UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ______________________________________
FORM 8-K/A
(Amendment No. 1) _______________________________________
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 31, 2016
INDEPENDENCE HOLDING COMPANY (Exact name of registrant as specified in its charter)
Delaware	001-32244	58-1407235
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

96 Cummings Point Road, Stamford, CT 06902

(Address of Principal Executive Offices) (Zip Code)

(203) 358-8000

(Registrant’s telephone number, including area code)

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))

EXPLANATORY NOTE

On April 1, 2016, Independence Holding Company (“IHC”) filed with the Securities and Exchange Commission a Current Report on Form 8-K reporting the completion of the disposition of all of the equity interests of its indirect subsidiary IHC Risk Solutions, LLC to SR Corporate Solutions America Holding Corporation, a division of Swiss Re (the “Sale”).  This Amendment No. 1 to Current Report on Form 8-K/A amends Item 9.01 of the Current Report on Form 8-K filed on April 1, 2016 to present certain pro forma condensed consolidated financial information in connection with the Sale, which pro forma condensed consolidated financial information is filed as an exhibit hereto.

Item 9.01.

Financial Statements and Exhibits

(b)

Pro forma financial information

The pro forma condensed consolidated financial information specified in Article 11 of Regulation S-X is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.

(d)

Exhibits

2.1

Purchase and Sale Agreement (Filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on January 6, 2016 and incorporated herein by reference).

99.1

Press Release (Filed as Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on January 6, 2016 and incorporated herein by reference)

99.2

The (i) Pro Forma Condensed Consolidated Balance Sheet of IHC at December 31, 2015, as if the Sale had occurred as of that date, (ii) Pro Forma Condensed Consolidated Statement of Income of IHC for the year ended December 31, 2015, as if the Sale had occurred as of the beginning of the period, and (iii) Pro Forma Condensed Consolidated Statements of Income of IHC for the years ended December 31, 2014 and 2013, as if the Sale was reported as discontinued operations for those periods, and the related notes thereto.

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, thereunto duly authorized.

INDEPENDENCE HOLDING COMPANY

(Registrant)

By:   /s/ Teresa A. Herbert Teresa A. Herbert Senior Vice President and Chief Financial Officer




Date:




June 13, 2016

Exhibit 99.2

INDEPENDENCE HOLDING COMPANY

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

INDEX TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Page
INTRODUCTION	4
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
Pro Forma Condensed Consolidated Balance Sheet of IHC at December 31, 2015 as if the sale being disclosed in this filing had occurred as of that date.	5
Pro Forma Condensed Consolidated Statements of Income of IHC for the year ended December 31, 2015 as if the sale being disclosed in this filing had occurred as of the beginning of the period	6
Pro Forma Condensed Consolidated Statements of Income of IHC for the years ended December 31, 2014 and 2013 as if the sale being disclosed in this filing was reported as discontinued operation for those periods	7-8
Notes to Pro Forma Condensed Consolidated Financial Statements	9

Independence Holding Company

Introduction to Pro Forma Condensed Consolidated Financial Statements

(Unaudited)

On March 31, 2016, Independence Holding Company (“IHC”) and American Independence Corp. (“AMIC”) sold IHC Risk Solutions LLC (“RS”), its direct writer of excess or stop-loss insurance for self-insured employer groups that desire to manage the risk of large medical claims (“Medical Stop-Loss”) to Swiss Re Corporate Solutions, a division of Swiss Re (“Swiss Re”).  In addition, under the purchase and sale agreement, all of the in-force stop-loss business of Standard Security Life and Independence American produced by RS was co-insured by Westport Insurance Corporation (“Westport”), Swiss Re’s largest US carrier, as of January 1, 2016.  The aggregate purchase price was $152.5 million in cash, subject to adjustments and settlements (collectively, the “Transactions”).  Approximately 89% of the purchase price was allocated to AMIC, with the balance being paid to Standard Security Life.  IHC’s and AMIC’s block of Medical Stop-Loss business are in run-off. The sale of RS and exit from the medical stop-loss business represents a strategic shift that will have a major effect on the Company’s operations and financial results.  The disposal transaction qualifies for reporting as discontinued operations in the first quarter of 2016 as a result of the Board of Directors’ commitment to a plan for its disposal in January 2016.

Unaudited pro forma financial information for IHC has been provided below to show what the significant effects on the historical financial information might have been had the Transactions occurred at an earlier date. The unaudited pro forma condensed financial statements however are not necessarily indicative of the results of operations or related effects on financial position that would have been attained had the above mentioned Transactions actually occurred earlier. They also may not be useful in predicting the future financial condition and results of operations of the Company. The actual financial position and results of operations may differ significantly from the unaudited pro forma amounts reflected herein due to a variety of factors.

