SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993 Commission file no. 1-7434
_________________ ______
AFLAC INCORPORATED
_________________________________________________________________________
(Exact name of Registrant as specified in its charter)
Georgia 58-1167100
____________________________________ ____________________________
(State of Incorporation) (I.R.S. Employer
Identification No.)
1932 Wynnton Road, Columbus, Georgia 31999
____________________________________ ____________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 706-323-3431
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of Each Exchange
Title of Each Class on Which Registered
___________________________________________________________________
Common Stock, $.10 Par Value New York Stock Exchange
Pacific Stock Exchange
Tokyo Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes x No .
____ ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K.
________
The number of shares of the registrant's Common Stock outstanding at March
18, 1994, with $.10 par value, was 102,585,388. The aggregate market
value of the voting stock held by non-affiliates of the registrant as of
March 18, 1994 was $3,103,576,720.
PAGE
DOCUMENTS INCORPORATED BY REFERENCE
PART I Item 1 Pages 13-5 to 13-13; 13-22 to 13-28 and
13-34 of Exhibit 13 (notes 2, 3 and 9 of
Notes to the Consolidated Financial
Statements) The applicable portions of the
Company's Annual Report to Shareholders for
the year ended December 31, 1993, are
included as Exhibit 13
Item 2 Pages 13-13 and 13-29 (note 5) of Exhibit 13
PART II Item 5 Pages 13-1, 13-2 and 13-34 (note 9) of
Exhibit 13
Item 6 Pages 13-3 and 13-4 of Exhibit 13
Item 7 Pages 13-5 to 13-13 of Exhibit 13
Item 8 Pages 13-14 to 13-40 of Exhibit 13
PART III Item 10 Incorporated by reference from the
definitive Proxy Statement for the Annual
Meeting of Shareholders to be held April
25, 1994 (the "Proxy Statement")
Item 11 Incorporated by reference from the Proxy
Statement
Item 12 Incorporated by reference from the Proxy
Statement
Item 13 Incorporated by reference from the Proxy
Statement
AFLAC Incorporated
Annual Report on Form 10-K
For the Year Ended December 31, 1993
Table of Contents
Page
______
PART I
Item 1. Business............................................. I- 1
Item 2. Properties........................................... I-11
Item 3. Legal Proceedings.................................... I-12
Item 4. Submission of Matters to a Vote of Security Holders.. I-13
Item 4A. Executive Officers of the Company.................... I-14
PART II
Item 5. Market for Company's Common Equity and Related
Shareholder Matters................................ II- 1
Item 6. Selected Financial Data.............................. II- 1
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations................ II- 1
Item 8. Financial Statements and Supplementary Data.......... II- 1
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure................ II- 1
PART III
Item 10. Directors and Executive Officers of the Company...... III- 1
Item 11. Executive Compensation............................... III- 1
Item 12. Security Ownership of Certain Beneficial Owners and
Management......................................... III- 1
Item 13. Certain Relationships and Related Transactions....... III- 1
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K........................................ IV- 1
PAGE
PART I
ITEM 1. BUSINESS
GENERAL DESCRIPTION:
AFLAC Incorporated (the "Parent Company") was incorporated in 1973,
under the laws of the State of Georgia, and acts as a general business
holding company. The Parent Company is a management company principally
engaged, through its insurance subsidiaries, in providing supplemental
health insurance in the United States and Japan. Additionally, the Parent
Company through subsidiaries operates in television broadcasting and other
industries. As a management company, the Parent Company oversees the
operations of its subsidiaries and provides capital and management
services.
AFLAC Incorporated and its subsidiaries ("the Company") have only one
significant industry segment - insurance. For financial information
relating to the Company's foreign and U.S. operations, see Exhibit 13,
pages 13-5 to 13-13 and page 13-22 (note 2 of Notes to the Consolidated
Financial Statements), which are incorporated herein by reference.
The Parent Company's principal operating subsidiary is American
Family Life Assurance Company of Columbus ("AFLAC"), which has both U.S.
and foreign operations (principally in Japan). AFLAC is a specialty
insurer whose dominant business is individual supplemental health
insurance with emphasis on the sale of cancer expense insurance plans.
Management believes AFLAC is the world's leading writer of cancer expense
insurance. The Japanese operation ("AFLAC Japan") also sells long-term
care plans ("Super Care"), old age assistance plans ("dementia care") and
supplemental general medical expense plans. The United States operation
("AFLAC U.S."), in addition to cancer expense plans, also sells other
types of supplemental health insurance, including hospital intensive care,
accident and disability, hospital indemnity, long-term care, home health
care and Medicare supplement plans. AFLAC U.S. also offers several life
insurance plans.
AFLAC, or through its subsidiaries, is authorized to conduct
insurance business in all 50 states, the District of Columbia, American
Samoa, Guam, Puerto Rico, the U.S. Virgin Islands, the Commonwealth of the
Northern Mariana Islands and several foreign countries. The Company's
only significant foreign operations are those of AFLAC's branch in Japan,
which accounted for 82% of the Company's total revenues in 1993.
Insurance premiums and investment income from insurance operations
are the major sources of revenues. The Company's consolidated premium
income was $4.2 billion for 1993, $3.4 billion for 1992 and $2.8 billion
for 1991. The following table lists, for each of the last three years,
the percentage of consolidated premiums contributed by each class of
insurance sold:
Percentage of
Insurance Class Consolidated Premium Income
______________________ ___________________________________
1993 1992 1991
______ ______ ______
Health insurance 99.6% 99.2% 99.0%
Life insurance 0.3 0.4 0.5
Credit insurance* 0.1 0.4 0.5
* During 1992, the marketing of credit insurance was discontinued.
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PAGE
The following table sets forth consolidated earned premiums by each
class and information with respect to the health insurance plans,
primarily cancer, offered by AFLAC principally in Japan and the United
States for the three years ended December 31.
Earned premiums (in thousands): 1993 1992 1991
__________ __________ __________
Health insurance $ 4,205,637 $ 3,342,439 $ 2,737,646
Life insurance 14,488 14,642 14,665
Credit insurance 5,265 12,120 13,038
__________ __________ __________
Total earned premiums $ 4,225,390 $ 3,369,201 $ 2,765,349
========= ========= =========
Health insurance plans:
No. of policies issued 1,954,417 1,923,232 1,840,068
No. of policies terminated 1,122,952 1,002,020 982,508
No. of policies in force
at year-end 15,478,468 14,647,003 13,725,791
INVESTMENTS AND INVESTMENT RESULTS:
The Company's investments (including cash) amounted to $12.5 billion
at December 31, 1993, an increase of $3.0 billion over 1992. Net
investment income of $689.3 million in 1993 continues to be a growing
source of revenues and earnings of the Company, increasing $156.1 million
in 1993 over 1992 and $101.9 million in 1992 over 1991. It is generally
AFLAC's policy to invest in high-grade investments, principally in high-
quality government, public utility and corporate bonds.
AFLAC primarily operates within the investment environments of the
United States and Japan. Although aspects of these two financial markets
are slowly converging, they remain fundamentally different. For example,
differences in asset selection, liquidity, credit quality, accounting
practices, and insurance and tax regulations affects the way the Company
invests and purchases securities.
The challenge is to integrate the varied market characteristics of
Japan and the United States into a unified and coherent set of investment
strategies. The Company has streamlined and integrated the organizational
structure of the investment department into a single functional unit and
has set specific worldwide criteria regarding credit quality, liquidity,
compliance with regulatory requirements and conformance to product needs.
During 1993, 91.5% of AFLAC Japan's yen cash flow available for
investments was allocated to yen-denominated securities, while the
remaining 8.5% was invested in dollar-denominated securities. Of the
total amount invested in 1993, 37.7% was invested in Japanese government
bonds at a yield of 5.56%, 29.1% was invested in the longer-dated private
sector at a rate of 5.95%, 5.6% was invested in municipal bonds at a rate
of 4.31%, and the remaining 19.1% of yen cash flow was invested in yen in
assorted sectors at an average rate of 4.80%.
At year-end 1993, Japanese government bonds accounted for 33.7% of
AFLAC Japan's yen-denominated investments. Twenty-year government bonds
accounted for 84% of AFLAC Japan's government bond holdings. AFLAC Japan
continued to use longer-dated corporate instruments in 1993. These yen-
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denominated securities, which the Company has arranged with groups such as
McDonald's, AMP Japan and the Canadian Province of Quebec, are essential
in achieving the optimal asset/liability match, an investment goal vital
to the Company's overall strategy. Such longer-dated instruments
accounted for 17.2% of the invested assets in Japan at year-end. Other
sectors included: municipal securities representing 7.2% of the
portfolio, utility bonds representing 19.1%, and assorted other sectors
accounting for 17.2%.
The Company continued to avoid the Japanese equity and investment
real estate markets in 1993. AFLAC Japan's equity portfolio accounted for
only .1% of invested assets at year-end, and the Company does not expect
this portion to increase in 1994. The Company also does not anticipate
any change in the current level of mortgage loans on Japanese real estate,
which was less than .1% of invested assets at year-end.
