-----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, BXYkGWfLGytc9OtkTbktV81hPuHpqoViXi+cCnsFByDPkRDzTZOBZClyMgHudTzu BqRxSoArUxFIrhVr0nmUtg== 0000914039-97-000229.txt : 19970701 0000914039-97-000229.hdr.sgml : 19970701 ACCESSION NUMBER: 0000914039-97-000229 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970630 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZURICH REINSURANCE CENTRE HOLDINGS INC CENTRAL INDEX KEY: 0000898612 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 133703575 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11868 FILM NUMBER: 97632686 BUSINESS ADDRESS: STREET 1: ONE CHASE MANHATTAN PLAZA STREET 2: 43RD FLOOR CITY: NEW YORK STATE: NY ZIP: 10005 BUSINESS PHONE: 2128985000 MAIL ADDRESS: STREET 1: ONE CANTERBURY GREEN CITY: STAMFORD STATE: CT ZIP: 06901 11-K 1 11-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K (Mark One) /X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 OR / / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from_______________ to _______________ Commission file number 1-11868 ZURICH REINSURANCE CENTRE, INC. (ZRC) 401(k) PLAN (Full title of the plan and the address of the plan, if different from that of the issuer named below) ZURICH REINSURANCE CENTRE HOLDINGS, INC. One Chase Manhattan Plaza, 43rd Floor, New York, New York 10005 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) 2 Audited Financial Statements and Schedules Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Years ended December 31, 1996 and 1995 with Report of Independent Auditors 3 Audited Financial Statements and Schedules Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Years ended December 31, 1996 and 1995 CONTENTS Report of Independent Auditors.............................................. 1 Audited Financial Statements: Statements of Net Assets Available for Plan Benefits................... 2 Statements of Changes in Net Assets Available for Plan Benefits........ 3 Notes to Financial Statements.......................................... 4 Supplemental Schedules: Schedule of Assets Held for Investment Purposes........................ 16 Schedule of Reportable Transactions.................................... 17 Index to Exhibits........................................................... 18 Signatures.................................................................. 19
4 Report of Independent Auditors Board of Directors Zurich Reinsurance Centre, Inc. We have audited the accompanying statements of net assets available for plan benefits of the Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan (the "Plan") as of December 31, 1996 and 1995, and the related statements of changes in net assets available for plan benefits for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits at December 31, 1996 and 1995, and the changes in its net assets available for plan benefits for each of the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1996, and reportable transactions for the year then ended, are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the financial statements. The fund information in Footnote 4 of the financial statements is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits for each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ ERNST & YOUNG LLP Stamford, Connecticut June 23, 1997 1 5 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Statements of Net Assets Available for Plan Benefits
DECEMBER 31, 1996 1995 ---------------------------- Investments, at market value $6,590,489 $4,461,056 Loans to participants 308,601 187,174 ---------- ---------- 6,899,090 4,648,230 Employer and employee contributions receivable -- 58,408 ---------- ---------- Net assets available for plan benefits $6,899,090 $4,706,638 ========== ==========
See Notes to Financial Statements 2 6 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Statements of Changes in Net Assets Available for Plan Benefits
