SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the year ended December 31, 1993
INDEPENDENT INSURANCE GROUP, INC.
INDEPENDENT LIFE INVEST PLAN
INDEPENDENT INSURANCE GROUP, INC.
One Independent Drive
Jacksonville, Florida 32276
Telephone: (904) 358-5151
INDEPENDENT INSURANCE GROUP, INC.
INDEPENDENT LIFE INVEST PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1993
CORPORATE FIXED INDEPENDENT
EQUITY BALANCED INCOME GIC STOCK
FUND FUND FUND FUND FUND TOTAL
ASSETS:
Cash $143 $1 $0 $0 $1 $145
Investments, at market (Note 3):
Independent Insurance Group, Inc.
non-voting
common stock 0 0 0 0 916,382 916,382
Common trust
funds 5,976,983 2,969,427 1,687,164 2,191,608 629,387 3,454,569
Loans to
participants 206,834 94,694 53,472 62,909 66,798 484,707
Employer contributions
receivable 239,237 123,404 77,149 100,352 86,290 626,432
Total Assets 6,423,197 3,187,526 1,817,785 2,354,869 1,698,858 15,482,235
LIABILITIES:
Withdrawals and distributions
payable to
participants 230,653 56,681 40,351 60,579 34,266 422,530
NET ASSETS AVAILABLE FOR
BENEFITS $6,192,544 $3,130,845 $1,777,434 $2,294,290 $1,664,592 $15,059,705
See accompanying notes to financial statements.
INDEPENDENT INSURANCE GROUP, INC.
INDEPENDENT LIFE INVEST PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
CORPORATE FIXED INDEPENDENT
EQUITY BALANCED INCOME GIC STOCK
FUND FUND FUND FUND FUND TOTAL
ADDITIONS:
Contributions:
Participants $1,575,766 $778,650 $474,975 $651,955 $547,266 $4,028,612
Employer (net of forfeitures
of $26,934) 240,099 124,117 77,804 100,970 86,751 629,741
Investment income:
Interest 110,504 113,333 88,761 131,798 1,552 445,948
Dividends 0 0 0 0 20,903 20,903
Interest on loans to
participants 10,872 5,462 3,119 3,489 3,836 26,778
Net realized gains/
(losses) 745,974 250,463 52,437 21,246 (101,202) 968,918
Transfers:
Interfund
transfers 46,834 29,648 88,931 (87,390) (78,023) 0
Transfer from South
Atlantic Plan 72,922 62,615 10,644 105,703 17,176 269,060
Total
Additions 2,802,971 1,364,288 7,960,671 927,771 498,259 6,389,96
DEDUCTIONS:
Withdrawals and distributions to
participants 677,376 304,362 212,840 341,316 189,850 1,725,744
Net unrealized depreciation/(appreciation)
in fair value of
investments 330,860 113,185 2,522 34,015 (79,619) 400,963
Total
Deductions 1,008,236 417,547 215,362 375,331 110,231 2,126,707
Net increase 1,794,735 946,741 581,309 552,440 388,028 4,263,253
NET ASSETS AVAILABLE FOR BENEFITS -
BEGINNING OF
YEAR 4,397,809 2,184,104 1,196,125 1,741,850 1,276,564 10,796,452
NET ASSETS AVAILABLE FOR BENEFITS -
END OF
YEAR $6,192,544 $3,130,845 $1,777,434 $2,294,290 $1,664,592 $15,059,705
See accompanying notes to financial statements.
INDEPENDENT INSURANCE GROUP, INC.
