Professionals Direct (PFLD) 10QSB 2004 Q3 Quarterly report (small business)

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 quarterly period ended September 30, 2004

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________

Commission File Number:000-49786

PROFESSIONALS DIRECT, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)

Michigan (State or Other Jurisdiction of Incorporation or Organization)	38-3324634 (I.R.S. Employer Identification No.)
161 Ottawa Ave., N.W., Suite 607 Grand Rapids, Michigan 49503 (Address of Principal Executive Offices)	(616) 456-8899 (Issuer's Telephone Number, Including Area Code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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        

There were 333,500 shares of Common Stock outstanding as of October 31, 2004.

Transitional Small Business Disclosure Format (check one):  Yes           No    X    .

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PROFESSIONALS DIRECT, INC.
INDEX

PART I.	FINANCIAL INFORMATION	Page No.
	Item 1.  Financial Statements
	Condensed Consolidated Balance Sheet -
	September 30, 2004 (Unaudited)	3
	Condensed Consolidated Statements of Income and Comprehensive
	Income - Three and Nine Months Ended September 30, 2004 (Unaudited) and
	September 30, 2003 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows -
	Nine Months Ended September 30, 2004 (Unaudited) and
	September 30, 2003 (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
	Item 2.  Management's Discussion and Analysis or Plan of Operation	7
	Item 3.  Controls and Procedures	12
PART II.	OTHER INFORMATION
	Item 6.  Exhibits	13
SIGNATURES

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PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements

PROFESSIONALS DIRECT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)

September 30,		2004
		(000)
Assets
Fixed maturities available for sale, at fair value	$	33,520
Other invested asset, at cost which approximates fair value		269
Total investments		33,789
Cash and cash equivalents		6,460
Receivables:
Amounts due from reinsurers		4,225
Other		2,275
Prepaid reinsurance premiums		5,026
Deferred acquisition costs		1,667
Net deferred federal income taxes		1,387
Other assets		943
		21,983
Total Assets	$	55,772
Liabilities and Shareholders' Equity
Liabilities
Loss and loss adjustment expense reserves	$	18,544
Unearned premiums		12,360
Amounts due to reinsurers		2,982
Lines of credit		2,750
Other liabilities		2,164
Accrued interest		1,485
Surplus certificates		2,531
Trust preferred securities		2,000
Total Liabilities		44,816
Shareholders' Equity
Preferred stock, no par (500,000 shares authorized, no shares issued)		-
Common stock, no par (5,000,000 shares authorized, 333,500 shares           issued and outstanding)		3,206
Retained earnings		7,882
Accumulated other comprehensive loss		(132	)
Total Shareholders' Equity		10,956
Total Liabilities and Shareholders' Equity	$	55,772

See accompanying notes to condensed consolidated financial statements.

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PROFESSIONALS DIRECT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2004			2003			2004			2003
	(000)			(000)			(000)			(000)
Revenues
Net premiums earned	$	3,531		$	4,549		$	12,616		$	10,829
Fees and commissions earned		216			235			472			477
Net investment income		228			166			644			731
Finance and other income earned		34			31			113			91
Total revenues		4,009			4,981			13,845			12,128
Expenses
Losses and loss adjustment expenses		2,961			2,403			8,112			5,771
Operating and administrative		976			1,397			3,724			3,843
Interest		105			72			338			212
Total expenses		4,042			3,872			12,174			9,826
Income (loss) before federal income taxes		(33	)		1,109			1,671			2,302
Federal Income Taxes (benefit)		(21	)		407			557			819
Net income (loss)		(12	)		702			1,114			1,483
Other Comprehensive Income (Loss) (Net of tax      (benefit) of $104, $(50), $(11) and      $(27), respectively)		201			(98	)		(21	)		(52	)
Comprehensive income	$	189		$	604		$	1,093		$	1,431
Per share of common stock:
Basic and diluted net income (loss) per share	$	(0.04	)	$	2.10		$	3.34		$	4.45
Basic and diluted comprehensive income per share		0.57			1.81			3.28			4.29

See accompanying notes to condensed consolidated financial statements.