YEARS ENDED DECEMBER 31, 1996 1995 1994 --------------------------------------------------- Contributions: Employee (including rollovers) $ 1,530,897 $ 1,318,547 $ 2,249,732 Employer 613,670 515,866 405,239 ----------- ----------- ----------- Total contributions 2,144,567 1,834,413 2,654,971 ----------- ----------- ----------- Investment income: Interest and dividends 334,505 193,583 165,959 Net realized and unrealized appreciation (depreciation) 534,554 316,842 (205,773) ----------- ----------- ----------- Total investment income (loss) 869,059 510,425 (39,814) ----------- ----------- ----------- Total additions 3,013,626 2,344,838 2,615,157 ----------- ----------- ----------- Benefits paid to participants (821,174) (203,648) (49,709) ----------- ----------- ----------- Net increase during period 2,192,452 2,141,190 2,565,448 Net assets available for plan benefits, beginning of period 4,706,638 2,565,448 -- ----------- ----------- ----------- Net assets available for plan benefits, end of period $ 6,899,090 $ 4,706,638 $ 2,565,448 =========== =========== ===========
See Notes to Financial Statements 3 7 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Notes to Financial Statements NOTE 1 - DESCRIPTION OF THE PLAN The following description of the Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan (the "Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. GENERAL The Plan is a qualified defined contribution plan covering all full-time employees of Zurich Reinsurance Centre, Inc. (the "Company") who have completed three full calendar months of eligibility service and attained age twenty-one. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). The Plan was adopted effective as of January 1, 1994 and subsequently amended effective July 1, 1995 to reflect the change in the custodian to Fidelity Management Trust Company ("Fidelity"). Prior to such amendment, Merrill Lynch Trust Company ("Merrill Lynch") was the custodian of the Plan. Effective April 1995, Zurich Reinsurance Centre Holdings, Inc. ("ZRCH") acquired Re Capital Corporation. As a result of this transaction, the Plan was further amended effective July 1, 1995 to merge the Re Capital Corporation Employee Savings Plan, a qualified plan under Section 401(a) of the Internal Revenue Code, with and into the Plan. Prior to January 1, 1994, the employees of the Company participated in Zurich Insurance Company U.S. Branch's contributory defined contribution plan. During 1994, participants of that plan made rollover contributions into the Plan of $1,077,900. CONTRIBUTIONS Pursuant to Section 401(k) of the Internal Revenue Code, eligible employees of the Company are able to contribute from 1% to 12% of their pre-tax annual salaries subject to maximum contributions for 1996 of $9,500 (adjusted annually for inflation). Subject to limitations under applicable law, the Company matches up to 100% of the first 3% of annual salary contributed by employees and 50% of the next 3% of salary so contributed. Participants may also contribute amounts representing rollovers of distributions from other tax qualified plans sponsored by their previous employers. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions and allocations of the Company's contributions and Plan earnings. Allocations are based on participant earnings or account balances, as defined. Forfeited balances of terminated participants' non-vested accounts are used to offset Plan expenses and/or to reduce future Company contributions. There were no such offsets to expenses or contributions recorded in 1994, 1995 or 1996. As of December 31, 1996, the amount of forfeitures transferred to the 4 8 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Notes to Financial Statements - continued Fidelity Managed Income Portfolio (included in Net transfers among funds in Note 4) that can be used to reduce future Company contributions was $119,050. These forfeitures were used during the first quarter of 1997. The benefit to which a participant is entitled is the participant's vested account balance. VESTING Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company contribution portion of their accounts plus actual earnings thereon is based on years of service as defined in the Plan and vest 20% for each completed year of service. INVESTMENT OPTIONS As of July 1, 1995, a participant may direct employer and employee contributions in any of the following investment options maintained by Fidelity: Fidelity Fund - Funds are invested mainly in common stocks of large well established companies in a variety of industries and seeks long-term capital growth. Fidelity Growth Company Fund - Funds are invested primarily in common stock and securities convertible into common stock and seeks long-term capital appreciation. Fidelity Intermediate Bond Fund - Funds are invested primarily in investment-grade fixed income obligations and