SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended: December 31, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to _________
Commission File Number ______________
AMERICAN PHYSICIANS ASSURANCE CORPORATION 401(K) PLAN AND TRUST
(FULL TITLE OF PLAN)
AMERICAN PHYSICIANS CAPITAL, INC.
1301 N. HAGADORN ROAD
EAST LANSING, MI 48826-1471
(NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE ADDRESS OF
ITS PRINCIPAL EXECUTIVE OFFICE)
Audited Financial Statements
and Supplemental Schedules
American Physicians Assurance Corporation
401(k) Plan and Trust
Years ended December 31, 2000 and 1999
with Report of Independent Auditors
American Physicians Assurance Corporation
401(k) Plan and Trust
Audited Financial Statements
and Supplemental Schedules
Years ended December 31, 2000 and 1999
CONTENTS
Report of Independent Auditors.............................................................................1
Financial Statements
Statements of Assets Available for Benefits................................................................2
Statements of Changes in Assets Available for Benefits.....................................................3
Notes to Financial Statements..............................................................................4
Supplemental Schedules
Schedule of Assets Held for Investment Purposes at End of Year - 2000.....................................10
Schedule of Reportable Transactions - 2000................................................................10
Schedule of Assets Held for Investment Purposes at End of Year - 1999.....................................12
Schedule of Reportable Transactions - 1999...............................................................12
Report of Independent Auditors
To the Board of Directors
American Physicians Assurance Corporation
401(k) Plan and Trust
We have audited the accompanying statements of assets available for benefits of
American Physicians Assurance Corporation 401(k) Plan and Trust as of December
31, 2000 and 1999, and the related statements of changes in assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of American Physicians
Assurance Corporation 401(k) Plan and Trust as of December 31, 2000 and 1999,
and the changes in its assets available for benefits for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes at end of year and reportable transactions together
referred to as "supplemental information", are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental information is the
responsibility of the Plan's management. The supplemental information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Andrews Hooper & Pavlik P.L.C.
Okemos, Michigan
December 14, 2001
1
American Physicians Assurance Corporation
401(k) Plan and Trust
Statements of Assets Available for Benefits
DECEMBER 31
2000 1999
-------------------------------------
ASSETS
Investments:
The Equitable Life Assurance Company of the United States-
Investment accounts $ 9,977,568 $10,333,571
Participant loans 129,321 170,631
-------------------------------------
Total investments 10,106,889 10,504,202
Receivables:
Contributions from participating employers 97,020 130,414
Other 6,407 -
-------------------------------------
Total receivables 103,427 130,414
Cash surrender value of life insurance 8,227 13,244
Cash 9,406 7,474
-------------------------------------
Assets available for benefits $10,227,949 $10,655,334
=====================================
See accompanying notes to financial statements.
2
American Physicians Assurance Corporation
401(k) Plan and Trust
Statements of Changes in Assets Available for Benefits
YEAR ENDED DECEMBER 31
2000 1999
--------------------------------------
ADDITIONS:
Net realized and unrealized (depreciation) appreciation
in fair value of investments $ (748,897) $ 1,860,826
Interest income 17,771 17,141
Participating employers' contributions 150,384 148,446
Participants' contributions 1,118,554 1,147,454
Roll-over contributions 130,094 220,518
Other 1,091 342
--------------------------------------
Total additions 668,997 3,394,727
DEDUCTIONS:
Benefits payments 1,095,182 572,022
Investment expenses 1,200 800
--------------------------------------
Total deductions 1,096,382 572,822
--------------------------------------
Net (decrease) increase in assets available for benefits (427,385) 2,821,905
Assets available for benefits at beginning of year 10,655,334 7,833,429
--------------------------------------
Assets available for benefits at end of year $10,227,949 $10,655,334
======================================
See accompanying notes to the financial statements.
