SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
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20TH CENTURY INDUSTRIES SAVINGS AND SECURITY PLAN
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(Exact name of the plan)
21ST CENTURY INSURANCE GROUP
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(Name of issuer)
Suite 700, 6301 Owensmouth Avenue, Woodland Hills, California 91367
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(Address of principal executive offices) (Zip Code)
<PAGE>
Financial Statements and Supplemental Schedule
20th Century Industries Savings and Security Plan
Years ended December 31, 1999 and 1998
with Report of Independent Auditors
<PAGE>
20th Century Industries Savings and Security Plan
Financial Statements
and Supplemental Schedule
Years ended December 31, 1999 and 1998
CONTENTS
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . 4
Audited Financial Statements
Statements of Net Assets Available for Benefits . . . . . . . . . . . . . . . 5
Statements of Changes in Net Assets Available for Benefits . . . . . . . . . 6
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 7
Supplemental Schedule
Schedule of Assets Held for Investment Purposes . . . . . . . . . . . . . . . 13
<PAGE>
Report of Independent Auditors
21st Century Insurance Group as Plan Administrator of the
20th Century Industries Savings and Security Plan
We have audited the accompanying statements of net assets available for benefits
of the 20th Century Industries Savings and Security Plan (the Plan) as of
December 31, 1999 and 1998, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes as of December 31, 1999, is presented for purposes
of additional analysis and is not a required part of the financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audit of the financial statements and, in our opinion,
is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/S/ ERNST & YOUNG LLP
June 1, 2000
<PAGE>
<TABLE>
<CAPTION>
20th Century Industries Savings and Security Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
1999 1998
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<S> <C> <C>
ASSETS
Investments, at fair value:
Mutual funds $ 63,754,691 $47,106,904
21st Century Insurance Group common stock 5,251,648 6,588,404
Short-term investment funds 83,042 152,137
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69,089,381 53,847,445
Guaranteed investment contract, at fair value 25,859,734 26,394,118
Loans to participants 7,302,570 6,514,036
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Total investments 102,251,685 86,755,599
Income receivable 46,638 -
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Net assets available for benefits $102,298,323 $86,755,599
============ ===========
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
20th Century Industries Savings and Security Plan
Statements of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31
1999 1998
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<S> <C> <C>
Additions to net assets:
Investment income:
Net appreciation in fair value of mutual funds $ 4,803,965 $ 6,288,236
Net depreciation in fair value of 21st Century
Insurance Group common stock (1,114,918) (638,373)
Interest and dividends 7,041,162 3,913,849
Loan interest income 578,265 590,855
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11,308,474 10,154,567
Contributions:
Employer 2,974,939 2,728,229
Employee 6,185,071 5,281,851
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9,160,010 8,010,080
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Total additions 20,468,484 18,164,647
Deductions from net assets:
Benefits paid to participants 4,896,654 4,356,670
Administrative expenses 29,106 24,448
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Net increase in net assets 15,542,724 13,783,529
Net assets available for benefits:
Beginning of year 86,755,599 72,972,070
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End of year $102,298,323 $86,755,599
============= ============
</TABLE>
See accompanying notes.
<PAGE>
20th Century Industries Savings and Security Plan
Notes to Financial Statements
December 31, 1999
1. DESCRIPTION OF PLAN
The following brief description of the 20th Century Industries Savings and
Security Plan (Plan) provides only general information. Participants should
refer to the Plan Document for more complete information. Copies of the Plan
Document are available from the Human Resources Benefits Office.
GENERAL
The Plan is a defined contribution plan incorporating the provisions of Section
401(k) of the Internal Revenue Code and covering substantially all employees of
21st Century Insurance Group (Employer). The Plan enables participants to make
contributions which the Employer matches in part. Contributions by and on behalf
of participants are invested in accordance with the participants' investment
designations in one or more investment options. Effective January 1, 1997,
Fidelity Investments began providing recordkeeping and trustee plan services,
and the Plan offered participants 10 new investment options. Plan participants
now have 15 investment options in which they may choose to have their funds
invested. Employees may elect to participate in the Plan upon becoming eligible,
which is after attaining the age of 20.
The Employer pays most of the Plan's administrative expenses. These expenses
include, but are not limited to, legal, accounting and recordkeeping fees.
However, loan fees are paid by participants, and investment expenses are paid by
the Plan.
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA).
CONTRIBUTIONS
Each participant can contribute up to 12% of earnings on a before-tax basis and
up to an additional 5% of earnings on an after-tax basis. The Employer matches
$.75 for every dollar contributed by a participant (before tax) up to a maximum
of 6% of the participant's eligible earnings. Forfeitures are used to offset
future Employer-matching contributions. Participants may change their
contribution percentages at any time during the Plan year. In addition, they may
elect to stop making contributions entirely. Effective June 17, 1991, Employer
contributions follow the participant's fund election. Prior to June 17, 1991,
Employer contributions were entirely invested in the Fixed Rate Fund.
