<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: June 30, 1996
Commission file number: 0-16332
NATIONAL INSURANCE GROUP
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-3031790
(State of Incorporation) (IRS Employer Identification No.)
395 OYSTER POINT BOULEVARD, SUITE 500 SOUTH SAN FRANCISCO, CA 94080
(Address of principal executive office) (Zip Code)
(415) 872-6772
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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 XX No
---- ----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: 4,702,197 shares as
of June 30, 1996.
<PAGE> 2
NATIONAL INSURANCE GROUP
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION PAGE
<S> <C>
Item 1 - Financial Statements:
Consolidated Balance Sheets-June 30, 1996 and
December 31, 1995 1
Consolidated Statements of Earnings for the six-
month period ended June 30, 1996
and 1995 2
Consolidated Statements of Shareholders' Equity
for six months ended June 30, 1996 and 1995 3
Consolidated Statements of Cash Flows for the
six months ended June 30, 1996 and 1995. 4
Notes to Consolidated Financial Statements 5
Item 2 - Management's Discussion and Analysis of Financial Condition and Operating
Results 6-10
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings None
Item 2 - Changes in Securities None
Item 3 - Defaults Upon Senior Securities None
Item 4 - Submission of Matters to a Vote of Security Holders None
Item 5 - Other Information 11
Item 6 - Exhibits and Reports on Form 8-K:
Reports on Form 8-K None
Exhibit 11 - Computation of Weighted
Average Shares Outstanding and Earnings
Per Share 12
</TABLE>
<PAGE> 3
NATIONAL INSURANCE GROUP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
For the periods ended June 30, 1996 and December 31, 1995
(in thousands of dollars, except share amounts)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- ------------
(unaudited)
<S> <C> <C>
ASSETS:
Fixed maturities $19,931 $21,130
Equity securities 2,190 2,271
Short-term investments 13,866 13,801
------- -------
Total investments 35,987 37,202
------- -------
Cash 509 133
Net Premiums and
accounts receivable 5,624 5,219
Property and equipment, net 3,360 4,068
Deferred acquisition costs 2,239 2,624
Deferred federal income taxes 1,867 1,994
Other assets 2,228 856
------- -------
Total assets $51,814 $52,096
======= =======
LIABILITIES:
Reserve for losses and LAE $ 3,104 $ 3,055
Unearned premiums 4,867 5,703
Accrued expenses and other
liabilities 6,779 4,286
Drafts payable 424 421
Reserve for return premiums 1,699 1,216
Reserve for Proposition 103 2,636 4,534
------- -------
Total liabilities $19,509 $19,215
------- -------
SHAREHOLDERS' EQUITY:
Common Stock, no par value;
authorized, 15,000,000 shares;
issued and outstanding 4,702,197
in 1996 and 4,679,697 in 1995 23,259 23,071
Retained earnings 9,046 9,810
------- -------
Total shareholders' equity $32,305 $32,881
------- -------
Total liabilities and
shareholders' equity $51,814 $52,096
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE> 4
NATIONAL INSURANCE GROUP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
For the periods ended June 30, 1996 and 1995
(in thousands of dollars, except share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Second Quarter Six Months
------------------------------ -------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net premiums written $ 3,235 $ 3,042 $ 6,005 $ 6,693
Change in unearned premiums (180) 888 836 1,705
----------- ----------- ----------- -----------
Net premiums earned 3,055 3,930 6,841 $ 8,398
Flood inquiry fees 5,160 2,457 9,591 4,176
Loan Tracking fees 1,305 1,232 2,522 2,229
Net commission income 122 309 599 507
Net investment income 490 506 1,002 1,016
----------- ----------- ----------- -----------
TOTAL REVENUES $ 10,132 $ 8,434 $ 20,555 $ 16,326
----------- ----------- ----------- -----------
Loss and LAE incurred 1,565 1,677 2,672 3,550
Commissions paid to
non-affiliates 568 1,315 1,260 1,995
Personnel expenses 5,018 4,236 10,160 7,566
All other expenses 4,331 3,482 7,579 5,828
Non-recurring expense 0 4,100 0 4,100
----------- ----------- ----------- -----------
TOTAL EXPENSES $ 11,482 $ 14,810 $ 21,671 $ 23,039
----------- ----------- ----------- -----------
Loss before provision
for income taxes (1,350) (6,376) (1,116) (6,713)
