FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1999 or
TRANSITION REPORT PURSUANT TO SECTION
13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number: 33-64820
AMERICO LIFE, INC.
(exact name of registrant as specified in its charter)
MISSOURI
(State of other jurisdiction of incorporation or organization)
43-1627599
(I.R.S. Employer Identification No.)
1055 BROADWAY
KANSAS CITY, MISSOURI 64105
(Address of principal executive offices)
(816) 391-2000
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class and Title of Shares Outstanding
Capital Stock as of May 13, 1999
------------- ------------------
Common Stock $1.00 Par Value 10,000
<PAGE>
AMERICO LIFE, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEET
(In thousands - unaudited)
<TABLE>
March 31, December 31,
1999 1998
---- ----
<S> <C> <C>
Assets
Investments:
Fixed maturities:
Held to maturity, at amortized cost (market: $875,568 and
$914,672) $ 855,108 $ 876,594
Available for sale, at market (amortized cost: $903,815 and
$893,664) 913,326 925,191
Equity securities, at market (cost: $69,140 and $42,201) 105,933 89,022
Investment in equity subsidiaries 10,439 9,669
Mortgage loans on real estate, net 196,833 190,074
Investment real estate, net 28,609 28,606
Policy loans 208,855 210,173
Other invested assets 16,867 17,066
----------- -----------
Total investments 2,335,970 2,346,395
Cash and cash equivalents 86,770 68,219
Accrued investment income 33,640 31,862
Amounts receivable from reinsurers 1,188,389 1,207,197
Other receivables 59,578 36,529
Deferred policy acquisition costs 145,105 131,574
Cost of business acquired 240,873 247,125
Amounts due from affiliate 4,508 -
Other assets 38,424 36,913
----------- -----------
Total assets $ 4,133,257 $ 4,105,814
=========== ===========
Liabilities and stockholder's equity
Policyholder account balances $ 2,502,084 $ 2,501,113
Reserves for future policy benefits 827,613 833,917
Unearned policy revenues 39,948 36,332
Policy and contract claims 44,814 45,467
Other policyholder funds 118,592 106,241
Notes payable 133,042 132,533
Amounts payable to reinsurers 36,839 28,199
Deferred income taxes 56,375 63,600
Due to broker 68,610 36,275
Amounts due to affiliates - 3,085
Other liabilities 62,159 61,872
----------- -----------
Total liabilities 3,890,076 3,848,634
Stockholder's equity:
Common stock ($1 par value; 30,000 shares authorized,
10,000 shares issued and outstanding) 10 10
Additional paid-in capital 3,745 3,745
Accumulated other comprehensive income 46,234 60,499
Retained earnings 193,192 192,926
----------- -----------
Total stockholder's equity 243,181 257,180
----------- -----------
Commitments and contingencies
Total liabilities and stockholder's equity $ 4,133,257 $ 4,105,814
=========== ===========
</TABLE>
<PAGE>
AMERICO LIFE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share amounts - unaudited)
<TABLE>
Three Months
Ended March 31,
1999 1998
<S> <C> <C>
Income
Premiums and policy revenues $ 59,101 $ 53,972
Net investment income 58,432 56,087
Net realized investment gains (losses) (75) 461
Other income 1,677 1,084
----------- -----------
Total income 119,135 111,604
Benefits and expenses
Policyholder benefits:
Death benefits 36,576 29,899
Interest credited on universal life and annuity products 26,740 26,666
Other policyholder benefits 12,796 12,679
Change in reserves for future policy benefits (5,852) (5,977)
Commissions 3,171 3,139
Amortization expense 18,858 15,133
Interest expense 2,968 2,985
Other operating expenses 23,147 21,112
----------- -----------
Total benefits and expenses 118,404 105,636
----------- -----------
Income before provision for income taxes 731 5,968
Provision for income taxes (35) 1,899
----------- -----------
Net income $ 766 $ 4,069
=========== ===========
Net income per common share $ 76.60 $ 406.90
=========== ===========
</TABLE>
<PAGE>
AMERICO LIFE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands - unaudited)
<TABLE>
Three Months
Ended March 31,
1999 1998
<S> <C> <C>
Cash flows from operating activities
Net income $ 766 $ 4,069
---------- ----------
Adjustments to reconcile net income to net cash provided (used) by operating
activities:
Depreciation and amortization 23,841 17,516
Deferred policy acquisition costs (11,685) (9,566)
Undistributed earnings of equity subsidiaries (894) (335)
Distribution of earnings from equity subsidiaries - 6,750
Amortization of unrealized gains (2,591) (2,163)
