<PAGE> 1
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
Commission
For the fiscal year ended December 31, 1993 File Number 1-9371
----------------- ------------------
ALLEGHANY CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 51-0283071
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Park Avenue Plaza, New York, New York 10055
----------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212/752-1356
------------
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
6-1/2% Subordinated Exchangeable New York Stock Exchange
Debentures Due June 15, 2014
Securities registered pursuant to Section 12(g) of the Act:
Not applicable
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:
Yes X No
------- -------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
As of March 1, 1994, 6,626,610 shares of Common Stock were outstanding, and the
aggregate market value (based upon the closing price of these shares on the New
York Stock Exchange) of the shares of Common Stock of Alleghany Corporation
held by non-affiliates was $737,801,949.
<PAGE> 2
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference into the
indicated part(s) of this Report:
Part
Annual Report to Stockholders of Alleghany I and II
Corporation for the year 1993, dated
March 15, 1994
Proxy Statement dated March 28, 1994 relating III
to Annual Meeting of Stockholders of Alleghany
Corporation to be held on April 22, 1994
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ALLEGHANY CORPORATION
Annual Report on Form 10-K
for the year ended December 31, 1993
<TABLE>
<CAPTION>
Table of Contents
Description Page
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PART I
<S> <C> <C>
Item 1. Business 5
Item 2. Properties 70
Item 3. Legal Proceedings 75
Item 4. Submission of Matters to a Vote
of Security Holders 80
Supplemental Executive Officers of Registrant 80
Item
PART II
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters 82
Item 6. Selected Financial Data 82
Item 7. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 82
Item 8. Financial Statements and Supple-
mentary Data 82
Item 9. Changes in and Disagreements With
Accountants on Accounting and
Financial Disclosure 82
</TABLE>
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<TABLE>
<CAPTION>
Description Page
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<S> <C> <C>
PART III
Item 10. Directors and Executive Officers
of Registrant 83
Item 11. Executive Compensation 83
Item 12. Security Ownership of Certain
Beneficial Owners and Management 83
Item 13. Certain Relationships and Related
Transactions 84
PART IV
Item 14. Exhibits, Financial Statement
Schedules and Reports on Form 8-K 85
Signatures 101
</TABLE>
Index to Financial Statement Schedules
FINANCIAL STATEMENT SCHEDULES
INDEPENDENT AUDITORS' REPORT ON
FINANCIAL STATEMENT SCHEDULES
Index to Exhibits
EXHIBITS
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<PAGE> 5
PART I
Item 1. Business.
Alleghany Corporation ("Alleghany") was incorporated in 1984 under
the laws of the State of Delaware. In December 1986, Alleghany succeeded to
the business of its parent company, Alleghany Corporation, a Maryland
corporation incorporated in 1929, upon the parent company's liquidation.
Alleghany's principal executive offices are located at Park Avenue
Plaza, New York, New York 10055 and its telephone number is (212) 752-1356.
Alleghany is engaged, through its subsidiaries Chicago Title and Trust Company
("CT&T"), Chicago Title Insurance Company ("CTI"), Security Union Title
Insurance Company ("Security Union") and Ticor Title Insurance Company ("Ticor
Title") and their subsidiaries, in the sale and underwriting of title insurance
and in certain other financial services businesses. Alleghany is also engaged,
through its subsidiary Underwriters Reinsurance Company ("Underwriters"), in
the property and casualty reinsurance business. In addition, Alleghany is
engaged through its subsidiary Sacramento Savings Bank ("Sacramento Savings")
in retail banking, and, through its subsidiaries World Minerals Inc. ("World
Minerals"), Celite Corporation ("Celite") and Harborlite Corporation
("Harborlite") and their subsidiaries, in the industrial minerals business.
Alleghany conducts a steel fastener importing and distribution business through
its Heads and Threads division.
Until December 31, 1991, Alleghany was also engaged, through its
subsidiary The Shelby Insurance Company ("Shelby"), in the property and
casualty insurance business. On that date, Shelby was sold to Associated
Insurance Companies, Inc., an Indiana corporation, for a purchase price of $125
million in cash.
On October 7, 1993, Alleghany acquired approximately 93 percent of
the issued and outstanding capital stock of a new holding company which owns
all of the issued and outstanding capital stock of Underwriters for a cash
purchase price of approximately $201 million. Alleghany acquired its 93
percent interest in the new holding company from a holding company formerly
owned by The Continental Corporation, Goldman, Sachs & Co. and certain
affiliated investment partnerships, and members of Underwriters management.
Prior to the acquisition by Alleghany, The Continental Corporation acquired the
interests of the Goldman, Sachs entities for cash and the interests of the
members of Underwriters management for cash and the remaining 7
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percent of the issued and outstanding capital stock of the new holding company
which owns Underwriters. Subsequent to the acquisition, Alleghany made capital
contributions to the new holding company so as to increase Alleghany's equity
interest to 94.6 percent of the issued and outstanding capital stock of the new
holding company as of 1993 year-end.
In 1993 Alleghany studied a number of potential acquisitions.
Alleghany intends to continue to expand its operations through internal growth
at its subsidiaries as well as through possible operating-company acquisitions.
Reference is made to Items 7 and 8 of this Report for further
information about the business of Alleghany in 1993. The consolidated
financial statements of Alleghany, incorporated by reference in Item 8 of this
Report, include the accounts of Alleghany and its subsidiaries for all periods
presented.
TITLE INSURANCE AND TRUST BUSINESS
CT&T, headquartered in Chicago, is engaged in the sale and
underwriting of title insurance and related services (including abstracting,
searches, and escrow, closing and disbursement services) through CTI, Security
Union, Ticor Title and other title insurance subsidiaries, collectively known
as the CT&T Family of Title Insurers. Organized as an Illinois corporation in
1912, CT&T was acquired by Alleghany in June 1985. CTI, a Missouri corporation
incorporated in 1961, succeeded to businesses conducted by predecessor
corporations since 1847. Security Union (acquired in 1987) and Ticor Title
(acquired in 1991) were incorporated in California in 1962 and 1965,
respectively, but both were a part of business organizations that had succeeded
to businesses conducted since around the turn of the century. CT&T is also a
qualified Illinois trust company and conducts certain other financial services
businesses through its Financial Services Group.
On March 8, 1991, CT&T acquired Ticor Title Insurance Company of
California (which was Ticor Title's immediate parent prior to its merger into
CTI in September 1992), from Westwood Equities Corporation for a total cash
purchase price of $55.6 million, subject to adjustment, and a promissory note
in the principal amount of $15 million, subject to adjustment. The cash
purchase price was required to be increased by up to $15 million based upon
changes in consolidated net worth. The amount of this adjustment was
determined to be zero by an arbitration decision rendered in February 1993.
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The principal amount of the promissory note issued by CT&T to
Westwood Equities Corporation, which will mature on March 31, 1995, is subject
to an increase to $20 million or a decrease to zero based on a re-evaluation of
the title loss reserves of Ticor Title Insurance Company of California and its
subsidiaries as of December 31, 1994. Alleghany believes that the principal
amount of the promissory note will be zero and, accordingly, has excluded this
note from the determination of the purchase price and from its consolidated
financial statements.
Since the acquisition of the Ticor Title organization by CT&T, CT&T
has substantially integrated Ticor Title into its own operations. As part of
that process, CT&T's title operations were reorganized into three geographic
divisions: Northeastern, Central and Western. A primary objective of the
integration was to create a system in which field and support personnel work
effectively and efficiently together to provide the highest-quality product and
best service in the industry.
The goal of improved effectiveness and efficiency also triggered
two other systematic, company-wide initiatives at CT&T. In 1992, Project
Nimble Leader was implemented to assess and, where possible, streamline staff
support activities. In 1993, CT&T initiated a customer-focused product quality
project entitled Quest for Excellence. This project seeks to identify issues
that are important to CT&T's customers in their business relationships with
CT&T, and to provide training and support to CT&T's personnel to enable them to
be more responsive to their customers' title insurance needs. CT&T plans an
aggressive schedule of implementation in branch offices in 1994 and 1995.
Streamlining activities at CT&T since the Ticor Title acquisition
extended to its own corporate structure. Effective September 30, 1992, CT&T
consolidated a number of the title insurance underwriters in its corporate
family by merging three title insurers into CTI. The merged companies were
Ticor Title Insurance Company of California, Chicago Title Insurance Company of
Maryland and Chicago Title Insurance Company of Idaho. Immediately after the
mergers, the ownership of Ticor Title, formerly a subsidiary of Ticor Title
Insurance Company of California, was transferred from CTI to CT&T.
Effective January 25, 1994, Richard P. Toft, who is a Senior Vice
President of Alleghany, President and Chief Executive Officer of CT&T, and
Chairman of CTI, assumed responsibility for Alleghany's liaison with Sacramento
Savings, stepped down as Chief Executive Officer of CTI and assumed the
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vacant office of Chairman of CT&T. Richard L. Pollay, who was President and
Chief Operating Officer of CTI, became Chief Executive Officer of CTI and Vice
Chairman of CT&T.
In mid-1993, CT&T acquired Heritage American Insurance Services,
which is a San Francisco-based limited general line insurance broker. Heritage
American was acquired to market mortgage layoff insurance, homeowners insurance
and mortgage life insurance through CT&T internal systems in California.
License applications have been submitted to expand Heritage American's business
to several adjacent states.
The CT&T Family of Title Insurers is the largest title insurance
organization in the world. Each of the principal title insurance subsidiaries
- -- CTI, Security Union and Ticor Title -- was assigned a claims-paying ability
rating of "A-" by Standard & Poor's Corporation in 1992 and again in 1993,
confirming the financial strength of the CT&T Family of Title Insurers. The
CT&T Family of Title Insurers has approximately 200 full-service offices and
3,500 policy-issuing agents in 49 states, Puerto Rico, the Virgin Islands and
Canada. CTI is headquartered in Chicago, and Security Union and Ticor Title
are headquartered in Rosemead, California.
The CT&T Family of Title Insurers insures a variety of interests in
real property. For a one-time premium, purchasers of residential and
commercial properties, mortgagees, lessees and others with an interest in real
property purchase insurance policies to insure against loss suffered as a
result of any encumbrances or other defects in title, as that title is defined
in the policy. Prior to the issuance of a policy, a title insurer conducts a
title search and examination of the property, a process by which it identifies
risks and defines the risks to be assumed by the insurer under the policy.
To conduct a title search and examination, an agent or employee of
the CT&T Family of Title Insurers reviews various records providing a history
of transfers of interests in the parcel of real estate with respect to which a
policy of title insurance is to be issued. These records are maintained by
local governmental entities, such as counties and municipalities. Title
records, known as title plants, owned by the CT&T Family of Title Insurers are
also used as a reference, allowing complete title searches without resorting to
governmental records. The CT&T Family of Title Insurers' title plants consist
of their own compilations of land title and deed information copied from public
records dating back many years on
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properties in various geographical locations. These title plants are updated
daily.
While most other forms of insurance provide for the assumption of
risk of loss arising out of unforeseen future events, title insurance serves to
protect the policyholder from the risk of loss from events that predate the
issuance of the policy. This distinction underlies the low claims loss
experience of title insurers as compared with other insurance underwriters.
Realized losses generally result from either judgment errors or mistakes made
in the title search and examination process or the escrow process, or from
other problems such as fraud or incapacity of persons transferring property
rights. Operating expenses, on the other hand, are higher for title insurance
companies than for other companies in the insurance industry. Most title
insurers incur considerable costs relating to the personnel required to process
forms, search titles, collect information on specific properties and prepare
title insurance commitments and policies. Many title insurers also face
ongoing costs associated with the establishment, operation and maintenance of
title plants.
CTI, Security Union and Ticor Title each have generally restricted
the size of any one risk of loss that they will retain to $70 million, $30
million and $50 million, respectively. The title insurers in the CT&T Family
of Title Insurers reinsure risks with each other and with other title insurance
companies in excess of what they are willing to retain. In addition, the title
insurers have purchased reinsurance coverage for individual losses in excess of
$12.5 million, subject to certain exclusions. This coverage will pay 90
percent of such losses up to $50 million. However, reinsurance arrangements do
not relieve a title insurance company that issues a policy from its legal
liability to the holder of the policy and, thus, the risk of nonperformance by
the assuming reinsurer is borne by the issuer of the policy.
The CT&T Family of Title Insurers issues title insurance policies
directly through its branch office operations as well as through policy-issuing
independent agents. The CT&T Family of Title Insurers also sometimes issues
policies of insurance in situations where the title search and examination
process is performed by approved attorneys working as independent contractors.
The primary sources of title insurance business are the major
participants in local real estate markets: attorneys, builders, commercial
banks, thrift institutions, mortgage banks
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and real estate brokers. Other significant sources of business are large
commercial developers and real estate brokerage firms operating on a national
scale. The title insurance business of the CT&T Family of Title Insurers is
not dependent on one or a few customers.
The title insurance industry is highly sensitive to the volume of
real estate transactions and to interest rate levels. Industry revenues have
tended to move cyclically with real estate sales and countercyclically to
mortgage interest rates. The title industry was adversely affected by the
recession and severely depressed real estate markets in 1990 and 1991.
However, interest rates began to drop in 1992 and in 1993 reached new
thirty-year lows. Driven by first-time buyers enticed into the market by the
low interest rates, home sales increased 11.1 percent in 1992, and 3.4 percent
in 1993. The 1993 home sales figures came within 5 percent of the all-time
high recorded in 1978, producing record levels of title operations revenues and
pre-tax earnings at CT&T. Low interest rates also resulted in a high volume of
refinancing orders, including a record number of such orders in the last three
quarters of 1993.
In addition to an active residential market, CT&T title operations
benefited from the beginnings of a recovery in the commercial sector in 1993.
Though traditional commercial lenders remained on the sidelines, renewed
interest in real estate-related investment vehicles, such as real estate
investment trusts and real estate mortgage investment conduits, brought new
sources of funds to the market and contributed to the first upturn in activity
in the commercial sector since 1989.
The business of the CT&T Family of Title Insurers is seasonal, as
housing activity is seasonal. The strongest quarter is typically the third
quarter because there are more home sales and commercial construction during
the summer; the first quarter is typically the weakest quarter. Revenues
generally are recognized by CT&T at the time of the closing of the real estate
transaction with respect to which a title insurance policy is issued;
accordingly, there is typically a lag of about two months between the time that
a title insurance order is placed, at which time work commences, and the time
that CT&T recognizes the revenues associated with the order.
Approximately 70.5 percent of the revenues of the CT&T Family of
Title Insurers in 1993 are estimated to have been generated by residential real
estate activity, consisting of
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resales (43.1 percent), refinancings (16.2 percent) and new housing (11.2
percent). Commercial and industrial real estate activity is estimated to
account for the remaining 29.5 percent of 1993 revenues, attributable to
initial sales and resales (21.6 percent) and refinancings (7.9 percent).
CT&T's National Business Group provides title insurance-related
services on a nationwide basis. One component of the National Business Group
is the network of National Business Units and National Title Services offices.
As a one-stop source of title services for both single-site and multi-site
commercial and industrial real estate ventures, CT&T's network had 21 offices
at 1993 year-end, and is the title industry's largest. The other two
components of CT&T's National Business Group are SAFETRANS, which services
executive relocation firms, and the National Accounts Unit, which services
national and regional residential lenders and low-liability commercial
accounts.
CT&T's Financial Services Group
CT&T's Financial Services Group comprises four businesses, as
follows:
-- The institutional investment management group manages equity
and fixed income institutional assets in excess of $3.0 billion, primarily
for employee benefit plans, foundations and insurance companies.
-- The employee benefits services group offers profit sharing
plans, matching savings plans, money purchase pensions and consulting
services, and has become one of the leading providers of 401(k) salary
deferral plans to mid-sized companies in the upper Midwest.
-- The personal trust and investment services group, with
approximately $1.1 billion under management, provides investment
management and trust and estate planning services primarily for accounts
in the $250,000 to $15 million range.
-- The real estate trust services group offers land trusts which
permit real estate to be conveyed to a trustee while reserving to the
beneficiaries the full management and control of the property. This group
also facilitates tax-deferred exchanges of income-producing real property.
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In connection with its financial services activities, CT&T competes
with national, regional and local providers of financial services. Such
competition is chiefly on the basis of service and investment performance. As
of December 31, 1993, CT&T held assets totalling $5 billion, of which $4
billion were actively managed. CT&T's financial services business is not
seasonal, and is not dependent on one or a few customers.
CT&T also owns Security Trust Company, a California corporation,
which is a full-service trust company.
In December 1993, CT&T received clearance from the Securities and
Exchange Commission to establish a new management company, CT&T Funds, to offer
four no-load, open-end mutual funds to the general public. The four funds are
the CT&T Growth and Income Fund, a fund invested mainly in common stocks, the
CT&T Intermediate Fixed Income Fund, a fund invested mainly in intermediate
taxable bonds, CT&T Intermediate Municipal Bond Fund, a fund invested mainly in
intermediate municipal bonds, and CT&T Money Market Fund, a fund invested
mainly in short-term investments. Initially, the new funds will be marketed to
individual investors to attract rollover funds from existing 401(k) and pension
fund programs managed by CT&T.
Competition
The title insurance industry is competitive throughout the United
States, with large firms such as CTI, Security Union and Ticor Title competing
on a national basis, while smaller firms have significant market shares on a
regional basis. During 1993, CTI, Security Union, Ticor Title, First American
Title Insurance Company, Commonwealth Land Title Insurance Company and Lawyers
Title Insurance Corporation, together accounted for approximately 70 percent of
the revenues generated by title insurance companies. The CT&T Family of Title
Insurers also competes with abstractors, attorneys issuing opinions and, in
some areas, state land registration systems. Competition in the title
insurance industry is primarily on the basis of service. In addition, the
financial strength of the insurer has become an increasingly important factor
in certain title insurance purchase decisions, particularly in multi-site
transactions and -- with the growing market for real estate-related investment
vehicles such as real estate investment trusts and real estate mortgage
investment conduits -- in investment decisions.
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Regulation
Title insurance companies are subject to regulation and supervision
by state insurance regulators under the insurance statutes and regulations of
states in which they are incorporated. CTI is incorporated in Missouri,
Security Union is incorporated in California and has a title insurance
subsidiary incorporated in Oregon, and Ticor Title is incorporated in
California and has a title insurance subsidiary incorporated in New York. Each
of these companies is also regulated in each jurisdiction in which it is
authorized to write title insurance. Regulation and supervision vary from
state to state, but generally cover such matters as the standards of solvency
which must be met and maintained, the nature of limitations on investments, the
amount of dividends which may be distributed to a parent corporation,
requirements regarding reserves for unearned premiums and losses, the licensing
of insurers and their agents, the approval of policy forms and premium rates,
periodic examinations of title insurers and annual and other reports required
to be filed on the financial condition of title insurance companies.
The Financial Services Group, which acts as a fiduciary, is
primarily regulated by the State of Illinois Commissioner of Banks and Trust
Companies. Regulation covers such matters as the fiduciary's management
capabilities, the soundness of its policies and procedures, the quality of the
services it renders to the public and the effect of its trust activities on its
financial soundness.
Employees
At December 31, 1993, CT&T and its subsidiaries had approximately
8,500 employees.
BANKING BUSINESS
In November 1989, a wholly owned subsidiary of Alleghany acquired
Sacramento Savings and two ancillary companies for a cash purchase price of
$150 million. Sacramento Savings is a California-licensed savings institution
that has been offering retail banking services since 1874. With headquarters
in Sacramento and 45 branch offices located in north central California,
Sacramento Savings is engaged principally in the business of attracting
deposits from the general public and using such deposits, together with
borrowings and other funds, to originate residential and commercial real estate
loans and consumer loans. In addition, through a subsidiary, Sacramento
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Savings offers its customers tax-deferred annuity plans and mutual funds.
Sacramento Savings operates in fourteen counties in north central
California. Its primary market area is the Sacramento Metropolitan Statistical
Area, covering Sacramento, El Dorado, Placer and Yolo counties. Sacramento
Savings is the leading thrift institution in that part of California, which has
experienced strong economic and population growth in recent years and is
expected to resume doing so as the northern California economy recovers. This
expected growth suggests a continued increase in retail deposits in the primary
market area of Sacramento Savings.
As of December 31, 1993, Sacramento Savings had total assets of $3.0
billion, total deposits of $2.8 billion and shareholder's equity of $200
million. Sacramento Savings' deposits are insured by the Savings Association
Insurance Fund of the Federal Deposit Insurance Corporation (the "FDIC").
Lending Activities
Earning assets represent about 89 percent of Sacramento Savings'
total assets. Real estate loans, the largest category, comprise about 67
percent of total assets. Nonmortgage loans represent less than 2 percent of
total assets. Investment securities comprise the remainder, or about 21
percent, of total assets.
Loan Portfolio Composition. The following table shows Sacramento
Savings' loan portfolio in dollar amounts and percentages for the past three
years (in thousands):
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<TABLE>
<CAPTION>
Loan Portfolio
December 31,
--------------------------------------------------------------------
1993 1992 1991
------------------- ------------------ --------------------
Amount % Amount % Amount %
-------- ----- -------- ----- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Real Estate
1-4 residential
properties $1,340,854 62.4% $1,394,203 61.5% $1,265,044 58.0%
Other residential
& commercial 766,575 35.7 830,062 36.6 873,565 40.1
---------- ----- ---------- ----- ---------- ------
Total real
estate loans 2,107,429 98.1 2,224,265 98.1 2,138,609 98.1
Consumer 40,647 1.9 43,227 1.9 42,300 1.9
---------- ----- ---------- ----- ---------- -----
Total loans
receivable 2,148,076 100.0% 2,267,492 100.0% 2,180,909 100.0%
========= ===== ========= ===== ========= =====
Less:
Allowance for
estimated loan
losses (22,442) (22,798) (18,323)
Undisbursed portion
of loans in
process (36,838) (59,777) (86,682)
Unamortized loan
fees (8,061) (9,185) (8,287)
---------- ---------- ----------
2,080,735 2,175,732 2,067,617
Less: Intercompany (8,139) (8,303) --
---------- ---------- ----------
Total loans
receivable, net $2,072,596 $2,167,429 $2,067,617
========== ========== ==========
</TABLE>
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The following table shows the fixed and adjustable-rate
composition of Sacramento Savings' loan portfolio at December 31, 1993 (in
thousands):
Loan Classification Summary
December 31, 1993
<TABLE>
<CAPTION>
Amount %
------ ----
<S> <C> <C>
Fixed-rate Loans:
Real estate:
1 - 4 residential properties $ 466,749 21.7%
Other residential & commercial 51,435 2.4
---------- -----
Total real estate loans 518,184 24.1
Consumer 33,217 1.6
---------- -----
Total fixed-rate loans 551,401 25.7
---------- -----
Adjustable Rate Loans:
Real estate:
1 - 4 residential properties 874,105 40.7
Other residential & commercial 715,140 33.3
---------- -----
Total real estate loans 1,589,245 74.0
Consumer 7,430 0.3
---------- -----
Total adjustable rate loans 1,596,675 74.3
---------- -----
Total loans receivable 2,148,076 100.0%
=====
Less:
Allowance for estimated
loan losses (22,442)
Undisbursed portion of loans
in process (36,838)
Unamortized loan fees (8,061)
----------
2,080,735
Less: Intercompany (8,139)
----------
Total loans receivable, net $2,072,596
==========
</TABLE>
The following table shows, at December 31, 1993, dollar amounts
of loans in Sacramento Savings' portfolio based on their contractual maturity
dates (in thousands):
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<PAGE> 17
Loan Maturity Summary
December 31, 1993
<TABLE>
<CAPTION>
More than More than
One Year Weighted One Year Weighted Five Years Weighted
or Average to Five Average to Ten Average
Less Rate Years Rate Years Rate
-------- -------- --------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Real estate:
1-4 residential
properties $ 69,585 8.21% $ 57,129 7.39% $ 57,056 7.62%
Other residential
& commercial 67,215 9.98 61,440 9.69 82,581 7.42
-------- -------- --------
Total real estate
loans 136,800 9.08 118,569 8.58 139,637 7.50
Consumer 34,890 11.95 4,565 7.75 908 14.32
-------- -------- --------
Total loans $171,690 9.67% $123,134 8.55% $140,545 7.54%
======== ======== ========
</TABLE>
(Table continues on next page)
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(continued)
<TABLE>
<CAPTION>
Loan Maturity Summary
December 31, 1993
More than
Ten Years Weighted More than Weighted Weighted
to Twenty Average Twenty Average Average
Years Rate Years Rate Total Rate
--------- -------- --------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Real estate:
1-4 residential
properties $265,625 7.82% $ 891,459 6.99% $1,340,854 7.26%
Other residential
& commercial 376,047 7.11 179,292 6.92 766,575 7.56
-------- ---------- ----------
Total real estate
loans 641,672 7.41 1,070,751 6.98 2,107,429 7.37
Consumer 113 7.55 171 10.40 40,647 11.51
-------- ---------- ----------
Total loans $641,785 7.41% $1,070,922 6.98% $2,148,076 7.45%
========= ========== ==========
</TABLE>
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Of the $1.976 billion of loans due after December 31, 1994, $463.1
million, or 23.4 percent, have fixed rates of interest and $1.513 billion, or
76.6 percent, have adjustable rates of interest.
The following table shows, at December 31, 1993, the dollar
amounts and repricing periods of the adjustable rate loans with contractual
maturity dates beyond December 31, 1994 (in thousands):
<TABLE>
<CAPTION>
Adjustable Rate Loan
Repricing Summary
December 31, 1993
More than More than
One Year One Year Five Years
or to Five to Ten
Less Years Years Total
-------- --------- ----------- -----
<S> <C> <C> <C> <C>
Real estate:
1-4 residential
properties $ 614,591 $75,813 $143,504 $ 833,908
Other residential
& commercial 663,033 362 14,229 677,624
---------- ------- -------- ----------
Total real estate
loans 1,277,624 76,175 157,733 1,511,532
Consumer 1,790 0 0 1,790
---------- ------- -------- ----------
Total adjustable rate
loans with contractual
maturity dates beyond
December 31, 1994 $1,279,414 $76,175 $157,733 $1,513,322
========== ======= ======== ==========
</TABLE>
One- to Four-Family Residential Real Estate Lending.
Sacramento Savings presently offers a variety of residential real
estate loans secured by one- to four-family living units for the purpose of
purchase, refinance, or construction. Maximum loan-to-value ("LTV") ratios for
these
-19-
<PAGE> 20
products generally range from 60 percent to 95 percent, and there is a maximum
dollar limit of $750,000. These loans are secured by first deeds of trust.
Traditional single family residential real estate loans
historically were made only on a long-term, fixed-rate basis. The
characteristics of these types of loans exposed the lender to a greater level
of interest rate risk to the extent that its assets did not reprice as
frequently as its liabilities. As a part of its asset and liability management
strategy, Sacramento Savings has originated primarily adjustable rate mortgage
("ARM") loans for its portfolio in recent years. Sacramento Savings' ARM loans
are indexed to the monthly average cost of funds of Eleventh District Savings
Institutions ("11th COF"). Sacramento Savings offers numerous types of ARM
loans: as of December 31, 1993, initial rates ranged from 3.875 percent to
5.375 percent, and margins over the index ranged from 2.375 percent to 2.50
percent. All types of ARM loans offered by Sacramento Savings provide for
semi-annual adjustment caps of 1 percent and a lifetime ceiling of 11.95
percent. Loan origination fees generally approximate 1 percent of the loan
amount plus $250. Sacramento Savings requires loans secured by non-owner
occupied properties to have lower LTV ratios, lower maximum loan amounts
($400,000), higher initial interest rates and wider margins over the index.
Unlike many competitors, Sacramento Savings does not offer ARM
products permitting negative amortization. Negative amortization occurs when
the monthly payment under the terms of the note is insufficient to pay accrued
interest on the loan. The shortage is added to the principal balance of the
loan. In periods of rising interest rates and/or moderating to declining
collateral values, negative amortization loans can create an unsecured
extension of credit.
Sacramento Savings also offers a variety of fixed-rate loans
secured by owner-occupied one- to four-family units for the purpose of purchase
or refinance. While these loans are structured and underwritten to allow for
immediate sale in the secondary market, Sacramento Savings performs an
individual loan-by-loan review at the time of loan funding (after the loan
commitment is extended to the borrower). As a result of such review,
Sacramento Savings classifies its fixed-rate loans either as portfolio loans
(held until maturity) or as loans held for sale, depending on characteristics
such as contractual term, LTV ratio and borrower age. Loans held for sale are
reported at the lower of aggregate historical cost or market value. At
December 31, 1993 loans held for sale totalled $21.2 million. However, $16.6
million of such loans consisted of mortgages conforming to
-20-
<PAGE> 21
the requirements of the Federal Home Loan Mortgage Corporation ("FHLMC") or the
Federal National Mortgage Association ("FNMA"), which were originated and sold
by another area lender and temporarily owned by Sacramento Savings for the
purpose of generating additional income.
Fixed-rate loans held for sale are generally sold to either FHLMC
or FNMA. Sacramento Savings continues to service such loans after their sale.
At December 31, 1993, loans serviced for others totalled $192 million.
Sacramento Savings retains fixed-rate loans which exceed the FHLMC
or FNMA maximum dollar limits. These originations of one- to four-family unit
loans amounted to $19.8 million in 1993.
At December 31, 1993, the following rates and fees were effective
for Sacramento Savings' fixed-rate one- to four-family unit loans, which
conform to federal agency underwriting criteria:
<TABLE>
<CAPTION>
Range
-----------------------------
Contractual Term Rates Fees
- ---------------- ----- ----
<S> <C> <C>
$250 plus
30-year amortization - interest
rate reset at 5th year 5.500% - 6.625% 2.75% to 0%
30-year amortization - interest
rate reset at 7th year 5.750% - 6.875% 4.00% to 0%
15-year amortization 6.125% - 7.250% 4.00% to 0%
30-year amortization 6.750% - 7.625% 4.00% to 0%
</TABLE>
Loans secured by second deeds of trust amounted to less than $7.0
million at December 31, 1993.
Income Property Real Estate and Construction Lending. Long-term
loans to purchase or refinance income properties are offered at initial rates
that, as of December 31, 1993, ranged from 5.35 percent (prime apartment
properties) to 7.10 percent, adjustable semiannually with a margin over the
11th COF index of 2.375 percent to 3.50 percent. The maximum LTV ratio is 75
percent. Sacramento Savings also makes interim construction loans on these
properties with a maximum term of 24 months. As of December 31, 1993, the
initial rate on construction loans was the prime rate of a bank selected by
Sacramento Savings plus 200 basis points, adjusted after 12 months. In
addition, a substantial
-21-
<PAGE> 22
volume of interim construction loans is made on one- to four-family units,
primarily single-family detached homes.
Loan origination fees are higher on construction loans than on
residential real estate loans as compensation for the greater risks and
servicing costs inherent in this type of lending. In order to minimize the
construction loan credit risk, Sacramento Savings utilizes conservative
underwriting policies and employs construction loan inspectors who perform
regular on-site inspections, approve disbursements and monitor compliance with
the approved construction budget.
Construction loans net of undisbursed loan funds totalled $88.0
million, or 2.91 percent of assets, at December 31, 1993. This represents a
decline of approximately 33 percent from the prior year.
The following tables show locations and types of properties securing
Sacramento Savings' real estate loans at December 31, 1993, and the amount of
such loans which are non-performing (i.e., which are more than 60 days
delinquent, or with respect to which the collection of principal and/or
interest is otherwise doubtful):
-22-
<PAGE> 23
Real Estate Loans (excluding Construction Loans) as of December 31, 1993
<TABLE>
<CAPTION>
Number of Balance Number of Balance of Total Total
Fixed-rate of Fixed Adjustable Adjustable Number Outstanding Amount Non-
Loans Rate Loans Rate Loans Rate Loans of Loans Balance Performing
---------- ---------- ---------- ---------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Sacramento Area
1-4 residential 3,668 $254,949,663 2,765 $289,421,797 6,433 $544,371,460 $2,520,914
Other residential 55 14,984,478 123 147,731,534 178 162,716,012 0
Commercial real
estate 51 17,535,220 369 154,223,230 420 171,758,450 4,017,950
----- ------------ ----- ------------ ----- ------------ ----------
3,774 287,469,361 3,257 591,376,561 7,031 878,845,922 6,538,864
----- ------------ ----- ------------ ----- ------------ ----------
San Francisco Bay Area
1-4 residential 924 52,813,928 1,245 243,934,365 2,169 296,748,293 2,335,895
Other residential 17 4,462,086 114 81,068,060 131 85,530,146 630,605
Commercial real
estate 7 1,925,390 127 76,648,096 134 78,573,486 5,647,074
----- ------------ ----- ------------ ----- ------------ ----------
948 59,201,404 1,486 401,650,521 2,434 460,851,925 8,613,573
----- ------------ ----- ------------ ----- ------------ ----------
Chico Area
1-4 residential 810 59,400,531 1,314 100,171,843 2,124 159,572,374 1,363,178
Other residential 23 2,776,847 103 55,573,336 126 58,350,183 0
Commercial real
estate 7 588,709 100 33,607,185 107 34,195,894 815,180
----- ------------ ----- ------------ ----- ------------ ----------
840 62,766,087 1,517 189,352,364 2,357 252,118,451 2,178,359
----- ------------ ----- ------------ ----- ------------ ----------
Stockton/Modesto Area
1-4 residential 366 36,350,699 341 35,749,792 707 72,100,491 227,497
Other residential 5 2,823,983 48 42,672,748 53 45,496,731 1,357,989
Commercial real
estate 1 124,057 32 18,051,063 33 18,175,120 0
----- ------------ ----- ------------ ----- ------------ ----------
372 39,298,739 421 96,473,603 793 135,772,342 1,585,486
----- ------------ ----- ------------ ----- ------------ ----------
</TABLE>
(Table continues on next page)
-23-
<PAGE> 24
(continued)
<TABLE>
<CAPTION>
Real Estate Loans (excluding Construction Loans) as of December 31, 1993
Number of Balance Number of Balance of Total Total
Fixed-rate of Fixed Adjustable Adjustable Number Outstanding Amount Non-
Loans Rate Loans Rate Loans Rate Loans of Loans Balance Performing
---------- ---------- ---------- ---------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Redding Area
1-4 residential 524 $ 47,833,285 580 $ 52,647,694 1,104 $ 100,480,979 $ 77,422
Other residential 8 2,698,454 38 30,552,659 46 33,251,113 2,186,993
Commercial real
estate 2 54,509 27 8,447,652 29 8,502,161 0
----- ------------ ----- -------------- ------ -------------- -----------
534 50,586,248 645 91,648,005 1,179 142,234,253 2,264,415
----- ------------ ----- -------------- ------ -------------- -----------
Southern California
1-4 residential 77 1,742,800 271 54,654,778 348 56,397,578 2,639,733
Other residential 1 1,130,934 31 24,576,700 32 25,707,634 733,109
Commercial real
estate 3 443,065 14 18,725,352 17 19,168,417 9,784,644
----- ------------ ----- -------------- ------ -------------- -----------
81 3,316,799 316 97,956,830 397 101,273,629 13,157,486
----- ------------ ----- -------------- ------ -------------- -----------
Out of State
1-4 residential 9 551,381 9 2,091,340 18 2,642,721 0
Other residential 1 375,199 1 6,918,858 2 7,294,057 0
Commercial real
estate 4 1,511,949 0 0 4 1,511,949 0
----- ------------ ----- -------------- ------ -------------- -----------
14 2,438,529 10 9,010,198 24 11,448,727 0
----- ------------ ----- -------------- ------ -------------- -----------
Total 6,563 $505,077,167 7,652 $1,477,468,082 14,215 $1,982,545,249 $34,338,184
===== ============ ===== ============== ====== ============== ===========
</TABLE>
-24-
<PAGE> 25
Construction Loans as of December 31, 1993
<TABLE>
<CAPTION>
Number of Balance Number of Balance of Total
Fixed Rate of Fixed Adjustable Adjustable Number
Loans Rate Loans Rate Loans Rate Loans of Loans
---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
Sacramento Area
1-4 residential 13 $ 1,934,252 125 $ 32,505,305 138
Other residential 0 0 3 4,365,520 3
Commercial real
estate 0 0 1 650,000 1
-- ----------- --- ------------ ---
13 1,934,252 129 37,520,825 142
-- ----------- --- ------------ ---
San Francisco Bay Area
1-4 residential 21 7,343,718 99 40,965,084 120
Other residential 0 0 4 3,889,225 4
Commercial real
estate 0 0 0 0
-- ----------- --- ------------ ---
21 7,343,718 103 44,854,309 124
-- ----------- --- ------------ ---
Chico Area
1-4 residential 6 646,883 40 6,807,300 46
Other residential 0 0 2 7,153,550 2
Commercial real
estate 0 0 0 0
-- ----------- --- ------------ ---
6 646,883 42 13,960,850 48
-- --- ------------ ---
Stockton/Modesto Area
1-4 residential 9 2,116,435 45 10,238,347 54
Other residential 0 0 0 0
Commercial real
estate 0 0 0 0
-- ----------- --- ------------ ---
9 2,116,435 45 10,238,347 54
-- ----------- --- ------------ ---
</TABLE>
<TABLE>
<CAPTION>
Total Unfunded
Outstanding Loan Net Loan Amount Non-
Balance Amount Amount Performing
----------- -------- -------- ----------
<S> <C> <C> <C> <C>
Sacramento Area
1-4 residential $ 34,439,557 $11,662,197 $22,777,360 $ 338,412
Other residential 4,365,520 577,969 3,787,551 0
Commercial real
estate 650,000 302,194 347,806 0
------------ ----------- ----------- -----------
39,455,077 12,542,360 26,912,717 338,412
------------ ----------- ----------- -----------
San Francisco Bay Area
1-4 residential 48,308,802 15,202,899 33,105,903 9,390,952
Other residential 3,889,225 659,958 3,229,267 2,953,821
Commercial real
estate 0 0 0 0
------------ ----------- ----------- -----------
52,198,027 15,862,857 36,335,170 12,344,773
------------ ----------- ----------- -----------
Chico Area
1-4 residential 7,454,183 2,588,780 4,865,403 0
Other residential 7,153,550 669,101 6,484,449 5,972,629
Commercial real
estate 0 0 0 0
------------ ----------- ----------- -----------
14,607,733 3,257,881 11,349,851 5,972,629
------------ ----------- ----------- -----------
Stockton/Modesto Area
1-4 residential 12,354,782 3,530,187 8,824,595 282,206
Other residential 0 0 0 0
Commercial real
estate 0 0 0 0
------------ ----------- ----------- -----------
12,354,782 3,530,187 8,824,595 282,206
------------ ----------- ----------- -----------
</TABLE>
(Table continues on next page)
-25-
<PAGE> 26
(continued)
Construction Loans as of December 31, 1993
<TABLE>
<CAPTION>
Number of Balance Number of Balance of Total
Fixed Rate of Fixed Adjustable Adjustable Number
Loans Rate Loans Rate Loans Rate Loans of Loans
---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
Redding Area
1-4 residential 8 $ 1,065,475 32 $ 4,917,795 40
Other residential 0 0 1 285,000 1
Commercial real
estate 0 0 0 0
-- ----------- --- ------------ ---
8 1,065,475 33 5,202,795 41
-- ----------- --- ------------ ---
Southern California
1-4 residential 0 $ 0 0 $ 0 0
Other residential 0 0 0 0 0
Commercial real
estate 0 0 0 0 0
-- ----------- --- ------------ ---
0 0 0 0 0
-- ----------- --- ------------ ---
Out of State
1-4 residential 0 $ 0 0 $ 0 0
Other residential 0 0 0 0 0
Commercial real
estate 0 0 0 0 0
-- ----------- --- ------------ ---
0 0 0 0 0
-- ----------- --- ------------ ---
Total 57 $13,106,763 352 $111,777,126 409
== =========== === ============ ===
</TABLE>
<TABLE>
<CAPTION>
Total Unfunded
Outstanding Loan Net Loan Amount Non-
Balance Amount Amount Performing
----------- -------- -------- -----------
<S> <C> <C> <C> <C>
Redding Area
1-4 residential $ 5,983,270 $ 1,583,545 $ 4,399,725 $ 281,965
Other residential 285,000 60,709 224,291 0
Commercial real
estate 0 0 0 0
------------ ----------- ----------- -----------
6,268,270 1,644,253 4,624,016 281,965
------------ ----------- ----------- -----------
Southern California
1-4 residential $ 0 $ 0 $ 0 $ 0
Other residential 0 0 0 0
Commercial real
estate 0 0 0 0
------------ ----------- ----------- -----------
0 0 0 0
------------ ----------- ----------- -----------
Out of State
1-4 residential $ 0 $ 0 $ 0 $ 0
Other residential 0 0 0 0
Commercial real
estate 0 0 0 0
------------ ----------- ----------- -----------
0 0 0 0
------------ ----------- ----------- -----------
Total $124,883,889 $36,837,539 $88,046,350 $19,219,985
============ =========== =========== ===========
</TABLE>
-26-
<PAGE> 27
Lending Secured by Undeveloped Land. Until June 1992, Sacramento
Savings made loans secured by undeveloped land, frequently to developers who
planned to convert the land to building sites. Customarily such loans were
offered at a floating rate of 3 percent over the Bank of America prime rate,
with an origination fee of 3 percent. Since June 1992, Sacramento Savings has
elected to limit new land loans to credit extensions which facilitate the sale
and/or transfer of existing land loans held by Sacramento Savings, or the sale
of Sacramento Savings real estate investments or foreclosed property. Loans
secured by undeveloped land totalled $82.6 million at December 31, 1993,
representing a decline of approximately 27 percent from the prior year.
Consumer Lending. Nonmortgage loans represent less than 2 percent
of total assets. Such loans include VISA/Mastercard loans, loans on savings
accounts, education loans, mobile home loans, and automobile loans.
Originations, Purchases, Sales and Servicing of Real Estate Loans.
Sacramento Savings acquires loans primarily through originations. In 1993, new
loans totalling $582.1 million were generated, all of which were originated by
the internal lending staff of Sacramento Savings. Approximately 20.1 percent
of 1993 originations were construction loans. In 1992, loan production
totalled $829.5 million, with approximately $46.4 million acquired as a result
of Sacramento Savings' purchase of Butte Savings and Loan in January 1992;
approximately 23.5 percent of the originations were construction loans. In
1991, loan production totalled $555 million, with approximately 0.4 percent
purchases of loans originated by other parties and 99.6 percent originations;
approximately 46 percent of the originations were construction loans.
Sacramento Savings expanded its loan portfolio purchase program in
1985 as a means to increase its portfolio and to offset excess liquidity.
Since 1990, Sacramento Savings suspended its loan portfolio purchase program,
with the exception of purchases of multi-family residential real estate loans
in an aggregate principal amount of less than $5 million from institutions
which were previously identified by Sacramento Savings as possible candidates
for acquisition.
Non-Residential Lending Limits. The Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 ("FIRREA"), enacted on August 9, 1989,
placed limitations on the total amount of non-residential real estate loans
which a savings institution can maintain as portfolio assets. Generally,
non-residential real estate loans are limited to 400 percent of capital. As a
savings association subsidiary of a unitary savings and loan holding company,
Sacramento Savings is also limited by the "qualified thrift lender" ("QTL")
test in the amount of
-27-
<PAGE> 28
non-residential real estate loans it may have outstanding. Effective July 1,
1991, the QTL test required a savings association to invest at least 70 percent
of its tangible assets in qualified thrift investments. This requirement was
reduced to 65 percent pursuant to the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA"), which was enacted on December 19, 1991.
Sacramento Savings is in compliance with all non-residential lending
limitations. Its non-residential lending margin, the difference between the
total amount of non-residential real estate loans maintained by Sacramento
Savings and the lower of the QTL test limitation and the 400 percent of capital
limitation, decreased 2 percent from $278 million at year-end 1992 to $272
million at year-end 1993. The available non-residential lending margin far
exceeds the amount of non-residential real estate loans which Sacramento
Savings desires to maintain.
Loan Delinquencies, Troubled Debt Restructurings and Non-Performing
Assets. The following table shows delinquent mortgage and other loans at
December 31, 1993 in dollar amount and as a percentage of Sacramento Savings'
total loan portfolio:
<TABLE>
<CAPTION>
Loans Delinquent for Total
-------------------------------------- Delinquent
31-60 days 61-90 days over 90 days Loans
---------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
1-4 residential
real estate
Number of loans 38 12 61 111
Amount $3,851,337 $1,666,976 $16,914,887 $22,433,200
Percent 0.18% 0.08% 0.79% 1.04%
Other residential
real estate
Number of loans 3 3 10 16
Amount $1,097,630 $1,793,289 $12,041,848 $14,932,767
Percent 0.05% 0.08% 0.56% 0.70%
Commercial real estate
Number of loans 3 3 13 19
Amount $1,922,096 $6,066,161 $5,440,091 $13,428,348
Percent 0.09% 0.28% 0.25% 0.63%
Consumer loans
Number of loans 97 75 86 258
Amount $143,193 $112,410 $196,982 $452,585
Percent 0.01% 0.01% 0.01% 0.02%
Total
Number of loans 141 93 170 404
Amount $7,014,256 $9,638,835 $34,593,807 $51,246,899
Percent 0.33% 0.45% 1.61% 2.39%
</TABLE>
-28-
<PAGE> 29
Loans that are more than 60 days delinquent and loans with respect to
which the collection of principal and/or interest otherwise becomes doubtful
are placed on non-accrual status. Such non-accruing loans and assets which
have been acquired by Sacramento Savings through foreclosure constitute
Sacramento Savings' non-performing assets. In addition, Sacramento Savings
restructures troubled debt from time to time, by forgiving a portion of
interest or principal on outstanding loans or by making new loans to borrowers
at rates of interest which are materially lower than market rates. The
following table shows the amounts and categories of non-performing assets and
troubled debt restructurings in Sacramento Savings' loan portfolio:
-29-
<PAGE> 30
Non-Performing Assets
and Troubled Debt Restructurings
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Non-accruing loans (not
reflecting specific
offsetting reserves)
1-4 residential $ 9,164,639 $ 9,668,965 $11,544,821
Other residential 4,908,696 5,380,958 7,421,441
Commercial real estate 20,264,848 22,482,445 10,680,216
Construction 19,219,985 12,284,746 8,580,000
Consumer 309,392 227,449 127,529
------------ ----------- -----------
Total 53,867,561 50,044,562 38,354,007
------------ ----------- -----------
Foreclosed assets net of
specific reserves
1-4 residential 5,515,822 3,255,004 2,135,508
Other residential 17,486,224 15,514,149 20,558,028
Commercial real estate 23,190,057 17,600,777 14,740,859
Construction 0 5,466,549 1,567,679
Consumer 34,139 110,592 51,415
------------ ----------- -----------
Total 46,226,242 41,947,071 39,053,489
------------ ----------- -----------
Total non-performing assets $100,093,803 $91,991,633 $77,407,496
============ =========== ===========
Total as a percentage of
average total assets 3.47% 3.29% 2.94%
============ =========== ===========
Troubled Debt
Restructurings
1-4 residential $ 409,091 $ 0 $ 129,929
Other residential 7,738,848 7,530,529 0
Commercial real estate 4,584,173 1,652,081 1,668,496
------------ ----------- -----------
Total $ 12,732,112 $ 9,182,610 $ 1,798,425
============ =========== ===========
</TABLE>
Approximately $1.6 million of interest income on non-performing loans
was included in net income for the year ended December 31, 1993. An additional
$3.5 million of interest income would have been recorded on the non-accruing
and past due loans in the foregoing table if such loans had been current.
-30-
<PAGE> 31
Allowance for Estimated Loan Losses. The following table shows an
analysis of Sacramento Savings' allowance for estimated loan losses for the
past three years:
Allowance for Estimated Loan Losses
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of the year $22,798,333 $18,323,120 $18,458,000
Charge-offs (5,403,192) (4,850,883) (2,122,642)
Recoveries 102,210 44,372 --
----------- ----------- -----------
Net charge-offs (5,300,982) (4,806,511) (2,122,642)
Allowance acquired in a
business combination -- 200,000 --
Provision for losses 4,944,962 9,081,724 1,987,762
----------- ----------- -----------
Balance at end of the year $22,442,313 $22,798,333 $18,323,120
=========== =========== ===========
Ratio of net charge-offs to
average loans outstanding 0.25% 0.22% 0.10%
=========== =========== ===========
</TABLE>
Sacramento Savings periodically reviews its allowance for loan losses
considering numerous factors, including, but not necessarily limited to,
general economic conditions, loan portfolio composition, classified asset
levels, prior loss experience, and independent appraisals. Specific loss
allowances are established when Sacramento Savings determines that the value of
the collateral is less than the amount of the unpaid principal of the related
loan plus estimated costs of the acquisition and sale. The allowance for loan
losses is maintained at an amount considered adequate to provide for potential
losses.
Allowance for Losses on Real Estate Owned. The following table shows
an analysis of Sacramento Savings' allowance for losses on real estate owned
(property obtained through foreclosure, deeds obtained in lieu of foreclosure
and loans designated by Sacramento Savings as "in substance" foreclosed) for
the past three years:
-31-
<PAGE> 32
Allowance for Losses on Real Estate Owned
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of the year $3,436,000 $8,465,000 $3,074,000
Provisions charged to real
estate operations 5,364,000 5,761,000 6,092,000
Charge-offs and recoveries, net (3,014,000) (10,790,000) (701,000)
---------- ----------- ----------
Balance at end of the year $5,786,000 $3,436,000 $8,465,000
========== =========== ==========
</TABLE>
Investment Activities
Investment Portfolio. Sacramento Savings' investment portfolio
totalled $634.9 million, or approximately 21 percent of total assets, as of
December 31, 1993. The size of the investment portfolio reflects liquidity
needs, asset/liability management strategies and the extent to which deposit
flows exceed Sacramento Savings' capacity to acquire loans with yield and
credit characteristics that meet its portfolio requirements. The resulting
excess liquidity is invested primarily in money market instruments, short-term
U.S. Treasury and Agency securities and U.S. Agency-guaranteed short-term
mortgage-backed derivative securities or adjustable rate U.S. Agency
mortgage-backed securities. To facilitate asset/liability management, and
because of the volatile nature of interest rates and new regulations affecting
the leveraging of capital, Sacramento Savings has deemed it prudent to purchase
only low risk-weighted short-term securities because the maturities on these
investments are short and the yields tend to respond quickly to the level of
interest rates in the money markets. The weighted average maturity of the
current portfolio is 63 months, and its weighted average yield to maturity is
4.73 percent. However, contractual maturities of the U.S. Agency-guaranteed
short-term mortgage-backed derivative securities and adjustable rate U.S.
Agency mortgage-backed securities overstate the likely portfolio duration.
Moreover, Sacramento Savings estimates that 50 percent of the portfolio
reprices in one year and the weighted average portfolio repricing frequency
equals 26.2 months.
The following table shows the carrying and market values of
investment securities for the past three years (in thousands):
-32-
<PAGE> 33
<TABLE>
<CAPTION>
December 31,
--------------------------------------------------------------------------------------
1993 1992 1991
---- ---- ----
Carrying Carrying Carrying
Value Market Value Market Value Market
--------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Overnight Fed
Funds $ 0 $ 0 $ 0 $ 0 $ 8,000 $ 8,000
U.S. Government
and U.S.
Government Agency
Securities1 559,808 560,403 387,617 390,042 344,928 352,377
Certificates
of Deposit 0 0 0 0 17,981 18,000
Securities
Purchased Under
Agreements to
Resell 75,091 75,091 34,950 34,950 10,000 10,000
Bonds, Notes
and Other 0 0 0 0 2,996 2,999
-------- -------- -------- -------- -------- --------
Total $634,899 $635,494 $422,567 $424,992 $383,905 $391,376
======== ======== ======== ======== ======== ========
</TABLE>
1 Includes mortgage-backed securities issued by U.S. Government Agencies.
-33-
<PAGE> 34
The following table shows the contractual maturities and weighted
average yields of investment securities at December 31, 1993 (in thousands)1:
<TABLE>
<CAPTION>
More Than
One Year Through More Than
One Year or Less Five Years Five Years
--------------------- ------------------ ------------------
Weighted Weighted Weighted
Average Average Average
Amount Yield Amount Yield Amount Yield
------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Overnight Fed Funds -- -- -- -- -- --
U.S. Government and
U.S. Government
Agency Securities2 $ 96,296 5.0133% $221,281 4.7664% $242,231 5.0128%
Certificates
of Deposit -- -- -- -- -- --
Securities
Purchased Under
Agreements to
Resell 75,091 3.3629
Bonds, Notes
and Other -- -- -- -- -- --
-------- ------- -------- ------- -------- -------
Total $171,387 4.2875% $221,281 4.7664% $242,231 5.0128%
======== ======= ======== ======= ======== =======
</TABLE>
1 This table does not reflect the impact of principal paydowns of any
mortgage-backed security.
2 Includes mortgage-backed securities issued by U.S. Government Agencies.
Real Estate Investment. Sacramento Savings began investing in real
estate in the late 1960s as a diversification strategy. Since then, Sacramento
Savings has concentrated its investments within the Sacramento Metropolitan
Statistical Area, where economics, engineering, marketing, and political
concerns are best understood by it; in fact, all of Sacramento Savings' real
estate investments are located within a 25-mile radius of Sacramento. As of
December 31, 1993, Sacramento Savings held real estate investments with an
aggregate net book value of $37.6 million, representing 18.8 percent of its
total capital (based on generally accepted accounting principles).
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<PAGE> 35
Sacramento Savings is distinguished from many savings institutions
that have pursued real estate activities by the strict policy constraints that
have guided its activities. It has consistently limited the scope of its real
estate activities so that such investments have never exceeded 5 percent of
assets, and are currently 1.24 percent of assets. In most cases, Sacramento
Savings acquired undeveloped land and developed it through the construction of
infrastructure and the creation of a final parcel map. The property was then
sold, predominantly to builders or users. Many of Sacramento Savings'
investments are held in joint ventures with established local developers. As
of December 31, 1993, $34.5 million, or 90 percent, of Sacramento Savings' real
estate portfolio was held in joint venture arrangements (although Sacramento
Savings is seeking to terminate a joint venture arrangement holding
approximately $25.6 million of Sacramento Savings' real estate portfolio to
comply with FDIC divestiture requirements as described below).
FIRREA, however, imposes significant restrictions on investing
activities of federal- and state-chartered savings associations. FIRREA
generally prohibits state-chartered savings associations from directly
acquiring or retaining any equity investment of a type or in an amount that is
not permissible for a federal savings association. Such impermissible
investments include equity investments in real estate, investments in equity
securities and any other equity investment. Pursuant to a transition rule
promulgated under FIRREA, the FDIC must require divestiture of these
impermissible investments as quickly as can be prudently done, and in any event
not later than July 1, 1994.
In response to the required divestiture of equity investments, the
Office of Thrift Supervision (the "OTS") promulgated capital regulations for
savings associations requiring the phase-out of all impermissible equity
investments from capital calculations by July 1, 1994. (Although the Housing
and Community Development Act of 1992 ("HCDA") permitted an extension of the
capital phase-out to July 1, 1996 for certain real estate investments held in
subsidiaries or in-substance subsidiaries such as joint venture arrangements,
the benefits to Sacramento Savings that would have resulted therefrom are
offset by reductions in regulatory capital required by the FDIC, as described
below).
Sacramento Savings submitted a divestiture plan to the FDIC providing
for complete divestiture of its real estate investments and related business by
year-end 1993. In approving Sacramento Savings' plan, the FDIC stipulated that
Sacramento Savings write off certain real estate investment ("REI") assets,
regardless of the fair value of the assets to be divested, if the assets were
not sold by the sale date set forth in Sacramento Savings divestiture plan.
Sacramento Savings added $13.5 million to reserves in respect of REI assets in
1991. In response to the relaxation of FIRREA restrictions effected by HCDA,
Sacramento
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<PAGE> 36
Savings entered into negotiations with the FDIC in late 1992 for relief from
the write-off requirements in its divestiture plan, and no comparable addition
to reserves was made in that year. In early 1993, Sacramento Savings reached
an understanding with the FDIC (in which the OTS acquiesced) pursuant to which
the write-off requirements were rescinded. In lieu of the write-off
requirements, Sacramento Savings makes a quarterly adjustment to its regulatory
capital in an amount equal to such write-off requirements. In 1993, Sacramento
Savings booked direct charges to its regulatory capital of $23.1 million in
accordance with this understanding. It is expected that, if none of its REI
assets are divested, Sacramento Savings will make additional charges of $15
million to its regulatory capital in the first half of 1994. By July 1, 1994,
Sacramento Savings will have fully written off its REI assets for regulatory
purposes.
Notwithstanding such relief, until all of its REI assets are removed
from the balance sheet, Sacramento Savings is following conservative accounting
practices with respect to such assets. These practices include the expensing
of all carrying costs and the deferral of income recognition until the entire
portfolio is liquidated.
Sources of Funds
During the years 1983 to 1988, Sacramento Savings' assets doubled
from $1.1 billion to more than $2.3 billion. As of December 31, 1993,
Sacramento Savings' assets totalled $3.0 billion. The slowed rate of increase
was due in part to recessionary pressures and Sacramento Savings' decision to
limit asset growth to maintain a well-capitalized regulatory status.
Sacramento Savings has pursued predominately traditional strategies with
respect to both its funding sources and its investment mix. Its funding comes
predominantly from retail deposits, and its investments are concentrated in
real estate loans.
Deposits. Deposits totalled about $2.8 billion and funded
approximately 91 percent of Sacramento Savings' total assets as of December 31,
1993. Approximately 26 percent of total deposits were represented by passbook
and transaction accounts, and 16 percent were in deferred compensation plan
accounts. Another 4 percent of all deposits were time deposits of public
entities, which have provided a readily available source of funds without
disrupting Sacramento Savings' regular pricing structure. The remainder of
total deposits was represented by retail certificates of deposit. Sacramento
Savings has never accepted brokered deposits.
Among all banking institutions in the 14-county region constituting
Sacramento Savings' primary deposit market, Sacramento Savings has over 10
percent of all deposits, ranking
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<PAGE> 37
third in deposits both in the 14 counties overall and in Sacramento County
itself. Sacramento Savings ranks first in deposits among all savings
institutions in Sacramento County, with a market share of more than 40 percent.
Its market share of deposits held by all financial institutions in Sacramento
County, including banks and thrifts, is about 12 percent.
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<PAGE> 38
The following table shows the dollar amount of deposits, by interest
rate range, in the various types of deposit programs offered by Sacramento
Savings (in thousands):
<TABLE>
<CAPTION>
December 31,
--------------------------------------------------------------------------------
1993 1992
------------------------------------ -------------------------------------
Interest % Interest %
Rates Balance of Total Rates Balance of Total
-------- ------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Demand accounts 1.00-1.15 $ 223,394 8.10% 1.50-1.90 $ 229,138 8.85%
Passbook accounts 2.05-2.20 242,317 8.78 2.55-2.75 214,887 8.30
Insured money
market accounts 1.00-2.35 212,091 7.69 1.50-2.90 231,566 8.95
Non-interest
bearing accounts None 28,049 1.02 None 7,693 0.30
Certificates of deposit:
1 Month Savers Choice 2.30-2.55 15,412 0.56 2.65-3.05 26,937 1.04
3 Month Savers Choice 2.50-3.15 40,333 1.46 2.90-4.05 75,507 2.91
4 Month Savers Choice 2.55-3.00 5,971 0.22 3.00-3.60 15,183 0.59
6 Month Savers Choice 2.80-4.45 323,974 11.74 3.25-4.80 354,369 13.68
1 Year Savers Choice 3.11-6.50 439,766 15.94 3.75-8.35 331,211 12.79
30 Month Savers Choice 3.85-12.00 108,387 3.93 4.30-11.25 99,010 3.82
60 Month Savers Choice 4.85-12.00 121,022 4.39 4.90-12.00 85,891 3.32
Market Advantage 2.90-3.00 31,672 1.15 -- -- --
Portfolio Plans 3.25-7.50 115,889 4.20 3.40-7.50 116,528 4.50
IRA 2.05-12.60 217,493 7.88 2.55-11.97 218,906 8.45
Jumbo 2.20-9.35 66,806 2.42 2.75-9.35 108,816 4.20
Loan to Lender -- -- -- 8.625-9.00 9,255 0.36
Public Funds 2.40-10.25 118,347 4.29 2.60-10.25 151,611 5.85
Deferred
Compensation 3.05-10.00 447,685 16.23 3.04-10.00 314,074 12.12
---------- ------- ---------- ------
2,052,757 74.41 1,907,268 73.62
---------- ------- ---------- ------
2,758,608 100.00% 2,590,552 100.00%
Less: Intercompany (8,035) ======= (8,905) ======
---------- ----------
$2,750,573 $2,581,647
========== ==========
</TABLE>
<TABLE>
<CAPTION>
December 31,
-------------------------------------
1991
-------------------------------------
Interest %
Rates Balance of Total
------- ------- --------
<S> <C> <C> <C>
Demand accounts 3.25-3.75 $ 200,128 8.15%
Passbook accounts 4.00-4.30 166,704 6.79
Insured money
market accounts 3.25-4.55 177,225 7.23
Non-interest
bearing accounts None 6,494 0.26
Certificates of deposit:
1 Month Savers Choice 4.00-5.05 33,682 1.37
3 Month Savers Choice 4.35-5.90 88,518 3.61
4 Month Savers Choice 4.55-6.65 36,381 1.48
6 Month Savers Choice 4.60-8.25 399,591 16.28
1 Year Savers Choice 4.70-9.30 387,743 15.79
30 Month Savers Choice 5.50-11.25 91,854 3.74
60 Month Savers Choice 5.45-12.00 62,629 2.55
Market Advantage --
Portfolio Plans 4.80-7.50 70,508 2.87
IRA 4.70-8.40 134,335 5.47
Jumbo 4.00-9.50 136,607 5.56
Loan to Lender 8.38-9.00 12,770 0.52
Public Funds 4.05-10.25 191,637 7.81
Deferred
Compensation 5.40-10.00 258,176 10.52
---------- ------
1,904,431 77.57
---------- ------
2,454,982 100.00%
Less: Intercompany (13,200) ======
----------
$2,441,782
==========
</TABLE>
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<PAGE> 39
The following table shows the savings flows of Sacramento Savings (in
thousands):
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Balance at beginning of year $2,590,552 $2,454,982 $2,302,146
Deposits 3,858,495 3,794,469 3,529,469
Withdrawals (3,788,510) (3,771,594) (3,521,425)
Interest credited 98,071 113,255 145,336
---------- ---------- ----------
Net increase 168,056 136,130 153,380
Accretion of premium 0 (560) (544)
---------- ---------- ----------
$2,758,608 $2,590,552 $2,454,982
---------- ---------- ----------
Less: Intercompany (8,035) (8,905) (13,200)
---------- ---------- ----------
Balance at end of year $2,750,573 $2,581,647 $2,441,782
========== ========== ==========
Percent increase 6.54% 5.73% 6.49%
========== ========== ==========
</TABLE>
The following table shows maturity information for Sacramento
Savings' certificates of deposit as of December 31, 1993 (in thousands):
<TABLE>
<CAPTION>
Maturity Schedule
December 31, 1993
Over 3 Over 6
3 Months to 6 to 12 Over
or Less Months Months 12 Months Total
-------- ------ ------- --------- -----
<S> <C> <C> <C> <C> <C>
Certificates of
Deposit (less than
$100,000) $384,815 $335,444 $379,866 $425,845 $1,525,970
Certificates of
Deposit ($100,000
or more) 75,238 198,872 126,386 7,944 408,440
Public Funds* 38,936 43,623 29,439 6,349 118,347
-------- -------- -------- -------- ----------
498,989 577,939 535,691 440,138 2,052,757
Less: Intercompany (2,253) (5,483) -- -- (7,736)
-------- -------- -------- -------- -----------
Total Certificates
of Deposit $496,736 $572,456 $535,691 $440,138 $2,045,021
======== ======== ======== ======== ===========
</TABLE>
* Certificates of deposit from governmental and other public entities.
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<PAGE> 40
Deferred Compensation Deposits. State and local governmental
employees may contribute up to 25 percent of their annual compensation (not
exceeding $7,500) to approved deferred compensation plans, and these deferred
compensation deposits are another funding source for Sacramento Savings. Such
deposits are long-term in nature, and have fixed interest rates. At present,
over 60 plans covering 64,000 participants are being administered by Sacramento
Savings, with total deposits of over $447 million. However, $190 million of
such amount earns a fixed rate of interest of 10 percent until 1994 year-end,
substantially higher than current market rates.
Return on Equity and Assets. In 1993, Sacramento Savings' return on
average total assets was 0.57 percent and its return on equity was 8.52
percent. Its dividend payout ratio (dividends declared per share divided by
net income per share) was 58.09 percent, and its equity to assets ratio
(average equity divided by average total assets) was 6.71 percent.
Borrowings. As a member of the FHLBank of San Francisco, Sacramento
Savings is required to own capital stock in the FHLBank of San Francisco and is
authorized to apply for advances from the FHLBank of San Francisco. The
FHLBank of San Francisco may prescribe the permissible uses for such advances,
as well as limitations on the interest rates and repayment provisions. FIRREA
requires that all long-term FHLBank advances be for the purpose of financing
residential housing, and that members meet established community lending
standards in order to have continued access to long-term FHLBank advances.
Sacramento Savings meets these standards and does not expect that these
requirements will have a significant impact on its access to long-term
advances. Sacramento Savings did not apply for any long-term FHLBank advances
in 1993.
Subsidiary and Affiliates
Sacramento Savings has one subsidiary, a service corporation. SSB
Financial Services, a California corporation, was organized in April 1987 to
market to Sacramento Savings' customers tax-deferred annuity plans provided
principally by various insurance companies and mutual funds.
Two ancillary companies of Sacramento Savings which were also
acquired by Alleghany are Superior California Insurance Agency ("Superior") and
Central Valley Securities Company ("Central Valley"). Superior, a California
corporation, handles "forced placed" casualty insurance for Sacramento Savings'
mortgage loans, which provides casualty coverage on the
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<PAGE> 41
security of those loans with respect to which the borrower has failed to do so.
Central Valley, also a California corporation, acts as the assigned trustee for
Sacramento Savings' deeds of trust.
Competition
Sacramento Savings' primary competitors for deposit funds are the
major thrifts, commercial banks, brokerage and insurance firms in the region.
Regulation
Sacramento Savings is a California-licensed savings association,
deposits of which are federally insured by the Savings Association Insurance
Fund of the FDIC. Accordingly, Sacramento Savings is subject to broad state and
federal regulation and oversight extending to all of its operations.
As a California-licensed savings association, Sacramento Savings
derives its authority from, and is governed by, the provisions of the
California Savings Association Law and regulations of the Savings and Loan
Commissioner of the State of California.
Sacramento Savings is also subject to regulation by the OTS, pursuant
to FIRREA. The OTS has extensive authority over the operations of savings
institutions such as Sacramento Savings. Sacramento Savings is required to
file periodic reports with the OTS and is subject to periodic examinations by
the OTS. Furthermore, pursuant to FIRREA, the OTS was required to issue new
capital standards for all savings associations, which included a tangible
capital requirement (minimum ratio of tangible capital to adjusted total
assets), a leverage, or core capital, ratio requirement (minimum ratio of core
capital to adjusted total assets) and a risk-based capital requirement (minimum
ratio of capital to total assets adjusted for the risk associated with
individual assets). The various definitions of capital and adjusted total and
risk-weighted assets are set forth in FIRREA and in rules and regulations of
the OTS and the Comptroller of the Currency. FIRREA mandated that these new
capital requirements be generally as stringent as comparable capital
requirements established by the Comptroller of the Currency for national banks.
Also pursuant to the new capital requirements and as further described above
under the heading "Real Estate Investment," equity investments must be phased
out from capital calculations over a five-year period. The new
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<PAGE> 42
capital requirements became effective December 7, 1989, but were further
modified by FDICIA.
FDICIA established five new capital categories and, as implemented by
federal banking regulatory agencies, established new "relevant capital
measures" for those new capital categories. The new capital categories are:
(i) "well capitalized," describing an institution which significantly exceeds
the required minimum level for each relevant capital measure; (ii) "adequately
capitalized," describing an institution which meets the required minimum level
for each relevant capital measure; (iii) "undercapitalized," describing an
institution which fails to meet the required minimum level for each relevant
capital measure; (iv) "significantly undercapitalized," describing an
institution which is significantly below the required minimum level for any
relevant capital measure; and (v) "critically undercapitalized," describing an
institution which fails to meet a ratio of "tangible equity" to total assets
established by the appropriate federal banking agency, which ratio may not be
less than 2 percent or greater than 65 percent of the required minimum level of
capital under the leverage limit specified by the appropriate federal banking
agency.
The OTS will determine the capital category of each savings
institution it regulates. The assignment of a capital category will have
various consequences to the institution. For example, in addition to other
requirements, an "under-capitalized" institution must file a capital
restoration plan with the OTS. A "significantly undercapitalized" institution
is subject to restrictions on transactions with affiliates, limitations on the
interest rates paid on deposits, asset growth limitations and restrictions on
the payment of any bonus to a senior executive officer of the institution
without prior regulatory approval. Federal regulators may also order a
"significantly undercapitalized" institution to hold a new election of
directors, to terminate any director or senior executive officer employed more
than 180 days prior to the time the institution became "significantly
undercapitalized" or to hire qualified senior executive officers approved by
the regulators.
Under certain circumstances, the OTS may reclassify a "well
capitalized" institution as "adequately capitalized," may require an
"adequately capitalized" institution to comply with one or more requirements as
if it were "undercapitalized," and may take action with respect to an
"undercapitalized" institution as if it were "significantly undercapitalized."
No
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<PAGE> 43
institution may make any capital distribution or pay management fees if, as a
result of such payments, such institution would become "undercapitalized."
As directed by FDICIA, the OTS promulgated regulations defining the
relevant capital measures for the new capital categories. Such measures
consist of a "risk-based capital ratio" defined as the ratio of total capital
to risk-weighted assets, a "Tier 1 risk-based capital ratio" defined as the
ratio of Tier 1 capital, or core capital, to risk-weighted assets, and a
"tangible capital ratio" defined as the ratio of total capital to adjusted
total assets.
At December 31, 1993, Sacramento Savings Bank met the requirements
for inclusion in the highest, or "well capitalized" category, which is reserved
for institutions that significantly exceed the required minimum level with
respect to each of three specified capital measures. Sacramento Savings'
capital ratios at December 31, 1993, compared with such capital measures for an
"adequately capitalized" institution and a "well capitalized" institution, were
as follows:
<TABLE>
<CAPTION>
Federal Requirement Federal Requirement
for "Adequately for "Well Capitalized" Sacramento
Capitalized" Institution Institution Savings
------------------------ ---------------------- ----------
<S> <C> <C> <C>
Risk-Based
Capital Ratio 8.0% 10.0% 10.7%
Tier 1 Risk-Based
Capital Ratio 4.0% 6.0% 9.6%
Tangible Capital
Ratio 2.0% 5.0% 5.3%
</TABLE>
Sacramento Savings' short-term liquidity ratio (the ratio of
short-term liquid assets to withdrawable accounts) was 7.31 percent on December
31, 1993, far exceeding the federal requirement of 1 percent.
As a savings and loan holding company, Alleghany is also subject to
regulations of the California Savings and Loan
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<PAGE> 44
Commissioner and the OTS. Pursuant to the California Savings Association Law
and the Regulations For Savings and Loan Holding Companies promulgated by the
OTS, Alleghany may be required to file periodic reports with, and is subject to
examination by, the California Savings and Loan Commissioner and the OTS.
As a condition to the approval of the acquisition of Sacramento
Savings, in 1989 Alleghany entered into a voting and disposition
rights/dividend agreement with the OTS. Pursuant to such agreement, if the
core capital of Sacramento Savings were to fall below 1.5 percent of total
assets, the OTS would be entitled to control and/or cause the disposition of
Sacramento Savings. Alleghany's agreement with the OTS also sets forth limits
relating to the amount of dividends that may be paid by Sacramento Savings.
Such dividend limits have been superseded by stricter limits imposed by
subsequent OTS regulations and FDICIA. Sacramento Savings believes that it is
in compliance with such dividend regulations. At December 31, 1993,
substantially all of Sacramento Savings' stockholder's equity was restricted as
to dividend payment pursuant to OTS regulations and FDICIA.
In addition, the board of Sacramento Savings has adopted a Capital
Adequacy Policy Statement relating to the payment of dividends. Pursuant to
such Statement, Sacramento Savings will be permitted to pay a quarterly
dividend of 1.25 percent of its capital as measured by generally accepted
accounting principles if its capital position after payment of such dividend
exceeds the requirements for a "well capitalized" institution.
Alleghany, as a unitary savings and loan holding company, and its
subsidiaries other than Sacramento Savings, are generally not subject to
restrictions on their business activities due to their affiliation with
Sacramento Savings, so long as Sacramento Savings continues to be a "qualified
thrift lender". Sacramento Savings anticipates that it will continue to exceed
the QTL requirement and intends to take such action as may be appropriate to
maintain compliance.
Employees
At December 31, 1993, Sacramento Savings, its ancillary companies and
subsidiary had approximately 903 employees. Because of the extensive use of
part-time service professionals, primarily in its retail operations, these were
equivalent to 820 full-time employees.
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<PAGE> 45
PROPERTY AND CASUALTY REINSURANCE BUSINESS
Underwriters, headquartered in Woodland Hills, California, provides
reinsurance to property and casualty insurers and reinsurers. Underwriters
initially was organized in 1867 as a primary insurer in New York under the name
"Buffalo German Insurance Company." By 1970, Underwriters had become
principally a reinsurer, and in 1977 it changed its corporate domicile to New
Hampshire.
Although it writes many lines of business, Underwriters concentrates
on coverages requiring specialized underwriting expertise, including certain
excess and surplus lines programs, umbrella liability, and directors' and
officers' liability. Underwriters is licensed or authorized to engage in
business in 41 states, the District of Columbia and Canada, and has branch
offices in Atlanta, Chicago, Houston, Woodland Hills and New York.
Underwriters experienced substantial losses in the mid-1980's as a
result of a strategy of increasing writings of treaty casualty business with
pricing and terms which later proved to be inadequate. In early 1987, members
of current management joined Underwriters and shortly thereafter began a
program to restructure its reinsurance portfolio and operations. Among other
steps, the restructuring undertaken by new management included (i)
strengthening Underwriters' reserves for pre-1987 business and the purchase
from The Continental Corporation of two reinsurance contracts providing
coverage for pre-1987 business up to an aggregate limit of $200 million, (ii)
tightening Underwriters' underwriting standards by initiating a program of
pre-underwriting audits of prospective treaty business, (iii) expanding claims
audits to improve monitoring of reported and unreported claims, (iv) employing
actuaries to oversee Underwriters' underwriting activities and reserve
practices and (v) adopting Underwriters' current business strategy. The
restructuring contributed to an increase in the statutory surplus of
Underwriters from $130.0 million at 1987 year-end to $185.0 million at
September 30, 1993, after payment of more than $139.5 million in dividends over
such period to its parent company.
Underwriters was acquired by Alleghany in October 1993, and
thereafter Alleghany, through a new holding company which owns Underwriters,
contributed approximately $51 million to the capital of Underwriters, which
increased Underwriters' statutory surplus to $247.7 million as of 1993
year-end. Underwriters'
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<PAGE> 46
management currently owns about 5.4 percent of the capital stock of the new
holding company which owns Underwriters.
A.M. Best Company, Inc., an independent insurance industry rating
organization ("Best's"), recently upgraded its rating of Underwriters to "A
(Excellent)," from "A- (Excellent)." Best's publications indicate that the new
rating is assigned to companies which Best's believes have achieved excellent
overall performance and have a strong ability to meet their obligations over a
long period of time. According to Best's, the new rating reflects
Underwriters' strong capital base, reduced debt service obligations and
operating performance.
Alleghany's acquisition of Underwriters was accounted for as a
purchase and, therefore, the accounts of Underwriters and its results of
operations included in Alleghany's financial statements reflect purchase
accounting adjustments and are not comparable to Underwriters' prior reported
results. Furthermore, most of the information given about Underwriters herein
relates to pre-acquisition periods.
To capitalize on advantageous market conditions and on Underwriters'
expertise in specialized coverages, Underwriters established Commercial
Underwriters Insurance Company ("CUIC") at year-end 1992. CUIC, a California
corporation, is a property and casualty insurance company that focuses on
specialized insurance lines. In 1993, CUIC generated $19.4 million in gross
written premiums. Underwriters or CUIC retained $8.8 million of such amount,
constituting 5 percent of Underwriters' consolidated net written premiums in
1993.
General Description of Reinsurance
Reinsurance is an agreement between two insurance companies in which
one company, the "reinsurer," agrees to indemnify the other company, the
"reinsured" or "ceding company," for all or part of the insurance risks
underwritten by the reinsured. Reinsurance provides reinsureds with three
major benefits: it reduces net liability on individual risks, protects against
catastrophic losses and helps to maintain acceptable surplus and reserve
ratios.
In general, property insurance protects the insured against financial
loss arising out of loss of property or its use, caused by an insured peril.
Casualty insurance protects the insured against financial loss arising out of
its obligation to others for loss or damage to persons or property. Property
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<PAGE> 47
and casualty reinsurance such as that provided by Underwriters protects the
ceding company against loss to the extent of the reinsurance coverage provided.
While both property and casualty reinsurance involve a high degree of
volatility, property losses are generally reported within a relatively short
time period after the event, while there tends to be a greater lag in the
reporting and payment of casualty claims. Consequently, the ultimate losses
associated with property risks are generally known in a shorter time than
losses associated with casualty risks.
The financial condition of property and casualty insurers and
reinsurers can be adversely affected by volatile and unpredictable natural
disasters, such as hurricanes, windstorms, earthquakes, floods, fires and
periods of severely cold weather. Between 1989 and 1993, the worldwide
reinsurance industry experienced unusual catastrophic losses, in terms of both
frequency and severity, from a variety of natural disasters, including
Hurricanes Hugo, Andrew and Iniki. This extended period of unusual
catastrophic losses has caused many reinsurers to reduce significantly the
amount of property catastrophe reinsurance they are prepared to write. The
significant reduction in capacity has led to increased rates for such
catastrophe coverage. Underwriters has increased its writings and retentions
of this business because it believes that substantial increases in premium
rates for property catastrophe coverage, combined, in certain instances, with
higher deductibles retained by reinsureds, have significantly improved the
risk/reward relationship on such coverage.
Underwriters provides reinsurance on both a treaty and facultative
basis. Treaty reinsurance is reinsurance based on a standing arrangement (a
"treaty"), usually for a year or longer, between a reinsured and reinsurer for
the cession and assumption of risks defined in the treaty. Under most
treaties, the reinsured is obligated to offer and the reinsurer is obligated to
accept a specified portion of all such risks originally underwritten by the
reinsured. Facultative reinsurance is the reinsurance of individual risks.
Rather than agreeing to reinsure all or a portion of a class of risk, the
reinsurer separately rates and underwrites each individual risk and is free to
accept or reject each risk offered by the reinsured. Facultative reinsurance
is normally purchased by insurance companies for risks not covered or covered
only in part by their reinsurance treaties. The demand for facultative
reinsurance is normally inversely related to the supply of treaty reinsurance.
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<PAGE> 48
Underwriters writes both of the two major forms of reinsurance, pro
rata reinsurance and excess of loss reinsurance. The pro rata form is an
agreement in which the reinsured and reinsurer share the premiums as well as
the losses and expenses of a single risk, or an entire group of risks, based
upon an established percentage. Under excess of loss reinsurance, the
reinsurer agrees to reimburse the primary insurance company for all losses in
excess of a predetermined amount (commonly referred to as the insurer's
"retention"), generally up to a predetermined limit. Excess of loss
reinsurance is often written in layers or levels, with one reinsurer taking the
risk from the primary insurer's retention level up to an established level,
above which another reinsurer assumes, or the primary insurer retains, the
risk. Excess of loss reinsurance allows the reinsurer to control better the
relationship of the premium charged to the exposures assumed. The reinsurer
assuming the risk immediately above the primary insurer's retention level is
said to write "working layer" or "low layer" excess of loss reinsurance. A
loss that reaches just beyond the primary insurer's retention level would
create a loss for the lower level reinsurers but not for the reinsurers on
higher levels.
Underwriting Operations
Underwriters maintains a disciplined underwriting strategy with a
focus on generating profitable business rather than on increasing market share.
In response to the increased competition and lower premium rates which have
characterized the industry in recent years, Underwriters has maintained a
defensive underwriting posture by no longer writing those lines of business
that it considers to be inadequate in terms of pricing or contract terms.
Underwriters' underwriting discipline is enhanced by its focus on excess of
loss casualty reinsurance with low level attachment points (i.e., dollar-levels
at which risk is assumed). Such layers are characterized by greater loss
frequency, lower loss severity and quicker loss settlement than layers with
higher attachment points. Underwriters believes that these factors result in
greater predictability of losses, which improves Underwriters' ability to
analyze its exposure and price them appropriately.
Another important element of Underwriters' underwriting strategy is
to seek to respond quickly to market opportunities (such as increased demand or
more favorable pricing) by adjusting the mix of business it writes. Recently,
Underwriters has taken advantage of such market opportunities by increasing its
writings of marine and aviation, property catastrophe, clash
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<PAGE> 49
coverages (in which the primary insurer has insured more than one party in a
single incident) and certain excess and surplus lines programs. Underwriters'
business is not seasonal.
Within the lines of business that Underwriters writes, including
general liability, automobile liability, workers' compensation and commercial
multiperil, Underwriters focuses on coverages requiring specialized
underwriting expertise. These specialized coverages, which require a
relatively high degree of underwriting and actuarial analysis, include certain
excess and surplus lines programs, umbrella liability, and directors' and
officers' liability. Underwriters believes that these risks offer greater
potential for favorable results than more general risks.
As part of its strategy, Underwriters seeks to serve as lead or
co-lead underwriter on its treaties. As lead or co-lead underwriter,
Underwriters believes that it is able to influence more effectively the pricing
and terms of the treaties and achieve better underwriting results. During
1993, Underwriters was a lead or co-lead reinsurer on a majority of its treaty
business.
Treaty operations generated approximately $132.2 million or 72
percent of Underwriters' consolidated net written premiums in 1993. Casualty
lines treaties represented approximately 64 percent of total treaty net written
premiums with the remainder represented by property lines treaties.
Approximately 64 percent of total treaty net written premiums represented
treaty reinsurance written on an excess of loss basis and the balance
represented treaty reinsurance written on a pro rata basis. In 1993, treaty
net written premiums increased 23 percent from 1992 due to the increased
writing of marine and aviation, property catastrophe, clash coverage and
certain excess and surplus lines.
Since July 1, 1987, Underwriters' treaty department has generally
written up to $1.0 million per risk on a net basis and in certain circumstances
has accepted more. The largest net risk assumed in 1993 was $2.5 million.
Facultative operations generated approximately $41.5 million or 23
percent of Underwriters' consolidated net written premiums in 1993. Casualty
risks represented 94 percent of total facultative net written premiums with
property risks comprising the remainder. Approximately 80 percent of total
facultative net written premiums represented facultative reinsurance written on
an excess of loss basis and the balance
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<PAGE> 50
represented facultative reinsurance written on a pro rata basis. Facultative
net written premiums increased slightly in 1993 from $40.9 million in 1992.
Since November 30, 1987, Underwriters has offered gross casualty
facultative underwriting capacity of $2.5 million, with a net retention of $1.4
million. Underwriters has a $2.0 million gross property facultative
underwriting capacity with a net retention of $500,000.
Marketing
Underwriters writes almost all of its treaty business and 80 percent
of its facultative business through reinsurance brokers. The remainder of its
facultative business is written directly with ceding companies. By working
primarily through brokers, Underwriters does not need to maintain a large sales
organization which, during periods of reduced premium volume, can comprise a
significant and nonproductive part of overhead. In addition, Underwriters
believes that submissions from the broker market, including certain targeted
specialty coverages, are more numerous and diverse than would be available
through a salaried sales organization, and Underwriters is able to exercise
greater selectivity than would be possible in dealing directly with ceding
companies.
Reinsurance brokers regularly approach Underwriters and others for
quotations on reinsurance being placed for the brokers' customers. In 1993,
Underwriters paid brokers $8.2 million in commissions, which represents 4
percent of its gross written premiums of $225.9 million. Transactions arranged
by BEP International Corporation accounted for 14 percent of Underwriters'
gross written premiums in 1993. Transactions arranged by Underwriters' five
leading brokers (including BEP International Corporation) accounted for 42
percent of gross written premiums in 1993. Loss of all or a substantial
portion of the business provided by any of its five leading brokers could have
a material adverse effect on the results of operations of Underwriters.
A significant percentage of Underwriters' gross written premiums are
generally obtained from a relatively small number of ceding companies. In
1993, approximately 41 percent of gross written premiums were obtained from
Underwriters' ten largest ceding companies. Due to the nature of Underwriters'
business, the identity of ceding companies accounting for relatively large
percentages of gross written premiums tends to vary from year to year. While
Underwriters has generally been successful in
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<PAGE> 51
replacing accounts that have not been renewed, there can be no assurance that
it will be able to do so in the future. Underwriters does not believe that the
loss of the account of any one ceding company would have a material adverse
effect on Underwriters' financial condition or results of operations.
Outstanding Losses and Loss Adjustment Expenses
In many cases, significant periods of time may elapse between the
occurrence of an insured loss, the reporting of the loss to the insurer and the
reinsurer and the insurer's payment of that loss and subsequent payments by the
reinsurer. To recognize liabilities for unpaid losses, insurers and reinsurers
establish "reserves," which are balance sheet liabilities representing
estimates of future amounts needed to pay claims and related expenses with
respect to insured events which have occurred, including events which have not
been reported to the insurer.
When a claim is reported by the ceding company, Underwriters' claims
department establishes a "case" reserve for the estimated amount of
Underwriters' ultimate payment. Such reserves are based upon the amount of
reserves recommended by the ceding company and are supplemented by additional
amounts as deemed necessary by Underwriters' claims department, after an
evaluation of numerous factors including coverage, liability, severity of
injury or damage, jurisdiction and ability of the ceding company to evaluate
and handle the claim properly. In many cases Underwriters establishes case
reserves even when the ceding company believes there is no liability of the
reinsurer. In no instance is the case reserve established by Underwriters less
than that suggested by the ceding company. These reserves are periodically
adjusted by Underwriters' claims department based on its evaluation of
subsequent reports from and audits of the ceding company.
"Bulk" reserves or "incurred but not reported" reserves are established on
an aggregate basis to provide for losses incurred but not yet reported to the
insurer and to supplement the overall adequacy of reported case reserves and
estimated expenses of settling such claims, including legal and other fees and
general expenses of administering the claims adjustment process. Underwriters
establishes bulk reserves by using generally accepted actuarial reserving
techniques to estimate the ultimate net liability for losses and loss
adjustment expenses ("LAE"). The process provides implicit recognition of the
impact of inflation and other factors affecting claims
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<PAGE> 52
reporting by taking into account changes in historic loss reporting patterns
and perceived probable trends.
Underwriters' actuarial department performs reviews of aggregate loss
reserves at least twice each year. Between the semi-annual reviews,
Underwriters uses an updating system which applies the loss ratios determined
in the previous review to earned premiums to date, less incurred losses
reported. Underwriters does not discount any of its reserves for reported or
unreported claims in any line of its business for anticipated investment
income. There are inherent uncertainties in estimating reserves primarily due
to the long-term nature of most reinsurance business, the diversity of
development patterns among different lines of business and types of
reinsurance, and the necessary reliance on the ceding insurer for information
regarding claims. Actual losses and LAE may deviate, perhaps substantially,
from reserves on Underwriters' financial statements, which could have a
material adverse effect on Underwriters' financial condition and results of
operations. However, Underwriters believes that its reserves are being
calculated in accordance with sound actuarial practices and, based upon current
information, that Underwriters' reserves for losses and LAE at December 31,
1993 are adequate.
Asbestos-related liability and environmental impairment have been
recognized as industry-wide problems. In 1993, Underwriters paid $3.2 million
in asbestos-related claims and $1.6 million in environmental impairment claims.
Its net case and bulk reserves for asbestos-related liabilities totalled about
$30.3 million, involving approximately 750 open claims, as of December 31,
1993. Additionally, ceding companies have reported 1,627 asbestos-related
cases in which Underwriters may be subject to possible exposure. Underwriters
did not write reinsurance during periods prior to 1970, when asbestos was most
frequently used, and it has received very few property damage claims relating
to asbestos. Underwriters' net case and bulk reserves for environmental
impairment claims totalled about $22.3 million, involving approximately 412
open claims, as of December 31, 1993. Ceding companies have reported an
additional 9,213 environmental impairment cases in which Underwriters may be
subject to possible exposure.
Underwriters' case reserves for individual asbestos-related and
environmental impairment claims reflect amounts beyond those reserves
recommended by its ceding companies. In addition to the case and bulk reserves
for asbestos-related and environmental impairment claims reported on a
statutory basis as of December 31, 1993, Underwriters
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<PAGE> 53
carried an additional $35.8 million in reserves for such exposures. Taking
into consideration these additional reserves, Underwriters believes that its
total asbestos-related and environmental impairment reserves are adequate.
The table below shows changes in historical net loss and LAE reserves
for Underwriters for each year since 1983. Reported reserve development is
derived primarily from information included in Underwriters' statutory
financial statements. The first line of the upper portion of the table shows
the net reserves at December 31 of each of the indicated years, representing
the estimated amounts of net outstanding losses and LAE for claims arising
during that year and in all prior years that are unpaid, including losses that
have been incurred but not yet reported to Underwriters. The upper portion of
the table shows the reestimated amount of the previously recorded net reserves
for each year based on experience as of the end of each succeeding year. The
estimate changes as more information becomes known about claims for individual
years. The lower portion of the table shows the cumulative net amounts paid as
of December 31 of successive years with respect to the net reserve liability
for each year.
In evaluating the information in the table below, it should be noted
that a reserve amount reported in any period includes the effect of any
subsequent change in such reserve amount. For example, if a loss was first
reserved in 1987 at $100,000 and was determined in 1990 to be $150,000, the
$50,000 deficiency would be included in the Cumulative Redundancy (Deficiency)
row shown below for each of the years 1987 through 1989. Conditions and trends
that have affected the development of liability in the past may not necessarily
occur in the future. Accordingly, it may not be appropriate to extrapolate
future redundancies or deficiencies based on this table. During the mid-1980s,
the reinsurance industry, including Underwriters, experienced substantial
underwriting losses. Such losses are reflected in the table, beginning with
the comparatively high cumulative deficiencies in the years 1983-86.
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<PAGE> 54
Changes in Historical Net Reserves for Losses and LAE
(in millions)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------------------
1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net liability as of
the end of year* . . . . $ 156 $ 179 $ 279 $ 359 $ 470 $ 461 $ 453 $ 411 $ 411 $437 $ 509
Cumulative amount
of net liability
paid as of:
One year later . . . . . $ 42 $ 63 $ 80 $ 94 $ 116 $ 119 $ 137 $ 101 $ 84 $ 98 -
Two years later . . . . . 86 130 161 193 208 242 227 173 161 - -
Three years later . . . . 127 192 258 277 330 306 285 239 - - -
Four years later . . . . 159 260 341 375 380 348 342 - - - -
Five years later . . . . 199 318 389 407 416 394 - - - - -
Six years later . . . . . 228 359 404 423 458 - - - - - -
Seven years later . . . . 249 373 413 460 - - - - - - -
Eight years later . . . . 262 381 445 - - - - - - - -
Nine years later . . . . 269 404 - - - - - - - - -
Ten years later . . . . . 285 - - - - - - - - - -
Net liability
reestimated
as of:
One year later . . . . 170 237 341 439 481 454 457 414 412 483 -
Two years later . . . . 205 314 426 449 473 457 460 421 455 - -
Three years later . . . 238 394 432 441 476 462 474 465 - - -
Four years later . . . 282 400 428 444 478 492 520 - - - -
Five years later . . . 289 396 426 445 516 538 - - - - -
Six years later . . . . 284 394 427 484 562 - - - - - -
Seven years later . . . 282 395 454 531 - - - - - - -
Eight years later . . . 282 410 495 - - - - - - - -
Nine years later . . . 290 447 - - - - - - - - -
Ten years later . . . . 320 - - - - - - - - - -
Cumulative Redundancy
(Deficiency) . . . . . $(164) $(268) $(216) $(172) $ (92) $ (77) $ (69) $ (54) $ (44) $(46) -
Gross Liability - End of Year $739 $ 861
Reinsurance Recoverable 352 352
---- -----
Net Liability - End of Year 437 509
==== =====
Gross Re-estimated Liability -
Latest 833 -
Re-estimated Recoverable -
Latest 370 -
---- -----
Net Re-estimated Liability -
Latest $483 -
==== =====
</TABLE>
- ----------------
* Amounts for 1983-86 were determined in accordance with statutory accounting
principles.
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<PAGE> 55
The reconciliation between reserves determined in accordance with
statutory accounting principles ("SAP") and reserves determined in accordance
with generally accepted accounting principles ("GAAP") for the last three years
is shown below (in thousands):
Reconciliation of Reserves for Losses and LAE
from SAP Basis to GAAP Basis
<TABLE>
<CAPTION>
December 31,
---------------------------------------------
1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Statutory Reserves . . . . . . . . . . . . . . . . . . . $473,625 $424,205 $407,848
Reinsurance Deposits(1) . . . . . . . . . . . . . . . . . 0 12,396 2,957
Additional mass action
reserves(2) . . . . . . . . . . . . . . . . . . . . . . 35,750 0 0
-------- -------- --------
Net Reserves--GAAP Basis . . . . . . . . . . . . . . . . 509,375 436,601 410,805
Ceded Reserves--GAAP Basis(3) . . . . . . . . . . . . . . 351,829 352,073 329,024
-------- -------- --------
Gross Reserves--GAAP Basis . . . . . . . . . . . . . . . $861,207 $788,674 $739,829
======== ======== ========
</TABLE>
(1) Amounts which relate to multiple-year retrospectively-rated contracts
(i.e., contracts that provide for premium adjustments or changes in future
coverage based on loss experience) are classified as ceded reserves on a
statutory basis. A recent interpretation of GAAP, as promulgated by the
FASB Emerging Issues Task Force, requires that such contracts be accounted
for as deposits.
(2) Amount represents additional reserves recorded by Underwriters for
possible asbestos-related and environmental impairment claims exposure.
