Back to GetFilings.com
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, 1995
[ ] 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, 1996, 6,184,705 shares of the Company's capital stock
par value $2.50 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
$117,477,772.
Part II
Documents Incorporated by Reference
Item 5: Market for Registrant's Common Page 33 of Annual Report to
Equity and Related Stockholder Shareholders for the year
Matters. ended December 31, 1995.
Item 6: Selected Financial Data. Page 12 of Annual Report to
Shareholders for the year
ended December 31, 1995.
Item 7: Management's Discussion Pages 11 through 13 of Annual
and Analysis of Financial Report to Shareholders for
Condition and Results of the year ended December 31,
Operations. 1995.
Item 8: Financial Statements and Pages 14 through 27 of Annual
Supplementary Data. Report to Shareholders for
the year ended December 31,
1995.
Part IV
Index to Exhibits Pages 14 and 15
PART I
Item 1. BUSINESS
Kansas City Life Insurance Company (KCL) was incorporated under the
assessment 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 a single business segment: individual
life insurance and annuity products. A general agency distribution system is
employed. Nearly 85% of statutory premiums are derived from individual life
insurance and annuities on a consolidated basis. Interest sensitive products,
universal life insurance and flexible annuities, comprise the vast majority of
these premiums. Individual life insurance and annuities accounted for 92% of new
premiums in 1995. KCL introduced its first variable annuity product in late 1995
and will issue a variable universal life product in 1996.
KCL has two wholly owned life insurance subsidiaries, Sunset Life
Insurance Company of America (Sunset) and Old American Insurance Company (OAIC).
Sunset was acquired in 1974. Headquartered in Olympia, Washington, Sunset
operates in 21 states, principally west of the Mississippi. California provides
one-third of its statutory premiums. The Company offers products similar to
KCL's and sells through personal producing general agents. OAIC was acquired in
1991 and its operations, excluding marketing, have been merged into KCL's home
office and administrative and accounting systems. OAIC operates in 46 states,
primarily selling relatively small policies to the senior market to cover
funeral and other final expenses.
Kansas City Life 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 government 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.
Kansas City Life and OAIC respectively have 462 and 101 full time
employees who are located in KCL's home office. Sunset has 125 full time
employees located in Olympia, Washington.
The Company is engaged in a crowded, 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.
Sunset owns and wholly occupies a two story office business at 3200
Capitol Boulevard in Olympia, Washington. The building is situated on four
acres of land.
Kansas City Life owns various other properties held for investment.
Item 3. LEGAL PROCEEDINGS
In April, 1994, an Oklahoma jury returned a $10.7 million verdict against
the Company, consisting of actual and punitive damages. The case, Nita Charlene
Pelter Cox and Verna Leanne Pelter Graybill, Personal Representatives of the
Estate of Leora Pearl Pelter, Deceased, Plaintiffs, vs. Kansas City Life
Insurance Company and Billy D. Stearman, Defendants, arose out of certain
alleged actions by Stearman, one of the Company's agents. The Plaintiffs allege
that Stearman induced a policyowner to sign a beneficiary designation form
naming the agent's wife as beneficiary for $25,000 of a $100,000 death benefit.
The Company appealed the adverse jury verdict citing that the trial court
committed numerous errors in the conduct of the trial, in determination of
issues of evidence, in rulings on dispositive motions, and in jury instructions.
On January 16, 1996, a division of the Oklahoma Appellate Court issued an
opinion affirming a judgment of $1.3 million. While the opinion substantially
reduced the jury verdict, the Company believes this award should be further
reduced and has filed a petition for certiorari with the Oklahoma Supreme Court.
The Plaintiffs have also filed a petition for certiorari seeking reinstatement
of the jury verdict. Management believes that damages, if any, related to this
matter would not have a material adverse effect on the Company's consolidated
results of operations and financial position.
