<PAGE>
Filed Pursuant to Rule 424(b)(2)
File Number: 37088
Prospectus Supplement
(To Prospectus dated May 23, 2000)
$700,000,000
GE Global Insurance Holding Corporation
$350,000,000
7.50% Notes due June 15, 2010
$350,000,000
7.75% Notes due June 15, 2030
----------------
GE Global Insurance Holding Corporation is offering two series of notes. GE
Global will pay interest on the 7.50% Notes on June 15 and December 15 of each
year, commencing December 15, 2000 to the holders of record of such notes on
May 31 and November 30 of each year. GE Global will pay interest on the 7.75%
Notes on June 15 and December 15 of each year, commencing December 15, 2000 to
the holders of record of such notes on May 31 and November 30 of each year.
GE Global may, at any time, redeem the notes at the redemption price described
in this prospectus supplement. The notes do not have the benefit of any sinking
fund.
----------------
Investing in the notes involves certain risks. See "Risk Factors" beginning
on page 3 of the accompanying prospectus.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus supplement and the accompanying
prospectus. Any representation to the contrary is a criminal offense.
<TABLE>
<CAPTION>
7.50% Notes Total 7.75% Notes Total
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Price to public.............. 99.567% $348,484,500 99.496% $348,236,000
Underwriting discount........ 0.650% $ 2,275,000 0.875% $ 3,062,500
Proceeds, before expenses, to
GE Global................... 98.917% $346,209,500 98.621% $345,173,500
</TABLE>
It is expected that delivery of the notes will be made on or about June 23,
2000, through the facilities of The Depository Trust Company against payment
therefor in immediately available funds.
----------------
Joint Bookrunning Managers
Chase Securities Inc. Lehman Brothers
Co-Managers
Goldman, Sachs & Co. J.P. Morgan & Co.
June 20, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Supplement
The Company................................................................ S-3
Use of Proceeds............................................................ S-3
Capitalization............................................................. S-3
Description of Notes....................................................... S-4
Underwriting............................................................... S-6
Experts.................................................................... S-7
Legal Matters.............................................................. S-7
Prospectus
About This Prospectus...................................................... 2
Where You Can Find More Information........................................ 2
Risk Factors............................................................... 3
The Company................................................................ 5
Ratio of Earnings to Fixed Charges......................................... 5
Use of Proceeds............................................................ 5
Description of Debt Securities............................................. 5
Plan of Distribution....................................................... 10
Legal Matters.............................................................. 10
Experts.................................................................... 11
</TABLE>
----------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus in
making your investment decision. We have not authorized anyone to provide you
with any other information. If you receive any unauthorized information, you
must not rely on it.
We are offering to sell the notes and seeking offers to buy the notes only
in jurisdictions where offers and sales are permitted. The commissioner of
insurance of the State of North Carolina has not approved or disapproved this
offering nor has such commissioner passed upon the accuracy or adequacy of this
prospectus supplement or the accompanying prospectus.
The information contained in this prospectus supplement and the accompanying
prospectus is accurate only as of the date of this prospectus supplement and
the accompanying prospectus regardless of the time of delivery of this
prospectus supplement and the accompanying prospectus or any sale of the notes.
S-2
<PAGE>
THE COMPANY
Recent Development
On June 12, 2000, Ronald R. Pressman, 42, was named President and Chief
Executive Officer of Employers Reinsurance Corporation, a subsidiary of GE
Global Insurance Holding Corporation, based in Overland Park, Kansas. He was
simultaneously elected a Senior Vice President of General Electric Company, and
on June 15, 2000, he was elected President and Chief Executive Officer of GE
Global. Mr. Pressman succeeds David L. Calhoun, who was named Executive Vice
President and Chief Operating Officer of GE Aircraft Engines on June 5, 2000.
Mr. Pressman's appointment will be effective as of July 3, 2000.
USE OF PROCEEDS
The net proceeds from the sale of the notes offered hereby are estimated to
be approximately $691,383,000 (after deduction of underwriting discounts and
commissions). We will use the net proceeds from the sale of the notes to repay
outstanding short-term borrowings and related accrued interest under an
intercompany credit agreement with General Electric Capital Corporation, a
wholly-owned subsidiary of General Electric Capital Services, Inc., the
proceeds of which were used to fund a recent business acquisition and for other
general corporate purposes. The weighted average interest rate on the
outstanding balance under the intercompany credit agreement was 5.97% per annum
for the first quarter of 2000.
CAPITALIZATION
The following table sets forth our capitalization at April 1, 2000 and as
adjusted to reflect the issuance of the notes offered hereby and to give effect
to the repayment of short-term borrowings. See "Use of Proceeds."
<TABLE>
<CAPTION>
April 1, 2000
-------------------------
Actual As Adjusted
---------- -------------
(dollars in millions)
<S> <C> <C>
Short-term borrowings................................ $ 774 $ 74
Long-term borrowings................................. 956 956
Notes................................................ -- 700
---------- ----------
Total debt......................................... 1,730 1,730
---------- ----------
Minority interest in equity of consolidated
subsidiaries........................................ 1,178 1,178
---------- ----------
Stockholder's equity:
Preferred stock, $100,000 par value; authorized,
issued and outstanding--1,500 shares.............. 150 150
Common stock, $5,000 par value; authorized, issued
and outstanding--1,000 shares..................... 5 5
Paid-in capital.................................... 845 845
Accumulated non-owner changes in equity............ 10 10
Retained earnings.................................. 4,732 4,732
---------- ----------
Total stockholder's equity....................... $ 5,742 $ 5,742
---------- ----------
Total capitalization............................. $ 8,650 $ 8,650
---------- ----------
Ratio of debt to total capitalization................ 20% 20%
</TABLE>
S-3
<PAGE>
DESCRIPTION OF NOTES
The following description of the notes supplements, and to the extent
inconsistent therewith replaces, the description of the general terms and
provisions of Debt Securities set forth in the accompanying prospectus, to
which we refer you.
