<PAGE>
- - - - - --------------------------------------------------------------------------------
- - - - - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM.... TO....
1-8278
COMMISSION FILE NUMBER...............
RELIANCE GROUP HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF 13-3082071
INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
10055
PARK AVENUE PLAZA (ZIP CODE)
55 EAST 52ND STREET
NEW YORK, NEW YORK
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 909-1100
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE
------------------- ON WHICH REGISTERED
-------------------
Common Stock, $.10 Par Value New York Stock Exchange
and Pacific Stock Exchange
9% Senior Notes, Due November 15, 2000 New York Stock Exchange
9 3/4% Senior Subordinated Debentures, New York Stock Exchange
Due November 15, 2003
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Putable Common Stock Purchase Warrants
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 such
filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to the Form 10-K. [ ]
As of March 15, 1994, 112,585,593 shares of the common stock of Reliance
Group Holdings, Inc. were outstanding, and the aggregate market value of the
voting stock held by nonaffiliates was approximately $330,000,000.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Reliance Group Holdings, Inc. 1993 Annual Report--
Parts I, II, and IV.
(2) Reliance Group Holding, Inc. Proxy Statement for the
Annual Meeting of Stockholders held May 12, 1994--Part
III.
- - - - - --------------------------------------------------------------------------------
- - - - - --------------------------------------------------------------------------------
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to be
signed on its behalf by the undersigned, thereunto duly authorized, on the 20th
day of June, 1994.
Reliance Group Holdings, Inc.
By: /s/ Saul P. Steinberg
----------------------------------
Saul P. Steinberg
Chairman of the Board and Chief
Executive Officer
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT DESCRIPTION PAGE
------- ------------------- ------------
<C> <S> <C>
99.1 --Annual Report on Form 11-K of Reliance Insurance 1-17
Company Savings Incentive Plan for the year ended
December 31, 1993
</TABLE>
<PAGE>
EXHIBIT 99.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 11-K
----------------
[X]ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
[_]TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number ......
RELIANCE INSURANCE COMPANY
SAVINGS INCENTIVE PLAN
4 PENN CENTER PLAZA
PHILADELPHIA, PENNSYLVANIA 19103
(FULL TITLE AND ADDRESS OF THE PLAN)
RELIANCE GROUP HOLDINGS, INC.
PARK AVENUE PLAZA
55 EAST 52ND STREET
NEW YORK, NEW YORK 10055
(NAME AND ADDRESS OF ISSUER HELD PURSUANT TO THE PLAN)
<PAGE>
INDEPENDENT AUDITORS' REPORT
Savings Incentive Plan Committee and Participants of
Reliance Insurance Company Savings Incentive Plan
Philadelphia, Pennsylvania
We have audited the accompanying statements of net assets available for plan
benefits, including the schedule of investments, of the Reliance Insurance
Company Savings Incentive Plan as of December 31, 1993 and 1992, and the
related statements of changes in net assets available for plan benefits for
each of the three years in the period ended December 31, 1993. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits as of
December 31, 1993 and 1992, and the changes in net assets available for plan
benefits for each of the three years in the period ended December 31, 1993, in
conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed on
pages 15 and 16 are presented for the purpose of additional analysis and are
not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules have been subjected to the auditing procedures
applied in our audit of the basic financial statements for the year ended
December 31, 1993 and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
We consent to the incorporation by reference in the Registration Statement on
Form S-8 (No. 33-19897) and related Prospectus of our report included herein
and to the use of Touche Ross & Co., and statements with respect to Touche Ross
& Co., as appearing under the heading "Experts" in the Registration Statement
on Form S-8.
Deloitte & Touche
Philadelphia, Pennsylvania
June 7, 1994
1
<PAGE>
RELIANCE INSURANCE COMPANY
SAVINGS INCENTIVE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
<TABLE>
<CAPTION>
INCENTIVE FUNDS
EMPLOYEE ----------------------
EMPLOYEE EMPLOYEE EMPLOYEE RETIREMENT EMPLOYEE EMPLOYER EMPLOYER
GROWTH INTERMEDIATE EMPLOYEE MANAGED GOVERNMENT COMMON COMMON MANAGED
& INCOME BOND MAGELLAN INCOME MONEY MARKET STOCK STOCK INCOME
FUND FUND FUND FUND FUND FUND FUND FUND TOTAL FUNDS
----------- ------------ ---------- ----------- ------------ ---------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Common Stock of
Reliance Group
Holdings, Inc.
at Market Value
(4,024,947
Shares at a
cost of
$20,267,826)... $ -- $ -- $ -- $ -- $ -- $5,573,387 $26,626,190 $ -- $ 32,199,577
Other
Investments.... 29,562,316 8,497,864 8,423,986 24,337,356 715,222 33,082 -- 9,632,655 81,202,481
----------- ---------- ---------- ----------- -------- ---------- ----------- ---------- ------------
29,562,316 8,497,864 8,423,986 24,337,356 715,222 5,606,469 26,626,190 9,632,655 113,402,058
Contributions
Receivable--
Employer....... -- -- -- -- -- -- 6,767,337 -- 6,767,337
Dividends and
Interest
Receivable..... -- -- -- -- -- 55,471 268,542 -- 324,013
Receivable for
Unsettled
Trade.......... -- -- -- -- -- -- 213,607 -- 213,607
----------- ---------- ---------- ----------- -------- ---------- ----------- ---------- ------------
29,562,316 8,497,864 8,423,986 24,337,356 715,222 5,661,940 33,875,676 9,632,655 120,707,015
----------- ---------- ---------- ----------- -------- ---------- ----------- ---------- ------------
LIABILITIES
Payable for
Unsettled Trade. -- -- -- -- -- (19,739) -- -- (19,739)
----------- ---------- ---------- ----------- -------- ---------- ----------- ---------- ------------
NET ASSETS
AVAILABLE FOR
PLAN BENEFITS... $29,562,316 $8,497,864 $8,423,986 $24,337,356 $715,222 $5,642,201 $33,875,676 $9,632,655 $120,687,276
=========== ========== ========== =========== ======== ========== =========== ========== ============
</TABLE>
See notes to financial statements.
