<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
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 1-11868
ZURICH REINSURANCE CENTRE, INC. (ZRC) 401(k) PLAN
(Full title of the plan and the address of the plan, if different from that of
the issuer named below)
ZURICH REINSURANCE CENTRE HOLDINGS, INC.
One Chase Manhattan Plaza, 43rd Floor, New York, New York 10005
(Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office)
<PAGE> 2
Audited Financial Statements and Schedules
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Years ended December 31, 1996 and 1995
with Report of Independent Auditors
<PAGE> 3
Audited Financial Statements and Schedules
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Years ended December 31, 1996 and 1995
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors.............................................. 1
Audited Financial Statements:
Statements of Net Assets Available for Plan Benefits................... 2
Statements of Changes in Net Assets Available for Plan Benefits........ 3
Notes to Financial Statements.......................................... 4
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes........................ 16
Schedule of Reportable Transactions.................................... 17
Index to Exhibits........................................................... 18
Signatures.................................................................. 19
</TABLE>
<PAGE> 4
Report of Independent Auditors
Board of Directors
Zurich Reinsurance Centre, Inc.
We have audited the accompanying statements of net assets available for plan
benefits of the Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan (the "Plan")
as of December 31, 1996 and 1995, and the related statements of changes in net
assets available for plan benefits for each of the three years in the period
ended December 31, 1996. 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 at December
31, 1996 and 1995, and the changes in its net assets available for plan benefits
for each of the three years in the period ended December 31, 1996, in conformity
with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1996, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The fund information in
Footnote 4 of the financial statements 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 for each fund. The
supplemental schedules and fund information have been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ ERNST & YOUNG LLP
Stamford, Connecticut
June 23, 1997
1
<PAGE> 5
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
DECEMBER 31,
1996 1995
----------------------------
<S> <C> <C>
Investments, at market value $6,590,489 $4,461,056
Loans to participants 308,601 187,174
---------- ----------
6,899,090 4,648,230
Employer and employee contributions receivable -- 58,408
---------- ----------
Net assets available for plan benefits $6,899,090 $4,706,638
========== ==========
</TABLE>
See Notes to Financial Statements
2
<PAGE> 6
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Statements of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1996 1995 1994
---------------------------------------------------
<S> <C> <C> <C>
Contributions:
Employee (including rollovers) $ 1,530,897 $ 1,318,547 $ 2,249,732
Employer 613,670 515,866 405,239
----------- ----------- -----------
Total contributions 2,144,567 1,834,413 2,654,971
----------- ----------- -----------
Investment income:
Interest and dividends 334,505 193,583 165,959
Net realized and unrealized appreciation (depreciation) 534,554 316,842 (205,773)
----------- ----------- -----------
Total investment income (loss) 869,059 510,425 (39,814)
----------- ----------- -----------
Total additions 3,013,626 2,344,838 2,615,157
----------- ----------- -----------
Benefits paid to participants (821,174) (203,648) (49,709)
----------- ----------- -----------
Net increase during period 2,192,452 2,141,190 2,565,448
Net assets available for plan benefits, beginning of period 4,706,638 2,565,448 --
----------- ----------- -----------
Net assets available for plan benefits, end of period $ 6,899,090 $ 4,706,638 $ 2,565,448
=========== =========== ===========
</TABLE>
See Notes to Financial Statements
3
<PAGE> 7
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Notes to Financial Statements
NOTE 1 - DESCRIPTION OF THE PLAN
The following description of the Zurich Reinsurance Centre, Inc. (ZRC) 401(k)
Plan (the "Plan") provides only general information. Participants should refer
to the Plan document for a more complete description of the Plan's provisions.
GENERAL
The Plan is a qualified defined contribution plan covering all full-time
employees of Zurich Reinsurance Centre, Inc. (the "Company") who have completed
three full calendar months of eligibility service and attained age twenty-one.
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA").
The Plan was adopted effective as of January 1, 1994 and subsequently amended
effective July 1, 1995 to reflect the change in the custodian to Fidelity
Management Trust Company ("Fidelity"). Prior to such amendment, Merrill Lynch
Trust Company ("Merrill Lynch") was the custodian of the Plan.
Effective April 1995, Zurich Reinsurance Centre Holdings, Inc. ("ZRCH") acquired
Re Capital Corporation. As a result of this transaction, the Plan was further
amended effective July 1, 1995 to merge the Re Capital Corporation Employee
Savings Plan, a qualified plan under Section 401(a) of the Internal Revenue
Code, with and into the Plan.
