<PAGE> 1
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 JUNE 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 33-58677
THE TRAVELERS LIFE AND ANNUITY COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CONNECTICUT 06-0904249
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183
(Address of principal executive offices) (Zip Code)
(860) 277-0111
(Registrant's telephone number, including area code)
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
As of the date hereof, there were outstanding 30,000 shares of common stock, par
value $100 per share, of the registrant, all of which were owned by The
Travelers Insurance Company, an indirect wholly owned subsidiary of Travelers
Group Inc.
REDUCED DISCLOSURE FORMAT
The registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced
disclosure format.
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<TABLE>
<CAPTION>
THE TRAVELERS LIFE AND ANNUITY COMPANY
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page
<S> <C>
ITEM 1. FINANCIAL STATEMENTS
Condensed Statements of Income and Retained Earnings for the
Three and Six Months Ended June 30, 1998 and 1997 (unaudited)....................3
Condensed Balance Sheets as of June 30, 1998 (unaudited) and
December 31, 1997................................................................4
Condensed Statements of Cash Flows for the
Six Months Ended June 30, 1998 and 1997 (unaudited)..............................5
Notes to Condensed Financial Statements (unaudited)..............................6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS....................................9
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.......................................12
SIGNATURES......................................................................13
</TABLE>
2
<PAGE> 3
THE TRAVELERS LIFE AND ANNUITY COMPANY
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED)
($ IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
- ----------------------------------------------------------------------------------------------------------------------------
1998 1997 1998 1997
---- ---- ---- ----
REVENUES
<S> <C> <C> <C> <C>
Premiums $ 3,495 $ 5,518 $ 12,530 $ 11,609
Net investment income 41,753 40,530 81,781 79,775
Realized investment gains 4,279 5,599 7,215 12,884
Other revenues 6,551 1,868 11,559 3,455
- ----------------------------------------------------------------------------------------------------------------------------
Total Revenues 56,078 53,515 113,085 107,723
- ----------------------------------------------------------------------------------------------------------------------------
BENEFITS AND EXPENSES
Current and future insurance benefits 18,094 19,093 41,172 43,392
Interest credited to contractholders 12,228 7,718 24,362 13,988
Amortization of deferred acquisition costs and
value of insurance in force 5,592 764 7,371 2,666
Other operating expenses 3,287 2,729 6,733 4,567
- ----------------------------------------------------------------------------------------------------------------------------
Total Benefits and Expenses 39,201 30,304 79,638 64,613
- ----------------------------------------------------------------------------------------------------------------------------
Income before federal income taxes 16,877 23,211 33,447 43,110
Federal income taxes 5,893 8,109 11,680 15,059
- ----------------------------------------------------------------------------------------------------------------------------
Net income 10,984 15,102 21,767 28,051
Retained earnings at beginning of period 235,853 180,647 225,070 167,698
- ----------------------------------------------------------------------------------------------------------------------------
Retained earnings at end of period $246,837 $195,749 $246,837 $195,749
============================================================================================================================
</TABLE>
See Notes to Condensed Financial Statements.
3
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THE TRAVELERS LIFE AND ANNUITY COMPANY
CONDENSED BALANCE SHEETS
($ IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30, 1998 DECEMBER 31, 1997
- ----------------------------------------------------------------------- --------------------------- -------------------------
ASSETS (UNAUDITED)
<S> <C> <C>
Investments $2,263,067 $2,145,127
Separate and variable accounts 1,358,143 812,059
Deferred acquisition costs and value of insurance in force 127,487 90,966
Deferred federal income taxes 21,284 33,661
Other assets 80,070 71,192
- ----------------------------------------------------------------------- --------------------------- -------------------------
Total Assets $3,850,051 $3,153,005
- ----------------------------------------------------------------------- --------------------------- -------------------------
LIABILITIES
Future policy benefits $ 967,964 $ 971,602
Contractholder funds 916,223 818,971
Separate and variable accounts 1,358,143 812,059
Other liabilities 102,195 84,712
- ----------------------------------------------------------------------- --------------------------- -------------------------
Total Liabilities 3,344,525 2,687,344
- ----------------------------------------------------------------------- --------------------------- -------------------------
SHAREHOLDER'S EQUITY
Common stock, par value $100; 100,000 shares authorized; 30,000
issued and outstanding 3,000 3,000
Additional paid-in capital 167,314 167,314
Retained earnings 246,837 225,070
Accumulated other changes in equity from nonowner sources 88,375 70,277
- ----------------------------------------------------------------------- --------------------------- -------------------------
Total Shareholder's Equity 505,526 465,661
- ----------------------------------------------------------------------- --------------------------- -------------------------
Total Liabilities and Shareholder's Equity $3,850,051 $3,153,005
======================================================================= =========================== =========================
</TABLE>
See Notes to Condensed Financial Statements.
