SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended Commission File No.
- ----------------- -------------------
March 31, 2000 0-671
MOTOR CLUB OF AMERICA
------------------------------------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-0747730
------------------------ -------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
95 Route 17 South, Paramus, New Jersey 07653
- --------------------------------------- --------
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (201) 291-2000
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 .
2,124,387 shares of Common Stock were outstanding as of May 12,
2000
MOTOR CLUB OF AMERICA
FORM 10-Q
MARCH 31, 2000
PART I PAGE
-------
ITEM 1. FINANCIAL STATEMENTS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
PART II
--------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
- -----------------------------
MOTOR CLUB OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2000 1999
------------ ------------
ASSETS
Investments $102,725,472 $ 86,981,849
Cash and cash equivalents 626,329 443,733
Premiums receivable 31,875,275 27,132,246
Reinsurance recoverable on
paid & unpaid losses and
loss expenses 31,383,960 21,163,574
Notes and accounts receivable 341,950 212,598
Deferred policy acquisition costs 11,403,243 10,560,763
Fixed assets - at cost, less
accumulated depreciation 2,400,933 1,858,621
Prepaid reinsurance premiums 5,166,112 1,485,450
Federal income tax recoverable - 54,026
Deferred tax asset 4,282,388 4,128,766
Goodwill, less accumulated
amortization 1,724,674 1,745,848
Other assets 1,806,209 1,470,744
------------ ------------
Total Assets $193,736,545 $157,238,218
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Losses and loss expenses $ 84,300,299 $ 70,983,383
Unearned premiums 47,875,857 38,698,028
Other liabilities 11,918,281 9,997,359
Convertible subordinated debentures 10,000,000 10,000,000
Notes payable 11,500,000 -
Federal income taxes payable 374,571 -
------------ ------------
Total Liabilities 165,969,008 129,678,770
------------ ------------
Shareholders' Equity:
Common stock, par value $.50 per share:
(Authorized - 10,000,000 shares;
issued and outstanding - 2,124,387
(2000 and 1999) 1,062,194 1,062,194
Paid in additional capital 2,066,089 2,066,089
Accumulated other comprehensive loss (5,077,938) (5,036,515)
Retained earnings 29,717,192 29,467,680
------------ ------------
Total Shareholders' Equity 27,767,537 27,559,448
------------ ------------
Total Liabilities and
Shareholders' Equity $193,736,545 $157,238,218
============ ============
(Financial statements should be read in
conjunction with the accompanying notes)
MOTOR CLUB OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended
----------------------------------
March 31, 2000 March 31, 1999
-------------- --------------
Revenues:
Insurance premiums (net of
premiums ceded totaling
$2,350,518 (2000) and
$1,818,897 (1999)) $18,259,427 $13,084,199
Net investment income 1,399,286 1,192,532
Other revenues 39,719 38,042
----------- -----------
Total revenues 19,698,432 14,314,773
----------- -----------
Losses and Expenses:
Insurance losses and
loss expenses incurred
(net of reinsurance recoveries
totaling $2,684,701 (2000) and
$883,621 (1999)) 12,482,005 8,882,943
Amortization of deferred policy
acquisition costs 5,195,884 3,832,123
Other operating expenses 1,398,042 338,639
Interest expense 323,607 52,969
Amortization of goodwill 21,174 -
----------- -----------
Total losses and expenses 19,420,712 13,106,674
----------- -----------
Income before Federal
income taxes 277,720 1,208,099
Provision for Federal income taxes 28,208 222,478
----------- -----------
Net income $ 249,512 $ 985,621
Net Income per common share:
Basic $.12 $.47
==== ====
Diluted $.12 $.46
==== ====
Weighted average common and potential common shares outstanding:
Basic 2,124,387 2,116,429
========= =========
Diluted 2,124,387 2,127,745
========= =========
(Financial statements should be read in
conjunction with the accompanying notes)
MOTOR CLUB OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended
--------------------------------
March 31, 2000 March 31, 1999
-------------- --------------
