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): December 31, 2005
SECURITY NATIONAL FINANCIAL CORPORATION
(Exact name of registrant as specified in this Charter)
Utah 0-9341 87-0345941 (State or other jurisdiction of incorporation)
(Commission File Number) (IRS Employer Identification No.)
5300 South 360 West, Salt Lake City, Utah 84123
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (801) 264-1060
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Does Not Apply
(Former name or former address, if changed since last report)
ITEM 1.01. Registrant's Business and Operations.
Reinsurance Agreement Between Security National Life Insurance Company
and Southern Security Life Insurance Company
On December 31, 2005, Security National Financial Corporation (the
"Company"), through its subsidiaries, Security National Life Insurance Company,
a Utah domiciled life insurance company, and Southern Security Life Insurance
Company, a Florida domiciled life insurance company, entered into a reinsurance
agreement to reinsure the remaining in force business of Southern Security Life
Insurance Company to Security National Life Insurance Company to the extent
permitted by the Florida Office of Insurance Regulation. The assets and
liabilities reinsured under the reinsurance agreement will be deposited into a
trust account, in which Zions First National Bank agrees to act as trustee.
Under the terms of the reinsurance agreement, in the event of the insolvency of
Security National Life Insurance Company, Zions First National Bank will hold
the assets and liabilities in trust for purposes of administration of the assets
and liabilities with respect to such insolvency.
The Florida Office of Insurance Regulation approved the reinsurancxe
agreement on December 28, 2005. As a result of the execution of the reinsurance
agreement, all of the insurance business and operations of Southern Security
Life Insurance Company will be transferred to Security National Life Insurance
Company, as reinsurer, as of December 31, 2005, the effective date of the
agreement. Any future insurance business by Southern Security Life Insurance
Company will be covered by this reinsurance agreement. All of the insurance
business and operations of Southern Security Life Insurance Company, including
its assets and liabilities, will be transferred to Security National Life
Insurance Company under the terms of the reinsurance agreement, except for
approximately $3,500,000 in capital and surplus that Southern Security Life
Insurance Company will continue to hold in order to remain qualified as a life
insurance company for federal income tax purposes. Thus, approximately
$45,197,000 in assets and liabilities will be transferred from Southern Security
Life Insurance Company to Security National Life Insurance Company pursuant to
the reinsurance agreement.
Dividend Payment by Southern Security Life Insurance Company
to Security National Life Insurance Company
Also, on December 31, 2005, Southern Security Life Insurance Company
declared a dividend to Security National Life Insurance Company in the amount of
approximately $7,145,000. Following the payment of the dividend, the remaining
capital and surplus of Southern Security Life Insurance Company will be
approximately $3,500,000, which is a sufficient amount in order for Southern
Security Life Insurance Company to maintain its status as an admitted insurer in
good standing in the state of Florida. On December 28, 2005, the Florida Office
of Insurance Regulation approved the request by Security National Life Insurance
Company and Southern Security Life Insurance Company for the dividend payment.
Sale or Merger Involving Southern Security Life Insurance Company
The Company expects that Southern Security Life Insurance Company will
either be sold to an unrelated business entity or merged with Security National
Life Insurance Company during fiscal 2006. On December 12, 2005, a plan of
liquidation was approved by the Company's Board of Directors in anticipation of
such sale or merger. The Company expects the sale or merger to be completed
prior to December 31, 2006.
ITEM 9.01. Financial Statements and Exhibits
(c) Exhibits
10.1 Reinsurance Agreement between Security National Life Insurance
Company and Southern Security Life Insurance Company.
10.2 Trust Agreement among Security National Life Insurance Company,
Southern Security Life Insurance Company and Zions First National
Bank.
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.
SECURITY NATIONAL FINANCIAL CORPORATION
(Registrant)
Date: January 10, 2006 By: /s/ Scott M. Quist
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Scott M. Quist
President and Chief Operating Officer