Item 1. BUSINESS
Kansas City Life Insurance Company (KCL) was incorporated under the assess-ment laws of Missouri in 1895 as the Bankers Life Association. In 1900, its present corporate title was adopted and it was reorganized as a legal reserve company in 1903. The Company operates nationwide, being licensed in 48 states and the District of Columbia.
The Company primarily operates in four business segments: Kansas City Life Insurance Company, divided between its individual and group businesses, and its two insurance affiliates, Sunset Life Insurance Company of America (Sunset) and Old American Insurance Company (Old American). KCL markets its individual products, principally interest sensitive and variable products, through a career general agency sales force and these products generate 42% of consolidated insur-ance revenues. Variable universal life and annuities totaled 57% of new statutory premiums in 1999. The group products, largely life, disability and administrative services only, are sold through the general agency sales force and appointed group agents. Group revenues account for 20% of insurance revenues. Sunset markets interest sensitive and traditional products to individuals through a personal pro-ducing general agency system. Sunset operates in 34 states and is in the process of filing for admission to operate in most of the remaining states. This segment provides 10% of revenues. The Old American segment markets whole life final expense products to seniors through a general agency sales force. Old American operates in 46 states and accounts for 28% of consolidated insurance revenues.
Old American's administrative operations are merged into KCL's home office and its administrative and accounting systems. Sunset's administrative operations were merged into KCL's home office during 1999. Increased efficiencies and expense savings should be realized in 2000 and subsequent years.
KCL and its subsidiaries are subject to state regulations in their states of domicile and in the states in which they do business. Although the federal govern-ment generally does not regulate the business of insurance, federal initiatives often have an impact on the business in a variety of ways including the taxation of insurance companies and the tax treatment of insurance products.
KCL and its subsidiaries have 648 full time employees located in the home office.
The Company is engaged in a competitive industry, competing with 1,500 to 2,000 other life insurance companies in the United States. The industry is highly competitive with respect to pricing, selection of products and quality of service. No single competitor nor any small group of competitors dominates any of the markets in which the Company operates.
Item 2.
Item 2. PROPERTIES
Kansas City Life's home office is located at 3520 Broadway in Kansas City, Missouri. The Company owns and wholly occupies two five story buildings on an eight acre site.
The Company owns various other properties held for investment.
Item 3.
Item 3. LEGAL PROCEEDINGS
In recent years, the life insurance industry, including the Company, has been subject to an increase in litigation, pursued on behalf of purported classes of insurance purchasers, questioning the conduct of insurers in the marketing of their products. The Company believes that the actions described below are part of this trend. The Company denies all allegations of wrongdoing in these lawsuits, and has been defending them vigorously.
Adams, et al, v. Kansas City Life Insurance Company; United States District Court for the Western District of Missouri; Case No. 98-1053-CV-W-9. This liti-gation was originally brought by three Company policyholders in the Middle District of Florida in December, 1997, but was subsequently transferred to the Western District of Missouri. The policyholders allege the Company marketed the life insurance policies as policies that would pay for themselves after a certain period of time, i.e., that the premiums would "vanish" and/or that the policies were inappropriately marketed as "retirement plans". According to the policy-holders, the policies would not pay for themselves, but, rather, require additional premium payments each year to remain in effect. Plaintiffs charge the Company with fraudulent concealment, fraudulent inducement, breach of fiduciary duty, breach of contract, breach of the duty of good faith and fair dealing, negligent supervision, negligent misrepresentation, and seek unspecified compensatory and punitive damages, declaratory and injunctive relief, reaffirma- tion of the party's contract, and imposition of a constructive trust. Plaintiffs' petition seeks to certify a class comprised of all persons and/or entities who have or had an ownership interest in one or more permanent life insurance policies issued from January 1, 1985 to the present. The trial court has granted the Company's motion to dismiss counts alleging fraud/fraudulent concealment and deceit, and negligent misreprepresentation, but denied the motion in all other respects. Discovery has been completed on the issue of class certification and a class certification hearing was held February 16-17, 2000, but no decision has been issued. Management denies the allegations of the complaint including the existence of a certifiable class and intends to defend this case vigorously.
Stewart, et al, v. Security Benefit Life Insurance Company and Bank Market Service, Inc.; Filed in November, 1998 in the Tenth Judicial District Court of Kansas, Johnson County, Kansas; Case No. 98-C04036. The Company is defending this case pursuant to the terms of a coinsurance agreement with Security Benefit Life (SBL). This litigation was filed by four SBL policyholders who allege SBL (through its agent, Bank Market Service, Inc.) sold the policies as retirement plans when, in fact, the policies are for life insurance and have only a minimal cash value. The plaintiffs seek to rescind their insurance contracts with SBL and recover monetary damages in an amount of alleged benefits that "true" retirement plans would have provided. Plaintiffs seek to certify a class comprised of "all persons who have an ownership interest (or had at the time the policy terminated) in one or more life insurance policies marketed as retirement plans by defendants between 1977 and the present." Previously, the trial court granted in part the Company's motion for summary judgment dismissing all fraud and fiduciary claims and leaving only a claim for breach of contract to be litigated. Following a hearing on class certification that was held on March 20-21, 2000, in a bench ruling the trial court denied plaintiffs motion for class certification. Management intends to continue to defend this matter vigorously and denies the allegations including the existence of a certifiable class.
Wilner v. Sunset Life Insurance Company, Dean Delevie, et al; California Superior Court; Case No. SC051573. The original complaint was filed on March 9, 1998 in Los Angeles Superior Court. In her first complaint, plaintiff sued Sunset Life Insurance Company (Sunset), a subsidiary, and one of its agents for unspecified compensatory and punitive damages alleging various forms of deceit, breach of fiduciary duty, and negligence in connection with the sale of a universal life insurance policy as a replacement for an existing policy. Sub-sequently, the plaintiff amended her complaint to seek class action status and to add a claim under California's Business and Professions Code 17200 which authorizes individual plaintiffs to sue on behalf of the public to remedy specific delineated alleged unfair business practices, and to seek declaratory and injunctive relief. Sunset obtained a dismissal of the breach of fiduciary duty claim and the class action allegations, but the trial court refused to dismiss the 17200 allegations. All parties appealed and the court of appeals refused to overrule the trial court's failure to dismiss the 17200 claims and remanded the case for further discovery and proof regarding the class action allegations in the complaint. Sunset denies the allegations and management believes that this case does not fit the requirements for either class treatment and/or litigation under 17200 and intends to defend this matter vigorously.
