SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 27, 1995
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20th Century Industries
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(Exact name of registrant as specified in its charter)
CALIFORNIA
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(State or other jurisdiction of incorporation)
0-6964 95-1935264
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(Commission File Number) (IRS Employer Identification No.)
6301 Owensmouth Avenue, Suite 700, Woodland Hills, CA 91367
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(Address of principal executive offices)
Registrant's telephone number, including area code ( 818 ) 704 - 3700
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(Former name or address, if changed since last report) NONE
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Item 5 Other Events
On January 27, 1995, the Registrant announced a settlement of rebate
liabilities associated with Proposition 103, passed by California voters on
November 8, 1988. See attached News Release.
SIGNATURES
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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.
20TH CENTURY INDUSTRIES
Date: January 27, 1995 by John R. Bollington
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Secretary, Senior Vice President
and General Counsel
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20th Century Industries
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NEWS
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Contact: Jeanne Ouellette or
Rob Williams at 213/629-4974
Company contact: Rick Dinon
or Ric Hill at 818/704-3595
FOR IMMEDIATE RELEASE January 27, 1995
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20TH CENTURY ANNOUNCES AGREEMENT
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CONCERNING PROPOSITION 103 REFUNDS
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(WOODLAND HILLS, CA) -- 20th Century Industries today announced a settlement of
rebate liabilities associated with Proposition 103, passed by California voters
on November 8, 1988. According to Neil H. Ashley, chief executive officer, the
agreement applies to both insurance subsidiaries, 20th Century Insurance Company
and 21st Century Casualty Company, and applies to those customers insured
between November 8, 1988 and November 7, 1989.
Ashley said the settlement with the California Department of Insurance will
permit refunds to customers while providing immediate capital additions to
buttress the financial strength of the company and provide additional financial
resources for potential earthquake claim increases.
Highlights of the order and agreement with California Insurance Commissioner
Chuck Quackenbush are:
. 20th Century will allocate $ 78 million for customer refunds, consistent
with the company's liability established through a Department of Insurance
administrative hearing during 1992.
. 20th Century will obtain new capital in the amount of $ 50 million and
contribute the funds to the insurance subsidiaries. The company will
promptly undertake the necessary financing actions required with the
assistance of American International Group, Inc. (NYSE: AIG). The New
York-based international insurance organization contributed $ 216 million
to 20th Century's capital under the terms of an investment agreement
approved by shareholders December 15, 1994.
6301 Owensmouth Avenue | Woodland Hills, California 91367
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. The companies will refund $ 46 million to customers specified in the
agreement as soon as practicable, representing an average payment per
household of $ 80.00, approximately 7.5 percent of premiums paid between
November 8, 1988 and November 7, 1989.
. $ 32 million will be set aside for additional customer refunds conditioned
on the ultimate level of claim cost associated with the 1994 Northridge
earthquake.
. The company will immediately add an additional $ 44 million to its capital
base from funds it had accumulated for possible interest liability on the $
78 million Proposition 103 rollback order. Interest penalties on the
liability established through the original refund order will not be
assessed.
. The request for a hearing with the United States Supreme Court to appeal
the California Supreme Court decision in the Proposition 103 test case
"20th Century vs. Garamendi" will be withdrawn and the company agrees to
abide by the terms of Commissioner Quackenbush's order.
Commenting on the agreement, Ashley said, "This was a very tough decision. We
believed strongly in the merits of our legal case challenging the
constitutionality of the Commissioner's refund order as applied to 20th Century.
However, the company was badly damaged by the Northridge earthquake and we can
certainly use the additional capital resources to provide a more secure
insurance environment for all our existing customers.
"This dialogue was initiated by Commissioner Quackenbush. He indicated his
desire soon after his election to clear up the outstanding Proposition 103
rebate issues and the Commissioner recognized the 20th Century case as an
obstacle in doing so. He also stated he wanted the company better capitalized
so it could withstand any unrecognized earthquake claim development and provide
for the security of customers having pending earthquake claims. Commissioner
Quackenbush also stated he wanted to see that a low-cost California insurer
would continue to provide competition within the California marketplace. Based
upon the Commissioner's representations, we began negotiations several weeks ago
to find a satisfactory solution that would balance the interests of the
company's customers, the solvency duties of the Commissioner and motivate the
company to discontinue its pursuit of the legal challenge to Proposition 103
refunds.
"As difficult as it is to accept this outcome emotionally, it is clearly a
benefit for a variety of competing interests and it recognizes that an
unfavorable decision in the company's lawsuit was a possibility. With this
dispute behind us, 20th Century can move ahead and set goals and aspirations for
the next century."
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20th Century Industries is a publicly-held company traded on the New York Stock
Exchange under the trading symbol TW. Wholly-owned subsidiaries are 20th
Century Insurance Company, which markets automobile and excess liability
insurance, and 21st Century Casualty Company, which markets automobile
insurance.
Both insurance subsidiaries sell directly to consumers without agents. 20th
Century Industries and subsidiaries' offices are located at 6301 Owensmouth
Avenue, Woodland Hills, CA 91367; 818-704-3514.
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