<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the period ended March 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________to __________________.
Commission File Number 000-25253
SUMMIT LIFE CORPORATION
-----------------------
(Exact name of registrant as specified in its charter)
OKLAHOMA 73-1448244
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3021 Epperly Dr., P.O. Box 15808, Oklahoma City, Oklahoma 73155
- --------------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (405) 677-0781
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 shares outstanding of the Issuer's Common Stock, $.01 par value,
as of May 14, 1999 was 2,200,071.
Transitional Small Business Disclosure Format (check one): Yes_____ No X
----
<PAGE>
FORM 10-QSB
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - March 31, 1999 (unaudited) and
December 31, 1998.......................................................... 3
Consolidated Statements of Operation - Three months ended
March 31, 1999 and 1998 (unaudited)........................................ 5
Consolidated Statement of Stockholders' Equity - Three months ended
March 31, 1999 and 1998 (unaudited)........................................ 6
Condensed Consolidated Statement of Cash Flows - Three months ended
March 31, 1999 and 1998 (unaudited)........................................ 7
Notes to Consolidated Financial Statements (unaudited)..................... 8
Item 2. Management's Discussion and Analysis or Plan of Operation.................. 9
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds.................................. 13
Item 6. Exhibits and Reports on Form 8-K........................................... 13
Signatures........................................................................... 14
</TABLE>
<PAGE>
Summit Life Corporation and Subsidiaries
Consolidated Balance Sheets
ASSETS
<TABLE>
<CAPTION>
March 31, 1999 December 31, 1998
-------------------- --------------------
(Unaudited)
<S> <C> <C>
INVESTMENTS
Debt securities-available for sale $4,188,787 $4,105,139
Equity securities-available for sale 47,720 46,557
Notes receivable 922,054 1,241,468
Short-term investments 596,541 156,541
Policy loans 50,507 18,142
Investment real estate, net of depreciation 78,857 73,251
----------- -----------
5,884,466 5,641,098
CASH AND CASH EQUIVALENTS 1,902,252 1,492,196
RECEIVABLES
Accrued investment income 199,931 240,417
Other 31,596 13,156
----------- -----------
231,527 253,573
PROPERTY AND EQUIPMENT-AT COST
Building and improvements 117,209 115,853
Furniture and equipment 129,486 132,811
Automobiles 54,015 45,275
----------- -----------
300,710 293,939
Less accumulated depreciation (68,133) (63,382)
----------- -----------
232,577 230,557
Land 56,000 56,000
----------- -----------
288,577 286,557
OTHER ASSETS
Cost in excess of net assets of businesses
acquired, less accumulated amortization 97,539 106,918
Deferred policy acquisition costs 20,926 20,926
Value of purchased insurance business 639,234 272,465
Land and building held for sale 174,066 176,153
Deferred income taxes -- 31,943
Other 16,202 124,261
----------- -----------
947,967 732,666
----------- -----------
$9,254,789 $8,406,090
=========== ===========
</TABLE>
The accompanying notes are an integral part of these interim financial
statements
3
<PAGE>
Summit Life Corporation and Subsidiaries
Consolidated Balance Sheets
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, 1999 December 31, 1998
------------------ ---------------------
(Unaudited)
<S> <C> <C>
LIABILITIES
Policy reserves and policyholder funds $ 6,094,598 $ 6,027,599
Accounts payable 51,061 51,061
Accrued liabilities 132,886 209,353
Notes payable 1,739,642 1,325,247
Deferred income taxes 1,989 --
Other liabilities -- 16,000
--------------- ---------------
8,020,176 7,629,260
STOCKHOLDERS' EQUITY
Common stock, $.01 par value 21,843 20,547
Additional paid-in capital 2,615,812 2,079,661
Common stock subscribed 39,130 39,130
Accumulated other comprehensive income 24,638 25,985
Accumulated deficit (1,427,680) (1,349,363)
Less stock subscriptions receivable (39,130) (39,130)
--------------- ---------------
1,234,613 776,830
--------------- ---------------
$ 9,254,789 $ 8,406,090
=============== ===============
</TABLE>
The accompanying notes are an integral part of these interim financial
statements
4
<PAGE>
Summit Life Corporation and Subsidiaries
Consolidated Statements of Operation
(Unaudited)
<TABLE>
<CAPTION>
March 31,
----------------------------------
1999 1998
------------ ---------------
<S> <C> <C>
Revenues
