8-K

 

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): March 22, 2007

Specialty Underwriters' Alliance, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	000-50891	20-0432760
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
222 South Riverside Plaza, Chicago, Illinois		60606
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: (888) 782-4672

Not Applicable
______________________________________________
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:

[  ]  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.

On March 22, 2007, Specialty Underwriters’ Alliance, Inc. (the "Company") entered into a new partner agent contract (the "Partner Agent Agreement") with Flying Eagle Insurance Services, Inc. ("Flying Eagle") to provide general liability to artisan and general contractors and roofers in the western region.

Pursuant to the terms of the Partner Agent Agreement, the Company has appointed Flying Eagle as its exclusive partner agent for the next five years with respect to the type of insurance described in the preceding paragraph. Generally, Flying Eagle may only offer other companies’ products if the Company declines to offer coverage to a prospective insured. The Company has no obligation to accept business that does not meet its guidelines. Flying Eagle will have the right to terminate its relationship with the Company on 180 days’ notice, and the Company has the right to terminate its relationship with Flying Eagle for material breach of the Partner Agent Agreement, insolvency, or failure to maintain appropriate licenses. The Company also may terminate Flying Eagle if it is acquired by a third party, but cannot restrict the acquisition of Flying Eagle. In addition, the Company can terminate its relationship with Flying Eagle if Flying Eagle does not meet certain profitability and production guidelines under the Partner Agent Agreement. Upon termination, at Company’s discretion, Flying Eagle must service its existing business until it is terminated. At such point, Flying Eagle is allowed to place such business with other insurers. In the event, in the first five years of the Partner Agent Agreement, that the program and contract are terminated, for any reason, the Company will perform a final calculation to project future payout loss patterns and make a final payment of the outstanding profit commissions. If, after five years, the Partner Agent Agreement is terminated, for any reason, the profit sharing calculations will be performed annually until all payout periods and earned profit sharing periods are satisfied.

Under a separate agreement (the "Purchase Agreement"), Flying Eagle will purchase shares of the Company’s non-voting Class B common stock (the "Class B Shares"). The Class B Shares will become exchangeable, one-for-one with the Company’s common stock, five years after the effective date of the Partner Agent Agreement, as long as the Partner Agent Agreement is still in force. These Class B Shares will be subject to substantial restrictions on transferability during such period. If the Partner Agent Agreement is terminated prior to five years after the effective date of the Partner Agent Agreement, the Company may repurchase at the lower of cost or fair market value Flying Eagle’s Class B Shares. If the Partner Agent Agreement is terminated after five years, the Company may repurchase Flying Eagle’s Class B Shares at fair market value. After five years, Flying Eagle will be required to hold Class B Shares worth at least 50% of its a ggregate investment commitment in the Company’s Class B Shares.

Item 3.02 Unregistered Sales of Equity Securities.

Pursuant to the Purchase Agreement, Flying Eagle will purchase $1 million of the Company’s Class B Shares. The aggregate purchase price will be paid in installments over a maximum of 24 months from the date of the Purchase Agreement, with the number of Class B Shares to be delivered at each installment determined by the market price of the Company’s common stock as of the date of payment. The sale of the Class B Shares pursuant to the Purchase Agreement was made in reliance on the exemption from the registration requirements of the Securities Act of 1933 (the "Act") under Section 4(2) of the Act.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

None.

(b) Pro Forma Financial Information.

None.

(c) Exhibits:

Exhibit No. Description

99.1 Press Release dated March 26, 2007

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.

	Specialty Underwriters' Alliance, Inc.
March 27, 2007	By:	/s/ Courtney C. Smith
		Name: Courtney C. Smith
		Title: Chief Executive Officer

Exhibit Index

Exhibit No.	Description
99.1	Press release dated March 26, 2007

EX-99.1

FOR FURTHER INFORMATION:
Financial Relations Board Leslie Loyet (312) 640-6672 lloyet@frbir.com	Specialty Underwriters’ Alliance, Inc. Scott Goodreau (888) 782-4672 sgoodreau@suainsurance.com

FOR IMMEDIATE RELEASE
MONDAY, MARCH 26, 2007

SUA INSURANCE COMPANY CONTRACTS
WITH NEW PARTNER AGENT WRITING ARTISAN AND GENERAL
CONTRACTORS AND ROOFERS

CHICAGO – March 26, 2007 – Specialty Underwriters’ Alliance, Inc. (NASDAQ: SUAI), through its subsidiary SUA Insurance Company, today announced a new Partner Agent agreement with Flying Eagle Insurance Services, Inc. (“Flying Eagle”) to market and underwrite commercial general liability programs to the underserved construction segment, including the roofing trade. These programs will be available through selected brokers in ten states in the western region. Flying Eagle is headquartered in Minden, Nevada and has over 15 years experience underwriting this customer class.

Courtney Smith, president and chief executive officer, stated “Flying Eagle represents a great opportunity, as they complement our existing contractors book and have substantial experience writing this customer class. We look forward to welcoming this new Partner Agent to our organization and expanding our offerings in the western region.” In conjunction with the Partner Agent agreement, Flying Eagle has agreed to purchase $1 million of SUA’s Class B common stock.

David Lambin, president of Flying Eagle, also commented “We are very excited about partnering with SUA Insurance Company. The general liability policy being offered will provide an excellent foundation for a contracting insurance program. We look forward to a long and prosperous relationship.”

About Specialty Underwriters’ Alliance, Inc.
Specialty Underwriters’ Alliance, Inc., through its subsidiary SUA Insurance Company, is a specialty property and casualty insurance company providing commercial insurance products through exclusive wholesale Partner Agents that serve niche groups of insureds. These targeted customers require highly specialized knowledge due to their unique risk characteristics. Examples include tow trucks, professional employer organizations, public entities and contractors. SUA’s innovative approach provides products and claims handling, allowing the Partner Agent to focus on distribution and customer relationships.

Safe Harbor Statement
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This release or any other written or oral statements made by or on behalf of the company may include forward-looking statements that reflect the company’s current views with respect to future events and financial performance. All statements other than statements of historical fact included in this release are forward-looking statements. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may,” “will,” “plan,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or their negative or variations or similar terminology. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include but are not limited to ineffectiveness or obsolescence of our business strategy due to changes in current or future market conditions; increased competition on the basis of pricing, capacity, coverage terms or other factors; greater frequency or severity of claims and loss activity, including as a result of natural or man-made catastrophic events, than our underwriting, reserving or investment practices anticipate based on historical experience or industry data; the effects of acts of terrorism or war; developments in the world’s financial and capital markets that adversely affect the performance of our investments; changes in regulations or laws applicable to us, our subsidiaries, brokers or customers; acceptance of our products and services, including new products and services; changes in the availability, cost or quality of reinsurance and failure of our reinsurers to pay claims timely or at all; decreased demand for our insurance or reinsurance products; loss of the services of any of our executive officers or other key personnel; the effects of mergers, acquisitions and divestitures; changes in rating agency policies or practices; changes in legal theories of liability under our insurance policies; changes in accounting policies or practices; and changes in general economic conditions, including inflation and other factors. Forward-looking statements speak only as of the date on which they are made, and the company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

To learn more about Specialty Underwriters’ Alliance, please visit:
www.suainsurance.com.