Wright, etc., v. Sunset Life Insurance Company; Circuit Court of Clarke County, Alabama; Case No. CV98-0220-M. Originally filed in June, 1998, plaintiff alleged that Sunset is liable for breach of contract and unjust enrichment, and seeks unspecified compensatory damages. Plaintiff alleges the Company breached her universal life contract when it sent her a letter advising that her universal life policy was being underfunded and she needed to pay additional premiums in order to maintain the current level of death benefit. In addition, plaintiff alleged a putative class action in which she seeks to represent herself and others similarly situated nationwide. Sunset's initial motion to dismiss was overruled by the trial court. Subsequently, plaintiff surrendered her policy and plaintiff's attorneys dismissed her as a plaintiff and filed an amended complaint substituting plaintiff's husband, beneficiary of the policy, as plaintiff. Sunset has filed a motion to strike or dismiss the plaintiff's amended complaint. Plaintiff has not filed a motion seeking class certification, nor has there been a class certification hearing and none is scheduled at this time. The policy in issue was not sold in the State of Alabama, nor has Sunset applied for authority to conduct business in Alabama. Sunset denies that the Alabama court has jurisdiction over this matter, and further denies the allegations in the complaint including the existence of a certifiable class and intends to defend this case vigorously.
In addition to the above, the Company and certain of its subsidiaries are defendants in litigation seeking punitive damages. Some of these lawsuits are in jurisdictions where juries sometime award punitive damages grossly dispro- portionate to the actual damages.
Although no assurances can be given and no determinations can be made at this time as to the outcome of any particular lawsuit or proceeding, management believes that the relief ultimately granted to plaintiffs in these lawsuits, if any, would have no material effect on the Company's business, results of opera- tions and financial position.
Item 4.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the stockholders of the Company during the fourth quarter of the fiscal year ended December 31, 1999.
PART II
Item 5.
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Incorporated by Reference.
Item 6.
Item 6. SELECTED FINANCIAL DATA
Incorporated by Reference.
Item 7.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Incorporated by Reference.
Item 7A.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Incorporated by Reference.
Item 8.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by Reference.
Item 9.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
PART III
Item 10.
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following information, as of December 31, 1999, is provided with respect to each Director:
Term as Director Served as Expires Other Positions Director Name of Director Age in April with the Company From
J. R. Bixby (1)(2)(3) 74 2000 Chairman of the Board 1957
R. Philip Bixby 46 2000 President, CEO and Vice 1985 (1)(2)(3) Chairman of the Board
Richard L. Finn 58 2000 Senior Vice President, 1983 (1)(2)(3) Finance
Warren J. Hunzicker, M.D. 79 2000 None 1989 (3)(6)
Larry Winn, Jr. 80 2000 None 1985 (2)(3)(4)(5)(6)
Jack D. Hayes (1) 59 2001 Senior Vice President, 1995 Marketing
Michael J. Ross 58 2001 None 1972 (2)(4)(5)(6)
Elizabeth T. Solberg 60 2001 None 1997 (6)
W. E. Bixby, III (6) 41 2002 None 1996
Term as Director Served as Expires Other Positions Director Name of Director Age in April with the Company From
Webb R. Gilmore 55 2002 None 1990 (2)(4)(5)(6)
Nancy Bixby Hudson (6) 47 2002 None 1996
Daryl D. Jensen (6) 60 2002 None 1978
C. John Malacarne 58 2002 Vice President, 1991 (1)(2) General Counsel and Secretary
W. E. Bixby served as a Director from 1966 until his death on September 27, 1999. Francis P. Lemery served as a Director from 1985 until he retired on November 30, 1999.
(1) See below with respect to the business experience of executive officers of the Company.
(2) Member of Executive Committee.
(3) Subject to the approval of the shareholders at the annual meeting of share-holders to be held on April 20, 2000, will be elected for a three year term ending in 2003.
(4) Member of Audit Committee.
(5) Member of Compensation Committee.
(6) W. E. Bixby, III was elected Assistant Vice President of the Company in 1985, Vice President, Marketing in 1990, Vice President, Marketing Operations in 1992, and President of Old American, a subsidiary, in 1996. He also serves as a Director of Sunset Life and Old American, subsidiaries. Mr. Gilmore is Chairman, CEO and Shareholder of the law firm of Gilmore & Bell. Nancy Bixby Hudson has served as a Director of Sunset Life, a sub- sidiary, since 1986. Dr. Hunzicker was elected by the Board of Directors to an unexpired term in 1989. Dr. Hunzicker served as the Company's Medical Director from 1987 to 1989; he formerly served as a member of the Company's Board of Directors from 1977 to 1980. Mr. Jensen served as President of Sunset Life Insurance Company of America, a subsidiary of Registrant, from 1973 until his retirement in 1999. Mr. Ross has been Chairman of the Board of Jefferson Bank and Trust Company, St. Louis, Missouri, since 1983. Mrs. Solberg became a Regional President and Senior Partner of Fleishman-Hillard, Inc., in January, 1998. She had been Executive Vice President since 1984. Mr. Winn is retired as the Kansas Third District Representative to the U.S. Congress.
Name, Age and Business Experience Position During Past 5 Years
J. R. Bixby, 74 Chairman since 1972; President from 1964 until he Chairman of the Board retired in April, 1990. Responsible for overall corporate policy. Chairman of the Board of Sunset Life and Old American, subsidiaries.
W. E. Bixby, 66 Vice Chairman of the Board since 1974; elected Executive Vice President in January, 1987; President and CEO from 1990 until he retired in April, 1998. Chairman of the Board of Sunset Life and Old American, subsidiaries, until his death on September 27, 1999.
Name, Age and Business Experience Position During Past 5 Years
R. Philip Bixby, 46 Elected Assistant Secretary in 1979; Assistant Vice President, CEO and Vice President in 1982; Vice President in 1984; Senior Chairman of the Board Vice President, Operations in 1990; Executive Vice President in 1996; President and CEO in April, 1998; and Vice Chairman of the Board in January, 2000. Director and President of Sunset Life and Director of Old American, subsidiaries.
Richard L. Finn, 58 Elected Vice President in 1976; Financial Vice Presi- Senior Vice President, dent in 1983; and to present position in 1984. Chief Finance financial officer and responsible for investment of the Company's funds, accounting and taxes. Director and Treasurer of Sunset Life and Director, Vice President and Chief Financial Officer and Assistant Treasurer of Old American, subsidiaries.
Jack D. Hayes, 59 Elected Senior Vice President, Marketing in February, Senior Vice President, 1994. Responsible for Marketing, Marketing Adminis- Marketing tration, Communications and Public Relations. Served as Executive Vice President and Chief Marketing Officer of Fidelity Union Life, Dallas, Texas, from June, 1981 to January, 1994.
