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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the Transition Period from to
Commission File Number 2-40764
KANSAS CITY LIFE INSURANCE COMPANY
(Exact Name of Registrant as Specified in its Charter)
Missouri 44-0308260
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
3520 Broadway, Kansas City, Missouri 64111-2565
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: 816-753-7000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of Each Exchange on
Title of Each Class Which Registered
None None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
(Title of Class)
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Indicate by check mark whether the Registrant (1) has filed all reports
re-quired to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
As of February 29, 2000, 12,023,990 shares of the Company's capital stock
par value $1.25 were outstanding, and the aggregate market value of the common
stock (based upon the average bid and asked price according to Company records)
of Kansas City Life Insurance Company held by non-affiliates was approximately
$119,970,160.
Part II
Documents Incorporated by Reference
Item 5: Market for Registrant's Common Page 44 of Annual Report to
Equity and Related Stockholder Shareholders for the year
Matters. ended December 31, 1999.
Item 6: Selected Financial Data. Page 24 of Annual Report to
Shareholders for the year
ended December 31, 1999.
Item 7: Management's Discussion Pages 22 through 27 of Annual
and Analysis of Financial Report to Shareholders for
Condition and Results of the year ended December 31,
Operations. 1999.
Item 7A: Quantitative and Qualitative Pages 25 through 27 of Annual
Disclosures about Market Risk Report to Shareholders for
the year ended December 31,
1999.
Item 8: Financial Statements and Pages 28 through 43 of Annual
Supplementary Data. Report to Shareholders for the
year ended December 31, 1999.
Part IV
Index to Exhibits Page 19
PART I
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. 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. 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. 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. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Incorporated by Reference.
Item 6. SELECTED FINANCIAL DATA
Incorporated by Reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
Incorporated by Reference.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
Incorporated by Reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by Reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
PART III
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. 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. 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. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
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