<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1998 Commission File Number 0-10071
NOBEL INSURANCE LIMITED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ISLANDS OF BERMUDA 98-0076395
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
SUITE 409 INTERNATIONAL CENTRE NONE
26 BERMUDIANA ROAD (Zip Code)
HAMILTON, BERMUDA HM AX
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (441) 292-7104.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
the filing requirements for the past 90 days.
YES /X/ NO / /
--- ---
Number of Common Shares, $.05 Par Value, outstanding at November 12, 1998
4,630,542
---------
<PAGE>
NOBEL INSURANCE LIMITED
CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
- ------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Investments:
Trading portfolio, at fair value:
Fixed maturity securities (amortized cost: $69
December 31, 1997) ...................................... $ -- $ 75
Equity securities (cost: $2,830 at December 31, 1997) ..... -- 2,858
Other investments (cost: $37 at December 31, 1997) ........ -- 27
Securities available for sale, at fair value:
Fixed maturity securities (amortized cost $94,519
at December 31,1997) .................................... -- 95,725
Equity securities (cost: $1,000 at December 31, 1997) ..... -- 1,806
Short-term investments, at cost, which approximates
fair value .............................................. 13,427 18,892
-------- --------
Total investments ...................................... 13,427 119,383
Cash
Funds held by reinsurance companies ................................ 62 --
-- 1,640
Premiums and other receivables less allowance for
doubtful accounts ($249 at December 31, 1997) .................. -- 23,003
Accrued interest income ............................................ -- 1,228
Reinsurance recoverable on paid and unpaid claims .................. -- 42,962
Prepaid reinsurance premiums ....................................... -- 15,141
Property and equipment less accumulated depreciation
($2,174 at December 31, 1997) .................................... -- 3,309
Deferred policy acquisition costs .................................. -- 4,445
Net deferred tax asset ............................................. -- 3,702
Other assets ....................................................... 50 1,945
-------- --------
Total assets............................................ $ 13,539 $216,758
-------- --------
-------- --------
</TABLE>
(See Accompanying Notes to Consolidated Financial Statements)
1
<PAGE>
NOBEL INSURANCE LIMITED
CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN UNITED STATES DOLLARS)
(CONTINUED)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
- --------------------------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C>
LIABILITIES
Reserve for claims and claims expenses ...................... $ -- $ 82,948
Unearned premiums ........................................... -- 34,834
Reinsurance premiums payable ................................ -- 24,997
Accounts payable and accrued liabilities .................... 133 12,558
Cash overdraft .............................................. -- 1,034
Other liabilities ........................................... 8,894 4,770
-------- ---------
Total liabilities ....................................... 9,027 161,141
-------- ---------
SHAREHOLDERS' EQUITY
Capital shares (Authorized 20,000,000 shares; $.05 par
value; issued 4,630,542 shares at September 30, 1998;
7,808,928 shares at December 31, 1997; outstanding
4,630,542 shares at September 30, 1998 and 4,506,156
shares at December 31, 1997) ............................... 232 7,809
Contributed surplus ......................................... 23,535 44,841
Unrealized gain on investments .............................. -- 1,379
Retained earnings ........................................... 40,942 31,551
Treasury stock, at cost (3,302,772 shares at
December 31, 1997) ......................................... -- (29,963)
Partial liquidating distribution............................. (60,197) --
-------- ---------
Total shareholders' equity .................................. 4,512 55,617
-------- ---------
Total liabilities and shareholders' equity .................. $ 13,539 $ 216,758
-------- ---------
-------- ---------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements)
-2-
<PAGE>
NOBEL INSURANCE LIMITED
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
(IN THOUSANDS, EXCEPT PER SHARE DATA) 1998 1997 1998 1997
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES:
Premiums written ............................... $ -- $ 19,597 $ 36,974 $ 58,872
Reinsurance purchased .......................... -- (7,035) (10,526) (25,475)
