e8vk
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
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Date of report (Date of earliest event reported)
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January 17, 2006 |
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Annuity and Life Re (Holdings), Ltd.
(Exact name of registrant as specified in its charter)
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| Bermuda
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1-16561
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66-0619270 |
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.) |
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| Cumberland House, 1 Victoria Street, Hamilton, Bermuda
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HM 11 |
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| (Address of Principal Executive Offices)
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(Zip Code) |
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Registrant’s telephone number, including area code:
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(441) 296-7667 |
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|
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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| Item 1.01. |
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Entry Into a Definitive Material Agreement. |
On August 10, 2005, Annuity and Life Reassurance America, Inc. and Annuity and Life
Reassurance, Ltd. (collectively, the “Annuity Subsidiaries”), each a direct or indirect wholly
owned operating subsidiary of Annuity and Life Re (Holdings), Ltd. (“Annuity”), entered into a
Master Agreement (the “Master Agreement”) with Prudential Select Life Insurance Company of America
(which has subsequently been renamed Wilton Reassurance Company) and Wilton Reinsurance Bermuda
Limited (collectively, the “Wilton Subsidiaries”), each a direct or indirect wholly owned operating
subsidiary of Wilton Re Holdings, Ltd. The Master Agreement provided for the novation to or 100%
coinsurance by the Wilton Subsidiaries of all of the Annuity Subsidiaries’ life and annuity
reinsurance treaties identified in the Master Agreement (the “Treaties”), effective as of June 30,
2005 (the “Effective Date”).
As discussed in Item 2.01 below, the transactions contemplated by the Master Agreement were
consummated on January 17, 2006 (the “Closing Date”). Because the Annuity Subsidiaries and the
Wilton Subsidiaries did not obtain the consent of the counterparties to certain Treaties, which
would have allowed those Treaties to be novated to the appropriate Wilton Subsidiary, on the
Closing Date, the appropriate Annuity Subsidiary and Wilton Subsidiary entered into Coinsurance
Agreements (the “Coinsurance Agreements”) providing for the 100% indemnity coinsurance of such
Treaties, effective as of the Effective Date. Approximately $1.1 billion of the Annuity
Subsidiaries’ life insurance in force as of the Effective Date has been 100% reinsured through the
Coinsurance Agreements.
As a result of entering into a 100% indemnity coinsurance arrangement covering the Treaties
that were not novated, the Annuity Subsidiaries continue to be bound, as reinsurers, by the
original Treaties with the primary insurer. The appropriate Wilton Subsidiary is, in turn, subject
to the terms and conditions of the applicable Coinsurance Agreement, obligated to reimburse the
appropriate Annuity Subsidiary for any payments made under a coinsured Treaty. In addition, the
Coinsurance Agreements provide that, beginning on the Transition Date (as defined below), the
Wilton Subsidiaries will provide all administrative and management services necessary to administer
and manage the Treaties covered by the Coinsurance Agreements, as well as any associated ancillary
agreements or retrocession agreements.
The Master Agreement requires the Annuity Subsidiaries and the Wilton Subsidiaries to continue
to use commercially reasonable efforts to obtain the consent of each counterparty to each of the
Treaties that was not novated to allow the novation of such Treaties to the Wilton Subsidiaries.
To the extent a Treaty is novated to the Wilton Subsidiaries after the Closing Date, it would no
longer be covered by the Coinsurance Agreements.
For additional information regarding the closing of the transactions contemplated by the
Master Agreement, please see Item 2.01.
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| Item 2.01. |
|
Completion of Acquisition or Disposition of Assets. |
As noted in Item 1.01 above, on the Closing Date, the Annuity Subsidiaries and the Wilton
Subsidiaries consummated the transactions contemplated by the Master Agreement, effective as of the
Effective Date. As a result, each of the Treaties has been novated to, or coinsured by, the Wilton
Subsidiaries. The Treaties comprised all of the Annuity Subsidiaries’ remaining reinsurance
treaties as of the Closing Date.
