SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Commission file number
December 31, 1993 1-7801
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ORION CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-6069054
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
30 Rockefeller Plaza, New York, NY 10112-0156
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-332-8080
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock, $1 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
9 1/8% Senior Notes due September 1, 2002
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K. [x]
The aggregate market value of the voting stock of the registrant held by
non-affiliates was $443,005,343 as of March 11, 1994.
As of March 11, 1994, 14,352,088 shares of Common Stock, $1.00 par value,
of registrant were outstanding exclusive of shares held by registrant and its
subsidiaries.
DOCUMENTS INCORPORATED BY REFERENCE
The information required by Part III is incorporated by reference from
registrant's definitive proxy statement for its Annual Meeting to be held on
June 1, 1994. Registrant intends to file the proxy material, which involves
the election of directors, not later than 120 days after the close of its
fiscal year.
<PAGE>
PART I
ITEM 1. BUSINESS
Orion Capital Corporation ("Orion") is a property and casualty
insurance holding company incorporated under the laws of the State of
Delaware in 1960. Although Orion's insurance subsidiaries and affiliates
are authorized to underwrite and sell most types of property and casualty
insurance, their businesses are concentrated in niche insurance markets,
particularly specialty workers compensation, architect and engineer
professional liability and nonstandard automobile insurance. (Orion and
its wholly-owned subsidiaries are referred to collectively as the
"Company.") The Company markets its workers compensation insurance
through the EBI Companies and a newly created entity, Nations' Care, Inc.
("Nations' Care"). Nations' Care was created in late 1993 and will
primarily focus on alternative workers compensation services and
products. The Company sells its professional liability insurance through
the DPIC Companies and participates in the nonstandard commercial and
personal automobile insurance business through its slightly less than 50%
interest in Guaranty National Corporation ("Guaranty National").
(Guaranty National and its wholly-owned subsidiaries are referred to
collectively as the "Guaranty National Companies.") The Company writes
assumed reinsurance through SecurityRe Companies and other specialty
property and casualty insurance, principally through the Connecticut
Specialty Insurance Group.
The Company currently holds 6,143,414 shares of Guaranty National
common stock. Between November 1988 and November 20, 1991, Guaranty
National was a wholly-owned subsidiary of the Company. On November 20,
1991, the Company sold slightly more than half of its interest in
Guaranty National. Guaranty National and its subsidiaries operate as an
independent publicly-held company and, except for certain services
contractually provided, are not managed by the Company. Three of the
eight members of Guaranty National's board of directors are selected by
Orion. See "Summary of Insurance Operations - Guaranty National
Companies."
In December 1993, the Company completed the acquisition of
approximately 20% of the outstanding common stock (1,526,484 shares) of
Intercargo Corporation ("Intercargo") for a total cash purchase price of
$19,314,000. Intercargo is an insurance holding company whose
subsidiaries specialize in international trade and transportation
coverages. Intercargo operates as an independent company. One member
of Intercargo's seven-member board of directors is selected by Orion.
The Company's insurance subsidiaries are licensed to transact
business throughout the United States and in several Canadian provinces.
They obtain substantially all of their business from approximately 675
independent insurance agents and brokers. The Company has approximately
1,400 employees, substantially all of whom are employed in the Company's
insurance operations.
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<PAGE>
During 1992 and the first part of 1993, Orion reconfigured and
simplified its debt and capital structure by issuing $110,000,000 of 9
1/8% Notes due September 1, 2002, ("9 1/8% Senior Notes") and calling for
the redemption of all three of its outstanding preferred stocks and both
issues of its outstanding debentures. Most holders of its two
Convertible Exchangeable Preferred Stocks opted to convert their shares
of preferred stock into shares of Common Stock at or prior to the
redemption date. The conversions resulted in the issuance of 3,982,000
shares of Common Stock. As a result of those actions, the only
outstanding securities of Orion are its common stock and its 9 1/8%
Senior Notes. The reconfiguration and simplification of its debt and
capital structure enabled the Company to take advantage of generally
lower interest rates, decrease the cost of its capital, and reduce the
amount of debt and preferred stock sinking fund payments that were coming
due in the next few years. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources."
The Company's principal executive offices are located at 30
Rockefeller Plaza, New York, New York 10112, and its telephone number is
(212) 332-8080. The home offices of all the Company's insurance
subsidiaries are located at 9 Farm Springs Drive, Farmington, Connecticut
06032.
For segment reporting purposes, the operations of the Company are
reported as four segments. The insurance operations of the Company are
treated as three segments, Regional Operations, Reinsurance/Special
Programs and the Company's interest in the Guaranty National Companies.
Guaranty National's operations were reported on a consolidated basis from
1988 through November 20, 1991 and on the equity accounting basis since
then. The miscellaneous activities of Orion, the parent holding company,
and various incidental subsidiaries not involved in insurance-related
activities are reported as a fourth segment under the heading "Other."
Regional Operations is composed primarily of two divisions, the EBI
Companies and Nations' Care. These operations underwrite and sell
workers compensation insurance through independent agents and brokers.
Nations' Care also offers workers compensation consulting and
administrative services. Regional Operations' results include the
declining costs associated with the run-off of the Company's commercial
multiple peril insurance business, which was discontinued in 1988.
Reinsurance/Special Programs includes the DPIC Companies, which markets
professional liability insurance; SecurityRe Companies, which writes
reinsurance; the Connecticut Specialty Insurance Group, which underwrites
and sells specialty insurance programs through independent agents and
general agents; and Intercargo, which specializes in international trade
and transportation coverages. The Guaranty National Companies specialize
in writing nonstandard commercial and personal automobile insurance,
general liability insurance, surplus lines commercial property and
casualty insurance and collateral protection insurance. The business of
Orion's other subsidiaries, all of which are insubstantial, as well as
the miscellaneous income and expenses (primarily interest, general and
administrative expenses and other consolidating elimination entries) of
Orion itself, are reported as a fourth segment.
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<PAGE>
Net earnings for 1993 amounted to $68,813,000 or $4.69 per primary
common share (after preferred dividends) on 14,598,000 weighted average
common shares outstanding as compared with net earnings of $42,872,000
or $3.35 per primary common share (after preferred dividends) in 1992 on
10,914,000 weighted average common shares outstanding. Earnings per
share in 1993 include a benefit of $.81 from the cumulative effect of
changes in accounting principles and 1992 earnings per share were reduced
$.27 per share by an extraordinary loss from the early extinguishment of
debt. Common stock and per common share data have been restated to
reflect Orion's 5-for-4 stock splits paid on both December 7, 1992 and
November 15, 1993. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
The following tables present condensed financial information showing
revenues, pre-tax earnings (loss) and other financial data and ratios of
the Company's four segments for each of the three years in the period
ended December 31, 1993. Identifiable assets, by segment, are included
in Note L to Consolidated Financial Statements, "Industry Segment
Information."
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<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------
1993 1992 1991
---- ---- ----
(000s omitted)
<S> <C> <C> <C>
REVENUES:
Regional Operations (1) ................. $304,286 $303,211 $311,607
Reinsurance/Special Programs (1)......... 414,152 344,352 319,635
Guaranty National Companies (2) ......... - - 205,167
Other ................................... 1,717 155 885
-------- -------- --------
$720,155 $647,718 $837,294
======== ======== ========
EARNINGS (LOSS):
Regional Operations (1) ................. $ 34,025 $ 4,227 $ (9,816)
Reinsurance/Special Programs (1) ........ 44,032 50,384 50,500
Guaranty National Companies (2):
Pre-tax earnings ...................... - - 22,477
Equity in net earnings of affiliate ... 9,509 9,994 1,207
-------- -------- --------
Total property and casualty operations. 87,566 64,605 64,368(1)
Other ................................... (15,061) (17,891) (18,299)
-------- -------- --------
72,505 46,714 46,069(1)
Federal income taxes .................... (15,517) (922) (1,401)
Cumulative effect of adoption of new
accounting principles ................. 11,825 - -
Extraordinary loss, net of taxes ........ - (2,920) -
-------- -------- --------
Net earnings .......................... $ 68,813 $ 42,872 $ 44,668(1)
======== ======== ========
<CAPTION>
SUMMARY OF INSURANCE OPERATIONS
The following tables present certain summary operating data for the
Company's three insurance segments:
Year Ended December 31,
---------------------------------
1993 1992 1991
---- ---- ----
(000s omitted)
<S> <C> <C> <C>
REGIONAL OPERATIONS (1):
Revenues -
Premiums earned ....................... $266,373 $268,145 $263,478
Net investment income ................. 33,760 33,182 32,014
Realized investment gains (losses) .... 4,153 2,077 (517)
Gain on sale of common stock of
Guaranty National ................... - - 14,692
Other income .......................... - (193) 1,940
-------- -------- --------
Total ............................... $304,286 $303,211 $311,607
======== ======== ========
Earnings (loss) before federal income
taxes ................................. $ 34,025 $ 4,227 $ (9,816)
======== ======== ========
<FN>
__________________________
Footnotes on following page
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<PAGE>
<CAPTION>
Year Ended December 31,
--------------------------------
1993 1992 1991
---- ---- ----
(000s omitted)
<S> <C> <C> <C>
REINSURANCE/SPECIAL PROGRAMS (1):
Revenues -
Premiums earned ....................... $351,031 $292,060 $256,619
Net investment income ................. 55,500 48,416 43,924
Realized investment gains (losses) .... 6,706 3,027 (1,161)
Gain on sale of common stock of
Guaranty National ................... - - 19,239
Other income .......................... 915 849 1,014
-------- -------- --------
Total ............................... $414,152 $344,352 $319,635
======== ======== ========
Earnings before federal income taxes .... $ 44,032 $ 50,384 $ 50,500
======== ======== ========
GUARANTY NATIONAL COMPANIES (2):
Earnings before federal income taxes .... $ - $ - $ 22,477
======== ======== ========
Equity in net earnings of affiliate ..... $ 9,509 $ 9,994 $ 1,207
======== ======== ========
<CAPTION>
The following table sets forth, on a consolidated basis, certain
insurance ratios for the Company (2):
Year Ended December 31,
--------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Loss and loss adjustment expenses to
premiums earned ....................... 74.4% 75.7% 76.8%
Policy acquisition and other insurance
expenses to premiums earned ........... 26.8 27.3 30.2
----- ----- -----
Total before policyholders' dividends.. 101.2 103.0 107.0
Policyholders' dividends to premiums
earned ................................ 2.0 2.4 2.4
----- ----- -----
Total after policyholders' dividends .. 103.2% 105.4% 109.4%
===== ===== =====
<FN>
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(1) 1991 includes a gain of $33,931,000 ($14,692,000 for Regional Operations
and $19,239,000 for Reinsurance/Special Programs) from the sale of the
Guaranty National shares and a cumulative loss provision of $25,000,000
($12,100,000 for Regional Operations and $12,900,000 for
Reinsurance/Special Programs). (See "Management's Discussion and Analysis
of Financial Condition and Results of Operations").
(2) The operations of the Guaranty National Companies are included in revenues
and expenses through November 20, 1991, the date that the Company sold
6,250,000 shares of Guaranty National's common stock in a public offering,
reducing the Company's ownership of Guaranty National to approximately
49%. Subsequent to November 20, 1991, the Company's share of Guaranty
National's after-tax earnings are included on an equity accounting basis.
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</TABLE>
<PAGE>
<TABLE>
The Company's insurance subsidiaries include eight active wholly-owned
insurance companies, as well as a wholly-owned reinsurance underwriting
management company, service companies and an insurance brokerage firm. One or
more of Orion's insurance subsidiaries is licensed and transacts business in each
of the 50 states of the United States, the District of Columbia, Puerto Rico and
several provinces of Canada. In 1993, approximately 13.1% of the direct premiums
written by the insurance subsidiaries was generated in Florida, 11.4% in
Pennsylvania and, in the aggregate, an additional 25.1% was generated in the
states of California, Wisconsin and Texas. No other state accounts for more than
5% of the insurance premiums written by the Company. Growth in premiums written
in Florida in 1993 is attributable to personal automobile insurance generally
written with minimum statutory liability limits and professional liability
insurance. The following table shows the geographical distribution of direct
insurance premiums written by the Company in 1993, 1992 and 1991, including
premiums of the Guaranty National Companies through November 20, 1991.
<CAPTION>
Geographical Distribution of Direct Premiums Written
Year Ended December 31,
--------------------------------------------------------------
State 1993 Pct. 1992 Pct. 1991 Pct.
- ----- ---- ---- ---- ---- ---- ----
(000s omitted - except for percentages)
<S> <C> <C> <C> <C> <C> <C>
Florida .......... $ 84,754 13.1% $ 49,008 8.0% $ 24,295 3.1%
Pennsylvania ..... 74,066 11.4 80,392 13.1 73,878 9.3
California ....... 60,675 9.4 59,664 9.7 72,157 9.1
Wisconsin ........ 56,209 8.7 53,083 8.6 51,217 6.5
Texas ............ 45,050 7.0 46,684 7.6 81,127 10.2
All others ....... 326,672(1) 50.4 327,185 53.0 489,008 61.8
-------- ----- -------- ----- -------- -----
$647,426 100.0% $616,016 100.0% $791,682 100.0%
======== ===== ======== ===== ======== =====
<FN>
(1) In 1993, no other single state or country accounts for more than 5% of
total direct written premiums.
</TABLE>
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<PAGE>
For 1993, approximately 49.0% of the Company's net premiums written was
derived from workers compensation insurance written in twelve selected states
(including all states listed in the preceding table except Florida and
California), approximately 22.9% related to liability insurance other than
automobile, primarily professional liability insurance, and approximately 21.1%
came from automobile insurance (not including premiums from Guaranty National
Companies). No other line of business contributed in excess of 3% to 1993
premiums written. The following table shows premiums written for the Company,
net of reinsurance, by major statutory lines of business.
<TABLE>
<CAPTION>
Net Premiums Written
Year Ended December 31,
------------------------------------------------------
1993 Pct. 1992 Pct. 1991 Pct.
---- ---- ---- ---- ---- ----
(000s omitted - except for percentages)
<S> <C> <C> <C> <C> <C> <C>
Workers compensation .. $311,150 49.0% $331,044 58.3% $331,647 45.2%
Liability other than
automobile .......... 145,493 22.9 123,973 21.8 163,224 22.2
Private passenger
automobile .......... 72,286 11.4 36,560 6.4 94,479 12.9
Commercial automobile . 61,798 9.7 43,246 7.6 111,192 15.2
Surety ................ 11,420 1.8 10,085 1.8 3,671 0.5
Commercial multiple
peril ............... 9,028 1.4 9,104 1.6 6,901 0.9
All others ............ 24,411 3.8 13,418 2.5 22,951 3.1
-------- ----- -------- ----- -------- -----
$635,586 100.0% $567,430 100.0% $734,065 100.0%
======== ===== ======== ===== ======== =====
</TABLE>
See "Insurance Industry Characteristics - Loss Reserves" for a discussion
of losses incurred in specific geographical regions and in specific lines of
business.
-8-
<PAGE>
REGIONAL OPERATIONS
The Regional Operations segment is comprised primarily of two divisions,
the EBI Companies and the newly created entity, Nations' Care. The EBI
Companies provides traditional workers compensation insurance and Nations'
Care will focus on providing alternative workers compensation services and
products.
From 1989 through 1993, the EBI Companies' net premiums written have
accounted for almost all of the premium volume of the Regional Operations
segment. The EBI Companies devote substantially all of their resources to
underwriting and selling workers compensation insurance through independent
agents and brokers. EBI believes it has a competitive edge stemming from its
service oriented approach. It is among the 25 largest writers of workers
compensation insurance in the United States based on net premiums written. For
a variety of reasons, EBI has phased out of the workers compensation business
in California, a process it began in 1990. The decrease in premium volume in
California has been substantially offset by growth in other markets, such as
Connecticut, Illinois, Indiana, Pennsylvania, Texas and Wisconsin. Regional
Operations staffs its offices with underwriters, field production
representatives, claims and loss control representatives, medical and
rehabilitation experts and other technical and administrative personnel. The
EBI Companies' specialized approach is founded upon a team concept under which
loss control and claims management personnel have significant direct
involvement in account selection and in underwriting each policy. Upon
acceptance of each new account, an EBI team begins to work with the insured
and its employees to identify the factors that influence their insurance
costs. During the policy term, the EBI team continues to provide services
designed to reduce the frequency and severity of injuries. Because of its
desire to influence and impact the workplace environment in order to reduce
losses, EBI concentrates its efforts on single-location, fixed-plant insureds,
such as small to medium-sized manufacturers and selected service businesses.
Regional Operations' new division, Nations' Care, will capitalize on the
Company's expertise acquired from its service oriented and team approach to
traditional workers compensation. It will apply these skills in writing
workers compensation for large accounts, accounts with large deductibles and
other insurance products. It will also offer consulting and administrative
services to self-insured workers compensation programs. Nations' Care will
emphasize its cost effective loss control and claims management consulting
services. Nations' Care currently operates in five states but expects
ultimately to sell its services more broadly throughout the United States.
A workers compensation policy obligates an insurance company to pay all
compensation and other benefits for injured workers as may be required by
applicable state workers compensation laws. Such benefits include, among
other things, payments for medical and hospital expenses, and disability and
vocational rehabilitation expenses. The insurance policies currently written
by the EBI Companies provide workers compensation coverage with limits of
liability set by the provisions of the state workers compensation laws. The
benefits provided by these laws vary with the nature and severity of the
injury or disease, as well as with the wage level, occupation and age of the
employee. Employers liability coverage is also provided to employers who may
be subject to claims for damages (not workers compensation benefits) because
of an injury to a worker.
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<PAGE>
The amount of workers compensation premiums earned is directly dependent
upon wage levels as well as the number of employees on the payroll of each
policyholder and the job classification of those employees. Accordingly,
premiums may be affected by the level of unemployment in general, and
particularly by the level of unemployment experienced in those industries and
geographic areas which represent a substantial portion of the Company's
workers compensation insurance business. Premium rates are revised annually
in most states in which the EBI Companies do business. Rates vary with
different job classifications and among different employers. The EBI
Companies use the rates and rating plans filed in the states where they do
business. See "Industry Characteristics - Rates."
Approximately 600 independent agents and brokers produced substantially
all of the direct business written in 1993 by the EBI Companies. All of such
agents and brokers receive commissions on the sale of insurance. No single
independent agent or broker contributed more than 5% of this segment's net
written premiums. The agents and brokers provide a broad range of insurance
services to the public within their local areas, operate as independent
contractors and generally represent other insurers as well.
REINSURANCE/SPECIAL PROGRAMS
The Company's Reinsurance/Special Programs segment is comprised of four
components: DPIC Companies, SecurityRe Companies, Connecticut Specialty
Insurance Group ("Connecticut Specialty") and the Company's 20% equity
interest in Intercargo Corporation. All of such components concentrate in
highly specialized lines of business in the property and casualty insurance
field.
DPIC Companies writes professional liability insurance for architects,
engineers and accountants. DPIC Companies is the second largest underwriter
of architect and engineer liability insurance in the United States. DPIC
Companies also writes business in Canada.
On October 1, 1993, DPIC Companies substantially reorganized its
operations into a structure that more directly aligns its various business
functions with particular types of customers. DPIC Companies' Architects and
Engineers Underwriting unit was divided into three major divisions:
Architects, Engineers and Special Risks. Each division is now staffed
with underwriters focused on a more specific discipline thus engendering in
them a greater familiarity with the issues facing their customers.
DPIC Companies markets a program of professional liability insurance,
similar to its architects and engineers products, for selected medium-sized
certified public accounting firms in a program called A/PLS+. In 1994 DPIC
Companies plans to introduce a similar program for preferred law firms in a
program called L/PLS+. DPIC Companies' accountants, lawyers and Canadian
programs comprise a fourth DPIC Companies division - the Emerging Businesses
group.
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<PAGE>
Professional liability insurance covers liability arising out of alleged
negligent performance of professional services. Underwriting and claims
management require a high level of knowledge and expertise. In an attempt to
limit risk exposure, DPIC Companies' specialized underwriters evaluate a
great number of factors, including the experience of an applicant firm's
professional personnel, the loss history of the firm and the employees to be
covered, the type of work performed and the firm's utilization of suggested
loss prevention measures. DPIC Companies uses a premium credit incentive
program to encourage insureds to participate in its interactive liability
education program and to use other loss prevention practices, such as use of
"limitation of liability" clauses in their client contracts.
The coverage offered by DPIC Companies is on a "claims-made and reported"
policy form, a form which generally insures claims reported by the insured
only during the policy term. DPIC Companies generally uses a policy form
under which defense costs, primarily legal fees, are limited by their
inclusion within the insured's stated policy limits. This policy form has had
a favorable impact in controlling legal costs. DPIC Companies' specialized
claims staff, located in eight offices in the United States and Canada, stress
early intervention in disputes to avoid litigation whenever possible. DPIC
Companies has been a pioneer in using alternative dispute resolution methods
to mediate and promptly resolve disputes. DPIC Companies' "Mediation Works"
program has been particularly successful. DPIC Companies offers incentives to
insureds who agree to mediate disputes. Currently, nearly 28% of all open
claims are in mediation or proceeding under some other form of alternative
dispute resolution. Management believes that the use of such methods has had
a beneficial impact on DPIC Companies' operating results.
DPIC Companies markets its products through 54 specialized agencies, each
highly knowledgeable about risk management for the professions served and
about the DPIC Companies' loss reduction programs. Management believes that
this "value added" approach is the reason why DPIC Companies has experienced
a high customer retention rate over a long period of time and why it is less
vulnerable to price competition. The agents participate in continuing
education programs sponsored by DPIC Companies, and also actively participate
in professional societies.
Connecticut Specialty administers the operation of approximately 30
specialty programs written through general agencies. The specialized coverages
include personal lines automobile insurance, workers compensation insurance,
as well as various liability coverages for the trucking industry. Connecticut
Specialty utilizes a profit sharing approach in writing its special programs
whereby minimal profit is earned by the general agent until the program is
profitable. Connecticut Specialty closely monitors its programs throughout
their existence to ensure that profit potential is maximized.
Pricing volatility for the business that Connecticut Specialty writes is
generally low. The specialty nature of such business provides some insulation
against the competitive pressures of the overall insurance market.
Connecticut Specialty's ability to exit and enter markets rather quickly is an
added competitive advantage.
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<PAGE>
The Reinsurance/Special Programs segment also participates in facultative
and treaty reinsurance throughout the United States through SecurityRe
Companies. SecurityRe Companies underwrites a diverse book of property and
casualty business using reinsurance intermediaries. Treaty business is
focused on small to medium-sized specialty or regional insurance companies.
The Reinsurance/Special Programs segment also includes the Company's 20%
interest in Intercargo. Intercargo is an insurance holding company whose
subsidiaries specialize in international trade and transportation coverages.
Its principal product lines are U.S. Customs bonds and marine cargo insurance
sold to importers and exporters through customs brokers and other service
firms engaged in the international movement of goods. Intercargo operates as
an independent entity and a pro rata share of any profit or loss is reflected
in the Company's consolidated financial statements, based on the Company's
equity interest in Intercargo. The shares of Intercargo were purchased by the
Company in September and December 1993.
GUARANTY NATIONAL COMPANIES
The Company participates in nonstandard commercial and personal
automobile insurance and surplus lines insurance through its slightly less
than 50% interest in Guaranty National. Based in Englewood, Colorado, the
Guaranty National Companies underwrite and sell specialty property and
casualty coverages which are not readily available in traditional insurance
markets.
Approximately 87% of the Guaranty National Companies' net written
premiums during 1993 was derived from writing automobile (both private
passenger and commercial) insurance. Other types of insurance products sold
by Guaranty National Companies are general liability, commercial multi-peril,
umbrella and property. Guaranty National Companies has historically focused
its operations on the nonstandard markets. Nonstandard risks require
specialized underwriting, claims management and other skills and experience.
Guaranty National Companies' expertise and market position has allowed it to
generate an underwriting profit in five of the last six years.
Guaranty National Companies' personal lines unit principally writes
nonstandard automobile insurance, insurance for drivers usually unacceptable
to other insurers for, among other reasons, adverse driving or accident
histories, ages or vehicle types. This business represents approximately 33%
of the Guaranty National Companies' total gross written premiums and is sold
through approximately 1,950 independent agents in 21 states, primarily in the
Rocky Mountain and Pacific Northwest regions.
Guaranty National Companies' largest unit, its commercial lines, wrote
approximately 58% of Guaranty National Companies' gross written premiums in
1993. Approximately 73% of the commercial insurance was derived during 1993
from commercial automobile insurance, which covers policyholders such as sand
and gravel haulers, used car dealers, automobile repair facilities, and local
log hauling and trucking firms. Other commercial lines coverage includes
property (for example, motor-truck cargo), general liability (for example,
contractors and fuel convenience stores), low hazard professional liability
(for example, teachers), standard umbrella insurance, standard commercial
packages and other commercial coverages.
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<PAGE>
Guaranty National Companies' commercial lines business is written through
three divisions. The general and specialty divisions write business through
68 general agents and various brokers throughout the United States except for
New Jersey, Massachusetts and four other Northeastern states. Guaranty
National Companies' third commercial lines division is the standard division,
whose business is written by Colorado Casualty Insurance Company ("CCIC"). In
October 1992, Guaranty National acquired CCIC, an insurance company which
writes primarily small standard commercial packages in the Rocky Mountain
Region. CCIC has been successful in serving a niche market of approximately
290 rural retail agents.
The Guaranty National Companies' third operating unit, Intercon General
Agency, Inc., is a wholly-owned managing general agency which obtains business
from 28 general agents across the country. Intercon principally markets
collateral protection insurance, primarily insuring automobiles pledged as
security for bank loans for which the borrower has not maintained physical
damage coverage as required by the bank. The collateral protection business
represents 9% of Guaranty National Companies' gross written premiums for 1993.
Nonstandard risks generally involve a potential for poor claims
experience because of increased risk exposure. Premium levels for
nonstandard risks are substantially higher than for preferred or standard
risks. In personal lines, Guaranty National Companies' loss exposure is
limited by the fact that its insureds typically purchase low liability limits,
often a state's statutory minimum. The nonstandard insurance industry is also
characterized by the insurer's ability to minimize its exposure to
unprofitable business by effecting timely changes in premium rates and policy
terms in response to changing loss and other experiences. In the states where
the Guaranty National Companies writes the majority of its business, prior
approval to effectuate rate changes is not required. In those states where
prior approval is required, the Guaranty National Companies has generally
gained approval in a timely manner.
In November 1993, Guaranty National acquired Peak Property and Casualty
Insurance Corporation ("PEAK"), a property and casualty insurance company
"shell" licensed in 39 states. The PEAK acquisition increases the Guaranty
National Companies' marketing and licensing flexibility to take advantage of
opportunities to write more special program business and allows the Guaranty
National Companies to expand its standard commercial business to states
outside the Rocky Mountain region.
On November 20, 1991, the Company sold 6,250,000 shares, or slightly more
than half, of the common stock of Guaranty National in a public offering
("Guaranty Sale") and received a special one-time dividend in the form of
notes. As a result of the Guaranty Sale, Guaranty National became a publicly-
held company with its stock listed on the New York Stock Exchange. In
February 1994 Guaranty National's Board of Directors approved a stock
repurchase program. The Company has agreed to sell, and Guaranty National to
buy, a portion of Guaranty National's common stock to the extent necessary for
the Company to maintain its ownership interest in Guaranty National at
approximately its present level of slightly under 50%.
-13-
<PAGE>
In conjunction with the Guaranty Sale, Guaranty National and its
subsidiaries entered into a series of agreements to formalize their continuing
business relationships with Orion and the Company's insurance subsidiaries.
Among the more significant of these agreements is a shareholders agreement
pursuant to which the Company has the right to designate three members of
Guaranty National's board, including the Chairman of the Board, for so long as
the Company beneficially owns 30% or more of Guaranty National. Under this
agreement, the Company also has a right until 1997 to require Guaranty
National to register under the Securities Act of 1933 all or part of the
6,143,414 shares of common stock it continues to hold. In addition, the
Company's insurance subsidiaries and the Guaranty National Companies also
entered into certain reinsurance agreements and a trade name agreement. Orion
and Guaranty National have signed an investment management agreement pursuant
to which the Guaranty National Companies' investment portfolio (except for a
portion of the equity securities portfolio which is managed by an unaffiliated
portfolio manager) is managed by Orion's investment managers (under the
direction and supervision of Guaranty National) for a fee of $550,000 per year
for 1993 and 1994. After September 30, 1994, the investment management
agreement continues for annual periods, unless terminated by either party upon
90 days prior written notice.
-14-
<PAGE>
INSURANCE INDUSTRY CHARACTERISTICS
Loss Reserves
- -------------
The Company establishes reserve liabilities for reported losses, incurred
but not reported ("IBNR") losses, and claim settlement and administration
expenses. Reserves for reported losses and loss adjustment expenses are
estimates of the ultimate costs of claims incurred but not settled. IBNR loss
reserves are estimates for both unreported claims and additional development
of previously reported claims. Such reserves are primarily based on the
circumstances surrounding each claim, the Company's historical experience with
losses arising from claims not yet reported, the particular experience
associated with the line of business and type of risk involved, and changes in
costs. Changes in costs relate to costs for property, repairs to property,
medical care, litigation and other legal costs, and vocational rehabilitation.
The Company regularly monitors the factors affecting its reserves to better
control claim costs, which also provides a base of information to reevaluate
reserve estimates with regard to the amount and timing of claim reporting.
The reserve estimation process is regularly reviewed and adjusted to consider
all pertinent information as it becomes available as to the ultimate net cost
of losses and claims incurred. Such reevaluation is a normal, recurring
activity that is inherent in the process of loss reserves estimation.
Management revises its reserve estimates as appropriate and believes that the
loss and loss adjustment expense reserves of the Company's insurance
subsidiaries make reasonable and sufficient provision for the ultimate net
cost of all losses and claims incurred. However, no assurances can be given
that reserve development will not occur in the future.
Accident Year Loss and Loss Adjustment Expense Analysis
- -------------------------------------------------------
Accident year is a period of exposure that is used to accumulate loss and
loss adjustment experience by the year in which an incident giving rise to a
claim occurs. Accident year information is used for loss reserving and in
establishing premium rates. Accident year loss experience is updated in
subsequent calendar years until all losses and loss adjustment expenses
related to that given accident year have been settled. Accident year loss
ratio relates losses associated with incidents giving rise to claims occurring
within a given calendar year to premiums earned during the same calendar year.
Presented below is a loss reserve development table for the five years ended
December 31, 1993 prepared in accident year format. In this accident year
analysis, reserves related to insurance subsidiaries acquired in 1984 and 1988
are included from the dates of acquisition. Redundancies or deficiencies
related to the reserves of these subsidiaries are included in years subsequent
to their acquisition.
For each accident year, the following table presents premiums earned, and
the provision for loss and loss adjustment expenses as a percentage of
premiums earned (the "loss ratios") as established in the initial accident
year and cumulative as of December 31, 1993.
-15-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Loss and Loss Adjustment
Accident Premiums Expense Development
-------------------------------
Year Earned Initial Cumulative
- -------- -------- ------- ----------
(000s omitted)
<S> <C> <C> <C>
1989 $718,554 67.5% 69.0%
1990 687,976 67.4 69.5
1991 701,386 67.7 67.4
1992 560,205 71.0 71.7
1993 617,404 70.4 -
<CAPTION>
The table set forth below indicates premiums earned, the loss ratio, the
ratio of policy acquisition costs and other insurance expenses to premiums
earned (the "expense ratio"), the ratio of policyholders' dividends to
premiums earned (the "policyholders' dividend ratio") and the total of the
ratios (the "combined ratio") at December 31, 1993.
Accident Premiums Loss Expense Policyholders' Combined
Year Earned Ratio Ratio Dividend Ratio Ratio
- -------- -------- ----- ------- -------------- --------
(000s omitted)
<S> <C> <C> <C> <C> <C>
1989 $718,554 69.0% 28.1% 2.5% 99.6%
1990 687,976 69.5 28.7 2.9 101.1
1991 701,386 67.4 30.2 2.4 100.0
1992 560,205 71.7 27.3 2.4 101.4
1993 617,404 70.4 26.8 2.0 99.2
<CAPTION>
Calendar Year Loss Reserve Analysis
- -----------------------------------
An analysis of the Company's calendar year loss and loss adjustment
expense reserves (net of reinsurance and excluding Guaranty National Companies
for all years) is presented below:
Year Ended December 31,
------------------------------------
1993 1992 1991
-------- -------- --------
(000s omitted)
<S> <C> <C> <C>
Beginning of year .................. $746,298 $668,467 $595,455
-------- -------- --------
Provision:
Current year ..................... 434,840 397,551 360,223
Prior years ...................... 24,292 26,481 61,645
-------- -------- --------
459,132 424,032 421,868
-------- -------- --------
Payments:
Current year ..................... 125,042 105,883 87,392
Prior years ...................... 249,583 240,318 261,464
-------- -------- --------
374,625 346,201 348,856
-------- -------- --------
End of year ........................ $830,805 $746,298 $668,467
======== ======== ========
-16-
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Cumulative reserve development for the Company's wholly-owned insurance subsidiaries (excluding Guaranty National Companies
for all years) as of December 31, 1993 for the calendar years 1983 through 1993 is shown in the table that follows:
Year Ended December 31, 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
- ----------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
(000s omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net liability for unpaid
loss and loss adjustment
expenses ............... $276,831 $284,480 $294,427 $359,623 $401,677 $520,304 $602,519 $595,455 $668,467 $ 746,298 $ 830,805
Paid (cumulative) as of:
One year later ......... 135,148 197,895 226,776 211,102 178,100 236,657 281,224 261,464 240,318 249,583 -
Two years later......... 220,681 317,705 364,206 320,000 318,883 403,147 438,250 408,624 378,524 - -
Three years later ...... 272,506 396,482 436,665 409,019 414,616 488,397 526,235 493,218 - - -
Four years later ....... 312,994 424,881 493,399 468,971 457,182 544,449 581,880 - - - -
Five years later ....... 326,822 467,781 534,321 494,838 490,973 582,527 - - - - -
Six years later ........ 359,498 494,273 550,743 518,397 515,478 - - - - - -
Seven years later ...... 375,687 514,382 571,652 537,567 - - - - - - -
Eight years later ...... 394,141 531,036 588,050 - - - - - - - -
Nine years later ....... 407,506 547,286 - - - - - - - - -
Ten years later ........ 422,812 - - - - - - - - - -
Net liability reestimated
as of:
One year later ......... 275,716 354,216 416,208 434,056 469,137 573,632 647,585 657,100 694,948 770,590 -
Two years later ........ 313,134 432,944 478,093 486,631 504,814 624,337 695,154 685,692 714,953 - -
Three years later ...... 350,698 471,155 527,200 517,476 548,883 658,024 722,626 705,516 - - -
Four years later ....... 361,138 500,835 574,073 557,124 568,114 687,818 741,789 - - - -
Five years later ....... 379,156 533,435 605,513 577,977 597,103 705,475 - - - - -
Six years later ........ 411,583 555,123 623,291 604,056 610,086 - - - - - -
Seven years later ...... 425,702 575,438 645,114 611,108 - - - - - - -
Eight years later ...... 445,550 590,215 652,011 - - - - - - - -
Nine years later ....... 457,758 602,085 - - - - - - - - -
Ten years later ........ 468,737 - - - - - - - - - -
Net deficiency ........... (191,906)(317,605)(357,584)(251,485)(208,409)(185,171)(139,270)(110,061) (46,486) (24,292) -
<PAGE>
Gross liability .......... $1,081,396 $1,140,403
Reinsurance recoverable .. 335,098 309,598
---------- ----------
Net liability ............ $ 746,298 $ 830,805
========== ==========
Gross re-estimated
liability .............. $1,085,578
Re-estimated recoverable.. 314,988
----------
Net re-estimated liability $ 770,590
==========
Gross deficiency ......... $ (4,182)
==========
-17-
</TABLE>
<PAGE>
<PAGE>
The preceding loss reserve development table indicates the aggregate
year-end liability for loss and loss adjustment expenses net of reinsurance,
the cumulative amounts paid attributable to those reserves through December
31, 1993, the re-estimate of the aggregate liability as of December 31 of each
subsequent year and the cumulative development of prior years' reserves.
Information is also provided on a gross basis for 1992 and 1993. Consistent
with industry practice, certain claims for long-term disability workers
compensation benefits are carried at discounted values. At December 31, 1993
and 1992, approximately $73,215,000 and $68,882,000, respectively, of long-
term disability workers compensation loss reserves are included in the
consolidated financial statements at net present value using a statutory
interest rate of 3.5%.
The Company's IBNR loss and loss adjustment expense reserves and other
reserves for losses and loss adjustment expenses for which claim files have
not been established, net of reinsurance and exclusive of Guaranty National
Companies, were $336,446,000, $298,653,000 and $271,959,000 as of December 31,
1993, 1992 and 1991, respectively.
The following table presents the differences between loss and loss
adjustment expense reserves reported in the consolidated financial statements
in accordance with generally accepted accounting principles ("GAAP"), and
those reported in the consolidated annual statement filed with state insurance
departments in accordance with statutory accounting practices ("SAP"):
<TABLE>
<CAPTION>
December 31,
----------------------
1993 1992
---- ----
(000s omitted)
<S> <C> <C>
Liability on SAP basis ...................... $ 850,418 $ 754,452
Estimated salvage and subrogation
recoveries recorded on a cash basis for
SAP and on an accrual basis for GAAP .... (15,164) (14,019)
GAAP Reinsurance payable included in SAP
liability in 1993 ....................... (11,244) -
Foreign subsidiary reserves ............... 6,795 5,865
---------- ----------
Liability on GAAP basis, net of reinsurance.. 830,805 746,298
Reinsurance on GAAP reserves ................ 309,598 335,098
---------- ----------
Liability on GAAP basis ..................... $1,140,403 $1,081,396
========== ==========
</TABLE>
During 1993, the Company strengthened loss reserves and experienced
development for prior years' business based upon the Company's ongoing
actuarial analysis utilizing the most current information available. The 1993
provision for prior accident year losses by major line of business is as
follows:
-18-
<PAGE>
(000s omitted)
Reinsurance, pools and associations ....... $ 7,719
Other liability ........................... 5,364
Automobile liability ...................... 5,314
Surety .................................... 3,017
Commercial multiple peril ................. 1,869
Other...................................... 1,009
-------
$24,292
=======
Adverse development relating to reinsurance, pools and associations
includes the Company's assumed reinsurance business, in which loss and loss
adjustment expense experience is indicative of the ceding companies'
experience. The Company's voluntary participation in various pools and
associations business is generally recorded as the information is reported to
the Company. Adverse development relating to other liability includes the
Company's professional liability program for architects and engineers and
losses from the Company's discontinued general liability line of business.
The development from automobile liability relates to the Company's truck and
Florida non-standard automobile programs where reported losses in 1993
developed greater than anticipated. Losses in the surety line of business
principally relates to a program that was discontinued in 1993. The majority
of the adverse development for the other lines of business relate to
strengthening reserves based on historical loss development patterns. In
prior years, the commercial multiple peril line was responsible for a greater
amount of the adverse development. Starting in 1983, the Company expanded its
commercial multiple peril business and then withdrew from that line of
business in 1988 due to greater than expected losses. In 1993, the commercial
multiple peril line had significantly less development due to stronger
reserving. The significantly decreased level of adverse development during
1992 and 1993 is consistent with the Company's expectations.
Loss reserve estimates are based on forecasts of the ultimate settlement
of claims and are subject to uncertainty with respect to future events. Loss
reserve amounts are based on management's informed estimates and judgments,
using data currently available. Reserve amounts and the underlying actuarial
factors and assumptions are regularly analyzed and adjusted to reflect new
information. The Company has experienced substantial development of losses
from prior accident years, particularly accident years 1984 and 1985 which
were the worst years in recent history for the Company and for the
property/casualty insurance industry in general. The Company's adverse
development primarily resulted from the terminated lines of business, pools
and other programs, higher than anticipated inflationary pressures, unforeseen
judicial decisions (including interpretations of policy coverages beyond what
was originally anticipated) and other external factors exposing the Company to
risks not known when the insurance policies were priced and issued.
To reduce loss development, the Company realigned certain management
responsibilities in its Regional Operations segment over the past several
years, thereby streamlining operations. Key management positions were added
in that segment to further strengthen loss control and prevention, and to
focus more attention towards back-to-work programs for injured workers. These
-19-
<PAGE>
factors tend to reduce loss costs and adverse development. For the design
professionals liability line of business, the Company has increasingly used
alternative dispute resolution techniques which includes the extensive use of
mediation procedures to settle claims. These procedures often result in
reduced litigation and other claim related expenses. The commercial multiple
peril business that is being run off has a specifically designated group of
claim personnel assigned who have been aggressively settling claims, resulting
in an acceleration of payment patterns in more recent years.
Estimates for IBNR claim reserves are based on actuarial analysis of
historical loss experience and current trends. Although the reserve is deemed
adequate to cover all probable claims, there is a reasonable possibility that
the adverse development from prior accident years could continue into the
future. Variability in claim emergence and settlement patterns, and other
trends in loss experience, can result in future development patterns
different than expected. The Company believes that the adverse development
experienced in recent years relates to the timing of recurring claims
activities that are inherent to the estimation of property/casualty reserves.
Future variability cannot be accurately factored into the reserve estimations.
In recent years, to limit future adverse loss development, the Company has
reserved at higher initial levels as can be seen in the table on page 16,
where initial accident year reserving percentages for the applicable calendar
years have increased from 67.5%, 67.4% and 67.7% in 1989, 1990 and 1991,
respectively, to 71.0% in 1992 and 70.4% in 1993.
Management believes that the reserve strengthening and the higher level
of initial reserving, together with increased stabilization in the Company's
business, are expected to limit adverse loss development in the future.
The Company analyzes loss reserves for its major lines of business on a
regular basis. Several methods are used, including paid and incurred loss
development, and incurred claim counts and average claim costs. These methods
are subject to variability in reserve estimation for various reasons,
including improved claims department operating procedures and accelerated
claims settlement due to the use of alternate dispute resolution and expedited
resolution of civil suits in litigation. Additionally, other factors that are
analyzed and are considered in the determination of loss reserves include (i)
claim emergence and settlement patterns and changes in these patterns from
year to year,(ii) trends in the frequency and severity of paid and incurred
losses, (iii) changes in policy limits and changes in reinsurance coverages,
(iv) changes in the mix and classes of business, and (v) changes in claims
handling procedures as determined by discussions with claims and operating
staff and through claim audits.
Current operations are greater focused on underwriting selection where
the Company has specialized knowledge and can provide enhanced service to its
customers. This concentration, and the specialized knowledge and growing
experience in its selected lines of business arising from such concentration,
have enabled the Company to implement improvements in its claims
administration and underwriting procedures which have enhanced the Company's
ability to analyze data and project reserve trends.
-20-
<PAGE>
Investments
- ------------
The Company derives a significant part of its income from its
investments. Investments of the Company's insurance subsidiaries are made in
compliance with applicable insurance laws and regulations of the respective
states in which such companies are domiciled and other jurisdictions in which
they conduct business. Neither Orion nor any of its non-insurance
subsidiaries is constrained by investment restrictions set forth in state
insurance laws.
The Company maintains a diversified portfolio representing a broad
spectrum of industries and types of securities. The Company has no significant
investments in real estate, although it does own the DPIC Companies' home
office building and has invested in several real estate limited partnerships
valued at $11,891,000. Investments are managed to achieve superior total
return, while maintaining a proper balance of safety, liquidity, maturity and
marketability. Investments are made based on long-term economic value rather
than short-term market conditions. Except for investments in Guaranty
National and securities of the United States Government and its agencies, the
Company did not have any other investments in any one issuer that exceeded
$20,000,000.
During 1993 and 1992 the Company has continued in the process of
changing the composition of its investment portfolio toward more tax-
advantaged securities. Historically, as a result of the Company's net
operating tax loss carryforwards ("NOLs"), the Company invested primarily in
fully taxable securities, since the income of such securities could be offset
by the NOLs. Such fully taxable securities, in general, pay a higher pre-tax
rate of return than tax advantaged securities. With the change in the
Company's tax position, resulting from the full utilization of all of its NOLs
for federal income tax purposes, and with the increased liquidity from the
sale of Guaranty National shares, management began in 1991 a shift in the
composition of the Company's investment portfolio toward the purchase of a
greater percentage of tax-advantaged securities.
The following table shows the composition of the investment
portfolio of the Company as of December 31, 1993 and 1992, and the quality
ratings for the Company's fixed maturity investments. The investments shown
below are listed at their cost, market value and financial statement values
(carrying or book values). Fixed maturity investments that the Company has
both the positive intent and the ability to hold to maturity are recorded at
amortized cost. Fixed maturity investments which may be sold in response to,
among other things, changes in interest rates, prepayment risk, income tax
strategies, or liquidity needs are recorded at market value, and changes in
unrealized appreciation are reflected in stockholders' equity. Equity
securities are stated at market value. Both the fixed maturities and equity
investments consist primarily of readily marketable securities.
- 21 -
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
December 31, 1993 Cost Market Value Carrying Value
- ----------------- ------------------ ------------------ ------------------
(000s omitted - except for percentages)
<S> <C> <C> <C> <C> <C> <C>
Fixed Maturities:
AAA ............. $ 408,254 32.4% $ 427,448 31.9% $ 417,147 31.5%
AA .............. 191,858 15.2 207,461 15.5 202,614 15.3
A ............... 101,172 8.0 105,456 7.9 103,772 7.9
BBB ............. 107,958 8.6 112,814 8.4 111,552 8.4
BB .............. 31,728 2.5 31,972 2.4 32,319 2.4
B and Below ..... 20,371 1.6 22,118 1.6 22,118 1.7
Not Rated ....... 40,777 3.3 43,216 3.2 43,216 3.3
---------- ----- ---------- ----- ---------- -----
Sub-total ..... 902,118 71.6 950,485 70.9 932,738 70.5
Equity Securities.. 210,311 16.7 242,643 18.1 242,643 18.4
Other Long Term
Investments ..... 50,682 4.0 50,682 3.8 50,682 3.8
Short Term
Investments ..... 96,473 7.7 96,473 7.2 96,473 7.3
---------- ----- ---------- ----- ---------- -----
$1,259,584 100.0% $1,340,283 100.0% $1,322,536 100.0%
========== ===== ========== ===== ========== =====
December 31, 1992
- -----------------
Fixed Maturities:
AAA ............. $ 363,894 32.0% $ 379,283 32.1% $ 362,851 31.4%
AA .............. 178,177 15.6 183,556 15.5 178,289 15.4
A ............... 97,679 8.6 102,223 8.6 99,874 8.6
BBB ............. 96,670 8.5 98,223 8.3 96,856 8.4
BB .............. 28,474 2.5 28,127 2.4 28,341 2.4
B and Below ..... 26,156 2.3 26,684 2.3 26,328 2.3
Not Rated ....... 34,487 3.0 34,252 2.9 34,487 3.0
---------- ----- ---------- ----- ---------- -----
Sub-total ..... 825,537 72.5 852,348 72.1 827,026 71.5
Equity Securities.. 169,836 14.9 185,700 15.7 185,700 16.1
Other Long Term
Investments ..... 36,419 3.2 36,419 3.1 36,419 3.1
Short Term
Investments ..... 107,470 9.4 107,470 9.1 107,470 9.3
---------- ----- ---------- ----- ---------- -----
$1,139,262 100.0% $1,181,937 100.0% $1,156,615 100.0%
========== ===== ========== ===== ========== =====
<CAPTION>
Year Ended December 31,
-----------------------
1993 1992
---- ----
<S> <C> <C>
Pre-tax investment
yield on average
investments ..... 7.4% 7.4%
=== ===
-22-
</TABLE>
<PAGE>
Effective December 31, 1993, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," which establishes the "available-
for-sale" category of investment securities and requires such securities to be
recorded at market value, with unrealized gains and losses reported in a
separate component of stockholders' equity. As a result of the adoption of
this standard, the Company increased its investments recorded at market value
on December 31, 1993 by $452,102,000, and its unrealized appreciation on
investments, a component of stockholders' equity, by $20,720,000, net of
deferred income taxes.
The Company strives to enhance the average return of its portfolio
by investing a small percentage of it in a diversified group of non-investment
grade fixed maturity securities, or securities that are not rated. The risk
of loss due to default is generally considered greater for non-investment
grade securities than for investment grade securities because the former,
among other things, are typically unsecured, often subordinated to other debts
of the issuer and are often issued by highly leveraged companies. In the non-
investment grade segment of the investment portfolio, the Company maintains a
high degree of diversity, with an average investment per issuer of
approximately $1,935,000 at December 31, 1993. Only four high yield
investments, aggregating $23,422,000, were in excess of $5,000,000 as of
December 31, 1993.
The Company closely monitors the financial stability of issuers of
securities that it owns. When conditions are deemed appropriate, the Company
ceases to accrete discount, or accrue interest and dividends. In cases where
the value of investments are deemed to be other than temporarily impaired, the
Company recognizes losses. During 1993, provisions for such losses were
$6,310,000 for equity securities and $2,147,000 for fixed maturity
investments. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Net Investment Income and Realized Investment
Gains."
Reinsurance
- ------------
In the ordinary course of business, the Company's insurance
subsidiaries enter into reinsurance contracts with other insurers which serve
to limit such insurer's maximum loss from catastrophes, large risks or
unusually hazardous risks. Ceding reinsurance reduces an insurer's operating
leverage ratio.
A large portion of the Company's reinsurance protection is provided
by reinsurance contracts known as treaties. In other instances, reinsurance
is obtained by negotiation for individual risks, or facultative reinsurance.
The Company's insurance subsidiaries have certain excess-of-loss and
catastrophe treaties with unaffiliated insurers or reinsurers which provide
protection against a specified part or all of certain types of losses over
stipulated dollar amounts arising from one or more occurrences. The amount of
each risk retained by an insurer is subject to maximum limits which vary by
-23-
<PAGE>
line of business and type of coverage. Retention limits are periodically
revised as the capacity of the Company's insurance subsidiaries to retain risk
varies and as reinsurance prices change. The Company is very selective as to
its reinsurers, placing reinsurance with only those reinsurers considered to
be in sound financial condition and having satisfactory underwriting ability.
Many of the Company's reinsurance agreements are subject to annual renewal as
to coverage, limits and price. The Company continually monitors the financial
strength of its reinsurers. The Company's insurance subsidiaries, to their
knowledge, have no material exposure to potential unrecognized losses due to
reinsurers that are in known financial difficulties.
The Company's insurance subsidiaries have reinsurance protection for
workers compensation losses in excess of $1,500,000 up to $100,000,000. DPIC
Companies have reinsurance for a portion of losses from architect and engineer
liability in excess of $250,000 up to $5,000,000, the maximum policy limit
written by the DPIC Companies. In 1990 certain of the Company's insurance
subsidiaries entered into an aggregate excess-of-loss reinsurance contract for
workers compensation and architect and engineer professional liability lines
of business which provides excess coverage and limits future loss development.
That reinsurance protection provides various layers of coverage up to a
maximum aggregate limit of liability of $48,000,000. Certain commercial auto
and general liability policies are reinsured by a 35% quota share with excess
of loss protection from $500,000 to $1,000,000. The Company's reinsurance
subsidiary maintains various reinsurance arrangements for its facultative and
treaty exposures, including catastrophe protection above the $1,000,000 level.
In addition to the foregoing, the Company's insurance subsidiaries also
maintain other reinsurance arrangements in support of their specific business
needs. In 1993 and 1992, the Company's insurance subsidiaries net premiums
written to year-end statutory surplus were at the conservative levels of 1.4:1
and 1.5:1, respectively.
Government Regulation
- ----------------------
The Company's insurance subsidiaries are subject to regulation
primarily by the insurance departments of the states of their incorporation,
Connecticut and California. All insurance companies must file annual
statements and other reports with state regulatory agencies and are subject to
regular and special examinations by those agencies. A regular periodic
examination of the Company's California and Connecticut pooled insurance
subsidiaries, covering their operations and statutory financial statements
through December 31, 1991, was satisfactorily completed in 1993 by the
Insurance Departments of California and Connecticut.
Each of the Company's insurance subsidiaries is also subject to
regulation by other jurisdictions in which it sells insurance, including
certain Canadian provinces. States regulate the insurance business through
supervisory agencies which have broad administrative powers, including powers
relating to, among other things, the standards of solvency which must be met
and maintained; the licensing of insurers and their agents; restrictions on
the amount of risk which may be insured under a single policy; the approval of
premium rates; the form and content of the insurance policy and sales
literature; the form and content of financial statements; reserve
-24-
<PAGE>
requirements; and the nature of and limitations on permitted investments. In
general, such regulation is for the protection of policyholders rather than
shareholders.