(3) Amounts represent ceded outstanding losses and LAE reclassified to
reinsurance receivables in accordance with Statement of Financial
Accounting Standards No. 113, "Accounting and Reporting for Reinsurance of
Short-Duration and Long-Duration Contracts."
The reconciliation of reserves for the last three years on a GAAP
basis is shown below (in thousands):
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<PAGE> 56
Reconciliation of Reserves for Losses and LAE
<TABLE>
<CAPTION>
1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Reserve as of January 1* . . . . . . . . . . . . . . . . $436,601 $410,805 $411,024
Incurred related to:
Current year . . . . . . . . . . . . . . . . . . 143,723 121,504 101,807
Prior years . . . . . . . . . . . . . . . . . . 46,404 1,376 3,213
-------- -------- --------
Total Incurred . . . . . . . . . . . . . . . . . . . . . 190,127 122,880 105,020
-------- -------- --------
Paid related to:
Current year . . . . . . . . . . . . . . . . . . (19,640) (12,954) (4,482)
Prior years . . . . . . . . . . . . . . . . . . (97,713) (84,130) (100,757)
-------- -------- --------
Total Paid . . . . . . . . . . . . . . . . . . . . . . . (117,353) (97,084) (105,239)
-------- -------- --------
Reserve as of December 31* . . . . . . . . . . . . . . . $509,375 $436,601 $410,805
======== ======== ========
</TABLE>
* Reserves as presented represent GAAP basis losses and LAE net of ceded
losses and LAE.
Retrocessional Arrangements
A reinsurer often reinsures some of its business with other
reinsurers ("retrocessionaires") pursuant to retrocession agreements, and pays
to its retrocessionaires a portion of the premiums it receives. Reinsurance
companies enter into retrocession agreements for reasons similar to those that
cause primary insurers to purchase reinsurance.
Underwriters' has long-term retrocessional agreements with a number
of domestic and international reinsurance companies. Retrocessional contracts
do not relieve Underwriters from its obligations to ceding companies and
Underwriters remains liable to its ceding companies for the portion reinsured
to the extent that any retrocessionaire does not meet the obligations assumed
under the retrocessional agreements. Consequently, the most important factor
in Underwriters' selection of retrocessionaires is financial stability.
Underwriters utilizes several retrocessional arrangements to reduce its net
liability on individual risks, protect against catastrophic losses and
facilitate the maintenance of various financial ratios. Underwriters would be
adversely affected to the extent of any defaulted amounts in the event any
retrocessionaire is unable to meet its contractual obligations.
Underwriters currently has reinsurance contracts in force which cede
to retrocessionaires risks in excess of Underwriters' net risk retention,
ceding up to $1.1 million per
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<PAGE> 57
casualty facultative risk and up to $1.5 million per property facultative risk.
Underwriters also has an aggregate reinsurance contract to cover losses, up to
$30 million, incurred during the period July 1, 1993 through June 30, 1994 in
excess of a 77 percent loss and LAE ratio. The contract covers essentially all
lines of business written by Underwriters; however, property catastrophe losses
are subject to a sublimit of $26 million. Also, Underwriters from time to time
purchases retrocessional reinsurance in varying amounts for specific assumed
treaties.
As of December 31, 1993, Underwriters had reported reinsurance
receivables of $353.9 million through retrocession agreements, including $200
million under two reinsurance contracts, with a subsidiary of Continental
Insurance Group. The $200 million reinsurance receivable is secured by a
combination of letters of credit and a trust fund dedicated solely to payments
under the two reinsurance contracts. As of December 31, 1993, Underwriters had
an allowance for estimated unrecoverable reinsurance of $1.8 million.
Investment Operations
Underwriters' investments must comply with the insurance laws of New
Hampshire, the domiciliary state of Underwriters, California, the domiciliary
state of CUIC, and the other states in which they are licensed. These laws
prescribe the kind, quality and concentration of investments which may be made
by insurance companies. In general, these laws permit investments, within
specified limits and subject to certain qualifications, in federal, state and
municipal obligations, corporate bonds, preferred and common stocks and real
estate mortgages.
Underwriters' current investment strategy is to maximize after-tax
investment income through a high quality diversified investment portfolio,
consisting primarily of taxable and tax-exempt fixed maturity securities, while
maintaining an adequate level of liquidity.
For the purpose of managing its investment portfolio, Underwriters
has estimated that the average duration of its policy liabilities is
approximately five years. The average duration of the investment portfolio has
generally approximated five years. Underwriters may adjust the duration of its
investment portfolio from time to time as necessary to maintain a reasonable
relationship between the duration of its liabilities and its portfolio assets.
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<PAGE> 58
The following table reflects investment results for Underwriters for
the three months ended December 31, 1993 (in thousands except percentages):
Investment Results
<TABLE>
<CAPTION>
Net Net
Pre-Tax After-Tax Pre-Tax After-
Average Investment Investment Realized Effective Tax
Investments(1) Income(2) Income(3) Losses Yield(4) Yield(5)
-------------- ---------- ---------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
$737,693 $10,390 $7,943 $2,381 5.6 4.3
</TABLE>
(1) Average of amortized cost of fixed maturities plus cost of equity
securities at beginning and end of period, excluding operating cash.
(2) After investment expenses, excluding realized gains or losses from sale of
investments.
(3) Net pre-tax investment income less appropriate income taxes.
(4) Annualized net pre-tax investment income for the period divided by average
investments for the same period.
(5) Annualized net after-tax investment income for the period divided by
average investments for the same period.
The following table summarizes the investments of Underwriters,
excluding cash, as of December 31, 1993, with all investments carried at market
value (in thousands except percentages):
<TABLE>
<CAPTION>
Investments
Amortized Cost or Cost Market Value
---------------------- --------------------
Amount Percentage Amount Percentage
<S> <C> <C> <C> <C>
Short term investments . . . . . . . . . . . . . . . . 63,602 8.3% 63,602 8.3%
Corporate bonds . . . . . . . . . . . . . . . . . . . . 93,305 12.1 92,326 12.0
U.S. government and government
agency bonds . . . . . . . . . . . . . . . . . . . . 35,000 4.5 34,940 4.5
Mortgage and asset backed securities . . . . . . . . . 172,093 22.3 171,874 22.3
Foreign bonds . . . . . . . . . . . . . . . . . . . . . 32,770 4.3 32,172 4.2
Redeemable preferred stocks . . . . . . . . . . . . . . 16,292 2.1 16,247 2.1
Municipal bonds . . . . . . . . . . . . . . . . . . . . 338,601 44.0 339,379 44.1
------- ----- ------- -----
Equity securities . . . . . . . . . . . . . . . . . . . 18,577 2.4 19,552 2.5
Total . . . . . . . . . . . . . . . . . . . . . 770,240 100.0% 770,092 100.0%
======= ===== ======= =====
</TABLE>
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<PAGE> 59
The following table indicates the composition of the long-term fixed
maturity portfolio by Moody's rating as of December 31, 1993 (in thousands
except percentages):
<TABLE>
<CAPTION>
Long-Term Fixed Maturity Portfolio by Moody's Rating
Market
Value Percentage
------ ----------
<S> <C> <C>
Aaa . . . . . . . . . . . . . . . . . . . . . . 402,165 58.5%
Aa . . . . . . . . . . . . . . . . . . . . . . 136,582 19.9
A . . . . . . . . . . . . . . . . . . . . . . . 123,606 18.0
Baa . . . . . . . . . . . . . . . . . . . . . . 24,585 3.6
------- ------
Total . . . . . . . . . . . . . . . . . . 686,938 100.0%
======= ======
</TABLE>
The following table indicates the composition of the long-term fixed
maturity portfolio by years until maturity as of December 31, 1993 (in
thousands except percentages):
<TABLE>
<CAPTION>
Long-Term Fixed Maturity Portfolio by Years Until Maturity
Market
Value Percentage
------ ----------
<S> <C> <C>
One year or less . . . . . . . . . . . . . . . 13,942 2.0
Over one through five years . . . . . . . . . . 58,403 8.5
Over five through ten years . . . . . . . . . . 148,038 21.6
Over ten years . . . . . . . . . . . . . . . . 294,682 42.9
Mortgage and asset backed securities . . . . . 171,873 25.0
------- -----
Total . . . . . . . . . . . . . . . . . . 686,938 100.0%
======= ======
</TABLE>
Competition
Competition in the property and casualty reinsurance industry has
historically been cyclical in nature. Typically, a cycle begins with
attractive premium rates for reinsurance, which cause increased writing by
existing reinsurers and the entrance into the market of new reinsurers.
Competition within the market continues to grow, resulting in a decline in
premium rates. As the cycle continues, these decreased premium rates, in
conjunction with a combination of fluctuations in interest rates, catastrophic
events and general economic conditions, usually result in a period of
underwriting losses. Such losses in turn cause reinsurers to slow or stop
writing reinsurance or to withdraw from the market altogether, which results in
decreased competition and a subsequent increase in premium rates. Underwriters
believes this competitive cycle, which may affect particular market segments at
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<PAGE> 60
different times, is a critical factor affecting reinsurance profitability over
time. There are no assurances that historical trends in the property and
casualty reinsurance industry will continue or that Underwriters will be able
to accurately anticipate any such trends.
The property and casualty reinsurance business is highly competitive.
Underwriters competes primarily in the United States reinsurance market with
numerous foreign and domestic reinsurers, many of which have greater financial
resources than Underwriters. Competition in the types of reinsurance in which
Underwriters is engaged is based on many factors, including the perceived
overall financial strength of the reinsurer, premiums charged, contract terms
and conditions, services offered, speed of claims payment, reputation and
experience.
Underwriters' competitors include independent reinsurance companies,
subsidiaries or affiliates of established worldwide insurance companies,
reinsurance departments of certain primary insurance companies and domestic,
European and Asian underwriting syndicates.
According to the Reinsurance Association of America, at December 31,
1993, there were 54 domestic professional reinsurers, and Underwriters was the
nation's sixteenth-largest in terms of net premiums written.
Regulation
Underwriters and CUIC are subject to regulation and supervision by
state insurance regulators under the insurance statutes and regulations of
states in which they are incorporated (New Hampshire and California,
respectively). In addition, each of these companies is regulated in each
jurisdiction in which it conducts business. Among other things, insurance
statutes and regulations typically limit the amount of dividends that can be
paid without prior regulatory notification and approval, impose restrictions on
the amounts and types of investments Underwriters and CUIC may each hold,
prescribe solvency standards that must be met and maintained, require filing of
annual or other reports with respect to financial condition and other matters
and provide for periodic examinations of Underwriters and CUIC.
The terms and conditions of reinsurance agreements generally are not
subject to regulation by any governmental authority with respect to rates or
policy terms. These agreements contrast with primary insurance policies and
agreements, the rates and policy terms of which are generally closely regulated
by state
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<PAGE> 61
insurance departments. As a practical matter, however, the rates charged by
primary insurers do have an effect on the rates that can be charged by
reinsurers.
As an insurance holding company, Alleghany is also subject to the
insurance regulations of New Hampshire and California. Each state required
prior regulatory approval of Alleghany's acquisition of Underwriters and CUIC,
respectively. Alleghany and its other subsidiaries, however, are generally not
subject to restrictions on their business activities due to their affiliation
with Underwriters.
Employees
Underwriters employed 153 persons as of December 31, 1993.
INDUSTRIAL MINERALS BUSINESS
On July 31, 1991, a holding company subsidiary of Alleghany acquired
all of Manville Corporation's worldwide industrial minerals business, now
conducted principally through World Minerals, at a cost of about $144 million,
including capitalized expenses. The present chief executive officer of World
Minerals currently owns an equity interest of about 6.2 percent of World
Minerals' immediate parent company.
On September 16, 1991, certain assets of the Inorganic Specialties
Division of Witco Corporation, including a diatomaceous earth mine and plant in
Quincy, Washington, were acquired by World Minerals' subsidiary Celite.
On November 16, 1992, New Harborlite Corporation ("Harborlite"), a
newly formed subsidiary of World Minerals, acquired all of the outstanding
capital stock of Harborlite Corporation ("Old Harborlite"), a privately owned
perlite filter-aid company, for cash and non-voting preferred stock of
Harborlite. All of World Minerals' pre-existing perlite operations were
transferred to Harborlite, and Old Harborlite was merged into Harborlite, which
was then renamed Harborlite Corporation. In 1993, Harborlite enhanced its
position in the domestic perlite business through the acquisition of additional
reserves near its perlite mine in Superior, Arizona and an additional perlite
expansion plant in Fort Worth, Texas.
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Accordingly, World Minerals currently conducts its industrial
minerals business through its subsidiaries Celite and Harborlite:
Celite
Celite is believed to be the world's largest producer of diatomite,
which it markets under the Celite and Kenite brand names. Diatomite is a
silica-based mineral consisting of the fossilized remains of microscopic
freshwater or marine plants. Celite also produces calcium and magnesium
silicate products.
Diatomite's primary applications are in filtration and as a filler.
Filtration accounts for the majority of the worldwide diatomite market and
for over 50 percent of Celite's diatomite sales. Diatomite is used as a
filter aid in the production of beer, food, juice, wine, water, sweeteners,
fats and oils, pharmaceuticals, chemicals, lubricants and petroleum.
Diatomite is used as a filler mainly in paints. Diatomite is also used as
an anti-block agent in plastic film.
Celite's calcium and magnesium silicate products, which have high
surface area and adsorption and absorption capabilities, are used to
convert liquid, semi-solid and sticky ingredients into dry, free-flowing
powders. Celite's calcium and magnesium silicate products are used in the
production of rubber, sweeteners, flavorings and pesticides.
Harborlite
Harborlite, which began operations on November 16, 1992, carries on
the business of Old Harborlite and the perlite production businesses
formerly conducted by Celite. These products are marketed under the
Harborlite brand name. Harborlite is a world leader in the production and
sale of perlite, a volcanic mineral.
Perlite ore is mined at Harborlite's No Agua, New Mexico mine and is
sold primarily to companies that will expand it in their own expansion
plants and use it in the manufacture of roofing board, formed pipe
insulation and acoustical ceiling tile. Perlite ore for filter-aid and
filler applications is mined at Harborlite's Superior, Arizona mine and is
expanded at one of Harborlite's five expansion plants located within the
United States. Expanded perlite is also produced at Harborlite's expansion
plants in
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Europe from perlite ore obtained from European and Middle Eastern
suppliers. Most of Harborlite's expanded perlite is used as a filter aid
in the brewing, food, wine, sweetener, pharmaceutical, chemical and
lubricant industries, and as a filler and insulating medium in various
construction applications.
World Minerals directs its business from its world headquarters in
Lompoc, California. Its Celite subsidiary also has its world headquarters in
Lompoc, California and owns, directly or through wholly owned subsidiaries,
diatomite mines and processing plants in Lompoc, California; Quincy,
Washington; Murat, France; Alicante, Spain; and Guadalajara, Mexico. Celite
also owns 48.6 percent of Kisilidjan, h.f., a joint venture with the Government
of Iceland which mines and processes diatomite from Lake Myvatn in Iceland.
Harborlite has its world headquarters in Vicksburg, Michigan and owns
a perlite mine and mill in No Agua, New Mexico, a perlite-loading facility in
Antonito, Colorado, a perlite mine and a mill in Superior, Arizona and perlite
expansion facilities in Escondido, California; Green River, Wyoming; Fort
Worth, Texas; Vicksburg, Michigan; Quincy, Florida; Wissembourg, France; and
Hessle, England.
Since World Minerals conducts certain of its operations in foreign
countries, it is subject to the risk of currency fluctuation. In 1993,
approximately 31 percent of World Minerals' revenues (equal to 2.4 percent of
Alleghany's consolidated revenues) were generated by foreign operations, and an
additional 15 percent of World Minerals' revenues were generated by export
sales from the United States.
Celite's largest diatomite mine and plant are located near Lompoc,
California. All additional diatomite supplies are obtained by Celite from its
mines in the state of Washington, France, Spain, Mexico and from the Lake
Myvatn mine in Iceland (although environmental regulations and seismic
activities may adversely affect future production at Lake Myvatn). Celite
believes that its diatomite reserves are generally sufficient to last for at
least 20 more years at the current rate of utilization.
Harborlite obtains perlite ore from its No Agua and Superior mines,
and believes that its perlite ore reserves are sufficient to last at least 20
more years at the current rate of utilization. The perlite used by Harborlite
for expansion in
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Europe is obtained from third parties in Europe and the Middle East.
Celite's silicate products are produced from purchased magnesium and
calcium compounds and internally produced diatomite.
World Minerals experienced no interruption in raw material
availability in 1993, and barring unforeseen circumstances anticipates no such
interruption in 1994. While there can be no assurance that adequate supplies
of all raw materials will be available in the future, Celite and Harborlite
believe that they have taken reasonable precautions for the continuous supply
of their critical raw materials.
Many of Celite's and Harborlite's operations use substantial amounts
of energy, including electricity, fuel oil, natural gas, and propane. Celite
and Harborlite have supply contracts for most of their energy requirements.
Most of such contracts are for one year or less. Celite and Harborlite have
not experienced any energy shortages and they believe that they have taken
reasonable precautions to ensure that their energy needs will be met, barring
any unusual or unpredictable developments.
From the time World Minerals began operations in 1991, none of its
customers accounted for 10 percent or more of World Minerals' annual sales.
World Minerals presently owns, controls or holds licenses either
directly or through its subsidiaries to approximately 22 United States and 40
foreign patents and patent applications. While World Minerals considers all of
its patents and licenses to be valuable, World Minerals believes that none of
its patents or licenses is by itself material to its business.
World Minerals normally maintains approximately a one- to three-week
supply of inventory on certain products due to production lead times. Although
diatomite mining operations at Celite's principal mine in Lompoc, California
must be suspended during periods of heavy rainfall, World Minerals believes
that, because of the stockpiling of ore during dry periods, such suspension
does not materially affect the supply of inventory. Barring unusual
circumstances, World Minerals does not experience backlogs of orders. World
Minerals' business is not seasonal.
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World Minerals acts as the sales agent for both Celite and Harborlite
in the United States and procures orders from customers and distributors on
their behalf. Celite distributes Harborlite's products in Europe to dealers,
distributors and end users on Harborlite's behalf.
World Minerals has research and development, environmental control
and quality control laboratories at its Lompoc production facilities and
quality control laboratories at each of its other production facilities. In
1993, World Minerals spent approximately $1.1 million on company-sponsored
research and technical services (in addition to amounts spent on engineering
and exploration) related to the development and improvement of its products and
services.
Competition
Celite believes that it is the world's largest producer of diatomite.
The remainder of the market is shared by Celite's four major competitors:
Eagle-Picher (United States), Grefco (United States), CECA (France) and Showa
(Japan), and a number of smaller competitors. Celite's silicates compete with
a wide variety of other synthetic mineral products. Harborlite has two large
competitors in the expanded perlite market, Grefco and CECA, and many smaller
competitors. Competition is principally on the basis of service, product
quality and performance, warranty terms, speed and reliability of delivery,
availability of the product and price.
Celite's and Harborlite's filter-aid products compete with other
filter aids, such as cellulose, and other filtration technologies, such as
crossflow and centrifugal separation.
Regulation
All of Celite's and Harborlite's domestic operations are subject to a
variety of federal, state and local environmental laws and regulations. The
most significant of these are the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Federal Clean Air Act, the Federal
Clean Water Act, the Toxic Substances Control Act and the Resource Conservation
and Recovery Act, and the regulations promulgated thereunder, all of which are
administered by the United States Environmental Protection Agency ("EPA").
These laws and regulations establish potential liability for costs incurred in
cleaning up waste sites and impose limitations on atmospheric emissions,
discharges to domestic waters, and disposal of hazardous materials. Certain
state and local
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jurisdictions have adopted regulations that may be more stringent than
corresponding federal regulations. Moreover, federal and state laws governing
disposal of wastes impact customers who must dispose of used filter-aid
materials. Due to their environmental compliance programs, Celite and
Harborlite believe that the impact of these environmental requirements on their
respective operating results has been minimal; however, the exact nature of the
environmental problems which Celite or Harborlite may encounter in the future
cannot be predicted, primarily because of the increasing number and complexity
and the changing character of the standards relating thereto.
The operations of Celite and certain operations of Harborlite are
also subject to regulation by the Mine Safety and Health Administration
("MSHA"). This agency establishes health and safety standards for employee
work environments in the mining industry. MSHA's activity includes regulations
relating to noise, respiratory protection and dust. Because of their ongoing
programs of occupational health and safety surveillance, Celite and Harborlite
believe that the impact of these regulations on their respective operating
results is limited.
Certain products of Celite and Harborlite are subject to the Hazard
Communication Standard promulgated by the Occupational Safety and Health
Administration ("OSHA"), which requires Celite and Harborlite, respectively, to
disclose the hazards of their plants and products to employees and customers.
Such requirements also mandate that customers who purchase diatomite or perlite
for use as a filler in their products label such products to disclose hazards
which may result from the inclusion of crystalline silica-based fillers, if any
of such products contain in excess of 0.1% of crystalline silica by volume.
Therefore, some manufacturers of paint may be considering the use of other
fillers in place of Celite's products. However, Celite believes that the loss
of these customers would not have a material adverse effect on its operating
results. Several states have also enacted or adopted "right to know" laws or
regulations, which seek to expand the federal Hazard Communication Standard to
include providing notice of hazards to the general public, as well as to
employees and customers.
In 1987, the International Agency for Research on Cancer ("IARC")
issued a report, which was supplemented in 1988, designating crystalline silica
as "probably carcinogenic to humans," which is a tentative classification
falling between "probably not carcinogenic to humans" and "sufficient evidence
of human carcinogenicity." Crystalline silica is one of the
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earth's most abundant minerals, appearing in such forms as quartz, sandstone,
gravel and sand. Celite's products contain varying amounts of crystalline
silica ranging from less than 0.1 percent to 65 percent or more. Harborlite's
No Agua-mined perlite generally contains less than 1 percent crystalline
silica. Harborlite's Superior-mined perlite contains no detectable crystalline
silica. Celite and Harborlite provide warning labels on their products
containing in excess of 0.1 percent respirable crystalline silica, advising
customers of the IARC designation and providing recommended safety precautions.
The 1987 IARC designation has been the subject of controversy and
continued study. Celite, through the industry-sponsored International
Diatomite Producers Association ("IDPA"), has participated in funding several
studies to examine in more detail the cancer risk to humans from crystalline
silica. One such study, conducted by the University of Washington, is a cohort
mortality study of approximately 2,570 workers in the diatomaceous-earth mining
and processing industry. The cohort includes only workers who were employed
for at least twelve months' cumulative service and were employed at some time
between January 1942 and December 1986. Because employment records for the
earlier periods of the study were often missing or incomplete, this cohort, at
present, is comprised of workers from only a limited number of employers and
work locations in the industry. A large number of the workers included in the
cohort worked at Celite's Lompoc, California plant prior to the acquisition of
its business by a holding company subsidiary of Alleghany.
The final University of Washington report was issued in October 1992.
The study found a modest increase in lung cancer deaths in the cohort compared
with national rates (indicated by a standardized mortality ratio ("SMR") equal
to 1.43). The standardized mortality ratio compares the number of cancer
deaths in the cohort with 1, representing the number of cancer deaths in the
population at large. The study also found an increase in non-malignant
respiratory disease ("NMRD") (SMR equal to 2.59); this finding was expected
because the NMRD category included silicosis resulting from exposures in past
decades. With regard to the excesses over national rates of mortality as they
relate to the present workforce, the authors of the study stated:
The results for lung cancer and NMRD indicate
that the excesses were most likely attributable
to relatively intense exposures encountered
during the 1930s and 1940s, before dust control
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measures were implemented on a wide-scale basis
in the industry. At present it cannot be said
with certainty that lung cancer and NMRD risks
have been reduced to baseline levels
experienced by the population at large.
However, it is noteworthy that there has been
no excess risk of lung cancer among Lompoc
cohort workers hired since 1960, and there have
been no deaths attributed to silicosis among
cohort members since 1950. These trends are
strongly suggestive of reduced hazards,
probably related to improved environmental dust
control and the increased use of respiratory
protective devices by the workforce.
After the publication of the Washington study, Celite conducted its own review
of the portion of the cohort representing the Lompoc plant and found that more
workers in this portion of the cohort may have been exposed to asbestos than
originally thought. Since exposure to asbestos has been found to cause lung
cancer and respiratory disease, this finding has raised some concern that the
Washington study may overstate the adverse health effects of exposure to
crystalline silica. IDPA has engaged an epidemiologist and an industrial
hygienist to examine the cohort to determine whether asbestos exposure was
fully accounted for in the Washington study's results. Certain other cohort
mortality studies of workers occupationally exposed to crystalline silica,
including a study of gold miners in North Dakota, have found no statistically
significant increases in lung cancer compared with national populations. The
issue remains subject to considerable debate.
The various agreements covering the purchase of the business of
Celite in 1991 provide for the indemnification of the holding company
subsidiary of Alleghany which acquired Celite by the various selling Manville
entities in respect of any environmental and health claims arising from the
operations of the business of Celite prior to its acquisition by the holding
company subsidiary.
Employees
As of December 31, 1993, World Minerals had 7 employees, all located
in the United States, Celite had a total of about 970 employees worldwide, and
Harborlite had a total of about 165 employees worldwide. Approximately 399 of
Celite's employees and 34 of Harborlite's employees in the United States are
covered by collective bargaining agreements. All of the
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collective bargaining agreements covering workers at Celite and Harborlite are
in full force and effect and none are scheduled to expire in 1994.
STEEL FASTENER BUSINESS
The Heads and Threads division of Alleghany, headquartered in
Northbrook, Illinois, is believed to be the nation's leading distributor of
imported steel fasteners. Heads and Threads imports and sells commercial
fasteners - nuts, bolts, screws and washers - for resale to fastener
manufacturers and distributors through a network of sales offices and
warehouses located in fourteen states. The strength of Heads and Threads lies
in its five major warehouses and thirteen regional satellite warehouses, long
years of association with suppliers and customers, and ability to control
operating costs.
Since Heads and Threads imports virtually all of its fasteners, it is
necessary to forecast inventory requirements from six months to a year in
advance to allow time for shipments to reach their destinations in the U.S. In
addition, Heads and Threads' costs are subject to foreign currency fluctuations
and increases in import duties, which may result from determinations by U.S.
federal agencies that foreign countries are violating U.S. laws or intellectual
property rights, or are following restrictive import policies. Rules that have
been proposed to implement the Fastener Quality Assurance Act, which became law
in late 1990, also may increase costs.
Heads and Threads has about 169 employees.
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Item 2. Properties.
Alleghany's headquarters is located in leased office space of about
10,000 square feet at Park Avenue Plaza in New York City.
CT&T and CTI lease about 278,000 square feet for their headquarters
operations in the Chicago Title and Trust Center, a 50-story office complex at
171 North Clark Street in Chicago, Illinois.
Ticor Title's and Security Union's headquarters are in company-owned
premises of about 180,000 square feet in Rosemead, California. CT&T and its
subsidiaries own or lease buildings or office space in approximately 425
locations throughout the United States, primarily for CTI, Security Union and
Ticor Title branch office operations.
Underwriters leases about 27,000 square feet of office space for its
headquarters operations in Woodland Hills, California. All of its five branch
office locations are also in leased spaces, ranging in size from about 3,200
square feet to 6,200 square feet. CUIC leases about 9,400 square feet of
office space.
Sacramento Savings owns its principal office in Sacramento,
California, which has approximately 50,000 square feet of floor space.
Sacramento Savings owns 30 of its 45 branch offices and leases the remainder.
It also owns about 385 acres of improved and unimproved land in the Sacramento
area, and is a party to joint ventures which own an additional 837 acres of
such land.
World Minerals' headquarters is located in leased premises of
approximately 17,300 square feet in Lompoc, California, which it shares with
Celite. Harborlite's headquarters is located at its Vicksburg, Michigan plant.
A description of the major plants and properties owned and operated
by Celite and Harborlite is set forth below. All of the following properties
are owned, with the exception of Plant # 1 at Quincy, Washington, the
headquarters offices at Lompoc, California, the Rueil, France office and the
plant at Wissembourg, France, which are leased.
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<TABLE>
<CAPTION>
Location and Approximate Product
Nature of Property Square Footage or Use
- ------------------ -------------- -------
<S> <C> <C>
CELITE:
- ------
Lompoc, CA 961,410 Diatomite filter
Mine; 17 multi- aids, fillers,
story production silicates and
buildings; 5 one- specialty
story warehouse products
buildings; 6 one-
story laboratory
buildings; 4 multi-
story bulk handling
buildings; 6 one-
story office buildings;
2 one-story lunch and
locker-room buildings;
and 10 one-story shops.
Lompoc, CA 17,300 Headquarters
1 one story building; offices
3 units within
1 one-story building.
Quincy, WA 60,941 Diatomite filter
Mine; Plant #1-1 multi- aids and fillers
story production
building and 7 one-
story buildings.
Plant #2-1 multi-
story production
building and 6 one-
story buildings.
Murat, Department
of Cantal, France 77,000 Diatomite filter
Mine; 1 one-story aids
manufacturing
building; 2 one-
story warehouses;
and 1 one-story
office building.
Rueil, France 10,000 Sales and
1 single floor. administrative offices
</TABLE>
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<TABLE>
<CAPTION>
Location and Approximate Product
Nature of Property Square Footage or Use
- ------------------ -------------- -------
<S> <C> <C>
Guadalajara, Mexico 116,610 Diatomite filter
Mine; 2 multi-story aids and fillers
production buildings;
2 multi-story
pollution-control
buildings; and 20
one-story buildings.
Mexico City, Mexico 2,700 Offices
1 single floor
condominium.
Alicante, Spain 69,410 Diatomite filter
Mine; 2 multi- aids and fillers
story manufac-
turing buildings;
3 one-story ware-
houses; 2 one-story
office buildings;
and 3 miscellaneous
buildings.
HARBORLITE:
Antonito, CO 9,780 Warehouse
1 one-story manu- facilities for
facturing building perlite
and warehouse; 1 one-
story office building;
and 1 one-story ware-
house.
No Agua, NM 40,550 Perlite ore
Mine; 1 six-story mill
building; 1 one-
story office and
shop building; and
8 miscellaneous one-
story buildings.
Superior, AZ 6,900 Perlite ore
Mine; 1 one-story
warehouse building; and
1 one-story office
building.
</TABLE>
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<TABLE>
<CAPTION>
Location and Approximate Product
Nature of Property Square Footage or Use
- ------------------ -------------- -------
<S> <C> <C>
Escondido, CA 8,450 Perlite filter
1 one-story aids
warehouse building;
and 1 one-story office
building.
Green River, WY 17,300 Perlite filter
1 one-story aids
warehouse building;
and 1 one-story office
building.
Vicksburg, MI 25,050 Perlite filter
2 one-story aids
warehouse buildings;
and 1 one-story office
building.
Fort Worth, TX 15,000 Perlite filter
1 one-story warehouse aids
building; 1 one-story
manufacturing building;
and 1 one-story office
building.
Quincy, FL 18,450 Perlite filter
1 one-story warehouse aids
building; 1 one-story
manufacturing building;
and 1 one-story office
building.
Wissembourg, France 50,000 Perlite filter
1 multi-story aids and fillers
production and ware-
house building.
Hessle, Humberside,
United Kingdom 36,700 Perlite filter
1 one-story aids and fillers
manufacturing
building; and 1
two-story office
building.
</TABLE>
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World Minerals' largest mine is located on Celite-owned property
immediately adjacent to the City of Lompoc, California, and is the site of one
of the most unusual marine diatomite deposits in the world. The mine
celebrated its 100th anniversary of production in 1993 and has been in
continuous operation for more than 60 years. Reserves are believed to be
sufficient for the operation of the plant for at least 20 more years at the
current rate of utilization. The Lompoc production facility has a rated
capacity in excess of 200,000 tons annually and currently supplies more than 25
different grades of products to the filtration and filler markets. The
facility also houses World Minerals' research and development, and health,
safety and environmental departments and Celite's quality control laboratories.
Celite and Harborlite also lease warehouses, office space and other
facilities in the United States and abroad. A joint venture between Celite and
the Government of Iceland has mining rights to mine diatomaceous earth in
sections of Lake Myvatn, Iceland.
The operations of Alleghany's Heads and Threads division are
conducted in 15 states at 18 locations, which serve as both sales offices and
warehouses, two of which are owned and the rest of which are leased. Its
headquarters in Northbrook, Illinois is owned by Alleghany.
Alleghany also owns two truck terminal properties in Ohio which are
being held for sale, and which have been leased from time to time on an interim
basis.
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Item 3. Legal Proceedings.
A. On January 7, 1985, the Federal Trade Commission (the "FTC")
filed a complaint alleging that six of the largest title insurance companies,
including CTI, Security Union and Ticor Title, violated Section 5 of the
Federal Trade Commission Act. The violation was asserted with respect to the
participation of those companies in rating bureaus in thirteen states to the
extent that the bureaus had proposed for state approval rates related to search
and examination services and settlement services performed by those companies
in connection with the issuance of title insurance policies. The FTC action
sought injunctive relief. During adjudicative hearings, the Bureau of
Competition of the FTC determined not to proceed with respect to five of the
thirteen states. In an initial decision filed on December 22, 1986, an
administrative law judge found that five of the companies (the sixth company
having withdrawn due to a separate settlement) violated Section 5 in two
states, Connecticut and Wisconsin, and recommended that the companies be
ordered not to participate in rating bureaus in those states in the future.
The administrative law judge found no violation of Section 5 in the remaining
six states.
Following cross appeals, on September 19, 1989 the FTC held that
violations had occurred in four additional states: Arizona, Montana, New Jersey
and Pennsylvania. On January 9, 1991, the United States Court of Appeals for
the Third Circuit unanimously reversed the decision of the FTC and found in
favor of the title insurance companies with respect to all states at issue,
holding that the rating-bureau activity at issue was entitled to immunity from
the antitrust laws under the state-action immunity doctrine. Under this
doctrine, a state law or regulatory scheme can be the basis for antitrust
immunity if the state (i) has articulated a clear and affirmative policy to
allow the anticompetitive conduct and (ii) provides active supervision of
anticompetitive conduct undertaken by private actors. On February 21, 1991,
the FTC filed a petition for rehearing, which was denied on March 12, 1991.
On October 7, 1991, upon petition of the FTC, the United States
Supreme Court granted a writ of certiorari to review the decision of the Third
Circuit Court of Appeals in favor of the title insurance companies. On June
12, 1992, the United States Supreme Court issued its decision in favor of the
FTC, holding that rating-bureau activity in Montana and Wisconsin had not been
sufficiently active to permit the title insurers to invoke the state-action
immunity doctrine. The case was remanded to the Court of Appeals for further
analysis by
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that court of the application of the state-action immunity doctrine in Arizona
and Connecticut and for further consideration of general defenses, including
the exemption provided by the McCarran Ferguson Act, which exempts the business
of insurance from the antitrust laws.
On July 15, 1993, a three-judge panel of the Court of Appeals issued
a decision in favor of the FTC, with one judge dissenting. The Court held that
the state-action immunity doctrine was not applicable in either Arizona or
Connecticut due to a lack of active state supervision, and that other general
defenses were unavailable, including the exemption provided by the
McCarran-Ferguson Act. On August 29, 1993, the Third Circuit Court of Appeals
dismissed the title insurers' petition for a rehearing en banc. The title
insurers filed a petition for a writ of certiorari to the United States Supreme
Court on November 29, 1993, and the FTC filed a brief in opposition on February
25, 1994. The title insurers' petition was denied on March 21, 1994.
The FTC action was for injunctive relief only. Several federal and
state actions involving the same issues as the FTC action were filed against
the same title insurance companies, seeking damages and injunctive relief. One
such action, a class action filed in state court in Wisconsin challenging
rating-bureau activity in that state, was dismissed on June 9, 1993 by the
Wisconsin Supreme Court, which held that the filed-rate defense applied,
prohibiting plaintiffs from challenging in the courts rates that had been filed
with and approved by a regulatory agency. On August 17, 1993, the Wisconsin
Supreme Court denied plaintiffs' motion for reconsideration. On December 8,
1993, plaintiffs filed a petition for a writ of certiorari to the United States
Supreme Court, seeking review of the Wisconsin Supreme Court decision; this
petition was denied on February 22, 1994.
The only other currently pending action involving the same issues as
the FTC action is a federal case filed in the United States District Court for
the District of Arizona challenging rating-bureau activity in Arizona and
Wisconsin. That case was decided on motion in favor of the title insurers, but
the decision was reversed by the Ninth Circuit Court of Appeals, which held
that the defenses of res judicata and state-action immunity and the filed-rate
defense did not apply. A petition by the title insurers for rehearing en banc
was denied on March 17, 1993.
On June 15, 1993, the title insurers filed a petition for a writ of
certiorari to the United States Supreme Court,
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seeking review of the Ninth Circuit Court of Appeals decision. On October 1,
1993, the parties to the litigation entered into a memorandum of understanding
which outlined the terms of a settlement of such litigation. The memorandum of
understanding provided for a definitive written agreement and application for
the necessary approval of the District Court. On that date, the parties also
submitted a request to the United States Supreme Court that any action with
respect to the title insurers' petition for a writ of certiorari be deferred to
allow the District Court to consider the settlement reached by the parties.
Despite such request, the United States Supreme Court granted the title
insurers' petition on October 4, 1993. Thereafter, plaintiffs moved to defer
briefing and argument and, on October 22, 1993, the title insurers filed a
motion in opposition to plaintiffs' motion for such deferral. On November 1,
1993, the United States Supreme Court denied plaintiffs' motion, thus allowing
Supreme Court review to proceed. Argument before the Supreme Court took place
on March 1, 1994, and a decision is expected by the end of the current term of
the Court in early summer 1994. On March 3, 1994, the Ninth Circuit Court of
Appeals issued a limited mandate, in response to the parties' motion, to allow
the District Court to consider the fairness of the settlement.
The Stock Purchase Agreement between Alleghany and Lincoln National
Corporation, among other parties, dated as of June 18, 1985 (the "CT&T Stock
Purchase Agreement"), provides for the indemnification of Alleghany by Lincoln
National Corporation in respect of a portion of any liability resulting from
the foregoing FTC and private actions and in respect of certain other pending
or potential claims against CT&T and its subsidiaries.
B. Alleghany entered into a consent agreement with the FTC effective
July 22, 1991, which settled certain antitrust objections raised by the FTC in
respect of the acquisition of Ticor Title Insurance Company of California
("Ticor Title of California") by CT&T. The consent agreement provides for the
divestiture by CT&T after its acquisition of Ticor Title of California of (i)
one of the two title plants owned by subsidiaries of CT&T serving each of three
Illinois counties, three Indiana counties, two Washington counties and one
California county; and (ii) one of the two back plants owned by subsidiaries of
CT&T serving each of six California counties and one county in each of
Illinois, Indiana and Tennessee. A back plant is a title plant that is no
longer being updated on a daily or regular basis. For a period of ten years
from its effective date, the consent agreement prohibits Alleghany or any
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of its subsidiaries from acquiring an ownership interest or assets in certain
named title insurance companies, or in any entity that has a direct or indirect
ownership interest in a title plant or back plant that services the counties
with respect to which divestiture of such a plant was ordered, without the
prior approval of the FTC. For the same period, Alleghany or any of its
subsidiaries is required to give prior notification to the FTC of any
acquisitions of an ownership interest in a title plant or back plant serving
the same county as a plant already owned by Alleghany or any of its
subsidiaries. There is an exception to the prior approval or notice
requirements which generally would apply to acquisitions solely for the purpose
of investment of up to 3 percent of the shares of a publicly traded
corporation. Also, acquisitions of shares of a publicly traded corporation are
not subject to the prior approval or notice requirements solely by reason of
the ownership by such corporation of less than 5 percent of the shares of the
named title companies.
The consent agreement required divestiture of the plants by July 23,
1992, and provides that the FTC may appoint a trustee and seek civil penalties
and other relief if Alleghany failed to accomplish the divestitures by such
date. As of July 21, 1992, Alleghany had received the FTC's approval for
divestiture in four markets and had applications pending with respect to the
remaining fourteen markets. On that date, Alleghany submitted a motion to the
FTC to extend the time within which to complete the divestitures. On September
24, 1992, the FTC denied Alleghany's motion, advising that it had "not
determined whether, or what, enforcement action would be warranted for
[Alleghany's] failure to meet the July 23 deadline." As of the date hereof,
applications with respect to all markets have been approved by the FTC, and all
divestiture transactions have closed. On September 28, 1993, the staff of the
Bureau of Competition of the FTC invited Alleghany to "address why [the Bureau]
should not recommend that the [FTC] seek civil penalties, or what an
appropriate penalty might be. . . ." On December 10, 1993, Alleghany submitted
a response demonstrating its good faith in the fulfillment of its divestiture
obligations to support its position that no penalties should be imposed. The
staff of the Bureau of Competition subsequently informally advised Alleghany
that it will not recommend that the FTC seek any penalties.
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<PAGE> 79
C. Alleghany's subsidiaries and division are parties to pending
litigation and claims in connection with the ordinary course of their
businesses. Each such operating unit makes provision on its books, in
accordance with generally accepted accounting principles, for estimated losses
to be incurred in such litigation and claims, including legal costs. In the
opinion of management, such provision is adequate under generally accepted
accounting principles as of December 31, 1993.
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<PAGE> 80
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders during the
fourth quarter of 1993.
Supplemental Item.Executive Officers of Registrant.
The name, age, current position, date elected and five-year business
history of each executive officer of Alleghany are as follows:
<TABLE>
<CAPTION>
Current Business Experience
Name Age Position During Last 5 Years
- ---- --- -------- -------------------
<S> <C> <C> <C>
F.M. Kirby 74 Chairman of Chairman of the
the Board Board, Alleghany;
Chairman of the
Board and chief
executive officer,
Alleghany, prior
to July 1992.
John J. 62 President, President, chief
Burns, Jr. chief executive officer
executive and chief operating
officer officer, Alleghany
and chief since July 1992;
operating President and
officer chief operating
officer, Alleghany,
prior thereto.
David B. 61 Senior Vice Senior Vice
Cuming President President and
and chief chief financial
financial officer, Alleghany,
officer since December 1989;
Vice President,
Alleghany, prior
thereto.
</TABLE>
-80-
<PAGE> 81
<TABLE>
<CAPTION>
Current Business Experience
Name Age Position During Last 5 Years
- ---- --- -------- -------------------
<S> <C> <C> <C>
Richard P. 57 Senior Vice Senior Vice
Toft President; President, Alleghany,
Chairman, since March 1990;
President and Chairman, President
Chief Executive and Chief Executive
Officer, CT&T; Officer, CT&T, since
Chairman, Chicago January 1994;
Title Insurance President and Chief
Company Executive Officer,
CT&T, prior thereto;
Chairman, Chicago
Title Insurance
Company, since January
1994; Chairman and
Chief Executive
Officer, Chicago Title
Insurance Company,
prior thereto.
Theodore E. 53 Vice President Vice President and
Somerville and General General Counsel,
Counsel Alleghany.
John E. Conway 62 Vice President, Vice President,
Secretary and Secretary and
Treasurer Treasurer, Alleghany.
Peter R. Sismondo 38 Vice President, Vice President,
Controller, Controller,
Assistant Assistant Secretary
Secretary and and principal
principal accounting officer,
accounting Alleghany, since
officer December 1989;
Controller and
Assistant Secretary,
Alleghany, prior
thereto.
</TABLE>
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<PAGE> 82
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
The information required by this Item 5 is incorporated by reference
from page 21 of Alleghany's Annual Report to Stockholders for the year 1993,
dated March 15, 1994, filed as Exhibit 13 hereto.
Item 6. Selected Financial Data.
The information required by this Item 6 is incorporated by reference
from page 21 of Alleghany's Annual Report to Stockholders for the year 1993,
dated March 15, 1994, filed as Exhibit 13 hereto.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The information required by this Item 7 is incorporated by reference
from pages 2 and 3, from pages 6 through 16, and from pages 22 and 23, of
Alleghany's Annual Report to Stockholders for the year 1993, dated March 15,
1994, filed as Exhibit 13 hereto.
Item 8. Financial Statements and Supplementary Data.
The information required by this Item 8 is incorporated by reference
from pages 24 through 45 of Alleghany's Annual Report to Stockholders for the
year 1993, dated March 15, 1994, filed as Exhibit 13 hereto.
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
Not applicable.
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<PAGE> 83
PART III
Item 10. Directors and Executive Officers of Registrant.
As permitted by General Instruction G(3), information concerning the
executive officers of Alleghany is set forth as a supplemental item included in
Part I of this Form 10-K Report under the caption "Executive Officers of
Registrant." Information concerning the directors of Alleghany is incorporated
by reference from pages 5 through 8 of Alleghany's Proxy Statement dated March
28, 1994, filed or to be filed in connection with its Annual Meeting of
Stockholders to be held on April 22, 1994. Information concerning compliance
with the reporting requirements under Section 16 of the Securities Exchange Act
of 1934, as amended, is incorporated by reference from page 3 of Alleghany's
Proxy Statement dated March 28, 1994, filed or to be filed in connection with
its Annual Meeting of Stockholders to be held on April 22, 1994.
Item 11. Executive Compensation.
The information required by this Item 11 is incorporated by reference
from pages 11 through 24 of Alleghany's Proxy Statement dated March 28, 1994,
filed or to be filed in connection with its Annual Meeting of Stockholders to be
held on April 22, 1994. The information set forth beginning on page 25 through
the first paragraph on page 33 of Alleghany's Proxy Statement dated March 28,
1994, filed or to be filed in connection with its Annual Meeting of Stockholders
to be held on April 22, 1994, is not "filed" as a part hereof.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The information required by this Item 12 is incorporated by reference
from pages 1 through 4, and from pages 9 and 10, of Alleghany's Proxy Statement
dated March 28, 1994, filed or to be filed in connection with its Annual
Meeting of Stockholders to be held on April 22, 1994.
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<PAGE> 84
Item 13. Certain Relationships and Related Transactions.
The information required by this Item 13 is incorporated by reference
from page 24 of Alleghany's Proxy Statement dated March 28, 1994, filed or to
be filed in connection with its Annual Meeting of Stockholders to be held on
April 22, 1994.
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<PAGE> 85
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K.
(a) 1. Financial Statements.
The consolidated financial statements of Alleghany and subsidiaries,
together with the report thereon of KPMG Peat Marwick, independent certified
public accountants, are incorporated by reference from the Annual Report to
Stockholders for the year 1993, dated March 15, 1994, into Item 8 of this
Report.
2. Financial Statement Schedules.
The schedules relating to the consolidated financial statements of
Alleghany and subsidiaries, together with the report thereon of KPMG Peat
Marwick, independent certified public accountants, are detailed in a separate
index herein.
3. Exhibits.
The following are filed as exhibits to this Report:
Exhibit Number Description
3.01 Restated Certificate of Incorporation of Alleghany, as
amended by Amendment accepted and received for filing
by the Secretary of State of the State of Delaware on
June 23, 1988, filed as Exhibit 20 to Alleghany's
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1988, is incorporated herein by reference.
3.02 By-Laws of Alleghany as amended July 1, 1992, filed as
Exhibit 3.02 to Alleghany's Quarterly Report on Form
10-Q for the quarter ended June 30, 1992, is
incorporated herein by reference.
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<PAGE> 86
4.01 Indenture dated as of June 15, 1989 between Alleghany
and Pittsburgh National Bank, as Trustee, relating to
the 6-1/2% Subordinated Exchangeable Debentures due
June 15, 2014 (the "Debentures"), including the form of
Debenture, filed as Exhibit 4.1 to Alleghany's
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1989, is incorporated herein by reference.
4.02 Escrow Agreement dated as of June 15, 1989 between
Alleghany and Pittsburgh National Bank, as Escrow
Agent, for the escrow of common shares of American
Express Company for which the Debentures are
exchangeable, filed as Exhibit 4.2 to Alleghany's
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1989, is incorporated herein by reference.
*10.01 Description of Alleghany Management Incentive Plan.
*10.02(a) Agreement dated as of December 22, 1993 between
Alleghany and David B. Cuming. Agreements dated as of
December 22, 1993 between Alleghany and each of F.M.
Kirby, John J. Burns, Jr., Richard P. Toft, Theodore E.
Somerville, John E. Conway and Peter R. Sismondo are
omitted pursuant to Instruction 2 of Item 601 of
Regulation S-K.
*10.02(b) Agreement dated as of December 15, 1993 between CT&T
and Richard P. Toft.
*10.03 Alleghany Corporation Deferred Compensation Plan as
amended and restated as of December 15, 1992, filed as
Exhibit 10.03 to Alleghany's Annual Report on Form 10-K
for the year ended December 31, 1992, is incorporated
herein by reference.
- ----------------------
* Compensatory plan or arrangement.
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<PAGE> 87
*10.04(a) Alleghany 1983 Long-Term Incentive Plan as adopted on
March 16, 1983, filed as Exhibit 10.24 to the Annual
Report on Form 10-K of Alleghany Corporation, a
Maryland corporation and the predecessor of Alleghany
("Old Alleghany"), for the year ended December 31,
1982, is incorporated herein by reference.
*10.04(b) Description of amendments to the Alleghany 1983
Long-Term Incentive Plan as adopted on December 30,
1986, filed as Exhibit 10.05(b) to Alleghany's Annual
Report on Form 10-K for the year ended December 31,
1986, is incorporated herein by reference.
*10.05 Alleghany 1993 Long-Term Incentive Plan adopted and
effective as of January 1, 1993, filed as Exhibit 10.05
to Alleghany's Annual Report on Form 10-K for the year
ended December 31, 1992, is incorporated herein by
reference.
*10.06 Alleghany Supplemental Death Benefit Plan dated as of
May 15, 1985 and effective as of January 1, 1985, filed
as Exhibit 10.08 to Old Alleghany's Annual Report on
Form 10-K for the year ended December 31, 1985, is
incorporated herein by reference.
*10.07(a) Alleghany Retirement Plan effective as of January 1,
1989, as adopted on April 18, 1989, filed as Exhibit
10.2 to Alleghany's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1989, is incorporated
herein by reference.
10.07(b) Trust Agreement dated as of January 1, 1989 between
Alleghany and Bankers Trust Company, filed as Exhibit
10.5(b) to Alleghany's Annual Report on Form 10-K for
the year ended December 31, 1991, is incorporated
herein by reference.
- --------------------
* Compensatory plan or arrangement.
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<PAGE> 88
*10.08 Alleghany Retirement COLA Plan dated and effective as
of January 1, 1992, as adopted on March 17, 1992, filed
as Exhibit 10.7 to Alleghany's Annual Report on Form
10-K for the year ended December 31, 1991, is
incorporated herein by reference.
*10.09(a) Alleghany Directors' Stock Option Plan dated as of June
17, 1987 and effective as of April 22, 1988, filed as
Exhibit 10.07 to Alleghany's Annual Report on Form 10-K
for the year ended December 31, 1987, is incorporated
herein by reference.
*10.09(b) Amendment to Alleghany Directors' Stock Option Plan
effective as of April 29, 1991, filed as Exhibit 10.3
to Alleghany's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1991, is incorporated herein by
reference.
*10.09(c) Alleghany Amended and Restated Directors' Stock Option
Plan effective as of April 20, 1993 (provided that
options granted thereunder prior to the approval of
Alleghany's stockholders are conditioned upon such
approval), filed as Exhibit 10.1 to Alleghany's
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1993, is incorporated herein by reference.
*10.10 Alleghany Non-Employee Directors' Retirement Plan
effective July 1, 1990, filed as Exhibit 10.1 to
Alleghany's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1990, is incorporated herein by
reference.
- --------------------
* Compensatory plan or arrangement.
-88-
<PAGE> 89
*10.11(a) Employment Agreement dated as of January 1, 1992, and
Amendment to Employment Agreement dated as of January
1, 1993, among CT&T, Alleghany and Richard P. Toft,
filed as Exhibit 10.12 to Alleghany's Annual Report on
Form 10-K for the year ended December 31, 1992, is
incorporated herein by reference.
*10.11(b) Second Amendment to Employment Agreement dated as of
January 1, 1994, among CT&T, Alleghany and Richard P.
Toft.
*10.12 Split/Owner "Split Dollar" Life Insurance Plan
Assignment dated March 19, 1986 by and between Richard
P. Toft and CT&T, filed as Exhibit 10.10(c) to
Alleghany's Annual Report on Form 10-K for the year
ended December 31, 1991, is incorporated herein by
reference.
*10.13 Description of CT&T Presidents' Plan, adopted and
effective as of July 1, 1985 and as amended as of
January 26, 1993, filed as Exhibit 10.14 to Alleghany's
Annual Report on Form 10-K for the year ended December
31, 1992, is incorporated herein by reference.
*10.14 CT&T Performance Unit Incentive Plan, adopted and
effective as of July 1, 1985, restated as the CT&T
Performance Unit Incentive Plan of 1989, effective as
of July 1, 1990, filed as Exhibit 10.12 to Alleghany's
Annual Report on Form 10-K for the year ended December
31, 1990, is incorporated herein by reference.
*10.15 CT&T Executive Performance Unit Incentive Plan of 1992,
adopted and effective as of January 1, 1992, as amended
and restated effective January 1, 1993.
- -------------------
* Compensatory plan or arrangement.
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<PAGE> 90
*10.16 Description of CT&T Quality Business Management
Incentive Program for the Presidents of CT&T and
Chicago Title Insurance Company, effective as of
January 1, 1989, as amended as of January 1, 1992.
*10.17 CT&T Stock Purchase Plan for Key Employees effective as
of April 6, 1989, as adopted on March 17, 1989, filed
as Exhibit 10.13 to Alleghany's Annual Report on Form
10-K for the year ended December 31, 1990, is
incorporated herein by reference.
*10.18 CT&T Executive Salary Continuation Plan effective as of
January 1, 1979, as adopted on August 23, 1978, filed
as Exhibit 10.15 to Alleghany's Annual Report on Form
10-K for the year ended December 31, 1990, is
incorporated herein by reference.
*10.19(a) Description of compensatory arrangement between
Alleghany Financial Inc. and Paul F. Woodberry filed as
Exhibit 10.19(a) to Alleghany's Annual Report on Form
10-K for the year ended December 31, 1992, is
incorporated herein by reference.
*10.19(b) Description of compensatory arrangement between
Alleghany and Paul F. Woodberry.
10.20 Revolving Credit Loan Agreement dated as of July 9,
1991 among Alleghany, Chemical Bank and Manufacturers
Hanover Trust Company, filed as Exhibit 10.1 to
Alleghany's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1991, is incorporated herein by
reference.
- --------------------
* Compensatory plan or arrangement.
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<PAGE> 91
10.21(a) Stock Purchase Agreement dated as of June 18, 1985 by
and among Old Alleghany, Alleghany, Alleghany Capital
Corporation and Lincoln National Corporation (the CT&T
Stock Purchase Agreement"), filed as Exhibit (2)(i) to
Old Alleghany's Current Report on Form 8-K dated July
11, 1985, is incorporated herein by reference.
10.21(b) List of Contents of Schedules to the CT&T Stock
Purchase Agreement, filed as Exhibit (2)(ii) to Old
Alleghany's Current Report on Form 8-K dated July 11,
1985, is incorporated herein by reference.
10.21(c) Amendment No. 1 dated December 20, 1985 to the CT&T
Stock Purchase Agreement, filed as Exhibit 10.12(c) to
Old Alleghany's Annual Report on Form 10-K for the year
ended December 31, 1985, is incorporated herein by
reference.
10.22 Distribution Agreement dated as of May 1, 1987 between
Alleghany and MSL Industries, Inc., filed as Exhibit
10.21 to Alleghany's Annual Report on Form 10-K for the
year ended December 31, 1987, is incorporated herein by
reference.
10.23 Amendment to Distribution Agreement dated June 29,
1987, effective as of May 1, 1987, between Alleghany
and MSL Industries, Inc., filed as Exhibit 10.22 to
Alleghany's Annual Report on Form 10-K for the year
ended December 31, 1987, is incorporated herein by
reference.
10.24 Tax Sharing Agreement dated as of May 1, 1987 between
Alleghany and MSL Industries, Inc., filed as Exhibit
10.24 to Alleghany's Annual Report on Form 10-K for the
year ended December 31, 1987, is incorporated herein by
reference.
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<PAGE> 92
10.25 Voting and Disposition Rights/Dividend Agreement dated
November 1, 1989 by and between Alleghany, Alleghany
Financial Inc. and the Office of Thrift Supervision in
connection with the acquisition of Sacramento Savings,
filed as Exhibit 10.25 to Alleghany's Annual Report on
Form 10-K for the year ended December 31, 1989, is
incorporated herein by reference.
10.26(a) Loan Agreement dated as of April 30, 1990 between
Alleghany Financial Inc. and The Chase Manhattan Bank
(National Association), filed as Exhibit 10.1 to
Alleghany's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1990, is incorporated herein by
reference.
10.26(b) Amendment No. 1 to Loan Agreement dated as of May 1,
1993, between Alleghany Financial Inc. and The Chase
Manhattan Bank (National Association), filed as Exhibit
10.2(a) to Alleghany's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1993, is incorporated
herein by reference.
10.26(c) Pledge Agreement dated as of April 30, 1990 between
Alleghany Financial Inc. and The Chase Manhattan Bank
(National Association), filed as Exhibit 10.2 to
Alleghany's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1990, is incorporated herein by
reference.
10.26(d) Amendment No. 1 to Pledge Agreement dated as of May 1,
1993 between Alleghany Financial Inc. and The Chase
Manhattan Bank (National Association), filed as Exhibit
10.2(b) to Alleghany's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1993, is incorporated
herein by reference.
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<PAGE> 93
10.26(e) Collateral Account Agreement dated as of May 1, 1993
between Alleghany Financial Inc. and the Chase
Manhattan Bank (National Association), filed as Exhibit
10.2(c) to Alleghany's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1993 is incorporated
herein by reference.
10.27(a) Installment Sales Agreement dated December 8, 1986 by
and among Alleghany, Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Merrill Lynch & Co., Inc., filed
as Exhibit 10.10 to Alleghany's Annual Report on Form
10-K for the year ended December 31, 1986, is
incorporated herein by reference.
10.27(b) Intercreditor and Collateral Agency Agreement dated as
of August 1, 1990 among Manufacturers Hanover Trust
Company, Barclays Bank PLC and Alleghany Funding
Corporation, filed as Exhibit 10.1 to Alleghany's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1990, is incorporated herein by
reference.
10.27(c) Interest Rate and Currency Exchange Agreement dated as
of August 14, 1990 between Barclays Bank PLC and
Alleghany Funding Corporation, and related Confirmation
dated August 13, 1990 between Barclays Bank PLC and
Alleghany Funding Corporation, filed as Exhibit 10.2 to
Alleghany's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1990, are incorporated
herein by reference.
10.27(d) Indenture dated as of August 1, 1990 between Alleghany
Funding Corporation and Manufacturers Hanover Trust
Company, filed as Exhibit 10.3 to Alleghany's Quarterly
Report on Form 10-Q for the quarter ended September 30,
1990, is incorporated herein by reference.
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<PAGE> 94
10.28(a) Acquisition Agreement dated as of November 29, 1990 by
and between CT&T and Westwood Equities Corporation (the
"Ticor Acquisition Agreement"), filed as Exhibit (2)(i)
to Alleghany's Current Report on Form 8-K dated
December 21, 1990, is incorporated herein by reference.
10.28(b) List of Contents of Schedules to the Ticor Acquisition
Agreement, filed as Exhibit 2(ii) to Alleghany's
Current Report on Form 8-K dated December 21, 1990, is
incorporated herein by reference.
10.28(c) Amendment to the Ticor Acquisition Agreement dated as
of January 9, 1991 by and between CT&T and Westwood
Equities Corporation, filed as Exhibit (2)(iii) to
Alleghany's Current Report on Form 8-K dated March 21,
1991, is incorporated herein by reference.
10.28(d) Amended and Restated Credit Agreement dated as of
December 30, 1993 among CT&T, certain commercial
lending institutions and Continental Bank, N.A. as
agent.
10.28(e) Letter Agreement dated May 2, 1991 between CT&T and
Continental Bank, N.A. relating to an interest rate
swap effective May 6, 1991, filed as Exhibit 10.2 to
Alleghany's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1991, is incorporated herein by
reference.
10.29(a) Stock Purchase Agreement dated as of July 1, 1991 among
Celite Holdings Corporation, Celite Corporation and
Manville International, B.V. (the "Celite Stock
Purchase Agreement"), filed as Exhibit 10.2(a) to
Alleghany's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1991, is incorporated herein by
reference.
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<PAGE> 95
10.29(b) List of Contents of Exhibits and Schedules to the
Celite Stock Purchase Agreement, filed as Exhibit
10.2(b) to Alleghany's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1991, is incorporated
herein by reference.
10.30(a) Joint Venture Stock Purchase Agreement dated as of July
1, 1991 among Celite Holdings Corporation, Celite
Corporation and Manville Corporation (the "Celite Joint
Venture Stock Purchase Agreement"), filed as Exhibit
10.3(a) to Alleghany's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1991, is incorporated
herein by reference.
10.30(b) List of Contents of Exhibits and Schedules to the
Celite Joint Venture Stock Purchase Agreement, filed as
Exhibit 10.3(b) to Alleghany's Quarterly Report on Form
10-Q for the quarter ended June 30, 1991, is
incorporated herein by reference.
10.31(a) Asset Purchase Agreement dated as of July 1, 1991 among
Celite Holdings Corporation, Celite Corporation and
Manville Sales Corporation (the "Celite Asset Purchase
Agreement"), filed as Exhibit 10.4(a) to Alleghany's
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1991, is incorporated herein by reference.
10.31(b) List of Contents of Exhibits and Schedules to the
Celite Asset Purchase Agreement, filed as Exhibit
10.4(b) to Alleghany's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1991, is incorporated
herein by reference.
10.31(c) Amendment No. 1 dated as of July 31, 1991 to the Celite
Asset Purchase Agreement, filed as Exhibit 10.32(c) to
Alleghany's Annual Report on Form 10-K for the year
ended December 31, 1991, is incorporated herein by
reference.
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<PAGE> 96
10.32(a) Acquisition Related Agreement dated as of July 1, 1991,
by and between Celite Holdings Corporation, Celite
Corporation and Manville Corporation (the "Celite
Acquisition Related Agreement"), filed as Exhibit
10.5(a) to Alleghany's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1991, is incorporated
herein by reference.
10.32(b) List of Contents of Exhibits to the Celite Acquisition
Related Agreement, filed as Exhibit 10.5(b) to
Alleghany's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1991, is incorporated herein by
reference.
10.32(c) Amendment dated as of July 31, 1991 to Celite
Acquisition Related Agreement, filed as Exhibit
10.33(c) to Alleghany's Annual Report on Form 10-K for
the year ended December 31, 1991, is incorporated
herein by reference.
10.33(a) Credit Agreement dated as of December 20, 1991 among
Celite Holdings Corporation, Celite, Bank of America
National Trust and Savings Association and Chemical
Bank (the "Celite Credit Agreement"), filed as Exhibit
10.35(a) to Alleghany's Annual Report on Form 10-K for
the year ended December 31, 1991, is incorporated
herein by reference.
10.33(b) List of Contents of Exhibits and Annexes to the Celite
Credit Agreement which are not being filed herewith,
filed as Exhibit 10.35(b) to Alleghany's Annual Report
on Form 10-K for the year ended December 31, 1991, is
incorporated herein by reference.
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<PAGE> 97
10.33(c) Amendment No. 1 dated January 24, 1992 to the Celite
Credit Agreement, filed as Exhibit 10.36 to Alleghany's
Annual Report on Form 10-K for the year ended December
31, 1991, is incorporated herein by reference.
10.33(d) Letter Agreement dated January 23, 1992 between Celite
and Bank of America National Trust and Savings
Association relating to an interest rate swap effective
January 16, 1992, filed as Exhibit 10.37 to Alleghany's
Annual Report on Form 10-K for the year ended December
31, 1991, is incorporated herein by reference.
10.33(e) Letter Agreement dated January 13, 1992 between Celite
and Chemical Bank relating to an interest rate swap
effective January 13, 1992, filed as Exhibit 10.38 to
Alleghany's Annual Report on Form 10-K for the year
ended December 31, 1991, is incorporated herein by
reference.
10.34(a) Note Purchase Agreement dated September 24, 1991 among
Armco Inc., Alleghany and certain of its subsidiaries
(the "Note Purchase Agreement"), filed as Exhibit
10.39(a) to Alleghany's Annual Report on Form 10-K for
the year ended December 31, 1991, is incorporated
herein by reference.
10.34(b) Amendment dated as of March 17, 1992 to the Note
Purchase Agreement, filed as Exhibit 10.39(b) to
Alleghany's Annual Report on Form 10-K for the year
ended December 31, 1991, is incorporated herein by
reference.
10.34(c) Agreement dated as of September 24, 1991 among Armco
Inc., Cyac Inc. and Alleghany (the "Voting Agreement"),
filed as Exhibit 10.39(c) to Alleghany's Annual Report
on Form 10-K for the year ended December 31, 1991, is
incorporated herein by reference.
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<PAGE> 98
10.34(d) Amendment dated as of March 17, 1992 to the Voting
Agreement, filed as Exhibit 10.39(d) to Alleghany's
Annual Report on Form 10-K for the year ended December
31, 1991, is incorporated herein by reference.
10.34(e) Standstill Agreement dated as of September 24, 1991
between Armco Inc. and Alleghany (the "Standstill
Agreement"), filed as Exhibit 10.39(e) to Alleghany's
Annual Report on Form 10-K for the year ended December
31, 1991, is incorporated herein by reference.
10.34(f) Amendment dated as of March 17, 1992 to the Standstill
Agreement, filed as Exhibit 10.39(f) to Alleghany's
Annual Report on Form 10-K for the year ended December
31, 1991, is incorporated herein by reference.
10.34(g) Amendment No. 2 dated as of April 24, 1992 to the
Standstill Agreement, as amended as of March 17, 1992,
filed as Exhibit 10.1 to Alleghany's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1992, is
incorporated herein by reference.
10.35(a) Stock Purchase Agreement dated as of October 31, 1991
among Associated Insurance Companies, Inc., Alleghany
and The Shelby Insurance Group, Inc. (the "Shelby Stock
Purchase Agreement"), filed as Exhibit 10.1(a) to
Alleghany's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1991, is incorporated
herein by reference.
10.35(b) List of Contents of Exhibits and Schedules to the
Shelby Stock Purchase Agreement, filed as Exhibit
10.1(b) to Alleghany's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1991, is
incorporated herein by reference.
-98-
<PAGE> 99
10.36(a) Stock Purchase Agreement dated as of July 28, 1993 (the
"Underwriters Reinsurance Stock Purchase Agreement")
among Alleghany, The Continental Corporation, Goldman,
Sachs & Co. and certain funds which Goldman, Sachs &
Co. either control or of which they are general
partner, Underwriters Re Holdings Corp. and
Underwriters Re Corporation, filed as Exhibit 10.3(a)
to Alleghany's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993, is incorporated herein by
reference.
10.36(b) List of Contents of Exhibits and Schedules to the
Underwriters Reinsurance Stock Purchase Agreement,
filed as Exhibit 10.3(b) to Alleghany's Quarterly
Report on Form 10-Q for the quarter ended June 30,
1993, is incorporated herein by reference.
10.36(c) Stock Purchase Related Agreement dated as of July 28,
1993 (the "Underwriters Re Stock Purchase Related
Agreement") among certain persons named therein and
Alleghany, filed as Exhibit 10.3(c) to Alleghany's
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1993, is incorporated herein by reference.
10.36(d) List of Exhibits and Schedules to the Underwriters Re
Stock Purchase Related Agreement, filed as Exhibit
10.3(d) to Alleghany's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1993, is incorporated
herein by reference.
10.36(e) Supplement to Underwriters Re Stock Purchase Related
Agreement dated as of August 12, 1993 among certain
persons named therein and Alleghany, filed as Exhibit
10.1(a) to Alleghany's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1993, is
incorporated herein by reference.
-99-
<PAGE> 100
10.36(f) Amendment to Underwriters Re Stock Purchase Related
Agreement made as of October 7, 1993 among certain
persons named therein and Alleghany, filed as Exhibit
10.1(b) to Alleghany's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1993, is
incorporated herein by reference.
13 Pages 2 and 3, pages 6 through 16, and pages 21 through
45 of the Annual Report to Stockholders of Alleghany
for the year 1993, dated March 15, 1994.
21 List of subsidiaries of Alleghany.
23 Consent of KPMG Peat Marwick, independent certified
public accountants, to the incorporation by reference
of their reports relating to the financial statements
and related schedules of Alleghany and subsidiaries in
the prospectus contained in the Registration Statement
on Form S-8 of Alleghany (Registration No. 27598).
28 Information from reports furnished to state regulatory
authorities by Underwriters Reinsurance Company and
Commercial Underwriters Insurance Company.
(b) Reports on Form 8-K.
Alleghany filed a report on Form 8-K dated October 22, 1993, and an
amendment thereto dated December 20, 1993, to report in Item 2 that, on October
7, 1993, Alleghany acquired approximately 93 percent of the issued and
outstanding capital stock of a holding company which owns all of the issued and
outstanding capital stock of Underwriters, and to furnish pursuant to Item 7
the required financial statements relating to such acquisition.
-100-
<PAGE> 101
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
ALLEGHANY CORPORATION
------------------------------
(Registrant)
Date: March 28, 1994 By /s/ John J. Burns, Jr.
-------------- ---------------------------
John J. Burns, Jr.
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: March 28, 1994 By /s/ John J. Burns, Jr.
-------------- ---------------------------
John J. Burns, Jr.
President and Director
(principal executive
officer)
Date: March 28, 1994 By /s/ Dan R. Carmichael
-------------- --------------------------
Dan R. Carmichael
Director
Date: March 28, 1994 By /s/ David B. Cuming
-------------- ---------------------------
David B. Cuming
Senior Vice President
(principal financial
officer)
Date: March 28, 1994 By /s/ Allan P. Kirby, Jr.
-------------- ---------------------------
Allan P. Kirby, Jr.
Director
-101-
<PAGE> 102
Date: March 28, 1994 By /s/ F.M. Kirby
-------------- ---------------------------
F.M. Kirby
Chairman of the Board
and Director
Date: March 28, 1994 By /s/ William K. Lavin
-------------- ---------------------------
William K. Lavin
Director
Date: March 28, 1994 By /s/ Peter R. Sismondo
-------------- ---------------------------
Peter R. Sismondo
Vice President, Controller
and Assistant Secretary
(principal accounting
officer)
Date: March 28, 1994 By /s/ John E. Tobin
-------------- ---------------------------
John E. Tobin
Director
Date: March 28, 1994 By /s/ James F. Will
-------------- ---------------------------
James F. Will
Director
Date: March 28, 1994 By /s/ Paul F. Woodberry
-------------- ---------------------------
Paul F. Woodberry
Director
Date: March 28, 1994 By /s/ S. Arnold Zimmerman
-------------- ---------------------------
S. Arnold Zimmerman
Director
-102-
<PAGE> 103
ALLEGHANY CORPORATION
AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENT SCHEDULES
I MARKETABLE SECURITIES
III CONDENSED FINANCIAL INFORMATION OF
REGISTRANT
V SUPPLEMENTARY INSURANCE INFORMATION
VI REINSURANCE
XIV SUPPLEMENTAL PROPERTY AND CASUALTY
INSURANCE INFORMATION
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULES
All other schedules are omitted since they are not required, are not
applicable, or the required information is set forth in the financial
statements or notes thereto.
<PAGE> 104
SCHEDULE I
ALLEGHANY CORPORATION AND SUBSIDIARIES
MARKETABLE SECURITIES
DECEMBER 31, 1993
(in thousands)
<TABLE>
<CAPTION>
Face Value Market Carrying
or Shares Cost Value Value
-----------------------------------------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS:
Chicago Title and Trust Company $222,343 $219,323 $226,177 $226,177
Sacramento Savings Bank 555,868 559,343 560,403 559,808
Underwriters Re 173,413 187,249 187,210 187,210
-----------------------------------------------
Total U.S. Government and Government Agency Obligations 951,624 965,915 973,790 973,195
-----------------------------------------------
MUNICIPAL OBLIGATIONS:
Chicago Title and Trust Company 95,345 96,356 97,491 97,491
Underwriters Re
California 22,510 22,992 23,079 23,079
Florida 19,300 20,223 20,230 20,230
Illinois 14,750 15,668 15,722 15,722
Louisiana 11,805 13,071 13,028 13,028
Minnesota 10,500 11,783 11,742 11,742
New Jersey 12,000 12,947 12,898 12,898
New York 27,105 28,612 28,694 28,694
North Carolina 10,040 10,118 10,041 10,041
Texas 52,465 56,097 56,295 56,295
Virginia 11,280 11,703 11,838 11,838
Washington 24,165 25,036 25,179 25,179
Other 103,755 110,351 110,633 110,633
------------------------------------------------
Total Municipal Bonds 415,020 434,957 436,870 436,870
-----------------------------------------------
Total U.S. Government, Government Agency and Municipal Obligations $1,366,644 1,400,872 1,410,660 1,410,065
=============----------------------------------
EQUITY SECURITIES:
Chicago Title and Trust Company 5,551 50,908 50,680 50,680
Sacramento Savings Bank 947 5,209 5,799 5,799
Underwriters Re 1,669 18,577 19,552 19,552
Alleghany Corporation 2,702 38,384 68,585 68,585
-----------------------------------------------
Total Equity Securities 10,869 113,078 144,616 144,616
============-----------------------------------
CERTIFICATES OF DEPOSIT:
Chicago Title and Trust Company
Maturing January 1, 1994 through August 15, 1995 at 2.27% to 5.75% $2,243 $2,243 $2,243 $2,243
Heads and Threads division
Maturing January 3, 1994 at 2.75% 1,035 1,035 1,035 1,035
-----------------------------------------------
Total Certificates of Deposit $3,278 3,278 3,278 3,278
============-----------------------------------
COMMERCIAL PAPER:
Chicago Title and Trust Company $76,950 $76,950 $76,950 $76,950
Underwriters Re 63,602 63,602 63,602 63,602
-----------------------------------------------
Total Commercial Paper $140,552 140,552 140,552 140,552
============-----------------------------------
SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL:
Sacramento Savings Bank $75,091 75,091 75,091 75,091
============-----------------------------------
BONDS, NOTES AND OTHER:
Chicago Title and Trust Company
Redeemable Preferred Stock 655,400 9,837 10,276 10,276
Foreign Bonds 334 340 330 330
Corporate Bonds
Albertsons, Inc. Medium Term Note 4,000 4,000 4,014 4,014
Bankamerica Corporation Medium Term Note 3,500 3,485 3,576 3,576
Beneficial Corporation Medium Term Note 4,000 4,014 4,088 4,088
Chrysler Financial Corporation 3,750 3,768 3,840 3,840
Daimler-Benz Auto Tr Serial 93-A CL 4,125 4,120 4,099 4,099
Dean Witter Discover Note 4,000 4,005 4,064 4,064
Dresser Industries Deben Note 4,500 4,500 4,597 4,597
GM Hughes Electronics 5,000 5,000 5,020 5,020
Phillip Morris Corporation 4,500 4,654 4,816 4,816
Sara Lee Corporation Medium Term Notes 4,750 4,835 4,718 4,718
Shell Oil Company Note 4,000 4,133 4,160 4,160
Transamerica Financial Group Subordinated Note 4,750 4,750 5,129 5,129
Union Pacific Railroad Equipment trust 4,500 4,645 4,711 4,711
U.S. Leasing Debentures 4,500 4,476 4,722 4,722
Other 118,240 120,969 124,689 124,689
Underwriters Re
Preferred Sinking Fund Stock 16,337 16,292 16,247 16,247
Corporate Bonds 19,258 113,148 111,930 111,930
Foreign Bonds 30,328 32,770 32,171 32,171
World Minerals Inc.
Other 6,562 6,562 6,562 6,562
Alleghany Corporation
Other 11,630 11,630 11,630 11,630
Alleghany Capital Corporation
Other 5,432 5,432 5,432 5,432
-----------------------------------------------
Total Bonds, Notes and Other $923,396 377,365 380,821 380,821
============-----------------------------------
TOTAL MARKETABLE SECURITIES $2,110,236 $2,155,018 $2,154,423
===================================
</TABLE>
<PAGE> 105
SCHEDULE III
ALLEGHANY CORPORATION
CONDENSED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
(in thousands)
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
ASSETS
Investment securities
(Cost: 1993, $51,049; fair value: 1992, $128,351) $81,250 $107,438
Cash 2,456 2,154
Accounts and other receivables, less allowances 11,828 6,668
Property and equipment - at cost, less accumulated depreciation 2,523 2,629
Other assets 28,141 30,141
Investment in Sacramento Savings 200,338 189,645
Investment in other consolidated subsidiaries 741,509 609,894
----------- ------------
$1,068,045 $948,569
=========== ============
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Other liabilities $73,588 $73,578
Long-term debt 78,723 78,723
----------- ------------
Total liabilities 152,311 152,301
Commitments and contingent liabilities
Common stockholders' equity 915,734 796,268
----------- ------------
$1,068,045 $948,569
=========== ============
</TABLE>
See accompanying Notes to Condensed Financial Statements.
<PAGE> 106
SCHEDULE III
ALLEGHANY CORPORATION
CONDENSED STATEMENTS OF EARNINGS
THREE YEARS ENDED DECEMBER 31, 1993
(in thousands)
<TABLE>
<CAPTION>
1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
Revenues:
Interest, dividend and other income $55,305 $55,526 $56,351
Net gain (loss) on investment transactions 13,376 4,864 (7,132)
---------- ---------- ----------
Total revenues 68,681 60,390 49,219
---------- ---------- ----------
Costs and Expenses:
Interest expense 6,401 6,922 13,592
General and administrative 64,888 59,143 57,865
---------- ---------- ----------
Total costs and expenses 71,289 66,065 71,457
---------- ---------- ----------
Operating income (loss) (2,608) (5,675) (22,238)
Equity in earnings of consolidated subsidiaries 121,735 125,308 58,638
---------- ---------- ----------
Earnings from continuing operations, before income taxes 119,127 119,633 36,400
Income taxes 21,575 55,941 14,675
---------- ---------- ----------
Earnings from continuing operations 97,552 63,692 21,725
Discontinued operations:
Earnings from discontinued operations, net of tax in 1990 0 0 11,180
Gain on sale of Shelby, net of tax 0 0 31,068
---------- ---------- ----------
Earnings before cumulative effect of a change in
accounting for income taxes 97,552 63,692 63,973
Cumulative effect on prior years of a change in
accounting for income taxes 0 3,760 0
Equity in cumulative effect on prior years of a change in
accounting for income taxes of consolidated subsidiaries 0 5,385 0
---------- ---------- ----------
Net earnings $97,552 $72,837 $63,973
========== ========== ==========
</TABLE>
See accompanying Notes to Condensed Financial Statements.
<PAGE> 107
SCHEDULE III
ALLEGHANY CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 1993
(in thousands)
<TABLE>
<CAPTION>
1993 1992 1991
---------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Earnings from continuing operations $97,552 $63,692 $21,725
Adjustments to reconcile earnings from continuing operations
to cash provided by (used in) continuing operations:
Depreciation and amortization 731 696 666
Net (gain) loss on investment transactions (13,376) (4,864) 7,132
(Increase) decrease in accounts and other receivables,
less allowances (5,160) (522) 7,219
Decrease (increase) in other assets 1,573 637 (3,436)
Decrease (increase) in other liabilities (20,407) (16,905) 9,535
Equity in net earnings of consolidated subsidiaries (79,679) (77,249) (35,476)
---------------------------------
Net adjustments (116,318) (98,207) (14,360)
---------------------------------
Cash (used in) provided by continuing operations (18,766) (34,515) 7,365
Earnings from discontinued operations 0 0 11,180
---------------------------------
Net cash (used in) provided by operations (18,766) (34,515) 18,545
---------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investments (190,482) (358,945) (589,022)
Maturities of investments 160,670 288,410 513,644
Sales of investments 79,103 119,865 79,108
Purchases of property and equipment (243) (283) (88)
Disposition of property and equipment 45 39 4
Purchase of Celite Corporation 0 0 (144,386)
Purchase of Witco 0 0 (10,000)
Purchase of Underwriters Re (203,865) 0 0
Sale of Shelby 0 0 125,000
---------------------------------
Net cash (used in) provided by investing activities (154,772) 49,086 (150,740)
---------------------------------
Cash flows from financing activities:
Decrease in notes receivable 0 0 429
Principal payments on long-term debt 0 (16,000) (177,000)
Proceeds of long-term debt 0 0 125,000
Purchase of treasury shares (7,897) (1,240) 0
Common stock distributions 1,753 489 645
Capital contributions to consolidated subsidiaries (57,498) 0 (79,800)
Cash dividends from consolidated subsidiaries 237,482 2,237 138,159
---------------------------------
Net cash provided by (used in) financing activities 173,840 (14,514) 7,433
---------------------------------
Net increase in cash 302 57 (124,762)
Cash at beginning of year 2,154 2,097 1,859
---------------------------------
CASH AT END OF YEAR $2,456 $2,154 ($122,903)
=================================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $6,401 $6,868 $13,480
Income taxes $46,236 $33,949 $3,616
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
In 1993, Alleghany made a noncash capital contribution of $16,315 to its
consolidated subsidiaries by contributing a partnership interest with a cost
basis of $2,525 and investment securities with a cost of $13,790.
In 1991, Alleghany received a noncash dividend of $20,433 from its
consolidated subsidiaries by receiving preferred stock with a cost of $17,000
and investment securities with a cost of $3,433.
See accompanying Notes to Condensed Financial Statements.
<PAGE> 108
SCHEDULE III
ALLEGHANY CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(in thousands)
1. INVESTMENT IN CONSOLIDATED SUBSIDIARIES. Reference is made to Notes 2 and
3 of the Notes to Consolidated Financial Statements incorporated herein by
reference for information regarding the acquisitions of Underwriters Re, Ticor
Title and World Minerals and the sale of The Shelby Insurance Company.
2. LONG-TERM DEBT. Reference is made to Note 9 of the Notes to Consolidated
Financial Statements incorporated herein by reference for information regarding
the significant provisions of long-term debt of Alleghany. Included in
long-term debt in the accompanying condensed balance sheets is $19,123 in 1993
and 1992 of intercompany notes payable due to Alleghany Funding.
3. INCOME TAXES. Reference is made to Note 10 of the Notes to Consolidated
Financial Statements incorporated herein by reference regarding the Company's
adoption of FASB Statement No. 109.
4. COMMITMENTS AND CONTINGENCIES. Reference is made to Note 14 of the Notes
to Consolidated Financial Statements incorporated herein by reference.
5. STOCKHOLDERS' EQUITY. Reference is made to Note 11 of the Notes to
Consolidated Financial Statements incorporated herein by reference with respect
to stockholders' equity and surplus available for dividend payments to
Alleghany from its subsidiaries.
<PAGE> 109
SCHEDULE V
ALLEGHANY CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INSURANCE INFORMATION
(in thousands)
<TABLE>
<CAPTION>
AT DECEMBER 31
-----------------------------------------------------------------
FUTURE
POLICY OTHER
BENEFITS, POLICY
DEFERRED LOSSES, CLAIMS
POLICY CLAIMS AND
ACQUISITION AND LOSS UNEARNED BENEFITS
YEAR SEGMENT COST EXPENSES PREMIUMS PAYABLE
- ---- ------- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1993 Title $0 $523,123 $0 $0
=================================================================
Property
and casualty
reinsurance *** $10,363 $861,204 $49,078 $0
=================================================================
1992 Title $0 $512,452 $0 $0
=================================================================
1991 ** Title $0 $503,136 $0 $0
=================================================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31
----------------------------------------------------------------------------------------------------
BENEFITS,
CLAIMS, AMORTIZATION
LOSSES OF DEFERRED
NET AND POLICY OTHER
PREMIUM INVESTMENT SETTLEMENT ACQUISITION OPERATING PREMIUMS
YEAR SEGMENT REVENUE * INCOME * EXPENSES * COSTS EXPENSES * WRITTEN
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1993 Title $1,236,165 $37,736 $121,864 $0 $1,177,507 $0
====================================================================================================
Property
and casualty
reinsurance *** $32,703 $10,390 $25,131 $1,194 $5,309 $36,172
====================================================================================================
1992 Title $1,125,906 $41,022 $109,235 $0 $1,075,259 $0
====================================================================================================
1991 ** Title $874,481 $41,060 $84,338 $0 $875,997 $0
====================================================================================================
</TABLE>
* Does not include Alleghany Corporation or Chicago Title and Trust
Company's trust and escrow operations.
** On December 31, 1991, the Company sold The Shelby Insurance Company
("Shelby"). Accordingly, the operations of Shelby and its net assets have been
designated as discontinued operations and amounts related to Shelby are not
reflected in this schedule.
*** On October 7, 1993, the Company acquired URC Holdings Corp., whose
principal subsidiary is Underwriters Reinsurance Company. The acquisition for
accounting purposes was effective as of October 1, 1993. Accordingly, results
of operations are from October 1, 1993.
<PAGE> 110
SCHEDULE VI
ALLEGHANY CORPORATION AND SUBSIDIARIES
REINSURANCE
THREE YEARS ENDED DECEMBER 31, 1993
(in thousands)
<TABLE>
<CAPTION>
PERCENTAGE
CEDED TO ASSUMED OF AMOUNT
GROSS OTHER FROM OTHER NET ASSUMED
AMOUNT COMPANIES COMPANIES AMOUNT TO NET
---------- ---------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
1993 Title premiums $1,236,165 $5,547 $1,865 $1,232,483 0.15%
========== ========== =========== ========== ============
Property and casualty $4,218 $9,994 $38,479 $32,703 117.66%
reinsurance premiums ** ========== ========== =========== ========== ============
1992 Title premiums $1,125,906 $7,079 $2,116 $1,120,943 0.19%
========== ========== =========== ========== ============
1991 * Title premiums $874,481 $4,792 $3,748 $873,437 0.4%
========== ========== =========== ========== ============
</TABLE>
* On December 31, 1991, the Company sold The Shelby Insurance Company
("Shelby"). Accordingly, the operations of Shelby and its net assets have been
designated as discontinued operations and amounts related to Shelby are not
reflected in this schedule.
** On October 7, 1993, the Company acquired URC Holdings Corp., whose
principal subsidiary is Underwriters Reinsurance Company. The acquisition for
accounting purposes was effective as of October 1, 1993. Accordingly, results
of operations are from October 1, 1993.
<PAGE> 111
SCHEDULE XIV
ALLEGHANY CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL PROPERTY AND CASUALTY INSURANCE INFORMATION
(in thousands)
<TABLE>
<CAPTION>
DISCOUNT,
IF ANY,
RESERVES DEDUCTED
FOR IN RESERVES
UNPAID FOR UNPAID
DEFERRED CLAIMS CLAIMS
AFFILIATION POLICY AND CLAIM AND CLAIM NET
WITH ACQUISITION ADJUSTMENT ADJUSTMENT UNEARNED EARNED INVESTMENT
REGISTRANT COST EXPENSES EXPENSES PREMIUMS PREMIUMS INCOME
- ------------- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1993
Consolidated
property-
casualty
entities * $10,363 $861,204 $0 $49,078 $32,703 $10,390
================================================================================================
</TABLE>
<TABLE>
<CAPTION>
CLAIMS AND CLAIM
ADJUSTMENT EXPENSES
INCURRED RELATED TO AMORTIZATION
------------------- OF DEFERRED PAID CLAIMS
AFFILIATION (1) (2) POLICY AND CLAIM
WITH CURRENT PRIOR ACQUISITION ADJUSTMENT PREMIUMS
REGISTRANT YEAR YEAR COSTS EXPENSES WRITTEN
- ------------- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1993
Consolidated
property-
casualty
entities * $25,131 $0 $1,194 $27,876 $36,172
==========================================================================
</TABLE>
* On October 7, 1993, the Company acquired URC Holdings Corp., whose
principal subsidiary is Underwriters Reinsurance Company. The acquisition for
accounting purposes was effective as of October 1, 1993. Accordingly, results
of operations are from October 1, 1993.
<PAGE> 112
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
ALLEGHANY CORPORATION:
Under date of February 23, 1994, we reported on the consolidated balance sheets
of Alleghany Corporation and subsidiaries as of December 31, 1993 and 1992, and
the related consolidated statements of earnings, changes in common
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1993 as contained in the 1993 annual report to
stockholders. These consolidated financial statements and our report thereon
are incorporated by reference in the annual report on Form 10- K for the year
1993. In connection with our audits of the aforementioned consolidated
financial statements, we also have audited the related financial statement
schedules as listed in the accompanying index. These financial statement
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statement schedules
based on our audits.
In our opinion, such financial statement schedules, when considered in relation
to the basic consolidated financial statements taken as a whole, present
fairly, in all material respects, the information set forth therein.
As discussed in Note 1 to the consolidated financial statements, the Company
adopted the provisions of Financial Accounting Standards Board's Statement of
Financial Accounting Standards No. 115 "Accounting for Certain Investments in
Debt and Equity Securities" and No. 109 "Accounting for Income Taxes" at
December 31, 1993 and in 1992 respectively.
/s/ KPMG Peat Marwick
KPMG PEAT MARWICK
New York, New York
February 23, 1994
<PAGE> 113
ALLEGHANY CORPORATION
AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit Number Description
*10.01 Description of Alleghany Management Incentive Plan.
*10.02(a) Agreement dated as of December 22, 1993 between
Alleghany and David B. Cuming. Agreements dated as
of December 22, 1993 between Alleghany and each of
F.M. Kirby, John J. Burns, Jr., Richard P. Toft,
Theodore E. Somerville, John E. Conway and Peter R.
Sismondo are omitted pursuant to Instruction 2 of
Item 601 of Regulation S-K.
*10.02(b) Agreement dated as of December 15, 1993 between CT&T
and Richard P. Toft.
*10.11(b) Second Amendment to Employment Agreement dated as of
January 1, 1994, among CT&T, Alleghany and Richard
P. Toft.
*10.15 CT&T Executive Performance Unit Incentive Plan of
1992, adopted and effective as of January 1, 1992,
as amended and restated effective January 1, 1993.
- ---------------------
* Compensatory plan or arrangement.
<PAGE> 114
Exhibit Number Description
*10.16 Description of CT&T Quality Business Management
Incentive Program for the Presidents of CT&T and
Chicago Title Insurance Company, effective as of
January 1, 1989, as amended as of January 1, 1992.
*10.19(b) Description of compensatory arrangement between
Alleghany and Paul F. Woodberry.
10.28(d) Amended and Restated Credit Agreement dated as of
December 30, 1993 among CT&T, certain commercial
lending institutions and Continental Bank, N.A. as
agent.
13 Pages 2 and 3, pages 6 through 16, and pages 21
through 45 of the Annual Report to Stockholders of
Alleghany for the year 1993, dated March 15, 1994.
21 List of subsidiaries of Alleghany.
23 Consent of KPMG Peat Marwick, independent certified
public accountants, to the incorporation by
reference of their reports relating to the
financial statements and related schedules of
Alleghany and subsidiaries in the prospectus
contained in the Registration Statement on Form
S-8 of Alleghany (Registration No. 27598).
28 Information from reports furnished to state
regulatory authorities by Underwriters Reinsurance
Company and Commercial Underwriters Insurance
Company.
- -----------------------
* Compensatory plan or arrangement.
<PAGE> 1
EXHIBIT 10.01
DESCRIPTION OF
ALLEGHANY CORPORATION
MANAGEMENT INCENTIVE PLAN
(as currently in effect)
The Management Incentive Plan of Alleghany Corporation
("Alleghany") is a short-term incentive plan designed to reward certain
officers for achieving specified corporate and/or individual objectives.
Corporate objectives consist of achievement of specified levels of net earnings
per share, which are based on the planned net earnings per share for the year
as approved by the Board of Directors and included in the most recent Alleghany
Strategic Plan. Individual objectives for all officers other than the chief
executive officer and the Chairman of the Board are determined, and the
performance of such officers is assessed, by the chief executive officer of
Alleghany upon authority delegated by the Board of Directors. Individual
objectives for the chief executive officer are determined by the Board of
Directors upon the recommendation of the Compensation Committee, which receives
the recommendation of the Chairman of the Board with respect thereto; the
performance of the chief executive officer with respect to those objectives is
assessed by the Chairman of the Board. The participation of the Chairman of
the Board is tied solely to corporate objectives.
<PAGE> 1
EXHIBIT 10.02(a)
AGREEMENT
AGREEMENT, dated as of December 22, 1993 (this "Agreement"),
between ALLEGHANY CORPORATION, a Delaware corporation (the "Company"), and the
undersigned officer of the Company ("Participant").
W I T N E S S E T H:
WHEREAS, the Company has heretofore adopted the Alleghany
Corporation 1983 Long-Term Incentive Plan (the "1983 Plan"); and
WHEREAS, Participant was awarded performance shares under the
1983 Plan (the "1990 Performance Shares"), the payout with respect to which is
based upon the average annual compound growth (the "1990-1993 Average Annual
Compound Growth") in the Company's Earnings Per Share (as defined pursuant to
the 1983 Plan) during the four-year award period commencing January 1, 1990;
and
WHEREAS, the 1990-1993 Average Annual Compound Growth will not
be finally determinable until the completion of the Company's audited financial
statements for the year ending December 31, 1993 (the "1993 Audited Financial
Statements"); and
<PAGE> 2
WHEREAS, the Company desires, and has taken the necessary
corporate action, to pay to Participant in 1993 the projected amount payable in
respect of the 1990 Performance Shares, on the condition that Participant enter
into this Agreement providing for (i) Participant's consent to the amendment by
the Compensation Committee of the Board of Directors of the Company (the
"Compensation Committee") of the terms and provisions governing the 1990
Performance Shares to permit Participant's payout to be made in 1993 in respect
of such 1990 Performance Shares, and (ii) the repayment to the Company of any
amount in excess of that amount to which Participant is entitled upon
completion of the 1993 Audited Financial Statements.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, agreements and promises contained herein and in the 1983 Plan, and
subject thereto, the parties hereto agree as follows:
1. Participant hereby consents to the amendment by the
Compensation Committee of the terms and provisions governing the 1990
Performance Shares to permit Participant's payout to be made in 1993
in respect of such 1990 Performance Shares.
-2-
<PAGE> 3
2. The Company has calculated the projected amount payable
(the "Projected Amount") in respect of the 1990 Performance Shares based upon
a projected 1990-1993 Average Annual Compound Growth of 20.5 percent.