<PAGE>
20th Century Industries Savings and Security Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
VESTING
Participants are immediately vested in their own contributions. Vesting in the
Employer-contributed amount is based on years of service. A participant vests
20% after two years of service and an additional 20% for each additional year. A
participant is 100% vested after six years of credited service.
PARTICIPANT ACCOUNTS
Each participant's account is credited with his or her other contributions, any
Employer matching contribution and an allocation of Plan earnings, and is
charged with any withdrawals.
PARTICIPANT LOANS
Each participant may obtain loans against his or her vested account balance.
Loans made through October 31, 1989 are at the prime rate at the time of loan
approval plus one percent. Loans made on or after November 1, 1989 are at the
prime rate plus two percent. Loans made on or after September 20, 1990, for the
purchase of a home are at the prime rate.
PAYMENT OF BENEFITS
Upon termination of service, a participant may generally elect to receive the
value of his or her account in either a lump-sum amount (if eligible) or in
installment payments for up to 15 years. Benefits become payable to participants
upon their termination of employment with the Employer or in the event of
elective withdrawal as permitted by the Plan.
PLAN TERMINATION
Although it has not expressed any intention to do so, the Employer has the right
under the Plan to terminate the Plan subject to the provisions set forth in
ERISA. Should the Plan terminate, or should contributions be discontinued, at
some future time, the rights of each affected participant to the entire amount
credited to his or her account on the date of such termination or discontinuance
shall be non-forfeitable and fully vested. Payment of such amounts to each
participant or beneficiary, upon the termination of the Plan or upon the
<PAGE>
20th Century Industries Savings and Security Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
PLAN TERMINATION (CONTINUED)
complete discontinuance of contributions under the Plan, shall be made by the
Plan administrator at such time and in such manner as the Plan administrator
shall state, provided, however, that all participants and beneficiaries
similarly situated shall be treated in a nondiscriminatory manner.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect amounts reported in the financial statements and accompanying notes.
Actual results could differ from these estimates.
VALUATION OF INVESTMENTS
Investments are reported at fair value, using quoted market prices. Participant
loans are reported at amounts owed by the participants.
3. FIXED RATE FUND
The fixed rate fund is a guaranteed investment contract consisting of funds
deposited with Pacific Life Insurance Company (Pacific Life). Pacific Life
maintains the contributions in an unallocated account, with a guaranteed
interest rate which is set annually not less than 30 days prior to the beginning
of the Plan year. The set rate was 6.25% for 1999 and 6.60% in 1998. The account
is credited with deposits and interest earnings and charged with Plan
withdrawals. The Employer pays the contract administration charge.
Per the contract, no transfer may be made out of the account by an individual
participant directly to a competing fixed income fund offered by the Plan.
The Employer may cancel the contract at any time by giving notice to Pacific
Life. Ordinarily, transfer of the balance in the account would be made in four
substantially equal annual installments starting within 90 days of cancellation.
However, if the announced guaranteed interest rate is less than the current rate
and the balance in the account 60 days prior to the end of the Plan Year exceeds
<PAGE>
20th Century Industries Savings and Security Plan
Notes to Financial Statements (continued)
3. FIXED RATE FUND (CONTINUED)
75% of the balance in the account at the beginning of the current Plan Year, the
Employer may cancel the contract within 30 days of the new rate announcement and
may withdraw the total account balance within 30 days of cancellation.
4. INVESTMENTS
The Plan's investments are invested in the Pacific guaranteed investment
contract, in 21st Century Insurance Group Common Stock (21st Century Insurance
Group Stock) and in 13 mutual funds administered by Fidelity Investments, which
also acts as trustee for the Plan. Funds in transit to and from any of the
investment options and the Plan Sponsor of the participants or other investment
options are temporarily invested in short-term investments by the trustee.
Fidelity Investments and 21st Century Insurance Group are considered parties in
interest.