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PROFESSIONALS DIRECT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine Months Ended September 30,
	2004			2003
	(000)			(000)
Operating Activities
Net income	$	1,114		$	1,483
Adjustments to reconcile net income to net cash from operating           activities:
Deferred federal income taxes		(244	)		(88	)
Realized gains		(5	)		(184	)
Depreciation and amortization		774			572
Changes in operating assets and liabilities:
Amounts due from reinsurers		(1,859	)		259
Other receivables		(334	)		(161	)
Prepaid reinsurance premiums		(3,251	)		(1,324	)
Deferred acquisition costs		(38	)		(1,180	)
Other assets		(12	)		(1,007	)
Loss and loss adjustment expense reserves		5,083			2,687
Amounts due to reinsurers		2,488			1,086
Unearned premiums		1,892			7,333
Other liabilities		278			1,100
Accrued interest		102			100
Net cash from operating activities		5,988			10,676
Investing Activities
Cost of fixed maturities acquired		(10,866	)		(19,008	)
Proceeds from sales or maturities of fixed maturities		5,879			9,121
Cost of property and equipment acquired		(23	)		(104	)
Net cash for investing activities		(5,010	)		(9,991	)
Financing Activities
Net borrowings (repayments) under lines of credit		(1,524	)		1,760
Net cash from (for) financing activities		(1,524	)		1,760
Net Increase (Decrease) in Cash and Cash Equivalents		(546	)		2,445
Cash and Cash Equivalents, beginning of period		7,006			4,442
Cash and Cash Equivalents, end of period	$	6,460		$	6,887
Supplemental Disclosures of Cash Flow Information
Federal income tax payments - net	$	927		$	139
Interest payments		236			112

See accompanying notes to condensed consolidated financial statements.

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PROFESSIONALS DIRECT, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.          Basis of Presentation

          The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (Professionals Direct Insurance Company (PDIC), a property and casualty insurance company providing professional liability insurance to attorneys; Professionals Direct Employer Organization, Inc., an inactive Michigan professional employer organization; Professionals Direct Finance, Inc. (Finance), a premium finance company; Professionals Direct Insurance Services, Inc. (Services), a company providing underwriting, claims, accounting, information technology services and selling professionals liability and other insurance), plus Lawyers Direct Risk Purchasing Group which the company controls.

          The condensed consolidated financial statements and notes as of and for the three and nine-month periods ended September 30, 2004 and 2003 are unaudited. The condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) that are, in the opinion of management, necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods. The results of operations for the interim periods should not be considered indicative of results to be expected for the full year.

2.          Income per Share

          Basic income per share is computed by dividing net income or loss by the weighted average number of shares of common stock outstanding for the period (333,500 for the three and nine months ended September 30, 2004 and 2003). Diluted income per share is equal to basic income per share as there are no stock options or other dilutive instruments outstanding.

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Item 2.  Management's Discussion and Analysis

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this report. The following discussion of our financial condition and results of operations contains certain forward-looking statements. A discussion of the limitations of forward-looking statements appears at the end of this section.

Introduction

The increase in earned premiums in 2004 resulted from the increase in policies written by PDIC in 2003. This increase in policies written combined with greater claims frequency and severity as well as an increase in the estimate for prior years losses has resulted in increased loss and loss adjustment expenses in 2004 as compared to 2003. Operating and administrative expenses have decreased slightly compared to the same period last year partly because of ceding commissions under PDIC's 2004 reinsurance treaties. The following table and discussion compares the financial results for 2004 and 2003:

	Nine Months Ended September 30,
	2004		2003		Change		Percent    Change
		(in thousands of dollars, except for per share data)
Revenues:
Net premiums earned	$	12,616	$	10,829	$	1,787		16.5%
Fees and commissions earned		472		477		(5	)	(1.0%	)
Net investment income		644		731		(87	)	(11.9%	)
Finance and other income earned		113		91		22		24.2%
Total Revenues		13,845		12,128		1,717		14.2%
Expenses:
Losses and loss adjustment expenses		8,112		5,771		2,341		40.6%
Operating and administrative		3,724		3,843		(119	)	(3.1%	)
Interest		338		212		126		59.4%
Total Expenses		12,174		9,826		2,348		23.9%
Income before federal income taxes		1,671		2,302		(631	)	(27.4%	)
Federal income taxes		557		819		(262	)	(32.0%	)
Net income	$	1,114	$	1,483	$	(369	)	(24.9%	)
Selected Balance Sheet Data:           (at end of period)
Total investments and cash	$	40,249	$	34,565	$	5,684		16.4%
Total assets		55,772		46,209		9,563		20.7%
Total liabilities		44,816		37,463		7,353		19.6%
Total shareholders' equity		10,956		8,746		2,210		25.3%
Per Share Data:
Net income	$	3.34	$	4.45	$	(1.11	)	(24.9%	)
Book value	$	32.85	$	26.22	$	6.63		25.3%

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Results of Operations (000 omitted):

The following is a summary and analysis of the material revenue and expense components of our operational results for the first nine months of 2004.

         Net premiums earned. Net premiums earned are equal to direct premiums earned (premiums earned for policies written) less ceded premiums earned (amounts ceded to reinsurers). The increase in net premiums earned primarily resulted from an increase in direct premiums written in 2003 offset, in part, by higher ceded premiums on 2004 business and an increase in the ceded premium liability related to an older treaty. The following is a summary of premiums written by PDIC:

	Nine Months Ended September 30,
	2004		2003		Change		Percent    Change
		(in thousands of dollars)
Direct premiums written	$	19,607	$	20,638	$	(1,031	)	(5.0%	)
Net premiums written		11,257		16,838		(5,581	)	(33.1%	)

Direct premiums written decreased 5.0% from the same period a year ago. During the third quarter, direct premiums written decreased $220 when compared to 2003. PDIC's new business premium writings so far for 2004 continue to be significantly less than the same period for 2003 due, in part, to the absence of significant disruptions in the markets in which PDIC operates. For its policies with 2004 effective dates, PDIC decreased its per claim retention by purchasing more reinsurance from third party reinsurers. This reduces PDIC's net premiums written and will reduce net premiums earned as the policies are earned out.

         Fee and Commissions Earned. We earn fee and commission income from two sources. The first source is membership fees earned by Lawyers Direct Risk Purchasing Group, an affiliate organized and managed by Services, as part of the Lawyers Direct® program for one to five person law firms. The second source is principally commissions earned by Services from placing insurance with unrelated third parties.

         Net Investment Income. Net investment income is comprised of interest on fixed maturity investments and realized investment gains and losses. The investment income decrease of $87 or 11.9% in the first nine months of 2004 as compared to 2003 is largely attributable to realized gains in 2003 that did not recur in 2004.

         Finance and Other Income Earned. Finance income is generated from premium financing incidental to the sale of PDIC's insurance policies. Premium financing is offered to PDIC policyholders in Michigan and selected other states. Premium finance income increased during the first nine months of 2004 as compared to 2003 and is expected to continue to increase modestly through the remainder of 2004 as premium financing is provided in additional states.

         Losses and Loss Adjustment Expenses.The loss ratio for the first nine months of 2004 was 64.3% compared to 53.3% for the same period in 2003. This loss ratio increase resulted from greater claims frequency and severity as well as an increase in the estimate of prior year's losses. The loss ratio is the sum of the losses and loss adjustment expenses incurred expressed as a percentage of net premiums earned. During the first nine months of 2004, PDIC recorded losses and loss adjustment expenses of $8,112 of which $7,142 was for claims which were made and reported in the current year and $970 was for claims which were made and reported in years prior to 2004. During the first nine months of 2003, PDIC recorded losses and loss adjustment expenses of $5,771 of which the entire amount was for claims which were made and reported in that year. Overall profitability is in great part determined by the loss estimate for current year claims plus the favorable or adver se development of prior report year reserves.

