<PAGE> 1
U. S. Securities and Exchange Commission
Washington, D. C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from..........to........
Commission File Number 1-8069
Investors Insurance Group, Inc.
(Exact name of small business issuer
as specified in its charter)
Florida 13-2574130
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No)
7200 W. Camino Real
Boca Raton, Florida 33433
(Address of principal executive office) (Zip Code)
(407) 391-5043
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [ ] No
[X]
As of May 7, 1997, 2,836,582 shares of the issuer's common stock were
outstanding.
<PAGE> 2
Investors Insurance Group, Inc
FORM 10-QSB
TABLE OF CONTENTS
Part I. FINANCIAL INFORMATION Page
Item 1: Consolidated Balance Sheets - March 31, 1997
and December 31, 1996 3
Item 1: Consolidated Statements of Operations - three months
ended March 31, 1997 and 1996 5
Item 1: Consolidated Statements of Cash Flows - three months
ended March 31, 1997 and 1996 6
Item 1: Notes to Consolidated Financial Statements 8
Item 2: Management's Discussion and Analysis 12
Part II. OTHER INFORMATION
Item 1: Legal Proceedings 15
Item 2: Changes in Securities 16
Item 3: Default Upon Senior Securities 16
Item 4: Submission of Matters to a Vote of Security Holders 16
Item 5: Other Information 16
Item 6: Exhibits and Reports on Form 8-K 16
SIGNATURES 17
<PAGE> 3
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
INVESTORS INSURANCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1997 AND DECEMBER 31, 1996
(Dollars in thousands)
ASSETS 1997 1996
-------- --------
(unaudited)
Investments:
Fixed maturities held to maturity, at
amortized cost (market $8,570 in 1997
and $8,731 in 1996) $ 8,199 $ 8,200
Securities available for sale:
Fixed maturities, at market (amortized
cost $56,689 in 1997 and $57,309 in 1996) 54,947 57,075
Equity securities, at market (cost $11 in
1996 and 1996) 22 22
Short-term investments 265 305
Mortgage loans on real estate 354 365
Policy loans 526 522
------- -------
Total 64,313 66,489
Cash and cash equivalents 6,498 6,801
Investment in common stock of affiliate,
at market (cost $992 in 1997 and 1996) 661 638
Accrued investment income 534 451
Deferred acquisition costs 44,813 46,760
Investment contract benefits recoverable 431,721 483,378
Reinsurance benefits recoverable 5,025 4,740
Reinsurance benefits receivable 1,287 -
Cost in excess of net assets of businesses
acquired (less accumulated amortization
of $1,366 in 1997 and $1,291 in 1996) 3,320 3,389
Income tax recoverable 48 765
Other assets 385 303
------- -------
Total Assets $ 558,605 $ 613,714
======= =======
See accompanying notes to consolidated financial statements
<PAGE> 4
INVESTORS INSURANCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
March 31, 1997 AND DECEMBER 31, 1996
(Dollars in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1996
-------- --------
(unaudited)
Liabilities:
Future policy benefits and claims:
Investment contracts $ 497,181 $ 547,184
Life insurance reserves 10,054 9,666
Accident & health claim reserves 30 29
Unearned ceding commission (including
deferred gross profits of $8,640 in
1997 and $9,154 in 1996) 47,566 50,210
Note payable 8,000 8,000
Amounts due to coinsurer 90 1,173
Accrued expenses 1,059 875
Other liabilities 1,812 2,411
------- -------
Total Liabilities 565,792 619,548
------- -------
Commitments & Contingencies
Shareholders' Equity:
Preferred Stock, no par,
authorized 20,000,000 shares, none issued - -
Common Stock, $.50 par value; authorized
30,000,000 shares; issued 2,840,482 in
1997 and 2,840,082 in 1996; outstanding
2,836,482 in 1997 and 2,836,082 in 1996 1,420 1,420
Additional paid-in capital 3,656 3,656
Net unrealized investment gains (losses) (2,126) (586)
Accumulated deficit (10,129) (10,316)
Treasury stock, at cost (4,000 shares in
1997 and 1996) (8) (8)
------- -------
(7,187) (5,834)
------- -------
Total Liabilities and Shareholders' Equity $ 558,605 $ 613,714
======= =======
See accompanying notes to consolidated financial statements
<PAGE> 5