Francis P. Lemery, 60 Elected Vice President in 1979; Vice President and Senior Vice President Actuary in 1980; and to present position in 1984. and Actuary Responsible for Group Insurance Department, Actuarial Services, State Compliance, New Business and Under- writing. Director of Sunset Life and Old American, subsidiaries. Retired November 30, 1999.
Mark A. Milton, 41 Elected Assistant Actuary in 1984; Assistant Vice Vice President President/Associate Actuary in 1987; Vice President/ and Actuary Associate Actuary in 1989; and to present position in January, 2000. Responsible for Actuarial Services and State Compliance. Director, Vice President and Actuary of Sunset Life, a subsidiary.
Michael P. Horton, 57 Elected Director, Group Life/Sales in 1977; Assistant Vice President, Group Vice President, Group in 1981; and to present position in 1984. Responsible for group sales and products.
Robert C. Miller, 53 Elected Assistant Auditor in 1972; Auditor in 1973; Senior Vice President, Vice President and Auditor in 1987; and to present Administrative Services position in 1991. Responsible for Human Resources and Home Office building and maintenance.
Charles R. Duffy, Jr., 52 Elected Vice President, Computer Information Services Senior Vice President, in 1989; Vice President, Insurance Administration in Operations 1992; and to present position in 1996. Responsible for the Company's Computer Operations, Customer Services, Claims, Premium Collection, Agency Adminis- tration, New Business and Underwriting. Director of Sunset Life and Old American, subsidiaries.
John K. Koetting, 54 Elected Assistant Controller in 1975; and to present Vice President and position in 1980. Chief accounting officer Controller responsible for all corporate accounting reports. Director of Old American, a subsidiary.
Name, Age and Business Experience Position During Past 5 Years
C. John Malacarne, 58 Elected Associate General Counsel in 1976; General Vice President, General Counsel in 1980; Vice President and General Counsel Counsel and Secretary in 1981; and to present position in 1991. Responsible for Legal Department, Office of the Secretary, Stock Transfer Department and Market Compliance. Director and Secretary of Sunset Life and Old American, subsidiaries.
(d) J. R. Bixby, Chairman of the Board, and W. E. Bixby, Vice Chairman of the Board, were brothers. Nancy Bixby Hudson is the daughter of J. R. Bixby; R. Philip Bixby and W. E. Bixby, III are the sons of W. E. Bixby.
(e) See Business Experience During Past 5 Years above.
(f) There have been no events under any bankruptcy act, no criminal pro-ceedings and no judgments or injunctions material to the evaluation of the ability and integrity of any Director, nominee or executive officer during the past five years.
Item 11.
Item 11. EXECUTIVE COMPENSATION
(a) Compensation
The following table sets forth information concerning cash compensation paid or accrued by the Company and its subsidiaries to the Chief Executive Officer and the other four most highly paid executive officers as of December 31, 1999 for the fiscal years ending December 31, 1999, 1998 and 1997.
SUMMARY COMPENSATION TABLE
Long Term Other All Annual Compensation Incentive Annual Other Compensa- Compen- Compen- Name and Salary Bonus tion Payouts sation sation Principal Position Year $ $ $ $ $ R. P. Bixby, Presi- 1999 405,180 41,931 0 7,000 26,853 dent, CEO and Vice 1998 348,692 77,971 0 7,000 22,857 Chairman of the Board, 1997 284,700 400 132,660 4,750 29,820 Kansas City Life; Director of Sunset Life and Old American, subsidiaries.
R. L. Finn, Senior 1999 231,720 22,680 0 7,000 17,650 Vice President, 1998 221,712 33,748 0 7,000 17,842 Finance and Director, 1997 212,160 400 151,560 7,000 25,540 Kansas City Life; Director of Sunset Life and Old American, subsidiaries. _______________________________________________________
F. P. Lemery, Senior 1999 212,410 12,258 0 7,000 18,206 Vice President and 1998 221,712 33,748 0 7,000 17,842 Actuary and Director, 1997 212,160 400 151,560 7,000 25,540 Kansas City Life; Director of Sunset Life and Old American, subsidiaries. Retired November 30, 1999. Long Term Other All Annual Compensation Incentive Annual Other Compensa- Compen- Compen- Name and Salary Bonus tion Payouts sation sation Principal Position Year $ $ $ $ $
J. D. Hayes, Senior 1999 201,300 39,973 0 4,000 15,275 Vice President, Mar- 1998 192,624 71,211 0 4,000 15,621 keting, and Director, 1997 184,320 400 132,930 4,000 22,309 Kansas City Life.
D. D. Jensen, Direc- 1999 193,418 35,088 0 6,000 16,533 tor, Kansas City Life; 1998 201,900 400 0 6,000 16,207 Vice Chairman of the 1997 193,200 18,097 138,000 6,000 23,217 Board, President and Manager of Western Operations, Sunset Life a subsidiary. Retired as an officer of Sunset Life November 30, 1999. _______________________________________________________
C. R. Duffy, Jr., 1999 188,760 18,349 0 3,000 12,483 Senior Vice President, 1998 175,572 31,400 0 0 12,699 Operations, Kansas City 1997 163,320 160 0 0 11,956 Life; Director of Sunset Life and Old American, subsidiaries. _______________________________________________________
C. J. Malacarne, Vice 1999 193,980 20,403 0 7,000 14,718 President, General 1998 185,592 23,244 0 7,000 14,861 Counsel and Secretary 1997 177,600 400 126,855 7,000 21,306 and Director, Kansas City Life; Director and Secretary of Sunset Life and Old American, subsidiaries. _______________________________________________________
ALL OTHER COMPENSATION INCLUDES THE FOLLOWING:
The Company has a contributory Internal Revenue Code Section 401(k) savings and profit sharing plan. Directors and officers who are full time employees of the Registrant or its subsidiaries participate in the plan on the same basis as all other employees. Employees may contribute from 1% to 15% of their monthly base salary. Highly compensated employees are limited to contributions of 6%. The Company contributes an amount equal to 50%, 75% or 100% of the employee contributions based on a schedule of years of employment to a maximum of 6% of an employee's compensation in the form of capital stock of the Company. The amount contributed to the plan in 1999 for the accounts of the named individuals are as follows: R. P. Bixby, $9,210; R. L. Finn, $9,219; F. P. Lemery, $9,219; J. D. Hayes, $9,193; D. D. Jensen, $9,198; C. R. Duffy, Jr.,$9,199; C. J. Malacarne, $9,199.