The Company increased its commitment to the dollar-denominated
portfolio of AFLAC Japan's invested assets during 1993. AFLAC Japan added
$221.2 million to this portfolio at an average yield of 6.34%. AFLAC
Japan's dollar-denominated portfolio represented 5.7% of invested assets
in Japan, or $647.7 million at the end of 1993, compared with $426.5
million at the end of 1992. This portfolio carries certain tax and yield
advantages that make it attractive; however, the Company is careful to
balance yield enhancement with its corporate goal of increasing profit
repatriation.
In the United States, profits repatriated from Japan totaled $97.9
million in 1993, up from $33.4 million in 1992. This repatriation
enhances total company results since the Company can earn increased
investment income on these funds by investing them in U.S. dollar-
denominated securities versus yen-denominated investments. During 1993,
repatriated funds were invested in dollar-denominated securities at an
average rate of 6.81%. The Company expects profit repatriation to
continue to have a positive impact on its total company after-tax earnings
in the future.
The Company's portfolio allocation in the United States continued its
emphasis on investment-grade corporate bonds, which accounted for 83.0% of
the new money purchases in 1993, at an average yield of 6.96%. AFLAC U.S.
maintained its overall investment quality throughout the year, with 53.2%
of the portfolio rated "AA" or better. The continued active management of
this portfolio produced realized investment gains before taxes of $4.3
million.
The equity portion of the AFLAC U.S. portfolio remained fairly
constant at $55.8 million, but its size relative to total AFLAC U.S.
invested assets fell from 7.0% in 1992 to 5.6% in 1993. AFLAC U.S. has
taken a cautious stance toward U.S. equities given the prevailing market
levels. Mortgage loans on real estate continued to decline and were
immaterial at year-end.
For information on the composition of the Company's investment
portfolio and investment results, see Part IV, Schedule I, and Exhibit 13,
pages 13-11, 13-13 (discussions relating to Balance Sheet and Cash Flow)
and pages 13-23 to 13-28 (note 3 of Notes to the Consolidated Financial
Statements), which are incorporated herein by reference.
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PAGE
INSURANCE - FOREIGN
AFLAC:
The following table sets forth AFLAC Japan's earned premiums by
product line for the last three years ended December 31.
Earned premiums (in thousands): 1993 1992 1991
__________ __________ __________
Health insurance,
principally cancer expense $ 3,275,915 $ 2,545,055 $ 2,051,832
Dementia and Super care insurance 208,345 137,265 95,456
__________ __________ __________
Total earned premiums $ 3,484,260 $ 2,682,320 $ 2,147,288
========== ========== ==========
In 1974, AFLAC became the second foreign (non-Japanese) life
insurance company to gain direct access to the Japanese insurance market
by obtaining a license to do business in Japan. A thorough study of the
market in Japan indicated a definite need for a cancer insurance
supplement to the coverage provided by that nation's comprehensive
national health program. Through 1981, AFLAC was the only company in
Japan authorized to issue a cancer expense insurance policy. Since that
time, several other life and non-life companies have been permitted to
offer cancer insurance. However, AFLAC remains the leading issuer of
cancer expense insurance coverage in Japan, principally due to its lead
time in the market, its unique marketing system (see "Agency Force") and
its product expertise developed in the United States. AFLAC has been very
successful in the sale of cancer expense policies in Japan, with over 10.9
million cancer policies in force at December 31, 1993.
HEALTH INSURANCE PLANS:
AFLAC's insurance is supplemental in nature and is designed to
provide insurance to cover the medical and nonmedical costs that are not
reimbursed by other forms of Japanese health coverage.
The cancer expense insurance plans offered in Japan are basically
daily indemnity plans, providing a flat amount for each day the insured is
hospitalized for the treatment of cancer. The plans differ from the AFLAC
U.S. cancer plans (described on pages I-7 and I-8) in that our policies in
Japan also provide death benefits and cash surrender values (the Company
estimates that approximately 28% of the premiums earned are associated
with these benefits). Also, premiums for only new policies issued can be
revised with consent of the Japanese Ministry of Finance (MOF).
During 1990, AFLAC introduced the Super Cancer Plan. The Super
Cancer Plan includes, for the first time in Japan, first occurrence and
outpatient benefits in addition to the benefits of the previous cancer
coverages. The premium is approximately 33% to 35% higher than the
previous cancer plan. Recent sales of new policies and conversions of
existing policies resulted in 48.2% of all cancer units in force being
Super Cancer Plans as of December 31, 1993.
In May 1992, AFLAC broadened its product line with the introduction
of a new care product, "Super Care". Super Care provides periodic
benefits to those who become bedridden, demented or seriously disabled due
to illness or accident. The new plan is offered with several riders,
providing death benefits or additional care benefits, to enhance coverage.
I-4
Prior to the introduction of the "Super Care" plan, AFLAC actively
marketed a dementia care policy. At December 31, 1993, there were 32,150
policies in force of this type of policy, which provides a lump-sum
benefit upon death or occurrence of dementia and a cash surrender value
until age 60, 65, or 70; and thereafter provides a periodic indemnity
benefit upon occurrence of dementia, together with a reduced death
benefit. If no claims are made, a reduced cash benefit is paid for each
five-year period thereafter.
AFLAC also sells a supplemental general medical policy on a limited
basis. This policy is similar to products offered by other companies in
Japan and is offered in order to provide some competitive protection to
the existing cancer insurance business.
The Ministry of Finance (MOF) in Japan has started to permit
insurance companies to increase the premiums on new policy issues in
response to the lower investment yield rates available in the Japanese
market. AFLAC Japan increased the premiums on Super Care new issues by an
average of 10% (effective November 1993) and will increase the premiums on
Super Cancer new issues by an average of 16% starting in July 1994. Since
the premium increases apply to new policies only, Management does not
expect any significant adverse impact on AFLAC Japan's policy persistency
rate due to higher premiums.
AGENCY FORCE:
The development of a "Corporate Agency" system has been important to
the growth of AFLAC Japan. This method of distributing our products
permits Japanese companies to form insurance agencies as subsidiaries
which offer our insurance plans to the total affiliated group's employees,
suppliers and customers. About 92% of all companies listed on the Tokyo
Stock Exchange have either a corporate agency or allow payroll deduction
of premiums for AFLAC's products.
AFLAC products are also sold through unaffiliated corporate agencies
and through agencies formed by individuals. At December 31, 1993, there
were 4,539 agencies in Japan with 17,838 licensed agents. Agents'
activities are principally limited to insurance sales, with policyholder
service functions handled by the main office in Tokyo and 66 sales offices
located in 44 locations throughout Japan.
REGULATION AND REMITTANCE OF FUNDS:
The Parent Company and AFLAC U.S. receive funds from AFLAC Japan in
the form of management fees, allocated AFLAC U.S. expenses and profit
remittances. These cash transfers to the U.S. aggregated $133.4 million,
$65.5 million and $48.5 million in 1993, 1992 and 1991, respectively.
Management fees paid to the Parent Company are largely based on expense
allocations. It is expected that profit remittances will grow in future
years, based on projected annual earnings of AFLAC Japan as computed on a
Japanese regulatory accounting basis and using a March 31 year-end.
Japanese earnings available for profit remittance reflect investments
generally valued at the lower of market value or cost. Also, AFLAC
Japan's statutory earnings reflect foreign exchange gains and losses on
the translation of its U.S. dollar-denominated investments. Therefore,
changes in interest rate levels, yen/dollar exchange rates and other
factors that affect market values of investment securities can cause wide
fluctuations from year to year in the amounts of regulatory earnings in
Japan and, therefore, profit remittances to AFLAC U.S.
I-5
As part of the deregulation process, the MOF is developing new
solvency regulations and standards which represent a form of risk-based
capital requirements. AFLAC Japan must meet these requirements to
continue profit transfers to AFLAC U.S. At present, AFLAC Japan is in
compliance with the proposed new standards.
The insurance business in Japan, which is conducted through a branch
office of AFLAC, is subject to regulation by the Japanese Ministry of
Finance (the "MOF"), similar to the regulation and supervision in the
United States as described on page I-9 under "Insurance U.S. Regulation".
AFLAC Japan files annual reports and financial statements for the Japan
insurance operations based on a March 31 year-end, prepared in accordance
with Japanese regulatory accounting practices prescribed or permitted by
the MOF. Also, the financial and other affairs of AFLAC Japan are subject
to examination by the MOF.
Reconciliations of AFLAC Japan net assets on a GAAP basis to net
assets determined on a Japanese regulatory accounting basis as of December
31 are as follows:
(in thousands - unaudited) 1993 1992
_________ __________
Net assets on GAAP basis $1,099,712 $ 832,671
Elimination of deferred policy
acquisition costs (1,537,128) (1,233,691)
Reduction in carrying value of fixed
maturity investments for market value
and foreign exchange adjustments (113,349) (114,488)
Adjustment to liability for future
policy benefits 40,943 (59,945)
Elimination of deferred income taxes
and adjustment to prepaid Japan taxes 791,268 832,330
Reduction in premiums receivable (83,064) (60,404)
Other, net (14,010) 1,350
_________ _________
Net assets on Japanese regulatory
accounting basis $ 184,372 $ 197,823
========= =========
The Japanese government is continuing the discussions begun in 1991
with the insurance industry and other groups to explore various long-term
deregulation approaches for the financial services businesses in Japan.
