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
January 18, 1995
Date of Report (Date of earliest event reported)
Southwestern Life Corporation
(Exact name of Registrant as specified in its charter)
Delaware 1-7697 43-6069928
(State or other jurisdiction (Commission (IRS employer
of incorporation file no.) identification no.)
500 North Akard Street, Dallas, Texas 75201
(Address of principal executive offices, including zip code)
(214) 954-7111
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
This filing contains 9 pages.
Index to Exhibits appears on page 4.
Page 1 of 9 Pages<PAGE>
Item 5. Other Events.
On January 18, 1995, Glenn H. Gettier, Jr. was appointed as
the Registrant's Chairman of the Board and Chief Executive
Officer and as a member of the Registrant's Board of Directors.
James R. Kerber will continue to serve the Registrant as its
President and as a director and was also appointed by the Board
on January 18, 1995 as the Chief Operating Officer of the Company
and as the Vice Chairman of the Registrant's Board of Directors.
A copy of the press release dated January 18, 1995 announcing the
change of the Registrant's management is attached as Exhibit 1 of
this Current Report on Form 8-K and is incorporated herein by
reference in its entirety.
On January 27, 1995, the Registrant's Board of Directors
announced a series of actions taken by the Registrant's
management regarding the Registrant and various other matters
relating to the Registrant and its subsidiaries. This
announcement is more fully described in the Registrant's press
release dated January 27, 1995 attached as Exhibit 2 of this
Current Report on Form 8-K, which press release is incorporated
herein by reference in its entirety.
Item 7. Financial Statements, Pro Forma Financial Information,
and Exhibits.
(a) None
(b) None
(c) Exhibits.
Exhibit No. Description
----------- -----------
1 Press Release of Registrant dated
January 18, 1995
2 Press Release of Registrant dated
January 27, 1995
Page 2 of 9 Pages<PAGE>
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.
Southwestern Life Corporation
By: /s/Glenn H. Gettier, Jr.
-------------------------
Glenn H. Gettier, Jr.
Chief Executive Officer and
Chairman of the Board
Date: January 27, 1995
Page 3 of 9 Pages<PAGE>
INDEX TO EXHIBITS
Sequential
Exhibit No. Document Description Page No.
----------- -------------------- ----------
1 Press Release of Southwestern Life 5
Corporation dated January 18, 1995
2 Press Release of Southwestern Life 6
Corporation dated January 27, 1995
Page 4 of 9 Pages<PAGE>
EXHIBIT 1
DATE: January 18, 1995
FOR FURTHER INFORMATION CONTACT:
Michael E. Conley (214) 954-7414
FOR IMMEDIATE RELEASE
Southwestern Life Corp. Appoints New Chairman
DALLAS--January 18, 1995-- Southwestern Life Corporation
(ASE: SLC) today announced that Glenn H. Gettier, Jr., 52, has
been elected chairman of the board and chief executive officer of
the Company. He previously served as executive vice president,
chief financial officer and director of USLICO Corporation and
United Services Life Insurance Company. The Company said that
Gettier's initial efforts will be to focus on SLC's capital
structure and strategic options.
The Company also announced that President James R. Kerber
has been named to the additional posts of vice chairman and chief
operating officer. Kerber, 62, joined the Company in 1994 and has
also been serving as interim chief executive officer. He will
continue to serve as president and chief executive officer of
SLC's insurance subsidiaries, which include Southwestern Life
Insurance Company and Union Bankers Insurance Company, and focus
on their operations.
Prior to USLICO, Gettier served for six years as executive
vice president and chief financial officer of The Equitable Life
Assurance Society of the United States. He also was associated
with KPMG Peat Marwick for 18 years and served as a partner in
the firm's insurance industry practice.
With the addition of Gettier, the Company's board increases
to nine members.
Southwestern Life Corporation is an insurance holding
company whose insurance subsidiaries market life insurance,
individual and group health insurance, annuities and fee-based
administrative services. The Company's principal operating
companies are Southwestern Life, Union Bankers Insurance and
Marquette National Life in Dallas; Constitution Life, Bankers
Multiple Line and Integrity National Life in Louisville, Ky.;
Philadelphia American Life in Houston; and Bankers Life Insurance
Company of New York in Woodbury.
Page 5 of 9 Pages<PAGE>
EXHIBIT 2
DATE: January 27, 1995
FOR FURTHER INFORMATION CONTACT:
Michael E. Conley (214) 954-7414
FOR IMMEDIATE RELEASE
Southwestern Life Corp. Announces Program to Strengthen Holding
Company Financial Structure; Suspends Preferred Dividend; Expects
to Recognize CMO Losses
Announces Letter of Intent to Sell Bankers Life Insurance Co. of
New York
for Approximately $35 Million
Sets Strategic Business Objectives for 1995 of Increasing Value
of Insurance Companies, Focusing on Existing Core Businesses,
and Exploring Sale of Non-Strategic Assets
Page 6 of 9 Pages<PAGE>
DALLAS--Jan. 27, 1995 -- Southwestern Life Corporation
("SLC" or the "Company") (ASE: SLC) today announced that its
Board of Directors has authorized a series of initial actions by
the Company's new senior management as part of a longer-ranging
process designed to strengthen the holding company's capital
structure and preserve its financial flexibility. In announcing
these actions, SLC noted that its insurance operating
subsidiaries remain financially sound and well-capitalized.