INVESTORS INSURANCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
FOR THE THREE MONTHS ENDED March 31, 1997 AND 1996
(Dollars in thousands, except per share data)
1997 1996
-------- --------
Revenue:
Net investment income $ 1,230 $ 2,221
Realized investment gains (losses) (2) 3,879
Premium and policy fees 380 345
Commission and other income 1,076 264
------- -------
Total revenue 2,684 6,709
------- -------
Benefits and Expenses:
Current and future insurance benefits 213 248
Interest on investment contracts 831 1,800
Underwriting, acquisition and insurance expenses 1,257 3,512
Other expenses 230 231
------- -------
Total benefits and expenses 2,531 5,791
------- -------
Income before income tax expense (benefit) 153 918
Income tax expense (benefit) (33) 5
------- -------
Net income $ 186 $ 913
======= =======
Net Income per share of common stock $ 0.07 $ 0.32
======= =======
Weighted average number of shares outstanding 2,836,282 2,818,935
========= =========
See accompanying notes to consolidated financial statements
<PAGE> 6
INVESTORS INSURANCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
FOR THE NINE MONTHS ENDED March 31, 1997 AND 1996
(Dollars in thousands)
1997 1996
-------- --------
Cash flows from operating activities:
Net income $ 186 $ 913
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Net accretion of fixed maturities (64) (91)
Realized investment loss (gains) 2 (3,879)
Amortization of costs in excess of net assets
of businesses acquired 70 83
Amortization of deferred acquisition costs 599 2,505
Amortization of unearned ceding commissions (1,111) (105)
Deferral of unearned ceding commission 751 6,289
Deferral of acquisition costs (992) (1,749)
Change in assets and liabilities:
Increase in investment contract
benefits recoverable 42,334 (88,626)
Increase in insurance reserves and
interest on investment contracts (41,365) 7,835
Increase in other assets, net 264 63
Decrease in other liabilities, net (2,781) (2,520)
------- -------
Net cash used in
operating activities (2,107) (79,282)
------- -------
Cash flows from investing activities:
Investment repayments:
Mortgage loans 11 19
Policy loans, net (4) 5
Investments sold:
Fixed maturities, available for sale 2,017 86,544
Investments in:
Fixed maturities, available for sale (1,333) (6,243)
Short-term investments, net 40 36
------- -------
Net cash provided by investing activities 731 80,361
------- -------
See accompanying notes to consolidated financial statements
<PAGE> 7
INVESTORS INSURANCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (continued)
FOR THE NINE MONTHS ENDED September 30, 1996 AND 1995
(Dollars in thousands)
1996 1995
-------- --------
Cash flows from financing activities:
Investment contract deposits $ 10,788 $ 17,735
Investment contract withdrawals (19,038) (15,247)
Reinsurance contract deposits (7,036) (17,463)
Withdrawals recovered from reinsurance 16,359 11,139
------- -------
Net cash provided by (used in)
financing activities 1,073 (3,836)
------- -------
Net increase (decrease) in cash
and cash equivalents (303) (2,757)
Cash and cash equivalents, beginning of year 6,801 11,372
------- -------
Cash and cash equivalents, end of year $ 6,498 $ 8,615
======= =======
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest - -
Income taxes $ (750) -
see accompanying notes to consolidated financial statements
<PAGE> 8
INVESTORS INSURANCE GROUP, INC. AND SUBSIDIARIES
Notes to consolidated Financial Statements (unaudited)
1. Management Representation
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments (consisting only of normal recurring items) necessary
to present fairly the consolidated financial position of Investors Insurance
Group, Inc. ("Company") and its subsidiaries, primarily Investors Insurance
Corporation ("Investors") and Investors Marketing Group, Inc. ("IMG"), as of
March 31, 1997, and the results of operations for the three month period
ended March 31, 1997 and 1996, and the cash flows for the three month period
ended March 31, 1997 and 1996.