The Company has adopted a nonqualified deferred compensation plan for approximately 43 highly compensated officers and employees. It is similar to the Company's 401(k) plan. Participants contribute amounts to this plan that they cannot contribute to the 401(k) plan up to a total of 15% of their monthly salary and the Company contributes up to a maximum of 6% of their monthly salary. The amount contributed to the plan in 1999 for the accounts of the named indi-viduals are as follows: R. P. Bixby, $15,101; R. L. Finn, $4,684; F. P. Lemery, $3,525; J. D. Hayes, $2,885; D. D. Jensen, $2,407; C. R. Duffy, Jr., $2,126; C. J. Malacarne, $2,440.
The Company provides yearly renewable term insurance to its employees in the amount of 2 1/2 times their annual salary. Directors and officers who are full time employees participate in the program on the same basis as all other employees. Premiums paid for the named individuals for 1999 are as follows: R. P. Bixby, $2,542; R. L. Finn, $3,747; F. P. Lemery, $5,462; J. D. Hayes, $3,197; D. D. Jensen, $4,928; C. R. Duffy, Jr., $1,158; C. J. Malacarne, $3,079.
(f) Defined Benefit or Actuarial Plan Disclosure
The Company has a noncontributory defined benefit pension plan which covers employees age 21 and over. Effective January 1, 1998, the pension plan was con-verted to a cash balance plan. Benefits under the plan will no longer be determined primarily by final average compensation and years of service. Each participant's benefit accrued under the prior plan formula as of December 31, 1997 was converted to an opening account balance in the cash balance plan.
Beginning in 1998, participants accumulate annual pay credits equal to a percentage of annual compensation, ranging from 3% to 16% based on service of the participant. The cash balance account is further credited with interest annually which is based on the 30-year treasury bond rate in effect for November of the prior plan year. Upon termination of employment, the account balance as of such date may be distributed to the participant in lump sum or annuity form, at the election of the participant. Benefits vest according to years of service after age 18 on a graded scale, beginning with 30% vesting with 3 years, and becoming 100% vested with 7 years. Compensation for determining benefits under the plan is equal to base salary, excluding overtime and bonuses.
Participants age 55 with 15 years of service as of December 31, 1997 will receive the greater of the benefit under the cash balance plan, or the prior plan formula based on final average compensation and years of service. The following table illustrates the possible annual pension benefits under the prior plan formula based upon final average compensation and years of service, for these employees. Participants may elect a lump sum distribution.
PENSION PLAN TABLE
Compensation Years of Service SS**
10 20 30 40
$ 75,000 $ 18,750 $ 37,500 $ 51,743* $ 51,753* $16,495 100,000 25,000 50,000 70,000 71,753* 16,495 125,000 31,250 62,500 87,500 91,753* 16,495 150,000 37,500 75,000 105,000 111,753* 16,495 200,000 50,000 100,000 140,000 151,753* 16,495 250,000 62,500 125,000 175,000 191,753* 16,495 300,000 75,000 150,000 210,000 231,753* 16,495 350,000 87,500 175,000 245,000 271,753* 16,495 400,000 100,000 200,000 280,000 311,753* 16,495 450,000 112,500 225,000 315,000 351,753* 16,495 500,000 125,000 250,000 350,000 391,753* 16,495
*Maximum pension based on an estimate of Social Security. **Estimated annual Social Security benefit at age 65.
A participant's base salary not to exceed $150,000 (as adjusted for cost of living) commencing January 1, 1994, was used to determine compensation under the plan for benefits from the qualified plan. For the individuals named in the Cash Compensation Table, the years of service covered by the plan for the year ended December 31, 1999, were: R. P. Bixby, 22 years; R. L. Finn, 26 years; J. D. Hayes, 6 years; C. R. Duffy, Jr., 10 years; C. J. Malacarne, 33 years.
The estimated annual annuity benefit payable starting at normal retirement age (age 65) as accrued through December 31, 1999 under the cash balance plan for each of the named individuals are as follows: R. P. Bixby, $170,058; R. L. Finn, $131,209; J. D. Hayes, $20,609; C. R. Duffy, Jr., $30,196; C. J. Malacarne, $128,788. At their retirement on November 30, 1999, F. P. Lemery and D. D. Jensen elected a lump sum distribution and are not entitled to any other benefits under the plan.
The Company has adopted an unfunded excess benefit plan which covers any employee who is an active participant in the noncontributory defined benefit pension plan and whose pension benefit under that plan would exceed the maximum benefit limited under Internal Revenue Code Section 415. A participant under this plan is entitled to a monthly benefit of the difference between the maxi- mum monthly normal, early, or deferred vested retirement benefit determined without regard to the Internal Revenue Code Section 415 limitation and the monthly equivalent of the maximum benefit permitted by Internal Revenue Code Section 415. Participants may elect a lump sum distribution.
(g) Compensation of Directors
Outside Directors are paid $4,000 quarterly; $2,000 if they attend Special Board Meetings; $1,000 if they attend Executive Committee Meetings; $500 if they attend all other Committee Meetings. Inside Directors are paid $1,000 quarterly and $400 if they attend Special Board Meetings. J. R. Bixby, Chairman of the Board, is paid $30,000 quarterly. Outside Directors of Sunset Life, a subsidiary, are paid $1,000 quarterly, inside Directors are paid $500 quarterly. Directors of Old American are paid $250 quarterly. Director fees are included in the Compensation Table.
(h) Employment Contracts and Termination of Employment and Change in Control Arrangements
There are no employment contracts between the Company and its executive officers. The Company's benefit plans contain typical provisions applicable to all employees for termination of employment.
(j) Additional Information with Respect to Compensation Committee
The members of the Compensation Committee: Webb R. Gilmore, Michael J. Ross and Larry Winn, Jr.
Item 12.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners
The following table sets forth information as of February 29, 2000, con-cerning certain beneficial owners of voting securities of the Company's $1.25 par value capital stock ("Common Stock"). The Common Stock is the Company's only class of voting securities. As described in the notes to the table set forth below, certain named persons share the power of voting and disposition with respect to certain shares of Common Stock. Consequently, such shares are shown as being beneficially owned by more than one person.
Name and Address Percent of Class
John K. Koetting, Robert C. Miller and Anne C. Moberg, Trustees of the Kansas City Life Insurance Company Savings and Profit Sharing Plan and the Kansas City Life Employee Stock Plan 3520 Broadway Kansas City, MO 64111-2565
Amount and Nature of Ownership(1)
817,591 Shares 6.8
WEB Interests, Ltd. 3520 Broadway Kansas City, MO 64111-2565
Amount and Nature of Ownership(2)
2,358,340 Shares 19.6
Angeline I. O'Connor 12501 Granada Lane Leawood, KS 66209
Amount and Nature of Ownership(2)(3)
3,068,028 Shares 25.5
JRB Interests, Ltd. 3520 Broadway Kansas City, MO 64111-2565
Amount and Nature of Ownership(4)
2,966,312 Shares 24.7
Margie Morris Bixby 3530 Pennsylvania Kansas City, MO 64111
Amount and Nature of Ownership(4)(5)
2,968,112 Shares 24.7
Lee M. Vogel 4701 NW 59th Court Kansas City, MO 64151
Amount and Nature of Ownership(4)(6)
2,973,410 Shares 24.7
(1) Trustees have the power to sell plan assets. Participants may instruct the Trustees how to vote their shares.
