<PAGE>
Exhibit 99.2
ANNUAL STATEMENT
For the Year Ended December 31, 1999
OF THE CONDITION AND AFFAIRS OF THE
AMERICAN UNION INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C>
NAIC Group Code 0193 , 0193 NAIC Company Code 25828 Employer's ID Number
------------------ ------------ ----- ----------
(Current Period) (Prior Period)
Organized under the laws of the State of Illinois using as the Port of Entry
---------------------, -------------------------------------
Incorporated 06/12/1916 Commenced Business 10/03/1916
---------- ----------
Statutory Home Office 303 East Washington Street, Bloomington, IL 61701
--------------------------------------------------------------------------------------------------------
Main Administrative Office 303 East Washington Street
---------------------------------------------------------------------------------------------------
Bloomington, IL 61701 (309)829-1061
------------------------------------------------------------------------------------------------------------------------------
Mail Address 303 East Washington Street, Bloomington. IL 61701
-----------------------------------------------------------------------------------------------------------------
Primary Location of Books and Records 303 East Washington Street,
----------------------------------------------------------------------------------------
Bloomington, IL 61701 (309)829-1061
------------------------------------------------------------------------------------------------------------------------------
Annual Statement Contact James David Dickinson (309)829-1061
-----------------------------------------------------------------------------------------------------
E-Mail Address: Fax Number:( )
------------------------------------------------- -------------------------
</TABLE>
OFFICERS
President Gregory Mark Shepard
Secretary William Mark Dalton
Treasurer James David Dickinson
VICE-PRESIDENTS
Tracy Morgan Shepard
James David Dickinson
William Mark Dalton
Wallace Theodore Marciniak
DIRECTORS OR TRUSTEES
Tracy Morgan Shepard
Patrick Francis Busch
Andrew Floyd Anderson
Gregory Mark Shepard
Mark Allen Weaver
State of Illinois
-----------------
County of McLean ss
----------------
The officers of this company, being duly sworn, each depose and say that they
are the above described officers of the said insurer, and that on the thirty-
first day of December last, all of the herein described assets were the absolute
property of the said insurer, free and clear from any liens or claims thereon,
except as herein stated, and that this annual statement, together with related
exhibits, schedules and explanations therein contained, annexed or referred to
are a full and true statement of all the assets and liabilities and of the
condition and affairs of the said insurer as of the thirty-first day of December
last, and of its income and deductions therefrom for the year ended on that
date, and have been completed in accordance with the NAIC annual statement
instructions and accounting practices and procedures manuals except to the
extent that: (1) state law may differ; or, (2) that state rules or regulations
require differences in reporting not related to accounting practices and
procedures, according to the best of their information, knowledge and belief,
respectively.
---------------------------------- ---------------------------------
(Signature) (Signature)
Gregory Mark Shepard William Mark Dalton
---------------------------------- ---------------------------------
(Printed Name) (Printed Name)
President Secretary
---------------------------------- ---------------------------------
(Signature)
James David Dickinson
----------------------------------
(Printed Name)
Treasurer
Subscribed and sworn to a. Is this an original filing? Yes [X] No [ ]
before me this_______ b. If no: l. State the amendment number_____
day of__________,2000 2. Date filed _____
3. Number of pages attached _____
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
ASSETS
<TABLE>
<CAPTION>
===========================================================================================================================
Current Year Prior Year
-------------------------------------------------------------------------------
1 2 3 4 5
Net Admitted
Ledger Non-Ledger Assets Not Assets Net Admitted
Assets Assets Admitted (Columns 1 + 2 - 3) Assets
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Bonds (less $............. liability
for asset transfers with put options,
Schedule D, Part 1).................... 3,210,390 3,210,390 3,224,180
2. Stocks:
2.1 Preferred stocks (Schedule D,
Part 2, Section 1)
2.2 Common Stocks (Schedule D,
Part 2, Section 2)................. 81,819,518 24,497,726 88,998,724 17,318,520 17,673,641
3. Mortgage loans on real estate
(Schedule B):
3.1 First liens........................
3.2 Other than first liens.............
4. Real estate (Schedule A):
4.1 Properties occupied by the company
(less $....... encumbrances).......
4.2 Other properties (less $...........
encumbrances)
5. Cash ($.........28,236 Schedule E,
Part 1) and short-term investments
($........1,028,755 Schedule DA,
Part 1)................................ 1,056,991 1,056,991 183,736
6. Other invested assets (Schedule BA).... 19,109,987 2,170,898 16,939,089
7. Receivable for securities............... 57,317 57,317
8. Aggregate write-ins for invested
assets..................................
----------------------------------------------------------------------------
9. Subtotals, cash and invested assets
(Lines 1 to 8).......................... 105,254,203 24,497,726 91,169,622 38,582,307 21,081,557
10. Agents' balances or uncollected
premiums (net as to commissions and
dividends):
10.1 Premiums and agents' balances in
course of collection (after
deducting ceded reinsurance
balances payable of ($..........). 14,478 14,478 (66,657)
10.2 Premiums, agents' balances and
installments booked but deferred
and not yet due (after deducting
ceded reinsurance balances payable
of $.......................)
(Including $..................
earned but unbilled premiums)....
10.3 Accrued retrospective premiums
(after deducting ceded reinsurance
balances payable of $.............)
11. Funds held by or deposited with
reinsured companies..............
12. Bills receivable, taken for
premiums.........................
13. Reinsurance recoverables on loss and
loss adjustment expense payments
(Schedule F, Part 3,
Columns 2 and 3).................
14. Federal income tax recoverable
and interest thereon.............
14A. Guaranty funds receivable
or on deposit....................
15. Electronic data processing
equipment........................ 268,062 268,062
16. Interest, dividends and real
estate income due and accrued.... 35,333 35,333 35,333
17. Receivable from parent,
subsidiaries and affiliates...... 14,680 14,680
18. Equities and deposits in pools
and associations.................
19. Amounts receivable relating to
uninsured accident and health
plans ...........................
20. Other assets nonadmitted
(Exhibit 1) .....................
21. Aggregate write-ins for other....
than invested assets............. 9,400
22. TOTALS (Lines 9 through 21)...... 105,551,423 24,533,059 91,184,302 38,900,180 21,059,633
=========================================================================================================================
DETAILS OF WRITE-INS
-------------------------------------------------------------------------------------------------------------------------
0801......................................
0802......................................
0803......................................
0898. Summary of remaining write-ins
for Line 8 from overflow page.......
----------------------------------------------------------------------------
0899. TOTALS (Lines 0801 through
0803 plus 0898) (Line 8 above)......
-------------------------------------------------------------------------------------------------------------------------
2101. Due from licensed insurance
company............................. 9,400
2102. ....................................
2103. ....................................
2198. Summary of remaining write-ins for
Line 21 from overflow page..........
----------------------------------------------------------------------------
2199. TOTALS (Lines 2101 through 2103
plus 2198) (Line 21 above).......... 9,400
=========================================================================================================================
</TABLE>
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year, 1998
figures have been restated, where appropriate, for consistency when comparing to
1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
LIABILITIES, SURPLUS AND OTHER FUNDS
<TABLE>
<CAPTION>
1 2
Current Year Prior Year
------------ ----------
<S> <C> <C>
1. Losses (Part 3A, Line 32, Column 5) ................................................................ 260,249 1,316,207
1A. Reinsurance payable on paid loss and loss adjustment expenses (Schedule F, Part 1, Column 2).......
2. Loss adjustment expenses (Part 3A, Line 32, Column 6) .............................................. 50,144 35,000
3. Contingent commissions and other similar charges ................................................... 86,205 153,492
4. Other expenses (excluding taxes, licenses and fees) ................................................ 38,537 138,219
5. Taxes, licenses and fees (excluding federal and foreign income taxes) .............................. (151,534) (32,830)
6. Federal and foreign income taxes (excluding deferred taxes) ........................................ 208,293 1,183,643
7. Borrowed money ..................................................................................... 11,600,000
8. Interest, including $ 183,958 on borrowed money .................................................... 183,958
9. Unearned premiums (Part 2A, Line 34, Column 5) (after deducting ceded reinsurance
unearned premiums of $.........) ................................................................... 148,633 864,347
10. Dividends declared and unpaid:
A. Stockholders ...................................................................................
B. Policyholders...................................................................................
11. Funds held by company under reinsurance treaties (Schedule F, Part 3, Column 14) ..................
12. Amounts withheld or retained by company for account of others ..................................... 26,479 28,958
13. Remittances and items not allocated ............................................................... 76,847
14. Provision for reinsurance (Schedule F, Part 7) ....................................................
15. Excess of statutory reserves over statement reserves (Schedule P Interrogatories) ................. 130,000 79,000
16. Net adjustments in assets and liabilities due to foreign exchange rates ...........................
17. Drafts outstanding ................................................................................
18. Payable to parent, subsidiaries and affiliates .................................................... 354,236 4,084,407
19. Payable for securities ............................................................................
20. Liability for amounts held under uninsured accident and health plans ..............................
21. Capital notes $.......... and interest thereon $.......... ........................................
22. Aggregate write-ins for liabilities ............................................................... 2,464,918
23. TOTAL liabilities (Lines 1 through 22) ............................................................ 12,935,200 10,392,208
24. Aggregate write-ins for special surplus funds .....................................................
25A. Common capital stock ............................................................................. 5,100,000 10,200,000
25B. Preferred capital stock
25C. Aggregate write-ins for other than special surplus funds .........................................
26A. Surplus notes ....................................................................................
26B. Gross paid in and contributed surplus ............................................................ 23,999,277 19,124,371
26C. Unassigned funds (surplus) ....................................................................... (3,134,297) (18,656,946)
26D. Less treasury stock, at cost:
(1) .........shares common (value included in Line 25A $............) ............................
(2) .........shares preferred (value included in Line 25B $.........) ............................
27. Surplus as regards policyholders (Lines 24 to 26C, less 26D) (Page 4, Line 32) .................... 25,964,980 10,667,425
28. TOTALS (Page 2, Line 22, Column 4) ................................................................ 38,900,180 21,059,633
===================================================================================================================================
DETAILS OF WRITE-INS
-----------------------------------------------------------------------------------------------------------------------------------
2201. Reserve for life policies and contracts including MSA ........................................... 2,459,906
2202. Life Advance Premium ............................................................................ 12
2203. Policy claims Life .............................................................................. 5,000
2298. Summary of remaining write-ins for Line 22 from overflow page ...................................
2299. TOTALS (Lines 2201 through 2203 plus 2298) (Line 22 above) ...................................... 2,464,918
-----------------------------------------------------------------------------------------------------------------------------------
2401. .................................................................................................
2402. .................................................................................................
2403. .................................................................................................
2498. Summary of remaining write-ins for Line 24 from overflow page ...................................
2499. TOTALS (Lines 2401 through 2403 plus 2498) (Line 24 above) ......................................
-----------------------------------------------------------------------------------------------------------------------------------
25CO1 .................................................................................................
25CO2 .................................................................................................
25CO3 .................................................................................................
25C98. Summary of remaining write-ins for Line 25C from overflow page..................................
25C99. TOTALS (Lines 25COI through 25CO3 plus 25C98) (Line 25C above)..................................
