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 Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 15,
1997
ALLMERICA FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-13754 04-3263626
(State or other jurisdic-(Commission File (I.R.S. Employer
tion of Incorporation) Number) I.D. Number)
440 Lincoln Street, Worcester, Massachusetts 01653
(Address of Principal Executive Offices)
(Zip Code)
(508) 855-1000
(Registrant's Telephone Number including area code)
Page 1 of 5 pages
Exhibit Index on page 4
Item 5. Other Events.
On April 15, 1997, Allmerica Financial Corporation announced
that it has entered into an agreement in principle to cede
its individual disability insurance business under a 100%
coinsurance arrangement with Metropolitan Life Insurance
Company. The transaction is subject to the negotiation of
definitive agreements and regulatory approvals and is
expected to occur on or before October 1, 1997. Allmerica
Financial Corporation has recognized an after-tax charge of
$35 million, or $0.70 per share, in the first quarter as a
result of the cession of the disability income block. A
copy of the press release is attached as Exhibit 1 and is
incorporated by reference herein.
Item 7. Financial Statements and Exhibits.
Exhibit 1 Press Release dated April 15, 1997,
announcing Allmerica Financial
Corporation's agreement in principle to
cede its individual disability insurance
business to Metropolitan Life Insurance
Company.
page 2
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.
ALLMERICA FINANCIAL
CORPORATION
By: /s/ Edward J. Parry, III
Edward J. Parry, III
Vice President, Chief Financial
Officer, Principal Accounting
Officer
Date: April 16, 1997
page 3
Exhibit Index
Exhibit 1 Press Release dated April 15, 1997, announcing
Allmerica Financial Corporation's agreement in principle to
cede its individual disability insurance business to
Metropolitan Life Insurance Company.
page 4
ALLMERICA FINANCIAL AGREES TO REINSURE INDIVIDUAL DISABILITY
INSURANCE BLOCK WITH METROPOLITAN LIFE
WORCESTER, Mass. April 15, 1997-- Allmerica Financial
Corporation (NYSE:AFC) today announced it has reached an
agreement in principle to transfer Allmerica's individual
disability income business to Metropolitan Life Insurance
Company by October 1997.
Under the agreement, MetLife will provide administrative
services and assume liability, under a 100 percent
coinsurance arrangement, for Allmerica's $33 million premium
in force individual disability income line. In exchange,
Allmerica will transfer to MetLife approximately $200
million in statutory reserves and ceding commissions.
Allmerica Financial said it will take an after-tax charge of
$35 million, or $0.70 per share to net income in the first
quarter of 1997 related to the disposal of the disability
income block. The charge reflects the difference in
accounting between statutory and GAAP (generally accepted
accounting principles) reserves, and the write-off of
deferred acquisition costs related to the line.
"Individual disability is not a strategic product for our
Retail Financial Services segment, and, with this
arrangement, retail can focus more fully on its strong-
growth, variable product lines," said Edward J. Parry III,
vice president and chief financial officer of Allmerica
Financial. "We are pleased that MetLife has agreed to
assume this business, so that policyholders can be assured
of ongoing sound administration and benefits."
The transaction is subject to the negotiation of definitive
agreements and regulatory approvals.
Allmerica Financial Corporation is the holding company for a
diversified group of insurance and financial services
companies headquartered in Worcester, Mass.
Contacts
Investors Media
Jean Peters Michael F. Buckley
Vice President - Investor Relations Director - Public
Information
(508) 855-3599 (508) 855-3099