seeks high current income. Fidelity Asset Manager Portfolio - Funds are allocated within the following investment parameters: 30%-70% in stocks, 20%-60% in bonds and 0%-50% in short-term instruments. The fund seeks high total return with reduced risk over the long-term, and may invest in foreign securities which meet the fund's objectives. Fidelity Managed Income Portfolio - Funds are invested in investment contracts and money market instruments and seeks the preservation of capital and high current income. Fidelity Worldwide Fund - Funds are invested in common stocks of companies anywhere in the world, including the United States, and seeks long-term capital appreciation. Fidelity Spartan U.S. Equity Index Portfolio - Funds are invested in common stocks and attempts to duplicate the composition and total return of the S&P 500. ZRC Unitized Stock Fund - Funds are invested primarily in the common stock of Zurich Reinsurance Centre Holdings, Inc. with a small percentage invested in high quality money market instruments to allow exchanges, loans and withdrawals on a daily basis. 5 9 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Notes to Financial Statements - continued Prior to July 1, 1995, the investment options of the Plan were maintained by Merrill Lynch as follows: Merrill Lynch Capital Fund - Funds are invested in stocks, debt, and convertible securities and seeks the highest possible total investment return. Merrill Lynch Corporate Bond Fund - Funds are invested in long-term corporate bonds rated A or better by Standard and Poor's and seeks high current income. Merrill Lynch Global Allocation Fund - Funds are invested in U.S. and foreign equity securities, bonds and money market instruments and seeks high total investment return. Merrill Lynch International Equity Fund - Funds are invested in foreign equity securities and seeks capital appreciation. Merrill Lynch Phoenix Fund - Funds are invested in undervalued equity and fixed income securities and seeks long-term capital growth. Merrill Lynch Retirement Preservation Trust - Funds are invested in a diversified portfolio of U.S. Government Agency securities, guaranteed investment contracts, and high-quality money market instruments and seeks high current income consistent with preservation of capital and liquidity. At December 31, 1996, there was a total of 225 participants in the Plan. The number of participants (including terminated employees still participating in the Plan) invested in each of the investment funds or with an outstanding loan balance in the Loan Fund (see "Loans to Participants" below) is as follows: Fidelity Fund 141 Fidelity Growth Company Fund 176 Fidelity Intermediate Bond Fund 63 Fidelity Asset Manager Portfolio 81 Fidelity Managed Income Portfolio 47 Fidelity Worldwide Fund 90 Fidelity Spartan U.S. Equity Index Portfolio 136 ZRC Unitized Stock Fund 69 Loan Fund 34 The total number of participants in the Plan are less than the sum of the number of participants shown above because many participate in more than one fund. LOANS TO PARTICIPANTS Participants may borrow from their fund accounts a minimum of $1,000, up to a maximum of 50% of their vested account balance not to exceed $50,000. Loan transactions are treated as a transfer from the 6 10 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Notes to Financial Statements - continued investment funds to the Loan Fund. Loan terms are from one to five years unless the loan is used to acquire a principal residence. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with current interest rates charged for loans made under similar circumstances by persons in the business of lending money. Principal and interest is paid through semi-monthly payroll deductions and deposited in the participant's account. PAYMENT OF BENEFITS On termination of service, a participant will receive a lump-sum amount equal to the vested value of his or her account unless he or she elects to maintain his or her account balance in the Plan. WITHDRAWALS Withdrawals can only be made under certain circumstances, including early or normal retirement, death, disability, termination of employment, hardship (as defined under the Internal Revenue Code) and the attainment of 59 1/2 years of age. A participant who has attained age 59 1/2 may withdraw in cash all or a portion of his or her employee contributions and the vested portion of employer