===================================================================================================================================
</TABLE>
3
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year, 1998
figures have been restated, where appropriate, for consistency when comparing to
1999
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
UNDERWRITING AND INVESTMENT EXHIBIT
<TABLE>
<CAPTION>
1 2
Current Prior
Year Year
----------------------------
<S> <C> <C>
STATEMENT OF INCOME
UNDERWRITING INCOME
1. Premiums earned (Part 2, Line 32, Column 4) ............................... 5,508,372 16,930,117
DEDUCTIONS
2. Losses incurred (Pad 3, Line 32, Column 7) ................................ 3,419,450 10,672,896
3. Loss expenses incurred (Part 4, Line 22, Column 1) ........................ 523,737 77,796
4. Other underwriting expenses incurred (Pad 4, Line 22, Column 2) ........... 3,174,511 7,387,328
5. Aggregate write-ins for underwriting deductions ...........................
6. Total underwriting deductions (Lines 2 through 5) ......................... 7,117,698 18,138,020
7. Net underwriting gain or (loss) (Line 1 minus Line 6) .....................(1,609,326) (1,207,903)
----------------------------
INVESTMENT INCOME
8. Net investment income earned (Part 1, Line 14) ............................ 4,180,713 3,670,973
9. Net realized capital gains or (losses) (Pad 1A, Line 10) ..................20,805,348 5,923,369
----------------------------
9A. Net investment gain or (loss) (Lines 8 plus 9) ............................24,986,061 9,594,342
OTHER INCOME
10. Net gain or (loss) from agents'or premium balances charged off (amount
recovered $............... amount charged off $............) .............. (51)
11, Finance and service charges not included in premiums ...................... 2,240
12. Aggregate write-ins for miscellaneous income .............................. 2,145,312 567,023
----------------------------
13. Total other income (Lines 10 through 12) .................................. 2,145,312 569,212
----------------------------
14. Net income before dividends to policyholders and before federal & foreign
income taxes (Lines 7 plus 9A plus 13) ....................................25,522,047 8,955,651
14A. Dividends to policyholders (Exhibit 2, Line 16, Column 1 plus Page 3,
Line 1OB, Column 1 minus Column 2) ........................................
----------------------------
14B. Net income, after dividends to policyholders but before federal and
foreign income taxes (Line 14 minus Line 14A) .............................25,522,047 8,955,651
15. Federal and foreign income taxes incurred ................................. 6,473,063 2,301,802
----------------------------
16. Net income (Line 14B minus Line 15) (to Line 18) ..........................19,048,984 6,653,849
CAPITAL AND SURPLUS ACCOUNT
17. Surplus as regards policyholders, December 31 prior year (Page 4,
Line 32, Column 2) ........................................................10,667,425 29,567,099
GAINS AND (LOSSES) IN SURPLUS
18. Net income (from Line 16) .................................................19,048,984 6,653,849
19. Net unrealized capital gains or (losses) (Pad 1A, Line 11) ................(4,206,456) (10,781,053)
20. Change in nonadmitted assets (Exhibit 1, Line 6, Column 3) ................ 731,123 616,529
21. Change in provision for reinsurance (Page 3, Line 14, Column 2
minus Column 1) ...........................................................
22. Change in foreign exchange adjustment .....................................
23. Change in excess of statutory reserves over statement reserves (Page 3,
Line 15, Column 2 minus Column 1) ......................................... (51,000) 11,000
23A. Change in surplus notes ...................................................
24. Capital changes:
A. Paid in (Exhibit 2, Line 6, Column 1) ................................
B. Transferred from surplus (Stock Dividend) ............................
C. Transferred to surplus ...............................................(5,100,000)
25. Surplus adjustments:
A. Paid in (Exhibit 2, Line 7, Column 1) ................................
B. Transferred to capital (Stock Dividend) ..............................
C. Transferred from capital ............................................. 5,100,000
26. Net remittances from or (to) Home Office (Exhibit 2, Line 4B minus
Line 12B, Column 1) .......................................................
27. Dividends to stockholders (cash) .......................................... (15,400,000)
28. Change in treasury stock (Page 3. Line 26D (1) and (2), Column 2
minus Column 1) ...........................................................
29. Extraordinary amounts of taxes for prior years ............................
30. Aggregate write-ins for gains and losses in surplus ....................... (225,094)
----------------------------
31. Change in surplus as regards policyholders for the year (Lines 18 .........
through 30) ...............................................................15,297,557 (18,899,675)
----------------------------
32. Surplus as regards policyholders, December 31 current year (Line 17 .......
plus Line 31)(Page 3, Line 27) ............................................25,964,980 10,667,425
============================================================================================================
DETAILS OF WRITE-INS
------------------------------------------------------------------------------------------------------------
0501. ..........................................................................
0502. ..........................................................................
0503. ..........................................................................
0598. Summary of remaining write-ins for Line 5 from overflow page .............
----------------------------
0599. TOTALS (Lines 0501 through 0503 plus 0598) (Line 5 above) ................
------------------------------------------------------------------------------------------------------------
1201. Commissions on Reinsurance Ceded - American Union Life ................... 261,000 680,000
1202. Life and Annuity Premium - American Union Life ........................... 1,280 2,211,342
1203. Deposit Premium - American Union Life .................................... (5,093) 79,752
1298. Summary of remaining write-ins for Line 12 from overflow page ............ 1,888,125 (2,404,071)
----------------------------
1299. TOTALS (Lines 1201 through 1203 plus 1298) (Line 12 above) ............... 2,145,312 567,023
----------------------------
3001. Merger Adjustment ........................................................ (225,094)
3002. ..........................................................................
3003. ..........................................................................
3098. Summary of remaining write-ins for Line 30 from overflow page
----------------------------
3099. TOTALS (Lines 3001 through 3003 plus 3098) (Line 30 above) ............... (225,094)
============================================================================================================
</TABLE>
4
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year, 1998
figures have been restated, where appropriate, for consistency when comparing to
1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
CASH FLOW
<TABLE>
<CAPTION>
CASH FROM OPERATIONS
=====================================================================================================================
1 2
Current Year Prior Year
---------------------------
<S> <C> <C>
1. Premiums collected net of reinsurance ............................................... 4,711,523 17,512,522
2. Loss and loss adjustment expenses paid (net of salvage and subrogation) ............. 4,984,001 12,509,932
3. Underwriting expenses paid .......................................................... 3,460,184 7,584,160
4. Other underwriting income (expenses).................................................
---------------------------
5. Cash from underwriting (Line 1 minus Line 2 minus Line 3 plus Line 4) ............... (3,732,662) (2,581,570)
6. Net investment income ............................................................... 4,378,462 3,777,099
7. Other income (expenses):
7.1 Agents' balances charged off .................................................... (51)
7.2 Net funds held under reinsurance treaties........................................
7.3 Net amount withheld or retained for account of others ........................... (2,479) (1,738)
7.4 Aggregate write-ins for miscellaneous items ..................................... (317,096) (2,144,921)
7.5 TOTAL other income (Lines 7.1 to 7.4) ........................................... (319,575) (2,146,710)
8. Dividends to policyholders on direct business, less $............... dividends on
reinsurance assumed or ceded (net) ..................................................
9. Federal and foreign income taxes (paid) recovered ................................... (7,448,413) (876,966)
---------------------------
10. Net cash from operations (Line 5 plus Line 6 plus Line 7.5 minus
Line 8 plus Line 9).................................................................. (7,122,188) (1,828,147)
CASH FROM INVESTMENTS
11. Proceeds from investments sold, matured or repaid:
11.1 Bonds .......................................................................... 7,223,281
11.2 Stocks ......................................................................... 24,081,289 20,062,833
11.3 Mortgage loans .................................................................
11.4 Real estate .................................................................... 1,397,921
11.5 Other invested assets .......................................................... 3,241,208
11.6 Net gains or (losses) on cash and short-term investments ....................... 1,265 3,515
11.7 Miscellaneous proceeds
11.8 Total investment proceeds (Lines 11.1 to 11.7) ................................. 24,082,554 31,928,758
12. Cost of investments acquired (long-term only):
12.1 Bonds .......................................................................... 4,617,376
12.2 Stocks ......................................................................... 4,957,644 13,928,831
12.3 Mortgage loans..................................................................
12.4 Real estate.....................................................................
12.5 Other invested assets .......................................................... 19,109,987 1,391,208
12.6 Miscellaneous applications......................................................
---------------------------
12.7 TOTAL investments acquired (Lines 12.1 to 12.6) ................................ 24,067,631 19,937,415
---------------------------
13. Net Cash from investments (Line 11.8 minus Line 12.7) ............................... 14,923 11,991,343
CASH FROM FINANCING AND MISCELLANEOUS SOURCES
14. Cash provided:
14.1 Surplus notes, capital and surplus paid in......................................
14.2 Capital notes $ less amounts repaid $...........................................
14.3 Net transfers from affiliates .................................................. 42,855
14.4 Borrowed funds received ........................................................ 11,600,000
14.5 Other cash provided ............................................................ 5,222,039
---------------------------
14.6 TOTAL (Lines 14.1 to 14.5) ..................................................... 11,600,000 5,264,894
15. Cash applied:
15.1 Dividends to stockholders paid ................................................. 15,400,000
15.2 Net transfers to affiliates .................................................... 3,222,213
15.3 Borrowed funds repaid...........................................................
15.4 Other applications ............................................................. 397,267
---------------------------
15.5 TOTAL (Lines 15.1 to 15.4) ..................................................... 3,619,480 15,400,000
---------------------------
16. Net cash from financing and miscellaneous sources (Line 14.6
minus Line 15.5) .................................................................... 7,980,520 (10,135,106)
RECONCILIATION OF CASH
AND SHORT-TERM INVESTMENTS
17. Net change in cash and short-term investments (Line 10, plus
Line 13, plus Line 16) .............................................................. 873,255 28,090
18. Cash and short-term investments:
18.1 Beginning of year .............................................................. 183,736 155,646
---------------------------
18.2 End of year (Line 17 plus Line 18.1) ........................................... 1,056,991 183,736
=====================================================================================================================
DETAILS OF WRITE-INS
---------------------------------------------------------------------------------------------------------------------
07.401 Finance Charges, Non-Property and Casualty items ................................. (1,315) 2,240
07.402 Commissions on Reinsurance Ceded and Administration Fees ......................... 2,029,438 680,000
07.403 Surrender Benefits ............................................................... (2,345,218) (2,827,161)
07.498 Summary of remaining write-ins for Line 7.4 from overflow page
07.499 TOTALS (Lines 7.401 through 7.403 plus 7.498) (Line 7.4 above) ................... (317,095) (2,144,921)
=====================================================================================================================
</TABLE>
5
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year,
1998 figures have been restated, where appropriate, for consistency when
comparing to 1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSUIRANCE COMPANY
UNDERWRITING AND INVESTMENT EXHIBIT
PART I - INTEREST, DIVIDENDS AND REAL ESTATE INCOME
<TABLE>
<CAPTION>
====================================================================================================================================
1 2 3 Paid in Advance Due and Accrued(h) 8
--------------------------------------- Earned
4 5 6 7 During Year
Collected Current Prior Current Prior Columns
Schedule During Year Year Year Year Year 3+5+6-4-7
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 U.S. government bonds ..................... D(a) 190,210 35,333 35,333 190,210
1.1 Bonds exempt from U.S. tax ................ D(a)
1.2 Other bonds (unaffiliated) ................ D(a)
1.3 Bonds of affiliates ....................... D(a)
2.1 Preferred stocks (unaffiliated) ........... D(b)
2.11 Preferred stocks of affiliates ............ D(b)
2.2 Common stock (unaffiliated) ............... D 3,816,595 3,816,595
2.21 Common stock of affiliates ................ D
3 Mortgage loans ............................ B(c)
4 Real estate ............................... A(d)
5.1 Cash on hand and on deposit ............... E
5.2 Short-term investments .................... DA(e) 80,152 80,152
6 Other invested assets ..................... BA 624,668 624,668
7 Derivative instruments .................... DB/DC(f)
8 Aggregate write-ins for investment income .
-----------------------------------------------------------------
9 TOTALS .................................... (g) 4,711,625 35,333 35,333 (g)4,711,625
------------------------------------------------------------------------------------------------------------------------------------
DEDUCTIONS
------------------
10. Total investment expenses incurred (Part 4, Line 22, Column 3) .................... 150,412
1OA. Interest expense .................................................................. (i) 380,500
11. Depreciation on real estate (for companies which depreciate annually
on a formula basis) ...............................................................
