The Company makes forward-looking statements from time to time and desires to take advantage of the "safe harbor" which is afforded such statements under the Private Securities Litigation Reform Act of 1995 when they are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statements.
The statements contained in the following "Management's Discussion and Analysis of Financial Condition and Results of Operations," statements contained in future filings with the Securities and Exchange Commission and publicly disseminated press releases, and statements which may be made from time to time in the future by management of the Company in presentations to shareholders, prospective investors, and others interested in the business and financial affairs of the Company, which are not historical facts, are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. Any projections of financial performances or statements concerning expectations as to future developments should not be construed in any manner as a guarantee that such results or developments will, in fact, occur. There can be no assurance that any forward-looking statement will be realized or that actual results will not be significantly different from that set forth in such forward-looking statement. In addition to the risks and uncertainties of ordinary business operations, the
Certain expenses related to the acquisition of life insurance and annuities are deferred and amortized over the premium paying period of the related policy. These expenses are generally first year only and include commissions, policy issue, underwriting costs and any other cost associated with the issuance of a policy. During 1997, 1996 and 1995, policy acquisition costs deferred by the Company totaled $708,185, $859,561 and $64,164, respectively.
Professional fees increased $116,277 to $235,749 for the year ended December 31, 1997. Included in this increase are fees related to the re-design of the Company's principal product and the development of the 10 year term and single premium deferred annuity products, independent accountant fees and attorneys fees. Professional fees for 1996 and 1995 totaled $119,472 and $68,490, respectively.
During 1997 certain items impacted the operating results of the Company which are non-recurring. The following table summaries the impact of theses charges:
SFAS No. 60, "Accounting and Reporting by Insurance Enterprises", requires income recognition over the premium paying period of a life insurance policy when a portion of income is received only in one policy year, such as a first year loading charge. The annuity portion of the initial product contained a 20% first year load which was classified as unearned revenue on the balance sheet in accordance with SFAS No. 60. This unearned revenue is amortized into income over the premium paying period of the policies. The balances in unearned revenue net of amortization were $136,299 and $118,046 at December 31, 1997 and 1996, respectively.