At the closing, the Annuity Subsidiaries transferred to the Wilton Subsidiaries the rights to
certain funds withheld by ceding companies that, at the Effective Date, had a value of
approximately $58.4 million. Further, the Annuity Subsidiaries transferred to the Wilton
Subsidiaries certain investment assets that had been purchased following the execution of the
Master Agreement for approximately $32.6 million, as well as cash in the net amount of
approximately $547,000. In addition, pursuant to the terms of the Master Agreement, within five
business days following the Closing Date, the Annuity Subsidiaries shall calculate the cash flows
arising from the Treaties and the earnings on the invested assets transferred to the Wilton
Subsidiaries between the Effective Date and the Closing Date. If such cash flows are positive,
such positive amount will be paid to the Wilton Subsidiaries. If such cash flows and earnings are
negative, the negative of that amount will be credited to the Annuity Subsidiaries.
Pursuant to the terms of the Master Agreement and a supplemental letter agreement entered into
between the Annuity Subsidiaries and the Wilton Subsidiaries, between the Closing Date and March
15, 2006 (the “Transition Date”), the Annuity Subsidiaries will continue to administer the Treaties
in a manner consistent with current practices. The Wilton Subsidiaries will pay the Annuity
Subsidiaries a fee of $30,000 per month for these administration services and will reimburse the
Annuity Subsidiaries to the extent that the cost of any approved third party engaged to provide
such services exceeds the $30,000 fee.
The Master Agreement also includes mutual indemnification provisions covering, among other
things, all costs and expenses arising or resulting from any breach of any representation or
warranty, any breach of any covenant and certain excluded liabilities. Neither the Annuity
Subsidiaries nor the Wilton Subsidiaries will have any liability for indemnification with respect
to losses relating to breaches of representations or warranties under the Master Agreement, unless
and until the total of all such losses exceeds $25,000, and then only for the amount by which such
losses exceed $25,000. The total liability for losses relating to breaches of representations or
warranties under the Master Agreement shall not exceed $2,000,000 in the aggregate for the Annuity
Subsidiaries, on the one hand, or the Wilton Subsidiaries, on the other hand. In order to secure
their indemnification obligations under the Master Agreement, each of the Annuity Subsidiaries is
required to maintain statutory capital and surplus of at least $2,000,000 for 18 months following
the Closing Date, and Annuity has agreed not to take any action that would reduce the statutory
capital and surplus of the Annuity Subsidiaries below such levels.
For a discussion of the pro forma impact of the transactions contemplated by the Master
Agreement, please see Item 9.01.
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| Item 9.01. |
|
Financial Statements and Exhibits. |
(a) Not applicable.
(b) Pro Forma Financial Information.
The following unaudited pro forma consolidated financial statements are presented for
informational purposes to show the effect of the transactions with the Wilton Subsidiaries
described in Items 1.01 and 2.01 of this Form 8-K. The pro forma information presented is based on
assumptions and includes adjustments as explained in the notes to the unaudited pro forma
consolidated financial statements. The unaudited pro forma information presented does not include
any adjustments to reflect transaction costs or the cost of severance payments to Annuity’s former
Chief Executive Officer of approximately $1.16 million.
The unaudited pro forma condensed consolidated balance sheet as of September 30, 2005 is
intended to demonstrate how Annuity’s unaudited condensed consolidated balance sheet would have
looked had the transactions with the Wilton Subsidiaries been consummated on September 30, 2005.
The unaudited pro forma condensed consolidated balance sheet is presented as of September 30, 2005
and reflects the novation to the Wilton Subsidiaries of 21 Treaties and the coinsurance by the
Wilton Subsidiaries of 8 Treaties, pursuant to the Master Agreement. The Company can offer no
estimate as to how many of the ceding companies under the Treaties coinsured by the Wilton
Subsidiaries pursuant to the Coinsurance Agreements will ultimately consent to the novation of the
treaties to the Wilton Subsidiaries.
