================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ________ to ________
Commission File Number: 0-15286
CHANDLER INSURANCE COMPANY, LTD.
(Exact name of registrant as specified in its charter)
Cayman Islands None
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5th Floor Anderson Square N/A
P.O. Box 1854 (Zip Code)
Grand Cayman, Cayman Islands B.W.I.
(Address of principal executive offices)
Registrant's telephone number, including area code: 809-949-8177
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
----- -----
The number of Common Shares, $1.67 par value, of the registrant outstanding
on July 31, 1996 was 6,941,708. This excludes 567,350 Common Shares owned by
Chandler (U.S.A.), Inc., a subsidiary of registrant, which are eligible to vote.
================================================================================
<PAGE>
<PAGE>
PAGE 2
CHANDLER INSURANCE COMPANY, LTD.
INDEX
PART I - Financial Information
==============================
Item 1
- ------
Consolidated Statements of Operations for
the three months ended June 30, 1996 and 1995.............................3
Consolidated Statements of Operations for
the six months ended June 30, 1996 and 1995...............................4
Consolidated Balance Sheets as of June 30, 1996
and December 31, 1995.....................................................5
Consolidated Statements of Cash Flows for the six
months ended June 30, 1996 and 1995.......................................6
Notes to Interim Consolidated Financial Statements.............................7
Item 2
- ------
Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................................9
PART II - Other Information
===========================
Item 1 Legal Proceedings..................................................12
Item 2 Changes in Securities..............................................12
Item 3 Defaults Upon Senior Securities....................................12
Item 4 Submission of Matters to a Vote of Security Holders................12
Item 5 Other Information..................................................12
Item 6 Exhibits and Reports on Form 8-K...................................12
Signatures....................................................................13
<PAGE>
<PAGE>
CHANDLER INSURANCE COMPANY, LTD. PAGE 3
Consolidated Statements of Operations
(Unaudited)
(Amounts in thousands except per share data)
<TABLE>
<CAPTION>
For the three months
ended June 30,
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
Premiums and other revenues
Direct premiums written and assumed.................$ 24,771 $ 20,334
Reinsurance premiums ceded.......................... (2,646) (3,167)
---------- ----------
Net premiums written and assumed................. 22,125 17,167
(Increase) decrease in unearned premiums............ (190) 2,299
---------- ----------
Net premiums earned.............................. 21,935 19,466
Net investment income.................................. 1,826 1,935
Commissions, fees and other income..................... 1,130 862
---------- ----------
Total revenues................................... 24,891 22,263
---------- ----------
Operating costs and expenses
Losses and loss adjustment expenses................. 13,456 12,220
Policy acquisition costs............................ 8,313 5,680
General and administrative expenses................. 3,490 3,301
Litigation expenses................................. 140 71
---------- ----------
Total operating expenses......................... 25,399 21,272
---------- ----------
Income (loss) before income taxes...................... (508) 991
Federal income tax benefit of
consolidated U.S. subsidiaries...................... 775 2
---------- ----------
Net income.............................................$ 267 $ 993
========== ==========
Net income per share...................................$ 0.04 $ 0.14
Weighted average common shares and common
share equivalents outstanding....................... 6,942 6,942
</TABLE>
See accompanying Notes to Interim Consolidated Financial Statements.
<PAGE>
<PAGE>
CHANDLER INSURANCE COMPANY, LTD. PAGE 4
Consolidated Statements of Operations
(Unaudited)
(Amounts in thousands except per share data)
<TABLE>
<CAPTION>
For the six months
ended June 30,
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
Premiums and other revenues
Direct premiums written and assumed.................$ 45,988 $ 43,254
Reinsurance premiums ceded.......................... (6,055) (7,885)
---------- ----------
Net premiums written and assumed................. 39,933 35,369
Decrease in unearned premiums....................... 3,047 3,193
---------- ----------
Net premiums earned.............................. 42,980 38,562
Net investment income.................................. 3,700 3,862
Commissions, fees and other income..................... 2,000 1,639
---------- ----------
Total revenues................................... 48,680 44,063
---------- ----------
Operating costs and expenses
Losses and loss adjustment expenses................. 26,811 24,381
Policy acquisition costs............................ 14,445 11,205
General and administrative expenses................. 7,261 6,613
Litigation expenses................................. 207 530
---------- ----------
Total operating expenses......................... 48,724 42,729
---------- ----------
Income (loss) before income taxes...................... (44) 1,334
Federal income tax benefit
of consolidated U.S. subsidiaries................... 974 272
---------- ----------
Net income.............................................$ 930 $ 1,606
========== ==========
Net income per share...................................$ 0.13 $ 0.23
Weighted average common shares and common
share equivalents outstanding....................... 6,942 6,942
</TABLE>
See accompanying Notes to Interim Consolidated Financial Statements.