General
The notes are two issues of the Debt Securities described in the
accompanying prospectus and will be issued as separate series of Debt
Securities under the Indenture dated as of February 1, 1996 (the "Indenture")
entered into between GE Global and The Chase Manhattan Bank, as Trustee (the
"Trustee"). The notes in each of the two series are initially limited to an
aggregate principal amount of $350,000,000. In addition to the notes, we may
issue from time to time other series of Debt Securities under the Indenture
consisting of debentures, notes or other unsecured, unsubordinated evidences of
indebtedness, but such other series will be separate from and independent of
the notes. The Indenture does not limit the amount of Debt Securities or any
other debt which we may incur. In addition, the provisions of the Indenture do
not protect you in the event that we enter into a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction that may adversely
affect you. The notes will be the third and fourth series of Debt Securities
that we have issued under the Indenture. We refer you to the accompanying
prospectus for a description of other general terms of the Debt Securities. If
an annual interest payment date or the maturity date is not a business day, the
requisite payment shall be made on the next succeeding business day. No
additional interest will accrue as a result of such delay. "Business day" means
any day other than a Saturday, a Sunday or a day on which banks are authorized
to be closed in the State of New York.
The 7.50% Notes will mature on June 15, 2010. Interest on the 7.50% Notes
will accrue from June 23, 2000 and is payable semi-annually on June 15 and
December 15, commencing December 15, 2000 to the persons in whose names the
7.50% Notes are registered at the close of business on May 31 and November 30
prior to each payment date at the annual rate of 7.50%. The 7.50% Notes will be
issued as fully registered 7.50% Notes (to be deposited with the depositary)
and in denominations of $1,000 or integral multiples thereof.
The 7.75% Notes will mature on June 15, 2030. Interest on the 7.75% Notes
will accrue from June 23, 2000 and is payable semi-annually on June 15 and
December 15, commencing December 15, 2000 to the persons in whose names the
7.75% Notes are registered at the close of business on May 31 and November 30
prior to each payment date at the annual rate of 7.75%. The 7.75% Notes will be
issued as fully registered 7.75% Notes (to be deposited with the depositary)
and in denominations of $1,000 or integral multiples thereof.
Redemption at the Option of GE Global
The notes of each series will be redeemable, in whole or in part, at our
option, on any date at a redemption price equal to the greater of (a) 100% of
the principal amount of the notes of such series to be redeemed or (b) the sum
of the present values of the remaining scheduled payments of principal and
interest on such notes (exclusive of interest accrued to such redemption date)
discounted to such redemption date on a semiannual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate plus 10 basis
points, in the case of 7.50% Notes, and 25 basis points, in the case of 7.75%
Notes, plus, in either case, accrued and unpaid interest on the principal
amount being redeemed to such redemption date; provided, however, that
installments of interest on notes that are due and payable on an interest
payment date falling on or prior to the relevant redemption date will be
payable to the holders of such notes, registered as such at the close of
business on the relevant record date according to their terms and the
provisions of the Indenture.
"Treasury Rate" means, with respect to any redemption date for the notes,
(a) the yield, under the heading that represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication that is
published weekly by the Board
S-4
<PAGE>
of Governors of the Federal Reserve System and that established yields on
actively traded United States Treasury securities adjusted to constant maturity
under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the maturity date, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Treasury Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding to the nearest month) or (b) if
such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. The Treasury Rate shall be calculated
on the third business day preceding the redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable
to the remaining term of the notes to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the notes.
"Independent Investment Banker" means Chase Securities Inc. or Lehman
Brothers Inc. or if such firm is unwilling or unable to select the Comparable
Treasury Issue, an independent investment banking institution of national
standing appointed by the Trustee after consultation with us.
"Comparable Treasury Price" means, with respect to any redemption date, (a)
the average of four Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (b) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer" means (1) Chase Securities Inc. and Lehman
Brothers Inc. and their respective successors, provided, however, that if Chase
Securities Inc. or Lehman Brothers Inc. shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), we
will substitute another Primary Treasury Dealer, and (2) any two other Primary
Treasury Dealers selected by us.
"Reference Treasury Dealer Quotation" means, with respect to the Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding such redemption date.
We will mail notice of any redemption at least 30 days but not more than 60
days before any redemption date to each holder of notes to be redeemed. If we
choose to redeem less than all the notes of any series, the Trustee will
select, in such manner as it deems fair and appropriate, the notes of such
series to be redeemed in whole or in part. If sufficient funds are deposited
with the Trustee on or prior to any redemption date, notes of the series to be
redeemed will cease to be outstanding and interest will cease to accrue from
and after the redemption date.
Unless we default in payment of the redemption price, on and after any
redemption date interest will cease to accrue on the notes or portion thereof
called for redemption.