In addition to the above case, the Company and certain of its subsidiaries
are Defendants in various lawsuits involving claims and disputes with
policyowners which often include claims seeking punitive damages. Some of these
lawsuits arise in jurisdictions such as Alabama that permit punitive damages
disproportionate to the actual damages alleged. 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, the Company and its subsidiaries believe that
there are meritorious defenses for all of these claims and are defending them
vigorously. Management believes that the amounts that would ultimately be paid,
if any, would have no material adverse effect on the Company's consolidated
results of operations and financial position.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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 OPERATIONS
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, 1995, 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
Kathryn A. Bixby-Haddad 46 1996 None 1984
(6)
Daryl D. Jensen (3)(6) 57 1996 None 1978
Ilus W. Davis (4)(5)(6) 78 1996 None 1985
Webb R. Gilmore (3)(6) 51 1996 None 1990
C. John Malacarne 54 1996 Vice President, 1991
(1)(2)(3) General Counsel
and Secretary
W. E. Bixby, III (3)(6) 37 Nominee None --
Nancy Bixby Hudson (3)(6) 44 Nominee None --
J. R. Bixby (1)(2) 70 1997 Chairman of the Board 1957
Robert Philip Bixby 42 1997 Senior Vice President, 1985
(1)(2) Operations
Larry Winn, Jr. 76 1997 None 1985
(2)(4)(5)(6)
Richard L. Finn 54 1997 Senior Vice President, 1983
(1)(2) Finance
Warren J. Hunzicker, M.D. 75 1997 None 1989
(6)
W. E. Bixby (1)(2) 64 1998 Vice Chairman of the 1966
Board and President
David D. Dysart (2)(6) 67 1998 None 1972
Francis P. Lemery 56 1998 Senior Vice President 1985
(1)(2) and Actuary
Michael J. Ross 53 1998 None 1972
(2)(4)(5)(6)
Jack D. Hayes (1) 55 1998 Senior Vice President, 1995
Marketing
(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
shareholders to be held on April 18, 1996, will be elected for three year
term ending in 1998.
(4) Member of Audit Committee.
(5) Member of Compensation Committee.
(6) Mrs. Bixby-Haddad was elected Assistant Vice President of the Company in
1980 and served as Vice President, Compensation from 1981 until 1985.
W. E. Bixby, III was elected Assistant Vice President of the Company in
1985, Vice President, Marketing in 1980, 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. Davis is a partner in the law firm of Armstrong,
Teasdale, Schlafly and Davis, is a former Mayor of Kansas City, Missouri,
and also serves as a Director of Boatmen's Bancshares, Inc., St. Louis,
Missouri. Mr. Dysart served as Executive Vice President from 1980 until
he retired in January, 1987. Mr. Gilmore is a partner in the law firm of
Gilmore & Bell. Nancy Bixby Hudson has served as a Director of Sunset
Life, a subsidiary, 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
has been President of Sunset Life Insurance Company of America, a
subsidiary of Registrant, since 1973. Mr. Ross has been President of
Jefferson Bank and Trust Company, St. Louis, Missouri, since 1971 and was
elected Chairman of the Board in 1983. 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, 70 Chairman since 1972; President from 1964 until he
Chairman of the Board retired in April, 1990; responsible for overall
corporate policy. Director of Sunset Life, a
subsidiary.
W. E. Bixby, 64 Vice Chairman of the Board since 1974; elected
Vice Chairman of the Executive Vice President in January, 1987 and
President and CEO in April, 1990; primarily
responsible for the operation of the Company.
Chairman of the Board of Sunset Life and President
and Chairman of the Board of Old American,
subsidiaries.
Robert Philip Bixby, 42 Elected Assistant Secretary in 1979; Assistant Vice
Senior Vice President, President in 1982; Vice President in 1984 and to
Operations present position in 1990; responsible for Customer
Services, Computer Services, Claims and Premium
Collection.
Richard L. Finn, 54 Elected Vice President in 1976; Financial Vice
Senior Vice President, President in 1983 and to present position in 1984;
Operations chief financial officer and responsible for
investment of the Company's funds, accounting and
taxes. Director, Vice President and Chief
Financial Officer of Old American, a subsidiary.