contributions, provided that withdrawing his or her employer contributions does not cause the Plan to be in violation of the non-discrimination rules for employee benefit plans, as defined under the Internal Revenue Code. NOTE 2 - SUMMARY OF ACCOUNTING POLICIES INVESTMENT VALUATION The Plan's investments in the Fidelity and Merrill Lynch funds are stated at the quoted market prices of the funds. The market value of the ZRC Unitized Stock Fund is based primarily on the closing price of the stock of Zurich Reinsurance Centre Holdings, Inc. as reported on the New York Stock Exchange. Interest income, which includes interest on loans to participants, is recorded as earned. Dividend income is recognized on the ex-dividend date. Purchases and sales of investments are accounted for on the trade date. Realized gains or losses on sales of investments are determined using the weighted average cost method. Changes in net unrealized appreciation or depreciation of investments are reflected in the statement of changes in net assets available for plan benefits. ADMINISTRATIVE EXPENSES All administrative expenses incurred in connection with the operation of the Plan are paid by the Company, with the exception of loan administrative fees that are deducted directly from participant accounts. These fees were not material for any of the periods presented and are reflected as benefits paid to participants in the statements of changes in net assets available for plan benefits. 7 11 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Notes to Financial Statements - continued NOTE 3 - INVESTMENTS The Plan's investments and Loan Fund at market value and cost, and the percentage of each investment and Loan Fund to total net assets (exclusive of contributions receivable), including those that represented more than 5% of the net assets of the Plan were as follows:
DECEMBER 31, 1996 ------------------------------------------- % OF MARKET NET ASSETS COST ---------- ---------- ---------- Fidelity Fund $1,217,897 18 $1,134,141 Fidelity Growth Company Fund 1,802,092 26 1,694,235 Fidelity Intermediate Bond Fund 370,027 5 374,317 Fidelity Asset Manager Portfolio 475,770 7 460,147 Fidelity Managed Income Portfolio 603,656 9 603,656 Fidelity Worldwide Fund 594,370 9 544,064 Fidelity Spartan U.S. Equity Index Portfolio 1,279,626 18 1,069,126 ZRC Unitized Stock Fund 247,051 4 236,811 ---------- --- ---------- Total investments 6,590,489 96 6,116,497 Loan Fund 308,601 4 308,601 ---------- --- ---------- Net assets $6,899,090 100 $6,425,098 ========== === ==========
DECEMBER 31, 1995 ------------------------------------------- % OF MARKET NET ASSETS COST ---------- ---------- ---------- Fidelity Fund $ 745,481 16 $ 734,655 Fidelity Growth Company Fund 1,217,707 26 1,247,014 Fidelity Intermediate Bond Fund 258,736 6 255,481 Fidelity Asset Manager Portfolio 290,545 6 283,681 Fidelity Managed Income Portfolio 434,815 10 434,815 Fidelity Worldwide Fund 386,962 8 390,846 Fidelity Spartan U.S. Equity Index Portfolio 1,027,673 22 978,078 ZRC Unitized Stock Fund 99,137 2 94,518 ---------- --- ---------- Total investments 4,461,056 96 4,419,088 Loan Fund 187,174 4 187,174 ---------- --- ---------- Net assets $4,648,230 100 $4,606,262 ========== === ==========
8 12 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Notes to Financial Statements - continued Net realized and unrealized appreciation (depreciation) in the fair value of investments during the years ended December 31, 1996, 1995 and 1994 were as follows (all investments prior to July 1, 1995 were maintained by Merrill Lynch and subsequent to July 1, 1995 by Fidelity):
JANUARY 1 - JULY 1 - DECEMBER 31, 1996 DECEMBER 31, 1995 ----------------- ----------------- Fidelity Fund $ 88,316 $ 11,026 Fidelity Growth Company Fund 162,782 (29,399) Fidelity Intermediate Bond Fund (5,269) 3,298 Fidelity Asset Manager Portfolio 12,455 6,868 Fidelity Managed Income Portfolio -- -- Fidelity Worldwide Fund 59,293 (4,200) Fidelity Spartan U.S. Equity Index Portfolio 210,430 49,797 ZRC Unitized Stock Fund 6,547 4,562 --------- -------- $ 534,554 $ 41,952 ========= ========
JANUARY 1 - JANUARY 1 - JUNE 30, 1995 DECEMBER 31, 1994 ------------- ----------------- Merrill Lynch Capital Fund $ 78,023 $ (27,572) Merrill Lynch Corporate Bond Fund 22,959 (7,839) Merrill Lynch Global Allocation Fund 82,535 (53,088) Merrill Lynch International Equity Fund (3,377) (38,425) Merrill Lynch Phoenix Fund 94,750 (78,849) Merrill Lynch Retirement Preservation Trust -- -- --------- --------- $ 274,890 $(205,773) ========= =========
