UNITED STATES
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 September 30, 1998
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 0-23430
South Dakota State Medical Holding Company, Incorporated
(Exact name of registrant as specified in its charter)
South Dakota 46-0401087
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1323 South Minnesota Avenue, Sioux Falls, South Dakota 57105
(Address of principal executive office)
(Zip Code)
(605) 334-4000
(Registrant's telephone number, including area code)
______________________________
(Former name, former address, and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at November 10, 1998
Class C Common Stock 1,505,760
<PAGE>
SOUTH DAKOTA STATE MEDICAL HOLDING COMPANY, INCORPORATED
FORM 10-Q
INDEX
Page Number
<TABLE>
<S> <C>
Part 1. Financial Information (unaudited)
Item 1. Financial Statements
Consolidated Balance Sheets at
September 30, 1998 and December 31, 1997 2
Consolidated Statements of Income for
the Three and Nine Months Ended September 30, 1998 and 1997 3
Consolidated Statement of Stockholders' Equity
for the Nine Months Ended September 30, 1998 4
Consolidated Statements of Cash Flows
for the Nine Months Ended September 30, 1998 and 1997 5
Notes to Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 8-10
Part II. Other Information 11
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Default Upon Senior Securities 11
Item 4. Submission of Matters to a Vote
of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 11
</TABLE>
<PAGE>1
PART 1: FINANCIAL INFORMATION
Item 1. Financial Statements
SOUTH DAKOTA STATE MEDICAL HOLDING
COMPANY, INCORPORATED d/b/a DAKOTACARE
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<S> <C> <C>
September 30, December 31,
ASSETS 1998 1997
Cash and cash equivalents $ 6,105,323 $ 4,467,754
Investments in debt securities 462,758 901,599
Certificates of deposit 746,828 843,559
Receivables 793,326 799,395
Prepaids and other assets 128,840 124,729
Deferred income taxes 540,000 720,000
------------- -------------
Total current assets $ 8,777,075 $ 7,857,036
------------- -------------
Investments in debt securities $ 3,428,435 $ 3,887,081
Investments in equity securities 309,700 300,000
Pledged certificates of deposit 500,000 500,000
Cash surrender value of life insurance 93,000 81,000
------------- -------------
Total long-term investments $ 4,331,135 $ 4,768,081
------------- -------------
Property and equipment, net $ 903,108 $ 963,684
------------- -------------
Deferred income taxes $ 554,000 $ 422,000
------------- -------------
$ 14,565,318 $ 14,010,801
============= =============
LIABILITIES
Reported and unreported medical claims liabilities $ 4,190,803 $ 4,163,804
Unearned subscriber premiums and administration fees 695,738 629,783
Accounts payable and accrued expenses 849,344 695,050
Contingency reserve payable 1,200,000 1,627,000
------------- -------------
Total current liabilities $ 6,935,885 $ 7,115,637
Contingency reserve payable 1,731,140 1,336,846
------------- -------------
Total liabilities $ 8,667,025 $ 8,452,483
------------- -------------
Minority interest in subsidiary $ 347,605 $ 354,160
------------- -------------
STOCKHOLDERS' EQUITY
Class A preferred stock, issued 1,113 shares $ 11,130 $ 10,690
Class B preferred stock, issued 1,300 shares 1,300 1,300
Class C common stock, issued 1,505,760 shares 15,058 15,058
Additional paid-in capital 3,749,342 3,749,342
Retained earnings 2,057,295 1,435,709
Unrealized loss on securities available for sale (2,957) (7,941)
Treasury Stock (280,480) --
------------- -------------
$ 5,550,688 $ 5,204,158
------------- -------------
$ 14,565,318 $ 14,010,801
============= =============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>2
SOUTH DAKOTA STATE MEDICAL HOLDING
COMPANY, INCORPORATED d/b/a DAKOTACARE
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
1998 1997 1998 1997
Revenues:
Premiums, net of reins. ceded $ 8,785,362 $ 8,663,469 $ 26,836,228 $ 25,626,110
Third party administration fees 738,790 884,290 2,288,626 2,804,372
Net investment income 157,360 158,512 460,737 451,874
Other income 135,327 163,113 477,561 436,477
------------- ------------- ------------- -------------
Total revenues $ 9,816,839 $ 9,869,384 $ 30,063,152 $ 29,318,833
------------- ------------- ------------- -------------
Operating expenses:
Claims incurred,
net of reins. recoveries $ 7,259,757 $ 7,317,669 $ 22,416,542 $ 22,623,296
Personnel expense 986,612 939,467 2,886,607 2,861,398
Commissions 356,708 376,903 1,120,022 1,184,905
Professional fees expense 238,355 235,427 762,453 781,948
Office expense 162,205 158,191 460,363 483,381
Advertising 53,424 78,391 288,394 293,269
Occupancy expense 173,191 150,120 518,842 485,332
State insurance taxes 110,302 99,309 344,440 327,393
Other general and
administrative expenses 166,680 39,271 311,196 199,781