In some instances, particularly in connection with workers
compensation insurance, various states routinely require deposits of assets
for the protection of policyholders and their employee claimants in those
states. As of December 31, 1993 and 1992, securities representing
approximately 21% and 29%, respectively, of the book value of the Company's
investment portfolio were on deposit with various state treasurers or
custodians. Such deposits consist of securities of types which comply with
the standards that each state has established.
The Company is also subject to state laws regulating insurance
holding company systems. Most states have enacted legislation and adopted
administrative regulations affecting insurance holding companies and the
acquisition of control of insur-ance companies, as well as transactions
between insurance companies and their affiliates. The nature and extent of
such legislation and regulations currently in effect vary from state to state.
However, most states currently require administrative approval of the
acquisition of 10% or more of the outstanding shares of an insurance company
incorporated in the state or the acquisition of 10% or more of an insurance
holding company whose insurance subsidiary is incorporated in the state. The
acquisition of 10% of such shares (which would include securities convertible
into voting securities) is deemed to be the acquisition of "control" for the
purpose of most holding company statutes and requires not only the filing of
detailed information concerning the acquiring parties and the plan of
acquisition but also administrative approval prior to the acquisition.
Material transactions between insurance companies and affiliated members of
the holding company system are generally required to be "fair and reasonable"
and in some cases are subject to administrative approval.
All state jurisdictions in which the Company is authorized to
transact business require participation in guaranty funds. Insurers
authorized to transact business in those jurisdictions can be assessed by a
state guaranty fund a percentage (usually from 1% to 2%) of direct premiums
written in that jurisdiction each year to pay claims on behalf of insolvent
insurers. The likelihood and amount of any future assessment cannot be
estimated until after an insolvency has occurred. For the years ended
December 31, 1993 and 1992 the Company's insurance subsidiaries were assessed
approximately $407,000 and $54,000, respectively (net of estimated future
recoveries) as a result of known insolvencies. Insurance companies are
required by certain states in which they do business to participate in
automobile insurance plans and workers compensation plans. These plans
provide insurance on risks which are not written in the voluntary market.
Participation in these plans has usually been unprofitable for the Company.
A number of state legislatures and the United States Congress have
for years been considering, or have now enacted, some type of legislative
proposals which alter the rules for tort claims and increase the states'
authority to regulate insurance companies. These initiatives have expanded,
in some instances, the states' regulation over rates (See "Rates" below) and
-25-
<PAGE>
also have increased data reporting requirements. In recent years the state
insurance regulatory framework has come under federal scrutiny, and certain
state legislatures have considered or enacted laws that alter, and in many
cases increase, state authority to regulate insurance companies and insurance
holding company systems. Further, the National Association of Insurance
Commissioners ("NAIC") and state regulators are re-examining existing laws and
regulations and issues relating to the solvency of insurers. The NAIC has
decided to adopt risk based capital ("RBC") requirements for property and
casualty insurers to test the solvency of an insurer to write specific lines
of insurance. Applying the current RBC requirements to the Company's
insurance operations at December 31, 1993 reveal that the capital of each of
its insurance subsidiaries exceeds the RBC requirements.
Although the federal government generally does not directly regulate
the business of insurance, federal initiatives often have an impact on the
business in a variety of ways. There are various current and proposed federal
measures which may significantly affect the Company's insurance business,
including, among other proposals, the revocation of the antitrust exemption
provided by the McCarran-Ferguson Act. The Clinton administration's proposed
reforms of the nation's health care system also might negatively affect the
Company's workers compensation and automobile liability businesses. The
economic and competitive effects of any proposals upon the Company would
depend upon the final form such legislation might take. The Company is unable
to predict what regulatory proposals may be adopted in the future, or the
effect any such proposals might have on the Company's business if adopted.
Limitations on Payments from Insurance Subsidiaries
- ----------------------------------------------------
The principal sources of cash available to Orion are dividends and
tax payments from its subsidiaries. The payment of dividends to Orion by its
insurance subsidiaries is subject to state regulation. No state restricts
dividend payments by Orion to its stockholders.
The ability of the Company's insurance subsidiaries to declare
dividends is governed primarily by the insurance laws of each subsidiary's
state of incorporation. Generally, such laws currently provide that, unless
prior approval is obtained, dividends of a property and casualty insurance
company in any consecutive 12-month period shall not exceed the greater of its
net income for the preceding calendar year or 10% of its policyholders'
surplus as of the preceding December 31, determined on a statutory accounting
basis. Dividends and distributions by the Company's insurance subsidiaries
are also subject to a requirement that statutory policyholders' surplus be
reasonable in relation to outstanding liabilities and adequate to meet the
companies' financial needs following the declaration of any dividends or
distributions. State insurance regulators have, however, broad discretionary
authority with respect to approving the payment of dividends by insurance
companies. As part of the process of accreditation by the NAIC, state
insurance regulators have been recommending the adoption of new state
statutory standards for the payment of dividends by insurance companies
without prior approval. Some states have implemented more restrictive
dividend standards. Under current regulations, the maximum dividends
permitted at December 31, 1993 for the ensuing twelve months, without prior
-26-
<PAGE>
approval, aggregated $37,373,000. Since it is difficult to predict future
levels of statutory policyholders' surplus or earnings, the amount of
dividends that could be paid in the future without prior approval cannot be
determined at this time.
All business written and expenses incurred by most of the Company's
insurance subsidiaries are combined, and allocated back to each insurance
company in accordance with a reinsurance pooling agreement among them.
Effective December 31, 1992, the Company changed the pooling percentages among
its insurance subsidiaries to 85% and 15% between the Connecticut and
California insurance companies, respectively. Previously, the pooling
percentages had been 50% for each group of companies. As a result of the
change in pooling, on January 4, 1993 a directly owned California-domiciled
subsidiary paid Orion an extraordinary dividend totalling $65,470,000, after
receiving approval from the California Department. The proceeds from this
dividend were simultaneously contributed by Orion to a directly owned
Connecticut-domiciled subsidiary.
Rates
- -----
All of the Company's insurance subsidiaries are subject to
regulation as to rates, availability and cancellation of insurance. Most
states have insurance laws requiring that rate schedules and other information
be filed with or made available to the state's regulatory authority, either
directly or through a rating organization with which the insurer is
affiliated. The regulatory authority may, in most states, disapprove a rate
filing if it finds that the rates are inadequate, excessive or unfairly
discriminatory. Rates, which are not necessarily uniform for all insurers,
vary by class of business, hazard assumed and size of risk. Subject to
regulatory requirements, the Company's management determines the prices
charged for its policies based on a variety of factors including recent
historical claims experience, inflation, competition, tax law and rate changes
and anticipated changes in the legal environment, both judicial and
legislative. Subject to the possible adoption of legislation which would
require rate rollbacks in the Company's major lines of business, the Company's
management believes that its rate outlook for its principal lines of business
will remain stable during 1994.
Some states have adopted open rating systems for workers
compensation which permit insurers to set premium rates independently without
the prior approval of the insurance commissioners. A number of other states
permit insurers to deviate from standard rates for workers compensation
insurance after receiving prior approval. In insuring professional liability
risks the DPIC Companies are generally not limited to the standard rates of a
rating organization, but set their own rates because of the unique nature of
the risk being underwritten.
In November 1988, California voters passed an initiative known as
Proposition 103 (the "California Proposition") which amended the California
Insurance Code to provide, among other things, that rates for automobile and
many other insurance policies issued or renewed on or after November 8, 1988,
be rolled back to the levels of November 8, 1987 and then reduced by 20%.
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<PAGE>
Workers compensation insurance and reinsurance are excluded from the
California Proposition's rate rollback provisions.
On January 8, 1991, the California Insurance Department issued rate
regulation proposals regarding the California Proposition. On October 16,
1991, the California Insurance Commissioner issued notices of premium refunds
to 14 insurers. In February 1993, the California State Court invalidated the
regulations with respect to one insurance company that received notice of a
premium refund. The decision is currently on appeal to the California Supreme
Court. None of the Company's insurance subsidiaries were among the companies
that received the refund notices.
Although it is not possible to predict with any degree of certainty
the ultimate outcome of such regulations or their impact on the Company's
rates charged since November 8, 1988, management currently believes the effect
of the regulations will not be material to the Company. Based on the
foregoing and management's belief that the rates filed by the Company comply
with applicable California law, no provision has been made in the Company's
consolidated financial statements for denial or partial denial of the
Company's rollback exemption applications or the partial or total disapproval
of the Company's rates filed since November 8, 1989.
In recent years, certain social, economic and political issues have
led to an increased number of legislative and regulatory proposals and
judicial decisions aimed at addressing the cost, benefits and availability of
certain types of insurance. Initiatives attempting to freeze or roll back
premium rates, similar to the California Proposition have been introduced in
other states, as well as proposals to redefine or expand risk exposure, such
as by increasing the amount and types of workers compensation benefits and by
the expansion of the liability for employee illness caused by cumulative
trauma, stress or previously unknown causes. While most of the new
legislative proposals have failed to date to become law, the Company believes
that these initiatives will continue. It is impossible to predict whether any
such proposals will be adopted. However, depending on the circumstances, the
Company may be able to mitigate the longer term effects on profitability
through discontinuance of the affected business and redeployment into more
attractive markets.
Competition
- ------------
The insurance industry is highly competitive. Of the nearly 3,900
property and casualty insurance companies in the United States, about 900
companies write most of the business but no single company or group has more
than 10% of the market. The Company's insurance subsidiaries are in
competition with numerous stock and mutual property and casualty insurance
companies, as well as state run workers compensation insurance funds, many of
which are substantially larger and have significantly greater resources than
the Company. Competition may take the form of lower premiums, specialized
products, more complete and complex product lines, greater pricing
flexibility, superior service, different marketing methods or higher
-28-
<PAGE>
policyholder dividend rates. Superior service and marketing methods are of
particular importance in workers compensation. Competition might also come
from service organizations which administer self-insured programs.
The Company's insurance subsidiaries sell their insurance
principally through independent agents, brokers and general agencies, who
typically also represent one or more competing insurance companies. They are
paid commissions based on premiums collected from insureds. Commission rates
vary according to the type and amount of insurance sold. Some competitors in
certain lines obtain their business at a lower direct cost through the use of
salaried personnel rather than independent agents and brokers.
Rating
- ------
A.M. Best Company raised the Company's rating in September, 1993 to
an "A (Excellent)" from a "A- (Excellent)." In general, A.M. Best Company's
ratings are based on an analysis of the financial condition and operation of
an insurance company as they relate to the industry. These ratings are not
primarily designed for investors and do not constitute recommendations to buy,
sell or hold any security. A.M. Best Company has upgraded the ratings of the
Company three times in the last four years.
-29-
<PAGE>
MISCELLANEOUS OPERATIONS
The Company's fourth business segment consists primarily of the
miscellaneous income and expense (principally interest and general and
administrative expenses) of Orion itself. For financial reporting purposes,
the Company applies federal income taxes and benefits, as if fully utilizable,
to its segments. Any consolidating elimination entries are accounted for in
this fourth segment.
In late 1984 the Company purchased 26.3% of the common stock of
Sentry Savings and Loan Association ("Sentry"), located in Stamford,
Connecticut. Sentry operated as an independent entity and a pro rata share of
any profit or loss was reflected in the Company's consolidated financial
statements, based on the Company's equity interest in Sentry. On November 22,
1993, after obtaining all necessary state and federal regulatory approvals,
Sentry's assets were acquired by the Frank and Joanne Warren Connecticut Stock
Revocable Trust (the "Trust"). As a result of consummation of the sale of the
assets of Sentry to the Trust, the Company is no longer a unitary savings and
loan holding company under federal law and has been released from all
obligations and restrictions under those laws.
ITEM 2. PROPERTIES
The Company's executive office is located at 30 Rockefeller Plaza,
New York, New York and the home office of the insurance operations of the
Company is located in Farmington, Connecticut. These office facilities
consist of approximately 150,000 square feet, in the aggregate, and are leased
at a total annual rental of $4,650,000.
The DPIC Companies owns its office building in Monterey, California.
The DPIC Companies occupy 39,900 square feet of the building and lease to
others the remaining 12,200 square feet. The DPIC Companies purchased the
building on January 26, 1990 for aproximately $11,950,000. In November 1990
the DPIC Companies mortgaged the leasehold interest in its office building to
other subsidiaries of the Company and to Guaranty National Insurance Company
for an aggregate of $9,000,000.
The other insurance operations of the Company are conducted from
leased premises in or adjacent to major urban centers throughout the United
States and in Canada. These operations, in the aggregate, occupy
approximately 303,000 square feet, excluding the home office building in
Connecticut, at an annual rental of approximately $4,483,000.
The Company believes that its current facilities are suitable and
adequate for its present use and its presently
anticipated requirements.
-30-
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
The Company is routinely engaged in litigation incidental to its
businesses; however, in the judgment of the Company's management, there are no
significant legal proceedings pending against Orion or its wholly-owned
subsidiaries which, net of reserves established therefor and giving effect to
reinsurance, are likely to result in judgments for amounts that are material
to the financial condition of Orion and its consolidated subsidiaries, taken
as a whole.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
INFORMATION CONCERNING EXECUTIVE OFFICERS OF THE COMPANY
The following is a summary of certain information regarding the
executive officers of Orion. All officers of Orion and its subsidiaries serve
at the pleasure of their respective Boards of Directors.
Alan R. Gruber, Chairman of the Board and Chief Executive Officer of
Orion since March 1976; Chairman of Orion Capital Companies, Inc. ("OC
Companies"), which provides management services to the Orion Capital
Companies, since October 1982; age 66.
Robert B. Sanborn, Vice Chairman of Orion since March 1, 1994, and a
Director since May 1987; President and Chief Operating Officer of Orion from
May 1987 to February 28, 1994; Chairman of the American Insurance Association,
a property and casualty insurance company trade group, from January 1993 to
January 1994; President of OC Companies from May 1987 to February 28, 1994;
age 65.
Larry D. Hollen, President and Chief Operating Officer of Orion
since March 1, 1994; Executive Vice President and Assistant Chief Operating
Officer of Orion from December 1, 1992 to February 28, 1994; Senior Vice
President of Orion from March 1990 to December 1992; a director of Orion since
March 20, 1992; Vice President of Orion from 1988 to March 1990; President of
the EBI Companies from January 1990 to May 31, 1993; President of the Eastern
Division of the EBI Companies from July 1988 to December 1989; age 48.
Peter B. Hawes, Senior Vice President and a Director of Orion since
March 1988; President of the DPIC Companies since 1982; Senior Vice President
of OC Companies since March 1987; age 58.
Daniel L. Barry, Vice President and Controller of Orion since
October 1987; Senior Vice President of OC Companies since January 1989;
Controller of OC Companies since October 1986; Treasurer of OC Companies from
October 1987 to December 1990; age 43.
Raymond W. Jacobsen, Vice President of Orion since March 1990;
President of the EBI Companies since June 1, 1993; Executive Vice President of
the EBI Companies from December 1989 to May 31, 1993; Regional Vice President
of the EBI Companies from July 1988 to December 1989; age 41.
-31-
<PAGE>
Michael P. Maloney, Vice President, General Counsel and Secretary of
Orion since August 1979; Senior Vice President of OC Companies since March
1987; age 49.
William G. McGovern, Vice President and Chief Actuary of Orion since
March 1990; Senior Vice President and Chief Actuary of OC Companies since
October 1989; Manager in the Management Consulting Department of Peat Marwick
Main & Co. from January 1988 to October 1989; age 41.
Vincent T. Papa, Vice President and Treasurer of Orion since June
1985; Senior Vice President of OC Companies since March 1987 and Treasurer
since December 1990; age 47.
Raymond J. Schuyler, Vice President-Investments of Orion since June
1984; Senior Vice President of OC Companies since March 1986; age 58.
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<PAGE>
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(a) Principal Market. The principal market on which Orion's Common
Stock is traded is the New York Stock Exchange.
(b) Stock Price and Dividend Information
The table below presents the high and low market prices and dividend
information for Orion's Common Stock for 1993 and 1992, adjusted to reflect
the effect of the 5-for-4 stock splits paid on both December 7, 1992 and
November 15, 1993.
Cash
Stock Prices Dividends
High Low Declared
---- --- ---------
1993:
Quarter Ended December 31........ $36.30 $28.625 $.18
Quarter Ended September 30....... 37.50 30.30 .18
Quarter Ended June 30............ 37.10 30.10 .16
Quarter Ended March 31........... 36.80 27.20 .16
----
Total........................ $.68
=====
1992:
Quarter Ended December 31........ $28.70 $23.84 $.16
Quarter Ended September 30....... 25.76 21.92 .147
Quarter Ended June 30............ 22.72 19.68 .147
Quarter Ended March 31........... 21.92 18.56 .147
-----
Total........................ $.601
=====
Cash dividends have been paid on Orion's Common stock in every
quarter since the fourth quarter of 1978, when dividends were first commenced.
(c) Approximate Number of Holders of Common Stock
The number of holders of record of Orion's Common Stock as of March
11, 1994 was 2,000.
-33-<PAGE>
<PAGE>
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
The following table summarizes information with respect to the operations and financial
condition of Orion and its subsidiaries. Common stock and per common share data have been
restated to give effect to the 5-for-4 stock splits paid on both November 15, 1993 and
December 7, 1992. All of the Company's $1.90 Preferred Stock, $2.125 Preferred Stock and
Adjustable Rate Preferred Stock were converted into common stock or redeemed during 1992 and
1993. In November 1991, the Company sold 6,250,000 shares of Guaranty National Corporation in
an initial public offering, reducing its level of ownership from 100% to approximately 49%.
Guaranty National's financial statements have been consolidated with those of the Company
through November 20, 1991. For the periods subsequent to November 20, 1991, the portion of
Guaranty National's results attributable to the Company's ownership is included on an equity
accounting basis. Information presented as of December 31, 1993, 1992 and 1991 excludes the
accounts of Guaranty National. Assets and policy liabilities for 1989 through 1992 have been
restated to reflect the adoption of SFAS No. 113, which requires reinsurance recoverables to
be reported as assets rather than offsetting liabilities. The consolidated financial
statements and related notes thereto are furnished under Item 8 of this report.
<CAPTION>
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
(000s omitted-except for per share data)
<S> <C> <C> <C> <C> <C>
For the year ended December 31:
Total revenues ................. $ 720,155 $ 647,718 $ 837,294 $ 783,879 $ 821,762
Gain on sale of common stock
of Guaranty National ......... - - 33,931 - -
After-tax investment gains
(losses) ..................... 5,888 3,113 (1,804) (7,368) 872
Earnings before cumulative
effect of change in accounting
principles and extraordinary
loss ......................... 56,988 45,792 44,668 25,461 30,346
Net earnings ................... 68,813 42,872 44,668 25,461 30,346
Earnings per common share before
cumulative effect of change in
accounting principles and
extraordinary loss ........... 3.88 3.62 3.75 1.79 2.22
Net earnings per common
share ........................ 4.69 3.35 3.75 1.79 2.22
Dividends declared -
Adjustable rate preferred
share ...................... 1.10 4.16 4.37 4.44 4.50
$1.90 preferred share ........ - 1.43 1.90 1.90 1.90
$2.125 preferred share ....... .12 2.125 2.125 2.125 2.125
Common share ................. .68 .60 .59 .58 .52
Weighted average number of
common shares and equivalents
outstanding .................. 14,598 10,914 9,964 10,091 10,171
As of December 31:
Total cash and investments ..... $1,328,969 $1,169,379 $1,087,454 $1,145,887 $1,112,278
Total assets ................... 2,117,454 1,937,408 1,827,069 1,995,729 1,786,883
Total policy liabilities ....... 1,412,285 1,326,872 1,228,951 1,443,720 1,258,420
Notes payable and debentures ... 160,372 129,863 142,311 175,290 174,979
Adjustable rate preferred stock - 18,705 19,125 19,505 22,500
Stockholders' equity ........... 394,195 311,287 249,829 191,958 203,026
Common shares outstanding ...... 14,372 13,100 9,905 9,928 10,143
Book value per common share .... $ 27.43 $ 21.48 $ 19.00 $ 13.07 $ 13.88
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</TABLE>
<PAGE>
<PAGE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Orion Capital Corporation ("Orion") and its wholly-owned subsidiaries
(collectively the "Company") operate principally in the property and casualty
insurance business which is reported as three segments - Regional Operations,
Reinsurance/Special Programs and Guaranty National Companies. Regional
Operations markets workers compensation insurance through EBI Companies and
Nation's Care, Inc. Reinsurance/Special Programs includes (i) DPIC Companies
("DPIC"), which markets the Company's professional liability insurance, (ii)
Connecticut Specialty Insurance Group ("Connecticut Specialty"), which
underwrites and sells specialty insurance programs, (iii) SecurityRe Companies
("SecurityRe"), which writes reinsurance and (iv) a 20.0% interest in
Intercargo Corporation ("Intercargo") which underwrites insurance coverages
for international trade. The third segment, Guaranty National Companies,
specializes in writing nonstandard commercial and personal automobile
insurance. The miscellaneous income and expenses (primarily interest, general
and administrative expenses and other consolidating elimination entries) of
the parent company are reported as a fourth segment.
During 1993 Orion completed the recapitalization and debt restructuring
which it began in 1992. The Company issued $110,000,000 of 9 1/8% Senior
Notes due September 1, 2002 (the "9 1/8% Senior Notes"), redeemed both its 13
1/2% Senior Subordinated Debentures and its 12 1/2% Subordinated Debentures
with face values of $19,375,000 and $20,000,000, respectively, entered into a
new bank loan agreement and called for the redemption of all of its preferred
stock. Substantially all of the outstanding shares of the $1.90 Convertible
Exchangeable Preferred Stock were converted into 2,554,594 shares of common
stock. Shares of the $2.125 Convertible Exchangeable Preferred Stock were
converted into 1,427,123 shares of common stock, and the Adjustable Rate
Preferred Stock was redeemed for $18,520,000. As a result of the refinancing,
the Company recorded a loss on the redemption of its Debentures prior to
maturity of $2,920,000, net of a tax benefit of $60,000, as an extraordinary
item in 1992. The Company's objectives in this refinancing were to reduce the
amount of the Company's debt maturing in the next five years, lower the
interest rate on its long-term debt and increase the earnings available to
common stockholders by lowering the cost of capital.
RESULTS OF OPERATIONS
Earnings (loss) by segment before federal income taxes, cumulative effect
of the adoption of new accounting principles and extraordinary item are
summarized as follows for the three years ended December 31, 1993:
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<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------
1993 1992 1991
---- ---- ----
(000s omitted)
<S> <C> <C> <C>
Regional Operations ................... $ 34,025 $ 4,227 $ (9,816)(1)
Reinsurance/Special Programs .......... 44,032 50,384 50,500 (1)
Guaranty National Corporation (2):
Pre-tax earnings .................... - - 22,477
Equity in net earnings of affiliate.. 9,509 9,994 1,207
-------- -------- --------
Total ............................. 87,566 64,605 64,368(1)
Other ................................. (15,061) (17,891) (18,299)
-------- -------- --------
$ 72,505 $ 46,714 $ 46,069(1)
======== ======== ========
<FN>
(1) Includes a gain of $33,931,000 ($14,692,000 for Regional Operations
and $19,239,000 for Reinsurance/Special Programs) from the sale of
the Guaranty National Corporation ("Guaranty National") shares and
a cumulative loss provision of $25,000,000 ($12,100,000 for Regional
Operations and $12,900,000 for Reinsurance/Special Programs), both
discussed below.
(2) Earnings for the periods subsequent to the sale of Guaranty National
common stock are proportionate to the Company's share of Guaranty
National's net earnings after federal income taxes. For the years
ended December 31, 1993, 1992 and 1991, Guaranty National's pre-tax
earnings amounted to $24,626,000, $27,332,000 and $24,784,000,
respectively.
</TABLE>
REVENUES
Premiums
Net premiums written increased 12.0% ($68,156,000) in 1993 to
$635,586,000. Net premiums written in 1992 were $567,430,000, which was a
decrease of 22.7% ($166,635,000) from the 1991 net premiums written of
$734,065,000. The decrease in 1992 results from the exclusion of net premiums
written by the Guaranty National Companies, which amounted to
$181,226,000 from January 1 to November 20, 1991. The results by segment are
as follows:
- Regional Operations' net premiums written decreased 1.7% ($4,468,000) to
$265,082,000 in 1993 from $269,550,000 in 1992 and 1.2% ($3,208,000) in
1992 from $272,758,000 in 1991. The reduction in premium volume for
1993, while operating results continue to improve, reflects this
segment's emphasis on underwriting profitability rather than premium
growth and the impact of legislative reforms in certain states which has
led to lower premium rates. Such reforms have also had the effect of
reducing loss expenses, generally leading to more profitable business.
Premiums written in 1993 and 1992 were reduced in states where the
business or regulatory environment has become less favorable and by the
closure of offices during these years in certain areas, offset by growth
in geographic areas where the Company has had favorable loss experience
stemming from its service-oriented approach.
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<PAGE>
- Reinsurance/Special Programs' net premiums written increased 24.4%
($72,624,000) to $370,504,000 in 1993 from $297,880,000 in 1992 and 6.4%
($17,799,000) in 1992 from $280,081,000 in 1991. Premium volume for
Connecticut Specialty increased 21.8% ($34,360,000) to $192,246,000 in
1993 from $157,886,000 in 1992 and increased 44.7% ($48,740,000) in 1992
from $109,146,000 in 1991. The largest increases were in the automobile
personal injury protection ($17,372,000) and physical damage
($14,010,000) programs, which programs have been growing steadily
throughout 1992 and 1993. Gross premiums written by DPIC for
professional liability insurance, the largest special program, were
$167,273,000, $161,432,000 and $184,314,000 in 1993, 1992 and 1991,
respectively. The increase for 1993 is reflective of both new business
and a continuation of a high level of policy renewals. Contributing to
the decrease in professional liability insurance premiums written in 1992
as compared to 1991 were the impact of generally weak economic
conditions in the construction industry, increased premium credits given
for favorable loss experience or an insureds participation in loss
prevention programs, and non-recurring premiums in 1991 representing a
reimbursement of losses incurred on behalf of an insured. The percentage
of treaty and facultative reinsurance assumed to total net premiums
written for Reinsurance/Special Programs amounted to 14.7%, 11.7% and
10.2% in 1993, 1992 and 1991, respectively.
Premiums earned increased 10.2% ($57,199,000) in 1993 to $617,404,000.
Premiums earned in 1992 were $560,205,000, which was a decrease of 20.1%
($141,181,000) versus the 1991 premiums earned of $701,386,000. Premiums
earned for 1993 and 1992 reflect the recognition in income of the changing
levels of net premium writings. The decrease in 1992 results from the
exclusion of net premiums earned by the Guaranty National Companies, which
amounted to $181,289,000 from January 1 to November 20, 1991.
Gain on Sale of Common Stock of Guaranty National
The Company sold 6,250,000 shares of Guaranty National's common stock in
a public offering on November 20, 1991, (the "Guaranty Sale") reducing
ownership of its common stock to 49.3%. The sale resulted in a gain of
$33,931,000, and reduced the operating leverage and strengthened the capital
positions of the Company's other insurance subsidiaries. The Guaranty
National Companies' operations have been consolidated in the Company's
financial statements through November 20, 1991. For periods subsequent to that
date, the financial statements of the Company include the portion of Guaranty
National's earnings attributable to the Company's ownership on an equity
accounting basis. The shares of Guaranty National owned by the Company at
December 31, 1993 and 1992 carried on an equity basis had book values of
$75,394,000 and $64,436,000, respectively; the market values of these shares,
based on the New York Stock Exchange closing price on those dates, were
$107,510,000 and $121,332,000, respectively.
Net Investment Income
Pre-tax net investment income amounted to $91,803,000, $82,483,000 and
$100,206,000 in 1993, 1992 and 1991, respectively. Included in net investment
income is $23,060,000 for the 1991 period attributable to the consolidation of
Guaranty National. The increase in net investment income for 1993 was
attributable to an increase in average investable assets of approximately
$132,000,000, and an increase in equity earnings from limited partnerships of
$5,708,000 compared to 1992 due to both increased investment and a higher rate
of return from these partnerships. The pre-tax yields on the average
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investment portfolio were 7.4% for both 1993 and 1992, and 8.5% for 1991,
reflecting the increase in earnings from limited partnership investments in
1993, offset by a change in the Company's mix of investments toward higher
amounts of tax-advantaged securities which generally yield less than fully
taxable securities, issuers calling their securities in order to refinance at
lower rates and generally lower yields on new investments due to current
market conditions. The decrease in net investment income for 1992 as compared
to 1991 was the result of the deconsolidation of Guaranty National and lower
pre-tax investment yields, offset by the investment of the proceeds of the
Guaranty Sale. The impact of the lower interest rates for 1992 and 1993 on
net income is offset in part by reductions in interest expense on the
Company's variable rate bank loans. The carrying value of the Company's
investment portfolio increased $165,921,000 in 1993 (including the change
attributable to a new in accounting principle discussed in the following
paragraph) to $1,322,536,000 at December 31, 1993 from $1,156,615,000 at
December 31, 1992.
The Company's investment philosophy is to achieve a superior rate of
return after taxes and maintain a high degree of safety and liquidity.
Effective December 31, 1993, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in
Debt and Equity Securities," which establishes the "available-for-sale"
category of investment securities and requires such securities to be recorded
at market value, with unrealized gains and losses reported in a separate
component of stockholders' equity. As a result of the adoption of this
standard, the Company increased its investments recorded at market value on
December 31, 1993 by $452,102,000, and its unrealized appreciation on
investments, a component of stockholders' equity, by $20,720,000, net of
deferred income taxes. Fixed maturity investments which the Company has both
the positive intent and the ability to hold to maturity are recorded at
amortized cost. Investments which may be sold in response to, among other
things, changes in interest rates, prepayment risk, income tax strategies or
liquidity needs are included in the available-for-sale category at market
value. The carrying value of fixed maturity and short-term investments
amounted to $1,029,211,000 and $934,496,000 at December 31, 1993 and 1992,
respectively, or approximately 77.8% and 80.8% of the investment portfolio.
The Company invests primarily in investment grade securities and strives
to enhance the average return of its portfolio through limited investment in a
diversified group of non-investment grade fixed maturity securities or
securities that are not rated. The risk of loss due to default is generally
considered greater for non-investment grade securities than for investment
grade securities because the former, among other things, are often
subordinated to other indebtedness of the issuer and are often issued by
highly leveraged companies. At December 31, 1993 and 1992, the Company's
investment in non-investment grade and unrated fixed maturity securities were
carried at $97,653,000 and $89,156,000 with market values of $97,306,000 and
$89,064,000, respectively. These investments represented a total of 7.2% and
7.6% of cash and investments at December 31, 1993 and 1992, respectively, and
4.6% of total assets as of both year end dates.
The Company closely monitors the financial condition of the issuers of
securities that it owns. When conditions are deemed appropriate, the Company
ceases to accrete discount, or accrue interest and dividends, and, in cases
where the value of such investments is deemed to be other than temporarily
impaired, recognizes losses. The Company's non-investment grade investments
are highly diversified, with an average investment per issuer of approximately
$1,935,000 at December 31, 1993. Only four non-investment grade investments
aggregating $23,422,000 were in excess of $5,000,000 at December 31, 1993.
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Realized Investment Gains
Net realized investment gains (losses) amounted to $9,478,000 in 1993,
$3,667,000 in 1992 and ($1,009,000) in 1991 excluding the $33,931,000 gain on
the Guaranty Sale. Sales of equity securities resulted in net gains of
$11,273,000, $5,864,000 and $4,960,000 and sales of fixed maturities resulted
in net gains of $6,662,000, $5,365,000 and $6,925,000 in 1993, 1992 and 1991,
respectively. Realized investment gains were reduced by provisions for losses
on securities deemed to be other than temporarily impaired. These provisions
amounted to $6,310,000 in 1993, $5,429,000 in 1992 and $5,124,000 in 1991 for
equity securities and $2,147,000, $2,133,000 and $7,770,000 in 1993, 1992 and
1991, respectively, for fixed maturity investments. Such provisions, based on
available information at the time, were made in consideration of the decline
in the financial condition of the issuers of these securities.
Realized gains (losses) vary from period to period, depending on market
conditions relative to the Company's investment holdings, the timing of
investment sales generating gains and losses, the occurrence of events which
give rise to other than temporary impairment of investments, and other
factors. At December 31, 1993 the Company held equity securities with
unrealized appreciation of $32,332,000, as compared to $15,864,000 for equity
securities held at December 31, 1992. The market value of the fixed
maturities portfolio at December 31, 1993 exceeded their amortized cost values
by $48,367,000. This compares with an excess of market value over amortized
cost of $26,811,000 for fixed maturities at December 31, 1992. Such amounts
can vary significantly depending upon fluctuations in the financial markets.
The average maturity of the Company's fixed maturity investments has not
varied significantly in recent years, and no material change in average
maturity is expected in the foreseeable future.
The performance of the Company's investments, including net investment
income, net realized gains (losses) and unrealized appreciation
(depreciation), and excluding the $33,931,000 gain on the sale of Guaranty
National stock in 1991, is as follows for the three most recent years:
1993 1992 1991
---- ---- ----
(000s omitted)
Net investment income ..................... $ 91,803 $ 82,483 $100,206
-------- -------- --------
Net realized gains (losses) -
Fixed maturities ........................ 4,515 3,232 (845)
Equity securities ....................... 4,963 435 (164)
-------- -------- --------
9,478 3,667 (1,009)
-------- -------- --------
Net unrealized appreciation -
Fixed maturities ........................ 21,556 11,954 71,787
Equity securities ....................... 16,468 22,584 25,515
-------- -------- --------
38,024 34,538 97,302
-------- -------- --------
$139,305 $120,688 $196,499
======== ======== ========
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EXPENSES AND OTHER
Operating Ratios
The following table sets forth certain ratios of insurance operating
expenses to premiums earned for the Company:
Year Ended December 31,
--------------------------------
1993 1992 1991
---- ---- ----
Loss and loss adjustment expenses ....... 74.4% 75.7% 76.8%
Policy acquisition and other insurance
expenses .............................. 26.8 27.3 30.2
----- ----- -----
Total before policyholders' dividends.. 101.2 103.0 107.0
Policyholders' dividends ................ 2.0 2.4 2.4
----- ----- -----
Total after policyholders' dividends .. 103.2% 105.4% 109.4%
===== ===== =====
The ratio of loss and loss adjustment expenses to premiums earned (the
"loss ratio") was 74.4%, 75.7% and 76.8% in 1993, 1992 and 1991, respectively.
The improvement in the 1993 loss ratio was attributable to a decrease in the
loss ratio for the Regional Operations segment offset by higher levels of
initial reserving in the Reinsurance/Special Programs segment. The
improvement in the 1992 loss ratio was primarily attributable to a decrease in
adverse development of prior years' losses. Lower assignments from the
National Council on Compensation Insurance ("NCCI") improved the operating
results for 1992 as compared to 1991 by $6,042,000 and had a favorable impact
on the loss ratio of .9 percentage points. The decreases in adverse
development and NCCI assignments in 1992 were offset by establishing initial
loss reserves at higher levels and by an increase of .6 percentage points from
losses stemming from Hurricanes Andrew and Iniki. The inclusion of Guaranty
National Companies' loss experience for 1991 had the effect of lowering the
loss ratio by 3.0 percentage points. The 1991 loss ratio also included a
provision (the "cumulative loss provision") of $25,000,000, or 3.6 percentage
points, recorded at year end 1991 in response to the Company's internal
actuarial analysis, and to an independent actuarial review commissioned by the
Connecticut Insurance Department in connection with a regular statutory
examination of the Company's insurance subsidiaries.
The loss ratio for Regional Operations was 72.0% in 1993, 80.1% in 1992
and 85.5% in 1991 (80.9% excluding the effect of the cumulative loss
provision). These loss ratios reflect continued improvement in workers
compensation insurance, reduced losses due to the cancellation in 1992 of
participation in a workers compensation loss sharing pool and lower losses for
runoff, principally from closed offices and discontinued commercial package
business.
Reinsurance/Special Programs' loss ratio was 76.1% in 1993, 71.7% in 1992
and 73.9% in 1991, (68.9% excluding the effect of the cumulative loss
provision). The increase for 1993 is primarily due to higher levels of
initial reserving. The segment's loss ratio for 1992 was favorably impacted
by lower assignments from assigned risk pools and increased premium volume for
programs with lower loss ratios, offset by higher levels of loss reserving for
the DPIC program.
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The ratio of deferred acquisition costs and other insurance expenses to
premiums earned (the "expense ratio") was 26.8%, 27.3% and 30.2% in 1993, 1992
and 1991, respectively. The 1993 expense ratio was favorably impacted by the
spreading of costs over a higher premium volume. The higher ratio for 1991
results from increased provisions for assessments from statutory assigned risk
plans, particularly in Texas.
Provisions for losses and loss adjustment expenses include development of
loss and loss adjustment expense reserves relating to prior accident years,
which increased the calendar year combined ratio by 3.9 percentage points in
1993, 4.7 percentage points in 1992 and 9.1 percentage points in 1991
including the impact of the cumulative loss provision. The loss ratios were
adversely affected by such factors as higher than anticipated reported losses
for automobile liability business and reserve strengthening for certain other
lines of business. Other sources of loss development included pool and
association business (including assigned risk pools) where loss reserves are
established by the Company based on information provided by the pools and
associations and loss patterns which were significantly different than in the
past.
Management believes that the Company's reserves for loss and loss
adjustment expenses make reasonable and sufficient provision for the ultimate
net cost of all losses on claims incurred. However, there can be no assurance
that changes in loss trends will not result in additional development of prior
years' reserves in the future. Variability in claim emergence and settlement
patterns and other trends in loss experience can result in future development
patterns different than expected. The Company believes that any such
development will continue to be substantially lower than that experienced in
years prior to 1992, considering the actions taken to increase reserving
levels, to improve underwriting standards and to emphasize loss control and
prevention. The Company's loss ratios in recent years, including development
of prior years' losses, have compared favorably with loss ratios experienced
by the industry.
The Company limits both current loss expense and future development of
losses by ceding business to reinsurers (See Note D to Consolidated Financial
Statements). The Company continually monitors the financial strength of its
reinsurers and, to the Company's knowledge, has no material exposure with
regard to potential unrecognized losses due to reinsurers having known
financial difficulties.
The Company's environmental claims principally relate to asbestos and
hazardous waste, arising from certain liability business written prior to the
mid 1980's, which business was never a major element of the Company's
operations. Environmental claims are also received from certain reinsurance
pools and associations where reserves are established based on information
reported to the Company by the managers of those pools and associations.
Establishing reserve liabilities for environmental claims is subject to
significant uncertainties that make reserve estimation difficult. Legal
decisions have tended to expand insurance coverage beyond the intent of the
original policies. The disposition of such claims often requires lengthy and
costly litigation. Uncertainties as to required clean-up remedies, and
difficulties in identifying the responsible parties, add further to the
complexity of reserve estimation for these claims. In recent years, the
Company has intensified its efforts to settle and close environmental claims.
To help minimize the cost of losses and claims, the Company maintains a
dedicated environmental claims staff which administers the defense and
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settlement of each claim and continually evaluates them. In 1993 and 1992,
the Company paid $5,557,000 and $4,221,000, respectively, for the costs of
defending and settling claims. Payments in 1993 and 1992 related to 216 and
117 claims, respectively, for the Company's direct business. Claim counts
have been aggregated by the Company by year of coverage for each alleged
occurrence for which policyholders are being defended, and often include
numerous claimants.
As of December 31, 1993, the Company has environmental claims-related
loss and loss adjustment expense reserves, net of reinsurance recoverables, of
$17,189,000, which include 512 claims for direct business written by the
Company. In estimating liabilities for environmental-related claims, the
Company considers all pertinent information as it becomes available.
Interest Expense
Interest expense was $13,044,000 in 1993, $12,754,000 in 1992 and
$16,131,000 in 1991. The 2.3% increase from 1992 to 1993 reflects an increase
in the average amount of debt outstanding in 1993 as compared to 1992,
including debt incurred to redeem the Company's Adjustable Rate Preferred
Stock, offset for the most part by lower average interest rates. The 20.9%
decrease from 1991 to 1992 is the result of declining average interest rates
and a reduction in the amount of debt outstanding. Interest expense for both
1993 and 1992 was impacted by the issuance of $110,000,000 of 9 1/8% Senior
Notes on September 8, 1992, and the reduction of average bank debt outstanding
and repayment of debentures (See "Liquidity and Capital Resources").
Equity in Earnings of Affiliates
The Company's portion of Guaranty National's net earnings before the
cumulative effect of adopting changes in accounting principles was $9,509,000
in 1993, $9,994,000 for 1992 and $1,207,000 for the period from November 20 to
December 31, 1991. The Company's portion of Intercargo's net loss for 1993
was $122,000. Guaranty National's full year net earnings were $19,285,000,
$20,271,000 and $17,813,000 for 1993, 1992 and 1991, respectively. Gross
premiums written for Guaranty National increased to $321,766,000 in 1993 from
$273,400,000 in 1992 and $229,139,000 in 1991. Guaranty National's combined
ratios were 99.6% in 1993, 97.7% in 1992 and 99.2% in 1991.
Earnings From Operations Before Federal Income Taxes
Operating earnings before income taxes were $72,505,000, $46,714,000 and
$46,069,000 for 1993, 1992 and 1991, respectively. The 55.2% increase in pre-
tax earnings from 1992 to 1993 reflects an improvement in insurance operations
profitability of $19,980,000 and an increase in realized investment gains of
$5,811,000. Pre-tax earnings for 1991 were increased by the gain of
$33,931,000 realized on the Guaranty Sale and decreased by the $25,000,000
cumulative loss provision. Excluding these items, the 25.8% increase in pre-
tax earnings for 1992 over 1991 is the result of an increase in insurance
operations profitability of $4,900,000 and an increase in realized investment
gains of $4,676,000.
Federal Income Taxes
Federal income taxes on pre-tax operating results and the related
effective tax rates amounted to $15,517,000 (21.4%), $922,000 (2.0%) and
$1,401,000 (3.0%) in 1993, 1992 and 1991, respectively. The Company files
consolidated federal income tax returns, which include the taxable income of
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Guaranty National from November 1, 1988 through November 20, 1991. Effective
January 1, 1993, the Company adopted SFAS No. 109, "Accounting for Income
Taxes." Upon adoption of SFAS No. 109, the Company recorded a benefit of
$16,881,000 which was principally attributable to its deferred tax benefits
that had not been recognized due to limitations under prior accounting
standards. The Company's effective tax rate for 1993 reflects the absence of
such deferred tax benefits, as well as a continuation of the Company's shift
in its investment portfolio toward more tax-advantaged securities. The tax
rate for 1993 reflects a tax benefit of $450,000 from the effect of the
increase in the federal tax rate on the Company's deferred tax asset. The
consolidated federal income tax provisions for 1991 through 1993 were computed
by the regular tax method, reduced by alternative minimum and other tax
credits in 1991 and the recognition of deferred tax benefits in 1991 and 1992
to the extent that the Company was able to utilize its NOL for financial
reporting purposes under SFAS No. 96, "Accounting for Income Taxes."
Cumulative effect of adoption of new accounting principles
Effective January 1, 1993 the Company recorded the cumulative effect of
adopting SFAS No. 109 (discussed above) and SFAS No. 106 "Employers'
Accounting for Postretirement Benefits Other than Pensions." SFAS No. 106
requires the accrual of the estimated cost of retiree benefit payments during
the years the employees provide services. Upon adoption of SFAS No. 106 the
cumulative effect of the Company's accumulated obligation for providing
medical benefits to retirees was $5,056,000, after a related tax benefit of
$2,604,000. Included in the cumulative effects of adopting these accounting
principles is the Company's portion of Guaranty National's benefit from
changes in accounting principles in 1993 of $360,000, net of $185,000 of
federal income taxes provided by the Company.
Earnings Per Common Share
Common stock and per common share data have been restated to give effect
to the 5-for-4 stock splits paid on both November 15, 1993 and December 7,
1992. Primary earnings per share amounted to $4.69 ($3.88 before the effect
of adopting new accounting principles) in 1993, $3.35 ($3.62 before
extraordinary item) in 1992 and $3.75 in 1991. Reflected in the calculation
of 1993, 1992 and 1991 earnings per common share are dividends of $409,000,
$6,358,000 and $7,276,000, respectively, on the Company's Adjustable Rate
Preferred Stock, (redeemed in 1993), $1.90 Preferred Stock (converted into
common stock or redeemed in 1992) and $2.125 Preferred Stock (converted into
common stock or redeemed in 1993). All of these conversions and redemptions
were effected pursuant to the terms of the preferred stock. The $1.90
Preferred Stock and the $2.125 Preferred Stock were assumed to be converted,
if dilutive, for the purpose of computing fully-diluted earnings per common
share. Fully-diluted earnings per share amounted to $4.67 ($3.86 before the
effect of adopting new accounting principles in 1993, $2.85 ($3.05 before
extraordinary item) in 1992 and $3.05 in 1991. Reflected in the calculation
of fully-diluted earnings per share in 1993, 1992 and 1991 are Adjustable Rate
Preferred Stock dividends of $407,000, $1,581,000 and $1,679,000,
respectively.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities increased $42,621,000 to
$123,154,000 in 1993 from $80,533,000 in 1992 and decreased $59,371,000 in
1992 from $139,904,000 in 1991. The increase in operating cash flow for 1993
is primarily due to an increase in premiums collected, particularly for
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Connecticut Specialty, and a receipt of $17,096,000 under a retrospectively
rated program written by DPIC, offset in part by an increase in paid losses.
Also, cash provided by operations in 1992 was decreased by an $18,410,000
payment for reinsurance applicable to a 1991 contract. The decrease in 1992
is attributable to the exclusion of Guaranty National's cash flow which
amounted to $17,048,000 from January 1 through November 20, 1991, as well as a
decrease in premiums collected and increases in payments for reinsurance and
federal income taxes, offset by a decrease in paid losses and loss adjustment
expenses, policy acquisition costs and interest expense.
Cash used in investment activities increased $65,162,000 to $124,415,000
in 1993 from $59,253,000 in 1992 and decreased by $46,081,000 in 1992 from
$105,334,000 in 1991. The use of investment cash is attributable to purchases
of investments which exceeded maturities and sales of investments, reflecting
positive operating cash flows. Investable cash of $84,885,000 was provided on
November 20, 1991 by the Guaranty Sale which significantly increased short-
term investments at the end of that year.
Cash used in financing activities decreased $16,250,000 to $5,046,000 in
1993 from $21,296,000 in 1992 and decreased $11,255,000 in 1992 from
$32,551,000 in 1991. Cash provided in 1993 from an increase in bank
borrowings was more than offset by the redemption of the Company's Adjustable
Rate Preferred Stock, purchase of common stock and the payment of dividends.
Dividends paid to stockholders were lower in 1993 due to the conversions and
redemptions of the $1.90 Preferred Stock and $2.125 Preferred Stock into
common stock and the redemption of the Adjustable Rate Preferred Stock.
Proceeds from financing activities in 1992 include $107,834,000 from the
issuance of 9 1/8% Senior Notes on September 8, 1992, $19,930,000 from the
issuance of bank debt in December 1992 and proceeds of $9,497,000 from the
issuance of common stock in April 1992. These sources of cash were offset by
debt repayments in 1992, including repayment of the Company's bank loan and
the retirement of the Company's 13 1/2% Senior Subordinated Debentures and its
12 1/2% Subordinated Debentures.
Orion's uses of cash consist of debt service, dividends to stockholders
and overhead expenses. These cash uses are funded from existing available
cash, financing transactions and receipt of dividends, reimbursement of
overhead expenses and amounts in lieu of federal income taxes from Orion's
insurance subsidiaries. In 1993 Orion received $25,512,000 in dividends,
$5,230,000 for overhead expenses and federal tax payments of $5,600,000 from
its insurance subsidiaries. Orion also received an extraordinary dividend of
$65,470,000 (principally securities) from a California-domiciled subsidiary
which was simultaneously contributed as capital to a Connecticut-domiciled
subsidiary to effect a change in pooling percentages among its insurance
subsidiaries. Payments of dividends by Orion's insurance subsidiaries must
comply with insurance regulatory limitations concerning stockholder dividends
and capital adequacy. State insurance regulators have broad discretionary
authority with respect to limitations on the payment of dividends by insurance
companies. Limitations under current regulations are well in excess of
Orion's cash requirements.
Orion's insurance subsidiaries maintain liquidity in their investment
portfolios substantially in excess of that required to pay claims and
expenses. The insurance subsidiaries held cash and short-term investments of
$92,421,000 and $115,527,000 at December 31, 1993 and 1992, respectively.
Orion's insurance subsidiaries had consolidated policyholders' surplus of
$460,986,000 at December 31, 1993 and $385,803,000 at December 31, 1992, and
statutory operating leverage ratios of net premiums written to policyholders'
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surplus of 1.4:1 and 1.5:1 at December 31, 1993 and 1992, respectively.
Approximately $21,800,000 of the increase in surplus during 1993 relates to
the elimination of a statutory valuation allowance related to the Guaranty
National investment.
During 1992 and 1993, Orion reconfigured its debt structure to take
advantage of generally lower interest rates and the stronger capital position
of the Company, and to reduce the amount of debt maturing in the next five
years. On September 8, 1992, the Company issued 9 1/8% Senior Notes due 2002
with a face value of $110,000,000 in a public offering. The net proceeds from
the offering of $107,834,000 were used to repay the Company's bank debt of
$80,100,000, and to retire the Company's 13 1/2% Senior Subordinated
Debentures on October 9, 1992 for $20,160,000 plus accrued interest. On
November 30, the Company entered into a bridge loan facility (the "Bridge
Loan") with two banks aggregating $25,000,000. In December 1992, the Company
borrowed $20,000,000 under the Bridge Loan to redeem the Company's 12 1/2%
Subordinated Debentures on December 31, 1992 for $20,500,000 plus accrued
interest.
In March 1993 Orion entered into a bank loan arrangement (the "Loan
Agreement") that provided for initial borrowings of up to $60,000,000,
consisting of a $50,000,000 term loan (reduced by $4,500,000 in scheduled
commitment reductions through December 31, 1993) and a $10,000,000 line of
credit. These borrowings are unsecured and bear interest at or below prime.
Borrowings under the Loan Agreement amounted to $50,500,000 at December 31,
1993. The proceeds were used to repay the Bridge Loan and to redeem the
Company's Adjustable Rate Preferred Stock. At December 31, 1993, the Company
has available $5,000,000 in unused commitments under the line of credit.
The terms of the Loan Agreement and Orion's Indenture for its 9 1/8%
Senior Notes limit the amount of additional borrowings, prepayments on
existing indebtedness, liens and guarantees by the Company. Management does
not believe that any of these limitations unduly restrict the Company's
operations or limits Orion's ability to pay dividends on its stock. At
December 31, 1993 the Company was in compliance with the terms of its debt
agreements. Management believes that the Company continues to have
substantial sources of capital and liquidity from the capital markets and bank
borrowings.
On October 1, 1992 and December 21, 1992, Orion called for the redemption
of all of its $1.90 Preferred Stock and $2.125 Preferred Stock on November 2,
1992 and January 21, 1993, respectively. In both cases, the market price of
the shares of common stock that a holder would receive upon conversion of the
preferred stock was substantially higher than the redemption price of $21.30
per share and $25.76 per share, respectively. Consequently, most holders
converted into common stock prior to the redemption dates, resulting in the
issuance of 2,558,173 shares of common stock prior to December 31, 1992 and
1,423,544 shares of common stock in January 1993. Holders of 2,730 shares of
$1.90 Preferred Stock and 21,605 shares of $2.125 Preferred Stock, who did not
elect to convert, redeemed their shares for an aggregate of $58,000 and
$557,000, respectively.
On April 15, 1992, Orion sold 515,625 shares of its common stock for
$9,497,000, net of expenses. The sale was made in a private transaction,
subject to the provisions of Regulation S of the Securities Act of 1933, as
amended. The proceeds from the sale were used for general corporate purposes.
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The Company repurchased 177,658 shares, 22,420 shares and 52,700 shares
of its common stock at an aggregate cost of $5,472,000, $554,000 and $655,000
in 1993, 1992 and 1991, respectively. The Company's remaining stock purchase
authorization from its Board of Directors amounted to $5,819,000 at December
31, 1993.
As of December 31, 1993 there were no significant contingencies or
commitments outstanding which, net of reserves established therefor and giving
effect to reinsurance, are likely to have a material effect on the liquidity
or financial position of Orion and its consolidated subsidiaries, taken as a
whole (See Notes G and H to the consolidated financial statements).
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF MANAGEMENT
The management of Orion Capital Corporation is responsible for the
consolidated financial statements and the information included therein. The
consolidated financial statements are fairly presented and have been prepared
in accordance with generally accepted accounting principles appropriate in the
circumstances, and, where necessary, include amounts based on management's
informed estimates and judgments.
The Company has a system of internal controls which it believes provides
reasonable assurance that assets are safeguarded from loss or unauthorized
use, transactions are recorded in accordance with management's policies and
that the financial records are reliable for preparing financial statements.