(Increase) decrease in assets:
Accrued investment income (1,778) 45
Amounts receivable from reinsurers 18,808 (21,055)
Other receivables (476) 2,881
Other assets, net of amortization expense (3,023) (4,178)
Increase (decrease) in liabilities:
Policyholder account balances (21,214) (1,048)
Reserves for future policy benefits and unearned policy revenues (2,688) (19,774)
Policy and contract claims (653) 7
Other policyholder funds 12,352 4,651
Amounts payable to reinsurers 8,640 5,681
Provision for deferred income taxes 486 1,550
Federal income tax payable 11 204
Amounts due to affiliates (7,593) (7)
Other liabilities 274 10,571
Net realized losses (gains) on investments sold 75 (461)
Amortization on bonds and mortgage loans 2,650 (144)
Other changes (1,112) 445
----------- -----------
Total adjustments 13,430 (8,430)
----------- -----------
Net cash provided (used) by operating activities 14,196 (4,361)
----------- -----------
</TABLE>
(Continued)
<PAGE>
AMERICO LIFE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
(In thousands - unaudited)
<TABLE>
Three Months
Ended March 31,
1999 1998
<S> <C> <C>
Cash flows from investing activities
Purchases of fixed maturity investments $ (49,946) $ (39,988)
Purchases of other investments (31,005) (58,490)
Mortgage loans originated (14,175) (22,999)
Maturities or redemptions of fixed maturity investments 5,161 2,673
Sales of fixed maturity available for sale investments 53,757 51,863
Sales of other investments 7,954 31,347
Repayments from mortgage loans 7,418 5,026
Change in due from/to brokers 2,262 12,607
Change in policy loans 1,318 1,143
----------- -----------
Net cash used by investing activities (17,256) (16,818)
----------- -----------
Cash flows from financing activities
Receipts credited to policyholder account balances 86,234 67,049
Return of policyholder account balances (64,049) (52,181)
Repayments of notes payable (74) (27)
Dividends paid (500) (500)
----------- -----------
Net cash provided by financing activities 21,611 14,341
----------- -----------
Net increase (decrease) in cash and cash equivalents 18,551 (6,838)
----------- -----------
Cash and cash equivalents at beginning of period 68,219 36,859
----------- -----------
Cash and cash equivalents at end of period $ 86,770 $ 30,021
=========== ===========
</TABLE>
<PAGE>
AMERICO LIFE, INC. AND SUBSIDIARIES
13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 1999 and 1998
(In thousands, except per share amounts - unaudited)
The following notes should be read in conjunction with the notes to the
consolidated financial statements contained in the Americo Life, Inc. ("the
Company") December 31, 1998 Form 10-K as filed with the Securities and Exchange
Commission.
1. ACCOUNTING POLICIES
The unaudited consolidated financial statements as of March 31, 1999 and for the
three months ended March 31, 1999 and 1998 reflect all adjustments, consisting
of normal recurring adjustments, which are necessary for a fair statement of
financial position and results of operations on a basis consistent with
accounting principles described fully in Note 1 of the Company's December 31,
1998 consolidated financial statements. The results of operations for the three
months ended March 31, 1999 and 1998 are not necessarily indicative of the
expected results for the full year 1999, nor the results experienced for the
year 1998.
In December 1997, the American Institute of Certified Public Accountants
("AICPA") approved Statement of Position ("SOP") 97-3, "Accounting by Insurance
and Other Enterprises for Insurance-Related Assessments." SOP 97-3 provides
guidance for determining when an entity should recognize a liability for
guaranty-fund and other insurance-related assessments and a related asset for
assessments that may be recovered through future premium tax offsets. The SOP is
effective for financial statements for fiscal years beginning after December 15,
1998. The adoption of this SOP did not have a material effect on the
consolidated financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 provides guidance related to
the accounting for derivative instruments and hedging activities, focusing on
the recognition and measurement of derivative instruments. This statement is
effective for all fiscal quarters of all fiscal years beginning after June 15,
1999. Adoption of this accounting standard will not have a significant impact on
the consolidated financial statements of the Company.