------- -------- --------- --------
Net premiums written ........................... $ -- $ 12,562 $ 26,448 $ 33,397
------- -------- --------- --------
------- -------- --------- --------
Premiums earned ................................ $ -- $ 20,362 $ 39,480 $ 62,126
Premiums ceded ................................. -- (10,213) (18,541) (34,893)
------- -------- --------- --------
Net premiums earned ............................ -- 10,149 20,939 27,233
Interest income, net of investment expenses of
$627 at September 30, 1998 and $ 988 at
September 30, 1997, respectively .............. 199 1,497 2,577 4,414
Net investment gains ........................... 95 1,339 2,264 1,882
Claim adjusting fees earned .................... -- 1,599 3,480 4,555
------- -------- --------- --------
Total revenues ................................... 294 14,584 29,260 38,084
------- -------- --------- --------
EXPENSES:
Claims and claims expenses ..................... -- 17,633 40,024 43,390
Reinsurance recoveries ......................... -- (11,253) (11,334) (26,812)
------- -------- --------- --------
Net claim and claim expenses ................... -- 6,380 28,690 16,578
Service fees and commissions ................... -- 1,871 5,555 4,702
General and administrative expenses ............ 100 4,114 9,957 12,235
------- -------- --------- --------
Total expenses ................................. 100 12,365 44,202 33,515
------- -------- --------- --------
Net income before disposal of operations and
income taxes .................................. 194 2,219 (14,942) 4,569
Gain on disposal of United States operations ... -- -- 29,012 --
------- -------- --------- --------
Net income before income taxes ................. 194 2,219 14,070 4,569
Income tax expense (benefit):
Current ................................... -- 38 344 83
Deferred .................................. -- 607 4,335 1,305
------- -------- --------- --------
Income tax expense ........................ -- 645 4,679 1,388
------- -------- --------- --------
Net income ..................................... 194 1,574 9,391 3,181
Retained earnings at beginning of period ....... 40,748 31,153 31,551 29,996
Dividends paid on capital shares ............... -- (225) -- (675)
------- -------- --------- --------
Retained earnings at end of period ............. $40,942 $ 32,502 $ 40,942 $ 32,502
------- -------- --------- --------
------- -------- --------- --------
PER SHARE DATA
Earnings per share:
Basic ..................................... $ .04 $ .35 $ 2.05 $ .71
------- -------- --------- --------
------- -------- --------- --------
Diluted ................................... $ .04 $ .34 $ 2.05 $ .69
------- -------- --------- --------
------- -------- --------- --------
</TABLE>
(See Accompanying Notes to Consolidated Financial Statements)
-3-
<PAGE>
NOBEL INSURANCE LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1998 1997
- --------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................................. $ 9,391 $ 3,181
Adjustments to reconcile net income to net cash from
operations activity:
Depreciation and amortization ........................................ 2,098 1,228
Change in deferred acquisition costs ................................. (1,105) (2,259)
Deferred tax expense ................................................. 4,335 1,305
Increase (decrease) in reserve for claims and claims expenses ........ 5,618 (5,259)
(Decrease) in unearned premiums ...................................... (2,507) (3,255)
(Decrease) in accounts payable and accrued liabilities ............... (226) (1,784)
(Decrease) in deferred service fee income ............................ (277) (235)
(Increase) decrease in net premiums receivable ....................... (26,934) 6,574
Decrease in accrued interest income .................................. 450 174
(Increase) in reinsurance recoverables ............................... (3,951) (11,891)
Decrease in prepaid reinsurance premiums ............................. 8,016 9,419
Decrease in other assets ............................................. 2,147 196
Decrease in funds held by reinsurance companies ...................... 936 111
Net (additions to) dispositions from trading portfolio investments ... (1,188) 3,047
Proceeds from sale of United States operations,
net of cash sold .................................................... 47,129 --
(Gains) from sale of United States operations ........................ (29,012) --
Net realized investment (gains) ...................................... (954) (1,882)
(Gains) on disposal of other assets .................................. (36) (4)
------- -------
