UNITED STATES
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: September 30, 1999
(Date of earliest event reported)
NATIONAL WESTERN LIFE INSURANCE COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Colorado
(State or Other Jurisdiction of Incorporation)
2-17039 84-0467208
(Commission File Number) (I.R.S. Employer Identification Number)
850 East Anderson Lane, Austin, Texas 78752-1602
(Address of Principal Executive Offices and Zip Code)
(512) 836-1010
(Registrant's Telephone Number, Including Area Code)
Item 5. Other Events.
On September 30, 1999, Registrant, National Annuity Programs, Inc.
(NAP), Robert L. Myer (Myer), and certain affiliates of Myer executed
a Definitive Compromise Settlement Agreement (Agreement) of the
declaratory judgment lawsuit pending between them in the District Court
of Travis County, Texas. The declaratory judgment action was filed by
Registrant and sought court construction of a general agent manager
contract and amendments thereto (Contract) between Registrant and NAP
entered into in 1983 and amended thereafter, a declaration that the
contract was enforceable, but had been breached by NAP, and for
damages from NAP. Registrant alleged tortious interference by Myer
with the Contract, conspiracy and damages. NAP and Myer had counter-claimed
for declaratory judgment, breach of contract, indemnity, fraud,
statutory violations, damages and attorneys' fees from Registrant. See
Registrant's Form 10-K, Annual Report, as of December 31, 1998, Other
Pending Litigation, which is incorporated herein.
By the settlement each party will dismiss with prejudice all claims
asserted by them in the pending lawsuit. NAP and Myer release
Registrant from any claim for any funds and other rights arising under
the Contract and from all negligence and other claims arising prior to
the Agreement. Registrant releases NAP, Myer and Myer affiliates from
all negligence and other claims, excluding any claims arising under the
reinsurance contract between Registrant and NAP Life Insurance Company,
a Myer affiliate. Registrant will acquire NAP, and Myer will indemnify
and hold Registrant harmless from all claims of any nature asserted
against NAP based on its acts or omissions prior to the Agreement,
except for claims by policyholders and agents relating to the sale of
Registrant's products. Registrant will indemnify Myer for NAP acts or
omissions occurring after September 30, 1999. Registrant will pay or
cause to be paid or released all valid claims for unpaid commissions to
sub-agents of NAP who wrote business for Registrant under the Contract.
Registrant had accrued agent commission liabilities totaling $9,642,000
related to the Contract. As a result of the Agreement, it is expected
that approximately $1,160,000 thereof could be paid as commissions due
to NAP sub-agents. The remaining $8,482,000 is no longer a liability
of the Registrant and will not be paid pursuant to the Contract.
Accordingly, these remaining accrued commissions will be released from
liabilities in the Registrant's third quarter 1999 financial statements
resulting in additional income of $8,482,000, before taxes. It is
anticipated that any future renewal premiums received by Registrant on
currently issued and in force annuity policies written by NAP sub-agents
under the Contract could generate additional commissions for
such sub-agents. The payment of such future commissions is subject to
and conditioned upon receipt of such renewal premiums by Registrant and
compliance by the sub-agents with the terms of the agents' contracts
with Registrant and NAP.
By separate Commutation Agreement dated September 30, 1999, Registrant
and NAP Life Insurance Company ("NAP Life"), an affiliate of Robert L.
Myer, canceled and terminated the Specific Benefit Reinsurance
Agreement between them dated March 1, 1988 whereby Registrant had ceded
fifty percent (50%) of the premiums, reserves and liabilities on a
portion of its policies of insurance. The effect of the Commutation
Agreement will not have a significant impact on the financial
statements of the Registrant.
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.
National Western Life Insurance Company
(Registrant)
Date: October 7, 1999 /S/ Ross R. Moody
By: Ross R. Moody
President and
Chief Operating Officer
