SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
| [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, 2001 |
| [ ] |
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 January 31, 2002, 12,018,658 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 $137,961,792.
Documents Incorporated by Reference
| Item 5: | Market for Registrant's Common Equity and Related Stockholder Matters. |
Page 44 of Annual Report to shareholders for the year ended December 31, 2001. |
| Item 6: | Selected Financial Data. |
Page 24 of Annual Report to shareholders for the year ended December 31, 2001. |
| Item 7: | Management's Discussion and Analysis of Financial Condition and Results of Operations. |
Pages 22 through 27 of Annual Report to Shareholders for The year ended December 31, 2001. |
| Item 7A: | Quantitative and Qualitative Disclosures about Market Risk. |
Pages 25 through 27 of Annual Report to shareholders for the year ended December 31, 2001. |
| Item 8: | Financial Statements and Supplementary Data. |
Pages 28 through 43 of Annual Report to shareholders for the year ended December 31, 2001. |
| Index to Exhibits | Page 20 |
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 41% of consolidated insur-ance revenues. Variable universal life and annuities totaled 45% of new statutory premiums in 2001. 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 22% of insurance revenues. Sunset markets interest sensitive and traditional products to individuals through a personal pro-ducing general agency system. Sunset operates in 43 states and the District of Columbia. This segment provides 9% 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 the District of Columbia, and accounts for 28% of consolidated insurance revenues.
Old American and Sunset's administrative and accounting operations and systems are merged into KCL's home office. However, each entity operates a separate and independent marketing department and field force.
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 638 full time employees located in the home office. The Company considers relations with its employees to be good.
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.
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.
In recent years, the life insurance industry, including the Company and its subsidiaries, have 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.
In the previously reported case of Patricia A. Adams, et al, v. Kansas City Life Insurance Company, United States District Court for the Western District of Missouri, Case No. 981053CVW-9-6, following denial of the plaintiffs' amended motion for class certification in April, 2000, the case was transferred back to the United States District Court, Middle District of Florida, Case No. 8:97-CV-2921-T-26TGW. The Company has now settled with all individual plaintiffs for nominal amounts.
In the previously reported case of Edgar W. Howard, Sr., Individually and on Behalf of All Others Similarly Situated v. Sunset Life Insurance Company of America, Burnett County, Texas, Thirty-third Judicial Case No. 20451, the Court of Appeals upheld the trial court's entry of a summary judgment on behalf of Sunset Life on all plaintiffs' claims.
In the previously reported case of David Bahr, et al, v. Kansas City Life Insurance Company, Frank Sherlock, et al, San Bernardino County, California Superior Court, Case No. SCVSS 58192, it has been resolved through arbitration. The arbitrator has entered an order resolving all of plaintiff's claims in exchange for payment of less than $50,000 by the Company.
In the case of Charles R. Sullivan, etc., previously reported in the Company's Form 10-Q Report for the Quarter Ended September 30, 2001, discovery is continuing. Management believes that it is administering and has responsibility for less than 200 of the policies involved in this dispute.
In the previously reported case of Wilner v. Sunset Life Insurance Company, Dean Delevie, et al, Case No. SC051573, the Superior Court of the State of California, County of Los Angeles, on February 28, 2002 approved a settlement of a nation-wide class action lawsuit focusing on universal life sales practices by Sunset Life. The settlement will become final after 60 days if no appeal is taken from the court's order approving the settlement. With certain limited exceptions, the class that is bound by the terms of the settlement includes persons and entities who at any time during the class period (January 1, 1982 through December 31, 2001) had an ownership interest in one or more of Sunset Life's universal life policies during the class period. The reserve in connection with this settlement was increased to $18,000,000 in 2001. Given the uncertainties associated with estimating the reserve, it is reasonably possible that the final cost of the settlement could differ materially from the amounts presently provided for by us. We will continue to update this estimate of the final cost of the settlement as the claims are processed and more specific information is developed, particularly as the actual cost of the claims subject to a claims resolution procedure becomes available. However, based on information available at the time, and the uncertainties associated with the final claim processing and claim resolution, the range of any additional costs related to the settlement cannot be estimated with precision.
In addition to the above, the Company and its subsidiaries are defendants in, or subject to other claims or legal actions. Some of these claims and legal actions are in jurisdictions where juries are given substantial latitude in assessing damages, including punitive damages. Although no assurances can be given and no determinations can be made at this time, management believes that the ultimate liability, if any, with respect to these other claims and legal actions, would have no material effect on the Company’s business, results of operations and financial position.
No matters were submitted to a vote of the stockholders of the Company during the fourth quarter of the fiscal year ended December 31, 2001.
Incorporated by Reference.
Incorporated by Reference.
Incorporated by Reference.
Incorporated by Reference.
Incorporated by Reference.
Not Applicable.