3. In the event that the Company pays the Projected Amount to
Participant in 1993, and the final 1990-1993 Average Annual Compound Growth is
below 12 percent, based upon the 1993 Audited Financial Statements, then the
Company shall send a notice to Participant setting forth such final
determination, the amount of cash and the number of shares of common stock of
the Company to which Participant is finally entitled in respect of the 1990
Performance Shares (the "Final Amount"), and the difference between the
Projected Amount and the Final Amount (the "Notice"). These determinations
shall be final and binding unless otherwise determined by the Board of
Directors of the Company and shall be made in accordance with the terms and
provisions governing the 1990 Performance Shares using December 14, 1993 as
the payment date.
4. In the event that Participant receives the Notice,
Participant hereby agrees to repay to the Company, within five (5) business
days of such receipt, that amount of cash (payable in cash or personal check)
and that number of
-3-
<PAGE> 4
shares of common stock of the Company equal to the difference between the
Projected Amount and the Final Amount.
5. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors, assigns, heirs and
personal representatives, as the case may be.
6. This Agreement shall be construed and administered
according to the laws of the State of New York applicable to agreements made
and to be performed entirely within such state.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date and year first above written.
ALLEGHANY CORPORATION
By/s/ Peter R. Sismondo
---------------------------
Name: Peter R. Sismondo
Title: Vice President,
Controller and
Assistant Secretary
/s/ David B. Cuming
-----------------------------
(Participant)
-4-
<PAGE> 1
EXHIBIT 10.02(b)
AGREEMENT
AGREEMENT, dated as of December 15, 1993 (this "Agreement"),
between CHICAGO TITLE AND TRUST COMPANY, an Illinois corporation (the
"Company"), and Richard P. Toft, ("Participant").
WITNESSETH:
WHEREAS, the Company has heretofore adopted the Chicago Title
and Trust Company Annual Short Term Incentive Plan; the Chicago Title and Trust
Company 1989 Performance Unit Incentive Plan for Units Issued in 1991; and the
Chicago Title and Trust Company Quality Business Management Incentive Plan
("QBMI"); and
WHEREAS, Participant was designated to participate in the
three plans in respect of 1993, and was awarded performance units under the
1989 Plan in January, 1991 (the 1991 Performance Units"); and
WHEREAS, the full payout for the Short Term Plan is based on
the Net Operating Income for 1993; the payout which Participant is entitled to
receive under the Performance Unit Plan in respect of 1993 is based on the
Company's Average Return On Equity for the years 1991, 1992 and 1993, as well
<PAGE> 2
as on the actual or assumed Dividend payable to Alleghany or transferable to
the Contributed Assets Account of Chicago Title and Trust; and the payout which
Participant is entitled to receive in respect of the QBMI program for Policy
Year 1990 is based upon the Loss Ratio experience for that Policy Year for the
three Divisions as measured during the four-year period ending on December 31,
1993 (the "Policy Year Loss Ratio"); and
WHEREAS, the 1993 Net Operating Income, the 1991-1993 Average
Return On Equity, the Dividend Level for 1993 and the Policy Year 1990 Loss
Ratio will not be finally determined until the completion of the Company's
audited financial statements for the year ending December 31, 1993 (the 1993
Audited Financial Statements"), and
WHEREAS, the Company desires, and has taken the necessary
corporate action, to pay to Participant in 1993 the estimated amounts of
payouts in respect of 1993 under the Annual Short Term Incentive Plan, 90% of
the estimated amounts of payouts in respect of 1991 under the 1989 Performance
Unit Incentive Plan for Units Issued in 1991, 70% of the estimated amounts of
payouts in respect of the QBMI Plan for Policy Year 1990 and 80% of the QBMI
hold back from
-2-
<PAGE> 3
your short term incentive for that Policy Year, on the condition that
Participant enter into this Agreement providing for the repayment to the
Company of any amounts in excess of those amounts to which he is entitled upon
completion of the 1993 Audited Financial Statements and the final determination
of the 1993 Net Operating Income, the 1991-1993 Average Return On Equity, the
Dividend Level for 1993 and the Policy Year 1990 Loss Ratio.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants, agreements and promises contained herein and in the Plan, and
subject thereto, the parties hereto agree as follows:
1. The Company hereby pays to Participant the amount of
$233,578 in cash under the Annual Short Term Incentive Plan in respect of 1993,
the amount of $297,704 in cash under the 1989 Performance Unit Incentive Plan
for Units Issued in 1991 and the amount of $112,577 in cash under the QBMI Plan
for Policy Year 1990 (the "Estimated Amounts"), for a total gross payment of
$643,859.
2. Upon the completion of the 1993 Audited Financial
Statements, the Company promptly shall finally
-3-
<PAGE> 4
determine the 1993 Net Operating Income, the 1991-1993 Average Return On
Equity, the Dividend Level for 1993 and the Policy Year 1990 Loss Ratio and
as soon as practicable thereafter shall send a notice to Participant setting
forth such final determinations, the amounts to which the Participant is
finally entitled under the three plans in respect of 1993, and the differences,
if any, between the Estimated Amounts and the Final Amounts (the "Notice") .
The determination of the Company with respect to the foregoing shall be final
and binding unless otherwise determined by the Board of Directors of the
Company.
3. In the event that the Estimated Amounts are in excess of
the Final Amounts, Participant hereby agrees to repay to the Company, within
five (5) business days of receipt of the Notice, an amount in cash or personal
check equal to the differences between the Estimated Amounts and the Final
Amounts.
4. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors, assigns, heirs and personal
representatives, as the case may be.
-4-
<PAGE> 5
5. This Agreement shall be construed and administered
according to the laws of the State of Illinois applicable to agreements made
and to be performed entirely within such state.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date and year first above written.
CHICAGO TITLE AND TRUST COMPANY
By/s/ LaNette Zimmerman
-----------------------------
Name: LaNette Zimmerman
Title: Senior Vice President
/s/ Richard P. Toft
----------------------------
(Participant)
-5-
<PAGE> 1
EXHIBIT 10.11(b)
SECOND AMENDMENT
TO
EMPLOYMENT AGREEMENT
THIS SECOND AMENDMENT to the Employment Agreement dated as of January 1,
1992, as amended by an Amendment dated as of January 1, 1993, ("the Employment
Agreement") between the parties hereto is entered into as of the first day of
January, 1994, by Chicago Title and Trust Company, an Ilinois corporation
("Employer"), Alleghany Corporation, a Delaware corporation ("Guarantor"), and
Richard P. Toft ("Employee").
WITNESSETH:
WHEREAS, Employee is employed by Employer as its President and Chief
Executive Officer under terms and conditions set forth in the Employment
Agreement; and
WHEREAS, Employer, Employee and Guarantor desire to amend the Employment
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties agree as follows:
1. By no less than 60 days' written notice to Employer and
Guarantor, Employee may terminate his employment with Employer, with or without
"good reason," as of any date
<PAGE> 2
specified in such notice from October 1, 1994 to December 30, 1994 (inclusive).
2. If Employee terminates his employment pursuant to Paragraph 1
hereof, he shall be entitled to all of the benefits provided by Paragraph 6(d)
of the Employment Agreement.
3. If, pursuant to Paragraph 1 hereof, Employer terminates his
employment as of a date from October 1, 1994 to October 30, 1994 (inclusive),
Employee's annual bonus and long-term incentive compensation shall be
calculated under the applicable incentive compensation plans of Employer on the
basis of his actual period of employment with Employer. If, pursuant to
Paragraph 1 hereof, Employee terminates his employment as of a date from
October 31, 1994 to December 30, 1994 (inclusive), Employee's annual bonus and
long-term incentive compensation shall be calculated under the applicable
incentive compensation plans of Employer as if his employment by Employer had
continued through December 31, 1994.
4. Notwithstanding any provision of the Employment Agreement to
the contrary, Employee shall have no right to
-2-
<PAGE> 3
terminate his employment with Employer, whether for "good reason" or otherwise,
prior to October 1, 1994.
5. Guarantor. Except as expressly provided in Paragraph 22 of
the Employment Agreement, Guarantor shall have no liabilities or obligations,
as guarantor or otherwise, under the Employment Agreement as amended by this
Second Amendment.
6. Defined Terms. All terms used in this Second Amendment shall
have the meanings assigned to them in the Employment Agreement.
7. Board Approval. The rights and obligations of each of
Employer, Guarantor and Employee under this Second Amendment are contingent
upon the approval or ratification by the board of directors of Employer of the
execution of this Second Amendment on its behalf.
IN WITNESS WHEREOF, Employee has hereunto set his hand, and Employer and
Guarantor have caused these presents to be
-3-
<PAGE> 4
executed on their behalf, all as of the day and year first above written.
CHICAGO TITLE AND TRUST COMPANY
By/s/ Thomas B. Green
--------------------------
Senior Vice President and
General Counsel
ALLEGHANY CORPORATION
By/s/ John J. Burns, Jr.
--------------------------
President
/ s/ Richard P. Toft
--------------------------
Richard P. Toft
-4-
<PAGE> 1
EXHIBIT 10.15
FINAL
CHICAGO TITLE AND TRUST COMPANY
PERFORMANCE UNIT INCENTIVE PLAN
AS AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 1993
1. RESTATEMENT OF PLAN. The CHICAGO TITLE AND TRUST PERFORMANCE UNIT
INCENTIVE PLAN, a non-tax qualified unfunded incentive compensation
plan, as first established effective January 1, 1992 by CHICAGO TITLE
AND TRUST COMPANY (Company) for certain employees of itself and its
corporate affiliates is hereby amended and restated (Plan) effective
January 1, 1993. The Plan's participants are divided into two
sections, an Executives Section and a Managers Section, all as more
fully described below.
2. AFFILIATED COMPANIES. The Company may, at its option, authorize and
designate any of its affiliated corporations to participate in the
Plan and, in that event, any such corporation shall execute a written
statement of adoption, consenting to the terms and conditions of the
Plan. Each participating company (including the Company) shall be
referred to as an "Employer" hereunder.
3. ELIGIBILITY - SELECTION BY PRESIDENT. The Plan is intended to benefit
select personnel of Employers who are able to contribute to the long
term, sustained growth of the Company and its affiliates (Executives
Section) or who have significant influence over expense or revenue
elements affecting the performance of the Company and its affiliates
(Managers Section). The President of the Company shall select and
determine, in his sole discretion, those persons who shall be eligible
to participate in the Plan. The eligibility of the President for Plan
participation shall be authorized by Alleghany Corporation.
4. PERFORMANCE CYCLES - COMMENCEMENT OF PARTICIPATION.
A. The Plan covers three (3) cycles each of three years duration
with the first cycle having commenced January 1, 1992 and to
continue in 1993 and 1994 for a total of three years for the
1992 cycle. A new three year cycle began on January 1, 1993
and a third cycle is scheduled to begin January 1, 1994.
The initiation of cycles after January 1, 1994 and the
commencement, delay, duration of cycles in general shall be
discretionary matters with the President.
B. Except with the approval of the President, an eligible
employee shall commence Plan participation and enter a
performance cycle not later than 18 months into a three year
cycle, or not later than one half into a cycle of any other
duration.
<PAGE> 2
5. PERFORMANCE UNITS - ASSIGNMENT - REPORTING.
A. A participant's potential for incentive pay shall be based on
the number of performance units assigned to that participant
and the performance of the Company and its affiliates during a
performance cycle.
B. A participant's performance units shall reflect generally that
person's level of responsibility and control over target
variables within the Company's corporate family. The
President shall approve such assignment in his sole discretion
but may utilize the recommendations of the Company's human
resources staff or such other resources as he may deem
appropriate in making such determination.
C. The total number of units assigned for any one performance
cycle shall be subject to such maximum number as shall be
approved by Alleghany Corporation. Aggregate limits for this
Plan shall be 60,000 units for the Executives Section and
40,000 units for the Managers Section.
D. The assignment of units to Plan participants shall be reported
to the Personnel Committee of the Board of Directors of the
Company in the quarter in which such assignment is made.
E. The number of units assigned to the President of the Company
and the President of Chicago Title Insurance Company shall be
approved by Alleghany Corporation.
6. CALCULATIONS - COMMON DEFINITIONS. In making calculations of benefits
payable under the Plan's Executives Section and Managers Section, the
following definitions shall apply:
A. "Return on Equity" means Net Operating Income divided by
Beginning Operating Equity for the year.
B. "Net Operating Income" means net income excluding earnings on
Contributed Assets, gain or loss on sale of securities and
certain accruals relating to the Plan. The Executives Section
benefits will add back into net income the accrual taken for
Executives' benefits under this plan, thus increasing the net
income amount by the amount of the accrual for the Executives'
benefits. The Managers Section benefits will add back into
net income the accruals taken for Executives' benefits and for
Managers' benefits under this Plan, thus increasing the net
income amount by the sum of the amounts of the accruals for
both Executives' and Managers' benefits. All exclusions under
this paragraph shall be net of accruals for federal income
tax.
2
<PAGE> 3
C. "Expense Ratio" means Total Operating Expenses divided by
Gross Operating Revenue.
D. "Total Operating Expenses" means all expenses deducted from
gross revenue to determine net operating income except
provisions for title insurance losses and federal income
taxes.
E. "Gross Operating Revenue" means gross revenue, including
agents commissions and gross up of non-taxable revenue to
pre-tax base, as included to determine Net Operating Income.
All calculations by the Company of incentive payments and the use of
Plan definitions shall be subject to such adjustments as the Company
in its sole discretion shall be deemed equitable and shall further be
subject to review by the independent auditors of the Company.
7. PAYOUT OF BENEFITS FOR THE 1992 CYCLE. The distribution of benefits
for the cycle commencing January 1, 1992 shall be governed by the
following provisions:
A. The distribution of incentive pay amounts shall be made in
cash as soon as possible after audited results are available
at the end of the three year performance cycle.
B. Select examples of payment procedures may be set forth as
Exhibits from time to time at the Company's discretion.
C. Subject to authorization by Alleghany Corporation, Plan
participants authorized to receive a distribution under the
Plan may use a portion of the proceeds of such distribution to
purchase shares of Alleghany Corporation in accordance with
administrative procedures promulgated by the Company and
consistent with the terms of a certain Stock Purchase
Agreement between the Company and Alleghany Corporation and a
related Stock Purchase Agreement between the Company and the
participant, as such agreements may be amended from time to
time.
D. The Company shall have the right to deduct from all Plan
distributions paid in cash any taxes required by law to be
withheld with respect to such payments.
E. Assignment. Plan benefits shall not be assigned or
transferred by a participant without the prior written consent
of the Company.
3
<PAGE> 4
F. In order to qualify for a distribution (except for early
distributions described below), a participant shall have been
participating in the Plan for at least the last eighteen (18)
months of a performance cycle (or at least one- half of a
cycle lasting for a period other than three years) and the
participant shall remain an employee of an Employer at the
time of payment of incentive amounts.
8. PAYOUT OF BENEFITS FOR 1993 AND SUBSEQUENT CYCLES. The distribution
of benefits for cycles commencing January 1, 1993 and
thereafter shall be governed by the following provisions:
A. Mandatory Stock Purchase. Effective with the three year
performance cycle commencing January 1, 1993, one-fourth of
the taxable distribution of participants in this Plan shall be
the subject of mandatory purchase of Alleghany stock.
i. The purchase shall be subject to the terms and
conditions of administrative procedures promulgated
by the Company and consistent with the terms of
certain stock purchase agreements between the Company
and Alleghany Corporation, and the Company and the
participant, such terms and conditions to include
without limitation, the maximum number of shares to
be purchased, pricing of shares, etc.
ii. The price for shares for a three-year performance
cycle commencing January 1, shall be 110% of the mean
price of shares on such date (unless the effective
date for granting of units differs from January 1, in
which case the effective date of granting of units
shall apply) or the next prior business day, if
applicable.
iii. For the performance cycle commencing January 1, 1993,
the price for option a. in subparagraph ii of this
Section is $147.40.
iv. Once the distribution is complete, there is no
restriction on resale of such shares.
B. Early Stock Purchase Option. In addition to the mandatory
stock distribution applicable to one-third of a participant's
distribution as described in Subparagraph A above, a
participant shall enjoy the option to use up to one-third of a
future distribution to purchase Alleghany stock for the same
purchase price as provided in the mandatory purchase. The
option may be exercised in increments of 5% up to the full 33
1/3% of such distribution. The option must be exercised
according to procedures and within a period to be specified by
the Company following the date on which units for a
performance cycle are awarded.
4
<PAGE> 5
i. The terms and conditions of this option are likewise
subject to the said stock purchase agreements between
the Company and Alleghany Corporation and the Company
and the participant.
ii. Once the purchase of shares is complete, there are no
restrictions on the resale of Alleghany shares.
C. Cash Distribution. The balance of a participant's
distribution of incentive pay amounts, after allowance for the
mandatory stock purchase and possible exercise of the Early
Stock Purchase Option shall be made in cash as soon as
reasonably practical after audited results are available at
the end of a three year performance cycle.
D. Late Stock Purchase Option. After allowance for the mandatory
stock purchase and the possible exercise of the Early Stock
Purchase Option described above, when a distribution of cash
amounts is imminent at the end of a three year performance
cycle, a participant may elect to use up to one-half of the
proceeds of the remainder of a distribution, after-taxes to
purchase shares of Alleghany stock, all as further described
in administrative procedures promulgated by the Company and
consistent with said stock purchase agreements between
Alleghany and the Company and the Company and the participant.
i. The resale of stock purchased under this option shall
be restricted in accordance with applicable security
laws and regulations, with notice thereof to be
provided to the participant by the Company.
E. Withholding.
i. The Company shall have the right to deduct from all
Plan distributions paid in cash, any taxes or other
deductions required by law to be withheld with
respect to cash and stock distributed under the Plan
ii. In the event of a mandatory or early stock purchase
under paragraph 8A or paragraph 8B where the amount
of the cash received is not adequate to pay
appropriate taxes, the affected employee shall be
required to either make a cash payment to the Company
in the amount of the deficiency or in the alternative
to receive such lesser number of full shares as shall
allow the full amount of taxes due to be paid.
F. Examples. Select examples of payment procedures may be set
forth as Exhibits from time to time at the Company's
discretion.
G. Assignment. Plan benefits shall not be assigned or
transferred by a participant without the prior written consent
of the Company.
5
<PAGE> 6
H. Special Provisions.
A. In the Event that the Company is sold by Alleghany
Corporation. If the Company is sold by Alleghany
Corporation, then each participant has the option to
take the distribution from this program either in
cash or in the form of payout outlined in Paragraph 8
subparagraphs A through D. The election is made at
the time of distribution under this Plan.
B. In the Event that Alleghany Stock is Split. In the
event that Alleghany Stock is split, a new purchase
price for Paragraph 8 subparagraph A (iii) is
calculated. The new price is derived by applying the
ratio of new shares to 1 existing share. For
example, if the stock splits 2 for 1, then 2 shares
will be purchased for $147.40, or $73.70 per share.
If the stock splits 2 1/2 to 1, then 2 1/2 shares
will be purchased for $147.40, or $58.96 per share.
9. PLAN ADMINISTRATION. The Company shall be responsible for
administering the Plan and all decisions as to participation, levels
of responsibility and other matters made by the Company and the
President of the Company shall be final. The President is authorized
to make discretionary decisions regarding eligibility, participation
and distributions regarding an individual participant as shall be
equitable for that participant.
10. NOT CONTRACT OF EMPLOYMENT. Nothing in this Plan shall be construed
as providing to a participant any contractual right to continued
employment or any special rights with respect to employment with an
Employer.
11. NO ACCRUED BENEFIT. The Company intends that the subject Plan be
subject at all times to final results of operations of the Company at
the end of a performance cycle and that payments be in the nature of a
bonus made at its discretion. Consequently, except as specifically
provided in this Agreement, there shall be no accrual of benefits or
pro-rata entitlement prior to the actual date of payment.
12. PLAN AMENDMENT - TERMINATION. The Company reserves the right to amend
or terminate this Plan at any time.
13. CHANGE IN CONTROL. In the event that a Participant is terminated for
any reason other than cause within two years following a change in
control of the Company (Change in ultimate ownership of the Company
from Alleghany Corporation to an unaffiliated entity or liquidation or
dissolution of the Company), Plan benefits shall be determined for
that participant in the same manner as if a Plan termination had
occurred on the date of termination of employment of the participant.
6
<PAGE> 7
EXECUTIVES SECTION - SPECIAL PROVISIONS.
14. CALCULATION OF BENEFITS. The benefits for a participant in the
Executives Section of the Plan shall be calculated as follows:
A. Step 1. Base Value. The performance units assigned to a
participant shall have a Base Value of each year of the Plan
determined in accordance with the following table:
<TABLE>
<CAPTION>
Reference Return on Unit Value Per
--------- --------- --------------
Points Equity Million Dollars
------ ------ ---------------
Operating Income
----------------
<S> <C> <C>
Below Threshold 6.99% & under 0.00
Threshold Rate 7.00% to 14.99% 2.00
Enhanced Rate over 15.00% 4.50
</TABLE>
The following two points should be noted:
i. If the threshold rate (7.00%) is not reached for two
of the three Plan years, no incentive payments will
be made.
ii. If the threshold rate is not reached for a single
Plan year, the amount of the shortfall (below
threshold rate) will be divided by 1/3 and spread
forward and backward to the other Plan years as an
add-on to the Enhanced Rate.
B. Step 2. Multiplied Value. The Base Value of a Performance
Unit will be adjusted to a new multiplied value by multiplying
the Base Value by a multiplier determined as follows:
<TABLE>
<CAPTION>
Expense Ratio Multiplier
------------- ----------
<S> <C>
91% or more .75
87% 1.00
85% or less 1.25
</TABLE>
Straight line interpolation shall be used in making
calculations under the Expense Multiplier.
C. Step 3. Payout Value. Subject to the exceptions described
below, the payout value of a participant's Performance Units
issued for each year of the cycle will be valued by
multiplying the sum of the multiplied values for the three
years of that cycle times the number of units for that
participant.
7
<PAGE> 8
15. EARLY DISTRIBUTION. In the event of death, permanent and total
disability or retirement of a participant, Plan benefits for that
person shall be calculated at the end of the year in which such event
occurs using actual results for that year with benefits to be prorated
to the date of such event, but with no benefits to be paid if the
Threshold Rate is not reached for a single year of Plan participation
or if the Threshold Rate is not reached for two of the three years of
the cycle.
16. PLAN TERMINATION. In the event of Plan termination, benefits under
the Executives Section of the Plan shall be calculated
using the Enhanced Rate with application of a maximum expense
multiplier to results of operation audited to the date of Plan
termination.
MANAGERS SECTION - SPECIAL PROVISIONS.
17. ADDITIONAL DEFINITIONS.
"Average Return on Equity" means the sum of three annual return on
equity calculations, divided by three.
"Average Expense Ratio" means the sum of three annual expense ratio
calculations, divided by three.
18. CALCULATION OF BENEFITS. A participant's incentive pay under the
Managers Section of the Plan shall be calculated as follows:
A. Step 1. Value of a Performance Unit. The value of a
Performance Unit will be valued at the end of the three year
cycle using the following matrix.
Chicago Title & Trust
Average Return on Equity
<TABLE>
<CAPTION>
7% 11% 15% 18% 21%
<S> <C> <C> <C> <C> <C> <C>
85% $40 $60 $100 $140 $200
or less
CT&T 86% 30 45 75 105 150
Average 87% 20 30 50 70 100
Expense 89% 10 15 25 35 50
Ratio 91% 0 10 15 20 25
</TABLE>
B. Step 2. Payout Value. Subject to the exceptions described
below, the payout value of a participant's Performance Units
issued for each year of the cycle will be valued by
multiplying the matrix value of a Performance Unit for the
relevant three years of that cycle times the number of units
for that participant.
8
<PAGE> 9
C. Interpolation. Values on the ROE/Expense Ratio matrix shall
be subject to double interpolation on a straight line basis.
19. EARLY DISTRIBUTION. In the event of death, permanent total disability
or retirement of a participant, Plan benefits for that person shall be
calculated at the end of the year in which such event occurs using
actual results for that year with benefits to be prorated to
the date of such event.
20. PLAN TERMINATION. In the event of Plan termination, benefits under
the Managers Section of the Plan shall be calculated
using optimal rates of return on equity expense ratio, all prorated to
the date of Termination.
Executed this 21st day of March, 1994 to evidence the amendment and
restatement of the Chicago Title and Trust Company Performance Unit Incentive
Plan.
CHICAGO TITLE AND TRUST COMPANY
By: /s/ S. Lanette Zimmerman
Vice President
As Plan Sponsor
Executed this 21st day of March, 1994, to evidence Chicago Title
Insurance Company's adoption and participation in the Chicago Title and Trust
Company Performance Unit Incentive Plan as amended and restated.
CHICAGO TITLE INSURANCE COMPANY
By: /s/ Kenneth C. Ferraro
Vice President
Executed this 21st day of March, 1994, to evidence Chicago Title
Company's adoption and participation in the Chicago Title and Trust Company
Performance Unit Incentive Plan as amended and restated.
CHICAGO TITLE COMPANY
By: /s/ Thomas J. Adams
Vice President
9
<PAGE> 10
Executed this 21st day of March, 1994, to evidence Ticor Title
Insurance Company's adoption and participation in the Chicago Title and Trust
Company Performance Unit Incentive Plan as amended and restated.
TICOR TITLE INSURANCE COMPANY
By: /s/ Thomas J. Adams
Vice President
Executed this 21st day of March, 1994, to evidence Ticor Title
Guaranty Company's adoption and participation in the Chicago Title and Trust
Company Performance Unit Incentive Plan as amended and restated.
TICOR TITLE GUARANTY COMPANY
By: /s/ Thomas J. Adams
Vice President
Executed this 21st day of March, 1994, to evidence Technology
Application Services Corporation's adoption and participation in the Chicago
Title and Trust Company Performance Unit Incentive Plan as amended and
restated.
TECHNOLOGY APPLICATION
SERVICES CORPORATION
By: /s/ Thomas J. Adams
Vice President
10
<PAGE> 1
Exhibit 10.16
Description of CT&T
Quality Business Management Incentive Program
for the
Presidents of CT&T and Chicago Title Insurance Company
(as currently in effect)
The CT&T Quality Business Management Incentive Program for the
Presidents of CT&T and Chicago Title Insurance Company (the "QBMI Program") is
a long-term incentive plan designed to reward the Presidents of CT&T and
Chicago Title Insurance Company for favorable title insurance claims
experience. An amount equal to 25 percent of the annual cash bonus earned by
each of the Presidents under the Presidents' Plan of CT&T is deferred under the
QBMI Program for a four-year period beginning with the year in which such cash
bonus is earned.
If actual title insurance claims experience during the
deferral period compares favorably with a pre-established hypothetical claims
experience deemed acceptable by the Board of Directors of CT&T, each of the
Presidents will be entitled to receive his deferred amount in full with
interest at a rate during the deferral period equal to the average of the prime
rates of the nation's largest banks and the three-year U.S. Treasury note yield
as of June 30 and December 31 of each year, each as published in The Wall
Street Journal. In addition, each of the Presidents will be entitled to a
related incentive payment calculated in accordance with the method explained
below.
If actual title insurance claims experience during the
deferral period compares unfavorably with the pre-established hypothetical
claims experience, each of the Presidents will be subject to a reduction in his
deferred amount calculated in accordance with the method explained below.
The incentive payment or the reduction in the deferred amount
is determined by calculating the difference between the actual loss ratio
(which is the total dollar value of claims filed during the deferral period on
policies written in the first year of the deferral period divided by revenues
earned in the first year of the deferral period) and the pre-established
hypothetical loss ratio, multiplying such difference by the revenues earned in
the first year of the deferral period, and then multiplying the product by a
pre-established percentage. The resulting incentive amount or reduction in the
deferred amount is allocated between the Presidents in the same proportion as
their total cash bonuses in the first year of the deferral period. The
incentive payment is limited to four times the amount of the deferral, and the
reduction is limited to the amount of the deferral.
<PAGE> 1
EXHIBIT 10.19 (b)
DESCRIPTION OF COMPENSATORY ARRANGEMENT
BETWEEN
ALLEGHANY CORPORATION
AND
PAUL F. WOODBERRY
Mr. Woodberry receives $190,000 per year from Alleghany for
consulting services relating to possible investments and acquisitions which may
be made by Alleghany and/or its subsidiaries.
<PAGE> 1
EXHIBIT 10.28(d)
U.S. $71,000,000.00
AMENDED AND RESTATED
CREDIT AGREEMENT,
dated as of December 30, 1993
among
CHICAGO TITLE AND TRUST COMPANY
as the Company,
and
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
and
CONTINENTAL BANK N.A.
as the Agent for the Lenders.
and
UNITED STATES NATIONAL BANK OF OREGON,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
and
HARRIS TRUST AND SAVINGS BANK
as Co-Agents
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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SECTION 1. DEFINITIONS................................. 2
1.1 Defined Terms............................... 2
1.2 Use of Defined Terms........................ 13
1.3 Cross-References............................ 13
1.4 Accounting Terms; Financial Statements...... 13
SECTION 2. COMMITMENT OF THE LENDERS; CONDITIONS....... 13
2.1 Commitment.................................. 13
2.2 Borrowing Procedure......................... 13
2.3 Conditions to the Loan...................... 14
SECTION 3. NOTES EVIDENCING THE LOAN................... 14
3.1 Notes....................................... 14
3.2 Maturity of Notes........................... 14
3.3 Prepayment.................................. 14
SECTION 4. INTEREST.................................... 15
4.1 Continuation and Conversion Elections....... 15
4.2 Funding..................................... 15
4.3 Interest Provisions......................... 15
4.3.1 Rates....................................... 16
4.3.2 Post-Maturity Rates......................... 16
4.3.3 Payment Dates............................... 16
SECTION 5. FEES........................................ 17
5.1 Fees........................................ 17
5.2 Commitment Fee.............................. 17
5.3 Agent's Fee................................. 17
SECTION 6. CERTAIN LIBO RATE AND OTHER PROVISIONS...... 17
6.1 Fixed Rate Lending Unlawful................. 17
6.2 Deposits Unavailable........................ 17
6.3 Increased LIBO Rate Loan Costs, etc......... 18
6.4 Funding Losses.............................. 18
6.5 Increased Capital Costs..................... 19
6.6 Taxes....................................... 19
6.7 Payments, Computations, etc................. 20
6.8 Sharing of Payments......................... 21
6.9 Setoff...................................... 22
6.10 Use of Proceeds............................. 22
SECTION 7. WARRANTIES.................................. 22
7.1 Organization, etc........................... 22
</TABLE>
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<TABLE>
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7.2 Authorization; No Conflict.................. 23
7.3 Validity and Binding Nature................. 23
7.4 Financial Statements........................ 23
7.5 Litigation and Contingent Liabilities....... 23
7.6 Liens....................................... 24
7.7 Subsidiaries................................ 24
7.8 Investment Company Act...................... 24
7.9 Public Utility Holding Company Act.......... 24
7.10 Regulation U................................ 24
7.11 Acquisition Agreement....................... 25
7.12 Ownership of Properties..................... 25
7.13 Taxes....................................... 25
7.14 Pension and Welfare Plans................... 25
7.15 Accuracy of Information..................... 25
SECTION 8. COMPANY'S COVENANTS......................... 26
8.1 Reports, Certificates and Other
Information............................... 26
8.1.1 Company Audit Report ..................... 26
8.1.2 Annual Company Unaudited Statements....... 26
8.1.3 Company Interim Reports................... 27
8.1.4 Certificates.............................. 27
8.1.5 Annual Statement Blanks................... 27
8.1.6 Quarterly Statement Blanks................ 27
8.1.7 Notice of Default and Litigation.......... 28
8.1.8 Subsidiaries.............................. 28
8.1.9 ERISA..................................... 28
8.1.10 Additional Information.................... 28
8.2 Books, Records and Inspections.............. 28
8.3 Insurance................................... 28
8.4 Taxes....................................... 28
8.5 Consolidated Net Worth...................... 29
8.6 Statutory Surplus........................... 29
8.7 Interest Expense Coverage Ratio............. 29
8.8 Liquidity................................... 29
8.9 Loss Reserve Ratio.......................... 29
8.10 Restricted Payments......................... 29
8.11 Indebtedness................................ 30
8.12 Liens....................................... 31
8.13 Mergers, Consolidations, Purchases.......... 31
8.14 Asset Dispositions.......................... 32
8.15 Debt-to-Equity Ratio........................ 32
8.16 Existing Business........................... 32
8.17 Other Agreements............................ 32
8.18 Merrill Lynch Lease......................... 32
</TABLE>
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<TABLE>
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SECTION 9. CONDITION OF LENDING........................ 33
9.1 Documents................................... 33
9.1.1 Note...................................... 33
9.1.2 Corporate Documents....................... 33
9.1.3 Payoff Letter............................. 33
9.1.4 Incumbency and Signatures................. 33
9.1.5 Opinion of Counsel for the Company........ 33
9.1.6 Confirmatory Certificate.................. 34
9.1.7 Accountant's Acknowledgement.............. 34
9.1.8 Other..................................... 34
9.2 Further Conditions.......................... 34
SECTION 10. EVENTS OF DEFAULT AND THEIR EFFECT.......... 35
10.1 Events of Default........................... 35
10.1.1 Non-Payment of Note, etc.................. 35
10.1.2 Non-Payment of Other Indebtedness......... 35
10.1.3 Bankruptcy, Insolvency, etc............... 35
10.1.4 Non-Compliance with this Agreement........ 36
10.1.5 Warranties................................ 36
10.1.6 Change of Control......................... 36
10.1.7 Judgments................................. 36
10.1.8 Pension Plans............................. 36
10.2 Effect of Event of Default.................. 36
SECTION 11. THE AGENT................................... 37
11.1 Actions..................................... 37
11.2 Funding Reliance, etc....................... 37
11.3 Exculpation................................. 38
11.4 Successor................................... 38
11.5 Loans by Continental........................ 39
11.6 Credit Decisions............................ 39
11.7 Copies, etc................................. 39
11.8 Co-Agents................................... 39
SECTION 12. MISCELLANEOUS PROVISIONS.................... 39
12.1 Waivers, Amendments, etc.................... 39
12.2 Notices..................................... 40
12.3 Costs, Expenses and Taxes................... 40
12.4 Indemnification............................. 41
12.5 Survival.................................... 42
12.6 Severability ............................... 42
12.7 Captions ................................... 42
12.8 Execution in Counterparts, Effectiveness.... 42
12.9 Governing Law............................... 42
12.10 Successors and Assigns...................... 43
12.11 Sale and Transfer of Notes;
Participations in Notes................... 43
</TABLE>
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12.11.1 Assignments............................... 43
12.11.2 Participations............................ 44
12.12 Other Transaction........................... 45
12.13 Forum Selection and Consent
to Jurisdiction........................... 45
12.14 Waiver of Jury Trial........................ 46
12.15 Confidentiality............................. 46
</TABLE>
EXHIBITS
Exhibit A - Note
Exhibit B - Continuation/Conversion Notice
Exhibit C - Lender Assignment Agreement
Exhibit D - Scheduled Properties
-iv-
<PAGE> 6
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 30,
1993, among CHICAGO TITLE AND TRUST COMPANY, an Illinois corporation (the
"Company"), the various financial institutions as are or may become parties
hereto (collectively, the "Lenders"), and CONTINENTAL BANK N.A.
("Continental"), as agent (the "Agent") for the Lenders and UNITED STATES
NATIONAL BANK OF OREGON, BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
and HARRIS TRUST AND SAVINGS BANK, as Co-Agents.
W I T N E S S E T H:
WHEREAS, the Company is engaged directly and through its various
Subsidiaries in the business of issuing title insurance; and
WHEREAS, pursuant to an Acquisition Agreement dated November 29, 1990,
as amended by Amendment to Acquisition Agreement dated as of January 9, 1991
(as so executed and delivered, the "Acquisition Agreement"), between the
Company and Westwood Equities Corporation, a California corporation
("Westwood"), the Company acquired all the issued and outstanding shares of
capital stock of Ticor Title Insurance Company of California, a California
corporation ("TI"), which was merged into Chicago Title Insurance Company
effective September 30, 1992, simultaneous with the transfer of all outstanding
shares of Ticor Title Insurance Company ("TT"), to the Company, Spring Service
Corporation, a California corporation ("SSC"), Ticor Financial Company, a
California corporation ("TFC"), and various other companies set forth on
Schedule 3.1(a)(iii) to the Acquisition Agreement (the "Inactive Companies",
and, together with TT, SSC and TFC and their subsidiaries the "Acquired
Companies"); and
WHEREAS, pursuant to the Credit Agreement dated as of March 28, 1991
(the Original Credit Agreement"), among the Company, the Agent and the Lenders,
the Company borrowed $42,000,000 in certain term loans (the "Original Loans");
and
WHEREAS, the Company desires to obtain commitments from the Lenders
pursuant to which the Lenders would refinance the Original Loans and make
additional loans in the maximum aggregate principal amount not to exceed
$34,500,000; and
WHEREAS, the Company, the Lenders and the Agent wish to amend and
restate the Original Credit Agreement, on the terms and conditions set forth in
this Agreement, to, among other things, set forth the terms and conditions
under which the Lenders hereafter will refinance the Original Loans and make
additional loans to the Company; it being the intention of the Company, the
Lenders and the
<PAGE> 7
Agent that this Agreement not effect a novation of the obligations of the
Company under the Original Credit Agreement but merely a restatement and, where
applicable, an amendment of the terms governing such obligations hereafter;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and subject to the terms and conditions hereof, the Original Credit
Agreement is hereby amended and restated in its entirety and the parties
hereto, intending to be bound hereby, further agree as follows:
SECTION 1. DEFINITIONS
SECTION 1.1 Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its Preamble and Recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
Acquired Companies - see Recitals.
Acquisition Agreement - see Recitals.
Additional Capital Contributions shall mean all capital contributions
made to the Company by or on behalf of its parent corporation subsequent to
December 31, 1989.
Adjusted Total Assets shall mean for any fiscal year the total assets
of the Company and its Subsidiaries on a consolidated basis as at the
commencement of such fiscal year, as shown on a consolidated balance sheet of
the Company prepared as at the end of the preceding fiscal year in accordance
with generally accepted accounting principles consistently applied, less any
amounts shown on such consolidated balance sheet representing Unrestricted
Assets.
Affiliate of any Person shall mean a corporation which controls, is
controlled by or is under common control with such Person.
Agent is defined in the preamble and includes each other Person as
shall have subsequently been appointed as the successor Agent pursuant to
Section 11.4.
Agreement shall mean, on any date, this Credit Agreement as the same
may, from time to time, be amended, supplemented, amended and restated, or
otherwise modified and in effect.
Alternate Reference Rate shall mean, on any date and with respect to
all Reference Rate Loans, a fluctuating rate of interest per annum equal to the
higher of
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<PAGE> 8
(a) the rate of interest most recently announced by
Continental at its Domestic Office as its reference rate; and
(b) the Federal Funds Effective Rate most recently
determined by the Agent plus .75%.
The Alternate Reference Rate is not necessarily intended to be the lowest rate
of interest determined by Continental in connection with extensions of credit.
Changes in the rate of interest on the Notes while maintained as Reference Rate
Loans will take effect simultaneously with each change in the Alternate
Reference Rate. The Agent will give notice promptly to the Company and the
Lenders of changes in the Alternate Reference Rate.
Annual Payment Date shall mean each regularly scheduled date for the
payment of principal pursuant to Section 3.2.
Annual Statement Blank shall mean the annual statement of the
conditions and affairs of each Title Insurance Subsidiary in the form
prescribed by its applicable State regulatory authority for title insurance
companies and prepared in accordance with applicable statutory accounting
principles.
Approved Investments shall mean investments (i) in direct obligations
of, or obligations the principal of and interest on which are fully guaranteed
by, the United States of America, (ii) in obligations issued or guaranteed by
any agency or instrumentality of the United States of America, (iii) in
certificates of deposit of, and time deposits in, any bank organized under the
laws of the United States of America or any State thereof, or (iv) in
short-term notes or other obligations rated P-1 by Moody's Investors Service,
Inc. or A-1 by Standard and Poor's Corporation (or in the event that neither
such company is no longer providing such service, any other similar nationally
recognized rating service).
Assignee Lender is defined in Section 12.11.1.
Bankruptcy Court Order shall mean the Order entered February 5, 1991
by the United States Bankruptcy Court for the Central District of California in
the bankruptcy proceedings of Westwood approving the Acquisition Agreement.
Business Day shall mean
(a) any day which is neither a Saturday or Sunday nor a
legal holiday on which banks are authorized or required to be closed in
Chicago, Illinois and New York, New York; and
-3-
<PAGE> 9
(b) relative to the making, continuing, prepaying or
repaying of any LIBO Rate Loans, any day on which dealings in Dollars are
carried on in the London interbank market.
Capitalized Lease Obligations shall mean the present value (determined
in accordance with generally accepted accounting principles) of obligations to
pay future rentals under a lease, under which lease the obligations of the
lessee are required under generally accepted accounting principles to be shown
as a liability on the balance sheet of such lessee; provided that in the event
the Merrill Lynch Lease is required to be treated as a capitalized lease for
accounting purposes, the term "Capitalized Lease Obligations" shall not include
the Merrill Lynch Lease Obligations.
Cash and Marketable Securities shall mean as at the end of any fiscal
quarter (i) with respect to the Title Insurance Subsidiaries all assets on a
combined basis for the Title Insurance Subsidiaries which are included on page
2, lines 1, 2.1, 2.2, 6.1 and 6.2 (excluding preferred stock and common stock
of Affiliates) of the Form 9 Annual Statement Blank and the Quarterly Statement
Blank of the Title Insurance Subsidiaries as at such date (or the equivalent
items if the forms of said Annual Statement Blank or Quarterly Statement Blank
shall be amended) and (ii) with respect to the Company, all assets which would
be included on page 2, lines 1, 2.1, 2.2, 6.1 and 6.2 (excluding preferred
stock and common stock of Affiliates) of the Form 9 Annual Statement Blank of
the Company (or the equivalent items if the form of said Annual Statement Blank
shall be amended) if the Company was filing such form based on applicable
statutory accounting principles applied on a basis consistent with those
applied on 12/31/90.
Commitment shall mean, relative to any Lender, such Lender's
obligation to make Loans pursuant to Section 2.1.
Commitment Amount shall mean, on any date $71,000,000, or such lesser
amount as is borrowed by the Company on the Loan Date.
Company- see Preamble.
Consolidated Net Income shall mean consolidated total revenues of the
Company and its Subsidiaries, less all consolidated charges which should be
deducted before arriving at net income, as determined in accordance with
generally accepted accounting principles.
Consolidated Net Worth shall mean the sum of the capital stock,
additional paid-in capital and retained earnings accounts of the Company and
its Subsidiaries as shown on the Company's consolidated balance sheet prepared
in accordance with generally accepted accounting principles; provided, however
that Consolidated Net Worth shall be reduced by the face amount of any debt
-4-
<PAGE> 10
instruments of Affiliates which are not Subsidiaries of the Company owned by
the Company or its Subsidiaries. The Company will be implementing at December
31, 1993, the provisions of Statement of Financial Accounting Standards
Bulletin Number 115. Under this statement, the Company's investments in
certain marketable securities will be valued at fair values, with the changes
in such values being recorded directly in stockholder's equity. The Company
and the Lenders agree that for purposes of the computation of Consolidated Net
Worth, the changes resulting from re-valuations, either increases or decreases,
shall be excluded from such computations.
Continental- see Preamble.
Continuation/Conversion Notice shall mean a notice of continuation or
conversion and certificate duly executed by the Company, substantially in the
form of Exhibit B hereto.
Controlled Group shall mean all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Company, are treated as a single employer under Section 414(b) or 414(c) of the
Internal Revenue Code or Section 4001 of ERISA.
CTI shall mean Chicago Title Insurance Company, a Missouri corporation
and Subsidiary of the Company.
Debt Service shall mean, for any fiscal period, the sum of (i) Interest
Expense for such period, plus (ii) all amounts of principal paid or payable on
all indebtedness for borrowed money or for the deferred purchase price of
property (including the Notes for such period, plus (iii) any reductions from
time to time in Capitalized Lease Obligations appearing as indebtedness on the
liability side of a balance sheet in accordance with generally accepted
accounting principles; provided that the term "Debt Service" shall not include
any obligation to the extent such obligation is permitted by Section 8.11(v),
8.11(vii) or 8.11(x); and provided further, that in the event the Merrill Lynch
Lease is required to be treated as a capital lease for accounting purposes, the
term "Debt Service" shall not include the Merrill Lynch Lease Obligations.
Dollar and $ shall mean lawful money of the United States.
Domestic Office shall mean, relative to any Lender, the office of such
Lender designated as such below its signature hereto or designated in the
Lender Assignment Agreement or such other office of a Lender (or any successor
or assign of such Lender) within the United States as may be designated from
time to time by notice from such Lender, as the case may be, to each other
Person party hereto.
-5-
<PAGE> 11
Earnings Before Interest and Taxes shall mean, for any fiscal period,
the sum of (i) Consolidated Net Income of the Company for such period, plus
(ii) all Interest Expense of the Company and its Subsidiaries deducted in
determining Consolidated Net Income for such period, plus (iii) any provision
for Federal income taxes deducted in determining Consolidated Net Income for
such period, as determined in accordance with generally accepted accounting
principles.
Environmental Laws shall mean all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
Event of Default shall mean any of the events described in Section
10.1.
Federal Funds Effective Rate shall mean, for any period, a fluctuating
interest rate per annum equal for each day during such period to
(a) the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York; or
(b) if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on transactions in
an amount equal to the outstanding principal amount of the Notes received by
the Agent from three federal funds brokers of recognized standing selected by
it.
Inactive Companies - see Recitals.
Indemnified Liabilities is defined in Section 12.4.
Indemnified Parties is defined in Section 12.4.
Interest Expense shall mean, for any fiscal period, all amounts paid
or payable by the Company and its Subsidiaries on a consolidated basis as
interest expense on all indebtedness for borrowed money or for the deferred
purchase price of property or as the implicit interest expense on all
obligations which are regarded
-6-
<PAGE> 12
as capital leases for accounting purposes, as determined in accordance with
generally accepted accounting principles provided that the term "Interest
Expense" shall not include any interest on any obligation to the extent such
obligation is permitted by Section 8.11(v), 8.11(vii) or 8.11(x); provided
further that in the event the Merrill Lynch Lease is required to be treated as
a capital lease for accounting purposes, the term "Interest Expense" shall not
include any interest on the Merrill Lynch Lease Obligation.
Interest Period shall mean, relative to any LIBO Rate Loans, the
period beginning on (and including) the date on which such LIBO Rate Loan is
made or continued as, or converted into, a LIBO Rate Loan pursuant to Section
4.1 and shall end on (but exclude) the day which numerically corresponds to
such date one, three or six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), in
either case as the Company may select in its relevant notice pursuant to
Section 4.1; provided, however, that
(a) if such Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
following Business Day unless such next following Business Day is the first
Business Day of a calendar month, in which case such Interest Period shall end
on the Business Day next preceding such numerically corresponding day; and
(b) no Interest Period may end later than the next occurring
Annual Payment Date.
Investment Borrowings shall mean indebtedness of the Company or a
Subsidiary having a maturity of 92 days or less representing borrowings from a
bank or banks in which the Company or such Subsidiary has adequate funds on
deposit, which borrowings shall be fully secured by Approved Investments
purchased by the Company with the proceeds of such borrowings.
Lender Assignment Agreement shall mean a Lender Assignment Agreement
substantially in the form of Exhibit C hereto.
Lenders- see Preamble.
LIBO Rate shall mean, relative to any Interest Period for LIBO Rate
Loans, the rate of interest equal to the average (rounded upwards, if
necessary, to the nearest 1/100 of 1%) of the rates per annum at which Dollar
deposits in immediately available funds are offered to Continental's LIBOR
Office in the London interbank market as at or about 11:00 a.m. (London time)
two Business Days prior to the beginning of such Interest Period for delivery
on the first day of such Interest Period, and in an amount approximately
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<PAGE> 13
equal to the amount of the Notes and for a period approximately equal to such
Interest Period.
LIBO Rate Loan shall mean the Notes while bearing interest, at all
times during the applicable Interest Period, at a fixed rate of interest
determined by reference to the LIBO Rate (Reserve Adjusted).
LIBO Rate (Reserve Adjusted) shall mean, relative to any LIBO Rate
Loan for any Interest Period, a rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined pursuant to the following formula:
LIBO Rate LIBO Rate
= -------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be determined by the Agent on the basis of the LIBOR Reserve
Percentage in effect on, and the applicable rates furnished to and received by
the Agent from Continental, two Business Days before the first day of such
Interest Period.
"LIBOR Office" shall mean, relative to any Lender, the office of such
Lender designated as such below its signature hereto or designated in the
Lender Assignment Agreement or such other office of a Lender as designated from
time to time by notice from such Lender to the Company and the Agent, whether
or not outside the United States, which shall be making or maintaining LIBO
Rate Loans of such Lender hereunder.
LIBOR Reserve Percentage shall mean a percentage equal to the daily
average during each period the Note bears interest at the LIBO Rate (Reserve
Adjusted) of the percentages in effect on each day of such period, as
prescribed by the Federal Reserve Board, for determining the aggregate maximum
reserve requirements (including all basic, supplemental, marginal and other
reserves) applicable to "Eurocurrency liabilities" pursuant to Regulation D or
any other then applicable regulation of the Federal Reserve Board which
prescribes requirements applicable to "Eurocurrency liabilities," as presently
defined in Regulation D. Without limiting the effect of the foregoing, the
LIBOR Reserve Percentage shall reflect any other reserves required to be
maintained against any category of liabilities that includes deposits by
reference to which the LIBO Rate (Reserve Adjusted) is to be determined. The
Notes shall be deemed to be "Eurocurrency liabilities," as defined in
Regulation D, and, as such, shall be deemed to be subject to such reserve
requirements without the benefit of, or credit for, proration, exceptions or
offsets which may be available to any Lender from time to time under Regulation
D.
Loans is defined in Section 2.1.
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Loan Date is defined in Section 2.1.
Loan Documents shall mean this Agreement, the Notes and each
Continuation/Conversion Notice.
Long-Term Indebtedness shall mean all indebtedness of the Company and
its Subsidiaries for borrowed money or on account of deposits (other than trust
and escrow balances) or advances, all indebtedness of the Company and its
Subsidiaries for the deferred purchase price of property and services to the
extent provided in Section 8.11, all indebtedness of others assumed or
guaranteed by the Company or any of its Subsidiaries or in respect of which the
Company or any Subsidiary is secondarily or contingently liable (other than (x)
by endorsement of negotiable instruments in the course of collection, and (y)
other indebtedness of others guaranteed by the Company or any of its
Subsidiaries or in respect of which the Company or any Subsidiary is
secondarily or contingently liable not exceeding at any one time an aggregate
of $4,000,000) and all Capitalized Lease Obligations of the Company and its
Subsidiaries, which indebtedness or obligation is in each case by its terms
payable more than one year after the date of such determination; provided that
the term "Long-Term Indebtedness" shall not include any obligation which is
permitted by Section 8.11(vii), 8.11(viii) or 8.12 nor shall it include any
obligation to the extent such obligation is permitted by Section 8.11(x);
provided further that in the event the Merrill Lynch Lease is required to be
treated as a capital lease for accounting purposes, the term "Long-Term
Indebtedness" shall not include the Merrill Lynch Lease Obligation.
Loss Reserves shall mean as at the end of any fiscal quarter all
amounts for the Title Insurance Subsidiaries on a combined basis which are
shown as "Reserve for undetermined title losses of which notice has been
received" on line 1(b), page 3 of the Form 9 Annual Statement Blank and the
Quarterly Statement Blank of the Title Insurance Subsidiaries as at such date
(or the equivalent item if the forms of said Annual Statement Blank or
Quarterly Statement Blank shall be amended).
Merrill Lynch Lease shall mean that certain Lease Agreement dated as of
December 29, 1988, as amended and restated as of March 3, 1989 between SRS
Funding, Inc., as lessor, and the Company, as lessee, as the same may be
amended, amended and restated, supplemented or otherwise modified from time to
time and any and all replacements or refinancings thereof provided that such
replacements or refinancings would not have been treated as a Capitalized Lease
Obligation if such replacement or refinancing had been entered into on or
before January 1, 1991.
Merrill Lynch Lease Obligations shall mean the obligations of the
Company from time to time outstanding under the Merrill Lynch
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<PAGE> 15
Lease in an amount not to exceed $30,000,000; or such lesser amount as is
permitted pursuant to Section 8.18.
Net Asset Sales shall mean, for any fiscal year, the excess, if any,
of (i) sales or other dispositions of assets in such fiscal year, over (ii)
purchases or other acquisitions of assets in such fiscal year; provided,
however, that Net Asset Sales shall not include sales or purchases of
Unrestricted Assets. Repayments by third parties to the Company or any
Subsidiary of loans and other amounts receivable shall not be deemed to be
sales or other dispositions of assets for purposes of the foregoing definition;
and provided further that the TICOR Acquisition shall be excluded in
determining Net Asset Sales for the fiscal year of the Company commencing
January 1, 1991.
Note shall mean a promissory note of the Company payable to any Lender,
in the form of Exhibit A hereto (as such promissory note may be amended,
endorsed or otherwise modified from time to time), evidencing the aggregate
indebtedness of the Company to such Lender resulting from outstanding Loans,
and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
Obligations shall mean all obligations (monetary or otherwise) of the
Company arising under and in connection with this Agreement, the Notes or any
other Loan Document.
Original Credit Agreement - see Recitals.
Original Loans - see Recitals.
Participant is defined in Section 12.11.
PBGC shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan shall mean a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which the
Company or any corporation, trade or business that is, along with the Company,
a member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under section 4069 of ERISA.
Percentage shall mean, relative to any Lender, the percentage set
forth opposite its signature hereto or set forth in the Lender Assignment
Agreement, as such percentage may be adjusted from time to time pursuant to
Lender Assignment Agreement(s) executed by such
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<PAGE> 16
Lender and its Assignee Lender(s) and delivered pursuant to Section 12.11.
Person shall mean any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.
Plan shall mean any Pension Plan or Welfare Plan.
Quarterly Payment Date shall mean the last day of each March, June,
September, and December or, if any such day is not a Business Day, the next
succeeding Business Day.
Quarterly Statement Blank shall mean the quarterly statement of the
conditions and affairs of each Title Insurance Subsidiary in the form
prescribed by its applicable State regulatory authority for title insurance
companies and prepared in accordance with applicable statutory accounting
principles.
Reference Rate Loan shall mean the Notes while bearing interest at a
fluctuating rate determined by reference to the Alternate Reference Rate.
Required Lenders shall mean, at any time, Lenders holding at least 64%
of the then aggregate outstanding principal amount of the Notes then held by
the Lenders, or, if no such principal amount is then outstanding, Lenders
having at least 64% of the Commitments.
Restricted Payments is defined in Section 8.10.
Safeco Note shall mean that certain Term Note dated January 22, 1987
in the original principal amount of $46,000,000 executed by the Company to the
order of Continental.
Scheduled Properties shall mean the real property listed on Exhibit D
hereto.
Security Union shall mean Security Union Title Insurance Company, a
California corporation.
SSC - see Recitals.
Statutory Premium Reserve shall mean as at the end of any fiscal
quarter all amounts on a combined basis for the Title Insurance Subsidiaries
which would be shown as "statutory premium reserve" on line 2(a), page 3 of the
Form 9 Annual Statement Blank and the Quarterly Statement Blank of the Title
Insurance Subsidiaries as at such date (or the equivalent item if the forms of
said Annual Statement Blank or Quarterly Statement Blank shall be amended).
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<PAGE> 17
Statutory Surplus shall mean as at the end of any fiscal quarter the
combined surplus of all Title Insurance Subsidiaries, computed for them in the
same manner as the item that is required to be filed as "Surplus as Regards
Policy Holders" on line 22, page 3 of the Form 9 Annual Statement Blank and the
Quarterly Statement Blank of the Title Insurance Subsidiaries as at such date
(or the equivalent item if the forms of said Annual Statement Blank or
Quarterly Statement Blank shall be amended).
Subsidiary shall mean a corporation of which the Company and/or its
other Subsidiaries own, directly or indirectly, such number of outstanding
shares as have more than 50% of the ordinary voting power for the election of
directors.
Taxes is defined in Section 6.6.
TFC - see Recitals.
TI- see Recitals.
TICOR Acquisition shall mean the acquisition by the Company of the
stock of TI, SSC, TFC and the Inactive Companies pursuant to the terms of the
Acquisition Agreement.
Title Insurance Subsidiaries shall mean CTI, Security Union and TI;
provided, however, that in the event a Subsidiary of CTI, Security Union or TT
in existence on the date of execution and delivery hereof subsequently becomes
a direct Subsidiary of the Company, the term "Title Insurance Subsidiaries"
shall mean CTI, Security Union, TT and such Subsidiary. In determining
compliance by the Title Insurance Subsidiaries with the various covenants
applicable to them in Section 8, such determinations shall be based on
applicable statutory accounting principles applied on a basis consistent with
those at the time in effect. It is understood and agreed that statutory
accounting principles require that all Subsidiaries of Title Insurance
Subsidiaries be carried on the books of such Title Insurance Subsidiaries on a
statutory equity basis.
TMIC Release shall mean collectively the releases of the Acquired
Companies by or on behalf of the liquidator of TMIC Insurance Company, Inc.
certain claimants as listed in Schedule 5.7 to the Acquisition Agreement and
any and all persons claiming through TMIC Insurance Company, Inc. or otherwise
in respect of a policy of insurance issued by TMIC Insurance Company, Inc. and
TMIC Insurance Company, Inc. and the Order of the Superior Court, State of
California for the County of Los Angeles dated February 21, 1991 entered in
Case Nos. C 595 096, C 659 661, C 662 440 and C 732 380 relating to the
liquidation of TMIC Insurance Company, Inc.
"TT" - see Recitals.
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<PAGE> 18
Unmatured Event of Default shall mean any event which if it continues
uncured will, with lapse of time or notice or lapse of time and notice,
constitute an Event of Default.
Unrestricted Assets shall mean cash and marketable securities
(including, without limitation, assets pledged to secure trust and escrow
deposits), mortgages and non-operating real estate (including, without
limitation, claims acquired properties).
Welfare Plan shall mean a "welfare plan", as such term is defined in
section 3(1) of ERISA.
Westwood - see Recitals.
SECTION 1.2 Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each Note,
Continuation/Conversion Notice, notice and other communication delivered from
time to time in connection with this Agreement.
SECTION 1.3 Cross-References. Unless otherwise specified, references
in this Agreement and in each other Loan Document to any Section are references
to such Section of this Agreement.
SECTION 1.4 Accounting Terms; Financial Statements. All accounting
terms used herein but not expressly defined in this Agreement have the
respective meanings given to them in accordance with generally accepted
accounting principles. Unless otherwise provided herein, all computations and
determinations for purposes of determining compliance with the financial
requirements of this Agreement shall be made in accordance with generally
accepted accounting principles on a basis consistent with those at the time in
effect.
SECTION 2. COMMITMENT OF THE LENDERS; CONDITIONS.
SECTION 2.1 Commitment. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make a loan (individually a "Loan"
and collectively the "Loans") on or before December 31, 1993 (the "Loan Date"),
as the Company may request, in an amount equal to such Lender's Percentage
times the aggregate amount requested by the Company from all Lenders. The
aggregate principal amount of the Loans which all Lenders shall be committed to
make to the Company shall not exceed $71,000,000. Each Lender's Loan shall be
disbursed in a single drawing, and once repaid may not be reborrowed.
SECTION 2.2 Borrowing Procedure. The Agent shall receive on or
before 10:00 a.m. (Chicago time) at least three Business Days' prior notice
from the Company of the proposed borrowing hereunder,
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<PAGE> 19
which shall be confirmed promptly in writing. On or before 11:00 a.m. (Chicago
time) on the Loan Date, each Lender shall deposit with the Agent same day funds
in an amount equal to such Lender's Percentage of the requested Loan. Such
deposit will be made to an account which the Agent shall specify by notice to
the Lenders; provided, to the extent such Lenders Loan hereunder exceeds the
amount of its Original Loan, such Lender shall apply the proceeds of such Loan
to the payment of the outstanding principal of its Original Loan and only an
amount equal to the difference between the principal to be borrowed and the
principal to be repaid on the Original Loan shall be made available by such
Lender to the Agent. To the extent funds are received from the Lenders, the
Agent shall make such funds available to the Company by wire transfer to the
account the Company shall have specified. No Lender's obligation to make its
Loan hereunder shall be affected by any other Lender's failure to make its
Loan.
SECTION 2.3 Conditions to the Loan. Notwithstanding any other
provision of this Agreement, no Lender shall be required to make the Loans
provided for hereunder if the conditions precedent to the making of the Loans
specified in Section 9 have not been satisfied.
SECTION 3. NOTES EVIDENCING THE LOAN.
SECTION 3.1 Notes. Each Lender's Loan shall be evidenced by a Note
with appropriate insertions, dated the date hereof and payable to the order of
such Lender in the original principal amount equal to such Lender's Percentage
of the Commitment Amount. The Company hereby irrevocably authorizes each
Lender to make (or cause to be made) appropriate notations on the grid attached
to such Lender's Note (or on any continuation of such grid) or in such Lender's
books and records, which notations, if made, shall evidence, inter alia, the
date of, the outstanding principal of, and the interest rate and Interest
Period applicable to the Loan evidenced thereby. Such notations shall be
conclusive and binding on the Company absent manifest error; provided, however,
that the failure of any Lender to make any such notations shall not limit or
otherwise affect any Obligations of the Company.
SECTION 3.2 Maturity of Notes. The Company shall, on each Annual
Payment Date set forth below, make a scheduled repayment of the aggregate
outstanding principal amount of the Notes in the amount shown below opposite
such Annual Payment Date:
<TABLE>
<S> <C>
12/31/94 $10,500,000
12/31/95 $10,500,000
12/31/96 $10,500,000
12/31/97 $10,500,000
12/31/98 $ 9,666,666
</TABLE>
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<PAGE> 20
<TABLE>
<S> <C>
12/31/99 $ 9,666,666
12/31/00 $ 9,666,668
</TABLE>
provided, however, that if the original principal amount of the Loans is less
than $71,000,000 the payment amounts in years 1998, 1999 and 2000 shall be
appropriately prorated.
SECTION 3.3 Prepayment. The Company may prepay the Notes in whole or
in part at any time upon not less than three Business Days' notice to the Agent
on any Quarterly Payment Date provided the Company makes any payments required
by Section 6.4. Such prepayment may also be made on any other date upon not
less than three Business Days' notice to the Agent and payment of all accrued
interest thereon and any payments required by Section 6.4. Any partial
prepayment shall, at the option of the Company, be applied either pro rata to
the 1998, 1999 and 2000 installments or pro rata to the then remaining
installments. Any amount so prepaid may not be reborrowed.
SECTION 4. INTEREST.
SECTION 4.1 Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Agent on or before 10:00 a.m. (Chicago
time) on a Business Day, the Company may from time to time irrevocably elect,
on not less than three nor more than five Business Days notice before the end
of the then current Interest Period that the Notes be, in the case of a
Reference Rate Loan, converted into a LIBO Rate Loan or, in the case of LIBO
Rate Loan, be converted into a Reference Rate Loan or continued as a LIBO Rate
Loan. In the absence of delivery of a Continuation/Conversion Notice with
respect to any LIBO Rate Loan at least three Business Days before the last day
of the then current Interest Period with respect thereto, such LIBO Rate Loan
shall, on such last day, automatically convert to a Reference Rate Loan;
provided, however, that no Loan may be continued as, or be converted into a
LIBO Rate Loan when any Event of Default has occurred and is continuing.
SECTION 4.2 Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert a LIBO Rate Loan hereunder by causing
one of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of the Company to repay such
LIBO Rate Loan shall nevertheless be to such Lender for the account of such
foreign branch, Affiliate or international banking facility. In addition, the
Company hereby consents and agrees that, for purposes of any determination to
be made for purposes of Sections 6.1, 6.2, 6.3 or 6.4, it shall be conclusively
assumed that each Lender elected to fund all LIBO Rate Loans by purchasing,
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<PAGE> 21
as the case may be, Dollar certificates of deposit in the U.S. or Dollar
deposits in its LIBOR Office's interbank eurodollar market.
SECTION 4.3 Interest Provisions. Interest on the outstanding
principal amount of the Notes shall accrue and be payable in accordance with
this Section 4.3.
SECTION 4.3.1 Rates. Pursuant to an appropriately delivered
Continuation/Conversion Notice, the Company may elect that the Notes accrue
interest at a rate per annum:
(a) during any period maintained from time to time as a
Reference Rate Loan, equal to the Alternate Reference Rate from time to time in
effect; and
(b) during any period maintained as a LIBO Rate Loan,
during each Interest Period applicable thereto, equal to the sum of the LIBO
Rate (Reserve Adjusted) for such Interest Period plus a margin of .625%.
SECTION 4.3.2 Post-Maturity Rates. After the date any principal
amount of the Notes is due and payable (whether on the Annual Payment Date,
upon acceleration or otherwise), or after any other monetary Obligation of the
Company shall have become due and payable, the Company shall pay, but only to
the extent permitted by law, interest (after as well as before judgment) on
such amounts at a rate per annum equal to the Alternate Reference Rate plus a
margin of 2%.
SECTION 4.3.3 Payment Dates. Interest accrued on each Note shall be
payable, without duplication:
(a) on the date of any payment or prepayment of principal
outstanding on the Notes;
(b) with respect to Reference Rate Loans, on each
Quarterly Payment Date occurring after the Loan Date;
(c) with respect to LIBO Rate Loans, the last day of each
applicable Interest Period (and, if such Interest Period shall exceed 90 days,
on the 90th day of such Interest Period);
(d) with respect to any Reference Rate Loans converted
into LIBO Rate Loans on a day when interest would not otherwise have been
payable pursuant to clause (b), on the date of such conversion; and
(e) on that portion of the Notes the Annual Payment Date
of which is accelerated pursuant to Section 10.2 immediately upon such
acceleration.
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<PAGE> 22
Interest accrued on the Notes or other monetary Obligations arising under this
Agreement or any other Loan Documents after the date such amount is due and
payable (whether on the Annual Payment Date, upon acceleration or otherwise)
shall be payable upon demand.
SECTION 5. FEES.
SECTION 5.1 Fees. The Company agrees to pay the fees set forth in
this Section 5. All such fees shall be non-refundable.
SECTION 5.2 Commitment Fee. The Company agrees to pay to the Agent
for the account of each Lender on the Loan Date, such fee as is set forth in
that certain letter agreement dated December 7, 1993 between the Agent and such
Lender.
SECTION 5.3 Agent's Fee. The Company agrees to pay to the Agent for
its own account fees in the respective amounts equal to the amounts previously
agreed to in separate writings by the Company and the Agent.
SECTION 6. CERTAIN LIBO RATE AND OTHER PROVISIONS.
SECTION 6.1 Fixed Rate Lending Unlawful. If any Lender shall
determine (which determination shall, upon notice thereof to the Company, the
Agent and the Lenders, be conclusive and binding on the Company) that the
introduction of or any change in or in the interpretation of any law makes it
unlawful, or any central bank or other governmental authority asserts that it
is unlawful, for such Lender to make, continue or maintain any Loan as, or to
convert its Notes into, a LIBO Rate Loan, the obligations of all Lenders to
make, continue, maintain or convert their LIBO Rate Loans shall, upon such
determination, forthwith be suspended until such Lender shall notify the Agent
that the circumstances causing such suspension no longer exist, and all LIBO
Rate Loans shall automatically convert into Reference Rate Loans at the end of
the then current Interest Period with respect thereto or sooner, if required by
such law or assertion. In the event of a determination pursuant to this
Section 6.1, the Lenders agree to discuss alternate funding options with the
Company.
SECTION 6.2 Deposits Unavailable. If the Agent shall have been
informed by either Continental or Lenders holding 51% of the then aggregate
outstanding principal amount of the Notes that
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available in the relevant market; or
(b) by reason of circumstances affecting Continental's
relevant market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans,
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<PAGE> 23
then, upon notice from the Agent to the Company and the Lenders, the
obligations of all Lenders under Section 4.1 to make or continue any Loans as,
or to convert any Loans into, LIBO Rate Loans shall forthwith be suspended
until the Agent shall notify the Company and the Lenders that the circumstances
causing such suspension no longer exist.
SECTION 6.3 Increased LIBO Rate Loan Costs, etc.
(a) The Company agrees to reimburse each Lender for any
increase in the cost to such Lender of, or any reduction in the amount of any
sum receivable by such Lender in respect of, making, continuing or maintaining
(or of its obligation to make, continue or maintain) its Notes as, or of
converting (or of its obligation to convert) its Notes into, a LIBO Rate Loan.
Such Lender shall promptly notify the Agent and the Company in writing of the
occurrence of any such event, such notice to state, in reasonable detail, the
reasons therefor and the additional amount required fully to compensate such
Lender for such increased cost or reduced amount. Such additional amounts
shall be payable by the Company directly to such Lender within five days of its
receipt of such notice, and such notice shall, in the absence of manifest
error, be conclusive and binding on the Company.
(b) Each Lender agrees, to the extent practicable, to
designate a different office of such Lender as its LIBOR Office or take such
other appropriate action if such designation or other action would effect
compliance with the law or regulation or interpretation thereof or the request,
directive, guideline or policy invoking provisions of this Section 6.3 or
Section 6.1; provided, however, that such designation need not be made and such
other action need not be taken, if it would result in any material additional
costs, expenses or risks to such Lender that are not reimbursed or indemnified
by the Company or if it would be in any other material respect contrary to
sound banking practice.
SECTION 6.4 Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain its Notes as, or to convert its Notes into, a
LIBO Rate Loan) as a result of
(a) any conversion or repayment or prepayment of the
principal amount of any LIBO Rate Loan on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to Section 3.2
or otherwise; or
(b) the Notes not being continued as, or converted into,
LIBO Rate Loans in accordance with the Continuation/Conversion Notice therefor,
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<PAGE> 24
then, upon the written notice of such Lender to the Company (with a copy to the
Agent), the Company shall, within five days of its receipt thereof, pay
directly to such Lender such amount as will (in the reasonable determination of
such Lender) reimburse such Lender for such loss or expense. Such written
notice (which shall include calculations in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on the Company.
SECTION 6.5 Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority (including, without limitation, any law, rule,
regulation, guideline, interpretation, directive or policy heretofore or
hereafter made or issued by any government or governmental or supervisory
authority implementing the proposals for a risk-based capital framework
described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July, 1988) affects or would affect
the amount of capital required or expected to be maintained by any Lender or
any Person controlling such Lender, and such Lender determines (in its sole and
absolute discretion) that the rate of return on its or such controlling
Person's capital as a consequence of its Commitment or the Loans made by such
Lender is reduced to a level below that which such Lender or such controlling
Person could have achieved but for the occurrence of any such circumstance,
then, in any such case upon notice from time to time by such Lender to the
Company, the Company shall immediately pay directly to such Lender additional
amounts sufficient to compensate such Lender or such controlling Person for
such reduction in rate of return. A statement of such Lender as to any such
additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Company. In determining such amount, such Lender may use any method of
averaging and attribution that it (in its sole and absolute discretion) shall
deem applicable.
SECTION 6.6 Taxes. All payments by the Company of principal of, and
interest on, the Notes and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender's net
income or receipts (such non-excluded items being called "Taxes"). In the
event that any withholding or deduction from any payment to be made by the
Company hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Company will
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<PAGE> 25
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the Agent for the account of the Lenders such
additional amount or amounts as is necessary to ensure that the net amount
actually received by each Lender will equal the full amount such Lender would
have received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or any Lender
with respect to any payment received by the Agent or such Lender hereunder, the
Agent or such Lender may pay such Taxes and the Company will promptly pay such
additional amounts (including any penalties, interest or expenses) as is
necessary in order that the net amount received by such Person after the
payment of such Taxes (including any Taxes on such additional amount) shall
equal the amount such Person would have received had not such Taxes been
asserted.
If the Company fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lenders, the required receipts or other required documentary
evidence, the Company shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure. For purposes of this Section 6.6, a distribution hereunder by the
Agent or any Lender to or for the account of any Lender shall be deemed a
payment by the Company.
Upon the request of the Company or the Agent, each Lender that is
organized under the laws of a jurisdiction other than the United States shall,
prior to the due date of any payments under the Notes, execute and deliver to
the Company and the Agent, on or about the first scheduled payment date in each
fiscal year, one or more (as the Company or the Agent may reasonably request)
United States Internal Revenue Service Forms 4224 or Forms 1001 or such other
forms or documents (or successor forms or documents), appropriately completed,
as may be applicable to establish the extent, if any, to which a payment to
such Lender is exempt from withholding or deduction of Taxes.
SECTION 6.7 Payments, Computations, etc. Unless otherwise expressly
provided, all payments by the Company pursuant to this Agreement or the Notes
shall be made by the Company to the Agent for the pro rata account of the
Lenders entitled to receive such payment. All such payments required to be
made to the Agent shall be made, without setoff, deduction or counterclaim, not
later than
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11:00 a.m. (Chicago time) on the date due, in same day or immediately available
funds, to such account as the Agent shall specify from time to time by notice
to the Company; provided that such payment shall not be a waiver by the Company
of any right of setoff, deduction or counterclaim. Funds received after that
time shall be deemed to have been received by the Agent on the next succeeding
Business Day. The Agent shall promptly remit in same day funds to each Lender
its share, if any, of such payments received by the Agent for the account of
such Lender. All interest and fees shall be computed on the basis of the
actual number of days (including the first day but excluding the last day)
occurring during the period for which such interest or fee is payable over a
year comprised of (i) in the case of LIBO Rate Loans, 360 days and (ii) in the
case of Reference Rate Loans or fees, 365 days. Whenever any payment to be
made shall otherwise be due on a day which is not a Business Day, such payment
shall (except as otherwise required by clause (a) of the definition of the term
"Interest Period" with respect to LIBO Rate Loans) be made on the next
succeeding Business Day and such extension of time shall be included in
computing interest and fees, if any, in connection with such payment.
SECTION 6.8 Sharing of Payments. If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Loan (other than pursuant to the terms
of Sections 6.3, 6.4 and 6.5) in excess of its pro rata share of payments then
or therewith obtained by all Lenders, such Lender shall purchase from the other
Lenders such participations in their Notes as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing Lender,
the purchase shall be rescinded and each Lender which has sold a participation
to the purchasing Lender shall repay to the purchasing Lender the purchase
price to the ratable extent of such recovery together with an amount equal to
such selling Lender's ratable share (according to the proportion of
(a) the amount of such selling Lender's required
repayment to the purchasing Lender
to
(b) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Company agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section may,
to the fullest extent
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<PAGE> 27
permitted by law, exercise all its rights of payment (including pursuant to
Section 6.9) with respect to such participation as fully as if such Lender were
the direct creditor of the Company in the amount of such participation. If
under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this Section applies,
such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders
entitled under this Section to share in the benefits of any recovery on such
secured claim.
SECTION 6.9 Setoff. Each Lender shall, upon the occurrence of any
Default described in Section 10.1.3 or any other Event of Default, have the
right to appropriate and apply to the payment of the Obligations owing to it
(whether or not then due), and (as security for such Obligations) the Company
hereby grants to each Lender a continuing security interest in, any and all
balances, credits, deposits, accounts or moneys of the Company (other than
accounts held in a fiduciary capacity) then or thereafter maintained with such
Lender; provided, however, that any such appropriation and application shall be
subject to the provisions of Section 6.8. Each Lender agrees promptly to
notify the Company and the Agent after any such setoff and application made by
such Lender; provided, however, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each Lender
under this Section are in addition to other rights and remedies (including
other rights of setoff under applicable law or otherwise) which such Lender may
have.
SECTION 6.10 Use of Proceeds. The Company will apply the proceeds of
the Loans to repay the Original Loans and the Safeco Note; without limiting the
foregoing, no proceeds of any Loan will be used to acquire any equity security
of a class which is registered pursuant to Section 12 of the Securities
Exchange Act of 1934 or any "margin stock", as defined in Regulation U of the
Board of Governors of the Federal Reserve System.
SECTION 7. WARRANTIES. To induce the Lenders and the Agent to enter
into this Agreement and to make the Loans hereunder, the Company represents and
warrants unto the Agent and each Lender that:
SECTION 7.1 Organization, etc. The Company is a corporation duly
existing and in good standing under the laws of the State of Illinois; each
Subsidiary is a corporation duly existing and in good standing under the laws
of the state of its respective incorporation; the Company and each Subsidiary
is duly qualified and in good standing as a foreign corporation authorized to
do business in each jurisdiction where the failure to be so qualified would
have a material adverse effect on the operation of the Company or such
Subsidiary; and the Company has full power and
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authority and holds all requisite governmental licenses, permits and other
approvals to own and hold its properties and to conduct its business
substantially as currently conducted by it and after giving effect to the TICOR
Acquisition.
SECTION 7.2 Authorization; No Conflict. The execution and delivery
of the Acquisition Agreement and this Agreement, the borrowing hereunder, the
execution and delivery of the Notes, and the performance by the Company of its
obligations under the Acquisition Agreement, this Agreement and the Notes, are
within the Company's corporate powers, have been duly authorized by all
necessary corporate action on the part of the Company, and, subject to the
receipt on or before the Loan Date of all necessary governmental approvals, do
not and will not contravene or conflict with any provision of law, governmental
regulation or court decree or order to which the Company is subject or of the
charter or by-laws of the Company or of any agreement binding upon the Company,
or result in or require the imposition of, a lien on any of the Company's or
its Subsidiaries properties.
SECTION 7.3 Validity and Binding Nature. The Acquisition Agreement
and this Agreement are, and the Notes when duly executed and delivered will be,
legal, valid and binding obligations of the Company enforceable against the
Company in accordance with their respective terms.
SECTION 7.4 Financial Statements. The Company's audited consolidated
financial statements as at December 31, 1992 and its unaudited consolidated
income statement as at September 30, 1993, copies of which have been furnished
to the Lenders, have been prepared in conformity with generally accepted
accounting principles applied on a basis consistent with that of the preceding
fiscal year, and present fairly the financial condition of the Company and its
Subsidiaries as at December 31, 1992 and the results of their operations for
the periods ended December 31, 1992 and September 30, 1993 (subject, as to the
unaudited consolidated income statement as at September 30, 1993, to normal
recurring year-end adjustments); and since September 30, 1993 there has been no
material adverse change in their financial condition or operations. Each of
the Annual Statement Blank for CTI and Security Union as at December 31, 1992,
copies of which have been furnished to the Lenders, has been prepared in
conformity with applicable statutory accounting principles applied on a basis
consistent with that of the preceding fiscal year, and presents fairly the
financial condition of CTI or Security Union, as the case may be, as at such
date and the results of their operations for the period then ended, and since
such date there has been no material adverse change in their statutory
condition as reflected in such Annual Statement Blank.
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SECTION 7.5 Litigation and Contingent Liabilities. Schedule 7.5
hereto sets forth a list, as of the date specified, of all pending litigation,
including, without limitation, title insurance claims and claims arising under
Environmental Laws, which, if adversely determined, are likely to result in a
judgment in any one case against the Company or any Subsidiary of $100,000 or
more over and above any applicable insurance coverage. All pending litigation,
including, without limitation, title insurance claims and claims arising under
Environmental Laws, which, if adversely determined, is likely to result in a
judgment in any one case against the Company or any Subsidiary of less than
$100,000 over and above any applicable insurance coverage does not exceed
$15,000,000 in the aggregate. Except as set forth in such Schedule, no
litigation (including, without limitation, derivative actions), arbitration
proceedings or governmental proceedings are pending or, to the best knowledge
of the Company, threatened against the Company or any Subsidiary which would,
if adversely determined, materially and adversely affect the financial
condition or continued operations of the Company and its Subsidiaries, taken as
a whole. Other than any liability incident to such litigation or proceedings
and contingent liabilities of the Title Insurance Subsidiaries incurred in the
ordinary course of their business, neither the Company nor its Subsidiaries
have any contingent liabilities which would have a material adverse effect on
the financial condition or operations of the Company and its Subsidiaries,
taken as a whole, which are not provided for or disclosed in the financial
statements referred to in Section 7.4.
SECTION 7.6 Liens. None of the assets of the Company or any
Subsidiary is subject to any mortgage, pledge, title retention lien, or other
lien, encumbrance or security interest, except as permitted under Section 8.12.
SECTION 7.7 Subsidiaries. The Company has no Subsidiaries except
those listed in Schedule 7.7.
SECTION 7.8 Investment Company Act. The Company is not an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
SECTION 7.9 Public Utility Holding Company Act. Neither the Company
nor any Subsidiary is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate", of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
SECTION 7.10 Regulation U. The Company is not engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying
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margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System).
SECTION 7.11 Acquisition Agreement. The Company has furnished to the
Agent a conformed copy of the Acquisition Agreement and all agreements executed
in connection therewith.
SECTION 7.12 Ownership of Properties. The Company and each of its
Subsidiaries owns good and marketable title to all of its properties and
assets, real and personal, tangible and intangible, of any nature whatsoever
(including patents, trademarks, trade names, service marks and copyrights),
free and clear of all liens, charges or claims (including infringement claims
with respect to patents, trademarks, copyrights and the like) except as
permitted pursuant to Section 8.12. The Company and each of its Subsidiaries
is in compliance with all material requirements of law, including Environmental
Laws, and all terms and provisions of all contracts and other instruments
binding upon the Company or any of its properties or other assets, the failure
to comply with which would have a material adverse effect on the ability of the
Company to perform its obligations under or with respect to this Agreement or
the other Loan Documents.
SECTION 7.13 Taxes. The Company and each of its Subsidiaries have
filed all tax returns and reports required by law to have been filed by it and
has paid all taxes and governmental charges thereby shown to be owing, except
any such taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
generally accepted accounting principles shall have been set aside on its
books.
SECTION 7.14 Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement and prior to the Loan Date, no steps have been taken to
terminate any plan, and no contribution failure has occurred with respect to
any Pension Plan sufficient to give rise to a lien under section 302(f) of
ERISA. No condition exists or event or transaction has occurred with respect
to any Pension Plan which might result in the incurrence by the Company or any
member of the Controlled Group of any material liability, fine or penalty.
Except as disclosed in Schedule 7.14, neither the Company nor any member of the
Controlled Group has any contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.
SECTION 7.15 Accuracy of Information. All factual information
heretofore or contemporaneously furnished by or on behalf of the Company in
writing to the Agent or any Lender for purposes of or in connection with this
Agreement or any transaction
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contemplated hereby (including the TICOR Acquisition) is, and all other such
factual information hereafter furnished by or on behalf of the Company to the
Agent or any Lender will be, true and accurate in every material respect on the
date as of which such information is dated or certified and as of the date of
execution and delivery of this Agreement by the Agent and such Lender, and such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary to make such information not misleading.
SECTION 8. COMPANY'S COVENANTS.
Until the expiration or termination of the Commitment and thereafter
until all obligations of the Company hereunder are performed and all
obligations under the Notes are paid in full, the Company agrees that it will:
SECTION 8.1 Reports, Certificates and Other Information. Furnish to
the Agent (with sufficient copies for the Lenders):
SECTION 8.1.1 Company Audit Report. Within 90 days after each fiscal
year of the Company, a copy of an annual audit report of the Company and its
Subsidiaries prepared on a consolidated basis and in conformity with generally
accepted accounting principles applied on a basis consistent (to the extent
possible) with the audited consolidated financial statements of the Company and
its Subsidiaries as at December 31, 1992, duly certified by independent
certified public accountants of recognized standing selected by the Company,
together with (i) a certificate from such accountants containing a computation
(prepared either by such accountants or the Company) of, and showing compliance
with, each of the financial ratios and restrictions contained in this Section 8
and to the effect that, in making the examination necessary for the signing of
such annual audit report by such accountants, they have not become aware of any
Event of Default or Unmatured Event of Default that has occurred and is
continuing, or if they have become aware of any such event, describing it and
the steps, if any, being taken by the Company to cure it and (ii) a letter
addressed to the Company, the Agent and the Lenders from such accountants
stating that such accountants have been informed that a primary intent of the
Company was that the professional services performed by such accountants in
preparing their audit report was to benefit or influence the Agent and Lenders,
and that the Agent and the Lenders will be entitled to rely upon the services
provided by such accountants to the Company.
SECTION 8.1.2 Annual Company Unaudited Statements. Within 90 days
after each fiscal year of the Company, a copy of its unaudited balance sheet as
at the end of such fiscal year and a statement of earnings for such fiscal
year, prepared on an unconsolidated basis and signed by a proper accounting
officer of the Company.
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SECTION 8.1.3 Company Interim Reports. Within 60 days after each
quarter (except the last quarter) of each fiscal year of the Company, a copy of
unaudited financial statements of the Company and its Subsidiaries prepared in
the same manner as the audit report referred to in Section 8.1.1, subject to
normal recurring year-end adjustments, signed by a proper accounting officer of
the Company and consisting of at least a balance sheet as at the close of such
quarter and statements of earnings and statement of cash flows for the period
from the beginning of such fiscal year to the close of such quarter; provided,
however, that such unaudited financial statements need not be more detailed
than what would be required for a quarterly report to the Securities and
Exchange Commission on Form 10-Q.
SECTION 8.1.4 Certificates. Contemporaneously with the furnishing of
a copy of each annual Company audit report and of each set of quarterly Company
statements provided for in this Section 8.1, a certificate dated the date of
such annual report or such set of quarterly statements and signed by the
President, the chief financial officer or the Treasurer of the Company, to the
effect that no Event of Default, or Unmatured Event of Default, has occurred
and is continuing, or, if there is any such an event, describing it and the
steps, if any, being taken to cure it and containing (except in the case of the
certificate dated the date of such annual report) a computation of, and showing
compliance with, each of the financial ratios and restrictions contained in
this Section 8 and a statement of the maximum amount of any Investment
Borrowings during such quarter and that the security therefor consisted of
Approved Investments.
SECTION 8.1.5 Annual Statement Blanks. Within 90 days after each
fiscal year of each Title Insurance Subsidiary, a copy of its Annual Statement
Blank filed with its applicable State regulatory commission for such fiscal
year and prepared in accordance with applicable statutory accounting
requirements from time to time in effect.
SECTION 8.1.6 Quarterly Statement Blanks. Within 60 days after each
quarter (except the last quarter) of each fiscal quarter of each Title
Insurance Subsidiary, a copy of its Quarterly Statement Blank filed with its
applicable State regulatory commission for such fiscal quarter and prepared in
accordance with applicable statutory accounting requirements from time to time
in effect.
SECTION 8.1.7 Notice of Default and Litigation. Forthwith upon
learning of the occurrence of any of the following, written notice thereof,
describing the same and the steps being taken by the Company or the Subsidiary
affected with respect thereto: (i) the occurrence of an Event of Default or an
Unmatured Event of Default, or (ii) the institution of, or any adverse
determination
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in, any litigation, arbitration proceeding or governmental proceeding which
would have, or has, a material adverse effect on the financial condition or
operations of the Company and its Subsidiaries taken as a whole.
SECTION 8.1.8 Subsidiaries. Contemporaneously with the furnishing of
a copy of each annual audit report of the Company pursuant to Section 8.1.1, a
written report of any changes in the list of Subsidiaries.
SECTION 8.1.9 ERISA. Immediately upon becoming aware of the
institution of any steps by the Company or any other Person to terminate any
Pension Plan, or the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a lien under section 302(f)
of ERISA, or the taking of any action with respect to a Pension Plan which
could result in the requirement that the Company furnish a bond or other
security to the PBGC or such Pension Plan, which could result in the incurrence
by the Company of any material liability, fine or penalty, or any material
increase in the contingent liability Welfare Plan benefit, notice thereof and
copies of all documentation relating thereto.
SECTION 8.1.10 Additional Information. Such other information
respecting the conditions or operations, financial or otherwise, of the Company
or any of its Subsidiaries as any Lender through the Agent may from time to
time reasonably request.
SECTION 8.2 Books, Records and Inspections. Maintain, and cause each
Subsidiary to maintain, complete and accurate books and records; permit, and
cause each Subsidiary to permit, access by the Agent and each Lender to the
books and records of the Company and of any Subsidiary; provided, however, that
such access shall not unreasonably interfere with the normal business
operations of the Company or such Subsidiary.
SECTION 8.3 Insurance. Maintain, and cause each Subsidiary to
maintain, such insurance as may be required by law and such other insurance, to
such extent as is reasonably available (as determined by the Company) and
against such hazards and liabilities, as is customarily maintained by companies
similarly situated; provided, however, that, in lieu of or supplemental to any
insurance referred to in this Section 8.3., the Company may adopt such other
plan or method of protection in respect of its properties or other risks,
whether by establishment of an insurance fund or reserve or by otherwise
conforming to the practices of similar companies maintaining systems of
self-insurance, as may be determined by the Company in its reasonable business
judgment.
SECTION 8.4 Taxes. Pay, and cause each Subsidiary to pay, when due
all taxes, assessments, and other governmental charges or levies imposed upon
it, as well as all lawful claims for labor,
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materials, and supplies or otherwise which, if unpaid, might give rise to liens
or charges upon its property, except as contested in good faith and by
appropriate proceedings and for which adequate reserves in accordance with
generally accepted accounting principles shall have been set aside on its
books.
SECTION 8.5 Consolidated Net Worth. Not permit Consolidated Net
Worth at the close of any fiscal quarter to be less than $200,000,000.
SECTION 8.6 Statutory Surplus. Not permit Statutory Surplus of the
Title Insurance Subsidiaries at the close of any fiscal quarter to be less than
$160,000,000.
SECTION 8.7 Interest Expense Coverage Ratio. Not permit the ratio
during any period of four consecutive fiscal quarters of Earnings Before
Interest and Taxes to Interest Expense to be less than 2.5 to 1.0.
SECTION 8.8 Liquidity. Not permit Cash and Marketable Securities of
the Title Insurance Subsidiaries at the close of any fiscal quarter plus Cash
and Marketable Securities of the Company on an unconsolidated basis at the
close of any fiscal quarter to be less than the Statutory Premium Reserve of
the Title Insurance Subsidiaries plus the next twelve months of Debt Service.
SECTION 8.9 Loss Reserve Ratio. Not permit the ratio as at the close
of any fiscal quarter of Loss Reserves of the Title Insurance Subsidiaries to
their Statutory Surplus to be greater than 0.9 to 1.0.
SECTION 8.10 Restricted Payments. Not purchase or redeem any shares
of the capital stock of the Company, declare or pay any dividends thereon
(other than stock dividends), make any distribution to stockholders or set
aside any funds for any such purpose, or make any loans or advances to
Affiliates which are not Subsidiaries of the Company (all of which purchases,
redemptions, declarations, payments, distributions or loans and advances
hereinabove referred to being collectively called "Restricted Payments");
provided, however, that so long as no Event of Default, or Unmatured Event of
Default, has occurred and is continuing (or would occur as the result of a
Restricted Payment hereinbelow permitted), the Company may (i) make Restricted
Payments to its parent corporation or purchase debt instruments of Affiliates
which are not Subsidiaries of the Company in amounts in the aggregate equal to
the difference between its Consolidated Net Worth as at December 31, 1990 and
$200,000,000; (ii) make Restricted Payments to its parent corporation or
purchase debt instruments of Affiliates which are not Subsidiaries of the
Company from time to time in an aggregate amount equal to all Capital
Contributions, together with all dividends, interest and earnings thereon;
(iii)
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make Restricted Payments to its parent corporation of an amount which
represents the income taxes that would have been payable by the Company and the
Subsidiaries of the Company forming part of the affiliated group for income tax
purposes if the Company had not filed consolidated income tax returns as part
of an affiliated group with Alleghany Corporation; and (iv) make Restricted
Payments to its parent corporation from Consolidated Net Income for periods
subsequent to December 31, 1990.
SECTION 8.11 Indebtedness. Not, and not permit any Subsidiary to,
incur or permit to exist any indebtedness for borrowed money, or for the
deferred purchase price of any property, or for the deferred purchase price of
any services the obligations for which would be reflected on an audited
consolidated balance sheet of the Company and its Subsidiaries (or which
contract would be reflected in the footnotes thereto, but excluding all leases
accounted for as operating leases) prepared in accordance with generally
accepted accounting principles, or under capitalized leases, except (i) the
Notes, (ii) short term indebtedness of the Company and its Subsidiaries in an
aggregate amount not in excess of $25,000,000 for working capital purposes,
provided that no such indebtedness referred to in this clause (ii) shall be
outstanding for a period of at least 2 consecutive months in each fiscal year,
(iii) indebtedness of Subsidiaries to the Company and to other Subsidiaries and
of the Company to Subsidiaries, (iv) current accounts payable arising in the
ordinary course of business, (v) Investment Borrowings, (vi) other Long-Term
Indebtedness of the Company and any Subsidiary to the extent permitted by
Section 8.15; provided, however, any such Long-Term Indebtedness of any
Subsidiary shall not exceed an aggregate amount of $12,500,000, (vii)
indebtedness incurred by Subsidiaries engaged in the title insurance business
in the ordinary course of business in aid of recoupment or reduction or
settlement of title claims and losses, provided that the principal amount of
all such indebtedness outstanding plus the then remaining Loss Reserves, if all
treated as Loss Reserves, would not result in a violation of Section 8.9,
(viii) Capitalized Lease Obligations of the Company and its Subsidiaries which
at any one time in the aggregate do not exceed an amount equal to (x)
$15,000,000, minus (y) the aggregate outstanding principal amount of
indebtedness in connection with which liens permitted by Section 8.12(i) exist,
(ix) other indebtedness outstanding on the date hereof and listed in Schedule
8.11 or hereafter incurred in connection with liens permitted by Section 8.12,
(x) indebtedness incurred by the Company in connection with any sale and
leaseback involving only Scheduled Properties or any indebtedness secured only
by a lien on Scheduled Properties, to the extent such lease or other
indebtedness is either non- recourse to the Company or the present value of
such lease payments or the principal amount of such indebtedness, as the case
may be does not exceed 75% of the appraised value of such Scheduled Properties
and (xi) in the event the Merrill Lynch Lease
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is required to be treated as a capital lease for accounting purposes, the
Merrill Lynch Lease Obligations.
