ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND
TAX DEFERRED SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Year Ended December 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the Transition Period from to
Commission File Number
A. Full title of the Plan and the address of
the Plan, if different from that of the
issuer named below:
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
B. Name of the issuer to the securities held
pursuant to the Plan and the address of its
principal executive office:
ACCEPTANCE INSURANCE COMPANIES INC.
ONE CENTRAL PARK PLAZA
222 SOUTH 15TH STREET, SUITE 600 NORTH
OMAHA, NEBRASKA 68102
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX
DEFERRED SAVINGS PLAN
June 29, 1999 /s/ Georgia M. Mace
Date ______________________ By ______________________
Georgia M. Mace
Plan Administrator
<PAGE>
REQUIRED INFORMATION
Plan financial statements and schedules are prepared in accordance with the
financial reporting requirements of ERSIA and are included there in as listed
in the table of contents below.
CONTENTS
(a) Financial Statements and Annual Report Schedules
Independent Auditors' Report
Statement of Net Assets Available for Benefits,
December 31, 1998
Statement of Net Assets Available for Benefits,
December 31, 1997
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1998
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1997
Notes to Financial Statements
(b) Annual Report Schedules
Item 27a - Schedule of Assets Held for Investment
Purposes, December 31, 1998
Item 27a - Schedule of Assets Held for Investment
Purposes Which Were Both Acquired and Disposed
of Within the Plan Year
Item 27d - Schedule of Reportable Transactions for
the Year Ended December 31, 1998
(c) Exhibits
Exhibit 23 - Independent Auditors' Consent
Schedules not filed herewith are omitted because of the absence of the
conditions under which they are required.
<PAGE>
TIGHE, MASSMAN & NELSON, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
13310 "I" Street
Omaha, Nebraska 68137
(402) 330-7099
FAX (402) 330-0809
J. William Tighe, C.P.A. (1930-1989)
Michael L. Massman, C.P.A.
George E. Nelson, C.P.A.
Dean M. Broich, C.P.A.
James A. Reinig, C.P.A.
_______
G. Michael Gillain
INDEPENDENT AUDITORS' REPORT
_____________________________
Administrative Committee
Acceptance Insurance Companies Inc.
Employee Stock Ownership and Tax
Deferred Savings Plan
Omaha, Nebraska
We have audited the accompanying statements of net assets available
for benefits of Acceptance Insurance Companies Inc. Employee Stock Ownership
and Tax Deferred Savings Plan (the Plan) as of December 31, 1998 and 1997, and
the related statements of changes in net assets available for benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit 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 audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the net assets available for benefits of the Acceptance
Insurance Companies Inc. Employee Stock Ownership and Tax Deferred Savings
Plan as of December 31, 1998 and 1997, and the changes in net assets available
for benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audit was conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental annual report
schedules are presented for the purposes of additional analysis and are not a
required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These schedules are the responsibility of the Plan's management. Such
schedules have been subjected to the auditing procedures applied in the audit
of the basic financial statements, and, in our opinion, are fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
/s/ Tighe, Massman & Nelson, P.C.
Certified Public Accountants
June 3, 1999
Omaha, Nebraska
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERREDD SAVINGS PLAN
STATEMENT OF ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
________________________________________________________________________________________________
Guaranteed Capital Acceptance
Interest Market Balanced Income Appreciation Common
Contracts Funds Portfolio Portfolio Portfolio Stock Fund Other
____________ __________ ____________ __________ _____________ ____________ ___________
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments at Fair Value:
Acceptance Insurance Companies
Inc. Common Stock $ - $ - $ - $ - $ - $1,434,551 $ -
Money Market Fund 196,298 420,744 814,148 329,546 557,370 12,772 185,601
U.S. Government & Agencies
Securities - - 845,605 609,984 - - -
Corporate Bonds - - 242,995 265,998 2,311,008 - -
Common Stock - - 905,940 179,376 5,158,810 - -
Preferred Stock - - 98,944 107,267 - - -
Unit Investment Trust 1,049,550 - - - - - -
Participant Loans - - - - - - 507,951
Investments at Contract Value:
Guaranteed Interest Contracts - - - - - - -
Certificate of Deposit - - - - - - -
Receivables:
Employer Contributions - - - - - - 1,258,174
Employee Contributions - - - - - - -
Accrued Interest 1,616 1,627 21,721 14,941 54,675 35 144
____________ __________ ___________ ___________ ___________ ___________ ___________
Total Assets
1,247,464 422,371 2,929,353 1,507,112 8,081,863 1,447,358 1,951,870
____________ __________ ___________ ___________ ___________ ___________ ___________
Liabilities
ESOP Loan - - - - - - -
____________ ___________ ____________ ___________ ___________ __________ ___________
Total Liabilities - - - - - - -
____________ __________ ____________ ___________ ___________ ___________ ___________
Net Assets Available for
Benefits $1,247,464 $ 422,371 $2,929,353 $1,507,112 $8,081,863 $1,447,358 $1,951,870
============ ========== ============ =========== =========== =========== ===========
</TABLE>
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERREDD SAVINGS PLAN
STATEMENT OF ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
