-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DV3gbQ9Qr9hNGS6KQuri2d5FT84WUI3OFrvvLLeI38qhqTOuzc+HD27aIT8mPXop QwpznqZVC04lahyJYwwwOg== 0000100716-07-000002.txt : 20070302 0000100716-07-000002.hdr.sgml : 20070302 20070302151757 ACCESSION NUMBER: 0000100716-07-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070302 ITEM INFORMATION: Other Events FILED AS OF DATE: 20070302 DATE AS OF CHANGE: 20070302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNICO AMERICAN CORP CENTRAL INDEX KEY: 0000100716 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 952583928 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-03978 FILM NUMBER: 07667434 BUSINESS ADDRESS: STREET 1: 23251 MULHOLLAND DR CITY: WOODLAND HILLS STATE: CA ZIP: 91364 BUSINESS PHONE: 8185919800 MAIL ADDRESS: STREET 1: 23251 MULHOLLAND DRIVE CITY: WOODLAND HILLS STATE: CA ZIP: 91364 FORMER COMPANY: FORMER CONFORMED NAME: UNIVERSAL COVERAGE CORP DATE OF NAME CHANGE: 19730823 8-K 1 form8-k.txt FORM8K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 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): March 2, 2007 Unico American Corporation (Exact Name of Registrant as Specified in Its Charter) Nevada (State or Other Jurisdiction of Incorporation) 0-3978 95-2583928 (Commission File Number) (IRS Employer Identification No.) 23251 Mulholland Drive Woodland Hills, California 91364 (Address of Principal Executive Offices) (Zip Code) (818) 591-9800 (Registrant's Telephone Number, Including Area Code) (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)) 1 Item 8.01. Other Events. - --------------------------------------------------------- On March 2, 2007, the registrant issued a news release announcing an increase in underwriting income from its insurance company operation for the three months and year ended December 31, 2006. A copy of the news release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing. 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. UNICO AMERICAN CORPORATION (Registrant) Date: March 2, 2007 By: /s/ Lester A. Aaron ------------------- Name: Lester A. Aaron Title: Chief Financial Officer 2 EXHIBIT INDEX ------------- Exhibit Number Description - -------------- ----------- 99.1 News release dated March 2, 2007 3 EX-99.1 2 news030207.txt NEWS RELEASE EXHIBIT 99.1 ------------ NEWS RELEASE CONTACT: Lester A. Aaron Chief Financial Officer (818) 591-9800 UNICO AMERICAN CORPORATION REPORTS AN INCREASE IN UNDERWRITING INCOME FROM ITS INSURANCE COMPANY OPERATION Woodland Hills, California, March 2, 2007 - Unico American Corporation (NASDAQ - "UNAM") (the Company) announced today that based upon unaudited and preliminary results of operations for the fourth quarter of 2006 and the year ended December 31, 2006, the underwriting income of its Crusader Insurance Company subsidiary increased significantly for such periods as compared to the corresponding periods of 2005. The increase in underwriting income is primarily a result of a decrease in the provision for losses and related loss adjustment expenses of prior accident years. That decrease, also called favorable development, was caused by actual development of losses and loss adjustment expenses being less than anticipated in the reserves recorded in prior periods. Crusader's underwriting income is a non-GAAP term which consists of net earned premium less policy acquisition costs and net incurred losses and loss adjustment expenses. The net incurred losses and loss adjustment expenses consist of the provision for insured events of the current year and the increase or decrease in the provision for events of prior years, net of reinsurance. Crusader's underwriting income represents a significant part of all the revenues and expenses that are included in the Company's consolidated income before income taxes. The Company anticipates that as a result of the increase in Crusader's underwriting income for the three months and year ended December 31, 2006, the Company's consolidated income before income taxes for such periods will increase as compared to the same periods of the prior year. The increase in Crusader's underwriting income is primarily due to the favorable development of prior accident years' losses and loss adjustment expenses as follows:
Year Ended December 31 Three Months Ended December 31 ---------------------- ------------------------------ 2006 2005 2006 2005 ---- ---- Increase ---- ---- Increase Unaudited (Decrease) Unaudited Unaudited (Decrease) --------- -------- --------- --------- -------- Net earned premium $42,933,789 $50,477,920 $(7,544,131) $10,237,432 $12,122,421 $(1,884,989) Net losses and loss adjustment expenses Provision for insured events of current year 29,997,662 35,338,196 (5,340,534) 7,236,001 8,496,689 (1,260,688) Increase (decrease)in provision for events of prior years (12,170,683) (3,824,464) (8,346,219) (7,699,017) (1,439,190) (6,259,827) ---------- ---------- ---------- --------- --------- --------- Total net losses and loss adjustment expenses 17,826,979 31,513,732 (13,686,753) (463,016) 7,057,499 (7,520,515) Policy acquisition costs 9,250,989 10,512,688 (1,261,699) 2,232,459 2,565,584 (333,125) ---------- ---------- ---------- --------- --------- --------- Total underwriting expenses 27,077,968 42,026,420 (14,948,452) 1,769,443 9,623,083 (7,853,640) ---------- ---------- ---------- --------- --------- --------- Underwriting income $15,855,821 $8,451,500 $7,404,321 $8,467,989 $2,499,338 $5,968,651 ========== ========= ========= ========= ========= =========
Losses and loss adjustment expense reserves represent an estimate of amounts needed to settle and administer claims with respect to insured events that have occurred, including events that have been incurred which have not yet been reported to the Company. There is a high level of uncertainty inherent in the evaluation of the required losses and loss adjustment expense reserves for the Company. The favorable development by accident year is as follows: Year Ended Three Months Ended December 31, 2006 December 31, 2006 ----------------- ----------------- Favorable % of Favorable % of Accident Year Development Total Development Total - ------------- ----------- ---- ----------- ----- Prior to 2001 $701,989 6% 24,340 0% 2001 754,141 6% 118,061 2% 2002 819,572 7% 137,345 2% 2003 1,744,350 14% 1,108,801 14% 2004 7,524,447 62% 6,275,602 82% 2005 626,184 5% 34,868 0% ---------- --- --------- --- Total Prior Accident Years $12,170,683 100% $7,699,017 100% ========== === ========= === As reflected in the above table, the increase in the favorable development is primarily due to a substantial decrease in the provision for losses and loss adjustment expenses for accident year 2004 during the calendar year 2006. During the fourth quarter the Company determined that the favorable development of accident year 2004, which developed during 2006, was sufficient to warrant a reduction in the ultimate expected losses and loss adjustment expenses for that accident year. During the first three quarters of 2006, the Company determined that the development during that period was not sufficient to warrant reducing accident year 2004 reserves further than previously recorded. The adjustment of prior accident year reserves discussed above is not necessarily indicative of the results that may be expected in future periods. The foregoing statements concerning the underwriting income and the anticipated increase in the Company's consolidated income before income taxes for the fourth quarter of 2006 and the year ended December 31, 2006, are forward looking statements which involve risks and uncertainties which could cause actual results to differ materially from the forward looking statements. The statements are based on unaudited information which is in the process of being audited and may change from that presently anticipated. -----END PRIVACY-ENHANCED MESSAGE-----