------------- ------------- ------------- -------------
Total operating expenses $ 9,507,234 $ 9,394,748 $ 29,108,859 $ 29,240,703
------------- ------------- ------------- -------------
Income (loss) before income taxes
and minority interest $ 309,605 $ 474,636 $ 954,293 $ 78,130
Income taxes 50,775 161,000 265,775 27,000
------------- ------------- ------------- -------------
Income (loss) before minority
interest in earnings (loss)
of subsidiary $ 258,830 $ 313,636 $ 688,518 $ 51,130
Minority interest in earnings
(loss) of subsidiary (1,339) 11,363 (6,555) 36,286
------------- ------------- ------------- -------------
Net income (loss) $ 260,169 $ 302,273 $ 695,073 $ 14,844
============= ============= ============= =============
Earnings (loss) per common share $ 0.17 $ 0.20 $ 0.29 $ 0.01
============= ============= ============= =============
Weighted average number of
common shares outstanding 1,505,760 1,505,760 1,505,760 1,505,760
============= ============= ============= =============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>3
SOUTH DAKOTA STATE MEDICAL HOLDING
COMPANY, INCORPORATED d/b/a DAKOTACARE
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Unrealized
Loss on
Additional Securities
Capital Paid-In Retained Available Treasury
Stock Capital Earnings for Sale Stock Total
Balance,
December 31, 1997 $27,048 $3,749,342 $1,435,709 $(7,941) $ -- $5,204,158
Issuance of Class A
preferred stock 440 -- -- -- -- 440
Redemption of Class A
preferred stock -- -- -- -- -- --
Treasury stock
purchased at cost -- -- -- -- (280,480) (280,480)
Decrease in unrealized
loss on securities
available for sale -- -- -- 4,984 -- 4,984
Dividends declared on
Class C common
stock -- -- (73,487) -- -- (73,487)
Net income for the
nine months -- -- 695,073 -- -- 695,073
-------- ----------- ----------- -------- ---------- -----------
Balance,Sept. 30, 1998 $27,488 $3,749,342 $2,057,295 $(2,957) $(280,480) $5,550,688
======== =========== =========== ======== ========== ===========
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>4
SOUTH DAKOTA STATE MEDICAL HOLDING
COMPANY, INCORPORATED d/b/a DAKOTACARE
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<S> <C> <C>
Nine Months Ended Sept. 30,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 695,073 $ 22,493
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 220,053 235,941
Minority interest in income (loss)
of subsidiary (6,555) 36,286
Amortization of discounts and premiums
on investments, net (104,748) (88,516)
Change in deferred income taxes 48,000 (36,100)
Loss on disposal of equipment 3,381 903
Change in other assets and liabilities (177,794) 946,046
Increase in contingency reserve payable 394,294 508,664
------------- -------------
Net cash provided by operating activities $ 1,071,704 $ 1,625,717
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of certificates
of deposit $ 1,075,000 $ 1,075,000
Purchase of certificates of deposits (975,000) (975,000)
Repayments on collateralized mortgage oblig. 233,967 107,875
Purchase of debt securities -- (726,549)
Proceeds from maturities of debt securities 765,000 225,000
Purchase of equity securities (4,716) (4,595)
(Increase) in cash surrender value of life ins. (12,000) (9,000)
Proceeds from the sale of equipment -- 18,709
Purchase of leasehold improvements and equip. (162,859) (114,787)
------------- -------------
Net cash provided by(used for) investing activities $ 919,392 $ (403,347)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of capital stock $ 440 $ 380
Redemption of capital stock -- (210)
Payment of dividends (73,487) (255,979)
Treasury stock purchased (280,480) --
------------- -------------
Net cash provided by(used for) financing activities $ (353,527) $ (255,809)
------------- -------------
(Decrease)increase in cash and cash equivalents $ 1,637,569 $ 966,561
CASH AND CASH EQUIVALENTS
Beginning 4,467,754 3,422,692
------------- -------------
Ending $ 6,105,323 $ 4,389,253
============= =============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>5
SOUTH DAKOTA STATE MEDICAL HOLDING
COMPANY, INCORPORATED d/b/a DAKOTACARE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The consolidated financial statements of South Dakota State
Medical Holding Company, Incorporated, d/b/a DAKOTACARE, (the
"Company") and its wholly-owned subsidiaries, DAKOTACARE
Administrative Services, Incorporated (DAS), and DAKOTACARE
Insurance Ltd. (DIL), and its 50.11% owned subsidiary, Dakota
Health Plans, Incorporated (DHP), contained in this report are
unaudited but reflect all adjustments, consisting only of normal
recurring adjustments, which, in the opinion of management, are
necessary for a fair presentation of the financial information for
the periods presented and are not necessarily indicative of the
results to be expected for the full year.