SECTION 8.12 Liens. Not, and not permit any Subsidiary to, create or
permit to exist any mortgage, pledge, title retention lien, or other lien,
encumbrance or security interest with respect to any assets now owned or
hereafter acquired, except (i) in connection with the acquisition of real or
personal property after the date hereof, and attaching only to the real or
personal property being acquired, if the indebtedness of the Company and all
Subsidiaries secured thereby does not exceed in the aggregate at any one time
outstanding an amount equal to (x) $15,000,000, minus (y) the then aggregate
amount of Capitalized Lease Obligations permitted by Section 8.11(viii); (ii)
for current taxes, assessments and governmental charges or levies not
delinquent or being contested in good faith and by appropriate proceedings for
which adequate reserves have been made; (iii) liens incurred or pledges or
deposits made in connection with worker's compensation, unemployment insurance,
old-age pensions, social security and public liability and similar legislation;
(iv) liens, pledges or deposits to secure the performance of bids, tenders,
leases, contracts (other than for the repayment of borrowed money), statutory
and regulatory obligations, surety and appeal bonds and other obligations of
like nature, incurred as an incident to the ordinary course of business; (v)
statutory liens of landlords and other liens imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's and vendors' liens, incurred in good
faith in the ordinary course of business; (vi) liens arising in the ordinary
course of business for sums not due or sums being contested in good faith and
by appropriate proceedings and not involving any deposits or advances or
borrowed money or the deferred purchase price of property or services; (vii)
liens granted by any Subsidiary to secure indebtedness of such Subsidiary to
the Company or to any other Subsidiary or liens granted by the Company to
secure indebtedness of the Company to any Subsidiary; (viii) liens in
connection with Investment Borrowings; (ix) liens existing or incurred on
claims acquired property in the ordinary course of business of Subsidiaries
engaged in the title insurance business, (x) any other liens securing
indebtedness or obligations which in the aggregate do not exceed $3,000,000;
(xi) liens existing on the date hereof and disclosed on Schedule 7.6 or in the
financial statements delivered pursuant to Section 7.4 and (xii) liens granted
in connection with indebtedness permitted under Section 8.11(x).
SECTION 8.13 Mergers, Consolidations, Purchases. Not, and not permit
any Subsidiary to, be a party to any merger or consolidation, or purchase or
otherwise acquire all or substantially all of the assets or stock of any class
of, or any partnership or joint venture interest in, any other person or
entity, except for (i) any such merger or consolidation by any
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wholly-owned Subsidiary into the Company or into, with or to any other
wholly-owned Subsidiary and any such purchase or other acquisition by the
Company or any wholly-owned Subsidiary of the assets or stock of any
wholly-owned Subsidiary and (ii) any such merger, consolidation, purchase, or
other acquisition of assets or stock by the Company or any Subsidiary if (x) in
the case of a merger or consolidation involving the Company, the surviving
corporation shall be the Company, (y) as of the date of the execution of the
agreement providing for such merger, consolidation, purchase, or other
acquisition, the fair value of the consideration to be paid in connection
therewith does not exceed $35,000,000, and (z) no Event of Default or Unmatured
Event of Default shall have occurred and be continuing at the time of such
merger, consolidation, purchase, or other acquisition, or shall occur as a
result of such merger, consolidation, purchase, or other acquisition. For the
purposes of this Section 8.13, the consideration to be paid in connection with
any merger, consolidation, purchase, or other acquisition shall be valued in
accordance with generally accepted accounting principles.
SECTION 8.14 Asset Dispositions. Not, and not permit any Subsidiary
to sell, transfer, convey or lease all or any substantial part of its assets
except in the ordinary course of business; provided, however, there shall be
excluded from the restrictions of this Section 8.14 (i) sales or other
dispositions of the stock or assets of the Company or a Subsidiary required by
governmental or regulatory authorities; (ii) Net Asset Sales in an amount not
exceeding 10% of Adjusted Total Assets in each fiscal year; (iii) sales or
other dispositions of Unrestricted Assets and (iv) sales or other dispositions
of assets by a Subsidiary to the Company or another Subsidiary, or by the
Company to a Subsidiary. For purposes of this Section 8.14, sales of Scheduled
Properties shall be included in computing Net Asset Sales but the Company shall
not be in default hereunder if Net Asset Sales exceed the amount permitted by
Section 8.14(ii) solely as a result of such inclusion.
SECTION 8.15 Debt-to-Equity Ratio. Not permit the ratio as at the
close of any fiscal quarter of Long-Term Indebtedness to Consolidated Net Worth
to be greater than 0.50 to 1.0.
SECTION 8.16 Existing Business. Carry on, and cause each Subsidiary
to carry on, the title insurance, escrow and trust company businesses in
substantially the same manner as presently being conducted.
SECTION 8.17 Other Agreements. Not enter into any agreement
containing any material provision which would be violated or breached in a
material way by the performance of its obligations hereunder or under any
instrument or document delivered or to be delivered by it hereunder or in
connection herewith.
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SECTION 8.18 Merrill Lynch Lease. In the event (i) the Merrill Lynch
Lease is being treated as a capital lease for accounting purposes and (ii) the
Company elects to refinance all or any portion of the Merrill Lynch Lease with
indebtedness of the type referred to in Section 8.11(viii) and Section 8.12(i),
then (x) the dollar amount in Section 8.11(viii) and Section 8.12(i) shall be
increased by an amount equal to the lesser of $15,000,000 or the amount of such
refinancing and (y) the dollar amount in the definition of Merrill Lynch Lease
Obligations shall be reduced by an amount equal to such refinancing or such
greater amount such that from and after such refinancing, the aggregate amount
of indebtedness referred to in Section 8.11(viii) and the definition of Merrill
Lynch Lease Obligations does not exceed $30,000,000.
SECTION 9. CONDITIONS OF LENDING.
The obligation of each Lender to make its Loan is subject to the
following conditions precedent:
SECTION 9.1 Documents. The obligation of each Lender to make its
Loan is, in addition to the conditions precedent specified in Section 9.2,
subject to the condition precedent that the Agent shall have received all of
the following, each duly executed and dated as of the Loan Date, in form and
substance satisfactory to the Agent:
SECTION 9.1.1 Notes. The Agent shall have received, for the account
of each Lender, its Note duly executed and delivered by the Company.
SECTION 9.1.2 Corporate Documents. Certified copies of the articles
of incorporation and bylaws of the Company and certified copies of resolutions
of the Executive Committee of the Board of Directors of the Company authorizing
the execution, delivery and performance, respectively, of this Agreement, the
Notes, and other documents provided for in this Agreement.
SECTION 9.1.3 Payoff Letter. A payoff letter from Continental
setting forth the unpaid obligations of the Company under the Safeco Note and
the Company shall make arrangements satisfactory to the Agent as to payment in
full of the Safeco Note and the Original Loans on or before the Loan Date.
SECTION 9.1.4 Incumbency and Signatures. A certificate of the
Secretary or an Assistant Secretary of the Company certifying the names of the
officer or officers of the Company authorized to sign this Agreement and the
Notes and other documents provided for in this Agreement, together with a
sample of the true signature of each such officer.
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SECTION 9.1.5 Opinion of Counsel for the Company. The opinion of
Thomas J. Adams, General Corporate Counsel for the Company, addressed to the
Agent and the Lenders, to the effect that: (a) each of the Company and its
Subsidiaries is a corporation duly existing and in good standing under the laws
of the jurisdiction of its incorporation; (b) the Company has full corporate
power to execute, deliver and perform this Agreement, to borrow moneys
hereunder, and to execute, deliver and perform its obligations under the Notes;
(c) the execution and delivery of this Agreement and the Notes, the borrowing
hereunder, and the performance by the Company of its obligations under this
Agreement and the Notes, have been duly authorized by all necessary corporate
action, have received all governmental approvals which to counsel's knowledge,
after due inquiry, are required, and do not and will not contravene or conflict
with any provision of law to which the Company is, to counsel's knowledge,
after due inquiry, subject or of the charter or by-laws of the Company or, to
the knowledge of such counsel, after due inquiry, of any agreement binding upon
the Company; and (d) this Agreement and the Notes have been duly executed and
delivered by the Company and are legal, valid and binding obligations of the
Company, enforceable in accordance with their terms, subject, as to enforcement
of remedies, to applicable bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights in general from time to time in
effect, and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 9.1.6 Confirmatory Certificate. A certificate signed by the
President, the Chief Financial Officer or the Treasurer of the Company as to
the matters set out in Section 9.2.
SECTION 9.1.7 Accountants' Acknowledgment. A written acknowledgment
from the Company's accountants that the Agent and Lenders are and will be
entitled to rely upon the services provided by such accountants to the Company
(including, without limitation, the financial statements and other materials
prepared/audited by such accountants).
SECTION 9.1.8 Other. Such other documents as the Agent or any Lender
may reasonably request.
SECTION 9.2 Further Conditions. The obligation of each Lender to
make its Loan is subject to the following further conditions precedent: (a) no
Event of Default, or Unmatured Event of Default, has occurred and is continuing
or will result from the making of the Loan, (b) the warranties of the Company
contained in Section 7 are true and correct as of the Loan Date, with the same
effect as though made on the Loan Date, (except for the warranties made as of a
specific date, which were true and correct as of such date), and (c) all
governmental approvals and court orders that are
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necessary for the Company to consummate the transactions contemplated by this
Agreement and the Notes and to perform its obligations thereunder have been
received.
SECTION 10. EVENTS OF DEFAULT AND THEIR EFFECT.
SECTION 10.1 Events of Default. Each of the following shall
constitute an Event of Default under this Agreement:
SECTION 10.1.1 Non-Payment of Notes, etc. Default, and the
continuance thereof for 1 day, in the payment when due of any principal of the
Notes or default, and continuance thereof for 5 days, in the payment when due
of any interest on the Notes or any fees payable by the Company hereunder.
SECTION 10.1.2 Non-Payment of Other Indebtedness. Default in the
payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any other indebtedness for borrowed money or the
deferred purchase price of property of, or guaranteed by, the Company or any
Subsidiary (except any such indebtedness of any Subsidiary to the Company or to
any other Subsidiary) in excess of $5,000,000 or default in the performance or
observance of any obligation or condition with respect to any such other
indebtedness if the effect of such default is to accelerate the maturity of any
such indebtedness or to permit the holder or holders thereof, or any trustee or
agent for such holders, to cause such indebtedness to become due and payable
prior to its expressed maturity, and such default shall not have been remedied
or discharged within any applicable grace period.
SECTION 10.1.3 Bankruptcy, Insolvency, etc. The Company or any
Subsidiary admits in writing its inability to pay debts as they become due; or
the Company or any Subsidiary applies for, consents to, or acquiesces in the
appointment of, a trustee, receiver or other custodian for the Company or such
Subsidiary or any property thereof, or makes a general assignment for the
benefit of creditors; or, in the absence of such application, consent or
acquiescence, a trustee, receiver or other custodian is appointed for the
Company or any Subsidiary or for a substantial part of the property of any
thereof and is not discharged within 60 days; or any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding
(except the voluntary dissolution, not under any bankruptcy or insolvency law,
of a Subsidiary other than a Title Insurance Subsidiary), is commenced in
respect of the Company or any Subsidiary, and if such case or proceeding is not
commenced by the Company or such Subsidiary, it is consented to or acquiesced
in by the Company or such Subsidiary or remains for 60 days undismissed; or the
Company or any Subsidiary takes any corporate action to authorize, or in
furtherance of, any of the foregoing.
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SECTION 10.1.4 Non-Compliance with this Agreement. Failure by the
Company to comply with or to perform any provision of this Agreement (and not
constituting an Event of Default under any of the preceding provisions of this
Section 10) and continuance of such failure for 30 days after notice thereof to
the Company from the Agent, or from any Lender.
SECTION 10.1.5 Warranties. Any warranty made by the Company herein
is breached or is false or misleading in any material respect, or any schedule,
certificate, financial statement, report, notice, or other writing furnished by
the Company to the Agent or the Lenders is false or misleading in any material
respect, in each case on the date as of which the facts therein set forth are
stated or certified.
SECTION 10.1.6 Change of Control. Alleghany Corporation, or a
Subsidiary of Alleghany Corporation, shall not own, directly or indirectly, 51%
or more of the issued and outstanding voting capital stock of the Company.
SECTION 10.1.7 Judgments. Any judgment or order for the payment of
money in excess of $5,000,000 shall be rendered against the Company or any of
its Subsidiaries and either
(a) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order; or
(b) there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect.
SECTION 10.1.8 Pension Plans. Any of the following events shall
occur with respect to any Pension Plan
(a) the institution of any steps by the Company, any
member of its Controlled Group or any other Person to terminate a Pension Plan
if, as a result of such termination, the Company or any such member could be
required to make a contribution to such Pension Plan, or could reasonably
expect to incur a liability or obligation to such Pension Plan, in excess of
$5,000,000; or
(b) a contribution failure occurs with respect to any
Pension Plan sufficient to give rise to a lien under Section 302(f) of ERISA.
SECTION 10.2 Effect of Event of Default. If any Event of Default
described in Section 10.1.3 shall occur, the Notes shall become immediately due
and payable, all without notice of any kind; and in the case of any other Event
of Default, the Agent, upon the direction of the Required Lenders, shall by
written notice to the Company, declare the Notes to be due and payable,
whereupon the
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Notes shall become immediately due and payable, all without any other notice of
any kind.
SECTION 11. THE AGENT
SECTION 11.1 Actions. Each Lender hereby appoints Continental as its
Agent under and for purposes of this Agreement, the Notes and each other Loan
Document. Each Lender authorizes the Agent to act on behalf of such Lender
under this Agreement, the Notes and each other Loan Document and, in the
absence of other written instructions from the Required Lenders received from
time to time by the Agent (with respect to which the Agent agrees that it will
comply, except as otherwise provided in this Section or as otherwise advised by
counsel), to exercise such powers hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof, together
with such powers as may be reasonably incidental thereto. Each Lender hereby
indemnifies (which indemnity shall survive any termination of this Agreement)
the Agent, pro rata according to such Lender's Percentage, from and against any
and all liabilities, obligations, losses, damages, claims, costs or expenses of
any kind or nature whatsoever which may at any time be imposed on, incurred by,
or asserted against, the Agent in any way relating to or arising out of this
Agreement, the Notes and any other Loan Document, including reasonable
attorneys' fees, and as to which the Agent is not reimbursed by the Company;
provided, however, that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, claims, costs or
expenses which are determined by a court of competent jurisdiction in a final
proceeding to have resulted solely from the Agent's gross negligence or wilful
misconduct. The Agent shall not be required to take any action hereunder,
under the Notes or under any other Loan Document, or to prosecute or defend any
suit in respect of this Agreement, the Notes or any other Loan Document, unless
it is indemnified hereunder to its satisfaction. If any indemnity in favor of
the Agent shall be or become, in the Agent's determination, inadequate, the
Agent may call for additional indemnification from the Lenders and cease to do
the acts indemnified against hereunder until such additional indemnity is
given.
SECTION 11.2 Funding Reliance, etc. Unless the Agent shall have been
notified by telephone, confirmed in writing, by any Lender by 5:00 p.m.
(Chicago time) on the day prior to the initial borrowing hereunder that such
Lender will not make available the amount which would constitute its Percentage
of such borrowing on the date specified therefor, the Agent may assume that
such Lender has made such amount available to the Agent and, in reliance upon
such assumption, make available to the Company a corresponding amount. If and
to the extent that such Lender shall not have made such amount available to the
Agent, such Lender and the Company
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severally agree to repay the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date the Agent
made such amount available to the Company to the date such amount is repaid to
the Agent, at the Federal Funds Effective Rate applicable at the time.
SECTION 11.3 Exculpation. Neither the Agent nor any of its directors,
officers, employees or agents shall be liable to any Lender for any action
taken or omitted to be taken by it under this Agreement or any other Loan
Document, or in connection herewith or therewith, except for its own wilful
misconduct or gross negligence, nor responsible for any recitals or warranties
herein or therein, nor for the effectiveness, enforceability, validity or due
execution of this Agreement or any other Loan Document, nor to make any inquiry
respecting the performance by the Company of its obligations hereunder or under
any other Loan Document. Any such inquiry which may be made by the Agent shall
not obligate it to make any further inquiry or to take any action. The Agent
shall be entitled to rely upon advice of counsel concerning legal matters and
upon any notice, consent, certificate, statement or writing which the Agent
believes to be genuine and to have been presented by a proper Person.
SECTION 11.4 Successor. The Agent may resign as such at any time upon
at least 30 days' prior notice to the Company and all Lenders. If the Agent at
any time shall resign, the Required Lenders may appoint another Lender as a
successor Agent which shall thereupon become the Agent hereunder. If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the retiring Agent's
giving notice of resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be one of the Lenders or, with
the approval of the Company (such approval not to be unreasonably withheld), a
commercial banking institution organized under the laws of the U.S. (or any
State thereof) or a U.S. branch or agency of a commercial banking institution,
and having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall be entitled to receive from the retiring Agent such
documents of transfer and assignment as such successor Agent may reasonably
request, and shall thereupon succeed to and become vested with all rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation hereunder as the Agent, the provisions
of
(a) this Section 11 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Agent under this
Agreement; and
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(b) Section 11.3 and Section 11.4 shall continue to inure
to its benefit.
SECTION 11.5 Loans by Continental. Continental shall have the same
rights and powers with respect to (x) the Loans made by it or any of its
Affiliates, and (y) the Notes held by it or any of its Affiliates as any other
Lender and may exercise the same as if it were not the Agent. Continental and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Company or any Subsidiary or Affiliate of the
Company as if Continental were not the Agent hereunder.
SECTION 11.6 Credit Decisions. Each Lender acknowledges that it has,
independently of the Agent and each other Lender, and based on such Lender's
review of the financial information of the Company, this Agreement, the other
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such Lender
has deemed appropriate, made its own credit decision to extend its Commitment.
Each Lender also acknowledges that it will, independently of the Agent and each
other Lender, and based on such other documents, information and investigations
as it shall deem appropriate at any time, continue to make its own credit
decisions as to exercising or not exercising from time to time any rights and
privileges available to it under this Agreement or any other Loan Document.
SECTION 11.7 Copies, etc. The Agent shall give prompt notice to each
Lender of each notice or request required or permitted to be given to the Agent
by the Company pursuant to the terms of this Agreement (unless concurrently
delivered to the Lenders by the Company). The Agent will distribute to each
Lender each document or instrument received for its account and copies of all
other communications received by the Agent from the Company for distribution to
the Lenders by the Agent in accordance with the terms of this Agreement.
SECTION 11.8 Co-Agents. Each of United States National Bank of
Oregon, Bank of America National Trust and Savings Association and Harris Trust
and Savings Bank shall be deemed a Co-Agent hereunder and solely in such
capacity shall have no authority, duties or responsibilities.
SECTION 12. MISCELLANEOUS PROVISIONS
SECTION 12.1 Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Company and the Required Lenders; provided, however, that
no such amendment, modification or waiver which would:
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(a) modify any requirement hereunder that any particular
action be taken by all the Lenders or by the Required Lenders shall be
effective unless consented to by each Lender;
(b) modify this Section 12.1, change the definition of
"Required Lenders", increase the Commitment Amount or the Percentage of any
Lender or reduce any fees described in Section 5 shall be made without the
consent of each Lender and each holder of a Note;
(c) extend the due date for, or reduce the amount of, any
scheduled repayment or prepayment of principal of or interest on the Notes (or
reduce the principal amount of or rate of interest on the Notes) shall be made
without the consent of the holder of that Note; or
(d) affect adversely the interests, rights or obligations
of the Agent qua the Agent shall be made without the consent of the Agent.
No failure or delay on the part of the Agent, any Lender or the holder of any
Note in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Company in any case shall entitle it to any notice or demand in similar or
other circumstances. No waiver or approval by the Agent, any Lender or the
holder of any Note under this Agreement or any other Loan Document shall,
except as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 12.2 Notices. All notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be in
writing or by Telex or by facsimile and addressed, delivered or transmitted to
such party at its address, Telex or facsimile number set forth below its
signature hereto or set forth in the Lender Assignment Agreement or at such
other address, Telex or facsimile number as may be designated by such party in
a notice to the other parties. Any notice, if mailed and properly addressed
with postage prepaid or if properly addressed and sent by pre-paid courier
service, shall be deemed given when received; any notice, if transmitted by
Telex or facsimile, shall be deemed given when transmitted (answerback
confirmed in the case of Telexes).
SECTION 12.3 Costs, Expenses and Taxes. The Company agrees to pay on
demand all out-of-pocket costs and expenses of the Agent (including the
reasonable fees and out-of-pocket expenses of Mayer,
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Brown & Platt, counsel for the Agent and of local counsel, if any, who may be
retained by said counsel) in connection with the preparation, execution,
delivery, administration, syndication and marketing of this Agreement, the
Notes and all other instruments or documents provided for herein or delivered
or to be delivered hereunder or in connection herewith, and all out-of-pocket
costs and expenses (including reasonable attorneys' fees and legal expenses)
incurred by the Agent in connection with the enforcement of this Agreement, the
Notes, any such other instruments or documents or any collateral security. In
addition, the Company agrees to pay, and to save the Agent and the Lenders
harmless from all liability for, any stamp or other taxes (excluding franchise
taxes and taxes imposed on or measured by any Lender's net income or receipts)
which may be payable in connection with the execution or delivery of this
Agreement, the borrowing hereunder, or the issuance of the Notes or of any
other instruments or documents provided for herein or delivered or to be
delivered hereunder or in connection herewith. The Company also agrees to
reimburse the Agent and each Lender upon demand for all reasonable
out-of-pocket expenses (including attorneys' fees and legal expenses including
the allocated time charges of each Lender's legal departments, as their
respective internal counsel) incurred by the Agent or such Lender in connection
with (x) the negotiation of any restructuring or "work-out", whether or not
consummated, of any Obligations and (y) the enforcement of any Obligations.
SECTION 12.4 Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments,
the Company hereby indemnifies, exonerates and holds the Agent and each Lender
and each of their respective officers, directors, employees and agents
(collectively, the "Indemnified Parties") free and harmless from and against
any and all actions, causes of action, suits, losses, costs, liabilities and
damages, and expenses incurred in connection therewith (irrespective of whether
any such Indemnified Party is a party to the action for which indemnification
hereunder is sought), including reasonable attorneys' fees and disbursements
(collectively, the "Indemnified Liabilities"), incurred by the Indemnified
Parties or any of them as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole
or in part, directly or indirectly, with the proceeds of the Notes;
(b) the entering into and performance of this Agreement
and any other Loan Document by any of the Indemnified Parties (including any
action brought by or on behalf of the Company as the result of any
determination by the Required Lenders pursuant to Section 9 not to fund the
Loans); or
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(c) any investigation, litigation or proceeding related
to the Acquisition Agreement;
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or wilful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. Each
Indemnified Party agrees to notify the Company of any event which could give
rise to any Indemnified Liabilities and to consult with the Company to
determine the best defense with respect to the same.
SECTION 12.5 Survival. The obligations of the Company under Sections
6.3, 6.4, 6.5, 6.6, 12.3 and 12.4, and the obligations of the Lenders under
Section 11.1, shall in each case survive any termination of this Agreement, the
payment in full of all Obligations and the termination of all Commitments. The
representations and warranties made by the Company in this Agreement and in
each other Loan Document shall survive the execution and delivery of this
Agreement and each such other Loan Document.
SECTION 12.6 Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 12.7 Captions. Section captions used in this Agreement are
for convenience only, and shall not affect the construction of this Agreement.
SECTION 12.8 Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each
of which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement. This Agreement shall become effective
when counterparts hereof executed on behalf of the Company and each Lender (or
notice thereof satisfactory to the Agent) shall have been received by the Agent
and notice thereof shall have been given by the Agent to the Company and each
Lender.
SECTION 12.9 Governing Law. This Agreement and the Notes shall each
be a contract made under and governed by the internal laws of the State of
Illinois. All obligations of the Company and the rights of the Agent and any
Lender expressed herein or in the
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Notes shall be in addition to and not in limitation of those provided by
applicable law. This Agreement, the Notes and the other Loan Documents
constitute the entire understanding among the parties hereto with respect to
the subject matter hereof and supercede any prior agreements, written or oral,
with respect thereto.
SECTION 12.10 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that:
(a) the Company may not assign or transfer its rights or
obligations hereunder without the prior written consent of the Agent and all
Lenders; and
(b) the rights of sale, assignment and transfer of the
Lenders are subject to Section 12.11.
SECTION 12.11 Sale and Transfer of Notes; Participations in Notes.
Each Lender may assign, or sell participations in, its Note and Commitment to
one or more other Persons in accordance with this Section 12.11.
SECTION 12.11.1 Assignments. Any Lender,
(a) with the written consents of the Company and the
Agent (which consents shall not be unreasonably delayed or withheld and which
consent, in the case of the Company, shall be deemed to have been given in the
absence of a written notice delivered by the Company to the Agent, on or before
the tenth Business Day after receipt by the Company of such Lender's request
for consent, stating, in reasonable detail, the reasons why the Company
proposes to withhold such consent) may at any time assign and delegate to one
or more commercial banks or other financial institutions, and
(b) with notice to the Company and the Agent, but without
the consent of the Company or the Agent, may assign and delegate to any of its
Affiliates or to any other Lender
(each Person described in either of the foregoing clauses as being the Person
to whom such assignment and delegation is to be made, being hereinafter
referred to as an "Assignee Lender"), all or any fraction of such Lender's Note
and Commitment (which assignment and delegation shall be of a constant, and not
a varying, percentage of all the assigning Lender's Note and Commitment) in a
minimum aggregate amount of $4,000,000; provided, however, that any such
Assignee Lender will comply, if applicable, with the provisions contained in
the penultimate sentence of Section 6.6 and further, provided, however, that,
the Company and the Agent shall be entitled to continue to deal solely and
directly with such Lender
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in connection with the interests so assigned and delegated to an Assignee
Lender until
(i) written notice of such assignment and delegation,
together with payment instructions, addresses and related information
with respect to such Assignee Lender, shall have been given to the
Company and the Agent by such Lender and such Assignee Lender,
(ii) such Assignee Lender shall have executed and delivered
to the Company and the Agent a Lender Assignment Agreement, accepted
by the Agent, and
(iii) the processing fees described below shall have been paid.
From and after the date that the Agent accepts such Lender Assignment
Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to
have become a party hereto and to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee Lender in
connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within five Business Days after its receipt of notice that the
Agent has received an executed Lender Assignment Agreement, the Company shall
execute and deliver to the Agent (for delivery to the relevant Assignee Lender)
a new Note evidencing such Assignee Lender's assigned Note and Commitment and,
if the assignor Lender has retained a portion of its Note and its Commitment
hereunder, a replacement Note in the principal amount of the portion of the
Note and Commitment retained by the assignor Lender hereunder (such Notes to be
in exchange for, but not in payment of, that Note then held by such assignor
Lender). Each such Note shall be dated the date of the predecessor Note. The
assignor Lender shall mark the predecessor Note "exchanged" and deliver it to
the Company. Accrued interest on that part of the predecessor Note evidenced
by the new Note shall be paid as provided in the Lender Assignment Agreement.
Accrued interest on that part of the predecessor Note evidenced by the
replacement Note shall be paid to the assignor Lender. Accrued interest shall
be paid at the same time or times provided in the predecessor Note and in this
Agreement. Such assignor Lender or such Assignee Lender must also pay a
processing fee to the Agent upon delivery of any Lender Assignment Agreement in
the amount of $3,000. Any attempted assignment and delegation not made in
accordance with this Section 12.11.1 shall be null and void.
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SECTION 12.11.2 Participations. Any Lender may at any time sell to
one or more financial institutions (each of such financial institution being
herein called a "Participant") participating interests in its Note or
Commitment, or other interests of such Lender hereunder; provided, however,
that
(a) no participation contemplated in this Section 12.11
shall relieve such Lender from its Commitment or its other obligations
hereunder or under any other Loan Document,
(b) such Lender shall remain solely responsible for the
performance of its Commitment and such other obligations,
(c) the Company and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights
and obligations under this Agreement and each of the other Loan Documents,
(d) no Participant, unless such Participant is an
Affiliate of such Lender, or is itself a Lender, shall be entitled to require
such Lender to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Lender may agree with any Participant
that such Lender will not, without such Participant's consent, take any actions
of the type described in clause (b) or (c) of Section 12.1, and
(e) the Company shall not be required to pay any amount
under Section 6.6 that is greater than the amount which it would have been
required to pay had no participating interest been sold.
The Company acknowledges and agrees that each Participant, for purposes of
Sections 6.3, 6.4, 6.5, 6.6, 6.8, 6.9, 12.3 and 12.4, shall be considered a
Lender.
SECTION 12.12 Other Transactions. Nothing contained herein shall
preclude the Agent or any other Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Company or any of its Affiliates in which the Company or such
Affiliate is not restricted hereby from engaging with any other Person.
SECTION 12.13 Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE
LENDERS OR THE COMPANY SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION. THE COMPANY HEREBY EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF
ILLINOIS AND OF THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION FOR THE PURPOSE OF ANY
SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE COMPANY
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE COMPANY HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE
COMPANY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 12.14 Waiver of Jury Trial. THE AGENT, THE LENDERS AND THE
COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR THE COMPANY. THE
COMPANY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH
SUCH OTHER LOAN DOCUMENT.
SECTION 12.15 Confidentiality. The Agent and each Lender shall hold
nonpublic information obtained pursuant to the requirements of this Agreement
other than information (a) that is, or generally becomes, available to the
public, (b) that was or becomes available to the Agent or any Lender on a
nonconfidential basis, or (c) that becomes available to the Agent or any Lender
from a Person or other source that is not to the knowledge of Agent or such
Lender (as the case may be), otherwise bound by a confidentiality obligation to
the Company, in accordance with its customary procedures for treatment of
confidential information and in accordance with safe and sound banking
practices and in any event, may make disclosure reasonably required by any bona
fide transferee or participant in connection with the contemplated transfer of
any Loan or Note or participation therein or as required or requested by any
governmental agency or representative thereof pursuant to legal process.
-46-
<PAGE> 52
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
CHICAGO TITLE AND TRUST COMPANY
By:/s/ Gust J. Totlis
----------------------------
Its: Senior Vice President &
Chief Financial Officer
171 North Clark Street
Chicago, Illinois 60601
Facsimile No: (312) 223-5955
Telex No: N/A
Answerback: N/A
Attention: A. Larry Sisk
CONTINENTAL BANK N.A., as Agent
By:/s/ JANET R. GATES
------------------------------
Its: Vice President
231 South LaSalle Street
Chicago, Illinois 60697
Facsimile No: (312) 987-5891
Telex No: N/A
Answerback: N/A
Attention: Angelina Monarrez
-47-
<PAGE> 53
<TABLE>
<CAPTION>
PERCENTAGE LENDERS
---------- -------
<S> <C>
30.98592% CONTINENTAL BANK N.A.
By /s/ JANET R. GATES
-------------------------------
Title: Vice President
Domestic
Office: 231 South LaSalle Street
Chicago, Illinois 60697
Facsimile No.: (312) 987-0889
Telex No.: 25233
Answerback: CONILLBK CGO
Attention: Janet R. Gates/
Dawn R. Lenza
LIBOR
Office: Same as above
19.71831% UNITED STATES NATIONAL BANK OF OREGON
By /s/ JEFFREY SWIFT
----------------------------
Title: Vice President
Domestic
Office: 309 S.W. Sixth Avenue
Portland, Oregon 97204
Facsimile No.: (503) 275-5428
Telex No.: 360549
Answerback: USNATLBANK PTL
Attention: Jeff Swift
Vice President
LIBOR
Office: Same as Above
</TABLE>
-48-
<PAGE> 54
<TABLE>
<S> <C>
19.71831% HARRIS TRUST AND SAVINGS BANK
By /s/ CALVIN R. MYERS
----------------------------
Calvin R. Myers
Title: Senior Vice President
Domestic
Office: 115 South LaSalle Street
Chicago, Illinois 60690
Facsimile No.: (312) 461-4039
Telex No.: 254 157
Answerback: HARRIS TRCGO
Attention: Jeffrey Nicholson
Vice President
LIBOR
Office: Same as above
19.71831% BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By /s/ JEFFERSON DODD
----------------------------
Title: Vice President
Domestic
Office: 1850 Gateway Boulevard
Concord, California 94520
Attn: Maria Farrell
with copies to:
200 West Adams
Chicago, Illinois 60606
Facsimile No.: (312) 641-2350
Telex No.: 6972650
Answerback: BAIC UW
Attention: Alan Prince
LIBOR
Office: Same as above
</TABLE>
-49-
<PAGE> 55
<TABLE>
<S> <C>
9.85916% TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By /s/ KEVIN KELTY
----------------------------
Title: Vice President
Domestic
Office: 707 Travis
Houston, Texas 77002
Facsimile No.: (713) 236-4117
Telex No.: 166053
Answerback: TCB HOU
Attention: Kevin Kelty
LIBOR
Office: Same as above
</TABLE>
-50-
<PAGE> 56
EXHIBITS
<TABLE>
<S> <C> <C>
Exhibit A - Term Note
Exhibit B - Continuation/Conversion Notice
Exhibit C - Lender Assignment Agreement
Exhibit D - Scheduled Properties
</TABLE>
-51-
<PAGE> 57
EXHIBIT A
REPLACEMENT TERM NOTE
Due: December 31, 2000
$---------- Chicago, Illinois
--------, 1993
The undersigned, for value received, promises to pay to the order of
- -------------------------------------------------- (the "Lender"), the
principal sum of ---------------------- Dollars ($----------), which principal
shall be payable in accordance with the provisions of Section 3.2 of the Credit
Agreement hereinafter referred to.
The undersigned further promises to pay interest on the unpaid
principal amount of this Note from time to time outstanding, payable at such
rate(s) and at such time(s), as provided in such Credit Agreement.
Payments of both principal and interest are to be made in lawful money
of the United States of America in same day or immediately available funds to
the account designated by the Agent pursuant to the Credit Agreement.
This Note is a Note referred to in, and evidences indebtedness
incurred under, the Amended and Restated Credit Agreement dated as of December
30, 1993, (together with all amendments and other modifications, if any, from
time to time thereafter made thereto (the "Credit Agreement"), to which
reference is made for a statement of the terms and conditions on which the
Company is permitted and required to make prepayments and repayments of
principal of the indebtedness evidenced by this Note and on which such
indebtedness may be declared to be immediately due and payable. Unless
otherwise defined, terms used herein have the meanings provided in the Credit
Agreement.
This Note is a replacement and substitute for the Term Note dated
March 28, 1991 issued by the undersigned to the Lender in the maximum principal
amount of $-------- (the "Original Note"). The execution and delivery hereof
shall not be construed to have constituted repayment of any amount of principal
of or interest on the Original Note. Accrued unpaid interest under the
Original Note shall be deemed outstanding under this Note.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of
dishonor.
A-1
<PAGE> 58
This Note is made under and governed by the internal laws of the State
of Illinois.
CHICAGO TITLE AND TRUST COMPANY
By:----------------------------
Its:---------------------------
Address:
171 North Clark Street
Chicago, Illinois 60601
A-2
<PAGE> 59
EXHIBIT B
CONTINUATION/CONVERSION NOTICE
[Name of Agent]
[Address]
Attention: [Name]
[Title]
CHICAGO TITLE AND TRUST COMPANY
Gentlemen and Ladies:
This Continuation/Conversion Notice is delivered to you pursuant to
Section 4.1 of the Amended and Restated Credit Agreement, dated as of December
30, 1993 (together with all amendments, if any, from time to time made thereto,
the "Credit Agreement"), among Chicago Title and Trust Company, an Illinois
corporation (the "Company"), certain financial institutions and Continental
Bank N.A., as Agent (the "Agent"). Unless otherwise defined herein or the
context otherwise requires, terms used herein have the meanings provided in the
Credit Agreement.
The Company hereby requests that on ------------, 19---,
(1) The Notes, all presently being maintained as *[Reference Rate
Loans] [LIBO Rate Loans],
(2) be [converted into] [continued as],
(3) **[LIBO Rate Loans having an Interest Period of ------ months]
[Reference Rate Loans].
The Company hereby:
(a) certifies and warrants that no Event of Default has
occurred and is continuing; and
(b) agrees that if prior to the time of such continuation or
conversion any matter certified to herein by it will not be true and
correct at such time as if then made, it will immediately so notify
the Agent.
- ----------------------------------
* Select appropriate interest rate option.
** Insert appropriate interest rate option.
B-1
<PAGE> 60
Except to the extent, if any, that prior to the time of the continuation or
conversion requested hereby the Agent shall receive written notice to the
contrary from the Company, each matter certified to herein shall be deemed to
be certified at the date of such continuation or conversion as if then made.
The Company has caused this Continuation/Conversion Notice to be
executed and delivered, and the certification and warranties contained herein
to be made, by an authorized officer this --- day of ---------, 19---.
CHICAGO TITLE AND TRUST COMPANY
By ----------------------------
Title:
B-2
<PAGE> 61
EXHIBIT C
ASSIGNMENT AGREEMENT
This Assignment Agreement (the "Assignment") is entered into as of
this --- day of --------, 19-- between ------------------------------------
- -------------------------------------, the assigning lender (the "Assigning
Lender") and ------------------------------------------------, the assignee
(the "Assignee"). This Assignment is made pursuant to that certain Amended
and Restated Credit Agreement (as amended or modified, called the "Credit
Agreement"), dated as of December 30, 1993, among Chicago Title and Trust
Company, an Illinois corporation, the lenders who are or may become parties
thereto (the "Lenders") and Continental Bank N.A. as Agent. Unless the context
clearly indicates otherwise, all terms used in this Assignment shall have the
meanings given them by, and shall be construed as set forth in, the Credit
Agreement.
In consideration of the respective representations, covenants and
agreements contained in this Assignment, the Credit Agreement and the Term
Note, if any, and in consideration of the respective undertakings of all of the
parties to the transaction described herein and therein, the Assigning Lender
and the Assignee hereby covenant and agree as follows:
TERMS OF ASSIGNMENT
Section 1. Sale of the Assigned Rights and Obligations. Under
the Credit Agreement, a copy of which has been furnished to the Assignee, and
as of the date hereof, the Lenders have made loans to the Borrower in the
aggregate outstanding principal amount of $---------- (the "Term Loans"). The
Term Loans are evidenced by a Term Note pursuant to the terms and provisions of
the Credit Agreement. For good and valuable consideration, as of the Effective
Date, the Assigning Lender hereby sells and assigns to the Assignee and the
Assignee hereby purchases and assumes from the Assigning Lender the Assigned
Rights and Obligations (as hereinafter defined). For purposes of this
Assignment, the "Assigned Rights and Obligations" shall mean a portion of the
Assigning Lender's Term Loans in a principal amount of $-------- and a pro rata
percentage of all of the Assigning Lender's rights and obligations under the
Credit Agreement and each Related Document, including its rights in respect of
the Term Loans and the Term Note. The percentage of the rights and obligations
of the Lenders under the Credit Agreement which are being assigned to the
Assignee shall be -----%. Each assignment shall be pro rata with respect to
all rights and obligations of this the Assigning Lender including the Term
Loans and the Term Note.
C-1
<PAGE> 62
Section 2. Effective Date. This Assignment shall become effective
(the "Effective Date") when all of the following have occurred: (i) this
Assignment has been executed by the parties hereto, (ii) the Assignment has
been acknowledged by the Agent and, to the extent required by Section 11.4 by
the Company, and (iii) the Assigning Lender/Assignee has paid a fee of $3,000
to the Agent. Upon the Assignment becoming effective, the Agent shall forward
all payments of interest, principal, fees and other amounts that would have
been made to the Assigning Lender in proportion to the percentage of the
Assigning Lender's rights transferred, to the Assignee. However, the interest,
fees and other amounts which accrued prior to the Effective Date shall be
payable for the account of the Assigning Lender.
Section 3. Collateral. The Loans (and the resulting Assigned Rights
and Obligations) are secured only to the extent provided in the Credit
Agreement and the Related Documents. The Assignee shall have no interest in
any property in the Assigning Lender's possession or control, or in any deposit
held or other indebtedness owing by the Assigning Lender, which may be or
become collateral for or otherwise available for payment of the Term Loans by
reason of the general description of secured obligations contained in any
security agreement or other agreement or instrument held by the Assigning
Lender or by reason of the right of set- off, counterclaim or otherwise, except
that if such interest is provided for in provisions of the Credit Agreement
regarding sharing of set-off, the Assignee shall have the same rights as any
other Lender that is a party to the Credit Agreement.
Section 4. No Warranty or Recourse. The sale, transfer, assignment
and delegation of the Assigned Rights and Obligations is made without warranty
or recourse against the Assigning Lender of any kind, except that the Assigning
Lender warrants that it has not sold or otherwise transferred any other
interest in the Assigned Rights and Obligations to any other party and that it
is the owner of the interests being sold by it hereunder free and clear of any
adverse claim. The Assigning Lender may, however, have sold and may hereafter
sell participation in, or may have assigned or may hereafter assign, portions
of its interest in the Term Loans and the Credit Agreement that in the
aggregate (together with the portion assigned hereby), do not exceed 100% of
the Assigning Lender's original interest in the Term Loans and the Credit
Agreement.
Section 5. Representations, Covenants and Warranties. To induce each
other to enter into this Assignment, the Assigning Lender and the Assignee each
represents and warrants to, and covenants and agrees with, the other, and for
the benefit of the Agent, as follows:
C-2
<PAGE> 63
a. Existence. Each of the Assigning Lender and the
Assignee warrants that it is an entity duly existing under the laws of the
United States or the jurisdiction of its incorporation, as applicable.
b. Authority. Each of the Assigning Lender and the
Assignee warrants that it is duly authorized to execute, deliver and perform
this Assignment and the Credit Agreement.
c. Valid and Binding. Each of the Assigning Lender and
the Assignee warrants that all acts, conditions and things required to be done
and performed and to have occurred prior to the execution, delivery and
performance of this Assignment, and to constitute the same its legal, valid and
binding obligation enforceable against it in accordance with its terms (subject
to bankruptcy, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of equity),
have been done and performed and have occurred in due and strict compliance
with all applicable laws.
d. Purchasing for Own Interest. The Assignee warrants
and covenants that it is purchasing and assuming all of the Assigned Rights and
Obligations purchased hereunder in the ordinary course of making loans in its
commercial lending business and not with a view to, or for sale in connection
with, any distribution or selling such Assigned Rights and Obligations acquired
hereunder, nor with any present intention of distribution of its Assigned
Rights and Obligations, in each case in any manner which would require
registration of any of the Assigned Rights and obligations under the Securities
Act of 1933 or any "bluesky" laws.
e. Credit Analysis by the Assignee. The Assignee
warrants and covenants that it has, independently and without reliance upon the
Agent, the Assigning Lender or any other Lender, and based upon such financial
statements and other documents and information as it has deemed appropriate,
made its own credit analysis and decision to engage in this Assignment and the
transactions contemplated hereby, and the Assignee expressly acknowledges that
the Assigning Lender has made no representation or warranty, express or
implied, as to the accuracy or completeness of any of such financial statements
or other documents and information. The Assignee further agrees that it will,
independently and without reliance upon the Agent, the Assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement.
f. Enforceability, etc. The Assignee warrants that the
Assigning Lender has made no representation or warranty, and no representation
or warranty shall be implied, as to performance by
C-3
<PAGE> 64
the Company of any of its obligations under the Assigned Rights and Obligations
or Credit Agreement or as to the execution, legality, validity, enforceability,
genuineness, sufficiency, collectibility or value of the Assigned Rights and
Obligations, Loans and the Credit Agreement, or any document or instrument
purported to be executed and delivered in connection therewith, other than as
set forth in Section 4 hereof.
g. Receipt of Documents. The Assignee warrants that it
has received a copy of the Credit Agreement, the financial statements referred
to in the Credit Agreement and such other documents executed in connection with
the Credit Agreement as it has deemed appropriate to make its own credit
analysis and decisions to enter into this Assignment.
h. Appointment of Agent. The Assignee hereby appoints
and authorizes the Agent, together with any successors or assigns thereof
pursuant to the terms and conditions of the Credit Agreement, to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto.
i. Lending Offices. The Assignee hereby identifies the
offices set forth underneath its signature hereon as its Domestic Office and
its LIBOR Office (together with the appropriate addresses for such offices) for
purposes of the Credit Agreement.
j. Securities Laws. The Assigning Lender and the
Assignee each acknowledges that this Assignment does not constitute the sale of
a "security" for purposes of the Securities Act of 1933 and the Securities and
Exchange Act of 1934.
k. Retained Commitments. The Assignee acknowledges that
the additional loans and commitments, if any, may be retained by the Assigning
Lender for its own account and shall be excluded from the Assigned Rights and
Obligations assigned and sold hereunder.
j. No Conflict. The execution, delivery and performance
of this Assignment does not conflict with any provision of law or of the
charter or by-laws (or equivalent constituent documents) of such party, or of
any agreement binding upon it.
Section 6. Effectiveness of Sale. This Assignment shall become
effective as of the Effective Date, and the Agent shall record this Assignment
in the register maintained by the Agent (the "Register") to indicate the
effectiveness of such assignment as of the Effective Date. As of the Effective
Date: (i) the Credit Agreement is modified to the extent, and only to the
extent, necessary to reflect the addition of the Assignee; (ii) the
C-4
<PAGE> 65
Assignee shall be a party to the Credit Agreement and the documents and
instruments executed and delivered in connection therewith as described herein
and therein, and have the rights and obligations of a Lender thereunder with
respect to the Assigned Rights and Obligations purchased by the Assignee,
including, but not limited to, the right to receive its pro rata share of all
fees thereafter payable to the Lenders; and (iii) the Assigning Lender shall,
to the extent provided herein and in the Credit Agreement, relinquish its
rights and be released from its obligations under the Credit Agreement and the
documents and instruments executed and delivered in connection therewith with
respect to the Assigned Rights and Obligations, including, without limitation,
any related indemnification. However, the Assigning Lender shall not be
released to the extent, if any, that the Borrower, any other Lender or the
Agent has rights against such Assigning Lender as a result of any default by
such Lender under the Credit Agreement.
Section 7. Indemnification. The Assignee agrees to indemnify the
Assigning Lender from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs (including attorneys' fees
and expenses, whether of special, local or in-house legal counsel and staff),
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Assigning Lender in any way relating to
or arising out of the Assigned Rights and Obligations assigned and sold
hereunder, including, without limitation, each and every indemnity of any
person or entity provided in the Credit Agreement. The indemnification set
forth herein shall survive any termination of this Assignment.
Section 8. Withholding Taxes. The Assignee (a) represents and
warrants to the Assigning lender, the Agent and the Company that under
applicable law and treaties no tax will be required to be withheld by the
Assigning Lender with respect to any payments to be made to the Assignee
hereunder, (b) agrees to furnish (if it is organized under the laws of any
jurisdiction other than the United States or any State thereof) to the
Assigning Lender, the Agent and the Company prior to the time that the Agent or
the Company is required to make any payment of principal, interest or fees
hereunder either U.S. Internal Revenue Service Form 4224 or U.S. Internal
Revenue Service Form 1001 (wherein the Assignee claims entitlement to the
benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide
new Forms 4224 or 1001 upon the expiration of any previously delivered form or
comparable statements in accordance with applicable U.S. law and regulations
and amendments thereto, duly executed and completed by the Assignee, and (c)
agrees to comply with all applicable U.S. laws and regulations with regard to
such withholding tax exemption.
C-5
<PAGE> 66
Section 9. Other Transactions with the Company. The Assigning Lender,
the Assignee and their respective affiliates may accept deposits from, lend
money to, act as trustee under indentures for and generally engage in any kind
of business with the Company, or any of the Company's subsidiaries or
affiliates, and any person who may engage in business with or own securities of
the Company, or any of the Company's subsidiaries or affiliates. Neither the
Assigning Lender nor the Assignee shall have any interest in any property taken
as security for any loans or any credits extended to the Company or any of its
Subsidiaries by the other such party by reason thereof, except security
specifically granted pursuant to the Agreement.
Section 10. Successors and Assigns. This Assignment shall inure to
the benefit of and be binding upon the successors and assigns of the Assigning
Lender and the Assignee.
Section 11. Expenses. In the event of any action to enforce the
provisions of this Assignment against either party hereto, the prevailing party
shall be entitled to recover all costs and expenses incurred in connection
therewith, including, without limitation, attorneys' fees and expenses, whether
of special, local or in-house legal counsel and staff.
Section 12. APPLICABLE LAW. THIS ASSIGNMENT SHALL BE A CONTRACT MADE
UNDER AND GOVERNED BY THE LAWS OF THE STATE SET FORTH IN THE CREDIT AGREEMENT,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES. Wherever possible each
provision of this Assignment shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Assignment shall be prohibited by or invalid under such law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Assignment. All obligations and rights of the parties hereto expressed
herein shall be in addition to and not in limitation of those provided by
applicable law.
Section 13. Transfer Instructions. All payments made hereunder shall
be payable by the transfer of immediately available funds on or before 12:00
noon Chicago time on the date such payment is due pursuant to the transfer
instructions set forth below, or as the party receiving payment may from time
to time instruct the party rendering payment.
Section 14. Amendments, Changes, and Modifications. This Assignment
may only be amended, changed, modified, altered, or terminated by an agreement
in writing signed by the Assigning Lender and the Assignee (or their permitted
successors or assigns).
Section 15. Entire Agreement. This Assignment sets forth the entire
understanding of the parties and supersedes any and all
C-6
<PAGE> 67
prior agreements, arrangements and understandings relating to the subject
matter hereof. No representation, promise, inducement or statement of intent
has been made by either party which is not embodied in this Assignment, and
neither party shall be bound by or liable for any alleged representation,
promise, inducement or statement of intention not expressly set forth herein.
Section 16. Incorrect Payments. Each of the Assigning Lender and the
Assignee agrees that if it incorrectly receives a payment in respect of the
Credit Agreement which should have been paid to the other such party, it will
promptly return such payment to the Agent for the account of the party to which
such payment should have been made.
Section 17. FORUM SELECTION AND SUBMISSION TO JURISDICTION. ANY
CLAIM ARISING OUT OF OR RELATING TO THIS ASSIGNMENT, THE AGREEMENT OR THE
ASSIGNED RIGHTS AND OBLIGATIONS MAY BE BROUGHT AND MAINTAINED BY THE ASSIGNING
LENDER IN ANY STATE OR FEDERAL COURT HAVING SUBJECT MATTER JURISDICTION AND
LOCATED IN CHICAGO, ILLINOIS. FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
INSTITUTED WITH RESPECT TO ANY SUCH CLAIM THE ASSIGNEE HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION AND EXCLUSIVE VENUE OF SUCH COURTS AND AGREES NOT
TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST THE ASSIGNING LENDER OR ANY
OF ITS DIRECTORS, OFFICERS, AGENTS OR PROPERTY OF ANY THEREOF, ARISING OUT OF
OR RELATING TO THIS ASSIGNMENT, THE AGREEMENT OR THE ASSIGNED RIGHTS AND
OBLIGATIONS, IN ANY COURTS OTHER THAN SUCH COURTS. NOTHING HEREIN CONTAINED
SHALL PRECLUDE THE ASSIGNING LENDER FROM SERVING LEGAL PROCESS IN ANY MATTER
PERMITTED BY LAW OR, AT ITS SOLE OPTION, FROM BRINGING AN ACTION OR PROCEEDING
IN RESPECT THEREOF IN ANY OTHER COUNTRY, STATE OR PLACE HAVING JURISDICTION
OVER SUCH ACTION. THE ASSIGNEE IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER HAVE TO THE
LAYING AND MAINTENANCE OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN SUCH A COURT LOCATED IN CHICAGO, ILLINOIS AND ANY CLAIM THAT ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
Section 18. Waiver of Jury Trial. THE ASSIGNEE AND THE ASSIGNING
LENDER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS ASSIGNMENT, THE AGREEMENT OR
ANY OTHER DOCUMENT RELATIVE TO THE ASSIGNED RIGHTS AND OBLIGATIONS, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN),
OR ACTIONS OF THE ASSIGNEE OR THE ASSIGNING LENDER. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE ASSIGNEE AND THE ASSIGNING LENDER ENTERING INTO
THIS ASSIGNMENT.
C-7
<PAGE> 68
IN WITNESS WHEREOF, the parties have caused this Assignment to be
executed on their behalf by their duly authorized offices as of the day and
year identified above.
[ASSIGNING LENDER]
By:--------------------------------
Title:-----------------------------
[ASSIGNEE]
By:--------------------------------
Title:-----------------------------
C-8
<PAGE> 69
EXHIBIT D
<TABLE>
<CAPTION>
SCHEDULED PROPERTIES
ADDRESS CITY ST.
- ------- ---- ---
<S> <C> <C>
CHICAGO TITLE INSURANCE CO. & SUBSIDIARIES:
120 E. LIBERTY DR. WITH PARKING LOTS WHEATON IL
2393 S. CONGRESS W.PALM BCH. FL
113 S. 3RD ST. GENEVA IL
103 N. OTTAWA ST. JOLIET IL
108 N. MAIN ST. SYCAMORE IL
15 E. WASHINGTON BELLEVILLE IL
241 N. MAIN ST. EDWARDSVILLE IL
1500 AUSTIN ST. HOUSTON TX
1275 ONTARIO ST. CLEVELAND OH
101 N. THROOP ST. WOODSTOCK IL
2200 N. MAIN ST. CROWN POINT IN
7931 FORSYTH BLVD. CLAYTON MO
223 TAYLOR ST. PUNTA GORDA FL
917 2ND ST. NAMPA ID
1314 IDAHO ST. LEWISTON ID
311 2ND ST. NORTH TWIN FALLS ID
1120 PACIFIC AVE. TACOMA WA
1250 W. MAIN ST. EL CENTRO CA
285 CHURCH ST. SALEM OR
PAJARO AND WINHAM SALINAS CA
295 MAIN ST. QUINCY CA
1647 COURT ST REDDING CA
65 SOUTH LASSEN SUSANVILLE CA
630 BOND ST. ASTORIA OR
355 MAIN ST. RED BLUFF CA
1400 NORIEGA AVE. SAN FRANCISCO CA
107 N. MAIN ST. CROWN POINT IN
218 W. OLIVE ST. NEWPORT OR
1312 VANDERCOOK WAY LONGVIEW WA
925 "B" ST. SAN DIEGO CA
1717 WALNUT GROVE ROSEMEAD CA
110 W. TAYLOR ST. SAN JOSE CA
1212 MARSH ST. SAN LUIS OBISPO CA
SECURITY UNION & SUBSIDIARIES:
1101 ANACAPA ST. SANTA BARBARA CA
1301 3RD AVE. SAN DIEGO CA
441 E. YOSEMITE MADERA CA
3030 HOYT AVE. EVERETT WA
2201 "K" ST. SACRAMENTO CA
825 N. BROADWAY SANTA ANA CA
1196 W. MAIN ST. EL CENTRO CA
2425 W. SHAW FRESNO CA
1944 "M" ST. MERCED CA
873 N. MAIN ST. BISHOP CA
4612 MCGAW ST. STOCKTON CA
5675 RALSTON AVE. VENTURA CA
</TABLE>
Page 1 of 2
<PAGE> 70
EXHIBIT D (cont'd)
<TABLE>
<CAPTION>
SCHEDULED PROPERTIES (cont'd)
ADDRESS CITY ST.
- ------- ---- ---
<S> <C> <C>
TICOR & SUBSIDIARIES:
340 W. 4TH ST. SAN BERNADINO CA
800 N. MAIN ST. SANTA ANA CA
122 NIAGARA ST. LOCKPORT NY
1075 W. MORSE BLVD. WINTER PARK FL
CLAIMS ACQUIRED:
CHERRY CREEK CONDO. JEFFERSONVILLE IN
SANTA RITA RANCH LIVERMORE CA
STOKES CANYON RD. CALABASAS CA
LOT 2 SECTION 1 CARLSBAD CA
DANGERFIELD DEV. CLINTON MD
DEERHORN VILLAGE KANSAS CITY MO
GENESEE DEV. GOLDEN CO
TPO S OF APPACHE TULSA OK
TPO N OF APPACHE TULSA OK
TPO SUMMERTREE TULSA OK
WEST END TERRACE NASHVILLE TN
3880 LEMON STREET RIVERSIDE CA
OIL & MIN.RIGHTS VARIOUS CA
OTHER CLAIMS ACQ. VARIOUS
</TABLE>
Page 2 of 2
<PAGE> 1
TO OUR STOCKHOLDERS
In 1993 Alleghany Corporation's net earnings reached a record level for the
second consecutive year: $97.5 million, or $14.66 per share, compared with
$72.8 million, or $10.94 a share, in 1992. Financial highlights of both years
are summarized in the first table on page 5 of this report.
The excellent 1993 results are due primarily to Alleghany's principal
operating unit, Chicago Title and Trust Company, whose title insurance and
investment management operations established new records of their own for both
earnings and revenues. Chicago Title's results owed much to a striking revival
of residential resales and commercial real-estate transactions, as well as a
record level of refinancing transactions. Less obvious, but quite significant,
factors in the company's success were economies of scale realized as a result
of the Ticor and Security Union acquisitions of recent years, and cost
reductions achieved by Project Nimble Leader, a company-wide program to improve
the efficiency of staff support functions.
Two other Alleghany operating units, Sacramento Savings Bank (consumer
banking) and World Minerals Inc. (industrial minerals), recorded 1993 earnings
well below their past levels of achievement, despite commendable efforts by
their capable managements. Sacramento Savings continued to suffer from adverse
economic conditions (including depressed real estate values) in northern
California, as well as from lower loan production and narrower interest margins
than in 1992, but comfortably maintained its status as a "well capitalized"
institution under stringent federal banking laws and its enviable franchise as
the premier thrift institution in the principal markets it serves. In the first
part of 1993, World Minerals suffered from a combination of lackluster sales
and excessive costs; in the year's final months it appeared to have overcome
the latter, and it is making concentrated efforts to overcome the former.
Despite these difficulties, both Sacramento Savings and World Minerals ended
1993 with fourth-quarter earnings well exceeding those of the previous year.
Common Stockholders'
Equity at Year-end
(in dollars)
STOCKHOLDERS' EQUITY GRAPH
<TABLE>
<CAPTION>
Old New
Alleghany Alleghany Cyclops Armco Cash Total
--------- --------- ------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
1967 15.61 - - - 0.20 15.81
1968 20.03 - - - 0.40 20.43
1969 15.02 - - - 0.67 15.69
1970 15.47 - - - 0.87 16.34
1971 17.68 - - - 1.07 18.75
1972 18.12 - - - 1.35 19.47
1973 15.95 - - - 1.71 17.66
1974 21.60 - - - 2.16 23.76
1975 21.38 - - - 2.66 24.04
1976 22.71 - - - 3.41 26.12
1977 24.34 - - - 4.46 28.80
1978 26.59 - - - 5.51 32.10
1979 30.55 - - - 6.56 37.11
1980 33.38 - - - 7.64 41.02
1981 37.32 - - - 8.72 46.04
1982 42.56 - - - 9.80 52.36
1983 46.91 - - - 10.88 57.79
1984 75.47 - - - 10.88 86.35
1985 88.72 - - - 10.88 99.60
1986 - 81.11 - - 55.67 136.78
1987 - 85.71 - - 55.67 141.38
1988 - 93.49 5.28 - 55.67 154.44
1989 - 105.77 11.00 - 55.67 172.44
1990 - 116.57 10.55 - 55.67 182.79
1991 - 130.09 4.50 - 55.67 190.26
1992 - 142.74 - 2.68 67.34 212.76
1993 - 165.15 - - 67.34 232.49
</TABLE>
The comparative contributions to Alleghany's earnings before income
taxes made by these operating units - as well as by Alleghany's other major
unit, Underwriters Reinsurance Company (acquired by Alleghany on October 7,
1993), and by Alleghany's parent-company operations - were as follows (in
millions):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Year Ended December 31 Quarter Ended December 31
- ---------------------------------------------------------------------------------------------------------------
1993 1992 1993 1992
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Chicago Title $ 88.6 $ 85.8 $27.3 $17.3
Sacramento Savings 29.3 33.8 5.9 4.1
Underwriters Reinsurance 3.0 -- 3.0 --
World Minerals 8.2 11.6 1.7 1.3
Parent company (10.0) (11.6) (4.3) (5.2)
- ---------------------------------------------------------------------------------------------------------------
Earnings before income taxes $119.1 $119.6 $33.6 $17.5
===============================================================================================================
</TABLE>
2
<PAGE> 2
In addition to earnings from ongoing business operations, three
significant items of a non-recurring nature are reflected in the table above:
* in the 1992 first quarter, a credit of $9.1 million, or $1.37 a share,
reflecting the cumulative effect of a change in accounting for income taxes
brought about by Alleghany's adoption of the Financial Accounting Standards
Board's Statement No. 109;
* in the 1992 second quarter, a credit of $22.6 million, or $1.98 a share,
representing Chicago Title's share of a recovery in a lawsuit against
California Canadian Bank; and
* in the 1993 first quarter, a credit of $20 million, or $3.00 a share,
resulting from adjustment of Alleghany's tax reserves.
The first two of these non-recurring items were explained in greater
detail in our 1992 Annual Report to Stockholders. The third represents the
culmination of tax proceedings begun almost four years ago, when the Internal
Revenue Service proposed to assess substantial tax deficiencies against
Alleghany, relating chiefly to the sale of Alleghany's former wholly owned
subsidiary Investors Diversified Services, Inc. to American Express Company in
January 1984. During the years following this IRS action, Alleghany made
charges to its earnings in order to create appropriate balance-sheet reserves
with respect to these potential tax liabilities. In early 1993, the major tax
issues relating to the sale of IDS were resolved in Alleghany's favor;
consequently, an adjustment of Alleghany's tax reserves was required, resulting
in a credit to 1993 first-quarter earnings of $20.0 million, or $3.00 a share.
The second table on page 5 breaks down the earnings contributions of
our principal operating units on a per-share, after-tax basis, showing the
impact of each of these three non-recurring items.
One of the significant accomplishments of 1993 was our acquisition, on
October 7, of Underwriters Reinsurance Company, which marked an important
milestone in our ongoing program to redeploy Alleghany's liquid assets into
well-managed operating businesses. At the closing, Alleghany paid cash
totalling about $201 million and received, in exchange, about 93 percent of the
equity of a new holding company that owns Underwriters Reinsurance. The
remaining seven percent of the new holding company's equity was acquired by
Underwriters Reinsurance management.
Market Value of
Stock and Cash
at Year-end
(in dollars)
MARKET VALUE GRAPH
<TABLE>
<CAPTION>
Old New
Alleghany Alleghany Cyclops Armco Cash Total
--------- --------- ------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
1967 13.75 - - - 0.20 13.95
1968 23.50 - - - 0.40 23.90
1969 13.25 - - - 0.67 13.92
1970 11.50 - - - 0.87 12.37
1971 13.62 - - - 1.07 14.69
1972 14.37 - - - 1.35 15.72
1973 9.75 - - - 1.71 11.46
1974 6.62 - - - 2.16 8.78
1975 7.50 - - - 2.66 10.16
1976 12.87 - - - 3.41 16.28
1977 15.25 - - - 4.46 19.71
1978 21.50 - - - 5.51 27.01
1979 27.00 - - - 6.56 33.56
1980 33.00 - - - 7.64 40.64
1981 48.50 - - - 8.72 57.22
1982 49.62 - - - 9.80 59.42
1983 63.87 - - - 10.88 74.75
1984 77.62 - - - 10.88 88.50
1985 90.14 - - - 10.88 101.02
1986 - 70.23 - - 55.67 125.90
1987 - 76.94 26.80 - 55.67 159.41
1988 - 76.85 24.81 - 55.67 157.33
1989 - 101.02 33.96 - 55.67 190.65
1990 - 95.86 11.94 - 55.67 163.47
1991 - 127.50 20.43 - 55.67 203.60
1992 - 156.71 - 14.25 67.34 238.30
1993 - 171.50 - 12.93 67.34 251.77
</TABLE>
THIS GRAPH AND THE GRAPH ON PAGE 2 ILLUSTRATE THE EXPERIENCE OF A HYPOTHETICAL
INVESTOR WHO PURCHASED "OLD" ALLEGHANY COMMON STOCK IN 1967 AND, THROUGHOUT THE
PERIOD 1967-93, RETAINED HIS INVESTMENT TOGETHER WITH ALL DIVIDENDS AND OTHER
DISTRIBUTIONS RECEIVED AS A RESULT OF THE INVESTMENT. ALTHOUGH VALUES ARE SHOWN
ON A PER-SHARE BASIS (I.E., PER SHARE OF OLD ALLEGHANY COMMON STOCK ACQUIRED IN
1967), IT IS ASSUMED THAT THE INVESTOR'S HOLDINGS WERE SUCH THAT ALL
DISTRIBUTIONS OF STOCK WERE RECEIVED IN WHOLE SHARES (WITHOUT CASH IN LIEU OF
FRACTIONS). THE DISTRIBUTIONS REFLECTED IN THE GRAPHS CONSIST OF (1) CASH
DIVIDENDS PAID FROM 1967 THROUGH 1983, (2) ANNUAL 2% STOCK DIVIDENDS PAID FROM
1985 THROUGH 1993, (3) CASH DISTRIBUTED UPON THE LIQUIDATION OF OLD ALLEGHANY
ON DECEMBER 31, 1986, (4) COMMON STOCK OF NEW ALLEGHANY DISTRIBUTED IN THE SAME
TRANSACTION, (5) COMMON STOCK OF CYCLOPS INDUSTRIES, INC., WHICH WAS SPUN OFF
TO NEW ALLEGHANY'S STOCKHOLDERS IN 1987, AND (6) CASH AND COMMON STOCK OF ARMCO
INC. DISTRIBUTED UPON THE MERGER OF CYCLOPS INTO A WHOLLY OWNED SUBSIDIARY OF
ARMCO IN 1992. THE GRAPHS DO NOT REFLECT ANY EARNINGS RESULTING FROM
REINVESTMENT OF CASH DISTRIBUTIONS.
3
<PAGE> 3
CHICAGO TITLE AND TRUST COMPANY
REVIEW OF OPERATIONS
CT&T, headquartered in Chicago, is engaged in the sale and
underwriting of title insurance through the CT&T Family of Title Insurers,
which consists of Chicago Title Insurance Company, Security Union Title
Insurance Company and Ticor Title Insurance Company and their respective
subsidiaries. The CT&T Family of Title Insurers also offers services related to
title insurance, including abstracting, searches, and escrow, closing and
disbursement services in connection with real estate transactions.
The CT&T Family of Title Insurers is the largest title insurance
organization in the world, with approximately 200 full-service offices, 8,500
employees and 3,500 policy-issuing agents in 49 states, Puerto Rico, the Virgin
Islands and Canada. CT&T's 1993 accomplishments include these highlights:
* CT&T's 1993 pre-tax earnings were a record $88.6 million on record revenues
of $1.4 billion. Exclusive of one-time gains, CT&T's 1993 pre-tax earnings rose
40 percent, from $63.2 million in 1992.
* Title insurance loss reserves in 1993 were at their strongest historic level,
$532.1 million, reflecting a significant reduction in claims due to more
stringent underwriting standards.
* Combined statutory premium reserves, as reflected in insurance regulatory
filings, totalled $365.6 million in 1993, compared with $354.5 million in 1992
and $343.4 million in 1991.
The $88.6 million of pre-tax earnings contributed by CT&T on revenues
of $1.4 billion in 1993 compares with $85.8 million on revenues of $1.3 billion
in 1992, and $30.2 million on revenues of $1.0 billion in 1991. CT&T's 1992
contribution included a one-time gain of $22.6 million, representing its share
of a recovery in litigation against California Canadian Bank. (The beneficial
effect of this recovery on Alleghany's net earnings was almost entirely offset
by tax provisions and other previously anticipated charges.)
Closely linked to real estate activity, the title industry was
adversely affected by the recession and severely depressed real estate markets
in 1991. However, interest rates began to drop in 1992, and in 1993 reached new
thirty-year lows. Driven by first-time buyers enticed into the market by the
low interest rates, home sales increased 11.1 percent in 1992 and 3.4 percent
in 1993. Despite housing markets that continued to be depressed on both the
East and West Coasts and a scarcity of more affluent buyers in the market
nationwide, the 1993 home sales figures came within 5 percent of the all-time
high recorded in 1978. Low interest rates also resulted in a high volume of
refinancing orders in the last two years, including a record number of such
orders in the last three quarters of 1993.
In addition to an active residential market, CT&T title operations
benefited from the beginnings of a recovery in the commercial sector in 1993.
Though traditional commercial lenders remained on the sidelines, renewed
interest in real estate-related investment vehicles, such as real estate
investment trusts (REITs) and real estate mortgage investment conduits
(REMICs), brought new sources of funds to the market and contributed to the
first upturn in activity in the commercial sector since 1989.
6
<PAGE> 4
Approximately 70.5 percent of the revenues of the CT&T Family of Title
Insurers in 1993 are estimated to have been generated by residential real
estate activity, consisting of resales (43.1 percent), refinancings (16.2
percent) and new housing (11.2 percent). Commercial and industrial real estate
activity is estimated to account for the remaining 29.5 percent of 1993
revenues, attributable to initial sales and resales (21.6 percent) and
refinancings (7.9 percent).
CT&T has been able to take advantage of economies of scale with the
acquisition of Ticor Title in 1991 and Security Union in 1987. The high fixed
costs which are associated with the title insurance industry (as contrasted
with other insurance underwriters) were reduced in consolidation and spread
over a greater revenue base. Also contributing to the gains were initial
savings from streamlining support staff activities through Project Nimble
Leader, which was initiated in 1992.
In 1993, CT&T's 21 National Business Group offices, which provide
one-stop title services to national commercial customers, began to see the
benefits of renewed investor interest in the commercial sector, recording a 13
percent increase in revenues over 1992. The Group's National Accounts Unit, a
one-stop source for national residential lenders and low-liability commercial
accounts, posted a 350 percent increase in revenues over 1992, its first full
year of operation. Orders at SAFETRANS, a one-stop service for executive
relocation firms, were up 57 percent over 1992.
The rotunda of the Chicago Title and
Trust Center, a
Chicago landmark.
[PHOTO -- SEE EDGAR APPENDIX]
In 1993, CT&T initiated a customer-focused product quality project
entitled Quest for Excellence. This project seeks to identify issues that are
important to CT&T's customers in their business relationships with CT&T, and to
provide training and support to CT&T's personnel to enable them to be more
responsive to their customers' title insurance needs. CT&T plans an aggressive
schedule of implementation in branch offices in 1994 and 1995.
The financial strength of title insurers has become an increasingly
important factor in title insurance purchase decisions, particularly in
multi-site transactions and - with the growing market for real estate-related
investment vehicles such as REITs and REMICs - in investment decisions. CT&T's
principal title insurance subsidiaries each carry a claims-paying ability
rating of "A-" from Standard & Poor's Corporation. The companies of the CT&T
Family are one of only two title underwriting organizations in the entire
industry to have their claims-paying ability rated by Standard & Poor's.
7
<PAGE> 5
Despite unusually large cash dividends to Alleghany totalling $235.5
million in 1993 (most of which was used for Alleghany's acquisition of
Underwriters Reinsurance Company), combined cash and marketable securities, as
reflected in insurance regulatory filings, were $655.2 million at 1993
year-end, representing a decline of only about $140 million from $794.6 million
at 1992 year-end, and a decline of less than $25 million from $680.1 million at
1991 year-end. The strong results posted by CT&T in 1992 and 1993 helped to
minimize the decline in cash and marketable securities, which produce
investment income that mitigates the cyclical nature of title operations.
In addition to title insurance, CT&T conducts a general financial
services business through its Financial Services Group, which comprises four
businesses:
* The institutional investment management group manages equity and fixed income
institutional assets in excess of $3.0 billion, primarily for employee benefit
plans, foundations and insurance companies.
* The employee benefits services group offers profit sharing plans, matching
savings plans, money purchase pensions and consulting services, and has become
one of the leading providers of 401(k) salary deferral plans to mid-sized
companies in the upper Midwest.
* The personal trust and investment services group, with approximately $1.1
billion under management, provides investment management and trust and estate
planning services primarily for accounts in the $250,000 to $15 million range.
* The real estate trust services group offers land trusts which permit real
estate to be conveyed to a trustee while reserving to the beneficiaries the
full management and control of the property. This group also facilitates
tax-deferred exchanges of income-producing real property.
In December 1993, CT&T received clearance from the Securities and
Exchange Commission to establish a new management company, CT&T Funds, to offer
four no-load, open-end mutual funds to the general public: the CT&T Growth and
Income Fund, the CT&T Intermediate Fixed Income Fund, the CT&T Intermediate
Municipal Bond Fund and the CT&T Money Market Fund. Initially, the new funds
will be marketed to individual investors to attract rollover funds from
existing 401(k) and pension fund programs managed by CT&T.
CT&T's Financial Services Group posted revenues of $26.5 million in
1993, compared with $26.0 million in 1992 and $23.3 million in 1991. At 1993
year-end, assets held by the Financial Services Group totalled approximately
$5.0 billion, substantially unchanged from 1992 year-end. Of this amount, $4.0
billion were actively managed.
CT&T's performance in 1993 was proof that CT&T was well positioned to
take advantage of improving business conditions. The positive trends in the
residential and commercial real estate markets in late 1993 bode well for 1994.
Despite expectations that refinancings will diminish as interest rates rise,
CT&T anticipates increases in new residential construction and continued
momentum in the commercial sector. A sustained economic recovery is also
expected to herald the return of the affluent buyer to the residential real
estate market together with improvements in the northeastern and California
real estate markets.
8
<PAGE> 6
SACRAMENTO SAVINGS BANK
Founded in 1874, Sacramento Savings is the leading thrift institution
in northern California, with headquarters in Sacramento and 45 branch offices
in 14 counties in the north central part of the state. The area has experienced
strong economic and population growth in recent years and is expected to resume
doing so as the northern California economy recovers.
In 1993, Sacramento Savings contributed pre-tax earnings of $29.3
million on revenues of $209.8 million, compared with $33.8 million on revenues
of $239.1 million in 1992 and $26.2 million on revenues of $261.6 million in
1991.
Giving effect to indebtedness incurred in refinancing Alleghany's
acquisition of Sacramento Savings and to the operations of three ancillary
companies, Sacramento Savings contributed pre-tax earnings of $23.1 million on
revenues of $207.5 million in 1993, $26.0 million on revenues of $237.9 million
in 1992 and $20.0 million on revenues of $261.9 million in 1991.
In 1992 and 1993, northern California continued to experience the
effects of a local real estate recession that began in 1991. Sacramento
Savings' non-performing assets increased from $77.4 million at 1991 year-end to
$92.0 million at 1992 year-end and to $100.1 million, or 3.5 percent of
Sacramento Savings' average total assets, at 1993 year-end. In addition,
Sacramento Savings had non-earning real estate investments with an aggregate
net book value of $37.6 million at 1993 year-end. However, additions to
reserves for loan losses and foreclosed property losses were only $10.3 million
in 1993 compared with $14.8 million in 1992, reflecting Sacramento Savings'
belief that real estate values in its market are stabilizing. In 1991, such
additions were $8.1 million.
Offices in Cameron
Park, CA, scheduled to
be opened jointly by
Sacramento Savings and
Chicago Title in 1994.
[ARTWORK -- SEE EDGAR APPENDIX]
Aside from the adverse effect of its additions to reserves, Sacramento
Savings' operating results in 1993 continued to be strong, reflecting net
interest margins that
9
<PAGE> 7
remained favorable (although declining somewhat from 1992) due to low
short-term interest rates on most deposits, as well as continued control of
general and administrative expenses. Sacramento Savings reached an important
milestone in 1993, surpassing the $3 billion mark in assets.
The decline in revenues since 1991 is due to a combination of factors.
Interest rates began to drop in 1992, and in 1993 reached their lowest point in
decades. A substantial amount of Sacramento Savings' loan portfolio was
refinanced at these lower rates, generating reduced revenues. In addition,
Sacramento Savings experienced a fall-off in mortgage loan production in 1993,
as a result of the depressed real estate market in northern California.
Sacramento Savings' loan portfolio totalled $2.1 billion at year-end 1993,
compared with $2.2 billion at year-end 1992 and $2.1 billion at 1991 year-end.
Although the 1992 amount reflects a record $829.5 million in new loans that
year, a substantial portion of that amount represents refinancings at lower
interest rates. Increasing its total loan portfolio with an emphasis on
mortgage loans on single family homes, without compromising its high lending
standards, is one of Sacramento Savings' most important goals in 1994.
Capital Position
at December 31, 1993
CAPITAL POSITION GRAPH
TANGIBLE CAPITAL RISK BASED CAPITAL
MINIMUM REQUIREMENT $ 59,953,000 $131,369,000
SACRAMENTO SAVINGS
BANK:
EXCESS CAPITAL $ 98,215,000 $ 44,790,000
------------ ------------
SACRAMENTO SAVINGS
BANK:
TOTAL CAPITAL $158,168,000 $176,159,000
============ ============
In addition to easily exceeding acceptable capital requirements, Sacramento
Savings Bank has attained the status of a "well capitalized" institution as
defined under the Federal Deposit Insurance Corporation Improvement Act of
1991.
Deposits in 1993 grew by $168.0 million to $2.8 billion, despite lower
yields offered on certificates of deposit at all maturity ranges. Part of the
growth resulted from the acquisition of deposits from institutions contracting
their operations under regulatory pressure. Among all banking institutions in
the 14-county region constituting Sacramento Savings' primary deposit market,
Sacramento Savings has over 10 percent of all deposits, ranking third in
deposits both in the 14 counties overall and in Sacramento County itself.
Sacramento Savings ranks first in deposits among all savings institutions in
Sacramento County, with a market share of more than 40 percent.
Sacramento Savings administers over sixty approved deferred
compensation plans pursuant to which state and local government employees
deposit a portion of their compensation in order to defer taxes and build
savings. These deposits are long-term in nature, and have both fixed and
variable interest rates. As of 1993 year-end, such deposits totalled $448
million. However, $190 million of this amount, which is in one plan established
many years ago, earns a fixed rate of interest of 10 percent, substantially
higher than current market rates. Until this rate expires at 1994 year-end, it
will adversely affect Sacramento Savings' earnings.
An area of weakness, due to depressed real estate values and federal
regulatory restrictions, has been Sacramento Savings' real estate investments.
Sacramento Savings is distinguished from many savings institutions that have
pursued real estate activities by the strict policy constraints that have
guided its activities. It has consistently limited the scope of its real estate
activities so that such investments have never exceeded 5 percent of assets,
and are currently 1.24 percent of assets. As of December 31, 1993, Sacramento
Savings held real estate investments with
10
<PAGE> 8
an aggregate net book value (based on generally accepted accounting principles)
of $37.6 million, representing 18.8 percent of its total capital.
As a California-licensed savings association whose deposits are
federally insured, Sacramento Savings is subject to broad state and federal
regulation and oversight of its operations, including its real estate
activities. The Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (FIRREA) has imposed significant restrictions on such activities,
mandating that thrift institutions divest all real estate investments no later
than July 1, 1994 and that, until their divestiture, such investments must be
phased out of capital calculations. In accordance with its divestiture plan as
approved by the Federal Deposit Insurance Corporation (FDIC), Sacramento
Savings added $13.5 million to reserves in respect of such investments in 1991.
Sacramento Savings entered into negotiations with the FDIC in late 1992 for
relief from the write-off requirements in its divestiture plan, and no
comparable addition to reserves was made in that year. In 1993 Sacramento
Savings reached an understanding with the FDIC, pursuant to which the write-off
requirements were rescinded. In lieu thereof, Sacramento Savings is required to
make quarterly charges to its regulatory capital in an amount equal to such
write-off requirements. In 1993, Sacramento Savings booked direct charges to
its regulatory capital of $23.1 million in accordance with this understanding.
It is expected that, if none of its real estate investments are divested,
Sacramento Savings will make additional charges of $15 million to its
regulatory capital in the first half of 1994. By July 1, 1994, Sacramento
Savings will have fully written off its real estate investments for regulatory
purposes.
Despite the charges made and to be made to Sacramento Savings'
regulatory capital as a result of FIRREA's restrictions on its real estate
investment activities, Sacramento Savings has maintained a strong capital
position since its acquisition by Alleghany in late 1989. The Federal Deposit
Insurance Corporation Improvement Act of 1991 (FDICIA) established five new
capital categories and, as implemented by federal banking regulatory agencies,
established new "relevant capital measures" for those new capital categories.
As of December 31, 1993, Sacramento Savings met the requirements for inclusion
in the highest, or "well capitalized," category, which is reserved for
institutions that significantly exceed the required minimum level for each of
three specified capital measures. Sacramento Savings' capital ratios at
December 31, 1993, compared with such measures for an "adequately capitalized"
institution (describing an institution which meets only the required minimum
level) and a "well capitalized" institution, were as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Federal Requirement Federal Requirement
for "Adequately Capitalized" for "Well Capitalized" Sacramento
Institution Institution Savings
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Risk-Based
Capital Ratio 8.0% 10.0% 10.7%
Tier 1 Risk-Based
Capital Ratio 4.0% 6.0% 9.6%
Tangible Capital Ratio 2.0% 5.0% 5.3%
- ---------------------------------------------------------------------------------------------
</TABLE>
Sacramento Savings' short-term liquidity ratio (the ratio of
short-term liquid assets to withdrawable accounts) was 7.31 percent on
December 31, 1993, far exceeding the federal requirement of 1 percent.
11
<PAGE> 9
UNDERWRITERS REINSURANCE COMPANY
Underwriters, a New Hampshire corporation headquartered in Woodland
Hills, California, provides reinsurance to property and casualty insurers and
reinsurers. Although it writes many lines of business, Underwriters
concentrates on coverages requiring specialized underwriting expertise.
Underwriters is licensed or authorized to engage in business in 41 states, the
District of Columbia and Canada, and has branch offices in Atlanta, Chicago,
Houston, Woodland Hills and New York. According to the Reinsurance Association
of America, there were fifty-four domestic professional reinsurers at 1993
year-end, and Underwriters was the nation's sixteenth-largest in terms of net
premiums written.
Underwriters is currently rated "A (Excellent)" by A.M. Best Company,
Inc., an independent insurance industry rating organization. Best's
publications indicate that this rating is assigned to companies which Best's
believes have achieved excellent overall performance and have a strong ability
to meet their obligations over a long period of time.
Underwriters provides
coverage to clients
with casualty exposures
in industries such as
transportation.
[PHOTO -- SEE EDGAR APPENDIX]
To capitalize on advantageous market conditions and on Underwriters'
expertise in specialized coverages, Underwriters established Commercial
Underwriters Insurance Company, a California corporation, at the end of 1992.
Commercial Underwriters is a property and casualty insurance company that
focuses on specialized insurance lines.
12
<PAGE> 10
Reinsurance is an agreement between two insurance companies in which
one company, the "reinsurer," agrees to indemnify the other company, the
"reinsured" or "ceding company," for all or part of the insurance risks
underwritten by the reinsured. Reinsurance provides reinsureds with three
major benefits: it reduces net liability on individual risks, protects against
catastrophic losses and helps to maintain acceptable surplus and reserve
ratios.
The financial condition of property and casualty insurers and
reinsurers is subject to volatile and unpredictable natural disasters such as
hurricanes, windstorms, earthquakes, floods, fires and periods of severely cold
weather. Between 1989 and 1993, the worldwide reinsurance industry experienced
unusual catastrophic losses, in terms of both frequency and severity, from a
variety of natural disasters, including Hurricanes Hugo, Andrew and Iniki. This
extended period of unusual catastrophic losses has caused many reinsurers to
reduce significantly the amount of property catastrophe reinsurance they are
prepared to write. The significant reduction in capacity has led to increased
rates for such catastrophe coverage. Underwriters has increased its writings
and retentions of this business because it believes that substantial increases
in premium rates for property catastrophe coverage, combined, in certain
instances, with higher deductibles retained by reinsureds, have significantly
improved the risk/reward relationship on such coverage.
Underwriters writes most of its business through reinsurance brokers
and only a small portion of its business directly with ceding companies. Since
it works primarily through brokers, Underwriters does not need to maintain a
large sales organization which, during periods of reduced premium volume, could
comprise a significant and non-productive part of overhead. In addition,
Underwriters believes that submissions from the broker market, including
certain targeted specialty coverages, are more numerous and diverse than would
be available through a salaried sales organization, and Underwriters is able to
exercise greater selectivity than would be possible in dealing directly with
ceding companies.
Underwriters maintains a disciplined underwriting strategy with a
focus on generating profitable business rather than on increasing market share.
In response to the increased competition and lower premium rates which have
characterized the industry in recent years, Underwriters has maintained a
defensive underwriting posture by no longer writing lines of business that it
considers to be inadequate in terms of pricing or contract terms.
Another important element of Underwriters' underwriting strategy is to
seek to respond quickly to market opportunities (such as increased demand or
more favorable pricing) by adjusting the mix of business it writes. Recently,
Underwriters has taken advantage of such market opportunities by increasing its
writings of marine and aviation, property catastrophe, clash coverages and
certain excess and surplus lines programs.
13
<PAGE> 11
The specialized coverages on which Underwriters concentrates, which
require a relatively high degree of underwriting and actuarial analysis,
include certain excess and surplus lines programs, umbrella liability and
directors' and officers' liability. Underwriters believes that these risks
offer greater potential for favorable results than more general risks.
A reinsurer often reinsures some of its business with other reinsurers
pursuant to retrocession agreements, and cedes to such reinsurers a portion of
the premiums it receives. Underwriters' has retrocessional agreements with a
number of domestic and international reinsurance companies.
After its acquisition by Alleghany on October 7, 1993, Underwriters
contributed $3.0 million to Alleghany's 1993 pre-tax earnings on revenues of
$40.7 million. Underwriters' operating results were not materially impacted by
any unusual or non-recurring events during this period. Due to purchase
accounting adjustments related to the acquisition, these results are not
comparable to Underwriters' results in periods prior to the acquisition. After
Alleghany's acquisition of Underwriters, Alleghany, through a new holding
company which owns Underwriters, contributed approximately $51 million to the
capital of Underwriters, which increased Underwriters' statutory surplus to
$247.7 million as of 1993 year-end. Underwriters' management currently owns
about 5.4 percent of the capital stock of the new holding company which owns
Underwriters.
Reinsurance for clients
with property exposures
is another type of cov-
erage provided by
Underwriters.
[PHOTO -- SEE EDGAR APPENDIX]
14
<PAGE> 12
WORLD MINERALS INC.
World Minerals, headquartered in Lompoc, California, conducts a
worldwide industrial minerals business through its subsidiaries Celite
Corporation and Harborlite Corporation.
CELITE
CORPORATION
Celite is believed to be the world's largest producer of diatomite, a
silica-based mineral consisting of the fossilized remains of microscopic
freshwater or marine plants. Diatomite is used as a filter aid in the
production of beer, food, juice, wine, water, sweeteners, fats and oils,
pharmaceuticals, chemicals, lubricants and petroleum; it is also used as a
filler, mainly in paints, and as an anti-block agent in plastic film.
Celite is also a producer of calcium and magnesium silicate products,
which are used to convert liquid, semi-solid and sticky ingredients into dry,
free-flowing powders in the production of rubber, sweeteners, flavorings and
pesticides.
HARBORLITE
CORPORATION
Harborlite is a world leader in the production and sale of perlite, a
volcanic mineral. Harborlite sells perlite to companies that expand it and use
it primarily in the manufacture of roofing board, formed pipe insulation and
acoustical ceiling tile. Harborlite also expands perlite in its own expansion
plants in the United States and Europe. Most of Harborlite's expanded perlite
is sold as a filter aid to companies in the brewing, food, wine, sweetener,
pharmaceutical, chemical and lubricant industries, or as a filler and
insulating medium to companies in the construction industry.
In 1993, World Minerals
invested $5 million in
new mining equipment
at Lompoc, CA.
[PHOTO -- SEE EDGAR APPENDIX]
World Minerals contributed pre-tax earnings of $8.2 million on
revenues of $149.5 million in 1993, compared with $11.6 million on revenues of
$141.1 million in 1992. The increase in revenues was entirely attributable to
the acquisition in late 1992 of Harborlite's domestic filter-aid perlite
business. World Minerals' pre-tax earnings in 1993 were adversely affected by a
$1.3 million charge related to the
15
<PAGE> 13
downsizing of its workforce to increase productivity, lower gross margins
related in part to higher costs early in the year, and an increase of $0.9
million in interest costs due to higher debt levels.
World Minerals' operations in 1992 and 1993 generally have been
adversely affected by the sluggish economy, which has slowed activity in a
number of World Minerals' markets, such as the consumable products and
construction industries. Foreign operations generated about 31 percent and 36
percent of World Minerals' revenues in 1993 and 1992, respectively; and the
poor worldwide economy, particularly in Europe and Japan, together with falling
European currency values, contributed to World Minerals' lackluster results.
However, results improved toward the end of the year, reflecting the benefits
of increased revenues and reduced costs and expenses. Maintaining and building
on these improvements will be the primary focus for World Minerals in 1994.
Most of the businesses currently conducted by World Minerals were
acquired by Alleghany on July 31 and September 16, 1991, and those businesses
contributed pre-tax earnings of $6.1 million on revenues of $53.0 million in
the remainder of that year.
Since its acquisition by Alleghany, World Minerals has made important
structural changes to position itself for improved profitability over the long
term. It has consolidated its international and domestic operations into a
single, centrally managed worldwide business, and has assembled a new and
highly capable management team. Management has established new financial
systems and controls, and has focused on strengthening sales through a
synergistic consolidation of the Celite and Harborlite sales forces, all in an
effort to improve efficiency and productivity over the long term. World
Minerals continues to pursue possible acquisitions and joint ventures, and to
expand its business internally through opportunities discovered by means of
product research and development.
HEADS AND THREADS
Though a relatively small part of the Alleghany family of companies,
the Heads and Threads division of Alleghany, headquartered in Northbrook,
Illinois, is believed to be the nation's leading distributor of imported steel
fasteners. Nuts, bolts, screws and washers imported by Heads and Threads are
resold to fastener manufacturers and distributors through a network of sales
offices and warehouses located in fourteen states. The strength of Heads and
Threads lies in its five major warehouses and thirteen regional satellite
warehouses, and its long years of association with suppliers and customers.
Heads and Threads has been consistently profitable since its
acquisition by Alleghany in 1974, despite the cyclical nature of its business
and changing market conditions. Its earnings contribution to Alleghany
increased in each of the years 1991, 1992 and 1993. The contribution in 1993
was the highest since 1988, and resulted from higher sales and lower operating
costs than in 1992 and 1991.
Since Heads and Threads imports virtually all of its fasteners, its
costs are subject to foreign currency fluctuations and increases in import
duties. Costs may also be impacted by rules that have been proposed to
implement the Fastener Quality Assurance Act, which became law in late 1990.
16
<PAGE> 14
Alleghany Corporation and Subsidiaries
SELECTED FINANCIAL DATA
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Years Ended December 31
- -----------------------------------------------------------------------------------------------------------------------
1993 1992 1991 1990 1989
- -----------------------------------------------------------------------------------------------------------------------
OPERATING DATA
<S> <C> <C> <C> <C> <C>
Revenues from continuing operations $1,908,452 $1,788,424 $1,406,612 $1,224,329 $ 999,619
=======================================================================================================================
Earnings from continuing operations $ 97,552 $ 63,692 $ 21,725 $ 65,062 $ 46,977
Earnings from discontinued operations -- -- 42,248 3,529 8,006
Cumulative effect of accounting change -- 9,145 -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Net earnings $ 97,552 $ 72,837 $ 63,973 $ 68,591 $ 54,983
=======================================================================================================================
Earnings per share of common stock:*
Continuing operations $ 14.66 $ 9.57 $ 3.27 $ 9.46 $ 6.75
Discontinued operations -- -- 6.35 .51 1.15
Cumulative effect of accounting change -- 1.37 -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Net earnings $ 14.66 $ 10.94 $ 9.62 $ 9.97 $ 7.90
=======================================================================================================================
Average number of shares of common stock* 6,655,998 6,658,617 6,651,045 6,878,158 6,962,711
=======================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
December 31
- -----------------------------------------------------------------------------------------------------------------------
1993 1992 1991 1990 1989
- -----------------------------------------------------------------------------------------------------------------------
BALANCE SHEET
<S> <C> <C> <C> <C> <C>
Total assets $6,284,940 $4,856,444 $4,539,221 $3,946,029 $3,720,409
=======================================================================================================================
Long-term debt $ 406,938 $ 353,710 $ 391,687 $ 363,787 $ 342,611
=======================================================================================================================
Common stockholders' equity $ 915,734 $ 796,268 $ 724,184 $ 648,241 $ 616,971
=======================================================================================================================
Common stockholders' equity per share
of common stock* $ 138.19 $ 119.44 $ 108.85 $ 97.54 $ 88.50
=======================================================================================================================
</TABLE>
The Company acquired Sacramento Savings Bank on November 1, 1989, Ticor Title
Insurance Company of California on March 8, 1991, most of the businesses of
World Minerals Inc. on July 31, 1991, and URC Holdings Corp. on October 7,
1993. The Company sold The Shelby Insurance Company on December 31, 1991;
accordingly, the operations of Shelby have been classified as discontinued
operations.
* Restated to reflect subsequent common stock dividends.
DIVIDENDS, MARKET PRICES AND RELATED SECURITY HOLDER MATTERS
As of December 31, 1993, there were approximately 2,800 holders of record of
Alleghany common stock. The following table indicates quarterly high and low
prices of the common stock in 1993 and 1992 on the New York Stock Exchange.
Alleghany's ticker symbol is Y.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
1993 1992
- ----------------------------------------------------------------------
Quarter Ended High Low High Low
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
March 31 $142 $131 $125 1/2 $108 1/2
June 30 148 1/2 125 129 119
September 30 152 133 7/8 126 118 3/4
December 31 153 1/2 136 1/2 133 3/4 117 1/2
- -----------------------------------------------------------------------
</TABLE>
In each of 1992, 1993 and 1994, Alleghany's Board of Directors declared, as
Alleghany's dividend on its common stock for that year, a stock dividend
consisting of one share of Alleghany common stock for every fifty shares
outstanding. The 1992 and 1993 stock dividends were paid in April of each of
those years.
Alleghany's ability to pay cash dividends is restricted by the terms
of a revolving credit loan agreement. At December 31, 1993, this agreement
permitted the payment of dividends aggregating approximately $270 million. At
that date about $752 million of Alleghany's consolidated common stockholders'
equity of $916 million was unavailable for dividends or advances to Alleghany
from its subsidiaries, due to limitations imposed by statutes and agreements
with regulators and lenders to which those subsidiaries are subject.
