Item 1. Description of Business
Incorporated by reference, Annual Report to Shareholders for the year ended December 31, 1994, pages 19,30,31,59 and 60.
Insurance Regulation. Like other insurance companies, the Registrant's subsidiaries are subject to regulation and supervision by the Florida Insurance Department, as well as other insurance departments of each jurisdiction in which they are licensed to do business. These supervisory agencies have broad administrative powers relating to the granting and revocation of licenses to transact business, the licensing of agents, the approval of policy forms, reserve requirements and the form and content of required financial statements. As to its investments, each of the Registrant's insurance subsidiaries must meet the standards and tests established by National Association of Insurance Commissioners(NAIC)and, in particular, the investment laws and regulations of the Florida Insurance Department. The insurance companies are also subject to laws in most states that require solvent insurance companies to pay guaranty fund assessments to protect the interests of policyholders of insolvent insurance companies.
In December, 1991, the NAIC adopted two new reserve requirements (the Asset Valuation Reserve or "AVR" and the Interest Maintenance Reserve or "IMR") to replace the former Mandatory Securities Valuation Reserve or "MSVR." These reserves are generally required by state insurance regulatory authorities to be established as a liability on a life insurer's statutory financial statements beginning with the 1992 annual statement, but do not affect financial state- ments of the Registrant prepared in accordance with generally accepted accounting principles. AVR establishes a statutory reserve for mortgage loans and investments in real estate, as well as for the types of investments (i.e., fixed maturities and common and preferred stock) that have been subject to the MSVR. AVR generally captures all realized and unrealized gains and losses on such assets, other than those resulting from changes in interest rates. IMR captures the net gains that are realized upon the sale of fixed income securities (bonds, preferred stocks, mortgage-backed securities and mortgage loans) and that result from changes in the overall level of interest rates, and amortizes these net realized gains into income over the remaining life of each investment sold, thus limiting the ability of an insurer to enhance statutory surplus by taking gains on fixed income securities. The implementation of the IMR and AVR has not had a material impact on the Registrant's life insurance subsidiary's surplus nor on its ability to pay dividends to the Registrant. In recent years, the NAIC has approved several regulatory initiatives designed to decrease the risk of insolvency of insurance companies in general. These initiatives include the implementation of a risk-based capital formula for determining adequate levels of capital and surplus and further restrictions on an insurance company's ability to pay dividends to its shareholders. Florida has adopted the risk-based capital requirements and has recently revised its dividend limitation policy.
Under NAIC's risk-based capital (RBC)initiatives, life insurance companies must calculate and report information under a risk-based capital formula, beginning with their year-end 1993 statutory financial statements. (Property/Casualty companies must implement a different risk-based capital formula in their 1994 year-end statutory filings). This RBC information is intended to permit insurance regulators to identify and require remedial action for inadequately capitalized insurance companies. The NAIC initiatives provide for four levels of potential involvement by state regulators for inadequately capitalized insurance companies, ranging from regulatory control
Item 1. Description of Business (Continued)
of the insurance company to a requirement for the insurance company to submit a plan to improve its capital. The life insurance subsidiary's adjusted capital exceeds the authorized control level risk-based capital by approximately $90 million. Holdings in common stock require considerably more risk-based capital than had similar monies been invested in bonds. However, investment decisions are driven principally by long-term economic considerations and not altered to produce more attractive risk-based capital results. The subsidiary believes that over the long-term, the total return on equities outperforms that on debt security investments. It sells options against select holdings in the equity portfolio to generate realized investment gains and further enhance current yield and total return. Such net gains totaled $3.3 million in 1994. The life insurance subsidiary's required RBC includes amounts related to the property/casualty subsidiaries.
Another NAIC Model Act provision limits dividends that may be paid in any calendar year without regulatory approval to the lesser of (i) 10% of the insurer's statutory surplus at the prior year-end, or (ii) the statutory net gain from operations of the insurer (excluding realized capital gains and losses) for the prior calendar year. The NAIC has determined that it will not grant accreditation to any state insurance regulatory authority in a state that has not enacted statutes "substantially similar" to the NAIC Model Act regulating the payment of dividends by insurers. Under current Florida law, without prior approval from the Florida Commissioner of Insurance, the maximum allowable dividend in 1995 is $9.9 million.
In accordance with the rules and practices of the NAIC and in accordance with state law, every insurance company is examined generally once each three years by examiners from its state of domicile and from several of the other states where it is licensed to do business. The most recent examinations for all the Registrant's insurance subsidiaries were for the year ending December 31, 1992. Also in accordance with regulations, the insurance subsidiaries statutory results are annually audited by independent certified public accountants.
Item 2.
Item 2. Properties
Incorporated by reference, Annual Report to Shareholders for the year ended December 31, 1994, page 19.
Item 3.
