<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended MARCH 31, 1996 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ______ to ______.
Commission file number 0-19439
MAIC Holdings, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Alabama 63-1137505
- - ------------------------------- -----------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation of organization)
100 Brookwood Place, Birmingham, AL 35209
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(205) 877-4400
-------------------------------
(Registrant's telephone number,
including area code)
Indicate by check mark whether the registrant (l) 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 March 31 1996, there were 9,369,832 shares of the registrant's common
stock outstanding.
Page 1 of 13
<PAGE> 2
Table of Contents
<TABLE>
<S> <C>
Part I - Financial Information
Item l. Consolidated Financial Statements (Unaudited)
of MAIC Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . . . . . 13
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
<PAGE> 3
MAIC Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
MARCH 31 December 31
1996 1995
-----------------------------
<S> <C> <C>
ASSETS
Investments:
Fixed maturities available for sale, at market value $ 493,661,417 $ 483,734,285
Equity securities available for sale, at market value 7,641,990 6,614,805
Real estate, net 11,676,120 11,816,165
Investment in unconsolidated affiliate 3,645,231 3,534,585
Short-term investments 28,677,885 38,298,141
------------- -------------
Total investments 545,302,643 543,997,981
Cash and cash equivalents 8,828,300 4,238,067
Premiums receivable 35,204,738 20,416,767
Receivable from reinsurers 89,550,919 80,467,711
Prepaid reinsurance premiums 24,558,579 13,271,997
Deferred taxes 33,685,615 29,339,519
Other assets 28,783,379 28,746,446
------------- -------------
$ 765,914,173 $ 720,478,488
============= =============
LIABILITIES, MINORITY INTERESTS AND STOCKHOLDERS' EQUITY
Liabilities:
Policy liabilities and accruals:
Reserve for losses and loss adjustment expenses $ 447,317,310 $ 432,945,449
Unearned premiums 66,121,599 47,319,355
Reinsurance premiums payable 24,555,059 18,338,773
------------- -------------
Total policy liabilities 537,993,968 498,603,577
Income taxes payable 5,203,129 2,090,222
Other liabilities 13,906,286 11,771,560
------------- -------------
Total Liabilities 557,103,383 512,465,359
Commitments and contingencies - -
Minority interests 2,015,302 1,982,870
Stockholders' equity:
Common stock, par value $1 per share;
100,000,000 shares authorized; 9,376,956 shares
issued including shares held in treasury 9,376,956 9,376,956
Additional paid-in capital 92,012,826 92,012,826
Net unrealized gains on securities available for sale, net of
deferred taxes of $3,915,892 and $7,195,663, respectively 7,272,372 13,363,374
Retained earnings 98,271,642 91,415,411
------------- -------------
206,933,796 206,168,567
Less treasury stock at cost, 7,124 shares (138,308) (138,308)
------------- -------------
Total stockholders' equity 206,795,488 206,030,259
------------- -------------
$ 765,914,173 $ 720,478,488
============= =============
</TABLE>
See accompanying notes.
3
<PAGE> 4
MAIC Holdings, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31
-----------------------------
1996 1995
------------ ------------
<S> <C> <C>
Revenues:
Direct and assumed premiums written $ 42,598,082 $ 39,075,464
============ ============
Premiums earned $ 29,018,707 $ 22,495,018
Premiums ceded (7,941,055) (4,659,932)
------------ ------------
Net premiums earned 21,077,652 17,835,086
Net investment income 8,722,603 6,997,583
Other income 459,307 514,719
------------ ------------
Total revenues 30,259,562 25,347,388
Expenses:
Losses and loss adjustment expenses 25,407,255 19,040,012
Reinsurance recoveries (9,375,208) (5,096,174)
------------ ------------
Net losses and loss adjustment expenses 16,032,047 13,943,838
Underwriting, acquisition and insurance expenses 5,734,216 4,056,649
------------ ------------
Total expenses 21,766,263 18,000,487
------------ ------------
Income before income taxes and minority interests 8,493,299 7,346,901
Provision for income taxes:
Current expense 2,670,961 3,306,265
Deferred (benefit) (1,066,324) (1,855,644)
------------ ------------
1,604,637 1,450,621
------------ ------------
Income before minority interests 6,888,662 5,896,280
Minority interests (32,431) 137,473
------------ ------------
Net income $ 6,856,231 $ 6,033,753
============ ============
Earnings per share:
Net Income $ 0.73 $ 0.64
============ ============
Weighted average number of common shares outstanding 9,369,832 9,369,408
============ ============
</TABLE>
See accompanying notes.
