UNITED STATES

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) August 7, 2014

INDEPENDENCE HOLDING COMPANY

(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code:  (203) 358-8000

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 Exchange Act (17 CFR 240a-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 240.13a-4(c))

Item 2.02 Results of Operations and Financial Condition.

The information set forth under this Item 2.02 (Results of Operations and Financial Condition) is intended to be furnished. Such information, including the Exhibit attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities and Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.

On August 7, 2014, Independence Holding Company issued a news release announcing its 2014 Second-Quarter and Six-Month results, a copy of which is attached as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

(c)  

Exhibits:

Exhibit 99.1

News Release of Independence Holding Company dated August 7, 2014: Independence Holding Company Announces 2014 Second-Quarter and Six-Month Results.

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, thereunto duly authorized.

INDEPENDENCE HOLDING COMPANY	CONTACT:  ADAM VANDERVOORT
96 CUMMINGS POINT ROAD	(646) 509-2156
STAMFORD, CONNECTICUT 06902	www.IHCGroup.com
NYSE: IHC

NEWS RELEASE

INDEPENDENCE HOLDING COMPANY ANNOUNCES

2014 SECOND-QUARTER AND SIX-MONTH RESULTS

Stamford, Connecticut, August 7, 2014. Independence Holding Company (NYSE: IHC) today reported 2014 second-quarter and six-month results.  

Financial Results

Net income attributable to IHC increased to $.22 per share, diluted, or $3,848,000, for the three months ended June 30, 2014 compared to $.21 per share, diluted, or $3,691,000, for the three months ended June 30, 2013. Net income attributable to IHC decreased to $.43 per share, diluted, or $7,549,000, for the six months ended June 30, 2014 compared to $.47 per share, diluted, or $8,392,000, for the six months ended June 30, 2013.

 Revenues decreased to $136,019,000 for the three months ended June 30, 2014 compared to revenues for the three months ended June 30, 2013 of $151,900,000. Revenues decreased to $277,091,000 for the six months ended June 30, 2014 compared to revenues for the six months ended June 30, 2013 of $289,782,000. The decrease in revenues for both the second quarter and the first six months of 2014 is primarily due to the runoff of major medical business from lines that we exited largely as a result of the requirements of the Affordable Care Act (“ACA”), offset in part by an increase in medical stop-loss and specialty health premiums.   

Chief Executive Officer’s Comments

Roy Thung, Chief Executive Officer, commented, “We are pleased with the continued growth in earned premium and significantly increased earnings for medical stop-loss, by far our largest line of business, for the second quarter and first six months of the year.  We attribute these positive developments to enhanced sales efforts in our direct business, focused underwriting and a general expansion of the market as new employer groups migrate to self-funding from fully insured in response to health care reform.  We expect continued improvement in this line of business, as evidenced by the 32% growth in our direct business written in the twelve months ended July 31, 2014, while maintaining consistent profit margins on a growing premium base.

Our specialty health business increased significantly in the first six months of 2014 compared to last year; however, our fully insured segment continued to be adversely affected by the ACA, including the runoff of major-medical business and the health insurance tax. This adversely impacted the 2014 second quarter by approximately $1.6 million and the first six months of 2014 by approximately $3.5 million.  In addition, the Company recorded $1.2 million in amortization of deferred loss in connection with the assumption of certain ceded annuity policies from the prior year’s coinsurance agreement. Our overall investment portfolio continues to be very highly rated (on average, AA) and has a duration of approximately six years. Our book value was $16.18 per share at June 30, 2014, an increase of 6% over the book value per share at December 31, 2013, and our total stockholders’ equity is $282 million at June 30, 2014 compared to $269 million at December 31, 2013. Through August 1, 2014, we have repurchased 250,559 shares of IHC stock for $3.3 million at an average price of $13.35 per share.