Book-Entry System
The notes will be issued in whole or in part in the form of one or more
fully registered global securities. The global securities will be deposited
with, or on behalf of, The Depository Trust Company, as depositary and
registered in the name of a nominee of the depositary. No global security may
be transferred, except as a whole, by the depositary to a nominee of the
depositary. Global securities may also be transferred as a whole
S-5
<PAGE>
by a nominee of the depositary to the depositary or another nominee of the
depositary or by the depositary or the nominee to a successor of the depositary
or a nominee of the successor.
If (x) the depositary is at any time unwilling or unable to continue as
depositary or the depositary ceases to be a clearing agency registered under
the Securities Exchange Act of 1934, as amended, (y) GE Global executes and
delivers to the Trustee an order to the effect that the global securities shall
be transferable and exchangeable for notes in definitive form or (z) an event
of default has occurred and is continuing with respect to the notes, the global
securities will be transferable or exchangeable for notes in definitive form of
like tenor in an equal aggregate principal amount. Such definitive notes shall
be registered in such name or names as the depositary shall instruct the
Trustee.
Further Issues
The 7.50% Notes and the 7.75% Notes each will be limited to an initial
aggregate principal amount of $350,000,000. We may, however, from time to time,
without the consent of the holders of such notes, create and issue pursuant to
the Indenture additional 7.50% Notes or additional 7.75% Notes having the same
terms and conditions under the Indenture as the previously outstanding 7.50%
Notes and 7.75% Notes in all respects (or in all respects save for the date for
and amount of the first payment of interest thereon) so that the same shall be
consolidated and form a single series with each of the 7.50% Notes or a single
series with each of the 7.75% Notes.
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting
agreement dated the date hereof (the "Underwriting Agreement"), the
underwriters named below (the "Underwriters") have severally agreed to
purchase, and we have agreed to sell to them, the respective principal amount
of notes set forth opposite their respective names below.
<TABLE>
<CAPTION>
Principal Principal
Amount Amount
Name of 7.50% Notes of 7.75% Notes
---- -------------- --------------
<S> <C> <C>
Chase Securities Inc. ......................... $161,000,000 $161,000,000
Lehman Brothers Inc. .......................... 161,000,000 161,000.000
Goldman, Sachs & Co. .......................... 14,000,000 14,000,000
J.P. Morgan Securities Inc. ................... 14,000,000 14,000,000
------------ ------------
Total........................................ $350,000,000 $350,000,000
============ ============
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the notes are subject to, among
other things, the approval of certain legal matters by their counsel and
certain other conditions. The Underwriters are obligated to take and pay for
all the notes if any are taken.
The Underwriters propose initially to offer part of the notes to the public
at the public offering price set forth on the cover page hereof and in part to
certain dealers at prices that represent a concession not in excess of 0.400%
of the principal amount of the 7.50% Notes and 0.500% of the principal amount
of the 7.75% Notes. Any Underwriter may allow, and such dealers may reallow, a
concession not in excess of 0.250% of the principal amount of each series of
the notes to certain other dealers. After the initial offering of the notes,
the offering price and other selling terms may from time to time be varied by
the Underwriters.
We do not intend to apply for listing of the notes on a national securities
exchange, but have been advised by the Underwriters that they presently intend
to make a market in the notes, as permitted by applicable laws and regulations.
The Underwriters are not obligated, however, to make a market in the notes and
any such
S-6
<PAGE>
market making may be discontinued at the sole discretion of the Underwriters.
Accordingly, no assurance can be given as to the liquidity of, or trading
markets for, the notes.
In order to facilitate the offering of the notes, the Underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price
of the notes. Specifically, the Underwriters may over-allot in connection with
this offering, creating short positions in the notes for their own account. In
addition, to cover over-allotments or to stabilize the price of the notes, the
Underwriters may bid for, and purchase, notes in the open market. Finally, the
Underwriters may reclaim selling concessions allowed to an underwriter or
dealer for distributing notes in this offering, if the Underwriters repurchase
previously distributed notes in transactions that cover syndicate short
positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the notes above independent
market levels. The Underwriters are not required to engage in these activities,
and may end any of these activities at any time.
We have agreed to indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
The Underwriters or their affiliates have provided and may in the future
continue to provide investment banking, commercial banking and other financial
services to us and our affiliates in the ordinary course of business. The Chase
Manhattan Bank, the Trustee, is an affiliate of Chase Securities Inc.
EXPERTS
The consolidated financial statements and schedules of GE Global and its
subsidiaries as of December 31, 1999 and 1998, and for each of the years in the
three-year period ended December 31, 1999, have been incorporated by reference
herein and in the registration statement in reliance upon the report of KPMG
LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
LEGAL MATTERS
Certain legal matters in connection with the Notes will be passed upon for
GE Global by Simpson Thacher & Bartlett, New York, New York and John M.
Connelly, General Counsel to GE Global, and for the Underwriters by Davis Polk
& Wardwell, New York, New York.
S-7
<PAGE>
PROSPECTUS
GE Global Insurance
Holding Corporation
$2,000,000,000
Debt Securities
GE Global Insurance Holding Corporation may offer senior, unsecured debt
securities from time to time.
----------------
We will provide specific terms of these securities in supplements to this
Prospectus. Investing in the Debt Securities involves certain risks.