The system of internal controls includes written policies and procedures which
are communicated to all appropriate personnel and updated as necessary.
Compliance with the system of internal controls is continuously
maintained and monitored by management. The internal audit staff of the
Company evaluates and reports on the adequacy of and adherence to these
controls, policies and procedures. In addition, as part of its audit of the
consolidated financial statements, Deloitte & Touche, the independent auditors
for the Company, perform a review and evaluation of the system of internal
controls to the extent they consider necessary to express an opinion on the
consolidated financial statements. Recommendations concerning the system of
internal controls are provided by both the internal auditors and Deloitte &
Touche, and management takes actions which are believed to be appropriate
responses to these recommendations.
The Audit Committee of the Board of Directors is comprised of independent
directors, and has general responsibility for oversight of financial controls
and audit activities of the Company and its subsidiaries. The Audit
Committee, which reports to the Board, annually reviews the qualifications of
the independent auditors and meets periodically with them, the internal
auditors and management to review the plans and results of the audits. Both
internal and independent auditors have free access to the Audit Committee,
without members of management present, to discuss the adequacy of the system
of internal controls and any other matters which they believe should be
brought to the attention of the Committee.
Alan R. Gruber Daniel L. Barry
Chairman & Chief Executive Officer Vice President & Controller
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INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
ORION CAPITAL CORPORATION
New York, New York
We have audited the accompanying consolidated balance sheets of Orion
Capital Corporation and subsidiaries as of December 31, 1993 and 1992, and the
related consolidated statements of earnings, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 1993. 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 Orion Capital Corporation and
subsidiaries as of December 31, 1993 and 1992, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1993 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 A to the consolidated financial statements, in 1993
the Company adopted four new accounting standards required by generally
accepted accounting principles. On January 1, 1993 the Company changed its
method of accounting for income taxes and postretirement benefits to conform
with Statement of Financial Accounting Standards Nos. 109 and 106,
respectively. The Company changed its method of accounting for reinsurance to
conform with Statement of Financial Accounting Standards No. 113. Also,
effective December 31, 1993 the Company changed its method of accounting for
investments to conform with Statement of Financial Accounting Standards No.
115.
DELOITTE & TOUCHE
Hartford, Connecticut
February 22, 1994
-48-
<PAGE>
<TABLE>
<CAPTION>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(000s omitted)
ASSETS
December 31,
-------------------------
1993 1992
---- ----
<S> <C> <C>
Investments:
Fixed maturities at amortized cost
(market $402,149 - 1993 and $756,736 - 1992) .. $ 384,402 $ 731,414
Fixed maturities at market (amortized
cost $517,716 - 1993 and $94,123 - 1992) ...... 548,336 95,612
Common stocks at market (cost $111,325 - 1993
and $111,199 - 1992) .......................... 139,022 123,744
Non-redeemable preferred stocks at market
(cost $98,986 - 1993 and $58,637 - 1992) ...... 103,621 61,956
Other long-term investments ..................... 50,682 36,419
Short-term investments .......................... 96,473 107,470
---------- ----------
Total investments ............................ 1,322,536 1,156,615
Cash .............................................. 6,433 12,764
Accrued investment income ......................... 17,623 18,115
Investments in and advances to affiliates ......... 111,459 81,632
Accounts and notes receivable (less allowance
for doubtful accounts $1,859 - 1993 and
$1,959 - 1992) .................................. 111,539 102,241
Reinsurance recoverables and prepaid reinsurance .. 393,309 414,635
Deferred policy acquisition costs ................. 57,522 56,134
Property and equipment (less accumulated
depreciation $19,788 - 1993 and $16,685 - 1992).. 23,596 22,410
Excess of cost over fair value of net assets
acquired (less accumulated amortization
$16,414 - 1993 and $15,241 - 1992) .............. 30,587 31,760
Deferred federal income taxes ..................... 18,891 17,539
Other assets ...................................... 23,959 23,563
---------- ----------
Total assets ................................. $2,117,454 $1,937,408
========== ==========
<FN>
See Notes to Consolidated Financial Statements
-49-
<PAGE>
<CAPTION>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(000s omitted - except for share data)
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31,
-------------------------
1993 1992
---- ----
<S> <C> <C>
Liabilities:
Policy liabilities -
Losses ........................................ $ 937,775 $ 885,080
Loss adjustment expenses ...................... 202,628 196,316
Unearned premiums ............................. 259,359 232,316
Policyholders' dividends ...................... 12,523 13,160
---------- ----------
Total policy liabilities .................... 1,412,285 1,326,872
Federal income taxes payable .................... 19,294 10,052
Other liabilities ............................... 131,308 140,629
Notes payable ................................... 160,372 129,863
---------- ----------
Total liabilities ........................... 1,723,259 1,607,416
---------- ----------
Commitments and Contingencies (Notes G and H)
Adjustable rate preferred stock with mandatory
redemption - at liquidation value; $1 par value;
issued and outstanding 374,100 shares - 1992 .... - 18,705
---------- ----------
Stockholders' equity:
Preferred stock, authorized 5,000,000 shares -
$2.125 convertible exchangeable, $1 par value;
issued and outstanding 1,197,042 shares - 1992. - 28,524
Common stock, $1 par value; authorized
30,000,000 shares; issued 15,337,650 shares -
1993 and 13,886,929 shares - 1992 ............. 15,338 11,110
Capital surplus ................................. 148,167 124,754
Net unrealized investment gains, net of federal
income taxes of $18,718 - 1993 ................ 49,566 18,815
Net unrealized foreign exchange translation
losses, net of federal income tax benefit of
$394 - 1993 ................................... (3,665) (2,918)
Retained earnings ............................... 198,491 139,947
Treasury stock, at cost (965,442 shares - 1993
and 786,755 shares - 1992) .................... (12,182) (6,694)
Deferred compensation on restricted stock ....... (1,520) (2,251)
---------- ----------
Total stockholders' equity .................. 394,195 311,287
---------- ----------
Total liabilities and stockholders' equity... $2,117,454 $1,937,408
========== ==========
<FN>
See Notes to Consolidated Financial Statements
-50-
<PAGE>
<PAGE>
<CAPTION>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(000s omitted - except for per share data)
Year Ended December 31,
------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Revenues:
Premiums earned ..................................... $617,404 $560,205 $701,386
Net investment income ............................... 91,803 82,483 100,206
Realized investment gains (losses) .................. 9,478 3,667 (1,009)
Gain on sale of common stock of Guaranty National ... - - 33,931
Other income ........................................ 1,470 1,363 2,780
-------- -------- --------
Total revenues .................................... 720,155 647,718 837,294
-------- -------- --------
Expenses:
Losses incurred ..................................... 366,716 332,653 429,498
Loss adjustment expenses ............................ 92,416 91,379 108,917
Amortization of deferred policy acquisition costs ... 148,440 135,670 183,773
Other insurance expenses ............................ 17,381 17,158 28,362
Dividends to policyholders .......................... 12,513 13,558 16,460
Interest expense .................................... 13,044 12,754 16,131
Other expenses ...................................... 6,527 7,826 9,291
-------- -------- --------
Total expenses .................................... 657,037 610,998 792,432
-------- -------- --------
Earnings from operations before equity in earnings of
affiliates, federal income taxes, cumulative effect
of adoption of new accounting principles and
extraordinary item .................................. 63,118 36,720 44,862
Equity in earnings of affiliates ...................... 9,387 9,994 1,207
-------- -------- --------
Earnings from operations before federal income taxes,
cumulative effect of adoption of new accounting
principles and extraordinary item ................... 72,505 46,714 46,069
Federal income taxes .................................. 15,517 922 1,401
-------- -------- --------
Earnings before cumulative effect of adoption of new
accounting principles and extraordinary item ........ 56,988 45,792 44,668
Cumulative effect of adoption of new accounting
principles .......................................... 11,825 - -
Extraordinary item - loss on early extinguishment of
debt, net of income tax benefit of $60 .............. - 2,920 -
-------- -------- --------
Net earnings ........................................ $ 68,813 $ 42,872 $ 44,668
======== ======== ========
<PAGE>
Earnings (loss) per common share:
Primary -
Earnings before cumulative effect of adoption of
new accounting principles and extraordinary item. $ 3.88 $ 3.62 $ 3.75
Cumulative effect of adoption of new accounting
principles ...................................... .81 - -
Extraordinary item ................................ - (.27) -
-------- -------- --------
Net earnings .................................... $ 4.69 $ 3.35 $ 3.75
======== ======== ========
Fully diluted -
Earnings before cumulative effect of adoption of
new accounting principles and extraordinary item. $ 3.86 $ 3.05 $ 3.05
Cumulative effect of adoption of new accounting
principles ...................................... .81 - -
Extraordinary item ................................ - (.20) -
-------- -------- --------
Net earnings .................................... $ 4.67 $ 2.85 $ 3.05
======== ======== ========
<FN>
See Notes to Consolidated Financial Statements
-51-
<PAGE>
<PAGE>
<CAPTION>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(000s omitted)
Year Ended December 31,
------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Convertible exchangeable preferred stock:
Balance, beginning of year ................ $ 28,524 $ 58,576 $ 59,064
Conversion of preferred stock ............. (28,524) (30,052) (488)
-------- -------- --------
Balance, end of year ...................... $ - $ 28,524 $ 58,576
======== ======== ========
Common stock:
Balance, beginning of year ................ $ 11,110 $ 7,527 $ 7,500
Conversion of preferred stock ............. 1,139 1,667 27
Sale of common stock ...................... - 330 -
Exercise of stock options and issuance of
restricted stock ........................ 24 14 -
Stock issued in 5-for-4 stock splits ...... 3,065 1,572 -
-------- -------- --------
Balance, end of year ...................... $ 15,338 $ 11,110 $ 7,527
======== ======== ========
Capital surplus:
Balance, beginning of year ................ $124,754 $ 96,345 $ 95,907
Redemptions and conversions of preferred
stock ................................... 26,072 28,118 542
Sale of common stock ...................... - 9,167 -
Exercise of stock options and issuance
(cancellation) of restricted stock ...... 406 1,153 (104)
Stock issued in 5-for-4 stock splits ...... (3,065) (10,029) -
-------- -------- --------
Balance, end of year ...................... $148,167 $124,754 $ 96,345
======== ======== ========
Net unrealized investment gains (losses):
Balance, beginning of year ................ $ 18,815 $ (6,324) $(31,839)
Cumulative effect of adoption of new
accounting principle, net of taxes
of $11,157 .............................. 20,720 - -
Change in unrealized investment gains
(losses), net of taxes in 1993 .......... 10,031 25,139 25,515
-------- -------- --------
Balance, end of year ...................... $ 49,566 $ 18,815 $ (6,324)
======== ======== ========
Net unrealized foreign exchange translation
gains (losses):
Balance, beginning of year ................ $ (2,918) $ 191 $ (405)
Change in unrealized foreign exchange
translation gains (losses), net of taxes
in 1993 ................................. (747) (3,109) 596
-------- -------- --------
Balance, end of year ...................... $ (3,665) $ (2,918) $ 191
======== ======== ========
<PAGE>
Retained earnings:
Balance, beginning of year ................ $139,947 $110,074 $ 78,505
Net earnings .............................. 68,813 42,872 44,668
Dividends declared ........................ (10,269) (12,999) (13,099)
-------- -------- --------
Balance, end of year ...................... $198,491 $139,947 $110,074
======== ======== ========
Treasury stock:
Balance, beginning of year ................ $ (6,694) $(15,267) $(14,555)
Exercise of stock options and issuance
(cancellation) of restricted stock ...... (15) 671 (57)
Acquisition of treasury stock ............. (5,473) (555) (655)
Stock issued in 5-for-4 stock split ....... - 8,457 -
-------- -------- --------
Balance, end of year ...................... $(12,182) $ (6,694) $(15,267)
======== ======== ========
Deferred compensation on restricted stock:
Balance, beginning of year ................ $ (2,251) $ (1,293) $ (2,219)
(Issuance) cancellation of restricted stock (108) (1,438) 381
Amortization of deferred compensation on
restricted stock ........................ 839 480 545
-------- -------- --------
Balance, end of year ...................... $ (1,520) $ (2,251) $ (1,293)
======== ======== ========
<FN>
See Notes to Consolidated Financial Statements
-52-
<PAGE>
<PAGE>
<CAPTION>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(000s omitted)
Year Ended December 31,
----------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Premiums collected ........................ $ 626,678 $ 540,437 $ 742,440
Net investment income collected ........... 81,178 72,168 86,054
Losses and loss adjustment expenses paid .. (374,625) (346,201) (461,888)
Policy acquisition costs paid ............. (162,717) (153,246) (208,817)
Dividends paid to policyholders ........... (13,150) (11,728) (16,350)
Interest paid ............................. (12,405) (11,032) (17,242)
Federal income tax payments ............... (7,100) (6,805) (1,944)
Other receipts (payments) ................. (14,705) (3,060) 17,651
--------- --------- ---------
Net cash provided by operating
activities ............................ 123,154 80,533 139,904
--------- --------- ---------
Cash flows from investing activities:
Maturities of fixed maturity investments .. 152,442 118,301 104,472
Sales of fixed maturity investments ....... 90,720 189,282 535,975
Sales of equity securities................. 91,144 89,799 77,800
Sale of common stock of Guaranty National.. - - 84,885
Effect on cash of deconsolidating
Guaranty National ....................... - - (31,762)
Investments in fixed maturities ........... (311,183) (442,633) (602,014)
Investments in equity securities .......... (120,609) (110,571) (111,077)
Investment in Intercargo Corporation ...... (19,315) - -
Net sales (purchases) of short-term
investments ............................. 8,885 105,662 (154,582)
Other payments ............................ (16,499) (9,093) (9,031)
--------- --------- ---------
Net cash used in investing activities ... (124,415) (59,253) (105,334)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from issuance of notes payable ... 59,672 127,764 2,000
Proceeds from issuance of common stock .... 286 9,545 65
Repayment of notes payable and debentures.. (29,500) (144,998) (20,586)
Dividends paid to stockholders ............ (10,776) (13,155) (13,158)
Purchase and redemption of adjustable rate
preferred and common stock .............. (23,615) (412) (872)
Other payments ........................... (1,113) (40) -
--------- --------- ---------
Net cash used in financing activities ... (5,046) (21,296) (32,551)
--------- --------- ---------
Effect of foreign exchange rate changes
on cash ................................... (24) 2 (756)
--------- --------- ---------
Net increase (decrease) in cash ......... (6,331) (14) 1,263
Cash balance, beginning of year ............. 12,764 12,778 11,515
--------- --------- ---------
Cash balance, end of year ................... $ 6,433 $ 12,764 $ 12,778
========= ========= =========
<FN>
See Notes to Consolidated Financial Statements
-53-
<PAGE>
<CAPTION>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS - (Continued)
(000s omitted)
Year Ended December 31,
------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Reconciliation of net earnings to net cash
provided by operating activities:
Net earnings ................................. $ 68,813 $ 42,872 $ 44,668
-------- -------- --------
Adjustments:
Cumulative effect of adoption of new
accounting principles .................... (11,825) - -
Depreciation and amortization .............. 3,939 2,970 4,640
Amortization of excess of cost over fair
value of net assets acquired ............. 1,173 1,173 1,812
Deferred federal income taxes .............. (931) (5,182) (12,357)
Amortization of fixed maturity investments . 128 (659) (3,519)
Non-cash investment income ................. (11,586) (6,378) (8,093)
Equity in earnings of affiliates ........... (9,387) (9,994) (1,207)
Dividends received from affiliates ......... 3,135 3,072 -
Realized investment losses (gains) ......... (9,478) (3,667) 1,009
Gain on sale of common stock of
Guaranty National ........................ - - (33,931)
Foreign exchange translation adjustment .... 152 (73) (175)
Extraordinary loss ......................... - 2,920 -
Other....................................... (34) - 303
Changes in assets and liabilities (net of
effects of deconsolidation of Guaranty
National in 1991):
Decrease (increase) in accrued investment
income ................................... 492 (1,550) (1,135)
Increase in accounts and notes receivable .. (9,298) (6,245) (1,378)
Decrease (increase) in reinsurance
recoverables and prepaid reinsurance ..... 21,326 (7,402) 136,130
Decrease (increase) in deferred policy
acquisition costs ........................ (1,388) 2,737 (9,674)
Increase in other assets ................... (431) (861) (110)
Increase (decrease) in losses .............. 52,695 47,043 (72,220)
Increase in loss adjustment expenses ....... 6,312 23,414 36,321
Increase in unearned premiums .............. 27,043 25,634 19,338
Increase (decrease) in policyholders'
dividends ................................ (637) 1,830 110
Increase in federal income taxes payable ... 9,242 944 11,000
Increase (decrease) in other liabilities ... (16,301) (32,065) 28,372
-------- -------- --------
Total adjustments and changes ............ 54,341 37,661 95,236
-------- -------- --------
Net cash provided by operating activities .. $123,154 $ 80,533 $139,904
======== ======== ========
<FN>
See Notes to Consolidated Financial Statements
-54-
/TABLE
<PAGE>
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1993, 1992 and 1991
Note A - Significant Accounting Policies
Basis of Financial Statement Presentation - The consolidated financial
statements and notes thereto are presented in accordance with generally
accepted accounting principles ("GAAP") for property and casualty insurance
companies and include the accounts of Orion and its majority-owned
subsidiaries. The Company's investments in unconsolidated affiliates are
accounted for using the equity method (See Note B). All material intercompany
balances and transactions have been eliminated.
Adoption of new accounting principles - The Financial Accounting
Standards Board has issued four new accounting standards which significantly
impact the Company's financial statements. The Company is required to adopt
these standards in accordance with generally accepted accounting principles.
Therefore in 1993 the Company adopted the following standards, which are
discussed in the notes below:
SFAS No. 106 - Employers' Accounting for Postretirement Benefits Other Than
Pensions
SFAS No. 109 - Accounting for Income Taxes
SFAS No. 113 - Accounting and Reporting for Reinsurance of Short-Duration and
Long-Duration Contracts
SFAS No. 115 - Accounting for Certain Investments in Debt and Equity
Securities
Regulation - The Company's insurance subsidiaries are subject to
comprehensive regulation by various state insurance departments including
regulations limiting dividend payments to Orion and intercompany transactions.
Under these regulations, the maximum dividends permitted at December 31, 1993
for the ensuing twelve months, without prior approval, aggregated $37,373,000.
However, state insurance regulators have broad discretionary authority with
respect to approving the payment of dividends by insurance companies.
Policyholders' surplus of Orion's wholly-owned insurance subsidiaries
determined in accordance with statutory accounting practices prescribed or
permitted by state insurance regulations, amounted to $460,986,000 at December
31, 1993 and $385,803,000 at December 31, 1992. Statutory net income amounted
to $66,862,000, $43,733,000 and $45,452,000 for 1993, 1992 and 1991,
respectively.
Cash - For purposes of the consolidated statement of cash flows, the
Company considers only demand deposit accounts to be cash.
-55-
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Investments - Effective December 31, 1993, the Company adopted Statement
of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," which establishes the "available-
for-sale" category of investment securities and requires such securities to be
recorded at market value, with unrealized gains and losses reported in a
separate component of stockholders' equity. As a result of the adoption of
this standard on December 31, 1993, the Company increased its investments
recorded at market value by $452,102,000, and its unrealized appreciation on
investments, a component of stockholders' equity, by $20,720,000, net of
deferred income taxes. Fixed maturity investments include bonds, preferred
stocks with mandatory redemption features, and certificates of deposit that
mature more than one year after the balance sheet date. Fixed maturity
investments that the Company has both the positive intent and the ability to
hold to maturity are recorded at amortized cost. Fixed maturity investments
which may be sold in response to, among other things, changes in interest
rates, prepayment risk, income tax strategies or liquidity needs, are included
in the available-for-sale category at market value. Common stocks and non-
redeemable preferred stocks are stated at market value. Fluctuations in the
market value of these equity securities are recorded as unrealized investment
gains or losses and credited or charged to stockholders' equity. Other long-
term investments include equity ownership interests in limited partnerships
which are recorded using the equity method of accounting, and mortgage loans
which are stated at their unpaid balance. Short-term investments include
certificates of deposit and commercial paper which mature within one year of
the balance sheet date, money market accounts and United States Treasury
Bills. Estimates of market values are generally based on quoted market prices
or dealer quotes, if available, or otherwise on an evaluation of the
issuers' financial statements. Realized investment gains and losses,
including other than temporary impairment of investment securities, are
recognized on the specific identification method.
Deferred Policy Acquisition Costs - Costs that vary with, and are
directly related to, the production of new and renewal business are deferred
and amortized as the related premiums are earned. The test for recoverability
of such deferred costs includes the consideration of net investment income.
Excess of Cost Over Fair Value of Net Assets Acquired - The excess of the
cost of acquiring subsidiaries over the fair value of their net assets
("goodwill") is amortized on a straight-line basis over periods of 25 to 40
years.
Revenue Recognition - Premiums are earned on a daily pro rata basis over
the policy period. A provision is made for anticipated retrospective premium
adjustments and audit premiums. Direct and assumed premiums are reduced for
reinsurance ceded to other insurers.
Policy Liabilities and Reinsurance - Loss and loss adjustment expense
liabilities are established in consideration of individual cases for reported
losses and past experience for unreported losses. The Company adopted SFAS
-56-
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
No. 113 "Accounting and Reporting for Reinsurance of Short-Duration and Long-
Duration Contracts" on January 1, 1993. The statement establishes the
conditions required for a contract with a reinsurer to be accounted for as
reinsurance, and amends SFAS No. 60, "Accounting and Reporting by Insurance
Enterprises", to require reinsurance receivables and prepaid reinsurance
premiums to be reported as assets rather than to be offset against the related
liabilities. Estimated reinsurance receivables are recognized in a manner
consistent with the liabilities relating to the underlying reinsured
contracts. The Company reclassified its assets and liabilities as of December
31, 1992 to conform with the SFAS No. 113 presentation, thereby increasing
both reinsurance related assets and policy liabilities by $383,484,000. At
December 31, 1993 and 1992, approximately $73,215,000 and $68,882,000,
respectively, of long-term disability workers compensation loss reserves are
included in the consolidated financial statements at net present value using a
statutory interest rate of 3.5%. Policyholders' dividends on participating
policies are accrued at estimated payment rates as the related premiums are
earned. Participating business represented 21% of premiums in-force at
December 31, 1993, 28% at year-end 1992 and 33% at the end of 1991. As a
percent of premiums earned, participating business amounted to 21% in 1993,
28% in 1992, and 24% in 1991.
Federal Income Taxes - As of January 1, 1993 the Company prospectively
adopted SFAS No. 109, "Accounting for Income Taxes," replacing the previous
standard for accounting for income taxes, SFAS No. 96. The objectives of SFAS
No. 109 are to recognize taxes payable or refundable for the current year, and
deferred tax assets or liabilities for the future tax consequences of events
that have been recognized in the Company's financial statements or tax
returns. The new standard provides for the recognition of deferred tax assets
that were not recognized under SFAS No. 96, and resulted in the recognition of
a cumulative tax benefit of $16,881,000 ($1.16 per share).
Postretirement Benefits - Effective January 1, 1993 the Company adopted
SFAS No. 106 "Employers' Accounting for Postretirement Benefits Other Than
Pensions" which requires the Company to accrue the estimated cost of retiree
benefits during the years the employees provide services. The Company
previously expensed the cost of medical benefits provided to retirees as they
were paid. The cumulative effect of adopting SFAS No. 106 as of January 1,
1993 was a decrease in net earnings of $5,056,000 ($.35 per share), net of a
tax benefit of $2,604,000, which has been included in the Company's
consolidated statement of earnings for the year ended December 31, 1993.
Stock Split - Common stock and per common share data have been restated,
as required, to give effect to the 5-for-4 stock splits paid on November 15,
1993 to stockholders of record on October 15, 1993 and on December 7, 1992 to
stockholders of record on November 20, 1992.
Earnings Per Common Share - Primary and fully-diluted earnings per
common share are computed using the weighted average common and dilutive
common equivalent shares outstanding.
-57-
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Reclassifications - The 1992 and 1991 consolidated financial statements
have been reclassified to conform to the classifications used in 1993.
Note B - Investment in Affiliates
On November 20, 1991 the Company sold 6,250,000 shares of common stock of
its wholly-owned subsidiary, Guaranty National Corporation ("Guaranty
National"), in a public offering, and reduced its ownership to 49.3%.
Proceeds from the sale of $14.50 per share, or approximately $84,400,000 after
expenses, resulted in a gain of $33,931,000 before federal income taxes. Just
prior to the sale, Guaranty National issued 9 1/2% subordinated notes, with a
final maturity in January 1998, to the Company aggregating $20,896,000, which
included $19,829,000 as a special dividend and $1,067,000 in payment for
office furniture and equipment. The principal of the notes was refinanced on
August 1, 1993 at 7.85%, with the terms extended to semi-annual installments
beginning January 1, 1998 through July 1, 2003. The Company's ownership of
Guaranty National was reduced to 49.2% in 1993 by the issuance of shares of
restricted stock by Guaranty National to certain of its employees.
On September 13, 1993 the Company acquired 700,000 shares of common stock
of Intercargo Corporation ("Intercargo"), a publicly held corporation. On
December 28, 1993 the Company purchased an additional 826,484 shares which
increased its ownership to 20.0%. The aggregate purchase price, including
expenses, was $19,314,000. The excess of cost over the fair value of the
underlying equity in net assets acquired was $11,158,000, which will be
amortized over a 25 year period.
Guaranty National's financial statements for 1988 through November 20,
1991, the period that Guaranty National was wholly-owned by the Company, have
been consolidated with those of the Company. The financial statements for the
periods subsequent to the sale include the portion of Guaranty National's
results attributable to the Company's ownership on an equity accounting basis.
Intercargo's results are also recorded by the Company using the equity method.
The Company's share of the undistributed earnings of Guaranty National after
November 20, 1991, and Intercargo after September 13, 1993, were $14,926,000
as of December 31, 1993 and $8,129,000 as of December 31, 1992.
Transactions with Guaranty National for 1993, 1992 and the period from
November 20 to December 31, 1991 reported in the consolidated statement of
earnings include interest income on the subordinated notes of $1,843,000,
$2,004,000 and $251,000, investment management fee income of $550,000,
$700,000 and $78,000 and interest expense on a mortgage participation loan of
$407,000, $407,000 and $45,000, respectively.
-58-
<PAGE>
<TABLE>
<CAPTION>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Summarized financial information of the Company's affiliates, including
Guaranty National for 1993, 1992 and the period from November 20, 1991 to
December 31, 1991, and as of December 31, 1993 and 1992, and Intercargo for
the fourth quarter of 1993 and as of December 31, 1993, is set forth below
(See Note L for segment information which includes the operating results of
Guaranty National from January 1 through November 20, 1991):
Period from
Year Ended November 20 to
December 31, December 31, 1991
----------------- -----------------
1993 1992
---- ----
(000s omitted)
<S> <C> <C> <C>
Revenues:
Premiums earned ...................... $272,636 $220,033 $ 21,345
Realized investment gains (losses) ... 5,996 2,342 (1,687)
Investment and other income .......... 21,813 23,125 1,940
-------- -------- --------
300,445 245,500 21,598
-------- -------- --------
Expenses:
Insurance expenses ................... 274,377 214,927 18,709
Interest and other ................... 3,447 3,241 454
-------- -------- --------
277,824 218,168 19,163
-------- -------- --------
Earnings before federal income taxes
(benefit) and cumulative effect of
change in accounting principles ...... 22,621 27,332 2,435
Federal income taxes (benefit) ......... 4,481 7,061 (13)
-------- -------- --------
Earnings before cumulative effect of
change in accounting principles .... $ 18,140 $ 20,271 $ 2,448
======== ======== ========
The Company's proportionate share:
Earnings before cumulative effect of
change in accounting principles .... $ 9,387 $ 9,994 $ 1,207
======== ======== ========
Cumulative effect of change in
accounting principles
(SFAS Nos. 106 and 109) ............ $ 545 $ - $ -
======== ======== ========
<CAPTION>
December 31,
-------------------
1993 1992
---- ----
(000s omitted)
<S> <C> <C>
Cash and investments ................................. $460,779 $327,572
Other assets ......................................... 228,803 149,912
-------- --------
689,582 477,484
Policy liabilities ................................... (387,783) (276,443)
Notes payable ........................................ (49,844) (32,896)
Other liabilities .................................... (60,915) (38,022)
-------- --------
Stockholders' equity ................................. $191,040 $130,123
======== ========
-59-
<PAGE>
<CAPTION>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31,
-------------------
1993 1992
---- ----
(000s omitted)
<S> <C> <C>
The Company's investment in and advances to
affiliates were as follows:
Book value ......................................... $111,459 $ 81,632
Market value ....................................... 143,255 138,526
Guaranty National shares held ...................... 6,143 6,143
- Book value of shares held ...................... $ 75,394 $ 64,436
- Market value of shares held .................... 107,510 121,332
Intercargo shares held ............................. 1,526
- Book value of shares held ...................... $ 18,869
- Market value of shares held .................... 17,936
<CAPTION>
Note C - Investments
The tables below set forth certain information concerning net investment
income, and realized and unrealized investment gains (losses):
Year Ended December 31,
---------------------------------
1993 1992 1991
---- ---- ----
(000s omitted)
<S> <C> <C> <C>
Net investment income:
Fixed maturities ...................... $ 69,565 $ 63,739 $ 77,756
Equity securities ..................... 10,495 9,842 8,346
Other long-term investments ........... 9,130 3,499 4,209
Short-term investments ................ 3,276 5,919 9,051
Accounts and notes receivable ......... 179 105 112
Other ................................. 712 467 1,872
-------- -------- --------
Total investment income ............. 93,357 83,571 101,346
Less investment expenses .............. 1,554 1,088 1,140
-------- -------- --------
Net investment income ............... $ 91,803 $ 82,483 $100,206
======== ======== ========
Realized investment gains (losses):
Fixed maturities ...................... $ 4,515 $ 3,232 $ (845)
Equity securities ..................... 4,963 435 (164)
-------- -------- --------
$ 9,478 $ 3,667 $ (1,009)
======== ======== ========
-60-
<PAGE>
<CAPTION>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The amortized cost and estimated market values of investments in fixed
maturities, equity securities and short-term investments are as follows:
Gross Gross Estimated
Amortized Unrealized Unrealized Market
December 31, 1993 Cost Gains Losses Value
- ----------------- ---------- ---------- ---------- ---------
(000s omitted)
<S> <C> <C> <C> <C>
Held-to-maturity securities:
United States Government
and government agencies
and authorities ........... $ 140,784 $ 8,224 $ (627) $ 148,381
States, municipalities and
political subdivisions .... 123,852 7,528 (202) 131,178
Foreign governments ......... 7,270 308 - 7,578
Corporate securities ........ 112,496 3,704 (1,188) 115,012
---------- -------- -------- ----------
$ 384,402 $ 19,764 $ (2,017) $ 402,149
========== ======== ======== ==========
Available-for-sale securities:
United States Government
and government agencies
and authorities ........... $ 145,511 $ 10,156 $ (4,573) $ 151,094
States, municipalities and
political subdivisions .... 144,839 15,183 (180) 159,842
Foreign governments ......... 7,381 923 - 8,304
Corporate securities ........ 175,853 10,540 (2,126) 184,267
Mortgage-backed securities
(exclusive of government
agencies) ................ 44,132 1,020 (323) 44,829
Equity securities ........... 210,311 38,568 (6,236) 242,643
Short-term investments....... 96,473 - - 96,473
---------- -------- -------- ----------
$ 824,500 $ 76,390 $(13,438) $ 887,452
========== ======== ======== ==========
December 31, 1992
- -----------------
Fixed maturities:
United States Government
and government agencies
and authorities ........... $ 216,309 $ 12,138 $ (1,106) $ 227,341
States, municipalities and
political subdivisions .... 252,617 7,685 (16) 260,286
Foreign governments ......... 33,366 1,647 (80) 34,933
Corporate securities ........ 267,160 11,497 (6,308) 272,349
Mortgage-backed securities
(exclusive of government
agencies) ................ 56,085 1,446 (92) 57,439
Equity securities ............. 169,836 29,731 (13,867) 185,700
Short-term investments......... 107,470 - - 107,470
---------- -------- -------- ----------
$1,102,843 $ 64,144 $(21,469) $1,145,518
========== ======== ======== ==========
-61-
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The amortized cost and estimated market values of fixed maturity and
short-term investments at December 31, 1993, by contractual fiscal maturity,
are shown below. Expected maturities will differ from contractual maturities
because issuers of securities may have the right to call or prepay obligations
with or without call or prepayment penalties.
<CAPTION>
Fixed Maturities Fixed Maturities
Held-to-Maturity Available-for-Sale
-------------------- --------------------
Estimated Estimated
Amortized Market Amortized Market
Cost Value Cost Value
--------- --------- --------- ---------
(000s omitted)
<S> <C> <C> <C> <C>
Due in one year or less .......... $ 27,022 $ 27,267 $113,804 $114,261
Due after one year through five
years .......................... 143,168 152,629 38,006 39,199
Due after five years through ten
years .......................... 120,506 123,936 56,366 60,290
Due after ten years .............. 93,706 98,317 263,069 288,429
-------- -------- -------- --------
384,402 402,149 471,245 502,179
Mortgage-backed securities ....... - - 142,944 142,630
-------- -------- -------- --------
$384,402 $402,149 $614,189 $644,809
======== ======== ======== ========
</TABLE>
Proceeds from sales of investments in fixed maturities were $90,720,000
in 1993, $189,282,000 in 1992, and $535,975,000 during 1991. Realized
investment gains (losses) on fixed maturities during 1993, 1992 and 1991
include gross gains of $10,817,000, $10,273,000 and $18,287,000, gross losses
realized from sales of $4,155,000, $4,908,000 and $11,362,000 and $2,147,000,
$2,133,000 and $7,770,000, respectively, of loss provisions recorded for other
than temporary impairment in the value of investments. The Company had
$226,000 and $1,666,000 of fixed maturity investments for which it was not
accruing income for the years ended December 31, 1993 and 1992, respectively.
Other long-term investments had aggregate carrying values of
$50,682,000 at December 31, 1993 and $36,419,000 at December 31, 1992
including mortgage loans on real estate of $1,690,000 and $434,000,
respectively. Estimated market values of mortgage loans and other long-term
investments approximate their carrying values.
The carrying value of securities on deposit with state regulatory
authorities in accordance with statutory requirements totalled $283,537,000
and $340,699,000 at December 31, 1993 and 1992, respectively. Excluding
investments in Guaranty National and securities of the United States
Government and its agencies, the Company did not have any investments in
securities of any one issuer that exceeded $20,000,000.
-62-
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note D - Reinsurance
In the normal course of business, the Company's insurance subsidiaries
reinsure certain risks, generally on an excess-of-loss or pro rata basis, with
other companies in order to limit losses. Reinsurance does not discharge the
primary liability of the original insurer. As of December 31, 1993 and 1992,
recoverables for reinsurance ceded to the Company's three largest reinsurers
were an aggregate of $106,414,000 and $112,553,000, respectively. At December
31, 1993, these reinsurers provided qualified trust accounts for the benefit
of the Company of $46,167,000 and letters of credit totalling $4,372,000. At
December 31, 1992, the Company held $36,855,000 in funds of one of these
reinsurers, and another provided a qualified trust account for the benefit of
the Company of $31,129,000 and a letter of credit for $3,131,000. The table
below illustrates the effect of reinsurance on premiums written and premiums
earned:
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------
1993 1992 1991
---- ---- ----
(000s omitted-except for percentages)
<S> <C> <C> <C>
Direct premiums written ................ $ 647,426 $ 616,016 $ 791,682
Reinsurance assumed .................... 132,702 74,726 76,425
--------- --------- ---------
Gross premiums written ................. 780,128 690,742 868,107
Reinsurance ceded ...................... (144,542) (123,312) (134,042)
--------- --------- ---------
Net premiums written ................... $ 635,586 $ 567,430 $ 734,065
========= ========= =========
Percentage of amount assumed to net .... 20.9% 13.2% 10.4%
========= ========= =========
Direct premiums earned ................. $ 635,374 $ 589,570 $ 770,433
Reinsurance assumed .................... 117,711 75,540 69,242
--------- --------- ---------
Gross premiums earned .................. 753,085 665,110 839,675
Reinsurance ceded ...................... (135,681) (104,905) (138,289)
--------- --------- ---------
Net premiums earned .................... $ 617,404 $ 560,205 $ 701,386
========= ========= =========
Loss and loss adjustment expenses
recoverable from reinsurers .......... $ 70,297 $ 75,521 $ 125,575
========= ========= =========
</TABLE>
Included in other liabilities are funds held under various reinsurance
treaties of $5,487,000 and $39,072,000 at December 31, 1993 and 1992,
respectively. Reinsurance recoverables and prepaid reinsurance includes
prepaid reinsurance of $55,043,000 at December 31, 1993 and $46,183,000 at
December 31, 1992.
-63-
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note E - Notes Payable
Orion issued 9 1/8% Senior Notes due 2002 (the "9 1/8% Senior Notes") in
a public offering on September 8, 1992. The proceeds were used to extinguish
the Company's debt under its loan agreement with various banks at that date,
and to redeem its 13 1/2% Senior Subordinated Debentures on October 9, 1992.
The Company entered into a loan agreement (the "Bridge Loan") with two banks
on November 30, 1992, and borrowed $20,000,000 under this agreement in
December 1992, the proceeds of which were used to redeem the Company's 12 1/2%
Subordinated Debentures on December 31, 1992. The costs of the early
extinguishment of the Company's bank debt and debentures in 1992 were
approximately $2,980,000. These costs are reported as an extraordinary item
in the Company's financial statements, net of a $60,000 tax benefit. Debt
extinguishment costs include the premiums required to call the debentures, the
unamortized discount of the debentures and unamortized deferred financing
costs of the debentures and bank debt.
Orion entered into a bank loan agreement (the "Loan Agreement") in March
1993 that provided for initial borrowings of up to $60,000,000, consisting of
a $50,000,000 term loan (reduced by $4,500,000 in scheduled commitment
reductions through December 31, 1993) and a $10,000,000 line of credit. The
proceeds were used to repay the Bridge Loan and to redeem the Company's
Adjustable Rate Preferred Stock. As of December 31, 1993, the Company had
$50,500,000 outstanding under the Loan Agreement, and $5,000,000 in unused
commitments available under the line of credit. There is a commitment fee of
1/4% of 1% per annum on the unused portion of the revolving credit facility.
The Company can elect to borrow at the prime rate, or at certain other short-
term borrowing rates. The rates for notes payable under the Loan Agreement
were between 4.59% and 4.90% at December 31, 1993. The terms of the Loan
Agreement limit the amount of additional borrowings, prepayments on existing
indebtedness, liens and guarantees by the Company, and require the Company to
meet minimum net worth and certain financial ratio tests. The 9 1/8% Senior
Notes Indenture limits the Company's ability to incur secured indebtedness
without equally and ratably securing the 9 1/8% Senior Notes.
-64-
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Notes payable are recorded at face value less unamortized discount. The
carrying value and estimated market value of notes payable consists of the
following:
<TABLE>
<CAPTION>
Estimated
Carrying Value Market Value
------------------ ------------------
December 31, 1993 1992 1993 1992
------------ ---- ---- ---- ----
(000s omitted)
<S> <C> <C> <C> <C>
Borrowings under loan agreement with various
banks (various interest rates) .............. $ 50,500 $ 20,000 $ 50,500 $ 20,000
$110,000,000 face amount, 9 1/8% Senior Notes,
due September 1, 2002 ....................... 109,872 109,863 119,053 109,076
-------- -------- -------- --------
$160,372 $129,863 $169,553 $129,076
======== ======== ======== ========
<CAPTION>
The Company's debt is scheduled to be repaid as follows:
(000s omitted)
<S> <C>
1994 ................................... $ 8,000
1995 ................................... 10,000
1996 ................................... 12,000
1997 ................................... 12,000
1998 ................................... 8,500
2002 ................................... 110,000
--------
160,500
Less unamortized discount .............. 128
--------
$160,372
========
</TABLE>
Note F - Federal Income Taxes
Orion and its wholly-owned subsidiaries file consolidated federal income
tax returns. The Company adopted SFAS No. 109 effective January 1, 1993. The
new standard provides for the recognition of deferred tax assets that were not
recognized under the prior standard, SFAS No. 96. The cumulative effect of
adopting SFAS No. 109 was a benefit of $16,881,000. Accounting for income
taxes using SFAS No. 109 increased income taxes on continuing operations for
1993 by $3,909,000. The consolidated federal income tax current provisions
for 1991 through 1993 were computed by the regular tax method, reduced by
alternative minimum and other tax credits in 1991. The deferred tax benefit
for 1993 results primarily from the increase in the discount on loss reserves
for income tax purposes offset by the undistributed earnings of Guaranty
National. The 1993 tax provision reflects a tax benefit of $450,000 from the
-65-
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
effect of the increase in the federal tax rate on the Company's deferred tax
asset. The consolidated federal income tax deferred benefits for 1992 and
1991 result from the recognition of previously unrecorded deferred tax
benefits to the extent that they could be carried back to generate the
recovery of income taxes under SFAS No 96. Substantially all federal income
taxes incurred by the Company and its subsidiaries relate to domestic
operations.
The tax effects of the temporary differences comprising the Company's net
deferred tax asset as of December 31, 1993 and January 1, 1993 are as follows:
<TABLE>
<CAPTION>
December 31, January 1,
1993 1993
------------ ----------
(000s omitted)
<S> <C> <C>
Deferred tax assets:
Loss reserve discounting ...................... $55,479 $52,483
Unearned premium reserves ..................... 14,675 13,039
Policyholders' dividends ...................... 4,348 4,437
Realized investment losses .................... 4,054 3,239
Deferred income ............................... 2,836 2,927
Retiree medical benefits ...................... 2,726 -
Other ......................................... 6,717 5,608
------- -------
90,835 81,733
------- -------
Deferred tax liabilities:
Deferred policy acquisition costs ............. 20,133 19,086
Investment in affiliates ...................... 15,800 12,204
Unrealized investment gains ................... 23,899 6,397
Other ......................................... 12,112 10,366
------- -------
71,944 48,053
------- -------
$18,891 $33,680
======= =======
<CAPTION>
Total income taxes on income from operations and allocations of taxes to
other items for the year ended December 31, 1993 are as follows:
(000s omitted)
<S> <C>
Taxes on income from continuing
operations ............................ $ 15,517
Taxes allocated to other items:
Cumulative effect of change in
accounting for postretirement
benefits ............................ (2,604)
Stockholders' equity, for increase
in unrealized appreciation of
securities .......................... 18,718
Stockholders' equity, for increase in
foreign exchange translation losses.. (394)
--------
$ 31,237
========
-66-
<PAGE>
<CAPTION>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The components of the provision (benefit) for federal income taxes are as
follows:
Year Ended December 31,
-----------------------------
1993 1992 1991
---- ---- ----
(000s omitted)
<S> <C> <C> <C>
Current ...................... $16,448 $ 6,104 $13,758
Deferred .................... (931) (5,182) (12,357)
------- ------- -------
$15,517 $ 922 $ 1,401
======= ======= =======
<CAPTION>
A reconciliation of expected federal income tax expense on pre-tax
earnings before cumulative effect of adoption of new accounting principles and
extraordinary item at regular corporate rates to actual tax expense is as
follows:
Year Ended December 31,
------------------------------------------------
1993 1992 1991
---- ---- ----
Amount Rate Amount Rate Amount Rate
------ ---- ------ ---- ------ ----
(000s omitted-except for percentages)
<S> <C> <C> <C> <C> <C> <C>
Expected income tax expense.. $25,377 35.0% $15,883 34.0% $15,663 34.0%
Utilization of NOLs ......... - - (6,135) (13.1) (12,357) (26.8)
Alternative minimum and other
tax credits ............... - - - - (5,016) (10.9)
Change in enacted tax rate .. (905) (1.3) - - - -
Dividends-received deduction (4,659) (6.4) (4,003) (8.6) (2,685) (5.8)
Tax-exempt interest ......... (5,791) (8.0) (3,006) (6.4) (478) (1.0)
Amortization of goodwill .... 410 .6 399 .8 610 1.3
Temporary differences -
Loss reserve discounting... - - 1,729 3.7 10,646 23.1
Amortization of fresh
start discount .......... - - (1,262) (2.7) (1,958) (4.3)
Unearned premium reserves.. - - 2,156 4.6 4,214 9.1
Deferred policy acquisition
costs ................... - - 931 2.0 (3,317) (7.2)
Salvage and subrogation ... - - (2,343) (5.0) (650) (1.4)
Sale of Guaranty National
stock ................... - - - - (4,829) (10.5)
Equity in earnings of
affiliates .............. - - (2,385) (5.1) (410) (.9)
Realized investment losses. - - (1,540) (3.3) (369) (.8)
Other ....................... 1,085 1.5 498 1.1 2,337 5.1
------- ----- ------- ----- ------- -----
Actual income tax expense ... $15,517 21.4% $ 922 2.0% $ 1,401 3.0%
======= ===== ======= ===== ======= =====
-67-
</TABLE>
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note G - Commitments
Minimum lease commitments at December 31, 1993, with the majority having
initial lease periods from one to twenty-five years, are as follows:
(000s omitted)
1994 ....................................... $10,721
1995 ....................................... 9,009
1996 ....................................... 7,446
1997 ....................................... 5,898
1998 ....................................... 4,959
1999 and thereafter ........................ 45,439
-------
Minimum rental commitments ............... $83,472
=======
Rent expense amounted to $11,976,000, $12,224,000 and $13,521,000 net of
sublease rentals of $419,000, $765,000 and $791,000 in 1993, 1992 and 1991,
respectively. Substantially all leases are for office space and equipment. A
number of lease commitments contain renewal options ranging from one to thirty
years.
Note H - Contingencies
In November 1988, California voters passed an initiative known as
Proposition 103 (the "California Proposition") which amended the California
Insurance Code to provide, among other things, that rates for automobile and
many other insurance policies issued or renewed on or after November 8, 1988,
be rolled back to the levels of November 8, 1987 and then reduced by 20%.
Workers compensation insurance and reinsurance are excluded from the
California Proposition's rate rollback provisions.
On January 8, 1991, the California Insurance Department issued rate
regulation proposals regarding the California proposition. On October 16,
1991, the California Insurance Commissioner issued notices of premium refunds
to 14 insurers. In February 1993, the California State Court invalidated the
regulations with respect to one insurance company that received notice of a
premium refund. The decision is currently on appeal to the California Supreme
Court. None of the Company's insurance subsidiaries were among the companies
that received the refund notices.
Although it is not possible to predict with any degree of certainty the
ultimate outcome of such regulations or their impact on the Company's rates
charged since November 8, 1988, management currently believes that the effect
of the regulations will not be material to the Company. Based on the
foregoing, and management's belief that the rates filed by the Company comply
with applicable California law, no provision has been made in the accompanying
consolidated financial statements for denial or partial denial of the
Company's rollback exemption applications or partial or total disapproval of
the Company's rates filed since November 8, 1989.
-68-
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Orion and its subsidiaries are routinely engaged in litigation incidental
to their businesses; however, in the judgment of the Company's management,
there are no significant legal proceedings pending against Orion or its
subsidiaries, which, net of reserves established therefor and giving effect to
reinsurance, are likely to result in judgments for amounts that are material
to the financial condition of Orion and its consolidated subsidiaries, taken
as a whole.
Note I - Stockholders' Equity and Earnings Per Common Share
Orion declared a 5-for-4 split of its common stock which was paid on
November 15, 1993 to shareholders of record on October 15, 1993. All common
stock and per common share data presented in the financial statements has been
restated to give effect to this stock split. The Company had also paid a 5-
for-4 common stock split on December 7, 1992 to shareholders of record on
November 20, 1992.
During 1993, the Company repurchased 177,658 shares of its common stock
at an aggregate cost of $5,472,000. The Company repurchased 22,420 shares for
$554,000 in 1992 and 52,700 shares for $655,000 in 1991.
On April 15, 1992, Orion sold 515,625 shares of its common stock for
$9,497,000, net of expenses. The sale was made in a private transaction,
subject to the provisions of Regulation S of the Securities Act of 1933, as
amended.
On December 21, 1992, Orion called for the redemption of its $2.125
Convertible Exchangeable Preferred Stock (the "$2.125 Preferred Stock") on
January 21, 1993. The market price of the shares of common stock that a
holder would receive upon conversion of the preferred stock was substantially
higher than the redemption price of $25.76 per share. Consequently, most
holders converted into common stock prior to the redemption date, resulting in
the issuance of 3,579 shares of common stock in December 1992 and 1,423,544
shares of common stock in January 1993. Holders of 21,605 shares of $2.125
Preferred Stock, who did not elect to convert, redeemed their shares for an
aggregate of $557,000.
Orion issued 2,601,050 and 42,428 shares of common stock for conversions
elected by holders of 1,581,470 and 25,800 shares of the Company's $1.90
Convertible Exchangeable Preferred Stock (the "$1.90 Preferred Stock"), in
1992 and 1991, respectively. The 1992 conversions were primarily the result
of Orion calling this issue on November 2, 1992 at the redemption price of
$21.30 per share including accrued dividends. The remaining 2,730 shares of
$1.90 Preferred Stock were redeemed for approximately $58,000.
-69-
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
On April 7, 1993, the Company redeemed all of the outstanding shares of
its Adjustable Rate Preferred Stock for $18,520,000 in cash. The redemption
was funded with borrowings under the Loan Agreement.
Dividends declared on Orion's common and preferred stock for 1993, 1992
and 1991 were as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------
1993 1992 1991
----------------- ----------------- -----------------
Per Share Amount Per Share Amount Per Share Amount
--------- ------- --------- ------- --------- -------
(000s omitted - except for per share data)
<S> <C> <C> <C> <C> <C> <C>
Adjustable Rate
Preferred Stock ..... $1.10 $ 407 $4.16 $ 1,581 $4.37 $ 1,679
$1.90 Preferred Stock.. - - 1.43 2,227 1.90 3,047
$2.125 Preferred Stock. .12 2 2.13 2,550 2.13 2,550
Common Stock .......... .68 9,860 .60 6,641 .59 5,823
------- ------- -------
$10,269 $12,999 $13,099
======= ======= =======
</TABLE>
The weighted average common shares outstanding for purposes of computing
earnings per share amounted to 14,598,000, 10,914,000 and 9,964,000 shares for
1993, 1992 and 1991, respectively. Dividends on preferred stock were deducted
from earnings to compute primary earnings per common share. The $2.125
Preferred Stock and, for 1992 and 1991, the $1.90 Preferred Stock are assumed
to be converted for the full year, if dilutive, for the purpose of computing
fully-diluted earnings per common share. The weighted average common shares,
on a fully-diluted basis, amounted to 14,655,000, 14,474,000 and 14,086,000
shares for 1993, 1992 and 1991, respectively.
Orion has a Stockholder Rights Plan (the "Rights Plan") under which each
outstanding share of common stock includes 64% of one preferred stock purchase
right (the "Rights"). The Rights Plan is designed to assure stockholders that
they will receive equitable treatment in the event of a proposed takeover.
Under the Rights Plan, each holder of a Right is entitled to buy one-hundredth
of a share of Series A Participating Junior Preferred Stock. The Rights
become exercisable if an acquiror gains a 20% or greater beneficial ownership
interest in Orion's common stock, on other than fair and favorable terms to
all stockholders. Each Right not owned by such acquiror will enable the
holder to purchase, at an initial exercise price of $80, common stock having a
value of twice the Right's exercise price. In addition, under certain
circumstances if Orion is involved in a merger each Right will entitle its
holder to purchase, at the Right's then current exercise price, common shares
of such other company having a value of twice the Right's exercise price.
-70-
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note J - Employee Benefit Plans
The Company maintains a Stock Savings and Retirement Plan (the "Plan"),
qualified under Internal Revenue Code Section 401(k), for eligible employees
of the Company. Employee and employer matched contributions to the savings
funds are limited to the extent allowable under the Plan and federal income
tax law. The Plan also provides for a defined contribution retirement benefit
that allows the Company to make annual contributions to the Plan based on a
percentage of the participating employees' compensation. Employees vest in
the Company's contributions over a six-year period with vesting credit given
for prior service with the Company. The Company has adopted a Surplus Benefit
Plan which provides deferred benefits for those employees who received less
than the full employer contribution to the Company's 401(k) plan as a result
of federal tax limitations on participation in the Plan.
The Company maintains a number of incentive plans for key employees.
These plans include the Company's 1979 stock option plan and the Company's
1982 Long-Term Performance Incentive Plan. Under the latter plan, shares of
restricted stock as well as stock options may be granted by Orion. Orion
granted 5,688, 66,016 and 4,063 shares of restricted stock to key employees
during 1993, 1992 and 1991, respectively. Restricted stock is considered
issued and outstanding when awarded, and is recorded as deferred compensation.