2
<PAGE>
RELIANCE INSURANCE COMPANY
SAVINGS INCENTIVE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1992
<TABLE>
<CAPTION>
INCENTIVE FUNDS
------------------------
EMPLOYEE EMPLOYER
EMPLOYEE EMPLOYEE EMPLOYEE COMMON COMMON EMPLOYER
BOND EQUITY GUARANTEED STOCK STOCK GUARANTEED
FUND FUND FUND FUND FUND FUND TOTAL FUNDS
---------- ----------- ----------- ---------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Common Stock of
Reliance Group
Holdings, Inc. at
Market Value
(4,058,401 Shares at a
cost of $21,514,678).. $ -- $ -- $ -- $3,630,729 $21,226,978 $ -- $ 24,857,707
Other Investments...... 7,688,936 23,768,844 30,665,381 42,058 96,658 11,109,809 73,371,686
---------- ----------- ----------- ---------- ----------- ----------- ------------
7,688,936 23,768,844 30,665,381 3,672,787 21,323,636 11,109,809 98,229,393
Contributions
Receivable--Employer.. -- -- -- -- 1,937,173 -- 1,937,173
Contributions
Receivable--Employee.. 9,942 7,226 16,828 3,165 -- 703 37,864
Dividends and Interest
Receivable............ 211 798 529 47,214 228,430 103 277,285
---------- ----------- ----------- ---------- ----------- ----------- ------------
7,699,089 23,776,868 30,682,738 3,723,166 23,489,239 11,110,615 100,481,715
---------- ----------- ----------- ---------- ----------- ----------- ------------
LIABILITIES
Payable to CMAC
Investment SIP........ (242,674) (689,893) (671,615) (62,992) (567,502) (113,417) (2,348,093)
---------- ----------- ----------- ---------- ----------- ----------- ------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS.......... $7,456,415 $23,086,975 $30,011,123 $3,660,174 $22,921,737 $10,997,198 $ 98,133,622
========== =========== =========== ========== =========== =========== ============
</TABLE>
See notes to financial statements.
3
<PAGE>
RELIANCE INSURANCE COMPANY
SAVINGS INCENTIVE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
EMPLOYEE
RETIREMENT EMPLOYEE EMPLOYEE EMPLOYEE
EMPLOYEE EMPLOYEE EMPLOYEE GOVERNMENT GROWTH INTERMEDIATE EMPLOYEE MANAGED
BOND EQUITY GUARANTEED MONEY MARKET & INCOME BOND MAGELLAN INCOME
FUND FUND FUND FUND FUND FUND FUND FUND
---------- ------------ ------------ ------------ ----------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSETS
AVAILABLE FOR PLAN
BENEFITS,
BEGINNING OF YEAR. $7,456,415 $ 23,086,975 $ 30,011,123 $ -- $ -- $ -- $ -- $ --
ADDITIONS
Interest and
Dividends....... 151,540 195,921 952,469 6,008 1,514,770 482,246 462,444 722,976
Dividends on
Reliance Group
Holdings, Inc.
Common Stock.... -- -- -- -- -- -- -- --
Net Investment
Gain (Loss)
Reliance Group
Holdings, Inc.
Common Stock.... -- -- -- -- -- -- -- --
Other
Investments.... 249,958 1,815,429 -- -- 1,797,033 81,738 (49,243) --
Employee
Contributions... 431,609 1,035,539 3,044,485 63,307 4,589,431 1,651,427 979,119 2,470,960
Employer
Contributions... -- -- -- -- -- -- -- --
---------- ------------ ------------ -------- ----------- ---------- ---------- -----------
TOTAL ADDITIONS.... 833,107 3,046,889 3,996,954 69,315 7,901,234 2,215,411 1,392,320 3,193,936
---------- ------------ ------------ -------- ----------- ---------- ---------- -----------
DEDUCTIONS AND FUND
TRANSFERS
Withdrawals and
Terminations.... (203,116) (788,439) (1,912,333) (43,037) (3,427,998) (930,760) (313,103) (3,877,828)
Distribution to
Commonwealth
Mortgage
Assurance
Company SIP..... (10,831) (20,320) (576) -- -- -- -- --
Interfund
Transfers....... (8,075,575) (25,325,105) (32,095,168) 688,944 25,089,080 7,213,213 7,344,769 25,021,248
---------- ------------ ------------ -------- ----------- ---------- ---------- -----------
TOTAL DEDUCTIONS
AND FUND
TRANSFERS......... (8,289,522) (26,133,864) (34,008,077) 645,907 21,661,082 6,282,453 7,031,666 21,143,420
---------- ------------ ------------ -------- ----------- ---------- ---------- -----------
NET ADDITIONS
(DEDUCTIONS)...... (7,456,415) (23,086,975) (30,011,123) 715,222 29,562,316 8,497,864 8,423,986 24,337,356
---------- ------------ ------------ -------- ----------- ---------- ---------- -----------
NET ASSETS
AVAILABLE FOR PLAN
BENEFITS, END OF
YEAR.............. $ -- $ -- $ -- $715,222 $29,562,316 $8,497,864 $8,423,986 $24,337,356
========== ============ ============ ======== =========== ========== ========== ===========
<CAPTION>
INCENTIVE FUNDS
--------------------------------------
EMPLOYEE EMPLOYER EMPLOYER
COMMON COMMON EMPLOYER MANAGED
STOCK STOCK GUARANTEED INCOME
FUND FUND FUND FUND TOTAL FUNDS
----------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
NET ASSETS
AVAILABLE FOR PLAN
BENEFITS,
BEGINNING OF YEAR. $3,660,174 $22,921,737 $ 10,997,198 $ -- $ 98,133,622
ADDITIONS
Interest and
Dividends....... 10,156 16,636 333,105 277,262 5,125,533
Dividends on
Reliance Group
Holdings, Inc.
