-----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, C9vp61PIvcAbuKqWGgIwG4z9hPYm0Oc7Tk5etE44jKQJ8OkgRW0q0KNUFh7bmOSY kndDYJVmUjUw85Hl7kFUDA== 0000818155-98-000013.txt : 19981123 0000818155-98-000013.hdr.sgml : 19981123 ACCESSION NUMBER: 0000818155-98-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981116 DATE AS OF CHANGE: 19981120 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WALSHIRE ASSURANCE COMPANY CENTRAL INDEX KEY: 0000818155 STANDARD INDUSTRIAL CLASSIFICATION: 6331 IRS NUMBER: 232023240 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16267 FILM NUMBER: 98753463 BUSINESS ADDRESS: STREET 1: 3350 WHITEFORD RD STREET 2: PO BOX 3849 CITY: YORK STATE: PA ZIP: 17402 BUSINESS PHONE: 7177570000 MAIL ADDRESS: STREET 1: 3350 WHITEFORD RD STREET 2: PO BOX 3849 CITY: YORK STATE: PA ZIP: 174020138 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 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, 1998 OR ( ) 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 0-16267 WALSHIRE ASSURANCE COMPANY (Exact name of registrant as specified in its charter) Pennsylvania 23-2023240 (State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification Number) 3350 Whiteford Road, P. O. Box 3849, York, PA 17402-0138 (Address of principal executive offices) (Zip code) (717)757-0000 (Registrant s telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) 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 Indicate the number of shares outstanding of each of the issuer s classes of common stock, as of the latest practical date. Class: Outstanding at October 31, 1998: Common stock - $.01 Par Value 4,493,778 shares WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES INDEX PAGE NUMBER Part I FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets as of September 30, 1998 (unaudited) and December 31, 1997. . . . . . . . . . . 2 Consolidated Statements of Income for the three months ended September 30, 1998 and 1997 (unaudited) . 4 Consolidated Statements of Income for the nine months months ended September 30, 1998 and 1997 (unaudited) . 5 Consolidated Statements of Cash Flows for the nine months ended September 30, 1998 and 1997 (unaudited) . 6 Notes to Consolidated Financial Statements (unaudited) . . . . . . . . . . . . . . . . . . . . . 7 Item 2. Management s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . 8 Part II OTHER INFORMATION . . . . . . . . . . . . . . . . . . 11 Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . 11 Item 2. Changes in Securities . . . . . . . . . . . . . . . . 11 Item 3. Defaults Upon Senior Securities . . . . . . . . . . . 11 Item 4. Submission of Matters to Vote of Security Holders. . . 11 Item 5. Other Information . . . . . . . . . . . . . . . . . . 11 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 11 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 1 WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except per share data) September 30, December 31, Assets 1998 1997 (Unaudited) Investments: Held to maturity, at amortized cost: Fixed maturities (fair value $15,234 and $17,754) . . . . . . . . . . . . . . . . $ 14,455 $ 17,228 Available for sale, at fair value: Fixed maturities (cost $45,776 and $37,722) . . . . . . . . . . . . . . . . 46,609 38,182 Equity securities (cost $8,523 and $8,268). 7,401 8,205 Short-term investments . . . . . . . . . . . . 2,902 7,531 Other investments. . . . . . . . . . . . . . . 1,171 2,656 Total investments . . . . . . . . . . . . . 72,538 73,802 Cash. . . . . . . . . . . . . . . . . . . . . . . 302 254 Accrued investment income receivable. . . . . . . 855 800 Amounts receivable from reinsurers. . . . . . . . 1,210 3,698 Amounts receivable from reinsured company . . . . 521 542 Agents balances (net of allowance for doubtful accounts of $120). . . . . . . . . . . . . . . 6,397 7,411 Installment premiums receivable . . . . . . . . . 5,586 7,681 Agents balances and installment premiums receivable from related parties. . . . . . . . 1,351 1,897 Premium finance receivables (net of unearned finance charges and allowance for credit losses of $102 and $84). . . . . . . . . . . . 3,443 4,283 Reinsurance receivable. . . . . . . . . . . . . . 25,779 24,370 Deferred acquisition costs. . . . . . . . . . . . 3,879 4,778 Property and equipment, (net of accumulated depreciation of $2,378 and $2,194) . . . . . . 