Operating activities:
Net income $ 249,512 $ 985,621
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and net
amortization 183,569 159,723
Changes in:
Deferred policy
acquisition costs 48,148 252,518
Premiums receivable 103,649 (103,652)
Notes and accounts
receivable (129,352) (39,446)
Other assets (103,451) (118,210)
Losses and loss expenses 571,802 2,122,477
Unearned premiums (1,332,501) (750,656)
Federal income tax -
current 10,655 28,269
Federal income tax -
deferred 17,555 194,408
Other liabilities (1,743,688) (1,779,225)
Reinsurance recoverable on
paid and unpaid losses 2,524,726 (167,953)
----------- -----------
Prepaid reinsurance
premiums 683,468 96,700
Net cash provided by
operating activities $ 1,084,092 $880,574
Investing activities:
Investments purchased (27,922,133) (32,510,702)
Fixed assets purchased (581,917) (179,043)
Acquisition of Mountain
Valley, net of cash
acquire (4,072,162) -
Proceeds from sales and
maturities of investments 20,174,716 32,569,108
----------- -----------
Net cash used in
investing activities (12,401,496) (120,637)
Financing activities:
Proceeds from Notes
Payable 11,500,000 -
----------- -----------
Net cash provided by
financing activities 11,500,000 -
----------- --------
Net increase in cash and
cash equivalents 182,596 759,937
Cash and cash equivalents at
beginning of period 443,733 2,773,427
----------- ----------
Cash and cash equivalents at
end of period $ 626,329 $3,533,364
=========== ==========
Supplemental Disclosures of Cash Flow Information
- --------------------------------------------------
Interest paid $ 213,344 $ 53,295
============ ==========
Federal income taxes paid $ - $ -
============ ==========
Non Cash Investing Activities:
- ------------------------------
Invested assets and shareholders' equity decreased by $41,423 and
$753,158 in 2000 and 1999, respectively, as a result of changes
in market value, net of taxes, pertaining to the Registrant's
application of SFAS No. 115 - Accounting for Certain Investments
----------------------------------
in Debt and Equity Securities.
- ------------------------------
(Financial statements should be read in
conjunction with the accompanying notes)
MOTOR CLUB OF AMERICA
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
For the Three Months Ended
-------------------------------
March 31, 2000 March 31, 1999
-------------- --------------
Net income $249,512 $985,621
Other comprehensive income:
Unrealized losses on securities:
Unrealized holding losses
during the period (net of taxes
of $33,217 and $387,990) (41,423) (753,158)
-------- --------
Other comprehensive income (41,423) (753,158)
-------- --------
Comprehensive income $208,089 $232,463
======== ========
(Financial statements should be read in
conjunction with the accompanying notes)
MOTOR CLUB OF AMERICA
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Preparation and Presentation
-------------------------------------
The accompanying condensed consolidated financial
statements of Motor Club of America (the "Registrant") include
its accounts and those of its subsidiary companies, Motor Club of
America Insurance Company ("Motor Club"), Preserver Insurance
Company ("Preserver"), North East Insurance Company ("North
East"), American Colonial Insurance Company ("American Colonial")
and Mountain Valley Indemnity Company ("Mountain Valley")
(collectively referred to as the "Insurance Companies"), and, in
the opinion of management, contain all adjustments necessary to
present fairly the Registrant's consolidated financial position,
results of operations and cash flows, in accordance with
generally accepted accounting principles.
These statements should be read in conjunction with the
Summary of Significant Accounting Policies and other notes
included in the Notes to Financial Statements in the Registrant's
1999 Annual Report on Form 10-K.
2. Per Share Data
--------------
Basic earnings per share are computed based upon the
weighted average number of common shares outstanding during each
year. Diluted earnings per share are computed based upon the
weighted average number of common shares outstanding including
outstanding stock options and convertible subordinated
debentures.
