<PAGE> 1
July 30, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Interim Report Under Rule 24 of the
Public Utility Holding Company Act of 1935
Columbia Insurance Corporation, Ltd
12355 Sunrise Valley Drive
Suite 300
Reston, VA 20191-3458
File No. 70-8905
Gentlemen:
In compliance with the terms and conditions of Rule 24 under the Public Utility
Holding Company Act of 1935, and the Order of the Commission dated October 25,
1996 authorizing the financing transactions and business activities as more
fully described in the Joint Application/Declaration, as amended (the
"application"), the undersigned hereby submits the following information
applicable to Columbia Insurance Corporation, Ltd ("CICL") for the January 1,
1997 through June 30, 1997 period.
1. Provide a general description of loss exposure / experience for automobile,
"all-risk" property, and general liability insurance coverage.
Effective June 30, 1997, CICL entered into a reinsurance agreement with
a United States insurer with respect to All Risk coverage provided by that
insurer to The Columbia Gas System Inc.("Columbia Gas"), its subsidiaries and
associates. CICL's exposure under the All Risk reinsurance agreement is limited
depending on the type of loss, to between US$500,000 and US$650,000 per
occurrence excess of applicable deductibles and is also subject to an aggregate
limit of exposure of US$3,000,000.
In addition, in 1996 CICL entered into a reinsurance arrangements with
two United States insurers with respect to All Risk and General Liability
provided by those insurers to Columbia Gas, its subsidiaries and associates.
CICL's exposure under the All Risk reinsurance agreement is limited depending on
the type of loss, to between US$500.000 and US$650,000 per occurrence excess of
applicable deductibles and is also subject to an aggregate limit of exposure of
US$3,000,000. CICL's exposure under the General Liability reinsurance
arrangement is limited to US$800,000 per occurrence excess of a Self Insured
Retention of US$200,000 per occurrence and subject to an aggregate limit of
exposure of US$3,000,000 and to a further US$1,000,000 per occurrence excess of
US$800,000 per occurrence excess of a Self Insured Retention of US$200,000 per
occurrence and subject to an aggregate limit of exposure of US$1,000,000.
<PAGE> 2
As such, the combined aggregate exposure for all three coverages
reinsured by CICL as of June 30, 1997 is US$10,000,000.
Given the early stage of the coverages, only one loss reserve has been
reported to CICL by the end of this reporting period.
2. Provide an analysis by subsidiary or associate company of auto liability,
general liability, and property losses and expenses incurred during the six
month period as compared to premiums paid.
As noted above, CICL has had one loss reported to it but has paid no
claims in the period under review. An analysis of premiums paid by subsidiary or
associate company to insurance carriers and ceded by those carriers to CICL by
line of coverage during the period under review and as at June 30, 1997 is
appended.
3. Provide an analysis by subsidiary or associate company of claims paid by
CICL on behalf of such subsidiary or associate company and include the
lead-in reserve available to CICL and end-of-period reserve balance.
As noted above, no claims have been paid in the period under review.
4. Provide a listing that illustrates the increases and decreases to premiums
for each subsidiary or associate company as a result of the operations of
CICL and loss experience of each subsidiary as a result of operations of
CICL.
At this very early stage in the development of each loss program
reinsured, only one loss has been reported to CICL and it has paid no claims and
therefore, premium payments have been unaffected by actual loss experience.
5. Provide a statement of actual savings achieved by Columbia as a result of
the operations of CICL.
At this stage, it is too early to estimate savings to Columbia arising
from the operations of CICL.
6. Provide a copy of CICL's income statement and balance sheet, including any
notes thereto.
CICL's income statement and balance sheet including any notes are
attached.
