-----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, PCxMG0Te5ZU+Yp10kXylX+DD4unBDJdM9uyEgiZco+vA7r+NmXtasv1s+RwqDwhx WcXPXGK/JJgEGlogZ3ilMA== 0000898080-06-000270.txt : 20060629 0000898080-06-000270.hdr.sgml : 20060629 20060629172649 ACCESSION NUMBER: 0000898080-06-000270 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060629 DATE AS OF CHANGE: 20060629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCOTTISH RE GROUP LTD CENTRAL INDEX KEY: 0001064122 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 000000000 STATE OF INCORPORATION: E9 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16855 FILM NUMBER: 06934983 BUSINESS ADDRESS: STREET 1: GRAND PAVILION COMMERCIAL CENTRE STREET 2: 802 WEST BAY RD GEORGE TOWN GRAND CAYMAN CITY: GRAND CAYMAN CAYMAN STATE: E9 ZIP: 00000 BUSINESS PHONE: 3459492800 MAIL ADDRESS: STREET 1: P O BOX HM 2939 CITY: HAMILTON STATE: D0 ZIP: HM MX FORMER COMPANY: FORMER CONFORMED NAME: SCOTTISH LIFE HOLDINGS LTD DATE OF NAME CHANGE: 19980615 11-K 1 form11k.txt FORM 11-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 11-K FOR ANNUAL REPORTS OF EMPLOYEE STOCK REPURCHASE SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2005 [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition period from to Commission File Number 001-16855 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: SCOTTISH HOLDINGS, INC. 401(K) AND PROFIT SHARING PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: SCOTTISH RE GROUP LIMITED Crown House, Third Floor 4 Par-la-Ville Road Hamilton HM12, Bermuda Scottish Holdings, Inc. 401(k) and Profit Sharing Plan INDEX Report of Independent Registered Public Accounting Firm........................3 Financial Statements Statements of Net Assets Available for Benefits................................4 Statement of Changes in Net Assets Available for Benefits......................5 Notes to Financial Statements..................................................6 Supplemental Schedule Schedule H Line 4i - Schedule of Assets (Held at End of Year).................12 Report of Independent Registered Public Accounting Firm The Plan Administrator and Participants Scottish Holdings, Inc. 401(k) and Profit Sharing Plan We have audited the accompanying statements of net assets available for benefits of the Scottish Holdings, Inc. 401(k) and Profit Sharing Plan as of December 31, 2005 and 2004 and the related statement of changes in net assets available for benefits for the year ended December 31, 2005. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and 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 net assets available for benefits of the Plan as of December 31, 2005 and 2004 and the changes in its net assets available for benefits for the year ended December 31, 2005, in conformity with U.S. generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2005, is presented for purposes of additional analysis and is not a required part of the financial statements but is 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 schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP Charlotte, North Carolina June 26, 2006 3 Scottish Holdings, Inc. 401(k) and Profit Sharing Plan Statements of Net Assets Available for Benefits December 31, 2005 2004 ------------------------------- Assets Investments, at fair value $7,324,195 $4,681,605 Receivable from participant 124,952 - ------------------------------- Net assets available for benefits $7,449,147 $4,681,605 =============================== See accompanying notes. 4 Scottish Holdings, Inc. 401(k) and Profit Sharing Plan Statement of Changes in Net Assets Available for Benefits Year Ended December 31, 2005 Additions Investment income: Interest $ 3,071 Dividends 263,765 Net appreciation in fair value of investments 209,706 ---------------- 476,542 Contributions: Participants 1,538,695 Rollovers 419,451 Employer, net of forfeitures 1,156,145 ---------------- 3,114,291 ---------------- Total additions 3,590,833 Deduction Benefits paid to participants 823,291 ---------------- 823,291 Net increase 2,767,542 Net assets available for benefits: Beginning of year 4,681,605 ---------------- End of year $ 7,449,147 ================ See accompanying notes. 5 Scottish Holdings, Inc. 401(k) and Profit Sharing Plan Notes to the Financial Statements December 31, 2005 1. Description of Plan The following description of the Scottish Holdings, Inc. (the Company) 401(k) and Profit Sharing Plan (the Plan) provides only general information. Participants should refer to the Plan Document for a more complete description of the Plan's provisions. General The Plan is a defined contribution plan covering substantially all employees of Scottish Holdings, Inc., with certain exceptions as provided in the Plan document, and the following subsidiaries (collectively, the Plan Sponsor): o Scottish Re (U.S.), Inc. o Scottish Annuity & Life International Insurance Company (Bermuda), Ltd. An employee is eligible for the Plan on the first day of the month following completion of one hour of service as defined in the Plan document. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. The Company serves as Plan administrator and trustee of the Plan. Effective January 1, 2005, eligible participants may contribute up to 100% of their pre-tax compensation, as defined in the Plan document, subject to Internal Revenue Service (IRS) limitations. Prior to January 1, 2005, the deferral limit was 7.5%. Participants may also contribute amounts representing distributions from other qualified plans. Participants who have attained age 50 before the end of the Plan year are eligible to make catch-up contributions. The maximum participant catch-up contribution amount for 2005 and 2004 was $4,000 and $3,000, respectively. The Company matches 100% of a participant's total pre-tax contributions for the Plan year which do not exceed 7.5% of a participant's compensation for the portion of the year during which the participant elected to make pre-tax contributions. Additional amounts may be contributed by the Company at its sole and unrestricted discretion. The amount of such profit sharing contribution is determined by the Company and is allocated to participants pro-rata based on the compensation. Employees are eligible to receive the profit sharing contribution if they are active employees on the last day of the Plan year. There were no profit sharing contributions to the Plan during 2005 or 2004. Upon enrollment, a participant may direct contributions in 1% increments to any of the Plan's fund options. Participants may change their investment options on each business day of the Plan year. 6 Scottish Holdings, Inc. 401(k) and Profit Sharing Plan Notes to the Financial Statements (continued) 1. Description of Plan (continued) Participant Accounts Each participant's account is credited with the participant's contributions and allocations of (a) the Company's contributions and (b) Plan earnings. Allocations are based upon participant earnings and account balance as defined in the Plan document. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account balance. Forfeited balances of terminated participants' nonvested accounts are used to fund the employer's contributions to the Plan. The balance in the forfeiture account at December 31, 2005 and 2004 was $24,431 and $59,972, respectively. The amount of forfeitures used to reduce employer contributions for 2005 was $67,545. Vesting Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company's qualified matching contribution portion of their account, which represents matches up to 4% of compensation, plus actual earnings thereon is 100% at the time of contribution. Vesting in the Company's matching contribution portion of their account, which represents matches greater than 4% of compensation but not more than 7.5% of compensation, plus actual earnings thereon is based on years of continuous service. A participant is 100% vested after three years of credited service. Vesting in the Company's profit sharing contribution is based on years of continuous service and a participant is 100% vested after 5 years of credited service. Participant Loans Participants may borrow from their 401(k) accounts a minimum amount of $1,000 up to a maximum amount equal to the lesser of (1) 50% of their vested account balance or (2) $50,000 reduced by the outstanding balance owed by the participant during the period up to one year before the issuance of the loan. Loan terms may not exceed 5 years unless the loan is being used to buy or build the participant's personal residence. Loans are secured by the balance in the participant's account and bear interest at a rate equal to the prime lending rate plus one percentage point. The interest rate will be approved at the time of the loan and remain constant throughout the loan period. Principal and interest are paid ratably through regular periodic payroll deductions if the participant is an employee or in substantially equal installments in the case of a non-employee. 7 Scottish Holdings, Inc. 401(k) and Profit Sharing Plan Notes to the Financial Statements (continued) 1. Description of Plan (continued) A loan is not available from the portion of a participant's account balance consisting of profit sharing contributions or the pension plan (account balances previously transferred-in and merged from the Scottish Holdings, Inc. Money Purchase Pension Plan on January 1, 2003). Payment of Benefits Participant 401(k) account balances may be distributed upon termination of service, retirement, proven financial hardship, or death. Participant profit sharing and pension plan account balances may be distributed upon termination of service, retirement, or death. A terminated, retired, or hardship participant may receive the vested value of his or her 401(k) and profit sharing accounts in a lump sum amount. Annuity payment options are also provided for beneficiaries of deceased participants or for participants with pension plan account balances. Such annuity payments are distributed based on the vested value of the participant account in substantially equal installments over a period not exceeding the estimated life expectancy of the participant or such beneficiary. Distributions from the Parent Company, Scottish Re Group Limited, Common Stock Fund may be distributed in cash or in shares of the Parent Company's common stock, if so elected. As of December 31, 2005 and 2004, there were no benefit amounts participants elected to withdraw from the Plan that were approved and processed for payment, but were not yet paid. Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their accounts. Administrative Expenses Administrative expenses for the Plan are paid by the Company. 