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 31, 1996
ACAP CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-14451 25-1489730
(State of Incorporation) (Commission File Number) (IRS Employer ID No.)
10555 Richmond Avenue, Houston, Texas 77042
(Address of principal executive offices)
(713) 974-2242
(Registrant's telephone number)<PAGE>
Item 2. Acquisition or Disposition of Assets.
On May 31, 1996, American Capitol Insurance Company ("American
Capitol") a wholly-owned subsidiary of Acap Corporation ("the
Registrant") entered into a Reinsurance and Assumption Agreement with
World Service Life Insurance Company of America ("World Service") and
South Texas Bankers Life Insurance Company ("South Texas Bankers"), a
wholly-owned subsidiary of World Service. Pursuant to the agreement,
American Capitol assumed all of the insurance in force of World
Service and South Texas Bankers. Immediately upon acquisition,
American Capitol reinsured the acquired business on a 100% coinsurance
basis with an unaffiliated reinsurer. American Capitol retained the
administration of the policies, for which it will receive an expense
allowance from the reinsurer. An experience refund formula in the
coinsurance allowance returns to American Capitol 50% of the profits
generated by the reinsured policies above a specified threshold.
Also, at American Capitol's option, the reinsured policies may be
recaptured at a price determined by the experience formula.
American Capitol purchased approximately 24,000 policies from World
Service and South Texas Bankers (the "Sellers") for cash of
approximately $2.3 million. The assets transferred to American Capitol
were $19.4 million in cash and approximately $2.0 million of mortgage
loans.
The consideration is subject to certain post-closing price
adjustments. However, it is not expected that such adjustments will
be material. American Capitol's source of the $2.3 million in cash is
from the reinsurer in the form of the initial ceding allowance under
the coinsurance agreement.
The nature and amount of the consideration paid to the Seller were
arrived at on the basis of arm's-length negotiations and American
Capitol's consideration of various factors, including an actuarial
valuation of the insurance in force and judgments with regard to the
prospects and future of the acquired policies.
There are no direct or indirect relationships between the Registrant
or any affiliate of the Registrant and the Sellers or any affiliate of
the Sellers.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
a. Financial Statements of Business Acquired.
As the acquisition was for assets only, a financial statement of
the business acquired in not applicable.
b. Pro Forma Financial Information.
It is impracticable at this time to provide the required pro
forma financial statements required by this Item 7. Such
information will be provided as soon as practicable, but in no
event later than August 14, 1996 under cover of Form 10QSB.<PAGE>
SIGNATURES
Pursuant to the requirments 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.
ACAP CORPORATION
Date: June 7, 1996 By: /s/John D. Cornett
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John D. Cornett,
Executive Vice President
and Treasurer