The principles upon which deregulation of the Japanese insurance industry
are based are: (1) to promote competition and to enhance efficiency
through deregulation and liberalization; (2) to preserve soundness; and
(3) to secure fairness and equity in business operations. This project is
still in a preliminary stage and the ultimate changes and their effects
are not presently determinable.
Due to the Company's unique marketing distribution system in Japan,
Management believes that deregulation will not have an immediate material
effect on the Company.
For additional information regarding AFLAC Japan's operations, see
Exhibit 13, pages 13-7 to 13-9 and pages 13-22 and 13-34 (notes 2 and 9 of
Notes to the Consolidated Financial Statements), which are incorporated
herein by reference.
EMPLOYEES:
AFLAC Japan employed 1,473 full-time and 213 part-time employees at
December 31, 1993. AFLAC Japan considers its employee relations to be
excellent.
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OTHER FOREIGN INSURANCE OPERATIONS:
Presently, the Company's developmental efforts are focused on the
Canadian subsidiary and the branch operation in Taiwan. For additional
information regarding other foreign insurance operations, see Exhibit 13,
page 13-10, (discussion relating to other operations), incorporated herein
by reference.
INSURANCE - U.S.
The following table sets forth AFLAC U.S. (excluding AFLAC N.Y.)
earned premiums by product line for the last three years ended December
31.
Earned premiums (in thousands): 1993 1992 1991
________ ________ ________
Cancer expense $ 369,185 $ 356,732 $ 346,033
Intensive care 115,611 116,873 117,362
Medicare supplement 110,969 95,711 68,933
Accident 53,653 36,945 23,135
Other A&H plans 53,319 37,079 23,342
Life insurance 14,095 14,280 14,293
_______ ________ ________
Total AFLAC U.S. earned
premiums $ 716,832 $ 657,620 $ 593,098
======== ======== ========
HEALTH INSURANCE PLANS:
AFLAC's insurance is supplemental in nature and is typically sold to
persons who have private or governmental major medical insurance. All of
AFLAC's supplemental health insurance plans are guaranteed renewable for
the lifetime of the policyholder. Guaranteed renewable coverage may not
be canceled by the insurer, but premium rates on existing and future
policies may be increased by class of policy in response to claims
experience higher than originally expected (subject to federal and state
loss-ratio guidelines) on a uniform, non-discriminatory, state-wide basis
subject to state regulatory approval. Ongoing rate increase programs have
aided the increase in revenues, helped improve loss ratios and contributed
to the profitability of the Company.
AFLAC's cancer plans are designed to provide insurance benefits for
medical and non-medical costs which are generally not reimbursed by major
medical insurance. AFLAC currently offers a series of five different
cancer plans in the United States that vary by benefit amounts and type.
All five plans provide a first occurrence benefit that pays an initial
amount when internal cancer is first diagnosed, a flat amount for each day
an insured is hospitalized for cancer treatment, and benefits for medical,
radiation, chemotherapy, nursing, blood, plasma, physician,
transportation, prosthesis and ambulance expenses. Some of the plans
currently offered contain benefits which reimburse the insured for
anesthesia and surgical expenses incurred in connection with cancer
treatment, as well as benefits for a second surgical opinion and a
"wellness" benefit applicable toward certain diagnostic tests such as pap
smears and mammograms. AFLAC also issues several riders that may be
purchased, including one that increases the amount of the first occurrence
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benefit for each month until age 65 that the coverage remains in force.
AFLAC periodically introduces new forms of coverage, revising benefits and
related premiums based upon the anticipated needs of the policyholders and
AFLAC's claims experience.
AFLAC currently markets five of the Medicare Supplement Standardized
Plans, with the majority of sales being for Plans F and C. The plans are
priced on an issue age basis. Under this method, rates are revised due to
changes in the medicare program and medical inflation. There is no
automatic rate increase due to the aging of the insured. Premium rates
are determined based on zip code groupings, which are adjusted for
increases in costs for each area. The benefits provided range from the
basic plan, covering Part A and B coinsurance, to plans with more
extensive coverage, including Part A and B deductibles, skilled nursing
coinsurance, Part B excess and other benefits. AFLAC U.S. does not market
the standardized plans covering prescription drug benefits.
AFLAC also issues other supplemental health insurance, such as
intensive care, which is a low-premium policy that provides protection
against the high cost of intensive care facilities during hospital
confinement, regardless of reimbursements from other insurers. Other
types of health insurance issued by AFLAC include a long-term convalescent
care policy, a home health care policy, an accident and disability
protection policy, and a hospital confinement indemnity policy.
LIFE INSURANCE PLANS:
AFLAC issues various life insurance policies including whole life,
limited pay life and term life coverage. LifeCare policies, which
constitute the majority of the life insurance sales, are written under
master policies issued through several employer trusts. LifeCare policies
are marketed in a manner similar to the health plans, as described below.
AGENCY FORCE AND MARKETING:
AFLAC's sales agents are licensed to sell accident and health
insurance, and many are also licensed to sell life insurance. Most
agents' efforts are directed toward selling supplemental health insurance.
The 1993 monthly average number of U.S. agents and brokers actively
producing business was 5,437 as compared to 4,960 in 1992.
Agents' activities are principally limited to sales, with all
policyholder service functions, including issuance of policies, premium
collection, payment notices and claims handled by the staff at
headquarters. Agents are paid commissions based on first-year and renewal
premiums from their sales of health and life insurance products. AFLAC's
State, Regional and District Sales Coordinators are compensated by
override commissions.
AFLAC has concentrated on the development of "cluster selling" in
marketing its policies. Cluster selling offers policies to individuals
through common media such as trade and other associations or place of
employment. This manner of marketing is distinct from "group" insurance
sales in that each individual insured is directly contacted by the sales
associate. Policies are individually underwritten and issued to the
insured, and most employers do not contribute to the payment of premiums.
Additionally, individuals may retain their full insurance coverage upon
separation from employment or such affiliation, generally at the same
premium. A major portion of premiums on such sales are collected through
I-8
payroll deduction or other forms of group billings. Group billed plans
normally result in a lower average age of the insured at the time of
policy issuance, and also result in certain savings in administrative
costs, a portion of which are passed on to the policyholder in the form of
reduced premiums. Management believes that cluster selling enables the
agency force to reach a greater number of prospective policyholders than
individual solicitation, and that such sales lower distribution costs.
Another valuable marketing and sales tool is the flexible benefits
program, or cafeteria plan, which allows an employee to pay for medical
insurance using pretax dollars. These programs help achieve increased
penetration as agents are required to present the program to all
employees. They also help improve overall persistency levels due to the
limited changes allowed during the plan year.
During 1993 and 1992, AFLAC continued to develop marketing
arrangements with insurance brokers. AFLAC has signed joint marketing
agreements with several large companies within and outside of the
insurance industry. Although the core of the Company's distribution
network will remain independent agents, the Company expects business
generated by insurance brokers and joint marketing agreements to play an
important role in the Company's future expansion.
In 1993, AFLAC's U.S. premiums collected were $717.9 million, 6.9% of
which was collected in Georgia, 6.9% in Florida, 6.6% in Texas, 5.6% in
North Carolina, and 5.1% in Tennessee. Premiums collected in all other
states were individually less than 5% of AFLAC's U.S. premiums.
REGULATION:
The Parent Company and its insurance subsidiaries are subject to
state regulations as an insurance holding company system. Such
regulations generally provide that transactions between companies within
the holding company system must be fair and equitable. In addition,
transfer of assets among such affiliated companies, certain dividend
payments from insurance subsidiaries and material transactions between
companies within the system are subject to prior notice to, or approval
by, state regulatory authorities.
AFLAC and its insurance subsidiaries, in common with all U.S.
insurance companies, are subject to regulation and supervision in the
states and other jurisdictions in which they do business. In general, the
insurance laws of the various jurisdictions establish supervisory agencies
with broad administrative powers relating to, among other things: granting
and revoking licenses to transact business, regulating trade practices,
licensing agents, prior approval of forms of policies and premium rate
increases, standards of solvency and maintenance of specified policy
benefit reserves and capital for the protection of policyholders,
limitations on dividends to shareholders, the nature of and limitations on
investments, deposits of securities for the benefit of policyholders,
filing of annual reports and financial statements prepared in accordance
with statutory insurance accounting practices prescribed or permitted by
the regulatory authorities, and periodic examinations of the financial and
other affairs of insurance companies.
For further information concerning state regulatory and dividend
restrictions see Exhibit 13, page 13-34 (note 9 - Statutory Accounting and
Dividend Restrictions of Notes to the Consolidated Financial Statements),
incorporated herein by reference.
A number of state regulatory initiatives have been adopted or are in
process of development. One such initiative which has been finalized by
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the National Association of Insurance Commissioners (NAIC) is the risk
based capital (RBC) formula. The RBC model law was approved by the NAIC
and requires the calculation of capital requirements based on risks
inherent within a company's products and assets. The RBC model law is in
the process of being adopted by the various state insurance departments;
however, several states have promulgated their own RBC calculations during
the last several years. The Company has monitored its RBC position under
the various calculations. The RBC calculations at the end of 1993 and
1992 reflected that the Company's capital and surplus levels were well in
excess of those calculations in the enacted formulae.