4
<PAGE> 5
MAIC Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
-------------------------------
1996 1995
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 6,856,231 $ 6,033,753
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,037,287 855,871
Net realized (gain) loss on sale of Investments (45,285) (111,713)
Deferred income taxes (1,066,324) (1,855,644)
Other (78,221) (116,316)
Changes in assets and liabilities
Premiums receivable (14,787,971) (18,481,624)
Income taxes receivable/payable 3,112,907 3,228,265
Receivable from reinsurers (9,083,208) (4,836,572)
Prepaid reinsurance premiums (11,286,582) (14,084,314)
Other assets (567,193) 1,204,830
Reserve for losses and loss adjustment expenses 14,371,861 11,464,226
Unearned premiums 18,802,244 24,258,009
Reinsurance premiums payable 6,216,286 8,049,612
Other liabilities 2,134,726 2,739,224
------------ ------------
Net cash provided by operating activities 15,616,758 18,347,607
INVESTING ACTIVITIES
Purchases of fixed maturities available for sale (44,780,311) (27,454,263)
Proceeds from sale or maturities of fixed
maturities available for sale 24,337,156 11,427,542
Net (increase) decrease in short-term investments 9,620,256 1,387,608
Purchase of subsidiaries - (1,838,118)
Other (203,626) (364,843)
------------ ------------
Net cash used in investing activities (11,026,525) (16,842,074)
Increase in cash and cash equivalents 4,590,233 1,505,533
Cash and cash equivalents at beginning of period 4,238,067 5,021,971
------------ ------------
Cash and cash equivalents at end of period $ 8,828,300 $ 6,527,504
============ ============
</TABLE>
See accompanying notes.
5
<PAGE> 6
MAIC Holdings, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
(Unaudited)
1. PLAN OF EXCHANGE AND REORGANIZATION
MAIC Holdings, Inc. is a Delaware corporation formed by Mutual Assurance, Inc.
to serve as a holding company for Mutual Assurance and subsidiaries. On August
31, 1995, Mutual Assurance and MAIC Holdings, Inc. consummated an Agreement
and Plan of Exchange which was accounted for in a manner similar to a pooling
of interests. Under the terms of the agreement, Mutual Assurance shareholders
exchanged the 8,846,429 of issued and outstanding shares, par value $1 per
share, for an equal amount of shares of the common stock of MAIC Holdings,
Inc., par value $1 per share. The common stock of MAIC Holdings, Inc.
succeeded Mutual Assurance common stock for trading on the Nasdaq/NMS under the
trading symbol "MAIC."
At December 31, 1995, MAIC Holdings, Inc. had 100 million shares of authorized
common stock and 50 million shares of authorized preferred stock. The Board of
Directors has the authorization to determine the provisions for the issuance of
shares of the preferred stock, including the number of shares to be issued and
the designations, powers, preferences and rights, and the qualifications,
limitations or restrictions of such shares. At March 31, 1996, the Board of
Directors had not authorized the issuance of any preferred stock nor determined
any provisions for the preferred stock.
2. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the
accounts of MAIC Holdings, Inc. and its majority owned subsidiaries, together
referred to as the Company. The financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and notes
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,
1996 are not necessarily indicative of the results that may be expected for the
year ending December 31, 1996. For further information refer to the December
31, 1995 audited consolidated financial statements and accompanying notes.
3. INCOME TAXES
Income tax expense differs from the normal relationship to financial statement
income principally because of tax-exempt interest income.
4. RESERVES FOR LOSSES AND LOSS ADJUSTMENT EXPENSES
The reserves for losses and loss adjustment expenses represent management's
best estimate of the ultimate cost of all losses incurred but unpaid. Incurred
losses and loss adjustment expenses for the three-month periods ending March
31, 1996 and 1995 were principally based on the application of an expected loss
ratio to premiums earned. These loss ratios take into consideration prior loss
experience, loss trends, the Company's loss retention levels, changes in
frequency and severity of claims and rates charged.
6
<PAGE> 7
MAIC Holdings, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
(Unaudited)
5. INVESTMENTS
Proceeds from sales of investments in fixed maturities available for sale,
excluding prepayments of mortgage-backed securities, were $11,977,746 and
$9,498,906 during the three months ended March 31, 1996 and 1995, respectively.