2,475 3,462 Other assets. . . . . . . . . . . . . . . . . . . 3,820 1,464 Total assets. . . . . . . . . . . . . . . . $128,156 $134,442 See accompanying notes to consolidated financial statements. 2 WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES Consolidated Balance Sheets, Continued (In thousands, except per share data) September 30, December 31, Liabilities and Shareholders Equity 1998 1997 (Unaudited) Liabilities: Unpaid claims and claim settlement expenses. $ 55,483 $ 48,964 Unearned premiums. . . . . . . . . . . . . . 22,183 27,384 Short-term notes payable . . . . . . . . . . 5,583 5,015 Long-term notes payable. . . . . . . . . . . 9 558 Deposits by insureds . . . . . . . . . . . . 1,933 2,445 Commissions payable to agents. . . . . . . . 1,188 1,442 Commissions payable to related parties . . . 118 163 Other liabilities. . . . . . . . . . . . . . _ 1,410 980 Total liabilities . . . . . . . . . . . . 87,907 86,951 Shareholders equity: Preferred stock, par value $.01 per share; 2,000 shares authorized; 128 and 123 shares issued and outstanding . . . . . . 1 1 Common stock, par value $.01 per share; 10,000 shares authorized; 4,692 and 4,710 shares issued; 4,443 and 4,710 shares outstanding. . . . . . . . . . . . 47 47 Additional paid-in capital . . . . . . . . . 38,827 38,812 Unrealized gain (loss) on investments available for sale (net of deferred taxes of $(98) and $135). . . . . . . . . . . . ( 191) 262 Retained earnings. . . . . . . . . . . . . . 3,549 8,369 42,233 47,491 Treasury stock (249 shares in 1998). . . . . ( 1,984) -___ Shareholders' equity. . . . . . . . . . . 40,249 47,491 Total liabilities and shareholders equity . $ 128,156 $134,442 See accompanying notes to consolidated financial statements. 3 WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share data) Three Months Ended September 30,_____ 1998 1997 (Unaudited)(Unaudited) Revenues: Premiums earned . . . . . . . . . . . . . . . . . $ 12,230 $ 16,464 Premiums ceded. . . . . . . . . . . . . . . . . . ( 2,131) ( 7,091) Net premiums earned . . . . . . . . . . . . . . . 10,099 9,373 Net investment income . . . . . . . . . . . . . . 1,090 1,110 Net realized gains on investments . . . . . . . . 208 842 Other . . . . . . . . . . . . . . . . . . . . . . 156 261 Total revenues . . . . . . . . . . . . . . . . 11,553 11,586 Expenses: Claims and claim settlement expenses. . . . . . . 13,207 12,120 Reinsurance recoveries. . . . . . . . . . . . . . ( 4,043) ( 5,484) Net claims and claim settlement expenses. . . . . 9,164 6,636 Amortization of deferred acquisition costs. . . . 1,687 1,257 Underwriting, general and administrative expenses. . . . . . . . . . . . . . . . . . . . 2,026 1,889 Dividends to policyholders. . . . . . . . . . . . - 213 Interest. . . . . . . . . . . . . . . . . . . . . 124 178 Total expenses . . . . . . . . . . . . . . . . 13,001 10,173 Income (loss) before income taxes. . . . . . . . . . ( 1,448) 1,413 Provision for income taxes (benefit) . . . . . . . . ( 434) 366 Net income (loss). . . . . . . . . . . . . . . . . . ( 1,014) 1,047 Dividends on convertible preferred stock . . . . . . 104 104 Net income (loss) applicable to common stock . . . . $( 1,118) $ 943 Net income (loss) per common share: Basic and diluted: Net income (loss). . . . . . . . . . . . . . . $( .25) $ .20 Weighted average shares outstanding. . . . . . 4,443 4,680 See accompanying notes to consolidated financial statements. 4 WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share data) Nine Months Ended September 30, _ 1998 1997 (Unaudited)(Unaudited) Revenues: Premiums earned . . . . . . . . . . . . . . . . . $ 38,887 $ 48,014 Premiums ceded. . . . . . . . . . . . . . . . . . ( 6,679) (15,316) Net premiums earned . . . . . . . . . . . . . . . 32,208 32,698 Net investment income . . . . . . . . . . . . . . 3,251 3,161 Net realized gains on investments . . . . . . . . 748 2,235 Other . . . . . . . . . . . . . . . . . . . . . . 371 593 Total revenues . . . . . . . . . . . . . . . . 36,578 38,687 Expenses: Claims and claim settlement expenses. . . . . . . 39,998 34,812 Reinsurance recoveries. . . . . . . . . . . . . . ( 8,693) (10,483) Net claims and claim settlement expenses. . . . . 31,305 24,329 Amortization of deferred acquisition costs. . . . 5,678 4,585 Underwriting, general and administrative expenses. . . . . . . . . . . . . . . . . . . . 