There are restrictions as to its transferability, which restrictions lapse
proportionately from the second to the fifth anniversaries of grant date. As
of December 31, 1993, the restrictions have not lapsed on 130,089 shares of
restricted stock. All stock options granted by Orion, at fair market value at
date of grant, are intended to qualify as incentive stock options becoming
exercisable from the first through fourth anniversaries of the date of grant,
expiring ten years after the date of grant. As of December 31, 1993, the
number of shares of stock reserved under all plans is 641,113 of which 284,337
are for outstanding stock options and 197,696 of these stock options are
exercisable. A summary of the option transactions is as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------------------
1993 1992 1991
---- ---- ----
Price Price Price
Options Range Options Range Options Range
------- ----- ------- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C>
Balance - January 1 ... 305,860 $10.16-23.92 257,422 $ 8.64-19.20 284,375 $ 8.64-19.20
Granted ............... 3,438 32.40 92,969 23.92 -
Cancelled ............. - - (3,125) 10.88
Exercised ............. (24,961) 10.16-14.56 (44,531) 8.64- 9.04 (23,828) 8.64-13.92
------- ------- -------
Balance - December 31.. 284,337 10.16-32.40 305,860 10.16-23.92 257,422 8.64-19.20
======= ======= =======
</TABLE>
-71-
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Orion also maintains a non-qualified defined benefit retirement plan for
members of the Board of Directors who are not employees. Benefits are based
on years of service and director fee levels at retirement.
The total expense for 1993, 1992 and 1991 for the above pension benefit
plans for employees and directors amounted to $3,277,000, $2,694,000 and
$1,695,000, respectively.
Note K - Postretirement Medical Benefits
The Company provides postretirement medical benefits to full-time
employees who have worked for 10 years and attained age 55 while in service
with the Company. The effect on income from continuing operations after
federal income taxes for 1993 of accounting for retirement benefits using SFAS
No. 106 was to increase expenses by $211,000, net of federal income taxes.
The Company's postretirement health care plan is not funded. The accumulated
postretirement benefit obligation of the plan at December 31, 1993 included in
other liabilities in the consolidated balance sheet is as follows:
(000s omitted)
Retirees ................................. $2,260
Fully eligible active plan participants .. 1,425
Other active plan participants ........... 4,104
------
$7,789
======
Net postretirement benefit cost for the year ended December 31, 1993 was
$598,000 and consisted of service cost benefits earned of $130,000 and
interest on the accumulated postretirement benefit obligation of $468,000.
The expected health care cost trend rate used as of December 31, 1993 was
16.0% for 1994, and 10% in 1995 decreasing linearly each year until it reaches
6% for 2003 and future years. A one-percentage-point increase in the assumed
health care cost trend rate for each year would increase the accumulated
postretirement benefit obligation as of December 31, 1993 by $1,325,000 and
increase net postretirement health care costs by $145,000 for 1993. The
assumed discount rate used in determining the accumulated postretirement
benefit obligation was 7.0% at December 31, 1993.
-72-
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note L - Industry Segment Information
The Company's insurance operations are organized and reported as three
business segments: Regional Operations, Reinsurance/Special Programs and
Guaranty National Companies. Regional Operations markets workers compensation
insurance through EBI Companies and Nation's Care, Inc. Reinsurance/Special
Programs includes DPIC Companies (which markets the Company's professional
liability insurance), Connecticut Specialty Insurance Group (which directs the
underwriting and sale of specialty insurance programs), SecurityRe Companies
(which underwrites reinsurance), and a 20% interest in Intercargo (which
underwrites international trade). The third segment, Guaranty National
Companies, specializes in writing nonstandard commercial and personal
automobile insurance. The operations of the Guaranty National Companies are
included in revenues and expenses through November 20, 1991, the date that the
Company sold 6,250,000 shares of Guaranty National's common stock in a public
offering, reducing the Company's ownership of Guaranty National to
approximately 49%. Earnings subsequent to November 20, 1991 include the
Company's share of Guaranty National's earnings using the equity method of
accounting. The miscellaneous income and expenses (primarily interest,
general and administrative expenses and other consolidating elimination
entries) of the parent company are reported as a fourth segment. Identifiable
assets of the Regional Operations and Reinsurance/Special Programs segments
are primarily allocated based on the cash flows of these segments, and for
1992 and 1991 have been restated to conform with SFAS No. 113.
-73-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Financial information for the Company's segments for 1993, 1992 and 1991 is shown below:
Earnings (Loss)
from Operations
Before Federal
Gain on Income Taxes,
Sale of Cumulative Effect
Realized Guaranty of Accounting
Net Investment National Changes and
Premiums Investment Gains Common Other Total Extraordinary Identifiable
Earned Income (Losses) Stock Income Revenues Item Assets
-------- ---------- ---------- ---------- -------- -------- ----------------- ------------
(000s omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1993:
Regional Operations ... $266,373 $ 33,760 $ 4,153 $ - $ - $304,286 $ 34,025 $ 758,596
Reinsurance/Special
Programs ............ 351,031 55,500 6,706 - 915 414,152 44,032 1,234,033
Guaranty National
Companies ........... - - - - - - 9,509 92,590
Other ................. - 2,543 (1,381) - 555 1,717 (15,061) 32,235
-------- -------- -------- -------- -------- -------- -------- ----------
Total ............... $617,404 $ 91,803 $ 9,478 $ - $ 1,470 $720,155 $ 72,505 $2,117,454
======== ======== ======== ======== ======== ======== ======== ==========
1992:
Regional Operations.... $268,145 $ 33,182 $ 2,077 $ - $ (193) $303,211 $ 4,227 $ 774,030
Reinsurance/Special
Programs ............ 292,060 48,416 3,027 - 849 344,352 50,384 1,055,679
Guaranty National
Companies ........... - - - - - - 9,994 81,632
Other ................. - 885 (1,437) - 707 155 (17,891) 26,067
-------- -------- -------- -------- -------- -------- -------- ----------
Total ............... $560,205 $ 82,483 $ 3,667 $ - $ 1,363 $647,718 $ 46,714 $1,937,408
======== ======== ======== ======== ======== ======== ======== ==========
1991:
Regional Operations ... $263,478 $ 32,014 $ (517) $ 14,692 $ 1,940 $311,607 $ (9,816) $ 769,267
Reinsurance/Special
Programs ............ 256,619 43,924 (1,161) 19,239 1,014 319,635 50,500 941,906
Guaranty National
Companies ........... 181,289 23,060 1,022 - (204) 205,167 23,684 96,558
Other ................. - 1,208 (353) - 30 885 (18,299) 19,338
-------- -------- -------- -------- -------- -------- -------- ----------
Total ............... $701,386 $100,206 $ (1,009) $ 33,931 $ 2,780 $837,294 $ 46,069 $1,827,069
======== ======== ======== ======== ======== ======== ======== ==========
</TABLE>
<PAGE>
<PAGE>
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note M - Selected Quarterly Financial Data (Unaudited)
<TABLE>
Quarterly results of operations and earnings per common share for 1993 and 1992
are summarized as follows:
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
(000s omitted-except for per share data)
<S> <C> <C> <C> <C>
1993:
Premiums earned ........................ $149,272 $157,404 $151,641 $159,087
Net investment income .................. 21,677 21,170 22,218 26,738
Realized investment gains .............. 4,812 1,755 1,131 1,780
Other income ........................... 303 464 428 275
-------- -------- -------- --------
Total revenues ..................... $176,064 $180,793 $175,418 $187,880
======== ======== ======== ========
Earnings before cumulative effect of
change in accounting principles .. $ 14,328 $ 13,907 $ 12,868 $ 15,885
======== ======== ======== ========
Net earnings ....................... $ 26,153 $ 13,907 $ 12,868 $ 15,885
======== ======== ======== ========
Net earnings per common share -
Primary:
Earnings before cumulative effect of
change in accounting principles .. $ .97 $ .95 $ .88 $ 1.09
======== ======== ======== ========
Net earnings ....................... $ 1.78 $ .95 $ .88 $ 1.09
======== ======== ======== ========
Fully diluted:
Earnings before cumulative effect of
change in accounting principles .. $ .95 $ .95 $ .88 $ 1.09
======== ======== ======== ========
Net earnings ....................... $ 1.75 $ .95 $ .88 $ 1.09
======== ======== ======== ========
1992:
Premiums earned ......................... $143,223 $134,773 $136,218 $145,991
Net investment income ................... 20,702 19,671 20,630 21,480
Realized investment gains ............... 604 827 2,147 89
Other income ............................ 385 166 466 346
-------- -------- -------- --------
Total revenues ...................... $164,914 $155,437 $159,461 $167,906
======== ======== ======== ========
Earnings before extraordinary item .. $ 10,689 $ 9,931 $ 12,824 $ 12,348
======== ======== ======== ========
Net earnings ........................ $ 10,689 $ 9,931 $ 12,718 $ 9,534
======== ======== ======== ========
Net earnings per common share -
Primary:
Earnings before extraordinary item .. $ .89 $ .78 $ 1.04 $ .89
======== ======== ======== ========
Net Earnings ........................ $ .89 $ .78 $ 1.03 $ .67
======== ======== ======== ========
Fully diluted:
Earnings before extraordinary item .. $ .73 $ .66 $ .85 $ .81
======== ======== ======== ========
Net Earnings ........................ $ .73 $ .66 $ .84 $ .62
======== ======== ======== ========
<FN>
The sum of quarterly per common share amounts may not agree with the
corresponding annual amounts due to rounding or antidilution during certain
quarters.
-74-
</TABLE>
<PAGE>
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Pursuant to General Instruction G(3) to this form, the information
required by Part III (Items 10, 11, 12 and 13) hereof is incorporated by
reference from the Company's definitive proxy statement for its Annual Meeting
to be held on June 1, 1994. The Company intends to file the proxy material,
which involves the election of directors, not later than 120 days after the
close of the Company's fiscal year.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
(a) 1 Financial Statements:
The following financial statements are included in
Part II, Item 8.
Page
----
Report of Management................................. 47
Independent Auditors' Report......................... 48
Orion Capital Corporation and Subsidiaries:
December 31, 1993 and 1992
Consolidated Balance Sheet................. 49-50
For the years ended December 31, 1993, 1992 and
1991
Consolidated Statement of Earnings......... 51
Consolidated Statement of Stockholders'
Equity..................................... 52
Consolidated Statement of Cash Flows....... 53-54
Notes to the Consolidated Financial Statements.. 55-74
(a) 2. Financial Statement Schedules:
Selected Quarterly Financial Data - for the years ended
December 31, 1993, 1992 and 1991 - Included in Part II, Item 8.
-75-
<PAGE>
Page
----
Schedule I Consolidated Summary of
Investments - Other than
Investments in Related
Parties - December 31,
1993........................ S-1
III Condensed Financial
Information of Registrant - S-2, S-3,
December 31, 1993, 1992 S-4, S-5,
and 1991.................... S-6
V Supplementary Insurance
Information - December 31,
1993, 1992 and 1991......... S-7
VIII Valuation and Qualifying
Accounts - December 31, 1993,
1992 and 1991............... S-8
IX Short-Term Borrowings -
December 31, 1993, 1992
and 1991.................... S-9
X Supplemental Information
For Property - Casualty
Insurance Underwriters -
December 31, 1993, 1992 and
1991........................ S-10
Schedules other than those listed above are omitted for the
reason that they are not required or are not applicable, or the required
information is shown in the Financial Statements or notes thereto.
(a) 3. Exhibits:
Exhibit 3(i) Restated Certificate of Incorporation of the
Company, as amended on June 3, 1993.
Exhibit 3(ii) By-Laws of the Company, as amended on
May 7, 1993.
Exhibit 4(i) Certificate of Designation, Preferences and
Rights of Series A Junior Participating
Preferred Stock of the Company, dated
March 23, 1989; filed as Exhibit 4(xi) to the
Company's Annual Report on Form 10-K for 1988.
-76-
<PAGE>
Exhibit 4(ii) Specimen certificate representing shares of
the Company's Common Stock (proof of March 27,
1989); filed as Exhibit 4(xii) to the
Company's Annual Report on Form 10-K for 1988.
Exhibit 4(iii) Indenture, dated as of September 8, 1992,
between the Company and the Connecticut
National Bank (now known as Shawmut Bank
Connecticut, National Association), as Trustee
of the Company's 9 1/8% Senior Notes due
September 1, 2002; filed as Exhibit 4(v)
to the Company's Annual Report on Form 10-K
for 1992.
Exhibit 4(iv) Specimen certificate representing the
Company's 9 1/8% Senior Notes; filed as
Exhibit 4(vi) to the Company's Annual
Report on Form 10-K for 1992.
Exhibit 10 (i)* The Company's Deferred Compensation Plan, as
amended (effective July 1, 1992); filed as
Exhibit 10(i) to the Company's Annual Report
on Form 10-K for 1991.
Exhibit 10(ii)* The Company's 1982 Long-Term Performance
Incentive Plan (as amended); filed as Exhibit
10(iii) to the Company's Annual Report on
Form 10-K for 1992.
Exhibit 10(iii)* The Company's 1979 Stock Option Plan, as
amended; filed as Exhibit 10(lx) to the
Company's Annual Report on Form 10-K for 1981.
Exhibit 10(iv)* Employment Agreement between Alan R. Gruber
and the Company, dated as of March 19, 1993;
filed as Exhibit 10(v) to the Company's Annual
Report on Form 10-K for 1992.
Exhibit 10(v)* Employment Agreement, between the Company and
Robert B. Sanborn, dated as of March 19, 1993;
filed as Exhibit 10(vi) to the Company's
Annual Report on Form 10-K for 1992.
Exhibit 10(vi)* Employment Agreement, dated as of August 1,
1987, between the Company and Peter B. Hawes;
filed as Exhibit 10(x) to the Company's Annual
Report on Form 10-K for 1989.
*Management contract or compensatory plan or arrangement.
-77-
<PAGE>
Exhibit 10(vii)* Employent Agreement, dated as of December 1,
1992 between the Company and Larry D. Hollen;
filed as Exhibit 10(viii) to the Company's
Annual Report on Form 10-K for 1992.
Exhibit 10(viii) Lease Agreement between Connecticut UTF, Inc.,
as lessor, and Security Insurance Company of
Hartford ("Security"), as lessee, dated as of
December 19, 1984; filed as Exhibit 10(xxxiii)
to the Company's Annual Report on Form 10-K
for l984.
Exhibit 10(ix) Second Assignment of Lease and Agreement from
Connecticut UTF, Inc. to Security, dated as of
December 19, 1984; filed as Exhibit 10(xxxiv)
to the Company's Annual Report on Form 10-K
for 1984.
Exhibit 10(x) Purchase Money Second Mortgage from
Connecticut UTF, Inc., as mortgagor, to
Security, as mortgagee, dated as of
December 19, 1984; filed as Exhibit 10(xxxvi)
to the Company's Annual Report on Form 10-K
for 1984.
Exhibit 10(xi) Purchase Money Note, in the face amount of
$2,800,000, from Connecticut UTF, Inc. to
Security, dated December 19, 1984; filed as
Exhibit 10(xxxvi) to the Company's Annual
Report on Form 10-K for l984.
Exhibit 10(xii) Guarantee from the Company to Connecticut UTF,
Inc., dated as of December 19, 1984,
guaranteeing the performance of Security under
its lease with Connecticut UTF, Inc.; filed as
Exhibit 10(xxxvii) to the Company's Annual
Report on Form 10-K for 1984.
Exhibit 10(xiii) Form of Indemnification Agreement, dated as of
June 3, 1987, between the Company and each of
its Directors and Executive Officers; filed as
Exhibit 10(xl) to the Company's Annual Report
on Form 10-K for l987.
Exhibit 10(xiv) Rights Agreement, dated as of March 15, 1989,
between the Company and Manufacturers Hanover
Trust Company, Rights Agent; filed as Exhibit
1 to the Company's Form 8-A filed March 28,
1989.
*Management contract or compensatory plan or arrangement.
-78-
<PAGE>
Exhibit 10(xv) First Aggregate Excess of Loss Reinsurance
Contract, effective January 1, 1990, by and
among several of the Company's wholly-owned
insurance subsidiaries and United States
Fidelity and Guaranty Company; filed as
Exhibit 10(xxxvi) to the Company's Annual
Report on Form 10-K for 1990.
Exhibit 10(xvi) Second Aggregate Excess of Loss Reinsurance
Contract, effective January 1, 1990, by and
among several of the Company's wholly-owned
insurance subsidiaries and Helmsman
Insurance Company, Ltd.; filed as Exhibit
10(xxvii) to the Company's Annual Report on
Form 10-K for 1990.
Exhibit 10(xvii) Specific Excess Reinsurance Agreement,
effective January 1, 1990, by and among
several of the Company's wholly-owned
insurance subsidiaries and Cologne
Reinsurance Company (Dublin) Ltd.; filed
as Exhibit 10(xxiv) to the Company's Annual
Report on Form 10-K for 1990.
Exhibit 10(xviii)* Retirement Plan for Directors of Orion
Capital Corporation, as amended
(May 9, 1990); filed as Exhibit 10(xxviii)
to the Company's Annual Report on Form 10-K
for 1990.
Exhibit 10(xix)* Orion Capital Companies Supplemental Benefits
Plan, adopted in February 1991, filed as
Exhibit 10(xxv) to the Company's Annual Report
on Form 10-K for 1991.
Exhibit 10(xx) Shareholder Agreement, dated as of November 7,
1991 by and among the Company, Guaranty
National Corporation and certain wholly owned
subsidiaries and affiliates filed as Exhibit
10(xxvi) to the Company's Annual Report on
Form 10K for 1991.
*Management contract or compensatory plan or arrangement.
-79-
<PAGE>
<PAGE>
Exhibit 10(xxi) Loan Agreement, dated March 8, 1993, by and
among the Company, the banks signatory thereto
and National Westminster Bank USA, as Agent;
filed as Exhibit 10(xxvi) to the Company's
Annual Report on Form 10-K for 1992.
Exhibit 10(xxii) Letter Agreement, dated September 13, 1993, by
and between the Company and Intercargo
Corporation.
Exhibit 10(xxiii) Agreement, dated September 13, 1993, by and
between the Company and The Harper Group, Inc.
Exhibit 11 Statement re: computation of earnings
per common share.
Exhibit 21 Subsidiaries of the Company.
Exhibit 23 Consents of Deloitte & Touche
Exhibit 28 Information from reports furnished to state
insurance regulatory authorities.
Copies of exhibits may be obtained upon payment of a $.50 per page fee.
Such requests should be made in writing to: Corporate Secretary, Orion Capital
Corporation, 30 Rockefeller Plaza, New York, New York 10112.
(b) Reports on Form 8-K:
None.
(c) Filed exhibits:
See Exhibit Index
(d) Financial statements of non-consolidated subsidiaries:
The Audited Consolidated Financial Statements of
Guaranty National Corporation and subsidiaries,
Consolidated Balance Sheets at December 31, 1993
and 1992, Consolidated Statement of Earnings, Statement
of Changes to Stockholders Equity and Statement
of Cash Flows for the periods ended December 31,
1993, 1992 and 1991, the Related Notes to the
Consolidated Financial Statements and Financial
Statement Schedules are incorporated herein by
reference.
-80-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ORION CAPITAL CORPORATION
By: /s/ Alan R. Gruber March 16, 1994
------------------
Alan R. Gruber Chairman of the Board
(Principal Executive)
and Financial Officer)
By: /s/ Daniel L. Barry March 16, 1994
---------------------
Daniel L. Barry Vice President and
Controller (Principal
Accounting Officer)
-81-
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons (including a
majority of the members of the Board of Directors of the Registrant) in the
capacities and on the dates indicated:
Signature and Title Date
- ---------------------- --------
/s/ Alan R. Gruber March 16, 1994
- -------------------------
Alan R. Gruber
Chairman of the Board
/s/ Bertram J. Cohn March 16, 1994
- -------------------------
Bertram J. Cohn
Director
/s/ John C. Colman March 16, 1994
- -------------------------
John C. Colman
Director
/s/ Peter B. Hawes March 16, 1994
- -------------------------
Peter B. Hawes
Director
/s/ Larry D. Hollen March 16, 1994
------------------------
Larry D. Hollen
Director
/s/ R. H. Jeffrey March 16, 1994
- -------------------------
Robert H. Jeffrey
Director
/s/ Warren R. Lyons March 16, 1994
- ------------------------
Warren R. Lyons
Director
/s/ James K. McWilliams March 16, 1994
- -------------------------
James K. McWilliams
Director
-82-
<PAGE>
Signature and Title Date
- ---------------------- --------
/s/ R. W. Moore March 16, 1994
- ----------------------
Ronald W. Moore
Director
/s/ Donald Reich March 16, 1994
- ----------------------
Donald Reich
Director
/s/ Robert B. Sanborn March 16, 1994
- ------------------------
Robert B. Sanborn
Director
/s/ William J. Shepherd March 16, 1994
- --------------------------
William J. Shepherd
Director
/s/ John R. Thorne March 16, 1994
- --------------------------
John R. Thorne
Director
/s/ Roger Ware March 16, 1994
- ----------------------------
Roger B. Ware
Director
-83-
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
ORION CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF INVESTMENTS-OTHER THAN
INVESTMENTS IN RELATED PARTIES
December 31, 1993
(000s omitted)
==============================================================================
Column A Column B Column C Column D
-------- -------- -------- --------
Amount Shown
on Balance
Type of Investment Cost Value Sheet
______________________________________________________________________________
<S> <C> <C> <C>
Fixed maturities held-to-maturity:
Bonds -
United States Government and
government agencies and
authorities ................ $ 140,784 $148,381 $ 140,784
States, municipalities and
political subdivisions .... 123,852 131,178 123,852
Foreign governments ......... 7,270 7,578 7,270
Public utilities ............ 2,438 2,623 2,438
All other corporate bonds ... 43,516 45,281 43,516
Redeemable preferred stocks ... 66,542 67,108 66,542
---------- -------- ----------
Total fixed maturities .... 384,402 402,149 384,402
---------- ======== ----------
Fixed maturities available-for-sale:
Bonds -
United States Government and
government agencies and
authorities ................ 145,511 151,094 151,094
States, municipalities and
political subdivisions .... 153,498 168,542 168,542
Foreign governments ......... 7,381 8,304 8,304
Public utilities ............ 13,805 14,160 14,160
All other corporate bonds ... 185,459 193,968 193,968
Redeemable preferred stocks ... 12,062 12,268 12,268
---------- -------- ----------
Total fixed maturities .... 517,716 548,336 548,336
---------- ======== ----------
Equity securities:
Common stocks -
Public utilities ............ 6,752 7,709 7,709
Banks, trusts and insurance
companies ................. 44,970 64,867 64,867
Industrial, miscellaneous and
all other ................. 59,603 66,446 66,446
Non-redeemable preferred stocks 98,986 103,621 103,621
---------- -------- ----------
Total equity securities ... 210,311 242,643 242,643
---------- ======== ----------
Mortgage loans on real estate ... 1,690 1,690
Other long-term investments ..... 48,992 48,992
Short-term investments .......... 96,473 96,473
---------- ----------
Total investments ......... $1,259,584 $1,322,536
========== ==========
S-1
<PAGE>
<CAPTION>
SCHEDULE III
ORION CAPITAL CORPORATION AND SUBSIDIARIES
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
ORION CAPITAL CORPORATION
BALANCE SHEET
(000s omitted)
ASSETS
December 31,
--------------------
1993 1992
---- ----
<S> <C> <C>
Equity securities at market (cost $439 - 1992) ........ $ - $ 503
Short-term investments ................................ 8,527 3,735
Cash .................................................. 446 26
Notes receivable and other assets ..................... 2,911 3,108
Deferred income taxes ................................. 18,891 17,539
Investment in subsidiaries ............................ 556,240 457,952
Excess of cost over fair value of net assets acquired.. 29,250 30,361
-------- --------
Total assets ........................................ $616,265 $513,224
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Other liabilities ..................................... $ 23,960 $ 16,507
Due to affiliates ..................................... 18,444 26,810
Federal income taxes payable .......................... 19,294 10,052
Notes payable ......................................... 160,372 129,863
-------- --------
Total liabilities ................................... 222,070 183,232
Adjustable rate preferred stock ....................... - 18,705
Stockholders' equity .................................. 394,195 311,287
-------- --------
Total liabilities and stockholders' equity .......... $616,265 $513,224
======== ========
<FN>
See Notes to Condensed Financial Information of Registrant
S-2
<PAGE>
<CAPTION>
SCHEDULE III
ORION CAPITAL CORPORATION AND SUBSIDIARIES
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
ORION CAPITAL CORPORATION
STATEMENT OF EARNINGS
(000s omitted)
Year Ended December 31,
----------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Revenues:
Net investment income ....................... $ 458 $ 325 $ 431
Realized investment gains (losses) .......... (13) 13 -
Other income ................................ 550 700 -
-------- -------- --------
995 1,038 431
-------- -------- --------
Expenses:
Interest .................................... 12,670 12,192 14,027
General and administrative .................. 1,629 3,801 3,240
Amortization of excess of cost over fair
value of net assets acquired .............. 1,111 1,111 1,110
-------- -------- --------
15,410 17,104 18,377
-------- -------- --------
Loss before federal income taxes (benefit),
equity in net earnings of subsidiaries,
cumulative effect of adoption of new
accounting principles and extraordinary
item ........................................ (14,415) (16,066) (17,946)
-------- -------- --------
Federal income taxes (benefit):
Current ..................................... 16,448 6,104 13,758
Deferred .................................... (931) (5,182) (12,357)
-------- -------- --------
15,517 922 1,401
-------- -------- --------
Loss before equity in net earnings of
subsidiaries, cumulative effect of change in
accounting principles and extraordinary item. (29,932) (16,988) (19,347)
Equity in net earnings of subsidiaries ........ 86,920 62,780 64,015
-------- -------- --------
Earnings before cumulative effect of change in
accounting principles and extraordinary item. 56,988 45,792 44,668
Cumulative effect of change in accounting
principles .................................. 11,825 - -
Extraordinary item - loss on early
extinguishment of debt, net of income tax
benefit of $60 .............................. - 2,920 -
-------- -------- --------
Net earnings .................................. $ 68,813 $ 42,872 $ 44,668
======== ======== ========
<FN>
See Notes to Condensed Financial Information of Registrant
S-3
<PAGE>
<CAPTION>
SCHEDULE III
ORION CAPITAL CORPORATION AND SUBSIDIARIES
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
ORION CAPITAL CORPORATION
STATEMENT OF CASH FLOWS
(000s omitted)
Year Ended December 31,
------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Dividends received from subsidiaries ...... $ 25,512 $ 15,645 $ 28,680
Net investment income collected ........... 156 326 357
Federal income taxes received from
subsidiaries ............................ 5,600 6,250 13,615
Interest paid ............................. (11,998) (10,362) (14,610)
Other expenses paid ....................... (2,249) (2,486) (2,096)
Other receipts ............................ 634 7,331 547
-------- -------- --------
Net cash provided by operating activities. 17,655 16,704 26,493
-------- -------- --------
Cash flows from investing activities:
Sales of equity securities ................ 426 188 -
Net sales (purchases) of short-term
investments ............................. (4,793) (1,603) (225)
Investments in subsidiaries ............... (6,983) (3,578) -
Other receipts (payments) ................. (17) 94 (2)
-------- -------- --------
Net cash used in investing activities ... (11,367) (4,899) (227)
-------- -------- --------
Cash flows from financing activities:
Proceeds from issuance of notes payable ... 59,672 127,764 2,000
Proceeds from issuance of common stock .... 286 9,545 65
Repayment of notes payable and debentures.. (29,500) (134,123) (13,315)
Dividends paid to stockholders ............ (11,598) (14,539) (14,529)
Purchase and redemption of adjustable rate
preferred and common stock .............. (23,615) (412) (577)
Other payments ............................ (1,113) (40) -
-------- -------- --------
Net cash used in financing activities ... (5,868) (11,805) (26,356)
-------- -------- --------
Net increase (decrease) in cash ......... 420 - (90)
Cash balance, beginning of year ........... 26 26 116
-------- -------- --------
Cash balance, end of year ................. $ 446 $ 26 $ 26
======== ======== ========
<FN>
See Notes to Condensed Financial Statements of Registrant
S-4
<PAGE>
<CAPTION>
SCHEDULE III
ORION CAPITAL CORPORATION AND SUBSIDIARIES
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
ORION CAPITAL CORPORATION
STATEMENT OF CASH FLOWS - (Continued)
(000s omitted)
Year Ended December 31,
------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Reconciliation of net earnings to net cash
provided by operating activities:
Net earnings ................................ $ 68,813 $ 42,872 $ 44,668
-------- -------- --------
Adjustments:
Cumulative effect of change in accounting
principles .............................. (11,825) - -
Equity in net earnings of subsidiaries .... (86,920) (62,780) (64,015)
Consolidating elimination of subsidiaries
income taxes ............................ 18,962 11,631 24,681
Dividends received from subsidiaries ...... 25,512 15,645 28,680
Depreciation and amortization ............. 1,966 1,603 1,667
Deferred federal income tax benefit ....... (931) (5,182) (12,357)
Realized investment (gains) losses ........ 13 (13) -
Amortization of discount on debt .......... 9 292 255
Extraordinary loss ........................ - 2,920 -
Change in assets and liabilities:
Decrease in notes receivable and other
assets .................................. 470 276 292
Increase in taxes payable and other
liabilities ............................. 9,952 1,361 12,205
Increase (decrease) in due to affiliates .. (8,366) 8,079 (9,583)
-------- -------- --------
Total adjustments and changes ........... (51,158) (26,168) (18,175)
-------- -------- --------
Net cash provided by operating activities.. $ 17,655 $ 16,704 $ 26,493
======== ======== ========
<FN>
Non-cash transaction:
As a result of a change in pooling by the Registrant's insurance
subsidiaries, the Registrant received an extraordinary dividend of
$65,470,000 (principally securities) in 1993 which it simultaneously
contributed to another insurance subsidiary.
See Notes to Condensed Financial Information of Registrant
S-5
</TABLE>
<PAGE>
SCHEDULE III
ORION CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Years Ended December 31, 1993, 1992 and 1991
Note A - Reclassifications
The condensed financial information of Orion Capital Corporation (the
"Registrant") has been reclassified for 1992 and 1991 to conform to the
classifications used in 1993.
Note B - Notes Payable
Notes payable consist of the following:
<TABLE>
<CAPTION>
Estimated
Carrying Value Market Value
----------------- -----------------
1993 1992 1993 1992
---- ---- ---- ----
(000s omitted)
<S> <C> <C> <C> <C>
Borrowings under loan agreement with
various banks (various interest rates). $ 50,500 $ 20,000 $ 50,500 $ 20,000
$110,000,000 face amount, 9 1/8% Senior
Notes, due September 1, 2002 .......... 109,872 109,863 119,053 109,076
-------- -------- -------- --------
$160,372 $129,863 $169,553 $129,076
======== ======== ======== ========
<CAPTION>
The Registrant's debt is scheduled to be repaid as follows:
(000s omitted)
<S> <C>
1994 ................................. $ 8,000
1995 ................................. 10,000
1996 ................................. 12,000
1997 ................................. 12,000
1998 ................................. 8,500
2002 ................................. 110,000
--------
$160,500
Less unamortized discount ............ 128
--------
$160,372
========
</TABLE>
Note C - Expense Reimbursement and Management Fees
During 1991 through 1993, the Registrant was reimbursed for payroll,
office rental and other expenses incurred by it to support the operations of
its insurance subsidiaries. This reimbursement of $5,230,000, $4,500,000 and
$4,078,000 in 1993, 1992 and 1991, respectively, is accounted for as a
reduction of general and administrative expenses. The Company received an
investment management fee from Guaranty National of $550,000 in 1993 and
$700,000 in 1992.
Note D - Sale of Guaranty National Common Stock
The equity in net earnings of subsidiaries for 1991 reflects the impact
of the sale of the common stock of Guaranty National by the Company's
insurance subsidiaries which resulted in a net gain of $33,931,000.
S-6
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE V
ORION CAPITAL CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INSURANCE INFORMATION
(000s omitted)
- -----------------------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F Column G Column H Column I Column J Column J Column K
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Reserve
For Unpaid Dividends Amortization
Deferred Losses Payable Losses and of Deferred Policy-
Policy and Loss to Net Loss Policy Other holders'
Acquisition Adjustment Unearned Policy- Premiums Investment Adjustment Acquisition Insurance Dividends Premiums
Segment Costs Expenses Premiums Holders Earned Income Expenses Costs Expenses Expenses Written
(a) (a) (b)
___________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1993:
Regional Operations $19,326 $ 474,903 $ 67,310 $10,581 $266,373 $ 33,760 $191,826 $ 59,596 $ 8,144 $ 9,232 $265,082
Reinsurance/
Special Programs. 38,196 665,500 192,049 1,942 351,031 55,500 267,306 88,844 9,237 3,281 370,504
Other ............. - - - - - 2,543 - - - - -
------- ---------- -------- ------- -------- -------- -------- -------- ------- ------- --------
$57,522 $1,140,403 $259,359 $12,523 $617,404 $ 91,803 $459,132 $148,440 $17,381 $12,513 $635,586
======= ========== ======== ======= ======== ======== ======== ======== ======= ======= ========
1992:
Regional Operations $21,481 $ 510,836 $ 67,791 $ 9,919 $268,145 $ 33,182 $214,692 $ 62,704 $10,595 $ 9,366 $269,550
Reinsurance/
Special Programs. 34,653 570,560 164,525 3,241 292,060 48,416 209,340 72,966 6,563 4,192 297,880
Other ............. - - - - - 885 - - - - -
------- ---------- -------- ------- -------- -------- -------- -------- ------- ------- --------
$56,134 $1,081,396 $232,316 $13,160 $560,205 $ 82,483 $424,032 $135,670 $17,158 $13,558 $567,430
======= ========== ======== ======= ======== ======== ======== ======== ======= ======= ========
1991:
Regional Operations $263,478 $ 32,014 $225,369 $ 67,500 $12,534 $12,738 $272,758
Reinsurance/
Special Programs. 256,619 43,924 189,628 63,782 10,378 3,722 280,081
Guaranty National
Companies ....... 181,289 23,060 123,418 52,491 5,450 - 181,226
Other ............. - 1,208 - - - - -
-------- -------- -------- -------- ------- ------- --------
$701,386 $100,206 $538,415 $183,773 $28,362 $16,460 $734,065
======== ======== ======== ======== ======= ======= ========
<FN>
(a) Balances for 1992 have been restated to reflect the adoption of SFAS No. 113, which requires reinsurance recoverables
to be reported as assets rather than offsetting liabilities.
(b) Net investment income for Regional Operations and Reinsurance/Special Programs is allocated on the basis of cash flow.
S-7
/TABLE
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE VIII
ORION CAPITAL CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
(000s omitted)
===============================================================================
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Additions
----------------------
(1) (2)
Balance at Charged to Charged to Balance at
Beginning of Costs and Other Deductions End of
Description Period Expenses Accounts (a) Period
_______________________________________________________________________________
<S> <C> <C> <C> <C> <C>
1993:
Allowance for
doubtful accounts-
Accounts and notes
receivable $1,959 $2,337 $ - $2,437 $1,859
====== ====== ====== ====== ======
1992:
Allowance for
doubtful accounts-
Accounts and notes
receivable $2,636 $2,327 $ - $3,004 $1,959
====== ====== ====== ====== ======
1991:
Allowance for
doubtful accounts-
Accounts and notes
receivable $3,227 $2,293 $ - $2,884(b) $2,636
====== ====== ====== ====== ======
<FN>
(a) Accounts written off
(b) Includes $336 deducted in the deconsolidation of Guaranty National
S-8
<PAGE>
<CAPTION>
SCHEDULE IX
ORION CAPITAL CORPORATION AND SUBSIDIARIES
SHORT-TERM BORROWINGS
(000s omitted-except for percentages)
=========================================================================================
Column A Column B Column C Column D Column E Column F
-------- -------- -------- -------- -------- --------
Maximum Average Weighted
Weighted Amount Amount Average
Category of Aggregate Average Outstanding Outstanding Interest Rate
Short-Term Balance at Interest During the During the During the
Borrowings End of Period Rate Period Period Period
_________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
1993:
Notes payable to
banks ........ $ - -% $ - $ - -%
======= ===== ======= ======= ====
1992:
Notes payable to
banks ........ $ - -% $10,875 $ 3,320 5.72%
======= ===== ======= ======= ====
1991:
Notes payable to
banks ........ $10,875 6.45% $14,500 $13,740 7.74%
======= ===== ======= ======= ====
</TABLE>
S-9
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE X
ORION CAPITAL CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION FOR PROPERTY-CASUALTY INSURANCE UNDERWRITERS
(000s omitted)
===================================================================================================================================
Column A Column B Column C Column D Column E Column F Column G Column H Column I Column J Column K
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Reserve
for Losses and Loss
Unpaid Adjustment Expenses Amortization Paid
Deferred Losses Discount Incurred Related to of Deferred Losses
Policy and Loss Deducted Net (1) (2) Policy and Loss
Affiliation with Acquisition Adjustment in Column Unearned Premiums Investment Current Prior Acquisition Adjustment Premiums
Registrant Costs Expenses (C) Premiums Earned Income Year Year Costs Expenses Written
(a) (b) (a)
___________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1993:
Consolidated
property and
casualty entities $ 57,522 $1,140,403 $ 4,100 $259,359 $617,404 $ 89,260 $434,840 $ 24,292 $148,440 $374,625 $635,586
======== ========== ======== ======== ======== ======== ======== ======== ======== ======== ========
1992:
Consolidated
property and
casualty entities $ 56,134 $1,081,396 $ 4,100 $232,316 $560,205 $ 81,598 $397,551 $ 26,481 $135,670 $346,201 $567,430
======== ========== ======== ======== ======== ======== ======== ======== ======== ======== ========
1991:
Consolidated
property and
casualty entities $701,386 $ 98,998 $474,925 $ 63,490 $183,773 $461,888 $734,065
======== ======== ======== ======== ======== ======== ========
<FN>
(a) Balances for 1992 have been restated to reflect the adoption of SFAS No. 113, which requires reinsurance recoverables to be
recorded as assets rather than offsetting liabilities.
(b) Discount deducted in Column C is computed using a statutory interest rate of 3.5% at December 31, 1993 and 1992 for
certain workers compensation losses.
Amounts for Guaranty National are consolidated through November 20, 1991. At that date, Guaranty National became a
separate registrant and files its own Form 10-K and related schedules.
S-10
/TABLE
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit 3(i) Restated Certificate of Incorporation
of the Company, as amended on June 3, 1993.
Exhibit 3(ii) By-Laws of the Company, as amended on
May 7, 1993.
Exhibit 10(xxii) Letter Agreement, dated September 13, 1993,
by and between the Company and Intercargo
Corporation.
Exhibit 10(xxiii) Agreement, dated September 13, 1993, by and
between the Company and The Harper Group, Inc.
Exhibit 11 Statement re: computation of earnings
per common share.
Exhibit 21 Subsidiaries of the Company.
Exhibit 23 Consents of Deloitte & Touche.
Exhibit 28 Information from reports furnished to state
insurance regulatory authorities.
<PAGE> Exhibit 3(i)
RESTATED CERTIFICATE OF INCORPORATION
OF
ORION CAPITAL CORPORATION, a corporation organized and existing
under the laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is Orion Capital Corporation,
and the name under which the corporation was originally incorporated
is Tongor Corporation of America. The date of filing of its original
Certificate of Incorporation with the Secretary of State was
September 2, 1960.
2. This Restated Certificate of Incorporation only restates
and integrates and does not further amend the provisions of the
Certificate of Incorporation of this corporation as heretofore
amended or supplemented and there is no discrepancy between those
provisions and the provisions of this Restated Certificate of
Incorporation.
3. The text of the Certificate of Incorporation as amended
or supplemented heretofore is hereby restated without further
amendments or changes to read as herein set forth in full:
I.
NAME
The name of the corporation is ORION CAPITAL CORPORATION.
II.
REGISTERED OFFICE AND AGENT
The address of the corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle. The name and address of<PAGE>
<PAGE>
the corporation's registered agent is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801.
III.
BUSINESS OR PURPOSES
The nature of the business or purposes to be conducted or
promoted by the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of Delaware, as amended.
IV.
STOCK
The total number of shares of all classes which the corporation
has authority to issue is Thirty-five Million (35,000,000) shares of
which Thirty Million (30,000,000) shares shall be Common Stock, with
a par value of One Dollar ($1.00) per share, and Five Million
(5,000,000) shares shall be Preferred Stock, with a par value of One
Dollar ($1.00) per share.
The designations and the powers, preferences, and rights, and
the qualifications, limitations or restrictions of the shares of each
class of stock are as follows:
PREFERRED STOCK
The Preferred Stock may be issued from time to time by the Board
of Directors as shares of one or more series. Subject to the
provisions hereof and the limitations prescribed by law, the Board of
Directors is expressly authorized, prior to issuance, by adopting
resolutions providing for the issue of, or providing for a change in
the number of, shares of any particular series and, if and to the
extent from time to time required by law, by filing a certificate
pursuant to the General Corporation Law (or other law hereafter in
effect relating to the same or substantially similar subject matter),
to establish or change the number of shares to be included in each
such series and to fix the designation and relative powers,
preferences and rights and the qualifications and limitations or
restrictions thereof relating to the shares of each such series. The
authority of the Board of Directors with respect to each series shall
include, but not be limited to, determination of the following:
(a) the distinctive serial designation of such series
and the number of shares constituting such series (provided that the
aggregate number of shares constituting all series of Preferred Stock
shall not exceed Five Million (5,000,000));
- 2 -
<PAGE>
<PAGE>
(b) the annual dividend rate on shares of such series,
whether dividends shall be cumulative and, if so, from which date or
dates;
(c) whether the shares of such series shall be redeemable
and, if so, the terms and conditions of such redemption, including
the date or dates upon and after which such shares shall be
redeemable, and the amount per share payable in case of redemption,
which amount may vary under different conditions and at different
redemption dates;
(d) the obligation, if any, of the corporation to retire
shares of such series pursuant to a sinking fund;
(e) whether shares of such series shall be convertible
into, or exhangeable for, shares of stock of any other class or
classes and, if so, the terms and conditions of such conversion or
exchange, including the price or prices or the rate or rates of
conversion or exchange and the terms of adjustment, if any;
(f) whether the shares of such series shall have voting
rights, in addition to the voting rights provided by law, and, if so,
the terms of such voting rights;
(g) the rights of the shares of such series in the event
of voluntary or involuntary liquidation, dissolution or winding up of
the corporation; and
(h) any other relative rights, powers, preferences,
qualifications, limitations or restrictions thereof relating to such
series.
The shares of Preferred Stock of any one series shall be
identical with each other in all respects except as to the dates from
and after which dividends thereon shall cumulate, if cumulative.
The number of authorized shares of Preferred Stock may be
increased or decreased by the affirmative vote of the holders of a
majority of the stock of the corporation entitled to vote without the
separate vote of holders of Preferred Stock as a class.
COMMON STOCK
Subject to all of the rights of the Preferred Stock and except
as may be expressly provided with respect to the Preferred Stock
herein, by law or by the Board of Directors pursuant to this Article
IV:
(a) dividends may be declared and paid or set apart for
payment upon the Common Stock out of any assets or funds of the
corporation legally available for the payment of dividends;
- 3 -
<PAGE>
(b) the holders of Common Stock shall have the exclusive
right to vote for the election of directors and on all other matters
requiring stockholder action, each share being entitled to one vote;
and
(c) upon the voluntary or involuntary liquidation,
dissolution or winding up of the corporation, the net assets of the
corporation shall be distributed pro rata to the holders of the
Common Stock in accordance with their respective rights and
interests.
V.
NUMBER OF DIRECTORS
The number of directors of this corporation shall be fixed and
may be altered from time to time as may be provided in the By-Laws.
In the event of any increase in the number of directors, the
additional directors may be elected by a majority of the directors
then in office, to hold office until the next annual meeting of the
stockholders and until their successors are elected and qualified.
In the event of vacancies in the Board of Directors, a majority of
the remaining members of the Board may elect directors to fill such
vacancies.
VI.
POWERS OF BOARD OF DIRECTORS
All of the powers of this corporation, insofar as the same may
be lawfully vested by this Restated Certificate of Incorporation in
the Board of Directors of this corporation, are hereby conferred upon
the Board of Directors of this corporation. In furtherance and not
in limitation of that power the Board of Directors is authorized to
make, adopt, alter, amend and repeal from time to time the By-Laws of
the corporation, by vote of a majority of the whole Board at any
meeting thereof provided that regardless of whether such meeting be
special or regular, notice of such proposed alteration, amendment,
repeal or adoption of new By-Laws shall be given in the manner and
within the time specified for notice of special meetings of the Board
or by written consent without a meeting signed by all directors. The
power of the Board of Directors to adopt, amend or repeal By-Laws is
subject to the right of Stockholders entitled to vote with respect
thereto to alter and repeal By-Laws made by the Board of Directors.
VII.
LIMITATIONS ON DIRECTORS' PERSONAL LIABILITY; INDEMNIFICATION
No Director of the corporation shall be personally liable
to the corporation or its stockholders for monetary damages for
- 4 -
<PAGE>
breach of fiduciary duty as a director, except to the extent that the
Delaware General Corporation Law, as the same exists or may hereafter
be amended, shall provide that such liability may not be eliminated
or limited.
Each director, officer, employee or agent of the
corporation subsequent to March 30, 1987 shall be indemnified by the
corporation to the fullest extent permitted by the Delaware General
Corporation Law, as the same may be amended from time to time.
VIII.
ELECTIONS OF DIRECTORS
Elections of directors of the corporation need not be by written
ballot unless the By-Laws of the corporation so provide.
IX.
DESIGNATION, PREFERENCES AND RIGHTS OF
SERIES A JUNIOR PARTICIPATING
PREFERRED STOCK
Section 1. Designation, Amount and Par Value. The shares
of such series shall be designated as "Series A Junior Participating
Preferred Stock," the number of shares constituting such series shall
be 150,000 and the par value of such series shall be $1.00 per share.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking
prior and superior to the shares of Series A Junior Participating
Preferred Stock with respect to dividends, the holders of shares of
Series A Junior Participating Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable
in cash on the first business day of January, April, July and October
in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
share of Series A Junior Participating Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater of (a)
$.75 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, par value $1.00 per share,
- 5 -
<PAGE>
of the Corporation (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of
any share or fraction of a share of Series A Junior Participating
Preferred Stock. In the event the corporation shall at any time
after March 15, 1989 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the amount to which holders of shares of Series A
Junior Participating Preferred Stock were entitled immediately prior
to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such
event.
(B) The corporation shall declare a dividend or
distribution on the Series A Junior Participating Preferred Stock as
provided in paragraph (A) above immediately after it declares a
dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $.75
per share on the Series A Junior Participating Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock
from the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series A Junior Participating Preferred
Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination
of holders of shares of Series A Junior Participating Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Series A Junior
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<PAGE>
pating Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series
A Junior Participating Preferred Stock shall have the following
voting rights:
(A) Except as provided in paragraph C of this Section 3 and
subject to the provision for adjustment hereinafter set forth, each
share of Series A Junior Participating Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a vote of
the stockholders of the corporation. In the event the corporation
shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the number of votes per share to which holders of
shares of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Junior Participating Preferred Stock
and the holders of shares of Common Stock shall vote together as one
class on all matters submitted to a vote of stockholders of the
corporation.
(C) (i) Notwithstanding the provisions of paragraphs A and B
of this Section 3, if, on the date used to determine stockholders of
record for any meeting of stockholders for the election of directors,
a default in preference dividends (as defined in subparagraph (v)
below) on the Series A Junior Participating Preferred Stock shall
exist, the holders of the Series A Junior Participating Preferred
Stock shall have the right, voting as a class as described in
subparagraph (ii) below, to elect two directors (in addition to the
directors elected by holders of Common Stock of the Corporation).
Such right may be exercised at any meeting of stockholders for the
election of directors until all such accrued dividends (referred to
above) shall have been paid in full.
(ii) The right of the holders of Series A Junior
Participating Preferred Stock to elect two directors, as described
above, shall be exercised as a class concurrently with the rights of
holders of any other series of Preferred Stock upon which voting
rights to elect such directors have been conferred and are then
exercisable. The Series A Junior Participating Preferred Stock and
any additional series of Preferred Stock which the corporation may
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<PAGE>
issue and which may provide for the right to vote with the foregoing
series of Preferred Stock are collectively referred to herein as
"Voting Preferred Stock."
(iii) Each director elected by the holders of shares
of Voting Preferred Stock shall be referred to herein as a "Preferred
Director." A Preferred Director so elected shall continue to serve
as such director for a term of one year, except that upon any
termination of the right of all of such holders to vote as a class
for Preferred Directors, the term of office of such directors shall
terminate. Any Preferred Director may be removed by, and shall not
be removed except by, the vote of the holders of record of a majority
of the outstanding shares of Voting Preferred Stock then entitled to
vote for the election of directors, present (in person or by proxy)
and voting together as a single class (i) at a meeting of the
stockholders, or (ii) at a meeting of the holders of shares of such
Voting Preferred Stock, called for the purpose in accordance with the
By-laws of the corporation, or (iii) by written consent signed by the
holders of a majority of the outstanding shares of Voting Preferred
Stock then entitled to vote for the election of directors, taken
together as a single class.
(iv) So long as a default in any preference dividends
on the Series A Junior Participating Preferred Stock shall exist or
the holders of any other series of Voting Preferred Stock shall be
entitled to elect Preferred Directors (i) any vacancy in the office
of a Preferred Director may be filled (except as provided in the
following clause (ii) by an instrument in writing signed by the
remaining Preferred Director and filed with the corporation and (iii)
in the case of the removal of any Preferred Director, the vacancy may
be filled by the vote or written consent of the holders of a majority
of the outstanding shares of Voting Preferred Stock then entitled to
vote for the election of directors, present (in person or by proxy)
and voting together as a single class, at such time and in such
manner as the removal shall be effected. Each director appointed as
aforesaid by the remaining Preferred Director shall be deemed, for
all purposes hereof, to be a Preferred Director. Whenever (i) no
default in preference dividends on the Series A Junior Participating
Preferred Stock shall exist and (ii) the holders of other series of
Voting Preferred Stock shall no longer be entitled to elect such
Preferred Directors, then the number of directors constituting the
Board of Directors of the corporation shall be reduced by two.
(v) For purposes hereof, a "default in preference
dividends" on the Series A Junior Participating Preferred Stock shall
be deemed to have occurred whenever the amount of accrued and unpaid
dividends on the Series A Junior Participating Preferred Stock shall
be equivalent to six full quarterly dividends or more (whether or not
consecutive), and, having so occurred, such default shall be deemed
to exist thereafter until, but only until, all accrued dividends on
all shares of the Series A Junior Participating Preferred Stock then
outstanding shall have been paid through the last Quarterly Dividend
Payment Date.
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<PAGE>
(D) Except as set forth herein, holders of Series A
Junior Participating Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends
or distributions payable on the Series A Junior Participating
Preferred Stock as provided in Section 2 are in arrears, thereafter
and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Junior Participating Preferred
Stock outstanding shall have been paid in full, the corporation shall
not
(i) declare or pay dividends on, make any
other distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on, or make
any other distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Junior Participating Preferred Stock, except
dividends paid ratably on the Series A Junior Participating Preferred
Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise
acquire for consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Junior Participating Preferred Stock, provided
that the corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any
stock of the corporation ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock;
(iv) purchase or otherwise acquire for
consideration any shares of Series A Junior Participating Preferred
Stock, or any shares of stock ranking on a parity with the Series A
Junior Participating Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such terms
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<PAGE>
as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The corporation shall not permit any subsidiary
of the corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the corporation could,
under paragraph (A) of this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of
Series A Junior Participating Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired
and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the
Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Subject to the prior and superior rights of holders of any shares
of any series of Preferred Stock ranking prior and superior to the
shares of Series A Junior Participating Preferred Stock with respect
to liquidation, dissolution or winding up rights, upon any
liquidation (voluntary or otherwise), dissolution or winding up of
the corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of
shares of Series A Junior Participating Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the
date of such payment (the "Series A Liquidation Preference").
Following the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the holders
of shares of Series A Junior Participating Preferred Stock unless,
prior thereto, the holders of shares of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series A Liquidation Preference
by (ii) 100 (as appropriately adjusted as set forth in subparagraph C
below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in
clause (ii), the "Adjustment Number"). Following the payment of the
full amount of the Series A Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series A Junior
Participating Preferred Stock and Common Stock, respectively, holders
of Series A Junior Participating Preferred Stock and holders of
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<PAGE>
shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the
Adjustment Number to 1 with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A
Liquidation Preference and the liquidation preferences of all other
series of preferred stock, if any, which rank on a parity with the
Series A Junior Participating Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In
the event, however, that there are not sufficient assets available to
permit payment in full of the Common Adjustment, then such remaining
assets shall be distributed ratably to the holders of Common Stock.
