SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-11238.
NYMAGIC, INC.
(Exact name of registrant as specified in its charter)
New York 13-3534162
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
330 Madison Avenue, New York, NY 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 551-0600
---------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Name of each exchange on which registered:
Common Stock, $1.00 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_ No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Rule 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of voting stock held by non-affiliates of the
registrant, as of March 1, 1998, was approximately $113,652,570.
The number of shares outstanding of each of the registrant's classes of common
stock, as of March 1, 1998, was 9,676,806 shares of common stock, $1.00 par
value.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's Proxy Statement for the 1998 Annual Meeting of
Shareholders are incorporated by reference in Part III.
1
<PAGE>
Part I
Item 1. Business.
General
NYMAGIC, INC., a New York corporation (the "Company" or "NYMAGIC"), is a
holding company which owns and operates the following insurance companies and
insurance underwriters and managers:
Insurance Companies:
New York Marine And General Insurance Company - ("New York Marine")
Gotham Insurance Company - ("Gotham")
The Company's insurance company subsidiaries, New York Marine and Gotham, each
maintain an A.M. Best insurance rating of A+.
Other:
Mutual Marine Office, Inc. - ("MMO")
Pacific Mutual Marine Office, Inc. - ("PMMO")
Mutual Marine Office of the Midwest, Inc. - ("Midwest")
MMO Underwriting Agency, Ltd.
MMO UK, Ltd.
MMO EU, Ltd.
all of which are collectively referred to hereinafter as the "Company."
NYMAGIC, through its subsidiaries, specializes in underwriting ocean
marine, inland marine, aviation and other liability insurance through insurance
pools managed by MMO, PMMO, and Midwest ("MMO and affiliates") since 1964. MMO
and affiliates were acquired by NYMAGIC in January 1991. In addition to managing
the insurance pools, NYMAGIC participates in the risks underwritten for the
pools through two insurance company subsidiaries, New York Marine and Gotham.
All premiums, losses and expenses are prorated among pool members in accordance
with their pool participation percentages. Effective January 1, 1994, the
Company increased to 81.47% its participation in the ocean marine, inland marine
and aviation business produced by the pools. Effective April 1, 1994, the
Company increased to 90.00% its participation in the inland marine business
produced by the pools and effective July 1, 1994, the Company increased to
90.00% its participation in the ocean marine and aviation business produced by
the pools and to 100% its participation in the other liability and inland marine
business produced by the pools. Effective January 1, 1997, the Company increased
to 100% its participation in the ocean marine and aviation business produced by
the pools. Substantially all of the Company's premiums for the last three years
have resulted from participation in the insurance pools managed by MMO and
affiliates.
On December 31, 1997, the Company acquired ownership of Highgate Managing
Agencies, Ltd. which subsequently changed its name to MMO Underwriting Agency,
Ltd. MMO Underwriting Agency Ltd. is a Lloyd's managing agency which will
commence underwriting in 1998 for the company's wholly owned subsidiary MMO UK,
Ltd. which is a Lloyd's corporate capital vehicle providing 100% of the capital
for Syndicate 1265.
The Company has approximately 115 employees of whom 19 are underwriters.
This report contains certain forward-looking statements concerning the
Company's operations, economic performance and financial condition, including,
in particular the likelihood of the Company's success in developing and
expanding its business. These statements are based upon a number of assumptions
and estimates which are inherently subject to significant uncertainties and
contingencies, many of which are beyond the control of the Company, and reflect
future business decisions which are subject to change. Some of these assumptions
inevitably will not materialize, and unanticipated events will occur which will
affect the Company's results.
2
<PAGE>
Such statements may include, but are not limited to, projections of premium
revenue, investment income, other revenue, losses, expenses, earnings, cash
flows, plans for future operations, common stockholders' equity, investments,
capital plans, dividends, plans relating to products or services of and
estimates concerning the effects of litigation or other disputes, as well as
assumptions of any of the foregoing and are generally expressed with words such
as "believes," "estimates", "expects," "anticipates," "plans," "projects,"
"forecasts," "goals", "could have," "may have" and similar expressions.
The Pools
MMO, located in New York, PMMO, located in San Francisco and Midwest,
located in Chicago (the "Manager" or the "Managers"), manage the insurance pools
in which the Company participates.
The Manager accepts, on behalf of the pools, insurance risks brought to the
pools by brokers and others. All premiums, losses and expenses are prorated
among the pool members in accordance with their percentage participations in the
pools. Pursuant to the pool management agreements, the pool members have agreed
not to accept ocean marine insurance (other than ocean marine reinsurance)
unless received through the Manager and have authorized the Manager to accept
risks on behalf of the pool members and to effect all transactions in connection
with such risks, including the issuance of policies and endorsements and the
adjustment of claims. As compensation for its services, the Manager receives a
fee of 5.5% of gross premiums written by the pools and a contingent commission
of 10% on net underwriting profits, subject to adjustment.
Inception to date underwriting results for various reinsurance treaties are
used to calculate reinsurance contingent commissions on an earned basis in the
period in which the related profit commission is billed. Adjustments to
commissions, resulting from revisions in coverage, retroactive or audit
adjustments, are recorded in the period when realized. Subject to review by the
reinsurers, the Managers determine the profitability of all contingent
commission agreements placed with various reinsurance companies.
New York Marine was substituted for another member of the pools in
existence in 1979, and Pennsylvania National Mutual Casualty Insurance Company
("Pennsylvania National") was admitted to each of the pools in 1981. Arkwright
Mutual Insurance Company ("Arkwright") increased its participation in the pools
effective December 31, 1985, by assuming the percentage participation of
Employers Mutual Casualty Company ("Employers") and Mutual Fire, Marine and
Inland Insurance Company ("Mutual Fire"), both of which withdrew from the pools
effective December 31, 1985. In addition, the Arkwright-Boston Insurance Company
transferred its entire interest in the pools to its affiliate, Arkwright,
effective December 31, 1985.
In the case of Employers and Arkwright-Boston Insurance Company, all loss
and unearned premium reserves as of December 31, 1985, were transferred to
Arkwright and any loss run-off related to such reserves are to be fully absorbed
by Arkwright. In the case of Mutual Fire, all loss and unearned premium reserves
incurred through policy year 1985 were assumed by all members of the pools in
proportion to their respective interests in the pools at the time such reserves
were incurred.
Mutual Fire was a member of the pools from 1964 through 1985, with a
participation percentage of 3.71% at the time of its withdrawal from the pools.
In 1986, Mutual Fire was placed under the supervision of the Pennsylvania
Department of Insurance and it has ceased to meet its obligations under the pool
agreements. Under the terms of the pool agreements, if any member is unable to
meet its obligations with respect to business written by the pools while it was
a member, the remaining pool members must assume their pro-rata share of the
defaulting member's obligations.
Effective December 31, 1990, Lumber Mutual Insurance Company ("Lumber")
ceased to participate in the pools and its 6.82% participation was assumed by
New York Marine as to policies incepting on or after January 1, 1991. In the
case of Lumber, all loss and unearned premium reserves incurred through policy
year 1990 were transferred to New York Marine. Effective December 31, 1991,
Pennsylvania National ceased to participate in the pools and its participation
was assumed by New York Marine as to policies incepting on or after January 1,
1992. In the case of Pennsylvania National, all loss and unearned premium
reserves incurred through policy year 1991 were transferred to New York Marine.
3
<PAGE>
Effective January 1, 1994, the Company increased to 81.47% its
participation in the ocean marine, inland marine and aviation business produced
by the pools. The Company's participation in the other liability business
produced by the pools remained at 91.47%.
Effective April 1, 1994, the Company increased to 90.00% its participation
in the inland marine business produced by the pools.
Effective July 1, 1994, the Company increased to 90.00% its participation
in the ocean marine and aviation business produced by the pools and to 100% its
participation in the other liability and inland marine business produced by the
pools.
The Company's increase in pool participations effective July 1, 1994,
followed the assumption of Utica Mutual Insurance Company's ("Utica Mutual")
pool share and Utica Mutual's withdrawal from the pools. In the case of Utica
Mutual, all loss reserves, including incurred but not reported ("IBNR") and
unearned premium reserves, incurred on policies effective prior to its
withdrawal from the pools, remain as obligations of Utica Mutual.
Effective January 1, 1997, the Company increased to 100% its participation
in the ocean marine and aviation business produced by the pools, following the
assumption of Arkwright's pool share and Arkwright's withdrawal from the the
pools. In the case of Arkwright Mutual, all loss reserves, including IBNR and
unearned premium reserves, incurred on policies effective prior to its
withdrawal from the pools, remain as obligations of Arkwright Mutual.
The Company is not aware of any uncertainties with respect to any possible
defaults by either Arkwright or Utica Mutual with respect to their pool
obligations which might impact liquidity or results of operations.
The pool managed by MMO, the largest when measured by premiums written, was
formed in 1964. The pools managed by PMMO and Midwest were formed in 1975 and
1980, respectively. Effective January 1, 1997, each pool is composed of the
following members:
Inland Marine,
Ocean Marine, Other Liability
Pool Member Aviation Pools Pools
- ----------- -------------- ---------------
New York Marine And General
Insurance Company 100.00% 100%
Assets and liabilities resulting from the insurance pools are allocated to
the members of the insurance pools based upon the pro-rata participation of each
member of each pool which is set forth in the management agreement entered into
by and between the pool participants and the Managers. The allocation of
premiums and losses is not subject to the Managers' discretion and the Managers
do not believe there exist any conflicts of interest in connection with this
aspect of the pools.
Investment Policy
The Company follows an investment policy which is reviewed quarterly and
revised periodically. For the years ended December 31, 1997 and 1996, the yield
on the Company's investment portfolio (computed on the basis of average monthly
cost of investment and statutory investment income) was 5.7% and 5.8%,
respectively. At December 31, 1997, the weighted average maturity of fixed
maturity investments was 6.3 years.
The investment policy for New York Marine as of December 31, 1997, was as
follows:
1. Liquid Funds - Minimum 7-1/2% of Investable Funds. In cash,
certificates of deposit, prime bankers acceptances, prime commercial
paper, tax-exempts rated AA/AA or MIG 2 or better, tax-exempts rated
AA by one service and unrated by the other, not to exceed $5,000,000
par value in any one institution; obligations of the U.S. Government
and its agencies due one year or less; tax-exempt notes with a split
A/AA or AA/A rating not to exceed $500,000 in any one institution.
4
<PAGE>
2. Bond Funds
A) Tax-exempt securities and obligations of private corporations rated A
or better by each service which provides a rating, not to exceed
$5,000,000 maturity value per issuing entity; maturities not to exceed
December 31 of the 20th year from the purchase date, to include:
1) Pollution - control bonds guaranteed by industrial corporations
rated A or better.
2) Pre-refunded bonds.
3) Housing issues sponsored by the U.S. Government and its agencies
secured by underlying mortgage securities with maturities not in
excess of 30 years and average maturities not in excess of 20
years.
B) Preferred stocks with sinking funds, rated A/A or better, limited to
$500,000 par value per issuer for new issues; to $500,000 purchase
price for outstanding issues.
C) Obligations of the U.S. Government and its agencies.
3. A) Equities (including convertible securities) - Not more than 25% of
policyholders' surplus, and investment in any one institution is not
to exceed five percent (5%) of policyholders' surplus at the time of
purchase as last reported to the New York State Insurance Department.
B) Subsidiaries - the Company's investments in subsidiary companies are
excluded from the requirements of the Company's Investment Program.
The investment policy of Gotham is similar to that of New York Marine
except that Gotham is limited to $2,000,000 maturity value for its bond
investments and $1,000,000 for short-term investments.
The investments of the Company's subsidiaries must also conform to the
requirements contained in the New York State Insurance Law and Regulations.
The Company's investments are monitored by the Finance Committee of the
Board of Directors. New York Marine's fixed income portfolio is managed by J.P.
Morgan Investment Management, Inc. ("JPMIM"). New York Marine's equity portfolio
is managed by JPMIM and, in part, by Sorema Asset Management. Gotham has its
fixed income portfolio managed by JPMIM and its equity portfolio managed by
Rorer Asset Management. See "Subsidiaries".
As of December 31, 1997, New York Marine's invested assets were invested as
follows:
Bonds Rated A or better $288,087
Bonds Rated below A -0-
Equities $ 45,879
As of December 31, 1997, Gotham's invested assets were invested as follows:
Bonds Rated A or better $ 73,163
Bonds Rated below A -0-
Equities $ 13,380
5
<PAGE>
Lines of Insurance
The Company writes ocean marine, inland marine, aircraft and non-marine
liability lines of insurance. Ocean marine insurance covers a broad range of
classes, including marine hull, primary and excess marine liabilities, drilling
rig, marine cargo, war risks and assumed reinsurance. Inland marine insurance
includes, among other things, differences in condition ("DIC"), excess property
packages, miscellaneous property insurance and assumed reinsurance. DIC
insurance covers those perils not included with a fire and extended coverage
policy, including burglary, collapse, flood, volcano and earthquake. In 1995, a
decision was made to reduce the Company's exposure to natural catastrophes
through the inland marine line. This resulted in a reduction in the gross and
net inland marine premiums written in subsequent years. Aircraft insurance
includes hull and engine insurance as well as liability insurance. Non-marine
liability insurance includes, among other things, umbrella (excess casualty)
insurance, and excess and surplus line risks written primarily through Gotham.
The following tables set forth the pools' gross and net written premiums.
Insurance premiums written on a calendar year basis may be attributable to
various policy years. Thus, some of the 1997 premium written may arise from
policies incepting in 1996 and prior when the Company had a different
participation in the pools. Therefore, the Company's gross and net written
premiums cannot be obtained by multiplying the amounts below by the Company's
percentage participation in each year. However, the tables below do reflect the
size and mix of business produced by the Managers for the years so indicated.