For the fiscal year ended December 31, 2015, the unaudited pro forma condensed financial statements shown below give the effect of discontinued operations resulting from the sale of RS and the effect of the aforementioned coinsurance transaction on the Company’s historical consolidated financial statements.

Because the sale of RS was not yet reflected as discontinued operations in the Company’s historical financial statements for the fiscal years ended December 31, 2015, 2014 and 2013 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, we have also provided the unaudited pro forma results of operations for the 2014 and 2013 fiscal years to show the effect of discontinued operations in those years. The sale of RS qualifies for reporting as discontinued operations in the first quarter of 2016 as a result of the Board of Directors commitment to a plan for its disposal in January 2016.

INDEPENDENCE HOLDING COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (In thousands, except share data) (Unaudited)
DECEMBER 31, 2015
												100%
									Sale of Risk			Coinsurance			Pro Forma
							Historical		Solutions			of Stop-Loss			Adjusted
ASSETS:
	Investments:
			Short-term investments			$	50	$	-		$	-		$	50
			Securities purchased under agreements to resell				28,285		-			-			28,285
			Trading Securities				1,259		-			-			1,259
			Fixed maturities, available-for-sale				428,601		-			-			428,601
			Equity securities, available-for-sale				8,426		-			-			8,426
			Other investments				21,538		-			-			21,538
					Total investments		488,159		-			-			488,159
	Cash and cash equivalents						19,171		125,735	a,b,d		(42,967)	e		101,939
	Deferred acquisition costs						499		-			-			499
	Due and unpaid premiums						69,075		-			-			69,075
	Due from reinsurers						480,859		2,214	b		56,055	e		539,128
	Premium and claim funds						22,755		(740)	b		-			22,015
	Goodwill						52,940		(5,664)	b		-			47,276
	Other assets						64,505		(11,759)	b,d		-			52,746
				TOTAL ASSETS		$	1,197,963	$	109,786		$	13,088		$	1,320,837
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES:
	Policy benefits and claims					$	245,443	$	-		$	-		$	245,443
	Future policy benefits						270,624		-			-			270,624
	Funds on deposit						173,350		-			-			173,350
	Unearned premiums						10,236		-			-			10,236
	Other policyholders' funds						11,822		-			-			11,822
	Due to reinsurers						44,141		2,214	b		-			46,355
	Accounts payable, accruals and other liabilities						66,308		(2,199)	b		13,088	e		77,197
	Debt						5,189		-			-			5,189
	Junior subordinated debt securities						38,146		-			-			38,146
				TOTAL LIABILITIES			865,259		15			13,088			878,362
Commitments and contingencies
STOCKHOLDERS' EQUITY:
	Preferred stock (none issued)						-		-			-			-
	Common stock $1.00 par value: 23,000,000 shares
		authorized; 18,569,183 shares issued and
		17,265,758 shares outstanding					18,569		-			-			18,569
	Paid-in capital						127,733		-			-			127,733
	Accumulated other comprehensive loss						(3,440)		-			-			(3,440)
	Treasury stock, at cost:  1,303,425 shares						(13,961)		-			-			(13,961)
	Retained earnings						194,450		100,004	c, d		-			294,454
	TOTAL IHC STOCKHOLDERS’ EQUITY						323,351		100,004			-			423,355
	NONCONTROLLING INTERESTS IN SUBSIDIARIES						9,353		9,767	c		-			19,120
				TOTAL EQUITY			332,704		109,771			-			442,475
				TOTAL LIABILITIES AND EQUITY		$	1,197,963	$	109,786		$	13,088		$	1,320,837

See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements.

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (In thousands, except per share data) (Unaudited)
FOR THE YEAR ENDED DECEMBER 31, 2015
								Pro Forma		100%
					Sale of Risk			Discontinued		Coinsurance			Pro Forma
			Historical		Solutions			Operations		of Stop-Loss			Adjusted
REVENUES:
	Premiums earned	$	479,534	$	-		$	479,534	$	(209,765)	f	$	269,769
	Net investment income		17,298		(61)	b		17,237		(3,775)	f		13,462
	Fee income		12,954		(2,852)	b		10,102		-			10,102
	Other income		10,276		(9)	b		10,267		-			10,267
	Gain on sale of subsidiary to joint
	venture		9,940		-			9,940		-			9,940
	Net realized investment gains		3,094		-			3,094		-			3,094
	Net impairment losses recognized
	in earnings		(228)		-			(228)		-			(228)
			532,868		(2,922)			529,946		(213,540)			316,406
EXPENSES:
	Insurance benefits, claims and reserves		307,178		-			307,178		(153,919)	f		153,259
	Selling, general and administrative
	expenses		172,180		1,388	b		173,568		(40,104)	f		133,464
	Amortization of deferred acquisition
	costs		3,524		-			3,524		-			3,524
	Interest expense on debt		1,798		-			1,798		-			1,798
			484,680		1,388			486,068		(194,023)			292,045
Income before income taxes from
continuing operations			48,188		(4,310)			43,878		(19,517)			24,361
Income taxes			17,666		(1,762)	b		15,904		(6,831)	f		9,073
Income from continuing operations			30,522		(2,548)			27,974		(12,686)			15,288
Less: Income from noncontrolling interests			(578)		181	b		(397)		144	f		(253)
NET INCOME FROM CONTINUING
	OPERATIONS ATTRIBUTABLE TO IHC	$	29,944	$	(2,367)		$	27,577	$	(12,542)		$	15,035
Basic income per common share
from continuing operations		$	1.73	$	(.14)		$	1.59	$	(.72)		$	.87
WEIGHTED AVERAGE SHARES
OUTSTANDING			17,314		17,314			17,314		17,314			17,314
Diluted income per common share
from continuing operations		$	1.71	$	(.13)		$	1.58	$	(.72)		$	.86
WEIGHTED AVERAGE DILUTED
SHARES OUTSTANDING			17,484		17,484			17,484		17,484			17,484