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PDIC is required to maintain reserves for payment of losses and loss adjustment expenses for reported claims and for claims incurred but not reported, arising from policies that have been issued. PDIC provides for the ultimate cost of those claims without regard to how long it takes to settle them or the time value of money. The determination of reserves involves actuarial and statistical projections of what PDIC expects to be the cost of the ultimate settlement and administration of such claims based on facts and circumstances then known, estimates of future trends in claim severity, and other variable factors such as inflation and changing judicial theories of liability. As part of the process of establishing those estimates, the following should be noted:

(a)          Estimates of the loss reserve liability are reviewed by independent actuaries twice a year. Various methodologies are used to calculate the appropriate amount of the loss reserve liability that should be recorded each year.

(b)          In the years after a claim is reported, there is a significant amount of uncertainty over what the ultimate loss will be. Therefore, estimating the loss reserve liability for claims recently reported tends to be more difficult. As claims get older, the loss reserve liabilities may be estimated with less inaccuracy, but are still subject to material fluctuations until the claims are paid or otherwise closed. Eventually, all claims in a particular year are closed and no additional development, favorable or adverse, will be experienced because the amount of the claims is certain.

(c)          A factor that impacts incurred losses is reserve development from prior years. Favorable or adverse development occurs when subsequent estimates of the loss reserve liability change. A subsequent decrease in estimate results in favorable development; a subsequent increase in estimate results in adverse development. Favorable or adverse development is reflected as a decrease or increase in the current year's loss and loss adjustment expenses.

The estimation of ultimate liability for losses and loss adjustment expenses is an inherently uncertain process and does not represent an exact calculation of that liability. PDIC's current reserve policy recognizes this uncertainty by maintaining bulk reserves or case supplement reserves to provide for the possibility that actual results may be less favorable compared to the estimated costs relative to the normal case reserve estimation process. The bulk reserve is determined by estimating the ultimate liability for the claims which have been made and reported and then subtracting the case reserves. PDIC does not discount its reserves to recognize the time value of money.

When a claim is reported to PDIC, claims personnel establish a case reserve for the estimated amount of the ultimate payment. This estimate reflects an informed judgment based upon general insurance reserving practices and on the experience and knowledge of the estimator regarding the nature and value of the specific claim, the severity of injury or damage, and the policy provisions relating to the type of loss. The claims staff periodically adjusts case reserves as more information becomes available.

Each quarter, PDIC computes its estimated liability using appropriate principles and procedures. Because the establishment of loss reserves is an inherently uncertain process, however, there can be no assurance that losses will not exceed reserves. Adjustments in aggregate reserves, if any, are reflected in the operating results of the period during which such adjustments are made. As required by insurance regulatory authorities, PDIC annually receives a statement of opinion from its appointed actuary concerning the reasonableness of its reserves.

         Operating and Administrative Expenses. Operating and administrative expenses for the first nine months of 2004 compared to the same period for 2003 decreased $119 or 3.1%. This decrease is the result of the effects of ceding commissions earned offset by increased costs associated with the increase in net premiums earned. Expenses increased at a lesser rate than earned premiums because of economies of scale.

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         Interest Expense. Interest expense for the first half of 2004 increased $126 from the same period of 2003, primarily the result of the increased outstanding line of credit balance.

         Income Taxes.The effective federal income tax rate was 33.3% for 2004 and 35.6% for 2003, both of which approximate the expected rate.

Financial Condition, Liquidity, and Capital Resources (000 omitted):

The primary sources of liquidity, on both a short-term and long-term basis, are funds provided by insurance premiums collected, net investment income, recoveries from reinsurance, and proceeds from the maturity or sale of invested assets. The primary uses of cash, on both a short-term and long-term basis, are losses, loss adjustment expenses, operating expenses, reinsurance premiums, taxes, debt repayment and acquisition of investments.