21
<PAGE> 15
FINANCIAL CONDITION
In recent years, Alleghany has followed a policy of maintaining a
relatively liquid financial condition, in the form of cash and cash
equivalents, available credit lines and minimal amounts of debt at the parent
company, to enable it to take advantage of opportunities to expand its
operations through internal growth at its subsidiaries and through
operating-company acquisitions.
In October 1993, Alleghany acquired Underwriters Reinsurance Company
for a purchase price of about $201 million in cash. The acquisition of
Underwriters marked an important milestone in Alleghany's ongoing program to
redeploy its liquid assets into well-managed operating companies. After the
acquisition, Alleghany, through a new holding company which owns Underwriters,
contributed approximately $51 million to the capital of Underwriters, which
increased Underwriters' statutory surplus to $247.7 million as of 1993
year-end.
The cash purchase price for the acquisition of Underwriters, and a
portion of the funds used for the capital contribution to Underwriters, were
provided by cash resources generated by CT&T or previously contributed by
Alleghany to CT&T; CT&T paid cash dividends to Alleghany in an aggregate amount
of $235.5 million in 1993 out of these funds. At December 31, 1993, about $164
million of the equity of Alleghany's subsidiaries was available for dividends
or advances to Alleghany. At that date about $752 million of Alleghany's equity
of $916 million was unavailable for dividends or advances to Alleghany from its
subsidiaries, due to limitations imposed by statutes and agreements with
regulators and lenders to which those subsidiaries are subject. These
limitations have not affected Alleghany's ability to meet its obligations.
Alleghany gives high priority to maintaining its financial strength
and, accordingly, the quality of its financial assets. These efforts were
recognized by The Value Line Investment Survey, which gave Alleghany a ranking
of "A" for financial strength in 1992 and 1993. Alleghany also received Value
Line's highest ranking of "1" for safety, the only financial services company
to be so ranked in those years. Alleghany's strategy is illustrated by the
following:
* Alleghany, CT&T, Underwriters, World Minerals and Heads and Threads
have no significant passive real estate investments.
* Alleghany has declared stock dividends in lieu of cash dividends
every year since 1987, which have helped to conserve Alleghany's financial
strength and, in particular, the liquid assets available to finance internal
growth and operating-company acquisitions. On April 26, 1994, Alleghany will
pay to stockholders of record on April 1, as its dividend on its common stock
for 1994, a dividend of one share of Alleghany common stock for every 50 shares
outstanding.
In addition to its liquid financial assets, Alleghany has a revolving
credit agreement with a bank which provides a commitment for revolving credit
loans in an aggregate principal amount of $200 million. Borrowings are repaid
promptly in order to keep the facility available for future acquisitions. From
time to time, this facility has been used to provide financing for acquisitions
made by various subsidiaries of Alleghany, but such borrowings have been repaid
with proceeds of bank borrowings made directly by such subsidiaries without
recourse to Alleghany. No amounts were outstanding under Alleghany's credit
agreement at 1993 year-end.
Alleghany has announced that it may purchase shares of its common
stock in open market transactions from time to time. In 1993, Alleghany
purchased an aggregate of 55,200 shares of its common stock for about $7.9
million, at an average cost of about $143 per share. In 1992, Alleghany
purchased an aggregate of 10,500 shares of its common stock for about $1.2
million, at an average cost of about $118 per share.
Financial strength is also a high priority of Alleghany's
subsidiaries, whose assets stand behind their financial commitments to their
customers. The financial strength of CT&T is illustrated by the following
statistics from its insurance regulatory filings. Despite CT&T's cash dividends
to Alleghany totalling $235.5 million in 1993, its combined surplus as regards
policyholders was $150.4 million in 1993, a decline of about $180 million from
$332.9 million in 1992. Combined cash and marketable securities were $655.2
million in 1993, representing a decline of only about $140 million from 1992
levels and a decline of less than $25 million from 1991 levels. The strong
results posted by CT&T in 1992 and 1993 helped to minimize the impact of the
dividends to Alleghany. Unaffected by such dividends, CT&T's combined statutory
premium reserves increased to $365.6 million in 1993 from $354.5 million in
1992.
As of December 31, 1993, CT&T's two largest title insurance
subsidiaries -- Chicago Title Insurance Company and Ticor Title Insurance
Company -- had a statutory liquidity ratio of 1.0 or more, indicating that each
company's statutory premium reserves and surplus as regards policyholders were
more than covered by its cash and marketable securities.
Confirming the financial strength of the CT&T Family of Title
Insurers, each of CT&T's principal title insurance subsidiaries was assigned a
claims-paying ability of "A-" by Standard & Poor's Corporation in 1992 and
again in 1993.
On December 30, 1993, CT&T entered into a loan agreement with several
banks, pursuant to which it refinanced borrowings originally made for the
acquisi-
22
<PAGE> 16
tion of Security Union Title Insurance Company in 1987 and Ticor Title
Insurance Company of California in 1991. As of December 31, 1993, $71 million
was outstanding under this agreement. Pursuant to an interest rate swap
agreement, the interest rate on $42 million of the outstanding loan is fixed at
8.73 percent until December 1997; the remaining $29 million carries a floating
interest rate currently based on a LIBOR rate. The loan calls for annual
principal payments, with final maturity in December 2000.
Despite charges made and to be made to Sacramento Savings' regulatory
capital as a result of its real estate activities, Sacramento Savings has
maintained a strong capital position since its acquisition by Alleghany in
1989. As of December 31, 1993, Sacramento Savings met the requirements for
inclusion in the highest of five capital categories established by FDICIA,
enacted in 1991. As a "well capitalized" institution, Sacramento Savings
significantly exceeds the required minimum level with respect to each of three
capital measures: risk-based capital ratio (the ratio of total capital to
risk-weighted assets), Tier 1 risk-based capital ratio (the ratio of Tier 1
capital, or core capital, to risk-weighted assets), and tangible capital ratio
(the ratio of total capital to adjusted total assets).
Sacramento Savings' short-term liquidity ratio (the ratio of
short-term liquid assets to withdrawable accounts) was 7.31 percent on December
31, 1993, far exceeding the federal requirement of 1 percent.
At December 31, 1993, Sacramento Savings had total deposits of $2.8
billion, none of which were brokered deposits. Its deposits are insured by the
Savings Association Insurance Fund of the Federal Deposit Insurance
Corporation.
FIRREA, enacted in 1989, mandated that thrift institutions divest all
real estate investments no later than July 1, 1994 and that, until their
divestiture, such investments must be phased out of capital calculations.
Sacramento Savings is required to make quarterly charges to its regulatory
capital which will have the effect of fully writing off Sacramento Savings'
real estate investments by July 1, 1994 for regulatory purposes; such charges
totalled $23.1 million in 1993. It is expected that, if none of its real estate
investments are divested, Sacramento Savings will make additional charges of
$15 million to its regulatory capital in the first half of 1994.
Sacramento Savings had an unused line of credit with the Federal Home
Loan Bank totalling about $99 million (based on the amount of collateral
pledged) as of December 31, 1993. As of that date, Sacramento Savings also had
a $40 million line of credit available under the FHLB's short-term lending
program.
Underwriters' investment portfolio emphasizes quality and liquidity,
consisting primarily of fixed-maturity securities. As of December 31, 1993,
Underwriters' entire portfolio of long-term fixed-maturity securities was rated
investment grade by Moody's. In addition, between December 31, 1987 and
December 31, 1993, Underwriters decreased its outstanding long-term
indebtedness from $160 million to $79 million.
Underwriters is currently rated "A (Excellent)" by A.M. Best Company,
Inc., an independent insurance industry rating organization. Best's
publications indicate that this rating is assigned to companies which Best's
believes have achieved excellent overall performance and have a strong ability
to meet their obligations over a long period of time.
On October 7, 1993, Underwriters entered into an amended credit
agreement with several banks. As of December 31, 1993, $79 million was
outstanding under this agreement, at floating rates of interest currently based
on LIBOR rates. The principal amount outstanding is required to be reduced
periodically, with final maturity in December 1998.
World Minerals, its immediate parent and Celite have a credit facility
with three banks providing for borrowings and/or letters of credit totalling up
to $70 million. As of December 31, 1993, $65.0 million of indebtedness and $4.5
million of letters of credit were outstanding under this facility. Pursuant to
two interest rate swap agreements, the interest rate is fixed at 8.15 percent
on $60 million of indebtedness through December 1996. During 1997 and 1998, the
interest rate is fixed at 8.27 percent on $30 million of indebtedness, with the
balance, if any, at a floating rate based on a choice of standard rates,
including a LIBOR rate and a prime rate. The loan will mature in December 1998.
Heads and Threads has a credit facility with a bank providing for
letters of credit totalling up to $20 million.
As a result of the merger of Cyclops Industries, Inc. into a wholly
owned subsidiary of Armco Inc. on April 24, 1992, Alleghany's 825,807
shares of Cyclops common stock were converted into $9.1 million in cash and
1,643,355 shares of Armco common stock. As of March 1, 1994, Alleghany and its
subsidiaries owned 5,643,355 shares of Armco common stock, or 5.4 percent of
the outstanding common stock of Armco. In the merger, Alleghany acquired $30
million aggregate principal amount of Armco's 12.75% Senior Notes maturing on
June 15, 1994 in exchange for its 12.75% cumulative preferred stock of a
subsidiary of Cyclops. These notes were sold in a private placement in 1992 for
99.5 percent of face value, plus interest.
Alleghany management believes that Alleghany and its subsidiaries have
and will have adequate internally generated funds, cash resources and unused
credit facilities to provide for the currently foreseeable needs of its and
their businesses. Alleghany and its subsidiaries have no material commitments
for capital expenditures.
23
<PAGE> 17
Alleghany Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
December 31, 1993 and 1992
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
(in thousands, except share amounts) 1993 1992
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments
Fixed maturities:
Held to maturity (fair value: 1993 $267,605; 1992 $425,182) $ 267,010 $ 422,757
Available for sale (amortized cost: 1993 $1,730,148; fair value: 1992 $773,949) 1,742,797 763,532
- ----------------------------------------------------------------------------------------------------------------------
2,009,807 1,186,289
Equity securities: (cost: 1993 $113,078; fair value: 1992 $142,475) 144,616 114,928
- ----------------------------------------------------------------------------------------------------------------------
2,154,423 1,301,217
- ----------------------------------------------------------------------------------------------------------------------
Cash 163,748 81,750
Notes receivable 91,536 91,536
Loans receivable, less allowances 2,072,596 2,167,429
Accounts and other receivables, less allowances 193,573 117,003
Title records and indexes 155,121 159,511
Real estate 96,808 97,316
Property and equipment - at cost, less accumulated depreciation and amortization 257,753 240,191
Reinsurance receivable 353,903 --
Other assets 385,942 286,217
Assets pledged to secure trust and escrow deposits 359,537 314,274
- ----------------------------------------------------------------------------------------------------------------------
$6,284,940 $4,856,444
======================================================================================================================
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Deposits $2,750,573 $2,581,647
Title losses and other claims 533,190 512,452
Property and casualty losses and loss adjustment expenses 861,204 --
Other liabilities 464,287 299,590
Long-term debt of parent company 59,600 59,600
Long-term debt of subsidiaries 347,338 294,110
Trust and escrow deposits secured by pledged assets 353,014 312,777
- ----------------------------------------------------------------------------------------------------------------------
Total liabilities 5,369,206 4,060,176
Commitments and contingent liabilities
Common stockholders' equity (common shares issued
and outstanding: 1993 - 6,626,610; 1992 - 6,666,730) 915,734 796,268
- ----------------------------------------------------------------------------------------------------------------------
$6,284,940 $4,856,444
======================================================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
24
<PAGE> 18
Alleghany Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
Year Ended December 31,
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
(in thousands, except per share amounts) 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Title premiums, escrow and trust fees $1,379,463 $1,252,843 $ 970,781
Net reinsurance premiums earned 32,703 -- --
Interest on loans receivable 170,075 203,232 223,970
Interest, dividend and other income 160,170 183,972 158,507
Net mineral and filtration sales 148,719 139,951 52,839
Net gain on investment transactions 17,322 8,426 515
- -----------------------------------------------------------------------------------------------------------------------
Total revenues 1,908,452 1,788,424 1,406,612
- -----------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES
Salaries, commissions and other employee benefits 1,000,604 899,259 713,000
Administrative, selling and other operating expenses 369,159 377,262 318,018
Provisions for title losses and other claims 126,329 114,119 88,428
Property and casualty losses and loss adjustment expenses 25,131 -- --
Interest on deposits 114,096 131,788 163,327
Cost of mineral and filtration sales 107,846 98,805 37,871
Interest expense 29,263 32,602 35,519
Corporate administration 16,897 14,956 14,049
- -----------------------------------------------------------------------------------------------------------------------
Total costs and expenses 1,789,325 1,668,791 1,370,212
- -----------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations, before income taxes 119,127 119,633 36,400
Income taxes 21,575 55,941 14,675
- -----------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations 97,552 63,692 21,725
DISCONTINUED OPERATIONS
Earnings from discontinued operations -- -- 11,180
Gain on sale of Shelby, net of tax -- -- 31,068
- -----------------------------------------------------------------------------------------------------------------------
Earnings before cumulative effect of a change in
accounting for income taxes 97,552 63,692 63,973
Cumulative effect on prior years of a change in
accounting for income taxes -- 9,145 --
- -----------------------------------------------------------------------------------------------------------------------
Net earnings $ 97,552 $ 72,837 $ 63,973
=======================================================================================================================
Earnings per share of common stock:*
Continuing operations $ 14.66 $ 9.57 $ 03.27
Discontinued operations -- -- 06.35
Cumulative effect of accounting change -- 1.37 --
- -----------------------------------------------------------------------------------------------------------------------
Net earnings $ 14.66 $ 10.94 $ 9.62
=======================================================================================================================
</TABLE>
* Restated to reflect subsequent common stock dividends.
See accompanying Notes to Consolidated Financial Statements.
25
<PAGE> 19
Alleghany Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS' EQUITY
Three Years Ended December 31, 1993
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Unrealized Total
Appreciation Cumulative Common
Common Contributed (Depreciation) Treasury Retained Translation Stockholders'
(in thousands, except share amounts) Stock Capital of Securities Stock Earnings Gain (Loss) Equity
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1990 $6,638 $424,370 $(8,881) $ (29,758) $255,872 $ -- $648,241
(7,044,020 shares of common
stock issued; 398,297 in treasury)*
ADD (DEDUCT):
Net earnings -- -- -- -- 63,973 -- 63,973
Performance share plan distributions -- 93 -- 461 -- -- 554
Common stock dividend -- 2,045 -- 9,885 (12,036) -- (106)
Stock purchase plan distributions -- 32 -- 165 -- -- 197
Cumulative translation gain -- -- -- -- -- 2,500 2,500
Change in unrealized appreciation
(depreciation) of equity securities, net -- -- 8,825 -- -- -- 8,825
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1991 6,638 426,540 (56) (19,247) 307,809 2,500 724,184
(6,905,902 shares of common
stock issued; 252,966 in treasury)*
ADD (DEDUCT):
Net earnings -- -- -- -- 72,837 -- 72,837
Purchase of treasury shares -- -- -- (1,240) -- -- (1,240)
Performance share plan distributions -- 685 -- 1,402 -- -- 2,087
Common stock dividend -- 6,032 -- 10,102 (16,261) -- (127)
Stock purchase plan distributions -- 15 -- 601 -- -- 616
Cumulative translation loss -- -- -- -- -- (3,291) (3,291)
Change in unrealized appreciation
(depreciation) of equity securities, net -- -- 1,202 -- -- -- 1,202
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1992 6,638 433,272 1,146 (8,382) 364,385 (791) 796,268
(6,770,492 shares of common
stock issued; 103,762 in treasury)*
ADD (DEDUCT):
Net earnings -- -- -- -- 97,552 -- 97,552
Purchase of treasury shares -- -- -- (7,897) -- -- (7,897)
Performance share plan distributions -- 322 -- 966 -- -- 1,288
Common stock dividend 130 17,450 -- -- (17,716) -- (136)
Stock purchase plan distributions -- 51 -- 550 -- -- 601
Cumulative translation loss -- -- -- -- -- (2,042) (2,042)
Change in unrealized appreciation
(depreciation) of available for sale
and equity securities, net** -- -- 30,100 -- -- -- 30,100
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1993 $6,768 $451,095 $31,246 $ (14,763) $444,221 $(2,833) $915,734
(6,767,518 shares of common
stock issued; 140,908 in treasury)
==================================================================================================================================
</TABLE>
* Adjusted to reflect subsequent common stock dividends.
** Includes the effects of the adoption of FAS 115, "Accounting For Certain
Investments in Debt and Equity Securities," of $30,249, net.
See accompanying Notes to Consolidated Financial Statements.
26
<PAGE> 20
Alleghany Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Years Ended December 31, 1993
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
(in thousands) 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Earnings from continuing operations $ 97,552 $ 63,692 $ 21,725
Adjustments to reconcile earnings from continuing operations to
cash provided by (used in) continuing operations:
Depreciation and amortization 45,288 56,509 31,988
Provision for estimated loan and real estate losses 13,150 23,015 21,648
Amortization and accretion of discounts and premiums (6,761) (7,106) (10,277)
Net gain on investment transactions (17,322) (8,426) (515)
Other charges to continuing operations, net (2,667) (7,569) (23,351)
(Increase) decrease in accounts and other receivables (1,280) 5,497 9,264
Decrease in reinsurance receivable 9,614 -- --
Increase (decrease) in title losses and other claims 20,738 9,316 (9,705)
Decrease in property and casualty loss and loss adjustment expenses (10,040) -- --
Increase in other assets (4,536) (7,584) (49,456)
Increase in other liabilities 46,282 18,367 6,410
(Decrease) increase in net assets pledged to secure trust and escrow deposits (5,026) 6,977 80
- ------------------------------------------------------------------------------------------------------------------------------
Net adjustments 87,440 88,996 (23,914)
- ------------------------------------------------------------------------------------------------------------------------------
Cash provided by (used in) continuing operations 184,992 152,688 (2,189)
Cash provided by discontinued operations -- -- 11,180
- ------------------------------------------------------------------------------------------------------------------------------
Cash provided by operations 184,992 152,688 8,991
- ------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments (1,931,830) (1,243,120) (1,586,300)
Maturities of investments 808,314 0,503,195 1,011,462
Sales of investments 1,023,465 605,828 606,157
Net decrease (increase) in loans receivable 76,935 (62,574) (102,599)
Net decrease in loans held for sale 2,480 176 26,247
Purchase of real estate (5,874) (108) (685)
Sales of real estate 21,589 22,134 9,514
Purchases of property and equipment (41,787) (34,648) (20,610)
Disposition of property and equipment 2,279 7,788 8,312
Net sales (purchases) of title records and indexes 4,390 (25,381) 1,949
Sale of Shelby -- -- 125,000
Purchase of Ticor Title -- -- (59,738)
Purchase of World Minerals -- -- (144,386)
Purchase of Underwriters Re (203,865) -- --
Cash of purchased subsidiaries 10,159 -- 6,760
Purchase of other subsidiaries, net of cash acquired -- (18,669) (10,000)
- -------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities $ (233,745) $ (245,379) $ (128,917)
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
27
<PAGE> 21
Alleghany Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
Three Years Ended December 31, 1993
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
(in thousands) 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease (increase) in notes receivable $ -- $ 1,156 $ (1,228)
Principal payments on long-term debt (33,081) (59,795) (225,775)
Proceeds of long-term debt 1,050 21,818 245,564
Net increase in deposits 168,926 108,040 149,358
Purchase of treasury shares (7,897) (1,240) --
Common stock distributions 1,753 489 645
- ------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 130,751 70,468 168,564
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash 81,998 (22,223) 48,638
Cash at beginning of year 81,750 103,973 55,335
- ------------------------------------------------------------------------------------------------------------------------------
Cash at end of year $ 163,748 $ 81,750 $ 103,973
==============================================================================================================================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ 142,669 $ 163,987 $ 192,663
Income taxes $ 55,539 $ 56,127 $ 10,615
- ------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITY
Transfer of loans to facilitate the sale of real estate $ 31,963 $ 18,014 $ 20,067
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
28
<PAGE> 22
Alleghany Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
A. PRINCIPLES OF FINANCIAL STATEMENT PRESENTATION.
Alleghany Corporation, a Delaware corporation ("Alleghany" or together with its
subsidiaries, the "Company") owns Chicago Title and Trust Company ("CT&T")
whose principal subsidiaries are Chicago Title Insurance Company ("CTI"),
Security Union Title Insurance Company ("Security Union") and Ticor Title
Insurance Company ("Ticor Title"); Alleghany Financial Inc. ("AFI") whose
principal subsidiary is Sacramento Savings Bank ("Sacramento Savings");
Alleghany Funding Corporation ("AFC"); World Minerals Inc. ("World Minerals");
and URC Holdings Corp. ("Underwriters Re") whose principal subsidiary is
Underwriters Reinsurance Company ("Underwriters Reinsurance"). The Shelby
Insurance Company ("Shelby") was sold on December 31, 1991 and accordingly its
operations are shown as discontinued operations for that year. See Note 3.
The accompanying consolidated financial statements include the
accounts of Alleghany and its subsidiaries. All significant intercompany items
have been eliminated in consolidation.
B. INVESTMENTS.
Marketable investment securities at December 31, 1993 consist of U.S. Treasury
securities, mortgage-backed securities, corporate debt securities, certificates
of deposit, and equity securities. The Company adopted the provisions of
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" at December 31, 1993. Under
Statement No. 115, the Company classifies its debt and marketable equity
securities into one of three categories: trading, available for sale, or held
to maturity. Trading securities are bought and held principally for the purpose
of selling them in the near term. The Company has no trading securities as of
December 31, 1993. Held to maturity securities are those fixed maturity
securities which the Company has the ability and intent to hold until maturity.
Securities held for indefinite periods of time which may not be held to
maturity are classified as available for sale.
Available for sale securities are recorded at fair value. Held to
maturity securities are recorded at amortized cost, adjusted for the
amortization or accretion of premiums or discounts. Unrealized holding gains
and losses, net of the related tax effect, on available for sale securities are
excluded from earnings and are reported as a separate component of
stockholders' equity until realized.
A decline in the fair value of an available for sale or a held to
maturity security below cost that is deemed other than temporary is charged to
earnings.
Marketable investment securities at December 31, 1992 are carried at
amortized historical cost and classified as held for investment if the Company
has the intent and ability at the time of purchase to hold such securities
until maturity. Securities to be held for indefinite periods of time and not
intended to be held to maturity are classified as available for sale and
carried at the lower of aggregate cost or market value.
At December 31, 1992, equity securities, which include common stocks
and non-redeemable preferred stocks, except those held by insurance
subsidiaries, were carried at the lower of aggregate cost or market value. Net
unrealized depreciation, if any, on fixed maturities available for sale and
equities carried at the lower of aggregate cost or market value, is shown as a
separate component of stockholders' equity, net of deferred taxes, and is not
included in the determination of net income, except in the case of Sacramento
Savings where any unrealized depreciation is a component of net income. Equity
securities held by insurance subsidiaries are carried at market value and
unrealized gains or losses, net of deferred taxes, are included as a separate
component of stockholders' equity and are not included in the determination of
net income. Gains or losses on the revaluation or sale of trading account
securities at Sacramento Savings are included in other income.
C. PROPERTY AND EQUIPMENT.
Depreciation of buildings and equipment and amortization of leasehold
improvements are principally calculated using the straight-line method over the
estimated useful lives of the respective assets or the life of the lease,
whichever is less.
D. REAL ESTATE.
Real estate acquired for investment or development is carried at the lower of
cost or fair value. Development costs, interest, and certain other holding
costs are capitalized during the development period. A provision for loss is
established for any amounts in excess of fair value. Revenues from the sales of
such real estate are recognized at the time title is conveyed to the buyer at
the close of escrow, minimum down payment requirements are met, the terms of
any notes received satisfy
29
<PAGE> 23
Alleghany Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
continuing payment requirements and there are no requirements for continuing
involvement with the properties.
Sacramento Savings is a partner in and advances purchase and
development funds to several real estate development joint ventures. Sacramento
Savings does not have a controlling financial interest in these entities and
accounts for them on the equity basis. A provision for loss is established for
investments and advances in joint ventures that are believed to be in excess of
estimated fair value of Sacramento Savings' share of joint venture property.
Interest income on advances related to Sacramento Savings' percentage ownership
in a joint venture is deferred until the properties are sold to third parties.
Real estate acquired through foreclosure is initially recorded and
thereafter carried at the lower of the unpaid loan balance at the date of
foreclosure plus foreclosure and certain other costs, or fair value.
Collateral that has been "in-substance" foreclosed is reported in the
consolidated financial statements as other real estate owned, regardless of
whether the collateral has been formally foreclosed.
E. TITLE RECORDS AND INDEXES.
Title records and indexes are recorded at cost. The cost is not being amortized
and, in the opinion of management, has not diminished in value. Costs of
maintaining title records and indexes are expensed in the year incurred.
F. TITLE LOSSES AND OTHER CLAIMS.
Liabilities for title losses and other claims are estimated based on the title
insurance subsidiaries' experience. These amounts include both case-basis
evaluations and formula calculations and represent the estimated net cost of
all unpaid losses. In the opinion of management, reserves for title losses and
other claims are adequate.
G. PROPERTY AND CASUALTY LOSSES AND LOSS ADJUSTMENT EXPENSES.
The liability for outstanding losses and loss adjustment expenses includes
estimated provisions for all reported and unreported claims incurred and is
reduced by allowances for salvage and subrogation. In the opinion of
management, reserves for property and casualty losses and loss adjustment
expenses are adequate.
H. PROVISION FOR ESTIMATED LOSSES AND UNCOLLECTED INTEREST.
Sacramento Savings adopted the provisions of Statement of Financial Accounting
Standards No. 114, "Accounting by Creditors for Impairment of Loans," on
December 31, 1993. The effects of adopting Statement No. 114 had an
insignificant impact on the Company's financial statements.
In determining the provision for estimated losses related to specific
major loans, management evaluates its allowance on an individual loan basis,
including an analysis of the credit worthiness, cash flows and financial status
of the borrower, and the condition and the estimated value of the collateral.
Specific valuation allowances for secured loans are determined by the excess of
recorded investment in the loan over the fair market value or net realizable
value, where appropriate, of the collateral. In determining overall general
valuation allowances to be maintained and the loan loss allowance ratio,
management evaluates many factors including prevailing and forecasted economic
conditions, regular reviews of the quality of loans, industry experience,
historical loss experience, composition and geographic concentrations of the
loan portfolio, the borrowers' ability to repay and repayment performance and
estimated collateral values.
In the opinion of management, the present allowance is considered
adequate to absorb reasonable, foreseeable loan losses. Additions to the
allowance are reflected in current operations. Chargeoffs to the allowance are
made when the loan is considered uncollectible or is transferred to real estate
owned. Recoveries are credited to the allowance.
Accrued interest on loans that are contractually more than sixty days
past due is reversed and charged against interest income. Income is
subsequently recognized only to the extent cash payments are received and the
principal balance is expected to be recovered. Such loans are restored to an
accrual status only if the loan is brought contractually current and the
borrower has demonstrated the ability to make future payments of principal and
interest.
I. REVENUE RECOGNITION.
Title insurance premiums are recognized as revenues principally at the time of
the real estate closing. Escrow and trust fees are recognized principally when
billed.
Loan origination and commitment fees and certain direct loan
origination and commitment costs are deferred and recognized over the lives of
the related loans or the commitment period using the level-yield method.
Sacramento Savings defers fees and permissible costs and calculates the level
yield on a loan-by-loan basis.
30
<PAGE> 24
Property and casualty insurance premiums are reflected in income
generally on a daily pro rata basis for facultative business and as reported by
the ceding company for treaty business.
J. POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS.
Effective January 1, 1992, the Company adopted Statement of Financial
Accounting Standards No. 106 "Employers' Accounting for Postretirement Benefits
Other than Pensions." Statement No. 106 requires that the expected cost of
postretirement benefits, other than pensions, be charged to expense during the
period that the employee renders service. Previously, these costs were
recognized by expensing, at the time of retirement, the amount necessary to
fund the estimated cost of these benefits. The adoption of Statement No. 106
had an insignificant impact on the Company's financial position and results of
operations.
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting No. 112 "Employers' Accounting for Postemployment Benefits," which,
similar to Statement No. 106, requires accrual of a liability representing the
cost of certain benefits earned by employees over their employment period.
Statement No. 112 applies to vested benefits provided to former or inactive
employees, their beneficiaries and covered dependents, after employment but
before retirement. The adoption of Statement No. 112 had an insignificant
impact on the Company's financial position and results of operations.
K. FAIR VALUE DISCLOSURES.
Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments," requires disclosure of fair value information
about financial instruments, whether or not recognized in the balance sheet,
for which it is practicable to estimate that value. In cases where quoted
market prices are not available, fair values are based on estimates using
present value or other valuation techniques. These techniques are significantly
affected by the assumptions used. As such, the derived fair value estimates
cannot be substantiated by comparison to independent markets and, in many
cases, could not be realized in immediate settlement of the instrument.
Furthermore, the Company generally intends to hold the financial instrument
until maturity. Statement No. 107 excludes certain financial instruments and
all nonfinancial instruments from its disclosure requirements. Accordingly, the
aggregate fair value amounts presented do not represent the underlying value of
the Company.
Fair value estimates are made at a specific point in time, based on
relevant market information about the financial instrument. These estimates are
subjective in nature and involve uncertainties and matters of significant
judgment and, therefore, cannot be determined with precision. Changes in
assumptions could significantly affect the estimates.
Fair value estimates are based on existing on- and off-balance sheet
financial instruments without attempting to estimate the value of anticipated
future business and the value of assets and liabilities that are not considered
financial instruments.
L. INCOME TAXES.
The Company files a consolidated federal income tax return with its domestic
subsidiaries. Effective January 1, 1992, the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" and has
separately reported in 1992 the cumulative effect of the change in the method
of accounting for income taxes. Statement No. 109 required a change from the
deferred method of accounting for income taxes under Accounting Principles
Board Opinion No. 11 to the asset and liability method of accounting for income
taxes. Under the asset and liability method of Statement No. 109, deferred tax
assets and liabilities are recognized for the future tax consequence
attributable to differences between the financial statement carrying amount of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. Under Statement No. 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.
Pursuant to the deferred method under APB Opinion No. 11, which was
applied in 1991 and prior years, deferred income taxes were recognized for
income and expense items that were reported in different years for financial
reporting purposes and income tax purposes using the tax rate applicable in the
year of calculation. Under the deferred method, deferred taxes are not adjusted
for subsequent changes in tax rates.
31
<PAGE> 25
Alleghany Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
M. ACQUISITION COSTS.
Acquisition costs related to unearned property and casualty reinsurance
premiums are deferred by major underwriting lines and amortized over the period
in which the premiums are earned. The method followed in computing the
deferred acquisition costs consists of deferring only those variable
acquisition costs, such as commissions and brokerage fees, which relate
directly to the production of business, and limiting the amount of those costs
deferred to their net realizable value after allowing for anticipated
investment income.
N. REINSURANCE.
Underwriters Re follows the provisions of statement of Financial Accounting
Standard No. 113, "Accounting and Reporting for Reinsurance for Short-Duration
and Long-Duration Contracts." Reinsurance receivables (including amounts
related to claims incurred but not reported) and prepaid reinsurance premiums
are reported as assets. Reinsurance contracts that do not result in a
reasonable possibility that the reinsurer may realize a significant loss from
the insurance risk assumed generally do not meet the conditions for reinsurance
accounting and are accounted for as deposits.
O. CASH.
For purposes of the consolidated statements of cash flows, cash includes only
funds on deposit which are available for immediate withdrawal.
2. ACQUISITIONS
A. UNDERWRITERS RE
On October 7, 1993, the Company acquired approximately 93% of the issued and
outstanding capital stock of a new holding company which owns all of the issued
and outstanding capital stock of Underwriters Reinsurance, a New Hampshire
corporation headquartered in California, which provides reinsurance to property
and casualty insurers and reinsurers. Underwriter Reinsurance also owns a
recently formed property and casualty insurance subsidiary, Commercial
Underwriters Insurance Company, which concentrates on specialized insurance
lines. The purchase price was approximately $204 million, including capitalized
costs.
The acquisition of Underwriters Reinsurance was effective for
accounting purposes as of October 1, 1993, and has been accounted for by the
purchase method of accounting. Accordingly, the accounts of Underwriters
Reinsurance, after adjustment to reflect fair values assigned to assets and
liabilities, have been included in the consolidated financial statements of the
Company after the effective date of the acquisition.
The net assets of Underwriters Reinsurance, at their acquisition date,
after adjustment to reflect fair value assigned to assets and liabilities, are
presented below (in millions):
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------
Cash, investment securities, and other receivables $ 781
Reinsurance receivable 364
Other assets (including goodwill) 134
Property and casualty losses and loss adjustment expenses $(871)
Long-term debt and other liabilities (including minority interest) (204)
- ---------------------------------------------------------------------------------
Net assets acquired $ 204
=================================================================================
</TABLE>
The unaudited pro forma results of operations for the years ended
December 31, 1993 and 1992, presented as if the acquisition of Underwriters
Reinsurance was made at the beginning of 1992, are as follows (in millions,
except per share data):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
1993 1992
- ---------------------------------------------------------------------------------
<S> <C> <C>
Total revenues $2,092 $1,987
=================================================================================
Earning before cumulative effect of a change
in accounting for income tax $ 87 $ 83
=================================================================================
Net earnings $ 87 $ 100
=================================================================================
Net earnings per share of common stock $13.10 $15.09
=================================================================================
</TABLE>
The unaudited pro forma results of operations do not purport to be
indicative of results that actually would have been obtained had the operations
been consolidated during these periods. The above amounts primarily reflect
adjustments for the income effect of revaluation of the assets and liabilities
of the purchased businesses, and decreased investment income resulting from the
financing of such acquisitions.
B. TICOR TITLE.
On March 8, 1991, the Company, through its wholly owned subsidiary CT&T,
acquired Ticor Title Insurance Company of California and an ancillary company
from Westwood Equities Corporation for an adjusted cash purchase price of
approximately $60 million including capitalized costs.
32
<PAGE> 26
C. WORLD MINERALS.
On July 31, 1991, a holding company subsidiary of Alleghany acquired from
Manville Corporation all of its diatomaceous earth and perlite businesses. The
purchase price was approximately $144 million including capitalized costs.
On September 16, 1991, a diatomaceous earth mine and plant in the
state of Washington was acquired for approximately $10 million, and on November
16, 1992, a privately owned perlite filter aid company was acquired for
approximately $16 million. These acquisitions had an immaterial effect on 1992
and 1991 earnings.
The acquisitions of Ticor Title Insurance Company of California and
most of the present businesses of World Minerals were effective for accounting
purposes as of March 31, 1991 and July 31, 1991, respectively, and have been
accounted for by the purchase method of accounting. Accordingly, the accounts
of Ticor Title Insurance Company of California and World Minerals, after
adjustment to reflect fair values assigned to assets and liabilities, have been
included in the accompanying consolidated financial statements after the
respective effective dates of such acquisitions.
3. SALE OF SHELBY
On December 31, 1991, Alleghany sold its wholly owned property, casualty, life
and annuity subsidiary, The Shelby Insurance Company, to The Associated Group
for a cash purchase price of approximately $125 million. The operations of
Shelby are presented as discontinued operations in the accompanying
consolidated financial statements.
Condensed information relating to discontinued operations are as
follows (in thousands):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
1991
- ---------------------------------------------------------------------------------
<S> <C>
Revenues $198,215
=================================================================================
Pre-tax earnings from discontinued operations $ 11,180
Income taxes --
- ---------------------------------------------------------------------------------
Earnings from discontinued operations, net 11,180
Gain on sale of Shelby, net of tax of $2,000 31,068
- ---------------------------------------------------------------------------------
Earnings from discontinued operations $ 42,248
=================================================================================
</TABLE>
4. INVESTMENTS
Investments at December 31, 1993 and 1992 are summarized as follows (in
thousands):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
1993
- ---------------------------------------------------------------------------------------------------------------
Amortized
Cost Fair Carrying
CONSOLIDATED or Cost Value Value
- ---------------------------------------------------------------------------------------------------------------
FIXED MATURITIES
<S> <C> <C> <C>
Held to maturity:
U.S. Government,
government agency
and municipal obligations $ 265,975 $ 266,570 $ 265,975
Certificates of deposit 1,035 1,035 1,035
- ---------------------------------------------------------------------------------------------------------------
267,010 267,605 267,010
Available for sale:
U.S. Government,
government agency
and municipal obligations 1,134,897 1,144,090 1,144,090
Certificates of deposit 2,243 2,243 2,243
Commercial paper 140,552 140,552 140,552
Securities purchased under
agreements to resell 75,091 75,091 75,091
Bonds, notes and other 377,365 380,821 380,821
- ---------------------------------------------------------------------------------------------------------------
1,730,148 1,742,797 1,742,797
EQUITY SECURITIES 113,078 144,616 144,616
- ---------------------------------------------------------------------------------------------------------------
$2,110,236 $2,155,018 $2,154,423
===============================================================================================================
INDUSTRY SEGMENT
- ---------------------------------------------------------------------------------------------------------------
Title, trust and escrow $ 642,310 $ 655,390 $ 655,390
Property and casualty reinsurance 770,240 770,092 770,092
Banking 634,434 635,494 634,899
Mining and filtration 6,562 6,562 6,562
Corporate activities 56,690 87,480 87,480
- ---------------------------------------------------------------------------------------------------------------
$2,110,236 $2,155,018 $2,154,423
===============================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
1992
- ---------------------------------------------------------------------------------------------------------------
Carrying Fair
CONSOLIDATED VALUE VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FIXED MATURITIES
Held for investment:
U.S. Government, government agency
and municipal obligations $ 387,617 $ 390,042
Certificates of deposit 190 190
Securities purchased under agreements
to resell 34,950 34,950
- ---------------------------------------------------------------------------------------------------------------
422,757 425,182
Available for sale:
U.S. Government, government agency
and municipal obligations 399,960 406,877
Certificates of deposit 51,568 51,568
Commercial paper 135,912 135,912
Bonds, notes and other 176,092 179,592
- ---------------------------------------------------------------------------------------------------------------
763,532 773,949
Equity securities 114,928 142,475
- ---------------------------------------------------------------------------------------------------------------
$1,301,217 $1,341,606
===============================================================================================================
</TABLE>
33
<PAGE> 27
Alleghany Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
1992
- ---------------------------------------------------------------------------------------------------------------
Carrying Fair
INDUSTRY SEGMENT Value Value
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Title, trust and escrow $ 777,162 $ 790,054
Banking 422,567 424,992
Mining and filtration 3,207 3,207
Corporate activities 98,281 123,353
- ---------------------------------------------------------------------------------------------------------------
$1,301,217 $1,341,606
===============================================================================================================
</TABLE>
The amortized cost and estimated fair values of debt securities at
December 31, 1993 and 1992 are summarized as follows (in thousands):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Gross Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1993
- ---------------------------------------------------------------------------------------------------------------
Held to maturity:
U.S. Government,
government agency and
municipal obligations $ 265,975 $ 1,690 $(1,095) $ 266,570
===============================================================================================================
Available for sale:
U.S. Government,
government agency and
municipal obligations $1,134,897 $14,786 $(5,593) $1,144,090
Commercial paper 140,552 -- -- 140,552
Bonds, notes and other 353,741 6,123 (2,666) 357,198
- ---------------------------------------------------------------------------------------------------------------
$1,629,190 $20,909 $(8,259) $1,641,840
1992
- ---------------------------------------------------------------------------------------------------------------
Held for investment:
U.S. Government,
government agency and
municipal obligations $ 387,617 $ 3,397 $ (972) $ 390,042
===============================================================================================================
Available for sale:
U.S. Government,
government agency and
municipal obligations $ 399,960 $ 8,085 $(1,168) $ 406,877
Commercial paper 135,912 -- -- 135,912
Bonds, notes and other 146,511 3,786 (286) 150,011
- ---------------------------------------------------------------------------------------------------------------
$ 682,383 $11,871 $(1,454) $ 692,800
===============================================================================================================
</TABLE>
The amortized cost and estimated fair value of debt securities
classified as available for sale and held to maturity at December 31, 1993, by
contractual maturity, are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
===============================================================================================================
Amortized Estimated
Cost Fair Value
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Available for sale:
Due in one year or less $ 308,380 $ 310,092
Due after one year through five years 501,120 506,400
Due after five years through ten years 199,192 199,966
Due after ten years 336,207 341,042
Mortgage-backed securities 284,291 284,340
- ---------------------------------------------------------------------------------------------------------------
$1,629,190 $1,641,840
===============================================================================================================
Held to maturity:
Mortgage-backed securities $ 265,975 $ 266,570
===============================================================================================================
</TABLE>
The proceeds from sales and maturities of investments in debt
securities were $925 million, $453 million, and $479 million in 1993, 1992, and
1991, respectively.
Gross realized gains and gross realized losses on sales of investments
in debt securities were $5.5 million and $2.6 million, $3.9 million and $0.7
million, and $5.0 million and $0.5 million, respectively, in 1993, 1992, and
1991.
During 1993, Alleghany had equity investments that were trading below
cost. The Company determined that these declines were other than temporary and,
accordingly, recorded a loss provision of approximately $4.6 million for these
investments. During 1992, no loss provisions were recorded.
At December 31, 1993 and 1992, investments totalling approximately
$366 million and $354 million, respectively, were pledged principally to secure
unearned title insurance premium liabilities computed under statutory insurance
regulations, as required by law. Also, at December 31, 1993 and 1992,
securities totalling approximately $81 million and $11 million, respectively,
were pledged principally to secure public agency deposits.
Assets pledged to secure trust and escrow deposits at December 31,
1993, carried at fair value, and 1992, carried at amortized cost, which
approximates fair value as follows (in thousands):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
1993 1992
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash $ 68,392 $139,538
U.S. Government and municipal obligations 191,076 174,722
Certificates of deposit 22,000 14
Equity securities 10,050 --
Money market funds 68,019 --
- ---------------------------------------------------------------------------------------------------------------
$359,537 $314,274
===============================================================================================================
</TABLE>
34
<PAGE> 28
Additionally, Alleghany's title insurance subsidiaries administer
escrow deposits generally related to customers' real estate transactions. The
funds are not considered assets and liabilities of the Company and,
accordingly, amounts aggregating approximately $791 million and $755 million
are excluded from the accompanying consolidated balance sheets at December 31,
1993 and 1992, respectively.
5. LOANS RECEIVABLE
Loans receivable, less allowances, at December 31, 1993 and 1992, are
summarized as follows (in thousands):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
1993 1992
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Residential real estate $1,650,660 $1,674,751
Commercial real estate 323,746 350,288
Construction real estate 124,884 190,923
Less: Undisbursed portion of loans in process (36,838) (59,777)
- ---------------------------------------------------------------------------------------------------------------
2,062,452 2,156,185
Other 40,647 43,227
- ---------------------------------------------------------------------------------------------------------------
2,103,099 2,199,412
Less: Allowance for estimated loan losses (22,442) (22,798)
Unamortized loan fees (8,061) (9,185)
- ---------------------------------------------------------------------------------------------------------------
$2,072,596 $2,167,429
===============================================================================================================
</TABLE>
At December 31, 1993 and 1992, approximately 98% of outstanding loans
were secured by real estate, primarily in the state of California. No
individual loan is material to the portfolio.
Sacramento Savings normally only lends funds up to a certain
percentage of the collateral's value as stated in Sacramento Savings'
underwriting policies based on the type of real estate. The different types of
real estate collateral securing Sacramento Savings' loan portfolio are 1-4
family residences, apartment complexes, office buildings, shopping centers,
undeveloped land, and other real estate.
At December 31, 1993 and 1992, loans totalling approximately $355
million and $509 million, respectively, were pledged to secure public agency
and deferred compensation deposits, a Federal Home Loan Bank of San Francisco
("FHLB") advance, an unused line of credit, and a note payable. See Note 7.
The following is a summary of the activity in the allowance for
estimated loan losses for the years ended December 31, 1993, 1992, and 1991,
respectively (in thousands):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
1993 1992 1991
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of year $22,798 $18,323 $18,458
Provision for loan losses 4,945 9,082 1,988
Allowance acquired in acquisition -- 200 --
Net charge-offs (5,301) (4,807) (2,123)
- --------------------------------------------------------------------------------------------------------------
Balance at end of year $22,442 $22,798 $18,323
==============================================================================================================
</TABLE>
Non-accrual and renegotiated loans, for which interest has been
reduced, totalled approximately $64.0 million and $57.5 million at December 31,
1993 and 1992, respectively. Sacramento Savings is not committed to lend
additional funds to debtors whose loans have been modified. Management does not
expect any material loss in the collection of these loans. Interest income of
approximately $3.5 million, $2.7 million, and $1.5 million for the years ended
December 31, 1993, 1992, and 1991, respectively, would have been recorded if
non-accrual and past due loans had been current. Management considers $67
million to be the total value of impaired loans at December 31, 1993, which
includes non-accrual and renegotiated loans. Interest income of approximately
$1.6 million, $2.3 million, and $2.6 million for the years ended December 31,
1993, 1992, and 1991, respectively, has been recorded for non-accrual and past
due loans. Sacramento Savings had loans held for sale of $21.2 million at
December 31, 1993.
Sacramento Savings was servicing loans sold totalling approximately
$191.9 million and $195.1 million at December 31, 1993 and 1992, respectively,
the balances of which are not included in the accompanying consolidated balance
sheets. All sales of loans were made without recourse.
6. REAL ESTATE
Real estate investments, joint ventures and other real estate owned at December
31, 1993 and 1992 are summarized as follows (in thousands):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
1993 1992
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Real estate purchased for investment $ 18,636 $ 23,750
Investments in and advances to joint ventures 34,524 54,875
Loans accounted for as real estate -- 23,344
Real estate acquired through foreclosures 50,084 21,447
- ---------------------------------------------------------------------------------------------------------------
$103,244 $123,416
Less: Allowance for estimated real estate losses (6,436) (26,100)
- ---------------------------------------------------------------------------------------------------------------
$ 96,808 $ 97,316
===============================================================================================================
</TABLE>
The following is a summary of the activity in the allowance for estimated real
estate losses for the years ended December 31, 1993, 1992 and 1991 (in
thousands):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
1993 1992 1991
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of year $ 26,100 $ 25,189 $ 7,137
Provision for losses 8,205 13,933 19,660
Net charge-offs $(27,869) $(13,022) (1,608)
- --------------------------------------------------------------------------------------------------------------
Balance at end of year $ 6,436 $ 26,100 $ 25,189
==============================================================================================================
</TABLE>
35
<PAGE> 29
Alleghany Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
7. DEPOSITS
Deposits and the weighted average interest rates at December 31, 1993 and 1992
are summarized as follows (in thousands):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
1993 1992
- --------------------------------------------------------------------------------- ----------------------------------
Weighted Weighted
Average Average
Interest Rates Amount Interest Rates Amount
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CHECKING ACCOUNTS
Interest bearing 1.11% $ 223,394 1.78% $ 229,138
Non-interest bearing -- % 27,139 --% 7,347
- -------------------------------------------------------------------------------------------------------------------------
0.99% 250,533 1.72% 236,485
- -------------------------------------------------------------------------------------------------------------------------
SAVINGS ACCOUNTS
Tiered savings
(interest bearing) 2.16% $ 242,190 2.72% $ 214,732
Tiered savings
(non-interest bearing) --% 739 --% --
Insured money market
accounts 2.34% 212,091 2.88% 231,566
CERTIFICATES OF DEPOSIT
0 to 3 months 491,737 496,253
Over 3 to 11 months 884,216 715,822
Over 11 to 23 months 361,472 207,126
Over 23 to 35 months 125,407 298,099
Over 35 to 47 months 127,728 64,323
Over 47 to 59 months 51,427 104,382
Over 59 months 3,033 12,859
- -------------------------------------------------------------------------------------------------------------------------
4.43% 2,500,040 4.80% 2,345,162
- -------------------------------------------------------------------------------------------------------------------------
4.11% $2,750,573 4.52% $2,581,647
=========================================================================================================================
</TABLE>
Accounts in denominations of $100,000 or more totalled approximately
$523 million and $605 million at December 31, 1993 and 1992, respectively. A
summary of interest on deposits is as follows (in thousands):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
1993 1992 1991
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Checking accounts $ 3,402 $ 5,737 $ 8,796
Tiered savings accounts 5,745 6,763 7,940
Insured money market accounts 5,908 7,866 7,542
Certificates of deposit 99,364 111,730 139,399
Less: Early withdrawal penalties (323) (308) (350)
- --------------------------------------------------------------------------------------------------------------
$114,096 $131,788 $163,327
==============================================================================================================
</TABLE>
Accrued interest payable on deposits at December 31, 1993 and 1992 was
$0.9 million and $1.2 million, respectively.
8. REINSURANCE
In the ordinary course of business, Underwriters Reinsurance assumes and cedes
reinsurance for purposes of risk diversification and limiting maximum loss
exposure of catastrophic events. If such assuming reinsurers are unable to
meet the obligations assumed under these agreements, Underwriters Reinsurance
would remain liable. Reinsurance receivables at December 31, 1993 consist of
the following (in thousands):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
1993
- -------------------------------------------------------------------------------------------
<S> <C>
Reinsurance recoverable on paid losses $ 2,074
- -------------------------------------------------------------------------------------------
Ceded outstanding losses and loss adjustment expenses $351,829
===========================================================================================
</TABLE>
For the three months ended December 31, 1993, Underwriters Reinsurance ceded
losses and loss adjustment expenses of $19.6 million. The following table
indicates premiums assumed and ceded for the three months ended December 31,
1993 (in thousands):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Written Earned
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Premiums assumed $36,435 $38,479
Premiums ceded $ 6,166 $19,994
===========================================================================================
</TABLE>
Effective January 1, 1988, Underwriters Reinsurance on behalf of
Underwriters Re purchased for $57.5 million two excess of loss reinsurance
contracts, ("the reinsurance contracts") from Continental Re. Under the
reinsurance contracts, Continental Re will assume the risk of losses incurred
by Underwriters Re to the extent that Underwriters Re's net ultimate incurred
losses, including unrecoverable reinsurance, for pre-1987 business exceed the
aggregate deductible as defined subject to a limit of $200 million. The limit
was fully utilized prior to October, 1993. It is expected that the recovery of
paid losses covered by the reinsurance contracts will begin in 1994.
Loss reserves ceded under the reinsurance contracts must be secured by
a trust fund or other acceptable security. As of December 31, 1993, loss
reserves ceded are secured by $120.6 million deposited in a trust fund and
letters of credit totalling $82.1 million.
36
<PAGE> 30
9. LONG-TERM DEBT
Long-term debt at December 31, 1993 and 1992 is summarized as follows (in
thousands):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
1993 1992
- -------------------------------------------------------------------------------------------
<S> <C> <C>
ALLEGHANY
Debentures at 6.50%, due 2014, exchangeable for
common shares of American Express at an
exchange rate of 22.8833 common shares per
$1,000 principal amount of debentures $ 59,600 $ 59,600
AFC
Notes payable at 4.23% due 1999 80,000 80,000
AFI
Note payable at 12.65%, due through 1997 39,210 46,094
CT&T
Capital lease obligations at 10.90% to 13.90%,
less amounts representing interest of $9 in 1993
and $10 in 1992, due through 1996 72 62
Bank borrowings at 3.88% to 8.73%,
due through 2000 71,000 88,000
Other loans payable at 5.00% to 9.00%,
due through 1996 3,894 6,503
UNDERWRITERS RE
Notes payable at 5.00%, due through 1998 79,000 --
SACRAMENTO SAVINGS
Notes payable at 10.00%, due through 1996 1,635 1,635
WORLD MINERALS
Notes payable at 8.15% to 8.27%, due through 1998 65,000 64,000
Foreign bank borrowings at
10.00% to 23.60%, due through 1995 -- 432
Harborlite redeemable preferred stock 7,527 7,384
- -------------------------------------------------------------------------------------------
$406,938 $353,710
===========================================================================================
</TABLE>
Under the terms of a revolving credit loan agreement dated July 9,
1991 with a bank, Alleghany may borrow up to $200 million until July 1995. At
Alleghany's option, borrowings bear interest at a rate based on the purchase of
negotiable certificates of deposit, prevailing rates for dollar deposits in the
London interbank market or the greatest of the Federal funds rate, the bank's
prime rate or a specified certificate of deposit rate. No amounts were
outstanding under this agreement at December 31, 1993 or 1992. A commitment fee
of 1/4 of 1% per annum of the unused commitment is charged. In July 1995, or at
such earlier date as Alleghany requests, any amounts outstanding will be
converted to a term loan payable in 12 quarterly installments. The revolving
credit agreement, among other things, requires Alleghany to maintain tangible
net worth not less than $500 million, limits the amount of certain other
indebtedness and contains restrictions with respect to mortgaging or pledging
any of Alleghany's assets and consolidation or merger with any other
corporation.
AFC notes are primarily secured by a $91.5 million installment note
receivable. AFC has entered into a related interest rate swap agreement which
provides that AFC shall pay the interest received on the installment note,
which is based on the commercial paper rate, and in return AFC shall receive an
amount which is based on the LIBOR rate. AFC is exposed to market risk in the
unlikely event of nonperformance of the swap counterparty.
The loan agreement between AFI and The Chase Manhattan Bank, among
other things, contains certain restrictive and minimum covenants for the
operation of AFI and Sacramento Savings. The note is secured by all of the
outstanding shares of capital stock of Sacramento Savings, subject to the
rights of the Office of Thrift Supervision ("OTS") pursuant to a voting and
disposition rights/dividend agreement.
On March 28, 1991, CT&T borrowed $42 million, without recourse to
Alleghany, to repay bridge financing used for the Ticor Title Insurance
Company of California acquisition. On May 2, 1991, CT&T entered into an
interest rate swap agreement which effectively fixed the loan's interest rate
at 8.855% until its maturity in 1997. During 1993, the interest rate swap
agreement was renegotiated which effectively fixed the loan's interest rate at
8.73%. CT&T is exposed to market risk in the unlikely event of nonperformance
of the swap counterparty.
Under the terms of the bank loan agreement, CT&T is required to
maintain certain financial ratios and balances and is limited on the amount of
additional indebtedness or future mergers and acquisitions except as permitted
by the agreements. The agreements also contain restrictions with respect to the
mortgaging or pledging of assets.
On December 20, 1991, World Minerals entered into a bank loan
agreement, providing for borrowings of up to $70 million, pursuant to which it
borrowed $50 million, without recourse to Alleghany. The loan proceeds were
used to repay part of an acquisition-related advance from Alleghany. In January
1992, World Minerals entered into two interest rate swap agreements which
effectively fixed the loan's interest rate at 8.15% for the first five years of
the loan's seven-year term. World Minerals is exposed to market risk, in the
unlikely event of nonperformance of the swap counterparty.
At December 31, 1993 and 1992, Sacramento Savings had pledged real
estate loans of approximately $150 million and $168 million, respectively,
together with its investment in FHLB stock of approximately $17.9 million and
$16.8 million, respectively, included
37
<PAGE> 31
Alleghany Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
in other assets, as collateral for FHLB advances and an unused line of credit.
The available line of credit is based on the collateral pledged. At December
31, 1993, Sacramento Savings' unused line of credit totalled approximately $99
million.
Sacramento Savings also has a $40 million line of credit available
under the FHLB's short-term lending program. The line of credit has no fee or
commitment period and can be drawn on by delivering federally backed securities
to the FHLB. Advances are available for terms of up to 180 days at market
rates, with principal and interest due at maturity. No amounts were drawn on
this line of credit as of December 31, 1993.
On November 16, 1992, Underwriters Re entered into a six-year $100
million reducing revolving bank credit agreement (the credit agreement). Under
the terms of the credit agreement, Underwriters Re may borrow up to the maximum
commitment available, which is reduced quarterly. Underwriters Re is required
to make principal payments so the total loan balance is no greater than the
maximum commitment available. In addition to the mandatory payments,
Underwriters Re may permanently reduce the aggregate commitment in whole or in
part at its sole discretion. At December 31, 1993, the maximum commitment
available was $90 million. Amounts borrowed bear interest at either the LIBOR
rate plus 1.75% or the higher of (a) the Corporate Base Rate of the bank or (b)
the Federal funds effective rate plus .5%. The credit agreement also contains
covenants relating to, among other things, restrictions on debt, mergers,
acquisitions, disposition of assets, capital expenditures, paying dividends,
liens and investments. Additionally, the credit agreement requires
Underwriters Re to maintain certain financial ratios and minimum levels of
consolidated tangible net worth, statutory surplus and pretax statutory income.
The credit agreement is secured primarily by a pledge of the capital stock of
Underwriters Reinsurance.
Scheduled aggregate annual maturities of long-term debt for each of
the next five years and thereafter are as follows (in thousands):
<TABLE>
<S> <C>
- ---------------------------------------------------------
1994 $029,658
1995 47,681
1996 49,762
1997 61,000
1998 52,667
Thereafter 166,170
- ---------------------------------------------------------
$406,938
=========================================================
</TABLE>
10. INCOME TAXES
As discussed in Note 1, the Company adopted Statement No. 109 as of January 1,
1992. The cumulative effect of this change in accounting for income taxes, as
determined as of January 1, 1992, approximated $9.1 million, and is separately
reported in the 1992 statement of earnings. As a result of applying Statement
No. 109 in 1992, earnings from continuing operations, before income taxes,
increased $1.5 million for the year ended December 31, 1992, due to the effects
of adjustments for prior purchase business combination. Prior years' financial
statements have not been restated to apply the provisions of Statement No. 109.
Income tax expense (benefit) from continuing operations consists of
the following (in thousands):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Federal State Foreign Total
- --------------------------------------------------------------------------------------------------------------
1993
<S> <C> <C> <C> <C>
Current $ 26,855 $ 4,403 $2,306 $ 33,564
Deferred (12,044) (100) 155 (11,989)
- --------------------------------------------------------------------------------------------------------------
$ 14,811 $ 4,303 $2,461 $ 21,575
==============================================================================================================
1992
Current $ 38,506 $ 6,930 $1,657 $ 47,093
Deferred 9,430 $(1,339) 31 8,122
Charge equivalent to
income taxes -- -- 726 726
- --------------------------------------------------------------------------------------------------------------
$ 47,936 $ 5,591 $2,414 $ 55,941
==============================================================================================================
1991
Current $ 20,077 $ 4,991 $ 546 $ 25,614
Deferred $(10,336) (636) 33 (10,939)
- --------------------------------------------------------------------------------------------------------------
$ 9,741 $ 4,355 $ 579 $ 14,675
==============================================================================================================
</TABLE>
The 1992 charge equivalent to income taxes relates to the utilization
of World Minerals' preacquisition net operating loss carryforwards. Utilization
of the net operating loss carryforwards results in a reduction of World
Minerals' goodwill.
The difference between the federal income tax rate and the effective
income tax rate on continuing operations is as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
1993 1992 1991
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal income tax rate 35.0% 34.0% 34.0%
Goodwill amortization 1.2 3.4 2.5
Income subject to dividends-
received deduction (0.4) (0.9) (3.9)
State taxes, net of federal tax benefit 2.0 3.2 7.7
Tax-exempt interest income (3.0) (1.0) (5.9)
Bad debt deduction -- -- 5.3
Reversal of previously accrued
tax expenses (16.8) -- --
Other, net 0.1 8.1 0.6
- --------------------------------------------------------------------------------------------------------------
18.1% 46.8% 40.3%
==============================================================================================================
</TABLE>
38
<PAGE> 32
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December
31, 1993 and 1992 are as follows (in thousands):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
1993 1992
- -------------------------------------------------------------------------------------------
<S> <C> <C>
DEFERRED TAX ASSETS
Title losses, trust, and other claim reserves $160,183 $144,401
Property and casualty loss reserves 53,231 --
Net operating loss carryforwards 35,124 37,425
Reserves for impaired assets 28,962 24,802
Expenses deducted for tax purposes when paid 31,487 29,051
Other 8,173 9,311
- -------------------------------------------------------------------------------------------
Total gross deferred tax assets 317,160 244,990
===========================================================================================
DEFERRED TAX LIABILITIES
Unearned premium reserves 76,719 74,767
Deferred revenues and gains 87,909 60,052
Title plant 28,355 27,544
Tax over book depreciation 27,351 20,110
Other 18,079 10,219
- -------------------------------------------------------------------------------------------
Total gross deferred tax liabilities 238,413 192,692
===========================================================================================
Net deferred tax asset $ 78,747 $ 52,298
===========================================================================================
</TABLE>
The tax effects of the principal timing differences between taxable
income and pre-tax accounting income from continuing operations for the year
ended December 31, 1991 are as follows (in thousands):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
1991
- -------------------------------------------------------------------------------------------
<S> <C>
Expenses deducted for tax purposes when paid $ (1,221)
Equity securities revalued to reflect impairment (3,529)
Loan fees deferred for tax purposes 1,790
Real estate losses deferred for tax purposes (5,575)
Title insurance losses deferred for tax purposes (3,986)
Unearned premium reserves 735
Tax over book depreciation 685
Deferred compensation expense (1,318)
Pension income 435
LIFO inventory writeup 1,142
Other, net (97)
- -------------------------------------------------------------------------------------------
$(10,939)
===========================================================================================
</TABLE>
A valuation allowance is provided when it is more likely than not that
some portion of the deferred tax assets will not be realized. Management
believes the deferred tax assets will be fully realized in the future.
The amount of operating loss and tax credit carryforwards available to
offset future federal taxable income is approximately $100 million, expiring
through 2005.
A deferred tax liability has not been recognized for Sacramento
Savings' bad debt reserves of approximately $32 million that arose in tax years
beginning before December 31, 1987. This temporary difference is not expected
to reverse in the foreseeable future.
The Internal Revenue Service had examined Alleghany's federal income
tax returns through 1985. The 1986, 1987, and 1988 tax years have closed
without examination.
The Internal Revenue Service asserted substantial federal income tax
deficiencies for the years 1984 and 1985. During 1993, the issues were settled
resulting in a credit to earnings for previously accrued tax expenses of $20
million. Tax years 1984 and 1985 are now closed.
11. STOCKHOLDERS' EQUITY
The total number of shares of all classes of capital stock which Alleghany has
authority to issue is 30,000,000, of which 8,000,000 shares are preferred
stock, par value of $1.00, and 22,000,000 shares are common stock, par value of
$1.00.
Stockholders' equity and surplus of CT&T, CTI, Security Union and
Ticor Title are governed by borrowing agreements and statutory limitations as
to payment of dividends. At December 31, 1993 approximately $155 million was
available for dividends to Alleghany.
Stockholder's equity and surplus of Underwriters Re is also governed
by borrowing agreements and statutory limitations as to payment of dividends.
At December 31, 1993 approximately $1 million was available for dividends to
Alleghany. Underwriters Reinsurance statutory surplus at December 31, 1993 was
$248 million and statutory net income for the three months ended December 31,
1993 was $12 million. Stockholders' equity of World Minerals is governed by a
borrowing agreement as to payment of dividends. At December 31, 1993
substantially all of World Minerals stockholders' equity was restricted as to
dividend payment to Alleghany. Sacramento Savings must comply with certain OTS
regulations which limit the amount of dividends Sacramento Savings may pay.
However, the limit can be exceeded with approval from the OTS. Management
believes that Sacramento Savings is in compliance with such dividend
regulations. At December 31, 1993 all of AFI's and Sacramento Savings'
stockholder's equity was restricted as to dividend payment to Alleghany.
39
<PAGE> 33
Alleghany Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Additionally, payments of dividends (other than stock dividends) by Alleghany
to its stockholders are limited by the terms of the revolving credit loan
agreement which stipulates that Alleghany can pay dividends up to the sum of
cumulative net earnings after 1990, proceeds from the issuance of stock after
1990 and $35 million, provided that Alleghany maintains certain financial
ratios as defined in the agreement. At December 31, 1993 approximately $270
million of capital was available for dividends.
The following schedule presents the prescribed minimum capital
requirements for Sacramento Savings, the actual amount of capital, and the
amount of excess at December 31, 1993 (in thousands):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Minimum Actual
------- ------
Excess
Amount Percent Amount Percent Amount
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Risk-based $ 131,369 8.0% $176,159 10.7% $44,790
Core $ 89,930 3.0% $158,168 5.3% $68,238
Tangible $ 59,953 2.0% $158,168 5.3% $98,215
===========================================================================================
</TABLE>
The actual amount of capital above differs from Sacramento Savings'
capital as calculated in accordance with generally accepted accounting
principles because of adjustments required for goodwill, investments in real
estate, and general loan valuation reserves.
In addition, state chartered savings associations may no longer
acquire any equity investment not permissible for federally chartered savings
associations. Equity investments include Sacramento Savings' real estate
investments and joint ventures. Complete divestiture of these investments is
required by July 1, 1994.
In April 1993, stockholders of Alleghany approved a Long-Term
Incentive Plan effective as of January 1, 1993 ("Incentive Plan"). The
Incentive Plan replaces the 1983 Long-Term Incentive Plan which terminated by
its terms on December 31, 1992. The Incentive Plan is substantially similar to
the 1983 Long-Term Incentive Plan. A maximum of 300,000 shares of Alleghany
common stock can be paid to participants under the Incentive Plan through
December 31, 2002 (subject to anti-dilution and other adjustments).
The incentive plans permit Alleghany to provide incentive compensation
of the types commonly known as restricted stock, stock options, stock
appreciation rights, performance shares, performance units, and phantom stock,
as well as other types of incentive compensation. Awards may include, but are
not limited to, cash and/or shares of Alleghany's common stock, rights to
receive cash and/or shares of common stock and options to purchase shares of
common stock including options intended to qualify as incentive stock options
under the Internal Revenue Code and options not intended to qualify. The number
of performance shares awarded under these plans to employees of the Company
were 14,689 in 1993, 16,412 in 1992, and 20,337 in 1991 (as adjusted for stock
dividends).
Under the incentive plans, participants are entitled, at the end of a
four-year award period, to the fair value of an equal number of shares of
Alleghany's common stock (adjusted for anti-dilution from date of award), based
on market value on the payment date and normally payable half in cash and half
in stock, provided defined levels of performance are achieved. As of December
31, 1993 (for all award periods through the award period 1993), approximately
184,000 performance shares were granted, of which 113,000 have been paid out,
none have expired, and 71,000 have not matured. The amounts charged to the
Company's earnings with respect to this and the prior plan were $3.3 million in
1993, $3.5 million in 1992, and $2.2 million in 1991.
In April 1993, the Board of Directors adopted, subject to approval by
the stockholders at the 1994 Annual Meeting, a stock option plan under which
options to purchase a maximum of 75,000 shares (subject to anti-dilution and
other adjustments) of Alleghany's common stock are awarded to non-employee
directors. The plan replaces a substantially similar plan which terminated in
April 1993. The plans provide for the automatic grant of non-qualified stock
options to purchase 1,000 shares of common stock in each year after 1987 to
each non-employee director. Options to purchase 7,000 shares at the then fair
market value of $147.00 were granted in 1993. Through December 31, 1993, as
adjusted for stock dividends, 46,000 options were granted, 13,000 options have
been exercised, and 33,000 options remain outstanding. Alleghany has reserved
70,244 shares at December 31, 1993 for the satisfaction of exercises of options
(as adjusted for stock dividends).
The Board of Directors has authorized the purchase from time to time
of additional shares of common stock for the treasury. During 1993 and 1992,
Alleghany repurchased 55,200 and 10,500 shares of its common stock at a cost of
$7.9 million and $1.2 million, respectively. During 1991, Alleghany did not
repurchase any shares of its common stock.
40
<PAGE> 34
12. NET EARNINGS PER SHARE OF COMMON STOCK
Net earnings per share of common stock are based on the average number of
shares of Alleghany common stock outstanding during the years ended December
31, 1993, 1992, and 1991, respectively, as adjusted for stock dividends. The
average number of shares of common stock outstanding, as adjusted for stock
dividends, were 6,655,998 in 1993, 6,658,617 in 1992, and 6,651,045 in 1991.
13. RETIREMENT PLANS
The Company has profit sharing and several noncontributory defined benefit
pension plans covering substantially all of its employees. The defined benefits
are based on years of service and the employee's average compensation generally
during the last five years of employment. The Company's funding policy is to
contribute annually the amount necessary to satisfy the Internal Revenue
Service's funding standards. Contributions are intended to provide not only for
benefits attributed to service to date but also for those expected to be earned
in the future. CT&T is a qualified trust company and, as such, serves as
trustee for the assets of certain of the pension plans.
The following table sets forth the defined benefit plans' funded
status at December 31, 1993 and 1992 (in millions):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
1993 1992
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Actuarial present value of benefit obligations
Vested benefit obligation $116.7 $100.6
===========================================================================================
Accumulated benefit obligation $128.1 $107.8
===========================================================================================
Projected benefit obligation $149.0 $125.0
Plan assets at fair value 122.9 115.5
- -------------------------------------------------------------------------------------------
Projected benefit obligation, more
than plan assets (26.1) (9.5)
Unrecognized net loss 49.8 31.5
Unrecognized prior service cost 5.8 6.7
Unrecognized net asset (9.0) (12.0)
- -------------------------------------------------------------------------------------------
Pension asset recognized in the balance sheet $ 20.5 $ 16.7
===========================================================================================
Net pension cost for 1993 and 1992 included the
following expense (income) components
Service cost - benefits earned during the year $ 6.7 $ 6.2
Interest cost on projected benefit obligation 9.9 9.7
Actual return on plan assets (7.2) (6.0)
Net amortization and deferral (1.5) (3.2)
===========================================================================================
Net periodic pension cost included in cost
and expenses $ 7.9 $ 6.7
===========================================================================================
Assumptions used in computing the funded
status of the plans are as follows
Range of rates for increases in
compensation levels 4.5%-10.0% 5.0%-10.0%
Range of weighted average discount rates 6.0%-7.5% 6.5%-8.2%
Range of expected long-term rates of return 4.0%-9.0% 4.0%-10.0%
===========================================================================================
</TABLE>
Alleghany and its subsidiaries also provide supplemental retirement
benefits through deferred compensation programs and profit sharing plans for
certain of its officers and employees for which earnings were charged $17.6
million and 1993, $13.3 million in 1992, and $5.8 million in 1991.
14. COMMITMENTS AND CONTINGENCIES
The Company leases certain facilities, furniture and equipment under long-term
lease agreements. In addition, certain land, office space and equipment are
leased under noncancelable operating leases which expire at various dates
through 2049. Rent expense was $66.6 million in 1993, $61.0 million in 1992,
and $67.3 million in 1991.
The aggregate minimum payments under operating leases with initial or
remaining terms of more than one year are $46 million, $39 million, $31
million, $25 million, $21 million, and $146 million in 1994, 1995, 1996, 1997,
1998 and thereafter, respectively.
The Company's subsidiaries and division are parties to pending
litigation and claims in connection with the ordinary course of their
businesses. Each such operating unit makes provisions for estimated losses to
be incurred in such litigation and claims, including legal costs. In the
opinion of management, based in part on advice of counsel, such provision is
adequate.
15. FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK
Sacramento Savings is a party to financial instruments with off-balance sheet
risk in the normal course of business. These financial instruments include
commitments to extend credit, standby letters of credit and commitments to sell
loans. These instruments involve, to varying degrees, elements of credit risk.
Sacramento Savings' exposure to credit loss is the contractual amount funded.
The contractual amount of financial instruments at December 31, 1993
and 1992 is summarized as follows (in thousands):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
1993 1992
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Commitments to extend credit $40,547 $28,126
Standby letters of credit $ 5,295 $ 4,736
Commitments to sell loans $17,695 $19,124
===========================================================================================
</TABLE>
Sacramento Savings uses the same credit policies in making commitments
to extend credit as it does for on-balance sheet instruments. Commitments to
extend credit are agreements to lend to a customer as long as there is no
violation of any condition established in the
41
<PAGE> 35
Alleghany Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
contract. Commitments generally have fixed expiration dates or termination
clauses. Since some of the commitments are expected to expire without being
drawn upon, the total commitment amounts do not necessarily represent future
cash requirements. Sacramento Savings evaluates each customer's credit
worthiness on a case-by-case basis. The amount of collateral, if any, obtained
by Sacramento Savings is based on management's evaluation of the customer.
Standby letters of credit are conditional commitments issued by
Sacramento Savings to guarantee the performance of a customer to a third party.
The credit risk involved in issuing letters of credit is essentially the same
as that involved in extending loans to a customer. Sacramento Savings uses the
same underwriting policies as if a loan were made. The amount of collateral, if
any, obtained by Sacramento Savings is based on management's evaluation of the
customer.
Commitments to sell loans are agreements to sell loans originated or
purchased by Sacramento Savings to another party if certain conditions are met.
Sacramento Savings only sells loans to third parties without recourse.
Sacramento Savings is not exposed to credit loss if the borrower fails to
perform according to the promissory note as long as Sacramento Savings has
fulfilled its obligations as stated in the sale commitment. Sacramento Savings
may or may not retain servicing of the loans.
16. FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company's financial instruments are as follows
(in thousands):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Calculated
Carrying Fair
Amount Value
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Notes receivable $ 91,536 $ 91,536
Loans receivable, less allowances $2,072,596 $2,097,384
Liabilities
Deposits $2,750,573 $2,784,769
Long-term debt $ 406,938 $ 411,549
Unrecognized financial instruments
Commitments to extend credit $ 40,547 $ 40,547
Standby letters of credit $ 5,295 $ 5,295
Commitments to sell loans $ 17,695 $ 17,695
- -------------------------------------------------------------------------------------------
</TABLE>
The following methods and assumptions were used to estimate the fair
value of each class of financial instruments for which it is practicable to
estimate fair value:
NOTES RECEIVABLE: The carrying amount approximates fair value because
interest rates approximate market rates.
LOANS RECEIVABLE, less allowances: For variable-rate loans that
reprice frequently and with no significant change in credit risk, fair values
are substantially equal to carrying values. The fair values for loans are
estimated using discounted cash flow analyses, using interest rates currently
being offered for loans with similar terms to borrowers of similar credit
quality. The carrying amount of accrued interest approximates its fair value.
DEPOSITS: The fair values disclosed for demand deposits (e.g.,
interest and non-interest checking, passbook savings, and certain types of
money market accounts) are, by definition, equal to the amount payable on
demand at the reporting date (i.e., their carrying amounts). The carrying
amounts for variable-rate, fixed-term money market accounts and certificates of
deposits approximate their fair values at the reporting date. Fair values for
fixed-rate certificates of deposit are estimated using a discounted cash flow
calculation that applies interest rates currently being offered on certificates
to a schedule of aggregated expected monthly maturities on time deposits.
LONG-TERM DEBT: The fair value of the Company's long-term debt is
estimated based on the quoted market prices for the same or similar issues or
on current rates offered to the Company for debt of the same remaining
maturities.
COMMITMENTS TO EXTEND CREDIT, STANDBY LETTERS OF CREDIT AND
COMMITMENTS TO SELL LOANS: The fair value of commitments is estimated using the
fees currently charged to enter into similar agreements, taking into account
the remaining terms of the agreements and the present creditworthiness of the
counterparties. For fixed-rate loan commitments, fair value also considers the
difference between current levels of interest rates and the committed rates.
The fair value of guarantees and letters of credit is based on fees currently
charged for similar agreements or on the estimated cost to terminate them or
otherwise settle the obligation with the counterparties at the reporting date.
42
<PAGE> 36
17. SEGMENTS OF BUSINESS
Information concerning the Company's continuing operations by industry segment
as of and for the years ended December 31, 1993, 1992, and 1991, respectively,
is summarized as follows (in thousands):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Title, trust and escrow $1,440,151 $1,345,724 $1,036,860
Property and casualty reinsurance* 40,712 -- --
Banking 209,766 239,135 261,615
Mining and filtration 149,545 141,072 52,997
Corporate activities 68,278 62,493 55,140
- ---------------------------------------------------------------------------------------------------------------
Total $1,908,452 $1,788,424 $1,406,612
===============================================================================================================
EARNINGS FROM CONTINUING OPERATIONS,
BEFORE INCOME TAXES
Title, trust and escrow $ 98,171 $ 96,489 $ 39,779
Property and casualty reinsurance* 4,058 -- --
Banking 29,440 36,079 28,624
Mining and filtration 13,745 16,504 6,128
Corporate activities 19,873 18,119 11,437
- ---------------------------------------------------------------------------------------------------------------
165,287 167,191 85,968
Interest expense 29,263 32,602 35,519
Corporate administration 16,897 14,956 14,049
- ---------------------------------------------------------------------------------------------------------------
Total $ 119,127 $ 119,633 $ 36,400
===============================================================================================================
IDENTIFIABLE ASSETS AT DECEMBER 31
Title, trust and escrow $1,515,746 $1,611,136 $1,403,051
Property and casualty reinsurance 1,339,824 -- --
Banking 3,024,157 2,827,700 2,699,487
Mining and filtration 208,377 194,840 185,939
Corporate activities 196,836 222,768 250,744
- ---------------------------------------------------------------------------------------------------------------
Total $6,284,940 $4,856,444 $4,539,221
===============================================================================================================
CAPITAL EXPENDITURES
Title, trust and escrow $ 12,350 $ 24,026 $ 13,888
Property and casualty reinsurance* 199 -- --
Banking 3,538 4,372 4,187
Mining and filtration 25,457 5,967 8,910
Corporate activities 243 283 88
- ---------------------------------------------------------------------------------------------------------------
Total $ 41,787 $ 34,648 $ 27,073
===============================================================================================================
DEPRECIATION AND AMORTIZATION
Title, trust and escrow $ 29,161 $ 42,084 $ 24,999
Property and casualty reinsurance* 2,201 -- --
Banking 6,372 4,732 3,264
Mining and filtration 6,823 8,202 2,949
Corporate activities 731 1,491 776
- ---------------------------------------------------------------------------------------------------------------
Total $ 45,288 $ 56,509 $ 31,988
===============================================================================================================
</TABLE>
*Includes results of operations from October 1, 1993.
18. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
Selected quarterly financial data for 1993 and 1992 are presented below (in
thousands, except per share amounts):
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Quarter Ended
-------------
1993 Mar. 31 Jun. 30 Sep. 30 Dec. 31
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues from continuing
operations $419,332 $451,407 $480,713 $557,000
===============================================================================================================
Net earnings $ 33,343 $ 21,327 $ 20,364 $ 22,518
===============================================================================================================
Net earnings per share of
common stock $ 5.00 $ 3.20 $ 3.06 $ 3.40
===============================================================================================================
1992
- ---------------------------------------------------------------------------------------------------------------
Revenues from continuing
operations $399,887 $478,784 $437,312 $472,441
===============================================================================================================
Earnings from continuing
operations $ 12,208 $ 21,845 $ 18,541 $ 11,098
Cumulative effect of
accounting change 9,145 -- -- --
- ---------------------------------------------------------------------------------------------------------------
Net earnings $ 21,353 $ 21,845 $ 18,541 $ 11,098
===============================================================================================================
Net earnings per share of
common stock:*
Continuing operations $ 1.84 $ 3.28 $ 2.78 $ 1.67
Cumulative effect of
accounting change 1.37 -- -- --
- ---------------------------------------------------------------------------------------------------------------
Net earnings $ 3.21 $ 3.28 $ 2.78 $ 1.67
===============================================================================================================
</TABLE>
* Restated to reflect subsequent stock dividends.
43
<PAGE> 37
Alleghany Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
19. OTHER INFORMATION
a. Other assets shown in the consolidated balance sheets at December 31, 1993
and 1992 include goodwill, net of accumulated amortization, as follows (in
thousands):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Amortization
1993 1992 Period
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CT&T $ 56,166 $57,675 10-40 years
Underwriters Re 54,046 -- 20 years
Sacramento Savings 17,367 17,055 14-25 years
World Minerals 15,389 7,725 40 years
- -------------------------------------------------------------------------------------------
$142,968 $82,455
===========================================================================================
</TABLE>
As a result of applying Statement No. 109, goodwill has been reduced by
approximately $39.2 million in 1992.
b. Other liabilities shown in the consolidated balance sheets at December 31,
1993 and 1992 include $84.7 million and $69.1 million, respectively, of
accounts payable. For December 31, 1993, other liabilities also includes $49
million of unearned premiums.
c. The consolidated statements of earnings include charges to operations for
repairs and maintenance in the amount of $26.1 million in 1993, $24.4 million
in 1992, and $15.3 million in 1991, and for taxes other than payroll and income
of $25.1 million in 1993, $27.6 million in 1992, and $20.1 million in 1991.
d. Property and equipment, net of accumulated depreciation and amortization at
December 31, 1993 and 1992, is as follows (in thousands):
<TABLE>
<CAPTION>
- ---------------------------------------------------------
1993 1992
- ---------------------------------------------------------
<S> <C> <C>
Land $ 40,508 $ 41,693
Buildings and improvements 87,452 79,786
Furniture and equipment 171,695 156,224
Leasehold improvements 27,545 25,495
- ---------------------------------------------------------
327,200 303,198
Less: Accumulated depreciation
and amortization (69,447) (63,007)
- ---------------------------------------------------------
$257,753 $240,191
=========================================================
</TABLE>
e. Other assets shown in the consolidated balance sheet at December 31, 1993
includes $10.4 million of deferred acquisition costs. Amortization of deferred
acquisition costs included in the 1993 statement of earnings was $1.2 million.
44
<PAGE> 38
INDEPENDENT AUDITOR'S REPORT
[KPMG PEAT MARWICK LOGO]
Certified Public Accountants
345 Park Avenue
New York, NY 10154
The Board of Directors and Stockholders
Alleghany Corporation:
We have audited the accompanying consolidated balance sheets of Alleghany
Corporation and subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of earnings, changes in common stockholders' equity,
and cash flows for each of the years in the three-year period ended December
31, 1993. These consolidated financial statements, appearing on pages 24
through 44, are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Alleghany Corporation and subsidiaries at December 31, 1993 and 1992, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1993, in conformity with generally
accepted accounting principles.
As discussed in Note 1 to the consolidated financial statements, the
Company adopted the provisions of Financial Accounting Standards Board's
Statements of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" and No. 109, "Accounting for Income
Taxes" at December 31, 1993 and in 1992, respectively.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
February 23, 1994
45
<PAGE> 39
<TABLE>
<CAPTION>
APPENDIX
--------
Page Narrative Description of Graphic or Image Material
- ---- --------------------------------------------------
<S> <C>
2 A table of common stockholders' equity at year-end appears in the electronic format
version, replacing a bar chart that appears in the paper format version.
3 A table of market value of stock and cash at year-end appears in the electronic format
version, replacing a bar chart that appears in the paper format version.
7 A photograph of the rotunda of the Chicago Title and Trust Center appears in the paper
format version.
9 A rendering of an office building in Cameron Park, California, scheduled to be opened
jointly by Sacramento Savings Bank and Chicago Title and Trust Company in 1994, appears
in the paper format version.
10 A table of Sacramento Savings Bank's capital position at December 31, 1993 appears in the
electronic format version, replacing a bar chart that appears in the paper format version.
12 A photograph of a truck appears in the paper format version.
14 A photograph of a building appears in the paper format version.
15 A photograph of mining equipment and a part of World Minerals Inc.'s diatomite mine in
Lompoc, California appears in the paper format version.
</TABLE>
<PAGE> 1
Exhibit 21
SUBSIDIARIES OF ALLEGHANY
Chicago Title and Trust Company (Illinois)
Chicago Title Insurance Company (Missouri)
Alexander Title Agency, Inc. (Virginia)
CATCO, Inc. (Oklahoma - 50%)
Chicago Title Company (California)
Tri-Safe, Inc. (California - 25%)
Chicago Title Company of Alameda County
(California - 80%)
Chicago Title Insurance Company of Puerto Rico
(Puerto Rico - 99.2%)
Chicago Trust Company (Arizona)
Creative Land Services, Inc. (Minnesota)
Johnson County Title Company (Kansas)
Liberty Title Company (Minnesota)
Liberty Escrow Services Company (Minnesota)
McHenry County Title Company (Illinois)
Meade Title Agency, Inc. (Ohio)
Service Title of Virginia, Inc. (Virginia - 30%)
White River Abstract & Title Co., Inc. (Indiana)
Joint Title Plants and Associations
CTP, Inc. (Florida - 16%)
Dallas Seven Index, Inc. (Texas - 14%)
SKLD, Inc. (Colorado - 12.91%)
Take-Off, Inc. (Colorado - 14%)
Title Data, Inc. (Texas - 6.25%)
Spring Services Corporation (California)
Spring Services Texas, Inc. (Texas)
TPO, Inc. (Oklahoma)
Heritage American Insurance Services, Inc. (California)
Chicago Deferred Exchange Corporation (Illinois)
Chicago Title and Trust Company Foundation (Illinois)1
Title Accounting Services Corporation (Illinois)
Iowa Land Services Corporation (Iowa)
Lake County Investment Corporation (Indiana)
The Lake County Trust Company (Indiana)
Chicago Technology Services Corp. (Illinois)
Ticor Financial Company (California)
Chicago Title Agency of Central Ohio (Ohio)
Title and Trust Company (Idaho)
- ----------------------
* A charitable foundation in which CT&T possesses no
ownership interest.
<PAGE> 2
The Title Guarantee Company (Maryland)
Maryland Escrow, Inc. (Maryland)
Security Union Title Insurance Company (California)
Charter Title Company (California)
Land Escrow and Safe Deposit Company (California)
Land Title of Pierce County (Washington)
Los Angeles Escrow Company (California)
Merchants Title Company (California)
Northwest Equities, Inc. (Texas)
Guardian Title Company of Houston (Texas)
RJW Development Company (New Jersey)
Chicago Title Insurance Company of Oregon (Oregon)
Real Estate Exchange, Inc. (Oregon)
Security Trust Company (California)
Southern California Escrow Company (California)
Title-Tax, Inc. (California)
Ticor Title Insurance Company (California)
Altico, Inc. (Alaska)
Ticor Home Warranty Company (California)
Ticor Title Guarantee Company (New York)
Alleghany Financial Inc. (Delaware)
Sacramento Properties Holdings, Inc. (California)
Sacramento Savings Bank (California)
SSB Financial Services (California)
Central Valley Security Company (California)
Superior California Insurance Agency (California)
Alleghany Funding Corporation (Delaware)
Mineral Holdings Inc. (Delaware - 93.8%)
World Minerals Inc. (Delaware)
Celite Corporation (Delaware)
Celite Europe Corporation (Delaware)
Celite France S.A. (France)
Celite Italiana S.r.L. (Italy)
Celite Hispanica, S.A. (Spain)
Celite (U.K.) Limited (United Kingdom)
Celite Mexico, Inc. (New York)
Celite Canada, Inc. (Canada)
Celite Island, h.f. (Iceland)
Kisilidjan, h.f. (Iceland - 48.56%)
Celite Mexico S.A. de C.V. (Mexico)
Almeria Comercial, S.A. de C.V. (Mexico)
Diatomita San Nicolas, S.A. de C.V. (Mexico)
Celite Pacific Limited (Hong Kong)
Harborlite Corporation (Delaware)
Perlite, Inc. (Delaware)
Harborlite (U.K.) Limited (United Kingdom)
Harborlite France (France)
-2-
<PAGE> 3
Bibb Steel and Supply Company (Delaware)
MSL Property Holdings, Inc. (Delaware)
MSL Capital Recovery Corp. (Delaware)
J & E Corporation (Tennessee)
Allied Structural Steel Corporation (Tennessee)
URC Holdings Corp. (Delaware - 94.6%)
Underwriters Reinsurance Company (New Hampshire)
Commercial Underwriters Insurance Company (California)
URC Risk Managers, Inc. (Delaware)
-3-
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
ALLEGHANY CORPORATION:
We consent to incorporation by reference in the Prospectus constituting part of
the Registration Statement (No. 33-27598) on Form S-8 of our reports dated
February 23, 1994 relating to the financial statements and related schedules of
Alleghany Corporation and subsidiaries, which appear in, or are incorporated by
reference in, this Annual Report on Form 10-K of Alleghany Corporation for the
fiscal year ended December 31, 1993. Our report refers to the adoption of the
provisions of Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities" and No. 109, "Accounting for Income Taxes" at December 31,
1993 and in 1992, respectively. We also consent to the reference to our Firm
under the heading "Financial Statements" in such Prospectus.
/s/ KPMG Peat Marwick
KPMG PEAT MARWICK
New York, New York
March 28, 1994
<PAGE> 1
EXHIBIT 28
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
..................................
(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.
<TABLE>
<CAPTION>
SCHEDULE P - PART 1 - SUMMARY
(000 omitted)
Premiums Earned Loss and Loss Expense Payments
1 ----------------------------------- -------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were --------------------- ----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... X X X X X X X X X X X X 15,497 1,301 2,092 376
2. 1984..... 106,137 18,639 87,498 217,174 64,194 18,029 3,398
3. 1985..... 192,240 26,911 165,329 138,803 40,219 12,291 2,936
4. 1986..... 202,331 24,017 178,314 100,176 4,395 2,574 311
5. 1987..... 189,764 16,036 173,728 80,912 1,613 3,518 25
6. 1988..... 165,911 15,552 150,359 61,472 10,290 2,287 148
7. 1989..... 170,922 20,368 150,554 82,943 12,546 3,502 251
8. 1990..... 141,916 21,422 120,494 60,411 23,502 4,186 402
9. 1991..... 147,900 22,185 125,715 35,702 14,546 2,924 229
10. 1992..... 170,799 28,851 141,948 40,903 18,255 619 107
11. 1993..... 211,121 36,625 174,496 9,752 2,106 88 4
- ------------------------------------------------------------------------------------------------------------
12. Totals .. X X X X X X X X X X X X 843,745 192,967 52,110 8,187
</TABLE>
SCHEDULE P - PART 1 - SUMMARY
(000 omitted)
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
--------------------------------------
1 12
Years 9 10 11
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 74 15,986 X X X X
2. 1984..... 0 1,368 168,979 X X X X
3. 1985..... 0 1,121 109,060 X X X X
4. 1986..... 0 585 98,629 X X X X
5. 1987..... 0 872 83,664 X X X X
6. 1988..... 0 767 54,088 X X X X
7. 1989..... 0 777 74,425 X X X X
8. 1990..... 0 717 41,410 X X X X
9. 1991..... 0 727 24,578 X X X X
10. 1992..... 0 790 23,950 X X X X
11. 1993..... 0 539 8,269 X X X X
- ----------------------------------------------------------------------
12. Totals .. 0 8,337 703,038 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ----------------------------------------------- ----------------------------------------------------
in Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were ----------------------- ----------------------- ------------------------ ------------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... 102,727 101,173 25,290 23,790 9,166 7,667 0 0
2. 1984..... 43,002 41,988 18,687 16,687 6,319 6,300 0 0
3. 1985..... 29,532 27,836 25,609 21,609 3,563 3,563 0 0
4. 1986..... 13,583 12,015 35,218 18,905 570 44 0 0
5. 1987..... 9,534 0 24,163 114 313 9 0 0
6. 1988..... 10,743 473 28,975 816 854 133 0 0
7. 1989..... 10,075 1,927 28,631 3,568 698 128 0 0
8. 1990..... 15,071 2,005 38,329 4,647 830 141 0 0
9. 1991..... 19,813 2,353 55,735 5,469 441 66 0 0
10. 1992..... 24,852 6,914 91,641 19,078 869 327 0 0
11. 1993..... 15,753 2,411 127,124 17,146 119 26 0 0
- ----------------------------------------------------------------------------------------------------------------------------
12. Totals .. 294,685 199,095 499,402 113,829 23,742 18,404 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding
Losses Were Subrogation Expenses and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 1,640 6,193 X X X X
2. 1984..... 0 684 3,717 X X X X
3. 1985..... 0 476 6,172 X X X X
4. 1986..... 0 217 18,624 X X X X
5. 1987..... 0 152 34,039 X X X X
6. 1988..... 0 171 39,321 X X X X
7. 1989..... 0 161 33,942 X X X X
8. 1990..... 0 240 47,677 X X X X
9. 1991..... 0 336 68,437 X X X X
10. 1992..... 0 377 91,420 X X X X
11. 1993..... 0 251 123,664 X X X X
- -------------------------------------------------------------------
12. Totals .. 0 4,705 473,206 X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ---------------------------------- --------------------------------------- ----------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- ---------------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1984..... 305,263 132,567 172,696 287.6 711.2 197.4 0 0
3. 1985..... 211,395 96,163 115,232 110.0 357.3 69.7 0 0
4. 1986..... 152,923 35,670 117,253 75.6 148.5 65.8 0 0
5. 1987..... 119,464 1,761 117,703 63.0 11.0 67.8 0 0
6. 1988..... 105,269 11,860 93,409 63.4 76.3 62.1 0 0
7. 1989..... 126,787 18,420 108,367 74.2 90.4 72.0 0 0
8. 1990..... 119,784 30,697 89,087 84.4 143.3 73.9 0 0
9. 1991..... 115,678 22,663 93,015 78.2 102.2 74.0 0 0
10. 1992..... 160,051 44,681 115,370 93.7 154.9 81.3 0 0
11. 1993..... 153,626 21,693 131,933 72.8 59.2 75.6 0 0
- ---------------------------------------------------------------------------------------------------------------------------
12. Totals... X X X X X X X X X X X X X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Net Balance Sheet Reserves
in Which 33 After Discount
Premiums Were Inter-Company --------------------------
Earned and Pooling 34 35
Losses Were Participation Losses Loss Expenses
Incurred Percentage Unpaid Unpaid
- ---------------------------------------------------------
<S> <C> <C> <C>
1. Prior ... X X X X 3,054 3,139
2. 1984..... 0.0 3,014 703
3. 1985..... 0.0 5,696 476
4. 1986..... 0.0 17,881 743
5. 1987..... 0.0 33,583 456
6. 1988..... 0.0 38,429 892
7. 1989..... 0.0 33,211 731
8. 1990..... 0.0 46,748 929
9. 1991..... 0.0 67,726 711
10. 1992..... 0.0 90,501 919
11. 1993..... 0.0 123,320 344
- ---------------------------------------------------------
12. Totals .. X X X X 463,163 10,043
</TABLE>
*Net = (25 - 26) = (11 + 23)
62
<PAGE> 2
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(NAME)
SCHEDULE P - PART 2 - SUMMARY
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported At Year End (000 omitted)
Years in Which --------------------------------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ........ 128,144* 162,346 195,820 240,206 246,404 239,224 238,244 237,176
2. 1984.......... 60,552 82,999 126,437 161,385 161,351 161,239 161,861 161,913
3. 1985.......... X X X X 113,049 97,094 102,501 101,219 101,108 101,696 101,916
4. 1986.......... X X X X X X X X 102,052 94,690 99,264 99,278 99,426 99,172
5. 1987.......... X X X X X X X X X X X X 117,115 117,792 117,721 117,545 118,058
6. 1988.......... X X X X X X X X X X X X X X X X 98,342 98,213 99,140 101,606
7. 1989.......... X X X X X X X X X X X X X X X X X X X X 124,356 125,078 122,988
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 97,781 97,985
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 98,183
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
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
- ---------------------------------------------------------------------------------------------------------------------------
12. Totals ................................................................................................................