(a) The following information, as of December 31, 2001, is provided with respect to each Director and Nominee:
Term as
Director Served as
Expires Other Positions Director
Name of Director Age in April with the Company From
---------------- --- -------- ---------------- ---------
Walter E. Bixby (1)(2) 42 2002 None 1996
Webb R. Gilmore 57 2002 None 1990
(1)(2)(4)(5)(6)
Nancy Bixby Hudson (1)(2) 49 2002 None 1996
Daryl D. Jensen (1)(2) 62 2002 None 1978
C. John Malacarne (3)(4) 60 2002 Senior Vice President, 1991
General Counsel
and Secretary
William A. Schalekamp* 57 -- Vice President and Nominee
(1)(3) Chief Compliance
Officer/Associate
General Counsel
J. R. Bixby (3)(4) 76 2003 Chairman of the Board 1957
R. Philip Bixby 48 2003 President, CEO and Vice 1985
(3)(4) Chairman of the Board
Richard L. Finn* 60 2003 None 1983
(3)(4)
Warren J. Hunzicker, M.D. 81 2003 None 1989
(2)
Tracy W. Knapp* 39 2003 Senior Vice President, --
(3) Finance
Larry Winn, Jr. 82 2003 None 1985
(2)(4)(5)(6)
William R. Blessing 47 2004 None 2001
(2)
Bruce W. Gordon (3)* 54 2004 Senior Vice President, --
Marketing
Cecil R. Miller (2)(5) 67 2004 None 2001
Michael J. Ross 60 2004 None 1972
(2)(4)(5)(6)
Elizabeth T. Solberg 62 2004 None 1997
(2)
*William A. Schalekamp has been nominated to replace C. John Malacarne who has announced he will retire after his term expires in April, 2002. Tracy W. Knapp was elected by the Board of Directors in January, 2002 to fill the expired term of Richard L. Finn who retired January, 2002. Bruce W. Gordon was elected by the Board of Directors in January, 2002 to fill the unexpired term of Jack D. Hayes who retired in December, 2001.
| (1) | Subject to the approval of the shareholders at the annual meeting of share-holders to be held on April 18, 2002, will be elected for a three year term ending in 2005. |
| (2) | Walter E. Bixby 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. Blessing is currently Vice President, Business Development and Strategy, Sprint PCS, Kansas City, Missouri, a position he has held since 1998. He has been with Sprint and related entities in various capacities since 1981. 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, a subsidiary of Registrant, from 1973 until his retirement in 1999. Mr. Jensen serves as a Director of Sunset Life and Generations Bank, subsidiaries. Mr. Miller is a retired partner of KPMG LLP (formerly Peat, Marwick, Mitchell & Co.) Mr. Miller joined KPMG in 1957 and became an audit partner in 1962 specializing in insurance and agribusiness. He retired in 1990. Mr. Ross has been Chairman of the Board of Jefferson Bank and Trust Company, St. Louis, Missouri, since 1983. Mr. Ross also serves as a Director of Generations Bank, a subsidiary. Mrs. Solberg became a Regional President and Senior Partner of Fleishman-Hillard, Inc., in January, 1998. She had been Executive Vice President since 1984. She also serves as a Director of Generations Bank, a subsidiary. Mr. Winn is retired as the Kansas Third District Representative to the U.S. Congress. |
| (3) | See below with respect to the business experience of executive officers of the Company. |
| (4) | Member of Executive Committee. |
| (5) | Member of Audit Committee. |
| (6) | Member of Compensation Committee. |
| (b) Executive Officers. |
| Name, Age and Position |
Business Experience During Past 5 Years |
| J. R. Bixby, 76 Chairman of the Board |
Chairman since 1972; President from 1964 until he retired in April, 1990. Responsible for overall corporate policy. Chairman of the Board of Sunset Life and Old American, subsidiaries. |
| R. Philip Bixby, 48 President, CEO and Vice Chairman of the Board |
Elected Assistant Secretary in 1979; Assistant Vice President in 1982; Vice President in 1984; Senior 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, Director of Old American, and Director of Generations Bank, subsidiaries. |
| Richard L. Finn, 60 Senior Vice President, Finance |
Elected Vice President in 1976; Financial Vice Presi- dent in 1983; and to present position in 1984. Chief financial officer and responsible for investment of the Company's funds, accounting and taxes. Director and Treasurer of Sunset Life, Director, Vice Presi- dent and Chief Financial Officer and Assistant Treasurer of Old American, and Director of Generations Bank, subsidiaries. Mr. Finn retired January 31, 2002. |
| Name, Age and Position |
Business Experience During Past 5 Years |
| Bruce W. Gordon, 54 Senior Vice President, Marketing |
Elected Senior Vice President, Marketing in July, 2001. Responsible for Marketing, Marketing Administration, Communications and Public Relations. Served as Vice President, Distribution Individual Insurance, Sun Life Financial 1999-2001; President, Product Resource Group and Vice President-ILD Marketing, Protective Life Insurance Company 1997-1999. Elected to fill the unexpired term of Jack D. Hayes on the Company's Board of Directors in January, 2002. Senior Vice President, Marketing and a member of the Board of Directors of Sunset Life, a subsidiary. |
| Tracy W. Knapp, 39 Senior Vice President, Finance |