We are optimistic that our operating results for the balance of this year will compare favorably to the comparable period in 2013, largely as a result of the continuing growth in premiums and income

from our direct medical stop-loss line of business and of the transition of our fully insured division to being principally a specialty health insurance operation with controlled distribution and higher-margin lines of business.  We expect the adverse consequences of the ACA to gradually decline over the next six months and be largely complete by the end of this year.”    

About Independence Holding Company

IHC is a holding company principally engaged in the life and health insurance business and the acquisition of blocks of policies through its insurance company subsidiaries (Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company) and its marketing and administrative affiliates.  Standard Security Life markets medical stop-loss, group major and limited medical, short-term medical, group long-term and short-term disability and life, group and individual dental, vision and various supplemental products. Madison National Life sells group life and disability, group major and limited medical, group and individual dental, individual life insurance and various supplemental products. Independence American offers pet insurance, non-subscriber occupational accident, short-term medical, medical stop-loss, group and individual dental and various supplemental products. IHC owns certain subsidiaries through its majority ownership of American Independence Corp. (NASDAQ: AMIC), which is a holding company principally engaged in the insurance and reinsurance business.

Certain statements and information contained in this release may be considered “forward-looking statements,” such as statements relating to management's views with respect to future events and financial performance.  Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements.  Potential risks and uncertainties include, but are not limited to, economic conditions in the markets in which IHC operates, new federal or state governmental regulation, IHC’s ability to effectively operate, integrate and leverage any past or future strategic acquisition, and other factors which can be found in IHC’s other news releases and filings with the Securities and Exchange Commission.  IHC expressly disclaims any duty to update its forward-looking statements or earnings guidance, and does not undertake to provide any such guidance in the future.

INDEPENDENCE HOLDING COMPANY

SECOND QUARTER REPORT

June 30, 2014

(In Thousands, Except Per Share Data)

As of August 1, 2014, there were 17,417,586 common shares outstanding, net of treasury shares.

INDEPENDENCE HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share Data)

						June 30,			December 31,
						2014			2013
ASSETS:
	Investments:
		Short-term investments			$	50		$	50
		Securities purchased under agreements to resell				19,260			22,594
		Trading securities				11,600			7,125
		Fixed maturities, available-for-sale				571,727			542,287
		Equity securities, available-for-sale				12,962			11,803
		Other investments				25,599			25,123
			Total investments			641,198			608,982
	Cash and cash equivalents					26,631			24,229
	Deferred acquisition costs					30,106			29,777
	Due and unpaid premiums					59,282			59,435
	Due from reinsurers					331,649			380,229
	Premium and claim funds					39,235			37,353
	Goodwill					50,318			50,318
	Other assets					60,446			78,712
			TOTAL ASSETS		$	1,238,865		$	1,269,035
LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
	Policy benefits and claims				$	233,992		$	237,754
	Future policy benefits					283,036			287,449
	Funds on deposit					234,863			274,826
	Unearned premiums					12,639			12,423
	Other policyholders' funds					22,629			25,129
	Due to reinsurers					37,833			37,113
	Accounts payable, accruals and other liabilities					77,681			71,889
	Debt					6,000			6,000
	Junior subordinated debt securities					38,146			38,146
			TOTAL LIABILITIES			946,819			990,729
STOCKHOLDERS’ EQUITY:
IHC STOCKHOLDERS' EQUITY:
	Preferred stock (none issued)					-			-
	Common stock					18,529			18,524
	Paid-in capital					126,899			126,239
	Accumulated other comprehensive loss					(1,519)			(10,472)
	Treasury stock, at cost					(11,039)			(8,169)
	Retained earnings					149,555			142,669
TOTAL IHC STOCKHOLDERS’ EQUITY						282,425			268,791
NONCONTROLLING INTERESTS IN SUBSIDIARIES						9,621			9,515
			TOTAL EQUITY			292,046			278,306
			TOTAL LIABILITIES AND EQUITY		$	1,238,865		$	1,269,035