Common Stock.... 218,953 1,124,373 -- -- 1,343,326
Net Investment
Gain (Loss)
Reliance Group
Holdings, Inc.
Common Stock.... 1,127,345 7,003,473 -- -- 8,130,818
Other
Investments.... -- -- -- -- 3,894,915
Employee
Contributions... 1,138,331 -- -- -- 15,404,208
Employer
Contributions... -- 6,767,337 -- -- 6,767,337
----------- ------------ ------------- ----------- -------------
TOTAL ADDITIONS.... 2,494,785 14,911,819 333,105 277,262 40,666,137
----------- ------------ ------------- ----------- -------------
DEDUCTIONS AND FUND
TRANSFERS
Withdrawals and
Terminations.... (595,326) (3,744,897) (1,043,636) (1,126,228) (18,006,701)
Distribution to
Commonwealth
Mortgage
Assurance
Company SIP..... (58,945) (13,290) (1,820) -- (105,782)
Interfund
Transfers....... 141,513 (199,693) (10,284,847) 10,481,621 --
----------- ------------ ------------- ----------- -------------
TOTAL DEDUCTIONS
AND FUND
TRANSFERS......... (512,758) (3,957,880) (11,330,303) 9,355,393 (18,112,483)
----------- ------------ ------------- ----------- -------------
NET ADDITIONS
(DEDUCTIONS)...... 1,982,027 10,953,939 (10,997,198) 9,632,655 22,553,654
----------- ------------ ------------- ----------- -------------
NET ASSETS
AVAILABLE FOR PLAN
BENEFITS, END OF
YEAR.............. $5,642,201 $33,875,676 $ -- $9,632,655 $120,687,276
=========== ============ ============= =========== =============
</TABLE>
See notes to financial statements.
4
<PAGE>
RELIANCE INSURANCE COMPANY
SAVINGS INCENTIVE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1992
<TABLE>
<CAPTION>
INCENTIVE FUNDS
------------------------
EMPLOYEE EMPLOYEE EMPLOYER EMPLOYER
EMPLOYEE EMPLOYEE GUARANTEED COMMON COMMON GUARANTEED
BOND FUND EQUITY FUND FUND STOCK FUND STOCK FUND FUND TOTAL FUNDS
---------- ----------- ----------- ---------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> ---
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, BEGINNING
OF YEAR................. $6,532,743 $17,503,395 $28,231,392 $2,068,731 $12,910,530 $12,140,801 $ 79,387,592
ADDITIONS
Interest and Dividends.. 445,431 451,247 2,258,378 1,304 6,985 840,063 4,003,408
Dividends on Reliance
Group Holdings, Inc.
Common Stock........... -- -- -- 171,684 929,412 -- 1,101,096
Net Investment Gain
Reliance Group
Holdings, Inc.
Common Stock.......... -- -- -- 1,062,071 5,368,194 -- 6,430,265
Other Investments....... 75,015 2,327,461 -- -- -- -- 2,402,476
Employee Contributions.. 1,703,727 4,258,634 6,046,217 723,956 -- 45 12,732,579
Employer Contributions.. -- -- -- -- 5,694,830 -- 5,694,830
---------- ----------- ----------- ---------- ----------- ----------- ------------
TOTAL ADDITIONS.......... 2,224,173 7,037,342 8,304,595 1,959,015 11,999,421 840,108 32,364,654
---------- ----------- ----------- ---------- ----------- ----------- ------------
DEDUCTIONS AND FUND
TRANSFERS
Withdrawals and
Terminations........... (834,302) (2,185,489) (4,673,879) (311,042) (1,405,750) (1,848,935) (11,259,397)
Funds pending
distribution on sale of
Commonwealth Mortgage
Assurance
Company............... (242,674) (689,893) (671,615) (62,992) (567,502) (113,417) (2,348,093)
Distribution to General
Casualty SIP........... -- -- -- -- (11,134) -- (11,134)
Interfund Transfers..... (223,525) 1,421,620 (1,179,370) 6,462 (3,828) (21,359) --
---------- ----------- ----------- ---------- ----------- ----------- ------------
TOTAL DEDUCTIONS AND FUND
TRANSFERS............... (1,300,501) (1,453,762) (6,524,864) (367,572) (1,988,214) (1,983,711) (13,618,624)
---------- ----------- ----------- ---------- ----------- ----------- ------------
NET ADDITIONS
(DEDUCTIONS)............ 923,672 5,583,580 1,779,731 1,591,443 10,011,207 (1,143,603) 18,746,030
---------- ----------- ----------- ---------- ----------- ----------- ------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, END OF
YEAR.................... $7,456,415 $23,086,975 $30,011,123 $3,660,174 $22,921,737 $10,997,198 $ 98,133,622
========== =========== =========== ========== =========== =========== ============
</TABLE>
See notes to financial statements.
5
<PAGE>
RELIANCE INSURANCE COMPANY SAVINGS INCENTIVE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1991
<TABLE>
<CAPTION>
INCENTIVE FUNDS
------------------------
EMPLOYEE EMPLOYEE EMPLOYEE EMPLOYER EMPLOYER
BOND EMPLOYEE GUARANTEED COMMON COMMON GUARANTEED
FUND EQUITY FUND FUND STOCK FUND STOCK FUND FUND TOTAL FUNDS
---------- ----------- ----------- ---------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR
PLAN
BENEFITS, BEGINNING OF
YEAR.................. $4,598,507 $12,022,255 $22,925,311 $1,799,314 $ 9,616,019 $12,531,722 $ 63,493,128
ADDITIONS
Interest and Dividends. 14,491 23,141 2,561,004 75,355 152,657 1,589,950 4,416,598
Dividends on Reliance
Group Holdings, Inc.
Common Stock......... -- -- -- 97,960 674,310 -- 772,270
Net Investment Gain
(Loss)
Reliance Group Hold-
ings, Inc.