Was elected Senior Vice President, Finance and to the unexpired term on the Board of Directors of Richard L. Finn, who retired January 31, 2002. Chief financial officer and responsible for the investment of the Company's funds, accounting and taxes. Mr. Knapp joined the Company in 1998 and was responsible for developing a banking subsidiary. He was elected President and CEO of Generations Bank when it was chartered in July, 2000. From 1991 to 1998,he held several positions with U.S. Credit Union including Vice President, Finances and Controller. |
| Mark A. Milton, 43 Senior Vice President, and Actuary |
Elected Assistant Actuary in 1984; Assistant Vice President/Associate Actuary in 1987; Vice President/ Associate Actuary in 1989; Vice President and Actuary in January, 2000; and to present position in January, 2001. Responsible for Actuarial Services, State Compliance and Group. Director, Vice President and Actuary of Sunset Life, a subsidiary. |
| Michael P. Horton, 59 Vice President, Group |
Elected Director, Group Life/Sales in 1977; Assistant Vice President, Group in 1981; and to present position in 1984. Responsible for group sales and products. |
| Robert C. Miller, 55 Senior Vice President, Administrative Services |
Elected Assistant Auditor in 1972; Auditor in 1973; Vice President and Auditor in 1987; and to present position in 1991. Responsible for Human Resources and Administrative Functions. |
| Charles R. Duffy, Jr., 54 Senior Vice President, Operations |
Elected Vice President, Computer Information Services in 1989; Vice President, Insurance Administration in 1992; and to present position in 1996. Responsible for the Company's Computer Operations, Customer Services, Claims, Agency Administration, New Business, Medical and Underwriting. Director of Sunset Life and Old American, subsidiaries. |
| John K. Koetting, 56 Vice President and Controller |
Elected Assistant Controller in 1975; and to present position in 1980. Chief accounting officer responsible for all corporate accounting reports. Director of Old American, a subsidiary. |
| Name, Age and Position |
Business Experience During Past 5 Years |
| C. John Malacarne, 60 Senior Vice President, General Counsel and Secretary |
Elected Associate General Counsel in 1976; General Counsel in 1980; Vice President and General Counsel 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, Old American, and Generations Bank, subsidiaries. |
| Name, Age and Position |
Business Experience During Past 5 Years |
| William A. Schalekamp, 57 Vice President and Chief Compliance Officer/ Associate General Counsel |
Joined the Company in 1971. Was elected Assistant Counsel in 1973; Associate Counsel in 1975; Assistant General Counsel in 1980; Associate General Counsel in 1984 and to his present position in January,2002. Responsible for market conduct compliance and providing legal services. |
(d) Nancy Bixby Hudson is the daughter of J. R. Bixby; R. Philip Bixby and Walter E. Bixby are brothers and the nephews of J. R. 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.
(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, 2001 for the fiscal years ending December 31, 2001, 2000 and 1999.
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- 2001 483,660 21,682 0 7,000 45,965
dent, CEO and Vice 2000 443,700 400 0 7,000 42,287
Chairman of the Board, 1999 405,180 41,931 0 7,000 26,853
Kansas City Life;
Director of Sunset
Life, Old American,
and Generations Bank,
subsidiaries.
-----------------------------------------------------
R. L. Finn, Senior 2001 256,740 20,715 0 7,000 28,201
Vice President, 2000 242,160 9,049 0 7,000 24,904
Finance and Director, 1999 231,720 22,680 0 7,000 17,650
Kansas City Life;
Director of Sunset
Life, Old American,
and Generations Bank,
subsidiaries. (Retired
January 31. 2002) _____________________________________________________
J. D. Hayes, Senior 2001 224,859 95,909 0 4,000 24,872
Vice President- 2000 210,360 4,004 0 4,000 22,986
Emeritus, Marketing, 1999 201,300 39,973 0 4,000 15,275
and Director, Kansas
City Life. (Retired
December 31, 2001)
-----------------------------------------------------
C. R. Duffy, Jr., 2001 216,180 14,513 0 3,000 19,959
Senior Vice President, 2000 202,020 14,654 0 3,000 18,385
Operations, Kansas City 1999 188,760 18,349 0 3,000 12,483
Life; Director of Sunset
Life and Old American,
subsidiaries. _____________________________________________________
C. J. Malacarne, Vice 2001 212,880 14,455 0 7,000 23,382
President, General 2000 202,740 14,886 0 7,000 20,809
Counsel and Secretary 1999 193,980 20,403 0 7,000 14,718
and Director, Kansas
City Life; Director and
Secretary of Sunset Life,
Old American and Generations
Bank, 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 up to 100% 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 2001 for the accounts of the named individuals are as follows: R. P. Bixby, $10,200; R. L. Finn, $10,200; J. D. Hayes, $10,200; C. R. Duffy, Jr.,$10,200; C. J. Malacarne, $10,200.
The Company has adopted a nonqualified deferred compensation plan for approximately 42 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 25% 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 2001 for the accounts of the named indi-viduals are as follows: R. P. Bixby, $18,820; R. L. Finn, $5,204; J. D. Hayes, $3,292; C. R. Duffy, Jr., $2,771; C. J. Malacarne, $2,573.