Item 3. Legal Proceedings
Incorporated by reference, Annual Report to Shareholders for the year ended December 31, 1994, pages 57-58. With respect to the Alabama verdict discussed therein, the Registrant was notified on March 28, 1995 that its petition to the Alabama Supreme Court to eliminate of further reduce this verdict has been denied. The Registrant is evaluating other options for appeal.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
No reportable events
PART II
Item 5.
Item 5. Market for the Registrant's Common Stock and Related Security 	Holder Matters
Incorporated by reference, Annual Report to Shareholders for the year ended December 31, 1994, page 20.
The Registrant has been informed that holders of more than 90% of the voting stock of the Registrant have entered into an Agreement (the "No Transfer
Item 5. Market for the Registrant's Common Stock and Related Security 	Holder Matters (Continued)
Agreement") prohibiting the parties thereto from transferring shares of voting stock held by them except under certain circumstances. The excepted transfers include: (i) transfers pursuant to an offer which has been approved or recommended by the Board of Directors of the Registrant, (ii) transfers pursuant to the written consent of holders of a majority of the shares of voting stock subject to the No Transfer Agreement and, (iii) transfers to the Registrant pursuant to the Exchange Agreement referred to in Item 12. The No Transfer Agreement has an initial term ending on November 10, 1996, renewable for two additional five-year terms by vote of the holders of a majority of the voting stock subject thereto prior to the expiration of each successive term.
The restrictions on transfer of voting stock imposed by the No Transfer Agreement are in addition to, and not in lieu of, restrictions on such transfers imposed by the Articles of Incorporation of the Registrant.
Item 6.
Item 6. Selected Financial Data
Incorporated by reference, Annual Report to Shareholders for the year ended December 31, 1994, pages 25-26.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and 	 Results of Operations
Incorporated by reference, Annual Report to Shareholders for the year ended December 31, 1994, pages 27-35.
Item 8.
Item 8. Financial Statements and Supplementary Data
The report of independent auditors and the consolidated financial statements included on pages 37-61 of the Annual Report to Shareholders for the year ended December 31, 1994 are incorporated by reference.
Item 9.
Item 9. Changes in and Disagreements on Accounting and Financial Disclosure 			 No reportable events
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
The directors of the Registrant and the year originally elected are:
Wilford C. Lyon, Jr.* 1980 Kendall G. Bryan* 1982 	 Jacob F. Bryan, IV* 1980 Carter B. Bryan 1984
Boyd E. Lyon, Sr.* 1980 William G. Howard 1993 	 G. Howard Bryan 1980 George M. Baldwin 1980 	 Patricia H. Doane 1992 Lucy B. Gooding 1980 	 Michael C. Lyon 1991 		 *Executive officer of the Registrant
Item 10. Directors and Executive Officers of the Registrant (Continued)
The annual terms of all directors will expire April 12, 1995. Carter B. Bryan, age 50, is employed by the Registrant's subsidiary as a territorial manager of insurance operations. G. Howard Bryan and Patricia H. Doane, ages 80 and 59, respectively, are retired vice presidents of the Registrant's principal subsidiary and are not otherwise employed. George M. Baldwin and Lucy B. Gooding, ages 79 and 92, respectively, are not otherwise employed. Michael C. Lyon and William G. Howard are 44 and 43, and are vice presidents of the principal subsidiary of the Registrant. See below for information regarding the positions and offices of directors who are executive officers of the Registrant and for family relationships between such directors and officers.
The names, ages and positions of the executive officers of the Registrant as of February 8, 1995, are listed below. The principal business experience during the past five years for each person listed has been as an officer of the Registrant.
Name Age Position and Business Experience
Wilford C. Lyon, Jr. 59 Chairman of the Board of Directors and 					 Chief Executive Officer - 1984
Jacob F. Bryan, IV 51 President - 1984
Boyd E. Lyon, Sr. 55 Vice President, Treasurer and Chief 					 Financial Officer - 1984
Kendall G. Bryan 48 Vice President, Secretary and Chief 					 Operating Officer - 1984
Guy Marvin III 54 Assistant Secretary and General 					 Counsel - 1980
David A. Skup 42 Vice President and Internal Auditor -
Each officer of the Registrant is elected at the annual meeting of the Board of Directors and holds office until the next annual meeting (to be held in 1995 on April 12).
Wilford C. Lyon, Jr. and Boyd E. Lyon, Sr. are brothers, and are also cousins of Michael C. Lyon. Jacob F. Bryan, IV, Kendall G. Bryan and Carter B. Bryan are brothers, and nephews of G. Howard Bryan. Patricia Howard Doane and William G. Howard are cousins.
Section 16(a) of the Securities Exchange Act of 1934 requires the Registrant's directors and executive officers, and persons who own more than 10% of a registered class of the Registrant's equity securities, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Registrant. Officers, directors and greater than 10% shareholders are required by SEC regulation to furnish the Registrant with copies of all Section 16(a) forms they file.