4
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THE TRAVELERS LIFE AND ANNUITY COMPANY
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
INCREASE (DECREASE) IN CASH
($ IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1998 1997
- ---------------------------------------------------------------------------------------- ----------------- ----------------
<S> <C> <C>
Net cash provided by (used in) operating activities $(46,640) $20,808
- ---------------------------------------------------------------------------------------- ----------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of investments
Fixed maturities 56,781 81,423
Mortgage loans 18,076 5,585
Proceeds from sales of investments
Fixed maturities 349,859 540,058
Equity securities 4,350 9,579
Mortgage loans - 3,913
Real estate held for sale - 4,493
Purchases of investments
Fixed maturities (457,513) (717,358)
Equity securities (12,570) (6,259)
Mortgage loans (9,395) (30,584)
Policy loans, net (992) (597)
Short-term securities purchases, net (14,495) (55,096)
Other investments purchases, net (7,545) (2,576)
Securities transactions in course of settlement, net 23,010 14,419
- ---------------------------------------------------------------------------------------- ----------------- ----------------
Net cash used in investing activities (50,434) (153,000)
- ---------------------------------------------------------------------------------------- ----------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Contractholder fund deposits 165,929 190,334
Contractholder fund withdrawals (68,677) (58,138)
- ---------------------------------------------------------------------------------------- ----------------- ----------------
Net cash provided by financing activities 97,252 132,196
- ---------------------------------------------------------------------------------------- ----------------- ----------------
Net increase in cash 178 4
Cash at beginning of period 1,563 -
- ---------------------------------------------------------------------------------------------------------------------------
Cash at end of period $ 1,741 $ 4
======================================================================================== ================= ================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income taxes paid $25,330 $17,267
======================================================================================== ================= ================
</TABLE>
See Notes to Condensed Financial Statements.
5
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THE TRAVELERS LIFE AND ANNUITY COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
The interim financial statements of The Travelers Life and Annuity Company
(the Company), a wholly owned subsidiary of The Travelers Insurance
Company, an indirect wholly owned subsidiary of Travelers Group Inc.
(Travelers Group), have been prepared in conformity with generally accepted
accounting principles (GAAP) and are unaudited. In the opinion of
management, the interim financial statements reflect all adjustments
necessary (all of which were normal recurring adjustments), for a fair
statement of results for the periods reported. The accompanying condensed
financial statements should be read in conjunction with the financial
statements and related notes included in the Company's Form 10-K for the
year ended December 31, 1997.
ACCOUNTING CHANGES
Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 127, "Deferral of the Effective Date of Certain
Provisions of SFAS 125" (FAS 127), which was effective for transfers and
pledges of certain financial assets and collateral made after December 31,
1997. The adoption of FAS 127 created additional assets and liabilities on
the Company's condensed consolidated statement of financial position
related to the recognition of securities provided and received as
collateral. At June 30, 1998, the impact of FAS 127 on the Company's
condensed consolidated statement of financial position was not significant.
Reporting Comprehensive Income
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (FAS 130).
