[Federal Register Volume 61, Number 82 (Friday, April 26, 1996)]
[Notices]
[Pages 18632-18633]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10316]



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SECURITIES AND EXCHANGE COMMISSION

[File No. 1-10589]


Issuer Delisting; Notice of Application To Withdraw From Listing 
and Registration; (CII Financial, Inc., 7\1/2\% Convertible 
Subordinated Debentures Due 2001)

April 22, 1996.
    CII Financial, Inc. (``Company'') has filed an application with the 
Securities and Exchange Commission (``Commission''), pursuant to 
Section 12(d) of the Securities Exchange Act of 1934 (``Act'') and Rule 
12d2-2(d) promulgated thereunder, to withdraw the above specified 
security (``Security'') from listing and registration on the American 
Stock Exchange, Inc. (``Amex'').
    The reasons alleged in the application for withdrawing the Security 
from listing and registration include the following:
    Pursuant to an Indenture dated September 15, 1991 (the 
``indenture''), the Company issued the Security. The Security was 
originally convertible into the Company's common stock, and both the 
Security and the common stock were listed on the Amex.
    On October 31, 1995, Sierra Health Services, Inc., a Nevada 
corporation (``Sierra''), acting through a wholly-owned subsidiary, 
acquired the Company by a subsidiary merger (the ``Merger'') in which 
the Company became a wholly-owned subsidiary of Sierra. Sierra is a 
public company whose common stock is listed for trading on the New York 
Stock Exchange, Inc. and which is required to file reports under the 
Act. In connection with the Merger, each outstanding share of the 
Company's common stock was converted into 0.37 of a share of Sierra's 
common stock (the ``Exchange Ratio''). In November 1995, the Amex filed 
a Form 25 notifying the SEC that the Amex had removed the Company's 
common stock from listing and registration on the Amex.
    At the effective time of the Merger, the Security ceased being 
convertible into the Company's common stock and became convertible into 
Sierra's common stock. Sierra has not otherwise assumed the Company's 
obligations under the Security and has not guaranteed the payment of 
principal, interest or premium, if any, thereon.
    On March 22, 1996, Securities in the aggregate principal amount of 
$58,600,000 were outstanding and were held of record by fewer than 50 
persons.
    In making the decision to withdraw the Security from listing on the 
Amex,

[[Page 18633]]

the Company has informed the Commission that it considered the direct 
and indirect costs and expenses associated with maintaining the listing 
of the Securities on the Amex and complying with the reporting 
requirements of the Act. The Company also considered the limited number 
of recordholders of the Security, the availability of a market maker 
\1\ for the Security and the fact that the Company no longer has other 
publicly traded equity securities. In addition, the Company considered 
that holders of the Security will benefit to the extent that any cost 
savings realized by delisting improves the credit worthiness of the 
Company.
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    \1\ Bear, Stearns & Co. Inc. has indicated that it will act as a 
market maker for the Security upon the delisting of such Security 
from the Amex. See letter from Stephen M. Parish, Managing Director, 
Bear, Stearns & Co. Inc. to James L. Starr, Chief Financial Officer, 
Sierra Health Services, Inc. dated Feb. 15, 1995. Bear, Stearns & 
Co. Inc. also indicated, however, that it reserves the right to 
cease acting as a market maker for the Security at any time and for 
any reason. Id.
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    The Company has complied with Rule 18 of the Amex by filing with 
the Amex a certified copy of preambles and resolutions adopted by the 
Company's Board of Directors authorizing the withdrawal of the Security 
from listing on the Amex, and by setting forth in detail to the Amex 
the reasons for such proposed withdrawal and the facts in support 
thereof. The Amex has informed the Company that it has no objection to 
the withdrawal of the Security from listing on the Amex. Pursuant to 
Amex's request and Amex Rule 18(2)(b), the Company mailed notice of its 
intention to file this application to the registered holders of the 
Security on or about March 5, 1996.
    In response, the Company received three comment letters written by 
two holders of the Security concerning the Company's application to 
delist the Security.\2\
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    \2\ The Company provided the Commission with copies of the three 
comment letters as well as the Company's responses thereto.
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    The first commentor objected to the proposed delisting of the 
Security on the basis that it destroys an open market for the Security, 
thereby allowing the Company to set the value of the Security. In a 
second letter, this commentor also requested information regarding the 
nature of the cost savings due to the delisting of the Security, the 
name of the news service that will publish the quotation for the 
Security and asked why Sierra would not be liable to the holders of the 
Security. In response to the commentor's first letter, the Company 
stated that Bear, Stearns & Co., Inc. has confirmed that it intends to 
act as a market-maker for the Security and, moreover, the value of the 
Security will be set by the market place and not by the Company. In 
response to the commentor's second letter, the Company stated that 
delisting the Security would alleviate accounting fees, legal fees, 
listing fees, and filing fees associated with the maintenance of a 
listing on the Amex. The Company also stated that brokers should be 
able to ascertain the quotation for the Security by contacting Bear, 
Stearns & Co., Inc. Lastly, the Company stated that the Securities are 
a debt obligation of the Company and are not automatically assumed or 
guaranteed by anyone, in this case Sierra, who becomes a shareholder of 
the Company after the issuance of the Security.
    The second commentor objected to the proposed delisting of the 
Security on the basis that there are more than 50 holders of the 
Security. The Company responded that the indenture trustee has 
confirmed that there are fewer than 50 record holders of the Security.
    Any interested person may, on or before May 13, 1996, submit by 
letter to the Secretary of the Securities and Exchange Commission, 450 
Fifth Street, NW., Washington, D.C. 20549, facts bearing upon whether 
the application has been made in accordance with the rules of the 
exchange and what terms, if any, should be imposed by the Commission 
for the protection of investors. The Commission, based on the 
information submitted to it, will issue an order granting the 
application after the date mentioned above, unless the Commission 
determines to order a hearing on the matter.


    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 96-10316 Filed 4-25-96; 8:45 am]
BILLING CODE 8010-01-M