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):
May 1, 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)
<PAGE>
Item 5. Other Events.
(a) The Registrant issued the following press release on May 1, 2000:
For Immediate Release
COURT GIVES PRELIMINARY APPROVAL TO SETTLEMENT
OF CLASS ACTION BY RICE PRODUCERS
(Omaha, Nebraska, May 1, 2000). Acceptance Insurance Companies Inc.
(NYSE: AIF) announced that the United States District Court in Little Rock,
Arkansas today entered an Order finding a proposed settlement in Wallace,
et al. vs. American Agrisurance, Inc., et al. to be "within the range of
possible final judicial approval." The Order directs that a notice describing
the proposed settlement be mailed to each of the approximately 6,000 rice
producers who applied last year for the Company's supplemental crop insurance.
The Court also set June 30, 2000 as the date for a hearing to consider final
approval of the settlement.
Under the proposed settlement, rice farmers who applied for and did
not receive supplemental crop insurance at 3 cents per pound would share in a
settlement fund of $3.7 million. The Order appoints Lawrence Dawson, a retired
Arkansas Circuit Court judge, as a Settlement Master and directs that,
following final approval of the proposed settlement, Judge Dawson allocate the
settlement fund among members of the proposed settlement class who submit claim
forms. The Order was based on a Stipulation for Settlement approved by all
parties to the Wallace suit.
The Stipulation notes that the recent denial of class certification
did not preclude filing of additional class and individual actions against the
defendants. In the Stipulation Acceptance said it was settling the case
"solely to avoid further litigation expense and inconvenience, and to remove
the distraction of burdensome and protracted litigation." The Company also
noted that a broad cross-section of rice producers would benefit from the
settlement, including some who did not purchase insurance for their 1999 rice
crop.
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:
Kim R. Gibson J. Michael Gottschalk
President General Counsel and Secretary
American Agrisurance Acceptance Insurance Companies Inc.
800 999 7475 800 228 7217
<PAGE>
(b) The Registrant issued the following press release on May 3, 2000:
For Immediate Release
ACCEPTANCE INSURANCE COMPANIES INC.
ANNOUNCES FIRST QUARTER RESULTS
(Omaha, Nebraska, May 3, 2000). Acceptance Insurance Companies Inc.
(NYSE: AIF) announced today that for the three months ended March 31, 2000 the
Company had a net after-tax loss of $1.9 million, or $0.13 per share. This
compares with net after-tax income of $3.0 million or $0.21 per share for the
three months ending March 31, 1999.
The reported results include a pre-tax charge of $4.0 million for the
three months ended March 31, 2000 in conjunction with settlement of the rice
producers' class action suit preliminarily approved May 1, 2000.
Acceptance CEO John Martin said, "In April we completed a definitive
agreement with Clarendon National Insurance Company to create a new partnership
for the continued development of our specialty program business. The end of
the first quarter also marked the end of our commitment to provide and renew
coverages formerly originated as part of our Scottsdale operation and we also
sold the renewal rights for our 'long-haul' trucking business. These actions
conclude our previously announced plan to sell various books of unprofitable
business."
Martin added, "While we continue to address and bring closure to
issues that contributed to our unacceptable 1999 results, we also are moving
forward with new initiatives and have approved two new property and casualty
programs that we expect to begin writing in the third quarter of this year. In
addition, we are pleased with our Spring crop sales season, although we will
not be able to quantify the sales volume until planting is complete and we
receive actual acreage reports this Summer. Furthermore, we are continuing our
commitment to innovation and new product development."
The Company will hold a conference call for interested parties at
10:30 a.m. EDT, Thursday, May 4, 2000. The Company's conference call may be
accessed at 212 231 6024 five to 10 minutes before the call begins. The
conference call also will be available on PostView from 12:30 p.m. EDT, May 4
to 5:00 p.m. EDT, May 5. To access PostView, dial 800 633 8284 and enter
reservation 15092982.
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.
This release includes forward-looking statements with respect to the
Company's underwriting intentions and crop insurance sales results. Such
forward-looking statements are subject to inherent risks and uncertainties that
may cause actual results to differ materially from those contemplated by such
forward-looking statements, including factors noted in the Company's Form 10K
for the year ended December 31, 1999, which are incorporated herein by
reference.
Contacts:
John E. Martin J. Michael Gottschalk
President and Chief Executive Officer General Counsel and Secretary
800 228 7217 800 228 7217
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
for the three months ended March 31, 2000 and 1999
(in thousands, except per share data)
<TABLE>
<CAPTION>
<S> <C> <C>
2000 1999
_________ _________
Gross premiums written $116,046 $126,114
Ceded premiums written (77,264) (75,062)
_________ _________
Net premiums written $ 38,782 $ 51,052
========= =========
Revenues:
Insurance premiums earned 52,396 53,571
Net investment income 5,418 6,244
Net realized capital gains 1,565 2,480
________ _________
59,379 62,295
________ _________
Costs and expenses:
Costs of revenues:
Insurance losses and loss adjustment
expenses 39,713 36,876
Insurance underwriting expenses 20,299 18,168
General and administrative expenses 489 553
________ _________
60,501 55,597
________ _________
Operating profit (loss) (1,122) 6,698
_________ _________
Other income (expense):
Interest expense (2,168) (2,390)
Other, net - 14
________ _________
(2,168) (2,376)
________ _________
Income (loss) before income taxes and cumulative
effect of change in accounting principle (3,290) 4,322
Income tax expense (benefit) (1,400) 960
________ ________
Income (loss) before cumulative effect of change
in accounting principle (1,890) 3,362
Cumulative effect of change in accounting
principle - (338)
________ ________
Net income (loss) $ (1,890) $ 3,024
=========== ==========
Income (loss) per share before cumulative effect of
change in accounting principle:
Basic $ (.13) $ .24
=========== ==========
Diluted $ (.13) $ .23
=========== ==========
Net income (loss) per share:
Basic $ (.13) $ .21
=========== ==========
Diluted $ (.13) $ .21
=========== ==========
Shares:
Basic 14,285 14,241
========== ==========
Diluted 14,285 14,342
========== ==========
Ratios - GAAP:
Loss 75.8% 68.8%
Expense 38.7% 33.9%
_________ __________
Combined 114.5% 102.7%
========= ==========
March 31, March 31,
2000 1999
___________ ___________
Total Investments $407,941 $502,518
Net Reserves for Losses and LAE 267,585 272,311
Total Equity 181,140 235,550
Book Value per Share $ 12.67 $ 16.54
</TABLE>
<PAGE>
(c) The Registrant's Chief Financial Officer, Georgia M. Mace, has
informed the Registrant that she intends to resign all positions with the
Registrant and its subsidiaries effective June 1, 2000 to pursue other
opportunities. Currently, the Registrant is searching for a new Chief
Financial Officer.
(d) Kenneth C. Coon, President of two subsidiaries of Registrant,
resigned from all positions with the Registrant effective April 14, 2000.
John E. Martin, President and Chief Executive Officer of Registrant, has been
appointed President of these two subsidiaries.
<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
May 3, 2000