To the Registrant's knowledge, based solely on review of the copies of reports furnished to the Registrant and written representations that no other reports were required, during the year ended December 31, 1994 all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% beneficial owners were complied with.
Item 11.
Item 11. Executive Compensation
(a)(b)(2)(i)(ii)(iii) The following table provides information concerning the annual compensation for the Registrant's Chief Executive Officer (CEO) and the four most highly compensated executive officers other than the CEO as of December 31, 1994.
			 Summary Compensation Table ---------------------------------------------------------------------------- 								 Annual Compensation 							 ------------------------------- Name and Principal Other Annual Position Year Salary Bonus Compensation Wilford C. Lyon, Jr. 1994 369,409 0 0 Chairman of the Board & 1993 345,748 0 0 Chief Executive Officer 1992 364,922 0 0
Jacob F. Bryan IV 1994 315,060 0 0 President 1993 297,151 0 0 Director 1992 309,481 0 0
Boyd E. Lyon, Sr. 1994 254,928 0 0 Vice President 1993 240,977 0 0 Treasurer & Director 1992 249,668 0 0
Kendall G. Bryan 1994 240,348 0 0 Vice President 1993 229,054 0 0 Secretary & Director 1992 244,959 0 0
Guy Marvin, III 1994 173,971 0 0 Assistant Secretary and 1993 162,906 0 0 General Counsel 1992 176,298 0 0
	 		 Summary Compensation Table (continued) -----------------------------------------------------------------------------
						 Long-Term Compensation 				 ---------------------------------------- 					 Restricted All Name and Principal Stock Options LTIP Other Position Year Awards SAR's Payouts Compensation
Wilford C. Lyon, Jr. 1994 0 0 0 27,912 Chairman of the Board & 1993 0 0 0 27,535 Chief Executive Officer 1992 0 0 0 27,134
Jacob F. Bryan IV 1994 0 0 0 19,612 President 1993 0 0 0 19,365 Director 1992 0 0 0 19,137
Boyd E. Lyon, Sr. 1994 0 0 0 30,473 Vice President 1993 0 0 0 29,991 Treasurer & Director 1992 0 0 0 29,541
Kendall G. Bryan 1994 0 0 0 16,019 Vice President 1993 0 0 0 15,872 Secretary & Director 1992 0 0 0 15,754
Guy Marvin, III 1994 0 0 0 9,822 Assistant Secretary and 1993 0 0 0 9,736 General Counsel 1992 0 0 0 9,655
Amounts reported as "All Other Compensation" represent premiums paid by the Registrant for insurance policies issued in connection with a Deferred Death Benefit Plan for Key Personnel.
(f)(1)(i) The following table shows estimated annual benefits payable, determined primarily by final compensation and years of service, pursuant to the Registrant's defined benefit plan as well as its nonqualified, unfunded benefit plan. This latter plan provides benefits to eligible executives who would otherwise be entitled to reduced retirement and other benefits under the Company's existing plans due to the imposition of the Internal Revenue Code limitations on contributions, benefits and compensation.
			 Pension Plan Table
					 Years of Service 		 ---------------------------------------------- Remuneration 15 20 25 30 35 $125,000 $41,138 $54,850 $ 68,563 $ 82,275 $ 95,988 150,000 49,950 66,600 83,250 99,900 116,550 175,000 58,763 78,350 97,938 117,525 137,113 200,000 67,575 90,100 112,625 135,150 157,675 225,000 76,388 101,850 127,313 152,775 178,238 250,000 85,200 113,600 142,000 170,400 198,800 300,000 102,825 137,100 171,375 205,650 239,925 400,000 138,075 184,100 230,125 176,150 322,175 450,000 155,700 207,600 259,500 311,400 363,300 500,000 173,325 231,100 288,875 346,650 404,425
Item 11. Executive Compensation (Continued)
(ii)(A)The Pension Plan Table uses the average of an individuals highest consecutive five years of earnings as a basis upon which to calculate benefits. The compensation covered by the plans includes all amounts reported in the above Summary Compensation Table under Annual Compensation.
(B)The years of service for the named executive officers are: Wilford C. Lyon, Jr., 36; Jacob F. Bryan IV, 28; Boyd E. Lyon, Sr., 33; Kendall G. Bryan, 25; and Guy Marvin, III, 15.
(C)Under the plan, eligible employees are entitled to annual pension benefits beginning at normal retirement age (65 to 67 depending on participants' year of birth) equal to the sum of: (1) 1.6% of average earnings of the highest five years multiplied by number of years of service not to exceed 35 years; and (2) .75% of average earnings in excess of Social Security wages multiplied by number of years of service, not to exceed 35 years.
(g)All directors who are not employees of the Registrant or one of its subsidiaries receive $1,000 for each board meeting that the director attends, $250 for each telephone meeting the director participates in and $250 for each committee meeting of the Board that the non-employee director attends.
(j)(2)The Registrant uses the Hay point-factor job evaluation system which applies to all employees, including the Chief Executive Officer and executive officers. Each year the CEO selects members of the Board of Directors to evaluate his performance. During the last fiscal year, these members were Jacob F. Bryan, IV, William G. Howard and Kendall G. Bryan. Overall increases, which are tied to performance evaluations and the evaluation system, are approved by the full Board. The CEO evaluates all other named executive officers.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a)The principal holders of voting securities (Voting Common Stock, Par Value $1.00) of the Registrant as of February 8, 1995 are:
Name and Address of Amount and Nature of Percent Beneficial Owner Beneficial Ownership of Class
George M. Baldwin 1,033,288(1) 18.1% 2929 Murray Road Orange Park, Florida
James L. Baldwin 1,033,088(1) 18.1 2753 Haver Hill Ct. Clearwater, FL
Frederick E. Williams 1,032,888(1) 18.1 109 North Street Neptune Beach, Florida 	and John G. Grimsley 50 North Laura Street Jacksonville, FL
Item 12. Security Ownership of Certain Beneficial Owners and Management 	 (Continued)
Name and Address of Amount and Nature of Percent Beneficial Owner Beneficial Ownership of Class
Lucy B. Gooding 981,612 17.2 2970 St. Johns Avenue Jacksonville, Florida
Jacob F. Bryan IV 865,598(2) 15.1 5249 Yacht Club Road Jacksonville, Florida
Julia Olive Craig Brooke 834,516(2) 14.6 467 Ortega Blvd. Jacksonville, Florida
G. Howard Bryan 829,612(2) 14.5 1596 Lancaster Terrace Jacksonville, Florida
Boyd E. Lyon, Sr. 351,022(4) 6.1 129 Middleton Place Ponte Vedra Beach, Florida
(b)The following table shows as to each class of equity securities of the Registrant, the number of shares owned beneficially, directly or indirectly, by each director and named executive officers, and by all directors and officers of the Registrant as a group as of February 8, 1995. In some instances more than one beneficial owner is listed for the same securities. Shares held beneficially by spouses or relatives of such officers and directors may be included.
				 Amount and Nature of 				 Beneficial Ownership and 				 Title of Class Percent of Class Name of Common Common Beneficial Owner Voting Nonvoting Voting Nonvoting 				 George M. Baldwin 1,033,288(1) 18.1%
Lucy B. Gooding 981,612 1,222,340 17.2 16.4
Jacob F. Bryan IV 865,598(2) 1,075,594(3) 15.1 14.5
G. Howard Bryan 829,612(2) 1,032,396(3) 14.5 13.9
Boyd E. Lyon, Sr. 351,022(4) 6.1
Wilford C. Lyon, Jr. 176,357(5) 3.1
Patricia H. Doane 92,102 620 1.6
Michael C. Lyon 49,531 100 .9
Carter B. Bryan 36,400 32,642 .6 .4
Kendall G. Bryan 34,400 13,877 .6 .2
Item 12. Security Ownership of Certain Beneficial Owners and Management 	 (Continued)
			 Amount and Nature of 			 	 Beneficial Ownership and 				 Title of Class Percent of Class Name of Common Common Beneficial Owner Voting Nonvoting Voting Nonvoting
William G. Howard 2,474
David A. Skup 462
All directors and officers as a group 3,526,372 2,371,415 61.7 31.9
(1) Includes 1,032,888 shares held of record by a trust under the will of Grace D. Coburn, deceased. Frederick E. Williams and John G. Grimsley are trustees. George M. Baldwin and James L. Baldwin are beneficiaries of the trust.
(2) Includes all the shares of three trusts aggregating 812,412 shares of voting common stock of which Jacob F. Bryan IV, G. Howard Bryan and Julia Olive Craig Brooke are beneficiaries and/or trustees.
(3) Includes all the shares of three trusts aggregating 1,006,616 shares of nonvoting common stock of which Jacob F. Bryan IV, G. Howard Bryan and Julia Olive Craig Brooke are beneficiaries and/or trustees.
(4) Includes all the shares of three trusts aggregating 113,600 shares of voting common stock of which Boyd E. Lyon, Sr. is a trustee, and two trusts aggregating 101,760 shares of voting common stock held by the Registrant's retirement plans of which Boyd E. Lyon, Sr. is a trustee.
(5) Includes all the shares of three trusts aggregating 113,600 shares of voting common stock of which Wilford C. Lyon, Jr. is a trustee.
The Registrant has entered into "Exchange Agreements" with holders of more than 90% of the outstanding shares of voting common stock of the Registrant ("Voting Stock") pursuant to which such holders may, at any time on or prior to December 31, 2006, exchange shares of voting stock for an equal number of shares of nonvoting common stock of the Registrant without payment of any additional consideration. All of the principal shareholders, officers and directors listed above are parties to these agreements.