Insurance premiums and other considerations $ 83,172 $ 32,874
Investment income 151,899 141,921
Net realized gains (losses) on sale of investments 2,763 1,489
Other 18,140 --
------------- ---------------
255,974 176,284
Benefits, losses and expenses
Policy benefits 18,172 22,350
Change in policy reserves (6,630) (34,143)
Interest expense 28,638 36,708
Taxes, licenses and fees 14,158 7,185
Depreciation and amortization 56,070 94,796
General, administrative and other operating exp. 235,821 150,498
------------- --------------
346,229 277,394
------------- --------------
Loss from cont. operations before inc. taxes (90,255) (101,110)
Income tax provision 1,157 531
------------- --------------
Loss from continuing operations $ (89,098) $ (100,579)
Income from operations of discontinued segment 10,781 12,990
------------- --------------
NET LOSS $ (78,317) $ (87,589)
============= ==============
Basic and diluted loss per common share
From continuing operations (0.04) (0.05)
From discontinued operations -- 0.01
------------- --------------
NET LOSS (0.04) (0.04)
============= ==============
Weighted average outstanding common shares,
basic and diluted 2,086,412 2,027,968
============= ==============
</TABLE>
The accompanying notes are an integral part of these interim financial
statements
5
<PAGE>
Summit Life Corporation and Subsidiaries
Consolidated Statement of Stockholders' Equity
Three Months Ending March 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Common Stock
---------------------- Accum. Other
Shares Additional Common Comprehensive Stock
Out- Par paid-in stock income Accumulated subscriptions
Total standing Value capital subscribed (loss) deficit receivable
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1999 $ 776,830 2,054,735 $20,547 $2,079,661 $39,130 $25,985 $(1,349,363) $(39,130)
Common stock net of offerings
expenses of $110,488 $ 537,447 129,587 1,296 536,151 - - -
Comprehensive income
Net loss $ (78,317) - - - - - (78,317) -
Other comprehensive income
Unrealized loss on investments $ (1,347) - - - - (1,347) - -
Comprehensive income $ (79,664)
-------------------------------------------------------------------------------------------------
Balance at March 31, 1999 $1,234,613 2,184,322 $21,843 $2,615,812 $39,130 $24,638 $(1,427,680) $(39,130)
=================================================================================================
</TABLE>
The accompanying notes are an integral part of these interim financial
statements.
6
<PAGE>
Summit Life Corporation and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------------
1999 1998
----------- -----------
<S> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents
Net cash provided by (used in) operating activities $ (65,193) $ (60,584)
Net cash provided by (used in) investing activities (2,207) (55,939)
Net cash provided by (used in) financing activities 477,456 324,991
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 410,056 208,468
Cash and cash equivalents at the beginning of the period 1,492,196 1,293,457
------------ ------------
Cash and cash equivalents at the end of the period $ 1,902,252 $ 1,501,925
============ ============
</TABLE>
7
<PAGE>
Summit Life Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31, 1999
are not necessarily indicative of the results that may be expected for the three
months ended March 31, 1999. For further information, refer to the consolidated
annual financial statements and footnotes thereto for the three months ended
March 31, 1998.
NOTE B - PURCHASE OF GREAT MIDWEST LIFE INSURANCE COMPANY
On January 13, 1999, the Company acquired 100% of the outstanding common stock
of Great Midwest Life Insurance Company (GMLIC) in a business combination
accounted for as a purchase. GMLIC is primarily engaged in the sale of life
insurance products and is licensed in the state of Texas. The results of
operations of GMLIC are included in the results for the first quarter of 1999.
The total cost of the acquisition was approximately $939,000 consisting of cash
of $607,000 and a promissory note of $332,000 payable in equal installments over
three years.
As a part of the Texas Department of Insurance approval of the acquisition of
GMLIC by the Company, the Company was required to increase the statutory capital
and surplus through a series of transactions which included merging Family
Benefit Life Insurance Company, a wholly owned subsidiary of the Company, with
GMLIC. The Texas Department of Insurance issued final approval of this merger
transaction on April 15, 1999 with an effective date of February 1, 1999.