Net cash provided from (used by) operating activities ............ 13,930 (1,334)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Investments sold or matured:
Fixed maturities, available for sale ............................. 52,332 74,262
Equity securities, available for sale ............................ -- 573
Purchase of investments:
Fixed maturities, available for sale ............................. (15,869) (67,356)
Equity securities, available for sale ............................ -- (3,021)
Payments on acquisitions ............................................... (1) (6)
(Purchase) disposal of software, property and equipment ................ 55 (573)
------- -------
Net cash provided from investing activities .......................... 36,517 3,879
------- -------
</TABLE>
(See Accompanying Notes to Consolidated Financial Statements)
4
<PAGE>
NOBEL INSURANCE LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(EXPRESSED IN UNITED STATES DOLLARS)
(CONTINUED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1998 1997
- ---------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable ..................................... 8,894 --
Proceeds from issuance of capital shares ........................ 980 393
Repayment of notes payable and capital lease obligation ......... (4,493) (93)
Purchase of treasury stock ...................................... -- (361)
Dividends paid shareholders ..................................... -- (675)
Partial liquidating distribution ................................ (60,197) --
-------- --------
Net cash (used by) financing activities ..................... (54,816) (736)
-------- --------
Net increase (decrease) in cash and cash equivalents ............ (4,369) 1,809
Cash and cash equivalents at beginning of year .................. 17,858 14,785
-------- --------
Cash and cash equivalents at end of year ........................ $ 13,489 $ 16,594
-------- --------
-------- --------
</TABLE>
(See Accompanying Notes to Consolidated Financial Statements)
5
<PAGE>
NOBEL INSURANCE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Balance Sheets at September 30, 1998, and Consolidated
Statements of Income and Retained Earnings for the Nine months ended
September 30, 1998 and Consolidated Statements of Cash Flows for the Nine
months ended September 30, 1998, have not been examined by independent
accountants, but, in the opinion of Nobel Insurance Limited ("Company"), all
adjustments necessary for a fair presentation of the financial position and
results of operations for the periods indicated have been included. On June
25, 1998 the Company completed the sale of the net assets of its U.S.
operating subsidiaries to Renaissance Re Holdings Ltd.. The consolidated
balance sheet as of September 30, 1998 includes the assets and liabilities of
the company and its U.S. holding company, Nobel Holdings, Inc. The
consolidated statements of income and retained earnings and the consolidated
statement of cash flows for the nine months ended September 30, 1998 include
the results of operations for the parent and all the subsidiaries for the
periods indicated. Nobel Holdings, Inc. recognized a gain on the disposal of
U.S. operations in the second quarter of $29,012,000. On July 3, 1998 Nobel
Insurance Limited paid an initial liquidating distribution of approximately
$60,197,000 or $13.00 per share to shareholders of record on June 29, 1998.
At the special shareholders general meeting held June 18, 1998, the
shareholders approved and adopted the stock purchase agreement and the plan
of liquidation. Effective with this approval the company reduced the par
value of its capital shares from $1.00 to $.05 per share and the amount of
the reduction was transferred to its contributed surplus account. Also the
3,302,772 shares of treasury stock were retired and the cost of such shares
reduced the capital share account by $3,303,000 and the contributed surplus
account by $26,660,000.
The special meeting of shareholders, which commenced on June 18, 1998
and was temporarily adjourned pursuant to the plan of liquidation adopted by
the shareholders on June 18, 1998, was reconvened on July 10, 1998 to approve
the voluntary winding up of Nobel Insurance Limited under Bermuda law and to
appoint the statutory liquidator to conduct the liquidation under the Bermuda
Companies Act. The liquidator is presently in the process of liquidating the
company.
The Company is a foreign corporation not, in management's opinion,
engaged in a trade or business in any jurisdiction requiring the payment of
taxes on income except for its United States subsidiaries (the "U.S. Group")
who may ultimately pay United States taxes on their income.