<PAGE>
<PAGE>
CHANDLER INSURANCE COMPANY, LTD. PAGE 5
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
<S> <C> <C>
ASSETS
Investments
Fixed maturities available for sale,
at estimated fair value........................$ 96,679 $ 108,096
Fixed maturities held to maturity, at
amortized cost (estimated fair value $3,751
and $6,147 in 1996 and 1995, respectively)..... 3,664 5,941
------------ ------------
Total investments.............................. 100,343 114,037
Cash and cash equivalents............................ 11,771 8,524
Premiums receivable, less allowance for
non-collection of $197 and $177
at 1996 and 1995, respectively.................... 32,235 35,058
Reinsurance recoverable on paid losses, less
allowance for non-collection of $390 and
$307 at 1996 and 1995, respectively............... 3,980 4,485
Reinsurance recoverable on unpaid losses,
less allowance for non-collection of $0 and
$307 at 1996 and 1995, respectively............... 42,063 46,777
Prepaid reinsurance premiums......................... 4,488 5,170
Deferred policy acquisition costs.................... 3,986 3,800
Property and equipment, net.......................... 6,057 6,188
Other assets......................................... 10,460 10,617
Licenses, net........................................ 4,568 4,643
Excess of cost over net assets acquired, net......... 6,224 6,517
Covenants not to compete, net........................ 993 1,133
------------ ------------
Total assets.........................................$ 227,108 $ 246,949
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Unpaid losses and loss adjustment expenses........$ 117,427 $ 128,794
Unearned premiums................................. 27,552 31,280
Policyholder deposits............................. 4,248 4,484
Accrued taxes and other payables.................. 4,261 5,969
Premiums payable.................................. 2,183 2,972
------------ ------------
Total liabilities.............................. 155,671 173,499
------------ ------------
Shareholders' equity
Common stock, $1.67 par value, 10,000,000 shares
authorized, 7,509,058 shares issued............ 12,540 12,540
Paid-in surplus................................... 36,143 36,143
Retained earnings................................. 26,856 25,926
Unrealized gain (loss) on investments
available for sale, net of tax................. (1,954) 989
Less: Stock held by subsidiary, at cost
(567,350 shares)............................... (2,148) (2,148)
------------ ------------
Total shareholders' equity..................... 71,437 73,450
------------ ------------
Total liabilities and shareholders' equity...........$ 227,108 $ 246,949
============ ============
</TABLE>
See accompanying Notes to Interim Consolidated Financial Statements.<PAGE>
<PAGE>
CHANDLER INSURANCE COMPANY, LTD. PAGE 6
Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in thousands)
<TABLE>
<CAPTION>
For the six months
ended June 30,
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income.............................................$ 930 1,606
Add (deduct):
Adjustments to reconcile net income
to cash applied to operations:
Net realized gains on sales of investments....... (114) (2)
Net (gains) losses on sales of equipment......... (6) 9
Amortization and depreciation.................... 1,180 1,085
Provision for non-collection of premiums......... 116 (8)
Provision for non-collection of
reinsurance recoverables...................... 1,340 200
Net change in non-cash balances relating
to operations:
Premiums receivable........................... 2,708 (44)
Reinsurance recoverable on paid losses........ (836) 28
Reinsurance recoverable on unpaid losses...... 4,714 4,817
Prepaid reinsurance premiums.................. 682 7
Deferred policy acquisition costs............. (186) 756
Other assets.................................. 1,238 3,363
Unpaid losses and loss adjustment expenses.... (11,367) (17,599)
Unearned premiums............................. (3,728) (3,201)
Policyholder deposits......................... (236) (848)
Accrued taxes and other payables.............. (1,708) (986)
Premiums payable.............................. (789) (188)