3. Federal Income Taxes
---------------------
The Registrant and its subsidiaries file a consolidated
Federal income tax return. In the three month periods ended
March 31, 2000 and 1999, the provision for Federal income taxes
resulted in effective tax rates different from the expected
statutory Federal income tax rates, principally as a result of
(i) certain adjustments, principally those enacted under the Tax
Reform Act of 1986; (ii) utilization of Net Operating Loss
("NOL") carryforwards; and (iii) the recognition as a deferred
tax asset of certain tax credit carryforwards for alternative
minimum tax purposes. The Registrant has NOL carryforwards of
$8,781,434 remaining, which expire beginning in 2009. The NOL
carryforward includes $6,677,904 attributable to North East,
which expire in 2015; under the prevailing tax laws, these
losses must be offset against taxable income of North East only,
are not available to offset taxable income of other operations
and are subject to an annual limitation of $587,000.
The Company believes it is more likely than not that it will
generate future taxable income to realize the benefits of the net
deferred tax asset, including those net deferred tax assets
attributable to North East only.
4. Acquisition of Mountain Valley Indemnity Company
------------------------------------------------
On March 1, 2000, the Registrant completed its acquisition of
Mountain Valley, formerly known as White Mountains Insurance
Company, from Unitrin Inc. for $7.5 million in cash.
Mountain Valley, formed in 1995, presently writes small and
medium sized commercial lines business in New York and all of New
England except Connecticut. Statutory surplus at December 31,
1999 was $7.3 million.
Under the terms of the purchase, Mountain Valley will run-
off its present 100% intercompany quota share reinsurance
agreement for losses occurring prior to closing and certain other
losses; thus at closing there were no net loss and loss expense
reserves for claims occurring prior to closing, including those
which develop subsequently.
Mountain Valley assumed the unearned premium at closing
(subject to certain adjustments).
The acquisition has been recorded using the purchase method
of accounting and based on the fair value of net assets acquired
at March 1, the Registrant estimates that no goodwill exists at
that date.
The Registrant recorded $268,000 of acquisition related
expenses, net of taxes, in its results of operations for the three
months ended March 31, 2000. Please refer to Note 5
("Related Party Transactions") for additional information on the
financing of this acquisition.
5. Related Party Transactions
--------------------------
In connection with the acquisition of Mountain Valley, the
Registrant extended unsecured debt financing ("Notes") in the
amount of $11.5 million to finance the transaction and provide
additional working capital.
The Notes were purchased by three of the Registrant's
directors ("Ownership Group"). This debt matures in two years.
The Notes bear interest at a rate of 10.605%, which is payable
quarterly commencing May 28, 2000. The Registrant will be
pursuing longer-term financing options to replace this debt
during that period. At the Registrant's election, if acceptable
financing is not identified during the two year period, the debt
can be extended for up to five years utilizing successive one-
year renewals, in exchange for an increased interest rate on the
Notes.
The Ownership Group owns 45.1% of the outstanding common
stock of the Registrant at March 31, 2000. The Ownership Group
also purchased $9,253,785 of the $10 million Convertible
Subordinated Debentures ("Debentures") issued on September 23,
1999. Based on the Registrant's common shares outstanding as of
March 31, 2000, the Ownership Group could increase its collective
percentage stock ownership to 56.1%, if the Debentures are
converted into the Registrant's common stock.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ------------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
- ------------------------------------
Overview of Business Operations
- -------------------------------
The Registrant owns and operates five regionally focused
property and casualty insurance companies, including companies that
specialize in small and mid-sized commercial insurance through the
Preserver Insurance Group.
The Preserver Insurance Group consists of Preserver, which
writes small commercial and homeowners insurance in New Jersey,
and Mountain Valley, which writes small and mid-sized commercial
insurance in New England and New York. The Preserver Insurance
Group is rated B++ (Very Good) by A.M. Best Company ("Best").
American Colonial plans to commence operations in New York in the
second quarter 2000, writing commercial lines in tandem with
Mountain Valley.
