<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE,
SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 for the plan year ended December 31, 1998
or
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] for the
transition period from ________ to ____________
Commission File Number: 0-15196
THE CENTRIS GROUP, INC. EMPLOYEES' SAVINGS PLAN
650 Town Center Drive, Suite 1600
Costa Mesa, California 92626
(Full title of the Plan and the address of the Plan)
THE CENTRIS GROUP, INC.
650 Town Center Drive, Suite 1600
Costa Mesa, California 92626
(Name of issuer of the securities held pursuant to the Plan and address of its
principal executive offices)
This document consists of 20 pages, the first of which is this cover page.
An Index may be found on page 5 of this report.
===============================================================================
<PAGE>
REQUIRED INFORMATION
Financial Statements
1. Not Applicable
2. Not Applicable
3. Not Applicable
4. Pursuant to the requirements of Section 15(d) of the Securities Exchange
Act, The Centris Group, Inc. Employees' Savings Plan (the "Plan") hereby
files with the Commission the following audited financial statements and
schedules:
. Independent Auditors' Report dated May 26,1999
. Statements of Net Assets Available for Plan Benefits
with fund information as of December 31, 1998 and 1997
. Statements of Changes in Net Assets Available For Plan
Benefits with fund information for the years ended
December 31, 1998 and 1997
. Notes to Financial Statements
. Schedules to Financial Statements
Schedule 1 Line 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1998 (also see Note 4 of Notes to
Financial Statements)
Schedule 2 Line 27d - Schedule of Transactions or Series of
Transactions in Excess of 5% of Plan Assets as of the
Beginning of the Plan Year for the year ended December 31,
1998
Since the Plan is subject to the Employee Retirement Income Security Act of
1974 ("ERISA"), the financial statements and schedules included in this
Form 11-K for the fiscal year ended December 31, 1998 have been prepared in
accordance with the financial reporting requirements of ERISA.
Exhibits
- --------
23.1. Consent of KPMG Peat Marwick LLP
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the members
of the Plan's Administrative Committee have duly caused this annual report to be
signed on its behalf by the undersigned, thereunto duly authorized.
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Date: June 23, 1999 By: /s/ PATRICIA BOISSERANC
------------------------
PATRICIA BOISSERANC
Chairman of Administrative Committee
Date: June 23, 1999 By: /s/ LINTON R. GROKE
--------------------
LINTON R. GROKE
Member of Administrative Committee
Date: June 23,1998 By: /s/ LORRAINE G. SCHAEFER
-------------------------
LORRAINE G. SCHAEFER
Member of Administrative Committee
<PAGE>
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Financial Statements and Schedules
December 31, 1998 and 1997
(With Independent Auditors' Report Thereon)
<PAGE>
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Table of Contents
<TABLE>
Page
<S> <C>
Independent Auditors' Report 6
Statements of Net Assets Available for Plan Benefits with Fund Information as of December 31,
1998 and 1997 7
Statements of Changes in Net Assets Available for Plan Benefits with Fund Information for the
years ended December 31, 1998 and 1997 9
Notes to Financial Statements 13
Schedule
1 - Line 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1998 18
2 - Line 27d - Schedule of Reportable Transactions for the year ended December 31, 1998 19
Exhibit
Consent of KPMG LLP 20
</TABLE>
<PAGE>
Independent Auditors' Report
The Board of Directors
The Centris Group, Inc.:
We have audited the accompanying statements of net assets available for plan
benefits with fund information of The Centris Group, Inc. Employees' Savings
Plan (the Plan) as of December 31, 1998 and 1997 and the related statements of
changes in net assets available for plan benefits with fund information for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1998 and 1997 and the changes in net assets available for plan
benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of The
Centris Group, Inc. Employees' Savings Plan are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The fund information in the statements
of net assets available for plan benefits with fund information and the
statements of changes in net assets available for plan benefits with fund
information is presented for purposes of additional analysis rather than to
present the net assets available for plan benefits and changes in net assets
available for plan benefits of each fund. The supplemental schedules and fund
information have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated, in all
material respects, in relation to the basic financial statements taken as a
whole.