<TABLE>
<CAPTION>
The following table presents the Plan's investments:
DECEMBER 31
1999 1998
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<S> <C> <C>
Investments at fair value:
Guaranteed Investment Contract $25,859,734* $ 26,394,118*
Mutual Funds:
Fidelity Magellan Fund 30,261,203* 21,114,005*
Fidelity Equity-Income Fund 13,665,370* 14,577,473*
Spartan U.S. Equity Index Fund 6,459,446* 4,407,402*
Fidelity Contrafund 5,917,948* 3,265,039
Fidelity Retirement Government Money Market
Portfolio
1,217,272 1,141,684
INVESCO Small Company Growth Fund 2,796,836 582,653
Fidelity Founders Balanced Fund 702,374 614,868
Templeton Foreign Fund I 783,222 380,544
Fidelity Freedom 2000 Fund 136,115 82,450
Fidelity Freedom 2010 Fund 725,771 483,454
Fidelity Freedom 2020 Fund 675,260 295,886
Fidelity Freedom 2030 Fund 377,361 149,211
Fidelity Freedom Income Fund 36,513 12,235
21st Century Insurance Group Stock 5,251,648* 6,588,404*
Loans to participants 7,302,570* 6,514,036*
Short-Term Investment Funds 83,042 152,137
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$102,251,685 $ 86,755,599
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</TABLE>
*Represents 5% or more of the fair value of net assets available for benefits.
<PAGE>
20th Century Industries Savings and Security Plan
Notes to Financial Statements (continued)
4. INVESTMENTS (CONTINUED)
Interest and dividend income was $7,041,162 for 1999 and $3,913,849 for 1998.
Net appreciation in fair value of mutual funds and Company stock was $3,689,047
for 1999 and $5,649,863 for 1998.
5. INCOME TAX STATUS
The Internal Revenue Service has issued a determination letter dated May 11,
1995 that the Plan qualifies, in form, under Sections 401(a) and 401(k) of the
Internal Revenue Code of 1986, as amended (the Code), and the underlying trust
is, therefore, exempt from federal income taxes under Section 501(a) of the
Code. The Plan is required to operate in accordance with the Code to maintain
its tax qualification. The Plan administrator is not aware of any course of
actions or series of events that have occurred which might adversely affect the
Plan's qualified status.
6. SUBSEQUENT EVENT
Effective January 21, 2000, the Plan changed its name to 21st Century Insurance
Group Savings and Security Plan.
<PAGE>
Supplemental Schedule
<PAGE>
20th Century Industries Savings and Security Plan
EIN: 95-1935264 Plan: 001
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT,
IDENTITY OF ISSUE, INCLUDING MATURITY DATE,
BORROWER, LESSOR RATE OF INTEREST, PAR OR CURRENT
OR SIMILAR PARTY MATURITY VALUE COST VALUE
----------------------------------- -------------------------------- ----------- ------------
<S> <C> <C> <C>
Pacific Life Insurance Company Guaranteed Investment
Contract $25,859,734 $ 25,859,734
Fidelity Retirement Government
Money Market Fund (1) Money Market Fund 1,217,273 1,217,272
Fidelity Equity-Income Fund (1) 255,523 Mutual Fund Shares 11,561,942 13,665,370
Fidelity Magellan Fund (1) 221,483 Mutual Fund Shares 21,708,457 30,261,203
Fidelity Freedom Income Fund (1) 3,223 Mutual Fund Shares 35,835 36,513
Fidelity Freedom 2000 Fund (1) 10,478 Mutual Fund Shares 123,893 136,115
Fidelity Freedom 2010 Fund (1) 48,808 Mutual Fund Shares 610,983 725,771
Fidelity Freedom 2020 Fund (1) 41,225 Mutual Fund Shares 581,871 675,260
Fidelity Freedom 2030 Fund (1) 22,356 Mutual Fund Shares 314,387 377,361
Fidelity Founders Balanced Fund (1) 67,084 Mutual Fund Shares 778,200 702,374
Spartan U.S. Equity Index Fund 124,005 Mutual Fund Shares 4,988,687 6,459,446
Fidelity Contrafund (1) 98,599 Mutual Fund Shares 5,459,994 5,917,948
INVESCO Small Company Growth
Fund 150,206 Mutual Fund Shares 2,166,552 2,796,836
Templeton Foreign Fund I 69,806 Mutual Fund Shares 708,300 783,222
Fidelity Short Term Investment
Fund (1) Short-Term Investment Fund 83,042 83,042
21st Century Insurance Group
Stock (1) 442,468 Common Stock Shares 5,253,449 5,251,648
Participant Loans (1) Interest rates between 8.5% and
10.5% - 7,302,570
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$102,251,685
============
<FN>
(1) Party-in-interest to the Plan.
</TABLE>
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
8 No. 33-80180) pertaining to 20th Century Industries Savings and Security Plan
of our report dated June 28, 2000, with respect to the financial statements and
schedules of 20th Century Industries Savings and Security Plan included in this
Annual Report (Form 11-K) for the year ended December 31, 1999.
/S/ ERNST & YOUNG LLP
Los Angeles, California
June 22, 2000
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
20th Century Industries Savings and Security Plan
Date: June 28, 2000
By: /s/ Richard Andre
--------------------------------
Richard Andre, Vice President
21st Century Insurance Group
Chairman Benefits Committee
<PAGE>