NOTE 4 - NET ASSETS AVAILABLE FOR PLAN BENEFITS AND CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS The following summarizes the activity in the separate funds and in total for the years ended December 31, 1996, 1995 and 1994, as it relates to the increase (decrease) in net assets available for plan benefits (all investments prior to July 1, 1995 were maintained by Merrill Lynch and subsequent to July 1, 1995 by Fidelity): 9 13 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Notes to Financial Statements - continued
Fidelity Growth Fidelity Fidelity Asset Fidelity Company Intermediate Manager Fund Fund Bond Fund Portfolio ----------- ----------- ------------ -------------- Net assets available for plan benefits at January 1, 1996 $ 755,807 $ 1,234,237 $ 262,686 $ 295,289 Contributions: Employee (including rollovers) 289,510 455,822 108,628 145,583 Employer 111,042 181,119 41,331 47,076 Investment Income: Interest and dividends 99,475 82,396 25,194 36,135 Net realized and unrealized appreciation (depreciation) 88,316 162,782 (5,269) 12,455 Loan repayments 4,736 8,839 2,749 1,845 ----------- ----------- --------- --------- 593,079 890,958 172,633 243,094 Benefits paid to participants (234,296) (221,271) (132,625) (2,897) Loans to participants (38,158) (24,333) (12,909) (36,002) Net transfers among funds 141,465 (77,499) 80,242 (23,714) ----------- ----------- --------- --------- Net increase during period 462,090 567,855 107,341 180,481 ----------- ----------- --------- --------- Net assets available for plan benefits at December 31, 1996 $ 1,217,897 $ 1,802,092 $ 370,027 $ 475,770 =========== =========== ========= =========
Fidelity Fidelity Spartan U.S. ZRC Managed Fidelity Equity Unitized Income Worldwide Index Stock Portfolio Fund Portfolio Fund --------- --------- ----------- --------- Net assets available for plan benefits at January 1, 1996 $ 439,726 $ 392,495 $ 1,037,554 $ 101,670 Contributions: Employee (including rollovers) 108,623 116,357 241,832 64,542 Employer 32,977 58,938 105,915 35,272 Investment Income: Interest and dividends 32,556 22,214 36,083 452 Net realized and unrealized appreciation (depreciation) -- 59,293 210,430 6,547 Loan repayments 2,571 3,530 5,738 2,069 --------- --------- ----------- --------- 176,727 260,332 599,998 108,882 Benefits paid to participants (45,708) (25,676) (145,858) (2,018) Loans to participants (19,945) (3,581) (27,420) (1,981) Net transfers among funds 52,856 (29,200) (184,648) 40,498 --------- --------- ----------- --------- Net increase during period 163,930 201,875 242,072 145,381 --------- --------- ----------- --------- Net assets available for plan benefits at December 31, 1996 $ 603,656 $ 594,370 $ 1,279,626 $ 247,051 ========= ========= =========== =========
Loan Fund Total ----------- ----------- Net assets available for plan benefits at January 1, 1996 $ 187,174 $ 4,706,638 Contributions: Employee (including rollovers) -- 1,530,897 Employer -- 613,670 Investment Income: Interest and dividends -- 334,505 Net realized and unrealized appreciation (depreciation) -- 534,554 Loan repayments (32,077) -- ----------- ----------- (32,077) 3,013,626 Benefits paid to participants (10,825) (821,174) Loans to participants 164,329 -- Net transfers among funds -- -- ----------- ----------- Net increase during period 121,427 2,192,452 ----------- ----------- Net assets available for plan benefits at December 31, 1996 $ 308,601 $ 6,899,090 =========== ===========
10 14 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Notes to Financial Statements - continued
Fidelity Fidelity Growth Fidelity Asset Fidelity Company Intermediate Manager Fund Fund Bond Fund Portfolio --------- ----------- ------------ --------- Net assets available for plan benefits at July 1, 1995 held by Fidelity (transferred in from Merrill Lynch) $ 508,959 $ 858,750 $ 178,234 $ 204,310 Contributions: Employee (including rollovers) 154,327 256,862 53,180 61,480 Employer 57,313 88,449 21,107 26,776 Investment Income: Interest and dividends 40,710 69,430 7,694 7,094 Net realized and unrealized appreciation (depreciation) 11,026 (29,399) 3,298 6,868 Loan repayments 869 1,422 1,158 487 --------- ----------- --------- --------- 264,245 386,764 86,437 102,705 Benefits paid to participants (1,459) (8,391) -- -- Loans to participants (16,641) (3,000) (1,822) (6,485) Net transfers among funds 703 114 (163) (5,241) --------- ----------- --------- --------- Net increase (decrease) during period 246,848 375,487 84,452 90,979 --------- ----------- --------- --------- Net assets available for plan benefits at December 31, 1995 held by Fidelity $ 755,807 $ 1,234,237 $ 262,686 $ 295,289 ========= =========== ========= =========