Very truly yours,
COLUMBIA INSURANCE CORPORATION, LTD
By: //s//N. A. Parillo
---------------------------------
N. A. Parillo, President
<PAGE> 3
Page 1 of 2
Columbia Insurance Corporation, LTD
Balance Sheet
As of June 30, 1997
($000)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current Assets
Cash and temporary cash investments .............. 5,617
Accounts receivable, net
Customers ...................................... -
Intercompany ................................... -
Other .......................................... 6
Prepayments ...................................... 18
Other ............................................ -
-------
Total Current Assets ............................... 5,641
-------
Deferred Charges ................................... 290
-------
TOTAL ASSETS ....................................... 5,931
=======
</TABLE>
<PAGE> 4
Page 2 of 2
Columbia Insurance Corporation, LTD
Balance Sheet
As of June 30, 1997
($000)
<TABLE>
<CAPTION>
<S> <C>
CAPITALIZATION AND LIABILITIES
Capitalization
Common Stock Equity
Common stock, $25 par value (4,800 shares
outstanding) ................................... 120
Additional paid-in capital ..................... 880
Retained earnings .............................. 175
-----------
Total common stock equity ........................ 1,175
Long-term debt ................................... -
Total Capitalization ............................... 1,175
-----------
Current Liabilities
Accounts and drafts payable ...................... 15
Intercompany accounts payable .................... (2)
Accrued taxes .................................... 384
Other ............................................ -
-----------
Total Current Liabilities .......................... 397
-----------
Other Liabilities and Deferred Credits
Income taxes, noncurrent ......................... -
Other ............................................ 4,359
-----------
Total Other Liabilities and Deferred Credits ....... 4,359
-----------
TOTAL CAPITALIZATION AND LIABILITIES ............... 5,931
===========
</TABLE>
<PAGE> 5
Columbia Insurance Corporation, LTD
Income Statement
Quarter Ending June 30, 1997
($000)
<TABLE>
<S> <C>
Operating Revenues ................................. 1,150
Operating Expenses
Products purchased ............................... -
Operation ........................................ 1,206
-----------
Total Operating Expenses ........................... 1,206
-----------
Operating Income (Loss) ............................ (56)
-----------
Other Income (Deductions)
Interest income and other, net ................... 87
Interest expense and related charges ............. -
-----------
Total Other Income (Deductions) .................... 87
-----------
Income Before Income Taxes ......................... 31
Income Taxes ....................................... 11
-----------
Net Income ......................................... 20
===========
</TABLE>
<PAGE> 6
COLUMBIA INSURANCE CORPORATION, LTD
UNDERWRITING ANALYSIS AS AT JUNE 30 1997
<TABLE>
Reinsured AEGIS ARKWRIGHT ARKWRIGHT TOTAL
LIMITED MUTUAL MUTUAL
<S> <C> <C> <C> <C>
Program period 7 1 96- 6 30 96- 6 30 97-
6 30 97 6 30 97 6 30 98
Coverage Liability All Risk All Risk
$ $ $ $
Premium written 3,217,165 1,380,000 1,603,108 6,200,273
Movement in unearned premiums 0 0 (1,603,108) (1,603,108)
--------- --------- --------- ---------
Net earned premium 3,217,165 1,380,000 0 4,597,165
--------- --------- --------- ---------
Losses paid 0 0 0 0
Movement in case reserves 0 15,000 0 15,000
Movement in IBNR reserves 3,059,143 1,285,000 0 4,344,143
--------- --------- --------- ---------
3,059,143 1,300,000 0 4,359,143
--------- --------- --------- ---------
Underwriting income $ 158,022 $ 80,000 $ 0 $ 238,022
--------- --------- --------- ---------
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
Movement
Reinsured 6 months to
Associated Electric & Gas insurance Serivices Limited 30-Jun-97
eff 7 1 96 $
Excess Liability premium written $3,217,165 NET EARNED
PREMIUM
<S> <C> <C> <C>
allocated by DBS companies
CKY $ 123,861 61,930 CKY
CMD $ 30,885 15,442 CMD
COH $1,161,075 580,538 COH
CPA $ 366,757 183,378 CPA
COS $ 160,858 80,429 COS
TCO $ 792,304 396,152 TCO
CGT $ 305,952 152,976 CGT
CS $ 35,389 17,694 CS
CG $ 2,895 1,448 CG
other companies
CNR $ 74,638 37,319 CNR
CGC $ 3,217 1,609 CGC
CES $ 44,719 22,359 CES
CPI $ 89,521 44,760 CPI
CPC $ 18,338 9,169 CPC
CLG $ 3,861 1,930 CLG
TVC $ 2,895 1,448 TVC
---------- ---------
$3,217,166 1,608,583
==========
<CAPTION>
Arkwright Mutual Insurance Company
eff 6 30 96 $1,380,000
==========
All Risk premium written Allocation
<S> <C> <C> <C>
CKY 0.00 4,400 2,200
CMD 0.00 754 377
COH 0.02 27,005 13,502
CPA 0.01 10,949 5,475
COS 0.00 4,433 2,217
TCO 0.47 642,602 321,301
CNR 0.04 52,405 26,202
CGT 0.38 531,024 265,512
CES 0.00 0 0
CPI 0.00 2,607 1,303
CPC 0.00 3,237 1,618
CGC 0.00 286 143
CLG 0.06 82,522 41,261
CGD 0.00 0 0
TVC 0.00 0 0
CAT 0.00 0 0
CS 0.01 14,965 7,483
AE 0.00 2,811 1,406
-------- --------
TOTAL ALL RISK UNEARNED
PREMIUMS 0.00 $1,380,000 690,000
==========
Income statement re 1996/97 $2,298,583
==========
</TABLE>