12. Aggregate write-ins for deductions from investment income ......................... ------------------
13. Total deductions (Lines 10 to 12) ................................................. 530,912
------------
14. Net investment income earned (Line 9 minus Line 13 - to Page 4, Line 8) ........... 4,180,713
====================================================================================================================================
DETAILS OF WRITE-INS
------------------------------------------------------------------------------------------------------------------------------------
0801. ...................................................................................
0802. ...................................................................................
0803. ...................................................................................
0898. Summary of remaining write-ins for Line 8
from overflow page ................................................................
---------------------------------------------------------------
0899. TOTALS (Lines 0801 through 0803 plus
0898 (Part 1, Line 8) .............................................................
------------------------------------------------------------------------------------------------------------------------------------
DEDUCTIONS
------------------
1201. ...................................................................................
1202. ...................................................................................
1203. ...................................................................................
1298. Summary of remaining write-ins for Line 12 from overflow page ..................... ------------------
1299. TOTALS (Lines 1201 through 1203 plus 1298) (Part 1, Line 12) ......................
(a) Includes $ .............accrual of discount less $ .........13,790 amortization of premium.
(b) Includes $ .............accrual of discount less $ ................amortization of premium.
(c) Includes $ .............accrual of discount less $ ................amortization of premium.
(d) Includes $ .............for company's occupancy of its own buildings.
(e) Includes $ ......28,430 accrual of discount less $ ................amortization of premium.
(f) Includes $ .............accrual of discount less $ ................amortization of premium.
(g) Includes asset transfers with put options accounted for as financing arrangements: $ ............Column 3. $ ..........Column 8.
(h) Admitted items only. State basis of exclusions
(i) Includes $ .............interest on surplus notes and $ ........interest on capital notes.
</TABLE>
PART 1A - CAPITAL GAINS AND (LOSSES) ON INVESTMENTS
<TABLE>
<CAPTION>
====================================================================================================================================
1 2 3 4 5 6 7
Net Gain or (Loss) Total
from Change (Net of Columns
Increases by Decreases by in Difference 2 to 6 inclusive)
Profit on Sales Loss on Sales Adjustment in Adjustment in Between Book and (Columns
or Maturity or Maturity Book Value Book Value Admitted Values 2-3+4-5+6)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 U.S. government bonds .............
1.1 Bonds exempt from U.S. tax ........
1.2 Other bonds (unaffiliated) ........
1.3 Bonds of affiliates ...............
2.1 Preferred stocks (unaffiliated) ...
2.11 Preferred stocks of affiliates ....
2.2 Common stock (unaffiliated) ....... 20,828,939 24,856 (2,035,558) 18,768,525
2.21 Common stock of affiliates ........
3 Mortgage loans ...................
4 Real estate ....................... (a)
5.1 Cash on hand and on deposit .......
5.2 Short-term investments ............ 1,265 1,265
6 Other invested assets ............. (2,170,898) (2,170,898)
7 Derivative instruments ............
8 Aggregate write-ins for capital ...
gains and (losses) ................
9 TOTALS ............................ 20,830,204 24,856 (4,206,456) 16,598,892
(Distribution of Line 9, Column 7)
10 Net realized capital gains or
(losses) (Page 4, Line 9)
(Column 2 - 3, Line 9) ............ 20,805,348
11 Net unrealized capital gains or
(losses) (Page 4, Line 19)
(Column 4 - 5 + 6, Line 9) ........ (4,206,456)
====================================================================================================================================
DETAILS OF WRITE-INS
------------------------------------------------------------------------------------------------------------------------------------
0801. ...............................................
0802. ...............................................
0803. ...............................................
0898. Summary of remaining write-ins for Line 8
from overflow .................................
----------------------------------------------------------------------------------------
0899. TOTALS (Lines 0801 through 0803 plus 0898)
(Part 1A, Line 8) .............................
====================================================================================================================================
(a) Excluding $.........depreciation on real estate included in Part 1, Line 11.
</TABLE>
6
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year,
1998 figures have been restated, where appropriate, for consistency when
comparing to 1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
UNDERWRITING AND INVESTMENT EXHIBIT
PART 2 - PREMIUMS EARNED
<TABLE>
<CAPTION>
====================================================================================================================================
1 2 3 4
Unearned
Net Premiums Premiums Premiums
Written Per Dec. 31 Prior Year - Dec. 31 Premiums Earned
Column 4, per Column 3, Current Year - per During Year
Line of Business Part 2B Last Year's Part 2 Column 5, Part 2A (Columns 1 + 2 - 3)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Fire ........................................... (13) 314 301
2. Allied lines ................................... (2) 55 53
3. Farmowners multiple peril ......................
4. Homeowners multiple peril ...................... (17) 575 558
5. Commercial multiple peril ......................
6. Mortgage guaranty ..............................
8. Ocean marine ...................................
9. Inland marine ..................................
10. Financial guaranty ............................
11.1 Medical malpractice - occurrence .............
11.2 Medical malpractice - claims-made ............
12. Earthquake ....................................
13. Group accident and health .....................
14. Credit accident and health ....................
(group and individual) ........................
15. Other accident and health .....................4,265,052 739,225 15,131 4,989,146
16. Workers' compensation .........................
17.1 Other liability - occurrence .................
17.2 Other liability - claims-made ................
18.1 Products liability - occurrence ..............
18.2 Products liability - claims-made .............
19.1 19.2 Private passenger auto liability ........ 273,263 64,449 69,141 268,571
19.3 19.4 Commercial auto liability ...............
21. Auto physical damage .......................... 254,375 59,729 64,361 249,743
22. Aircraft (all perils) .........................
23. Fidelity ......................................
24. Surety ........................................
26. Burglary and theft ............................
27. Boiler and machinery ..........................
28. Credit ........................................
29. International .................................
30A. Reinsurance-Nonproportional Assumed
Property .....................................
30B. Reinsurance-Nonproportional
Assumed Liability ............................
30C. Reinsurance-Non proportional Assumed
Financial Lines ..............................
31. Aggregate write-ins for other lines
of business ...................................
-------------------------------------------------------------------------------
32. TOTALS ........................................4,792,658 864,347 148,633 5,508,372
==================================================================================================================================
DETAILS OF WRITE-INS
----------------------------------------------------------------------------------------------------------------------------------
3101 ..............................................
3102 ..............................................
3103 ..............................................
3198. Summary of remaining write-ins for Line 31
from overflow page ..........................
-------------------------------------------------------------------------------
3199. TOTALS (Lines 3101 through 3103 + 3198)
(Line 31 above) .............................
==================================================================================================================================
</TABLE>
7
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year, 1998
figures have been restated, where appropriate, for consistency when comparing to
1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
UNDERWRITING AND INVESTMENT EXHIBIT
PART 2A - RECAPITULATION OF ALL PREMIUMS
(a) Gross premiums (less reinsurance) and unearned premiums on all
unexpired risks and reserve for return premiums under rate credit or
retrospective rating plans based upon experience, viz:
<TABLE>
<CAPTION>
====================================================================================================================================
1 2 3 4 5
Amount Unearned Amount Unearned Reserve for Total
(Running One (Running More Rate Credits Reserve
Year or Less Than One Year and Retrospective For Unearned
From Date From Date Advance Adjustments Premiums
of Policy) of Policy) Premiums Based on Columns
Line of Business (b) (b) 100% Experience 1+2+3+4
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Fire ...........................................
2. Allied lines ...................................
3. Farmowners multiple peril ......................
4. Homeowners multiple peril ......................
5. Commercial multiple peril ......................
6. Mortgage guaranty ..............................
8. Ocean marine ...................................
9. Inland marine ..................................
10. Financial guaranty .............................
11.1 Medical malpractice - occurrence ...............
11.2 Medical malpractice - claims-made ..............
12. Earthquake .....................................
13. Group accident and health ...................... (c)
14. Credit accident and health .....................
(group and individual) .........................
15. Other accident and health ...................... 15,131 (c) 15,131
16. Workers' compensation ..........................
17.1 Other liability - occurrence ...................
17.2 Other liability - claims-made ..................
18.1 Products liability - occurrence ................
18.2 Products liability - claims-made ...............
19.1 19.2 Private passenger auto liability .......... 69,141 69,141
19.3 19.4 Commercial auto liability .................
21. Auto physical damage ........................... 64,361 64,361
22. Aircraft (all perils) ..........................
23. Fidelity .......................................
24. Surety .........................................
26. Burglary and theft .............................
27. Boiler and machinery ...........................
28. Credit .........................................
29. International ..................................
30A. Reinsurance-Noaproportional Assumed Property ...
30B. Reinsurance-Nonproportional Assumed Liability ..
30C. Reinsurance-Nonproportional Assumed
Financial Lines ................................
31. Aggregate write-ins for other lines
of business ....................................
-------------------------------------------------------------------------------
32. TOTALS ......................................... 148,633 148,633
------------------------------------------------------------------------------------------------------------------------------------
33. Accrued retrospective premiums based
on experience ..................................
34. Balance (Line 32 plus Line 33) ................. 148,633
====================================================================================================================================
DETAILS OF WRITE-INS
------------------------------------------------------------------------------------------------------------------------------------
3101. ...............................................
3102. ...............................................
3103. ...............................................
3198. Summary of remaining write-ins for Line 31
from overflow page ............................
3199. TOTALS (Lines 3101 through 3103 plus 3198)
(Line 31 above) ...............................
====================================================================================================================================
</TABLE>
(a) By gross premiums is meant the aggregate of all the premiums written in
the policies or renewals in force.
Are they so returned in this statement? Yes[ ] No[X]
(b) State here basis of computation used in each case
(c) Including $............ reserved for deferred maternity and other similar
benefits.