Name, Age and Business Experience
Position During Past 5 Years
Jack D. Hayes, 55 Elected Senior Vice President, Marketing in
Senior Vice President, February, 1994; responsible for Marketing,
Marketing Marketing Administration, 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, 56 Elected Vice President in 1979; Vice President and
Senior Vice President Actuary in 1980, and to present position in 1984;
Actuary responsible for Group Insurance Department,
Actuarial Services, State Compliance, New Business
and Underwriting. Director of Sunset Life and Old
American, subsidiaries.
Robert C. Miller, 49 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.
John K. Koetting, 50 Elected Assistant Controller in 1975 and to present
Vice President and position in 1980; chief accounting officer;
Controller responsible Controller for all corporate accounting
reports. Director and Vice President and
Controller of Old American, a subsidiary.
C. John Malacarne, 54 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 of Sunset Life and Director
and Secretary of Old American, subsidiaries.
(d) Joseph R. Bixby, Chairman of the Board, and W. E. Bixby, Vice
Chairman of the Board and President, are brothers. Kathryn A. Bixby-
Haddad and Nancy Bixby Hudson are the daughters of Joseph R. Bixby;
Robert Philip Bixby and Walter 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, 1995 for the fiscal years ending December 31, 1995, 1994 and 1993.
SUMMARY COMPENSATION TABLE
Annual Compensation
Other All
Annual Other
Compen- Compen-
sation sation
Name and Principal Position Year Salary($) Bonus($) $ $
W. E. Bixby, Vice Chairman of the 1995 396,780 143,344 7,000 52,903
Board, President and CEO, Kansas 1994 377,880 121,921 7,000 50,350
City Life; Chairman of the Board, 1993 356,460 71,692 7,000 47,360
Sunset Life, and Chairman of the
Board, Old American, subsidiaries.
R. L. Finn, Senior Vice President, 1995 193,380 52,231 5,000 21,835
Finance and Director, Kansas City 1994 184,140 43,672 5,000 20,778
Life; Director, Old American, a 1993 174,120 22,145 5,000 19,611
subsidiary.
F. P. Lemery, Senior Vice Presi- 1995 193,380 52,232 7,000 23,239
dent and Actuary and Director, 1994 184,140 40,449 7,000 22,452
Kansas City Life; Director, 1993 174,120 22,165 7,000 19,508
Sunset Life and Old American,
subsidiaries.
D. D. Jensen, Director, Kansas 1995 176,190 35,275 6,000 21,133
City Life; Vice Chairman of 1994 168,750 39,020 6,000 19,944
the Board and President, Sunset 1993 170,788 20,343 6,000 19,085
Life, a subsidiary.
J. D. Hayes, Senior Vice Presi- 1995 169,620 89,131 3,000 19,215
dent, Marketing and Director, 1994 148,060 35 3,000 55,910
Kansas City Life.
ALL OTHER COMPENSATION INCLUDES THE FOLLOWING:
J. D. Hayes began employment with the Company on February 1, 1994. Per-
quisites and other personal benefits including $49,895 for moving expenses are
included in all other compensation for 1994.
The Company has a contributory Internal Revenue Code Section 401(k)
savings and investment 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 10% of their
monthly base salary. Highly compensated employees are limited to contributions
of 6%. The Company contributes an amount equal to the employee contributions in
the form of capital stock of the Company. The total amount contributed to the
plan for the accounts of the named individuals for fiscal years 1993, 1994 and
1995 are respectively as follows: W. E. Bixby, $8,994, $9,000, 9,000; R. L.
Finn, $8,706, $9,000, $9,000; F. P. Lemery, $8,706, $9,000, $9,000; D. D.
Jensen, $8,537, $9,000, $9,000; J. D. Hayes, $0, $0, $9,000.