Currently, four states have laws, regulations or regulatory practices
which either prohibit the sale of specific disease insurance, such as
AFLAC's cancer expense insurance, or make its sale impractical. These
states are Connecticut, Massachusetts, New Jersey and New York. The
remainder of the states do not impose prohibitions or restrictions that
prevent AFLAC from marketing cancer expense insurance. The Company is
marketing several of its other products in these states, directly or
through a subsidiary.
The Company will be monitoring developments in the U.S. Congress
concerning possible changes to the U.S. health care system. Due to the
tremendous costs associated with providing health care insurance to the
U.S. citizens that are not covered by health insurance, it is Management's
opinion that any health care reform package will leave gaps in coverage
that will continue to provide a market for supplemental health insurance.
COMPETITION:
The accident and health and life insurance industry in the United
States is highly competitive. AFLAC competes with a large number of other
insurers, some of which have been in business for a longer period of time
or have greater financial resources. In the United States, there are more
than 2,000 life and accident and health insurance companies, most of which
compete in the states in which AFLAC conducts business.
Private insurers and voluntary and cooperative plans, such as Blue
Cross and Blue Shield, provide insurance for meeting basic hospitalization
and medical expenses. Much of this insurance is sold on a group basis.
The federal and state governments also pay substantial costs of medical
treatment through Medicare and Medicaid programs. Such major medical
insurance generally covers a substantial amount of the medical (but not
non-medical) expenses incurred by an insured as a result of cancer or
other major illnesses. AFLAC's policies are designed to provide coverage
which is supplemental to that provided by major medical insurance and may
also be used to defray non-medical expenses.
Since other insurers generally do not provide full coverage of
medical expenses or any coverage of non-medical expenses, AFLAC's
supplemental insurance is not an alternative to major medical insurance,
but is sold to complement major medical insurance by covering the gap
between major medical insurance reimbursements and the total costs of an
individual's health care. AFLAC thus competes only indirectly with major
medical insurers in terms of premium rates and similar factors. However,
the scope of the major medical coverage offered by other insurers does
represent a limitation on the market for AFLAC's products. Accordingly,
expansion of coverage by other insurers or governmental programs, such as
the comprehensive federal health insurance program now being discussed in
the United States, could adversely affect AFLAC's business opportunities.
I-10
AFLAC competes directly with other insurers offering supplemental
health insurance and believes that its current policies and premium rates
are generally competitive with those offered by other companies selling
similar types of insurance.
For additional information regarding U.S. insurance operations, see
Exhibit 13, page 13-9, which is incorporated herein by reference.
EMPLOYEES:
In its U.S. insurance operations, the Company employed 1,618 full-
time and 40 part-time employees at December 31, 1993. The Company
considers its employee relations to be excellent.
OTHER OPERATIONS:
At December 31, 1993, the AFLAC Broadcast Division owned seven
network-affiliated television stations with total assets of $205.5
million. The Broadcast Division employed 495 full-time and 96 part-time
employees at December 31, 1993. The Broadcast Group considers its
employee relations to be excellent.
The broadcast division produced increased revenues and earnings
during 1993, despite difficult comparisons to 1992 when revenues benefited
from election-year spending. Revenues increased 3.3%, to $68.5 million.
Pretax earnings before interest expense rose .8%, to $13.4 million.
The broadcast division has succeeded despite significant changes in
the industry. With the emergence of new cable networks and stations,
there are more outlets for advertising dollars than ever before. Despite
the segmentation of television entertainment and news, network-affiliated
stations continue to effectively deliver mass audiences to advertisers.
As a result, the AFLAC Broadcast Division is able to successfully compete
in a crowded, competitive marketplace. With the strong market positions
of our stations, an improving U.S. economy and advertising benefits from
off-year elections, Management expects the operating results to improve in
1994.
For additional information regarding broadcast operations, see
Exhibit 13, page 13-10, which is incorporated herein by reference.
The Company's other operations employed 316 full-time and 5 part-time
employees at December 31, 1993; employee relations are considered to be
excellent.
ITEM 2. PROPERTIES
AFLAC owns an 18-story office building, which is the worldwide
headquarters of the Parent Company and AFLAC, along with a six-story
parking garage. These structures are located on approximately 14 acres of
land in Columbus, Georgia. In addition, AFLAC Real Estate Holdings, Inc.
(AREH), a wholly owned subsidiary of the Parent Company, owns a two-story
building located on the same property and an administrative office
building located nearby leased to AFLAC. The Parent Company, AFLAC and
AREH also own and lease office space and warehouse facilities at other
locations in the United States.
I-11
In Japan, AFLAC leases office space in Tokyo, along with regional
sales offices located throughout the country, and owns a training and
computer facility in Tokyo. A new administrative office building is under
construction in Tokyo. For further information concerning the new
building in Japan, see Exhibit 13, pages 13-13, (discussion concerning
cash flow) and 13-29 (note 5, of Notes to the Consolidated Financial
Statements), which are incorporated herein by reference. Other foreign
affiliates of the Company also have leased office space.
The Broadcast Group owns and leases land, buildings, transmission
towers and other broadcast equipment in the cities where the seven
television stations are located.
ITEM 3. LEGAL PROCEEDINGS
On December 1, 1988, a lawsuit purporting to be a shareholders
derivative suit was filed by Susie H. Millsap on behalf of the Company in
the Superior Court of Meriwether County, Georgia, naming as individual
defendants the Company's Board of Directors (the "Action"). Mrs. Millsap
is the daughter of Kenneth M. Henson, a former employee of and counsel for
the Company. The original complaint was subsequently amended to
substitute The Henson Company in place of Mrs. Millsap as plaintiff. The
Company was named a party defendant in the suit but no claim was asserted
against the Company. The Action alleged that the members of the Board of
Directors improperly approved or acquiesced in certain transactions
between the Company and Mr. John B. Amos (the Company's former Chairman
and Chief Executive Officer).
Since the Action purported to be a shareholder derivative suit, any
recovery (except recovery of attorneys' fees and costs of litigation)
would inure to the Company's benefit and not to the plaintiff. The Board
of Directors of the Company appointed a Special Litigation Committee of
independent Directors to inquire into the matters alleged in the Action
and to report its findings.
The Special Litigation Committee issued its final report on March 12,
1990. The report recommended that the Company collect the amount of
$64,600 from Mr. John Amos as additional interest due on a promissory note
executed by Mr. Amos in 1975 when he purchased shares of common stock from
the Company. Mr. Amos paid this amount to the Company in March 1990. The
report also concluded that the allegations made in the lawsuit were
without merit and recommended that no action be brought by or on behalf of
the Company against any officer or Director with regard to such
allegations and that the Company seek dismissal of the lawsuit.
Pursuant to the Company's Motion to Dismiss the Action, the Superior
Court of Meriwether County, Georgia, entered its Order and Judgement on
January 27, 1992, in which the Court dismissed the Action based on its
findings that the Special Litigation Committee and its counsel were
independent, that the Committee's investigation was adequate, and that its
conclusions and recommendations were reasonable and appropriate within the
bounds of the business judgement rule under Georgia law.
This decision was affirmed by the Court of Appeals of Georgia on
March 12, 1993. A motion for reconsideration was denied by the Court on
March 30, 1993.
On September 10, 1993, the Supreme Court of Georgia denied a motion
for rehearing of the Supreme Court's previous July 15, 1993 denial of a
writ of certiorari filed by the plaintiff with respect to the Court of
Appeals decision.
I-12
The Company is also a defendant in various other litigation
considered to be in the normal course of business. Management does not
believe the outcome of any pending litigation in which it is a defendant
will have a material effect on the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to the security holders for a vote in
the fourth quarter ended December 31, 1993.
I-13
ITEM 4A. EXECUTIVE OFFICERS OF THE COMPANY
NAME PRINCIPAL OCCUPATION (*) AGE
___________________ _____________________________________ ___
Paul S. Amos Chairman of the Board of the Company 67
and AFLAC since August 1990; Vice
Chairman of the Company and AFLAC
until August 1990
Daniel P. Amos Chief Executive Officer of the 42
Company and AFLAC, Vice Chairman
of the Company, since August 1990;
President of the Company since
August 1991; President of AFLAC
Deputy Chief Executive Officer
of the Company, until August 1990;
Chief Operating Officer of AFLAC,
until August 1990
William J. Bugg, Jr. Senior Vice President, Corporate 54
Actuary of AFLAC
Monthon Chuaychoo Vice President, Financial Services of 50
the Company and AFLAC since September
1993; Second Vice President, Assistant
Controller of the Company and AFLAC
from June 1991 to September 1993;
Second Vice President of AFLAC until
June 1991
Kriss Cloninger III Executive Vice President, Chief 46
Financial Officer and Treasurer
of the Company, and Executive
Vice President, Chief Financial
Officer of AFLAC since March 1993;
Senior Vice President, Chief
Financial Officer and Treasurer
of the Company, and Senior Vice
President, Chief Financial Officer
of AFLAC from March 1992 until March
1993; Principal, KPMG Peat Marwick,
Atlanta, GA until March 1992
Martin A. Durant, III Senior Vice President, Corporate Services 45
of the Company and AFLAC since August
1993; Vice President and Controller of
the Company, from 1990 to August 1993,
and of AFLAC from June 1991 to August
1993; President of Rebuilding Service,
Inc., until 1990
I-14
Norman P. Foster Executive Vice President, Corporate 58
Finance of the Company and AFLAC
since March 1992; Senior Vice
President, Chief Financial Officer
and Treasurer of the Company, and
Senior Vice President and Chief
Financial Officer of AFLAC until
March 1992
David Halmrast Senior Vice President, Corporate 54
Development of AFLAC since December
1993; Senior Vice President, Corporate
Development of the Company from April
1993 to December 1993; Senior Vice
President and Chief Financial Officer
of Colonial Companies, Inc. until July
1992
Kerry W. Hand Senior Vice President, Home Office 41
Administration of AFLAC
Kenneth S. Janke Jr. Senior Vice President, Investor 35
Relations of the Company since
August 1993; Vice President Investor
Relations of the Company, since 1990;
Second Vice President, Investor
Relations of the Company until 1990
Akitoshi Kan Vice President, AFLAC Japan Branch, 46
Accounting Department since 1992;
Manager, AFLAC Japan Branch Accounting
Department until 1992
Kyoichi Kasuya Vice President, AFLAC Japan Branch, 56
Actuary since 1992; General Manager,
AFLAC Japan Branch, Actuarial
Department until 1992
Joseph P. Kuechenmeister Senior Vice President, Director 52
of Marketing of AFLAC, since
December 1990; Vice President,
Agency Director of AFLAC,
October 1990 until December
1990; Second Vice President,
Director of Direct Product
and Sales Development of AFLAC
until October 1990
I-15
Joey M. Loudermilk Senior Vice President, General Counsel 40
and Corporate Secretary of the
Company, and Senior Vice President,
General Counsel and Director, Legal
and Governmental Relations and
Corporate Secretary of AFLAC since
May 1992; Senior Vice President,
Corporate Counsel and Assistant
Secretary of the Company and AFLAC
and Director, Legal and Governmental
Affairs of AFLAC, from 1990 until
May 1992; Senior Vice President,
Corporate Counsel and Assistant
Secretary of the Company and Senior
Vice President, Director, Legal and
Governmental Affairs of AFLAC, from
August 1989 until 1990; Vice President
of the Company, and Vice President,
Legal and Regulatory Department of
AFLAC, until August 1989
Hidefumi Matsui Executive Vice President, AFLAC Japan 49
Branch since January 1992; Senior
Vice President, Director of Marketing,
AFLAC Japan Branch from January 1990
until January 1992; Senior Vice
President, AFLAC Japan Branch until
January 1990
Minoru Nakai President, AFLAC International, Inc., 52
since October 1991; Senior Vice
President, U.S.-Japan Operations of
AFLAC, until October 1991
Yoshiki Otake President, AFLAC Japan Branch; Vice 54
Chairman, AFLAC International, Inc.,
since October 1991; Executive Vice
President, AFLAC, from January 1991
until October 1991
Thomas L. Paul President of AFLAC Broadcast Group, Inc.; 64
Vice President, Corporate Development
of the Company until 1993
Huey B. Pennington, Jr. Executive Vice President, U.S. Operations 46
of AFLAC, since January 1991; First
Senior Vice President, U.S. Operations
of AFLAC until January 1991
E. Stephen Purdon, M.D. Senior Vice President, Medical Director 46
of AFLAC
I-16
Joseph W. Smith, Jr. Chief Investment Officer of the Company 40
and AFLAC since August 1991; Senior
Vice President, Investments of AFLAC,
until August 1991
William B. Steele Senior Vice President, Corporate 64
Projects of AFLAC since January 1993;
Senior Vice President, International
Operations of AFLAC, from 1990 until
January 1993; Senior Vice President,
International Marketing of AFLAC,
until 1990
Gary L. Stegman Senior Vice President, Assistant Chief 44
Financial Officer of the Company and
AFLAC since June 1991; Senior Vice
President, Treasurer of AFLAC until
June 1991
(*) Unless specifically noted the respective executive officer has held
the occupation(s) set forth in the table for at least five years.
Each executive officer is appointed annually by the Board of
Directors and serves until his successor is chosen and qualified,
or until his death, resignation or removal.
I-17
PAGE
PART II
Pursuant to General Instruction G to Form 10-K, Items 5 through 8 are
incorporated by reference from the Company's 1993 Annual Report to
Shareholders, the appropriate sections of which are included herein as
Exhibit 13. The page numbers of the selected information from the Annual
Report (as well as the Annual Report) containing the required information
are set forth below:
Refer To Refer To
Exhibit 13 Annual Report
Pages Pages
__________ _____________
ITEM 5. MARKET FOR THE COMPANY'S COMMON 13-1; 13-2; 1; 44 (note
EQUITY AND RELATED SHAREHOLDER 13-29 9); 47; and 51
MATTERS (note 5)
ITEM 6. SELECTED FINANCIAL DATA 13-3; 13-4 30 - 31
ITEM 7. MANAGEMENT'S DISCUSSION AND 13-5 to 24 - 29
ANALYSIS OF FINANCIAL CONDITION 13-13
AND RESULTS OF OPERATIONS
ITEM 8. FINANCIAL STATEMENTS AND 13-14 to 32 - 47
SUPPLEMENTARY DATA 13-40
ITEM 9. CHANGES IN AND DISAGREEMENTS None None
WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
II-1
PAGE
PART III
Pursuant to General Instruction G to Form 10-K, Items 10 through 13
are incorporated by reference to the Company's definitive Proxy Statement
relating to the Company's 1994 Annual Meeting of Shareholders which was
filed with the Securities and Exchange Commission on March 14, 1994,
pursuant to Regulation 14A under the Securities Exchange Act of 1934.
Refer to the Information Refer to
Contained in the Proxy Printed
Statement under Captions Proxy
(filed electronically) Statement
Pages
________________________ _________
ITEM 10. DIRECTORS AND EXECUTIVE Security Ownership of 2 - 7
OFFICERS OF THE COMPANY Management. 1. Election
Directors of Directors
Executive Officers -
see Part I, Item 4A
herein
ITEM 11. EXECUTIVE COMPENSATION Board and Committee 8 - 20
Meetings and Other
Information. Compensa-
tion Report; Summary
Compensation Table; De-
fined Benefit Pension
Plan; Retirement Plans
for Key Executives;
Stock Option Plans;
Employment Contracts and
Termination of Employ-
ment Arrangements
ITEM 12. SECURITY OWNERSHIP OF Voting Securities and 1 - 7
CERTAIN BENEFICIAL Principal Holders
OWNERS AND Thereof. Security Owner-
MANAGEMENT ship of Management.
1. Election of Directors
ITEM 13. CERTAIN RELATIONSHIPS Certain Transactions 20 - 21
AND RELATED and Relationships
TRANSACTIONS
III-1
PAGE
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. FINANCIAL STATEMENTS Refer to Page(s)
Included in Part II of this report and
incorporated by reference to the following
pages of Exhibit 13:
AFLAC Incorporated and Subsidiaries:
Consolidated Statements of Earnings, for 13-14
each of the years in the three-year
period ended December 31, 1993
Consolidated Balance Sheets, at December 13-15.1 -
31, 1993 and 1992 13-15.2
Consolidated Statements of Shareholders' 13-16.1 -
Equity, for each of the years in the 13-16.2
three-year period ended December 31,
1993
Consolidated Statements of Cash Flows, 13-17.1 -
for each of the years in the three-year 13-17.2
period ended December 31, 1993
Notes to the Consolidated Financial 13-18 to
Statements 13-38
Report of Independent Auditors 13-39
2. FINANCIAL STATEMENT SCHEDULES
Included in Part IV of this report:
Auditors' Report on Financial Statement Schedules IV-3
Schedule I - Summary of Investments - Other IV-4
Than Investments in Related
Parties, at December 31, 1993
Schedule II - Amounts Receivable from Related IV-5
Parties and Underwriters,
Promoters and Employees Other
Than Related Parties, for each
of the years in the three-year
period ended December 31, 1993
Schedule III - Condensed Financial Information of IV-6 -
Registrant, at December 31, 1993 IV-10
and 1992 and for each of the
years in the three-year period
ended December 31, 1993
Schedule VI - Reinsurance, for each of the IV-11
years in the three-year period
ended December 31, 1993
Schedule IX - Short-Term Borrowings, for each of IV-12
the years in the three-year
period ended December 31, 1993
Schedules other than those listed above are omitted because they are
not required or are not applicable, or the required information is shown
in the financial statements or notes thereto. Columns omitted from
schedules filed have been omitted because the information is not
applicable.
IV-1
3. EXHIBITS
3.0 - Articles of Incorporation, as amended - incorporated by
reference from 1991 Form 10-K, Commission file number
1-7434, Exhibit 3.0; and Bylaws of the Company, as
amended - incorporated by reference from 1992 Form 10-K,
Commission file number 1-7434, Exhibit 3.0.
10.0* - American Family Corporation Incentive Stock Option Plan
(1982) - incorporated by reference from Registration
Statement No. 33-44720 on Form S-8 with respect to the
AFLAC Incorporated (Formerly American Family
Corporation) Incentive Stock Option Plan (1982) and
Stock Option Plan (1985).
10.1* - American Family Corporation Stock Option Plan (1985) -
incorporated by reference from Registration Statement
No. 33-44720 on Form S-8 with respect to the AFLAC
Incorporated (Formerly American Family Corporation)
Incentive Stock Option Plan (1982) and Stock Option Plan
(1985).