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and Allocated
Expenses Reported At Year End
1 (000 omitted) Development**
Years in Which ---------------------------------------------------
Losses Were 10 11 12 13
Incurred 1992 1993 One Year Two Year
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ........ 244,464 245,964 1,500 8,788
2. 1984.......... 168,738 170,644 1,906 8,731
3. 1985.......... 110,329 113,635 3,306 11,719
4. 1986.......... 111,676 116,451 4,775 17,279
5. 1987.......... 116,835 116,679 (156) (1,379)
6. 1988.......... 93,347 92,471 (876) (9,135)
7. 1989.......... 107,796 107,429 (367) (15,559)
8. 1990.......... 90,274 88,130 (2,144) (9,855)
9. 1991.......... 92,269 91,952 (317) (6,231)
10. 1992.......... 111,259 114,203 2,944 X X X X
11. 1993.......... X X X X 131,143 X X X X X X X X
- -----------------------------------------------------------------------
12. Totals .............................. 10,571 4,358
</TABLE>
*Reported reserves only. Subsequent development relates only to subsequent
payments and reserves.
**Current year less first or second prior year, showing (redundant) or adverse.
SCHEDULE P - PART 3 - SUMMARY
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses At Year End (000 omitted)
Years in Which -----------------------------------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ........ 000 44,212 84,198 116,645 155,976 185,238 205,534 218,697
2. 1984.......... 8,886 27,020 54,231 83,145 111,562 140,250 160,442 160,962
3. 1985.......... X X X X 7,540 20,107 38,727 67,640 92,316 99,136 100,799
4. 1986.......... X X X X X X X X 2,133 5,971 16,908 18,130 68,094 85,232
5. 1987.......... X X X X X X X X X X X X 1,257 9,326 27,059 41,079 58,499
6. 1988.......... X X X X X X X X X X X X X X X X 1,512 18,664 29,662 43,580
7. 1989.......... X X X X X X X X X X X X X X X X X X X X 6,377 20,650 46,464
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 6,565 17,099
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 3,982
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
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
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Cumulative paid Losses 12 13
and Allocated Expenses Number of Number of
1 At Year End (000) omitted Claims Claims
Years in Which ------------------------- Closed With Closed
Losses Were 10 11 Loss Without Loss
Incurred 1992 1993 Payment Payment
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ........ 225,499 241,411 X X X X X X X X
2. 1984.......... 161,067 167,611 X X X X X X X X
3. 1985.......... 98,857 107,939 X X X X X X X X
4. 1986.......... 92,466 98,044 X X X X X X X X
5. 1987.......... 78,236 82,792 X X X X X X X X
6. 1988.......... 49,617 53,321 X X X X X X X X
7. 1989.......... 62,128 73,648 X X X X X X X X
8. 1990.......... 32,162 40,693 X X X X X X X X
9. 1991.......... 15,381 23,851 X X X X X X X X
10. 1992.......... 12,366 23,160 X X X X X X X X
11. 1993.......... X X X X 7,730 X X X X X X X X
</TABLE>
Note: Net of salvage and subrogation received.
<TABLE>
<CAPTION>
SCHEDULE P - PART 4 - SUMMARY
- ------------------------------------------------------------------------------------------------------------------------
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
Were Incurred 1984 1985 1986 1987 1988 1989 1990
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ........ 90,064 28,747 11,354 8,418 728 4,306 0
2. 1984.......... 78,196 34,112 14,397 12,760 182 170 0
3. 1985.......... X X X X 118,006 55,030 22,034 1,055 1,058 0
4. 1986.......... X X X X X X X X 144,748 92,604 57,171 61,017 9,666
5. 1987.......... X X X X X X X X X X X X 193,233 145,304 70,270 60,995
6. 1988.......... X X X X X X X X X X X X X X X X 88,300 55,480 42,762
7. 1989.......... X X X X X X X X X X X X X X X X X X X X 100,540 87,218
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 74,974
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Bulk and Incurred But Not Reported Reserves
on Losses and Allocated Expenses at Year End
1 (000 omitted)
Years in Which -------------------------------------
Losses Were 9 10 11
Incurred 1991 1992 1993
---------------------------------------------------------------
<S> <C> <C> <C>
1. Prior ........ 0 9,476 1,500
2. 1984.......... 0 6,732 2,000
3. 1985.......... 0 10,216 4,000
4. 1986.......... 0 13,079 16,313
5. 1987.......... 46,429 11,627 24,049
6. 1988.......... 38,570 27,176 28,159
7. 1989.......... 61,085 28,397 25,063
8. 1990.......... 64,159 43,574 33,682
9. 1991.......... 85,172 58,656 50,266
10. 1992.......... X X X X 83,688 72,563
11. 1993.......... X X X X X X X X 109,978
</TABLE>
63
<PAGE> 3
FORM 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(NAME)
SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
-------------------------- ---------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were --------------------------- --------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2-3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X 0 0 0 0
2. 1984 . . . . 0 0 0 0 0 0 0
3. 1985 . . . . 0 0 0 0 0 0 0
4. 1986 . . . . 0 0 0 0 0 0 0
5. 1987 . . . . 0 0 0 0 0 0 0
6. 1988 . . . . 0 0 0 0 0 0 0
7. 1989 . . . . 0 0 0 0 0 0 0
8. 1990 . . . . 0 0 0 0 0 0 0
9. 1991 . . . . 0 0 0 0 0 0 0
10. 1992 . . . . 0 0 0 0 0 0 0
11. 1993 . . . . 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
</TABLE>
<TABLE>
<CAPTION>
1 Loss and Loss Expense Payments
--------------------------------------------
Years 9 10 11 12
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . 0 0 0 X X X X
2. 1984 . . . . 0 0 0 0
3. 1985 . . . . 0 0 0 0
4. 1986 . . . . 0 0 0 0
5. 1987 . . . . 0 0 0 0
6. 1988 . . . . 0 0 0 0
7. 1989 . . . . 0 0 0 0
8. 1990 . . . . 0 0 0 0
9. 1991 . . . . 0 0 0 0
10. 1992 . . . . 0 0 0 0
11. 1993 . . . . 0 0 0 0
- ------------------------------------------------------------------------------------
12. Totals . . . 0 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ----------------------------------------- ----------------------------------------
in Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ------------------- -------------------- ------------------ -------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0 0 0 0 0 0 0 0
2. 1984 . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . 0 0 0 0 0 0 0 0
4. 1986 . . . . 0 0 0 0 0 0 0 0
5. 1987 . . . . 0 0 0 0 0 0 0 0
6. 1988 . . . . 0 0 0 0 0 0 0 0
7. 1989 . . . . 0 0 0 0 0 0 0 0
8. 1990 . . . . 0 0 0 0 0 0 0 0
9. 1991 . . . . 0 0 0 0 0 0 0 0
10. 1992 . . . . 0 0 0 0 0 0 0 0
11. 1993 . . . . 0 0 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------
12. Totals . . . 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earmed and and Loss Net Losses Outstanding-
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . 0 0 0 0
2. 1984 . . . . 0 0 0 0
3. 1985 . . . . 0 0 0 0
4. 1986 . . . . 0 0 0 0
5. 1987 . . . . 0 0 0 0
6. 1988 . . . . 0 0 0 0
7. 1989 . . . . 0 0 0 0
8. 1990 . . . . 0 0 0 0
9. 1991 . . . . 0 0 0 0
10. 1992 . . . . 0 0 0 0
11. 1993 . . . . 0 0 0 0
- -------------------------------------------------------------------------------------------
12. Totals . . . 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1 Total Losses and Loss and Loss Expense Percentage
Year Loss Expenses Incurred (Incurred/Premiums Earned)
in Which ------------------------------ ---------------------------------
Premiums Were 25 26 27 28 29 30
Earned and
Losses Were Direct Direct
Incurred and Assumed Ceded Net* and Assumed Ceded Net
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . . X X X X X X X X X X X X X X X X X X X X X X X X
2. 1984 . . . . 0 0 0 0.0 0.0 0.0
3. 1985 . . . . 0 0 0 0.0 0.0 0.0
4. 1986 . . . . 0 0 0 0.0 0.0 0.0
5. 1987 . . . . 0 0 0 0.0 0.0 0.0
6. 1988 . . . . 0 0 0 0.0 0.0 0.0
7. 1989 . . . . 0 0 0 0.0 0.0 0.0
8. 1990 . . . . 0 0 0 0.0 0.0 0.0
9. 1991 . . . . 0 0 0 0.0 0.0 0.0
10. 1992 . . . . 0 0 0 0.0 0.0 0.0
11. 1993 . . . . 0 0 0 0.0 0.0 0.0
- ------------------------------------------------------------------------------------------
12. Totals . . . X X X X X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
1 Discount for Time Net Balance Sheet Reserves
Years Value of Money 33 After Discount
in Which ----------------------- --------------------------
Premiums Were 31 32 Inter-Company 34 35
Earned and Pooling Loss
Losses Were Loss Participation Losses Expenses
Incurred Loss Expense Percentage Unpaid Unpaid
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . 0 0 X X X X 0 0
2. 1984 . . . . 0 0 0.0 0 0
3. 1985 . . . . 0 0 0.0 0 0
4. 1986 . . . . 0 0 0.0 0 0
5. 1987 . . . . 0 0 0.0 0 0
6. 1988 . . . . 0 0 0.0 0 0
7. 1989 . . . . 0 0 0.0 0 0
8. 1990 . . . . 0 0 0.0 0 0
9. 1991 . . . . 0 0 0.0 0 0
10. 1992 . . . . 0 0 0.0 0 0
11. 1993 . . . . 0 0 0.0 0 0
- --------------------------------------------------------------------------------------------------
12. Totals . . . 0 0 X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
64
<PAGE> 4
FORM 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 1B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
(000 omitted)
<TABLE>
<CAPTION>
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
Premuims Were ---------------- ------------------ Salvage Unallocated Total Claims
Earned and Direct Net 5 6 7 8 and Loss Net Paid Reported-
Losses Were and Ceded (2 - 3) Direct Direct Subrogation Expense (5-6+7 Direct and
Incurred Assumed and Assumed Ceded and Assumed Ceded Received Payments -8 +10) Assumed
- -------------------------------------------------------------------------------------------------------------------------------
<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.... 3,049 71 2,978 2,090 3 6 1 0 23 2,115 0
5. 1987.... 1,854 168 1,686 1,989 0 11 0 0 26 2,029 0
6. 1988.... 2,823 88 2,735 1,735 2 5 0 0 28 1,766 0
7. 1989.... 2,781 108 2,673 371 0 9 0 0 19 399 0
8. 1990.... 1,743 151 1,592 194 8 3 0 0 13 202 0
9. 1991.... 867 28 839 213 44 11 0 0 10 190 0
10. 1992.... 682 21 661 121 66 2 0 0 7 64 0
11. 1993.... 492 50 442 0 0 0 0 0 2 2 0
- -------------------------------------------------------------------------------------------------------------------------------
12. Totals.. X X X X X X X X X X X X 6,713 123 47 1 0 131 6,767 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1
Losses Unpaid Allocated Loss Expenses Unpaid
Years --------------------------------------------- ----------------------------------------------------
In Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were --------------------- --------------------- --------------------- -------------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... 0 0 0 0 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0 0
4. 1986..... 27 27 0 0 0 0 0 0
5. 1987..... 56 0 5 0 0 0 0 0
6. 1988..... 12 0 225 0 0 0 0 0
7. 1989..... 87 0 650 0 0 0 0 0
8. 1990..... 24 0 900 0 0 0 0 0
9. 1991..... 49 0 300 0 0 0 0 0
10. 1992..... 97 0 324 0 0 0 0 0
11. 1993..... 25 0 347 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------
12. Totals... 377 27 2,751 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
In Which Number
Premiums Were Salvage Unallocated Total of Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior .. 0 0 0 0
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 1 62 0
6. 1988..... 0 0 237 0
7. 1989..... 0 1 738 0
8. 1990..... 0 0 924 0
9. 1991..... 0 1 350 0
10. 1992..... 0 2 423 0
11. 1993..... 0 0 372 0
- ------------------------------------------------------------------------
12. Totals... 0 5 3,106 0
</TABLE>
<TABLE>
<CAPTION>
1 Total Losses and Loss and Loss Expense Percentage
Years Loss Expenses Incurrred (Incurred/Premiums Earned)
In Which ----------------------------------------- ------------------------------------------
Premiums Were 25 26 27 28 29 30
Earned and
Losses Were Direct Direct
Incurred and Assumed Ceded Net* and Assumed Ceded Net
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior..... X X X X X X X X X X X X X X X X X X X X X X X X
2. 1984...... 0 0 0 0.0 0.0 0.0
3. 1985...... 0 0 0 0.0 0.0 0.0
4. 1986...... 2,146 31 2,115 70.4 43.7 71.0
5. 1987...... 2,091 0 2,091 112.8 0.0 124.0
6. 1988...... 2,005 2 2,003 71.0 2.3 73.2
7. 1989...... 1,137 0 1,137 40.9 0.0 42.5
8. 1990...... 1,134 8 1,126 65.1 5.3 70.7
9. 1991...... 584 44 540 67.4 157.1 64.4
10. 1992...... 553 66 487 81.1 314.3 73.7
11. 1993...... 374 0 374 76.0 0.0 84.6
- ----------------------------------------------------------------------------------------------------------
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
</TABLE>
<TABLE>
<CAPTION>
1 Discount for Time Net Balance Sheet Reserves
Years Value of Money 33 After Discount
In Which ------------------ --------------------------
Premiums Were 31 32 Inter-Company 34 35
Earned and Pooling Loss
Losses Were Loss Participation Losses Expenses
Incurred Loss Expense Percentage Unpaid Unpaid
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior..... 0 0 X X X X 0 0
2. 1984...... 0 0 0.0 0 0
3. 1985...... 0 0 0.0 0 0
4. 1986...... 0 0 0.0 0 0
5. 1987...... 0 0 0.0 61 1
6. 1988...... 0 0 0.0 237 0
7. 1989...... 0 0 0.0 737 1
8. 1990...... 0 0 0.0 924 0
9. 1991...... 0 0 0.0 349 1
10. 1992...... 0 0 0.0 421 2
11. 1993...... 0 0 0.0 372 0
- --------------------------------------------------------------------------------------------
12. Totals.... 0 0 X X X X 3,101 5
</TABLE>
* Net = (25-26) = (11+23)
65
<PAGE> 5
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 1C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
(000 omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
1 ----------------------------------------------- ------------------------------
Years 2 3 4
in Which Loss Payments
Premiums Were ------------------------------
Earned and Direct Net 5 6
Losses Were and Ceded (2-3) Direct
Incurred Assumed and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior ......... X X X X X X X X X X X X 0 (6)
2. 1984 ......... 17,411 1,438 15,973 42,629 6,585
3. 1985 ......... 35,365 1,726 33,639 25,653 2,739
4. 1986 ......... 24,171 561 23,610 16,550 17
5. 1987 ......... 18,511 1,679 16,832 17,702 0
6. 1988 ......... 30,786 967 29,819 17,734 294
7. 1989 ......... 39,139 2,537 36,602 21,649 889
8. 1990 ......... 18,768 2,134 16,634 6,479 1,379
9. 1991 ......... 21,343 3,377 17,966 4,593 1,568
10. 1992 ......... 19,860 2,573 17,287 2,399 2,245
11. 1993 ......... 16,774 3,958 12,816 6 0
- ----------------------------------------------------------------------------------------------------------------------------------
12. Totals ......... X X X X X X X X X X X X 155,394 15,710
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
-------------------------------------------------------------------------------------
1
Years Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Premiums Were ---------------------------- Salvage Unallocated Total Claims
Earned and 7 8 and Loss Net Paid Reported -
Losses Were Direct Subrogation Expense (5 - 6 + 7 Direct and
Incurred and Assumed Ceded Received Payments - 8 + 10) Assumed
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior ....... (28) (22) 0 0 0 X X X X
2. 1984 ....... 2,732 270 0 318 38,824 0
3. 1985 ....... 876 99 0 251 23,942 0
4. 1986 ....... 123 0 0 125 16,781 0
5. 1987 ....... 155 0 0 208 18,065 0
6. 1988 ....... 155 13 0 184 17,766 0
7. 1989 ....... 220 26 0 186 21,140 0
8. 1990 ....... 309 74 0 113 5,448 0
9. 1991 ....... 247 9 0 106 3,369 0
10. 1992 ....... 49 0 0 81 284 0
11. 1993 ....... 0 0 0 36 42 0
- --------------------------------------------------------------------------------------------------------------------------------
12. Totals ....... 4,838 469 0 1,608 145,661 X X X X
</TABLE>
Note: For "prior" report amounts paid or received in current year only.
Report cumulative amounts of paid or received for specific years.
Report loss payments net of salvage and subrogation received.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ------------------------------------------------------------ ------------------------------
in Which Case Basis Bulk + IBNR Case Basis
Premiums Were -------------------------- ------------------------- --------------------------
Earned and 13 14 15 16 17 18
Losses Were Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior ........ 12,676 12,676 4,556 4,556 215 215
2. 1984 ........ 5,904 5,904 3,076 3,076 98 98
3. 1985 ........ 3,140 3,130 1,603 1,603 322 322
4. 1986 ........ 321 321 749 749 14 14
5. 1987 ........ 491 0 28 28 9 9
6. 1988 ........ 110 0 2,698 198 9 2
7. 1989 ........ 1,067 48 6,865 865 81 11
8. 1990 ........ 2,529 532 5,427 1,127 144 23
9. 1991 ....... 2,998 77 7,574 1,324 69 2
10. 1992 ........ 3,123 298 10,367 1,367 107 11
11. 1993 ........ 1,344 168 9,640 612 43 3
- -------------------------------------------------------------------------------------------------------------------
12. Totals ........ 33,703 23,154 52,633 15,505 1,111 710
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and 19 20 and Loss Net Losses Outstanding
Losses Were Direct Subrogation Expenses and Expenses Direct and
Incurred and Assumed Ceded Anticipated Unpaid Unpaid Assumed
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior ........ 0 0 0 202 202 0
2. 1984 ........ 0 0 0 94 94 0
3. 1985 ........ 0 0 0 50 60 0
4. 1986 ........ 0 0 0 5 5 0
5. 1987 ........ 0 0 0 8 549 0
6. 1988 ........ 0 0 0 2 2,619 0
7. 1989 ........ 0 0 0 17 7,106 0
8. 1990 ........ 0 0 0 40 6,458 0
9. 1991 ........ 0 0 0 48 9,286 0
10. 1992 ........ 0 0 0 50 11,971 0
11. 1993 ........ 0 0 0 21 10,265 0
- ----------------------------------------------------------------------------------------------------------------------
12. Totals ........ 0 0 0 537 48,615 0
</TABLE>
<TABLE>
<CAPTION>
1 Total Losses and Loss and Loss Expense Percentage
Years Loss Expenses Incurred (Incurred/Premiums Earned)
in Which ------------------------------------------ ------------------------------------------
Premiums Were 25 26 27 28 29 30
Earned and
Losses Were Direct Direct
Incurred and Assumed Ceded Net* and Assumed Ceded Net
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior ........ X X X X X X X X X X X X X X X X X X X X X X X X
2. 1984 ........ 54,851 15,933 38,918 315.0 1,108.0 243.6
3. 1985 ........ 31,895 7,893 24,002 90.2 457.3 71.4
4. 1986 ........ 17,887 1,101 16,786 74.0 196.3 71.1
5. 1987 ........ 18,651 37 18,614 100.8 2.2 110.6
6. 1988 ........ 20,892 507 20,385 67.9 52.4 68.4
7. 1989 ........ 30,085 1,839 28,246 76.9 72.5 77.2
8. 1990 ........ 15,041 3,135 11,906 80.1 146.9 71.6
9. 1991 ........ 15,635 2,980 12,655 73.3 88.2 70.4
10. 1992 ........ 16,176 3,921 12,255 81.5 152.4 70.9
11. 1993 ........ 11,090 783 10,307 66.1 19.8 80.4
- -------------------------------------------------------------------------------------------------------------------
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
</TABLE>
<TABLE>
<CAPTION>
Discount for Time Net Balance Sheet Reserves
Years Value of Money After Discount
in Which ------------------------ 33 ----------------------------
Premiums Were 31 32 Inter-Company 34 35
Earned and Pooling Loss
Losses Were Loss Participation Losses Expenses
Incurred Loss Expense Percentage Unpaid Unpaid
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior ........ 0 0 X X X X 0 202
2. 1984 ........ 0 0 0.0 0 94
3. 1985 ........ 0 0 0.0 10 50
4. 1986 ........ 0 0 0.0 0 5
5. 1987 ........ 0 0 0.0 541 8
6. 1988 ........ 0 0 0.0 2,610 9
7. 1989 ........ 0 0 0.0 7,019 87
8. 1990 ........ 0 0 0.0 6,297 161
9. 1991 ........ 0 0 0.0 9,171 115
10. 1992 ........ 0 0 0.0 11,825 146
11. 1993 ........ 0 0 0.0 10,204 61
- -----------------------------------------------------------------------------------------------------
12. Totals ........ 0 0 X X X X 47 677 938
</TABLE>
*Net = (25 - 26) = (11 + 23)
66
<PAGE> 6
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 1D - WORKERS' COMPENSATION
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
----------------------------- ---------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were --------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2-3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X 79 13 160 0
2. 1984 . . . . 6,249 946 5,303 9,233 1,216 766 45
3. 1985 . . . . 10,366 1,275 9,091 8,158 521 182 24
4. 1986 . . . . 6,198 194 6,004 4,826 0 52 0
5. 1987 . . . . 2,648 35 2,613 1,012 0 0 0
6. 1988 . . . . 1,790 69 1,721 127 0 1 0
7. 1989 . . . . 5,235 44 5,191 3,468 500 92 1
8. 1990 . . . . 3,600 (6) 3,606 1,607 302 236 38
9. 1991 . . . . 4,655 465 4,091 32 0 0 0
10. 1992 . . . . 12,979 1,696 11,283 250 180 11 2
11. 1993 . . . . 17,032 3,079 13,953 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
12. Totals . . . X X X X X X X X X X X X 28,792 2,732 1,500 110
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 -------------------------------------------------
Years 9 10 11 12
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . 0 0 226 X X X X
2. 1984 . . . . 0 75 8,813 0
3. 1985 . . . . 0 57 7,852 0
4. 1986 . . . . 0 13 4,891 0
5. 1987 . . . . 0 22 1,034 0
6. 1988 . . . . 0 15 143 0
7. 1989 . . . . 0 19 3,078 0
8. 1990 . . . . 0 31 1,534 0
9. 1991 . . . . 0 25 57 0
10. 1992 . . . . 0 34 113 0
11. 1993 . . . . 0 0 0 0
- ---------------------------------------------------------------------------------------
12. Totals. . . . 0 291 27,741 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1
Losses Unpaid Allocated Loss Expenses Unpaid
Years ----------------------------------------- -----------------------------------------
in Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ------------------- ------------------- ------------------- ------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . 10,454 10,454 556 556 245 245 0 0
2. 1984 . . . . 9,584 9,584 375 375 268 268 0 0
3. 1985 . . . . 4,373 4,373 195 195 715 715 0 0
4. 1986 . . . . 332 0 1,053 91 9 0 0 0
5. 1987 . . . . 102 0 882 3 3 0 0 0
6. 1988 . . . . 72 0 851 24 6 0 0 0
7. 1989 . . . . 706 500 1,173 106 14 1 0 0
8. 1990 . . . . 99 1 744 137 66 17 0 0
9. 1991 . . . . 642 0 2,222 162 12 0 0 0
10. 1992 . . . . 154 0 11,418 4,125 3 0 0 0
11. 1993 . . . . 103 0 11,172 2,191 2 0 0 0
- ------------------------------------------------------------------------------------------------------------
12. Totals . . . 26,621 24,912 30,641 7,965 1,343 1,246 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . 0 167 167 0
2. 1984 . . . . 0 153 153 0
3. 1985 . . . . 0 70 70 0
4. 1986 . . . . 0 5 1,308 0
5. 1987 . . . . 0 2 986 0
6. 1988 . . . . 0 1 906 0
7. 1989 . . . . 0 11 1,297 0
8. 1990 . . . . 0 2 756 0
9. 1991 . . . . 0 10 2,724 0
10. 1992 . . . . 0 2 7,452 0
11. 1993 . . . . 0 2 9,088 0
- ---------------------------------------------------------------------------------------
12. Totals. . . . 0 425 24,907 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage
in Which Loss Expenses Incurred (Incurred/Premiums Earned)
Premiums Were ------------------------------ --------------------------------
Earned and 25 26 27 28 29 30
Losses Were Direct Direct
Incurred and Assumed Ceded Net* and Assumed Ceded Net
- -------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X X X X X X X X X X X X X
2. 1984 . . . . 20,454 11,488 8,966 327.3 1,214.4 169.1
3. 1985 . . . . 13,750 5,828 7,922 132.6 457.1 87.1
4. 1986 . . . . 6,290 91 6,199 101.5 46.9 103.2
5. 1987 . . . . 2,023 3 2,020 76.4 8.6 77.3
6. 1988 . . . . 1,073 24 1,049 59.9 34.8 61.0
7. 1989 . . . . 5,483 1,108 4,375 104.7 2,518.2 84.3
8. 1990 . . . . 2,785 495 2,290 77.4 (8,250.0) 63.5
9. 1991 . . . . 2,943 162 2,781 63.2 28.7 68.0
10. 1992 . . . . 11,872 7,307 7,565 91.5 254.0 67.0
11. 1993 . . . . 11,279 2,191 9,088 66.2 71.2 65.1
- -------------------------------------------------------------------------------------------
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
</TABLE>
<TABLE>
<CAPTION>
1
Discount for Time Net Balance Sheet Reserves
Years Value of Money 33 After Discount
in Which ---------------------- --------------------------
Premiums Were 31 32 Inter-Company 34 35
Earned and Pooling Loss
Losses Were Loss Participation Losses Expenses
Incurred Loss Expense Percentage Unpaid Unpaid
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . 0 0 X X X X 0 167
2. 1984 . . . . 0 0 0.0 0 153
3. 1985 . . . . 0 0 0.0 0 70
4. 1986 . . . . 0 0 0.0 1,294 14
5. 1987 . . . . 0 0 0.0 981 5
6. 1988 . . . . 0 0 0.0 899 7
7. 1989 . . . . 0 0 0.0 1,273 24
8. 1990 . . . . 0 0 0.0 705 51
9. 1991 . . . . 0 0 0.0 2,702 22
10. 1992 . . . . 0 0 0.0 7,447 5
11. 1993 . . . . 0 0 0.0 9,084 4
- --------------------------------------------------------------------------------------------------
12. Totals. . . . 0 0 X X X X 24,385 522
</TABLE>
*Net = (25 - 26) = (11 + 23)
67
<PAGE> 7
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
.............................
(Name)
SCHEDULE P - PART 1E - COMMERCIAL MULTIPLE PERIL
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
------------------------------- ---------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were ---------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2-3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X 1,317 0 108 0
2. 1984 . . . . 8,194 1,446 6,748 12,677 1,225 756 0
3. 1985 . . . . 16,107 1,483 14,624 7,094 26 263 0
4. 1986 . . . . 9,098 697 8,401 1,727 0 0 0
5. 1987 . . . . 3,976 457 3,519 1,372 0 0 0
6. 1988 . . . . 2,111 1,469 642 351 6 0 0
7. 1989 . . . . 4,548 0 4,548 4,318 0 102 0
8. 1990 . . . . 3,448 0 3,448 2,484 0 115 0
9. 1991 . . . . 1,556 0 1,556 540 0 0 0
10. 1992 . . . . 1,182 90 1,092 178 0 133 0
11. 1993 . . . . 10,042 0 10,042 2,831 0 16 0
- ------------------------------------------------------------------------------------------------------------
12. Totals . . . X X X X X X X X X X X X 34,889 1,257 1,493 0
</TABLE>
<TABLE>
<CAPTION>
1 Loss and Loss Expense Payments
--------------------------------------------
Years 9 10 11 12
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . 0 6 1,431 X X X X
2. 1984 . . . . 0 89 12,297 0
3. 1985 . . . . 0 73 7,404 0
4. 1986 . . . . 0 33 1,760 0
5. 1987 . . . . 0 38 1,410 0
6. 1988 . . . . 0 32 377 0
7. 1989 . . . . 0 31 4,451 0
8. 1990 . . . . 0 26 2,625 0
9. 1991 . . . . 0 17 557 0
10. 1992 . . . . 0 18 329 0
11. 1993 . . . . 0 14 2,861 0
- --------------------------------------------------------------------------------
12. Totals. . . . 0 377 35,502 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1
Losses Unpaid Allocated Loss Expenses Unpaid
Years ----------------------------------------- -----------------------------------------
in Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were -------------------- ------------------- ------------------- ------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . 5,626 5,626 0 0 105 105 0 0
2. 1984 . . . . 2,490 2,490 0 0 47 47 0 0
3. 1985 . . . . 1,433 1,033 0 0 27 27 0 0
4. 1986 . . . . 0 0 1,200 0 0 0 0 0
5. 1987 . . . . 0 0 300 0 0 0 0 0
6. 1988 . . . . 0 0 200 0 0 0 0 0
7. 1989 . . . . 0 0 600 0 0 0 0 0
8. 1990 . . . . 0 0 800 0 0 0 0 0
9. 1991 . . . . 72 0 600 0 1 0 0 0
10. 1992 . . . . 1,238 0 250 0 23 0 0 0
11. 1993 . . . . 438 0 4,763 0 8 0 0 0
- ------------------------------------------------------------------------------------------------------------
12. Totals . . . 11,297 9,149 8,713 0 211 179 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . 0 90 90 0
2. 1984 . . . . 0 40 40 0
3. 1985 . . . . 0 23 423 0
4. 1986 . . . . 0 0 1,200 0
5. 1987 . . . . 0 0 300 0
6. 1988 . . . . 0 0 200 0
7. 1989 . . . . 0 0 600 0
8. 1990 . . . . 0 0 800 0
9. 1991 . . . . 0 1 674 0
10. 1992 . . . . 0 20 1,531 0
11. 1993 . . . . 0 7 5,216 0
- ---------------------------------------------------------------------------------
12. Totals. . . . 0 181 11,074 0
</TABLE>
<TABLE>
<CAPTION>
1
Total Losses and Loss and Loss Expense Percentage
Years Loss Expenses Incurred (Incurred/Premiums Earned)
in Which --------------------------------- ------------------------------------
Premiums Were 25 26 27 28 29 30
Earned and
Losses Were Direct Direct
Incurred and Assumed Ceded Net* and Assumed Ceded Net
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X X X X X X X X X X X X X
2. 1984 . . . . 16,099 3,762 12,337 196.5 260.2 182.8
3. 1985 . . . . 8,913 1,086 7,827 55.3 73.2 53.5
4. 1986 . . . . 2,960 0 2,960 32.5 0.0 35.2
5. 1987 . . . . 1,710 0 1,710 43.0 0.0 48.6
6. 1988 . . . . 583 6 577 27.6 0.4 89.9
7. 1989 . . . . 5,051 0 5,051 111.1 0.0 111.1
8. 1990 . . . . 3,425 0 3,425 99.3 0.0 99.3
9. 1991 . . . . 1,231 0 1,231 79.1 0.0 79.1
10. 1992 . . . . 1,860 0 1,860 157.4 0.0 170.3
11. 1993 . . . . 8,077 0 8,077 80.4 0.0 80.4
- --------------------------------------------------------------------------------------------
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
</TABLE>
<TABLE>
<CAPTION>
1
Discount for Time Net Balance Sheet Reserves
Years Value of Money 33 After Discount
in Which ----------------------- --------------------------
Premiums Were 31 32 Inter-Company 34 35
Earned and Pooling Loss
Losses Were Loss Participation Losses Expenses
Incurred Loss Expense Percentage Unpaid Unpaid
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . 0 0 X X X X 0 90
2. 1984 . . . . 0 0 0.0 0 40
3. 1985 . . . . 0 0 0.0 400 23
4. 1986 . . . . 0 0 0.0 1,200 0
5. 1987 . . . . 0 0 0.0 300 0
6. 1988 . . . . 0 0 0.0 200 0
7. 1989 . . . . 0 0 0.0 600 0
8. 1990 . . . . 0 0 0.0 800 0
9. 1991 . . . . 0 0 0.0 672 2
10. 1992 . . . . 0 0 0.0 1,488 43
11. 1993 . . . . 0 0 0.0 5,201 15
- ----------------------------------------------------------------------------------------------------
12. Totals. . . . 0 0 X X X X 10,861 213
</TABLE>
*Net = (25 - 26) = (11 + 23)
68
<PAGE> 8
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P -- PART 1F -- SECTION 1 -- MEDICAL MALPRACTICE -- OCCURRENCE
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
--------------------------- ------------------------------
Years 2 3 4 Loss Payments
in Which -----------------------
Premiums Were
Earned and Direct Net 5 6
Losses Were and Ceded (2 - 3) Direct
Incurred Assumed and Assumed Ceded
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior...... X X X X X X X X X X X X 206 0
2. 1984....... 742 177 565 1,281 403
3. 1985....... 628 208 420 850 87
4. 1986....... 284 13 271 366 0
5. 1987....... 863 (13) 876 1,880 1,986
6. 1988....... 2,005 0 2,005 1,855 0
7. 1989....... 1,852 2 1,850 1,986 0
8. 1990....... 4,559 0 4,559 1,687 0
9. 1991....... 722 0 722 0 0
10. 1992...... 435 0 435 0 0
11. 1993....... 994 63 931 0 0
- -------------------------------------------------------------------------------------
12. Totals..... X X X X X X X X X X X X 10,111 490
</TABLE>
<TABLE>
<CAPTION>
1 Allocated Loss
Years Expense Payments 9 10 11 12
in Which ----------------------- Number
Premiums Were Salvage Unallocated Total of Claims
Earned and 7 8 and Loss Net Paid Reported -
Losses Were Direct Subrogation Expense (5 - 6 + 7 Direct and
Incurred and Assumed Ceded Received Payments - 8 + 10) Assumed
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior..... 2 0 0 1 209 X X X X
2. 1984...... 36 12 0 5 907 0
3. 1985...... 88 51 0 7 807 0
4. 1986...... 24 0 0 1 391 0
5. 1987...... 0 0 0 14 1,894 0
6. 1988...... 0 0 0 15 1,870 0
7. 1989...... 6 0 0 12 2,004 0
8. 1990...... 4 0 0 13 1,704 0
9. 1991...... 0 0 0 27 27 0
10. 1992...... 0 0 0 2 2 0
11. 1993...... 0 0 0 2 2 0
- -----------------------------------------------------------------------------------------------------------
12. Totals... 160 63 0 99 9,817 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
Losses Unpaid Allocated Loss Expenses Unpaid
1 ------------------------------------------------------------------------------
Years Case Basis Bulk + IBNR Case Basis Bulk + IBNR
in Which ------------------------------------------------------------------------------
Premiums Were 13 14 15 16 17 18 19 20
Earned and Direct Direct Direct Direct
Losses Were and and and and
Incurred Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior...... 450 450 0 0 22 22 0 0
2. 1984....... 291 291 0 0 10 10 0 0
3. 1985....... 1,141 1,141 0 0 88 88 0 0
4. 1986....... 9 9 0 0 0 0 0 0
5. 1987....... 0 0 238 0 0 0 0 0
6. 1988....... 0 0 737 0 0 0 0 0
7. 1989....... 1 0 753 0 0 0 0 0
8. 1990....... 213 0 1,612 0 0 0 0 0
9. 1991....... 8 0 604 0 0 0 0 0
10. 1992....... 1 0 413 0 0 0 0 0
11. 1993....... 9 0 717 0 0 0 0 0
- ------------------------------------------------------------------------------------------------
12. Totals..... 2,123 1,891 5,074 0 120 120 0 0
</TABLE>
<TABLE>
<CAPTION>
1 21 22 23 24
Years Number
in Which of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior..... 0 7 7 0
2. 1984...... 0 5 5 0
3. 1985...... 0 18 18 0
4. 1986...... 0 0 0 0
5. 1987...... 0 0 238 0
6. 1988...... 0 0 737 0
7. 1989...... 0 0 754 0
8. 1990...... 0 3 1,828 0
9. 1991...... 0 0 612 0
10. 1992...... 0 0 414 0
11. 1993...... 0 0 726 0
- --------------------------------------------------------------------------------
12. Totals... 0 33 5,339 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage
in Which Loss Expenses Incurred (Incurred/Premiums Earned)
Premiums Were ------------------------------------- -------------------------------------------
Earned and 25 26 27 28 29 30
Losses Were Direct Direct
Incurred and Assumed Ceded Net * and Assumed Ceded Net
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior..... X X X X X X X X X X X X X X X X X X X X X X X X
2. 1984...... 1,628 716 912 219.4 404.5 161.4
3. 1985...... 2,192 1,367 825 349.0 657.2 196.4
4. 1986...... 400 9 391 140.8 69.2 144.3
5. 1987...... 2,132 0 2,132 247.0 0.0 243.4
6. 1988...... 2,607 0 2,607 130.0 0.0 130.0
7. 1989...... 2,758 0 2,758 148.9 0.0 149.1
8. 1990...... 3,532 0 3,532 77.5 0.0 77.5
9. 1991...... 639 0 639 88.5 0.0 88.5
10. 1992...... 416 0 416 95.6 0.0 95.6
11. 1993...... 728 0 728 73.2 0.0 78.2
- ----------------------------------------------------------------------------------------------------------
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
</TABLE>
<TABLE>
<CAPTION>
Discount for Time Net Balance Sheet Reserves
1 Value of Money 33 After Discount
Years --------------------- --------------------------
in Which 31 32 34 35
Premiums Were Inter-Company
Earned and Pooling Loss
Losses Were Loss Participation Losses Expenses
Incurred Loss Expense Percentage Unpaid Unpaid
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior..... 0 0 X X X X 0 7
2. 1984...... 0 0 0.0 0 5
3. 1985...... 0 0 0.0 0 18
4. 1986...... 0 0 0.0 0 0
5. 1987...... 0 0 0.0 238 0
6. 1988...... 0 0 0.0 737 0
7. 1989...... 0 0 0.0 754 0
8. 1990...... 0 0 0.0 1,825 3
9. 1991...... 0 0 0.0 612 0
10. 1992...... 0 0 0.0 414 0
11. 1993...... 0 0 0.0 726 0
- -----------------------------------------------------------------------------------------
12. Totals... 0 0 X X X X 5,306 33
</TABLE>
*Net = (25-26) = (11+23)
69
<PAGE> 9
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 1F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
------------------------------- --------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were ------------------------ ------------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... X X X X X X X X X X X X 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0
11. 1993..... 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
</TABLE>
<TABLE>
<CAPTION>
Loss and Expense Payments Made
1 ----------------------------------------------
Years 9 10 11 12
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7) Direct and
Incurred Received Payments - 8 + 10) Assumed
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 X X X X
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 0 0 0
6. 1988..... 0 0 0 0
7. 1989..... 0 0 0 0
8. 1990..... 0 0 0 0
9. 1991..... 0 0 0 0
10. 1992..... 0 0 0 0
11. 1993..... 0 0 0 0
- -------------------------------------------------------------------------------------
12. Totals .. 0 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- --------------------------------------------------
in Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were 13 14 15 16 17 18 19 20
Earned and --------------------- ----------------------------- ------------------------- ----------------------
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... 0 0 0 0 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0 0
11. 1993..... 0 0 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------
12. Totals .. 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expense and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 0
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 0 0 0
6. 1988..... 0 0 0 0
7. 1989..... 0 0 0 0
8. 1990..... 0 0 0 0
9. 1991..... 0 0 0 0
10. 1992..... 0 0 0 0
11. 1993..... 0 0 0 0
- ---------------------------------------------------------------------------------
12. Totals .. 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ------------------------------------ ----------------------------------------- ----------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- -----------------------------------------------------------------------------------------------------------------------------------
<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
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. 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
</TABLE>
<TABLE>
<CAPTION>
1 33 Net Balance Sheet Reserves
Years After Discount
in Which ---------------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling
Losses Were Participation Losses Loss Expenses
Incurred Percentage Unpaid Unpaid
- --------------------------------------------------------------------------
<S> <C> <C> <C>
1. Prior ... X X X X 0 0
2. 1984..... 0.0 0 0
3. 1985..... 0.0 0 0
4. 1986..... 0.0 0 0
5. 1987..... 0.0 0 0
6. 1988..... 0.0 0 0
7. 1989..... 0.0 0 0
8. 1990..... 0.0 0 0
9. 1991..... 0.0 0 0
10. 1992..... 0.0 0 0
11. 1993..... 0.0 0 0
- --------------------------------------------------------------------------
12. Totals .. X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
70
<PAGE> 10
FORM 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 1G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT (ALL PERILS),
BOILER AND MACHINERY)
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
------------------------------- --------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were ------------------------ ------------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... X X X X X X X X X X X X 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0
7. 1989..... 284 0 284 211 0 0 0
8. 1990..... 3 0 3 0 0 0 0
9. 1991..... 174 0 174 1,618 406 25 0
10. 1992..... 11,996 4,192 7,804 2,407 1,723 28 0
11. 1993..... 15,694 2,821 12,873 404 138 1 0
- ---------------------------------------------------------------------------------------------------------------
12. Totals .. X X X X X X X X X X X X 4,640 2,267 54 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 ---------------------------------------------
Years 9 10 11 12
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 X X X X
2. 1984..... 0 0 0 X X X X
3. 1985..... 0 0 0 X X X X
4. 1986..... 0 1 1 X X X X
5. 1987..... 0 0 0 X X X X
6. 1988..... 0 0 0 X X X X
7. 1989..... 0 3 214 X X X X
8. 1990..... 0 1 1 X X X X
9. 1991..... 0 11 1,248 X X X X
10. 1992..... 0 19 731 X X X X
11. 1993..... 0 18 285 X X X X
- --------------------------------------------------------------------------------------
12. Totals .. 0 53 2,480 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- --------------------------------------------------
in Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were -------------------- -------------------------- ------------------------ ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ...
2. 1984..... 0 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0 0
7. 1989..... 0 0 38 0 0 0 0 0
8. 1990..... 0 0 67 0 0 0 0 0
9. 1991..... 46 0 52 0 0 0 0 0
10. 1992..... 4,177 1,560 4,808 2,046 0 0 0 0
11. 1993..... 2,696 0 6,694 646 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------
12. Totals .. 6,919 1,560 11,659 2,692 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1 21 22 23 24
Years Number of
in Which Salvage Unallocated Total Claims
Premiums Were and Loss Net Losses Outstanding -
Earned and Subrogation Expenses and Expenses Direct and
Losses Were Anticipated Unpaid Unpaid Assumed
Incurred -----------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 0
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 0 0 0
6. 1988..... 0 0 0 0
7. 1989..... 0 0 38 0
8. 1990..... 0 0 67 0
9. 1991..... 0 20 118 0
10. 1992..... 0 47 5,426 0
11. 1993..... 0 43 8,787 0
- ---------------------------------------------------------------------------------
12. Totals .. 0 110 14,436 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ------------------------------------ ----------------------------------------- ----------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <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
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..... 1 0 1 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..... 252 0 252 88.7 0.0 88.7 0 0
8. 1990..... 68 0 68 2,266.7 0.0 2,266.7 0 0
9. 1991..... 1,772 406 1,366 1,018.4 0.0 785.1 0 0
10. 1992..... 11,486 5,329 6,157 95.7 127.1 78.9 0 0
11. 1993..... 9,856 784 9,072 62.8 27.8 70.5 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
12. Totals .. X X X X X X X X X X X X X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
1 33 Net Balance Sheet Reserves
Years After Discount
in Which ---------------------------------
Premiums Wer Inter-Company 34 35
Earned and Pooling
Losses Were Participation Losses Loss Expenses
Incurred Percentage Unpaid Unpaid
- --------------------------------------------------------------------------
<S> <C> <C> <C>
1. Prior ... X X X X 0 0
2. 1984..... 0.0 0 0
3. 1985..... 0.0 0 0
4. 1986..... 0.0 0 0
5. 1987..... 0.0 0 0
6. 1988..... 0.0 0 0
7. 1989..... 0.0 38 0
8. 1990..... 0.0 67 0
9. 1991..... 0.0 98 20
10. 1992..... 0.0 5,379 47
11. 1993..... 0.0 8,744 43
- --------------------------------------------------------------------------
12. Totals .. X X X X 14,326 110
</TABLE>
*Net = (25 - 26) = (11 + 23)
71
<PAGE> 11
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 1H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
--------------------------------- --------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were ------------------------- ------------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... X X X X X X X X X X X X 13,501 1,431 1,815 416
2. 1984..... 44,137 6,670 37,467 113,786 40,050 11,761 2,650
3. 1985..... 89,060 11,010 78,050 68,799 23,762 6,944 2,074
4. 1986..... 108,336 9,143 99,193 58,860 2.360 2,053 287
5. 1987..... 110,868 3,040 107,828 45,897 286 3,127 2
6. 1988..... 88,793 7,489 81,304 29,862 9,155 1,713 80
7. 1989..... 80,001 13,377 66,624 31,033 3,658 2,564 148
8. 1990..... 82,713 11,524 71,189 38,008 17,601 3,142 214
9. 1991..... 69,947 9,779 60,168 21,066 8,798 1,423 12
10. 1992..... 49,765 6,524 43,241 3,205 3,205 122 14
11. 1993..... 59,021 11,458 47,563 1,002 1,002 0 0
- -------------------------------------------------------------------------------------------------------------------
12. Totals .. X X X X X X X X X X X X 425,019 111,308 34,664 5,897
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 ---------------------------------------------
Years 9 10 11 12
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 65 13,534 X X X X
2. 1984..... 0 603 83,450 0
3. 1985..... 0 529 50,436 0
4. 1986..... 0 316 58,582 0
5. 1987..... 0 388 49,124 0
6. 1988..... 0 391 22,731 0
7. 1989..... 0 327 30,118 0
8. 1990..... 0 422 23,757 0
9. 1991..... 0 409 14,088 0
10. 1992..... 0 368 476 0
11. 1993..... 0 301 301 0
- ----------------------------------------------------------------------------------
12. Totals .. 0 4,119 346,597 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ----------------------------------------------------- --------------------------------------------------
in Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ----------------------- ----------------------------- ------------------------ ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... 71,231 70,250 17,613 16,613 8,549 7,079 0 0
2. 1984..... 23,199 23,199 13,342 11,842 5,876 5,876 0 0
3. 1985..... 17,738 17,738 21,585 19,085 2,535 2,353 0 0
4. 1986..... 11,643 11,658 29,810 17,726 547 30 0 0
5. 1987..... 7,946 0 18,651 70 301 0 0 0
6. 1988..... 9,540 447 20,095 504 803 129 0 0
7. 1989..... 6,573 787 12,524 2,205 568 91 0 0
8. 1990..... 11,105 1,439 19,837 2,872 615 100 0 0
9. 1991..... 9,287 1,642 28,475 3.375 267 29 0 0
10. 1992..... 6,652 1,406 28,855 3,484 707 299 0 0
11. 1993..... 1,298 315 39,872 1,761 44 12 0 0
- ---------------------------------------------------------------------------------------------------------------------------
12. Totals .. 176,212 128,881 250,659 79,537 20,630 15,998 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding
Losses Were Subrogation Expense and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 1,140 4,591 0
2. 1984..... 0 371 1,871 0
3. 1985..... 0 283 2,783 0
4. 1986..... 0 186 12,772 0
5. 1987..... 0 127 26,955 0
6. 1988..... 0 152 29,510 0
7. 1989..... 0 105 16,687 0
8. 1990..... 0 177 27,323 0
9. 1991..... 0 148 33,131 0
10. 1992..... 0 106 31,131 0
11. 1993..... 0 21 39,147 0
- -----------------------------------------------------------------------------
12. Totals .. 0 2,816 225,901 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ------------------------------------ ------------------------------------------- ----------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- --------------------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1984..... 168,938 83,617 85,321 382.8 1,253.6 227.7 0 0
3. 1985..... 118,231 65,012 53,219 132.8 590.5 68.2 0 0
4. 1986..... 103,415 32,061 71,354 95.5 350.7 71.9 0 0
5. 1987..... 76,437 358 76,079 68.9 11.8 70.6 0 0
6. 1988..... 62,556 10,315 52,241 70.5 137.7 64.3 0 0
7. 1989..... 53,694 6,889 46,805 67.1 51.5 70.3 0 0
8. 1990..... 73,306 22,226 51,080 88.6 192.9 71.8 0 0
9. 1991..... 61,075 13,856 47,219 87.3 141.7 78.5 0 0
10. 1992..... 40,015 8,408 31,607 80.4 128.9 73.1 0 0
11. 1993..... 42,538 3,090 39,448 72.1 27.0 82.9 0 0
- --------------------------------------------------------------------------------------------------------------------------------
12. Totals .. X X X X X X X X X X X X X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
1 33 Net Balance Sheet Reserves
Years After Discount
in Which ---------------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling
Losses Were Participation Losses Loss Expenses
Incurred Percentage Unpaid Unpaid
- --------------------------------------------------------------------------
<S> <C> <C> <C>
1. Prior ... X X X X 1,981 2,610
2. 1984..... 0.0 1,500 371
3. 1985..... 0.0 2,500 283
4. 1986..... 0.0 12,069 703
5. 1987..... 0.0 26,527 428
6. 1988..... 0.0 28,684 826
7. 1989..... 0.0 16,105 582
8. 1990..... 0.0 26,631 692
9. 1991..... 0.0 32,745 386
10. 1992..... 0.0 30,617 514
11. 1993..... 0.0 39,094 53
- --------------------------------------------------------------------------
12. Totals .. X X X X 218,453 7,448
</TABLE>
*Net = (25 - 26) = (11 + 23)
72
<PAGE> 12
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PARTH 1H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
(000 Omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
-------------------------------- ----------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were ------------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... X X X X X X X X X X X X 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0
11. 1993..... 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
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 -----------------------------------------
Years 9 10 11 12
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0 X X X X
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 0 0 0
6. 1988..... 0 0 0 0
7. 1989..... 0 0 0 0
8. 1990..... 0 0 0 0
9. 1991..... 0 0 0 0
10. 1992..... 0 0 0 0
11. 1993..... 0 0 0 0
- --------------------------------------------------------------------------------
12. Totals .. 0 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1
Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- --------------------------------------------------
in Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were --------------------- ------------------------- --------------------- ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... 0 0 0 0 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0 0
11. 1993..... 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
12. Totals... 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 0
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 0 0 0
6. 1988..... 0 0 0 0
7. 1989..... 0 0 0 0
8. 1990..... 0 0 0 0
9. 1991..... 0 0 0 0
10. 1992..... 0 0 0 0
11. 1993..... 0 0 0 0
- ---------------------------------------------------------------------
12. Totals... 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ---------------------------------- -------------------------------------- --------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- ---------------------------------------------------------------------------------------------------------------------------
<S> <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
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. 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
</TABLE>
<TABLE>
<CAPTION>
Net Balance Sheet Reserves
After Discount
33 ---------------------------
Inter-Company 34 35
Pooling Loss
Participation Losses Expenses
Percentage Unpaid Unpaid
- ----------------------------------------------------------------
<S> <C> <C> <C>
1. Prior ... X X X X 0 0
2. 1984..... 0.0 0 0
3. 1985..... 0.0 0 0
4. 1986..... 0.0 0 0
5. 1987..... 0.0 0 0
6. 1988..... 0.0 0 0
7. 1989..... 0.0 0 0
8. 1990..... 0.0 0 0
9. 1991..... 0.0 0 0
10. 1992..... 0.0 0 0
11. 1993..... 0.0 0 0
- ----------------------------------------------------------------
12. Totals .. X X X X 0 0
</TABLE>
73
<PAGE> 13
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
<TABLE>
<CAPTION>
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
Which Expense Payments
Premiums Were ------------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... X X X X X X X X X X X X (358) 766 239 68
2. 1992..... 9,259 5,773 3,486 14,217 8,519 188 91
3. 1993..... 14,461 4,170 10,291 2,949 505 94 4
- ---------------------------------------------------------------------------------------------------------------
4. Totals .. X X X X X X X X X X X X 16,808 9,790 521 163
</TABLE>
<TABLE>
<CAPTION>
1 Loss and Loss Expense Payments
-----------------------------------------
Years 9 10 11 12
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 2 (951) X X X X
2. 1992..... 0 93 5,888 X X X X
3. 1993..... 0 68 2,602 X X X X
- -------------------------------------------------------------------------------
4. Totals .. 0 163 7.539 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1
Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- --------------------------------------------------
Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were --------------------- ------------------------- --------------------- ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... 4,046 1,394 908 8 154 58 0 0
2. 1992..... 6,155 3,555 1,817 1,117 29 17 0 0
3. 1993..... 4,466 1,513 1,637 459 21 11 0 0
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals .. 14,667 6,462 4,362 1,584 204 86 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 65 3,713 0
2. 1992..... 0 98 3,410 0
3. 1993..... 0 71 4,212 0
- ---------------------------------------------------------------------
4. Totals .. 0 234 11,335 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ---------------------------------- -------------------------------------- --------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- ---------------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1992..... 22,597 13,299 9,298 244.1 230.4 266.7 0 0
3. 1993..... 9,306 2,492 6,814 64.4 59.8 66.2 0 0
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals .. X X X X X X X X X X X X X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Net Balance Sheet Reserves
Years After Discount
Which 33 --------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- ----------------------------------------------------------------
<S> <C> <C> <C>
1. Prior ... X X X X 3,552 161
2. 1992..... 0.0 3,300 110
3. 1993..... 0.0 4,131 81
- ----------------------------------------------------------------
4. Totals .. X X X X 10,983 352
</TABLE>
*Net = (25 - 26) = (11 + 23)
SCHEDULE P - PART 1J - AUTO PHYSICAL DAMAGE
(000 omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
1 -------------------------------- ----------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
Which Expense Payments
Premiums Were ------------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... X X X X X X X X X X X X 76 0 5 0
2. 1992..... 47 4 43 0 0 0 0
3. 1993..... (15) 0 (15) 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------
4. Totals .. X X X X X X X X X X X X 76 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1 Loss and Loss Expense Payments
-----------------------------------------
Years 9 10 11 12
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 81 X X X X
2. 1992..... 0 1 1 0
3. 1993..... 0 0 0 0
-------------------------------------------------------------------------------
4. Totals... 0 1 82 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1
Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- --------------------------------------------------
Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were --------------------- ------------------------- --------------------- ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... 107 0 101 0 0 0 0 0
2. 1992..... 0 0 32 0 0 0 0 0
3. 1993..... 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals... 107 0 133 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss net Losses Outstanding
Losses Were Subrogation Expense and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 1 209 0
2. 1992..... 0 0 32 0
3. 1993..... 0 0 0 0
- ---------------------------------------------------------------------------------------
4. Totals... 0 1 241 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ---------------------------------- -------------------------------------- --------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- ---------------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1992..... 33 0 33 70.2 0.0 76.7 0 0
3. 1993..... 0 0 0 0.0 0.0 0.0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals .. X X X X X X X X X X X X X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
1 Net Balance Sheet Reserves
After Discount
Years ---------------------------
Which 33
Premiums Were Inter-Company 34 35
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- ----------------------------------------------------------------
<S> <C> <C> <C>
1. Prior ... X X X X 208 1
2. 1992..... 0.0 32 0
3. 1993..... 0.0 0 0
- ----------------------------------------------------------------
4. Totals .. X X X X 240 1
</TABLE>
*Net = (25 - 26) = (11 + 23)
74
<PAGE> 14
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 1K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAGE GUARANTY
(000 Omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
-------------------------------- ----------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
Which Expense Payments
Premiums Were ------------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... X X X X X X X X X X X X 0 0 0 0
2. 1992..... 0 0 0 0 0 0 0
3. 1993..... 0 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------
4. Totals .. X X X X X X X X X X X X 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 -----------------------------------------
Years 9 10 11 12
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0 X X X X
2. 1992..... 0 0 0 X X X X
3. 1993..... 0 0 0 X X X X
- ------------------------------------------------------------------------------
4. Totals... 0 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- --------------------------------------------------
Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were --------------------- ------------------------- --------------------- ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... 0 0 0 0 0 0 0 0
2. 1992..... 0 0 0 0 0 0 0 0
3. 1993..... 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals... 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0 0
2. 1992..... 0 0 0 0
3. 1993..... 0 0 0 0
- ---------------------------------------------------------------------
4. Totals... 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ---------------------------------- -------------------------------------- --------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- -------------------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1992..... 0 0 0 0.0 0.0 0.0 0 0
3. 1993..... 0 0 0 0.0 0.0 0.0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
4. Totals... X X X X X X X X X X X X X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
1 Net Balance Sheet Reserves
Years After Discount
Which 33 ---------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- -------------------------------------------------------------------
<S> <C> <C> <C>
1. Prior.... X X X X 0 0
2. 1992..... 0.0 0 0
3. 1993..... 0.0 0 0
- -------------------------------------------------------------------
4. Totals... X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
SCHEDULE P - PART 1L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH
(000 Omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
1 -------------------------------- ----------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
Which Expense Payments
Premiums Were ------------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... X X X X X X X X X X X X 0 0 0 0
2. 1992..... 0 0 0 0 0 0 0
3. 1993..... 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------
4. Totals .. X X X X X X X X X X X X 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 -----------------------------------------
Years 9 10 11 12
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 X X X X
2. 1992..... 0 0 0 X X X X
3. 1993..... 0 0 0 X X X X
- -----------------------------------------------------------------------------------
4. Totals .. 0 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- --------------------------------------------------
Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were --------------------- ------------------------- --------------------- ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... 0 0 0 0 0 0 0 0
2. 1992..... 0 0 0 0 0 0 0 0
3. 1993..... 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals... 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expense and Expenses Direct and
Incurred Anticipated Payment Unpaid Assumed
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0 0
2. 1992..... 0 0 0 0
3. 1993..... 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals... 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ---------------------------------- -------------------------------------- --------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- ---------------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1992..... 0 0 0 0.0 0.0 0.0 0 0
3. 1993..... 0 0 0 0.0 0.0 0.0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals... X X X X X X X X X X X X X X X X X X X X X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
<TABLE>
<CAPTION>
1 Net Balance Sheet Reserves
Years After Discount
Which 33 ---------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- ----------------------------------------------------------------
<S> <C> <C> <C>
1. Prior.... X X X X 0 0
2. 1992..... 0.0 0 0
3. 1993..... 0.0 0 0
- ----------------------------------------------------------------
4. Totals... X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
75
<PAGE> 15
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 1M - INTERNATIONAL
(000 omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
--------------------------- ----------------------------------------------------------
Allocated Loss
1 Loss Payments Expense Payments
Years --------------- ----------------
in Which 9
Premiums Were 2 3 4 5 6 7 8 Salvage
Earned and Direct Direct and
Losses Were and Net and Direct Subrogation
Incurred Assumed Ceded (2 - 3) Assumed Ceded and Assumed Ceded Received
- --------------------------------------------------------------------------------------------------------------
<S> <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
2. 1984 . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . 0 0 0 0 0 0 0 0
4. 1986 . . . . 0 0 0 0 0 0 0 0
5. 1987 . . . . 0 0 0 0 0 0 0 0
6. 1988 . . . . 0 0 0 0 0 0 0 0
7. 1989 . . . . 0 0 0 0 0 0 0 0
8. 1990 . . . . 0 0 0 0 0 0 0 0
9. 1991 . . . . 0 0 0 0 0 0 0 0
10. 1992 . . . . 0 0 0 0 0 0 0 0
11. 1993 . . . . 2,165 0 2,165 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
12. Totals . . . X X X X X X X X X X X X 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION> Loss and Loss
1 Expense Payments
Years -------------------------- 12
in Which 10 11 Number of
Premiums Were Unallocated Total Claims
Earned and Loss Net Paid Reported -
Losses Were Expense (5 - 6 + 7 Direct and
Incurred Payments - 8 + 10) Assumed
- ------------------------------------------------------------
<S> <C> <C> <C>
1. 1984 . . . . 0 0 X X X X
2. 1984 . . . . 0 0 X X X X
3. 1985 . . . . 0 0 X X X X
4. 1986 . . . . 0 0 X X X X
5. 1987 . . . . 0 0 X X X X
6. 1988 . . . . 0 0 X X X X
7. 1989 . . . . 0 0 X X X X
8. 1990 . . . . 0 0 X X X X
9. 1991 . . . . 0 0 X X X X
10. 1992 . . . . 0 0 X X X X
11. 1993 . . . . 0 0 X X X X
- ------------------------------------------------------------
12. Totals . . . 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
Losses Unpaid Allocated Loss Expenses Unpaid
1 --------------------------------------------- --------------------------------------------------
Years
in Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ----------------------- ----------------------- --------------------- ------------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior. . . . 0 0 0 0 0 0 0 0
2. 1984 . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . 0 0 0 0 0 0 0 0
4. 1986 . . . . 0 0 0 0 0 0 0 0
5. 1987 . . . . 0 0 0 0 0 0 0 0
6. 1988 . . . . 0 0 0 0 0 0 0 0
8. 1990 . . . . 0 0 0 0 0 0 0 0
9. 1991 . . . . 0 0 0 0 0 0 0 0
10. 1992 . . . . 0 0 0 0 0 0 0 0
11. 1993 . . . . 0 0 1,299 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
12. Totals . . . 0 0 1,299 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding-
Losses Were Subrogation Expenses and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior. . . . 0 0 0 0
2. 1984 . . . . 0 0 0 0
3. 1985 . . . . 0 0 0 0
4. 1986 . . . . 0 0 0 0
5. 1987 . . . . 0 0 0 0
6. 1988 . . . . 0 0 0 0
7. 1989 . . . . 0 0 0 0
8. 1990 . . . . 0 0 0 0
9. 1991 . . . . 0 0 0 0
10. 1992 . . . . 0 0 0 0
11. 1993 . . . . 0 0 1,299 0
- ----------------------------------------------------------------------------------
12. Totals . . . 0 0 1,299 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ---------------------------- ------------------------------- -----------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net* and Assumed Ceded Net Loss Expense
- -------------------------------------------------------------------------------------------------------
<S> <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
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 1,299 60.0 0.0 60.0 0 0
- -------------------------------------------------------------------------------------------------------
12. Totals . . . X X X X X X X X X X X X X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
Net Balance Sheet Reserves
1 After Discount
Years -------------------------
in Which 33 34 35
Premiums Were Inter-Company
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- ------------------------------------------------------------
<S> <C> <C> <C>
1. Prior. . . . X X X X 0 0
2. 1984 . . . . 0.0 0 0
3. 1985 . . . . 0.0 0 0
4. 1986 . . . . 0.0 0 0
5. 1987 . . . . 0.0 0 0
6. 1988 . . . . 0.0 0 0
7. 1989 . . . . 0.0 0 0
8. 1990 . . . . 0.0 0 0
9. 1991 . . . . 0.0 0 0
10. 1992 . . . . 0.0 0 0
11. 1993 . . . . 0.0 1,299 0
- ------------------------------------------------------------
12. Totals . . . X X X X 1,299 0
</TABLE>
*Net = (25-26) = (11+23)
76
<PAGE> 16
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS INSURANCE COMPANY
------------------------------
(Name)
SCHEDULE P - PART 1N - REINSURANCE A
(000 omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
---------------------------- ------------------------------------
1 Loss Payments Allocated Loss
Years ------------- Expense Payments
Which ---------------- 9
Premiums Were 2 3 4 5 6 Salvage
Earned and Direct 7 8 and
Losses Were and Net Direct Direct Subrogation
Incurred Assumed Ceded (2 - 3) and Assumed Ceded and Assumed Ceded Received
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 9,139 0 9,139 890 0 70 0 0
2. 1989 . . . . 2,404 20 2,384 978 0 0 0 0
3. 1990 . . . . 480 0 480 749 0 0 0 0
4. 1991 . . . . 13,310 0 13,310 2,934 0 0 0 0
5. 1992 . . . . 8,885 1,269 7,616 13,133 0 67 0 0
6. 1993 . . . . 24,260 285 23,975 1,336 0 (25) 0 0
- -----------------------------------------------------------------------------------------------------------------
7. Totals . . . X X X X X X X X X X X X 20,020 0 112 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 -----------------------------------
Years 10 11 12
Which Number of
Premiums Were Unallocated Total Claims
Earned and Loss Net Paid Reported -
Losses Were Expense (5 - 6 + 7 Direct and
Incurred Payments - 8 + 10) Assumed
- ----------------------------------------------------------
<S> <C> <C> <C>
1. 1988 . . . . 6 966 X X X X
2. 1989 . . . . 4 982 X X X X
3. 1990 . . . . 7 756 X X X X
4. 1991 . . . . 25 2,959 X X X X
5. 1992 . . . . 123 13,323 X X X X
6. 1993 . . . . 41 1,352 X X X X
- ----------------------------------------------------------
7. Totals . . . 206 20,338 X X X X
</TABLE>
NOTE: Report cumulative amounts paid or received for specific years. Report
loss payments net of salvage and subrogation received.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ------------------------------------ -------------------------------------
Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ---------- ----------- ---------- -----------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 7 0 0 0 0 0 0 0
2. 1989 . . . . 36 0 172 0 0 0 0 0
3. 1990 . . . . 34 0 275 0 0 0 0 0
4. 1991 . . . . 167 0 4,885 0 0 0 0 0
5. 1992 . . . . 408 0 2,139 0 0 0 0 0
6. 1993 . . . . 127 0 9,877 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
7. Totals . . . 779 0 17,348 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding-
Losses Were Subrogation Expense and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. 1988 . . . . 0 0 7 X X X X
2. 1989 . . . . 0 1 209 X X X X
3. 1990 . . . . 0 1 310 X X X X
4. 1991 . . . . 0 3 5,055 X X X X
5. 1992 . . . . 0 7 2,554 X X X X
6. 1993 . . . . 0 2 10,006 X X X X
- -----------------------------------------------------------------------------
7. Totals . . . 0 14 18,141 X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ------------------------------ -------------------------------- -------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net* and Assumed Ceded Net Loss Expense
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 973 0 973 10.6 0.0 10.6 0 0
2. 1989 . . . . 1,191 0 1,191 49.5 0.0 50.0 0 0
3. 1990 . . . . 1,066 0 1,066 221.1 0.0 222.1 0 0
4. 1991 . . . . 8,014 0 8,014 60.2 0.0 60.2 0 0
5. 1992 . . . . 15,877 0 15,877 178.7 0.0 208.5 0 0
6. 1993 . . . . 11,358 0 11,358 46.8 0.0 47.4 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
</TABLE>
<TABLE>
<CAPTION>
Net Balance Sheet Reserves
1 After Discount
Years -------------------------
Which 33 34 35
Premiums Were Inter-Company
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- ----------------------------------------------------------
<S> <C> <C> <C>
1. 1988 . . . . 0.0 7 0
2. 1989 . . . . 0.0 208 1
3. 1990 . . . . 0.0 309 1
4. 1991 . . . . 0.0 5,052 3
5. 1992 . . . . 0.0 2,547 7
6. 1993 . . . . 0.0 10,004 2
- ----------------------------------------------------------
7. Total . . . 0.0 18,127 14
</TABLE>
*Net = (25-26) = (11+23)
SCHEDULE P - PART 10 - REINSURANCE B
(000 omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
-------------------------------------- -----------------------------------------------
1 Loss Payments Allocated Loss
Years ------------- Expense Payments
Which ------------------- 9
Premiums Were 2 3 4 Salvage
Earned and Direct 5 6 7 8 and
Losses Were and Net Direct Direct Subrogation
Incurred Assumed Ceded (2 - 3) and Assumed Ceded and Assumed Ceded Received
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 1,016 0 1,016 538 0 0 0 0
2. 1989 . . . . 5,851 60 5,791 558 0 1 0 0
3. 1990 . . . . 9,957 0 9,957 454 0 8 0 0
4. 1991 . . . . 14,633 0 14,633 377 0 812 0 0
5. 1992 . . . . 50,625 5,249 45,376 4,993 2,317 19 0 0
6. 1993 . . . . 46,897 9,394 37,503 1,224 461 2 0 0
- -----------------------------------------------------------------------------------------------------------------
7. Totals . . . X X X X X X X X X X X X 8,144 2,778 842 0 0
</TABLE>
<TABLE>
<CAPTION> Loss and Loss Expense Payments
1 --------------------------------
Years 10 11 12
Which Number of
Premiums Were Unallocated Total Claims
Earned and Loss Net Paid Reported -
Losses Were Expense (5 - 6 + 7) Direct and
Incurred Payments - 8 + 10 Assumed
- --------------------------------------------------------------
<S> <C> <C> <C>
1. 1988 . . . . 2 540 X X X X
2. 1989 . . . . 2 561 X X X X
3. 1990 . . . . 4 466 X X X X
4. 1991 . . . . 28 1,217 X X X X
5. 1992 . . . . 33 2,728 X X X X
6. 1993 . . . . 51 816 X X X X
- --------------------------------------------------------------
7. Totals . . . 120 6,328 X X X X
</TABLE>
Note: Report cumulative amounts paid or received for specific years.
Report loss payments net of salvage and subrogation received.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years --------------------------------- -------------------------------------------------
Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ---------- ----------- ---------- -----------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 23 0 250 0 0 0 0 0
2. 1989 . . . . 46 0 2,750 0 0 0 0 0
3. 1990 . . . . 172 0 5,000 0 0 0 0 0
4. 1991 . . . . 5,326 0 4,000 0 0 0 0 0
5. 1992 . . . . 2,347 0 28,286 6,320 0 0 0 0
6. 1993 . . . . 5,247 415 39,129 11,200 1 0 0 0
- --------------------------------------------------------------------------------------------------------------------------
7. Totals . . . 13,161 415 79,415 17,520 1 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 24
Which 21 22 23 Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expense and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. 1988 . . . . 0 0 273 X X X X
2. 1989 . . . . 0 1 2,797 X X X X
3. 1990 . . . . 0 3 5,175 X X X X
4. 1991 . . . . 0 85 9,411 X X X X
5. 1992 . . . . 0 37 24,350 X X X X
6. 1993 . . . . 0 84 32,846 X X X X
- ------------------------------------------------------------------------------
7. Totals . . . 0 210 74,852 X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were --------------------------- --------------------------------- -------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net* and Assumed Ceded Net Loss Expense
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 813 0 813 80.0 0.0 80.0 0 0
2. 1989 . . . . 3,358 0 3,358 57.4 0.0 58.0 0 0
3. 1990 . . . . 5,641 0 5,641 56.7 0.0 56.7 0 0
4. 1991 . . . . 10,628 0 10,628 72.6 0.0 72.6 0 0
5. 1992 . . . . 35,715 8,637 27,078 70.5 164.5 59.7 0 0
6. 1993 . . . . 45,738 12,076 33,662 97.5 128.6 89.8 0 0
- -----------------------------------------------------------------------------------------------------------
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 0 0
</TABLE>
<TABLE>
<CAPTION>
Net Balance Sheet Reserves
1 After Discount
Years --------------------------
Which 33
Premiums Were Inter-Company 34 35
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- --------------------------------------------------------
<S> <C> <C> <C>
1. 1988 . . . . 0.0 273 0
2. 1989 . . . . 0.0 2,796 1
3. 1990 . . . . 0.0 5,172 3
4. 1991 . . . . 0.0 9,326 85
5. 1992 . . . . 0.0 24,313 37
6. 1993 . . . . 0.0 32,761 85
- --------------------------------------------------------
7. Totals . . . X X X X 74,641 211
</TABLE>
*Net = (25 - 26) = (11 + 23)
77
<PAGE> 17
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 1P - REINSURANCE C
(000 omitted)
<TABLE>
<CAPTION>
1 Loss and Loss
Expense Payments
Premiums Earned ---------------------------------------------------------------
Years ---------------------------- Loss Payments Allocated Loss
Which 2 3 4 -------------------- Expense Payments 9
Premiums Were --------------------- Salvage
Earned and Direct 5 6 7 8 and
Losses Were and Net Direct Direct Subrogation
Incurred Assumed Ceded (2 - 3) and Assumed Ceded and Assumed Ceded Received
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 0 0 0 0 0
2. 1989 . . . . 0 0 0 0 0 0 0 0
3. 1990 . . . . 0 0 0 0 0 0 0 0
4. 1991 . . . . 0 0 0 0 0 0 0 0
5. 1992 . . . . 0 0 0 0 0 0 0 0
6. 1993 . . . . 0 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------
7. Totals . . . X X X X X X X X X X X X 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss
Expense Payments
-------------------------------------------
1 10 11 12
Years
Which Number of
Premiums Were Unallocated Total Claims
Earned and Loss Net Paid Reported -
Losses Were Expense (5 - 6 + 7 Direct and
Incurred Payments - 8 + 10) Assumed
- --------------------------------------------------------------------
<S> <C> <C> <C>
1. 1988 . . . . 0 0 X X X X
2. 1989 . . . . 0 0 X X X X
3. 1990 . . . . 0 0 X X X X
4. 1991 . . . . 0 0 X X X X
5. 1992 . . . . 0 0 X X X X
6. 1993 . . . . 0 0 X X X X
- --------------------------------------------------------------------
7. Totals . . . 0 0 X X X X
</TABLE>
Note: Report cumulative amounts paid or received for specific years.
Report loss payments net of salvage and subrogation received.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ------------------------------------------------ -------------------------------------------------
Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ---------------------- ---------------------- ---------------------- ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 0 0 0 0 0
2. 1989 . . . . 0 0 0 0 0 0 0 0
3. 1990 . . . . 0 0 0 0 0 0 0 0
4. 1991 . . . . 0 0 0 0 0 0 0 0
5. 1992 . . . . 0 0 0 0 0 0 0 0
6. 1993 . . . . 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
7. Totals . . . 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding-
Losses Were Subrogation Expenses and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 X X X X
2. 1989 . . . . 0 0 0 X X X X
3. 1990 . . . . 0 0 0 X X X X
4. 1991 . . . . 0 0 0 X X X X
5. 1992 . . . . 0 0 0 X X X X
6. 1993 . . . . 0 0 0 X X X X
- --------------------------------------------------------------------------------
7. Totals . . . 0 0 0 X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ------------------------------- -------------------------------- -----------------
Earned and 25 28 32
Losses Were Direct 26 27 Direct 29 30 31 Loss
Incurred and Assumed Ceded Net* and Assumed Ceded Net Loss Expense
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 0.0 0.0 0.0 0 0
2. 1989 . . . . 0 0 0 0.0 0.0 0.0 0 0
3. 1990 . . . . 0 0 0 0.0 0.0 0.0 0 0
4. 1991 . . . . 0 0 0 0.0 0.0 0.0 0 0
5. 1992 . . . . 0 0 0 0.0 0.0 0.0 0 0
6. 1993 . . . . 0 0 0 0.0 0.0 0.0 0 0
- -----------------------------------------------------------------------------------------------------------------
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 0 0
</TABLE>
<TABLE>
<CAPTION>
Net Balance Sheet Reserves
1 After Discount
Years -------------------------
Which 33 34 35
Premiums Were Inter-Company
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- -----------------------------------------------------------------
<S> <C> <C> <C>
1. 1988 . . . . 0.0 0 0
2. 1989 . . . . 0.0 0 0
3. 1990 . . . . 0.0 0 0
4. 1991 . . . . 0.0 0 0
5. 1992 . . . . 0.0 0 0
6. 1993 . . . . 0.0 0 0
- -----------------------------------------------------------------
7. Totals . . . X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
SCHEDULE P - PART 1Q - REINSURANCE D
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
----------------------------- ---------------------------------------------------------------
Years Loss Payments Allocated Loss 9
Which 2 3 4 ------------- Expense Payments
Premiums Were ---------------- Salvage
Earned and Direct 5 6 7 8 and
Losses Were and Net Direct Direct Subrogation
Incurred Assumed Ceded (2 - 3) and Assumed Ceded and Assumed Ceded Received
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior. . . . X X X X X X X X X X X X 121 0 3 0 0
2. 1984 . . . . 3,574 588 2,986 4,193 1,079 194 0 0
3. 1985 . . . . 6,714 634 6,080 4,917 858 30 0 0
4. 1986 . . . . 19,205 1,898 17,307 3,778 0 0 0 0
5. 1987 . . . . 18,799 2,762 16,037 3,547 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------
6. Totals . . . X X X X X X X X X X X X 16,556 1,937 230 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense
Payments
1 --------------------------
Years 10 11 12
Which Number of
Premiums Were Unallocated Total Claims
Earned and Loss Net Paid Reported -
Losses Were Expense (5 - 6 + 7 Direct and
Incurred Payments - 8 + 10) Assumed
- -----------------------------------------------------------------
<S> <C> <C> <C>
1. 1988 . . . . 1 125 X X X X
2. 1989 . . . . 63 3,371 X X X X
3. 1990 . . . . 22 4,111 X X X X
4. 1991 . . . . 7 3,786 X X X X
5. 1992 . . . . 79 3,628 X X X X
- -----------------------------------------------------------------
6. Totals . . . 172 15,021 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ------------------------------------------------ -------------------------------------------------
Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ---------------------- ---------------------- ----------------------- ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior. . . . 1,606 1,551 0 0 0 0 0 0
2. 1984 . . . . 469 9 0 0 0 0 0 0
3. 1985 . . . . 280 183 0 0 0 0 0 0
4. 1986 . . . . 126 0 67 0 0 0 0 0
5. 1987 . . . . 208 0 200 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------------
6. Totals . . . 2,689 1,743 267 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding-
Losses Were Subrogation Expenses and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . 0 26 81 X X X X
2. 1984 . . . . 0 7 467 X X X X
3. 1985 . . . . 0 4 101 X X X X
4. 1986 . . . . 0 2 195 X X X X
5. 1987 . . . . 0 3 411 X X X X
- -----------------------------------------------------------------------------------
6. Totals . . . 0 42 1,255 X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were -------------------------------- -------------------------------- -----------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net* and Assumed Ceded Net Loss Expense
- -------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1984 . . . . 4,926 1,088 3,838 137.8 185.0 128.5 0 0
3. 1985 . . . . 5,253 1,041 4,212 78.2 164.2 69.3 0 0
4. 1986 . . . . 3,981 0 3,981 20.7 0.0 23.0 0 0
5. 1987 . . . . 4,039 0 4,039 21.5 0.0 25.0 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 0 0
</TABLE>
<TABLE>
<CAPTION>
1 Net Balance Sheet Reserves
Years 33 After Discount
Which -------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- -------------------------------------------------------------------
<S> <C> <C> <C>
1. Prior . . . 0.0 55 26
2. 1984 . . . . 0.0 460 7
3. 1985 . . . . 0.0 97 4
4. 1986 . . . . 0.0 193 2
5. 1987 . . . . 0.0 408 3
- -------------------------------------------------------------------
6. Totals . . . X X X X 1,213 42
</TABLE>
*Net = (25 - 26) = (11 + 23)
78
<PAGE> 18
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 1R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
(000 omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
1 ----------------------------------- ------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were ----------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2-3) Direct Ceded Direct
Incurred Assumed and Assumed and Assumed Ceded
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . XXXX XXXX XXXX 212 0 50 0
2. 1984 . . . 4,194 634 3,560 10,470 5,710 839 167
3. 1985 . . . 7,655 946 6,709 9,627 6,590 3,516 612
4. 1986 . . . 10,604 895 9,709 6,823 334 188 7
5. 1987 . . . 13,910 382 13,528 3,572 23 99 0
6. 1988 . . . 10,654 899 9,755 782 0 66 0
7. 1989 . . . 9,691 2,230 7,461 1,492 0 28 1
8. 1990 . . . 3,002 1,585 1,417 1,685 650 129 7
9. 1991 . . . 10,069 1,612 8,457 500 421 0 0
10. 1992 . . . 5,084 1,460 3,624 0 0 0 0
11. 1993 . . . 3,304 1,347 1,957 0 0 0 0
-------------------------------------------------------------------------------------------------------------------
12. Totals . . XXXX XXXX XXXX 35,163 13,728 4,915 794
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 ---------------------------------------------- 12
9 10 11
Years
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . 0 1 263 XXXX
2. 1984 . . . 0 66 5,498 0
3. 1985 . . . 0 100 6,041 0
4. 1986 . . . 0 21 6,691 0
5. 1987 . . . 0 55 3,703 0
6. 1988 . . . 0 41 889 0
7. 1989 . . . 0 97 1,616 0
8. 1990 . . . 0 39 1,196 0
9. 1991 . . . 0 17 96 0
10. 1992 . . . 0 8 8 0
11. 1993 . . . 0 4 4 0
-------------------------------------------------------------------------------------
12. Totals . . 0 449 26,005 XXXX
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ------------------------------------------- -------------------------------------------
in Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were -------------------- ------------------- -------------------- --------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 317 103 2,565 2,065 24 0 0 0
2. 1984 . . . . . 499 434 1,894 1,394 1 1 0 0
3. 1985 . . . . . 1,234 238 2,226 726 58 58 0 0
4. 1986 . . . . . 1,111 0 2,339 339 0 0 0 0
5. 1987 . . . . . 701 0 3,809 13 0 0 0 0
6. 1988 . . . . . 919 0 3,919 90 3 0 0 0
7. 1989 . . . . . 274 2 3,006 392 2 0 0 0
8. 1990 . . . . . 475 29 3,367 511 1 0 0 0
9. 1991 . . . . . 0 0 6,414 600 33 6 0 0
10. 1992 . . . . . 500 95 2,932 619 0 0 0 0
11. 1993 . . . . . 0 0 1,977 277 0 0 0 0
-----------------------------------------------------------------------------------------------------------------
12. Totals . . . . 6,030 901 34,448 7,026 122 65 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 0 5 743 0
2. 1984 . . . . . 0 8 573 0
3. 1985 . . . . . 0 20 2,516 0
4. 1986 . . . . . 0 18 3,129 0
5. 1987 . . . . . 0 11 4,508 0
6. 1988 . . . . . 0 15 4,766 0
7. 1989 . . . . . 0 4 2,892 0
8. 1990 . . . . . 0 8 3,311 0
9. 1991 . . . . . 0 0 5,841 0
10. 1992 . . . . . 0 8 2,726 0
11. 1993 . . . . . 0 0 1,700 0
----------------------------------------------------------------------------------------------
12. Totals . . . . 0 97 32,705 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ----------------------------- ------------------------------- ----------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . XXXX XXXX XXXX XXXX XXXX XXXX 0 0
2. 1984 . . . . . 13,777 7,706 6,071 328.5 1,215.5 170.5 0 0
3. 1985 . . . . . 16,781 8,224 8,557 219.2 869.3 127.5 0 0
4. 1986 . . . . . 10,500 680 9,820 99.0 76.0 101.1 0 0
5. 1987 . . . . . 8,247 36 8,211 59.3 9.4 60.7 0 0
6. 1988 . . . . . 5,745 90 5,655 53.9 10.0 58.0 0 0
7. 1989 . . . . . 4,903 395 4,508 50.6 17.7 60.4 0 0
8. 1990 . . . . . 5,704 1,197 4,507 190.0 75.5 318.1 0 0
9. 1991 . . . . . 6,964 1,027 5,937 69.2 63.7 70.2 0 0
10. 1992 . . . . . 3,448 714 2,734 67.8 48.9 75.4 0 0
11. 1993 . . . . . 1,981 277 1,704 60.0 20.6 87.1 0 0
------------------------------------------------------------------------------------------------------------
12. Totals . . . . XXXX XXXX XXXX XXXX XXXX XXXX 0 0
</TABLE>
<TABLE>
<CAPTION>
1 Net Balance Sheet Reserves
Years After Discount
in Which 33 -----------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling
Losses Were Participation Losses Loss Expenses
Incurred Percentage Unpaid Unpaid
-------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Prior . . . . . XXXX 714 29
2. 1984 . . . . . 0.0 565 8
3. 1985 . . . . . 0.0 2,496 20
4. 1986 . . . . . 0.0 3,111 18
5. 1987 . . . . . 0.0 4,497 11
6. 1988 . . . . . 0.0 4,748 18
7. 1989 . . . . . 0.0 2,886 6
8. 1990 . . . . . 0.0 3,302 9
9. 1991 . . . . . 0.0 5,814 27
10. 1992 . . . . . 0.0 2,718 8
11. 1993 . . . . . 0.0 1,700 0
-------------------------------------------------------------------------------
12. Totals . . . . XXXX 32,551 154
</TABLE>
*Net - (25 - 26) = (11 + 23)
79
<PAGE> 19
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 1R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
(000 omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
1 ----------------------------------- ------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were ----------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2-3) Direct Ceded Direct
Incurred Assumed and Assumed and Assumed Ceded
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . XXXX XXXX XXXX 0 0 0 0
2. 1984 . . . 0 0 0 0 0 0 0
3. 1985 . . . 0 0 0 0 0 0 0
4. 1986 . . . 0 0 0 0 0 0 0
5. 1987 . . . 0 0 0 0 0 0 0
6. 1988 . . . 0 0 0 0 0 0 0
7. 1989 . . . 0 0 0 0 0 0 0
8. 1990 . . . 0 0 0 0 0 0 0
9. 1991 . . . 0 0 0 0 0 0 0
10. 1992 . . . 0 0 0 0 0 0 0
11. 1993 . . . 0 0 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------
12. Totals . . XXXX XXXX XXXX 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 ---------------------------------------------- 12
9 10 11
Years
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . 0 0 0 XXXX
2. 1984 . . . 0 0 0 0
3. 1985 . . . 0 0 0 0
4. 1986 . . . 0 0 0 0
5. 1987 . . . 0 0 0 0
6. 1988 . . . 0 0 0 0
7. 1989 . . . 0 0 0 0
8. 1990 . . . 0 0 0 0
9. 1991 . . . 0 0 0 0
10. 1992 . . . 0 0 0 0
11. 1993 . . . 0 0 0 0
- --------------------------------------------------------------------------------------
12. Totals . . 0 0 0 XXXX
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years --------------------------------------- --------------------------------------------
in Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were ---------------- ------------------- -------------------- ---------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 0 0 0 0 0 0 0 0
2. 1984 . . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . . 0 0 0 0 0 0 0 0
4. 1986 . . . . . 0 0 0 0 0 0 0 0
5. 1987 . . . . . 0 0 0 0 0 0 0 0
6. 1988 . . . . . 0 0 0 0 0 0 0 0
7. 1989 . . . . . 0 0 0 0 0 0 0 0
8. 1990 . . . . . 0 0 0 0 0 0 0 0
9. 1991 . . . . . 0 0 0 0 0 0 0 0
10. 1992 . . . . . 0 0 0 0 0 0 0 0
11. 1993 . . . . . 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------
12. Totals . . . . 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . O O O O
2. 1984 . . . . . O O O O
3. 1985 . . . . . O O O O
4. 1986 . . . . . O O O O
5. 1987 . . . . . O O O O
6. 1988 . . . . . O O O O
7. 1989 . . . . . O O O O
8. 1990 . . . . . O O O O
9. 1991 . . . . . O O O O
10. 1992 . . . . . O O O O
11. 1993 . . . . . O O O O
- -----------------------------------------------------------------------------------------------
12. Totals . . . . O O O O
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ----------------------------- -------------------------------- ---------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . XXXX XXXX XXXX XXXX XXXX XXXX 0 0
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. Totals . . . . XXXX XXXX XXXX XXXX XXXX XXXX 0 0
</TABLE>
<TABLE>
<CAPTION>
1 Net Balance Sheet Reserves
Years After Discount
in Which 33 -----------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling
Losses Were Participation Losses Loss Expenses
Incurred Percentage Unpaid Unpaid
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Prior . . . . . XXXX 0 0
2. 1984 . . . . . 0.0 0 0
3. 1985 . . . . . 0.0 0 0
4. 1986 . . . . . 0.0 0 0
5. 1987 . . . . . 0.0 0 0
6. 1988 . . . . . 0.0 0 0
7. 1989 . . . . . 0.0 0 0
8. 1990 . . . . . 0.0 0 0
9. 1991 . . . . . 0.0 0 0
10. 1992 . . . . . 0.0 0 0
11. 1993 . . . . . 0.0 0 0
- --------------------------------------------------------------------------------
12. Totals . . . . XXXX 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
80
<PAGE> 20
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
..................................
(Name)
SCHEDULE - PART 2A - HOMEOWNERS/FARMOWNERS
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) Development**
Years in Which ------------------------------------------------------------------------------------------ ---------------------
Losses Were 2 3 4 5 6 7 8 9 10 11 12 13
Incurred 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 One Year Two Year
- ------------------------------------------------------------------------------------------------------------------------------------
<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..... XXXX 0 0 0 0 0 0 0 0 0 0 0
4. 1986..... XXXX XXXX 0 0 0 0 0 0 0 0 0 0
5. 1987..... XXXX XXXX XXXX 0 0 0 0 0 0 0 0 0
6. 1988..... XXXX XXXX XXXX XXXX 0 0 0 0 0 0 0 0
7. 1989..... XXXX XXXX XXXX XXXX XXXX 0 0 0 0 0 0 0
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX 0 0 0 0 0 0
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 0 0 0 0
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 0 0 XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 XXXX XXXX
- ------------------------------------------------------------------------------------------------------------------------------------
12. Totals 0 0
</TABLE>
<TABLE>
<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.... 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..... XXXX 0 0 0 0 0 0 0 0 0 0 0
4. 1986..... XXXX XXXX 2,199 1,693 2,139 2,092 2,092 2,092 2,092 2,092 0 0
5. 1987..... XXXX XXXX XXXX 2,159 1,843 1,842 2,063 2,074 2,074 2,061 (13) (13)
6. 1988..... XXXX XXXX XXXX XXXX 2,159 2,027 2,027 2,027 2,027 1,975 (52) (52)
7. 1989..... XXXX XXXX XXXX XXXX XXXX 2,231 1,981 1,981 1,181 1,117 (64) (864)
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX 1,189 1,189 1,189 1,113 (76) (76)
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX 627 627 529 (98) (98)
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 496 478 (18) XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 372 XXXX XXXX
- -----------------------------------------------------------------------------------------------------------------------------------
12. Totals (321) (1,103)
</TABLE>
<TABLE>
<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.... 27,863* 35,781 34,746 40,493 40,467 40,437 40,317 40,317 40,317 40,317 0 0
2. 1984..... 11,082 13,122 32,654 38,563 38,527 38,506 38,506 38,506 38,506 38,506 0 0
3. 1985..... XXXX 24,436 20,586 23,746 23,715 23,691 23,691 23,691 23,691 23,701 10 10
4. 1986..... XXXX XXXX 14,337 14,280 16,622 16,656 16,656 16,656 16,656 16,656 0 0
5. 1987..... XXXX XXXX XXXX 18,202 18,491 18,448 18,448 18,572 18,572 18,398 (174) (174)
6. 1988..... XXXX XXXX XXXX XXXX 22,146 22,204 22,204 22,204 20,716 20,199 (517) (2,005)
7. 1989..... XXXX XXXX XXXX XXXX XXXX 30,601 29,615 29,615 28,003 28,043 40 (1,572)
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX 12,430 12,430 12,430 11,753 (677) (677)
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX 13,425 13,425 12,501 (924) (924)
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 12,101 12,124 23 XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 10,250 XXXX XXXX
- ------------------------------------------------------------------------------------------------------------------------------------
12. Totals (2,219) (5,342)
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2D - WORKERS' COMPENSATION
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... 3,904* 5,993 6,637 8,630 8,623 8,667 8,667 8,667 8,893 8,893 0 226
2. 1984..... 3,683 3,697 6,379 8,447 8,443 8,438 8,438 8,438 8,738 8,738 0 300
3. 1985..... XXXX 6,218 6,075 6,803 6,799 6,795 6,795 6,795 7,795 7,795 0 1,000
4. 1986..... XXXX XXXX 4,126 4,819 4,819 4,821 4,821 4,821 6,181 6,181 0 1,360
5. 1987..... XXXX XXXX XXXX 1,995 1,993 1,993 1,993 1,996 1,996 1,996 0 0
6. 1988..... XXXX XXXX XXXX XXXX 1,278 1,277 1,277 1,277 1,033 1,033 0 (244)
7. 1989..... XXXX XXXX XXXX XXXX XXXX 4,345 4,345 4,345 4,345 4,345 0 0
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX 2,668 2,705 2,344 2,257 (87) (448)
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX 3,187 2,659 2,746 87 (441)
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 7,564 7,529 (35) XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 9,096 XXXX XXXX
- ------------------------------------------------------------------------------------------------------------------------------------
12. Totals (67) (6,222)
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2E - COMMERCIAL MULTIPLE PERIL
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... 8,550* 12,361 18,116 21,169 21,155 21,233 21,233 21,233 21,433 21,433 0 200
2. 1984..... 3,065 7,317 9,005 11,925 11,916 11,908 11,908 11,908 12,208 12,208 0 300
3. 1985..... XXXX 6,363 5,066 6,947 6,939 6,931 6,931 6,931 7,731 7,731 0 800
4. 1986..... XXXX XXXX 4,504 1,730 1,729 1,727 1,727 1,727 3,532 2,927 (605) 1,200
5. 1987..... XXXX XXXX XXXX 1,775 1,772 1,772 1,772 1,772 1,772 1,672 (100) (100)
6. 1988..... XXXX XXXX XXXX XXXX 453 450 656 656 656 545 (111) (111)
7. 1989..... XXXX XXXX XXXX XXXX XXXX 3,775 5,775 5,775 5,320 5,020 (300) (755)
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX 4,301 4,301 3,723 3,399 (324) (902)
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX 1,474 1,166 1,213 47 (261)
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 708 1,822 1,114 XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 8,056 XXXX XXXX
- -----------------------------------------------------------------------------------------------------------------------------------
12. Totals (279) 371
</TABLE>
* Reported reserves only. Subsequent development relates only to subsequent
payments and reserves.