Benefit for income taxes (493) (2,040) (408) (2,148)
----------- ----------- ----------- -----------
NET LOSS $ (857) $ (4,336) (708) $ (4,565)
----------- ----------- ----------- -----------
Weighted average common and
common equivalent shares
outstanding 4,679,942 4,678,729 4,691,008 4,678,729
=========== =========== =========== ===========
Per share results:
Net income (loss) per share $ (.18) $ (.93) $ (.15) $ (.98)
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 5
NATIONAL INSURANCE GROUP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the six months ended June 30, 1996 and 1995
(in thousands of dollars, except share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Total
Common Stock Share-
------------------------ Retained Holders'
Shares Amount Earnings Equity
--------- ------ -------- --------
<S> <C> <C> <C> <C>
Balance at
Dec. 31, 1994 4,678,729 $ 23,066 $ 14,224 $ 37,290
Net Loss -- -- (4,565) (4,565)
Unrealized gain, net
of deferred tax -- -- 139 139
--------- --------- --------- ---------
Balance at
June 30, 1995 4,678,729 $ 23,066 $ 9,798 $ 32,864
========= ========= ========= =========
Balance at
Dec. 31, 1995 4,679,697 $ 23,071 $ 9,810 $ 32,881
Options Exercised: 22,500 149 -- 149
Accelerated Vesting: -- 39 39
Net loss -- -- (710) (710)
Unrealized loss,
net of deferred tax -- -- (54) (54)
--------- --------- --------- ---------
Balance at
June 30, 1996 4,702,197 $ 23,259 $ 9,046 $ 32,305
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 6
NATIONAL INSURANCE GROUP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the periods ending June 30, 1996 and 1995
(in thousands of dollars, except share amounts)
(Unaudited)
<TABLE>
<CAPTION>
June 30, June 30,
1996 1995
------- -------
<S> <C> <C>
Increase (Decrease) in cash
Net cash used in
operating activities $(1,098) $(2,499)
Net cash provided by
investing activities 1,310 2,722
Net cash provided by
financing activities 164 --
------- -------
Increase in cash 376 223
Cash, beginning of period 133 155
------- -------
Cash, end of period $ 509 $ 378
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 7
NATIONAL INSURANCE GROUP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Financial Information
In the opinion of management, the financial information reflects all
adjustments which are necessary to a fair presentation of financial
position and results of operations for the interim periods. The results
for the six month periods ended June 30, 1996 and June 30, 1995, are not
necessarily indicative of the results to be expected for the entire
year.
2. Change of Control
Pursuant to an Option and Stock Purchase Agreement entered into on May
1, 1996, between Howard L. Herman, a founder and former director of the
Company, and certain of Mr. Herman's relatives, and Mark A. Speizer, it
was agreed that 824,295 shares of Common Stock of the Company (the
"Herman shares") would be sold to Mr. Speizer. 788,795 of the Herman
Shares were purchased on May 31, 1996 and the remaining shares were
purchased on June 18, 1996. Mr. Speizer now beneficially owns
approximately 41% of the outstanding shares of the Company's stock.
At the annual meeting of shareholders held on July 11, 1996, the slate
of directors nominated by the Board of Directors was elected. Following
the annual meeting, Mr. Speizer was elected Chairman of the Board and
Chief Executive Officer of the Company and each of Great Pacific
Insurance Company, Fastrac Systems, Inc. Insurance Agent & Broker,
Fastrac Systems, Inc., and Pinnacle Data Corporation, the Company's
wholly owned subsidiaries through which the Company carries out its
business activities.
3. Executive Retention Agreements
During the second quarter the Company's Board of Directors approved
retention agreements for various executives in order to ensure their
continued employment through the transition period following the change
of control of the Company (as disclosed in note 2). The aggregate
expense for the quarter under these agreements was $1,380,758.
4. Reclassification
For comparative purposes, certain prior year amounts have been
reclassified to conform to the current year presentation. Such
reclassifications had no impact on the net loss or shareholders'
equity.
These quarterly interim financial statements are unaudited.