<TABLE>
<CAPTION>
Gross Premium Written by
Line of Business Year Ended December 31,
- ------------------------- ----------------------------------------------------------
1997 1996 1995
---- ---- ----
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Ocean marine .. $ 72,995 59% $ 87,519 56% $ 93,892 50%
Inland marine . 1,117 1% 1,651 1% 14,380 8%
Aircraft ...... 45,853 37% 61,067 39% 70,707 38%
Other liability 3,897 3% 5,309 4% 7,111 4%
Other ......... 207 -- 358 -- 290 --
--------- ----- --------- ---- --------- ----
Total ......... $ 124,069 100% $ 155,904 100% $ 186,380 100%
<CAPTION>
Net Premium Written by
Line of Business Year Ended December 31,
- ------------------------- ----------------------------------------------------------
1997 1996 1995
---- ---- ----
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Ocean marine .. $ 49,666 79% $ 58,771 59% $ 55,749 52%
Inland marine . (217) -- (2,087) (2%) 1,227 1%
Aircraft ...... 9,568 15% 37,682 38% 42,339 40%
Other liability 3,864 6% 5,325 5% 6,954 7%
Other ......... 207 -- 374 -- 290 --
--------- ----- --------- ---- --------- ----
Total ......... $ 63,088 100% $ 100,065 100% $ 106,559 100%
</TABLE>
Reinsurance Ceded
A reinsurance transaction takes place when an insurance company transfers
(cedes) a portion or all of its exposure on insurance written by it to another
insurer. The reinsurer assumes the exposure in return for a portion or all of
the premium. The ceding of reinsurance does not legally discharge the insurer
from its primary liability for the full amount of the policies, and the ceding
company is required to pay the loss if the assuming company fails to meet its
obligations under the reinsurance agreement. The Company, through the pools,
cedes the greater part of its reinsurance through annual reinsurance agreements
(treaties) with other insurance companies. These treaties, which are drawn by
lines or classes of insurance, allow the Company to automatically reinsure risks
without having to cede insurance on a risk by risk (facultative) basis, although
facultative reinsurance is utilized on occasion.
6
<PAGE>
Generally, the Managers place reinsurance with companies which have an A.M.
Best rating greater than B+ or which have sufficient financial strength, in
management's opinion, to warrant being used for reinsurance protections. The
Managers also examine financial statements of reinsurers and review such
statements for profitability, reasonable leverage and adequate surplus. In
addition, the Company, through the pools, withholds funds and may obtain letters
of credit under reinsurance treaties. The Company continues to monitor the
financial status of all reinsurers on an annual basis, as well as the timely
receipt of cash, to assess the ability of reinsurers to pay reinsurance claims.
The Company, through the pools, attempts to limit its exposure from losses
on any one occurrence through the use of various excess of loss, quota share and
facultative reinsurance arrangements and to minimize the risk of default by a
reinsurer by reinsuring risks with many different reinsurers. The Company
utilizes many separate reinsurance treaties each year with a range of 8 to 20
reinsurers participating on each treaty. Many reinsurers participate on multiple
treaties. The Company utilizes quota share reinsurance treaties in which the
reinsurers participate on a set proportional basis in both the premiums and
losses. Additionally, the Company utilizes excess of loss reinsurance treaties
in which the reinsurers, in exchange for a minimum premium, subject to upward
adjustment based upon premium volume, agree to pay for that part of each loss in
excess of an agreed upon amount. The Company's retention of exposure, net of
these treaties, varies between its different classes of business and from year
to year, depending on several factors including the pricing environment on both
the direct and ceded book of business and the availability of reinsurance. In
general, reinsurance is obtained for each line of business when necessary to
reduce the Company's exposure to a maximum of $2 million for any one insured on
any one occurrence. The Company can and does, from time to time, carry a maximum
exposure in excess of $2 million for any one insured on any one occurrence. Such
instances, when they occur, generally reflect a business decision regarding the
cost of further reductions in the Company's exposure and/or the availability of
reinsurance.
The Company attempts to limit its exposure from catastrophes through the
purchase of general excess of loss reinsurance which provides coverage in the
event that multiple insureds incur losses arising from the same occurrence.
These coverages require the Company to pay a minimum premium, subject to upward
adjustment based upon premium volume. The treaties, which extend, in general,
for a twelve month period, obligate the reinsurers to pay for the portion of the
Company's aggregate losses (net of specific reinsurance) which fall within each
treaty's layer or exposure. The Company's retention on any one catastrophic
occurrence, after it obtains the benefit of its excess of loss reinsurance, has
not exceeded $4 million during the past three years. In the event of a
catastrophe loss, the Company would incur additional reinstatement premium
charges for its excess of loss reinsurance, to the extent that such treaties
incur a portion of the loss and in an amount not greater than the original cost
of the reinsurance.
The Company reinsures risks with several domestic and foreign reinsurers as
well as syndicates including Lloyd's of London ("Lloyd's"). The Company's
largest reinsurers as of December 31, 1997, were Arkwright, Lloyd's and Utica
Mutual, with aggregate net recoverables of $38 million, $15 million and $14
million, respectively. The 1997 A.M. Best ratings for Arkwright and Utica Mutual
are A+ and A, respectively. Lloyd's of London maintains a trust fund which was
established for the benefit of all United States ceding companies. In 1995, as
part of a reconstruction process, the trust fund was expanded to include certain
obligations on a gross basis. In 1996, Equitas was formed to handle the run-off
of years 1992 and prior for Lloyd's. For the three most recent years for which
Lloyd's has reported results, 1994, 1993 and 1992, Lloyd's reported gains for
1994 and 1993 of 1.75 billion pounds and 2.25 billion pounds, respectively, and
losses of 1.02 billion pounds for 1992. The Company has not experienced
difficulties in collecting amounts due from Lloyd's and the timing of cash
receipts has not materially affected the Company's liquidity. However, given the
uncertainty surrounding the sufficiency of assets in Equitas to meet its
ultimate obligations, there is a reasonable possibility that the Company's
collection efforts relating to its Lloyd's recoverables might be adversely
affected in the future. At December 31, 1997, the Company's net exposure to
reinsurers, other than Arkwright, Lloyd's and Utica Mutual, was approximately
$94 million, including amounts recoverable for paid losses, outstanding losses,
IBNR and unearned premium reserves. This amount is recoverable collectively from
approximately 800 reinsurers or syndicates, no single one of which was liable to
the Company for an unsecured amount in excess of approximately $3.0 million.
7
<PAGE>
Operating Ratios
Premium to Surplus Ratio. The following table shows, for the periods
indicated, the Company's consolidated statutory ratios of net premiums written
(gross premiums less premiums ceded) to policyholders' surplus:
Year Ended December 31,
----------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
(Dollars in thousands)
Net premiums written .... $ 62,221 $ 90,513 $ 97,817 $100,907 $ 79,034
Policyholders' surplus... 181,844 160,929 148,785 133,813 131,375
-------- -------- -------- -------- --------
Ratio ................... .34 to 1 .56 to 1 .66 to 1 .75 to 1 .60 to 1
While there are no statutory requirements applicable to the Company which
establish permissible premium to surplus ratios, guidelines established by the
National Association of Insurance Commissioners provide that the statutory net
premium written to surplus ratio should be no greater than 3 to 1. The Company
is well within those guidelines.
Combined Loss and Expense Ratios. The underwriting experience of the
Company is indicated by its "combined ratio," which is the sum of (l) the ratio
of losses and loss adjustment expenses incurred to net premiums earned (the
"loss ratio") and (2) the ratio of policy acquisition costs and other
underwriting expenses to net premiums written (the "expense ratio"). The
Company's consolidated loss ratios, expense ratios and combined ratios, on a
statutory basis, are shown in the following table:
Year Ended December 31,
----------------------------------------
1997 1996 1995 1994 1993
------ ------ ------ ------ -----
Loss Ratio ........... 58.7% 62.6% 69.0% 80.2% 80.3%
Expense Ratio ........ 31.7% 31.9% 30.3% 28.5% 26.6%
------ ------ ------ ------ -----
Combined Ratio ....... 90.4% 94.5% 99.3% 108.7% 106.9%
The ratios set forth above have been calculated on a statutory basis which
reflect the operating results of NYMAGIC's two insurance company subsidiaries,
New York Marine and Gotham.
GAAP Combined Loss and Expense Ratios. The underwriting experience of the
Company is indicated by its "combined ratio," which is the sum of (1) the ratio
of losses and loss adjustment expenses incurred to net premiums earned (the
"loss ratio") and (2) the ratio of policy acquisition costs and other
underwriting expenses to net premiums earned (the "expense ratio").
The Company's consolidated loss ratios, expense ratios and combined ratios,
on a GAAP basis, are shown in the following table:
Year Ended December 31,
----------------------------------------
1997 1996 1995 1994 1993
------ ------ ------ ------ -----
Loss Ratio ........... 58.0% 61.2% 67.4% 78.1% 77.8%
Expense Ratio ........ 31.5% 32.3% 31.9% 34.4% 28.2%
------ ------ ------ ------ -----
Combined Ratio ....... 89.5% 93.5% 99.3% 112.5% 106.0%
The ratios set forth above have been calculated on a GAAP basis which
reflect the operating results of NYMAGIC's two insurance company subsidiaries,
New York Marine and Gotham.
The GAAP loss ratio differs from the statutory loss ratio mainly as a
result of accruals for salvage and subrogation in year 1993, amortization of the
deferred income in connection with the assumption of loss reserves from
Pennsylvania National and Lumber Mutual, and, in 1993 and subsequent, an accrual
on a statutory basis for unallocated loss adjustment expenses which are based on
management commissions charged by the pool and, therefore, eliminated on a GAAP
consolidated basis. The GAAP expense ratio differs from the statutory expense
ratio primarily as a result of amortization of deferred policy acquisition costs
for GAAP and receivable write-offs which are reflected in income for GAAP.
8
<PAGE>
Reserves
The applicable insurance laws under which the Company operates require that
reserves be maintained for the payment of losses and loss adjustment expenses
with respect to both reported and IBNR claims under its insurance policies. IBNR
claims are those losses, based upon historical experience and other relevant
data, that the Company estimates will be reported or ultimately develop on risks
undertaken by the Company. The Company maintains a conservative policy in
establishing reserves, especially in the year the policy is written. Case loss
reserves are determined by evaluating reported claims on the basis of the type
of loss involved, knowledge of the circumstances surrounding the claim, and the
policy provisions relating to the type of loss. IBNR claims are estimated on the
basis of statistical information with respect to the probable number and nature
of claims arising from occurrences which have not yet been reported. The
establishment of reserves acts to reduce income while the downward adjustment or
reduction of reserves increases income.
The loss settlement period on insurance claims may be many years and during
this period it often becomes necessary to adjust the estimate of liability on a
claim either upward or downward. Among the classes of marine, aviation and
non-marine liability insurance written by the Company are liability classes
which historically have had long lead times between occurrence of an insurable
event, reporting of the claim to the Company and final settlement. In such
cases, the Company is forced to estimate reserves over long periods of time,
with the possibility of several adjustments. Other classes of insurance, such as
property and claims-made non-marine liability classes, historically have had
shorter lead times between occurrence of an insurable event, reporting of the
claim to the Company and final settlement. The reserves with respect to such
classes are less likely to be readjusted.
The Company, from time to time, has increased its participation in the
pools. The effect of each such increase is prospective in nature and does not
affect the loss reserves herein set forth for the years prior to the effective
date of any such change in participation percent.
The insurance pools participated in the issuance of umbrella casualty
insurance for various Fortune 1000 companies in the period from 1978 to 1983.
Depending on the accident year, the insurance pools' maximum retention per
occurrence ranged from $250,000 to $500,000. The Company's effective pool
participation on such risks varied from 11% in 1978 to 30% in 1983. At December
31, 1997 and 1996, the Company's gross, ceded and net loss and loss adjustment
expense reserves for Asbestos/Pollution policies amounted to $25.0 million,
$16.0 million and $9.0 million, and $23.5 million, $15.0 million and $8.5
million, respectively. As of December 31, 1997, the Company had approximately
430 policies which had at least one claim relating to Asbestos/Pollution
exposures. The Company believes that the uncertainty surrounding
Asbestos/Pollution exposures, including issues as to insureds' liabilities,
ascertainment of loss date, definitions of occurrence, scope of coverage, policy
limits and application and interpretation of policy terms, including exclusions,
all affect the estimation of ultimate losses. Under such circumstances, it is
difficult to determine the ultimate loss for Asbestos/Pollution related claims.
Given the uncertainty in this area, losses from Asbestos/Pollution related
claims are likely to adversely impact the Company's results from operations in
future years and may vary materially from such reserves reported as of December
31, 1997. However, the Company believes that, in aggregate, the unpaid loss and
loss adjustment expense reserves as of December 31, 1997, allow for an adequate
provision and that the ultimate resolution of the Asbestos/Pollution claims will
not have a material impact on the Company's financial position.
The following table sets forth NYMAGIC's net case reserve experience
for Asbestos/Pollution policies for each of the past three years:
1997 1996 1995
(In Thousands)
------------------------------
Asbestos
- --------
Case Reserves at beginning of period $ 1,103 $ 1,307 $ 1,367
Incurred loss and loss adjustment expenses 52 (186) 7
Payments (88) (18) (67)
------- ------- -------
Case Reserves at end of period $ 1,067 $ 1,103 $ 1,307
======= ======= =======
9
<PAGE>
1997 1996 1995
(In Thousands)
------------------------------
Pollution
- ---------
Case Reserves at beginning of period $ 2,323 $ 2,141 $ 1,977
Incurred loss and loss adjustment expenses (486) 975 642
Payments (420) (793) (478)
------- ------- -------
Case Reserves at end of period $ 1,417 $ 2,323 $ 2,141
======= ======= =======
The following table sets forth NYMAGIC's net loss and loss adjustment expense
experience for Asbestos/Pollution policies for each of the past three years.
1997 1996 1995
(In Thousands)
------------------------------
Asbestos/Pollution
- ------------------
Unpaid loss and loss adjustment expenses
(Including IBNR) at beginning of period $ 8,500 $ 7,041 $ 6,150
Incurred loss and loss adjustment expenses 1,037 2,270 1,436
Payments (508) (811) (545)
------- ------- -------
Unpaid loss and loss adjustment expenses
(Including IBNR) at end of period $ 9,029 $ 8,500 $ 7,041
======= ======= =======
The loss and loss adjustment payments related to the Company's
Asbestos/Pollution exposures have not been material in relation to the Company's
total loss and loss adjustment expense payments as shown in the table below:
1997 1996 1995
(In Thousands)
--------------------------
Total loss and loss adjustment expense
payments for the year ended December 31, $55,483 $61,524 $51,719
Asbestos/Pollution loss and loss adjustment
expense payments for the year ended December 31, 508 811 545
The insurance pools have written primary insurance relating to products
liability since 1985. The insurance pools' maximum loss per risk is generally
limited to $1,000,000 and the Company's participation percentage ranges from 59%
to 100% based upon policy year. The Company believes that, based upon the
maximum amount per risk and the Company's conservative reserving posture, the
reserves currently established are adequate to cover the ultimate resolution of
all product liability claims.