You should read this Prospectus, particularly the Risk Factors
beginning on page 3, and any supplement carefully before you
invest.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
----------------
May 23, 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
About This Prospectus....................................................... 2
Where You Can Find More Information......................................... 2
Risk Factors................................................................ 3
The Company................................................................. 5
Ratios of Earnings to Fixed Charges......................................... 5
Use of Proceeds............................................................. 5
Description of Debt Securities.............................................. 5
Plan of Distribution........................................................ 10
Legal Matters............................................................... 10
Experts..................................................................... 11
</TABLE>
----------------
ABOUT THIS PROSPECTUS
This Prospectus is part of a Registration Statement that we filed with the
Securities and Exchange Commission (the "SEC") utilizing a "shelf" registration
process. Under this shelf process, we may sell the unsecured Debt Securities
described in this Prospectus in one or more offerings up to a total dollar
amount of $2,000,000,000. This Prospectus provides you with a general
description of the Debt Securities we may offer. Each time we sell Debt
Securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus supplement may
also add, update or change information contained in this prospectus. You should
read both this Prospectus and any prospectus supplement together with
additional information described below under "Where You Can Find More
Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information with the
SEC. You may also read and copy any document we file at the SEC's public
reference rooms in Washington, D.C., New York, New York and Chicago, Illinois.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are available to the public over the Internet
at the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be a part of this Prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Section 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until we sell all of the Debt Securities:
. Our Annual Report on Form 10-K for the year ended December 31, 1999; and
. Our Quarterly Report on Form 10-Q for the quarter ended April 1, 2000.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address: William J. Steilen, Vice President and
Controller, GE Global Insurance Holding Corporation, 5200 Metcalf, Overland
Park, Kansas 66201, Telephone: (913) 676-5200.
You should rely only on the information incorporated by reference or
provided in this Prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this Prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front of those documents.
2
<PAGE>
RISK FACTORS
Investing in the Debt Securities involves certain risks. You should
carefully consider the information contained in this Prospectus and the
following factors, among others, before purchasing the Debt Securities.
As a Holding Company, We Depend on Dividends from Our Subsidiaries
We are a holding company and conduct our operations through our direct
operating subsidiaries, Employers Reinsurance Corporation ("ERC"), GE
Reinsurance Corporation ("GE Re") (formerly Kemper Reinsurance Corporation) and
Medical Protective Corporation ("Medical Protective"). We depend on dividends
from ERC, GE Re and Medical Protective to service our debt and meet our other
obligations. The payment of dividends and other payments by ERC, GE Re and
Medical Protective are subject to limitations imposed by the laws of the states
of Missouri, Illinois and Indiana, respectively, where such subsidiaries are
organized and domiciled. Substantially all of our other indirect subsidiaries
are also subject to regulation by various state insurance departments and other
foreign insurance regulators. As a result, our subsidiaries' ability to pay
dividends or make loans or advances to us or any of our other affiliates
without prior regulatory approval is limited by applicable regulations. In
addition, the payment of dividends or other amounts by ERC, GE Re and Medical
Protective or our other insurance subsidiaries that would otherwise be
permitted without regulatory approval may be restricted under some
circumstances.
The Debt Securities Are Subordinated to the Obligations of Our Subsidiaries
We are a non-operating holding company and we conduct our business through
our insurance subsidiaries. The Debt Securities will effectively be
subordinated to the liabilities of our subsidiaries. If any of our subsidiaries
becomes insolvent, or liquidates or reorganizes, our creditors and shareholders
would not have the right to proceed against the subsidiary or cause its
liquidation or bankruptcy under federal or state bankruptcy laws. The insurance
laws of the domicile of the subsidiary would govern such proceedings and the
relevant insurance commissioner would act as the liquidator or rehabilitator
for the subsidiary. The creditors and policyholders of the subsidiary would
receive payment in full from the assets of the subsidiary before we, as a
shareholder, would receive any distribution therefrom.
We May Enter into Transactions Involving Issuance or Assumption of Debt
We will issue the Debt Securities pursuant to an Indenture that does not
limit the amount of Debt Securities or other unsecured, senior debt that we may
issue under the Indenture or pursuant to some other agreement. The Indenture
also does not limit our ability to incur indebtedness or give you protection in
the event that our ultimate parent corporation, the General Electric Company,
as our sole indirect stockholder, causes us to enter into a highly leveraged
transaction, reorganization, restructuring, merger or similar transaction.
Our Liability May Exceed Property and Casualty Loss Reserves
Our reserves for losses and loss adjustment expenses are our estimates of
amounts we will need to pay for reported and unreported claims and related loss
adjustment expenses. Our estimates are based on certain assumptions related to
the ultimate cost to settle such claims. Because of the inherent uncertainty in
estimating reserves for losses and loss adjustment expenses, we cannot assure
you that our ultimate liability will not exceed our reserves and, as a result,
have a material adverse effect on our results of operations or financial
position. We believe, however, that our aggregate reserves are adequate to meet
our future obligations.
Inflation May Have a Significant Impact on Our Loss and Loss Adjustment Expense
Costs on Claims
Our ultimate loss and loss adjustment expense costs on claims that are not
yet settled are increased by the effects of inflation. As a result, changes in
the inflation rate could become a significant factor in determining
3
<PAGE>
appropriate loss reserves as well as reinsurance premium rates. Generally, the
methods we use to estimate our loss reserves and to calculate our rates take
into account the anticipated effects of inflation. However, until claims are
ultimately settled, the full effect of inflation on our results cannot be
known.