The Company has adopted a nonqualified deferred compensation plan for
approximately 74 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 10% of their monthly
salary and the Company contributes an equal amount. The amount contributed to
the plan for fiscal years 1993, 1994 and 1995 respectively for the accounts of
the named individuals are as follows: W. E. Bixby, $26,652, $28,788, $30,678;
R. L. Finn, $8,706, $9,414, $10,338; F. P. Lemery, $8,706, $9,414, $10,338;
D. D. Jensen, $8,537, $7,875, $8,619; J. D. Hayes, $0, $0, $6,549.
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 fiscal years 1993, 1994
and 1995 respectively are as follows: W. E. Bixby, $11,714, $12,562, $13,225;
R. L. Finn, $2,199, $2,364, $2,497; F. P. Lemery, $2,096, $4,038, $3,901; D. D.
Jensen, $2,010, $3,069, $3,514; J. D. Hayes, $0, $2,046, $3,666.
(f) Defined Benefit or Actuarial Plan Disclosure
PENSION PLAN TABLE
The following table illustrates the possible annual pension benefits upon
completion of the indicated years of service with the five year average salary
for all officers and employees. Benefits are calculated on a straight life
annuity basis. The Social Security offset and benefit has been estimated.
Compensation Years of Service SS**
10 20 30 40
$ 75,000 $ 18,750 $ 37,500 $ 52,500 $ 52,715* $14,571
100,000 25,000 50,000 70,000 72.715* 14,571
125,000 31,250 62,500 87,500 92,715* 14,571
150,000 37,500 75,000 105,000 112,715* 14,571
200,000 50,000 100,000 140,000 152,715* 14,571
250,000 62,500 125,000 175,000 192,715* 14,571
300,000 75,000 150,000 210,000 232,715* 14,571
350,000 87,500 175,000 245,000 272,715* 14,571
400,000 100,000 200,000 280,000 312,715* 14,571
450,000 112,500 225,000 315,000 352,715* 14,571
500,000 125,000 250,000 350,000 392,715* 14,571
*Maximum pension based on an estimate of Social Security.
**Estimated annual Social Security benefit at age 65.
The Company has a noncontributory defined benefit pension plan which
covers all full time employees age 21 and over. A participant's retirement
benefit is determined by multiplying his or her highest average annual salary
for five consecutive years, from the last ten years of his or her employment, by
a percentage determined from the participant's total years of service from that
participant's 21st birthdate. The participant's percentage is determined by
multiplying 2 1/2% for each of the participant's years of service up to the
first twenty years, 2% for each year of service for the next ten years, and 1%
for each year of the next ten. A participant's benefit may not exceed 80% of
such average salary reduced by 1/2 of his or her Social Security benefit.
Early retirement benefits are available after age 55, depending upon years of
service and age. Benefits are fully vested after five years of service
following a participant's 18th birthdate.
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 the individuals named in the Cash Compensation Table, the years
of service covered by the plan for the year ended December 31, 1995, were: W.
E. Bixby, 38 years; R. L. Finn, 21 years; F. P. Lemery, 35 years; D. D. Jensen,
29 years; J. D. Hayes, 2 years.
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.
(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. Directors of Sunset Life, a subsidiary, are
paid $500 quarterly and Directors of Old American are paid $250 quarterly.
Directors 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 are Ilus W. Davis, 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 sets forth information as of February 29, 1996, concerning
holding of voting securities of the Company's $2.50 par value capital stock,
which is the Company's only class of voting stock.
Name and Address of Beneficial Owners:
John K. Koetting, Robert C. Miller
and Ronald E. Hiatt, Trustees of the
Kansas City Life Insurance Company
Savings and Investment Plan
3520 Broadway, Kansas City, MO 64111-2565
Amount and Nature of Ownership* Percent of Class
437,504 shares 7.0
John K. Koetting, Robert C. Miller
and Ronald E. Hiatt, Trustees of the
Kansas City Life Employee Stock Plan
3520 Broadway, Kansas City, MO 64111-2565
Amount and Nature of Ownership* Percent of Class
44,219 shares .7
*Trustees have the power to sell plan assets. Participants may instruct
the Trustees how to vote their shares.
Angeline I. Bixby
c/o William A. Hirsch, Esq.