INDEPENDENT LIFE INVEST PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1992
CORPORATE FIXED INDEPENDENT
EQUITY BALANCED INCOME GIC STOCK
FUND FUND FUND FUND FUND TOTAL
ASSETS:
Cash $28,568 $13,980 $7,822 $12,044 $11,465 $73,879
Investments, at market (Note 3):
Independent Insurance Group, Inc.
non-voting
common stock 0 0 0 0 1,275,451 1,275,451
Common trust
funds 4,081,151 2,013,375 1,069,776 1,595,031 23,588 8,782,921
Loans to
participants 73,318 48,298 27,215 31,437 33,059 213,327
Contributions receivable:
Employer 238,824 126,012 70,898 111,969 109,194 656,897
Participants 9 46 23 136 (11) 203
Transfers receivable
(payable) 42,810 24,480 51,879 22,066 (141,235) 0
Total Assets 4,464,680 2,226,191 1,227,613 1,772,683 1,311,511 11,002,678
LIABILITIES:
Withdrawals and
distributions payable to
participants 66,847 42,093 31,490 30,846 34,941 206,217
Other payables
(receivables) 24 (6) (2) (13) 6 9
Total
Liabilities 66,871 42,087 31,488 30,833 34,947 206,226
NET ASSETS
AVAILABLE FOR
BENEFITS $4,397,809 $2,184,104 $1,196,125 $1,741,850 $1,276,564 $10,796,452
See accompanying notes to financial statements.
INDEPENDENT INSURANCE GROUP, INC.
INDEPENDENT LIFE INVEST PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1992
CORPORATE FIXED INDEPENDENT
EQUITY BALANCED INCOME GIC STOCK
FUND FUND FUND FUND FUND TOTAL
ADDITIONS:
Contributions:
Participants $1,520,803 $747,056 $419,606 $652,374 $642,397 $3,982,236
Employer (net of forfeitures
of $20,352) 239,618 126,262 71,061 112,201 109,744 658,886
Investment income:
Interest 87,991 95,072 68,347 96,248 2,097 349,755
Dividends 0 0 0 0 55,647 55,647
Interest on loans to
participants 5,087 2,379 1,469 1,353 1,734 12,022
Net realized
gains 326,188 116,641 33,306 3,195 16,516 495,846
Total
Additions 2,179,687 1,087,410 593,789 865,371 828,135 5,554,392
DEDUCTIONS:
Withdrawals and
distributions to
participants 334,985 145,637 96,882 127,151 161,817 866,472
Net unrealized depreciation
in fair value of
investments 157,297 86,640 30,360 14,441 318,685 607,423
Interfund
transfers (3,561) (50,147) (72,621) (5,790) 132,119 0
Total
Deductions 488,721 182,130 54,621 135,802 612,621 1,473,895
Net increase 1,690,966 905,280 539,168 729,569 215,514 4,080,497
NET ASSETS AVAILABLE FOR BENEFITS -
BEGINNING OF
YEAR 2,706,843 1,278,824 656,957 1,012,281 1,061,050 6,715,955
NET ASSETS AVAILABLE FOR BENEFITS -
END OF
YEAR $4,397,809 $2,184,104 $1,196,125 $1,741,850 $1,276,564 $10,796,452
See accompanying notes to financial statements.
INDEPENDENT INSURANCE GROUP, INC.
INDEPENDENT LIFE INVEST PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 AND 1992
1. DESCRIPTION OF THE PLAN
The following description of the Independent Life Invest
Plan (the "Plan") provides general information to
participants. Participants should refer to the Plan
document for a more complete description of the Plan's
provisions.
General
The Plan, as amended and restated on April 10, 1992 and May
8, 1992, was commenced and made effective August 8, 1990
under the provisions of Section 401(k) of the Internal
Revenue Code. The Plan is a defined contribution plan
covering all full-time employees of The Independent Life and
Accident Insurance Company and its affiliates (the
"Company") with one year or more of service and who are at
least twenty-one years of age. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
Contributions
Employee
Highly compensated employees, as described in Internal
Revenue Code Section 414(q), may make basic contributions
from 1% to 4% and supplemental contributions from 1% to 3%
of their earned compensation, limited to $8,994 (as
adjusted for the cost of living as defined by the
Secretary of the Treasury) per calendar year. Earned
compensation is defined as base pay plus commissions, not
to exceed $235,840 (as indexed by the Internal Revenue
Service) per year. Non-highly compensated employees may
make basic contributions from 1% to 4% and supplemental
contributions from 1% to 11% of their earned compensation,
limited to $8,994 per calendar year. The percentage which
will be considered a basic contribution may be changed for
any future period by action of the Company's Board of
Directors.
