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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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):
September 29, 1999
REINSURANCE GROUP OF AMERICA, INCORPORATED
(Exact name of registrant as specified in its charter)
Missouri
(State or other jurisdiction of incorporation)
1-11848 43-1627032
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(Commission File Number) (I.R S. Employer Identification No.)
1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017-6039
(Address of principal executive offices) (zip code)
(636) 736-7000
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On October 1, 1999, Reinsurance Group of America, Incorporated (the "Company")
announced that effective September 29, 1999, General American Life Insurance
Company ("General American") completed the recapture of the entire block of
General American's funding agreement business reinsured by the Company. Prior to
the recapture, the Company reinsured approximately 25% of General American's
funding agreement business. Pursuant to the recapture transaction, the Company
transferred all remaining liabilities related to the funding agreement business
and an equivalent amount of assets to General American. General American is a
wholly owned subsidiary of GenAmerica Corporation, which in turn is wholly owned
by General American Mutual Holding Company ("GAMHC"). GAMHC is the beneficial
owner of approximately 53% percent of the Company's outstanding shares of common
stock.
Over the course of the third quarter of 1999, the Company transferred to General
American approximately $1.8 billion in assets, including $1.5 billion in
connection with the recapture noted above. Those assets, consisting primarily of
investments in fixed maturity securities and cash, were transferred in
satisfaction of $1.8 billion in funding agreement liabilities. On a pro forma
basis, after giving effect to these transfers, assets and liabilities would have
been approximately $4.9 billion and $4.2 billion, respectively, as of June 30,
1999. These amounts compare to historical assets and liabilities of $6.7 billion
and $6.0 billion, respectively, as of June 30, 1999.
Associated with the liquidation of investment securities and the transfer of
assets to General American during the third quarter of 1999, the Company
incurred an after tax net capital loss of approximately $33.2 million, including
$26.0 million associated with the recapture transaction noted above. During 1998
and the first six months of 1999, the funding agreements business provided
approximately $87.7 million and $50.6 million in revenues, primarily investment
income, and $83.6 million and $47.4 million in pre-tax expenses, primarily
interest credited on deposit liabilities, respectively. Excluding operating
results of the funding agreements business, pro forma income from continuing
operations for 1998 and the first six months of 1999 would have been
approximately $87.1 million, or $2.05 per diluted share, and $45.6 million, or
$0.99 per diluted share, respectively. Pro forma income from continuing
operations is calculated as if the recapture of the funding agreements business
was consummated at the beginning of the periods presented. Additionally, the pro
forma amounts exclude any realized capital loss that would have been incurred as
a result of the recapture. These results compare to historical income from
continuing operations for 1998 and the first six months of 1999 of $89.7
million, or $2.08 per diluted share, and $47.6 million, or $1.04 per diluted
share, respectively.
The foregoing pro forma figures should not be considered indicative of actual
results that would have occurred had the recapture and subsequent disposition
been consummated on the date or for the period indicated, and does not purport
to be indicative of results of operations as of any future date or for any
period.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) The pro forma financial information required by Form 8-K is
included in Item 2, which is incorporated by reference herein.
(c) The following exhibit is filed as part of this report on Form 8-K.
Exhibit 99.1 Press Release issued by the Company dated October 1,
1999 relating to the recapture of funding agreements by General American and
possible private placement of common stock with Metropolitan Life Insurance
Company.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: October 12, 1999 REINSURANCE GROUP OF AMERICA,
INCORPORATED
By: /s/ Jack B. Lay
Name: Jack B. Lay
Title: Executive Vice President
and Chief Financial Officer
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EXHIBIT 99.1
[REINSURANCE GROUP OF AMERICA, INCORPORATED LETTERHEAD]
NEWS
For further information, contact
Jack B. Lay
Executive Vice President and
Chief Financial Officer
636/736-7439
FOR IMMEDIATE RELEASE
REINSURANCE GROUP OF AMERICA
ANNOUNCES RECAPTURE OF FUNDING AGREEMENTS
ST. LOUIS, October 1, 1999 - Reinsurance Group of America, Incorporated
(NYSE:RGA) announced today that General American Life Insurance Company, its
majority shareholder, recaptured the entire block of funding agreements
reinsured with the company. RGA previously reinsured approximately 25 percent of
General American's funding agreement business. General American recaptured
approximately $1.5 billion of these contracts from RGA, which no longer retains
any risk associated with funding agreements. RGA reported an after tax net
capital loss of approximately $26 million associated with the recapture
transaction.
General American Life Insurance Company sought state supervision when
it was unable to meet substantial demands for surrenders of its funding
agreement business. Late last month, General American announced it had reached a
definitive agreement with MetLife, whereby MetLife will acquire General
American, including its 53.5 percent equity position in RGA. That transaction,
which is subject to regulatory and court approval, is expected to close by the
end of the year.
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Add One
"General American's recapture of the funding agreements marks the close
of a difficult chapter in the history of RGA," remarked President and CEO A.
Greig Woodring. "We are glad this is now behind us. Reinsurance of funding
agreements was never an integral component of our operations, and we are
focusing on continuing the expansion of our life reinsurance business. We are
optimistic about the new affiliation with MetLife and see it as extremely
positive for our future growth."
Woodring further commented, "We continue to assess our capital needs,
and plan to complete a private placement of approximately $125 million in common
equity with MetLife in the next month. The parties have agreed in principle that
the transaction will be priced at the September 28 closing quoted share price of
26-1/8 for the RGA common stock. That equity placement, together with a moderate
amount of debt expected to be incurred in the first half of 2000, would address
the immediate capital needs associated with the growth of our primary
businesses. MetLife has expressed strong support for RGA, and wants to ensure
RGA has the capital it needs to independently continue its expansion efforts."
The shares of common stock proposed to be sold in the private placement
to MetLife will not be registered under the Securities Act of 1933 and may not
be offered or sold in the United States absent registration or an applicable
exemption from registration requirements. The private placement is subject to
execution of definitive agreements and subject to customary closing conditions.
Reinsurance Group of America, Incorporated, through its U.S. and
Canadian subsidiaries, RGA Reinsurance Company and RGA Life Reinsurance Company
of Canada, is one of the largest life reinsurers in North America. Reinsurance
Group of America, Incorporated also operates through offices or subsidiary
companies in Argentina, Australia, Barbados, Bermuda, Chile, Hong Kong, Japan,
Mexico, Taiwan, South Africa and the United Kingdom. Worldwide, it has more than
$390 billion of life reinsurance in force.
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