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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From to
------------ -------------
Commission File Number 1-6541
LOEWS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-2646102
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
667 Madison Avenue, New York, N.Y. 10021-8087
(Address of principal executive offices) (Zip Code)
(212) 545-2000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- ------------------------
Common Stock, par value $1.00 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 this
Form 10-K. [ ].
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
-------- --------
As at March 3, 1995, 58,916,400 shares of Common Stock of the Registrant were
outstanding and the aggregate market value of voting stock held by non-
affiliates was approximately $3,841,583,000.
Documents Incorporated by Reference:
Portions of the Loews Corporation Notice of Annual Meeting of Stockholders and
Proxy Statement dated March 23, 1995 are incorporated by reference into Part
III. (Registrant intends to file a definitive proxy statement with the
Commission prior to April 30, 1995.)
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1
LOEWS CORPORATION
INDEX TO ANNUAL REPORT ON
FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION
For the Year Ended December 31, 1994
<TABLE>
<CAPTION>
Item Page
No. PART I No.
---- ----
<S> <C> <C>
1 BUSINESS ............................................................ 3
CNA Financial Corporation ......................................... 3
Lorillard, Inc. ................................................... 18
Loews Hotels Holding Corporation .................................. 23
Bulova Corporation ................................................ 24
Diamond Offshore Drilling, Inc. ................................... 25
Other Interests ................................................... 27
2 PROPERTIES .......................................................... 27
3 LEGAL PROCEEDINGS ................................................... 28
4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ................. 29
EXECUTIVE OFFICERS OF THE REGISTRANT ................................ 29
PART II
5 MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS ............................................................ 30
6 SELECTED FINANCIAL DATA ............................................. 30
7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS .............................................. 31
8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ......................... 41
9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE ............................................... 74
PART III
Information called for by Part III has been omitted as Registrant
intends to file with the Securities and Exchange Commission not later
than 120 days after the close of its fiscal year a definitive Proxy
Statement pursuant to Regulation 14A.
PART IV
14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K ..... 74
</TABLE>
2
PART I
Item 1. Business.
Loews Corporation is a holding company. Its subsidiaries are engaged in the
following lines of business: property, casualty and life insurance (CNA
Financial Corporation, an 84% owned subsidiary); the production and sale of
cigarettes (Lorillard, Inc., a wholly owned subsidiary); the operation of hotels
(Loews Hotels Holding Corporation, a wholly owned subsidiary); the distribution
and sale of watches and clocks (Bulova Corporation, a 97% owned subsidiary); and
the operation of oil and gas drilling rigs (Diamond Offshore Drilling, Inc., a
wholly owned subsidiary). In addition, a wholly owned subsidiary owns
approximately 18% of the outstanding common stock of CBS Inc.
Unless the context otherwise requires, the terms "Company" and "Registrant" as
used herein mean Loews Corporation and its subsidiaries, on a consolidated
basis.
Information relating to the major business segments from which the Company's
consolidated revenues and income are derived is contained in Note 19 of the
Notes to Consolidated Financial Statements in Part II Item 8 of this Form 10-K.
CNA FINANCIAL CORPORATION
CNA Financial Corporation and its consolidated subsidiaries ("CNA") constitute
the twelfth largest insurance company in the United States as measured by 1993
statutory premium volume. CNA was incorporated in 1967 as the parent company of
Continental Casualty Company ("CCC"), incorporated in 1897, and Continental
Assurance Company ("CAC") incorporated in 1911. In 1975, CAC became a wholly
owned subsidiary of CCC. CNA's property and casualty insurance operations are
conducted by CCC and its property and casualty insurance affiliates, and its
life insurance operations are conducted by CAC and its life insurance
affiliates. CNA's principal business conducted through its insurance
subsidiaries is insurance. As multiple-line insurers, the insurance companies
underwrite property, casualty, life, and accident and health coverages. Their
principal market for insurance is the United States. Foreign operations are not
significant. CNA accounted for 81.27%, 80.32% and 78.70% of the Company's total
revenue for the years ended December 31, 1994, 1993 and 1992, respectively.
In the fourth quarter of 1994, CNA reached an agreement to purchase the
outstanding shares of common stock of The Continental Corporation ("CIC") under
which CNA will acquire CIC through a cash merger for approximately $1.1 billion,
or $20 a share. The acquisition will create the third largest U.S. property and
casualty insurance group and make CNA the seventh largest U.S. insurance
organization. The acquisition will be accounted for as a purchase. Accordingly
CIC's results of operations will be included in CNA's consolidated results of
operations from the date of acquisition, which is expected in the second quarter
of 1995 (see Note 20 of the Notes to Consolidated Financial Statements).
On February 28, 1995, CCC acquired all of the stock of Alexsis Inc.
("Alexsis"), a wholly owned subsidiary of Alexander & Alexander Services, Inc.
for approximately $45 million in cash. Alexsis is one of the country's three
largest property and casualty third-party administrators ("TPA") with 1994
revenues of more than $100 million and 1,300 employees. Alexsis customers are
large organizations that fully or partially self-insure their risks and
separately purchase specific administrative services, such as claims
administration, from TPA's.
3
The following provides information regarding CNA's property and casualty
insurance and life insurance operations.
PROPERTY AND CASUALTY INSURANCE
CNA's property and casualty operations market commercial and personal lines of
property and casualty insurance through independent agents and brokers.
CCC and its property and casualty insurance subsidiaries write primarily
commercial lines coverages. Customers include large national corporations, small
and medium-sized businesses, groups and associations, and professionals.
Coverages are written primarily through traditional insurance contracts, under
which risk is transferred to the insurer. Many commercial account policies are
written under retrospectively-rated contracts, which are experience-rated.
Premiums for such contracts may be adjusted, subject to limitations set by
contract, based on loss experience of the insureds. Other experience-rated
policies include provisions for adjustments to dividends based on loss
experience. Experience-rated contracts reduce, but do not eliminate risk to the
insurer. Approximately 38% of CNA's property and casualty insurance is written
on an experience-rated basis.
CNA also provides loss control, policy administration and claim administration
services under service contracts for fees. Such services are provided primarily
in the workers' compensation market where retention of risk through self
insurance or high-deductible programs has become increasingly prevalent.
Commercial business includes such lines as workers' compensation, general
liability, professional and specialty, multiple peril, and accident and health
coverages. Professional and specialty coverages include liability coverage for
architects and engineers, lawyers, accountants, medical and dental
professionals; directors and officers liability; and other specialized
coverages. CNA also assumes commercial risks from other insurers. The major
components of CNA's commercial business are workers' compensation, general
liability and professional and specialty coverages, which accounted for 26%, 18%
and 15%, respectively, of 1994 premiums earned, including premiums for
involuntary risks on these lines of business. Premiums for involuntary risks
result from mandatory participation in residual markets. CNA is required by the
various states in which it does business to provide coverage for risks that
would not otherwise be considered under CNA's underwriting standards. CNA's
share of involuntary risks is generally a function of its share of the voluntary
market by line of insurance in each state.
CNA also markets personal lines of insurance, primarily automobile and
homeowners coverages sold to individuals under monoline and package policies.
4
The following table sets forth supplemental data for the property and casualty
business:
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------
1994 1993 1992
---------------------------------------
(In millions of dollars)
<S> <C> <C> <C>
Commercial Premiums Earned:
Workers' compensation .............. $ 1,426.3 $ 1,501.5 $ 1,669.2
General liability .................. 1,261.1 1,154.5 1,176.0
Professional and specialty ......... 1,010.1 798.9 741.5
Reinsurance and other .............. 773.5 712.2 556.0
Accident and health ................ 557.1 428.3 352.6
Multiple peril ..................... 389.0 368.5 374.9
-------------------------------------
$ 5,417.1 $ 4,963.9 $ 4,870.2
=====================================
Personal Premiums Earned:
Personal lines packages ............ $ 562.5 $ 510.7 $ 447.3
Monoline automobile and property
coverages ......................... 314.2 343.5 395.0
Accident and health ................ 88.9 85.6 88.6
-------------------------------------
$ 965.6 $ 939.8 $ 930.9
=====================================
Involuntary Risks Premiums Earned (a):
Workers' compensation .............. $ 350.0 $ 292.3 $ 451.4
Commercial passenger auto .......... 54.3 50.3 44.9
Private passenger auto ............. 46.4 23.2 52.5
Property and multiple peril ........ 5.0 5.5 3.7
-------------------------------------
$ 455.7 $ 371.3 $ 552.5
=====================================
Net Investment and Other Income:
Commercial ......................... $ 1,145.2 $ 979.8 $ 1,087.3
Personal ........................... 177.6 156.1 165.3
Involuntary risks .................. 88.1 75.7 83.6
-------------------------------------
$ 1,410.9 $ 1,211.6 $ 1,336.2
=====================================
Underwriting Loss:
Commercial ......................... $ (945.7) $(1,535.6) $(2,505.9)
Personal ........................... (185.2) (99.7) (152.8)
Involuntary risks .................. (70.3) (156.5) (340.9)
-------------------------------------
$(1,201.2) $(1,791.8) $(2,999.6)
=====================================
<CAPTION> Years Ended December 31,
--------------------------------------
1994 1993 1992
--------------------------------------
(In millions of dollars)
<S> <C> <C> <C>
Trade Ratios-GAAP basis (b):
Loss ratio ........................ 81.9% 96.2% 116.7%
Expense ratio ...................... 28.3% 27.2% 26.2%
Combined ratio (before policyholder
dividends) ........................ 110.2% 123.4% 142.9%
Policyholder dividend ratio ........ 4.8% 3.9% 1.9%
Trade Ratios-Statutory Basis (b):
Loss ratio ......................... 82.2% 96.4% 116.3%
Expense ratio ...................... 27.8% 27.1% 25.6%
Combined ratio (before policyholder
dividends) ........................ 110.0% 123.5% 141.9%
Policyholder dividend ratio ........ 3.8% 3.1% 2.4%
Other Data-Statutory Basis (c):
Capital and surplus ................ $3,367.3 $3,598.4 $3,135.8
Written to surplus ratio ........... 2.0 1.7 2.0
5
----------------
(a) Property and casualty involuntary risks include mandatory participation in
residual markets, statutory assessments for insolvencies of other insurers and
other involuntary charges.
(b) Trade ratios reflect the results of CCC and its property and casualty
insurance subsidiaries. Trade ratios are industry measures of property and
casualty underwriting results. The loss ratio is the percentage of incurred
claim and claim adjustment expenses to premiums earned. Under generally accepted
accounting principles, the expense ratio is the percentage of underwriting
expenses, including the change in deferred acquisition costs, to premiums
earned. Under statutory accounting principles, the expense ratio is the
percentage of underwriting expenses (with no deferral of acquisition costs) to
premiums written. The combined ratio is the sum of the loss and expense ratios.
The policyholder dividend ratio is the ratio of dividends incurred to premiums
earned.
(c) Other data is determined on the basis of statutory accounting principles
and reflects capital contributions from CNA of $475 million in 1993. In
addition, dividends of $175, $150 and $100 million were paid to CNA by CCC in
1994, 1993 and 1992, respectively. Property and casualty insurance subsidiaries
have received, or will receive, reimbursement from CNA for general management
and administrative expenses, unallocated loss adjustment expenses and investment
expenses in the amounts of $169.6, $167.5 and $141.1 million in 1994, 1993 and
1992, respectively.
</TABLE>
The following table displays the distribution of domestic written premium by
state:
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------
State 1994 1993 1992
----- ------------------------------------
<S> <C> <C> <C>
California ............................. 11.4% 12.1% 11.8%
New York ............................... 8.6 8.4 8.0
Texas .................................. 6.5 6.2 5.7
Pennsylvania ........................... 5.7 5.9 6.1
Illinois ............................... 4.9 5.1 5.1
Florida ................................ 4.6 4.1 3.3
New Jersey ............................. 3.2 3.3 3.1
All other states (a) ................... 43.2 43.1 41.5
Reinsurance assumed:
Voluntary ............................ 5.9 6.9 7.9
Involuntary .......................... 6.0 4.9 7.5
----- ----- -----
100.0% 100.0% 100.0%
===== ===== =====
(a) No other state accounts for more than 3.0% of gross written premium.
</TABLE>
The growth and profitability of CNA's property and casualty insurance business
is dependent on many factors, including competitive and regulatory influences,
the efficiency and costs of operations, underwriting quality, the level of
natural disasters, and investment results.
In recent years, CNA's growth and earnings have been impacted by a prolonged
cycle of inadequate commercial lines pricing. CNA has intensified efforts in the
political sphere on behalf of a more predictable and equitable insurance
marketing climate. Among CNA's marketing strategies during this difficult time
are to emphasize responsible pricing over premium growth and to aggressively
adapt to changes in certain markets such as those in which self-insurance has
become important. CNA has also initiated wide-scale cost management measures.
CNA has continued actions to reduce or stabilize the costs of doing business,
including costs of health care, fraud and tort liability. Programs include
managed health care programs and intensified efforts of fighting fraud.
6
The workers' compensation line has improved steadily since 1992. Legislative
reforms have cut costs in some states, residual market losses have dropped, and
insurance regulators have sharpened their focus on workers' compensation fraud.
Property and Casualty Claim and Claim Expenses: Property and casualty claim
and claim expense reserves, except reserves for structured settlements, workers'
compensation lifetime claims and accident and health disability claims are based
on (a) case basis estimates for losses reported on direct business, adjusted in
the aggregate for ultimate loss expectations, (b) estimates of unreported losses
based upon past experience, (c) estimates of assumed insurance, (d) estimates of
future expenses to be incurred in settlement of claims, and (e) estimates of
claim recoveries. The schedule on page 5 provides information on mix of
business.
Structured settlements have been negotiated for claims on certain property and
casualty insurance policies. Structured settlements are agreements to provide
periodic payments to claimants, which are fixed and determinable as to the
amount and time of payment. Certain structured settlements are funded by
annuities purchased from CAC. Related annuity obligations are carried in future
policy benefits reserves. Obligations for structured settlements not funded by
annuities are carried at discounted values which approximate the alternative
cost of annuity purchases. Such reserves, discounted at interest rates ranging
from 6.3% to 7.5%, totaled $839.0 and $748.9 million at December 31, 1994 and
1993, respectively. Ultimate payouts under all structured settlements, funded or
unfunded, at December 31, 1994 and 1993 will approximate $2.4 and $2.2 billion,
respectively.
In 1992, CNA changed its accounting for claim reserves related to workers'
compensation lifetime claims and accident and health disability claims.
Reserving practices under both statutory and generally accepted accounting
principles allow discounting of reserves for fixed and determinable claim
obligations. Reserve discounting for these types of claims is common industry
practice. These claim reserves are discounted at interest rates ranging from
3.5% to 6.0% with mortality and morbidity assumptions reflecting current
industry experience. At December 31, 1994 and 1993, such discounted reserves
totaled $1,115 and $970 million, respectively. Ultimate payouts for these claims
are estimated to be $1.5 and $1.4 billion at December 31, 1994 and 1993,
respectively.
Claim and claim expense reserves are based on estimates, and the ultimate
liability may vary significantly from such estimates. CNA regularly reviews its
reserves, and any adjustments that are made to the reserves are reflected in
operating income in the period such adjustments become apparent.
The retention limits of CNA as a result of reinsurance of its property and
casualty business vary by type of coverage and are based on individual risks
underwritten. In general, retention limits have been increased. See additional
discussion of reinsurance in Notes 10 and 14 of the Notes to Consolidated
Financial Statements.
7
Asbestos-related and Environmental Pollution Claims
Reserves include estimated amounts for exposures to asbestos-related and
environmental pollution claims. Reserving for such claims involves significant
uncertainties for both CNA and the industry, characterized by complex and costly
litigation and further compounded by the tendency of the courts to broadly
interpret contracts beyond their original intent.
A summary of asbestos-related and environmental pollution claim and claim
expense activity follows:
<TABLE>
<CAPTION>
Claim and Claim Expenses
-------------------------------------------------
Reserves, Net of
Reinsurance Payments
December 31, Years Ended December 31,
--------------------- -------------------------
1994 1993 1994 1993 1992
--------------------- -------------------------
(In millions)
<S> <C> <C> <C> <C> <C>
Asbestos-related .......... $1,939 $2,080 $178 $204 $112
Environmental pollution .. 506 433 107 72 38
------------------------------------------------
Total ................... $2,445 $2,513 $285 $276 $150
================================================
</TABLE>
A major portion of CNA's asbestos-related claim exposure involves litigation
with Fibreboard Corporation, as discussed in Note 18 of the Notes to
Consolidated Financial Statements. Adverse reserve developments for asbestos-
related claims totaled $37, $601 and $1,689 million in 1994, 1993 and 1992,
respectively, which include approximately $500 and $1,500 million related to
Fibreboard for 1993 and 1992, respectively.
Potential exposures also exist for claims involving environmental pollution,
including toxic waste clean-up. Environmental pollution clean-up is the subject
of both federal and state regulation. By some estimates there are thousands of
potential waste sites subject to clean-up. The insurance industry is involved in
extensive litigation regarding coverage issues. Judicial interpretations in many
cases have expanded the scope of coverage and liability beyond the original
intent of the policies. CNA has not attributed any reinsurance to reserves for
unreported environmental pollution claims. The reserves in the table above are
net of reinsurance recoverables of $3 and $5 million at December 31, 1994 and
1993, respectively. Estimating loss reserves is a difficult process as there are
many factors that can ultimately affect the final settlement of a claim and,
therefore, the reserve that is needed. Changes in the law, results of
litigation, medical costs, the cost of repair materials and labor rates can all
impact ultimate claim costs. In addition, time can be a critical part of
reserving determinations since the longer the span between the incidence of a
loss and the payment or settlement of the claim, the more variable the ultimate
settlement amount can be. Accordingly, short-tail claims, such as property
damage claims, tend to be more reasonably predictable than long-tail claims,
such as general liability and professional liability claims.
8
Reserve Development
The table below provides a reconciliation between beginning and ending claim
and claim expense reserve balances for 1994, 1993 and 1992. Not included in the
table below is premium development related to certain insurance policies subject
to retroactive premium adjustments, which are based on various factors including
loss experience.
<TABLE>
<CAPTION>
Changes in Reserves for
Property and Casualty
Claim and Claim Expenses
Years Ended December 31,
-------------------------------------
1994 1993 1992
-------------------------------------
(In millions)
<S> <C> <C> <C>
Reserves at beginning of year:
Gross .............................. $20,812 $20,034 $17,712
Ceded reinsurance .................. 2,491 2,867 3,297
-----------------------------------
Net .............................. 18,321 17,167 14,415
-----------------------------------
Net incurred claim and claim expenses:
Provision for insured events of
current year ...................... 5,611 5,388 5,708
(Decrease) increase in provision for
insured events of prior years (a) . (71) 590 1,617
Amortization of discounts .......... 100 94 104
-----------------------------------
Total net incurred ............... 5,640 6,072 7,429
-----------------------------------
Net payments:
Attributable to current year events 1,388 1,202 1,260
Attributable to prior year events .. 3,629 3,706 3,411
Amortization of discounts .......... 10 10 6
-----------------------------------
Total net payments ............... 5,027 4,918 4,677
-----------------------------------
Net reserves at end of year .......... $18,934 $18,321 $17,167
===================================
Gross reserves at beginning of year .. $20,812 $20,034 $17,712
-----------------------------------
Gross incurred claim and claim
expenses:
Provision for insured events of
current year ...................... 6,125 5,817 6,382
Increase in provision for insured
events of prior years ............. 213 305 1,487
Amortization of discounts .......... 100 94 104
-----------------------------------
Total gross incurred ............. 6,438 6,216 7,973
-----------------------------------
Gross payments:
Attributable to current year events 1,468 1,278 1,348
Attributable to prior year events .. 4,133 4,150 4,297
Amortization of discounts .......... 10 10 6
-----------------------------------
Total gross payments ............. 5,611 5,438 5,651
-----------------------------------
Gross reserves at end of year ........ $21,639 $20,812 $20,034
===================================
</TABLE>
(a) Includes $500 and $1,500 for Fibreboard in 1993 and 1992, respectively. See
Note 18 of the Notes to Consolidated Financial Statements.
9
The loss reserve development table below illustrates the change over time of
reserves established for property and casualty claim and claim expense at the
end of various calendar years. The first section shows the reserves as
originally reported at the end of the stated year. The second section, reading
down, shows the cumulative amounts paid as of the end of successive years with
respect to that reserve liability. The third section, reading down, shows
retroactive reestimates of the original recorded reserve as of the end of each
successive year which is the result of CNA's expanded awareness of additional
facts and circumstances that pertain to the unsettled claims. The last section
compares the latest reestimated reserve to the reserve originally established,
and indicates whether or not the original reserve was adequate or inadequate to
cover the estimated cost of unsettled claims.
The loss reserve development table is cumulative and, therefore, ending
balances should not be added since the amount at the end of each calendar year
includes activity for both the current and prior years.
<TABLE>
<CAPTION>
Schedule of Property and Casualty Loss Reserve Development
Years Ended December 31,
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
-------------------------------------------------------------------------------------------------------------
(In millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross reserves for
unpaid claim and
claim expenses .... - - - - - - 16,530 17,712 20,034 20,812 21,639
Ceded recoverable ... - - - - - - 3,440 3,297 2,867 2,491 2,705
--------------------------------------------------------------------------------------
Net reserves for
unpaid claim and
claim expenses ..... 3,931 4,873 6,243 8,045 9,552 11,267 13,090 14,415 17,167 18,321 18,934
Net Paid (Cumulative)
as of:
One year later .... 1,330 1,594 1,335 1,763 2,040 2,670 3,285 3,411 3,706 3,629 -
Two years later ... 1,936 2,932 2,383 2,961 3,622 4,724 5,623 6,024 6,354 - -
Three years later . 2,493 3,022 3,197 4,031 4,977 6,294 7,490 7,946 - - -
Four years later .. 2,963 3,642 3,963 5,007 6,078 7,534 8,845 - - - -
Five years later .. 3,407 4,175 4,736 5,801 6,960 8,485 - - - - -
Six years later ... 3,766 4,735 5,339 6,476 7,682 - - - - - -
Seven years later . 4,156 5,233 5,880 7,061 - - - - - - -
Eight years later . 4,512 5,668 6,382 - - - - - - - -
Nine years later .. 4,901 6,116 - - - - - - - - -
Ten years later ... 5,291 - - - - - - - - - -
Net Reserves
Reestimated as of:
End of initial year 3,931 4,873 6,243 8,045 9,552 11,267 13,090 14,415 17,167 18,321 18,934
One year later .... 3,985 5,047 6,642 8,086 9,737 11,336 12,984 16,032 17,757 18,250 -
Two years later ... 4,122 5,573 6,763 8,345 9,781 11,371 14,693 16,810 17,728 - -
Three years later . 4,659 5,788 6,989 8,424 9,796 13,098 15,737 16,944 - - -
Four years later .. 4,855 6,170 7,166 8,516 11,471 14,118 15,977 - - - -
Five years later .. 5,171 6,422 7,314 10,196 12,496 14,395 - - - - -
Six years later ... 5,395 6,566 9,022 11,239 12,742 - - - - - -
Seven years later . 5,486 8,317 10,070 11,480 - - - - - - -
Eight years later . 7,215 9,365 10,317 - - - - - - - -
Nine years later .. 8,270 9,635 - - - - - - - - -
Ten years later ... 8,524 - - - - - - - - - -
--------------------------------------------------------------------------------------
Total net (deficiency)
redundancy ......... (4,593) (4,762) (4,074) (3,435) (3,190) (3,128) (2,887) (2,529) (561) 71 -
======================================================================================
Reconciliation to
Gross Reestimated
Reserves:
Net reserves
reestimated ........ - - - - - - 15,977 16,944 17,728 18,250 -
Reestimated ceded
recoverable ........ - - - - - - 3,466 3,293 2,828 2,775 -
--------------------------------------------------------------------------------------
Total gross
reestimated reserves - - - - - - 19,443 20,237 20,556 21,025 -
======================================================================================
Net (Deficiency)
Redundancy Related
to:
Asbestos-related
claims ........... (2,653) (2,682) (2,718) (2,670) (2,612) (2,512) (2,374) (2,326) (637) (37) -
Environmental
pollution claims . (777) (778) (778) (763) (757) (730) (719) (673) (626) (180) -
Other ............. (1,163) (1,302) (578) (2) 179 114 206 470 702 288 -
--------------------------------------------------------------------------------------
Total net (deficiency)
redundancy ......... (4,593) (4,762) (4,074) (3,435) (3,190) (3,128) (2,887) (2,529) (561) 71 -
======================================================================================
</TABLE>
10
Most of CNA's unfavorable reserve development has been due to asbestos-related
and environmental pollution claims. A discussion of CNA's litigation with
Fibreboard Corporation regarding asbestos-related bodily injury claims can be
found in Note 18 of the Notes to Consolidated Financial Statements.
LIFE INSURANCE
CNA's life insurance operations market individual and group insurance products
through licensed agents, most of whom are independent contractors, who sell life
insurance for CNA and for other companies on a commission basis. Individual
insurance products include life, accident and health and annuity products, and
are sold to individuals and small businesses.
The individual life products currently being marketed consist primarily of
term, universal life and participating policies. Included in the universal life
category is a salary allotment product marketed through employers as a
supplement to employers' benefit plans. Premiums are collected from employees
through payroll deduction. The individual accident and health policies currently
being marketed are long-term disability products. Individual annuity products
are primarily periodic payment plans.
Group insurance products include life, accident and health and pension
products, and are sold to employers, employer associations and trusts ranging in
size from small local employers to large multinational corporations. The group
accident and health plans are primarily major medical and hospitalization. Most
of the major medical and hospitalization plans are written under experience-
rated contracts or contracts to provide claim administrative services only.
CNA's products are designed and priced using assumptions CNA management
believes to be reasonably conservative for mortality, morbidity, persistency,
expense levels and investment results. Underwriting practices that CNA
management believes are prudent are followed in selecting the risks that will be
insured. Further, actual experience related to pricing assumptions is monitored
closely so that prospective adjustments to these assumptions may be implemented
as necessary. CNA mitigates the risk related to persistency by including
contractual surrender charge provisions in its ordinary life and annuity
policies in the first five to ten years, thus providing for the recovery of
acquisition expenses. The investment portfolios supporting interest sensitive
products, including universal life and individual annuities, are managed as a
separate portfolio to minimize liquidity and interest rate risk.
Profitability in the health insurance business continues to be impacted by
intense competition and rising medical costs. CNA has aggressively pursued
expense reduction through increases in automation and other productivity
improvements. Further, increasing costs of health care have resulted in a
continued market shift away from traditional forms of health coverage toward
managed care products and experience-rated plans. CNA's ability to compete in
this market will be increasingly dependent on its ability to control costs
through managed care techniques, innovation, and quality customer focused
service in order to properly position CNA in this evolving health care
environment.
Although the federal government's proposed comprehensive health care reform
was not enacted in 1994, some health care initiatives could emerge in 1995.
Possible reforms include legislation affecting tort reform, medical malpractice,
insurance market reforms and tax laws affecting health care and
long term care benefits. CNA has urged a meaningful role for the private sector
in any proposed plan. The present health care system is clearly in need of
reform, and CNA has emphasized that the competitive strengths of the insurance
industry must be an integral part of a workable solution.
11
The following table sets forth supplemental data for the life insurance
business:
<TABLE>
<CAPTION> Years Ended December 31,
----------------------------------
1994 1993 1992
----------------------------------
(In millions of dollars)
<S> <C> <C> <C>
Individual Premiums:
Life and annuities ................. $ 369.4 $ 312.1 $ 294.7
Accident and health ................ 32.6 30.9 27.1
---------------------------------
$ 402.0 $ 343.0 $ 321.8
=================================
Group Premiums:
Life ............................... $ 138.7 $ 107.2 $ 100.7
Accident and health (a) ............ 2,111.2 1,983.0 1,957.5
Annuities .......................... 26.3 9.0 57.7
---------------------------------
$2,276.2 $2,099.2 $2,115.9
=================================
Net Investment Income and Other Income:
Individual ......................... $ 193.8 $ 154.2 $ 163.0
Group .............................. 166.4 142.8 156.6
---------------------------------
$ 360.2 $ 297.0 $ 319.6
=================================
Income Excluding Realized Capital
Gains, Before Income Tax:
Individual ......................... $ 47.3 $ 14.5 $ 22.5
Group .............................. 87.1 51.9 56.1
---------------------------------
$ 134.4 $ 66.4 $ 78.6
=================================
Gross Life Insurance in Force:
Individual (b) ..................... $ 80,560 $ 76,835 $ 75,569
Group .............................. 46,873 35,413 29,643
---------------------------------
$127,433 $112,248 $105,212
=================================
Other Data-Statutory Basis (c):
Capital and surplus ................ $1,054.6 $1,022.0 $1,003.0
Capital and surplus-percent of total
liabilities (as defined) .......... 29.4% 30.1% 33.4%
Participating policyholders'-percent
of gross life insurance in force .. .9% 1.1% 1.2%
--------------
(a) Group accident and health premiums include contracts involving U.S.
Government employees and their dependents amounting to approximately $1.8, $1.7
and $1.6 billion in 1994, 1993 and 1992, respectively.
(b) Lapse ratios as measured by surrenders and withdrawals as a percentage of
average ordinary life insurance in force were 9.7%, 9.7% and 8.6%, in 1994, 1993
and 1992, respectively.
(c) Other Data is determined on the basis of statutory accounting principles.
Life insurance subsidiaries have received, or will receive, reimbursement from
CNA for general management and administrative expenses and investment expenses
in the amounts of $24.7, $25.6 and $24.5 million in 1994, 1993 and 1992,
respectively. Statutory capital and surplus as a percent of total liabilities is
determined after excluding Separate Account liabilities and reclassifying the
Asset Valuation and Interest Maintenance Reserves (statutorily defined and
created reserves) as surplus.
</TABLE>
12
Annuities and Guaranteed Investment Contracts
CAC writes the majority of its annuities and guaranteed investment contracts
("GIC's") in a fixed or non-variable Separate Account, which is permitted by
Illinois Insurance statutes. CAC guarantees principal and a specified return to
GIC contractholders. This guarantee affords the contractholders additional
security, in the form of CAC's general account surplus, which supports any
principal and/or guaranteed interest payment shortfalls of the Separate Account.
CNA manages the liquidity and interest rate risks on the GIC portfolio by
matching the GIC assets and liabilities on the basis of duration and maintaining
market value surrender adjustments on the majority of the contracts.
The table below shows a comparison of the duration of assets and liabilities
for the GIC portfolio, the investment yield, the weighted average interest
crediting rates and withdrawal characteristics of the GIC portfolio.
<TABLE>
<CAPTION>
December 31,
-----------------------------------
1994 1993 1992
-----------------------------------
<S> <C> <C> <C>
Duration in years:
Assets ............................. 3.23 2.68 3.04
Liabilities ........................ 2.99 2.73 2.69
---------------------------------
Mismatch ........................ .24 (.05) .35
=================================
Weighted average investment yield .... 7.67% 7.11% 8.05%
=================================
Weighted average interest crediting
rates ............................... 7.53% 7.74% 8.32%
=================================
Withdrawal Characteristics:
With market value adjustment ....... 79% 81% 83%
Non-withdrawable ................... 15 13 12
Without market value adjustment .... 6 6 5
---------------------------------
Total ........................... 100% 100% 100%
=================================
</TABLE>
As shown above, the investment yield at December 31, 1994 was more than the
average crediting rate. The investment yields at December 31, 1993 and 1992 were
less than the average crediting rates. This resulted from the reinvestment of
proceeds from security sales that generated substantial gains, at rates that
were lower than those of the securities sold. However, because the security
sales created a larger asset base to reinvest, the aggregate future cash flows
from interest and principal were substantially unchanged and sufficient to meet
the product obligations.
INVESTMENTS
CNA's general account investment portfolio is managed to maximize after-tax
investment return, while minimizing credit risks with investments concentrated
in high quality securities to support its insurance underwriting operations. At
December 31, 1994, approximately 14% of CNA's general account portfolio is
invested in long-term state and municipal bonds in order to maximize after-tax
yield and provide for a more stable yield on the portfolio with a higher quality
of investment than may otherwise be available.
CNA has the capacity to hold its fixed income portfolio to maturity. However,
securities may be sold as part of CNA's asset/liability strategies or to take
advantage of investment opportunities generated by changing interest rates,
prepayments, tax and credit considerations, or other similar factors.
Accordingly, the fixed income securities are classified as available-for-sale.
CNA's portfolio is managed based on the following investment strategies: (i)
diversification is used to limit exposures to any one issue or issuer, and (ii)
in general, the public market is used in order to provide liquidity.
13
Historically, CNA has maintained short-term assets at a level that provided
for liquidity to meet its short-term obligations, principally anticipated claim
payments. At December 31, 1994, short-term investments primarily consisted of
U.S. treasury bills and high-grade commercial paper. The major components of the
short-term investment portfolio were $2.5 billion of collateral for securities
sold under agreements to repurchase, $1.0 billion in an escrow account (see Note
1 of the Notes to Consolidated Financial Statements) and approximately $1.5
billion of other short-term investments.
The following summarizes CNA's distribution of general account investments:
<TABLE>
<CAPTION>
December 31,
---------------------
1994 1993
---------------------
(In millions)
<S> <C> <C>
Fixed maturities:
Tax-exempt bonds ................................... $ 3,770 $ 5,015
Taxable bonds ...................................... 16,629 12,145
Redeemable preferred stocks ........................ 429 448
Common stocks ........................................ 755 508
Mortgage loans and real estate ....................... 47 62
Policy loans ......................................... 176 174
Other invested assets ................................ 101 67
Short-term investments ............................... 5,036 6,944
---------------------
Total investments ............................... $26,943 $25,363
=====================
</TABLE>
CNA's general account fixed income portfolio has consistently been of high
quality as illustrated in the following table using the Standard & Poor's
ratings convention (see Note on page 15).
<TABLE>
<CAPTION>
December 31,
---------------------
1994 1993
---------------------
<S> <C> <C>
AAA .................................................. 82% 77%
AA ................................................... 6 8
A .................................................... 5 7
BBB .................................................. 2 5
Below BBB ............................................ 5 3
-------------------
Total ........................................... 100% 100%
===================
</TABLE>
CNA's Separate Account investment portfolio is managed to specifically support
the underlying insurance products (see the discussion of annuities and GIC's in
"Life Insurance" above). Approximately 88%, or $5.2 billion, of Separate Account
investments are used to fund GIC's; the remaining investments are used to fund
variable products. Approximately 88% of the GIC investment portfolio is
comprised of taxable fixed income securities. The quality of the GIC fixed
income portfolio is as follows (see Note on page 15):
<TABLE>
<CAPTION>
December 31,
--------------------
1994 1993
--------------------
<S> <C> <C>
AAA .................................................. 49% 44%
AA ................................................... 5 6
A .................................................... 13 18
BBB .................................................. 9 13
Below BBB ............................................ 24 19
------------------
Total ........................................... 100% 100%
==================
</TABLE>
14
Note: The bond ratings shown in the two tables above are primarily from
Standard & Poor's (95% of the general account portfolio and 94% of the GIC
portfolio in 1994). In the case of private placements and other unrated
securities, comparable internal ratings are developed by CNA. These ratings are
derived by management using available information on the issuer to assess the
credit risk. Reference also may be made to similar instruments of the issuer
that are rated by Standard & Poor's. In the case of unrated municipal bonds, an
AAA rating may be assigned to issues with financial guarantee insurance.
CNA actively manages its high yield bonds and maintains the level of such
investments at prudent levels. In 1994, the level of high yield investments
within the GIC portfolio increased $34 million to $1.1 billion at year end. This
increase is a result of the relative attractiveness of the high yield investment
market in comparison to other investment opportunities during the year. Although
the level of high yield investments has increased, the components of the high
yield portfolio have shifted toward lower risk issues, with B and BB rated bonds
comprising 95% of the high yield portfolio at December 31, 1994, compared to 91%
at the end of 1993 and 82% at the end of 1992. High yield securities generally
involve a greater degree of risk than that of investment grade securities.
Expected returns should, however, compensate for the added risk. The risk is
also considered in the interest rate assumptions in the underlying insurance
products, Further, CNA's investment in real estate and mortgage loans amounted
to less than one-half of one percent of its total assets, substantially below
industry averages.
At December 31, 1994 and 1993, high yield securities within the general and
GIC portfolios were carried at fair value and amounted to $2.1 and $1.8 billion,
respectively. Amortized cost exceeded market value for high yield securities by
approximately $138 million at December 31, 1994 compared to December 31, 1993
when market value exceeded amortized cost by $72 million.
Included in CNA's 1994 AAA-rated fixed income securities (general and GIC
portfolios) are $4.6 billion of asset-backed securities, consisting of
approximately 50% in collateralized mortgage obligations ("CMO's"), 34% in U.S.
government agency issued pass-through certificates, and 16% in corporate asset-
backed obligations. The majority of CMO's held are U.S. government agency issues
which are actively traded in liquid markets and are priced monthly by broker-
dealers. CNA limits the risks associated with interest rate fluctuations and
prepayment by concentrating its CMO investments in planned amortization classes
with relatively short principal repayment windows. CNA generally does not invest
in complex mortgage derivatives without readily ascertainable market prices.
OTHER
Competition: All aspects of the insurance business are highly competitive.
CNA's insurance operations compete with a large number of stock and mutual
insurance companies and other entities for both producers and customers and must
continuously allocate resources to refine and improve insurance products and
services. There are approximately 3,900 companies that sell property and
casualty insurance in the United States, about 900 of which operate in all or
most states. CCC is ranked as the sixth largest property and casualty insurance
organization based on statutory net premiums written in 1993. There are
approximately 1,800 companies selling life insurance (including health insurance
and pension products) in the United States. CAC is ranked as the twenty-third
largest life insurance organization based on consolidated statutory premium
revenue in 1993.
Dividends by Insurance Subsidiaries: The payment of dividends to CNA by its
insurance affiliates without prior approval of the Illinois Insurance Department
("IID") is limited to formula amounts determined in accordance with the
accounting practices prescribed or permitted by the IID. The current formula
limits dividends, without approval of the insurance commissioner, to the greater
of 10% of prior year statutory surplus or prior year statutory net income less
the aggregate of all dividends paid during the twelve months prior to the date
of payment. For 1995, approximately $336 million in dividends could be paid to
CNA by its insurance affiliates without prior approval. The National Association
of Insurance Commissioners ("NAIC") Financial Regulation Standards and
Accreditation Committee approved the Illinois dividend formula as complying with
the NAIC Model Dividend Law. All dividends must be reported to the insurance
department within five business days of declaration and ten days prior to
payment.
15
Regulation: The insurance industry is subject to comprehensive and detailed
regulation and supervision throughout the United States. Each state has
established supervisory agencies with broad administrative power relative to
licensing insurers and agents, approving policy forms, establishing reserve
requirements, maintaining guarantee funds, fixing minimum interest rates for
accumulation of surrender values and maximum interest rates of policy loans,
prescribing the form and content of statutory financial reports and regulating
solvency and the type and amount of investments permitted. Regulatory powers
also extend to premium rate regulations which require that rates not be
excessive, inadequate or unfairly discriminatory. In addition to regulation of
dividends by insurance subsidiaries discussed above, intercompany transfers of
assets may be subject to prior notice or approval, depending on the size of such
transfers and payments in relation to the financial position of the insurance
affiliates making the transfer.
The trend for legislation and voter initiatives continues, particularly for
personal lines products, directly impacting insurance rate development, rate
application and the ability of insurers to cancel or renew insurance policies.
Restrictions on the consideration of certain expenses, limits on services
provided by advisory organizations and politically suppressed workers'
compensation rates in certain states continue to be of concern.
Insurers are also required by the states to provide coverage to risks which
would not otherwise be considered eligible by the insurers. Each state dictates
the types of insurance and the level of coverage which must be provided to such
involuntary risks. CNA's insurance subsidiaries share of these involuntary risks
is generally a function of their respective share of the voluntary market by
line of insurance in each state.
In recent years, insolvencies of a few large insurers previously believed to
be on solid financial ground by many rating agencies and state regulators led to
increased scrutiny of state regulated insurer solvency requirements by certain
members of the U.S. Congress. Had Congress formally adopted initiatives in the
103rd Congress, insurers would have been subject to federal solvency regulation.
In response to this challenge the NAIC developed industry minimum Risk-Based
Capital ("RBC") requirements, established a formal state accreditation process
designed to minimize the diversity of approved statutory accounting and
actuarial practices, and has increased the annual statutory statement disclosure
requirements.
RBC requirements were first effective for life insurers in 1993 and for
property and casualty insurers in 1994. The RBC formulas were designed to
identify an insurer's minimum capital requirements based upon the inherent risks
(e.g., asset default, credit and insurance) of its operations. In addition to
the minimum capital requirements, the RBC formula and related regulations
identify various levels of capital adequacy and corresponding action that the
state insurance departments should initiate. The level of capital adequacy below
which insurance departments would take action is defined as the Company Action
Level. As of December 31, 1994, all of CNA's life insurance affiliates, and
property and casualty domestic affiliates have adjusted capital amounts in
excess of NAIC Company Action Levels.
The NAIC established minimum capital requirements, and also maintains the
Insurance Regulatory Information System ("IRIS"), which assists state insurance
departments in overseeing the financial condition of both life and property and
casualty insurers. These tests are in the form of ratios, and have a range of
results characterized as "usual" by the NAIC. The NAIC IRIS user guide regarding
these ratios specifically states that "Falling outside the usual range is not
considered a failing result..." and "...in some years it may not be unusual for
financially sound companies to have several ratios with results outside the
usual range." It is important, therefore, that IRIS ratio test results be
reviewed carefully in conjunction with all other financial information.
16
CCC had one IRIS ratio with an unusual value in 1994, three in 1993 and four
in 1992. The ratio with an unusual value in 1994 is the two year overall
operating ratio. The three IRIS ratios with unusual values in 1993 were the two
year overall operating, investment yield, and the two year reserve development
ratios. The four IRIS ratios with unusual values in 1992 were the two year
overall operating, the change in surplus, and both the one and two year reserve
development ratios. Catastrophe losses and reserve increases associated with
Fibreboard Corporation litigation (see Note 18 of the Notes to Consolidated
Financial Statements) recognized in 1992 and 1993 triggered the unusual values
for the operating ratios generated in 1993 and 1994 and development ratios
generated in 1993. Additionally, lower interest rates in the capital markets in
1993, coupled with a proportionately large short-term investment portfolio,
triggered the unusual value for the investment yield ratio.
CAC had no IRIS ratios with unusual values in 1994. CAC had two unusual values
for IRIS ratios in 1993, net gain to total income and change in net written
premium and one unusual value for IRIS ratios in 1992, net gain to total income.
CAC's reported statutory net income was adversely affected in both 1993 and 1992
by the transfer of significant realized capital gains to the Interest
Maintenance Reserve and depressed investment earnings. The unusual value for
change in premium ratio primarily relates to decreases in the Separate Account
annuity products fund deposits.
Federal measures, which if reintroduced in the 104th Congress and enacted
would significantly affect the insurance business, include proposals for
directly regulating insurance company solvency as well as repeal of the
McCarran-Ferguson Act. This Act exempts certain aspects of insurance from
federal regulation to the extent regulated by the states. The potential for
federal health care reform has been widely publicized and debated over the past
year. Although legislative reforms were not enacted in 1994, some health care
reform could emerge in 1995. Possible reforms include legislation affecting tort
reform, medical malpractice, insurance market reforms and tax laws affecting
health care and long term care benefits.
Although the courts and legislatures are often asked to expand liability,
there is a growing trend among business and professional organizations to wage
campaigns, which in several instances have been successful, aimed at limiting
their liability risks. Several states have adopted and some are considering
"tort reform" measures which, among other things, limit non-economic and
punitive damages and otherwise limit damage awards in product liability and
malpractice cases. The U.S. House of Representatives has passed three bills
providing for significant tort reform. The passage of these bills, in their
present form, by the Senate is uncertain.
Reinsurance: CNA assumes and cedes insurance with other insurers and
reinsurers and members of various reinsurance pools and associations. CNA
utilizes reinsurance arrangements to limit its maximum loss, to provide greater
diversification of risk and to minimize exposures on larger risks. The
reinsurance coverages are tailored to the specific risk characteristics of each
product line with CNA's retained amount varying by type of coverage. Generally,
reinsurance coverage for property risks is on an excess of loss, per risk basis.
Liability coverages are generally reinsured on a quota share basis in excess of
CNA's retained risk.
The ceding of insurance does not discharge the primary liability of the
original insurer. CNA places reinsurance with other carriers only after careful
review of the nature of the contract and a thorough assessment of the
reinsurers' credit quality and claim settlement performance. Further, for
carriers that are not authorized reinsurers in Illinois, CNA receives
collateral, primarily in the form of bank letters of credit, securing a large
portion of the recoverables. Such collateral totaled approximately $165 and $155
million at December 31, 1994 and 1993, respectively. CNA's largest recoverable,
including prepaid reinsurance premiums, was approximately $348 and $484 million
with Lloyd's of London at December 31, 1994 and 1993, respectively.
17
Properties: CNA Plaza, owned by CAC, is a 1,421,000 square foot office complex
located at 333 S. Wabash, Chicago, Illinois. The forty-five story office
building serves as the home office for CNA and its insurance subsidiaries. An
adjacent building (a 614,000 square foot building located at 55 E. Jackson
Blvd.), jointly owned by CCC and CAC, is partially situated on grounds under
leases expiring in 2058. Approximately 35% of the adjacent building is leased to
non-affiliates.
CNA also maintains four regional offices and forty branch offices and
processing centers in major cities throughout the United States. This office
space is leased except for offices located in three CNA owned buildings.
LORILLARD, INC.
The Company's wholly owned subsidiary, Lorillard, Inc. ("Lorillard"), is
engaged, through its subsidiaries, in the production and sale of cigarettes. The
principal cigarette brand names of Lorillard are Newport, Kent and True.
Lorillard's largest selling brands are the Newport and Kent brands, which
accounted for approximately 69% and 13%, respectively, of Lorillard's sales in
1994. Substantially all of Lorillard's sales are in the United States.
Lorillard's major trademarks outside of the United States were sold in 1977.
Lorillard accounted for 14.29%, 13.95% and 15.96% of the Company's total revenue
for the years ended December 31, 1994, 1993 and 1992, respectively.
Smoking and Health and Related Matters: For a number of years reports of the
asserted harmful health effects of cigarette smoking have engendered significant
adverse publicity for the cigarette industry, have caused a decline in the
social acceptability of cigarette smoking and have resulted in the
implementation of numerous restrictions on the marketing, advertising and use of
cigarettes. Along with significant increases in federal and state excise taxes
on cigarettes, these actions have, and are likely to continue to have, an
adverse effect on cigarette sales.
As a result of the growing concern over the asserted health effects of
smoking, in recent years the number of lawsuits against tobacco companies
seeking damages related to health effects alleged to have resulted from
cigarette smoking or exposure to cigarette smoking has increased. For additional
discussion of legal proceedings relating to Lorillard and the tobacco industry,
see Note 18 of the Notes to Consolidated Financial Statements.
The Federal Comprehensive Smoking Education Act, which became effective in
1985, requires the use on cigarette packaging and advertising of one of the
following four warning statements, on a rotating basis: (1) "SURGEON GENERAL'S
WARNING: Smoking Causes Lung Cancer, Heart Disease, Emphysema, and May
Complicate Pregnancy." (2) "SURGEON GENERAL'S WARNING: Quitting Smoking Now
Greatly Reduces Serious Risks to Your Health." (3) "SURGEON GENERAL'S WARNING:
Smoking By Pregnant Women May Result in Fetal Injury, Premature Birth, and Low
Birth Weight." (4) "SURGEON GENERAL'S WARNING: Cigarette Smoke Contains Carbon
Monoxide." Four shortened versions of these statements are required, on a
rotating basis, for use on billboards. This law also requires that each person
who manufactures, packages or imports cigarettes shall annually provide to the
Secretary of Health and Human Services a list of the ingredients added to
tobacco in the manufacture of cigarettes. Such list of ingredients may be
submitted in a manner which does not identify the company which uses the
ingredients or the brand of cigarettes which contains the ingredients.
18
Prior to the effective date of the Comprehensive Smoking Education Act,
federal law had, since 1965, required that cigarette packaging bear a warning
statement which from 1971 to 1985 was as follows: "Warning: The Surgeon General
Has Determined That Cigarette Smoking Is Dangerous To Your Health." In addition,
in 1972 Lorillard and other cigarette manufacturers had agreed, pursuant to
consent orders entered into with the Federal Trade Commission ("FTC"), to
include this health warning statement in print advertising, on billboards and on
certain categories of point-of-sale display materials relating to cigarettes. In
addition, advertising of cigarettes has been prohibited on radio and television
since 1971.
Studies with respect to the alleged health risk to nonsmokers of environmental
tobacco smoke ("ETS") have received significant publicity. In 1986, the Surgeon
General of the United States and the National Academy of Sciences reported that
ETS puts nonsmokers at an increased risk of lung cancer and respiratory illness.
In January 1993, the United States Environmental Protection Agency released a
report (the "EPA Risk Assessment") concluding that ETS is a human lung
carcinogen in adults, causes increased respiratory tract disease, middle ear
disorders and increases the severity and frequency of asthma in children.
In recent years, many federal, state, local and municipal governments and
agencies, as well as private businesses, have adopted legislation or regulations
which prohibit or restrict, or are intended to discourage, smoking, including
legislation or regulations prohibiting or restricting smoking in various places
such as public buildings and facilities, stores and restaurants, on domestic
airline flights and in the workplace, and the sale of cigarettes in vending
machines. This trend has increased significantly since the release of the EPA
Risk Assessment. Additional laws, regulations and policies intended to prohibit,
restrict or discourage smoking are being proposed or considered by various
federal, state and local governments, agencies and private businesses with
increasing frequency.
A 1984 federal law established a Technical Study Group to conduct a study and
report to the Congress regarding the technical and commercial feasibility of
developing cigarettes that will have a minimum propensity to ignite upholstered
furniture or mattresses. The Technical Study Group concluded in 1987 that it was
technically feasible and may be commercially feasible to develop such
cigarettes. In accordance with a 1990 federal law the Consumer Product Safety
Commission issued a report in August 1993, concluding that, while it is
practicable to develop a performance standard to reduce cigarette ignition
propensity, it is unclear that such a standard will effectively address the
number of cigarette ignited fires. Several states also are considering
legislation in this area.
From time to time, bills have been introduced in Congress, among other things,
to end or limit the price supports for leaf tobacco; to prohibit all tobacco
advertising and promotion; to require new health warnings on cigarette packages
and advertising; to subject cigarettes generally to regulation under the
Consumer Products Safety Act; to authorize the establishment of various anti-
smoking education programs; to provide that current federal smoking legislation
should not be construed to relieve any person of liability under common or state
law; to permit state and local governments to restrict the sale and distribution
of cigarettes and the placement of billboard and transit advertising of tobacco
products; to provide that cigarette advertising not be a deductible business
expense; to tax cigarettes on the basis of their "tar" and nicotine content; to
require the FTC to promulgate standards establishing maximum acceptable levels
of "tar," nicotine and "other incriminated agents" in cigarettes; to prohibit
the mailing of unsolicited samples of cigarettes; to impose an additional excise
tax on cigarettes; to require that cigarettes be manufactured in a manner that
will cause them, under certain circumstances, to be self-extinguishing; and to
subject cigarettes to regulation in various ways by the U.S. Department of
Health and Human Services, including regulation by the Food and Drug
Administration.
19
Early in 1994, and in connection with one such bill, the Energy and Commerce
Subcommittee on Health and the Environment of the U.S. House of Representatives
(the "Subcommittee") began consideration of various legislative proposals
concerning regulation of cigarettes, and launched an oversight investigation
into tobacco products, including possible regulation of nicotine-containing
cigarettes as drugs. Following the November 1994 elections, the incoming
Chairman of the Energy and Commerce Committee indicated that this investigation
by the Subcommittee would not continue, and on December 20, 1994 the outgoing
majority staff of the Subcommittee issued two final reports. One of these
reports questioned the scientific practices of what it characterized as the
tobacco industry's "long-running campaign" related to ETS, but reached no final
conclusions. The second report asserted that documents obtained from American
Tobacco Company, a competitor of Lorillard's, "reflect an intense research and
commercial interest in nicotine."
The Food and Drug Administration of the U.S. Department of Health & Human
Services (the "FDA") in 1994 also began investigating whether that agency should
regulate nicotine-containing cigarettes as drugs, and this investigation is
continuing. It is impossible at this time to predict the ultimate outcome of the
FDA's investigation.
These investigations have included requests to Lorillard and other cigarette
manufacturers for documents and information, and with respect to the
Subcommittee investigation, have included hearings at which representatives of
Lorillard and other cigarette manufacturers have testified.
On June 6, 1994, the Office on Smoking and Health of the Centers for Disease
Control and Prevention of the Department of Health & Human Services, requested
that Lorillard and the other major U.S. cigarette manufacturers voluntarily
submit to that office certain information regarding cigarette ingredients. On
September 21, 1994, Lorillard submitted information and materials in response to
this request, with the understanding that it be treated as confidential. It is
impossible at this time to predict the ultimate outcome of this inquiry.
In 1994, the Occupational Safety and Health Administration published proposed
rulemaking on air quality in indoor workplaces. The proposed rule would require
employers in the United States to prohibit smoking indoors or to restrict
smoking to a separate room with outside exhaust and negative air pressure. A
period of public comment on the proposed rules has ended. Hearings on the
proposed rule were conducted in late 1994 and early 1995. It is impossible at
this time to predict whether or in what form the proposed rules will be adopted.
Certain of these and other laws, regulations and policies intended to
prohibit, restrict or discourage smoking being proposed or considered by various
federal, state and local governments and agencies could, if adopted, have a
material adverse effect on the financial condition and results of operations of
the Company.
Advertising and Sales Promotion: Lorillard's principal brands are advertised
and promoted extensively. Introduction of new brands, brand extensions and
packings require the expenditures of substantial sums for advertising and sales
promotion, with no assurance of consumer acceptance. The advertising media
presently used by Lorillard include magazines, newspapers, out-of-home
advertising, direct mail and point-of-sale display materials. Sales promotion
activities are conducted by distribution of samples and store coupons, point-of-
sale display advertising, advertising of promotions in print media, and personal
contact with distributors, retailers and consumers.
20
Distribution Methods: Lorillard distributes its products through direct sales
to distributors, who in turn service retail outlets, and through chain store
organizations and vending machine operators, many of whom purchase their
requirements directly, and by direct sales to the U.S. Armed Forces. Lorillard's
tobacco products are stored in public warehouses throughout the country to
provide for rapid distribution to customers.
Lorillard has approximately 1,700 direct customers and is not dependent on any
one customer or group of customers. Lorillard does not have any backlog orders.
Tobacco and Tobacco Prices: The two main classes of tobacco grown in the
United States are flue-cured tobacco, grown mostly in Virginia, North Carolina,
South Carolina, Georgia and Florida; and burley, grown mostly in Kentucky and
Tennessee. Lorillard purchases flue-cured tobacco and burley tobacco for use in
cigarettes. Most of the tobacco of these classes used by Lorillard is purchased
by commission buyers at tobacco auctions. Lorillard also purchases various types
of Near Eastern tobacco, grown in Turkey and eight other Near Eastern countries.
In addition, Lorillard purchases substantial quantities of aged tobacco from
various sources, including cooperatives financed under the Commodity Credit
Corporation program, to supplement tobacco inventories.
Due to the varying size and quality of annual crops and other economic
factors, tobacco prices in the past have been subject to fluctuation. Among the
economic factors are federal government control of acreage and poundage in the
flue-cured producing areas and poundage control in the burley areas. These
controls together with support prices have substantially affected the market
prices of tobacco. The approximate average auction prices per pound for flue-
cured tobacco were $1.681 in 1993 and $1.703 in 1994 and for burley tobacco were
$1.816 in 1993 and $1.842 in 1994. The prices paid by Lorillard have generally
been consistent with this trend. Lorillard believes that its current leaf
inventories are adequately balanced for its present production requirements.
Because the process of aging tobacco normally requires approximately two years,
Lorillard at all times has on hand large quantities of leaf tobacco. See Note 1
of the Notes to Consolidated Financial Statements, under Item 8 below, for
inventory costing method.
Prices: During 1994, the wholesale price of Lorillard's king size and 100/120
millimeter cigarettes remained unchanged.
Taxes: Federal excise taxes included in the price of cigarettes are $12.00 per
thousand cigarettes. Excise taxes, which are levied upon and paid by the
distributors, are also in effect in the fifty states, the District of Columbia
and many municipalities. The state taxes generally range from 2.5 cents to 75
cents per package of twenty cigarettes.
Properties: The properties of Lorillard are employed principally in the
processing and storage of tobacco and in the manufacture and storage of
cigarettes. Its principal properties are owned in fee. With minor exceptions,
all machinery used by Lorillard is owned by it. All properties are in good
condition. Lorillard's manufacturing plant is located on approximately 79 acres
in Greensboro, North Carolina. This 942,600 square foot plant contains modern
high speed cigarette manufacturing machinery. A warehouse was added in early
1995 with shipping and receiving areas totaling 54,800 square feet. Lorillard
also has facilities for receiving, processing and storing leaf tobacco in
Danville, Virginia, containing approximately 1,500,000 square feet. A modern
research facility containing approximately 82,000 square feet is also located at
Greensboro.
Lorillard leases a corporate office in Orangeburg, New York, an executive
office in New York City and sales offices in major cities throughout the United
States.
21
Competition: Substantially all of Lorillard's products are sold within the
United States in highly competitive markets where its principal competitors are
the four other major U.S. cigarette manufacturers (Philip Morris, R.J. Reynolds
("RJR"), Brown & Williamson and Liggett Group). A fifth competitor, American
Tobacco Company, was acquired in December 1994 by the parent of Brown and
Williamson. According to the Maxwell Consumer Report, a quarterly statistical
survey of the cigarette industry, in calendar year 1994 American Tobacco Company
and Brown & Williamson accounted for 7.4% and 11.3%, respectively, of the U.S.
cigarette market. For that year, Lorillard ranked fourth in the industry with a
7.5% share of the market, based upon the Maxwell Consumer Report. Philip Morris
and RJR accounted for approximately 44.8% and 26.7%, respectively, of the U.S.
cigarette market, according to the Maxwell Consumer Report.
The following table sets forth cigarette sales in the United States by the
industry and by Lorillard, as reported in the Maxwell Consumer Report. This
table indicates the relative position of Lorillard in the industry:
<TABLE>
<CAPTION>
Industry Lorillard Lorillard
Calendar Year (000) (000) to Industry
--------------------------------------------------------------------------------
<S> <C> <C> <C>
1994 ................................. 489,600,000 36,610,000 7.5%
1993 ................................. 461,180,000 32,650,000 7.1%
1992 ................................. 506,950,000 36,540,000 7.2%
</TABLE>
---------------
The Bureau of Alcohol, Tobacco and Firearms reports Lorillard's share of total
taxable factory removals of all cigarettes to be 7.1% and 7.2% for 1993 and
1992, respectively. Data for 1994 is not currently available.
The Maxwell Consumer Report divides the cigarette market into two price
segments, the premium price segment and the discount or reduced price segment.
According to the Maxwell Consumer Report the reduced price segment decreased in
1994 to approximately 32.5% from approximately 36.8% of the market in 1993.
Virtually all of Lorillard's sales are in the premium price segment where
Lorillard's share decreased from 10.7% in 1993 to 10.6% in 1994, according to
the Maxwell Consumer Report.
22
LOEWS HOTELS HOLDING CORPORATION
The subsidiaries of Loews Hotels Holding Corporation ("Loews Hotels"), a
wholly owned subsidiary of the Company, presently operate the following 14
hotels. Loews Hotels accounted for 1.61%, 1.35% and 1.47% of the Company's total
revenue for the years ended December 31, 1994, 1993 and 1992, respectively.
<TABLE>
<CAPTION>
Number of
Rooms (Year
Name and Location Type Opened) Owned, Leased or Managed
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Loews Anatole Luxury 1,620 Management contract expiring 2000 (5)
Dallas, Texas Convention Hotel (1979)
Loews Annapolis Luxury Hotel 217 Owned
Annapolis, Maryland (1986(2))
Loews Coronado Bay Resort Luxury Hotel 450 Management contract expiring 2011,
San Diego, California (1991) with renewal options for 10 years (3)
Loews Giorgio Luxury Hotel 197 Owned
Denver, Colorado (1986(2))
Howard Johnson Hotel (1) Commercial Hotel 300 Owned
New York, New York (1962)
Loews Le Concorde Luxury Hotel 424 Land lease expiring 2069
Quebec City, Canada (1974(2))
Loews L'Enfant Plaza Luxury Hotel 372 Management contract expiring 2003 (3)
Washington, D.C. (1973)
Loews Monte Carlo Resort Hotel 622 Lease expiring 2002, with renewal
Monte Carlo, Monaco (1975) options for 20 years (4)
Loews New York First Class Hotel 765 Owned
New York, New York (1961)
Days Hotel (1) Commercial Hotel 366 Owned
New York, New York (1962)
Regency Luxury Hotel 496 Land Lease expiring 2013, with
New York, New York (1963) renewal options for 47 years.
Loews Santa Monica Beach Luxury Hotel 350 Management contract expiring 2007,
Santa Monica, California (1989) with renewal options for 10 years.
Loews Vanderbilt Plaza Luxury Hotel 342 Owned
Nashville, Tennessee (1984(2))
Loews Ventana Canyon Resort Resort Hotel 398 Management contract expiring 2004,
Tucson, Arizona (1984) with renewal options for 10 years (3)
-------------
(1) Operated by Loews Hotels under license agreements pursuant to which Loews
Hotels pays royalty fees on sales, as defined in the agreements, for the use of
the respective trade names, trademarks and other rights.
(2) The Le Concorde, Giorgio, Vanderbilt Plaza and Annapolis Hotels were
acquired by Loews Hotels in 1987, 1989, 1989 and 1990, respectively.
(3) These management contracts are subject to termination rights.
23
(4) A dispute is pending concerning this lease in relation to, among other
things, rent payable under the lease and a contention by the ground lessor that
the lease was not properly renewed for periods subsequent to 1990. In 1994, an
arbitral tribunal rendered a decision favorable to Loews Hotels on these issues.
The ground lessor has continued proceedings which, among other things, challenge
the effect of certain aspects of the arbitral award.
(5) The hotel owner has advised Loews Hotels of its exercise of the right to
terminate this contract on or about June 1, 1995.
</TABLE>
Loews Hotels has recently entered into an agreement to acquire a 154 room
hotel in Montreal, Canada. This acquisition is expected to be consummated in
March 1995.
The hotels which are operated by Loews Hotels contain shops, a variety of
restaurants and lounges, and some contain parking facilities, swimming pools,
tennis courts and access to golf courses and, in the case of the Monte Carlo
hotel, a casino.
The hotels owned by Loews Hotels are subject to mortgage indebtedness
aggregating approximately $42,028,000 at December 31, 1994 with interest rates
ranging from 9% to 11%, and maturing between 1997 and 1999. In addition, certain
hotels are held under leases which are subject to formula derived rental
increases, with rentals aggregating approximately $7,076,000 for the year ended
December 31, 1994.
Competition from other hotels, motor hotels and inns, including facilities
owned by local interests and by national and international chains, is vigorous
in all areas in which Loews Hotels operates. The demand for hotel rooms in many
areas is seasonal and dependent on general and local economic conditions. Loews
Hotels properties also compete with facilities offering similar services in
locations other than those in which the company's hotels are located.
Competition among luxury hotels is based primarily on location and service.
Competition among resort and commercial hotels is based on price as well as
location and service. Because of the competitive nature of the industry, hotels
must continually make expenditures for updating, refurnishing and repairs and
maintenance, in order to prevent competitive obsolescence.
BULOVA CORPORATION
Bulova Corporation ("Bulova") is engaged in the distribution and sale of
watches, clocks and watch parts for consumer use. Bulova accounted for 1.12%,
1.12% and 1.32% of the Company's total revenue for the years ended December 31,
1994, 1993 and 1992, respectively.
Bulova distributes and sells analog and analog-digital quartz crystal watches,
jewelry and various types of clocks. All watches and clocks are purchased from
foreign suppliers. Watches are sold by Bulova principally in the United States
and Canada. In most other areas of the world Bulova has appointed licensees who
market watches under Bulova's trademarks in return for a royalty. The business
is seasonal, with the greatest sales coming in the third and fourth quarters in
expectation of the holiday selling season. The business is intensely
competitive. The principal methods of competition are price, styling, aftersale
service, warranty and product performance.
In January 1995, Bulova sold its industrial and defense products segment for
$20,810,000 in cash and will report a small gain on disposition in the first
quarter of 1995. This segment's sales accounted for approximately 36% of
Bulova's total sales in 1994.
24
Properties: Bulova leases its facilities which consist of an 80,000 square
foot plant in Woodside, New York for its principal executive and sales office,
watch distribution, service and warehouse purposes, a 71,000 square foot plant
in Maspeth, New York for clock service and warehouse purposes and a 25,000
square foot plant in Toronto, Canada for watch and clock sales and service.
DIAMOND OFFSHORE DRILLING, INC.
The Company's wholly owned subsidiary, Diamond Offshore Drilling Inc.
("Diamond Offshore"), is engaged, through its subsidiaries, in the business of
owning and operating drilling rigs that are used primarily in drilling of oil
and gas wells on a contract basis for companies engaged in exploration and
production of hydrocarbons. The Company entered the drilling business in 1989
through the acquisition of 10 offshore rigs. Land rigs were acquired in 1990. An
additional 40 offshore rigs were acquired in January 1992 through the
acquisition of Odeco Drilling, Inc. Diamond Offshore accounted for 2.25%, 2.11%
and 1.59% of the Company's total revenue for the years ended December 31, 1994,
1993 and 1992, respectively.
Drilling Units and Equipment: Diamond Offshore currently owns and operates 38
mobile offshore drilling rigs (14 jackup rigs, 23 semisubmersible rigs and one
drillship), 10 land rigs and related equipment. An additional three offshore
rigs, which are inactive, are currently held for sale. Offshore rigs are mobile
units that can be relocated via either self propulsion or by the use of tugs
enabling them to be repositioned based on market demand.
Jackup rigs stand on the ocean floor with their drilling platforms "jacked up"
on support legs above the water. They are best suited for drilling in water
depths of less than 300 feet. Nine of Diamond Offshore's jackup rigs are
cantilevered rigs capable of over platform development drilling and workover as
well as exploratory drilling. Of Diamond Offshore's 14 jackup rigs, 13 are
currently located in the Gulf of Mexico and one is currently in South America.
Semisubmersible rigs are supported by large pontoons and are partially
submerged during drilling for greater stability. They are generally designed for
deep water depths of up to 6,000 feet. Diamond Offshore operates three of the
world's thirteen fourth-generation semisubmersible rigs. These rigs are equipped
with advanced drilling equipment, are capable of operations in ultra deep waters
in severe weather environments, and command high premiums from operators.
Diamond Offshore's 23 semisubmersible rigs are currently located as follows: 10
in the Gulf of Mexico, four in the North Sea, three in Brazil, one in Trinidad,
four in Southeast Asia and one in the Black Sea.
Diamond Offshore's drillship is self-propelled and designed to drill in deep
water. Shaped like a conventional vessel, it is the most mobile of the major rig
types. Diamond Offshore's drillship is located in Southeast Asia.
Diamond Offshore's land rigs are all located in Texas and are also capable of
mobilizing to different drilling sites.