Prior to January 1, 1994, the employees of the Company participated in Zurich
Insurance Company U.S. Branch's contributory defined contribution plan. During
1994, participants of that plan made rollover contributions into the Plan of
$1,077,900.
CONTRIBUTIONS
Pursuant to Section 401(k) of the Internal Revenue Code, eligible employees of
the Company are able to contribute from 1% to 12% of their pre-tax annual
salaries subject to maximum contributions for 1996 of $9,500 (adjusted annually
for inflation). Subject to limitations under applicable law, the Company matches
up to 100% of the first 3% of annual salary contributed by employees and 50% of
the next 3% of salary so contributed. Participants may also contribute amounts
representing rollovers of distributions from other tax qualified plans sponsored
by their previous employers.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of the Company's contributions and Plan earnings. Allocations are
based on participant earnings or account balances, as defined. Forfeited
balances of terminated participants' non-vested accounts are used to offset Plan
expenses and/or to reduce future Company contributions. There were no such
offsets to expenses or contributions recorded in 1994, 1995 or 1996. As of
December 31, 1996, the amount of forfeitures transferred to the
4
<PAGE> 8
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Notes to Financial Statements - continued
Fidelity Managed Income Portfolio (included in Net transfers among funds in Note
4) that can be used to reduce future Company contributions was $119,050. These
forfeitures were used during the first quarter of 1997. The benefit to which a
participant is entitled is the participant's vested account balance.
VESTING
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company contribution portion of their accounts plus
actual earnings thereon is based on years of service as defined in the Plan and
vest 20% for each completed year of service.
INVESTMENT OPTIONS
As of July 1, 1995, a participant may direct employer and employee contributions
in any of the following investment options maintained by Fidelity:
Fidelity Fund - Funds are invested mainly in common stocks of large well
established companies in a variety of industries and seeks long-term
capital growth.
Fidelity Growth Company Fund - Funds are invested primarily in common stock
and securities convertible into common stock and seeks long-term capital
appreciation.
Fidelity Intermediate Bond Fund - Funds are invested primarily in
investment-grade fixed income obligations and seeks high current income.
Fidelity Asset Manager Portfolio - Funds are allocated within the following
investment parameters: 30%-70% in stocks, 20%-60% in bonds and 0%-50% in
short-term instruments. The fund seeks high total return with reduced risk
over the long-term, and may invest in foreign securities which meet the
fund's objectives.
Fidelity Managed Income Portfolio - Funds are invested in investment
contracts and money market instruments and seeks the preservation of
capital and high current income.
Fidelity Worldwide Fund - Funds are invested in common stocks of companies
anywhere in the world, including the United States, and seeks long-term
capital appreciation.
Fidelity Spartan U.S. Equity Index Portfolio - Funds are invested in common
stocks and attempts to duplicate the composition and total return of the
S&P 500.
ZRC Unitized Stock Fund - Funds are invested primarily in the common stock
of Zurich Reinsurance Centre Holdings, Inc. with a small percentage
invested in high quality money market instruments to allow exchanges, loans
and withdrawals on a daily basis.
5
<PAGE> 9
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Notes to Financial Statements - continued
Prior to July 1, 1995, the investment options of the Plan were maintained by
Merrill Lynch as follows:
Merrill Lynch Capital Fund - Funds are invested in stocks, debt, and
convertible securities and seeks the highest possible total investment
return.
Merrill Lynch Corporate Bond Fund - Funds are invested in long-term
corporate bonds rated A or better by Standard and Poor's and seeks high
current income.
Merrill Lynch Global Allocation Fund - Funds are invested in U.S. and
foreign equity securities, bonds and money market instruments and seeks
high total investment return.
Merrill Lynch International Equity Fund - Funds are invested in foreign
equity securities and seeks capital appreciation.
Merrill Lynch Phoenix Fund - Funds are invested in undervalued equity and
fixed income securities and seeks long-term capital growth.
Merrill Lynch Retirement Preservation Trust - Funds are invested in a
diversified portfolio of U.S. Government Agency securities, guaranteed
investment contracts, and high-quality money market instruments and seeks
high current income consistent with preservation of capital and liquidity.