NON-PARTICIPANT
DIRECTED
________________________________________
Employee Stock
Ownership
Allocated Unallocated Total
____________ ____________ ___________
<S> <C> <C> <C>
Assets:
Investments at Fair Value:
Acceptance Insurance Companies
Inc. Common Stock $1,112,454 $ 230,283 $2,777,288
Money Market Fund 281 - 2,516,760
U.S. Government & Agencies
Securities - - 1,455,589
Corporate Bonds - - 2,820,001
Common Stock - - 6,244,126
Preferred Stock - - 206,211
Unit Investment Trust - - 1,049,550
Participant Loans - - 507,951
Investments at Contract Value:
Guaranteed Interest Contracts - - -
Certificate of Deposit - - -
Receivables:
Employer Contributions - - 1,258,174
Employee Contributions - - -
Accrued Interest 1 - 94,760
___________ __________ _____________
Total Assets 1,112,736 230,283 18,930,410
___________ __________ _____________
Liabilities
ESOP Loan - 125,094 125,094
___________ __________ _____________
Total Liabilities - 125,094 125,094
___________ __________ _____________
Net Assets Available for
Benefits $1,112,736 $ 105,189 $18,805,316
=========== ========== ============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
____________________________________________________________________________________________
Guaranteed Capital Acceptance
Interest Market Balanced Income Appreciation Common
Contracts Funds Portfolio Portfolio Portfolio Stock Fund Other
____________ __________ ___________ ___________ _____________ ____________ _________
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments at Fair Value:
Acceptance Insurance Companies
Inc. Common Stock $ - $ - $ - $ - $ - $1,536,511 $ -
Money Market Fund 85,412 275,085 22,097 9,090 643,185 5,292 -
U.S. Government & Agencies
Securities - - 585,374 272,421 419,225 - -
Corporate Bonds - - 277,642 217,145 1,798,714 - -
Common Stock - - 1,054,248 203,986 4,477,643 - -
Preferred Stock - - 28,626 26,163 - - -
Mutual Funds 817,844 - - - - - -
Participant Loans - - - - - - 449,252
Investments at Contract Value:
Guaranteed Interest Contracts 18,181 - - - - - -
Certificate of Deposit 174,935 - - - - - -
Receivables:
Employer Contributions - - - - - - 1,066,917
Employee Contributions - - - - - - 151,796
Accrued Interest 13,439 1,341 15,603 8,203 56,093 8 -
____________ __________ ____________ ____________ ____________ ____________ __________
Total Assets 1,109,811 276,426 1,983,590 737,008 7,394,860 1,541,811 1,667,965
____________ __________ ____________ ____________ ____________ ____________ __________
Liabilities
ESOP Loan - - - - - - -
____________ __________ ____________ ____________ ____________ ____________ __________
Total Liabilities - - - - - - -
____________ __________ ____________ ____________ ____________ ____________ __________
Net Assets Available for
Benefits $1,109,811 $ 276,426 $1,983,590 $ 737,008 $7,394,860 $1,541,811 $1,667,965
============ ========== ============ ============ ============ ============ ==========
</TABLE>
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
NON-PARTICIPANT
DIRECTED
______________________________________
Employee Stock
Ownership
Allocated Unallocated Total
____________ ____________ ____________
<S> <C> <C> <C>
Assets:
Investments at Fair Value:
Acceptance Insurance Companies
Inc. Common Stock $1,411,776 $369,585 $ 3,317,872
Money Market Fund 30 - 1,040,191
U.S. Government & Agencies
Securities - - 1,277,020
Corporate Bonds - - 2,293,501
Common Stock - - 5,735,877
Preferred Stock - - 54,789
Mutual Funds - - 817,844
Participant Loans - - 449,252
Investments at Contract Value:
Guaranteed Interest Contracts - - 18,181
Certificate of Deposit - - 174,935
Receivables:
Employer Contributions - - 1,066,917
Employee Contributions - - 151,796
Accrued Interest - - 94,687
___________ __________ ____________
Total Assets 1,411,806 369,585 16,492,862
___________ __________ ____________
Liabilities
ESOP Loan - 168,098 168,098
___________ __________ ____________
Total Liabilities - 168,098 168,098
___________ __________ ____________
Net Assets Available for
Benefits $1,411,806 $201,487 $16,324,764
=========== ========== ============
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
_______________________________________________________________________________________________
Guaranteed Capital Acceptance
Interest Market Balanced Income Appreciation Common
Contracts Funds Portfolio Portfolio Portfolio Stock Fund Other
______________ ____________ ___________ ___________ ____________ ___________ ___________
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Investment Income:
Interest $ 14,782 $ 16,951 $ 80,969 $ 53,747 $ 255,979 $ 391 $ 46,401
Dividends - - 15,459 8,644 65,702 - -
Realized Gain 2,152 - 198,650 90,621 187,237 51,175 -
Unrealized Gain (Loss) 59,180 - (7,175) (23,506) (370,101) (334,960) -
______________ ___________ ____________ __________ __________ ____________ _________
76,114 16,951 287,903 129,506 138,817 (283,394) 46,401
______________ ___________ ____________ __________ _________ ____________ _________
Allocation of 3,909 shares of
Company Stock at Market - - - - - - -
______________ ___________ ____________ __________ _________ ____________ _________
Contributions:
Employee 149,080 61,331 484,407 184,195 795,046 155,769 -
Employee Rollovers 15,493 40,188 67,820 25,938 54,284 27,028 -
Employer 104,539 52,002 325,779 121,243 548,672 105,940 -
Interest Paid by Acceptance
on behalf of Plan - - - - - - -
______________ __________ ___________ _________ __________ ___________ _________
269,112 153,521 878,006 331,376 1,398,002 288,737 -
______________ __________ ___________ _________ __________ ___________ _________
Total Additions 345,226 170,472 1,165,909 460,882 1,536,819 5,343 46,401
______________ __________ ___________ _________ __________ __________ __________
Deductions:
Distributions to Plan
Participants 67,182 34,860 164,772 45,203 407,716 115,367 20,032
Allocation of 3,909 Shares of
Company Stock at Market - - - - - - -
Interest on ESOP Loan - - - - - - -
______________ ___________ __________ ___________ _________ __________ _________
Total Deductions 67,182 34,860 164,772 45,203 407,716 115,367 20,032
Net Transfer of Assets (to) from (140,391) 10,333 (55,374) 354,425 (442,100) 15,571 257,536
______________ ___________ __________ ___________ __________ __________ _________
Net Increase (Decrease) 137,653 145,945 945,763 770,104 687,003 (94,453) 283,905
Net Assets Available for Benefits
Beginning of Year 1,109,811 276,426 1,983,590 737,008 7,394,860 1,541,811 1,667,965
______________ ___________ __________ ___________ ___________ _________ __________
Net Assets Available for Benefits
End of Year $1,247,464 $ 422,371 $2,929,353 $1,507,112 $8,081,863 $1,447,358 $1,951,870
============== ============= =========== ============ ============ ========== ===========
</TABLE>
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
NON-PARTICIPANT
DIRECTED
_________________________________________
Employee Stock
Ownership
Allocated Unallocated Total
____________ ____________ _____________
<S> <C> <C> <C>
Additions:
Investment Income:
Interest $ 62 $ - $ 469,282
Dividends - - 89,805
Realized Gain 68,095 - 597,930
Unrealized Gain (Loss) (291,838) (44,998) (1,013,398)
____________ ____________ ____________
(223,681) (44,998) 143,619
____________ ____________ ____________
Allocation of 3,909 shares of
Company Stock at Market 94,304 - 94,304
____________ ____________ ____________
Contributions:
Employee - - 1,829,828
Employee Rollovers - - 230,751
Employer - 43,004 1,301,179
Interest Paid by Acceptance
on behalf of Plan - 13,091 13,091
_____________ ____________ ___________
- 56,095 3,374,849
_____________ ____________ ___________
Total Additions (129,377) 11,097 3,612,772
_____________ ____________ ___________
Deductions:
Distributions to Plan
Participants 169,693 - 1,024,825
Allocation of 3,909 Shares of
Company Stock at Market - 94,304 94,304
Interest on ESOP Loan - 13,091 13,091
_____________ ____________ ___________
Total Deductions 169,693 107,395 1,132,220
Net Transfer of Assets (to) from - - -
_____________ ____________ ___________
Net Increase (Decrease) (299,070) (96,298) 2,480,552
Net Assets Available for Benefits
Beginning of Year 1,411,806 201,487 16,324,764
____________ ____________ ___________
Net Assets Available for Benefits
End of Year $ 1,112,736 $ 105,189 $18,805,316
============ ============= ============
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
_________________________________________________________________________________________________
Guaranteed Capital Acceptance
Interest Market Balanced Income Appreciation Common
Contracts Funds Portfolio Portfolio Portfolio Stock Fund Other
______________ ____________ ____________ __________ _____________ ____________ _________
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Investment Income:
Interest $ 19,690 $ 15,428 $ 52,706 $ 26,921 $ 196,151 $ 299 $ -
Dividends - - 11,867 4,867 59,996 - -
Realized Gain 4,683 - 25,867 123,512 829,747 24,420 -
Unrealized Gain 58 - 39,202 44,306 563,679 245,181 -
_____________ ____________ ____________ __________ ____________ ___________ __________
24,431 15,428 129,642 199,606 1,649,573 269,900 -
_____________ ____________ ____________ __________ ____________ ___________ __________
Allocation of 3,628 shares of
Company Stock at Market - - - - - - -
_____________ ____________ ___________ ___________ ____________ ___________ _________
Contributions:
Employee - 1,544,134 - - - - 40,137
Employee Rollovers 19,102 8,124 51,055 78,100 45,635 8,501 -
Employer - 848,537 - - - - 218,380
Interest Paid by Acceptance
on behalf of Plan - - - - - - -
_____________ ___________ ___________ ___________ ____________ __________ __________
19,102 2,400,795 51,055 78,100 45,635 8,501 258,517
_____________ ___________ ___________ ___________ ____________ __________ __________
Total Additions 43,533 2,416,223 180,697 277,706 1,695,208 278,401 258,517
_____________ ___________ ___________ ___________ ___________ __________ __________
Deductions:
Distributions to Plan
Participants 104,782 56,402 150,169 32,257 320,999 68,149 -
Allocation of 3,628 Shares of
Company Stock at Market - - - - - - -
Interest on ESOP Loan - - - - - - -
____________ ___________ ___________ __________ __________ _________ __________
Total Deductions 104,782 56,402 150,169 32,257 320,999 68,149 -
Net Transfer of Assets (to) from 250,932 (2,314,153) 896,547 133,909 693,710 208,915 130,140
____________ ____________ __________ ___________ __________ ________ __________
Net Increase 189,683 45,668 927,075 379,358 2,067,919 419,167 388,657
Net Assets Available for Benefits
Beginning of Year 920,128 230,758 1,056,515 357,650 5,326,941 1,122,644 1,279,308
____________ _____________ ___________ ___________ __________ ___________ _________
Net Assets Available for Benefits
End of Year $1,109,811 $ 276,426 $1,983,590 $ 737,008 $7,394,860 $1,541,811 $1,667,965
============ ============== ============= =========== =========== =========== ==========
</TABLE>
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
NON-PARTICIPANT
DIRECTED
________________________________________
Employee Stock
Ownership
Allocated Unallocated Total
____________ ____________ _____________
<S> <C> <C> <C>
Additions:
Investment Income:
Interest $ 24 $ - $ 311,219
Dividends - - 76,730
Realized Gain 14,976 - 1,023,205
Unrealized Gain 251,963 62,365 1,206,754
____________ ____________ ____________
266,963 62,365 2,617,908
____________ ____________ _____________
Allocation of 3,628 shares of