Drilling Contracts and Rig Utilization: Contracts for Diamond Offshore's
drilling rigs are offered worldwide for either a fixed term, which may range
from a few months to several years, or on a well-to-well basis.
25
The following table sets forth the size and utilization rate of Diamond
Offshore's fleet for the years ended December 31, 1994, 1993 and 1992. The
utilization rate for a period is based on the ratio of days in the period during
which the rigs were earning revenues to the total days in the period during
which the rigs were available to work.
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------
1994 1993 1992
-----------------------------------
<S> <C> <C> <C>
Jackups:
Rigs in fleet at year-end .......... 14 16 19
Utilization during the year ........ 81.8% 79.6% 57.9%
Semisubmersibles:
Rigs in fleet at year-end .......... 23 22 26
Utilization during the year ........ 64.1% 71.9% 51.2%
Land:
Rigs in fleet at year-end .......... 10 19 19
Utilization during the year ........ 60.5% 44.3% 22.5%
</TABLE>
Competition: The oil and gas drilling business is dependent on the drilling
requirements of petroleum producers and is competitive in all of its phases.
Diamond Offshore competes with a large number of drilling contractors and must
continually allocate resources for technological changes, repairs and
maintenance. Diamond Offshore's rigs are generally of modern design and equipped
with the latest technology. Companies in the industry compete primarily on the
basis of equipment day-rates and mobilization fees, personnel competence and
equipment suitability and availability.
Utilization rates declined in 1994 due to the decrease in natural gas prices
in the Gulf of Mexico, the oversupply of drilling rigs, and low crude oil
prices. These utilization rate declines were the primary cause of continuing
depressed conditions in the drilling industry. In view of the worldwide
oversupply of rigs and the surplus of oil and natural gas, Diamond Offshore
expects that demand and compensation rates for its rigs could remain at
depressed levels in 1995 and continue to have a material adverse impact on
operations.
Operating Risks and Regulation: Diamond Offshore's operations are subject to
the usual hazards incident to the drilling of oil and gas wells, such as
blowouts, cratering and fires. Diamond Offshore's offshore operations are also
subject to perils peculiar to marine operations, such as capsizing, collision,
grounding and adverse weather and seas. Any of these hazards can seriously
damage or destroy equipment, suspend drilling operations, and, through oil
spillage, cause pollution damage to offshore or inland waters or the property of
others. Diamond Offshore currently maintains insurance covering these risks,
including expropriation, confiscation and nationalization of certain equipment
in foreign waters. There is no assurance that insurance coverage will continue
to be available at rates considered reasonable or that the insurance will be
adequate to protect against liability and loss or damage resulting from all the
consequences of a significant incident.
Diamond Offshore is subject to stringent laws relating to the equipment and
operation of vessels and drilling practices and methods. Additional governmental
legislation and regulations involving the petroleum industry could significantly
affect Diamond Offshore's operations.
Properties: Diamond Offshore owns an 18,000 square foot building and 20 acres
of land in New Iberia, Louisiana for its offshore drilling warehouse and storage
facility, a 13,000 square foot building and 5 acres of land in Dyce, Scotland
for its North Sea operations and a 15,000 square foot building and 10 acres of
land in Alice, Texas for its onshore drilling office, warehouse and storage
facility. Diamond Offshore also leases 50,000 square feet of office space for
its corporate headquarters located in Houston, Texas and various warehouse and
storage facilities in Scotland and Brazil for its offshore drilling operations.
26
OTHER INTERESTS
The Company owns approximately 18% of the outstanding common stock of CBS Inc.
("CBS"). Laurence A. Tisch, Co-Chairman of the Board of Directors and Co-Chief
Executive Officer of the Company, is Chairman, President and Chief Executive
Officer of CBS. Preston R. Tisch, Co-Chairman of the Board of Directors and Co-
Chief Executive Officer of the Company, is also a director of CBS.
The Company also owns a 49% common stock interest in a joint venture which is
engaged in the business of owning and operating six large crude oil tankers that
are used primarily to transport crude oil from the Persian Gulf to a limited
number of ports in the Far East, Northern Europe and the United States.
In addition, the Company owns a 161,000 square foot first class office
building which is leased to third parties.
EMPLOYEE RELATIONS
The Company, inclusive of its operating subsidiaries as described below,
employed approximately 25,400 persons at December 31, 1994 and considers its
employee relations to be satisfactory.
Lorillard employed approximately 3,700 persons at December 31, 1994.
Approximately 1,500 of these employees are represented by labor unions under
separate contracts with many local unions expiring at varying times and
severally renegotiated and renewed.
Lorillard has collective bargaining agreements covering hourly rated
production and service employees at various Lorillard plants with the Tobacco
Workers International Union, the International Brotherhood of Firemen and
Oilers, and the International Association of Machinists. Lorillard has
experienced satisfactory labor relations and provides a retirement plan, a
deferred profit sharing plan, and other benefits for its hourly paid employees
who are represented by the foregoing unions.
Loews Hotels employed approximately 2,700 persons at December 31, 1994,
approximately 850 of whom are union members covered under collective bargaining
agreements. Loews Hotels has experienced satisfactory labor relations and
provides comprehensive benefit plans for its hourly paid employees.
The Company maintains a retirement plan, group life, disability and health
insurance program and a savings plan for salaried employees. Lorillard and Loews
Hotels salaried employees also participate in these benefit plans.
Diamond Offshore employed approximately 2,600 persons at December 31, 1994,
approximately 170 of whom are union members. Diamond Offshore has experienced
satisfactory labor relations and provides comprehensive benefit plans for its
employees.
CNA and its subsidiaries employ approximately 15,600 persons and have
experienced satisfactory labor relations. CNA and its subsidiaries have
comprehensive benefit plans for substantially all of their employees, including
a retirement plan, a savings plan, a disability program, a group life program
and a group health care program.
Bulova and its subsidiaries (exclusive of 490 persons employed by the
industrial & defense business which was sold in January 1995) employ
approximately 460 persons, approximately 130 of whom are union members. Bulova
and its subsidiaries have experienced satisfactory labor relations. Bulova has
comprehensive benefit plans for substantially all employees.
Item 2. Properties.
Information relating to the properties of Registrant and its subsidiaries is
contained under Item 1.
27
Item 3. Legal Proceedings.
1. CNA is involved in various lawsuits involving environmental pollution
claims and litigation with Fibreboard Corporation. Information involving such
lawsuits is incorporated by reference to Notes 10 and 18 of the Notes to
Consolidated Financial Statements in Item 8.
2. Lorillard is involved in various lawsuits involving tobacco products
seeking damages for cancer and other health effects claimed to have resulted
from the use of cigarettes or from exposure to tobacco smoke. Information
involving such lawsuits is incorporated by reference to Note 18 of the Notes to
Consolidated Financial Statements in Item 8.
A grand jury investigation is presently being conducted by the United States
Attorney's Office for the Eastern District of New York regarding possible fraud
by Lorillard and other tobacco companies relating to smoking and health research
undertaken or administered by the Council for Tobacco Research-USA, Inc.
Lorillard is unable to predict the outcome of this investigation. An adverse
outcome of this investigation could result in criminal, administrative or other
proceedings against Lorillard.
Lorillard received Civil Investigative Demands ("CIDs") in January, June and
November 1994 from the Antitrust Division of the United States Department of
Justice. The CIDs, which request certain information, documents and testimony,
were issued in the course of an antitrust investigation to determine whether
Section 1 of the Sherman Act, 15 U.S.C. Section 1, may have been violated by
joint activity to restrain competition in the manufacture and sale of cigarettes
with reduced ignition propensity (so-called "fire safe" cigarettes), including
joint activity to limit or restrain research and development or product
innovation. Lorillard has responded to the CIDs. This investigation is in its
preliminary stages and it is impossible at this time to predict its ultimate
outcome. An adverse outcome in this investigation could result in other
proceedings against Lorillard.
Management believes that the outcome of these pending investigations should
not have a material adverse effect upon the financial condition or results of
operations of the Company.
28
Item 4. Submission of Matters to a Vote of Security Holders.
None.
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS OF THE REGISTRANT
First
Became
Name Position and Offices Held Age Officer
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Kenneth Abrams .......... Vice President-Personnel 61 1975
Gary W. Garson .......... Vice President and
Assistant Secretary 48 1988
Robert J. Hausman ....... Vice President 71 1973
Barry Hirsch ............ Senior Vice President and
Secretary 61 1971
Herbert C. Hofmann ...... Senior Vice President 52 1979
John J. Kenny ........... Treasurer 57 1991
Guy A. Kwan ............. Controller 52 1987
John G. Malino .......... Vice President-Real Estate 55 1985
Stuart B. Opotowsky ..... Vice President-Tax 60 1987
Richard E. Piluso ....... Vice President-Internal Audit 56 1990
Roy E. Posner ........... Senior Vice President and
Chief Financial Officer 61 1973
Dennis Smith ............ Vice President-Management
Information Services 48 1990
James S. Tisch .......... President and Chief
Operating Officer 42 1981
Jonathan M. Tisch ....... Vice President 41 1987
Laurence A. Tisch ....... Co-Chairman of the Board and
Co-Chief Executive Officer 72 1959
Preston R. Tisch ........ Co-Chairman of the Board and
Co-Chief Executive Officer 68 1960
</TABLE>
Laurence A. Tisch and Preston R. Tisch are brothers. Andrew H. Tisch and James
S. Tisch are sons of Laurence A. Tisch and Jonathan M. Tisch is a son of Preston
R. Tisch. None of the other officers or directors of Registrant is related to
any other.
All executive officers of Registrant have been engaged actively and
continuously in the business of Registrant for more than the past five years.
Officers are elected and hold office until their successors are elected and
qualified, and are subject to removal by the Board of Directors.
29
PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters.
Price Range of Common Stock
Loews Corporation's common stock is listed on the New York Stock Exchange. The
following table sets forth the reported consolidated tape high and low sales
prices in each calendar quarter of 1994 and 1993:
<TABLE>
<CAPTION>
1994 1993
--------------------------------------------------
High Low High Low
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
First Quarter ............ $102.75 $89.25 $120.25 $98.13
Second Quarter ........... 92.88 84.50 110.88 92.75
Third Quarter ............ 93.88 86.13 98.63 86.75
Fourth Quarter ........... 91.50 85.25 98.50 90.50
</TABLE>
Dividend Information
The Company has paid quarterly cash dividends on its common stock in each year
since 1967. Regular dividends of $.25 per share of common stock outstanding were
paid in each calendar quarter of 1994 and 1993.
Approximate Number of Equity Security Holders
As of February 24, 1995, the Company had approximately 4,100 holders of record
of Common Stock.
Item 6. Selected Financial Data.
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------------------------------
1994 1993 1992 1991 1990
-------------------------------------------------------------------------------------------------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Results of Operations:
Revenues .................. $13,515,201 $13,686,777 $13,691,454 $13,620,264 $12,636,925
Income (loss) before
cumulative effect of
accounting changes ....... 267,834 594,121 (22,097) 904,338 804,650
Per share ................ 4.45 9.27 (.33) 13.14 11.01
Net income ................ 267,834 594,121 122,614 904,338 804,650
Per share ................ 4.45 9.27 1.87 13.14 11.01
Financial Position:
Total assets .............. 50,335,976 45,849,752 43,555,514 42,684,157 38,359,766
Long-term debt ............ 2,144,394 2,195,670 1,759,595 1,944,710 1,826,378
Shareholders' equity ...... 5,405,314 6,127,198 5,526,990 5,667,072 5,043,397
Cash dividends per share .. 1.00 1.00 1.00 1.00 1.00
Book value per share ...... 91.67 99.59 84.90 84.18 72.13
Shares of common stock
outstanding .............. 58,965 61,525 65,099 67,320 69,917
</TABLE>
In 1993 the Company changed its method of accounting for reinsurance contracts
and certain investments in debt and equity securities. In 1992 the Company
changed its method of accounting for postretirement benefits, income taxes and
certain workers' compensation and disability claims. See Note 1 of the Notes to
Consolidated Financial Statements.
30
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources:
Insurance
Property and casualty and life insurance operations are wholly owned
subsidiaries of CNA Financial Corporation ("CNA"). CNA is an 84% owned
subsidiary of the Company.
The prolonged soft market in commercial property and casualty lines that
depressed property and casualty earnings last year in much of the insurance
industry did not change significantly in 1994. Significant catastrophe claims
related to the Northridge earthquake near Los Angeles and severe winter storms
in the Northeast and declining bond portfolios due to rising interest rates put
additional pressure on the industry. Catastrophe losses for the industry of
$14.9 billion have already made 1994 the second worst year on record for
catastrophic losses, behind the record $22.9 billion in 1992. The earthquake
losses will approach $10.4 billion, more than four times earlier estimates of
$2.5 billion.
On the other hand, the workers' compensation line has improved steadily since
1992. Legislative reforms have cut costs in some states, residual market losses
have dropped and insurance regulators have sharpened their focus on workers'
compensation fraud.
In this difficult business climate, CNA remains among the strongest and most
competitive multi-line organizations in the insurance industry and remains
committed to conservative financial strategies as the foundation for profitable
growth.
In 1994, CNA was impacted by all the industry factors mentioned above. Net
income was reduced by substantial catastrophe losses and by realized investment
losses due to rising interest rates. However, results were satisfactory in its
core businesses. Workers' compensation profitability continued to improve. CNA's
new Strategic Business Units ("SBUs") sharpened customer focus, increased
efficiencies and strengthened management accountability in all its businesses.
SBUs are operating groups dedicated to specific segments of CNA business in
commercial, personal, life and health, and specialty insurance.
Life operations experienced significant growth as a result of new products,
with life profitability increasing primarily due to increased investment income
and improved mortality experience. Other significant events included continued
progress toward a global settlement regarding the Fibreboard asbestos claim and
significant merger and acquisition activity resulting in agreements to acquire
The Continental Corporation and Alexsis.
Fibreboard-As described in Note 18 of the Notes to Consolidated Financial
Statements, Continental Casualty Company ("Casualty") has greatly reduced a
major source of financial uncertainty by reaching a Global Settlement executed
in December 1993 to resolve all future asbestos-related bodily injury claims
involving Fibreboard Corporation ("Fibreboard"), a former asbestos manufacturer.
On July 29, 1994 the United States District Court for the Eastern District of
Texas preliminarily approved the Global Settlement agreement. A final fairness
hearing, to determine whether to approve the Global Settlement agreement,
commenced on December 12, 1994. During the hearing various parties presented
evidence in opposition to the Global Settlement.
Also pending in the United States District Court for the Eastern District of
Texas is litigation over the Trilateral Agreement. Trial on the issues raised by
this agreement occurred on February 13, 1995, with evidence submitted to the
Court in opposition to final court approval of the Trilateral Agreement.
CNA and the other parties to the Global Settlement agreement and the
Trilateral Agreement undertook a comprehensive court approved notice program to
provide potential claimants information about their rights and possible benefits
under the Global Settlement agreement and Trilateral Agreement. Final arguments
concerning the Global Settlement agreement occurred on February 27, 1995; the
court's rulings are expected in the spring of 1995. No date has been set for
final legal arguments for the Trilateral Agreement.
The Continental Corporation-In the fourth quarter of 1994, CNA reached an
agreement to purchase the outstanding shares of common stock of The Continental
Corporation ("CIC") through a cash merger for approximately $1.1 billion, or $20
a share. This transaction will create the third largest U.S. property and
casualty insurance group and make CNA the seventh largest U.S. insurance
organization. This acquisition will be accounted for as a purchase. Accordingly,
CIC's results of operations will be included in CNA's consolidated
31
results of operations from the date of acquisition, which is expected in the
second quarter of 1995. The transaction closing is subject to the approval of
CIC's shareholders and state insurance regulators. CNA and CIC are jointly
seeking prompt regulatory approvals. Until the acquisition is complete, CIC will
continue to operate independently.
As part of the CIC transaction, on December 6, 1994, CNA invested $275 million
of cash in exchange for sinking fund preferred stock of CIC. At December 31,
1994, this investment is shown in CNA's financial statements as redeemable
preferred stock.
CNA has reached an agreement in principle with a syndicate of banks to provide
initial financing through a revolving loan facility. The revolving loan facility
will have a maturity of five years without any prepayment restrictions. This
loan will allow CNA to consummate the merger and facilitate a smooth transition
expeditiously, while providing the needed flexibility to determine the ultimate
capital structure at a time when it is advantageous to raise debt or a
combination of debt and equity in the capital markets.
CIC, with approximately 8,000 employees, is headquartered in New York. It is
the 11th largest U.S. property and casualty insurance company based on 1993
premium volume, with revenues and net loss for the year ended December 31, 1994
of approximately $5.1 billion and $602.9 million, respectively. Total assets are
approximately $16.0 billion at December 31, 1994.
CIC's business strengths are in its package policies for commercial and
personal lines and its specialty lines business.
There will be market efficiencies and economies of scale in many of the
product lines both companies write. CNA will be integrating the best features of
both companies. CIC has established expertise and market position in the higher
margin specialty lines that complement CNA's specialty lines. In personal lines,
the combined businesses will create the critical mass needed to be a very low
cost producer. CIC's commercial distribution system will enhance CNA's network
of strong agency relationships.
In 1995, CNA's major priority will be integrating CIC, while continuing to
keep CNA's current businesses running smoothly. Transition planning teams will
take up this challenge. The transition organization is designed with an overall
management structure similar to what CIC and CNA currently have in place, a
structure of business units that have a high degree of independence, but share
centralized services where it is more efficient.
Alexsis-CNA's Continental Casualty subsidiary has acquired the stock of
Alexsis Inc. and related entities ("Alexsis"), wholly owned subsidiaries of
Alexander & Alexander Services, Inc., for approximately $45 million in cash,
under a definitive agreement signed on January 16, 1995.
Alexsis is one of the country's three largest property and casualty third-
party administrators ("TPA") with 1994 revenues of more than $100 million and
1,300 employees. Alexsis customers are large organizations that fully or
partially self-insure their risks and separately purchase specific
administrative services, such as claims administration, from TPA's. The
acquisition closed February 28, 1995.
CNA's property and casualty insurance subsidiaries statutory surplus grew from
$3.1 billion in 1989 to $3.9 billion in 1991. In 1992, property and casualty
surplus declined to $3.1 billion primarily due to $1.5 billion in asbestos
reserve increases, partially offset by accounting changes described in Note 1 of
the Notes to Consolidated Financial Statements. In 1993, property and casualty
surplus rose to approximately $3.6 billion despite another $500 million increase
in asbestos reserves relating to Fibreboard. In 1994 surplus declined to $3.4
billion, primarily attributable to realized losses. Statutory surplus of CNA's
life insurance subsidiaries grew from $786 million at December 31, 1989 to more
than $1 billion at December 31, 1994.
Included in the property and casualty surplus increases are capital
contributions from CNA to Casualty of $475 million in 1993, $120 million in 1990
and $200 million in 1989. Dividends of $175, $150, $100, $130 and $100 million
were paid to CNA by Casualty in 1994, 1993, 1992, 1991 and 1989, respectively.
Life statutory surplus includes capital contributions from Casualty to
Continental Assurance Company of $100 and $130 million, in 1990 and 1989,
respectively.
CNA's investment portfolio increased by $1.6 billion, or 6.2%, to $26.9
billion, primarily as a result of securities lending activity of $1.9 billion
where CNA sells securities to brokers while agreeing to repurchase them at a
future date. This increase was partially offset by a decline in fair values of
fixed income securities due to rising interest rates.
The liquidity requirements of CNA have been met primarily by funds generated
from operations. The principal operating cash flow sources of CNA's property and
casualty and life insurance subsidiaries are
32
premiums and investment income. The primary operating cash flow uses are
payments for claims, policy benefits and operating expenses.
For the year ended December 31, 1994, CNA's operating activities generated net
cash flows of $1.0 billion compared to $1.3 billion in 1993 and $1.0 billion in
1992. The decrease in cash flow, as compared with 1993, is due primarily to
Fibreboard claim payments, catastrophe claim payments, and a decline in federal
income tax recoveries. CNA believes that future liquidity needs will be met
primarily from operations, other than for financing needs related to the CIC
acquisition.
Additional sources of cash flow include sales and maturities of investments,
and financing activities. Net cash flows are invested in marketable securities.
Investment strategies employed by CNA's insurance subsidiaries consider the cash
flow requirements of the insurance products sold, and the tax attributes of
the various types of marketable investments.
Cigarettes
Lorillard, Inc. and subsidiaries ("Lorillard").
Funds from operations continue to exceed operating requirements. Lorillard
generated net cash flow from operations of approximately $364 million for the
year ended December 31, 1994, compared to $538 million for the prior year. No
material capital expenditures are anticipated during 1995.
For a number of years through 1992 leading cigarette marketers, including
Lorillard, had increased the price of their premium brands. For the period 1982
to 1992 the annual price increase for Lorillard's premium brands averaged
approximately 10%. Lorillard's cash flows from operations during this period
benefited significantly from these price increases since virtually all of
Lorillard's sales are in the premium priced segment, with Newport accounting for
more than two-thirds of Lorillard's total unit sales.
Effective August 9, 1993 in response to new lower pricing policies and
promotions by its competitors, Lorillard reduced its premium brand wholesale
cigarette unit prices by approximately 25% to maintain its competitive position.
These price moves have established two price tiers for the industry, eliminating
much of the price confusion in the market place, and substantially narrowing the
price gap between premium and discount cigarettes. These developments appear to
have slowed the rapid growth of discount cigarettes. While promotional spending
can be reduced, the new lower pricing has resulted in a reduction of Lorillard's
revenues, income contribution and cash flow.
A number of lawsuits have been filed against Lorillard and other manufacturers
of tobacco products seeking damages for cancer and other health effects claimed
to have resulted from the use of cigarettes or exposure to tobacco smoke. In
several of these cases the Company is named as a defendant. Pending litigation
includes actions commenced by individuals, purported class actions and actions
brought by state governments, most of which claim very substantial damages.
These actions are described in Note 18 of the Notes to Consolidated Financial
Statements.
Hotels
Loews Hotels Holding Corporation and subsidiaries.
Funds from operations continue to exceed operating requirements. Funds for
capital expenditures and working capital requirements are expected to be
provided from operations. Funds for any hotel acquisitions would be expected to
be provided through the Company.
Watches and Other Timing Devices
Bulova Corporation and subsidiaries ("Bulova"). Bulova is a 97% owned
subsidiary of the Company.
On January 17, 1995, Bulova sold its industrial and defense manufacturing
business, Bulova Technologies, Inc., for $20,810,000 in cash. Bulova used $18
million of proceeds to repay its advance from the Company. The sale will result
in a small gain to be recorded in the first quarter of 1995.
Competition and oversupply of watch products continue to adversely affect
Bulova. Bulova may require working capital advances from the Company from time
to time. While the Company has no obligation to enter into or maintain
arrangements for any funding requirements, it is anticipated that it would be
provided through various arrangements with Bulova.
33
Drilling
Diamond Offshore Drilling, Inc. and subsidiaries ("Diamond Offshore").
Oversupply of drilling rigs and low gas and crude oil prices continue to
depress conditions in the drilling industry and to adversely impact Diamond
Offshore. Although funds for future capital expenditures and working capital
requirements are expected to be provided from operations, Diamond Offshore may
require additional advances from the Company due to the cyclical nature of the
industry.
Parent Company
In September 1994 the Company received approximately $270.4 million cash
proceeds related to CBS's offer to its shareholders to purchase shares of its
common stock.
During 1994 the Company purchased 2,559,800 shares of its outstanding Common
Stock at an aggregate cost of approximately $226.9 million. The funds required
for such purchases were provided from working capital. Depending on market
conditions, the Company from time to time may purchase additional shares in the
open market or otherwise. In addition, during the year the Company purchased
641,500 shares of CNA's outstanding common stock at an aggregate cost of
approximately $39.3 million.
The Company continues to seek expansion of existing businesses and
acquisitions of new businesses; however, it will continue to resist marginal
acquisitions.
34
Investments:
Insurance
CNA's general account investment portfolio is managed to maximize after-tax
investment return, while minimizing credit risks with investments concentrated
in high quality securities to support its insurance underwriting operations.
CNA has the capacity to hold its fixed income portfolio to maturity. However,
securities may be sold as part of CNA's asset/liability strategies or to take
advantage of investment opportunities generated by changing interest rates,
prepayments, tax and credit considerations, or other similar factors.
Accordingly, the fixed income securities are classified as available for sale.
During 1994, consolidated investments increased $1.6 billion to $26.9 billion.
This increase was the result of securities lending activity of $1.9 billion
where CNA sells securities to brokers while agreeing to repurchase them at a
future date. This increase was partially offset by a decline in fair values of
fixed income securities due to rising interest rates.
The general account portfolio consists primarily of high quality marketable
debt securities, 95% of which are rated as investment grade. At December 31,
1994, tax exempt securities and short-term investments comprised approximately
13% and 18%, respectively, of the general account's total investment portfolio
compared to 19% and 28%, respectively, at December 31, 1993. At December 31,
1994 and 1993, short-term investments primarily consisted of U.S. Treasury bills
and commercial paper.
As of December 31, 1994 CNA's general account investments in bonds and
redeemable preferred stocks were carried at a fair value of $20.8 billion,
compared to $17.6 billion at December 31, 1993. At December 31, 1994, net
unrealized losses on fixed income securities amounted to approximately $795
million. This compares to $504 and $846 million of net unrealized gains at
December 31, 1993 and 1992, respectively. The gross unrealized gains and losses
for the fixed income securities portfolio at December 31, 1994 were $194 and
$989 million, respectively, compared to $564 and $60 million, respectively, at
December 31, 1993.
Net unrealized losses on general account bonds at December 31, 1994 include
net unrealized losses on high yield securities of $30 million, compared to net
unrealized gains of $15 million at December 31, 1993. High yield securities are
bonds rated as below investment grade by bond rating agencies, plus private
placements and other unrated securities which, in the opinion of management, are
below investment grade. Carrying values of high yield securities in the general
account were $1.0 billion at December 31, 1994, compared to $727 million at
December 31, 1993.
At December 31, 1994, total Separate Account cash and investments amounted to
$6.1 billion with taxable debt securities representing approximately 88% of the
Separate Accounts portfolio. Approximately 88% of Separate Account investments
are used to fund guaranteed investment contracts ("GIC's") for which Continental
Assurance Company guarantees principal and a specified return to the
contractholders. Securities included in the GIC portfolio are matched with the
corresponding liability in the GIC contract. At December 31, 1994, all fixed
income securities in the GIC portfolio were carried at fair value and amounted
to $4.6 billion. At December 31, 1994, net unrealized losses on fixed income
securities amounted to approximately $195 million. This compares to $148 and
$158 million of net unrealized gains at December 31, 1993 and 1992,
respectively. The gross unrealized gains and losses for the fixed income
securities portfolio at December 31, 1994, were $34 and $229 million,
respectively, compared to $163 and $15 million, respectively, at December 31,
1993.
High yield securities in the GIC portfolio are carried at fair value and
amounted to $1.1 billion at December 31, 1994 and 1993. Net unrealized losses on
high yield securities held in such Separate Accounts were $108 million at
December 31, 1994, compared to net unrealized gains of $56 and $28 million at
December 31, 1993 and 1992, respectively.
High yield securities generally involve a greater degree of risk than that of
investment grade securities. Expected returns should, however, compensate for
the added risk. The risk is also considered in the interest rate assumptions in
the underlying insurance products. As of December 31, 1994, CNA's concentration
in high yield bonds including Separate Accounts was approximately 4.8% of its
total assets.
Included in CNA's fixed income securities at December 31, 1994 (general and
GIC portfolios) are $4.6 billion of asset-backed securities, consisting of
approximately 34% in U.S. government agency issued pass-through certificates,
50% in collateralized mortgage obligations ("CMO's"), and 16% in corporate
asset-backed obligations. The majority of CMO's held are U.S. government agency
issues, which are actively traded in liquid
35
markets and are priced by broker-dealers. At December 31, 1994, the amortized
cost was in excess of the fair value of asset-backed securities by approximately
$181 million, as compared to fair value in excess of amortized cost by
approximately $87 million for the comparable period a year ago. CNA limits the
risks associated with interest rate fluctuations and prepayment by concentrating
its CMO investments in planned amortization classes with relatively short
principal repayment windows. CNA avoids investments in complex mortgage
derivatives without readily ascertainable market prices.
Over the last few years, much concern has been raised regarding the quality of
insurance company invested assets. At December 31, 1994, 64% of the general
account's debt securities portfolio was invested in U.S. government and
affiliated securities, 18% in other AAA rated securities and 11% in AA and A
rated securities. CNA's GIC fixed income portfolio is comprised of 29% U.S.
government and affiliated securities, 20% other AAA rated securities and 18% in
AA and A rated securities. These ratings are primarily from Standard & Poor's
(95% of the general account portfolio and 94% of the GIC portfolio). In
addition, CNA's investment in mortgage loans and real estate are substantially
below the industry average.
CNA holds a small amount of derivative instruments for purposes of enhancing
income and total return. The derivative instruments are marked to market and
reported as realized investment gains and losses. CNA's investment in, and risk
in relation to, derivative instruments are not significant.
Other
Investment activities of non-insurance companies include investments in fixed
maturities securities, equity securities, derivative instruments and short-term
investments. Derivative instruments are marked to market and reported as
realized investment gains or losses in the income statement. The remaining
securities are carried at fair value with a net unrealized gain of $146.2
million at December 31, 1994, compared to $151.9 million at December 31, 1993.
The Company invests in certain derivative instruments for income enhancements
as part of its portfolio management strategy. These instruments include various
swaps, forwards and futures contracts as well as both purchased and written
options.
These investments subject the Company to market risk for positions where the
Company does not hold an offsetting security. The Company controls this risk
through monitoring procedures which include daily detailed reports of existing
positions and valuation fluctuations. These reports are reviewed by members of
senior management to ensure that open positions are consistent with the
Company's portfolio strategy.
The credit exposure associated with these instruments is generally limited to
the positive market value of the instruments and will vary based on changes in
market prices. The Company enters into these transactions with large financial
institutions and considers the risk of nonperformance to be remote. In addition,
the amounts subject to credit risk are substantially mitigated by collateral
requirements in many of these transactions.
The Company does not believe that any of the derivative instruments utilized
by it are unusually complex or volatile, or expose the Company to a higher
degree of risk. These derivative instruments have not had, and are expected not
to have, an adverse impact on the results of operations. See Note 5 of the Notes
to Consolidated Financial Statements for additional information with respect to
derivative instruments, including recognized gains and losses on these
instruments.
The Company's short-term investments portfolio included $2.1 billion of
proceeds from securities sold under agreements to repurchase at December 31,
1994. These proceeds have been invested in U.S. government treasury securities.
The cost is approximately equivalent to fair value at December 31, 1994 due to
the Company repositioning this portfolio in December. The Company has recognized
gross realized investment losses of $154.8 million. This loss reflects the
impact that rising interest rates has had on the Company's U.S. government
portfolio.
36
Results of Operations:
Revenues declined by $171.6 and $176.3 million, or 1.3% in each case as
compared to 1993 and 1992, respectively. Income before accounting changes
decreased by $326.3 million, or 54.9%, and increased by $289.9 million as
compared to 1993 and 1992, respectively.
Insurance
Property and casualty revenues decreased by $71.3 million, or 0.9%, and
increased by $139.7 million, or 1.8%, as compared to 1993 and 1992,
respectively.
Property and casualty premium revenues increased by $563.5 and $485.0 million,
or 9.0% and 7.6%, as compared to 1993 and 1992, respectively. Property and
casualty earned premiums were $6.8 billion up 9.0% from the $6.3 billion earned
in 1993 and up 7.6% from 1992. The 1994 earned premium increase was principally
attributable to increases in medium commercial accounts ($211 million), group
accident and health ($132 million), professional liability ($138 million), and
international reinsurance ($65 million). In addition, involuntary risks premium
was $84 million above the prior year. Property and casualty investment income
was up 17.0% from the $1.1 billion reported in 1993 and up 1.3% from 1992.
Investment income increased primarily due to the continuing increase in interest
rates and a decrease in short-term investments (excluding investments relating
to loaned securities) from $5.1 billion at December 31, 1993 to $2.3 billion at
December 31, 1994.
Property and casualty underwriting losses were $1.2 billion in 1994, compared
to $1.8 and $3.0 billion in 1993 and 1992, respectively. The combined ratio was
115.0 for 1994, compared with 127.3 and 144.8 for 1993 and 1992, respectively.
As previously discussed, the primary reason for the 1993 and 1992 poor operating
results was the addition of $500 million in underwriting losses related to
Fibreboard in 1993 and $1.5 billion in 1992.
Catastrophe losses (pre-tax) for 1994 were approximately $283 million,
compared with $74 million in 1993 and $270 million in 1992. CNA's 1994
catastrophe losses related primarily to the Northridge earthquake near Los
Angeles and severe winter storms in the Northeast. While it is too early to
estimate the magnitude of the insured losses from the January 17, 1995
earthquake in Kobe, Japan, the amounts are not expected to be significant.
Property and casualty pre-tax results include losses for involuntary risks of
$17.8 million in 1994. Involuntary risk charges were $80.8 and $257.3 million in
1993 and 1992, respectively. The improved results in 1994 are due to the overall
improvement in the workers' compensation market over the last two years.
Involuntary risks include mandatory participation in residual markets, statutory
assessments for insolvencies of other insurers and other involuntary charges.
CNA's share of involuntary risks is generally a function of its share of the
voluntary market by line of insurance in each state. CNA records the estimated
effects of its mandatory participation in residual markets on an accrual basis.
These estimates are adjusted as premium, claim and expense activity is received
from the residual markets' administrators. CNA records assessments for
insolvencies as they are paid rather than on an accrual basis. Such an accrual
process would be very difficult, as past experience is not a reliable indicator
of future activity. Further, information currently available from all the
states' life and property and casualty guarantee funds is fairly limited and
would not provide reliable data on which to base an estimated liability. Many
states allow recovery of insolvency assessments by a direct offset to premium
taxes or a separate policy surcharge. In addition, some states assess
prospectively based on current premiums written.
CNA, consistent with sound insurance reserving practices, regularly adjusts
its reserve estimates in subsequent reporting periods as new facts and
circumstances emerge that indicate the previous estimates need to be modified.
These adjustments, referred to as "reserve development," are inevitable given
the complexities of the reserving process and are recorded in the income
statement in the period the need for the adjustment is determined. The property
and casualty underwriting losses include net reserve decreases of $71 million
for 1994.
Results for 1994 also reflect adverse development for asbestos and
environmental pollution claims which were offset by favorable development in
other lines. Favorable trends were represented primarily by positive severity
experience in professional liability lines and improvement in voluntary and
involuntary workers' compensation experience, resulting in reserve decreases of
$188 and $100 million, respectively.
37
Reserve strengthening related to prior years, net of reinsurance recoverable,
amounted to $590 and $1,617 million for the years 1993 and 1992, respectively.
Reserve development includes strengthening of $37, $601 and $1,689 million for
years 1994, 1993 and 1992, respectively, for asbestos claims, primarily
representing reserve additions related to the Fibreboard litigation, as
discussed previously.
Adverse reserve development for environmental pollution claim and claim
expenses totaled $180, $446 and $48 million, for the years 1994, 1993 and 1992,
respectively. Prior to 1993, CNA identified reserves only for reported
environmental pollution claims. As of December 31, 1994 and 1993, CNA carried
approximately $427 and $340 million, respectively, of claim and claim expense
reserves for unreported environmental pollution claims in addition to the $79
and $94 million, respectively, of reserves recorded for reported claims. CNA has
not attributed any reinsurance to reserves for unreported claims. The reserves
for reported claims cited above are net of reinsurance recoverable of $3 and $5
million at December 31, 1994 and 1993, respectively. See Notes 10 and 18 of the
Notes to Consolidated Financial Statements for further discussion of asbestos
and environmental pollution exposures.
In early 1994, Casualty began to reposition its portfolios to longer
maturities. The repositioning was undertaken in order to improve future overall
investment returns. Casualty reduced its short-term portfolios and purchased
five and ten year government securities. Short-term investments (excluding
investments relating to loaned securities) for the property and casualty
subsidiaries decreased from $5.1 billion at December 31, 1993 to $2.3 billion at
December 31, 1994.
Casualty sold approximately $25.0 billion of fixed income and equity
securities in 1994, realizing pre-tax net losses of $167.9 million. Of the
securities sold, approximately $15, $7 and $3 billion were from the U.S.
Treasury, Government mortgage-backed and tax exempt municipal bond portfolios,
respectively.
CNA sells a variety of individual and group insurance products. The individual
and group insurance products currently being marketed consist primarily of term,
universal life, participating policies and individual annuity products. Group
insurance products include life, accident and health, consisting primarily of
major medical and hospitalization, and pension products.
Life insurance revenues increased by $80.5 and $87.4 million, or 2.9% and
3.1%, as compared to 1993 and 1992, respectively. Life premium revenues
increased by $224.4 and $223.8 million, or 9.4% and 9.4%, as compared to 1993
and 1992, respectively. Life investment income increased by approximately 20%
for the same reasons described for property and casualty operations. Short-term
investments (excluding investments relating to loaned securities) for the life
group decreased from $1.2 billion at December 31, 1993 to $260.7 million at
December 31, 1994.
Cigarettes
Revenues increased by $6.7 million, or 0.3%, and decreased by $269.9 million,
or 12.3%, as compared to 1993 and 1992, respectively. Income before accounting
changes increased by $7.2 million, or 2.1%, and decreased by $176.7 million, or
33.7%, as compared to 1993 and 1992, respectively.
Revenues increased, as compared to 1993, by approximately $225.0 million, or
11.7%, due to an increase in unit sales volume, partially offset by a decline of
approximately $218.3 million, or 11.4%, due to lower unit prices. Compared to
1992, revenues declined by approximately $297.6 million, or 13.6%, due to lower
unit prices, partially offset by an increase of approximately $27.7 million, or
1.3%, due to increased sales volume. The price decline as compared to 1992
included an increase of approximately $71.7 million, or 3.3%, from the increase
of federal excise taxes of $2.00 per thousand cigarettes on January 1, 1993.
Lorillard's unit sales volume increased by 13.3% and 1.4% as compared to 1993
and 1992, respectively. Unit sales volume of the U.S. cigarette industry has
increased by 6.2% and declined 9.0% over the same periods. Newport, a premium
brand which accounts for two-thirds of Lorillard's unit sales, increased by
11.5% and 2.8% as compared to 1993 and 1992, respectively. With the industry
wide list price reduction of premium price brands, effective August 9, 1993, the
growth rate of discount brands appears to have slowed and Lorillard's product
line has benefited in terms of unit sales. Discount brand sales have increased
from an average of 30% during 1992 to an average of 33% during 1994. At December
31, 1994, they represented 31.5% of industry sales. Virtually all of Lorillard's
sales are in the premium brand category.
Although Lorillard has benefited from an increase in unit sales volume, the
overall impact of the pricing changes has reduced industry profit margins. It is
expected that lower consumer cigarette consumption will continue to influence
overall industry unit volume and the discount category will be a significant
influence in overall sales.
38
U.S. federal excise taxes on cigarettes increased $2.00 per thousand effective
January 1, 1993. The effects of any additional federal tax increases, as well as
increases by state and local taxing authorities, or manufacturers' price
increases cannot be determined, but it is likely they would add to the overall
industry decline and the growth in the discount category.
Hotels
Revenues increased by $32.2 and $16.0 million, or 17.4% and 7.9%, as compared
to 1993 and 1992, respectively. Results from operations before accounting
changes increased by $18.8 and $15.1 million, as compared to 1993 and 1992,
respectively.
Intensive rate competition continues to adversely affect average room rates,
although occupancies have improved.
Revenues and results of operations include pre-tax and after-tax gain on sales
of two hotel leases amounting to $30.2 and $15.4 million, respectively, for the
year ended December 31, 1994. Excluding this gain, revenues increased due
primarily to higher occupancy rates as compared to 1993. Revenues declined, as
compared to 1992, due to lower average room rates as well as lower occupancy
rates at the Loews Monte Carlo hotel resulting from depressed economic
conditions in southern Europe coupled with an absence of Italian tourist
business on the Riviera. Results from operations before accounting changes,
excluding the sale of the hotel leases, improved due to the increased occupancy
rates as compared to 1993. Results from operations declined slightly, as
compared to 1992, due primarily to the lower revenues.
Watches and Other Timing Devices
Revenues decreased by $2.1 and $29.9 million, or 1.4% and 16.5%, as compared
to 1993 and 1992, respectively. Results from operations before accounting
changes decreased by $1.6 and $3.6 million, or 66.6% and 81.5%, as compared to
1993 and 1992, respectively.
Revenues and results from operations declined, as compared to 1993, due
primarily to a gain on sale of an inactive defense manufacturing facility in the
prior year. Revenues and results from operations declined, as compared to 1992,
due primarily to lower industrial and defense sales volume related to a $19.5
million payment by the U.S. government in 1992 in favorable settlements of
defense contract claims. This benefit was partially offset by a charge of
approximately $2.4 million for the write-off of parts inventory and equipment
related to these contracts, as well as a continuing decline of defense business.
Bulova's watch business continues to benefit from a change in its product sales
mix as well as lower interest expense.
Drilling
Revenues increased by $15.5 and $86.0 million, or 5.4% and 39.5%, as compared
to 1993 and 1992, respectively. Net loss increased by $19.4 million and
decreased by $15.2 million as compared to 1993 and 1992, respectively.
Diamond Offshore began 1994 with strong demand in the Gulf of Mexico where
many of its rigs are located, although utilization declined due to an influx of
rigs into the region from other depressed areas of the world. As a result, day
rates never responded to the increased demand and were also negatively impacted
by a depressed natural gas price during the second half of 1994.
Internationally, depressed conditions continued through the first half of 1994
due mainly to depressed oil prices and political instability in some countries.
However, a second half improvement in the price of oil strengthened demand as
operators reinstated deferred drilling programs.
Revenues increased, as compared to 1993, due to higher day rates for
international semisubmersible rigs and increased number of offshore turnkey
wells drilled. Net loss increased due to higher rig maintenance costs,
relocation expenses and increased interest expense.
Revenues increased and net loss decreased, as compared to 1992, due to
increased utilization and day rates for domestic semisubmersible rigs.
39
Other
Revenues decreased by $233.1 and $205.6 million, as compared to 1993 and 1992,
respectively. Net income decreased by $160.8 and $167.8 million as compared to
1993 and 1992, respectively. Other operations consist primarily of investment
income of non-insurance companies and the Company's investment in CBS Inc.
Revenues and net income decreased due primarily to realized investment losses
from securities transactions. Pre-tax realized investment (losses) gains
amounted to $(201.9), $62.5 and $49.2 million for the years ended December 31,
1994, 1993 and 1992, respectively. Realized investment (losses) gains after-tax
amounted to $(131.3), $38.7 and $31.3 million for the respective periods.
Exclusive of securities transactions, other revenues increased $31.4 and $45.5
million, or 29.8% and 50.0%, due primarily to increased investment income and,
as compared to 1992, higher earnings (accounted for under the equity method) of
CBS Inc. Net income increased by $9.2 million and decreased by $5.1 million due
primarily to the increased revenues discussed above. Net income decreased, as
compared to 1992, due to higher interest expense, partially offset by the
increased revenues.
Accounting Developments:
In May 1993, the FASB issued SFAS No. 114, "Accounting by Creditors for
Impairment of a Loan." This Statement, as amended, addresses the accounting by
creditors for impairment of certain loans. The Statement requires that
applicable loans be treated as impaired when it is probable that a creditor will
be unable to collect all amounts (both principal and interest) contractually
due. This Statement applies to financial statements for fiscal years beginning
after December 15, 1994 and will not have a significant impact on the Company.
Disclosures of Certain Significant Risks and Uncertainties-In December 1994,
the Accounting Standards Division of the AICPA issued SOP 94-6. Disclosure of
Certain Significant Risks and Uncertainties. This SOP requires reporting
entities to include in their financial statements disclosures about the nature
of their operations and the use of estimates in the preparation of financial
statements. Additional disclosures are required for certain significant
estimates utilized in the financial statements and current vulnerability due to
certain concentrations if specific criteria are met. This Statement would be
effective for financial statements issued for fiscal years ending after December
15, 1995 and will not have a significant impact on the Company.
40
Item 8. Financial Statements and Supplementary Data.
Loews Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
------------------------------
(Amounts in thousands of dollars) 1994 1993
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments (Notes 1, 3, 4 and 5):
Fixed maturities, amortized cost of $21,644,672 and $17,132,086 ........... $20,852,079 $17,657,856
Equity securities, cost of $1,270,324 and $1,028,733 ...................... 1,438,140 1,240,256
Mortgage loans and notes receivable ....................................... 68,004 121,439
Policy loans .............................................................. 176,231 173,606
Other investments ......................................................... 104,210 72,085
Short-term investments .................................................... 8,437,617 8,025,201
------------------------------
Total investments ...................................................... 31,076,281 27,290,443
Cash ........................................................................ 160,557 155,703
Receivables-net (Notes 1 and 2) ............................................. 8,068,016 7,474,753
Inventories (Notes 1 and 7) ................................................. 244,394 241,287
Investment in associated companies (Note 6) ................................. 301,550 490,654
Property, plant and equipment-net (Notes 1 and 8) ........................... 1,089,868 1,038,179
Deferred income taxes (Note 11) ............................................. 1,679,172 1,074,410
Other assets (Notes 13 and 14) .............................................. 611,315 564,600
Deferred policy acquisition costs of insurance subsidiaries (Note 1) ........ 1,024,561 979,166
Separate Account business (Notes 1 and 4) ................................... 6,080,262 6,540,557
------------------------------
Total assets ........................................................... $50,335,976 $45,849,752
==============================
See Notes to Consolidated Financial Statements.
</TABLE>
41
<TABLE>
<CAPTION> December 31,
------------------------------
1994 1993
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Liabilities and Shareholders' Equity:
Insurance reserves (Notes 1 and 10):
Claim and claim expense ................................................... $22,564,751 $21,670,202
Future policy benefits .................................................... 3,046,054 2,735,691
Unearned insurance premiums ............................................... 2,690,679 2,556,015
Policyholders' funds ...................................................... 632,283 477,095
-----------------------------
Total insurance reserves ............................................... 28,933,767 27,439,003
Accounts payable and accrued liabilities .................................... 1,153,033 914,895
Payable for securities purchased ............................................ 489,797 190,138
Securities sold under agreements to repurchase (Notes 1 and 3) .............. 4,571,517 613,250
Long-term debt, less unamortized discount (Notes 4 and 12) .................. 2,144,394 2,195,670
Deferred credits and other liabilities (Notes 1 and 13) ..................... 713,131 795,767
Separate Account business (Notes 1 and 4) ................................... 6,080,262 6,540,557
-----------------------------
Total liabilities ...................................................... 44,085,901 38,689,280
-----------------------------
Minority interest ........................................................... 844,761 1,033,274
-----------------------------
Commitments and contingent liabilities
(Notes 1, 3, 5, 10, 11, 12, 13, 14, 17, 18 and 20)
Shareholders' equity (Notes 1, 3, 6, 12, 13 and 15):
Common stock, $1 par value:
Authorized-200,000,000 shares
Issued and outstanding-58,964,900 and 61,524,700 shares .................. 58,965 61,525
Additional paid-in capital ................................................. 219,137 210,289
Earnings retained in the business .......................................... 5,469,874 5,476,660
Unrealized (depreciation) appreciation ..................................... (322,700) 406,736
Pension liability adjustment ............................................... (19,962) (28,012)
-----------------------------
Total shareholders' equity ............................................. 5,405,314 6,127,198
-----------------------------
Total liabilities and shareholders' equity ............................. $50,335,976 $45,849,752
=============================
</TABLE>
42
Loews Corporation and Subsidiaries
STATEMENTS OF CONSOLIDATED INCOME
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------
(Amounts in thousands, except per share data) 1994 1993 1992
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues (Note 1):
Insurance premiums (Note 14):
Property and casualty .......................................... $ 6,837,122 $ 6,273,654 $6,352,166
Life ........................................................... 2,616,466 2,392,027 2,392,690
Investment income, net of expenses (Note 3) ...................... 1,671,254 1,377,754 1,584,321
Realized investment (losses) gains (Note 3) ...................... (446,980) 862,797 407,247
Manufactured products (including excise taxes of $431,720,
$379,361 and $355,816) .......................................... 2,061,415 2,055,084 2,363,431
Other ............................................................ 775,924 725,461 591,599
--------------------------------------
Total ......................................................... 13,515,201 13,686,777 13,691,454
--------------------------------------
Expenses (Note 1):
Insurance claims and policyholders' benefits (Notes 10 and 14) ... 9,246,446 9,271,536 10,697,227
Amortization of deferred policy acquisition costs ................ 1,373,090 1,193,421 1,067,689
Cost of manufactured products sold ............................... 929,342 864,115 878,465
Selling, operating, advertising and administrative expenses ...... 1,525,610 1,506,049 1,417,696
Interest ......................................................... 174,565 162,298 148,843
--------------------------------------
Total ......................................................... 13,249,053 12,997,419 14,209,920
--------------------------------------
266,148 689,358 (518,466)
--------------------------------------
Income taxes (benefits) (Note 11) ................................ (9,041) 46,567 (388,691)
Minority interest ................................................ 7,355 48,670 (107,678)
--------------------------------------
Total ......................................................... (1,686) 95,237 (496,369)
--------------------------------------
Income (loss) before cumulative effect of accounting changes ....... 267,834 594,121 (22,097)
Cumulative effect of accounting changes-net (Note 1) ............... 144,711
--------------------------------------
Net income ......................................................... $ 267,834 $594,121 $122,614
======================================
Earnings Per Share (Note 15):
Income (loss) before cumulative effect of accounting changes ..... $4.45 $9.27 $(.33)
Cumulative effect of accounting changes-net ...................... 2.20
--------------------------------------
Net income ........................................................ $4.45 $9.27 $1.87
======================================
See Notes to Consolidated Financial Statements.
</TABLE>
43
Loews Corporation and Subsidiaries
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Earnings Unrealized Pension Common
Common Paid-in Retained in (Depreciation) Liability Stock Held
(Amounts in thousands) Stock Capital the Business Appreciation Adjustment in Treasury
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1991 ........ $67,558 $162,162 $5,464,036 $ (2,419) $ 24,265
Net income ...................... 122,614
Dividends paid, $1 per share .... (65,810)
Purchases of common stock ....... 238,223
Retirement of common stock
held in treasury ............... (2,459) (6,172) (253,857) (262,488)
Net unrealized appreciation ..... 34,251
Equity in certain transactions of
subsidiary companies ........... 7,086
----------------------------------------------------------------------------
Balance, December 31, 1992 ........ 65,099 163,076 5,266,983 31,832
Net income ...................... 594,121
Dividends paid, $1 per share .... (64,289)
Purchases of common stock ....... 336,297
Retirement of common stock
held in treasury ............... (3,574) (12,568) (320,155) (336,297)
Accounting change (Note 1) ...... 367,928
Net unrealized appreciation ..... 6,976
Pension liability adjustment
(Note 13) ...................... $(28,012)
Equity in certain transactions of
subsidiary companies (Note 6) .. 59,781
----------------------------------------------------------------------------
Balance, December 31, 1993 ........ 61,525 210,289 5,476,660 406,736 (28,012)
Net income ...................... 267,834
Dividends paid, $1 per share .... (60,240)
Purchases of common stock ....... 226,851
Retirement of common stock
held in treasury ............... (2,560) (9,911) (214,380) (226,851)
Net unrealized depreciation ..... (729,436)
Pension liability adjustment
(Note 13) ...................... 8,050
Equity in certain transactions of
subsidiary companies (Note 6) .. 18,759
----------------------------------------------------------------------------
Balance, December 31, 1994 ........ $58,965 $219,137 $5,469,874 $(322,700) $(19,962)
============================================================================
See Notes to Consolidated Financial Statements.
</TABLE>
44
Loews Corporation and Subsidiaries
STATEMENTS OF CONSOLIDATED CASH FLOWS
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------
(Amounts in thousands) 1994 1993 1992
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Activities:
Net income ....................................................... $ 267,834 $ 594,121 $ 122,614
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of accounting changes ........................ (144,711)
Undistributed earnings from unconsolidated cos. ................ (30,127) (50,045) (26,170)
Distribution of CBS equity earnings ............................ 91,609 3,787 3,029
Provision for minority interest ................................ 7,355 48,670 (107,678)
Amortization of investments .................................... (120,008) (95,262) (127,416)
Depreciation and amortization .................................. 160,677 135,101 138,370
Realized investment losses (gains) ............................. 446,980 (862,797) (407,247)
Provision for deferred income taxes ............................ (112,071) (181,601) (382,691)
Changes in assets and liabilities-net:
Reinsurance receivables ........................................ (236,029) 298,185 457,892
Other receivables .............................................. (369,651) 349,971 (327,966)
Deferred policy acquisition costs .............................. (45,395) (92,162) (34,065)
Insurance reserves and claims .................................. 1,484,367 1,229,486 2,496,282
Accounts payable and accrued liabilities ....................... 78,791 403,027 (28,336)
Other-net ...................................................... (125,081) (119,803) 26,704
-----------------------------------------
1,499,251 1,660,678 1,658,611
-----------------------------------------
Investing Activities:
Purchases of fixed maturities .................................... (34,282,130) (42,893,379) (32,343,428)
Proceeds from sales of fixed maturities .......................... 25,398,705 41,339,798 32,854,377
Proceeds from maturities of fixed maturities ..................... 4,506,352 2,349,370 1,414,987
Purchases of equity securities ................................... (1,195,103) (957,846) (574,478)
Proceeds from sales of equity securities ......................... 1,034,118 874,460 435,147
Return of investment from CBS tender offer ....................... 183,991
Purchases of property and equipment .............................. (209,092) (159,480) (123,658)
Proceeds from sales of property and equipment .................... 97,738 20,276 17,184
Securities sold under agreements to repurchase ................... 3,958,267 2,263 (789,248)
Change in short-term investments ................................. (594,935) (2,259,348) (1,841,219)
Change in other investments ...................................... (63,444) 8,146 151,821
Purchase of business-net of cash acquired ........................ (372,242)
-----------------------------------------
(1,165,533) (1,675,740) (1,170,757)
-----------------------------------------
Financing Activities:
Dividends paid to shareholders ................................... (60,240) (64,289) (65,810)
Purchases of treasury shares ..................................... (225,074) (336,297) (238,223)
Principal payments on long-term debt ............................. (54,463) (745,163) (210,662)
Issuance of long-term debt ....................................... 517 1,181,910 1,517
Receipts credited to policyholders ............................... 32,779 47,481 47,293
Withdrawals of policyholder account balances ..................... (22,383) (18,185) (18,476)
-----------------------------------------
(328,864) 65,457 (484,361)
-----------------------------------------
Net change in cash ................................................. 4,854 50,395 3,493
Cash, beginning of year ............................................ 155,703 105,308 101,815
-----------------------------------------
Cash, end of year .................................................. $ 160,557 $ 155,703 $ 105,308
=========================================
See Notes to Consolidated Financial Statements.
</TABLE>
45
Loews Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies-
Principles of Consolidation-The consolidated financial statements include all
significant subsidiaries and all material intercompany accounts and transactions
have been eliminated. The equity method of accounting is used for investments in
associated companies in which the Company generally has an interest of 20% to
50%.
Accounting Changes-Effective December 31, 1993, the Company adopted Statement
of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." This Statement requires that
investments in debt and equity securities classified as available for sale be
carried at fair value. Previously, fixed income securities classified as
available for sale were carried at the lower of aggregate amortized cost or fair
value. Unrealized gains and losses are reflected as a separate component of
shareholders' equity, net of deferred income taxes, participating policyholders'
and minority interests. The effect of adopting this Statement was to increase
shareholders' equity by $367,928,000 (net of $293,973,000 in deferred income
taxes, participating policyholders' and minority interests). The adoption of
this Statement did not impact net income. Separate Account assets invested in
debt securities have also been classified as available for sale and are carried
at fair value.
Effective January 1, 1993, the Company adopted SFAS No. 113, "Accounting and
Reporting for Reinsurance of Short-duration and Long-duration Contracts." This
Statement establishes the conditions required for a contract to be accounted for
as reinsurance, prescribes accounting and reporting standards for those
contracts, and requires that balances pertaining to reinsurance transactions be
reported "gross" on the balance sheet rather than reductions of reserves for
claim and claim expense, policy benefits or unearned premiums.
The provisions of SFAS No. 113 that pertain to risk transfer and recognition
of revenues and costs did not impact the Company's income or shareholders'
equity as all material reinsurance arrangements are prospective and provided for
the transfer of risk.
In 1992 the Company adopted SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" and SFAS No. 109, "Accounting for
Income Taxes." CBS Inc. (accounted for under the equity method) has also adopted
SFAS Nos. 106 and 109 as well as SFAS No. 112, "Employers' Accounting for
Postemployment Benefits" which requires accrual of benefits to be provided to
former or inactive employees after employment, but before retirement. In
addition, CNA Financial Corporation ("CNA"), an 84% owned subsidiary, changed
its method of accounting from reporting ultimate reserves for fixed and
determinable claim reserves related to workers' compensation lifetime claims and
accident and health disability claims to discounting such reserves consistent
with accounting practices on other similar fixed and determinable claims. The
cumulative effect as of January 1, 1992 of adopting these accounting changes is
as follows:
<TABLE>
<CAPTION>
In thousands Per share
----------------------------
<S> <C> <C>
Postretirement benefits other than pensions (net of income tax benefit of
$102,005) ................................................................ $(201,131) $(3.06)
Accounting for income taxes ............................................... 128,991 1.96
Discounting for certain workers' compensation and disability claims (net of
income tax expense of $135,200) .......................................... 218,132 3.32
Postemployment benefits of CBS Inc. (net of income tax benefit of $94) .... (1,281) (.02)
---------------------------
$ 144,711 $ 2.20
===========================
</TABLE>
Investments-Investments in securities, which are held principally by insurance
subsidiaries of CNA, are carried as follows:
The Company believes it has the ability to hold all fixed income investments
until maturity. However, securities may be sold to take advantage of investment
opportunities generated by changing interest rates, prepayments, tax and credit
considerations, as part of the Company's asset/liability strategy, or for other
similar factors. As a result, the Company considers its fixed maturity
securities (bonds and redeemable preferred stocks) and equity securities as
available for sale and they are carried at fair value. The amortized cost of
debt securities is adjusted for amortization of premiums and accretion of
discounts to maturity. Such amortization is included in investment income.
Derivative instruments are generally held for trading purposes and as such,
are marked to market and gains or losses are included in realized investment
gains or losses.
46
Mortgage loans are carried at unpaid principal balances, including unamortized
premium or discount. Real estate is carried at depreciated cost. Policy loans
are carried at unpaid balances. Short-term investments include U.S. government
securities, commercial paper and time deposits and are carried at fair value,
which approximates amortized cost.
All securities transactions are recorded on the trade date. The cost of
securities sold is determined by the identified certificate method. The
unrealized gain or loss on investments which are revalued to current market
values is net of applicable deferred income taxes and participating
policyholders' and minority interests and is reflected as part of shareholders'
equity in unrealized (depreciation) appreciation. Investments are written down
to estimated fair values and losses are charged to income when a decline in
value is considered to be other than temporary.
Securities sold under agreements to repurchase-The Company has a securities
lending program where securities are loaned to third parties, primarily major
brokerage firms. Borrowers of these securities must deposit cash and/or
securities equal to 102% of the market value of the securities, plus interest.
Cash deposits from these transactions have been invested in short-term
investments (primarily U.S. government securities and commercial paper). The
Company continues to receive the interest on the loaned debt securities, as
beneficial owner, and accordingly the loaned debt securities are included in
fixed maturity securities.
Insurance Operations-Premium revenue-Insurance premiums on property and
casualty and health insurance contracts (included in life premiums) are earned
ratably over the terms of the policies after provision for estimated adjustments
on retrospectively rated policies and deductions for ceded insurance. Revenues
on universal life type contracts are comprised of contract charges and fees
which are recognized over the coverage period when assessed against the
policyholders' account balances. Other life insurance premiums are recognized as
revenue when due after deductions for ceded insurance.
Claim and claim expense reserves-Claim and claim expense reserves, except
reserves for structured settlements, workers' compensation lifetime claims and
accident and health disability claims, are based on (a) case basis estimates for
losses reported on direct business, adjusted in the aggregate for ultimate loss
expectations, (b) estimates of unreported losses based upon past experience, (c)
estimates of assumed insurance, (d) estimates of future expenses to be incurred
in settlement of claims, and (e) estimates of claim recoveries. In establishing
these estimates, consideration is given to current conditions and trends as well
as past company and industry experience.
Structured settlements have been negotiated for claims on certain property and
casualty insurance policies. Structured settlements are agreements to provide
periodic payments to claimants, which are fixed and determinable as to the
amount and time of payment. Certain structured settlements are funded by
annuities purchased from CNA's life insurance subsidiary. Related annuity
obligations are carried in future policy benefits reserves. Obligations for
structured settlements not funded by annuities are carried at discounted values
which approximate the alternative cost of annuity purchases. Such reserves,
discounted at interest rates ranging from 6.3% to 7.5%, totaled $839,000,000 and
$748,900,000 at December 31, 1994 and 1993, respectively.
Workers' compensation lifetime claims and accident and health disability claim
reserves are discounted at interest rates ranging from 3.5% to 6.0% with
mortality and morbidity assumptions reflecting current industry experience. Such
discounted reserves totaled $1,114,900,000 and $969,800,000 at December 31, 1994
and 1993, respectively.
Claim and claim expense reserves are based on estimates and the ultimate
liability may vary significantly from such estimates. Any adjustments that are
made to the reserves are reflected in operating income in the year such
adjustments are made. See Note 10 for a further discussion of claim and claim
expense reserves.
Future policy benefits reserves-Reserves for traditional life insurance
products are computed based upon net level premium methods using actuarial
assumptions as to interest rates, mortality, morbidity, withdrawals and
expenses. Actuarial assumptions include a margin for adverse deviations and
generally vary by plan, age at issue and policy duration. Interest rates range
from 3% to 10.5%, and mortality, morbidity and withdrawal assumptions reflect
CNA and industry experience prevailing at the time of issue. Renewal expense
estimates include the estimated effects of inflation and expenses beyond the
premium paying period.
Involuntary risks-CNA's share of involuntary risks is generally a function of
its share of the voluntary market by line of insurance in each state. CNA
records the estimated effects of its mandatory participation in residual markets
on an accrual basis. These estimates are adjusted as premium, claim and expense
activity are received from the residual markets' administrators. CNA records
assessments for insolvencies as they are paid rather than on an accrual basis.
Such an accrual process would be very difficult, as past experience is not a
reliable indicator of future activity. Further, information currently available
from all the states' life and property and casualty guarantee funds is fairly
limited and would not provide reliable data on which to base an estimated
liability.
47
Many states allow recovery of insolvency assessments by a direct offset to
premium taxes or a separate policy surcharge. In addition, some states assess
prospectively based on current premiums written.
Reinsurance-CNA assumes and cedes insurance with other insurers and reinsurers
and members of various reinsurance pools and associations. CNA utilizes
reinsurance arrangements to limit its maximum loss, to provide greater
diversification of risk and to minimize exposures on larger risks. The
reinsurance coverages are tailored to the specific risk characteristics of each
product line with CNA's retained amount varying by type of coverage. Generally,
reinsurance coverage for property risks is on excess of loss, per risk basis.
Liability coverages are generally reinsured on a quota share basis in excess of
CNA's retained risk. Amounts recoverable from reinsurers are estimated in a
manner consistent with the claim liability associated with the reinsured policy.
Deferred policy acquisition costs-Costs of acquiring insurance business, which
vary with and are primarily related to the production of such business, are
deferred. Such costs include commissions, premium taxes, and certain
underwriting and policy issuance costs. Property and casualty acquisition costs
are amortized ratably over the period the related premiums are recognized.
Anticipated investment income is considered in the determination of the
recoverability of deferred policy acquisition costs. Life acquisition costs are
capitalized and amortized based on assumptions consistent with those used for
computing policy benefit reserves. Acquisition costs on ordinary life business
are amortized over the assumed premium paying periods. Universal life and
investment annuity acquisition costs are amortized in proportion to the present
value of estimated gross profits over the products' assumed durations, which are
regularly evaluated and adjusted, as appropriate. To the extent that unrealized
gains or losses on available for sale securities would result in an adjustment
of deferred policy acquisition costs had those gains or losses actually been
realized, the related unamortized deferred policy acquisition costs are recorded
as an adjustment of the unrealized gains or losses included in shareholders'
equity.
Restricted investments-On December 30, 1993, CNA deposited $986,800,000 in an
escrow account, pursuant to the Fibreboard Global Settlement Agreement, as
discussed in Note 18. The funds are included in short-term investments and are
invested in U.S. treasury securities. At December 31, 1994 the escrow account
amounted to $1,009,900,000. The escrow account is the prefunding mechanism to
the trust fund for future claimants.
Participating business-Participating business represented 0.9%, 1.1% and 1.2%
of CNA's gross life insurance in force and 1.0%, 1.1% and 1.2% of life insurance
premium income for 1994, 1993 and 1992, respectively. Participating
policyholders' equity is determined by allocating 90% of related net income or
loss and unrealized investment gains or losses to such business, less dividends
determined by CNA's Board of Directors. In the accompanying Statements of
Consolidated Income, revenues and benefits and expenses include amounts related
to participating policies; the net income or loss allocated to participating
policyholders' equity is a component of insurance claims and policyholders'
benefits.
Separate Account business-CNA's life insurance subsidiary, Continental
Assurance Company ("CAC"), issues certain investment and annuity contracts, the
assets and liabilities of which are legally segregated and reflected in the
accompanying Consolidated Balance Sheets as assets and liabilities of Separate
Account business. CAC guarantees principal and a specified return to the
contractholders of approximately 88% of the Separate Account business.
Substantially all assets of the Separate Accounts are carried at fair value.
Separate Account liabilities are carried at the higher of contract value or the
fair value of the underlying assets. Investment income and gains and losses for
the Separate Account accrue to the contractholders and are therefore not
included in the Statements of Consolidated Income or Cash Flows, except for
funding which may be required under the guarantees.
Statutory capital and surplus-Statutory capital and surplus and net income
(loss), determined in accordance with accounting practices prescribed or
permitted by the Illinois Insurance Department, for property and casualty and
life insurance subsidiaries are as follows:
<TABLE>
<CAPTION>
Statutory Capital
and Surplus Statutory Net Income (Loss)
---------------------- -------------------------------
December 31, Years Ended December 31,
---------------------- -------------------------------
1994 1993 1994 1993 1992
----------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C> <C>
Property and casualty ................... $3,367,294 $3,598,415 $67,339 $120,710 $(1,043,050)
Life .................................... 1,054,633 1,021,970 65,102 99 11,831
</TABLE>
48
Statutory Accounting Practices-CNA's insurance affiliates are domiciled in
Illinois, California, Connecticut, New York, Pennsylvania and Texas. These
affiliates prepare their statutory financial statements in accordance with
accounting practices specifically "prescribed" or otherwise "permitted" by the
respective state's insurance department. Prescribed statutory accounting
practices are set forth in a variety of publications of the National Association
of Insurance Commissioners ("NAIC"), as well as state laws, regulations and
general administrative rules. CNA has no material "permitted" accounting
practices.
Inventories-Tobacco products-These inventories, aggregating $171,532,000 and
$174,377,000 at December 31, 1994 and 1993, respectively, are stated at the
lower of cost or market, using the last-in, first-out (LIFO) method.