Motor Club writes personal automobile insurance ("PPA") in New
Jersey and is rated B+ (Very Good) by Best. North East writes
personal automobile and small commercial lines insurance in the
State of Maine and is rated B (Fair) by Best.
The Registrant is pursuing a strategy to: (1) increase its
identification as a provider of small commercial lines insurance
and has continued to expand its product line in support of this
objective; and (2) expand and diversify its insurance operations
outside the State of New Jersey. The Registrant believes that
both of these objectives can be attained through the acquisition
of other insurance companies which present opportunities to write
these product lines in different geographic areas. The Registrant
expects to continue to follow this strategy.
Please refer to Note 4 for information on the acquisition of
Mountain Valley, which was acquired on March 1, 2000. North East
was acquired in September 1999. The Registrant believes that
these acquisitions fully establish it as a regional commercial
lines company in the New England and Mid-Atlantic regions.
The Registrant anticipates continued reductions in its
operating expenses, namely through the implementation of
operating efficiencies which should reduce other overhead
expenditures.
Historically, the Insurance Companies' results of operations
have been influenced by factors affecting the property and
casualty insurance industry in general and the New Jersey PPA
market in particular. The operating results of the U.S. property
and casualty insurance industry have been subject to significant
variations due to competition, weather, catastrophic events,
regulation, general economic conditions, judicial trends,
fluctuations in interest rates and other changes in the
investment environment.
Results of Operations
- ---------------------
The consolidated results of operations include, using the
purchase method of accounting, the results of operations of North
East for the three months ended March 31, 2000 and Mountain
Valley from March 1, 2000, the date of acquisition. North East
and Mountain Valley are collectively referred to as the "Acquired
Companies".
The table below details the results of operations for the
Acquired Companies as included in the condensed consolidated
statement of opertions for the three months ended March 31, 2000:
Total
North Mountain Acquired
East Valley Companies
---------- ---------- ----------
Insurance premiums $4,329,213 $1,430,946 $5,760,159
Net investment income 234,265 35,877 270,142
---------- ---------- -----------
Total revenues 4,563,478 1,466,823 6,030,301
---------- ---------- -----------
Losses and loss adjustment
expenses incurred 3,370,606 995,112 4,365,718
Amortization of deferred policy
acquisition costs and
other operating expenses 1,385,412 493,116 1,878,528
---------- --------- -----------
Total losses and expenses 4,756,018 1,488,228 6,244,246
---------- ---------- -----------
Loss before Federal
income taxes (192,540) (21,405) (213,945)
Benefit for federal income
taxes 65,464 26,164 91,628
----------- ---------- -----------
Net income (loss) ($ 127,076) $ 4,759 ($ 122,317)
=========== ========== ==========
Loss ratio 77.9% 69.5% 75.8%
Expense ratio 32.0% 34.5% 32.6%
----- ----- -----
Combined ratio 109.9% 104.0% 108.4%
===== ===== =====
In addition, the Registrant incurred $268,000, net of tax,
in expenses related to the acquisition of Mountain Valley. For
purposes of the following discussion, the North East and Mountain
Valley results and the non-recurring acquisition expenses are
excluded in order to afford comparability. The North East
results are discussed separately below; the Mountain Valley
results are not meaningful as of March 31 and are not discussed
further.
Absent these items, net income decreased $346,000 or $0.17
basic and $0.16 diluted net income per share for the three months
ended March 31, 2000 as compared to the same period in 1999. The
decline in earnings was primarily due to interest expense related
to the Notes and Debentures issued in connection with the
Acquired Companies of approximately $245,000, net of tax, and
lower earnings from the PPA operations as a result of the AICRA
rate rollback.
The combined ratio for the three months ended March 31, 2000
was 99.8% compared to 100.2% for the same period in 1999.
The reduction in earnings was offset by higher earnings from
Preserver, which had very strong results in the first quarter
2000, with pre-tax profit increasing almost 9% over the same
period in 1999, due to a lower combined ratio and higher revenue.