Common Stock......... -- -- -- (304,975) (1,435,642) -- (1,740,617)
Other Investments..... 1,036,860 5,200,673 -- -- -- -- 6,237,533
Employee Contributions. 1,415,368 3,264,747 6,270,103 661,603 -- -- 11,611,821
Employer Contributions. -- -- -- -- 4,746,864 -- 4,746,864
---------- ----------- ----------- ---------- ----------- ----------- ------------
TOTAL ADDITIONS......... 2,466,719 8,488,561 8,831,107 529,943 4,138,189 1,589,950 26,044,469
---------- ----------- ----------- ---------- ----------- ----------- ------------
DEDUCTIONS AND FUND
TRANSFERS
Withdrawals and Termi-
nations............... (648,915) (1,934,344) (3,439,862) (200,694) (1,079,685) (1,592,744) (8,896,244)
Distribution to General
Casualty SIP.......... (438,826) (512,066) (168,052) 22,141 148,799 (305,757) (1,253,761)
Interfund Transfers.... 555,258 (561,011) 82,888 (81,973) 87,208 (82,370) --
---------- ----------- ----------- ---------- ----------- ----------- ------------
TOTAL DEDUCTIONS AND
FUND
TRANSFERS.............. (532,483) (3,007,421) (3,525,026) (260,526) (843,678) (1,980,871) (10,150,005)
---------- ----------- ----------- ---------- ----------- ----------- ------------
NET ADDITIONS (DEDUC-
TIONS)................. 1,934,236 5,481,140 5,306,081 269,417 3,294,511 (390,921) 15,894,464
---------- ----------- ----------- ---------- ----------- ----------- ------------
NET ASSETS AVAILABLE FOR
PLAN
BENEFITS, END OF YEAR.. $6,532,743 $17,503,395 $28,231,392 $2,068,731 $12,910,530 $12,140,801 $ 79,387,592
========== =========== =========== ========== =========== =========== ============
</TABLE>
See notes to financial statements.
6
<PAGE>
RELIANCE INSURANCE COMPANY
SAVINGS INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS
A. ACCOUNTING PRINCIPLES
The financial statements of the Reliance Insurance Company Savings Incentive
Plan (the "Plan") are presented on the accrual basis of accounting.
Investments are carried at market value as determined by the Trustee.
Dividends and interest are recorded when earned. Employee and employer
contributions are recorded in the period to which they are applicable.
Brokerage commissions, and other expenses incurred in connection with the
purchase or sale of securities, are charged directly to the Plan. All other
costs and expenses of the Plan are paid by Reliance Insurance Company and
participating affiliates.
B. PLAN DESCRIPTION
The following is not intended to be a complete description of the Plan.
Participants should refer to the Plan documents for a complete description of
the Plan. The original effective date of the Plan was July 1, 1967 and the
Plan was last amended effective April 1, 1994. The Plan is a defined
contribution plan designed to allow eligible employees of Reliance Insurance
Company and participating affiliates (each an "Employer") to save for their
retirement. Employees, upon completion of twelve months employment during
which they have worked a minimum of 1,000 hours, are eligible to join the
Plan. Contributions may be made on either a salary reduction or an after-tax
basis and eligible employees may contribute from 1% to 15% of their base
salaries to the Plan to be invested, as they choose, in the various funds.
An eligible employee who participates in the Plan (a "member") may elect to
have his salary reduced each pay period in an amount from 1% to 10% of his
base salary, and his Employer will make a salary reduction contribution to the
Plan on his behalf in the amount by which his base salary was reduced.
Additional limitations may be imposed under the Plan on the amount of salary
reduction contributions and savings contributions that may be elected by
highly compensated members, in order to comply with certain non-discrimination
requirements of the Internal Revenue Code. The annual limit on salary
reduction contributions by a member is determined from time to time by the
Savings Incentive Plan Committee (not to exceed the indexed limitations
contained in the Internal Revenue Code of 1986). The 1994 plan year limit is
$9,240.
Any member may elect to make after-tax savings contributions to the Plan by
authorizing payroll deductions of 1% to 15% of his base salary for each
payroll period. However, the amount a member may elect to contribute for a pay
period as savings contributions may not exceed 15% of his base salary less the
amount being contributed by him as salary reduction contributions. Members are
not required to make salary reduction contributions before they can make
savings contributions.
C. ADMINISTRATION OF THE PLAN
The Plan is administered by the Savings Incentive Plan Committee (the
"Committee") which has fiduciary responsibility for general operation of the
Plan and has the power to interpret provisions of the Plan. Members of the
Committee are appointed by the Board of Directors of Reliance Insurance
Company for indefinite terms and may resign or be removed at any time. Members
of the Committee serve without compensation for their service as such, and
Reliance Insurance Company indemnifies such members to the extent determined
by its Board of Directors.
Effective April 1, 1994, Fidelity Management Trust Company ("Fidelity")
became trustee of all funds of the Plan, except that Continental Trust Company
is trustee for the Common Stock Fund. Fidelity also acts as investment
manager. From April 1, 1993 to March 31, 1994, Continental Trust Company acted
as trustee for all the funds and, prior to April 1, 1993, PNC Bank ("PNC")
acted as trustee.
7
<PAGE>
RELIANCE INSURANCE COMPANY
SAVINGS INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
C. ADMINISTRATION OF THE PLAN--(CONTINUED)
Although Reliance Insurance Company expects to continue the Plan, the right
to amend or terminate the Plan is reserved. In the event of Plan termination,
all benefits would become fully vested and nonforfeitable and the net assets of
the Plan would be allocated as required by the Employee Retirement Income
Security Act of 1974 ("ERISA"), as amended.
D. EMPLOYER MATCHING CONTRIBUTIONS
Each Employer will make an annual "matching contribution" to a separate
"Incentive Account" with respect to the salary reduction and/or savings
contributions of each member employed by it, subject to a limit of 5% of the
member's base salary in any pay period. The amount of matching contribution
will differ depending on the Employer which employs the member. For
participating employees other than employees of the Commonwealth companies
listed below, for every dollar a member contributes to the Plan (not exceeding
a total of 5% of base salary in any pay period) and does not withdraw before
the close of the Plan year, the Employer will make a contribution of $.60.