5,195 6,246 Dividends to policyholders. . . . . . . . . . . . - 213 Interest. . . . . . . . . . . . . . . . . . . . . 324 543 Total expenses . . . . . . . . . . . . . . . . 42,502 35,916 Income (loss) before income taxes. . . . . . . . . . ( 5,924) 2,771 Provision for income taxes (benefit) . . . . . . . . ( 2,015) 600 Net income (loss). . . . . . . . . . . . . . . . . . ( 3,909) 2,171 Dividends on convertible preferred stock . . . . . . 316 312 Net income (loss) applicable to common stock . . . . $( 4,225) $ 1,859 Net income (loss) per common share: Basic and diluted: Net income (loss). . . . . . . . . . . . . . . $( .93) $ .40 Weighted average shares outstanding. . . . . . 4,561 4,670 See accompanying notes to consolidated financial statements. 5 WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) except per share data) Nine Months Ended September 30, ____ 1998 1997 (Unaudited) (Unaudited) Cash flows from operating activities: Net income (loss). . . . . . . . . . . . . . . . . $( 3,909) $ 2,171 Adjustments to reconcile net income to net cash provided by operating activities Net realized gains on investments. . . . . . . ( 748) ( 2,235) Decrease (increase) in assets: Accrued investment income receivable. . . . . ( 55) 18 Amounts receivable from reinsurers. . . . . . 2,488 1,837 Amounts receivable from reinsured company . . 21 17 Agents balances and installment premiums receivable . . . . . . . . . . . . . . . . . 3,109 2,795 Agents balances and installment premiums receivable from related parties. . . . . . . 546 1,050 Premium finance receivables . . . . . . . . . 840 289 Reinsurance receivables . . . . . . . . . . . ( 1,409) ( 7,865) Deferred acquisition costs. . . . . . . . . . 899 561 Other, net. . . . . . . . . . . . . . . . . . ( 1,970) 204 (Decrease) increase in liabilities: Unpaid claims, claim settlement expenses. . . 6,519 6,016 Unearned premiums . . . . . . . . . . . . . . ( 5,201) ( 5,343) Amounts payable to reinsurers . . . . . . . . - 3,902 Deposits by insureds. . . . . . . . . . . . . ( 512) ( 196) Other, net. . . . . . . . . . . . . . . . . . 156 ( 38) Net cash provided by operating activities. . . . . 774 3,183 Cash flows from investing activities: Purchase of investments: Held to maturity . . . . . . . . . . . . . . . . --- ( 2,338) Available for sale . . . . . . . . . . . . . . . (24,075) (27,784) Sale of investments: Available for sale . . . . . . . . . . . . . . . 14,957 24,273 Maturity of investments. . . . . . . . . . . . . . 4,179 4,010 Net (purchase) sale of short term and other investments. . . . . . . . . . . . . . . . . . . 6,207 1,801 Purchase of property and equipment . . . . . . . . ( 73) ( 216) Sale of property and equipment . . . . . . . . . . 672 616 Other, net . . . . . . . . . . . . . . . . . . . . 267 ( 137) Net cash provided by investing activities. . . . 2,134 225 Cash flows from financing activities: Cash dividends paid. . . . . . . . . . . . . . . . ( 909) ( 1,223) Issuance of common stock . . . . . . . . . . . . . 14 148 Purchase of treasury stock . . . . . . . . . . . . ( 1,984) - Proceeds from notes payable . . . . . . . . . . . 608 - Payment of notes payable . . . . . . . . . . . . . ( 589) ( 2,476) Net cash (used in) financing activities. . . . . ( 2,860) ( 3,551) Net increase (decrease) in cash . . . . . . . . . . 48 ( 143) Cash at beginning of the period. . . . . . . . . . . 254 637 Cash at end of the period. . . . . . . . . . . . . . $ 302 $ 494 See accompanying notes to consolidated financial statements. 6 WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. The consolidated balance sheet as of September 30, 1998, the consolidated statements of income for the three and nine months ended September 30, 1998 and 1997, and the consolidated statements of cash flows for the nine months then ended have been prepared by Walshire Assurance Company ( the Company ) without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 1998 and for all periods presented, have been made. 2. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. It is suggested that these unaudited consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company s 1997 Annual Report. The results of operations for the period ended September 30, 1998 are not necessarily indicative of the results of operations for the full year. 3. Basic net income per share is computed by dividing net income applicable for common stock by the weighted average number of common shares outstanding during the year. Diluted earnings per share includes the additional shares that would have been outstanding had the 6 1/2% Convertible Preferred Stock been converted to common, if dilutive, as well as the diluted effect of the Company's stock option and stock purchase plans. 4. Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income", was issued by the Financial Accounting Standards Board (FASB) in 1997. As defined in SFAS 130, comprehensive income is composed of net income, as well as other revenues, expenses, gains and losses that are currently excluded from net income, but are accounted for separately in the shareholders' equity section of the balance sheet. SFAS 130 requires that all items of comprehensive income be reported in a financial statement. Total comprehensive income (loss) is as follows: (In thousands) Nine Months Ended September 30, _____ 1998 1997 (Unaudited) (Unaudited) Net income (loss) . . . . . . . . . . . . . . . . . $(3,909) 2,171 Other comprehensive income (loss): Unrealized gain (loss) on securities, net of tax: Unrealized holding gains arising during period. 41 1,904 Less: reclassification adjustment for gains realized in net income. . . . . . . . . . . . 494 1,475 Net unrealized gain (loss). . . . . . . . . . . ( 453) 429 Other comprehensive income (loss) . . . . . . . . . ( 453) 429 Total comprehensive income (loss) . . . . . . . . . $(4,362) $ 2,600 5. Forward Looking Statements. The information contained in this Quarterly Report contains forward looking statements (as such term is defined in the Securities Exchange Act of 1934 and the regulations thereunder), including without limitation, statements as to the allowances for doubtful accounts and 7 credit losses, reserves for unpaid claims and claim settlement expenses, the classification of the Company's investment portfolio and other statements as to management's beliefs, expectations or opinions. Such forward looking statements are subject to risks and uncertainties and may be affected by various factors which may cause actual results to differ materially from those in the forward looking statements. Certain of these risks, uncertainties and other factors are discussed in this Quarterly Report or in the Company's Annual Report on Form 10-K for the year ended December 31, 1997, a copy of which may be obtained from the Company upon request and without charge (except for the exhibits thereto). 6. Investment Considerations. In analyzing whether to make, or to continue, an investment in the Company, investors should consider, among other factors, certain investment considerations more particularly described in the Company's Annual Report on Form 10-K for the year ended December 31, 1997. 7. Subsequent Event. On August 12, 1998, the Company announced that it had entered into a definitive Merger Agreement, pursuant to which Kingsway Financial Services Inc. will acquire all outstanding shares of Walshire common stock for $8.25 per share in cash and all outstanding shares of Walshire preferred stock for $50.00 per share, plus all accrued and unpaid dividends through the Effective Date of the Merger (an amount equal to the redemption price for such shares). The closing of the transaction is subject to obtaining all necessary shareholder and regulatory approvals and the satisfaction of certain other closing conditions. Item 2. Management s Discussion and Analysis of Financial Condition and Results of Operations Revenues for the three month period ended September 30, 1998 decreased $33,000 or .3%, from revenues for the three month period ended September 30, 1997. This decrease was primarily the result of a decrease in net realized gains on investments, offset, in part, by an increase in net premiums earned. Net premiums earned in the third quarter of 1998 increased $.7 million, or 7.7%, over premiums earned in the same period in 1997. The increase in net premiums earned is a result of the Company ceding less premiums to reinsurers in the current year than it did in 1997. Direct premiums written decreased $1.4 million, or 13.0%, in the three month period ended September 30, 1998 when compared to the same period in 1997. The following table sets forth the direct premiums written by the Company for the three month periods ended September 30, 1998 and 1997 by line of business. (In thousands) Three months ended September 30, 1998 1997 %Change Auto liability $3,677 $ 4,282 (14.1%) Auto physical damage 2,759 3,192 (13.6%) Homeowners 654 793 (17.5%) Inland marine 637 606 5.1% Workers compensation 541 858 (36.9%) Other 1,267 1,223 3.6% Total $9,535 $10,954 (13.0%) Expenses for the three month period ended September 30, 1998 increased $2.8 million, or 27.8%, over expenses for the three month period ended September 30, 1997. The increase was primarily the result of an increase in net claims and claim settlement expenses and amortization of deferred acquisition costs. 