---------- ----------
Cash applied to operations....................... (6,062) (11,005)
---------- ----------
INVESTING ACTIVITIES:
Short-term investments
Purchases........................................ - (12,436)
Maturities....................................... - 12,500
Fixed maturities available for sale
Purchases........................................ (13,573) (2,378)
Sales............................................ 12,340 -
Maturities....................................... 8,546 1,034
Fixed maturities held to maturity
Purchases........................................ - (35)
Maturities....................................... 2,300 10,586
Cost of property and equipment purchased............... (311) (506)
Proceeds from sale of property and equipment........... 27 97
Other.................................................. (20) -
---------- ----------
Cash provided by investing activities............... 9,309 8,862
---------- ----------
Increase (decrease) in cash and cash
equivalents during the period....................... 3,247 (2,143)
Cash and cash equivalents at beginning of period....... 8,524 8,420
---------- ----------
Cash and cash equivalents at end of period.............$ 11,771 6,277
========== ==========
</TABLE>
See accompanying Notes to Interim Consolidated Financial Statements.<PAGE>
<PAGE>
CHANDLER INSURANCE COMPANY, LTD. PAGE 7
Notes To Interim Consolidated Financial Statements
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. They do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements.
However, except as disclosed herein, there have been no material changes in the
information included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1995. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation have been included. The results of operations for the three and
six month periods ended June 30, 1996 are not necessarily indicative of the
results that may be expected for the year.
The consolidated financial statements include the accounts of Chandler Insurance
Company, Ltd. ("Chandler" or "the Company") and subsidiaries including:
- Chandler Insurance (Barbados), Ltd. ("Chandler Barbados") and
NAICO Indemnity (Cayman), Ltd., wholly owned subsidiaries of the Company.
- Chandler (U.S.A.), Inc., a wholly owned subsidiary of Chandler Barbados.
- National American Insurance Company ("NAICO") and LaGere & Walkingstick
Insurance Agency, Inc. ("L&W") and Network Administrators, Inc.
("Network"), wholly owned subsidiaries of Chandler (U.S.A.), Inc.
All significant intercompany accounts and transactions have been eliminated in
consolidation.
Accounting Pronouncements
SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of" establishes accounting standards for such assets.
SFAS 123, "Accounting for Stock-Based Compensation" establishes a fair value
method and disclosure standards for stock-based employee compensation
arrangements, such as stock purchase plans and stock options. As allowed by
SFAS 123, the Company will continue to follow the provisions of Accounting
Principles Board Opinion 25 for such stock-based compensation arrangements and
disclose the proforma effects of applying SFAS 123, if any, in the financial
statements. The Company adopted these new standards effective January 1, 1996,
the required effective date. The adoption of these standards had no material
impact on the Company's financial position, results of operations or related
disclosures to the Notes to Consolidated Financial Statements.
NOTE 2 - LITIGATION
In the Company's Annual Report on Form 10-K for the year ended December 31,
1995, various matters in litigation were described. In Item 3 and Item 12 of
such Form 10-K, the Company reported that on December 1, 1995 the Nebraska
Supreme Court had upheld a ruling by a lower court denying the CenTra Group's
attempt to obtain control of NAICO. On April 3, 1996 the CenTra Group filed a
Petition for Writ of Certiorari in the United States Supreme Court requesting
that court to assume jurisdiction to review the Nebraska Supreme Court
decision. On May 13, 1996 the U.S. Supreme Court denied the Petition for Writ
of Certiorari.