**Current year less first or second prior year, showing (redundant) or adverse.
81
<PAGE> 21
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
<TABLE>
<CAPTION>
SCHEDULE P - PART 2F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
--------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... 552* 359 887 1,499 1,950 1,950 1,908 2,116
2. 1984..... 369 345 353 804 804 802 802 802
3. 1985..... XXXX 254 263 703 703 700 700 700
4. 1986..... XXXX XXXX 181 290 290 290 290 290
5. 1987..... XXXX XXXX XXXX 906 1,680 1,680 1,750 2,118
6. 1988..... XXXX XXXX XXXX XXXX 1,497 1,497 1,750 2,592
7. 1989..... XXXX XXXX XXXX XXXX XXXX 1,551 1,551 2,746
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX 3,416 3,503
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX 542
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
- ----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated
Expenses Reported at
Year End (000 omitted) Development**
Years in Which ----------------------------- -----------------
Losses Were 10 11 12 13
Incurred 1992 1993 One Year Two Year
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 2,116 2,116 0 0
2. 1984..... 902 902 0 100
3. 1985..... 800 800 0 100
4. 1986..... 390 390 0 100
5. 1987..... 2,118 2,118 0 0
6. 1988..... 2,592 2,592 0 0
7. 1989..... 2,747 2,746 0 0
8. 1990..... 3,503 3,516 13 13
9. 1991..... 542 612 70 70
10. 1992..... 338 414 76 XXXX
11. 1993..... XXXX 726 XXXX XXXX
- -----------------------------------------------------------------------
12. Totals 159 383
</TABLE>
<TABLE>
<CAPTION>
Schedule P - PART 2F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
----------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... *
2. 1984.....
3. 1985..... XXXX
4. 1986..... XXXX XXXX
5. 1987..... XXXX XXXX XXXX
6. 1988..... XXXX XXXX XXXX XXXX
7. 1989..... XXXX XXXX XXXX XXXX XXXX
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated
Expenses Reported at
Year End (000 omitted) Development**
Years in Which ----------------------------- -----------------
Losses Were 10 11 12 13
Incurred 1992 1993 One Year Two Year
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0
2. 1984..... 0 0 0
3. 1985..... 0 0 0
4. 1986..... 0 0 0
5. 1987..... 0 0 0
6. 1988..... 0 0 0
7. 1989..... 0 0 0
8. 1990..... 0 0 0
9. 1991..... 0 0 0
10. 1992..... 0 0 XXXX
11. 1993..... XXXX 0 XXXX XXXX
- --------------------------------------------------------------------------
12. Totals 0 0
</TABLE>
<TABLE>
SCHEDULE P - PART 2G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
-----------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... 0 * 0 0 0 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0 0
3. 1985..... XXXX 0 0 0 0 0 0 0
4. 1986..... XXXX XXXX 0 0 0 0 0 0
5. 1987..... XXXX XXXX XXXX 0 0 0 0 0
6. 1988..... XXXX XXXX XXXX XXXX 0 0 0 0
7. 1989..... XXXX XXXX XXXX XXXX XXXX 253 211 249
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX 0 2
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX 130
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
- ------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated
Expenses Reported at
Year End (000 omitted) Development**
Years in Which ----------------------------- -----------------
Losses Were 10 11 12 13
Incurred 1992 1993 One Year Two Year
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0 0
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 0 0 0
6. 1988..... 0 0 0 0
7. 1989..... 249 249 0 0
8. 1990..... 2 67 65 65
9. 1991..... 1,257 1,335 78 1,205
10. 1992..... 4,891 6,091 1,200 XXXX
11. 1993..... XXXX 9,011 XXXX XXXX
- -----------------------------------------------------------------------
12. Totals 1,343 1,270
</TABLE>
<TABLE>
SCHEDULE P - PART 2H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
--------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... 60,659* 71,647 99,824 126,847 131,959 128,100 128,160 128,160
2. 1984..... 27,720 38,010 54,089 77,506 77,580 77,347 77,347 77,347
3. 1985..... XXXX 60,977 45,951 44,147 41,728 42,612 42,612 42,612
4. 1986..... XXXX XXXX 59,810 58,019 58,287 57,887 57,887 57,887
5. 1987..... XXXX XXXX XXXX 75,462 75,345 75,382 75,564 75,564
6. 1988..... XXXX XXXX XXXX XXXX 55,830 55,800 55,698 55,698
7. 1989..... XXXX XXXX XXXX XXXX XXXX 56,389 56,373 56,373
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX 57,087 56,854
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX 55,411
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
- ----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses
Reported at Year End (000 omitted) Development**
Years in Which ---------------------------------------- -----------------
Losses Were 10 11 12 13
Incurred 1992 1993 One Year Two Year
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 139,022 140,022 1,000 11,862
2. 1984..... 82,847 84,347 1,500 7,000
3. 1985..... 49,907 52,407 2,500 9,795
4. 1986..... 66,887 70,852 3,965 12,965
5. 1987..... 75,564 75,564 0 0
6. 1988..... 51,698 51,698 0 (4,000)
7. 1989..... 46,373 46,373 0 (10,000)
8. 1990..... 50,668 50,481 (187) (6,373)
9. 1991..... 46,662 46,662 0 (8,749)
10. 1992..... 31,133 31,133 0 XXXX
11. 1993..... XXXX 39,126 XXXX XXXX
------------------------------------------------------------------------------
12. Totals 8,778 12,500
</TABLE>
<TABLE>
SCHEDULE P - PART 2H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
---------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... *
2. 1984.....
3. 1985..... XXXX
4. 1986..... XXXX XXXX
5. 1987..... XXXX XXXX XXXX
6. 1988..... XXXX XXXX XXXX XXXX
7. 1989..... XXXX XXXX XXXX XXXX XXXX
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses
Reported at Year End (000 omitted) Development**
Years in Which ----------------------------------------- ------------------
Losses Were 10 11 12 13
Incurred 1992 1993 One Year Two Year
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0
2. 1984..... 0 0 0
3. 1985..... 0 0 0
4. 1986..... 0 0 0
5. 1987..... 0 0 0
6. 1988..... 0 0 0
7. 1989..... 0 0 0
8. 1990..... 0 0 0
9. 1991..... 0 0 0
10. 1992..... 0 0 XXXX
11. 1993..... XXXX 0 XXXX XXXX
- ---------------------------------------------------------------------------
12. Totals 0 0
</TABLE>
* Reported reserves only, Subsequent development relates only to subsequent
payments and reserves.
**Current year less first or second prior year, showing (redundant) or adverse.
82
<PAGE> 22
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
..................................
(Name)
SCHEDULE P - PART 2I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
------------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- -------------------------------------------------------------------------------------------------------------------
<S> <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 6,793 *
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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and Allocated
Expenses Reported at Year End
(000 omitted) Development**
------------------------------ ---------------------
1
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . 5,932 4,149 (1,783) (2,644)
2. 1992 . . . 7,315 9,107 1,792 X X X X
3. 1993 . . . X X X X 6,675 X X X X X X X X
--------- ------- -------
4. Totals 9 (2,644)
</TABLE>
SCHEDULE P - PART 2J - AUTO PHYSICAL DAMAGE
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
----------------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- -----------------------------------------------------------------------------------------------------------------------
<S> <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 699*
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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and Allocated
Expenses Reported at Year End
(000 omitted) Development**
----------------------------- -------------------------
1
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . 407 407 0 (292)
2. 1992 . . . 32 32 0 X X X X
3. 1993 . . . X X X X 0 X X X X X X X X
--------- --------- --------
4. Totals 0 (292)
</TABLE>
SCHEDULE P - PART 2K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAGE GUARANTY
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
-----------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- ------------------------------------------------------------------------------------------------------------------
<S> <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 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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and Allocated
Expenses Reported at Year End
(000 omitted) Development**
----------------------------- ----------------------
1
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . 0 0 0 0
2. 1992 . . . 0 0 0 X X X X
3. 1993 . . . X X X X 0 X X X X X X X X
--------- -------- --------
4. Totals 0 0
</TABLE>
SCHEDULE P - PART 2L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
-----------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- ------------------------------------------------------------------------------------------------------------------
<S> <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 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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and Allocated
Expenses Reported at Year End
(000 omitted) Development**
----------------------------- ----------------------
1
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . 0 0 0 0
2. 1992 . . . 0 0 0 X X X X
3. 1993 . . . X X X X 0 X X X X X X X X
--------- ------- -------
4. Totals 0 0
</TABLE>
SCHEDULE P - PART 2M - INTERNATIONAL
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
---------------------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 5,929 * 5,929 5,929 5,929 5,929 5,929 5,929 5,929
2. 1984 . . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . . X X X X 0 0 0 0 0 0 0
4. 1986 . . . . . X X X X X X X X 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
6. 1988 . . . . . X X X X X X X X X X X X X X X X 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
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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and Allocated
Expenses Reported at Year End
(000 omitted) Development**
----------------------------- ------------------
1
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 5,929 5,929 0 0
2. 1984 . . . . . 0 0 0 0
3. 1985 . . . . . 0 0 0 0
4. 1986 . . . . . 0 0 0 0
5. 1987 . . . . . 0 0 0 0
6. 1988 . . . . . 0 0 0 0
7. 1989 . . . . . 0 0 0 0
8. 1990 . . . . . 0 0 0 0
9. 1991 . . . . . 0 0 0 0
10. 1992 . . . . . 0 0 0 X X X X
11. 1993 . . . . . X X X X 1,299 X X X X X X X X
---------- -------- ---------
12. Totals 0 0
</TABLE>
* Reported reserves only. Subsequent development relates only to
subsequent payments and reserves.
** Current year less first or second prior year, showing (redundant) or
adverse.
83
<PAGE> 23
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 2N - REINSURANCE A
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
------------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- -------------------------------------------------------------------------------------------------------------------
<S> <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 1,168 991 991 1,714
2. 1989 . . . X X X X X X X X X X X X X X X X X X X X 1,851 1,851 1,186
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 353 1,091
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 9,983
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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and
Allocated Expenses Reported
at Year End (000 omitted) Development**
1 ------------------------- ----------------------
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. 1988 . . . 1,003 967 (36) (747)
2. 1989 . . . 1,186 1,186 0 0
3. 1990 . . . 1,091 1,058 (33) (33)
4. 1991 . . . 7,986 7,986 0 (1,997)
5. 1992 . . . 15,747 15,747 0 X X X X
6. 1993 . . . X X X X 11,315 X X X X X X X X
--------- ---------- ----------
7. Totals (69) (2,777)
</TABLE>
SCHEDULE P - PART 2O - REINSURANCE B
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
------------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- -------------------------------------------------------------------------------------------------------------------
<S> <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 168 39 39 898
2. 1989 . . . X X X X X X X X X X X X X X X X X X X X 4,498 4,498 4,498
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 6,472 6,472
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 7,215
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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and
Allocated Expenses Reported
at Year End (000 omitted) Development**
1 ------------------------- ----------------------
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. 1988 . . . 898 811 (87) (87)
2. 1989 . . . 3,498 3,355 (143) (1,143)
3. 1990 . . . 6,072 5,634 (438) (838)
4. 1991 . . . 8,780 10,515 1,735 3,300
5. 1992 . . . 28,216 27,008 (1,208) X X X X
6. 1993 . . . X X X X 33,527 X X X X X X X X
------ ---------- ---------
7. Totals (141) 1,232
</TABLE>
SCHEDULE P - PART 2P - REINSURANCE C
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
------------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- -------------------------------------------------------------------------------------------------------------------
<S> <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
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
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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and
Allocated Expenses Reported
at Year End (000 omitted) Development**
1 ------------------------- ---------------------
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. 1988 . . . 0 0 0 0
2. 1989 . . . 0 0 0 0
3. 1990 . . . 0 0 0 0
4. 1991 . . . 0 0 0 0
5. 1992 . . . 0 0 0 X X X X
6. 1993 . . . X X X X 0 X X X X X X X X
----------- --------- ---------
7. Totals 0 0
</TABLE>
SCHEDULE P - PART 2Q - REINSURANCE D
<TABLE>
<CAPTION>
Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
1 ------------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . 1,721 2,980 3,411 8,268 8,268 8,268 8,268 8,268
2. 1984 . . . 1,533 2,018 2,091 3,768 3,768 3,768 3,768 3,768
3. 1985 . . . X X X X 3,003 3,529 4,186 4,186 4,186 4,186 4,186
4. 1986 . . . X X X X X X X X 3,448 3,972 3,972 3,972 3,972 3,972
5. 1987 . . . X X X X X X X X X X X X 3,664 3,654 3,830 3,830 3,830
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and
Allocated Expenses Reported
at Year End (000 omitted) Development**
1 ------------------------- ----------------------
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . 8,268 8,268 0 0
2. 1984 . . . 3,768 3,768 0 0
3. 1985 . . . 4,186 4,186 0 0
4. 1986 . . . 3,972 3,972 0 0
5. 1987 . . . 3,830 3,957 127 127
---------- ------ ------
6. Totals 127 127
</TABLE>
SCHEDULE P - PART 2R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
1 -----------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 6,258* 8,641 9,417 14,584 16,472 13,123 13,123 13,123
2. 1984 . . . . . 874 2,396 4,289 4,913 4,757 4,913 4,913 4,913
3. 1985 . . . . . X X X X 2,976 5,255 6,554 8,875 7,924 7,924 7,924
4. 1986 . . . . . X X X X X X X X 6,028 7,297 6,978 7,370 7,370 3,730
5. 1987 . . . . . X X X X X X X X X X X X 9,539 9,601 9,539 9,357 9,357
6. 1988 . . . . . X X X X X X X X X X X X X X X X 9,859 6,860 6,962 6,962
7. 1989 . . . . . X X X X X X X X X X X X X X X X X X X X 5,601 5,617 5,617
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 4,460 4,460
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 2,945
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
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
</TABLE>
<TABLE>
Incurred Losses and
Allocated Expenses Reported
at Year End (000 omitted) Development**
1 ------------------------- ---------------------
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . 13,623 14,123 500 1,000
2. 1984 . . . . . 5,497 5,997 500 1,084
3. 1985 . . . . . 7,629 8,437 808 513
4. 1986 . . . . . 8,370 9,781 1,411 6,051
5. 1987 . . . . . 8,145 8,145 0 (1,212)
6. 1988 . . . . . 5,599 5,599 0 (1,363)
7. 1989 . . . . . 4,407 4,407 0 (1,210)
8. 1990 . . . . . 4,460 4,460 0 0
9. 1991 . . . . . 5,920 5,920 0 2,975
10. 1992 . . . . . 2,718 2,718 0 X X X X
11. 1993 . . . . . X X X X 1,700 X X X X X X X X
---------- -------- ---------
12. Totals 3,219 7,838
</TABLE>
SCHEDULE P - PART 2R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
<TABLE>
<CAPTION>
Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
1 ----------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . *
2. 1984 . . . . .
3. 1985 . . . . . X X X X
4. 1986 . . . . . X X X X X X X X
5. 1987 . . . . . X X X X 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
7. 1989 . . . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
Incurred Losses and
Allocated Expenses Reported
at Year End (000 omitted) Development**
1 ------------------------- ---------------------
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 0 0 0
2. 1984 . . . . . 0 0 0
3. 1985 . . . . . 0 0 0
4. 1986 . . . . . 0 0 0
5. 1987 . . . . . 0 0 0
6. 1988 . . . . . 0 0 0
7. 1989 . . . . . 0 0 0
8. 1990 . . . . . 0 0 0
9. 1991 . . . . . 0 0 0
10. 1992 . . . . . 0 0 X X X X
11. 1993 . . . . . X X X X 0 X X X X X X X X
---------- --------- ---------
12. Totals 0 0
</TABLE>
* Reported reserves only. Subsequent development relates only to
subsequent payments and reserves.
** Current year less first or second prior year, showing (redundant) or
adverse.
84
<PAGE> 24
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 3A - HOMEOWNERS/FARMOWNERS
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ----------------------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 000 0 0 0 0 0 0 0
2. 1984 . . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . . X X X X 0 0 0 0 0 0 0
4. 1986 . . . . . X X X X X X X X 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
6. 1988 . . . . . X X X X X X X X X X X X X X X X 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
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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and 12 13
Allocated Expenses at Year Number of Number of
1 End (000 Omitted) Claims Claims
Years in Which -------------------------- Closed Closed
Losses Were 10 11 With Loss Without
Incurred 1992 1993 Payment Loss Payment
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 0 0 0 0
2. 1984 . . . . . 0 0 0 0
3. 1985 . . . . . 0 0 0 0
4. 1986 . . . . . 0 0 0 0
5. 1987 . . . . . 0 0 0 0
6. 1988 . . . . . 0 0 0 0
7. 1989 . . . . . 0 0 0 0
8. 1990 . . . . . 0 0 0 0
9. 1991 . . . . . 0 0 0 0
10. 1992 . . . . . 0 0 0 0
11. 1993 . . . . . X X X X 0 0 0
</TABLE>
SCHEDULE P - PART 3B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ----------------------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 000 0 0 0 0 0 0 0
2. 1984 . . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . . X X X X 0 0 0 0 0 0 0
4. 1986 . . . . . X X X X X X X X 3 89 406 634 746 2,022
5. 1987 . . . . . X X X X X X X X X X X X 4 371 1,372 1,638 1,885
6. 1988 . . . . . X X X X X X X X X X X X X X X X 27 1,275 1,436 1,688
7. 1989 . . . . . X X X X X X X X X X X X X X X X X X X X 10 90 288
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 0 105
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
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
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
</TABLE>
SCHEDULE P - PART 3B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<TABLE>
<CAPTION>
Cumulative Paid Losses and 12 13
Allocated Expenses at Year Number of Number of
1 End (000 Omitted) Claims Claims
Years in Which -------------------------- Closed Closed
Losses Were 10 11 With Loss Without
Incurred 1992 1993 Payment Loss Payment
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 0 0 0 0
2. 1984 . . . . . 0 0 0 0
3. 1985 . . . . . 0 0 0 0
4. 1986 . . . . . 2,022 2,092 0 0
5. 1987 . . . . . 1,978 2,000 0 0
6. 1988 . . . . . 1,729 1,738 0 0
7. 1989 . . . . . 325 380 0 0
8. 1990 . . . . . 126 189 0 0
9. 1991 . . . . . 132 180 0 0
10. 1992 . . . . . 8 57 0 0
11. 1993 . . . . . X X X X 0 0 0
</TABLE>
SCHEDULE P - PART 3C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ----------------------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 000 9,619 18,721 25,800 31,241 36,770 38,294 39,770
2. 1984 . . . . . 499 3,798 12,930 22,346 29,793 34,956 38,506 38,506
3. 1985 . . . . . X X X X 828 4,621 9,907 16,032 21,757 23,691 23,691
4. 1986 . . . . . X X X X X X X X 31 751 2,718 4,928 15,275 15,871
5. 1987 . . . . . X X X X X X X X X X X X 31 2,487 11,451 13,843 16,798
6. 1988 . . . . . X X X X X X X X X X X X X X X X 178 11,408 13,157 16,390
7. 1989 . . . . . X X X X X X X X X X X X X X X X X X X X 90 1,824 11,727
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 664 3,318
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 138
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and 12 13
Allocated Expenses at Year Number of Number of
1 End (000 Omitted) Claims Claims
Years in Which -------------------------- Closed Closed
Losses Were 10 11 With Loss Without
Incurred 1992 1993 Payment Loss Payment
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 40,317 40,317 0 0
2. 1984 . . . . . 38,506 38,506 0 0
3. 1985 . . . . . 23,691 23,691 0 0
4. 1986 . . . . . 16,302 16,656 0 0
5. 1987 . . . . . 17,662 17,857 0 0
6. 1988 . . . . . 17,486 17,582 0 0
7. 1989 . . . . . 18,382 20,954 0 0
8. 1990 . . . . . 4,807 5,335 0 0
9. 1991 . . . . . 2,999 3,263 0 0
10. 1992 . . . . . 148 203 0 0
11. 1993 . . . . . X X X X 6 0 0
</TABLE>
SECTION P - PART 3D - WORKERS' COMPENSATION
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ----------------------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 000 1,215 2,162 3,656 4,889 5,748 6,269 7,594
2. 1984 . . . . . 111 725 1,567 2,816 3,627 4,743 7,971 8,438
3. 1985 . . . . . X X X X 164 480 1,108 1,978 2,749 5,588 6,795
4, 1986 . . . . . X X X X X X X X 0 33 102 206 489 4,484
5. 1987 . . . . . X X X X X X X X X X X X 0 0 0 0 12
6. 1988 . . . . . X X X X X X X X X X X X X X X X 0 66 112 121
7. 1989 . . . . . X X X X X X X X X X X X X X X X X X X X 472 882 897
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 875 877
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and 12 13
Allocated Expenses at Year Number of Number of
1 End (000 Omitted) Claims Claims
Years in Which -------------------------- Closed Closed
Losses Were 10 11 With Loss Without
Incurred 1992 1993 Payment Loss Payment
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 8,667 8,893 0 0
2. 1984 . . . . . 8,438 8,738 0 0
3. 1985 . . . . . 6,795 7,795 0 0
4. 1986 . . . . . 4,821 4,878 0 0
5. 1987 . . . . . 1,012 1,012 0 0
6. 1988 . . . . . 125 128 0 0
7. 1989 . . . . . 3,008 3,059 0 0
8. 1990 . . . . . 946 1,503 0 0
9. 1991 . . . . . 0 32 0 0
10. 1992 . . . . . 0 79 0 0
11. 1993 . . . . . X X X X 0 0 0
</TABLE>
SCHEDULE P - PART 3E - COMMERCIAL MULTIPLE PERIL
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ----------------------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 000 8,253 10,683 12,501 15,015 13,623 16,495 17,147
2. 1984 . . . . . 126 3,793 5,413 7,364 9,257 10,458 11,908 11,908
3. 1985 . . . . . X X X X 665 1,548 2,944 4,679 4,848 6,931 6,931
4. 1986 . . . . . X X X X X X X X 0 180 498 341 1,444 1,727
5. 1987 . . . . . X X X X X X X X X X X X 0 0 0 772 1,372
6. 1988 . . . . . X X X X X X X X X X X X X X X X 0 82 345 345
7. 1989 . . . . . X X X X X X X X X X X X X X X X X X X X 591 3,103 4,420
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 2,094 2,632
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and 12 13
Allocated Expenses at Year Number of Number of
1 End (000 Omitted) Claims Claims
Years in Which -------------------------- Closed Closed
Losses Were 10 11 With Loss Without
Incurred 1992 1993 Payment Loss Payment
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 20,008 21,433 0 0
2. 1984 . . . . . 11,908 12,208 0 0
3. 1985 . . . . . 6,931 7,331 0 0
4. 1986 . . . . . 1,727 1,727 0 0
5. 1987 . . . . . 1,372 1,372 0 0
6. 1988 . . . . . 345 345 0 0
7. 1989 . . . . . 4,420 4,420 0 0
8. 1990 . . . . . 2,623 2,599 0 0
9. 1991 . . . . . 216 540 0 0
10. 1992 . . . . . 0 311 0 0
11. 1993 . . . . . X X X X 2,847 0 0
</TABLE>
Note: Net of salvage and subrogation received.
85
<PAGE> 25
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 3F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000 0 0 38 1,433 1,489
2. 1984 . . . 0 0 93 415 519 634
3. 1985 . . . X X X X 0 11 552 552 1,066
4. 1986 . . . X X X X X X X X 0 0 0 0
5. 1987 . . . X X X X X X X X X X X X 0 0 0
6. 1988 . . . X 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 X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated
Expenses at Year End (000 omitted) 12 13
---------------------------------------------- Number of Number of
Years in Which Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
Payment Payment
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 1,672 1,788 1,908 2,116 0 0
2. 1984 . . . 802 802 802 902 0 0
3. 1985 . . . 700 700 700 800 0 0
4. 1986 . . . 285 290 290 390 0 0
5. 1987 . . . 500 1,855 1,880 1,880 0 0
6. 1988 . . . 0 1,855 1,855 1,855 0 0
7. 1989 . . . 31 1,886 1,991 1,992 0 0
8. 1990 . . . 4 1,691 1,691 1,691 0 0
9. 1991 . . . X X X X 0 0 0 0 0
10. 1992 . . . 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 0 0 0
</TABLE>
SCHEDULE P - PART 3F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000
2. 1984 . . .
3. 1985 . . . X X X X
4. 1986 . . . X X X X X X X X
5. 1987 . . . X X X X 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
7. 1989 . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated
Expenses at Year End (000 omitted) 12 13
---------------------------------------------- Number of Number of
Years in Which Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
Payment Payment
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0 0 0
2. 1984 . . . 0 0 0
3. 1985 . . . 0 0 0
4. 1986 . . . 0 0 0
5. 1987 . . . 0 0 0
6. 1988 . . . 0 0 0
7. 1989 . . . 0 0 0
8. 1990 . . . 0 0 0
9. 1991 . . . X X X X 0 0 0
10. 1992 . . . X X X X X X X X 0 0 0
11. 1993 . . . X X X X X X X X X X X X 0 0 0
</TABLE>
SCHEDULE P - PART 3G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000 0 0 0 0 0
2. 1984 . . . 0 0 0 0 0 0
3. 1985 . . . X X X X 0 0 0 0 0
4. 1986 . . . X X X X X X X X 0 0 0 0
5. 1987 . . . X X X X X X X X X X X X 0 0 0
6. 1988 . . . X 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 X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated 12 13
Expenses at Year End (000 omitted) Number of Number of
Years in Which --------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
Payment Payment
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0 0 0 0 X X X X X X X X
2. 1984 . . . 0 0 0 0 X X X X X X X X
3. 1985 . . . 0 0 0 0 X X X X X X X X
4. 1986 . . . 0 0 0 0 X X X X X X X X
5. 1987 . . . 0 0 0 0 X X X X X X X X
6. 1988 . . . 0 0 0 0 X X X X X X X X
7. 1989 . . . 211 211 211 211 X X X X X X X X
8. 1990 . . . 0 0 0 0 X X X X X X X X
9. 1991 . . . X X X X 0 453 1,237 X X X X X X X X
10. 1992 . . . X X X X X X X X 71 712 X X X X X X X X
11. 1993 . . . X X X X X X X X X X X X 267 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which -----------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000 1,669 36,896 51,852 76,055 99,352
2. 1984 . . . 595 5,277 17,517 30,908 47,324 67,719
3. 1985 . . . X X X X 463 4,544 12,342 27,637 43,045
4. 1986 . . . X X X X X X X X 154 1,492 7,351 8,135
5. 1987 . . . X X X X X X X X X X X X 300 2,578 8,600
6. 1988 . . . X X X X X X X X X X X X X X X X 1 116
7. 1989 . . . X X X X X X X X X X X X X X X X X X X X 964
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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated 12 13
Expenses at Year End (000 omitted) Number of Number of
Years in Which --------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
Payment Payment
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 111,865 120,395 123,102 136,751 0 0
2. 1984 . . . 77,347 77,347 77,347 82,847 0 0
3. 1985 . . . 42,612 42,612 42,612 49,907 0 0
4. 1986 . . . 39,011 47,908 53,845 58,266 0 0
5. 1987 . . . 16,728 27,727 44,907 48,736 0 0
6. 1988 . . . 7,036 14,262 19,031 22,340 0 0
7. 1989 . . . 4,924 15,222 21,516 29,791 0 0
8. 1990 . . . 729 3,899 16,391 23,335 0 0
9. 1991 . . . X X X X 2,476 10,970 13,679 0 0
10. 1992 . . . X X X X X X X X 432 108 0 0
11. 1993 . . . X X X X X X X X X X X X 0 0 0
</TABLE>
SCHEDULE P - PART 3H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which -----------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000
2. 1984 . . .
3. 1985 . . . X X X X
4. 1986 . . . X X X X X X X X
5. 1987 . . . X X X X 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
7. 1989 . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated 12 13
Expenses at Year End (000 omitted) Number of Number of
Years in Which ---------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
Payment Payment
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0 0 0
2. 1984 . . . 0 0 0
3. 1985 . . . 0 0 0
4. 1986 . . . 0 0 0
5. 1987 . . . 0 0 0
6. 1988 . . . 0 0 0
7. 1989 . . . 0 0 0
8. 1990 . . . 0 0 0
9. 1991 . . . X X X X 0 0 0
10. 1992 . . . X X X X X X X X 0 0 0
11. 1993 . . . X X X X X X X X X X X X 0 0 0
</TABLE>
Note: Net of salvage and subrogation received.
86
<PAGE> 26
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE GROUP
..............................
(NAME)
SCHEDULE P - PART 3I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which -------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X X X X X X X X X X X X X
2. 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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated Expenses 12 13
at Year End (000 omitted) Number of Number of
Years in Which ---------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
Payment Payment
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X 000 1,454 501 X X X X X X X X
2. 1992 . . . X X X X X X X X 1,976 5,795 X X X X X X X X
3. 1993 . . . X X X X X X X X X X X X 2,534 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3J - AUTO PHYSICAL DAMAGE
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which -----------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X X X X X X X X X X X X X
2. 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
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
</TABLE>
<TABLE>
<CAPTION>
12 13
Cumulative Paid Losses and Allocated Expenses Number of Number of
at Year End (000 omitted) Claims Claims
Years in Which -------------------------------------------------- Closed Closed
Losses Were 8 9 10 11 With Loss Without Loss
Incurred 1990 1991 1992 1993 Payment Payment
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X 000 118 199 0 0
2. 1992 . . . X X X X X X X X 0 0 0 0
3. 1993 . . . X X X X X X X X X X X X 0 0 0
</TABLE>
SCHEDULE P - PART 3K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAGE GUARANTY
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which -------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X X X X X X X X X X X X X
2. 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
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
</TABLE>
<TABLE>
<CAPTION>
12 13
Cumulative Paid Losses and Allocated Expenses Number of Number of
at Year End (000 omitted) Claims Claims
Years in Which ------------------------------------------------- Closed Closed
Losses Were 8 9 10 11 With Loss Without Loss
Incurred 1990 1991 1992 1993 Payment Payment
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X 000 0 0 X X X X X X X X
2. 1992 . . . X X X X X X X X 0 0 X X X X X X X X
3. 1993 . . . X X X X X X X X X X X X 0 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X X X X X X X X X X X X X
2. 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
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
</TABLE>
<TABLE>
<CAPTION>
12 13
Cumulative Paid Losses and Allocated Expenses Number of Number of
at Year End (000 omitted) Claims Claims
Years in Which --------------------------------------------------- Closed Closed
Losses Were 8 9 10 11 With Loss Without Loss
Incurred 1990 1991 1992 1993 Payment Payment
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X 000 0 0 X X X X X X X X
2. 1992 . . . X X X X X X X X 0 0 X X X X X X X X
3. 1993 . . . X X X X X X X X X X X X 0 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3M - INTERNATIONAL
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000 0 0 915 1,722 2,643
2. 1984 . . . 0 0 0 0 0 0
3. 1985 . . . X X X X 0 0 0 0 0
4. 1986 . . . X X X X X X X X 0 0 0 0
5. 1987 . . . X X X X X X X X X X X X 0 0 0
6. 1988 . . . X 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 X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
12 13
Cumulative Paid Losses and Allocated Expenses Number of Number of
at Year End (000 omitted) Claims Claims
Years in Which -------------------------------------------------- Closed Closed
Losses Were 8 9 10 11 With Loss Without Loss
Incurred 1990 1991 1992 1993 Payment Payment
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 3,422 6,882 5,929 5,929 X X X X X X X X
2. 1984 . . . 0 0 0 0 X X X X X X X X
3. 1985 . . . 0 0 0 0 X X X X X X X X
4. 1986 . . . 0 0 0 0 X X X X X X X X
5. 1987 . . . 0 0 0 0 X X X X X X X X
6. 1988 . . . 0 0 0 0 X X X X X X X X
7. 1989 . . . 0 0 0 0 X X X X X X X X
8. 1990 . . . 0 0 0 0 X X X X X X X X
9. 1991 . . . 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 0 0 X X X X X X X X
11. 1993 . . . X X X X X X X X X X X X 0 X X X X X X X X
</TABLE>
Note: Net of salvage and subrogation received.
87
<PAGE> 27
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 3N - REINSURANCE A
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted)
Years in Which ----------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. 1988 . . . X X X X X X X X X X X X X X X X 153 500
2. 1989 . . . X X X X X X X X X X X X X X X X X X X X 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
4. 1991 . . . X X X X X X X X X X X X X X X X X X X X X X X X
5. 1992 . . . X X X X X X X X X X X X X X X X X X X X X X X X
6. 1993 . . . X X X X X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated Expenses 12 13
at Year End (000 Omitted) Number of Number of
Years in Which --------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. 1988 . . . 737 1,010 994 960 X X X X X X X X
2. 1989 . . . 534 863 949 978 X X X X X X X X
3. 1990 . . . 0 621 724 749 X X X X X X X X
4. 1991 . . . X X X X 0 205 2,934 X X X X X X X X
5. 1992 . . . X X X X X X X X 9,249 13,200 X X X X X X X X
6. 1993 . . . X X X X X X X X X X X X 1,311 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3O - REINSURANCE B
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted)
Years in Which -----------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. 1988 . . . X X X X X X X X X X X X X X X X 17 17
2. 1989 . . . X X X X X X X X X X X X X X X X X X X X 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
4. 1991 . . . X X X X X X X X X X X X X X X X X X X X X X X X
5. 1992 . . . X X X X X X X X X X X X X X X X X X X X X X X X
6. 1993 . . . X X X X X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated Expenses 12 13
at Year End (000 Omitted) Number of Number of
Years in Which --------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. 1988 . . . 31 333 541 538 X X X X X X X X
2. 1989 . . . 6 419 468 559 X X X X X X X X
3. 1990 . . . 0 16 17 462 X X X X X X X X
4. 1991 . . . X X X X 584 (1,173) 1,189 X X X X X X X X
5. 1992 . . . X X X X X X X X 482 2,695 X X X X X X X X
6. 1993 . . . X X X X X X X X X X X X 765 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3P - REINSURANCE C
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted)
Years in Which -----------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- --------------------------------------------------------------------------------------------------
<S> <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
2. 1989 . . . X X X X X X X X X X X X X X X X X X X X 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
4. 1991 . . . X X X X X X X X X X X X X X X X X X X X X X X X
5. 1992 . . . X X X X X X X X X X X X X X X X X X X X X X X X
6. 1993 . . . X X X X X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated Expenses 12 13
at Year End (000 Omitted) Number of Number of
Years in Which ----------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. 1988 . . . 0 0 0 0 X X X X X X X X
2. 1989 . . . 0 0 0 0 X X X X X X X X
3. 1990 . . . 0 0 0 0 X X X X X X X X
4. 1991 . . . 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 0 0 X X X X X X X X
6. 1993 . . . X X X X X X X X X X X X 0 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3Q P REINSURANCE D
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted)
Years in Which -----------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000 2,121 2,770 3,213 3,418 3,442
2. 1984 . . . 1,169 2,078 2,369 2,693 2,812 2,914
3. 1985 . . . X X X X 1,590 2,576 3,078 3,225 3,228
4. 1986 . . . X X X X X X X X 813 1,362 2,128 2,446
5. 1987 . . . X X X X X X X X X X X X 648 1,917 2,622
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated Expenses 12 13
at Year End (000 Omitted) Number of Number of
Years in Which --------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 4,461 7,800 8,089 8,213 X X X X X X X X
2. 1984 . . . 3,078 3,250 3,277 3,308 X X X X X X X X
3. 1985 . . . 3,474 3,951 3,987 4,089 X X X X X X X X
4. 1986 . . . 3,039 3,622 3,657 3,779 X X X X X X X X
5. 1987 . . . 3,222 3,368 3,374 3,549 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted)
Years in Which -----------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000 1,746 5,671 7,972 10,522 11,861
2. 1984 . . . 0 0 1,403 1,891 2,869 3,835
3. 1985 . . . X X X X 0 110 1.381 5,768 7,791
4. 1986 . . . X X X X X X X X 10 163 734 1,736
5. 1987 . . . X X X X X X X X X X X X 29 190 621
6. 1988 . . . X 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 X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated Expenses 12 13
at Year End (000 Omitted) Number of Number of
Years in Which --------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 13,123 13,123 13,123 13,385 0 0
2. 1984 . . . 4,913 4,913 4,913 5,432 0 0
3. 1985 . . . 7,924 7,924 5,796 5,941 0 0
4. 1986 . . . 4,172 5,747 6,223 6,670 0 0
5. 1987 . . . 1,829 2,832 3,334 3,648 0 0
6. 1988 . . . 247 469 720 848 0 0
7. 1989 . . . 82 877 1,099 1,519 0 0
8. 1990 . . . 0 493 871 1,157 0 0
9. 1991 . . . X X X X 0 0 79 0 0
10. 1992 . . . 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 0 0 0
</TABLE>
SCHEDULE P - PART 3R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted)
Years in Which ------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000
2. 1984 . . .
3. 1985 . . . X X X X
4. 1986 . . . X X X X X X X X
5. 1987 . . . X X X X 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
7. 1989 . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated Expenses 12 13
1 at Year End (000 Omitted) Number of Number of
Years in Which ------------------------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss With Loss
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0 0 0
2. 1984 . . . 0 0 0
3. 1985 . . . 0 0 0
4. 1986 . . . 0 0 0
5. 1987 . . . 0 0 0
6. 1988 . . . 0 0 0
7. 1989 . . . 0 0 0
8. 1990 . . . 0 0 0
9. 1991 . . . X X X X 0 0 0
10. 1992 . . . X X X X X X X X 0 0 0
11. 1993 . . . X X X X X X X X X X X X 0 0 0
</TABLE>
Note: Net of salvage and subrogation received.
88
<PAGE> 28
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
..................................
(Name)
SCHEDULE P - PART 4A - HOMEOWNERS/FARMOWNERS
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0 0 0 0 0
2. 1984 . . . . . . . . . . . 0 0 0 0 0
3. 1985 . . . . . . . . . . . X X X X 0 0 0 0
4. 1986 . . . . . . . . . . . X X X X X X X X 0 0 0
5. 1987 . . . . . . . . . . . X 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 X 0
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 7 8 9 10 11
Incurred 1989 1990 1991 1992 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0 0 0 0 0
2. 1984 . . . . . . . . . . . 0 0 0 0 0
3. 1985 . . . . . . . . . . . 0 0 0 0 0
4. 1986 . . . . . . . . . . . 0 0 0 0 0
5. 1987 . . . . . . . . . . . 0 0 0 0 0
6. 1988 . . . . . . . . . . . 0 0 0 0 0
7. 1989 . . . . . . . . . . . 0 0 0 0 0
8. 1990 . . . . . . . . . . . X X X X 0 0 0 0
9. 1991 . . . . . . . . . . . X X X X X X X X 0 0 O
10. 1992 . . . . . . . . . . . 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 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE P - PART 4B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0 0 0 0 0
2. 1984 . . . . . . . . . . . 0 0 0 0 0
3. 1985 . . . . . . . . . . . X X X X 0 0 0 0
4. 1986 . . . . . . . . . . . X X X X X X X X 1,822 1,307 1,581
5. 1987 . . . . . . . . . . . X X X X X X X X X X X X 1,515 1,243
6. 1988 . . . . . . . . . . . X X X X X X X X X X X X X X X X 2,936
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 7 8 9 10 11
Incurred 1989 1990 1991 1992 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0 0 0 0 0
2. 1984 . . . . . . . . . . . 0 0 0 0 0
3. 1985 . . . . . . . . . . . 0 0 0 0 0
4. 1986 . . . . . . . . . . . 1,132 1,165 0 70 0
5. 1987 . . . . . . . . . . . (355) 0 0 8 5
6. 1988 . . . . . . . . . . . 225 59 299 274 225
7. 1989 . . . . . . . . . . . 2,025 1,241 1,547 722 650
8. 1990 . . . . . . . . . . . X X X X 1,041 973 958 900
9. 1991 . . . . . . . . . . . X X X X X X X X 591 324 300
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 447 324
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 347
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE P - PART 4C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 7,192 1,500 0 0 0
2. 1984 . . . . . . . . . . . 8,218 1,500 900 0 0
3. 1985 . . . . . . . . . . . X X X X 19,345 7,500 1,200 0
4. 1986 . . . . . . . . . . . X X X X X X X X 11,878 11,027 10,589
5. 1987 . . . . . . . . . . . X X X X X X X X X X X X 12,777 8,320
6. 1988 . . . . . . . . . . . X X X X X X X X X X X X X X X X 19,652
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 7 8 9 10 11
Incurred 1989 1990 1991 1992 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 127 0 0 0 0
2. 1984 . . . . . . . . . . . 0 0 0 0 0
3. 1985 . . . . . . . . . . . 0 0 0 0 0
4. 1986 . . . . . . . . . . . 9,735 0 0 0 0
5. 1987 . . . . . . . . . . . 1,977 1,564 0 84 50
6. 1988 . . . . . . . . . . . 7,638 5,247 4,670 3,000 2,500
7. 1989 . . . . . . . . . . . 29,392 23,457 15,500 7,200 6,000
8. 1990 . . . . . . . . . . . X X X X 10,767 6,651 4,731 4,300
9. 1991 . . . . . . . . . . . X X X X X X X X 12,115 6,576 6,250
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 10,772 9,000
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 9,028
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE P - PART 4D - WORKERS' COMPENSATION
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 1,195 850 349 667 0
2. 1984 . . . . . . . . . . . 3,162 1,200 350 1,105 0
3. 1985 . . . . . . . . . . . X X X X 3,415 2,540 2,557 229
4. 1986 . . . . . . . . . . . X X X X X X X X 3,786 3,470 3,932
5. 1987 . . . . . . . . . . . X X X X X X X X X X X X 1,901 1,902
6. 1988 . . . . . . . . . . . X X X X X X X X X X X X X X X X 1,278
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 7 8 9 10 11
Incurred 1989 1990 1991 1992 1993
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0 0 0 150 0
2. 1984 . . . . . . . . . . . 0 0 0 300 0
3. 1985 . . . . . . . . . . . 0 0 0 1,000 0
4. 1986 . . . . . . . . . . . 3,835 3,977 0 1,000 962
5. 1987 . . . . . . . . . . . 1,993 1,993 1,970 968 879
6. 1988 . . . . . . . . . . . 1,082 904 1,141 850 827
7. 1989 . . . . . . . . . . . 2,661 3,312 3,421 1,114 1,067
8. 1990 . . . . . . . . . . . X X X X 772 1,400 1,304 607
9. 1991 . . . . . . . . . . . X X X X X X X X 3,033 2,505 2,060
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 7,564 7,293
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 8,981
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE P - PART 4E - COMMERCIAL MULTIPLE PERIL
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 296 79 0 0 0
2. 1984 . . . . . . . . . . . 2,422 229 75 0 0
3. 1985 . . . . . . . . . . . X X X X 4,458 1,232 600 0
4. 1986 . . . . . . . . . . . X X X X X X X X 4,458 1,220 607
5. 1987 . . . . . . . . . . . X X X X X X X X X X X X 1,774 1,772
6. 1988 . . . . . . . . . . . X X X X X X X X X X X X X X X X 453
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 7 8 9 10 11
Incurred 1989 1990 1991 1992 1993
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 128 0 0 200 0
2. 1984 . . . . . . . . . . . 1 0 0 300 0
3. 1985 . . . . . . . . . . . 0 0 0 800 0
4. 1986 . . . . . . . . . . . 38 0 0 1,805 1,200
5. 1987 . . . . . . . . . . . 1,772 1,000 400 400 300
6. 1988 . . . . . . . . . . . 330 257 311 311 200
7. 1989 . . . . . . . . . . . 2,270 2,520 1,355 900 600
8. 1990 . . . . . . . . . . . X X X X 931 1,678 1,100 800
9. 1991 . . . . . . . . . . . X X X X X X X X 1,474 900 600
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 107 250
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 4,763
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
89
<PAGE> 29
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 4F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES
AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
- ---------------------------------------------------------------------------------------------------------------------------------
1
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 520 144 0 0 0
2. 1984 . . . . . . . . . . . 370 335 38 0 0
3. 1985 . . . . . . . . . . . X X X X 479 148 58 0
4. 1986 . . . . . . . . . . . X X X X X X X X 181 290 290
5. 1987 . . . . . . . . . . . X X X X X X X X X X X X 0 309
6. 1988 . . . . . . . . . . . X X X X X X X X X X X X X X X X 583
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES
AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
- ---------------------------------------------------------------------------------------------------------------------------------
1
Years in Which
Losses Were
Incurred 7 8 9 10 11
1989 1990 1991 1992 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 465 0 0 100 0
2. 1983 . . . . . . . . . . . 169 0 0 100 0
3. 1985 . . . . . . . . . . . 0 0 0 100 0
4. 1986 . . . . . . . . . . . 290 5 0 100 0
5. 1987 . . . . . . . . . . . (70) 0 263 238 238
6. 1988 . . . . . . . . . . . (253) 0 737 737 737
7. 1989 . . . . . . . . . . . 1,551 1,520 860 755 755
8. 1990 . . . . . . . . . . . X X X X 3,009 1,812 1,796 1,612
9. 1991 . . . . . . . . . . . X X X X X X X X 542 539 604
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 338 413
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 717
</TABLE>
SCHEDULE P - PART 4F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
<TABLE>
<CAPTION>
1
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . .
2. 1984 . . . . . . . . . . .
3. 1985 . . . . . . . . . . . X X X X
4. 1986 . . . . . . . . . . . X X X X X X X X
5. 1987 . . . . . . . . . . . X X X X 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
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years in Which
Losses Were
Incurred 7 8 9 10 11
1989 1990 1991 1992 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0
2. 1984 . . . . . . . . . . . 0
3. 1985 . . . . . . . . . . . 0
4. 1986 . . . . . . . . . . . 0
5. 1987 . . . . . . . . . . . 0
6. 1988 . . . . . . . . . . . 0
7. 1989 . . . . . . . . . . . 0
8. 1990 . . . . . . . . . . . X X X X 0
9. 1991 . . . . . . . . . . . X X X X X X X X 0
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 0
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 4G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
<TABLE>
<CAPTION>
1
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0 0 0 0 0
2. 1984 . . . . . . . . . . . 0 0 0 0 0
3. 1985 . . . . . . . . . . . X X X X 0 0 0 0
4. 1986 . . . . . . . . . . . X X X X X X X X 0 0 0
5. 1987 . . . . . . . . . . . X 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 X 0
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years in Which
Losses Were
Incurred 7 8 9 10 11
1989 1990 1991 1992 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0 0 0 0 0
2. 1984 . . . . . . . . . . . 0 0 0 0 0
3. 1985 . . . . . . . . . . . 0 0 0 0 0
4. 1986 . . . . . . . . . . . 0 0 0 0 0
5. 1987 . . . . . . . . . . . 0 0 0 0 0
6. 1988 . . . . . . . . . . . 0 0 0 0 0
7. 1989 . . . . . . . . . . . 253 0 38 38 38
8. 1990 . . . . . . . . . . . X X X X 0 2 2 67
9. 1991 . . . . . . . . . . . X X X X X X X X 130 0 52
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 3,773 2,762
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 6,048
</TABLE>
SCHEDULE P - PART 4H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
1
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 23,937 7,892 4,589 4,826 0
2. 1984 . . . . . . . . . . . 24,167 13,789 4,236 4,834 0
3. 1985 . . . . . . . . . . . X X X X 5,266 24,278 4,224 0
4. 1986 . . . . . . . . . . . X X X X X X X X 56,506 47,037 33,857
5. 1987 . . . . . . . . . . . X X X X X X X X X X X X 69,939 64,952
6. 1988 . . . . . . . . . . . X X X X X X X X X X X X X X X X 53,778
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years in Which
Losses Were
Incurred 7 8 9 10 11
1989 1990 1991 1992 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0 0 0 8,500 1,000
2. 1984 . . . . . . . . . . . 0 0 0 5,500 1,500
3. 1985 . . . . . . . . . . . 0 0 0 7,295 2,500
4. 1986 . . . . . . . . . . . 36,425 4,519 0 9,000 12,084
5. 1987 . . . . . . . . . . . 56,555 49,580 37,855 5,618 18,581
6. 1988 . . . . . . . . . . . 39,255 30,163 24,633 17,723 19,591
7. 1989 . . . . . . . . . . . 48,017 41,351 29,218 11,230 10,319
8. 1990 . . . . . . . . . . . X X X X 46,423 40,591 23,758 16,965
9. 1991 . . . . . . . . . . . X X X X X X X X 49,699 30,026 25,100
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 28,623 25,371
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 38,111
</TABLE>
SCHEDULE P - PART 4H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
<TABLE>
<CAPTION>
1
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . .
2. 1984 . . . . . . . . . . .
3. 1985 . . . . . . . . . . . X X X X
4. 1986 . . . . . . . . . . . X X X X X X X X
5. 1987 . . . . . . . . . . . X X X X 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
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years in Which
Losses Were
Incurred 7 8 9 10 11
1989 1990 1991 1992 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . .
2. 1984 . . . . . . . . . . .
3. 1985 . . . . . . . . . . .
4. 1986 . . . . . . . . . . . 0
5. 1987 . . . . . . . . . . . 0
6. 1988 . . . . . . . . . . . 0
7. 1989 . . . . . . . . . . . 0
8. 1990 . . . . . . . . . . . X X X X 0
9. 1991 . . . . . . . . . . . X X X X X X X X 0
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 0
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 0
</TABLE>
90
<PAGE> 30
FORM 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
..................................
(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 OMMITTED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------
<S> <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
2. 1992........... X X X X X X X X X X X X 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
</TABLE>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES
AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior.......... X X X X X X X X 2,455 1,761 900
2. 1992........... X X X X X X X X X X X X 0 700
3. 1993........... X X X X X X X X X X X X X X X X 1,178
</TABLE>
SCHEDULE P - PART 4J - AUTO PHYSICAL DAMAGE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
<S> <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
2. 1992........... X X X X X X X X X X X X 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
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
1. Prior.......... X X X X X X X X 410 90 101
2. 1992........... X X X X X X X X X X X X 32 32
3. 1993........... X X X X X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 4K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAGE GUARANTY
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
<S> <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
2. 1992........... X X X X X X X X X X X X 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
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
1. Prior.......... X X X X X X X X 0 0 0
2. 1992........... X X X X X X X X X X X X 0 0
3. 1993........... X X X X X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 4L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
<S> <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
2. 1992........... X X X X X X X X X X X X 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
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
1. Prior.......... X X X X X X X X 0 0 0
2. 1992........... X X X X X X X X X X X X 0 0
3. 1993........... X X X X X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 4M - INTERNATIONAL
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
<S> <C> <C> <C> <C> <C>
1. Prior.......... 385 677 344 116 182
2. 1984........... 116 170 66 0 0
3. 1985........... X X X X 232 381 0 0
4. 1986........... X X X X X X X X 908 0 0
5. 1987........... X 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 X 0
7. 1989........... X X X X X X X X X X X X 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
9. 1991........... X X X X X X X X X X X X 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
11. 1993........... X X X X X X X X X X X X X X X X X X X X
</TABLE>
SCHEDULE P - PART 4M - INTERNATIONAL
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C>
1. Prior.......... 0 0 0 0 0
2. 1984........... 0 0 0 0 0
3. 1985........... 0 0 0 0 0
4. 1986........... 0 0 0 0 0
5. 1987........... 0 0 0 0 0
6. 1988........... 0 0 0 0 0
7. 1989........... 0 0 0 0 0
8. 1990........... X X X X 0 0 0 0
9. 1991........... 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 0 0
11. 1993........... X X X X X X X X X X X X X X X X 1,299
</TABLE>
91
<PAGE> 31
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
................................
(Name)
SCHEDULE P - PART 4N - REINSURANCE A
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. 1988........... X X X X X X X X X X X X X X X X 407
2. 1989........... X X X X X X X X X X X X 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
4. 1991........... X X X X X X X X X X X X X X X X X X X X
5. 1992........... X X X X X X X X X X X X X X X X X X X X
6. 1993........... X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. 1988........... 100 49 630 0 0
2. 1989........... 1,651 1,205 205 189 172
3. 1990........... X X X X 127 360 309 275
4. 1991........... X X X X X X X X 6,814 4,945 4,885
5. 1992........... X X X X X X X X X X X X 2,708 2,139
6. 1993........... X X X X X X X X X X X X X X X X 9,877
</TABLE>
SCHEDULE P - PART 40 - REINSURANCE B
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. 1988........... X X X X X X X X X X X X X X X X 0
2. 1989........... X X X X X X X X X X X X 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
4. 1991........... X X X X X X X X X X X X X X X X X X X X
5. 1992........... X X X X X X X X X X X X X X X X X X X X
6. 1993........... X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. 1988........... 4 8 254 281 250
2. 1989........... 4,498 4,489 4,068 2,961 2,750
3. 1990........... X X X X 6,472 6,191 5,671 5,000
4. 1991........... X X X X X X X X 6,480 6,062 4,000
5. 1992........... X X X X X X X X X X X X 26,595 21,966
6. 1993........... X X X X X X X X X X X X X X X X 27,929
</TABLE>
SCHEDULE P - PART 4P - REINSURANCE C
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. 1988........... X X X X X X X X X X X X X X X X 0
2. 1989........... X X X X X X X X X X X X 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
4. 1991........... X X X X X X X X X X X X X X X X X X X X
5. 1992........... X X X X X X X X X X X X X X X X X X X X
6. 1993........... X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
7 8 9 10 11
1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. 1988........... 0 0 0 0 0
2. 1989........... 0 0 0 0 0
3. 1990........... X X X X 0 0 0 0
4. 1991........... 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 0 0
6. 1993........... X X X X X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 4Q - REINSURANCE D
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior.......... 829 316 1,373 0 0
2. 1984........... 249 79 264 0 0
3. 1985........... X X X X 108 1,521 0 0
4. 1986........... X X X X X X X X 3,621 0 0
5. 1987........... X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
7 8 9 10 11
1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior.......... 826 0 0 26 0
2. 1984........... 0 0 0 32 0
3. 1985........... 303 0 0 21 0
4. 1986........... 3,406 0 0 104 67
5. 1987........... 556 247 295 311 200
</TABLE>
SCHEDULE P - PART 4R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior.......... 3,026 3,058 165 606 0
2. 1984........... 874 1,211 1,218 606 0
3. 1985........... X X X X 2,894 2,634 531 0
4. 1986........... X X X X X X X X 5,608 5,902 4,061
5. 1987........... X X X X X X X X X X X X 8,777 7,791
6. 1988........... X X X X X X X X X X X X X X X X 6,450
7. 1989........... X X X X X X X X X X X X 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
9. 1991........... X X X X X X X X X X X X 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
11. 1993........... X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior.......... 0 0 0 500 500
2. 1984........... 0 0 0 500 500
3. 1985........... 0 0 0 1,000 1,500
4. 1986........... 3,674 0 0 1,000 2,000
5. 1987........... 7,375 666,611 5,633 4,000 3,796
6. 1988........... 6,411 6,075 5,873 4,000 3,829
7. 1989........... 5,471 4,732 4,321 3,000 2,614
8. 1990........... X X X X 4,375 3,572 3,241 2,856
9. 1991........... X X X X X X X X 2,945 5,920 5,814
10. 1992........... X X X X X X X X X X X X 2,718 2,313
11. 1993........... X X X X X X X X X X X X X X X X 1,700
</TABLE>
SCHEDULE P - PART 4R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior..........
2. 1984...........
3. 1985........... X X X X
4. 1986........... X X X X X X X X
5. 1987........... X X X X 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
7. 1989........... X X X X X X X X X X X X 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
9. 1991........... X X X X X X X X X X X X 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
11. 1993........... X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior.......... 0
2. 1984........... 0
3. 1985........... 0
4. 1986........... 0
5. 1987........... 0
6. 1988........... 0
7. 1989........... 0
8. 1990........... X X X X 0
9. 1991........... X X X X X X X X 0
10. 1992........... X X X X X X X X X X X X 0
11. 1993........... X X X X X X X X X X X X X X X X 0
</TABLE>
92
<PAGE> 32
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE UNDERWRITERS REINSURANCE COMPANY
....................................
(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)
<TABLE>
<S> <C> <C> <C> <C>
1993 $0 ( 68.8%) 1992 $0 ( 68.8%)
--------------------------- -----------------------------
1991 $0 ( 68.8%) Total $0
--------------------------- ----------------------
</TABLE>
(b) Other Liability and Products Liability
<TABLE>
<S> <C> <C> <C> <C>
1993 $0 ( 63.6%) 1992 $0 ( 63.6%)
--------------------------- -----------------------------
1991 $0 ( 63.6%) Total $0
--------------------------- ----------------------
</TABLE>
(c) Medical Malpractice
<TABLE>
<S> <C> <C> <C> <C>
1993 $0 ( 75.0%) 1992 $0 ( 75.0%)
--------------------------- -----------------------------
1991 $0 ( 75.0%) Total $0
--------------------------- ----------------------
</TABLE>
(d) Workers' Compensation
<TABLE>
<S> <C> <C> <C> <C>
1993 $0 ( 65.0%) 1992 $0 ( 65.0%)
--------------------------- -----------------------------
1991 $0 ( 65.0%) Total $0
--------------------------- ----------------------
</TABLE>
(e) Credit
<TABLE>
<S> <C>
Total $0
----------------------
</TABLE>
(f) All Lines Total (Report here and Page 3)
<TABLE>
<S> <C>
Total $0
----------------------
</TABLE>
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.
<TABLE>
<CAPTION>
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
(b) 1988
(c) 1989
(d) 1990
(e) 1991
(f) 1992
(g) 1993
---------------------------------------------------------------------------------------
(h) Totals 0 0 0
---------------------------------------------------------------------------------------
</TABLE>
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). Are they so reported in
this Statement? 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? 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 Statement is being filed.
6. What were the net premiums in force at the end of the year for:
<TABLE>
<CAPTION>
(in thousands of dollars)
<S> <C> <C>
(a) Fidelity $0
(b) Surety $0
7. Claim count information is reported (check one) (a) per claim
If not the same in all years, explain in Question 8. -----------
(b) per claimant
-----------
</TABLE>
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)? Earned premium presented by line and year in Schedule P
remain unchanged once submitted. For reinsurers, this practice results
in distortion to Schedule P as there is always a time lag for premiums
booked by a reinsurer. It is not uncommon for a significant volume of
earned premiums relating to prior underwriting years to be recorded in
succeeding years. In years prior to 1988, the Company reported losses
relating to such late reported premiums as development to the
underwriting year of the loss. In order to more accurately reflect
underwriting experience, beginning in 1988, the Company attempted to
match losses reported within Schedule P to the calendar year where the
related earned premium was reported.
-----------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
93
<PAGE> 33
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(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.
<TABLE>
<CAPTION>
SCHEDULE P - PART 1 - SUMMARY
(000 omitted)
Premiums Earned Loss and Loss Expense Payments
1 ----------------------------------- -------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were --------------------- ----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... X X X X X X X X X X X X 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0
11. 1993..... 7,824 7,220 604 532 480 8 8
- ------------------------------------------------------------------------------------------------------------
12. Totals .. X X X X X X X X X X X X 532 480 8 8
</TABLE>
SCHEDULE P - PART 1 - SUMMARY
(000 omitted)
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
--------------------------------------
1 12
Years 9 10 11
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 X X X X
2. 1984..... 0 0 0 X X X X
3. 1985..... 0 0 0 X X X X
4. 1986..... 0 0 0 X X X X
5. 1987..... 0 0 0 X X X X
6. 1988..... 0 0 0 X X X X
7. 1989..... 0 0 0 X X X X
8. 1990..... 0 0 0 X X X X
9. 1991..... 0 0 0 X X X X
10. 1992..... 0 0 0 X X X X
11. 1993..... 1 190 242 X X X X
- ----------------------------------------------------------------------
12. Totals .. 1 190 242 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- ----------------------------------------------------
in Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were ----------------------- ----------------------- ------------------------ ------------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... 0 0 0 0 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0 0
11. 1993..... 2,667 2,556 3,547 3,275 10 9 177 164
- ----------------------------------------------------------------------------------------------------------------------------
12. Totals .. 2,667 2,556 3,547 3,275 10 9 177 164
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding
Losses Were Subrogation Expenses and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 X X X X
2. 1984..... 0 0 0 X X X X
3. 1985..... 0 0 0 X X X X
4. 1986..... 0 0 0 X X X X
5. 1987..... 0 0 0 X X X X
6. 1988..... 0 0 0 X X X X
7. 1989..... 0 0 0 X X X X
8. 1990..... 0 0 0 X X X X
9. 1991..... 0 0 0 X X X X
10. 1992..... 0 0 0 X X X X
11. 1993..... 0 13 420 X X X X
- -------------------------------------------------------------------
12. Totals .. 0 13 420 X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ---------------------------------- --------------------------------------- ----------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- ---------------------------------------------------------------------------------------------------------------------------
<S> <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
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..... 7,154 6,492 662 91.4 89.9 109.6 0 0
- ---------------------------------------------------------------------------------------------------------------------------
12. Totals... X X X X X X X X X X X X X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Net Balance Sheet Reserves
in Which 33 After Discount
Premiums Were Inter-Company --------------------------
Earned and Pooling 34 35
Losses Were Participation Losses Loss Expenses
Incurred Percentage Unpaid Unpaid
- ---------------------------------------------------------
<S> <C> <C> <C>
1. Prior ... X X X X 0 0
2. 1984..... 0.0 0 0
3. 1985..... 0.0 0 0
4. 1986..... 0.0 0 0
5. 1987..... 0.0 0 0
6. 1988..... 0.0 0 0
7. 1989..... 0.0 0 0
8. 1990..... 0.0 0 0
9. 1991..... 0.0 0 0
10. 1992..... 0.0 0 0
11. 1993..... 0.0 393 27
- ---------------------------------------------------------
12. Totals .. X X X X 393 27
</TABLE>
*Net = (25 - 26) = (11 + 23)
62
<PAGE> 34
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(NAME)
SCHEDULE P - PART 2 - SUMMARY
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported At Year End (000 omitted)
Years in Which --------------------------------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ........ *
2. 1984..........
3. 1985.......... X X X X
4. 1986.......... X X X X X X X X
5. 1987.......... X X X X 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
7. 1989.......... X X X X X X X X X X X X 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
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
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
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
- ---------------------------------------------------------------------------------------------------------------------------
12. Totals ................................................................................................................
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and Allocated
Expenses Reported At Year End
1 (000 omitted) Development**
Years in Which ---------------------------------------------------
Losses Were 10 11 12 13
Incurred 1992 1993 One Year Two Year
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ........ 0 0 0
2. 1984.......... 0 0 0
3. 1985.......... 0 0 0
4. 1986.......... 0 0 0
5. 1987.......... 0 0 0
6. 1988.......... 0 0 0
7. 1989.......... 0 0 0
8. 1990.......... 0 0 0
9. 1991.......... 0 0 0
10. 1992.......... 0 0 X X X X
11. 1993.......... X X X X 457 X X X X X X X X
- -----------------------------------------------------------------------
12. Totals .............................. 0 0
</TABLE>
*Reported reserves only. Subsequent development relates only to subsequent
payments and reserves.
**Current year less first or second prior year, showing (redundant) or adverse.
SCHEDULE P - PART 3 - SUMMARY
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses At Year End (000 omitted)
Years in Which -----------------------------------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ........ 000
2. 1984..........
3. 1985.......... X X X X
4. 1986.......... X X X X X X X X
5. 1987.......... X X X X 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
7. 1989.......... X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Cumulative paid Losses 12 13
and Allocated Expenses Number of Number of
1 At Year End (000) omitted Claims Claims
Years in Which ------------------------- Closed With Closed
Losses Were 10 11 Loss Without Loss
Incurred 1992 1993 Payment Payment
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ........ 0 X X X X X X X X
2. 1984.......... 0 X X X X X X X X
3. 1985.......... 0 X X X X X X X X
4. 1986.......... 0 X X X X X X X X
5. 1987.......... 0 X X X X X X X X
6. 1988.......... 0 X X X X X X X X
7. 1989.......... 0 X X X X X X X X
8. 1990.......... 0 X X X X X X X X
9. 1991.......... 0 X X X X X X X X
10. 1992.......... 0 X X X X X X X X
11. 1993.......... X X X X 52 X X X X X X X X
</TABLE>
Note: Net of salvage and subrogation received.
<TABLE>
<CAPTION>
SCHEDULE P - PART 4 - SUMMARY
- ------------------------------------------------------------------------------------------------------------------------
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
Were Incurred 1984 1985 1986 1987 1988 1989 1990
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ........
2. 1984..........
3. 1985.......... X X X X
4. 1986.......... X X X X X X X X
5. 1987.......... X X X X 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
7. 1989.......... X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Bulk and Incurred But Not Reported Reserves
on Losses and Allocated Expenses at Year End
1 (000 omitted)
Years in Which -------------------------------------
Losses Were 9 10 11
Incurred 1991 1992 1993
---------------------------------------------------------------
<S> <C> <C> <C>
1. Prior ........ 0
2. 1984.......... 0
3. 1985.......... 0
4. 1986.......... 0
5. 1987.......... 0
6. 1988.......... 0
7. 1989.......... 0
8. 1990.......... 0
9. 1991.......... 0
10. 1992.......... X X X X 0
11. 1993.......... X X X X X X X X 285
</TABLE>
63
<PAGE> 35
FORM 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(NAME)
SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
-------------------------- ---------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were --------------------------- --------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2-3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X 0 0 0 0
2. 1984 . . . . 0 0 0 0 0 0 0
3. 1985 . . . . 0 0 0 0 0 0 0
4. 1986 . . . . 0 0 0 0 0 0 0
5. 1987 . . . . 0 0 0 0 0 0 0
6. 1988 . . . . 0 0 0 0 0 0 0
7. 1989 . . . . 0 0 0 0 0 0 0
8. 1990 . . . . 0 0 0 0 0 0 0
9. 1991 . . . . 0 0 0 0 0 0 0
10. 1992 . . . . 0 0 0 0 0 0 0
11. 1993 . . . . 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
</TABLE>
<TABLE>
<CAPTION>
1 Loss and Loss Expense Payments
--------------------------------------------
Years 9 10 11 12
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . 0 0 0 X X X X
2. 1984 . . . . 0 0 0 0
3. 1985 . . . . 0 0 0 0
4. 1986 . . . . 0 0 0 0
5. 1987 . . . . 0 0 0 0
6. 1988 . . . . 0 0 0 0
7. 1989 . . . . 0 0 0 0
8. 1990 . . . . 0 0 0 0
9. 1991 . . . . 0 0 0 0
10. 1992 . . . . 0 0 0 0
11. 1993 . . . . 0 0 0 0
- ------------------------------------------------------------------------------------
12. Totals . . . 0 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ----------------------------------------- ----------------------------------------
in Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ------------------- -------------------- ------------------ -------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0 0 0 0 0 0 0 0
2. 1984 . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . 0 0 0 0 0 0 0 0
4. 1986 . . . . 0 0 0 0 0 0 0 0
5. 1987 . . . . 0 0 0 0 0 0 0 0
6. 1988 . . . . 0 0 0 0 0 0 0 0
7. 1989 . . . . 0 0 0 0 0 0 0 0
8. 1990 . . . . 0 0 0 0 0 0 0 0
9. 1991 . . . . 0 0 0 0 0 0 0 0
10. 1992 . . . . 0 0 0 0 0 0 0 0
11. 1993 . . . . 0 0 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------
12. Totals . . . 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earmed and and Loss Net Losses Outstanding-
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . 0 0 0 0
2. 1984 . . . . 0 0 0 0
3. 1985 . . . . 0 0 0 0
4. 1986 . . . . 0 0 0 0
5. 1987 . . . . 0 0 0 0
6. 1988 . . . . 0 0 0 0
7. 1989 . . . . 0 0 0 0
8. 1990 . . . . 0 0 0 0
9. 1991 . . . . 0 0 0 0
10. 1992 . . . . 0 0 0 0
11. 1993 . . . . 0 0 0 0
- -------------------------------------------------------------------------------------------
12. Totals . . . 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1 Total Losses and Loss and Loss Expense Percentage
Year Loss Expenses Incurred (Incurred/Premiums Earned)
in Which ------------------------------ ---------------------------------
Premiums Were 25 26 27 28 29 30
Earned and
Losses Were Direct Direct
Incurred and Assumed Ceded Net* and Assumed Ceded Net
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . . X X X X X X X X X X X X X X X X X X X X X X X X
2. 1984 . . . . 0 0 0 0.0 0.0 0.0
3. 1985 . . . . 0 0 0 0.0 0.0 0.0
4. 1986 . . . . 0 0 0 0.0 0.0 0.0
5. 1987 . . . . 0 0 0 0.0 0.0 0.0
6. 1988 . . . . 0 0 0 0.0 0.0 0.0
7. 1989 . . . . 0 0 0 0.0 0.0 0.0
8. 1990 . . . . 0 0 0 0.0 0.0 0.0
9. 1991 . . . . 0 0 0 0.0 0.0 0.0
10. 1992 . . . . 0 0 0 0.0 0.0 0.0
11. 1993 . . . . 0 0 0 0.0 0.0 0.0
- ------------------------------------------------------------------------------------------
12. Totals . . . X X X X X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
1 Discount for Time Net Balance Sheet Reserves
Years Value of Money 33 After Discount
in Which ----------------------- --------------------------
Premiums Were 31 32 Inter-Company 34 35
Earned and Pooling Loss
Losses Were Loss Participation Losses Expenses
Incurred Loss Expense Percentage Unpaid Unpaid
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . 0 0 X X X X 0 0
2. 1984 . . . . 0 0 0.0 0 0
3. 1985 . . . . 0 0 0.0 0 0
4. 1986 . . . . 0 0 0.0 0 0
5. 1987 . . . . 0 0 0.0 0 0
6. 1988 . . . . 0 0 0.0 0 0
7. 1989 . . . . 0 0 0.0 0 0
8. 1990 . . . . 0 0 0.0 0 0
9. 1991 . . . . 0 0 0.0 0 0
10. 1992 . . . . 0 0 0.0 0 0
11. 1993 . . . . 0 0 0.0 0 0
- --------------------------------------------------------------------------------------------------
12. Totals . . . 0 0 X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
64
<PAGE> 36
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 1B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
(000 omitted)
<TABLE>
<CAPTION>
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 Were ---------------- ------------------ Salvage Unallocated Total Claims
Earned and Direct Net 5 6 7 8 and Loss Net Paid Reported-
Losses Were and Ceded (2 - 3) Direct Direct Subrogation Expense (5-6+7 Direct and
Incurred Assumed and Assumed Ceded and Assumed Ceded Received Payments -8 +10) Assumed
- --------------------------------------------------------------------------------------------------------------------------------
<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..... 2,291 2,080 211 23 20 0 0 0 73 76 5
- --------------------------------------------------------------------------------------------------------------------------------
12. Totals... X X X X X X X X X X X X 23 20 0 0 0 73 76 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1
Losses Unpaid Allocated Loss Expenses Unpaid
Years --------------------------------------------- ----------------------------------------------------
In Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were --------------------- --------------------- --------------------- -------------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... 0 0 0 0 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0 0
11. 1993..... 0 0 1,152 1,059 0 0 57 53
- -------------------------------------------------------------------------------------------------------------------
12. Totals... 0 0 1,152 1,059 0 0 57 53
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
In Which Number
Premiums Were Salvage Unallocated Total of Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior .. 0 0 0 0
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 0 0 0
6. 1988..... 0 0 0 0
7. 1989..... 0 0 0 0
8. 1990..... 0 0 0 0
9. 1991..... 0 0 0 0
10. 1992..... 0 0 0 0
11. 1993..... 0 5 102 4
- ------------------------------------------------------------------------
12. Totals... 0 5 102 4
</TABLE>
<TABLE>
<CAPTION>
1 Total Losses and Loss and Loss Expense Percentage
Years Loss Expenses Incurrred (Incurred/Premiums Earned)
In Which ----------------------------------------- ------------------------------------------
Premiums Were 25 26 27 28 29 30
Earned and
Losses Were Direct Direct
Incurred and Assumed Ceded Net* and Assumed Ceded Net
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior..... X X X X X X X X X X X X X X X X X X X X X X X X
2. 1984...... 0 0 0 0.0 0.0 0.0
3. 1985...... 0 0 0 0.0 0.0 0.0
4. 1986...... 0 0 0 0.0 0.0 0.0
5. 1987...... 0 0 0 0.0 0.0 0.0
6. 1988...... 0 0 0 0.0 0.0 0.0
7. 1989...... 0 0 0 0.0 0.0 0.0
8. 1990...... 0 0 0 0.0 0.0 0.0
9. 1991...... 0 0 0 0.0 0.0 0.0
10. 1992...... 0 0 0 0.0 0.0 0.0
11. 1993...... 1,310 1,132 178 57.2 54.4 84.4
- ----------------------------------------------------------------------------------------------------------
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
</TABLE>
<TABLE>
<CAPTION>
1 Discount for Time Net Balance Sheet Reserves
Years Value of Money 33 After Discount
In Which ------------------ --------------------------
Premiums Were 31 32 Inter-Company 34 35
Earned and Pooling Loss
Losses Were Loss Participation Losses Expenses
Incurred Loss Expense Percentage Unpaid Unpaid
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior..... 0 0 X X X X 0 0
2. 1984...... 0 0 0.0 0 0
3. 1985...... 0 0 0.0 0 0
4. 1986...... 0 0 0.0 0 0
5. 1987...... 0 0 0.0 0 0
6. 1988...... 0 0 0.0 0 0
7. 1989...... 0 0 0.0 0 0
8. 1990...... 0 0 0.0 0 0
9. 1991...... 0 0 0.0 0 0
10. 1992...... 0 0 0.0 0 0
11. 1993...... 0 0 0.0 93 9
- --------------------------------------------------------------------------------------------
12. Totals.... 0 0 X X X X 93 9
</TABLE>
* Net = (25-26) = (11+23)
65
<PAGE> 37
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 1C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
(000 omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
1 ----------------------------------------------- ------------------------------
Years 2 3 4
in Which Loss Payments
Premiums Were ------------------------------
Earned and Direct Net 5 6
Losses Were and Ceded (2-3) Direct
Incurred Assumed and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior ......... X X X X X X X X X X X X 0 0
2. 1984 ......... 0 0 0 0 0
3. 1985 ......... 0 0 0 0 0
4. 1986 ......... 0 0 0 0 0
5. 1987 ......... 0 0 0 0 0
6. 1988 ......... 0 0 0 0 0
7. 1989 ......... 0 0 0 0 0
8. 1990 ......... 0 0 0 0 0
9. 1991 ......... 0 0 0 0 0
10. 1992 ......... 0 0 0 0 0
11. 1993 ......... 692 642 50 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
12. Totals ......... X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
-------------------------------------------------------------------------------------
1
Years Allocated Loss 9 10 11 12
in Which Expense Payments Number of
Premiums Were ---------------------------- Salvage Unallocated Total Claims
Earned and 7 8 and Loss Net Paid Reported -
Losses Were Direct Subrogation Expense (5 - 6 + 7 Direct and
Incurred and Assumed Ceded Received Payments - 8 + 10) Assumed
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior ....... 0 0 0 0 0 X X X X
2. 1984 ....... 0 0 0 0 0 0
3. 1985 ....... 0 0 0 0 0 0
4. 1986 ....... 0 0 0 0 0 0
5. 1987 ....... 0 0 0 0 0 0
6. 1988 ....... 0 0 0 0 0 0
7. 1989 ....... 0 0 0 0 0 0
8. 1990 ....... 0 0 0 0 0 0
9. 1991 ....... 0 0 0 0 0 0
10. 1992 ....... 0 0 0 0 0 0
11. 1993 ....... 0 0 0 7 7 3
- --------------------------------------------------------------------------------------------------------------------------------
12. Totals ....... 0 0 0 7 7 X X X X
</TABLE>
Note: For "prior" report amounts paid or received in current year only.
Report cumulative amounts of paid or received for specific years.
Report loss payments net of salvage and subrogation received.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ------------------------------------------------------------ ------------------------------
in Which Case Basis Bulk + IBNR Case Basis
Premiums Were -------------------------- ------------------------- --------------------------
Earned and 13 14 15 16 17 18
Losses Were Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior ........ 0 0 0 0 0 0
2. 1984 ........ 0 0 0 0 0 0
3. 1985 ........ 0 0 0 0 0 0
4. 1986 ........ 0 0 0 0 0 0
5. 1987 ........ 0 0 0 0 0 0
6. 1988 ........ 0 0 0 0 0 0
7. 1989 ........ 0 0 0 0 0 0
8. 1990 ........ 0 0 0 0 0 0
9. 1991 ....... 0 0 0 0 0 0
10. 1992 ........ 0 0 0 0 0 0
11. 1993 ........ 2,195 2,100 281 253 0 0
- -------------------------------------------------------------------------------------------------------------------
12. Totals ........ 2,195 2,100 281 253 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Bulk + IBNR Number of
Premiums Were ------------------------- Salvage Unallocated Total Claims
Earned and 19 20 and Loss Net Losses Outstanding
Losses Were Direct Subrogation Expenses and Expenses Direct and
Incurred and Assumed Ceded Anticipated Unpaid Unpaid Assumed
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior ........ 0 0 0 0 0 0
2. 1984 ........ 0 0 0 0 0 0
3. 1985 ........ 0 0 0 0 0 0
4. 1986 ........ 0 0 0 0 0 0
5. 1987 ........ 0 0 0 0 0 0
6. 1988 ........ 0 0 0 0 0 0
7. 1989 ........ 0 0 0 0 0 0
8. 1990 ........ 0 0 0 0 0 0
9. 1991 ........ 0 0 0 0 0 0
10. 1992 ........ 0 0 0 0 0 0
11. 1993 ........ 14 13 0 1 125 3
- ----------------------------------------------------------------------------------------------------------------------
12. Totals ........ 14 13 0 1 125 3
</TABLE>
<TABLE>
<CAPTION>
1 Total Losses and Loss and Loss Expense Percentage
Years Loss Expenses Incurred (Incurred/Premiums Earned)
in Which ------------------------------------------ ------------------------------------------
Premiums Were 25 26 27 28 29 30
Earned and
Losses Were Direct Direct
Incurred and Assumed Ceded Net* and Assumed Ceded Net
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior ........ X X X X X X X X X X X X X X X X X X X X X X X X
2. 1984 ........ 0 0 0 0.0 0.0 0.0
3. 1985 ........ 0 0 0 0.0 0.0 0.0
4. 1986 ........ 0 0 0 0.0 0.0 0.0
5. 1987 ........ 0 0 0 0.0 0.0 0.0
6. 1988 ........ 0 0 0 0.0 0.0 0.0
7. 1989 ........ 0 0 0 0.0 0.0 0.0
8. 1990 ........ 0 0 0 0.0 0.0 0.0
9. 1991 ........ 0 0 0 0.0 0.0 0.0
10. 1992 ........ 0 0 0 0.0 0.0 0.0
11. 1993 ........ 2,498 2,366 132 361.0 368.5 264.0
- -------------------------------------------------------------------------------------------------------------------
12. Totals ........ X X X X X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
Discount for Time Net Balance Sheet Reserves
Years Value of Money After Discount
in Which ------------------------ 33 ----------------------------
Premiums Were 31 32 Inter-Company 34 35
Earned and Pooling Loss
Losses Were Loss Participation Losses Expenses
Incurred Loss Expense Percentage Unpaid Unpaid
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior ........ 0 0 X X X X 0 0
2. 1984 ........ 0 0 0.0 0 0
3. 1985 ........ 0 0 0.0 0 0
4. 1986 ........ 0 0 0.0 0 0
5. 1987 ........ 0 0 0.0 0 0
6. 1988 ........ 0 0 0.0 0 0
7. 1989 ........ 0 0 0.0 0 0
8. 1990 ........ 0 0 0.0 0 0
9. 1991 ........ 0 0 0.0 0 0
10. 1992 ........ 0 0 0.0 0 0
11. 1993 ........ 0 0 0.0 123 2
- -----------------------------------------------------------------------------------------------------
12. Totals ........ 0 0 X X X X 123 2
</TABLE>
*Net = (25 - 26) = (11 + 23)
66
<PAGE> 38
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 1D - WORKERS' COMPENSATION
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
----------------------------- ---------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were --------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2-3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X 0 0 0 0
2. 1984 . . . . 0 0 0 0 0 0 0
3. 1985 . . . . 0 0 0 0 0 0 0
4. 1986 . . . . 0 0 0 0 0 0 0
5. 1987 . . . . 0 0 0 0 0 0 0
6. 1988 . . . . 0 0 0 0 0 0 0
7. 1989 . . . . 0 0 0 0 0 0 0
8. 1990 . . . . 0 0 0 0 0 0 0
9. 1991 . . . . 0 0 0 0 0 0 0
10. 1992 . . . . 0 0 0 0 0 0 0
11. 1993 . . . . 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
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 -------------------------------------------------
Years 9 10 11 12
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . 0 0 0 X X X X
2. 1984 . . . . 0 0 0 0
3. 1985 . . . . 0 0 0 0
4. 1986 . . . . 0 0 0 0
5. 1987 . . . . 0 0 0 0
6. 1988 . . . . 0 0 0 0
7. 1989 . . . . 0 0 0 0
8. 1990 . . . . 0 0 0 0
9. 1991 . . . . 0 0 0 0
10. 1992 . . . . 0 0 0 0
11. 1993 . . . . 0 0 0 0
- ---------------------------------------------------------------------------------------
12. Totals. . . . 0 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1
Losses Unpaid Allocated Loss Expenses Unpaid
Years ----------------------------------------- -----------------------------------------
in Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ------------------- ------------------- ------------------- ------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0 0 0 0 0 0 0 0
2. 1984 . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . 0 0 0 0 0 0 0 0
4. 1986 . . . . 0 0 0 0 0 0 0 0
5. 1987 . . . . 0 0 0 0 0 0 0 0
6. 1988 . . . . 0 0 0 0 0 0 0 0
7. 1989 . . . . 0 0 0 0 0 0 0 0
8. 1990 . . . . 0 0 0 0 0 0 0 0
9. 1991 . . . . 0 0 0 0 0 0 0 0
10. 1992 . . . . 0 0 0 0 0 0 0 0
11. 1993 . . . . 0 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
12. Totals . . . 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . 0 0 0 0
2. 1984 . . . . 0 0 0 0
3. 1985 . . . . 0 0 0 0
4. 1986 . . . . 0 0 0 0
5. 1987 . . . . 0 0 0 0
6. 1988 . . . . 0 0 0 0
7. 1989 . . . . 0 0 0 0
8. 1990 . . . . 0 0 0 0
9. 1991 . . . . 0 0 0 0
10. 1992 . . . . 0 0 0 0
11. 1993 . . . . 0 0 0 0
- ---------------------------------------------------------------------------------------
12. Totals. . . . 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage
in Which Loss Expenses Incurred (Incurred/Premiums Earned)
Premiums Were ------------------------------ --------------------------------
Earned and 25 26 27 28 29 30
Losses Were Direct Direct
Incurred and Assumed Ceded Net* and Assumed Ceded Net
- -------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X X X X X X X X X X X X X
2. 1984 . . . . 0 0 0 0.0 0.0 0.0
3. 1985 . . . . 0 0 0 0.0 0.0 0.0
4. 1986 . . . . 0 0 0 0.0 0.0 0.0
5. 1987 . . . . 0 0 0 0.0 0.0 0.0
6. 1988 . . . . 0 0 0 0.0 0.0 0.0
7. 1989 . . . . 0 0 0 0.0 0.0 0.0
8. 1990 . . . . 0 0 0 0.0 0.0 0.0
9. 1991 . . . . 0 0 0 0.0 0.0 0.0
10. 1992 . . . . 0 0 0 0.0 0.0 0.0
11. 1993 . . . . 0 0 0 0.0 0.0 0.0
- ---------------------------------------------------------------------------------------------
12. Totals . . . X X X X X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Discount for Time Net Balance Sheet Reserves
Years Value of Money 33 After Discount
in Which ---------------------- --------------------------
Premiums Were 31 32 Inter-Company 34 35
Earned and Pooling Loss
Losses Were Loss Participation Losses Expenses
Incurred Loss Expense Percentage Unpaid Unpaid
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . 0 0 X X X X 0 0
2. 1984 . . . . 0 0 0.0 0 0
3. 1985 . . . . 0 0 0.0 0 0
4. 1986 . . . . 0 0 0.0 0 0
5. 1987 . . . . 0 0 0.0 0 0
6. 1988 . . . . 0 0 0.0 0 0
7. 1989 . . . . 0 0 0.0 0 0
8. 1990 . . . . 0 0 0.0 0 0
9. 1991 . . . . 0 0 0.0 0 0
10. 1992 . . . . 0 0 0.0 0 0
11. 1993 . . . . 0 0 0.0 0 0
- --------------------------------------------------------------------------------------------------
12. Totals. . . . 0 0 X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
67
<PAGE> 39
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 1E - COMMERCIAL MULTIPLE PERIL
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
------------------------------- ---------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were ---------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2-3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X 0 0 0 0
2. 1984 . . . . 0 0 0 0 0 0 0
3. 1985 . . . . 0 0 0 0 0 0 0
4. 1986 . . . . 0 0 0 0 0 0 0
5. 1987 . . . . 0 0 0 0 0 0 0
6. 1988 . . . . 0 0 0 0 0 0 0
7. 1989 . . . . 0 0 0 0 0 0 0
8. 1990 . . . . 0 0 0 0 0 0 0
9. 1991 . . . . 0 0 0 0 0 0 0
10. 1992 . . . . 0 0 0 0 0 0 0
11. 1993 . . . . 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
</TABLE>
<TABLE>
<CAPTION>
1 Loss and Loss Expense Payments
--------------------------------------------
Years 9 10 11 12
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . 0 0 0 X X X X
2. 1984 . . . . 0 0 0 0
3. 1985 . . . . 0 0 0 0
4. 1986 . . . . 0 0 0 0
5. 1987 . . . . 0 0 0 0
6. 1988 . . . . 0 0 0 0
7. 1989 . . . . 0 0 0 0
8. 1990 . . . . 0 0 0 0
9. 1991 . . . . 0 0 0 0
10. 1992 . . . . 0 0 0 0
11. 1993 . . . . 0 0 0 0
- --------------------------------------------------------------------------------
12. Totals. . . . 0 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1
Losses Unpaid Allocated Loss Expenses Unpaid
Years ----------------------------------------- -----------------------------------------
in Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were -------------------- ------------------- ------------------- ------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0 0 0 0 0 0 0 0
2. 1984 . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . 0 0 0 0 0 0 0 0
4. 1986 . . . . 0 0 0 0 0 0 0 0
5. 1987 . . . . 0 0 0 0 0 0 0 0
6. 1988 . . . . 0 0 0 0 0 0 0 0
7. 1989 . . . . 0 0 0 0 0 0 0 0
8. 1990 . . . . 0 0 0 0 0 0 0 0
9. 1991 . . . . 0 0 0 0 0 0 0 0
10. 1992 . . . . 0 0 0 0 0 0 0 0
11. 1993 . . . . 0 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
12. Totals . . . 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . 0 0 0 0
2. 1984 . . . . 0 0 0 0
3. 1985 . . . . 0 0 0 0
4. 1986 . . . . 0 0 0 0
5. 1987 . . . . 0 0 0 0
6. 1988 . . . . 0 0 0 0
7. 1989 . . . . 0 0 0 0
8. 1990 . . . . 0 0 0 0
9. 1991 . . . . 0 0 0 0
10. 1992 . . . . 0 0 0 0
11. 1993 . . . . 0 0 0 0
- ---------------------------------------------------------------------------------
12. Totals. . . . 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Total Losses and Loss and Loss Expense Percentage
Years Loss Expenses Incurred (Incurred/Premiums Earned)
in Which --------------------------------- ------------------------------------
Premiums Were 25 26 27 28 29 30
Earned and
Losses Were Direct Direct
Incurred and Assumed Ceded Net* and Assumed Ceded Net
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X X X X X X X X X X X X X
2. 1984 . . . . 0 0 0 0.0 0.0 0.0
3. 1985 . . . . 0 0 0 0.0 0.0 0.0
4. 1986 . . . . 0 0 0 0.0 0.0 0.0
5. 1987 . . . . 0 0 0 0.0 0.0 0.0
6. 1988 . . . . 0 0 0 0.0 0.0 0.0
7. 1989 . . . . 0 0 0 0.0 0.0 0.0
8. 1990 . . . . 0 0 0 0.0 0.0 0.0
9. 1991 . . . . 0 0 0 0.0 0.0 0.0
10. 1992 . . . . 0 0 0 0.0 0.0 0.0
11. 1993 . . . . 0 0 0 0.0 0.0 0.0
- ------------------------------------------------------------------------------------------------
12. Totals . . . X X X X X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Discount for Time Net Balance Sheet Reserves
Years Value of Money 33 After Discount
in Which ----------------------- --------------------------
Premiums Were 31 32 Inter-Company 34 35
Earned and Pooling Loss
Losses Were Loss Participation Losses Expenses
Incurred Loss Expense Percentage Unpaid Unpaid
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . 0 0 X X X X 0 0
2. 1984 . . . . 0 0 0.0 0 0
3. 1985 . . . . 0 0 0.0 0 0
4. 1986 . . . . 0 0 0.0 0 0
5. 1987 . . . . 0 0 0.0 0 0
6. 1988 . . . . 0 0 0.0 0 0
7. 1989 . . . . 0 0 0.0 0 0
8. 1990 . . . . 0 0 0.0 0 0
9. 1991 . . . . 0 0 0.0 0 0
10. 1992 . . . . 0 0 0.0 0 0
11. 1993 . . . . 0 0 0.0 0 0
- ----------------------------------------------------------------------------------------------------
12. Totals. . . . 0 0 X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
68
<PAGE> 40
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
..........................................
(Name)
SCHEDULE P -- PART 1F -- SECTION 1 -- MEDICAL MALPRACTICE -- OCCURRENCE
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
--------------------------- ------------------------------
Years 2 3 4 Loss Payments
in Which ------------------------------
Premiums Were
Earned and Direct Net 5 6
Losses Were and Ceded (2 - 3) Direct
Incurred Assumed and Assumed Ceded
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Price...... X X X X X X X X X X X X 0 0
2. 1984....... 0 0 0 0 0
3. 1985....... 0 0 0 0 0
4. 1986....... 0 0 0 0 0
5. 1987....... 0 0 0 0 0
6. 1988....... 0 0 0 0 0
7. 1989....... 0 0 0 0 0
8. 1990....... 0 0 0 0 0
9. 1991....... 0 0 0 0 0
10. 1992...... 0 0 0 0 0
11. 1993....... 12 12 0 0 0
- -------------------------------------------------------------------------------------
12. Totals..... X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
------------------------------
1 Allocated Loss
Years Expense Payments 9 10 11 12
in Which ----------------------- Number
Premiums Were Salvage Unallocated Total of Claims
Earned and 7 8 and Loss Net Paid Reported -
Losses Were Direct Subrogation Expense (5 - 6 + 7 Direct and
Incurred and Assumed Ceded Received Payments - 8 + 10) Assumed
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Price..... 0 0 0 0 0 X X X X
2. 1984...... 0 0 0 0 0 0
3. 1985...... 0 0 0 0 0 0
4. 1986...... 0 0 0 0 0 0
5. 1987...... 0 0 0 0 0 0
6. 1988...... 0 0 0 0 0 0
7. 1989...... 0 0 0 0 0 0
8. 1990...... 0 0 0 0 0 0
9. 1991...... 0 0 0 0 0 0
10. 1992...... 0 0 0 0 0 0
11. 1993...... 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------
12. Totals... 0 0 0 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
Losses Unpaid Allocated Loss Expenses Unpaid
1 ------------------------------------------------------------------------------
Years Case Basis Bulk + IBNR Case Basis Bulk + IBNR
in Which ------------------------------------------------------------------------------
Premiums Were 13 14 15 16 17 18 19 20
Earned and Direct Direct Direct Direct
Losses Were and and and and
Incurred Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Price...... 0 0 0 0 0 0 0 0
2. 1984....... 0 0 0 0 0 0 0 0
3. 1985....... 0 0 0 0 0 0 0 0
4. 1986....... 0 0 0 0 0 0 0 0
5. 1987....... 0 0 0 0 0 0 0 0
6. 1988....... 0 0 0 0 0 0 0 0
7. 1989....... 0 0 0 0 0 0 0 0
8. 1990....... 0 0 0 0 0 0 0 0
9. 1991....... 0 0 0 0 0 0 0 0
10. 1992....... 0 0 0 0 0 0 0 0
11. 1993....... 0 0 7 6 0 0 0 0
- ------------------------------------------------------------------------------------------------
12. Totals..... 0 0 7 6 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1 21 22 23 24
Years Number
in Which of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior..... 0 0 0 0
2. 1984...... 0 0 0 0
3. 1985...... 0 0 0 0
4. 1986...... 0 0 0 0
5. 1987...... 0 0 0 0
6. 1988...... 0 0 0 0
7. 1989...... 0 0 0 0
8. 1990...... 0 0 0 0
9. 1991...... 0 0 0 0
10. 1992...... 0 0 0 0
11. 1993...... 0 0 1 0
- --------------------------------------------------------------------------------
12. Totals... 0 0 1 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage
in Which Loss Expenses Incurred (Incurred/Premiums Earned)
Premiums Were ------------------------------------- -------------------------------------------
Earned and 25 26 27 28 29 30
Losses Were Direct Direct
Incurred and Assumed Ceded Net * and Assumed Ceded Net
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior..... X X X X X X X X X X X X X X X X X X X X X X X X
2. 1984...... 0 0 0 0.0 0.0 0.0
3. 1985...... 0 0 0 0.0 0.0 0.0
4. 1986...... 0 0 0 0.0 0.0 0.0
5. 1987...... 0 0 0 0.0 0.0 0.0
6. 1988...... 0 0 0 0.0 0.0 0.0
7. 1989...... 0 0 0 0.0 0.0 0.0
8. 1990...... 0 0 0 0.0 0.0 0.0
9. 1991...... 0 0 0 0.0 0.0 0.0
10. 1992...... 0 0 0 0.0 0.0 0.0
11. 1993...... 7 6 1 58.3 50.0 0.0
- ---------------------------------------------------------------------------------------------------------
12. Totals... X X X X X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
Discount for Time Net Balance Sheet Reserves
1 Value of Money 33 After Discount
Years --------------------- --------------------------
in Which 31 32 34 35
Premiums Were Inter-Company
Earned and Pooling Loss
Losses Were Loss Participation Losses Expenses
Incurred Loss Expense Percentage Unpaid Unpaid
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior..... 0 0 X X X X 0 0
2. 1984...... 0 0 0.0 0 0
3. 1985...... 0 0 0.0 0 0
4. 1986...... 0 0 0.0 0 0
5. 1987...... 0 0 0.0 0 0
6. 1988...... 0 0 0.0 0 0
7. 1989...... 0 0 0.0 0 0
8. 1990...... 0 0 0.0 0 0
9. 1991...... 0 0 0.0 0 0
10. 1992...... 0 0 0.0 0 0
11. 1993...... 0 0 0.0 1 0
- -----------------------------------------------------------------------------------------
12. Totals... 0 0 X X X X 1 0
</TABLE>
*Net = (25-26) = (11+23)
69
<PAGE> 41
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 1F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
------------------------------- --------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were ------------------------ ------------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... X X X X X X X X X X X X 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0
11. 1993..... 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
</TABLE>
<TABLE>
<CAPTION>
Loss and Expense Payments Made
1 ----------------------------------------------
Years 9 10 11 12
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7) Direct and
Incurred Received Payments - 8 + 10) Assumed
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 X X X X
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 0 0 0
6. 1988..... 0 0 0 0
7. 1989..... 0 0 0 0
8. 1990..... 0 0 0 0
9. 1991..... 0 0 0 0
10. 1992..... 0 0 0 0
11. 1993..... 0 0 0 0
- -------------------------------------------------------------------------------------
12. Totals .. 0 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- --------------------------------------------------
in Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were 13 14 15 16 17 18 19 20
Earned and --------------------- ----------------------------- ------------------------- ----------------------
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... 0 0 0 0 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0 0
11. 1993..... 0 0 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------
12. Totals .. 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expense and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 0
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 0 0 0
6. 1988..... 0 0 0 0
7. 1989..... 0 0 0 0
8. 1990..... 0 0 0 0
9. 1991..... 0 0 0 0
10. 1992..... 0 0 0 0
11. 1993..... 0 0 0 0
- ---------------------------------------------------------------------------------
12. Totals .. 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ------------------------------------ ----------------------------------------- ----------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- -----------------------------------------------------------------------------------------------------------------------------------
<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
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. 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
</TABLE>
<TABLE>
<CAPTION>
1 33 Net Balance Sheet Reserves
Years After Discount
in Which ---------------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling
Losses Were Participation Losses Loss Expenses
Incurred Percentage Unpaid Unpaid
- --------------------------------------------------------------------------
<S> <C> <C> <C>
1. Prior ... X X X X 0 0
2. 1984..... 0.0 0 0
3. 1985..... 0.0 0 0
4. 1986..... 0.0 0 0
5. 1987..... 0.0 0 0
6. 1988..... 0.0 0 0
7. 1989..... 0.0 0 0
8. 1990..... 0.0 0 0
9. 1991..... 0.0 0 0
10. 1992..... 0.0 0 0
11. 1993..... 0.0 0 0
- --------------------------------------------------------------------------
12. Totals .. X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
70
<PAGE> 42
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 1G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT (ALL PERILS),
BOILER AND MACHINERY)
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
------------------------------- --------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were ------------------------ ------------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... X X X X X X X X X X X X 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0
11. 1993..... 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
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 ---------------------------------------------
Years 9 10 11 12
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 X X X X
2. 1984..... 0 0 0 X X X X
3. 1985..... 0 0 0 X X X X
4. 1986..... 0 0 0 X X X X
5. 1987..... 0 0 0 X X X X
6. 1988..... 0 0 0 X X X X
7. 1989..... 0 0 0 X X X X
8. 1990..... 0 0 0 X X X X
9. 1991..... 0 0 0 X X X X
10. 1992..... 0 0 0 X X X X
11. 1993..... 0 0 0 X X X X
- --------------------------------------------------------------------------------------
12. Totals .. 0 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- --------------------------------------------------
in Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were -------------------- -------------------------- ------------------------ ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ...