At December 31, 1996, there was a total of 225 participants in the Plan. The
number of participants (including terminated employees still participating in
the Plan) invested in each of the investment funds or with an outstanding loan
balance in the Loan Fund (see "Loans to Participants" below) is as follows:
Fidelity Fund 141
Fidelity Growth Company Fund 176
Fidelity Intermediate Bond Fund 63
Fidelity Asset Manager Portfolio 81
Fidelity Managed Income Portfolio 47
Fidelity Worldwide Fund 90
Fidelity Spartan U.S. Equity Index Portfolio 136
ZRC Unitized Stock Fund 69
Loan Fund 34
The total number of participants in the Plan are less than the sum of the number
of participants shown above because many participate in more than one fund.
LOANS TO PARTICIPANTS
Participants may borrow from their fund accounts a minimum of $1,000, up to a
maximum of 50% of their vested account balance not to exceed $50,000. Loan
transactions are treated as a transfer from the
6
<PAGE> 10
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Notes to Financial Statements - continued
investment funds to the Loan Fund. Loan terms are from one to five years unless
the loan is used to acquire a principal residence. The loans are secured by the
balance in the participant's account and bear interest at a rate commensurate
with current interest rates charged for loans made under similar circumstances
by persons in the business of lending money. Principal and interest is paid
through semi-monthly payroll deductions and deposited in the participant's
account.
PAYMENT OF BENEFITS
On termination of service, a participant will receive a lump-sum amount equal to
the vested value of his or her account unless he or she elects to maintain his
or her account balance in the Plan.
WITHDRAWALS
Withdrawals can only be made under certain circumstances, including early or
normal retirement, death, disability, termination of employment, hardship (as
defined under the Internal Revenue Code) and the attainment of 59 1/2 years of
age. A participant who has attained age 59 1/2 may withdraw in cash all or a
portion of his or her employee contributions and the vested portion of employer
contributions, provided that withdrawing his or her employer contributions does
not cause the Plan to be in violation of the non-discrimination rules for
employee benefit plans, as defined under the Internal Revenue Code.
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES
INVESTMENT VALUATION
The Plan's investments in the Fidelity and Merrill Lynch funds are stated at the
quoted market prices of the funds. The market value of the ZRC Unitized Stock
Fund is based primarily on the closing price of the stock of Zurich Reinsurance
Centre Holdings, Inc. as reported on the New York Stock Exchange.
Interest income, which includes interest on loans to participants, is recorded
as earned. Dividend income is recognized on the ex-dividend date. Purchases and
sales of investments are accounted for on the trade date. Realized gains or
losses on sales of investments are determined using the weighted average cost
method. Changes in net unrealized appreciation or depreciation of investments
are reflected in the statement of changes in net assets available for plan
benefits.
ADMINISTRATIVE EXPENSES
All administrative expenses incurred in connection with the operation of the
Plan are paid by the Company, with the exception of loan administrative fees
that are deducted directly from participant accounts. These fees were not
material for any of the periods presented and are reflected as benefits paid to
participants in the statements of changes in net assets available for plan
benefits.
7
<PAGE> 11
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Notes to Financial Statements - continued
NOTE 3 - INVESTMENTS
The Plan's investments and Loan Fund at market value and cost, and the
percentage of each investment and Loan Fund to total net assets (exclusive of
contributions receivable), including those that represented more than 5% of the
net assets of the Plan were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-------------------------------------------
% OF
MARKET NET ASSETS COST
---------- ---------- ----------