8 The increase in net claims and claim settlement expenses was the result of an increase in net premiums earned as well as an increase in the statutory loss ratio from 72.1% in 1997 to 92.1% in 1998. The increase in the loss ratio was due primarily to adverse development in prior years loss reserves of $.8 million (predominantly workers' compensation) and an increase in the loss ratio of the Company's auto liability business. The increase in the amortization of deferred acquisition costs was primarily the result of the increase in net premiums earned and a decrease in ceding commission income. The statutory combined ratio for the three month period ended September 30, 1998 was 130.5%, an increase from 108.1% for the three month period ended September 30, 1997. Revenues for the nine month period ended September 30, 1998 decreased $2.1 million, or 5.5%, from revenues for the nine month period ended September 30, 1997. This decrease was primarily the result of a decrease in net realized gains on investments. Even though premiums earned decreased by $9.1 million, net premiums earned in the first nine months of 1998 decreased only $.5 million, or 1.5%, from premiums earned in the same period in 1997. The minor decrease in net premiums earned is a result of the Company ceding less premiums to reinsurers in the current year than it did in 1997. Direct premiums written decreased $8.4 million, or 20.0%, in the nine month period ended September 30, 1998 when compared to the same period in 1997. The following table sets forth the direct premiums written by the Company for the nine month periods ended September 30, 1998 and 1997 by line of business. (In thousands) Nine months ended September 30, 1998 1997 %Change Auto liability $14,950 $18,540 (19.4%) Auto physical damage 9,369 12,727 (26.4%) Inland marine 2,148 2,365 ( 9.2%) Homeowners 1,844 2,132 (13.5%) Workers compensation 1,708 2,813 (39.3%) Other 3,643 3,488 4.4% Total $33,662 $42,065 (20.0%) Expenses for the nine month period ended September 30, 1998 increased $6.6 million, or 18.3%, over expenses for the nine month period ended September 30, 1997. The increase was primarily the result of increases in net claims and claim settlement expenses and amortization of deferred acquisition costs, offset, in part, by a decrease in underwriting, general and administrative expenses. Increases in net claims and claim settlement expenses were the result of an increase in the statutory loss ratio from 75.8% in 1997 to 98.4.% in 1998. The increase in the loss ratio was due primarily to adverse development in prior year auto liability and workers' compensation loss reserves totaling $6.2 million as well as a higher loss ratio in the Company's auto liability business. The increase in the amortization of deferred acquisition costs was primarily the result of decreases in ceding commission income. The decrease in underwriting, general and administrative expenses were primarily the result of the reduction in operating expenses due to decreases in direct premium written. The statutory combined ratio for the nine month period ended September 30, 1998 was 131.8%, an increase from 110.1% for the nine month period ended September 30, 1997. 