UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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): September 10, 2021

 

Unico American Corporation

(Exact Name of Registrant as Specified in its Charter)

   

Nevada

(State or Other Jurisdiction of Incorporation)

 

000-03978

 

95-2583928

(Commission File Number)

 

(IRS Employer Identification No.)

 

 

 

26050 Mureau Road

 

 

Calabasas, California

 

91302

(Address of Principal Executive Offices)

 

(Zip Code)

 

(818) 591-9800

(Registrant’s Telephone Number, Including Area Code)

 

_______________________________________________ 

(Former name or former address, if changed since last Report.)

 

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 (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol

 

Name of each exchange on which registered

Common Stock, No Par Value

 

UNAM

 

Nasdaq Global Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

On September 10, 2021, Crusader Insurance Company (“Crusader”), a subsidiary of Unico American Corporation (the “Company”), and the California Department of Insurance (“CDI”) entered into an Administrative Supervision Agreement, dated as of September 7, 2021 (the “Supervision Agreement”) at the request of the CDI. The Supervision Agreement was requested by the CDI because of CDI’s expressed concerns regarding the financial stability of Crusader and the potential effects on Crusader and Crusader’s California policyholders of any potential bankruptcy of the Company.

 

The Supervision Agreement among other things, provides for the appointment by CDI of a Special Examiner to provide supervision and regulatory oversight of Crusader. It imposes limitations on Crusader’s ability to take certain actions without the prior written consent of the California Insurance Commissioner (the “Commissioner”), the Special Examiner, or the Special Examiner’s appointed representative. Among the actions that Crusader is prohibited from making without such prior written consent are the following: (i) making payments, engaging in any transaction with or entering into any agreement with, any affiliated or otherwise related person or entity if the cost to Crusader is an individual payment of more than $5,000 or aggregate payments of more than $20,000; (ii) making payments, engaging in any transaction with or entering into any agreement with, any non-affiliated or otherwise unrelated person or entity if the cost to Crusader is an individual payment of more than $5,000 or aggregate payments of more than $20,000; (iii) paying any dividend of any amount; (iv) except as provided in (i) and (ii), making any payments to or on behalf of the Company in connection with any agreement entered into between Crusader and the Company; (v) making any loans to affiliates, officers, directors, shareholders or third parties; (vi) incurring any debt, obligation or liability greater than $5,000; (vii) entering into any new reinsurance contract or treaty or amending any existing reinsurance contract or treaty; (viii) making any material changes in management and essential staffing; (ix) increasing salaries or benefits of officers or directors or making any preferential payment of bonuses or other payments considered legally preferential; and (x) making any other material changes in its normal course of operations, including but not limited to, entering into new lines of business, making major corporate reorganizations, or redomesticating from California. The Supervision Agreement provides that the Special Examiner will meet with Crusader to develop a list of recurring payments under items (i) and (ii) that may not require prior written approval.

 

The Supervision Agreement does not restrict the Company or Crusader from pursuing a sale or restructuring of Crusader, subject to applicable regulatory approvals and requirements. It requires Crusader to immediately notify the Commissioner or the Special Examiner in writing of any adverse corporate events or developments. The Commissioner reserves the right to amend or supplement the conditions and to take further regulatory action, in his sole discretion, as the Commissioner deems necessary and appropriate.

 

The Supervision Agreement will remain in effect until the Commissioner provides written notice to Crusader that the Supervision Agreement is terminated, or until the Supervision Agreement is superseded by an administrative or court order.

 

The foregoing summary of the Supervision Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement, a copy of which is filed as Exhibit 10.1 hereto.

 

Item 8.01. Other Events.

 

The information in Item 1.01 above regarding the entry into the Supervision Agreement is hereby incorporated by reference into this Item 8.01.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits. The following exhibit is being filed herewith:

 

Exhibit Number

 

Description

10.1

 

Administrative Supervision Agreement, dated as of September 7, 2021.

 

 
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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.

 

  UNICO AMERICAN CORPORATION

 

(Registrant)

 

       
Date: September 13, 2021 By: /s/ Renai J. Effarah

 

Name:

Renai J. Effarah

 
  Title: Treasurer and Chief Financial Officer  

 

 
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