<S> <C> <C> <C>
Fidelity Fund $1,217,897 18 $1,134,141
Fidelity Growth Company Fund 1,802,092 26 1,694,235
Fidelity Intermediate Bond Fund 370,027 5 374,317
Fidelity Asset Manager Portfolio 475,770 7 460,147
Fidelity Managed Income Portfolio 603,656 9 603,656
Fidelity Worldwide Fund 594,370 9 544,064
Fidelity Spartan U.S. Equity Index Portfolio 1,279,626 18 1,069,126
ZRC Unitized Stock Fund 247,051 4 236,811
---------- --- ----------
Total investments 6,590,489 96 6,116,497
Loan Fund 308,601 4 308,601
---------- --- ----------
Net assets $6,899,090 100 $6,425,098
========== === ==========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1995
-------------------------------------------
% OF
MARKET NET ASSETS COST
---------- ---------- ----------
<S> <C> <C> <C>
Fidelity Fund $ 745,481 16 $ 734,655
Fidelity Growth Company Fund 1,217,707 26 1,247,014
Fidelity Intermediate Bond Fund 258,736 6 255,481
Fidelity Asset Manager Portfolio 290,545 6 283,681
Fidelity Managed Income Portfolio 434,815 10 434,815
Fidelity Worldwide Fund 386,962 8 390,846
Fidelity Spartan U.S. Equity Index Portfolio 1,027,673 22 978,078
ZRC Unitized Stock Fund 99,137 2 94,518
---------- --- ----------
Total investments 4,461,056 96 4,419,088
Loan Fund 187,174 4 187,174
---------- --- ----------
Net assets $4,648,230 100 $4,606,262
========== === ==========
</TABLE>
8
<PAGE> 12
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Notes to Financial Statements - continued
Net realized and unrealized appreciation (depreciation) in the fair value of
investments during the years ended December 31, 1996, 1995 and 1994 were as
follows (all investments prior to July 1, 1995 were maintained by Merrill Lynch
and subsequent to July 1, 1995 by Fidelity):
<TABLE>
<CAPTION>
JANUARY 1 - JULY 1 -
DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Fidelity Fund $ 88,316 $ 11,026
Fidelity Growth Company Fund 162,782 (29,399)
Fidelity Intermediate Bond Fund (5,269) 3,298
Fidelity Asset Manager Portfolio 12,455 6,868
Fidelity Managed Income Portfolio -- --
Fidelity Worldwide Fund 59,293 (4,200)
Fidelity Spartan U.S. Equity Index Portfolio 210,430 49,797
ZRC Unitized Stock Fund 6,547 4,562
--------- --------
$ 534,554 $ 41,952
========= ========
</TABLE>
<TABLE>
<CAPTION>
JANUARY 1 - JANUARY 1 -
JUNE 30, 1995 DECEMBER 31, 1994
------------- -----------------
<S> <C> <C>
Merrill Lynch Capital Fund $ 78,023 $ (27,572)
Merrill Lynch Corporate Bond Fund 22,959 (7,839)
Merrill Lynch Global Allocation Fund 82,535 (53,088)
Merrill Lynch International Equity Fund (3,377) (38,425)
Merrill Lynch Phoenix Fund 94,750 (78,849)
Merrill Lynch Retirement Preservation Trust -- --
--------- ---------
$ 274,890 $(205,773)
========= =========
</TABLE>
NOTE 4 - NET ASSETS AVAILABLE FOR PLAN BENEFITS AND CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
The following summarizes the activity in the separate funds and in total for the
years ended December 31, 1996, 1995 and 1994, as it relates to the increase
(decrease) in net assets available for plan benefits (all investments prior to
July 1, 1995 were maintained by Merrill Lynch and subsequent to July 1, 1995 by
Fidelity):
9
<PAGE> 13
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Notes to Financial Statements - continued
<TABLE>
<CAPTION>
Fidelity
Growth Fidelity Fidelity Asset
Fidelity Company Intermediate Manager
Fund Fund Bond Fund Portfolio
----------- ----------- ------------ --------------
<S> <C> <C> <C> <C>
Net assets available for plan benefits
at January 1, 1996 $ 755,807 $ 1,234,237 $ 262,686 $ 295,289
Contributions:
Employee (including rollovers) 289,510 455,822 108,628 145,583
Employer 111,042 181,119 41,331 47,076
Investment Income:
Interest and dividends 99,475 82,396 25,194 36,135
Net realized and unrealized
appreciation (depreciation) 88,316 162,782 (5,269) 12,455
Loan repayments 4,736 8,839 2,749 1,845
----------- ----------- --------- ---------
593,079 890,958 172,633 243,094
Benefits paid to participants (234,296) (221,271) (132,625) (2,897)
Loans to participants (38,158) (24,333) (12,909) (36,002)
Net transfers among funds 141,465 (77,499) 80,242 (23,714)
----------- ----------- --------- ---------
