UNITED STATES
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): May 31, 2000
DONEGAL GROUP INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-15341 23-2424711
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1195 River Road, Marietta, Pennsylvania 17547
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (717) 426-1931
N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events.
Since September 29, 1986, the Registrant's wholly owned subsidiary,
Atlantic States Insurance Company ("Atlantic States"), has been a party to a
Proportional Reinsurance Agreement (the "Agreement") with Donegal Mutual
Insurance Company ("Donegal Mutual") pursuant to which Atlantic States and
Donegal Mutual participate in an intercompany underwriting pool. Under the
Agreement, Atlantic States cedes to Donegal Mutual the premiums, losses and loss
expenses from all of its property and casualty insurance business and assumes
from Donegal Mutual a specified portion of the pooled business, which also
includes substantially all of Donegal Mutual's property and casualty insurance
business. From October 1, 1986 through September 30, 1988, Atlantic States
assumed 35% of the pooled business written or in force on or after October 1,
1986. From October 1, 1988 through December 31, 1992, Atlantic States assmed 50%
of the pooled business written or in force on or after October 1, 1988. From
January 1, 1993 through December 31, 1995, Atlantic States assumed 60% of the
pooled business written or in force on or after January 1, 1993. From January 1,
1996 through June 30, 2000, Atlantic States assumed 65% of the pooled business
written or in force after January 1, 1996.
On April 20, 2000, Atlantic States and Donegal Mutual entered into an
amendment (the "Amendment") to the Agreement, subject to the receipt of approval
from the Insurance Department of the Commonwealth of Pennsylvania, pursuant to
which, effective as of July 1, 2000, Atlantic States will assume 70% of the
pooled business written or in force on or after July 1, 2000. For further
information, reference is made to the Amendment, a copy of which is filed as
Exhibit 99.1 hereto.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired:
Not applicable.
(b) Pro forma financial information:
Not applicable.
(c) Exhibits:
99.1 Amendment IV dated as of April 20, 2000 to Proportional
Reinsurance Agreement between Donegal Mutual Insurance
Company and Atlantic States Insurance Company
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SIGNATURES
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.
DONEGAL GROUP INC.
By: /s/ Donald H. Nikolaus
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Donald H. Nikolaus, President
and Chief Executive Officer
Date: June 19, 2000
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
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99.1 Amendment IV dated as of April 20, 2000 to Proportional
Reinsurance Agreement between Donegal Mutual Insurance
Company and Atlantic States Insurance Company
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Exhibit 99.1
AMENDMENT IV
TO
PROPORTIONAL REINSURANCE AGREEMENT
THIS AMENDMENT IV, dated as of April 20, 2000 (the "Amendment") to the
Proportional Reinsurance Agreement (the "Agreement") dated as of September 29,
1986, as amended October 1, 1988, July 16, 1992 and December 21, 1995, between
DONEGAL MUTUAL INSURANCE COMPANY, a mutual casualty insurance company organized
and existing under the laws of the Commonwealth of Pennsylvania ("Donegal
Mutual") and ATLANTIC STATES INSURANCE COMPANY, a stock casualty insurance
company existing under the laws of the Commonwealth of Pennsylvania ("Atlantic
States").
W I T N E S S E T H
WHEREAS, the Boards of Directors of Donegal Mutual and Atlantic States,
believe the Amendment is in the best interests of Donegal Mutual and Atlantic
States and have approved the Amendment, subject to approval thereof by the
Coordinating Committees of the Board of Directors of Donegal Mutual and DGI; and
WHEREAS, the Coordinating Committee of the Boards of Directors of Donegal
Mutual and DGI has determined that the Amendment is fair and equitable to DGI;
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements contained herein and in the Agreement and intending to
be legally bound hereby, covenant and agree as follows:
1. Amendment of Exhibit I to the Agreement. Exhibit I to the Agreement is
hereby amended and restated so that, as amended and restated, said Exhibit to
the Agreement shall read in its entirety as follows:
"EXHIBIT I
PROPORTIONAL REINSURANCE AGREEMENT
Corporate Pool Participant Pool Participation
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Donegal Mutual Insurance Company 30%
Atlantic States Insurance Company 70%"
2. Effective Date of the Amendment. The Amendment shall be effective as to
the parties on July 1, 2000.
3. Ratification of Remainder of the Agreement. Except for the amendment
to Exhibit I to the Agreement as set forth in Section 1 of this Amendment, all
of the terms and provisions of the Agreement are hereby ratified and confirmed
and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Amendment as of the date and year first above
written.
[SEAL] DONEGAL MUTUAL INSURANCE COMPANY
Attest: /s/ Ralph G. Spontak By: /s/ Donald H. Nikolaus
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Donald H. Nikolaus, President
[SEAL] ATLANTIC STATES INSURANCE COMPANY
Attest: /s/ Ralph G. Spontak By: /s/ Donald H. Nikolaus
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Donald H. Nikolaus, President