KPMG LLP
May 26, 1999
<PAGE>
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits with Fund Information
December 31, 1998
<TABLE>
<CAPTION>
Putnam Putnam
Asset Putnam Putnam Asset Putnam
Allocation - International New Allocation - Diversified
Growth Growth Opportunities Conservative Income
Assets Portfolio Fund Fund Portfolio Trust
------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Putnam Asset Allocation - Growth Portfolio $995,694 -- -- -- --
Putnam International Growth Fund -- 652,064 -- -- --
Putnam New Opportunities Fund -- -- 1,435,305 -- --
Putnam Asset Allocation - Conservative Portfolio -- -- -- 93,547 --
Putnam Diversified Income Trust -- -- -- -- 517,067
The Centris Group, Inc. Common Stock -- -- -- -- --
Putnam Voyager Fund -- -- -- -- --
Participant Loan Fund -- -- -- -- --
Pending account -- -- -- -- --
-------- ------- --------- ------ -------
995,694 652,064 1,435,305 93,547 517,067
Investments, at contract value - Putnam Stable Value
Fund -- -- -- -- --
-------- ------- --------- ------ -------
Net assets available for plan benefit $995,694 652,064 1,435,305 93,547 517,067
======== ======= ========= ====== =======
<CAPTION>
The Centris Putnam Putnam Participant
Group, Inc. Voyager Stable Loan Pending
Common Stock Fund Value Fund Fund account Total
------------- ----------- ---------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investments, at fair value:
Putnam Asset Allocation - Growth Portfolio -- -- -- -- -- 995,694
Putnam International Growth Fund -- -- -- -- -- 652,064
Putnam New Opportunities Fund -- -- -- -- -- 1,435,305
Putnam Asset Allocation - Conservative Portfolio -- -- -- -- -- 93,547
Putnam Diversified Income Trust -- -- -- -- -- 517,067
The Centris Group, Inc. Common Stock 1,158,204 -- -- -- -- 1,158,204
Putnam Voyager Fund -- 1,362,404 -- -- -- 1,362,404
Participant Loan Fund -- -- -- 268,396 -- 268,396
Pending account -- -- -- -- 1,849 1,849
--------- --------- --------- ------- ----- ---------
1,158,204 1,362,404 -- 268,396 1,849 6,484,530
Investments, at contract value - Putnam Stable Value
Fund -- -- 1,464,672 -- -- 1,464,672
--------- --------- --------- ------- ----- ---------
Net assets available for plan benefit 1,158,204 1,362,404 1,464,672 268,396 1,849 7,949,202
========= ========== ========= ======= ===== =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
Putnam Putnam
Asset Putnam Putnam Asset Putnam
Allocation- International New Allocation- Diversified
Growth Growth Opportunities Conservative Income
Assets Portfolio Fund Fund Portfolio Trust
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Putnam Asset Allocation - Growth Portfoli $ 780,149 - - - -
Putnam International Growth Fund - 437,313 - - -
Putnam New Opportunities Fund - 1,007,125 - -
Putnam Asset Allocation - Conservative Portfolio - - - 62,347 -
Putnam Diversified Income Trust - - - - 464,468
The Centris Group, Inc. Common Stock - - - - -
Putnam Voyager Fund - - - - -
Participant Loan Fund - - - - -
------------- ------------- ------------- ------------- -------------
780,149 437,313 1,007,125 62,347 464,468
Investments, at contract value - Putnam Stable Value
Fund - - - - -
------------- ------------- ------------- ------------- -------------
Net assets available for plan benefit $ 780,149 437,313 1,007,125 62,347 464,468
============ ============ ============ ============ ============
The Centris Putnam Putnam Participant
Group, Inc. Voyager Stable Loan
Assets Common Stock Fund Value Fund Fund Total
------------- ------------- ------------- ------------- -------------
Investments, at fair value:
Putnam Asset Allocation - Growth Portfoli - - - - 780,149
Putnam International Growth Fund - - - - 437,313
Putnam New Opportunities Fund - - - - 1,007,125
Putnam Asset Allocation - Conservative Portfolio - - - - 62,347
Putnam Diversified Income Trust - - - - 464,468
The Centris Group, Inc. Common Stock 1,241,004 - - - 1,241,004
Putnam Voyager Fund - 880,840 - - 880,840
Participant Loan Fund - - - 244,624 244,624
------------- ------------- ------------- ------------- -------------
1,241,004 880,840 - 244,624 5,117,870
Investments, at contract value - Putnam Stable Value
Fund - - 1,144,054 - 1,144,054
------------- ------------- ------------- ------------- -------------