For participating employees of Commonwealth Land Title Insurance Company, CRS
Financial Services, Inc. and Commonwealth Relocation Services, Inc., for every
dollar a member contributes to the Plan (not exceeding a total of 5% of base
salary in any pay period) and does not withdraw before the close of the Plan
year, the Employer will make a contribution of $.25, excluding any
discretionary supplemental matching contribution as described below.
Matching contributions generally must be made by the fifteenth day of
February following the close of the Plan year. In order to be entitled to the
Employer matching contribution for a Plan Year, a member must be employed by
the Employer on the last working day of the Plan year, be on an authorized
leave of absence (provided the member has not withdrawn his current year
contribution) or be entitled to receive a distribution of his account following
his retirement, death or disability.
Employer matching contributions, which may be made with Reliance Group
Holdings, Inc. ("RGH") Common Stock, will be invested in the Common Stock Fund
or the Managed Income Fund or a combination thereof as determined by the Board
of Directors of Reliance Insurance Company or a committee thereof. Prior to the
making of Employer matching contributions for each such year, the Board of
Directors or committee thereof will make a one-time determination regarding the
investment of the Employer matching contributions for such year. The Employer
matching contributions for each of the years 1991 through 1993 were invested in
the Common Stock Fund.
After the close of any year, an Employer may, in its sole discretion, make a
supplemental matching contribution. For every dollar its employees contributed
to the Plan during the year (not exceeding 5% of base salary in any pay
period), the Employers made supplemental matching contributions in cash or RGH
Common Stock as follows:
SUPPLEMENTAL MATCHING CONTRIBUTIONS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
--------------------
EMPLOYER 1993 1992 1991
-------- ------ ------ ------
<S> <C> <C> <C>
CRS Financial Services, Inc. ....................... $ .85 $ .75 $ .50
Commonwealth Land Title Insurance Company........... .85 .75 .50
Commonwealth Relocation Services, Inc. ............. .85 .75 .50
</TABLE>
8
<PAGE>
RELIANCE INSURANCE COMPANY
SAVINGS INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
E. VESTING
The rights of a member to savings contributions made by him and salary
reduction contributions made by his Employer on his behalf, and any earnings
thereon, are at all times fully vested and nonforfeitable. Matching
contributions, and any earnings thereon, become vested based on such member's
years of vesting service. A member earns one year of vesting service for each
Plan year in which such member completes at least 1,000 hours of service.
Participating employees become vested under the following schedule:
<TABLE>
<CAPTION>
VESTED
PERCENTAGE
OF THE MEMBER'S
YEARS OF VESTING SERVICE INCENTIVE ACCOUNT
------------------------ -----------------
<S> <C>
less than 2........................................... 0%
2 but less than 3..................................... 20%
3 but less than 4..................................... 40%
4 but less than 5..................................... 60%
5 but less than 6..................................... 80%
6 or more............................................. 100%
</TABLE>
F. INVESTMENT OPTIONS
Through March 31, 1993, salary reduction, savings and rollover contributions
were invested in accordance with the written directions of the member in one or
more of the following funds:
(a) Bond Fund. The assets of the Bond Fund, including the earnings
thereon, were invested in investment grade debt securities, principally
United States government and agency securities and corporate bonds.
(b) Equity Fund. The assets of the Equity Fund, including the earnings
thereon, were invested in a portfolio of domestic and foreign common
stocks.
(c) Guaranteed Fund. The assets of the Guaranteed Fund, including the
earnings thereon, were invested in guaranteed investment contracts with
insurance companies. The assets were invested in a contract with the United
Pacific Life Insurance Company, a former subsidiary of Reliance Insurance
Company.
(d) Common Stock Fund. The assets of the Common Stock Fund, including
earnings thereon, are invested in RGH Common Stock purchased by the Trustee
or contributed by the Employers. The Trustee purchases RGH Common Stock at
prevailing market prices in the open market, in privately negotiated
transactions or directly from RGH and, in the normal course of business,
the Trustee sells such stock only to meet administrative and distribution
requirements of the Plan. The value of this fund will fluctuate based on
the market price of RGH Common Stock.
Effective April 1, 1993, the Bond and Equity Funds were transferred to funds
that are invested in shares of the Fidelity Intermediate Bond Fund
("Intermediate Bond Fund") and the Fidelity Growth and Income Portfolio
("Growth and Income Fund"). On June 30, 1993, the guaranteed investment
contract issued by United Pacific Life Insurance Company to the Plan was
terminated. Effective July 1, 1993, account balances in the Guaranteed Fund
were transferred to a fund that is invested in units of the Fidelity Managed
Income Fund and two additional investments funds, the Fidelity Magellan Fund
("Magellan Fund") and the Fidelity Retirement Government Money Market Fund
("Retirement Government Money Market Fund"), were also
9
<PAGE>
RELIANCE INSURANCE COMPANY
SAVINGS INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
F. INVESTMENT OPTIONS--(CONTINUED)
made available to the members. The common stock fund described above remains in
effect. A description of the new investment options available under the Plan is
as follows:
(a) Intermediate Bond Fund. The assets of the Intermediate Bond Fund,
including the earnings thereon, are invested through shares of the Fidelity
Intermediate Bond Fund in high and upper medium grade corporate
obligations, obligations issued or guaranteed by the United States
government or any of its agencies or instrumentalities, obligations of
United States banks, commercial paper or other instruments of comparable
quality. The average portfolio maturity range is from three to ten years
with the primary objective of providing a high level of current income. The
value of this fund will fluctuate with changes in interest rates and other
market conditions.