8
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year, 1998
figures have been restated, where appropriate, for consistency when comparing to
1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
UNDERWRITING AND INVESTMENT EXHIBIT
PART 213 - PREMIUMS WRITTEN
Gross Premiums (Less Return Premiums), Including Policy and Membership Fees
Wriften and Renewed During Year
<TABLE>
<CAPTION>
====================================================================================================================================
1 Reinsurance Assumed Reinsurance Ceded 4
----------------------------------------------------------- Net Premiums
Direct 2a 2b 3a 3b Written
Business From From To To Columns
Line of Business (a) Affiliates Non-Affiliates Affiliates Non-Affiliates 1+2a+2b-3a-3b
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Fire .................................. (13) (13)
2. Allied lines .......................... (2) (2)
3. Farmowners multiple peril .............
4. Homeowners multiple peril ............. (17) (17)
5. Commercial multiple peril .............
6. Mortgage guaranty .....................
8. Ocean marine ..........................
9. Inland marine .........................
10. Financial guaranty ....................
11.1 Medical malpractice - occurrence ......
11.2 Medical malpractice - claims-made .....
12. Earthquake ............................
13. Group accident and health .............
14, Credit accident and health (group and
individual) ...........................
15. Other accident and health ............. 4,265,052 4,265,052
16. Workers' compensation .................
17.1 Other liability - occurrence ..........
17.2 Other liability - claims-made .........
18.1 Products liability - occurrence .......
18.2 Products liability - claims-made ......
19.1 19.2 Private passenger auto liability . 273,263 273,263
19.3 19.4 Commercial auto liability ........
21. Auto physical damage .................. 254,375 254,375
22. Aircraft (all perils) .................
23. Fidelity ..............................
24. Surety ................................
26. Burglary and theft ....................
27. Boiler and machinery ..................
28. Credit ................................
29. International .........................
30A. Reinsurance-Nonproportional Assumed
Property .............................. XXX
30B. Reinsurance-Nonproportional Assumed
Liability ............................. XXX
0C. Reinsurance-Nonproportional Assumed
Financial Lines ....................... XXX
31. Aggregate write-ins for other lines
of business ........................... ---------------------------------------------------------------------------------------
32. TOTALS ................................ 4,792,658 4,792,658
====================================================================================================================================
DETAILS OF WRITE-INS
------------------------------------------------------------------------------------------------------------------------------------
3101. ......................................
3102. ......................................
3103. ......................................
3198. Summary of remaining write-ins for
Line 31 from overflow page ...........
3199. TOTALS (Lines 3101 through 3103
plus 3198) (Line 31 above) ...........
====================================================================================================================================
</TABLE>
(a) Does the company's direct premiums written include premiums recorded on an
installment basis? Yes[ ] No[X] If yes,
(1) The amount of such installment premiums $..........
(2) Amount at which such installment premiums would have been reported had
they been recorded on an annualized basis $.........
9
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year, 1998
figures have been restated, where appropriate, for consistency when comparing to
1999
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
UNDERWRITING AND INVESTMENT EXHIBIT
PART 3 - LOSSES PAID AND INCURRED
<TABLE>
<CAPTION>
Losses Paid Less Salvage 5 6 7 8
--------------------------------------------- Net Losses Losses Percentage of
1 2 3 4 Unpaid Incurred Losses Incurred
Net Payments Current Year Net Losses Current Year (Column 7, Part 3)
Direct Reinsurance Reinsurance (Columns (Part 3A, Unpaid (Columns to Premiums Earned
Line of Business Business Assumed Recovered 1+2-3) Column 5) Prior Year 4+5-6) (Column 4, Part 2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Fire .....................1,316 1,316 186 1,253 249 82.72
2. Allied lines ............. 221 221 89 132 249.06
3. Farmowners multiple
peril ...................
4 Homeowners multiple
peril ...................1,259 1,259 1,680 3,092 (153) (27.42)
5 Commercial multiple
peril ...................
6 Mortgage guaranty ........
8 Ocean marine .............
9 Inland marine ............
10 Financial guaranty .......
11.1 Medical malpractice
occurrence ..............
11.2 Medical malpractice
claims-made .............
12. Earthquake ...............
13 Group accident and
health ..................
14 Credit accident and
health (group and
individual) .............
15 Other accident and
health ..............4,227,394 4,227,394 146,883 1,199,468 3,174,809 63.63
16 Workers' compensation
17.1 Other liability -
occurrence ..............
17.2 Other liability -
claims-made .............
18.1 Products liability -
occurrence ..............
18.2 Products liability -
claims made .............
19.1 19.2 Private passenger
auto liability ........144,898 144,898 108,500 109,555 143,843 53.56
19.3 19.4 Commercial auto
liability ...............
21 Auto physical damage ...100,320 100,320 3,000 2,750 100,570 40.27
22 Aircraft (all perils)
23 Fidelity .................
24 Surety ...................
26 Burglary and theft .......
27 Boiler and machinery .....
28 Credit ...................
29 International ............
30A Reinsurance-Nonproportional
Assumed Property ......... XXX
30B Reinsurance-Nonproportional
Assumed Liability ........ XXX
30C Reinsurance-Non proportional
Assumed Financial Lines .. XXX
31 Aggregate write-ins for
other lines of business ..
32 TOTALS ...............4,475,408 4,475,408 260,249 1,316,207 3,419,450 62.08
====================================================================================================================================
DETAILS OF WRITE-INS
------------------------------------------------------------------------------------------------------------------------------------
3101 ..........................
3102 ..........................
3103 ..........................
3198. Summary of remaining write-ins for Line 31 from overflow page
3199. TOTALS (Lines 3101 through 3103 plus 3198) (Line 31 above)
====================================================================================================================================
</TABLE>
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year 1998
figures have been restated, where appropriate, for consistency when comparing to
1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
UNDERWRITING AND INVESTMENT EXHIBIT
PART 3A - UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES
<TABLE>
<CAPTION>
Adjusted or in Process
of Adjustment 2 3
--------------------------
Net Losses
1a 1b Deduct Reinsurance Excluding
Recoverable from Incurred But Not
Authorized and Reported
Reinsurance Unauthorized (Columns
Direct Assumed Companies 1a + 1b - 2)
----------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Fire ..................... 186 186
2. Allied lines .............
3. Farmowners multiple
peril ...................
4 Homeowners multiple
peril ................... 1,680 1,680
5 Commercial multiple
peril ...................
6 Mortgage guaranty ........
8 Ocean marine .............
9 Inland marine ............
10 Financial guaranty .......
11.1 Medical malpractice
occurrence ..............
11.2 Medical malpractice
claims-made .............
12. Earthquake ...............
13 Group accident and
health ..................
14 Credit accident and
health (group and
individual) .............
15 Other accident and
health .................. 95,231 95,231
16 Workers' compensation
17.1 Other liability -
occurrence ..............
17.2 Other liability -
claims-made .............
18.1 Products liability -
occurrence ..............
18.2 Products liability -
claims made .............
19.1 19.2 Private passenger
auto liability .......... 73,500 73,500
19.3 19.4 Commercial auto
liability ...............
21 Auto physical damage .....
22 Aircraft (all perils)
23 Fidelity .................
24 Surety ...................
26 Burglary and theft .......
27 Boiler and machinery .....
28 Credit ...................
29 International ............
30A Reinsurance-Nonproportional
Assumed Property ......... XXX
30B Reinsurance-Nonproportional
Assumed Liability ........ XXX
30C Reinsurance-Non proportional
Assumed Financial Lines .. XXX
31 Aggregate write-ins for
other lines of business ..
32 TOTALS ................... 170,597 170,597
====================================================================================================================================
DETAILS OF WRITE-INS
------------------------------------------------------------------------------------------------------------------------------------
3101 ..........................
3102 ..........................
3103 ..........................
3198. Summary of remaining write-ins for Line 31 from overflow page
3199. TOTALS (Lines 3101 through 3103 plus 3198) (Line 31 above)
====================================================================================================================================
<CAPTION>
Incurred But Not Reported 5 6
-----------------------------------------
4a 4b 4c
Net
Losses Unpaid Unpaid Loss
Reinsurance Reinsurance (Columns) Adjustment
Direct Assumed Ceded 3 + 4a + 4b - 4c) Expenses
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Fire ..................... 186
2. Allied lines .............
3. Farmowners multiple
peril ...................
4 Homeowners multiple
peril ................... 1,680
5 Commercial multiple
peril ...................
6 Mortgage guaranty ........
8 Ocean marine .............
9 Inland marine ............
10 Financial guaranty .......
11.1 Medical malpractice
occurrence ..............
11.2 Medical malpractice
claims-made .............
12. Earthquake ...............
13 Group accident and
health .................. (a)
14 Credit accident and
health (group and
individual) .............
15 Other accident and
health .................. 51,652 (a) 146,883 15,144
16 Workers' compensation
17.1 Other liability -
occurrence ..............
17.2 Other liability -
claims-made .............
18.1 Products liability -
occurrence ..............
18.2 Products liability -
claims made .............
19.1 19.2 Private passenger
auto liability .......... 35,000 108,500 30,000
19.3 19.4 Commercial auto
liability ...............
21 Auto physical damage ..... 3,000 3,000 5,000
22 Aircraft (all perils)
23 Fidelity .................
24 Surety ...................
26 Burglary and theft .......
27 Boiler and machinery .....
28 Credit ...................
29 International ............
30A Reinsurance-Nonproportional
Assumed Property ......... XXX
30B Reinsurance-Nonproportional
Assumed Liability ........ XXX
30C Reinsurance-Non proportional
Assumed Financial Lines .. XXX
31 Aggregate write-ins for
other lines of business ..
32 TOTALS ................... 89,652 260,249 50,144
====================================================================================================================================
DETAILS OF WRITE-INS
------------------------------------------------------------------------------------------------------------------------------------
3101 ..........................
3102 ..........................
3103 ..........................
3198. Summary of remaining write-ins for Line 31 from overflow page
3199. TOTALS (Lines 3101 through 3103 plus 3198) (Line 31 above)
====================================================================================================================================
</TABLE>
(a) Including $ for present value of life indemnity claims and $ reserved
for deferred maternity and other similar benefits.
11
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year 1998
figures have been restated, where appropriate, for consistency when comparing to
1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
UNDERWRITING AND INVESTMENT EXHIBIT
PART 4 - EXPENSES
<TABLE>
<CAPTION>
==================================================================================================================================
1 2 3 4
Loss Other
Adjustment Underwriting Investment
Expenses Expenses Expenses Total
----------------------------------------------------------
<S> <C> <C> <C> <C>
1. Claim adjustment services:
A. Direct...................................................... 12,489 12,489
B. Reinsurance assumed ........................................
C. Reinsurance ceded ..........................................
----------------------------------------------------------
D. Net claim adjustment services (A + B - C)................... 12,489 12,489
2. Commission and brokerage:
A. Direct excluding contingent.................................... 1,025,936 1,025,936
B. Reinsurance assumed excluding contingent ......................
C. Reinsurance ceded excluding contingent ........................
D. Contingent - direct ........................................
E. Contingent - reinsurance assumed ...........................
F. Contingent - reinsurance ceded .............................
G. Policy and membership fees .................................
----------------------------------------------------------
H. Net commission and brokerage (A + B - C + D + E - F + G).... 1,025,936 1,025,936
3. Allowances to manager and agents ..............................
4. Advertising ................................................... 7,404 7,404
5. Boards, bureaus and associations .............................. (12,703) (12,703)
6. Surveys and underwriting reports .............................. 62,230 62,230
7. Audit of assureds' records ....................................
8. Salary and related items:
A. Salaries ................................................... 205,700 1,380,981 50,000 1,636,681
B. Payroll taxes .............................................. 11,171 82,755 3,500 97,426
9. Employee relations and welfare ................................ 14,438 98,008 112,446
10. Insurance .................................................... 8,024 8,024
11. Directors' fees .............................................. 3,600 3,600
12. Travel and travel items ...................................... 21,870 21,870
13. Rent and rent items .......................................... 1,000 294,950 13,000 308,950
14. Equipment.....................................................
15. Printing and stationery ...................................... 5,000 74,787 200 79,987
16. Postage, telephone and telegraph, exchange and express........ 20,000 49,068 500 69,568
17. Legal and auditing ........................................... 5,000 101,511 83,212 189,723
----------------------------------------------------------
17A. TOTALS (Lines 3 to 17)....................................... 262,309 2,172,485 150,412 2,585,206
18. Taxes, licenses and fees:
A. State and local insurance taxes deducting guaranty
association credits of $....... (2,581) (2,581)
B. Insurance department licenses and fees .................... 19,105 19,105
C. Gross guaranty association assessments ....................
D. All other (excluding federal and foreign income and
real estate)...............................................
