-----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, DEzrTbaym6yHeZsPRm1HOfQHoQEHuEAj+/jGJE9LO/VHeWhtz3IdHSTr9MMLMqr/ 4WxlrTNkkvNzJMgSav4gow== 0000912057-95-010035.txt : 19951120 0000912057-95-010035.hdr.sgml : 19951120 ACCESSION NUMBER: 0000912057-95-010035 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951115 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRUCO LIFE INSURANCE CO CENTRAL INDEX KEY: 0000777917 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 221944557 STATE OF INCORPORATION: AZ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-37587 FILM NUMBER: 95593476 BUSINESS ADDRESS: STREET 1: PRUDENTIAL INSURANCE & FINANCIAL SERVICE STREET 2: 111 DURHAM AVENUE CITY: SOUTH PLAINFIELD STATE: NJ ZIP: 07080 BUSINESS PHONE: 2018026000 MAIL ADDRESS: STREET 1: 213 WASHINGTON STREET CITY: NEWARK STATE: NJ ZIP: 07102 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 OR _ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] Commission file number 33-37587 PRUCO LIFE INSURANCE COMPANY (Exact name of Registrant as specified in its charter) Arizona 22-1944557 - ----------------------------- --------------------------------- (State or other (IRS Employer Identification No.) jurisdiction,incorporation or organization) 213 Washington Street, Newark, New Jersey 07102-2992 ------------------------------------------------------ (Address of principal executive offices) (Zip Code) (201) 802-6149 -------------------------------------------------- (Registrant's Telephone Number, including area code) Securities registered pursuant to Section 12 (b) of the Act: NONE Securities registered pursuant to Section 12 (g) of the Act: NONE Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO State the aggregate market value of the voting stock held by non-affiliates of the registrant: NONE Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of November 15, 1995: Common stock, par value of $10 per share: 250,000 shares outstanding PRUCO LIFE INSURANCE COMPANY (Registrant) INDEX Page No. Cover Page - Index 2 PART I - FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements Statements of Financial Position - September 30, 1995 (Unaudited) and December 31, 1994 3 Statements of Operations (Unaudited) - Periods Ended September 30, 1995 and 1994 4 Statements of Cash Flows (Unaudited) - Periods Ended September 30, 1995 and 1994 5 Notes to the Consolidated Financial Statements (Unaudited) 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II - OTHER INFORMATION Item 1. Legal Proceedings 9 Item 2. Change in Securities 9 Item 3. Defaults Upon Senior Securities 9 Item 4. Submission of Matters to a Vote of Security Holders 9 Item 5. Other Information 9 Item 6. Exhibits, Financial Statements and Reports on Form 8-K 9 Signature Page 11 2 CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(UNAUDITED) SEPTEMBER 30, DECEMBER 31, 1995 1994 -------------- ------------- ($000'S) ASSETS Fixed maturities (market value $2,574,369 and $2,596,172). . . . . . . . . . . . . . $2,517,026 $2,647,315 Equity securities (cost $6,897 and $5,434) 7,004 3,326 Mortgage loans. . . . . . . . . . . . . . . . 64,845 71,919 Investment real estate. . . . . . . . . . . . 4,079 7,189 Policy loans. . . . . . . . . . . . . . . . . 550,444 493,862 Other long-term investments . . . . . . . . . 4,477 4,044 Short-term investments. . . . . . . . . . . . 209,043 191,455 ----------- ----------- Total Investments. . . . . . . . . . . . . 3,356,918 3,419,110 Cash. . . . . . . . . . . . . . . . . . . . . 37,139 27,780 Accrued investment income . . . . . . . . . . 58,282 59,382 Premiums due and deferred . . . . . . . . . . 18,760 16,821 Receivable from affiliates. . . . . . . . . . 9,101 7,517 Federal income taxes - from affiliate . . . - 23,306 Other assets 12,523 25,102 Assets held in Separate Accounts. . . . . . . 4,148,723 3,511,784 ----------- ----------- TOTAL ASSETS . . . . . . . . . . . . . . . . . . $7,641,446 $7,090,802 ----------- ----------- ----------- ----------- LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES: Policy liabilities and insurance reserves: Future policy benefits and claims. . . . . $2,596,828 $2,767,552 Other policy claims and benefits payable 14,953 15,184 Interest maintenance reserve (IMR) . . . . 23,870 21,802 Payable to affiliates . . . . . . . . . . . . 38,786 30,257 Federal income taxes - to affiliate. . . . . 4,945 - Other liabilities . . . . . . . . . . . . . . 82,187 131,695 Asset valuation reserve (AVR) . . . . . . . . 