5
<PAGE> 8
NATIONAL INSURANCE GROUP AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Operating Results
Item 2
Results of Operations
SECOND QUARTER OF 1996 COMPARED WITH SECOND QUARTER OF 1995:
Revenue
Total revenue for the second quarter increased from $8.4 million in 1995 to
$10.1 million in 1996, an increase of $1.7 million or 20.2%.
Net premiums written for the second quarter increased from $3.0 million in
1995 to $3.2 million in 1996, an increase of $200,000 thousand or 6.7%.
Net premiums earned for the second quarter decreased from $3.9 million in
1995 to $3.1 million in 1996, a decrease of $800,000 or 20.5%. Premium revenue
is earned ratably over a twelve month period. Consequently, premiums earned are
impacted by the business written over the prior twelve months and further
impacted by cancellations on the same premiums. As a result of those
calculations, the change in unearned premiums for the second quarter of 1996 was
a reduction in revenue recognized and an increase in deferred revenue of
$180,000 compared to an increase in revenue of $888,000 for the second quarter
of 1995.
Flood inquiry fees for the second quarter increased from $2.5 million in
1995 to $5.2 million in 1996, an increase of $2.7 million or 108%. The addition
of five major new customers since the second quarter of 1995 accounted for $1.3
million of the increase. Interest rates have remained favorable with loan
origination volumes generally increasing with existing customers. In addition,
the Company has converted many of its existing customers to the higher priced
life-of-loan product as the industry complies with federal regulations.
Tracking fees for the second quarter increased from $1.2 million in 1995 to
$1.3 million in 1996, an increase of $100,000 or 8.3%.
Net investment income for the second quarter remained relatively unchanged
at $506,000 in 1995 and $490,000 in 1996.
Expenses
Loss and loss expenses incurred for the second quarter decreased from $1.7
million (42.7% of net premiums earned) in 1995 to $1.6 million (51.2% of net
premiums earned) in 1996, a decrease of $100,000 or 5.9%. Losses incurred
decreased $150,000 with loss adjustment expenses increasing $50,000.
6
<PAGE> 9
Commissions paid to non-affiliates in the second quarter decreased from
$1.3 million (33.5% of premiums earned) in 1995 to $600,000 (18.6% of premiums
earned) in 1996, a decrease of $700,000 or 53.8%. The percentage of commissions
paid to premiums earned varies depending upon customer mix. The historical
average is approximately 20% of earned premiums.
Personnel expenses in the second quarter increased from $4.2 million in
1995 to $5.0 million in 1996, an increase of $800,000 or 19%. The increase was
primarily due to staff additions and increased outside labor, in response to the
volume increases in the Flood Inquiry and Tracking fee based business.
All other expenses in the second quarter increased from $3.5 million in
1995 to $4.3 million in 1996, an increase of $800,000 or 22.9%. During the
second quarter of 1996, the Company accrued $1.4 million of expense as a result
of retention agreements entered into with various executives. The agreements
were to ensure that the executives continued to provide management of the
Company until the pending change of control which occurred on July 11, 1996 (See
note 2 to the notes to consolidated financial statements).
During the second quarter of 1995, the Company accrued a non-recurring
expense in the amount of $4.1 million for the constitutionally mandated
roll-back of insurance premiums for Proposition 103. The refunds of premiums
were eventually issued in the first quarter of 1996.
As a result of the above factors, operating loss before provision for
income taxes for the second quarter of 1996 decreased from a loss of $6.4
million in 1995 to a loss of $1.4 million in 1996, a decrease of $5.0 million.
The net loss for the second quarter of 1995 was $4.3 million or $(.93) per share
compared with a net loss of $857,000 or $(.18) in 1996. The weighted average
number of shares outstanding for the second quarter of 1995 and 1996 were
4,678,729 and 4,679,942, respectively.
SIX MONTHS ENDED JUNE 30, 1996 COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 1995:
Revenue
Total revenue for the six-month period increased from $16.3 million in 1995
to $20.6 million in 1996, an increase of $4.3 million or 26.4%.
Net premiums written decreased from $6.7 million in 1995 to $6.0 million in
1996, a decrease of $700,000 or 10.4%. An increase of $690,000 in reserves for
premium cancellations accounted for the decrease.