Watches and other timing devices-These inventories, aggregating $56,961,000
and $52,109,000 at December 31, 1994 and 1993, respectively, are stated at the
lower of cost or market, using the first-in, first-out (FIFO) method.
Property, Plant and Equipment-Property, plant and equipment is carried at cost
less accumulated depreciation. Depreciation is computed principally by the
straight-line method over the estimated useful lives of the various classes of
properties. Leaseholds and leasehold improvements are depreciated or amortized
over the terms of the related leases (including optional renewal periods where
appropriate) or the estimated lives of improvements, if less than the lease
term.
The principal service lives used in computing provisions for depreciation are
as follows:
<TABLE>
<CAPTION>
Years
-----
<S> <C>
Buildings and building equipment .................................... 40
Building fixtures ................................................... 10 to 20
Machinery and equipment ............................................. 5 to 12
Hotel equipment ..................................................... 4 to 12
Drilling equipment .................................................. 10 to 25
</TABLE>
Research and Development Costs-Research and development costs are charged to
expense as incurred and amounted to $11,751,000, $11,866,000 and $11,521,000 for
the years ended December 31, 1994, 1993 and 1992, respectively.
Reclassification-Certain amounts applicable to prior periods have been
reclassified to conform to the classifications followed in 1994.
2. Receivables-
<TABLE>
<CAPTION>
December 31,
---------------------------
1994 1993
---------------------------
(In thousands)
<S> <C> <C>
Reinsurance ....................................... $3,754,980 $2,951,664
Other insurance ................................... 3,294,142 3,657,048
Security sales .................................... 376,932 467,329
Federal income taxes .............................. 166,782 96,623
Other ............................................. 615,185 431,831
---------------------------
Total ...................................... 8,208,021 7,604,495
Less allowance for doubtful accounts and cash
discounts ........................................ 140,005 129,742
---------------------------
Receivables-net .............................. $8,068,016 $7,474,753
===========================
</TABLE>
49
3. Investments-
Investment income consisted of:
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------
1994 1993 1992
-----------------------------------------
(In thousands)
<S> <C> <C> <C>
Investment income:
Fixed maturities:
Bonds:
Tax exempt .................... $ 333,748 $ 504,896 $ 728,031
Taxable ....................... 1,019,094 539,695 622,967
Redeemable preferred stocks .... 13,523 21,231 11,207
Equity securities ................ 28,198 16,441 19,068
Mortgage loans ................... 6,156 15,410 13,001
Policy loans ..................... 10,538 10,413 10,587
Security repurchase transactions . 271,210 11,204 24,162
Short-term investments ........... 174,085 276,900 174,997
Other ............................ 25,841 12,138 22,586
---------------------------------------
Total investment income ...... 1,882,393 1,408,328 1,626,606
Investment expenses ............... 24,038 24,789 26,563
Security repurchase transactions .. 187,101 5,785 15,722
---------------------------------------
Investment income-net ........ $1,671,254 $1,377,754 $1,584,321
=======================================
<CAPTION>
Realized investment (losses) gains are as follows:
Years Ended December 31,
----------------------------------------
1994 1993 1992
----------------------------------------
(In thousands)
<S> <C> <C> <C>
Fixed maturities .................. $ (314,840) $ 765,848 $ 303,622
Equity securities ................. 41,645 92,129 34,315
Guaranteed separate accounts ...... 35,496
Derivative instruments ............ (14,578) 124 (8,346)
Short-term investments ............ (164,709) 1,076 16,947
Other ............................. 5,502 3,620 25,213
---------------------------------------
(446,980) 862,797 407,247
Income tax benefit (expense) ...... 155,278 (300,002) (132,980)
Allocated to participating
policyholders .................... 10,877 (13,142) (12,140)
Minority interest ................. 25,133 (87,752) (39,785)
---------------------------------------
Realized investment (losses)
gains-net ................... $ (255,692) $ 461,901 $ 222,342
=======================================
</TABLE>
The carrying value of investments (other than equity securities) that have not
produced income for the last twelve months is $80,900,000 at December 31, 1994.
Investment gains of $322,364,000 and $1,020,703,000 and losses of $760,268,000
and $161,650,000 were realized on securities available for sale for the years
ended December 31, 1994 and 1993, respectively. Total investment gains of
$459,000,000 and losses of $155,378,000 were realized on sales of fixed
maturities for the year ended December 31, 1992.
50
The amortized cost and market values of securities available for sale are as
follows:
<TABLE>
<CAPTION>
Unrealized
Amortized ------------------------- Market
Cost Gains Losses Value
----------------------------------------------------
(In thousands)
December 31, 1994
-----------------
<S> <C> <C> <C> <C>
United States government and obligations of government
agencies ............................................ $11,395,193 $ 15,574 $ 629,091 $10,781,676
Asset-backed ......................................... 2,693,152 11,192 140,854 2,563,490
States, municipalities and political subdivisions-tax
exempt .............................................. 3,716,711 121,810 68,949 3,769,572
Corporate ............................................ 1,956,471 19,826 104,681 1,871,616
Other debt ........................................... 1,459,388 23,366 45,857 1,436,897
Redeemable preferred stocks .......................... 423,757 8,261 3,190 428,828
----------------------------------------------------
Total fixed maturities .......................... 21,644,672 200,029 992,622 20,852,079
Equity securities .................................... 1,270,324 228,387 60,571 1,438,140
Short-term investments ............................... 8,448,056 1,142 11,581 8,437,617
----------------------------------------------------
$31,363,052 $ 429,558 $ 1,064,774 $30,727,836
====================================================
<CAPTION>
December 31, 1993
-----------------
<S> <C> <C> <C> <C>
United States government and obligations of government
agencies ............................................ $ 6,482,814 $ 80,070 $ 8,405 $ 6,554,479
Asset-backed ......................................... 2,514,596 42,073 9,373 2,547,296
States, municipalities and political subdivisions-tax
exempt .............................................. 4,725,384 316,717 27,260 5,014,841
Corporate ............................................ 1,800,548 64,042 12,768 1,851,822
Other debt ........................................... 1,163,454 80,033 2,053 1,241,434
Redeemable preferred stocks .......................... 445,290 3,493 799 447,984
----------------------------------------------------
Total fixed maturities .......................... 17,132,086 586,428 60,658 17,657,856
Equity securities .................................... 1,028,733 229,806 18,283 1,240,256
Short-term investments ............................... 8,025,623 135 557 8,025,201
----------------------------------------------------
$26,186,442 $ 816,369 $ 79,498 $26,923,313
====================================================
</TABLE>
The amortized cost and market value of fixed maturities at December 31, 1994
and 1993 are shown below by contractual maturity. Actual maturities differ from
contractual maturities because securities may be called or prepaid with or
without call or prepayment penalties.
<TABLE>
<CAPTION>
December 31,
------------------------------------------------------
1994 1993
------------------------------------------------------
Amortized Market Amortized Market
Cost Value Cost Value
------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Due in one year or less .............................. $ 1,618,863 $ 1,610,765 $ 687,704 $ 702,683
Due after one year through five years ................ 7,483,980 7,083,688 7,500,849 7,597,198
Due after five years through ten years ............... 4,718,157 4,409,223 1,466,050 1,520,597
Due after ten years .................................. 5,130,520 5,184,913 4,962,887 5,290,082
Asset-backed securities not due at a single maturity
date ................................................ 2,693,152 2,563,490 2,514,596 2,547,296
-----------------------------------------------------
$21,644,672 $20,852,079 $17,132,086 $17,657,856
=====================================================
</TABLE>
51
4. Fair Value of Financial Instruments-
<TABLE>
<CAPTION>
December 31,
-----------------------------------------------------
1994 1993
------------------------------------------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Financial Assets:
Investments:
Mortgage loans and notes receivable .............. $ 68,004 $ 67,515 $ 74,816 $ 77,914
Policy loans ..................................... 176,231 155,154 173,606 163,566
Other investments ................................ 101,126 102,127 67,891 70,664
Separate Account assets:
Fixed maturities available for sale .............. 5,250,229 5,250,229 6,234,964 6,234,964
Equity securities available for sale ............. 139,515 139,515 145,663 145,663
Other ............................................ 690,518 691,761 159,930 168,570
Financial Liabilities:
Premium deposits and annuity contracts ............. 602,971 593,563 544,669 534,948
Long-term debt ..................................... 2,132,090 1,957,770 2,182,210 2,284,651
Financial guarantee liabilities .................... 441,800 425,200 352,500 350,300
Separate Account liabilities:
Guaranteed investment contracts .................. 4,747,882 4,874,603 4,875,440 5,178,817
Deferred annuities ............................... 62,527 88,961 66,458 81,433
Variable separate accounts ....................... 168,351 168,351 222,780 222,780
Other ............................................ 658,605 658,605 887,440 887,440
</TABLE>
In cases where quoted market prices are not available, fair values may be
based on estimates using present value or other valuation techniques. These
techniques are significantly affected by the assumptions used, including the
discount rates and estimates of future cash flows. Accordingly, the estimates
presented herein are subjective in nature and are not necessarily indicative of
the amounts that the Company could realize in a current market exchange. The
amounts reported in the balance sheet for fixed maturities securities, equity
securities, derivative instruments, short-term investments and securities sold
under agreements to repurchase are at fair value. As such, these financial
instruments are not shown in the table above. See Note 5 for the fair value of
derivative instruments. Since the disclosure excludes certain financial
instruments and all nonfinancial instruments such as real estate and insurance
reserves, the aggregate fair value amounts cannot be summed to determine the
underlying economic value of the Company.
The following methods and assumptions were used by the Company in estimating
its fair value disclosures for financial instruments:
Fixed maturity securities, equity securities and separate account securities
are based on quoted market prices where available. For securities not actively
traded, fair values are estimated using values obtained from independent pricing
services or quoted market prices of comparable instruments adjusted for
differences between the quoted instruments and the instruments being valued.
Fair value for mortgage loans and notes receivable and policy loans are
estimated using discounted cash flow analyses, at interest rates currently being
offered for similar loans to borrowers with comparable credit ratings. Loans
with similar characteristics are aggregated for purposes of the calculations.
Other investments and other Separate Account assets consist of investments in
limited partnerships, short term securities and various miscellaneous assets.
Valuation techniques to determine fair value consist of discounted cash flows
and quoted market prices of (a) the investments, (b) comparable instruments or
(c) underlying assets of the investments. The fair value of certain assets
contained above approximates their carrying value.
Premium deposits and annuity contracts are valued based on cash surrender
values and the outstanding fund balances.
The fair value of the liability for financial guarantee contracts is based on
discounted cash flows utilizing interest rates currently being offered for
similar contracts and spot interest rates.
52
Guaranteed investment contracts and deferred annuities of the separate
accounts are estimated using discounted cash flow calculations, based on
interest rates currently being offered for similar contracts with maturities
consistent with those remaining for the contracts being valued. The fair value
of the liabilities for variable separate accounts are based on the quoted market
values of the underlying assets of each variable separate account. The fair
value of other separate account liabilities approximates carrying value.
Fair value of long-term debt traded on securities exchanges is based on quoted
market prices. The fair values for other long-term debt are based on quoted
market prices of comparable instruments adjusted for differences between the
quoted instruments and the instruments being valued or are estimated using
discounted cash flow analyses, based on current incremental borrowing rates for
similar types of borrowing arrangements.
5. Off-Balance-Sheet and Derivative Financial Instruments-
The Company enters into various transactions involving off-balance-sheet
financial instruments through a variety of futures, swaps, options, forwards and
other contracts (the "Contracts") as part of its investing activities. These
Contracts are commonly referred to as derivative instruments since their
underlying values may be linked to interest rates, exchange rates, prices of
securities and financial or commodity indexes. The Company uses these Contracts
for its asset and liability management activities as well as income enhancements
for its portfolio management strategy. Entering into these Contracts involves
not only the risk of dealing with counterparties and their ability to meet the
terms of the Contracts but also the market risk associated with those positions
where the Company does not hold an offsetting security. Exposure to market risk
is managed in accordance with risk limits set by senior management by buying or
selling instruments or entering into offsetting positions.
The notional amounts of derivatives shown in the following table does not
represent amounts exchanged in these transactions and, therefore, are not a
measure of the exposure the Company has through its use of derivative
instruments. In addition, notional amounts are presented "gross" and do not
reflect the net effect of offsetting positions. The amounts exchanged are
calculated on the basis of the notional amounts and the other terms of the
derivative instruments.
The credit exposure associated with these instruments is generally limited to
the positive market value of the instruments and will vary based on changes in
market prices. The Company enters into these Contracts with large financial
institutions and considers the risk of nonperformance to be remote. In addition,
the amounts subject to credit risk are substantially mitigated by many of the
Contracts' collateral requirements.
The Company's investments in derivative instruments are as follows:
<TABLE>
<CAPTION>
December 31, 1994
----------------------------------------------------------------
Fair Value Asset (Liability)
---------------------------
Contractual/ Average Estimated
Notional for Potential Recognized
Value Year-End the Year Exposure Gain (Loss)
----------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C> <C>
Interest rate swaps ..................... $ 75,000 $ 556 $ (1,338) $ (7,600)(1) $ (8,892)
Options on equities and equity index .... 711,989 (1,345) (566) (8,200)(1) 32,524
Options on foreign currency ............. 75,000 110 1,385 (2,992)
Financial futures and forwards:
Foreign currency ...................... 586,837 (550) (14,211) (5,600)(1) (3,800)
Equity index and other ................ 78,918 121 141 (7,900)(1) (25,339)
Commodity:
Swaps ................................. 295,570 (29,024) (27,022) (53,300)(2) (5,760)
Options ............................... 208,495 224 5,539 1,391
Futures ............................... 9,129 30 196 (500)(3) 103
Forwards .............................. 4,487
Purchase obligations .................. 87,990 (16,170) (13,545) (14,400)(2) (6,300)
------------------------------------- --------
Total .............................. $2,128,928 $(46,048) $(49,421) $(14,578)
===================================== ========
</TABLE>
53
<TABLE>
<CAPTION>
December 31, 1993
----------------------------------------------------------------
Fair Value Asset (Liability)
---------------------------
Contractual/ Average Estimated
Notional for Potential Recognized
Value Year-End the Year Exposure Gain (Loss)
----------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C> <C>
Interest rate swaps ..................... $ 75,000 $(8,005) $ (2,844) $ (6,700)(1) $ (7,962)
Options on equities and equity index .... 488,562 (21,201) (17,768) (15,800)(1) (3,052)
Financial futures and forwards:
Foreign currency ............ ......... 513,576 (5,146) (625) (37,400)(1) 35,670
Equity index and other ................ 325,503 758 (158) (30,900)(1) (1,881)
Commodity:
Swaps ................................. 344,870 (32,277) (7,077) (62,500)(2) (25,193)
Options ............................... 203,776 5,897 13,089 (300)(3) (2,068)
Futures ............................... 35,068 980 824 (1,000)(3) 5,127
Forwards .............................. 60,687 3,248 402 (12,800)(2) 4,786
Purchase obligations .................. 87,990 (9,870) (6,440) (15,600)(2) (5,470)
Other ................................... 173 167
-------------------------------------- -------
Total .............................. $2,135,032 $(65,616) $(20,424) $ 124
===================================== =======
</TABLE>
Note: The calculation of estimated potential exposure is based on assumed
adverse changes in the underlying reference price or index of (1) 10%, (2)
20% or (3) 5%. Adverse changes on options which differ from those
presented above would not necessarily result in a proportionate change to
the estimated potential exposure.
The notional values presented in the tables above include purchased options of
$475,803,000 and $299,584,000 at December 31, 1994 and 1993, respectively.
The Company's measure of exposure represents an estimate of net losses that
would be recognized on each class of derivative instrument held by the Company
at December 31, assuming immediate adverse market movements of the magnitude
described above. The Company believes that the various rates of adverse market
movements represent a measure of exposure to loss under assumed adverse
conditions considering the remaining maturities of the derivatives and actual
market movements in recent past periods. The estimated market exposure does not
represent the maximum possible loss nor any expected actual loss, even under
adverse conditions, because actual adverse fluctuations would likely differ. In
addition, since the Company's investment portfolio is subject to change based on
its portfolio management strategy as well as in response to changes in the
market, these estimates are not necessarily indicative of the actual results
which may occur.
The Company also enters into short sales as part of its portfolio management
strategy. These sales resulted in proceeds of $117,924,000 and $76,063,000 with
fair value liabilities of $144,507,000 and $75,840,000 at December 31, 1994 and
1993, respectively. At December 31, 1993, the Company had commitments to
purchase government and municipal securities at a notional value of $211,000,000
and fair value of $100,000.
Estimated fair values approximate carrying values and are based on quoted
market prices, where available. For securities not actively traded, fair values
are estimated using values obtained from independent pricing services, quoted
market prices of comparable instruments or present value models.
Through August 1, 1989, CNA's property and casualty operations wrote financial
guarantee insurance contracts. These contracts primarily represent industrial
development bond guarantees and equity guarantees typically extending from ten
to thirteen years. For these guarantees, CNA received an advance premium which
is recognized over the exposure period and in proportion to the underlying
exposure insured.
At December 31, 1994 and 1993, gross exposure of financial guarantee insurance
contracts amounted to $630,000,000 and $792,000,000, respectively. The degree of
risk attached to this exposure is substantially reduced through reinsurance,
collateral requirements and diversification of exposures. At December 31, 1994
and 1993, collateral consisting of letters of credit and debt service reserves
amounted to $45,000,000 and $48,000,000, respectively. In addition, security
interests in real estate are also obtained. Approximately 38% of the risks were
ceded to reinsurers at December 31, 1994 and 1993. Total exposure, net of
reinsurance, amounted to $393,000,000 and $492,000,000 at December 31, 1994 and
1993, respectively. Gross unearned premium reserves for financial guarantee
contracts were $22,000,000 and $33,000,000 at December 31, 1994 and 1993,
respectively. Gross claim and claim expense reserves totaled $420,000,000 and
$320,000,000 at December 31, 1994 and 1993, respectively.
54
6. Investments in Associated Companies-
The Company's investment in associated companies primarily consists of its
investment in CBS Inc. ("CBS"). At December 31, 1994, the Company held
approximately 18% of the outstanding common shares of CBS and accounts for it on
the equity method.
The Company's carrying value for its investment in CBS is $294,346,000 and
$473,483,000 (market value of $607,047,000 and $873,975,000) at December 31,
1994 and 1993, respectively.
The Company's equity in the earnings of CBS after giving effect to purchase
value adjustments amounted to $45,837,000, $58,990,000 and $27,012,000 before
taxes and $30,801,000, $52,641,000 and $24,717,000 after taxes for the years
ended December 31, 1994, 1993 and 1992, respectively. Dividends received
amounted to $5,227,000, $3,787,000 and $3,029,000 for the respective periods.
On September 1, 1994, CBS completed a cash tender offer at an amount exceeding
its net book value per share for repurchase of its common stock aggregating
approximately $1,137,500,000, or 22% of its common shares. The Company tendered
its shares and received cash amounting to $270,373,000, comprised of $86,382,000
realization of previously undistributed earnings and $183,991,000 representing a
return of the Company's investment. As a result of the tender, the Company's
ownership in CBS decreased from approximately 20% to 18% and the Company's
additional paid-in capital increased by $11,531,000.
In May 1993, $389.6 million of CBS 5% convertible debentures were converted
for 1,947,975 shares of common stock. The difference between the amount of debt
converted and the average cost of the treasury shares issued, net of unamortized
issue costs related to this debt, was credited to additional paid-in capital. As
a result, the Company's ownership in CBS decreased from approximately 23% to 20%
and the Company's additional paid-in capital increased by $58,942,000.
In 1992, CBS adopted SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," SFAS No. 109, "Accounting for Income Taxes" and
SFAS No. 112, "Employers' Accounting for Postemployment Benefits," effective
January 1, 1992. The cumulative effect of these accounting changes resulted in
recognition by Loews of a charge of $17.4 million, or $.27 per share, in
relation to its investment in CBS.
Summarized financial information for CBS is as follows:
<TABLE>
<CAPTION>
December 31,
-------------------------
1994 1993
-------------------------
(In thousands)
<S> <C> <C>
Current assets ................................. $ 947,900 $1,677,500
Non-current assets ............................. 1,212,200 1,741,200
-------------------------
Total assets .............................. 2,160,100 3,418,700
-------------------------
Current liabilities ............................ 793,000 1,038,900
Long-term debt ................................. 507,300 590,300
Other liabilities .............................. 582,700 651,500
-------------------------
Total liabilities ......................... 1,883,000 2,280,700
-------------------------
Shareholders' equity ........................... $ 277,l00 $1,138,000
=========================
<CAPTION>
Years Ended December 31,
----------------------------------------
1994 1993 1992
----------------------------------------
(In thousands)
<S> <C> <C> <C>
Net sales .................................................... $3,711,900 $3,510,100 $3,503,000
========================================
Cost of sales ................................................ $2,823,200 $2,688,800 $2,906,500
========================================
Income before cumulative effect of accounting changes ........ $ 281,600 $ 326,200 $ 162,500
========================================
Net income ................................................... $ 281,600 $ 326,200 $ 81,000
========================================
</TABLE>
55
7. Inventories-
<TABLE>
<CAPTION>
December 31,
------------------------
1994 1993
------------------------
(In thousands)
<S> <C> <C>
Leaf tobacco .................................... $ 140,385 $ 145,259
Manufactured stock .............................. 82,902 76,946
Materials, supplies, etc. ....................... 21,107 19,082
------------------------
Total ...................................... $ 244,394 $ 241,287
========================
</TABLE>
If the average cost method of accounting had been used for tobacco inventories
instead of the LIFO method, such inventories would have been $190,719,000 and
$211,227,000 higher at December 31, 1994 and 1993, respectively.
8. Property, Plant and Equipment-
<TABLE>
<CAPTION>
December 31,
-------------------------
1994 1993
-------------------------
(In thousands)
<S> <C> <C>
Land ............................................ $ 33,355 $ 33,482
Buildings and building equipment ................ 423,447 395,748
Machinery and equipment ......................... 1,317,940 1,189,062
Leaseholds and leasehold improvements ........... 26,994 32,008
-------------------------
Total, at cost ............................. 1,801,736 1,650,300
Less accumulated depreciation and amortization .. 711,868 612,121
-------------------------
Property, plant and equipment-net .......... $1,089,868 $1,038,179
=========================
<CAPTION>
Depreciation and amortization expense and capital expenditures, by business
segment, are as follows:
Years Ended December 31,
-------------------------------------------------------------------------
1994 1993 1992
-------------------------------------------------------------------------
Depr. & Capital Depr. & Capital Depr. & Capital
Amort. Expend. Amort. Expend. Amort. Expend.
-------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Property and casualty insurance $ 49,605 $ 99,316 $ 24,431 $ 84,100 $ 8,030 $ 18,315
Life insurance ................. 16,680 10,218 21,931 5,372 32,644 13,604
Cigarettes ..................... 22,504 31,202 21,973 26,996 18,314 23,205
Hotels ......................... 17,457 19,923 15,940 18,110 15,479 11,550
Watches and other timing devices 1,827 1,230 2,248 1,310 5,608 3,617
Drilling ....................... 49,910 46,146 43,938 70,276 52,550 471,067
-------------------------------------------------------------------------
Total business segments.... 157,983 208,035 130,461 206,164 132,625 541,358
Corporate ...................... 2,694 1,057 4,640 1,343 5,745 3,472
-------------------------------------------------------------------------
Total ..................... $160,677 $209,092 $135,101 $207,507 $138,370 $544,830
=========================================================================
</TABLE>
9. Purchase of Business-
In January 1992 Diamond Offshore Drilling, Inc., a wholly owned subsidiary,
acquired all of the outstanding common stock of Odeco Drilling, Inc. ("Odeco")
at a purchase price of $372,242,000 in cash. Odeco owned and operated 40
offshore drilling rigs that were used in drilling oil and gas wells. The
acquisition has been accounted for by the purchase method.
56
10. Liability for Unpaid Claim and Claim Adjustment Expenses-
CNA's property and casualty insurance claim and claim expense reserves
represent the estimated amounts necessary to settle all outstanding claims,
including claims which are incurred but not reported, as of the reporting date.
The Company's reserve projections are based primarily on detailed analysis of
the facts in each case, CNA's experience with similar cases, and various
historical development patterns. Consideration is given to such historical
patterns as field reserving trends, loss payments, pending levels of unpaid
claims and product mix, as well as court decisions, economic conditions and
public attitudes. All of these can affect the estimation of reserves. The
effects of inflation, which can be significant, are implicitly considered in the
reserving process and part of the recorded reserve balance. Reserves are not
present valued except in the case of workers' compensation lifetime claims and
accident and health disability claims where the reserves are explicitly
discounted at rates allowed by insurance regulators that range from 3.5% to 6.0%
and structured settlements where such reserves are discounted at interest rates
ranging from 6.3% to 7.5%.
Estimating loss reserves is a difficult process as there are many factors that
can ultimately affect the final settlement of a claim and, therefore, the
reserve that is needed. Changes in the law, results of litigation, medical
costs, the cost of repair materials and labor rates can all impact ultimate
claim costs. In addition, time can be a critical part of reserving
determinations since the longer the span between the incidence of a loss and the
payment or settlement of the claim, the more variable the ultimate settlement
amount can be. Accordingly, short-tail claims, such as property damage claims,
tend to be more reasonably predictable than long-tail claims, such as general
liability and professional liability claims.
Changes in reserves for property and casualty claim and claim expense:
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------
1994 1993 1992
------------------------------------------
(In thousands)
<S> <C> <C> <C>
Reserves at beginning of year:
Gross ....................................................... $20,812,000 $20,034,000 $17,712,000
Ceded reinsurance ........................................... 2,491,000 2,867,000 3,297,000
------------------------------------------
Net. ..................................................... 18,321,000 17,167,000 14,415,000
------------------------------------------
Net incurred claim and claim expenses:
Provision for insured events of current year ................ 5,611,000 5,388,000 5,708,000
(Decrease) increase in provision for insured events of prior
years (a) ................................................. (71,000) 590,000 1,617,000
Amortization of discounts ................................... 100,000 94,000 104,000
-----------------------------------------
Total net incurred ....................................... 5,640,000 6,072,000 7,429,000
-----------------------------------------
Net payments:
Attributable to current year events ......................... 1,388,000 1,202,000 1,260,000
Attributable to prior year events ........................... 3,629,000 3,706,000 3,411,000
Amortization of discounts ................................... 10,000 10,000 6,000
-----------------------------------------
Total net payments ....................................... 5,027,000 4,918,000 4,677,000
-----------------------------------------
Net reserves at end of year ................................... $18,934,000 $18,321,000 $17,167,000
=========================================
Gross reserves at beginning of year ........................... $20,812,000 $20,034,000 $17,712,000
-----------------------------------------
Gross incurred claim and claim expenses:
Provision for insured events of current year ................. 6,125,000 5,817,000 6,382,000
Increase in provision for insured events of prior years ...... 213,000 305,000 1,487,000
Amortization of discounts .................................... 100,000 94,000 104,000
-----------------------------------------
Total gross incurred ..................................... 6,438,000 6,216,000 7,973,000
-----------------------------------------
Gross payments:
Attributable to current year events .......................... 1,468,000 1,278,000 1,348,000
Attributable to prior year events ............................ 4,133,000 4,150,000 4,297,000
Amortization of discounts .................................... 10,000 10,000 6,000
-----------------------------------------
Total gross payments ..................................... 5,611,000 5,438,000 5,651,000
-----------------------------------------
Gross reserves at end of year (b) ............................. $21,639,000 $20,812,000 $20,034,000
=========================================
</TABLE>
(a) Includes $500,000 and $1,500,000 related to Fibreboard for the years ended
December 31, 1993 and 1992, respectively.
(b) Excludes life claim and claim expense reserves and intercompany eliminations
of $926,000, $858,000 and $699,000 as of December 31, 1994, 1993 and 1992,
respectively, included in the Consolidated Balance Sheets.
57
Environmental Pollution and Asbestos-Potential exposures exist for claims
involving environmental pollution, including toxic waste clean-up. Environmental
pollution clean-up is the subject of both federal and state regulation. By some
estimates, there are thousands of potential waste sites subject to clean-up. The
insurance industry is involved in extensive litigation regarding coverage
issues. Judicial interpretations in many cases have expanded the scope of
coverage and liability beyond the original intent of the policies.
The Comprehensive Environmental Response Compensation and Liability Act of
1980 ("Superfund") and comparable state statutes ("mini-Superfund") govern the
clean-up and restoration of abandoned toxic waste sites and formalize the
concept of legal liability for clean-up and restoration by "Responsible Parties"
("RP's"). Superfund and the mini-Superfunds (Environmental Clean-up Laws or
"ECLs") establishes a mechanism to pay for clean-up of waste sites if RP's fail
to do so, and to assign liability to RP's. The extent of liability to be
allocated to an RP is dependent on a variety of factors. Further, the number of
waste sites subject to clean-up is unknown. To date, approximately 1,300 clean-
up sites have been identified by the Environmental Protection Agency on its
National Priorities List. On the other hand, the Congressional Budget Office is
estimating that there will be 4,500 National Priority List sites, and other
estimates project as many as 30,000 sites that will require clean-up under ECLs.
Very few sites have been subject to clean-up to date. The extent of clean-up
necessary and the assignment of liability has not been established.
CNA and the insurance industry are disputing coverage for many such claims.
Key coverage issues include whether Superfund response costs are considered
damages under the policies, trigger of coverage, applicability of pollution
exclusions, the potential for joint and several liability and definition of an
occurrence. Similar coverage issues exist for clean-up of waste sites not
covered under Superfund. To date, courts have been inconsistent in their rulings
on these issues.
A number of proposals to reform Superfund have been made by various parties,
however no reforms were enacted by Congress in 1994. The Superfund taxing
authority will expire at the end of 1995 and will, therefore, need to be
addressed by the new, 104th Congress. While the next Congress may address this
issue, no predictions can be made as to what positions the Congress or the
Administration will take and what legislation, if any, will result. If there is
legislation, and in some circumstances even if there is no legislation, the
federal role in environmental clean-up may be materially reduced in favor of
state action. Substantial changes in the federal statute or the activity of the
EPA may cause states to reconsider their environmental clean-up statutes and
regulations. There can be no meaningful prediction of the pattern of
regulation that would result.
Due to the inherent uncertainties described above, including the inconsistency
of court decisions, the number of waste sites subject to clean-up, and the
standards for clean-up and liability, the exposure to CNA for environmental
pollution claims cannot be meaningfully quantified. In 1994 and 1993, CNA
allocated approximately $427 and $340 million, respectively, of claim and claim
expense reserves for unreported environmental pollution claims in addition to
the $79 and $94 million, respectively, of reserves recorded for reported claims.
CNA has not attributed any reinsurance to reserves for unreported claims. The
reserves for reported claims cited above are net of reinsurance recoverable of
$3 and $5 million at December 31, 1994 and 1993, respectively. Claim and claim
expense reserves represent management's estimates of ultimate liabilities based
on currently available facts and law. However, in addition to the uncertainties
previously discussed, additional issues related to, among other things, specific
policy provisions, multiple insurers and allocation of liability among insurers,
consequences of conduct by the insured, missing policies and proof of coverage
make quantification of liabilities exceptionally difficult and subject to later
adjustment based on new data.
The number of claims filed for environmental pollution coverage continues to
increase. Approximately 1,900 claims were reported in 1994 and approximately
20,000 claims have been reported to date. Pending claims totaled approximately
9,900 and 10,100 at December 31, 1994 and 1993, respectively. Approximately
10,100 claims were closed through December 31, 1994, of which approximately
9,100 claims were settled without payment, except for claim expenses of $26
million. Settlements for the remaining 1,000 claims totaled $129 million, plus
claim expenses of $36 million (net of reinsurance recoveries of $34 and $4
million for claim and claim expenses, respectively). Adverse reserve development
for environmental claims totaled $180 and $446 million for the years ended
December 31, 1994 and 1993, respectively. The foregoing claims statistics
represent claims for accident years 1988 and prior, which coincides with CNA's
adoption of the Simplified Commercial General Liability coverage form which
included an absolute pollution exclusion. In previous filings, such disclosures
included claims for all accident years.
The results of operations in future years may continue to be adversely
affected by environmental pollution claim and claim expenses. Management will
continue to monitor potential liabilities and make further adjustments as
warranted.
58
Most of the unfavorable asbestos-related reserve development is attributable
to CNA's on-going litigation with Fibreboard Corporation. A detailed discussion
of CNA's litigation with Fibreboard Corporation regarding asbestos-related
bodily injury claims can be found in Note 18.
CNA, consistent with sound reserving practices, regularly adjusts its reserve
estimates in subsequent reporting periods as new facts and circumstances emerge
that indicate the previous estimates need to be modified. The following table
summarizes for 1994 and 1993 the net favorable and adverse reserve development,
after effect of reinsurance.
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------
1994 1993
------------------------
(In thousands)
<S> <C> <C>
Asbestos strengthening (a) ............................ $ (37,000) $(601,000)
Environmental strengthening ........................... (180,000) (446,000)
Other reserve releases-net ............................ 288,000 457,000
-----------------------
Net reserve release (strengthening) .............. $ 71,000 $(590,000)
=======================
</TABLE>
(a) Includes $500,000 related to Fibreboard for the year ended December 31,
1993.
11. Income Taxes-
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------
1994 1993 1992
--------------------------------------
(In thousands)
<S> <C> <C> <C>
Income taxes (benefits):
Operations:
Federal:
Current ................................................ $ 82,142 $ 175,705 $ (67,809)
Deferred ............................................... (112,071) (181,601) (382,691)
State, city and other, principally current ............... 20,888 52,463 61,809
--------------------------------------
(9,041) 46,567 (388,691)
Cumulative effect of accounting changes .................... 118,209
--------------------------------------
Total ................................................. $ (9,041) $ 46,567 $ (270,482)
======================================
<CAPTION>
Deferred tax assets (liabilities) are as follows-
December 31,
-------------------------------------- January 1,
1994 1993 1992 1992
----------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Insurance reserves:
Property and casualty claim reserve discounting .. $1,027,440 $ 990,206 $ 861,323 $ 714,320
Unearned premium reserves ........................ 137,402 125,560 147,874 134,239
Life reserve differences ......................... 115,903 144,078 140,120 108,535
Others ........................................... 10,287 (12,126) 4,747 15,111
Deferred policy acquisition costs .................. (312,594) (310,228) (280,902) (282,073)
Employee benefits .................................. 157,059 144,566 128,127 117,292
Property, plant and equipment ...................... (133,195) (132,750) (148,541) (154,714)
Investments ........................................ 111,671 143,342 61,280 46,455
Alternative minimum tax credit ..................... 239,600 165,200 151,000
Other-net .......................................... 60,717 44,371 55,590 38,762
---------------------------------------------------
1,414,290 1,302,219 1,120,618 737,927
Unrealized depreciation (appreciation) ............. 282,423 (257,764) (15,601) 186
Other-net .......................................... (17,541) 29,955 4,515 387
---------------------------------------------------
Deferred tax assets-net ....................... $1,679,172 $1,074,410 $1,109,532 $ 738,500
===================================================
</TABLE>
Gross deferred tax assets amounted to $2,290,300,000, $1,895,689,000 and
$1,595,083,000 and liabilities amounted to $611,128,000, $821,279,000 and
$485,551,000, for the years ended December 31, 1994, 1993 and 1992,
respectively.
59
Total income tax expense (benefit) for the years ended December 31, 1994, 1993
and 1992 was different than the amounts of $93,152,000, $241,275,000 and
$(176,278,000), computed by applying the statutory U.S. federal income tax rate
of 35%, 35% and 34%, respectively, to income (loss) before income taxes and
minority interest for each of the years. The reasons for variances from the
statutory rate are as follows:
<TABLE>
<CAPTION>
Percent of Pre-tax Income
Years Ended December 31,
-------------------------------
1994 1993 1992
-------------------------------
<S> <C> <C> <C>
Statutory rate ............................................... 35% 35% (34)%
(Decrease)increase in income tax rate resulting from:
Exempt interest and dividends received deduction ........... (42) (28) (44)
State and city income taxes ................................ 4 7 8
Tax rate change ............................................ (5)
Special deduction-salvage and subrogation .................. (2) (3)
Other ...................................................... (2)
-----------------------------
Effective income tax rate ............................... (3)% 7% (75)%
=============================
</TABLE>
Federal, foreign, state and local income tax payments, net of refunds,
amounted to approximately $194,947,000, $10,263,000 and $355,853,000 for the
years ended December 31, 1994, 1993 and 1992, respectively.
The Tax Reform Act of 1986 enacted a new separate parallel tax system referred
to as the Alternative Minimum Tax ("AMT") system. AMT is based on a flat rate
applied to a broader tax base. It is calculated separately from the regular
federal income tax and the higher of the two taxes is paid. The excess of the
AMT over regular tax is a tax credit, which can be carried forward indefinitely
to reduce regular tax liabilities of future years. At December 31, 1994 the AMT
credit totaled approximately $239,600,000.
The Company has entered into separate tax allocation agreements with Bulova
and CNA, majority-owned subsidiaries in which its ownership exceeds 80% (the
"Subsidiaries"). Each agreement provides that the Company will (i) pay to the
Subsidiary the amount, if any, by which the Company's consolidated federal
income tax is reduced by virtue of inclusion of the Subsidiary in the Company's
return, or (ii) be paid by the Subsidiary an amount, if any, equal to the
federal income tax which would have been payable by the Subsidiary if it had
filed a separate consolidated return. Under these agreements, the federal income
tax benefit to CNA amounted to approximately $84,000,000, $17,000,000 and
$350,000,000 for the years ended December 31, 1994, 1993 and 1992, respectively,
and the federal income tax (expense) benefit to Bulova amounted to approximately
$(74,000), $2,500,000 and $(3,300,000) for the years ended December 31, 1994,
1993 and 1992, respectively. Each agreement may be cancelled by either of the
parties upon thirty days' written notice.
The Company's federal income tax returns have been examined through 1988 and
settled through 1983, and the years 1989 and 1990 are currently under
examination. While tax liabilities for subsequent years are subject to audit and
final determination, in the opinion of management the amount accrued in the
consolidated balance sheet is believed to be adequate to cover any additional
assessments which may be made by federal, state and local tax authorities and
should not have a material effect on the financial condition of the Company,
The Revenue Reconciliation Act of 1990 (the "1990 Act") required property and
casualty insurance companies to accrue estimated salvage and subrogation
recoverable for tax purposes as of January 1, 1990. Under a transition provision
of the 1990 Act, for companies that had anticipated salvage and subrogation in
determining loss reserves, 87% of such accrual as of January 1, 1990 was
forgiven. This special deduction is to be taken ratably over four taxable years
beginning in 1990. CNA recognized a tax benefit of approximately $17,000,000 in
each of the years ended December 31, 1993 and 1992, respectively.
In 1993 the Company increased its deferred tax asset by $31,636,000 due to a
1% increase in the corporate tax rate.
60
12. Long-Term Debt-
<TABLE>
<CAPTION>
December 31, 1994
---------------------------------------------------
Unamortized Current
Principal Discount Net Maturities
---------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Loews Corporation .................................. $1,192,832 $23,071 $1,169,761
CNA ................................................ 918,390 6,577 911,813 $1,632
Other .............................................. 62,820 62,820 2,758
---------------------------------------------------
Total .......................................... $2,174,042 $29,648 $2,144,394 $4,390
===================================================
<CAPTION>
December 31,
---------------------------
1994 1993
---------------------------
(In thousands)
<S> <C> <C>
Loews Corporation (Parent Company):
8.5% notes due 1998 (effective interest rate of 8.6%)
(authorized, $125,000) (a) ............................................. $ 117,832 $ 117,832
8.3% debentures due 2007 (effective interest rate of 8.4%)
(authorized, $200,000) (b) ............................................. 200,000 200,000
8.9% debentures due 2011 (effective interest rate of 9.0%)
(authorized, $175,000) ................................................. 175,000 175,000
7.6% notes due 2023 (effective interest rate of 7.8%)
(authorized, $300,000) (c) ............................................. 300,000 300,000
7% notes due 2023 (effective interest rate of 7.2%)
(authorized, $400,000) (d) ............................................. 400,000 400,000
Note payable ............................................................ 15,741
CNA Financial Corporation:
8.6% notes due 1996 (effective interest rate of 8.8%) (authorized,
$250,000) .............................................................. 250,000 250,000
8.9% notes due 1998 (effective interest rate of 9.2%) (authorized,
$150,000) .............................................................. 150,000 150,000
6.3% notes due 2003 (effective interest rate of 6.4%) (authorized,
$250,000) .............................................................. 250,000 250,000
7.3% debentures due 2023 (effective interest rate of 7.3%) (authorized,
$250,000) .............................................................. 250,000 250,000
Other senior debt (effective interest rates approximate 5.0% and 4.6%) .. 18,390 20,777
Other senior debt, principally mortgages (effective interest rates
approximate 9.3% and 8.9%) .............................................. 62,820 97,347
--------------------------
2,174,042 2,226,697
Less unamortized discount ................................................ 29,648 31,027
--------------------------
Long-term debt, less unamortized discount ........................... $2,144,394 $2,195,670
==========================
</TABLE>
(a) Net of $7,168 held by the Company.
(b) Redeemable in whole or in part at January 15, 1997 at 104%, and decreasing
percentages thereafter.
(c) Redeemable in whole or in part at June 1, 2003 at 104%, and decreasing
percentages thereafter.
(d) Redeemable in whole or in part at October 15, 2003 at 102%, and decreasing
percentages thereafter.
The aggregate of long-term debt maturing in each of the next five years is
approximately as follows: $4,390,000 in 1995, $254,010,000 in 1996, $19,645,000
in 1997, $270,639,000 in 1998 and $29,536,000 in 1999.
The Company paid interest expenses of approximately $168,901,000, $219,099,000
and $127,689,000 for the years ended December 31, 1994, 1993 and 1992,
respectively.
Payment of dividends by insurance subsidiaries of CNA without prior regulatory
agency approval is limited to certain formula-derived amounts. At December 31,
1994, $2,073,474,000 of retained earnings of subsidiaries was not available for
dividends to the Company.
61
13. Retirement Plans-
Pension Plans-The Company and its subsidiaries have several non-contributory
defined benefit plans for eligible employees. The benefits for certain plans
which cover salaried employees and certain union employees are based on formulas
which include among others, years of service and average pay. The benefits for
one plan which covers union workers under various union contracts and certain
salaried employees are based on years of service multiplied by a stated amount.
Effective January 1, 1994, a subsidiary of the Company amended its retirement
plan to allow for early retirement benefits when years of service and age equals
a minimum of 65. This amendment generated an unrecognized prior service cost of
$1,600,000.
Pension cost includes the following components:
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------------
1994 1993 1992
---------------------------------------------
(In thousands)
<S> <C> <C> <C>
Service cost-benefits earned .................. $ 43,438 $ 37,141 $ 34,292
Interest cost ................................. 86,259 81,811 76,814
Return on plan assets-actual .................. 16,582 (54,079) (55,446)
Net amortization and deferrals ................ (65,476) (7,163) (598)
----------------------------------------------
Net pension cost ............................ $ 80,803 $ 57,710 $ 55,062
==============================================
<CAPTION>
The following table sets forth the pension plans' funded status:
December 31,
-----------------------------------------------------
1994 1993
-----------------------------------------------------
Overfunded Underfunded Overfunded Underfunded
Plans Plans Plans Plans
-----------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation .................. $ 421,488 $476,994 $ 450,751 $512,907
====================================================
Accumulated vested benefit obligation ........... $ 383,296 $436,339 $ 409,399 $473,030
=====================================================
Projected benefit obligation ...................... $ 644,160 $529,612 $ 619,001 $565,127
Plan assets at fair value ......................... 508,825 336,637 483,774 361,285
-----------------------------------------------------
Projected benefit obligation over plan assets ..... 135,335 192,975 135,227 203,842
Unrecognized prior service cost ................... (16,100) (15,269) (16,273) (17,587)
Unrecognized net asset (obligation), January 1 .... 17,300 (34,156) 22,330 (39,756)
Unrecognized net loss ............................. (169,306) (67,249) (159,594) (96,156)
Additional minimum liability ...................... 78,071 102,343
-----------------------------------------------------
Net pension (asset) liability recognized in
the balance sheet ........................... $ (32,771) $154,372 $ (18,310) $152,686
=====================================================
</TABLE>
At December 31, 1994 and 1993, the Company's minimum pension liability
exceeded its unrecognized prior service cost and net transition obligation by
$30,712,000 and $43,095,000, respectively. This excess is recorded as a
reduction to shareholders' equity of $19,962,000 and $28,012,000, net of tax
benefits of $10,750,000 and $15,083,000, respectively.
The rates used in the actuarial assumptions were:
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------------------
1994 1993 1992
----------------------------------------
<S> <C> <C> <C>
Discount rate ................................................. 8.5% to 8.8% 7.3% to 7.5% 8.3% to 8.5%
Rate of compensation increase ................................. 4.0% to 6.3% 4.5% to 5.8% 5.3% to 5.5%
Expected long-term rate of return on assets ................... 7.5% to 8.8% 7.5% to 8.5% 9.0%
</TABLE>
62
The Company's funding policy is to make contributions in accordance with
applicable governmental regulatory requirements. The assets of the plans are
invested primarily in interest-bearing obligations and for one plan with an
insurance subsidiary of the Company, in its Separate Account business.
Other Postretirement Benefit Plans-The Company and its subsidiaries have
several postretirement benefit plans covering eligible employees and retirees.
Participants generally become eligible after reaching age 55 with required years
of service. Actual requirements for coverage vary by plan. Benefits for retirees
who were covered by bargaining units vary by each unit and contract. Benefits
for certain retirees are in the form of a company health care account which can
have a maximum of $4,500 per year, with an equal amount for a spouse in the same
age grouping.
Benefits for retirees reaching age 65 are generally integrated with Medicare.
Benefits for certain retirees are in the form of a company health care account
which can have a maximum value of $1,500 per year, with an equal amount for a
spouse in the same age grouping. Other retirees, based on plan provisions, must
use Medicare as their primary coverage, with the Company reimbursing a portion
of the unpaid amount; or are reimbursed for the Medicare Part B premium or have
no company coverage. The benefits provided by the Company are basically health,
and for certain retirees, life insurance type benefits.
Effective January 1, 1994, a subsidiary of the Company amended its retirement
plan to allow for early retirement when years of service and age equals a
minimum of 65. This amendment generated $11,200,000 of unrecognized prior
service costs for its postretirement benefit plan.
The Company does not fund any of these benefit plans and accrues
postretirement benefits during the active service of those employees who would
become eligible for such benefits when they retire.
The rates used in the actuarial assumptions were:
<TABLE>
<CAPTION>
December 31,
--------------------------
1994 1993
--------------------------
<S> <C> <C>
Net periodic postretirement benefit cost .......... 7.3% to 7.5% 8.3% to 8.5%
Accumulated postretirement benefit liability ...... 8.5% to 8.8% 7.3% to 7.5%
<CAPTION>
The following table sets forth the postretirement benefit plans' status:
December 31,
------------------------
1994 1993
------------------------
(In thousands)
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees ....................................... $130,245 $134,502
Fully eligible active plan participants ........ 81,477 57,376
Other active plan participants ................. 89,363 128,992
----------------------
301,085 320,870
Unrecognized prior service cost ................ (10,244) 736
Unrecognized net gain .......................... 77,072 21,869
----------------------
Accrued postretirement benefit liability ... $367,913 $343,475
======================
<CAPTION>
Postretirement benefit cost includes the following components:
Years Ended December 31,
--------------------------------
1994 1993 1992
--------------------------------
(In thousands)
<S> <C> <C> <C>
Service costs ..................................................... $13,662 $10,892 $10,807
Interest costs .................................................... 24,852 25,238 24,919
--------------------------------
Net periodic postretirement benefit cost ..................... $38,514 $36,130 $35,726
================================
</TABLE>
For measurement purposes, a trend rate for covered costs of 13.5% to 14% pre-
65 and 10.5% post-65, was used. These trend rates are expected to decrease
gradually to 5% and 8.3% at rates from 0.5% to 1.0% per annum. An increase of
one percentage point in assumed health care cost trend rates would increase the
accumulated postretirement benefit obligation by approximately $25,016,000 and
the net periodic postretirement benefit cost by approximately $3,811,000.
63
14. Reinsurance-
The effects of reinsurance on written premiums and earned premiums are as
follows:
Written Premiums:
<TABLE>
<CAPTION>
Direct Assumed Ceded Net
----------------------------------------------------
(In thousands)
Year Ended December 31, 1994
<S> <C> <C> <C> <C>
Long Duration Contracts ............................ $ 518,300 $ 118,400 $ 25,900 $ 610,800
Short Duration Contracts ........................... 8,344,400 1,398,300 710,600 9,032,100
----------------------------------------------------
Total ......................................... $8,862,700 $1,516,700 $736,500 $9,642,900
====================================================
Year Ended December 31, 1993
Long Duration Contracts ............................ $ 422,700 $ 141,600 $ 23,000 $ 541,300
Short Duration Contracts ........................... 7,654,900 1,168,400 540,100 8,283,200
----------------------------------------------------
Total ......................................... $8,077,600 $1,310,000 $563,100 $8,824,500
====================================================
Year Ended December 31, 1992
Long Duration Contracts ............................ $ 413,800 $ 146,500 $ 23,200 $ 537,100
Short Duration Contracts ........................... 7,325,800 1,367,500 506,500 8,186,800
----------------------------------------------------
Total ......................................... $7,739,600 $1,514,000 $529,700 $8,723,900
====================================================
Earned Premiums:
Year Ended December 31, 1994
Long Duration Contracts ............................ $ 413,800 $ 118,400 $ 25,900 $ 506,300
Short Duration Contracts ........................... 8,273,400 1,397,400 702,700 8,968,100
----------------------------------------------------
Total ......................................... $8,687,200 $1,515,800 $728,600 $9,474,400
====================================================
Year Ended December 31, 1993
Long Duration Contracts ............................ $ 350,100 $ 140,900 $ 23,000 $ 468,000
Short Duration Contracts ........................... 7,603,200 1,142,700 525,100 8,220,800
----------------------------------------------------
Total ......................................... $7,953,300 $1,283,600 $548,100 $8,688,800
====================================================
Year Ended December 31, 1992
Long Duration Contracts ............................ $ 376,400 $ 146,500 $ 23,200 $ 499,700
Short Duration Contracts ........................... 7,570,500 1,203,900 506,100 8,268,300
----------------------------------------------------
Total ......................................... $7,946,900 $1,350,400 $529,300 $8,768,000
====================================================
</TABLE>
The ceding of insurance does not discharge the primary liability of the
original insurer. CNA places reinsurance with other carriers only after careful
review of the nature of the contract and a thorough assessment of the
reinsurers' credit quality and claim settlement performance. Further, for
carriers that are not authorized reinsurers in Illinois, CNA receives collateral
primarily in the form of bank letters of credit, securing a large portion of the
recoverables. Such collateral totaled approximately $165.0 and $155.0 million at
December 31, 1994 and 1993, respectively. CNA's largest recoverable, including
prepaid reinsurance premiums was approximately $348.0 and $484.0 million with
Lloyd's of London at December 31, 1994 and 1993, respectively. Insurance claims
and policyholders' benefits are net of reinsurance recoveries of $827.9, $177.6
and $570.2 million for the years ended December 31, 1994, 1993 and 1992,
respectively.
64
15. Capital Stock and Earnings Per Share-
In addition to its common stock, the Company has authorized 25,000,000 shares
of preferred stock, $.10 par value.
Earnings per share, assuming no dilution, are based on the weighted average
number of shares outstanding during each year (60,192,000, 64,108,000 and
65,659,000 for the years ended December 31, 1994, 1993 and 1992, respectively).
Fully diluted earnings per share assumes conversion of the zero coupon
convertible subordinated notes (redeemed in November 1993) and elimination of
the related interest charges, net of taxes. Fully diluted earnings per share are
not presented for the year ended December 31, 1992 since such dilution is not
material.
16. Quarterly Financial Data (Unaudited)-
<TABLE>
<CAPTION>
1994 Quarters Ended 1993 Quarters Ended
----------------------------------------------------------------------------------------
Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Sept. 30 June 30 March 31
----------------------------------------------------------------------------------------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total revenues .... $3,371,400 $3,545,304 $3,393,397 $3,205,100 $3,351,634 $3,416,934 $3,375,079 $3,543,130
Net income (loss) . 79,158 134,215 60,326 (5,865) 138,403 (89,615) 203,643 341,690
Per share ........ 1.34 2.24 1.00 (.10) 2.20 (1.40) 3.16 5.25
</TABLE>
17. Leases-
The Company's hotels in some instances are constructed on leased land or are
leased. Other leases cover central office facilities, computer equipment and
operating service offices. Rent expense amounted to $78,114,000, $84,946,000 and
$85,400,000 for the years ended December 31, 1994, 1993 and 1992, respectively.
It is expected, in the normal course of business, that leases which expire will
be renewed or replaced by leases on other properties; therefore, it is believed
that future minimum annual rental commitments will not be less than the amount
of rental expense incurred in 1994. At December 31, 1994 future aggregate
minimum rental payments approximated $245,615,000.
18. Legal Proceedings and Contingent Liabilities-
Fibreboard Litigation-CNA's primary property and casualty subsidiary,
Continental Casualty Company ("Continental"), is party to litigation with
Fibreboard Corporation ("Fibreboard") involving coverage for certain asbestos-
related claims and defense costs (San Francisco Superior Court, Judicial Council
Coordination Proceeding 1072). As described below, Continental, Fibreboard,
another insurer (Pacific Indemnity, a subsidiary of the Chubb Corporation), and
a negotiating committee of asbestos claimant attorneys have reached a Global
Settlement (the "Global Settlement") to resolve all future asbestos-related
bodily injury claims involving Fibreboard. Continental, Fibreboard and Pacific
Indemnity have also reached an agreement, which is subject to court approval,
(the "Trilateral Agreement") on a settlement to resolve the coverage litigation
in the event the Global Settlement does not obtain final court approval. The
implementation of the Global Settlement or the Trilateral Agreement would have
the effect of settling Continental's litigation with Fibreboard.
On July 29, 1994 the United States District Court for the Eastern District of
Texas preliminarily approved the Global Settlement agreement. A final fairness
hearing, to determine whether to finally approve the Global Settlement
agreement, commenced on December 12, 1994. During the hearing various parties
presented evidence in opposition to the Global Settlement.
Also pending in the United States District Court for the Eastern District of
Texas is litigation over the Trilateral Agreement. Trial on the issues raised by
this agreement occurred on February 13, 1995, with evidence submitted to the
Court in opposition to final court approval of the Trilateral Agreement.
CNA and the other parties to the Global Settlement agreement and the
Trilateral Agreement completed a comprehensive court approved notice program to
provide potential claimants information about their rights and possible benefits
under the Global Settlement agreement and Trilateral Agreement. Final arguments
concerning the Global Settlement agreement occurred on February 27, 1995; the
court's rulings are expected in the spring of 1995. No date has been set for
final legal arguments for the Trilateral Agreement.
65
Coverage Litigation-Between 1928 and 1971, Fibreboard manufactured insulation
products containing asbestos. Since the 1970's, thousands of claims have been
filed against Fibreboard by individuals claiming bodily injury as a result of
asbestos exposure.
Continental insured Fibreboard under a comprehensive general liability policy
between May 4, 1957 and March 15, 1959. Fibreboard disputed the coverage
positions taken by its insurers and, in 1979, Fireman's Fund, another of
Fibreboard's insurers, brought suit with respect to coverage for defense and
indemnity costs. In January 1990, the San Francisco Superior Court (Judicial
Council Coordination Proceeding 1072) rendered a decision against the insurers
including Continental and Pacific Indemnity. The court held that the insurers
owed a duty to defend and indemnify Fibreboard for certain of the asbestos-
related bodily injury claims asserted against Fibreboard (in the case of
Continental, for all claims involving exposure to Fibreboard's asbestos products
if there was exposure to asbestos at any time prior to 1959 including years
prior to 1957, regardless of when the claims were asserted or injuries
manifested) and that the policies contained no aggregate limit of liability in
relation to such claims. The judgment was appealed.
The Court of Appeal entered an opinion on November 15, 1993, as modified on
December 13, 1993, which substantially affirmed the lower court's decisions on
scope of coverage and trigger of coverage issues, as described below. The Court
of Appeal withheld its ruling on the issues discrete to Continental and Pacific
Indemnity pending final court approval of either the Global Settlement or the
Trilateral Agreement described below. On January 27, 1994, the California
Supreme Court granted a Petition for Review filed by several insurers, including
Continental, of, among other things, the trigger and scope of coverage issues.
The order granting review has no effect on the Court of Appeal's order severing
the issues unique to Continental and Pacific Indemnity. Continental cannot
predict the time frame within which the issues before the California Supreme
Court may be resolved. If neither the Global Settlement nor the Trilateral
Agreement is approved, it is anticipated that Continental and Pacific Indemnity
will resume the appeal process. Continental's appeal of the coverage judgment
raises many legal issues. Key issues on appeal under the policy are trigger of
coverage, scope of coverage, dual coverage requirements and number of
occurrences:
. The trial court adopted a continuous trigger of coverage theory under
which all insurance policies in effect at any time from first exposure to
asbestos until the date of the claim filing or death are triggered. The
Court of Appeal endorsed the continuous trigger theory, but modified the
ruling to provide that policies are triggered by a claimant's first
exposure to the policyholder's products, as opposed to the first exposure
to any asbestos product. Therefore, an insurance policy is not triggered if
a claimant's first exposure to the policyholder's product took place after
the policy period. The court, however, placed the burden on the insurer to
prove the claimant was not exposed to its policyholder's product before or
during the policy period. The trigger of coverage issue is now on appeal to
the California Supreme Court.
Continental's position is that its policy is triggered under California
law by manifestation of appreciable harm during the policy period. The
bodily injury cannot be said to occur within the meaning of the policy
until actual physical symptoms and associated functional impairment
manifest themselves. Thus, Continental's position is that if existing
California law were applied, there would be no coverage under Continental's
policy.
. The scope of coverage decision imposed a form of "joint and several"
liability that makes each triggered policy liable in whole for each covered
claim, regardless of the length of the period the policy was in effect.
This decision was affirmed by the Court of Appeal, and is now on appeal to
the California Supreme Court. Continental's position is that liability for
asbestos claims should be shared not jointly, but severally and on a pro
rata basis between the insurers and insured. Under this theory, Continental
would only be liable for that proportion of the bodily injury that occurred
during the 22-month period its policy was in force.
. Continental maintains that both the occurrence and the injury resulting
therefrom must happen during the policy period for the policy to be
triggered. Consequently, if the court holds that the occurrence is exposure
to asbestos, Continental's position is that coverage under the Continental
policy is restricted to those who actually inhaled Fibreboard asbestos
fibers and suffered injury from May 4, 1957 to March 15, 1959. The Court of
Appeal withheld ruling on this issue, as noted above.
. Continental's policy had a $1 million per occurrence limit. Continental
contends the number of occurrences under California law must be determined
by the general cause of the injuries, not the number of claimants, and that
the cause of the injury was the continuous sale and manufacture of the
product. Because the manufacture and sale proceeded from two locations,
Continental maintains that there were only two occurrences and thus only $2
million of coverage under the policy. However, the per occurrence limit was
interpreted by the trial court to mean that each claim submitted by each
individual constituted a separate occurrence. The Court of Appeal withheld
ruling on this issue, as noted above.
66
Even if Continental were successful on appeal on the dual coverage
requirements or the number of occurrences, if the final decision in the coverage
case affirms the trial court's decision on the existence of the Pacific
Indemnity policy, then Continental would still have obligations under the
Continental and Pacific Indemnity Agreement described below.
Under various reinsurance agreements, Continental has asserted a right to
reimbursement for a portion of its potential exposure to Fibreboard. The
reinsurers have disputed Continental's right to reimbursement and have taken the
position that any claim by Continental is subject to arbitration under
provisions in the reinsurance agreement. A Federal court has ruled that the
dispute must be resolved by arbitration. There can be no assurance that
Continental will be successful in obtaining a recovery under its reinsurance
agreements.
On April 9, 1993, Continental and Fibreboard entered into an agreement
pursuant to which, among other things, the parties agreed to use their best
efforts to negotiate and finalize a global class action settlement with
asbestos-related bodily injury and death claimants.
Through December 31, 1994, Continental, Fibreboard and plaintiff attorneys had
reached settlements with respect to approximately 135,000 claims, subject to
resolution of the coverage issues, for a maximum settlement amount of
approximately $1.58 billion. If neither the Global Settlement nor the Trilateral
Agreement receives final court approval, Continental's obligation to pay under
all settlements will be partially subject to the results of the pending appeal
in the coverage litigation. Minimum amounts payable under all such agreements,
regardless of the outcome of coverage litigation, total approximately $751.8
million, of which $486.6 million was paid through December 31, 1994. Continental
may negotiate other agreements with various classes of claimants including
groups who may have previously reached agreement with Fibreboard.
Continental will continue to pursue its appeals in respect of the coverage
litigation and all other litigation involving Fibreboard if the Global
Settlement or the Trilateral Agreement cannot be implemented.
Global Settlement-On August 27, 1993, Continental, Pacific Indemnity,
Fibreboard and a negotiating committee of asbestos claimant attorneys reached an
agreement in principle for an omnibus settlement to resolve all future asbestos-
related bodily injury claims involving Fibreboard. The Global Settlement was
executed on December 23, 1993. The agreement calls for contribution by
Continental and Pacific Indemnity of an aggregate of $1.525 billion to a trust
fund for a class of all future asbestos claimants, defined generally as those
persons whose claims against Fibreboard were neither filed nor settled before
August 27, 1993. An additional $10 million is to be contributed to the fund by
Fibreboard. The Global Settlement is subject to court approval and possible
appeals. As noted below, there is limited precedent with settlements which
determine the rights of future claimants to seek relief.
Subsequent to the announcement of the agreement in principle, Continental,
Fibreboard and Pacific Indemnity entered into the Trilateral Agreement which
sets forth the parties' obligations in the event the Global Settlement is not
approved by the court. In such case, Continental and Pacific Indemnity would
contribute to a settlement fund an aggregate of $2 billion, less certain
adjustments. Such fund would be devoted to the payment of Fibreboard's asbestos
liabilities other than liabilities in respect of previously settled claims.
Continental's share of such fund would be $1.44 billion reduced by a portion of
an additional payment of $635 million which Pacific Indemnity has agreed to pay
in respect of unsettled present claims and previously settled claims.
Continental has agreed that if either the Global Settlement or the Trilateral
Agreement is approved, it will assume responsibility for the claims that had
been settled and paid before August 27, 1993. A portion of the additional $635
million to be contributed by Pacific Indemnity would be applied to the payment
of such claims as well. As a part of the Global Settlement and the Trilateral
Agreement, Continental would be released by Fibreboard from any further
liability under the comprehensive general liability policy written for
Fibreboard by Continental, including but not limited to liability for asbestos-
related claims against Fibreboard. The Trilateral Agreement is subject to court
approval and possible appeals.
Continental and Fibreboard have entered into a supplemental agreement (the
"Supplemental Agreement") which governs the interim arrangements and obligations
between the parties until such time as the Global Settlement is either approved
or disapproved by the court and also governs certain obligations between the
parties in the event the Global Settlement is approved, including the payment of
claims which are not included in the Global Settlement.
67
In addition, Continental and Pacific Indemnity have entered into an agreement
(the "Continental-Pacific Agreement") which sets forth the parties' agreement
with respect to the means for allocating among themselves responsibility for
payments arising out of the Fibreboard insurance policies whether or not the
Global Settlement or the Trilateral Agreement is approved. Under the
Continental-Pacific Agreement, Continental and Pacific Indemnity have agreed to
pay 64.71% and 35.29%, respectively, of the $1.525 billion plus expenses and
interest accrued in escrow to be used to satisfy the claims of future claimants.
If neither the Global Settlement nor the Trilateral Agreement is approved,
Continental and Pacific Indemnity would share, in the same percentages, most but
not all liabilities and costs of either insurer including, but not limited to,
liabilities in respect of unsettled present claims and presently settled claims
(regardless of whether either such insurer would otherwise have any liability
therefor). If either the Trilateral Agreement or the Global Settlement is
approved by the court, Pacific Indemnity's share for unsettled present claims
and presently settled claims will be $635 million.
Reserves-In the fourth quarter of 1992, Continental increased its reserve with
respect to potential exposure to asbestos-related bodily injury cases by $1.5
billion. In connection with the agreement in principle announced on August 27,
1993, Continental added $500 million to such claim reserve. The Fibreboard
litigation represents the major portion of Continental's asbestos-related claim
exposure.
There are inherent uncertainties in establishing a reserve for complex
litigation of this type. Courts have tended to impose joint and several
liability, and because the number of manufacturers who remain potentially liable
for asbestos-related injuries has diminished on account of bankruptcies, as has
the potential number of insurers due to operation of policy limits, the
liability of the remaining defendants is difficult to estimate. Further, a
recent trend by courts to consolidate like cases into mass tort trials limits
the discovery ability of insurers, generally does not allow for individual claim
adjudication, restricts the identification of appropriate allocation methods and
thereby results in an increasing likelihood for fraud and disproportionate and
potentially excessive judgments. Additionally, management believes that recent
court decisions would appear to be based on social or other considerations
irrespective of the facts and legal issues involved.
The Global Settlement and the Trilateral Agreement are subject to court
approval. There is limited precedent with settlements which determine the rights
of future claimants to seek relief. It is extremely difficult to assess the
magnitude of Continental's potential liability in respect of such future
claimants if neither the Global Settlement nor the Trilateral Agreement is
approved and upheld, keeping in mind that Continental's potential liability is
limited to persons exposed to asbestos prior to the termination of the policy in
1959.
Projections by experts of future trends differ widely, based upon different
assumptions with respect to a host of complex variables. Some recently published
studies, not specifically related to Fibreboard, conclude that the number of
future asbestos-related bodily injury claims against asbestos manufacturers
could be several times the number of claims brought to date. Such studies
include claims asserted against asbestos manufacturers for all years, including
claims filed or projected to be filed in respect of periods after 1959. As
indicated above, as of December 31, 1994, Continental, Fibreboard and plaintiff
attorneys have reached settlements with respect to approximately 135,000 claims,
subject to the resolution of coverage issues. Such amount does not include
presently pending or unsettled claims, claims previously dismissed or claims
settled pursuant to agreements to which Continental is not a party.
Another aspect of the complexity in establishing a reserve arises from the
widely disparate values that have been ascribed to claims by courts and in the
context of settlements. Under the terms of a settlement reached with plaintiffs'
counsel in August 1993, the expected settlement for approximately 49,500 claims
for exposure to asbestos both prior to and after 1959 is currently averaging
approximately $13,400 per claim for the before 1959 claims processed through
December 31, 1994. Based on reports by Fibreboard, between September 1988 and
April 1993, Fibreboard resolved approximately 40,000 claims, approximately 45%
of which involved no cost to Fibreboard other than defense costs, with the
remaining claims involving the payment of approximately $11,000 per claim. On
the other hand, a trial court in Texas in 1990 rendered a verdict in which
Fibreboard's liability in respect of 2,300 claims was found to be approximately
$310,000 per claim including interest and punitive damages. Fibreboard entered
into a settlement of such claims by means of an assignment of its potential
proceeds from its policy with Continental. Continental intervened and settled
these claims for approximately $77,000 on average, with a portion of the payment
contingent on approval of the Global Settlement or the Trilateral Agreement, and
if neither is approved, subject to resolution of the coverage appeal.