2. EARNINGS PER COMMON SHARE
Earnings per common share is calculated by dividing net income
by the weighted average number of Class C common shares outstanding
during the period.
3. Year 2000 (Y2K)
The Company recognizes the need to ensure that its operations will not be
adversely impacted by Year 2000 software failures. Software failures due
to processing errors potentially arising from calculations using the
Year 2000 date are a know risk.
Our four phased approach to handling potential Y2K hazards should ensure
we do not experience crippling Y2K problems. The four phases include
identification (inventory) of corporate assets, assessing the associated
risks, testing required changes and implementation of those changes.
Within each phase, we have identified the following areas of evaluation:
-Core business applications
-Claims, check runs, data exchanges with internal and external
systems, large client lists, billing, DRG programs, daily reports
and decision support systems
-Desktop and midrange computer hardware and software
-Telecommunications hardware and software
-User created applications
-Data files
-System software
-Other systems
-Vendors, service providers and suppliers
We have completed 90% of our inventories with the remaining 10% scheduled
for completion shortly. The results of our ongoing assessment of core
business applications and data files have revealed our systems are largely
compliant. However, we have identified several changes which do need to be
made. Internal data exchanges between our core business applications and our
DSS have been implemented and will go through a final audit and verification
within two months. In addition, all hardware failing Y2K compliance will be
scheduled for replacement no later than February 1999.
<PAGE>6
Potential failures in claims submissions are being addressed in cooperation
with our EDI partners. Should providers experience problems with their
ability to submit claims to clearinghouses, we expect an increase in paper
claims. Further studies on the impact of potential power and telecommuni-
cation failures are still needed, along with appropriate contingency plans.
Our target date for resolving and implementing all high risk areas, including
core business applications, is April 1, 1999. The remaining low risk areas
will be completed by August 1999. The project plan currently calls for 4,500
hours by Dakotacare staff, and all indications to date have shown this to be
a reasonable, conservative estimate.
Since there is no uniform definition of Year 2000 "compliance" and the
potential widespread effects, it is still unknown if there are additional
costs which may have a material effect on the Company's financial position.
4. Comprehensive Income
In 1998, the Company adopted the provisions of SFAS No. 130, "Reporting
Comprehensive Income". This statement establishes standards for reporting
and display of comprehensive income and its components. Comprehensive income
includes the reported net income of a company adjusted for items that are
currently accounted for as direct entries to equity, such as the mark to
market adjustment on securities available for sale. The Company's
comprehensive income represents net income plus other comprehensive income,
which consists of the net change in unrealized gains or losses on securities
available for sale, net of tax, for the period.
Comprehensive income for the three months ended September 30, 1998 and 1997,
are $264,185 and 305,058, respectively.
Comprehensive income for the nine months ended September 30, 1998 and 1997,
are $698,362 and 17,917, respectively.
5. SFAS 131
In June 1997, the FASB issued SFAS No. 131, "Disclosure about segments of an
Enterprise and Related Information". SFAS No. 131 establishes standards for
reporting by public companies of operation segments within the Company,
disclosures about products and services, geographic areas and major customers.
This statement is effective for the Company's 1998 annual financial
reporting. Management believes that the adoption of SFAS No. 131 will not
have an impact on the Company's consolidated financial statements.
6. Treasury Stock
As a service to the Company's shareholders to facilitate liquidity for Class
C common Stock (Common Stock) in the event of death, disability, or retirement
of a shareholder, the Company's Board of Directors adopted a Stock Repurchase
Program (Program) in February 1998. Participation in the Program is
voluntary. No shareholder is required to sell his or her shares of Common
Stock under the Program nor is the Company required to purchase any Common
Stock under the Program. The purchase and sale of Common Stock under the
Program is subject to repurchase conditions as described in the Program. The
Board of Directors of the Company may, at any time, modify or terminate the
Program. The Company may also, at its discretion, offer to repurchase shares
of Common Stock outside the Program in compliance with applicable laws.