Net assets available for plan benefit 1,241,004 880,840 1,144,054 244,624 6,261,924
============ ============ ============ ============ ============
</TABLE>
<PAGE>
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits with Fund
Information
Year ended December 31, 1998
<TABLE>
<CAPTION>
Putnam Putnam
Asset Putnam Putnam Asset Putnam
Allocation- International New Allocation- Diversified
Growth Growth Opportunities Conservative Income
Portfolio Fund Fund Portfolio Trust
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends-mutual funds $ 26,100 18,712 43,856 4,155 35,623
Dividends-common stock -- -- -- -- --
Net appreciation (depreciation)
of fair value of investments 84,389 64,923 207,336 2,438 (47,583)
--------- -------- --------- -------- -------
110,489 83,635 251,192 6,593 (11,960)
--------- -------- --------- -------- -------
Contributions:
Employer-Company match 86,694 52,854 124,116 15,806 46,841
Employees 138,208 73,144 181,474 23,339 61,575
--------- -------- --------- -------- -------
224,902 125,998 305,590 39,145 108,416
--------- -------- --------- -------- -------
Interfund transfers (44,085) 31,400 (25,400) 129 (3,181)
--------- -------- --------- -------- -------
Total additions (deletions) 291,306 241,033 531,382 45,867 93,275
--------- -------- --------- -------- -------
Deductions from net assets attributed to:
Benefits paid to participants (75,761) (26,282) (103,202) (14,667) (40,676)
Loan fees -- -- -- -- --
--------- -------- --------- -------- -------
Total deductions (75,761) (26,282) (103,202) (14,667) (40,676)
--------- -------- --------- -------- -------
Net increase (decrease) 215,545 214,751 428,180 31,200 52,599
Net assets available for plan benefits:
Beginning of year 780,149 437,313 1,007,125 62,347 464,468
--------- -------- --------- -------- -------
End of year $ 995,694 652,064 1,435,305 93,547 517,067
========= ======== ========= ======== =======
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits with Fund
Information
Year ended December 31, 1998
<TABLE>
<CAPTION>
The Centris
Group, Inc. Putnam Putnam
Common Voyager Stable Participant Pending
Stock Fund Value Fund Loan Fund acccount Total
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends-mutual funds $ -- 89,979 70,968 25,396 -- 314,789
Dividends-common stock 13,714 -- -- -- -- 13,714
Net appreciation (depreciation)
of fair value of investments (170,368) 144,681 -- -- -- 285,816
---------- --------- --------- -------- ----- ----------
(156,654) 234,660 70,968 25,396 -- 614,319
---------- --------- --------- -------- ----- ----------
Contributions:
Employer-Company match 61,359 143,880 (11,420) -- -- 520,130
Employees 86,740 195,425 360,001 -- -- 1,119,906
---------- --------- --------- -------- ----- ----------
148,099 339,305 348,581 -- -- 1,640,036
---------- --------- --------- -------- ----- ----------
Interfund transfers (15,897) (4,435) 37,944 21,676 1,849 --
---------- --------- --------- -------- ----- ----------
Total additions (deletions) (24,452) 569,530 457,493 47,072 1,849 2,254,355
---------- --------- --------- -------- ----- ----------
Deductions from net assets
attributed to:
Benefits paid to participants (58,348) (87,966) (136,875) (23,300) -- (567,077)
Loan fees -- -- -- -- -- --
---------- --------- --------- -------- ----- ----------
Total deductions (58,348) (87,966) (136,875) (23,300) -- (567,077)
---------- --------- --------- -------- ----- ----------
Net increase (decrease) (82,800) 481,564 320,618 23,772 1,849 1,687,278
Net assets available for plan
benefits:
Beginning of year 1,241,004 880,840 1,144,054 244,624 -- 6,261,924
---------- --------- --------- -------- ----- ----------
End of year $1,158,204 1,362,404 1,464,672 268,396 1,849 7,949,202
========== ========= ========= ======== ===== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Statement of Changes in Net Assets Available
for Plan Benefits with Fund Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
New England Putnam Putnam
Mutual Life Asset Putnam Putnam Asset
Guaranteed Putnam Allocation - International New Allocation -
Investment Transfer Growth Growth Opportunities Conservative
Contract Account Portfolio Fund Fund Portfolio