FAS 130 establishes standards for the reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. All items that are required to be recognized under
accounting standards as components of comprehensive income are required to
be reported in an annual financial statement that is displayed with the
same prominence as other financial statements. FAS 130 stipulates that
comprehensive income reflect the change in equity of an enterprise during a
period from transactions and other events and circumstances from nonowner
sources. Comprehensive income will thus represent the sum of net income and
other changes in stockholder's equity from nonowner sources. The
accumulated balance of other changes in equity from nonowner sources is
required to be displayed separately from retained earnings and additional
paid-in capital in the balance sheet. The adoption of FAS 130 resulted
primarily in the reporting of unrealized gains and losses on investments in
debt and equity securities in changes in equity from nonowner sources. The
Company's total changes in equity from nonowner sources are as follows:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
($ in thousands) 1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $10,984 $15,102 $21,767 $28,051
Other changes in equity from nonowner sources 16,674 35,212 18,098 (4,462)
------ ------ ------ ------
Total Changes in Equity from Nonowner Sources $27,658 $50,314 $39,865 $23,589
======= ======= ======= =======
</TABLE>
6
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THE TRAVELERS LIFE AND ANNUITY COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
FUTURE APPLICATION OF ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board (FASB) issued FAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities"
(FAS 133), which will become effective for the Company on January 1, 2000.
FAS 133 will significantly change the accounting treatment of end-user
derivative and foreign exchange contracts by the Company and its customers.
Depending on the underlying risk management strategy, these accounting
changes could affect reported earnings, assets, liabilities, and
stockholders' equity. As a result, the Company and the customers to which
it provides derivatives and foreign exchange products will have to
reconsider their risk management strategies, since the new standard will
not reflect the results of many of those strategies in the same manner as
current accounting practice. The Company is in the process of evaluating
the potential impacts of the new accounting standard.
In March 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants (AcSEC of the AICPA) issued
Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" (SOP 98-1). SOP 98-1 provides
guidance on accounting for the costs of computer software developed or
obtained for internal use and for determining when specific costs should be
capitalized or expensed. SOP 98-1 is effective for financial statements for
fiscal years beginning after December 15, 1998 and the effect of the
initial adoption is to be reported as a cumulative catch-up adjustment.
Restatement of previously issued financial statements is not allowed. The
Company is currently determining what impact, if any, that SOP 98-1 will
have on its consolidated financial statements or when it will be
implemented.
Certain reclassifications have been made to the prior year's financial
statements to conform to the current year's presentation.
2. SHAREHOLDER'S EQUITY
Statutory capital and surplus of the Company was $328.2 million at December
31, 1997. The Company is currently subject to various regulatory
restrictions that limit the maximum amount of dividends available to be
paid to its parent without prior approval of insurance regulatory
authorities. Statutory surplus of $63.6 million is available in 1998 for
dividend payments by the Company without prior approval of the Connecticut
Insurance Department. The Company has not paid dividends to its parent
during the six months ended June 30, 1998.
3. COMMITMENTS AND CONTINGENCIES
The Company is a defendant in various litigation matters in the normal
course of business. Although there can be no assurances, as of June 30,
1998, the Company believes, based on information currently available, that
the ultimate resolution of these legal proceedings would not be likely to
have a material adverse effect on its results of operations, financial
condition or liquidity.
7
<PAGE> 8
THE TRAVELERS LIFE AND ANNUITY COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. PENDING MERGER
On April 6, 1998, Travelers Group announced that it had entered into a
merger agreement with Citicorp, pursuant to which Citicorp will be merged
with and into a newly formed, wholly owned subsidiary of Travelers Group
(the Merger). On July 22, 1998, the stockholders of Travelers Group and
Citicorp approved the Merger.
In order to consummate the Merger, Travelers Group has applied to the Board
of Governors of the Federal Reserve System (the Federal Reserve Board) to
become a bank holding company under the provisions of the Bank Holding
Company Act of 1956 (the BHCA). A bank holding company and its affiliates
may not engage in activities that are not permissible under the BHCA,
including, generally, insurance underwriting. However, under current law,
the Company's existing businesses can be retained and operated by Travelers
Group for at least a two-year period after the Merger (the BHCA Compliance
Period), which may be extended for three additional one-year periods by the
Federal Reserve Board, if, in its judgment, an extension would not be
detrimental to the public interest.