Net increase during period 462,090 567,855 107,341 180,481
----------- ----------- --------- ---------
Net assets available for plan benefits at
December 31, 1996 $ 1,217,897 $ 1,802,092 $ 370,027 $ 475,770
=========== =========== ========= =========
</TABLE>
<TABLE>
<CAPTION>
Fidelity
Fidelity Spartan U.S. ZRC
Managed Fidelity Equity Unitized
Income Worldwide Index Stock
Portfolio Fund Portfolio Fund
--------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net assets available for plan benefits
at January 1, 1996 $ 439,726 $ 392,495 $ 1,037,554 $ 101,670
Contributions:
Employee (including rollovers) 108,623 116,357 241,832 64,542
Employer 32,977 58,938 105,915 35,272
Investment Income:
Interest and dividends 32,556 22,214 36,083 452
Net realized and unrealized
appreciation (depreciation) -- 59,293 210,430 6,547
Loan repayments 2,571 3,530 5,738 2,069
--------- --------- ----------- ---------
176,727 260,332 599,998 108,882
Benefits paid to participants (45,708) (25,676) (145,858) (2,018)
Loans to participants (19,945) (3,581) (27,420) (1,981)
Net transfers among funds 52,856 (29,200) (184,648) 40,498
--------- --------- ----------- ---------
Net increase during period 163,930 201,875 242,072 145,381
--------- --------- ----------- ---------
Net assets available for plan benefits at
December 31, 1996 $ 603,656 $ 594,370 $ 1,279,626 $ 247,051
========= ========= =========== =========
</TABLE>
<TABLE>
<CAPTION>
Loan
Fund Total
----------- -----------
<S> <C> <C>
Net assets available for plan benefits
at January 1, 1996 $ 187,174 $ 4,706,638
Contributions:
Employee (including rollovers) -- 1,530,897
Employer -- 613,670
Investment Income:
Interest and dividends -- 334,505
Net realized and unrealized
appreciation (depreciation) -- 534,554
Loan repayments (32,077) --
----------- -----------
(32,077) 3,013,626
Benefits paid to participants (10,825) (821,174)
Loans to participants 164,329 --
Net transfers among funds -- --
----------- -----------
Net increase during period 121,427 2,192,452
----------- -----------
Net assets available for plan benefits at
December 31, 1996 $ 308,601 $ 6,899,090
=========== ===========
</TABLE>
10
<PAGE> 14
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Notes to Financial Statements - continued
<TABLE>
<CAPTION>
Fidelity Fidelity
Growth Fidelity Asset
Fidelity Company Intermediate Manager
Fund Fund Bond Fund Portfolio
--------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
Net assets available for plan benefits at
July 1, 1995 held by Fidelity (transferred
in from Merrill Lynch) $ 508,959 $ 858,750 $ 178,234 $ 204,310
Contributions:
Employee (including rollovers) 154,327 256,862 53,180 61,480
Employer 57,313 88,449 21,107 26,776
Investment Income:
Interest and dividends 40,710 69,430 7,694 7,094
Net realized and unrealized
appreciation (depreciation) 11,026 (29,399) 3,298 6,868
Loan repayments 869 1,422 1,158 487
--------- ----------- --------- ---------
264,245 386,764 86,437 102,705
Benefits paid to participants (1,459) (8,391) -- --
Loans to participants (16,641) (3,000) (1,822) (6,485)
Net transfers among funds 703 114 (163) (5,241)
--------- ----------- --------- ---------
Net increase (decrease) during period 246,848 375,487 84,452 90,979
--------- ----------- --------- ---------
Net assets available for plan benefits at
December 31, 1995 held by Fidelity $ 755,807 $ 1,234,237 $ 262,686 $ 295,289
========= =========== ========= =========
</TABLE>
<TABLE>
<CAPTION>
Fidelity
Fidelity Spartan U.S. ZRC
Managed Fidelity Equity Unitized
Income Worldwide Index Stock
Portfolio Fund Portfolio Fund
--------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net assets available for plan benefits at
July 1, 1995 held by Fidelity (transferred
in from Merrill Lynch) $ 449,375 $ 273,618 $ 749,268 $ 64,342
Contributions:
Employee (including rollovers) 69,275 98,844 158,462 30,292
Employer 26,341 28,385 56,241 11,462
Investment Income:
Interest and dividends 15,755 9,520 24,267 1,126
Net realized and unrealized
appreciation (depreciation) -- (4,200) 49,797 4,562
Loan repayments 1,090 1,068 1,538 376
--------- --------- ----------- ---------
112,461 133,617 290,305 47,818
Benefits paid to participants (124,326) (15,549) (676) (6,343)