3
American Physicians Assurance Corporation
401(k) Plan and Trust
Notes to Financial Statements
December 31, 2000
1. DESCRIPTION OF THE PLAN
The following is a description of the American Physicians Assurance Corporation
401(k) Plan and Trust (the Plan) and provides only general information. Plan
participants should refer to the Plan agreement for a more complete description
of the Plan's provisions. The Plan was previously referred to as MICOA
Management Company, Inc. 401(k) Plan and Trust.
GENERAL
The Plan is a defined contribution plan covering employees of American
Physicians Assurance Corporation, Alpha Advisors, Inc., SCW Agency Group, Inc.
and KMA Insurance Agency, Inc. (participating employers) who meet the
eligibility requirements under the Plan and who are employed on the first day of
the Plan year or the first day of the seventh month of the plan year coinciding
with the next following date such employee meets the eligibility requirements.
The Plan's operations are subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
Participants may elect to defer a portion of their compensation each year not to
exceed limitations contained in Internal Revenue Code Section 402(g). The
participants may elect to defer from two percent to ten percent of their
compensation. The participating employers have elected to make a matching
contribution equal to 25 percent of each participant's deferred compensation. In
applying the matching percentage, only a participant's deferred compensation up
to four percent is considered.
PARTICIPANTS' ACCOUNTS
Each participant's account is credited with the Corporation's contribution and
an allocation of net Plan earnings. Allocations of Plan earnings are based on
the relative account balances of all participants as defined in the Plan
agreement. The benefit to which a participant is entitled in the event of death,
disability or separation from service, is the vested total of the participant's
account balance.
VESTING
Participants are immediately vested in both voluntary employee deferrals and
participating employers' contributions plus earnings thereon.
4
American Physicians Assurance Corporation
401(k) Plan and Trust
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may self-direct employee and employer
contributions in any of the investment options that are available under the
Plan.
PAYMENT OF BENEFITS
On termination of service, a participant may elect to receive a lump-sum amount
equal to the value of his or her account balance, or periodic installments over
the participant's life expectancy. If a participant's account balance is less
than $5,000, a single lump sum payment is required.
PARTICIPANT LOANS
A participant may borrow from the Plan an amount not in excess of 50% of the
participant's vested account balance. In no event can the participant borrow
more than $50,000. Loans are for a period not exceeding five years except, in
the case of loan proceeds used to acquire a principal residence. Loans bear
interest at an agreed-upon percentage based on prevailing market rates existing
at the time a participant loan is made and the loan must be adequately secured.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan have been presented on the accrual basis.
INVESTMENT VALUATION
The current value of the units owned by the Plan in the investment accounts is
based on quoted redemption values on the last business day of the plan year.
The change in the difference between aggregate current value and the cost of
investments is reflected in the statements of changes in assets available for
benefits as net realized and unrealized appreciation (depreciation) in fair
value of investments.
5
American Physicians Assurance Corporation
401(k) Plan and Trust
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
As of the valuation date, all income as well as all investment gains and losses
shall be allocated to each participant's account in the proportion that each
participant's account balance bears to the total of all account balances for
each particular fund.
ADMINISTRATIVE EXPENSES
Administrative expenses, with the exception of certain investments expenses of
the Plan, were paid by the participating employers.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
3. INVESTMENTS
Participants direct their entire account balance between fourteen investment
funds through the service provider under contract with the trustee of the plan.
The Plan does not have any non-participant directed investments.
The Plan's investment assets are held by their respective investment manager.