---------- -------- ------------ ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends - mutual funds $ -- -- 55,719 23,439 21,285 3,482
Dividends - common stock -- -- -- -- -- --
Net appreciation (depreciation)
of fair value of investments -- -- 63,620 38,099 156,652 (438)
--------- --------- ------- ------- --------- ------
-- -- 119,339 61,538 177,937 3,044
--------- --------- ------- ------- --------- ------
Contributions:
Employer - Company match -- -- 62,123 29,563 87,958 8,626
Employees -- -- 91,661 39,493 161,394 31,626
--------- --------- ------- ------- --------- ------
-- -- 153,784 69,056 249,352 40,252
--------- --------- ------- ------- --------- ------
Interfund transfers (171,249) -- (32,175) 12,363 4,037 19,634
Transfer from Dreyfus -- (3,040,958) 598,219 308,505 599,264 --
--------- ---------- ---------- ------- --------- ------
Total additions (deletions) (171,249) (3,040,958) 839,167 451,462 1,030,590 62,930
--------- ---------- ---------- ------- --------- ------
Deductions from net assets attributed to:
Benefits paid to participants -- -- (59,010) (14,148) (23,460) (583)
Loan fees -- -- (8) (1) (5) --
--------- ---------- ---------- ------- --------- ------
Total deductions -- -- (59,018) (14,149) (23,465) (583)
--------- ---------- ---------- ------- --------- ------
Net increase (decrease) (171,249) (3,040,958) 780,149 437,313 1,007,125 62,347
Net assets available for plan benefits:
Beginning of year 171,249 3,040,958 -- -- -- --
--------- ---------- ---------- ------- --------- ------
End of year $ -- -- 780,149 437,313 1,007,125 62,347
========= ========== ========== ======= ========= ======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE CENTRIS GROUP, INC.
EMPLOYEES SAVINGS PLAN
Statement of Changes in Net Assets Available
for Plan Benefits with Fund Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
Putnam The Centris
Diversified Group, Inc. Putnam Putnam
Income Common Voyager Stable Participant
Trust Stock Fund Value Fund Loan Fund Total
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends - mutual funds $ 28,436 -- 52,284 62,805 16,939 264,389
Dividends - common stock -- 15,099 -- -- -- 15,099
Net appreciation (depreciation)
of fair value of investments 6,250 176,049 109,725 -- -- 549,957
------------- ------------- ------------- ------------- ------------- -------------
34,686 191,148 162,009 62,805 16,939 829,445
------------- ------------- ------------- ------------- ------------- -------------
Contributions:
Employer - Company match 34,570 50,130 92,124 49,911 -- 415,005
Employees 44,167 70,902 147,082 91,690 -- 678,015
------------- ------------- ------------- ------------- ------------- -------------
78,737 121,032 239,206 141,601 -- 1,093,020
------------- ------------- ------------- ------------- ------------- -------------
Interfund transfers (19,276) (159,726) 105,931 212,120 28,341 --
Transfer from Dreyfus 378,420 -- 403,327 753,223 -- --
------------- ------------- ------------- ------------- ------------- -------------
Total additions (deletions) 472,567 152,454 910,473 1,169,749 45,280 1,922,465
------------- ------------- ------------- ------------- ------------- -------------
Deductions from net assets attributed to:
Benefits paid to participants (8,099) (234,528) (29,632) (25,687) (13,355) (408,502)
Loan fees -- (7) (1) (8) -- (30)
------------- ------------- ------------- ------------- ------------- -------------
Total deductions (8,099) (234,535) (29,633) (25,695) (13,355) (408,532)
------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease) 464,468 (82,081) 880,840 1,144,054 31,925 1,513,933
Net assets available for plan benefits:
Beginning of year -- 1,323,085 -- -- 212,699 4,747,991
------------- ------------- ------------- ------------- ------------- -------------
End of year $ 464,468 1,241,004 880,840 1,144,054 244,624 6,261,924
============= ============= ============= ============= ============= =============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(1) Description of Plan
(a) General
The Centris Group, Inc. Employees' Savings Plan (the Plan) is a
defined contribution, contributory 401(k) plan sponsored by The
Centris Group, Inc. (the Company), which became effective January 1,
1989 and was amended as of December 31, 1997 and December 16, 1998.