2. STOCKHOLDER'S EQUITY
Comprehensive income (loss) for the three months ended March 31, 1999 and 1998
is as follows:
<TABLE>
1999 1998
---- ----
<S> <C> <C>
Net income $ 766 $ 4,069
Other comprehensive income (loss) (14,265) 144
--------- ---------
Comprehensive income (loss) $ (13,499) $ 4,213
========= =========
</TABLE>
<PAGE>
Following are the components of net unrealized investment gains which comprise
accumulated other comprehensive income:
<TABLE>
Three Months
March 31, December 31, Ended
1999 1998 March 31, 1999
---- ---- --------------
<S> <C> <C> <C>
Investment securities:
Fixed maturities available for sale $ 9,511 $ 29,200 $ (19,689)
Fixed maturities reclassified from
available for sale to held to maturity 33,918 36,509 (2,591)
Equity securities 40,164 47,172 (7,008)
----------- ----------- -----------
83,593 112,881 (29,288)
Effect on other balance sheet accounts (11,879) (21,019) 9,140
Deferred income taxes (25,480) (31,363) 5,883
----------- ----------- -----------
Net unrealized investment gains $ 46,234 $ 60,499 $ (14,265)
=========== =========== ===========
</TABLE>
During the three months ended March 31, 1999, the Company paid dividends to
Financial Holding Corporation (FHC) totaling $500.
3. COMMITMENTS AND CONTINGENCIES
The Company's subsidiary, Great Southern Life Insurance Company ("Great
Southern"), is a defendant in lawsuits filed as class actions and purported
class actions asserting claims related to sales practices of certain life
insurance products. The Company and Great Southern also are defendants with
other parties in a class action lawsuit brought by agents of one of Great
Southern's general agents alleging that they were defrauded into surrendering
renewal commissions in return for a promise of stock ownership in a company to
be taken public at some point in the future. The Company intends to defend these
cases vigorously. The amount of any liability that may arise as a result of
these cases, if any, cannot be reasonably estimated at this time and no
provision for loss has been made in the accompanying financial statements.
4. SEGMENT INFORMATION
The table below presents information about the reported revenues and income
before provision for income taxes for the Company's reportable segments as
defined in the Company's December 31, 1998 Form 10-K. Asset information by
segment is not reported, since the Company does not produce such information
internally.
<TABLE>
Life Insurance Asset Non-Life Reconciling Consolidated
Operations Accumulation Insurance Items Totals
Products Investments
Operations
March 31, March 31, March 31, March 31, March 31,
1999 1998 1999 1998 1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $105,242 $104,727 $ 8,882 $ 3,214 $ 1,409 $ 1,268 $ 3,602 $ 2,395 $119,135 $111,604
Income (loss)
before income 9,816 14,940 (77) 819 1,146 945 (10,154) (10,736) 731 5,968
taxes
</TABLE>
Significant reconciling items to amounts reported in the Company's consolidated
financial statements include net investment income and operating expenses not
allocated to segments, net realized investment gains (losses) not allocated to
segments and interest expense.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following discussion analyzes significant items affecting the results of
operations and the financial condition of the Company. In connection with the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995, the Company cautions readers regarding certain forward-looking statements
contained in this report and in any other statements made by, or on behalf of,
the Company, whether or not in future filings with the Securities and Exchange
Commission (the "SEC"). Forward-looking statements are statements not based on
historical information and which relate to future operations, strategies,
financial results, or other developments. Statements using verbs such as "plan",
"anticipate", "believe" or words of similar import generally involve
forward-looking statements. Without limiting the foregoing, forward-looking
statements include statements which represent the Company's beliefs concerning
future levels of sales and surrenders of the Company's products, investment
spreads and yields, or the earnings and profitability of the Company's
activities.
Forward-looking statements are necessarily based on estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond the Company's control
and many of which are subject to change. Whether or not actual results differ
materially from forward-looking statements may depend on numerous foreseeable
and unforeseeable developments. Some may be national in scope, such as general
economic conditions, changes in tax law and changes in interest rates. Some may
be related to the insurance industry generally, such as pricing competition,
regulatory developments and industry consolidation. Others may relate to the
Company specifically, such as credit, volatility and other risks associated with
the Company's investment portfolio. Investors are also directed to consider
other risks and uncertainties discussed in documents filed by the Company with
the SEC. The Company disclaims any obligation to update forward-looking
information. This discussion should be read in conjunction with the accompanying
consolidated financial statements and the notes thereto.