Item 13.
Item 13. Certain Relationships and Related Transactions
(a)The Registrant's subsidiary, The Independent Life and Accident Insurance Company ("Independent Life"), employs Carter B. Bryan as a manager of its general agency insurance operations, and in 1994 compensated Mr. Bryan $40,387 in salaries associated with his position. In addition, Mr. Bryan received commissions on personal insurance sales and overwrites from the sales of other agents he manages. Much of these operations involved the sale of Independent Life's small employer group insurance products, a line of business Independent Life withdrew from effective June 30, 1994. Independent Marketing Group, Inc. and Independent Life have worked closely to find replacement coverage for all terminated policyholders with another insurance carrier.
Item 13. Certain Relationships and Related Transactions (Continued)
(b)The commissions and overwrites described above are paid to Independent Marketing Group, Inc., an entity owned by Mr. Bryan and his wife, and totaled $84,202 in 1994. Independent Marketing Group, Inc., markets products of Independent Life and other insurance companies. Independent Life supplies office space to Mr. Bryan, which is used both by Mr. Bryan in his employment as manager of its general agency insurance operations and by Independent Marketing Group, Inc.
Part IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) Financial Statements
Consolidated Balance Sheets, December 31, 1994 and 1993, incorporated by reference, Annual Report to Shareholders for the year ended December 31, 1994, pages 37-38.
Consolidated Statements of Operations for years ended December 31, 1994, 1993 and 1992, incorporated by reference, Annual Report to Shareholders for the year ended December 31, 1994, page 39.
Consolidated Statements of Cash Flows for years ended December 31, 1994, 1993 and 1992, incorporated by reference, Annual Report to Shareholders for year ended December 31, 1994, page 40.
Consolidated Statements of Shareholders' Equity for years ended December 31, 1994, 1993 and 1992, incorporated by reference, Annual Report to Shareholders for the year ended December 31, 1994, page 41.
Notes to Consolidated Financial Statements for the three years ended December 31, 1994, incorporated by reference, Annual Report to Shareholders for year ended December 31, 1994, pages 42-60.
(2) Financial Statement Schedules
Consolidated Summary of Investments - Other Than Investments in Affiliates (Schedule I), incorporated by reference, Annual Report to Shareholders for the year ended December 31, 1994, page 48.
Condensed Financial Information of the Registrant (Schedule II)
Supplementary Insurance Information (Schedule III)
Reinsurance (Schedule IV)
All other financial statements and schedules are omitted because of the absence of conditions under which they are required or because the required information is included elsewhere herein.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 	 (Continued)
(3) Exhibits
(3) Articles of incorporation currently in effect incorporated by reference as filed as an exhibit with the Registrants 1989 Form 10-K under Item 14(3)(c) and by-laws of the Registrant currently in effect incorporated by reference as filed December 20, 1990, with report Form 8-K.
(4) Instruments defining rights of security holders incorporated by reference as filed as an exhibit with the Registrant's Registration Statement No. 2-69530 on Form S-14 which became effective November 20, 1980,and as included or amended in articles of incorporation.
(10)Material contracts -
(1)Deferred Death Benefit Plan for Key Personnel of the Registrant and its subsidiaries incorporated by reference as previously filed as an exhibit with the Registrant's Form 10-K, December 31, 1981.
(2)Medical Reimbursement Plan covering benefits of certain employees of the Registrant or its affiliates incorporated by reference as previously filed as an exhibit with the Registrant's Form 10-K, December 31, 1990.
(3)Independent Life Invest Plan - 401(K) incorporated by reference as previously filed with the Registrant's Form S-8, Registration No. 33-35785.
(5)The Registrant's Exchange Agreement incorporated by reference as previously filed as an exhibit with the Registrant's Form 10-K, December 31, 1990.
(13)Portions of the Annual Report to Shareholders for the year ended December 31, 1994.
(21)The Registrant's subsidiaries include the following companies and their wholly owned subsidiaries, all of which are incorporated under the laws of the state of Florida:
	(A)The Independent Life and Accident Insurance Company 	(B)Independent Fire Insurance Company 	(C)Independent Fire Insurance Company of Florida 	(D)Thomas Jefferson Insurance Company 	(E)Independent Investment Advisory Services, Inc. 	(F)Independent Real Estate Management Corporation 	(G)Independent Property & Casualty Insurance Company
(23)Consent of Independent Certified Public Accountants -
(27)Financial Data Schedule filed electronically
(b) There were no reports on Form 8-K filed for the three months ended December 31, 1994.
(c) The Registrant previously filed exhibits listed above in Item 14 (a)(3)- (3),(4) and (10).
(d) The following pages include the Financial Statement Schedules of the Registrant required by Regulation S-X which are excluded from the Annual Report to shareholders.