Annuity and Life Re (Holdings), Ltd.
Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2005
(Unaudited and in U.S. Dollars)
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Reported |
|
|
Adjustments |
|
|
Pro Forma |
|
Assets
|
Cash & invested assets |
|
$ |
92,899,685 |
|
|
$ |
(32,490,788 |
)(A) |
|
$ |
60,408,897 |
|
Funds withheld at interest |
|
|
50,962,885 |
|
|
|
(50,962,885 |
)(B) |
|
|
— |
|
Accrued investment income |
|
|
677,662 |
|
|
|
|
|
|
|
677,662 |
|
Receivable for reinsurance ceded |
|
|
77,016,411 |
|
|
|
1,237,429 |
)(C) |
|
|
78,253,840 |
|
Other reinsurance receivables |
|
|
3,021,878 |
|
|
|
(2,586,522 |
)(D) |
|
|
435,356 |
|
Deferred policy acquisition costs |
|
|
5,592,316 |
|
|
|
(5,592,316 |
)(E) |
|
|
— |
|
Other assets |
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|
401,850 |
|
|
|
|
|
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|
401,850 |
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|
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|
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Total assets |
|
$ |
230,572,687 |
|
|
$ |
(90,395,082 |
) |
|
$ |
140,177,605 |
|
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|
|
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|
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Liabilities
|
Reserves for future policy benefits |
|
$ |
103,758,582 |
|
|
$ |
(24,626,061 |
)(F) |
|
$ |
79,132,521 |
|
Interest sensitive contracts liability |
|
|
50,691,337 |
|
|
|
(50,691,337 |
)(G) |
|
|
— |
|
Other reinsurance liabilities |
|
|
13,202,482 |
|
|
|
(5,767,747 |
)(H) |
|
|
7,434,735 |
|
Accounts payable and accrued expenses |
|
|
2,867,363 |
|
|
|
(49,145 |
)(I) |
|
|
2,818,218 |
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
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|
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Total liabilities |
|
$ |
170,519,764 |
|
|
$ |
(81,134,290 |
) |
|
$ |
89,385,474 |
|
Stockholders’ Equity |
|
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|
|
|
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|
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|
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Total Stockholders’ Equity |
|
$ |
60,052,923 |
|
|
$ |
(9,260,792 |
)(J) |
|
$ |
50,792,131 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Total Liabilities and Stockholders’ Equity |
|
$ |
230,572,687 |
|
|
$ |
(90,395,082 |
) |
|
$ |
140,177,605 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (A) |
|
To record the transfer of cash and invested assets to the Wilton Subsidiaries. |
| |
| (B) |
|
To record the transfer of Funds withheld at interest to the Wilton Subsidiaries. |
| |
| (C) |
|
To record ceded benefit reserves related to reinsurance agreements transferred to the Wilton
Subsidiaries. |
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| (D) |
|
To record the transfer of premiums receivable related to the life reinsurance agreements novated to the
Wilton Subsidiaries. |
| |
| (E) |
|
To write-off the Deferred policy acquisition costs associated with the Treaties novated to the Wilton
Subsidiaries and to record Deferred policy acquisition costs related to life reinsurance agreements
coinsured by the Wilton Subsidiaries. |
| |
| (F) |
|
To record the transfer of benefit reserves associated with the life reinsurance agreements novated to
the Wilton Subsidiaries. |
| |
| (G) |
|
To record the transfer of Interest sensitive contracts liabilities associated with the annuity
reinsurance agreement novated to one of the Wilton Subsidiaries. |
| |
| (H) |
|
To record the transfer of Other reinsurance liabilities associated with the life reinsurance agreements
novated to the Wilton Subsidiaries. |
| |
| (I) |
|
To record the transfer of excise tax payable associated with the life reinsurance agreements novated to
the Wilton Subsidiaries. |
| |
| (J) |
|
To record to net effect of the novation and coinsurance transactions with the Wilton Subsidiaries in
Stockholders’ equity. |
The unaudited pro forma condensed consolidated statement of operations for the nine
months ended September 30, 2005 adjusts the reported GAAP statement of operations by assuming that
(1) the effective date of the transactions with the Wilton Subsidiaries was January 1, 2005, and
(2) there was no gain or loss from the transactions with the Wilton Subsidiaries. No attempt has
been made to estimate the impact of the aforementioned adjustments on cash flow for the periods
presented, on net investment income earned on assets transferred to third parties in connection
with the novated life reinsurance agreements or on operating expenses. The unaudited pro forma
information presented below is not necessarily indicative of the financial results that would have
been attained had the transactions occurred on the dates referenced above and should not be viewed
as indicative of operations in future periods.