2. Reporting Standards
The Company files its financial statements in compliance with Regulation S-B
of the Securities and Exchange Commission.
3. Regulatory Issues
The Arizona Department of Insurance ("Arizona") has raised questions about
Investors' continuing ability to write new business at, or above, its 1996
level. Through March 31, 1997, 41% of Investors' new business was written in
Arizona. Investors has been in a continuing dialogue with Arizona. No
assurance can be given that Arizona will permit Investors to continue to
write new business in Arizona under its current arrangement.
4. Reinsurance
Under the provisions of the reinsurance agreement with New Era Life Insurance
Company ("NEL"), NEL began to assume sole liability for the policies that
were ceded to it earlier. As sole liability is assumed by NEL, the Company
removes its liability for Investment contracts, its related assets
(Investment contract benefits recoverable and Deferred acquisition costs) and
its Unearned ceding commissions from its balance sheet and recognizes the
related profit portion of the Unearned ceding commission as Commission income
and other income. During the three months ended March 31, 1997, NEL assumed
sole liability for investment contract liabilities of $48,983,003. This
assumption reduced both the Company's liability for Investment contracts and
its receivable for Reinsurance benefits recoverable by $48,983,003. Further,
it reduced its Deferred acquisition costs and Unearned ceding commissions by
$1,766,767 and $2,167,060 respectively and recognized Commission and other
income of $400,293. If this transaction had not occurred this quarter, the
Company would have reported a loss of $214,000 or $0.7 per share.
The NEL agreement significantly reduced Investors ratio of statutory
liabilities to statutory capital and surplus. In recognition of its'
improved statutory financial position, effective January 1, 1997, Investors
reduced its ceding rate under its quota share agreement from 100% to 60%.
<PAGE> 9
5. Stock Options
The Agent's Stock Option Plan was not renewed by the Board in 1997 and no new
options have been granted. If unexercised, the outstanding options expire
two years after issue. During the three month period ended March 31, 1997,
34,700 share options expired.
In 1989, IIG issued warrants to purchase 1,000,000 shares of its common stock
at $2.00 per share. These warrants have not been exercised and expired under
their terms on March 31, 1997.
6. Note Payable
In connection with its acquisition of IIC Inc. ("IIC"), which owns all the
outstanding shares of Investors, IIG issued an $8,000,000 secured
subordinated note payable which was due March 31, 1997, with interest at 8%
payable quarterly (IIG Note).
As a result of material misrepresentations by the seller, Corporate Life
Insurance Company ("Corporate Life"), IIG has several significant claims
which, if sustained, should reduce the principal amount of the IIG Note and
result in a refund of previously paid interest. However, these issues have
not been settled since, until recently, ownership of the IIG Note has been in
dispute. The ultimate settlement of the claims against the IIG Note will not
result in any additional liability for IIG and IIG has continued to recognize
interest expense through March 31, 1997 based on the terms of the IIG Note.
However, in recognition of its claims against the IIG Note, IIG has withheld
payment of interest since 1995. Payment of the IIG Note principal was due on
March 31, 1997 and is currently in default.
In April 1997, the liquidator for Corporate Life agreed to assign its
interest in the IIG Note to the estate of National Heritage Life Insurance
Company ("National Heritage"). Since the IIG Note was due March 31, 1997,
the estate of National Heritage has threatened foreclosure. However, IIG
management believes it has valid defenses and counterclaims to block any
foreclosure attempt. The ultimate outcome of this case cannot be determined
at this time.
