ITEM 1. BUSINESS
"First Fortis Life Insurance Company" on page 8 and "Further Information About First Fortis" on page 21 of the prospectus attached hereto as Exhibit No. 99 are incorporated herein.
The Company seeks to compete primarily on the basis of customer service, product design, and, in the case of products funded through Fortis Series Fund, Inc., the investment results achieved by Fortis Advisers, Inc. Many other insurance companies compete with the Company in each of its markets, including on the basis of price. Many of these companies, which include some of the largest and best known insurance companies, have considerably greater resources than the Company.
ITEM 2.
ITEM 2. PROPERTIES
The Company leases its home office building, consisting of 26,875 square feet, in Syracuse, New York. It also leases space consisting of 9,471 square feet for the maintenance of a sales office located in New York City and space consisting of 2,539 square feet for a sales office in Rochester, NY. The Company expects that this office space will be adequate for the foreseeable future.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
The Company is a defendant in various lawsuits, none of which, in the opinion of the Company counsel, will result in a material liability.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Not applicable.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Financial Data" from page 21 of the prospectus attached hereto as Exhibit No. 99, is incorporated herein by reference.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
"Management's Discussion and Analysis of Financial Condition and Results of Operations" on page 21 through 23 of the prospectus attached hereto as Exhibit No. 99 is incorporated herein by reference.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The matters set forth under the caption "Market Risk and Risk Management" in Management's Discussion and Analysis of Results of Operations (Item 7 of this report) are incorporated herein by reference.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's financial statements included in the prospectus attached hereto as Exhibit No. 99 are incorporated by reference.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
First Fortis' officers serve at the pleasure of the Board of Directors, and members of the Board who are also officers or employees of First Fortis serve without compensation. All Directors serve until their successors are duly elected and qualified. The compensation of members of the Board who are not also officers or employees of First Fortis or its affiliates is as follows. The Director receives $1,000 for attendance at the annual Board meeting. If the Director is also a member of the Audit Committee and/or the Investment Committee, the Director also receives $1,000 for attending any meeting of such committee unless the committee meeting date is the same as the annual meeting, in which case the committee meeting compensation is $500.
Mr. Freedman is also a director of Systems and Computer Technology Corporation and the following registered investment companies: Fortis Equity Portfolios, Inc.; Fortis Growth Fund, Inc.; Fortis Income Portfolios, Inc.; Fortis Securities, Inc.; Fortis Tax-Free Portfolios, Inc.; Fortis Money Portfolios, Inc.; Fortis Advantage Portfolios, Inc.; Fortis Worldwide Portfolios, Inc.; Fortis Series Fund, Inc.; Special Portfolios, Inc.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE
(1) This column includes contributions made by First Fortis for the year for the benefit for the named individual to defined contribution retirement plans.
As additional compensation to its employees and executive officers, First Fortis has an Employees' Uniform Retirement Plan and an Executive Retirement Plan which generally provide an annual annuity benefit upon retirement at age 65 (or a reduced benefit upon early retirement) equal to: .9% of the employee's Average Annual compensation up to the employee's social security covered compensation, plus 1.3% of Average Annual compensation above the employee's social security covered compensation up to $235,840, as adjusted by an index, multiplied by the employee's years of credited services.
The following table illustrates the combined estimated life annuity benefit payable from the Employees Uniform Retirement Plan and the Executive Retirement Plan to employees with the specified Final Average Salary and Years of Service upon retirement.
PENSION TABLE
The table above excludes social security benefits. In general, for the purposes of these plans compensation includes salary and bonuses. The credited years of service with First Fortis for those individuals named in the Summary Compensation Table above are as follows: 1 and 8.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners
(b) Security Ownership of Management
None.
(c) Changes in Control
None.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1)The following financial statements of First Fortis Life Insurance Company are included in Item 8:
Report of Independent Auditors
Balance Sheets at December 31, 1998 and 1997
Statements of Operations for the years ended December 31, 1998, 1997 and
Statements of Changes in Shareholder's Equity for the years ended December 31, 1998, 1997 and 1996
Statements of Cash Flows for the years ended December 31, 1998, 1997 and 1996.
Notes to Financial Statements
(a)(2) The information required by the following financial statement schedules for First Fortis Life Insurance Company are included in Item 8:
I. Summary of Investments -- Other than Investments in Related Parties -- Contained in the Notes to Financial Statements.
II. Condensed Financial Information of Registrant -- Contained in the non-financial statement part of the prospectus.
III. Supplementary Insurance Information -- Contained in Financials and Notes to Financial Statements.
IV. Reinsurance -- Contained in the Notes to Financial Statements.
V. Valuation and Qualifying Accounts -- Contained in the Financial Statements and Notes to Financial Statements.
All other schedules to the financial statements required by Article 7 of the Regulation S-X are not required under the related instructions or are inapplicable and therefore have been omitted.
(a)(3) Listing of Exhibits
2. None.
3.(a) Articles of Incorporation of First Fortis Life Insurance Company -- Incorporated by reference from Form 10-K filed by registrant, File No. 33-71690, on March 29, 1996.
(b) By-laws of First Fortis Life Insurance Company (Incorporated by reference from Form N-4 Registration Statement, File No. 33-71686, of registrant and its Separate Account A filed on November 15, 1993);
4.(a) Form of Combination Fixed and Variable Group Annuity Contract; (Incorporated by reference from Post-Effective Amendment No. 2 to Form N-4 Registration Statement, File No. 33-71686, of registrant and its Separate Account A filed on April 27, 1995);
(b) Form of Application to be used in connection with Contract filed as Exhibit 4 (a) (Incorporated by reference from Post-Effective Amendment No. 2 to Form N-4 Registration Statement, File No. 33-71686, of registrant and its Separate Account A filed on April 27, 1995);
(c) Form of IRA Endorsement (Incorporated by reference from Post-Effective Amendment No. 2 to Form N-4 Registration Statement, File No. 33-71686, of registrant and its Separate Account A filed on April 27, 1995);
(d) Form of Section 403(b) Annuity Endorsement (Incorporated by reference from Post-Effective Amendment No. 2 to Form N-4 Registration Statement, File No. 33-71686, of registrant and its Separate Account A filed on April 27, 1995);
10. Administrative Service Agreement -- Incorporated by reference from Form 10-K filed by registrant, File No. 33-71690, on March 29, 1996.
24.(a) Power of Attorney for Messrs. Rutherford, Freedman and Madame Gharib. (Incorporated by reference from Form N-4 Registration Statement, File No. 33-71686, of registrant and its Separate Account A filed on November 15, 1993).
(b) Power of Attorney for Messrs. Gardner, Nelson and Galston. (Incorporated by reference from Form N-4 Registration Statement, File No. 33-71686, of registrant and its Separate Account A filed on February 28, 1995.)
99. Form of prospectus to be filed as part of Form S-2 Amended Registration Statement of the Registrant.
(b) Reports on Form 8-K filed in the fourth quarter of 1998
None.
(c) Exhibits
Included in 14 (a)(3) above.
(d) Financial Statement Schedules
Included in 14(a)(2) above.
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 on this 26th day of March, 1999.
FIRST FORTIS LIFE INSURANCE COMPANY By: /s/ ZAFAR RASHID ----------------------------------- Zafar Rashid PRESIDENT & CHIEF EXECUTIVE OFFICER (PRINCIPAL EXECUTIVE OFFICER)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been duly signed below by the following persons on behalf of the registrant and in the capacities indicated on the 26th day of March, 1999. The following persons represent a majority of the Board of Directors of First Fortis Life Insurance Company: