Unifax commission and fee income on this program was $151,114 in the nine months ended December 31, 1996, compared to $115,140 in the same period of the prior year. Commission and fee income was $166,189 in the fiscal year ended March 31, 1996, compared to $233,267 in the prior fiscal year. NCC commission and fee income was $14,331 in the nine months ended December 31, 1996, compared to $13,317 in the same period of the prior year. Commission and fee income was $17,330 in the fiscal year ended March 31, 1996, compared to $23,849 in the prior fiscal year.
Unifax sells and services insurance policies for Crusader. The service fee charged to the policyholder by Unifax is recognized as income in the consolidated financial statements. The commissions paid by Crusader to Unifax are eliminated as intercompany transactions and are not reflected in commission income or commission expense.
Reinsurance The Company cedes reinsurance to provide for greater diversification of business, to allow management to control exposure to potential losses arising from large risks by reinsuring certain levels of risk in various areas of exposure, to reduce the loss that may arise from catastrophes, and to provide additional capacity for growth. Prepaid reinsurance premiums and reinsurance receivables are reported as assets and represent ceded unearned premiums and reinsurance recoverable on both paid and unpaid losses, respectively. Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policies.
The allowance for doubtful accounts is maintained at a minimum since the receivables are secured by unearned premiums and funds held as security for performance. Bad debt expense for the nine months ended December 31, 1996 and the fiscal year ended March 31, 1996 was $22,387 and $38,815 respectively. Premium finance notes receivable represent the balance due to the Company's premium finance subsidiary from policyholders who elect to finance their premiums over the policy term. These notes are net of unearned finance charges.
In addition to the AAC line of credit, Unico has a $2,000,000 line of credit with Union Bank. Interest on this line is referenced to LIBOR and is payable monthly. The agreement contains certain covenants including maintenance of certain financial ratios. This credit line expires September 2, 1997 at which time it is expected to be renewed. As of December 31, 1996, no amounts have been borrowed.
During the fiscal year ended March 31, 1986, the Company adopted the Unico American Corporation Profit Sharing Plan. Employees who are at least 21 years of age and have been employed by the Company for at least two years are participants in the Plan. Pursuant to the terms of the Plan, the Company annually contributes to the account of each participant an amount equal to a percentage of the participant's eligible compensation as determined by the Board of Directors. Participants are entitled to receive benefits under the plan upon the later of the following: the date 60 days after the end of the plan year in which the participant's retirement occurs or one year and 60 days after the end of the plan year following the participant's termination with the Company. However the participant's interest must be distributed in its entirety no later than April 1 of the calendar year following the calendar year in which the participant attains age 70 1/2 or otherwise in accordance with the Treasury Regulations promulgated under the Internal Revenue Code of 1954 as amended.
The NAIC has a project to codify statutory accounting practices, the result of which is expected to constitute the only source of "prescribed" statutory accounting practices. The codification, when completed, will likely change the definitions of what comprises prescribed as opposed to permitted statutory accounting practices and may result in changes to the accounting policies that insurance companies use to prepare the statutory financial statements.
Summarized unaudited quarterly financial data for each of the calendar years 1995 and 1996 is set forth below. These quarters include each full quarter within the fiscal year ended March 31, 1996 and the nine-month period ended December 31, 1996.