The Reinsurance Industry Is Highly Cyclical
The property and casualty reinsurance industry is highly cyclical. Demand
for reinsurance is significantly influenced by the underwriting results of
primary property and casualty insurance companies, the prevailing general
economic conditions, reinsurance premium rates and other variables. Factors
such as volatile and unpredictable developments, including changes in what we
believe is the propensity of courts to grant large awards, natural disasters
and other catastrophic events can significantly affect the reinsurance
industry's cyclical trends and profitability. In addition, fluctuations in
interest rates and other changes in the investment environment which affect
inflationary pressures may tend to affect the size of losses experienced by
ceding primary insurance companies.
Legislative and Regulatory Proposals May Affect Our Business
From time to time, various regulatory and legislative changes are proposed
that may affect reinsurers. A substantial number of states have recently
adopted, or are considering adopting, laws and regulations that, among other
things, limit the ability of primary insurance companies to raise their
premiums or to cancel or not renew existing policies. We cannot predict whether
additional states will adopt any of these laws and regulations, the form in
which these states might adopt any of these laws and regulations, or the
effect, if any, these developments will have on us. In addition, we cannot
predict whether any applicable jurisdictions will adopt legislative proposals
relating to the payment of dividends, whether any such proposals will be
adopted in the future or the effect, if any, any such proposal would have on
us.
Our Foreign Operations Are Regulated by Foreign Authorities
We conduct a portion of our business in foreign countries. The degree of
regulation and supervision in these foreign jurisdictions varies from minimal
in some to stringent in others. The licenses issued by foreign authorities to
our foreign subsidiaries are subject to modification or revocation by such
authorities, and our subsidiaries could be prevented from conducting business
in certain jurisdictions where they currently operate.
We Operate in a Highly Competitive Environment
We operate in a highly competitive environment. Concern about the financial
stability of insurance companies has resulted in emphasis being placed upon
insurance company ratings and there is some competitive advantage for insurance
companies with higher ratings. Both ERC, one of our principal property and
casualty insurance subsidiaries, and its major life insurance subsidiary,
Employers Reassurance Corporation, are rated "A++ (Superior)" by A.M. Best
Company ("A.M. Best"). Our other major direct subsidiaries, GE Re and Medical
Protective, are rated "A (Excellent)" and "A+ (Superior)" by A.M. Best,
respectively. In the area of claims-paying ability, ERC is rated "AAA" by
Standard & Poor's Corporation and "Aaa" by Moody's Investor Services, Inc. Some
of our other subsidiaries are also rated by certain domestic and foreign rating
agencies. Claims-paying ability ratings do not reflect an insurer's ability to
meet non-policy obligations, such as the repayment of indebtedness. In
addition, we cannot give assurance that we will maintain the ratings for ERC or
any of our other subsidiaries. Any downgrade in the ratings of our subsidiaries
could adversely affect our business.
There Is No Prior Public Market for the Debt Securities
The Debt Securities are a new issue of securities and there is no
established trading market. Although we may list the Debt Securities on the New
York Stock Exchange, we cannot assure the liquidity of the trading market for
the Debt Securities.
4
<PAGE>
THE COMPANY
GE Global Insurance Holding Corporation, through its direct and indirect
subsidiaries, engages principally in the insurance and reinsurance business in
the United States and throughout the world. All of the outstanding common stock
of GE Global is owned by General Electric Capital Services, Inc., which in turn
is wholly-owned, directly and indirectly, by General Electric Company. Neither
of these affiliates will guarantee the Debt Securities.
Reinsurance is a form of insurance in which a reinsurer indemnifies a
primary insurer against part or all of the liability assumed by the primary
insurer under one or more insurance policies.
We engage in two principal business segments: (1) property and casualty
insurance/reinsurance and (2) life reinsurance. Our principal product lines
under the property and casualty segment are traditional property and casualty
reinsurance, healthcare reinsurance and specialty insurance (generally primary
property and casualty insurance). Our principal product lines under the life
reinsurance segment are traditional life reinsurance and financial reinsurance.
We also provide primary insurance products to hospitals, health maintenance
organizations and medical professionals as part of our healthcare product line
and to niche customers as part of our specialty product line.
Our principal executive offices are located at 5200 Metcalf, Overland Park,
Kansas 66201. Our telephone number is (913) 676-5200. When we refer to "GE
Global", "we" or "our" in this Prospectus, we mean GE Global Insurance Holding
Corporation and its subsidiaries on a consolidated basis, unless the context
requires otherwise.
RATIOS OF EARNINGS TO FIXED CHARGES
We have set forth below the ratio of earnings to fixed charges for GE Global
for the periods indicated. For the purposes of calculating this ratio, earnings
consist of net earnings adjusted for the provision for income taxes, minority
interest and fixed charges. Fixed charges consist of interest and discount on
all indebtedness, minority interest in pre-tax earnings from affiliates and
one-third of annual rentals, which we believe is a reasonable approximation of
the interest factor of such rentals.