Employer
The Company makes annual matching contributions equal to
25% of each participant's basic contribution for the Plan
year. The Company's Board of Directors may change the
matching percentage prior to each Plan year.
Participant Accounts
The Company maintains separate Basic Contribution accounts,
Supplemental Contribution accounts, and Employer
Contribution accounts for each participant. Employee
contributions are deposited to participant accounts each
payroll period; employer contributions are allocated to
participant accounts on the last day of each Plan year to
participants who were employed by the Company on the last
day of the Plan year or employees whose separation from
service was due to retirement, total and permanent
disability, or death. Earnings of each investment fund,
together with any increases or decreases in the fair
market value of the fund investments, are allocated to
participant accounts on the last day of each calendar
quarter based on the participant's percentage of the
applicable Investment Fund. Forfeitures of employer
contributions are applied to reduce employer contributions
otherwise payable; in a Plan year in which no employer
contributions are made to the Plan, forfeitures will be
allocated to participants who otherwise would have been
eligible to receive an allocation of employer
contributions.
Each participant may elect, in multiples of 10%, the
following investment options:
Sun Trust Corporate Equity Fund - a fund of common
stocks, convertible bonds and cash, with the objective
of maximizing principal growth and generating an
above-average return;
Sun Bank Balanced Fund - a fund allowing for
participation in all financial markets with a moderate
income/moderate growth objective;
Sun Bank High Grade Fixed Income Fund - a fund
providing a higher level of short-term risk with a
higher potential for long-term return, investing in
high-yielding fixed income bonds with a rating of "A"
or better;
Sun Trust Employee Benefit GIC Fund - a fund guaranteeing the
full principal by investing in insurance company
Guaranteed Investment Contracts and short-term money market
instruments;
Independent Stock Fund - invests in the common stock of
Independent Insurance Group, Inc., the Company's Parent. The stock is
purchased by the Plan's Investment Manager in a market transaction at
the current market price as quoted on the NASDAQ National Market
System.
Vesting
The Plan provides that employee contribution accounts are
immediately and fully vested. Employer contribution
accounts become vested over a six-year period according to
the following schedule:
Years of Service Vesting Percentage
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
Withdrawals and Loans
Participants under age 59 1/2 may make withdrawals of their
vested account balance only by demonstrating financial
hardship as defined in the Plan provisions. Participants
who have attained age 59 1/2 may withdraw all or part of
their vested account balance without regard to the financial
hardship requirement. Participants who are actively
employed by the Company may borrow a minimum of $1,000 up to
one-half of the vested portion of their account balance to a
maximum of $50,000. The loans bear interest at rates set by
the Invest Plan Committee, and are repayable over a period
from one to five years. The loans are treated as separate
investments of the participants' accounts and the unpaid
balance of each participant's loan is credited, on a
proportional basis, with earnings based on the cumulative
interest earnings on all outstanding participant loans.
Payment of Benefits
On termination of employment, death, or disability of the
participant, payment will be made based on Plan provisions
and participant elections. Such payment alternatives may
include one lump-sum cash payment or deferred payments.
Administrative Costs
All expenses of the Plan and the Trustee shall be paid from
the assets of the Plan unless paid by the Company. During
1993 and 1992, all expenses of the Plan ($174,872 in 1993
and $144,518 in 1992) were paid by the Company.
Plan Termination
Although the Company has established the Plan as a permanent
plan with the intention and expectation that it will
continue in effect, the Company has the right to terminate
the Plan at any time. In the event of complete termination
of the Plan, the accrued benefit of each participant who is
employed on the termination date shall be nonforfeitable, no
further contributions or allocations shall be made after
such date, and no employee shall become a participant after
such date.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Plan's accounts are maintained on the accrual basis
which records revenues when earned, contributions in the
period in which the right to receive such arise, and
expenses when incurred.