(2) The WEB Interests, Ltd., a Texas limited partnership (the "WEB Partnership") shares with its general partners and co-managing partners the power to dis-pose of these shares. The general partners of the WEB Partnership are R. Philip Bixby, W. E. Bixby, III, Angeline I. O'Connor ("Ms. O'Connor") and the co-trustees of the Walter E. Bixby, Jr. Revocable Trust ("WEB Trust"). R. Philip Bixby, W. E. Bixby, III and Ms. O'Connor are the co-managing partners of the WEB Partnership and the co-trustees of the WEB Trust. Each partner of the WEB Partnership has the power to vote that number of shares of Common Stock owned by the WEB Partnership which are equal to such partner's proportionate interest in the WEB Partnership.
(3) Includes 2,358,340 shares for which Ms. O'Connor shares the power of disposition, as a co-managing partner and a general partner of the WEB Partnership. Of these shares, Ms. O'Connor: (i) as a co-trustee of the WEB Trust, shares the power to vote 2,151,562 shares; (ii) as the sole trustee of the Angeline I. O'Connor GST Trust and the Issue Trust for Angeline I. O'Connor, which trusts are limited partners of the WEB Partnership, has the power to vote 61,362 shares; and (iii) as a general partner of the WEB Partnership, has the sole power to vote 217 shares. Also includes: (i) 356,000 shares for which Ms. O'Connor, as a co-trustee with R. Philip Bixby and W. E. Bixby, III of the Walter E. Bixby Descendants Trust, shares the power to vote and the power of disposition; and (ii) 353,688 shares which Ms. O'Connor owns directly and has the sole power to vote and the sole power of disposition.
(4) The JRB Interests, Ltd., a Texas limited partnership (the "JRB Partnership"), shares with its general partners and its managing partner, J. R. Bixby, the power to dispose,or direct the disposition of these shares. The general partners of the JRB Partnership are the trustees of the Joseph R. Bixby Revocable Trust (the "JRB Trust"), the trustee of the Margie Morris Bixby Revocable Trust (the "MMB Trust"), Nancy Bixby Hudson and Lee M. Vogel ("Mr. Vogel"). Each partner of the JRB Partnership has the power to vote that number of shares of Common Stock owned by the JRB Partnership which are equal to such partner's proportionate interest in the JRB Partnership.
(5) Includes 2,966,312 shares for which Margie Morris Bixby ("MM Bixby"), as trustee of the MMB Trust, a general partner and limited partner of the JRB Partnership, shares the power of disposition. Of these shares, MM Bixby: (i) as sole trustee of MMB Trust, a general partner and a limited partner of the JRB Partnership,has the sole power to vote 27,474 shares; and (ii) as a limited partner of the JRB Partnership, has sole power to vote 322 shares. Also includes 1,800 shares for which MM Bixby, as a joint tenant with right of survivorship with Mr. Vogel, shares the power to vote and the power of disposition.
(6) Includes 2,966,312 shares for which Lee M. Vogel, as a general partner of the JRB Partnership, shares the power of disposition. Of these shares, Mr. Vogel: (i) as a general partner of the JRB Partnership, has the sole power to vote 272 shares; and (ii) as a co-trustee with Richard L. Finn and C. John Malacarne of the Issue Trust for Lee M. Vogel, a limited partner of the JRB Partnership, shares the power to vote 89,877 shares. Also includes: (i) 1,800 shares for which Mr. Vogel, as a joint tenant with right of survivorship with MM Bixby, shares the power to vote and the power of disposition; and (ii) 5,298 shares which Mr. Vogel owns directly and has the sole power to vote and the sole power of disposition.
(b) Security Ownership of Management
As described in the notes to the table set forth below, certain named persons share the power of voting and disposition with respect to certain shares of Common Stock. Consequently, such shares are shown as being beneficially owned by more than one person.
The following persons are currently Directors whose terms expire on April 20, 2000. They are also nominees of management for election to three year terms at the annual meeting to be held April 20, 2000:
Served Shares of as a Record and Name and Principal Director Beneficially Percent Address Occupation Since Owned of Class
J. R. Bixby Chairman of the 1957 2,966,312(1) 24.7 3520 Broadway Board Kansas City, MO
R. Philip Bixby President, CEO 1985 2,358,340(2)(3) 25.7 3520 Broadway and Vice Chairman 14,387(4) Kansas City, MO of the Board 356,000(5) 363,782(6)
Richard L. Finn Senior Vice Presi- 1983 24 2.0 3520 Broadway dent, Finance 14,388(4) Kansas City, MO 245,454(7)
Warren J. Hunzicker, M.D. Director 1989 300 * 1248 Stratford Rd. Kansas City, MO
Larry Winn, Jr. Retired Represent- 1985 332 * 8420 Roe Ave. ative, U.S. Congress Prairie Village, KS
The following Directors were elected April 23, 1998 for a three year term:
Jack D. Hayes Senior Vice Presi- 1995 500 * 3520 Broadway dent, Marketing 1,602(4) Kansas City, MO
Michael J. Ross Chairman of the 1972 600 * 12826 Dubon Lane Board, Jefferson St. Louis, MO Bank and Trust Company, St. Louis, MO
Elizabeth T. Solberg Regional President 1997 200 * 850 W. 52nd St. and Senior Partner, Kansas City, MO Fleishman-Hillard, Inc., St. Louis, MO
W. E. Bixby, former Vice Chairman of the Board, served as a Director until his death on September 27, 1999. Francis P. Lemery, former Senior Vice President and Actuary, served as a Director until his retirement November 30, 1999. The Board of Directors have not yet elected replacement Directors to serve the balance of Mr. Bixby's or Mr. Lemery's unexpired terms.