From January 1, 1994 to December 31, 1996, the administrative
functions for the Plan were performed by Dreyfus Group Retirement
Plans, whose affiliate, Dreyfus Trust Company, acted as Trustee of the
Plan. As of January 1, 1997, Putnam Fiduciary Trust Company replaced
Dreyfus Trust Company as trustee of the Plan and also assumed the
administrative functions. On December 31, 1996, all Plan investments
in Dreyfus funds were liquidated and transferred to funds managed by
Putnam Investments. Since Plan inception, three employees of the
Company have functioned as the Plan's administrative committee.
In 1997, all employees were eligible to participate in the Plan on the
first day of the calendar quarter following completion of one year of
service as an employee with the Company and attainment of age 21. On
December 31, 1997, the time of service requirement to participate in
the Plan was changed from one year of service to three months of
service. On December 16, 1998, the age was changed to 18. After
becoming eligible, employees may participate until retirement,
disability or termination from the Company. The Plan is subject to
certain provisions of the Employee Retirement Income Security Act of
1974 (ERISA); however, benefits under the Plan are not eligible for
Plan termination insurance provided by the Pension Benefit Guaranty
Corporation under Title IV of ERISA. Participants should refer to the
Plan Document for a more complete description of the Plan.
(b) Trust Fund
The Trustee exercises discretionary authority in transactions
involving purchases and sales within the various funds.
(c) Contributions and Forfeitures
Participants in the Plan are permitted to invest contributions in one
or a combination of seven funds, in addition to The Centris Group,
Inc. Common Stock. Participants can contribute up to 15% of their
annual compensation on a pretax basis, subject to Federal limitations,
which were $10,000 and $9,500 in 1998 and 1997, respectively. The
Company matches 100% of participant contributions, to a maximum of 6%
of annual compensation. Participants select the fund in which matching
contributions are invested.
Forfeitures are used to reduce the actual matching contribution of the
Company and amounted to $103,499 and $40,717 in 1998 and 1997,
respectively.
(Continued)
<PAGE>
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(d) Participant Accounts
Each participant's account is credited with the participant's
contribution, an allocation of the Company's matching contribution and
Plan earnings. Earnings are allocated to participants based upon the
proportion of the participant's account balance to the total account
balance for each fund within the Plan. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's account.
(e) Vesting
Employee contributions to the Plan and earnings thereon are fully
vested when contributed or earned. Employer contributions to the
participants' accounts vest ratably over a five-year period after two
years of service.
(f) Payment of Benefits
On termination of service due to death, disability or retirement, a
participant or beneficiary may elect to receive either a lump-sum
amount equal to 100% of the value of the participant's interest in his
or her account, or annual installments over a period not to exceed the
life expectancy of the participant or designated beneficiary. If the
value of the participant's interest in his or her account at the date
of termination is not over $3,500, and was never over $3,500 at the
date of any prior distribution, a single lump-sum payment is made.
(g) Participant Loans Fund
Participants may borrow from a minimum of $1,000 up to a maximum of
the lesser of $50,000 reduced by the highest unpaid loan balance
during the preceding 12 months, or 50% of their vested account
balance. Loan transactions are treated as a transfer to (from) the
investment fund from (to) the Participant Loan Fund. Loan terms range
from 1 to a maximum of 5 years and are payable in full in the event of
termination. The loans are secured by the balance in the participant's
account and bear interest at a rate commensurate with local prevailing
rates as determined quarterly by the Plan administrators. Interest
rates on existing loans range from 9.25% to 10.0%. Principal and
interest are paid ratably through payroll deductions.