The initiatives include:
- Suspension of the payment of dividends on the Company's
cumulative $1.75 Convertible Exchangeable Preferred Stock,
Series 1986-A, until reinstated by the Board of Directors.
- Board authorization to develop a plan to reduce the holding
company's debt and fixed charges, increase its common equity
and extend the ultimate maturity of any remaining debt. In
this regard, the Company has engaged Donaldson, Lufkin &
Jenrette as a financial advisor. Development of the plan is
subject, among other things, to completion of the Company's
year-end audited financial statements and an independent
evaluation of the Company's assets, both of which are
currently under way. Meanwhile, the Company is confident
that it has sufficient resources to meet its debt service
requirements through September 30, 1995.
- Initiation of a review of certain of the Company's
accounting policies in connection with the preparation of
the Company's audited financial statements for 1994.
Policies under review include the accounting treatment for
the present value of future profits and excess cost arising
from prior acquisitions, deferred policy acquisition costs
and other intangible assets or deferred charges. Changes in
certain of these policies could result in material non-cash
write-offs for the Company's fourth quarter of 1994.
The Company also announced that, for the fourth quarter
ended December 31, 1994, it expects to record approximately $40
million (pre-tax) of realized losses related to a portion of the
holding Company's collateralized mortgage obligation (CMO)
portfolio. These losses relate to the residual interest in Fund
America II, a trust that holds various mortgage-backed
securities. Most of this amount was previously reported as an
unrealized loss as of September 30, 1994. The recognition of
such losses, which only affect the GAAP financial statements, has
no effect upon either SLC's operating cashflows or the statutory
financial position and the results from operations of its
insurance subsidiaries.
Over the past year, the Company reviewed various potential
Page 7 of 9 Pages<PAGE>
alternatives for addressing SLC's debt requirements, including
the significant payments due in 1995 and 1996. At the present
time, none of these alternatives are satisfactory for meeting the
Company's needs, and it is necessary to develop a new plan to
change the Company's capital structure.
Glenn H. Gettier, who joined the Company as chairman and
chief executive officer on January 18, said: "The initial actions
announced today reflect management's commitment to achieve an
appropriate financial structure at the holding company level for
the long term and to ensure the continued financial soundness of
our insurance operating subsidiaries. These units are strongly
capitalized and are well-positioned to continue to meet the needs
of policyholders, as they have been doing for decades."
Mr. Gettier emphasized: "Southwestern Life Corporation's
insurance subsidiaries are continuing to fully meet their
obligations and we are in regular contact with the appropriate
insurance regulatory authorities to ensure that they are aware of
all aspects of the process we are undertaking at the holding
company level. We are committed to this communication and
oversight process with the regulators as we modify the holding
company's capital structure. The insurance subsidiaries have
more than $260 million of consolidated, adjusted statutory
capital and surplus backing their insurance reserves, are very
liquid, and maintain quality investments."
Consistent with its objectives, the Company also announced
today that it has entered into a letter of intent to sell Bankers
Life Insurance Co. of New York, an indirect subsidiary, to a
financially-able purchaser for approximately $35 million in cash,
subject to certain closing adjustments. The transaction, which
could close by the end of the second quarter of 1995, is subject
to the negotiation of a definitive agreement, completion of due
diligence and receipt of all necessary regulatory approvals. As
of September 30, 1994, Bankers had assets of $209 million and
capital and surplus of $23.4 million.
Mr. Gettier said: "During the remainder of 1995, the
Company's business strategy will emphasize three objectives.
First, increasing the value of the insurance companies by
continuing to provide quality service to policyholders while
improving operating earnings through expense reductions,
maintaining sales momentum and achieving improved gross margins.
Second, focusing the Company's efforts on existing core
businesses, taking steps where possible to more efficiently
deploy capital resources. And third, continuing to explore the
sale of non-strategic subsidiaries and assets to improve the
Company's financial flexibility."
Southwestern Life Corporation is an insurance holding
company whose insurance subsidiaries market life insurance,
Page 8 of 9 Pages<PAGE>
individual and group health insurance, annuities and fee-based
administrative services. The Company's principal operating
companies are Southwestern Life, Union Bankers Insurance and
Marquette National Life in Dallas; Constitution Life, Bankers
Multiple Line and Integrity National Life in Louisville, KY.;
Philadelphia American Life in Houston, and Bankers Life Insurance
Company of New York in Woodbury, N.Y.
Page 9 of 9 Pages