SEGMENT RESULTS
Revenues and income before provision for income taxes for the Company's
operating segments, as defined by Financial Accounting Standard No. 131,
"Financial Reporting for Segments of a Business Enterprise", is summarized as
follows (in millions):
<TABLE>
Life Insurance Asset Accumulation Non-Life
Operations Products Operations Insurance Investments
----------------------- ------------------------ ------------------------
March 31, March 31, March 31,
1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C>
Revenues $105.2 $104.7 $8.9 $3.2 $1.4 $1.3
Income (loss) before income taxes 9.8 14.9 (0.1) 0.8 1.1 0.9
</TABLE>
Life insurance operations. Income before income taxes decreased from 1998
to 1999 primarily due to increased death benefits.
Asset accumulation products operations. Income before income taxes
decreased from 1998 to 1999 primarily due to increased death benefits.
Non-life insurance investments. Income before income taxes was consistent
with 1998 levels.
Significant reconciling items of the segment revenues and income before
income taxes shown above to amounts reported in the Company's consolidated
financial statements include net investment income and operating expenses not
allocated to segments, net realized investment gains (losses) not allocated to
segments and interest expense. These reconciling items had comparable effects on
income before income taxes for the three months ended March 31, 1999 and 1998.
<PAGE>
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998
Income before income taxes for the three months ended March 31, 1999 was $0.7
million compared to $6.0 million for the three months ended March 31, 1998. The
primary reason for the decrease was an increase in death benefits.
Premiums and policy revenues. Premiums and policy revenues totaled $59.1 million
for the three months ended March 31, 1999 compared to $54.0 million for the
three months ended March 31, 1998. Traditional premiums for the three months
ended March 31, 1999 were comparable to the three months ended March 31, 1998.
Policy revenues increased $5.5 million from 1998 to 1999. Policy revenues
increased $1.3 million from asset accumulation business
acquired in October 1998 in conjunction with the Company acquiring the 50% of
College Insurance Group, Inc. not previously owned and the recapture of
business which was previously ceded to an unaffiliated insurance company. In
addition, deferred front-end contract charges recognized on Great Southern's
universal life insurance business increased $4.3 million. The increased
recognition of these front-end contract charges on Great Southern's universal
life insurance business was substantially offset by increased amortization of
deferred policy acquisition costs on this same block. The Company is treating
policies issued in 1999 as a separate group for purposes of recognizing
deferred front-end contract charges and amortizing deferred policy acquisition
costs. This treatment resulted in additional policy revenue and amortization
expense in 1999 without a significant impact to income before income taxes.
Net investment income. Net investment income totaled $58.4 million for the three
months ended March 31, 1999 compared to $56.1 million for the three months ended
March 31, 1998. The increase in net investment income is primarily due to the
acquisition of the asset accumulation business in October 1998.
Other income. Other income totaled $1.7 million for the three months ended March
31, 1999 compared to $1.1 million for the three months ended March 31, 1998. Of
the increase in 1999, $0.4 million was due to commission revenues and other fees
earned by the marketing entities purchased by the Company in October 1998.
Policyholder benefits. Policyholder benefits totaled $70.3 million for the three
months ended March 31, 1999, compared to $63.3 million for the three months
ended March 31, 1998. This increase resulted primarily from a $6.7 million
increase in death benefits. Interest credited on universal life and annuity fund
balances remained comparable between periods; however, (i) interest credited
increased $3.4 million due to the acquisition of the asset accumulation
business in October 1998, (ii) interest credited on the Company's closed
block of annuity business decreased $2.1 million due to reduced fund values,
and (iii) interest credited on other interest-sensitive products decreased due
to a reduction in rates made in response to market conditions. The decrease in
interest credited on the Company's closed block of annuity business was
offset by the related decrease in net investment income earned on the
reduced fund values of the annuity business.
Amortization expense. Amortization expense totaled $18.9 million for the three
months ended March 31, 1999 compared to $15.1 million for the three months ended
March 31, 1998. The higher amortization expense in 1999 resulted primarily from
increased amortization of deferred policy acquisition costs on Great Southern's
universal life insurance business which was substantially offset by the
recognition of front-end contract charges as discussed above.