<TABLE>
<CAPTION>
Three Months Ended
Year Ended December 31, April 1,
--------------------------------------------------------- ------------------
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ------------------
<S> <C> <C> <C> <C> <C>
5.01 5.80 6.33 6.83 5.10 2.87
</TABLE>
USE OF PROCEEDS
We will use the net proceeds that we receive from the sale of the Debt
Securities offered by this Prospectus and the accompanying prospectus
supplement for general corporate purposes. General corporate purposes may
include repayment of other debt, capital expenditures, possible acquisitions,
and any other purposes that may be stated in any prospectus supplement. The net
proceeds may be invested temporarily or applied to repay short-term debt until
they are used for their stated purpose.
DESCRIPTION OF DEBT SECURITIES
General
The following description of the Debt Securities is subject to the detailed
provisions of the Indenture dated as of February 1, 1996 (the "Indenture"),
between GE Global and The Chase Manhattan Bank, as trustee (the "Trustee"). A
copy of the Indenture is filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. Wherever we refer to particular provisions
of the Indenture or terms defined therein,
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such provisions or definitions are incorporated by reference as a part of the
statements made herein and the statements are qualified in their entirety by
such reference.
We will issue the Debt Securities in one or more series under the Indenture.
The Indenture does not limit the amount of Debt Securities or other unsecured,
senior debt which we may issue thereunder or limit the amount of other debt,
secured or unsecured, which we may issue. The Debt Securities will be
obligations exclusively of GE Global. We are a non-operating holding company
and conduct our business through our subsidiaries. The Debt Securities will be
effectively subordinated to the liabilities of our subsidiaries, including
substantial claims for policy benefits under contracts of reinsurance and
insurance and debt and preferred stock obligations. Currently, our only direct
wholly-owned operating subsidiaries are ERC, GE Re and Medical Protective. All
of our other indirect subsidiaries are directly or indirectly owned by ERC, GE
Re and Medical Protective. Since substantially all of our subsidiaries are
subject to regulatory control by various state insurance departments and other
foreign insurance regulatory authorities, the ability of such subsidiaries to
pay dividends or make loans or advances to us or to any of our other
subsidiaries without prior regulatory approval is limited by applicable laws
and regulations. The maximum amount available for the payment of dividends by
ERC in any one year without prior regulatory approval is limited to the lesser
of the prior year's net investment income (computed in accordance with
statutory accounting requirements) or 10% of statutory policyholders' surplus
as of the end of the previous year. During 2000, a maximum of $294 million of
dividends can be paid by ERC without obtaining regulatory approval. The maximum
amount available for the payment of dividends by GE Re or Medical Protective in
any one year without prior regulatory approval is limited to the greater of the
prior year's net income (computed in accordance with statutory accounting
requirements) or 10% of statutory policyholders' surplus as of the end of the
previous year. During 2000, GE Re cannot pay a dividend without obtaining
regulatory approval. Medical Protective can pay a maximum of $66 million of
dividends in 2000 without obtaining regulatory approval.
We refer you to the Prospectus Supplement accompanying this Prospectus for
the terms specified by GE Global pursuant to the Indenture of, and other
information with respect to, the Debt Securities being offered thereby. Such
terms may include:
. the designation, the aggregate principal amount and the authorized
denominations of such Debt Securities;
. the percentage of their principal amount at which such Debt Securities
will be issued;
. the date or dates on which such Debt Securities will mature;
. the currency, currencies or currency units in which the payments on such
Debt Securities will be payable;
. the rate or rates at which such Debt Securities will bear interest, if
any, or the method of determination of such rate or rates;
. the date or dates from which such interest, if any, shall accrue, the
dates on which such interest, if any, will be payable and the method of
determining holders to whom any such interest shall be payable;
. the prices, if any, at which, and the dates at or after which, such Debt
Securities must or may be repaid, repurchased or redeemed; and
. the exchanges, if any, on which the Debt Securities may be listed.
(Section 2.02)
Interest, if any, is to be payable to the persons, and in the manner,
specified in the Prospectus Supplement accompanying this Prospectus. Unless we
specify otherwise in the Prospectus Supplement, interest will be computed on
the basis of a 360-day year consisting of twelve 30-day months. (Section 2.10)
The Debt Securities will be unsecured and will rank equally and ratably with
all other unsecured and unsubordinated indebtedness of GE Global.
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Some of the Debt Securities may be issued as discounted Debt Securities to
be sold at a substantial discount below their stated principal amount. There
are federal income tax consequences and other special considerations that apply
to any such discounted Debt Securities. We will describe any such consequences
and considerations in the Prospectus Supplement with respect to any such Debt
Securities.
The Indenture does not contain any provisions that limit our ability to
incur indebtedness or that afford holders of Debt Securities protection in the
event that General Electric Company, as our sole indirect stockholder, causes
us to engage in a highly leveraged transaction, reorganization, restructuring,
merger or similar transaction.
Global Debt Securities, Delivery and Form
Unless otherwise specified in the Prospectus Supplement accompanying this
Prospectus, the Debt Securities will be issued in the form of one or more fully
registered Global Notes that will be deposited with, or on behalf of, The
Depository Trust Company, New York, New York (the "Depositary") and registered
in the name of the Depositary's nominee. The Depositary currently limits the
maximum denomination of any single Global Note to $400,000,000. For purposes of
this Prospectus, "Global Note" refers to the Global Note or Global Notes
representing an entire issue of Debt Securities.
Except as set forth below, a Global Note may be transferred, in whole and
not in part, only to another nominee of the Depositary or to a successor of the
Depositary or its nominee.
