease in mutual fund investing in the future
unless a serious "bear market" were to occur and investors start becoming
more conservative in their savings methods.

The Company's analysis of the impact of base closures and force
reduction in the U.S. military indicates to the Company a minimal impact upon
existing agents in the field and a market which will continue to present an
opportunity for growth of the Company's business. Specifically, the Company
estimates that it will still be selling, and providing service, to less than
twenty-five percent of its potential overall market (Rank of E-6 and above
including all warrant and commissioned officer ranks) during the forthcoming
year.

Commissions, incentive commissions, and agent expenses for the years
ended September 30, 1996 and 1995 increased 7.2% and 8.9%, respectively, in
the aggregate. These increases are consistent with the increase in
commissions revenue. Commissions, incentive commissions, and agent expenses
have been 74% of commission revenues for each of the past three fiscal years.

This constant relationship may not continue in the future because it is
expected that a growing proportion of the future increases in commission
revenue will result from trail or renewal commissions. Trail and renewal
commission revenue result from sales made in prior years.

The Company receives reduced commissions for several years subsequent to
the actual sale, whereas agents generally receive all of their commissions
during the twelve months following a sale. Therefore, commissions and agent
expenses could decrease in relation to commission revenue. This has yet to
occur since part of the compensation paid by the Company to its agents is in
the form of discretionary incentive commissions called "Future Incentive
Commissions" and voluntary allocations to the agents' Deferred Career
Commission Plan (DCCP). By utilizing these discretionary compensation
methods the Company has the ability to better control its costs, as well as
provide more rewards to the best producing sales agents.

General and administrative expenses for the years ended September 30,
1996 and 1995 increased $728,499 or 3.3% and $2,483,083 or 12.7%,
respectively, over their prior years. The increase from 1995 to 1996 is
considered a general inflationary increase. A significant component of the
fiscal year 1995 increases were salaries and other employee benefit related
costs resulting from hiring additional employees and providing existing
employees with competitive pay increases. These new employees' salaries and
other employee benefit related costs, in addition to standard pay raises,
caused general and administrative expenses to increase from $11,161,606 in
fiscal year 1994 to $12,073,913 in fiscal year 1995. This represents an 8.2%
increase from fiscal year 1994 to 1995. The additional employees hired
during fiscal year 1995 were primarily in the Financial Programs department.
The remaining significant increase in general and administrative expenses
from fiscal year 1994 to 1995 resulted from a major PC software project
titled "WinUSPA." This project will redesign the field automation system
currently used by the Company's agents. The WinUSPA project is currently in
the implementation stage.

The total of other income for the year ended September 30, 1996
increased $481,685 to $3,719,793. The total of other income for the year
ended September 30, 1995 increased $737,225 from the prior year. These
fluctuations of other income are mainly due to the timing of mutual fund
distributions.

Income before income taxes has remained fairly constant as a percentage
of commission revenues for the past few years. For the years ended September
30, 1996, 1995 and 1994, income before income taxes has been 9.7%, 9.3% and
10.5% of total commission revenues.

Liquidity and Financial Resources

As of the Six Months Ended March 31, 1997

The Company has historically operated with a working capital deficiency.

The Company has been able to do this because of its loans from insurance
companies. As long as the Company does business with these insurance
companies in the current manner (there are no current intentions to change)
the loan balance will continue to replenish itself from new first year
insurance commission loans. The Company had a ratio of current assets to
current liabilities of .72 to 1 and .86 to 1 at March 31, 1997, and September
30, 1996, respectively. The decline in the current ratio is the result of
paying dividends of $7,498,703 on December 2, 1996, to the shareholders of
record as of September 30, 1996, and the paying of normal year-end incentive
bonuses of $5,597,907 to the Company's sales agents. The current ratio is
expected to improve due to income from operations during the fiscal year.

Cash and cash equivalents, consisting primarily of money market funds,
are used to finance the Company's current operations and are held as a
reserve for the payment of current liabilities. Marketable securities have
been accumulated in anticipation of future capital expenditures and as an
additional reserve against contingencies. As of March 31, 1997, the
significant non-recurring short-term obligation requiring the immediate use
of resources is the completion of the "WinUSPA" and "Phoenix `96" software
projects for approximately $1.7 million.

The Company is planning to complete a stock offering during the quarter
ended September 30, 1997. The purpose of this offering is the same as it was
in 1996, 1995 and 1993. The estimated net proceeds shall be used for the
continuing operation of the Company's business, for further development and
expansion, and for limited contingency planning. It is not anticipated that
any part of the net proceeds will be used for the purpose of retiring or
reducing any indebtedness of the Company.

As of the Fiscal Year Ended September 30, 1996

The Company has operated with a working capital deficiency during all of
the periods presented in the accompanying selected financial data. The
Company has been able to do this because of its loans from insurance
companies. As long as the Company continues to do business in this manner
with these insurance companies (there are no current intentions to change)
the loan balance will continue to replenish itself from first year insurance
commission advances. The Company had a ratio of current assets to current
liabilities of .86 to 1 and .78 to 1 at September 30, 1996 and 1995,
respectively. The current ratios when excluding the loans from insurance
companies balances are 1.38 to 1 and 1.43 to 1, respectively.

The Company had a net increase of $2,675,735 in cash and cash
equivalents from the prior year. As reflected in the statement of cash
flows, net cash provided by operating activities continued to remain strong.
During the year ended September 30, 1996, a significant amount of cash flows
were utilized in investing activities. The two most significant investment
cash flow uses in 1996 were the purchase of $4,087,976 of mutual fund shares
and $523,287 of property and equipment.

The Company has land which is intended to be used as a future site for
the construction of a building. The Company is planning to accumulate
$3,800,000 annually through 1998, for a total accumulation of $19,000,000 for
the construction of this additional office facility for the Home Office. The
remaining retained earnings of the Company have been accumulated in
anticipation of other future capital expenditures and as an additional
reserve against contingencies.

These retained earnings have for the most part been invested in equity
and money market mutual funds. The equity funds have been classified as
noncurrent assets since there are no intentions to liquidate these
investments during the next year.

From its inception, the Company has exercised its option of purchasing
the Company stock owned by agents and employees when their active association
with the Companies ended. During the years ended September 30, 1996 and 1995
the Company redeemed 129,963 shares and 39,325 shares, respectively. The
Company plans to continue to exercise this option so as to limit stock
ownership to those actively involved in the business.

During the year ended September 30, 1996 and 1995, 104,700 and 147,742
shares of Class B, non-voting common stock were issued from Treasury Stock at
$26.56 and $23.44 per share, respectively. These stock offerings were
accomplished using registration statement Form S-1. The primary purpose of
these offerings was to provide the Company's agents with an opportunity to
purchase shares of the Company. The net proceeds will be used for the
continuing operation of the Company's business, for further development and
expansion, and for limited contingency planning. It is not anticipated that
any part of the net proceeds will be used for the purpose of retiring or
reducing any indebtedness of the Company.

Return on total equity was 19% and 21% for 1996 and 1995, respectively.
Management has goals of maintaining a return of 15% to 25% in the future.

Presently, the Company has no debt outstanding under its $1,000,000
revolving line of credit. The Company feels that, between its current cash
position and the working capital generated by operations, it can adequately
meet normal financing requirements and any future expansion goals.

BUSINESS OF THE COMPANY

General Statement of Company's Purpose

The primary business purpose of Independent Research Agency for Life
Insurance, Inc. ("the Company") and its insurance agency subsidiaries is the
sale of life insurance and, through its subsidiary, United Services Planning
Association, Inc., the sale of mutual funds to active duty and former
commissioned, warrant and noncommissioned officers of the United States
Military services and their families. Additionally, the Company has just
established First Command Bank, a federal savings bank, to extend consumer
banking products and services to the Company's clients. The Company's Board
of Directors considers profit necessary but secondary to expanded service to
its clientele.

History of the Company

The Company began operations in January 1964, as a sole proprietorship
owned by Carroll H. Payne, doing business as the "Carroll H. Payne Agency."
On January 1, 1971, the name was changed to "Independent Research Agency for
Life Insurance." On January 1, 1977, the Company was organized as a
partnership (IRA Partnership) under the general partnership laws of the state
of Texas. On March 9, 1981, the IRA Partnership exchanged all of its assets
relating to the operation of its life insurance business (substantially all
of its assets) to Independent Research Agency for Life Insurance, Inc., a
corporation formed by the partners of IRA Partnership under the laws of the
state of Texas on December 9, 1980. Thereafter, IRA Partnership continued in
existence under another name, but all of its former life insurance operations
are now owned and conducted by the Company. The IRA Partnership was
dissolved in 1992.

One of the partnership assets acquired by the Company was all of the
shares of "Independent Research Agency for Life Insurance, Inc.," a Hawaii
corporation, incorporated under the laws of the state of Hawaii on September
14, 1979. It is a wholly-owned subsidiary of the Company and is a life
insurance general agency in the state of Hawaii.

On March 9, 1981, the Company acquired all of the shares of United
Services Planning Association, Inc. ("USPA"), a corporation incorporated
under the laws of the state of Texas on November 24, 1958, and USPA is a
wholly-owned subsidiary of the Company.

On April 28, 1982, the Company formed a wholly-owned subsidiary,
"Independent Research Agency for Life Insurance, Inc.," a Wyoming
corporation. On February 14, 1983, the Company formed a wholly-owned
subsidiary, "Independent Research Agency for Life Insurance, Inc.," a Montana
corporation. On September 2, 1983, the Company formed a wholly-owned
subsidiary, "Independent Research Agency (New York), Inc.," a New York
corporation. On January 15, 1988, the Company formed a wholly-owned
subsidiary, "Independent Research Agency for Life Insurance, Inc.," a Nevada
corporation. On June 28, 1994, the Company formed a wholly-owned subsidiary,
"Independent Research Agency for Life Insurance, Inc.," an Alabama
Corporation. These five subsidiaries are life insurance general agencies in
the states where formed.

On March 21, 1997, the Company formed a wholly-owned subsidiary, "First
Command Bank", a federal savings bank (the "Bank"). The Bank was approved to
accept deposits and commence operations on April 21, 1997.

In addition, the Company markets a relatively small number of variable
annuities through one insurance carrier.

Insurance Agency Operations

As an insurance agency, the Company markets insurance products offered
by several insurance carriers. These products are individual whole life and
term life insurance policies. In addition, the Company markets a relatively
small number of variable annuities through one insurance carrier. The
Company is authorized to market an insurance carrier's products by entering
into an agency agreement with the carrier. A typical agency agreement allows
the Company to solicit applications for insurance and to submit the
applications to the carrier for approval, as well as to deliver policies
issued by the carrier. The Company and its insurance agency subsidiaries
have agency agreements with ten insurance carriers. Consistent with industry
practice, all the agreements to which the Company and its subsidiaries are
parties are terminable at will or upon very short notice.

The Company's income is derived principally from commissions earned from
the sale of insurance products. Commissions are generally a percentage of
the premiums paid by clients. The Company has loan agreements with five of
the insurance carriers it represents as general agent whereby the carriers
loan an amount to the Company equal to the difference between the total
amount of first year commissions to be earned by the Company on certain
insurance policies sold by its agents and the amount of the commissions
actually earned by the Company as of any particular date. The total amount
of such loans decreased to $10,458,853 as of September 30, 1996 from
$12,319,485 as of September 30, 1995, due to a shift in sales of policies
from carriers with whom the Company does not have such loan agreements. Each
of the loan agreements provides that the outstanding balance of any loan be
repaid immediately by the Company if the policy upon which the loan was
calculated is canceled during its first year. Historically, less than five
percent (5%) of the policies sold by the Company are canceled during the
first year of the policy.

For the fiscal years ended September 30, 1996, 1995, and 1994 the
commissions earned by the Company from insurance carriers for insurance
solicited by it and the percentage thereof of total commission revenue (shown
parenthetically) were $72,975,873 (63%), $69,165,124 (64%), and $63,367,022
(63%), respectively. (Total commission revenue represents gross revenue
before deduction of commissions to registered representatives/agents and
other expenses of operation.)

The Company's business is dependent upon its market of active duty and
former members of the United States military services and their families.
The Company's sales force has never sold competitively in the open civilian
market, and the Company has no plans to attempt to sell to such market. In
management's view, the Company is not reliant upon its relationship with any
one insurance carrier, as it can substitute carriers if needed under similar
terms.

Investment Sales Operations

The Company's subsidiary USPA is a broker-dealer of several different
mutual funds pursuant to written agreements with the investment companies.
USPA has the non-exclusive right to sell shares of the mutual funds through
its agents and receives commissions from such sales. These sales are
principally of mutual funds which have the stated objective of long-term
capital growth, primarily through systematic investment plans or open account
brokerage arrangements depending on suitability considerations.

USPA is not obligated to meet any stated sales volume for any particular
mutual fund. USPA does not bear any part of the cost of printing
prospectuses used in connection with any mutual fund offering nor does it
bear the costs of supplemental sales literature, promotion or advertising.
The agreements between USPA and the investment companies are continuous and
provide for termination without penalty by either party on written notice.
For the fiscal years ended September 30, 1996, 1995 and 1994, commissions
earned on the sale of shares of mutual funds and the percentage thereof of
total commission revenue (shown parenthetically) were $43,656,196 (37%),
$39,278,686 (36%), and $37,124,611 (37%), respectively. (Total commission
revenue represents gross revenue before deduction of commissions to
registered representatives/agents and other expenses of operation.)

Banking Operations

The Company has established First Command Bank (the "Bank"), a federal
savings bank, to offer consumer banking products and services to the
Company's clients. As a federally chartered savings association, the Bank is
subject to the primary supervision of the Office of Thrift Supervision. The
Bank was formed on March 21, 1997, and was approved to accept deposits and
commence operations on April 21, 1997. The Bank is a wholly-owned subsidiary
of the Company and has been initially capitalized by the Company for $6
million which was drawn from current liquid assets of the Company. The
Company cannot predict at this time what financial results the Bank's
operations will generate.

Marketing

The Company offers life insurance products, and through USPA, mutual
fund products in the states in which it and its subsidiaries are authorized
to do business, through independent licensed agents who are paid on a
commission basis. The selling efforts of the Company are concentrated on
U.S. career military personnel and sales to existing clients formerly on
active duty. Management believes that the products offered (and, in the case
of life insurance products, the benefits and premium rates related thereto)
are generally competitive with those of other such products available for
sale in its market. The Company believes that its most valuable asset is its
trained and established force of field representatives. The Company's
average number of field agents during fiscal 1996 was 603. As of March 31,
1997 the Company had 606 field agents appointed.

During fiscal year 1996, the Company's sales efforts resulted in over
47,274 life insurance policies being filed with coverage exceeding $3.7
billion. Total insurance in force at September 30, 1996 exceeded $28.0
billion. In addition, during fiscal year 1996, nearly 62,318 mutual fund
applications were processed. These applications have a face value of $1.06
billion. The Company's clients had more than $8.71 billion invested in
mutual funds.

Regulation and Competition

The insurance, securities and banking industries are heavily regulated
as to trade practices. State insurance laws and regulations are particularly
restrictive as to the advertising and solicitation of insurance. Agents of
the Company are duly examined and licensed and must be continually aware of
such regulations and comply fully at all times. Neither the Company nor its
predecessors have ever been required to cease doing business in any locale as
the result of a violation of such laws and regulations. USPA is subject to
both federal and state regulation as a broker-dealer of securities.
Securities laws are most stringent as to the advertising of, solicitation of,
accounting for, and general representation of securities sold.
Representatives of USPA must be registered representatives of the National
Association of Securities Dealers, Inc. ("NASD"), and licensed with the
Securities Department in the state in which they represent USPA. Neither
USPA nor any of its representatives has ever been fined, suspended, or
required to cease doing business in any locale as the result of a violation
of NASD or state laws, rules, or regulations. The Company's federal savings
bank operations, which were established to provide consumer banking products
and services to the Company's clients, are subject to the primary supervision
of the Office of Thrift Supervision.

Competition is keen in the life insurance, securities and consumer
banking businesses. A number of life insurance companies are engaged in
sales to military personnel, offering a variety of policies. These
competitors are also able, through affiliations with securities
organizations, to offer investments to military personnel in competition with
USPA. Additionally, military personnel are offered a number of other
specialized savings and investment opportunities, by other organizations such
as commercial banks and credit unions. The Company's sales force has never
sold competitively in the open civilian market.

Taxation of the Company

The Company will be taxed under the usual practices of taxation
applicable to corporations.

Personnel

The Company utilizes the services of personnel employed by USPA, for
which it reimburses USPA. USPA employs approximately three (300) people
full-time at present, whose functions are administrative and sales
supportive. All sales by the Company and by USPA are made by independent
contractor field agents, of which there are approximately six hundred six
(606) at present.

Properties

The Company owns, unencumbered, the building at 4100 South Hulen Street,
Fort Worth, Texas, in which its home office operation is conducted. A
portion (approximately 14%) of this 128,000 square foot building is being
leased to third parties. The Company also owns, unencumbered, approximately
8.77 acres of unimproved land immediately adjacent to such building. This
land is being held for future growth of the Company. The Company owns one
residential property in Fort Worth, Tarrant County, Texas, which is currently
rented on a month-to-month basis to the Company's Director of Training.
Monthly rent is currently paid to the Company for that portion of such
residence personally used by this employee. The rent paid is $1,000 per
month. The management of the Company considers the above monthly rent to be
fair and reasonable in the view of the amount of personal living space rented
in the residence by this individual. This residential property has
traditionally been used for lodging of agents, and entertainment of
prospective agents and current agents. Some of these business guests remain
for conferences and seminars conducted by the Company for periods from one to
fourteen days. The Company owns eight motor vehicles and substantial office
equipment, including printing and computer equipment.