(b) Growth and Income Fund. The assets of the Growth and Income Fund,
including the earnings thereon, are invested through shares of the Fidelity
Growth and Income Portfolio primarily in domestic and foreign common stocks
as well as convertible securities and bonds with the primary objectives of
providing long term capital appreciation, current income from dividends and
growth in income. The value of this fund will fluctuate with market
conditions.
(c) Managed Income Fund. The assets of the Managed Income Fund, including
earnings thereon, are invested through units of the Fidelity Trust Company
Managed Income Portfolio primarily in a portfolio of short-term and long-
term conventional and synthetic guaranteed investment contracts ("GICs")
and similar investment contracts with banks, which contracts have
maturities of one to seven years. Synthetic GICs generally consist of debt
obligations such as mortgage-backed and asset-backed securities, in
conjunction with a book value, benefit-responsive contract arrangement with
a third party, usually an insurance company, bank or brokerage firm. The
Fund's primary objectives are to seek preservation of capital and a
competitive level of income over time. The Fund will seek to maintain a
stable net asset value of $1.00 per unit but there is no guarantee that the
unit value will not change.
(d) Magellan Fund. The assets of the Magellan Fund, including earnings
thereon, are invested through shares of the Fidelity Magellan Fund in
domestic and foreign common stocks and other securities which are
convertible into common stock and in put and call options and futures
contracts with respect to the foregoing securities. The Fund's primary
objective is to provide long-term capital appreciation with current income
being incidental. The value of this fund will fluctuate with market
conditions.
(e) Retirement Government Money Market Fund. The assets of the Retirement
Government Money Market Fund, including earnings thereon, are invested
through shares of the Fidelity Retirement Government Money Market Portfolio
primarily in high quality money market instruments, including securities of
the United States government and foreign issuers. The Fund's primary
objective is to provide high current income with preservation of principal
and liquidity. The value of this fund will fluctuate with changes in
interest rates and other market conditions.
The selection of investment options, which may be done in increments of 10%
in any one of the above mentioned funds, pursuant to the Plan, with the
exception of Employer matching contributions, is the sole responsibility of
each member. Neither the Trustee nor the Employer shall have any responsibility
to select investment options or to advise members in selecting their investment
options. Subject to applicable provisions of law, each member assumes all risks
connected with any decrease in the market value of any securities in the funds,
and such funds shall be the sole source of payments to be made under the Plan.
10
<PAGE>
RELIANCE INSURANCE COMPANY
SAVINGS INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
G. INVESTMENTS
Other investments consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31, 1993
----------------------------------
NUMBER OF CURRENT
SHARES COST VALUE
---------- ----------- -----------
<S> <C> <C> <C>
Employee Growth and Income Fund
Fidelity Growth and Income Fund........... 1,330,437 $28,066,368 $29,562,316
Employee Intermediate Bond Fund
Fidelity Intermediate Bond Fund........... 788,299 8,445,842 8,497,864
Employee Magellan Fund
Fidelity Magellan Fund.................... 118,899 8,495,294 8,423,986
Employee Managed Income Fund
Fidelity Managed Income Fund.............. 24,337,356 24,337,356 24,337,356
Employee Retirement Government Money Market
Fund
Fidelity Retirement Government Money
Market Fund.............................. 715,222 715,222 715,222
Employee Common Stock Fund
Continental Short Term Investment II Fund. 33,082 33,082 33,082
Employer Managed Income Fund
Fidelity Managed Income Fund.............. 9,632,655 9,632,655 9,632,655
----------- -----------
Total Other Investments................. $79,725,819 $81,202,481
=========== ===========
<CAPTION>
DECEMBER 31, 1992
----------------------------------
<S> <C> <C> <C>
Employee Bond Fund
PNC Fund Managed Income Portfolio......... 723,693 $ 7,460,483 $ 7,555,352
PNC Money Market Fund..................... 133,584 133,584 133,584
----------- -----------
Total Bond Fund......................... 7,594,067 7,688,936
----------- -----------
Employee Equity Fund
PNC Money Market Fund..................... 534,116 534,116 534,116
PNC Fund Value Equity Portfolio........... 1,608,663 16,066,181 16,537,057
PNC Fund International Equity Portfolio... 318,931 3,181,376 3,093,630
PNC Fund Special Equity Portfolio......... 311,499 3,116,466 3,604,041
----------- -----------
Total Equity Fund....................... 22,898,139 23,768,844
----------- -----------
Employee Guaranteed Fund
United Pacific Life Insurance Co. GAC
#G0001................................... 30,371,847 30,371,847
PNC Money Market Fund..................... 293,534 293,534 293,534
----------- -----------
Total Employee Guaranteed Fund.......... 30,665,381 30,665,381
----------- -----------
Employee Common Stock Fund
PNC Money Market Fund..................... 42,058 42,058 42,058
Employer Common Stock Fund
PNC Money Market Fund..................... 96,658 96,658 96,658
Employer Guaranteed Fund
United Pacific Life Insurance Co. GAC
#G0001................................... 11,070,197 11,070,197
PNC Money Market Fund..................... 39,612 39,612 39,612
----------- -----------
Total Employer Guaranteed Fund.......... 11,109,809 11,109,809
----------- -----------
Total Other Investments................. $72,406,112 $73,371,686
=========== ===========
</TABLE>
11
<PAGE>
RELIANCE INSURANCE COMPANY
SAVINGS INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
H. WITHDRAWALS
Plan members are limited to one withdrawal per calendar quarter and two
withdrawals per calendar year with respect to amounts attributable to savings
contributions. The minimum withdrawal permitted is $500 (or the full value of
the member's applicable account, if less).
All amounts attributable to savings contributions must be withdrawn prior to
any hardship withdrawal of amounts attributable to Employer matching
contributions or salary reduction contributions.