The U.S. Group is domiciled in the United States and is subject to
United States taxes on income. At December 31, 1997, the U.S. Group had
consolidated net operating losses of approximately $8,160,000 which may be
carried forward for U.S. Federal income tax purposes. All of these net
operating losses were fully utilized in the calculation of income taxes for
the U.S. Group at June 30, 1998. The U.S. Group will file a final U.S.
Consolidated Tax return for the period ended June 30, 1998.
6
<PAGE>
FAS 109, "Accounting for Income Taxes", was adopted by the Company in 1993
on a prospective basis. The effect of income taxes on operations is presented
below:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 1998 1997
- -------------------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS) (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net income before income taxes - consolidated $194 $ 2,219 $ 14,070 $ 4,569
Foreign - not subject to tax ................ 194 177 1,207 178
---- ------- -------- -------
U.S. - subject to tax ....................... $ 0 $ 2,042 $ 12,863 $ 4,391
---- ------- -------- -------
---- ------- -------- -------
Computed "expected" tax expense @ 34% ....... $-- $ 693 $ 4,373 $ 1,492
Unutilized alternative minimum tax .......... -- -- 689 --
Reduction for tax-exempt interest ........... -- (59) (286) (113)
Non-allowed meals and entertainment ......... -- 19 9 28
Other items, net ............................ -- (8) (106) (19)
---- ------- -------- -------
Income tax expense .......................... $-- $ 645 $ 4,679 $ 1,388
---- ------- -------- -------
---- ------- -------- -------
</TABLE>
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax liabilities at
December 31, 1997 were no longer available to Nobel Holdings, Inc. at September
30, 1998 because of the sale of the net assets of its subsidiaries to
Renaissance U.S. Holdings, Inc.. There is no net deferred tax asset at September
30, 1998. The tax effects of temporary differences that gave rise to
significant portions of the deferred tax asset and deferred tax liabilities at
December 31, 1997 are presented below.
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
- -------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Accounts receivable, principally due to
allowance for doubtful accounts ............. $-- $ 34
Claims reserves, principally due to discounting
for tax ..................................... -- 1,839
Unearned premium adjustment ................... -- 1,339
Net operating loss carryforwards .............. -- 2,774
Other ......................................... -- 754
----- -------
Total gross deferred tax assets ............. -- 6,740
----- -------
Deferred tax liabilities:
Deferred policy acquisition costs ............. -- (1,511)
Unrealized gains bonds available for sale ..... -- (634)
Other ......................................... -- (893)
----- -------
Total gross deferred tax liabilities ........ -- (3,038)
----- -------
Net deferred tax balance .................. $-- $ 3,702
----- -------
----- -------
</TABLE>
Basic earnings per capital share were determined by dividing net income
by the average capital shares outstanding. Diluted earnings per capital share
was determined by dividing net income by diluted shares outstanding which,
included capital and capital equivalent shares outstanding attributable to
outstanding stock options at September 30, 1997 as follows:
7
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 1998 1997
- -------------------------------------------------------------------------------------------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C>
Basic average capital shares
outstanding .......................... 4,631 4,500 4,580 4,492
Shares applicable to common
stock equivalents .................... -- 134 -- 122
----- ----- ----- -----
Diluted Capital shares outstanding ..... 4,631 4,634 4,580 4,614
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
Insurance companies are required to provide reserves for the settlement and
expense of investigation of all reported and unreported claims. Such provisions
are necessarily based on estimates. The estimates, and the methods used to
arrive at them, are periodically reviewed by the Company in consultation with
professional actuaries and changes are reflected in current operations for the
period in which they are determined.
The Company estimates claims and claims expenses based on historical
experience and payment and reporting patterns for the type of risk involved. The
anticipated effect of inflation is implicitly considered when estimating claims
and claims expenses. The difference between the U.S. insurance subsidiary's
reserves on a statutory basis and on the basis of generally accepted accounting
principles is not material.
Inherent in the estimates of ultimate claims are expected trends in claim
severity, frequency and other factors that may vary as claims are settled. The
amount of uncertainty in the estimates is affected by such factors as the amount
of historical claims experience relative to the development period for the type
of risk, knowledge of the actual facts and circumstances, and the amount of
insurance risk retained.