Investments
The Plan's investments are held in common trust funds
administered by Sun Bank N.A. The value of investments are
based upon quoted market values on the last business day of
the Plan year. The Plan's share of the investment income of
the Sun Bank common trust funds is determined based on the
Plan's proportionate share of the net assets of the common
trust funds. Securities transactions are recorded on a
trade date basis. The difference between cost and market
value of investments at the beginning and end of the period
is reported as unrealized appreciation or depreciation on
investments using the average cost method.
Income Taxes
The Plan has received a favorable determination from the
Internal Revenue Service as to the Plan's compliance with
the requirements of Section 401(a) of the Internal Revenue
Code (the "Code") and its exemption from Federal income
taxes under the provisions of Section 501(a) of the Code;
accordingly, no provision for income taxes has been made in
the Plan's financial statements. Plan income and employer
contributions represent taxable income to the Participants
only when distributed.
Amendments
Certain technical amendments were made to the Plan during
1992 to comply with the requirements of Sections 401(a) and
501(a) of the Internal Revenue Code. These amendments did
not materially affect the financial status of the Plan.
3. INVESTMENTS
The Plan's investments at December 31, 1993 and 1992 are
summarized as follows:
1993
Face Value
or Number Market
of Shares Cost Value
Common Stock:
Independent Insurance
Group, Inc. Non-voting
Common Stock 58,183 $ 1,047,140 $ 916,382
Common Trust Funds:
Sun Trust Retirement
Reserve Fund 880,033 $ 880,033 $ 880,033
Sun Trust Corporate
Equity Fund 71,891 7,583,017 7,345,822
Corporate Fixed
Income Fund 1,747 988,345 949,355
Corporate Intermediate
Fixed Income Fund 19,000 502,062 470,440
Sun Bank High Grade
Bond Fund 105,074 1,671,216 1,650,713
Sun Trust Employee Benefit
Stable Asset Fund 112,348 2,210,828 2,158,206
$13,835,501 $13,454,569
1992
Face Value
or Number Market
of Shares Cost Value
Common Stock:
Independent Insurance
Group, Inc. Non-voting
Common Stock 80,981 $1,485,828 $1,275,451
Common Trust Funds:
Sun Trust Retirement
Reserve Fund 134,442 $ 134,442 $ 134,442
Sun Trust Corporate
Equity Fund 54,279 4,848,793 5,020,808
Corporate Fixed
Income Fund 1,223 611,030 592,103
Corporate Intermediate
Fixed Income Fund 17,628 422,120 405,268
Sun Bank High Grade
Bond Fund 74,558 1,072,231 1,054,250
Sun Trust Employee Benefit
Stable Asset Fund 87,075 1,594,655 1,576,050
$8,683,271 $8,782,921
The Participants' investment option elections at December 31,
1993 and 1992 are summarized as follows:
Number of Participants
1993 1992
Corporate Equity Fund 1,809 2,471
Balanced Fund 1,271 1,711
Fixed Income Fund 1,012 1,338
GIC Fund 1,073 1,574
Independent Stock Fund 1,050 1,823
4. SOUTH ATLANTIC PLAN MERGER
On March 31, 1993, the profit sharing and savings plan
sponsored by South Atlantic Life Insurance Company, a
company purchased by The Independent Life and Accident
Insurance Company in 1989, was terminated and merged into
the Plan. In connection with the merger, nineteen South
Atlantic plan participants became participants of the Plan
and $269,060 of net assets available for benefits was
transferred to the Plan.
5. SUBSEQUENT EVENT
On January 1, 1994, the Plan terminated the appointment of
Sun Bank, N.A. as Trustee and appointed Wachovia Bank of
North Carolina, N.A. as the successor Trustee.
Participants' investment balances on that date were
transferred to Wachovia and allocated among the following
funds based on individual participant investment option
elections:
New York Venture Fund
Fidelity Advisor Limited Term Bond Portfolio
Templeton Foreign Fund
American Funds: Washington Mutual Investors
Bankers Trust Pyramid GIC Fund
Independent Insurance Group, Inc.
