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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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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): October 1, 1999
FORTIS BENEFITS INSURANCE COMPANY
(Exact Name of Registrant
as Specified in Charter)
Minnesota 33-46620 81-0170040
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(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
500 Bielenberg Drive, Woodbury, MN 55125
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (651) 738-4000
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Effective as of October 1, 1999, Fortis Benefits Insurance Company, a
Minnesota insurance company (the "Registrant" or "FBIC"), entered into a
Reinsurance Agreement with the Registrant's sister company, United Family Life
Insurance Company, a Georgia insurance company ("UFL"), whereby the Registrant
will reinsure substantially all of the insurance business of UFL. The
reinsurance will be effected by means of 100% coinsurance.
Pursuant to the Reinsurance Agreement, FBIC will reinsure (i) all
insurance policies written by UFL prior to the effective date of October 1,
1999, except for participating life insurance contracts and policies that have
been ceded to or assumed from UFL's sister company, Union Security Life
Insurance Company, and (ii) all insurance policies written by UFL after the
effective date as requested by UFL from time to time. The aggregate liabilities
ceded to FBIC as of October 1, 1999 are approximately $740 million, and the
parties estimate that an additional $40 million of renewal premiums will be
ceded to FBIC each calendar year thereafter. The Reinsurance Agreement will
remain in effect indefinitely, until all reinsured policies have been cancelled
or terminated. UFL will remain responsible for all administration of the
reinsured policies, and FBIC will reimburse UFL for the costs of such
administration.
Effective as of October 1, 1999, UFL transferred to FBIC assets having
an aggregate market value of approximately $675 million, and FBIC paid to UFL a
ceding commission of approximately $65 million. None of the assets transferred
to FBIC will be transferred to any other person, including any Fortis affiliate
or any non-affiliate. The assets transferred to FBIC will consist of cash and
other investment assets presently held by UFL, including equities, corporate and
government bonds, mortgages, policy loans and investments in real estate.
The Insurance Departments of the States of Georgia and Minnesota
previously approved this transaction. This reinsurance transaction is part of a
larger internal reorganization of the Fortis, Inc. life and health companies.
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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.
FORTIS BENEFITS
INSURANCE COMPANY
BY: /s/ David A. Peterson
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NAME: David A. Peterson
TITLE: Vice President
Assistant General Counsel
Dated: October 13, 1999
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