(2) Summary of Significant Accounting Policies
The financial statements of the Plan are prepared under the accrual method
of accounting.
The Plan's investments are stated at the estimated fair market value except
for insurance company investment contracts, which are stated at contract
value. The estimated fair value of these investments is determined from
quoted market prices. Participant loans are stated at their outstanding
principal balance, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Realized gains and losses from security transactions are reported under the
average-cost method. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date. Benefits are recorded when
paid.
(Continued)
<PAGE>
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
(3) Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of Plan
termination, the amounts allocable to the accounts of all participants
become 100% vested and nonforfeitable, without regard to the years of
service of the participants.
(4) Plan Investments
Descriptions of the investment funds currently available under the Plan,
including The Centris Group, Inc. Common Stock, are as follows:
. Putnam Asset Allocation - Growth Portfolio - This fund seeks capital
appreciation by allocating its investments between equity and fixed
income class securities.
. Putnam International Growth Fund - This fund seeks capital appreciation
by investing primarily in equity securities of companies located in a
country other than the United States.
. Putnam New Opportunities Fund - This fund seeks capital appreciation by
investing principally in common stocks of companies in sectors of the
economy which the fund's investment manager believes possess above-
average, long-term growth potential.
. Putnam Asset Allocation - Conservative Portfolio - This fund seeks total
return consistent with preservation of capital by allocating its
investments between fixed income and equity class securities.
. Putnam Diversified Income Trust - This fund seeks high current income
consistent with preservation of capital by allocating investments among
three sectors of the fixed income securities markets: U.S. Government,
High Yield and International.
. The Centris Group, Inc. Common Stock - This fund is comprised of shares
of common stock of The Centris Group, Inc. and money market instruments.
The objective of this fund is long-term capital growth.
. Putnam Voyager Fund - This fund seeks capital appreciation by investing
primarily in common stocks of companies that the fund's investment
manager believes have potential for capital appreciation which is
significantly greater than that of the market averages.
. Putnam Stable Value Fund - This fund seeks to preserve principal and
achieve high current income through a diversified portfolio of high-
quality investment contracts.
All interest and dividends received from each investment fund are
automatically reinvested in their respective investment fund.
(Continued)
<PAGE>
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
At December 31, 1998, all funds, with the exception of the Putnam Asset
Allocation - Conservative Portfolio, the Participant Loan Fund and the
pending account had investment balances that represented greater than 5% of
the net assets available for Plan benefits. At December 31, 1997, all funds,
with the exception of the Putnam Asset Allocation - Conservative Portfolio
and the Participant Loan Fund, had investment balances that represented
greater than 5% of net assets available for Plan benefits.
The number of employees participating in the respective funds at December
31, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
1998:
<S> <C>
Putnam Asset Allocation - Growth Portfolio 114
Putnam International Growth Fund 93
Putnam New Opportunities Fund 138
Putnam Asset Allocation - Conservative Portfolio 180
Putnam Diversified Income Trust 87
The Centris Group, Inc. Common Stock 86
Participant Loan Fund 39
Putnam Voyager Fund 141
Putnam Stable Value Fund 108
====================
1997:
Putnam Asset Allocation - Growth Portfolio 93
Putnam International Growth Fund 60
Putnam New Opportunities Fund 120
Putnam Asset Allocation - Conservative Portfolio 16
Putnam Diversified Income Trust 55
The Centris Group, Inc. Common Stock 46
Participant Loan Fund 39
Putnam Voyager Fund 113
Putnam Stable Value Fund 82
====================
</TABLE>
(5) Commitments and Reconciliation to Form 5500
Net assets available for Plan benefits include $736,092 and $419,970 at
December 31, 1998 and 1997, respectively, allocated to the accounts of
persons who are no longer employees of the Company but have not yet received
distribution of their account balances. These persons participate in the
earnings of the Plan but not in contributions. Such amounts are shown as
liabilities of the Plan in Form 5500, Annual Return/Report of Employee
Benefit Plan, filed with the Department of Labor.
(Continued)
<PAGE>
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(6) Federal Income Taxes
The Plan qualifies under the provisions of Sections 401(a) and 401(k) of the
Internal Revenue Code and is exempt from Federal income taxes under
provisions of Section 501(a) of the Internal Revenue Code. The Company
received a favorable determination letter on the Plan on May 22, 1998 from
the Internal Revenue Service, and the Company believes that the Plan
continues to qualify and operate as designed.