(C) In the event the corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the
corporation shall enter into any consolidation, merger, combination
or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or
any other property, then in any such case the shares of Series A
Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100 times
the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the
event the corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series A Junior
Participating Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
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<PAGE>
Section 8. No Redemption. The shares of Series A
Junior Participating Preferred Stock shall not be redeemable.
Section 9. Ranking.The Series A Junior Participating
Preferred Stock shall rank junior to all other series of the
corporation's Preferred Stock as to the payment of dividends and the
distribution of assets, unless the terms of any such series shall
provide otherwise.
Section 10. Amendment.The Restated Certificate of
Incorporation of the Corporation shall not be further amended in any
manner which would materially alter or change the powers, preferences
or special rights of the Series A Junior Participating Preferred
Stock so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding shares of Series
A Junior Participating Preferred Stock, voting separately as a class.
4. This Restated Certificate of Incorporation was duly adopted by
the Board of Directors in accordance with Section 245 of the General
Corporation Law of the State of Delaware.
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<PAGE>
IN WITNESS WHEREOF, said ORION CAPITAL CORPORATION has caused
this Certificate to be signed by Alan R. Gruber, its Chairman and
Chief Executive Officer, and attested by Michael P. Maloney, its
Secretary, this 3rd day of June, 1993.
ORION CAPITAL CORPORATION
By /s/ Alan R. Gruber
---------------------
Alan R. Gruber
Chairman and Chief
Executive Officer
ATTEST:
/s/ Michael P. Maloney
- ------------------------
Michael P. Maloney
Secretary
- 13 -
<PAGE> Exhibit 3(ii)
BY-LAWS
OF
ORION CAPITAL CORPORATION
(a Delaware corporation)
ARTICLE I.
Offices
Section 1. REGISTERED OFFICE. The registered office of the
Corporation shall be in the City of Wilmington, County of New Cas-
tle, State of Delaware.
Section 2. OTHER OFFICES. The Corporation may also have of-
fices at such other places both within and without the State of
Delaware as the Board of Directors may from time to time determine
or the business of the Corporation may require.
ARTICLE II.
Meetings of Stockholders
Section 1. PLACE OF MEETINGS. Meetings of stockholders shall
be held at such time and such place, within or without the State of
Delaware, as shall be stated in the notice of the meeting or a duly
executed waiver of notice thereof.
Section 2. ANNUAL MEETINGS. The annual meeting of stockhold-
ers shall be held at such date and time as shall be designated from
time to time by the Board of Directors and stated in the notice of
the meeting, for the purpose of electing a Board of Directors, and
for the transaction of such other business as may properly be
brought before the meeting.
Section 3. SPECIAL MEETINGS. Special meetings of the stock-
holders, for any purpose or purposes, unless otherwise prescribed
by statute or by the Restated Certificate of Incorporation, may be
called by the Chairman of the Board and shall be called by the
Chairman of the Board or Secretary at the request in writing of a
majority of the Board of Directors, or at the request in writing of
stockholders owning a majority in amount of the entire capital
stock of the Corporation issued and outstanding and entitled to
vote. Such request shall state the purpose or purposes of the
proposed meeting, and the business transacted at any such special
meeting of stockholders shall be limited to the purposes set forth
in the notice.
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<PAGE>
Section 4. NOMINATIONS; INTRODUCTION OF BUSINESS AT A
MEETING OF STOCKHOLDERS.
(a) Only persons who are nominated in accordance with the
procedures set forth in these By-Laws shall be eligible to serve as
directors. Nominations of persons for election to the Board of
Directors of the Corporation may be made at a meeting of
stockholders (i) by or at the direction of the Board of Directors
or (ii) by any stockholder of the Corporation who is a stockholder
of record at the time of giving of notice provided for in this
Section 4(a), who shall be entitled to vote for the election of
directors at the meeting and who complies with the notice
procedures set forth in this Section 4(a). Such nominations, other
than those made by or at the direction of the Board of Directors,
shall be made pursuant to timely notice in writing to the Secretary
of the Corporation. To be timely, a stockholder's notice shall be
delivered to or mailed and received at the principal executive
offices of the Corporation not less than sixty (60) days nor more
than ninety (90) days prior to the meeting, regardless of any
postponement, deferral or adjournment of that meeting to a later
date; provided, however, that in the event that less than seventy
(70) days' notice or public disclosure of the date of the meeting
is given or made to stockholders, notice by the stockholder to be
timely must be so received not later than the close of business on
the 10th day following the day on which such notice of the date of
the meeting or such public disclosure was made. Such stockholder's
notice shall contain the written consent of each proposed nominee
to serve as a director if so elected and shall set forth (i) as to
each person whom the stockholder proposes to nominate for election
or reelection as a director and as to each person, acting alone or
in conjunction with one or more other persons as a partnership,
limited partnership, syndicate or other group, who participates or
is expected to participate in making such nomination or in
organizing, directing or financing such nomination or solicitation
of proxies to vote for the nominee (w) the name, age, residence
address, and business address of each proposed nominee and of each
such person; (x) the principal occupation or employment, and the
name, type of business and address of the corporation or other
organization in which such employment is carried on, of each
proposed nominee and of each such person; (y) the amount of stock
of the Corporation owned beneficially, either directly or
indirectly, by each proposed nominee and each such person; and (z)
a description of any arrangement or understanding of each proposed
nominee and of each such person with each other or any other person
regarding future employment or any future transaction to which the
Corporation will or may be a party, and (ii) as to the stockholder
giving the notice (x) the name and address, as they appear on the
Corporation's books, of such stockholder and (y) the class and
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<PAGE>
number of shares of the Corporation which are beneficially owned by
such stockholder. At the request of the Board of Directors, any
person nominated by the Board of Directors for election as a
director shall furnish to the Secretary of the Corporation that
information required to be set forth in a stockholder's notice of
nomination which pertains to the nominee. Subject to the rights of
holders of preferred stock, no person shall be eligible to serve as
a director of the Corporation unless nominated in accordance with
the procedures set forth in the By-Laws. The chairman of the
meeting shall, if the facts warrant, determine and declare to the
meeting that a nomination was not made in accordance with the
procedures prescribed by the By-Laws, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded. Notwithstanding the foregoing
provisions of this Section 4(a), a stockholder shall also comply
with all applicable requirements of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder with
respect to the matters set forth in this Section.
(b) At an annual meeting of the stockholders, only such
business shall be conducted as shall have been brought before the
annual meeting (i) by or at the direction of the Board of Directors
or (ii) by any stockholder of the Corporation who is a stockholder
of record at the time of giving of notice provided for in this
Section 4(b), who shall be entitled to vote at such annual meeting
and who complies with the notice of procedures set forth in this
Section 4(b). For business to be properly brought before an annual
meeting by a stockholder, the stockholder must have given timely
notice thereof in writing to the Secretary of the Corporation. To
be timely, a stockholder's notice must be delivered to or mailed
and received at the principal executive offices of the Corporation
not less than sixty (60) days nor more than ninety (90) days prior
to the annual meeting, regardless of any postponement, deferral or
adjournment of that meeting to a later date; provided, however,
that in the event that less than seventy (70) days' notice or prior
public disclosure of the date of the annual meeting is given or
made to stockholders, notice by the stockholder to be timely must
be received no later than the close of business on the 10th day
following the day on which such notice of the date of the annual
meeting was mailed or such public disclosure was made. A
stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting
(i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and address, as they
appear on the Corporation's books, of the stockholder proposing
such business, (iii) the class and number of shares of the
Corporation which are beneficially owned by the stockholder and
(iv) any material interest of the stockholder in such business.
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<PAGE>
Notwithstanding anything in the By-Laws to the contrary, no
business shall be conducted at the stockholder meeting except in
accordance with the procedures set forth in this section 4(b). The
chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that business was not properly brought
before the meeting and in accordance with the provisions of the By-
Laws, and if he should so determine, he shall so declare to the
meeting and any such business not properly brought before the
meeting shall not be transacted. Notwithstanding the foregoing
provisions of this Section 4(b), a stockholder shall also comply
with all applicable requirements of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder with
respect to the matters set forth in this Section.
Section 5. STOCKHOLDER LISTS. The officer who has charge of
the stock ledger of the Corporation shall prepare and make, at
least ten (10) days before every meeting of stockholders, a com-
plete list of the stockholders entitled to vote at the meeting,
arranged in alphabetical order, showing the address of and the num-
ber of shares registered in the name of each stockholder. Such
list shall be open to examination of any stockholder, for any pur-
pose germane to the meeting, during ordinary business hours, for a
period not less than ten (10) 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 be produced and kept at the time and place of election
during the whole time thereof and may be inspected by any stock-
holder who is present.
Section 6. QUORUM AND ADJOURNMENT. The holders of a majority
of the stock issued and outstanding and entitled to vote thereat,
present in person or represented by proxy, shall constitute a quo-
rum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the Restated
Certificate of Incorporation. If, however, such quorum shall not
be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or repre-
sented by proxy, shall have power to adjourn the meeting from time
to time, without notice other than announcement at the meeting,
meeting, at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the
meeting as originally noticed. If the adjournment is for more than
thirty (30) days, or if after the adjournment a new date is set for
the determination of the stockholders entitled to vote at the ad-
journed meeting, a notice of the adjourned meeting shall be given
to each stockholder of record entitled to vote at the meeting.
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<PAGE>
Section 7. Voting.When a quorum is present at any meeting,
in all matters other than the election of Directors, the vote of
the holders of a majority of the stock having voting power present
in person or represented by proxy, and entitled to vote, shall
decide any question brought before such meeting, or unless the
question is one upon which by express provision of statute or the
Restated Certificate of Incorporation a different vote is required,
in which case such express provision shall govern and control the
decision of such question. Directors shall be elected by a
plurality of the votes of the shares present in person or
represented by proxy at such meeting and entitled to vote on the
election of directors.
Section 8. VOTING AND PROXIES. At all meetings of
stockholders, every stockholder having the right to vote shall be
entitled to vote in person, or by proxy appointed by an instrument
in writing subscribed by such stockholder and bearing a date not
more than one (1) year prior to said meeting, unless said
instrument shall provide for a longer period. Each stockholder
entitled to vote at such meeting shall have one vote for each share
of stock entitled to vote and registered in his name on the books
of the Corporation. Except as provided by statute, the vote at any
meeting of stockholders need not be by ballot unless so directed by
the chairman of the meeting.
Section 9. STOCK LEDGER. The original or duplicate stock
ledger shall be the only evidence as to who are the stockholders
entitled to examine the list required under Article II, Section 5
of these By-Laws or the books of the Corporation, or to vote in
person or by proxy at any meeting of the stockholders.
Section 10. NOTICE. Written or printed notice of each
meeting of the stockholders, whether annual or special, stating the
place, date and hour of the meeting, and, in the case of a special
meeting, the purpose or purposes thereof, shall be given to each
stockholder of record of the Corporation entitled to vote at such
meeting, either personally by mail, not less than ten (10) days or
more than sixty (60) days prior to the meeting.
Section 11. RECORD DATE.
(a) In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board of Directors may
fix a record date, which shall not precede the date such record
date is fixed and shall not be more than sixty (60) days nor less
than ten (10) days before the date of such meeting. If no record
date is fixed, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall
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<PAGE>
be the close of business on the day next preceding the day on which
notice is given. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however, that
the Board of Directors may fix a new record date for the adjourned
meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing
without a meeting, the Board of Directors may fix a record date,
which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of
Directors, and which date shall not be more than ten (10) days
after the date upon which the resolution fixing the record date is
adopted by the Board of Directors. Any stockholder of record
seeking to have the stockholders authorized or take corporate
action by written consent shall, by written notice to the
Secretary, request the Board of Directors to fix a record date.
The Board of Directors shall promptly, but in all events within ten
(10) days after the date on which such a request is received, adopt
a resolution fixing the record date. If no record date has been
fixed by the Board of Directors within ten (10) days of the date on
which such a request is received, the record date for determining
stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board of Directors
is required by applicable law, shall be the first date thereafter
on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation by delivery to
its registered office in the State of Delaware, its principal place
of business, or an officer or agent of the Corporation having
custody of the book in which proceedings of stockholders' meetings
are recorded, to the attention of the Secretary of the Corporation.
Delivery shall be by hand or by certified or registered mail,
return receipt requested. If no record date has been fixed by the
Board of Directors and prior action by the Board of Directors is
required by applicable law, the record date for determining
stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the date on
which the Board of Directors adopts the resolution taking such
prior action.
Section 12. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING.
In the event of the delivery to the Corporation of a written
consent or consents purporting to authorize or take corporate
action and/or related revocations (each such written consent and
any revocation thereof is referred to in this Section 12 as a
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<PAGE>
"Consent"), the Secretary of the Corporation shall provide for the
safekeeping of such Consents and shall as soon as practicable
thereafter conduct such reasonable investigation as he or she deems
necessary or appropriate for the purpose of ascertaining the
validity of such Consents and all matters incident thereto,
including, without limitation, whether the holders of shares having
the requisite voting power to authorize or take the action
specified in the Consents have given consent; provided, however,
that if the corporate action to which the Consents relate is the
removal or election of one or more members of the Board of
Directors, the Secretary of the Corporation shall designate an
independent, qualified inspector with respect to such Consents and
such inspector shall discharge the functions of the Secretary of
the Corporation under this Section 12. If after such investigation
the Secretary or the inspector (as the case may be) shall determine
that any action purportedly taken by such Consents has been validly
taken, that fact shall be certified on the records of the
Corporation kept for the purpose of recording the proceedings of
meetings of the stockholders and the Consents shall be filed with
such records. In conducting the investigation required by this
Section 12, the Secretary or the inspector may, at the expense of
the Corporation, retain to assist them special legal counsel and
any other necessary or appropriate professional advisors, and such
other personnel as they may deem necessary or appropriate.
ARTICLE III.
Directors
Section 1. NUMBER AND QUALIFICATION OF DIRECTORS. The number
of directors which shall constitute the whole Board shall not be
less than five (5) nor more than fourteen (14). The exact number
shall be that number specified from time to time by duly adopted
resolutions of the Board. The directors shall be elected at the
annual meeting of the stockholders, except as provided in Section 2
of this Article III, and each director shall hold office until his
or her successor is duly elected and qualified or until his or her
earlier resignation or removal. No individual may run for election
or reelection to the Board or be appointed a director from and
after the date he or she reaches 72 years of age.
Section 2. VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Va-
cancies caused by death, resignation, removal or otherwise, and
newly created directorships resulting from any increase in the
authorized number of directors may be filled by a majority of the
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directors then in office, though less than a quorum, or by the
stockholders of the Corporation and each director so chosen shall
hold office until the next annual election of directors and until
his or her successor is duly elected and qualified or until his or
her earlier resignation or removal.
Section 3. POWERS. The business of the Corporation shall be
managed by or under the direction of its Board of Directors which
may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by statute or by the Restated
Certificate of Incorporation or by these By-Laws directed or
required to be exercised or done by the stockholders.
Section 4. PLACE OF MEETINGS. The Board of Directors of the
Corporation may hold meetings, both regular and special, within or
without the State of Delaware.
Section 5. ORGANIZATIONAL MEETING. The organizational
meeting of each newly elected Board of Directors shall be held
immediately after the annual meeting of stockholders or at such
time and place as shall be designated by the Chairman of the Board
or as may otherwise be fixed by the vote of the stockholders at the
annual meeting and if such meeting is held immediately after the
annual meeting of stockholders or if a majority of the whole Board
shall be present, no notice of such meeting shall be necessary to
the newly elected directors in order legally to constitute the
meeting provided a quorum shall be present; or they may meet at
such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the Board of Directors
or as shall be specified in a written waiver signed by all of the
directors.
Section 6. REGULAR MEETINGS. Regular meetings of the Board
of Directors may be held without notice at such time and at such
place as shall from time to time be determined by the Board.
Section 7. SPECIAL MEETINGS. Special meetings of the Board
of Directors may, at any time and for any purpose permitted by law,
either be called by the Chairman of the Board or by the Secretary
if the Secretary shall have received written request therefor from
any two directors, which meetings shall be held at the time and
place designated by the person or persons calling the meeting. No-
tice of the time, place and purpose of such meeting shall be given
to the directors by the Secretary, or in case of his or her ab-
sence, refusal or inability to act, by any other officer. Any such
notice may be given by mail, by telegraph, by telephone, by
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personal service or any means thereby as to different directors.
If the notice is by mail, then it shall be deposited in the mail at
least forty-eight hours before the time of the meeting; if by
telegram, by delivery of the message to the telegraph company at
least twelve (12) hours before the time of the meeting; if by
telephone or personal service, at least twelve (12) hours before
the time of the meeting.
Section 8. QUORUM. At all meetings of the Board of
Directors, a majority of the whole Board shall constitute a quorum
for the transaction of business, and the act of a majority of the
directors present at any meeting at which there is a quorum shall
be the act of the Board of Directors, except as may be otherwise
specifically provided by statute or by the Restated Certificate of
Incorporation or by these By-Laws. Any meeting of the Board of
Directors may be adjourned to meet again at a stated time and
place. If a quorum shall not be present at any meeting of the
Board of Directors, a majority of the directors present thereat may
adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 9. ACTION WITHOUT A MEETING. Unless otherwise re-
stricted by the Restated Certificate of Incorporation or these By-
Laws, any action required or permitted to be taken at any meeting
of the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the Board or of such
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.
Section 10. MEETINGS BY CONFERENCE TELEPHONE. Unless
otherwise restricted by the Restated Certificate of Incorporation
or these By-Laws, members of the Board of Directors or any
committee thereof may participate in a meeting of such Board or
committee by means of conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other, and participation
in a meeting in this manner shall constitute presence in person at
such meeting.
Section 11. COMMITTEES. There are hereby established an
Executive Committee, an Audit Committee and a Compensation
Committee, each of which shall have the powers and functions set
forth in the following paragraphs of this Section 11 and such
additional powers as may be delegated to it by the Board of
Directors. The Board of Directors may, by resolution passed by a
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majority of the whole Board, establish one or more additional
standing committees or special committees of the Board of
Directors. Each committee of the Board of Directors shall have
such powers and functions as may be delegated to it by the Board of
Directors, except as limited by the General Corporation Law of the
State of Delaware. The Board of Directors may abolish any
committee established by or pursuant to this Section 11 as it may
deem advisable. Each such committee shall consist of three or more
members, the exact number to be determined from time to time by the
Board of Directors. Designation of members of each such committee
shall be made by the Board of Directors. The Board may also
designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any
meeting of the committee. In the absence or disqualification of
any member of any such committee or committees, the member or
members thereof 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. Each committee shall keep regular minutes of its meetings
and report the same to the Board of Directors when required.
The Executive Committee, during intervals between meetings of the
Board of Directors, shall have and may exercise, in the best inter-
ests of the Corporation, all of the powers of the Board of Direc-
tors in the management and control of the business of the Corpo-
ration, except as limited by the General Corporation Law of the
State of Delaware and except with respect to matters within the
powers of the Audit Committee or the Compensation Committee. The
powers of the Executive Committee shall be exercised in a manner
which is consistent with any specific directions of the Board of
Directors as to the conduct of the Corporation's affairs. All
action taken by the Executive Committee shall be reported to the
Board of Directors at the next meeting of the Board following the
Executive Committee meeting at which such action was taken.
The Audit Committee, a majority of which shall not be employees of
the Corporation, shall confer periodically with the Corporation's
independent accountants in respect of the preparation of the Corpo-
ration's financial statements and the maintenance of proper finan-
cial records and controls, shall make such recommendations to the
Board of Directors with respect thereto as it shall deem advisable
and shall bring to the attention of the Board of Directors the
criticisms and recommendations of such independent accountants.
The Audit Committee shall also perform such other functions as may
be delegated to it by the Board of Directors.
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The Compensation Committee shall consist entirely of members who
are not officers or employees of the Corporation. The Compensation
Committee shall be empowered to review the amount and terms of com-
pensation paid to the principal executive officers of the Corpo-
ration and to the principal executive officers of the Corporation's
subsidiaries, and to authorize, or to recommend to the Board of
Directors of the Corporation and such subsidiaries the au-
thorization of such salary levels and employment agreements with
respect to such officers as such Committee may deem appropriate.
The Compensation Committee shall also be empowered to authorize, or
recommend to the Board of Directors the authorization of such
general incentive compensation arrangements, including any bonus,
stock option or special compensation plans for the Corporation, as
such Committee may deem appropriate. The Compensation Committee
shall also recommend to the Board of Directors annually a slate of
nominees to the Board of Directors to be proposed to the share-
holders, and, from time to time, to recommend persons to fill any
vacancy on the Board, such recommendation to be based on general
criteria (as established by the full Board of Directors) for the
selection of members of the Board. The Compensation Committee
shall also perform such other functions as may be delegated to it
by the Board of Directors.
Section 12. REMUNERATION. The directors may be paid f or
their expenses, if any, including but not limited to those incurred
in connection with attendance at each meeting of the Board of
Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors, a stated salary, a fee as such
director or any combination thereof. No such payment shall
preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor. Members of special
or standing committees may be allowed like compensation for
attending committee meetings.
ARTICLE IV.
Notices
Section 1. MANNER OF NOTICES. Whenever under the provisions
of statute or of the Restated Certificate of Incorporation or of
these By-Laws notice is required to be given to any director,
committee member, officer or stockholder, it shall not be construed
to mean personal notice, but such notice may be given, in the case
of stockholders, in writing, by mail, by depositing the same in a
post office or letter box, in a postpaid, sealed wrapper, addressed
to such stockholder, at such address as appears on the books of the
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Corporation, or, in default of other address, to such stockholder
at the General Post Office in the City of Wilmington, Delaware,
and, in the case of directors, committee members and officers, by
telephone or by mail or telegram to the last business address known
to the Secretary, and such notice shall be deemed to be given at
the time when the same shall be thus mailed or telegraphed or
telephoned.
Section 2. WAIVER. Whenever any notice is required to be
given under the provisions of statute or of the Restated
Certificate of Incorporation or of these By-Laws, a waiver thereof
in writing, signed by the person or persons entitled to said
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 any and all objections to the date,
time, and purposes of such meeting, and the sufficiency of notice
thereof, except when the person attends a meeting for the purpose
of objecting, at the beginning of the meeting, to the transaction
of any business because the meeting is not lawfully called or
convened.
ARTICLE V.
Officers
Section 1. OFFICERS. The officers of the Corporation shall
be appointed by the Board of Directors and shall be a Chairman of
the Board of Directors, a President, a Vice Chairman of the Board
of Directors who shall preside over meetings of the Board of
Directors in the absence of the Chairman, one or more Vice
Presidents (which term may include Executive Vice President, Senior
Vice President and any other title approved by the Board of
Directors), a Secretary and a Treasurer. The Board of Directors
may also choose one or more assistant officers. Any two or more
offices may be held by the same person except for the offices of
Chairman of the Board and Secretary, which shall be held by two
individuals.
Section 2. ELECTION. The Board of Directors at its first or-
ganizational meeting after each annual meeting of stockholders,
shall choose a Chairman of the Board of Directors, a President, a
Vice Chairman of the Board of Directors, one or more Vice
Presidents as set forth in Article V, Section 1, a Secretary and a
Treasurer.
Section 3. APPOINTMENT OF SUBORDINATE OFFICERS. The Board of
Directors may appoint or empower the Chairman of the Board to ap-
point, such other officers and agents as deemed necessary who shall
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hold their offices for such terms and shall exercise such powers
and perform such duties as shall be determined from time to time by
the Board of Directors.
Section 4. SALARIES. The salaries of the Chairman of the
Board, President, all Vice Presidents, the Secretary and the Trea-
surer of the Corporation shall be fixed by the Board of Directors.
Section 5. TERM OF OFFICE: REMOVAL AND RESIGNATION. After
his or her appointment to an office of the Corporation an
individual shall hold such office until a new slate of officers is
appointed by the Board of Directors at an organizational meeting
thereof, or until any other time that his or her successor is
chosen and has qualified, or until his or her earlier removal or
resignation. Any officer appointed by the Board of Directors may
be removed at any time by the affirmative vote of a majority of the
entire Board of Directors. Any officer at any time may resign from
any or all of the offices he or she holds, and his or her
resignation may be either oral or written. Unless otherwise
specified in the form of resignation, the acceptance of the
resignation shall not be necessary to make it effective. Any
vacancy occurring in any office of the Corporation may be filled by
appointment by the Board of Directors.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board
shall be the Chief Executive Officer of the Corporation with the
powers of general manager, and he or she shall have supervision
over and may exercise general executive powers concerning all of
the operations and business of the Corporation, with the authority
from time to time to delegate to other officers such executive and
other powers and duties as he or she may deem advisable. He or she
shall preside at all meetings of the stockholders and the Board of
Directors.
Section 7. THE PRESIDENT. The President shall, in the
absence of the Chairman of the Board and the Vice-Chairman of the
Board, preside at all meetings of the stockholders and the Board of
Directors. The President shall have the same power as the Chairman
of the Board to execute and deliver such certificates, contracts,
bonds, mortgages, notes and other instruments and documents for and
on behalf of the Corporation and under the seal of the Corporation
where so required. He shall have general responsibility for the
management of the operations of the Corporation and shall perform
such duties, in that regard, as are incident to his office or
properly required of him by the Chairman of the Board or by the
Board of Directors.
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Section 8. VICE PRESIDENT. The Vice President or Vice Presi-
dents, as the case may be, shall perform such duties and have such
powers as the Board of Directors may from time to time prescribe.
Section 9. SECRETARY. The Secretary shall attend all
meetings of the Board of Directors and all meetings of the
stockholders and record all of the proceedings of the meetings of
the Corporation and of the Board of Directors in a book to be kept
for that purpose and shall perform like duties for the committees
when required. He or she shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the
Board of Directors, and shall perform such other duties as may be
prescribed by the Board of Directors or Chairman of the Board and
have custody of the corporate seal of the Corporation and he or
she, or an Assistant Secretary, shall have authority to affix the
same to any instrument requiring it and when so affixed, it may be
attested by his or her signature or by the signature of such
Assistant Secretary. The Board of Directors may give general
authority to any other officer to affix the seal of the Corporation
and to attest the affixing by his or her signature.
Section 10. ASSISTANT SECRETARY. The Assistant Secretary or,
if there be more than one, the Assistant Secretaries, in the order
determined by the Board of Directors (or in the absence of any such
determination, then in the order of their appointment), shall, in
the absence or disability of the Secretary or in the event of his
or her inability or refusal to act, perform the duties and exercise
the powers of the Secretary and shall perform such other duties and
have such other powers as the Board of Directors may from time to
time prescribe.
Section 11. TREASURER. The Treasurer shall have the custody
of the corporate funds and securities and shall keep full and
accurate accounts of receipts and disbursements in books belonging
to the Corporation and shall deposit all monies and other valuable
effects in the name and to the credit of the Corporation in such
depositories as may be designated by the Board of Directors.
Section 12. DISBURSEMENT OF FUNDS. The Treasurer shall dis-
burse the funds of the Corporation as may be ordered by the Board
of Directors, taking proper vouchers for such disbursements, and
shall render to the Chairman of the Board and the Board of Direc-
tors, at its regular meetings, or when the Board of Directors so
requires, an account of his or her transactions as Treasurer and of
the financial condition of the Corporation.
Section 13. ASSISTANT TREASURER. The Assistant Treasurer or,
if there shall be more than one, the Assistant Treasurers, in the
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order determined by the Board of Directors (or in the absence of
any such determination, then in the order of their appointment),
shall, in the absence of the Treasurer or in the event of his or
her inability or refusal to act, perform the duties and exercise
the powers of the Treasurer and shall perform such other duties and
have such other powers as the Board of Directors may from time to
time prescribe.
ARTICLE VI.
Certificates of Stock
Section 1. CERTIFICATES OF STOCK. Every holder of stock in
the Corporation shall be entitled to have a certificate certifying
the number of shares owned by him or her in the Corporation. Such
certificate shall be signed by or in the name of the Corporation by
the Chairman of the Board or the President or a Vice President and
also signed by the Treasurer or an Assistant Treasurer, or the Se-
cretary, or an Assistant Secretary of the Corporation.
Section 2. SIGNATURES. Any or all of the signatures on a
certificate may be a facsimile. In case any officer, transfer
agent, or registrar who signed, or whose facsimile signature has
been placed upon a certificate, shall have ceased to be such
officer, transfer agent, or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as
if he or she were such officer, transfer agent, or registrar at the
date of issue.
Section 3. LOST, STOLEN OR DESTROYED CERTIFICATES. The Board
of Directors may direct a new certificate or certificates to be
issued in place of any certificate or certificates theretofore is-
sued by the Corporation alleged to have been lost, stolen or des-
troyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed.
When authorizing such issue of a new certificate or certificates,
the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate or certificates, or his or her leg-
al representative, to give the Corporation a bond in such sum as it
may direct as indemnity against any claim that may be made against
the Corporation with respect to the certificate or certificates
alleged to have been lost, stolen or destroyed.
Section 4. TRANSFERS OF STOCK. Upon surrender to the Corpo-
ration or a transfer agent of the Corporation of a certificate for
shares duly endorsed or accompanied by proper evidence of succes-
sion, assignment or authority to transfer, it shall be the duty of
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the Corporation to issue a new certificate to the person entitled
thereto, to cancel the old certificate and to record the transac-
tion upon its books.
Section 5. REGISTERED STOCKHOLDERS. The Corporation shall be
entitled to treat the person registered on its books as the owner
of any share or shares of stock as the holder in fact thereof and,
accordingly, shall not be bound to recognize any equitable or other
claim to, or interest in, such share or shares on the part of any
other person, whether or not it shall have actual or other notice
thereof, except as otherwise provided by applicable law.
ARTICLE VII.
General Provisions
Section 1. DIVIDENDS. Dividends upon the capital stock of
the Corporation, subject to the provisions of the Restated
Certificate of Incorporation, if any, may be declared by the Board
of Directors at any regular or special meeting, pursuant to
applicable law. Dividends may be paid in cash, in property, or in
shares of the capital stock of the Corporation.
Section 2. CHECKS. All checks or demands for monies and
notes of the Corporation shall be signed by such officer or
officers or such other person or persons as the Board of Directors
may from time to time designate.
Section 3. FISCAL YEAR. The fiscal year of the Corporation
shall be on a calendar year basis unless otherwise fixed by resolu-
tion of the Board of Directors.
Section 4. CORPORATE SEAL. The corporate seal shall have in-
scribed thereon the name of the corporation and the words "Corpo
rate Seal, Delaware." The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or
otherwise. It shall not be necessary to the validity of any
instrument executed by any authorized official of the Corporation
that the execution of such instrument be evidenced by the corporate
seal, and all documents, instruments, contracts and writings of all
kinds signed on behalf of the Corporation by any authorized officer
or officers thereof shall be as effectual and binding on the Corpo-
ration without the corporate seal as if the execution of the same
had been evidenced by affixing the corporate seal thereto.
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ARTICLE VIII.
Amendments
These By-Laws, or any of them, may be altered, amended or re-
pealed, and new By-Laws may be adopted either: (i) by the Board of
Directors, by vote of a majority of the directors present at any
regular meeting of the Board and without previous notice, or at any
special meeting of the Board, provided that notice of such proposed
alteration, amendment, repeal or adoption of new By-Laws is given
in the notice of such special meeting, or by written consent with-
out a meeting signed by all directors; or (ii) by the stockholders,
at any annual meeting of stockholders and without previous notice,
or at any special meeting of stockholders, provided that notice of
such proposed alteration, amendment, repeal or adoption is given in
the notice of special meeting.
ARTICLE IX.
Indemnification of Officers and Directors
Section 1. INDEMNITY FOR CERTAIN EXPENSES, JUDGMENTS, FINES
AND SETTLEMENTS. The Corporation shall indemnify and make whole
any person who was or is a party or is threatened to be made a par-
ty to any threatened, pending or completed action, suit or proceed-
ing, whether civil, criminal, administrative or investigative (oth-
er than an action by or in the right of the Corporation) by reason
of the fact that he or she is or was a director, officer, employee
or agent of the Corporation subsequent to March 30, 1976, 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 subsequent to March 30,
1976, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to, the best
interests of the Corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendre or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and
in a manner which he or she reasonably believed to be in, or not
opposed to, the best interests of the Corporation, and, with
respect to any criminal action or proceeding, had reasonable cause
to believe that his or her conduct was unlawful.
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Section 2. INDEMNITY FOR CERTAIN DEFENSE AND SETTLEMENT EX-
PENSES -- COURT APPROVAL. The Corporation shall indemnify and
make whole any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit
by or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that he or she is or was a director,
officer, employee or agent of the Corporation subsequent to March
30, 1976, 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 subsequent to
March 30, 1976, against expenses (including attorneys' fees) ac-
tually and reasonably incurred by him or her in connection with the
defense or settlement of such action or suit if he or she acted in
good faith and in a manner he or she reasonably believed to be in,
or not opposed to, the best interests of the Corporation, except
that no indemnification shall be made in respect of any claim, is-
sue or matter as to which such person shall have been adjudged to
be liable to the Corporation unless and only to the extent that the
Court of Chancery of the State of Delaware or the court in which
such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
Section 3. INDEMNITY FOR SUCCESSFUL DEFENSE OF CERTAIN MAT-
TERS. Notwithstanding the other provisions of this Article IX, to
the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Section 1
or 2 of this Article IX, or in defense of any claim, issue or
matter therein, he or she shall be indemnified and made whole
against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith.
Section 4. DETERMINATION THAT STANDARD OF CONDUCT HAS BEEN
MET. Any indemnification under Sections 1 or 2 of this Article IX
(unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is
proper in the circumstances because he or she has met the applica-
ble standard of conduct set forth in said Sections 1 or 2. Such
determination shall be made (a) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (b) if such a quorum
is not obtainable, or, even if obtainable, if a quorum of
disinterested directors so directs, by independent legal counsel in
a written opinion, or (c) by the stockholders.
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Section 5. PAYMENT OF EXPENSES IN ADVANCE. Expenses incurred
by any person who may have a right of indemnification under this
Article IX in defending a civil or criminal action, suit or pro-
ceeding may be paid by the Corporation in advance of the final dis-
position of such action, suit or proceeding upon receipt of an un-
dertaking by or on behalf of such director, officer, employee or
agent to repay such amount if it shall ultimately be determined
that he or she is not entitled to be indemnified by the Corporation
as authorized in this Article IX. Such expenses incurred by other
employees and agents may be so paid upon such terms and conditions,
if any, as the Board of Directors deems appropriate.
Section 6. OTHER INDEMNIFICATION RIGHTS NOT AFFECTED BY THIS
ARTICLE. The indemnification and advancement of expenses provided
by or granted pursuant to this Article IX shall not be deemed
exclusive of any other rights to which those seeking in-
demnification or advancement of expenses may be entitled under any
By-Law, agreement, vote of stockholders or disinterested directors
or otherwise, both as to action in his or her official capacity and
as to action in another capacity while holding such office.
Section 7. INSURANCE. Upon resolution passed by the Board of
Directors, the Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, 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 anoth-
er corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him or her and
incurred by him or her in any such capacity, or arising out of his
or her status as such, whether or not the Corporation would have
the power to indemnify him or her against such liability under the
provisions of this Article IX or the General Corporation Law of the
State of Delaware, as amended.
Section 8. INDEMNIFICATION TO THE FULLEST EXTENT PERMITTED BY
LAW. The Corporation shall, to the fullest extent permitted by
applicable law from time to time in effect, indemnify any and all
persons who are or were directors, officers, employees or agents of
this Corporation subsequent to March 30, 1976, or who are or were
serving at the request of this Corporation as directors, officers,
employees or agents of another corporation, partnership, joint
venture, trust or other enterprise subsequent to March 30, 1976,
from and against any and all of the expenses, liabilities or other
matters referred to in or covered by said law.
Section 9. CONSTITUENT AND RESULTING CORPORATION. For the
purposes of this Article IX, references to "the Corporation" shall
include, in addition to the resulting corporation, any constituent
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corporation (including any constituent of a constituent) absorbed
in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its di-
rectors, officers, and employees or agents, so that any person who
is or was a director, officer, employee or agent of such constitu-
ent corporation subsequent to March 30, 1976, or is or was serving
at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise subsequent to March 30,
1976, shall stand in the same position under the provisions of this
Article IX with respect to the resulting or surviving corporation
as he or she would have with respect to such constituent
corporation if its separate existence had continued.
Section 10. OTHER ENTERPRISE. For the purposes of this
Article IX, references to "other enterprises" shall include
employee benefit plans; references to "fines" shall include any
taxes assessed on a person with respect to an employee benefit
plan; and references to "serving at the request of the Corporation"
shall include any service as a director, officer, employee or agent
of the Corporation which imposes duties on, or involves services
by, such director, officer, employee or agent with respect to an
employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner he reasonably
believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have
acted in a manner "not opposed to the best interests of the
Corporation" as reflected to in this Article IX.
Section 11. CONTINUING BENEFIT. The indemnification and
advancement of expenses provided by or granted pursuant to this
Article IX shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
ARTICLE X.
Annual Reports
A periodic report, including profit and loss statements and balance
sheets, prepared in accordance with generally accepted accounting
principles, shall be made to stockholders at least once a year.
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<PAGE> (Exhibit 10(xxii)
Conformed
INTERCARGO CORPORATION
1450 EAST AMERICAN LANE
SCHAUMBURG, IL 60173
September 13, 1993
Mr. Alan R. Gruber
Chairman & Chief
Executive Officer
Orion Capital Corporation
30 Rockefeller Plaza
New York, N.Y. 10112
Dear Alan:
This letter agreement ("Agreement") will confirm the
mutual agreements of Intercargo Corporation, (the "Company")
and Orion Capital Corporation ("Orion") with respect to the
proposed purchase by Orion or one or more of its wholly-owned
subsidiaries (the "Subsidiaries") of 500,000 shares of Common
Stock of the Company from the Company (the "Proposed
Transaction"). The parties acknowledge, in that connection,
that Orion has agreed to purchase 1,006,484 shares of Common
Stock owned by Harper Group, Inc. and its affiliates
("Harper"), of which 700,000 shares may have heretofore been
purchased. For purposes of this Agreement, "Common Stock
Outstanding" at a particular time shall mean not only all
shares of the Company's Common Stock actually outstandinng,
but also all shares of such Common Stock issuable or
deliverable upon conversion or exercise of any outstanding
options, warrants or convertible securities of the Company.
1. The Company will use reasonable best efforts to
facilitate the Proposed Transaction, including among other
things supporting all applications by Orion to regulatory
authorities whose approval or clearance is required for Orion
to consummate the Proposed Transaction in accordance with this
agreement, provided (i) no new circumstances or conditions
occur which cause the Board of Directors of the Company in
good faith to conclude that the Proposed Transaction is
materially adverse to the best interests of the Company, and
(ii) the Agreement shall not have been terminated pursuant to
Section 6 hereof.
2. Promptly following the receipt of all regulatory
approvals which may be required, Orion (i) may acquire the
<PAGE>
remaining shares of the Company's Common Stock held directly
or indirectly by Harper Group, Inc. and (ii) will purchase
from the Company 500,000 shares of the Company's Common Stock
for an aggregate purchase price of $6,375,000, such sum to be
paid to the Company in U.S. dollars in immediately available
funds as of the closing date. Seller represents and warrants
that the shares of Common Stock to be sold by the Company to
Orion will have been duly authorized and issued, will be fully
paid and non-assessable, and are free and clear of any claim,
lien or encumbrance of any type whatsoever and that Orion
will, upon purchasing the shares of Common Stock from the
Company in accordance with this Agreement, acquire all right,
title and interest in and to such shares, free and clear of
all rights, claims and encumbrances of any type whatsoever.
The shares of Common Stock issued to Orion by the Company will
not be registered for sale under any federal or state law,
and, accordingly, no sale or disposition of such shares will
be permitted except pursuant to the provisions of Rule 144 of
the Securities Act of 1933 ("Rule 144") or another applicable
exemption from registration, or pursuant to a public offering
of the Common Stock in accordance with the registration rights
set forth in Annex I. The Company shall, at all times when
Orion or a Subsidiary shall own shares of Common Stock which
may not be sold other than in compliance with Rule 144 or
another applicable exemption from registration, take all steps
necessary, on a timely basis, to cause the conditions of Rule
144(c) to be met.
3. At such time as Orion first files a Schedule
13D in respect to its acquisition of shares of Common Stock of
the Company, the Company and Orion will issue a joint press
release describing the Proposed Transaction. Until such time,
the Proposed Transaction and the existence of this Agreement
shall remain confidential and neither party shall disclose the
existence of the Proposed Transaction or of this Agreement
except as may be required by law or in connection with any
necessary regulatory filings as contemplated hereby or as may
be determined to be required by counsel for either the Company
or Orion.
4. The Company agrees that so long as Orion and
its Subsidiaries shall beneficially own at least 1,000,000
shares of Common Stock of the Company (such number to be
appropriately increased or decreased, as the case may be, to
reflect stock splits, recapitalizations, repurchases by the
Company and the like), it will use its reasonable best efforts
to cause one person to be designated by Orion to be elected to
the Board of Directors of the Company and that a designee of
Orion will thereafter be included on management's slate of
nominees to be elected to the Board of Directors.
5. (a) Orion agrees and covenants that prior to
December 31, 1998, without the Company's prior written
consent, Orion will not and Orion will cause each of its
Controlled Subsidiaries (as defined herein) not to (A)
acquire, offer or by purchase or otherwise, any Common Stock
- 2 -
<PAGE>
of the Company, or direct or indirect rights or options to
acquire (through purchase, exchange, conversion or otherwise),
any Common Stock of the Company, if immediately after any such
acquisition, Orion and its Controlled Subsidiaries would
beneficially own, in the aggregate, Common Stock representing
more than 22% (the "Percentage Limitation") of the Common
Stock Outstanding of the Company; provided, however, that
notwithstanding anything to the contrary contained in this
Agreement, the foregoing restriction shall not be deemed to be
violated to the extent the percentage of the Common Stock of
the Company beneficially owned, in the aggregate, by Orion and
its Controlled Subsidiaries is increased as a result of a
recapitalization of the Company, a repurchase of securities by
the Company or any other action other than the acquisition of
shares by Orion and its Controlled Subsidiaries; (B) make, or
in any way participate, directly or indirectly, in any
"solicitation" of "proxies" to vote (as such terms are used in
the proxy rules of the Securities and Exchange Commission),
seek to advise, encourage or influence any person or entity
with respect to the voting of any Common Stock of the Company,
initiate, propose or otherwise solicit shareholders of the
Company for the approval of one or more shareholder proposals
or induce or attempt to induce any other person to initiate
any shareholder proposal; (C) make any statement or proposal,
whether written or oral, to the Board of Directors of the
Company, any director or officer of the Company, or otherwise
make any public announcement or proposal whatsoever with
respect to a merger or other business combination, sale or
transfer of all or substantially all of the assets of the
Company, liquidation or other extraordinary corporate
transaction with the Company; (D) except as contemplated by
this Agreement, form, join or in any way participate in a
"group" (within the meaning of Section 13(d)(3) of the 1934
Act) with respect to any shares of Common Stock of the
Company; (E) deposit any shares of Common Stock of the Company
into a voting trust or subject any shares of Common Stock of
the Company to any arrangement or agreement with any person
other than Orion or one or more Controlled Subsidiaries of
Orion with respect to the voting of any shares of Common Stock
of the Company; (F) execute in favor of any person other than
Orion or a Controlled Subsidiary any written consent with
respect to the voting of its shares of Common Stock of the
Company; or (G) otherwise act, alone or in concert with
others, to seek to control or influence the management, Board
of Directors or policies of the Company, except as
contemplated by this Agreement. "Controlled Subsidiary" shall
mean an entity in which Orion owns voting securities and as to
which Orion and its Controlled Subsidiaries have the right to
elect a majority of the Board of Directors of such entity in
the case of a corporation or to determine its business
policies in the case of a non-corporate entity. A natural
- 3 -
<PAGE>
person or persons shall not be deemed to be a Controlled
Subsidiary.
(b) After December 31, 1998 and for a period of
five years thereafter, Orion and its Controlled Subsidiaries
may purchase or otherwise acquire shares of Common Stock of
the Company (or direct or indirect rights or options to
acquire, through purchase, exchange, conversion or otherwise,
any such shares) without notice to the Company if immediately
after any such acquisition, Orion and its Controlled
Subsidiaries would not beneficially own, in the aggregate,
shares of Common Stock of the Company representing more than
49% of the Common Stock Outstanding of the Company; and Orion
and its Controlled Subsidiaries shall not purchase or
otherwise acquire shares of Common Stock of the Company (or
direct or indirect rights or options to acquire through
purchase, exchange, conversion, or otherwise such shares) if
immediately after any such acquisition, Orion and its
Controlled Subsidiaries would beneficially own, in the
aggregate, shares of Common Stock of the Company representing
more than 49% of the Common Stock Outstanding of the Company,
unless Orion shall have delivered to the Company written
notice (the "Purchase Notice") at least ten days prior to any
such acquisition. The Purchase Notice shall specify the
number of shares of Common Stock to be acquired. Commencing
on the tenth day following delivery of the Purchase Notice to
the Company, Orion shall have the right to acquire such
securities, but only in the amount set forth in the Purchase
Notice.
(c) For purposes of this Agreement "beneficially
own" shall have the meaning set forth in Rule 13d-3 under the
1934 Act.
(d) In the event that at any time prior to
December 31, 1998 the Company shall at any time issue or sell
any treasury or other shares of Common Stock of the Company,
other than in connection with employee benefit and incentive
compensation plans or an acquisition by the Company or a
wholly-owned subsidiary of another business entity or of
substantially all of its stock or assets, the Company shall,
not less than ten days prior to the consummation of such
issuance of sale offer to sell to Orion (or to a subsidiary or
subsidiaries designated by it) a sufficient number of shares,
at a price equal to that of the shares to be issued or sold by
the Company, so that the percentage of Common Stock
Outstanding owned by Orion and its Subsidiaries shall be the
same prior and subsequent to such proposed issuance or sale.
(e) If, at any time prior or subsequent to the
closing referred to in Section 2, any person other than the
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<PAGE>
Company, a wholly-owned subsidiary of the Company, Orion, a
Subsidiary of Orion or a person controlled by Orion or one of
its Subsidiaries should make an offer to acquire by tender or
otherwise 20% or more of the Common Stock Outstanding at the
time of such offer, Orion and its Controlled Subsidiaries
shall not be bound by the provisions of this Section 5 so long
as such offer shall be outstanding.
6. Upon the occurrence of any of the following events
either Orion or the Company may terminate this Agreement on
not less than 10 days' notice to the other party and the
provisions of this Agreement other than Section 3 will on the
date specified in such notice become null and void, and will
cease to have any further force and effect:
(a) If the initial 700,000 shares to be purchased
by Orion from Harper Group, Inc. are not acquired by November
1, 1993.
(b) If all requests for approval which are
required to be filed with any insurance department in
connection with the Proposed Transaction shall not have been
filed by the thirtieth day after the execution and delivery of
this Agreement and if each approval so required is not
obtained within 90 days after a submission of the required
request for approval.
(c) If any legal action is commenced by any
governmental agency seeking to enjoin or prohibit the Proposed
Transaction or if a temporary or preliminary restraining order
or injunction shall have been entered upon the complaint of
any person and not stayed or dismissed.
(d) If the Proposed Transaction is not fully
completed within 30 days after approval by all insurance
departments whose approval is required for any reason other
than (i) by delay occasioned by the failure of the party
giving such notice to use its reasonable best efforts to
complete the proposed transaction or (ii) by requests for
further information from any governmental agency.
(e) If there is a material adverse change in the
financial condition or business prospects of either the
Company or Orion.
7. Until the termination of this Agreement, the
Company will notify Orion forthwith (i) upon receiving any
offer for a merger or sale of all or substantially all of the
Company's assets, or for any other transaction or business
combination of the Company with any other person wherein the
Company, or all or substantially all of the assets of the
- 5 -
<PAGE>
Company or such person, or any material asset or material
amount of the securities of the Company or such person, would
be acquired by the other, or the Company would be restructure,
or (ii) upon any person or group of persons (within the
meaning of Section 13(d)(3) of the 1934 Act) filing a
statement on Schedule 13D under the 1934 Act with respect to
the Company's Common Stock Outstanding, or otherwise informing
the Company to substantially similar effect with respect to
any acquisition of the Company's Common Stock Outstanding.
8. The Company agrees to provide Orion and its
representatives (who shall be designated in writing to the
Company) reasonable access to the business records of the
Company and, for information purposes to its personnel as
Orion may request. In addition, the Company shall provide
Orion with copes of all press releases and filings with the
Securities and Exchange Commission ("SEC") or the National
Association of Security Dealers ("NASD") promptly upon release
or filing as is applicable. Orion shall keep all information
which is not otherwise disclosed to the public or filed with
the SEC confidential, including any information which is filed
with the NASD or any other regulatory agency unless written
consent to such disclosure is obtained from the Company.
Except as provided in the next sentence, Orion agrees that
while this Agreement is in effect and for a period of five (5)
years thereafter, Orion shall not sell or provide, and Orion
shall cause its Controlled Subsidiaries to refrain from
selling or providing, the following coverages: U.S. or
foreign customs bonds, marine cargo insurance (including
associated overland freight transportation coverage) to
customs brokers, freight forwarders and international
transportation specialists, and professional liability
insurance for such persons. Notwithstanding the foregoing,
underwriting of coverage generated by the Wm. H. McGee
Syndicate by Orion or any Controlled Subsidiary shall not be
deemed to violate the covenant contained in this Section 8.
9. Notwithstanding assignment to any Subsidiary of its
rights hereunder, Orion shall remain responsible for any
damage or loss suffered by the Company as a result of a breach
of any terms, covenant, representations or warranties
contained herein or in any agreement or undertaking referred
to herein or contemplated hereby. This Agreement shall be
binding upon and inure to the benefit of the assigns,
successors and interests of the parties.
10. As an inducement to enter into this Agreement and
perform its terms, Orion and the Company each make the
representations and warranties set out below to the other.
Each party shall be deemed to have made these representations
and warranties only about itself.
- 6 -
<PAGE>
(a) Orion and the Company are each duly
incorporated respectively in the state of Delaware and are on
the date hereof in good standing. Further, Orion and the
Company are authorized to do business in each foreign
jurisdiction where the character of their respective
businesses or location of their respective assets requires
such qualification. Each of Orion and the Company has the
corporate authority to enter into this Agreement and the
agreements and instruments referred to herein and contemplated
hereby and has taken all necessary corporate action to
authorize the due execution and performance thereof. The
execution, delivery and performance of this Agreement and the
agreements and instruments referred to herein and contemplated
hereby do not violate the terms and conditions of any
agreement to which either Orion or the Company is a party or
any order, judgment, or decree to which either of them may be
subject, nor to their best knowledge, the provisions of any
applicable law, rule or regulation to which either of them may
be subject, nor will the execution, delivery and performance
of this Agreement and the agreements and instruments referred
to herein and contemplated hereby, cause, with the passage of
time or otherwise, a violation or default to occur with
respect to any of the foregoing.
(b) Neither the Company, nor Orion as to itself
and each of its Controlled Subsidiaries, has any knowledge of
any fact, circumstance or condition which in their respective
reasonable judgments is likely to cause a material adverse
change in the financial condition or business prospectus of
Orion or the Company as the case may be, or any of their
respective Controlled Subsidiaries.
11. Each of Orion and the Company acknowledges that the
other party would not have an adequate remedy at law for money
damages in the event that any of the covenants or agreements
of the other party in this Agreement were not performed in
accordance with its term and therefore agrees that the other
party shall be entitled to specific enforcement of such
covenants or agreements and to injunctive and other equitable
relief in addition to any other remedy to which it may be
entitled, at law or in equity.
12. The representations, warranties, covenants and
agreements contained in this Agreement shall survive the
execution and delivery of this Agreement.
13. Orion hereby acknowledges that each of the
certificates representing the shares of Common Stock of the
Company acquired from the Company shall be subject to stop
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<PAGE>
transfer instructions and shall include the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act and are subject to certain
limitations on transfer set forth in an agreement dated
September 13, 1993 between Orion Capital Corporation and
Intercargo Corporation. A copy of such agreement is on file
with the Secretary of Intercargo Corporation".
14. This Agreement and Annex contain the entire
understandings of the parties with respect to the subject
matter hereof and may not be amended except by a writing
signed by the parties. This Agreement is not assignable by
either of the parties except that Orion may designate one or
more Subsidiaries as a purchaser of some or all of the shares
of Common Stock to be purchased by Orion pursuant to this
Agreement. This Agreement shall be binding upon the
respective successors of the parties.