Morrison & Hecker
2600 Grand Avenue, Kansas City, MO 64108
Amount and Nature of Ownership** Percent of Class
341,484 shares 5.5
**Includes 165,035 shares in the Walter E. Bixby Descendants Trust.
Angeline I. Bixby, Robert Philip Bixby and Walter E. Bixby, III are Co-
Trustees. The Trustees share voting and investment power. The terms of
the Trust restrict the transfer of the shares.
Angeline I. Bixby; Joseph R. Bixby; Margie Morris Bixby; Kathryn A. Bixby-
Haddad; Kathryn A. Bixby-Haddad as Custodian for Kellie S. Curtis; Sorouch
Haddad; Nancy Bixby Hudson; Robert Philip Bixby; Walter E. Bixby, III;
James R. Gammon as Trustee of the Walter E. Bixby Family Trust; Robert
Philip Bixby, Angeline I. Bixby, and Walter E. Bixby, III, as Co-Trustees
of the Walter E. Bixby Descendants Trust; W. E. Bixby; W. E. Bixby as
Trustee for Trust B created pursuant to the Will of Edwin Bixby and Trust
B created pursuant to the Will of Angeline Reynolds Bixby were members of
a group that agreed to act together for the purpose of holding Common
Stock, and the Common Stock ownership of such group was reflected in a
Schedule 13D filed with the Commission on November 23, 1988 and
subsequently amended. The agreement that documented the various rights
and obligations among all of the members of that group expired May 20,
1990.
Nonetheless, Ms. Bixby and other former members of the Bixby Group in sub-
sequent filings with the Commission have indicated that they currently share the
expectation of many members of their extended family that a majority of the
Common Stock will continue to be beneficially owned by such individuals or be
under the control of trustees under certain testamentary or inter vivos trusts
for the benefit of such individuals.
(b) Security Ownership of Management
The names of the nominees proposed by management for election to three
year terms at the annual meeting to be held April 18, 1996 are set forth as
follows:
Served Shares of
as a Record and
Principal Director Beneficially
Nominee Occupation Since Owned Percent
of Class
C. John Malacarne Vice President, 1991 10
3520 Broadway General Counsel 5,459(2) *
Kansas City, MO and Secretary
Daryl D. Jensen Vice Chairman of the 1978 24
2143 Old Port Dr. Board and President, 6,968(2) *
Olympia, WA Sunset Life Insurance
Company of America,
Olympia, WA
Webb R. Gilmore Partner - 1990 220 *
Attorney at Law Gilmore & Bell
833 Westover Rd.
Kansas City, MO
Served Shares of
as a Record and
Principal Director Beneficially Percent
Nominee Occupation Since Owned of
Class
W. E. Bixby, III President, Old -- 176,399 5.6
3520 Broadway American Insur- 2,129(2)
Kansas City, MO ance Company, 165,035(3)
Kansas City, MO 1,886(4)
Nancy Bixby Hudson Investor -- 165,783 2.7
926 Hobson
Lander, WY
The following Directors were elected April 21, 1994 for a three year term:
Joseph R. Bixby Chairman of the 1957 1,484,611(1) 24.0
3520 Broadway Board
Kansas City, MO
Richard L. Finn Senior Vice Presi- 1983 12
3520 Broadway dent, Finance 6,008(2) *
Kansas City, MO
Robert Philip Bixby Senior Vice Presi- 1985 175,989
3520 Broadway dent, Operations 5,439(2) 5.7
Kansas City, MO 165,035(3)
8,232(5)