68
Continental believes that as a result of the Global Settlement and the
Trilateral Agreement it has greatly reduced the uncertainty of its exposure with
respect to the Fibreboard matter. However, if neither the Global Settlement, nor
the Trilateral Agreement is approved and upheld, in light of the factors
discussed herein the range of Continental's potential liability cannot be
meaningfully estimated and there can be no assurance that the reserves
established would be sufficient to pay all amounts which ultimately could become
payable in respect of asbestos-related bodily injury liabilities.
While it is possible that the ultimate outcome of this matter could have a
material adverse impact on the equity of the Company, management does not
believe that a further loss material to equity is probable. Management will
continue to monitor the potential liabilities with respect to asbestos-related
bodily injury claims and will make adjustments to the claim reserves if
warranted.
Tobacco Litigation-A number of lawsuits have been filed against Lorillard and
other manufacturers of tobacco products seeking damages for cancer and other
health effects claimed to have resulted from an individual's use of cigarettes
or exposure to tobacco smoke. Plaintiffs have asserted claims based on, among
other things, theories of negligence, fraud, misrepresentation, strict
liability, breach of warranty, enterprise liability, civil conspiracy,
intentional infliction of harm, and failure to warn of the allegedly harmful
and/or addictive nature of tobacco products. Plaintiffs seek unspecified amounts
in compensatory and punitive damages in many cases, and in other cases damages
are stated to amount to as much as $100 million in compensatory damages and $600
million in punitive damages. Presently, 54 such cases are pending in the United
States federal and state courts against manufacturers of tobacco products
generally; Lorillard is a named defendant in 17 of these cases and the Company
is a defendant in three of these cases. Twenty of these cases have been
commenced since January 1, 1994; Lorillard is a named defendant in six of the
cases filed since January 1, 1994.
In addition to cases brought by individuals, five purported class actions are
pending against Lorillard and other cigarette manufacturers, and the Company is
a defendant in one of these cases. Plaintiffs in four of the purported class
actions seek damages for alleged nicotine addiction and health effects claimed
to have resulted from the use of cigarettes, and plaintiffs in one of the
purported class actions allege health effects from exposure to tobacco smoke.
Theories of liability include a broad range of product liability theories,
theories based upon consumer protection statutes and fraud and
misrepresentation. Four of the purported class actions have been filed since
January 1, 1994. These purported class actions are more fully described below.
In Broin v. Philip Morris Companies, Inc., et al. (Circuit Court, Dade County,
Florida, filed October 31, 1991), the purported class consists of flight
attendants claiming injury as a result of exposure to environmental tobacco
smoke in the cabins of aircraft. Plaintiffs seek an unspecified amount in
compensatory damages and $5 billion in punitive damages. The trial court granted
plaintiffs' motion for class certification on December 12, 1994. Defendants have
appealed this ruling to the Florida Court of Appeals.
In Castano v. The American Tobacco Company, et al. (U.S. District Court,
Eastern District, Louisiana, filed March 29, 1994), the purported class consists
of individuals in the United States who are allegedly nicotine dependent and the
estates and heirs of individuals in the United States who were allegedly
nicotine dependent. Plaintiffs in this action are represented by a well-funded
and coordinated consortium of over 60 law firms from around the United States.
Plaintiffs seek unspecified amounts in actual damages and punitive damages. The
court issued an order on February 17, 1995 that granted in part plaintiffs'
motion for class certification. The time for defendants to request an appeal
from the order granting the motion for class certification has not expired.
In Granier v. The American Tobacco Company, et al. (U.S. District Court,
Eastern District, Louisiana, filed September 26, 1994), plaintiffs seek
certification of a class to be comprised of all residents of the United States
who are addicted to nicotine, and of survivors who claim their decedents were
addicted to nicotine. Plaintiffs seek unspecified dollar amounts in actual
damages and punitive damages and the creation of a medical monitoring fund to
monitor the health of individuals allegedly injured by their addiction to
nicotine. Plaintiffs' motion to consolidate this action with Castano, above, has
not been decided by the court.
In Engle v. R.J. Reynolds Tobacco Co., et al. (Circuit Court, Dade County,
Florida, filed May 5, 1994). the purported class consists of citizens and
residents of the United States, and the purported survivors of citizens and
residents of the United States, who have had, presently have, or have died from
diseases and medical conditions allegedly caused by smoking cigarettes
containing nicotine. Plaintiffs in this case seek actual and punitive damages in
excess of $100 billion each, and the creation of a medical fund to compensate
individuals for future health care costs. Plaintiffs' motion for class
certification was granted by the court on October 31, 1994. Defendants have
appealed this ruling to the Florida Court of Appeal.
In the fifth purported class action, Lacey v. Lorillard Tobacco Company, et
al. (U.S. District Court, Northern District, Alabama, filed March 15, 1994),
plaintiff alleges that the defendants, Lorillard and two other cigarette
69
manufacturers, did not disclose to the plaintiff or other cigarette smokers in
the State of Alabama the nature, type, extent and identity of additives,
additions, or additional substances that the defendants allegely caused or
allowed to be made a part of cigarettes or cigarette components. Plaintiff
requests injunctive relief requiring defendants to list the additives, additions
or additional substances that defendants have caused or allowed to be placed
onto or within cigarettes or cigarette components manufactured for sale and sold
in the State of Alabama. Plaintiff seeks monetary damages on behalf of his
individual claim and on behalf of each member of the purported class arising out
of the complaint's allegation not to exceed $48,500 for the individual claim or
for any individual member of the class.
In addition to the foregoing cases, four actions have been initiated in which
states or state agencies seek recovery of funds expended by the states or state
agencies to provide health care to eligible citizens with injuries or other
health effects allegedly caused by use of tobacco products or exposure to
cigarette smoke. These cases are based on, among other things, equitable claims
including indemnity, restitution, unjust enrichment and public nuisance, and
claims based on antitrust laws and state consumer protection acts. Lorillard is
named as a defendant in each of these four state or state agency actions and the
Company is named as a defendant in three of them.
The case of Moore v. The American Tobacco Company, et al. (Chancery Court,
Jackson County, Mississippi, filed May 23, 1994), was filed by the Attorney
General of Mississippi. The case of McGraw v. The American Tobacco Company, et
al. (Circuit Court, Kanawha County, West Virginia, filed on September 20, 1994),
was filed by the Attorney General of West Virginia. The case of State of
Minnesota v. Philip Morris Incorporated, et al. (District Court, Ramsey County,
Minnesota, filed August 17, 1994), was filed by the Attorney General of
Minnesota and Blue Cross and Blue Shield of Minnesota.
The case of The State of Florida, et al. v. The American Tobacco Company, et
al. (Circuit Court, Palm Beach County, Florida, filed February 22, 1995), was
filed by the State of Florida, the Governor of Florida, and two state agencies.
Plaintiffs in this case seek reimbursement under a specific Florida statute that
permits the state to sue a manufacturer to recover Medicaid costs incurred by
the state that are claimed to result from the use of the manufacturer's product.
In any such suit, the statute permits causation and damages to be proven by
statistical analysis, abrogates all affirmative defenses, adopts a "market
share" liability theory, applies joint and several liability and eliminates the
statute of repose. An action for declaratory judgment has been commenced in
Florida state court by companies and trade associations in several potentially
affected industries challenging this statute. Lorillard also understands that
elements of the Florida business community have initiated an effort to repeal or
modify the statute in a future legislative session. It is impossible at this
time to predict the ultimate outcome of this action or such efforts. Lorillard
understands that several other states, and the Congress, have considered or are
considering legislation similar to that passed in Florida.
In a fifth state, Massachusetts, the Governor on July 10, 1994 signed
legislation authorizing that state's attorney general to bring an action against
tobacco manufacturers to recover medical assistance payments for which such
companies may be liable under existing law. No action has been brought to date
by the State of Massachusetts.
The states pursuing the foregoing efforts are doing so at the urging and with
the assistance of well known members of the plaintiffs bar and these lawyers
have been meeting with attorneys general in other states to encourage them to
file similar suits.
In addition to the foregoing cases, one pending case, Cordova v. Liggett
Group, Inc., et al. Superior Court San Diego County, California, filed May 12,
1992), alleges that Lorillard and other named defendants, including other
manufacturers of tobacco products, engaged in unfair and fraudulent business
practices in connection with activities relating to the Council for Tobacco
Research-USA, Inc., of which Lorillard is a sponsor, in violation of a
California state consumer protection law by misrepresenting to or concealing
from the public information concerning the health aspects of smoking. Plaintiff
seeks an injunction ordering defendants to undertake a "corrective advertising
campaign" in California to warn consumers of the health hazards associated with
smoking, to provide restitution to the public for funds "unlawfully, unfairly,
or fraudulently" obtained by defendants, and to "disgorge" all revenues and
profits acquired as a result of defendants' "unlawful, unfair and/or fraudulent
business practices." An adverse development in this case could encourage the
filing of additional actions in other states with consumer protection laws
similar to California's.
In addition to the foregoing cases, several cases have been filed against
Lorillard seeking damages for cancer and other health effects claimed to have
resulted from exposure to asbestos fibers which were incorporated, for a limited
period of time, almost forty years ago, into the filter material used in one of
the brands of cigarettes manufactured by Lorillard. Presently twelve such cases
are pending in federal and state courts against Lorillard. The Company is not
named as a defendant in any of these cases. Six such cases have been filed since
January 1, 1994. Allegations of liability against Lorillard include negligence,
strict liability, fraud, misrepresentation and
70
breach of warranty. Plaintiffs seek unspecified amounts in compensatory and
punitive damages in many cases, and in other cases damages are stated to amount
to as much as $10 million in compensatory damages and $100 million in punitive
damages. Four of these cases are currently set for trial in 1995.
One of the defenses raised by Lorillard in certain cases is preemption by the
Federal Cigarette Labeling and Advertising Act (the "Labeling Act"). In the case
of Cipollone v. Liggett Group, Inc., et al., the United States Supreme Court, in
a plurality opinion issued on June 24, 1992, held that the Labeling Act as
enacted in 1965 does not preempt common law damage claims but that the Labeling
Act, as amended in 1969, does preempt claims against tobacco companies arising
after July 1, 1969, which assert that the tobacco companies failed to adequately
warn of the alleged health risks of cigarettes, sought to undermine or
neutralize the Labeling Act's mandatory health warnings, or concealed material
facts concerning the health effects of smoking in their advertising and
promotion of cigarettes. The Supreme Court held that claims against tobacco
companies based on fraudulent misrepresentation, breach of express warranty, or
conspiracy to misrepresent material facts concerning the alleged health effects
of smoking are not preempted by the Labeling Act. The Supreme Court in so
holding did not consider whether such common law damage actions were valid under
state law. The effect of the Supreme Court's decision on pending and future
cases against Lorillard and other tobacco companies will likely be the subject
of further legal proceedings. Additional litigation involving claims such as
those held to be preempted by the Supreme Court in Cipollone could be encouraged
if legislative proposals to eliminate the federal preemption defense, pending in
Congress since 1991, are enacted. It is not possible to predict whether any such
legislation will be enacted.
In addition to the defenses based on preemption under the Supreme Court
decision referred to above, Lorillard believes that it has a number of other
valid defenses to pending cases. These defenses, where applicable, include,
among others, statutes of limitations or repose, assumption of the risk,
comparative fault, the lack of proximate causation, and the lack of any defect
in the product alleged by a plaintiff. Lorillard believes, and has been so
advised by counsel, that some or all of these defenses may, in any of the
pending or anticipated cases, be found by a jury or court to bar recovery by a
plaintiff. Application of valid defenses, including those of preemption, are
likely to be the subject of further legal proceedings in the class action cases
and in the actions brought by states or state agencies.
Smoking and health related litigation has been brought by plaintiffs against
Lorillard and other manufacturers of tobacco products for many years. While
Lorillard intends to defend vigorously all such actions which may be brought
against it, it is not possible to predict the outcome of any of this litigation.
Litigation is subject to many uncertainties, and it is possible that some of
these actions could be decided unfavorably. An unfavorable outcome of a pending
smoking and health case could encourage the commencement of additional similar
litigation.
Management is unable to make a meaningful estimate of the amount or range of
loss that could result from an unfavorable outcome of pending litigation. It is
possible that the Company's results of operations or cash flows in a particular
quarterly or annual period or its financial position could be materially
affected by an ultimate unfavorable outcome of certain pending litigation.
Management believes, however, that the ultimate outcome of pending litigation
should not have a material adverse effect on the Company's financial position.
Other Litigation-The Company and its subsidiaries are also parties to other
litigation arising in the ordinary course of business. The outcome of this other
litigation will not, in the opinion of management, materially affect the
Company's results of operations or equity.
71
19. Business Segment Data-
The Company's subsidiaries are engaged primarily in insurance (property,
casualty and life), the production and sale of cigarettes, the operation of
hotels and oil and gas drilling rigs, and the distribution and sale of watches
and other timing devices. The following table sets forth the major sources of
the Company's consolidated revenues, income and assets.
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------
1994 1993 1992
---------------------------------------
(In thousands)
<S> <C> <C> <C>
Revenues (a):
Property and casualty insurance ............................ $ 8,088,580 $ 8,159,851 $ 7,948,867
Life insurance (b) ......................................... 2,903,836 2,823,314 2,816,471
Cigarettes ................................................. 1,915,577 1,908,903 2,185,448
Hotels (c) ................................................. 217,432 185,268 201,436
Watches and other timing devices ........................... 151,452 153,543 181,388
Drilling ................................................... 303,748 288,251 217,713
Investment income-net (d) .................................. (90,105) 120,000 117,189
Equity in income of CBS Inc. ............................... 45,837 58,990 27,012
Other and eliminations-net ................................. (21,156) (11,343) (4,070)
---------------------------------------
$13,515,201 $13,686,777 $13,691,454
=======================================
Income contribution (a)(e):
Property and casualty insurance ............................ $ (107,665) $ (33,136) $(1,495,498)
Life insurance ............................................. 93,238 177,392 159,600
Cigarettes ................................................. 583,952 592,368 914,973
Hotels (c) ................................................. 48,932 14,216 19,127
Watches and other timing devices ........................... 4,087 6,274 12,470
Drilling ................................................... (14,223) 4,866 (48,911)
Investment income-net (d) .................................. (93,529) 116,062 116,076
Equity in income of CBS Inc. ............................... 45,837 58,990 27,012
Other ...................................................... (15,693) (17,207) (7,279)
---------------------------------------
$ 544,936 $ 919,825 $ (302,430)
=======================================
Net income (a):
Property and casualty insurance ............................ $ 38,991 $ 145,757 $ (623,243)
Life insurance ............................................. 30,588 94,288 85,227
Cigarettes ................................................. 347,865 340,689 524,546
Hotels (c) ................................................. 17,018 (1,785) 1,911
Watches and other timing devices ........................... 807 2,413 4,366
Drilling ................................................... (35,948) (16,576) (51,174)
Investment income-net (d) .................................. (60,971) 71,476 75,858
Equity in income of CBS Inc. ............................... 30,801 52,641 24,717
Interest expense and other-net (f) ......................... (101,317) (94,782) (64,305)
Cumulative effect of accounting changes-net ................ 144,711
---------------------------------------
$ 267,834 $ 594,121 $ 122,614
=======================================
Identifiable assets:
Property and casualty insurance ............................ $31,915,864 $29,630,328 $27,247,756
Life insurance ............................................. 12,350,337 12,225,641 12,355,269
Cigarettes ................................................. 542,239 547,063 623,936
Hotels ..................................................... 182,778 199,288 205,900
Watches and other timing devices ........................... 164,835 158,609 166,482
Drilling ................................................... 527,351 550,622 538,792
Investment income .......................................... 4,234,073 1,966,655 1,917,614
Investment in CBS Inc. ..................................... 294,346 473,483 358,500
Other ...................................................... 60,649 56,046 96,013
Corporate .................................................. 63,504 42,017 45,252
---------------------------------------
$50,335,976 $45,849,752 $43,555,514
=======================================
</TABLE>
72
(a) Realized investment (losses) gains included in Revenues, Income contribution
and Net income are as follows:
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------
1994 1993 1992
-------------------------------------
<S> <C> <C> <C>
Revenues:
Property and casualty insurance ............................. $(164,131) $674,452 $262,658
Life insurance .............................................. (80,942) 125,813 95,433
Investment income-net ....................................... (201,907) 62,532 49,156
-------------------------------------
$(446,980) $862,797 $407,247
=====================================
Income contribution:
Property and casualty insurance ............................. $(164,131) $674,452 $262,658
Life insurance .............................................. (70,065) 112,671 83,293
Investment income-net ....................................... (201,907) 62,532 49,156
-------------------------------------
$(436,103) $849,655 $395,107
=====================================
Net income:
Property and casualty insurance ............................. $ (86,547) $362,917 $146,466
Life insurance .............................................. (37,808) 60,256 44,592
Investment income-net ....................................... (131,337) 38,728 31,284
-------------------------------------
$(255,692) $461,901 $222,342
=====================================
</TABLE>
(b) Includes $1,800,000, $1,700,000 and $1,600,000 under contracts covering U.S.
government employees and their dependents for the respective periods.
(c) Includes pre-tax and after-tax gain on sale of two hotel leases amounting to
$30,250 and $15,400, respectively, for the year ended December 31, 1994.
(d) Consists of investment income of non-insurance operations. Investment income
of insurance operations is included in the Revenues, Income contribution and
Net income of the related insurance operations.
(e) Consists of income before minority interest, cumulative effect of changes in
accounting principles and allocation for financial reporting purposes of
interest expense, corporate expense and income taxes.
(f) Includes interest expense, net of tax benefits, of $87,073, $83,127 and
$71,499 for the respective periods.
20. Subsequent Event-Proposed Acquisition-
The Continental Corporation-In the fourth quarter of 1994, CNA reached an
agreement to purchase the outstanding shares of common stock of The Continental
Corporation ("CIC") through a cash merger for approximately $1.1 billion, or $20
a share. The acquisition will be accounted for as a purchase and, accordingly
CIC's results of operations will be included in CNA's consolidated results of
operations for the period subsequent to the date of acquisition, which is
expected in the second quarter of 1995. CNA and CIC are jointly seeking
regulatory approvals as quickly as possible. The transaction closing is subject
to the approvals of the CIC shareholders and state insurance regulators. Until
the acquisition is complete CIC will continue to operate independently.
CNA has reached an agreement in principle with a syndicate of banks to provide
initial financing through a revolving loan facility. The revolving loan facility
will have a maturity of 5 years without any prepayment restrictions. The loan
will allow CNA to consummate the merger expeditiously and facilitate a smooth
transition, while providing the needed flexibility to determine the ultimate
financing structure following the consummation of the transaction, which is
likely to include long-term debt financing or a combination of debt and equity
financing.
CIC, headquartered in New York, is the llth largest U.S. property and casualty
insurance company based on 1993 premium volume. The revenues and net loss of CIC
and subsidiaries for the year ended December 31, 1994 are approximately $5.1
billion and $602.9 million, respectively. Total assets are approximately $16.0
billion at December 31, 1994.
73
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
PART III
Information called for by Part III has been omitted as Registrant intends to
file with the Securities and Exchange Commission not later than 120 days after
the close of its fiscal year a definitive Proxy Statement pursuant to regulation
14A.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 1. Financial Statements:
The financial statements appear above under Item 8. The following additional
financial data should be read in conjunction with those financial statements.
Schedules not included with these additional financial data have been omitted
because they are not applicable or the required information is shown in the
consolidated financial statements or notes to consolidated financial statements.
<TABLE>
<CAPTION>
Page
2. Financial Statement Schedules: Number
------
<S> <C>
Independent Auditors' Report ......................................... L-1
Loews Corporation and Subsidiaries:
Schedule I-Condensed financial information of Registrant for the
years ended December 31, 1994, 1993 and 1992 ...................... L-2
Schedule II-Valuation and qualifying accounts for the years ended
December 31, 1994, 1993 and 1992 .................................. L-7
Schedule V-Supplemental information concerning property and casualty
insurance operations for the years ended December 31, 1994, 1993
and 1992 .......................................................... L-8
3. Exhibits:
<CAPTION>
Exhibit
Description Number
----------- -------
<S> <C>
(2) Plan of acquisition, reorganization, arrangement, liquidation
or succession
Merger Agreement, dated as of December 6, 1994, by and among
CNA Financial Corporation, Chicago Acquisition Corp. and The
Continental Corporation is incorporated herein by reference to
Exhibit 2 to CNA Financial Corporation's (Commission File Number
1-5823) Report on Form 8-K filed December 9, 1994 .............. 2.01
(3) Articles of Incorporation and By-Laws
Restated Certificate of Incorporation of the Registrant,
incorporated herein by reference to Exhibit 3 to Registrant's
Report on Form 10-Q for the quarter ended September 30, 1987 .... 3.01
By-Laws of the Registrant as amended through October 18, 1994 is
filed herewith .................................................. 3.02*
(4) Instruments Defining the Rights of Security Holders, Including
Indentures
The Registrant hereby agrees to furnish to the Commission upon
request copies of instruments with respect to long-term debt,
pursuant to Item 601(b)(4)(iii) of Regulation S-K.
74
<CAPTION>
Exhibit
Description Number
----------- -------
<S> <C>
(10) Material Contracts
Employment Agreement between Registrant and Laurence A. Tisch
dated March 1, 1971 as amended through October 22, 1992 is
incorporated herein by reference to Exhibit 10.01 to Registrant's
Reports on Form 10-K for the years ended December 31, 1981,
December 31, 1983, December 31, 1984, December 31, 1985, December
31, 1986, December 31, 1988, December 31, 1989 and December 31,
1992, and an amendment thereto dated October 18, 1994 is filed
herewith ........................................................ 10.01*
Employment Agreement dated as of March 1, 1988 between Registrant
and Preston R. Tisch as amended through October 22, 1992 is
incorporated herein by reference to Exhibit 10.05 to Registrant's
Report on Form 10-K for the years ended December 31, 1987,
December 31, 1989 and December 31, 1992, and an amendment thereto
dated October 18, 1994 is filed herewith ........................ 10.02*
Continuing Service Agreement between a subsidiary of Registrant
and Edward J. Noha, dated February 27, 1991 incorporated herein
by reference to Exhibit 10.04 to Registrant's Report on Form 10-K
for the year ended December 31, 1990 ............................ 10.03
Loews Corporation Benefits Equalization Plan dated January 10,
1994 as amended through December 31, 1993 is incorporated herein
by reference to Exhibit 10.04 to Registrant's Report on Form 10-K
for the year ended December 31, 1993 ............................ 10.04
Loews Corporation Deferred Compensation Plan is incorporated
herein by reference to Exhibit 10.07 to Registrant's Report on
Form 10-K for the year ended December 31, 1988 .................. 10.05
Agreement between Fibreboard Corporation and Continental Casualty
Company, dated April 9, 1993 is incorporated herein by reference
to Exhibit A to Registrant's Report on Form 8-K filed April 12,
1993 ............................................................ 10.06
Settlement Agreement entered into on October 12, 1993 by and
among Fibreboard Corporation, Continental Casualty Company, CNA
Casualty Company of California, Columbia Casualty Company and
Pacific Indemnity Company is incorporated herein by reference to
Exhibit 99.1 to Registrant's Report on Form 10-Q for the quarter
ended September 30, 1993 ........................................ 10.07
Continental-Pacific Agreement entered into on October 12, 1993
between Continental Casualty Company and Pacific Indemnity
Company is incorporated herein by reference to Exhibit 99.2 to
Registrant's Report on Form 10-Q for the quarter ended September
30, 1993 ........................................................ 10.08
Global Settlement Agreement among Fibreboard Corporation,
Continental Casualty Company, CNA Casualty Company of California,
Columbia Casualty Company, Pacific Indemnity Company and the
Settlement Class dated December 23, 1993 is incorporated herein
by reference to Exhibit 10.09 to Registrant's Report on Form 10-K
for the year ended December 31, 1993 ............................ 10.09
Glossary of Terms in Global Settlement Agreement, Trust
Agreement, Trust Distribution Process and Defendant Class
Settlement Agreement dated December 23, 1993 is incorporated
herein by reference to Exhibit 10.10 to Registrant's Report on
Form 10-K for the year ended December 31, 1993 .................. 10.10
75
<CAPTION>
Exhibit
Description Number
----------- -------
<S> <C>
Fibreboard Asbestos Corporation Trust Agreement dated December
23, 1993 is incorporated herein by reference to Exhibit 10.11 to
Registrant's Report on Form 10-K for the year ended December 31,
1993 ............................................................ 10.11
Trust Distribution Process - Annex A to the Trust Agreement dated
December 23, 1993 is incorporated herein by reference to Exhibit
10.12 to Registrant's Report on Form 10-K for the year ended
December 31, 1993 ............................................... 10.12
Defendant Class Settlement Agreement dated December 23, 1993 is
incorporated herein by reference to Exhibit 10.13 to Registrant's
Report on Form 10-K for the year ended December 31, 1993 ........ 10.13
Escrow Agreement among Continental Casualty Company, Pacific
Indemnity Company and the First National Bank of Chicago dated
December 23, 1993 is incorporated herein by reference to Exhibit
10.14 to Registrant's Report on Form 10-K for the year ended
December 31, 1993 ............................................... 10.14
(11) Statement Re Computation of Per Share Earnings
Computation of earnings per share assuming full dilution for the
year ended December 31, 1992 .................................... 11.01*
(21) Subsidiaries of the Registrant
List of subsidiaries of Registrant .............................. 21.01*
(23) Consents of Experts and Counsel
Consent of Deloitte & Touche LLP ................................ 23.01*
(27) Financial Data Schedule ......................................... 27.01*
(28) Information from Reports furnished to State Insurance Regulatory
Authorities
Reconciliation of Property and Casualty Reserves as shown on
Schedule P to Reserves for Unpaid Claim and Claim Expense as
shown in the Form 10-K for the year ended December 31, 1994 ..... 28.01*
Schedule P of Annual Statements to state regulatory authorities
by property and casualty insurance subsidiaries for the year
ended December 31, 1994 ......................................... 28.02*
</TABLE>
* Filed herewith
(b) Reports on Form 8-K:
In a report on Form 8-K dated December 7, 1994, the Company reported that CNA
issued a press release which stated that CNA and The Continental Corporation
("Continental") signed an agreement under which CNA will acquire Continental
through a cash merger for $1.1 billion.
76
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
LOEWS CORPORATION
Dated: March 27, 1995 By Roy E. Posner
--------------------------------
(Roy E. Posner, Senior Vice
President and Chief Financial
Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Dated: March 27, 1995 By Laurence A. Tisch
--------------------------------
(Laurence A. Tisch, Co-Chairman
of the Board and Principal
Executive Officer)
Dated: March 27, 1995 By Roy E. Posner
--------------------------------
(Roy E. Posner, Senior Vice
President and Chief Financial
Officer)
Dated: March 27, 1995 By Guy A. Kwan
--------------------------------
(Guy A. Kwan, Controller)
Dated: March 27, 1995 By Charles B. Benenson
--------------------------------
(Charles B. Benenson, Director)
Dated: March 27, 1995 By John Brademas
--------------------------------
(John Brademas, Director)
By
--------------------------------
(Bernard Myerson, Director)
77
Dated: March 27, 1995 By Edward J. Noha
--------------------------------
(Edward J. Noha, Director)
Dated: March 27, 1995 By Lester Pollack
--------------------------------
(Lester Pollack, Director)
Dated: March 27, 1995 By Gloria R. Scott
--------------------------------
(Gloria R. Scott, Director)
Dated: March 27, 1995 By Andrew H. Tisch
--------------------------------
(Andrew H. Tisch, Director)
Dated: March 27, 1995 By James S. Tisch
--------------------------------
(James S. Tisch, Director)
Dated: March 27, 1995 By Jonathan M. Tisch
--------------------------------
(Jonathan M. Tisch, Director)
Dated: March 27, 1995 By Preston R. Tisch
--------------------------------
(Preston R. Tisch, Director)
78
INDEPENDENT AUDITORS' REPORT
The Board of Directors and
Shareholders of Loews Corporation:
We have audited the accompanying consolidated balance sheets of Loews
Corporation and its subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of income, shareholders' equity, and cash flows
for each of the three years in the period ended December 31, 1994. Our audits
also included the financial statement schedules listed in the Index at Item
14(a)2. These financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statements and financial statement schedules 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, such consolidated financial statements present fairly, in all
material respects, the financial position of Loews Corporation and its
subsidiaries at December 31, 1994 and 1993 and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1994 in conformity with generally accepted accounting principles. Also, in
our opinion, such financial statement schedules, when considered in relation to
the basic consolidated financial statements taken as a whole, present fairly in
all material respects the information set forth therein.
As discussed in Note 1 to the consolidated financial statements, the Company
changed its methods of accounting for reinsurance and certain investments in
debt and equity securities in 1993 and its methods of accounting for
postretirement benefits, income taxes and certain workers' compensation and
disability claims in 1992.
Deloitte & Touche LLP
New York, New York
February 15, 1995
L-1
SCHEDULE I
Condensed Financial Information of Registrant
LOEWS CORPORATION
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 31,
--------------------------
1994 1993
--------------------------
(In thousands)
<S> <C> <C>
Current assets, principally investment in U.S.
government securities (c) ........................ $3,059,610 $ 956,170
Investments in securities ......................... 707,711 782,228
Investments in capital stocks of subsidiaries, at
equity ........................................... 4,888,546 5,356,871
Advances to subsidiaries .......................... 329,378 415,114
Other assets ...................................... 24,763 20,954
------------------------
Total assets ................................. $9,010,008 $7,531,337
========================
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Accounts payable and accrued liabilities .......... $ 280,830 $ 169,178
Securities sold under agreements to repurchase .... 2,092,929
Long-term debt, less current maturities (b) ....... 1,169,761 1,183,792
Deferred income tax ............................... 61,174 51,169
------------------------
Total liabilities ............................ 3,604,694 1,404,139
Shareholders' equity (a) .......................... 5,405,314 6,127,198
------------------------
Total liabilities and shareholders' equity ... $9,010,008 $7,531,337
========================
</TABLE>
L-2
SCHEDULE I
(Continued)
Condensed Financial Information of Registrant
LOEWS CORPORATION
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------
1994 1993 1992
-------------------------------------
(In thousands)
<S> <C> <C> <C>
Revenues:
Equity in income (loss) of
subsidiaries (d) .................... $ 369,348 $585,039 $(63,448)
Realized investment (losses) gains ... (199,047) 46,184 39,377
Interest and other ................... 122,485 75,341 95,009
-------------------------------------
Total ............................. 292,786 706,564 70,938
-------------------------------------
Expenses:
Administrative ....................... 7,563 6,163 6,990
Interest ............................. 95,502 114,433 101,129
-------------------------------------
Total ............................. 103,065 120,596 108,119
-------------------------------------
189,721 585,968 (37,181)
-------------------------------------
Income tax (benefit) expense (c):
Federal .............................. (79,206) (13,853) (16,464)
State ................................ 1,093 5,700 1,380
-------------------------------------
Total ............................. (78,113) (8,153) (15,084)
-------------------------------------
Income (loss) before cumulative effect
of accounting changes ................. 267,834 594,121 (22,097)
Cumulative effect of accounting changes 144,711
-------------------------------------
Net income ............................. $ 267,834 $594,121 $122,614
=====================================
</TABLE>
L-3
SCHEDULE I
(Continued)
Condensed Financial Information of Registrant
LOEWS CORPORATION
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------
1994 1993 1992
---------------------------------------
(In thousands)
<S> <C> <C> <C>
Operating Activities:
Net income ........................... $ 267,834 $ 594,121 $ 122,614
Adjustments to reconcile net income to
net cash provided by operating
activities:
Cumulative effect of accounting
changes ........................... (144,711)
Undistributed (earnings) losses of
affiliates ........................ (104,051) (79,300) 617,040
Realized investment losses (gains) . 199,047 (46,184) (39,377)
Changes in assets and liabilities-net:
Receivables ........................ (117,091) (71,829) 3,624
Accounts payable and accrued
liabilities ....................... 117,257 38,015 3,744
Federal income taxes ............... (54,701) 204,386 (382,949)
Other-net .......................... 1,182 (14,743) 46,799
--------------------------------------
309,477 624,466 226,784
--------------------------------------
Investing Activities:
Purchases of securities .............. (424,670) (263,476) (142,292)
Proceeds from sales of securities .... 476,118 262,918 124,032
Investments in and advances to
subsidiaries-net .................... (42,767) (399,878) (72,748)
Net (increase) decrease in U.S.
government securities ............... (2,060,871) (201,086) 440,345
Securities sold under agreements to
repurchase .......................... 2,092,929 (100,125) 100,125
Change in other investments .......... (24,201) 39,082 98,444
--------------------------------------
16,538 (662,565) 547,906
--------------------------------------
Financing Activities:
Dividends paid to shareholders ....... (60,240) (64,289) (65,810)
Purchases of treasury shares ......... (225,074) (336,297) (238,223)
Principal payments on long-term debt . (15,741) (739,893) (17,207)
Issuance of long-term debt ........... 681,250
--------------------------------------
(301,055) (459,229) (321,240)
--------------------------------------
Net change in cash and cash equivalents 24,960 (497,328) 453,450
Cash and cash equivalents, beginning
of year ............................... 11,140 508,468 55,018
--------------------------------------
Cash and cash equivalents, end of year . $ 36,100 $ 11,140 $ 508,468
======================================
</TABLE>
L-4
SCHEDULE I
(Continued)
Condensed Financial Information of Registrant
--------------
Notes:
(a) In addition to its common stock, the Company has authorized 25,000,000
shares of preferred stock, $.10 par value.
(b) Long-term debt consisted of:
<TABLE>
<CAPTION>
December 31,
--------------------------
1994 1993
--------------------------
(In thousands)
<S> <C> <C>
8.5% notes due 1998 (effective interest rate
of 8.6%) (authorized, $125,000) ............ $ 117,832 $ 117,832
8.3% debentures due 2007 (effective interest
rate of 8.4%) (authorized, $200,000) (1) ... 200,000 200,000
8.9% debentures due 2011 (effective interest
rate of 9.0%) (authorized, $175,000) ....... 175,000 175,000
7.6% notes due 2023 (effective interest rate
of 7.8%) (authorized, $300,000) (2) ........ 300,000 300,000
7% notes due 2023 (effective interest rate of
7.2%) (authorized, $400,000) (3) ........... 400,000 400,000
Note payable due 2002 ....................... 15,741
-------------------------
1,192,832 1,208,573
Less: unamortized discount .................. 23,071 23,529
current maturities .................... 1,252
-------------------------
$1,169,761 $1,183,792
=========================
(1) Redeemable in whole or in part at January 15, 1997 at 104%, and
decreasing percentages thereafter.
(2) Redeemable in whole or in part at June 1, 2003 at 104%, and decreasing
percentages thereafter.
(3) Redeemable in whole or in part at October 15, 2003 at 102%, and
decreasing percentages thereafter.
</TABLE>
The aggregate of long-term debt maturing in the year ending December 31,
1998 is approximately $117,832,000.
L-5
(c) The Company is included in a consolidated federal income tax return with
certain of its subsidiaries and, accordingly, participates in the allocation of
certain components of the consolidated provision for federal income taxes. Such
taxes are generally allocated on a separate return bases.
The Company has entered into separate tax allocation agreements with Bulova
and CNA, majority-owned subsidiaries in which its ownership exceeds 80% (the
"Subsidiaries"). Each agreement provides that the Company will (i) pay to the
Subsidiary the amount, if any, by which the Company's consolidated federal
income tax is reduced by virtue of inclusion of the Subsidiary in the Company's
return, or (ii) be paid by the Subsidiary an amount, if any, equal to the
federal income tax which would have been payable by the Subsidiary if it had
filed a separate consolidated return. Under these agreements, the federal income
tax benefit (expense) to CNA amounted to approximately $84,000,000, $17,000,000
and $350,000,000 for the years ended December 31, 1994, 1993 and 1992,
respectively, and the federal income tax benefit (expense) to Bulova amounted to
approximately $74,000, $2,500,000 and $(3,300,000) for the years ended December
31, 1994, 1993 and 1992, respectively. Each agreement may be cancelled by either
of the parties upon thirty days' written notice. See Note 11 of the Notes to
Consolidated Financial Statements of Loews Corporation and subsidiaries.
(d) Cash dividends paid to the Company by affiliates amounted to $265,297,000,
$505,739,000 and $553,592,000 for the years ended December 31, 1994, 1993 and
1992, respectively.
L-6
SCHEDULE II
LOEWS CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
-------- -------- -------------------- -------- --------
Additions
--------------------
Balance at Charge to Charged to Balance at
Beginning Costs and Other End of
Description of Period Expenses Accounts Deductions Period
--------------------------------------------------------------------------------
(In thousands)
For the Year Ended December 31, 1994
<S> <C> <C> <C> <C>
Deducted from assets:
Allowance for
discounts ......... $ 2,537 $ 71,889 $72,454(1) $ 1,972
Allowance for
doubtful accounts 127,205 20,685 9,857 138,033
------------------------------------------------------
Total .......... $129,742 $ 92,574 $82,311 $140,005
======================================================
<CAPTION>
For the Year Ended December 31, 1993
<S> <C> <C> <C> <C>
Deducted from assets:
Allowance for
discounts ......... $ 5,277 $ 69,754 $72,494(1) $ 2,537
Allowance for
doubtful accounts 126,003 11,137 9,935 127,205
------------------------------------------------------
Total .......... $131,280 $ 80,891 $82,429 $129,742
======================================================
<CAPTION>
For the Year Ended December 31, 1992
<S> <C> <C> <C> <C>
Deducted from assets:
Allowance for
discounts ......... $ 5,124 $ 75,546 $75,393(1) $ 5,277
Allowance for
doubtful accounts 112,880 33,179 20,056 126,003
------------------------------------------------------
Total .......... $118,004 $108,725 $95,449 $131,280
======================================================
-----------
Notes:
(1) Discounts allowed.
</TABLE>
L-7
SCHEDULE V
LOEWS CORPORATION AND SUBSIDIARIES
Supplemental Information Concerning Property/Casualty Insurance Operations
<TABLE>
<CAPTION>
Consolidated Property/Casualty Entities
----------------------------------------
Years Ended December 31,
----------------------------------------
1994 1993 1992
----------------------------------------
(In thousands)
<S> <C> <C> <C>
Deferred policy acquisition costs .... $ 592,300 $ 562,000 $ 507,500
Reserves for unpaid claim and claim
expense ............................. 21,638,600 20,812,000 20,033,600
Discount, if any, deducted above
(based on interest rates ranging from
3.5% to 7.5%) ....................... 1,951,300 1,886,500 1,787,300
Unearned premiums .................... 2,690,700 2,556,000 2,425,100
Earned premiums ...................... 6,838,500 6,275,000 6,353,600
Net investment income ................ 1,240,400 1,059,800 1,224,100
Claim and claim expense related to
current year ........................ 5,610,800 5,387,900 5,708,200
Claim and claim expense related to
prior years ......................... (71,200) 590,000 1,617,400
Amortization of deferred policy
acquisition costs ................... 1,328,800 1,172,400 1,032,600
Paid claim and claim expenses ........ 5,026,600 4,916,900 4,676,600
Premiums written ..................... 6,964,700 6,382,300 6,286,200
</TABLE>
L-8
Exhibit 3.02
AS AMENDED THROUGH
OCTOBER 18, 1994
------------------
==================================================================
LOEWS CORPORATION
-----------
By-Laws
-----------
==================================================================
BY-LAWS
OF
LOEWS CORPORATION
(A Delaware Corporation)
----------------
ARTICLE 1
Definitions
As used in these By-laws, unless the context otherwise requires, the term:
1.1 "Assistant Secretary" means an Assistant Secretary of the Corporation.
1.2 "Assistant Treasurer" means an Assistant Treasurer of the Corporation.
1.3 "Board" means the Board of Directors of the Corporation.
1.4 "By-laws" means the initial by-laws of the Corporation, as
amended from time to time.
1.5 "Certificate of Incorporation" means the initial certificate of
incorporation of the Corporation, as amended, supplemented or restated from
time to time.
1.6 "Corporation" means Loews Corporation.
1.7 "Directors" means directors of the Corporation.
1.8 "General Corporation Law" means the General Corporation Law of the
State of Delaware, as amended from time to time.
1.9 "Office of the Corporation" means the executive office of the
Corporation, anything in Section 131 of the General Corporation Law to the
contrary notwithstanding.
1.10 "Chairman of the Board" means the Chairman of the Board of Directors
of the Corporation.
1.11 "President" means the President of the Corporation.
1.12 "Secretary" means the Secretary of the Corporation.
1.13 "Stockholders" means stockholders of the Corporation.
1.14 "Treasurer" means the Treasurer of the Corporation.
1.15 "Vice President" means a Vice President of the Corporation.
2
ARTICLE 2
STOCKHOLDERS
2.1 Place of Meetings. Every meeting of the stockholders shall be held at
the office of the Corporation or at such other place within or without the
State of Delaware as shall be specified or fixed in the notice of such
meeting or in the waiver of notice thereof.
2.2 Annual Meeting. A meeting of stockholders shall be held annually for
the election of directors and the transaction of other business at such hour
as may be designated in the notice of meeting, on the second Tuesday in May
in each year (or, if such date falls on a legal holiday, on the first
business day thereafter which is not a Saturday, Sunday or legal holiday),
or on such other date not later than six months after the end of the fiscal
year of the Corporation, as may be fixed by the Board.
2.3 Special Meetings. A special meeting of stockholders, unless otherwise
prescribed by statute, may be called at any time by the Board or by the
Chairman of the Board and Chief Executive Officer, the President or by the
Secretary and shall be called by the Chairman of the Board and Chief
Executive Officer, the President or by the Secretary on the written request
of holders of a majority or more of the shares of capital stock of the
Corporation entitled to vote in an election of directors, which written
request shall state the purpose or purposes of such meeting. At any special
meeting of stockholders only such business may be transacted which is
related to the purpose or purposes of such meeting set forth in the notice
thereof given pursuant to Section 2.5 of the By-laws or in any waiver of
notice thereof given pursuant to Section 2.4 of the By-laws.
2.4 Fixing Record Date. For the purpose of determining the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or for the purpose of determining stock-
3
holders entitled to receive payment of any dividend or the allotment of any
rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful
action, the Board may fix, in advance, a date as the record date for any
such determination of stockholders. Such date shall not be more than sixty
nor less than ten days before the date of such meeting, nor more than sixty
days prior to any other action. If no such record date is fixed:
2.4.1 The record date for determining stockholders entitled to notice of
or to vote at a meeting of stockholders shall be at the close of business on
the day next preceding the day on which notice is given, or, if notice is
waived, at the close of business on the day next preceding the day on which
the meeting is held;
2.4.2 The record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no prior
action by the Board is necessary, shall be the day on which the first
written consent is expressed;
2.4.3 The record date for determining stockholders for any purpose other
than specified in Sections 2.4.1 and 2.4.2 shall be at the close of business
on the day on which the Board adopts the resolution relating thereto.
When a determination of stockholders entitled to notice of or to vote at any
meeting of stockholders has been made as provided in this Section 2.4 such
determination shall apply to any adjournment thereof, unless the Board fixes
a new record date for the adjourned meeting.
2.5 Notice of Meetings of Stockholders. Except as otherwise provided in
Sections, 2.3 and 2.4 of the By-laws, whenever under the General Corporation
Law or the Certificate of Incorporation or the By-laws, stockholders are
required or permitted to take any action at a meeting, written notice shall
be given stating the place, date and hour of the meeting and, in the case of
a special meeting, the purpose or purposes for which the meeting is called.
A copy of the notice of any meeting shall be given, personally or by mail
not less than ten nor more than fifty days before the date of the meeting,
to each stockholder entitled to notice of or to vote at such meeting. If
mailed, such notice shall be
4
deemed to be given when deposited in the United States mail, with postage
prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation. An affidavit of the Secretary or an Assistant
Secretary or of the transfer agent of the Corporation that the notice
required by this section has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. When a meeting is
adjourned to another time or place, notice need not be given of the
adjourned meeting if the time and place thereof are announced at the meeting
at which the adjournment is taken, and at the adjourned meeting any business
may be transacted that might have been transacted at the meeting as
originally called. If, however, the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
2.6 List of Stockholders. The Secretary shall prepare and make, or cause
to be prepared and made, at least ten days before every meeting ,of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for
a period of at least ten days prior to the meeting, either at a place within
the city where the meeting is to be held, which place shall be specified in
the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof, and may be inspected
by any stockholder who is present.
2.7 Quorum of Stockholders; Adjournment. The holders of a majority of the
shares of stock entitled to vote at any meeting of stockholders, present in
person or represented by proxy, shall constitute a quorum for the
transaction of any business at such meeting. When a quorum is once present
to organize a meeting of stockholders, it is not broken by the subsequent
withdrawal of any stockholders. The holders of a majority of the shares of
stock present in person or represented by proxy at any meeting of
stockholders, including an adjourned meeting, whether or not a quorum is
present, may adjourn such meeting to another time and place.
5
2.8 Voting; Proxies. Unless otherwise provided in the Certificate of
Incorporation every stockholder of record shall be entitled at every meeting
of stockholders to one vote for each share of capital stock standing in his
name on the record of stockholders determined in accordance with Section 2.4
of the By-laws. If the Certificate of Incorporation provides for more or
less than one vote for any share, on any matter, every, reference in the By-
laws or the General Corporation Law to a majority or other proportion of
stock shall refer to such majority or other proportion of the votes of such
stock. The provisions of Sections 212 and 217 of the General Corporation Law
shall apply in determining whether any shares of capital stock may be voted
and the persons, if any, entitled to vote such shares; but the Corporation
shall be protected in treating the persons in whose names shares of capital
stock stand on the record of stockholders as owners thereof for all
purposes. At any meeting of stockholders, a quorum being present, all
matters, except as otherwise provided by law or by the Certificate of
Incorporation or by the By-laws, shall be decided by a majority of the votes
cast at such meeting by the holders of shares present in person or
represented by proxy and entitled to vote thereon. All elections of
directors shall be by written ballot unless otherwise provided in the
Certificate of Incorporation. In voting on any other question on which a
vote by ballot is required by law or is demanded by any stockholder entitled
to vote, the voting shall be by ballot. Each ballot shall be signed by the
stockholder voting or by his proxy, and shall state the number of shares
voted. On all other questions, the voting may be viva voce. Every
stockholder entitled to vote at a meeting of stockholders or to express
consent or dissent without a meeting may authorize another person or persons
to act for him by proxy. The validity and enforceability of any proxy shall
be determined in accordance with Section 212 of the General Corporation Law.
2.9 Selection and Duties of Inspectors at Meetings of Stockholders. The
Board, in advance of any meeting of stockholders, may appoint one or more
inspectors to act at the meeting or any adjournment thereof. If inspectors
are not so appointed, the person presiding at such meeting may, and on the
request of any stockholder entitled to vote thereat shall, appoint one or
more inspectors. In case any person appointed fails to appear or act, the
vacancy may be filled by appointment made by the Board in advance of the
meeting or at the meeting by the person presiding thereat. Each inspector,
before entering upon
6
the discharge of his duties, shall take and sign an oath faithfully to
execute the duties of inspector at such meeting with strict impartiality and
according to the best of his ability. The inspector or inspectors shall
determine the number of shares outstanding and the voting power of each, the
shares represented at the meeting, the existence of a quorum, the validity
and effect of proxies, and shall receive votes, ballots or consents, hear
and determine all challenges and questions arising in connection with the
right to vote, count and tabulate all votes, ballots or consents, determine
the result, and do such acts as are proper to conduct the election or vote
with fairness to all stockholders. On request of the person presiding at the
meeting or any stockholder entitled to vote thereat, the inspector or
inspectors shall make a report in writing of any challenge, question or
matter determined by him or them and execute a certificate of any fact found
by him or them. Any report or certificate made by the inspector or
inspectors shall be prima facie evidence of the facts stated and of the vote
as certified by him or them.
2.10 Organization. At every meeting of stockholders, the Chairman of the
Board and Chief Executive Officer, or in his absence the President, or in
the absence of both of them the Vice Chairman of the Board, or in the
absence of all of them the Senior Vice President, or in the absence of all
of them the Executive Vice President or in the absence of all of them the
most senior Vice President (based on term of service as Vice President)
present, shall act as chairman of the meeting. The Secretary, or in his
absence one of the Assistant Secretaries, shall act as secretary of the
meeting. In case none of the officers above designated to act as chairman or
secretary of the meeting, respectively, shall be present a chairman or a
secretary of the meeting, as the case may be, shall be chosen by a majority
of the votes cast at such meeting by the holders of shares of capital stock
present in person or represented by proxy and entitled to vote at the
meeting.
2.11 Order of Business. The order of business at all meetings of
stockholders shall be as determined by the chairman of the meeting, but the
order of business to be followed at any meeting at which a quorum is present
may be changed by a majority of the votes cast at such meeting by the
holders of shares of capital stock present in person or represented by proxy
and entitled to vote at the meeting.
7
ARTICLE 3
Directors
3.1 General Powers. Except as otherwise provided in the Certi-ficate of
Incorporation, the business and affairs of the Corporation shall be managed
by the Board. The Board may adopt such rules and regulations, not
inconsistent with the Certificate of Incorporation or the By-laws or
applicable laws, as it may deem proper for the conduct of its meetings and
the management of the Corporation. In addition to the powers expressly
conferred by the By-laws, the Board may exercise all powers and perform all
acts which are not required, by the By-laws or the Certificate of
Incorporation or by law, to be exercised and performed by the stockholders.
3.2 Number; Qualification; Term of Office. The Board shall consist of one
or more members. The number of directors shall be fixed initially by the
Board and may thereafter be changed from time to time by action of the
stockholders or of the Board. Directors need not be stockholders. Each
director shall hold office until his successor is elected and qualified or
until his earlier death, resignation or removal.
3.3 Election. Directors shall except as otherwise required by law or by
the Certificate of Incorporation, be elected by a plurality of the votes
cast at a meeting of stockholders by the holders of shares entitled to vote
in the election.
3.4 Newly Created Directorships and Vacancies. Unless otherwise provided
in the Certificate of Incorporation, newly created directorships resulting
from an increase in the number of directors and vacancies occurring in the
Board for any reason, including the removal of directors without cause, may
be filled by vote of a majority of the directors then in office, although
less than a quorum, at any meeting of the Board or may be elected by a
plurality of the votes cast by the holders of shares of capital stock
entitled to vote in the election at a special meeting of stockholders called
for that purpose. A director elected to fill a vacancy shall be elected to
hold office until his successor is elected and qualified, or until his
earlier death, resignation or removal.
8
3.5 Resignations. Any director may resign at any time by written notice to
the Corporation. Such resignation shall take effect at the time therein
specified, and, unless otherwise specified, the acceptance of such
resignation shall not be necessary to make it effective.
3.6 Removal of Directors. Any or all of the directors may be removed (i)
for cause, by vote of the stockholders or by action of the Board, and (ii)
without cause, by vote of the stockholders.
3.7 Remuneration. Unless otherwise expressly provided by resolution
adopted by the Board, none of the directors or of the members of any
committee of the Corporation contemplated by these By-laws or otherwise
provided for by resolution of the Board shall as such receive any stated
remuneration for his services; but the Board may at any time or from time to
time by resolution provide that remuneration shall be paid to, or on behalf
of, any director of the Corporation or to any member of any such committee
who shall not be in the employ of the Corporation or of any of its
subsidiary companies, either as his annual remuneration as such director or
member or as remuneration for his attendance at each meeting of the Board or
of such committee. The Board may also likewise provide that the Corporation
shall reimburse each such director or member of such committee for any
expenses paid by him on account of his attendance at any such meeting.
Nothing in this Section contained shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
remuneration therefor.
3.8 Place and Time of Meetings of the Board. Meetings of the Board,
regular or special, may be held at any place within or without the State of
Delaware. The times and places for holding meetings of the Board may be
fixed from time to time by resolution of the Board or (unless contrary to
resolution of the Board) in the notice of the meeting.
3.9 Annual Meetings. On the day when and at the place where the annual
meeting of stockholders for the election of directors is held, and as soon
as practicable thereafter, the Board may hold its annual meeting, without
notice of such meeting, for the purposes of organization the election of
officers and the transaction of other business. The annual meeting of the
Board may be held at any other time and place
9
specified in a notice given as provided in Section 3.11 of the By-laws for
special meetings of the Board or in a waiver of notice thereof.
3.10 Regular Meetings. Regular meetings of the Board may be held at such
times and places as may be fixed from time to time by the Board. Unless
otherwise required by the Board, regular meetings of the Board may be held
without notice. If any day fixed for a regular meeting of the Board shall be
a Saturday or Sunday or a legal holiday at the place where such meeting is
to be held, then such meeting shall be held at the same hour at the same
place on the first business day thereafter which is not a Saturday, Sunday
or legal holiday.
3.11 Special Meeting. Special meetings of the Board shall be held whenever
called by the Chairman of the Board, the President, the Vice Chairman of the
Board or the Secretary or by any two or more directors. Notice of each
special meeting of the Board shall, if mailed, be addressed to each director
at the address designated by him for that purpose or, if none is designated,
at his last known address at least two days before the date on which the
meeting is to be held; or such notice shall be sent to each director at such
address by telegraph, cable or wireless, or be delivered to him personally,
not later than the day before the date on which such meeting is to be held.
Every such notice shall state the time and place of the meeting but need not
state the purposes of the meeting, except to the extent required by law. If
mailed, each notice shall be deemed given when deposited, with postage
thereon prepaid, in a post office or official depository under the exclusive
care and custody of the United States Post Office Department. Such mailing
shall be by first-class mail.
3.12 Adjourned Meetings. A majority of the directors present at any
meeting of the Board, including an adjourned meeting, whether or not a
quorum is present may adjourn such meeting to another time and place. Notice
of any adjourned meeting of the Board need not be given to any director
whether or not present at the time of the adjournment. Any business may be
transacted at any adjourned meeting that might have been transacted at the
meeting as originally called.
3.13 Waiver of Notice. Whenever notice is required to be given to any
director or member of a committee of directors under any pro-
10
vision of the General Corporation Law or of the Certificate of Incorporation
or By-laws, a written waiver thereof, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting
for the express purpose of objecting, at the beginning of the meeting, to
the transaction of any business because the meeting is not lawfully called
or convened. Neither the business to be transacted at, nor the purpose of,
any regular or special meeting of the directors, or members of a committee
of directors, need be specified in any written waiver of notice.
3.14 Organization. At each meeting of the Board, the Chairman of the
Board, or in the absence of the Chairman of the Board, the President of the
Corporation, or in the absence of the Chairman of the Board and the
President, the Vice Chairman of the Board, or in the absence of all of them
a chairman chosen by the majority of the directors present, shall preside.
The Secretary shall act as secretary at each meeting of the Board. In case
the Secretary shall be absent from any meeting of the Board, an Assistant
Secretary shall perform the duties of secretary at such meeting; and in the
absence from any such meeting of the Secretary and Assistant Secretaries,
the person presiding at the meeting may appoint any person to act as
secretary of the meeting.
3.15 Quorum of Directors. A majority of the directors then in office shall
constitute a quorum for the transaction of business or of any specified item
of business at any meeting of the Board.
3.16 Action by the Board. All corporate action taken by the Board or any
committee thereof shall be taken at a meeting of the Board, or of such
committee, as the case may be, except that any action required or permitted
to be taken at any meeting of the Board, or of any committee thereof, may be
taken without a meeting if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board or committee. Members of
the Board, or any committee designated by the Board, may participate in a
meeting of the Board, or of such committee, as the case may be, by means of
conference telephone
11
or similar communications equipment by means of which all persons
participating in the meeting can hear each others and participation in a
meeting pursuant to this Section 3.16 shall constitute presence in person at
such meeting. Except as otherwise provided by the Certificate of
Incorporation or by law, the vote of a majority of the directors present
(including those who participate by means of conference telephone or similar
communications equipment) at the time of the vote, if a quorum is present at
such time, shall be the act of the Board.
ARTICLE 4
COMMITTEES OF THE BOARD
4.1 Executive Committee; Number, Appointment, Term of Office, etc. (a) The
Board, by resolution adopted by a majority of the whole Board, may designate
an Executive Committee consisting of the Chairman of the Board and Chief
Executive Officer and the President and such other directors as it may
designate. Each member of the Executive Committee shall continue to be a
member thereof only so long as he remains a director and at the pleasure of
a majority of the whole Board. Any vacancies on the Executive Committee may
be filled by the majority of the whole Board.
(b) The Executive Committee, between meetings of the Board, shall have
and may exercise the powers of the Board in the management of the property,
business and affairs of the Corporation and may authorize the seal of the
Corporation to be affixed to all papers which may require it. Without
limiting the foregoing, the Executive Committee shall have the express power
and authority to declare a dividend, to authorize the issuance of stock, and
to adopt a certificate of ownership and merger pursuant to Section 253 of
the General Corporation Law of the State of Delaware.
(c) At each meeting of the Executive Committee, one of the following
shall act as chairman of the meeting and preside thereat in the following
order of precedence:
(i) the Chairman of the Executive Committee, who shall be
appointed from among the members of the Executive Committee
by the Board;
(ii) the Vice Chairman of the Executive Committee, who
shall be appointed from among the members of the Executive
Committee by the Board;
12
(iii) the Chairman of the Board, if chief executive
officer (if he is not the Chairman or the Vice Chairman of
the Executive Committee);
(iv) the President (if he is not the Chairman or the Vice
Chairman of the Executive Committee);
(v) the Senior Vice President (if he is not the Chairman
or the Vice Chairman of the Executive Committee).
The Secretary, or if he shall be absent from such meeting, the person (who
shall be an Assistant Secretary, if an Assistant Secretary shall be present
thereat) whom the chairman of such meeting shall appoint, shall act as
secretary of such meeting and keep the minutes thereof.
(d) Regular meetings of the Executive Committee, of which no notice
shall be necessary, shall be held on such days and at such places, within or
without the State of Delaware, as shall be fixed by resolution adopted by a
majority of the Executive Committee. Special meetings of the Executive
Committee shall be held whenever called by the Chairman of the Board, if
Chief Executive Officer, the President, the Chairman of the Executive
Committee or by the Vice Chairman of the Executive Committee and shall be
called by the Secretary of the Corporation on the request of a majority of
the Executive Committee. Notice of each special meeting of the Executive
Committee shall be given to each member thereof by depositing such notice in
the United States mail, in a postage prepaid envelope, directed to him at
his residence or usual place of business at least two days before the day on
which such meeting is to be held or shall be sent addressed to him at such
place by telegraph, cable, wireless or other form of recorded communication
or be delivered personally or by telephone a reasonable time in advance of
the time at which such meeting is to be held. Notice of any such meeting
need not, however, be given to any member of the Executive Committee if he
shall be present at such meeting. Any meeting of the Executive Committee
shall be a legal meeting without any Notice thereof having been given if all
the members of the Executive Committee shall be present thereat. Such notice
shall specify the time and place of the meeting, but except as otherwise
expressly provided by law, the purposes thereof need not be stated in such
notice. Subject to the provisions of these By-laws, the Executive Committee
way fix its own rules of procedure, and it shall keep a record of its
proceed-
13
ings and report them to the Board at the next regular or special meeting
thereof after such proceedings shall have been taken. All such proceedings
shall be subject to revision or alteration by the Board; provided, however,
that third parties shall not be prejudiced by any such revision or
alteration.
(e) Except as otherwise provided by law, a majority of the Executive
Committee then in office shall constitute a quorum for the transaction of
business, and the act of a majority of those present at a meeting thereof
shall be the act of the Executive Committee. In the absence of a quorum, a
majority of the members of the Executive Committee present thereat may
adjourn such meeting from time to time until a quorum shall be present
thereat. Notice of any adjourned meeting need not be given. The Executive
Committee shall act only as a committee, and the individual members shall
have no power as such.
(f) Any, member of the Executive Committee may resign therefrom at any
time by giving written notice of his resignation to the Chairman of the
Board, the President or the Secretary. Any such resignation shall take
effect at the time specified therein or, if the time when it shall become
effective shall not be specified therein, it shall take effect immediately
upon its receipt; and, except as specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
(g) In addition to the foregoing, in the absence or disqualification of
a member of the Executive Committee, the members present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at
the meeting in the place of any such absent or disqualified member.
4.2 Other Committees of the Board. The Board, by resolution adopted by a
majority of the whole Board, may designate one or more other committees,
which shall in each case consist of such number of directors, but not less
than two, and shall have and may exercise such powers for such periods, as
the Board may determine in the resolution designating such committee. A
majority of the members of any such committee may fix its rules of
procedure, determine its action, fix the time and place, whether within or
without the State of Delaware, of its meetings and specify what notice
thereof, if any, shall be given, unless the Board shall by resolution
adopted by a majority of the whole Board otherwise provide. Each member of
any such committee shall continue to be a member thereof only so long as he
remains a director and at the pleasure of a majority of the whole Board. Any
vacancies on any such committee may be filled by a majority of the whole
Board.
14
4.3 Other Committees. Nothing hereinbefore contained in this Article 4
shall be deemed to preclude the designation by the Chairman of the Board, if
Chief Executive Officer, or the President, of committees, other than
committees of the Board, which may include officers and employees who are
not directors.
ARTICLE 5
OFFICERS
5.1 Officers. The Board shall elect a Chairman of the Board and Chief
Executive Officer, a President, a Vice Chairman of the Board, a Chairman of
the Executive Committee, a Secretary and a Treasurer, and as many Assistant
Secretaries and Assistant Treasurers as the Board may deem necessary, and
may elect or appoint one or more Vice Presidents and such other officers as
it may determine. The Board may designate one or more Vice Presidents as
Senior Vice President, Executive Vice President, and may use descriptive
words or phrases to designate the standing, seniority or area of special
competence of the Vice Presidents elected or appointed by it. Each officer
shall hold his office until his successor is elected and qualified or until
his earlier death, resignation or removal in the manner provided in Section
5.2 of the By-laws. Any two or more offices may be held by the same person.
The Board may require any officer to give a bond or other security for the
faithful performance of his duties, in such amount and with such sureties as
the Board may determine. All officers as between themselves and the
Corporation shall have such authority and perform such duties in the
management of the Corporation as may be provided in the By-laws or as the
Board may from time to time determine.
5.2 Removal of Officers. Any officer elected or appointed by the Board may
be removed by the Board with or without cause. The removal of an officer
without cause shall be without prejudice to his contract rights, if any. The
election or appointment of an officer shall not of itself create contract
rights.
5.3 Resignations. Any officer may resign at any time in writing by
notifying the Board, The Chairman of the Board and Chief Execu-
15
tive Officer, the President or the Secretary. Such resignation shall take
effect at the date of receipt of such notice or at such later time as is
therein specified, and, unless otherwise specified, the acceptance of such
resignation shall not be necessary to make it effective. The resignation of
an officer shall be without prejudice to the contract rights of the
Corporation, if any.
5.4 Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification or any other cause shall be filled for the
unexpired portion of the term in the manner prescribed in the By-laws for
the regular election or appointment to such office.
5.5 Compensation. Salaries or other compensation of the officers may be
fixed from time to time by the Board. No officer shall be prevented from
receiving a salary or other compensation by reason of the fact that he is
also a director.
5.6 Chairman of the Board and Chief Executive Officer. The Chairman of the
Board and Chief Executive Officer of the Corporation shall have general
supervision over the business of the Corporation, subject, however, to the
control of the Board and of any duly authorized committee of directors. The
Chairman of the Board and Chief Executive Officer shall, if present, preside
at all meetings of the stockholders and at all meetings of the Board. He
may, with the Secretary or the Treasurer or an Assistant Secretary or an
Assistant Treasurer, sign certificates for shares of capital stock of the
Corporation. He may sign and execute in the name of the Corporation deeds,
mortgages, bonds, contracts and other instruments, except in cases where the
signing and execution thereof shall be expressly delegated by the Board or
by the By-laws to some other officer or agent of the Corporation, or shall
be required by law otherwise to be signed or executed and, in general, he
shall perform all duties incident to the office of Chairman of the Board and
Chief Executive Officer and such other duties as from time to time may be
assigned to him by the Board. The Board may designate two persons to serve
as Co-Chairman of the Board and Co-Chief Executive Officer of the
Corporation in which case each reference in these By-Laws to the "Chairman
of the Board and Chief Executive Officer" shall mean the "Co-Chairmen of the
Board and Co-Chief Executive Officers". Where both individuals holding such
office are present, the individual with greater seniority shall exercise the
powers of the office, unless otherwise directed by the Board.
5.7 President. At the request of the Chairman of the Board and Chief
Executive Officer, or in his absence, at the request of the Board, the
President shall perform all of the duties of the Chairman of the Board and
Chief Executive Officer and so acting shall have all the
16
powers, of and be subject to all restrictions upon the Chairman of the Board
and Chief Executive Officer. The President may also, with the Secretary or
the Treasurer or an Assistant Secretary or an Assistant Treasurer, sign
certificates for shares of capital stock of the Corporation; may sign and
execute in the name of the Corporation deeds, mortgages, bonds, contracts or
other instruments authorized by the Board, except in cases where the signing
and execution thereof shall be expressly delegated by the Board or by the
By-laws to some other officer or agent of the Corporation, or shall be
required by law otherwise to be signed or executed; and shall perform such
other duties as from time to time may be assigned to him by the Board or by
the Chairman of the Board.
5.8 Vice Chairman of the Board. In the absence of both the Chairman of the
Board and Chief Executive Officer and the President, the Vice Chairman shall
preside at meetings of the Board; and he shall perform such other duties as
from time to time may be assigned to him by the Board, the Chairman of the
Board and Chief Executive Officer or the President.
5.9 Chairman of the Executive Committee. The Chairman of the Executive
Committee shall have the powers and duties incident to that office and shall
have other powers and duties as may be prescribed from time to time by the
Board of Directors. He shall be a member of the Executive Committee and
shall preside at all meetings of the Executive Committee. In the event of
the absence or disability of the Chairman of the Board and Chief Executive
Officer and of the President, he shall perform the duties of the Chairman of
the Board and Chief Executive Officer and of the President, unless the Board
of Directors shall have designated another person to perform such duties.
5.10 Vice Presidents. At the request of the Chairman of the Board and
Chief Executive Officer, or in his absence, at the request of the President,
or in the absence of both of them, at the request of the Board, the Vice
Presidents shall (in such order as may be designated by the Board or in the
absence of any such designation in order of seniority based on age) perform
all of the duties of the Chairman of the Board and Chief Executive Officer
and so acting shall have all the powers of and be subject to all
restrictions upon the Chairman of the
17
Board and Chief Executive Officer. Any Vice President may also, with the
Secretary or the Treasurer or an Assistant Secretary or an Assistant
Treasurer, sign certificates for shares of capital stock of the Corporation;
may sign and execute in the name of the Corporation deeds, mortgages, bonds,
contracts or other instruments authorized by the Board, except in cases
where the signing and execution thereof than be expressly delegated by the
Board or by the By-laws to some other officer or agent of the Corporation,
or shall be required by law otherwise to be signed or executed; and shall
perform such other duties as from time to time may be assigned to him by the
Board or by the Chairman of the Board and Chief Executive Officer or the
President.