15. Any notices and other communications required to be
given pursuant to this Agreement shall be in writing and shall
be given by delivery by hand, by mail (registered or certified
mail, postage prepaid, return receipt requested), facsimile
transmission or by telex, as follows:
If to the Company:
Mr. James R. Zuhlke
Intercargo Corporation
1450 East American Lane
20th Floor
Schaumburg, Illinois 60173
with a copy to:
Michael Sklar, Esq.
Keck, Mahin & Cate
77 West Wacker Drive
49th Floor
Chicago, Illinois 60601-1693
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<PAGE>
If to Orion:
Mr. Alan R. Gruber
Chairman & Chief
Executive Officer
Orion Capital Corporation
30 Rockefeller Plaza
New York, N.Y. 10112
with a copy to:
John J. McCann, Esq.
Hall, Dickler, Lawler, Kent & Friedman
909 Third Avenue
New York, New York 10022
or to such addresses as either the Company or Orion shall
designate to the other by notice in writing.
16. Subject to the terms and conditions of this
Agreement, each of the parties hereby agrees to use its
reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws, rules and
regulations to consummate and make effective the transactions
contemplated by this Agreement, including using its reasonable
best efforts to obtain all necessary waivers, consents and
approvals. In case at any time after the execution of this
Agreement, further action is necessary or desirable to carry
out the purposes of this Agreement, the proper officers and
directors of each of the parties shall take all such necessary
action.
17. Each of Orion and the Company represents and
warrants to the other that it has not engaged any broker,
finder, financial advisor or other intermediary in connection
with the sale of shares of Common Stock by the Company to
Orion. Each party hereby agrees to hold the other entirely
harmless against all loss, cost and expense to the other party
arising out of any claim for a fee, commission or other
compensation by any such person claiming to have acted for or
been retained or engaged by the indemnifying party.
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<PAGE>
18. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Illinois.
Very truly yours,
INTERCARGO CORPORATION
By: /s/ James R. Zuhlke
----------------------
- -
James R. Zuhlke
President and Chief
Executive Officer
Accepted and agreed on
the date written above:
ORION CAPITAL CORPORATION
By: /s/ Alan R. Gruber
--------------------------------------
Alan R. Gruber
Chairman and Chief Executive Officer
- 10 -<PAGE>
<PAGE>
ANNEX I
REGISTRATION RIGHTS
(a) If, at any time the Company proposes to register any
of its securities under the Securities Act of 1933 (the
"Securities Act") (other than securities to be issued pursuant
to a stock option or other employee benefit or similar plan),
the Company shall, promptly give written notice to Orion of the
Company's intention to effect such registration (all references
to "Orion" herein being deemed to mean and include Orion and all
wholly-owned subsidiaries of Orion which are owners or sellers
of Subject Stock, as the context requires). If, within 15 days
after receipt of such notice, Orion submits a written request to
the Company specifying the number of shares of Common stock (not
to exceed, for all registrations pursuant to this Annex I, an
aggregate of 500,000 shares, subject to appropriate adjustment
for any stock splits, recapitalizations and the like which may
occur after September 13, 1993) that it proposes to sell or to
otherwise dispose of, (the "Subject Stock") the Company shall
include the Subject Stock in such registration statement and the
Company shall keep each registration statement covering any
Subject Stock in effect for a period of not less than 90 days
following the effectiveness of such registration statement and
maintain compliance with each federal and state law and
regulation. Notwithstanding the foregoing, if the offering of
the Company's securities pursuant to such registration-statement
is to be made by or through underwriters, the Company shall not
be required to include the Subject Stock therein if and to the
extent that the underwriter managing the offering advises the
Company in writing that such inclusion would materially
adversely affect such offering and, in such event, the Company
may delay registration of the Subject Stock for a period of not
more than 30 days after completion of the distribution of
securities being underwritten on behalf of the Company (but in
no event for more than 180 days after the registration statement
first becomes effective) and the Company shall thereupon
promptly file such supplements and post effective amendments and
take such other steps as may be necessary to permit Orion to
make its proposed offering following the end of such period of
delay.
(b) An any time after September 13, 1994 but on not more
than one occasion, Orion may request that the Company register
part or all of the Subject Stock owned by Orion, provided that
the exercise of the right granted hereunder by Orion shall
exhaust such right, and Orion shall not have any further rights
under this Section (b). The Company will, upon receipt of a
request in writing pursuant hereto stating the amount of Subject
Stock to be registered for sale, endeavor in good faith to
effect the registration or qualification under the Act of such
Subject Stock. The Company shall not be required to file a
registration statement pursuant to this Section (b) covering any
<PAGE>
Subject Stock unless registration is requested for at least
250,000 shares of Common Stock (or such lesser number as may
represent the difference between the total number of shares of
Subject Stock owned at the time by Orion and the number of
shares of Subject Stock theretofore registered in accordance
with this Annex I). The right of Orion to demand that the
Company file a registration statement pursuant to this Section
(b) shall exist only if no other opportunity to register the
Subject Stock has been given to Orion under the provisions of
Section (a) hereof within the six (6) month period next
preceding the request for such registration.
(c) In connection with any offering of shares of Subject
Stock registered pursuant to this Annex I of the Company (i)
shall furnish to Orion such number of copies of each
registration statement, each prospectus and each preliminary
prospectus, and of each amendment and supplement to any thereof
as Orion may reasonably request in order to effect the offering
and sale of the Subject Stock to be offered and sold, but only
while the Company shall be required under the provisions hereof
to cause the registration statement to remain current and (ii)
take such action as shall be necessary to qualify the shares
covered by such registration statement under such blue sky or
other state securities laws for offer and sale as Orion shall
request; provided, however, that the Company shall not be
obligated to qualify as a foreign corporation to do business
under the laws of any jurisdiction in which it shall not then be
qualified or to file any general consent to service of process
in any jurisdiction in which such a consent has not been
previously filed. The Company shall enter into an underwriting
agreement (the "Agreement") with a managing underwriter or
underwriters selected by it containing representations,
warranties, indemnities and agreements then customarily included
by an issuer in underwriting agreements with respect to
secondary distributions and Orion agrees as a condition to
participation in such offering to make such representations and
warranties with respect to information as to it as selling
stockholder, and as to its holdings, which is furnished in
writing to the underwriter for use in the registration statement
as are customary and appropriate. In connection with any
offering of Subject Stock registered pursuant to this Annex I,
the Company shall furnish to the underwriter, at the Company's
expense, unlegended certificates representing ownership of the
Subject Stock being sold in such denominations as requested and
instruct any transfer agent and registrar of the Subject Stock
to release any stop transfer orders with respect to such Subject
Stock.
- 2 -
<PAGE>
(d) In connection with any registration pursuant to this
Annex I all expenses of registration shall be borne by the
Company (unless contrary to the federal securities laws or the
laws of any state where the Subject Stock is to be offered),
provided, however, in connection with any such registration,
Orion shall be obligated to pay any and all underwriter's
commissions and filing fees incurred by the Company, to the
extent that such fees and commissions would not have been so
incurred in the absence of the registration of such Subject
Stock. Under no circumstances shall the Company have any
liability for any fees and expenses of underwriters, counsel,
accountants or other agents of Orion with respect to any
registration statement filed pursuant to Sections (a) or (b)
hereof, including but not limited to the costs of any
investigations by or on behalf of Orion of the accuracy and
completeness of such registration or related to the furnishing
of information of Orion in connection with such registration
statement.
(e) Post Effective Amendments and Supplements. For a
period of ninety (90) days from and after the effective date of
any registration statement filed pursuant to Sections (a) or (b)
hereof in which any of the Subject Stock is included, the
Company shall from time to time amend or supplement the
registration statement and the prospectus used in connection
therewith as may be necessary to permit such sale and
disposition and to the extent necessary in order to keep such
registration statement effective and such prospectus current
under the Act so that neither the registration statement nor the
prospectus contains any untrue statement as to any material
fact, omits any statements necessary to make the statements
contained therein not misleading. In connection with any
registration statement filed pursuant to Section (b) hereof, the
Company will, at Orion's expense, use its best efforts to
qualify the Subject Stock being registered under the "blue sky"
and state securities laws of such states as Orion may reasonably
request, provided however, that the Company shall not be
obligated so to qualify the Subject Stock if, in connection
therewith or as a result thereof, the Company would be or become
obligated to qualify as a foreign corporation or as a dealer in
securities or to execute or file any general consents to service
of process under the laws of any such state.
(f) In the case of any offering registered pursuant to
this Annex I, the Company agrees to indemnify and hold harmless
Orion and each controlling person of Orion within the meaning of
Section 15 of the Securities Act, and the directors and officers
of Orion, against any and all losses, claims, damages or
liabilities to which they or any of them may become subject
- 3 -
<PAGE>
under the Securities Act or any other statute or common law or
otherwise, and to reimburse them, from time to time upon
request, for any legal or other expenses reasonably incurred by
them in connection with investigating any claims and defending
any actions, insofar as any such losses, claims, damages,
liabilities or actions shall arise out of or shall be based upon
(i) any untrue statement or alleged untrue statement contained
in the registration statement relating to the sale of such
Subject Stock in any preliminary prospectus or in any prospectus
or in any supplement or amendment to any of the foregoing of a
material fact or the omission or alleged omission to state
therein a material fact required to be stated or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading or (ii) any failure or
omission on the part of the Company to comply with any provision
of the Act and the rules and regulations of the Securities and
Exchange Commission (or other Federal agency at the time charged
with administration of the Act) applicable to such offering;
provided, however, that the indemnification agreement contained
in this paragraph (f) shall not apply to such losses, claims,
damages, liabilities or actions which shall arise from the sale
of Subject Stock if such losses, claims, damages, liabilities or
actions shall arise out of or shall be based upon any such
untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission
shall have been made in reliance upon and in conformity with
information furnished in writing to the Company by Orion
specifically for use in connection with the preparation of the
registration statement or any preliminary prospectus or
prospectus contained in the registration statement or any
amendment thereof or supplement thereto.
(g) In connection with any registration statement in
which Orion is participating, Orion will indemnify, to the
extent permitted by law, the Company and its directors and
officers against any losses, claims, damages, liabilities and
expenses resulting solely by reason of any untrue statement of
a material fact or any omission of a material fact necessary to
make the statements therein not misleading, in the registration
statement or any prospectus or preliminary prospectus or any
amendment or supplement thereto, but only to the extent that
such untrue statement is contained in, or such omission is
omitted from, information so furnished to the Company by Orion
in writing; provided, however, that Orion shall not be liable in
the aggregate for any amounts exceeding the product of the sale
price per share of Subject Stock of Orion sold in such
registered offering and the number of shares of Subject Stock
sold pursuant to such registration statement or prospectus by
Orion.
- 4 -
<PAGE>
(h) Each party indemnified under paragraph (f) or (g) of
this Annex I shall promptly after receipt of notice of the
commencement of any action against such indemnified party in
respect of which indemnity may be sought hereunder, notify the
indemnifying party in writing of the commencement thereof. The
omission of any indemnified party to so notify and indemnifying
party of any such action shall not relieve the indemnifying
party from any liability in respect of such action which it may
have to such indemnified party on account of the indemnity
agreement contained in paragraph (f) or (g) of this Annex I,
unless the indemnifying party was prejudiced by such omission,
and in no event shall relieve the indemnifying party from any
other liability which it may have to such indemnified party. In
case any such action shall be brought against any indemnified
party and it shall notify an indemnifying party of the
commencement thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it may desire to
assume the defense thereof through counsel satisfactory to the
indemnified party, and after notice from the indemnifying party
to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to
such indemnified party under paragraph (f) or (g) of this Annex
I for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof, other
than reasonable costs of investigation (unless such indemnified
party reasonably objects to such assumption on the grounds that
there may be defenses available to it which are different from
or in addition to such indemnifying party in which event the
indemnified party shall be reimbursed by the indemnifying party
for the expenses incurred in connection with retaining separate
legal counsel).
(i) Nothing in Section (f) or (g) of this Annex I shall
prevent the indemnified party from retaining counsel of its own
choosing, at its own expense, to defend or cooperate in the
defense or investigation of any claim in respect of which
indemnification is available hereunder. No indemnifying party
will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to
such claim or litigation.
(j) Capitalized terms not defined herein shall have the
meanings set forth in the Letter Agreement dated September 13,
1993 between the Company and Orion.
- 5 -
<PAGE> Exhibit 10(xxiii)
Conformed Copy
AGREEMENT between Orion Capital Corporation, a Delaware
corporation ("Buyer"), and The Harper Group, Inc., a Delaware
corporation ("Seller").
1. Seller hereby agrees to sell and assign to Buyer,
and Buyer hereby agrees to purchase and pay for, shares of Common
Stock, par value $1.00, of Intercargo Corporation (the "Common
Stock") at the price, at the times and on the terms and conditions
set forth herein. Each represents and warrants to the other that
the purchase and sale of Common Stock has been duly authorized by
all necessary corporate action and that this Agreement creates a
valid and legally binding obligation.
2. Seller represents and warrants that it or one of its
wholly-owned subsidiaries is the owner of 1,006,484 shares of
Common Stock, having full right, title and interest in and to such
shares free and clear of claims, liens and encumbrances of any type
whatsoever and that Buyer will, upon purchasing shares of Common
stock form Seller in accordance with this Agreement, acquire all
right, title and interest in and to such shares, free and clear of
all rights, claims and encumbrances of any type whatsoever.
3. The shares of Common Stock to be sold hereunder
shall be sold at a price of $12.50 per share, such price to be
subject to adjustment as set forth in this Section 3. Seller will
deliver to Buyer certificates for all shares sold on any date (a
"Transfer Date"), accompanied by Stock powers duly endorsed in
blank, all in form satisfactory to Buyer and Buyer's counsel and
Buyer shall transfer to Seller or to Seller's order, in immediately
available funds, cash in an amount equal to the purchase price of
the shares of Common Stock to be transferred on that Transfer Date.
(a) The date hereof shall be the first Transfer Date.
Simultaneously with the execution and delivery of this Agreement
Seller shall transfer to Buyer 700,000 shares of Common Stock and
Buyer shall pay to Seller $8,750,000 in full and final payment
therefor.
(b) On a date to be determined by Buyer on not less
than five days prior written notice to Seller (the "Future Transfer
Date"), and in consideration of the execution and delivery of this
Agreement and for other good and valuable consideration the receipt
of which is mutually acknowledged by Buyer and Seller, Seller
shall, subject to compliance with Section 4, transfer to Buyer
306,484 shares of Common Stock and Buyer shall pay therefor the
Adjusted Future Price. The Adjusted Future Price per share shall
be the sum of $12.50 per share plus an adjustment on such amount
computed at a rate of 3% per annum from the date hereof to the
Future Transfer Date.
4. Buyer may not give notice of the determination of
the Future Transfer Date unless prior to the giving of such notice
Buyer and Seller shall have received all regulatory approvals which
may be required under any applicable federal or state statute and
unless Buyer shall have been advised by its counsel that no other
regulatory filings need be made nor approvals obtained which have
not theretofore been made or obtained. Buyer and Seller shall, in
<PAGE>
good faith, seek all required regulatory approvals. Notice of
determination of a Future Transfer Date shall include a
certification by an officer of Buyer that the requirements of this
Section have been met and shall be given by Buyer not later than
the 30th day following receipt of the last required approval or the
making of the last required filing, whichever shall last occur. The
Future Transfer Date shall occur not later than December 31, 1993
if the Buyer shall have received the last required approval and
made the last required filing on or before the third business day
prior to December 31, 1993.
5. Buyer and Seller agree that each will cooperate with
the other party and with legal counsel and other advisers of such
other party in the preparation and making of all filings and
applications required to be made in connection with any of the
transactions contemplated by this Agreement.
6. This Agreement shall be governed by the laws of the
State of New York. The rights of the parties hereunder may not be
assigned except to the extent that Buyer may designate one or more
wholly-owned subsidiaries as the purchaser of some or all of the
shares of Common Stock to be purchased by Buyer on any Transfer
Date.
7. If the Future Transfer Date shall not have occurred
by 5:00 p.m. on December 31, 1993, then either party may terminate
this Agreement on ten days' written notice to the other; provided
that this Agreement shall automatically remain in force so long as
such notice of termination shall not be given and provided further
that a notice of termination given pursuant hereto shall not affect
the validity or finality of any purchase and sale of shares of
Common Stock theretofore made.
8. Each of Orion and Harper represents and warrants to
the other that it has not engaged any broker, finder, financial
adviser or other intermediary in connection with the sale of shares
of Common Stock by Harper to Orion except that Harper has engaged
the firm of Lehman Brothers. Harper agrees to be responsible for
and save Orion entirely harmless against any claim by Lehman
Brothers for fees, commissions, expenses or other compensation
arising out of or as a result of the sale of shares contemplated by
this Agreement. Each of Orion and Harper agrees to hold the other
entirely harmless against all loss, cost and expense to the other
arising out of any claim for fees, commissions, expenses or other
compensation by any person claiming to have been retained or
engaged by the indemnifying party.
IN WITNESS WHEREOF, this Agreement has been made and entered
into in New York City, N.Y. this 13th day of September, 1993.
The Harper Group, Inc.
By: /s/Robert H. Kennis
-----------------------
Orion Capital Corporation
By: /s/ Alan R. Gruber
------------------------
Chairman
- 2 -
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11
ORION CAPITAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(000s omitted-except for per common share data)
Year Ended December 31,
---------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Computation of weighted average
number of common and equivalent
shares outstanding:
PRIMARY -
Weighted average number of shares
outstanding ............................. 14,461 10,826 9,888
Dilutive effect of stock options .......... 137 88 76
------- ------- -------
Weighted average number of common and
equivalent shares ....................... 14,598 10,914 9,964
======= ======= =======
Net earnings before preferred dividend
requirements ............................ $68,813 $42,872 $44,668
Preferred dividends ....................... 409 6,358 7,276
------- ------- -------
Net earnings attributable to common
stockholders ............................ $68,404 $36,514 $37,392
======= ======= =======
Net earnings per common share ............. $ 4.69 $ 3.35 $ 3.75
======= ======= =======
FULLY DILUTED -
Weighted average number of shares
outstanding ............................. 14,461 10,826 9,888
Dilutive effect of stock options .......... 137 128 100
Conversion of $1.90 Preferred Stock ....... - 2,066 2,644
Conversion of $2.125 Preferred Stock ...... 57 1,454 1,454
------- ------- -------
Weighted average number of common and
equivalent shares ....................... 14,655 14,474 14,086
======= ======= =======
Net earnings before preferred dividend
requirements ............................ $68,813 $42,872 $44,668
Adjustable rate preferred stock dividends.. 407 1,581 1,679
------- ------- -------
Net earnings attributable to common
stockholders ............................ $68,406 $41,291 $42,989
======= ======= =======
Net earnings per common share ............. $ 4.67 $ 2.85 $ 3.05
======= ======= =======
<FN>
Common stock and per common share data have been restated to give effect to
the 5-for-4 stock splits paid on November 15, 1993 and December 7, 1992.
</TABLE>
<PAGE> EXHIBIT 21
SUBSIDIARIES*
OF
ORION CAPITAL CORPORATION
State or Other
Jurisdiction
Subsidiary of Incorporation
- ------------ -----------------
Clarke & Towner, Inc. Connecticut
Connecticut Specialty Group, Inc. Connecticut
Connecticut Specialty Insurance Company Connecticut
Connecticut Specialty Insurance Group, Inc. Connecticut
Design Professionals Administration Corporation California
Design Professionals Insurance Company California
DPIC Companies, Inc. California
EBI Companies, Inc. Connecticut
EBI Consulting Services, Inc. California
EBI Indemnity Company Connecticut
EFC Property Management, Inc. California
Employee Benefits Insurance Company California
Independent Financial Planners Corporation New Jersey
Jabawwat, Inc. Delaware
Nations' Care, Inc. Connecticut
Orion Capital Companies, Inc. Connecticut
Orion Properties Corporation Delaware
Peninsula Excess Insurance Brokers, Inc. California
________________________________________________________________________________
* The listed subsidiaries are wholly-owned by Orion
Capital Corporation (the "Company") as of December 31,
1993. The Company owns slightly less than 50% of
Guaranty National Corporation of Englewood, Colorado
and approximately 20% of Intercargo Corporation of
Schaumburg, Illinois.
<PAGE>
EXHIBIT 21
Risk Analysis and Research Corporation California
Security Insurance Company of Hartford Connecticut
Security Insurance Company (U.K.) Limited United Kingdom
SecurityRe, Inc. Connecticut
Security Reinsurance Company Connecticut
Security Warranty Association of Florida, Inc. Florida
The Connecticut Indemnity Company Connecticut
The Fire and Casualty Insurance Company of Connecticut Connecticut
- 2 -
<PAGE>
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements
No. 2-65348 on Forms S-8 and S-16 relating to the Orion Capital
Corporation 1976 and 1979 Stock Option Plans, No. 2-80636 on Form S-8
relating to the Orion Capital Corporation 1982 Long-Term Performance
Incentive Plan and No. 2-63344 on Form S-8 relating to the Orion Capital
Corporation Employees' Stock Savings and Retirement Plan of our report
dated February 22, 1994, appearing in this Annual Report on Form 10-K of
Orion Capital Corporation for the year ended December 31, 1993.
Deloitte & Touche
Hartford, Connecticut
March 11, 1994
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Annual Report on
Form 10-K of Orion Capital Corporation for the year ended December 31,
1993 of our reports dated February 21, 1994, appearing in the Annual
Report on Form 10-K of Guaranty National Corporation for the year ended
December 31, 1993.
Deloitte & Touche
Denver, Colorado
March 11, 1994
<TABLE>
EXHIBIT 28
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
------------------------
(Name)
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.
Schedule P Interrogatories
(2) Lines of business A through M and R 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)
(4) The Instructions to Schedule P contain directions necessary for filling out Schedule P.
<CAPTION>
SCHEDULE P - PART 1 - SUMMARY
(000 omitted)
- -------------------------------------------------------------------------------------------------------------------------
Premiums Earned Loss and Loss Expense Payments
1 ---------------------------- --------------------------------------------------------------------- 12
Years 2 3 4 Loss Payments Allocated Loss 9 10 11
in Which Expense Payment Number of
Premiums ------------------- ------------------ Salvage Unalloc. Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Paid Reported
Losses and Ceded (2 - 3) Direct Direct Subrogati Expense (5 - 6 + 7 Direct &
Incurred Assum. & Assum. Ceded & Assum. Ceded Received Payments - 8 + 10) Assum.
- ------------ --------- -------- --------- ---------- -------- --------- -------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. X X X X X X X X X X X X 19,471 11,640 959 (4,454) 0 735 13,979 X X X X
2. 1984.... 433,822 133,382 300,440 412,821 122,708 48,980 13,816 5,952 22,733 348,010 X X X X
3. 1985.... 514,171 149,848 364,323 387,415 104,092 56,468 20,958 6,341 27,918 346,751 X X X X
4. 1986.... 528,047 137,551 390,496 256,388 61,067 49,182 15,469 5,185 24,562 253,596 X X X X
5. 1987.... 547,683 112,913 434,770 235,974 31,749 42,679 11,163 5,996 23,126 258,867 X X X X
6. 1988.... 571,548 56,526 515,022 297,330 21,506 36,737 3,289 3,129 26,152 335,424 X X X X
7. 1989.... 653,120 115,634 537,486 334,975 57,838 37,156 4,460 3,304 24,239 334,072 X X X X
8. 1990.... 639,505 149,922 489,583 287,534 53,230 31,359 6,696 1,561 26,841 285,808 X X X X
9. 1991.... 657,969 123,310 534,659 231,339 46,217 28,849 5,496 1,035 26,293 234,768 X X X X
10. 1992.... 682,082 122,937 559,145 198,664 16,830 16,503 2,240 417 27,676 223,773 X X X X
11. 1993.... 750,986 134,219 616,767 112,045 14,124 6,768 1,337 449 21,628 124,980 X X X X
- ------------ --------- -------- --------- ---------- -------- --------- -------- --------- --------- ---------- ---------
12. Totals .. X X X X X X X X X X X X 2,773,956 541,001 355,640 80,470 33,369 251,903 2,760,028 X X X X
- -------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
--------------------------------------- ------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
------------------ -------------------- ------------------ ------------------ Salvage Unalloc. Total Claims
13 14 15 16 17 18 19 20 and Loss Net Losse Outstandi
Direct Direct Direct Direct Subrogati Expenses and Exp. Direct
& Assum. Ceded & Assum. Ceded & Assum. Ceded & Assum. Ceded Anticipat Unpaid Unpaid & Assum.
- ------------ --------- -------- --------- ---------- -------- --------- -------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 82,046 49,339 25,268 20,229 578 381 3,355 174 0 1,162 42,286 X X X X
2. 1984.... 11,462 4,889 861 689 750 520 810 0 0 353 8,138 X X X X
3. 1985.... 14,753 9,721 6,280 2,156 459 757 1,447 2,133 0 336 8,508 X X X X
4. 1986.... 12,210 7,232 9,512 6,942 607 340 1,209 0 0 387 9,411 X X X X
5. 1987.... 19,765 3,717 4,007 400 1,403 368 994 0 0 482 22,166 X X X X
6. 1988.... 19,188 893 9,768 975 1,563 446 1,220 0 0 744 30,169 X X X X
7. 1989.... 34,049 3,527 11,238 7,655 4,628 2,096 3,205 1,346 0 1,752 40,248 X X X X
8. 1990.... 44,109 3,130 18,465 12,219 3,806 815 6,948 3,296 0 2,389 56,257 X X X X
9. 1991.... 73,121 5,070 61,804 19,462 7,013 329 15,902 7,295 0 3,583 129,267 X X X X
10. 1992.... 109,894 12,555 77,243 21,287 6,497 197 27,757 5,385 0 4,907 186,874 X X X X
11. 1993.... 151,702 21,071 149,391 35,262 8,832 89 80,865 35,202 0 6,677 305,843 X X X X
- ------------ --------- -------- --------- ---------- -------- --------- -------- --------- --------- ---------- --------- ---------
12. Totals . 572,299 121,144 373,837 127,276 36,136 6,338 143,712 54,831 0 22,772 839,167 X X X X
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Expense Percent Discount for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
---------------------------- ----------------------------- ------------------ Inter-Co. --------------------
25 26 27 28 29 30 31 32 Pooling 34 35
Direct Direct Loss Participa Losses Loss Exp.
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percent Unpaid Unpaid
- ------------ --------- -------- --------- ---------- -------- --------- -------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <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 0 X X X X 37,746 4,540
2. 1984.... 498,770 142,622 356,148 115.0 106.9 118.5 0 0 0.0 6,745 1,393
3. 1985.... 495,076 139,817 355,259 96.3 93.3 97.5 0 0 0.0 9,156 (648)
4. 1986.... 354,057 91,050 263,007 67.1 66.2 67.4 0 0 0.0 7,548 1,863
5. 1987.... 328,430 47,397 281,033 60.0 42.0 64.6 0 0 0.0 19,655 2,511
6. 1988.... 392,702 27,109 365,593 68.7 48.0 71.0 0 0 0.0 27,088 3,081
7. 1989.... 451,242 76,922 374,320 69.1 66.5 69.6 0 0 0.0 34,105 6,143
8. 1990.... 421,451 79,386 342,065 65.9 53.0 69.9 0 0 0.0 47,225 9,032
9. 1991.... 447,904 83,869 364,035 68.1 68.0 68.1 0 0 0.0 110,393 18,874
10. 1992.... 469,141 58,494 410,647 68.8 47.6 73.4 0 0 0.0 153,295 33,579
11. 1993.... 537,908 107,085 430,823 71.6 79.8 69.9 0 0 0.0 244,760 61,083
- ------------ --------- -------- --------- ---------- -------- --------- -------- --------- --------- ---------- ---------
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 0 X X X X 697,716 141,451
- -------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 2 - SUMMARY
- ------------------------------------------------------------------------------------------------------------------------------------
1 Incurred Losses and Allocated Expenses Reported At Year End (000 omitted) Development**
Years in --------------------------------------------------------------------------------------------------- -------------------
Which 2 3 4 5 6 7 8 9 10 11 12 13
Losses 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 One Year Two Year
Incurred
- ------------ ------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 153,698 * 190,737 222,241 228,163 249,917 273,937 281,978 293,867 301,917 309,132 7,215 15,265
2. 1984.. 215,447 244,742 296,082 307,722 320,162 322,956 329,422 329,920 330,744 333,062 2,318 3,142
3. 1985... X X X X 237,407 262,437 289,631 301,135 320,889 327,271 326,139 332,558 327,006 (5,552) 867
4. 1986.. X X X X X X X X 201,436 240,445 246,466 224,571 230,912 234,896 239,275 238,049 (1,226) 3,153
5. 1987.. X X X X X X X X X X X X 233,232 247,089 249,530 252,521 251,718 251,758 257,424 5,666 5,706
6. 1988.. X X X X X X X X X X X X X X X X 284,193 312,457 323,868 336,466 333,906 338,698 4,792 2,232
7. 1989.. X X X X X X X X X X X X X X X X X X X X 332,863 330,580 344,324 347,432 348,322 890 3,998
8. 1990.. X X X X X X X X X X X X X X X X X X X X X X X X 296,040 310,870 312,106 312,837 731 1,967
9. 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 X X X X 335,255 334,859 334,159 (700) (1,096)
10. 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 X X X X 374,587 378,069 3,482 X X X X
11. 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 X X X X X X X X 402,517 X X X X X X X X
- ---------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X X 17,616 35,234
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*Reported reserves only. Subsequent development relates only to subsequent payments and reserves.
**Current year less first or second prior year, showing (redundant) or adverse.
<PAGE>
<CAPTION>
SCHEDULE P - PART 3 - SUMMARY
- ------------------------------------------------------------------------------------------------------------------------------------
12 13
1 Cumulative Paid Losses and Allocated Expenses At Year End (000 omitted) Number of Number of
Years in --------------------------------------------------------------------------------------------------- Claims Claims
Which 2 3 4 5 6 7 8 9 10 11 Closed Closed
Losses 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 W/Loss W/O Loss
Incurred Payment Payment
- ------------ ------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 000 85,680 142,858 185,356 198,582 223,753 234,398 246,135 256,725 268,007 X X X X X X X X
2. 1984.. 91,644 187,726 246,523 281,035 285,409 309,248 319,336 321,046 324,281 325,277 X X X X X X X X
3. 1985... X X X X 100,574 195,435 249,223 289,726 304,024 317,398 314,667 318,679 318,833 X X X X X X X X
4. 1986.. X X X X X X X X 68,270 135,041 169,131 197,076 214,656 224,350 226,744 229,034 X X X X X X X X
5. 1987.. X X X X X X X X X X X X 58,418 122,409 170,813 205,083 221,041 230,658 235,741 X X X X X X X X
6. 1988.. X X X X X X X X X X X X X X X X 77,857 167,372 236,249 275,497 297,153 309,272 X X X X X X X X
7. 1989.. X X X X X X X X X X X X X X X X X X X X 85,294 193,855 263,474 294,549 309,833 X X X X X X X X
8. 1990.. X X X X X X X X X X X X X X X X X X X X X X X X 77,392 175,386 233,025 258,969 X X X X X X X X
9. 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 X X X X 70,336 159,572 208,474 X X X X X X X X
10. 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 X X X X 86,782 196,097 X X X X X X X X
11. 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 X X X X X X X X 103,349 X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
Note: Net of salvage and subrogation received.
<CAPTION>
SCHEDULE P - PART 4 - SUMMARY
- ----------------------------------------------------------------------------------------------------------------
1 Bulk and Incurred But Not Reported Reserves on Losses and Allocated Expenses at Y/E (000 omitted)
Years in ---------------------------------------------------------------------------------------------------
Which 2 3 4 5 6 7 8 9 10 11
Losses 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
Incurred
- ---------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . 25,548 16,717 10,094 5,842 6,794 7,888 6,646 9,973 6,783 8,220
2. 1984... 66,402 23,773 9,769 4,368 3,600 2,420 1,878 1,931 1,854 980
3. 1985... X X X X 52,847 23,823 11,881 9,500 2,051 3,939 3,256 3,462 3,438
4. 1986... X X X X X X X X 82,191 37,605 18,584 7,635 5,990 4,844 4,421 3,780
5. 1987... X X X X X X X X X X X X 91,998 43,510 18,288 8,101 9,850 5,131 4,600
6. 1988... X X X X X X X X X X X X X X X X 87,706 42,691 13,595 16,922 10,193 10,014
7. 1989... X X X X X X X X X X X X X X X X X X X X 114,304 28,254 20,276 7,621 5,441
8. 1990... X X X X X X X X X X X X X X X X X X X X X X X X 76,684 38,909 15,799 9,899
9. 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 X X X X 152,951 76,900 50,950
10. 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 X X X X 146,794 78,327
11. 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 X X X X X X X X 159,794
- ----------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS
(000 omitted)
- --------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
----------------------------- ---------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Premiums ------------------- ------------------- Salvage Unalloc. Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Paid Reported
Losses and Ceded (2 - 3) Direct Direct Subro. Expense (5-6+7 Direct &
Incurred Assumed & Assum. Ceded & Assum. Ceded Received Payments -8+10) Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. X X X X X X X X X X X X 6 0 12 0 0 0 18 X X X X
2. 1984.... 20,279 12,312 7,967 14,329 4,324 1,137 86 125 674 11,730 0
3. 1985.... 15,268 6,275 8,993 11,385 3,736 399 34 242 622 8,636 0
4. 1986.... 9,004 (584) 9,588 8,199 1,446 477 150 23 580 7,660 0
5. 1987.... 6,905 461 6,444 2,733 1 128 4 0 219 3,075 0
6. 1988.... 7,079 3,223 3,856 5,507 2,115 556 401 0 200 3,747 0
7. 1989.... 2,176 (1) 2,177 1,585 81 50 12 0 46 1,588 0
8. 1990.... 1,530 0 1,530 1,019 31 35 0 0 4 1,027 0
9. 1991.... 2,011 0 2,011 537 0 19 0 0 2 558 0
10. 1992.... 2,614 249 2,365 700 208 8 0 0 1 501 0
11. 1993.... 1,416 32 1,384 5 0 1 0 0 1 7 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . X X X X X X X X X X X X 46,005 11,942 2,822 687 390 2,349 38,547 X X X X
- --------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
--------------------------------------- --------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
------------------- ------------------- ------------------- ------------------- Salvage Unalloc. Total Claims
13 14 15 16 17 18 19 20 and Loss Net Loss. Outstand.
Direct Direct Direct Direct Subro. Expenses & Exp. Direct &
& Assum. Ceded & Assum. Ceded & Assum. Ceded & Assum. Ceded Anticip. Unpaid Unpaid Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 237 0 0 0 0 0 6 0 0 1 244 0
2. 1984.... 156 23 0 0 0 0 40 0 0 6 179 0
3. 1985.... 33 0 0 0 0 0 6 0 0 1 40 0
4. 1986.... 8 0 1 0 0 0 0 0 0 0 9 0
5. 1987.... 31 0 20 0 0 0 2 0 0 0 53 0
6. 1988.... 38 0 20 0 0 0 0 0 0 0 58 0
7. 1989.... 103 0 30 0 0 0 0 0 0 0 133 0
8. 1990.... 274 0 50 0 0 0 0 0 0 0 324 0
9. 1991.... 537 0 50 0 0 0 0 0 0 0 587 0
10. 1992.... 787 0 175 0 0 0 0 0 0 0 962 0
11. 1993.... 1,070 12 179 0 0 0 3 0 0 1 1,241 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . 3,274 35 525 0 0 0 57 0 0 9 3,830 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Discount for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
----------------------------- ----------------------------- ------------------- -------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling Loss
Direct Direct Loss Particip. Losses Expenses
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percent. Unpaid Unpaid
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <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 0 X X X X 237 7
2. 1984.... 16,342 4,433 11,909 80.6 36.0 149.5 0 0 0.0 133 46
3. 1985.... 12,446 3,770 8,676 81.5 60.1 96.5 0 0 0.0 33 7
4. 1986.... 9,265 1,596 7,669 102.9 (273.3) 80.0 0 0 0.0 9 0
5. 1987.... 3,133 5 3,128 45.4 1.1 48.5 0 0 0.0 51 2
6. 1988.... 6,321 2,516 3,805 89.3 78.1 98.7 0 0 0.0 58 0
7. 1989.... 1,814 93 1,721 83.4 (9,300.0) 79.1 0 0 0.0 133 0
8. 1990.... 1,382 31 1,351 90.3 0.0 88.3 0 0 0.0 324 0
9. 1991.... 1,145 0 1,145 56.9 0.0 56.9 0 0 0.0 587 0
10. 1992.... 1,671 208 1,463 63.9 83.5 61.9 0 0 0.0 962 0
11. 1993.... 1,260 12 1,248 89.0 37.5 90.2 0 0 0.0 1,237 4
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
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 0 X X X X 3,764 66
- --------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
(000 omitted)
- --------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
----------------------------- ---------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Premiums ------------------- ------------------- Salvage Unalloc. Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Paid Reported -
Losses and Ceded (2 - 3) Direct Direct Subro. Expense (5-6+7 Direct &
Incurred Assumed & Assum. Ceded & Assum. Ceded Received Payments -8+10) Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <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 0 0 0 X X X X
2. 1984.... 20,184 18,166 2,018 35,826 28,701 3,866 3,272 0 370 8,089 0
3. 1985.... 19,936 17,942 1,994 26,217 19,134 2,492 2,181 0 174 7,568 0
4. 1986.... 6,537 654 5,883 2,456 0 120 0 0 523 3,099 0
5. 1987.... 3,037 304 2,733 3,304 0 164 0 0 279 3,747 0
6. 1988.... 2,466 247 2,219 1,821 0 85 0 0 232 2,138 0
7. 1989.... 1,448 145 1,303 1,141 0 110 0 0 146 1,397 0
8. 1990.... 595 127 468 449 0 50 0 0 182 681 0
9. 1991.... 4,000 0 4,000 2,530 0 256 0 0 413 3,199 0
10. 1992.... 22,525 0 22,525 14,429 0 426 0 0 2,186 17,041 0
11. 1993.... 54,150 3,606 50,544 17,418 360 301 3 0 2,598 19,954 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . X X X X X X X X X X X X 105,591 48,195 7,870 5,456 0 7,103 66,913 X X X X
- --------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
--------------------------------------- --------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
------------------- ------------------- ------------------- ------------------- Salvage Unalloc. Total Claims
13 14 15 16 17 18 19 20 and Loss Net Loss. Outstand.
Direct Direct Direct Direct Subro. Expenses & Exp. Direct &
& Assum. Ceded & Assum. Ceded & Assum. Ceded & Assum. Ceded Anticip. Unpaid Unpaid Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 12 0 0 0 0 0 2 0 0 0 14 0
2. 1984.... 30 0 0 0 0 0 4 0 0 0 34 0
3. 1985.... 0 0 0 0 0 0 0 0 0 0 0 0
4. 1986.... 0 0 0 0 0 0 0 0 0 0 0 0
5. 1987.... 0 0 0 0 0 0 0 0 0 0 0 0
6. 1988.... 26 0 0 0 0 0 3 0 0 0 29 0
7. 1989.... 0 0 0 0 0 0 0 0 0 0 0 0
8. 1990.... 5 0 0 0 0 0 1 0 0 0 6 0
9. 1991.... 97 0 0 0 0 0 12 0 0 1 110 0
10. 1992.... 1,053 0 600 0 0 0 213 0 0 23 1,889 0
11. 1993.... 8,964 563 3,362 520 0 0 1,513 1 0 141 12,896 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . 10,187 563 3,962 520 0 0 1,748 1 0 165 14,978 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Discount for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
----------------------------- ----------------------------- ------------------- -------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling Loss
Direct Direct Loss Particip. Losses Expenses
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percent. Unpaid Unpaid
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <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 0 X X X X 12 2
2. 1984.... 40,096 31,973 8,123 198.7 176.0 402.5 0 0 0.0 30 4
3. 1985.... 28,883 21,315 7,568 144.9 118.8 379.5 0 0 0.0 0 0
4. 1986.... 3,099 0 3,099 47.4 0.0 52.7 0 0 0.0 0 0
5. 1987.... 3,747 0 3,747 123.4 0.0 137.1 0 0 0.0 0 0
6. 1988.... 2,167 0 2,167 87.9 0.0 97.7 0 0 0.0 26 3
7. 1989.... 1,397 0 1,397 96.5 0.0 107.2 0 0 0.0 0 0
8. 1990.... 687 0 687 115.5 0.0 146.8 0 0 0.0 5 1
9. 1991.... 3,309 0 3,309 82.7 0.0 82.7 0 0 0.0 97 13
10. 1992.... 18,930 0 18,930 84.0 0.0 84.0 0 0 0.0 1,653 236
11. 1993.... 34,297 1,447 32,850 63.3 40.1 65.0 0 0 0.0 11,243 1,653
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
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 0 X X X X 13,066 1,912
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
(000 omitted)
- -------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
----------------------------- ---------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Premiums ------------------- ------------------- Salvage Unalloc. Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Paid Reported -
Losses and Ceded (2 - 3) Direct Direct Subro. Expense (5-6+7 Direct &
Incurred Assumed & Assum. Ceded & Assum. Ceded Received Payments -8+10) Assum.
- ----------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . X X X X X X X X X X X X 123 0 2 0 0 0 125 X X X X
2. 1984... 24,055 10,107 13,948 19,432 4,341 1,941 397 212 2,164 18,799 0
3. 1985... 23,389 1,646 21,743 16,984 3,490 1,216 221 187 1,297 15,786 0
4. 1986... 19,302 5,259 14,043 9,296 190 1,539 30 118 779 11,394 0
5. 1987... 19,965 3,630 16,335 13,050 624 2,455 45 193 1,308 16,144 0
6. 1988... 12,784 1,401 11,383 7,032 215 704 14 131 868 8,375 0
7. 1989... 4,927 302 4,625 4,141 244 483 (2) 86 252 4,634 0
8. 1990... 14,920 2,272 12,648 6,435 287 1,007 2 17 542 7,695 0
9. 1991... 39,624 17,610 22,014 16,964 5,667 2,358 852 79 816 13,619 0
10. 1992... 60,474 27,142 33,332 21,329 8,692 2,893 1,178 110 823 15,175 0
11. 1993... 89,373 41,440 47,933 12,261 6,068 1,844 836 147 751 7,952 0
- ----------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals X X X X X X X X X X X X 127,047 29,818 16,442 3,573 1,280 9,600 119,698 X X X X
- -------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
--------------------------------------- --------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
------------------- ------------------- ------------------- ------------------- Salvage Unalloc. Total Claims
13 14 15 16 17 18 19 20 and Loss Net Loss. Outstand.
Direct Direct Direct Direct Subro. Expenses & Exp. Direct &
& Assum. Ceded & Assum. Ceded & Assum. Ceded & Assum. Ceded Anticip. Unpaid Unpaid Assum.
- ----------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . 1,272 45 91 0 0 0 11 3 0 2 1,328 0
2. 1984... 299 0 23 0 0 0 6 0 0 2 330 0
3. 1985... 345 0 40 0 25 0 0 0 0 0 410 0
4. 1986... 634 0 399 0 40 0 2 0 0 1 1,076 0
5. 1987... 1,390 455 11 0 50 0 64 0 0 18 1,078 0
6. 1988... 665 83 15 0 75 0 42 0 0 12 726 0
7. 1989... 737 0 276 0 100 0 70 0 0 20 1,203 0
8. 1990... 2,257 88 209 0 125 0 159 1 0 45 2,706 0
9. 1991... 7,851 2,466 858 0 282 0 500 0 0 140 7,165 0
10. 1992... 15,478 6,555 2,498 500 301 0 1,066 0 0 385 12,673 0
11. 1993... 26,916 13,798 19,953 9,055 1,012 0 1,574 1 0 702 27,303 0
- ----------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals 57,844 23,490 24,373 9,555 2,010 0 3,494 5 0 1,327 55,998 0
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Discount for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
----------------------------- ----------------------------- ------------------- -------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling Loss
Direct Direct Loss Particip. Losses Expenses
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percent. Unpaid Unpaid
- ----------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <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 0 X X X X 1,318 10
2. 1984... 23,867 4,738 19,129 99.2 46.9 137.1 0 0 0.0 322 8
3. 1985... 19,907 3,711 16,196 85.1 225.5 74.5 0 0 0.0 385 25
4. 1986... 12,690 220 12,470 65.7 4.2 88.8 0 0 0.0 1,033 43
5. 1987... 18,346 1,124 17,222 91.9 31.0 105.4 0 0 0.0 946 132
6. 1988... 9,413 312 9,101 73.6 22.3 80.0 0 0 0.0 597 129
7. 1989... 6,079 242 5,837 123.4 80.1 126.2 0 0 0.0 1,013 190
8. 1990... 10,779 378 10,401 72.2 16.6 82.2 0 0 0.0 2,378 328
9. 1991... 29,769 8,985 20,784 75.1 51.0 94.4 0 0 0.0 6,243 922
10. 1992... 44,773 16,925 27,848 74.0 62.4 83.5 0 0 0.0 10,921 1,752
11. 1993... 65,013 29,758 35,255 72.7 71.8 73.6 0 0 0.0 24,016 3,287
- ----------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
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 0 X X X X 49,172 6,826
- -------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1D - WORKERS' COMPENSATION
(000 omitted)
- --------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
----------------------------- ---------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Premiums ------------------- ------------------- Salvage Unalloc. Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Paid Reported -
Losses and Ceded (2 - 3) Direct Direct Subro. Expense (5-6+7 Direct &
Incurred Assumed & Assum. Ceded & Assum. Ceded Received Payments -8+10) Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. X X X X X X X X X X X X 6,039 3,768 319 0 0 149 2,739 X X X X
2. 1984.... 190,669 47,080 143,589 178,534 44,046 9,723 0 2,573 7,751 151,962 0
3. 1985.... 178,423 14,563 163,860 166,665 39,963 10,345 1,680 3,131 13,112 148,479 0
4. 1986.... 199,810 42,338 157,472 120,129 30,550 6,658 16 2,373 11,162 107,383 0
5. 1987.... 206,894 8,202 198,692 131,025 8,731 9,155 0 3,992 14,986 146,435 0
6. 1988.... 294,207 4,383 289,824 195,900 2,755 11,684 0 2,079 18,476 223,305 0
7. 1989.... 377,203 30,876 346,327 219,334 20,026 12,926 0 2,799 17,666 229,900 0
8. 1990.... 350,601 37,234 313,367 182,949 4,260 11,116 118 1,410 21,021 210,708 0
9. 1991.... 326,805 7,256 319,549 139,366 3,502 7,867 107 806 20,249 163,873 0
10. 1992.... 337,564 6,195 331,369 119,107 391 4,312 17 186 19,355 142,366 0
11. 1993.... 318,612 5,338 313,274 49,880 459 1,417 41 28 13,464 64,261 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . X X X X X X X X X X X X ********* 158,451 85,522 1,979 19,377 157,391 ********* X X X X
- --------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
--------------------------------------- --------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
------------------- ------------------- ------------------- ------------------- Salvage Unalloc. Total Claims
13 14 15 16 17 18 19 20 and Loss Net Loss. Outstand.
Direct Direct Direct Direct Subro. Expenses & Exp. Direct &
& Assum. Ceded & Assum. Ceded & Assum. Ceded & Assum. Ceded Anticip. Unpaid Unpaid Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 41,022 28,236 21,331 19,114 0 0 510 367 0 414 15,560 0
2. 1984.... 7,929 4,027 798 689 0 0 349 0 0 296 4,656 0
3. 1985.... 8,422 6,489 1,099 996 0 0 254 1,421 0 216 1,085 0
4. 1986.... 5,697 4,725 7,491 6,942 0 0 322 0 0 274 2,117 0
5. 1987.... 12,119 1,006 1,278 0 0 0 446 0 0 379 13,216 0
6. 1988.... 14,250 431 2,641 0 0 0 738 0 0 628 17,826 0
7. 1989.... 22,879 2,525 2,719 2,250 0 0 1,173 0 0 997 22,993 0
8. 1990.... 27,444 541 1,664 0 0 0 1,640 0 0 1,440 31,647 0
9. 1991.... 40,702 0 26,192 0 0 0 3,028 0 0 1,725 71,647 0
10. 1992.... 64,004 891 34,943 0 0 0 5,777 0 0 2,288 106,121 0
11. 1993.... 90,744 2,416 47,403 294 0 0 18,454 39 0 2,703 156,555 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . 335,212 51,287 147,559 30,285 0 0 32,691 1,827 0 11,360 443,423 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Discount for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
----------------------------- ----------------------------- ------------------- -------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling Loss
Direct Direct Loss Particip. Losses Expenses
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percent. Unpaid Unpaid
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <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 0 X X X X 15,003 557
2. 1984.... 205,380 48,762 156,618 107.7 103.6 109.1 0 0 0.0 4,011 645
3. 1985.... 200,113 50,549 149,564 112.2 347.1 91.3 0 0 0.0 2,036 (951)
4. 1986.... 151,733 42,233 109,500 75.9 99.8 69.5 0 0 0.0 1,521 596
5. 1987.... 169,388 9,737 159,651 82.0 118.7 80.5 0 0 0.0 12,391 825
6. 1988.... 244,317 3,186 241,131 83.0 72.7 83.2 0 0 0.0 16,460 1,366
7. 1989.... 277,694 24,801 252,893 73.6 80.3 73.0 0 0 0.0 20,823 2,170
8. 1990.... 247,274 4,919 242,355 70.5 13.2 77.3 0 0 0.0 28,567 3,080
9. 1991.... 239,129 3,609 235,520 73.2 49.7 73.7 0 0 0.0 66,894 4,753
10. 1992.... 249,786 1,299 248,487 74.0 21.0 75.0 0 0 0.0 98,056 8,065
11. 1993.... 224,065 3,249 220,816 70.3 60.9 70.5 0 0 0.0 135,437 21,118
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
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 0 X X X X 401,199 42,224
- --------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1E - COMMERCIAL MULTIPLE PERIL
(000 omitted)
- --------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
----------------------------- ---------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Premiums ------------------- ------------------- Salvage Unalloc. Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Paid Reported -
Losses and Ceded (2 - 3) Direct Direct Subro. Expense (5-6+7 Direct &
Incurred Assumed & Assum. Ceded & Assum. Ceded Received Payments -8+10) Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. X X X X X X X X X X X X 365 0 690 734 0 63 384 X X X X
2. 1984.... 79,729 19,552 60,177 82,731 16,624 12,658 1,134 2,270 6,832 84,463
3. 1985.... 108,192 28,367 79,825 90,926 15,715 19,218 4,864 1,983 8,295 97,860
4. 1986.... 96,931 25,228 71,703 47,691 7,694 18,370 5,773 2,136 7,345 59,939
5. 1987.... 67,974 14,978 52,996 25,906 961 6,913 428 1,010 3,519 34,949
6. 1988.... 33,129 5,975 27,154 14,460 1,760 3,666 127 188 2,757 18,996
7. 1989.... 10,757 2,243 8,514 8,831 2,280 534 38 61 697 7,744
8. 1990.... 6,058 0 6,058 4,853 774 401 20 2 426 4,886
9. 1991.... 6,446 9 6,437 3,218 2 791 81 5 198 4,124
10. 1992.... 8,692 744 7,948 6,912 502 417 16 6 245 7,056
11. 1993.... 10,281 1,890 8,391 3,306 103 217 8 2 415 3,827
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . X X X X X X X X X X X X 289,199 46,415 63,875 13,223 7,663 30,792 324,228 X X X X
- --------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
--------------------------------------- --------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
------------------- ------------------- ------------------- ------------------- Salvage Unalloc. Total Claims
13 14 15 16 17 18 19 20 and Loss Net Loss. Outstand.