Net premiums earned decreased from $8.4 million in 1995 to $6.8 million in
1996, a decrease of $1.6 million or 19%. Premium revenue is earned ratably over
a twelve month period. Consequently, premiums earned are impacted by the
business written over the prior twelve months and further impacted by
cancellations on the same premiums. As a result of those calculations, the
change in unearned premiums for the six months ended June 30, 1996 was an
increase in revenue recognized and a decrease in deferred revenue of $800,000
compared to an increase in revenue of $1.7 million for the same six months of
1995.
Flood inquiry fees for the period increased from $4.2 million in 1995 to
$9.6 million in 1996, an increase of $5.4 million or 129%. The addition of five
major new customers since June of 1995 accounted for $2.4 million of the
increase. Interest rates have remained favorable with loan origination volumes
generally increasing with existing customers. In addition, the Company has
converted many of
7
<PAGE> 10
its existing customers to the higher priced life-of-loan product as the industry
complies with federal regulations.
Tracking fees increased from $2.2 million in 1995 to $2.5 million in 1996,
an increase of $300,000 or 13.6%. The increase is primarily due to the addition
of one new customer in May, 1995.
Net investment income for the period remained unchanged at $1 million for
each of the two years.
Expenses
Loss and loss expenses incurred for the six-month period decreased from $3.6
million (42.3% of net premiums earned) in 1995 to $2.7 million (39.1% of net
premiums earned) in 1996, a decrease of $900,000 or 25%. Losses incurred
decreased $800,000 with loss adjustment expenses decreasing $100,000. The number
of new claims decreased from 593 in 1995 to 422 in 1996.
Commissions paid to non-affiliates decreased from $2.0 million (23.8% of
premiums earned) in 1995 to $1.3 million (18.4% of premiums earned) in 1996, a
decrease of $700,000 or 35%. The percentage of commissions paid to premiums
earned varies depending upon customer mix.
Personnel expenses for the six-month period increased from $7.6 million in
1995 to $10.1 million in 1996, an increase of $2.5 million or 32.9%. Staff
additions and increased outside labor, in response to the volume increases in
the Flood Inquiry and Tracking fee based businesses, accounted for $1.8 million
of the increase. The remaining $700,000 was due to increases in overhead labor
and related costs.
All other expenses for the period increased from $5.8 million in 1995 to
$7.6 million in 1996, an increase of $1.8 million or 31%. In June of 1996, the
Company accrued $1.4 million of expense as a result of retention agreements
entered into with various executives. The agreements were to ensure that the
executives continued to provide management of the Company until the pending
change of control which occurred on July 11, 1996 (See note 2 to the notes to
consolidated financial statements).
During the six months ended June 30, 1995, the Company accrued a
non-recurring expense in the amount of $4.1 million for the constitutionally
mandated roll-back of insurance premiums for Proposition 103. The refunds of
premiums were eventually issued in the first quarter of 1996.
As a result of the above factors, operating loss before provision for
income taxes for the six-month period decreased from a loss of $6.7 million in
1995 to a loss of $1.1 million in 1996, a decrease of $5.6 million. The net loss
for the six months of 1995 was $4.6 million or $(.98) per share compared with a
net loss of $708,000 or $(.15) in 1996. The weighted average number of shares
outstanding for the six months ended June 30, 1995 and 1996 were 4,678,729 and
4,691,008, respectively.
8
<PAGE> 11
FACTORS AFFECTING FUTURE OPERATION RESULTS
Earnings Volatility
The Company's financial results can be significantly affected by a number
of factors, including but not limited to, the volume of force-placed insurance
and the rate of cancellation of insurance policies, the addition or loss of
significant customers, significant changes in the number of loans or leases
being tracked for major customers and catastrophic loss events. In addition,
revenues from the Company's Flood Zone Determination Services are directly
related to the volume of mortgage loan originations, both new and refinanced,
and any change in the level of such activity could have a material impact on the
Company's performance.