The following Directors were elected April 22, 1999 for a three year term:
W. E. Bixby, III President, Old 1996 2,358,340(2)(8) 25.6 3520 Broadway American Insur- 364,096(9) Kansas City, MO ance Company, 5,496(4) Kansas City, MO 356,000(5)
Webb R. Gilmore Chairman, CEO 1990 1,000 * 833 Westover Rd. and Shareholder, Kansas City, MO Gilmore & Bell, Kansas City, MO
Nancy Bixby Hudson Investor 1996 2,966,312(10) 27.4 425 Baldwin Creek Rd. 331,566(11) Lander, WY
Served Shares of as a Record and Name and Principal Director Beneficially Percent Address Occupation Since Owned of Class
Daryl D. Jensen Vice Chairman of 1978 939 * 2143 Old Port Dr. the Board, Sunset Olympia, WA Life Insurance Company of America, Kansas City, MO
C. John Malacarne Vice President, 1991 20 2.0 3520 Broadway General Counsel 13,172(4) Kansas City, MO and Secretary 245,454(7)
All Directors, executive officers and their spouses (also includes all shares held by trustees of Company benefit plans and shares held by the Bixby Family and related Trusts) 8,318,348 69.2
*Less than 1%.
(1) J. R. Bixby, as sole managing partner of the JRB Partnership, shares the power of disposition of these shares with the JRB Partnership and the general partners of the JRB Partnership. He has the sole power to vote (i) 2,692,194 of these shares, as sole trustee of the JRB Revocable Trust, a general partner and a limited partner of the JRB Partnership, and (ii) 322 of these shares, as a limited partner of the JRB Partnership.
(2) As co-managing partners and general partners of the WEB Partnership, W. E. Bixby, III and R. Philip Bixby, along with Ms. O'Connor and the WEB Part- nership, share the power to dispose of these shares. As co-trustees of the WEB Trust, W. E. Bixby, III and R. Philip Bixby, along with Ms. O'Connor, share the power to vote 2,151,562 of these shares.
(3) Includes (i) 518 shares for which R. Philip Bixby, as a general partner and a limited partner of the WEB Partnership, has the sole power to vote; and (ii) 61,362 shares for which R. Philip Bixby, as sole trustee of the R. Philip Bixby GST Trust and the Issue Trust for R. Philip Bixby, which trusts are limited partners of the WEB Partnership, has the sole power to vote.
(4) Approximate beneficial interest in shares held by the trustees of Kansas City Life Insurance Company employee benefit plans. Participants have the power to vote the shares held in their account.
(5) These shares are held in the Walter E. Bixby Descendants Trust. R. Philip Bixby, W. E. Bixby, III and Angeline I. O'Connor are the co-trustees of this trust and share the power to vote and the power to dispose of these shares. The terms of the trust restrict transferring shares.
(6) Includes (i) 346,234 shares which R. Philip Bixby owns directly and has the sole power to vote and the sole power of disposition; and (ii) 17,548 shares for which R. Philip Bixby, as custodian for certain of his minor nieces and nephews, has the sole power to vote and the sole power of disposition.
(7) Richard L. Finn and C. John Malacarne share the power to vote: (i) 155,577 shares with Ms. Hudson, as co-trustees of the Nancy Bixby Hudson GST Trust and the Issue Trust for Nancy Bixby Hudson, which trusts are limited partners of the JRB Partnership; and (ii) 89,877 shares with Mr. Vogel, as co-trustees of the Issue Trust for Lee M. Vogel, a limited partner of the JRB Partnership.
(8) Includes (i) 217 shares for which W. E. Bixby, III, as a general partner of the WEB Partnership, has the sole power to vote; and (ii) 61,362 shares for which W. E. Bixby, III, as the sole trustee of the Walter E. Bixby, III GST Trust and the Issue Trust for Walter E. Bixby, III, which trusts are limited partners of the WEB Partnership, has the sole power to vote.
(9) Includes (i) 351,420 shares which W. E. Bixby, III owns directly and has the sole power to vote and the sole power of disposition; and (ii) 12,676 shares for which W. E. Bixby, III, as custodian for certain of his minor nieces and nephews, has the sole power to vote and the sole power of disposition.
(10) Ms. Hudson, as a general partner of the JRB Partnership, shares the power of disposition of these shares with the JRB Partnership, the managing partner and other general partners of the JRB Partnership. Ms. Hudson, as a general partner of the JRB Partnership, also has sole power to vote 272 of these shares and shares the power to vote 155,577 of these shares with Richard L. Finn and C. John Malacarne as co-trustees of the Nancy Bixby Hudson GST Trust and the Issue Trust for Nancy Bixby Hudson, which trusts are limited partners of the JRB Partnership.
(11) Ms. Hudson, as sole trustee of the Nancy Bixby Hudson Trust dated December 11, 1997, has the sole power to vote and the sole power to dispose of these shares.
Item 13.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
Item 14.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) Financial Statements
The following financial statements of Kansas City Life Insurance Company are incorporated by reference from the Company's Annual Report to Shareholders for the year ended December 31, 1999 at the following pages:
Page
Consolidated Income Statement - Years ended December 31, 1999, 1998 and 1997 . . . . . . . . . . . . . . . 28 Consolidated Balance Sheet - December 31, 1999 and 1998 . . . . . . . . . . . . . . . . . . 29 Consolidated Statement of Stockholders' Equity - Years ended December 31, 1999, 1998 and 1997 . . . . . . . . . 30 Consolidated Statement of Cash Flows - Years ended December 31, 1999, 1998 and 1997 . . . . . . . . . 31 Notes to Consolidated Financial Statements . . . . . . . . . . . 32-42 Report of Independent Auditors . . . . . . . . . . . . . . . . . 43
(a)(2) Supplementary Data and Financial Statement Schedules
Schedules are attached hereto at the following pages:
Page
I - Summary of Investments - Other than Investments in Related Parties, December 31, 1999 . . . . . . . . . 21 II - Condensed Financial Information of Registrant, Years ended December 31, 1999, 1998 and 1997 . . . . . . 22-24 III - Supplementary Insurance Information, Years ended December 31, 1999, 1998 and 1997 . . . . . . . . . . . . 25 IV - Reinsurance Information, Years ended December 31, 1999, 1998 and 1997 . . . . . . . . . . . . 26 V - Valuation and Qualifying Accounts, Years ended December 31, 1999, 1998 and 1997 . . . . . . . . . . . . 27
All other schedules are omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.
(b) Reports on Form 8-K
None.
(c) Exhibits
Exhibit Number: Basic Documents:
3(a) Articles of Incorporation (as Restated in 1986 and Amended in 1999). [Filed as Exhibit 3(a) to the Company's 10-Q Report for the quarter ended September 30, 1999 and incor- porated herein by reference]
3(b) Bylaws as Amended October 26, 1986. [Filed as Exhibit 3(b) to the Company's 10-K Report for 1986 and incorporated herein by reference]
4(a) Specimen copy of Stock Certificate. [Filed as Exhibit 4(a) to the Company's 10-Q Report for the quarter ended September 30, 1999 and incorporated herein by reference]
10(a)Seventh Amendment, Kansas City Life Deferred Compensation Plan. [Filed as Exhibit 10(a) to the Company's 10-K Report for 1998 and incorporated herein by reference]
10(b)Twenty-third Amendment, Kansas City Life Insurance Company Savings and Profit Sharing Plan.