Direct Direct Direct Direct Subro. Expenses & Exp. Direct &
& Assum. Ceded & Assum. Ceded & Assum. Ceded & Assum. Ceded Anticip. Unpaid Unpaid Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 1,993 1,060 0 0 0 0 471 0 0 68 1,472 0
2. 1984.... 978 0 0 0 0 0 336 0 0 49 1,363 0
3. 1985.... 1,042 650 50 0 0 0 258 0 0 38 738 0
4. 1986.... 1,925 858 50 0 0 0 510 0 0 75 1,702 0
5. 1987.... 753 150 451 400 0 0 273 0 0 40 967 0
6. 1988.... 731 103 2,076 975 0 0 216 0 0 32 1,977 0
7. 1989.... 320 65 126 0 0 0 11 0 0 2 394 0
8. 1990.... 675 115 151 50 0 0 57 0 0 8 726 0
9. 1991.... 1,907 362 558 80 2 0 18 0 0 2 2,045 0
10. 1992.... 2,614 945 282 22 5 0 90 0 0 14 2,038 0
11. 1993.... 5,491 1,986 1,592 751 16 0 1,894 0 0 312 6,568 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . 18,429 6,294 5,336 2,278 23 0 4,134 0 0 640 19,990 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Discount for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
----------------------------- ----------------------------- ------------------- -------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling Loss
Direct Direct Loss Particip. Losses Expenses
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percent. Unpaid Unpaid
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <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 0 X X X X 933 539
2. 1984.... 103,584 17,758 85,826 129.9 90.8 142.6 0 0 0.0 978 385
3. 1985.... 119,827 21,229 98,598 110.8 74.8 123.5 0 0 0.0 442 296
4. 1986.... 75,966 14,325 61,641 78.4 56.8 86.0 0 0 0.0 1,117 585
5. 1987.... 37,855 1,939 35,916 55.7 12.9 67.8 0 0 0.0 654 313
6. 1988.... 23,938 2,965 20,973 72.3 49.6 77.2 0 0 0.0 1,729 248
7. 1989.... 10,521 2,383 8,138 97.8 106.2 95.6 0 0 0.0 381 13
8. 1990.... 6,571 959 5,612 108.5 0.0 92.6 0 0 0.0 661 65
9. 1991.... 6,694 525 6,169 103.8 5,833.3 95.8 0 0 0.0 2,023 22
10. 1992.... 10,579 1,485 9,094 121.7 199.6 114.4 0 0 0.0 1,929 109
11. 1993.... 13,243 2,848 10,395 128.8 150.7 123.9 0 0 0.0 4,346 2,222
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
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 0 X X X X 15,193 4,797
- --------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
(000 omitted)
- --------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
----------------------------- ---------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Premiums ------------------- ------------------- Salvage Unalloc. Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Paid Reported -
Losses and Ceded (2 - 3) Direct Direct Subro. Expense (5-6+7 Direct &
Incurred Assumed & Assum. Ceded & Assum. Ceded Received Payments -8+10) Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <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 0 0 0 X X X X
2. 1984.... 0 0 0 0 0 0 0 0 0 0 0
3. 1985.... 0 0 0 0 0 0 0 0 0 0 0
4. 1986.... 0 0 0 0 0 0 0 0 0 0 0
5. 1987.... 0 0 0 0 0 0 0 0 0 0 0
6. 1988.... 470 424 46 0 0 0 0 0 0 0 0
7. 1989.... 488 468 20 0 0 0 0 0 0 0 0
8. 1990.... 1,497 696 801 0 0 0 0 0 0 0 0
9. 1991.... 5,904 3,003 2,901 3 1 15 3 0 0 14 0
10. 1992.... 6,186 3,474 2,712 29 15 140 74 0 53 133 0
11. 1993.... 5,392 4,380 1,012 0 0 0 0 0 43 43 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . X X X X X X X X X X X X 32 16 155 77 0 96 190 X X X X
- --------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
--------------------------------------- --------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
------------------- ------------------- ------------------- ------------------- Salvage Unalloc. Total Claims
13 14 15 16 17 18 19 20 and Loss Net Loss. Outstand.
Direct Direct Direct Direct Subro. Expenses & Exp. Direct &
& Assum. Ceded & Assum. Ceded & Assum. Ceded & Assum. Ceded Anticip. Unpaid Unpaid Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 1 0 0 0 0 0 0 0 0 0 1 0
2. 1984.... 0 0 0 0 0 0 0 0 0 0 0 0
3. 1985.... 0 0 0 0 0 0 0 0 0 0 0 0
4. 1986.... 0 0 0 0 0 0 0 0 0 0 0 0
5. 1987.... 0 0 0 0 0 0 0 0 0 0 0 0
6. 1988.... 0 0 0 0 0 0 0 0 0 0 0 0
7. 1989.... 0 0 0 0 0 0 0 0 0 0 0 0
8. 1990.... 378 162 100 50 0 0 83 0 0 4 353 0
9. 1991.... 1,038 519 500 250 0 0 291 0 0 14 1,074 0
10. 1992.... 450 225 750 375 0 0 235 0 0 16 851 0
11. 1993.... 171 48 1,275 1,173 18 0 389 0 0 31 663 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . 2,038 954 2,625 1,848 18 0 998 0 0 65 2,942 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Discount for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
----------------------------- ----------------------------- ------------------- -------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling Loss
Direct Direct Loss Particip. Losses Expenses
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percent. Unpaid Unpaid
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <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 0 X X X X 1 0
2. 1984.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
3. 1985.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
4. 1986.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
5. 1987.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
6. 1988.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
7. 1989.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
8. 1990.... 565 212 353 37.7 30.5 44.1 0 0 0.0 266 87
9. 1991.... 1,861 773 1,088 31.5 25.7 37.5 0 0 0.0 769 305
10. 1992.... 1,673 689 984 27.0 19.8 36.3 0 0 0.0 600 251
11. 1993.... 1,927 1,221 706 35.7 27.9 69.8 0 0 0.0 225 438
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
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 0 X X X X 1,861 1,081
- --------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
(000 omitted)
- --------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
----------------------------- ---------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Premiums ------------------- ------------------- Salvage Unalloc. Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Paid Reported -
Losses and Ceded (2 - 3) Direct Direct Subro. Expense (5-6+7 Direct &
Incurred Assumed & Assum. Ceded & Assum. Ceded Received Payments -8+10) Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <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 0 0 0 X X X X
2. 1984.... 0 0 0 0 0 0 0 0 0 0 0
3. 1985.... 0 0 0 0 0 0 0 0 0 0 0
4. 1986.... 0 0 0 0 0 0 0 0 0 0 0
5. 1987.... 0 0 0 0 0 0 0 0 0 0 0
6. 1988.... 0 0 0 0 0 0 0 0 0 0 0
7. 1989.... 0 0 0 0 0 0 0 0 0 0 0
8. 1990.... 0 0 0 0 0 0 0 0 0 0 0
9. 1991.... 0 0 0 0 0 0 0 0 0 0 0
10. 1992.... 0 0 0 0 0 0 0 0 0 0 0
11. 1993.... 3 0 3 0 0 0 0 0 0 0 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . X X X X X X X X X X X X 0 0 0 0 0 0 0 X X X X
- --------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
--------------------------------------- --------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
------------------- ------------------- ------------------- ------------------- Salvage Unalloc. Total Claims
13 14 15 16 17 18 19 20 and Loss Net Loss. Outstand.
Direct Direct Direct Direct Subro. Expenses & Exp. Direct &
& Assum. Ceded & Assum. Ceded & Assum. Ceded & Assum. Ceded Anticip. Unpaid Unpaid Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 0 0 0 0 0 0 0 0 0 0 0 0
2. 1984.... 0 0 0 0 0 0 0 0 0 0 0 0
3. 1985.... 0 0 0 0 0 0 0 0 0 0 0 0
4. 1986.... 0 0 0 0 0 0 0 0 0 0 0 0
5. 1987.... 0 0 0 0 0 0 0 0 0 0 0 0
6. 1988.... 0 0 0 0 0 0 0 0 0 0 0 0
7. 1989.... 0 0 0 0 0 0 0 0 0 0 0 0
8. 1990.... 0 0 0 0 0 0 0 0 0 0 0 0
9. 1991.... 0 0 0 0 0 0 0 0 0 0 0 0
10. 1992.... 0 0 0 0 0 0 0 0 0 0 0 0
11. 1993.... 0 0 1 0 8 0 0 0 0 0 9 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . 0 0 1 0 8 0 0 0 0 0 9 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Discount for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
----------------------------- ----------------------------- ------------------- -------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling Loss
Direct Direct Loss Particip. Losses Expenses
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percent. Unpaid Unpaid
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <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 0 X X X X 0 0
2. 1984.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
3. 1985.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
4. 1986.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
5. 1987.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
6. 1988.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
7. 1989.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
8. 1990.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
9. 1991.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
10. 1992.... 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
11. 1993.... 9 0 9 300.0 0.0 300.0 0 0 0.0 1 8
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
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 0 X X X 1 8
- --------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT (ALL PERILS),
BOILER AND MACHINERY)
(000 omitted)
- --------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
----------------------------- ---------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Premiums ------------------- ------------------- Salvage Unalloc. Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Paid Reported -
Losses and Ceded (2 - 3) Direct Direct Subro. Expense (5-6+7 Direct &
Incurred Assumed & Assum. Ceded & Assum. Ceded Received Payments -8+10) Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. X X X X X X X X X X X X 39 5 0 0 0 1 35 X X X X
2. 1984.... 4,008 1,117 2,891 4,483 0 493 1 0 317 5,292 0
3. 1985.... 7,659 589 7,070 2,589 (157) 515 2 0 589 3,848 0
4. 1986.... 7,654 754 6,900 1,418 4 256 2 0 492 2,160 0
5. 1987.... 2,103 179 1,924 746 12 38 3 0 168 937 0
6. 1988.... 1,690 9 1,681 990 35 78 9 0 140 1,164 0
7. 1989.... 1,318 0 1,318 1,198 292 52 21 0 1 938 0
8. 1990.... 1,398 45 1,353 505 61 45 10 0 11 490 0
9. 1991.... 2,372 0 2,372 2,223 7 163 1 0 137 2,515 0
10. 1992.... 3,788 149 3,639 1,796 14 143 2 0 119 2,042 0
11. 1993.... 6,301 480 5,821 1,936 19 113 2 0 95 2,123 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . X X X X X X X X X X X X 17,923 292 1,896 53 0 2,070 21,544 X X X X
- --------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
--------------------------------------- --------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
------------------- ------------------- ------------------- ------------------- Salvage Unalloc. Total Claims
13 14 15 16 17 18 19 20 and Loss Net Loss. Outstand.
Direct Direct Direct Direct Subro. Expenses & Exp. Direct &
& Assum. Ceded & Assum. Ceded & Assum. Ceded & Assum. Ceded Anticip. Unpaid Unpaid Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 245 178 40 31 0 0 16 13 0 0 79 0
2. 1984.... 9 0 1 0 0 0 0 0 0 0 10 0
3. 1985.... 1,234 0 0 0 0 0 0 0 0 0 1,234 0
4. 1986.... 62 10 0 0 0 0 0 0 0 0 52 0
5. 1987.... 21 5 0 0 0 0 37 0 0 0 53 0
6. 1988.... 45 7 0 0 0 0 0 0 0 0 38 0
7. 1989.... 49 16 1 0 0 0 0 0 0 0 34 0
8. 1990.... 49 2 3 0 0 0 0 0 0 0 50 0
9. 1991.... 148 22 26 5 0 0 1 0 0 1 149 0
10. 1992.... 350 97 65 18 0 0 2 0 0 2 304 0
11. 1993.... 1,574 458 464 207 1 0 100 0 0 18 1,492 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . 3,786 795 600 261 1 0 156 13 0 21 3,495 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Discount for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
----------------------------- ----------------------------- ------------------- -------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling Loss
Direct Direct Loss Particip. Losses Expenses
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percent. Unpaid Unpaid
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <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 0 X X X X 76 3
2. 1984.... 5,303 1 5,302 132.3 0.1 183.4 0 0 0.0 10 0
3. 1985.... 4,927 (155) 5,082 64.3 (26.3) 71.9 0 0 0.0 1,234 0
4. 1986.... 2,228 16 2,212 29.1 2.1 32.1 0 0 0.0 52 0
5. 1987.... 1,010 20 990 48.0 11.2 51.5 0 0 0.0 16 37
6. 1988.... 1,253 51 1,202 74.1 566.7 71.5 0 0 0.0 38 0
7. 1989.... 1,301 329 972 98.7 0.0 73.7 0 0 0.0 34 0
8. 1990.... 613 73 540 43.8 162.2 39.9 0 0 0.0 50 0
9. 1991.... 2,699 35 2,664 113.8 0.0 112.3 0 0 0.0 147 2
10. 1992.... 2,477 131 2,346 65.4 87.9 64.5 0 0 0.0 300 4
11. 1993.... 4,301 686 3,615 68.3 142.9 62.1 0 0 0.0 1,373 119
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
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 0 X X X X 3,330 165
- --------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
(000 omitted)
- --------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
----------------------------- ---------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Premiums ------------------- ------------------- Salvage Unalloc. Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Paid Reported -
Losses and Ceded (2 - 3) Direct Direct Subro. Expense (5-6+7 Direct &
Incurred Assumed & Assum. Ceded & Assum. Ceded Received Payments -8+10) Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. X X X X X X X X X X X X 7,196 6,135 1,480 (111) 0 453 3,105 X X X X
2. 1984.... 8,504 4,672 3,832 3,507 430 396 0 0 74 3,547 0
3. 1985.... 7,428 547 6,881 2,680 400 166 117 2 82 2,411 0
4. 1986.... 11,906 (1,276) 13,182 5,945 2,071 509 286 0 177 4,274 0
5. 1987.... 11,841 (1,881) 13,722 2,394 363 263 5 0 71 2,360 0
6. 1988.... 3,526 (88) 3,614 3,260 450 399 0 0 65 3,274 0
7. 1989.... 6,343 197 6,146 5,508 66 145 15 0 172 5,744 0
8. 1990.... 7,613 1,321 6,292 4,553 1,398 729 151 2 265 3,998 0
9. 1991.... 5,976 (463) 6,439 1,100 31 272 59 0 55 1,337 0
10. 1992.... 6,568 773 5,795 2,113 32 253 9 1 29 2,354 0
11. 1993.... 19,975 5,668 14,307 420 4 109 26 0 411 910 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . X X X X X X X X X X X X 38,676 11,380 4,721 557 5 1,854 33,314 X X X X
- --------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
--------------------------------------- --------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
------------------- ------------------- ------------------- ------------------- Salvage Unalloc. Total Claims
13 14 15 16 17 18 19 20 and Loss Net Loss. Outstand.
Direct Direct Direct Direct Subro. Expenses & Exp. Direct &
& Assum. Ceded & Assum. Ceded & Assum. Ceded & Assum. Ceded Anticip. Unpaid Unpaid Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 5,237 754 421 0 0 0 2,191 0 0 663 7,758 0
2. 1984.... 201 0 21 0 5 0 0 0 0 0 227 0
3. 1985.... 86 0 156 0 10 0 19 0 0 6 277 0
4. 1986.... 1,535 0 494 0 10 0 248 0 0 7 2,294 0
5. 1987.... 388 0 102 0 15 0 21 0 0 6 532 0
6. 1988.... 373 0 105 0 20 0 45 0 0 14 557 0
7. 1989.... 398 0 75 0 30 0 13 0 0 4 520 0
8. 1990.... 1,338 0 150 0 30 0 0 0 0 0 1,518 0
9. 1991.... 1,359 0 617 0 332 0 38 0 0 12 2,358 0
10. 1992.... 1,378 56 1,106 20 100 0 290 0 0 80 2,878 0
11. 1993.... 2,127 48 5,896 477 830 0 710 0 0 197 9,235 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . 14,420 858 9,143 497 1,382 0 3,575 0 0 989 28,154 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Discount for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
----------------------------- ----------------------------- ------------------- -------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling Loss
Direct Direct Loss Particip. Losses Expenses
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percent. Unpaid Unpaid
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <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 0 X X X X 4,904 2,854
2. 1984.... 4,204 430 3,774 49.4 9.2 98.5 0 0 0.0 222 5
3. 1985.... 3,205 517 2,688 43.1 94.5 39.1 0 0 0.0 242 35
4. 1986.... 8,925 2,357 6,568 75.0 (184.7) 49.8 0 0 0.0 2,029 265
5. 1987.... 3,260 368 2,892 27.5 (19.6) 21.1 0 0 0.0 490 42
6. 1988.... 4,281 450 3,831 121.4 (511.4) 106.0 0 0 0.0 478 79
7. 1989.... 6,345 81 6,264 100.0 41.1 101.9 0 0 0.0 473 47
8. 1990.... 7,065 1,549 5,516 92.8 117.3 87.7 0 0 0.0 1,488 30
9. 1991.... 3,785 90 3,695 63.3 (19.4) 57.4 0 0 0.0 1,976 382
10. 1992.... 5,349 117 5,232 81.4 15.1 90.3 0 0 0.0 2,408 470
11. 1993.... 10,700 555 10,145 53.6 9.8 70.9 0 0 0.0 7,498 1,737
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
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 0 X X X X 22,208 5,946
- --------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
(000 omitted)
- --------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
----------------------------- ---------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Premiums ------------------- ------------------- Salvage Unalloc. Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Paid Reported -
Losses and Ceded (2 - 3) Direct Direct Subro. Expense (5-6+7 Direct &
Incurred Assumed & Assum. Ceded & Assum. Ceded Received Payments -8+10) Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. X X X X X X X X X X X X 958 413 (2,425) (5,111) 0 66 3,297 X X X X
2. 1984.... 33,479 14,855 18,624 36,385 23,921 17,136 8,819 0 1,830 22,611 0
3. 1985.... 74,722 50,385 24,337 36,733 20,974 21,347 11,814 0 3,510 28,802 0
4. 1986.... 120,483 56,536 63,947 39,230 16,266 20,558 9,185 0 3,279 37,616 0
5. 1987.... 146,969 58,082 88,887 36,589 19,450 23,207 10,608 0 2,157 31,895 0
6. 1988.... 154,675 37,465 117,210 35,033 5,629 18,169 2,188 0 2,564 47,949 0
7. 1989.... 176,092 49,245 126,847 42,783 8,919 21,663 3,880 0 4,737 56,384 0
8. 1990.... 170,611 66,453 104,158 35,723 18,393 15,448 5,840 0 3,939 30,877 0
9. 1991.... 179,918 49,021 130,897 21,845 9,920 15,630 3,954 0 4,148 27,749 0
10. 1992.... 170,424 46,207 124,217 10,654 16 6,349 526 0 4,482 20,943 0
11. 1993.... 164,043 41,220 122,823 1,843 0 1,561 0 0 3,052 6,456 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . X X X X X X X X X X X X 297,776 123,901 158,643 51,703 0 33,764 314,579 X X X X
- --------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
--------------------------------------- --------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
------------------- ------------------- ------------------- ------------------- Salvage Unalloc. Total Claims
13 14 15 16 17 18 19 20 and Loss Net Loss. Outstand.
Direct Direct Direct Direct Subro. Expenses & Exp. Direct &
& Assum. Ceded & Assum. Ceded & Assum. Ceded & Assum. Ceded Anticip. Unpaid Unpaid Assum.
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. (364) (802) 0 0 578 381 50 0 0 0 685 0
2. 1984.... 1,039 839 5 0 745 520 75 0 0 0 505 0
3. 1985.... 2,606 2,582 3,570 1,160 424 757 850 712 0 76 2,315 0
4. 1986.... 2,281 1,626 755 0 557 340 125 0 0 29 1,781 0
5. 1987.... 4,980 2,100 1,506 0 1,338 368 150 0 0 38 5,544 0
6. 1988.... 2,567 223 4,008 0 1,468 446 175 0 0 57 7,606 0
7. 1989.... 8,907 853 6,256 5,405 4,468 2,096 1,936 1,346 0 728 12,595 0
8. 1990.... 10,445 1,764 14,270 12,119 3,616 815 5,000 3,295 0 883 16,221 0
9. 1991.... 17,813 1,151 30,550 19,119 6,343 329 12,000 7,295 0 1,682 40,494 0
10. 1992.... 18,256 2,148 35,169 20,318 6,014 197 20,000 5,385 0 2,072 53,463 0
11. 1993.... 9,248 (49) 61,920 21,361 6,839 89 55,873 35,162 0 2,267 79,584 0
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
12. Totals . 77,778 12,435 158,009 79,482 32,390 6,338 96,234 53,195 0 7,832 220,793 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Discount for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
----------------------------- ----------------------------- ------------------- -------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling Loss
Direct Direct Loss Particip. Losses Expenses
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percent. Unpaid Unpaid
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <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 0 X X X X 438 247
2. 1984.... 57,215 34,099 23,116 170.9 229.5 124.1 0 0 0.0 205 300
3. 1985.... 69,116 37,999 31,117 92.5 75.4 127.9 0 0 0.0 2,434 (119)
4. 1986.... 66,814 27,417 39,397 55.5 48.5 61.6 0 0 0.0 1,410 371
5. 1987.... 69,965 32,526 37,439 47.6 56.0 42.1 0 0 0.0 4,386 1,158
6. 1988.... 64,041 8,486 55,555 41.4 22.7 47.4 0 0 0.0 6,352 1,254
7. 1989.... 91,478 22,499 68,979 51.9 45.7 54.4 0 0 0.0 8,905 3,690
8. 1990.... 89,324 42,226 47,098 52.4 63.5 45.2 0 0 0.0 10,832 5,389
9. 1991.... 110,011 41,768 68,243 61.1 85.2 52.1 0 0 0.0 28,093 12,401
10. 1992.... 102,996 28,590 74,406 60.4 61.9 59.9 0 0 0.0 30,959 22,504
11. 1993.... 142,603 56,563 86,040 86.9 137.2 70.1 0 0 0.0 49,856 29,728
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
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 0 X X X X 143,870 76,923
- --------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
(000 omitted)
- ------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
------------------------------- -------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Prem Were -------------------- ------------------- Salvage Unalloc. Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Pd Reported -
Loss Were and Ceded (2 - 3) Direct Direct Subrog. Expense (5-6+7 Direct and
Incurred Assum. & Assum. Ceded & Assum. Ceded Rec'd Payments -8+10) Assum.
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X 4,662 266 950 22 221 1,667 6,991 X X X X
2. 1992. 12,287 2,068 10,219 11,259 1,478 322 47 13 74 10,130 X X X X
3. 1993. 16,189 4,322 11,867 7,936 1,018 239 27 4 73 7,203 X X X X
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
4. Total X X X X X X X X X X X X 23,857 2,762 1,511 96 238 1,814 24,324 X X X X
- ------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
----------------------------------------- -------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
-------------------- -------------------- --------------------- ---------------- Salvage Unalloc Total Claims
13 14 15 16 17 18 19 20 and Loss Net Losses Outstanding
Direct Direct Direct Direct Subrog. Expense & Expenses Direct &
& Assum. Ceded and Assum. Ceded and Assum. Ceded & Assum. Ceded Antic. Unpaid Unpaid Assum.
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 3,379 946 186 8 4 0 16 0 0 18 2,649 0
2. 1992. 3,151 810 335 34 11 0 8 0 0 9 2,670 0
3. 1993. 3,290 1,044 1,019 378 30 0 200 0 0 69 3,186 0
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ---------- -----------
4. Total 9,820 2,800 1,540 420 45 0 224 0 0 96 8,505 0
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Disc. for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
------------------------------- ------------------------------- ---------------- ------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling
Direct Direct Loss Particip. Losses Loss Exp.
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percentage Unpaid Unpaid
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <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 0 X X X X 2,611 38
2. 1992. 15,169 2,369 12,800 123.5 114.6 125.3 0 0 0.0 2,642 28
3. 1993. 12,856 2,467 10,389 79.4 57.1 87.5 0 0 0.0 2,887 299
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
4. Total 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 0 X X X X 8,140 365
- ------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<CAPTION>
SCHEDULE P - PART 1J - AUTO PHYSICAL DAMAGE
(000 omitted)
- ------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
------------------------------- -------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Prem Were -------------------- ------------------- Salvage Unallocate Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Pd. Reported -
Loss Were and Ceded (2 - 3) Direct Direct Subrog. Expense (5-6+7 Direct and
Incurred Assum. and Assum Ceded and Assum. Ceded Rec'd Payments -8+10) Assum.
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X 331 3 29 0 4,047 2,933 3,290 X X X X
2. 1992. 5,338 927 4,411 2,666 376 118 29 101 113 2,492 0
3. 1993. 24,452 2,217 22,235 10,830 630 465 4 268 486 11,147 0
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
4. Total X X X X X X X X X X X X 13,827 1,009 612 33 4,416 3,532 16,929 X X X X
- ------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
----------------------------------------- -------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
-------------------- -------------------- --------------------- ---------------- Salvage Unalloc Total Claims
13 14 15 16 17 18 19 20 and Loss Net Losses Outstanding
Direct Direct Direct Direct Subrog. Expense & Expenses Direct &
& Assum. Ceded and Assum. Ceded and Assum. Ceded & Assum. Ceded Antic. Unpaid Unpaid Assum.
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 513 3 105 0 0 0 0 0 0 0 615 0
2. 1992. 325 3 241 0 1 0 0 0 0 0 564 0
3. 1993. 972 30 1,590 0 3 0 33 0 0 108 2,676 0
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ---------- -----------
4. Total 1,810 36 1,936 0 4 0 33 0 0 108 3,855 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Disc. for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
------------------------------- ------------------------------- ---------------- ------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling
Direct Direct Loss Particip. Losses Loss Exp.
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percentage Unpaid Unpaid
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <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 0 X X X X 615 0
2. 1992. 3,464 408 3,056 64.9 44.0 69.3 0 0 0.0 563 1
3. 1993. 14,487 664 13,823 59.2 30.0 62.2 0 0 0.0 2,532 144
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
4. Total 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 0 X X X X 3,710 145
- ------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAGE GUARANTY
(000 omitted)
- ------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
------------------------------- -------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Prem Were -------------------- ------------------- Salvage Unallocate Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Pd Reported -
Loss Were and Ceded (2 - 3) Direct Direct Subrog. Expense (5-6+7 Direct and
Incurred Assum. & Assum. Ceded & Assum. Ceded Rec'd Payments -8+10) Assum.
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X 396 0 145 0 0 63 604 X X X X
2. 1992. 10,444 2,537 7,907 2,668 308 818 86 0 165 3,257 X X X X
3. 1993. 19,599 7,065 12,534 1,097 620 262 155 0 144 728 X X X X
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
4. Total X X X X X X X X X X X X 4,161 928 1,225 241 0 372 4,589 X X X X
- ------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
----------------------------------------- -------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
-------------------- -------------------- --------------------- ---------------- Salvage Unalloc Total Claims
13 14 15 16 17 18 19 20 and Loss Net Losses Outstanding
Direct Direct Direct Direct Subrog. Expense & Expenses Direct &
& Assum. Ceded and Assum. Ceded & Assum. Ceded & Assum. Ceded Antic. Unpaid Unpaid Assum.
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 366 0 0 0 0 0 19 0 0 2 387 0
2. 1992. 1,984 825 0 0 0 0 70 33 0 7 1,236 0
3. 1993. 463 277 2,329 1,031 0 0 48 0 0 5 1,537 0
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ---------- -----------
4. Total 2,813 1,102 2,329 1,031 0 0 137 33 0 14 3,160 0
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Disc. for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
------------------------------- ------------------------------- ---------------- ------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling
Direct Direct Loss Particip. Losses Loss Exp.
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percentage Unpaid Unpaid
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <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 0 X X X X 366 21
2. 1992. 5,712 1,219 4,493 54.7 48.0 56.8 0 0 0.0 1,159 77
3. 1993. 4,348 2,083 2,265 22.2 29.5 18.1 0 0 0.0 1,484 53
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
4. Total 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 0 X X X X 3,009 151
- ------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<CAPTION>
SCHEDULE P - PART 1L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
(000 omitted)
- ------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
------------------------------- -------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Prem Were -------------------- ------------------- Salvage Unallocate Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Pd Reported -
Loss Were and Ceded (2 - 3) Direct Direct Subrog. Expense (5-6+7 Direct and
Incurred Assum. & Assum. Ceded and Assum. Ceded Rec'd Payments -8+10) Assum.
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X 19 2 0 0 0 370 387 X X X X
2. 1992. 33,257 32,472 785 5,002 4,798 302 259 0 31 278 X X X X
3. 1993. 19,188 16,560 2,628 5,047 4,843 239 235 0 95 303 X X X X
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
4. Total X X X X X X X X X X X X 10,068 9,643 541 494 0 496 968 X X X X
- ------------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
----------------------------------------- -------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
-------------------- -------------------- --------------------- ---------------- Salvage Unalloc Total Claims
13 14 15 16 17 18 19 20 and Loss Net Losses Outstanding
Direct Direct Direct Direct Subrog. Expense & Expenses Direct &
& Assum. Ceded and Assum. Ceded & Assum. Ceded & Assum. Ceded Antic. Unpaid Unpaid Assum.
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 35 4 0 0 0 0 0 0 0 2 33 0
2. 1992. 52 0 0 0 0 0 6 0 0 11 69 0
3. 1993. 548 440 1,158 15 0 0 75 0 0 121 1,447 0
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ---------- -----------
4. Total 635 444 1,158 15 0 0 81 0 0 134 1,549 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Expense Percentag Dis. for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
------------------------------- ------------------------------- ---------------- ------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling
Direct Direct Loss Particip. Losses Loss Exp.
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percentage Unpaid Unpaid
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <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 0 X X X X 31 2
2. 1992. 5,404 5,057 347 16.2 15.6 44.2 0 0 0.0 52 17
3. 1993. 7,283 5,533 1,750 38.0 33.4 66.6 0 0 0.0 1,251 196
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ----------
4. Total 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 0 X X X X 1,334 215
- ------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1M - INTERNATIONAL
(000 omitted)
- -----------------------------------------------------------------------------------------------------------------------
Premiums Earned Loss and Loss Expense Payments
1 ------------------------------- -------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Prem Were -------------------- ------------------- Salvage Unallocate Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Pd Reported
Loss Were and Ceded (2 - 3) Direct Direct Subrog. Expense (5-6+7 Direct &
Incurred Assum. and Assum Ceded and Assum. Ceded Rec'd Payments -8+10) Assum.
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ---------
<S> <C> <C> <C> <C> <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 0 0 0 X X X X
2. 1984. 0 0 0 0 0 0 0 0 0 0 X X X X
3. 1985. 0 0 0 0 0 0 0 0 0 0 X X X X
4. 1986. 0 0 0 0 0 0 0 0 0 0 X X X X
5. 1987. 0 0 0 0 0 0 0 0 0 0 X X X X
6. 1988. 0 0 0 0 0 0 0 0 0 0 X X X X
7. 1989. 0 0 0 0 0 0 0 0 0 0 X X X X
8. 1990. 0 0 0 0 0 0 0 0 0 0 X X X X
9. 1991. 0 0 0 0 0 0 0 0 0 0 X X X X
10. 1992. 0 0 0 0 0 0 0 0 0 0 X X X X
11. 1993. 61 0 61 62 0 0 0 0 0 62 X X X X
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ---------
12. Total X X X X X X X X X X X X 62 0 0 0 0 0 62 X X X X
- -----------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received
<PAGE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
----------------------------------------- -------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
-------------------- -------------------- --------------------- ---------------- Salvage Unall. Total Claims
13 14 15 16 17 18 19 20 and Loss Net Loss Outstand.
Direct Direct Direct Direct Subrog. Exp. and Exp. Direct
& Assum. Ceded and Assum. Ceded and Assum. Ceded &Assum. Ceded Antic. Unpaid Unpaid & Assum.
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0
2. 1984. 0 0 0 0 0 0 0 0 0 0 0 0
3. 1985. 0 0 0 0 0 0 0 0 0 0 0 0
4. 1986. 0 0 0 0 0 0 0 0 0 0 0 0
5. 1987. 0 0 0 0 0 0 0 0 0 0 0 0
6. 1988. 0 0 0 0 0 0 0 0 0 0 0 0
7. 1989. 0 0 0 0 0 0 0 0 0 0 0 0
8. 1990. 0 0 0 0 0 0 0 0 0 0 0 0
9. 1991. 0 0 0 0 0 0 0 0 0 0 0 0
10. 1992. 0 0 0 0 0 0 0 0 0 0 0 0
11. 1993. 108 0 4 0 0 0 0 0 0 0 112 0
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- --------- ---------
12. Total 108 0 4 0 0 0 0 0 0 0 112 0
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Disc. for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
------------------------------- ------------------------------- ---------------- Inter-Co. -----------------
25 26 27 28 29 30 31 32 Pooling 34 35
Direct Direct Loss Particip. Losses Loss Exp.
and Assum Ceded Net * and Assum Ceded Net Loss Expense Percentage Unpaid Unpaid
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ---------
<S> <C> <C> <C> <C> <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 0 0 X X X X 0 0
2. 1984. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
3. 1985. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
4. 1986. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
5. 1987. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
6. 1988. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
7. 1989. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
8. 1990. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
9. 1991. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
10. 1992. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
11. 1993. 174 0 174 285.2 0.0 285.2 0 0 0.0 112 0
- --------- --------- ---------- ---------- --------- ---------- ---------- -------- ------- ---------- ------- ---------
12. Total X X X X X X X X X X X X X X X X X X X X X X X 0 0 X X X X 112 0
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1N - REINSURANCE A
(000 omitted)
- ------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
-------------------------------- ------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Prem Were --------------------- ----------------- Salvage Unallocate Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Pd Reported -
Loss Were and Ceded (2 - 3) Direct Direct Subrog. Expense (5-6+7 Direct and
Incurred Assum. & Assum. Ceded & Assum. Ceded Rec'd Payments -8+10) Assum.
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------ ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988. 0 0 0 0 0 0 0 0 0 0 X X X X
2. 1989. 0 0 0 0 0 0 0 0 0 0 X X X X
3. 1990. 0 0 0 0 0 0 0 0 0 0 X X X X
4. 1991. 0 0 0 0 0 0 0 0 0 0 X X X X
5. 1992. 0 0 0 0 0 0 0 0 0 0 X X X X
6. 1993. 0 0 0 0 0 0 0 0 0 0 X X X X
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------ ------- ---------- ------- ----------
7. Total X X X X X X X X X X X X 0 0 0 0 0 0 0 X X X X
- ------------------------------------------------------------------------------------------------------------------------
<FN>
NOTE: Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
------------------------------------------- ------------------------------------ 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
--------------------- --------------------- --------------------- -------------- Salvage Unalloc Total Claims
13 14 15 16 17 18 19 20 and Loss Net Losses Outstanding
Direct Direct Direct Direct Subrog. Expense & Expenses Direct &
and Assum. Ceded and Assum. Ceded and Assum. Ceded & Assu Ceded Antic. Unpaid Unpaid Assum.
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------ ------- ---------- ------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988. 0 0 0 0 0 0 0 0 0 0 0 X X X X
2. 1989. 0 0 0 0 0 0 0 0 0 0 0 X X X X
3. 1990. 0 0 0 0 0 0 0 0 0 0 0 X X X X
4. 1991. 0 0 0 0 0 0 0 0 0 0 0 X X X X
5. 1992. 0 0 0 0 0 0 0 0 0 0 0 X X X X
6. 1993. 0 0 0 0 0 0 0 0 0 0 0 X X X X
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------ ------- ---------- ------- ---------- -----------
7. Total 0 0 0 0 0 0 0 0 0 0 0 X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Disc. for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
-------------------------------- -------------------------------- -------------- ------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling
Direct Direct Loss Particip. Losses Loss Exp.
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percentage Unpaid Unpaid
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------ ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
2. 1989. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
3. 1990. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
4. 1991. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
5. 1992. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
6. 1993. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------ ------- ---------- ------- ----------
7. Total 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 0 X X X X 0 0
- ------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<CAPTION>
SCHEDULE P - PART 1O - REINSURANCE B
(000 omitted)
- ------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
-------------------------------- ------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Prem Were --------------------- ----------------- Salvage Unallocate Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Pd Reported -
Loss Were and Ceded (2 - 3) Direct Direct Subrog. Expense (5-6+7 Direct and
Incurred Assum. & Assum. Ceded and Assum. Ceded Rec'd Payments -8+10) Assum.
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------ ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988. 0 0 0 0 0 0 0 0 0 0 X X X X
2. 1989. 0 0 0 0 0 0 0 0 0 0 X X X X
3. 1990. 0 0 0 0 0 0 0 0 0 0 X X X X
4. 1991. 0 0 0 0 0 0 0 0 0 0 X X X X
5. 1992. 0 0 0 0 0 0 0 0 0 0 X X X X
6. 1993. 0 0 0 0 0 0 0 0 0 0 X X X X
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------ ------- ---------- ------- ----------
7. Total X X X X X X X X X X X X 0 0 0 0 0 0 0 X X X X
- ------------------------------------------------------------------------------------------------------------------------
<FN>
NOTE: Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses U
------------------------------------------- ------------------------------------ 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
--------------------- --------------------- --------------------- -------------- Salvage Unalloc Total Claims
13 14 15 16 17 18 19 20 and Loss Net Losses Outstanding
Direct Direct Direct Direct Subrog. Expense & Expenses Direct and
and Assum. Ceded and Assum. Ceded and Assum. Ceded & Assu Ceded Antic. Unpaid Unpaid Assum.
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------ ------- ---------- ------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988. 0 0 0 0 0 0 0 0 0 0 0 X X X X
2. 1989. 0 0 0 0 0 0 0 0 0 0 0 X X X X
3. 1990. 0 0 0 0 0 0 0 0 0 0 0 X X X X
4. 1991. 0 0 0 0 0 0 0 0 0 0 0 X X X X
5. 1992. 0 0 0 0 0 0 0 0 0 0 0 X X X X
6. 1993. 0 0 0 0 0 0 0 0 0 0 0 X X X X
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------ ------- ---------- ------- ---------- -----------
7. Total 0 0 0 0 0 0 0 0 0 0 0 X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Disc. for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
-------------------------------- -------------------------------- -------------- ------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling
Direct Direct Loss Particip. Losses Loss Exp.
& Assum. Ceded Net * & Assum. Ceded Net Loss Expense Percentage Unpaid Unpaid
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------ ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
2. 1989. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
3. 1990. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
4. 1991. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
5. 1992. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
6. 1993. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------ ------- ---------- ------- ----------
7. Total 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 0 X X X X 0 0
- ------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1P - REINSURANCE C
(000 omitted)
- ------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
-------------------------------- ------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Prem Were --------------------- ------------------ Salvag Unallocate Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Pd Reported -
Loss Were and Ceded (2 - 3) Direct Direct Subrog Expense (5-6+7 Direct and
Incurred Assum. & Assum. Ceded & Assum. Ceded Rec'd Payments -8+10) Assum.
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------ ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988. 0 0 0 0 0 0 0 0 0 0 X X X X
2. 1989. 0 0 0 0 0 0 0 0 0 0 X X X X
3. 1990. 0 0 0 0 0 0 0 0 0 0 X X X X
4. 1991. 0 0 0 0 0 0 0 0 0 0 X X X X
5. 1992. 0 0 0 0 0 0 0 0 0 0 X X X X
6. 1993. 0 0 0 0 0 0 0 0 0 0 X X X X
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------ ---------- ------- ----------
7. Total X X X X X X X X X X X X 0 0 0 0 0 0 0 X X X X
- ------------------------------------------------------------------------------------------------------------------------
<FN>
NOTE: Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
------------------------------------------- ------------------------------------ 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
--------------------- --------------------- --------------------- -------------- Salvage Unalloc Total Claims
13 14 15 16 17 18 19 20 and Loss Net Losses Outstanding
Direct Direct Direct Direct Subrog. Expense & Expense Direct &
and Assum. Ceded and Assum. Ceded and Assum. Ceded & Assum Ceded Anticip. Unpaid Unpaid Assum.
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------ ---------- ------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988. 0 0 0 0 0 0 0 0 0 0 0 X X X X
2. 1989. 0 0 0 0 0 0 0 0 0 0 0 X X X X
3. 1990. 0 0 0 0 0 0 0 0 0 0 0 X X X X
4. 1991. 0 0 0 0 0 0 0 0 0 0 0 X X X X
5. 1992. 0 0 0 0 0 0 0 0 0 0 0 X X X X
6. 1993. 0 0 0 0 0 0 0 0 0 0 0 X X X X
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------ ---------- ------- ---------- -----------
7. Total 0 0 0 0 0 0 0 0 0 0 0 X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Disc. for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
-------------------------------- -------------------------------- -------------- ------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling
Direct Direct Loss Particip. Losses Loss Exp.
and Assum. Ceded Net * and Assum. Ceded Net Loss Exp. Percentage Unpaid Unpaid
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------ ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
2. 1989. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
3. 1990. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
4. 1991. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
5. 1992. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
6. 1993. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------ ---------- ------- ----------
7. Total 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 0 X X X X 0 0
- ------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<CAPTION>
SCHEDULE P - PART 1Q - REINSURANCE D
(000 omitted)
- ------------------------------------------------------------------------------------------------------------------------
1 Premiums Earned Loss and Loss Expense Payments
-------------------------------- ------------------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Prem Were --------------------- ------------------ Salvag Unallocate Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Pd Reported -
Loss Were and Ceded (2 - 3) Direct Direct Subrog Expense (5-6+7 Direct &
Incurred Assum. and Assum. Ceded and Assum. Ceded Rec'd Payments -8+10) Assum.
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------ ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X 4,182 2,259 91 34 0 0 1,980 X X X X
2. 1984. 2,212 (2,809) 5,021 822 0 6 0 0 409 1,237 X X X X
3. 1985. 13,402 11,545 1,857 247 0 35 0 0 12 294 X X X X
4. 1986. (12,711) (11,557) (1,154) (118) 0 7 0 0 (9) (120) X X X X
5. 1987. 10,623 12,020 (1,397) 17 0 0 0 0 (26) (9) X X X X
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------ ---------- ------- ----------
6. Total X X X X X X X X X X X X 5,150 2,259 139 34 0 386 3,382 X X X X
- ------------------------------------------------------------------------------------------------------------------------
<FN>
NOTE: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
------------------------------------------- ------------------------------------ 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
--------------------- --------------------- --------------------- -------------- Salvage Unalloc Total Claims
13 14 15 16 17 18 19 20 and Loss Net Losses Outstanding
Direct Direct Direct Direct Subrog. Expense & Expenses Direct and
and Assum. Ceded and Assum. Ceded & Assum. Ceded &Assum. Ceded Antic. Unpaid Unpaid Assum.
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------ ---------- ------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 28,239 17,964 3,061 1,084 0 0 56 (209) 0 0 12,517 X X X X
2. 1984. 362 0 0 0 0 0 0 0 0 0 362 X X X X
3. 1985. 909 0 1,143 0 0 0 60 0 0 0 2,112 X X X X
4. 1986. 0 0 0 0 0 0 0 0 0 0 0 X X X X
5. 1987. 0 0 0 0 0 0 0 0 0 0 0 X X X X
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------ ---------- ------- ---------- -----------
6. Total 29,510 17,964 4,204 1,084 0 0 116 (209) 0 0 14,991 X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Disc. for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
-------------------------------- -------------------------------- -------------- ------------------
25 26 27 28 29 30 31 32 Inter-Co. 34 35
Pooling
Direct Direct Loss Particip. Losses Loss Exp.
and Assum. Ceded Net * and Assum. Ceded Net Loss Exp. Percentage Unpaid Unpaid
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------ ---------- ------- ----------
<S> <C> <C> <C> <C> <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 0 0.0 12,252 265
2. 1984. 1,599 0 1,599 72.3 0.0 31.8 0 0 0.0 362 0
3. 1985. 2,406 0 2,406 18.0 0.0 129.6 0 0 0.0 2,052 60
4. 1986. (120) 0 (120) 0.9 0.0 10.4 0 0 0.0 0 0
5. 1987. (9) 0 (9) (0.1) 0.0 0.6 0 0 0.0 0 0
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------ ---------- ------- ----------
6. Total 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 0 X X X X 14,666 325
- ------------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
(000 omitted)
- -----------------------------------------------------------------------------------------------------------------------
Premiums Earned Loss and Loss Expense Payments
1 -------------------------------- ------------------------------------------------------------------ 12
Years 2 3 4 Loss Payments Allocated Loss 9 10 11
in Which Expense Payments Number of
Prem Were --------------------- ------------------ Salvage Unallocate Total Claims
Earned Direct Net 5 6 7 8 and Loss Net Pd Reported
Loss Were and Ceded (2 - 3) Direct Direct Subrog. Expense (5-6+7 Direct &
Incurred Assum. and Assum. Ceded and Assum. Ceded Rec'd Payments -8+10) Assum.
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------- ---------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X 184 0 7 0 0 0 191 X X X X
2. 1984. 1,072 0 1,072 518 0 40 0 0 0 558 0
3. 1985. 1,850 0 1,850 163 0 4 0 0 0 167 0
4. 1986. 3,005 0 3,005 107 0 3 0 0 0 110 0
5. 1987. 3,244 0 3,244 439 0 (19) 0 0 0 420 0
6. 1988. 3,453 0 3,453 998 0 (40) 0 0 0 958 0
7. 1989. 2,682 0 2,682 104 0 (1) 0 0 0 103 0
8. 1990. 2,419 0 2,419 142 0 (9) 0 0 0 133 0
9. 1991. 3,136 0 3,136 0 0 0 0 0 0 0 0
10. 1992. 1,920 0 1,920 0 0 0 0 0 0 0 0
11. 1993. 1,951 0 1,951 0 0 0 0 0 0 0 0
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------- ---------- ------ ---------
12. Total X X X X X X X X X X X X 2,655 0 (15) 0 0 0 2,640 X X X X
- -----------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
------------------------------------------- ------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
--------------------- --------------------- --------------------- --------------- Salvage Unall. Total Claims
13 14 15 16 17 18 19 20 and Loss Net Loss Outstanding
Direct Direct Direct Direct Subrog. Exp. & Expense Direct
and Assum. Ceded and Assum. Ceded and Assum. Ceded &Assum. Ceded Antic. Unpaid Unpaid and Assum.
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------- ---------- ------ --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 3,661 2,086 310 0 0 0 12 0 0 36 1,933 0
2. 1984. 301 0 10 0 0 0 0 0 0 0 311 0
3. 1985. 24 0 221 0 0 0 0 0 0 0 245 0
4. 1986. 25 0 322 0 0 0 0 0 0 0 347 0
5. 1987. 20 0 638 0 0 0 0 0 0 0 658 0
6. 1988. 251 0 901 0 0 0 0 0 0 0 1,152 0
7. 1989. 256 0 1,750 0 30 0 0 0 0 0 2,036 0
8. 1990. 36 0 1,855 0 35 0 0 0 0 0 1,926 0
9. 1991. 32 0 2,200 0 50 0 0 0 0 0 2,282 0
10. 1992. 12 0 1,078 0 65 0 0 0 0 0 1,155 0
11. 1993. 16 0 1,248 0 75 0 0 0 0 0 1,339 0
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------- ---------- ------ --------- -----------
12. Total 4,634 2,086 10,533 0 255 0 12 0 0 36 13,384 0
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Disc. for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
-------------------------------- -------------------------------- --------------- Inter-Co. ----------------
25 26 27 28 29 30 31 32 Pooling 34 35
Direct Direct Loss Particip. Losses Loss Exp.
and Assum. Ceded Net * and Assum. Ceded Net Loss Expense Percentage Unpaid Unpaid
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------- ---------- ------ ---------
<S> <C> <C> <C> <C> <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 0 X X X X 1,885 48
2. 1984. 869 0 869 81.1 0.0 81.1 0 0 0.0 311 0
3. 1985. 412 0 412 22.3 0.0 22.3 0 0 0.0 245 0
4. 1986. 457 0 457 15.2 0.0 15.2 0 0 0.0 347 0
5. 1987. 1,078 0 1,078 33.2 0.0 33.2 0 0 0.0 658 0
6. 1988. 2,110 0 2,110 61.1 0.0 61.1 0 0 0.0 1,152 0
7. 1989. 2,139 0 2,139 79.8 0.0 79.8 0 0 0.0 2,006 30
8. 1990. 2,059 0 2,059 85.1 0.0 85.1 0 0 0.0 1,891 35
9. 1991. 2,282 0 2,282 72.8 0.0 72.8 0 0 0.0 2,232 50
10. 1992. 1,155 0 1,155 60.2 0.0 60.2 0 0 0.0 1,090 65
11. 1993. 1,339 0 1,339 68.6 0.0 68.6 0 0 0.0 1,264 75
- --------- ---------- ---------- ---------- ---------- ---------- ---------- ------- ------- ---------- ------ ---------
12. Total 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 0 X X X X ****** 303
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 1R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
(000 omitted)
- -----------------------------------------------------------------------------------------------------------------------
Premiums Earned Loss and Loss Expense Payments
1 ------------------------------- ------------------------------------------------------------------ 12
Years 2 3 4 Loss Payments Allocated Loss 9 10 11
in Which Expense Payments Number of
Prem Were ------------------- ------------------- Salvage Unallocate Total Claims
Earned & Direct Net 5 6 7 8 and Loss Net Pd Reported
Loss Were and Ceded (2 - 3) Direct Direct Subrog. Expense (5-6+7 Direct &
Incurred Assum. and Assum Ceded and Assum. Ceded Rec'd Payments -8+10) Assum.
- --------- --------- ---------- ---------- --------- --------- ---------- -------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <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 0 0 0 X X X X
2. 1984. 0 0 0 0 0 0 0 0 0 0 0
3. 1985. 0 0 0 0 0 0 0 0 0 0 0
4. 1986. 0 0 0 0 0 0 0 0 0 0 0
5. 1987. 0 0 0 0 0 0 0 0 0 0 0
6. 1988. 0 0 0 0 0 0 0 0 0 0 0
7. 1989. 0 0 0 0 0 0 0 0 0 0 0
8. 1990. 0 0 0 0 0 0 0 0 0 0 0
9. 1991. 0 0 0 0 0 0 0 0 0 0 0
10. 1992. 0 0 0 0 0 0 0 0 0 0 0
11. 1993. 0 0 0 0 0 0 0 0 0 0 0
- --------- --------- ---------- ---------- --------- --------- ---------- -------- ------- ---------- ------- ----------
12. Total X X X X X X X X X X X X 0 0 0 0 0 0 0 X X X X
- -----------------------------------------------------------------------------------------------------------------------
<FN>
Note: For "prior," report amounts paid or received in current year only.
Report cumulative amounts paid or received for specific years. Report loss payments net of salvage and subrogation received.
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Losses Unpaid Allocated Loss Expenses Unpaid
----------------------------------------- ------------------------------------- 21 22 23 24
Case Basis Bulk + IBNR Case Basis Bulk + IBNR Number of
-------------------- -------------------- -------------------- ---------------- Salvage Unall. Total Claims
13 14 15 16 17 18 19 20 and Loss Net Loss Outstand.
Direct Direct Direct Direct Subrog. Exp. & Expenses Direct
& Assum. Ceded and Assum. Ceded and Assum Ceded & Assum. Ceded Antic. Unpaid Unpaid & Assum.
