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January 30, 1998
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, NW
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 July 1, 1997
through December 31, 1997 period.
1. Provide a general description of loss exposure / experience for automobile,
"all-risk" property, and general liability insurance coverage.
Effective July 1, 1997, CICL entered into a new reinsurance arrangement
with a United States insurer with respect to General Liability coverage
provided by that insurer to Columbia Energy Group ("Columbia"), its
subsidiaries and associates. 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 a separate aggregate limit of exposure
of US$1,000,000.
Effective June 30, 1997, CICL entered into a new reinsurance agreement
with a United States insurer with respect to All Risk coverage provided by that
insurer to Columbia, 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.
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Given the early stage of the coverages, only one loss reserve on the
1996/97 General Liability program has been reported to CICL by the end of this
reporting period with all other loss reserves being Incurred But Not Reported
in nature.
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.
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, management considers that it is too early to estimate
savings to Columbia arising from the operations of CICL.
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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
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Page 1 of 2
Columbia Insurance Corporation, LTD
Balance Sheet
As of December 31, 1997
($000)
<TABLE>
<S> <C>
ASSETS
Investment and other assets ........................ 7,516
----------
Current Assets
Cash and temporary cash investments .............. 2,662
Accounts receivable, net
Customers ...................................... -
Intercompany ................................... 98
Other .......................................... 4
Prepayments ...................................... 70
Other ............................................ -
----------
Total Current Assets ............................... 2,834
----------
Deferred Charges ................................... 671
----------
TOTAL ASSETS ....................................... 11,021
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Page 2 of 2
Columbia Insurance Corporation, LTD
Balance Sheet
As of December 31, 1997
($000)
<TABLE>
<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 .............................. 507
------------
Total common stock equity ........................ 1,507
Long-term debt ................................... -
Total Capitalization ............................... 1,507
------------
Current Liabilities
Accounts and drafts payable ...................... 13
Intercompany accounts payable .................... 574
Accrued taxes .................................... -
Other ............................................ 2,434
------------
Total Current Liabilities .......................... 3,021
------------
Other Liabilities and Deferred Credits
Income taxes, noncurrent ......................... -
Other ............................................ 6,493
------------
Total Other Liabilities and Deferred Credits ....... 6,493
------------
TOTAL CAPITALIZATION AND LIABILITIES ............... 11,021
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</TABLE>
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Columbia Insurance Corporation, LTD
Income Statement
For Twelve Months Ended December 31, 1997
($000)
<TABLE>
<S> <C>
Operating Revenues ................................. 4,785
Operating Expenses
Products purchased ............................... -
Operation ........................................ 4,593
Other taxes ...................................... 1
------------
Total Operating Expenses ........................... 4,594
------------
Operating Income ................................... 191
------------
Other Income (Deductions)
Interest income and other, net ................... 364
Interest expense and related charges ............. -
------------
Total Other Income (Deductions) .................... 364
------------
Income Before Income Taxes ......................... 555
Income Taxes ....................................... 137
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Net Income ......................................... 418
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