The Company provides yearly renewable term insurance to its employees in the amount of 2 1/2times 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 2001 are as follows: R. P. Bixby, $2,086; R. L. Finn, $4,687; J. D. Hayes, $4,335; C. R. Duffy, Jr. $223; C. J. Malacarne, $3,819.
The Company has a three year long term incentive plan in place for senior management that awards participants for the increase in the price of the Company's common stock from January 25, 2000 through January 24, 2003. Participants are awarded units (phantom shares) based on their annualized salary divided by the share price of $32.25 as of January 21, 2000. At the conclusion of the plan, participants receive awards based on the increase in the per share price times their number of units. Participants are also awarded dividends on these shares commensurate with the Company's dividend policy. Payments equivalent to divi- dends received by the named individuals and included in All Other Compensation are as follows: R. P. Bixby, $14,859; R. L. Finn, $8,110; J. D. Hayes, $7,045; C. R. Duffy, Jr., $6,765; C. J. Malacarne, $6,790.
(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 $ 50,776* $ 50,776* $18,449
100,000 25,000 50,000 70,000 70,776* 18,449
125,000 31,250 62,500 87,500 90,776* 18,449
150,000 37,500 75,000 105,000 110,776* 18,449
200,000 50,000 100,000 140,000 150,776* 18,449
250,000 62,500 125,000 175,000 190,776* 18,449
300,000 75,000 150,000 210,000 230,776* 18,449
350,000 87,500 175,000 245,000 270,776* 18,449
400,000 100,000 200,000 280,000 310,776* 18,449
450,000 112,500 225,000 315,000 350,776* 18,449
500,000 125,000 250,000 350,000 390,776* 18,449
*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, 2001, were: R. P. Bixby, 24 years; R. L. Finn, 28 years; J. D. Hayes, 8 years; C. R. Duffy, Jr., 12 years; C. J. Malacarne, 35 years.
The estimated annual annuity benefit payable starting at normal retirement age (age 65) as accrued through December 31, 2001 under the cash balance plan for each of the named individuals are as follows: R. P. Bixby, $167,604; R. L. Finn, $153,325; J. D. Hayes, $19,899; C. R. Duffy, Jr., $28,196; C. J. Malacarne, $144,946.
The Company has adopted an unfunded excess benefit plan which covers any employee who is an active participant in the non-contributory 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 maximum 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 $5,000 quarterly; $2,000 if they attend Special Board Meetings; $1,000 if they attend Executive Committee Meetings; $1,000 if they attend Audit Committee Meeting; and $500 if they attend all other Committee Meetings. Inside Directors are paid $1,000 quarterly and $400 if they attend Special Board Meetings. The 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. The Chairman of the Board is paid $11,250 quarterly. Directors of Old American are paid $250 quarterly. The Chairman of the Board is paid $8,750 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.
(a) Security Ownership of Certain Beneficial Owners
The following table sets forth information as of January 31, 2002 concerning 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)
847,797 Shares 7.1
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)
3,084,343 Shares 25.7
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. is a Texas limited partnership (the "WEB Partner-ship"). Each partner of the WEB Partnership has the power to vote that number of shares of Common Stock owned by the WEB Partnership which equals such partner's proportionate interest in the WEB Partnership. |
| (3) | Includes 2,358,340 shares for which Angeline I. O'Connor ("Ms. O'Connor") shares the power of disposition as a general partner of the WEB Partnership. Of these shares, Ms. O'Connor: (a) as a general partner of the WEB Partnership, in her capacity as a co-trustee of the Walter E. Bixby, Jr. Revocable Trust, shares the power to vote 2,118,067 shares; (b) 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 Partner-ship, has the power to vote 79,879 shares; and (c) as an individual general partner of the WEB Partnership, has the sole power to vote 212 shares. Also includes: (a) 372,315 shares for which Ms. O'Connor, as a co-trustee (with R. Philip Bixby and Walter E. Bixby) of the Walter E. Bixby Descendants Trust, shares the power to vote and the power of disposition; and (b) 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. is a Texas limited partnership (the "JRB Partner- ship"). Each partner of the JRB Partnership has the power to vote that number of shares of Common Stock owned by the JRB Partnership which equals such partner's proportionate interest in the JRB Partnership. |
| (5) | Includes 2,966,312 shares for which Margie Morris Bixby ("MM Bixby"), as the sole trustee of the Margie Morris Bixby Revocable Trust (the "MMB Trust"), a general partner and a limited partner of the JRB Partnership, shares the power of disposition. Of these shares, MM Bixby (a) as a general partner and a limited partner of the JRB Partnership, in her capacity as sole trustee of MMB Trust, has the sole power to vote 26,552 shares; and (b) as a limited partner of the JRB Partnership, in her individual capacity, has sole power to vote 331 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 ("Mr. Vogel"), as a general partner of the JRB Partnership, shares the power of disposition. Of these shares, Mr. Vogel: (a) as a general partner of the JRB Partnership, in his individual capacity, has the sole power to vote 263 shares; and (b) as a co-trustee (with Richard L. Finn) of the Issue Trust for Lee M. Vogel, a limited partner of the JRB Partnership, shares the power to vote 977,881 shares. Also includes: (a) 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 (b) 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
The following table sets forth information as of January 31, 2002 concerning officers and directors who own an interest in 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.