Other operating expenses. Other operating expenses totaled $23.1 million for the
three months ended March 31, 1999 compared to $21.1 million for the three months
ended March 31, 1998. The increase in operating expenses results primarily from
the expenses associated with marketing entities purchased and insurance
business acquired in October 1998. The increased marketing expenses included
costs of a significant product introduction in 1999 and were partially
offset by external revenues of the marketing entities and the elimination of
commissions the Company paid to these marketing entities prior to their
acquisition.
<PAGE>
FINANCIAL CONDITION AND LIQUIDITY
The changes occurring in the Company's consolidated balance sheet from December
31, 1998 to March 31, 1999 primarily reflect the normal operations of the
Company's life insurance subsidiaries.
The quality of the Company's investment in fixed maturity investments at March
31, 1999 remained consistent with December 31, 1998. Non-investment grade
securities totaled less than 0.2% of the Company's total fixed maturity
investments at March 31, 1999. The Company has not made any significant changes
to its investment philosophy during 1998.
The Company's net unrealized investment gains decreased $14.3 million during the
first three months of 1999. The decrease in the gross unrealized investment
gains on equity securities totaled $7.0 million and the market value of the
Company's available for sale fixed maturity investment securities decreased
$19.7 million due to market interest rate changes. The components of the change
during the three months ended March 31, 1999 were (in millions):
<TABLE>
<S> <C>
Gross unrealized investment gains $ (29.3)
Effect on insurance assets and liabilities 9.1
Deferred income tax effect 5.9
-------
$ (14.3)
</TABLE>
During the three months ended March 31, 1999, changes in the interest rate
environment did not adversely affect the Company's financial condition. These
rate changes did not materially affect disclosures included in the Company's
December 31, 1998 Form 10-K regarding the Company's exposure to market risk.
YEAR 2000 READINESS
Many existing computer programs were designed and developed without regard to
the upcoming change in the century. If not corrected, many computer applications
could fail or create erroneous results by or at the Year 2000.
The Company has developed a comprehensive Year 2000 plan that management
believes will identify potential processing issues and allow the Company to take
any necessary corrective actions before problems arise. A committee, comprised
of a cross section of key employees from all business areas, has been formed to
execute, test and implement the remediation plan. The Company's remediation plan
is comprised of six phases. These phases are (i) a complete inventory of systems
which the Company utilizes, (ii) an initial assessment of Year 2000 preparedness
for each identified system, (iii) the development of a plan to remediate
appropriate systems, (iv) the remediation of systems, (v) the testing of
systems, and (vi) the implementation into production of systems. Because the
Company's administration systems are outsourced to a third party vendor, the
Company is coordinating the Year 2000 plan with its outsource provider. This
provider has contractual responsibility for the Year 2000 remediations of the
Company's administration systems.
The Company had met its milestone of having all administration systems prepared
for Year 2000 processing by December 31, 1998. These systems are used by the
Company to process its insurance business, including premium receipts and claim
payments. Currently, all administrative systems have been renovated and the
Company, working with it's outsource provider, has tested all Year 2000
remediations and has placed these tested systems into production use. All
internal and corporate systems, such as file servers and desktop systems, are
now scheduled to be Year 2000 ready by July 31, 1999. Approximately 95% of these
systems have been assessed for Year 2000 readiness and substantially all of
these are believed to be Year 2000 ready. The Company's imbedded systems, such
as phone switches, will be upgraded, as necessary, during 1999. The affected
systems have been identified. If the Company fails to successfully complete a
significant portion of the Year 2000 plan such failure may have a material
adverse impact on the Company's financial condition. Currently, management
considers the possibility of such a failure to be unlikely; however, contingency
plans are being developed for critical business processes in the event that our
business partners are unable to meet their Year 2000 preparedness commitments.
<PAGE>
A major part of the Company's Year 2000 plan relates to other business entities
on which the Company is reliant to conduct its operations. The aforementioned
Year 2000 committee has identified key business partners, customers, vendors and
suppliers to participate in a survey program. These business entities are
comprised of entities which impact many companies across the country in varied
industries, as well as entities with more limited customers. Entities serving
customers nationwide include the federal government, the banking system, the
postal service, national brokerage firms, stock exchanges, and national
overnight delivery providers. Local entities include the Company's reinsurers,
banks, computer hardware vendors, payroll processor, public utilities and phone
companies. After identifying the entities, the Company sent surveys to each
requesting information related to Year 2000 readiness. Management has developed
a database to track survey responses and will send any necessary follow-up
requests by May 31, 1999. If further requests do not result in a response, a
determination will be made at that time whether further contact should be made.