9 Liquidity and Capital Resources Historically, the Company has generated funds sufficient to support its operations and has maintained a high degree of liquidity in its investment portfolio. The primary sources of funds to meet the demands of claim settlements and operating expenses are premiums, ceding commissions, investment income and existing lines of credit. The Company s funds generally are invested in securities with maturities intended to provide adequate funds to pay claims and expenses without the forced sale of investments. The Company believes that its current cash and short term investments, together with funds generated from operations, will be sufficient to meet its operating and capital requirements for the foreseeable future. The Year 2000 Many computer systems in use today were designed and developed using two digits, rather than four, to specify the year. As a result, such systems will recognize the year 2000 as "00". This could cause many computer applications to fail completely or to create erroneous results unless corrective measures are taken. The Company utilizes software and related computer technologies essential to its operations that will be affected by the Year 2000 issue. The Company also relies on certain critical non-information technology systems ("non-IT systems"), such as electricity, telephones, facsimile machines, heating and air-conditioning and fire protection systems. Any disruption in the operation of the IT and non-IT systems of either the Company or any of its critical customers, vendors or suppliers could have a material adverse effect on the Company's business, results of operations or financial condition. The Company has completed plans to ensure year 2000 compliance and started conversions of applications beginning in 1995. The Company has also completed much of the work necessary to make its computer systems Year 2000 compliant. These modifications and replacements are expected to be completed by mid year 1999. The additional expense associated with these actions cannot presently be determined, but it is not anticipated to be material. Despite all the procedures the Company has in place, there can be no guarantee that its systems or the systems of other companies on which the Company's business relies will be timely converted, or that failure to convert by another company or a conversion that is incompatible with the Company's systems, will not have a materially adverse effect on the Company and its operations. 10 Part II OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matter to a Vote of Security Holders None Item 5. Other Information Pursuant to recent amendments to the proxy rules under the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), the Company's stockholders are notified that the deadline for providing the Company timely notice of any stockholder proposal to be submitted outside of the Rule 14a-8 process for consideration at the Company's 1999 Annual Meeting of Stockholders (the "Annual Meeting") will be March 12, 1999. As to all such matters which the Company does not have notice on or prior to March 12, 1999, discretionary authority shall be granted to the persons designated in the Company's proxy related to the Meeting to vote on such proposal. This change in procedure does not affect the Rule 14a-8 requirements applicable to inclusion of stockholder proposal in the Company's proxy materials related to the Meeting. A stockholder proposal regarding the Meeting must be submitted to the Company at its office located at 3350 Whiteford Road, York, PA 17402 by December 28, 1998, to receive consideration for inclusion in the Company's 1999 proxy materials. Any such proposal must also comply with the proxy rules under the Exchange Act, including Rule 14a-8. Item 6. Exhibits and Reports on Form 8-K Exhibits (a) Exhibit 27.1 Financial data schedule Reports on Form 8-K None 11 SIGNATURES Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WALSHIRE ASSURANCE COMPANY (Registrant) DATE: November 13, 1998 /s/ Kenneth R. Taylor Kenneth R. Taylor President and Chief Executive Officer DATE: November 13, 1998 /s/ Gary J. Orndorff Gary J. Orndorff Vice President/Treasurer and Chief Financial Officer 12 SIGNATURES Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WALSHIRE ASSURANCE COMPANY (Registrant) DATE: November 13, 1998 __________________________ Kenneth R. Taylor President and Chief Executive Officer DATE: November 13, 1998 __________________________ Gary J. Orndorff Vice President/Treasurer and Chief Financial Officer 12 EX-27 2 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
7 09-MOS DEC-31-1998 SEP-30-1998 46,609 14,455 15,234 7,401 91 0 72,538 302 1,731 3,879 128,156 55,483 22,183 0 1,933 5,592 47 0 1 40,201 128,156 32,208 3,251 748 371 31,305 5,678 5,195 (5,924) (2,015) 0 0 0 0 (3,909) (.93) (.93) 48,964 25,423 5,883 10,836 13,920 55,483 0
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