----------------------------------------------------------
E. TOTAL taxes, licenses and fees (A + B + C + D) ............ 16,524 16,524
19. Real estate expenses .........................................
20. Real estate taxes ............................................
20A. Reimbursements by uninsured accident and health plans .......
21. Aggregate write-ins for miscellaneous expenses ............... 248,939 (40,434) 208,505
----------------------------------------------------------
22. TOTAL expenses incurred ...................................... 523,737 3,174,511 150,412 (a) 3,848,660
23. Less unpaid expenses - current year........................... 50,144 (26,792) 23,352
24. Add unpaid expenses - prior year ............................. 35,000 258,881 293,881
25. Amounts receivable relating to uninsured accident and
health plans, prior year .....................................
26. Amounts receivable relating to uninsured accident and
health plans, current year ...................................
----------------------------------------------------------
27. TOTAL EXPENSES PAID (Lines 22 - 23 + 24 - 25 + 26) ........... 508,593 3,460,184 150,412 4,119,189
=================================================================================================================================
DETAILS OF WRITE-INS
---------------------------------------------------------------------------------------------------------------------------------
2101. Contributions .............................................. 2,185 2,185
2102. Over & Short ............................................... 3,522 3,522
2103. Investigation and Settlement of Health Claims .............. 248,939 (46,141) 202,798
2198. Summary of remaining write-ins for Line 21 from
overflow page ..............................................
----------------------------------------------------------
2199. TOTALS (Lines 2101 through 2103 plus 2198)
(Line 21 above) ............................................ 248,939 (40,434) 208,505
=================================================================================================================================
(a) Includes management fees of $............ to affiliates and $..........to non-affiliates
</TABLE>
12
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year, 1998
figures have been restated, where appropriate, for consistency when comparing to
1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
EXHIBIT 1 -
ANALYSIS OF NONADMITTED ASSETS AND RELATED ITEMS
<TABLE>
<CAPTION>
1 2 3
Changes for Year
End of End of (Increase)
Current Year Prior Year Decrease
------------ ---------- ----------------
<S> <C> <C> <C>
1. Summary of Items Page 2, Lines 10 to 15 and 17 to 19, Column 3.................. 14,680 699,303 684,623
2. Other Assets:
2.1 Bills receivable not taken for premiums.....................................
2.2 Furniture, equipment and supplies...........................................
2.3 Loans on personal security, endorsed or not.................................
--------- -------- -----------
3. TOTAL (Lines 2.1 to 2.3) (Page 2, Line 20, Column 3)............................
4. Aggregate write-ins for other than invested assets (Page 2, Line 21, Column 3).. 46,500 46,500
5. Aggregate write-ins for related items...........................................
--------- -------- -----------
6. TOTAL (Line 1 plus Lines 3 to 5)................................................ 14,680 745,803 731,123
========= ======== ===========
DETAILS OF WRITE-INS
0401. Advances to officer.......................................................... 46,500 46,500
0402...............................................................................
0403 ..............................................................................
0498. Summary of remaining write-ins for Line 4 from overflow page.................
0499. TOTALS (Lines 0401 through 0403 plus 0498) (Line 4 above).................... 46,500 46,500
0501...............................................................................
0502...............................................................................
0503...............................................................................
0598. Summary of remaining write-ins for Line 5 from overflow page.................
--------- -------- -----------
0599. TOTALS (Lines 0501 through 0503 plus 0598) (Line 5 above) ...................
========= ======== ===========
</TABLE>
13
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99, The 1999 results are stated on a merged basis. The prior year, 1998
figures have been restated, where appropriate, for consistency when comparing to
1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
EXHIBIT 2 - RECONCILIATION OF LEDGER ASSETS
<TABLE>
<CAPTION>
1 2
INCREASE IN LEDGER ASSETS Current Year Prior Year
------------ ----------
<S> <C> <C>
1. Net premiums written (Part 2, Line 32, Column 1)........................................... 4,792,658 17,509,140
2. Interest, dividends and real estate income received (Part 1, Line 9, Column 3)............. 4,711,625 4,890,045
3. From sale or maturity of ledger assets (Part 1A, Line 9, Column 2)......................... 20,830,204 5,923,369
4. Other income items or increases, viz:
A. Agents' balances previously charged off.................................................
B. Remittances from home office to U.S. branch (gross).....................................
C. Funds held under reinsurance treaties (net).............................................
D. Borrowed money (gross) .................................................................
E. Amounts withheld or retained for account of others (net)................................
F. Aggregate write-ins for increases in ledger assets...................................... 10,006,380 6,165,106
5. Adjustment in book value of ledger assets (Part 1 A, Line 9, Column 4).....................
6. Capital paid in (Page 4, Line 24A).........................................................
7. Surplus paid in (Page 4, Line 25A).........................................................
7A. Surplus notes (Page 4, Line 23A) .........................................................
---------- ----------
8. TOTAL (Lines 1 to 7A)................................................................. 40,340,867 34,487,660
DECREASE IN LEDGER ASSETS
9. Net losses paid (Part 3, Line 32, Column 4)................................................ 4,475,408 12,431,206
10. Expenses paid (Part 4, Line 27, Column 4).................................................. 4,119,189 8,433,839
1OA. Interest expense (Part 1, Line I OA) ...................................................... 380,500 323,000
11. From sale or maturity of ledger assets (Part 1A, Line 9, Column 3) ........................ 24,856
11A. Surplus notes (Page 4, Line 23A)...........................................................
12. Other disbursement items or decreases, viz:
A. Agents' balances charged off ........................................................... 51
B. Remittances to home office from U.S. branch (gross).....................................
C. Funds held under reinsurance treaties (net).............................................
D. Borrowed money (gross)..................................................................
E. Amounts withheld or retained for account of others (net)................................ 2,479
F. Aggregate write-ins for decreases in ledger assets...................................... 2,571,629 2,828,091
13. Adjustment in book value of ledger assets (Part 1A, Line 9, Column 5)
and depreciation (Part 1, Line 11)......................................................... 17,703
14. Federal and foreign income taxes paid...................................................... 7,448,413 876,966
15. Dividends paid stockholders................................................................ 15,400,000
16. Dividends to policyholders on direct business, less
$ dividends on reinsurance assumed or ceded (net)................................
---------- ----------
17. TOTAL (Lines 9 to 16) ................................................................. 19,022,474 40,310,856
RECONCILIATION BETWEEN YEARS
18. Amount of ledger assets as per balance December 31 of prior year ........................... 84,233,033 90,056,229
---------- ----------
19. Increase or (decrease) in ledger assets during the year (Line 8 minus Line 17).............. 21,318,393 (5,823,196)
---------- ----------
20. Balance = ledger assets December 31 of current year......................................... 105,551,426 84,233,033
=========== ==========
DETAILS OF WRITE-INS
04F01, Service Charges.......................................................................... 2,240
04FO2. Increase in Ledger Liabilities and Interest Payable...................................... 7,976,942 5,482,866
04FO3. Commission on Reinsurance Ceded and Administrative fees
from Illinois HealthCare Ins. Co......................................................... 2,029,438 680,000
04F98. Summary of remaining write-ins for Line 4F from overflow page............................
---------- ----------
04F99. TOTALS (Lines 04FOl through 04FO3 plus 04F98) (Line 4F above)............................ 10,006,380 6,165,106
---------- ----------
12F01. Decrease in Drafts Issued and Outstanding................................................ 930
12FO2. Surrender Benefits and Refunds .......................................................... 2,346,535 2,827,161
12FO3. Merger adjustment American Union Financial Co ........................................... 225,094
12F98. Summary of remaining write-ins for Line 12F from overflow page...........................
---------- ----------
12F99. TOTALS (Lines 12FOl through 12FO3 plus 12F98) (Line 12F above)........................... 2,571,629 2,828,091
=========== ==========
</TABLE>
14
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year,
1998 figures have been restated, where appropriate, for consistency when
comparing to 1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
EXHIBITS OF PREMIUMS AND LOSSES
(Statutory Page 14 Data)
Document Code: 430
NAIC Group Code 0193 NAIC Company Code 25828
DIRECT BUSINESS IN THE STATE OF Illinois DURING THE YEAR
<TABLE>
<CAPTION>
Gross Premiums,
including Policy and 3 4 5 6
Membership Fees, Less Return
Premiums and Premiums on Policies
Not Taken Dividends Paid
--------------------------------- or Credited to Direct Direct
1 2 Policyholders Unearned Losses Paid Direct
Direct Premiums Direct Premiums on Direct Premium (deducting Losses
Line of Business Written Earned Business Reserves salvage) incurred
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Fire ........................................... (13) 301 1,316 249
2.1 Allied lines ................................... (2) 53 220 131
2.2 Multiple peril crop.............................
2.3 Federal Flood...................................
3. Farmowners multiple peril ......................
4. Homeowners multiple peril ...................... (18) 557 1,259 (153)
5.1 Commercial multiple peril
(non-liability portion).........................
5.2 Commercial multiple peril (liability portion)...
6. Mortgage guaranty ..............................
8. Ocean marine ...................................
9. Inland marine ..................................
10. Financial guaranty .............................
11. Medical malpractice ............................
12. Earthquake .....................................
13. Group accident and health ......................
14. Credit A&H (group and individual)...............
15.1 Collectively renewable A&H......................
15.2 Non-cancellabe A&H..............................
15.3 Guaranteed renewable A&H........................
15.4 Non-renewable for stated reason only............
15.5 Other accident only.............................
15.6 All other A&H................................... 1,819 1,819
15.7 Federal employees health benefits
program premium.................................
16. Workers' compensation ..........................
17. Other liability.................................
18. Products liability..............................
19.1 Private passenger auto no-fault (personal
injury protection) .............................
19.2 Other private passenger auto liability ......... 10,425 10,194 2,638 5,117 5,117
19.3 Commercial auto no-fault (personal injury
protection).....................................
19.4 Other commercial auto liability ................
21.1 Private passenger auto physical damage ......... 11,755 11,450 2,974 4,662 5,662
22. Aircraft (all perils) ..........................
23. Fidelity .......................................
24. Surety .........................................
26. Burglary and theft .............................
27. Boiler and machinery ...........................
28. Credit .........................................
31. Aggregate write-ins for other lines
of business ....................................