							 SCHEDULE II 								 		 INDEPENDENT INSURANCE GROUP, INC. 	 CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
			 BALANCE SHEETS 		 DECEMBER 31, 1994 AND 1993 			 (000 OMITTED) 								 								 			 	ASSETS
			 			 1994 1993 								 Cash $ 69 $ 556 								 Short-term investments 1,540 2,497 								 Investment in subsidiaries - continuing operations 257,233 307,196 								 Real estate - net 6,471 6,899 								 Income taxes receivable (payable) 5,906 (9,522) 								 Other assets 3,347 4,044 						 ----------- ----------- 	 Total $ 274,566 $ 311,670 						 =========== ========== 								 								 		 LIABILITIES AND SHAREHOLDERS' EQUITY 								 Notes payable $ 6,000 $ 6,200 								 Due to (from) subsidiaries - federal income taxes 1,308 (11,052) 						 ----------- ----------- Total liabilities 7,308 (4,252) 						 ----------- ----------- Shareholders' equity: Voting common stock 5,725 6,100 Nonvoting common stock 8,981 8,606 Additional paid-in capital 6,378 6,378 Net unrealized gain (loss) on equity securities held by subsidiaries (31,222) 25,393 Retained earnings 301,947 293,996 Treasury stock - at cost - nonvoting common stock, 1,542 shares (24,551) (24,551) 					 ----------- ---------- Total shareholders' equity 267,258 315,922 						 ----------- ---------- 	Total $ 274,566 $ 311,670 						 =========== ========== 								 								 								 See notes to condensed finanacial statements 								
					 SCHEDULE II
								 			INDEPENDENT INSURANCE GROUP, INC. 		CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT 						 		 STATEMENTS OF INCOME AND RETAINED EARNINGS 	 FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992 				 (000 OMITTED) 								 					 1994 1993 1992 Revenues: Interest income $ 116 $ 352 $ 94 Other income 1,216 1,435 2,185 Realized gains 29 - - 					 ------- ------- --------- 	Total 1,361 1,787 2,279 					 ------- ------- --------- Costs and Expenses: Interest expense 372 330 1,019 Professional services 166 293 133 Real estate expenses 352 350 381 Taxes, licenses and fees 738 (51) 183 Other expenses 335 422 568 					 ------- ------- -------- 	Total 1,963 1,344 2,284 					 ------- ------- -------- Income (loss) before income taxes and equity in income of consolidated subsidiaries (602) 443 (5) 					 Provision (credit) for income taxes (210) 123 (1) 					 ------- ------- -------- 								 Income (loss) before equity in income of consolidated subsidiaries (392) 320 (4) 					 Equity in income (loss) of consolidated subsidiaries- continuing operations (including $7,850, $2,150 and $7,600 of dividends received from subsidiaries) 11,502 (43,885) (16,990) 					 Equity in income of subsidiaries- discontinued operations (including $0, $173 and $600 of dividends received) - 465 1,906 								 Gain on disposition of discontinued operations - 6,904 - 								 Cumulative effect of change in accounting principles - (66) - 					 ------- -------- --------- Net income (loss) 11,110 (36,262) (15,088) 					 Retained Earnings, Beginning of Year 293,996 333,417 360,089 					 Less: Dividends to shareholders $.24, $.24 and $.88 per share) 3,159 3,159 11,584 					--------- ---------- ---------- Retained earnings, end of year $ 301,947 $ 293,996 $ 333,417 					========= ========== ========== 								 								 See notes to condensed financial statements 								
								 								 								 								 								 	 						 SCHEDULE II 									
			 STATEMENTS OF CASH FLOWS 		FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992 				 (000 OMITTED) 									 						 1994 1993 1992 									 Operating Activities: 									 Net income (loss) $ 11,110 $ (36,262) $ (15,088) 								 Adjustments to reconcile net income to net cash provided by operating activities: Change in - Liability for income taxes (15,428) (2,545) 20,852 Other assets and other liabilities 789 (4,446) 305 Due to subsidiaries for income taxes 12,360 (3,260) (10,662) Equity in (income) loss of consolidated subsidiaries- continuing operations (11,502) 43,885 16,990 Equity in (income) of subsidiaries discontinued operations - (465) (1,906) Gain from discontinued operations (net of taxes) - (6,904) - Dividends received from consolidated subsidiaries - continuing operations 7,850 2,150 7,600 Dividends received from subsidiaries - discontinued operations - 173 600 Realized gains (29) - - Depreciation of property and equipment 336 378 340 Cumulative effect of change in 	accounting principles - 66 - 									 Net cash provided (used) by ---------- --------- --------- operating activities 5,486 (7,230) 19,031 					 ---------- --------- --------- 									 Investing Activities: 									 Sales, maturities or payments from short-term investments 986 - - Purchase of short-term investments - (2,127) (9) Cash from sale of discontinued operations - 22,573 - Investment in subsidiary (3,000) (8,500) (2,150) 									 Net cash provided (used) by ---------- --------- --------- investing activities (2,014) 11,946 (2,159) 					 ---------- --------- --------- 									 Financing Activities: 									 Reductions in mortgage loans payable - - (8,135) Additions to notes payable 10,000 4,000 13,092 Reductions in notes payable (10,800) (5,200) (10,018) Dividends to shareholders (3,159) (3,159) (11,584) 					 ---------- --------- --------- Net cash used by financing activities (3,959) (4,359) (16,645) 					 ---------- --------- --------- Increase (Decrease) in Cash (487) 357 227 									 Cash, Beginning of Year 556 199 (28) 					 ---------- --------- -------- Cash, End of Year $ 69 $ 556 $ 199 					 ========== ========= ========= 									 									 									 See notes to condensed financial statements. 									