At June 30, 1998 and December 31, 1997, the Company recorded reserves for
incurred but not reported and development of known claims ("IBNR") which
represented the Company's best estimate of the reserve for claims and claims
expense.
The outstanding balances for casualty and other coverages reserves for incurred
but not reported and development of known claims, net of reinsurance
recoverable, which were sold to Renaissance U.S. Holdings, Inc. on June 30, 1998
were as follows (in thousands):
<TABLE>
<CAPTION>
RESERVE BALANCE (INCOME) EXPENSE EFFECT
----------------- -----------------------
PERIOD ENDING GROSS NET GROSS NET
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
At September 30, 1998 ................ $ -- $ --
Nine months ended September 30, 1998.. $ 3,049 $ 4,893
At December 31, 1997 ................. $ 31,313 $ 14,278
At September 30, 1997 ................ $ 29,082 $ 12,806
Nine months ended September 30, 1997.. $ (6,784) $ (7,869)
</TABLE>
An allowance for doubtful receivables is established when it becomes
evident collection is doubtful. An allowance $249,000 was established December
31, 1997, and was included as part of the net assets sold to Renaissance in June
1998.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The principal cash requirements of the Company as of September 30, 1998
are payments of accounts payable and payment of liquidating and winding up of
company expenses, payment of a final distribution
8
<PAGE>
of $1.00 per share to the shareholders and repayment of the Renaissance Re
limited recourse note and interest in accordance with the approved plan of
liquidation.
The company had a net decrease in cash and cash equivalents in the nine
months ended September 30, 1998 of $4,368,000 because the payment of the initial
liquidating distribution of $13.00 per share or $60,197,000 to shareholders.
Net cash provided by operating activities for the nine months of 1998 was
$13,931,000 compared to net cash used of $(1,334,000) for the nine months of
1997. Net cash provided by investing activities was $36,517,000 for the nine
months of 1998, as compared to $(3,879,000) for the same period of 1997. Cash
provided by financing activities included the Renaissance Re Limited recourse
note of $8,894,000 less repayment of $4,493,000 in notes payable, plus $980,000
received from exercise of stock options less $60,197,000 partial liquidating
distribution to produce net financing cash used of $(54,816,000), compared to
net financing cash provided of $1,809,000 for the nine months of 1997.
RESULTS OF OPERATION
NINE MONTHS ENDED SEPTEMBER 30, 1998 VERSUS
NINE MONTHS SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-----------------
SEPTEMBER 30,
1998 1997 CHANGE
-------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C>
UNDERWRITING OPERATIONS
Premiums written ............................... $ 36,974 $ 58,872 $(21,898)
Reinsurance purchased .......................... (10,526) (25,475) 14,949
-------- -------- --------
Net premiums written ........................ $ 26,448 $ 33,397 $ (6,949)
-------- -------- --------
-------- -------- --------
Net premiums earned ............................ $ 20,939 $ 27,233 $ (6,294)
Net claims and claims expenses ................. (28,690) (16,578) (12,112)
Service fees and commissions ................... (3,752) (2,363) (1,389)
General and administrative expenses ............ (8,368) (9,647) 1,279
-------- -------- --------
Net income (loss) on underwriting operations (19,871) (1,355) (18,516)
-------- -------- --------
CLAIMS ADJUSTING OPERATIONS
Claims adjusting fees earned.................... 3,480 4,555 (1,075)
Claims adjusting expenses
Service fees and commissions .................. (1,803) (2,339) 536
General and administrative expenses ........... (1,589) (2,588) 999
-------- -------- --------
(3,392) (4,927) 1,535
-------- -------- --------
Net income (loss) on claims adjusting
operations ................................... 88 (372) 460
-------- -------- --------
Net investment income and gains ................ 4,841 6,296 (1,455)
Gain on Sale of Operations ..................... 29,012 -- 29,012
Federal income tax (expense) ................... (4,679) (1,388) (3,291)
-------- -------- --------
Net income ..................................... $ 9,391 $ 3,181 $ 6,210
-------- -------- --------
-------- -------- --------
</TABLE>
Premiums written, reinsurance purchased, net premiums earned, net claims and
claims expenses and acquisition cost all show decreases in comparison to the
nine months of September 30, 1997 due to the disposal of the insurance
operations in the second quarter of 1998. During the third quarter the company
was engaged in the voluntary liquidation and winding up of its business and no
longer had the insurance and claims adjusting operations.