Legal Proceedings

Neither the Company nor any of its subsidiaries are involved in any
legal proceedings, nor are any such proceedings pending.

MANAGEMENT

A. Identification - The following is a list in tabular form of all
Company Directors and Executive Officers as of January 1, 1997, providing
their names, ages and positions held as well as the period of time they have
served in each position. No arrangements or understandings exist between any
of these individuals and any other persons pursuant to which they have been,
or will be, selected as a Director or Executive Officer. The term of office
of all Executive Officers is one year. The term of Executive office of a
Director is, under the Classified Board system of election adopted by the
Company in 1989, three years.
<TABLE>
<S> <C> <S>
Name Age Positions-Time Served

Lamar C. Smith 49 Director (1983 - Present), Chairman of
the Board and Chief Executive Officer
(1992 - Present), President and Chief
Executive Officer (1991), President and
Chief Operating Officer (1985 - 1991),
Member of Executive Committee of
Board of Directors (1985 - Present)

James L. Lanier 57 Director (1988 - Present), President
and Chief Operating Officer (1992 -
Present), Senior Vice President and
Director of Marketing (1990 - 1991),
Member of Executive Committee of
Board of Directors (1990 - Present),
Regional Vice President (1988 - 1989)

Howard M. Crump 50 Director (1990 - Present), Regional
Vice President (1990 - 1991), Senior
Vice President and Director of
Marketing (1992 - Present), Member of
Executive Committee of the Board of
Directors (1992 - Present)

Hal N. Craig 60 Director (1993 - Present), Vice
President and Director of Management
Information Systems (1992 - 1993),
Chief Information Officer (1994 -
Present)

Donaldson D. Frizzell 64 Director (1993 - Present), Vice
President and Director of
Investments (1992 - Present)

Jerry D. Gray 48 Vice President and Director of Client
Services (1988 - 1989), Director
(1990 - Present), Regional Vice
President (1990 - 1993)

Clinton C. Hayes 45 Director (1992 - Present), Regional
Vice President (1992 - 1993)

David P. Thoreson 65 Director (1994 - Present)

G. Norman Coder 59 Director (1983 - Present),
Secretary (1980 - Present)

Carroll H. Payne II 42 Director (1983 - Present) (1)

Naomi K. Payne 39 Director (1983 - Present) (1)

William A. Dast 60 Director (1983 - Present), Senior
Vice President (1993 - 1996),
Treasurer (1980 - 1996), Member
of Executive Committee of Board of
Directors (1990 - 1996)

Martin R. Durbin 36 Treasurer and Chief Financial Officer
(1996 - Present), Assistant to the
Chairman of the Board (1995 - 1996),
Registered Representative and Agent
(1991 - 1995), Director of Commission
Accounting (1983 - 1991)
</TABLE>
(1) Carroll H. Payne and Naomi K. Payne are siblings. There are no other
family relationships between any of the Directors and Executive Officers of
the Company or its subsidiaries.

B. Business Experience - The following is a brief description of the
business experience of each Director and Executive Officer during at least
the past five years:

Lamar C. Smith - Having previously been an agent, District Agent,
Regional Vice President*, Senior Vice President and Director of Marketing,
Mr. Smith was elected President and Chief Operating Officer of the Company in
December 1985, and became President and Chief Executive Officer in December
1990, in which capacities he served until January 1992 at which time he
became Chairman of the Board and Chief Executive Officer, in which positions
he continues to serve.

James N. Lanier - Mr. Lanier became an agent of the Company in 1983, a
District Agent in 1986, an Assistant Regional Agent in 1987, and in 1988 he
was elected a Director and Regional Vice President. In January 1990 he
became Senior Vice President and Director of Marketing, in which positions he
served until January 1992 at which time be became President and Chief
Operating Officer, in which positions he continues to serve.

Howard M. Crump - Having been an agent and District Agent, Mr. Crump was
appointed Assistant Regional Agent in 1983 and became Regional Agent in
January 1990. Mr Crump was elected Director and Regional Vice President in
April 1990, in which capacities he served until January 1992 when he became
Senior Vice President and Director of Marketing, in which positions he
continues to serve.

Hal N. Craig - Having previously been an agent, and Director of
Programming, Mr. Craig became the Director of Insurance Services in 1988. In
1990 Mr. Craig became the Director of Management Information Systems and was
elected Vice President effective January 1992. He was elected a Director
effective January 1, 1993. He became Chief Information Officer in 1994.

Donaldson D. Frizzell - Having previously been an agent, Mr. Frizzell
became Director of Investments in 1984 and was elected a Vice President
effective January 1992. He continues to serve in these capacities. He was
elected a Director effective January 1, 1994.

Jerry D. Gray - Having previously been an agent and District Agent, Mr.
Gray became an Assistant Regional Agent in 1982, and was elected a Director
and Regional Vice President in 1986, in which capacities he served until
1988, at which time he was elected a Vice President and became the Director
of Client Services. Beginning in 1990, he was reelected a Director and
Regional Vice President, in which capacities he served through 1993. In
1994 he was reelected a Director.

Clinton C. Hayes - Having previously been an agent and District Agent,
Mr. Hayes became an Assistant Regional Agent in 1988 in which position he
served until October 1992 when he became a Regional Agent. Mr. Hayes was
elected a Director and Regional Vice President effective December 1992, in
which capacities he served through 1993. In 1994 he was reelected a
Director.

David P. Thoreson - Having previously been an agent and District Agent,
Mr. Thoreson became a Regional Agent in 1988 and was elected a Director in
1994, in which capacities he continues to serve.

G. Norman Coder - Mr. Coder has been the Company's Secretary since its
creation (1980). He has been on its Board of Directors since 1983.

Carroll H. Payne II - Mr. Payne was elected a Director in 1983 and
continues to serve in this capacity. An established Architect, he was
principally employed as such by Albert S. Komatsu and Associates, Fort Worth,
Texas from 1984 to 1988 and is currently self-employed.

Naomi K. Payne - Ms. Payne was also elected a Director in 1983, and
continues in that capacity. She has heretofore been engaged in working with,
and coordinating assistance for, deaf and otherwise handicapped students
through various agencies and institutions dedicated to such students.

William A. Dast - Mr. Dast has been on the Company's Board of Directors
since 1983. He was the Company's Treasurer from 1980 through 1996, and was
a Senior Vice President from 1993 through 1996.

Martin R. Durbin - Mr. Durbin was elected Treasurer of the Company in
1996, at which time he also became its Chief Financial Officer and the
Director of Financial Services. He was originally employed by USPA in 1983
and was a field agent of the Company from 1991 through June, 1995, at which
time he was again employed by USPA as Assistant to the Chairman of the Board.

_________________________

* Called "Field Vice President" in 1982.

Messrs. Smith, Lanier, Crump, and Payne also serve on the Executive
Committee of the Company's Board of Directors. Messrs. Smith, Lanier and
Crump also serve on the Boards of Directors of various subsidiaries of the
Company, particularly of United Services Planning Association, Inc. ("USPA"),
the Company's major subsidiary. All of the Company's Executive Officers
serve in the same capacities for USPA.

C. Involvement In Certain Legal Proceedings - None of the Directors or
Executive Officers of the Company have been during the past five years, nor
are currently, involved in any regulatory, or civil or criminal court
proceedings of any kind.

EXECUTIVE COMPENSATION

A. Cash Compensation

The following Summary Compensation Table sets forth the cash
compensation and certain other components of the compensation of
the Chief Executive Officer and the other four most highly
compensated executive officers of the Company in fiscal year 1996.
<TABLE>
<S> <C> <C> <C> <S> <C>
Summary Compensation Table

Name and Fiscal Annual Compensation All Other
Principal Year Salary Bonus Other Compensation
Position (1)

Lamar C. Smith 1996 $398,666 $170,000 ----- $22,500
Chairman of the 1995 386,399 160,000 ----- 30,000
Board and Chief 1994 358,334 150,000 ----- 30,000
Executive Officer

James N. Lanier 1996 306,242 133,000 ----- 22,500
President and 1995 297,114 121,000 ----- 30,000
Chief Operating 1994 273,105 115,000 ----- 30,000
Officer

Howard M. Crump 1996 266,583 104,000 ----- 22,500
Senior Vice 1995 257,339 95,000 ----- 30,000
President and 1994 236,341 87,000 ----- 30,000
Director of
Marketing

William A. Dast 1996 173,112 93,000 ----- 22,500
Senior Vice 1995 167,760 85,000 ----- 30,000
President and 1994 151,786 80,000 ----- 30,000
Treasurer

G. Norman Coder 1996 142,582 66,000 ----- 22,500
Counsel and 1995 137,430 64,000 ----- 29,829
Secretary 1994 124,320 62,000 ----- 27,312
</TABLE>

(1) Contribution paid on the employee's behalf into a profit sharing
retirement plan. See B. below.

B. Compensation Pursuant to Plans

A profit sharing retirement plan exists for employees of the
Company's subsidiary, USPA, under the terms of which up to
fifteen percent (15%) of annual compensation, or $22,500,
whichever is less, is contributed and held in trust of such
employees until termination of employment, retirement or
death/disability. During the Company's fiscal year ending
September 30, 1996, the contribution to this plan on behalf of
the highly compensated executive officers was limited to $22,500,
and $112,500 was contributed on behalf of these Executive
Officers as a group. No stock option plans exist or are
contemplated as to the Company's stock.

C. Other Compensations

No other compensation not covered by the above, such as personal
benefits, securities, or property, was paid or distributed during
the Company's fiscal year ending September 30, 1996, to the
individuals named or identified as members of the group above,
the aggregate amount of which, as to any of such individuals, was
either the lesser of $50,000 or ten percent (10%) of the cash
compensation described above.

D. Compensation of Directors

Directors who are Company employees or agents of the Company
actively engaged in sales or sales management are paid $600 for
personal attendance at full Board meetings. All other Directors
are paid a quarterly retainer of $4,000 plus a meeting fee of
$600. If these latter Directors serve at a Board committee
meeting in conjunction with a Board or other Company meeting,
they are paid $300 for such committee meeting. If they serve at
a Board committee meeting not in conjunction with any other
Company meeting, they are paid $500 for such meeting. If one of
this latter group of Directors participates in a
telephone/teleconference or video-conference Board or Board
committee meeting, they are paid $300 for such participation.
Expenses of all Directors required to travel to a meeting are
either paid or reimbursed. Additionally, Directors in the latter
group described above are reimbursed at the rate of $50 per hour
for travel time. During the Company's fiscal year ending
September 30, 1996, a total of $31,500 was paid by the Company
to its Directors. No fees are paid for serving as a Director of
a subsidiary except for two Directors of First Command Bank who
are not otherwise employed by Company or its subsidiaries. These
two individuals will be paid $1,000 plus travel expenses each
time they personally attend a full Board meeting of First Command
Bank.

PRINCIPAL SHAREHOLDERS

The following table sets forth, as of March 31, 1997, the number of
shares of Class A Voting Common Stock and Class B Nonvoting Common
Stock and the percentage of outstanding shares of each class owned of
record by each person who beneficially owns more than five percent of
a class of common stock, by each Executive Officer and Director of the
Company, and by all Executive Officers and Directors as a group.
<TABLE>
<S> <C> <C> <S> <C> <S> <C>
Name and Address of Title of Amount and Nature of Percent of
Beneficial Owner Class Beneficial Ownership Class

Freda J. Payne
6812 Riverdale Class A 3 shares 12.00
Fort Worth, TX 76132 Class B 46,977 shares 5.09

Carroll H. Payne II
5763 Glenwillow Court Class A 3 shares 12.00
Fort Worth, TX 76132 Class B 46,977 shares 5.09

Debra S. Payne
5910 N. Central Class A 3 shares 12.00
Expressway, Suite 1000 Class B 46,528 shares 5.05
Dallas, TX 75206

Naomi K. Payne
11 Marion Terrace Class A 3 shares 12.00
Brookline, MA 02146 Class B 46,977 shares 5.09

Lamar C. Smith
6245 Locke Avenue Class A 2 shares 8.00
Fort Worth, TX 76116 Class B 36,000 shares 3.90

James N. Lanier
3500 Bellaire Park Ct. Class A 2 shares 8.00
Fort Worth, TX 76109 Class B 14,000 shares 1.52

Howard M. Crump
3458 Bellwood Court Class A 2 shares 8.00
Fort Worth, TX 76109 Class B 22,000 shares 2.39

William A. Dast
2005 Kelly Rd. Class A 1 share 4.00
Aledo, TX 76008

Hal N. Craig
4429 Dunwick Lane Class A 1 share 4.00
Fort Worth, TX 76109 Class B 5,000 shares 0.54

Donaldson D. Frizzell
6920 Tumbling Trail Class A 1 share 4.00
Fort Worth, TX 76116 Class B 6,500 shares .70

Jerry D. Gray
5705 Cameron Hall Place Class A 1 share 4.00
Atlanta, GA 30328 Class B 18,500 shares 2.01

David P. Thoreson
2016 Empire Mine Circle Class A 1 share 4.00
Gold River, CA 95670 Class B 26,350 shares 2.86

Clinton C. Hayes
792 Coverdale Court Class A 1 share 4.00
Virginia Beach, VA 23452 Class B 16,750 shares 1.82

Martin R. Durbin
5910 C.R. 805 C Class B 1,125 shares 0.12
Cleburne, TX 76031

G. Norman Coder
4016 Edgehill Road Class A 1 share 4.00
Fort Worth, TX 76116 Class B 22,647 shares 2.46

All Executive Officers Class A 25 shares 100.00
and Directors as a Group Class B 356,331 shares 38.64
(15 persons)
</TABLE>

CERTAIN TRANSACTIONS

A. In May 1995, pursuant to the offering of the Company's stock under
a registration statement on Form S-1, effective February 8, 1995,
20,842 shares of the Class B Nonvoting Common Stock of the Company
were issued to individuals who were either Executive Officers and/or
Directors of the Company during the year ended September 30, 1995
for a total consideration of $488,536 ($23.44 per share). A total
of 147,742 shares of Class B Nonvoting Common Stock of the Company
were sold during the offering for the total consideration of
$3,463,072 ($23.44 per share).

B. During the year ended September 30, 1995, no shares of the Class B
Nonvoting Common Stock were repurchased by the Company from then
current Executive Officers and/or Directors under the terms of the
Stock Agreements with such persons. A total of 39,325 shares of
Class B Nonvoting Common Stock were repurchased by the Company from
all persons under the terms of the Stock Agreements with such
persons during such period for the total consideration of $916,006
(price per share averaged $23.29).

C. In September, 1996, pursuant to the offering of the Company's stock
under a registration statement on Form S-1, effective May 30, 1996,
15,500 shares of the Class B Nonvoting Common Stock of the Company
were issued to individuals who were either Executive Officers and/or
Directors of the Company during the year ended September 30, 1996
for a total consideration of $411,680 ($26.56 per share). A total
of 104,700 shares of Class B Nonvoting Common Stock of the Company
were sold during the offering for the total consideration of
$2,780,832 ($26.56 per share).

D. During the year ended September 30, 1996, no shares of the Class B
Nonvoting Common Stock were repurchased by the Company from then
current Executive Officers and/or Directors under the terms of the
Stock Agreements with such persons. A total of 129,963 shares of
Class B Nonvoting Common Stock were repurchased by the Company from
all persons under the terms of the Stock Agreements with such
persons during such period for the total consideration of $3,382,449
(price per share averaged $26.03).

DESCRIPTION OF SECURITIES

The Company is authorized to issue two classes of shares which are
designated Class A Voting Common and Class B Nonvoting Common. The total
number of shares that the Company is authorized to issue is 1,000 shares of
Class A Voting Common, with a par value of $.10 per share, and 100,000,000
shares of Class B Nonvoting Common, with a par value of $.02 per share.
Holders of Class A Voting Common shares are entitled to cast one vote for
each share held of record in all matters presented to the shareholders,
including election of the Board of Directors. The holders of Class A Voting
Common do not have cumulative voting rights; therefore, the holders of more
than 50 percent of the outstanding shares of Class A Voting Common can elect
all Directors. The Bylaws of the Company provide for the classification of
the Board of Directors into three classes, each class comprised of
approximately one-third of the members of the Board of Directors. The
members of each class of the Board of Directors serve for a term ending three
years following the year in which elected. A Director of the Company may be
removed from the Board of Directors, with or without cause, only by vote of
the holders of not less than 80 percent of the outstanding shares of Class A
Voting Common entitled to vote thereon. Holders of Class B Nonvoting Common
shares, which are being offered hereby, have no voting rights, except for
certain voting rights in the event of certain extraordinary transactions
(such as a merger of the Company) as provided by the Texas Business
Corporation Act, or as otherwise provided by law.

All holders of common shares are entitled to receive dividends as may be
declared by the Board of Directors from funds legally available therefor.
Although the Company has paid dividends on its common shares in the years
1987, 1988, 1989, 1990, 1991, 1992, 1993, 1994, 1995 and 1996, no assurance
can be given that any dividends will be declared and paid in the future.
Future dividend policies shall be subject to the discretion of the Board of
Directors and will depend upon a number of factors, including, among other
things, future earnings, capital requirements, and the financial condition of
the Company. Holders of common shares do not have preemptive rights to
subscribe to any additional shares issued by the Company. In the event of
liquidation, all holders of common shares are entitled to share pro rata in
any distribution of the Company's assets after payment of liabilities.