5.11 Secretary. The Secretary, if present, shall act as secretary of all
meetings of the stockholders and of the Board, and shall keep the minutes
thereof in the proper book or books to be provided for that purpose; he
shall see that all notices required to be given by the Corporation are duly
given and served; he may, with the Chairman of the Board and Chief Executive
Officer, the President or a Vice President, sign certificates for shares of
capital stock of the Corporation; he shall be custodian of the seal of the
Corporation and may seal with the seal of the Corporation, or a facsimile
thereof, all certificates for shares of capital stock, of the Corporation
and all documents the execution of which on behalf of the Corporation under
its corporate seal is authorized in accordance with the provisions of the
By-laws; he shall have charge of the stock ledger and also of the other
books, records and papers of the Corporation relating to its organization
and management as a Corporation, and shall see that the reports, statements
and other documents required by law are properly kept and filed; and shall,
in general, perform all the duties incident to the office of Secretary and
such other duties as from time to time may be assigned to him by the Board
or by the Chairman of the Board and Chief Executive Officer or by the
President.
5.12 Treasurer. The Treasurer shall have charge and custody of, and be
responsible for, all funds, securities and notes of the Corporation; receive
and give receipts for moneys due and payable to the Corporation from any
sources whatsoever; deposit all such moneys in the name of the Corporation
in such banks, trust companies or other depositories as shall be selected in
accordance with these By-laws; against proper
18
vouchers, cause such funds to be disbursed by checks or drafts on the
authorized depositaries of the Corporation signed in such manner as shall be
determined in accordance with any provisions of the By-laws, and be
responsible for the accuracy of the amounts of all moneys so disbursed;
regularly enter or cause to be entered in books to be kept by him or under
his direction full and adequate amount of all moneys received or paid by him
for the amount of the Corporation; have the right to require, from time to
time reports or statements giving such information as he may desire with
respect to any and all financial transactions of the Corporation from the
officers or agents transacting the same; render to the Chairman of the Board
and Chief Executive Officer, the President or the Board, whenever the
Chairman of the Board and Chief Executive Officer, the President or the
Board, respectively, all require him so to do, an account of the financial
condition of the Corporation and of all his transactions as Treasurer;
exhibit at all reasonable times his books of account and other records to
any of the directors upon application at the office of the Corporation where
such books and records are kept; and in general, perform all the duties
incident to the office of Treasurer and such other duties as from time to
time may be assigned to him by the Board, the Chairman of the Board and
Chief Executive Officer or by the President; and he may sign, with the
Chairman of the Board and Chief Executive Officer, the President or a Vice
President, certificates for shares of capital stock of the Corporation.
5.13 Assistant Secretaries and Assistant Treasurers. Assistant Secretaries
and Assistant Treasurers shall perform such duties as shall be assigned to
them by the Secretary or by the Treasurer, respectively, or by the Board,
the Chairman of the Board and Chief Executive Officer, or the President.
Assistant Secretaries and Assistant Treasurers may, with the Chairman of the
Board and Chief Executive Officer, the President or a Vice President, sign
certificates for shares of capital stock of the Corporation.
ARTICLE 6
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
6.1 Execution of Contracts. The Board may authorize any officer, employee
or agent, in the name and on behalf of the Corporation, to
19
enter into any contracts or execute and satisfy any instrument, and any such
authority may be general or confined to specific instances, or otherwise
limited.
6.2 Loans. The Chairman of the Board and Chief Executive Officer, the
President or any other officer, employee or agent authorized by the By-laws
or by the Board may effect loans and advances at any time for the
Corporation from any bank, trust company or other institutions or from any
firm, corporation or individual and for such loan and advances may make,
execute and deliver promissory notes, bonds or other certificates or
evidences of indebtedness of the Corporation, and when authorized so to do
may pledge and hypothecate or transfer any securities or other property of
the Corporation as security for any such loans or advances. Such authority
conferred by the Board may be general or confined to specific instances or
otherwise limited.
6.3 Checks, Drafts, Etc. All checks, drafts and other orders for the
payment of money out of the funds of the Corporation and all notes or other
evidences of indebtedness of the Corporation shall be signed on behalf of
the Corporation in such manner as shall from time to time be determined by
resolution of the Board.
6.4 Deposits. The funds of the Corporation not otherwise employed shall be
deposited from time to time to the order of the Corporation in such banks,
trust companies or other depositories as the Board may select or as may be
selected by an officer, employee or agent of the Corporation to whom such
power may from time to time be delegated by the Board.
ARTICLE 7
STOCKS AND DIVIDENDS
7.1 Certificates Representing Shares. The shares of capital stock of the
Corporation shall be represented by certificates in such form (consistent
with the provisions of Section 158 of the General Corporation Law) as shall
be approved by the Board. Such certificates shall be signed by the Chairman
of the Board and Chief Executive Officer, the President or a Vice President
and by the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer, and may be
20
sealed with the seal of the Corporation or a facsimile thereof. The sig-
natures of the officers upon a certificate may be facsimiles, if the cer-
tificate is countersigned by a transfer agent or registrar other than the
Corporation itself or its employee. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon
any certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, such certificate may, unless
otherwise ordered by the Board, be issued by the Corporation with the same
effect as if such person were such officer, transfer agent or registrar at
the date of issue.
7.2 Transfer of Shares. Transfers of shares of capital stock of the
Corporation shall be made only on the books of the Corporation by the holder
thereof or by his duly authorized attorney appointed by a power of attorney
duly executed and filed with the Secretary or a transfer agent of the
Corporation, and on surrender of the certificate or certificates
representing such shares of capital stock properly endorsed for transfer and
upon payment of all necessary transfer taxes. Every certificate exchanged,
returned or surrendered to the Corporation shall be marked "Cancelled," with
the date of cancellation, by the Secretary or an Assistant Secretary or the
transfer agent of the Corporation. A person in whose name shares of capital
stock shall stand on the books of the Corporation shall be deemed the owner
thereof to receive dividends, to vote as such owner and for all other
purposes as respects the Corporation. No transfer of shares of capital stock
shall be valid as against the Corporation, its stockholders and creditors
for any purpose, except to render the transferee liable for the debts of the
Corporation to the extent provided by law, until such transfer shall have
been entered on the books of the Corporation by an entry showing from and to
whom transferred.
7.3 Transfer and Registry Agents. The Corporation may from time to time
maintain one or more transfer offices or agents and registry offices or
agents at such place or places as may be determined from time to time by the
Board.
7.4 Lost, Destroyed, Stolen and Mutilated Certificates. The holder of any
shares of capital stock of the Corporation shall immediately notify the
Corporation of any loss, destruction, theft or mutilation of the certificate
representing such shares, and the Corporation may issue
21
a new certificate to replace the certificate alleged to have been lost,
destroyed, stolen or mutilated. The Board may, in its discretion, as, a
condition to the issue of any such new certificate, require the owner of the
lost, destroyed, stolen or mutilated certificate, or his legal
representatives, to make proof satisfactory to the Board of such loss,
destruction, theft or mutilation and to advertise such fact in such manner
as the Board may require, and to give the Corporation and its transfer
agents and registrars, or such of them as the Board may require, a bond in
such form, in such sum and with such surety or sureties as the Board may
direct, to indemnify the Corporation and its transfer agents and registrars
against any claim that may be made against any of them on account of the
continued existence of any such certificate so alleged to have been lost,
destroyed, stolen or mutilated and against any expense in connection with
such claim.
7.5 Regulations. The Board may make such rules and regulations as it may
deem expedient, not inconsistent with the By-laws or with the Certificate of
Incorporation, concerning the issue, transfer and registration of
certificates representing shares of its capital stock.
7.6 Restriction on Transfer of Stock. A written restriction on the
transfer or registration of transfer of capital stock of the Corporation, if
permitted by Section 202 of the General Corporation Law and noted
conspicuously on the certificate representing such capital stock, may be
enforced against the holder of the restricted capital stock or any successor
or transferee of the holder including an executor, administrator, trustee,
guardian or other fiduciary entrusted with like responsibility for the
person or estate of the holder. Unless noted conspicuously on the
certificate representing such capital stock, a restriction, even though
permitted by Section 202 of the General Corporation Law, shall be
ineffective except against a person with actual knowledge of the
restriction. A restriction on the transfer or registration of transfer of
capital stock of the Corporation may be imposed either by the Certificate of
Incorporation or by an agreement among any number of stockholders or among
such stockholders and the Corporation. No restriction so imposed shall be
binding with respect to capital stock issued prior to the adoption of the
restriction unless the holders of such capital stock are parties to an
agreement or voted in favor of the restriction.
22
7.7 Dividends, Surplus, Etc. Subject to the provisions of the Certificate
of Incorporation and of law, the Board:
7.7.1 May declare and pay dividends or make other
distributions on the outstanding shares of capital stock in
such amounts and at such time or times as, in its discretion,
the condition of the affairs of the Corporation shall render
advisable;
7.7.2 May use and apply, in its discretion, any of the
surplus of the Corporation in purchasing or acquiring any
shares of capital stock of the Corporation, or purchase
warrants therefor, in accordance with law, or any of its
bonds, debentures, notes, scrip or other securities or
evidences of indebtedness;
7.7.3 May set aside from time to time out of such
surplus or net profits such sum or sums as, in its
discretion, it may think proper, as a reserve fund to meet
contingencies, or for equalizing dividends or for the purpose
of maintaining or increasing the property or business of the
Corporation, or for any purpose it may think conducive to the
best interest of the Corporation.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification of Officers and Directors. The Corporation shall
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil criminal, administrative or investigative, by reason of the
fact that he is or was a director or an officer of the Corporation against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding to the fullest extent and in the manner set forth
in and permitted by the General Corporation Law, and any other applicable
law, as from time to time in effect. Such right of indemnification shall
not be deemed exclusive of any other rights to which such director or
officer may be entitled apart from the foregoing provisions. The foregoing
provisions of this Section 8.1 shall be deemed to be a contract between the
Corporation and each director and officer who serves in such capacity at any
time while this Article 8
23
and the relevant provisions, of the General Corporation law and other
applicable law, if any, are in effect, and any repeal or modification
thereof shall not affect any rights or obligations then existing, with
respect to any state of facts then or theretofore existing, or any action,
suit or proceeding theretofore, or thereafter brought or threatened based
in whole or in part upon any such state of facts.
8.2 Indemnification of Other Persons. The Corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he is
or was an employee or agent of the Corporation, or is or was, serving at the
request of the Corporation, as a director, officer, employee or agent of
another Corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding to the extent and in the manner set
forth in and permitted by the General Corporation Law, and any other
applicable law, as from time to time in effect. Such right of
indemnification shall not be deemed exclusive of any other rights to which
any such person may be entitled apart from the foregoing provisions.
ARTICLE 9
BOOKS AND RECORD
9.1 Books and Records. The Corporation shall keep correct and complete
books and records of account and shall keep minutes of the proceedings of
the stockholders, the Board and any committee of the Board. The Corporation
shall keep at the office designated in the Certificate of Incorporation or
at the office of the transfer agent or registrar of the Corporation in
Delaware, a record containing the names and addresses of all stockholders,
the number and class of shares held by each and the dates when they
respectively became the owners of record thereof.
9.2 Form of Records. Any records maintained by the Corporation in the
regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of, punch cards
magnetic tape, photographs, microphotographs or any other in-
24
formation storage device provided that the records so kept can be converted
into clearly legible written form within a reasonable time. The Corporation
shall so convert any records so kept upon the request of any person entitled
to inspect the same.
9.3 Inspection of Books and Records. Except as otherwise provided by law,
the Board shall determine from time to time whether, and, if allowed, when
and under what conditions and regulations, the accounts, books, minutes and
other records of the Corporation, or any of them, shall be open to the
inspection of the stockholders.
ARTICLE 10
SEAL
The Board may adopt a corporate seal which shall be in the form of a
circle and shall bear the full name of the Corporation, the year of its
incorporation and the word "Delaware".
ARTICLE 11
FISCAL YEAR
The fiscal year of the Corporation shall begin on the 1st day of January
and shall terminate on the 31st day of December in each year, or such other
period as may be fixed by resolution of the Board.
ARTICLE 12
VOTING OF SHARES HELD
Unless otherwise provided by resolution of the Board, the Chairman of the
Board and Chief Executive Officer, or the President, or any Vice President,
may, from time to time, appoint one or more attorneys or agents of the
Corporation, in the name and on behalf of the Corporation, to cast the votes
which the Corporation may be entitled to cast as a stockholder or otherwise
in any other corporation, any of whose shares or securities may be held by
the Corporation, at meetings of the holders of stock or other securities of
such other corporation, or to consent, in writing to any action by any such
other corporation, and may instruct the person or persons so appointed as to
the manner of casting such
25
votes or giving such consent, and may execute or cause to be executed on
behalf of the Corporation and under its corporate seal, or otherwise, such
written proxies, consents, waivers or other instruments as he may deem
necessary or proper in the premises; or the Chairman of the Board and Chief
Executive Officer, or the President, or any Vice-President may himself
attend any meeting of the holders of the stock or other securities of any
such other corporation and thereat vote or exercise any or all other powers
of the Corporation as the holder of such stock or other securities of such
other corporation.
ARTICLE 13
BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS
Pursuant to the provisions of Section 203 (a) (2) of the General
Corporation Law, the Corporation, by action of the Board, expressly elects
not to be governed by Section 203 of the General Corporation Law, dealing
with business combinations with interested stockholders. Notwithstanding
anything to the contrary in these By-Laws, the provisions of this Article 13
may not be further amended by the Board, except as may be specifically
authorized by the General Corporation Law.
ARTICLE 14
AMENDMENTS
The By-Laws may be altered, amended, supplemented or repealed, or new By-
Laws may be adopted, by vote of the holders of the shares
26
entitled to vote in the election of directors. The By-Laws may be altered,
amended, supplemented or repealed, or new By-Laws may be adopted, by the
Board, provided that the vote of a majority of the entire Board shall be
required to change the number of authorized directors. Any By-Laws adopted,
altered, amended, or supplemented by the Board may be altered, amended,
supplemented or repealed by the stockholders entitled to vote thereon.
ARTICLE 15
OFFICES
The Corporation may have an office or offices at such place or places,
within or without the State of Delaware, as the Board of Directors may from
time to time designate or the business of the Corporation require.
Exhibit 10.01
LOEWS
CORPORATION
667 Madison Avenue, New York, N.Y. 10021-8087 (212) 545-2000
October 18, 1994
Mr. Laurence A. Tisch
Island Drive
North Manursing Island
Rye, New York 10580
Dear Mr. Tisch:
Reference is made to your Employment Agreement with Loews Corporation
(the "Company"), dated March 1, 1971, as amended by agreements dated
February 27, 1974, March 1, 1976, May 10, 1977, July 17, 1979, June 16,
1981, May 10, 1983, May 10, 1984, October 15, 1985, February 24, 1987,
October 14, 1988, March 1, 1990 and October 22, 1992 (the "Employment
Agreement").
This will confirm our agreement that the Employment Agreement is
amended as follows:
1. The period of your employment under and pursuant to the Employment
Agreement is hereby extended for an additional period through and including
October 31, 1996 upon all the terms, conditions and provisions of the
Employment Agreement, as hereby
amended.
2. You shall be paid a basic salary (the "Basic Salary") for your
services under and pursuant to the Employment Agreement, effective November
1, 1994, of $1,750,000 per annum, subject to such increases as the Board of
Directors of the Company, in its sole discretion, may from time to time
determine. Such Basic Salary shall be exclusive of fees received by you as
a director and as a member of Committees of the Boards of Directors of other
corporations, including subsidiaries, affiliates and investees of the
Company.
3. Effective November 1, 1994, and for so long as you are devoting a
principal amount of your time to CBS Inc. ("CBS"), the Basic Salary shall be
reduced to the rate of $750,000 per annum.
Mr. Laurence A. Tisch
October 18, 1994
Page 2
Except as herein modified or amended, the Employment Agreement shall
remain in full force and effect.
If the foregoing is in accordance with your understanding, would you
please sign the enclosed duplicate copy of this Letter Agreement at the
place indicated below and return the same to us for our records.
Very truly yours,
LOEWS CORPORATION
By:Barry Hirsch
---------------------
Barry Hirsch
Senior Vice President
ACCEPTED AND AGREED TO:
Laurence A. Tisch
-----------------------
Laurence A. Tisch
Exhibit 10.02
LOEWS
CORPORATION
667 Madison Avenue, New York, N.Y. 10021-8087 (212) 545-2000
October 18, 1994
Mr. Preston R. Tisch
5 Timber Trail
Rye, New York 10580
Dear Mr. Tisch:
Reference is made to your Employment Agreement with Loews
Corporation (the "Company"), dated March 1, 1988, as amended by
agreements dated March 1, 1990 and October 22, 1992 (the
"Employment Agreement").
This will confirm our agreement that the Employment Agree-
ment is amended as follows:
1. The period of your employment under and pursuant to the Employment
Agreement is hereby extended for an additional period
through and including October 31, 1996 upon all the terms, condi-
tions and provisions of the Employment Agreement, as hereby
amended.
2. You shall be paid a basic salary (the "Basic Salary")
for your services under and pursuant to the Employment Agreement,
effective November 1, 1994, of $1,750,000 per annum, subject to
such increases as the Board of Directors of the Company, in its
sole discretion, may from time to time determine. Such Basic
Salary shall be exclusive of fees received by you as a director
and as a member of Committees of the Boards of Directors of other
corporations, including subsidiaries, affiliates and investees of
the Company.
Except as herein modified or amended, the Employment Agree-
ment shall remain in full force and effect.
Mr. Preston R. Tisch
October 18, 1994
Page 2
If the foregoing is in accordance with your understanding,
would you please sign the enclosed duplicate copy of this Letter
Agreement at the place indicated below and return the same to us
for our records.
Very truly yours,
LOEWS CORPORATION
By:Barry Hirsch
---------------------
Barry Hirsch
Senior Vice President
ACCEPTED AND AGREED TO:
Preston R. Tisch
-----------------------
Preston R. Tisch
EXHIBIT 11.01
LOEWS CORPORATION AND SUBSIDIARIES
Statement Re Computation of Per Share Earnings Assuming Full Dilution
<TABLE>
<CAPTION>
Year Ended
December 31,
1992
--------------
(In thousands,
except per
share data)
<S> <C>
Computation of Fully Diluted Net Income:
Net income ................................................ $122,614
Reduction of interest and debt discount expenses related to
notes assumed converted, net of applicable federal income
taxes ..................................................... 14,924
--------
Fully diluted net income ................................... $137,538
========
Computation of Fully Diluted Shares:
Weighted average shares outstanding ........................ 65,659
Add shares assumed to be issued upon conversion of notes ... 2,154
--------
Fully diluted shares ....................................... 67,813
========
Net Income Per Share Assuming Full Dilution .................. $ 2.03
========
</TABLE>
Exhibit 21.01
LOEWS CORPORATION
Subsidiaries of the Registrant
December 31, 1994
<TABLE>
<CAPTION>
Organized Under
Name of Subsidiary Laws of Business Names
------------------ --------------- --------------
<S> <C> <C>
CNA Financial Corporation ............. Delaware )
Continental Casualty Company ......... Illinois )
Continental Assurance Company ....... Illinois )
National Fire Insurance Company of )
Hartford ........................... Connecticut ) CNA Insurance
American Casualty Company of )
Reading, Pennsylvania .............. Pennsylvania )
CNA Management Company Limited ...... Great Britain )
Lorillard, Inc. ....................... New York )
Lorillard Tobacco Company ............ Delaware ) Lorillard
</TABLE>
The names of certain subsidiaries which, if considered as a single subsidiary,
would not constitute a "significant subsidiary" as defined in Regulation S-X,
have been omitted.
EXHIBIT 23.01
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in Registration
Statement No. 33-60342 of Loews Corporation on Form S-3 of our
report dated February 15, 1995, appearing in this Annual Report
on Form 10-K of Loews Corporation for the year ended December 31,
1994.
Deloitte & Touche LLP
New York, New York
March 24, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 160,557
<SECURITIES> 30,727,836
<RECEIVABLES> 8,208,021
<ALLOWANCES> 140,005
<INVENTORY> 244,394
<CURRENT-ASSETS> 0
<PP&E> 1,801,736
<DEPRECIATION> 711,868
<TOTAL-ASSETS> 50,335,976
<CURRENT-LIABILITIES> 0
<BONDS> 2,144,394
<COMMON> 58,965
0
0
<OTHER-SE> 5,346,349
<TOTAL-LIABILITY-AND-EQUITY> 50,335,976
<SALES> 2,061,415
<TOTAL-REVENUES> 13,515,201
<CGS> 929,342
<TOTAL-COSTS> 10,619,536
<OTHER-EXPENSES> 1,532,965
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 174,565
<INCOME-PRETAX> 266,148
<INCOME-TAX> (9,041)
<INCOME-CONTINUING> 267,834
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 267,834
<EPS-PRIMARY> 4.45
<EPS-DILUTED> 0
</TABLE>
EXHIBIT 28.01
LOEWS CORPORATION AND SUBSIDIARIES
Reconciliation of Property and Casualty Reserves as shown on Schedule P
to Reserves for Unpaid Claim and Claim Expenses
December 31, 1994
A reconciliation of property and casualty reserves as shown on Schedule P to
reserves for unpaid claim and claim expenses, as shown in the Annual Report on
Form 10-K follows. Schedule P is from Continental Casualty Company's 1994
consolidated annual statutory statement provided to state insurance regulatory
authorities. Statutory claim and claim expense reserves are presented net of
ceded reinsurance. Under generally accepted accounting principles such reserves
are recorded "gross" of reinsurance with corresponding ceded reinsurance
recoverables recorded as assets.
<TABLE>
<CAPTION>
Property and Casualty Reserve Reconciliation
Statutory Basis to Generally Accepted Accounting Principles
--------------------------------------------------------------------------------
(In thousands)
<S> <C>
Total claim and claim expenses per Schedule P ................... $18,418,000
Non-domestic affiliates ......................................... 516,000
Ceded claim and claim expenses .................................. 2,705,000
-----------
Reserve for claim and claim expenses-generally accepted
accounting principles ..................................... $21,639,000
===========
</TABLE>
<PAGE>
EXHIBIT 28.02
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - ANALYSIS OF LOSSES AND LOSS EXPENSES
Notes to Schedule P
(1) The Parts of Schedule P:
Part 1 - detailed information on losses and loss expenses.
Part 2 - history of incurred losses and allocated expenses.
Part 3 - history of loss and allocated expense payments.
Part 4 - history of bulk and incurred-but-not reported reserves.
Part 5 - history of claims.
Part 4 - history of premiums earned.
Schedule P Interrogatories
(2) Lines of business A through M, R, and S are groupings of the lines of
business used on Page 14, the state page.
(3) Reinsurance A, B, C, and D (lines N to Q) are:
Reinsurance A = nonproportional property (1988 and subsequent)
Reinsurance B = nonproportional liability (1988 and subsequent)
Reinsurance C = financial lines (1988 and subsequent)
Reinsurance D = old Schedule O line 30 (1987 and prior)
SCHEDULE P - PART 1 - SUMMARY
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#-----------------------------------------------------------!
| | Premiums Earned | Loss and Loss Expense Payments |
| 1 |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 420,726 | 137,405 | 121,406 | 15,903 |
| 2. 1985 | 2,756,886 | 425,772 | 2,331,114 | 2,329,418 | 605,053 | 316,547 | 41,801 |
| 3. 1986 | 4,300,449 | 550,592 | 3,749,857 | 2,154,422 | 322,105 | 326,131 | 34,033 |
| 4. 1987 | 4,915,810 | 665,280 | 4,250,529 | 2,423,657 | 347,165 | 289,438 | 14,346 |
| 5. 1988 | 5,399,645 | 613,422 | 4,786,223 | 2,881,508 | 349,332 | 315,744 | 17,982 |
| 6. 1989 | 5,768,987 | 549,762 | 5,219,225 | 3,567,826 | 382,535 | 342,400 | 23,979 |
| 7. 1990 | 6,595,234 | 454,185 | 6,141,049 | 3,610,848 | 225,831 | 351,237 | 13,704 |
| 8. 1991 | 6,891,720 | 425,638 | 6,466,082 | 3,159,956 | 167,336 | 283,412 | 8,955 |
| 9. 1992 | 6,535,769 | 434,065 | 6,101,704 | 2,741,868 | 204,385 | 179,762 | 8,203 |
|10. 1993 | 6,404,755 | 454,555 | 5,950,200 | 1,829,177 | 136,622 | 85,787 | 3,799 |
|11. 1994 | 6,955,762 | 522,977 | 6,432,785 | 1,198,298 | 73,232 | 34,920 | 1,365 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | 26,317,705 | 2,951,001 | 2,646,784 | 184,071 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1 - SUMMARY - (CONTINUED)
<CAPTION>
!----------------------------------------------------------#--------------#
| | | |
| 1 |--------------#--------------#--------------| 12 |
| Years | 9 | 10 | 11 | |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 7,560 | 8,967 | 397,791 | X X X X |
| 2. 1985 | 68,715 | 92,567 | 2,091,678 | X X X X |
| 3. 1986 | 71,189 | 117,002 | 2,241,416 | X X X X |
| 4. 1987 | 68,016 | 131,259 | 2,482,843 | X X X X |
| 5. 1988 | 179,786 | 155,022 | 2,984,961 | X X X X |
| 6. 1989 | 160,592 | 189,876 | 3,693,589 | X X X X |
| 7. 1990 | 103,235 | 200,038 | 3,922,589 | X X X X |
| 8. 1991 | 135,976 | 208,561 | 3,475,637 | X X X X |
| 9. 1992 | 83,594 | 198,448 | 2,907,490 | X X X X |
|10. 1993 | 184,768 | 203,749 | 1,978,291 | X X X X |
|11. 1994 | 41,905 | 171,110 | 1,329,732 | X X X X |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 1,105,334 | 1,676,598 | 27,506,015 | X X X X |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------------------#--------------------------------------------!
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk|
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 1,132,491 | 259,584 | 2,652,462 | 216,405 | 0 | 0 | 59,049 |
| 2. 1985 | 178,615 | 29,361 | 143,619 | 22,365 | 0 | 0 | 20,664 |
| 3. 1986 | 235,038 | 25,498 | 211,903 | 17,486 | 0 | 0 | 43,250 |
| 4. 1987 | 283,691 | 31,448 | 241,087 | 31,800 | 0 | 0 | 56,878 |
| 5. 1988 | 384,295 | 28,630 | 311,956 | 57,621 | 0 | 0 | 69,646 |
| 6. 1989 | 503,614 | 30,539 | 348,465 | 57,669 | 0 | 0 | 100,200 |
| 7. 1990 | 685,680 | 43,021 | 511,269 | 101,387 | 0 | 0 | 155,363 |
| 8. 1991 | 815,661 | 38,939 | 901,583 | 141,389 | 0 | 0 | 217,169 |
| 9. 1992 | 877,161 | 28,670 | 1,249,445 | 187,160 | 0 | 0 | 294,639 |
|10. 1993 | 1,021,126 | 40,832 | 1,796,084 | 198,093 | 0 | 0 | 403,118 |
|11. 1994 | 1,016,791 | 97,906 | 2,893,812 | 266,920 | 0 | 0 | 485,506 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 7,134,162 | 654,429 | 11,261,685 | 1,298,295 | 0 | 0 | 1,905,482 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->--------------|
<PAGE>
<PAGE>
SCHEDULE P - PART 1 - SUMMARY - (CONTINUED)
<CAPTION>
!----------------------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| |+ IBNR | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct |
| | Ceded | Anticipated | Unpaid | Unpaid | and Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 11,162 | 37,717 | 15,196 | 3,372,047 | X X X X |
| 2. 1985 | 3,445 | 7,244 | 3,111 | 290,838 | X X X X |
| 3. 1986 | 3,836 | 12,532 | 5,178 | 448,549 | X X X X |
| 4. 1987 | 5,615 | 12,224 | 7,840 | 520,633 | X X X X |
| 5. 1988 | 7,503 | 17,047 | 10,084 | 682,227 | X X X X |
| 6. 1989 | 14,678 | 28,002 | 12,334 | 861,727 | X X X X |
| 7. 1990 | 16,173 | 40,264 | 18,397 | 1,210,128 | X X X X |
| 8. 1991 | 22,910 | 59,147 | 27,172 | 1,758,346 | X X X X |
| 9. 1992 | 25,419 | 61,090 | 35,441 | 2,215,437 | X X X X |
|10. 1993 | 30,390 | 65,391 | 44,990 | 2,996,003 | X X X X |
|11. 1994 | 29,865 | 98,203 | 60,837 | 4,062,255 | X X X X |
|-------------|--------------|--------------|--------------|--------------|-------------|
|12. Totals | 170,996 | 438,862 | 240,580 | 18,418,190 | X X X X |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#--------------#
| | Total Losses and | Loss and Loss Expense Percentage | Discount |
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of |
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 3,084,541 | 702,026 | 2,382,516 | 111.9 | 164.9 | 102.2 | 0 |
| 3. 1986 | 3,092,923 | 402,958 | 2,689,965 | 71.9 | 73.2 | 71.7 | 0 |
| 4. 1987 | 3,433,850 | 430,374 | 3,003,476 | 69.9 | 64.7 | 70.7 | 0 |
| 5. 1988 | 4,128,256 | 461,068 | 3,667,188 | 76.5 | 75.2 | 76.6 | 0 |
| 6. 1989 | 5,064,715 | 509,399 | 4,555,316 | 87.8 | 92.7 | 87.3 | 0 |
| 7. 1990 | 5,532,833 | 400,116 | 5,132,717 | 83.9 | 88.1 | 83.6 | 0 |
| 8. 1991 | 5,613,513 | 379,530 | 5,233,983 | 81.5 | 89.2 | 80.9 | 0 |
| 9. 1992 | 5,576,763 | 453,837 | 5,122,927 | 85.3 | 104.6 | 84.0 | 0 |
|10. 1993 | 5,384,030 | 409,737 | 4,974,294 | 84.1 | 90.1 | 83.6 | 0 |
|11. 1994 | 5,861,274 | 469,288 | 5,391,986 | 84.3 | 89.7 | 83.8 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1 - SUMMARY - (CONTINUED)
<CAPTION>
!----------------------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| | Money | 33 | After Discount |
| #--------------|Inter-Company |--------------#--------------|
| | 32 | Pooling | 34 | 35 |
| | Loss |Participation | Losses |Loss Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | X X X X | 3,308,964 | 63,083 |
| 2. 1985 | 0 | 0.0 | 270,508 | 20,330 |
| 3. 1986 | 0 | 0.0 | 403,957 | 44,592 |
| 4. 1987 | 0 | 0.0 | 461,530 | 59,103 |
| 5. 1988 | 0 | 0.0 | 610,000 | 72,227 |
| 6. 1989 | 0 | 0.0 | 763,871 | 97,856 |
| 7. 1990 | 0 | 0.0 | 1,052,541 | 157,587 |
| 8. 1991 | 0 | 0.0 | 1,536,915 | 221,431 |
| 9. 1992 | 0 | 0.0 | 1,910,776 | 304,661 |
|10. 1993 | 0 | 0.0 | 2,578,285 | 417,718 |
|11. 1994 | 0 | 0.0 | 3,545,777 | 516,478 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | X X X X | 16,443,124 | 1,975,066 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 2 - SUMMARY
<TABLE>
<CAPTION>
!-------------------#-------------------------------------------------------------------------------------------------#
| 1 | Incurred Losses and Allocated Expenses Reported At Year End (000 omitted) |
| Years in Which |---------------------------#-------------#-------------#-------------#-------------#-------------|
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 2,846,566 | 3,460,093 | 3,883,639 | 4,107,157 | 4,384,064 | 4,596,294 | 4,715,213 |
| 2. 1985 | 2,041,213 | 2,276,531 | 2,261,428 | 2,278,784 | 2,329,536 | 2,354,270 | 2,402,255 |
| 3. 1986 | X X X X | 3,250,167 | 3,136,758 | 3,033,926 | 2,870,346 | 2,785,435 | 2,774,734 |
| 4. 1987 | X X X X | X X X X | 3,337,636 | 3,286,467 | 3,311,858 | 3,209,693 | 3,136,710 |
| 5. 1988 | X X X X | X X X X | X X X X | 4,014,443 | 3,963,594 | 3,922,901 | 3,831,566 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 4,504,258 | 4,541,570 | 4,566,683 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 5,309,041 | 5,202,131 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 5,639,245 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
|------------------->--------------------------->------------->------------->------------->------------->------------->
| |
| 12. Totals |
<--------------------------------------------------------------------------------------------------------------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2 - SUMMARY - (CONTINUED)
<CAPTION>
!-------------------------------------------------------------#-----------------------------#
| 1 | | Development |
| Years in Which #-------------#-------------#-------------|--------------#--------------|
| Losses Were | 9 | 10 | 11 | 12 | 13 |
| Incurred | 1992 | 1993 | 1994 | One Year | Two Year |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 6,435,723 | 7,482,028 | 7,728,679 | 246,651 | 1,292,956 |
| 2. 1985 | 2,425,753 | 2,420,430 | 2,417,089 | (3,341)| (8,664)|
| 3. 1986 | 2,731,675 | 2,727,061 | 2,732,353 | 5,292 | 678 |
| 4. 1987 | 3,099,763 | 3,083,390 | 3,081,200 | (2,190)| (18,563)|
| 5. 1988 | 3,801,750 | 3,769,013 | 3,773,096 | 4,083 | (28,654)|
| 6. 1989 | 4,584,669 | 4,560,272 | 4,574,825 | 14,553 | (9,844)|
| 7. 1990 | 5,163,398 | 5,170,899 | 5,105,339 | (65,560)| (58,059)|
| 8. 1991 | 5,557,517 | 5,276,368 | 5,141,668 | (134,700)| (415,849)|
| 9. 1992 | 5,392,838 | 5,227,755 | 4,980,466 | (247,289)| (412,372)|
| 10. 1993 | X X X X | 4,961,296 | 4,774,677 | (186,619)| X X X X |
| 11. 1994 | X X X X | X X X X | 5,194,496 | X X X X | X X X X |
| | | | | | |
|------------------->------------->------------->-------------|--------------|--------------|
| | | | |
| 12. Totals | | (369,122)| 341,628 |
| | | | |
<------------------------------------------------------------->-------------->-------------->
SCHEDULE P - PART 3 - SUMMARY
</TABLE>
<TABLE>
<CAPTION>
!-------------------#-------------------------------------------------------------------------------------------------!
| | |
| 1 | Cumulative Paid Losses and Allocated Expenses At Year End (000 omitted) |
| Years in Which |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 579,391 | 1,113,806 | 1,594,266 | 2,032,011 | 2,389,590 | 2,780,842 |
| 2. 1985 | (39,769)| 868,516 | 1,092,877 | 1,240,564 | 1,414,678 | 1,585,980 | 1,752,074 |
| 3. 1986 | X X X X | 467,087 | 947,280 | 1,263,953 | 1,420,288 | 1,651,606 | 1,861,599 |
| 4. 1987 | X X X X | X X X X | 547,999 | 1,201,193 | 1,563,459 | 1,748,920 | 1,950,264 |
| 5. 1988 | X X X X | X X X X | X X X X | 651,625 | 1,428,893 | 1,886,171 | 2,188,695 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 789,063 | 1,827,085 | 2,507,948 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 918,597 | 2,061,339 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 997,430 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->-------------<
<PAGE>
<PAGE>
SCHEDULE P - PART 3 - SUMMARY - (CONTINUED)
<CAPTION>
!-------------------------------------------------------------#--------------#--------------#
| | | 12 | 13 |
| 1 | | Number of | Number of |
| Years in Which #-------------#-------------#-------------| Claims | Claims |
| Losses Were | 9 | 10 | 11 | Closed With | Closed |
| Incurred | 1992 | 1993 | 1994 | Loss | Without Loss |
| | | | | Payment | Payment |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 3,144,267 | 3,545,589 | 3,934,413 | X X X X | X X X X |
| 2. 1985 | 1,887,316 | 1,939,483 | 1,999,111 | X X X X | X X X X |
| 3. 1986 | 1,963,470 | 2,068,874 | 2,124,415 | X X X X | X X X X |
| 4. 1987 | 2,137,487 | 2,267,927 | 2,351,584 | X X X X | X X X X |
| 5. 1988 | 2,490,999 | 2,692,826 | 2,829,939 | X X X X | X X X X |
| 6. 1989 | 2,925,775 | 3,277,082 | 3,503,713 | X X X X | X X X X |
| 7. 1990 | 2,802,747 | 3,327,500 | 3,722,551 | X X X X | X X X X |
| 8. 1991 | 2,012,959 | 2,730,259 | 3,267,076 | X X X X | X X X X |
| 9. 1992 | 1,004,297 | 2,040,990 | 2,709,042 | X X X X | X X X X |
| 10. 1993 | X X X X | 914,648 | 1,774,542 | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | 1,158,621 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
SCHEDULE P - PART 4 - SUMMARY
<TABLE>
<CAPTION>
!-------------------#-------------------------------------------------------------------------------------------------!
| 1 |Bulk and Incurred But Not Reported Reserves on Losses and Allocated Expenses at Year End |
| Years in Which |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Losses | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 1,076,772 | 769,739 | 877,969 | 771,332 | 694,796 | 670,874 | 525,981 |
| 2. 1985 | 1,610,921 | 781,359 | 557,294 | 437,921 | 419,052 | 309,281 | 244,302 |
| 3. 1986 | X X X X | 2,048,934 | 1,417,507 | 1,057,062 | 771,057 | 520,491 | 391,556 |
| 4. 1987 | X X X X | X X X X | 1,964,787 | 1,207,755 | 910,368 | 671,387 | 500,199 |
| 5. 1988 | X X X X | X X X X | X X X X | 2,335,680 | 1,457,537 | 957,892 | 646,699 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 2,596,516 | 1,503,792 | 882,306 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 3,239,050 | 1,746,567 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 3,428,161 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->-------------<
<CAPTION>
!--------------------------------------------------------------#
| 1 | (000 omitted) |
| Years in Which #-------------#-------------#--------------|
| Losses | 9 | 10 | 11 |
| Were Incurred | 1992 | 1993 | 1994 |
|-------------------|-------------|-------------|--------------|
<S> <C> <C> <C> |
| 1. Prior | 1,991,994 | 2,658,809 | 2,483,944 |
| 2. 1985 | 202,851 | 177,562 | 138,473 |
| 3. 1986 | 305,341 | 253,492 | 233,831 |
| 4. 1987 | 368,650 | 300,587 | 260,550 |
| 5. 1988 | 469,139 | 368,139 | 316,478 |
| 6. 1989 | 602,913 | 464,946 | 376,318 |
| 7. 1990 | 1,046,699 | 737,878 | 549,072 |
| 8. 1991 | 2,202,455 | 1,397,244 | 954,453 |
| 9. 1992 | 3,361,598 | 2,031,813 | 1,331,505 |
| 10. 1993 | X X X X | 3,158,737 | 1,970,719 |
| 11. 1994 | X X X X | X X X X | 3,093,149 |
| | | | |
<------------------->------------->------------->-------------->
/TABLE
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#-----------------------------------------------------------#
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| | | | | | | | |
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 138 | 0 | 22 | 0 |
| 2. 1985 | 79,932 | 5,347 | 74,585 | 59,629 | 0 | 3,210 | 0 |
| 3. 1986 | 90,407 | 970 | 89,437 | 54,052 | 1 | 2,967 | 0 |
| 4. 1987 | 110,990 | 1,029 | 109,960 | 65,118 | 16 | 4,857 | 0 |
| 5. 1988 | 147,610 | 759 | 146,851 | 85,860 | (16)| 4,313 | 0 |
| 6. 1989 | 169,394 | 1,244 | 168,150 | 125,252 | 262 | 6,271 | 5 |
| 7. 1990 | 188,947 | 517 | 188,430 | 145,912 | 230 | 6,667 | 11 |
| 8. 1991 | 203,426 | 2,272 | 201,154 | 143,282 | 402 | 5,739 | 34 |
| 9. 1992 | 216,699 | 681 | 216,018 | 181,266 | 10,988 | 5,626 | 21 |
|10. 1993 | 223,351 | 299 | 223,053 | 132,157 | 189 | 3,679 | 0 |
|11. 1994 | 233,912 | 2,647 | 231,266 | 145,198 | 345 | 3,604 | 10 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | 1,137,863 | 12,417 | 46,953 | 81 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS - (CONTINUED)
<CAPTION>
!----------------------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
| | | | | |
<S> <C> <C> <C> <C> |
| 1. Prior | (2)| 2 | 162 | X X X X |
| 2. 1985 | 922 | 1,628 | 64,467 | 44,843 |
| 3. 1986 | 869 | 4,377 | 61,395 | 38,644 |
| 4. 1987 | 1,392 | 5,802 | 75,762 | 45,371 |
| 5. 1988 | 1,525 | 6,265 | 96,452 | 49,890 |
| 6. 1989 | 1,845 | 8,092 | 139,349 | 68,139 |
| 7. 1990 | 2,747 | 9,428 | 161,767 | 73,027 |
| 8. 1991 | 1,664 | 12,200 | 160,785 | 80,860 |
| 9. 1992 | 1,555 | 14,152 | 190,034 | 82,018 |
|10. 1993 | 1,395 | 16,836 | 152,483 | 70,349 |
|11. 1994 | 385 | 17,903 | 166,349 | 75,199 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 14,297 | 96,685 | 1,269,003 | X X X X |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS - (CONTINUED)
<CAPTION>
!-------------#--------------------------------------------------------#--------------------------------------------!
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk & IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 1,451 | 0 | 83 | 0 | 0 | 0 | 0 |
| 2. 1985 | 656 | 0 | 276 | 0 | 0 | 0 | 16 |
| 3. 1986 | 630 | 0 | 315 | 0 | 0 | 0 | 0 |
| 4. 1987 | 1,093 | 0 | 993 | 0 | 0 | 0 | 161 |
| 5. 1988 | 2,409 | 0 | 1,150 | 0 | 0 | 0 | 15 |
| 6. 1989 | 2,228 | 1 | 1,609 | 32 | 0 | 0 | 508 |
| 7. 1990 | 4,261 | 0 | 1,499 | 6 | 0 | 0 | 687 |
| 8. 1991 | 6,321 | 0 | 5,333 | 1,210 | 0 | 0 | 1,735 |
| 9. 1992 | 8,074 | 74 | 14,290 | 93 | 0 | 0 | 2,766 |
|10. 1993 | 10,100 | 2 | 28,330 | 100 | 0 | 0 | 3,225 |
|11. 1994 | 27,148 | 0 | 77,796 | 74 | 0 | 0 | 5,589 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 64,369 | 77 | 131,674 | 1,515 | 0 | 0 | 14,702 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->--------------<
<CAPTION>
!----------------------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 0 | 49 | 2 | 1,536 | 62 |
| 2. 1985 | 0 | 50 | 4 | 952 | 20 |
| 3. 1986 | 0 | 0 | 6 | 951 | 40 |
| 4. 1987 | 0 | 10 | 18 | 2,265 | 33 |
| 5. 1988 | 0 | 59 | 25 | 3,599 | 78 |
| 6. 1989 | 0 | 239 | 32 | 4,344 | 79 |
| 7. 1990 | 0 | 540 | 51 | 6,492 | 118 |
| 8. 1991 | 0 | 522 | 154 | 12,332 | 256 |
| 9. 1992 | 3 | 905 | 334 | 25,294 | 364 |
|10. 1993 | 1 | 1,356 | 538 | 42,090 | 581 |
|11. 1994 | 2 | 3,620 | 1,538 | 111,995 | 4,533 |
|-------------|--------------|--------------|--------------|--------------|-------------|
|12. Totals | 6 | 7,350 | 2,702 | 211,849 | 6,164 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS - (CONTINUED)
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#--------------!
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 65,419 | 0 | 65,419 | 81.8 | 0.0 | 87.7 | 0 |
| 3. 1986 | 62,347 | 1 | 62,346 | 69.0 | 0.1 | 69.7 | 0 |
| 4. 1987 | 78,042 | 15 | 78,027 | 70.3 | 1.5 | 71.0 | 0 |
| 5. 1988 | 100,036 | (15)| 100,051 | 67.8 | (2.0)| 68.1 | 0 |
| 6. 1989 | 143,992 | 300 | 143,692 | 85.0 | 24.1 | 85.5 | 0 |
| 7. 1990 | 168,505 | 246 | 168,259 | 89.2 | 47.6 | 89.3 | 0 |
| 8. 1991 | 174,763 | 1,646 | 173,117 | 85.9 | 72.4 | 86.1 | 0 |
| 9. 1992 | 226,507 | 11,180 | 215,327 | 104.5 | 1,642.0 | 99.7 | 0 |
|10. 1993 | 194,864 | 291 | 194,573 | 87.2 | 97.5 | 87.2 | 0 |
|11. 1994 | 278,776 | 431 | 278,344 | 119.2 | 16.3 | 120.4 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->--------------<
<CAPTION>
!----------------------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| #--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 1,534 | 2 |
| 2. 1985 | 0 | 0.0 | 932 | 20 |
| 3. 1986 | 0 | 0.0 | 945 | 6 |
| 4. 1987 | 0 | 0.0 | 2,086 | 179 |
| 5. 1988 | 0 | 0.0 | 3,559 | 40 |
| 6. 1989 | 0 | 0.0 | 3,804 | 540 |
| 7. 1990 | 0 | 0.0 | 5,754 | 738 |
| 8. 1991 | 0 | 0.0 | 10,443 | 1,889 |
| 9. 1992 | 0 | 0.0 | 22,197 | 3,097 |
|10. 1993 | 0 | 0.0 | 38,328 | 3,762 |
|11. 1994 | 0 | 0.0 | 104,870 | 7,125 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | X X X X | 194,451 | 17,398 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#-----------------------------------------------------------#
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 2,425 | 287 | 76 | 3 |
| 2. 1985 | 146,068 | 10,748 | 135,320 | 137,097 | 2,775 | 10,214 | 37 |
| 3. 1986 | 170,619 | 6,847 | 163,772 | 157,205 | 8,232 | 12,066 | 190 |
| 4. 1987 | 202,239 | 12,200 | 190,039 | 186,580 | 11,529 | 13,776 | 294 |
| 5. 1988 | 260,594 | 18,142 | 242,452 | 215,541 | 15,164 | 14,313 | 544 |
| 6. 1989 | 308,866 | 19,341 | 289,524 | 259,345 | 16,380 | 17,191 | 447 |
| 7. 1990 | 356,704 | 11,055 | 345,650 | 275,090 | 9,746 | 18,865 | 303 |
| 8. 1991 | 378,037 | 6,068 | 371,969 | 270,150 | 4,904 | 14,986 | 143 |
| 9. 1992 | 410,684 | 6,450 | 404,233 | 247,948 | 5,963 | 9,765 | 57 |
|10. 1993 | 418,598 | 5,705 | 412,893 | 174,894 | 3,388 | 4,706 | (4)|
|11. 1994 | 448,059 | 5,498 | 442,561 | 79,083 | 1,071 | 1,510 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | 2,005,358 | 79,438 | 117,467 | 2,013 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#---------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 1 | 83 | 2,294 | X X X X |
| 2. 1985 | 5,903 | 7,763 | 152,262 | 62,682 |
| 3. 1986 | 4,282 | 10,983 | 171,832 | 66,608 |
| 4. 1987 | 5,799 | 11,698 | 200,232 | 76,796 |
| 5. 1988 | 6,883 | 15,671 | 229,817 | 84,096 |
| 6. 1989 | 7,561 | 19,456 | 279,166 | 93,101 |
| 7. 1990 | 8,780 | 18,364 | 302,269 | 97,173 |
| 8. 1991 | 6,370 | 18,884 | 298,972 | 95,555 |
| 9. 1992 | 4,865 | 19,829 | 271,523 | 92,957 |
|10. 1993 | 3,512 | 22,908 | 199,124 | 87,764 |
|11. 1994 | 1,232 | 18,816 | 98,339 | 72,355 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 55,188 | 164,455 | 2,205,829 | X X X X |
<------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL - (CONTINUED)
<CAPTION>
!-------------#--------------------------------------------------------#--------------------------------------------!
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 6,711 | 396 | 7,488 | 0 | 0 | 0 | 484 |
| 2. 1985 | 4,116 | 0 | 2,409 | 0 | 0 | 0 | 390 |
| 3. 1986 | 7,276 | 0 | 2,278 | 0 | 0 | 0 | 1,264 |
| 4. 1987 | 8,313 | 85 | 4,197 | 0 | 0 | 0 | 1,702 |
| 5. 1988 | 11,552 | 50 | 5,166 | 0 | 0 | 0 | 1,811 |
| 6. 1989 | 21,623 | 153 | 10,858 | 0 | 0 | 0 | 4,137 |
| 7. 1990 | 31,251 | 301 | 16,717 | 0 | 0 | 0 | 5,652 |
| 8. 1991 | 48,163 | 634 | 21,520 | 0 | 0 | 0 | 11,818 |
| 9. 1992 | 67,921 | 481 | 61,752 | 0 | 0 | 0 | 17,162 |
|10. 1993 | 82,696 | 693 | 110,095 | 659 | 0 | 0 | 17,915 |
|11. 1994 | 92,622 | 1,754 | 131,275 | 1,615 | 0 | 0 | 16,017 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 382,244 | 4,547 | 373,755 | 2,274 | 0 | 0 | 78,352 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->--------------<
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 0 | 220 | 146 | 14,433 | 297 |
| 2. 1985 | 0 | 160 | 50 | 6,965 | 135 |
| 3. 1986 | 0 | 42 | 81 | 10,899 | 185 |
| 4. 1987 | 0 | 133 | 105 | 14,232 | 228 |
| 5. 1988 | 0 | 303 | 120 | 18,599 | 304 |
| 6. 1989 | 0 | 513 | 294 | 36,759 | 539 |
| 7. 1990 | 0 | 1,701 | 525 | 53,844 | 881 |
| 8. 1991 | 0 | 2,087 | 824 | 81,690 | 1,511 |
| 9. 1992 | 0 | 3,165 | 1,540 | 147,894 | 2,874 |
|10. 1993 | 1 | 3,989 | 1,990 | 211,343 | 5,653 |
|11. 1994 | 1 | 5,436 | 3,782 | 240,326 | 18,290 |
|-------------|--------------|--------------|--------------|--------------|-------------|
|12. Totals | 2 | 17,751 | 9,457 | 836,985 | 30,897 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL - (CONTINUED)
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#--------------#
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 162,039 | 2,811 | 159,228 | 110.9 | 26.2 | 117.7 | 0 |
| 3. 1986 | 191,153 | 8,422 | 182,731 | 112.0 | 123.0 | 111.6 | 0 |
| 4. 1987 | 226,371 | 11,907 | 214,464 | 111.9 | 97.6 | 112.9 | 0 |
| 5. 1988 | 264,173 | 15,758 | 248,415 | 101.4 | 86.9 | 102.5 | 0 |
| 6. 1989 | 332,904 | 16,979 | 315,925 | 107.8 | 87.8 | 109.1 | 0 |
| 7. 1990 | 366,464 | 10,351 | 356,113 | 102.7 | 93.6 | 103.0 | 0 |
| 8. 1991 | 386,344 | 5,682 | 380,662 | 102.2 | 93.6 | 102.3 | 0 |
| 9. 1992 | 425,918 | 6,501 | 419,417 | 103.7 | 100.8 | 103.8 | 0 |
|10. 1993 | 415,204 | 4,737 | 410,467 | 99.2 | 83.0 | 99.4 | 0 |
|11. 1994 | 343,105 | 4,440 | 338,665 | 76.6 | 80.8 | 76.5 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 13,803 | 630 |
| 2. 1985 | 0 | 0.0 | 6,525 | 440 |
| 3. 1986 | 0 | 0.0 | 9,554 | 1,345 |
| 4. 1987 | 0 | 0.0 | 12,425 | 1,807 |
| 5. 1988 | 0 | 0.0 | 16,668 | 1,931 |
| 6. 1989 | 0 | 0.0 | 32,328 | 4,431 |
| 7. 1990 | 0 | 0.0 | 47,667 | 6,177 |
| 8. 1991 | 0 | 0.0 | 69,048 | 12,642 |
| 9. 1992 | 0 | 0.0 | 129,192 | 18,702 |
|10. 1993 | 0 | 0.0 | 191,439 | 19,904 |
|11. 1994 | 0 | 0.0 | 220,528 | 19,798 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | X X X X | 749,178 | 87,807 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 2,599 | (1)| 100 | 0 |
| 2. 1985 | 221,827 | 39,207 | 182,619 | 176,636 | 28,207 | 20,012 | 1,604 |
| 3. 1986 | 403,419 | 95,375 | 308,043 | 240,621 | 65,251 | 27,161 | 569 |
| 4. 1987 | 508,426 | 139,851 | 368,576 | 311,439 | 95,764 | 32,795 | 565 |
| 5. 1988 | 522,888 | 127,960 | 394,928 | 329,184 | 89,028 | 34,193 | 576 |
| 6. 1989 | 523,927 | 96,218 | 427,708 | 342,254 | 54,849 | 33,490 | 496 |
| 7. 1990 | 536,387 | 63,618 | 472,769 | 353,943 | 34,978 | 31,819 | 449 |
| 8. 1991 | 586,500 | 59,306 | 527,195 | 280,657 | 28,377 | 24,540 | 703 |
| 9. 1992 | 546,403 | 49,741 | 496,661 | 213,613 | 17,123 | 14,130 | 430 |
|10. 1993 | 533,280 | 38,265 | 495,015 | 143,778 | 9,003 | 6,282 | 93 |
|11. 1994 | 598,177 | 73,751 | 524,426 | 66,682 | 2,313 | 1,887 | 12 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | 2,461,407 | 424,893 | 226,408 | 5,495 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
--------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | (113)| 39 | 2,739 | X X X X |
| 2. 1985 | 2,172 | 7,473 | 174,310 | 76,217 |
| 3. 1986 | 1,559 | 8,939 | 210,901 | 95,956 |
| 4. 1987 | 1,986 | 11,446 | 259,351 | 108,080 |
| 5. 1988 | 3,196 | 12,211 | 285,983 | 108,957 |
| 6. 1989 | 2,627 | 13,279 | 333,679 | 107,189 |
| 7. 1990 | 3,236 | 13,577 | 363,913 | 99,548 |
| 8. 1991 | 3,544 | 14,106 | 290,224 | 91,092 |
| 9. 1992 | 2,229 | 14,782 | 224,973 | 76,226 |
|10. 1993 | 1,615 | 18,916 | 159,880 | 70,501 |
|11. 1994 | 949 | 15,683 | 81,927 | 63,654 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 23,000 | 130,451 | 2,387,879 | X X X X |
<------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL - (CONTINUED)
<CAPTION>
!-------------#--------------------------------------------------------#--------------------------------------------!
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 23,529 | 14 | 11,238 | 8 | 0 | 0 | 2,029 |
| 2. 1985 | 12,621 | 40 | 3,401 | 8 | 0 | 0 | 2,175 |
| 3. 1986 | 25,067 | 414 | 14,720 | 331 | 0 | 0 | 3,853 |
| 4. 1987 | 32,422 | 1,038 | 5,539 | 372 | 0 | 0 | 5,990 |
| 5. 1988 | 49,759 | 1,495 | 10,599 | 713 | 0 | 0 | 6,075 |
| 6. 1989 | 46,532 | 2,714 | 16,414 | 1,456 | 0 | 0 | 12,437 |
| 7. 1990 | 49,865 | 4,118 | 39,553 | 604 | 0 | 0 | 17,489 |
| 8. 1991 | 75,815 | 8,164 | 91,235 | 1,521 | 0 | 0 | 22,407 |
| 9. 1992 | 83,289 | 4,480 | 135,723 | 10,523 | 0 | 0 | 30,311 |
|10. 1993 | 106,380 | 5,342 | 162,208 | 14,145 | 0 | 0 | 36,098 |
|11. 1994 | 95,964 | 7,080 | 295,126 | 33,562 | 0 | 0 | 39,209 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 601,243 | 34,898 | 785,756 | 63,243 | 0 | 0 | 178,073 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->--------------<
<CAPTION>
!----------------------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 0 | 45 | 126 | 36,901 | 261 |
| 2. 1985 | 0 | 42 | 32 | 18,180 | 200 |
| 3. 1986 | 0 | 22 | 59 | 42,954 | 366 |
| 4. 1987 | 0 | 14 | 625 | 43,166 | 426 |
| 5. 1988 | 0 | 57 | 702 | 64,927 | 590 |
| 6. 1989 | 2 | 146 | 901 | 72,113 | 701 |
| 7. 1990 | 0 | 418 | 597 | 102,782 | 1,007 |
| 8. 1991 | 0 | 821 | 1,018 | 180,790 | 1,530 |
| 9. 1992 | 353 | 1,022 | 690 | 234,657 | 2,497 |
|10. 1993 | 761 | 1,263 | 731 | 285,169 | 4,663 |
|11. 1994 | 1,371 | 2,046 | 2,064 | 390,350 | 14,098 |
|-------------|--------------|--------------|--------------|--------------|-------------|
|12. Totals | 2,487 | 5,898 | 7,545 | 1,471,990 | 26,339 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL - (CONTINUED)
<CAPTION>
--------------#-----------------------------------------#--------------------------------------------#--------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 222,349 | 29,860 | 192,490 | 100.2 | 76.2 | 105.4 | 0 |
| 3. 1986 | 320,420 | 66,564 | 253,855 | 79.4 | 69.8 | 82.4 | 0 |
| 4. 1987 | 400,256 | 97,739 | 302,518 | 78.7 | 69.9 | 82.1 | 0 |
| 5. 1988 | 442,722 | 91,812 | 350,910 | 84.7 | 71.8 | 88.9 | 0 |
| 6. 1989 | 465,308 | 59,516 | 405,791 | 88.8 | 61.9 | 94.9 | 0 |
| 7. 1990 | 506,843 | 40,148 | 466,695 | 94.5 | 63.1 | 98.7 | 0 |
| 8. 1991 | 509,778 | 38,764 | 471,014 | 86.9 | 65.4 | 89.3 | 0 |
| 9. 1992 | 492,539 | 32,908 | 459,630 | 90.1 | 66.2 | 92.5 | 0 |
|10. 1993 | 474,393 | 29,344 | 445,049 | 89.0 | 76.7 | 89.9 | 0 |
|11. 1994 | 516,615 | 44,338 | 472,277 | 86.4 | 60.1 | 90.1 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
|------------->------------->------------->------------->-------------->-------------->-------------->--------------|
<CAPTION>
-----------------------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| #--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 34,746 | 2,155 |
| 2. 1985 | 0 | 0.0 | 15,973 | 2,207 |
| 3. 1986 | 0 | 0.0 | 39,042 | 3,912 |
| 4. 1987 | 0 | 0.0 | 36,551 | 6,615 |
| 5. 1988 | 0 | 0.0 | 58,150 | 6,777 |
| 6. 1989 | 0 | 0.0 | 58,777 | 13,336 |
| 7. 1990 | 0 | 0.0 | 84,696 | 18,086 |
| 8. 1991 | 0 | 0.0 | 157,365 | 23,425 |
| 9. 1992 | 0 | 0.0 | 204,009 | 30,648 |
|10. 1993 | 0 | 0.0 | 249,101 | 36,068 |
|11. 1994 | 0 | 0.0 | 350,448 | 39,902 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | X X X X | 1,288,859 | 183,131 |
| | | | | |
|------------->-------------->-------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1D - WORKERS' COMPENSATION
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#-----------------------------------------------------------!
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 39,026 | 5,793 | 2,173 | 13 |
| 2. 1985 | 583,337 | 68,397 | 514,940 | 497,046 | 48,824 | 26,918 | 280 |
| 3. 1986 | 965,342 | 95,101 | 870,241 | 678,919 | 87,131 | 35,371 | 133 |
| 4. 1987 | 1,162,512 | 134,836 | 1,027,676 | 883,906 | 133,276 | 44,945 | 110 |
| 5. 1988 | 1,494,062 | 111,679 | 1,382,383 | 1,113,142 | 97,283 | 51,378 | 153 |
| 6. 1989 | 1,619,759 | 57,453 | 1,562,305 | 1,319,122 | 25,021 | 57,396 | 105 |
| 7. 1990 | 2,256,388 | 10,031 | 2,246,356 | 1,481,743 | 5,578 | 64,174 | 304 |
| 8. 1991 | 2,446,769 | 22,557 | 2,424,211 | 1,148,452 | 6,032 | 55,683 | 286 |
| 9. 1992 | 2,158,130 | 17,929 | 2,140,202 | 785,877 | 7,562 | 34,714 | 207 |
|10. 1993 | 1,856,803 | 20,230 | 1,836,573 | 448,414 | 7,150 | 18,823 | 199 |
|11. 1994 | 1,847,065 | 13,558 | 1,833,507 | 159,234 | 1,428 | 10,215 | 67 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | 8,554,881 | 425,078 | 401,791 | 1,857 |
<------------->------------->------------->------------->-------------->-------------->-------------->--------------<
<CAPTION>
!----------------------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 265 | 976 | 36,369 | X X X X |
| 2. 1985 | 12,351 | 39,044 | 513,905 | 240,051 |
| 3. 1986 | 12,188 | 49,330 | 676,355 | 289,724 |
| 4. 1987 | 19,562 | 51,422 | 846,886 | 311,268 |
| 5. 1988 | 22,174 | 61,877 | 1,128,961 | 342,556 |
| 6. 1989 | 23,914 | 78,300 | 1,429,692 | 333,608 |
| 7. 1990 | 23,487 | 86,061 | 1,626,095 | 350,006 |
| 8. 1991 | 15,010 | 85,033 | 1,282,850 | 319,088 |
| 9. 1992 | 7,271 | 75,984 | 888,807 | 237,830 |
|10. 1993 | 2,246 | 56,887 | 516,776 | 185,681 |
|11. 1994 | 299 | 45,691 | 213,645 | 157,511 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 138,766 | 630,605 | 9,160,342 | X X X X |
<------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1D - WORKERS' COMPENSATION - (CONTINUED)
<CAPTION>
!-------------#--------------------------------------------------------#--------------------------------------------!
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 279,390 | 57,342 | 78,075 | 8,498 | 0 | 0 | 8,669 |
| 2. 1985 | 52,601 | 10,435 | 9,209 | 3,262 | 0 | 0 | 3,978 |
| 3. 1986 | 78,956 | 11,410 | 13,330 | 4,364 | 0 | 0 | 6,840 |
| 4. 1987 | 110,216 | 22,426 | 23,781 | 8,787 | 0 | 0 | 12,258 |
| 5. 1988 | 157,057 | 15,979 | 37,609 | 9,690 | 0 | 0 | 16,813 |
| 6. 1989 | 186,957 | 5,196 | 67,540 | 4,847 | 0 | 0 | 15,715 |
| 7. 1990 | 256,773 | 4,690 | 103,245 | 7,426 | 0 | 0 | 32,807 |
| 8. 1991 | 303,107 | 797 | 363,218 | 6,683 | 0 | 0 | 45,127 |
| 9. 1992 | 300,975 | 4,572 | 450,817 | 10,822 | 0 | 0 | 60,341 |
|10. 1993 | 299,047 | 3,917 | 587,919 | 8,411 | 0 | 0 | 74,915 |
|11. 1994 | 250,317 | 1,854 | 873,334 | 5,944 | 0 | 0 | 52,875 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 2,275,397 | 138,618 | 2,608,077 | 78,734 | 0 | 0 | 330,338 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->--------------|
<CAPTION>
!----------------------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 568 | 16,785 | 5,930 | 305,655 | 5,141 |
| 2. 1985 | 501 | 3,130 | 1,475 | 53,065 | 1,265 |
| 3. 1986 | 761 | 3,419 | 2,289 | 84,879 | 1,611 |
| 4. 1987 | 2,727 | 6,351 | 3,810 | 116,125 | 1,785 |
| 5. 1988 | 1,939 | 10,165 | 4,629 | 188,501 | 2,691 |
| 6. 1989 | 186 | 15,895 | 4,761 | 264,745 | 3,835 |
| 7. 1990 | 0 | 26,077 | 7,497 | 388,206 | 6,017 |
| 8. 1991 | 287 | 33,201 | 11,974 | 715,660 | 8,870 |
| 9. 1992 | 807 | 33,580 | 13,351 | 809,284 | 10,779 |
|10. 1993 | 1,434 | 30,524 | 15,125 | 963,244 | 12,417 |
|11. 1994 | 380 | 31,276 | 17,452 | 1,185,800 | 35,255 |
|-------------|--------------|--------------|--------------|--------------|-------------|
|12. Totals | 9,590 | 210,404 | 88,293 | 5,075,163 | 89,666 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1D - WORKERS' COMPENSATION - (CONTINUED)
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#--------------!