Walter E. Bixby, Webb R. Gilmore, Nancy Bixby Hudson and Daryl D. Jensen are currently Directors whose terms expire on April 22,2002. They, along with William A. Schalekamp, are nominees of management for election to three year terms at the annual meeting to be held April 18, 2002:
Served Shares of
as a Record and
Name and Principal Director Beneficially Percent
Address Occupation Since Owned of Class
-------- ---------- -------- ------------ --------
Walter E. Bixby President, Old 1996 7,223(1) 25.8
3520 Broadway American Insur- 2,358,340(2)(3)
Kansas City, MO ance Company, 366,376(4)
Kansas City, MO 372,315(5)
Served Shares of
as a Record and
Name and Principal Director Beneficially Percent
Address Occupation Since Owned of Class
-------- ---------- -------- ------------ --------
Webb R. Gilmore Chairman, CEO 1990 500 *
833 Westover Rd. and Shareholder,
Kansas City, MO Gilmore & Bell,
Kansas City, MO
Nancy Bixby Hudson Investor 1996 2,966,312(6) 27.4
425 Baldwin Creek Rd. 331,566(7)
Lander, WY
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 Senior Vice Presi- 1991 20 *
3520 Broadway dent, General Counsel 13,973(1)
Kansas City, MO and Secretary
William A. Schalekamp Vice President and Nominee 6 *
3520 Broadway Chief Compliance 11,195(1)
Kansas City, MO Officer/Associate
General Counsel
The following Directors, except Mr. Knapp who replaced Richard L. Finn, were elected April 20, 2000 for a three year term:
J. R. Bixby Chairman of the 1957 2,966,312(8) 24.7
3520 Broadway Board
Kansas City, MO
R. Philip Bixby President, CEO 1985 2,358,340(2)(9) 25.9
3520 Broadway and Vice Chairman 16,680(1)
Kansas City, MO of the Board 372,315(5)
361,502(10)
Richard L. Finn Retired Senior Vice 1983 24 24.2
3520 Broadway President, Finance 1,192(1)
Kansas City, MO 2,902,845(11)
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
Tracy W. Knapp Senior Vice Presi- 2002 76(1) *
3520 Broadway dent Finance
Kansas City, MO
The following Directors, except Mr. Gordon who replaced Jack D. Hayes, were elected April 19, 2001 for a three year term:
William R. Blessing Vice President 2001 100 *
11708 Manor Sprint PCS
Overland Park, KS Kansas City, MO
Served Shares of
as a Record and
Name and Principal Director Beneficially Percent
Address Occupation Since Owned of Class
-------- ---------- -------- ------------ --------
Bruce W. Gordon Senior Vice Presi- 2002 100 *
3520 Broadway dent, Marketing
Kansas City, MO
Cecil R. Miller Retired 2001 100 *
12215 Ash
Overland Park, KS
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
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 Partnerships
and Trusts) 8,364,141 69.6
*Less than 1%.
| (1) | 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. |
| (2) | As general partners of the WEB Interests, Ltd., a Texas limited partnership (the "WEB Partnership"), Walter E. Bixby, R.Philip Bixby and Angeline I. O'Connor, share the power to dispose of these shares, which are owned by the WEB Partnership. As general partners, in their capacity as co-trustees of the WEB Trust, Walter E. Bixby, R. Philip Bixby and Ms. O'Connor share the power to vote 2,118,067 of these shares. |
| (3) | Includes (a) 212 shares for which Walter E. Bixby, as an individual general partner of the WEB Partnership, has the sole power to vote; and (b) 79,879 shares for which Walter E. Bixby, 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 power to vote. |
| (4) | Includes (a) 350,280 shares which Walter E. Bixby owns directly and has the sole power to vote and the sole power of disposition; and (b) 16,096 shares for which Walter E. Bixby, as custodian for certain of his minor nieces and nephews, has the sole power to vote and the sole power of disposition. |
| (5) | These shares are held in the Walter E. Bixby Descendants Trust. R. Philip Bixby, Walter E. Bixby and Ms. 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 the transfer of these shares. |
| (6) | Ms. Hudson, as a general partner of JRB Interests, Ltd., a Texas limited partnership (the "JRB Partnership"), shares with the managing general partner and the other general partners of the JRB Partnership, the power of disposition of these shares, which are owned by the JRB Partnership. Ms. Hudson (a) as a general partner of the JRB Partnership, has sole power to vote 263 of these shares; and (b) as a co-trustee (with Richard L. Finn) of the Nancy Bixby Hudson GST Trust and the Issue Trust for Nancy Bixby Hudson, which trusts are limited partners of the JRB Partnership, shares the power to vote 1,924,964 of these shares. |
| (7) | 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. |
| (8) | J. R. Bixby, as sole managing general partner of the JRB Partnership, shares with the other general partners of the JRB Partnership the power of disposition of these shares, which are owned by the JRB Partnership. Of these shares, he has the sole power to vote (a) 331 of these shares as an individual limited partner of the JRB Partnership, and (b) 26,289 shares as a general partner of the JRB Partnership, in his capacity as sole trustee of the Joseph R. Bixby Revocable Trust. |
| (9) | Includes (a)212 shares for which R. Philip Bixby as an individual general partner of the WEB Partnership, has the sole power to vote; and (b) 79,899 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 power to vote. |
| (10) | Includes: (a) 342,814 shares which R. Philip Bixby owns directly and has the sole power to vote and the sole power of disposition; and (b) 18,688 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. |
| (11) | Richard L. Finn share the power to vote (a) 1,924,964 shares with Nancy 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 (b)977,881 shares with Lee M. Vogel, as co-trustees of the Issue Trust for Lee M. Vogel, a limited partner of the JRB Partnership. |
None.