All holders of common shares are subject to Stock Agreements with the
Company. First time subscribers to shares of Class B Nonvoting Common Stock
are required to enter into a Stock Agreement which provides, among other
things, that in the event a shareholder fails to continue as a licensed
insurance agent, ceases to be a duly authorized agent of the Company, dies,
or desires to sell his/her shares, the Company will repurchase such shares
within a period of ninety (90) days. This Stock Agreement also restricts a
shareholder from owning or holding shares in excess of five percent (5%) of
the Company's outstanding shares of Common Stock.

The form of Stock Agreement which first time subscribers to shares of
Class B Nonvoting Common Stock are required to enter into is set forth in
"Appendix A" attached hereto. Under this Stock Agreement the holder agrees
that, in accordance with Texas law pertaining to incorporated insurance
agencies, the holder must be duly licensed as a Texas life insurance agent,
and, in the event the holder ceases to be so licensed, the holder and the
Company agree that the holder's shares will be repurchased by the Company.
The shares will also be repurchased by the Company (1) in the event that the
holder ceases to be a duly authorized agent of the Company, (2) in the event
of the holder's death, or (3) in the event that the holder desires to sell or
otherwise dispose of his/her shares. Upon the receipt of written notice of
any such event, the Company has ninety (90) days within which to close the
repurchase of such shares. Under the terms of the Stock Agreement, the price
at which the Company will repurchase such shares is determined by the
Company, in its sole and absolute discretion, at least annually. The Company
will determine to pay the repurchase price in cash, by delivery of the
Company's unsecured promissory note containing such terms and provisions as
Company shall determine, or by a combination of cash and such a promissory
note. Under the Stock Agreement, the holder agrees not to transfer, pledge,
assign, or otherwise in any manner encumber any such shares, except pursuant
to the terms of the Stock Agreement. (See "Description of Securities.")

The Stock Agreement also provides that in the event the shareholder is the
owner or holder of shares of Class B Nonvoting Common Stock representing more
than five percent (5%) of the Company's outstanding shares of common stock,
the Company shall have the right, on thirty (30) days written notice to
shareholder, to repurchase that number of shares of common stock of
shareholder representing the shares in excess of such five percent (5%)
limitation, taking into account all other planned redemptions of stock by the
Company at that time, under the same general terms and conditions as set
forth above. Although the Company can exercise such right of repurchase at
any time, the Company intends to effect a redemption of shares prior to the
declaration or payment of a dividend on shares of common stock of the Company
so that a dividend is not paid on shares owned or held by a shareholder which
are in excess of five percent (5%) of the Company's outstanding shares of
common stock.

While the Company may change its methodology or adjust the Stock price
based on other factors at any time in the future, the price at which the
Company has purchased Class B Nonvoting Common Stock in the past has been
determined from the per share book value* of the Stock at the end of the
Company's current fiscal year, reduced by dividends declared for payment on
the current year's earnings. The resultant net increase in per share book
value over the previous year's similarly computed Stock price is then added
incrementally, 1/12th per month for the ensuing 12 months to the current
September 30 Stock price (based upon the prior year's computation). For
example, the book value per share at the end of the fiscal year ended
September 30, 1995, less any dividends declared at the end of fiscal year
1995 resulted in a Class B Stock price at September 30, 1996, of $27.04 per
share. The increase in book value per share for the fiscal year ended
September 30, 1996, was $7.63*, all of which was paid as a dividend on
December 2, 1996. Because the Company paid out the full increase in book
value between September 30, 1995 and September 30, 1996 as a dividend, the
price which the Company will pay throughout fiscal 1996 will remain $27.04
per share. Because there is no public market for the Class B Stock of the
Company, this method of determining the price the Company will pay for the
Stock may be deemed to be arbitrary. (See "Determination of Offering
Price.")

There are no plans under consideration by the Company for any business
combination (as defined below). Under Article Ten of the Company's Articles
of Incorporation, any business combination with an interested shareholder (as
defined below) shall require the affirmative vote of the holders of at least
95 percent of the then outstanding shares of the capital stock of the
Company, voting together as a single class, unless (a) the Board of Directors
of the Company, by an 80 percent vote, (1) expressly approves in advance the
acquisition of shares that caused the interested shareholder to become an
interested shareholder, or (2) expressly approves the business combination,
or (b) the interested shareholder pays to the holders of the capital stock of
the Company

*The calculation of per share book value does not include the effect
of reporting the Company's investments at market value as a result of the
application by the Company of Financial Accounting Standards Board (FASB)
Statement #115 not less than the fair price (as defined below) paid by such
person in acquiring any of its holdings of the Company's capital stock.
Under Article Ten of the Company's Articles of Incorporation, the following
terms are defined as follows:

(a) a "business combination" shall mean (1) any merger or
consolidation of the Company with an interested shareholder or any other
corporation which is, or after such merger or consolidation would be, an
affiliate of an interested shareholder; (2) a sale or other disposition
to or with an interested shareholder or affiliate of an interested
shareholder of substantially all of the assets of the Company; (3) the
issuance or transfer by the Company of the securities of the Company to
an interested shareholder in a transaction having a fair market value of
$2,000,000 or more; (4) the adoption of a plan or proposal for liquidation
or dissolution of the Company proposed by or on behalf of an interested
shareholder or an affiliate of an interested shareholder; and (5) any
reclassification of securities or recapitalization of the Company or any
other transaction which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any class
of equity of the Company which is directly or indirectly owned by an
interested shareholder or an affiliate of an interested shareholder;

(b) an "interested shareholder" shall mean any person who is a
beneficial owner, directly or indirectly, of more than 10 percent of the
shares of any class of the outstanding capital Stock of the Company, or
is an assignee of or has otherwise succeeded to any shares of any class
of the capital Stock of the Company which were at any time within the two
year period immediately preceding the date in question beneficially owned
by an interested shareholder; and

(c) a "fair price" shall mean the amount determined by the majority
of the Board of Directors to be the highest per share equivalent price
that can be determined to have been paid at any time by the interested
shareholder for any share or shares of any class or series of the capital
stock of the Company, plus interest from the date the interested
shareholder became an interested shareholder through the date of the
business combination at the rate of 7 percent per annum, less the
aggregate amount of any dividends paid during such time period.

The above description of the Company's common shares is a summary only,
and is qualified in its entirety by reference to the Company's Articles of
Incorporation and Bylaws and the Stock Agreement.

PLAN OF DISTRIBUTION

All shares offered will be sold through the Registrant (the Company).
This offer is not underwritten, and no commission will be paid to any party
in connection with such sales. No shares are to be offered or sold in any
state until there is compliance with the securities laws for such state.

1. Offerees.

The shares sold pursuant to this offering will be offered only to agents
of the Company by an officer of the Company who will receive no commission or
other remuneration for such service. Each offeree will be provided with a
copy of this Prospectus. Shares can be owned only by insurance agents
licensed by the state of Texas.

2. Terms of Sales.

Subscription for shares offered will be by execution of a Subscription
Agreement. (See "Appendix B - Subscription Agreement.") If a minimum of
$1,000,000 of shares are not sold by June 30, 1997 (unless extended by the
Company for up to an additional thirty (30) days) on which date this offering
will terminate, then no shares shall be issued and any funds received to
purchase shares shall be refunded. All sales will be made for cash, payable
not later than August 31, 1997 (unless extended by the Company for up to an
additional thirty (30) days). In the event that more shares are subscribed
for than are offered hereunder, subscriptions will be prioritized according
to the date received and by consideration of the past contribution and future
potential of the subscriber to the Company's objectives, as determined by the
Executive Committee of the Board of Directors of the Company. The Executive
Committee will give consideration to any recommendations which it may
receive, with respect to these criteria, from District and Regional Agents
(through Regional Agents) of the Company, but the Committee's decision shall
be final. Also, the Board of Directors of the Company has resolved that its
intent is that no individual shareholder shall be issued or shall hold shares
of the Company's Stock in such a quantity as to result in such shareholder
owning more than five percent of the Company's outstanding Stock, and this
intent shall apply to this offering. Assuming the minimum amount of shares
are sold, immediately after termination of the offering, on June 30, 1997
(unless extended by the Company for up to an additional thirty (30) days),
the Company shall notify each subscriber as to the number of shares available
to such subscriber (either verify the mount subscribed for or advising of any
proposed adjustment to such subscription). Cash payment for all such
subscriptions must be received not later than August 31, 1997 (unless
extended by the Company for up to an additional thirty (30) days). Payment
for shares after that date will not be accepted and the subscription for such
shares shall be rejected.

Each first time purchaser of Class B Nonvoting Common Stock of the
Company, offered hereby, will execute a Stock Agreement, as set forth in
"Appendix A" hereto. This Stock Agreement provides for repurchase of Stock
by the Company under certain circumstances. (See "Description of
Securities.") The Company will establish a repurchase price for any Stock
falling within the terms of the Stock Agreement. (See "Appendix A - Stock
Agreement.")

3. Termination of Offering.

In no event shall any shares be sold pursuant to this Registration after
midnight, June 30, 1997 (unless extended by the Company for up to an
additional thirty (30) days), on which date this offering shall terminate,
without regard to whether all of the shares offered herein have been
subscribed. Funds received for the purchase of shares shall be placed in an
escrow account with Central Bank & Trust, Fort Worth, Texas, and shall be
refunded if the minimum of $1,000,000 of shares are not sold.

LEGAL MATTERS

The validity of the shares being offered hereby has been passed upon for
the Company by the law firm of Law, Snakard & Gambill, P.C., Fort Worth,
Texas.

EXPERTS

The financial statements included in this Prospectus and in the
Registration Statement have been included in reliance on the report of
Brantley, Frazier, Rogers & Co., P.C., Fort Worth, Texas, independent
accountants, given on the authority of such firm as experts in auditing and
accounting.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Financial Statements

The accompanying consolidated financial statements of Independent Research
Agency for Life Insurance, Inc. and Subsidiaries which consist of unaudited
financial statements as of March 31, 1997, and for the six months ended March
31, 1997 and 1996, and audited financial statements as of September 30, 1996
and 1995 and for the fiscal years ended September 30, 1996, 1995 and 1994 are
presented in accordance with Regulation S-X and in conformity with generally
accepted accounting principles, as required. The Company is subject to the
reporting requirements of Section 13(a) of the Securities Exchange Act of
1934 as a result of filing a registration statement pursuant to Section 12(g)
of the Securities Exchange Act of 1934 (which became effective on January 24,
1997) with respect to the Company's Class B Non-Voting Common Stock, which
was held of record by greater than 500 shareholders at the Company's fiscal
year end on September 30, 1996 (although such class of Common Stock is
presently held of record by only 480 shareholders), and in accordance
therewith files periodic and current reports and other information with the
Securities and Exchange Commission (the "Commission"). Prior to the
effectiveness of such registration statement, the Company was subject to the
informational reporting requirements of Section 15(d) of the Exchange Act.
Copies of such reports and other information can be obtained by mail from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such reports and other
information can also be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at
500 West Madison Street (Suite 1400), Chicago, Illinois 60661 and at 75 Park
Place, 14th Floor, New York, New York 10007.

The selected quarterly financial data required by Item 302(a) of
Regulation S-K is omitted because the Registrant does not meet both of the
specified tests.

Unaudited Interim Financial Statements and Notes to Interim Financial
Statements Page

Condensed Consolidated Balance Sheet - March 31, 1997 . . . . . . . . . .F-3

Condensed Consolidated Statements of Income - Six month and
three month periods ended March 31, 1997 and 1996 . . . . . . . . . . .F-5

Condensed Consolidated Statements of Cash Flows - Six month
periods ended March 31, 1997 and 1996. . . . . . . . . . . . . . . . . F-6

Notes to Condensed Consolidated Financial Statements . . . . . . . . . . F-7

F-1

Audited Financial Statements and Notes to Financial Statements
Page

Report of Independent Certified Public Accountants . . . . . . . . . . . F-10

Consolidated Balance Sheets - September 30, 1996, 1995, and 1994 . . . . F-11

Consolidated Statements of Income - Years ended September 30, 1996,
1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .F-13

Consolidated Statements of Changes in Stockholders' Equity - Years
ended September 30, 1996, 1995 and 1994 . . . . . . . . . . . . . . . .F-14

Consolidated Statements of Cash Flows - Years ended September 30,
1996, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . .F-16

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . F-18

F-2

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET

(UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS

March 31, September 30,
1997 1996
CURRENT ASSETS (Unaudited) *
Cash and cash equivalents $ 16,069,718 $ 19,448,932
Commissions receivable 2,013,328 2,671,831
Agents' loans and advances 637,836 745,189
Other receivables 630,077 416,220
Prepaid expenses 258,065 110,139
Deferred income taxes 0 534,016
------------ ------------
Total Current Assets 19,609,024 23,926,327
------------ ------------
PROPERTY AND EQUIPMENT
Property and equipment 20,020,430 19,907,089
Less: Accumulated depreciation (7,835,411) (7,292,895)
------------ ------------
Total Property and Equipment 12,185,019 12,614,194
------------ ------------
OTHER ASSETS
Marketable securities, at market 54,075,400 52,036,944
Memberships 62,467 62,467
Notes receivable - Other 50,000 50,000
------------ ------------
Total Other Assets 54,187,867 52,149,411
------------ ------------
TOTAL ASSETS $ 85,981,910 $ 88,689,932
============ ============
</TABLE>

F-3
<TABLE>
<S> <C> <C>

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable $ 56,690 $ 423,714
Accrued commissions payable 2,938,911 2,758,258
Accrued bonuses payable 7,288,117 9,959,319
Income taxes payable 1,817,455 4,981
Accrued sales meeting expense 2,516,065 1,557,397
Other accrued liabilities 603,840 1,966,287
Notes payable 620,736 613,716
Loans from insurance companies 11,582,720 10,458,853
------------ ------------
Total Current Liabilities 27,424,534 27,742,525
------------ ------------
LONG-TERM OBLIGATIONS
Sales meeting and other 1,611 1,611
Notes payable 0 494,650
Deferred Career Commission Plan paya 16,733,797 14,571,565
Deferred income taxes 1,025,729 1,930,874
------------ ------------
Total Long-term Obligations 17,761,137 16,998,700
------------ ------------
STOCKHOLDERS' EQUITY
Common stock 55,739 55,739
Additional paid-in capital 1,194,606 2,830,260
Retained earnings 29,929,277 31,223,388
Unrealized holding gains 9,653,909 9,875,400
Treasury stock - at par (37,292) (36,080)
------------ ------------
Total Stockholders' Equity 40,796,239 43,948,707
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' $ 85,981,910 $ 88,689,932
============ ============
</TABLE>
* Condensed from audited financial statements.

The accompanying notes are an integral part of these condensed
financial statements.

F-4

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<S> <C> <C> <C> <C>
Six Months Ended Three Months Ended
March 31, March 31,

1997 1996 1997 1996

COMMISSIONS REVENUE $ 59,557,969 $ 57,412,659 $ 30,935,138 $ 29,352,433
------------ ------------ ------------ ------------
OPERATING EXPENSES
Commissions, bonuses, and agent (43,446,648) (42,373,879) (22,004,761) (21,427,834)
expenses
General and administrative expenses (12,194,789) (11,755,444) (6,044,182) (6,128,059)
------------ ------------ ------------ ------------
Total Operating Expenses (55,641,437) (54,129,323) (28,048,943) (27,555,893)
------------ ------------ ------------ ------------
INCOME FROM OPERATIONS 3,916,532 3,283,336 2,886,195 1,796,540
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSES)
Interest income 453,941 414,897 177,470 167,565
Investment income 4,707,039 3,180,633 78,431 (11,697)
Rental and other income 118,021 103,713 39,599 57,818
Gain (Loss) on disposal of equipment 0 4,247 0 4,247
Interest expense (32,949) (21,096) (9,868) (10,806)
------------ ------------ ------------ ------------
Total Other Income 5,246,052 3,682,394 285,632 207,127
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES 9,162,584 6,965,730 3,171,827 2,003,667

PROVISION FOR INCOME TAXES (2,957,992) (2,216,056) (1,338,560) (700,611)
------------ ------------ ------------ ------------
NET INCOME $ 6,204,592 4,749,674 1,833,267 1,303,056
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 946,096 967,224 926,338 948,633
============ ============ ============ ============
NET INCOME PER SHARE $ 6.56 $ 4.91 $ 1.98 $ 1.37
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.

F-5

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<S> <C> <C> <C> <C>

Six Months Ended
March 31,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES

Net Income $ 6,204,592 $ 4,749,674
Adjustments for non cash items 542,516 386,170
Changes in operating assets and liabilities 548,342 22,099
------------ ------------
Net Cash Provided by Operating Activities 7,295,450 5,157,943
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments (2,549,621) (3,444,122)
Purchase of property and equipment (113,341) (305,075)
------------ ------------
Net Cash Used for Investing Activities (2,662,962) (3,749,197)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net receipts (payments) on loans from insurance
companies 1,123,867 (1,500,150)
Purchase of treasury stock (1,636,866) (1,888,108)
Dividends paid (7,498,703) (4,550,795)
------------ ------------
Net Cash Used for Financing Activities (8,011,702) (7,939,053)
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,379,214) (6,530,307)

CASH AND CASH EQUIVALENTS - Beginning of Period 19,448,932 16,773,197
------------ ------------
CASH AND CASH EQUIVALENTS - End of Period $ 16,069,718 $ 10,242,890
============ ============
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.

F-6

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.,
AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 - ORGANIZATION AND OPERATION

Independent Research Agency for Life Insurance, Inc. (IRA, Inc.) was
chartered in Texas in December 1980. The Company began operations in
March 1981 and is the continuation of a business formerly operated as
Independent Research Agency for Life Insurance, a Texas partnership.

IRA, Inc. acquired United Services Planning Association, Inc., a Texas
Corporation (USPA), and Independent Research Agency for Life Insurance,
Inc., a Hawaii Corporation (IRA Hawaii), in March 1981. IRA, Inc.
organized Independent Research Agency for Life Insurance, Inc., a Wyoming
Corporation (IRA Wyoming), in April 1982; Independent Research Agency for
Life Insurance, Inc., a Montana Corporation (IRA Montana), in February
1983; Independent Research Agency (New York), Inc., a New York Corporation
(IRA New York), in September 1983; Independent Research Agency for Life
Insurance, Inc., a Nevada Corporation (IRA Nevada), in January 1988; and
Independent Research Agency for Life Insurance, Inc., an Alabama
Corporation (IRA Alabama), in June 1994.

The subsidiaries IRA Hawaii, IRA Wyoming, IRA Montana, IRA New York, IRA
Nevada and IRA Alabama are maintained solely to permit IRA, Inc. to do
business in those states and are engaged in the sale of life insurance to
United States professional military personnel. USPA is engaged in the sale
of mutual funds to United States professional military personnel as a
broker-dealer registered with the Securities and Exchange Commission and
the National Association of Securities Dealers, Inc. The companies share
common employees, sales agents and representatives, and office facilities.
Home offices are located in Fort Worth, Texas. The companies' agents and
representatives maintain offices in approximately 149 cities located in 41
states, 1 U.S. territory and 3 foreign countries.

In November 1996, IRA, Inc. received approval from the Office of Thrift
Supervision to organize and operate a denovo Federal Savings Bank. In
March 1997, First Command Bank was formed as a wholly-owned subsidiary.
First Command began operations in April 1997.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The Condensed Consolidated Financial Statements include the accounts
of IRA, Inc. and its wholly-owned subsidiaries, USPA, IRA Hawaii, IRA
Wyoming, IRA Montana, IRA New York, IRA Nevada, IRA Alabama and First
Command Bank. All intercompany accounts and transactions have been
eliminated.
F-7

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.,
AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

BASIS OF PRESENTATION

The Condensed Consolidated Balance Sheet as of March 31, 1997, the
Condensed Consolidated Statement of Income for the three months and six
months ended March 31, 1997 and 1996, and the Condensed Consolidated
Statement of Cash Flows for the six months ended March 31, 1997 and 1996
included herein are unaudited; however, such information reflects all
adjustments (consisting solely of normal recurring adjustments) which are,
in the opinion of management, necessary for a fair statement of results
for the interim periods.

Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been omitted. It is suggested that these
condensed consolidated financial statements be read in conjunction with
the consolidated financial statements and notes thereto included in the
annual Form 10-K filed with the Securities and Exchange Commission in
December 1996, and the audited consolidated financial statements and
notes thereto included in the Company's September 30, 1996 annual
report to shareholders.

The results of operations for the three months and six months ended
March 31, 1997 are not necessarily indicative of the results to be
expected for the full year.

F-8

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.,
AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 3 - STOCKHOLDERS' EQUITY

During the six months ended March 31, 1997, stockholders' equity was
changed by the following transactions:

<TABLE>
<C> <C> <C> <C> <C> <C> <C> <C> <C>
Additional Unrealized
Common Paid-in Retained Holding Treasury
Balance - Stock Capital Earnings Gain Stock

September 30, 1996 $ 55,739 $ 2,830,260 $ 31,223,388 $ 9,875,400 $ (36,080)

Purchase of 60,535 shares
of treasury stock (1,635,654) (1,212)

Payment of dividend (7,498,703)

Net income 6,204,592

Net change in unrealized
holding gain on securities
available for sale (221,491)
Balance - ----------- ------------ ------------ ------------ ------------

March 31, 1997 $ 55,739 $ 1,194,606 $ 29,929,277 $ 9,653,909 $ (37,292)
=========== ============ ============ ============ ============
</TABLE>
F-9

November 15, 1996
(Except Note 11, as to which
the date is December 2, 1996)

Board of Directors
Independent Research Agency
for Life Insurance, Inc. and Subsidiaries
Fort Worth, Texas

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have audited the accompanying consolidated balance sheets of
Independent Research Agency for Life Insurance, Inc. and Subsidiaries as
of September 30, 1996, 1995 and 1994, and the related consolidated
statements of income, changes in stockholders' equity, and cash flows for
the years then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of
Independent Research Agency for Life Insurance, Inc. and Subsidiaries as
of September 30, 1996, 1995 and 1994, and the consolidated results of
their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.

As described in Notes 3 and 8 to the financial statements, the Company
changed its method of accounting for marketable securities and income
taxes during the year ended September 30, 1994 as required by the
provisions of Statements of Financial Accounting Standards No. 109 and No.
115.

BRANTLEY, FRAZIER, ROGERS & COMPANY, P.C.

<TABLE>
INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996, 1995 AND 1994

ASSETS

CURRENT ASSETS 1996 1995 1994

Cash - Demand deposits $ 659,899 $ 454,159 $ 1,792,100
Cash - Money market mutual
fund accounts - Note 2 18,789,033 16,319,038 14,481,829
Commissions receivable - Note 2 2,671,831 2,319,856 2,060,310
Agents' loans and advances
- Note 2 745,189 940,067 834,728
Accounts receivable - Customers
- Note 2 -0- 115,000 231,718
Accounts receivable - Other
- Note 2 79,641 643,179 78,649
Income taxes receivable - Note 8 336,579 374,799 -0-
Prepaid expenses 110,139 48,803 54,529
Deferred income taxes - Note 8 534,016 152,128 533,360

Total Current Assets 23,926,327 21,367,029 20,067,223

PROPERTY AND EQUIPMENT - At Cost - Note 2

Land 3,528,333 3,528,333 1,963,930
Office building 9,403,496 9,383,158 9,182,167
Other buildings and improvements 131,746 131,746 131,746
Office/computer equipment and
furniture 6,543,017 6,393,679 4,831,049
Automobiles 300,497 295,218 265,039

Total Property and Equipment 19,907,089 19,732,134 16,373,931

Less: Accumulated depreciation (7,292,895) (6,428,646) (5,490,561)

Net Property and Equipment 12,614,194 13,303,488 10,883,370

OTHER ASSETS

Marketable securities at market
value - Notes 2 and 3 52,036,944 44,852,015 35,047,540
Memberships 62,467 62,467 47,467
Notes receivable - Other 50,000 50,000 50,000

Total Other Assets 52,149,411 44,964,482 35,145,007

TOTAL ASSETS $88,689,932 $79,634,999 $66,095,600
</TABLE>

F-11
<TABLE>

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES 1996 1995 1994

Accounts payable $ 423,714 $ 486,402 $ 732,908
Accrued commissions payable 2,758,258 2,533,614 2,243,633
Accrued bonuses payable 9,959,319 9,210,740 8,516,428
Accrued contribution payable to
employees' Profit Sharing Plan
- Note 9 1,058,617 941,601 952,952
Income taxes payable - Note 8 4,981 626,927 1,285,017
Deferred Career Commission Plan
payable - Note 10 489,502 423,114 -0-
Accrued sales meeting expense 1,557,397 275,000 1,430,867
Other accrued liabilities 418,168 426,536 354,644
Notes payable - Note 5 613,716 -0- -0-
Loans from insurance companies
- Note 4 10,458,853 12,319,485 11,128,518

Total Current Liabilities 27,742,525 27,243,419 26,644,967

LONG-TERM OBLIGATIONS

Accrued sales meeting expense and
other 1,611 289,111 1,611
Notes payable - Note 5 494,650 -0- -0-
Deferred Career Commission Plan
payable - Note 10 14,571,565 9,796,309 5,208,298
Deferred income taxes - Note 8 1,930,874 2,291,415 2,046,925

Total Long-Term Obligations 16,998,700 12,376,835 7,256,834

STOCKHOLDERS' EQUITY

Common stock - Note 6
Class A - Voting 10 10 10
Class B - Non-Voting 55,729 55,729 55,729
Additional paid-in capital 2,830,260 3,472,253 424,761
Retained earnings - Notes 7
and 11 31,223,388 28,305,327 26,542,341
Unrealized holding gains - Note 3 9,875,400 8,217,001 5,208,702
Treasury stock - Class A Common,
at par - Note 6 (8) (8) (8)
Treasury stock - Class B Common,
at par - Note 6 (36,072) (35,567) (37,736)

Total Stockholders' Equity 43,948,707 40,014,745 32,193,799

TOTAL LIABILITIES AND STOCK-
HOLDERS' EQUITY $88,689,932 $79,634,999 $66,095,600

The accompanying notes to financial statements
are an integral part of these statements.

F-12
</TABLE>

<TABLE>

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994

COMMISSIONS REVENUE 1996 1995 1994

Insurance sales $ 72,975,873 $ 69,165,124 $ 63,367,022

Mutual fund sales 43,656,196 39,278,686 37,124,611

Total Commissions Revenue 116,632,069 108,443,810 100,491,633

OPERATING EXPENSES

Commissions and agent expenses
- Note 10 (86,309,517) (80,507,964) (73,902,369)
General and administrative
expenses - Note 9 (22,730,849) (22,002,350) (19,519,267)

Total Operating Expenses (109,040,366) (102,510,314) (93,421,636)

INCOME FROM OPERATIONS 7,591,703 5,933,496 7,069,997

OTHER INCOME (EXPENSES)

Interest income 846,607 777,897 417,149
Investment income - Including net
gains on sales of investments
- Note 3 3,216,870 3,616,571 3,272,036
Net rental and other expense (268,148) (116,795) (155,222)
Interest expense (66,100) (23,925) (23,033)
Loss on sales of property and
equipment (9,436) (52,270) (46,677)

Total Other Income 3,719,793 4,201,478 3,464,253

INCOME BEFORE INCOME TAXES 1,311,496 10,134,974 10,534,250

PROVISION FOR INCOME TAXES
- Note 8 (3,842,639) (3,417,024) (3,561,062)

NET INCOME $ 7,468,857 $ 6,717,950 $ 6,973,188

EARNINGS PER SHARE - Note 2 $ 7.97 $ 7.18 $ 7.51

The accompanying notes to financial statements
are an integral part of these statements.

F-13
</TABLE>

<TABLE>
INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
<S> <C> <C> <C>
Common Stock Additional
Class Class Paid-In
A B Capital

BALANCE - September 30, 1993 $ 10 $ 55,729 $ 2,329,704

Cumulative effect of change in
accounting principle for
marketable securities - Note 3
Purchase of treasury stock - Note 6 (1,904,943)
Payment of dividend - Note 7
Net income
Net change in unrealized holding
gains (losses) on securities
available for sale - Note 3

BALANCE - September 30, 1994 $ 10 $ 55,729 $ 424,761

Purchase of treasury stock
- Note 6 (350,489)
Payment of dividend - Note 7
Proceeds from stock issuance
- Note 6 3,397,981
Net income
Net change in unrealized holding
gains on securities available
for sale - Note 3

BALANCE - September 30, 1995 $ 10 $ 55,729 $ 3,472,253

Purchase of treasury stock
- Note 6 (3,379,850)
Payment of dividend - Note 7
Proceeds from stock issuance
- Note 6 2,737,857
Net income
Net change in unrealized holding
gains on securities available
for sale - Note 3

BALANCE - September 30, 1996 $ 10 $ 55,729 $ 2,830,260
</TABLE>

F-14

Unrealized Treasury Stock Total
Retained Holding Class Class Stockholders'
Earnings Gains A B Equity

$26,772,200 $ -0- $ (8) $(36,021) $29,121,614

5,496,372 5,496,372
(1,715) (1,906,658)
(7,203,047) (7,203,047)
6,973,188 6,973,188

(287,670) (287,670)

26,542,341 5,208,702 (8) (37,736) 32,193,799

(564,731) (786) (916,006)
(4,390,233) (4,390,233)

2,955 3,400,936
6,717,950 6,717,950

3,008,299 3,008,299

28,305,327 8,217,001 (8) (35,567) 40,014,745

(2,599) (3,382,449)
(4,550,796) (4,550,796)

2,094 2,739,951
7,468,857 7,468,857

1,658,399 1,658,399

$31,223,388 $9,875,400 $ (8) $(36,072) $43,948,707

The accompanying notes to financial statements
are an integral part of these statements.

</TABLE>

F-15

<TABLE>
INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<S> <C> <C> <C>

CASH FLOWS FROM OPERATING ACTIVITIES 1996 1995 1994
Commissions revenue received $116,277,714 $108,172,477 $100,425,548
Commissions paid to agents (78,914,869) (73,709,584) (68,841,581)
Operating expenses paid (20,070,746) (20,094,588) (17,202,074)
Sales meeting expenses paid (1,168,286) (2,309,149) (871,531)
Contribution to employees'
Profit Sharing Plan (1,034,981) (1,053,022) (1,043,649)
Interest income received 846,607 777,897 417,149
Interest expense paid (29,075) (23,925) (23,033)
Investment income received 3,216,870 3,616,571 1,891,544
Net rental and other expense
paid (268,148) (116,795) (155,372)
Net customers' custodial fund
received (paid) 175,000 (388,538) 133,255
Income taxes paid (6,253,259) (5,381,960) (2,938,037)
Income taxes refunded 230,138 3,520 7,863
Net Cash Provided by
Operating Activities 13,006,965 9,492,904 11,800,082

CASH FLOWS FROM INVESTING ACTIVITIES
Net receipts (payments) on agents'
loans and advances 194,878 (105,339) (393,037)
Proceeds from sales of
investments -0- -0- 5,694,192
Purchase of investments (4,087,976) (4,602,720) (3,276,466)
Proceeds from sales of property
and equipment 30,715 30,698 47,605
Purchase of property and
equipment (523,287) (3,586,939) (1,043,432)
Memberships purchased -0- (15,000) (2,359)

Net Cash Provided By (Used In)
Investing Activities (4,385,670) (8,279,300) 1,026,503

CASH FLOWS FROM FINANCING ACTIVITIES
Net receipts (payments) on loans
from insurance companies (1,860,632) 1,190,967 447,135
Purchase of treasury stock (2,165,801) (836,202) (1,755,426)
Dividends paid (4,550,796) (4,390,233) (7,203,047)
Payments on notes payable (108,282) (79,804) (151,232)
Proceeds from stock issuance 2,780,832 3,463,072 -0-
Stock issuance costs (40,881) (62,136) -0-

Net Cash Used In Financing
Activities (5,945,560) (714,336) (8,662,570)

NET INCREASE IN CASH AND CASH
EQUIVALENTS 2,675,735 499,268 4,164,015

CASH AND CASH EQUIVALENTS
Beginning of Year 16,773,197 16,273,929 12,109,914

CASH AND CASH EQUIVALENTS
End of Year $19,448,932 $16,773,197 $16,273,929

F-16

</TABLE>

<TABLE>

RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
<S> <C> <C> <C>

NET INCOME 1996 1995 1994
Adjustments for Items
Included in Net Income $ 7,468,857 $ 6,717,950 $ 6,973,188
Not Providing or Using Cash:
Depreciation expense 1,172,430 1,083,853 984,501
Gain on sales of investments -0- -0- (1,380,492)
Loss on sales of property and
equipment 9,436 52,270 46,677
Decrease in deferred income
taxes due to operations (2,180,983) (1,567,734) (1,173,514)
Bad debt expense 2,380 11,787 5,901

Other Adjustments to Reconcile Net
Income to Net Cash Provided by
Operating Activities:
Increase in commissions
receivable (354,355) (271,333) (66,085)
(Increase) decrease in other
various receivables 716,758 (822,611) 466,543
(Increase) decrease in
prepaid expenses (61,336) 5,726 4,041
Increase (decrease) in
accounts payable and
accrued expenses 1,400,502 (800,021) 3,782,789
Increase (decrease) in other
accrued liabilities (8,368) 71,892 (46,903)
Increase in Deferred Career
Commission Plan payable 4,841,644 5,011,125 2,203,436

NET CASH PROVIDED BY OPERATING
ACTIVITIES $13,006,965 $ 9,492,904 $11,800,082

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES

During the years ended September 30, 1996, 1995 and 1994, IRA Inc. issued
notes payable in the amounts of $1,216,648, $79,804 and $151,232,
respectively, to stockholders as consideration for the repurchase of their
stock by the Company.

The accompanying notes to financial statements
are an integral part of these statements.

</TABLE>
F-17

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996, 1995 AND 1994

NOTE 1 - ORGANIZATION AND OPERATION

IRA, Inc. acquired United Services Planning Association, Inc., a Texas
corporation (USPA), and Independent Research Agency for Life Insurance,
Inc., a Hawaii Corporation (IRA Hawaii), in March 1981. IRA, Inc.
organized Independent Research Agency for Life Insurance, Inc., a Wyoming
Corporation (IRA Wyoming), in April 1982; Independent Research Agency for
Life Insurance, Inc., a Montana Corporation (IRA Montana), in February
1983; Independent Research Agency (New York), Inc., a New York Corporation
(IRA New York), in September 1983; Independent Research Agency for Life
Insurance, Inc., a Nevada Corporation (IRA Nevada), in January 1988; and
Independent Research Agency for Life Insurance, Inc., an Alabama
Corporation (IRA Alabama), in June 1994.

The subsidiaries IRA Hawaii, IRA Wyoming, IRA Montana, IRA New York, IRA
Nevada and IRA Alabama are maintained solely to permit IRA, Inc. to do
business in those states.

IRA, Inc., IRA Hawaii, IRA Wyoming, IRA Montana, IRA New York, IRA Nevada
and IRA Alabama are engaged in the sale of life insurance to United States
professional military personnel. USPA is engaged in the sale of mutual
funds to United States professional military personnel as a broker-dealer
registered with the Securities and Exchange Commission and the National
Association of Securities Dealers, Inc. The companies share common
employees, sales agents and representatives, and office facilities. Home
offices are located in Fort Worth, Texas. The companies' agents and
representatives maintain offices in approximately 145 cities located in
41 states, 1 U.S. territory and 2 foreign countries.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of IRA, Inc. is presented
to assist in understanding IRA, Inc.'s financial statements. The
financial statements and notes are representations of IRA, Inc.'s
management who are responsible for their integrity and objectivity. These
accounting policies conform to generally accepted accounting principles
and have been consistently applied in the preparation of the financial
statements.

F-18

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996, 1995 AND 1994

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of IRA, Inc.
and its wholly-owned subsidiaries, USPA, IRA Hawaii, IRA Wyoming, IRA
Montana, IRA New York, IRA Nevada and IRA Alabama. All intercompany
accounts and transactions have been eliminated.

RECOGNITION OF COMMISSIONS REVENUE

Commissions revenue on sales of insurance policies and mutual fund
investments by the Companies' sales agents are recognized when earned from
the insurance and mutual fund companies. Commissions are paid to the
Company usually monthly, as they are earned on investments made or
premiums paid by the individual investors and policyholders to the mutual
fund and insurance companies.

ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Actual
results could differ from those estimates.

DEPRECIATION

Depreciation of property and equipment is computed using the straight-line
method over the following estimated useful lives:
Estimated Lives

Buildings and improvements 7-40 years
Other property and equipment 3-10 years

Depreciation expense amounted to $1,172,430, $1,083,853, and $984,501 for
the years ended September 30, 1996, 1995 and 1994, respectively.

F-19

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996, 1995 AND 1994

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

MARKETABLE SECURITIES

Nearly all of the investments of IRA, Inc. are in publicly traded mutual
funds. IRA, Inc. has classified these investments as available-for-sale
securities. Therefore, these securities are reported at fair value with
unrealized gains and losses excluded from earnings and reported net of
taxes as a separate component of stockholders' equity. Realized gains and
losses, determined by using the average cost method, are included in
earnings.

CASH AND CASH EQUIVALENTS

For purposes of the statement of cash flows, cash and cash equivalents
includes Cash - Demand deposits and Cash - Money market mutual fund
accounts. The funds in the money market mutual fund accounts are with
various investment companies. The invested funds earn interest at
prevailing rates while on deposit and may be withdrawn on demand by check.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject IRA, Inc. to concentrations
of credit risk consist principally of temporary cash investments,
commissions receivable and marketable securities. IRA, Inc. places its

temporary cash investments and marketable securities with financial
institutions and investment companies. IRA, Inc. limits the amount of
credit exposure to any one company or institution. Concentrations of
credit risk with respect to commissions receivable are limited due to the
number of investment and insurance companies comprising IRA, Inc.'s
customer base. As of September 30, 1996, 1995 and 1994, IRA, Inc. had no
significant concentrations of credit risk.

EARNINGS PER SHARE

Earnings per share is calculated based on the weighted average of shares
outstanding during the period. For the years ended September 30, 1996,
1995 and 1994, the weighted average of shares outstanding were 937,224,
935,048, and 928,830, respectively.

F-20
INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996, 1995 AND 1994

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

AGENT LOANS AND ADVANCES

Agent loans and advances consist of both secured and unsecured
obligations. The majority of the loans relate to the purchase of computer
equipment and are secured by future commissions receivable. The book
value of the loans are considered to approximate fair value.

INCOME TAXES

Deferred income tax assets and liabilities are computed annually for
differences between the financial statement and tax basis of assets and
liabilities that will result in taxable income or deductions in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances
are established when necessary to reduce deferred tax assets to the amount
expected to be realized. Income tax expense is the tax payable or
refundable for the period plus or minus the change during the period in
deferred tax assets and liabilities.

RECLASSIFICATIONS

The accompanying financial statements for the years ended September 30,
1995 and 1994 reflect certain reclassifications to conform with
classifications adopted for the year ended September 30, 1996. These
reclassifications have no effect on net income or retained earnings as
previously reported.

NOTE 3 - MARKETABLE SECURITIES

As of September 30, 1996, 1995 and 1994, nearly all of the investment
securities of IRA, Inc. are in publicly traded mutual funds. At September
30, 1996, 1995 and 1994, the investment securities portfolio was comprised
of securities classified as available for sale in conjunction with the
adoption of Statement of Financial Accounting Standards (SFAS) No. 115
"Accounting for Certain Investments in Debt and Equity Securities". SFAS
No. 115 does not allow retroactive restatement and, therefore, the
investment securities portfolio at September 30, 1993, was carried

F-21

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996, 1995 AND 1994

NOTE 3 - MARKETABLE SECURITIES - Continued

at the lower of aggregate cost or market. The investment securities
portfolio at September 30, 1996, 1995 and 1994, is carried at market. The
cumulative effect on October 1, 1993 of adopting this accounting
principle was to increase stockholders' equity by $5,496,372.

The determination of classifying the marketable securities as either
current or noncurrent is based upon management's intention to liquidate
specific securities within one year. The aggregate cost and market values
of IRA, Inc.'s marketable securities as of September 30, 1996, 1995 and
1994, are as follows:
<TABLE>
<C> <C> <C> <C> <C>
1996 1995 1994

Total Marketable Securities
(At Cost) $35,763,923 $31,675,947 $27,073,227

Gross unrealized gains
- noncurrent portion 16,273,021 13,188,040 8,017,293
Gross unrealized losses
- noncurrent portion -0- (11,972) (42,980)

Net unrealized gains
- noncurrent portion 16,273,021 13,176,068 7,974,313

Total Marketable Securities
(At Market) $52,036,944 $44,852,015 $35,047,540
</TABLE>
Proceeds from sales of investment securities were $5,694,192 for the year
ended September 30, 1994. The realized gains on these sales amounted to
$1,380,492. There were no sales of investment securities for the years
ended September 30, 1996 and 1995. The average cost method is used to
determine the cost of each security at the time of sale.

The excess of market over cost of $16,273,021, $13,176,068 and $7,974,313
is reflected net of taxes in a separate component of stockholders' equity
as of September 30, 1996, 1995 and 1994 as follows:

<TABLE>
<S> <C> <C> <C>
1996 1995 1994

Net unrealized holding gain $16,273,021 $13,176,068 $7,974,313
Unrealized holding gain
designated to the
Deferred Career Commission Plan (1,310,294) (726,066) (86,859)
Tax effect reflected in deferred
taxes (5,087,327) (4,233,001) (2,678,752)

Unrealized Holding Gain
- Stockholders' Equity $ 9,875,400 $ 8,217,001 $5,208,702

</TABLE>
F-22

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996, 1995 AND 1994

NOTE 3 - MARKETABLE SECURITIES - Continued

The net change in the unrealized holding gain as reflected in a separate
component of stockholders' equity as of September 30, 1996, 1995 and 1994
was calculated as follows:
<TABLE>
<S> <C> <C> <C>
1996 1995 1994

Realized gain on sales during
the year $ -0- $ -0- $(1,380,492)
Appreciation of value on
securities sold from beginning
of year to date of sale -0- -0- 37,569
Net unrealized gain for the year
on securities not sold 3,096,953 5,201,755 993,918

Net Increase (Decrease) in
Unrealized Holding Gains 3,096,953 5,201,755 (349,005)
Net Increase in Unrealized
Holding Gains on DCCP Investments (584,228) (639,207) (86,859)
Tax effect on Company designated
investments (854,326) (1,554,249) 148,194

Net Change in Unrealized Holding
Gains $1,658,399 $3,008,299 $ (287,670)
</TABLE>
NOTE 4 - LOANS FROM INSURANCE COMPANIES

Loans from insurance companies represent non-interest bearing loans from
four insurance companies which IRA, Inc. represents as general agent. The
amounts of the loans are adjusted monthly and are calculated to be equal
to the difference between the total amount of first year commissions on
certain insurance policies sold by IRA, Inc. and the amount of the first
year commissions earned by IRA, Inc. on the policies.

NOTE 5 - NOTES PAYABLE AND REVOLVING LINE OF CREDIT

As consideration for the repurchase of stock, IRA, Inc. issued notes
payable to some stockholders. As of September 30, 1996 there are notes
payable outstanding to three former stockholders. These notes payable
have interest rates ranging from 5.0% to 6.0% with maturity dates ranging
from January 2, 1997 to January 2, 1998. These notes payable are
unsecured. The principal payments on these notes payable are due as
follows:
<TABLE>
<C> <S>
Year Ended
September 30, Amount
1997 $ 613,716
1998 494,650
Total $1,108,366
</TABLE>

F-23

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996, 1995 AND 1994

NOTE 5 - NOTES PAYABLE AND REVOLVING LINE OF CREDIT - Continued

Based on borrowing rates currently available to IRA, Inc. For loans with
similar terms and maturities, the book value of notes payable as of
September 30, 1996 are considered to approximate fair value.

During the year ended September 30, 1993 IRA, Inc. established a
$1,000,000, one year revolving line of credit. The revolving line of
credit has since been renewed on an annual basis. Bank advances on the
credit line are payable on or before December 31, 1996 and carry an
interest rate at the Bank's prime rate. The credit line is unsecured.
IRA, Inc. had not made any draws on the credit line during the years ended
September 30, 1996, 1995 and 1994.

NOTE 6 - COMMON STOCK

At September 30, 1996, 1995 and 1994, the common stock of IRA, Inc. is as
follows:
<TABLE>
<S> <C> <C>
Class A Class B
Voting rights Voting Non-Voting
Par value per share $0.10 $0.02
Number of shares authorized 1,000 100,000,000

Class A Class B
At September 30, 1996
Number of shares issued 100 2,786,435
Number of previously issued shares
repurchased and held as treasury stock 75 1,803,643
Number of shares outstanding 25 982,792

At September 30, 1995
Number of shares issued 100 2,786,435
Number of previously issued shares
repurchased and held as treasury stock 75 1,778,380
Number of shares outstanding 25 1,008,055

F-24

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996, 1995 AND 1994

NOTE 6 - COMMON STOCK - Continued

At September 30, 1994
Number of shares issued 100 2,786,435
Number of previously issued shares
repurchased and held as treasury stock 75 1,886,797
Number of shares outstanding 25 899,638
</TABLE>

STOCK ISSUANCE

During the year ended September 30, 1996, IRA, Inc. issued 104,700 shares
of Class B treasury stock at $26.56 per share. This provided total
proceeds of $2,780,832 of which $40,881 was used to pay stock issuance
costs. This increased additional paid-in capital by $2,737,857 and
decreased treasury stock by $2,094. During the year ended September 30,
1995, IRA, Inc. issued 147,742 shares of Class B treasury stock at $23.44
per share. This provided total proceeds of $3,463,072 of which $62,136
was used to pay stock issuance costs. This increased additional paid-in
capital by $3,397,981 and decreased treasury stock by $2,955.

PURCHASE OF TREASURY STOCK

During the years ended September 30, 1996, 1995 and 1994, IRA, Inc.
repurchased a total of 129,963 shares, 39,325 shares, and 85,731 shares,
respectively, of its previously outstanding Class B common stock in
accordance with the terms of its stock agreements with shareholders. The
total cost of the stock repurchased was $3,382,449 for the year ended
September 30, 1996, $916,006 for the year ended September 30, 1995, and
$1,906,658 for the year ended September 30, 1994.

STOCK AGREEMENTS

All shares of IRA, Inc. are subject to agreements between the shareholders
and IRA, Inc. setting forth limitations of transferability and the rights
of IRA, Inc. to repurchase the stock. The provisions are summarized as
follows:

1. All shareholders must be at all times duly contracted agents
licensed to sell insurance in Texas.
F-25

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996, 1995 AND 1994

STOCK AGREEMENTS - Continued

2. In the event of a shareholder's death, or his desire to sell or
otherwise dispose of stock, the shareholder or the shareholder's
executor must offer such shares to IRA, Inc. IRA, Inc. will
repurchase such shares within ninety (90) days after receipt of
such notice at a price to be established at least annually by IRA,
Inc. IRA, Inc. will pay all cash for such shares, or may,
as determined by IRA, Inc. at its sole discretion, issue a note
as full or partial consideration for such repurchase.

3. Shares are restricted from encumbrance.

4. IRA, Inc. has the right, on thirty (30) days written notice to
stockholder, to repurchase that number of shares of common stock
from stockholder representing the shares in excess of five percent
of the Company's outstanding shares of common stock.

NOTE 7 - CASH DIVIDENDS

On December 1, 1995, a cash dividend of $4.50 per share ($4,550,796) was
paid by IRA, Inc. from retained earnings on its Class B common stock to
its shareholders of record as of September 30, 1995.

On December 1, 1994, a cash dividend of $4.88 per share ($4,390,233) was
paid by IRA, Inc. from retained earnings on its Class B common stock to
its shareholders of record as of September 30, 1994.

On December 1, 1993, a cash dividend of $7.31 per share ($7,203,047) was
paid by IRA, Inc. from retained earnings on its Class B common stock to
its shareholders of record as of September 30, 1993.

F-26

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996, 1995 AND 1994

NOTE 8 - INCOME TAXES

Effective October 1, 1993, the Companies adopted SFAS No. 109, Accounting
for Income Taxes, which requires an asset and liability approach to
financial accounting and reporting for income taxes. Deferred income tax
assets and liabilities are computed annually for differences between the
financial statement and tax basis of assets and liabilities that will
result in taxable income or deductions in the future based on enacted tax
laws and rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount expected to be
realized. Income tax expense is the tax payable or refundable for the
period plus or minus the change during the period in deferred tax assets
and liabilities. The provisions of SFAS No. 109 did not have a
significant impact on the Companies.

Certain items of income and expense are recognized in different years for
financial reporting and income tax purposes. Deferred income taxes are
provided in recognition of these temporary differences. The items
comprising the deferred tax balances as of September 30, 1996, 1995 and
1994 are as follows:
<TABLE>
<C> <C> <C> <C> <C>

1996 1995
Current Noncurrent Current Noncurrent
Asset Liability Asset Liability

Effect of tax accumulated
depreciation in excess
of book accumulated
depreciation $ --- $(1,352,380) $ --- $(1,240,047)
Sales meeting accrual 529,515 --- 93,500 97,750
Portion of accrued
vacation 4,501 --- 58,628 ---
Deferred Career Commission
Plan accrual --- 4,508,833 --- 3,083,883
Unrealized investment holding
gains --- (5,087,327) --- (4,233,001)

Deferred Tax Asset
(Liability) $534,016 $(1,930,874) $152,128 $(2,291,415)
======= ========= ======= =========
</TABLE>
<TABLE>

<C> <C>

1994
Current Noncurrent
Asset Liability

$ --- $(1,106,480)
486,495 ---

46,865 ---

--- 1,738,307

--- (2,678,752)

$533,360 $(2,046,925)
======= ==========
</TABLE>
F-27

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996, 1995 AND 1994

NOTE 8 - INCOME TAXES - Continued

Income tax at the federal statutory rate is reconciled to the Companies'
actual income tax expense for the years ended September 30, 1996, 1995 and
1994 as follows:
<TABLE>
<S> <C> <C> <C> <C>

1996 1995
Amount Percent Amount Percent

Tax at federal
statutory rate $3,845,909 34.0% $3,445,891 34.0%
Non-taxable income (180,936) (1.6) (131,496) (1.3)
Non-deductible expenses 75,578 0.7 83,395 0.8
Effect of marginal rates 77,192 0.7 -0- 0.0
Environmental tax 11,360 0.1 7,920 0.1
Other 13,536 0.1 11,314 0.1
Provision for Income
Taxes $3,842,639 34.0% $3,417,024 33.7%
========= ==== ========= ====
</TABLE>
<TABLE>
<C> <C>

1994
Amount Percent

$3,581,645 34.0%
(71,039) (0.7)
46,363 0.5
4,617 0.0
9,900 0.1
(10,424) (0.1)

$3,561,062 33.8%
========= ====
</TABLE>
The components of the provision for income taxes as of September 30, 1996,
1995 and 1994 are as follows:
<TABLE>
<S> <C> <C> <C>
1996 1995 1994
Current tax expense $5,439,394 $ 4,345,551 $ 4,647,717
Deferred tax benefit (1,596,755) (928,527) (1,086,655)
Provision for Income Taxes $3,842,639 $ 3,417,024 $ 3,561,062
========= ========= ==========
</TABLE>
For federal income tax purposes, IRA, Inc. and its subsidiaries have
elected to file separate income tax returns.

NOTE 9 - PROFIT SHARING PLAN

USPA has in effect a qualified, non-contributory employee Profit Sharing
Plan, which covers substantially all of the Company's employees. The
Profit Sharing Plan contribution expense for the years ended September 30,
1996, 1995 and 1994 amounted to $1,151,997, $1,041,671, and $1,038,863,
respectively, and is included on the accompanying statements of income
with general and administrative expenses.

F-28

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996, 1995 AND 1994

NOTE 10 - DEFERRED CAREER COMMISSION PLAN

During the year ended September 30, 1993, IRA, Inc. established a Deferred
Career Commission Plan for the benefit of its sales agents. This is a
nonqualified plan under which commissions accrue for its sales agents
until their business relationship with the Company terminates. The sales
agents receive no paid commissions under this Plan prior to their
termination date. Commissions which are accrued are determined annually
based upon IRA, Inc.'s business needs. These accrued commissions payable
to the sales agents do not have any superior claims to the assets of IRA,
Inc. Deferred Career Commission Plan expense was $4,704,578, $4,390,805,
and $2,116,577 for the years ended September 30, 1996, 1995 and 1994,
respectively. This expense is included in commissions and agent expenses
on the accompanying statements of income. The Deferred Career Commission
Plan payable balances for each year are as follows:
<TABLE>
<S> <C> <C> <C>
1996 1995 1994

Commissions accrued to
Agents $ 4,015,737 $ 4,000,613 $2,012,415
Investment income on DCCP
designated investments 688,841 390,192 104,162

DCCP Expense 4,704,578 4,390,805 2,116,577
Unrealized holding gains
on DCCP designated
investments - See Note 584,228 639,207 86,859
Commissions paid to Agents (447,162) (18,887) -0-

Net Increase in DCCP
Payable 4,841,644 5,011,125 2,203,436
DCCP Payable - Beginning
of Year 10,219,423 5,208,298 3,004,862

DCCP Payable - End of
Year $15,061,067 $10,219,423 $5,208,298
========== ========== =========
Classification on the Balance Sheet:

Current $ 489,502 $ 423,114 $ -0-
Noncurrent $14,571,565 $ 9,796,309 $5,208,298
</TABLE>

NOTE 11 - SUBSEQUENT EVENTS - CASH DIVIDENDS

A cash dividend of $7.63 per share ($7,498,703) is to be paid on December
2, 1996 by IRA, Inc. from retained earnings on its Class B common stock
to its shareholders of record as of September 30, 1996.

F-29

Appendix A

STOCK AGREEMENT

This Agreement, made on this _____ day of ____________________, 19___,
between INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC., a Texas
Corporation having its principal place of business in Fort Worth, Texas,
hereinafter referred to as "Company" and ________________, hereinafter
referred to as "Stockholder";

WITNESSETH:

WHEREAS, Company desires to issue to Stockholder shares of the Class B
Nonvoting Common Stock ("Stock") of the Company, and Company may have
previously issued shares of Stock to Stockholder and may hereafter issue
additional shares of Stock to Stockholder, and Company desires to grant to
Stockholder the right to sell said shares to Company under certain
circumstances and conditions; and, whereas, in partial consideration thereof,
Stockholder desires to agree to limitations on the transferability of such
Stock, and to grant, transfer and assign to Company the right to purchase
said shares of Stock under certain circumstances and conditions.

NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto do hereby agree as follows:

1. This Agreement shall apply to all Stock of the Company presently
owned or held by Stockholder, directly or beneficially, and to any Stock of
the Company acquired by or held by Stockholder, directly or beneficially, in
the future.

2. Stockholder understands and agrees that, in accordance with Texas
law pertaining to incorporated insurance agencies, Stockholder must be duly
licensed as a Texas life insurance agent (resident or non-resident as
applicable) in order to own Stock of the Company. In the event Stockholder
ceases to be so licensed, Stockholder and the Company agree that
Stockholder's Stock will be repurchased by the Company under the same terms
and conditions as hereinafter described for repurchase in the event of
Stockholder's desire to sell same, Stockholder's death or Stockholder's
ceasing to be an agent appointed by the Company.

3. In the event Stockholder desires to sell or otherwise dispose of
the Stock currently owned or held by Stockholder or issued to Stockholder
under the terms hereof, Stockholder shall in writing notify the Company of
such desire. The Company agrees to repurchase such shares within ninety (90)
days after receipt of such notice from Stockholder for the price described in
paragraph "5", below. The price paid by Company shall be such price as of
the date of closing of such repurchase. At the closing of such repurchase,
Stockholder shall deliver to Company the certificate(s) representing such
Stock duly endorsed for transfer and the Company shall pay to Stockholder the
repurchase price. The Company will determine to pay the repurchase price in
cash, by delivery of the Company's unsecured promissory note containing such
terms and provisions as Company shall determine in the exercise of its
reasonable discretion, or by a combination of cash and such promissory note.
In the event of Stockholder's death, or Stockholder's ceasing to be a duly
authorized agent of the Company pursuant to a current written agency
agreement, the Company also agrees to repurchase such Stock and the
Stockholder shall have an obligation to sell such Stock within ninety (90)
days of such event, under the same terms and conditions described immediately
above. Stockholder agrees not to transfer, pledge, assign, or otherwise in
any manner encumber any of such shares of stock except as expressly provided
herein.

4. In the event Stockholder at any time is the owner or holder,
directly or beneficially, of shares of Stock representing more than five
percent (5%) of the Company's outstanding shares of common stock, the Company
shall have the right, on thirty (30) days written notice to Stockholder, to
repurchase that number of shares of common stock of Stockholder representing
the shares in excess of such five percent (5%) limitation, taking into
account all other planned redemptions of Stock by the Company at that time,
under the same terms and conditions described in paragraph "3" above.
Stockholder hereby acknowledges and agrees that the Company can exercise such
right of repurchase at any time and that the Company intends to effect a
redemption of shares prior to the declaration or payment of a dividend on
shares of common stock of the Company so that a dividend is not paid on
shares owned or held by Stockholder which are in excess of five percent (5%)
of the Company's outstanding shares of common stock.

5. The Company shall, at least annually, advise Stockholder in
writing of the price of the common stock of the Company of the same class of
stock as held by Stockholder, as determined by the Company, in the exercise
of its sole and absolute discretion, for the purpose of establishing the
repurchase price of such Stock, and it is specifically agreed that this
price, as of the most recent date provided by the Company, shall be the
purchase price paid by the Company for Stockholder's shares upon their
repurchase from Stockholder or Stockholder's estate.

6. All stock issued to Stockholder shall be legended in accordance
with Texas law as to incorporated insurance agencies and with the following
statement:

"The shares represented by this certificate are subject to the
provisions of that certain Stock Agreement executed on
_________________, 19____, by and between Independent Research
Agency for Life Insurance, Inc. (the "Company"), and
__________________, a copy of which Agreement is on file in the
Company's office."

7. This Agreement shall be binding upon the parties hereto, and all
provisions hereof shall inure to the benefit of and shall be binding upon the
heirs, executors, legal representatives, successors and assigns of the
parties hereto.

8. This Agreement constitutes the entire agreement and supersedes
all prior agreements and understandings, oral and written, between the
parties hereto with respect to the subject matter hereof. No amendment,
modification, or waiver of any provision of this Agreement shall be valid
unless made in writing and signed by both parties hereto.

EXECUTED ON THIS ______ day of ________________, 19___.

_______________________________________
Stockholder

INDEPENDENT RESEARCH AGENCY
FOR LIFE INSURANCE, INC.

By:_____________________________________
President

ATTEST:

________________________________
Secretary

RATIFICATION

For good and valuable considerations, the receipt of which is hereby
acknowledged, the undersigned spouse of ________________________________ does
hereby join the execution of this Agreement and does hereby ratify and
acknowledge that this agreement is entirely fair, just, and equitable and to
her/his best interests and that she/he desires to bind her/his community
interest, if any, in the performance of this Agreement.

EXECUTED on this ____ day of ____________________, 19___.

_______________________________________
Spouse

ACKNOWLEDGEMENT OF COMPANY PRESIDENT

STATE OF TEXAS

COUNTY OF TARRANT

BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this day personally appeared __________________________ known to be
the person or officer whose name is subscribed to the foregoing instrument and
acknowledges to me that the same as the act of the said INDEPENDENT RESEARCH
AGENCY FOR LIFE INSURANCE, INC., a corporation, and that he executed the same
as the act of such corporation for the purposes and considerations therein
expressed, and in the capacity therein stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE this the _____ day of ___________,
19____.

___________________________________
Notary Public

ACKNOWLEDGEMENT OF STOCKHOLDER

STATE OF ____________

COUNTY OF _____________

BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this day personally appeared _______________________________, known
to be the person whose name is subscribed to the foregoing instrument and
acknowledged to me that he/she executed the same for the purposes and
consideration therein expressed.

GIVEN UNDER MY HAND AND SEAL OF OFFICE this the _____ day of ___________,
19___.

__________________________________
Notary Public

ACKNOWLEDGEMENT OF STOCKHOLDER'S SPOUSE

STATE OF ____________

COUNTY OF _____________

GIVEN UNDER MY HAND AND SEAL OF OFFICE this the _____ day of ___________,
19___.

__________________________________
Notary Public

Appendix B
SUBSCRIPTION AGREEMENT

1. Information/Instructions.

Independent Research Agency for Life Insurance, Inc. ("the Company"), is
offering 150,000 shares of its Class B Nonvoting Common Stock (the "Stock").
The subscription price is $27.04 per share. The offering period (the period
of time during which subscriptions for shares will be considered for
acceptance) ends June 30, 1997.* Payment for the shares allocated to
subscribers must be received by August 31, 1997.* You are encouraged to
subscribe for as many shares as you desire to purchase. Subscriptions will
be accepted on a priority determined solely at the discretion of the
Executive Committee of the Board of Directors of the Company, for so long as
any of the 150,000 shares offered are available, and in determining such
priority, the following criteria will be considered:

A. Date subscription is received, and

B. The past contribution and future potential of the Subscriber to the
Company's objectives, as determined by the Executive Committee of the
Board of Directors of the Company.

The Executive Committee will give due consideration to any recommendations
which it may receive, with respect to Paragraph B above, from District and
Regional Agents (through Regional Agents), but the Committee's decision shall
be final. The Company's Board of Directors has resolved that its intent is
that no individual stockholder shall be issued or shall hold shares of the
Company's Stock in such quantity as to result in such shareholder owning more
than five percent (5%) of the Company's outstanding shares of common stock,
and this intent shall apply to this offering.

Interested parties should complete the Subscription Agreement, below, for
the number of shares desired. The Executive Committee requests that
subscriptions be in increments of twenty-five (25) shares. Return the
executed Agreement to "Independent Research Agency for Life Insurance, Inc.,"
Attention: Corporate Secretary. Please do not remit payment for the shares.
Not everyone receiving a Prospectus may be allocated shares. The Executive
Committee reserves the right to accept or reject any subscription in whole or
in part. The Executive Committee will advise subscribers immediately
following the end of the offering period (June 30, 1997*) as to whether their
subscriptions have been accepted or partially accepted. At the time of this
notification, which will be in writing, accepted subscribers will be advised
as to the amount due for the shares, which amount must be paid to the Company
not later than August 31, 1997.* Payment for shares after that date will not
be accepted and the subscription for such shares shall be rejected. Payment
must be by check payable to the escrow account with Central Bank & Trust,
Fort Worth, Texas. No commission deductions are authorized in payment for
Company shares.

Every first time subscriber whose subscription is accepted in whole or in
part will be provided with a Stock Agreement for execution (See "Appendix A -
Stock Agreement."). New shareholders will also be provided with information
pertaining to licensing as a Texas agent (resident or nonresident as
applicable). Shares must be issued to the individual purchaser and cannot be
issued to a corporation, partnership, IRA or H.R.-10 plan custodian, trustee,
or in joint tenancy.

2. Subscription.

The undersigned Subscriber subscribes for the below indicated number of
shares of Class B Nonvoting Common Stock, $0.02 per share par value, of
Independent Research Agency for Life Insurance, Inc., a Texas corporation.
Subscriber understands that the total number of shares subscribed for should
be in increments of twenty-five (25) shares (i.e., 25, 50, 75, 100, etc.)

________________________ X $27.04 = $ _______________
(Number of Shares - (Subscription Price) (Purchase Price)
In increments of 25)

Subscriber agrees that this subscription is subject to acceptance or
modification by the Company through the Executive Committee of its Board of
Directors, and that all, a portion, or none of this subscription may be
accepted. Subscriber further agrees that if written notification is received
that any portion of the subscription has been accepted by the Company,
subscriber will immediately remit payment, by check, for the number of shares
for which the subscription has been accepted. Subscriber specifically
understands that such payment must be received not later than June 30, 1997*,
or the subscription shall be considered by the Company as rejected.

Subscriber Signature

Subscriber Name Printed

Subscriber Home Address

Date

Send this executed form to:

Independent Research Agency for Life Insurance, Inc.
P.O. Box 2387
Fort Worth, Texas 76113

Attention: G. Norman Coder,
Corporate Secretary

* Unless extended by the Company for up to an additional thirty (30) days.

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

Item Amount

SEC Registration Fee $ 1,230.00
Accounting Fees and Expenses (Estimated) 2,500.00
Legal Fees and Expenses (Estimated) 50,000.00
Printing Costs 2,000.00
Blue Sky Fees (Estimated) 10,000.00
Mailing Costs 1,000.00
Transfer Agents Fees and Expense ---
(Not applicable)
Other (Estimated) 8,270.00
---------
Total $ 75,000.00
=========
Item 14. Indemnification of Directors and Officers.

Article 2.02A(16) of the Texas Business Corporation Act ("TBCA") empowers
a corporation to indemnify directors, officers, employees, and agents of the
corporation, and to purchase and maintain liability insurance for those
persons as, and to the extent, permitted by Article 2.02-1 of the TBCA.
Under Article 2.02-1 and the Company's Bylaws, which provide for
indemnification to the full extent permitted by Article 2.02-1,
indemnification is provided for any present or former director, advisory
director, or officer of the Company who was, is, or is threatened to be made
a named defendant, respondent, or witness in any threatened, pending or
completed action, suit or proceeding, by reason, in whole or in part, of such
person serving or having served in such capacity.

Under Article 2.02-1 and the Company's Bylaws such a director or officer
shall be indemnified against any judgments, penalties (including excise and
similar taxes), fines, settlements, and reasonable expenses actually incurred
by such person in connection with any such proceeding if it is determined, as
set forth below, that such person (1) conducted himself in good faith,
(2) reasonably believed, in the case of conduct in his official capacity,
that his conduct was in the Company's best interests, and (3) in the case of
any criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. However, if such person is found liable to the Company or is found
liable on the basis that personal benefit was improperly received by him, the
indemnification (1) shall be limited to reasonable expenses actually incurred
by such person in connection with the proceeding, and (2) shall not be made
in respect of any proceeding in which such person shall have been found
liable for willful or intentional misconduct in the performance of his duty
to the Company.

Under Article 2.02-1 and the Company's Bylaws, the determination with
respect to indemnification of such director or officer must be made (1) by a
majority vote of a quorum consisting of directors who at the time of the vote
are not named defendants or respondents in the proceeding, (2) if such a
quorum cannot be obtained, by a majority vote of a committee of the Board of
Directors, designated to act in the matter by a majority vote of all
directors, consisting solely of two or more directors who at the time of the
vote are not named defendants or respondents in the proceeding, (3) by
special legal counsel selected by the Board of Directors or committee of the
Board by vote as set forth in (1) or (2) of this sentence, or, if such a
quorum cannot be obtained and such a committee cannot be established, by a
majority vote of all directors, or, (4) by the shareholders by a vote that
excludes the votes held by the directors who are named defendants or
respondents in the proceeding.

Under Article 2.02-1 and the Company's Bylaws, the Company may purchase
and maintain insurance or establish and maintain another arrangement on
behalf of any such director or officer against or in respect of any
liabilities asserted against him and incurred by him, whether or not the
Company would have the power to indemnify him against that liability under
Article 2.02-1 or the Bylaws. If the insurance or other arrangement is with
a person or entity that is not regularly engaged in the business of providing
insurance coverage, the insurance arrangement may provide for payment of a
liability with respect to which the Company would not have the power to
indemnify the person only if including coverage for the additional liability
has been approved by the shareholders of the Company.

Under the Company's Bylaws, in the event the indemnification provided by
the Company's Bylaws is more restrictive than the provision of
indemnification allowed by Article 2.02-1, then the person seeking
indemnification shall be indemnified to the full extent permitted by
Article 2.02-1 as it may exist from time to time.

Item 15. Recent Sales of Unregistered Securities.

None.

Item 16. Exhibits and Financial Statement Schedules.

(a) Exhibits:

Item Number Description

3.a. Articles of Incorporation, as amended
3.b. Bylaws, as amended
5. Opinion of Counsel Regarding Legality
10. Material Contracts
a. Stock Agreement - Payne Family
b. Stock Agreement - Class B Nonvoting Stock
c. Stock Agreement - Class A Voting Stock
21. Subsidiaries of the Registrant
23.a. Consent of Independent Certified Public
Accountants
23.b. Consent of Counsel (contained in Exhibit 5.)
24. Power of Attorney
99. Escrow Agreement

(b) Financial Statement Schedules:

All financial statement schedules required by Registration S-X are
contained in the Consolidated Financial Statements of this Report.

Item 17. Undertakings.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer of controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

INDEX TO EXHIBITS

Exhibit
Number Description of Exhibit

3.a. Articles of Incorporation, as amended, filed as Exhibit 3.a. to the
Company's Registration Statement on Form S-1 (Registration No.
333-4316) filed with the Commission on May 1, 1996 and incorporated
herein by reference.

3.b. Bylaws, as amended

5. Opinion of Counsel Regarding Legality

10.a. Stock Agreement - Payne Family, dated March 22, 1983, filed as
Exhibit 10.a. to the Company's Registration Statement on Form S-1
(Registration No. 333-4316) filed with the Commission on May 1, 1996
and incorporated herein by reference.