Gross gains and losses from sales and prepayments of investments in fixed
maturities available for sale are included in other income as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31
---------------------------------
1996 1995
--------- ----------
<S> <C> <C>
Gross gains excluding prepayments of
mortgage-backed securities $ 182,175 $ 112,075
Gross gains from prepayments of
mortgage-backed securities 16,056 17,501
Gross (losses) from prepayments of
mortgage-backed securities (152,946) (17,863)
--------- ----------
Net gain (loss) from sales and prepayments $ 45,285 $ 111,713
========= ==========
</TABLE>
The amortized cost of fixed maturities and equity securities available for sale
was $490,115,143 and $469,789,477 at March 31, 1996 and December 31, 1995,
respectively.
6. EARNINGS PER SHARE
On December 14, 1995 the Board of Directors declared a 6% stock dividend. Cash
was paid to shareholders for fractional shares. Earnings per share data for
1995 has been restated as if the 1995 dividend had been declared on January 1,
1995.
7. COMMITMENTS AND CONTINGENCIES
The Company is involved in various legal actions arising primarily from claims
made under insurance policies. The legal actions arising from claims made
under insurance policies have been considered by the Company in establishing
its reserves. While the outcome of all legal actions is not presently
determinable, the Company's management and its legal counsel are of the opinion
that the settlement of these actions will not have a material adverse effect on
the Company's financial position or results of operations.
7
<PAGE> 8
MAIC Holdings, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements (continued)
(Unaudited)
8. BUSINESS EXPANSION
Effective January 1, 1995 the Company purchased 51.7% of the outstanding
capital voting stock of Physicians Insurance Company of Indiana (PIC-Indiana),
an Indiana provider of medical malpractice insurance. During 1995 the Company
acquired additional shares of the PIC-Indiana stock from various shareholders.
The combined purchases resulted in ownership of approximately 100% of the
outstanding capital voting stock of PIC-Indiana. The portion of operations at
March 31, 1995 which are attributable to the minority interest of PIC-Indiana
must be removed from the Company's consolidated statements of income. The
removal is shown in one line at the bottom of the consolidated statement of
income.
Effective July 16, 1995, the Company acquired the recurring medical
professional insurance business of Physicians Insurance Company of Ohio
(PIC-Ohio) and its subsidiary. The purchase price is included in other assets.
During first quarter 1996, MAIC Holdings, Inc. signed a letter of intent to
have MOMED Holding Company become a Missouri based subsidiary of MAIC Holdings,
Inc. MOMED Holding Company is the parent company of Missouri Medical Insurance
Company, which is a provider of medical malpractice insurance. Although the
terms of the agreement have not been determined, MAIC Holdings, Inc. does not
expect the ultimate purchase price to exceed 10% of the Company's stockholders'
equity.
8
<PAGE> 9
ITEM. 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
For purposes of this management discussion and analysis, the term
"Company" refers to MAIC Holdings, Inc. and its consolidated subsidiaries. The
Company's consolidated financial statements include the accounts of MAIC
Holdings, Inc. and its consolidated subsidiaries. The portion of operations
attributable to the 1996 and 1995 minority interests of PROActive Insurance and
the 1995 minority interest of PIC-Indiana must be removed from the Company's
consolidated statements of income. This removal is shown on one line at the
bottom of the consolidated statements of income.
MAIC Holdings, Inc. is a Delaware corporation formed by Mutual
Assurance to serve as a holding corporation for Mutual Assurance and other
subsidiaries. On August 31, 1995, Mutual Assurance and MAIC Holdings, Inc.
consummated an Agreement and Plan of Exchange (Plan of Exchange) which
generally provided that each share of common stock of Mutual Assurance, par
value $1 per share, would be exchanged for one share of common stock of MAIC
Holdings, Inc., par value $1 per share. MAIC Holdings, Inc. common stock
succeeded Mutual Assurance common stock for trading on the Nasdaq/NMS under the
trading symbol "MAIC."
The variances discussed below include amounts attributable to the
operations of all the companies. Although balances attributable to the
subsidiaries other than Mutual Assurance may be significant to specific
variances, they are not material to the total operations or the financial
condition of the Company.
LIQUIDITY AND CAPITAL RESOURCES
The payment of losses, loss adjustment expenses, and operating
expenses in the ordinary course of business remains the Company's principal
need for liquid funds. Cash used to pay these items has been provided by
operating activities. Cash provided from these activities was sufficient
during the first three months of 1996 to meet the Company's needs, and the
Company believes those sources will be sufficient to meet its cash needs for
operating purposes for at least the next twelve months. Prolonged and
increasing levels of inflation could cause increases in the dollar amount of
losses and loss adjustment expenses and may therefore adversely affect future
reserve development. To minimize such risk, the Company (i) maintains what its
management considers to be strong and adequate reinsurance, (ii) conducts
regular actuarial reviews to ensure, among other things, that reserves do not
become deficient, and (iii) maintains adequate asset liquidity.