(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, 2001 at the following pages:
Page
----
Consolidated Income Statement - Years ended
December 31, 2001, 2000 and 1999 . . . . . . . . . . . . . . . 28
Consolidated Balance Sheet -
December 31, 2001 and 2000 . . . . . . . . . . . . . . . . . . 29
Consolidated Statement of Stockholders' Equity -
Years ended December 31, 2001, 2000 and 1999 . . . . . . . . . 30
Consolidated Statement of Cash Flows -
Years ended December 31, 2001, 2000 and 1999 . . . . . . . . . 31
Notes to Consolidated Financial Statements . . . . . . . . . . . 32-42
Reports 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, 2001 . . . . . . . . . 22
II - Condensed Financial Information of Registrant,
Years ended December 31, 2001, 2000 and 1999 . . . . . . 23-25
III - Supplementary Insurance Information, Years ended
December 31, 2001, 2000 and 1999 . . . . . . . . . . . . 26
IV - Reinsurance Information, Years ended
December 31, 2001, 2000 and 1999 . . . . . . . . . . . . 27
V - Valuation and Qualifying Accounts, Years ended
December 31, 2001, 2000 and 1999 . . . . . . . . . . . . 28
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) Tenth Amendment, Kansas City Life Deferred Compensation Plan.
10(b) Twenty-seventh Amendment, Kansas City Life Insurance Company
Savings and Profit Sharing Plan.
10(c) Thirteenth Amendment, Kansas City Life Employee Stock Plan.
10(d) Second Amendment, Kansas City Life Excess Benefit Plan.
[Filed as Exhibit 10(d) to the Company's 10-K Report for
1999 and incorporated herein by reference]
13 Annual Report to Shareholders for the year ended December 31,
2001.
21 Subsidiaries.
23(a) Independent Auditors' Consent.
23(b) Consent of Independent Auditors.
23(c) Independent Auditors' Consent.
23(d) Consent of Independent Auditors.
99(a) Form 11-K for the Kansas City Life Insurance Company Savings
and Profit Sharing Plan for the year 2001 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 2000 and incorporated herein by reference]
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.
By: /s/ John K. Koetting
------------------------------
John K. Koetting
Vice President and Controller
(Principal Accounting Officer)
Date: March 8, 2002
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/ Joseph R. Bixby
------------------------------ ------------------------------
R. Philip Bixby Joseph R. Bixby
Director; President, Chief Director; Chairman of
Executive Officer and Vice the Board
Chairman of the Board Date: March 8, 2002
(Principal Executive Officer)
Date: March 8, 2002
By: /s/ Larry Winn, Jr. By: /s/ C. John Malacarne
------------------------------ ------------------------------
Larry Winn, Jr. C. John Malacarne
Director Director; Vice President,
Date: March 8, 2002 General Counsel and Secretary
Date: March 8, 2002
By: /s/ Walter E. Bixby By: /s/ Daryl D. Jensen
------------------------------ ------------------------------
Walter E. Bixby Daryl D. Jensen
Director Director
Date: March 8, 2002 Date: March 8, 2002
By: /s/ Webb R. Gilmore By: /s/ Elizabeth T. Solberg
------------------------------ ------------------------------
Webb R. Gilmore Elizabeth T. Solberg
Director Director
Date: March 8, 2002 Date: March 8, 2002
Schedule I
KANSAS CITY LIFE INSURANCE COMPANY AND SUBSIDIARIES
SUMMARY OF INVESTMENTS - OTHER THAN
INVESTMENTS IN RELATED PARTIES
December 31, 2001
Amount at
Which Shown
Fair in Balance
Type of Investment Cost Value Sheet
------------------ ---- ----- -----------
(in thousands)
Fixed maturities available for sale:
Bonds:
United States government and government
agencies and authorities $ 47,991 50,765 50,765
Mortgage-backed securities 532,978 535,609 535,609
Public utilities 290,670 285,384 285,384
All other bonds 1,221,352 1,185,192 1,185,192
Redeemable preferred stocks 5,184 5,243 5,243
--------- --------- ---------
Total 2,098,175 2,062,193 2,062,193
--------- ========= ---------
Equity securities available for sale:
Common stocks 34,167 34,069 34,069
Perpetual preferred stocks 35,992 33,690 33,690
--------- --------- ---------
Total 70,159 67,759 67,759
--------- ========= ---------
Mortgage loans, net 433,095 433,095
Real estate, net 61,777 61,777
Real estate joint ventures 33,320 33,320
Policy loans 112,995 112,995
Short-term investments 127,984 127,984
Other investments 10,999 10,999
--------- ---------
Total investments $2,948,504 2,910,122
========= =========
Schedule II
KANSAS CITY LIFE INSURANCE COMPANY