See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements.

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (In thousands, except per share data) (Unaudited)
FOR THE YEAR ENDED DECEMBER 31, 2014
					Sale of Risk			Pro Forma
			Historical		Solutions			Adjusted
REVENUES:
	Premiums earned	$	479,048	$	-		$	479,048
	Net investment income		21,692		(78)	b		21,614
	Fee income		20,646		(3,753)	b		16,893
	Other income		4,859		(8)	b		4,851
	Net realized investment gains		7,688		-			7,688
			533,933		(3,839)			530,094
EXPENSES:
	Insurance benefits, claims and reserves		326,035		-			326,035
	Selling, general and administrative expenses		177,848		(1,656)	b		176,192
	Amortization of deferred acquisition costs		4,941		-			4,941
	Interest expense on debt		1,797		-			1,797
			510,621		(1,656)			508,965
Income before income taxes from continuing operations			23,312		(2,183)			21,129
Income taxes			6,391		(283)	b		6,108
Income from continuing operations			16,921		(1,900)			15,021
Less: Income from noncontrolling interests			(628)		177	b		(451)
	NET ICOME FROM CONTINUING OPERATIONS
	ATTRIBUTABLE TO IHC	$	16,293	$	(1,723)		$	14,570
Basic income per common share from continuing operations		$	.93	$	(.10)		$	.83
WEIGHTED AVERAGE SHARES OUTSTANDING			17,471		17,471			17,471
Diluted income per common share from continuing operations		$	.92	$	(.10)		$	.82
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING			17,636		17,636			17,636

See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements.

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (In thousands, except per share data) (Unaudited)
FOR THE YEAR ENDED DECEMBER 31, 2013
					Sale of Risk			Pro Forma
			Historical		Solutions			Adjusted
REVENUES:
	Premiums earned	$	495,991	$	-		$	495,991
	Net investment income		27,471		(86)	b		27,385
	Fee income		26,954		(917)	b		26,037
	Other income		4,878		(13)	b		4,865
	Net realized investment gains		19,750		-			19,750
			575,044		(1,016)			574,028
EXPENSES:
	Insurance benefits, claims and reserves		354,790		-			354,790
	Selling, general and administrative expenses		179,553		(1,345)	b		178,208
	Amortization of deferred acquisition costs		15,132		-			15,132
	Interest expense on debt		1,915		-			1,915
			551,390		(1,345)			550,045
Income before income taxes from continuing operations			23,654		329			23,983
Income taxes			8,398		114	b		8,512
Income from continuing operations			15,256		215			15,471
Less: Income from noncontrolling interests			(1,477)		5	b		(1,472)
	NET ICOME FROM CONTINUING OPERATIONS
	ATTRIBUTABLE TO IHC	$	13,779	$	220		$	13,999
Basic income per common share from continuing operations		$	.78	$	.01		$	.79
WEIGHTED AVERAGE SHARES OUTSTANDING			17,758		17,758			17,758
Diluted income per common share from continuing operations		$	.77	$	.01		$	.78
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING			17,871		17,871			17,871

See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements.

Independence Holding Company

Notes to Pro Forma Condensed Consolidated Financial Statements

(Unaudited)

Note 1:

Basis of Presentation

Independence Holding Company (the “Company”, “IHC” or we, us and our) and American Independence Corp. (“AMIC“) entered into an agreement to sell all of the membership interests of IHC Risk Solutions LLC (“RS”) and co-insure to an unaffiliated reinsurer, all of the in-force medical stop-loss insurance business of Standard Security Life Insurance Company of New York (“SSL”) and Independence American Insurance Company (“IAIC”) produced by RS, as of January 1, 2016 (collectively, the “Transactions”). The unaudited pro forma condensed consolidated balance sheet has been prepared as if the Transactions had been consummated on December 31, 2015. The unaudited pro forma condensed consolidated statements of income for the year ended December 31, 2015 has been prepared as if the Transactions occurred as of the beginning of the period; the unaudited pro forma results of operations for the 2014 and 2013 fiscal years have been prepared to show the effect of discontinued operations as if the Transactions occurred as of the beginning of each respective period (see Note 2) in those years.