Fidelity Fidelity Spartan U.S. ZRC Managed Fidelity Equity Unitized Income Worldwide Index Stock Portfolio Fund Portfolio Fund --------- --------- ----------- --------- Net assets available for plan benefits at July 1, 1995 held by Fidelity (transferred in from Merrill Lynch) $ 449,375 $ 273,618 $ 749,268 $ 64,342 Contributions: Employee (including rollovers) 69,275 98,844 158,462 30,292 Employer 26,341 28,385 56,241 11,462 Investment Income: Interest and dividends 15,755 9,520 24,267 1,126 Net realized and unrealized appreciation (depreciation) -- (4,200) 49,797 4,562 Loan repayments 1,090 1,068 1,538 376 --------- --------- ----------- --------- 112,461 133,617 290,305 47,818 Benefits paid to participants (124,326) (15,549) (676) (6,343) Loans to participants -- -- (7,052) -- Net transfers among funds 2,216 809 5,709 (4,147) --------- --------- ----------- --------- Net increase (decrease) during period (9,649) 118,877 288,286 37,328 --------- --------- ----------- --------- Net assets available for plan benefits at December 31, 1995 held by Fidelity $ 439,726 $ 392,495 $ 1,037,554 $ 101,670 ========= ========= =========== =========
Loan Fund Total ----------- ----------- Net assets available for plan benefits at July 1, 1995 held by Fidelity (transferred in from Merrill Lynch) $ 160,182 $ 3,447,038 Contributions: Employee (including rollovers) -- 882,722 Employer -- 316,074 Investment Income: Interest and dividends -- 175,596 Net realized and unrealized appreciation (depreciation) -- 41,952 Loan repayments (8,008) -- ----------- ----------- (8,008) 1,416,344 Benefits paid to participants -- (156,744) Loans to participants 35,000 -- Net transfers among funds -- -- ----------- ----------- Net increase (decrease) during period 26,992 1,259,600 ----------- ----------- Net assets available for plan benefits at December 31, 1995 held by Fidelity $ 187,174 $ 4,706,638 =========== ===========
11 15 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Notes to Financial Statements - continued
Merrill Lynch Merrill Lynch Global Merrill Lynch Merrill Lynch Corporate Allocation International Merrill Lynch Capital Fund Bond Fund Fund Equity Fund Phoenix Fund --------- --------- --------- --------- --------- Net assets available for plan benefits at January 1, 1995 held by Merrill Lynch $ 459,385 $ 199,918 $ 668,976 $ 467,232 $ 504,456 Contributions: Employee (including rollovers) 79,081 40,832 100,714 82,215 84,501 Employer 35,335 18,753 46,698 34,264 42,375 Investment Income: Interest and dividends 787 9,236 536 416 536 Net realized and unrealized appreciation (depreciation) 78,023 22,959 82,535 (3,377) 94,750 Loan repayments 1,090 827 743 577 742 --------- --------- --------- --------- --------- 194,316 92,607 231,226 114,095 222,904 Benefits paid to participants (4,866) (204) (11,911) (16,406) (12,911) Loans to participants (10,672) (7,720) (23,332) (12,747) (9,189) Net transfers among funds 8,399 13,764 (53,635) (18,245) (16,366) --------- --------- --------- --------- --------- Net increase during period 187,177 98,447 142,348 66,697 184,438 --------- --------- --------- --------- --------- Balance at June 30, 1995 646,562 298,365 811,324 533,929 688,894 --------- --------- --------- --------- --------- Transfers to Fidelity (646,562) (298,365) (811,324) (533,929) (688,894) --------- --------- --------- --------- --------- Net assets available for plan benefits at July 1, 1995 held by Merrill Lynch $ -- $ -- $ -- $ -- $ --