2. 1984..... 0 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0 0
11. 1993..... 0 0 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------
12. Totals .. 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1 21 22 23 24
Years Number of
in Which Salvage Unallocated Total Claims
Premiums Were and Loss Net Losses Outstanding -
Earned and Subrogation Expenses and Expenses Direct and
Losses Were Anticipated Unpaid Unpaid Assumed
Incurred -----------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 0
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 0 0 0
6. 1988..... 0 0 0 0
7. 1989..... 0 0 0 0
8. 1990..... 0 0 0 0
9. 1991..... 0 0 0 0
10. 1992..... 0 0 0 0
11. 1993..... 0 0 0 0
- ---------------------------------------------------------------------------------
12. Totals .. 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ------------------------------------ ----------------------------------------- ----------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <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
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. 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
</TABLE>
<TABLE>
<CAPTION>
1 33 Net Balance Sheet Reserves
Years After Discount
in Which ---------------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling
Losses Were Participation Losses Loss Expenses
Incurred Percentage Unpaid Unpaid
- --------------------------------------------------------------------------
<S> <C> <C> <C>
1. Prior ... X X X X 0 0
2. 1984..... 0.0 0 0
3. 1985..... 0.0 0 0
4. 1986..... 0.0 0 0
5. 1987..... 0.0 0 0
6. 1988..... 0.0 0 0
7. 1989..... 0.0 0 0
8. 1990..... 0.0 0 0
9. 1991..... 0.0 0 0
10. 1992..... 0.0 0 0
11. 1993..... 0.0 0 0
- --------------------------------------------------------------------------
12. Totals .. X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
71
<PAGE> 43
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 1H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
--------------------------------- --------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were ------------------------- ------------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... X X X X X X X X X X X X 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0
11. 1993..... 2,565 2,374 191 0 0 1 1
- -------------------------------------------------------------------------------------------------------------------
12. Totals .. X X X X X X X X X X X X 0 0 1 1
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 ---------------------------------------------
Years 9 10 11 12
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 X X X X
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 0 0 0
6. 1988..... 0 0 0 0
7. 1989..... 0 0 0 0
8. 1990..... 0 0 0 0
9. 1991..... 0 0 0 0
10. 1992..... 0 0 0 0
11. 1993..... 0 61 61 4
- -------------------------------------------------------------------------------------
12. Totals .. 0 61 61 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ----------------------------------------------------- --------------------------------------------------
in Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ----------------------- ----------------------------- ------------------------ ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... 0 0 0 0 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0 0
11. 1993..... 6 5 1,379 1,270 1 1 69 64
- -----------------------------------------------------------------------------------------------------------------------
12. Totals .. 6 5 1,379 1,270 1 1 69 64
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding
Losses Were Subrogation Expense and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 0
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 0 0 0
6. 1988..... 0 0 0 0
7. 1989..... 0 0 0 0
8. 1990..... 0 0 0 0
9. 1991..... 0 0 0 0
10. 1992..... 0 0 0 0
11. 1993..... 0 5 120 3
- -----------------------------------------------------------------------------
12. Totals .. 0 5 120 3
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ------------------------------------ ------------------------------------------- ----------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- --------------------------------------------------------------------------------------------------------------------------------
<S> <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
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..... 1,522 1,341 181 59.3 56.5 94.8 0 0
- --------------------------------------------------------------------------------------------------------------------------------
12. Totals .. X X X X X X X X X X X X X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
1 33 Net Balance Sheet Reserves
Years After Discount
in Which ---------------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling
Losses Were Participation Losses Loss Expenses
Incurred Percentage Unpaid Unpaid
- --------------------------------------------------------------------------
<S> <C> <C> <C>
1. Prior ... X X X X 0 0
2. 1984..... 0.0 0 0
3. 1985..... 0.0 0 0
4. 1986..... 0.0 0 0
5. 1987..... 0.0 0 0
6. 1988..... 0.0 0 0
7. 1989..... 0.0 0 0
8. 1990..... 0.0 0 0
9. 1991..... 0.0 0 0
10. 1992..... 0.0 0 0
11. 1993..... 0.0 110 10
- --------------------------------------------------------------------------
12. Totals .. X X X X 110 10
</TABLE>
*Net = (25 - 26) = (11 + 23)
72
<PAGE> 44
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 1H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
(000 Omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
-------------------------------- ----------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were ------------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... X X X X X X X X X X X X 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0
11. 1993..... 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
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 -----------------------------------------
Years 9 10 11 12
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0 X X X X
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 0 0 0
6. 1988..... 0 0 0 0
7. 1989..... 0 0 0 0
8. 1990..... 0 0 0 0
9. 1991..... 0 0 0 0
10. 1992..... 0 0 0 0
11. 1993..... 0 0 0 0
- --------------------------------------------------------------------------------
12. Totals .. 0 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1
Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- --------------------------------------------------
in Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were --------------------- ------------------------- --------------------- ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... 0 0 0 0 0 0 0 0
2. 1984..... 0 0 0 0 0 0 0 0
3. 1985..... 0 0 0 0 0 0 0 0
4. 1986..... 0 0 0 0 0 0 0 0
5. 1987..... 0 0 0 0 0 0 0 0
6. 1988..... 0 0 0 0 0 0 0 0
7. 1989..... 0 0 0 0 0 0 0 0
8. 1990..... 0 0 0 0 0 0 0 0
9. 1991..... 0 0 0 0 0 0 0 0
10. 1992..... 0 0 0 0 0 0 0 0
11. 1993..... 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
12. Totals... 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 0
2. 1984..... 0 0 0 0
3. 1985..... 0 0 0 0
4. 1986..... 0 0 0 0
5. 1987..... 0 0 0 0
6. 1988..... 0 0 0 0
7. 1989..... 0 0 0 0
8. 1990..... 0 0 0 0
9. 1991..... 0 0 0 0
10. 1992..... 0 0 0 0
11. 1993..... 0 0 0 0
- ---------------------------------------------------------------------
12. Totals... 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ---------------------------------- -------------------------------------- --------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- ---------------------------------------------------------------------------------------------------------------------------
<S> <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
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. 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
</TABLE>
<TABLE>
<CAPTION>
Net Balance Sheet Reserves
After Discount
33 ---------------------------
Inter-Company 34 35
Pooling Loss
Participation Losses Expenses
Percentage Unpaid Unpaid
- ----------------------------------------------------------------
<S> <C> <C> <C>
1. Prior ... X X X X 0 0
2. 1984..... 0.0 0 0
3. 1985..... 0.0 0 0
4. 1986..... 0.0 0 0
5. 1987..... 0.0 0 0
6. 1988..... 0.0 0 0
7. 1989..... 0.0 0 0
8. 1990..... 0.0 0 0
9. 1991..... 0.0 0 0
10. 1992..... 0.0 0 0
11. 1993..... 0.0 0 0
- ----------------------------------------------------------------
12. Totals .. X X X X 0 0
</TABLE>
73
<PAGE> 45
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
................................
(Name)
<TABLE>
<CAPTION>
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
Which Expense Payments
Premiums Were ------------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... X X X X X X X X X X X X 0 0 0 0
2. 1992..... 0 0 0 0 0 0 0
3. 1993..... 1,110 1,083 27 90 88 7 7
- ---------------------------------------------------------------------------------------------------------------
4. Totals .. X X X X X X X X X X X X 90 88 7 7
</TABLE>
<TABLE>
<CAPTION>
1 Loss and Loss Expense Payments
-----------------------------------------
Years 9 10 11 12
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 X X X X
2. 1992..... 0 0 0 X X X X
3. 1993..... 0 17 19 X X X X
- -------------------------------------------------------------------------------
4. Totals .. 0 17 19 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1
Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- --------------------------------------------------
Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were --------------------- ------------------------- --------------------- ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... 0 0 0 0 0 0 0 0
2. 1992..... 0 0 0 0 0 0 0 0
3. 1993..... 314 307 332 325 9 9 16 16
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals .. 314 307 332 325 9 9 16 16
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 0
2. 1992..... 0 0 0 0
3. 1993..... 0 0 14 12
- ---------------------------------------------------------------------
4. Totals .. 0 0 14 12
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ---------------------------------- -------------------------------------- --------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- ---------------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1992..... 0 0 0 0.0 0.0 0.0 0 0
3. 1993..... 785 752 33 70.7 69.4 122.2 0 0
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals .. X X X X X X X X X X X X X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Net Balance Sheet Reserves
Years After Discount
Which 33 --------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- ----------------------------------------------------------------
<S> <C> <C> <C>
1. Prior ... X X X X 0 0
2. 1992..... 0.0 0 0
3. 1993..... 0.0 14 0
- ----------------------------------------------------------------
4. Totals .. X X X X 14 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
SCHEDULE P - PART 1J - AUTO PHYSICAL DAMAGE
(000 omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
1 -------------------------------- ----------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
Which Expense Payments
Premiums Were ------------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... X X X X X X X X X X X X 0 0 0 0
2. 1992..... 0 0 0 0 0 0 0
3. 1993..... 976 868 108 419 372 0 0
- -----------------------------------------------------------------------------------------------------------------
4. Totals .. X X X X X X X X X X X X 419 372 0 0
</TABLE>
<TABLE>
<CAPTION>
1 Loss and Loss Expense Payments
-----------------------------------------
Years 9 10 11 12
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0 X X X X
2. 1992..... 0 0 0 0
3. 1993..... 1 29 76 137
-------------------------------------------------------------------------------
4. Totals... 1 29 76 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1
Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- --------------------------------------------------
Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were --------------------- ------------------------- --------------------- ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... 0 0 0 0 0 0 0 0
2. 1992..... 0 0 0 0 0 0 0 0
3. 1993..... 161 143 186 166 0 0 9 8
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals... 161 143 186 166 0 0 9 8
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding
Losses Were Subrogation Expense and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0 0
2. 1992..... 0 0 0 0
3. 1993..... 0 1 40 51
- ---------------------------------------------------------------------------------------
4. Totals... 0 1 40 51
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ---------------------------------- -------------------------------------- --------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- ---------------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1992..... 0 0 0 0.0 0.0 0.0 0 0
3. 1993..... 805 689 116 82.5 79.4 107.4 0 0
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals .. X X X X X X X X X X X X X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
1 Net Balance Sheet Reserves
After Discount
Years ---------------------------
Which 33
Premiums Were Inter-Company 34 35
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- ----------------------------------------------------------------
<S> <C> <C> <C>
1. Prior ... X X X X 0 0
2. 1992..... 0.0 0 0
3. 1993..... 0.0 38 2
- ----------------------------------------------------------------
4. Totals .. X X X X 38 2
</TABLE>
*Net = (25 - 26) = (11 + 23)
74
<PAGE> 46
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 1K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAGE GUARANTY
(000 Omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
-------------------------------- ----------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
Which Expense Payments
Premiums Were ------------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior ... X X X X X X X X X X X X 0 0 0 0
2. 1992..... 0 0 0 0 0 0 0
3. 1993..... 0 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------
4. Totals .. X X X X X X X X X X X X 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 -----------------------------------------
Years 9 10 11 12
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0 X X X X
2. 1992..... 0 0 0 X X X X
3. 1993..... 0 0 0 X X X X
- ------------------------------------------------------------------------------
4. Totals... 0 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- --------------------------------------------------
Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were --------------------- ------------------------- --------------------- ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... 0 0 0 0 0 0 0 0
2. 1992..... 0 0 0 0 0 0 0 0
3. 1993..... 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals... 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct and
Incurred Anticipated Unpaid Unpaid Assumed
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0 0
2. 1992..... 0 0 0 0
3. 1993..... 0 0 0 0
- ---------------------------------------------------------------------
4. Totals... 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ---------------------------------- -------------------------------------- --------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- -------------------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1992..... 0 0 0 0.0 0.0 0.0 0 0
3. 1993..... 0 0 0 0.0 0.0 0.0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
4. Totals... X X X X X X X X X X X X X X X X X X X X X X X X 0 0
</TABLE>
<TABLE>
<CAPTION>
1 Net Balance Sheet Reserves
Years After Discount
Which 33 ---------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- -------------------------------------------------------------------
<S> <C> <C> <C>
1. Prior.... X X X X 0 0
2. 1992..... 0.0 0 0
3. 1993..... 0.0 0 0
- -------------------------------------------------------------------
4. Totals... X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
SCHEDULE P - PART 1L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH
(000 Omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
1 -------------------------------- ----------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
Which Expense Payments
Premiums Were ------------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2 - 3) Direct Direct
Incurred Assumed and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... X X X X X X X X X X X X 0 0 0 0
2. 1992..... 0 0 0 0 0 0 0
3. 1993..... 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------
4. Totals .. X X X X X X X X X X X X 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 -----------------------------------------
Years 9 10 11 12
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior ... 0 0 0 X X X X
2. 1992..... 0 0 0 X X X X
3. 1993..... 0 0 0 X X X X
- -----------------------------------------------------------------------------------
4. Totals .. 0 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years -------------------------------------------------- --------------------------------------------------
Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were --------------------- ------------------------- --------------------- ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... 0 0 0 0 0 0 0 0
2. 1992..... 0 0 0 0 0 0 0 0
3. 1993..... 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals... 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expense and Expenses Direct and
Incurred Anticipated Payment Unpaid Assumed
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0 0
2. 1992..... 0 0 0 0
3. 1993..... 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals... 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ---------------------------------- -------------------------------------- --------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- ---------------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1992..... 0 0 0 0.0 0.0 0.0 0 0
3. 1993..... 0 0 0 0.0 0.0 0.0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
4. Totals... X X X X X X X X X X X X X X X X X X X X X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
<TABLE>
<CAPTION>
1 Net Balance Sheet Reserves
Years After Discount
Which 33 ---------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- ----------------------------------------------------------------
<S> <C> <C> <C>
1. Prior.... X X X X 0 0
2. 1992..... 0.0 0 0
3. 1993..... 0.0 0 0
- ----------------------------------------------------------------
4. Totals... X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
75
<PAGE> 47
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 1M - INTERNATIONAL
(000 omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
--------------------------- ----------------------------------------------------------
Allocated Loss
1 Loss Payments Expense Payments
Years --------------- ----------------
in Which 9
Premiums Were 2 3 4 5 6 7 8 Salvage
Earned and Direct Direct and
Losses Were and Net and Direct Subrogation
Incurred Assumed Ceded (2 - 3) Assumed Ceded and Assumed Ceded Received
- --------------------------------------------------------------------------------------------------------------
<S> <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
2. 1984 . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . 0 0 0 0 0 0 0 0
4. 1986 . . . . 0 0 0 0 0 0 0 0
5. 1987 . . . . 0 0 0 0 0 0 0 0
6. 1988 . . . . 0 0 0 0 0 0 0 0
7. 1989 . . . . 0 0 0 0 0 0 0 0
8. 1990 . . . . 0 0 0 0 0 0 0 0
9. 1991 . . . . 0 0 0 0 0 0 0 0
10. 1992 . . . . 0 0 0 0 0 0 0 0
11. 1993 . . . . 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
</TABLE>
<TABLE>
<CAPTION> Loss and Loss
1 Expense Payments
Years -------------------------- 12
in Which 10 11 Number of
Premiums Were Unallocated Total Claims
Earned and Loss Net Paid Reported -
Losses Were Expense (5 - 6 + 7 Direct and
Incurred Payments - 8 + 10) Assumed
- ------------------------------------------------------------
<S> <C> <C> <C>
1. 1984 . . . . 0 0 X X X X
2. 1984 . . . . 0 0 X X X X
3. 1985 . . . . 0 0 X X X X
4. 1986 . . . . 0 0 X X X X
5. 1987 . . . . 0 0 X X X X
6. 1988 . . . . 0 0 X X X X
7. 1989 . . . . 0 0 X X X X
8. 1990 . . . . 0 0 X X X X
9. 1991 . . . . 0 0 X X X X
10. 1992 . . . . 0 0 X X X X
11. 1993 . . . . 0 0 X X X X
- ------------------------------------------------------------
12. Totals . . . 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
Losses Unpaid Allocated Loss Expenses Unpaid
1 --------------------------------------------- --------------------------------------------------
Years
in Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ----------------------- ----------------------- --------------------- ------------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior. . . . 0 0 0 0 0 0 0 0
2. 1984 . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . 0 0 0 0 0 0 0 0
4. 1986 . . . . 0 0 0 0 0 0 0 0
5. 1987 . . . . 0 0 0 0 0 0 0 0
6. 1988 . . . . 0 0 0 0 0 0 0 0
8. 1990 . . . . 0 0 0 0 0 0 0 0
9. 1991 . . . . 0 0 0 0 0 0 0 0
10. 1992 . . . . 0 0 0 0 0 0 0 0
11. 1993 . . . . 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
12. Totals . . . 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding-
Losses Were Subrogation Expenses and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior. . . . 0 0 0 0
2. 1984 . . . . 0 0 0 0
3. 1985 . . . . 0 0 0 0
4. 1986 . . . . 0 0 0 0
5. 1987 . . . . 0 0 0 0
6. 1988 . . . . 0 0 0 0
7. 1989 . . . . 0 0 0 0
8. 1990 . . . . 0 0 0 0
9. 1991 . . . . 0 0 0 0
10. 1992 . . . . 0 0 0 0
11. 1993 . . . . 0 0 0 0
- ----------------------------------------------------------------------------------
12. Totals . . . 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ---------------------------- ------------------------------- -----------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net* and Assumed Ceded Net Loss Expense
- -------------------------------------------------------------------------------------------------------
<S> <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
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. 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
</TABLE>
<TABLE>
<CAPTION>
Net Balance Sheet Reserves
1 After Discount
Years -------------------------
in Which 33 34 35
Premiums Were Inter-Company
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- ------------------------------------------------------------
<S> <C> <C> <C>
1. Prior. . . . X X X X 0 0
2. 1984 . . . . 0.0 0 0
3. 1985 . . . . 0.0 0 0
4. 1986 . . . . 0.0 0 0
5. 1987 . . . . 0.0 0 0
6. 1988 . . . . 0.0 0 0
7. 1989 . . . . 0.0 0 0
8. 1990 . . . . 0.0 0 0
9. 1991 . . . . 0.0 0 0
10. 1992 . . . . 0.0 0 0
11. 1993 . . . . 0.0 0 0
- ------------------------------------------------------------
12. Totals . . . X X X X 0 0
</TABLE>
*Net = (25-26) = (11+23)
76
<PAGE> 48
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 1N - REINSURANCE A
(000 omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
---------------------------- ------------------------------------
1 Loss Payments Allocated Loss
Years ------------- Expense Payments
Which ---------------- 9
Premiums Were 2 3 4 5 6 Salvage
Earned and Direct 7 8 and
Losses Were and Net Direct Direct Subrogation
Incurred Assumed Ceded (2 - 3) and Assumed Ceded and Assumed Ceded Received
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 0 0 0 0 0
2. 1989 . . . . 0 0 0 0 0 0 0 0
3. 1990 . . . . 0 0 0 0 0 0 0 0
4. 1991 . . . . 0 0 0 0 0 0 0 0
5. 1992 . . . . 0 0 0 0 0 0 0 0
6. 1993 . . . . 0 0 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------
7. Totals . . . X X X X X X X X X X X X 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 -----------------------------------
Years 10 11 12
Which Number of
Premiums Were Unallocated Total Claims
Earned and Loss Net Paid Reported -
Losses Were Expense (5 - 6 + 7 Direct and
Incurred Payments - 8 + 10) Assumed
- ----------------------------------------------------------
<S> <C> <C> <C>
1. 1988 . . . . 0 0 X X X X
2. 1989 . . . . 0 0 X X X X
3. 1990 . . . . 0 0 X X X X
4. 1991 . . . . 0 0 X X X X
5. 1992 . . . . 0 0 X X X X
6. 1993 . . . . 0 0 X X X X
- ----------------------------------------------------------
7. Totals . . . 0 0 X X X X
</TABLE>
NOTE: Report cumulative amounts paid or received for specific years. Report
loss payments net of salvage and subrogation received.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ------------------------------------ -------------------------------------
Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ---------- ----------- ---------- -----------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 0 0 0 0 0
2. 1989 . . . . 0 0 0 0 0 0 0 0
3. 1990 . . . . 0 0 0 0 0 0 0 0
4. 1991 . . . . 0 0 0 0 0 0 0 0
5. 1992 . . . . 0 0 0 0 0 0 0 0
6. 1993 . . . . 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
7. Totals . . . 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding-
Losses Were Subrogation Expense and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 X X X X
2. 1989 . . . . 0 0 0 X X X X
3. 1990 . . . . 0 0 0 X X X X
4. 1991 . . . . 0 0 0 X X X X
5. 1992 . . . . 0 0 0 X X X X
6. 1993 . . . . 0 0 0 X X X X
- -----------------------------------------------------------------------------
7. Totals . . . 0 0 0 X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ------------------------------ -------------------------------- -------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net* and Assumed Ceded Net Loss Expense
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 0.0 0.0 0.0 0 0
2. 1989 . . . . 0 0 0 0.0 0.0 0.0 0 0
3. 1990 . . . . 0 0 0 0.0 0.0 0.0 0 0
4. 1991 . . . . 0 0 0 0.0 0.0 0.0 0 0
5. 1992 . . . . 0 0 0 0.0 0.0 0.0 0 0
6. 1993 . . . . 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
</TABLE>
<TABLE>
<CAPTION>
Net Balance Sheet Reserves
1 After Discount
Years -------------------------
Which 33 34 35
Premiums Were Inter-Company
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- ----------------------------------------------------------
<S> <C> <C> <C>
1. 1988 . . . . 0.0 0 0
2. 1989 . . . . 0.0 0 0
3. 1990 . . . . 0.0 0 0
4. 1991 . . . . 0.0 0 0
5. 1992 . . . . 0.0 0 0
6. 1993 . . . . 0.0 0 0
- ----------------------------------------------------------
7. Total . . . XXXX 0 0
</TABLE>
*Net = (25-26) = (11+23)
SCHEDULE P - PART 10 - REINSURANCE B
(000 omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
-------------------------------------- -----------------------------------------------
1 Loss Payments Allocated Loss
Years ------------- Expense Payments
Which ------------------- 9
Premiums Were 2 3 4 Salvage
Earned and Direct 5 6 7 8 and
Losses Were and Net Direct Direct Subrogation
Incurred Assumed Ceded (2 - 3) and Assumed Ceded and Assumed Ceded Received
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 0 0 0 0 0
2. 1989 . . . . 0 0 0 0 0 0 0 0
3. 1990 . . . . 0 0 0 0 0 0 0 0
4. 1991 . . . . 0 0 0 0 0 0 0 0
5. 1992 . . . . 0 0 0 0 0 0 0 0
6. 1993 . . . . 0 0 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------
7. Totals . . . X X X X X X X X X X X X 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION> Loss and Loss Expense Payments
1 --------------------------------
Years 10 11 12
Which Number of
Premiums Were Unallocated Total Claims
Earned and Loss Net Paid Reported -
Losses Were Expense (5 - 6 + 7 Direct and
Incurred Payments - 8 + 10) Assumed
- --------------------------------------------------------------
<S> <C> <C> <C>
1. 1988 . . . . 0 0 X X X X
2. 1989 . . . . 0 0 X X X X
3. 1990 . . . . 0 0 X X X X
4. 1991 . . . . 0 0 X X X X
5. 1992 . . . . 0 0 X X X X
6. 1993 . . . . 0 0 X X X X
- --------------------------------------------------------------
7. Totals . . . 0 0 X X X X
</TABLE>
Note: Report cumulative amounts paid or received for specific years.
Report loss payments net of salvage and subrogation received.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years --------------------------------- -------------------------------------------------
Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ---------- ----------- ---------- -----------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 0 0 0 0 0
2. 1989 . . . . 0 0 0 0 0 0 0 0
3. 1990 . . . . 0 0 0 0 0 0 0 0
4. 1991 . . . . 0 0 0 0 0 0 0 0
5. 1992 . . . . 0 0 0 0 0 0 0 0
6. 1993 . . . . 0 0 0 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------
7. Totals . . . 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 24
Which 21 22 23 Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expense and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 X X X X
2. 1989 . . . . 0 0 0 X X X X
3. 1990 . . . . 0 0 0 X X X X
4. 1991 . . . . 0 0 0 X X X X
5. 1992 . . . . 0 0 0 X X X X
6. 1993 . . . . 0 0 0 X X X X
- ------------------------------------------------------------------------------
7. Totals . . . 0 0 0 X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were --------------------------- --------------------------------- -------------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net* and Assumed Ceded Net Loss Expense
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 0.0 0.0 0.0 0 0
2. 1989 . . . . 0 0 0 0.0 0.0 0.0 0 0
3. 1990 . . . . 0 0 0 0.0 0.0 0.0 0 0
4. 1991 . . . . 0 0 0 0.0 0.0 0.0 0 0
5. 1992 . . . . 0 0 0 0.0 0.0 0.0 0 0
6. 1993 . . . . 0 0 0 0.0 0.0 0.0 0 0
- -----------------------------------------------------------------------------------------------------------
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 0 0
</TABLE>
<TABLE>
<CAPTION>
Net Balance Sheet Reserves
1 After Discount
Years --------------------------
Which 33
Premiums Were Inter-Company 34 35
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- --------------------------------------------------------
<S> <C> <C> <C>
1. 1988 . . . . 0.0 0 0
2. 1989 . . . . 0.0 0 0
3. 1990 . . . . 0.0 0 0
4. 1991 . . . . 0.0 0 0
5. 1992 . . . . 0.0 0 0
6. 1993 . . . . 0.0 0 0
- --------------------------------------------------------
7. Totals . . . X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
77
<PAGE> 49
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 1P - REINSURANCE C
(000 omitted)
<TABLE>
<CAPTION>
1 Loss and Loss
Expense Payments
Premiums Earned ---------------------------------------------------------------
Years ---------------------------- Loss Payments Allocated Loss
Which 2 3 4 -------------------- Expense Payments 9
Premiums Were --------------------- Salvage
Earned and Direct 5 6 7 8 and
Losses Were and Net Direct Direct Subrogation
Incurred Assumed Ceded (2 - 3) and Assumed Ceded and Assumed Ceded Received
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 0 0 0 0 0
2. 1989 . . . . 0 0 0 0 0 0 0 0
3. 1990 . . . . 0 0 0 0 0 0 0 0
4. 1991 . . . . 0 0 0 0 0 0 0 0
5. 1992 . . . . 0 0 0 0 0 0 0 0
6. 1993 . . . . 0 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------
7. Totals . . . X X X X X X X X X X X X 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss
Expense Payments
-------------------------------------------
1 10 11 12
Years
Which Number of
Premiums Were Unallocated Total Claims
Earned and Loss Net Paid Reported -
Losses Were Expense (5 - 6 + 7 Direct and
Incurred Payments - 8 + 10) Assumed
- --------------------------------------------------------------------
<S> <C> <C> <C>
1. 1988 . . . . 0 0 X X X X
2. 1989 . . . . 0 0 X X X X
3. 1990 . . . . 0 0 X X X X
4. 1991 . . . . 0 0 X X X X
5. 1992 . . . . 0 0 X X X X
6. 1993 . . . . 0 0 X X X X
- --------------------------------------------------------------------
7. Totals . . . 0 0 X X X X
</TABLE>
Note: Report cumulative amounts paid or received for specific years.
Report loss payments net of salvage and subrogation received.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ------------------------------------------------ -------------------------------------------------
Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ---------------------- ---------------------- ---------------------- ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 0 0 0 0 0
2. 1989 . . . . 0 0 0 0 0 0 0 0
3. 1990 . . . . 0 0 0 0 0 0 0 0
4. 1991 . . . . 0 0 0 0 0 0 0 0
5. 1992 . . . . 0 0 0 0 0 0 0 0
6. 1993 . . . . 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
7. Totals . . . 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding-
Losses Were Subrogation Expenses and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 X X X X
2. 1989 . . . . 0 0 0 X X X X
3. 1990 . . . . 0 0 0 X X X X
4. 1991 . . . . 0 0 0 X X X X
5. 1992 . . . . 0 0 0 X X X X
6. 1993 . . . . 0 0 0 X X X X
- --------------------------------------------------------------------------------
7. Totals . . . 0 0 0 X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ------------------------------- -------------------------------- -----------------
Earned and 25 28 32
Losses Were Direct 26 27 Direct 29 30 31 Loss
Incurred and Assumed Ceded Net* and Assumed Ceded Net Loss Expense
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 1988 . . . . 0 0 0 0.0 0.0 0.0 0 0
2. 1989 . . . . 0 0 0 0.0 0.0 0.0 0 0
3. 1990 . . . . 0 0 0 0.0 0.0 0.0 0 0
4. 1991 . . . . 0 0 0 0.0 0.0 0.0 0 0
5. 1992 . . . . 0 0 0 0.0 0.0 0.0 0 0
6. 1993 . . . . 0 0 0 0.0 0.0 0.0 0 0
- -----------------------------------------------------------------------------------------------------------------
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 0 0
</TABLE>
<TABLE>
<CAPTION>
Net Balance Sheet Reserves
1 After Discount
Years -------------------------
Which 33 34 35
Premiums Were Inter-Company
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- -----------------------------------------------------------------
<S> <C> <C> <C>
1. 1988 . . . . 0.0 0 0
2. 1989 . . . . 0.0 0 0
3. 1990 . . . . 0.0 0 0
4. 1991 . . . . 0.0 0 0
5. 1992 . . . . 0.0 0 0
6. 1993 . . . . 0.0 0 0
- -----------------------------------------------------------------
7. Totals . . . X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
SCHEDULE P - PART 1Q - REINSURANCE D
(000 omitted)
<TABLE>
<CAPTION>
1 Premiums Earned Loss and Loss Expense Payments
----------------------------- ---------------------------------------------------------------
Years Loss Payments Allocated Loss 9
Which 2 3 4 ------------- Expense Payments
Premiums Were ---------------- Salvage
Earned and Direct 5 6 7 8 and
Losses Were and Net Direct Direct Subrogation
Incurred Assumed Ceded (2 - 3) and Assumed Ceded and Assumed Ceded Received
- -------------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1984 . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . 0 0 0 0 0 0 0 0
4. 1986 . . . . 0 0 0 0 0 0 0 0
5. 1987 . . . . 0 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------
6. Totals . . . X X X X X X X X X X X X 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense
Payments
1 --------------------------
Years 10 11 12
Which Number of
Premiums Were Unallocated Total Claims
Earned and Loss Net Paid Reported -
Losses Were Expense (5 - 6 + 7 Direct and
Incurred Payments - 8 + 10) Assumed
- -----------------------------------------------------------------
<S> <C> <C> <C>
1. Prior. . . . 0 0 X X X X
2. 1984 . . . . 0 0 X X X X
3. 1985 . . . . 0 0 X X X X
4. 1986 . . . . 0 0 X X X X
5. 1987 . . . . 0 0 X X X X
- -----------------------------------------------------------------
6. Totals . . . 0 0 X X X X
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ------------------------------------------------ -------------------------------------------------
Which Case Basis Bulk & IBNR Case Basis Bulk & IBNR
Premiums Were ---------------------- ---------------------- ----------------------- ----------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior. . . . 0 0 0 0 0 0 0 0
2. 1984 . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . 0 0 0 0 0 0 0 0
4. 1986 . . . . 0 0 0 0 0 0 0 0
5. 1987 . . . . 0 0 0 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------------
6. Totals . . . 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding-
Losses Were Subrogation Expenses and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . 0 0 0 X X X X
2. 1984 . . . . 0 0 0 X X X X
3. 1985 . . . . 0 0 0 X X X X
4. 1986 . . . . 0 0 0 X X X X
5. 1987 . . . . 0 0 0 X X X X
- -----------------------------------------------------------------------------------
6. Totals . . . 0 0 0 X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were -------------------------------- -------------------------------- -----------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net* and Assumed Ceded Net Loss Expense
- -------------------------------------------------------------------------------------------------------------------
<S> <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
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
- -------------------------------------------------------------------------------------------------------------------
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 0 0
</TABLE>
<TABLE>
<CAPTION>
1 Net Balance Sheet Reserves
Years 33 After Discount
Which -------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling Loss
Losses Were Participation Losses Expenses
Incurred Percentage Unpaid Unpaid
- -------------------------------------------------------------------
<S> <C> <C> <C>
1. Prior . . . 0.0 0 0
2. 1984 . . . . 0.0 0 0
3. 1985 . . . . 0.0 0 0
4. 1986 . . . . 0.0 0 0
5. 1987 . . . . 0.0 0 0
- -------------------------------------------------------------------
6. Totals . . . X X X X 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
78
<PAGE> 50
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 1R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
(000 omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
1 ----------------------------------- ------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were ----------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2-3) Direct Ceded Direct
Incurred Assumed and Assumed and Assumed Ceded
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . XXXX XXXX XXXX 0 0 0 0
2. 1984 . . . 0 0 0 0 0 0 0
3. 1985 . . . 0 0 0 0 0 0 0
4. 1986 . . . 0 0 0 0 0 0 0
5. 1987 . . . 0 0 0 0 0 0 0
6. 1988 . . . 0 0 0 0 0 0 0
7. 1989 . . . 0 0 0 0 0 0 0
8. 1990 . . . 0 0 0 0 0 0 0
9. 1991 . . . 0 0 0 0 0 0 0
10. 1992 . . . 0 0 0 0 0 0 0
11. 1993 . . . 178 160 18 0 0 0 0
-------------------------------------------------------------------------------------------------------------------
12. Totals . . XXXX XXXX XXXX 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 ---------------------------------------------- 12
9 10 11
Years
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . 0 0 0 XXXX
2. 1984 . . . 0 0 0 0
3. 1985 . . . 0 0 0 0
4. 1986 . . . 0 0 0 0
5. 1987 . . . 0 0 0 0
6. 1988 . . . 0 0 0 0
7. 1989 . . . 0 0 0 0
8. 1990 . . . 0 0 0 0
9. 1991 . . . 0 0 0 0
10. 1992 . . . 0 0 0 0
11. 1993 . . . 0 3 3 0
-------------------------------------------------------------------------------------
12. Totals . . 0 3 3 XXXX
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years ------------------------------------------- -------------------------------------------
in Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were -------------------- ------------------- -------------------- --------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 0 0 0 0 0 0 0 0
2. 1984 . . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . . 0 0 0 0 0 0 0 0
4. 1986 . . . . . 0 0 0 0 0 0 0 0
5. 1987 . . . . . 0 0 0 0 0 0 0 0
6. 1988 . . . . . 0 0 0 0 0 0 0 0
7. 1989 . . . . . 0 0 0 0 0 0 0 0
8. 1990 . . . . . 0 0 0 0 0 0 0 0
9. 1991 . . . . . 0 0 0 0 0 0 0 0
10. 1992 . . . . . 0 0 0 0 0 0 0 0
11. 1993 . . . . . 0 0 209 196 0 0 10 9
-----------------------------------------------------------------------------------------------------------------
12. Totals . . . . 0 0 209 196 0 0 10 9
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 0 0 0 0
2. 1984 . . . . . 0 0 0 0
3. 1985 . . . . . 0 0 0 0
4. 1986 . . . . . 0 0 0 0
5. 1987 . . . . . 0 0 0 0
6. 1988 . . . . . 0 0 0 0
7. 1989 . . . . . 0 0 0 0
8. 1990 . . . . . 0 0 0 0
9. 1991 . . . . . 0 0 0 0
10. 1992 . . . . . 0 0 0 0
11. 1993 . . . . . 0 1 15 0
----------------------------------------------------------------------------------------------
12. Totals . . . . 0 1 15 0
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ----------------------------- ------------------------------- ----------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . XXXX XXXX XXXX XXXX XXXX XXXX 0 0
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 . . . . . 223 205 18 125.3 128.1 100.0 0 0
------------------------------------------------------------------------------------------------------------
12. Totals . . . . XXXX XXXX XXXX XXXX XXXX XXXX 0 0
</TABLE>
<TABLE>
<CAPTION>
1 Net Balance Sheet Reserves
Years After Discount
in Which 33 -----------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling
Losses Were Participation Losses Loss Expenses
Incurred Percentage Unpaid Unpaid
-------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Prior . . . . . XXXX 0 0
2. 1984 . . . . . 0.0 0 0
3. 1985 . . . . . 0.0 0 0
4. 1986 . . . . . 0.0 0 0
5. 1987 . . . . . 0.0 0 0
6. 1988 . . . . . 0.0 0 0
7. 1989 . . . . . 0.0 0 0
8. 1990 . . . . . 0.0 0 0
9. 1991 . . . . . 0.0 0 0
10. 1992 . . . . . 0.0 0 0
11. 1993 . . . . . 0.0 13 2
-------------------------------------------------------------------------------
12. Totals . . . . XXXX 13 2
</TABLE>
*Net - (25 - 26) = (11 + 23)
79
<PAGE> 51
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 1R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
(000 omitted)
<TABLE>
<CAPTION>
Premiums Earned Loss and Loss Expense Payments
1 ----------------------------------- ------------------------------------------------------
Years 2 3 4 Loss Payments Allocated Loss
in Which Expense Payments
Premiums Were ----------------------- -----------------------
Earned and Direct Net 5 6 7 8
Losses Were and Ceded (2-3) Direct Ceded Direct
Incurred Assumed and Assumed and Assumed Ceded
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . XXXX XXXX XXXX 0 0 0 0
2. 1984 . . . 0 0 0 0 0 0 0
3. 1985 . . . 0 0 0 0 0 0 0
4. 1986 . . . 0 0 0 0 0 0 0
5. 1987 . . . 0 0 0 0 0 0 0
6. 1988 . . . 0 0 0 0 0 0 0
7. 1989 . . . 0 0 0 0 0 0 0
8. 1990 . . . 0 0 0 0 0 0 0
9. 1991 . . . 0 0 0 0 0 0 0
10. 1992 . . . 0 0 0 0 0 0 0
11. 1993 . . . 0 0 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------
12. Totals . . XXXX XXXX XXXX 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
Loss and Loss Expense Payments
1 ---------------------------------------------- 12
9 10 11
Years
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Paid Reported -
Losses Were Subrogation Expense (5 - 6 + 7 Direct and
Incurred Received Payments - 8 + 10) Assumed
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . 0 0 0 XXXX
2. 1984 . . . 0 0 0 0
3. 1985 . . . 0 0 0 0
4. 1986 . . . 0 0 0 0
5. 1987 . . . 0 0 0 0
6. 1988 . . . 0 0 0 0
7. 1989 . . . 0 0 0 0
8. 1990 . . . 0 0 0 0
9. 1991 . . . 0 0 0 0
10. 1992 . . . 0 0 0 0
11. 1993 . . . 0 0 0 0
- --------------------------------------------------------------------------------------
12. Totals . . 0 0 0 XXXX
</TABLE>
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.
<TABLE>
<CAPTION>
1 Losses Unpaid Allocated Loss Expenses Unpaid
Years --------------------------------------- --------------------------------------------
in Which Case Basis Bulk + IBNR Case Basis Bulk + IBNR
Premiums Were ---------------- ------------------- -------------------- ---------------------
Earned and 13 14 15 16 17 18 19 20
Losses Were Direct Direct Direct Direct
Incurred and Assumed Ceded and Assumed Ceded and Assumed Ceded and Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 0 0 0 0 0 0 0 0
2. 1984 . . . . . 0 0 0 0 0 0 0 0
3. 1985 . . . . . 0 0 0 0 0 0 0 0
4. 1986 . . . . . 0 0 0 0 0 0 0 0
5. 1987 . . . . . 0 0 0 0 0 0 0 0
6. 1988 . . . . . 0 0 0 0 0 0 0 0
7. 1989 . . . . . 0 0 0 0 0 0 0 0
8. 1990 . . . . . 0 0 0 0 0 0 0 0
9. 1991 . . . . . 0 0 0 0 0 0 0 0
10. 1992 . . . . . 0 0 0 0 0 0 0 0
11. 1993 . . . . . 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------
12. Totals . . . . 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
1
Years 21 22 23 24
in Which Number of
Premiums Were Salvage Unallocated Total Claims
Earned and and Loss Net Losses Outstanding -
Losses Were Subrogation Expenses and Expenses Direct
Incurred Anticipated Unpaid Unpaid and Assumed
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . O O O O
2. 1984 . . . . . O O O O
3. 1985 . . . . . O O O O
4. 1986 . . . . . O O O O
5. 1987 . . . . . O O O O
6. 1988 . . . . . O O O O
7. 1989 . . . . . O O O O
8. 1990 . . . . . O O O O
9. 1991 . . . . . O O O O
10. 1992 . . . . . O O O O
11. 1993 . . . . . O O O O
- -----------------------------------------------------------------------------------------------
12. Totals . . . . O O O O
</TABLE>
<TABLE>
<CAPTION>
1
Years Total Losses and Loss and Loss Expense Percentage Discount for Time
in Which Loss Expenses Incurred (Incurred/Premiums Earned) Value of Money
Premiums Were ----------------------------- -------------------------------- ---------------
Earned and 25 26 27 28 29 30 31 32
Losses Were Direct Direct Loss
Incurred and Assumed Ceded Net * and Assumed Ceded Net Loss Expense
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . XXXX XXXX XXXX XXXX XXXX XXXX 0 0
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. Totals . . . . XXXX XXXX XXXX XXXX XXXX XXXX 0 0
</TABLE>
<TABLE>
<CAPTION>
1 Net Balance Sheet Reserves
Years After Discount
in Which 33 -----------------------------
Premiums Were Inter-Company 34 35
Earned and Pooling
Losses Were Participation Losses Loss Expenses
Incurred Percentage Unpaid Unpaid
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Prior . . . . . XXXX 0 0
2. 1984 . . . . . 0.0 0 0
3. 1985 . . . . . 0.0 0 0
4. 1986 . . . . . 0.0 0 0
5. 1987 . . . . . 0.0 0 0
6. 1988 . . . . . 0.0 0 0
7. 1989 . . . . . 0.0 0 0
8. 1990 . . . . . 0.0 0 0
9. 1991 . . . . . 0.0 0 0
10. 1992 . . . . . 0.0 0 0
11. 1993 . . . . . 0.0 0 0
- --------------------------------------------------------------------------------
12. Totals . . . . XXXX 0 0
</TABLE>
*Net = (25 - 26) = (11 + 23)
80
<PAGE> 52
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 2A - HOMEOWNERS/FARMOWNERS
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted) Development**
Years in Which ------------------------------------------------------------------------------------------ ---------------------
Losses Were 2 3 4 5 6 7 8 9 10 11 12 13
Incurred 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 One Year Two Year
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... * 0 0 0
2. 1984..... 0 0 0
3. 1985..... XXXX 0 0 0
4. 1986..... XXXX XXXX 0 0 0
5. 1987..... XXXX XXXX XXXX 0 0 0
6. 1988..... XXXX XXXX XXXX XXXX 0 0 0
7. 1989..... XXXX XXXX XXXX XXXX XXXX 0 0 0
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX 0 0 0
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 0 0
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 0 XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 XXXX XXXX
- ------------------------------------------------------------------------------------------------------------------------------------
12. Totals 0 0
</TABLE>
<TABLE>
<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.... * 0 0 0
2. 1984..... 0 0 0
3. 1985..... XXXX 0 0 0
4. 1986..... XXXX XXXX 0 0 0
5. 1987..... XXXX XXXX XXXX 0 0 0
6. 1988..... XXXX XXXX XXXX XXXX 0 0 0
7. 1989..... XXXX XXXX XXXX XXXX XXXX 0 0 0
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX 0 0 0
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 0 0
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 0 XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 101 XXXX XXXX
- -----------------------------------------------------------------------------------------------------------------------------------
12. Totals 0 0
</TABLE>
<TABLE>
<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.... * 0 0 0
2. 1984..... 0 0 0
3. 1985..... XXXX 0 0 0
4. 1986..... XXXX XXXX 0 0 0
5. 1987..... XXXX XXXX XXXX 0 0 0
6. 1988..... XXXX XXXX XXXX XXXX 0 0 0
7. 1989..... XXXX XXXX XXXX XXXX XXXX 0 0 0
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX 0 0 0
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 0 0
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 0 XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 124 XXXX XXXX
- ------------------------------------------------------------------------------------------------------------------------------------
12. Totals 0 0
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2D - WORKERS' COMPENSATION
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... * 0 0 0
2. 1984..... 0 0 0
3. 1985..... XXXX 0 0 0
4. 1986..... XXXX XXXX 0 0 0
5. 1987..... XXXX XXXX XXXX 0 0 0
6. 1988..... XXXX XXXX XXXX XXXX 0 0 0
7. 1989..... XXXX XXXX XXXX XXXX XXXX 0 0 0
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX 0 0 0
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 0 0
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 0 XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 XXXX XXXX
- ------------------------------------------------------------------------------------------------------------------------------------
12. Totals 0 0
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2E - COMMERCIAL MULTIPLE PERIL
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... * 0 0 0
2. 1984..... 0 0 0
3. 1985..... XXXX 0 0 0
4. 1986..... XXXX XXXX 0 0 0
5. 1987..... XXXX XXXX XXXX 0 0 0
6. 1988..... XXXX XXXX XXXX XXXX 0 0 0
7. 1989..... XXXX XXXX XXXX XXXX XXXX 0 0 0
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX 0 0 0
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 0 0
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 0 XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 0 XXXX XXXX
- -----------------------------------------------------------------------------------------------------------------------------------
12. Totals 0 0
</TABLE>
* Reported reserves only. Subsequent development relates only to subsequent
payments and reserves.
**Current year less first or second prior year, showing (redundant) or adverse.
81
<PAGE> 53
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
<TABLE>
<CAPTION>
SCHEDULE P - PART 2F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
--------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior....
2. 1984.....
3. 1985..... XXXX
4. 1986..... XXXX XXXX
5. 1987..... XXXX XXXX XXXX
6. 1988..... XXXX XXXX XXXX XXXX
7. 1989..... XXXX XXXX XXXX XXXX XXXX
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
- ----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated
Expenses Reported at
Year End (000 omitted) Development**
Years in Which ----------------------------- -----------------
Losses Were 10 11 12 13
Incurred 1992 1993 One Year Two Year
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0
2. 1984..... 0 0 0
3. 1985..... 0 0 0
4. 1986..... 0 0 0
5. 1987..... 0 0 0
6. 1988..... 0 0 0
7. 1989..... 0 0 0
8. 1990..... 0 0 0
9. 1991..... 0 0 0
10. 1992..... 0 0 XXXX
11. 1993..... XXXX 1 XXXX XXXX
- -----------------------------------------------------------------------
12. Totals 0 0
</TABLE>
<TABLE>
<CAPTION>
P - PART 2F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
----------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... *
2. 1984.....
3. 1985..... XXXX
4. 1986..... XXXX XXXX
5. 1987..... XXXX XXXX XXXX
6. 1988..... XXXX XXXX XXXX XXXX
7. 1989..... XXXX XXXX XXXX XXXX XXXX
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated
Expenses Reported at
Year End (000 omitted) Development**
Years in Which ----------------------------- -----------------
Losses Were 10 11 12 13
Incurred 1992 1993 One Year Two Year
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0
2. 1984..... 0 0 0
3. 1985..... 0 0 0
4. 1986..... 0 0 0
5. 1987..... 0 0 0
6. 1988..... 0 0 0
7. 1989..... 0 0 0
8. 1990..... 0 0 0
9. 1991..... 0 0 0
10. 1992..... 0 0 XXXX
11. 1993..... XXXX 0 XXXX XXXX
- --------------------------------------------------------------------------
12. Totals 0 0
</TABLE>
<TABLE>
SCHEDULE P - PART 2G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
-----------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... *
2. 1984.....
3. 1985..... XXXX
4. 1986..... XXXX XXXX
5. 1987..... XXXX XXXX XXXX
6. 1988..... XXXX XXXX XXXX XXXX
7. 1989..... XXXX XXXX XXXX XXXX XXXX
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
- ------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated
Expenses Reported at
Year End (000 omitted) Development**
Years in Which ----------------------------- -----------------
Losses Were 10 11 12 13
Incurred 1992 1993 One Year Two Year
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0
2. 1984..... 0 0 0
3. 1985..... 0 0 0
4. 1986..... 0 0 0
5. 1987..... 0 0 0
6. 1988..... 0 0 0
7. 1989..... 0 0 0
8. 1990..... 0 0 0
9. 1991..... 0 0 0
10. 1992..... 0 0 XXXX
11. 1993..... XXXX 0 XXXX XXXX
- -----------------------------------------------------------------------
12. Totals 0 0
</TABLE>
<TABLE>
SCHEDULE P - PART 2H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
--------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... *
2. 1984.....
3. 1985..... XXXX
4. 1986..... XXXX XXXX
5. 1987..... XXXX XXXX XXXX
6. 1988..... XXXX XXXX XXXX XXXX
7. 1989..... XXXX XXXX XXXX XXXX XXXX
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
- ----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses
Reported at Year End (000 omitted) Development**
Years in Which ---------------------------------------- -----------------
Losses Were 10 11 12 13
Incurred 1992 1993 One Year Two Year
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0
2. 1984..... 0 0 0
3. 1985..... 0 0 0
4. 1986..... 0 0 0
5. 1987..... 0 0 0
6. 1988..... 0 0 0
7. 1989..... 0 0 0
8. 1990..... 0 0 0
9. 1991..... 0 0 0
10. 1992..... 0 0 XXXX
11. 1993..... XXXX 116 XXXX XXXX
------------------------------------------------------------------------------
12. Totals 0 0
</TABLE>
<TABLE>
SCHEDULE P - PART 2H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
---------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior.... *
2. 1984.....
3. 1985..... XXXX
4. 1986..... XXXX XXXX
5. 1987..... XXXX XXXX XXXX
6. 1988..... XXXX XXXX XXXX XXXX
7. 1989..... XXXX XXXX XXXX XXXX XXXX
8. 1990..... XXXX XXXX XXXX XXXX XXXX XXXX
9. 1991..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX
10. 1992..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
11. 1993..... XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
</TABLE>
* Reported reserves only, Subsequent development relates only to subsequent
payments and reserves.
**Current year less first or second prior year, showing (redundant) or adverse.
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses
Reported at Year End (000 omitted) Development**
Years in Which ----------------------------------------- ------------------
Losses Were 10 11 12 13
Incurred 1992 1993 One Year Two Year
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior.... 0 0 0
2. 1984..... 0 0 0
3. 1985..... 0 0 0
4. 1986..... 0 0 0
5. 1987..... 0 0 0
6. 1988..... 0 0 0
7. 1989..... 0 0 0
8. 1990..... 0 0 0
9. 1991..... 0 0 0
10. 1992..... 0 0 XXXX
11. 1993..... XXXX 0 XXXX XXXX
- ---------------------------------------------------------------------------
12. Totals 0 0
</TABLE>
82
<PAGE> 54
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
..................................
(Name)
SCHEDULE P - PART 2I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
------------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- -------------------------------------------------------------------------------------------------------------------
<S> <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 *
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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and Allocated
Expenses Reported at Year End
(000 omitted) Development**
------------------------------ ---------------------
1
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . 0 0 0
2. 1992 . . . 0 0 X X X X
3. 1993 . . . X X X X 15 X X X X X X X X
--------- ------- -------
4. Totals 0 0
</TABLE>
SCHEDULE P - PART 2J - AUTO PHYSICAL DAMAGE
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
----------------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- -----------------------------------------------------------------------------------------------------------------------
<S> <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 *
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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and Allocated
Expenses Reported at Year End
(000 omitted) Development**
----------------------------- -------------------------
1
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . 0 0 0
2. 1992 . . . 0 0 X X X X
3. 1993 . . . X X X X 87 X X X X X X X X
--------- --------- --------
4. Totals 0 0
</TABLE>
SCHEDULE P - PART 2K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAGE GUARANTY
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
-----------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- ------------------------------------------------------------------------------------------------------------------
<S> <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 *
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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and Allocated
Expenses Reported at Year End
(000 omitted) Development**
----------------------------- ----------------------
1
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . 0 0 0
2. 1992 . . . 0 0 X X X X
3. 1993 . . . X X X X 0 X X X X X X X X
--------- -------- --------
4. Totals 0 0
</TABLE>
SCHEDULE P - PART 2L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
-----------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- ------------------------------------------------------------------------------------------------------------------
<S> <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 *
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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and Allocated
Expenses Reported at Year End
(000 omitted) Development**
----------------------------- ----------------------
1
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . 0 0 0
2. 1992 . . . 0 0 X X X X
3. 1993 . . . X X X X 0 X X X X X X X X
--------- ------- -------
4. Totals 0 0
</TABLE>
SCHEDULE P - PART 2M - INTERNATIONAL
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
---------------------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . *
2. 1984 . . . . .
3. 1985 . . . . . X X X X
4. 1986 . . . . . X X X X X X X X
5. 1987 . . . . . X X X X 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
7. 1989 . . . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and Allocated
Expenses Reported at Year End
(000 omitted) Development**
----------------------------- ------------------
1
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 0 0 0
2. 1984 . . . . . 0 0 0
3. 1985 . . . . . 0 0 0
4. 1986 . . . . . 0 0 0
5. 1987 . . . . . 0 0 0
6. 1988 . . . . . 0 0 0
7. 1989 . . . . . 0 0 0
8. 1990 . . . . . 0 0 0
9. 1991 . . . . . 0 0 0
10. 1992 . . . . . 0 0 X X X X
11. 1993 . . . . . X X X X 0 X X X X X X X X
---------- -------- ---------
12. Totals 0 0
</TABLE>
* Reported reserves only. Subsequent development relates only to
subsequent payments and reserves.
** Current year less first or second prior year, showing (redundant) or
adverse.
83
<PAGE> 55
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 2N - REINSURANCE A
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
------------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- -------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1989 . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and
Allocated Expenses Reported
at Year End (000 omitted) Development**
1 ------------------------- ----------------------
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. 1988 . . . 0 0 0
2. 1989 . . . 0 0 0
3. 1990 . . . 0 0 0
4. 1991 . . . 0 0 0
5. 1992 . . . 0 0 X X X X
6. 1993 . . . X X X X 0 X X X X X X X X
--------- ---------- ----------
7. Totals 0 0
</TABLE>
SCHEDULE P - PART 2O - REINSURANCE B
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
------------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- -------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1989 . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and
Allocated Expenses Reported
at Year End (000 omitted) Development**
1 ------------------------- ----------------------
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. 1988 . . . 0 0 0
2. 1989 . . . 0 0 0
3. 1990 . . . 0 0 0
4. 1991 . . . 0 0 0
5. 1992 . . . 0 0 X X X X
6. 1993 . . . X X X X 0 X X X X X X X X
------ ---------- ---------
7. Totals 0 0
</TABLE>
SCHEDULE P - PART 2P - REINSURANCE C
<TABLE>
<CAPTION>
1 Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
------------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- -------------------------------------------------------------------------------------------------------------------
<S> <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
2. 1989 . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and
Allocated Expenses Reported
at Year End (000 omitted) Development**
1 ------------------------- ---------------------
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. 1988 . . . 0 0 0
2. 1989 . . . 0 0 0
3. 1990 . . . 0 0 0
4. 1991 . . . 0 0 0
5. 1992 . . . 0 0 X X X X
6. 1993 . . . X X X X 0 X X X X X X X X
----------- --------- ---------
7. Totals 0 0
</TABLE>
SCHEDULE P - PART 2Q - REINSURANCE D
<TABLE>
<CAPTION>
Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
1 ------------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . .
2. 1984 . . .
3. 1985 . . . X X X X
4. 1986 . . . X X X X X X X X
5. 1987 . . . X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
Incurred Losses and
Allocated Expenses Reported
at Year End (000 omitted) Development**
1 ------------------------- ----------------------
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . 0 0 0
2. 1984 . . . 0 0 0
3. 1985 . . . 0 0 0
4. 1986 . . . 0 0 0
5. 1987 . . . 0 0 0
---------- ------ ------
6. Totals 0 0
</TABLE>
SCHEDULE P - PART 2R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
1 -----------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . *
2. 1984 . . . . .
3. 1985 . . . . . X X X X
4. 1986 . . . . . X X X X X X X X
5. 1987 . . . . . X X X X 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
7. 1989 . . . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
Incurred Losses and
Allocated Expenses Reported
at Year End (000 omitted) Development**
1 ------------------------- ---------------------
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . 0 0 0
2. 1984 . . . . . 0 0 0
3. 1985 . . . . . 0 0 0
4. 1986 . . . . . 0 0 0
5. 1987 . . . . . 0 0 0
6. 1988 . . . . . 0 0 0
7. 1989 . . . . . 0 0 0
8. 1990 . . . . . 0 0 0
9. 1991 . . . . . 0 0 0
10. 1992 . . . . . 0 0 X X X X
11. 1993 . . . . . X X X X 14 X X X X X X X X
---------- -------- ---------
12. Totals 0 0
</TABLE>
SCHEDULE P - PART 2R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
<TABLE>
<CAPTION>
Incurred Losses and Allocated Expenses Reported at Year End (000 omitted)
1 ----------------------------------------------------------------------------------------------
Years in Which 2 3 4 5 6 7 8 9
Losses Were 1984 1985 1986 1987 1988 1989 1990 1991
Incurred
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . *
2. 1984 . . . . .
3. 1985 . . . . . X X X X
4. 1986 . . . . . X X X X X X X X
5. 1987 . . . . . X X X X 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
7. 1989 . . . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
Incurred Losses and
Allocated Expenses Reported
at Year End (000 omitted) Development**
1 ------------------------- ---------------------
Years in Which 10 11 12 13
Losses Were 1992 1993 One Year Two Year
Incurred
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 0 0 0
2. 1984 . . . . . 0 0 0
3. 1985 . . . . . 0 0 0
4. 1986 . . . . . 0 0 0
5. 1987 . . . . . 0 0 0
6. 1988 . . . . . 0 0 0
7. 1989 . . . . . 0 0 0
8. 1990 . . . . . 0 0 0
9. 1991 . . . . . 0 0 0
10. 1992 . . . . . 0 0 X X X X
11. 1993 . . . . . X X X X 0 X X X X X X X X
---------- --------- ---------
12. Totals 0 0
</TABLE>
* Reported reserves only. Subsequent development relates only to
subsequent payments and reserves.
** Current year less first or second prior year, showing (redundant) or
adverse.
84
<PAGE> 56
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 3A - HOMEOWNERS/FARMOWNERS
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ----------------------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 000
2. 1984 . . . . .
3. 1985 . . . . . X X X X
4. 1986 . . . . . X X X X X X X X
5. 1987 . . . . . X X X X 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
7. 1989 . . . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and 12 13
Allocated Expenses at Year Number of Number of
1 End (000 Omitted) Claims Claims
Years in Which -------------------------- Closed Closed
Losses Were 10 11 With Loss Without
Incurred 1992 1993 Payment Loss Payment
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 0
2. 1984 . . . . . 0
3. 1985 . . . . . 0
4. 1986 . . . . . 0
5. 1987 . . . . . 0
6. 1988 . . . . . 0
7. 1989 . . . . . 0
8. 1990 . . . . . 0
9. 1991 . . . . . 0
10. 1992 . . . . . 0
11. 1993 . . . . . X X X X 0
</TABLE>
SCHEDULE P - PART 3B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ----------------------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 000
2. 1984 . . . . .
3. 1985 . . . . . X X X X
4. 1986 . . . . . X X X X X X X X
5. 1987 . . . . . X X X X 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
7. 1989 . . . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
SCHEDULE P - PART 3B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<TABLE>
<CAPTION>
Cumulative Paid Losses and 12 13
Allocated Expenses at Year Number of Number of
1 End (000 Omitted) Claims Claims
Years in Which -------------------------- Closed Closed
Losses Were 10 11 With Loss Without
Incurred 1992 1993 Payment Loss Payment
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 0
2. 1984 . . . . . 0
3. 1985 . . . . . 0
4. 1986 . . . . . 0
5. 1987 . . . . . 0
6. 1988 . . . . . 0
7. 1989 . . . . . 0
8. 1990 . . . . . 0
9. 1991 . . . . . 0
10. 1992 . . . . . 0
11. 1993 . . . . . X X X X 3
</TABLE>
SCHEDULE P - PART 3C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ----------------------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 000
2. 1984 . . . . .
3. 1985 . . . . . X X X X
4. 1986 . . . . . X X X X X X X X
5. 1987 . . . . . X X X X 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
7. 1989 . . . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and 12 13
Allocated Expenses at Year Number of Number of
1 End (000 Omitted) Claims Claims
Years in Which -------------------------- Closed Closed
Losses Were 10 11 With Loss Without
Incurred 1992 1993 Payment Loss Payment
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 0
2. 1984 . . . . . 0
3. 1985 . . . . . 0
4. 1986 . . . . . 0
5. 1987 . . . . . 0
6. 1988 . . . . . 0
7. 1989 . . . . . 0
8. 1990 . . . . . 0
9. 1991 . . . . . 0
10. 1992 . . . . . 0
11. 1993 . . . . . X X X X 0
</TABLE>
SECTION P - PART 3D - WORKERS' COMPENSATION
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ----------------------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 000
2. 1984 . . . . .
3. 1985 . . . . . X X X X
4, 1986 . . . . . X X X X X X X X
5. 1987 . . . . . X X X X 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
7. 1989 . . . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and 12 13
Allocated Expenses at Year Number of Number of
1 End (000 Omitted) Claims Claims
Years in Which -------------------------- Closed Closed
Losses Were 10 11 With Loss Without
Incurred 1992 1993 Payment Loss Payment
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 0
2. 1984 . . . . . 0
3. 1985 . . . . . 0
4. 1986 . . . . . 0
5. 1987 . . . . . 0
6. 1988 . . . . . 0
7. 1989 . . . . . 0
8. 1990 . . . . . 0
9. 1991 . . . . . 0
10. 1992 . . . . . 0
11. 1993 . . . . . X X X X 0
</TABLE>
SCHEDULE P - PART 3E - COMMERCIAL MULTIPLE PERIL
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ----------------------------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7 8 9
Incurred 1984 1985 1986 1987 1988 1989 1990 1991
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior . . . . . 000
2. 1984 . . . . .
3. 1985 . . . . . X X X X
4. 1986 . . . . . X X X X X X X X
5. 1987 . . . . . X X X X 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
7. 1989 . . . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and 12 13
Allocated Expenses at Year Number of Number of
1 End (000 Omitted) Claims Claims
Years in Which -------------------------- Closed Closed
Losses Were 10 11 With Loss Without
Incurred 1992 1993 Payment Loss Payment
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior . . . . . 0
2. 1984 . . . . . 0
3. 1985 . . . . . 0
4. 1986 . . . . . 0
5. 1987 . . . . . 0
6. 1988 . . . . . 0
7. 1989 . . . . . 0
8. 1990 . . . . . 0
9. 1991 . . . . . 0
10. 1992 . . . . . 0
11. 1993 . . . . . X X X X 0
</TABLE>
Note: Net of salvage and subrogation received.
85
<PAGE> 57
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 3F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000
2. 1984 . . .
3. 1985 . . . X X X X
4. 1986 . . . X X X X X X X X
5. 1987 . . . X X X X 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
7. 1989 . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated
Expenses at Year End (000 omitted) 12 13
---------------------------------------------- Number of Number of
Years in Which Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
Payment Payment
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0
2. 1984 . . . 0
3. 1985 . . . 0
4. 1986 . . . 0
5. 1987 . . . 0
6. 1988 . . . 0
7. 1989 . . . 0
8. 1990 . . . 0
9. 1991 . . . X X X X 0
10. 1992 . . . X X X X X X X X 0
11. 1993 . . . X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 3F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000
2. 1984 . . .
3. 1985 . . . X X X X
4. 1986 . . . X X X X X X X X
5. 1987 . . . X X X X 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
7. 1989 . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated
Expenses at Year End (000 omitted) 12 13
---------------------------------------------- Number of Number of
Years in Which Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
Payment Payment
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0
2. 1984 . . . 0
3. 1985 . . . 0
4. 1986 . . . 0
5. 1987 . . . 0
6. 1988 . . . 0
7. 1989 . . . 0
8. 1990 . . . 0
9. 1991 . . . X X X X 0
10. 1992 . . . X X X X X X X X 0
11. 1993 . . . X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 3G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000
2. 1984 . . .
3. 1985 . . . X X X X
4. 1986 . . . X X X X X X X X
5. 1987 . . . X X X X 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
7. 1989 . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated 12 13
Expenses at Year End (000 omitted) Number of Number of
Years in Which --------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
Payment Payment
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0 X X X X X X X X
2. 1984 . . . 0 X X X X X X X X
3. 1985 . . . 0 X X X X X X X X
4. 1986 . . . 0 X X X X X X X X
5. 1987 . . . 0 X X X X X X X X
6. 1988 . . . 0 X X X X X X X X
7. 1989 . . . 0 X X X X X X X X
8. 1990 . . . 0 X X X X X X X X
9. 1991 . . . X X X X 0 X X X X X X X X
10. 1992 . . . X X X X X X X X 0 X X X X X X X X
11. 1993 . . . X X X X X X X X X X X X 0 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which -----------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000
2. 1984 . . .
3. 1985 . . . X X X X
4. 1986 . . . X X X X X X X X
5. 1987 . . . X X X X 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
7. 1989 . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated 12 13
Expenses at Year End (000 omitted) Number of Number of
Years in Which --------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
Payment Payment
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0
2. 1984 . . . 0
3. 1985 . . . 0
4. 1986 . . . 0
5. 1987 . . . 0
6. 1988 . . . 0
7. 1989 . . . 0
8. 1990 . . . 0
9. 1991 . . . X X X X 0
10. 1992 . . . X X X X X X X X 0
11. 1993 . . . X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 3H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which -----------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000
2. 1984 . . .
3. 1985 . . . X X X X
4. 1986 . . . X X X X X X X X
5. 1987 . . . X X X X 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
7. 1989 . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated 12 13
Expenses at Year End (000 omitted) Number of Number of
Years in Which --------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
Payment Payment
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0
2. 1984 . . . 0
3. 1985 . . . 0
4. 1986 . . . 0
5. 1987 . . . 0
6. 1988 . . . 0
7. 1989 . . . 0
8. 1990 . . . 0
9. 1991 . . . X X X X 0
10. 1992 . . . X X X X X X X X 0
11. 1993 . . . X X X X X X X X X X X X 0
</TABLE>
Note: Net of salvage and subrogation received.
86
<PAGE> 58
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 3I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which -------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X X X X X X X X X X X X X
2. 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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated Expenses 12 13
at Year End (000 omitted) Number of Number of
Years in Which ---------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
Payment Payment
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X 000 0 X X X X X X X X
2. 1992 . . . X X X X X X X X 0 X X X X X X X X
3. 1993 . . . X X X X X X X X X X X X 2 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3J - AUTO PHYSICAL DAMAGE
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which -----------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X X X X X X X X X X X X X
2. 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
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
</TABLE>
<TABLE>
<CAPTION>
12 13
Cumulative Paid Losses and Allocated Expenses Number of Number of
at Year End (000 omitted) Claims Claims
Years in Which -------------------------------------------------- Closed Closed
Losses Were 8 9 10 11 With Loss Without Loss
Incurred 1990 1991 1992 1993 Payment Payment
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X 000 0 X X X X X X X X
2. 1992 . . . X X X X X X X X 0 X X X X X X X X
3. 1993 . . . X X X X X X X X X X X X 47 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAGE GUARANTY
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which -------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X X X X X X X X X X X X X
2. 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
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
</TABLE>
<TABLE>
<CAPTION>
12 13
Cumulative Paid Losses and Allocated Expenses Number of Number of
at Year End (000 omitted) Claims Claims
Years in Which ------------------------------------------------- Closed Closed
Losses Were 8 9 10 11 With Loss Without Loss
Incurred 1990 1991 1992 1993 Payment Payment
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X 000 0 X X X X X X X X
2. 1992 . . . X X X X X X X X 0 X X X X X X X X
3. 1993 . . . X X X X X X X X X X X X 0 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X X X X X X X X X X X X X X X X X X X X X
2. 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
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
</TABLE>
<TABLE>
<CAPTION>
12 13
Cumulative Paid Losses and Allocated Expenses Number of Number of
at Year End (000 omitted) Claims Claims
Years in Which --------------------------------------------------- Closed Closed
Losses Were 8 9 10 11 With Loss Without Loss
Incurred 1990 1991 1992 1993 Payment Payment
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . X X X X 000 0 X X X X X X X X
2. 1992 . . . X X X X X X X X 0 X X X X X X X X
3. 1993 . . . X X X X X X X X X X X X 0 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3M - INTERNATIONAL
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 omitted)
Years in Which ------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000
2. 1984 . . .
3. 1985 . . . X X X X
4. 1986 . . . X X X X X X X X
5. 1987 . . . X X X X 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
7. 1989 . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
12 13
Cumulative Paid Losses and Allocated Expenses Number of Number of
at Year End (000 omitted) Claims Claims
Years in Which -------------------------------------------------- Closed Closed
Losses Were 8 9 10 11 With Loss Without Loss
Incurred 1990 1991 1992 1993 Payment Payment
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0 X X X X X X X X
2. 1984 . . . 0 X X X X X X X X
3. 1985 . . . 0 X X X X X X X X
4. 1986 . . . 0 X X X X X X X X
5. 1987 . . . 0 X X X X X X X X
6. 1988 . . . 0 X X X X X X X X
7. 1989 . . . 0 X X X X X X X X
8. 1990 . . . 0 X X X X X X X X
9. 1991 . . . X X X X 0 X X X X X X X X
10. 1992 . . . X X X X X X X X 0 X X X X X X X X
11. 1993 . . . X X X X X X X X X X X X 0 X X X X X X X X
</TABLE>
Note: Net of salvage and subrogation received.
87
<PAGE> 59
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 3N - REINSURANCE A
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted)
Years in Which ----------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. 1988 . . . X X X X X X X X 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
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
4. 1991 . . . X X X X X X X X X X X X X X X X X X X X X X X X
5. 1992 . . . X X X X X X X X X X X X X X X X X X X X X X X X
6. 1993 . . . X X X X X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated Expenses 12 13
at Year End (000 Omitted) Number of Number of
Years in Which --------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. 1988 . . . 0 X X X X X X X X
2. 1989 . . . 0 X X X X X X X X
3. 1990 . . . 0 X X X X X X X X
4. 1991 . . . X X X X 0 X X X X X X X X
5. 1992 . . . X X X X X X X X 0 X X X X X X X X
6. 1993 . . . X X X X X X X X X X X X 0 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3O - REINSURANCE B
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted)
Years in Which -----------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. 1988 . . . X X X X X X X X 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
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
4. 1991 . . . X X X X X X X X X X X X X X X X X X X X X X X X
5. 1992 . . . X X X X X X X X X X X X X X X X X X X X X X X X
6. 1993 . . . X X X X X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated Expenses 12 13
at Year End (000 Omitted) Number of Number of
Years in Which --------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. 1988 . . . 0 X X X X X X X X
2. 1989 . . . 0 X X X X X X X X
3. 1990 . . . 0 X X X X X X X X
4. 1991 . . . X X X X 0 X X X X X X X X
5. 1992 . . . X X X X X X X X 0 X X X X X X X X
6. 1993 . . . X X X X X X X X X X X X 0 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3P - REINSURANCE C
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted)
Years in Which -----------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. 1988 . . . X X X X X X X X 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
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
4. 1991 . . . X X X X X X X X X X X X X X X X X X X X X X X X
5. 1992 . . . X X X X X X X X X X X X X X X X X X X X X X X X
6. 1993 . . . X X X X X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated Expenses 12 13
at Year End (000 Omitted) Number of Number of
Years in Which ----------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. 1988 . . . 0 X X X X X X X X
2. 1989 . . . 0 X X X X X X X X
3. 1990 . . . 0 X X X X X X X X
4. 1991 . . . X X X X 0 X X X X X X X X
5. 1992 . . . X X X X X X X X 0 X X X X X X X X
6. 1993 . . . X X X X X X X X X X X X 0 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3Q P REINSURANCE D
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted)
Years in Which -----------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000
2. 1984 . . .
3. 1985 . . . X X X X
4. 1986 . . . X X X X X X X X
5. 1987 . . . X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated Expenses 12 13
at Year End (000 Omitted) Number of Number of
Years in Which --------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0 X X X X X X X X
2. 1984 . . . 0 X X X X X X X X
3. 1985 . . . 0 X X X X X X X X
4. 1986 . . . 0 X X X X X X X X
5. 1987 . . . 0 X X X X X X X X
</TABLE>
SCHEDULE P - PART 3R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted)
Years in Which -----------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000
2. 1984 . . .
3. 1985 . . . X X X X
4. 1986 . . . X X X X X X X X
5. 1987 . . . X X X X 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
7. 1989 . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated Expenses 12 13
at Year End (000 Omitted) Number of Number of
Years in Which --------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss Without Loss
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0
2. 1984 . . . 0
3. 1985 . . . 0
4. 1986 . . . 0
5. 1987 . . . 0
6. 1988 . . . 0
7. 1989 . . . 0
8. 1990 . . . 0
9. 1991 . . . X X X X 0
10. 1992 . . . X X X X X X X X 0
11. 1993 . . . X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 3R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
<TABLE>
<CAPTION>
1 Cumulative Paid Losses and Allocated Expenses at Year End (000 Omitted)
Years in Which --------------------------------------------------------------------------
Losses Were 2 3 4 5 6 7
Incurred 1984 1985 1986 1987 1988 1989
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 000
2. 1984 . . .
3. 1985 . . . X X X X
4. 1986 . . . X X X X X X X X
5. 1987 . . . X X X X 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
7. 1989 . . . X X X X X X X X X X X X 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
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
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
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
</TABLE>
<TABLE>
<CAPTION>
Cumulative Paid Losses and Allocated Expenses 12 13
1 at Year End (000 Omitted) Number of Number of
Years in Which ------------------------------------------------------------- Claims Claims
Losses Were 8 9 10 11 Closed Closed
Incurred 1990 1991 1992 1993 With Loss With Loss
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior . . . 0
2. 1984 . . . 0
3. 1985 . . . 0
4. 1986 . . . 0
5. 1987 . . . 0
6. 1988 . . . 0
7. 1989 . . . 0
8. 1990 . . . 0
9. 1991 . . . X X X X 0
10. 1992 . . . X X X X X X X X 0
11. 1993 . . . X X X X X X X X X X X X 0
</TABLE>
Note: Net of salvage and subrogation received.
88
<PAGE> 60
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 4A - HOMEOWNERS/FARMOWNERS
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . .
2. 1984 . . . . . . . . . . .
3. 1985 . . . . . . . . . . . X X X X
4. 1986 . . . . . . . . . . . X X X X X X X X
5. 1987 . . . . . . . . . . . X X X X 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
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 7 8 9 10 11
Incurred 1989 1990 1991 1992 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0
2. 1984 . . . . . . . . . . . 0
3. 1985 . . . . . . . . . . . 0
4. 1986 . . . . . . . . . . . 0
5. 1987 . . . . . . . . . . . 0
6. 1988 . . . . . . . . . . . 0
7. 1989 . . . . . . . . . . . 0
8. 1990 . . . . . . . . . . . X X X X 0
9. 1991 . . . . . . . . . . . X X X X X X X X O
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 0
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE P - PART 4B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . .
2. 1984 . . . . . . . . . . .
3. 1985 . . . . . . . . . . . X X X X
4. 1986 . . . . . . . . . . . X X X X X X X X
5. 1987 . . . . . . . . . . . X X X X 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
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 7 8 9 10 11
Incurred 1989 1990 1991 1992 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0
2. 1984 . . . . . . . . . . . 0
3. 1985 . . . . . . . . . . . 0
4. 1986 . . . . . . . . . . . 0
5. 1987 . . . . . . . . . . . 0
6. 1988 . . . . . . . . . . . 0
7. 1989 . . . . . . . . . . . 0
8. 1990 . . . . . . . . . . . X X X X 0
9. 1991 . . . . . . . . . . . X X X X X X X X 0
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 0
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 98
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE P - PART 4C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . .
2. 1984 . . . . . . . . . . .
3. 1985 . . . . . . . . . . . X X X X
4. 1986 . . . . . . . . . . . X X X X X X X X
5. 1987 . . . . . . . . . . . X X X X 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
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 7 8 9 10 11
Incurred 1989 1990 1991 1992 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0
2. 1984 . . . . . . . . . . . 0
3. 1985 . . . . . . . . . . . 0
4. 1986 . . . . . . . . . . . 0
5. 1987 . . . . . . . . . . . 0
6. 1988 . . . . . . . . . . . 0
7. 1989 . . . . . . . . . . . 0
8. 1990 . . . . . . . . . . . X X X X 0
9. 1991 . . . . . . . . . . . X X X X X X X X 0
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 0
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 30
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE P - PART 4D - WORKERS' COMPENSATION
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . .
2. 1984 . . . . . . . . . . .
3. 1985 . . . . . . . . . . . X X X X
4. 1986 . . . . . . . . . . . X X X X X X X X
5. 1987 . . . . . . . . . . . X X X X 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
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 7 8 9 10 11
Incurred 1989 1990 1991 1992 1993
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0
2. 1984 . . . . . . . . . . . 0
3. 1985 . . . . . . . . . . . 0
4. 1986 . . . . . . . . . . . 0
5. 1987 . . . . . . . . . . . 0
6. 1988 . . . . . . . . . . . 0
7. 1989 . . . . . . . . . . . 0
8. 1990 . . . . . . . . . . . X X X X 0
9. 1991 . . . . . . . . . . . X X X X X X X X 0
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 0
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE P - PART 4E - COMMERCIAL MULTIPLE PERIL
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . .
2. 1984 . . . . . . . . . . .
3. 1985 . . . . . . . . . . . X X X X
4. 1986 . . . . . . . . . . . X X X X X X X X
5. 1987 . . . . . . . . . . . X X X X 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
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
1 ------------------------------------------------------------------------------------------------------
Years in Which
Losses Were 7 8 9 10 11
Incurred 1989 1990 1991 1992 1993
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0
2. 1984 . . . . . . . . . . . 0
3. 1985 . . . . . . . . . . . 0
4. 1986 . . . . . . . . . . . 0
5. 1987 . . . . . . . . . . . 0
6. 1988 . . . . . . . . . . . 0
7. 1989 . . . . . . . . . . . 0
8. 1990 . . . . . . . . . . . X X X X 0
9. 1991 . . . . . . . . . . . X X X X X X X X 0
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 0
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 0
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
89
<PAGE> 61
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(Name)
SCHEDULE P - PART 4F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES
AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
- ---------------------------------------------------------------------------------------------------------------------------------
1
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . .
2. 1984 . . . . . . . . . . .
3. 1985 . . . . . . . . . . . X X X X
4. 1986 . . . . . . . . . . . X X X X X X X X
5. 1987 . . . . . . . . . . . X X X X 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
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES
AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED)
- ---------------------------------------------------------------------------------------------------------------------------------
1
Years in Which
Losses Were
Incurred 7 8 9 10 11
1989 1990 1991 1992 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0
2. 1983 . . . . . . . . . . . 0
3. 1985 . . . . . . . . . . . 0
4. 1986 . . . . . . . . . . . 0
5. 1987 . . . . . . . . . . . 0
6. 1988 . . . . . . . . . . . 0
7. 1989 . . . . . . . . . . . 0
8. 1990 . . . . . . . . . . . X X X X 0
9. 1991 . . . . . . . . . . . X X X X X X X X 0
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 0
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 1
</TABLE>
SCHEDULE P - PART 4F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
<TABLE>
<CAPTION>
1
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . .
2. 1984 . . . . . . . . . . .
3. 1985 . . . . . . . . . . . X X X X
4. 1986 . . . . . . . . . . . X X X X X X X X
5. 1987 . . . . . . . . . . . X X X X 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
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years in Which
Losses Were
Incurred 7 8 9 10 11
1989 1990 1991 1992 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0
2. 1984 . . . . . . . . . . . 0
3. 1985 . . . . . . . . . . . 0
4. 1986 . . . . . . . . . . . 0
5. 1987 . . . . . . . . . . . 0
6. 1988 . . . . . . . . . . . 0
7. 1989 . . . . . . . . . . . 0
8. 1990 . . . . . . . . . . . X X X X 0
9. 1991 . . . . . . . . . . . X X X X X X X X 0
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 0
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 4G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
<TABLE>
<CAPTION>
1
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . .
2. 1984 . . . . . . . . . . .
3. 1985 . . . . . . . . . . . X X X X
4. 1986 . . . . . . . . . . . X X X X X X X X
5. 1987 . . . . . . . . . . . X X X X 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
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years in Which
Losses Were
Incurred 7 8 9 10 11
1989 1990 1991 1992 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0
2. 1984 . . . . . . . . . . . 0
3. 1985 . . . . . . . . . . . 0
4. 1986 . . . . . . . . . . . 0
5. 1987 . . . . . . . . . . . 0
6. 1988 . . . . . . . . . . . 0
7. 1989 . . . . . . . . . . . 0
8. 1990 . . . . . . . . . . . X X X X 0
9. 1991 . . . . . . . . . . . X X X X X X X X 0
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 0
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 4H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
1
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . .
2. 1984 . . . . . . . . . . .
3. 1985 . . . . . . . . . . . X X X X
4. 1986 . . . . . . . . . . . X X X X X X X X
5. 1987 . . . . . . . . . . . X X X X 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
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years in Which
Losses Were
Incurred 7 8 9 10 11
1989 1990 1991 1992 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0
2. 1984 . . . . . . . . . . . 0
3. 1985 . . . . . . . . . . . 0
4. 1986 . . . . . . . . . . . 0
5. 1987 . . . . . . . . . . . 0
6. 1988 . . . . . . . . . . . 0
7. 1989 . . . . . . . . . . . 0
8. 1990 . . . . . . . . . . . X X X X 0
9. 1991 . . . . . . . . . . . X X X X X X X X 0
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 0
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 114
</TABLE>
SCHEDULE P - PART 4H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
<TABLE>
<CAPTION>
1
Years in Which
Losses Were 2 3 4 5 6
Incurred 1984 1985 1986 1987 1988
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . .
2. 1984 . . . . . . . . . . .
3. 1985 . . . . . . . . . . . X X X X
4. 1986 . . . . . . . . . . . X X X X X X X X
5. 1987 . . . . . . . . . . . X X X X 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
7. 1989 . . . . . . . . . . . X X X X X X X X X X X X 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
9. 1991 . . . . . . . . . . . X X X X X X X X X X X X 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
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
1
Years in Which
Losses Were
Incurred 7 8 9 10 11
1989 1990 1991 1992 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior . . . . . . . . . . . 0
2. 1984 . . . . . . . . . . . 0
3. 1985 . . . . . . . . . . . 0
4. 1986 . . . . . . . . . . . 0
5. 1987 . . . . . . . . . . . 0
6. 1988 . . . . . . . . . . . 0
7. 1989 . . . . . . . . . . . 0
8. 1990 . . . . . . . . . . . X X X X 0
9. 1991 . . . . . . . . . . . X X X X X X X X 0
10. 1992 . . . . . . . . . . . X X X X X X X X X X X X 0
11. 1993 . . . . . . . . . . . X X X X X X X X X X X X X X X X 0
</TABLE>
90
<PAGE> 62
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(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 OMMITTED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------
<S> <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
2. 1992........... X X X X X X X X X X X X 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
</TABLE>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES
AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior.......... X X X X X X X X 0
2. 1992........... X X X X X X X X X X X X 0
3. 1993........... X X X X X X X X X X X X X X X X 7
</TABLE>
SCHEDULE P - PART 4J - AUTO PHYSICAL DAMAGE
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES
AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------
<S> <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
2. 1992........... X X X X X X X X X X X X 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
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES
AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -------------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
- -------------------------------------------------------------------------------------------------------
1. Prior.......... X X X X X X X X 0
2. 1992........... X X X X X X X X X X X X 0
3. 1993........... X X X X X X X X X X X X X X X X 21
</TABLE>
SCHEDULE P - PART 4K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAGE GUARANTY
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES
AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------
<S> <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
2. 1992........... X X X X X X X X X X X X 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
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES
AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -------------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
- -------------------------------------------------------------------------------------------------------
1. Prior.......... X X X X X X X X 0
2. 1992........... X X X X X X X X X X X X 0
3. 1993........... X X X X X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 4L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES
AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------
<S> <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
2. 1992........... X X X X X X X X X X X X 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
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES
AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -------------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
- -------------------------------------------------------------------------------------------------------
1. Prior.......... X X X X X X X X 0
2. 1992........... X X X X X X X X X X X X 0
3. 1993........... X X X X X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 4M - INTERNATIONAL
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES
AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior..........
2. 1984...........
3. 1985........... X X X X
4. 1986........... X X X X X X X X
5. 1987........... X X X X 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
7. 1989........... X X X X X X X X X X X X 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
9. 1991........... X X X X X X X X X X X X 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
11. 1993........... X X X X X X X X X X X X X X X X X X X X
</TABLE>
SCHEDULE P - PART 4M - INTERNATIONAL
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES
AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior.......... 0
2. 1984........... 0
3. 1985........... 0
4. 1986........... 0
5. 1987........... 0
6. 1988........... 0
7. 1989........... 0
8. 1990........... X X X X 0
9. 1991........... X X X X X X X X 0
10. 1992........... X X X X X X X X X X X X 0
11. 1993........... X X X X X X X X X X X X X X X X 0
</TABLE>
91
<PAGE> 63
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
..........................................
(Name)
SCHEDULE P - PART 4N - REINSURANCE A
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. 1988........... X X X X X X X X 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
3. 1990........... X X X X X X X X X X X X 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
5. 1992........... X X X X X X X X X X X X X X X X X X X X
6. 1993........... X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. 1988........... 0
2. 1989........... 0
3. 1990........... X X X X 0
4. 1991........... X X X X X X X X 0
5. 1992........... X X X X X X X X X X X X 0
6. 1993........... X X X X X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 40 - REINSURANCE B
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. 1988........... X X X X X X X X 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
3. 1990........... X X X X X X X X X X X X 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
5. 1992........... X X X X X X X X X X X X X X X X X X X X
6. 1993........... X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. 1988........... 0
2. 1989........... 0
3. 1990........... X X X X 0
4. 1991........... X X X X X X X X 0
5. 1992........... X X X X X X X X X X X X 0
6. 1993........... X X X X X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 4P - REINSURANCE C
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. 1988........... X X X X X X X X 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
3. 1990........... X X X X X X X X X X X X 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
5. 1992........... X X X X X X X X X X X X X X X X X X X X
6. 1993........... X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
7 8 9 10 11
1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. 1988........... 0
2. 1989........... 0
3. 1990........... X X X X 0
4. 1991........... X X X X X X X X 0
5. 1992........... X X X X X X X X X X X X 0
6. 1993........... X X X X X X X X X X X X X X X X 0
</TABLE>
SCHEDULE P - PART 4Q - REINSURANCE D
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior..........
2. 1984...........
3. 1985........... X X X X
4. 1986........... X X X X X X X X
5. 1987........... X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
7 8 9 10 11
1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior.......... 0
2. 1984........... 0
3. 1985........... 0
4. 1986........... 0
5. 1987........... 0
</TABLE>
SCHEDULE P - PART 4R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior..........
2. 1984...........
3. 1985........... X X X X
4. 1986........... X X X X X X X X
5. 1987........... X X X X 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
7. 1989........... X X X X X X X X X X X X 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
9. 1991........... X X X X X X X X X X X X 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
11. 1993........... X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior.......... 0
2. 1984........... 0
3. 1985........... 0
4. 1986........... 0
5. 1987........... 0
6. 1988........... 0
7. 1989........... 0
8. 1990........... X X X X 0
9. 1991........... X X X X X X X X 0
10. 1992........... X X X X X X X X X X X X 0
11. 1993........... X X X X X X X X X X X X X X X X 14
</TABLE>
SCHEDULE P - PART 4R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 2 3 4 5 6
Losses Were
Incurred 1984 1985 1986 1987 1988
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior..........
2. 1984...........
3. 1985........... X X X X
4. 1986........... X X X X X X X X
5. 1987........... X X X X 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
7. 1989........... X X X X X X X X X X X X 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
9. 1991........... X X X X X X X X X X X X 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
11. 1993........... X X X X X X X X X X X X X X X X X X X X
</TABLE>
<TABLE>
<CAPTION>
BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
1
Years in Which 7 8 9 10 11
Losses Were
Incurred 1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior.......... 0
2. 1984........... 0
3. 1985........... 0
4. 1986........... 0
5. 1987........... 0
6. 1988........... 0
7. 1989........... 0
8. 1990........... X X X X 0
9. 1991........... X X X X X X X X 0
10. 1992........... X X X X X X X X X X X X 0
11. 1993........... X X X X X X X X X X X X X X X X 0
</TABLE>
92
<PAGE> 64
Form 2
ANNUAL STATEMENT FOR THE YEAR 1993 OF THE
COMMERCIAL UNDERWRITERS INSURANCE COMPANY
.........................................
(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)
<TABLE>
<S> <C> <C> <C> <C>
1993 $0 ( 60.0%) 1992 $0 ( 60.0%)
--------------------------- -----------------------------
1991 $0 ( 60.0%) Total $0
--------------------------- ----------------------
</TABLE>
(b) Other Liability and Products Liability
<TABLE>
<S> <C> <C> <C> <C>
1993 $0 ( 60.0%) 1992 $0 ( 60.0%)
--------------------------- -----------------------------
1991 $0 ( 60.0%) Total $0
--------------------------- ----------------------
</TABLE>
(c) Medical Malpractice
<TABLE>
<S> <C> <C> <C> <C>
1993 $0 ( 60.0%) 1992 $0 ( 60.0%)
--------------------------- -----------------------------
1991 $0 ( 60.0%) Total $0
--------------------------- ----------------------
</TABLE>
(d) Workers' Compensation
<TABLE>
<S> <C> <C> <C> <C>
1993 $0 ( 65.0%) 1992 $0 ( 65.0%)
--------------------------- -----------------------------
1991 $0 ( 65.0%) Total $0
--------------------------- ----------------------
</TABLE>
(e) Credit
<TABLE>
<S> <C>
Total $0
----------------------
</TABLE>
(f) All Lines Total (Report here and Page 3)
<TABLE>
<S> <C>
Total $0
----------------------
</TABLE>
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.
<TABLE>
<CAPTION>
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
(b) 1988
(c) 1989
(d) 1990
(e) 1991
(f) 1992
(g) 1993 0 0 0
---------------------------------------------------------------------------------------
(h) Totals 0 0 0
---------------------------------------------------------------------------------------
</TABLE>
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). Are they so reported in
this Statement? Answer: Yes [ ] No [X]
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? 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 Statement is being filed.
6. What were the net premiums in force at the end of the year for:
<TABLE>
<CAPTION>
(in thousands of dollars)
<S> <C> <C>
(a) Fidelity $0
(b) Surety $0
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
-----------
</TABLE>
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)? See Note 27 to Financial Statement.
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