NOTE C - INITIAL PUBLIC OFFERING
The Company's initial public offering became effective in January 1999. Through
March 31, 1999, 129,587 shares have been issued pursuant to this offering,
resulting in gross proceeds of approximately $648,000. Included in the gross
proceeds of the offering is approximately $341,000 (68,141 shares) from certain
individuals who previously held notes payable from the Company. Upon maturity of
the notes payable, the individuals chose to invest in the Company's common stock
pursuant to the offering. The offering can extend to October 31, 1999 unless
otherwise terminated by the Company.
NOTE D - SUBSEQUENT EVENTS
The Board of Directors approved the issuance of 5,000 shares of a new series of
preferred stock during a board meeting held on April 23, 1999. The preferred
stock provides for a liquidation preference of $100 per share and annual
dividends of $10 per share, which are cumulative.
8
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
This Report includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Act"), and Section
21E of the Securities Exchange Act of 1934, as amended. All statements other
than statements of historical facts included in this Report, including, without
limitation, statements regarding the Company's future financial position,
business strategy, budgets, projected costs and plans and objectives of
Management for future operations, are forward-looking statements. In addition,
forward-looking statements generally can be identified by the use of forward-
looking terminology such as "may," "will," "expect," "intend," "estimate,"
"anticipate" or "believe" or the negative thereof or variations thereon or
similar terminology. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Such
statements are based upon numerous assumptions about future conditions which may
ultimately prove to be inaccurate and actual events and results may materially
differ from anticipated results described in such statements. Important factors
that could cause actual results to differ materially from the Company's
expectations ("cautionary statements") include the risks inherent generally in
the insurance and financial services industries, the impact of competition and
product pricing, changing market conditions, the risks disclosed in the
Company's Annual Report on Form 10-K for the Year Ended December 31, 1998 under
"ITEM 6--MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION," as well as
the risks disclosed in this Report. All subsequent written and oral forward-
looking statements attributable to the Company, or persons acting on its behalf,
are expressly qualified in their entirety by the cautionary statements. The
Company assumes no duty to update or revise its forward-looking statements based
on changes in internal estimates or expectations or otherwise. As a result, the
reader is cautioned not to place reliance on these forward-looking statements.
General
Although the Company's primary focus is its life insurance operations, it
also provides financing to medical accounts receivable factoring entities.
During the last quarter of 1998, the Company disposed of its mortgage loan
processing operations. The Company's life insurance operations and discontinued
mortgage service operations are reported as a separate business segment in the
Company's financial statements included elsewhere in this Report.
Results of Operations
Discontinued Operations
In December 1998, the Company adopted a plan to sell the mortgage services
segment to an officer of the Company in exchange for a $10,000 note receivable.
The actual disposal date was January 4, 1999. The assets sold and liabilities
assumed of the mortgage services segment consisted primarily of the segment's
"name", cash, and customer deposits. Operating results of the mortgage services
segment for the three months ended March 31, 1999 and 1998 are shown separately
in the consolidated statements of operations included elsewhere in this Report.
Three Months Ended March 31, 1999 Compared to Three Months ended March 31,
1998
Assets/Liabilities/Stockholders' Equity. Total assets were $9,254,789 at
March 31, 1999, compared to $8,406,090 at December 31, 1998, an increase of 10%.
The increase was due to the acquisition of Great Midwest Life Insurance Company
("Great Midwest") in January 1999, as well as continued growth in the sales of
the Company's annuity and life products.
Total liabilities (primarily insurance reserves for future benefits) were $
$8,020,176 at March 31, 1999, compared to $7,629,260 at December 31, 1998, an
increase of 5%. The increase was due primarily to increased borrowings related
to the acquisition of Great Midwest, as well as growth in annuity reserves.
9
<PAGE>
Total stockholders' equity was $1,234,613 at March 31, 1999, compared to
$776,830 at December 31, 1998, an increase of 59%. The increase was primarily
due to sales of the Company's common stock pursuant to an ongoing public
offering commenced in January 1999.