Company Stock at Market 66,193 - 66,193
____________ _____________ ____________
Contributions:
Employee - - 1,584,271
Employee Rollovers - - 210,517
Employer - 39,893 1,106,810
Interest Paid by Acceptance
on behalf of Plan - 16,202 16,202
____________ _____________ ____________
- 56,095 2,917,800
____________ _____________ ____________
Total Additions 333,156 118,460 5,601,901
____________ ____________ ____________
Deductions:
Distributions to Plan
Participants 38,463 - 771,221
Allocation of 3,628 Shares of
Company Stock at Market - 66,193 66,193
Interest on ESOP Loan - 16,202 16,202
____________ ____________ ____________
Total Deductions 38,463 82,395 853,616
Net Transfer of Assets (to) from - - -
____________ ____________ _____________
Net Increase 294,693 36,065 4,748,285
Net Assets Available for Benefits
Beginning of Year 1,117,113 165,422 11,576,479
____________ ____________ _____________
Net Assets Available for Benefits
End of Year $ 1,411,806 $ 201,487 $16,324,764
============ ============ ==============
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. Description of the Plan
The following description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
A. General
The Acceptance Insurance Companies Inc. Employee Stock
Ownership (ESOP) and Tax Deferred Savings Plan (401(k))
(the Plan) was established to enable participating employees of
Acceptance Insurance Companies Inc. (the Company) to share in
the growth of the employer and to provide participants with
future economic security. Participation in the Plan is
voluntary and is applicable to all employees who have been
credited with one year of service and attained the age of 21
for the ESOP portion and have been credited with six months of
service and attained the age of 21 for the 401(k) portion. The
Plan is administered by the Acceptance Insurance Companies Inc.
Administrative Committee.
B. Contributions
Employee contributions are invested in one or more funds as
elected by the employee. As of December 31, 1998, the
following funds were available for investment: Money Market
Funds, Income Portfolio, Balanced Portfolio, Capital
Appreciation Portfolio, Guaranteed Interest Contracts, and
Acceptance Insurance Companies Inc. Common Stock Fund.
Employer contributions are invested only in the Acceptance
Common Stock Fund for the ESOP portion of the Plan and in one
or more funds for the 401(k) portion of the Plan, as directed
by the participant. Participants may change their investment
options quarterly.
Each participant may, subject to the maximum limitations under
ERISA, contribute to the 401(k) portion from 1% to 15% of their
compensation, as defined under the Plan. The Company may, but
is not required to, contribute a matching contribution. The
Company may also make an additional discretionary contribution.
Any Company contributions are determined by the Company's Board
of Directors.
C. Vesting
Employer contributions to the ESOP portion of the Plan become
vested in accordance with a vesting schedule which increases
20% for each consecutive year of service starting with the
third year of service and are fully vested after seven years of
service. For the 401(k) portion of the Plan, except upon
death, disability or retirement, whereupon employer
contributions become fully vested, employer contributions are
vested 10% with one year of service and vesting increases to
30%, 50%, 75%, and 100% through five years of service.
Employee contributions are fully vested at all times.
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1998
C. Vesting - Continued
The normal form of benefit for a participant who terminates or
retires is a lump sum payment. If the participant's account
was vested in Acceptance Insurance Companies Inc. common stock,
the payment can be in the form of stock or cash. For all other
account balances the lump sum payment is in cash only.
D. Forfeited Accounts
For terminated employees withdrawing their vested accounts,
forfeited accounts are reallocated to participants in the same
proportion each participant's salary reduction is to the total
of all participants' salary reduction. ESOP forfeitures are
allocated in the same manner as the Employer Discretionary ESOP
contribution. During the Plan Year ended December 31, 1998 and
1997, forfeited account balances totaled $42,037 and $35,119,
respectively. Amounts allocated to accounts of terminated
participants electing to withdraw from the plan were $110 and
$20,222, respectively, at December 31, 1998 and 1997.
E. Loans to Participants
The Plan provides that participants may be granted loans
subject to certain terms and maximum dollar or vested account
balance limits, as defined by the Plan. These loans mature
within five years from the date they are granted, except loans
for the participant's principal residence can be extended
beyond five years. Loan payments are withheld from employee
payroll and submitted to the trustee.
F. Plan Termination
The term of the plan is indefinite, but may be amended,
modified or terminated at any time by the Company. Regardless
of such actions, the principal and income of the Plan remains
for the exclusive benefit of the Plan's participants and
beneficiaries. In the event the Plan is terminated, with
certain exceptions, each participant's account becomes 100%
vested. The Company is required to direct the Trustee to
distribute the Plan's assets to participants in lump sum
distributions, which shall be made in whole shares of
Acceptance Insurance Companies Inc. stock to the extent the
fund is so comprised and cash.
2. Summary of Significant Accounting Policies
A. Basis of Accounting
The financial statements of the Acceptance Insurance Companies
Inc. Employee Stock Ownership and Tax Deferred Savings Plan are
prepared on the accrual basis of accounting.