<PAGE>
<PAGE>
PAGE 8
On June 27, 1996, the Company filed a report on Form 8-K reporting a dispute
with Midwest Indemnity Corporation ("Midwest"). On May 24, 1996 Midwest, a
Skokie, Illinois based surety bond producer made a demand upon NAICO for binding
arbitration of certain claims against NAICO. The claims are allegedly based
upon a contractual relationship dating back to 1987 and accused NAICO of
liabling Midwest and attempting to wrongfully appropriate business belonging to
Midwest. In the arbitration demand Midwest alleges its corporate value has been
diminished by approximately $20 million and that security it gave NAICO in the
form of a letter of credit in the face amount of $200,000 and a surety bond
issued by Century Surety Company with the remaining penal sum of $1,500,000
should be released. On June 20, 1996 NAICO filed a lawsuit in state court in
Chandler, Oklahoma against Midwest and certain affiliates seeking a stay of the
arbitration and asserting claims against Midwest for debts owed to NAICO, breach
of fiduciary duty by Midwest and certain of its officers, various declaratory
judgements and seeking further relief in connection with those claims. The
state court granted an immediate temporary restraining order staying the
requested arbitration pending further hearing. On June 25, 1996 the action was
removed to U.S. District Court in Oklahoma City, Oklahoma. No hearing date has
been set.
On June 17, 1996 Century Surety Company filed an action in the Common Pleas
Court of Cuyahoga County, Ohio against NAICO and Midwest alleging that the bond
which it had given to NAICO to secure Midwest's obligations to NAICO is void and
requesting cancellation of the bond. On July 30, 1996 the action was removed to
U.S. District Court in Cleveland, Ohio.
Midwest currently owes NAICO approximately $7.2 million related to a commission
arrangement contingent on the loss experience on the NAICO/Midwest Surety Bond
Program. Pursuant to NAICO's agreement with Midwest, the obligation is to be
reduced by $1.5 million during the remainder of 1996 with the balance due in
January, 1997. In addition, Midwest owes approximately $553,000 for premiums it
collected in 1995 and 1996 but which have not been paid to NAICO. NAICO intends
to seek payment of all amounts due and believes a reserve for non-collection is
not necessary at June 30, 1996.
In Item 8, Item 10 and Note 10 of the Company's Annual Report on Form 10-K for
the year ended December 31, 1995 a contingency relating to reinsurance
arbitration among NAICO, New York Life Insurance Company, Security Benefit Life
Insurance Company and Standard Insurance Company (the "reinsurers") was
discussed. On May 23, 1996 an arbitration award was made against the reinsurers
and in favor of NAICO but for an amount less than had been expected. The
Company took an after-tax charge of approximately $800,000 to offset the smaller
than expected award. A final award was made by the arbitration panel on July
19, 1996 but on July 30, 1996 the reinsurers requested that the arbitrators
reconsider the award and, accordingly, have not yet paid the amounts ordered to
be paid under the award. On August 9, 1996 NAICO filed suit in the U.S.
District Court for the District of Nebraska against the reinsurers to enforce
the arbitration award.
<PAGE>
<PAGE>
PAGE 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net Premiums Earned
The following table sets forth net premiums earned for each of the three and six
month periods ended June 30, 1996 and 1995:
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30, ended June 30,
---------------------- ----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
(In thousands)
<S> <C> <C> <C> <C>
Standard property-casualty........$ 8,933 $ 6,826 $ 17,200 $ 12,888
Non-standard private
passenger automobile........... 4,758 3,922 8,592 7,461
Political subdivisions............ 3,458 2,646 6,943 5,497
Surety bonds...................... 2,428 3,843 4,252 7,528
Transportation.................... 596 970 1,124 2,227
Other............................. 1,762 1,259 4,869 2,961
---------- ---------- ---------- ----------
TOTAL..............$ 21,935 $ 19,466 $ 42,980 $ 38,562
========== ========== ========== ==========
</TABLE>
Net premiums earned increased 13% and 11% in the quarter and six months ended
June 30, 1996 compared to the prior year periods.