Revenue. Revenues attributable to the life insurance segment increased 153%
from $32,874 to $83,172 for the three months ended March 31, 1999, compared to
the same period ended March 31, 1998. The increase was due mainly to the
acquisition of Great Midwest, and reflects a shift in the "mix" of insurance
products sold by the Company. Prior to 1998, the Company primarily sold
annuities, the premiums for which are recorded differently than those for
regular life insurance products. Premiums received on deferred annuities and
annuities without life contingencies (i.e., investment contracts) are recorded
as deposits into the policyholder's account balance, rather than as revenues.
Revenues relating to these contracts consist primarily of withdrawal and
administrative charges. Conversely, premiums relating to life insurance policies
are recognized as revenues when received, as are premiums for certain annuities
with life contingencies, including selection of annuity settlement options with
life contingencies.
Investment income increased 7.0%, from $141,921 for the three months ended
March 31, 1998 to $151,899 for the three months ended March 31, 1999, primarily
as a result of the growth of assets.
Costs and Expenses. Total expenses increased 25% from $277,394 to $346,229
for the three months ended March 31, 1998 and 1999, respectively. Such increase
was primarily attributable to the expenses associated with the Company's status
as a reporting public company, as well as amortization of value of purchased
insurance business relating to Great Midwest. Such amortization is expected to
continue, but at reduced levels, over the premium-paying life of the acquired
policies.
Losses. The Company reported a decrease in net loss of 11%, reporting a net
loss of $78,317 for the three months ended March 31, 1999, compared to a net
loss of $87,589 for the three months ended March 31, 1998. The decrease in net
loss was due primarily to the Company's realization of its growth strategy and
continued control of expenses.
The Company's loss per share from continuing operations decreased to $0.04
per share for the three months ended March 31, 1999, compared to a loss of $0.05
per share for the three months ended March 31, 1998. Net loss per share for the
comparable periods remained constant at $.04 per share. The weighted average
shares outstanding for each period, taking into the account the 5-for-2 stock
split effected in September 1998, were 2,086,412 for 1999 and 2,027,968 for
1998.
Liquidity and Capital Resources
Liquidity
The principal requirements for liquidity in connection with the Company's
operations are its contractual obligations to policyholders and annuitants. The
Company's contractual obligations include payments of surrender benefits,
contract withdrawals, claims under outstanding insurance policies and annuities,
and policy loans. Payment of surrender benefits is a function of "persistency,"
which is the extent to which insurance policies are maintained by the
policyholder. Policyholders sometimes do not pay premiums, thus causing their
policies to lapse, or policyholders may choose to surrender their policies for
their cash surrender value. If actual experience is different from the initial
or acquisition date assumptions, a gain or loss could result. Depending on the
nature of the underlying policy, a lapse or surrender may result in surrender
charge revenue or surrender benefit expense. Such amounts may be less than, or
greater than, unamortized acquisition expenses and/or the related policy
reserves; accordingly, current period earnings may either increase or decrease.
Additionally, policy lapses and surrenders may result in lost future revenues
and possibly profitability associated with the policy.
10
<PAGE>
A significant number of the life insurance policies issued by BCLIC, the
Louisiana life insurance company acquired by the Company in January 1998,
contained a feature which provided that after paying premiums on the policy for
eight years the policyholder could elect to (i) continue paying premiums and the
death benefit coverage would double or (ii) convert to a paid-up policy with the
original death benefit coverage if the cash value and accumulated policy
dividends were sufficient. In response to inquiries from policyholders that had
completed their eighth year of premiums in 1997, BCLIC notified the
policyholders that, because policy dividends had not been paid, the option to
convert to a paid-up policy with the original death benefit was not available
and the only options were to continue paying premiums and receive "double
coverage" or exercise one of the nonforfeiture provisions, i.e., surrender the
policy for its cash surrender value or convert to reduced paid-up or extended
term coverage. Management believes that the nature of BCLIC's notification in
1997 encouraged policy surrender rather than policy continuation, thus resulting
in a large number of policies surrendered. Although the continued surrender or
lapse of BCLIC's policies at a similar or increased rate could have an adverse
effect on the Company's operations, BCLIC is now actively encouraging policy
continuation, and policy surrenders have been reduced to two surrenders for the
three months ended March 31, 1999, compared to 18 policy surrenders for the
three months ended March 31, 1998.
