SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 30, 2003
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UICI
(Exact name of registrant as specified in its charter)
Delaware 001-14953 75-2044750
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(State or other jurisdiction of incorporation (Commission File (IRS Employer
or organization) Number) Identification No.)
4001 McEwen Drive, Suite 200, Dallas, Texas 75244
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 392-6700
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Not Applicable
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(Former name or former address, if changed since last report)
ITEM 9. REGULATION FD DISCLOSURE
On April 30, 2003, the Company issued a press release announcing its
results for the quarter ended March 31, 2003. A copy of the press release is
filed herewith as Exhibit 99.1 and incorporated herein by reference.
The information under this caption is furnished by the Company under
Item 9 in place of Item 12 of Form 8-K in accordance with the interim guidance
provided by the Securities and Exchange Commission in Release No. 33-8216 issued
March 27, 2003. The information contained in this Item 9 or incorporated by
reference herein (whether or not furnished pursuant to Item 12) shall not be
deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or incorporated by reference in any
filing under the Securities Act of 1933, as amended, or the Exchange Act, except
as shall be expressly set forth by specific reference in such a filing.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995:
Certain statements set forth herein or incorporated by reference herein from
the Company's filings that are not historical facts are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act.
Actual results may differ materially from those included in the forward-looking
statements. These forward-looking statements involve risks and uncertainties
including, but not limited to, the following: changes in general economic
conditions, including the performance of financial markets, and interest rates;
competitive, regulatory or tax changes that affect the cost of or demand for the
Company's products; health care reform; the ability to predict and effectively
manage claims related to health care costs; and reliance on key management and
adequacy of claim liabilities.
The Company's future results will depend in large part on accurately
predicting health care costs incurred on existing business and upon the
Company's ability to control future health care costs through product and
benefit design, underwriting criteria, utilization management and negotiation of
favorable provider contracts. Changes in mandated benefits, utilization rates,
demographic characteristics, health care practices, provider consolidation,
inflation, new pharmaceuticals/technologies, clusters of high-cost cases, the
regulatory environment and numerous other factors are beyond the control of any
health plan provider and may adversely affect the Company's ability to predict
and control health care costs and claims, as well as the Company's financial
condition, results of operations or cash flows. Periodic renegotiations of
hospital and other provider contracts coupled with continued consolidation of
physician, hospital and other provider groups may result in increased health
care costs and limit the Company's ability to negotiate favorable rates. In
addition, the Company faces competitive and regulatory pressure to contain
premium prices. Fiscal concerns regarding the continued viability of
government-sponsored programs such as Medicare and Medicaid may cause decreasing
reimbursement rates for these programs. Any limitation on the Company's ability
to increase or maintain its premium levels, design products, implement
underwriting criteria or negotiate competitive provider contracts may adversely
affect the Company's financial condition or results of operations.
The Company's insurance subsidiaries are subject to extensive regulation in
their states of domicile and the other states in which they do business under
statutes that typically delegate broad regulatory, supervisory and
administrative powers to state insurance departments and agencies. State
insurance departments have also periodically conducted and continue to conduct
financial and market conduct examinations and other inquiries of UICI's
insurance subsidiaries. State insurance regulatory agencies have authority to
levy monetary fines and penalties resulting from findings made during the course
of such examinations and inquiries. Historically, the Company's insurance
subsidiaries have from time to time been subject to such regulatory fines and
penalties. While none of such fines or penalties
individually or in the aggregate have to date had a material adverse effect on
the results of operations or financial condition of the Company, the Company
could be adversely affected by increases in regulatory fines or penalties an/or
changes in the scope, nature and/or intensity of regulatory scrutiny and review.
The Company provides health insurance products to consumers in the
self-employed market in 44 states. A substantial portion of such products is
issued to members of various independent membership associations that endorse
the products and act as the master policyholder for such products. The two
principal membership associations in the self-employed market for which the
Company underwrites insurance are the National Association for the Self-Employed
("NASE") and the Alliance for Affordable Services ("AAS"). The associations
provide their membership with a number of endorsed benefits and products,
including health insurance underwritten by the Company. Subject to applicable
state law, individuals generally may not obtain insurance under an association's
master policy unless they are also members of the associations. UGA agents and
Cornerstone agents also act as enrollers of new members for the associations,
for which the agents receive compensation. Specialized Association Services,
Inc. (a company controlled by the adult children of Ronald L. Jensen. the
Chairman of the Company) provides administrative and benefit procurement
services to the associations, and a subsidiary of the Company sells new
membership sales leads to the enrollers and video and print services to the
associations and to Specialized Association Services, Inc. In addition to health
insurance premiums derived from the sale of health insurance, the Company
receives fee income from the associations, including fees associated with the
enrollment of new members, fees for association membership marketing and
administrative services and fees for certain association member benefits. The
agreements with these associations requiring the associations to continue as the
master policyholder and to endorse the Company's insurance products to their
respective members are terminable by the Company and the associations upon not
less than one year's advance notice to the other party.
Recent articles in the popular press have been critical of association
group coverage. In December 2002, the National Association of Insurance
Commissioners (NAIC) convened a special task force to review association group
coverage, and the Company is aware that selected states are reviewing the laws
and regulations under which association group policies are issued. The Company
has also recently been named a party to several lawsuits challenging the nature
of the relationship between the Company's insurance companies and the
associations that have endorsed the insurance companies' health insurance
products. While the Company believes it is providing association group coverage
in full compliance with applicable law, changes in the relationship between the
Company and the membership associations and/or changes in the laws and
regulations governing so-called "association group" insurance (particularly
changes that would subject the issuance of policies to prior premium rate
approval and/or require the issuance of policies on a "guaranteed issue" basis)
could have a material adverse impact on the financial condition, results of
operations and/or business of the Company.
The Company's Academic Management Services Corp. business could be
adversely affected by changes in the Federal Higher Education Act of 1965, which
authorizes and governs most federal student aid and student loan programs,
and/or changes in other relevant federal or state laws, rules and regulations.
The Higher Education Act is subject to review and reauthorization by the
recently convened 108th Congress. Congress last reauthorized the Higher
Education Act in 1998. While the Company believes that the Higher Education Act
of 1965 will in fact be reauthorized, there can be no assurance of the form that
reauthorization will take or the changes that the reauthorization bill will
bring to the law and regulations governing student finance.
In addition, existing legislation and future measures by the federal
government may adversely affect the amount and nature of federal financial
assistance available with respect to loans made through the U.S. Department of
Education. Finally, the level of competition currently in existence in the
secondary market for loans made under the Federal Loan Programs could be
reduced, resulting in fewer potential buyers of the Federal Loans and lower
prices available in the secondary market for those loans.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 99.1 Press release issued by the Company on April 30, 2003
announcing first quarter 2003 results of operations
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UICI
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(Registrant)
Date April 30, 2003 By /s/ Mark D. Hauptman
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Mark D. Hauptman
Vice President and Chief
Financial Officer
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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99.1 Press release issued by the Company on April 30, 2003
announcing first quarter 2003 results of operations