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 630,272 | 63,302 | 566,970 | 108.0 | 92.6 | 110.1 | 0 |
| 3. 1986 | 865,034 | 103,800 | 761,234 | 89.6 | 109.1 | 87.5 | 0 |
| 4. 1987 | 1,130,338 | 167,327 | 963,011 | 97.2 | 124.1 | 93.7 | 0 |
| 5. 1988 | 1,442,505 | 125,044 | 1,317,461 | 96.5 | 112.0 | 95.3 | 0 |
| 6. 1989 | 1,729,792 | 35,355 | 1,694,437 | 106.8 | 61.5 | 108.5 | 0 |
| 7. 1990 | 2,032,300 | 17,998 | 2,014,302 | 90.1 | 179.4 | 89.7 | 0 |
| 8. 1991 | 2,012,594 | 14,085 | 1,998,509 | 82.3 | 62.4 | 82.4 | 0 |
| 9. 1992 | 1,722,060 | 23,969 | 1,698,091 | 79.8 | 133.7 | 79.3 | 0 |
|10. 1993 | 1,501,131 | 21,111 | 1,480,020 | 80.8 | 104.4 | 80.6 | 0 |
|11. 1994 | 1,409,118 | 9,673 | 1,399,446 | 76.3 | 71.3 | 76.3 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->--------------|
<CAPTION>
!----------------------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 291,624 | 14,031 |
| 2. 1985 | 0 | 0.0 | 48,113 | 4,952 |
| 3. 1986 | 0 | 0.0 | 76,511 | 8,368 |
| 4. 1987 | 0 | 0.0 | 102,784 | 13,341 |
| 5. 1988 | 0 | 0.0 | 168,998 | 19,503 |
| 6. 1989 | 0 | 0.0 | 244,455 | 20,290 |
| 7. 1990 | 0 | 0.0 | 347,902 | 40,304 |
| 8. 1991 | 0 | 0.0 | 658,846 | 56,814 |
| 9. 1992 | 0 | 0.0 | 736,399 | 72,885 |
|10. 1993 | 0 | 0.0 | 874,638 | 88,606 |
|11. 1994 | 0 | 0.0 | 1,115,853 | 69,947 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | X X X X | 4,666,122 | 409,041 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1E - COMMERCIAL MULTIPLE PERIL
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 13,354 | (56)| 7,157 | 1 |
| 2. 1985 | 314,626 | 21,298 | 293,328 | 178,352 | 3,256 | 30,320 | 423 |
| 3. 1986 | 457,243 | 18,707 | 438,536 | 154,724 | 2,507 | 37,499 | 112 |
| 4. 1987 | 542,854 | 16,282 | 526,572 | 185,004 | 2,696 | 39,486 | 129 |
| 5. 1988 | 596,503 | 15,753 | 580,749 | 220,659 | 2,326 | 46,744 | 86 |
| 6. 1989 | 658,911 | 22,097 | 636,814 | 356,508 | 36,592 | 55,674 | 2,267 |
| 7. 1990 | 721,512 | 23,907 | 697,605 | 307,520 | 5,095 | 57,818 | 369 |
| 8. 1991 | 743,264 | 19,148 | 724,116 | 322,388 | 6,021 | 48,597 | 140 |
| 9. 1992 | 722,128 | 23,724 | 698,403 | 369,428 | 35,158 | 30,029 | 435 |
|10. 1993 | 748,413 | 20,392 | 728,021 | 253,576 | 17,954 | 13,059 | 220 |
|11. 1994 | 835,952 | 24,065 | 811,887 | 188,612 | 984 | 5,317 | 34 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | 2,550,125 | 112,532 | 371,701 | 4,217 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 217 | 567 | 21,133 | X X X X |
| 2. 1985 | 3,833 | 4,773 | 209,767 | 56,351 |
| 3. 1986 | 6,709 | 6,871 | 196,475 | 51,877 |
| 4. 1987 | 5,278 | 13,101 | 234,766 | 52,734 |
| 5. 1988 | 5,852 | 16,595 | 281,586 | 63,169 |
| 6. 1989 | 7,638 | 21,169 | 394,492 | 83,647 |
| 7. 1990 | 8,055 | 21,085 | 380,959 | 91,260 |
| 8. 1991 | 9,280 | 22,004 | 386,827 | 92,126 |
| 9. 1992 | 6,278 | 19,143 | 383,007 | 85,205 |
|10. 1993 | 3,261 | 26,889 | 275,351 | 81,409 |
|11. 1994 | 2,214 | 23,435 | 216,346 | 72,820 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 58,614 | 175,632 | 2,980,709 | X X X X |
<------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1E - COMMERCIAL MULTIPLE PERIL - (CONTINUED)
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 33,171 | 452 | 3,962 | 747 | 0 | 0 | 683 |
| 2. 1985 | 4,994 | 0 | 2,540 | 0 | 0 | 0 | 190 |
| 3. 1986 | 9,525 | 0 | 4,132 | 364 | 0 | 0 | 536 |
| 4. 1987 | 18,494 | 0 | 2,973 | 203 | 0 | 0 | 233 |
| 5. 1988 | 20,727 | 0 | 11,706 | 0 | 0 | 0 | 1,300 |
| 6. 1989 | 39,490 | 6 | 13,880 | 0 | 0 | 0 | 2,282 |
| 7. 1990 | 59,629 | 181 | 26,141 | 1,130 | 0 | 0 | 10,024 |
| 8. 1991 | 69,659 | 25 | 30,899 | 1,356 | 0 | 0 | 17,344 |
| 9. 1992 | 79,828 | 402 | 74,350 | 7,956 | 0 | 0 | 42,762 |
|10. 1993 | 81,490 | 700 | 189,010 | 5,130 | 0 | 0 | 66,692 |
|11. 1994 | 115,757 | 546 | 263,183 | 6,959 | 0 | 0 | 100,343 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 532,764 | 2,310 | 622,776 | 23,845 | 0 | 0 | 242,389 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 134 | 628 | 738 | 37,221 | 1,313 |
| 2. 1985 | 0 | 174 | 95 | 7,819 | 116 |
| 3. 1986 | 9 | 287 | 156 | 13,976 | 305 |
| 4. 1987 | 8 | 283 | 277 | 21,766 | 374 |
| 5. 1988 | 0 | 313 | 277 | 34,010 | 469 |
| 6. 1989 | 0 | 1,064 | 616 | 56,263 | 937 |
| 7. 1990 | 23 | 2,376 | 1,073 | 95,533 | 1,534 |
| 8. 1991 | 40 | 5,085 | 1,800 | 118,282 | 2,401 |
| 9. 1992 | 187 | 6,584 | 2,836 | 191,232 | 3,178 |
|10. 1993 | 377 | 10,567 | 3,948 | 334,933 | 4,786 |
|11. 1994 | 267 | 13,386 | 5,355 | 476,866 | 13,571 |
|-------------|--------------|--------------|--------------|--------------|-------------|
|12. Totals | 1,045 | 40,747 | 17,171 | 1,387,900 | 28,984 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1E - COMMERCIAL MULTIPLE PERIL - (CONTINUED)
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 221,264 | 3,679 | 217,585 | 70.3 | 17.3 | 74.2 | 0 |
| 3. 1986 | 213,443 | 2,992 | 210,452 | 46.7 | 16.0 | 48.0 | 0 |
| 4. 1987 | 259,568 | 3,036 | 256,531 | 47.8 | 18.6 | 48.7 | 0 |
| 5. 1988 | 318,008 | 2,412 | 315,596 | 53.3 | 15.3 | 54.3 | 0 |
| 6. 1989 | 489,619 | 38,864 | 450,755 | 74.3 | 175.9 | 70.8 | 0 |
| 7. 1990 | 483,291 | 6,798 | 476,492 | 67.0 | 28.4 | 68.3 | 0 |
| 8. 1991 | 512,691 | 7,582 | 505,109 | 69.0 | 39.6 | 69.8 | 0 |
| 9. 1992 | 618,376 | 44,138 | 574,239 | 85.6 | 186.0 | 82.2 | 0 |
|10. 1993 | 634,664 | 24,381 | 610,284 | 84.8 | 119.6 | 83.8 | 0 |
|11. 1994 | 702,002 | 8,790 | 693,212 | 84.0 | 36.5 | 85.4 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 35,934 | 1,287 |
| 2. 1985 | 0 | 0.0 | 7,534 | 285 |
| 3. 1986 | 0 | 0.0 | 13,293 | 683 |
| 4. 1987 | 0 | 0.0 | 21,264 | 502 |
| 5. 1988 | 0 | 0.0 | 32,433 | 1,577 |
| 6. 1989 | 0 | 0.0 | 53,365 | 2,898 |
| 7. 1990 | 0 | 0.0 | 84,459 | 11,074 |
| 8. 1991 | 0 | 0.0 | 99,178 | 19,104 |
| 9. 1992 | 0 | 0.0 | 145,821 | 45,411 |
|10. 1993 | 0 | 0.0 | 264,670 | 70,263 |
|11. 1994 | 0 | 0.0 | 371,435 | 105,431 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | X X X X | 1,129,385 | 258,515 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 14,621 | 5,623 | 2,777 | (43)|
| 2. 1985 | 142,103 | 19,829 | 122,274 | 73,535 | 2,812 | 31,788 | (14)|
| 3. 1986 | 195,700 | 18,078 | 177,622 | 72,663 | 2,767 | 28,421 | 261 |
| 4. 1987 | 151,511 | 10,257 | 141,254 | 31,192 | 5,599 | 12,847 | 479 |
| 5. 1988 | 47,559 | 10,725 | 36,834 | 11,171 | 1,868 | 5,789 | 899 |
| 6. 1989 | 24,074 | 10,451 | 13,624 | 7,595 | 5,248 | 4,748 | 1,356 |
| 7. 1990 | 38,788 | 10,291 | 28,497 | 13,841 | 1,895 | 3,928 | 857 |
| 8. 1991 | 37,194 | 11,325 | 25,869 | 7,427 | 2,123 | 2,532 | 440 |
| 9. 1992 | 34,442 | 13,049 | 21,393 | 7,127 | 818 | 1,467 | 265 |
|10. 1993 | 40,982 | 21,238 | 19,745 | 723 | (1,092)| 219 | 49 |
|11. 1994 | 53,783 | 23,628 | 30,154 | 6 | 2 | 6 | 1 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | 239,902 | 27,661 | 94,521 | 4,551 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 1,457 | 135 | 11,953 | X X X X |
| 2. 1985 | 4,142 | 3,041 | 105,566 | 7,442 |
| 3. 1986 | 1,887 | 3,033 | 101,089 | 6,743 |
| 4. 1987 | 575 | 1,569 | 39,529 | 3,364 |
| 5. 1988 | 184 | 1,918 | 16,111 | 1,671 |
| 6. 1989 | 23 | 709 | 6,448 | 1,763 |
| 7. 1990 | 38 | 630 | 15,647 | 2,084 |
| 8. 1991 | 10 | 507 | 7,903 | 1,571 |
| 9. 1992 | 54 | 568 | 8,080 | 1,400 |
|10. 1993 | 0 | 2,459 | 4,445 | 770 |
|11. 1994 | 0 | 4,661 | 4,670 | 286 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 8,371 | 19,231 | 321,441 | X X X X |
<------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE-(CONTINUED)
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 74,194 | 10,896 | 57,345 | 24,341 | 0 | 0 | 11,843 |
| 2. 1985 | 14,143 | 0 | 10,279 | 1,771 | 0 | 0 | 4,937 |
| 3. 1986 | 15,731 | 250 | 17,973 | 2,996 | 0 | 0 | 4,480 |
| 4. 1987 | 7,926 | 845 | 12,562 | 735 | 0 | 0 | 4,922 |
| 5. 1988 | 15,376 | 1,129 | 26,432 | 280 | 0 | 0 | 2,609 |
| 6. 1989 | 17,391 | 2,195 | 10,454 | 0 | 0 | 0 | 3,274 |
| 7. 1990 | 22,075 | 2,329 | 21,314 | 2,335 | 0 | 0 | 4,099 |
| 8. 1991 | 10,500 | 3,005 | 15,572 | 3,662 | 0 | 0 | 5,103 |
| 9. 1992 | 7,035 | 973 | 27,585 | 11,121 | 0 | 0 | 6,272 |
|10. 1993 | 5,623 | 2,039 | 24,176 | 8,326 | 0 | 0 | 6,743 |
|11. 1994 | 604 | 98 | 31,005 | 12,675 | 0 | 0 | 7,173 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 190,599 | 23,759 | 254,697 | 68,242 | 0 | 0 | 61,455 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 1,569 | 2,321 | 853 | 107,429 | 684 |
| 2. 1985 | 336 | 488 | 255 | 27,507 | 189 |
| 3. 1986 | 410 | 1,204 | 360 | 34,888 | 175 |
| 4. 1987 | 280 | 459 | 226 | 23,776 | 88 |
| 5. 1988 | 634 | 523 | 105 | 42,479 | 86 |
| 6. 1989 | 1,273 | 617 | 117 | 27,768 | 103 |
| 7. 1990 | 1,698 | 535 | 144 | 41,270 | 154 |
| 8. 1991 | 2,486 | 189 | 214 | 22,236 | 261 |
| 9. 1992 | 2,127 | 346 | 284 | 26,955 | 285 |
|10. 1993 | 2,939 | 279 | 242 | 23,480 | 193 |
|11. 1994 | 3,070 | 231 | 281 | 23,220 | 136 |
|-------------|--------------|--------------|--------------|--------------|-------------|
|12. Totals | 16,822 | 7,192 | 3,081 | 401,009 | 2,354 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE-(CONTINUED)
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 137,979 | 4,905 | 133,073 | 97.1 | 24.7 | 108.8 | 0 |
| 3. 1986 | 142,661 | 6,684 | 135,977 | 72.9 | 37.0 | 76.6 | 0 |
| 4. 1987 | 71,244 | 7,938 | 63,306 | 47.0 | 77.4 | 44.8 | 0 |
| 5. 1988 | 63,400 | 4,811 | 58,590 | 133.3 | 44.9 | 159.1 | 0 |
| 6. 1989 | 44,288 | 10,072 | 34,216 | 184.0 | 96.4 | 251.1 | 0 |
| 7. 1990 | 66,031 | 9,114 | 56,918 | 170.2 | 88.6 | 199.7 | 0 |
| 8. 1991 | 41,854 | 11,716 | 30,138 | 112.5 | 103.5 | 116.5 | 0 |
| 9. 1992 | 50,338 | 15,303 | 35,035 | 146.2 | 117.3 | 163.8 | 0 |
|10. 1993 | 40,186 | 12,261 | 27,925 | 98.1 | 57.7 | 141.4 | 0 |
|11. 1994 | 43,736 | 15,846 | 27,890 | 81.3 | 67.1 | 92.5 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 96,302 | 11,127 |
| 2. 1985 | 0 | 0.0 | 22,651 | 4,856 |
| 3. 1986 | 0 | 0.0 | 30,458 | 4,430 |
| 4. 1987 | 0 | 0.0 | 18,908 | 4,868 |
| 5. 1988 | 0 | 0.0 | 40,399 | 2,080 |
| 6. 1989 | 0 | 0.0 | 25,650 | 2,118 |
| 7. 1990 | 0 | 0.0 | 38,725 | 2,545 |
| 8. 1991 | 0 | 0.0 | 19,405 | 2,831 |
| 9. 1992 | 0 | 0.0 | 22,526 | 4,429 |
|10. 1993 | 0 | 0.0 | 19,434 | 4,046 |
|11. 1994 | 0 | 0.0 | 18,836 | 4,384 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | X X X X | 353,295 | 47,714 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 77,440 | 9,388 | 68,052 | 33,224 | 1,245 | 8,455 | 76 |
| 5. 1988 | 193,675 | 17,218 | 176,457 | 37,032 | 5,836 | 17,557 | 569 |
| 6. 1989 | 238,793 | 20,745 | 218,048 | 60,906 | 6,112 | 25,001 | 719 |
| 7. 1990 | 243,443 | 19,349 | 224,094 | 61,161 | 6,498 | 26,872 | 870 |
| 8. 1991 | 213,034 | 17,383 | 195,652 | 62,582 | 761 | 24,365 | 161 |
| 9. 1992 | 206,763 | 17,799 | 188,965 | 68,012 | 2,269 | 22,839 | 324 |
|10. 1993 | 221,483 | 16,868 | 204,615 | 33,049 | 2,691 | 10,539 | 37 |
|11. 1994 | 246,387 | 21,214 | 225,173 | 2,592 | 274 | 1,597 | 7 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | 358,560 | 25,686 | 137,225 | 2,763 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | X X X X |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 135 | 2,341 | 42,699 | 1,498 |
| 5. 1988 | 368 | 2,848 | 51,032 | 3,164 |
| 6. 1989 | 789 | 4,535 | 83,611 | 4,607 |
| 7. 1990 | 330 | 5,047 | 85,712 | 4,817 |
| 8. 1991 | 189 | 4,599 | 90,624 | 5,080 |
| 9. 1992 | 582 | 4,548 | 92,806 | 6,219 |
|10. 1993 | 59 | 3,527 | 44,389 | 6,783 |
|11. 1994 | 19 | 1,832 | 5,740 | 7,567 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 2,472 | 29,277 | 496,613 | X X X X |
<------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE-(CONTINUED)
<CAPTION>
!-------------#--------------------------------------------------------#--------------------------------------------!
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 4,893 | 0 | 4,070 | 210 | 0 | 0 | 1,295 |
| 5. 1988 | 12,674 | 1,105 | 10,718 | 1,532 | 0 | 0 | 4,564 |
| 6. 1989 | 24,773 | 1,346 | 20,388 | 5,112 | 0 | 0 | 7,136 |
| 7. 1990 | 19,233 | 240 | 25,560 | 7,312 | 0 | 0 | 13,641 |
| 8. 1991 | 46,174 | 913 | 36,730 | 10,901 | 0 | 0 | 16,383 |
| 9. 1992 | 56,065 | 2,212 | 29,989 | 7,057 | 0 | 0 | 20,189 |
|10. 1993 | 61,269 | 48 | 86,785 | 10,106 | 0 | 0 | 33,982 |
|11. 1994 | 38,243 | 158 | 161,474 | 12,239 | 0 | 0 | 47,102 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 263,324 | 6,021 | 375,714 | 54,469 | 0 | 0 | 144,292 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->--------------<
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 15 | 213 | 77 | 10,110 | 6 |
| 5. 1988 | 346 | 268 | 229 | 25,202 | 29 |
| 6. 1989 | 1,083 | 932 | 427 | 45,183 | 84 |
| 7. 1990 | 1,272 | 514 | 598 | 50,208 | 158 |
| 8. 1991 | 2,514 | 692 | 1,099 | 86,058 | 351 |
| 9. 1992 | 2,290 | 1,180 | 1,266 | 95,950 | 729 |
|10. 1993 | 2,660 | 1,980 | 2,284 | 171,506 | 1,405 |
|11. 1994 | 2,626 | 2,292 | 3,009 | 234,805 | 3,996 |
|-------------|--------------|--------------|--------------|--------------|-------------|
|12. Totals | 12,806 | 8,071 | 8,989 | 719,023 | 6,758 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE-(CONTINUED)
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
| 4. 1987 | 54,355 | 1,546 | 52,809 | 70.2 | 16.5 | 77.6 | 0 |
| 5. 1988 | 85,622 | 9,388 | 76,235 | 44.2 | 54.5 | 43.2 | 0 |
| 6. 1989 | 143,166 | 14,372 | 128,794 | 60.0 | 69.3 | 59.1 | 0 |
| 7. 1990 | 152,113 | 16,193 | 135,920 | 62.5 | 83.7 | 60.7 | 0 |
| 8. 1991 | 191,932 | 15,250 | 176,682 | 90.1 | 87.7 | 90.3 | 0 |
| 9. 1992 | 202,908 | 14,152 | 188,756 | 98.1 | 79.5 | 99.9 | 0 |
|10. 1993 | 231,435 | 15,541 | 215,895 | 104.5 | 92.1 | 105.5 | 0 |
|11. 1994 | 255,849 | 15,304 | 240,545 | 103.8 | 72.1 | 106.8 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 0 | 0 |
| 2. 1985 | 0 | 0.0 | 0 | 0 |
| 3. 1986 | 0 | 0.0 | 0 | 0 |
| 4. 1987 | 0 | 0.0 | 8,753 | 1,357 |
| 5. 1988 | 0 | 0.0 | 20,755 | 4,447 |
| 6. 1989 | 0 | 0.0 | 38,703 | 6,480 |
| 7. 1990 | 0 | 0.0 | 37,241 | 12,967 |
| 8. 1991 | 0 | 0.0 | 71,090 | 14,968 |
| 9. 1992 | 0 | 0.0 | 76,785 | 19,165 |
|10. 1993 | 0 | 0.0 | 137,900 | 33,606 |
|11. 1994 | 0 | 0.0 | 187,320 | 47,485 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | X X X X | 578,548 | 140,475 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1G - SPECIAL LIABILITY (OCEAN MARINE,
AIRCRAFT (ALL PERILS), BOILER AND MACHINERY)
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments|
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 211 | 5 | 90 | 64 |
| 2. 1985 | 29,949 | 20,650 | 9,299 | 13,131 | 9,381 | 1,516 | 837 |
| 3. 1986 | 46,208 | 29,411 | 16,797 | 20,816 | 9,788 | 1,545 | 923 |
| 4. 1987 | 59,993 | 33,400 | 26,592 | 17,747 | 9,843 | 1,698 | 1,115 |
| 5. 1988 | 46,236 | 25,138 | 21,097 | 11,548 | 2,918 | 3,246 | 2,471 |
| 6. 1989 | 37,990 | 19,020 | 18,970 | 28,339 | 17,485 | 2,608 | 1,740 |
| 7. 1990 | 25,046 | 15,403 | 9,643 | 26,389 | 14,770 | 2,875 | 2,040 |
| 8. 1991 | 28,231 | 12,396 | 15,835 | 27,312 | 17,211 | 2,035 | 1,592 |
| 9. 1992 | 29,224 | 13,155 | 16,069 | 21,543 | 12,735 | 1,730 | 1,070 |
|10. 1993 | 38,887 | 18,715 | 20,173 | 21,444 | 12,420 | 957 | 586 |
|11. 1994 | 58,913 | 30,025 | 28,888 | 11,332 | 8,056 | 416 | 304 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | 199,812 | 114,614 | 18,717 | 12,743 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 232 | X X X X |
| 2. 1985 | 71 | 91 | 4,519 | X X X X |
| 3. 1986 | 59 | 136 | 11,786 | X X X X |
| 4. 1987 | 36 | 222 | 8,710 | X X X X |
| 5. 1988 | 114 | 157 | 9,562 | X X X X |
| 6. 1989 | 86 | 164 | 11,886 | X X X X |
| 7. 1990 | 137 | 209 | 12,663 | X X X X |
| 8. 1991 | 102 | 191 | 10,735 | X X X X |
| 9. 1992 | 105 | 232 | 9,701 | X X X X |
|10. 1993 | 36 | 341 | 9,736 | X X X X |
|11. 1994 | 15 | 365 | 3,752 | X X X X |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 760 | 2,109 | 93,281 | X X X X |
<------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1G - SPECIAL LIABILITY (OCEAN MARINE,
AIRCRAFT (ALL PERILS), BOILER AND MACHINERY) - (CONTINUED)
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 1,194 | 726 | 409 | 399 | 0 | 0 | 0 |
| 2. 1985 | 129 | 56 | 700 | 700 | 0 | 0 | 0 |
| 3. 1986 | 106 | 64 | 2,075 | 2,075 | 0 | 0 | 1 |
| 4. 1987 | 309 | 155 | 3,683 | 3,683 | 0 | 0 | 6 |
| 5. 1988 | 1,436 | 106 | 13,706 | 13,485 | 0 | 0 | 9 |
| 6. 1989 | 1,125 | 591 | 3,966 | 3,780 | 0 | 0 | 57 |
| 7. 1990 | 2,601 | 1,968 | 6,715 | 6,495 | 0 | 0 | 8 |
| 8. 1991 | 977 | 372 | 10,637 | 10,361 | 0 | 0 | 303 |
| 9. 1992 | 2,464 | 768 | 4,145 | 3,808 | 0 | 0 | 607 |
|10. 1993 | 6,346 | 2,640 | 7,419 | 4,917 | 0 | 0 | 2,115 |
|11. 1994 | 28,870 | 23,243 | 28,387 | 650 | 0 | 0 | 182 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 45,558 | 30,691 | 81,842 | 50,353 | 0 | 0 | 3,288 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 0 | 0 | 0 | 478 | 74 |
| 2. 1985 | 0 | 0 | 0 | 73 | 14 |
| 3. 1986 | 0 | 0 | 0 | 43 | 11 |
| 4. 1987 | 0 | 0 | 0 | 160 | 17 |
| 5. 1988 | 0 | 0 | 0 | 1,560 | 35 |
| 6. 1989 | 0 | 2 | 0 | 777 | 55 |
| 7. 1990 | 0 | 9 | 0 | 861 | 66 |
| 8. 1991 | 0 | 15 | 1 | 1,185 | 64 |
| 9. 1992 | 120 | 34 | 6 | 2,526 | 87 |
|10. 1993 | 1,432 | 155 | 13 | 6,903 | 153 |
|11. 1994 | 63 | 525 | 32 | 33,515 | 183 |
|-------------|--------------|--------------|--------------|--------------|-------------|
|12. Totals | 1,615 | 740 | 52 | 48,081 | 759 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1G - SPECIAL LIABILITY (OCEAN MARINE,
AIRCRAFT (ALL PERILS), BOILER AND MACHINERY) - (CONTINUED)
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 15,567 | 10,975 | 4,592 | 52.0 | 53.1 | 49.4 | 0 |
| 3. 1986 | 24,679 | 12,850 | 11,829 | 53.4 | 43.7 | 70.4 | 0 |
| 4. 1987 | 23,666 | 14,797 | 8,869 | 39.4 | 44.3 | 33.4 | 0 |
| 5. 1988 | 30,103 | 18,981 | 11,122 | 65.1 | 75.5 | 52.7 | 0 |
| 6. 1989 | 36,259 | 23,596 | 12,663 | 95.4 | 124.1 | 66.8 | 0 |
| 7. 1990 | 38,797 | 25,273 | 13,524 | 154.9 | 164.1 | 140.2 | 0 |
| 8. 1991 | 41,456 | 29,537 | 11,920 | 146.8 | 238.3 | 75.3 | 0 |
| 9. 1992 | 30,728 | 18,501 | 12,227 | 105.1 | 140.6 | 76.1 | 0 |
|10. 1993 | 38,635 | 21,995 | 16,640 | 99.4 | 117.5 | 82.5 | 0 |
|11. 1994 | 69,583 | 32,316 | 37,267 | 118.1 | 107.6 | 129.0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 478 | 0 |
| 2. 1985 | 0 | 0.0 | 73 | 0 |
| 3. 1986 | 0 | 0.0 | 42 | 1 |
| 4. 1987 | 0 | 0.0 | 154 | 6 |
| 5. 1988 | 0 | 0.0 | 1,551 | 9 |
| 6. 1989 | 0 | 0.0 | 720 | 57 |
| 7. 1990 | 0 | 0.0 | 853 | 8 |
| 8. 1991 | 0 | 0.0 | 881 | 304 |
| 9. 1992 | 0 | 0.0 | 2,033 | 493 |
|10. 1993 | 0 | 0.0 | 6,207 | 696 |
|11. 1994 | 0 | 0.0 | 33,364 | 151 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | X X X X | 46,356 | 1,725 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments|
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 305,822 | 74,419 | 114,573 | 9,544 |
| 2. 1985 | 442,435 | 107,492 | 334,943 | 713,118 | 435,121 | 138,094 | 29,855 |
| 3. 1986 | 846,355 | 133,251 | 713,104 | 348,896 | 93,861 | 123,118 | 27,785 |
| 4. 1987 | 493,711 | 28,380 | 465,331 | 146,380 | 5,658 | 48,385 | 1,212 |
| 5. 1988 | 464,192 | 36,984 | 427,208 | 159,333 | 9,637 | 54,973 | 1,331 |
| 6. 1989 | 407,460 | 48,217 | 359,243 | 164,645 | 17,138 | 57,066 | 997 |
| 7. 1990 | 464,249 | 44,621 | 419,628 | 166,924 | 20,679 | 57,980 | 598 |
| 8. 1991 | 408,354 | 46,989 | 361,365 | 133,265 | 15,088 | 39,348 | 1,099 |
| 9. 1992 | 386,504 | 60,883 | 325,621 | 66,385 | 7,490 | 17,104 | 1,557 |
|10. 1993 | 417,556 | 72,961 | 344,595 | 50,096 | 7,677 | 5,282 | 434 |
|11. 1994 | 475,073 | 82,507 | 392,566 | 13,105 | 116 | 1,143 | 30 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | 2,267,969 | 686,885 | 657,068 | 74,441 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 4,443 | 6,725 | 343,158 | X X X X |
| 2. 1985 | 13,641 | 13,508 | 399,744 | 38,315 |
| 3. 1986 | 9,544 | 11,019 | 361,388 | 47,510 |
| 4. 1987 | 2,383 | 7,935 | 195,830 | 40,794 |
| 5. 1988 | 1,779 | 10,366 | 213,704 | 41,866 |
| 6. 1989 | 2,383 | 10,463 | 214,039 | 43,526 |
| 7. 1990 | 1,713 | 9,459 | 213,086 | 50,312 |
| 8. 1991 | 2,317 | 10,439 | 166,863 | 44,776 |
| 9. 1992 | 490 | 8,364 | 82,806 | 33,698 |
|10. 1993 | 286 | 15,001 | 62,268 | 32,381 |
|11. 1994 | 98 | 13,935 | 28,038 | 23,429 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 39,077 | 117,214 | 2,280,924 | X X X X |
<------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1H - SECTION 1 - OTHER LIABILITY - OCCURRENCE - (CONTINUED)
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 510,165 | 172,638 | 2,438,133 | 176,331 | 0 | 0 | 29,348 |
| 2. 1985 | 45,717 | 17,510 | 47,816 | 12,405 | 0 | 0 | 7,116 |
| 3. 1986 | 58,695 | 12,843 | 45,004 | 5,295 | 0 | 0 | 20,868 |
| 4. 1987 | 25,558 | 184 | 42,270 | 4,934 | 0 | 0 | 16,969 |
| 5. 1988 | 33,023 | 129 | 75,363 | 12,595 | 0 | 0 | 15,545 |
| 6. 1989 | 50,258 | 2,258 | 78,211 | 13,341 | 0 | 0 | 19,441 |
| 7. 1990 | 65,760 | 760 | 95,865 | 16,234 | 0 | 0 | 27,653 |
| 8. 1991 | 66,324 | 3,781 | 137,929 | 30,886 | 0 | 0 | 41,510 |
| 9. 1992 | 65,342 | 8,338 | 190,926 | 40,643 | 0 | 0 | 48,155 |
|10. 1993 | 60,596 | 8,884 | 219,368 | 43,460 | 0 | 0 | 53,039 |
|11. 1994 | 48,216 | 11,199 | 314,426 | 58,921 | 0 | 0 | 63,932 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 1,029,654 | 238,525 | 3,685,311 | 415,045 | 0 | 0 | 343,576 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 7,551 | 13,864 | 6,120 | 2,627,246 | 14,793 |
| 2. 1985 | 1,973 | 2,148 | 908 | 69,669 | 751 |
| 3. 1986 | 2,319 | 6,417 | 1,668 | 105,777 | 988 |
| 4. 1987 | 76 | 3,164 | 1,535 | 81,138 | 598 |
| 5. 1988 | 197 | 3,706 | 2,584 | 113,593 | 581 |
| 6. 1989 | 613 | 3,704 | 3,216 | 134,913 | 873 |
| 7. 1990 | 1,173 | 5,550 | 5,047 | 176,158 | 1,439 |
| 8. 1991 | 1,161 | 10,365 | 6,102 | 216,038 | 1,881 |
| 9. 1992 | 3,379 | 7,933 | 9,187 | 261,250 | 2,498 |
|10. 1993 | 3,684 | 7,357 | 11,338 | 288,313 | 3,551 |
|11. 1994 | 4,797 | 8,304 | 10,520 | 362,178 | 6,566 |
|-------------|--------------|--------------|--------------|--------------|-------------|
|12. Totals | 26,923 | 72,512 | 58,225 | 4,436,274 | 34,519 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1H - SECTION 1 - OTHER LIABILITY - OCCURRENCE - (CONTINUED)
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 966,278 | 496,864 | 469,413 | 218.4 | 462.2 | 140.1 | 0 |
| 3. 1986 | 609,269 | 142,103 | 467,165 | 72.0 | 106.6 | 65.5 | 0 |
| 4. 1987 | 289,032 | 12,064 | 276,968 | 58.5 | 42.5 | 59.5 | 0 |
| 5. 1988 | 351,187 | 23,890 | 327,297 | 75.7 | 64.6 | 76.6 | 0 |
| 6. 1989 | 383,300 | 34,348 | 348,953 | 94.1 | 71.2 | 97.1 | 0 |
| 7. 1990 | 428,688 | 39,444 | 389,244 | 92.3 | 88.4 | 92.8 | 0 |
| 8. 1991 | 434,916 | 52,015 | 382,901 | 106.5 | 110.7 | 106.0 | 0 |
| 9. 1992 | 405,463 | 61,407 | 344,057 | 104.9 | 100.9 | 105.7 | 0 |
|10. 1993 | 414,719 | 64,139 | 350,581 | 99.3 | 87.9 | 101.7 | 0 |
|11. 1994 | 465,278 | 75,062 | 390,216 | 97.9 | 91.0 | 99.4 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 2,599,329 | 27,917 |
| 2. 1985 | 0 | 0.0 | 63,618 | 6,051 |
| 3. 1986 | 0 | 0.0 | 85,560 | 20,217 |
| 4. 1987 | 0 | 0.0 | 62,710 | 18,428 |
| 5. 1988 | 0 | 0.0 | 95,661 | 17,932 |
| 6. 1989 | 0 | 0.0 | 112,869 | 22,044 |
| 7. 1990 | 0 | 0.0 | 144,631 | 31,527 |
| 8. 1991 | 0 | 0.0 | 169,587 | 46,451 |
| 9. 1992 | 0 | 0.0 | 207,287 | 53,963 |
|10. 1993 | 0 | 0.0 | 227,620 | 60,693 |
|11. 1994 | 0 | 0.0 | 292,523 | 69,655 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | X X X X | 4,061,396 | 374,878 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#-----------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 485,410 | 119,663 | 365,747 | 121,458 | 30,073 | 48,637 | 5,445 |
| 5. 1988 | 500,957 | 115,402 | 385,555 | 132,163 | 33,371 | 47,747 | 5,579 |
| 6. 1989 | 534,973 | 113,421 | 421,552 | 234,022 | 96,827 | 51,340 | 11,007 |
| 7. 1990 | 455,514 | 109,190 | 346,325 | 163,522 | 46,647 | 54,501 | 6,049 |
| 8. 1991 | 481,319 | 90,083 | 391,236 | 117,569 | 19,414 | 42,378 | 805 |
| 9. 1992 | 430,720 | 87,991 | 342,729 | 56,046 | 1,538 | 27,685 | 1,254 |
|10. 1993 | 431,502 | 103,639 | 327,863 | 29,259 | 829 | 13,575 | 621 |
|11. 1994 | 557,083 | 116,160 | 440,923 | 6,731 | 80 | 2,639 | 55 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | 860,770 | 228,779 | 288,502 | 30,816 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | X X X X |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 1,772 | 5,076 | 139,652 | 4,379 |
| 5. 1988 | 1,727 | 3,653 | 144,612 | 4,545 |
| 6. 1989 | 484 | 4,239 | 181,767 | 4,502 |
| 7. 1990 | 530 | 4,077 | 169,404 | 5,177 |
| 8. 1991 | 420 | 4,287 | 144,015 | 5,724 |
| 9. 1992 | 465 | 3,802 | 84,740 | 6,023 |
|10. 1993 | 132 | 2,599 | 43,983 | 6,998 |
|11. 1994 | 13 | 1,511 | 10,747 | 8,440 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 5,543 | 29,243 | 918,920 | X X X X |
<------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE - (CONTINUED)
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 13,296 | 2,798 | 18,780 | 8,225 | 0 | 0 | 6,919 |
| 5. 1988 | 27,481 | 7,437 | 28,786 | 15,491 | 0 | 0 | 14,107 |
| 6. 1989 | 30,740 | 10,773 | 34,483 | 19,272 | 0 | 0 | 23,187 |
| 7. 1990 | 72,191 | 24,337 | 74,907 | 43,875 | 0 | 0 | 33,542 |
| 8. 1991 | 78,447 | 18,183 | 95,597 | 53,538 | 0 | 0 | 42,521 |
| 9. 1992 | 75,252 | 2,471 | 124,484 | 64,413 | 0 | 0 | 51,218 |
|10. 1993 | 86,187 | 3,377 | 178,837 | 65,930 | 0 | 0 | 90,102 |
|11. 1994 | 54,146 | 242 | 321,100 | 98,433 | 0 | 0 | 122,853 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 437,740 | 69,617 | 876,974 | 369,177 | 0 | 0 | 384,449 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 2,203 | 2 | 472 | 26,241 | 59 |
| 5. 1988 | 3,527 | 68 | 492 | 44,411 | 149 |
| 6. 1989 | 10,404 | 49 | 723 | 48,685 | 184 |
| 7. 1990 | 10,520 | 31 | 1,348 | 103,255 | 434 |
| 8. 1991 | 15,042 | 159 | 1,641 | 131,443 | 729 |
| 9. 1992 | 12,944 | 273 | 2,122 | 173,247 | 1,202 |
|10. 1993 | 15,521 | 1,884 | 1,872 | 272,170 | 2,281 |
|11. 1994 | 15,610 | 3,127 | 1,849 | 385,663 | 5,347 |
|-------------|--------------|--------------|--------------|--------------|-------------|
|12. Totals | 85,771 | 5,593 | 10,519 | 1,185,117 | 10,385 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE - (CONTINUED)
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
| 4. 1987 | 214,638 | 48,744 | 165,894 | 44.2 | 40.7 | 45.4 | 0 |
| 5. 1988 | 254,428 | 65,405 | 189,023 | 50.8 | 56.7 | 49.0 | 0 |
| 6. 1989 | 378,734 | 148,283 | 230,451 | 70.8 | 130.7 | 54.7 | 0 |
| 7. 1990 | 404,088 | 131,429 | 272,660 | 88.7 | 120.4 | 78.7 | 0 |
| 8. 1991 | 382,440 | 106,982 | 275,458 | 79.5 | 118.8 | 70.4 | 0 |
| 9. 1992 | 340,608 | 82,621 | 257,988 | 79.1 | 93.9 | 75.3 | 0 |
|10. 1993 | 402,431 | 86,278 | 316,153 | 93.3 | 83.2 | 96.4 | 0 |
|11. 1994 | 510,829 | 114,419 | 396,410 | 91.7 | 98.5 | 89.9 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 0 | 0 |
| 2. 1985 | 0 | 0.0 | 0 | 0 |
| 3. 1986 | 0 | 0.0 | 0 | 0 |
| 4. 1987 | 0 | 0.0 | 21,053 | 5,188 |
| 5. 1988 | 0 | 0.0 | 33,339 | 11,072 |
| 6. 1989 | 0 | 0.0 | 35,179 | 13,506 |
| 7. 1990 | 0 | 0.0 | 78,885 | 24,370 |
| 8. 1991 | 0 | 0.0 | 102,323 | 29,120 |
| 9. 1992 | 0 | 0.0 | 132,851 | 40,396 |
|10. 1993 | 0 | 0.0 | 195,717 | 76,453 |
|11. 1994 | 0 | 0.0 | 276,571 | 109,092 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | X X X X | 875,920 | 309,197 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#-----------------------------------------------------------#
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 19,810 | 4,627 | 1,711 | 332 |
| 2. 1993 | 193,799 | 71,866 | 121,933 | 107,356 | 42,788 | 2,941 | 1,233 |
| 3. 1994 | 223,632 | 63,479 | 160,153 | 130,589 | 35,317 | 3,511 | 828 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | X X X X | X X X X | X X X X | 257,755 | 82,732 | 8,163 | 2,393 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 682 | 126 | 16,687 | X X X X |
| 2. 1993 | (249)| 3,402 | 69,678 | X X X X |
| 3. 1994 | 220 | 2,325 | 100,280 | X X X X |
|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 654 | 5,852 | 186,645 | X X X X |
<------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------------------#--------------------------------------------#
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 13,079 | 1,621 | 64,105 | 49,367 | 0 | 0 | 8,671 |
| 2. 1993 | 19,627 | 3,360 | 35,566 | 24,632 | 0 | 0 | 3,507 |
| 3. 1994 | 81,855 | 42,651 | 46,006 | 8,831 | 0 | 0 | 1,625 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 114,561 | 47,632 | 145,677 | 82,830 | 0 | 0 | 13,803 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT) - (CONTINUED)
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 1,558 | 1,575 | 170 | 33,479 | 824 |
| 2. 1993 | 759 | 1,995 | 189 | 30,138 | 407 |
| 3. 1994 | 461 | 2,711 | 241 | 77,784 | 1,219 |
|-------------|--------------|--------------|--------------|--------------|-------------|
| 4. Totals | 2,778 | 6,282 | 600 | 141,401 | 2,450 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1993 | 172,588 | 72,771 | 99,816 | 89.1 | 101.3 | 81.9 | 0 |
| 3. 1994 | 266,152 | 88,088 | 178,064 | 119.0 | 138.8 | 111.2 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | X X X X | 26,196 | 7,283 |
| 2. 1993 | 0 | 0.0 | 27,201 | 2,937 |
| 3. 1994 | 0 | 0.0 | 76,379 | 1,405 |
|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 0 | X X X X | 129,776 | 11,625 |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1J - AUTO PHYSICAL DAMAGE
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | (240)| (76)| 1,366 | 64 |
| 2. 1993 | 362,501 | 6,771 | 355,730 | 183,458 | 3,634 | 2,791 | 16 |
| 3. 1994 | 373,670 | 6,453 | 367,216 | 173,455 | 3,240 | 2,079 | 7 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | X X X X | X X X X | X X X X | 356,673 | 6,798 | 6,236 | 87 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 3,035 | (124)| 1,012 | 2,342,549 |
| 2. 1993 | 32,753 | 18,080 | 200,680 | 177,693 |
| 3. 1994 | 19,029 | 17,190 | 189,477 | 165,126 |
|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 54,816 | 35,146 | 391,170 | X X X X |
<------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 2,250 | 106 | 18,343 | 1,814 | 0 | 0 | 2,087 |
| 2. 1993 | 1,506 | 46 | 16,644 | 2,088 | 0 | 0 | 3,743 |
| 3. 1994 | 13,189 | 219 | 25,167 | 1,481 | 0 | 0 | 12,204 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 16,944 | 370 | 60,154 | 5,383 | 0 | 0 | 18,034 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1J - AUTO PHYSICAL DAMAGE - (CONTINUED)
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 27 | 3,875 | 443 | 21,176 | 309 |
| 2. 1993 | 85 | 3,425 | 620 | 20,294 | 153 |
| 3. 1994 | 46 | 19,229 | 1,546 | 50,360 | 7,004 |
|-------------|--------------|--------------|--------------|--------------|-------------|
| 4. Totals | 158 | 26,530 | 2,609 | 91,830 | 7,466 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1993 | 226,843 | 5,869 | 220,974 | 62.6 | 86.7 | 62.1 | 0 |
| 3. 1994 | 244,829 | 4,992 | 239,837 | 65.5 | 77.4 | 65.3 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 18,673 | 2,503 |
| 2. 1993 | 0 | 0.0 | 16,016 | 4,278 |
| 3. 1994 | 0 | 0.0 | 36,656 | 13,704 |
|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 0 | X X X X | 71,345 | 20,485 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
/TABLE
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1K - FIDELITY/SURETY
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments|
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 6,257 | 2,692 | 2,251 | 511 |
| 2. 1993 | 108,036 | 15,293 | 92,743 | 26,230 | 13,155 | 1,204 | 148 |
| 3. 1994 | 117,185 | 19,545 | 97,640 | 12,754 | 7,122 | 50 | 5 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | X X X X | X X X X | X X X X | 45,241 | 22,969 | 3,505 | 664 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 1,727 | 412 | 5,717 | X X X X |
| 2. 1993 | 6,221 | 555 | 14,686 | X X X X |
| 3. 1994 | 505 | 510 | 6,188 | X X X X |
|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 8,453 | 1,478 | 26,591 | X X X X |
<------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 13,006 | 10,399 | 49,831 | 11,106 | 0 | 0 | 15,327 |
| 2. 1993 | 3,203 | 937 | 13,526 | 2,858 | 0 | 0 | 3,428 |
| 3. 1994 | 2,023 | 293 | 30,829 | 5,531 | 0 | 0 | 5,879 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 18,233 | 11,629 | 94,186 | 19,495 | 0 | 0 | 24,634 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1K - FIDELITY/SURETY - (CONTINUED)
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 4,620 | 11,710 | 765 | 52,805 | 679 |
| 2. 1993 | 359 | 0 | 211 | 16,215 | 254 |
| 3. 1994 | 621 | 4,629 | 283 | 32,568 | 205 |
|-------------|--------------|--------------|--------------|--------------|-------------|
| 4. Totals | 5,600 | 16,339 | 1,259 | 101,588 | 1,138 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1993 | 48,358 | 17,457 | 30,901 | 44.8 | 114.2 | 33.3 | 0 |
| 3. 1994 | 52,328 | 13,572 | 38,756 | 44.7 | 69.4 | 39.7 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 41,333 | 11,472 |
| 2. 1993 | 0 | 0.0 | 12,935 | 3,280 |
| 3. 1994 | 0 | 0.0 | 27,027 | 5,541 |
|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 0 | X X X X | 81,295 | 20,293 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
/TABLE
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 83,586 | 4,343 | 1 | 0 |
| 2. 1993 | 512,288 | 13,503 | 498,785 | 208,237 | 6,604 | 0 | 0 |
| 3. 1994 | 635,851 | 15,105 | 620,746 | 134,405 | 4,111 | 0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | X X X X | X X X X | X X X X | 426,227 | 15,058 | 1 | 0 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 2,899 | 82,143 | X X X X |
| 2. 1993 | 0 | 10,693 | 212,326 | X X X X |
| 3. 1994 | 0 | 8,593 | 138,886 | X X X X |
|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 1 | 22,185 | 433,355 | X X X X |
<------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 328,598 | 4,136 | 2,743 | 454 | 0 | 0 | 545 |
| 2. 1993 | 121,712 | 1,136 | 3,072 | 723 | 0 | 0 | 47 |
| 3. 1994 | 127,356 | 3,011 | 131,621 | 4,714 | 0 | 0 | 66 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 577,666 | 8,284 | 137,436 | 5,891 | 0 | 0 | 658 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)-(CONTINUED)
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 251 | 0 | 6,845 | 333,890 | 16 |
| 2. 1993 | 4 | 0 | 5,018 | 127,986 | 3 |
| 3. 1994 | 41 | 0 | 12,102 | 263,379 | 18 |
|-------------|--------------|--------------|--------------|--------------|-------------|
| 4. Totals | 296 | 0 | 23,965 | 725,254 | 37 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1993 | 348,778 | 8,467 | 340,311 | 68.1 | 62.7 | 68.2 | 0 |
| 3. 1994 | 414,142 | 11,877 | 402,265 | 65.1 | 78.6 | 64.8 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 326,751 | 7,139 |
| 2. 1993 | 0 | 0.0 | 122,925 | 5,061 |
| 3. 1994 | 0 | 0.0 | 251,252 | 12,127 |
|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 0 | X X X X | 700,927 | 24,327 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
/TABLE
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1M - INTERNATIONAL
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | (131)| 131 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | (131)| 131 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 9. 1992 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|10. 1993 | 183 | 0 | 183 | 0 | 0 | 0 | 0 |
|11. 1994 | (183)| 0 | (183)| 0 | 0 | 0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | 0 | 0 | 0 | 0 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | X X X X |
| 2. 1985 | 0 | 0 | 0 | X X X X |
| 3. 1986 | 0 | 0 | 0 | X X X X |
| 4. 1987 | 0 | 0 | 0 | X X X X |
| 5. 1988 | 0 | 0 | 0 | X X X X |
| 6. 1989 | 0 | 0 | 0 | X X X X |
| 7. 1990 | 0 | 0 | 0 | X X X X |
| 8. 1991 | 0 | 0 | 0 | X X X X |
| 9. 1992 | 0 | 0 | 0 | X X X X |
|10. 1993 | 0 | 0 | 0 | X X X X |
|11. 1994 | 0 | 0 | 0 | X X X X |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | 0 | 0 | X X X X |
<------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1M - INTERNATIONAL - (CONTINUED)
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 9. 1992 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|10. 1993 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|11. 1994 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 | 0 |
| 9. 1992 | 0 | 0 | 0 | 0 | 0 |
|10. 1993 | 0 | 0 | 0 | 0 | 0 |
|11. 1994 | 0 | 0 | 0 | 0 | 0 |
|-------------|--------------|--------------|--------------|--------------|-------------|
|12. Totals | 0 | 0 | 0 | 0 | 0 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1M - INTERNATIONAL - (CONTINUED)
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
| 9. 1992 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
|10. 1993 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
|11. 1994 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 0 | 0 |
| 2. 1985 | 0 | 0.0 | 0 | 0 |
| 3. 1986 | 0 | 0.0 | 0 | 0 |
| 4. 1987 | 0 | 0.0 | 0 | 0 |
| 5. 1988 | 0 | 0.0 | 0 | 0 |
| 6. 1989 | 0 | 0.0 | 0 | 0 |
| 7. 1990 | 0 | 0.0 | 0 | 0 |
| 8. 1991 | 0 | 0.0 | 0 | 0 |
| 9. 1992 | 0 | 0.0 | 0 | 0 |
|10. 1993 | 0 | 0.0 | 0 | 0 |
|11. 1994 | 0 | 0.0 | 0 | 0 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | X X X X | 0 | 0 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
/TABLE
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1N - REINSURANCE A
<TABLE>
<CAPTION> (000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. 1988 | 18,107 | 2,084 | 16,022 | (6,917)| 113 | 282 | 2 |
| 2. 1989 | 30,323 | 5,188 | 25,136 | 78,490 | 29,506 | 205 | 1 |
| 3. 1990 | 52,398 | 8,887 | 43,511 | 40,717 | 12,825 | 141 | 0 |
| 4. 1991 | 53,594 | 8,599 | 44,995 | 38,663 | 3,372 | 313 | 5 |
| 5. 1992 | 71,214 | 6,982 | 64,231 | 141,178 | 20,434 | 205 | 81 |
| 6. 1993 | 88,237 | 7,979 | 80,258 | 12,666 | 394 | 90 | 0 |
| 7. 1994 | 92,264 | 7,679 | 84,585 | 13,766 | 1,494 | 52 | 1 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | X X X X | X X X X | X X X X | 318,563 | 68,138 | 1,287 | 91 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. 1988 | 0 | (1)| (6,751)| X X X X |
| 2. 1989 | 0 | 1 | 49,189 | X X X X |
| 3. 1990 | 0 | 2 | 28,035 | X X X X |
| 4. 1991 | 0 | 5 | 35,603 | X X X X |
| 5. 1992 | 0 | 19 | 120,887 | X X X X |
| 6. 1993 | 0 | 162 | 12,524 | X X X X |
| 7. 1994 | 0 | 85 | 12,409 | X X X X |
|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | 0 | 274 | 251,895 | X X X X |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1N - REINSURANCE A - (CONTINUED)
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. 1988 | 4,496 | 0 | 11,637 | 0 | 0 | 0 | 0 |
| 2. 1989 | 9,253 | 2,308 | 8,671 | 3,548 | 0 | 0 | 0 |
| 3. 1990 | 9,931 | 397 | 10,117 | 710 | 0 | 0 | 0 |
| 4. 1991 | 3,293 | 100 | 4,481 | 1,900 | 0 | 0 | 0 |
| 5. 1992 | 8,206 | 1,442 | 4,346 | 1,461 | 0 | 0 | 0 |
| 6. 1993 | 4,961 | 91 | 57,209 | 4,062 | 0 | 0 | 2 |
| 7. 1994 | 24,018 | 405 | 34,351 | 3,389 | 0 | 0 | 45 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | 64,158 | 4,743 | 130,812 | 15,070 | 0 | 0 | 47 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| 1. 1988 | 0 | 0 | 0 | 16,133 | X X X X |
| 2. 1989 | 0 | 0 | 0 | 12,068 | X X X X |
| 3. 1990 | 0 | 0 | 0 | 18,941 | X X X X |
| 4. 1991 | 0 | 0 | 0 | 5,774 | X X X X |
| 5. 1992 | 0 | 0 | 0 | 9,649 | X X X X |
| 6. 1993 | 2 | 0 | 0 | 58,016 | X X X X |
| 7. 1994 | 45 | 0 | 0 | 54,575 | X X X X |
|-------------|--------------|--------------|--------------|--------------|-------------|
| 8. Totals | 47 | 0 | 0 | 175,156 | X X X X |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1N - REINSURANCE A - (CONTINUED)
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. 1988 | 9,497 | 116 | 9,381 | 52.5 | 5.6 | 58.6 | 0 |
| 2. 1989 | 96,620 | 35,363 | 61,257 | 318.6 | 681.7 | 243.7 | 0 |
| 3. 1990 | 60,908 | 13,932 | 46,976 | 116.2 | 156.8 | 108.0 | 0 |
| 4. 1991 | 46,755 | 5,377 | 41,377 | 87.2 | 62.5 | 92.0 | 0 |
| 5. 1992 | 153,954 | 23,417 | 130,536 | 216.2 | 335.4 | 203.2 | 0 |
| 6. 1993 | 75,089 | 4,549 | 70,540 | 85.1 | 57.0 | 87.9 | 0 |
| 7. 1994 | 72,317 | 5,333 | 66,984 | 78.4 | 69.5 | 79.2 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1N - REINSURANCE A - (CONTINUED)
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. 1988 | 0 | 0.0 | 16,133 | 0 |
| 2. 1989 | 0 | 0.0 | 12,068 | 0 |
| 3. 1990 | 0 | 0.0 | 18,941 | 0 |
| 4. 1991 | 0 | 0.0 | 5,774 | 0 |
| 5. 1992 | 0 | 0.0 | 9,649 | 0 |
| 6. 1993 | 0 | 0.0 | 58,016 | 0 |
| 7. 1994 | 0 | 0.0 | 54,575 | 0 |
|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | 0 | X X X X | 175,156 | 0 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1O - REINSURANCE B
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. 1988 | 68,483 | (3,131)| 71,614 | 8,236 | 143 | 545 | 8 |
| 2. 1989 | 112,647 | 743 | 111,904 | 21,357 | 144 | 684 | 4 |
| 3. 1990 | 105,662 | 626 | 105,037 | 18,357 | 394 | 823 | 3 |
| 4. 1991 | 115,392 | 734 | 114,657 | 42,277 | 383 | 1,073 | 13 |
| 5. 1992 | 107,906 | 1,450 | 106,456 | 16,807 | 1,707 | 408 | 64 |
| 6. 1993 | 111,104 | 138 | 110,966 | 10,975 | 37 | 184 | 27 |
| 7. 1994 | 72,008 | 471 | 71,537 | 1,942 | 0 | 11 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | X X X X | X X X X | X X X X | 119,951 | 2,807 | 3,729 | 120 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1O - REINSURANCE B - (CONTINUED)
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. 1988 | 0 | 1 | 8,632 | X X X X |
| 2. 1989 | 0 | 8 | 21,901 | X X X X |
| 3. 1990 | 0 | 16 | 18,800 | X X X X |
| 4. 1991 | 0 | 28 | 42,981 | X X X X |
| 5. 1992 | 0 | 21 | 15,465 | X X X X |
| 6. 1993 | 0 | 32 | 11,126 | X X X X |
| 7. 1994 | 0 | 132 | 2,084 | X X X X |
|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | 0 | 237 | 120,990 | X X X X |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. 1988 | 9,410 | 1 | 43,908 | 0 | 0 | 0 | 0 |
| 2. 1989 | 17,483 | 43 | 37,074 | 0 | 0 | 0 | 0 |
| 3. 1990 | 24,435 | 7 | 37,355 | 49 | 0 | 0 | 0 |
| 4. 1991 | 20,349 | 130 | 23,401 | 98 | 0 | 0 | 0 |
| 5. 1992 | 24,904 | 40 | 36,051 | 677 | 0 | 0 | 0 |
| 6. 1993 | 29,090 | 179 | 31,918 | 68 | 0 | 0 | 0 |
| 7. 1994 | 8,630 | 18 | 61,705 | 138 | 0 | 0 | 7 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | 134,300 | 418 | 271,412 | 1,030 | 0 | 0 | 7 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1O - REINSURANCE B - (CONTINUED)
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. 1988 | 0 | 0 | 0 | 53,317 | X X X X |
| 2. 1989 | 0 | 0 | 0 | 54,514 | X X X X |
| 3. 1990 | 0 | 0 | 0 | 61,734 | X X X X |
| 4. 1991 | 0 | 0 | 0 | 43,521 | X X X X |
| 5. 1992 | 0 | 0 | 0 | 60,238 | X X X X |
| 6. 1993 | 0 | 0 | 0 | 60,761 | X X X X |
| 7. 1994 | 7 | 0 | 0 | 70,179 | X X X X |
|-------------|--------------|--------------|--------------|--------------|-------------|
| 8. Totals | 7 | 0 | 0 | 404,264 | X X X X |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1O - REINSURANCE B - (CONTINUED)
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. 1988 | 62,100 | 151 | 61,949 | 90.7 | (4.8)| 86.5 | 0 |
| 2. 1989 | 76,606 | 191 | 76,415 | 68.0 | 25.7 | 68.3 | 0 |
| 3. 1990 | 80,986 | 452 | 80,534 | 76.6 | 72.3 | 76.7 | 0 |
| 4. 1991 | 87,127 | 625 | 86,503 | 75.5 | 85.0 | 75.4 | 0 |
| 5. 1992 | 78,191 | 2,488 | 75,703 | 72.5 | 171.5 | 71.1 | 0 |
| 6. 1993 | 72,199 | 312 | 71,887 | 65.0 | 226.0 | 64.8 | 0 |
| 7. 1994 | 72,427 | 163 | 72,264 | 100.6 | 34.7 | 101.0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. 1988 | 0 | 0.0 | 53,317 | 0 |
| 2. 1989 | 0 | 0.0 | 54,514 | 0 |
| 3. 1990 | 0 | 0.0 | 61,734 | 0 |
| 4. 1991 | 0 | 0.0 | 43,521 | 0 |
| 5. 1992 | 0 | 0.0 | 60,238 | 0 |
| 6. 1993 | 0 | 0.0 | 60,761 | 0 |
| 7. 1994 | 0 | 0.0 | 70,179 | 0 |
|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | 0 | X X X X | 404,264 | 0 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1P - REINSURANCE C
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments|
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. 1988 | 7,954 | 107 | 7,847 | 61,723 | 0 | 14 | 0 |
| 2. 1989 | 13,214 | 0 | 13,214 | 38,535 | 0 | 46 | 0 |
| 3. 1990 | 11,353 | 0 | 11,353 | 34,880 | 0 | 43 | 0 |
| 4. 1991 | 8,416 | 0 | 8,416 | 2,099 | 0 | 60 | 0 |
| 5. 1992 | 3,283 | 0 | 3,283 | 101 | 0 | 0 | 0 |
| 6. 1993 | 2,923 | 0 | 2,923 | 199 | 0 | 0 | 0 |
| 7. 1994 | 1,891 | 0 | 1,891 | 0 | 0 | 0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | X X X X | X X X X | X X X X | 137,538 | 0 | 163 | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. 1988 | 0 | 0 | 61,737 | X X X X |
| 2. 1989 | 7,940 | 1 | 38,581 | X X X X |
| 3. 1990 | 0 | 1 | 34,925 | X X X X |
| 4. 1991 | 0 | 3 | 2,161 | X X X X |
| 5. 1992 | 0 | 0 | 101 | X X X X |
| 6. 1993 | 0 | 1 | 201 | X X X X |
| 7. 1994 | 0 | 4 | 4 | X X X X |
|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | 7,940 | 10 | 137,710 | X X X X |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1P - REINSURANCE C - (CONTINUED)
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. 1988 | 600 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1989 | 272 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1990 | 224 | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1991 | 1,188 | 0 | 0 | 0 | 0 | 0 | 0 |
| 5. 1992 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 6. 1993 | 130 | 0 | 0 | 0 | 0 | 0 | 0 |
| 7. 1994 | 133 | 0 | 504 | 0 | 0 | 0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | 2,547 | 0 | 504 | 0 | 0 | 0 | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. 1988 | 0 | 0 | 0 | 600 | X X X X |
| 2. 1989 | 0 | 0 | 0 | 272 | X X X X |
| 3. 1990 | 0 | 0 | 0 | 224 | X X X X |
| 4. 1991 | 0 | 0 | 0 | 1,188 | X X X X |
| 5. 1992 | 0 | 0 | 0 | 0 | X X X X |
| 6. 1993 | 0 | 0 | 0 | 130 | X X X X |
| 7. 1994 | 0 | 0 | 0 | 637 | X X X X |
|-------------|--------------|--------------|--------------|--------------|-------------|
| 8. Totals | 0 | 0 | 0 | 3,051 | X X X X |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1P - REINSURANCE C - (CONTINUED)
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. 1988 | 62,337 | 0 | 62,337 | 783.7 | 0.0 | 794.4 | 0 |
| 2. 1989 | 38,853 | 0 | 38,853 | 294.0 | 0.0 | 294.0 | 0 |
| 3. 1990 | 35,149 | 0 | 35,149 | 309.6 | 0.0 | 309.6 | 0 |
| 4. 1991 | 3,349 | 0 | 3,349 | 39.8 | 0.0 | 39.8 | 0 |
| 5. 1992 | 102 | 0 | 102 | 3.1 | 0.0 | 3.1 | 0 |
| 6. 1993 | 331 | 0 | 331 | 11.3 | 0.0 | 11.3 | 0 |
| 7. 1994 | 641 | 0 | 641 | 33.9 | 0.0 | 33.9 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. 1988 | 0 | 0.0 | 600 | 0 |
| 2. 1989 | 0 | 0.0 | 272 | 0 |
| 3. 1990 | 0 | 0.0 | 224 | 0 |
| 4. 1991 | 0 | 0.0 | 1,188 | 0 |
| 5. 1992 | 0 | 0.0 | 0 | 0 |
| 6. 1993 | 0 | 0.0 | 130 | 0 |
| 7. 1994 | 0 | 0.0 | 637 | 0 |
|-------------|--------------|--------------|--------------|--------------|
| 8. Totals | 0 | X X X X | 3,051 | 0 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1Q - REINSURANCE D
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | 27,772 | 1,208 | 510 | 95 |
| 2. 1985 | 123,179 | 5,941 | 117,239 | 69,691 | 5,083 | 699 | 12 |
| 3. 1986 | 212,988 | 9,139 | 203,849 | 28,119 | 917 | 878 | 0 |
| 4. 1987 | 170,335 | 7,926 | 162,408 | 59,543 | 2,126 | 912 | 1 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 5. Totals | X X X X | X X X X | X X X X | 185,125 | 9,336 | 2,999 | 108 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | 38 | 27,017 | X X X X |
| 2. 1985 | 0 | 114 | 65,409 | X X X X |
| 3. 1986 | 0 | 52 | 28,131 | X X X X |
| 4. 1987 | 0 | 20 | 58,347 | X X X X |
|-------------|--------------|--------------|--------------|--------------|
| 5. Totals | 0 | 223 | 178,904 | X X X X |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1Q - REINSURANCE D - (CONTINUED)
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 115,686 | 4,006 | 18,044 | 1,275 | 0 | 0 | 0 |
| 2. 1985 | 22,683 | 378 | 43,910 | 791 | 0 | 0 | 0 |
| 3. 1986 | 14,962 | 0 | 83,532 | 0 | 0 | 0 | 0 |
| 4. 1987 | 26,500 | 48 | 87,539 | 0 | 0 | 0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 5. Totals | 179,831 | 4,432 | 233,025 | 2,066 | 0 | 0 | 0 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 128,449 | X X X X |
| 2. 1985 | 0 | 0 | 0 | 65,424 | X X X X |
| 3. 1986 | 0 | 0 | 0 | 98,494 | X X X X |
| 4. 1987 | 0 | 0 | 0 | 113,991 | X X X X |
|-------------|--------------|--------------|--------------|--------------|-------------|
| 5. Totals | 0 | 0 | 0 | 406,358 | X X X X |
<------------->-------------->-------------->-------------->-------------->------------->
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 137,097 | 6,264 | 130,833 | 111.3 | 105.4 | 111.6 | 0 |
| 3. 1986 | 127,542 | 917 | 126,625 | 59.9 | 10.0 | 62.1 | 0 |
| 4. 1987 | 174,514 | 2,176 | 172,338 | 102.5 | 27.5 | 106.1 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 5. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1Q - REINSURANCE D - (CONTINUED)
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 128,449 | 0 |
| 2. 1985 | 0 | 0.0 | 65,424 | 0 |
| 3. 1986 | 0 | 0.0 | 98,494 | 0 |
| 4. 1987 | 0 | 0.0 | 113,991 | 0 |
|-------------|--------------|--------------|--------------|--------------|
| 5. Totals | 0 | X X X X | 406,358 | 0 |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments|
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | 5,066 | 48,636 | (6,377)| 6,204 |
| 2. 1985 | 80,190 | 10,391 | 69,798 | 55,532 | 8,909 | 39,168 | 2,154 |
| 3. 1986 | 174,766 | 11,465 | 163,301 | 71,309 | 976 | 45,023 | 556 |
| 4. 1987 | 163,036 | 4,451 | 158,585 | 39,935 | 6,080 | 20,599 | 1,148 |
| 5. 1988 | 153,691 | 12,764 | 140,928 | 40,897 | 5,029 | 15,841 | 848 |
| 6. 1989 | 131,729 | 9,675 | 122,054 | 29,639 | 3,487 | 14,413 | 452 |
| 7. 1990 | 119,042 | 18,024 | 101,018 | 32,897 | 4,882 | 13,973 | 503 |
| 8. 1991 | 106,109 | 16,836 | 89,273 | 29,277 | 2,548 | 10,458 | 312 |
| 9. 1992 | 74,984 | 13,886 | 61,098 | 15,161 | 972 | 4,561 | 473 |
|10. 1993 | 75,698 | 15,677 | 60,020 | 5,956 | 416 | 1,455 | 141 |
|11. 1994 | 74,933 | 14,738 | 60,195 | 2,201 | 1 | 882 | 5 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | 327,867 | 81,936 | 159,997 | 12,794 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE-(CONTINUED)
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 1,121 | 36 | (56,115)| X X X X |
| 2. 1985 | 1,384 | 3,462 | 87,098 | 12,735 |
| 3. 1986 | 477 | 1,998 | 116,798 | 10,010 |
| 4. 1987 | 1,552 | 2,303 | 55,609 | 9,492 |
| 5. 1988 | 536 | 1,958 | 52,819 | 9,350 |
| 6. 1989 | 655 | 1,618 | 41,731 | 8,180 |
| 7. 1990 | 368 | 1,541 | 43,026 | 8,771 |
| 8. 1991 | 111 | 1,598 | 38,472 | 6,831 |
| 9. 1992 | 214 | 1,700 | 19,977 | 5,992 |
|10. 1993 | 180 | 1,356 | 8,210 | 5,829 |
|11. 1994 | 6 | 1,120 | 4,197 | 3,913 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 6,603 | 18,690 | 411,823 | X X X X |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 33,327 | 9,052 | 28,251 | 4,288 | 0 | 0 | 5,360 |
| 2. 1985 | 9,507 | 629 | 19,301 | 1,278 | 0 | 0 | 894 |
| 3. 1986 | 8,306 | 9 | 26,634 | 1,179 | 0 | 0 | 3,387 |
| 4. 1987 | 12,151 | 152 | 27,903 | 457 | 0 | 0 | 4,068 |
| 5. 1988 | 13,010 | 220 | 22,014 | 874 | 0 | 0 | 3,931 |
| 6. 1989 | 14,848 | 292 | 25,932 | 421 | 0 | 0 | 8,691 |
| 7. 1990 | 18,577 | 1,939 | 29,419 | 120 | 0 | 0 | 6,129 |
| 8. 1991 | 11,902 | 835 | 35,243 | 676 | 0 | 0 | 7,464 |
| 9. 1992 | 12,335 | 205 | 25,925 | 1,146 | 0 | 0 | 6,641 |
|10. 1993 | 9,596 | 516 | 35,444 | 1,876 | 0 | 0 | 7,481 |
|11. 1994 | 6,929 | 94 | 52,364 | 11,338 | 0 | 0 | 9,359 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 150,488 | 13,943 | 328,430 | 23,653 | 0 | 0 | 63,405 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE-(CONTINUED)
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 1,123 | 1,002 | 394 | 52,869 | 2,118 |
| 2. 1985 | 356 | 556 | 115 | 27,554 | 625 |
| 3. 1986 | 8 | 321 | 325 | 37,456 | 422 |
| 4. 1987 | 0 | 1,217 | 389 | 43,902 | 421 |
| 5. 1988 | 0 | 598 | 474 | 38,335 | 267 |
| 6. 1989 | 0 | 930 | 653 | 49,411 | 859 |
| 7. 1990 | 0 | 906 | 700 | 52,765 | 1,300 |
| 8. 1991 | 0 | 421 | 743 | 53,841 | 389 |
| 9. 1992 | 37 | 817 | 645 | 44,158 | 439 |
|10. 1993 | 287 | 616 | 849 | 50,691 | 487 |
|11. 1994 | 410 | 813 | 778 | 57,588 | 1,117 |
|-------------|--------------|--------------|--------------|--------------|-------------|
|12. Totals | 2,221 | 8,196 | 6,065 | 508,571 | 8,444 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 127,978 | 13,326 | 114,652 | 159.6 | 128.2 | 164.3 | 0 |
| 3. 1986 | 156,981 | 2,727 | 154,254 | 89.8 | 23.8 | 94.5 | 0 |
| 4. 1987 | 107,348 | 7,836 | 99,511 | 65.8 | 176.1 | 62.7 | 0 |
| 5. 1988 | 98,125 | 6,971 | 91,154 | 63.8 | 54.6 | 64.7 | 0 |
| 6. 1989 | 95,794 | 4,652 | 91,142 | 72.7 | 48.1 | 74.7 | 0 |
| 7. 1990 | 103,236 | 7,445 | 95,791 | 86.7 | 41.3 | 94.8 | 0 |
| 8. 1991 | 96,684 | 4,370 | 92,314 | 91.1 | 26.0 | 103.4 | 0 |
| 9. 1992 | 66,968 | 2,833 | 64,135 | 89.3 | 20.4 | 105.0 | 0 |
|10. 1993 | 62,137 | 3,236 | 58,901 | 82.1 | 20.6 | 98.1 | 0 |
|11. 1994 | 73,632 | 11,848 | 61,785 | 98.3 | 80.4 | 102.6 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE-(CONTINUED)
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | X X X X | 48,238 | 4,631 |
| 2. 1985 | 0 | 0.0 | 26,901 | 653 |
| 3. 1986 | 0 | 0.0 | 33,752 | 3,704 |
| 4. 1987 | 0 | 0.0 | 39,445 | 4,457 |
| 5. 1988 | 0 | 0.0 | 33,930 | 4,405 |
| 6. 1989 | 0 | 0.0 | 40,067 | 9,344 |
| 7. 1990 | 0 | 0.0 | 45,936 | 6,829 |
| 8. 1991 | 0 | 0.0 | 45,634 | 8,207 |
| 9. 1992 | 0 | 0.0 | 36,909 | 7,249 |
|10. 1993 | 0 | 0.0 | 42,648 | 8,043 |
|11. 1994 | 0 | 0.0 | 47,861 | 9,727 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | X X X X | 441,322 | 67,249 |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 1,893 | 94 | 1,799 | 0 | 0 | 1 | 0 |
| 5. 1988 | 1,027 | 47 | 980 | 3 | 0 | 0 | 0 |
| 6. 1989 | 803 | 16 | 786 | 0 | 0 | 0 | 0 |
| 7. 1990 | 333 | 2 | 332 | 7 | 0 | 0 | 0 |
| 8. 1991 | 199 | 2 | 197 | 15 | 0 | 0 | 0 |
| 9. 1992 | 121 | 4 | 117 | 0 | 0 | 0 | 0 |
|10. 1993 | 51 | 6 | 45 | 0 | 0 | 0 | 0 |
|11. 1994 | 8 | 0 | 8 | 0 | 0 | 0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | 24 | 0 | 1 | 0 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE-(CONTINUED)
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | 0 | 0 | X X X X |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 1 | 148 |
| 5. 1988 | 0 | 6 | 9 | 3 |
| 6. 1989 | 0 | 6 | 6 | 3 |
| 7. 1990 | 0 | 13 | 20 | 0 |
| 8. 1991 | 0 | 13 | 28 | 2 |
| 9. 1992 | 0 | 2 | 2 | 1 |
|10. 1993 | 0 | 1 | 2 | 1 |
|11. 1994 | 0 | 0 | 0 | 0 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | 42 | 67 | X X X X |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 2 | 0 | 0 | 0 | 96 |
| 5. 1988 | 0 | 0 | 479 | 0 | 0 | 0 | 28 |
| 6. 1989 | 0 | 0 | 502 | 0 | 0 | 0 | 29 |
| 7. 1990 | 0 | 0 | 111 | 0 | 0 | 0 | 6 |
| 8. 1991 | 0 | 0 | 3 | 0 | 0 | 0 | 0 |
| 9. 1992 | 0 | 0 | 3 | 0 | 0 | 0 | 0 |
|10. 1993 | 0 | 0 | 3 | 0 | 0 | 0 | 0 |
|11. 1994 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | 0 | 1,103 | 0 | 0 | 0 | 159 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE-(CONTINUED)
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 98 | 1 |
| 5. 1988 | 0 | 9 | 2 | 509 | 0 |
| 6. 1989 | 0 | 12 | 2 | 533 | 0 |
| 7. 1990 | 0 | 2 | 0 | 117 | 0 |
| 8. 1991 | 0 | 0 | 0 | 3 | 0 |
| 9. 1992 | 0 | 0 | 0 | 3 | 0 |
|10. 1993 | 0 | 0 | 0 | 3 | 0 |
|11. 1994 | 0 | 0 | 0 | 0 | 0 |
|-------------|--------------|--------------|--------------|--------------|-------------|
|12. Totals | 0 | 23 | 4 | 1,266 | 1 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1985 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
| 4. 1987 | 99 | 0 | 99 | 5.2 | 0.0 | 5.5 | 0 |
| 5. 1988 | 517 | 0 | 517 | 50.4 | 0.0 | 52.8 | 0 |
| 6. 1989 | 539 | 0 | 539 | 67.1 | 0.0 | 68.5 | 0 |
| 7. 1990 | 137 | 0 | 137 | 41.0 | 0.0 | 41.3 | 0 |
| 8. 1991 | 31 | 0 | 31 | 15.6 | 0.0 | 15.7 | 0 |
| 9. 1992 | 5 | 0 | 5 | 4.3 | 0.0 | 4.4 | 0 |
|10. 1993 | 5 | 0 | 5 | 9.2 | 0.0 | 10.5 | 0 |
|11. 1994 | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
|12. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| | | | | | | | |
<--------------------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE-(CONTINUED)
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | X X X X | 0 | 0 |
| 2. 1985 | 0 | 0.0 | 0 | 0 |
| 3. 1986 | 0 | 0.0 | 0 | 0 |
| 4. 1987 | 0 | 0.0 | 2 | 96 |
| 5. 1988 | 0 | 0.0 | 479 | 30 |
| 6. 1989 | 0 | 0.0 | 502 | 31 |
| 7. 1990 | 0 | 0.0 | 111 | 6 |
| 8. 1991 | 0 | 0.0 | 3 | 0 |
| 9. 1992 | 0 | 0.0 | 3 | 0 |
|10. 1993 | 0 | 0.0 | 3 | 0 |
|11. 1994 | 0 | 0.0 | 0 | 0 |
|-------------|--------------|--------------|--------------|--------------|
|12. Totals | 0 | X X X X | 1,103 | 163 |
| | | | | |
<-------------'-------------->-------------->-------------->-------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 1S - FINANCIAL GUARANTY/MORTGAGE GUARANTY
<TABLE>
<CAPTION>
(000 omitted)
!-------------#-----------------------------------------#------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments |
| |-------------#-------------#-------------|-----------------------------#-----------------------------|
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss |
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------|
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 |
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | |
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | 2,741 | (14,393)| 2 | 425 |
| 2. 1993 | 19,082 | 5,011 | 14,070 | (13,292)| 9,386 | 0 | 0 |
| 3. 1994 | 10,100 | 2,455 | 7,645 | 56,612 | 7,279 | 0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | X X X X | X X X X | X X X X | 46,061 | 2,273 | 2 | 425 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1S - FINANCIAL GUARANTY/MORTGAGE GUARANTY - (CONTINUED)
<CAPTION>
!-------------#--------------------------------------------#--------------#
| 1 | | |
| |--------------#--------------#--------------| |
| Years | 9 | 10 | 11 | 12 |
| in Which | | | | Number of |
|Premiums Were| Salvage | Unallocated | Total | Claims |
| Earned and | and | Loss | Net Paid | Reported - |
| Losses Were | Subrogation | Expense | (5 - 6 + 7 | Direct and |
| Incurred | Received | Payments | - 8 + 10) | Assumed |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 15,900 | 11 | 16,722 | 1,050 |
| 2. 1993 | 133,321 | 3,101 | (19,577)| 77 |
| 3. 1994 | 16,921 | (2,680)| 46,653 | 27 |
|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 166,142 | 433 | 43,798 | X X X X |
| | | | | |
<------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------------------------------------------------#---------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid |
| |---------------------------#----------------------------|-----------------------------#--------------|
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR |
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------|
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 20,203 | 1,948 | 39,656 | 14,952 | 0 | 0 | 2,691 |
| 2. 1993 | 31,569 | 6,926 | 8,555 | 602 | 0 | 0 | 84 |
| 3. 1994 | 772 | 5,042 | 14,159 | 426 | 0 | 0 | 1,046 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 52,544 | 13,916 | 62,370 | 15,980 | 0 | 0 | 3,821 |
| | | | | | | | |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#--------------#--------------#-------------#
| | | | | | |
| |--------------| 21 | 22 | 23 | 24 |
| | | | | | Number of |
| |--------------| Salvage | Unallocated | Total | Claims |
| | 20 | and | Loss | Net Losses |Outstanding -|
| | | Subrogation | Expenses | and Expenses | Direct and |
| | Ceded | Anticipated | Unpaid | Unpaid | Assumed |
|-------------|--------------|--------------|--------------|--------------|-------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 2,691 | 4,657 | 17 | 42,976 | 164 |
| 2. 1993 | 84 | 0 | 22 | 32,618 | 71 |
| 3. 1994 | 47 | 578 | 5 | 10,467 | 24 |
|-------------|--------------|--------------|--------------|--------------|-------------|
| 4. Totals | 2,822 | 5,235 | 44 | 86,061 | 259 |
| | | | | | |
<------------->-------------->-------------->-------------->-------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 1S - FINANCIAL GUARANTY/MORTGAGE GUARANTY - (CONTINUED)
<CAPTION>
!-------------#-----------------------------------------#--------------------------------------------#---------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount|
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of|
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 |
| | | | | | | | |
| | Direct | | | Direct | | | |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 2. 1993 | 30,040 | 16,998 | 13,042 | 157.4 | 339.2 | 92.7 | 0 |
| 3. 1994 | 69,914 | 12,794 | 57,120 | 692.2 | 521.2 | 747.2 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
<------------->------------->------------->------------->-------------->-------------->-------------->-------------->
<CAPTION>
!-------------#--------------#--------------#-----------------------------#
| |for Time | | Net Balance Sheet Reserves |
| |Money | 33 | After Discount |
| |--------------| |--------------#--------------|
| | 32 |Inter-Company | 34 | 35 |
| | | Pooling | | Loss |
| | Loss |Participation | Losses | Expenses |
| | Expense | Percentage | Unpaid | Unpaid |
|-------------|--------------|--------------|--------------|--------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | X X X X | 42,959 | 17 |
| 2. 1993 | 0 | 0.0 | 32,596 | 22 |
| 3. 1994 | 0 | 0.0 | 9,463 | 1,004 |