<PAGE>7
During the year, the Company purchased 40,414 shares of stock at $6.94 per
share. The total of $280,480 is the total treasury stock indicated in the
stockholders' equity of the Company's balance sheet.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The South Dakota State Medical Holding Company, Incorporated,
markets its products under the tradename of DAKOTACARE. Its
products include group managed health care products such as HMO
products and cafeteria plan administration and workers compensation
managed care services. Its subsidiaries' (DAS and DHP) products
are managed care and claims administration services for self-
insured employer groups. Its subsidiary, DIL, accepts reinsurance
risk on some of DAS's and DHP's self-funded customers. The Company
and subsidiaries DAS and DHP, market their products through a network
of independent insurance agents throughout South Dakota.
The Company contracts with over 98% of the physicians in the state
of South Dakota, 100% of the hospitals in the state of South
Dakota, and many other health care providers to provide medical
services to its enrollees. At September 30, 1998, the Company's
HMO enrollment is approximately 23,800 enrollees, while its
subsidiaries DAS and DHP have enrollment of approximately 54,600
enrollees under their Administrative Services Only (ASO) business.
This discussion and analysis contains certain forward-looking
terminology such as "believes," "anticipates," "will," and "intends,"
or comparable terminology. Such statements are subject to certain
risks and uncertainties that could cause actual results to differ
materially from those projected. Potential purchasers of the
Company's securities are cautioned not to place undue reliance on
such forward-looking statements which are qualified in their entirety
by the cautions and risks described herein and in other reports filed
by the Company with the Securities and Exchange Commission.
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND
SEPTEMBER 30, 1997
General
The Company's net income increased $680,229 to net income of
$695,073 for the nine months ended September 30, 1998, as
compared to net income of $14,844 for the nine months ended
September 30, 1997. This increase was primarily due to an increase
in total revenues of $744,319, which was offset by a net increase
of $106,931 in operating expenses and income taxes.
Revenues
Total revenues increased $744,319, or 2.54%, for the nine months ended
September 30, 1998, as compared to September 30, 1997. The revenues
from the net premiums generated by the health maintenance organization
increased $1,168,103, or 4.65%. This increase is attributable to an
6.28% increase in the premiums earned per enrollee, but was offset by
a 4.02% decrease in the number of enrollees for the nine months ended
September 30, 1998, as compared to September 30, 1997. Revenues from
the third party administration(TPA) fees decreased by $515,746 due to
<PAGE>8
the net decrease in enrollees in this TPA business through DAS and DHP.
Operating Expenses
Total operating expenses decreased $131,844, or 0.45%, for the
nine months ended September 30, 1998, as compared to September 30, 1997.
This was due to an decrease in claims incurred, commissions, professional
fees, advertising and office expense, but was offset by an increase
in personnel, state insurance premiums and occupancy expense.
Net claims expense decreased by $206,754, or 0.91%. Average claims
per enrollee increased by 4.54% for the nine months ended September 30,
1998, as compared to September 30, 1997. The number of enrollees decreased
by 4.02%, which meant an overall decrease in expense. Commissions,
professional fees, advertising and office expense decreased $112,271, or
4.09%, for the nine months ended September 30, 1998, as compared to
September 30, 1997, due to reductions in overall enrollment and the
related costs. No individual account decreased by more than 10%.
Personnel, state insurance premiums and occupancy expense increased by
$75,766, or 2.06%, for the nine months ended September 30, 1998, as com-
pared to September 30, 1997, due to the increase in premiums and efforts
to increase sales. No individual account increased by more than 10%.
Other general and administrative expenses increased $111,415, or 55.77%
for the nine months ended September 30, 1998, as compared to September 30,
1997. Two components within the account which were new expenses were
software service fees and computer recruitment expenses. Due to the
continued effort in keeping up with computer technology changes, new
computer services were contracted. Some of the new services replace items
that previously were capitalized. The new agreements don't meet the
capitalization requirements and were expensed. With the changes,
additional personnel was hired and the recruiting expenses were incurred.
The total increase from this was $51,283 for the nine months ended
September 30, 1998. Another $40,927 increase was from insurance cost
increases and coverage expansion. The remaining $19,205 in increases
were due to various items which weren't due to any specific events.