Annuity & Life Re (Holdings) Ltd.
Pro Forma Consolidated Statement of Operations for the Nine Months Ended September 30, 2005
(Unaudited and in U.S. Dollars)
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|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Wilton |
|
|
|
|
| |
|
|
|
|
|
Transaction |
|
|
|
|
| |
|
Reported |
|
|
Adjustments |
|
|
Pro Forma |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums |
|
$ |
12,001,008 |
|
|
$ |
(11,325,272 |
)(A) |
|
$ |
675,736 |
|
Investment income, net of related expenses |
|
|
4,806,689 |
|
|
|
(1,938,486 |
)(B) |
|
|
2,868,203 |
|
Net realized investment gains |
|
|
500,650 |
|
|
|
— |
|
|
|
500,650 |
|
Net change in fair value of embedded derivatives |
|
|
1,105,853 |
|
|
|
(1,105,853 |
)(C) |
|
|
— |
|
Surrender fees and other revenues |
|
|
94,887 |
|
|
|
(94,887 |
)(D) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues |
|
$ |
18,509,087 |
|
|
$ |
(14,464,498 |
) |
|
$ |
4,044,589 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Claims and policy benefits |
|
$ |
10,781,404 |
|
|
$ |
(12,675,325 |
)(E) |
|
$ |
(1,893,921 |
) |
Interest credited to interest sensitive products |
|
|
985,614 |
|
|
|
(985,614 |
)(F) |
|
|
— |
|
Policy acquisition costs and other insurance expenses |
|
|
3,079,459 |
|
|
|
(2,370,965 |
)(G) |
|
|
708,494 |
|
Operating expenses |
|
|
7,599,723 |
|
|
|
— |
|
|
|
7,599,723 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Benefits and Expenses |
|
$ |
22,446,200 |
|
|
$ |
(16,031,904 |
) |
|
$ |
6,414,296 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before cumulative effect of a change in accounting principal |
|
$ |
(3,937,113 |
) |
|
$ |
1,567,406 |
|
|
$ |
(2,369,707 |
) |
Cumulative effect of a change in accounting principal |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(3,937,113 |
) |
|
$ |
1,567,406 |
|
|
$ |
(2,369,707 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share before cumulative effect of change in accounting
principal per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.16 |
) |
|
$ |
0.06 |
|
|
$ |
(0.09 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Wilton |
|
|
|
|
| |
|
|
|
|
|
Transaction |
|
|
|
|
| |
|
Reported |
|
|
Adjustments |
|
|
Pro Forma |
|
Diluted |
|
$ |
(0.16 |
) |
|
$ |
0.06 |
|
|
$ |
(0.09 |
) |
Cumulative effect of a change in accounting principal per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
— |
|
|
|
|
|
|
$ |
— |
|
Diluted |
|
$ |
— |
|
|
|
|
|
|
$ |
— |
|
Net loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.16 |
) |
|
$ |
0.06 |
|
|
$ |
(0.09 |
) |
Diluted |
|
$ |
(0.16 |
) |
|
$ |
0.06 |
|
|
$ |
(0.09 |
) |
|
|
|
| (A) |
|
To reflect reduced Premiums as if the life reinsurance treaties novated to or coinsured by the Wilton
Subsidiaries did not exist during the first nine months of 2005. |
| |
| (B) |
|
To reflect reduced Net investment income as if the annuity reinsurance treaty novated to one of the Wilton Subsidiaries did not exist
during the first nine months of 2005. |
| |
| (C) |
|
To reflect no embedded derivative as if the annuity reinsurance treaty novated to one of the Wilton Subsidiaries did not exist during the
first nine months of 2005. |
| |
| (D) |
|
To reflect reduced Surrender fees as if the annuity reinsurance treaty novated to one of the Wilton Subsidiaries did not exist during the
first nine months of 2005. |
| |
| (E) |
|
