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): December 3, 2014 |
ProAssurance Corporation |
(Exact name of registrant as specified in its charter) |
Delaware | 001-16533 | 63-1261433 |
(State of Incorporation) | (Commission File No.) | (IRS Employer I.D. No.) |
100 Brookwood Place, Birmingham, Alabama | 35209 |
(Address of Principal Executive Office ) | (Zip code) |
Registrant’s telephone number, including area code: (205) 877-4400 |
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: | |
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-(c) under the Exchange Act (17CFR 240.13e-(c)) |
Item 7.01 Regulation FD Disclosure Attached as Exhibit 99.1, and incorporated into this Item 7.01 by reference, is our news release announcing three actions taken by our Board at their regular meeting on December 3, 2014. 1. The payment of a special dividend of $2.65 per common share and the payment of an increased regular dividend of $0.31 per common share. Both dividends will be paid on January 9, 2015 to shareholders who own our stock as of December 30, 2014. 2. The addition of an additional $100 million to be used for share repurchase or debt retirement, bringing total funds currently authorized for this purpose to $198 million. 3. The setting of dates for our 2015 Annual Meeting of Shareholders, which will be held on May 27, 2015. The record date for the meeting is March 31, 2015. |
Item 8.01 Other Events |
On December 3, 2014, our Board of Directors approved the payment of a special dividend and the payment of an increased regular dividend. Both dividends will be paid on January 9, 2015 to shareholders who own our stock as of December 30, 2014. Our dividend policy now anticipates a total annual dividend of $1.24 per common share, to be paid in equal quarterly installments. However, any decision to pay future cash dividends will be subject to the Board’s final determination after a comprehensive review of the company’s financial performance, future expectations and other factors deemed relevant by the Board. Also on December 3, 2014 our Board of Directors authorized an additional $100 million to be used for share repurchase or debt retirement. This brings the outstanding authorization to $198 million, which we will deploy depending on market conditions as well as the company’s view of its future capital needs. The share purchase authorization announced today is effective immediately. Any share repurchase activity will be subject to limitations that may be imposed on such purchases by the rules of the New York Stock Exchange and applicable securities laws and regulations, including Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934, as amended. Our Board also set May 27, 2015 as the date of the 2015 Annual Meeting of Shareholders to be held at our headquarters in Birmingham, Alabama. The record date for the meeting is March 31, 2015. |
Item 9.01 Financial Statements and Exhibits |
99.1 News release issued on September 3, 2014, disclosing three Board actions: 1. The declaration of a special dividend of $2.65 per common shares and an increased regular cash dividend of $0.31 per common share payable on January 9, 2015 to shareholders of record as of December 30, 2014. 2. The addition of an additional $100 million to be used for share repurchase or debt retirement, bringing total funds currently authorized for this purpose to $198 million. 3. The setting of dates for our 2015 Annual Meeting of Shareholders, which will be held on May 27, 2015. The record date for the meeting is March 31, 2015. |
We are furnishing Exhibit 99.1 to this Current Report on Form 8-K solely for the purpose of incorporation by reference into Items 7.01 and 9.01. This exhibit shall not be deemed to be “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing. |
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. |
Date: December 3, 2014 | |
PROASSURANCE CORPORATION | |
by: /s/ Frank B. O’Neil | |
Frank B. O’Neil Senior Vice-President |
For More Information Contact: |
Frank B. O’Neil |
Sr. Vice-President, Corporate Communications & Investor Relations |
800.282.6242 · 205.877.4461 · foneil@ProAssurance.com |
● | changes in general economic conditions, including the impact of inflation or deflation and unemployment; |
● | our ability to maintain our dividend payments; |
● | regulatory, legislative and judicial actions or decisions that could affect our business plans or operations; |
● | the enactment or repeal of tort reforms; |
● | formation or dissolution of state-sponsored medical professional liability insurance entities that could remove or add sizable groups of physicians from or to the private insurance market; |
● | changes in the interest rate environment; |
● | changes in U.S. laws or government regulations regarding financial markets or market activity that may affect the U.S. economy and our business; |