Larry Winn, Jr. Retired Represent- 1985 166 *
8420 Roe Ave. ative, U.S. Congress
Prairie Village, KS
Warren J. Hunzicker, M.D. Director 1989 150 *
1248 Stratford Rd.
Kansas City, MO
The following Directors were elected April 20, 1995 for a three year term:
W. E. Bixby Vice Chairman of 1966 1,156,659 19.1
3520 Broadway the Board and 23,864(2)
Kansas City, MO President
David D. Dysart Director 1972 9,000 *
HCR 69, Box 395
Sunrise Beach, MO
Francis P. Lemery Senior Vice Presi- 1985 708 *
3520 Broadway dent and Actuary 6,968(2)
Kansas City, MO
Michael J. Ross Chairman of the 1972 300 *
12826 Dubon Lane Board and President,
St. Louis, MO Jefferson Bank and
Trust Company,
St. Louis, MO
Jack D. Hayes Senior Vice Presi- 1995 1,000 *
3520 Broadway dent, Marketing 227(2)
Kansas City, MO
Served Shares of as a Record and
Principal Director Beneficially Percent
Nominee Occupation Since Owned of
Class
The following Directors' terms will expire April 18, 1996:
Kathryn A. Bixby-Haddad Investor 1984 170,776(1) 3.2
2517 W. 118th St. 30,000(6)
Leawood, KS
Ilus W. Davis Partner - Armstrong, 1985 1,000 *
Attorney at Law Teasdale, et al
1001 W. 59th Terr.
Kansas City, 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 Trusts) 4,206,132 68.0
*Less than 1%.
(1) Includes shares owned by the spouses of these Directors: Mr. Joseph R.
Bixby 900; Mrs. Bixby-Haddad 2,847. Beneficial ownership of these shares
is disclaimed.
(2) Approximate vested beneficial interest in shares held by the Trustees of
Kansas City Life Insurance Company employee benefit plans. Participants
in the plans may instruct the Trustees how to vote those shares held in
their account.
(3) Shares in the Walter E. Bixby Descendants Trust. Robert Philip Bixby,
Walter E. Bixby, III and Angeline I. Bixby are Co-Trustees. The Trustees
share voting and investment power. The terms of the trust restrict
transferring shares.
(4) Shares as to which W. E. Bixby, III is Custodian for his nephew under
Missouri Uniform Gifts to Minors law.
(5) Shares as to which Robert Philip Bixby is Custodian for minor nieces and
nephews under the Missouri Uniform Gifts to Minors law.
(6) Shares as to which Mrs. Kathryn A. Bixby-Haddad is Custodian for her
niece, Kellie Curtis, and has voting and investment power. The terms of
the deed of gift restrict the transfer 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, 1995 at the following pages:
Page
Consolidated Income Statement - Years ended
December 31, 1995, 1994 and 1993 . . . . . . . . . . . . . . . 14
Consolidated Balance Sheet -
December 31, 1995 and 1994 . . . . . . . . . . . . . . . . . . 15
Consolidated Statement of Stockholder Equity -
Years ended December 31, 1995, 1994 and 1993 . . . . . . . . . 16
Consolidated Statement of Cash Flows -
Years ended December 31, 1995, 1994 and 1993 . . . . . . . . . 17
Notes to Consolidated Financial Statements . . . . . . . . . . . 18-26
Report of Independent Auditors . . . . . . . . . . . . . . . . . 27
(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, 1995 . . . . . . . . . 17
II - Condensed Financial Information of Registrant,
Years ended December 31, 1995, 1994 and 1993 . . . . . . 18-20
III - Supplementary Insurance Information, Years ended
December 31, 1995, 1994 and 1993 . . . . . . . . . . . . 21
V - Valuation and Qualifying Accounts, Years ended
December 31, 1995, 1994 and 1993 . . . . . . . . . . . . 21
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) 1986 Restatement of Articles of Incorporation. [Filed as
Exhibit 3(a) to the Company's 10-K Report for 1986 and
incorporated 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]
3(c) Specimen copies of Capital Stock Certificates, (a) less
than 100 shares; (b) 100 shares; and (c) unlimited.
[Filed as Exhibit 3(d) to the Company's 10-K Report for
1985 and in-corporated herein by reference]
10(a) Fourth Amendment, Kansas City Life Deferred Compensation
Plan. [Filed as Exhibit 10(a) to the Company's 10-K
Report for 1993 and incorporated herein by reference]
10(b) Twenty-first Amendment, Kansas City Life Insurance Company
Savings and Investment Plan. [Filed as Exhibit 10(b) to
the Company's 10-K Report for 1994 and incorporated herein
by reference]
Exhibit
Number: Basic Documents:
10(c) Ninth Amendment, Kansas City Life Employee Stock Plan.