7. Condensed Financial Information of the Parent Company
The Parent company's principal source of funds is the override commission it
receives from Investors' new business. Through March 31, 1997, Investors'
new annuity business has declined to $11 million from $18 million for the
comparable period in 1996. This change is primarily the result of Investors
agreement not to write new business in California. At the present time,
aside from the IIG Note (which was due March 31, 1997) and potential related
interest, the Parent company has sufficient funds to pay its debts as they
become due. However, at the expected level of cash expenditures, there can
be no assurance the Parent company will continue to maintain this liquidity
without additional capital. The Parent company's current financial results
are summarized below:
<PAGE> 10
CONDENSED BALANCE SHEETS PARENT COMPANY
As of March 31, 1997
(in thousands)
ASSETS
Cash and cash equivalents $ 37
Equity securities, at market 22
Investments in affiliate and wholly-owned subsidiary 1,861
Other assets 13
------
Total assets $1,933
======
LIABILITIES AND SHAREHOLDERS' EQUITY (CAPITAL DEFICIT)
Liabilities:
Note payable $ 8,000
Accrued interest on note payable 960
Due to affiliates 30
Other liabilities 130
------
Total liabilities 9,120
------
Shareholders' Equity (Capital Deficit):
Common stock 1,420
Additional paid-in capital 3,656
Net unrealized investment gains (losses) (2,126)
Accumulated deficit (10,129)
Treasury stock (8)
------
Total Shareholders' Equity (Capital Deficit) (7,187)
------
Total Liabilities and Shareholders' Equity (Capital Deficit) $ 1,933
======
<PAGE> 11
CONDENSED STATEMENTS OF OPERATIONS
PARENT COMPANY
For the year to Date Period Ending March 31, 1997
(in thousands)
Revenue $ 106
------
Expenses:
General and administrative expenses 151
Interest expense 160
------
Total expenses 311
------
Loss before equity in net income
of subsidiaries and income taxes (205)
Equity in net income of subsidiaries 391
------
Loss before income taxes 186
Income tax expense -
------
Net Income $ 186
======
CONDENSED STATEMENTS OF CASH FLOWS
PARENT COMPANY
For the year to Date Period Ending March 31, 1997
(in thousands)
Cash flows from operating activities:
Net income $ 186
Adjustments to reconcile net income to net
cash used in operating activities:
Equity in net income of subsidiaries (391)
Change in accrued interest 160
Change in other assets and
other liabilities, net (10)
-------
Net cash used in operating activities (35)
Cash and cash equivalents, beginning of year 72
-------
Cash and cash equivalents as of March 31, 1997 $ 37
=======
<PAGE> 12
Item 2: Management Discussion and Analysis
General
The following discussion and analysis for Investors Insurance Group, Inc.
("Company") and its wholly-owned subsidiaries, primarily Investors Insurance
Corporation ("Investors"), updates the discussion and analysis contained in
the Company's Annual Report on Form 10-K for the year ended December 31, 1996
and should be read in conjunction with that report and the Notes to the March
31, 1997 financial statements presented under Item 1.
Results of Operations
As described in the Company's prior financial statements, Investors closed a
large reinsurance agreement with New Era Life Insurance Company ("NEL") in
1996. This transaction substantially accounts for the changes in the
composition of the Company's Consolidated Statements of Operations.
Specifically, the 1996 Realized investment gains (losses) is substantially
due to the disposal of the investments supporting the ceded policies.
Realization of investment gains and losses changes the pattern of expected
future profits which forms the basis for the amortization of deferred
acquisition costs. As a result of this 1996 gain, the amortization of
deferred acquisition costs increased by approximately $2,254,000 and this
increase substantially accounts for the change in Underwriting, acquisition
and insurance expenses between 1997 and 1996. Since the assets related to
the reinsurance agreement were transferred to NEL on March 1, 1996, both the
related income (Net investment income) and expense (Interest on investment
contracts) have declined from the levels reflected in 1996.
