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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported) JUNE 17, 1997
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ZENITH NATIONAL INSURANCE CORP.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE 1-9627 95-2702776
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
21255 CALIFA STREET, WOODLAND HILLS, CA 91367-5021
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (818) 713-1000
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
Zenith National Insurance Corp. (the "Company") issued a press
release dated June 17, 1997, (a copy of which is attached as an exhibit
hereto) announcing that its wholly-owned subsidiary, Zenith Insurance Company
("Zenith"), has entered into an agreement with RISCORP, Inc. ("RISCORP").
The key elements of the press release are summarized below:
1. Zenith has agreed to purchase all of the assets of RISCORP
related to its workers' compensation business, including RISCORP's existing
in-force insurance business as well as the right to all new and renewal
policies. Zenith also agreed to purchase RISCORP's "First Call" managed care
workers' compensation system. After the transaction closes, RISCORP will no
longer engage in the workers' compensation or managed care businesses.
2. Zenith will assume certain liabilities related to RISCORP's
insurance businesses in connection with the transaction, including $15,000,000
in indebtedness of RISCORP. The purchase price paid by Zenith to RISCORP will
be the difference between the book value of the assets purchased and the book
value of the liabilities assumed by Zenith on the closing date, subject to a
minimum purchase price of $35 million. The purchase price will be payable in
cash.
3. Zenith will finance the purchase with bank financing and internal
funds.
4. Zenith and RISCORP have also entered into an agreement under
which all new and renewal RISCORP policies issued after today (June 17, 1997)
will be reinsured by Zenith, an A.M. Best Company A+ (Superior) rated carrier,
until Zenith assumes such policies at the closing.
5. Zenith will not be purchasing the stock of RISCORP or its
affiliates or (except as noted above) assuming the corporate liabilities of
these companies, including liabilities related to any present or future
litigation against those companies.
6. The closing of the purchase is subject to the review and approval
by appropriate state and federal regulatory agencies and by RISCORP's
shareholders. The agreement has been approved by the Boards of Directors of
Zenith National Insurance Corp., Zenith, and RISCORP.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
c. Exhibits
Exhibit Number 99. Press Release of Zenith National Insurance
Corp. dated June 17, 1997.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
ZENITH NATIONAL INSURANCE CORP.
Dated: June 25, 1997 By: /s/ Fredricka Taubitz
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Name: Fredricka Taubitz
Title: Executive Vice President &
Chief Financial Officer
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[LOGO]
Zenith National Insurance Corp.
21255 Califa Street
Woodland Hills, CA 91367-5021
Reply to: P.O. Box 9055
Van Nuys, CA 91409-9055
Telephone 818/713-1000
PRESS RELEASE [LOGO]
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FREDRICKA TAUBITZ BUSINESS & FINANCIAL EDITORS
EXECUTIVE VICE PRESIDENT
& CHIEF FINANCIAL OFFICER
FOR IMMEDIATE RELEASE
ZENITH NATIONAL ACQUIRES WORKERS' COMPENSATION BUSINESS OF RISCORP
WOODLAND HILLS, CALIFORNIA, June 17, 1997 - ZENITH NATIONAL INSURANCE CORP.
(ZNT) announced today that its wholly-owned subsidiary, Zenith Insurance Company
(Zenith) has entered into an agreement with RISCORP Inc. (NASDAQ:RISCE) to
purchase all of the assets of RISCORP related to its workers' compensation
business, including RISCORP's existing in-force insurance business as well as
the right to all new and renewal policies. Zenith will also purchase RISCORP's
"First Call" managed care workers' compensation system. After the transaction
closes, RISCORP will no longer engage in the workers' compensation or managed
care businesses.
Zenith will assume certain liabilities related to RISCORP's insurance businesses
in connection with the transaction. The purchase price paid by Zenith to
RISCORP will be the difference between the book value of the assets purchased
and the book value of the liabilities assumed by Zenith on the closing date,
subject to a minimum purchase price of $35 million. The purchase price will be
payable in cash.
Zenith will finance the purchase with bank financing and internal funds.
Zenith and RISCORP have also entered into an agreement under which all new and
renewal RISCORP policies issued after today will be reinsured by Zenith, an
A.M. Best Company A+ (Superior) rated carrier, until Zenith assumes such
policies at the closing.
Zenith will not be purchasing the stock of RISCORP or its affiliates or assuming
the corporate liabilities of these companies, including liabilities related to
any present or future litigation against those companies.
-more-
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[LOGO]
The closing of the purchase is subject to the review and approval by appropriate
state and federal regulatory agencies and by RISCORP's shareholders. The
agreement has been approved by the Boards of Directors of Zenith National
Insurance Corp., Zenith, and RISCORP.
Chairman and President of Zenith National Insurance Corp., Stanley Zax, said,
"We believe that this strategic acquisition will add profitable workers'
compensation business, additional geographic diversification and state of the
art managed care capability to our operation. The transaction has been designed
to add financial strength to RISCORP policyholders immediately."
Zenith is a workers' compensation specialist with 1996 premiums written of about
$200 million. Zenith currently has operations in twenty-six states, primarily
California, Florida and Texas. During the past five years, Zenith's managed
care initiatives, return to work strategies, safety and health programs, fraud
investigation and litigation efforts resulted in the lowest loss ratios of the
top 50 writers of workers' compensation insurance in the United States.
The above release contains statements that constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities and Exchange Act of 1934, as amended.
The words "believe", "estimate", "expect", "intend", "anticipate", and similar
expressions and variations thereof identify certain of such forward-looking
statements, which speak only as of the dates on which they were made. Zenith
National Insurance Corp. undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events, or otherwise. Readers are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those
indicated in the forward-looking statements as a result of various factors.
Readers are cautioned not to place undue reliance on these forward-looking
statements.
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