SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): February 28, 2005
ProAssurance Corporation
(Exact name of registrant as specified in its charter)
Delaware 001-16533 63-1261433
(State of Incorporation) (Commission File No.) (IRS Employer I.D. No.)
100 Brookwood Place, Birmingham, Alabama 35209
(Address of Principal Executive Office ) (Zip code)
Registrant's telephone number, including area code: (205) 877-4400
Item 7.01 Regulation FD Disclosure
On February 28, 2005 ProAssurance Corporation announced that
we have entered into an agreement that provides for NCRIC Group to be
merged into ProAssurance in an all-stock transaction. Following our
announcement, we held a conference call to discuss the transaction.
In that conference call we said that we expect the transaction
to be accretive to ProAssurance book value and earnings per share in
the range of approximately five percent. We are providing this filing
to clarify that statement and provide additional information.
Our expectation is for accretion of approximately five percent
on a pro forma basis, based on publicly available earnings estimates
for NCRIC. In arriving at that figure, we based our decision on the
achievement of a certain degree of synergistic savings that we
developed in our internal models which we believe to be reasonable.
There can no assurance that we will be able to realize these cost
savings.
There is currently an $18.2 million judgment in place against
NCRIC in the Columbia Hospital coverage lawsuit. The outcome of motions
and potential appeals could jeopardize our accretion analysis.
NCRIC has taken action to strengthen loss reserves and
although we believe that the loss reserves now in place are adequate,
unanticipated adverse development in the future could also reduce or
eliminate any accretion.
We are furnishing the exhibit to this Form 8-K in accordance
with item 7.01, Regulation FD Disclosure. The exhibit shall not be
deemed to be "filed" for the purposes of Section 18 of the Securities
and Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to
the liability of such section, nor shall such information be deemed
incorporated by reference in any filing under the Securities Act of
1933 or the Exchange Act, regardless of the general incorporation
language of such filing, except as shall be expressly set forth by
specific reference in such filing.
Caution Regarding Forward-Looking Statements
This filing contains historical information as well as forward-looking
statements that are based upon our estimates and anticipation of future events
that are subject to certain risks and uncertainties that could cause actual
results to vary materially from the expected results described in the
forward-looking statements. The words "anticipate," "believe," "estimate,"
"expect," "hopeful," "intend," "may," "optimistic," "preliminary," "project,"
"should," "will," and similar expressions are intended to identify these
forward-looking statements. There are numerous important factors that could
cause our actual results to differ materially from those in the forward-looking
statements. Thus, sentences and phrases that we use to convey our view of future
events and trends are expressly designated as Forward-Looking Statements as are
sections of this filing clearly identified as giving our outlook on future
business. The principal risk factors that may cause actual results to differ
materially from those expressed in the forward-looking statements are described
in various documents we file with the Securities and Exchange Commission,
including Form 10K for the year ended December 31, 2003 and Form 10Q for the
most recent quarter.
These forward-looking statements are subject to significant risks, assumptions
and uncertainties, including, among other things, the following important
factors that could affect the actual outcome of future events:
Relating to the ongoing operations of the combined companies:
o General economic conditions, either nationally or in our market area, that
are worse than expected;
o regulatory and legislative actions or decisions that adversely affect our
business plans or operations;
o price competition;
o inflation and changes in the interest rate environment the performance of
financial markets and/or changes in the securities markets that adversely
affect the fair value of our investments or operations;
o changes in laws or government regulations affecting medical professional
liability insurance and practice management and financial services;
o changes to our ratings assigned by A.M. Best;
o the effect of managed healthcare;
o uncertainties inherent in the estimate of loss and loss adjustment expense
reserves and reinsurance; and changes in the availability, cost, quality,
or collectibility of reinsurance;
o significantly increased competition among insurance providers and related
pricing weaknesses in some markets.
o changes in accounting policies and practices, as may be adopted by our
regulatory agencies and the Financial Accounting Standards Board; and
o changes in our organization, compensation and benefit plans.
Relating to the proposed transaction with NCRIC:
o The business of ProAssurance and NCRIC may not be combined successfully, or
such combination may take longer to accomplish than expected;
o the cost savings from the merger may not be fully realized or may take
longer to realize than expected;
o operating costs, customer loss and business disruption following the
merger, including adverse effects on relationships with employees, may be
greater than expected;
o governmental approvals of the merger may not be obtained, or adverse
regulatory conditions may be imposed in connection with governmental
approvals of the merger;
o restrictions on our ability to achieve continued growth through expansion
into other states or through acquisitions or business combinations; and
o the stockholders of NCRIC may fail to approve the merger.
We wish to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made, and wish to
advise readers that the factors listed above could affect our financial
performance and could cause actual results for future periods to differ
materially from any opinions or statements expressed with respect to future
periods in any current statements. We do not undertake and specifically decline
any obligation to publicly release the result of any revisions that may be made
to any forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
SIGNATURE
Pursuant to the requirements of the Securities Exchange act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 28, 2005
PROASSURANCE CORPORATION
By: /s/ Howard H. Friedman
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Howard H. Friedman
Chief Financial Officer