10.1.1* - AFLAC Incorporated Amended 1985 Stock Option Plan -
incorporated by reference from 1994 Shareholders' Proxy
Statement, Commission file number 1-7434, Accession No.
0000004977-94-000003, Exhibit A.
10.2* - American Family Corporation Retirement Plan for Senior
Officers, as amended and restated October 1, 1989.
10.3* - American Family Corporation Supplemental Executive
Retirement Plan - incorporated by reference from 1989
Form 10-K, Commission file number 1-7434, Exhibit 10.9.
10.3.1* - AFLAC Incorporated Supplemental Executive Retirement
Plan, as amended, effective September 1, 1993.
10.4* - AFLAC Incorporated Employment Agreement with Daniel P.
Amos, dated August 1, 1993.
10.5* - American Family Life Assurance Company of Columbus
Employment Agreement with Yoshiki Otake, dated January
1, 1986.
10.6* - AFLAC Incorporated Employment Agreement with Kriss
Cloninger, III, dated February 14, 1992, and as amended
November 12, 1993.
10.7* - AFLAC Incorporated Management Incentive Plan -
incorporated by reference from 1994 Shareholders' Proxy
Statement, Commission file number 1-7434, Accession
No. 0000004977-94-000003, Exhibit B.
13.0 - Selected information from the AFLAC Incorporated Annual
Report to Shareholders for 1993.
22.0 - Subsidiaries.
24.0 - Consent of independent auditor, KPMG Peat Marwick, to
Form S-8 Registration Statement No. 33-44720 with
respect to the AFLAC Incorporated (Formerly American
Family Corporation) Incentive Stock Option Plan (1982)
and Stock Option Plan (1985).
24.1 - Consent of independent auditor, KPMG Peat Marwick, to
Form S-3 Registration Statement No. 33-41926 with
respect to the AFLAC Associate Stock Bonus Plan.
24.2 - Consent of independent auditor, KPMG Peat Marwick, to
Form S-8 Registration Statement No. 33-41552 with
respect to the AFLAC Incorporated 401(K) Retirement
Plan.
28.0* - AFLAC Incorporated 401(K) Retirement Plan incorporated
by reference from 1992 Form 10-K, Commission file number
1-7434, Exhibit 28.0.
IV-2
(b) REPORTS ON FORM 8-K
There were no reports filed on Form 8-K for the quarter ended
December 31, 1993.
(c) EXHIBITS FILED WITH CURRENT FORM 10-K
10.2* - AFLAC Incorporated (formerly American Family Corporation)
Retirement Plan for Senior Officers, as amended and
restated October 1, 1989.
10.3.1* - AFLAC Incorporated Supplemental Executive Retirement
Plan, as amended, effective September 1, 1993.
10.4* - AFLAC Incorporated Employment Agreement with Daniel P.
Amos, dated August 1, 1993.
10.5* - American Family Life Assurance Company of Columbus
Employment Agreement with Yoshiki Otake, dated January 1,
1986.
10.6* - AFLAC Incorporated Employment Agreement with Kriss
Cloninger, III, dated February 14, 1992, and as amended
November 12, 1993.
13.0 - Selected information from the AFLAC Incorporated Annual
Report to Shareholders for 1993.
22.0 - Subsidiaries.
24.0 - Consent of independent auditor, KPMG Peat Marwick, to
Form S-8 Registration Statement No. 33-44720 with respect
to the AFLAC Incorporated (Formerly American Family
Corporation) Incentive Stock Option Plan (1982) and Stock
Option Plan (1985).
24.1 - Consent of independent auditor, KPMG Peat Marwick, to
Form S-3 Registration Statement No. 33-41926 with respect
to the AFLAC Associate Stock Bonus Plan.
24.2 - Consent of independent auditor, KPMG Peat Marwick, to
Form S-8 Registration Statement No. 33-41552 with respect
to the AFLAC Incorporated 401(K) Retirement Plan.
* Management contract or compensatory plan or arrangement.
IV-3
PAGE
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULES
The Shareholders and Board of Directors
AFLAC Incorporated:
Under date of January 31, 1994, we reported on the consolidated balance
sheets of AFLAC Incorporated and subsidiaries as of December 31, 1993 and
1992, and the related consolidated statements of earnings, shareholders'
equity, and cash flows for each of the years in the three-year period
ended December 31, 1993, as contained in the 1993 annual report to
shareholders. These consolidated financial statements and our report
thereon are incorporated by reference in the annual report on Form 10-K
for the year 1993. In connection with our audits of the aforementioned
consolidated financial statements, we also have audited the related
financial statement schedules as listed in Item 14. These financial
statement schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statement
schedules based on our audits.
In our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth
therein.
KPMG PEAT MARWICK
Atlanta, Georgia
January 31, 1994
IV-4
PAGE
SCHEDULE I
AFLAC INCORPORATED AND SUBSIDIARIES
Summary of Investments - Other than Investments in Related Parties
December 31, 1993
(In thousands) Amount in
Market Balance
Type of Investment Cost Value Sheet
----------- ---------- ---------
Fixed Maturities:
Bonds:
United States Government and $ 192,760 $ 202,227 $ 192,760
government agencies and
authorities
States, municipalities and 532,537 570,835 532,537
political subdivisions
Foreign governments 5,771,748 6,782,752 5,771,748
Public utilities 2,503,870 2,894,418 2,503,870
Convertibles 21,478 23,938 21,478
All other corporate bonds 3,115,068 3,514,433 3,115,068
Redeemable preferred stocks 301 323 301
---------- ---------- ----------
Total fixed maturities * 12,137,762 13,988,926 12,137,762
---------- ---------- ----------
Equity securities:
Common stocks:
Public utilities 2,091 2,647 2,647
Banks, trusts and insurance
companies 4,037 5,420 5,420
Industrial, miscellaneous
and all other 61,564 73,998 73,998
---------- ---------- ----------
Total equity securities 67,692 82,065 82,065
---------- ---------- ----------
Total fixed maturities and
equity securities 12,205,454 14,070,991 12,219,827
---------- ---------- ----------
Mortgage loans on real estate 57,485 81,482 57,485
Policy loans 1,184 1,184 1,184
Other long-term investments 542 542 542
Short-term investments 166,689 166,689 166,689
---------- ---------- ----------
Total investments $ 12,431,354 $ 14,320,888 $ 12,445,727
=========== =========== ===========
* Includes fixed maturities held to maturity, at amortized cost of
$2,082,326 and with a market value of $2,418,540; and fixed maturities
available for sale, at amortized cost of $10,055,436 and with a market
value of $11,570,386.
IV-5
PAGE
SCHEDULE II
AFLAC INCORPORATED AND SUBSIDIARIES
Amounts Receivable from Related Parties and Underwriters, Promoters
and Employees Other than Related Parties
Years Ended December 31, 1993, 1992 and 1991
(In thousands)
Balance at Deductions Balance at end
Beginning Amounts Other of year
Name of Debtor of Year Additions Collected Reductions Current Not Current
________________________________ __________ _________ _____________________ ____________________
Year ended 12-31-93
Daniel P. Amos $ 2,000 $ - $ - $ - $ 0 $ 2,000
Michael Henry 130 - 124 - 6 0
David Halmrast 0 120 - - 120 0
Minoru Nakai 352 - 2 - 11 339
Gary Stegman 56 100 8 - 8 140
Year ended 12-31-92
Daniel P. Amos $ 1,253 $ 2,000 $ 1,253 $ - $ 0 $ 2,000
R. Lee Anderson, II 225 - 225 - 0 0
Michael Henry - 130 - - 130 0
Francis O. Mathews - 150 150 - 0 0
Minoru Nakai - 352 - - 0 352
Keitaro Toyoda 241 - 241 - 0 0
Year ended 12-31-91
Daniel P. Amos $ 1,398 $ - $ 145 $ - $ 1,253 $ 0
R. Lee Anderson, II 225 - - - 63 162
H. Jefferson Bickerstaff 162 - 111 - 15 36
Salvador Diaz-Verson, Jr. 459 799 459 - 292 507
Minoru Nakai 126 - 126 - 0 0
Ronald Richey 162 38 44 - 22 134
Keitaro Toyoda 241 - - - 40 201
<FN>
The year end receivable balances consist of demand notes receivable collateralized by AFLAC Incorporated
common stock, with principal and interest payable in various amounts and open account balances due currently.