Net premiums earned in the standard property-casualty program increased 31% and
33% in the three and six months ended June 30, 1996, respectively, versus the
prior year. Net premiums earned for workers compensation accounted for $1.2
million and $2.4 million of the respective increases while other property-
casualty coverages accounted for the balance. The increases are primarily
attributable to continued expansion in Oklahoma and surrounding states.
Net premiums earned in the political subdivisions program increased 31% and 26%
in the current quarter and first six months of 1996 compared to the year ago
periods. The expansion of the municipalities portion of the program to include
workers compensation, the addition of property-casualty coverages for Oklahoma
counties in mid-1995 and continued expansion in Oklahoma accounted for most of
the increases.
Net premiums earned in the surety bond program decreased 37% and 44% in the
three and six months ended June 30, 1996 compared to the year ago periods.
NAICO and Midwest, the underwriting manager for a large portion of the surety
bond program, agreed to terminate the underwriting and production contract
effective December 31, 1995. See Note 2 -Litigation - to the Notes to Interim
Consolidated Financial Statements regarding certain legal proceedings involving
Midwest. Net premiums earned from surety bonds produced by LaGere &
Walkingstick Insurance Agency, Inc. ("L&W") increased to $1.4 million in the
current quarter and $2.6 million in the first six months of 1996 compared to
$819,000 and $1.9 million in the respective 1995 periods.
Net premiums earned from the nonstandard private-passenger automobile programs
increased 21% and 15% for the quarter and six months ended June 30, 1996
compared to the year ago periods. Increased premium volume from the California
portion of the program accounted for most of the increase and was partially
offset by a decrease in premium volume for the Arizona portion of the program.
<PAGE>
<PAGE>
PAGE 10
Net premiums earned from direct assignments of workers compensation policies
and participation in certain voluntary and involuntary pools ("Pools") covering
workers compensation were $1.3 million and $3.8 million in the three and six
month periods ended June 30, 1996 compared to $1.3 million and $3.2 million in
the year ago periods. The increase for the first six months is primarily
attributable to increased activity from the Pools.
Commissions, Fees and Other Income
Brokerage commissions and fees before intercompany eliminations were $1.7
million and $3.5 million in the second quarter and first six months of 1996
compared to $1.6 million and $3.4 million in the year ago periods. A large
portion of the brokerage commissions and fees for L&W is incurred by National
American Insurance Company ("NAICO") and thus eliminated in the consolidation of
the Company's subsidiaries.
Commissions and fees generated by Network Administrators, Inc. ("Network") were
$186,000 and $337,000 in the current quarter and first six months of 1996.
Network is a third-party administrator of partially self-insured group accident
and health plans. Network was acquired by the Company in the fourth quarter of
1995.
Chandler (U.S.A.), Inc. received a settlement of approximately $343,000 during
the second quarter of 1996 from a legal firm which is reflected as other income.
Losses and Loss Adjustment Expenses
The percentage of losses and loss adjustment expenses to net premiums earned was
61.3% and 62.4% for the three and six months ended June 30, 1996, respectively,
compared to 62.8% and 63.2% in the 1995 periods.
Policy Acquisition Costs
Policy acquisition costs as a percentage of net premiums earned were 37.9% and
33.6% for the current quarter and first six months of 1996 compared to 29.2% and
29.1% in the year ago periods. In the second quarter of 1996, NAICO concluded
an arbitration process with three reinsurers of its truckers workers
compensation program relating to business written from 1988 through 1991. NAICO
received an arbitration award that was $1.1 million smaller than expected. The
arbitration result increased policy acquisition costs as a percentage of net
premiums earned by 5.1 and 2.5 percentage points in the three and six months
ended June 30, 1996.
General and Administrative Expenses
General and administrative expenses were 15% and 16% of revenues exclusive of
net investment income for the three and six month periods ended June 30, 1996
compared to 16% in each of the respective 1995 periods. The Company incurred
expenses totaling $270,000 and $493,000 in the respective 1996 periods related
to the reinsurance arbitration discussed above.
General and administrative expenses have historically not varied in direct
proportion to the Company's revenues. A portion of such expenses is allocated
to policy acquisition costs and loss and loss adjustment expenses based on
various factors including employee counts, salaries, occupancy and specific
identification.