Capital Resources
Although the Company currently has a $150,000 bank line of credit, it funds
most of its activity directly from cash flow from operations and cash flow from
financing activities, which includes deposits to policyholders' account
balances. The line of credit extends to July 1999, with amounts borrowed
thereunder bearing interest at prime. At March 31, 1999, $150,000 was
outstanding under the line of credit. In April 1999, the Company repaid $100,000
of the outstanding amount and, as of the date of this Report, the Company has
$50,000 available under the credit facility.
Generally, the Company has financed its loans to medical receivable
factoring entities from collateralized notes payable to individuals. The loans
and the notes payable generally have corresponding three-year terms with
interest paid semiannually or allowed to compound.
On January 13, 1999, the Company acquired 100% of the outstanding common
stock of Great Midwest. The total cost of the acquisition was approximately
$939,000. Of the purchase price, cash of $607,000 was paid to seven of eight
stockholders with the eighth stockholder receiving a promissory note for a
principal amount of $332,000, payable in three equal annual installments at an
annual interest rate of 6% on the unpaid principal balance. The Company
partially funded the cash portion of the purchase price with a $350,000 loan
from a bank. The loan accrues interest at an index rate plus .5%, payable
monthly, and matures July 9, 1999.
On January 11, 1999, a registration statement relating to a $5 million
public offering of the Company's common stock was declared effective by the
Securities and Exchange Commission (the "SEC"). In accordance with the terms of
the offering, the Company escrowed offering proceeds with UMB Oklahoma Bank,
National Association, until the minimum offering of $700,000 had been obtained.
As of the date of this Report, an aggregate on $726,680 has been received by the
Company, representing the sale of 145,336 shares of common stock pursuant to the
offering. Pursuant to the registration statement, the Company may continue its
offering until October 31, 1999, or elect to terminate the offering at any time
prior to such date and at less than the maximum offering. In no event, however,
will the Offering extend beyond October 31, 1999. The Company plans to use a
portion of the proceeds of the offering to repay the $350,000 bank borrowing
incurred to fund the acquisition of Great Midwest.
The Company believes that the net proceeds of the public offering will
allow it to continue to grow its asset base while maintaining surplus/liability
ratios within acceptable industry norms. The level of additional activity to be
achieved will be dependent upon the Company's ability to continue to generate
income internally or to generate capital from outside sources.
The Company has made and intends to make substantial capital expenditures
in connection with its subsidiaries' marketing programs. Historically, the
Company has funded these expenditures from cash flow from operations.
11
<PAGE>
Year 2000 Readiness
The "Year 2000" or "Y2K" problem is the result of computer programs being
written using two digits (rather than four) to define the applicable year. Many
existing computer programs use only two digits to identify a year in date field.
These programs were designed and developed without considering the impact of the
upcoming change in the century. If not corrected, this could result in a system
failure or calculations of erroneous results by or at the year 2000.
The Company purchased its current information technology in 1997 after
extensive research, analysis and compliance testing, and believes that such
system is "Y2K compliant." Additionally, as part of the Company's assessment of
its readiness to manage Year 2000 issues, it has communicated with significant
customers and suppliers to determine the extent to which the Company's
operations are vulnerable to third parties' failure to correct their own Year
2000 issues. Based on the overall assessment performed, the Company is not
aware of any material impact on their systems relating to the transition to the
Year 2000. The Company's total cost of Year 2000 related issues is not expected
to a have a material adverse effect on the Company's consolidated results of
operations.
12
<PAGE>
Part II - Other Information
Item 2. Changes in Securities and Use of Proceeds
In January 1999, the Company commenced an initial public offering ("IPO")
of a minimum of 140,000 shares, and a maximum of 1,000,000 shares, of common
stock, par value $.01 per share (the "Common Stock"), at a public offering price
of $5.00 per share, pursuant to the Company's final prospectus dated January 11,
1999 (the "Prospectus"). The Prospectus was contained in the Company's
Registration Statement on Form SB-2, which was declared effective by the SEC
(SEC File No. 333-65097) on January 11, 1999. Pursuant to the registration
statement, the Company may continue its offering until October 31, 1999, or
elect to terminate the offering at any time prior to such date and at less than
the maximum offering. In no event, however, will the offering extend beyond
October 31, 1999. The shares of Common Stock are being offered directly to
potential subscribers on a direct participation basis by the Company. Offers and
sales are made only through directors and executive officers of the Company,
none of whom receive any commissions or other form of remuneration in connection
with the sale of shares.