Interest rates related to the loans are as follows:
Debtor Rates
___________________ _____________
Daniel P. Amos 6.00%
Michael Henry 6.65%
David Halmrast 0%
Minoru Nakai 5.54%
Gary Stegman 5.54% & 4.83%
IV-6
PAGE
SCHEDULE III
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Condensed Balance Sheets
AFLAC Incorporated (Parent Only)
(In thousands)
December 31,
1993 1992
__________ _________
Assets:
Investments:
Investments in subsidiaries* $ 1,489,961 $1,180,478
Other investments 23,955 9,252
---------- ---------
Total investments 1,513,916 1,189,730
---------- ---------
Cash - 333
Due from subsidiaries* 6,674 5,039
Refundable federal income taxes - 1,363
Other receivables 6,472 3,428
Property and equipment, net 10,107 11,240
Other 1,924 2,289
---------- --------
Total assets $ 1,539,093 $ 1,213,422
========== ==========
Liabilities and Shareholders' Equity:
Liabilities:
Due to subsidiaries* $ 3,145 $ 5,376
Notes payable (note A) 54,511 65,930
Employee and beneficiary benefit plans 84,445 57,865
Income taxes, primarily deferred 25,977 -
Other 5,391 2,369
Commitments and contingencies (note B)
---------- ---------
Total liabilities 173,469 131,540
---------- ---------
Shareholders' equity:
Common stock of $.10 par value:
Authorized 175,000; issued 103,710
shares in 1993 and 82,549 shares
in 1992 10,371 8,255
Additional paid-in captial 195,730 190,871
Unrealized foreign currency translation 123,294 68,978
Unrealized gains on equity securities 14,811 5,167
Retained earnings (note D) 1,029,625 814,355
Treasury stock (6,568) (4,171)
Notes receivable for stock purchases (1,639) (1,573)
---------- ---------
Total shareholders' equity 1,365,624 1,081,882
---------- ----------
Total liabilities and
shareholders' equity $ 1,539,093 $ 1,213,422
========== ==========
* Eliminated in consolidation.
See the accompanying Notes to Condensed Financial Statements.
IV-7
PAGE
SCHEDULE III
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Condensed Statements of Earnings
AFLAC Incorporated (Parent Only)
(In thousands)
Years ended December 31,
1993 1992 1991
---------- ---------- ----------
Revenues:
Dividends from subsidiaries* $ 71,268 $ 46,657 $ 48,002
Management and service fees
from subsidiaries* 30,357 28,227 27,326
Other income from subsidiaries,
principally rental and interest* 992 828 2,943
Other income (620) 693 433
--------- --------- ---------
Total revenues 101,997 76,405 78,704
--------- --------- ---------
Operating expenses:
Interest expense - subsidiaries* 162 293 1,587
Interest expense - others 3,362 2,743 3,016
Capitalized interest (3,250) (1,333) -
Other operating expense 53,595 48,760 42,718
--------- --------- ---------
Total operating expenses 53,869 50,463 47,321
--------- --------- ---------
Earnings before income taxes,
equity in undistributed earnings
of subsidiaries and cumulative
effect of accounting changes 48,128 25,942 31,383
Income tax expense (benefit)(note C) 1,063 1,103 (6,493)
--------- --------- ---------
Earnings before equity in
undistributed earnings of
subsidiaries and cumulative
effect of accounting changes 47,065 24,839 37,876
Equity in undistributed earnings
of subsidiaries 196,824 158,528 110,808
--------- --------- ---------
Earnings before cumulative
effect of accounting changes 243,889 183,367 148,684
Cumulative affect on prior years
of accounting changes (including a
$46,100 increase in undistributed
earnings of subsidiaries) (note F) 11,438 - -
--------- --------- ---------
Net earnings $ 255,327 $ 183,367 $ 148,684
========= ========= =========
* Eliminated in consolidation.
See the accompanying Notes to Condensed Financial Statements.
IV-8
PAGE
SCHEDULE III
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Condensed Statements of Cash Flows
AFLAC Incorporated (Parent Only)
(In thousands)
Years ended December 31,
1993 1992 1991
---------- ---------- ----------
Cash flows from operating activities:
Net earnings $ 255,327 $ 183,367 $ 148,684
Adjustments to reconcile net
earnings to net cash provided
from operating activities:
Cumulative effect on prior
years of accounting changes (11,438) - -
Equity in undistributed
earnings of subsidiaries (196,824) (158,528) (110,808)
Deferred income taxes (300) 1,103 (6,493)
Employee and beneficiary
benefit plans 18,195 12,659 16,561
Other, net 190 8,020 (3,962)
--------- --------- ---------
Net cash provided by
operating activities 65,150 46,621 43,982
--------- --------- ---------
Cash flows from investing activities:
Additions to property and
equipment, net (75) (1,368) 1,250
Cost of other investments (14,703) (9,301) 7,479
Additional capitalization
of subsidiaries - (10,430) (32,751)
--------- --------- ---------
Net cash used by
investing activities (14,778) (21,099) (24,022)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from borrowings/assumption
of subsidiary debt - 11,300 20,000
Proceeds from exercise of
stock options 6,975 7,534 1,835
Principal payments under debt
obligations (11,419) (3,598) (1,202)
Dividends paid to shareholders (40,057) (35,283) (30,190)
Net increase in due to/from
subsidiaries (3,866) (2,338) (9,501)
Other, net (2,397) (3,067) (860)
--------- --------- ---------
Net cash used by
financing activities (50,764) (25,452) (19,918)
--------- --------- ---------
Net change in cash (392) 70 42
Cash at beginning of year 333 263 221
_________ _________ _________
Cash at end of year $ (59) $ 333 $ 263
========= ========= =========
See the accompanying Notes to Condensed Financial Statements.
IV-9
PAGE
SCHEDULE III
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Notes to Condensed Financial Statements
AFLAC Incorporated (Parent Only)
The accompanying condensed financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
of AFLAC Incorporated and Subsidiaries (see Part II - Item 8).
(A) NOTES PAYABLE
A summary of notes payable serviced by the Parent Company at
December 31, 1993 and 1992 follows:
(In thousands) 1993 1992
________ ________
5.965% unsecured note payable to banks,
due in semiannual installments beginning
1995 through 1997............................ $ 49,000 $ -
8.3% note payable, due in monthly
installments through 1997,
secured by equipment......................... 5,511 6,930
Unsecured notes payable to banks, with
interest not to exceed prime................. - 59,000
_______ _______
Total notes payable $ 54,511 $ 65,930
======= =======
The aggregate maturities of the notes payable for each of the five
years after December 31, 1993, are as follows:
(In thousands)
1994............................................ $ 1,541
1995............................................ 11,507
1996............................................ 21,485
1997............................................ 19,978
1998............................................ 0
IV-10
PAGE
(B) CONTINGENCIES
In prior years, the Parent Company executed promissory notes and
transferred the proceeds to its non-insurance subsidiaries for the
acquisition of television broadcasting stations and other businesses.
During 1991, a majority of these notes were assumed by a partnership
formed by the Broadcast Group and AFLAC. The outstanding balances on
these notes assumed were $40,722,000 as of December 31, 1993, and are not
included in the accompanying condensed balance sheet.
In addition, the Parent Company has also guaranteed repayment of
certain indebtedness of its subsidiary. The related outstanding loan
balance at December 31, 1993 was $1,700,000. The Company has also
guaranteed to AFLAC repayment of intercompany borrowings from
subsidiaries, which approximated $1,102,000 at December 31, 1993.
(C) INCOME TAXES
The Company and its eligible U.S. subsidiaries file a consolidated
U.S. federal income tax return. Income tax liabilities or benefits are
recorded by each principal subsidiary based upon separate return
calculations and any difference between the consolidated provision and the
aggregate amounts recorded by the subsidiaries is reflected in the Parent
Company financial statements. (See Exhibit 13, page 13-32, note 8, Income
Taxes, of Notes to the Consolidated Financial Statements.)
(D) DIVIDEND RESTRICTIONS
See Exhibit 13, pages 13-34 and 13-35 (note 9, Statutory Accounting
and Dividend Restrictions, of Notes to the Consolidated Financial
Statements) for information regarding dividend restrictions.
(E) SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
1993 1992 1991
(In thousands) ________ ________ ________
Cash payments during the year for:
Interest on debt obligations $ 3,588 $ 2,781 $ 3,016
Income taxes - 139 230
In 1993, non-cash investing activities included issuance of common
stock for purchase of a company amounting to $8,730. For further
information see note 9, Other, page 13-35 of Exhibit 13.
(F) CUMULATIVE EFFECT
For information concerning the cumulative affect of accounting
changes, see page 13-20 of Exhibit 13, note 1, section on Accounting
Pronouncements Adopted in 1993, of Notes to the Consolidated Financial
Statements.