[Filed as Exhibit 10(c) to the Company's 10-K Report for
1994 and incorporated herein by reference]
10(d) Kansas City Life Excess Benefit Plan. [Filed as Exhibit
10(e) to the Company's 10-K Report for 1990 and
incorporated herein by reference]
11 Computation of Per Share Earnings.
13 Annual Report to Shareholders for the year ended December
31, 1995.
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 Investment Plan for the year 1995 and filed as
a part hereof and incorporated herein by reference.
99(b) Prospectus for Kansas City Life Insurance Company Savings
and Investment Plan.
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, 1996
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/ W. E. Bixby By: /s/ Richard L. Finn
W. E. Bixby Richard L. Finn
Director; Vice Chairman of the Director; Senior Vice
Board and President President, Finance
(Principal Executive Officer) (Principal Financial Officer)
Date: March 28, 1996 Date: March 28, 1996
By: /s/ J. R. Bixby By: /s/ Francis P. Lemery
J. R. Bixby Francis P. Lemery
Director; Chairman of Director; Senior Vice
the Board President and Actuary
Date: March 28, 1996 Date: March 28, 1996
By: /s/ Warren J. Hunzicker By: /s/ Daryl D. Jensen
Warren J. Hunzicker, M.D. Daryl D. Jensen
Director Director
Date: March 28, 1996 Date: March 28, 1996
By: /s/ C. John Malacarne By: /s/ R. Philip Bixby
C. John Malacarne R. Philip Bixby
Director; Vice President, Director; Senior Vice
General Counsel and Secretary President, Operations
Date: March 28, 1996 Date: March 28, 1996
Schedule I
KANSAS CITY LIFE INSURANCE COMPANY
SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES
December 31, 1995
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 $ 138,372 141,599 141,599
Mortgage-backed securities 242,187 251,276 251,276
States, municipalities and political
subdivisions 46,369 46,479 46,479
Public utilities 279,156 285,185 285,185
All other corporate bonds 884,821 909,783 909,783
Redeemable preferred stocks 13,510 13,352 13,352
Total 1,604,415 1,647,674 1,647,674
Equity securities, available-for-sale:
Common stocks 187 72 72
Nonredeemable preferred stocks 62,165 70,765 70,765
Total 62,352 70,837 70,837
Fixed maturity securities,
held-to-maturity:
Bonds:
United States government and government
agencies and authorities 3,742 4,075 3,742
States, municipalities and political
subdivisions 2,225 2,394 2,225
Public utilities 175,700 188,608 175,700
All other corporate bonds 138,727 144,834 138,727
Total 320,394 339,911 320,394
Mortgage loans on real estate 235,213 235,213
Real estate, net 48,542 48,542
Real estate joint ventures 36,103 36,103(1)
Policy loans 94,312 94,312
Other investments 36,898 36,898
Total investments $2,438,229 2,489,973
(1)The carrying value of the real estate joint ventures reflects adjustments for
the Company's equity in the results of the operations of the joint ventures.