To reflect reduced Claim and Policy Benefits as if the life reinsurance treaties novated to or coinsured by the Wilton Subsidiaries did not
exist during the first nine months of 2005. |
| |
| (F) |
|
To reflect reduced Interest credited to interest sensitive products as if the annuity reinsurance treaty novated to one of the Wilton
Subsidiaries did not exist during the first nine months of 2005. |
| |
| (G) |
|
To reflect reduced Policy acquisition costs and other insurance expenses as if the Treaties novated to or coinsured by the Wilton
Subsidiaries did not exist during the first nine months of 2005. |
The unaudited pro forma condensed consolidated statement of operations for the year ended
December 31, 2004 adjusts the reported GAAP statement of operations by assuming that (1) all of
Annuity’s novation, recapture and termination transactions that had effective dates in 2004
occurred on January 1, 2004 (which removes from reported net (loss) the actual performance for each
agreement through its novation, recapture or termination date), (2) the effective date of the
transactions with the Wilton Subsidiaries was January 1, 2004, and (3) there was no gain or loss
from the transactions with the Wilton Subsidiaries. No attempt has been made to estimate the
impact of the aforementioned adjustments on cash flow for the periods presented, on net investment
income earned on assets transferred to third parties in connection with the novated and coinsured
life reinsurance agreements or on operating expenses. The unaudited pro forma information
presented below is not necessarily indicative of the financial results that would have been
attained had the transactions occurred on the dates referenced above and should not be viewed as
indicative of operations in future periods.
Annuity and Life Re (Holdings), Ltd.
Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2004
(Unaudited and in U.S. Dollars)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(as adjusted |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for the 2004 |
|
| |
|
|
|
|
|
|
|
|
|
Pro Forma |
|
|
Adjustments |
|
|
transactions |
|
| |
|
|
|
|
|
Adjustments |
|
|
(as adjusted |
|
|
(for the |
|
|
and the |
|
| |
|
|
|
|
|
(for the 2004 |
|
|
for the 2004 |
|
|
Wilton |
|
|
Wilton |
|
| |
|
Reported |
|
|
transactions) |
|
|
transactions) |
|
|
transaction) |
|
|
transaction) |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums |
|
$ |
48,297,706 |
|
|
$ |
(30,325,348 |
)(A) |
|
$ |
17,972,358 |
|
|
$ |
(15,898,984 |
)(H) |
|
$ |
2,073,374 |
|
Investment income, net of related expenses |
|
|
21,697,563 |
|
|
|
(13,439,098 |
)(B) |
|
|
8,258,465 |
|
|
|
(2,923,139 |
)(I) |
|
|
5,335,326 |
|
Net realized investment gains |
|
|
439,536 |
|
|
|
— |
|
|
|
439,536 |
|
|
|
|
|
|
|
439,536 |
|
Net change in fair value of embedded derivatives |
|
|
2,181,070 |
|
|
|
— |
|
|
|
2,181,070 |
|
|
|
(2,181,070 |
)(J) |
|
|
— |
|
Surrender fees and other revenues |
|
|
4,475,691 |
|
|
|
(4,257,721 |
)(C) |
|
|
217,970 |
|
|
|
(217,970 |
)(K) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues |
|
$ |
77,091,566 |
|
|
$ |
(48,022,167 |
) |
|
$ |
29,069,399 |
|
|
$ |
(21,221,163 |
) |
|
$ |
7,848,237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claims and policy benefits |
|
$ |
14,101,129 |
|
|
|
(306,552 |
)(D) |
|
$ |
13,794,577 |
|
|
|
(13,990,062 |
)(L) |
|
|
(195,485 |
) |
Interest credited to interest sensitive products |
|
|