6
American Physicians Assurance Corporation
401(k) Plan and Trust
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The Plan had net realized and unrealized depreciation in current value of
$748,897 in 2000, as follows:
NET REALIZED
AND UNREALIZED
APPRECIATION
(DEPRECIATION) CURRENT
IN CURRENT VALUE
VALUES AT END OF
DURING YEAR YEAR
---------------------- --------------------
2000
Alliance Common Stock $ (228,412) $ 1,381,230
Alliance Money Market 54,919 998,613
Alliance Growth Investors (29,949) 376,471
Alliance Conservative Investor 7,814 304,562
Templeton Foreign Fund (19,944) 334,156
Janus Balanced Fund (35,358) 1,253,340
Janus Worldwide Fund (422,356) 1,945,673
Neuberger & Berman Genesis Trust 245,868 1,082,842
Neuberger & Berman Partners Trust (6,575) 691,356
Scudder Growth and Income Fund (23,605) 675,938
AIM Small Cap Growth Fund (56,347) 255,431
Janus Twenty Fund (222,246) 478,862
SSgA S&P 500 Index Fund (9,641) 155,766
American Century: Twentieth Century Select (3,065) 43,328
---------------------- --------------------
(748,897) 9,977,568
Participant loans - 129,321
---------------------- --------------------
$ (748,897) $ 10,106,889
====================== ====================
The following investments at fair value exceed 5% of the value of plan assets at
December 31, 2000:
Janus Worldwide Fund $ 1,945,673
Alliance Common Stock 1,381,230
Janus Balanced Fund 1,253,340
Neuberger & Berman Genesis Trust 1,082,842
Alliance Money Market 998,613
Neuberger & Berman Partners Trust 691,356
Scudder Growth and Income Fund 675,938
7
American Physicians Assurance Corporation
401(k) Plan and Trust
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The Plan had realized and unrealized appreciation in current value of $1,860,826
in 1999, as follows:
NET REALIZED
AND UNREALIZED
APPRECIATION CURRENT
IN CURRENT VALUE
VALUES AT END OF
DURING YEAR YEAR
------------------------ --------------------
1999
Alliance Common Stock $ 341,656 $ 1,753,146
Alliance Money Market 35,864 1,106,370
Alliance Growth Investors 83,408 437,054
Alliance Conservative Investor 24,041 267,778
Templeton Foreign Fund 97,298 408,868
Janus Balanced Fund 212,710 1,225,710
Janus Worldwide Fund 854,211 2,281,674
Neuberger & Berman Genesis Trust 21,612 877,314
Neuberger & Berman Partners Trust 47,769 788,992
Scudder Growth and Income Fund 30,073 698,694
AIM Small Cap Growth Fund 13,193 63,199
Janus Twenty Fund 93,558 362,771
SSgA S&P 500 Index Fund 2,844 30,714
American Century: Twentieth Century Select 2,589 31,287
------------------------ --------------------
1,860,826 10,333,571
Participant loans - 170,631
------------------------ --------------------
$ 1,860,826 $ 10,504,202
======================== ====================
The following investments at fair value exceed five percent of the value of plan
assets at December 31, 1999:
Janus Worldwide Fund $ 2,281,674
Alliance Common Stock 1,753,146
Janus Balanced Fund 1,225,710
Alliance Money Market 1,106,370
Neuberger & Berman Genesis Trust 877,314
Neuberger & Berman Partners Trust 788,992
Scudder Growth and Income Fund 698,694
8
American Physicians Assurance Corporation
401(k) Plan and Trust
Notes to Financial Statements (continued)
4. RELATED-PARTY TRANSACTIONS
During the years ended December 31, 2000 and 1999, there were no reportable
party-in-interest transactions. The Plan does not consider participating
employers' contributions to the Plan to be party-in-interest transactions.
5. INCOME TAX STATUS
The Plan obtained its latest determination letter on June 24, 1998, in which the
Internal Revenue Service stated that the plan and related trust as then designed
was in accordance with applicable requirements of the Internal Revenue Code
(IRC). Although the Plan has been amended since receiving the determination
letter, the Plan administrator and the Plan's tax counsel believe that the Plan
is designed and is currently being operated in compliance with the applicable
requirements of the IRC.
6. PLAN TERMINATION
Although they have not expressed any intent to do so, the participating
employers have the right under the Plan to discontinue contributions at any time
and terminate the Plan subject to the provisions of ERISA.
