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): May 26, 1999
ALLMERICA FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-13754 04-3263626
(State or other (Commission File (I.R.S. Employer I.D.
jurisdiction of Number) Number)
Incorporation)
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
<PAGE>
Item 5. Other Events.
On May 25, 1999, Allmerica Financial Corporation announced that
a settlement
agreement in a class action lawsuit against the Company and three of its
subsidiaries received final approval today in U.S. District Court in
Worcester. The class action related to the sale of approximately 400,000
policies from 1978 to May 31, 1998. A copy of the press release
is attached as Exhibit 99 and is incorporated by reference herein.
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE `SAFE HARBOR' PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Forward-Looking Statements
The Company wishes to caution readers that the following important
factors, among others, in some cases have affected and in the future
could affect, the Company's actual results and could cause the Company's
actual results for 1998 and beyond to differ materially from those
expressed in any forward-looking statements made by, or on behalf
of, the Company. When used in the attached press release, words such as
"believes", "anticipated", "expects" and similar expressions are intended
to identify forward looking statements. See "Important Factors Regarding
Forward-Looking Statements" filed as Exhibit 99-2 to the Company's Annual
Report on Form 10-K for the period ended December 31, 1998.Factors that
may cause actual results to differ materially from those contemplated or
projected, forecast, estimated or budgeted in such forward looking
statements include among others, the following possibilities: (i)adverse
catastrophe experience and severe weather; (ii) adverse loss development
for events the Company insured in prior years or adverse trends in
mortality and morbidity; (iii) heightened competition, including the
intensification of price competition, the entry of new competitors, and
the introduction of new products by new and existing competitors;
(iv) adverse state and federal legislation or regulation, including
decreases in rates, limitations on premium levels, increases in minimum
capital and reserve requirements, benefit mandates, limitations on the
ability to manage care and utilization, and tax treatment of insurance and
annuity products; (v) changes in interest rates causing a reduction of
investment income or in the market value of interest rate sensitive
investments; (vi) failure to obtain new customers, retain existing
customers or reductions in policies in force by existing customers;
(vii) higher service, administrative, or general expense due to the
need for additional advertising, marketing, administrative or
management information systems expenditures; (viii) loss or retirement
of key executives; (ix) increases in medical costs, including increases
in utilization, costs of medical services, pharmaceuticals, durable medical
equipment and other covered items; (x) termination of provider contracts or
renegotiations at less cost-effective rates or terms of payment;
(xi) changes in the Company's liquidity due to changes in asset and
liability matching; (xii) restrictions on insurance underwriting, based on
genetic testing and other criteria; (xiii) adverse changes in the ratings
obtained from independent rating agencies, such as Moody's, Standard and
Poor's, A.M. Best, and Duff & Phelps; (xiv) lower appreciation on and
decline in value of managed investments, resulting in reduced variable
products, assets and related fees; (xv) possible claims relating to sales
practices for insurance products; (xvi) uncertainty related to the Year
2000 issue; (xvii) failure of a reinsurer of the Company's policies to
pay its liabilities under reinsurance contracts; (xviii) earlier than
expected withdrawals from the Company's general account annuities,
GICs, and other insurance products; and (xix) changes in the mix of assets
comprising the Company's investment portfolio and the fluctuation of the
market value of such assets.
Item 7. Financial Statements and Exhibits.
Exhibit 99 Press Release dated May 25, 1999, announcing that Allmerica
Financial Corporation received final approval of its settlement agreement
related to a class action lawsuit.
Page 2 of 5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and 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: __________________________
Edward J. Parry III
Vice President, Chief Financial
Officer, and Treasurer
Date: May 26, 1999
Page 3 of 5
<PAGE>
Exhibit Index
Exhibit 99 Press Release dated May 25, 1999, announcing that
Allmerica Financial Corporation received final approval of its settlement
agreement related to a class action lawsuit.
Page 4 of 5
<PAGE>
EXHIBIT 99
COURT FINALIZES ITS PRELIMINARY APPROVAL
OF CLASS ACTION SETTLEMENT IN ALLMERICA CASE
WORCESTER, Mass., May 25, 1999 - Allmerica Financial Corporation
(NYSE: AFC) announced that a settlement agreement in a class
action lawsuit against the company and three of its subsidiaries
received final approval today in U.S. District Court in
Worcester. The class action related to the sale of approximately
400,000 policies from 1978 to May 31, 1998.
Final approval of the settlement follows a preliminary approval
by the court on December 4, 1998.
Allmerica Financial is a diversified group of insurance and
financial services companies headquartered in Worcester, Mass.
The Allmerica companies rank among the country's 20 leading
providers of variable life insurance products and the 30 largest
providers of property and casualty insurance coverage. The lead
company in the group, Allmerica Financial Corporation, is a
Fortune 500 company.
Contacts:
Media: Investors:
Michael F. Buckley Henry P. St. Cyr
(508) 855-3099 (508) 855-2959
AF-3
5/99
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