---------------------------------------------------------------------------
32. TOTALS ..................................... 23,966 24,374 5,612 12,574 11,006
==================================================================================================================================
DETAILS OF WRITE-INS
----------------------------------------------------------------------------------------------------------------------------------
3101 ..............................................
3102 ..............................................
3103 ..............................................
3198. Summary of remaining write-ins for Line 31
from overflow page ..........................
---------------------------------------------------------------------------
3199. TOTALS (Lines 3101 through 3103 + 3198)
(Line 31 above) .............................
==================================================================================================================================
(a) Finance and service charges not included in
Lines 1 to 32 $................................
<CAPTION>
Direct Direct Direct
Defense Defense Defense
and Cost and Cost and Cost
Direct Containment Containment Containment Commissions Taxes,
Losses Expense Expense Expense and Brokerage Licenses
Unpaid Paid Incurred Unpaid Expenses and Fees
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Fire ........................................... 186 57
2.1 Allied lines ................................... 26
2.2 Multiple peril crop.............................
2.3 Federal Flood...................................
3. Farmowners multiple peril ......................
4. Homeowners multiple peril ...................... 1,680 384
5.1 Commercial multiple peril
(non-liability portion).........................
5.2 Commercial multiple peril (liability portion)...
6. Mortgage guaranty .............................. 5,000
8. Ocean marine ...................................
9. Inland marine ..................................
10. Financial guaranty .............................
11. Medical malpractice ............................
12. Earthquake .....................................
13. Group accident and health ......................
14. Credit A&H (group and individual)...............
15.1 Collectively renewable A&H......................
15.2 Non-cancellabe A&H..............................
15.3 Guaranteed renewable A&H........................
15.4 Non-renewable for stated reason only............
15.5 Other accident only.............................
15.6 All other A&H...................................
15.7 Federal employees health benefits
program premium................................. 433
16. Workers' compensation ..........................
17. Other liability.................................
18. Products liability..............................
19.1 Private passenger auto no-fault (personal
injury protection) .............................
19.2 Other private passenger auto liability ......... 1,000 (3,000) 1,000 1,000 500
19.3 Commercial auto no-fault (personal injury
protection).....................................
19.4 Other commercial auto liability ................
21.1 Private passenger auto physical damage ......... 1,000 1,256 1,000 1,000 600
22. Aircraft (all perils) ..........................
23. Fidelity .......................................
24. Surety .........................................
26. Burglary and theft .............................
27. Boiler and machinery ...........................
28. Credit .........................................
31. Aggregate write-ins for other lines
of business ....................................
-----------------------------------------------------------------
32. TOTALS ..................................... 3,866 3,723 2,000 2,000 433 1,100
========================================================================================================================
DETAILS OF WRITE-INS
------------------------------------------------------------------------------------------------------------------------
3101 ..............................................
3102 ..............................................
3103 ..............................................
3198. Summary of remaining write-ins for Line 31
from overflow page ..........................
-----------------------------------------------------------------
3199. TOTALS (Lines 3101 through 3103 + 3198)
(Line 31 above) .............................
========================================================================================================================
(a) Finance and service charges not included in
Lines 1 to 32 $................................
</TABLE>
15
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year, 1998
figures have been restated, where appropriate, for consistency when comparing to
1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
GENERAL INTERROGATORIES
<TABLE>
<CAPTION>
<S> <C>
1. (a) Does the company issue both participating and non-participating policies? Yes[ ] No[X]
(b) If yes, state the amount of calendar year net premiums written on:
(i) Participating policies: $
(ii) Non-participating policies: $
2. For Mutual Companies and Reciprocal Exchanges Only:
(a) Does company issue assessable policies? Yes[ ] No[X]
(b) Does company issue non-assessable policies? Yes[ ] No[X]
(c) If assessable policies are issued, what is the extent of the
contingent liability of the policyholders?
(d) Total amount of assessments laid or ordered to be laid during the year on
deposit notes or contingent premiums? $
3. For Reciprocal Exchanges Only:
(a) Does the Exchange appoint local agents? Yes[ ] No[X]
(b) If yes, is the commission paid:
(i) out of Attorney's-in-Fact compensation? Yes[ ] No[X] N/A[ ]
(ii) as a direct expense of the Exchange? Yes[ ] No[X] N/A[ ]
(c) What expenses of the Exchange are not paid out of the compensation of the Attorney-in-Fact?
(d) Has any Attorney-in-Fact compensation, contingent on fulfillment of
certain conditions, been deferred? Yes[ ] No[X]
(e) If yes, give full information
<CAPTION>
4. CAPITAL STOCK OF THIS COMPANY
1 2 3 4 5 6 7
Number of Shares Number of Shares Par Value Redemption Price Is Dividend Rate Are Dividends
Class Authorized Outstanding Per Share if Callable Limited? Cumulative?
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Preferred 102,000 102,000 50.00 Yes[ ] No[X] Yes[ ] No[X]
Common X X X XXX XXX XXX XXX
<CAPTION>
<S> <C>
5. (a) Does the company own any securities of a real estate holding company or otherwise
hold real estate indirectly? Yes[] No[X]
(b) If yes,
(i) explain
(ii) Name of real estate holding company
(iii) Number of parcels involved?
(iv) Total book value $
6. (a) Is the company a member of an Insurance Holding Company System consisting of two or more
affiliated persons, one or more of which is an insurer? Yes[X] No[ ]
(b) If yes, did the company register and file with its domiciliary state Insurance Commissioner,
Director, or Superintendent, or with such regulatory official of the State of domicile of the
principal insurer in the Holding Company System, a registration statement providing
disclosure substantially similar to the standards adopted by the National Association of
Insurance Commissioners in its Model Holding Company System Regulatory Act and model
regulations pertaining thereto, or is the company subject to standards and disclosure
requirements substantially similar to those required by such Act and regulations? Yes[X] No[ ] N/A[ ]
(c) State regulating
7. (a) Does any foreign (non-United States) person or entity directly or indirectly control
10% or more of the company? Yes[ ] No[X]
(b) If yes,
(i) state the percentage of foreign control:
8. (a) Total amount loaned during the year:
(i) to directors or other officers $ 19,109,987
(ii) to stockholders not officers $
(b) Total amount of loans outstanding at end of year:
(i) to directors or other officers $ 19,109,987.00
(ii) to stockholders not officers $
9. (a) Did any person while an officer, director or trustee of the company receive directly
or indirectly, during the period covered by this statement, any commission on the business
transactions of the company? Yes[ ] No[X]
(b) Did any person while an officer, director, trustee or employee receive directly
or indirectly, during the period covered by this statement, any compensation in addition
to their regular compensation on account of the reinsurance transactions of the company? Yes[ ] No[X]
(c) Has the company an established procedure for disclosure to its board of directors or
trustees of any material interest or affiliation on the part of its officers, directors,
trustees, or responsible employees which is in or is likely to conflict with the official
duties of such person? Yes[X] No[ ]
(d) Except for retirement plans generally applicable to its staff employees and agents and
contracts with its agents for the payment of commissions, has the company any agreement
with a person whereby it agrees that for any service rendered or to be rendered,
they shall receive directly or indirectly any salary, compensation or emolument that
will extend beyond a period of 12 months from the date of the agreement? Yes[ ] No[X]
10. What amount of installment notes is owed and now held by the company? $
11. (a) Have any of these notes been hypothecated, sold or used in any manner as security for
money loaned within the past year? Yes[ ] No[X]
(b) If yes, what amount? $
12. (a) Largest net aggregate amount insured in any one risk (excluding workers' compensation): $
(b) Does any reinsurance contract considered in the calculation of this amount include an
aggregate limit of recovery without also including a reinstatement provision? Yes[ ] No[X]
(c) State the number of reinsurance contracts (excluding individual facultative
risk certificates, but including facultative programs, automatic facilities
or facultative obligatory contracts) considered in the calculation of this amount.
</TABLE>
16
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year, 1998
figures have been restated, where appropriate, for consistency when comparing to
1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
GENERAL INTERROGATORIES (Continued)
<TABLE>
<CAPTION>
<S> <C>
13. (a) What provision has this company made to protect itself from an excessive loss in the
event of a catastrophe under a workers' compensation contract issued without limit of loss?
(b) Describe the method used to estimate this company's probable maximum insurance loss, and
identify the types of insured exposures comprising that probable maximum loss, the locations
of concentrations of those exposures and the external resources (such as consulting
firms or computer software models), if any, used in the estimation process. What provision
has this company made (such as a catastrophic reinsurance program) to protect itself from an
excessive loss arising from the types and concentrations of insured exposures comprising its
probable maximum property insurance loss?
(c) Does the company carry catastrophe reinsurance protection, with provision for at least one
reinstatement, in an amount sufficient to cover its estimated probable maximum loss attributable
to a single loss event or occurrence? Yes[ ] No[X]
(d) If no, describe any arrangements or mechanisms employed by the company to supplement its
catastrophe reinsurance program or to hedge its exposure to unreinsured catastrophic loss
14. (a) Has this company guaranteed any financed premium accounts? Yes[ ] No[X]
(b) If yes, give full information
15. (a) Has this company reinsured any risk with any other company under a quota share reinsurance
contract which includes a provision which would limit the reinsurer's losses below the stated
quota share percentage (e.g., a deductible, a loss ratio corridor, a loss ratio cap, an
aggregate limit or any similar provision)? Yes[ ] No[X]
(b) If yes, indicate the number of reinsurance contracts containing such provisions:
16. (a) Has this company reinsured any risk with any other company and agreed to release such
company from liability, in whole or in part, from any loss that may occur on the risk,
or portion thereof, reinsured? Yes[ ] No[X]
(b) If yes, give full information
17. If the company has assumed risks from another company, there should be charged on
account of such reinsurances a reserve equal to that which the original company would
have been required to charge had it retained the risks. Has this been done? Yes[ ] No[ ] N/A[X]
18. (a) Has this company guaranteed policies issued by any other company and now in force? Yes[ ] No[X]
(b) If yes, give full information
19. (a) Were all stocks, bonds and other securities owned December 31 of current year,
over which the company has exclusive control in the actual possession of the company on
said date, except as shown by the Schedule E - Part 2 - Special Deposits? Yes[ ] No[X]
(b) If no, give full and complete information relating thereto:
Held at Commerce Bank - Bloomington, Illinois - Trust account
20. (a) Were any of the stocks, bonds or other assets of the company owned at December 31
of the current year not exclusively under the control of the company, except as shown on
the Schedule E - Part 2 - Special Deposits; or has the company sold or transferred any
assets subject to a put option contract that is currently in force? Yes[X] No[ ]
(Exclude securities subject to Interrogatory 21.)
(b) If yes, state the amount thereof at December 31 of the current year:
(i) loaned to others $
(ii) subject to repurchase agreements $
(iii) subject to reverse repurchase agreements $
(iv) subject to dollar repurchase agreements $
(v) subject to reverse dollar repurchase agreements $
(vi) pledged as collateral $ 28,371,100
(vii) placed under option agreements $
(viii) letter stock or other securities restricted as to sale $
(ix) other $
(c) For each category above, if any of these assets are held by others, identify by whom held.
i)
(ii)
(iii)
(iv)
(v)
(vi) Commerce Bank - Bloomington, Illinois
(vii)
(viii)
(ix)
(d) For categories (b)(i) and (iii) above, and for any other securities that were made
available for use by another person during the year covered by this statement,
attach a schedule as shown in the instructions to the annual statement.