Loans to participants -- -- (7,052) --
Net transfers among funds 2,216 809 5,709 (4,147)
--------- --------- ----------- ---------
Net increase (decrease) during period (9,649) 118,877 288,286 37,328
--------- --------- ----------- ---------
Net assets available for plan benefits at
December 31, 1995 held by Fidelity $ 439,726 $ 392,495 $ 1,037,554 $ 101,670
========= ========= =========== =========
</TABLE>
<TABLE>
<CAPTION>
Loan
Fund Total
----------- -----------
<S> <C> <C>
Net assets available for plan benefits at
July 1, 1995 held by Fidelity (transferred
in from Merrill Lynch) $ 160,182 $ 3,447,038
Contributions:
Employee (including rollovers) -- 882,722
Employer -- 316,074
Investment Income:
Interest and dividends -- 175,596
Net realized and unrealized
appreciation (depreciation) -- 41,952
Loan repayments (8,008) --
----------- -----------
(8,008) 1,416,344
Benefits paid to participants -- (156,744)
Loans to participants 35,000 --
Net transfers among funds -- --
----------- -----------
Net increase (decrease) during period 26,992 1,259,600
----------- -----------
Net assets available for plan benefits at
December 31, 1995 held by Fidelity $ 187,174 $ 4,706,638
=========== ===========
</TABLE>
11
<PAGE> 15
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Notes to Financial Statements - continued
<TABLE>
<CAPTION>
Merrill Lynch
Merrill Lynch Global Merrill Lynch
Merrill Lynch Corporate Allocation International Merrill Lynch
Capital Fund Bond Fund Fund Equity Fund Phoenix Fund
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net assets available for plan benefits at
January 1, 1995 held by Merrill Lynch $ 459,385 $ 199,918 $ 668,976 $ 467,232 $ 504,456
Contributions:
Employee (including rollovers) 79,081 40,832 100,714 82,215 84,501
Employer 35,335 18,753 46,698 34,264 42,375
Investment Income:
Interest and dividends 787 9,236 536 416 536
Net realized and unrealized
appreciation (depreciation) 78,023 22,959 82,535 (3,377) 94,750
Loan repayments 1,090 827 743 577 742
--------- --------- --------- --------- ---------
194,316 92,607 231,226 114,095 222,904
Benefits paid to participants (4,866) (204) (11,911) (16,406) (12,911)
Loans to participants (10,672) (7,720) (23,332) (12,747) (9,189)
Net transfers among funds 8,399 13,764 (53,635) (18,245) (16,366)
--------- --------- --------- --------- ---------
Net increase during period 187,177 98,447 142,348 66,697 184,438
--------- --------- --------- --------- ---------
Balance at June 30, 1995 646,562 298,365 811,324 533,929 688,894
--------- --------- --------- --------- ---------
Transfers to Fidelity (646,562) (298,365) (811,324) (533,929) (688,894)
--------- --------- --------- --------- ---------
Net assets available for plan benefits at
July 1, 1995 held by Merrill Lynch $ -- $ -- $ -- $ -- $ --
</TABLE>
<TABLE>
<CAPTION>
Merrill Lynch
Retirement
Preservation Loan
Trust Fund Total
--------- --------- -----------
<S> <C> <C> <C>
Net assets available for plan benefits at
January 1, 1995 held by Merrill Lynch $ 164,548 $ 100,933 $ 2,565,448
Contributions:
Employee (including rollovers) 48,482 -- 435,825
Employer 22,367 -- 199,792
Investment Income:
Interest and dividends 6,476 -- 17,987
Net realized and unrealized
appreciation (depreciation) -- -- 274,890
Loan repayments 432 (4,411) --
--------- --------- -----------
77,757 (4,411) 928,494
Benefits paid to participants (606) -- (46,904)
Loans to participants -- 63,660 --
Net transfers among funds 66,083 -- --
--------- --------- -----------
Net increase during period 143,234 59,249 881,590
--------- --------- -----------
Balance at June 30, 1995 307,782 160,182 3,447,038
--------- --------- -----------
Transfers to Fidelity (307,782) (160,182) (3,447,038)
--------- --------- -----------
Net assets available for plan benefits at
July 1, 1995 held by Merrill Lynch $ -- $ -- $ --
</TABLE>
12
<PAGE> 16
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Notes to Financial Statements - continued
<TABLE>
<CAPTION>
Merrill Lynch
Merrill Lynch Global Merrill Lynch
Merrill Lynch Corporate Allocation International Merrill Lynch
Capital Fund Bond Fund Fund Equity Fund Phoenix Fund