The Company did not borrow any funds during the three months ended
March 31, 1996 and 1995, and currently has no requirements indicating a need to
borrow significant funds in the next twelve months. However, the need for
additional capital may arise in order to achieve the Company's ultimate goals
of expansion, as discussed in subsequent paragraphs. The Company continues to
have available through a lending institution a line of credit in the amount of
$40 million that could be used for these additional capital requirements. The
Company is not charged a fee nor is it required to maintain compensating
balances in connection with this line of credit.
9
<PAGE> 10
BUSINESS EXPANSION
The Company has undertaken efforts to expand its business to
accommodate multi-state risks and otherwise increase the volume of its
professional liability insurance book of business. Such efforts may include
expansion through acquisition of, or combination with, insurers doing business
in other states; reinsurance of risks insured by other insurers; and direct
writing of professional liability insurance and/or other health care related
insurance products in other states in which the Company is licensed to offer
such insurance.
Effective July 16, 1995, the Company acquired the recurring medical
professional insurance business of Physicians Insurance Company of Ohio and its
subsidiary. The purchase price is included in other assets.
Effective January 1, 1995, the Company purchased 51.7% of the
outstanding capital voting stock of PIC-Indiana, an Indiana provider of medical
malpractice insurance. During 1995 the Company acquired additional shares of
the PIC-Indiana stock. The combined purchases resulted in an ownership of
approximately 100% of the outstanding capital voting stock as of December 31,
1995.
During the first quarter of 1996, the Company signed a letter of
intent to have MOMED Holding Company become a Missouri based subsidiary of MAIC
Holdings, Inc. MOMED Holding Company is the parent company of Missouri Medical
Insurance Company, which is a provider of medical malpractice insurance.
Although the terms of the agreement have not been determined, MAIC Holdings,
Inc. does not expect the ultimate purchase price to exceed 10% of the Company's
stockholders' equity.
RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE
MONTHS ENDED MARCH 31, 1995
Premiums
The following table presents information related to consolidated
written and earned premiums and reinsurance expense (dollars in thousands):
<TABLE>
<CAPTION>
Three months ended
March 31
--------------------------- Increase
1996 1995 (Decrease)
--------------------------- ----------
<S> <C> <C> <C>
Direct and assumed premiums written $ 42,598 $ 39,075 $ 3,523
========== ========= ========
Premiums earned $ 29,019 $ 22,495 $ 6,524
Premiums ceded (7,941) (4,660) 3,281
---------- --------- --------
Net premiums earned $ 21,078 $ 17,835 $ 3,243
========== ========= ========
</TABLE>
The increase in premiums written for the quarter ended March 31, 1996
as compared to the same quarter in 1995 is due principally to premiums written
in the state of Ohio. Premiums earned increased due to new business written
subsequent to first quarter 1995; this new business includes premiums earned
attributable to the acquisition of the recurring medical professional insurance
business of Physicians Insurance Company of Ohio. The increase in premiums
ceded is directly related to the increases in earned premiums, and, as respects
new business, increased cessions of risks to reinsurers.
10
<PAGE> 11
Investment Income
The Company had consolidated net investment income of $8,723,000 for
the three months ended March 31, 1996, compared to $6,998,000 for the three
months ended March 31, 1995, for an increase of $1,725,000 (24.7%). The
increased income is primarily due to: (i) an increase in the yield on invested
assets, to 6.8% for the three months ended March 31, 1996 compared to 6.0% for
the same period in 1995, and (ii) an increase in the amount of invested assets.
The increase in the yield on invested assets primarily resulted from higher
available market rates of interest on both taxable and non-taxable investments.
For the purposes of the above discussion, invested assets are
comprised of fixed maturities, short-term investments, equities and investment
in unconsolidated subsidiary, and the earnings on such invested assets
constitute the related net investment income. The Company calculates the yield
on invested assets by dividing the related investment income (annualized for
interim periods) by the monthly average of invested assets.
The principal investment objective of the Company is to achieve a high
level of after-tax income while minimizing risk. Although fixed maturity
securities are purchased with the initial intent to hold such securities until
their maturity, disposals of securities prior to their respective maturities
may occur if management believes such disposals are consistent with the
Company's overall investment objectives, including maximizing after-tax yields.