5,399,460 |
|
|
|
(3,530,883 |
)(E) |
|
|
1,868,577 |
|
|
|
(1,868,577 |
)(M) |
|
|
— |
|
Policy acquisition costs and other insurance expenses |
|
|
110,922,948 |
|
|
|
(105,602,277 |
)(F) |
|
|
5,320,671 |
|
|
|
(3,987,088 |
)(N) |
|
|
1,333,583 |
|
Operating expenses |
|
|
14,628,524 |
|
|
|
— |
|
|
|
14,628,524 |
|
|
|
|
|
|
|
14,628,524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Benefits and Expenses |
|
$ |
145,052,061 |
|
|
|
(109,439,712 |
) |
|
$ |
35,612,349 |
|
|
$ |
(19,845,727 |
) |
|
$ |
15,766,622 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(as adjusted |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for the 2004 |
|
| |
|
|
|
|
|
|
|
|
|
Pro Forma |
|
|
Adjustments |
|
|
transactions |
|
| |
|
|
|
|
|
Adjustments |
|
|
(as adjusted |
|
|
(for the |
|
|
and the |
|
| |
|
|
|
|
|
(for the 2004 |
|
|
for the 2004 |
|
|
Wilton |
|
|
Wilton |
|
| |
|
Reported |
|
|
transactions) |
|
|
transactions) |
|
|
transaction) |
|
|
transaction) |
|
Loss before cumulative effect of a change in
accounting principal |
|
$ |
(67,960,495 |
) |
|
|
61,417,545 |
|
|
$ |
(6,542,950 |
) |
|
$ |
(1,375,436 |
) |
|
$ |
(7,918,386 |
) |
Cumulative effect of a change in accounting principal |
|
|
(365,960 |
) |
|
|
365,960 |
(G) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(68,326,455 |
) |
|
$ |
61,783,505 |
|
|
$ |
(6,542,950 |
) |
|
$ |
(1,375,436 |
) |
|
$ |
(7,918,386 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share before cumulative effect of
change in accounting principal per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(2.63 |
) |
|
$ |
2.38 |
|
|
$ |
(0.25 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.31 |
) |
Diluted |
|
$ |
(2.63 |
) |
|
$ |
2.38 |
|
|
$ |
(0.25 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.31 |
) |
Cumulative effect of a change in accounting principal
per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.01 |
) |
|
$ |
0.01 |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
Diluted |
|
$ |
(0.01 |
) |
|
$ |
0.01 |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
Net loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(2.64 |
) |
|
$ |
2.39 |
|
|
$ |
(0.25 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.31 |
) |
Diluted |
|
$ |
(2.64 |
) |
|
$ |
2.39 |
|
|
$ |
(0.25 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.31 |
) |
|
|
|
| (A) |
|
To reflect reduced Premiums as if the Scottish Re Limited (“Scottish Re”) and Fidelity and Guaranty Life Insurance Company (“F&G”) life reinsurance agreements novated to Transamerica Occidental Life Insurance Company
(“Transamerica”) and as if the guaranteed minimum death benefits (“GMDB”) and guaranteed minimum income benefits (“GMIB”) agreement recaptured by Connecticut General Life Insurance Company (“CIGNA”) did not exist in 2004 |
| |
| (B) |
|
To reflect reduced Net investment income as if the Transamerica annuity agreement did not exist in 2004. |
| |
| (C) |
|
To reflect reduced Surrender fees and other revenues as if the Transamerica annuity agreement did not exist in 2004. |
| |
| (D) |
|
To reflect reduced Claim and Policy Benefits as if the Scottish Re and F&G life reinsurance agreements novated to Transamerica and as if the GMDB/ GMIB agreement recaptured by CIGNA did not exist in 2004. |
| |
| (E) |
|
To reflect reduced Interest credited to interest sensitive products as if the Transamerica annuity agreement did not exist in 2004. Includes the release of interest sensitive contracts liability net of funds withheld at