As of the date of this Report, an aggregate of $726,680 has been received
by the Company, representing the sale of 145,336 shares of Common Stock pursuant
to the IPO. The aggregate amount of expenses incurred by the Company through
March 31, 1999 in connection with the issuance and distribution of the shares of
Common Stock offered and sold in the IPO to date were approximately $110,000,
consisting of legal, accounting and printing costs. None of such amounts were
paid to underwriters. None of the expenses paid by the Company in connection
with the IPO were paid, directly or indirectly, to directors, officers, persons
owning ten percent or more of the Company's equity securities, or affiliates of
the Company.
At the date of this Report, the net proceeds to the Company from the IPO,
after deducting offering expenses, were approximately $616,680.
As of March 31, 1999, the Company had not applied any of the net proceeds
to any of the stated uses described in the Prospectus.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Exhibit
------------- -----------------------------------------
27.1* Financial Data Schedule
* Filed electronically herewith
(b) Reports on Form 8-K
On January 29, 1999, the Company filed a Form 8-K reporting the
acquisition of Great Midwest. No financial statements were filed as a part
of the Report on Form 8-K.
13
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SUMMIT LIFE CORPORATION
an Oklahoma corporation
Date: May 14, 1999 /s/ Charles L. Smith
--------------------------------------------
Charles L. Smith
President and Chief Operating Officer
Date: May 14, 1999 /s/ Quinton L. Hiebert
--------------------------------------------
Quinton L. Hiebert
Vice-President and Chief Financial Officer
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> MAR-31-1999 MAR-31-1998
<DEBT-HELD-FOR-SALE> 4,188,787 4,366,690
<DEBT-CARRYING-VALUE> 0 0
<DEBT-MARKET-VALUE> 0 0
<EQUITIES> 47,720 30,132
<MORTGAGE> 252,021 210,238
<REAL-ESTATE> 78,857 75,868
<TOTAL-INVEST> 5,884,466 5,646,118
<CASH> 1,902,252 1,501,925
<RECOVER-REINSURE> 0 0
<DEFERRED-ACQUISITION> 660,160 418,828
<TOTAL-ASSETS> 9,254,789 8,541,166
<POLICY-LOSSES> 0 0
<UNEARNED-PREMIUMS> 0 0
<POLICY-OTHER> 0 0
<POLICY-HOLDER-FUNDS> 6,094,598 5,891,797
<NOTES-PAYABLE> 1,939,612 1,176,743
0 0
0 0
<COMMON> 21,843 184,219
<OTHER-SE> 1,212,770 1,031,960
<TOTAL-LIABILITY-AND-EQUITY> 9,254,789 8,341,166
83,172 32,874
<INVESTMENT-INCOME> 151,899 141,921
<INVESTMENT-GAINS> 2,763 1,489
<OTHER-INCOME> 18,140 0
<BENEFITS> 18,172 23,350
<UNDERWRITING-AMORTIZATION> 33,886 73,765
<UNDERWRITING-OTHER> 294,171 180,279
<INCOME-PRETAX> (90,255) (101,110)
<INCOME-TAX> 1,157 531
<INCOME-CONTINUING> (89,098) (100,579)
<DISCONTINUED> 10,781 12,990
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (78,317) (87,589)
<EPS-PRIMARY> (.04) (.04)
<EPS-DILUTED> (.04) (.04)
<RESERVE-OPEN> 0 0
<PROVISION-CURRENT> 0 0
<PROVISION-PRIOR> 0 0
<PAYMENTS-CURRENT> 0 0
<PAYMENTS-PRIOR> 0 0
<RESERVE-CLOSE> 0 0
<CUMULATIVE-DEFICIENCY> 0 0
</TABLE>