Revenues
- --------
INSURANCE PREMIUMS
Insurance premiums declined $585,000 or 5% in the three
months ended March 31, 2000 compared to the same period in 1999.
Continuing decreases in Motor Club PPA premium were offset by
increases in Commercial Lines business written by Preserver.
The following table details the changes in insurance
premiums and underlying in force policy counts for the three
months ended March 31, 2000 as compared to the same period in
1999:
Change in Change in
Net Policy
Class of Business Premium Percent Count Percent
- ------------------ -------- ------- ------ -------
Private Passenger
Automobile ($954,000) (10%) 36 0%
Commercial Lines 360,000 18% 501 9%
Personal Property 9,000 5% (222) (2%)
--------- ---- ---- --
Total ($585,000) ( 5%) 315 1%
========= ==== ==== ==
NET INVESTMENT INCOME
Net investment income decreased $63,000 or 5% for the three
months ended March 31, 2000 as compared to the same period in
1999.
The average invested assets for the three month period
ended March 31, 2000 were $75,678,000 compared to $73,718,000 for
the same period in 1999. The investment portfolio (including
short-term investments and excluding capital gains) yielded 5.97%
for the three months ended March 31, 2000 as compared to 6.47%
for the same period in 1999.
Losses and Expenses
- -------------------
LOSSES AND LOSS EXPENSES INCURRED
Loss and loss expenses incurred decreased $767,000 or 9%,
which produced the following loss ratios:
Three Months Ended
March 31, 2000 March 31, 1999
-------------- --------------
Motor Club 69.3% 72.0%
Preserver 54.8% 56.2%
---- ----
Total 64.9% 67.9%
==== ====
Preserver has continued to produce an excellent loss ratio in
the first quarter 2000, although its direct loss ratio was slightly
higher than in 1999. Reinsurance recoveries in 2000 accounted
for the reduction in its loss ratio compared to 1999. Motor
Club's PPA loss ratio was lower compared to 1999 despite the
effects of the AICRA rate rollback. This is primarily due to
improved overall results in Personal Injury Protection ("PIP") (No
Fault) first party medical claims; this is so, particularly
compared to the third and fourth quarters of 1999.
The Registrant does note that the initial results in PIP for
Accident Year 2000 have been consistent (i.e., higher) with those
experienced in Accident Year 1999 after the AICRA rate rollback
was implemented. However, savings on losses in older Accident
Years have offset current accident year experience.
AMORTIZATION OF DEFERRED POLICY ACQUISITION COSTS AND OTHER
OPERATING EXPENSES
Expenses increased $138,000 or 3% in the three months ended
March 31, 2000 as compared to the same period in 1999. This
produced an expense ratio of 34.9% in 2000 as compared to 32.3%
in 1999. The increase in the expense ratio is primarily due to
the continuing reductions in insurance premium resulting from the
AICRA rate rollback. The increase in overall expenses in
primarily due to higher statutory assessments from Motor Club's PPA
operations.
The Registrant remains committed to reducing overhead
expenses relative to premium volume.
North East
- ----------
North East's net loss of $127,000 is not unusual in the
first quarter of the calendar year, due to increased frequency
and severity of automobile claims directly resulting from winter
weather. The loss ratio for the three months ended March 31, 2000
was 77.9% as compared to 83.0% in 1999. However, North East's
net loss is significantly lower than its $474,000 loss in the three
months ended March 31, 1999. This is primarily attributable to
significantly lower expenses, particularly reinsurance costs and
salaries. As a result, the expense ratio in the 2000 first quarter
was 32.0% as compared to 46.4% in 1999. An additional contributing
factor to the improved ratios is revenue growth of 39%, which in
part is affected by the aforementioned reductions in reinsurance
costs, combined with growth in all aspects of North East's
insurance products.