(e) For category (b)(vii) above, do any of the option agreements involve
asset transfers with put options? Yes[ ] No[X] N/A[ ]
If yes, disclose in the Notes to Financial Statements the information specified in the
instructions to the annual statement.
21. Were any of the assets reported in this statement subject to a contractual obligation to
transfer to another party without the liability for such obligation being reported
in this statement? Yes[ ] No[X]
If yes, state the amount thereof at December 31 of current year:
(i) Rented from others $
(ii) Borrowed from others $
(iii) Leased from others $
(iv) Other $
Disclose in Notes to Financial Statements the nature of each of these obligations.
22. (a) State as of what date the latest financial examination of the company
was made or is being made.
(b) State the as of date of the latest financial examination report that is available 12/31/1995
from either the state of domicile or the company. This date should be the date of the
examined balance sheet and not the date the report was completed or released. 12/31/1995
(c) State as of what date the latest financial examination report became available to other
states or the public from either the state of domicile or the company. This is the release
date or completion date of the examination report and not the date of the examination
(balance sheet date). 05/08/1998
(d) By what departments or department? Illinois Insurance Department
23. (a) Has any change been made during the year of this statement in the charter, by-laws,
articles of incorporation, or deed of settlement of the company? Yes[ ] No[X]
(b) If yes, date of change:
If not previously filed, furnish herewith a certified copy of the instrument as amended.
24. (a) Has any direct new business been solicited or written in any state where the
company was not licensed? Yes[ ] No[X]
(b) If yes, explain
</TABLE>
17
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/1999. The 1999 results are stated on a merged basis. The prior year,
1998 figures have been restated, where appropriate, for consistency when
comparing to 1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
GENERAL INTERROGATORIES (Continued)
<TABLE>
<CAPTION>
<S> <C>
25. Is the purchase or sale of all investments of the company passed upon either by the
board of directors or a subordinate committee thereof? Yes[X] No[ ]
26. Does the company keep a complete permanent record of the proceedings of its board of directors
and all subordinate committees thereof? Yes[X] No[ ]
27. Have the instructions for completing the blank required by this department been
followed in every detail? Yes[ ] No[X]
(ONLY UNITED STATES BRANCHES OF FOREIGN COMPANIES NEED ANSWER INTERROGATORIES 28 AND 29)
28. What changes have been made during the year in the United States manager or
the United States trustees of the company?
29. Does this statement contain all business transacted for the company through its United States
branch, on risks wherever located?
30. (a) During the period covered by this statement, did any agent, general agent, broker, sales
representative, non-affiliated sales/service organization or any combination thereof under
common control (other than salaried employees of the company) receive credit or
commissions for or control a substantial part (more than 20 percent of any major line of
business measured on direct premiums) of:
(i) sales of new business? Yes[ ] No[X]
(ii) renewals? Yes[ ] No[X]
(b) During the period covered by this statement, did any sales/service organization owned in
whole or in part by the company or an affiliate, receive credit or commissions for or control
a substantial pan (more than 20 percent of any major line of business measured on direct
premiums) of:
(i) sales of new business? Yes[ ] No[X]
(ii) renewals? Yes[ ] No[X]
31. (a) If the company recorded accrued retrospective premiums on insurance contracts on
Line 10.3 of the assets schedule, Page 2, state the amount of corresponding liabilities
recorded for:
(i) unpaid losses: $
(ii) unpaid underwriting expenses (including loss adjustment expenses): $
(b) Of the amount on Line 10.3 of the assets schedule, Page 2, state the amount which is
secured by letters of credit, collateral and other funds. $
(c) If the company underwrites commercial insurance risks, such as workers' compensation,
are premium or promissory notes accepted from its insureds covering unpaid premiums
and/or unpaid losses? Yes[ ] No[X] N/A[ ]
(d) If yes, provide the range of interest rates charged under such notes during the
period covered by this statement:
(i) From: %
(ii) To: %
(e) Are letters of credit or collateral and other funds received from insureds being
utilized by the company to secure premium or promissory notes taken by the company,
or to secure any of the company's reported direct unpaid loss reserves, including unpaid
losses under deductible features of commercial policies? Yes[ ] No[X]
(f) If yes, state the amount thereof at December 31 of the current year:
(i) Letters of credit: $
(ii) Collateral and other funds: $
32. What interest, direct or indirect, has the company in the capital stock of
any other insurance company? See Schedule D
33. (a) Does the company have any direct Medicare Supplement Insurance in force? Yes[ ] No[X]
(b) If yes, indicate premium earned on U. S. business only. $
(c) What portion of Item (b) is not reported on the Medicare Supplement
Insurance Experience Exhibit? $
Reason for excluding
(d) Indicate amount of earned premium attributable to Canadian and/or Other Alien
not included in Item (b) above. $
(e) Indicate total incurred claims on all Medicare Supplement Insurance. $
34. (a) Was the company's prior year's annual statement amended? Yes[ ] No[X]
(b) If yes, furnish the following information regarding the last amendment to the prior year's
annual statement filed with the company's state of domicile:
(i) Amendment number
(ii) Date of amendment / /
35. What is the name, address and affiliation (officer/employee of the company or
actuary/consultant associated with a(n) actuarial consulting firm)
of the individual providing the statement of actuarial opinion?
36. What is the name and address of the independent certified public accountant or accounting
firm retained to conduct the annual audit?
</TABLE>
18
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year, 1998
figures have been restated, where appropriate, for consistency when comparing to
1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
GENERAL INTERROGATORIES (Continued)
<TABLE>
<CAPTION>
<S> <C>
37. (a) Has the company been a party to a merger or consolidation during the period
covered by this statement? Yes[X] No[ ]
(b) If yes, provide name of company, NAIC Company Code, and state of domicile
(use 2 letter state abbreviation) for any company that has ceased to exist
as a result of the merger or consolidation.
NAIC
Company State of
Name of Company Code Domicile
-------------------------------------------------------------------------------------
American Union Life Insurance Company 60887 IL
38. (a) Has this company had any Certificates of Authority, licenses or registrations
(including corporate registration, if applicable) suspended or revoked by any
governmental entity during the reporting period? (You need not report an action,
either formal or informal, if a confidentiality clause is part of the agreement.) Yes[ ] No[X]
(b) If yes, give full information
39. (a) Does this statement include payments for assessments as described in the Annual Statement
Instructions other than guaranty fund or guaranty association assessments? Yes[ ] No[X]
(b) If answer is yes,
(i) amount paid as losses or risk adjustment: $
(ii) amount paid as expenses: $
(iii) other amounts paid: $10,210
40. (a) Amount of payments to Trade Associations, Service Organizations and Statistical or
Rating Bureaus, if any? List the name of the organization and the amount paid if any
such payment represented 25% or more of the total payments to Trade Associations, Service
Organizations and Statistical or Rating Bureaus during the period covered by this statement.
Name of Organization Amount Paid
-----------------------------------------------------------------------------------
ISO 7,284
41. (a) Amount of payments for legal expenses, if any? $52,256
(b) List the name of the firm and the amount paid if any such payment represented 25% or more
of the total payments for legal expenses during the period covered by this statement.
Name of Firm Amount Paid
----------------------------------------------------------------------------------
Davis & Campbell LLC 32,276
42. (a) Amount of payments for expenditures in connection with matters before legislative bodies,
officers or departments of government, if any? $
(b) List the name of the firm and the amount paid if any such payment represented 25% or more
of the total payment expenditures in connection with matters before legislative bodies,
officers or departments of government during the period covered by this statement.
Name of Firm Amount Paid
----------------------------------------------------------------------------------
</TABLE>
19
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year, 1998
figures have been restated, where appropriate, for consistency when comparing to
1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
Notes to Financial Statement
1. Basis of Presentation.
This Statement was prepared in conformity with the NAIC Annual
Statement instructions and accounting practices and procedures manuals.
2. a. Asset values are generally stated as follows:
Bonds: Amortized Cost using the Scientific method.
Common Stocks: Market Value, adjusted for State of Illinois
Statutory limitations.
b. Depreciation using Internal Revenue Service Guidelines.
3. No derivative instruments.
4. Federal Income Tax Allocation
a. 1. The Company's Federal Income Tax Return is combined with
the following entity: American Union Financial
Corporation
2. The method of allocation between the companies is subject
to written agreement approved by the Board of Directors.
Allocation is based upon separate return calculations
with current credit for net losses. Intercompany tax
balances are settled after the filing of the combined
return.
b. The amount of incurred available for offset against taxable
losses in the future is $0.
5. a. American Union Insurance Company is owned as follows:
50% Gregory Mark Shepard; 50% Tracy Morgan Shepard.
b. See Schedule Y
c. None
d. None
e. None
f. None
6. The Company sponsors a 401K plan effective in 1988.
7. Capital and Surplus and Shareholders Dividend Restrictions
a. No restrictions other than statutory.
b. No preferred stock.
c. No restrictions on unassigned surplus.
d. No stock held for special purposes.
e. Not applicable.
f. None.
g. None.
8. No instructions
9. The Company has a loan outstanding of $ 10,000,000 payable to Commerce
Bank, collateralized by marketable securities. Loan provisions require a
maximum 2 for 1 collateral position. The Company also has a loan
outstanding of $1,600,000 due to Myra Shepard due 3/31/2000.
10. The Company has a contingent liability regarding the sale of an
affiliate Union Automobile Indemnity Company to Unitrin Corporation. If
Loss Reserves and Loss Expense Reserves develop adversely over a pre-
determined threshold, American Union will be liable for a portion of the
deficiencies. As of 12/31/99, it does not seem to be probable that any
significant liability will be realized.
11. There are no material leases.
12. No subscriber Savings Accounts.
20
American Union Life insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year, 1998
figures have been restated, where appropriate, forconsistency when comparing to
1999.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
Notes to Financial Statement
13. The Company has no amounts due from Reinsurers which exceed 3% of the
Policyholders surplus.
14. There is no reinsurance recoverable in dispute.
15. No return commission due.
16. The Company has no purchased annuities under which the company is owner
and payee.
17. The Company did not write off any uncollectible reinsurance during the
year.
18. There was no commutation of ceded reinsurance during the year.
19. No retroactive reinsurance contracts that will generate special surplus
transactions.
20. No Intercompany pooling arrangements.
21. No accrued retrospective premiums.
22. The Company does not discount liabilities for unpaid losses or unpaid
loss adjustment expenses.
23. The Company has no Financial Guaranty Exposures.
24. The Company has no asset transfers with Put options.
25. There are no Direct Premiums written by Managing Agents/Third Party
Administrators.
26. There has been no gain or loss to the insurer from Uninsured A & H Plans
and the Uninsured portion of Partially Insured Plans.