8 Scottish Holdings, Inc. 401(k) and Profit Sharing Plan Notes to the Financial Statements (continued) 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statement in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Investment Valuation and Income Recognition The Plan's investments are stated at fair value which equals the quoted market price on the last business day of the plan year. The shares of registered investment companies are valued at quoted market prices which represent the net asset values of shares held by the Plan at year-end. The Plan's investments in the Scottish Re Group Limited common stock are stated at fair value based on quoted market prices. The participant loans are valued at their outstanding balances, which approximate fair value. Investments in the money market fund are short term and generally valued at cost, which approximates the fair value. Purchases and sales of security transactions are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. 3. Investments During 2005, the Plan's investments (including investments purchased, sold as well as held during the year) appreciated in fair value as determined by quoted market prices as follows: Net Realized and Unrealized Appreciation / (Depreciation) in Fair Value of Investments -------------------------- - Registered Investment Companies $225,877 Parent Company Common Stock (16,171) -------------------------- $209,706 ========================== 9 Scottish Holdings, Inc. 401(k) and Profit Sharing Plan Notes to the Financial Statements (continued) 3. Investments (continued) Investments that represent 5% or more of fair value of the Plan's net assets are as follows: December 31 2005 2004 ----------------- --------------- Investments at fair value : American Funds Growth Fund of America $ 802,377 $ 412,817 Davis New York Venture Fund 990,970 580,765 Fidelity Advisor Mid Cap Fund 705,806 403,423 Janus Advisor Balanced Fund 859,668 591,030 Janus Advisor Flexible Income Fund 475,197 326,787 Columbia Acorn Fund 581,439 401,206 SSGA S & P 500 Index Fund 825,926 343,027 Templeton Foreign Fund 635,804 406,913 Scottish Re Group Limited Common Stock* 491,687 430,924 UBS Money Market Fund* 776,289 599,056 * Party-in-interest Transaction 4. Income Tax Status The Plan has received a determination letter from the IRS dated November 5, 2003, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the "Code") and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Sponsor has indicated that it will take the necessary steps, if any, to bring the Plan's operations into compliance with the Code. 5. Party-in-interest Transactions The Plan invests in common stock of the Parent Company, Scottish Re Group Limited. Purchases of Scottish Re Group Limited common stock must be made on the open market. The Plan also invests in a money market fund of the Plan custodian, UBS. Investment balances for the stock and money market fund are listed in Footnote 3 of these notes to the financial statements. 10 Scottish Holdings, Inc. 401(k) and Profit Sharing Plan Notes to the Financial Statements (continued) 6. Risks and Uncertainties The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investments securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and such changes could materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits. 7. Receivable from Participant The receivable from participant reflects a duplicate benefit payment distribution. The item was subsequently collected, but was outstanding as of December 31, 2005. 11 Scottish Holdings, Inc. 401(k) and Profit Sharing Plan Schedule H, Line 4i - Schedule of Assets (Held At End of Year) EIN #52-2234408 Plan # 001 December 31, 2005
(c) (b) Description of Investment, Identity of Issue, Including Maturity Date, Rate (e) Borrower, Lessor or of Interest, Collateral, Par or (d) Current (a) Similar Party Maturity Value Cost Value ----------------------------------------------------------------------------------------------- Davis New York Venture Fund + $ 990,970 Janus Advisor Balanced Fund + 859,668 SSGA S&P 500 Index Fund + 825,926 American Funds Growth Fund of America + 802,377 Fidelity Advisor Mid Cap Fund + 705,806 Templeton Foreign Fund + 635,804 Columbia Acorn Fund + 581,439 * Scottish Re Group Limited Common Stock + 491,687 Janus Advisor Flexible Income Fund + 475,197 Alliance Bernstein Global Strategic Income Fund + 241,203 ---------------- 6,610,077 * UBS Money Market Portfolio, 3.58% + 776,289 Participant Loans Interest rates ranging from 5.00-8.00%, maturity dates ranging from 1-10 years 62,781 ---------------- $ 7,449,147 ================
* Represents party-in-interest + Cost information is not presented, as investment is participant directed 12 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. SCOTTISH HOLDINGS, INC. 401(K) AND PROFIT SHARING PLAN Date June 29, 2006 /s/ Dean E. Miller ----------------- ------------------------------------------ Name: Dean E. Miller Title: Chief Financial Officer EX-23.1 2 ex23-1.txt EXHIBIT 23.1 Exhibit 23.1 Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-126771) pertaining to the Scottish Holdings, Inc. 401(k) and Profit Sharing Plan of Scottish Re Group Limited of our report dated June 26, 2006, with respect to the financial statements and schedule of the Scottish Holdings, Inc. 401(k) and Profit Sharing Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2005. /s/ Ernst & Young LLP Charlotte, North Carolina June 26, 2006 -----END PRIVACY-ENHANCED MESSAGE-----