(7) Administration Costs
Administration costs of the Plan were approximately $19,315 and $3,711 for
the years ended December 31, 1998 and 1997, respectively, and were paid
directly by the Company.
<PAGE>
Schedule 1
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Line 27a-Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
Number of
shares, units
or principal Current
Description of investments amount Cost value
- ---------------------------- --------------- --------------- ---------------
<S> <C> <C> <C>
* Putnam Asset Allocation-Growth Portfolio
annual effective return of 13.74% in 1998 73,052 $ 864,014 995,694
* Putnam International Growth Fund
annual effective return of 18.95% in 1998 33,908 558,571 652,064
* Putnam New Opportunities Fund
annual effective return of 24.39% in 1998 24,564 1,095,394 1,435,305
* Putnam Asset Allocation-Conservative
Portfolio annual effective return of 9.11%
in 1998 9,012 90,898 93,547
* Putnam Diversified Income Trust annual
effective return of -1.9% in 1998 44,962 555,022 517,067
* The Centris Group, Inc. Common Stock,
effective return: -11.65% in 1998 118,790 986,768 1,158,204
* Putnam Voyager Fund annual effective
return of 24.05% in 1998 62,154 1,128,822 1,362,404
* Putnam Stable Value Fund annual effective
return of 5.77% in 1998 1,464,672 1,464,672 1,464,672
Participant Loan Fund
Loans outstanding at year-end, interest rate
ranging from 8.50% to 10.00% -- -- 268,396
Pending Fund 1,849 1,849 1,849
========= ========= ----------
Total investments $7,949,202
==========
</TABLE>
* Party in interest.
See accompanying independent auditors' report
<PAGE>
Schedule 2
THE CENTRIS GROUP, INC.
EMPLOYEES' SAVINGS PLAN
Line 27d-Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
<CAPTION>
Description
(number) of
Indentity of party involved Description of asset transactions
- ------------------------------------ --------------------------------- ----------------
<S> <C> <C>
*Putnam Investments Retirement Plan Putnam Asset Allocation- Purchases (52)
Growth Portfolio Sales (50)
*Putnam Investments Retirement Plan Putnam New Opportunities Fund Purchases (61)
Sales (61)
*Putnam Investments Retirement Plan Putnam Voyager Fund Purchases (55)
Sales (44)
*Putnam Investments Retirement Plan Putnam Stable Value Fund Purchases (87)
Sales (44)
</TABLE>
<TABLE>
Current value
Expenses of asset on
Purchase Selling incurred with transaction Net gain
Indentity of party involved price price transaction Cost date (loss)
- ----------------------------------- ------------ ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
*Putnam Investments Retirement Plan $337,920 -- -- 337,920 337,920 --
-- 206,764 -- 197,818 197,818 8,946
*Putnam Investments Retirement Plan 490,637 -- -- 490,637 490,637 --
-- 269,792 -- 253,712 253,712 16,080
*Putnam Investments Retirement Plan 556,101 -- -- 556,101 556,101 --
-- 219,219 -- 205,045 205,045 14,174
*Putnam Investments Retirement Plan 806,696 -- -- 806,696 805,696 --
-- 486,078 -- 486,078 486,078 --
========= ========= ========= ========= ========= =========
</TABLE>
* Party in interest.
See accompanying independent auditors' report.
<PAGE>
EXHIBIT 23.1
The Board of Directors
The Centris Group, Inc.:
We consent to incorporation by reference in the registration statement (No. 33-
46841) on Form S-8 of The Centris Group, Inc. of our report dated May 26, 1999,
relating to the statements of net assets available for plan benefits with fund
information of The Centris Group, Inc. Employees' Savings Plan as of December
31, 1998 and 1997, the related statements of changes in net assets available for
plan benefits with fund information for the years then ended and related
schedules as of and for the year ended December 31, 1998, which report appears
in the December 31, 1998 Annual Report on Form 11-K of The Centris Group, Inc.
KPMG LLP
Los Angeles, California
June 10, 1999