10.b. Form of Stock Agreement - Class B Nonvoting Stock, filed as Exhibit
10.b. to the Company's Registration Statement on Form S-1
(Registration No. 333-4316) filed with the Commission on May 1, 1996
and incorporated herein by reference.

10.c. Form of Stock Agreement - Class A Voting Stock, filed as Exhibit
10.c. to Company's Registration Statement on Form S-1 (Registration
No. 333-4316) filed with the Commission on May 1, 1996 and
incorporated herein by reference.

21. Subsidiaries of the Registrant

23.a. Consent of Independent Certified Public Accountants

23.b. Consent of Counsel (contained in Exhibit 5.)

24. Power of Attorney

99. Escrow Agreement

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Form S-1 Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of Fort
Worth, State of Texas on April 24th, 1997.

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.

By: /s/ LAMAR C. SMITH

Lamar C. Smith, Chairman of the Board and Chief
Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Form S-1
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

Signature Title Date

Lamar C. Smith Chairman of the Board and April 24, 1997
Chief Executive Officer
Principal Executive Officer)

James N. Lanier President, Chief Operating April 24, 1997
Officer and Director

Howard M. Crump Senior Vice President, Director April 24, 1997
of Marketing and Director

William A. Dast Director April 24, 1997

Martin R. Durbin Treasurer and Chief Financial April 24, 1997
Officer (Principal Finance and
Accounting Officer)

Hal N. Craig Vice President, Director of April 24, 1997
Management Information Systems
and Director

Donaldson D. Frizzell Vice President, Director of April 24, 1997
Investments and Director

Carroll H. Payne II Director April 24, 1997

G. Norman Coder Secretary and Director April 24, 1997

EXHIBIT 3.B.

As amended 12/5/96

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.

BYLAWS

ARTICLE I-OFFICES

(a) The principal office of the corporation shall be maintained in the city
of Fort Worth, Tarrant County, Texas, or its environs.

(b) The corporation may also have offices and transact business at such
other places in the state of Texas or elsewhere as the Board of Directors may
from time to time appoint or the business of the corporation may require.

ARTICLE II-SEAL

The corporation seal shall have inscribed thereon the name of the
corporation and the word "SEAL." Said seal may be used by causing it, or a
facsimile thereof to be impressed or affixed, or reproduced, or otherwise.

ARTICLE III-MEETING OF STOCKHOLDERS

(a) Place of Meetings: Stockholders' meetings shall be held at the
principal office and place of business of the corporation in Fort Worth,
Texas, or its environs, or at such other place as may be designated in the
notice of such meeting and authorized by the Board of Directors.
Stockholders "entitled to vote" as hereinafter described shall be only those
stockholders of Class A Voting stock.

(b) Annual Meetings: The annual meeting of the stockholders of this
corporation shall be held at the principal office of the corporation in Fort
Worth, Texas, on the first business day following the 5th of December of each
year unless amended by notice duly given, at which time there shall be
elected by the company stockholders of Class A Voting stock, members of the
Board of Directors as hereinafter described in Article V, section (a), of
these Bylaws, and the stockholders shall transact such other business as
shall properly come before them. If the annual meeting of the stockholders
be not held as herein prescribed, the election of directors may be held at
any meeting hereafter called pursuant to these Bylaws.

(c) Notice of Annual Meeting: A notice setting out the time and place of
such annual meeting shall be delivered personally or shall be mailed, postage
prepaid, to each stockholder of record entitled to vote, and if mailed, to
the stockholder's address as the same appears on the stock book of the
company, or if no such address appears, at the stockholder's last known place
of address, at least ten (10) days prior to the annual meeting. The company
will also publish the notice of its annual meeting in the company's sales
bulletin.

(d) Ajournment of Annual Meeting: If a quorum of stockholders entitled
to vote be not present at the annual meeting, the stockholders present in
person or by proxy may adjourn to some future time, as shall be agreed upon by
them, and notice of such adjournment shall be mailed, postage prepaid, to each
stockholder at least three (3) days before such adjourned meeting; but if a
quorum is present, they may adjourn from day to day as they see fit, and no
notice of such adjournment need be given.

(e) Special Meetings: Special meetings of the stockholders shall be held
at the same place as the annual meeting as hereinbefore provided or at such
other location as may be designated by the Chairman of the Board or the
President. Such meeting may be called at any time by the Chairman of the
Board or the President or the holders of fifty percent (50%) of the
outstanding capital stock of the company entitled to vote. The Secretary
shall mail or personally deliver a notice of such call to each stockholder of
the company entitled to vote at least ten (10) days but not more than sixty
(60) days prior to the date of the special meeting, and such notice shall
state the time and place of such meeting and the object thereof. No business
shall be transacted at the special meeting except as stated in the notice
sent to the stockholders, unless all such outstanding voting stock is
represented at the meeting, either in person or by proxy, and all such voting
stock unanimously consents in writing to transaction of other business.

(f) Quorum: A majority of the stock issued and outstanding and entitled
to vote in person or by proxy, shall constitute a quorum for the transacting
of business at any meeting of the stockholders.

(g) Number of Votes for Each Stockholder: Each stockholder shall be
entitled to one vote for each share of Class A Voting stock standing in his
own name on the books of the company, whether represented in person or by
proxy.

(h) Proxies: All proxies shall be in writing and properly signed.

(i) Order of Business: The following order of business shall be observed
at all annual and special meetings of the stockholders so far as practicable:

(1) Calling the roll;
(2) Reading, correcting and approval of
minutes of previous meetings;
(3) Report of Officers;
(4) Report of Committees;
(5) Election of Directors;
(6) Unfinished Business.

(j) Notices: All notices herein provided for may be waived by a waiver in
writing signed by a stockholder entitled to vote, and upon such waiver,
meetings of stockholders may be held at such time and place as may by the
stockholders be agreed upon.

ARTICLE IV-STOCK

(a) Certificates of Stock: Certificates of stock shall be in a form
adopted by the Board of Directors and shall be signed by the President, or
appropriate Vice President, and countersigned by the Secretary, with the seal
of the corporation affixed thereto, certifying the number of shares of the stock
of the corporation owned by the shareholders. All certificates of stock within
each class, Class A Voting and Class B Nonvoting, shall be consecutively
numbered. The name of the person owning the shares represented
thereby, with the number of such shares and the date of issue, shall be
entered on the company's books. All certificates of stock transferred by
endorsements thereof shall be surrendered for cancellation and new
certificates issued to the purchaser or assignee. All certificates issued
shall bear an imprint upon their face to the effect that there exists as a
limitation upon the transferability of the shares of stock of the
corporation. No certificates shall be issued to any party unless said party
shall agree with the corporation as to the limitations on transferability of
such stock in accordance with the requirements of the Texas Insurance Code
and the laws of such other states as may be required and as the Board of
Directors may otherwise establish.

(b) Transfer of Stock: Shares of stock shall be transferred only on the
books of the company by the holder thereof in person or by his attorney.
Stockholders desiring to sell and transfer their stock shall immediately
advise the company of their intention to do so. Any such transfer shall be
subject to the restrictions described in "(a)," above.

(c) Lost or Destroyed Certificates: Issuance of certificates in lieu of
certificates lost or destroyed may be made upon such regulations as may be
prescribed by the Board of Directors.

ARTICLE V-DIRECTORS

(a) Number, Election and Term of Office: The Board of Directors shall
consist of not less than three (3) nor more than twelve (12) directors. The
number of directors may be increased or decreased by the affirmative vote of
the holders of not less than eighty percent (80%) of the outstanding shares
of Class A Voting stock of the corporation at any annual meeting or at any
special meeting called for that purpose, provided, however, that the number
of directors shall in no event be less than three (3) nor more than twelve
(12). The Board shall be divided into three (3) classes, Class I, Class II,
and Class III. The number of directors in each class shall be the whole
number contained in the quotient arrived at by dividing the authorized number
of directors by three and if a fraction is also contained in such quotient,
then if such fraction is one-third (1/3) the extra director shall be a member
of Class III and if the fraction is two-thirds (2/3) one of the directors
shall be a member of Class III and the other shall be a member of Class II.
Each director shall serve for a term ending on the third annual meeting
following the annual meeting at which such director was elected; provided,
however, that the directors first elected to Class I shall serve for a term
ending on the annual meeting next ensuing, the directors first elected to
Class II shall serve for a term ending on the second annual meeting following
the meeting at which such directors were first elected, and the directors
first elected to Class III shall serve a full term as hereinabove provided.
The foregoing notwithstanding, each director shall serve until his successor
shall have been duly elected and qualified unless he shall die, resign,
become disqualified, disabled or shall otherwise be removed.

For purposes of the preceding paragraph, reference to the first election
of directors shall signify the first election of directors subsequent to the
approval by the directors of this amendment to the corporation's Bylaws. At
each annual election held thereafter, the directors chosen to succeed those
whose terms then expire shall be identified as being of the same class as the
directors they succeed. If for any reason the number of directors in the
various classes shall not conform with the formula set forth in the preceding
paragraph, the Board of Directors may redesignate any director into a
different class in order that the balance of directors in such classes shall
conform thereto.

(b) Removal and Vacancies of Directors: Any director of the corporation
may be removed from the Board, with or without cause, only by a vote of the
holders of not less than eighty percent (80%) of the outstanding shares of
Class A Voting stock entitled to vote thereon. Vacancies in the Board of
Directors by reason of death, resignation, an increase in the number of
directors, removal or other cause shall be filled by the vote of a majority
of the remaining directors although less than a quorum. A director so
selected by the remaining directors to fill a vacancy shall serve for the
unexpired term of and in the same class as the director whose position is
vacated, unless the person is selected to fill a vacancy created by an
increase in the number of directors, in which event the remaining directors
shall fill such vacancy consistent with the formula for classes of directors
set forth in section "(a)" above.

(c) Meetings of Directors: The annual meeting of the Board of Directors
shall be held immediately following the annual meeting of the stockholders.
Special meetings of the Board may be called by the Chairman of the Board or
President or any two (2) directors by giving seven (7) days notice to each
director.

(d) Quorum: A majority of the directors shall constitute a quorum.

(e) Notices: Notices herein provided for may be waived by a waiver in
writing signed by the directors and upon such waiver meetings of the
directors shall be held at the time and place as the directors may agree
upon.

(f) Powers of Directors: The directors shall have the general management
and control of the business and affairs of the company and shall exercise all
the powers that may be exercised or performed by the corporation, under the
statutes, the certificate of incorporation and the Bylaws.

(g) Amendment of this Article V: Notwithstanding the provisions of Article
X of the Bylaws of this corporation with respect to amendment of the Bylaws,
Article V of the Bylaws of the corporation relating to a Classified Board,
may not be amended, altered, changed or repealed in any respect unless such
action is approved by the affirmative vote of the holders of not less than
eighty percent (80%) of the outstanding shares of Class A Voting stock.

If and when the directors shall severally or collectively consent in
writing to any action to be taken by the corporation, such action shall be
valid corporate action as though it had been authorized at any annual or
special meeting of the directors.

ARTICLE VI-EXECUTIVE COMMITTEE

(a) Number, Election and Term of Office: The directors shall, at their
annual meeting, elect from among them by a majority vote of all directors, an
Executive Committee consisting of not less than three (3) or more than five
(5) directors. Said Executive Committee shall have a term of office of one
year.

(b) Vacancies: Vacancies for any reason in the Executive Committee shall
be filled by a vote of a majority of the Board of Directors.

(c) Meetings: The Executive Committee shall meet from time to time as
required for the purpose of conducting its business, upon due notice by any
member thereof to the other committee members.

(d) Quorum: A majority of the Executive Committee shall constitute a
quorum.

(e) Notices: Notices herein provided for may be waived by written waiver
signed by a committee member, and upon such waiver meetings of the Executive
Committee shall be held at the time and place as the committee may agree
upon.

(f) Powers of Executive Committee: The Executive Committee of the Board
of Directors shall, to the extent allowable by law, have the same authority
and control of the business and affairs of the company as the Board of
Directors, shall act on behalf of the entire Board between meetings thereof,
and acts by the Executive Committee shall have the same force and effect as
if performed by said entire Board of Directors.

In lieu of meeting, the Executive Committee may severally or collectively
act by written unanimous consent, and any such written unanimous consent
shall be valid corporate action as though it had been authorized at any
meeting of the Executive Committee.

ARTICLE VII-OFFICERS

(a) Enumeration: The offices of the corporation may consist of a Chairman
of the Board, a President, Vice Presidents, a Secretary and a Treasurer and
such other officers as shall from time to time be chosen and appointed by the
Board of Directors.

(b) Chairman of the Board: The Board of Directors may elect a Chairman of
the Board. The Chairman of the Board shall preside at all meetings of the
directors and stockholders. When designated as such by the Board, the
Chairman of the Board shall be the corporation's Chief Executive Officer.

(c) President: The President shall have general charge over the affairs
of the corporation. When the Chairman of the Board is designated as Chief
Executive Officer, the President shall be subject to the direction of the
Chairman of the Board. If the Chairman is not designated as Chief Executive
Officer, then the President shall be Chief Executive Officer, subject only to
the direction of the Board of Directors. The President shall, in any case,
be the Chief Operating Officer of the corporation.

(d) Vice President/Senior Vice President: Each Vice President shall
perform such duties as may be assigned to him by the Chairman or the
President. A Senior Vice President may be designated as such based upon
tenure or responsibility.

(e) Secretary: The Secretary shall be ex-officio Secretary of the Board
of Directors, shall give or cause to be given all required meeting notices to
the stockholders, and directors, shall record all proceedings of the meetings
of the stockholders and directors in a book to be kept for that purpose; and
shall perform such other duties as may be assigned to him by the Board of
Directors; he shall have custody of the seal of the corporation and shall
affix the same to any instrument when duly authorized to do so and attest the
same, and he shall be sworn to the faithful discharge of his duties. This
office may be combined with the office of Treasurer.

(f) Treasurer: The Treasurer shall keep account of all monies of the
company received or disbursed, and shall deposit all monies and valuables in
the name and to the credit of the company in such banks and depositories as
the Board of Directors shall designate. This office may be combined with any
other office of the corporation.

(g) Compensation: The salary and other remuneration in any form of the
Chairman of the Board shall be fixed and may be changed by the Board of
Directors. The salaries and other remuneration of those officers who are
members of the Executive Committee of the Board of Directors other than the
Chairman of the Board shall be fixed and may be changed by the Chairman of
the Board if authorized by the Board to do so or, if the Chairman is not so
authorized or there is no Chairman of the Board, by the Board of Directors.
The salaries and remuneration in any form of all other officers may be fixed
and may be changed by the Board of Directors or its Executive Committee.

(h) Term of Office: Each of such officers shall serve for the term of one
year or until their successors have been duly elected and qualified.

(i) Vacancies and Removal of Officers: In case of the death, disability,
resignation or otherwise of one or more of the officers, the Board of
Directors, although less than a quorum shall fill the vacancies for the
unexpired term. Any officer of this corporation may be removed with or
without cause by the affirmative vote of the Board of Directors at any
regular or special meeting called for that purpose. A vacancy in the office
Chairman or President shall be filled only by an officer who has held the
positions of a Vice President and a Regional Agent.

ARTICLE VIII-DIVIDENDS

(a) Dividends may be declared by the Board of Directors at its discretion
from surplus or net profits of the corporation.

(b) Dividends shall be payable only to the stockholders of record on the
books of the company at the time fixed for such payment.

ARTICLE IX-INDEMNIFICATION

(a) Definitions: For purposes of this Article IX:

(1) References to the "Corporation" shall include any domestic or
foreign predecessor entity of the Corporation in a merger, consolidation or
other transaction in which the liabilities of the predecessor are transferred
to the Corporation by operation of law and in any other transaction in which
the Corporation assumes the liabilities of the predecessor but does not
specifically exclude liabilities that are the subject matter of this Article.

(2) "Indemnitee" means (a) any present or former director, advisory
director, or officer of the Corporation, (b) any person who, while serving in
any of the capacities referred to in clause (a) hereof served at the
Corporation's request as a director, officer, partner, venturer, proprietor,
trustee, employee, agent or similar functionary of another foreign or
domestic corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise, and (c) any person nominated or designated by (or
pursuant to authority granted by) the Board of Directors or any committee
thereof to serve in any of the capacities referred to in clauses (a) or (b)
hereof.

(3) "Official Capacity" means (a) when used with respect to a director,
the office of director of the Corporation, and (b) when used with respect to
a person other than a director, the elective or appointive office of the
Corporation held by such person or the employment or agency relationship
undertaken by such person at the request of or on behalf of the Corporation,
but in each case does not include service for any other foreign or domestic
corporation or any partnership, joint venture, sole proprietorship, trust,
employee benefit plan or any other enterprise.

(4) "Proceeding" means any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative, arbitrative or
investigative, any appeal in such an action, suit or proceeding, and any
inquiry or investigation that could lead to such an action, suit or
proceeding.