interest and the termination premium of $14,000,000 paid to Transamerica in consideration of the termination of this agreement as of December 1, 2004. |
| |
| (F) |
|
To reflect reduced Policy acquisition costs and other insurance expenses as if the Transamerica annuity agreement, the Scottish Re and F&G life reinsurance agreements novated to Transamerica and the GMDB/ GMIB agreement
recaptured by CIGNA did not exist in 2004. Includes the write down of deferred acquisition costs of approximately $63,100,000 associated with the termination of the Transamerica annuity agreement and approximately
$24,900,000 associated with the novation of Scottish Re and F&G life agreements as of December 31, 2004. |
| |
| (G) |
|
To reflect the reversal of the application of SOP 03-1 to the GMDB/ GMIB agreement recaptured by CIGNA and the Transamerica annuity agreement as if those agreements did not exist in 2004. |
| |
| (H) |
|
To reflect reduced Premiums as if the life reinsurance agreements novated to or coinsured by Wilton did not exist in 2004. |
| |
| (I) |
|
To reflect reduced Net investment income as if the annuity reinsurance agreement novated to one of the Wilton Subsidiaries did not exist in 2004. |
| |
| (J) |
|
To reflect no embedded derivative as if the annuity reinsurance treaty novated to one of the Wilton Subsidiaries did not exist in 2004. |
| |
| (K) |
|
To reflect reduced Surrender fees as if the annuity reinsurance agreement novated to one of the Wilton Subsidiaries did not exist in 2004. |
| |
| (L) |
|
To reflect reduced Claim and Policy Benefits as if the life reinsurance agreements novated to or coinsured by the Wilton Subsidiaries did not exist in 2004. |
| |
| (M) |
|
To reflect reduced Interest credited to interest sensitive products as if the annuity reinsurance agreement novated to one of the Wilton Subsidiaries did not exist during in 2004. |
| |
| (N) |
|
To reflect reduced Policy acquisition costs and other insurance expenses as if the Treaties novated to or coinsured by the Wilton Subsidiaries did not exist in 2004. |
(c) Not applicable.
(d) Exhibits.
10.1* Coinsurance Agreement between Annuity and Life Reassurance America, Inc. and Wilton
Reassurance Company (formerly known as Prudential Select Life Insurance Company of America), dated
January 17, 2006.
10.2* Coinsurance Agreement between Annuity and Life Reassurance, Ltd. and Wilton Reinsurance
Bermuda Limited, dated January 17, 2006.
*Exhibits and schedules omitted. The registrant will furnish a supplementary copy of any omitted
exhibit or schedule to the SEC upon request.
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.
| |
|
|
|
|
| |
ANNUITY AND LIFE RE (HOLDINGS), LTD.
|
|
| Date: January 18, 2006 |
By: |
/s/ John W. Lockwood
|
|
| |
|
John W. Lockwood |
|
| |
|
Chief Financial Officer |
|
Exhibit Index
10.1* Coinsurance Agreement between Annuity and Life Reassurance America, Inc. and Wilton
Reassurance Company (formerly known as Prudential Select Life Insurance Company of America), dated
January 17, 2006.
10.2* Coinsurance Agreement between Annuity and Life Reassurance, Ltd. and Wilton Reinsurance
Bermuda Limited, dated January 17, 2006.
*Exhibits and schedules omitted. The registrant will furnish a supplementary copy of any omitted
exhibit or schedule to the SEC upon request.