PRESIDENT'S MESSAGE

2008 has been a challenging year.  The unstable markets have resulted in a decline in investment values in all markets.  We are uncertain how long it will take the markets to stabilize, but it will be our goal to do everything possible to preserve the value of our investment portfolio as we look forward to new growth opportunities.

The current economic situation has overshadowed the good news of a 3% increase in total premium income.  In the last 4 years, our premium income has increased over 18%.  Another positive development is the acceptance into four new states.  In addition, we are developing new products and diversifying our existing product line.  These changes should provide significant growth to the company in coming years.

Our goal for the future will be to minimize the stress to our surplus as we grow.  Another note of comfort is that even in these difficult times our statutory ratio of capital and surplus to total admitted assets is 40% remaining one of the highest in the industry.  

As the economy struggles to right itself, we must anticipate some reduction of  income from our investments as we strive to move our company forward.  Our efforts would not be possible without our wonderful home office staff.  Coupled with a strong agency force, your company is positioned well to weather this global financial storm.  Thank you for your support and confidence.

Earl L. Tate
President