Income Taxes
Income tax expense represents 27.85% and 34.56% of income before income
taxes and minority interest for the nine months ended September 30, 1998
and 1997, respectively. The Company does not anticipate income to
surpass the top income tax bracket. As a result of the availability
of recoverable income taxes paid in recent years, no valuation
allowance is required for recorded deferred tax assets.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of cash have been premium revenue,
collection of premiums in advance of the claims cost associated with them,
and an agreement with participating physicians in which a percentage of
fees for services is withheld for cash flows of the Company. The Company
in the past has had borrowings from banks and affiliated companies, but
currently does not need to borrow for liquidity purposes.
Net cash provided by operating activities decreased by $554,013 to
$1,071,704 for the nine months ended September 30, 1998, as compared to
September 30, 1997. Unearned subscriber premiums decreased by $161,879
for the nine months ended September 30, 1998, as compared to September 30,
1997. This amount fluctuates each month depending on billing dates and
timeliness of premium payments. Cash flows have been provided from
<PAGE>9
proceeds on the maturities of investments and certificates of deposits.
The purchase of leasehold improvements and equipment offset the cash flows
to a minor extent.
The Company is not contractually obligated to pay out the contingency
reserve withheld but has historically elected to pay out a majority of
the amounts withheld. Dividends paid on Class C stock was $73,487 for the
nine months ended September 30, 1998. Future dividend payment is depen-
dent on operations and liquidity of the Company. The Company believes
that cash flow generated by operations, withholding of contingency reserve
payables, cash on hand, and short-term investment balances will be suf-
ficient to fund operations, pay out the projected contingency reserve
payable, and pay dividends on the Class C common stock. The Company
redeemed $280,480 of treasury stock under a new stock repurchase program
implemented in 1998. The repurchase program allows the Company to redeem
stock from deceased, disabled and retired stockholders upon the request
from the stockholders or their heirs. The repurchase price of the stock
is established by the board of directors.
OUTLOOK, TRENDS, EVENTS, OR UNCERTAINTIES
The Company identifies the following important factors which could
cause the Company's actual financial and enrollment results to differ
materially from any such results which might be projected, forecast,
estimated, or budgeted by the Company in forward-looking statements
or valuation analysis: the intensification of price competition; the
entry of new competitors; the introduction of new products by new and
existing competitors; adverse state and federal legislation and
regulation; increases in medical costs, including increases in
utilization and costs of medical services and the effects of actions
by competitors or groups of providers; termination of provider contracts
or renegotiation at less cost-effective rates or terms of payment;
price increases in pharmaceuticals; failure to obtain new customers,
retain existing customers, or reductions in force by existing customers;
adverse publicity and news coverage; the selection by employers and
individuals of higher copayment/deductible/coinsurance plans with
relatively lower premiums; the migration of employers from insured
to self-funded coverage resulting in reduced margins to the Company;
higher general and administrative expenses occasioned by the need for
additional advertising, professional services, administrative, or
management information systems expenditures; changes in interest rates
causing a reduction of net investment income; and increases by
regulatory authorities of minimum capital, reserve, and other financial
viability requirements.
<PAGE>10
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Default Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) No exhibits are attached.
(b) No reports on Form 8-K have been filed during the quarter for
which this report is filed.
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.
South Dakota State Medical Holding Company, Incorporated
(Registrant)
Date:11/12/98______ By: _/s/Robert D. Johnson__
Robert D. Johnson
Chief Executive Officer
(Duly Authorized Officer)
Date:11/12/98______ By: _/s/Kirk J. Zimmer_____
Kirk J. Zimmer
Senior Vice President
(Principal Financial Officer)
<PAGE>11
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 5,138,021
<DEBT-MARKET-VALUE> 5,316,054
<EQUITIES> 309,700
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 5,447,721
<CASH> 6,105,323
<RECOVER-REINSURE> 103,904
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 14,565,318
<POLICY-LOSSES> 4,190,803
<UNEARNED-PREMIUMS> 695,738
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
12,430
<COMMON> 15,058
<OTHER-SE> 5,523,200
<TOTAL-LIABILITY-AND-EQUITY> 14,565,318
26,836,228
<INVESTMENT-INCOME> 460,737
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 2,766,187
<BENEFITS> 22,623,296
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 1,120,022
<INCOME-PRETAX> 954,293
<INCOME-TAX> 265,775
<INCOME-CONTINUING> 644,688
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 695,073
<EPS-PRIMARY> .46
<EPS-DILUTED> .46
<RESERVE-OPEN> 4,163,804
<PROVISION-CURRENT> 22,298,188
<PROVISION-PRIOR> 325,108
<PAYMENTS-CURRENT> 18,008,870
<PAYMENTS-PRIOR> 4,461,845
<RESERVE-CLOSE> 4,190,803
<CUMULATIVE-DEFICIENCY> 325,108
</TABLE>