● | changes in the ability of the U.S. government to meet its obligations that may affect the U.S. economy and our business; |
● | performance of financial markets affecting the fair value of our investments or making it difficult to determine the value of our investments; |
● | changes in requirements or accounting policies and practices that may be adopted by our regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission (SEC), the Public Company Accounting Oversight Board, or the New York Stock Exchange (NYSE) and that may affect our business; |
● | changes in laws or government regulations affecting the financial services industry, the property and casualty insurance industry or particular insurance lines underwritten by our subsidiaries; |
● | the effects of changes in the healthcare delivery system, including, but not limited to, the Patient Protection and Affordable Care Act (the Healthcare Reform Act); |
● | consolidation of healthcare providers resulting in entities that are more likely to self-insure a substantial portion of their healthcare professional liability risk; |
● | uncertainties inherent in the estimate of our loss and loss adjustment expense reserve and reinsurance recoverable; |
● | changes in the availability, cost, quality, or collectability of insurance/reinsurance; |
● | the results of litigation, including pre- or post-trial motions, trials and/or appeals we undertake; |
● | allegations of bad faith which may arise from our handling of any particular claim, including failure to settle; |
● | loss or consolidation of independent agents, agencies, brokers, or brokerage firms; |
● | changes in our organization, compensation and benefit plans; |
● | changes in the business or competitive environment may limit the effectiveness of our business strategy and impact our revenues; |
● | our ability to retain and recruit senior management; |
● | the availability, integrity and security of our technology infrastructure; |
● | the impact of a catastrophic event, as it relates to both our operations and our insured risks; |
● | the impact of acts of terrorism and acts of war; |
● | the effects of terrorism related insurance legislation and laws; |
● | assessments from guaranty funds; |
● | our ability to achieve continued growth through expansion into other states or through acquisitions or business combinations; |
● | changes to the ratings assigned by rating agencies to our insurance subsidiaries, individually or as a group; |
● | provisions in our charter documents, Delaware law and state insurance laws may impede attempts to replace or remove management or may impede a takeover; |
● | state insurance restrictions may prohibit assets held by our insurance subsidiaries, including cash and investment securities, from being used for general corporate purposes; |
● | taxing authorities can take exception to our tax positions and cause us to incur significant amounts of legal and accounting costs and, if our defense is not successful, additional tax costs, including interest and penalties; and |
● | expected benefits from completed and proposed acquisitions may not be achieved or may be delayed longer than expected due to business disruption; loss of customers, employees and key agents; increased operating costs or inability to achieve cost savings; and assumption of greater than expected liabilities, among other reasons. |
Additional risks that could adversely affect the integration of Eastern into ProAssurance, include, but are not limited to, the following: | |
● | the operations of ProAssurance and Eastern may not be integrated successfully, or such integration may take longer to accomplish than expected; and |
● | operating costs, customer loss and business disruption following the transaction, including adverse effects on relationships with employees, may be greater than expected. |
Additional risks that could arise from our membership in the Lloyd’s of London market (Lloyd’s) and our participation in Syndicate 1729 include, but are not limited to, the following: | |
● | members of Lloyd's are subject to levies by the Council of Lloyd's based on a percentage of the member's underwriting capacity, currently a maximum of 3%, but can be increased by Lloyd's; |
● | Syndicate operating results can be affected by decisions made by the Council of Lloyd's over which the management of Syndicate 1729 has little ability to control, such as a decision to not approve the business plan of the Syndicate, or a decision to increase the capital required to continue operations, and by our obligation to pay levies to Lloyd's; |
● | Lloyd's insurance and reinsurance relationships and distribution channels could be disrupted, or Lloyd's trading licenses could be revoked, making it more difficult for Syndicate 1729 to distribute and market its products; and |
● | rating agencies could downgrade their ratings of Lloyd's as a whole. |
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