31, an increase of 24 percent over the 1995 year.

Trading in the company's common shares was suspended from October 26, 1995 due to legal action against it from liquidators of The Bermuda Fire & Marine Insurance Co. and certain of its creditors.

Trading of the company's preference shares started and closed the 1996 year at $8.75. Chairman Charles Collis stated in the company's annual report that the price reflected the "adverse publicity'' surrounding the legal action. The preference shares last traded at $9 on April 16.

Mr. Collis noted in the company's annual report that BF&M's net earnings dipped in 1995 to $8.15 million from a 1994 high of $8.9 million. He attributed the 1996 growth in earnings to a reduction in claims.

Earnings per share was $2.44 for 1996 compared to $1.83 for 1995. Gross premiums earned increased 7.7 percent to $56.9 million in 1996. Gross premiums were affected by a decision to hold health insurance rate increases to the "minimum possible'' and also by a softening of rates for large commercial property accounts, Mr. Collis stated.

The company's operating expenses increased 4.1 percent while total expenses, including claims and policy benefits, increased by eight percent. Total assets at the end of 1996, excluding segregated account funds, stood at $147.2 million.

The company's largest lines of business, its group health and property accounts were able to maintain market share. Its property casualty return on equity was 18.1 percent compared to the US average estimate of 7.3 percent for 1996. In the motor business BF&M "experienced a slight slippage in market share, which was to be expected as we endeavoured to meet our objective of moving this account into profit,'' according to the management report. The company's marine account also lost money in 1996 although "substantially'' less than the 1995 loss.

President and Chief Executive Officer Glenn Titterton told The Royal Gazette that it was difficult to make profits in the motor and marine lines of business.

"We continue to write these lines of business so as to provide a well rounded service to our customers,'' he said.

Wholly owned subsidiary BF&M Life had a 14 percent increase in profitability in 1996 bfore unusual charges in reserves. Return on surplus for the year was 21.2 percent compared to the US life industry average of 8.3 percent. Claims for local health care costs increased 15 percent over the 1995 year while overseas costs increased by six percent. The company paid out dividends of 40 cents a common share totalling about $1.3 million, and 90 cents a preference share totalling about $2.3 million in 1996. As of December 31 last year BF&M's directors and officers held a total of 73,438 ordinary shares and 43,715 preference shares.