Nonvoting Common Stock
Independent Life Invest Plan
Assets Held for Investment
December 31, 1993
1993
Shares or
Face Value Cost Fair Value
Common Stock:
Independent Insurance Group, Inc.
Non-voting Common Stock 58,183 $1,047,140 $916,382
Common Trust Funds:
Sun Trust Retirement Reserve Fund 880,033 $880,033 $880,033
Sun Trust Corporate Equity Fund 71,891 7,583,017 7,345,822
Corporate Fixed Income Fund 1,747 988,345 949,355
Corporate Intermediate
Fixed Income Fund 19,000 502,062 470,440
Sun Bank High Grade Bond Fund 105,074 1,671,216 1,650,713
Sun Trust Employee Benefit
Stable Asset Fund 112,348 2,210,828 2,158,206
$13,835,501 $13,454,569
INDEPENDENT LIFE INVEST PLAN
Transactions or Series of Transactions in Excess of 5 Percent
of the Current Value of Plan Assets
Year ended December 31, 1993
Identity of Party
Involved Description of Asset Purchase
Price
1)Sun Bank Trust & Investment SunTrust Retirement Reserve Fund
Management Group 6,763,232 units purchased $6,017,641
6,017,641 units sold -
2)Sun Bank Trust & Investment SunTrust Corporate Equity Fund
Management Group 19,442 units purchased 1,853,154
1,830 units sold -
3)Sun Bank Trust & Investment SunTrust Employee Benefit Stable
Management Group Asset Fund
37,456 units purchased 693,583
12,182 units sold -
4)Sun Bank Trust & Investment Independent Insurance Group, Inc.
Management Group Nonvoting Common Stock
21,574 shares purchased 362,898
44,260 shares sold -
Current Value Net
Selling Cost of Asset on Gain
Price of Asset Transaction Date (Loss)
1)SunTrust Retirement Res Fund
6,763,232 units purchased $6,763,232 $6,763,232
6,017,641 units sold $6,017,641 6,017,641 6,017,641 $ 0
2)SunTrust Corporate Equity Fund
19,442 units purchased 1,853,154 1,853,154
1,830 units sold 179,133 146,883 179,133 32,250
3)SunTrust Employee Benefit Stable
Asset Fund
37,456 units purchased 693,583 693,583
12,182 units sold 229,000 207,754 229,000 21,246
4)Independent Insurance Group, Inc.
Nonvoting Common Stock
21,574 shares purchased 362,898 362,898
44,260 shares sold 697,805 799,006 697,805
(101,201)
Report of Independent Certified Public Accountants
INVEST Plan Committee of the
Independent Life INVEST Plan
Jacksonville, Florida
We have audited the accompanying statements of net assets available for
benefits of the Independent Life INVEST Plan (the "Plan") as of December 31,
1993 and 1992, and the related statements of changes in net assets available
for benefits for the years then ended. Our responsibility is to express an
opinion of these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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, 1993 and 1992. and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements as a whole. The accompanying supplemental schedules of
assets held for investment as of December 31 1993 and transactions or series of
transactions in excess of 5 percent of the current value of plan assets for the
year then ended are presented for purposes of complying with the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 and are not a required part of the basic
financial statements. The supplemental schedules have been subjected to the
auditing procedures applied in our audit of the 1993 financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
1993 basic financial statements taken as a whole
ERNST & YOUNG
June 23, 1994
SIGNATURES
The Plan. 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.
INDEPENDENT LIFE INVEST PLAN
Date June 29, 1994 By: Wilford C. Lyon, Jr.
Wilford C. Lyon, Jr.
Chairman of the Board and
Chief Executive Officer
Independent Insurance Group, Inc.
Consent of Independent Certified Public Accountants
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-35785) pertaining to the Independent Life INVEST Plan and in
the related Prospectus of our report dated June 23, 1994, with respect to the
financial statements of the Independent Life INVEST Plan included in this
Annual Report (Form 11-K) for the year ended December 31, 1993
ERNST & YOUNG
Jacksonville, Florida
June 29, 1994