The Depositary has advised us as follows:
. The Depositary is
. a limited purpose trust company organized under the laws of the State
of New York;
. a "banking organization" within the meaning of the New York banking
law;
. a member of the Federal Reserve System;
. a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
. a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934;
. The Depositary was created to hold securities of its participants and to
facilitate the clearance and settlement of securities transactions among
its participants through electronic book entry changes in accounts of its
participants, eliminating the need for physical movements of securities
certificates;
. The Depositary participants include securities brokers and dealers,
banks, trust companies, clearing corporations and others, some of whom
own the Depositary;
. Access to the Depositary book-entry system is also available to others
that clear through or maintain a custodial relationship with a
participant, either directly or indirectly;
. Where we issue a Global Note in connection with the sale thereof to an
underwriter or underwriters, the Depositary will immediately credit the
accounts of participants designated by such underwriter or underwriters
with the principal amount of the Debt Securities purchased by such
underwriter or underwriters; and
. Ownership of beneficial interests in a Global Note and the transfers of
ownership will be effected only through records maintained by the
Depositary (with respect to participants), by the participants (with
respect to indirect participants and certain beneficial owners) and by
the indirect participants (with respect to all other beneficial owners).
The laws of some states require that certain purchasers of securities
take physical delivery in definitive form or securities they purchase.
These laws may limit your ability to transfer beneficial interests in a
Global Note.
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So long as a nominee of the Depositary is the registered owner of a Global
Note, such nominee for all purposes will be considered the sole owner or holder
of such Debt Securities under the Indenture. Except as provided below, you will
not be entitled to have Debt Securities registered in your name, will not
receive or be entitled to receive physical delivery of Debt Securities in
definitive form, and will not be considered the owners or holders thereof under
the Indenture.
Neither we, the Trustee, any paying agent nor any registrar of the Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Note, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
We will make payment of principal of, and interest on, Debt Securities
represented by a Global Note to the Depositary or its nominee, as the case may
be, as the registered owner and holder of the Global Note representing those
Debt Securities. The Depositary has advised us that upon receipt of any payment
of principal of, or interest on, a Global Note, the Depositary will immediately
credit accounts of participants with payments in amounts proportionate to their
respective beneficial interests in the principal amount of that Global Note, as
shown in the records of the Depositary. Standing instructions and customary
practices will govern payments by participants to owners of beneficial
interests in a Global Note held through those participants, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name". Those payments will be the sole responsibility of those
participants, subject to any statutory or regulatory requirements that may be
in effect from time to time.
Certain Covenants of GE Global
We shall not merge or consolidate with any other Person or sell, convey,
transfer or otherwise dispose of all or substantially all of our assets unless
we will be the continuing corporation or the successor Person shall be a
corporation organized under the laws of the United States or any state thereof
and such other Person shall expressly assume our obligations under the
Indenture. (Sections 11.01 and 11.02)
Modifications of the Indenture
With the consent of the holders of at least 66 2/3% in aggregate principal
amount of outstanding series of the Debt Securities that would be affected, the
Indenture permits us and the Trustee to add any provisions to or change in any
manner or eliminate any of the provisions of the Indenture or modify in any
manner the rights of the holders of Debt Securities of each such series.
However, without the consent of each holder of all of the outstanding Debt
Securities affected by that modification, we may not: (i) among other things,
extend the fixed maturity of any Debt Securities or reduce the principal amount
thereof (including in the case of a discounted Debt Security the amount payable
upon acceleration of the maturity thereof), reduce the redemption premium
thereon or reduce the rate or extend the time of payment of interest, if any,
thereon; or (ii) reduce the percentage of principal amount of such Debt
Securities of any series, the consent of the holders of which is required for
any addition or modification or any waiver of any past default. (Section 10.02)
Events of Default
An Event of Default with respect to any series of Debt Securities is any one
of the following events:
. a default in any payment of principal or premium, if any, on any Debt
Security of such series;
. a default for 30 days in the payment of any interest on any Debt Security
of such series;
. a default in the making or satisfaction of any sinking fund payment or
analogous obligation of the Debt Securities of such series;
. a default for 60 days after written notice to GE Global by the Trustee or
the holders of at least 25% in aggregate principal amount of the Debt
Securities of such series in the performance of any other covenant in
respect of the Debt Securities of such series contained in the Indenture;
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<PAGE>
. a default, as defined, with respect to any other series of Debt
Securities outstanding under the Indenture or as defined in any other
indenture or instrument evidencing or under which GE Global has
outstanding any indebtedness for borrowed money, as a result of which
such other series or such other indebtedness of GE Global shall have been
accelerated and such acceleration shall not have been annulled within 10
days after written notice thereof by the Trustee or the holders of at
least 25% in aggregate principal amount of the Debt Securities of such
series, provided that the resulting Event of Default with respect to such
series of Debt Securities may be remedied, cured or waived by the
remedying, curing or waiving of such other default under such other
series or such other indebtedness; or
. certain events in bankruptcy, insolvency or reorganization.