In 1997, NEL began to assume sole liability for the policies that were ceded
to it in 1996. As sole liability is assumed by NEL, the Company removes its
liability for Investment contracts, its related assets (Investment contract
benefits recoverable and Deferred acquisition costs) and Unearned ceding
commissions from its balance sheet and recognizes the related profit portion
of the Unearned ceding commission as Commission income and other income.
During the three months ended March 31, 1997, NEL assumed sole liability for
investment contract liabilities of $48,983,003. This assumption reduced both
the Company's liability for Investment contracts and its receivable for
Reinsurance benefits recoverable by $48,983,003. Further, it reduced its
Deferred acquisition costs and Unearned ceding commissions by $1,766,767 and
$2,167,060 respectively and recognized Commission and other income of
$400,293. If this transaction had not occurred this quarter, the Company
would have reported a loss of $214,000 or $0.7 per share.
The NEL agreement significantly reduced Investors ratio of statutory
liabilities to statutory capital and surplus. In recognition of its'
improved statutory financial position, effective January 1, 1997, Investors
reduced its ceding rate under its quota share agreement from 100% to 60%.
In addition to the reinsurance transaction, the value of the Company's
investments changed significantly due to changes in the market interest
rates. The excess of cost over the carrying value of investments carried at
market increased from $577,000 at December 31, 1996 to $2,061,000 at March
31, 1997.
<PAGE> 13
This change caused increases in Deferred acquisitions costs and Unearned
ceding commissions of $935,000 and $992,000, respectively, and a decrease of
$1,540,000 in the Net unrealized investment gains and (losses) component of
the capital deficit.
As more fully described in the Company's 1996 Form 10KSB, the calculation of
income tax expense results in a deferred tax asset that is fully reserved.
As a result, the income tax expense reflected in the Company's financial
statements is its estimate of the amount it expects to pay or recover for the
current period.
Liquidity and Capital Resources
In connection with its acquisition of IIC Inc. ("IIC"), which owns all the
outstanding shares of Investors, IIG issued an $8,000,000 secured
subordinated note payable which was due March 31, 1997, with interest at 8%
payable quarterly (IIG Note).
As a result of material misrepresentations by the seller, Corporate Life
Insurance Company ("Corporate Life"), IIG has several significant claims
which, if sustained, should reduce the principal amount of the IIG Note and
result in a refund of previously paid interest. However, these issues have
not been settled since, until recently, ownership of the IIG Note has been in
dispute. The ultimate settlement of the claims against the IIG Note will not
result in any additional liability for IIG and IIG has continued to recognize
interest expense through March 31, 1997 based on the terms of the IIG Note.
However, in recognition of its claims against the IIG Note, IIG has withheld
payment of interest since 1995. Payment of the IIG Note principle was due on
March 31, 1997 and is currently in default.
In April 1997, the liquidator for Corporate Life agreed to assign its
interest in the IIG Note to the estate of National Heritage Life Insurance
Company ("National Heritage"). Since the IIG Note was due March 31, 1997,
the estate of National Heritage has threatened foreclosure. However, IIG
management believes it has valid defenses and counterclaims to block any
foreclosure attempt. The ultimate outcome of this case cannot be determined
at this time.
The Parent company's principal source of funds is the override commission it
receives from Investors' new business. Through March 31, 1997, Investors'
new annuity business has declined to $11 million from $18 million for the
comparable period in 1996. This change is primarily the result of Investors'
agreement not to write new business in California. Further, since new
business in California is handled through IMG, the Parent company no longer
receive any funds from these sales. Together, these changes have intensified
the Parent company's liquidity problem. At the present time, aside from the
IIG Note and potential related interest discussed above, the Parent company
has sufficient funds to pay its debts as they become due. However, at the
expected level of cash expenditures, there can be no assurance the Parent
company will continue to maintain this liquidity.
While there can be no assurance that it will be successful, the Company is
continuing its search for additional capital.