									 NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 1: The accompanying condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto of Independent Insurance Group, Inc. and its wholly owned subsidiaries.
Note 2: Notes payable at December 31 consists of the following (000 omitted):
					 1994 1993
6.250% Bank term loan $3,000 $3,800 7.063% 182-day note 1,500 - 7.688% 365-day note 1,500 - 4.000% 180-day note - 3,000 ------ ------ 					 $6,000 $6,800 				 ====== ====== The Company also has available another $24,000,000 short-term line of credit with one bank which can be terminated at any time by the bank. As of December 31, 1994, $1,500,000 of this line of credit was utilized.
Note 3: In late 1992, a jury returned a verdict in the amount of $6,200,000 in a policy-related lawsuit against the Registrant's principal subsidiary, Independent Life. This verdict was appealed to the Alabama Supreme Court which reduced the verdict to $4,200,000. The Company further petitioned the Alabama Supreme Court in an attempt to eliminate or further reduce this verdict. On March 28, 1995 the Registrant was notified that its petition has been denied. The Company has continued to conservatively reserve for this verdict in its 1994 financial statements
							 SCHEDULE III 							 	 INDEPENDENT INSURANCE GROUP, INC. AND SUBSIDIARIES 		 SUPPLEMENTARY INSURANCE INFORMATION 	 FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992 				 (000 OMITTED) 							 							 	 COLUMN A COLUMN B COLUMN C COLUMN D 							 					 	 Policy 			 Deferred Reserves 				 Policy Losses, Claims Unearned 	 Segment Acq. Costs & Loss Expenses Premiums 							 Year Ended December 31, 1994 							 Life $161,988 $753,962 $2,194 Property and casualty 3,547 19,472 21,258 Accident and health 29,518 64,567 - Other - - - 				 -------- -------- ------- Total $195,053 $838,001 $23,452 				 ======== ======== ======= Year Ended December 31, 1993 							 Life $159,842 $754,960 $2,457 Property and casualty 3,491 40,478 39,387 Accident and health 33,387 64,524 - Other - - - 				 -------- -------- ------- Total $196,720 $859,962 $41,844 				 ======== ======== ======= Year Ended December 31, 1992 							 Life $157,616 $752,875 $4,236 Property and casualty 16,062 72,129 75,369 Accident and health 33,750 71,994 - Other - - - 				 -------- -------- ------- Total $207,428 $896,998 $79,605 				 ======== ======== ======= 							 							 							 							 							 	 COLUMN A COLUMN E COLUMN F COLUMN G 							 				 Other Policy 			 Claims and Net 			 	Benefits Premium Investment 	 Segment Payable Revenue Income* 							 Year Ended December 31, 1994 							 Life - $167,385 $59,909 Property and casualty - 45,677 4,222 Accident and health - 58,520 4,547 Other - (160) 			 -------- -------- ------- Total - $271,582 $68,518 			 ======== ======== ======= Year Ended December 31, 1993 							 Life - $177,102 $62,063 Property and casualty - 100,136 6,422 Accident and health - 94,441 5,142 Other - 79 			 -------- -------- ------- Total - $371,679 $73,706 			 ======== ======== ======= Year Ended December 31, 1992 							 Life - $174,100 $64,108 Property and casualty - 151,482 12,380 Accident and health - 101,426 5,550 Other - 30 			 -------- -------- ------- Total - $427,008 $82,068 			 ======== ======== ======= 							 							 							 							 	 COLUMN A COLUMN H COLUMN I COLUMN J
		 		Benefits, 				 Claims, Amortization 				 Losses of Deferred 				 & Policy Other 			 Settlement Acquisition Operating 	 Segment Expenses Costs Expenses# 							 Year Ended December 31, 1994 							 Life $88,911 $27,134 $110,617 Property and casualty 26,384 7,806 15,517 Accident and health 16,703 9,176 33,816 Other - - 2,927 				 -------- ------- -------- Total $131,998 $44,116 $162,877 				 ======== ======= ======== Year Ended December 31, 1993 							 Life $99,385 $24,831 $105,724 Property and casualty 77,282 19,724 53,338 Accident and health 37,161 5,926 49,030 Other - - 2,609 				 -------- ------- -------- Total $213,828 $50,481 $210,701 				 ======== ======= ======== Year Ended December 31, 1992 							 Life $102,014 $23,235 $104,027 Property and casualty 150,962 20,944 52,548 Accident and health 45,469 5,864 56,390 Other - - 1,735 				 -------- ------- -------- Total $298,445 $50,043 $214,700 				 ======== ======= ======== 							 							 							 							 	 COLUMN A COLUMN K 							 							 							 		 		Premiums 	 Segment Written 							 Year Ended December 31, 1994 							 Life Property and casualty $37,929 Accident and health 58,520 Other 							 Total 							 Year Ended December 31, 1993 							 Life Property and casualty $52,764 Accident and health 94,441 Other 							 Total 							 Year Ended December 31, 1992 							 Life Property and casualty $132,370 Accident and health 101,426 Other 							 Total
* The allocation of net investment income to life and accident and health is based on the ratio of mean liabilities (primarily, policy reserves and claims payable) attributrd to life and to accident and health to total mean liabilities. Property and casualty net investment income is directly allocated. Other net investment income is that of noninsurance subsidiaries.
