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 (Date of earliest event reported):
January 26, 2000
ACCEPTANCE INSURANCE COMPANIES INC.
(Exact name of registrant as specified in its charter)
Delaware 1-7461 31-0742926
(State of Incorporation) (Commission File Number)(IRS Employer Identification
Number)
222 S. 15th Street, Suite 600 North
Omaha, Nebraska 68102
(Address of principal executive offices) (Zip Code)
(402) 344-8800
(Registrant's telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events.
(a) The registrant issued the following press release on
January 26, 2000:
ACCEPTANCE INSURANCE COMPANIES INC. AND CLARENDON
INSURANCE GROUP ANNOUNCE NEW PARTNERSHIP AND SALE OF
REDLAND INSURANCE COMPANY
(Omaha, NE and New York, NY, January 26, 2000) Acceptance Insurance
Companies Inc. (NYSE:AIF) and Clarendon Insurance Group announced today that
they have reached an agreement in principle for Clarendon to acquire Redland
Insurance Company from Acceptance. The transaction includes the appointment of
Acceptance as the exclusive representative of Redland for the lines of business
Acceptance currently writes through Redland. Acceptance also will reinsure
certain portions of the business written by Redland in the future, and
Acceptance and Clarendon jointly will develop additional specialty program
business.
The sale of Redland will be a cash transaction based upon the
statutory book value of Redland after the divestiture of Redland assets
associated with Acceptance's crop insurance operations, and is expected to be
completed during the second quarter of this year. Acceptance will retain an
option to repurchase Redland under certain circumstances. Upon closing,
Redland is expected to cede most of its business to Clarendon National
Insurance Company which maintains the rating of A (Excellent) from A.M.
Best Company.
"We are excited about the benefits and opportunities that this
transaction provides for the agents and customers of Acceptance, and for both
our company and Clarendon," said John E. Martin, president and chief executive
officer of Acceptance. "This transaction will combine the financial strength
of the Clarendon Group with the expertise of our underwriting and claims
personnel, allowing our agents not only to maintain, but grow the profitable
business they have developed with Redland. Our agreement with Clarendon
continues the process of focusing our property and casualty operations on our
core lines of profitable specialty business."
Ralph Milo, chairman and chief executive officer of the Clarendon
Group said, "This transaction is a win/win situation for both companies. The
new partnership will create a unique combination of marketing, underwriting,
administration, and financial resources to develop specialty program business.
We are looking forward to working with Acceptance to develop the full potential
of Redland Insurance Company."
E.W. Blanch Capital Markets acted as a financial advisor to
Acceptance in this transaction.
Clarendon Insurance Group, a subsidiary of Hannover Reinsurance, the
world's fifth largest reinsurer, is a nationally recognized leader in program
business. Currently operating through eight insurance company subsidiaries,
Clarendon has long-standing relationships with highly specialized managing
general agents and a record of consistent operating profitability.
Acceptance Insurance Companies Inc. is an insurance holding company
providing specialized crop, property and casualty insurance products throughout
the United States. American Agrisurance, the Company's wholly owned crop
insurance marketing subsidiary, is a widely recognized leader in the crop
insurance industry.
Contacts:
John E. Martin Ming-I-Huang
President and Chief Executive Officer Senior Vice President
Acceptance Insurance Companies Inc. Clarendon Insurance Group
800-228-7217 212-805-9700
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
ACCEPTANCE INSURANCE COMPANIES INC.
By /s/ J. Michael Gottschalk
J. Michael Gottschalk, Chief Legal Officer,
General Counsel and Secretary
January 26, 2000