34,441 23,690 Liabilities related to Separate Accounts 4,065,099 3,424,535 ----------- ----------- TOTAL LIABILITIES. . . . . . . . . . . . . . . . 6,861,109 6,414,715 ----------- ----------- STOCKHOLDER'S EQUITY: Common Stock, $10 par value; authorized, 1,000,000 shares, issued and outstanding, 250,000 shares . . . . . . . . . . . . . . 2,500 2,500 Paid-in Capital . . . . . . . . . . . . . . . 439,582 439,582 Unassigned surplus. . . . . . . . . . . . . . 338,255 234,005 ----------- ----------- TOTAL STOCKHOLDER'S EQUITY . . . . . . . . . . . 780,337 676,087 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $7,641,446 $7,090,802 ----------- ----------- ----------- -----------
SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3 CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
NINE MONTHS ENDED THREE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 1995 1994 1995 1994 ------ ------ ------ ------ ($000'S) ($000'S) REVENUE Premiums and annuity considerations . . . $431,428 $ 462,152 $157,336 $163,365 Net investment income . . . . . . . . . . 188,646 184,743 62,977 62,774 Net realized investment gains/(losses). . 3,470 (6,420) 4,661 1,035 Other income. . . . . . . . . . . . . . . 32,100 9,231 4,797 4,122 --------- ---------- --------- --------- TOTAL REVENUE. . . . . . . . . . . . . . . . 655,644 649,706 229,771 231,296 --------- ---------- --------- --------- BENEFITS AND EXPENSES Current and future benefits and claims. . 385,932 414,897 133,706 146,273 Commission expenses . . . . . . . . . . . 19,160 23,299 6,651 8,195 General, administrative and other expenses. . . . . . . . . . . . . . . . 87,898 78,034 28,699 24,941 --------- ---------- --------- --------- TOTAL BENEFITS AND EXPENSES. . . . . . . . . 492,990 516,230 169,056 179,409 --------- ---------- --------- --------- Income before provision in lieu of federal income tax . . . . . 162,654 133,476 60,715 51,887 Provision in lieu of federal income tax. . . . . . . . . . . . . . . 54,142 50,337 21,226 20,509 --------- ---------- --------- --------- NET INCOME . . . . . . . . . . . . . . . . . $108,512 $83,139 $ 39,489 $ 31,378 --------- ---------- --------- --------- --------- ---------- --------- ---------
SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4 CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1995 1994 ------ ------ ($000'S) CASH FLOW FROM OPERATING ACTIVITIES Net income. . . . . . . . . . . . . . . . . $108,512 $83,139 Adjustments to reconcile net income to net cash from operations:. . . . . . . (232,588) (152,388) ----------- ------------ CASH FLOW FROM OPERATING ACTIVITIES. . . . . . (124,076) (69,249) ----------- ------------ CASH FLOW FROM INVESTING ACTIVITIES Proceeds from the sale/maturity of: Fixed maturities. . . . . . . . . . . . . 1,521,429 2,219,498 Equity securities . . . . . . . . . . . . 4,236 52 Mortgage loans . . . . . . . . . . . . . 7,104 4,709 Other long-term investments . . . . . . . 193 1,226 Investment in Real Estate . . . . . . . . 2,925 5,621 Payments for the purchase of: Fixed maturities . . . . . . . . . . . . (1,380,346) (2,064,231) Equity securities . . . . . . . . . . . . (3,947) (433) Other long-term investments . . . . . . . (626) (307) Net payments of short-term investments . . . . . . . . . . . . . . (17,533) (78,663) ----------- ------------ CASH FLOW FROM INVESTING ACTIVITIES. . . . . . 133,435 87,472 ----------- ------------ Net increase in Cash . . . . . .. . . . . . 9,359 18,223 Cash, beginning of period . . . . . . . . . 27,780 671 ----------- ------------ CASH, END OF PERIOD . . . . . . . . . . . . . $ 37,139 $ 18,894 ----------- ------------ ----------- ------------ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid in lieu of income taxes.. . . . . $ 29,896 $ 43,062 ----------- ------------ ----------- ------------
SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND 1994 (UNAUDITED) 1. GENERAL Pruco Life Insurance Company consists of Pruco Life Insurance Company (Pruco Life), Pruco Life Insurance Company of New Jersey and The Prudential Life Insurance Company of Arizona (collectively, the Company). Pruco Life is a wholly owned subsidiary of The Prudential Insurance Company of America (The Prudential), a mutual life insurance company. The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles (GAAP), which are considered statutory accounting practices for a wholly owned stock subsidiary of a mutual life insurance company. The Financial Accounting Standards Board (the "FASB") issued Interpretation No. 40, "Applicability of Generally Accepted Accounting Principles to Mutual Life Insurance and Other Enterprises", which as amended is effective for fiscal years beginning after December 15, 1995. Interpretation No. 40 changes the current practice of the Company with respect to utilizing statutory basis financial statements for general purposes in that it would not allow such financial statements to be referred to as having been prepared in accordance with GAAP pronouncements, unless specifically exempted. Implementation of the Interpretation will require significant effort and judgement as to determining GAAP for insurance operations. The Company is currently unable to determine the impact of Interpretation No. 40 on its financial statements. Certain financial information which is normally included in financial statements, prepared in accordance with generally accepted accounting principles, but which is not required for interim reporting purposes, has been omitted. The financial statements for the nine months ended September 30, 1995 and 1994 include all adjustments (consisting of only normal recurring accruals) which, in the opinion of management, are necessary for a fair presentation of results for that interim period. The results for the nine months ended September 30, 1995 and 1994, are not necessarily indicative of the results for a full year. These statements should be read in conjunction with the consolidated financial statements and notes thereto included on Form 10-K for the fiscal year ended December 31, 1994. 2. RELATED PARTY Several actions have been brought against the Company on behalf of those persons who purchased life insurance policies based on complaints about sales practices engaged in by The Prudential, the Company and agents appointed by The Prudential and the Company. The Prudential has agreed to indemnify the Company for any and all losses resulting from such litigation. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Pruco Life Insurance Company consists of Pruco Life Insurance Company (Pruco Life), Pruco Life Insurance Company of New Jersey and The Prudential Life Insurance Company of Arizona (collectively, the Company). Pruco Life is a wholly owned subsidiary of The Prudential Insurance Company of America (The Prudential), a mutual life insurance company. The Company markets individual life insurance and single pay deferred annuities primarily through The Prudential's sales force. The Company held over $7.6 billion in assets at September 30, 1995, $4.1 billion of which were held in Separate Accounts under variable life insurance policies and variable annuity contracts. The remaining assets were held in the general account for investment primarily in bonds, short-term investments and mortgage loans. 1. RESULTS OF OPERATIONS (FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995, COMPARED WITH THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND THREE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED WITH THREE MONTHS ENDED SEPTEMBER 30, 1994) Net income for the nine month period ended September 30, 1995 was $109 million. This represents a $25 million increase over the same period in 1994, most of which is attributable to improved investment results. In addition, the actual experience associated with a special provision for non-guaranteed policyholder credits reserve established at December 31, 1994 was less than had been estimated, resulting in a slight increase in net income during the current period. Premiums and annuity considerations decreased from $462 million for the nine months ended September 30, 1994 to $431 million for the same period in 1995. This decrease is primarily due to the decline in first year premiums for certain life insurance products. Net investment income and realized capital gains/(losses) improved from $178 million for the nine month period ended September 30, 1994 to $192 million for the same period ending September 30, 1995. This improvement was due to capital gains of $3 million for the nine months ended September 30, 1995 compared to capital losses of $ 6 million for the nine months ended September 30, 1994. In addition, income generated by mortgage and policy loans increased from the same period in 1994. Other income increased $23 million for the nine months ended September 30, 1995 over the nine months ended September 30, 1994. This increase was primarily due to