Merrill Lynch Retirement Preservation Loan Trust Fund Total --------- --------- ----------- Net assets available for plan benefits at January 1, 1995 held by Merrill Lynch $ 164,548 $ 100,933 $ 2,565,448 Contributions: Employee (including rollovers) 48,482 -- 435,825 Employer 22,367 -- 199,792 Investment Income: Interest and dividends 6,476 -- 17,987 Net realized and unrealized appreciation (depreciation) -- -- 274,890 Loan repayments 432 (4,411) -- --------- --------- ----------- 77,757 (4,411) 928,494 Benefits paid to participants (606) -- (46,904) Loans to participants -- 63,660 -- Net transfers among funds 66,083 -- -- --------- --------- ----------- Net increase during period 143,234 59,249 881,590 --------- --------- ----------- Balance at June 30, 1995 307,782 160,182 3,447,038 --------- --------- ----------- Transfers to Fidelity (307,782) (160,182) (3,447,038) --------- --------- ----------- Net assets available for plan benefits at July 1, 1995 held by Merrill Lynch $ -- $ -- $ --
12 16 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Notes to Financial Statements - continued
Merrill Lynch Merrill Lynch Global Merrill Lynch Merrill Lynch Corporate Allocation International Merrill Lynch Capital Fund Bond Fund Fund Equity Fund Phoenix Fund --------- --------- --------- --------- --------- Net assets available for plan benefits at January 1, 1994 $ -- $ -- $ -- $ -- $ -- Contributions: Employee (including rollovers) 428,599 176,866 598,549 424,827 477,308 Employer 62,254 36,252 104,907 69,487 78,250 Investment Income: Interest and dividends 30,723 7,523 36,163 28,289 53,769 Net realized and unrealized depreciation (27,572) (7,839) (53,088) (38,425) (78,849) Loan repayments 635 453 931 267 423 --------- --------- --------- --------- --------- 494,639 213,255 687,462 484,445 530,901 Benefits paid to participants (4,437) (3,496) (5,550) (2,082) (1,895) Loans to participants (30,168) (18,117) (13,183) (10,632) (19,237) Net transfers among funds (649) 8,276 247 (4,499) (5,313) --------- --------- --------- --------- --------- Net increase during period 459,385 199,918 668,976 467,232 504,456 --------- --------- --------- --------- --------- Net assets available for plan benefits at December 31, 1994 $ 459,385 $ 199,918 $ 668,976 $ 467,232 $ 504,456 ========= ========= ========= ========= ========= Merrill Lynch Retirement Preservation Loan Trust Fund Total ----------- --------- ----------- Net assets available for plan benefits at January 1, 1994 $ -- $ -- $ -- Contributions: Employee (including rollovers) 143,583 -- 2,249,732 Employer 54,089 -- 405,239 Investment Income: Interest and dividends 9,492 -- 165,959 Net realized and unrealized depreciation -- -- (205,773) Loan repayments 188 (2,897) -- --------- ----------- ----------- 207,352 (2,897) 2,615,157 Benefits paid to participants (32,249) -- (49,709) Loans to participants (12,493) 103,830 -- Net transfers among funds 1,938 -- -- --------- ----------- ----------- Net increase during period 164,548 100,933 2,565,448 --------- ----------- ----------- Net assets available for plan benefits at December 31, 1994 $ 164,548 $ 100,933 $ 2,565,448 ========= =========== ===========
13 17 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Notes to Financial Statements - continued NOTE 5 - PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. NOTE 6 - INCOME TAX STATUS The Internal Revenue Service ruled on July 5, 1996 that the Plan qualifies under Section 401(a) of the Internal Revenue Code ("IRC") and, therefore, the related trust is not subject to tax under present income tax law. The Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan Administrator, Zurich Reinsurance Centre, Inc. is not aware of any course of actions or series of events that have occurred that might adversely affect the Plan's qualified status. NOTE 7 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for plan benefits per the financial statements to the Form 5500:
DECEMBER 31, 1996 1995 ----------------------------- Net assets available for plan benefits per the financial statements $6,899,090 $ 4,706,638 Amounts allocated to withdrawing participants -- (9,294) ---------- ----------- Net assets available for plan benefits per Form 5500 $6,899,090 $ 4,697,344 ========== ===========
The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:
YEAR ENDED DECEMBER 31, 1996 ---------------------------- Benefits paid to participants per the financial statements $ 821,174 Less: Amounts allocated to withdrawing participants at December 31, 1995 (9,294) --------- Benefits paid to participants per the Form 5500 $ 811,880 =========