10(c)Eleventh Amendment, Kansas City Life Employee Stock Plan.
10(d)Second Amendment, Kansas City Life Excess Benefit Plan.
13 Annual Report to Shareholders for the year ended December 31, 1999.
21 Subsidiaries.
23(a)Consent of Independent Auditors.
23(b)Consent of Independent Auditors.
27 Financial Data Schedule.
99(a)Form 11-K for the Kansas City Life Insurance Company Savings and Profit Sharing Plan for the year 1999 and filed as a part hereof and incorporated herein by reference.
99(b)Prospectus for Kansas City Life Insurance Company Savings and Investment Plan. [Filed as Exhibit 99(b) to the Company's 10-K Report for 1995 and incorporated herein by reference]
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
KANSAS CITY LIFE INSURANCE COMPANY
By: /s/ John K. Koetting John K. Koetting Vice President and Controller (Principal Accounting Officer) Date: March 28, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Regis- trant and in the capacities and on the dates indicated.
By: /s/ R. Philip Bixby By: /s/ Richard L. Finn R. Philip Bixby Richard L. Finn Director; President, Chief Director; Senior Vice Executive Officer and Vice President, Finance Chairman of the Board (Principal Financial Officer) (Principal Executive Officer) Date: March 28, 2000 Date: March 28, 2000
By: /s/ J. R. Bixby By: /s/ C. John Malacarne J. R. Bixby C. John Malacarne Director; Chairman of Director; Vice President, the Board General Counsel and Secretary Date: March 28, 2000 Date: March 28, 2000
By: /s/ W. E. Bixby, III By: /s/ Daryl D. Jensen W. E. Bixby, III Daryl D. Jensen Director Director Date: March 28, 2000 Date: March 28, 2000
By: /s/ Jack D. Hayes By: /s/ Warren J. Hunzicker, M.D. Jack D. Hayes Warren J. Hunzicker, M.D. Director; Senior Vice Director President, Marketing Date: March 28, 2000 Date: March 28, 2000
Schedule I
KANSAS CITY LIFE INSURANCE COMPANY SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES December 31, 1999
Amount at Which Shown Fair in Balance Type of Investment Cost Value Sheet
(in thousands)
Fixed maturity securities, available for sale: Bonds: United States government and government agencies and authorities $ 47,264 46,827 46,827 Mortgage-backed securities 299,933 301,975 301,975 States, municipalities and political subdivisions 24,482 24,047 24,047 Public utilities 270,618 261,458 261,458 All other bonds 1,436,296 1,364,043 1,364,043 Redeemable preferred stocks 865 865 865 Total 2,079,458 1,999,215 1,999,215
Equity securities, available for sale: Common stocks 47,580 47,441 47,441 Perpetual preferred stocks 74,791 68,527 68,527 Total 122,371 115,968 115,968
Fixed maturity securities, held to maturity: Bonds: United States government and government agencies and authorities 4,528 4,585 4,528 States, municipalities and political subdivisions 1,548 1,602 1,548 Public utilities 18,101 18,799 18,101 All other bonds 83,429 82,584 83,429 Total 107,606 107,570 107,606
Mortgage loans on real estate, net 340,704 340,704 Real estate, net 42,011 42,011 Real estate joint ventures 37,336 37,336 Policy loans 118,521 118,521 Short-term 19,380 19,380 Total investments $2,867,387 2,780,741
Schedule II
KANSAS CITY LIFE INSURANCE COMPANY CONDENSED FINANCIAL INFORMATION OF REGISTRANT BALANCE SHEET
December 31
1999 1998
(in thousands)
Assets Investments: Fixed maturity securities: Available for sale, at fair value $1,516,472 1,614,849 Held to maturity, at amortized cost 64,608 68,354 Equity securities available for sale, at fair value: Investments in affiliates 227,007 237,340 Other 89,376 72,314 Mortgage loans on real estate, net 262,380 254,987 Real estate, net 41,390 43,227 Real estate joint ventures 29,169 30,758 Policy loans 97,386 101,620 Short-term 12,956 36,235 Total investments 2,340,744 2,459,684
Deferred acquisition costs 116,696 102,850 Value of purchased insurance in force 63,429 68,557 Cash 18,537 10,138 Deferred income tax asset 14,717 - Other 108,889 95,658 Separate account assets 259,899 143,008
Total assets $2,922,911 2,879,895
Liabilities and stockholders' equity Future policy benefits $ 541,126 539,767 Accumulated contract values 1,355,404 1,397,507 Other 272,677 221,680 Separate account liabilities 259,899 143,008 Total liabilities 2,429,106 2,301,962
Stockholders' equity: Common stock 23,121 23,121 Paid in capital 18,498 17,633 Accumulated other comprehensive income (loss) (59,095) 45,466 Retained earnings including $136,800,000 undis- tributed earnings of affiliates ($122,535,000 - 1998) 614,278 581,074 Less treasury stock, at cost (102,997) (89,361) Total stockholders' equity 493,805 577,933
Total liabilities and stockholders' equity $2,922,911 2,879,895
The above condensed financial statement should be read in conjunction with the consolidated financial statements and notes thereto of Kansas City Life Insurance Company.
Schedule II (continued)
KANSAS CITY LIFE INSURANCE COMPANY CONDENSED FINANCIAL INFORMATION OF REGISTRANT INCOME STATEMENT
Years ended December 31
1999 1998 1997
(in thousands)
Revenues Insurance revenues: Premiums: Life insurance $ 30,684 31,899 28,145 Accident and health 40,524 37,963 39,435 Contract charges 82,065 82,273 68,431 Investment revenues: Investment income, net 153,348 151,401 147,776 Dividends from affiliates 0 100 150 Realized investment gains, net 1,208 9,198 13,175 Other 9,690 10,359 5,786 Total revenues 317,519 323,193 302,898 Benefits and expenses Policy benefits: Death benefits 60,372 58,929 51,762 Surrenders of life insurance 10,177 14,589 11,280 Other benefits 65,838 64,404 62,997 Increase in benefit and contract reserves 60,753 58,118 56,126 Amortization of deferred policy acquisition costs 12,443 16,861 15,138 Insurance operating expenses 73,551 70,443 66,376 Management fees from affiliates (8,940) (5,923) (6,291) Total benefits and expenses 274,194 277,421 257,388
Income before federal income taxes and equity in undistributed net income of affiliates 43,325 45,772 45,510
Federal income taxes 12,545 12,538 12,602
Income before equity in undistributed net income of affiliates 30,780 33,234 32,908
Equity in undistributed net income of affiliates 14,265 15,278 11,953
Net income $ 45,045 48,512 44,861
The above condensed financial statement should be read in conjunction with the consolidated financial statements and notes thereto of Kansas City Life Insurance Company.