Upon consummation of the Merger, and as a direct result of Travelers Group
becoming a bank holding company, the BHCA will impose certain restrictions
on Travelers Group's operations going forward, including the ability to
make acquisitions of certain insurance underwriters domesticated in the
United States. It is not expected that such restrictions will impede the
Company's existing businesses in any material respect or preclude Travelers
Group from expanding its existing insurance underwriting activities (other
than by acquisition of certain insurance underwriters). At this time, the
Company believes that compliance with applicable law by Travelers Group and
the Company following the Merger will not have a material adverse effect on
the Company's financial condition or results of operations.
There is pending federal legislation that would, if enacted, amend the BHCA
to authorize a bank holding company to own certain insurance underwriters.
There is no assurance that such legislation will be enacted. Before the
expiration of the BHCA Compliance Period, each of the Company and Travelers
Group will evaluate its alternatives in order to comply with whatever laws
are then applicable.
8
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THE TRAVELERS LIFE AND ANNUITY COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's narrative analysis of the results of operations is presented in
lieu of Management's Discussion and Analysis of Financial Condition and Results
of Operations, pursuant to General Instruction H(2)(a) of Form 10-Q.
RESULTS OF OPERATIONS ($ in millions)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1998 1997
---- ----
<S> <C> <C>
Revenues $113.1 $107.7
====== ======
Net income (1) $21.8 $28.1
===== =====
</TABLE>
(1) Net income includes $4.7 million and $8.4 million of reported net after-tax
investment portfolio gains in 1998 and 1997, respectively.
The Travelers Life and Annuity Company (the Company) offers fixed and variable
deferred annuities and individual life insurance to individuals and small
businesses. It also provides traditional life insurance and single premium group
annuity close-out contracts.
The individual life and deferred annuity business is marketed primarily through
the Financial Consultants of Salomon Smith Barney, an affiliate of the Company,
and a nationwide network of independent agents. The majority of the annuity
business and a substantial portion of the individual life business written by
the Company is accounted for as investment contracts, with the result that the
amounts collected from contractholders are not included in revenues.
The Company has reserves related to structured settlement contracts that provide
guarantees for the contractholders independent of the investment performance of
the assets held in the related separate account. The assets held in the separate
account are owned by the Company and contractholders do not share in their
investment performance. These contracts were purchased by the insurance
subsidiaries of Travelers Property Casualty Corp. (TAP), an affiliate of the
Company, in connection with the settlement of certain of their policyholder
obligations. Effective April 1, 1998, any new contracts were, and will be,
written out of the Company's parent, The Travelers Insurance Company (TIC), an
indirect wholly owned subsidiary of Travelers Group.
Net income for the six months ended June 30, 1998 was $21.8 million, compared to
$28.1 million for the six months ended June 30, 1997. Excluding net realized
investment gains and losses, operating earnings decreased from $19.7 million in
1997 to $17.1 million in 1998. This decrease was driven by the run-off of the
structured settlement business and a decrease in the single premium group
annuity close-out business investment margin, partially offset by strong
investment results in the deferred annuity and universal life businesses.
9
<PAGE> 10
THE TRAVELERS LIFE AND ANNUITY COMPANY
PREMIUMS AND DEPOSITS ($ in thousands)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1998 1997
---- ----
<S> <C> <C>
Deferred annuities $547,371 $237,737
Structured settlements 9,272 35,905
Universal life 41,944 13,076
Traditional life 7,136 4,573
Single premium group close-out 283 214
-------- --------
Total $606,006 $291,505
======== ========
</TABLE>
The increase in deferred annuity and universal life deposits is attributable to
strong sales of products distributed by the Financial Consultants of Salomon
Smith Barney, an affiliate of the Company. The structured settlement decrease
reflects a change in Company policy that all new structured settlements be sold
by TIC.
Policyholder benefit reserves, contractholder funds and separate account
reserves totaled $3.2 billion at June 30, 1998, up from $2.1 billion at June 30,
1997, primarily as a result of growth in the individual life and deferred
annuity business.