The Insurance Industry
The Company derives a significant amount of its revenues from insurance
premiums and investment income. In the event that, for whatever reason, the
Company experiences abnormally high losses, purchases reinsurance from
reinsurers who will not or cannot pay losses submitted, or other adverse
developments occur, then any such event or combination of events could have a
material adverse impact on the Company. In addition, insurance companies and
others have often been sued under certain legal theories, such as bad faith
handling or settlement of claims, which could subject the Company to liability
in excess of policy limits. An adverse outcome of any such lawsuit could have a
material negative impact on the Company.
Reserve Adequacy
The Company is required to maintain reserves to cover its estimated
ultimate liability for loss and loss adjustment expenses with respect to
reported losses and incurred but not reported claims. These reserves are
estimates of what the Company expects the ultimate settlement and administration
of claims will cost, and are based on known facts and circumstances, predictions
of future events, estimates of future trends in claims severity and other
variable, subjective factors. No assurances can be given that such estimates
will be adequate to cover actual losses incurred by the Company. Any significant
changes in the Company's estimate of ultimate losses on reported claims may
materially adversely affect the results of the Company's operations in the
period reported. The Company has in the past experienced adverse developments in
its loss reserves. The Company's loss and loss adjustment expense reserves are
reviewed on an annual basis by unaffiliated actuaries. The company's most recent
actuarial review of such reserves as of December 31, 1995 concluded that the
reserves (i) met the requirements of the insurance laws of California; (ii) were
computed in accordance with accepted loss reserving standards and principles and
(iii) make a reasonable provision for all unpaid loss and loss expense
obligations of the Company under the terms of its policies and agreements.
The Company also maintains a reserve for return premiums which is based
upon the Company's historical experience. As is prevalent in the force-placed
insurance industry, a substantial amount of the Company's net premiums written
are refunded to policyholders. The amount of such refunds can be affected by,
among other things, inaccurate or untimely data submitted by customers, which
the Company uses as a basis for recording written premiums or the loss of a
significant customer. No assurance can be given that the reserve for return
premiums will be adequate to cover actual refunded premiums paid by the Company
in the future.
9
<PAGE> 12
Underwriting Risks
Traditional insurance companies underwrite risks individually or by class,
following an in-depth analysis of such risks. Although the Company applies
underwriting techniques to a small portion of insured risks, the immediate
coverage required by purchasers of force-placed insurance generally requires the
Company to write specialized insurance within predesignated limits and
geographic area, at a flat rate, without the application of traditional
underwriting criteria to individual risks. Accordingly, the Company may be
insuring individual risks that it might not have insured had it applied
traditional analysis to such risks and may not have adequate spread of risk in a
particular geographic area.
Reinsurance Considerations
The Company's business is partially dependent upon its ability to cede
risks insured by the Company to reinsurers. The amount, availability and cost of
reinsurance are subject to prevailing market conditions, beyond the control of
the Company, which can affect the Company's level of business and profitability.
The Company is ultimately liable for the reinsured risk if for any reason the
reinsurers do not cover or will not pay the Company for the losses of the
insureds. As a result of the increased cost and more limited availability of
reinsurance, in the future, the Company may elect to retain a higher portion of
the risk historically ceded to reinsurers. If the Company were to retain a
higher proportion of insured risks, it would increase its exposure to
significant losses relating to properties insured by the Company. This increased
exposure could have a material adverse effect on the Company's results of
operation.
Flood zone Determinations
The Company derives a substantial portion of its total revenues from fees
for Flood Zone Determination Services. These services are primarily provided to
assist lenders in complying with federal laws which in many instances require
lenders to determine whether property being financed is located in a
federally-designated flood zone and require borrowers to obtain flood insurance.
Any significant change in federal legislation or secondary market requirements
limiting these requirements on lenders or borrowers, or the development by
competitors of significantly enhanced service or delivery systems could have a
material adverse effect on the Company's business or operation results.
The Company also indemnifies its customers from losses resulting from
erroneous flood inquiry determinations, where a borrower was not properly
advised whether the collateral was located in or out of a federally-designated
flood zone. While to date the Company has experienced no significant losses in
this regard and maintains reserves equal to its estimate of incurred but
unreported indemnification losses, there can be no assurance such reserves will
prove adequate in the future. The Company does not maintain errors and omissions
insurance coverage against such losses.