The only income during this period was from investments being held, pending
final distributions to creditors and shareholders. The only expenses during the
period were for the payment of items relating to the winding up of the company
business.
9
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1998
VERSUS THREE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
SEPTEMBER 30,
1998 1997 CHANGE
----- -------- --------
(Dollars in thousands)
<S> <C> <C> <C>
UNDERWRITING OPERATIONS
Premiums written .............................. $ -- $ 19,597 $(19,597)
Reinsurance purchased ......................... -- (7,035) 7,035
----- -------- --------
Net premiums written ......................... $ -- $ 12,562 $(12,562)
----- -------- --------
----- -------- --------
Net premiums earned ........................... $ -- $ 10,149 $(10,149)
Net claims and claims expenses ................ -- (6,380) 6,380
Service fees and commissions .................. -- (1,050) 1,050
General and administrative expenses ........... (100) (3,293) 3,193
----- -------- --------
Net income (loss) on underwriting operations (100) (574) 474
----- -------- --------
CLAIMS ADJUSTING OPERATIONS
Claims adjusting fees earned .................. -- 1,599 (1,599)
Claims adjusting expenses
Service fees and commissions ................. -- (821) 821
General and administrative expenses .......... -- (821) 821
----- -------- --------
-- (1,642) 1,642
----- -------- --------
Net income on claims adjusting operations .... -- (43) 43
----- -------- --------
Net investment income and gains ............... 294 2,836 (2,542)
Federal income tax (expense) .................. -- (645) 645
----- -------- --------
Net income ................................. $ 194 $ 1,574 $ (1,380)
----- -------- --------
----- -------- --------
</TABLE>
PREMIUMS WRITTEN - Premiums written decreased due to sale of all
insurance operations as of June 30, 1998. The third quarter of 1998
no longer had insurance functions.
REINSURANCE PURCHASED - Due to the sale of insurance operations the
company had no reinsurance purchased in the third quarter.
NET PREMIUMS EARNED - The Company had no earned premiums in the
quarter due to the disposal of the insurance operations.
NET CLAIMS AND CLAIMS EXPENSES - The Company had no claims expenses
for the quarter due to the disposal of the insurance operation.
ACQUISITION COST, NET OF AMORTIZATION (UNDERWRITING OPERATIONS) -
Acquisition cost did not exist in third quarter due to the disposal
of the insurance operations.
GENERAL AND ADMINISTRATIVE EXPENSES (UNDERWRITING OPERATIONS) -
General and administrative expenses of $100,000 was due to the
payment of liquidating and winding up expenses.
CLAIM ADJUSTING OPERATIONS - This operation was sold on June 30,
1998.
NET INVESTMENT INCOME AND GAINS - Net investment income and gains in
third quarter of 1998 is comprised of $95,000 in capital gains, and
$199,000 in investment income. The reduction in income is due to
negative cash flow from operations resulting from payment of the
partial liquidating distribution.
The company no longer had United States operations and therefore no
provision for United States taxes.
10
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Not applicable.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None
11
<PAGE>
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 thereunto
NOBEL INSURANCE LIMITED
/S/ Jeffry K. Amsbaugh /S/ Thomas D. Nimmo
----------------------- -----------------------------------
Jeffry K. Amsbaugh Thomas D. Nimmo
Chief Executive Officer Senior Vice President and Treasurer
November 12, 1998
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 0
<CASH> 13,489
<RECOVER-REINSURE> 0
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0
0
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20,939
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</TABLE>