27. No Asbestos/Environmental Reserves.
28. No material events subsequent.
29. The Company elected to use rounding in reporting items in the Statement.
20.1
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year, 1998
figures have been restated, where appropriate, for consistency when comparing to
1999
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
FIVE - YEAR HISTORICAL DATA
<TABLE>
<CAPTION>
Show amounts in whole dollars only, no cents; show percentages to one decimal place, i.e., 17.6
1 2 3 4 5
1999 1998 1997 1996 1995
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gross Premiums Written
(Page 9, Part 2B, Columns I and 2)
1. Liability Lines (Lines 11.1, 11.2, 16, 17.1,
17.2, 18.1, 18.2, 19.1, 19.2, & 19.3, 19.4) 273,263 278,680 290,579 16,624,414 17,867,171
2. Property Lines (Lines 1, 2, 9, 12, 21, & 26) 254,360 264,874 271,691 11,753,738 11,776,105
3. Property and Liability Combined Lines
(Lines 3, 4, 5, 8, 22 & 27) . (17) 4,352 17,479 8,092,351 7,833,375
4A. All Other Lines (Lines 6, 10, 13, 14, 15,
23, 24, 28, 29, & 31) 4,265,052
4B. Nonproportional Reinsurance Lines
(Lines 30A, 30B, & 30C)
------------------------------------------------------------------------
5. TOTAL (Line 32) 4,792,658 547,906 579,749 36,470,503 37,476,651
Net Premiums Written
(Page 9, Part 2B, Column 4)
6. Liability Lines (Lines 11.1, 11.2, 16,
17.1, 17.2,18.1, 18.2, 19.1, 19.2 &
19.3, 19.4) 273,263 278,680 290,579 16,264,414 17,537,342
7. Property Lines (Lines 1, 2, 9, 12, 21 & 26) 254,360 264,874 271,691 11,495,895 11,631,464
8. Property and Liability Combined Lines
(Lines 3, 4. 5. 8, 22 & 27) (17) 4,352 17,479 7,609,459 8,552,487
9A. All Other Lines (Lines 6, 10, 13, 14, 15,
23, 24, 28, 29 & 31) 4,265,052
9B. Non-proportional Reinsurance Lines
(Lines 30A, 30B & 30C)
------------------------------------------------------------------------
10. TOTAL (Line 32) 4,792,658 547,906 579,749 35,369,768 37,721,293
Statement of Income (Page 4)
11. Net Underwriting Gain or (Loss) (Line 7) (1,609,326) (1,207,903) (157,959) (2,682,079) (1,882,550)
12. Net Investment Gain or (Loss) (Line 9A) 24,986,061 9,594,342 3,531,213 8,486,054 22,346,554
13. Total Other Income (Line 13) 2,145,312 569,212 2,248 187,595 142,751
14. Dividends to Policyholders (Line 14A)
15. Federal and Foreign Income Taxes Incurred (Line 15) 6,473,063 2,301,802 166,849 191,713 432,491
------------------------------------------------------------------------
16. Net Income (Line 16) 19,048,984 6,653,849 3,208,653 5,799,857 20,174,264
Balance Sheet Lines (Pages 2 and 3)
17. TOTAL Admitted Assets(Page 2, Line 22, Column 4) 38,900,180 21,059,633 29,250,765 65,001,546 71,424,387
18. Agents' Balances or Uncollected Premiums
(Page 2, Column 4)
18.1 In Course of Collection (Line 10.1) 14,478 (66,657) 19,200 1,695,636 1,887,701
18.2 Deferred and Not Yet Due (Line 10.2) 202,491 181,671
18.3 Accrued Retrospective Premiums (Line 10.3)
19. TOTAL Liabilities (Page 3, Line 23) 12,935,200 10,392,208 1,882,793 35,236,761 40,408,401
20. Losses (Page 3, Lines 1 and 1 A) 260,249 1,316,207 91,066 14,481,892 16,222,132
21. Loss Adjustment Expenses (Page 3, Line 2) 50,144 35,000 35,000 3,986,818 3,935,727
22. Unearned premiums (Page 3, Line 9) 148,633 864,347 139,976 11,337,552 11,434,397
23. Capital Paid Up (Page 3, Lines 25A & 25B) 5,100,000 10,200,000 10,200,000 10,200,000 10,200,000
24. Surplus as Regards Policyholders (Page 3, Line 27) 25,964,980 10,667,425 27,367,972 29,764,785 31,015,986
Risk-Based Capital Analysis
25. TOTAL Adjusted Capital 25,964,980 5,672,459 27,367,972 29,764,785 31,015,986
26. Authorized Control Level Risk-Based Capital 4,535,838 1,921,593 16,443,819 15,147,479 8,184,620
Percentage Distribution of Cash and Invested Assets
(Page 2, Column 4)
(Item divided by Page 2, Line 9, Column 4) x 100.0
27. Bonds (Line 1) 8.3 15.3 14.0 7.6 53.2
28. Stocks (Lines 2.1 & 2.2) 44.9 83.8 85.4 37.4 46.5
29. Mortgage Loans on Real Estate (Lines 3.1 and 3.2)
30, Real Estate (Lines 4.1 & 4.2)
31. Cash and Short-Term Investments (Line 5) 2.7 0.9 0.6 55.0 0.3
32. Other Invested Assets (Line 6) - 43.9
32A. Receivable for Securities (Line 7) 0.1
33. Aggregate Write-ins for Invested Assets (Line 8)
------------------------------------------------------------------------
34. Cash and Invested Assets (Line 9) 100.0 100.0 100.0 100.0 100.0
Investments in Parent, Subsidiaries and Affiliates
35. Affiliated Bonds,
(Schedule D, Summary, Line 25, Column 5)
36. Affiliated Preferred Stocks
(Schedule D, Summary, Line 39, Column 5)
37. Affiliated Common Stocks
(Schedule D, Summary, Line 53, Column 2) 9,291,858 10,958,964 13,792,590
38. Affiliated Short-Term Investments
(subtotals included in Schedule DA,
Part 1, Column 13)
38A. Affiliated Mortgage Loans on Real Estate
38B. All Other Affiliated
------------------------------------------------------------------------
39. TOTAL of above Lines 35, 36, 37, 38, 38A, & 38B 9,291,858 10,958,964 13,792,590
40. Percentage of Investments in Parent, Subsidiaries
and Affiliates to Surplus as Regards Policyholders
(Line 39 above divided by Page 3,
Column 1, Line 27 x 100.0) 34.0 36.8 44.5
========================================================================
</TABLE>
21
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year
figures on this page have not been restated on the merged basis.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1999 OF THE AMERICAN UNION INSURANCE COMPANY
FIVE - YEAR HISTORICAL DATA (Continued)
<TABLE>
<CAPTION>
1 2 3 4 5
1999 1998 1997 1996 1995
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Capital and Surplus Accounts (Page 4)
41. Net Unrealized Capital Gains or (Losses) (Line 19) (4,206,456) (10,781,053) (3,579,961) (3,166,859) 13,216,066
42. Dividends to Stockholders (Cash) (Line 27) (15,400,000) (2,120,000) (3,280,000) (1,300,000)
43. Change in Surplus as Regards Policyholders
for the Year (Line 31) 15,297,557 (18,899,675) (2,396,813) (1,251,201) 618,341
Gross Losses Paid
(Page 10, Part 3, Columns 1 and 2)
44. Liability Lines (Lines 11.1, 11.2, 16, 17.1,
17.2, 18.1, 18.2, 19.1, 19.2 & 19.3, 19.4) 144,898 100,474 287,245 11,890,615 11,246,843
45. Property Lines (Lines 1, 2, 9, 12, 21 & 26) 101,857 161,498 150,145 8,696,018 7,453,503
46. Property and Liability Combined Lines (Lines 3, 4,
5, 8, 22, & 27) 1,259 9,474 12,366 8,352,022 5,135,447
47A. All Other Lines (Lines 6, 10, 13, 14, 15, 23,
24, 28, 29 & 31) 4,227,394
47B. Nonproportional Reinsurance Lines
(Lines 30A, 30B & 30C)
------------------------------------------------------------------------
48. TOTAL (Line 32) 4,475,408 271,446 449,756 28,938,655 23,835,793
Net Losses Paid
(Page 10, Part 3, Column 4)
49. Liability Lines (Lines 11.1, 11.2, 16,
17.1, 17.2, 18.1, 18.2, 19.1,
19.2 & 19.3, 19.4) 144,898 100,474 287,245 11,842,858 11,110,045
50. Property Lines (Lines 1, 2, 9, 12, 21 & 26) 101,857 161,498 150,145 8,343,035 7,452,008
51. Property and Liability Combined Lines
(Lines 3, 4, 5, 8, 22, & 27) 1,259 9,474 12,366 6,513,695 4,201,301
52A. All Other Lines (Lines 6, 10, 13, 14, 15,
23, 24, 28, 29, & 31) 4,227,394
52B. Nonproportional Reinsurance Lines
(Lines 30A, 30B & 30C)
------------------------------------------------------------------------
53. TOTAL (Line 32) 4,475,408 271,446 449,756 26,699,588 22,763,354
Operating Percentages (Page 4)
(Item divided by Page 4, Line 1) x 100.0
54. Premiums Earned (Line 1) 100.0 100.0 100.0 100.0 100.0
55, Losses Incurred (Line 2) 62.1 63.0 42.9 70.4 65.5
56. Loss Expenses Incurred (Line 3) 9.5 0.5 5.6 10.9 9.8
57. Other Underwriting Expenses Incurred (Line 4) 57.6 43.6 78.7 26.3 29.8
58. Net Underwriting Gain or (Loss) (Line 7) (29.2) (7.1) (27.2) (7.6) (5.2)
Other Percentages
59. Other Underwriting Expenses to Net
Premiums Written (Page 4, Lines 4 + 5 - 13
divided by Page 9, Part 213, Column 4,
Line 32 x 100.0) 21.5 109.3 78.9 26.3 28.9
60. Losses and Loss Expenses Incurred to
Premiums Earned (Page 4, Lines 2 + 3
divided by Page 4, Line 1 x 100.0) 71.6 63.5 48.5 81.3 75.3
61. Net Premiums Written to Policyholders'
Surplus (Page 9 Part 213, Column 4,
Line 32 divided by Page 3, Line 27,
Column 1 x 100.0) 18.5 9.7 2.0 1.2 1.2
One Year Loss Development (000 omitted)
62. Development in Estimated Losses and Loss
Expenses Incurred Prior to Current Year
(Schedule P, Part 2 - Summary, Line 12,
Column 11) 154 4 (43) (1,687) (2,106)
63. Percent of Development of Losses and Loss
Expenses Incurred to Policyholders'
Surplus of Prior Year End (Line 62 above
divided by Page 4, Line 17, Column 1 x 100.0) 1.4 0.0 (0.1) (5.4) (6.9)
Two Year Loss Development (000 omitted)
64. Development in Estimated Losses and Loss
Expenses Incurred 2 years before the
current year and prior year
(Schedule P, Part 2 - Summary, Line 12,
Column 12) 20 (34) (81) (2,794) (3,417)
65. Percent of Development of Losses and Loss
Expenses Incurred to Reported Policyholders'
Surplus of Second Prior Year End (Line 64
above divided by Page 4, Line 17,
Column 2 x 100.0) 0.1 (0.1) (0.3) (9.2) (4.3)
========================================================================
</TABLE>
22
American Union Life Insurance was merged with American Union Insurance Company
on 12/31/99. The 1999 results are stated on a merged basis. The prior year
figures on this page have not been restated on the merged basis
