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Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report: August 27, 1998
(Date of earliest event reported)
Central Reserve Life Corporation
(Exact Name of Registrant as specified in its charter)
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<CAPTION>
<S> <C> <C>
Ohio 0-8483 34-1017531
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(State or other jurisdiction of (Commission File Number) (IRS Employer Identification Number)
Incorporation)
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17800 Royalton Road, Strongsville, Ohio 44136
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(Address of Principal Executive Offices) (Zip Code)
(440) 572-2400
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(Registrant's telephone number, including area code)
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Item 4. Change in Registrant's Certifying Accountant.
(a) Central Reserve Life Corporation (the "Company") has appointed Ernst &
Young LLP as its independent accountants to replace the firm of KPMG
Peat Marwick LLP, effective August 27, 1998.
The Audit Committee of the Company's Board of Directors approved the
engagement of Ernst & Young LLP as the Company's independent auditors.
The audit reports of KPMG Peat Marwick LLP on the Company's
consolidated financial statements for the two fiscal years ended
December 31, 1997, did not contain an adverse opinion or a disclaimer
of opinion, but were modified for going concern uncertainties.
In connection with the audits of the Company's consolidated financial
statements for the fiscal years ended December 31, 1997 and 1996, and
the subsequent interim period through August 27, 1998, there were no
disagreements with KPMG Peat Marwick LLP on any matters of accounting
principles or practices, financial statement disclosure, or auditing
scope and procedures which, if not resolved to the satisfaction of KPMG
Peat Marwick LLP would have caused KPMG Peat Marwick LLP to make
reference to the matter in their report.
There were no "reportable events" as that term is described in Item
304(a)(1)(v) of Regulation S-K.
A letter from KPMG Peat Marwick LLP, dated September 2, 1998, is filed
as Exhibit 16.1 to this Form 8-K.
(b) The Company engaged Ernst & Young LLP as its new independent
accountants effective August 27, 1998. During the two most recent
fiscal years and through August 27, 1998, the Company has not consulted
with Ernst & Young LLP regarding (1) the application of accounting
principles to any transaction, (2) the type of audit opinion that might
be rendered on the Company's financial statements, (3) any disagreement
or reportable event as those terms are described or defined in Items
304(a)(1)(iv) and 304(a)(1)(v) of Regulation S-K, or (4) any other
matters or events set forth in Item 304(a)(2) of Regulation S-K.
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Item 7. Financial Statements and Exhibits.
(c) Exhibits
16.1 Letter of KPMG Peat Marwick LLP dated September 2, 1998
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SIGNATURES
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 hereunto duly authorized.
Date: September 3, 1998 CENTRAL RESERVE LIFE CORPORATION
By: /s/ Frank W. Grimone
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Chief Financial Officer
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EXHIBITS
Exhibit No. Exhibit
16.1 Letter of KPMG Peat Marwick LLP dated
September 2, 1998
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Securities and Exchange Commission
Washington, D.C. 20549
September 2, 1998
Ladies and Gentlemen:
We were previously principal accountants for Central Reserve Life Corporation
and, under the date of February 20, 1998, except for Notes 1(b) and 7, as to
which the date was March 30, 1998, we reported on the consolidated financial
statements of Central Reserve Life Corporation and subsidiaries as of and for
the years ended December 31, 1997 and 1996. Our report dated February 20, 1998,
except for notes 1(b) and 7, as to which the date is March 30, 1998, contains an
explanatory paragraph that states that the Company has suffered substantial
losses from operations in 1997 and 1996 that resulted in a significantly reduced
net capital position and that in December 1997, the Company obtained an interim
loan of $20 million that absent some future event the Company would not have the
ability to repay, which matters raise substantial doubt about its ability to
continue as a going concern. The consolidated financial statements and financial
statement schedules do not include any adjustments that might result from the
outcome of that uncertainty.
We have read Central Reserve Life Corporation's statements under Item 4 of its
Form 8-K dated August 27, 1998, and we agree with such statements, except that
we are not in a position to agree or disagree with Central Reserve Life
Corporation's statements that (1) Ernst & Young LLP was engaged as independent
accountants, (2) the change was approved by the audit committee of the board of
directors and (3) Ernst & Young LLP was not engaged regarding the application of
accounting principles to a specified transaction, the type of audit opinion that
might be rendered on Central Reserve Life Corporation's consolidated financial
statements, any disagreement or reportable event as those terms are described or
defined in Items 304(a)(1)(iv) and 304(a)(1)(v) of Regulation S-K, or any other
matters or events set forth in Item 304(a)(2) of Regulation S-K.
Very truly yours,
/s/ KPMG Peat Marwick LLP
