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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 Act of 1934
Date of Report (Date of earliest event reported) November 24, 1999
(NOVEMBER 24, 1999) -----------------
Superior National Insurance Group, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-25984 95-4610936
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(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
26541 Agoura Road,
Calabasas, California 91302
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 880-1600
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26601 Agoura Road,
Calabasas, California 91302
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(Former name or former address, (Zip Code)
if changed since last report.)
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ITEM 5.
Attached hereto as Exhibit 99.1 is the press release issued by Superior
National Insurance Group, Inc. dated November 24, 1999 which is hereby
incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS.
99.1 Press release dated November 24, 1999.
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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.
Date: November 24, 1999
SUPERIOR NATIONAL INSURANCE GROUP, INC.
By: /s/ J. Chris Seaman
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J. Chris Seaman
President and Chief Executive Officer
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EXHIBIT INDEX
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<CAPTION>
Exhibit
Number Description
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<S> <C>
99.1 Press release dated November 24, 1999.
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SUPERIOR NATIONAL INSURANCE GROUP, INC. ANNOUNCES
ENGAGEMENT OF WASSERSTEIN PERELLA & CO.
AND DEFERRAL OF DIVIDEND PAYMENTS ON ITS TRUST PREFERRED SECURITIES
Superior National Insurance Group, Inc. (Nasdaq:SNTL) announced today
that it has retained the services of the investment banking firm Wasserstein
Perella & Co. to provide advice to Superior National's Board of Directors
with respect to its strategic and financial options in light of the effects
on Superior National of the purported rescission of a reinsurance contract by
Inter-Ocean Reinsurance Company Ltd. and American Re-Insurance Company.
Inter-Ocean is seeking to rescind a reinsurance contract it entered-into with
Foundation Health Corporation, a subsidiary of Foundation Health Systems,
Inc. (NYSE:FHS), on behalf of Business Insurance Group at the time of
Superior National's acquisition of Business Insurance Group from FHS.
J. Chris Seaman, Superior National's President and Chief Executive
Officer, stated, "Superior National is confident that it will prevail in its
litigation with American Re-Insurance Company and American Re's affiliate,
Inter-Ocean Reinsurance Company Ltd., and we are very pleased with our
progress to date in that respect. We are equally confident that upon
prevailing in the litigation Superior National will be in a position to
recover damages suffered by our stockholders, bondholders, lenders, and
others. Although the litigation has created an uncertainty that we cannot
ignore, we ask all of our constituents to remember that Superior National's
underwriting discipline, history of business innovation, and commitment to
customer service, represent the continuing strengths and value of the
Superior National organization. These strengths and the Company's value will
remain long after the issues associated with the pending litigation have
passed."
Superior National is the largest private sector underwriter of workers'
compensation insurance in the State of California, and the ninth largest
workers' compensation insurer in the nation. Superior National's
stockholders' equity at September 30, 1999 was approximately $174 million,
and consolidated premium in force for the policy year ended September 30,
1999 was approximately $685 million. Superior National employs approximately
1,250 personnel in 35 regional and branch offices located throughout the
United States.
Superior National previously announced that the California Department of
Insurance has required it to maintain special workers' compensation deposits
related to the reinsurance contract between Superior National's insurance
subsidiaries and Inter-Ocean Reinsurance Company Ltd. Under the reinsurance
contract, these special deposits are the joint obligation of Inter-Ocean and
American Re. The California Department of Insurance, however, has required
Superior National to maintain duplicate special workers' compensation
deposits in addition to those provided by Inter-Ocean until the arbitration
proceeding related to the reinsurance contract is completed. The effect of
this double deposit requirement has been to defer the release of a large
portion of Superior National's excess security deposits currently held by the
California Department of Insurance, adversely affecting Superior National's
operating liquidity. Regardless, the California Department of Insurance has
worked constructively with Superior National over the past week to accomplish
the release of additional funds to satisfy the Company's immediate operating
cash flow needs.
Superior National also announced that it will defer the next scheduled
dividend payment on its Trust Preferred Securities, due to be made on
December 1, 1999. The Trust Preferred Securities, issued by a Superior
National affiliate, Superior National Capital Trust I, have a provision
allowing Superior National to defer up to ten consecutive semi-annual
payments. Superior National is causing the Trust to defer only the current
payment at this juncture, but is reserving the right to extend the deferral
if the need arises. The deferral of dividends on the Trust Preferred
Securities will provide additional liquidity for operations pending
resolution of the arbitration, but the Company's current liquidity issues
will be fully resolved. The deferred amounts must be paid in cash to the
holders of the Trust Preferred Securities at the end of the deferral period
and will accrue interest during that time.
Superior National Insurance Group, Inc. is the parent company of
Superior National Insurance Company and California Compensation Insurance
Company, specialty workers' compensation insurers operating throughout the
United States.
This release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Act of 1934. Actual results could differ materially from those projected in
forward-looking statements as a result of variability of business conditions
and the inherent difficulty of accurately forecasting revenues and expenses.