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at January 1, 1994 $ -- $ -- $ -- $ -- $ --
Contributions:
Employee (including rollovers) 428,599 176,866 598,549 424,827 477,308
Employer 62,254 36,252 104,907 69,487 78,250
Investment Income:
Interest and dividends 30,723 7,523 36,163 28,289 53,769
Net realized and unrealized
depreciation (27,572) (7,839) (53,088) (38,425) (78,849)
Loan repayments 635 453 931 267 423
--------- --------- --------- --------- ---------
494,639 213,255 687,462 484,445 530,901
Benefits paid to participants (4,437) (3,496) (5,550) (2,082) (1,895)
Loans to participants (30,168) (18,117) (13,183) (10,632) (19,237)
Net transfers among funds (649) 8,276 247 (4,499) (5,313)
--------- --------- --------- --------- ---------
Net increase during period 459,385 199,918 668,976 467,232 504,456
--------- --------- --------- --------- ---------
Net assets available for plan
benefits at December 31, 1994 $ 459,385 $ 199,918 $ 668,976 $ 467,232 $ 504,456
========= ========= ========= ========= =========
<CAPTION>
Merrill Lynch
Retirement
Preservation Loan
Trust Fund Total
----------- --------- -----------
<S> <C> <C> <C>
Net assets available for plan
benefits at January 1, 1994 $ -- $ -- $ --
Contributions:
Employee (including rollovers) 143,583 -- 2,249,732
Employer 54,089 -- 405,239
Investment Income:
Interest and dividends 9,492 -- 165,959
Net realized and unrealized
depreciation -- -- (205,773)
Loan repayments 188 (2,897) --
--------- ----------- -----------
207,352 (2,897) 2,615,157
Benefits paid to participants (32,249) -- (49,709)
Loans to participants (12,493) 103,830 --
Net transfers among funds 1,938 -- --
--------- ----------- -----------
Net increase during period 164,548 100,933 2,565,448
--------- ----------- -----------
Net assets available for plan
benefits at December 31, 1994 $ 164,548 $ 100,933 $ 2,565,448
========= =========== ===========
</TABLE>
13
<PAGE> 17
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Notes to Financial Statements - continued
NOTE 5 - 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,
participants will become 100% vested in their accounts.
NOTE 6 - INCOME TAX STATUS
The Internal Revenue Service ruled on July 5, 1996 that the Plan qualifies under
Section 401(a) of the Internal Revenue Code ("IRC") and, therefore, the related
trust is not subject to tax under present income tax law. The Plan is required
to operate in conformity with the IRC to maintain its qualification. The Plan
Administrator, Zurich Reinsurance Centre, Inc. is not aware of any course of
actions or series of events that have occurred that might adversely affect the
Plan's qualified status.
NOTE 7 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for plan benefits per
the financial statements to the Form 5500:
<TABLE>
<CAPTION>
DECEMBER 31,
1996 1995
-----------------------------
<S> <C> <C>
Net assets available for plan benefits per the financial statements $6,899,090 $ 4,706,638
Amounts allocated to withdrawing participants -- (9,294)
---------- -----------
Net assets available for plan benefits per Form 5500 $6,899,090 $ 4,697,344
========== ===========
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
----------------------------
<S> <C>
Benefits paid to participants per the financial statements $ 821,174
Less: Amounts allocated to withdrawing participants
at December 31, 1995 (9,294)
---------
Benefits paid to participants per the Form 5500 $ 811,880
=========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31, but not yet paid as of that date.
NOTE 8 - SUBSEQUENT EVENT
On April 17, 1997, ZRCH entered into a definitive agreement to merge with a
subsidiary of the Zurich Group, its 65.7% shareholder. Under the agreement,
which was approved by unanimous vote of ZRCH's Board of Directors, ZRCH's public
shareholders, including participants in the ZRC Unitized Stock Fund, will
receive cash consideration at closing of $39.50 per share. The agreement
contains terms and conditions customary in transactions of this type including
provisions relating to approval of the transaction by ZRCH's shareholders and
certain regulatory consents. The transaction is expected to close during the
third quarter of 1997.