The following table shows changes in reserves in subsequent years (the
development) from the prior loss estimates based upon experience as of the end
of each succeeding year. The estimate is increased or decreased as more
information becomes known about the frequency and severity of losses for
individual years. A redundancy means the original estimate of the Company's
consolidated liability was higher than the current estimate; a deficiency means
that the current estimate is higher than the original estimate.
The first line of the table presents, for each of the last ten years, the
estimated liability for unpaid losses and loss adjustment expenses at the end of
the year, including the reserve for incurred but not reported losses. These
reserves include reserves assumed from Pennsylvania National and Lumber pursuant
to the assumption of their pool obligations. The first section of the table
shows, by year, the cumulative amounts of losses and loss adjustment expenses
paid as of the end of each succeeding year, expressed as a percentage of the
estimated liability for such amounts.
The second section sets forth the re-estimates in later years of incurred
losses, including payments, as a percentage of the estimate for the years
indicated. The cumulative redundancy represents as of December 31, 1997, the
aggregate change in the estimates over all prior years. The redundancies have
been reflected in income over the periods shown.
10
<PAGE>
The Company makes no specific provision for inflation in connection with
reserve estimates, but does each year consider the adjustment of outstanding
case reserves and current inflationary indices in determining the adequacy of
the overall loss reserve. The Company monitors historical loss payments to
determine the sufficiency of this provision.
The following table provides a reconciliation of the consolidated liability
for losses and loss adjustment expenses at the beginning and end of 1997, 1996
and 1995:
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------------------------------------
1997 1996 1995
--------- --------- ---------
(In Thousands)
<S> <C> <C> <C>
Net liability for losses and loss adjustment
expenses at beginning of year .................................. $ 227,370 $ 229,916 $ 212,377
--------- --------- ---------
Provision for losses and loss adjustment
expenses occurring in current year ............................. 72,322 71,731 75,618
Decrease in estimated losses and loss
adjustment expenses for claims occurring
in prior years (1) ............................................. (21,874) (12,753) (6,360)
Deferred income-loss portfolio
assumption(2) .................................................. 320 381 458
--------- --------- ---------
Total losses and loss adjustment expenses
incurred ....................................................... 50,768 59,359 69,716
--------- --------- ---------
Less:
Losses and loss adjustment expense payments
for claims occurring during:
current year ............................................... 17,029 15,012 10,043
prior years ................................................ 38,454 46,512 41,676
--------- --------- ---------
55,483 61,524 51,719
Plus:
Deferred income-loss portfolio assumption(2) ..................... (320) (381) (458)
--------- --------- ---------
Net liability for losses and loss adjustment
expenses at year end ........................................... 222,335 227,370 229,916
--------- --------- ---------
Ceded unpaid losses and loss adjustment
expenses ....................................................... 166,067 184,467 187,879
--------- --------- ---------
Gross unpaid losses and loss adjustment
expenses at year end ........................................... $ 388,402 $ 411,837 $ 417,795
========= ========= =========
</TABLE>
(1) The adjustment to the consolidated liability for losses and loss
adjustment expenses for losses occurring in prior years reflects the net effect
of the resolution of losses for other than full reserve value and subsequent
readjustments of loss values.
(2) Deferred income-loss portfolio assumption represents the difference
between cash received and unpaid loss reserves assumed as a result of the buyout
of Pennsylvania National's and Lumber's net pool obligations which was initially
capitalized and will be amortized over the payout period of the related losses.
The principal differences between the consolidated liability for unpaid
losses and loss adjustment expenses as reported in the Annual Statement filed
with state insurance departments in accordance with statutory accounting
principles and the liability based on generally accepted accounting principles
shown in the above tables is due to the reserve for the Company's pro rata share
of the pool obligations of Mutual Fire, a former pool member, the assumption of
Pennsylvania National's and Lumber's loss reserves arising from their former
participation in the MMO insurance pools and unpaid unallocated loss adjustment
expenses based upon management commissions payable to the Managers which are
eliminated on a consolidated basis. The loss reserves shown in the above tables
reflect in each year salvage and subrogation accruals of approximately 1% to 6%.
The estimated accrual for salvage and subrogation is based on the line of
business and historical salvage and subrogation recovery data. In neither
statutory nor generally accepted accounting principles are loss and loss
adjustment expense reserves discounted.
11
<PAGE>
The following table sets forth the reconciliation of the consolidated net
liability for losses and loss adjustment expenses based on statutory accounting
principles and based on generally accepted accounting principles as of December
31, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------
1997 1996 1995
--------- --------- ---------
(In Thousands)
<S> <C> <C> <C>
Liability for losses and loss adjustment expenses
reported based on statutory accounting principles ..................................... $ 217,016 $ 222,953 $ 225,260
Liability for losses and loss adjustment expenses assumed
from Lumber Mutual and Pennsylvania National .......................................... 4,469 4,508 4,615
(excludes $5,580, $6,653 and $8,173 at
December 31, 1997, 1996 and 1995, accounted for in the statutory liability for
losses and loss adjustment expenses.)
Other, net .............................................................................. 850 (91) 41
--------- --------- ---------
Net liability for losses and loss adjustment expenses reported
based on generally accepted accounting principles ..................................... 222,335 227,370 229,916
Ceded liability for unpaid losses and loss adjustment expenses .......................... 166,067 184,467 187,879
--------- --------- ---------
Gross liability for unpaid losses and loss adjustment expenses .......................... $ 388,402 $ 411,837 $ 417,795
========= ========= =========
</TABLE>
Regulation
The Company is regulated by the insurance regulatory agencies of the states
in which it is authorized to do business. New York Marine is licensed to engage
in the insurance business in all states.
Gotham is permitted to write excess and surplus lines insurance on a
non-admitted basis in all of the states except Arkansas, Massachusetts, Nevada,
New Jersey, New Hampshire and Vermont. Gotham is licensed to engage in the
insurance business in the state of New York and, as such, cannot write excess
and surplus business in that state.
Many aspects of the Company's insurance business are subject to regulation.
For example, minimum capitalization must be maintained; certain forms of
policies must be approved before they may be offered; reserves must be
established in relation to the amounts of premiums earned and losses incurred;
and, in some cases, schedules of premium rates must be approved.
The insurance company subsidiaries also file statutory financial statements
with each state in the format requested by the National Association of Insurance
Commissioners (the "NAIC"). The NAIC provides accounting guidelines for
companies to report and provides minimum solvency standards for all companies in
the form of risk-based capital requirements. The Company believes that the
surplus of each of the insurance companies are above the minimum amount required
by the NAIC.
The NAIC is engaged in a project to codify statutory accounting principles
which will ultimately become the only source of prescribed statutory accounting
principles. When the project is completed, it will likely change currently
prescribed statutory accounting principles and may result in changes in the
accounting policies the Company uses to prepare its statutory financial
statements as filed with the various states.
The Company is subject to an examination by the Insurance Department of the
State of New York. The insurance companies' most recent examination was for the
year ended December 31, 1995. There were no significant adjustments which
resulted from that examination.
The insurance company subsidiaries are limited under New York law in the
amount of dividends they can pay to the parent company, NYMAGIC, without prior
approval of the New York State Insurance Department.
12
<PAGE>
NYMAGIC's principal source of income is dividends from its subsidiaries, which
is used for payment of operating expenses, including interest expense, loan
repayments and payment of dividends to NYMAGIC's shareholders. The maximum
amount of dividends that may be paid to NYMAGIC by the insurance company
subsidiaries is limited to the lesser of 10% of statutory surplus or 100% of net
investment income, as defined under New York insurance law. The maximum amount
which could be paid to the Company out of December 31, 1997, surplus was
approximately $18,184,000.
Insurance companies are being regulated more strictly by the various states
in recent years. Many states have also increased regulation of surplus lines
insurance thereby requiring stricter standards for authorization. Several states
have established guaranty funds which serve to provide the assured with payment
due under policies issued by insurance companies that have become insolvent.
Insurance companies that are authorized to write in states are assessed a fee,
normally based on direct writings in a particular state, to cover any payments
drawn from insolvency funds. The Company is subject to such assessments in the
various states.
Subsidiaries
NYMAGIC's largest insurance company subsidiary is New York Marine And
General Insurance Company which was formed in 1972. NYMAGIC was formed in 1989
to serve as a holding company for the subsidiary insurance companies. Prior
thereto, New York Marine And General Insurance Company was the parent company
and shares of its common stock, $1.00 par value, were traded publicly. NYMAGIC
became the holding company, and New York Marine its subsidiary, effective
October 2, 1989, following regulatory and shareholder approval.
NYMAGIC's other insurance company subsidiary, Gotham Insurance Company, was
organized in 1986 as a means of expanding into the excess and surplus lines
marketplace. New York Marine and Gotham entered into a Reinsurance Agreement,
effective January 1, 1987, under terms of which Gotham will cede 100% of its
gross direct writings to New York Marine and assume 15% of New York Marine's
total retained business, beginning with the 1987 policy year. Accordingly, for
policy year 1987 and subsequent, Gotham's underwriting statistics are similar to
New York Marine's. As of December 31, 1997, 75% and 25% of Gotham's common stock
is owned by New York Marine and NYMAGIC, respectively.
Gotham does not assume or cede business to or from other insurance
companies. As of December 31, 1997, New York Marine had aggregate recoverables
due from Gotham of approximately $35 million or 21% of New York Marine's
statutory surplus. Gotham had aggregate recoverables due from New York Marine as
of December 31, 1997, of approximately $31 million or 59% of Gotham's statutory
surplus.
New York Marine's and Gotham's combined net income on a GAAP basis
represented substantially all of the consolidated net income of the Company for
each of the years ended December 31, 1997, 1996 and 1995.
Mutual Marine Office, Inc. was acquired in 1991 and was formed in 1964 to
underwrite a book of ocean marine insurance. MMO's activities expanded over the
years and it now underwrites a book of ocean marine, inland marine, aviation and
other liability insurance.
Mutual Marine Office of the Midwest, Inc. was acquired in 1991 and was
formed in 1978 to underwrite a varied book of business located in the Midwest
region.
Pacific Mutual Marine Office, Inc. was acquired in 1991 and was formed in
1975 to underwrite a varied book of business in the West Coast region.
13
<PAGE>
Competition
The insurance industry is highly competitive and the companies, both
domestic and foreign, against which the Company competes are often larger with
greater capital resources than the Company and the pools. The principal methods
of competition are pricing and responsiveness to the individual insured's
coverage requirements. The competitive nature of the business reached a peak in
1990 after several major catastrophes forced the withdrawal of several insurance
companies from various markets. As a result, the aviation, ocean and inland
marine market hardened in 1991 and remained favorable through 1994. However, in
1995 through 1997 competition intensified and rates softened in the aviation and
ocean marine lines. Competition remains intense as a result of excess capacity
in the casualty market. Accordingly, the Company is not planning to renew those
policies which would result in an underwriting loss.
The Company believes it can successfully compete against other companies in
the insurance market due to its philosophy of underwriting quality insurance,
its reputation as a conservative well-capitalized insurer and its willingness to
forego unprofitable business.
Employees
The Company currently employs approximately 115 persons, of whom 19 are
insurance underwriters.
Item 2. Properties.
The Company does not own, directly or indirectly, any real estate. The
Company leases office space for day to day operations in the following cities:
New York - 37,000 square feet
Chicago - 3,500 square feet
San Francisco - 4,050 square feet
The Company's principal executive offices are approximately 37,000 sq. ft.
in size and are located in New York City. In 1993 the Company moved into its
location at 330 Madison Avenue, New York, New York, which was renovated and is
in excellent condition. The lease for the Company's principal executive offices
expires December 30, 2003. The minimum annual rent under the lease is $1,074,000
in 1998 and $1,184,000 from 1999 until the expiration of the lease. The lease
included a cash payment by the lessor to the Company of $1,853,000 of which the
benefit was deferred and amortized over the lease term.
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
14
<PAGE>
PART II
Item 5. Market for Registrant's Common Stock and Related Stockholder Matters.
The Company's common stock trades on the New York Stock Exchange (NYSE
Symbol: NYM). The following table sets forth representative high and low closing
prices for the periods indicated.
1997 1996
------------------ -------------------
High Low High Low
---- --- ---- ---
First Quarter .............. $21.13 $18.00 $22.00 $16.38
Second Quarter ............. 20.88 18.38 19.88 18.38
Third Quarter .............. 26.06 20.63 19.13 17.00
Fourth Quarter ............. 29.81 25.50 19.00 17.25
As of March 1, 1998, there were 83 shareholders of record. However,
management believes there are in excess of 2500 beneficial owners of NYMAGIC's
common stock.
Dividend Policy
A cash dividend of ten (10) cents per share was declared and paid to
shareholders of record as of March 31, June 30, September 30, and December 31,
1997 and 1996. For a description of restrictions on the ability of the Company's
insurance subsidiaries to transfer funds to the Company in the form of
dividends, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources."
Item 6. Selected Financial Data.