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1998
2. Summary of Significant Accounting Policies - Continued
B. Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the plan
administrator to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results may
differ from those estimates.
C. Investment Valuation and Income Recognition
Investments in equity securities are recorded at fair value.
Mutual fund units are recorded at reported net asset value.
Investments in guaranteed interest contracts are valued at
contract value (See Note 3), which approximates fair value.
Participant loans are carried at the balance of outstanding
principal.
Purchases and sales of securities are recorded on a
settlement-date basis, which approximates trade-date basis.
Interest and dividend income are reported on the accrual
basis.
D. Payment of Benefits
Benefits are recorded when paid.
3. Guaranteed Interest Contracts with Insurance Company
Assets that were merged into the Plan from the Redland Group 401(k) Plan
include a Guaranteed Interest Account entered into with Principal Mutual
Life Insurance Company (Principal) on September 1, 1992. Pursuant to
the merger, the contracts were transferred to the Plan trustee, who
maintains the contributions. During 1998 and 1997, funds from contracts
with Principal that had matured were converted to a mutual fund. The
contracts are included in the financial statements at contract value,
which approximates fair value, as reported to the Plan by Principal.
Contract value represents contributions made under the contract, plus
earnings, less Plan withdrawals.
4. Exercise of Warrants and ESOP Loan
Effective November 28, 1994, the Plan exercised its 27,010 warrants to
purchase common stock of Acceptance Insurance Companies Inc. at $11.00 a
share, for a total purchase price of $297,110, financed by a term note
guaranteed by Acceptance Insurance Companies Inc.
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1998
4. Exercise of Warrants and ESOP Loan - Continued
The term note bears interest at 7.5%, payable in annual installments of
$56,094, including principal and interest. The annual principal and
interest payments are due beginning February 1, 1995, with any remaining
principal due February 1, 2001. Effective November 28, 1994, the
Company entered into a contribution agreement whereby the Company agrees
to contribute to the Plan a sufficient amount to allow the Plan to pay
the annual installments of principal and interest on the loan. The Plan
agrees to apply any amounts received toward the annual principal and
interest installments. Interest of $13,090 was paid by the Company on
behalf of the Plan, for the year ended December 31, 1998. Loan
principal repayments will be made as follows:
<TABLE>
<CAPTION>
<S> <C>
1999 46,712
2000 50,216
2001 28,166
_____________
$ 125,094
=============
</TABLE>
The loan is collateralized by the unallocated shares of stock. As the
ESOP loan is paid, stock is released from encumbrance and allocated to
participants' accounts based on a predetermined formula. The lender has
no right against shares that have been released and allocated under the
ESOP. Accordingly, the financial statements present separately the
assets and liabilities and changes therein related to:
* Stock already released and allocated to participant accounts.
* Stock not yet allocated to employees (unallocated).
5. Income Tax Status
The Internal Revenue Service has informed the Company that the Plan, as
amended and restated October 1, 1990, is qualified under Section 401(a)
of the Internal Revenue Code (IRC) and is, accordingly, exempt from
federal income taxes under the provisions of Section 501(a) of the IRC.
A participant's contributions to the 401(k) portion of the Plan are made
on a pre-tax basis, i.e., they are excluded from gross income for income
tax purposes, but are subject to social security taxes. A participant
is not subject to federal income taxes on the amount of participant
contributions, Company contributions or Plan earnings until such amounts
are withdrawn or distributed. The tax consequences to participants will
vary depending on the circumstances at the time of distribution.
6. Fees and Expenses
Fees and expenses that are incurred directly in the interest of the Plan
were paid by Acceptance Insurance Companies Inc. for the years ended
December 31, 1998 and 1997.
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1998
7. Related Party Transactions
Silverstone Group, a related party through common management, began
administering the Plan on July 1, 1994. As stated in Note 6, all fees
incurred for Plan administration were paid by Acceptance Insurance
Companies Inc.
8. Investments
Investments held by the Plan at December 31, are:
<TABLE>
<CAPTION>
1998 1997
Cost Market Cost Market
_______________ _____________ ____________ ____________
<S> <C> <C> <C> <C>
*Acceptance Insurance Companies
Inc. Common Stock (125,777
shares and 121,893 shares) $ 1,873,809 $ 2,547,005 $ 1,647,411 $ 2,948,287
*Acceptance Insurance Companies
Inc. Common Stock (11,372 shares
and 15,280 shares encumbered by
ESOP Loan (Note 4)) 125,092 230,283 168,080 369,585
Common Stock of unaffiliated
Companies 5,307,936 6,244,126 4,542,544 5,735,877
Preferred Stock 222,567 206,211 81,000 54,789
Unit Investment Trust 924,943 1,049,550 748,176 817,844
U.S. Government & Agencies
Securities 1,443,384 1,455,589 1,255,511 1,277,020
Corporate Bonds 2,911,935 2,820,001 2,241,250 2,293,501
Guaranteed Interest Contracts - - 18,181 18,181
Certificate of Deposit - - 174,935 174,935
Money Market Fund 2,516,760 2,516,760 1,040,191 1,040,191
Participant Loans - 507,951 - 449,252
______________ _____________ ____________ ___________
$15,326,426 $17,577,476 $11,917,279 $15,179,462
============== ============= ============ ===========
</TABLE>
At December 31, 1998, individual investments representing 5% or more of net
assets available are as follows:
<TABLE>
<CAPTION>
Cost Market
______________ _____________
<S> <C> <C>
*Acceptance Insurance Companies
Common Stock $1,998,901 $2,777,288
Key Trust EB Managed Guaranteed
Investment Contract 924,932 1,049,550
First National Bank-U.S. Government
Obligation Fund 2,516,760 2,516,760
<FN>
*Represents a Party-In-Interest.
