SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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) March 1, 2000
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GE Financial Assurance Holdings, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-23375 54-1829180
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6604 West Broad Street, Richmond, Virginia 23230
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 281-6000
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Not Applicable
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(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets
On March 1, 2000, the insurance policies and related assets of Toho Mutual Life
Insurance Company (Toho) were transferred to GE Edison Life Insurance Company
(GE Edison), a subsidiary of GE Financial Assurance Holdings, Inc. (the
Company), a Delaware corporation and wholly-owned, indirect subsidiary of
General Electric Company.
In June 1999, Japan's Financial Supervisory Agency (FSA) issued a partial
business suspension order to Toho, a Japenese insurer which was deemed
insolvent, in accordance with the Japanese Insurance Business Law (IBL). In
connection with such suspension order, the FSA appointed two independent
individuals from the Japanese insurance industry and the Life Insurance
Association of Japan as administrators of Toho (collectively, the
Administrator). In accordance with the IBL, the Administrator determined that a
comprehensive transfer of Toho's insurance contracts to a rescuing company was
in the best interests of the Toho policyholders. In conjunction with the
comprehensive transfer, the Administrator restructured Toho's in-force insurance
contacts and investment portfolio. The restructured insurance contracts have
surrender charges, reduced benefits and lower policy guarantees. Restructured
assets, including a pre-determined statutory goodwill amount (representing the
anticipated statutory profits within the restructured insurance policies), equal
to the restructured policy reserves are also to be transferred to the rescuing
company. After a period of negotiation, GE Edison was selected as the rescuing
company and it entered into an agreement with Toho on December 22, 1999 (the
Agreement), pursuant to which Toho transferred its restructured insurance
contracts and assets to GE Edison when the transaction closed on March 1, 2000.
Under the terms of the Agreement, Japan's Policyholder Protection Corporation
contributed approximately $3.6 billion to GE Edison as part of the transfer of
the restructured policies. Total cash and invested assets acquired by GE Edison
pursuant to the comprehensive transfer approximated $20.5 billion, and
restructured insurance contracts and other liabilities assumed approximated
$22.7 billion. The Company expects to infuse approximately $600 million of
capital into GE Edison to support strong solvency margins and claims paying
ratings. The Company anticipates funding the capital infusion through the
issuance of commercial paper.
As previously disclosed in the Company's 1998 Annual Report on Form 10-K, the
Company and Toho jointly capitalized GE Edison in March 1998. At the time, GE
Edison acquired the operating infrastructure and certain tangible assets of
Toho. With the former Toho infrastructure, GE Edison commenced origination and
underwriting of all new business activity. The then-existing Toho business
remained with Toho with the exception of certain term life insurance business
ceded to GE Edison. GE Edison also entered into an agreement with Toho to cede a
portion of the new life insurance business issued by GE Edison to Toho under a
modified coinsurance arrangement. As a result of the March 1, 2000 comprehensive
transfer, the Company now indirectly owns 100% of GE Edison.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial statements of business acquired.
The Regisrant has concluded that the assumption of policy liabilities
and the acquisition of assets is not an acquisition of a business that
has continuity both before and after the comprehensive transfer and
therefore Toho historical financial statements would not be relevant
to security holders of the Registrant and their understanding of
future operations. The Registrant will file a statement of liabilities
assumed and assets acquired by amendment to this Current Report on
Form 8-K.
(b) Pro forma financial information.
The liabilities assumed and assets acquired as part of the
comprehensive transfer will be reflected in the Registrant's March 31,
2000 consolidated balance sheet in its Quarterly Report on Form 10-Q
for the quarter ending March 31, 2000.
(c) Exhibits.
2.1 AGREEMENT ON THE TRANSFER OF INSURANCE CONTRACTS, ETC.
(English translation of the agreement executed on December 22,
1999 by and between Toho Mutual Life Insurance Company and GE
Edison Life Insurance Company).
The Registrant agrees to furnish supplementally to the Securities and
Exchange Commission, upon request, copies of any schedules and
exhibits to the foregoing exhibit that are not filed herewith in
accordance with Item 601(b)(2) of Regulation S-K.
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, thereunto duly authorized.
GE Financial Assurance Holdings, Inc.
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(Registrant)
Date: March 16, 2000 By: /s/ Thomas W. Casey
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Thomas W. Casey
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
Date: March 16, 2000 By: /s/ Richard G. Fucci
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Richard G. Fucci
Vice President and Controller
(Principal Accounting Officer)
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