Disposition of investments prior to maturity may result in a net gain or loss
which would be classified as "Other Income".
Losses
Consolidated loss and loss adjustment expenses (Losses) and the
related loss ratios are summarized in the following table (dollars in
thousands). The ratio for losses and loss adjustment expenses below is based
on premiums earned; the ratio for net losses and loss adjustment expenses is
based on net premiums earned.
<TABLE>
<CAPTION>
Three months ended
March 31, 1996 March 31, 1995
-------------------------- -------------------------
Loss Loss
Losses Ratio Losses Ratio
-------------------------- -------------------------
<S> <C> <C> <C> <C>
Losses and loss adjustment expenses $ 25,407 88% $ 19,040 85%
Reinsurance recoveries (9,375) (5,096)
--------- --------
Net losses and loss adjustment expenses $ 16,032 76% $ 13,944 78%
========= ========
</TABLE>
The Company's losses and loss adjustment expenses in the three months
ended March 31, 1996 reflect a loss ratio of 88% compared to a loss ratio of
85% for the three months ended March 31, 1995. Losses for both periods are
principally based on the application of an expected loss ratio to premiums
earned. These loss ratios reflect (i) consideration of prior loss experience
and (ii) changes in the frequency and severity of claims.
The increase in reinsurance recoveries primarily results from the
increase in losses and loss adjustment expenses and the increased cessions to
reinsurers.
11
<PAGE> 12
Underwriting, Acquisition, and Insurance Expenses
Consolidated expenses increased by $1,678,000 (41%) for the three
months ended March 31, 1996 compared to the three months ended March 31, 1995.
The increase results primarily from policy acquisition costs associated with
new business, along with other costs associated with the Company's current
business strategy. This strategy calls for the Company to continue
investigating potential acquisition opportunities and the possibility of
expansion into additional markets.
Income Taxes
The Company's effective tax rate for the quarter ended March 31, 1996
was 19%, compared to 20% for the quarter ended March 31, 1995: these rates were
both lower than the statutory rate of 35%. The principal reason for the
Company's lower effective tax rate is the effect of tax exempt investment
income.
12
<PAGE> 13
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit (27) required of Item 601 of Regulation SK-Financial Data
Schedule (for SEC use only).
(b) Reports on 8-K. 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 had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MAIC Holdings, Inc.
May 10, 1996 By: /s/ James J. Morello
-----------------------------------
James J. Morello, Treasurer
(duly authorized officer and
principal financial officer)
13
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) OF MAIC HOLDINGS, INC. AND
SUBSIDIARIES FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<DEBT-HELD-FOR-SALE> 493,661,417
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 7,641,990
<MORTGAGE> 0
<REAL-ESTATE> 11,676,120
<TOTAL-INVEST> 545,302,643
<CASH> 8,828,300
<RECOVER-REINSURE> 89,550,919
<DEFERRED-ACQUISITION> 0<F1>
<TOTAL-ASSETS> 765,914,173
<POLICY-LOSSES> 447,317,310
<UNEARNED-PREMIUMS> 66,121,599
<POLICY-OTHER> 24,555,059
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
0
<COMMON> 9,376,956
<OTHER-SE> 197,418,532
<TOTAL-LIABILITY-AND-EQUITY> 765,914,173
21,077,652
<INVESTMENT-INCOME> 8,722,603
<INVESTMENT-GAINS> 45,285
<OTHER-INCOME> 414,022
<BENEFITS> 16,032,047
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 5,734,216
<INCOME-PRETAX> 8,493,299
<INCOME-TAX> 1,604,637
<INCOME-CONTINUING> 6,856,231
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,856,231
<EPS-PRIMARY> .73
<EPS-DILUTED> 0
<RESERVE-OPEN> 432,945,449
<PROVISION-CURRENT> 29,907,255
<PROVISION-PRIOR> (4,500,000)
<PAYMENTS-CURRENT> (493,354)
<PAYMENTS-PRIOR> (10,542,040)
<RESERVE-CLOSE> 447,317,310
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>Deferred policy acquisition costs and amortization of deferred policy
acquisition costs are not separately disclosed within Form 10-Q because items
are immaterial for individual disclosure. Deferred policy acquisition costs
are included as a component of other assets, and amortization of deferred
policy acquisition costs are included with other underwriting, acquisition and
insurance expenses.
</FN>
</TABLE>