|-------------|--------------|--------------|--------------|--------------|
| 4. Totals | 0 | X X X X | 85,018 | 1,043 |
<------------->-------------->-------------->-------------->-------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 2A - HOMEOWNERS/FARMOWNERS
<TABLE>
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 11,911 | 13,937 | 15,824 | 15,931 | 18,336 | 17,430 | 17,121 |
| 2. 1985 | 62,117 | 63,601 | 63,108 | 62,948 | 64,542 | 63,821 | 63,877 |
| 3. 1986 | X X X X | 65,861 | 59,216 | 59,239 | 59,561 | 58,228 | 57,611 |
| 4. 1987 | X X X X | X X X X | 69,251 | 67,769 | 69,956 | 69,965 | 69,807 |
| 5. 1988 | X X X X | X X X X | X X X X | 94,222 | 92,355 | 92,878 | 93,222 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 122,775 | 138,215 | 140,213 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 144,120 | 159,585 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 158,891 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 17,216 | 17,367 | 17,511 | 144 | 294 |
| 2. 1985 | 65,100 | 64,446 | 64,521 | 75 | (579)|
| 3. 1986 | 58,137 | 58,185 | 58,313 | 128 | 176 |
| 4. 1987 | 70,918 | 73,430 | 73,565 | 135 | 2,647 |
| 5. 1988 | 94,761 | 95,635 | 95,652 | 17 | 891 |
| 6. 1989 | 140,828 | 140,843 | 141,239 | 396 | 412 |
| 7. 1990 | 160,399 | 163,381 | 163,582 | 201 | 3,183 |
| 8. 1991 | 160,544 | 163,645 | 164,343 | 697 | 3,798 |
| 9. 1992 | 218,332 | 202,077 | 203,316 | 1,239 | (15,016)|
| 10. 1993 | X X X X | 173,256 | 177,437 | 4,181 | X X X X |
| 11. 1994 | X X X X | X X X X | 258,983 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
12. Totals | 7,212 | (4,193)|
| | |
>---------------------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> | | |
| 1. Prior | 115,304 | 121,108 | 125,149 | 132,319 | 145,308 | 144,714 | 148,977 |
| 2. 1985 | 123,125 | 128,381 | 135,851 | 144,477 | 155,848 | 153,959 | 155,274 |
| 3. 1986 | X X X X | 160,846 | 157,516 | 165,684 | 178,927 | 180,734 | 180,892 |
| 4. 1987 | X X X X | X X X X | 181,557 | 180,742 | 195,274 | 208,843 | 211,659 |
| 5. 1988 | X X X X | X X X X | X X X X | 243,691 | 245,004 | 249,305 | 253,318 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 298,808 | 295,550 | 318,589 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 337,161 | 370,954 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 389,033 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL - (CONTINUED)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 150,805 | 152,465 | 154,375 | 1,910 | 3,570 |
| 2. 1985 | 154,699 | 155,436 | 155,495 | 59 | 796 |
| 3. 1986 | 182,687 | 185,039 | 186,550 | 1,511 | 3,863 |
| 4. 1987 | 212,977 | 213,436 | 214,250 | 814 | 1,273 |
| 5. 1988 | 251,493 | 247,503 | 247,451 | (52)| (4,043)|
| 6. 1989 | 319,310 | 318,672 | 318,700 | 28 | (610)|
| 7. 1990 | 364,892 | 360,391 | 350,830 | (9,562)| (14,062)|
| 8. 1991 | 395,472 | 383,970 | 375,499 | (8,470)| (19,972)|
| 9. 1992 | 408,674 | 413,255 | 404,515 | (8,740)| (4,159)|
| 10. 1993 | X X X X | 389,603 | 392,184 | 2,581 | X X X X |
| 11. 1994 | X X X X | X X X X | 316,238 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
12. Totals | (19,921)| (33,344)|
| | |
<-------------->-------------->
SCHEDULE P - PART 2C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 179,140 | 245,708 | 265,763 | 273,016 | 284,169 | 289,516 | 289,567 |
| 2. 1985 | 157,128 | 192,233 | 186,236 | 197,506 | 206,518 | 211,012 | 215,122 |
| 3. 1986 | X X X X | 287,529 | 289,397 | 288,155 | 279,301 | 288,799 | 289,138 |
| 4. 1987 | X X X X | X X X X | 347,425 | 340,956 | 345,629 | 362,987 | 367,845 |
| 5. 1988 | X X X X | X X X X | X X X X | 456,537 | 459,415 | 462,279 | 461,410 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 459,118 | 456,419 | 460,309 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 489,325 | 489,765 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 523,913 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL - (CONTINUED)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 281,978 | 281,651 | 284,207 | 2,556 | 2,229 |
| 2. 1985 | 210,804 | 211,940 | 211,218 | (722)| 414 |
| 3. 1986 | 283,660 | 285,298 | 287,181 | 1,883 | 3,521 |
| 4. 1987 | 367,511 | 366,225 | 368,471 | 2,245 | 959 |
| 5. 1988 | 458,048 | 456,039 | 459,189 | 3,151 | 1,142 |
| 6. 1989 | 451,992 | 448,681 | 450,955 | 2,275 | (1,037)|
| 7. 1990 | 480,575 | 475,959 | 481,953 | 5,993 | 1,378 |
| 8. 1991 | 517,895 | 498,676 | 481,019 | (17,657)| (36,875)|
| 9. 1992 | 507,847 | 500,547 | 467,708 | (32,839)| (40,139)|
| 10. 1993 | X X X X | 439,138 | 428,794 | (10,344)| X X X X |
| 11. 1994 | X X X X | X X X X | 454,541 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
12. Totals | (43,459)| (68,409)|
| | |
<-------------->-------------->
SCHEDULE P - PART 2D - WORKERS' COMPENSATION
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 850,890 | 900,057 | 868,922 | 903,147 | 914,481 | 920,660 | 919,932 |
| 2. 1985 | 466,667 | 477,936 | 482,631 | 485,265 | 499,871 | 503,575 | 542,041 |
| 3. 1986 | X X X X | 811,265 | 758,853 | 750,274 | 730,091 | 729,085 | 725,374 |
| 4. 1987 | X X X X | X X X X | 890,468 | 895,621 | 932,301 | 940,542 | 936,894 |
| 5. 1988 | X X X X | X X X X | X X X X | 1,257,294 | 1,260,320 | 1,270,917 | 1,288,737 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 1,489,382 | 1,522,011 | 1,580,307 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 2,037,615 | 1,983,616 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 2,187,916 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2D - WORKERS' COMPENSATION - (CONTINUED)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 923,745 | 941,658 | 927,272 | (14,387)| 3,526 |
| 2. 1985 | 547,171 | 548,560 | 543,547 | (5,013)| (3,624)|
| 3. 1986 | 728,238 | 728,547 | 731,544 | 2,997 | 3,305 |
| 4. 1987 | 940,284 | 939,638 | 938,412 | (1,226)| (1,871)|
| 5. 1988 | 1,297,348 | 1,299,514 | 1,291,229 | (8,284)| (6,119)|
| 6. 1989 | 1,630,568 | 1,661,567 | 1,658,454 | (3,113)| 27,886 |
| 7. 1990 | 2,001,939 | 1,990,077 | 1,968,808 | (21,269)| (33,132)|
| 8. 1991 | 2,189,188 | 2,046,381 | 1,948,481 | (97,901)| (240,708)|
| 9. 1992 | 1,856,951 | 1,811,113 | 1,633,360 | (177,754)| (223,591)|
| 10. 1993 | X X X X | 1,478,078 | 1,420,839 | (57,239)| X X X X |
| 11. 1994 | X X X X | X X X X | 1,343,786 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
12. Totals | (383,187)| (474,327)|
| | |
<-------------->-------------->
SCHEDULE P - PART 2E - COMMERCIAL MULTIPLE PERIL
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 121,269 | 183,614 | 232,424 | 246,982 | 257,227 | 260,373 | 266,277 |
| 2. 1985 | 216,990 | 225,348 | 200,680 | 193,785 | 200,433 | 204,962 | 210,756 |
| 3. 1986 | X X X X | 233,973 | 223,069 | 222,859 | 211,938 | 204,773 | 209,693 |
| 4. 1987 | X X X X | X X X X | 239,746 | 240,058 | 235,978 | 239,217 | 249,257 |
| 5. 1988 | X X X X | X X X X | X X X X | 308,265 | 301,816 | 291,731 | 294,338 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 386,483 | 407,317 | 414,193 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 461,215 | 457,079 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 521,350 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2E - COMMERCIAL MULTIPLE PERIL - (CONTINUED)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 274,021 | 277,801 | 301,587 | 23,786 | 27,566 |
| 2. 1985 | 214,794 | 216,087 | 218,138 | 2,051 | 3,344 |
| 3. 1986 | 203,517 | 208,796 | 212,715 | 3,919 | 9,198 |
| 4. 1987 | 249,500 | 252,745 | 255,694 | 2,949 | 6,193 |
| 5. 1988 | 293,852 | 297,965 | 306,790 | 8,826 | 12,939 |
| 6. 1989 | 416,772 | 428,718 | 436,928 | 8,210 | 20,156 |
| 7. 1990 | 454,210 | 456,113 | 469,196 | 13,083 | 14,986 |
| 8. 1991 | 510,718 | 501,847 | 488,647 | (13,199)| (22,070)|
| 9. 1992 | 547,757 | 554,254 | 553,526 | (728)| 5,769 |
| 10. 1993 | X X X X | 586,911 | 579,904 | (7,007)| X X X X |
| 11. 1994 | X X X X | X X X X | 664,443 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
12. Totals | 41,889 | 78,079 |
| | |
<-------------->-------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 2F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
<TABLE>
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 293,889 | 496,618 | 586,437 | 585,795 | 605,854 | 607,998 | 609,355 |
| 2. 1985 | 150,292 | 212,370 | 209,270 | 203,446 | 176,981 | 170,307 | 162,155 |
| 3. 1986 | X X X X | 295,137 | 286,746 | 268,982 | 211,478 | 182,871 | 178,095 |
| 4. 1987 | X X X X | X X X X | 131,467 | 119,819 | 106,835 | 76,688 | 79,978 |
| 5. 1988 | X X X X | X X X X | X X X X | 45,428 | 46,929 | 46,820 | 74,078 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 32,140 | 31,857 | 31,774 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 31,123 | 37,193 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 31,562 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE-(CONTINUED)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 604,491 | 603,818 | 608,758 | 4,940 | 4,266 |
| 2. 1985 | 165,500 | 156,929 | 158,800 | 1,871 | (6,700)|
| 3. 1986 | 171,285 | 166,971 | 166,790 | (181)| (4,495)|
| 4. 1987 | 74,745 | 69,234 | 66,869 | (2,365)| (7,876)|
| 5. 1988 | 67,241 | 57,465 | 65,388 | 7,924 | (1,852)|
| 6. 1989 | 42,595 | 29,071 | 37,585 | 8,514 | (5,009)|
| 7. 1990 | 29,146 | 44,204 | 56,937 | 12,733 | 27,791 |
| 8. 1991 | 40,886 | 29,347 | 30,782 | 1,435 | (10,104)|
| 9. 1992 | 34,469 | 31,173 | 34,654 | 3,481 | 185 |
| 10. 1993 | X X X X | 25,533 | 25,278 | (255)| X X X X |
| 11. 1994 | X X X X | X X X X | 22,948 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
12. Totals | 38,096 | (3,794)|
| | |
<-------------->-------------->
SCHEDULE P - PART 2F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 62,766 | 72,238 | 73,350 | 62,129 | 58,733 |
| 5. 1988 | X X X X | X X X X | X X X X | 184,382 | 181,269 | 147,034 | 103,581 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 222,289 | 206,253 | 187,452 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 208,940 | 189,252 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 211,674 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE-(CONTINUED)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 59,316 | 57,492 | 57,876 | 384 | (1,441)|
| 5. 1988 | 104,357 | 105,469 | 97,527 | (7,942)| (6,830)|
| 6. 1989 | 162,713 | 163,139 | 152,649 | (10,490)| (10,065)|
| 7. 1990 | 185,243 | 154,774 | 139,723 | (15,051)| (45,520)|
| 8. 1991 | 201,205 | 182,895 | 184,038 | 1,143 | (17,167)|
| 9. 1992 | 205,724 | 185,386 | 189,732 | 4,346 | (15,992)|
| 10. 1993 | X X X X | 221,304 | 214,158 | (7,146)| X X X X |
| 11. 1994 | X X X X | X X X X | 235,713 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
12. Totals | (34,757)| (97,015)|
| | |
<-------------->-------------->
SCHEDULE P - PART 2G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 4,251 | 4,254 | 3,877 | 5,294 | 6,438 | 6,927 | 7,843 |
| 2. 1985 | 4,496 | 4,201 | 4,185 | 4,280 | 4,449 | 4,602 | 4,572 |
| 3. 1986 | X X X X | 12,063 | 11,799 | 11,888 | 11,676 | 11,729 | 11,755 |
| 4. 1987 | X X X X | X X X X | 10,779 | 10,451 | 10,108 | 9,391 | 8,715 |
| 5. 1988 | X X X X | X X X X | X X X X | 15,801 | 14,417 | 13,140 | 12,334 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 14,036 | 12,982 | 13,563 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 13,671 | 12,193 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 16,204 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY) - (CONTINUE)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 9,040 | 9,883 | 10,152 | 269 | 1,111 |
| 2. 1985 | 4,487 | 4,473 | 4,502 | 28 | 15 |
| 3. 1986 | 11,750 | 11,720 | 11,693 | (26)| (57)|
| 4. 1987 | 8,726 | 8,579 | 8,665 | 87 | (61)|
| 5. 1988 | 11,286 | 11,311 | 10,974 | (338)| (312)|
| 6. 1989 | 13,251 | 12,774 | 12,499 | (276)| (753)|
| 7. 1990 | 14,926 | 13,642 | 13,316 | (326)| (1,610)|
| 8. 1991 | 12,980 | 11,980 | 11,728 | (252)| (1,253)|
| 9. 1992 | 13,689 | 12,402 | 11,988 | (414)| (1,700)|
| 10. 1993 | X X X X | 14,015 | 16,285 | 2,270 | X X X X |
| 11. 1994 | X X X X | X X X X | 36,870 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
12. Totals | 1,022 | (4,619)|
| | |
<-------------->-------------->
SCHEDULE P - PART 2H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 681,040 | 898,567 | 1,047,471 | 1,170,120 | 1,327,697 | 1,461,200 | 1,502,266 |
| 2. 1985 | 348,677 | 411,243 | 421,981 | 416,138 | 432,679 | 464,201 | 462,357 |
| 3. 1986 | X X X X | 686,537 | 678,712 | 632,112 | 571,822 | 518,440 | 511,436 |
| 4. 1987 | X X X X | X X X X | 402,135 | 429,954 | 371,141 | 352,200 | 325,872 |
| 5. 1988 | X X X X | X X X X | X X X X | 382,412 | 358,552 | 353,163 | 346,676 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 325,461 | 321,129 | 331,119 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 411,284 | 404,873 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 392,904 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2H - SECTION 1 - OTHER LIABILITY - OCCURRENCE - (CONTINUED)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 3,217,772 | 4,238,314 | 4,504,662 | 266,348 | 1,286,890 |
| 2. 1985 | 479,547 | 487,962 | 494,599 | 6,636 | 15,052 |
| 3. 1986 | 491,316 | 486,138 | 484,736 | (1,402)| (6,581)|
| 4. 1987 | 309,632 | 307,772 | 304,553 | (3,219)| (5,080)|
| 5. 1988 | 337,481 | 340,798 | 345,862 | 5,064 | 8,381 |
| 6. 1989 | 342,347 | 357,189 | 363,176 | 5,988 | 20,829 |
| 7. 1990 | 398,316 | 395,998 | 400,488 | 4,490 | 2,171 |
| 8. 1991 | 379,856 | 357,926 | 377,362 | 19,437 | (2,494)|
| 9. 1992 | 333,516 | 348,891 | 335,205 | (13,686)| 1,689 |
| 10. 1993 | X X X X | 354,091 | 325,709 | (28,382)| X X X X |
| 11. 1994 | X X X X | X X X X | 365,764 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
12. Totals | 261,274 | 1,320,859 |
| | |
<-------------->-------------->
SCHEDULE P - PART 2H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 279,392 | 246,181 | 301,423 | 223,083 | 199,276 |
| 5. 1988 | X X X X | X X X X | X X X X | 278,919 | 302,250 | 300,613 | 219,999 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 294,493 | 295,699 | 249,121 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 304,875 | 273,631 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 301,017 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE - (CONTINUED)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 185,349 | 177,146 | 173,668 | (3,478)| (11,681)|
| 5. 1988 | 209,331 | 193,022 | 189,327 | (3,695)| (20,004)|
| 6. 1989 | 234,873 | 237,434 | 227,492 | (9,941)| (7,381)|
| 7. 1990 | 273,334 | 280,647 | 273,999 | (6,648)| 665 |
| 8. 1991 | 293,319 | 291,634 | 272,919 | (18,715)| (20,400)|
| 9. 1992 | 304,114 | 263,061 | 252,466 | (10,595)| (51,647)|
| 10. 1993 | X X X X | 302,565 | 311,764 | 9,199 | X X X X |
| 11. 1994 | X X X X | X X X X | 393,052 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
12. Totals | (43,874)| (110,448)|
| | |
<-------------->-------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 2I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
<TABLE>
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
| | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 2. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT) - (CONTINUED)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
| | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 123,150 | 105,853 | 99,937 | (5,916)| (23,213)|
| 2. 1993 | X X X X | 76,909 | 96,225 | 19,316 | X X X X |
| 3. 1994 | X X X X | X X X X | 175,499 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
4. Totals | 13,400 | (23,213)|
| | |
<-------------->-------------->
SCHEDULE P - PART 2J - AUTO PHYSICAL DAMAGE
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
| | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 2. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
| | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 111,638 | 68,310 | 54,685 | (13,626)| (56,953)|
| 2. 1993 | X X X X | 213,757 | 202,274 | (11,483)| X X X X |
| 3. 1994 | X X X X | X X X X | 221,101 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
4. Totals | (25,109)| (56,953)|
| | |
<-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2K - FIDELITY/SURETY
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
| | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 2. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
| | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 75,413 | 74,968 | 72,980 | (1,988)| (2,433)|
| 2. 1993 | X X X X | 32,527 | 30,134 | (2,393)| X X X X |
| 3. 1994 | X X X X | X X X X | 37,963 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
4. Totals | (4,381)| (2,433)|
| | |
<-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
| | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 2. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
| | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 675,946 | 652,804 | 662,553 | 9,749 | (13,393)|
| 2. 1993 | X X X X | 363,407 | 344,459 | (18,948)| X X X X |
| 3. 1994 | X X X X | X X X X | 408,246 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
4. Totals | (9,200)| (13,393)|
| | |
<-------------->-------------->
SCHEDULE P - PART 2M - INTERNATIONAL
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
| | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 4,286 | 3,922 | 3,675 | 3,284 | 558 | 980 | 2,438 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2M - INTERNATIONAL - (CONTINUED)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
| | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 2,438 | 2,438 | 2,438 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 | 0 |
| 9. 1992 | 0 | 0 | 0 | 0 | 0 |
| 10. 1993 | X X X X | 0 | 0 | 0 | X X X X |
| 11. 1994 | X X X X | X X X X | 0 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
12. Totals | 0 | 0 |
| | |
<-------------->-------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 2N - REINSURANCE A
<TABLE>
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. 1988 | X X X X | X X X X | X X X X | 7,276 | 9,524 | 9,000 | 7,790 |
| 2. 1989 | X X X X | X X X X | X X X X | X X X X | 54,263 | 53,955 | 61,097 |
| 3. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 40,349 | 51,076 |
| 4. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 14,527 |
| 5. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 6. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2N - REINSURANCE A - (CONTINUED)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. 1988 | 7,789 | 7,789 | 9,382 | 1,593 | 1,593 |
| 2. 1989 | 60,659 | 62,102 | 61,256 | (846)| 597 |
| 3. 1990 | 44,339 | 44,640 | 46,973 | 2,334 | 2,634 |
| 4. 1991 | 35,744 | 38,261 | 41,373 | 3,111 | 5,628 |
| 5. 1992 | 109,945 | 127,314 | 130,517 | 3,203 | 20,572 |
| 6. 1993 | X X X X | 61,988 | 70,378 | 8,390 | X X X X |
| 7. 1994 | X X X X | X X X X | 66,898 | X X X X | X X X X |
<------------------->------------->------------->-------------|--------------|--------------|
8. Totals | 17,784 | 31,025 |
<-------------->-------------->
SCHEDULE P - PART 2O - REINSURANCE B
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. 1988 | X X X X | X X X X | X X X X | 77,448 | 70,694 | 68,842 | 68,497 |
| 2. 1989 | X X X X | X X X X | X X X X | X X X X | 127,264 | 126,567 | 127,463 |
| 3. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 123,160 | 104,462 |
| 4. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 128,753 |
| 5. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 6. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. 1988 | 67,897 | 65,856 | 61,949 | (3,908)| (5,948)|
| 2. 1989 | 127,631 | 64,160 | 76,407 | 12,246 | (51,225)|
| 3. 1990 | 104,953 | 134,430 | 80,518 | (53,912)| (24,435)|
| 4. 1991 | 122,384 | 105,641 | 86,475 | (19,167)| (35,910)|
| 5. 1992 | 116,932 | 91,528 | 75,683 | (15,845)| (41,249)|
| 6. 1993 | X X X X | 129,876 | 71,855 | (58,021)| X X X X |
| 7. 1994 | X X X X | X X X X | 72,132 | X X X X | X X X X |
<------------------->------------->------------->-------------|--------------|--------------|
8. Totals | (138,607)| (158,767)|
<-------------->-------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2P - REINSURANCE C
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. 1988 | X X X X | X X X X | X X X X | 62,139 | 62,443 | 62,436 | 62,425 |
| 2. 1989 | X X X X | X X X X | X X X X | X X X X | 36,570 | 37,120 | 37,608 |
| 3. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 27,174 | 27,670 |
| 4. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 15,730 |
| 5. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 6. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. 1988 | 62,416 | 62,334 | 62,337 | 3 | (79)|
| 2. 1989 | 38,646 | 38,785 | 38,852 | 68 | 206 |
| 3. 1990 | 35,516 | 35,715 | 35,147 | (568)| (369)|
| 4. 1991 | 2,978 | 3,291 | 3,347 | 56 | 368 |
| 5. 1992 | 0 | 101 | 102 | 1 | 102 |
| 6. 1993 | X X X X | 120 | 329 | 209 | X X X X |
| 7. 1994 | X X X X | X X X X | 637 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
8. Totals | (231)| 228 |
| | |
<-------------->-------------->
SCHEDULE P - PART 2Q - REINSURANCE D
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 137,305 | 161,169 | 301,037 | 329,118 | 358,470 | 385,944 | 391,337 |
| 2. 1985 | 90,501 | 123,307 | 125,726 | 143,396 | 148,112 | 146,763 | 144,326 |
| 3. 1986 | X X X X | 137,803 | 120,160 | 125,653 | 133,461 | 134,775 | 133,908 |
| 4. 1987 | X X X X | X X X X | 169,683 | 164,244 | 164,324 | 171,622 | 170,773 |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2Q - REINSURANCE D - (CONTINUED)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 390,840 | 391,973 | 403,237 | 11,265 | 12,397 |
| 2. 1985 | 143,726 | 139,592 | 130,720 | (8,872)| (13,006)|
| 3. 1986 | 131,141 | 125,739 | 126,573 | 834 | (4,568)|
| 4. 1987 | 170,816 | 168,878 | 172,318 | 3,440 | 1,503 |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
5. Totals | 6,667 | (3,674)|
| | |
<-------------->-------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 2R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
| | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 150,439 | 164,723 | 190,327 | 201,727 | 223,484 | 258,432 | 321,588 |
| 2. 1985 | 104,073 | 108,056 | 102,600 | 100,242 | 109,749 | 104,644 | 118,739 |
| 3. 1986 | X X X X | 159,567 | 157,186 | 155,570 | 149,125 | 151,397 | 157,776 |
| 4. 1987 | X X X X | X X X X | 134,907 | 136,255 | 139,310 | 133,401 | 116,321 |
| 5. 1988 | X X X X | X X X X | X X X X | 103,761 | 103,139 | 104,337 | 99,043 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 98,645 | 98,193 | 98,024 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 109,828 | 108,021 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 79,401 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE -(CONTINUED)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development** |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
| | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 326,400 | 324,082 | 267,349 | (56,732)| (59,050)|
| 2. 1985 | 121,609 | 114,867 | 114,238 | (629)| (7,371)|
| 3. 1986 | 158,949 | 159,526 | 157,222 | (2,304)| (1,726)|
| 4. 1987 | 112,420 | 111,354 | 109,711 | (1,642)| (2,708)|
| 5. 1988 | 95,801 | 92,699 | 94,619 | 1,920 | (1,182)|
| 6. 1989 | 94,225 | 87,447 | 94,040 | 6,593 | (185)|
| 7. 1990 | 102,108 | 113,025 | 115,696 | 2,670 | 13,588 |
| 8. 1991 | 79,434 | 83,569 | 90,493 | 6,924 | 11,059 |
| 9. 1992 | 53,115 | 56,515 | 61,812 | 5,297 | 8,697 |
| 10. 1993 | X X X X | 55,947 | 56,751 | 804 | X X X X |
| 11. 1994 | X X X X | X X X X | 59,887 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
12. Totals | (37,099)| (38,880)|
| | |
<-------------->-------------->
SCHEDULE P - PART 2R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
<CAPTION>
!-------------------#--------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
| | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 1,515 | 1,514 | 136 | 137 | 137 |
| 5. 1988 | X X X X | X X X X | X X X X | 704 | 553 | 552 | 553 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 649 | 649 | 649 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 293 | 300 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 168 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 2R - SECTION 2 - PRODUCTS LIABILITY- CLAIMS-MADE -(CONTINUED)
<CAPTION>
!-------------------#-----------------------------------------#-----------------------------#
| 1 | | Development** |
| |-------------#-------------#-------------|--------------#--------------|
| Years in Which | 9 | 10 | 11 | 12 | 13 |
| Losses Were | 1992 | 1993 | 1994 | One Year | Two Year |
| Incurred | | | | | |
| | | | | | |
|-------------------|-------------|-------------|-------------|--------------|--------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 98 | 99 | 99 | 0 | 1 |
| 5. 1988 | 510 | 510 | 509 | (1)| (1)|
| 6. 1989 | 531 | 531 | 531 | 0 | 0 |
| 7. 1990 | 124 | 124 | 124 | 0 | 0 |
| 8. 1991 | 18 | 18 | 18 | 0 | 0 |
| 9. 1992 | 3 | 3 | 3 | 0 | 0 |
| 10. 1993 | X X X X | 4 | 3 | (1)| X X X X |
| 11. 1994 | X X X X | X X X X | 0 | X X X X | X X X X |
| | | | | | |
<------------------->------------->------------->-------------|--------------|--------------|
| | |
12. Totals | (1)| 1 |
| | |
<-------------->-------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 3A - HOMEOWNERS/FARMOWNERS
<TABLE>
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 2,831 | 6,199 | 8,998 | 10,429 | 11,648 | 12,011 |
| 2. 1985 | 38,850 | 54,569 | 57,593 | 59,318 | 60,356 | 61,456 | 62,351 |
| 3. 1986 | X X X X | 35,945 | 50,355 | 52,895 | 54,023 | 55,416 | 56,125 |
| 4. 1987 | X X X X | X X X X | 38,122 | 58,523 | 61,501 | 64,193 | 65,451 |
| 5. 1988 | X X X X | X X X X | X X X X | 49,210 | 79,587 | 83,370 | 85,844 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 71,302 | 120,691 | 124,932 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 92,035 | 138,853 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 97,832 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3A - HOMEOWNERS/FARMOWNERS - (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims | Claims |
| Losses Were | 9 | 10 | 11 | Closed | Closed |
| Incurred | 1992 | 1993 | 1994 | With Loss | Without |
| | | | | Payment |Loss Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 12,800 | 13,167 | 13,326 | 289,258 | 66,286 |
| 2. 1985 | 63,416 | 62,735 | 62,839 | 35,303 | 9,520 |
| 3. 1986 | 56,730 | 56,875 | 57,018 | 29,370 | 9,234 |
| 4. 1987 | 67,081 | 70,167 | 69,959 | 34,349 | 10,989 |
| 5. 1988 | 88,104 | 89,176 | 90,187 | 37,199 | 12,613 |
| 6. 1989 | 128,887 | 129,480 | 131,256 | 50,210 | 17,850 |
| 7. 1990 | 143,714 | 149,898 | 152,338 | 53,983 | 18,926 |
| 8. 1991 | 134,371 | 142,751 | 148,585 | 60,026 | 20,578 |
| 9. 1992 | 129,003 | 168,493 | 175,882 | 61,697 | 19,957 |
| 10. 1993 | X X X X | 101,293 | 135,647 | 50,959 | 18,809 |
| 11. 1994 | X X X X | X X X X | 148,446 | 52,455 | 18,211 |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 000 | 44,939 | 81,656 | 100,536 | 113,910 | 119,708 | 124,540 |
| 2. 1985 | 30,986 | 71,312 | 99,847 | 118,525 | 129,168 | 135,247 | 139,937 |
| 3. 1986 | X X X X | 38,033 | 74,470 | 104,091 | 124,955 | 138,387 | 146,954 |
| 4. 1987 | X X X X | X X X X | 38,663 | 93,343 | 126,301 | 151,680 | 170,872 |
| 5. 1988 | X X X X | X X X X | X X X X | 48,594 | 110,584 | 148,320 | 179,846 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 57,250 | 134,406 | 184,596 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 71,789 | 161,442 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 73,978 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL - (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims | Claims |
| Losses Were | 9 | 10 | 11 | Closed | Closed |
| Incurred | 1992 | 1993 | 1994 | With Loss | Without |
| | | | | Payment |Loss Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 128,469 | 131,593 | 133,804 | 374,084 | 147,792 |
| 2. 1985 | 142,048 | 143,623 | 144,499 | 43,822 | 18,725 |
| 3. 1986 | 153,406 | 158,299 | 160,849 | 45,423 | 21,000 |
| 4. 1987 | 178,800 | 186,002 | 188,534 | 51,131 | 25,437 |
| 5. 1988 | 199,535 | 209,426 | 214,146 | 56,252 | 27,540 |
| 6. 1989 | 221,341 | 245,940 | 259,710 | 63,089 | 29,473 |
| 7. 1990 | 217,595 | 261,424 | 283,905 | 67,088 | 29,204 |
| 8. 1991 | 164,746 | 231,995 | 280,088 | 64,617 | 29,427 |
| 9. 1992 | 77,634 | 179,661 | 251,693 | 62,252 | 27,831 |
| 10. 1993 | X X X X | 77,278 | 176,216 | 55,511 | 26,600 |
| 11. 1994 | X X X X | X X X X | 79,523 | 34,725 | 19,340 |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 000 | 52,363 | 98,862 | 135,506 | 162,761 | 176,458 | 180,975 |
| 2. 1985 | 25,494 | 57,863 | 86,635 | 114,824 | 136,757 | 147,710 | 157,751 |
| 3. 1986 | X X X X | 28,865 | 67,871 | 108,474 | 138,398 | 163,230 | 177,484 |
| 4. 1987 | X X X X | X X X X | 35,077 | 86,537 | 137,055 | 179,958 | 206,231 |
| 5. 1988 | X X X X | X X X X | X X X X | 41,639 | 104,428 | 152,393 | 205,255 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 51,661 | 123,580 | 197,448 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 57,761 | 139,716 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 55,749 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL - (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims | Claims |
| Losses Were | 9 | 10 | 11 | Closed | Closed |
| Incurred | 1992 | 1993 | 1994 | With Loss | Without |
| | | | | Payment |Loss Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 186,189 | 189,436 | 192,136 | 321,526 | 164,454 |
| 2. 1985 | 163,097 | 165,423 | 166,837 | 45,376 | 30,641 |
| 3. 1986 | 189,218 | 197,410 | 201,962 | 53,970 | 41,620 |
| 4. 1987 | 229,240 | 240,135 | 247,905 | 60,982 | 46,672 |
| 5. 1988 | 236,984 | 261,747 | 273,773 | 62,831 | 45,536 |
| 6. 1989 | 252,179 | 299,738 | 320,399 | 63,478 | 43,010 |
| 7. 1990 | 219,887 | 298,318 | 350,336 | 60,392 | 38,149 |
| 8. 1991 | 134,908 | 222,786 | 276,118 | 55,474 | 34,088 |
| 9. 1992 | 53,990 | 127,122 | 210,191 | 46,552 | 27,177 |
| 10. 1993 | X X X X | 57,166 | 140,964 | 42,983 | 22,855 |
| 11. 1994 | X X X X | X X X X | 66,244 | 33,053 | 16,503 |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3D - WORKERS' COMPENSATION
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 000 | 130,258 | 220,791 | 298,250 | 356,702 | 396,095 | 441,656 |
| 2. 1985 | 95,510 | 223,323 | 270,977 | 326,674 | 357,985 | 382,358 | 439,472 |
| 3. 1986 | X X X X | 125,153 | 295,782 | 406,227 | 474,499 | 525,496 | 568,625 |
| 4. 1987 | X X X X | X X X X | 166,427 | 425,814 | 563,615 | 664,174 | 695,431 |
| 5. 1988 | X X X X | X X X X | X X X X | 184,350 | 515,900 | 728,120 | 883,556 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 237,431 | 681,258 | 987,095 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 282,541 | 849,350 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 306,367 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3D - WORKERS' COMPENSATION - (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims | Claims |
| Losses Were | 9 | 10 | 11 | Closed | Closed |
| Incurred | 1992 | 1993 | 1994 | With Loss | Without |
| | | | | Payment |Loss Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 475,576 | 513,438 | 548,831 | 1,596,492 | 307,843 |
| 2. 1985 | 456,711 | 466,711 | 474,861 | 192,326 | 46,460 |
| 3. 1986 | 593,079 | 613,628 | 627,025 | 225,047 | 63,066 |
| 4. 1987 | 743,294 | 774,176 | 795,464 | 238,997 | 70,486 |
| 5. 1988 | 979,513 | 1,034,925 | 1,067,084 | 259,531 | 80,334 |
| 6. 1989 | 1,172,124 | 1,284,156 | 1,351,392 | 257,456 | 72,317 |
| 7. 1990 | 1,202,027 | 1,422,272 | 1,540,035 | 263,304 | 80,685 |
| 8. 1991 | 750,209 | 1,030,896 | 1,197,817 | 240,882 | 69,336 |
| 9. 1992 | 214,419 | 603,867 | 812,823 | 166,800 | 60,251 |
| 10. 1993 | X X X X | 172,708 | 459,889 | 125,589 | 47,675 |
| 11. 1994 | X X X X | X X X X | 167,955 | 82,378 | 39,878 |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3E - COMMERCIAL MULTIPLE PERIL
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 000 | 49,951 | 97,276 | 130,933 | 156,055 | 170,422 | 185,707 |
| 2. 1985 | 65,936 | 113,791 | 127,453 | 148,032 | 164,470 | 175,050 | 186,778 |
| 3. 1986 | X X X X | 50,003 | 92,785 | 114,133 | 134,888 | 152,121 | 167,334 |
| 4. 1987 | X X X X | X X X X | 56,710 | 110,117 | 134,803 | 155,903 | 178,898 |
| 5. 1988 | X X X X | X X X X | X X X X | 77,257 | 144,592 | 170,123 | 187,635 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 105,545 | 223,811 | 263,275 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 117,597 | 208,883 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 149,903 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3E - COMMERCIAL MULTIPLE PERIL - (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims | Claims |
| Losses Were | 9 | 10 | 11 | Closed | Closed |
| Incurred | 1992 | 1993 | 1994 | With Loss | Without |
| | | | | Payment |Loss Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 198,336 | 205,967 | 226,534 | 350,485 | 116,523 |
| 2. 1985 | 198,246 | 201,297 | 204,994 | 37,501 | 18,734 |
| 3. 1986 | 175,696 | 184,490 | 189,604 | 30,619 | 20,953 |
| 4. 1987 | 200,640 | 212,529 | 221,665 | 32,645 | 19,715 |
| 5. 1988 | 219,599 | 242,073 | 264,991 | 38,657 | 24,043 |
| 6. 1989 | 300,297 | 344,097 | 373,323 | 50,698 | 32,012 |
| 7. 1990 | 259,705 | 312,246 | 359,874 | 55,327 | 34,399 |
| 8. 1991 | 238,435 | 301,173 | 364,823 | 54,492 | 35,233 |
| 9. 1992 | 183,122 | 292,320 | 363,864 | 49,639 | 32,388 |
| 10. 1993 | X X X X | 144,538 | 248,462 | 45,770 | 30,853 |
| 11. 1994 | X X X X | X X X X | 192,911 | 35,428 | 23,821 |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 3F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
<TABLE>
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 50,117 | 123,878 | 197,092 | 251,997 | 301,005 | 328,261 |
| 2. 1985 | 189 | 3,678 | 12,259 | 30,484 | 50,073 | 65,357 | 76,675 |
| 3. 1986 | X X X X | 296 | 3,698 | 14,042 | 32,768 | 49,317 | 67,987 |
| 4. 1987 | X X X X | X X X X | 232 | 3,364 | 7,364 | 16,494 | 24,992 |
| 5. 1988 | X X X X | X X X X | X X X X | 130 | 830 | (1,722)| 42 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | (3)| (1,912)| (1,234)|
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | (292)| 566 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | (145)|
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE - (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims | Claims |
| Losses Were | 9 | 10 | 11 | Closed | Closed |
| Incurred | 1992 | 1993 | 1994 | With Loss |Without Loss |
| | | | | Payment | Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 353,923 | 373,852 | 385,670 | 8,279 | 16,391 |
| 2. 1985 | 86,952 | 95,017 | 102,525 | 2,230 | 5,023 |
| 3. 1986 | 76,694 | 92,762 | 98,056 | 1,801 | 4,767 |
| 4. 1987 | 29,397 | 32,744 | 37,961 | 859 | 2,417 |
| 5. 1988 | 4,088 | 7,050 | 14,192 | 300 | 1,285 |
| 6. 1989 | (1,407)| 2,565 | 5,739 | 310 | 1,350 |
| 7. 1990 | (998)| 7,665 | 15,017 | 429 | 1,501 |
| 8. 1991 | (1,132)| 1,452 | 7,396 | 136 | 1,174 |
| 9. 1992 | 157 | 851 | 7,512 | 108 | 1,007 |
| 10. 1993 | X X X X | 40 | 1,986 | 44 | 533 |
| 11. 1994 | X X X X | X X X X | 9 | 11 | 139 |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 141 | 4,361 | 13,814 | 22,206 | 27,542 |
| 5. 1988 | X X X X | X X X X | X X X X | 652 | 7,662 | 26,536 | 15,303 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 1,674 | 19,158 | 55,452 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 1,909 | 22,915 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 2,410 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
- (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims | Claims |
| Losses Were | 9 | 10 | 11 | Closed | Closed |
| Incurred | 1992 | 1993 | 1994 | With Loss |Without Loss |
| | | | | Payment | Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 33,950 | 39,841 | 40,358 | 341 | 1,151 |
| 5. 1988 | 33,432 | 46,278 | 48,184 | 779 | 2,356 |
| 6. 1989 | 58,889 | 71,881 | 79,076 | 1,140 | 3,383 |
| 7. 1990 | 64,105 | 70,021 | 80,665 | 1,155 | 3,504 |
| 8. 1991 | 29,967 | 60,231 | 86,025 | 1,061 | 3,668 |
| 9. 1992 | 3,537 | 35,448 | 88,258 | 1,143 | 4,347 |
| 10. 1993 | X X X X | 5,758 | 40,861 | 910 | 4,468 |
| 11. 1994 | X X X X | X X X X | 3,908 | 438 | 3,133 |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 000 | 705 | 2,022 | 3,642 | 5,190 | 6,143 | 7,255 |
| 2. 1985 | 2,669 | 3,368 | 2,427 | 3,121 | 3,588 | 4,062 | 4,356 |
| 3. 1986 | X X X X | 5,566 | 8,425 | 9,337 | 10,581 | 11,133 | 11,392 |
| 4. 1987 | X X X X | X X X X | 2,135 | 4,297 | 5,990 | 7,947 | 8,124 |
| 5. 1988 | X X X X | X X X X | X X X X | 3,442 | 7,276 | 9,305 | 8,856 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 4,371 | 7,529 | 9,792 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 4,315 | 8,458 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 5,161 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY) - (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims | Claims |
| Losses Were | 9 | 10 | 11 | Closed | Closed |
| Incurred | 1992 | 1993 | 1994 | With Loss |Without Loss |
| | | | | Payment | Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 8,730 | 9,417 | 9,649 | X X X X | X X X X |
| 2. 1985 | 4,345 | 4,364 | 4,428 | X X X X | X X X X |
| 3. 1986 | 11,671 | 11,633 | 11,650 | X X X X | X X X X |
| 4. 1987 | 8,356 | 8,369 | 8,487 | X X X X | X X X X |
| 5. 1988 | 9,107 | 9,364 | 9,405 | X X X X | X X X X |
| 6. 1989 | 10,637 | 11,368 | 11,722 | X X X X | X X X X |
| 7. 1990 | 10,228 | 11,465 | 12,454 | X X X X | X X X X |
| 8. 1991 | 8,900 | 10,278 | 10,544 | X X X X | X X X X |
| 9. 1992 | 3,408 | 7,752 | 9,468 | X X X X | X X X X |
| 10. 1993 | X X X X | 3,578 | 9,395 | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | 3,387 | X X X X | X X X X |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 000 | 189,094 | 358,059 | 507,174 | 658,379 | 820,687 | 956,685 |
| 2. 1985 | 6,584 | 31,822 | 76,786 | 137,156 | 172,455 | 251,689 | 279,472 |
| 3. 1986 | X X X X | 9,737 | 44,232 | 112,549 | 179,865 | 234,993 | 297,911 |
| 4. 1987 | X X X X | X X X X | 8,977 | 32,146 | 67,525 | 98,873 | 128,037 |
| 5. 1988 | X X X X | X X X X | X X X X | 14,952 | 41,835 | 75,968 | 104,161 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 2,484 | 38,769 | 83,475 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 14,073 | 42,770 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 15,796 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3H - SECTION 1 - OTHER LIABILITY - OCCURRENCE -(CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims | Claims |
| Losses Were | 9 | 10 | 11 | Closed | Closed |
| Incurred | 1992 | 1993 | 1994 | With Loss |Without Loss |
| | | | | Payment | Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 1,152,383 | 1,445,792 | 1,782,225 | 176,698 | 356,783 |
| 2. 1985 | 338,157 | 362,044 | 386,236 | 15,038 | 22,526 |
| 3. 1986 | 308,938 | 335,860 | 350,369 | 19,148 | 27,374 |
| 4. 1987 | 159,283 | 179,049 | 187,895 | 18,844 | 21,352 |
| 5. 1988 | 146,917 | 181,696 | 203,337 | 19,581 | 21,704 |
| 6. 1989 | 127,503 | 172,789 | 203,577 | 19,399 | 23,254 |
| 7. 1990 | 95,172 | 152,605 | 203,627 | 22,787 | 26,086 |
| 8. 1991 | 45,774 | 93,765 | 156,425 | 19,266 | 23,629 |
| 9. 1992 | 11,346 | 33,757 | 74,442 | 13,058 | 18,142 |
| 10. 1993 | X X X X | 14,561 | 47,267 | 12,227 | 16,603 |
| 11. 1994 | X X X X | X X X X | 14,103 | 7,449 | 9,414 |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 2,523 | 19,930 | 44,977 | 73,564 | 99,594 |
| 5. 1988 | X X X X | X X X X | X X X X | 3,497 | 22,762 | 59,139 | 91,611 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 16,108 | 27,492 | 71,569 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 3,721 | 39,912 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 4,268 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE - (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims | Claims |
| Losses Were | 9 | 10 | 11 | Closed | Closed |
| Incurred | 1992 | 1993 | 1994 | With Loss |Without Loss |
| | | | | Payment | Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 115,106 | 124,240 | 134,577 | 913 | 3,407 |
| 5. 1988 | 116,850 | 134,867 | 140,959 | 958 | 3,438 |
| 6. 1989 | 113,938 | 141,500 | 177,528 | 1,001 | 3,317 |
| 7. 1990 | 81,786 | 123,306 | 165,327 | 1,121 | 3,622 |
| 8. 1991 | 34,254 | 101,348 | 139,727 | 1,069 | 3,926 |
| 9. 1992 | 4,176 | 32,282 | 80,939 | 823 | 3,998 |
| 10. 1993 | X X X X | 4,689 | 41,384 | 629 | 4,088 |
| 11. 1994 | X X X X | X X X X | 9,236 | 223 | 2,870 |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 3I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
<TABLE>
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 2. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT) - (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#---------------------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims |Claims Closed|
| Losses Were | 9 | 10 | 11 | Closed With | Without |
| Incurred | 1992 | 1993 | 1994 |Loss Payment |Loss Payment |
| | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 492,901 | 509,463 | X X X X | X X X X |
| 2. 1993 | X X X X | 20,484 | 66,276 | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | 97,955 | X X X X | X X X X |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3J - AUTO PHYSICAL DAMAGE
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 2. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<CAPTION>
!--------------------#-----------------------------------------#---------------------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims |Claims Closed|
| Losses Were | 9 | 10 | 11 | Closed With | Without |
| Incurred | 1992 | 1993 | 1994 |Loss Payment |Loss Payment |
| | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 000 | 1,290,597 | 1,291,734 | 1,911,593 | 430,647 |
| 2. 1993 | X X X X | 158,420 | 182,600 | 137,056 | 40,484 |
| 3. 1994 | X X X X | X X X X | 172,287 | 123,050 | 35,072 |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3K - FIDELITY/SURETY
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 2. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<CAPTION>
!--------------------#-----------------------------------------#---------------------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims |Claims Closed|
| Losses Were | 9 | 10 | 11 | Closed With | Without |
| Incurred | 1992 | 1993 | 1994 |Loss Payment |Loss Payment |
| | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 000 | 103,693 | 108,999 | X X X X | X X X X |
| 2. 1993 | X X X X | 8,833 | 14,131 | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | 5,677 | X X X X | X X X X |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 2. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)-(CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#---------------------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims |Claims Closed|
| Losses Were | 9 | 10 | 11 | Closed With | Without |
| Incurred | 1992 | 1993 | 1994 |Loss Payment |Loss Payment |
| | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 000 | 1,747,239 | 1,826,483 | X X X X | X X X X |
| 2. 1993 | X X X X | 100,135 | 201,633 | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | 130,294 | X X X X | X X X X |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3M - INTERNATIONAL
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 000 | (10)| (346)| (601)| 558 | 980 | 2,438 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3M - INTERNATIONAL - (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#---------------------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | | | | Claims |Claims Closed|
| Losses Were | 9 | 10 | 11 | Closed With | Without |
| Incurred | 1992 | 1993 | 1994 |Loss Payment |Loss Payment |
| | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 2,438 | 2,438 | 2,438 | X X X X | X X X X |
| 2. 1985 | 0 | 0 | 0 | X X X X | X X X X |
| 3. 1986 | 0 | 0 | 0 | X X X X | X X X X |
| 4. 1987 | 0 | 0 | 0 | X X X X | X X X X |
| 5. 1988 | 0 | 0 | 0 | X X X X | X X X X |
| 6. 1989 | 0 | 0 | 0 | X X X X | X X X X |
| 7. 1990 | 0 | 0 | 0 | X X X X | X X X X |
| 8. 1991 | 0 | 0 | 0 | X X X X | X X X X |
| 9. 1992 | 0 | 0 | 0 | X X X X | X X X X |
| 10. 1993 | X X X X | 0 | 0 | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | 0 | X X X X | X X X X |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 3N - REINSURANCE A
<TABLE>
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. 1988 | 0 | X X X X | X X X X | 1,351 | 4,676 | 6,088 | (12,114)|
| 2. 1989 | X X X X | X X X X | X X X X | X X X X | 9,939 | 49,095 | 55,813 |
| 3. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 12,324 | 36,445 |
| 4. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 5,353 |
| 5. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 6. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3N - REINSURANCE A - (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | 9 | 10 | 11 | Claims | Claims |
| Losses Were | 1992 | 1993 | 1994 | Closed | Closed |
| Incurred | | | | With Loss |Without Loss |
| | | | | Payment | Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| 1. 1988 | (9,735)| (8,391)| (6,750)| X X X X | X X X X |
| 2. 1989 | 45,587 | 49,241 | 49,188 | X X X X | X X X X |
| 3. 1990 | 40,990 | 25,640 | 28,032 | X X X X | X X X X |
| 4. 1991 | 27,310 | 32,971 | 35,599 | X X X X | X X X X |
| 5. 1992 | 45,295 | 112,078 | 120,868 | X X X X | X X X X |
| 6. 1993 | X X X X | 5,307 | 12,362 | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | 12,324 | X X X X | X X X X |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3O - REINSURANCE B
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. 1988 | 0 | X X X X | X X X X | 367 | 5,194 | 13,574 | (7,642)|
| 2. 1989 | X X X X | X X X X | X X X X | X X X X | 589 | 6,342 | 17,806 |
| 3. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 986 | 7,608 |
| 4. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 1,061 |
| 5. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 6. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | 9 | 10 | 11 | Claims | Claims |
| Losses Were | 1992 | 1993 | 1994 | Closed | Closed |
| Incurred | | | | With Loss |Without Loss |
| | | | | Payment | Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| 1. 1988 | 341 | 5,549 | 8,632 | X X X X | X X X X |
| 2. 1989 | 6,118 | 14,566 | 21,893 | X X X X | X X X X |
| 3. 1990 | 23,114 | 8,671 | 18,784 | X X X X | X X X X |
| 4. 1991 | 15,093 | 29,924 | 42,953 | X X X X | X X X X |
| 5. 1992 | 864 | 5,262 | 15,444 | X X X X | X X X X |
| 6. 1993 | X X X X | 1,477 | 11,094 | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | 1,952 | X X X X | X X X X |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3P - REINSURANCE C
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. 1988 | 0 | X X X X | X X X X | 28,164 | 60,996 | 61,230 | 61,766 |
| 2. 1989 | X X X X | X X X X | X X X X | X X X X | 1,846 | 29,081 | 37,001 |
| 3. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 619 | 9,392 |
| 4. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 465 |
| 5. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 6. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | 9 | 10 | 11 | Claims | Claims |
| Losses Were | 1992 | 1993 | 1994 | Closed | Closed |
| Incurred | | | | With Loss |Without Loss |
| | | | | Payment | Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| 1. 1988 | 61,771 | 61,738 | 61,737 | X X X X | X X X X |
| 2. 1989 | 38,227 | 38,538 | 38,581 | X X X X | X X X X |
| 3. 1990 | 34,727 | 34,801 | 34,923 | X X X X | X X X X |
| 4. 1991 | 1,495 | 1,884 | 2,159 | X X X X | X X X X |
| 5. 1992 | 0 | 101 | 101 | X X X X | X X X X |
| 6. 1993 | X X X X | 120 | 199 | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | 0 | X X X X | X X X X |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3Q - REINSURANCE D
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | (17,222)| (6,318)| 33,056 | 84,095 | 130,500 | 165,388 |
| 2. 1985 | 6,384 | 72,889 | 94,508 | 3,261 | 24,638 | 36,042 | 44,862 |
| 3. 1986 | X X X X | 16,090 | 64,669 | 74,825 | (11,950)| (1,347)| 6,318 |
| 4. 1987 | X X X X | X X X X | 27,929 | 93,493 | 103,039 | 3,271 | 21,961 |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3Q - REINSURANCE D - (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | 9 | 10 | 11 | Claims | Claims |
| Losses Were | 1992 | 1993 | 1994 | Closed | Closed |
| Incurred | | | | With Loss |Without Loss |
| | | | | Payment | Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 225,048 | 247,809 | 274,788 | X X X X | X X X X |
| 2. 1985 | 57,479 | 57,401 | 65,295 | X X X X | X X X X |
| 3. 1986 | 17,557 | 24,264 | 28,079 | X X X X | X X X X |
| 4. 1987 | 35,356 | 48,660 | 58,327 | X X X X | X X X X |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 3R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 31,837 | 65,423 | 90,777 | 122,471 | 130,291 | 237,044 |
| 2. 1985 | 799 | 3,541 | 7,992 | 19,976 | 28,760 | 39,173 | 66,699 |
| 3. 1986 | X X X X | 922 | 4,467 | 10,761 | 21,762 | 55,363 | 91,480 |
| 4. 1987 | X X X X | X X X X | 962 | 5,907 | 12,738 | 18,758 | 28,521 |
| 5. 1988 | X X X X | X X X X | X X X X | 1,150 | 4,301 | 9,483 | 17,114 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 1,060 | 3,128 | 12,679 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 899 | 5,417 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 1,216 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE - (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | 9 | 10 | 11 | Claims | Claims |
| Losses Were | 1992 | 1993 | 1994 | Closed | Closed |
| Incurred | | | | With Loss |Without Loss |
| | | | | Payment | Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| 1. Prior | 249,054 | 248,664 | 192,513 | 14,356 | 36,768 |
| 2. 1985 | 82,460 | 82,260 | 83,637 | 3,400 | 8,710 |
| 3. 1986 | 103,493 | 111,539 | 114,800 | 2,666 | 6,922 |
| 4. 1987 | 37,945 | 48,777 | 53,306 | 2,675 | 6,396 |
| 5. 1988 | 27,563 | 41,627 | 50,861 | 2,967 | 6,116 |
| 6. 1989 | 21,292 | 30,363 | 40,113 | 2,260 | 5,061 |
| 7. 1990 | 7,978 | 26,539 | 41,484 | 1,978 | 5,493 |
| 8. 1991 | 6,355 | 17,360 | 36,875 | 2,045 | 4,397 |
| 9. 1992 | 1,453 | 5,569 | 18,277 | 1,722 | 3,831 |
| 10. 1993 | X X X X | 3,060 | 6,855 | 1,374 | 3,968 |
| 11. 1994 | X X X X | X X X X | 3,077 | 851 | 1,945 |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 1 | 1 |
| 5. 1988 | X X X X | X X X X | X X X X | 1 | 3 | 3 | 3 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 7 | 7 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | 15 |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE-(CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | 9 | 10 | 11 | Claims | Claims |
| Losses Were | 1992 | 1993 | 1994 | Closed | Closed |
| Incurred | | | | With Loss |Without Loss |
| | | | | Payment | Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | 1 | 1 | 1 | 1 | 146 |
| 5. 1988 | 3 | 3 | 3 | 1 | 2 |
| 6. 1989 | 0 | 0 | 0 | 0 | 3 |
| 7. 1990 | 7 | 7 | 7 | 0 | 0 |
| 8. 1991 | 15 | 15 | 15 | 1 | 1 |
| 9. 1992 | 0 | 0 | 0 | 0 | 1 |
| 10. 1993 | X X X X | 0 | 0 | 0 | 1 |
| 11. 1994 | X X X X | X X X X | 0 | 0 | 0 |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
SCHEDULE P - PART 3S - FINANCIAL GUARANTY/MORTGAGE GUARANTY
<CAPTION>
!--------------------#--------------------------------------------------------------------------------------------------
| 1 | Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted) |
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------|
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | | |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> <C> <C> |
| | | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 2. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | | |
<-------------------->------------->------------->------------->------------->------------->------------->------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 3S - FINANCIAL GUARANTY/MORTGAGE GUARANTY - (CONTINUED)
<CAPTION>
!--------------------#-----------------------------------------#-------------#-------------#
| 1 | | 12 | 13 |
| |-------------#-------------#-------------| Number of | Number of |
| Years in Which | 9 | 10 | 11 | Claims | Claims |
| Losses Were | 1992 | 1993 | 1994 | Closed | Closed |
| Incurred | | | | With Loss |Without Loss |
| | | | | Payment | Payment |
|--------------------|-------------|-------------|-------------|-------------|-------------|
<S> <C> <C> <C> <C> <C> |
| | | | | | |
| 1. Prior | 000 | 48,056 | 64,767 | X X X X | 324 |
| 2. 1993 | X X X X | 35,205 | (22,678)| X X X X | 0 |
| 3. 1994 | X X X X | X X X X | 49,333 | X X X X | 0 |
| | | | | | |
<-------------------->------------->------------->------------->------------->------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 4A - HOMEOWNERS/FARMOWNERS
<TABLE>
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| |---------------#---------------#---------------#---------------#---------------#---------------|
| Years in Which | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 2,922 | 1,116 | 573 | 348 | 2,320 | 877 |
| 2. 1985 | 9,931 | 3,129 | 801 | 561 | 1,488 | 499 |
| 3. 1986 | X X X X | 18,344 | 4,820 | 3,140 | 3,285 | 1,347 |
| 4. 1987 | X X X X | X X X X | 11,603 | 3,666 | 3,247 | 1,403 |
| 5. 1988 | X X X X | X X X X | X X X X | 26,713 | 4,633 | 3,192 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 27,311 | 4,425 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 25,184 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4A - HOMEOWNERS/FARMOWNERS - (CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | (000 OMITTED) |
| |---------------#---------------#---------------#---------------|
| Years in Which | | | | |
| Losses Were | 8 | 9 | 10 | 11 |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 593 | 144 | 98 | 83 |
| 2. 1985 | 73 | 275 | 293 | 292 |
| 3. 1986 | 179 | 344 | 300 | 315 |
| 4. 1987 | 628 | 824 | 511 | 1,154 |
| 5. 1988 | 1,629 | 1,300 | 1,484 | 1,165 |
| 6. 1989 | 2,983 | 754 | 1,701 | 2,085 |
| 7. 1990 | 5,985 | 2,880 | 2,375 | 2,180 |
| 8. 1991 | 34,653 | 9,981 | 8,205 | 5,858 |
| 9. 1992 | X X X X | 62,510 | 20,346 | 16,960 |
| 10. 1993 | X X X X | X X X X | 50,046 | 31,454 |
| 11. 1994 | X X X X | X X X X | X X X X | 83,309 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| |---------------#---------------#---------------#---------------#---------------#---------------|
| Years in Which | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. Prior | 47,298 | 22,746 | 7,656 | 6,453 | 12,940 | 9,173 |
| 2. 1985 | 56,635 | 18,192 | 4,845 | 3,823 | 10,805 | 5,638 |
| 3. 1986 | X X X X | 65,156 | 22,367 | 11,497 | 12,746 | 9,029 |
| 4. 1987 | X X X X | X X X X | 79,343 | 21,932 | 16,527 | 17,396 |
| 5. 1988 | X X X X | X X X X | X X X X | 119,671 | 59,979 | 35,928 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 144,253 | 58,913 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 156,719 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL - (CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | (000 OMITTED) |
| |---------------#---------------#---------------#---------------|
| Years in Which | | | | |
| Losses Were | 8 | 9 | 10 | 11 |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 9,777 | 9,023 | 8,632 | 7,972 |
| 2. 1985 | 5,117 | 3,807 | 3,380 | 2,799 |
| 3. 1986 | 5,956 | 4,763 | 3,645 | 3,542 |
| 4. 1987 | 12,437 | 10,498 | 6,253 | 5,899 |
| 5. 1988 | 24,224 | 16,266 | 9,105 | 6,977 |
| 6. 1989 | 49,513 | 30,402 | 20,183 | 14,995 |
| 7. 1990 | 98,339 | 64,747 | 39,067 | 22,369 |
| 8. 1991 | 198,799 | 115,598 | 67,646 | 33,338 |
| 9. 1992 | X X X X | 225,555 | 125,881 | 78,914 |
| 10. 1993 | X X X X | X X X X | 215,507 | 127,350 |
| 11. 1994 | X X X X | X X X X | X X X X | 145,676 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| |---------------#---------------#---------------#---------------#---------------#---------------|
| Years in Which | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. Prior | 89,261 | 49,963 | 43,340 | 27,900 | 27,896 | 28,629 |
| 2. 1985 | 98,069 | 54,689 | 21,291 | 17,667 | 16,179 | 17,404 |
| 3. 1986 | X X X X | 160,017 | 102,501 | 70,056 | 45,676 | 40,076 |
| 4. 1987 | X X X X | X X X X | 161,138 | 84,923 | 46,877 | 37,879 |
| 5. 1988 | X X X X | X X X X | X X X X | 199,029 | 112,791 | 71,375 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 253,493 | 153,915 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 299,904 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL - (CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | (000 OMITTED) |
| |---------------#---------------#---------------#---------------|
| Years in Which | | | | |
| Losses Were | 8 | 9 | 10 | 11 |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 25,484 | 15,726 | 12,852 | 13,259 |
| 2. 1985 | 14,503 | 7,711 | 7,667 | 5,568 |
| 3. 1986 | 32,281 | 21,937 | 18,930 | 18,242 |
| 4. 1987 | 29,982 | 17,965 | 13,099 | 11,157 |
| 5. 1988 | 41,740 | 24,720 | 18,645 | 15,961 |
| 6. 1989 | 94,921 | 57,768 | 30,610 | 27,393 |
| 7. 1990 | 194,173 | 118,082 | 72,140 | 56,438 |
| 8. 1991 | 346,530 | 229,729 | 159,668 | 112,121 |
| 9. 1992 | X X X X | 342,458 | 231,321 | 155,158 |
| 10. 1993 | X X X X | X X X X | 297,909 | 183,400 |
| 11. 1994 | X X X X | X X X X | X X X X | 299,402 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4D - WORKERS' COMPENSATION
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| |---------------#---------------#---------------#---------------#---------------#---------------|
| Years in Which | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. Prior | 207,301 | 175,453 | 94,532 | 105,486 | 83,882 | 87,483 |
| 2. 1985 | 219,540 | 93,591 | 50,185 | 19,118 | 12,178 | 14,427 |
| 3. 1986 | X X X X | 477,026 | 245,433 | 146,978 | 76,427 | 42,884 |
| 4. 1987 | X X X X | X X X X | 482,389 | 185,683 | 99,711 | 40,660 |
| 5. 1988 | X X X X | X X X X | X X X X | 744,642 | 396,217 | 182,232 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 876,687 | 417,418 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 1,320,243 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4D - WORKERS' COMPENSATION - (CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | (000 OMITTED) |
| |---------------#---------------#---------------#---------------|
| Years in Which | | | | |
| Losses Were | 8 | 9 | 10 | 11 |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 54,787 | 99,699 | 110,231 | 77,678 |
| 2. 1985 | 10,400 | 11,086 | 11,192 | 9,424 |
| 3. 1986 | 20,619 | 16,703 | 15,965 | 15,045 |
| 4. 1987 | 43,608 | 33,145 | 31,862 | 24,525 |
| 5. 1988 | 91,953 | 59,408 | 52,351 | 42,793 |
| 6. 1989 | 143,733 | 82,244 | 87,549 | 78,222 |
| 7. 1990 | 559,345 | 264,872 | 172,915 | 128,626 |
| 8. 1991 | 1,389,314 | 886,087 | 572,269 | 401,375 |
| 9. 1992 | X X X X | 1,283,531 | 799,851 | 499,529 |
| 10. 1993 | X X X X | X X X X | 1,021,938 | 652,989 |
| 11. 1994 | X X X X | X X X X | X X X X | 919,885 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4E - COMMERCIAL MULTIPLE PERIL
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| |---------------#---------------#---------------#---------------#---------------#---------------|
| Years in Which | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. Prior | 38,338 | 7,679 | 25,522 | 20,217 | 16,035 | 11,184 |
| 2. 1985 | 113,278 | 67,134 | 32,751 | 15,542 | 11,197 | 6,859 |
| 3. 1986 | X X X X | 129,407 | 83,127 | 61,287 | 33,598 | 15,220 |
| 4. 1987 | X X X X | X X X X | 118,319 | 74,507 | 44,829 | 26,692 |
| 5. 1988 | X X X X | X X X X | X X X X | 162,476 | 105,203 | 67,959 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 195,789 | 113,809 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 248,715 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4E - COMMERCIAL MULTIPLE PERIL - (CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | (000 OMITTED) |
| |---------------#---------------#---------------#---------------|
| Years in Which | | | | |
| Losses Were | 8 | 9 | 10 | 11 |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 8,831 | 8,356 | 6,944 | 3,764 |
| 2. 1985 | 3,214 | 3,468 | 3,182 | 2,730 |
| 3. 1986 | 13,421 | 5,571 | 4,133 | 4,295 |
| 4. 1987 | 17,977 | 8,985 | 5,808 | 2,995 |
| 5. 1988 | 46,342 | 25,694 | 17,906 | 13,006 |
| 6. 1989 | 74,344 | 33,557 | 18,379 | 16,162 |
| 7. 1990 | 155,523 | 85,815 | 50,620 | 35,012 |
| 8. 1991 | 269,066 | 174,744 | 101,609 | 46,847 |
| 9. 1992 | X X X X | 268,504 | 178,559 | 108,969 |
| 10. 1993 | X X X X | X X X X | 353,817 | 250,195 |
| 11. 1994 | X X X X | X X X X | X X X X | 356,300 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 4F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
<TABLE>
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| |---------------#---------------#---------------#---------------#---------------#---------------|
| Years in Which | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 200,874 | 170,705 | 196,443 | 145,912 | 127,216 | 96,552 |
| 2. 1985 | 145,132 | 157,223 | 132,929 | 102,888 | 63,740 | 46,075 |
| 3. 1986 | X X X X | 246,636 | 226,500 | 189,186 | 108,263 | 60,255 |
| 4. 1987 | X X X X | X X X X | 117,615 | 98,427 | 81,483 | 39,293 |