</FN>
</TABLE>
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1998
9. Reconciliation of Financial Statements to Form 5500
There were no reconciling items between Form 5500 and these Financial
Statements for the year ended December 31, 1998 and 1997.
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
ANNUAL REPORT SCHEDULES
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
TAX IDENTIFICATION NUMBER 31-0742926
PLAN NUMBER 001
<TABLE>
<CAPTION>
Column B Column C Column D Column E
_______________________________ _________________________________________ _______________ _______________
Identity of Issue, Borrower Description of Investment, Including
Lessor of Similar Party Collateral, Rate of Interest, Maturity
Date, Par on Maturity Date
Common Stock Number of Shares Cost Current Value
_______________________________ ________________________________________ ________________ _______________
<S> <C> <C> <C>
*Acceptance Insurance Companies 125,777 $1,873,809 $2,547,005
*Acceptance Insurance Companies 11,372 collateralized by term note, 7.5%, 125,092 230,283
maturing 2/1/2001
Allstate Corp 1,300 29,189 50,050
Amerus Life Holding 1,100 18,150 24,613
Annuity and Life RE (Hldgs) 5,700 110,285 153,900
Apogee Enterprises, Inc. 2,200 25,575 24,750
Bell & Howell Co 3,500 80,610 132,344
Calenergy, Inc. 3,800 97,682 131,812
Calpine Corporation 6,500 104,000 164,125
Capital Sr Living Group 11,000 148,500 153,313
Chevron Corp 510 32,601 42,298
Englehard Corp 8,200 160,271 159,900
Enron Oil & Gas Co 8,900 148,408 153,525
Exel Limited CL A 1,850 139,211 138,750
FHLMC VT 1,500 32,553 96,656
First State Banc 1,985 33,248 41,189
Foremost Corp of America 4,000 65,265 76,095
Fruit of the Loom CL A 920 29,813 12,708
Geon Company 3,000 68,568 69,000
H & R Block 4,200 156,676 189,000
HCC Insurance Holdings, Inc. 6,000 100,838 105,000
Heller Financial 4,100 109,083 119,412
Hexcel Corp 5,800 28,507 48,575
IHOP Corp 1,140 28,643 45,529
Input/Output, Inc. 16,900 145,167 123,581
Int'l Multfoods Corp 3,900 82,637 100,669
Interstate Energy Corp 5,130 167,382 165,442
Limited, Inc. 5,700 162,056 166,013
Lincoln Electric Co CL A 2,158 33,868 48,015
Loews Corp 1,150 107,695 112,988
LSI Logic Corp 10,000 154,689 161,250
Madge Networks NV Com 27,000 114,750 87,750
McCormick & Company, Inc. 2,500 63,125 84,531
Mediaone Group 5,600 209,540 263,200
Merrill Corp 2,025 45,942 39,108
Midas Inc Com 10,099 158,169 314,331
Millipore Corp 4,000 96,384 113,250
NCR Corporation 80 2,376 3,340
Office Depot 7,200 116,654 266,850
Olsten Corp 9,000 87,840 66,375
Pier 1 Imports, Inc. 11,200 105,074 108,500
Pinkertons, Inc. 3,500 61,441 74,594
Rent-Way, Inc. 470 8,992 11,427
</TABLE>
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
ANNUAL REPORT SCHEDULES
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - CONTINUED
DECEMBER 31, 1998
TAX IDENTIFICATION NUMBER 31-0742926
PLAN NUMBER 001
<TABLE>
<CAPTION>
Column B Column C Column D Column E
_____________________________ _______________________________________________________ _________________ _____________
Identity of Issue, Borrower Description of Investment, Including Collateral, Rate
Lessor of Similar Party of Interest, Maturity Date, Par on Maturity Date
Common Stock Number of Shares Cost Current Value
_____________________________ _______________________________________________________ _________________ ______________
<S> <C> <C> <C>
Rental Service Co 7,900 170,405 123,931
Reynolds & Reynolds CL A 1,829 31,148 41,953
Richfood Holding Corp 8,900 170,176 184,675
Rollins, Inc. 1,000 21,485 17,500
Scana Corp 4,200 112,445 135,450
TCA Cable TV, Inc. 540 7,973 19,271
Tele Communications Inc New 1,800 23,186 99,563
Tenet Healthcare Corp 5,300 147,623 139,125
U S Industries 13,870 257,242 254,861
U S West Media Group 43 1,249 2,779
UCAR International 3,140 81,514 55,931
Unifirst Corp 5,800 163,850 132,312
Valassis Communications, Inc. 1,025 16,174 52,916
Vulcan Matls 500 58,611 65,781
Walter Industries, Inc. 7,700 100,966 117,906
Wang Laboratories 5,210 84,659 144,578
Werner Enterprises, Inc. 9,400 158,678 166,262
Whitman Corp 1,796 29,095 45,574
___________ ____________
Total Common Stock 7,306,837 9,021,414
___________ ____________
*Represents a Party-In-Interest
Unit Investment Trust:
Keytrust EB Managed Guaranteed
Investment Contract 6,657 924,943 1,049,550
___________ ___________
Preferred Stock:
Calenergy Capital Trust 1,000 48,000 50,000
Host Marriott 1,000 41,874 40,250
Sealed Air Corp 1,000 41,343 51,874
Westbridge Cap Corp 40 36,000 5,511
Microsoft Corp 500 45,000 48,876
Taylor Capital Group, Inc. 400 10,350 9,700
____________ ___________
Total Preferred Stock 222,567 206,211
____________ ___________
U.S. Government and Agencies Securities:
U.S. Treasury 67,000 64,741 75,333
Note Dated 8/15/94 - 7.25% Mat-8/15/2004
U.S. Treasury 100,000 105,063 104,563
Bond Dated 5/15/75 - 8.25% Mat-5/15/2005
FFCB 100,000 100,000 100,156
Note Dated 12/2/98 - 5.15% Mat-12/03/03
FHLB 50,000 50,375 50,469
Bond Dated 9/10/97 - 7.024% Mat-9/10/2007-99
FHLB 100,000 101,156 100,812
Bond Dated 8/20/97 - 7.3% Mat-8/20/2012-99
</TABLE>
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
ANNUAL REPORT SCHEDULES
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - CONTINUED
DECEMBER 31, 1998
TAX IDENTIFICATION NUMBER 31-0742926
PLAN NUMBER 001
<TABLE>
<CAPTION>
Column B Column C Column D Column E
_______________________________________ ______________________________________________________ ______________ ____________
Identity of Issue, Borrower Description of Investment, Including Collateral, Rate
Lessor of Similar Party of Interest, Maturity Date, Par on Maturity Date
U.S. Government and Agencies Securities Number of Shares Cost Current Value
_______________________________________ ______________________________________________________ ______________ _____________
<S> <C> <C> <C>
FHLB 75,000 75,000 75,539
Bond Dated 10/29/97 - 6.03% Mat-10/29/2002-99
FHLMC 90,000 89,986 90,084
Deb. Dated 8/26/98 - 6.0% Mat-8/26/2002-99
FHLMC 100,000 101,613 101,188
Deb. Dated 6/10/96 - 7.84% Mat-6/9/2006-99
FHLMC 75,000 76,688 76,055
Deb. Dated 7/05/96 - 7.86% Mat-7/6/2006
FHLMC 125,000 125,000 124,180
Deb. Dated 11/17/98 - 5.3% Mat-5/15/2002-2000
FHLMC 100,000 99,840 99,812
Deb. Dated 12/7/98 - 4.75% Mat-12/14/2001
FNMA 100,000 100,608 100,370
Note Dated 4/2/96 - 6.83% Mat-4/2/2003-1999
FNMA 100,000 101,750 101,700
Note Dated 10/11/96 - 7.42% Mat-10/12/2006-1999
FNMA 125,000 126,875 126,763
Note Dated 10/10/97 - 7.25% Mat-10/12/2012-1999
FNMA 100,000 99,750 103,460
Note Dated 2/13/98 - 6.27% Mat-2/13/2008-2003
FNMA 25,000 24,939 25,105
Note Dated 1/23/98 - 5.9% Mat-1/24/2003-2000
____________ ___________
Total U.S. Government and Agencies Securities 1,443,384 1,455,589
____________ ___________
Corporate Bonds:
AES 5,000 - 10.25% Mat-7/15/2006-01 5,200 5,425
Agricul Minerals & Chems 30,000 - 10.75% Mat-9/30/2003-98 31,613 30,651
Archibald Candy Corp 110,000 - 10.25% Mat-01/01/2004-01 118,937 111,650
Avatar Holdings, Inc. 50,000 - 7.00% Mat-04/01/2005-01 50,000 41,312
Avondate Mills, Inc. 70,000 - 10.25% Mat-5/1/2006-01 69,038 73,500
Caesars World, Inc. 50,000 - 8.3875% Mat-8/15/2002-97 51,624 50,250
Coinmach Corp 105,000 - 11.75% Mat-11/15/2005-00 114,581 114,597
Cole National Group 85,000 - 9.875% Mat-12/31/2006-01 88,363 89,250
Collins & Aikman Products 80,000 - 11.5% Mat-4/15/2006-01 89,600 83,400
Commercial Federal Corp 50,000 - 7.95% Mat-12/01/2006-01 50,000 49,500
Delco Remy 115,000 - 8.625% Mat-12/15/2007-02 118,306 117,151
Drypers Corp 100,000 - 10.25% Mat-6/15/2007-02 104,625 96,200
Dynacare, Inc. 40,000 - 10.75% Mat-1/15/2006-01 41,025 40,380
General Elec Cap 85,000 - 6.66% Mat-05/01/2018-1996 86,275 86,505
Giant Industries, Inc. 105,000 - 9% Mat-09/01/2007-02 108,544 102,837
GMAC 25,000 - 5.875% Mat-1/22/2003 24,916 25,235
Goldman Sachs 30,000 - 6.25% Mat-10/14/2003 29,814 30,402
Hayes Wheels Int Co 70,000 - 11.0% Mat-7/15/2006-01 76,125 77,791
Host Marriott Travel Plaza 105,000 - 9.5% Mat-5/15/2005-00 106,856 109,935
</TABLE>
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
ANNUAL REPORT SCHEDULES
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES-CONTINUED
DECEMBER 31, 1998
TAX IDENTIFICATION NUMBER 31-0742926
PLAN NUMBER 001
<TABLE>
<CAPTION>
Column B Column C Column D Column E
____________________________ ______________________________________________________ ____________ _____________
Identity of Issue, Borrower Description of Investment, Including Collateral, Rate
Lessor of Similar Party of Interest, Maturity Date, Par on Maturity Date
Corporate Bonds Number of Shares Cost Current Value
____________________________ ______________________________________________________ _____________ ______________
<S> <C> <C> <C>