IV-11
PAGE
SCHEDULE VI
AFLAC INCORPORATED AND SUBSIDIARIES
Reinsurance
Years Ended December 31, 1993, 1992 and 1991
(In thousands)
Percentage
Ceded to Assumed from of amount
Gross other other assumed
Amount companies companies Net amount to net
------------ ------------ ------------ ------------ ------------
Year ended December 31, 1993:
Life insurance in force $ 10,107,259 $ 119,771 $ - $ 9,987,488 -
============ ============ ============ ============ ============
Premiums:
Health insurance $ 4,210,723 $ 392 $ - $ 4,210,331 -
Life insurance 15,497 438 - 15,059 -
------------ ------------ ------------ ------------ ------------
Total premiums $ 4,226,220 $ 830 $ - $ 4,225,390 -
============ ============ ============ ============ ============
Year ended December 31, 1992:
Life insurance in force $ 10,552,890 $ 109,125 $ - $ 10,443,765 -
============ ============ ============ ============ ============
Premiums:
Health insurance $ 3,352,737 $ 218 $ - $ 3,352,519 -
Life insurance 17,245 563 - 16,682 -
------------ ------------ ------------ ------------ ------------
Total premiums $ 3,369,982 $ 781 $ - $ 3,369,201 -
============ ============ ============ ============ ============
Year ended December 31, 1991:
Life insurance in force $ 9,838,589 $ 179,498 $ - $ 9,659,091 -
============ ============ ============ ============ ============
Premiums:
Health insurance $ 2,748,588 $ 203 $ - $ 2,748,385 -
Life insurance 18,297 1,300 (33) 16,964 (0.2%)
------------ ------------ ------------ ------------ ------------
Total premiums $ 2,766,885 $ 1,503 $ (33) $ 2,765,349 -
============ ============ ============ ============ ============
IV-12
PAGE
SCHEDULE IX
AFLAC INCORPORATED AND SUBSIDIARIES
Short-Term Borrowings
Years Ended December 31, 1993, 1992, and 1991
(In Thousands)
Maximum Average Weighted
Weighted amount amount average
Balance average outstanding outstanding interest
at end of interest during during the rate during
period rate the period period (*) the period (*)
--------------- -------------- -------------- -------------- --------------
Year ended December 31, 1993:
Amounts payable to banks
(Due on demand and
within one year) $ 0 0.0% $ 59,403 $ 14,638 3.4%
============== ============== ============= ============= =============
Year ended December 31, 1992:
Amounts payable to banks
(Due on demand and
within one year) $ 59,403 3.8% $ 60,719 $ 60,067 4.5%
============== ============== ============= ============= ==============
Year ended December 31, 1991:
Amounts payable to banks
(Due on demand) $ 51,780 5.4% $ 60,153 $ 52,680 7.6%
============== ============== ============= ============= ==============
<FN>
(*) Average borrowings represent the average monthly short-term debt outstanding during the year, and the weighted
average interest rate during the period is computed by dividing total interest expense on short-term debt by the
average borrowings.
IV-13
PAGE
SIGNATURES
Pursuant to the requirements of Section 12 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
AFLAC Incorporated
Date MARCH 30, 1994 By /s/ PAUL S. AMOS
________________________ _____________________________
(Paul S. Amos)
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ DANIEL P. AMOS Chief Executive Officer, MARCH 30, 1994
________________________ President and Vice ________________
(Daniel P. Amos) Chairman Board of Directors
/s/ KRISS CLONINGER, III Executive Vice President, MARCH 30, 1994
________________________ Chief Financial Officer ________________
(Kriss Cloninger, III) and Treasurer
/s/ NORMAN P. FOSTER Executive Vice President, MARCH 30, 1994
________________________ Corporate Finance ________________
(Norman P. Foster)
IV-14
/s/ J. SHELBY AMOS, II Director MARCH 30, 1994
______________________________ ________________
(J. Shelby Amos, II)
/s/ MICHAEL H. ARMACOST Director March 30, 1994
______________________________ ________________
(Michael H. Armacost)
/s/ M. DELMAR EDWARDS, M.D. Director MARCH 30, 1994
______________________________ ________________
(M. Delmar Edwards, M.D.)
/s/ GEORGE W. FORD, JR. Director MARCH 30, 1994
______________________________ ________________
(George W. Ford, Jr.)
/s/ CESAR E. GARCIA Director MARCH 30, 1994
______________________________ ________________
(Cesar E. Garcia)
/s/ JOE FRANK HARRIS Director MARCH 30, 1994
______________________________ ________________
(Joe Frank Harris)
/s/ ELIZABETH J. HUDSON Director MARCH 30, 1994
______________________________ ________________
(Elizabeth J. Hudson)
/s/ KENNETH S. JANKE, SR. Director MARCH 30, 1994
______________________________ ________________
(Kenneth S. Janke, Sr.)
/s/ CHARLES B. KNAPP Director MARCH 30, 1994
______________________________ ________________
(Charles B. Knapp)
IV-15
/s/ PETER D. MORROW Director MARCH 30, 1994
______________________________ ________________
(Peter D. Morrow)
/s/ YOSHIKI OTAKE Director MARCH 30, 1994
______________________________ ________________
(Yoshiki Otake)
/s/ JOHN M. POPE Director MARCH 30, 1994
______________________________ ________________
(John M. Pope)
/s/ E. STEPHEN PURDOM, M.D. Director MARCH 30, 1994
______________________________ ________________
(E. Stephen Purdom, M.D.)
/s/ JACK S. SCHIFFMAN Director MARCH 30, 1994
______________________________ ________________
(Jack S. Schiffman)
/s/ HENRY C. SCHWOB Director MARCH 30, 1994
______________________________ ________________
(Henry C. Schwob)
/s/ J. KYLE SPENCER Director MARCH 30, 1994
______________________________ ________________
(J. Kyle Spencer)
/s/ KOJI TAKAHASHI Director MARCH 30, 1994
______________________________ ________________
(Koji Takahashi)
/s/ GLENN VAUGHN, JR. Director MARCH 30, 1994
______________________________ ________________
(Glenn Vaughn, Jr.)
IV-16
Exhibit Index
3.0 - Articles of Incorporation, as amended - incorporated by
reference from 1991 Form 10-K, Commission file number
1-7434, Exhibit 3.0; and Bylaws of the Company, as
amended - incorporated by reference from 1992 Form 10-K,
Commission file number 1-7434, Exhibit 3.0.
10.0* - American Family Corporation Incentive Stock Option Plan
(1982) - incorporated by reference from Registration
Statement No. 33-44720 on Form S-8 with respect to the
AFLAC Incorporated (Formerly American Family Corporation)
Incentive Stock Option Plan (1982) and Stock Option Plan
(1985).
10.1* - American Family Corporation Stock Option Plan (1985) -
incorporated by reference from Registration Statement No.
33-44720 on Form S-8 with respect to the AFLAC
Incorporated (Formerly American Family Corporation)
Incentive Stock Option Plan (1982) and Stock Option Plan
(1985).
10.1.1* - AFLAC Incorporated Amended 1985 Stock Option Plan -
incorporated by reference from 1994 Shareholders' Proxy
Statement, Commission file number 1-7434, Accession No.
0000004977-94-000003, Exhibit A.
10.2* - American Family Corporation Retirement Plan for Senior
Officers, as amended and restated October 1, 1989.
10.3* - American Family Corporation Supplemental Executive
Retirement Plan - incorporated by reference from 1989
Form 10-K, Commission file number 1-7434, Exhibit 10.9.
10.3.1* - AFLAC Incorporated Supplemental Executive Retirement
Plan, as amended, effective September 1, 1993.
10.4* - AFLAC Incorporated Employment Agreement with Daniel P.
Amos, dated August 1, 1993.
10.5* - American Family Life Assurance Company of Columbus
Employment Agreement with Yoshiki Otake, dated January 1,
1986.
10.6* - AFLAC Incorporated Employment Agreement with Kriss
Cloninger, III, dated February 14, 1992, and as amended
November 12, 1993.
10.7* - AFLAC Incorporated Management Incentive Plan - incorporated
by reference from 1994 Shareholders' Proxy Statement,
Commission file number 1-7434, Accession
No. 0000004977-94-000003, Exhibit B.
13.0 - Selected information from the AFLAC Incorporated Annual
Report to Shareholders for 1993.
22.0 - Subsidiaries.
24.0 - Consent of independent auditor, KPMG Peat Marwick, to
Form S-8 Registration Statement No. 33-44720 with respect
to the AFLAC Incorporated (Formerly American Family
Corporation) Incentive Stock Option Plan (1982) and Stock
Option Plan (1985).
24.1 - Consent of independent auditor, KPMG Peat Marwick, to
Form S-3 Registration Statement No. 33-41926 with respect
to the AFLAC Associate Stock Bonus Plan.
24.2 - Consent of independent auditor, KPMG Peat Marwick, to
Form S-8 Registration Statement No. 33-41552 with respect
to the AFLAC Incorporated 401(K) Retirement Plan.
28.0* - AFLAC Incorporated 401(K) Retirement Plan incorporated
by reference from 1992 Form 10-K, Commission file number
1-7434, Exhibit 28.0.
(i)
Exhibits Filed with Current Form 10-K:
10.2* - AFLAC Incorporated (formerly American Family Corporation)
Retirement Plan for Senior Officers, as amended and restated
October 1, 1989.
10.3.1* - AFLAC Incorporated Supplemental Executive Retirement
Plan, as amended, effective September 1, 1993.
10.4* - AFLAC Incorporated Employment Agreement with Daniel P.
Amos, dated August 1, 1993.
10.5* - American Family Life Assurance Company of Columbus
Employment Agreement with Yoshiki Otake, dated January 1,
1986.
10.6* - AFLAC Incorporated Employment Agreement with Kriss
Cloninger, III, dated February 14, 1992, and as amended
November 12, 1993.
13.0 - Selected information from the AFLAC Incorporated Annual
Report to Shareholders for 1993.
22.0 - Subsidiaries.
24.0 - Consent of independent auditor, KPMG Peat Marwick, to
Form S-8 Registration Statement No. 33-44720 with respect
to the AFLAC Incorporated (Formerly American Family
Corporation) Incentive Stock Option Plan (1982) and Stock
Option Plan (1985).
24.1 - Consent of independent auditor, KPMG Peat Marwick, to
Form S-3 Registration Statement No. 33-41926 with respect
to the AFLAC Associate Stock Bonus Plan.
24.2 - Consent of independent auditor, KPMG Peat Marwick, to
Form S-8 Registration Statement No. 33-41552 with respect
to the AFLAC Incorporated 401(K) Retirement Plan.
* Management contract or compensatory plan or agreement.
(ii)