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEET
December 31
2001 2000
---- ----
(in thousands)
Assets
Investments:
Fixed maturities:
Available for sale, at fair value $1,487,800 1,449,167
Held to maturity, at amortized cost - 45,983
Equity securities available for sale, at fair value:
Investments in affiliates 255,478 253,162
Other 50,442 70,170
Mortgage loans, net 322,590 300,752
Real estate, net 59,543 43,499
Real estate joint ventures 26,724 26,481
Policy loans 91,777 94,905
Short-term investments 76,187 8,761
--------- ---------
Total investments 2,370,541 2,292,880
Cash 9,815 17,347
Deferred acquisition costs 120,175 125,259
Value of purchased insurance in force 55,020 59,124
Deferred income tax asset 16,695 21,685
Other assets 115,714 109,397
Separate account assets 305,283 325,148
--------- ---------
Total assets $2,993,243 2,950,840
========= =========
Liabilities and stockholders' equity
Future policy benefits $ 519,566 528,702
Accumulated contract values 1,308,678 1,294,399
Other liabilities 294,032 270,337
Separate account liabilities 305,283 325,148
--------- ---------
Total liabilities 2,427,559 2,418,586
--------- ---------
Stockholders' equity:
Common stock 23,121 23,121
Paid in capital 21,744 20,109
Accumulated other comprehensive loss (35,833) (47,391)
Retained earnings including $159,756,000 undis-
tributed earnings of affiliates ($151,380,000 - 2000) 665,282 643,435
Less treasury stock, at cost (108,630) (107,020)
--------- ---------
Total stockholders' equity 565,684 532,254
--------- ---------
Total liabilities and stockholders' equity $2,993,243 2,950,840
========= =========
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
2001 2000 1999
---- ---- ----
(in thousands)
Revenues
Insurance revenues:
Premiums:
Life insurance $ 27,289 25,481 30,684
Accident and health 44,053 42,567 40,524
Contract charges 82,516 83,841 82,065
Investment revenues:
Investment income, net 151,547 155,859 159,027
Realized investment gains (losses),net (14,147) (304) 1,208
Other 10,447 11,042 9,690
------- ------- -------
Total revenues 301,705 318,486 323,198
------- ------- -------
Benefits and expenses
Policy benefits 191,825 191,772 197,140
Amortization of deferred
acquisition costs 17,034 11,437 12,443
Insurance operating expenses 78,568 80,234 79,230
Management fees from affiliates (11,837) (12,234) (8,940)
------- ------- -------
Total benefits and expenses 275,590 271,209 279,873
------- ------- -------
Income before federal income taxes and
equity in undistributed net income
of affiliates 26,115 47,277 43,325
Federal income taxes 3,247 12,773 12,545
------- ------- -------
Income before equity in undistributed
net income of affiliates 22,868 34,504 30,780
Equity in undistributed net income
of affiliates 7,054 14,579 14,265
------- ------- -------
Net income $ 29,922 49,083 45,045
======= ======= =======
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 STATEMENT OF REGISTRANT
CASH FLOW
STATEMENT
Years ended December 31
2001 2000 1999
---- ---- ----
(in thousands)
Net cash provided from operating activities $ 47,632 38,001 28,535
Investing Activities
Purchases of investments:
Fixed maturities available for sale (602,440) (273,929) (483,805)
Fixed maturities held to maturity - - (3,354)
Equity securities available for sale (3,927) (10,200) (39,542)
Sale of available for sale securities 498,268 274,036 333,732
Maturities and principal paydowns
of security investments:
Fixed maturities available for sale 128,216 84,291 138,094
Fixed maturities held to maturity - 15,414 6,993
Equity securities available for sale 13,561 13,724 487
Purchases of other investments (147,068) (77,150) (30,833)
Sales, maturities and principal
paydowns of other investments 42,911 48,231 52,902
Disposition of group insurance
blocks - net cash paid (4,000) - (5,162)
------- ------- -------
Net cash provided (used) (74,479) 74,417 (30,488)
------- ------- -------
Financing Activities
Proceeds from borrowings 45,530 34,700 89,950
Repayment of borrowings (4,800) (68,700) (25,950)
Policyholder contract deposits 110,611 97,345 105,018
Withdrawals of policyholder
contract deposits (106,387) (159,237) (148,515)
Change in other deposits (12,673) (3,268) 14,461
Cash dividends to stockholders (12,991) (12,037) (11,841)
Disposition (acquisition) of
treasury stock, net 25 (2,411) (12,771)
------- ------- -------
Net cash provided (used) 19,315 (113,608) 10,352
------- ------- -------
Increase (decrease) in cash (7,532) (1,190) 8,399
Cash at beginning of year 17,347 18,537 10,138
------- ------- -------
Cash at end of year $ 9,815 17,347 18,537
======= ======= =======
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, 2001:
KCL - Individual $120,175 1,844,473 405 114,451
KCL - Group - 6,980 103 -
Sunset 50,895 379,685 77 9,422
Old American 72,536 259,862 355 5,075
------- --------- ------ -------
Total $243,606 2,491,000 940 128,948
======= ========= ====== =======
December 31, 2000:
KCL - Individual $125,259 1,833,620 319 131,958
KCL - Group - 10,935 25 -
Sunset 48,040 373,006 99 9,508
Old American 71,661 257,696 367 7,273
------- --------- ------ -------
Total $244,960 2,475,257 810 148,739
======= ========= ====== =======
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
======= ========= ====== =======
Insurance Accident and
Policy Operating Health Written
Benefits Expenses@ Premiums
-------- --------- --------------
(in thousands)
2001: @Allocations
KCL - Individual $154,175 49,703 298 of Insurance
KCL - Group 37,649 21,377 45,370 Operating
Sunset 32,172 28,900 21 Expenses are
Old American 51,649 16,759 1,738 based on a
------- --------- ------ number of
Total $275,645 116,739 47,427 assumptions
======= ========= ====== and esti-
mates, and
2000: the results
KCL - Individual $156,768 52,567 335 would change
KCL - Group 35,004 20,950 43,710 if different
Sunset 32,387 10,167 26 methods were
Old American 52,682 17,051 2,048 applied.
------- --------- ------
Total $276,841 100,735 46,119
======= ========= ======
1999:
KCL - Individual $162,336 53,507 362
KCL - Group 34,804 20,872 41,411
Sunset 30,242 10,867 27
Old American 53,790 18,351 2,085
------- --------- ------
Total $281,172 103,597 43,885
======= ========= ======
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
----------------------- ----------------------------
2001 2000 1999 2001 2000 1999
---- ---- ---- ---- ---- ----
(in thousands)
Direct
KCL - Individual $ 35,862 24,951 29,725 344 379 413
KCL - Group 10,800 11,439 11,567 46,129 48,906 50,113
Sunset 5,576 5,606 5,491 23 28 29
Old American 76,508 78,912 81,022 4,742 5,456 6,168
------- ------- ------- ------- ------- -------
Total $128,746 120,908 127,805 51,238 54,769 56,723
------- ------- ------- ------- ------- -------
Ceded
KCL - Individual (16,363) (14,737) (13,811) (46) (44) (51)
KCL - Group (7,944) (2,277) (2,333) (2,375) (6,674) (9,951)
Sunset (5,947) (4,523) (5,879) (2) (2) (2)
Old American (5,467) (6,281) (7,232) (3,004) (3,408) (4,083)
------- ------- ------- ------- ------- -------
Total (35,721) (27,818) (29,255) (5,427) (10,128) (14,087)
------- ------- ------- ------- ------- -------
Assumed
KCL - Individual 4,934 6,105 5,536 - - -
KCL - Group - - - - - -
Sunset - - - - - -
Old American - - - - - -
------- ------- ------- ------- ------- -------
Total 4,934 6,105 5,536 - - -
------- ------- ------- ------- ------- -------
Net $ 97,959 99,195 104,086 45,811 44,641 42,636
======= ======= ======= ======= ======= =======
% of Assumed to Net 5 6 5 - - -
Life Insurance in Force
---- --------- -- -----
2001 2000 1999
---- ---- ----
(in millions)
Direct
KCL - Individual $ 14,068 14,003 13,386
KCL - Group 3,292 3,440 3,351
Sunset 5,639 5,629 5,807
Old American 1,020 1,048 1,072
------- ------- -------
Total 24,019 24,120 23,616
------- ------- -------
Ceded
KCL - Individual (5,158) (4,749) (3,726)
KCL - Group (329) (267) (270)
Sunset (1,562) (1,393) (1,371)
Old American (95) (105) (116)
------- ------- -------
Total (7,144) (6,514) (5,483)
------- ------- -------
Assumed
KCL - Individual 2,626 2,818 3,131
KCL - Group - - -
Sunset - - -
Old American - - -
------- ------- -------
Total 2,626 2,818 3,131
------- ------- -------
Net $ 19,501 20,424 21,264
======= ======= =======
% of Assumed to Net 13 14 15
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
2001 2000 1999
---- ---- ----
(in thousands)
Real estate valuation account
Beginning of year $ 625 1,519 2,877
Deductions (625) (894) (1,358)
------ ------ ------
End of year $ 0 625 1,519
====== ====== ======
Mortgage loan valuation account
Beginning of year $ 4,030 7,000 8,500
Deductions 0 (2,970) (1,500)
------ ------ ------
End of year $ 4,030 4,030 7,000
====== ====== ======
Allowance for uncollectible accounts
Beginning of year $ 1,583 1,555 1,337
Additions 492 218 491
Deductions (492) (190) (273)
------ ------ ------
End of year $ 1,583 1,583 1,555
====== ====== ======