| 5. 1988 | X X X X | X X X X | X X X X | 30,709 | 29,796 | 28,459 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 24,250 | 23,048 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 28,026 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE-(CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | (000 OMITTED) |
| |---------------#---------------#---------------#---------------|
| Years in Which | | | | |
| Losses Were | 8 | 9 | 10 | 11 |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 83,975 | 64,432 | 45,680 | 43,278 |
| 2. 1985 | 30,999 | 30,805 | 16,695 | 13,109 |
| 3. 1986 | 49,510 | 36,439 | 22,388 | 19,047 |
| 4. 1987 | 36,835 | 27,826 | 18,168 | 16,469 |
| 5. 1988 | 43,486 | 38,298 | 33,091 | 28,127 |
| 6. 1989 | 21,201 | 19,927 | 16,058 | 12,455 |
| 7. 1990 | 26,520 | 19,277 | 27,788 | 21,380 |
| 8. 1991 | 28,796 | 27,191 | 15,208 | 14,527 |
| 9. 1992 | X X X X | 31,879 | 23,993 | 20,609 |
| 10. 1993 | X X X X | X X X X | 24,460 | 19,654 |
| 11. 1994 | X X X X | X X X X | X X X X | 22,433 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| |---------------#---------------#---------------#---------------#---------------#---------------|
| Years in Which | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 50,452 | 48,317 | 37,888 | 17,661 |
| 5. 1988 | X X X X | X X X X | X X X X | 144,035 | 120,186 | 62,929 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 162,559 | 116,661 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 170,308 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE-(CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | (000 OMITTED) |
| |---------------#---------------#---------------#---------------|
| Years in Which | | | | |
| Losses Were | 8 | 9 | 10 | 11 |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 11,407 | 7,792 | 6,926 | 5,140 |
| 5. 1988 | 38,491 | 23,919 | 12,966 | 13,404 |
| 6. 1989 | 62,955 | 37,946 | 23,052 | 21,329 |
| 7. 1990 | 110,402 | 65,105 | 34,797 | 30,617 |
| 8. 1991 | 167,276 | 116,492 | 58,935 | 39,698 |
| 9. 1992 | X X X X | 161,405 | 80,418 | 40,831 |
| 10. 1993 | X X X X | X X X X | 172,859 | 108,001 |
| 11. 1994 | X X X X | X X X X | X X X X | 193,711 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| |---------------#---------------#---------------#---------------#---------------#---------------|
| Years in Which | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. Prior | 1,392 | 1,416 | 587 | 506 | 164 | 0 |
| 2. 1985 | 262 | 186 | 146 | 57 | 39 | 1 |
| 3. 1986 | X X X X | 3,700 | 957 | 645 | 93 | 17 |
| 4. 1987 | X X X X | X X X X | 6,631 | 2,286 | 335 | 297 |
| 5. 1988 | X X X X | X X X X | X X X X | 10,786 | 2,394 | 1,044 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 6,297 | 1,032 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 6,812 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY) - (CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | (000 OMITTED) |
| |---------------#---------------#---------------#---------------|
| Years in Which | | | | |
| Losses Were | 8 | 9 | 10 | 11 |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | 0 | 0 | 10 |
| 2. 1985 | 1 | 1 | 0 | 0 |
| 3. 1986 | 10 | 8 | 1 | 1 |
| 4. 1987 | 81 | 97 | 6 | 6 |
| 5. 1988 | 1,151 | 297 | 293 | 230 |
| 6. 1989 | 85 | 790 | 374 | 243 |
| 7. 1990 | 1,867 | 922 | 531 | 228 |
| 8. 1991 | 5,786 | 1,464 | 631 | 579 |
| 9. 1992 | X X X X | 9,032 | 1,975 | 824 |
| 10. 1993 | X X X X | X X X X | 8,717 | 3,185 |
| 11. 1994 | X X X X | X X X X | X X X X | 27,856 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| |---------------#---------------#---------------#---------------#---------------#---------------|
| Years in Which | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. Prior | 320,821 | 217,172 | 278,385 | 256,477 | 267,363 | 228,892 |
| 2. 1985 | 300,140 | 252,140 | 205,429 | 146,972 | 137,899 | 96,467 |
| 3. 1986 | X X X X | 575,896 | 501,867 | 384,193 | 253,586 | 157,193 |
| 4. 1987 | X X X X | X X X X | 290,459 | 269,578 | 205,003 | 159,750 |
| 5. 1988 | X X X X | X X X X | X X X X | 263,306 | 210,880 | 172,663 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 241,874 | 192,073 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 318,101 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4H - SECTION 1 - OTHER LIABILITY - OCCURRENCE - (CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | (000 OMITTED) |
| |---------------#---------------#---------------#---------------|
| Years in Which | | | | |
| Losses Were | 8 | 9 | 10 | 11 |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 196,097 | 1,723,653 | 2,409,798 | 2,283,599 |
| 2. 1985 | 77,109 | 56,805 | 49,814 | 40,554 |
| 3. 1986 | 109,007 | 87,813 | 67,417 | 58,258 |
| 4. 1987 | 110,490 | 75,270 | 63,536 | 54,229 |
| 5. 1988 | 134,071 | 98,231 | 87,630 | 78,116 |
| 6. 1989 | 145,297 | 100,265 | 87,817 | 83,698 |
| 7. 1990 | 256,053 | 181,935 | 132,762 | 106,111 |
| 8. 1991 | 315,263 | 248,543 | 183,829 | 147,392 |
| 9. 1992 | X X X X | 276,614 | 253,028 | 195,059 |
| 10. 1993 | X X X X | X X X X | 300,486 | 225,263 |
| 11. 1994 | X X X X | X X X X | X X X X | 314,640 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| |---------------#---------------#---------------#---------------#---------------#---------------|
| Years in Which | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 260,767 | 210,148 | 202,979 | 99,830 |
| 5. 1988 | X X X X | X X X X | X X X X | 268,635 | 231,499 | 185,773 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 248,142 | 195,276 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 257,110 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE - (CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | (000 OMITTED) |
| |---------------#---------------#---------------#---------------|
| Years in Which | | | | |
| Losses Were | 8 | 9 | 10 | 11 |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 57,338 | 32,649 | 22,204 | 15,271 |
| 5. 1988 | 81,132 | 55,800 | 29,183 | 23,875 |
| 6. 1989 | 109,869 | 65,639 | 48,746 | 27,994 |
| 7. 1990 | 150,949 | 107,326 | 86,623 | 54,054 |
| 8. 1991 | 247,097 | 171,078 | 102,596 | 69,538 |
| 9. 1992 | X X X X | 267,154 | 159,048 | 98,345 |
| 10. 1993 | X X X X | X X X X | 254,002 | 187,488 |
| 11. 1994 | X X X X | X X X X | X X X X | 329,910 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 4I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
<TABLE>
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| 1 |---------------#---------------#---------------#---------------#---------------#---------------|
| | | | | | | |
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 2 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT) - (CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| | (000 OMITTED) |
| 1 |---------------#---------------#---------------#---------------|
| | | | | |
| Years in Which | 8 | 9 | 10 | 11 |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | X X X X | 72,531 | 32,000 | 21,851 |
| 2 1993 | X X X X | X X X X | 24,104 | 13,682 |
| 3. 1994 | X X X X | X X X X | X X X X | 38,339 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4J - AUTO PHYSICAL DAMAGE
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| 1 |---------------#---------------#---------------#---------------#---------------#---------------|
| | | | | | | |
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 2 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| | (000 OMITTED) |
| 1 |---------------#---------------#---------------#---------------|
| | | | | |
| Years in Which | 8 | 9 | 10 | 11 |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | X X X X | 98,805 | 32,226 | 18,589 |
| 2 1993 | X X X X | X X X X | 44,552 | 18,214 |
| 3. 1994 | X X X X | X X X X | X X X X | 35,844 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4K - FIDELITY/SURETY
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| 1 |---------------#---------------#---------------#---------------#---------------#---------------|
| | | | | | | |
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 2 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| | (000 OMITTED) |
| 1 |---------------#---------------#---------------#---------------|
| | | | | |
| Years in Which | 8 | 9 | 10 | 11 |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | X X X X | 62,675 | 54,101 | 49,432 |
| 2 1993 | X X X X | X X X X | 23,258 | 13,737 |
| 3. 1994 | X X X X | X X X X | X X X X | 30,556 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| 1 |---------------#---------------#---------------#---------------#---------------#---------------|
| | | | | | | |
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 2 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)-(CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| | (000 OMITTED) |
| 1 |---------------#---------------#---------------#---------------|
| | | | | |
| Years in Which | 8 | 9 | 10 | 11 |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | X X X X | 145,643 | 4,358 | 2,583 |
| 2 1993 | X X X X | X X X X | 144,216 | 2,392 |
| 3. 1994 | X X X X | X X X X | X X X X | 137,548 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4M - INTERNATIONAL
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| 1 |---------------#---------------#---------------#---------------#---------------#---------------|
| | | | | | | |
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| | | | | | | |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4M - INTERNATIONAL - (CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| | (000 OMITTED) |
| 1 |---------------#---------------#---------------#---------------|
| | | | | |
| Years in Which | 8 | 9 | 10 | 11 |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
| | | | | |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 0 | 0 |
| 11. 1994 | X X X X | X X X X | X X X X | 0 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 4N - REINSURANCE A
<TABLE>
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| 1 |---------------#---------------#---------------#---------------#---------------#---------------|
| | | | | | | |
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| Incurred | | | | | | |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. 1988 | X X X X | X X X X | X X X X | 3,295 | 2,189 | 913 |
| 2. 1989 | X X X X | X X X X | X X X X | X X X X | 11,205 | 767 |
| 3. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 15,745 |
| 4. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 5. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 6. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4N - REINSURANCE A - (CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| | (000 OMITTED) |
| 1 |---------------#---------------#---------------#---------------|
| | | | | |
| Years in Which | 8 | 9 | 10 | 11 |
| Losses Were | 1991 | 1992 | 1993 | 1994 |
| Incurred | | | | |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. 1988 | 13,507 | 11,896 | 11,202 | 11,637 |
| 2. 1989 | 724 | 5,646 | 4,501 | 5,123 |
| 3. 1990 | 8,459 | 440 | 8,732 | 9,407 |
| 4. 1991 | 5,095 | 2,048 | 597 | 2,581 |
| 5. 1992 | X X X X | 18,850 | 1,113 | 2,885 |
| 6. 1993 | X X X X | X X X X | 50,498 | 53,147 |
| 7. 1994 | X X X X | X X X X | X X X X | 30,962 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4O - REINSURANCE B
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| 1 |---------------#---------------#---------------#---------------#---------------#---------------|
| | | | | | | |
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| Incurred | | | | | | |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. 1988 | X X X X | X X X X | X X X X | 74,506 | 54,980 | 42,582 |
| 2. 1989 | X X X X | X X X X | X X X X | X X X X | 122,650 | 99,076 |
| 3. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 114,300 |
| 4. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 5. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 6. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4O - REINSURANCE B - (CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| | (000 OMITTED) |
| 1 |---------------#---------------#---------------#---------------|
| | | | | |
| Years in Which | 8 | 9 | 10 | 11 |
| Losses Were | 1991 | 1992 | 1993 | 1994 |
| Incurred | | | | |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. 1988 | 57,628 | 52,034 | 48,808 | 43,908 |
| 2. 1989 | 89,563 | 95,112 | 71,667 | 37,074 |
| 3. 1990 | 74,675 | 61,537 | 51,663 | 37,306 |
| 4. 1991 | 118,175 | 83,979 | 49,645 | 23,303 |
| 5. 1992 | X X X X | 107,597 | 58,271 | 35,374 |
| 6. 1993 | X X X X | X X X X | 117,543 | 31,850 |
| 7. 1994 | X X X X | X X X X | X X X X | 61,567 |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4P - REINSURANCE C
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| 1 |---------------#---------------#---------------#---------------#---------------#---------------|
| | | | | | | |
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| Incurred | | | | | | |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. 1988 | X X X X | X X X X | X X X X | 1,265 | 1,207 | 883 |
| 2. 1989 | X X X X | X X X X | X X X X | X X X X | 3,382 | 0 |
| 3. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 18,570 |
| 4. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 5. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 6. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| | (000 OMITTED) |
| 1 |---------------#---------------#---------------#---------------|
| | | | | |
| Years in Which | 8 | 9 | 10 | 11 |
| Losses Were | 1991 | 1992 | 1993 | 1994 |
| Incurred | | | | |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. 1988 | 180 | 142 | 0 | 0 |
| 2. 1989 | 0 | 0 | 0 | 0 |
| 3. 1990 | 3,520 | 0 | 0 | 0 |
| 4. 1991 | 14,237 | 0 | 0 | 0 |
| 5. 1992 | X X X X | 0 | 0 | 0 |
| 6. 1993 | X X X X | X X X X | 0 | 0 |
| 7. 1994 | X X X X | X X X X | X X X X | 504 |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4Q - REINSURANCE D
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| 1 |---------------#---------------#---------------#---------------#---------------#---------------|
| | | | | | | |
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| Incurred | | | | | | |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. Prior | 34,755 | 44,536 | 162,311 | 152,226 | 111,732 | 133,172 |
| 2. 1985 | 51,844 | 25,004 | 20,894 | 62,099 | 102,514 | 68,640 |
| 3. 1986 | X X X X | 79,735 | 36,231 | 31,640 | 114,155 | 110,295 |
| 4. 1987 | X X X X | X X X X | 109,091 | 57,319 | 49,775 | 132,893 |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| | (000 OMITTED) |
| 1 |---------------#---------------#---------------#---------------|
| | | | | |
| Years in Which | 8 | 9 | 10 | 11 |
| Losses Were | 1991 | 1992 | 1993 | 1994 |
| Incurred | | | | |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| | | | | |
| 1. Prior | 108,305 | 41,582 | 31,044 | 16,769 |
| 2. 1985 | 61,793 | 61,510 | 62,392 | 43,119 |
| 3. 1986 | 105,004 | 94,635 | 84,574 | 83,532 |
| 4. 1987 | 115,479 | 105,147 | 91,596 | 87,539 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 4R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| 1 |---------------#---------------#---------------#---------------#---------------#---------------|
| | | | | | | |
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| Incurred | | | | | | |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. Prior | 104,767 | 58,511 | 52,756 | 43,603 | 39,248 | 69,454 |
| 2. 1985 | 98,573 | 88,885 | 72,805 | 57,864 | 52,672 | 41,969 |
| 3. 1986 | X X X X | 143,872 | 132,778 | 118,569 | 97,107 | 65,001 |
| 4. 1987 | X X X X | X X X X | 111,395 | 102,259 | 94,609 | 77,333 |
| 5. 1988 | X X X X | X X X X | X X X X | 86,920 | 77,482 | 70,445 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 84,384 | 76,860 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 79,415 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE -(CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| | (000 OMITTED) |
| 1 |---------------#---------------#---------------#---------------|
| | | | | |
| Years in Which | 8 | 9 | 10 | 11 |
| Losses Were | 1991 | 1992 | 1993 | 1994 |
| Incurred | | | | |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 30,240 | 25,252 | 28,715 | 28,200 |
| 2. 1985 | 33,600 | 22,758 | 19,176 | 18,561 |
| 3. 1986 | 38,471 | 30,856 | 31,345 | 28,834 |
| 4. 1987 | 53,534 | 41,167 | 34,301 | 31,514 |
| 5. 1988 | 51,821 | 41,637 | 28,935 | 25,071 |
| 6. 1989 | 62,919 | 50,754 | 37,078 | 34,202 |
| 7. 1990 | 66,673 | 53,966 | 43,705 | 35,428 |
| 8. 1991 | 73,479 | 62,252 | 52,540 | 42,031 |
| 9. 1992 | X X X X | 48,765 | 41,606 | 31,383 |
| 10. 1993 | X X X X | X X X X | 48,610 | 40,762 |
| 11. 1994 | X X X X | X X X X | X X X X | 49,975 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| 1 |---------------#---------------#---------------#---------------#---------------#---------------|
| | | | | | | |
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| Incurred | | | | | | |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| | | | | | | |
| 1. Prior | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 1,515 | 1,514 | 136 | 136 |
| 5. 1988 | X X X X | X X X X | X X X X | 704 | 550 | 550 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 649 | 649 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 286 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 4R - SECTION 2 - PRODUCTS LIABILITY- CLAIMS-MADE -(CONTINUED)
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| | (000 OMITTED) |
| 1 |---------------#---------------#---------------#---------------|
| | | | | |
| Years in Which | 8 | 9 | 10 | 11 |
| Losses Were | 1991 | 1992 | 1993 | 1994 |
| Incurred | | | | |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 136 | 97 | 98 | 98 |
| 5. 1988 | 545 | 507 | 507 | 507 |
| 6. 1989 | 649 | 531 | 531 | 531 |
| 7. 1990 | 293 | 117 | 117 | 117 |
| 8. 1991 | 153 | 3 | 3 | 3 |
| 9. 1992 | X X X X | 3 | 3 | 3 |
| 10. 1993 | X X X X | X X X X | 3 | 3 |
| 11. 1994 | X X X X | X X X X | X X X X | 0 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
SCHEDULE P - PART 4S - FINANCIAL GUARANTY/MORTGAGE GUARANTY
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END |
| 1 |---------------#---------------#---------------#---------------#---------------#---------------|
| | | | | | | |
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Losses Were | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
| Incurred | | | | | | |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 2. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 3. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| | (000 OMITTED) |
| 1 |---------------#---------------#---------------#---------------|
| | | | | |
| Years in Which | 8 | 9 | 10 | 11 |
| Losses Were | 1991 | 1992 | 1993 | 1994 |
| Incurred | | | | |
| | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | X X X X | 33,811 | 23,953 | 24,704 |
| 2. 1993 | X X X X | X X X X | 6,211 | 7,953 |
| 3. 1994 | X X X X | X X X X | X X X X | 14,732 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 5A - HOMEOWNERS/FARMOWNERS
SECTION 1
<TABLE>
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 289,092 | 289,162 |
| 2. 1985 | 0 | 0 | 0 | 0 | 35,165 | 35,204 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 29,208 | 29,262 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 34,048 | 34,168 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 36,023 | 36,395 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 34,830 | 48,163 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 41,032 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 289,135 | 289,143 | 289,224 | 289,258 |
| 2. 1985 | 35,205 | 35,210 | 35,272 | 35,303 |
| 3. 1986 | 29,267 | 29,279 | 29,339 | 29,370 |
| 4. 1987 | 34,199 | 34,242 | 34,308 | 34,349 |
| 5. 1988 | 36,505 | 36,704 | 37,110 | 37,199 |
| 6. 1989 | 48,920 | 49,643 | 50,062 | 50,210 |
| 7. 1990 | 52,413 | 53,257 | 53,795 | 53,983 |
| 8. 1991 | 48,718 | 59,003 | 59,726 | 60,026 |
| 9. 1992 | X X X X | 47,135 | 60,926 | 61,697 |
| 10. 1993 | X X X X | X X X X | 43,270 | 50,959 |
| 11. 1994 | X X X X | X X X X | X X X X | 52,455 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5A - HOMEOWNERS/FARMOWNERS - (CONTINUED)
SECTION 2
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 93 | 45 |
| 2. 1985 | 0 | 0 | 0 | 0 | 55 | 27 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 112 | 69 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 234 | 136 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 417 | 214 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 4,854 | 510 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 5,171 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 80 | 69 | 60 | 62 |
| 2. 1985 | 29 | 23 | 24 | 20 |
| 3. 1986 | 57 | 44 | 48 | 40 |
| 4. 1987 | 97 | 52 | 44 | 33 |
| 5. 1988 | 140 | 90 | 74 | 78 |
| 6. 1989 | 292 | 172 | 141 | 79 |
| 7. 1990 | 487 | 272 | 185 | 118 |
| 8. 1991 | 5,188 | 575 | 363 | 256 |
| 9. 1992 | X X X X | 5,246 | 634 | 364 |
| 10. 1993 | X X X X | X X X X | 3,995 | 581 |
| 11. 1994 | X X X X | X X X X | X X X X | 4,533 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5A - HOMEOWNERS/FARMOWNERS - (CONTINUED)
SECTION 3
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 355,165 | 355,258 |
| 2. 1985 | 0 | 0 | 0 | 0 | 44,517 | 44,553 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 38,213 | 38,277 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 44,800 | 44,934 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 47,860 | 48,239 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 51,488 | 64,289 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 59,313 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 355,309 | 355,312 | 355,425 | 355,606 |
| 2. 1985 | 44,582 | 44,590 | 44,723 | 44,843 |
| 3. 1986 | 38,315 | 38,328 | 38,493 | 38,644 |
| 4. 1987 | 45,007 | 45,029 | 45,207 | 45,371 |
| 5. 1988 | 48,421 | 48,827 | 49,533 | 49,890 |
| 6. 1989 | 65,535 | 66,787 | 67,666 | 68,139 |
| 7. 1990 | 70,072 | 71,467 | 72,518 | 73,027 |
| 8. 1991 | 69,863 | 79,000 | 80,164 | 80,860 |
| 9. 1992 | X X X X | 67,426 | 80,675 | 82,018 |
| 10. 1993 | X X X X | X X X X | 62,644 | 70,349 |
| 11. 1994 | X X X X | X X X X | X X X X | 75,199 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 5B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
SECTION 1
<TABLE>
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
| | | | | | | |
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 372,714 | 373,203 |
| 2. 1985 | 0 | 0 | 0 | 0 | 43,177 | 43,462 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 43,973 | 44,690 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 48,301 | 49,770 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 49,560 | 53,292 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 35,017 | 55,722 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 38,296 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
| | | | | |
<S> <C> <C> <C> <C> |
| 1. Prior | 373,298 | 373,543 | 374,145 | 374,084 |
| 2. 1985 | 43,527 | 43,645 | 43,758 | 43,822 |
| 3. 1986 | 44,943 | 45,177 | 45,361 | 45,423 |
| 4. 1987 | 50,398 | 50,717 | 51,010 | 51,131 |
| 5. 1988 | 54,851 | 55,603 | 56,060 | 56,252 |
| 6. 1989 | 59,980 | 61,836 | 62,688 | 63,089 |
| 7. 1990 | 60,217 | 64,539 | 66,305 | 67,088 |
| 8. 1991 | 38,632 | 58,732 | 62,911 | 64,617 |
| 9. 1992 | X X X X | 37,842 | 57,891 | 62,252 |
| 10. 1993 | X X X X | X X X X | 35,522 | 55,511 |
| 11. 1994 | X X X X | X X X X | X X X X | 34,725 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL - (CONTINUED)
SECTION 2
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
| | | | | | | |
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 549 | 309 |
| 2. 1985 | 0 | 0 | 0 | 0 | 456 | 236 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 1,153 | 578 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 2,220 | 1,125 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 5,303 | 2,625 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 17,340 | 6,301 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 19,995 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
| | | | | |
<S> <C> <C> <C> <C> | |
| 1. Prior | 448 | 402 | 382 | 297 |
| 2. 1985 | 231 | 168 | 162 | 135 |
| 3. 1986 | 398 | 238 | 203 | 185 |
| 4. 1987 | 616 | 378 | 292 | 228 |
| 5. 1988 | 1,339 | 680 | 427 | 304 |
| 6. 1989 | 2,965 | 1,476 | 830 | 539 |
| 7. 1990 | 6,679 | 3,040 | 1,588 | 881 |
| 8. 1991 | 19,554 | 6,440 | 2,948 | 1,511 |
| 9. 1992 | X X X X | 19,932 | 6,702 | 2,874 |
| 10. 1993 | X X X X | X X X X | 17,675 | 5,653 |
| 11. 1994 | X X X X | X X X X | X X X X | 18,290 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL - (CONTINUED)
SECTION 3
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
| | | | | | | |
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 515,066 | 516,920 |
| 2. 1985 | 0 | 0 | 0 | 0 | 61,021 | 61,437 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 64,012 | 64,674 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 73,037 | 74,138 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 78,524 | 80,569 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 71,714 | 87,397 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 78,466 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
| | | | | |
<S> <C> <C> <C> <C> |
| 1. Prior | 518,904 | 520,299 | 521,800 | 522,173 |
| 2. 1985 | 61,844 | 62,184 | 62,476 | 62,682 |
| 3. 1986 | 65,350 | 65,904 | 66,346 | 66,608 |
| 4. 1987 | 75,067 | 75,742 | 76,373 | 76,796 |
| 5. 1988 | 81,970 | 82,863 | 83,608 | 84,096 |
| 6. 1989 | 90,042 | 91,488 | 92,432 | 93,101 |
| 7. 1990 | 93,366 | 95,442 | 96,504 | 97,173 |
| 8. 1991 | 79,467 | 92,439 | 94,297 | 95,555 |
| 9. 1992 | X X X X | 78,386 | 91,082 | 92,957 |
| 10. 1993 | X X X X | X X X X | 73,448 | 87,764 |
| 11. 1994 | X X X X | X X X X | X X X X | 72,355 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 5C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
SECTION 1
<TABLE>
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 320,024 | 320,584 |
| 2. 1985 | 0 | 0 | 0 | 0 | 43,854 | 44,425 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 50,560 | 51,937 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 55,105 | 57,706 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 53,314 | 57,836 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 37,075 | 54,239 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 36,115 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 320,795 | 321,036 | 321,409 | 321,526 |
| 2. 1985 | 44,752 | 45,039 | 45,242 | 45,376 |
| 3. 1986 | 52,611 | 53,201 | 53,637 | 53,970 |
| 4. 1987 | 59,041 | 59,966 | 60,550 | 60,982 |
| 5. 1988 | 60,072 | 61,446 | 62,290 | 62,831 |
| 6. 1989 | 58,560 | 61,243 | 62,638 | 63,478 |
| 7. 1990 | 52,507 | 56,872 | 59,213 | 60,392 |
| 8. 1991 | 34,547 | 49,162 | 53,326 | 55,474 |
| 9. 1992 | X X X X | 30,025 | 43,315 | 46,552 |
| 10. 1993 | X X X X | X X X X | 30,093 | 42,983 |
| 11. 1994 | X X X X | X X X X | X X X X | 33,053 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL - (CONTINUED)
SECTION 2
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 490 | 259 |
| 2. 1985 | 0 | 0 | 0 | 0 | 626 | 320 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 1,657 | 814 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 3,568 | 1,779 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 6,065 | 3,315 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 15,048 | 5,859 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 14,549 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 326 | 269 | 290 | 261 |
| 2. 1985 | 288 | 188 | 220 | 200 |
| 3. 1986 | 638 | 526 | 462 | 366 |
| 4. 1987 | 1,093 | 641 | 532 | 426 |
| 5. 1988 | 1,946 | 1,080 | 790 | 590 |
| 6. 1989 | 3,124 | 1,658 | 1,113 | 701 |
| 7. 1990 | 5,700 | 3,104 | 1,766 | 1,007 |
| 8. 1991 | 13,991 | 5,137 | 2,748 | 1,530 |
| 9. 1992 | X X X X | 12,093 | 4,614 | 2,497 |
| 10. 1993 | X X X X | X X X X | 12,538 | 4,663 |
| 11. 1994 | X X X X | X X X X | X X X X | 14,098 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL - (CONTINUED)
SECTION 3
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 479,271 | 481,373 |
| 2. 1985 | 0 | 0 | 0 | 0 | 69,355 | 71,140 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 82,671 | 85,892 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 91,106 | 95,258 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 88,732 | 94,065 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 72,629 | 88,610 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 69,215 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 483,178 | 484,365 | 485,642 | 486,241 |
| 2. 1985 | 72,990 | 74,367 | 75,412 | 76,217 |
| 3. 1986 | 89,344 | 92,183 | 94,315 | 95,956 |
| 4. 1987 | 99,629 | 103,195 | 105,889 | 108,080 |
| 5. 1988 | 99,083 | 103,159 | 106,357 | 108,957 |
| 6. 1989 | 94,773 | 100,146 | 104,111 | 107,189 |
| 7. 1990 | 84,794 | 91,260 | 95,966 | 99,548 |
| 8. 1991 | 66,148 | 79,752 | 86,128 | 91,092 |
| 9. 1992 | X X X X | 57,631 | 70,291 | 76,226 |
| 10. 1993 | X X X X | X X X X | 58,173 | 70,501 |
| 11. 1994 | X X X X | X X X X | X X X X | 63,654 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 5D - WORKERS' COMPENSATION
SECTION 1
<TABLE>
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 1,581,998 | 1,585,240 |
| 2. 1985 | 0 | 0 | 0 | 0 | 190,221 | 191,065 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 221,047 | 222,608 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 230,741 | 234,334 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 241,161 | 250,431 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 173,168 | 238,382 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 178,078 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 1,587,025 | 1,589,756 | 1,593,357 | 1,596,492 |
| 2. 1985 | 191,154 | 191,662 | 192,122 | 192,326 |
| 3. 1986 | 223,312 | 223,844 | 224,588 | 225,047 |
| 4. 1987 | 236,288 | 237,509 | 238,438 | 238,997 |
| 5. 1988 | 254,757 | 257,080 | 258,545 | 259,531 |
| 6. 1989 | 248,462 | 253,218 | 255,939 | 257,456 |
| 7. 1990 | 243,601 | 254,579 | 260,145 | 263,304 |
| 8. 1991 | 175,714 | 225,154 | 235,785 | 240,882 |
| 9. 1992 | X X X X | 118,548 | 161,513 | 166,800 |
| 10. 1993 | X X X X | X X X X | 89,248 | 125,589 |
| 11. 1994 | X X X X | X X X X | X X X X | 82,378 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5D - WORKERS' COMPENSATION - (CONTINUED)
SECTION 2
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 6,197 | 5,239 |
| 2. 1985 | 0 | 0 | 0 | 0 | 2,141 | 1,491 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 4,082 | 2,751 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 8,034 | 4,853 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 17,346 | 9,534 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 57,383 | 18,408 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 55,263 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 6,195 | 5,834 | 5,751 | 5,141 |
| 2. 1985 | 1,654 | 1,358 | 1,278 | 1,265 |
| 3. 1986 | 2,342 | 2,046 | 1,783 | 1,611 |
| 4. 1987 | 3,264 | 2,429 | 2,137 | 1,785 |
| 5. 1988 | 5,959 | 4,084 | 3,443 | 2,691 |
| 6. 1989 | 10,482 | 6,609 | 5,101 | 3,835 |
| 7. 1990 | 21,200 | 12,358 | 8,815 | 6,017 |
| 8. 1991 | 61,395 | 21,347 | 13,607 | 8,870 |
| 9. 1992 | X X X X | 40,761 | 17,062 | 10,779 |
| 10. 1993 | X X X X | X X X X | 35,232 | 12,417 |
| 11. 1994 | X X X X | X X X X | X X X X | 35,255 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5D - WORKERS' COMPENSATION - (CONTINUED)
SECTION 3
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 1,859,033 | 1,869,359 |
| 2. 1985 | 0 | 0 | 0 | 0 | 232,889 | 234,567 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 276,607 | 280,141 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 290,756 | 297,036 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 310,726 | 319,852 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 263,554 | 300,074 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 271,126 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 1,879,548 | 1,889,067 | 1,898,941 | 1,909,476 |
| 2. 1985 | 236,066 | 237,387 | 238,693 | 240,051 |
| 3. 1986 | 283,080 | 285,414 | 287,543 | 289,724 |
| 4. 1987 | 301,842 | 305,394 | 308,420 | 311,268 |
| 5. 1988 | 328,167 | 333,889 | 338,399 | 342,556 |
| 6. 1989 | 310,731 | 320,727 | 327,656 | 333,608 |
| 7. 1990 | 313,750 | 329,980 | 341,179 | 350,006 |
| 8. 1991 | 277,915 | 300,151 | 310,462 | 319,088 |
| 9. 1992 | X X X X | 197,753 | 226,698 | 237,830 |
| 10. 1993 | X X X X | X X X X | 162,316 | 185,681 |
| 11. 1994 | X X X X | X X X X | X X X X | 157,511 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 5E - COMMERCIAL MULTIPLE PERIL
SECTION 1
<TABLE>
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 349,667 | 349,991 |
| 2. 1985 | 0 | 0 | 0 | 0 | 36,833 | 37,148 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 29,421 | 30,018 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 30,566 | 31,413 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 34,203 | 35,889 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 28,075 | 44,434 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 33,019 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 350,015 | 350,153 | 350,305 | 350,485 |
| 2. 1985 | 37,250 | 37,353 | 37,449 | 37,501 |
| 3. 1986 | 30,251 | 30,410 | 30,538 | 30,619 |
| 4. 1987 | 31,921 | 32,246 | 32,495 | 32,645 |
| 5. 1988 | 36,867 | 37,630 | 38,329 | 38,657 |
| 6. 1989 | 47,159 | 48,989 | 50,086 | 50,698 |
| 7. 1990 | 49,622 | 52,608 | 54,368 | 55,327 |
| 8. 1991 | 35,754 | 50,412 | 53,091 | 54,492 |
| 9. 1992 | X X X X | 32,613 | 46,946 | 49,639 |
| 10. 1993 | X X X X | X X X X | 33,071 | 45,770 |
| 11. 1994 | X X X X | X X X X | X X X X | 35,428 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5E - COMMERCIAL MULTIPLE PERIL - (CONTINUED)
SECTION 2
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 2,363 | 2,463 |
| 2. 1985 | 0 | 0 | 0 | 0 | 847 | 453 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 3,994 | 4,257 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 2,866 | 1,626 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 4,265 | 3,242 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 11,830 | 4,508 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 12,838 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 2,730 | 2,671 | 1,984 | 1,313 |
| 2. 1985 | 340 | 233 | 164 | 116 |
| 3. 1986 | 4,400 | 519 | 366 | 305 |
| 4. 1987 | 1,157 | 719 | 512 | 374 |
| 5. 1988 | 2,573 | 1,136 | 735 | 469 |
| 6. 1989 | 3,018 | 2,139 | 1,433 | 937 |
| 7. 1990 | 5,164 | 3,523 | 2,372 | 1,534 |
| 8. 1991 | 13,433 | 5,161 | 3,551 | 2,401 |
| 9. 1992 | X X X X | 12,320 | 4,826 | 3,178 |
| 10. 1993 | X X X X | X X X X | 12,289 | 4,786 |
| 11. 1994 | X X X X | X X X X | X X X X | 13,571 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5E - COMMERCIAL MULTIPLE PERIL - (CONTINUED)
SECTION 3
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 464,272 | 465,473 |
| 2. 1985 | 0 | 0 | 0 | 0 | 55,783 | 55,899 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 49,394 | 50,744 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 50,935 | 51,593 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 57,808 | 59,708 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 56,837 | 75,100 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 65,830 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 466,080 | 467,112 | 467,599 | 468,321 |
| 2. 1985 | 55,986 | 56,061 | 56,237 | 56,351 |
| 3. 1986 | 51,446 | 51,552 | 51,734 | 51,877 |
| 4. 1987 | 52,030 | 52,213 | 52,539 | 52,734 |
| 5. 1988 | 60,755 | 61,593 | 62,624 | 63,169 |
| 6. 1989 | 78,426 | 81,085 | 82,689 | 83,647 |
| 7. 1990 | 84,310 | 87,984 | 90,119 | 91,260 |
| 8. 1991 | 71,617 | 87,052 | 90,458 | 92,126 |
| 9. 1992 | X X X X | 65,535 | 81,742 | 85,205 |
| 10. 1993 | X X X X | X X X X | 67,326 | 81,409 |
| 11. 1994 | X X X X | X X X X | X X X X | 72,820 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 5F - MEDICAL MALPRACTICE - OCCURRENCE
SECTION 1A
<TABLE>
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 7,326 | 7,804 |
| 2. 1985 | 0 | 0 | 0 | 0 | 1,698 | 1,960 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 1,195 | 1,436 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 434 | 581 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 82 | 122 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 48 | 44 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 42 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 7,805 | 8,015 | 8,163 | 8,279 |
| 2. 1985 | 2,024 | 2,111 | 2,172 | 2,230 |
| 3. 1986 | 1,569 | 1,681 | 1,751 | 1,801 |
| 4. 1987 | 666 | 753 | 827 | 859 |
| 5. 1988 | 115 | 167 | 292 | 300 |
| 6. 1989 | 59 | 187 | 280 | 310 |
| 7. 1990 | 75 | 263 | 362 | 429 |
| 8. 1991 | 17 | 27 | 76 | 136 |
| 9. 1992 | X X X X | 9 | 36 | 108 |
| 10. 1993 | X X X X | X X X X | 10 | 44 |
| 11. 1994 | X X X X | X X X X | X X X X | 11 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5F - MEDICAL MALPRACTICE - OCCURRENCE - (CONTINUED)
SECTION 2A
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 1,681 | 1,097 |
| 2. 1985 | 0 | 0 | 0 | 0 | 919 | 559 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 1,012 | 681 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 653 | 516 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 224 | 308 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 153 | 206 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 145 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 1,051 | 877 | 772 | 684 |
| 2. 1985 | 418 | 314 | 258 | 189 |
| 3. 1986 | 478 | 318 | 236 | 175 |
| 4. 1987 | 346 | 276 | 162 | 88 |
| 5. 1988 | 307 | 234 | 124 | 86 |
| 6. 1989 | 298 | 264 | 159 | 103 |
| 7. 1990 | 202 | 323 | 230 | 154 |
| 8. 1991 | 131 | 239 | 321 | 261 |
| 9. 1992 | X X X X | 120 | 215 | 285 |
| 10. 1993 | X X X X | X X X X | 99 | 193 |
| 11. 1994 | X X X X | X X X X | X X X X | 136 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5F - MEDICAL MALPRACTICE - OCCURRENCE - (CONTINUED)
SECTION 3A
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 23,965 | 24,340 |
| 2. 1985 | 0 | 0 | 0 | 0 | 6,605 | 6,876 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 5,782 | 6,130 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 2,389 | 2,761 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 661 | 1,008 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 264 | 537 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 274 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 24,556 | 24,792 | 24,966 | 25,354 |
| 2. 1985 | 7,049 | 7,158 | 7,330 | 7,442 |
| 3. 1986 | 6,403 | 6,494 | 6,626 | 6,743 |
| 4. 1987 | 2,957 | 3,183 | 3,300 | 3,364 |
| 5. 1988 | 1,233 | 1,464 | 1,606 | 1,671 |
| 6. 1989 | 952 | 1,390 | 1,640 | 1,763 |
| 7. 1990 | 687 | 1,456 | 1,867 | 2,084 |
| 8. 1991 | 257 | 727 | 1,230 | 1,571 |
| 9. 1992 | X X X X | 266 | 795 | 1,400 |
| 10. 1993 | X X X X | X X X X | 274 | 770 |
| 11. 1994 | X X X X | X X X X | X X X X | 286 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 5F - MEDICAL MALPRACTICE - CLAIMS-MADE
SECTION 1B
<TABLE>
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END|
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 233 | 286 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 422 | 564 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 266 | 622 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 268 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 308 | 325 | 334 | 341 |
| 5. 1988 | 661 | 725 | 760 | 779 |
| 6. 1989 | 865 | 1,021 | 1,101 | 1,140 |
| 7. 1990 | 635 | 932 | 1,064 | 1,155 |
| 8. 1991 | 297 | 689 | 929 | 1,061 |
| 9. 1992 | X X X X | 362 | 836 | 1,143 |
| 10. 1993 | X X X X | X X X X | 404 | 910 |
| 11. 1994 | X X X X | X X X X | X X X X | 438 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5F - MEDICAL MALPRACTICE - CLAIMS-MADE - (CONTINUED)
SECTION 2B
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 219 | 118 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 678 | 386 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 2,137 | 1,021 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 2,530 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 64 | 33 | 13 | 6 |
| 5. 1988 | 213 | 119 | 60 | 29 |
| 6. 1989 | 560 | 288 | 140 | 84 |
| 7. 1990 | 1,131 | 565 | 309 | 158 |
| 8. 1991 | 2,513 | 1,070 | 620 | 351 |
| 9. 1992 | X X X X | 3,065 | 1,285 | 729 |
| 10. 1993 | X X X X | X X X X | 3,047 | 1,405 |
| 11. 1994 | X X X X | X X X X | X X X X | 3,996 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5F - MEDICAL MALPRACTICE - CLAIMS-MADE - (CONTINUED)
SECTION 3B
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 1,493 | 1,495 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 3,129 | 3,149 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 4,148 | 4,578 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 4,492 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 1,497 | 1,498 | 1,498 | 1,498 |
| 5. 1988 | 3,158 | 3,161 | 3,163 | 3,164 |
| 6. 1989 | 4,592 | 4,600 | 4,603 | 4,607 |
| 7. 1990 | 4,791 | 4,804 | 4,814 | 4,817 |
| 8. 1991 | 4,669 | 5,045 | 5,060 | 5,080 |
| 9. 1992 | X X X X | 5,825 | 6,185 | 6,219 |
| 10. 1993 | X X X X | X X X X | 6,026 | 6,783 |
| 11. 1994 | X X X X | X X X X | X X X X | 7,567 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 5H - OTHER LIABILITY - OCCURRENCE
SECTION 1A
<TABLE>
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 168,681 | 169,945 |
| 2. 1985 | 0 | 0 | 0 | 0 | 13,816 | 14,416 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 17,065 | 18,027 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 17,243 | 18,366 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 15,205 | 16,989 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 9,092 | 14,843 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 12,273 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 170,833 | 171,727 | 172,404 | 176,698 |
| 2. 1985 | 14,569 | 14,765 | 14,932 | 15,038 |
| 3. 1986 | 18,398 | 18,753 | 18,999 | 19,148 |
| 4. 1987 | 18,864 | 18,381 | 18,663 | 18,844 |
| 5. 1988 | 18,072 | 18,931 | 19,385 | 19,581 |
| 6. 1989 | 16,814 | 18,108 | 18,916 | 19,399 |
| 7. 1990 | 18,581 | 20,698 | 22,017 | 22,787 |
| 8. 1991 | 10,241 | 15,983 | 17,998 | 19,266 |
| 9. 1992 | X X X X | 7,374 | 11,666 | 13,058 |
| 10. 1993 | X X X X | X X X X | 7,677 | 12,227 |
| 11. 1994 | X X X X | X X X X | X X X X | 7,449 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5H - OTHER LIABILITY - OCCURRENCE - (CONTINUED)
SECTION 2A
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 33,864 | 54,168 |
| 2. 1985 | 0 | 0 | 0 | 0 | 2,654 | 1,718 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 4,024 | 2,510 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 3,465 | 2,258 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 4,611 | 3,372 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 8,324 | 5,236 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 9,109 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 26,694 | 21,348 | 15,594 | 14,793 |
| 2. 1985 | 1,509 | 1,299 | 1,030 | 751 |
| 3. 1986 | 1,863 | 1,699 | 1,221 | 988 |
| 4. 1987 | 1,562 | 1,087 | 786 | 598 |
| 5. 1988 | 2,169 | 1,359 | 818 | 581 |
| 6. 1989 | 3,512 | 2,301 | 1,386 | 873 |
| 7. 1990 | 5,106 | 3,662 | 2,369 | 1,439 |
| 8. 1991 | 8,031 | 4,690 | 3,261 | 1,881 |
| 9. 1992 | X X X X | 5,581 | 3,507 | 2,498 |
| 10. 1993 | X X X X | X X X X | 6,022 | 3,551 |
| 11. 1994 | X X X X | X X X X | X X X X | 6,566 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5H - OTHER LIABILITY - OCCURRENCE - (CONTINUED)
SECTION 3A
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 524,016 | 551,016 |
| 2. 1985 | 0 | 0 | 0 | 0 | 36,046 | 36,635 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 44,414 | 45,136 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 37,852 | 38,847 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 37,116 | 39,041 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 28,622 | 38,295 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 35,536 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 528,610 | 530,948 | 538,133 | 548,274 |
| 2. 1985 | 37,141 | 37,490 | 37,914 | 38,315 |
| 3. 1986 | 45,632 | 46,332 | 46,963 | 47,510 |
| 4. 1987 | 39,332 | 39,724 | 40,265 | 40,794 |
| 5. 1988 | 39,970 | 40,643 | 41,282 | 41,866 |
| 6. 1989 | 40,424 | 41,558 | 42,613 | 43,526 |
| 7. 1990 | 45,322 | 47,637 | 49,108 | 50,312 |
| 8. 1991 | 31,960 | 40,611 | 43,139 | 44,776 |
| 9. 1992 | X X X X | 23,690 | 31,216 | 33,698 |
| 10. 1993 | X X X X | X X X X | 24,982 | 32,381 |
| 11. 1994 | X X X X | X X X X | X X X X | 23,429 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 5H - OTHER LIABILITY - CLAIMS-MADE
SECTION 1B
<TABLE>
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 514 | 665 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 380 | 596 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 159 | 396 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 181 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 783 | 850 | 890 | 913 |
| 5. 1988 | 739 | 858 | 930 | 958 |
| 6. 1989 | 641 | 801 | 925 | 1,001 |
| 7. 1990 | 496 | 779 | 988 | 1,121 |
| 8. 1991 | 134 | 479 | 821 | 1,069 |
| 9. 1992 | X X X X | 148 | 489 | 823 |
| 10. 1993 | X X X X | X X X X | 163 | 629 |
| 11. 1994 | X X X X | X X X X | X X X X | 223 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5H - OTHER LIABILITY - CLAIMS-MADE - (CONTINUED)
SECTION 2B
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 1,024 | 600 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 1,700 | 990 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 2,721 | 1,677 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 3,272 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 350 | 204 | 116 | 59 |
| 5. 1988 | 632 | 393 | 226 | 149 |
| 6. 1989 | 961 | 576 | 347 | 184 |
| 7. 1990 | 1,984 | 1,150 | 680 | 434 |
| 8. 1991 | 3,595 | 2,165 | 1,246 | 729 |
| 9. 1992 | X X X X | 3,630 | 2,039 | 1,202 |
| 10. 1993 | X X X X | X X X X | 4,099 | 2,281 |
| 11. 1994 | X X X X | X X X X | X X X X | 5,347 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5H - OTHER LIABILITY - CLAIMS-MADE - (CONTINUED)
SECTION 3B
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 4,361 | 4,373 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 4,496 | 4,510 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 3,970 | 4,457 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 4,626 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 4,376 | 4,376 | 4,378 | 4,379 |
| 5. 1988 | 4,529 | 4,541 | 4,543 | 4,545 |
| 6. 1989 | 4,474 | 4,485 | 4,501 | 4,502 |
| 7. 1990 | 5,131 | 5,153 | 5,170 | 5,177 |
| 8. 1991 | 5,114 | 5,690 | 5,715 | 5,724 |
| 9. 1992 | X X X X | 5,501 | 6,004 | 6,023 |
| 10. 1993 | X X X X | X X X X | 6,249 | 6,998 |
| 11. 1994 | X X X X | X X X X | X X X X | 8,440 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 5R - PRODUCTS LIABILITY - OCCURRENCE
SECTION 1A
<TABLE>
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 13,835 | 14,028 |
| 2. 1985 | 0 | 0 | 0 | 0 | 3,072 | 3,191 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 2,171 | 2,334 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 1,992 | 2,211 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 2,037 | 2,290 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 929 | 1,548 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 804 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 14,150 | 14,254 | 14,322 | 14,356 |
| 2. 1985 | 3,277 | 3,332 | 3,378 | 3,400 |
| 3. 1986 | 2,492 | 2,575 | 2,629 | 2,666 |
| 4. 1987 | 2,414 | 2,526 | 2,615 | 2,675 |
| 5. 1988 | 2,507 | 2,707 | 2,868 | 2,967 |
| 6. 1989 | 1,739 | 1,922 | 2,099 | 2,260 |
| 7. 1990 | 1,394 | 1,604 | 1,782 | 1,978 |
| 8. 1991 | 993 | 1,608 | 1,825 | 2,045 |
| 9. 1992 | X X X X | 899 | 1,506 | 1,722 |
| 10. 1993 | X X X X | X X X X | 883 | 1,374 |
| 11. 1994 | X X X X | X X X X | X X X X | 851 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5R - PRODUCTS LIABILITY - OCCURRENCE - (CONTINUED)
SECTION 2A
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 3,947 | 3,548 |
| 2. 1985 | 0 | 0 | 0 | 0 | 951 | 956 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 1,634 | 1,572 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 1,211 | 1,179 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 1,076 | 1,015 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 887 | 639 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 1,123 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 3,673 | 3,928 | 3,431 | 2,118 |
| 2. 1985 | 902 | 2,035 | 764 | 625 |
| 3. 1986 | 1,737 | 1,581 | 498 | 422 |
| 4. 1987 | 907 | 762 | 542 | 421 |
| 5. 1988 | 776 | 564 | 421 | 267 |
| 6. 1989 | 1,123 | 1,044 | 1,032 | 859 |
| 7. 1990 | 1,481 | 2,003 | 1,529 | 1,300 |
| 8. 1991 | 1,075 | 601 | 607 | 389 |
| 9. 1992 | X X X X | 620 | 521 | 439 |
| 10. 1993 | X X X X | X X X X | 689 | 487 |
| 11. 1994 | X X X X | X X X X | X X X X | 1,117 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5R - PRODUCTS LIABILITY - OCCURRENCE - (CONTINUED)
SECTION 3A
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 45,548 | 46,487 |
| 2. 1985 | 0 | 0 | 0 | 0 | 8,701 | 9,201 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 7,973 | 8,525 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 7,806 | 8,436 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 6,899 | 7,634 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 3,554 | 5,491 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 3,436 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 47,421 | 49,420 | 51,569 | 53,242 |
| 2. 1985 | 9,471 | 11,184 | 12,494 | 12,735 |
| 3. 1986 | 9,167 | 9,596 | 9,804 | 10,010 |
| 4. 1987 | 8,709 | 8,980 | 9,237 | 9,492 |
| 5. 1988 | 8,151 | 8,471 | 8,900 | 9,350 |
| 6. 1989 | 6,510 | 6,969 | 7,622 | 8,180 |
| 7. 1990 | 6,104 | 7,272 | 8,015 | 8,771 |
| 8. 1991 | 3,881 | 5,408 | 6,145 | 6,831 |
| 9. 1992 | X X X X | 3,486 | 5,247 | 5,992 |
| 10. 1993 | X X X X | X X X X | 4,488 | 5,829 |
| 11. 1994 | X X X X | X X X X | X X X X | 3,913 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 5R - PRODUCTS LIABILITY - CLAIMS-MADE
SECTION 1B
<TABLE>
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 1 | 1 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 1 | 1 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 1 | 1 | 1 | 1 |
| 5. 1988 | 1 | 1 | 1 | 1 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 1 | 1 | 1 | 1 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 0 | 0 |
| 11. 1994 | X X X X | X X X X | X X X X | 0 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5R - PRODUCTS LIABILITY - CLAIMS-MADE - (CONTINUED)
SECTION 2B
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 58 | 118 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 3 | 1 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 1 | 3 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 20 | 5 | 3 | 1 |
| 5. 1988 | 1 | 1 | 0 | 0 |
| 6. 1989 | 3 | 2 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 1 | 0 |
| 11. 1994 | X X X X | X X X X | X X X X | 0 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 5R - PRODUCTS LIABILITY - CLAIMS-MADE - (CONTINUED)
SECTION 3B
<CAPTION>
!--------------------#-----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END |
| 1 |---------------#----------------#----------------#----------------#----------------#----------------|
| Years | | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Premiums Were | | | | | | |
| Earned and | | | | | | |
| Losses Were | | | | | | |
| Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 62 | 145 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 4 | 2 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 1 | 3 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<-------------------->--------------->---------------->---------------->---------------->---------------->---------------->
<CAPTION>
!--------------------#-------------------------------------------------------------------#
| | |
| 1 |----------------#----------------#----------------#----------------|
| Years | | | | |
| in Which | 8 | 9 | 10 | 11 |
| Premiums Were | | | | |
| Earned and | | | | |
| Losses Were | | | | |
| Incurred | 1991 | 1992 | 1993 | 1994 |
|--------------------|----------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 148 | 148 | 148 | 148 |
| 5. 1988 | 3 | 3 | 3 | 3 |
| 6. 1989 | 3 | 3 | 3 | 3 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 2 | 2 | 2 | 2 |
| 9. 1992 | X X X X | 1 | 1 | 1 |
| 10. 1993 | X X X X | X X X X | 1 | 1 |
| 11. 1994 | X X X X | X X X X | X X X X | 0 |
| | | | | |
<-------------------->---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 6C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
SECTION 1
<TABLE>
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 539,161 | 552,911 |
| 11. 1994 | X X X X | X X X X | X X X X | 583,820 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL - (CONTINUED)
SECTION 2
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 32,429 | 45,666 |
| 11. 1994 | X X X X | X X X X | X X X X | 54,288 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6D - WORKERS' COMPENSATION
SECTION 1
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 1,393,961 | 1,404,832 |
| 11. 1994 | X X X X | X X X X | X X X X | 1,835,640 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6D - WORKERS' COMPENSATION - (CONTINUED)
SECTION 2
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 15,247 | 17,561 |
| 11. 1994 | X X X X | X X X X | X X X X | 12,614 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 6E - COMMERCIAL MULTIPLE PERIL
SECTION 1
<TABLE>
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 751,604 | 768,568 |
| 11. 1994 | X X X X | X X X X | X X X X | 824,554 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6E - COMMERCIAL MULTIPLE PERIL - (CONTINUED)
SECTION 2
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 18,127 | 23,652 |
| 11. 1994 | X X X X | X X X X | X X X X | 14,690 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6H - OTHER LIABILITY - OCCURRENCE
SECTION 1A
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 233,957 | 235,765 |
| 11. 1994 | X X X X | X X X X | X X X X | 480,112 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6H - OTHER LIABILITY - OCCURRENCE - (CONTINUED)
SECTION 2A
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 59,694 | 60,159 |
| 11. 1994 | X X X X | X X X X | X X X X | 91,046 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 6H - OTHER LIABILITY - CLAIMS-MADE
SECTION 1B
<TABLE>
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 509,439 | 517,596 |
| 11. 1994 | X X X X | X X X X | X X X X | 546,015 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6H - OTHER LIABILITY - CLAIMS-MADE - (CONTINUED)
SECTION 2B
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 94,671 | 98,050 |
| 11. 1994 | X X X X | X X X X | X X X X | 109,972 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6M - INTERNATIONAL
SECTION 1
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 183 | 0 |
| 11. 1994 | X X X X | X X X X | X X X X | 0 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6M - INTERNATIONAL - (CONTINUED)
SECTION 2
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 0 | 0 |
| 11. 1994 | X X X X | X X X X | X X X X | 0 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 6N - REINSURANCE A
SECTION 1
<TABLE>
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 2. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 3. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 4. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 5. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 6. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. 1988 | 0 | 0 | 0 | 0 |
| 2. 1989 | 0 | 0 | 0 | 0 |
| 3. 1990 | 0 | 0 | 0 | 0 |
| 4. 1991 | 0 | 0 | 0 | 0 |
| 5. 1992 | X X X X | 0 | 0 | 0 |
| 6. 1993 | X X X X | X X X X | 88,217 | 96,578 |
| 7. 1994 | X X X X | X X X X | X X X X | 81,695 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6N - REINSURANCE A - (CONTINUED)
SECTION 2
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 2. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 3. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 4. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 5. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 6. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. 1988 | 0 | 0 | 0 | 0 |
| 2. 1989 | 0 | 0 | 0 | 0 |
| 3. 1990 | 0 | 0 | 0 | 0 |
| 4. 1991 | 0 | 0 | 0 | 0 |
| 5. 1992 | X X X X | 0 | 0 | 0 |
| 6. 1993 | X X X X | X X X X | 3,796 | 4,130 |
| 7. 1994 | X X X X | X X X X | X X X X | 6,188 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6O - REINSURANCE B
SECTION 1
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 2. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 3. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 4. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 5. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 6. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. 1988 | 0 | 0 | 0 | 0 |
| 2. 1989 | 0 | 0 | 0 | 0 |
| 3. 1990 | 0 | 0 | 0 | 0 |
| 4. 1991 | 0 | 0 | 0 | 0 |
| 5. 1992 | X X X X | 0 | 0 | 0 |
| 6. 1993 | X X X X | X X X X | 109,584 | 103,906 |
| 7. 1994 | X X X X | X X X X | X X X X | 80,343 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6O - REINSURANCE B - (CONTINUED)
SECTION 2
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 2. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 3. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 4. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 5. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 6. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 7. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. 1988 | 0 | 0 | 0 | 0 |
| 2. 1989 | 0 | 0 | 0 | 0 |
| 3. 1990 | 0 | 0 | 0 | 0 |
| 4. 1991 | 0 | 0 | 0 | 0 |
| 5. 1992 | X X X X | 0 | 0 | 0 |
| 6. 1993 | X X X X | X X X X | 119 | 276 |
| 7. 1994 | X X X X | X X X X | X X X X | 184 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<PAGE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1994 OF THE CONTINENTAL CASUALTY COMPANY
SCHEDULE P - PART 6R - PRODUCTS LIABILITY - OCCURRENCE
SECTION 1A
<TABLE>
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 72,468 | 76,127 |
| 11. 1994 | X X X X | X X X X | X X X X | 71,170 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6R - PRODUCTS LIABILITY - OCCURRENCE - (CONTINUED)
SECTION 2A
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 12,126 | 13,887 |
| 11. 1994 | X X X X | X X X X | X X X X | 13,105 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6R - PRODUCTS LIABILITY - CLAIMS-MADE
SECTION 1B
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 114 | 123 |
| 11. 1994 | X X X X | X X X X | X X X X | 71 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
<PAGE>
<PAGE>
SCHEDULE P - PART 6R - PRODUCTS LIABILITY - CLAIMS-MADE - (CONTINUED)
SECTION 2B
<CAPTION>
!-----------------------------#------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END (000 OMITTED) |
| Years in |---------------#---------------#---------------#---------------#---------------#---------------|
| Which Premiums | | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7 |
| and Losses | | | | | | |
| Were Incurred | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> <C> <C> |
| 1. Prior | 000 | 0 | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. 1986 | X X X X | 0 | 0 | 0 | 0 | 0 |
| 4. 1987 | X X X X | X X X X | 0 | 0 | 0 | 0 |
| 5. 1988 | X X X X | X X X X | X X X X | 0 | 0 | 0 |
| 6. 1989 | X X X X | X X X X | X X X X | X X X X | 0 | 0 |
| 7. 1990 | X X X X | X X X X | X X X X | X X X X | X X X X | 0 |
| 8. 1991 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 9. 1992 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 10. 1993 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| 11. 1994 | X X X X | X X X X | X X X X | X X X X | X X X X | X X X X |
| | | | | | | |
<----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->
<CAPTION>
!-----------------------------#---------------------------------------------------------------#
| 1 | |
| Years in |---------------#---------------#---------------#---------------|
| Which Premiums | | | | |
| Were Earned | 8 | 9 | 10 | 11 |
| and Losses | | | | |
| Were Incurred | 1991 | 1992 | 1993 | 1994 |
|-----------------------------|---------------|---------------|---------------|---------------|
<S> <C> <C> <C> <C> |
| 1. Prior | 0 | 0 | 0 | 0 |
| 2. 1985 | 0 | 0 | 0 | 0 |
| 3. 1986 | 0 | 0 | 0 | 0 |
| 4. 1987 | 0 | 0 | 0 | 0 |
| 5. 1988 | 0 | 0 | 0 | 0 |
| 6. 1989 | 0 | 0 | 0 | 0 |
| 7. 1990 | 0 | 0 | 0 | 0 |
| 8. 1991 | 0 | 0 | 0 | 0 |
| 9. 1992 | X X X X | 0 | 0 | 0 |
| 10. 1993 | X X X X | X X X X | 18 | 20 |
| 11. 1994 | X X X X | X X X X | X X X X | 13 |
| | | | | |
<----------------------------->--------------->--------------->--------------->--------------->
</TABLE>