(b) Indemnification: The Corporation shall indemnify an Indemnitee who
was, is, or is threatened to be made a named defendant, respondent or witness
in a Proceeding by reason, in whole or in part, of such person serving or
having served, or having been nominated or designated to serve, in any of the
capacities referred to in Subparagraph (a)(2) above, against any judgments,
penalties (including excise and similar taxes), fines, settlements, and
reasonable expenses actually incurred by the person in connection with the
Proceeding if it is determined, in the manner described in Paragraph (c)
below, that the person (1) conducted himself in good faith, (2) reasonably
believed, in the case of conduct in his Official Capacity, that his conduct
was in the Corporation's best interests, and in all other cases, that his
conduct was at least not opposed to the Corporation's best interests, and (3)
in the case of any criminal Proceeding, had no reasonable cause to believe
his conduct was unlawful; provided, however, that if the person is found
liable to the Corporation or is found liable on the basis that personal
benefit was improperly received by him, the indemnification (i) shall be
limited to reasonable expenses actually incurred by the person in connection
with the Proceeding and (ii) shall not be made in respect of any Proceeding
in which the person shall have been found liable for willful or intentional
misconduct in the performance of his duty to the Corporation. The
termination of a Proceeding by judgment, order, settlement or conviction, or
on a plea of nolo contendere or its equivalent is not of itself determinative
that the person did not meet the requirements for indemnification set forth
above. A person shall be deemed to have been found liable in respect of any
claim, issue or matter only after the person shall have been so adjudged by
a court of competent jurisdiction after exhaustion of all appeals therefrom.
Notwithstanding any other provision of this Article, the Corporation shall
pay or reimburse expenses incurred by an Indemnitee in connection with his
appearance as a witness or other participant in a Proceeding at a time when
he is not a named defendant or respondent in the Proceeding. Reasonable
expenses shall include, without limitation, all court costs and all fees and
disbursements of attorneys for the Indemnitee.

(c) Determinations: The determinations required in Paragraph (b) above
that an Indemnitee has satisfied the prescribed conduct and belief standards
must be made (1) by a majority vote of a quorum consisting of directors who
at the time of the vote are not named defendants or respondents in the
Proceeding, (2) if such a quorum cannot be obtained, by a majority vote of a
committee of the Board of Directors, designated to act in the matter by a
majority vote of all directors, consisting solely of two or more directors
who at the time of the vote are not named defendants or respondents in the
Proceeding, (3) by special legal counsel selected by the Board of Directors
or a committee of the Board by vote as set forth in clause (1) or (2) of this
sentence, or, if such a quorum cannot be obtained and such a committee cannot
be established, by a majority vote of all directors, or (4) by the holders of
Class A Voting stock in a vote that excludes the voting shares held by the
directors who are named defendants or respondents in the Proceeding. The
determination as to reasonableness of expenses must be made in the same
manner as the determination that the person has satisfied the prescribed
conduct and belief standards, except that if the determination that the
person has satisfied the prescribed conduct and belief standards is made by
special legal counsel, the determination as to reasonableness of expenses
must be made by the Board of Directors or a committee of the Board by vote as
set forth in clauses (1) and (2) of the immediately preceding sentence or, if
such a quorum cannot be obtained and such a committee cannot be established,
by a majority vote of all directors.

(d) Advancement of Expenses: Reasonable expenses incurred by an Indemnitee
who was, is, or is threatened to be made a named defendant or respondent in
a Proceeding shall be paid or reimbursed by the Corporation, in advance of
the final disposition of the Proceeding and without any of the determinations
specified in Paragraph (c) above, after the Corporation receives a written
affirmation by the Indemnitee of his good faith belief that he has met the
standard of conduct necessary for indemnification under Paragraph (b) above
and a written undertaking by or on behalf of such director to repay the
amount paid or reimbursed if it is ultimately determined that he has not met
those requirements. The written undertaking described in the immediately
preceding sentence to repay the amount paid or reimbursed to him by the
Corporation must be an unlimited general obligation of the Indemnitee but
need not be secured, and it may be accepted without reference to financial
ability to make repayment.

(e) Insurance and Other Indemnification: The Corporation may purchase and
maintain insurance or establish and maintain another arrangement on behalf of
any Indemnity against or in respect of any liability asserted against him and
incurred by him, both as to action in his Official Capacity and as to action
in any other capacity, whether or not the Corporation would have the power to
indemnify him against that liability under those Bylaws or by statute. If
the insurance or other arrangement is with a person or entity that is not
regularly engaged in the business of providing insurance coverage, the
insurance or arrangement may provide for payment of a liability with respect
to which the Corporation would not have the power to indemnify the person
only if including coverage for the additional liability has been approved by
the holders of the Class A Voting stock of the Corporation. Without limiting
the power of the Corporation to purchase, procure, establish or maintain any
kind of insurance or other arrangement, the Corporation may, for the benefit
of Indemnitees, (1) create a trust fund; (2) establish any form of self-
insurance; (3) secure its indemnity obligation by grant of a security
interest or other lien on the assets of the Corporation; or (4) establish a
letter of credit, guaranty or surety arrangement. The insurance or other
arrangement may be purchased, procured, maintained or established within the
corporation or with any insurer or other person deemed appropriate by the
Board of Directors regardless of whether all or part of the stock or other
securities of the insurer or other person are owned in whole or part by the
Corporation. In the absence of fraud, the judgment of the Board of Directors
as to the terms and conditions of the insurance or other arrangement and the
identity of the insurer or other person participating in an arrangement shall
be conclusive, and the insurance or arrangement shall not be voidable and
shall not subject the directors approving the insurance or arrangement to
liability, on any ground, regardless of whether directors participating in
the approval are beneficiaries of the insurance or arrangement.

(f) Report to Shareholders: Any indemnification of or advancement of
expenses to an Indemnitee in accordance with this Article or the provisions
of any statute shall be reported in writing to the shareholders with or
before the notice or waiver of notice of the next shareholders' meeting or
with or before the next submission to shareholders of a consent to action
without a meeting and, in any case, within the 12-month period immediately
following the date of the indemnification or advance.

(g) Entitlement: The indemnification provided by this Article shall (1)
not be deemed exclusive of, or to preclude, any other rights to which those
seeking indemnification may at any time be entitled under the Corporation's
Articles of Incorporation, any law, agreement or vote of shareholders or
disinterested directors, or otherwise, (2) continue as to a person who has
ceased to be in the capacity by reason of which he was an Indemnitee with
respect to matters arising during the period he was in such capacity, and (3)
inure to the benefit of the heirs, executors and administrators of such a
person.

(h) Employee Benefit Plans: The Corporation is deemed to have requested
an Indemnitee to serve an employee benefit plan whenever the performance by
him of his duties to the Corporation also imposes duties on or otherwise
involves services by him to the plan or participants or beneficiaries of the
plan. Excise taxes assessed on an Indemnitee with respect to an employee
benefit plan pursuant to applicable law are deemed fines. Action taken or
omitted to be taken by an Indemnitee with respect to an employee benefit plan
in the performance of his duties for a purpose reasonably believed by him to
be in the best interest of the participants and beneficiaries of the plan is
deemed to be for a purpose which is not opposed to the best interests of the
Corporation.

(i) Severability: The provisions of this Article are intended to comply
with Articles 2.02A(16) and 2.02-1 of the Texas Business Corporation Act. To
the extent that any provision of this Article authorizes or requires
indemnification or the advancement of expenses contrary to such statutes or
the Articles of Incorporation, the Corporation's power to indemnify or
advance expenses under such provision shall be limited to that permitted by
such statutes and the Articles of Incorporation and any limitation required
by such statutes or the Articles of Incorporation shall not affect the
validity of any other provision of this Article.

(j) Effect of Amendment: No amendment, modification or repeal of this
Article or any provision hereof shall in any manner terminate, reduce or
impair the right of any past, present or future Indemnitees to be indemnified
by the Corporation, nor the obligation of the Corporation to indemnify any
such Indemnitees, under and in accordance with the provisions of this Article
as in effect immediately prior to such amendment, modification or repeal with
respect to claims rising from or relating to matters occurring, in whole or
in part, prior to such amendment, modification or repeal, regardless of when
such claims may arise or be asserted.

(k) Statutory Changes: In the event the indemnification provided by this
Article is more restrictive than the provisions of indemnification allowed by
Article 2.02-1 of the Texas Business Corporation Act, and those persons
seeking indemnification shall be indemnified to the full extent permitted by
Article 2.02-1 of the Texas Business Corporation Act as it may exist from
time to time.

ARTICLE X-AMENDMENTS

Other than as otherwise specifically provided herein, any of the Bylaws
of this corporation may be altered, changed or amended by a majority of the
Directors or of the shares of the company entitled to vote at any annual or
special meeting properly and legally called for that purpose.

ARTICLE XI-VOTING RIGHTS

Only Class A Voting common shares shall be entitled to vote except on
matters on which all shareholders are entitled to vote under the Texas
Business Corporation Act.

EXHIBIT 5.

OPINION OF COUNSEL REGARDING LEGALITY

(817) 878-6307
April 24, 1997

Independent Research Agency for Life Insurance, Inc.
4100 South Hulen Street
Fort Worth, Texas 76109

Gentlemen:

We have acted as counsel to Independent Research Agency for Life
Insurance, Inc., a Texas corporation (the "Company"), in connection with
the proposed offering of 150,000 shares of Class B Nonvoting Common Stock,
$.02 par value (the "Common Stock") to agents of the Company pursuant to a
Form S-1 Registration Statement (the "Registration Statement").

In our capacity as counsel to the Company, we have examined and relied
upon the Company's Articles of Incorporation and Bylaws, and the records of
corporate proceedings, including the records with respect to the approval
of the proposed registration and the sale of the shares of Common Stock
thereunder, and have made such other investigations as we have deemed
necessary and prudent for the purposes of the opinions expressed herein.

Based on the foregoing, we are of the opinion that the shares of
Common Stock offered for sale by the Company under the Registration
Statement have been duly authorized and reserved for issuance and when (a)
the Registration Statement shall have become effective, and (b) the shares
of Common Stock have been paid for in accordance with the terms and
conditions set forth in the Registration Statement, then, upon their
delivery, such shares will be validly issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the aforesaid Registration
Statement and to the use of our name in the Prospectus constituting a part
thereof.

Respectfully submitted,

/s/ Law, Snakard & Gambill, P.C.

LAW, SNAKARD & GAMBILL, P.C.

INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC.

EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT

% Owned

United Services Planning Association, Inc. (Texas) 100%
Independent Research Agency for Life Insurance, Inc. (Hawaii) 100%
Independent Research Agency for Life Insurance, Inc. (Wyoming) 100%
Independent Research Agency for Life Insurance, Inc. (Montana) 100%
Independent Research Agency for Life Insurance, Inc. (New York) 100%
Independent Research Agency for Life Insurance, Inc. (Nevada) 100%
Independent Research Agency for Life Insurance, Inc. (Alabama) 100%
First Command Bank 100%

EXHIBIT 23.a.

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Independent Research Agency for Life Insurance, Inc.
and Subsidiaries
Fort Worth, Texas

We hereby consent to the use in this Registration Statement on Form S-1 of our
report dated November 15, 1996 (Except Note 11, as to which the date is December
2, 1996), relating to the consolidated financial statements of Independent
Research Agency for Life Insurance, Inc. and Subsidiaries, and to the reference
to our Firm under the caption "Experts" in the Prospectus.

/s/ Brantley, Frazier, Rogers & Company, P.C.

BRANTLEY, FRAZIER, ROGERS & COMPANY, P.C.
Fort Worth, Texas
April 24, 1997

EXHIBIT 23.b.
CONSENT OF COUNSEL
(contained in Exhibit 5)

EXHIBIT 24.

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned Directors
of Independent Research Agency for Life Insurance, Inc. (the "Company")
hereby constitutes and appoints Lamar C. Smith, James N. Lanier and G. Norman
Coder, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign a Registration Statement on
Form S-1 and any and all amendments (including post-effective amendments)
thereto, and to file the same, with all exhibits thereto, and all other
documents in connection therewith, with the Securities and Exchange
Commission and with state securities commissions for the purpose of
registering, under the Securities Act of 1933 and applicable state securities
acts, shares of the Company's Class B Nonvoting Common Stock, granting unto
each said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any
of them or their or his substitute or substitutes may lawfully do or cause to
be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney
to be effective this 24th day of April, 1997.

Signature Title

/s/ Lamar C. Smith
_______________________________ Chairman of the Board and Chief
Lamar C. Smith Executive Officer (Principal
Executive Officer)
/s/ James N. Lanier
_______________________________ President, Chief Operating
James N. Lanier Officer and Director

/s/ Howard M. Crump
_______________________________ Senior Vice President, Director
Howard M. Crump of Marketing and Director

/s/ William A. Dast
_______________________________ Director
William A. Dast

/s/ Martin R. Durbin
_______________________________ Treasurer and Chief Financial
Martin R. Durbin Officer (Principal Finance and
Accounting Officer)
/s/ Hal S. Craig
_______________________________ Vice President, Director of
Hal N. Craig Management Information Systems
and Director

/s/ Donaldson D. Frizzell
_______________________________ Vice President, Director of
Donaldson D. Frizzell Investments and Director

/s/ Carroll H. Payne II
_______________________________ Director
Carroll H. Payne II

/s/ G. Norman Coder
_______________________________ Secretary and Director

G. Norman Coder

EXHIBIT 99
ESCROW AGREEMENT

This Agreement is made and entered into as of April 9, 1997 by and among
Central Bank & Trust (the "Escrow Agent"), and Independent Research Agency for
Life Insurance, Inc. (the "Company").

RECITALS

The Company proposes to offer for sale to its agents ("Subscribers") up to
150,000 shares of Class B Nonvoting Common Stock (the "Securities") at a price
of $27.04 per share (the "Proceeds").

The Company desires to establish an escrow account in which funds received
from Subscribers will be deposited pending completion of the escrow period.
Central Bank & Trust agrees to serve as Escrow Agent in accordance with the
terms and conditions set forth herein.

AGREEMENT

Now, therefore, in consideration of the foregoing, it is hereby agreed as
follows:

1. Establishment of Escrow Account. On or prior to the date of the
commencement of the offering, the Company shall establish an interest-bearing
escrow account with the Escrow Agent, which escrow account shall be entitled
"IRA Stock Subscription Account" (the "Escrow Account"). The Company will
instruct Subscribers to make checks for subscriptions payable to the order of
the Escrow Account. Any checks received that are made payable to a party other
than the Escrow Account shall be returned to the Subscriber who submitted the
check.

2. Escrow Period. The Escrow Period shall begin with the commencement of
the offering and shall terminate upon August 31, 1997, unless extended by the
Company for up to an additional thirty (30) days.

During the Escrow Period, the Company is aware and understands it is not
entitled to any funds received into escrow and no amounts deposited in the
Escrow Account shall become the property of the Company or any other entity, or
be subject to the debts of the Company or any other entity, until disbursement
from the Escrow Account by the Escrow Agent as provided below.

3. Disbursements from the Escrow Account. In the event the Escrow Agent
does not receive deposits totaling $1,000.00 (the "Minimum") prior to the
termination of the Escrow Period, the Escrow Agent shall refund to each
Subscriber the amount received from the Subscriber, without deduction, penalty,
or expense to the Subscriber, and the Escrow Agent shall notify the Company of
its distribution of the funds. The purchase money returned to each Subscriber
shall be free and clear of any and all claims of the Company or any of its
creditors.

In the event the Escrow Agent does receive the Minimum, the Escrow Amount
will not be released to the Company until such amount is received by the Escrow
Agent in collected funds. For purposes of this Agreement, the term "collected
funds" shall mean all funds received by the Escrow Agent which have cleared
normal banking channels and are in the form of cash. All interest earned on the
Escrow amount shall be disbursed to the Company.

4. Collection Procedure. The Escrow Agent is hereby authorized to forward
each check for collection and, upon collection of the proceeds of each check,
deposit the collected proceeds in the Escrow Account. As an alternative, the
Escrow Agent may telephone the bank on which the check is drawn to confirm that
the check has been paid.

Any check returned unpaid to the Escrow Agent shall be returned to the
Subscriber who submitted the check. In such cases, the Escrow Agent will
promptly notify the Company of such return. Any check received by the Escrow
Agent from a Subscriber after the Escrow Period ends shall be delivered,
uncashed, to the Company, unless the Company instructs otherwise.

If the Company rejects any subscription for which the Escrow Agent has
already collected funds, the Escrow Agent shall promptly issue a refund check
to the rejected Subscriber. If the Company rejects any subscription for which
the Escrow Agent has not yet collected funds but has submitted the Subscriber's
check for collection, the Escrow Agent shall promptly issue a check in the
amount of the Subscriber's check to the rejected Subscriber after the Escrow
Agent has cleared such funds. If the Escrow Agent has not yet submitted a
rejected Subscriber's check for collection, the Escrow Agent shall promptly
remit the Subscriber's check directly to the Subscriber.

5. Investment of Escrow Amount. The Escrow Agent may invest the Escrow
Amount only in such accounts or investments as the Company may specify by
written notice. The Company may only specify investment in (1) bank accounts,
(2) bank money-market accounts, (3) short-term certificates of deposit issued
by a bank, or (4) short-term securities issued or guaranteed by the U.S.
Government.

6. Compensation of Escrow Agent. If it is necessary for the Escrow Agent
to return funds to the Purchasers of the Securities, the Company shall pay to
the Escrow Agent an additional amount sufficient to reimburse it for its actual
cost in disbursing such funds. However, no such reimbursement for costs and
expenses, indemnification for any damages incurred by the Escrow Agent, or any
monies whatsoever shall be paid out of or chargeable to the Escrow Agent for the
maintenance of this account.

AGREED, this 9th day of April, 1997.

Independent Research Agency
Central Bank & Trust for Life Insurance, Inc.

By /s/ Tom J. Pittman By /s/ G. Norman Coder
Title: Senior Vice President Title: Secretary

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