Financial Condition, Liquidity and Capital Resources
- ----------------------------------------------------
The Registrant's book value increased to $13.07 per share at
March 31, 2000 from $12.97 per share at December 31, 1999. The
sources of the net increase were net income of $250,000 or $0.12
described previously, offset by a decrease of $0.02 (net of
deferred taxes) in the market value of fixed maturity investments
accounted for as available-for-sale under SFAS No. 115. Interest
rates have continued to move upward, causing unrealized losses
during this period in the Registrant's investment portfolio.
Because the Insurance Companies' investment portfolios are
composed completely of securities which are generally highly
liquid and no default notices have been received on any of
those securities, there are no grounds to believe that the
unrealized losses incurred are other than temporary. In
addition, the combination of the duration of the portfolio being
sufficiently short, combined with the highly liquid nature of
those securities and the Registrant's proclivity to hold bonds to
maturity, the par value of bonds should be fully realized at
maturity, resulting in those unrealized losses being temporary.
The net unrealized loss of fixed maturity investments, net of
applicable deferred taxes, and included in accumulated other
comprehensive loss in the condensed consolidated balance sheet as
of March 31, 2000 was $1,810,000 or $.85 per share.
The Insurance Companies' need for liquidity arises primarily
from the obligation to pay claims. The primary sources of
liquidity are premiums received, collections from reinsurers and
proceeds from investments.
Reserving assumptions and payment patterns of the Insurance
Companies did not materially change from the prior year and there
were no unusually large retained losses resulting from claim
activity. Unpaid losses are not discounted.
Operating and Investing Activities
- -----------------------------------
Net cash provided by operating activities were $680,000 and
$881,000 in the three months ended March 31, 2000 and 1999,
respectively. The increase in cash flow from operating
activities in the three months ended March 31, 2000 as compared
to 1999 reflects the positive results of Motor Club and
Preserver.
Excluding the acquisition of Mountain Valley, net cash
utilized in investing activities was $2,475,000 in 2000 and
$121,000 in 1999 reflecting the investment of cash provided by
operating and financing activities.
Financing Activities
- --------------------
The Registrant paid no dividend on its common stock in 2000
or 1999.
The Registrant issued $11.5 million of Promissory Notes on
February 28, 2000 as described in Note 5 to Financial Statements
of this Form 10-Q.
The Registrant has no other material outstanding capital
commitments which would require additional financing.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
- -------------------------------------------------------------
Reform Act of 1995
This Report on Form 10-Q contains statements that are not
historical facts and are considered "forward-looking statements"
(as defined in the Private Securities Litigation Reform Act of
1995), including statements concerning the expected benefits of
the merger with North East and acquisition of Mountain Valley and
the expected future plans related thereto. These statements can
be identified by terms such as "believes", "expects", "may",
"will", "should", "anticipates", the negatives thereof, or by
discussions of strategy. Certain statements contained herein are
forward-looking statements that involve risks, uncertainties,
opinions and predictions, and no assurance can be given that the
future results will be achieved since events or results may
differ materially as a result of risks facing the Company. These
include, but are not limited to economic, market or regulatory
conditions as well as catastrophic events. Consummation of the
merger with North East and acquisition of Mountain Valley and
future benefits therefrom involve various risks and
uncertainties, including the risk of material adverse changes in
financial markets or the condition of the Company; risks
associated with the Company's entry into new markets; and state
regulatory and legislative actions which can affect the
profitability of certain lines of business and impede the
companies' ability to charge adequate rates. Accordingly, Motor
Club of America's premium growth and underwriting results has
been and will continue to be potentially materially affected by
those factors.
PART II
OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
a) Exhibits
None
b) Reports on Form 8-K
None
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.
MOTOR CLUB OF AMERICA
s/Stephen A. Gilbert
By: Stephen A. Gilbert
President
s/Patrick J. Haveron
By: Patrick J. Haveron
Executive Vice President -
Chief Financial Officer
and Chief Accounting Officer
Dated: May 18, 2000