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, but not yet paid as of that date. NOTE 8 - SUBSEQUENT EVENT On April 17, 1997, ZRCH entered into a definitive agreement to merge with a subsidiary of the Zurich Group, its 65.7% shareholder. Under the agreement, which was approved by unanimous vote of ZRCH's Board of Directors, ZRCH's public shareholders, including participants in the ZRC Unitized Stock Fund, will receive cash consideration at closing of $39.50 per share. The agreement contains terms and conditions customary in transactions of this type including provisions relating to approval of the transaction by ZRCH's shareholders and certain regulatory consents. The transaction is expected to close during the third quarter of 1997. 14 18 SUPPLEMENTAL SCHEDULES 15 19 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Schedule of Assets Held for Investment Purposes December 31, 1996
FACE VALUE/NUMBER MARKET OF SHARES VALUE COST ------------------------------------------------ Fidelity Fund 49,308 $1,217,897 $1,134,141 Fidelity Growth Company Fund 44,540 1,802,092 1,694,235 Fidelity Intermediate Bond Fund 36,709 370,027 374,317 Fidelity Asset Manager Portfolio 28,887 475,770 460,147 Fidelity Managed Income Portfolio 603,656 603,656 603,656 Fidelity Worldwide Fund 38,621 594,370 544,064 Fidelity Spartan U.S. Equity Index Portfolio 47,481 1,279,626 1,069,126 ZRC Unitized Stock Fund 22,377 247,051 236,811 ---------- ---------- Total Investments 6,590,489 6,116,497 Loan Fund 308,601 308,601 ---------- ---------- Net Assets Available for Plan Benefits $6,899,090 $6,425,098 ========== ==========
16 20 Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan Schedule of Reportable Transactions
CURRENT NUMBER OF PURCHASE COST OF VALUE NET FUND TRANSACTIONS PRICE ASSETS (PROCEEDS) GAIN - -------------------------------------------------------------------------------------------------------------------
CATEGORY (i) - SINGLE SECURITY TRANSACTIONS AGGREGATING MORE THAN 5% OF THE CURRENT VALUE OF PLAN ASSETS AT THE BEGINNING OF THE YEAR: NONE. CATEGORY (ii) - SERIES OF TRANSACTIONS INVOLVING PROPERTY OTHER THAN SECURITIES, WITH, OR IN CONJUNCTION WITH, THE SAME PERSON, WHICH AMOUNT IN THE AGGREGATE TO MORE THAN 5% OF THE CURRENT VALUE OF PLAN ASSETS AT THE BEGINNING OF THE YEAR: NONE. CATEGORY (iii) - SERIES OF SECURITIES TRANSACTIONS WITH RESPECT TO SECURITIES OF THE SAME ISSUE WHICH AMOUNT IN THE AGGREGATE TO MORE THAN 5% OF THE CURRENT VALUE OF PLAN ASSETS AT THE BEGINNING OF THE YEAR:
Fidelity Fund 30 $ 318,978 $ 334,363 $ 15,385 Fidelity Fund 75 $ 718,463 718,463 Fidelity Growth Company Fund 36 379,712 405,327 25,615 Fidelity Growth Company Fund 86 826,934 826,934 Fidelity Intermediate Bond Fund 25 169,011 171,288 2,277 Fidelity Intermediate Bond Fund 68 287,848 287,848 Fidelity Asset Manager Portfolio 19 69,983 73,677 3,694 Fidelity Asset Manager Portfolio 53 246,449 246,449 Fidelity Managed Income Portfolio 24 216,083 216,083 -- Fidelity Managed Income Portfolio 60 384,924 384,924 Fidelity Worldwide Fund 24 100,217 105,319 5,102 Fidelity Worldwide Fund 62 253,434 253,434 Fidelity Spartan U.S. Equity Index Portfolio 35 345,746 395,272 49,526 Fidelity Spartan U.S. Equity Index Portfolio 78 436,795 436,795
CATEGORY (iv) - SINGLE SECURITY TRANSACTIONS WITH, OR IN CONJUNCTION WITH, A PERSON, IF ANY PRIOR OR SUBSEQUENT SINGLE SECURITY TRANSACTIONS WITH SUCH PERSON, AMOUNT IN THE AGGREGATE TO MORE THAN 5% OF THE CURRENT VALUE OF PLAN ASSETS AT THE BEGINNING OF THE YEAR: NONE. 17 21 INDEX TO EXHIBITS
Exhibit Number Description of Exhibit Page ------ ---------------------- ---- 23 Consent of Ernst & Young LLP, Independent Auditors 20
18 22 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on its behalf by the undersigned, hereunto duly authorized. ZURICH REINSURANCE CENTRE, INC. (ZRC) 401(k) PLAN ------------------------------------------------- (Name of Plan) Date: June 26, 1997 By: /s/ Karen O'Connor Rubsam ---------------------------------------------- Karen O'Connor Rubsam Senior Vice President, Chief Financial Officer and Treasurer of Zurich Reinsurance Centre, Inc. (the Plan Administrator) 19 EX-23 2 EX-23 1 Exhibit 23 Consent of Ernst & Young LLP, Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-93390) pertaining to the Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan of our report dated June 23, 1997, with respect to the financial statements and schedules of the Zurich Reinsurance Centre, Inc. (ZRC) 401(k) Plan included in the Plan's Annual Report (Form 11-K) for the year ended December 31, 1996. /s/ ERNST & YOUNG LLP Stamford, Connecticut June 26, 1997 20 -----END PRIVACY-ENHANCED MESSAGE-----