Keebler Corp 90,000 - 10.75% Mat-7/01/2006-01 101,138 98,091
Key Energy Services 25,000 - 5% Mat-09/15/2004-00 21,500 11,156
L-3 Communications 120,000 - 8.5% Mat-5/15/2008 119,916 125,100
Mark IV Industries, Inc. 50,000 - 4.75% Mat-11/1/2004-00 50,000 40,310
Maxxim Medical, Inc. 100,000 - 10.5% Mat-08/01/2006-01 107,944 107,750
Moog, Inc. 55,000 - 10.0% Mat-5/1/2006-01 55,605 55,198
Nabi, Inc. 40,000 - 6.5% Mat-2/1/2003-99 39,000 24,850
Navistar Internatl Corp 35,000 - 8.% Mat-2/1/2008-03 35,044 35,658
Newport News Shipbuilding Co. 105,000 - 9.25% Mat-12/1/2006-01 109,725 111,888
Novacare, Inc. 50,000 - 5.5% Mat-1/15/2000-96 45,006 35,405
Nuevo Energy Co 65,000 - 9.5% Mat-4/15/2006-01 65,675 63,700
Outdoor Systems, Inc. 70,000 - 9.325% Mat-10/15/2006-01 71,750 75,866
Owens & Minor, Inc. 70,000 - 10.875% Mat-6/1/2006-01 72,956 74,585
Park Ohio Industries 110,000 - 9.25% Mat-12/1/2007-2002 116,875 112,475
Parker Drilling Co. 50,000 - 5.5% Mat-8/1/2004-2000 47,469 30,816
Premier Parks 35,000 - 9.75% Mat-1/14/2007-02 35,641 38,192
Quantum Health Res., Inc. 50,000 - 4.75% Mat-10/1/2000-95 46,125 42,812
Quest Diagnostics, Inc. 80,000 - 10.75% Mat-12/15/2006-01 84,187 88,704
Scotsman Group, Inc. 105,000 - 8.625% Mat-12/15/2007-2002 107,231 102,837
Slater Brothers 50,000 - 11.0% Mat-3/1/2001 50,312 52,235
Swift Energy Co. 50,000 - 6.25% Mat-11/15/2005-99 46,438 40,440
Tekni-Flex, Inc. 105,000 - 11.25% Mat-4/1/2007-2002 116,956 115,962
_____________ _______________
Total Corporate Bonds 2,911,935 2,820,001
_____________ _______________
Money Market Fund:
First National Bank of Omaha 2,516,760 units 2,516,760 2,516,760
_____________ _______________
Participant Loans Participant loans bearing various dates & interest
rates - 507,951
_____________ _______________
Total Investments $ 15,326,426 $ 17,577,476
============= ===============
</TABLE>
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
ANNUAL REPORT SCHEDULES
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - CONTINUED
DECEMBER 31, 1998
TAX IDENTIFICATION NUMBER 31-0742926
PLAN NUMBER 001
<TABLE>
<CAPTION>
Column B Column C Column D Column E
____________________________ ______________________________________________________ __________ ______________
Identity of Issue, Borrower Description of Investment, Including Collateral, Rate
Lessor of Similar Party of Interest, Maturity Date, Par on Maturity Date
Corporate Bonds Number of Shares Cost Current Value
___________________________ ______________________________________________________ __________ _______________
<S> <C> <C> <C>
Participant Loans Participant loans bearing various dates &
Interest rates - -
========== ==============
</TABLE>
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
ANNUAL REPORT SCHEDULES
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 1998
TAX IDENTIFICATION NUMBER 31-0742926
PLAN NUMBER 001
Series Transactions, When Aggregated, Involving an Amount in Excess of 5
Percent of the Current Value of Plan Assets
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F Column G
_____________ ___________ ___________ __________ _____________ _____________ _________
<S> <C> <C> <C> <C> <C> <C>
Identity of Description Number Number Total Total
Party of of of Dollar Value Dollar Value Net
Involved Assets Purchases Sales of Purchases of Sales Change
First National Money
Bank of Market
Omaha Funds Various Various $ 13,867,113 $ 12,516,079 $1,351,034
SPDR TR Unit
Unit Seri Trust 5 4 $ 363,052 $ 988,037 $ 624,985
</TABLE>
<PAGE>
TIGHE, MASSMAN & NELSON, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
13310 "I" Street
Omaha, Nebraska 68137
(402) 330-7099
FAX (402) 330-0809
J. William Tighe, C.P.A. (1930-1989)
Michael L. Massman, C.P.A.
George E. Nelson, C.P.A.
Dean M. Broich, C.P.A.
James A. Reinig, C.P.A.
_______
G. Michael Gillain
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the registration statement on
Form S-8 of Acceptance Insurance Companies Inc. relating to the Acceptance
Insurance Companies Inc. Employee Stock Ownership and Tax Deferred Savings
Plan of our report dated June 2, 1999, appearing in this Annual Report on Form
11-K of the Acceptance Insurance Companies Inc. Employee Stock Ownership and
Tax Deferred Savings Plan for the year ended December 31, 1998.
/s/ Tighe, Massman & Nelson, P.C.
Certified Public Accountants
Omaha, Nebraska
June 3, 1999