Schedule II (continued)
KANSAS CITY LIFE INSURANCE COMPANY CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENT OF CASH FLOWS
Years ended December 31
1999 1998 1997
(in thousands)
Net cash from operating activities $ 38,924 40,286 14,081
Investing activities Investments called, matured or repaid 145,574 218,805 215,239 Decrease (increase) in short-term investments, net 23,279 9,968 (35,291) Investments sold 382,401 364,541 492,920 Investments purchased or originated (576,854) (620,514) (840,802) Other 4,346 3,403 3,685 Acquisitions and dispositions of insur- ance blocks - net cash received (paid) (5,162) (13,250) 213,092 Net cash from (used in) investing activities (26,416) (37,047) 48,843
Financing activities Proceeds from borrowings 89,950 - 245,050 Repayment of borrowings (25,950) - (245,050) Policyowner contract deposits 105,018 126,743 119,639 Withdrawals of policyowner contract deposits (148,515) (154,172) (127,341) Cash dividends to stockholders (11,841) (11,153) (10,894) Other (12,771) 962 278
Net cash used in financing activities (4,109) (37,620) (18,318)
Increase (decrease) in cash 8,399 (34,381) 44,606 Cash at beginning of year 10,138 44,519 (87)
Cash at end of year $ 18,537 10,138 44,519
The above condensed financial statement should be read in conjunction with the consolidated financial statements and notes thereto of Kansas City Life Insurance Company.
Schedule III
KANSAS CITY LIFE INSURANCE COMPANY SUPPLEMENTARY INSURANCE INFORMATION
Future Policy Deferred Benefits, Contract Other Acquisition Values and Claim Unearned Policyholders' Costs Liabilities Premiums Funds (in thousands)
December 31, 1999: KCL - Individual $116,696 1,902,425 505 133,458 KCL - Group - 16,094 54 - Sunset 49,606 380,615 124 10,611 Old American 70,068 253,849 405 7,468 Total $236,370 2,552,983 1,088 151,537
December 31, 1998: KCL - Individual $102,850 1,939,018 330 120,781 KCL - Group - 19,070 55 - Sunset 47,240 380,134 17 10,966 Old American 68,867 249,729 413 5,197 Total $218,957 2,587,951 815 136,944
December 31, 1997: KCL - Individual $ 95,638 1,970,235 306 114,504 KCL - Group - 20,685 91 - Sunset 47,044 373,228 31 11,117 Old American 67,144 232,292 520 4,348 Total $209,826 2,596,440 948 129,969
Insurance Accident and Policy Operating Health Written Benefits Expenses@ Premiums (in thousands)
1999: @Allocations KCL - Individual $162,336 47,828 362 of Insurance KCL - Group 34,804 20,872 41,411 Operating Sunset 30,242 10,867 27 Expenses are Old American 53,790 18,351 2,085 based on a Total $281,172 97,918 43,885 number of assumptions 1998: and esti- KCL - Individual $161,236 47,517 385 mates, and KCL - Group 34,801 20,289 38,820 the results Sunset 29,255 10,290 28 would change Old American 58,048 17,372 4,354 if different Total $283,340 95,468 43,587 methods were applied. 1997: KCL - Individual $145,561 43,794 402 KCL - Group 36,603 19,065 40,065 Sunset 29,756 10,896 31 Old American 61,258 16,994 5,419 Total $273,178 90,749 45,917
All other information required by this Schedule is shown in the accompanying Segment Information Note to the Consolidated Financial Statements.
Schedule IV
KANSAS CITY LIFE INSURANCE COMPANY REINSURANCE INFORMATION
Life Insurance Premiums Accident and Health Premiums 1999 1998 1997 1999 1998 1997 (in thousands) Direct KCL - Individual $ 29,725 26,836 25,105 413 440 467 KCL - Group 11,567 12,537 12,974 50,113 46,736 46,710 Sunset 5,491 5,656 5,049 29 31 34 Old American 81,022 83,555 85,363 6,168 6,815 7,811 Total $127,805 128,584 128,491 56,723 54,022 55,022
Ceded KCL - Individual (13,811) (11,967) (11,528) (51) (55) (62) KCL - Group (2,333) (2,181) (2,229) (9,951) (9,158) (7,680) Sunset (5,879) (4,584) (3,642) (2) (3) (3) Old American (7,232) (8,016) (8,863) (4,083) (2,365) (2,346) Total (29,255) (26,748) (26,262) (14,087) (11,581) (10,091)
Assumed KCL - Individual 5,536 6,674 3,822 - - - KCL - Group - - - - - - Sunset - - - - - - Old American - - - - - - Total 5,536 6,674 3,822 - - - Net $104,086 108,510 106,051 42,636 42,441 44,931
% of Assumed to Net 5 6 4 - - -
Life Insurance in Force 1999 1998 1997 (in millions) Direct KCL - Individual $ 13,386 12,569 11,768 KCL - Group 3,351 3,823 4,278 Sunset 5,807 5,768 5,615 Old American 1,072 1,101 1,139 Total 23,616 23,261 22,800
Ceded KCL - Individual (3,726) (2,832) (2,111) KCL - Group (270) (256) (295) Sunset (1,371) (1,274) (830) Old American (116) (126) (139) Total (5,483) (4,488) (3,375)
Assumed KCL - Individual 3,131 3,380 3,796 KCL - Group - - - Sunset - - - Old American - - - Total 3,131 3,380 3,796 Net $ 21,264 22,153 23,221
% of Assumed to Net 15 15 16
All other information required by this Schedule is shown in the accompanying Reinsurance Note to the Consolidated Financial Statements.
Schedule V
KANSAS CITY LIFE INSURANCE COMPANY VALUATION AND QUALIFYING ACCOUNTS
Years ended December 31
1999 1998 1997
(in thousands)
Real estate valuation account Beginning of year $ 2,877 3,686 5,227 Deductions (1,358) (809) (1,541) End of year $ 1,519 2,877 3,686
Mortgage loan valuation account Beginning of year $ 8,500 8,500 8,500 Deductions (1,500) - - End of year $ 7,000 8,500 8,500
Allowance for uncollectible accounts Beginning of year $ 1,337 1,209 1,160 Additions 491 449 230 Deductions (273) (321) (181) End of year $ 1,555 1,337 1,209