The unaudited pro forma condensed consolidated financial statements are based upon available information and certain assumptions considered reasonable by management. The estimated net gain resulting from the consummation of the Transactions is included as an adjustment to retained earnings on the unaudited pro forma condensed consolidated balance sheet at December 31, 2015 and is not reflected as an adjustment in the unaudited pro forma condensed consolidated statements of income. In addition, the Company did not include a pro forma adjustment for investment income that could have been potentially earned on the net proceeds of the Transactions in such statements. However, the unaudited pro forma condensed consolidated statements of income do reflect pro forma adjustments for estimated federal and state income tax provisions, including the use of federal net operating loss carryforwards, which may be subject to further adjustment based on the actual carrying value of net assets sold at the date of closing, among other considerations.

The unaudited pro forma condensed consolidated financial statements do not represent what the Company’s financial position would have been assuming the consummation of the Transactions had occurred on December 31, 2015 or what the Company’s consolidated statements of income would have been assuming the consummation of the Transactions had occurred prior to January 1, 2013, nor do they project the Company’s financial position or results of operations at any future date or for any future period. These unaudited pro forma condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 as filed with the Securities and Exchange Commission.

Because the sale of RS was not yet reflected as discontinued operations in the Company’s historical financial statements for the fiscal years ended December 31, 2015, 2014 and 2013 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, we have also provided the unaudited pro forma results of operations for the 2014 and 2013 fiscal years to show the effect of discontinued operations in those years. The sale of RS qualifies for reporting as discontinued operations in the first quarter of 2016 as a result of the Board of Directors commitment to a plan for its disposal in January 2016.

Note 2:

Discontinued Operations

In January 2016, the Boards of Directors of IHC and AMIC approved a plan to sell the membership interests of RS and, subsequently, the Company entered into an agreement for its sale. The sale closed on March 31, 2016. The sale agreement includes: (i) the sale of 100% of the outstanding membership interests of RS for approximately $139.4 million; (ii) the simultaneous cancellation of transfer agreements between RS and the Company’s subsidiaries, Majestic Underwriters, LLC (“Majestic”) and Alliance Underwriters, LLC

(“Alliance”); and (iii) the liquidation of Majestic and Alliance. The Company’s block of Medical Stop-Loss business is in run-off. The sale of RS and exit from the medical stop-loss insurance business represents a strategic shift that will have a major effect on the Company’s operations and financial results. The disposal transaction qualifies for reporting as discontinued operations in the first quarter of 2016 as a result of the Board of Directors’ commitment to a plan for its disposal in January 2016.

Note 3:

Reinsurance

In connection with the aforementioned Transactions, the Company entered into a coinsurance agreement with an unaffiliated reinsurer, Westport Insurance Corporation (Swiss Re Corporate Solutions' largest US carrier), to co-insure all of the in-force stop-loss insurance business of SSL and IAIC produced by RS, as of January 1, 2016, for ceding consideration of approximately $13.1 million.

The ceding of reinsurance does not discharge the primary liability of the original insurer to the insured.

Note 4:

Pro Forma Adjustments

a)

To reflect the proceeds on the sale of RS.

b)

To reflect the elimination of assets and liabilities and corresponding income and expenses of RS, Majestic and Alliance.

c)

To reflect the pro forma estimated gain of $100.0 million on the sale of RS and the liquidation of Majestic and Alliance, net of estimated expenses, amounts attributable to noncontrolling interests and applicable state and federal taxes had the transaction taken place as of December 31, 2015. AMIC has available federal net operating loss carryforwards which will offset any gains AMIC recognizes upon consummation of the Transactions.

d)

To reflect estimated state and Federal taxes on the pro forma estimated gain, net of a decrease in AMIC’s valuation allowance on federal net operating loss carryforwards expected to be utilized in connection with the pro forma estimated gain.

e)

To reflect the transfer of assets in connection with the 100% coinsurance basis of the reserves for all the in-force medical stop-loss insurance business of SSL and IAIC produced by RS, and the corresponding ceding consideration.

f)

To reflect the effects of the 100% coinsurance of all the in-force medical stop-loss insurance business of SSL and IAIC produced by RS, and to reflect the agreement of IHC and its affiliates to cease insurance and reinsurance of all medical stop-loss insurance for a specified period of time.

.