<PAGE> 14
Caution on Forward-Looking Statements
The 1995 Private Securities Litigation Reform Act provides issuers the
opportunity to make cautionary statements regarding forward-looking
statements. Accordingly, any forward-looking statement contained herein or
in any other oral or written statement by the Company or any of its officers,
director or employees is qualified by the fact that actual results of the
Company may differ materially from such statement due to the following
important factors, among other risks and uncertainties inherent in the
Company's business:
1. Prevailing interest rate levels, including any continuation of the
current relatively flat yield curve for short-term investments,
which may affect the ability of the Company to sell its products,
the market value of the Company's investments or the lapse rate of
the Company's policies, notwithstanding product design features
intentioned to enhance persistency of the Company's products.
2. Changes in the federal income tax laws and regulations which may
affect the relative tax advantage of the Company's products.
3. Changes in the regulation of financial services, including bank
sales of insurance products, which may affect the competitive
environment for the Company's products.
4. Regulatory requirements from any of the states in which
Investors is authorized to sell insurance.
5. The Parent Company's access to sufficient funds to pay its
obligations as they become due.
<PAGE> 15
PART II: OTHER INFORMATION
Item 1: Legal Proceedings
The dispute between the Pennsylvania Department of Insurance
("Pennsylvania"), as statutory liquidator of Corporate Life Insurance
Company, and the Delaware Department of Insurance ("Delaware"), as
rehabilitator and liquidator of National Heritage Life Insurance Company as
to the ownership of the Secured Subordinated Debenture ("IIG Note") issued in
1989 by Gemco National, Inc. to Corporate Life Insurance Company in
connection with the purchase by Gemco of all of the outstanding Shares of
stock of IIC, Inc., Investors Insurance Corporation and Westchester
Reinsurance, Ltd. appears to have been settled. To avoid being subject to
double liability, the Company had filed a Complaint in Equity for
Interpleader with the Pennsylvania Commonwealth Court captioned Investors
Insurance Group, Inc. v. Insurance Commissioner of Pennsylvania Department of
Insurance and Insurance Commissioner of Delaware Department of Insurance,
(518 MD 1995, PA Cmwlth Ct. 1995). On May 7, 1997, the Interpleader action
was dismissed without prejudice. As a result of the apparent settlement
between Delaware and Pennsylvania, Judge Pellegrino of the Pennsylvania
Commonwealth Court claimed lack of jurisdiction and neither granted nor
denied the Company's injunction request.
In connection with the above action, on March 14, 1996 the Delaware filed a
Petition for Declaratory Judgment, Specific Performance and Injunctive Relief
against Investors Insurance Group, Inc. in the case entitled, In The Matter
of the Liquidation of National Heritage Life Insurance Company, (CA. No.
13530. DE Ct, Chancery 1996). Delaware has requested the Court to enter a
declaratory Judgment that it is the owner of the IIG Note and as such, is
entitled to receipt of interest payments being held in escrow, and is
entitled to have the IIG Note registered in its name. The action also
requests the Court to declare that the Company does not have any claims to
offset the principal amount of the IIG Note and further seeks indemnification
from the Company. While the Petition is still pending, no date has been set
for a hearing and there has been no activity on this matter since July 1996.
On or about September 20,1996, the State of Delaware Department of Insurance
gave notice to Company of its default under the IIG Note and threatened to
foreclose on the stock of Investors Insurance Corporation. Following the
apparent settlement of the IIG Note ownership issue, Delaware, as
rehabilitator and liquidator of National Heritage Life Insurance Company, has
attempted to assert the rights of ownership over IIC, Inc. via the Pledge
Agreement issued as part of the original purchase of IIC, Inc. IIG has
blocked all of these ownership attempts. On May 12, 1997, Delaware filed for
an injunction with the Delaware Court of Chancery to have its representative
recognized as the sole director of IIC, Inc. At a hearing on May 13, 1997 on
Delaware's injunction request, Chancellor Allen refused to grant Delaware's
request, but did order that Delaware would have authorization to review the
books and records of the insurance company, would be apprised of all
prospective purchasers and would be given five days notice of any sale. The
Company believes it has valid defenses which it will continue to assert
against any attempt by Delaware to obtain ownership of IIC, Inc and its
subsidiaries.
