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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 Exchange Act of 1934
Date of Report: December 31, 1998
(Date of earliest event reported)
Ceres Group, Inc.
(Exact Name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 0-8483 34-1017531
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(State or other jurisdiction of (Commission File Number) (IRS Employer Identification
Incorporation) Number)
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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 5. Other Events
On December 31, 1998, Central Reserve Life Insurance Company (CRL), a
subsidiary of Ceres Group, Inc., acquired Provident American Life and Health
Insurance Company from Provident American Corporation (PAMC) for $5.4 million in
cash. Funds for the acquisition were provided from CRL's working capital. In
addition, CRL, in conjunction with Reassurance Company of Hannover (RCH), is
assuming, through reinsurance, all the individual and small group health
insurance in force at December 31, 1998 of Provident Indemnity Life Insurance
Company, a subsidiary of PAMC, for approximately $10 million. CRL's portion of
the reinsurance is 10% and RCH's is 90%. Attached is a press release as Exhibit
99.1, which is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated December 30, 1998, issued by Ceres Group,
Inc.
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: January 11, 1999 CERES GROUP, INC.
By: /s/ Charles E. Miller, Jr.
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Chief Financial Officer
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EXHIBITS
Exhibit No. Exhibit
99.1 Press Release dated December 30, 1998
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Exhibit 99.1
CERES GROUP, INC.
17800 ROYALTON ROAD
STRONGSVILLE, OHIO 44136
NASDAQ: CERG
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
Gayle Vixler Jeff Wilhoit Janine Warell Margie Baigh
First Vice President General Information Analyst Inquiries Media Inquiries
(440) 572-2400 (312) 640-6757 (312) 640-6775 (312) 640-6690
FOR IMMEDIATE RELEASE
WEDNESDAY, DECEMBER 30, 1998
CERES GROUP SUBSIDIARY COMPLETES ACQUISITION
OF PROVIDENT AMERICAN LIFE AND HEALTH INSURANCE COMPANY
AND ALL HEALTH INSURANCE OF PROVIDENT AMERICAN CORP.
STRONGSVILLE, OHIO, DECEMBER 30, 1998 -- Central Reserve Life Insurance Company
(CRL), a subsidiary of CERES GROUP, INC. (NASDAQ: CERG), today announced it has
received regulatory approval from the Pennsylvania Department of Insurance for
completion effective at year-end of its acquisition of Provident American Life
and Health Insurance Company (PALHICO) from Provident American Corporation
(Nasdaq: PAMC) for approximately $5 million.
In addition, CRL, in conjunction with Reassurance Company of Hannover (RCH), a
member of Hannover Re's multi-billion-dollar international reinsurance group, is
assuming through reinsurance all the individual and small group health insurance
currently in force through PAMC's subsidiaries, PALHICO and Provident Indemnity
Life Insurance Company for approximately $10 million.
PAMC's insurance subsidiaries, based in Norristown, Pennsylvania, specialize in
marketing managed care health insurance products to individuals and small
businesses in 40 states, through a distribution system of 27,000 agents. In
1998, this block of business generated approximately $100 million in insurance
revenue. The transactions will not affect the policies or benefits of customers
insured by PAMC's two subsidiaries.
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CERES GROUP, INC.
ADD-1-
"We are pleased with this opportunity for CRL and PALHICO,"said Peter W.
Nauert, President and Chief Executive Officer of Ceres Group. "This
acquisition further highlights our strategy of growing our company through
strategically targeted acquisitions and by capitalizing on the marketing
strength of the acquired companies. The acquisition of PALHICO substantially
broadens our distribution system for small group insurance and senior health
and life insurance products."
CRL will continue to market the full line of insurance products currently sold
through PAMC's existing network of agents. The agents in the PAMC distribution
system will also have access to a variety of new CRL products to increase their
overall sales effectiveness.
CRL will also have an ongoing relationship with PAMC and its e-commerce
subsidiary, HealthAxis.com. This provides the Ceres insurance subsidiaries
their first entry into mass marketing of insurance products through the
Internet.
Through its strategic alliance and reinsurance facilities with RCH, the
acquisition of PALHICO and PAMC's block of health insurance business marks the
Ceres Group's second completed of three announced acquisitions since its $40
million equity funding was completed in July 1998. When Ceres finalizes the
acquisition of Continental General Corporation (expected in January 1999), the
group will have a total of 50,000 agents, over $700 million in combined annual
revenues and $600 million in combined assets.
Ceres Group, Inc. (formerly Central Reserve Life Corporation), through its
subsidiaries, specializes in meeting the accident and health insurance needs of
individuals and small to mid-sized businesses and the health and life insurance
needs of American age 65 and older.
This news release contains certain forward-looking statements with respect to
the financial condition, results of operations and business of the company.
Forward-looking statements are statements other than historical information or
statements of current condition. In light of the risks and uncertainties
inherent in all future projections, the inclusion of forward-looking statements
herein should not be regarded as representation by the company or any other
person that the objectives or plans of the company will be achieved. Many other
factors would cause actual results to differ materially from those contemplated
by such forward-looking statements, including, among others, failure to
successfully implement the business plan for the company, rising healthcare
costs, business conditions and competition in the healthcare industry,
developments in healthcare reform and other regulatory issues. The foregoing
review of important factors should not be construed as exhaustive. The company
undertakes no obligation to update forward-looking statements to reflect events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
FOR MORE INFORMATION ABOUT CERES GROUP, INC. TOLL-FREE VIA FAX,
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