- --------- --------- ---------- ---------- --------- --------- ---------- -------- ------- ---------- ------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0
2. 1984. 0 0 0 0 0 0 0 0 0 0 0 0
3. 1985. 0 0 0 0 0 0 0 0 0 0 0 0
4. 1986. 0 0 0 0 0 0 0 0 0 0 0 0
5. 1987. 0 0 0 0 0 0 0 0 0 0 0 0
6. 1988. 0 0 0 0 0 0 0 0 0 0 0 0
7. 1989. 0 0 0 0 0 0 0 0 0 0 0 0
8. 1990. 0 0 0 0 0 0 0 0 0 0 0 0
9. 1991. 0 0 0 0 0 0 0 0 0 0 0 0
10. 1992. 0 0 0 0 0 0 0 0 0 0 0 0
11. 1993. 0 0 0 0 0 0 0 0 0 0 0 0
- --------- --------- ---------- ---------- --------- --------- ---------- -------- ------- ---------- ------- ---------- ----------
12. Total 0 0 0 0 0 0 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Total Losses and Loss and Loss Exp. Percentage Disc. for Time Net B/S Reserves
Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money 33 After Discount
------------------------------- ------------------------------ ---------------- Inter-Co. ------------------
25 26 27 28 29 30 31 32 Pooling 34 35
Direct Direct Loss Particip. Losses Loss Exp.
and Assum Ceded Net * and Assum Ceded Net Loss Exp. Percentage Unpaid Unpaid
- --------- --------- ---------- ---------- --------- --------- ---------- -------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <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 0 0 X X X X 0 0
2. 1984. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
3. 1985. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
4. 1986. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
5. 1987. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
6. 1988. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
7. 1989. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
8. 1990. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
9. 1991. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
10. 1992. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
11. 1993. 0 0 0 0.0 0.0 0.0 0 0 0.0 0 0
- --------- --------- ---------- ---------- --------- --------- ---------- -------- ------- ---------- ------- ----------
12. Total X X X X X X X X X X X X X X X X X X X X X X 0 0 X X X X 0 0
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*Net = (25 - 26) = (11 + 23)
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 2A - HOMEOWNERS/FARMOWNERS
- -----------------------------------------------------------------------------------------------------------------------------------
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) Development**
Years --------------------------------------------------------------------------------------------------- -------------------
in Which 2 3 4 5 6 7 8 9 10 11 12 13
Losses 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 One Year Two Year
Incurred
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 828 * 3,884 4,686 5,300 5,614 5,428 5,773 5,848 5,856 5,769 (87) (79)
2. 1984.. 6,966 8,858 9,886 10,389 11,007 10,924 11,154 11,110 11,153 11,227 74 117
3. 1985.. X X X X 7,166 7,220 7,702 8,192 8,140 8,178 8,056 8,074 8,054 (20) (2)
4. 1986.. X X X X X X X X 6,962 7,081 6,940 7,047 7,105 7,088 7,079 7,088 9 0
5. 1987.. X X X X X X X X X X X X 3,508 2,850 2,881 2,862 2,844 2,890 2,909 19 65
6. 1988.. X X X X X X X X X X X X X X X X 4,433 2,905 3,188 3,477 3,592 3,604 12 127
7. 1989.. X X X X X X X X X X X X X X X X X X X X 1,668 1,868 1,541 1,665 1,675 10 134
8. 1990.. X X X X X X X X X X X X X X X X X X X X X X X X 486 1,236 1,350 1,347 (3) 111
9. 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 X X X X 681 1,166 1,143 (23) 462
10. 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 X X X X 1,614 1,462 (152) X X X
11. 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 X X X X X X X X 1,246 X X X X X X X
- --------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X X (161) 935
-------------------
<CAPTION>
SCHEDULE P - PART 2B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 2,004 * 1,611 1,960 1,951 2,129 2,173 2,194 2,195 2,196 2,194 (2) (1)
2. 1984.. 2,507 5,484 6,021 6,277 7,508 7,911 7,754 7,745 7,758 7,753 (5) 8
3. 1985.. X X X X 6,167 6,484 7,019 6,999 7,226 7,444 7,391 7,392 7,392 0 1
4. 1986.. X X X X X X X 1,885 2,548 2,662 2,569 2,567 2,575 2,576 2,575 (1) 0
5. 1987.. X X X X X X X X X X X 2,605 3,311 3,254 3,408 3,389 3,480 3,468 (12) 79
6. 1988.. X X X X X X X X X X X X X X X 2,128 1,943 2,086 1,921 1,935 1,934 (1) 13
7. 1989.. X X X X X X X X X X X X X X X X X X X 1,756 1,209 1,256 1,236 1,251 15 (5)
8. 1990.. X X X X X X X X X X X X X X X X X X X X X X X 569 556 530 506 (24) (50)
9. 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 X X X 2,438 2,954 2,894 (60) 456
10. 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 X X X 12,770 16,721 3,951 X X X
11. 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 X X X X X X X 30,110 X X X X X X X
- --------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X X 3,861 501
-------------------
<PAGE>
<CAPTION>
SCHEDULE P - PART 2C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 6,301 * 7,311 7,631 9,037 9,614 9,809 9,774 9,699 10,352 10,976 624 1,277
2. 1984.. 9,923 13,012 15,844 17,972 17,511 17,282 16,781 16,954 16,820 16,963 143 9
3. 1985.. X X X X 16,308 14,460 15,434 14,707 16,042 15,570 15,452 15,094 14,899 (195) (553)
4. 1986.. X X X X X X X 11,905 10,213 11,630 12,489 10,830 11,480 11,485 11,689 204 209
5. 1987.. X X X X X X X X X X X 12,959 12,453 13,716 13,461 15,207 14,892 15,895 1,003 688
6. 1988.. X X X X X X X X X X X X X X X 8,255 8,098 8,145 8,577 8,020 8,220 200 (357)
7. 1989.. X X X X X X X X X X X X X X X X X X X 3,910 6,753 5,994 6,128 5,566 (562) (428)
8. 1990.. X X X X X X X X X X X X X X X X X X X X X X X 11,266 10,405 10,364 9,815 (549) (590)
9. 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 X X X 17,076 21,239 19,827 (1,412) 2,751
10. 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 X X X 23,776 26,640 2,864 X X X
11. 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 X X X X X X X 33,804 X X X X X X X
- --------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X X 2,320 3,006
-------------------
<CAPTION>
SCHEDULE P - PART 2D - WORKERS' COMPENSATION
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 84,736 * 97,622 112,736 100,704 112,293 117,503 121,747 122,873 123,405 123,497 92 624
2. 1984.. 93,826 100,741 136,097 140,718 143,831 146,458 149,210 146,465 147,203 148,571 1,368 2,106
3. 1985.. X X X X 101,835 105,637 127,512 138,081 142,087 141,783 138,140 139,431 136,236 (3,195) (1,904)
4. 1986.. X X X X X X X X 70,827 112,624 118,934 97,144 97,816 98,991 99,013 98,064 (949) (927)
5. 1987.. X X X X X X X X X X X X 119,974 137,024 136,259 139,936 139,618 139,610 144,286 4,676 4,668
6. 1988.. X X X X X X X X X X X X X X X X 180,193 205,121 213,835 218,166 218,235 222,026 3,791 3,860
7. 1989.. X X X X X X X X X X X X X X X X X X X X 224,550 226,195 236,425 238,741 234,229 (4,512) (2,196)
8. 1990.. X X X X X X X X X X X X X X X X X X X X X X X X 201,482 219,670 218,866 219,893 1,027 223
9. 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 X X X X 217,386 211,663 213,546 1,883 (3,840)
10. 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 X X X X 232,942 226,844 (6,098) X X X
11. 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 X X X X X X X X 204,649 X X X X X X X
- --------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X X (1,917) 2,614
-------------------
<PAGE>
<CAPTION>
SCHEDULE P - PART 2E - COMMERCIAL MULTIPLE PERIL
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 19,094 * 26,151 33,001 36,650 39,356 42,029 44,221 45,346 45,574 44,618 (956) (728)
2. 1984.. 40,357 57,046 66,208 69,827 74,360 74,136 76,611 77,643 77,743 78,943 1,200 1,300
3. 1985.. X X X X 47,368 63,443 72,810 80,893 84,659 85,159 89,282 90,085 90,267 182 985
4. 1986.. X X X X X X X 29,320 35,080 41,039 46,683 48,858 52,692 54,858 54,221 (637) 1,529
5. 1987.. X X X X X X X X X X X 17,823 22,371 27,475 28,516 30,673 31,519 32,357 838 1,684
6. 1988.. X X X X X X X X X X X X X X X 9,656 10,872 12,897 16,108 16,477 18,185 1,708 2,077
7. 1989.. X X X X X X X X X X X X X X X X X X X 9,429 8,320 6,965 7,306 7,438 132 473
8. 1990.. X X X X X X X X X X X X X X X X X X X X X X X 3,562 4,855 5,259 5,178 (81) 323
9. 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 X X X 7,061 6,124 5,969 (155) (1,092)
10. 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 X X X 8,945 8,845 (100) X X X
11. 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 X X X X X X X 9,669 X X X X X X X
- --------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X X 2,131 6,551
--------- ---------
<FN>
*Reported reserves only. Subsequent development relates only to subsequent payments and reserves.
**Current year less first or second prior year, showing (redundant) or adverse.
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 2F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
- -----------------------------------------------------------------------------------------------------------------------------------
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) Development**
Years --------------------------------------------------------------------------------------------------- -------------------
in Which 2 3 4 5 6 7 8 9 10 11 12 13
Losses 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 One Year Two Year
Incurred
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 77 * 227 376 518 661 660 651 551 551 526 (25) (25)
2. 1984.. 1 0 0
3. 1985.. X X X X 0 0
4. 1986.. X X X X X X X 0 0
5. 1987.. X X X X X X X X X X X 0 0
6. 1988.. X X X X X X X X X X X X X X X 6 35 28 0 0
7. 1989.. X X X X X X X X X X X X X X X X X X X 15 13 0 0
8. 1990.. X X X X X X X X X X X X X X X X X X X X X X X 285 250 325 348 23 98
9. 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 X X X 1,999 1,469 1,074 (395) (925)
10. 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 X X X 1,548 915 (633) X X X
11. 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 X X X X X X X 632 X X X X X X X
- --------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X (1,030) (852)
-------------------
<CAPTION>
SCHEDULE P - PART 2F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior * 0 0
2. 1984.. 0 0
3. 1985.. X X X X 0 0
4. 1986.. X X X X X X X 0 0
5. 1987.. X X X X X X X X X X X 0 0
6. 1988.. X X X X X X X X X X X X X X X 0 0
7. 1989.. X X X X X X X X X X X X X X X X X X X 0 0
8. 1990.. X X X X X X X X X X X X X X X X X X X X X X X 0 0
9. 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 X X X 0 0
10. 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 X X X 0 X X X
11. 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 X X X X X X X 9 X X X X X X
- --------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X 0 0
<PAGE>
<CAPTION>
SCHEDULE P - PART 2G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
- ----------- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 1,927 * 2,253 2,228 2,678 3,799 3,981 3,894 3,804 3,880 3,862 (18) 58
2. 1984.. 3,194 3,302 3,585 3,746 4,634 4,504 4,949 4,934 4,994 4,985 (9) 51
3. 1985.. X X X X 3,898 4,629 5,117 6,443 6,063 5,458 4,706 4,496 4,492 (4) (214)
4. 1986.. X X X X X X X 4,982 5,472 1,723 1,698 1,699 1,671 1,707 1,720 13 49
5. 1987.. X X X X X X X X X X X 1,248 847 809 827 774 774 822 48 48
6. 1988.. X X X X X X X X X X X X X X X 1,203 983 1,141 1,033 1,032 1,062 30 29
7. 1989.. X X X X X X X X X X X X X X X X X X X 1,189 1,010 958 961 971 10 13
8. 1990.. X X X X X X X X X X X X X X X X X X X X X X X 655 513 537 529 (8) 16
9. 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 X X X 2,759 2,622 2,527 (95) (232)
10. 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 X X X 1,899 2,227 328 X X X
11. 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 X X X X X X X 3,503 X X X X X X X
- --------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X 295 (182)
<CAPTION>
SCHEDULE P - PART 2H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 4,379 * 6,152 7,240 9,844 12,613 18,022 19,899 21,797 26,178 27,285 1,107 5,488
2. 1984.. 3,875 3,579 3,017 3,564 3,400 3,164 1,592 4,134 3,631 3,700 69 (434)
3. 1985.. X X X X 4,597 5,321 2,590 2,004 2,835 2,162 2,170 2,746 2,600 (146) 430
4. 1986.. X X X X X X X X 8,506 3,848 6,177 5,682 7,682 6,326 5,445 6,384 939 58
5. 1987.. X X X X X X X X X X X X 8,956 6,787 6,443 6,674 3,050 2,618 2,815 197 (235)
6. 1988.. X X X X X X X X X X X X X X X X 3,484 2,850 3,570 3,326 3,697 3,753 56 427
7. 1989.. X X X X X X X X X X X X X X X X X X X X 5,097 5,157 7,760 6,544 6,088 (456) (1,672)
8. 1990.. X X X X X X X X X X X X X X X X X X X X X X X X 7,648 6,166 5,628 5,251 (377) (915)
9. 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 X X X X 7,604 6,638 3,627 (3,011) (3,977)
10. 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 X X X X 6,442 5,120 (1,322) X X X
11. 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 X X X X X X X X 9,538 X X X X X X X
- --------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X (2,944) (830)
<PAGE>
<CAPTION>
SCHEDULE P - PART 2H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 16,133 * 21,708 30,451 27,054 26,571 29,884 28,047 28,969 29,288 32,773 3,485 3,804
2. 1984.. 15,571 16,390 16,743 16,297 16,931 18,442 19,576 21,383 22,099 21,288 (811) (95)
3. 1985.. X X X X 16,852 20,996 17,268 19,617 19,649 26,621 26,408 29,279 27,530 (1,749) 1,122
4. 1986.. X X X X X X X X 40,918 40,500 35,274 29,326 32,426 33,077 36,138 36,089 (49) 3,012
5. 1987.. X X X X X X X X X X X X 45,432 39,003 36,929 35,264 35,774 35,761 35,244 (517) (530)
6. 1988.. X X X X X X X X X X X X X X X X 52,991 54,263 52,770 56,498 53,872 52,935 (937) (3,563)
7. 1989.. X X X X X X X X X X X X X X X X X X X X 61,753 54,109 56,531 57,801 63,514 5,713 6,983
8. 1990.. X X X X X X X X X X X X X X X X X X X X X X X X 49,097 42,262 43,844 42,276 (1,568) 14
9. 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 X X X X 60,008 61,458 62,413 955 2,405
10. 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 X X X X 67,227 67,852 625 X X X X
11. 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 X X X X X X X X 80,721 X X X X X X X X
- --------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X 5,147 13,152
-------------------
<FN>
*Reported reserves only. Subsequent development relates only to subsequent payments and reserves.
**Current year less first or second prior year, showing (redundant) or adverse.
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 2I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
- ------------------------------------------------------------------------------------------------------------------------------------
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) Development**
Years ---------------------------------------------------------------------------------------------------- -------------------
in Which 2 3 4 5 6 7 8 9 10 11 12 13
Losses 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 One Year Two Year
Were
Incurred
- ----------- ------------------- --------- --------- --------- --------- --------- -------------------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <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 9,504 * 9,801 13,292 3,491 3,788
2. 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 X X X X 11,328 12,719 1,391 X X X X
3. 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 X X X X X X X X 10,246 X X X X X X X X
- ---------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X X 4,882 3,788
-------------------
<CAPTION>
SCHEDULE P - PART 2J - AUTO PHYSICAL DAMAGE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <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 1,205 * 1,284 1,463 179 258
2. 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 X X X X 2,394 2,942 548 X X X X
3. 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 X X X X X X X X 13,229 X X X X X X X X
- ---------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X X 727 258
-------------------
<CAPTION>
SCHEDULE P - PART 2K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAGE GUARANTY
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <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 600 * 891 1,401 510 801
2. 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 X X X X 1,972 4,322 2,350 X X X X
3. 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 X X X X X X X X 2,114 X X X X X X X X
- ---------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X X 2,860 801
-------------------
<PAGE>
<CAPTION>
SCHEDULE P - PART 2L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <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 969 * 1,113 1,119 6 150
2. 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 X X X X 220 304 84 X X X X
3. 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 X X X X X X X X 1,534 X X X X X X X X
- ---------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X X 90 150
-------------------
<CAPTION>
SCHEDULE P - PART 2M - INTERNATIONAL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . 0 * 0 0 0 0 0 0 0 0 0 0
2. 1992... 0 0 0 0 0 0 0 0 0 0 0
3. 1993... X X X X 0 0 0 0 0 0 0 0 0 0
4. 1986... X X X X X X X X 0 0 0 0 0 0 0 0 0
5. 1987... X X X X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1988... X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
7. 1989... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
8. 1990... 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 0 0 0 0
9. 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 X X X X 0 0 0 0
10. 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 X X X X 0 0 X X X X
11. 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 X X X X X X X X 174 X X X X X X X X
- ---------------------------------------------------------------------------------------------------------------- --------- ---------
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 X X X X X X X X X X X X X X X X 0 0
-------------------
<FN>
*Reported reserves only. Subsequent development relates only to subsequent payments and reserves.
**Current year less first or second prior year, showing (redundant) or adverse.
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 2N - REINSURANCE A
- -----------------------------------------------------------------------------------------------------------------------------------
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) Development**
Years -----------------------------------------------------------------------------------------------------------------------
in Which 2 3 4 5 6 7 8 9 10 11 12 13
Losses 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 One Year Two Year
Were
Incurred
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988... X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0 0
2. 1989... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
3. 1990... 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 0 0 0 0 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 X X X X 0 0 0 0 0
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 X X X X 0 0 0 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 X X X X X X X X 0 X X X X X X X X
- -----------------------------------------------------------------------------------------------------------------------------------
7. 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 X X X X X X X X X X X X X X X X 0 0
-------------------
<CAPTION>
SCHEDULE P - PART 2O - REINSURANCE B
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988... X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0 0
2. 1989... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
3. 1990... 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 0 0 0 0 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 X X X X 0 0 0 0 0
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 X X X X 0 0 0 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 X X X X X X X X 0 X X X X X X X X
- -----------------------------------------------------------------------------------------------------------------------------------
7. 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 X X X X X X X X X X X X X X X X 0 0
-------------------
<CAPTION>
SCHEDULE P - PART 2P - REINSURANCE C
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988... X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0 0
2. 1989... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
3. 1990... 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 0 0 0 0 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 X X X X 0 0 0 0 0
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 X X X X 0 0 0 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 X X X X X X X X 0 X X X X X X X X
- -----------------------------------------------------------------------------------------------------------------------------------
7. 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 X X X X X X X X X X X X X X X X 0 0
-------------------
<PAGE>
<CAPTION>
SCHEDULE P - PART 2Q - REINSURANCE D
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . 2,773 4,657 3,942 14,553 16,393 24,509 25,645 31,333 32,607 34,644 2,037 3,311
2. 1984... 649 1,774 1,761 1,371 1,678 989 2,075 929 1,108 1,190 82 261
3. 1985... X X X X 3,475 1,956 926 664 124 685 978 2,557 2,395 (162) 1,417
4. 1986... X X X X X X X X 3,480 (104) (102) (111) (111) (111) (111) (111) 0 0
5. 1987... X X X X X X X X X X X X 46 25 38 18 18 17 18 1 0
- -----------------------------------------------------------------------------------------------------------------------------------
6. 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 X X X X X X X X X X X X X X X X 1,958 4,989
-------------------
<CAPTION>
SCHEDULE P - PART 2R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . 629 * 1,596 1,666 2,130 2,181 2,186 1,931 4,373 6,196 7,195 999 2,822
2. 1984... 642 624 624 624 741 1,134 1,789 867 568 869 301 2
3. 1985... X X X X 1,159 1,159 1,166 1,257 1,251 1,245 332 656 412 (244) 80
4. 1986... X X X X X X X X 1,925 1,943 1,953 1,998 2,008 1,244 1,183 457 (726) (787)
5. 1987... X X X X X X X X X X X X 2,297 2,448 2,707 2,658 1,841 1,658 1,068 (590) (773)
6. 1988... X X X X X X X X X X X X X X X X 1,525 1,487 1,469 2,435 2,272 2,121 (151) (314)
7. 1989... X X X X X X X X X X X X X X X X X X X X 1,384 1,391 2,001 1,861 2,139 278 138
8. 1990... X X X X X X X X X X X X X X X X X X X X X X X X 1,523 1,720 2,034 2,059 25 339
9. 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 X X X X 2,944 2,431 2,282 (149) (662)
10. 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 X X X X 1,505 1,155 (350) X X X X
11. 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 X X X X X X X X 1,339 X X X X X X X X
- -----------------------------------------------------------------------------------------------------------------------------------
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 X X X X X X X X X X X X X X X X (607) 845
-------------------
<CAPTION>
SCHEDULE P - PART 2R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . 0 * 0 0 0 0 0 0 0 0 0 0 0
2. 1984... 0 0 0 0 0 0 0 0 0 0 0 0
3. 1985... X X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1986... X X X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1987... X X X X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1988... X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0 0
7. 1989... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1990... 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 0 0 0 0 0
9. 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 X X X X 0 0 0 0 0
10. 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 X X X X 0 0 0 X X X X
11. 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 X X X X X X X X 0 X X X X X X X X
- -----------------------------------------------------------------------------------------------------------------------------------
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 X X X X X X X X X X X X X X X X 0 0
-------------------
<FN>
*Reported reserves only. Subsequent development relates only to subsequent payments and reserves.
**Current year less first or second prior year, showing (redundant) or adverse.
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 3A - HOMEOWNERS/FARMOWNERS
- ------------------------------------------------------------------------------------------------------------------------------------
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) 12 13
Years --------------------------------------------------------------------------------------------------- Number of Number of
in Which Claims Claims
Losses 2 3 4 5 6 7 8 9 10 11 Closed Closed
Were 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 With Loss W/O Loss
Incurred Payment Payment
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . 000 1,882 3,492 4,593 4,899 5,179 5,224 5,356 5,509 5,526 0 0
2. 1984... 5,399 7,879 8,915 9,649 10,162 10,679 10,873 10,977 11,040 11,054 0 0
3. 1985... X X X X 4,111 6,561 7,348 7,791 7,953 7,960 7,984 8,015 8,014 0 0
4. 1986... X X X X X X X X 4,938 6,347 6,735 6,862 6,930 7,057 7,064 7,079 0 0
5. 1987... X X X X X X X X X X X X 1,791 2,550 2,784 2,750 2,811 2,857 2,856 0 0
6. 1988... X X X X X X X X X X X X X X X X 1,748 2,675 2,987 3,401 3,547 3,546 0 0
7. 1989... X X X X X X X X X X X X X X X X X X X X 834 1,285 1,359 1,542 1,542 0 0
8. 1990... X X X X X X X X X X X X X X X X X X X X X X X X 134 722 1,023 1,023 0 0
9. 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 X X X X 118 556 556 6 0
10 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 X X X X 499 500 3 0
11. 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 X X X X X X X X 6 3 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 3B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . 000 753 1,498 1,761 1,886 2,071 2,163 2,160 2,181 2,180 0 0
2. 1984... 1,108 4,019 5,273 5,789 7,262 7,525 7,715 7,720 7,722 7,719 0 0
3. 1985... X X X X 2,625 5,622 6,482 6,836 7,173 7,387 7,391 7,392 7,392 0 0
4. 1986... X X X X X X X X 802 1,777 2,088 2,427 2,549 2,575 2,576 2,575 0 0
5. 1987... X X X X X X X X X X X X 1,321 2,537 2,907 3,093 3,263 3,432 3,468 0 0
6. 1988... X X X X X X X X X X X X X X X X 755 1,631 1,826 1,864 1,904 1,905 0 0
7. 1989... X X X X X X X X X X X X X X X X X X X X 420 1,003 1,213 1,236 1,251 0 0
8. 1990... X X X X X X X X X X X X X X X X X X X X X X X X 156 430 504 500 0 0
9. 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 X X X X 582 2,562 2,786 850 0
10 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 X X X X 6,084 14,855 4,845 0
11. 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 X X X X X X X X 17,356 6,631 0
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
SCHEDULE P - PART 3C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . 000 3,096 4,821 6,383 8,007 8,214 9,000 9,225 9,524 9,649 0 0
2. 1984... 1,652 6,834 10,890 13,192 14,637 16,084 16,245 16,441 16,547 16,635 5,152 0
3. 1985... X X X X 3,809 7,843 10,469 12,578 12,750 13,620 13,878 14,375 14,489 5,554 0
4. 1986... X X X X X X X X 2,342 4,827 7,368 7,347 9,495 10,098 10,367 10,614 2,474 0
5. 1987... X X X X X X X X X X X X 3,497 6,938 9,327 11,662 13,086 13,682 14,836 2,874 0
6. 1988... X X X X X X X X X X X X X X X X 1,656 3,117 5,612 6,776 7,465 7,506 1,486 0
7. 1989... X X X X X X X X X X X X X X X X X X X X 576 2,644 3,487 4,114 4,383 447 0
8. 1990... X X X X X X X X X X X X X X X X X X X X X X X X 792 3,944 5,637 7,153 714 0
9. 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 X X X X 3,283 8,874 12,803 2,106 0
10 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 X X X X 4,295 14,353 2,781 0
11. 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 X X X X X X X X 7,201 2,205 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 3D - WORKERS' COMPENSATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . 000 45,925 73,953 92,944 95,212 101,277 102,679 104,770 105,761 108,350 0 0
2. 1984... 38,712 90,670 122,341 139,703 140,407 143,554 147,410 143,484 144,637 144,211 19,733 0
3. 1985... X X X X 41,334 88,519 119,401 137,446 140,942 141,040 135,279 135,559 135,368 17,674 0
4. 1986... X X X X X X X X 30,556 68,334 83,636 93,589 97,103 97,926 96,314 96,220 13,420 0
5. 1987... X X X X X X X X X X X X 32,624 70,123 95,611 114,104 121,922 127,674 131,448 15,081 0
6. 1988... X X X X X X X X X X X X X X X X 53,151 118,946 161,575 184,918 197,848 204,829 20,328 0
7. 1989... X X X X X X X X X X X X X X X X X X X X 62,057 143,365 186,970 207,906 212,234 22,810 0
8. 1990... X X X X X X X X X X X X X X X X X X X X X X X X 58,678 126,769 168,388 189,687 19,736 0
9. 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 X X X X 48,676 110,824 143,624 16,276 0
10 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 X X X X 59,731 123,011 14,038 0
11. 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 X X X X X X X X 50,797 7,519 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 3E - COMMERCIAL MULTIPLE PERIL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . 000 12,777 20,905 28,865 34,497 39,634 41,846 42,402 42,892 43,213 0 0
2. 1984... 23,322 42,484 53,469 60,674 66,172 70,591 73,468 75,295 76,512 77,629 20,955 0
3. 1985... X X X X 26,495 47,826 58,869 69,947 77,557 82,105 86,897 88,651 89,566 19,477 0
4. 1986... X X X X X X X X 14,836 25,156 31,136 39,188 45,036 49,723 51,510 52,594 7,637 0
5. 1987... X X X X X X X X X X X X 7,012 15,075 20,302 23,812 28,111 30,236 31,429 3,615 0
6. 1988... X X X X X X X X X X X X X X X X 11,106 7,427 10,169 12,740 14,217 16,240 1,778 0
7. 1989... X X X X X X X X X X X X X X X X X X X X 2,842 5,374 6,358 6,894 7,047 647 0
8. 1990... X X X X X X X X X X X X X X X X X X X X X X X X 974 2,956 4,068 4,460 147 0
9. 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 X X X X 2,085 3,340 3,926 133 0
10 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 X X X X 3,643 6,820 222 0
11. 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 X X X X X X X X 3,413 163 0
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
Note: Net of salvage and subrogation received.
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 3F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
- ------------------------------------------------------------------------------------------------------------------------------------
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) 12 13
Years --------------------------------------------------------------------------------------------------- Number of Number of
in Which Claims Claims
Losses 2 3 4 5 6 7 8 9 10 11 Closed Closed
Were 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 With Loss W/O Loss
Incurred Payment Payment
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 000 107 155 325 525 525 525 525 525 525 0 0
2. 1984.... 0 0 0 0 0 0 0 0 0 0 0 0
3. 1985.... 0 0 0 0 0 0 0 0 0 0 0 0
4. 1986.... X X X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1987.... X X X X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1988.... X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0 0
7. 1989.... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1990.... 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 0 0 0 0 0
9. 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 X X X X 2 13 13 6 0
10. 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 X X X X 0 80 4 0
11. 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 X X X X X X X X 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 3F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 000
2. 1984.... 0 0 0 0 0 0 0 0 0 0 0 0
3. 1985.... 0 0 0 0 0 0 0 0 0 0 0 0
4. 1986.... X X X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1987.... X X X X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1988.... X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0 0
7. 1989.... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1990.... 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 0 0 0 0 0
9. 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 X X X X 0 0 0 0 0
10. 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 X X X X 0 0 0 0
11. 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 X X X X X X X X 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
SCHEDULE P - PART 3G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 000 135 1,225 2,231 3,262 3,467 3,505 3,714 3,726 3,784 X X X X X X X X
2. 1984.... 733 1,131 2,344 2,876 2,973 3,272 3,999 4,911 4,975 4,975 X X X X X X X X
3. 1985.... 2,436 3,289 4,015 4,124 4,280 4,306 3,229 3,258 3,258 X X X X X X X X
4. 1986.... X X X X X X X X 310 1,583 1,638 1,643 1,661 1,666 1,669 1,668 X X X X X X X X
5. 1987.... X X X X X X X X X X X X 347 708 719 761 768 769 769 X X X X X X X X
6. 1988.... X X X X X X X X X X X X X X X X 363 789 1,006 1,018 1,024 1,024 X X X X X X X X
7. 1989.... X X X X X X X X X X X X X X X X X X X X 356 838 912 936 937 X X X X X X X X
8. 1990.... X X X X X X X X X X X X X X X X X X X X X X X X 217 420 469 479 X X X X X X X X
9. 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 X X X X 1,331 2,363 2,378 X X X X X X X X
10. 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 X X X X 917 1,925 X X X X X X X X
11. 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 X X X X X X X X 2,028 X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 3H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 000 1,052 (1,170) 6,091 8,662 11,250 12,932 14,337 17,539 20,191 0 0
2. 1984.... (10) 878 1,255 2,358 2,691 2,825 3,044 3,254 3,415 3,473 59 0
3. 1985.... X X X X 306 355 792 1,504 1,700 1,595 1,687 2,213 2,329 70 0
4. 1986.... X X X X X X X X 302 1,297 2,350 2,989 3,741 4,081 3,666 4,096 53 0
5. 1987.... X X X X X X X X X X X X 88 679 919 1,403 1,963 2,128 2,289 53 0
6. 1988.... X X X X X X X X X X X X X X X X 317 948 1,532 2,180 2,806 3,210 37 0
7. 1989.... X X X X X X X X X X X X X X X X X X X X 1,388 4,113 4,846 4,975 5,571 19 0
8. 1990.... X X X X X X X X X X X X X X X X X X X X X X X X 1,384 2,678 3,564 3,733 2 0
9. 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 X X X X 131 982 1,281 6 0
10. 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 X X X X 1,008 2,323 26 0
11. 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 X X X X X X X X 499 22 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 3H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 000 7,857 21,672 23,230 19,258 24,444 25,263 27,586 28,856 32,088 0 0
2. 1984.... 1,098 3,799 7,613 10,464 13,833 16,444 18,252 20,395 20,658 20,782 786 0
3. 1985.... 1,499 7,220 11,259 18,023 19,060 26,677 25,431 26,315 25,292 815 0
4. 1986.... X X X X X X X X 4,486 8,823 16,216 23,468 28,472 31,428 33,704 34,337 791 0
5. 1987.... X X X X X X X X X X X X 1,491 6,755 19,807 28,780 30,270 30,975 29,738 723 0
6. 1988.... X X X X X X X X X X X X X X X X 1,317 10,546 27,247 37,447 42,797 45,385 742 0
7. 1989.... X X X X X X X X X X X X X X X X X X X X 1,267 13,741 34,282 42,400 51,648 764 0
8. 1990.... X X X X X X X X X X X X X X X X X X X X X X X X 1,895 17,552 27,240 26,937 661 0
9. 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 X X X X 3,423 15,077 23,601 527 0
10. 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 X X X X 2,997 16,462 349 0
11. 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 X X X X X X X X 3,404 58 0
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
Note: Net of salvage and subrogation received.
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 3I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
- ------------------------------------------------------------------------------------------------------------------------------------
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted) 12 13
Years --------------------------------------------------------------------------------------------------- Number of Number of
in Which Claims Claims
Losses 2 3 4 5 6 7 8 9 10 11 Closed Closed
Were 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 With Loss W/O Loss
Incurred Payment Payment
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <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 000 5,334 10,660 X X X X X X X X
2. 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 X X X X 5,147 10,056 X X X X X X X X
3. 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 X X X X X X X X 7,130 X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 3J - AUTO PHYSICAL DAMAGE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <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 000 489 848 31,353 0
2. 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 X X X X 1,709 2,378 3,517 0
3. 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 X X X X X X X X 10,661 4,397 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 3K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAGE GUARANTY
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <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 000 474 1,015 X X X X X X X X
2. 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 X X X X 624 3,092 X X X X X X X X
3. 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 X X X X X X X X 583 X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 3L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <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 000 1,071 1,089 X X X X X X X X
2. 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 X X X X 124 246 X X X X X X X X
3. 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 X X X X X X X X 207 X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
SCHEDULE P - PART 3M - INTERNATIONAL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 000 X X X X X X X X
2. 1984.... 0 0 0 0 0 0 0 0 0 0 X X X X X X X X
3. 1985.... X X X X 0 0 0 0 0 0 0 0 0 X X X X X X X X
4. 1986.... X X X X X X X X 0 0 0 0 0 0 0 0 X X X X X X X X
5. 1987.... X X X X X X X X X X X X 0 0 0 0 0 0 0 X X X X X X X X
6. 1988.... X X X X X X X X X X X X X X X X 0 0 0 0 0 0 X X X X X X X X
7. 1989.... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0 X X X X X X X X
8. 1990.... 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 0 0 0 X X X X X X X X
9. 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 X X X X 0 0 0 X X X X X X X X
10. 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 X X X X 0 0 X X X X X X X X
11. 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 X X X X X X X X 62 X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
Note: Net of salvage and subrogation received.
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 3N - REINSURANCE A
- ------------------------------------------------------------------------------------------------------------------------------------
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted) 12 13
Years --------------------------------------------------------------------------------------------------- Number of Number of
in Which Claims Claims
Losses 2 3 4 5 6 7 8 9 10 11 Closed Closed
Were 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 With Loss W/O Loss
Incurred Payment Payment
- ------------ --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988.... X X X X X X X X X X X X X X X X 0 0 0 0 0 0 X X X X X X X X
2. 1989.... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0 X X X X X X X X
3. 1990.... 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 0 0 0 X X X X X X X X
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 X X X X 0 0 0 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 X X X X X X X X 0 0 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 X X X X X X X X 0 X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 3O - REINSURANCE B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988.... X X X X X X X X X X X X X X X X 0 0 0 0 0 0 X X X X X X X X
2. 1989.... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0 X X X X X X X X
3. 1990.... 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 0 0 0 X X X X X X X X
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 X X X X 0 0 0 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 X X X X X X X X 0 0 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 X X X X X X X X 0 X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 3P - REINSURANCE C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988.... X X X X X X X X X X X X X X X X 0 0 0 0 0 0 X X X X X X X X
2. 1989.... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0 X X X X X X X X
3. 1990.... 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 0 0 0 X X X X X X X X
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 X X X X 0 0 0 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 X X X X X X X X 0 0 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 X X X X X X X X 0 X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
SCHEDULE P - PART 3Q - REINSURANCE D
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 000 1,162 1,518 2,178 4,807 9,457 12,677 17,194 20,147 22,127 X X X X X X X X
2. 1984.... 477 856 883 423 499 650 650 650 828 828 X X X X X X X X
3. 1985.... X X X X 901 801 (46) 34 84 84 84 84 282 X X X X X X X X
4. 1986.... X X X X X X X X (115) (111) (111) (111) (111) (111) (111) (111) X X X X X X X X
5. 1987.... X X X X X X X X X X X X 18 18 18 18 18 17 17 X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 3R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 000 342 737 1,117 1,487 1,541 1,607 2,059 3,068 5,276 0 0
2. 1984.... 1 101 129 292 442 442 227 555 558 0 0
3. 1985.... X X X X 7 7 7 103 130 131 154 167 167 0 0
4. 1986.... X X X X X X X X 0 1 56 60 67 105 111 110 0 0
5. 1987.... X X X X X X X X X X X X 0 11 311 323 411 420 420 0 0
6. 1988.... X X X X X X X X X X X X X X X X 37 76 580 761 956 959 0 0
7. 1989.... X X X X X X X X X X X X X X X X X X X X 0 0 100 103 103 0 0
8. 1990.... 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 2 433 133 0 0
9. 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 X X X X 0 0 0 0 0
10. 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 X X X X 0 0 0 0
11. 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 X X X X X X X X 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 3R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .. 000 0 0 0 0 0 0 0 0 0 0 0
2. 1984.... 0 0 0 0 0 0 0 0 0 0 0 0
3. 1985.... X X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1986.... X X X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1987.... X X X X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1988.... X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0 0
7. 1989.... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1990.... 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 0 0 0 0 0
9. 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 X X X X 0 0 0 0 0
10. 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 X X X X 0 0 0 0
11. 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 X X X X X X X X 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
Note: Net of salvage and subrogation received.
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 4A - HOMEOWNERS/FARMOWNERS
- --------------------------------------------------------------------------------------------------------------------------------
1 BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
Years -------------------------------------------------------------------------------------------------------------
in Which
Losses 2 3 4 5 6 7 8 9 10 11
Were 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
Incurred
- ------------------ ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .... 132 142 70 40 14 6 25 52 14 6
2. 1984...... 1,356 80 150 37 7 20 5 0 0 40
3. 1985...... X X X X 1,217 244 138 26 23 21 2 6 6
4. 1986...... X X X X X X X X 1,114 302 23 32 24 6 2 1
5. 1987...... X X X X X X X X X X X X 1,134 26 31 0 1 2 22
6. 1988...... X X X X X X X X X X X X X X X X 298 80 23 1 0 20
7. 1989...... X X X X X X X X X X X X X X X X X X X X 444 59 56 0 30
8. 1990...... X X X X X X X X X X X X X X X X X X X X X X X X 140 146 63 50
9. 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 X X X X 364 157 50
10. 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 X X X X 507 175
11. 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 X X X X X X X X 182
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 4B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .... 62 109 42 14 8 9 3 3 2 2
2. 1984...... 132 168 81 58 36 22 4 5 6 4
3. 1985...... X X X X 1,626 84 86 26 5 0 0 0 0
4. 1986...... X X X X X X X X 116 88 37 13 2 0 0 0
5. 1987...... X X X X X X X X X X X X 99 75 32 34 17 8 0
6. 1988...... X X X X X X X X X X X X X X X X 631 29 12 8 5 3
7. 1989...... X X X X X X X X X X X X X X X X X X X X 850 22 6 0 0
8. 1990...... X X X X X X X X X X X X X X X X X X X X X X X X 223 17 4 1
9. 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 X X X X 760 231 12
10. 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 X X X X 2,504 813
11. 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 X X X X X X X X 4,353
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
SCHEDULE P - PART 4C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .... 1,459 798 523 84 51 44 19 71 44 99
2. 1984...... 4,209 1,113 923 627 222 (11) 27 37 36 29
3. 1985...... X X X X 5,358 2,188 1,349 202 1,140 459 572 18 40
4. 1986...... X X X X X X X X 6,670 2,809 2,622 2,587 247 107 503 401
5. 1987...... X X X X X X X X X X X X 5,545 1,516 1,333 103 1,138 325 74
6. 1988...... X X X X X X X X X X X X X X X X 3,888 1,304 913 1,099 73 57
7. 1989...... X X X X X X X X X X X X X X X X X X X X 2,094 2,288 1,526 1,207 346
8. 1990...... X X X X X X X X X X X X X X X X X X X X X X X X 6,946 3,444 1,866 367
9. 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 X X X X 7,071 4,585 1,357
10. 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 X X X X 10,310 3,064
11. 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 X X X X X X X X 12,472
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 4D - WORKERS' COMPENSATION
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .... 10,957 7,650 4,601 3,187 6,315 3,251 3,620 3,453 1,259 2,361
2. 1984...... 36,846 10,693 1,756 1,114 2,612 2,242 727 1,192 480 457
3. 1985...... X X X X 18,111 3,712 2,487 4,544 (566) 2,836 1,935 717 (1,064)
4. 1986...... X X X X X X X X 25,087 3,798 5,096 1,358 689 1,032 922 872
5. 1987...... X X X X X X X X X X X X 28,764 10,144 3,468 1,252 2,208 1,578 1,724
6. 1988...... X X X X X X X X X X X X X X X X 32,191 7,692 2,819 2,546 1,919 3,379
7. 1989...... X X X X X X X X X X X X X X X X X X X X 55,382 4,759 7,851 3,756 1,642
8. 1990...... X X X X X X X X X X X X X X X X X X X X X X X X 43,475 24,020 7,649 3,304
9. 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 X X X X 85,198 39,130 29,220
10. 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 X X X X 76,183 40,720
11. 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 X X X X X X X X 65,523
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 4E - COMMERCIAL MULTIPLE PERIL
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .... 1,236 1,194 921 402 227 39 112 731 570 471
2. 1984...... 3,195 1,280 1,259 183 465 92 103 650 308 335
3. 1985...... X X X X 3,425 1,491 818 647 144 7 714 425 308
4. 1986...... X X X X X X X X 4,508 1,186 613 158 73 962 1,050 560
5. 1987...... X X X X X X X X X X X X 3,360 506 1,722 59 1,053 454 324
6. 1988...... X X X X X X X X X X X X X X X X 2,786 917 111 1,656 1,457 1,317
7. 1989...... X X X X X X X X X X X X X X X X X X X X 4,306 1,128 199 43 137
8. 1990...... X X X X X X X X X X X X X X X X X X X X X X X X 937 509 319 158
9. 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 X X X X 3,862 1,397 495
10. 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 X X X X 3,203 350
11. 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 X X X X X X X X 2,735
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 4F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
- --------------------------------------------------------------------------------------------------------------------------------
1 BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
Years -------------------------------------------------------------------------------------------------------------
in Which
Losses 2 3 4 5 6 7 8 9 10 11
Were 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
Incurred
- ------------------ ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .... 18 19 20 20 0 0 0 0 0 0
2. 1984...... 2 0 0 0 0 0 0 0 0 0
3. 1985...... X X X X 0 0 0 0 0 0 0 0 0
4. 1986...... X X X X X X X X 0 0 0 0 0 0 0 0
5. 1987...... X X X X X X X X X X X X 0 0 0 0 0 0 0
6. 1988...... X X X X X X X X X X X X X X X X 6 35 3 0 0 0
7. 1989...... X X X X X X X X X X X X X X X X X X X X 15 13 0 0 0
8. 1990...... X X X X X X X X X X X X X X X X X X X X X X X X 285 250 325 133
9. 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 X X X X 1,849 1,125 542
10 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 X X X X 1,548 610
11. 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 X X X X X X X X 491
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 4F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .... 0 0 0 0 0 0 0 0 0 0
2. 1984...... 0 0 0 0 0 0 0 0 0 0
3. 1985...... X X X X 0 0 0 0 0 0 0 0 0
4. 1986...... X X X X X X X X 0 0 0 0 0 0 0 0
5. 1987...... X X X X X X X X X X X X 0 0 0 0 0 0 0
6. 1988...... X X X X X X X X X X X X X X X X 0 0 0 0 0 0
7. 1989...... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1990...... 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 0 0 0
9. 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 X X X X 0 0 0
10 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 X X X X 0 0
11. 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 X X X X X X X X 0
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
SCHEDULE P - PART 4G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .... 168 239 102 63 25 0 1 12 49 11
2. 1984...... 638 318 127 183 101 0 0 3 2 1
3. 1985...... X X X X 537 216 90 140 0 0 2 1 0
4. 1986...... X X X X X X X X 1,448 282 23 0 0 1 0 0
5. 1987...... X X X X X X X X X X X X 395 20 0 0 1 1 37
6. 1988...... X X X X X X X X X X X X X X X X 408 0 29 4 1 0
7. 1989...... X X X X X X X X X X X X X X X X X X X X 305 14 13 6 1
8. 1990...... X X X X X X X X X X X X X X X X X X X X X X X X 194 24 14 3
9. 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 X X X X 246 63 23
10 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 X X X X 221 48
11. 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 X X X X X X X X 357
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 4H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .... 1,067 621 383 6 1 55 0 1,012 2,980 2,611
2. 1984...... 3,378 1,136 310 510 94 0 0 34 22 21
3. 1985...... X X X X 3,503 2,549 912 64 191 (1,082) 23 43 175
4. 1986...... X X X X X X X X 8,096 1,846 3,279 1,189 3,501 1,233 494 743
5. 1987...... X X X X X X X X X X X X 7,984 5,041 4,450 3,855 580 138 123
6. 1988...... X X X X X X X X X X X X X X X X 2,714 355 1,114 593 527 150
7. 1989...... X X X X X X X X X X X X X X X X X X X X 2,038 178 1,448 557 88
8. 1990...... X X X X X X X X X X X X X X X X X X X X X X X X 2,699 2,009 897 150
9. 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 X X X X 5,695 1,306 655
10 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 X X X X 2,752 1,375
11. 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 X X X X X X X X 6,129
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 4H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .... 8,160 5,126 3,295 2,011 0 528 343 10 (500) 50
2. 1984...... 11,626 7,839 4,628 1,568 10 4 2 0 1,000 80
3. 1985...... X X X X 15,147 12,274 5,073 3,010 32 13 0 438 2,547
4. 1986...... X X X X X X X X 29,469 24,837 4,927 411 142 43,910 500 880
5. 1987...... X X X X X X X X X X X X 39,889 23,694 4,899 608 3,597 1,525 1,656
6. 1988...... X X X X X X X X X X X X X X X X 42,466 30,464 7,700 9,504 5,010 4,183
7. 1989...... X X X X X X X X X X X X X X X X X X X X 45,684 18,197 7,100 443 1,440
8. 1990...... X X X X X X X X X X X X X X X X X X X X X X X X 18,784 6,778 2,786 3,856
9. 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 X X X X 43,291 26,648 16,136
10 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 X X X X 46,145 29,465
11. 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 X X X X X X X X 61,270
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 4I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
- --------------------------------------------------------------------------------------------------------------------------------
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 -------------------------------------------------------------------------------------------------------------
Years
in Which 2 3 4 5 6 7 8 9 10 11
losses
Were 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
Incurred
- ------------------ ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <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 1,644 471 195
2 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 X X X X 1,284 309
3. 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 X X X X X X X X 840
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 4J - AUTO PHYSICAL DAMAGE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <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 505 157 105
2 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 X X X X 497 241
3. 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 X X X X X X X X 1,623
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 4K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAGE GUARANTY
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <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 278 17 19
2 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 X X X X 617 71
3. 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 X X X X X X X X 1,345
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 4L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <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 375 0 0
2 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 X X X X 83 6
3. 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 X X X X X X X X 1,218
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
SCHEDULE P - PART 4M - INTERNATIONAL
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior .... 0 0 0 0 0 0 0 0 0 0
2. 1984...... 0 0 0 0 0 0 0 0 0 0
3. 1985...... X X X X 0 0 0 0 0 0 0 0 0
4. 1986...... X X X X X X X X 0 0 0 0 0 0 0 0
5. 1987...... X X X X X X X X X X X X 0 0 0 0 0 0 0
6. 1988...... X X X X X X X X X X X X X X X X 0 0 0 0 0 0
7. 1989...... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1990...... 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 0 0 0
9. 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 X X X X 0 0 0
10. 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 X X X X 0 0
11. 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 X X X X X X X X 4
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P - PART 4N - REINSURANCE A
- --------------------------------------------------------------------------------------------------------------------------------
1 BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
Years -------------------------------------------------------------------------------------------------------------
in Which
Losses 2 3 4 5 6 7 8 9 10 11
Were 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
Incurred
- ------------------ ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1988...... X X X X X X X X X X X X X X X X 0 0 0 0 0 0
2 1989...... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
3 1990...... 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 0 0 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 X X X X 0 0 0
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 X X X X 0 0
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 X X X X X X X X 0
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 4O - REINSURANCE B
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1988...... X X X X X X X X X X X X X X X X 0 0 0 0 0 0
2 1989...... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
3 1990...... 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 0 0 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 X X X X 0 0 0
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 X X X X 0 0
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 X X X X X X X X 0
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 4P - REINSURANCE C
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1988...... X X X X X X X X X X X X X X X X 0 0 0 0 0 0
2 1989...... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
3 1990...... 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 0 0 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 X X X X 0 0 0
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 X X X X 0 0
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 X X X X X X X X 0
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
SCHEDULE P - PART 4Q - REINSURANCE D
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Prior .... 194 25 0 0 0 3,949 2,524 4,527 2,166 2,242
2 1984...... 170 33 0 0 0 50 1,010 0 0 0
3 1985...... X X X X 7 3 0 0 0 601 0 1,514 1,204
4 1986...... X X X X X X X X 100 0 0 0 0 0 0 0
5 1987...... X X X X X X X X X X X X 54 0 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 4R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Prior .... 445 233 82 0 0 0 0 0 300 349
2 1984...... 609 419 469 82 0 0 0 0 0 10
3 1985...... X X X X 1,138 853 725 781 1,082 1,082 0 299 221
4 1986...... X X X X X X X X 1,925 1,810 1,886 1,886 1,311 1,050 950 322
5 1987...... X X X X X X X X X X X X 2,290 2,290 2,290 2,190 1,250 1,100 638
6 1988...... X X X X X X X X X X X X X X X X 1,325 1,325 825 1,500 1,200 901
7 1989...... X X X X X X X X X X X X X X X X X X X X 1,317 1,317 1,900 1,600 1,750
8 1990...... X X X X X X X X X X X X X X X X X X X X X X X X 1,523 1,301 1,700 1,855
9 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 X X X X 2,345 1,800 2,200
10 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 X X X X 937 1,078
11 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 X X X X X X X X 1,248
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE P - PART 4R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Prior .... 0 0 0 0 0 0 0 0 0 0
2 1984...... 0 0 0 0 0 0 0 0 0 0
3 1985...... X X X X 0 0 0 0 0 0 0 0 0
4 1986...... X X X X X X X X 0 0 0 0 0 0 0 0
5 1987...... X X X X X X X X X X X X 0 0 0 0 0 0 0
6 1988...... X X X X X X X X X X X X X X X X 0 0 0 0 0 0
7 1989...... X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
8 1990...... 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 0 0 0
9 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 X X X X 0 0 0
10 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 X X X X 0 0
11 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 X X X X X X X X 0
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE ORION CAPITAL COMPANIES
.......................
(Name)
SCHEDULE P INTERROGATORIES
1. Computation of excess statutory reserves over statement reserves. See Instructions for explanation and formulas.
(a) Auto Liability (private passenger and commercial)
<S> <C> <C>
1993 $3,770 75.0%)
1992 $0 75.0%)
1991 $0 75.0%)
Total $3,770
<CAPTION>
(b) Other Liability and Products Liability
<S> <C> <C>
1993 $0 60.0%)
1992 $160 60.0%)
1991 $11,124 60.0%)
Total $11,284
<CAPTION>
(c) Medical Malpractice
<S> <C> <C>
1993 $0 60.0%)
1992 $643 60.0%)
1991 $653 60.0%)
Total $1,296
<CAPTION>
(d) Workers' Compensation
<S> <C> <C>
1993 $0 69.5%)
1992 $0 69.5%)
1991 $0 69.5%)
Total $0
<CAPTION>
(e) Credit
<S> <C>
Total $3,650
<CAPTION>
(f) All Lines Total (Report here and Page 3)
<S> <C>
Total $20,000
<PAGE>
<CAPTION>
2. What is the extended loss and expense reserve - direct and assumed - for the following classes? An example of an extended loss
and expense reserve is the actuarial reserve for the free-tail coverage arising upon death, disability or retirement in most
medical malpractice policies. Such a liability is to be reported here even if it was not reported elsewhere in Schedule P, but
otherwise reported as a liability item on page 3. Show the full reserve amount, not just the change during the current year.
-------------------------------------------------------------------------------------
| Year in which premiums | 1 | 2 | 3 |
| were earned and losses | Medical | Other | Products |
| were incurred | Malpractice | Liability | Liability |
|---------------------------------------------|-------------|------------|------------|
| <S> | <C> | <C> | <C> |
| (a) 1987 | 0 | 0 | 0 |
| (b) 1988 | 0 | 0 | 0 |
| (c) 1989 | 0 | 0 | 0 |
| (d) 1990 | 0 | 0 | 0 |
| (e) 1991 | 0 | 0 | 0 |
| (f) 1992 | 0 | 0 | 0 |
| (g) 1993 | 0 | 0 | 0 |
|---------------------------------------------|-------------|------------|------------|
| (h) Totals | 0 | 0 | 0 |
-------------------------------------------------------------------------------------
<CAPTION>
3. The term "Loss expense" includes all payments for legal expenses, including attorney's and witness fees and court costs, salaries
and expenses of investigators, adjustors and field men, rents, stationery, telegraph and telephone charges, postage, salaries and
expenses of office employees, home office expenses and all other payments under or on account of such injuries, whether the
payments are allocated to specific claims or are unallocated. Are they so reported in this statement?
Answer: Yes [ X ] No [ ]
4. The unallocated loss expense payments paid during the most recent calendar year should be distributed to the various years in
which losses were incurred as follows: (1) 45% to the most recent year, (2) 5% to the next most recent year, and (3) the
balance to all years, including the most recent, in proportion to the amount of loss payments paid for each year during the
most recent calendar year. If the distribution in (1) or (2) produces an accumulated distribution to such year in excess of
10% of the premiums earned for such year, disregarding all distributions made under (3), such accumulated distribution
should be limited to 10% of premiums earned and the balance distributed in accordance with (3) Answer: Yes [ X ] No [ ]
5. Do any lines in Schedule P include reserves which are reported gross of any discount to present value of future payments,
but are reported net of such discounts on page 10? Answer Yes [ ] No [ X ]
If yes, proper reporting must be made in the Notes to Financial Statements, as specified in the Instructions. Also, the
discounts must be reported in Schedule P - Part 1, Columns 31 and 32.
Schedule P must be completed gross of non-tabular discounting. Work papers relating to discount calculations must be available
for examination upon request.
Discounting is allowed only if expressly permitted by the state insurance department to which this Annual Statment is being
filed.
6. What were the net premiums in force at the end of the year for:
(in thousands of dollars) <S> <C>
(a) Fidelity $0
(b) Surety $31,850
7. Claim count information is reported (check one) (a) per claim X
If not the same in all years, explain in Question 8. ------------
(b) per claimant See Below
<PAGE> ------------
<CAPTION
8. The information provided in Schedule P will be used by many persons to estimate the adequacy of the current loss and expense
reserves, among other things. Are there any especially significant events, coverage, retention or accounting changes which have
occurred which must be considered when making such analyses (An extended statement may be attached)?
Item 1: Accident years 1978 to 1989 for Workkers' Compensation and accident years 1885, 1986, 1987 for Other Liability-Claims
Made Outstanding Losses are recorded net of Aggregate Excess of Loss Reinsurance treaties. Great care should be exercised
in interpreting all Schedule P pages associated with these two product lines. Schedule P data with the impact of these
reinsurance treaties removed is available from the company
Item 2: Claim counts are for voluntary product written by the company. Pools and Association, Assigned Risk for
Workers' Compensation and Automobile plans are not provided by the Company. Great care should be exercised in using claim
count information.
</TABLE>