(Section 6.01)
The Indenture requires GE Global to deliver to the Trustee annually a
written statement as to the presence or absence of any default under the terms
thereof. (Section 4.05) No Event of Default with respect to a particular series
of Debt Securities under the Indenture necessarily constitutes an Event of
Default with respect to any other series of Debt Securities. The Indenture
provides that the Trustee may withhold notice to the holders of any series of
Debt Securities issued thereunder of any default (except in the payment of
principal, premium, if any, or interest, if any, on any of the Debt Securities
of such series or in the making of any sinking fund instalment or analogous
obligation with respect to such series) if the Trustee considers it in the
interest of such securityholders to do so. (Section 6.08)
If an Event of Default with respect to any series of Debt Securities is
continuing, either the Trustee or the holders of 25% in aggregate principal
amount of the outstanding Debt Securities of such series may declare the
principal, or in the case of discounted Debt Securities, such portion thereof
as may be described in the Prospectus Supplement accompanying this Prospectus,
of all such Debt Securities to be due and payable immediately. However, under
certain conditions the holders of a majority in principal amount of such Debt
Securities then outstanding may annul such declaration. The holders of a
majority in principal amount of all Debt Securities of a particular series then
outstanding may waive on behalf of the holders of all Debt Securities of such
series any past defaults with respect to such series (except, unless
theretofore cured, a default in the payment of principal of, premium, if any,
or interest, if any, on any of the Debt Securities of such series, or the
payment of any sinking fund instalment or analogous obligation on the Debt
Securities of such series or in respect of a covenant or provision which cannot
be modified without the consent of the holder of each Debt Security affected).
(Sections 6.01 and 6.07)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default with respect to any series of Debt
Securities shall occur and be continuing, the Trustee will not be under any
obligation to exercise any of its rights or powers under the Indenture at the
request, order or direction of any holders of Debt Securities of any series
issued thereunder unless such holders shall have offered to the Trustee
reasonable indemnity. (Sections 7.01 and 7.02) Subject to such indemnification
provision, the Indenture provides that the holders of a majority in principal
amount of the Debt Securities of any series issued thereunder at the time
outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with respect to the Debt
Securities of such series, provided that the Trustee may decline to follow any
such direction if it has not been offered reasonable indemnity therefor or if
it determines that the proceedings so directed would be illegal or involve it
in any personal liability. (Section 6.07)
Concerning the Trustee
The Chase Manhattan Bank acts as trustee under several indentures with
affiliates of GE Global and other subsidiaries of General Electric Company.
Any material business and other relationships (including additional
trusteeships), other than the present and prospective trusteeships referred to
in the foregoing paragraph, between, on the one hand, GE Global,
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General Electric Company or other affiliates of General Electric Company and,
on the other hand, the Trustee are described in the Prospectus Supplement
accompanying this Prospectus.
PLAN OF DISTRIBUTION
We may sell any issue of the Debt Securities in any one or more of the
following ways:
.through one or more underwriters or dealers;
.directly to one or more purchasers; or
.through one or more agents.
From time to time, we may receive, and may solicit, offers from underwriters
to purchase all or a part of the Debt Securities, to be reoffered to the public
through underwriting syndicates led by one or more managing underwriters or
through one or more underwriters acting alone or otherwise. The managing
underwriter or underwriters, if any, with respect to the offer and sale of the
Debt Securities to which the Prospectus Supplement accompanying this Prospectus
relates are set forth in such Prospectus Supplement and the members of the
underwriting syndicate, if any, are named in such Prospectus Supplement. We
will execute an underwriting agreement with any such underwriters and the names
of the underwriters and the terms of the transaction will be set forth in the
Prospectus Supplement. The Prospectus Supplement will be used by the
underwriters to make resales of the Debt Securities in respect of which this
Prospectus is delivered to the public. Such Prospectus Supplement also states
the discounts and commissions, if any, we will or are allowed to pay to the
underwriters and describes all other items, if any, constituting underwriting
compensation and the discounts and commissions we will, or are allowed to, pay
the dealers, if any. If underwriters or dealers are used in the sale, the
underwriters or dealers will acquire the Debt Securities for their own account
and may resell the Debt Securities from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined by the underwriter or dealer at the time
of sale. The relevant underwriting agreement will provide that the obligations
of the underwriters are subject to certain conditions precedent, and GE Global
will agree, under the underwriting agreement, to indemnify the underwriters
against certain civil liabilities, including liabilities under the Securities
Act of 1933.
Any agent involved in the offer or sale of the Debt Securities in respect of
which this Prospectus is delivered will be named, and any commissions payable
by GE Global to such agent will be set forth, in the Prospectus Supplement
accompanying this Prospectus. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the
period of its appointment. Agents and dealers may be entitled under agreements
entered into with GE Global to indemnification by GE Global against certain
civil liabilities, including liabilities under the Securities Act of 1933.
For further information with respect to the terms of the offering of Debt
Securities in respect of which this Prospectus is being delivered, see the
Prospectus Supplement accompanying this Prospectus.
LEGAL MATTERS
Except as may be otherwise specified in the Prospectus Supplement
accompanying this Prospectus, certain legal matters in connection with the Debt
Securities will be passed upon for GE Global by Simpson Thacher & Bartlett, New
York, New York, and for the underwriters, agents or dealers by Davis Polk &
Wardwell, New York, New York.
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EXPERTS
The financial statements and schedules of GE Global Insurance Holding
Corporation and its subsidiaries as of December 31, 1999 and 1998 and for each
of the years in the three-year period ended December 31, 1999 have been
incorporated by reference herein and in the registration statement in reliance
upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
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