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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: December 10, 2001
REINSURANCE GROUP OF AMERICA, INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
MISSOURI 1-11848 43-1627032
(State or Other Jurisdiction of (Commission File Number) (IRS Employer Identification Number)
Incorporation)
1370 Timberlake Manor Parkway
Chesterfield, Missouri 63017
(Address of Principal Executive Office)
Registrant's telephone number, including area code: (636) 736-7000
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ITEM 5. OTHER EVENTS.
Reinsurance Group of America, Incorporated ("RGA") is filing
this Current Report on Form 8-k to report on recent events as discussed below.
When we use the terms "we," "us" or "our" below, we mean RGA and its
subsidiaries on a consolidated basis, unless the context implies otherwise.
On December 10, 2001, RGA issued a press release announcing that it
intends to offer approximately $225 million of Trust Preferred Income Equity
Redeemable Securities (PIERS) units, subject to a 15% underwriter over-allotment
option, and $200 million aggregate principal amount of its Senior Notes due
2011, pursuant to separate public offerings. A copy of the press release is
attached hereto as Exhibit 99.1 and incorporated herein by reference.
ARGENTINE PENSION BUSINESS
On October 25, 2001, we announced that we were reviewing the recent
experience of our reinsurance of Argentina's privatized pension program, which
we refer to as the "AFJP business," and that several aspects of the pension
fund claims flow were not developing as was contemplated when the reinsurance
programs were initially priced. As a result, we will add to reserves and record
a charge during the fourth quarter of $35 million, on a pre-tax basis. We
established these reserves based on assumptions concerning the run-off of the
remaining AFJP business and current market conditions. We believe the resultant
reserve levels will be adequate to cover the run-off of that business. If,
however, our assumptions prove incorrect or market conditions change, we may
need to establish additional reserves. In addition, subsequent to September 30,
2001, we sold substantially all our remaining Argentine-based bond investments
supporting the privatized pension reinsurance, resulting in a pre-tax realized
investment loss of $4.2 million.
ACCIDENT AND HEALTH ARBITRATION
Since April of 2000, RGA Reinsurance has been involved in a dispute
with a ceding company involving certain quota share reinsurance agreements
covering first dollar medical insurance policies in our discontinued accident
and health business. The dispute was subsequently referred to an arbitration
panel pursuant to the terms of these reinsurance agreements. Recently, the
arbitration panel issued its final award, which requires RGA Reinsurance to make
a payment to the ceding company. RGA Reinsurance will incur a charge, after
utilization of existing reserves, of approximately $10.0 million on a pre-tax
basis in the fourth quarter of 2001 relating to the arbitration.
INVESTMENTS IN SECURITIES OF ENRON CORP. AND ITS AFFILIATES
As of December 5, 2001, we held $10.0 million par value (book value of
$8.92 million) of notes issued by Enron Corp., which recently filed for
bankruptcy. As of December 5, 2001, the Enron bonds had a quoted market value of
$2.6 million. Additionally, until December 3, 2001, we held $2.5 million par
value (book value is the same) of bonds issued by an Enron affiliate, and the
sale of the bonds resulted in a pre-tax loss of $2.2 million.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
Exhibit No. Exhibit
99.1 Press Release of RGA, dated December 10, 2001.
SIGNATURE
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.
REINSURANCE GROUP OF AMERICA,
INCORPORATED
Date: December 10, 2001 By: /s/ Jack B. Lay
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Name: Jack B. Lay
Title: Executive Vice President
and Chief Financial Officer
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