# Expenses not directly identifiable to any line of business are allocated on bases considered reasonable under the circumstances.
							 SCHEDULE IV
		INDEPENDENT INSURANCE GROUP, INC. AND SUBSIDIARIES 		 		 REINSURANCE 	 FOR THE YEARS ENDED DECEMBER 31, 1994 1993 AND 1992 	 			(OOO OMITTED) 												 												 	 COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F 												 						 Assumed Percentage 					 Ceded to From of Amount 			 Gross Other Other Net Assumed 			 Amount Companies Companies Amount to Net 												 Year Ended December 31, 1994 												 Life insurance in force* $ 7,320 $ 378 $ 1 $ 6,943 .01% 			 ========= ======== ======= ========= Insurance Premiums: Life $ 176,289 $ 8,899 $ (5) $ 167,385 - Property and casualty 77,137 32,360 900 45,677 .20% Accident and health 65,399 6,878 (1) 58,520 - 			 --------- -------- ------- --------- Total $ 318,825 $ 48,137 $ 894 $ 271,582 .33% 			 ========= ======== ======= ========= 												 Year Ended December 31, 1993 												 Life insurance in force* $ 7,733 $ 237 $ 2 $ 7,498 .03% 			 ========= ======= ======= ========= Insurance Premiums: Life $ 179,921 $ 2,841 $ 22 $ 177,102 (.01 )% Property and casualty 182,309 82,945 772 100,136 .77 % Accident and health 95,533 1,101 9 94,441 (.01)% 			 --------- -------- ------- --------- Total $ 457,763 $ 86,887 $ 803 $ 371,679 .22 % 			 ========= ======== ======= ========= 												 Year Ended December 31, 1992 												 Life insurance in force* $ 7,719 $ 247 $ 4 $ 7,476 .05 % 			 ========== ======== ======= ========= Insurance Premiums: Life $ 176,418 $ 2,318 $ - $ 174,100 - Property and casualty 211,994 61,627 1,115 151,482 .74 % Accident and health 102,187 761 - 101,426 - 			 ---------- -------- ------- --------- Total $ 490,599 $ 64,706 $ 1,115 $ 427,008 .25 % 			 ========== ======== ======= ========= * In Millions 												 												
	 							Exhibit 24
	Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form 10-K) of Independent Insurance Group, Inc. of our report dated March 1, 1995, included in the 1994 Annual Report to Shareholders of Independent Insurance Group, Inc.
Our audits also included the financial statement schedules of Independent Insurance Group, Inc. listed in Item 14(a). These schedules are the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.
We also consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-35785) pertaining to the Independent Life Invest Plan of our report dated March 1, 1995, with respect to the consolidated financial statements incorporated herein by reference and our report included in the preceding paragraph with respect to the financial statement schedules included in the Annual Report (Form 10-K) of Independent Insurance Group, Inc.
Ernst & Young LLP
Jacksonville, Florida March 29, 1995
				 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.
(Registrant) INDEPENDENT INSURANCE GROUP, INC.
BY March 29, 1995 Wilford C. Lyon, Jr., Chairman of the Board and Chief Executive Officer
BY March 29, 1995 Jacob F. Bryan, IV, President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
BY March 29, 1995 Boyd E. Lyon, Sr., Director, Treasurer (Chief Financial and Accounting Officer)
BY March 29, 1995 Kendall G. Bryan, Director
BY March 29, 1995 William G. Howard, Director
BY March 29, 1995 Michael C. Lyon, Director