The responses to these surveys are being evaluated by Company management to
determine whether potential Year 2000 problems exist. If the Company believes a
problem may exist, an appropriate contingency plan will be developed to minimize
any effect on the Company. The Company is specifically reliant upon the federal
government for various functions including mail delivery of customer
correspondence, national banking activities and electronic list bill premium
processing for government employees. The federal government's policy is to not
respond to Year 2000 surveys, so the Company, like most organizations, has
assumed the operations of the federal government will not be significantly
affected by Year 2000 problems. If problems do arise, the operations of the
Company may be materially adversely impacted.
The Company incurred expense through March 1999 related to this project is
$160,000. It is expected additional expenses will total $250,000 during 1999. As
these expenses are not significant to the Company's overall information
technology budget, this remediation plan will be funded from the Company's
normal operating cash flows. The remediation costs are nominal due to the
Company's service agreement with its third party provider. At this point in
time, other information systems projects have not suffered due to Year 2000
compliance efforts so as not to have an adverse effect on the Company's
operations.
The estimates and conclusions herein contain forward-looking statements and are
based on management's best estimates of future events. Risks to completing the
plan include the availability of trained personnel, management's ability to
discover and correct the potential Year 2000 sensitive problems which could have
a serious impact on specific facilities, and the ability of suppliers and
customers to bring their systems into Year 2000 compliance.
<PAGE>
PART II - OTHER INFORMATION
ITEM 2. LEGAL PROCEEDINGS
Reference is made to the Company's December 31, 1998 Form 10-K regarding certain
legal proceedings to which the Company and/or certain of its subsidiaries are
parties. Included among those matters was Thibodeau, et al. v. Great American
Life Underwriters, et al., District Court, Dallas County, Texas. On or about
April 30, 1999, the Texas Court of Appeals affirmed the trial court's ruling
certifying this matter as a class action.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The quantitative and qualitative disclosures about market risk are contained in
the "Financial Condition and Liquidity" section of Management's Discussion and
Analysis of Financial Condition and Results of Operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
3.1 Restated Articles of Incorporation, as amended, of the Registrant
(incorporated by reference from Exhibit 3.1 to Registrant's Form S-4
[File No. 33-64820] filed June 22, 1993).
3.2 By-laws, as amended, of the Registrant (incorporated by reference from
Exhibit 3.2 to Registrant's Form S-4 [File No.33-64820] filed June 22,
1993).
27 Financial Data Schedule.
- -------------------------------------------------------------------------------
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed for the three months ended March 31,
1999.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AMERICO LIFE, INC.
BY: /s/ Gary E. Jenkins
Name: Gary E. Jenkins
Title: Senior Vice President,
Chief Financial Officer and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
Date: May 17, 1999
<TABLE> <S> <C>
<ARTICLE> 7
<CIK> 0000908139
<NAME> Americo Life, Inc.
<MULTIPLIER> 1000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-01-1999
<PERIOD-END> Mar-31-1999
<EXCHANGE-RATE> 1.0000
<DEBT-HELD-FOR-SALE> 913,326
<DEBT-CARRYING-VALUE> 855,108
<DEBT-MARKET-VALUE> 875,568
<EQUITIES> 105,933
<MORTGAGE> 196,833
<REAL-ESTATE> 28,609
<TOTAL-INVEST> 2,335,970
<CASH> 86,770
<RECOVER-REINSURE> 1,188,389
<DEFERRED-ACQUISITION> 145,105
<TOTAL-ASSETS> 4,133,257
<POLICY-LOSSES> 3,329,697
<UNEARNED-PREMIUMS> 39,948
<POLICY-OTHER> 44,814
<POLICY-HOLDER-FUNDS> 118,592
<NOTES-PAYABLE> 133,042
0
0
<COMMON> 10
<OTHER-SE> 243,171
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59,101
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<INCOME-TAX> (35)
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</TABLE>