The Plan's hardship withdrawal rules comply with the Internal Revenue Code of
1986. In order to make a hardship withdrawal, a Plan member must exhaust the
possibility of all other withdrawals (other than hardship withdrawals) under
the Plan and all such withdrawals and nontaxable loans available under all
other retirement plans maintained by Reliance Insurance Company and its
affiliates. Earnings credited after 1988 on salary reduction contributions are
not available for hardship withdrawals, even if the contributions were made
before 1989. Upon receiving a hardship distribution, a member is generally
suspended from making salary reduction contributions and savings contributions
to the Plan (and all other deferred compensation plans maintained by Reliance
Insurance Company and its affiliates) for one year and an additional limitation
is imposed on the amount of salary reduction contributions that can be made by
the member for the calendar year following the year of the hardship withdrawal.
I. PLAN PARTICIPANTS
Approximately 6,229 and 5,930 employees were active members of the Plan as of
December 31, 1993 and 1992, respectively, and were participants in each fund as
follows:
<TABLE>
<CAPTION>
DECEMBER
31,
-----------
1993 1992
----- -----
<S> <C> <C>
Bond Fund........................................................ -- 2,021
Common Stock Fund................................................ 5,410 5,122
Equity Fund...................................................... -- 3,100
Growth and Income Fund........................................... 3,653 --
Guaranteed Fund.................................................. -- 4,159
Intermediate Bond Fund........................................... 2,182 --
Magellan Fund.................................................... 1,350 --
Managed Income Fund.............................................. 4,043 --
Retirement Government Money Market Fund.......................... 193 --
</TABLE>
The total number of members in the Plan is less than the sum of the number of
participants in each fund since many members participate in more than one fund.
J. FEDERAL TAX CONSIDERATIONS
a. Status of Plan
The Internal Revenue Service has determined and informed the Company by a
determination letter dated June 11, 1991, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue Code
("IRC"). The Plan has been amended since receiving the determination letter.
The Plan's tax counsel believes that the Plan is designed in compliance with
the applicable requirements of the IRC assuming the Plan is amended on a timely
basis to comply with the regulations issued in connection with the Tax Reform
Act of 1986. In addition, according to the plan administrator, the plan is
currently being operated in compliance with the applicable requirements of the
IRC. Therefore, no provision for income taxes has been included in the Plan's
financial statements.
12
<PAGE>
RELIANCE INSURANCE COMPANY
SAVINGS INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
J. FEDERAL TAX CONSIDERATIONS--(CONTINUED)
b. Impact on Plan Participants
Matching contributions and salary reduction contributions, as well as
earnings on all Plan assets, are generally not subject to federal income tax
until distributed because the Plan is tax-qualified. Savings contributions are
treated as having been received by the member as part of current compensation,
and such amounts are taxable as ordinary income prior to payment into the Plan.
Because a member's savings contributions are made from income which is taxed
to such member when earned, an amount equal to such contributions is not
taxable when distributed to him. The excess of a member's account values over
his savings contributions is generally taxable income to such member only when
distributed.
K. UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
Investments are carried at market value or contract value as determined by
the Trustee. The net unrealized appreciation (depreciation) of investments
included in Net Assets Available For Plan Benefits is as follows:
<TABLE>
<CAPTION>
COMMON STOCK ALL OTHER COMBINED
FUNDS FUNDS FUNDS
------------ ----------- -----------
<S> <C> <C> <C>
Balance at January 1, 1993.............. $ 3,343,029 $ 965,574 $ 4,308,603
Change for the Year.................... 6,683,076 454,272 7,137,348
----------- ----------- -----------
Balance at December 31, 1993............ $10,026,105 $ 1,419,846 $11,445,951
=========== =========== ===========
Balance at January 1, 1992.............. $(3,115,053) $10,191,381 $ 7,076,328
Change for the Year.................... 6,458,082 (9,225,807) (2,767,725)
----------- ----------- -----------
Balance at December 31, 1992............ $ 3,343,029 $ 965,574 $ 4,308,603
=========== =========== ===========
Balance at January 1, 1991.............. $(1,342,525) $ 6,836,324 $ 5,493,799
Change for the Year.................... (1,772,528) 3,355,057 1,582,529
----------- ----------- -----------
Balance at December 31, 1991............ $(3,115,053) $10,191,381 $ 7,076,328
=========== =========== ===========
</TABLE>
L. REALIZED GAINS
Net realized gains on the disposition of investments were computed as
follows:
<TABLE>
<CAPTION>
COMMON STOCK ALL OTHER COMBINED
FUNDS FUNDS FUNDS
------------ ------------ ------------
<S> <C> <C> <C>
Year Ended December 31, 1993
Amount Realized....................... $40,099,144 $105,480,405 $145,579,549
Average Cost.......................... 38,651,402 102,039,762 140,691,164
----------- ------------ ------------
Net Realized Gain..................... $ 1,447,742 $ 3,440,643 $ 4,888,385
=========== ============ ============
Year Ended December 31, 1992
Amount Realized....................... $ 1,875,035 $ 40,003,531 $ 41,878,566
Average Cost.......................... 1,902,852 28,375,248 30,278,100
----------- ------------ ------------
Net Realized Gain (Loss).............. $ (27,817) $ 11,628,283 $ 11,600,466
=========== ============ ============
Year Ended December 31, 1991
Amount Realized....................... $ 1,015,767 $ 17,716,993 $ 18,732,760
Average Cost.......................... 983,856 14,834,517 15,818,373
----------- ------------ ------------
Net Realized Gain..................... $ 31,911 $ 2,882,476 $ 2,914,387
=========== ============ ============
</TABLE>
13
<PAGE>
RELIANCE INSURANCE COMPANY
SAVINGS INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
M. EMPLOYER AND EMPLOYEE CONTRIBUTIONS
Amounts contributed to the Plan by participating employers and employees for
Plan years 1991 through 1993 were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
EMPLOYER CONTRIBUTIONS
Reliance Insurance Company.................. $ 3,183,026 $ 2,913,757 $ 2,696,140
Reliance Group Holdings..................... 220,925 217,700 229,878
Commonwealth Land Title Insurance Company... 3,363,386 2,563,373 1,820,846
----------- ----------- -----------
TOTAL..................................... $ 6,767,337 $ 5,694,830 $ 4,746,864
=========== =========== ===========
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
EMPLOYEE CONTRIBUTIONS
Reliance Insurance Company.................. $ 8,822,223 $ 8,097,184 $ 7,389,996
Reliance Group Holdings..................... 523,214 507,892 502,784
Commonwealth Land Title Insurance Company... 6,058,771 4,127,503 3,719,041
----------- ----------- -----------
TOTAL..................................... $15,404,208 $12,732,579 $11,611,821
=========== =========== ===========
</TABLE>
N. SALES OF SUBSIDIARIES
On October 30, 1992, Commonwealth Land Title Insurance Company
("Commonwealth") sold its wholly owned mortgage insurance subsidiary,
Commonwealth Mortgage Assurance Company ("CMAC"), through a public offering of
common stock of CMAC Investment Corporation ("CMAC Investment"), a newly formed
holding company for CMAC. Effective November 6, 1992, CMAC terminated its
participation in the Plan and established a separate trust at PNC for the CMAC
Investment Savings Incentive Plan ("CMAC Investment SIP"), representing the
continuation of the Plan as applied to current employees of CMAC. CMAC employee
contributions through November 6, 1992 were made to the Plan. Employee
contributions subsequent to November 6, 1992 and the employer matching
contribution for 1992 were made to the separate trust. On April 1, 1993,
account balances of CMAC employees totaling $2,453,875 were transferred to the
separate trust. Neither the Company nor the Plan have any further liability or
obligation with respect to CMAC employees.