<TABLE>
<CAPTION>
OPERATING DATA Year Ended December 31,
---------------------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Revenues:
Net premiums earned ........................... $ 87,537 $ 97,036 $103,461 $ 79,255 $ 65,276
Net investment income ......................... 21,325 21,270 21,659 18,854 17,746
Commission income ............................. 1,439 1,981 3,438 2,052 2,498
Realized investment gains ..................... 10,425 4,589 4,111 2,992 6,458
Other income .................................. 293 690 661 420 275
-------- -------- -------- -------- --------
Total revenues ................................ $121,019 $125,566 $133,330 $103,573 $ 92,253
-------- -------- -------- -------- --------
Expenses:
Losses and loss adjustment
expenses incurred ........................... $ 50,768 $ 59,359 $ 69,716 $ 61,900 $ 50,816
Policy acquisition expenses ................... 16,583 18,828 21,017 14,260 10,429
General and administrative
expenses .................................... 16,763 16,168 16,236 16,742 14,749
Interest expense .............................. 1,450 1,035 438 495 661
-------- -------- -------- -------- --------
Total expenses ................................ $ 85,564 $ 95,390 $107,407 $ 93,397 $ 76,655
-------- -------- -------- -------- --------
</TABLE>
15
<PAGE>
Selected Financial Data (continued)
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Income before income taxes 35,455 30,176 25,923 10,176 15,598
-------- -------- -------- -------- --------
Income taxes
Current ..................................... 8,962 7,495 5,393 2,306 2,236
Deferred ...................................... 125 56 410 (1,827) (66)
-------- -------- -------- -------- --------
Total income taxes ............................ 9,087 7,551 5,803 479 2,170
-------- -------- -------- -------- --------
Income before
cumulative effect ........................... 26,368 22,625 20,120 9,697 13,428
Cumulative effect of change
in accounting for income taxes .............. -- -- -- -- 1,221(3)
-------- -------- -------- -------- --------
Net income .................................... $ 26,368 $ 22,625 $ 20,120 $ 9,697 $ 14,649
======== ======== ======== ======== ========
Weighted average shares
outstanding - basic ......................... 9,849 10,499 11,299 11,379 11,411
Weighted average shares
outstanding - diluted ....................... 9,872 10,524 11,341 11,392 11,449
BASIC EARNINGS PER SHARE(4):
Income before
cumulative effect ........................... $ 2.68 $ 2.15 $ 1.78 $ .85 $ 1.17
Cumulative effect of change
in accounting for income taxes .............. -- -- -- -- .11(3)
-------- -------- -------- -------- --------
Basic earnings per share ...................... $ 2.68 $ 2.15 $ 1.78 $ .85 $ 1.28
======== ======== ======== ======== ========
DILUTED EARNINGS PER SHARE(4):
Income before
cumulative effect ........................... $ 2.67 $ 2.15 $ 1.77 $ .85 $ 1.17
Cumulative effect of change
in accounting for income taxes .............. -- -- -- -- .11(3)
-------- -------- -------- -------- --------
Diluted earnings per share .................... $ 2.67 $ 2.15 $ 1.77 $ .85 $ 1.28
======== ======== ======== ======== ========
Dividends declared ............................ $ .40 $ .40 $ .40 $ .40 $ .40
======== ======== ======== ======== ========
<CAPTION>
BALANCE SHEET DATA
AT PERIOD END:
Year Ended December 31,
--------------------------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
(In thousands)
<S> <C> <C> <C> <C> <C>
Total investments ...................... $438,591(2) $409,209(2) $403,306(2) $341,643(2) $334,722
Total assets (1) ....................... 707,903 714,949 722,250 730,744 680,100
Unpaid losses and loss
adjustment expenses(1) .............. 388,402 411,837 417,795 435,072 407,321
Notes payable .......................... 22,458 20,438 12,727 7,020 10,294
Total shareholders' equity ............. $206,519 $188,852 $182,717 $164,313 $166,482
</TABLE>
- ----------
(1) Includes reserve liabilities reported gross of reinsurance credits pursuant
to Statement of Financial Accounting Standards No. 113.
(2) Fixed maturities available for sale are carried at fair value pursuant to
Statement of Financial Accounting Standards No. 115.
(3) Reflects the cumulative effect of calculating deferred taxes under
Statement of Accounting Standards No. 109 "Accounting for Income Taxes."
(4) Earnings per share data prior to 1997 have been restated as required under
Statement of Financial Accounting Standards No. 128, "Earnings Per Share".
For a description of factors that materially affect the comparability of
the information reflected in the Selected Financial Data, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations" below.
16
<PAGE>
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Results of Operations
The Company participates in pools of insurance covering ocean marine,
inland marine, aircraft and non-marine liability insurance managed by MMO and
affiliates. The Company's participation in the ocean marine, inland marine and
aviation business produced by the pools increased to 81.47% effective January 1,
1994. The Company's participation in the other liability and inland marine pool
increased to 100% effective July 1, 1994, and its participation in the ocean
marine and aviation pools increased to 90% at the same time. Effective January
1, 1997, the Company's participation in the ocean marine and aviation pool
increased to 100%.
<TABLE>
<CAPTION>
NYMAGIC Net Premiums Written
by Line of Business Year Ended December 31,
----------------------------------------------------------------------------
1997 1996 1995
-------- -------- --------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Ocean Marine .................. $ 48,658 78% $ 54,093 60% $ 48,944 50%
Inland Marine ................. 146 -- (1,658) (2%) 2,803 3%
Aircraft ...................... 9,354 15% 32,482 36% 38,962 40%
Other liability ............... 3,856 6% 5,238 6% 6,818 7%
Other ......................... 207 1% 358 -- 290 --
-------- --- -------- --- -------- ---
Total ......................... $ 62,221 100% $ 90,513 100% $ 97,817 100%
======== === ======== === ======== ===
<CAPTION>
NYMAGIC Net Premiums Earned
by Line of Business Year Ended December 31,
----------------------------------------------------------------------------
1997 1996 1995
-------- -------- --------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Ocean Marine .................... $ 49,984 57% $ 52,483 54% $ 48,110 47%
Inland Marine ................... 443 1% 2,408 3% 11,563 11%
Aircraft ........................ 32,566 37% 35,416 36% 35,496 34%
Other liability ................. 4,328 5% 6,355 7% 8,022 8%
Other ........................... 216 -- 374 -- 270 --
-------- --- -------- --- -------- ---
Total ........................... $ 87,537 100% $ 97,036 100% $103,461 100%
======== === ======== === ======== ===
</TABLE>
- ----------
Unlike many types of property and casualty insurance, ocean marine, inland
marine, aviation and other liability premium rates are not strictly regulated by
governmental authorities. Consequently, the Company is able to adjust premium
rates quickly in response to competition, varying degrees of risk and other
factors. In addition, the Company, by virtue of its underwriting flexibility, is
able to emphasize specific lines of business in response to advantageous premium
rates and the anticipation of positive underwriting results.
The Company's general and administrative expenses consist primarily of
compensation expense, employee benefits and rental expense for office
facilities. The Company's policy acquisition costs include both brokerage
commissions and premium taxes which are primarily based on a percentage of
premiums written. Such costs have generally changed in proportion with changes
in premium volume. Losses and loss adjustment expenses incurred in connection
with insurance claims in any particular year depend upon a variety of factors
including the rate of inflation, accident or claim frequency, the occurrence of
natural catastrophes and the number of policies written.
The Company estimates reserves each year based upon, and in conformity
with, the factors discussed under "Business-Reserves". The Company maintains a
conservative policy for establishing reserves, especially in the year a policy
is written. Changes in estimates of reserves are reflected in operating results
in the year in which the change occurs.
17
<PAGE>
1997 as Compared to 1996
The Company's net premiums earned decreased by 10% in 1997 as compared to
1996. The decrease in premiums earned occurred in all major lines of business.
Inland marine premiums recorded the largest percentage decline at 82% in
1997. The Company decided in the prior year to withdraw from writing property
risks of the larger assureds with multiple locations after years of unprofitable
results brought about mainly by large catastrophe losses. In 1997, the Company
concentrated on writing risks that are ancillary to its ocean marine risks. This
strategy is expected to remain in place for 1998.
Ocean marine premiums earned fell by 5% in 1997 mainly due to falling
premium rates as competition remained intense during the year. All classes
within the ocean marine line experienced declines except for the energy class
which saw increases in production. Net premium writings did not decline at the
same rate as gross premiums primarily due to lower reinsurance costs.
Competition should remain intense in 1998. The Company has been writing
additional marine liability accounts with assureds that have smaller amounts of
exposure. This area of growth may offset expected rate reductions. A source of
additional growth in 1998 in this line will be from premiums written through our
recently acquired agency and syndicate in Lloyd's of London.
Although net premiums earned in the aviation decreased by only 8%, gross
written and net written premiums decreased by 25% and 71%, respectively. A
softening of rates in the aviation line, resulting from excess industry
capacity, initially started in 1996 and continued into 1997 and accounted for a
reduction in gross aviation premiums written in the current year. During soft
underwriting cycles, the Company seeks to reduce overall retention levels in
order to avoid the negative impact of any one loss on net income. As a
consequence of purchasing additional reinsurance, net writings fell at a greater
percentage. The Company expects this environment to remain competitive in 1998.
Other liability earned premiums decreased by 32%. The casualty market has
been severely competitive for many years. Consequently, the Company continues to
underwrite this line very selectively. The Company expects the casualty market
to remain competitive in1998 with premiums likely to further decline.
Premiums earned did benefit, however, from the Company's increased pool
participation in the Mutual Marine Office, Inc. ocean marine and aviation pool
from 90% to 100% effective for policies incepting on or after January 1, 1997.
Losses and loss adjustment expenses as a percentage of premiums earned were
58.0% in 1997 as compared to 61.2% in 1996. Improved net loss experience in the
other liability and inland lines contributed to the overall decline in the loss
ratios. In addition, despite an increase in the frequency of losses in the
aviation line, this loss ratio actually improved from the prior year as a result
of lower retention levels on losses and favorable loss development on prior year
reserves. An increase in severity losses in the ocean marine line contributed to
a higher loss ratio in the current year.
Policy acquisition costs as a percentage of net premiums earned for the
year ended December 31, 1997 was 18.9% as compared to 19.4% for the prior year.
The Company saw an improvement in the acquisition ratio in the aviation line as
a result of obtaining ceding override commissions on reinsurance placed. This
had the effect of reducing overall net commissions at a greater rate than the
decline in premiums.
Net investment income for the year ended December 31, 1997 was flat as
compared to the same period of 1996 as a result of a decrease in the investment
yield in the Company's fixed maturity portfolio. The investment income generated
from a larger invested asset base was offset by a decrease in investment yield
in the Company's fixed maturity portfolio as a result of additional purchases of
tax-exempt securities and lower interest rates overall.
18
<PAGE>
Commission and other income for the year ended December 31, 1997 was
$1,438,606 as compared to $1,980,632 for the same period of 1996. Commission
income includes management and contingent commissions charged by Mutual Marine
Office, Inc. for operating the insurance pools. As gross writings decreased and
the Company increased its MMO pool participation in the ocean marine and
aviation pool from 90% to 100% effective for policies incepting on or after
January 1, 1997, management commission income from a non-affiliated member of
the insurance pools declined.
General and administrative expenses increased by 4% in 1997 primarily as a
result of increased personnel and administrative costs to further strengthen
support services.
Interest expense increased to $1,449,770 for the year ended December
31,1997 from $1,035,058 for the same period of the prior year primarily as a
result of an increase in average loan principal outstanding.
The Company was able to realize investment gains of $10,425,133 in 1997
mainly as a result of the sale of appreciated equity securities.
Net income increased by 17% to $26,367,740 for the year ended December 31,
1997, from $22,624,618 for the prior year. Diluted earnings per share increased
to $2.67 in 1997 as compared to $2.15 in 1996.
Unrealized appreciation of investments as of December 31, 1997 included
gross unrealized gains and losses on equity securities of $12,276,631 and
$943,821 respectively, and gross unrealized gains and losses on fixed maturities
available for sale of $8,601,011 and $47,998, respectively. Unrealized gains
were recorded in fixed and equity securities resulting from decreases in
interest rates and a strong stock market in 1997, respectively.
Premiums and other receivables, net decreased to $40,635,164 as of December
31, 1997. Declines in premium writings contributed to the overall decline.
Ceded reinsurance payable increased to $27,307,129 at December 31, 1997 as
a result of lowering the Company's retention level in the aviation line of
business.
Notes payable increased to $22,458,413 as of December 31, 1997 and resulted
from loans obtained to repurchase the Company's common stock. This also
contributed to the increase in treasury stock, at cost, in 1997.
Prepaid reinsurance premiums increased 131% to $24,414,620 at December 31,
1997 however the reserve for unearned premiums decreased in 1997 by 17%. The
decline in gross writings in 1997 is consistent with the change in the reserve
for unearned premiums. The Company, however, reduced its net retention per loss
in the aviation line which caused prepaid reinsurance premiums, as well as ceded
reinsurance payable balances, to increase accordingly.
1996 as Compared to 1995
The Company's net premiums earned decreased by 6% in 1996 as compared to
1995. The decline primarily relates to the inland marine and other liability
lines of business.
The inland marine line recorded the largest decline in earned premiums at
79%. This was consistent with the Company's plan in 1996 to withdraw from
writing the larger multi-location assureds. After several years of unprofitable
results caused by large catastrophe losses and expensive reinsurance, the
Company limited its 1996 writings to those that were ancillary to its ocean
marine risks. Negative premiums written for 1996 occurred as a consequence of
purchasing reinsurance to cover the run-off of the prior year's catastrophe
oriented business which was in force in 1996.
The other liability earned premiums decreased 21% as compared to the prior
year. Due to the fierce competition in this line, casualty market rates had
remained soft.
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<PAGE>
The ocean marine line recorded the largest growth in written and earned
premiums among the Company's various lines of business in 1996. An 11% and 9%
increase over the prior year's written and earned premium, respectively, was
achieved by additional production in the hull and cargo classes of business
coupled with changes in the ocean marine reinsurance program. Gross premiums
were down slightly as rate reductions in various marine classes outweighed the
additional production in the hull and cargo classes. Rates in the ocean marine
line softened as competition intensified. Reinsurance changes in the Company's
hull, cargo and energy classes enabled those classes to retain more premium
income without sustaining much additional exposure.
Although net earned premiums in the aviation line remained flat when
compared to 1995, gross and net writings decreased 14% and 16%, respectively.
1995 was a peak year for aviation rates after insurers suffered several years of
losses. As industry gross losses improved in 1995, competition intensified and
rates subsequently softened. As a casualty of this competitive rate environment,
certain accounts were not renewed in 1996 and thereby contributed to the overall
decline.
