ProAssurance Corp. 8-K
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): January 3,
2007
ProAssurance
Corporation
(Exact
name of registrant as specified in its charter)
|
Delaware
|
001-16533
|
63-1261433
|
|
(State
of Incorporation)
|
(Commission
File No.)
|
|
|
100
Brookwood Place, Birmingham, Alabama
|
35209
|
|
(Address
of Principal Executive Office)
|
(Zip
code)
|
Registrant’s
telephone number, including area code: (205)
877-4400
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Securities Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR
240.14d-2(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-(c) under the Exchange Act (17CFR
240.13e-(c))
|
Item
7.01 Regulation
FD Disclosure
We
are
furnishing presentation materials, included as Exhibit 99.1 to this report
and
incorporated herein by reference, which we are using in meetings with investors.
This updates information on the renewal of our reinsurance treaty and replaces
a
slide in a presentation we previously provided in a Current Report on Form
8K
filed on November 28, 2006. We are incorporating the November 28, 2006 filing
herein by reference, and notifying investors we will continue to use this
presentation through at least January 31, 2007. We expressly disclaim any
obligation to further update our presentation and caution that it is only
accurate on the date of the latest filing. The inclusion of any data or
statements in this presentation does not signify that the information is
considered material.
Item
8.01 Other
Events
Beginning
in 2006, the daughter of one of our Directors, Robert E, Flowers, M.D. was
employed by Ernst & Young (E&Y), in their Louisville, Kentucky office in
a non-management position within their audit practice. E&Y serves as the
independent audit firm for ProAssurance. We were made aware of her employment
at
the outset and determined that it did not affect the independence of
E&Y.
At
its
meeting in December, 2006, the ProAssurance Audit Committee directed management
to further investigate whether the employment of Dr. Flowers’ daughter,
considering potential promotions and elevation in status, could lead to a future
independence issue for E&Y. Management began its investigation and also
requested that E&Y review the situation.
After
an
in-depth review, E&Y reaffirmed that the current employment of Dr. Flowers’
daughter poses no independence issues from their perspective, since she does
not
provide audit services to ProAssurance. As to future independence issues,
E&Y said their independence would be maintained even if Dr. Flowers’
daughter became a partner, as long as she resided in a city other than the
same
office as the E&Y partner in charge of the ProAssurance audit and did not
become part of the chain of command related to the partner-in-charge of the
ProAssurance audit. The partners in charge of the ProAssurance audit are
currently in Birmingham and Atlanta.
In
connection with the Audit Committee review, ProAssurance also reassessed the
independence of Dr. Flowers and concluded that the employment of his daughter
by
E&Y causes him not to meet the New York Stock Exchange’s (NYSE) independence
criteria. The listing standards of the NYSE state that a Director cannot be
considered independent if a member of the director's immediate family is
employed by the listed company’s independent auditor in an auditing capacity.
There is no test of locality or materiality in the NYSE
regulations.
Upon
reaching this conclusion, we asked the NYSE to review the situation and advise
us if our interpretation was correct, and if so, if a waiver could be granted.
We based our request on the fact that Dr. Flower’s daughter was employed as a
non-management accountant having no contact with the ProAssurance audit and,
in
an office well removed from the offices from which our audit partners are based.
On January 3, 2007 the NYSE advised us that no such waiver is possible under
current listed company standards. We are therefore filing an Interim Written
Affirmation with the NYSE notifying them that Dr. Flowers is no longer
considered an independent director under their guidelines.
Dr.
Flowers has resigned from the Compensation Committee and the Nominating and
Corporate Governance Committee because members of both committees are required
to be independent directors under NYSE corporate governance requirements for
listed companies. As both committees have two other members who are independent
directors, both committees are in compliance with the NYSE corporate governance
rules. In accordance with our By-Laws our board of directors will appoint an
independent director to fill each of the vacancies created by Dr Flowers'
resignation. Until that time, any actions taken by these two committees will
be
subject to ratification by the independent directors on our Board.
Dr.
Flowers will remain on our Board of Directors, where he continues to be a
valuable Board member, drawing on his 30 years of services to the company to
provide valuable insights and direction. Our Board of Directors will continue
to
have a majority of independent directors notwithstanding Dr Flowers change
in
status.
We
regret
that the NYSE restrictions allow no method of appeal or waiver in cases such
as
this where the chance of conflict, real or perceived, is remote. We intend
to
urge the NYSE to consider modifying its listing standards to permit a waiver
and/or an appeals process for situations such as this.
Item
9.01 Financial Statements and Exhibits
We
are
furnishing exhibit 99.1 to this Current Report on Form 8-K in accordance with
item 7.01, Regulation FD Disclosure, and pursuant to Rule 425 of the Securities
and Exchange Commission.
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:
January 4, 2007
| |
|
|
| |
PROASSURANCE
CORPORATION |
|
|
|
| |
By: |
/s/
Edward L. Rand, Jr. |
| |
|
| |
Edward
L. Rand, Jr.
|
| |
Chief
Financial Officer
|