Rapid Technological Change and New Products; Product Delays
The markets for the Company's information services are highly competitive
and characterized by rapidly changing technology. The Company believes that its
future success will depend, in part, on its ability to identify, develop,
install and support new services in a timely fashion, and on market acceptance
of such services. No assurance can be given that the Company will successfully
develop new technologies or successfully introduce products based on such
technologies to enable the Company to maintain or gain market share, realize
cost savings or maintain or increase revenues.
10
<PAGE> 13
PART II
NATIONAL INSURANCE GROUP AND SUBSIDIARIES
ITEM 5 OTHER INFORMATION
RATE INCREASE:
LENDERS REAL PROPERTY PROTECTIVE & REAL ESTATE OWNED PROGRAMS
Effective December 22, 1995, the California Department of Insurance
approved Great Pacific Insurance Company's Rates, Rules & Forms Revision Filing
for the Lenders Real Property Protective Annual, Interim & Real Estate Owned
Programs. The Revision Filing includes an overall rate increase of +11% for all
three programs; a three tier optional rate/deductible schedule for the Annual
Program; and the addition of a separate "commercial" rate for the Real Estate
Owned Program. The selected effective date for implementing these program
enhancements, for all new & renewal business, was March 1, 1996, with the
exception of the renewal business of manual accounts which became effective May
1, 1996.
11
<PAGE> 14
NATIONAL INSURANCE GROUP AND SUBSIDIARIES
EXHIBIT 11
COMPUTATION OF WEIGHTED AVERAGE SHARES
OUTSTANDING AND EARNINGS PER SHARE
(in thousands of dollars except share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Second Quarter Six Months
----------------------------- ----------------------------
1996 1995 1996 1995
---- ---- ---- ----
(unaudited)
<S> <C> <C> <C> <C>
Actual common shares
outstanding 4,679,697 4,678,729 4,679,697 4,678,729
Common shares issuable
under outstanding stock
options -- -- -- --
Weighted average common
shares issued upon exercise
of stock options 245 -- 11,311 --
Total weighted average
shares outstanding 4,679,942 4,678,729 4,691,008 4,678,729
=========== =========== =========== ===========
Net income (loss) $ (857) $ (4,336) $ (708) $ (4,565)
=========== =========== =========== ===========
Net income (loss) per share $ (.18) $ (.93) $ (.15) $ (.98)
=========== =========== =========== ===========
</TABLE>
12
<PAGE> 15
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.
NATIONAL INSURANCE GROUP
------------------------
(REGISTRANT)
/s/ MARK A. SPEIZER
- ------------------------------ -------------------
DATE: AUGUST 08, 1996 (SIGNATURE)
Mark A. Speizer, Chairman
of the Board and Chief
Executive Officer
/s/ ROBERT J. LELIEUR
- ------------------------------ ---------------------
DATE: AUGUST 08, 1996 (SIGNATURE)
Robert J. Lelieur,
Vice-President, Treasurer and
Controller
13
<TABLE> <S> <C>
<ARTICLE> 7
<CIK> 0000815555
<NAME> NATIONAL INSURANCE GROUP
<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> 15,843
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 2,190
<MORTGAGE> 36
<REAL-ESTATE> 0
<TOTAL-INVEST> 35,987
<CASH> 509
<RECOVER-REINSURE> 11
<DEFERRED-ACQUISITION> 2,239
<TOTAL-ASSETS> 51,814
<POLICY-LOSSES> 3,104
<UNEARNED-PREMIUMS> 4,867
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
0
<COMMON> 23,259
<OTHER-SE> 9,046
<TOTAL-LIABILITY-AND-EQUITY> 51,814
6,841
<INVESTMENT-INCOME> 1,002
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 12,712
<BENEFITS> 2,672
<UNDERWRITING-AMORTIZATION> 3,278
<UNDERWRITING-OTHER> 15,722
<INCOME-PRETAX> (1,116)
<INCOME-TAX> (408)
<INCOME-CONTINUING> (708)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (708)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 3,055
<PROVISION-CURRENT> 2,240
<PROVISION-PRIOR> 432
<PAYMENTS-CURRENT> 682
<PAYMENTS-PRIOR> 1,941
<RESERVE-CLOSE> 3,104
<CUMULATIVE-DEFICIENCY> 432
</TABLE>