Losses and loss adjustment expenses as a percentage of premiums earned were
61.2% in 1996 as compared to 67.4% in 1995. Improved net loss experience in the
Company's core ocean and aviation lines contributed to the overall decline.
Although the inland loss ratio in 1996 was adversely affected by severe
weather experienced during the 1995-1996 winter season, such ratio improved when
compared to the prior year. The 1995 year included large property catastrophe
losses from various hurricanes.
The other liability line deteriorated in 1996 from adverse loss development
in both the umbrella and the non-marine liability occurrence classes.
Commission income, consisting primarily of reinsurance profit commissions
and insurance pool profit and management commissions charged to members of the
insurance pools other than New York Marine, decreased by 42% in 1996. Larger
reinsurance contingent commissions were recorded in 1995 as a result of greater
profitability in various marine war classes of business. Also, management
commission from a non-affiliated member of the insurance pools decreased overall
in proportion to the decline in the pool's gross writings in 1996.
Net investment income for the year ended December 31, 1996, decreased by 2%
from the prior year. Investment yields decreased on the Company's fixed maturity
portfolio due to both market conditions and a greater investment in tax-exempt
securities which was applied against a larger investment asset base.
Policy acquisition costs as a percentage of net premiums earned for the
year ended December 31, 1996 was 19.4% as compared to 20.3% for the prior year.
The inland marine line had the largest acquisition ratio among the Company's
various lines of business. Reductions in inland premium writings in 1996 had the
effect of decreasing policy acquisition costs and the overall ratio.
Interest expense increased by 137% in 1996 primarily as a result of an
increase in loan principal outstanding.
General and administrative expenses remained flat as compared with the
prior year as a result of continuing efforts to contain personnel costs and cost
effective reductions in administrative expenses.
Realized investment gains for the year ended December 31, 1996 amounted to
$4,589,133 and resulted primarily from the sale of appreciated equity
securities.
Net income increased by 12% to $22,624,618 for the year ended December 31,
1996, from $20,119,862 for the prior year. Net income per share increased to
$2.15 in 1996 as compared to $1.77 in 1995.
20
<PAGE>
Unrealized appreciation of investments as of December 31, 1996 included
gross unrealized gains and losses on equity securities of $8,754,704 and
$567,677 respectively, and gross unrealized gains and losses on fixed maturities
held for sale of $5,537,330 and $1,184,493, respectively. Declines in unrealized
gains were recorded in the Company's fixed maturities resulting from increases
in interest rates in 1996.
Notes payable increased to $20,438,413 as of December 31, 1996 and resulted
from loans obtained to repurchase the Company's common stock.
Prepaid reinsurance premiums and reserve for unearned premiums decreased in
1996 by 38% and 16%, respectively. The decline in gross writings in 1996 is
consistent with the change in the reserve for unearned premiums. Also, as the
Company retained additional premium with modifications in its reinsurance
program, further reductions in ceded premiums occurred in 1996 which is
consistent with the change in prepaid reinsurance premiums.
Liquidity and Capital Resources
The Company monitors cash and short-term investments in order to have an
adequate level of funds available to satisfy claims and expenses as they become
due. As of December 31, 1997, the Company's assets included approximately
$19,125,000 in cash and short-term investments. The primary sources of the
Company's liquidity are funds generated from insurance premiums, investment
income and maturing or liquidating investments.
Historically, cash provided by operating activities was used in investing
and financing activities. In 1996 and 1995 cash outflows increased on prior year
loss payments as a result of catastrophe losses from the inland marine line and
the Company's maturing book of casualty business. Such payments were not as
large in 1997, however, increased payments were recorded in the aviation line.
As premiums declined in 1997 and 1996, so did cash collected from premiums
written.
Investing and financing activities increased further as a result of the
Company borrowing $25,000,000 from a bank in 1990. This amount was invested in
its principal insurance subsidiary, New York Marine, to further bolster its
surplus in order to support larger participation interests in the insurance
pools. Repayments of the loan started in 1991 and continued through 1995. In
1994, the Company entered into a $10,000,000 revolving credit agreement which
increased to $25,000,000 in 1996 with the same bank. The Company borrowed
approximately $9,000,000 in 1995 to repurchase 540,000 shares of the Company's
Common Stock. Additional borrowings of approximately $9,520,000 and $9,200,000
were made in 1997 and 1996, respectively, to repurchase the Company's Common
Stock. Repayments were made quarterly generally at $1,250,000 per quarter.
The Company has an unsecured credit facility with a bank that allows for a
maximum credit of $5,000,000. This was reduced in 1997 from a $10,000,000
facility available in 1996. The use of this credit facility will assist the
Company as a source of short-term liquidity. In 1996 and 1995, amounts were
borrowed to assist the insurance pools managed by the Company in the payment of
gross losses . The amounts borrowed under the line of credit were fully repaid
after collecting recoverables due from reinsurers on such losses.
The Company adheres to investment guidelines set by the Finance Committee
of the Board of Directors. The investment guidelines are conservatively designed
to provide the Company with adequate capital growth and sufficient liquidity to
meet existing obligations. Such guidelines consider many factors including
anticipated tax position and regulatory requirements.
The Company's largest investments are in bonds from various states and
municipalities. Such securities receive favorable tax treatment under existing
tax laws. Our investment position is monitored regularly as the Company has been
affected by the alternative minimum tax. As net earnings were affected by
several catastrophe losses in the mid 1990's, the Company further bolstered its
taxable investment position. As the Company's tax position changed with improved
earnings in 1995, additional investments were made in tax-exempt securities
through 1997 to improve after tax investment yield.
21
<PAGE>
Under the Common Stock Repurchase Plan, the Company may purchase up to
$55,000,000 of the Company's issued and outstanding shares of common stock on
the open market. As of December 31, 1997, the Company had repurchased a total of
2,115,728 shares of common stock at a total cost of approximately $38,562,528 at
market prices ranging from $16.50 to $26.88 per share.
NYMAGIC's principal source of cash flow is dividends from its insurance
company subsidiaries which is used to fund operating expenses, including
interest expense, loan repayments and payment of dividends to shareholders. The
Company's insurance company subsidiaries are limited by statute in the amount of
dividends that may be declared or paid during a year. The limitation restricts
dividends paid or declared to the lower of 10% of policyholders' surplus or 100%
of net investment income as defined under New York insurance law. The
limitations on dividends from the insurance company subsidiaries are not
expected to have an impact on the Company's ability to meet current cash
obligations or materially limit the current payment of dividends to the
Company's shareholders.
The Company is currently modifying its existing computer operating systems
in order to be Year 2000 compliant. This problem arises from computers
recognizing only the last two digits of the year and may result in errors in
processing information. The Company expects to complete all modifications to
existing systems in 1998. The cost of this modification is not expected to be
material to the financial statements, liquidity and capital resources of the
Company.
The Company is in the process of communicating with its various business
relationships to determine the extent of their Year 2000 compliance. The results
of this process will serve to reduce the Company's overall exposure to the Year
2000 problem.
The Company is also in the process of evaluating the insurance risk in
connection with the potential for losses arising from Year 2000 failures. Losses
resulting from Year 2000 failures may be determined to be covered under
insurance contracts depending upon contract wording and specific circumstances.
However, the extent of such losses , which the Company may incur, cannot be
determined currently.
Effect of recent accounting pronouncements
The FASB issued SFAS No. 130, "Reporting Comprehensive Income," ("SFAS
130"), in June 1997 which establishes standards for the reporting and
presentation of comprehensive income and its components. Comprehensive income
encompasses all changes in shareholders' equity, except those arising from
transactions with owners, and includes net income, net unrealized capital gains
or losses on available for sale securities and foreign currency translation
adjustments. SFAS 130 is effective for fiscal years beginning after December 15,
1997, with earlier application permitted. The Company is currently evaluating
the presentation alternatives permitted by the statement.
The FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," ("SFAS 131"), in June 1997 which establishes standards
for the reporting of information relating to operating segments in annual
financial statements, as well as disclosure of selected information in interim
financial reports. Operating segments are defined as components of a company for
which separate financial information is available and is used by management to
allocate resources and assess performance.
22
<PAGE>
The statement supersedes SFAS 14, "Financial Reporting for Segments of a
Business Enterprise," which requires reporting segment information by industry
and geographic area. This statement is effective for year-end 1998 financial
statements and interim financial information will be required beginning in 1999.
The Company is currently evaluating the segment information disclosure pursuant
to SFAS 131.
Inflation
Periods of inflation have prompted the pools, and consequently the Company,
to react quickly to actual or potential imbalances between costs, including
claim expenses, and premium rates. These imbalances have been corrected mainly
through improved underwriting controls, responsive management information
systems and frequent review of premium rates and loss experience.
Inflation also affects the final settlement costs of claims which may not
be paid for several years. The longer a claim takes to settle, the more
significant the impact of inflation on final settlement costs. The Company
periodically reviews outstanding claims and adjusts reserves for the pools based
on a number of factors, including inflation.
Item 8. Financial Statements and Supplementary Data.
The consolidated financial statements required in response to this item are
included as part of Item 14(a) of this report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
23
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information required by this Item is incorporated by reference herein
from the "Compensation and Other Information" section of the Company's Proxy
Statement for the 1998 Annual Meeting of Shareholders, except for information
with respect to Directors and Executive Officers which is set forth below.
NYMAGIC's charter and by-laws provide for a Board of Directors consisting
of not fewer than thirteen nor more than nineteen Directors divided into three
classes as nearly equal as possible. NYMAGIC presently has thirteen Directors.
The three year terms of classes III, I and II expire in the years 1998, 1999,
and 2000 respectively. References to the Company include, as the context
requires, NYMAGIC and its predecessor, New York Marine And General Insurance
Company. The Executive Officers and Directors of the Company are as follows:
Class of
Name Age Directors Position(s)
---- --- --------- -----------
Mark W. Blackman(1) 46 II President, Chief Executive
Officer and Director
John N. Blackman, Jr. (1)(2) 51 I Chairman of the Board, Director
Thomas J. Condon (2) 53 I Director
Jean H. Goulding 56 III Director
John Kean, Jr. (4) 73 III Director
James A. Lambert (1) 42 III General Counsel, Chief Operating
Officer, Secretary and Director
Charles A. Mitchell 49 II Vice-President, Director
William R. Scarbrough(3) 69 II Director
Michael S. Shaffet (3) 62 I Director
Richard T. Soper(1)(3 ) 72 II Director
William A. Thorne (1)(2)(4) 72 I Director
Sergio B. Tobia (4) 59 I Director
Louise B. Tollefson (4) 74 II Director
Thomas J. Iacopelli 37 Chief Financial Officer
- ----------
(1) Member of Executive Committee.
(2) Member of Finance Committee.
(3) Member of Audit Committee.
(4) Member of Stock Option & Compensation Committee.
Mark W. Blackman has been a Director since 1979 and was appointed President
in 1988. Mr. Blackman has been employed by the Company or its subsidiaries since
1977. Mr. Blackman is the son of Louise B. Tollefson and brother of John N.
Blackman, Jr.
John N. Blackman, Jr. has been a Director since 1975 and was appointed
Chairman of the Board in 1988. Mr. Blackman has been employed by MMO and
affiliates since 1973 and in December, 1988 became Chairman of the Board of MMO,
PMMO, and Midwest. Mr. Blackman is the son of Louise B. Tollefson and brother of
Mark W. Blackman.
Thomas J. Condon was elected to the Board of Directors in June 1987. He is
a Vice-President - Investments and Investment Advisor with A.G. Edwards & Sons,
Inc. which he joined in September 1993. Mr. Condon formerly served as Senior
Vice President at Peoples Westchester Savings Bank from 1981 through September
1993.
Jean H. Goulding has been a Director since 1976. Ms. Goulding was employed
by the Company or its subsidiaries from 1965 to 1992 and served as Executive
Vice President-Underwriting from 1988 until her retirement in 1992.
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<PAGE>
John Kean, Jr. has been a Director since 1991. Until his retirement in
1991, Mr. Kean was a Senior Vice President and Director of Guy Carpenter & Co.,
Inc.
James A. Lambert has been a Director since 1986. Mr. Lambert was appointed
Chief Operating Officer in 1989 and has served as General Counsel and Secretary
since 1986.
Charles A. Mitchell has been a Director and Vice President since 1981. He
has been employed by the Company or its subsidiaries since 1976.
William R. Scarbrough became a Director in June, 1995. Until his retirement
in 1993, Mr. Scarbrough was a Vice President and Director of Wm. H. McGee & Co,
Inc.
Michael S. Shaffet has been a Director since September 1990. Mr. Shaffet is
the Treasurer and Chief Financial Officer of M. Fabrikant & Sons, Inc. Prior to
assuming that position in 1989, he was a partner in Berman, Shaffet & Schain,
the accountants for MMO and affiliates.
Richard T. Soper has been a Director since 1972. Mr. Soper is Vice Chairman
of Argent Marine Operations, Inc. Prior to assuming that position in 1990, Mr.
Soper served from 1986 as Chairman and President of the American Bureau of
Shipping. From 1978 to 1986, he was Executive Vice President of Sea Land
Service, Inc. and from 1983 to 1986, served as Chairman of the Board of Intersea
Operations, Ltd., Inc.
William A. Thorne has been a Director since 1972. Mr. Thorne has been
employed by Hydrocarbon Products Company, Inc. as its Treasurer and has been its
Chairman of the Board since March 1983.
Sergio B. Tobia has been a Director since 1981. Mr. Tobia was a Senior Vice
President and Director of Sorema North America Reinsurance Co. from 1989 until
his retirement in 1996.
Louise B. Tollefson has been a Director since 1986. Mrs. Tollefson owns
approximately 18.0% of the Company's Common Stock and is the mother of John N.
Blackman, Jr. and Mark W. Blackman.
Thomas J. Iacopelli joined the Company in 1985 as its Assistant Controller.
In 1987, Mr. Iacopelli was appointed Controller of the Company and in 1989 he
was appointed Chief Financial Officer of the Company. Prior to joining the
Company, Mr. Iacopelli was employed by the accounting and consulting firm of
Coopers & Lybrand. Mr. Iacopelli is a Certified Public Accountant.