Schedule II
KANSAS CITY LIFE INSURANCE COMPANY
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEET
December 31
1995 1994
(in thousands)
Assets
Investments:
Fixed maturity securities:
Available for sale, at fair value $1,246,684 986,011
Held to maturity, at amortized cost 218,166 276,084
Equity securities available for sale, at fair value:
Investments in affiliates 190,083 159,893
Other 56,807 65,968
Mortgage loans on real estate, net 207,465 236,391
Real estate, net 47,976 52,300
Real estate joint ventures 32,272 22,285
Policy loans 75,305 77,840
Short-term 26,966 16,534
Total investments 2,101,724 1,893,306
Deferred acquisition costs 90,296 98,431
Other assets 88,650 84,959
Separate account assets 1,264 -
Total assets $2,281,934 2,076,696
Liabilities and stockholders' equity
Future policy benefits $ 452,332 452,509
Accumulated contract values 1,206,233 1,155,796
Other liabilities 164,978 124,696
Separate account liabilities 1,264 -
Total liabilities 1,824,807 1,733,001
Stockholders' equity:
Capital stock 23,121 23,121
Paid in capital 13,039 11,847
Unrealized gains (losses) on securities
available for sale and equity securities, net 29,740 (51,345)
Retained earnings including $85,213,000 undis-
tributed earnings of affiliates ($79,495,000 - 1994) 477,826 446,149
Less treasury stock, at cost (86,599) (86,077)
Total stockholders' equity 457,127 343,695
Total liabilities and stockholders' equity $2,281,934 2,076,696
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
1995 1994 1993
(in thousands)
Revenues
Insurance revenues:
Premiums:
Life insurance $ 23,927 28,187 29,575
Accident and health 22,324 22,580 20,207
Contract charges 52,932 49,600 47,782
Investment revenues:
Investment income, net 144,502 133,006 124,666
Dividends from affiliates 6,400 4,000 4,500
Realized gains, net 4,581 5,492 18,118
Other 6,906 8,892 8,576
Total revenues 261,572 251,757 253,424
Benefits and expenses
Policy benefits:
Death benefits 42,217 41,400 39,813
Surrenders of life insurance 12,491 12,965 13,427
Other benefits 44,066 44,928 42,213
Increase in benefit and contract reserves 54,348 47,506 56,563
Amortization of policy acquisition costs 13,693 15,554 9,293
Insurance operating expenses 52,328 48,457 46,030
Management fees from affiliates (5,995) (4,744) (3,173)
Total benefits and expenses 213,148 206,066 204,166
Pretax income 48,424 45,691 49,258
Federal income taxes 12,404 12,722 14,494
Income before equity in undistributed income
of affiliates and nonrecurring item 36,020 32,969 34,764
Equity in undistributed income of affiliates 5,718 5,889 7,290
Income before nonrecurring item 41,738 38,858 42,054
Postemployment benefits, net - 1,481 -
Net income $ 41,738 37,377 42,054
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
CASH FLOW STATEMENT
Years ended December 31
1995 1994 1993
(in thousands)
Net cash from operating activities $ 43,035 29,081 19,762
Investing activities
Investments called, matured or repaid 232,966 260,836 670,024
Investments sold 141,990 43,649 176,968
Investments purchased or originated (445,236) (378,958) (903,642)
Other (538) 477 (5,748)
Net cash used in investing activities (70,818) (73,996) (62,398)
Financing activities
Repayment of short-term debt - (10,555) (25,408)
Policyowner contract deposits 132,408 133,648 136,556
Withdrawals of policyowner
contract deposits (94,150) (74,650) (61,539)
Cash dividends to stockholders (10,061) (8,609) (8,358)
Other 670 816 (130)
Net cash from financing activities 28,867 40,650 41,121
Increase (decrease) in cash 1,084 (4,265) (1,515)
Cash at beginning of year 4,240 8,505 10,020
Cash at end of year $ 5,324 4,240 8,505
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
The Company believes it operates in a single industry segment, that of providing
life and accident and health insurance coverage. Therefore, supplementary
information for this segment is limited to the following:
December 31
1995 1994
(in thousands)
Unearned premiums (included in $ 925 1,003
other policyowners' funds in the
accompanying Consolidated Balance
Sheet)
All other information required by this Schedule is shown in the accompanying
Consolidated Income Statement and Consolidated Balance Sheet.
Schedule V
VALUATION AND QUALIFYING ACCOUNTS
Years ended December 31
1995 1994 1993
(in thousands)
Real estate valuation account
Beginning of year $ 9,942 11,113 10,743
Additions - - 448
Deductions (2,564) (1,171) (78)
End of year $ 7,378 9,942 11,113
Mortgage loan valuation account
Beginning of year $10,500 10,500 7,000
Additions - - 3,500
End of year $10,500 10,500 10,500
Allowance for uncollectible accounts
Beginning of year $ 2,732 2,642 2,572
Additions 1,258 464 613
Deductions (2,867) (374) (543)
End of year $ 1,123 2,732 2,642