<PAGE> 16
Item 2: Changes in Securities
No changes to report
Item 3: Defaults on Senior Securities
See discussion under Item 1 above
Item 4: Submissions of Matters to a Vote of Security Holders
None
Item 5: Other Information
None
Item 6: Exhibits and Reports on Form 8-K
a). Exhibits
Addendum No. 11, effective January 1, 1997 to Reinsurance
Agreement INVE0001 between Registrant's subsidiary,
Investors Insurance Corporation and Republic Vanguard Life
Insurance Company.
Addendum No. 1, to the Third Party Administration Agreement
between Registrant's subsidiary, Investors Marketing Group,
Inc. and Republic Vanguard Life Insurance Company.
b). Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter
ended March 31, 1997.
<PAGE> 17
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Investors Insurance Group,
Inc.
(Registrant)
Date: May 15, 1997 /s/ Melvin C. Parker
______________________________
Melvin C. Parker
President, Chief Executive
Officer and Chief Financial
Officer
<PAGE> 1
ADDENDUM NO. 11
to
REINSURANCE AGREEMENT INVE0001
between
INVESTORS INSURANCE CORPORATION OF DELAWARE
with Administrative Offices in Jacksonville, Florida
and
REPUBLIC-VANGUARD LIFE INSURANCE COMPANY
of Dallas, Texas
Effective January 1, 1997, Schedule II of the Agreement shall be replaced by
the attached Schedule II, which is amended to change Republic-Vanguard Life
Insurance Company's coinsurance quota share.
IN WITNESS WHEREOF, the parties have executed this is Addendum in duplicate
on the dates and places set forth below:
INVESTORS INSURANCE CORPORATION
Jacksonville, Florida
1/23/97
/s/ Susan F. Powell
Executive Vice President
Rae Walker, witness
REPUBLIC-VANGUARD LIFE INSURANCE COMPANY
Dallas Texas
2/20/97
/s/ John Brill
Senior Vice President
Rosetta Kroul, witness
<PAGE> 2
SCHEDULE II
A. COINSURANCE PERCENTAGES
Calendar Period of Issue Jurisdiction Quota Share Reinsured
- ------------------------------------- -------------- ---------------------
January 1, 1991 - September 30, 1994 Missouri 80%
October 1, 1991 - September 30, 1994 Other, 80%
except Kansas
October 1, 1994 -April 30, 1995 All States, 90%
except Kansas
May 1, 1995 -December 31, 1996 All States, 100%
except Kansas
January 1, 1997 and later All States, except 60%
California and Kansas
B. ASSUMPTION OF DIRECT POLICIES
Assumption by
Calendar Period of Issue Jurisdiction Republic-Vanguard Life
- ------------------------ ------------- ----------------------
1990 - 1994; 13 Policies Kansas 100% Effective March 27,
1995
<PAGE> 1
ADDENDUM
For the duration of this Agreement and for five (5) years after the
termination of this Agreement, IMG shall maintain at its principal
Administrative Office books and records of all transactions between IMG and
RVL.
IN WITNESS WHEREOF, the parties have had their respective officers execute
this Addendum in duplicate below.
Investors Marketing Group, Inc.
Jacksonville, Florida
3/1/97
/s/ Susan F. Powell
Executive Vice President
Karen O. Smith, witness
Republic-Vanguard Life Insurance Company
Dallas, Texas
3-17-97
/s/ John Brill
Senior Vice President
Rosetta Kroul, witness
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 7
<PAGE>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<DEBT-HELD-FOR-SALE> 54,947
<DEBT-CARRYING-VALUE> 8,199
<DEBT-MARKET-VALUE> 8,570
<EQUITIES> 22
<MORTGAGE> 354
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0
0
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380
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</TABLE>