The Board of Directors, as well as its Audit, Finance and Stock Option and
Compensation Committees meet on a quarterly basis. In 1997, all Directors
attended at least 75% of the meetings of the Board and the Committees on which
they sit.
Item 11. Executive Compensation.
The information set forth under "Compensation and Other Information" in the
Company's Proxy Statement for the Annual Meeting of Shareholders is incorporated
herein by reference.
Stock Option Plans
In 1986, the Company's Board of Directors and Shareholders approved the
Company's 1986 Stock Option Plan (the "1986 Plan"), to provide a means whereby
the Company, through the grant of non-qualified stock options to key officers,
may attract and retain persons of ability as officers. The 1986 Plan authorizes
the issuance of options to purchase up to 500,000 shares of the Company's common
stock at not less than 95 percent of the fair market value at the date of grant.
The 1986 Plan is administered by a committee appointed by the Board of Directors
of the Company.
On January 12, 1987 and October 21, 1987, options for the purchase of 6,000
and 75,500 common shares, respectively, were granted to officers of the Company,
with an exercise price of $14.50 and $13.78, respectively. The market value of
the common stock on each of these days was $15.25 and $14.50, respectively.
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<PAGE>
On January 14, 1988, options for the purchase of 69,000 common shares were
granted to officers of the Company, with an exercise price of $13.78. The market
value of the common stock on that day was $14.50.
On June 14, 1989, and September 13, 1989, options for the purchase of 2,000
and 1,000 common shares, respectively, were granted to an officer of the Company
with an exercise price of $17.10 and $18.41, respectively. The market value of
the common stock on each of these days was $18.00 and $19.38, respectively.
On June 13, 1991, options for the purchase of 58,500 common shares,
respectively, were granted to officers of the Company with an exercise price of
$25.48. The market value of the common stock on the date of the grant was
$26.82.
In 1991, the Company's Board of Directors and Shareholders approved the
Company's 1991 Stock Option Plan (the "1991 Plan").
On September 2, 1992, options for the purchase of 172,500 common shares
were granted to officers and employees of the Company with an exercise price of
$22.33. The market value of the common stock on that day was $23.50.
In December, 1993, options for the purchase of 116,000 common shares were
granted to officers and employees of the Company with an exercise price of
$22.92. The market value of the common stock on the date of the grant was $24.13
per share.
In September, 1994, options for the purchase of 12,500 common shares were
granted to an officer of the Company with an exercise price of $17.34. The
market value of the common stock on the date of the grant was $18.25 per share.
In December, 1994, options for the purchase of 68,500 common shares were
granted to officers and employees of the Company with an exercise price of
$15.56. The market value of the common stock on the date of the grant was $16.38
per share.
In December, 1995, options for the purchase of 210,500 common shares were
granted to officers and employees of the Company with an exercise price of
$15.79. The market value of the common stock on the date of the grant was
$16.625 per share. The grant of these options was made in connection with the
surrender by the option holders of options of equal amounts which had previously
been granted at higher exercise prices.
In September, 1996, options for the purchase of 10,000 common shares were
granted to officers and employees of the Company with an exercise price of
$17.58. The market value of the common stock on the date of the grant was $18.50
per share.
In December, 1996, options for the purchase of 10,000 common shares were
granted to officers and employees of the Company with an exercise price of
$17.22. The market value of the common stock on the date of the grant was $18.12
per share.
Retirement Plans
The Company maintains two retirement plans for the benefit of employees.
Both plans provide for 100% vesting upon completion of three years of service.
The Money Purchase Plan provides for a yearly contribution equal to 7-1/2% of an
employee's cash compensation, for each year of service during which the employee
has completed 1000 hours of service and is employed on the last day of the plan
year. The Profit Sharing Plan does not provide for any specified level of
contribution but any contribution made is subject to the restrictions set forth
above for the Money Purchase Plan. For the most recent plan year, a contribution
equal to 7-1/2% of cash compensation, was made to all eligible participants in
the Profit Sharing Plan.
26
<PAGE>
Item 12. Security Ownership of Certain
Beneficial Owners and Management.
The following table sets forth information as of March 1, 1998, with
respect to beneficial ownership of NYMAGIC Common Stock by beneficial owners
known by the Company to own more than 5% of such stock, directors and nominees,
each officer named in the Summary Compensation Table in the Company's 1998 Proxy
Statement, and all directors and officers as a group. Except as described in the
notes below, all owners listed have power to vote and dispose of the shares held
by them.
Percent of
Amount and Nature Common Stock
Name of Ownership Outstanding
---- -- --------- -----------
Dimensional Fund Advisors, Inc. 619,800(5) 6.38%
1299 Ocean Avenue - 7th Floor
Santa Monica, CA 90401
T. Rowe Price Associates, Inc. 1,012,000(6) 10.42%
100 East Pratt Street
Baltimore, Maryland 21202
John N. Blackman, Jr 2,010,996(1) 20.70%
Mark W. Blackman 1,962,674(2) 20.20%
Judith Cohen 4,000(3) *
Thomas J. Condon 606 *
Jean H. Goulding 22,106 *
John Kean, Jr 506 *
James A. Lambert 18,055(3) *
Charles A. Mitchell 7,700(3) *
Robert Palmer 7,000(3) *
William R. Scarbrough 606 *
Michael S. Shaffet 1,906(4) *
Richard T. Soper 506 *
William A. Thorne 32,906(4) *
Sergio B. Tobia 3,726 *
Louise B. Tollefson 3,506 *
Howard S. Tuthill, Trustee 1,911,211(7) 19.68%
--------- -----
All directors and officers as a
group (15 persons) 5,988,010(8) 61.65%
- ----------
* Less than 1% of issued and outstanding Common Stock.
(1) Mr. Blackman is also the Trustee of trusts for the benefit of his minor
children which own, in total, 92,822 shares of the Company's Common Stock, which
shares are included herein.
(2) Trusts for the benefit of Mr. Blackman's children own, in total, 54,876
shares of the Company's Common Stock, which shares are included herein.
(3) Of the shares shown as beneficially owned by the following individuals,
the amount listed next to each name include shares with respect to which options
are currently exercisable by that person: Mr. Mitchell - 7,000; Mr. Lambert -
17,055; Mrs. Cohen - 4,000; and Mr. Palmer - 7,000.
(4) Of the shares shown as beneficially owned by Mr. Thorne, 16,706 shares
are held by him individually and 16,200 shares are held by Mr. Thorne and his
wife as joint tenants. Of the shares shown as beneficially owned by Mr. Shaffet,
400 are held individually by his wife.
(5) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advsior, is deemed to have beneficial ownership of 619,800 shares of
NYMAGIC, INC. stock as of December 31, 1997, all of which shares are held in
portfolios of DFA Investment Dimensions Group, Inc., a registered open-end
investment company, or in series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, all of which
Dimensional Fund Advisors, Inc. serves as investment manager. Dimensional
disclaims beneficial ownership of all such shares.
27
<PAGE>
(6) T. Rowe Price Associates, Inc. has filed a report on Schedule 13G
disclosing beneficial ownership of 1,012,000 shares in total. T. Rowe Price
Associates, Inc. beneficially owns 512,000 and T. Rowe Price Small Cap Value
Fund, Inc. owns 500,000.
(7) Howard S. Tuthill, as Trustee of the Louise B. Tollefson Florida
Intangible Tax Trust, has filed a report on Schedule 13D disclosing ownership of
1,911,211 shares of Common Stock in connection with certain aspects of estate
and tax planning for Louise B. Tollefson.
(8) Of the 5,988,010 shares indicated as beneficially owned by all
directors and officers as a group, 35,055 shares with respect to which options
are currently exercisable. See "Compensation and Other Information-Stock Option
Plans". These shares are included in the total number of outstanding shares for
the purpose of determining the percentage of Common Stock beneficially owned by
all directors and officers as a group.
Item 13. Certain Relationships and Related Transactions.
The Company made annual charitable donations to the John N. Blackman, Sr.
Foundation (the "Foundation") in the amount of approximately $480,000 in each of
1997, 1996 and 1995. The Foundation was established by Mr. John N. Blackman,
Sr., the founder of the Company, shortly before his death in 1988. The
Foundation supports numerous charities with a primary emphasis on those
charities assisting the indigent, disabled or disadvantaged. The Foundation is
managed by Mr. John N. Blackman, Jr., Mr. Mark W. Blackman and Mr. James A.
Lambert, all of whom donate their time and receive no form of remuneration from
the Foundation.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) 1. Financial Statements
The list of financial statements appears in the accompanying
index on page 34.
2. Financial Statement Schedules
The list of financial statement schedules appears in the
accompanying index on page 34.
3. Exhibits
3.1. Charter. (Incorporated by reference to Exhibit 3-1 to the
Registrant's Registration Statement No. 33-27665).
3.3. By-laws.
4.0. Specimen Certificate of common stock (Incorporated by
reference to Exhibit 4 to the Registrant's Registration Statement No.
33-27665).
10.2. Restated Management Agreement dated as of January 1, 1986,
by and among Mutual Marine Office, Inc. and Arkwright-Boston
Manufacturers Mutual Insurance Company, Utica Mutual Insurance
Company, Lumber Mutual Insurance Company, the Registrant and
Pennsylvania National Mutual Casualty Insurance Company (Incorporated
by reference to Exhibit 10.2 of the Registrant's Annual Report Form
1O-K for the fiscal year ended December 31, 1986.)
10.2.2. Amendment to Restated Management Agreement, dated as
of December 30, 1988, and among Mutual Marine Office, Inc. and
Arkwright Mutual Insurance Company, Utica Mutual Insurance
Company, Lumber Mutual Insurance Company, the Registrant and
Pennsylvania National Mutual Casualty Insurance Company.
(Incorporated by reference to Exhibit 10.2.2. of the Registrant's
Report on Form 8-K dated January 6, 1989.)
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<PAGE>
10.2.3. Amendment to Restated Management Agreement, dated as
of December 31, 1990, and among Mutual Marine Office, Inc. and
Arkwright Mutual Insurance Company, Utica Mutual Insurance
Company, the Registrant and Pennsylvania National Mutual Casualty
Insurance Company. (Incorporated by reference to Exhibit 10.2.3.
of the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992.)
10.4. Restated Management Agreement dated as of January 1, 1986,
by and among Mutual Inland Marine Office, Inc. and Arkwright-Boston
Manufacturers Mutual Insurance Company, Utica Mutual Insurance
Company, Lumber Mutual Insurance Company, the Registrant and
Pennsylvania National Mutual Casualty Insurance Company (Incorporated
by reference to Exhibit 10.4 of the Registrant's Annual Report Form
10-K for the fiscal year ended December 31, 1986.)
10.4.2. Amendment to Restated Management Agreement, dated as
of December 30, 1988, and among Mutual Inland Marine Office, Inc.
and Arkwright Mutual Insurance Company, Utica Mutual Insurance
Company, Lumber Mutual Insurance Company, the Registrant and
Pennsylvania National Mutual Casualty Insurance Company
(Incorporated by reference to Exhibit 10.4.2 of the Registrant's
Report on Form 8-K, dated January 6, 1989.)
10.4.3. Amendment to Restated Management Agreement, dated as
of December 31, 1990, by and among Mutual Inland Marine Office,
Inc. and Arkwright Mutual Insurance Company, Utica Mutual
Insurance Company, the Registrant and Pennsylvania National
Mutual Casualty Insurance Company. (Incorporated by reference to
Exhibit 10.4.3. of the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992.)
10.6. Restated Management Agreement dated as of January 1, 1986,
by and among Mutual Marine Office of the Midwest, Inc. and
Arkwright-Boston Manufacturers Mutual Insurance Company, Utica Mutual
Insurance Company, Lumber Mutual Insurance Company, the Registrant and
Pennsylvania National Mutual Casualty Insurance Company. (Incorporated
by reference to Exhibit 10.6 of the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1986.)
10.6.2. Amendment to Restated Management Agreement dated as
of December 30, 1988, by and among Mutual Marine Office of the
Midwest, Inc. and Arkwright Mutual Insurance Company, Utica
Mutual Insurance Company, Lumber Mutual Insurance Company, the
Registrant and Pennsylvania National Mutual Casualty Insurance
Company. (Incorporated by reference to Exhibit 10.6.2 of the
Registrant's Report on Form 8-K, dated January 6, 1989.)
10.6.3. Amendment to Restated Management Agreement dated as
of December 31, 1990, by and among Mutual Marine Office of the
Midwest, Inc. and Arkwright Mutual Insurance Company, Utica
Mutual Insurance Company, the Registrant and Pennsylvania
National Mutual Casualty Insurance Company. (Incorporated by
reference to Exhibit 10.6.3. of the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992.)
10.8. Restated Management Agreement dated as of January 1, 1986,
by and among Pacific Mutual Marine Office, Inc. and Arkwright-Boston
Manufacturers Mutual Insurance Company, Lumber Mutual Insurance
Company, Utica Mutual Insurance Company, the Registrant and
Pennsylvania National Mutual Casualty Insurance Company. (Incorporated
by reference to Exhibit 10.8 of the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1986.)
10.8.2. Amendment to Restated Management Agreement dated as
of December 30, 1988, by and among Pacific Mutual Marine Office,
Inc. and Arkwright Mutual Insurance Company, Lumber Mutual
Insurance Company, Utica Mutual Insurance Company, the Registrant
and Pennsylvania National Mutual Casualty Insurance Company.
(Incorporated by reference to Exhibit 10.8.2 of the Registrant's
Report on Form 8-K, dated January 6, 1989.)
29
<PAGE>
10.8.3. Amendment to Restated Management Agreement dated as
of December 31, 1990, by and among Pacific Mutual Marine Office,
Inc. and Arkwright Mutual Insurance Company, Utica Mutual
Insurance Company, the Registrant and Pennsylvania National
Mutual Casualty Insurance Company. (Incorporated by reference to
Exhibit 10.8.3. of the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992.)
21. Subsidiaries of the Registrant.
23. Consent of KPMG Peat Marwick LLP.
28. Schedule P as of December 31, 1997.
(b) Reports on Form 8-K
None.
30
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
NYMAGIC, INC.