9
American Physicians Assurance Corporation
401(k) Plan and Trust
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2000
(c) Description of Investment
Including Maturity Date,
(b) Identity of Issue, Borrower, Rate of Interest, Collateral, (e) Current
(a) Lessor or Similar Party Par or Maturity Value (d) Cost Value
- ---------------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 9,888.2956 units $ 1,617,949 $ 1,381,230
Alliance Money Market 8,615.2085 units 946,470 998,613
Alliance Growth Investors 2,742.2722 units 406,370 376,471
Alliance Conservative Investor 2,370.1805 units 296,327 304,562
Templeton Foreign Fund 24,932.6075 units 349,251 334,156
Janus Balanced Fund 67,355.4578 units 1,290,011 1,253,340
Janus Worldwide Fund 102,637.9534 units 2,357,017 1,945,673
Neuberger & Berman Genesis Trust 64,264.6308 units 823,045 1,082,842
Neuberger & Berman Partners Trust 49,723.5911 units 692,878 691,356
Scudder Growth and Income Fund 50,713.5797 units 697,737 675,938
AIM Small Cap Growth Fund 10,450.3174 units 259,149 255,431
Janus Twenty Fund 21,353.0168 units 713,530 478,862
SSgA S&P 500 Index Fund 8,804.5165 units 172,802 155,766
American Century: Twentieth Century Select 2,531.9973 units 47,797 43,328
------------------------------------
10,670,333 9,977,568
Participant Loans Interest rates of 8.0% to 10.5% maturing
between 2001 and 2007. - 129,321
------------------------------------
Total Investments $ 10,670,333 $ 10,106,889
====================================
There were no assets reportable as both acquired and disposed of within
the plan year.
Employer identification number: 38-2102867
Three digit plan number: 002
10
American Physicians Assurance Corporation
401(k) Plan and Trust
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 1999
(c) Description of Investment
Including Maturity Date,
(b) Identity of Issue, Borrower, Rate of Interest, Collateral, (e) Current
(a) Lessor or Similar Party Par or Maturity Value (d) Cost Value
- ---------------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 10,714.5726 units $ 1,737,450 $ 1,753,146
Alliance Money Market 10,070.6950 units 1,097,853 1,106,370
Alliance Growth Investors 2,949.3406 units 398,696 437,054
Alliance Conservative Investor 2,141.8265 units 268,204 267,778
Templeton Foreign Fund 29,188.6177 units 293,859 408,868
Janus Balanced Fund 63,998.1309 units 992,852 1,225,710
Janus Worldwide Fund 99,357.0749 units 1,388,032 2,281,674
Neuberger & Berman Genesis Trust 68,502.0422 units 843,931 877,314
Neuberger & Berman Partners Trust 56,621.0865 units 733,019 788,992
Scudder Growth and Income Fund 50,783.1452 units 658,557 698,694
AIM Small Cap Growth Fund 2,548.5365 units 32,569 63,199
Janus Twenty Fund 10,856.2358 units 218,755 362,771
SSgA S&P 500 Index Fund 1,564.9039 units 24,632 30,714
American Century: Twentieth Century Select 1,657.3923 units 25,611 31,287
--------------------------------
8,714,020 10,333,571
Participant Loans Interest rates of 8.0% to 10.5%
maturing between 2000 and 2007. - 170,631
--------------------------------
Total Investments $ 8,714,020 $ 10,504,202
================================
There were no assets reportable as both acquired and disposed of within the
plan year.
Employer identification number: 38-2102867
Three digit plan number: 002
11
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
AMERICAN PHYSICIANS ASSURANCE CORPORATION
401(K) PLAN AND TRUST
(NAME OF PLAN)
DATE: December 20, 2001 /s/ Margo C. Runkle
----------------------------------------
(SIGNATURE)*
*PRINT NAME AND TITLE OF SIGNING OFFICIAL UNDER THE SIGNATURE.
12