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 (Date of earliest event reported): June 28, 2005
21ST CENTURY HOLDING COMPANY
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(Exact name of registrant as specified in its charter)
Florida 0-2500111 65-0248866
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
3661 West Oakland Park Blvd., Suite 300
Lauderdale Lakes, FL 33311
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (954) 581-9993
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Federated National Insurance Company ("Federated National"), a wholly
owned subsidiary of 21st Century Holding Company (the "Company"), has, as of
June 28, 2005, agreed upon its aggregate catastrophe reinsurance coverage for
the 2005-2006 hurricane season.
Federated National's reinsurance arrangements are with reinsurers in the
U.S., London and Bermuda reinsurance markets, as well as the Florida Hurricane
Catastrophe Fund, as follows:
Platinum Underwriters Reinsurance, Inc.
Alea North America Insurance Company
American Re-Insurance Company
DaVinci Reinsurance Ltd.
Renaissance Reinsurance Ltd.
Rosemont Reinsurance Ltd.
PXRE Reinsurance Ltd.
Ace Tempest Reinsurance Ltd.
Amlin Underwriting Limited
Cathedral Underwriting Limited
Axa Re
This reinsurance coverage will reimburse Federated National for
property losses under its homeowners' insurance policies resulting from storms
that cause damage in the State of Florida, the state in which Federated National
is currently writing these types of policies, through June 30, 2006. Under this
coverage, Federated National is responsible for the first $3 million in property
losses resulting from a storm and Federated National's reinsurers are
responsible for the next $212 million in aggregate property losses for said
storm. Our amount of reinsurance coverage was determined by subjecting our
property risks to statistical forecasting models that are designed to quantify a
catastrophic event in terms of the frequency of a storm occurring once in every
"n" years. Our reinsurance coverage contemplates a catastrophic event occurring
once every 100 years. Federated National has also obtained automatic
reinstatement coverage, meaning that the reinsurance coverage will be
automatically available for a second storm with the same $3 million retention by
Federated National.
As compared to Federated National's reinsurance coverage for the
2004-2005 hurricane season, the current season's coverage would reduce the
losses retained by Federated National. For example, whereas Federated National's
net retained losses in 2004 from Hurricanes Charley and Frances totaled
approximately $20 million, if the current year's coverage had been in effect in
2004, Federated National's net retained losses would have totaled approximately
$6 million.
Federated National's premiums for the reinsurance coverage are $19
million payable in quarterly installments beginning July 1, 2005 for the private
reinsurers and a total of $7 million payable in three installments to the
Florida Hurricane Catastrophe Fund from August 2005 through December 2005. The
greater expense resulting from these premiums has been reflected in the
Company's previously announced earnings guidance for 2005.
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.
21ST CENTURY HOLDING COMPANY
Date: July 1, 2005 By: /s/ J. Gordon Jennings III
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Name: J. Gordon Jennings III
Title: Chief Financial Officer
(Principal Accounting and Financial Officer)