<PAGE>
<PAGE>
PAGE 11
Liquidity and Capital Resources
The Company used $6.1 million of cash in operations in the first six months of
1996 compared to $11.0 million in the first half of 1995. These uses of cash
generally reflect the reductions in premium volume from earlier years and the
payment of losses and loss adjustment expenses incurred in those years. The
Company sold $12.3 million of fixed-income securities available for sale prior
to their maturities in the first half of 1996. The Company sold no fixed-income
securities prior to their maturities during the same period in the prior year.
Litigation Expenses
In 1992, the Company became involved in certain legal proceedings beyond the
ordinary course of business. These proceedings generally involve CenTra, Inc.,
a shareholder, and certain of its affiliates ("CenTra"). The Company does not
expect a resolution of these legal proceedings in the near future, and
accordingly expects to incur additional legal costs in future periods. Due to
the inherent uncertainties of such legal proceedings and the unpredictability of
CenTra's future actions, the Company cannot predict the outcome of such
litigation with certainty or the rate at which such defense and litigation costs
will be incurred in the future.
Income Tax Provision
The provision for or benefit from federal income taxes of the consolidated U.S.
subsidiaries varies with the level of income or loss before income taxes of such
subsidiaries. The provision or benefit relative to the consolidated income
before income taxes will also vary dependent on the contribution to income
before income taxes by the consolidated U.S. subsidiaries.
The income tax benefit resulting from the reinsurance arbitration and related
expenses described above was $468,000 and $528,000 in the three and six months
ended June 30, 1996.
<PAGE>
<PAGE>
PAGE 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
In response to this item, the Company incorporates by reference to Note
2 - Litigation - to its Interim Consolidated Financial Statements contained
elsewhere in this report.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
In June 1996, NAICO received notification that A.M. Best Company has raised
NAICO's rating from "B++ (Very Good)" to "A- (Excellent)". A.M. Best
Company's ratings range from the highest rating of "A++ (Superior)" to the
lowest rating of "F (In Liquidation)". These ratings are an independent
opinion of a company's financial strength, operating performance and ability
to meet its obligations to policyholders.
Item 6. Exhibits and Reports on Form 8-K
The Company filed one current report on Form 8-K, dated June 28, 1996, during
the second quarter of 1996 responding to Item 5 of Form 8-K.
<PAGE>
<PAGE>
PAGE 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 13, 1996 CHANDLER INSURANCE COMPANY, LTD.
By: /s/ Brent LaGere
--------------------------------
Brent LaGere
Chairman of the Board of
Directors and Chief Executive
Officer
(Principal Executive Officer)
By: /s/ Mark T. Paden
--------------------------------
Mark T. Paden
Vice President - Finance and
Chief Financial Officer
(Principal Accounting and
Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
This schedule contains summary financial information extracted from Chandler
Insurance Company, Ltd.'s June 30, 1996 Form 10-Q and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<DEBT-HELD-FOR-SALE> 96,679
<DEBT-CARRYING-VALUE> 3,664
<DEBT-MARKET-VALUE> 3,751
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 100,343
<CASH> 11,771
<RECOVER-REINSURE> 3,980
<DEFERRED-ACQUISITION> 3,986
<TOTAL-ASSETS> 227,108
<POLICY-LOSSES> 117,427
<UNEARNED-PREMIUMS> 27,552
<POLICY-OTHER> 4,248
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
0
<COMMON> 12,540
<OTHER-SE> 58,897
<TOTAL-LIABILITY-AND-EQUITY> 227,108
42,980
<INVESTMENT-INCOME> 3,586
<INVESTMENT-GAINS> 114
<OTHER-INCOME> 2,000
<BENEFITS> 26,811
<UNDERWRITING-AMORTIZATION> 14,445
<UNDERWRITING-OTHER> 7,468
<INCOME-PRETAX> (44)
<INCOME-TAX> (974)
<INCOME-CONTINUING> 930
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 930
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