Trends or uncertainties that may have an impact on short-term or long-term liquidity include changes in the cost and availability of reinsurance, changes in interest rates and changes in investment income. As the costs of obtaining reinsurance may change in the future, we intend to adjust the rates we charge our customers. However, such rate changes may be limited by competition. We believe that we will be able to manage reinsurance costs so the impact on overall liquidity is minimized.

When interest rates decline, the cost of borrowing decreases and the market value of our investment portfolio, which primarily consists of debt securities, generally increases. At the same time, the overall yield on new investments tends to decrease. When interest rates increase, the opposite effects are realized. While interest rates continue to be at historically low levels, they are starting to increase. We believe that it is unlikely material gains will be realized on portfolio assets or be a source of liquidity during 2004.

Net cash flow from operations for the first nine months of 2004 was $5,988 compared to $10,676 for the first nine months of 2003, a decrease of $4,688. This decrease is the result of written premiums leveling-off and an increase in premiums ceded to reinsurers. This cash flow plus existing cash was invested in fixed maturities which resulted in negative cash flow from investing activities of $5,010 for the first nine months of 2004. Cash used for financing activities in the first half of 2004 was $1,524, the result of net repayments under the lines of credit. In the same period last year, the net borrowings increased $1,760.

At September 30, 2004, cash and cash equivalents totaled $6,460. This represents liquid assets necessary to meet operating, loss and reinsurance payments. It is expected that cash and cash equivalents will be maintained at approximately this level to meet cash flow needs for the balance of 2004.

To provide additional liquidity, we have three lines of credit available from a bank. The first line is a $1,800 revolving line used by Finance to finance insurance premiums and bears interest at .5% over the bank's prime rate. The second line is for $1,000, which can be used for potential acquisitions, and bears interest at 1% over the bank's prime rate. The third line is a $3,000 facility that requires quarterly principal payments of $150 which began on April 1, 2004 and matures October 1, 2006. These lines of credit require, among other things, that we maintain a minimum tangible net worth of $7,500, that PDIC maintain a minimum surplus of not less than 240% of the Authorized Control Level Risk Based Capital (as defined by the National Association of Insurance Commissioners), and that we deliver periodic financial reports to the bank. The bank has a security interest in substantially all assets of the Company, Services and Finance. In addition, the shares of PDIC are pledged, subject to the rights of p olicyholders under insurance laws and the rights of insurance regulators.

Based on historical trends, market conditions and our business plans, we believe that our existing resources and sources of funds will be sufficient to meet our short-term and long-term liquidity needs over the next year and beyond. Because economic, market and regulatory conditions may change, however, there can be no assurance that our funds will be sufficient to meet these liquidity needs. In

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addition, competition, pricing, the frequency and severity of losses and interest rates could significantly affect our short-term and long-term liquidity needs.

Critical Accounting Estimates and Judgments

The consolidated financial statements include certain amounts, based upon informed estimates and judgments made by management, for transactions not yet complete or for which the ultimate resolution is not certain. Such estimates and judgments affect the reported amounts in the financial statements. Although management believes that they are making the best decisions based upon information then available, it is possible that as conditions and experience develop, these estimates may change and may be materially different from originally reported in the financial statements. Our reserves for unpaid loss and loss adjustment expenses represent the most critical estimate present within the financial statements.

Forward-Looking Statements:

This discussion and analysis of financial condition and results of operations, and other sections of this report, contain forward-looking statements, including, but not limited to, statements relating to our business objectives and strategy. Such forward-looking statements are based on current expectations, management beliefs, certain assumptions made by our management, and estimates and projections about our industry. Words such as "believes," "estimates," "expects," "forecasts," "intends," "judgment," "objective," "plans," "projects," variations of such words and similar expressions are intended to identify such forward-looking statements. Determination of loss and loss adjustment expense reserves and amounts due from reinsurers are based substantially on estimates and the amounts so determined are inherently forward-looking.

Forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict with respect to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may differ materially from those expressed, forecasted, or contemplated by any such forward-looking statements. Other factors, some of which are listed below, also influence our results of operations, financial condition and business:

• future economic conditions and the legal and regulatory environment in the markets served by the Company's subsidiaries;

• reinsurance market conditions, including changes in pricing and availability of reinsurance;

• financial market conditions, including, but not limited to, changes in interest rates and the values of investments;

• inflation;

• credit worthiness of the issuers of investment securities, reinsurers and others with whom the Company and its subsidiaries do business;

• estimates of loss reserves and trends in losses and loss adjustment expenses;

• changing competition;

• our ability to execute our business plan;

• the effects of war and terrorism on investments and reinsurance markets;

• changes in financial ratings issued by independent organizations, including A.M. Best, Standard & Poors and Moody's;

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• our ability to enter new markets successfully and capitalize on growth opportunities; and

• changes in the laws, rules and regulations governing insurance holding companies and insurance companies, as well as applicable tax and accounting matters.

Changes in any of these factors, or others, could have an adverse affect on the business, results of operations, or business of the Company or its subsidiaries. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 3.  Controls and Procedures

The Company's disclosure controls and procedures, as that term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are designed with the objective of providing reasonable assurance that information required to be disclosed in the Company's reports filed or submitted under the Exchange Act, such as this report, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the "SEC"). In designing and evaluating the Company's disclosure controls and procedures, management recognized that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, rather than absolute, assurance of achieving the desired control objectives.

An evaluation was performed under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Vice President of Finance, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this Quarterly Report on Form 10-QSB (the "Evaluation Date"). Based on that evaluation, the Company's management, including the Chief Executive Officer and Vice President of Finance, concluded that the Company's disclosure controls and procedures were designed and effective to ensure that information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic filings with the Securities and Exchange Commission is properly recorded, processed, summarized and reported in a timely manner as of the Evaluation Date, except as described below.

Subsequent to the Evaluation Date, the Company identified a reference error in a spreadsheet calculation used in the determination of ceded unearned premium that understated net premiums earned, and consequently, operating and administrative expenses and federal income taxes for the first and second quarters of 2004. The Company has revised the electronic worksheet to include new alerts to identify additional potential errors. In addition, the Company plans to review its existing internal control procedures to improve its ability to prevent, detect and correct similar errors in the future. The Company believes that the deficiencies in the disclosure controls and procedures that led to this error have been remediated.

Except as described in the preceding paragraph, during the last fiscal quarter there was no change in the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II.  OTHER INFORMATION

Item 6.  Exhibits

(a) Exhibits.  The following documents are filed as exhibits to this report on Form 10-QSB:

Exhibit No.	Document
3.1	Amended and Restated Articles of Incorporation. Previously filed as an exhibit to the Company's Registration Statement on Form 10-SB/A filed on July 8, 2002. Here incorporated by reference.
3.2	Amended and Restated Bylaws. Previously filed as an exhibit to the Company's Registration Statement on Form 10-SB/A filed on July 8, 2002. Here incorporated by reference.
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Vice President of Finance pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This exhibit, except for those portions expressly incorporated by reference in this filing, is furnished for the information of the Commission and is not deemed "filed" as part of this filing.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  November 11, 2004	PROFESSIONALS DIRECT, INC. /s/ Stephen M. Tuuk Stephen M. Tuuk, President and Chief Executive Officer (authorized to sign on behalf of company)
	/s/ Stephen M. Westfield Stephen M. Westfield, Vice President of Finance (principal financial and accounting officer)

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EXHIBIT INDEX

Exhibit No.	Document
3.1	Amended and Restated Articles of Incorporation. Previously filed as an exhibit to the Company's Registration Statement on Form 10-SB/A filed on July 8, 2002. Here incorporated by reference.
3.2	Amended and Restated Bylaws. Previously filed as an exhibit to the Company's Registration Statement on Form 10-SB/A filed on July 8, 2002. Here incorporated by reference.
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Vice President of Finance pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This exhibit, except for those portions expressly incorporated by reference in this filing, is furnished for the information of the Commission and is not deemed "filed" as part of this filing.