a reclass of the special provision for non-guaranteed policyholder credits from a miscellaneous expense reserve to insurance reserves. In addition, the company share of separate account activity improved from a loss of $3 million for the nine months ended September 30, 1994 to a gain of $6 million for the nine months ended September 30, 1995. Current and future benefits and claims decreased $29 million for the nine months ended September 30, 1995, from the same period in 1994 due to a decline in premiums. Total expenses for the nine month period ended September 30, 1995 increased by $6 million from the same period in 1994. General, administrative, and other expenses for the period ended September 30, 1995, increased $10 million when compared to the same period in 1994, largely due to increased costs being allocated by The Prudential. Offsetting this increase was a decrease in commission expenses of $4 million from the same period in 1994, which is consistent with the decrease in first year premiums. Provision in lieu of federal income taxes increased $4 million for the nine months ended September from the same period in 1994. This increase relates to the increase to income before provision in lieu of federal income taxes. Net income for the three months ended September 30, 1995 was $39 million. This represents an $8 million increase over the same period in 1994, most of which is attributable to improved investment results and a decrease in current and future benefits and claims. 7 Premiums and annuity considerations decreased $6 million for the three months ended September 30, 1995 from the three months ended September 30, 1994 primarily due to the decline in first year premiums for certain life insurance products. Net investment income and realized investment gains improved from $64 million for the three months ended September 30, 1994 to $68 million for the three months ended September 30, 1995. This improvement was primarily due to the increase in capital gains. Total benefits and expenses decreased $10 million for the three months ended September 30, 1995 from the same period in 1994. This relates to the decline in premiums. 2. INVESTMENTS MORTGAGE LOANS. The balance of mortgage loans at September 30, 1995, was $65 million, a $7 million decrease from the end of 1994 resulting from the repayment of one loan during the first quarter of 1995. Currently, the Company has two loans with restructured terms in the amount of $7 million. REAL ESTATE. As of September 30, 1995, the Company's investment in real estate was $4 million. Pruco Life sold one property during the first quarter of 1995 for $3 million, accounting for the decrease in this asset category since the beginning of the year. 8 PART II ITEM 1. LEGAL PROCEEDINGS Pruco Life is not involved in any litigation that is expected to have a material effect. ITEM 2. CHANGES IN SECURITIES Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS No actions were taken during the third quarter of 1995. ITEM 5. OTHER INFORMATION Not applicable. ITEM 6. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K (a) (1) and (2) Financial Statements of registrant and subsidiaries are listed on pages 3-6 hereof and are filed as part of this Report. (a)(3) EXHIBITS REGULATION S-K 2. Not applicable. 4. Exhibits Modified Guaranteed Annuity Contract, incorporated by reference to Registrant's Form S-1 Registration Statement, Registration No. 33- 37587, filed November 2, 1990. 10. Not applicable. 11. Not applicable. 9 15. Not applicable. 18. None. 19. Not applicable. 22. Not applicable. 23. None. 24. Not applicable. 27. Exhibit 27, Financial Data Schedule, appended to this form in accordance with EDGAR instructions. 99. None 10 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, thereunto duly authorized. . . . . . . . . . . . . . PRUCO LIFE INSURANCE COMPANY (Registrant) Signature Title Date - --------- ----- ---- /s/ Esther H. Milnes President and Director November 15, 1995 - -------------------------- Esther H. Milnes /s/ Stephen P. Tooley Vice President November 15, 1995 - -------------------------- and Comptroller Stephen P. Tooley 11 EX-27 2 EX-27
7 9-MOS DEC-31-1994 JAN-01-1995 SEP-30-1995 0 2,517,026 2,574,369 7,004 64,845 4,079 3,356,918 37,139 245 0 7,641,446 0 0 14,953 3,260 0 2,500 0 0 777,837 7,641,446 431,428 188,646 3,470 32,100 385,932 19,160 87,898 162,654 54,142 108,512 0 0 0 108,512 0 0 0 0 0 0 0 0 0
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