UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: July 17, 1995
NATIONAL WESTERN LIFE INSURANCE COMPANY
(Exact name of Registrant as specified in its charter)
A Colorado Corporation
(State or other jurisdiction of incorporation)
2-17039 84-0467208
(Commission File Number) (I.R.S. Employer Identification Number)
850 East Anderson Lane, Austin, Texas 78752-1602
(Address of Principal Executive Offices and Zip Code)
512/836-1010
(Registrant's Telephone Number)
Item 5. Other Events
Effective July 17, 1995, Westcap Securities, L.P. discontinued all sales and
trading activities in its Houston, Texas office. Westcap Securities, L.P.
is a subsidiary of The Westcap Corporation (Westcap) which is a wholly owned
brokerage subsidiary of National Western Life Insurance Company (the
Company). Although the costs to be incurred relating to the discontinuation
of sales activities are not yet determinable, there will not be a material
impact to National Western Life Insurance Company's consolidated financial
position.
Recent declines in both sales revenues and earnings were the principal
reasons for ceasing the sales activity. Increasing market interest rates
and resulting adverse bond market conditions during 1994 and 1995 compared
to previous years has had a negative impact on the entire bond brokerage
industry. These conditions, coupled with adverse publicity that resulted
from the filing of lawsuits by customers who had experienced market losses
on collateralized mortgage obligations (CMO) products that were purchased
from Westcap Securities, L.P., led to the declines in sales and earnings.
The publicity surrounding these claims has made it extremely difficult to
keep Westcap's customer base and sales force in place. Additionally,
because much publicity characterizes CMOs as derivatives, adverse publicity
about derivatives has impacted the market for CMOs and decreased Westcap's
prospects for future sales.
In previous years, Westcap has contributed significantly to the consolidated
earnings of National Western Life Insurance Company. However, more
recently, brokerage operations have produced losses due to the reasons cited
above. A summary of net earnings and losses from brokerage operations since
1992 is provided below. Substantially all of such earnings and losses are
attributable to the Houston office.
Earnings (Losses) from Brokerage Operations
(In thousands except per share amounts)
Quarter ended March 31, 1995 $ (1,733)
Year ended December 31, 1994 (2,936)
Year ended December 31, 1993 21,832
Year ended December 31, 1992 26,728
Per Share:
Quarter ended March 31, 1995 $ (0.50)
Year ended December 31, 1994 (0.84)
Year ended December 31, 1993 6.27
Year ended December 31, 1992 7.68
Westcap intends to continue its corporate operations and small sales
operations in its New Jersey office. All outstanding claims and lawsuits as
previously described will be vigorously defended by Westcap and the Company.
Although the alleged damages would be material to Westcap's and the
Company's financial positions, a reasonable estimate of any actual losses
which may result from such claims cannot be made at this time.
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.
National Western Life Insurance Company
(Registrant)
Date: July 21, 1995 By: /S/ Robert L. Busby, III
Robert L. Busby, III
Senior Vice President -
Chief Administrative Officer,
Chief Financial Officer
and Treasurer