(Registrant)
By: /s/ Mark W. Blackman
-----------------------------
Mark W. Blackman
Chief Executive Officer
Date: March 11, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
Name Title Date
- ---- ----- ----
/s/ John N. Blackman, Jr. Chairman of the Board March 11, 1998
- ------------------------- and Director
John N. Blackman, Jr.
/s/ Mark W. Blackman President, Chief Executive March 11, 1998
- ------------------------- Officer and Director
Mark W. Blackman
/s/ Thomas J. Condon Director March 11, 1998
- -------------------------
Thomas J. Condon
/s/ Jean H. Goulding Director March 11, 1998
- -------------------------
Jean H. Goulding
/s/ John Kean, Jr. Director March 11, 1998
- -------------------------
John Kean, Jr.
/s/ James A. Lambert Director, General Counsel, March 11, 1998
- ------------------------- Chief Operating Officer
James A. Lambert and Secretary
31
<PAGE>
Name Title Date
- ---- ----- ----
/s/ Charles A. Mitchell Director and Vice President March 11, 1998
- -------------------------
Charles A. Mitchell
/s/ Michael S. Shaffet Director March 11, 1998
- -------------------------
Michael S. Shaffet
/s/ William R. Scarbrough Director March 11, 1998
- -------------------------
William R. Scarbrough
/s/ Richard T. Soper Director March 11, 1998
- -------------------------
Richard T. Soper
/s/ William A. Thorne Director March 11, 1998
- -------------------------
William A. Thorne
/s/ Sergio B. Tobia Director March 11, 1998
- -------------------------
Sergio B. Tobia
/s/ Louise B. Tollefson Director March 11, 1998
- -------------------------
Louise B. Tollefson
/s/ Thomas J. Iacopelli Principal Accounting Officer March 11, 1998
- ------------------------- and Chief Financial Officer
Thomas J. Iacopelli
32
<PAGE>
NYMAGIC, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditors' Report .............................................. 35
Consolidated Balance Sheets ............................................... 36
Consolidated Statements of Income ......................................... 37
Consolidated Statements of Shareholders' Equity ........................... 38
Consolidated Statements of Cash Flows ..................................... 39
Notes to Consolidated Financial Statements ................................ 40
Financial Statement Schedule II ........................................... 59
Financial Statement Schedule V ............................................ 61
Financial Statement Schedule VI ........................................... 62
34
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
NYMAGIC, INC.:
We have audited the accompanying consolidated balance sheets of NYMAGIC,
INC. and subsidiaries as of December 31, 1997 and 1996, and the related
consolidated statements of income, shareholders' equity, and cash flows for each
of the years in the three-year period ended December 31, 1997. In connection
with our audits of the consolidated financial statements, we have also audited
the financial statement schedules as listed in the accompanying index. These
consolidated financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and financial statement
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
NYMAGIC, INC. and subsidiaries as of December 31, 1997 and 1996, and the
consolidated results of their operations and their cash flows for each of the
years in the three-year period ended December 31, 1997 in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
KPMG Peat Marwick LLP
New York, New York
February 17, 1998
35
<PAGE>
NYMAGIC, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
------------------------------------
1997 1996
------------- -------------
<S> <C> <C>
ASSETS
Investments:
Fixed maturities available for sale at fair value
(amortized cost $352,696,745 and $341,130,292) ..................................... $ 361,249,758 $ 345,483,129
Equity securities at fair value
(cost $47,925,798 and $37,161,709) ................................................. 59,258,608 45,348,736
Short-term investments ............................................................... 18,082,540 18,377,180
------------- -------------
Total investments .................................................................. 438,590,906 409,209,045
------------- -------------
Cash ................................................................................. 1,042,310 701,086
Accrued investment income ............................................................ 6,322,370 5,960,197
Premiums and other receivables, net .................................................. 40,635,164 63,039,393
Reinsurance receivables .............................................................. 175,657,952 197,988,073
Deferred policy acquisition costs .................................................... 5,567,488 10,904,241
Prepaid reinsurance premiums ......................................................... 24,414,620 10,562,213
Deferred income taxes ................................................................ 8,436,768 11,131,603
Property, improvements & equipment, net .............................................. 2,365,653 2,107,087
Other assets ......................................................................... 4,869,609 3,345,826
------------- -------------
Total assets ....................................................................... $ 707,902,840 $ 714,948,764
============= =============
LIABILITIES
Unpaid losses and loss adjustment expenses ........................................... $ 388,401,548 $ 411,836,981
Reserve for unearned premiums ........................................................ 55,188,281 66,651,933
Ceded reinsurance payable ............................................................ 27,307,129 19,753,943
Notes payable ........................................................................ 22,458,413 20,438,413
Other liabilities .................................................................... 7,062,095 6,401,463
Dividends payable .................................................................... 966,031 1,014,305
------------- -------------
Total liabilities .................................................................. 501,383,497 526,097,038
------------- -------------
SHAREHOLDERS' EQUITY
Common stock ......................................................................... 14,991,992 14,911,992
Paid-in capital ...................................................................... 27,529,877 26,258,259
Unrealized appreciation of investments
(net of deferred income taxes) ..................................................... 12,925,785 8,150,910
Foreign currency adjustment .......................................................... 6,000 --
Retained earnings .................................................................... 193,547,346 171,089,462
------------- -------------
249,001,000 220,410,623
Treasury stock, at cost, 5,331,686 and 4,768,940
shares ............................................................................... (42,481,657) (31,558,897)
------------- -------------
Total shareholders' equity ......................................................... 206,519,343 188,851,726
------------- -------------
Total liabilities and shareholders' equity ......................................... $ 707,902,840 $ 714,948,764
============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
36
<PAGE>
NYMAGIC, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------------------------------
1997 1996 1995
------------------------------------------------------------
<S> <C> <C> <C>
Revenue:
Net premiums earned ..................................... $ 87,536,906 $ 97,036,021 $103,461,499
Commission income ....................................... 1,438,606 1,980,632 3,438,418
Net investment income ................................... 21,325,065 21,270,194 21,658,931
Realized investment gains ............................... 10,425,133 4,589,133 4,110,515
Other income ............................................ 292,918 689,641 660,924
------------ ------------ ------------
Total revenues ........................................ 121,018,628 125,565,621 133,330,287
Expenses:
Losses and loss adjustment expenses
incurred ............................................... 50,768,248 59,358,857 69,716,186
Policy acquisition expenses ............................. 16,582,623 18,827,794 21,017,503
General and administrative expenses ..................... 16,763,699 16,168,162 16,236,323
Interest expense ........................................ 1,449,770 1,035,058 437,653
------------ ------------ ------------
Total expenses ........................................ 85,564,340 95,389,871 107,407,665
------------ ------------ ------------
Income before income taxes ................................. 35,454,288 30,175,750 25,922,622
------------ ------------ ------------
Income tax provision:
Current ................................................. 8,962,799 7,494,593 5,392,637
Deferred ................................................ 123,749 56,539 410,123
------------ ------------ ------------
Total income taxes .................................... 9,086,548 7,551,132 5,802,760
------------ ------------ ------------
Net income .............................................. $ 26,367,740 $ 22,624,618 $ 20,119,862
============ ============ ============
Weighted average number of shares of
common stock outstanding-basic ............................ 9,848,959 10,499,366 11,298,746
============ ============ ============
Basic earnings per share ................................... $2.68 $2.15 $1.78
============ ============ ============
Weighted average number of shares of
common stock outstanding-diluted ........................ 9,871,586 10,523,996 11,341,370
============ ============ ============
Diluted earnings per share ................................. $2.67 $2.15 $1.77
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
37
<PAGE>
NYMAGIC, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------------------------------------
1997 1996 1995
------------- ------------- -------------
<S> <C> <C> <C>
Common stock, authorized shares,
par value $1 each ..................................................... 30,000,000 30,000,000 30,000,000
============= ============= =============
Balance, beginning of period .......................................... $ 14,911,992 $ 14,749,192 $ 14,747,292
Shares issued ......................................................... 80,000 162,800 1,900
------------- ------------- -------------
Balance, end of period ........................................ 14,991,992 14,911,992 14,749,192
------------- ------------- -------------
Paid-in capital:
Balance, beginning of period .......................................... 26,258,259 23,933,587 23,736,024
Shares issued ......................................................... 1,271,618 2,324,672 197,563
------------- ------------- -------------
Balance, end of period ........................................ 27,529,877 26,258,259 23,933,587
------------- ------------- -------------
Unrealized appreciation (depreciation) of investments:
Balance, beginning of period .......................................... 8,150,910 9,865,486 (4,132,749)
Net change during period .............................................. 7,345,961 (2,637,810) 21,439,413
Applicable deferred income taxes on the
change ................................................................ (2,571,086) 923,234 (7,441,178)
------------- ------------- -------------
Balance, end of period ........................................ 12,925,785 8,150,910 9,865,486
------------- ------------- -------------
Retained earnings:
Balance, beginning of period .......................................... 171,089,462 152,646,915 137,000,454
Net income ............................................................ 26,367,740 22,624,618 20,119,862
Dividends declared .................................................... (3,909,856) (4,182,071) (4,473,401)
------------- ------------- -------------
Balance, end of period ........................................... 193,547,346 171,089,462 152,646,915
------------- ------------- -------------
Treasury stock:
Balance, beginning of period .......................................... (31,558,897) (18,478,576) (7,037,640)
Net repurchase of common stock ........................................ (10,922,760) (13,080,321) (11,440,936)
------------- ------------- -------------
Balance, end of period ........................................ $ (42,481,657) $ (31,558,897) $ (18,478,576)
============= ============= =============
Number of Shares
Common stock, par value $1 each:
Issued, beginning of period ......................................... 14,911,992 14,749,192 14,747,292
Shares Issued ....................................................... 80,000 162,800 1,900
------------- ------------- -------------
Issued, end of period ............................................... 14,991,992 14,911,992 14,749,192
============= ============= =============
Common stock, shares outstanding .................................... 9,660,306 10,143,052 10,691,812
============= ============= =============
Dividends declared per share ........................................ $.40 .40 $.40
============= ============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
38
<PAGE>
NYMAGIC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------------------------------------------
1997 1996 1995
-----------------------------------------------------------
Cash flows from operating activities:
<S> <C> <C> <C>
Net income ................................................. $ 26,367,740 $ 22,624,618 $ 20,119,862
------------- ------------- -------------
Adjustments to reconcile net income to
net cash provided by operating
activities:
Provision for deferred taxes ............................ 123,749 56,539 410,123
Realized investment gains ............................... (10,425,133) (4,589,133) (4,110,515)
Net bond amortization ................................... 1,895,355 1,933,151 1,492,577
Depreciation and other, net ............................. 582,126 442,945 520,011
Changes in:
Premiums and other receivables .......................... 22,404,229 6,641,818 13,545,283
Reinsurance receivables ................................. 22,330,121 (592,384) 41,589,294
Ceded reinsurance payable ............................... 7,553,186 3,327,596 (8,331,820)
Accrued investment income ............................... (362,173) 150,205 (359,831)
Deferred policy acquisition costs ....................... 5,336,753 756,662 1,797,197
Prepaid reinsurance premiums ............................ (13,852,407) 6,394,228 6,202,940
Other assets ............................................ (1,523,783) 80,157 (59,531)
Unpaid losses and loss adjustment
expenses .............................................. (23,435,433) (5,957,544) (17,277,135)
Reserve for unearned premiums ........................... (11,463,652) (12,917,022) (11,847,234)
Foreign currency adjustment ............................. 6,000 -- --
Other liabilities ....................................... 660,632 (5,546,174) 4,920,993
------------- ------------- -------------
Total adjustments ................................... (170,430) (9,818,956) 28,492,352
------------- ------------- -------------
Net cash provided by operating activities .................. 26,197,310 12,805,662 48,612,214
------------- ------------- -------------
Cash flows from investing activities:
Fixed maturities acquired ............................... (205,891,607) (231,515,433) (272,053,730)
Equity securities acquired .............................. (50,578,073) (37,880,911) (21,224,924)
Short-term investments sold or matured .................. 239,532,269 631,722,760 835,378,875
Short-term investments acquired ......................... (239,353,753) (609,264,339) (844,049,317)
Fixed maturities matured ................................ 25,059,072 36,302,944 33,726,487
Fixed maturities sold ................................... 167,867,245 171,112,392 209,230,556
Equity securities sold .................................. 49,858,725 33,637,805 21,385,913
Acquisition of property & equipment, net ................ (840,692) (276,494) (121,852)
------------- ------------- -------------
Net cash used in investing activities ...................... (14,346,814) (6,161,276) (37,727,992)
------------- ------------- -------------
Cash flows from financing activities:
Proceeds from stock issuance ............................ 1,351,618 2,487,472 199,463
Cash dividends paid to stockholders ..................... (3,958,130) (4,236,947) (4,542,123)
Net repurchase of common stock .......................... (10,922,760) (13,080,321) (11,440,936)
Proceeds from borrowings ................................ 9,520,000 14,211,472 15,118,449
Loan principal payments ................................. (7,500,000) (6,500,000) (9,411,764)
------------- ------------- -------------
Net cash used in financing activities ................... (11,509,272) (7,118,324) (10,076,911)
Net increase (decrease) in cash ............................ 341,224 (473,938) 807,311
Cash at beginning of year ............................... 701,086 1,175,024 367,713
------------- ------------- -------------
Cash at end of year ..................................... $ 1,042,310 $ 701,086 $ 1,175,024
============= ============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
39
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Summary Of Significant Accounting Policies:
Nature of Operations
NYMAGIC, through its subsidiaries, specializes in underwriting ocean
marine, inland marine, aviation and other liability insurance through insurance
pools managed by Mutual Marine Office, Inc. - ("MMO"), Pacific Mutual Marine
Office, Inc. - ("PMMO"), and Mutual Marine Office of the Midwest, Inc. -
("Midwest"). MMO, located in New York, PMMO located in San Francisco, and
Midwest, located in Chicago, manage the insurance pools in which the Company's
insurance subsidiaries, New York Marine and General Insurance Company - ("New
York Marine") and Gotham Insurance Company ("Gotham"), participate. All
premiums, losses and expenses are prorated among pool members in accordance with
their pool participation percentages. Effective July 1, 1994, the Company
increased to 90.00% its participation in the ocean marine and aviation business
produced by the pools and to 100% its participation in the other liability and
inland marine business produced by the pools. Effective January 1, 1997, the
Company increased to 100% its participation in the ocean marine and aviation
business produced by the pools. Substantially all of the Company's premiums for
the last three years have resulted from participation in the insurance pools
managed by MMO and affiliates.