On July 14, 1993, RGH sold all the capital stock of its indirect wholly-owned
life insurance subsidiary, United Pacific Life Insurance Company ("UPL"), to
General Electric Capital Corporation. As a condition of the sale, the
guaranteed investment contract issued by UPL to the Plan was terminated as of
June 30, 1993. Effective July 1, 1993, account balances in the Guaranteed Funds
were transferred to the Managed Income Fund.
14
<PAGE>
RELIANCE INSURANCE COMPANY SAVINGS INCENTIVE PLAN
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1993
<TABLE>
<CAPTION>
NUMBER OF CURRENT
SHARES COST VALUE
---------- ----------- ------------
<S> <C> <C> <C>
Employee Growth and Income Fund
Fidelity Growth and Income Fund.......... 1,330,437 $28,066,368 $ 29,562,316
Employee Intermediate Bond Fund
Fidelity Intermediate Bond Fund.......... 788,299 8,445,842 8,497,864
Employee Magellan Fund
Fidelity Magellan Fund................... 118,899 8,495,294 8,423,986
Employee Managed Income Fund
Fidelity Managed Income Fund............. 24,337,356 24,337,356 24,337,356
Employee Retirement Government Money Market
Fund
Fidelity Retirement Government Money Mar-
ket Fund................................ 715,222 715,222 715,222
Employee Common Stock Fund
Continental Short Term Investment II
Fund.................................... 33,082 33,082 33,082
Reliance Group Holdings, Inc. Common
Stock................................... 696,670 3,415,552 5,573,387
----------- ------------
Total Employee Common Stock Fund....... 3,448,634 5,606,469
----------- ------------
Employer Common Stock Fund
Reliance Group Holdings, Inc. Common
Stock................................... 3,328,277 16,852,274 26,626,190
Employer Managed Income Fund
Fidelity Managed Income Fund............. 9,632,655 9,632,655 9,632,655
----------- ------------
Total Investments...................... $99,993,645 $113,402,058
=========== ============
</TABLE>
15
<PAGE>
RELIANCE INSURANCE COMPANY SAVINGS INCENTIVE PLAN
ITEM 27D--SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
INVESTMENTS PURCHASED INVESTMENTS MATURED/SOLD
---------------------------------- --------------------------------------------------------
NUMBER OF TRANSACTION NUMBER OF TRANSACTION
SHARES DATE COST SHARES DATE PROCEEDS COST GAIN
---------- ----------- ----------- ---------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
American Express Credit
Corporation Note, due
04/01/93............... 26,848,000 Various $26,848,000 26,848,000 Various $26,848,000 $26,848,000 $ --
Continental Short Term
Investment I Fund...... 5,481,217 Various 5,481,217 5,481,217 Various 5,481,217 5,481,217 --
Fidelity Growth and In-
come Fund.............. 1,635,127 Various 34,429,822 304,689 Various 7,053,628 6,708,541 345,087
Fidelity Intermediate
Bond Fund.............. 979,655 Various 10,488,498 191,355 Various 2,127,718 2,085,187 42,531
Fidelity Magellan Fund.. 126,675 Various 9,047,939 7,776 Various 596,775 574,710 22,065
Fidelity Managed Income
Portfolio.............. 45,302,425 Various 45,302,425 11,332,414 Various 11,332,414 11,332,414 --
United Pacific Life In-
surance
Guaranteed Annuity Con-
tract.................. -- Various 4,433,970 -- Various 45,439,895 45,439,895 --
PNC Money Market Fund... 5,009,851 Various 5,009,851 6,145,339 Various 6,145,339 6,145,339 --
PNC Fund Managed Income
Portfolio.............. 13,336 Various 142,894 737,029 Various 7,948,204 7,603,377 344,827
PNC Fund Value Equity
Portfolio.............. 64,098 Various 673,802 1,672,761 Various 18,514,650 16,739,983 1,774,667
</TABLE>
Under the provisions of ERISA, transactions or the aggregate of transactions
involving the same security which exceed five percent of the current value of
net assets at the beginning of the Plan year are included in this Schedule of
Reportable Transactions.
16
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
SAVINGS INCENTIVE PLAN COMMITTEE HAS DULY CAUSED THIS ANNUAL REPORT TO BE
SIGNED BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
RELIANCE INSURANCE COMPANY SAVINGS
INCENTIVE PLAN
Date: June 7, 1994
/s/ BRUCE FARBMAN
By: ____________________________
Bruce Farbman Chairperson, Savings
Incentive Plan Committee
17