14
<PAGE> 18
SUPPLEMENTAL SCHEDULES
15
<PAGE> 19
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Schedule of Assets Held for Investment Purposes
December 31, 1996
<TABLE>
<CAPTION>
FACE VALUE/NUMBER MARKET
OF SHARES VALUE COST
------------------------------------------------
<S> <C> <C> <C>
Fidelity Fund 49,308 $1,217,897 $1,134,141
Fidelity Growth Company Fund 44,540 1,802,092 1,694,235
Fidelity Intermediate Bond Fund 36,709 370,027 374,317
Fidelity Asset Manager Portfolio 28,887 475,770 460,147
Fidelity Managed Income Portfolio 603,656 603,656 603,656
Fidelity Worldwide Fund 38,621 594,370 544,064
Fidelity Spartan U.S. Equity Index Portfolio 47,481 1,279,626 1,069,126
ZRC Unitized Stock Fund 22,377 247,051 236,811
---------- ----------
Total Investments 6,590,489 6,116,497
Loan Fund 308,601 308,601
---------- ----------
Net Assets Available for Plan Benefits $6,899,090 $6,425,098
========== ==========
</TABLE>
16
<PAGE> 20
Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan
Schedule of Reportable Transactions
<TABLE>
<CAPTION>
CURRENT
NUMBER OF PURCHASE COST OF VALUE NET
FUND TRANSACTIONS PRICE ASSETS (PROCEEDS) GAIN
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
</TABLE>
CATEGORY (i) - SINGLE SECURITY TRANSACTIONS AGGREGATING MORE THAN 5% OF THE
CURRENT VALUE OF PLAN ASSETS AT THE BEGINNING OF THE YEAR:
NONE.
CATEGORY (ii) - SERIES OF TRANSACTIONS INVOLVING PROPERTY OTHER THAN
SECURITIES, WITH, OR IN CONJUNCTION WITH, THE SAME PERSON,
WHICH AMOUNT IN THE AGGREGATE TO MORE THAN 5% OF THE CURRENT
VALUE OF PLAN ASSETS AT THE BEGINNING OF THE YEAR:
NONE.
CATEGORY (iii) - SERIES OF SECURITIES TRANSACTIONS WITH RESPECT TO SECURITIES
OF THE SAME ISSUE WHICH AMOUNT IN THE AGGREGATE TO MORE THAN
5% OF THE CURRENT VALUE OF PLAN ASSETS AT THE BEGINNING OF THE
YEAR:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Fidelity Fund 30 $ 318,978 $ 334,363 $ 15,385
Fidelity Fund 75 $ 718,463 718,463
Fidelity Growth Company Fund 36 379,712 405,327 25,615
Fidelity Growth Company Fund 86 826,934 826,934
Fidelity Intermediate Bond Fund 25 169,011 171,288 2,277
Fidelity Intermediate Bond Fund 68 287,848 287,848
Fidelity Asset Manager Portfolio 19 69,983 73,677 3,694
Fidelity Asset Manager Portfolio 53 246,449 246,449
Fidelity Managed Income Portfolio 24 216,083 216,083 --
Fidelity Managed Income Portfolio 60 384,924 384,924
Fidelity Worldwide Fund 24 100,217 105,319 5,102
Fidelity Worldwide Fund 62 253,434 253,434
Fidelity Spartan U.S. Equity Index Portfolio 35 345,746 395,272 49,526
Fidelity Spartan U.S. Equity Index Portfolio 78 436,795 436,795
</TABLE>
CATEGORY (iv) - SINGLE SECURITY TRANSACTIONS WITH, OR IN CONJUNCTION WITH, A
PERSON, IF ANY PRIOR OR SUBSEQUENT SINGLE SECURITY
TRANSACTIONS WITH SUCH PERSON, AMOUNT IN THE AGGREGATE TO MORE
THAN 5% OF THE CURRENT VALUE OF PLAN ASSETS AT THE BEGINNING
OF THE YEAR:
NONE.
17
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit Page
------ ---------------------- ----
<S> <C> <C>
23 Consent of Ernst & Young LLP, Independent Auditors 20
</TABLE>
18
<PAGE> 22
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan Administrator has duly caused this annual report to be signed on its
behalf by the undersigned, hereunto duly authorized.
ZURICH REINSURANCE CENTRE, INC. (ZRC)
401(k) PLAN
-------------------------------------------------
(Name of Plan)
Date: June 26, 1997 By: /s/ Karen O'Connor Rubsam
----------------------------------------------
Karen O'Connor Rubsam
Senior Vice President, Chief Financial Officer
and Treasurer of Zurich Reinsurance Centre,
Inc. (the Plan Administrator)
19
<PAGE> 1
Exhibit 23
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-93390) pertaining to the Zurich Reinsurance Centre, Inc. (ZRC) 401(k)
Plan of our report dated June 23, 1997, with respect to the financial statements
and schedules of the Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan included
in the Plan's Annual Report (Form 11-K) for the year ended December 31, 1996.
/s/ ERNST & YOUNG LLP
Stamford, Connecticut
June 26, 1997
20