PENDING MERGER
On April 6, 1998, Travelers Group announced that it had entered into a Merger
Agreement with Citicorp, pursuant to which Citicorp will be merged with and into
a newly formed, wholly owned subsidiary of Travelers Group (the Merger). On July
22, 1998, the stockholders of Travelers Group and Citicorp approved the Merger.
See Note 4 to the Condensed Financial Statements for a discussion of the
pending merger.
INSURANCE REGULATIONS
Risk-based capital requirements are used as early warning tools by the National
Association of Insurance Commissioners and the states to identify companies that
merit further regulatory action. At June 30, 1998, the Company had adjusted
capital in excess of amounts requiring any regulatory action.
The Company is subject to various regulatory restrictions that limit the maximum
amount of dividends available to be paid to its parent without prior approval of
insurance regulatory authorities in the state of domicile. The maximum amount of
dividends available to be paid to the Company's shareholder in 1998 without
prior approval of the Connecticut Insurance Department is $63.6 million. The
Company has not paid any dividends to its parent during the six months ended
June 30, 1998.
10
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THE TRAVELERS LIFE AND ANNUITY COMPANY
FUTURE APPLICATIONS OF ACCOUNTING STANDARDS
See Note 1 to the Condensed Financial Statements for a discussion of recently
issued accounting pronouncements.
FORWARD-LOOKING STATEMENTS
Certain of the statements contained herein that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. The Company's actual results may differ materially from
those included in the forward-looking statements. Forward-looking statements are
typically identified by the words "believe", "expect", "anticipate", "intend",
"estimate", and similar expressions. These forward-looking statements involve
risks and uncertainties including, but not limited to, the resolution of legal
proceedings and the conduct of the Company's business following the pending
Citicorp merger.
11
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THE TRAVELERS LIFE AND ANNUITY COMPANY
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION FILING METHOD
----------- ----------- -------------
<S> <C> <C>
3.01 Charter of The Travelers Life and Annuity Company (the "Company"), as amended on
April 10, 1990, incorporated herein by reference to Exhibit
6(a) to the Registration Statement on Form N-4, File No.
33-58131, filed on March 17, 1995.
3.02 By-laws of the Company, as amended on October 20, 1994,
incorporated herein by reference to Exhibit 6(b) to the
Registration Statement on Form N-4, File No.
33-58131, filed on March 17, 1995.
27.01 Financial Data Schedule Electronic
</TABLE>
(b) REPORTS ON FORM 8-K.
On April 22, 1998, the Company filed a current report on Form 8-K dated April 5,
1998, reporting under Item 5 thereof, that Travelers Group Inc., the Company's
ultimate parent, had entered into a Merger Agreement with Citicorp, pursuant to
which Citicorp will be merged with and into Travelers Group Inc.
12
<PAGE> 13
\ THE TRAVELERS LIFE AND ANNUITY COMPANY
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.
THE TRAVELERS LIFE AND ANNUITY COMPANY
(Registrant)
Date August 13, 1998 /s/ Ian R. Stuart
---------------- ------------------
Ian R. Stuart
Chief Financial Officer and Chief Accounting
Officer
(Principal Financial Officer)
13
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF THE TRAVELERS LIFE AND ANNUITY COMPANY AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 2,263,067
<CASH> 1,741
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 127,487
<TOTAL-ASSETS> 3,850,051
<POLICY-LOSSES> 967,964
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 2,274,366
<NOTES-PAYABLE> 0
0
0
<COMMON> 3,000
<OTHER-SE> 502,526
<TOTAL-LIABILITY-AND-EQUITY> 3,850,051
12,530
<INVESTMENT-INCOME> 81,781
<INVESTMENT-GAINS> 7,215
<OTHER-INCOME> 11,559
<BENEFITS> 65,534
<UNDERWRITING-AMORTIZATION> 7,371
<UNDERWRITING-OTHER> 6,733
<INCOME-PRETAX> 33,447
<INCOME-TAX> 11,680
<INCOME-CONTINUING> 21,767
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,767
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