On December 31, 1997, the Company acquired 100% of the stock of Highgate
Managing Agency, a Lloyd's of London underwriting agent for a nominal amount and
renamed the Company MMO Underwriting Agency Ltd (MMO UA). The acquisition was
accounted for under the purchase method of accounting. Pro forma results of
operations have been omitted from the statements of income as such amounts are
considered immaterial. In 1997 , The Company formed MMO EU Ltd, a holding
company, and MMO UK LTD, a Lloyd's of London corporate vehicle for Lloyd's
Syndicate 1265. The assets and liabilities of MMO EU, MMO UK and MMO UA are
included in the consolidated balance sheet.
Basis of Reporting
The consolidated financial statements have been prepared on the basis of
generally accepted accounting principles which differ in certain material
respects from the accounting principles prescribed or permitted by state
insurance regulatory authorities for the Company's two insurance subsidiaries.
The principal differences recorded under generally accepted accounting
principles are deferred policy acquisition costs, an allowance for doubtful
accounts, fixed maturities held for sale are carried at fair value and deferred
income taxes.
Generally accepted accounting principles also require management to make
estimates that affect the reported amounts of assets, liabilities, revenues and
expenses. Actual amounts could differ from those amounts previously estimated.
Consolidation
The consolidated financial statements include the accounts of the Company,
two insurance subsidiaries, New York Marine and Gotham, three agency
subsidiaries collectively referred to as ("MMO") and the Company's UK
operations. Gotham is owned 25% by the Company and 75% by New York Marine. All
other subsidiaries are wholly owned. All intercompany accounts and transactions
have been eliminated in consolidation.
40
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Investments
Fixed maturities held for sale are carried at fair value and include those
bonds where the Company's intent to carry such investments to maturity may be
affected in future periods by changes in market interest rates or tax position.
Equity securities (common stocks and non-redeemable preferred stocks) are
carried at fair value. Short-term investments are carried at cost which
approximates fair value. Fair value is based upon quotes obtained from
independent sources.
Realized investment gains and losses (determined on the basis of specific
identified cost), also include any declines in value which are considered to be
other than temporary. Unrealized appreciation or depreciation of investments,
net of related deferred income taxes, is reflected in shareholders' equity.
In November, 1995, the Financial Accounting Standards Board ("FASB") issued
a report entitled "A Guide to Implementation of Statement 115 on Accounting for
Certain Investments in Debt and Equity Securities," which allowed companies to
reassess the classifications of all securities held and permitted transfers
among classifications, prior to December 31, 1995, without tainting the
securities' previous classification. Accordingly, the Company transferred the
entire fixed maturities held for investment portfolio at December 1, 1995 at a
fair value of $89.6 million into the available for sale account. The effect of
the transfer at December 1, 1995 was to increase shareholders' equity by $2.7
million without an effect on net income.
Premium and policy acquisition cost recognition
Premiums and policy acquisition costs are reflected in income and expense
on a monthly pro rata basis over the terms of the respective policies.
Accordingly, unearned premium reserves are established for the portion of
premiums written applicable to unexpired policies in force, and acquisition
costs, consisting mainly of net brokerage commissions and premium taxes,
relating to these unearned premiums are deferred to the extent recoverable. The
Company has provided an allowance for uncollectible premium receivables of
$700,000 and $750,000 as of December 31, 1997 and 1996, respectively. The
determination of acquisition costs to be deferred considers historical and
current loss and loss adjustment expense experience. Consideration is also given
to anticipated investment income in measuring the carrying value of deferred
policy acquisition costs.
Revenue recognition
Management commission income on policies written by the MMO insurance pools
is recognized primarily as of the effective date of the policies issued.
Adjustments to the policies, resulting principally from changes in coverage and
audit adjustments, are recorded in the period reported.
Contingent profit commission revenue derived from the reinsurance
transactions of the insurance pools is recognized when such amount becomes
billable to the respective reinsurers.
Reinsurance
The Company's insurance subsidiaries participate in various reinsurance
agreements on both an assumed and ceded basis through the MMO insurance pools.
The Company uses various types of reinsurance including quota-share, excess of
loss and facultative agreements to spread the risk of loss among several
reinsurers and to limit its exposure from losses on any one occurrence. Any
recoverable due from reinsurers is recorded in the period in which the related
gross liability is established.
41
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
The Company accounts for reinsurance in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 113, "Accounting and Reporting for
Reinsurance of Short and Long Duration Contracts" (SFAS 113). SFAS 113 defines
the requirements for a contract to be considered reinsurance and requires assets
and liabilities relating to reinsurance contracts to be reported gross of
reinsurance.
Depreciation
Property, equipment and leasehold improvements are depreciated using both
straightline and accelerated methods over their useful lives.
Income Taxes
The Company provides deferred income taxes on temporary differences between
the financial reporting basis and the tax basis of the Company's assets and
liabilities in accordance with SFAS No. 109 "Accounting for Income Taxes."
Fair Values of Financial Instruments
The fair value of the Company's fixed maturity investments is disclosed in
Note 2. The Company's other financial instruments include short-term
receivables, notes payable and other payables which are recorded at the
underlying transaction value and approximate fair value.
Goodwill
The excess of purchase price over the fair value of net assets acquired is
amortized to income on a straight -line basis over five years.
Foreign currency translation
The assets and liabilities of the Company's UK operations, expressed in
Pounds Sterling, are translated to U.S. dollars at exchange rates in effect at
the balance sheet date and the resulting adjustments are recorded as a separate
component of Shareholders' Equity.
Incurred losses
Unpaid losses are based on individual case estimates for losses reported. A
provision is also included, based on past experience, for losses incurred but
not reported, salvage and subrogation recoveries and for loss adjustment
expenses. The method of making such estimates and for establishing the resulting
reserves is continually reviewed and updated and any changes resulting therefrom
are reflected in operating results currently.
42
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
Basic and diluted earnings per share
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share,"
("SFAS 128"), which specifies the computation, presentation and disclosure
requirements of earnings per share (EPS) for companies with publicly owned
common stock or potential common stock and supersedes the accounting
requirements of APB Opinion No. 15, "Earnings Per Share." The Company's stock
options are considered potential common stock under SFAS 128. SFAS 128 also
requires the dual presentation of "basic EPS" and "diluted EPS."
SFAS 128 is effective for financial statements for both interim and annual
periods ending after December 15, 1997. Accordingly, all prior period EPS data
reported herein has been restated to conform with SFAS 128.
Basic EPS is calculated by dividing net income by the weighted average
number of common shares outstanding during the year. Diluted EPS is calculated
by dividing net income by the weighted average number of common shares
outstanding during the year and the dilutive effect of assumed stock option
exercises. See Note 11 for a reconciliation of the shares outstanding in
determining basic and diluted EPS.
Reclassification
Certain accounts in the prior year's financial statements have been
reclassified to conform to their 1997 presentation.
Effects of recent accounting pronouncements
The FASB issued SFAS No. 130, "Reporting Comprehensive Income," ("SFAS
130"), in June 1997 which establishes standards for the reporting and
presentation of comprehensive income and its components. Comprehensive income
encompasses all changes in shareholders' equity, except those arising from
transactions with owners, and includes net income, net unrealized capital gains
or losses on available for sale securities and foreign currency translation
adjustments. SFAS 130 is effective for fiscal years beginning after December 15,
1997, with earlier application permitted. The Company is currently evaluating
the presentation alternatives permitted by the statement.
The FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," ("SFAS 131"), in June 1997 which establishes standards
for the reporting of information relating to operating segments in annual
financial statements, as well as disclosure of selected information in interim
financial reports. Operating segments are defined as components of a company for
which separate financial information is available and is used by management to
allocate resources and assess performance. The statement supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise," which requires
reporting segment information by industry and geographic area. This statement is
effective for year-end 1998 financial statements, and interim financial
information will be required beginning in 1999. The Company is currently
evaluating the segment information disclosure pursuant to SFAS 131.
43
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
(2) Investments:
A summary of investment components at December 31, 1997 consists of the
following:
<TABLE>
<CAPTION>
Amount at which
Fair shown in the
Type of Investment Cost Value balance sheet
- ------------------ ------------ ------------ -------------
<S> <C> <C> <C>
Fixed maturities available for sale:
Bonds:
United States Government and
government agencies and
authorities .......................................... $101,491,865 $102,945,945 $102,945,945
States, municipalities and
political subdivisions ............................... 219,788,108 226,044,611 226,044,611
Public utilities ..................................... 18,003,038 18,522,005 18,522,005
All other corporate bonds ................................ 13,413,734 13,737,197 13,737,197
------------ ------------ ------------
Total fixed maturities
available for sale ................................. 352,696,745 361,249,758 361,249,758
------------ ------------ ------------
Equity securities:
Common stocks:
Public utilities ........................................... 2,673,124 3,203,122 3,203,122
Banks, trusts and insurance
companies ................................................ 4,036,308 4,819,806 4,819,806
Industrial, miscellaneous and
all other ................................................ 41,069,366 51,043,305 51,043,305
Non-redeemable preferred stock ............................. 147,000 192,375 192,375
------------ ------------ ------------
Total equity securities .................................. 47,925,798 59,258,608 59,258,608
------------ ------------ ------------
Short term investments ..................................... 18,082,540 18,082,540 18,082,540
------------ ------------ ------------
Total investments ........................................ $418,705,083 $438,590,906 $438,590,906
============ ============ ============
</TABLE>
Unrealized depreciation or appreciation of investments (before applicable
income taxes) at December 31, 1997 and 1996 included gross unrealized gains on
equity securities of $12,276,631 and $8,754,704, respectively; and gross
unrealized losses on equity securities of $943,821 and $567,677, respectively;
and gross unrealized gains on fixed maturities available for sale of $8,601,011
and $5,537,330 at December 31, 1997 and 1996, respectively; and gross unrealized
losses on fixed maturities available for sale of $47,998 and $1,184,493 as of
December 31, 1997 and 1996, respectively.
Included in investments at December 31, 1997 are bonds on deposit with
various regulatory authorities as required by law with a fair value of
$8,870,200.
There were no non-income producing fixed maturity investments for each of
the years ended December 31, 1997, 1996 and 1995.
All mortgage backed securities available as of December 31, 1997 and 1996
are obligations of various U.S. Government agencies and consist of GNMA, FHLMC
or FNMA pass through securities. These securities are readily marketable.
44
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
The gross unrealized gains and losses on debt securities as of December 31,
1997 and 1996 are as follows:
<TABLE>
<CAPTION>
1997
-------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Fixed maturities available for sale:
US Treasury securities and
obligations of US government
corporations and agencies ....................... $101,491,865 $ 1,483,761 $ (29,681) $102,945,945
Obligations of states and
political subdivisions .......................... 219,788,108 6,257,453 (950) 226,044,611
Corporate securities .............................. 31,416,772 859,797 (17,367) 32,259,202
------------ ------------ ------------ ------------
Totals ........................................ $352,696,745 $ 8,601,011 $ (47,998) 361,249,758
============ ============ ============ ============
<CAPTION>
1996
-------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Fixed maturities available for sale:
US Treasury securities and
obligations of US government
corporations and agencies ....................... $ 91,871,356 $ 314,995 $ (634,327) $ 91,552,024
Obligations of states and
political subdivisions .......................... 188,150,708 4,458,433 (299,641) 192,309,500
Corporate securities .............................. 61,108,228 763,902 (250,525) 61,621,605
------------ ------------ ------------ ------------
Totals ........................................ $341,130,292 $ 5,537,330 $ (1,184,493) $345,483,129
============ ============ ============ ============
</TABLE>
45
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
The amortized cost and fair value of debt securities at December 31, 1997,
by contractual maturity, are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
Fixed maturities available
for sale
--------------------------------
Amortized Fair
Cost Value
------------ ------------
Due in one year or less ................ $ 24,563,680 $ 24,653,035
Due after one year
through five years ..................... 102,214,605 104,868,192
Due after five years
through ten years ...................... 115,972,146 119,296,900
Due after ten years .................... 69,636,609 71,192,336
------------ ------------
312,387,040 320,010,463
Mortgage backed securities ............. 40,309,705 41,239,295
------------ ------------
Totals ............................... $352,696,745 $361,249,758
============ ============
46
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
Proceeds from sales of investments in debt securities during 1997, 1996 and
1995 were $167,867,245, $171,112,392 and $209,230,556, respectively. Gross gains
of $1,365,460, $1,121,305 and $2,324,039 and gross losses of $ 868,944,
$1,437,369 and $ 1,330,386 were realized on the those sales in 1997, 1996 and
1995, respectively.
Realized and unrealized investment appreciation (depreciation) on fixed
maturities and equity securities for the years ended December 31, 1997, 1996 and
1995 are as follows:
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------------------
1997 1996 1995
----------------------------------------------------------
<S> <C> <C> <C>
Realized gains (losses) on sale
of investments
Fixed maturities ............................................ $ 496,516 $ (316,064) $ 993,653
Equity securities ........................................... 10,044,741 4,931,909 3,089,104
Short-term investments ...................................... (116,124) (26,712) 27,758
------------ ------------ ------------
Realized investments gains .................................. 10,425,133 4,589,133 4,110,515
Less: applicable income taxes ............................... (3,648,797) (1,606,197) (1,438,680)
------------ ------------ ------------
Net realized investment gains ................................. $ 6,776,336 $ 2,982,936 $ 2,671,835
============ ============ ============
Change in unrealized investment appreciation
(depreciation) of securities:
Fixed maturities ............................................ $ 4,200,177 $ (5,017,118) $ 15,368,821
Equity securities ........................................... 3,145,784 2,379,308 5,059,901
------------ ------------ ------------
Unrealized investment gains (losses) ........................ 7,345,961 (2,637,810) 20,428,722
Less: applicable deferred income taxes ..................... (2,571,086) 923,234 (7,150,053)
------------ ------------ ------------
Net unrealized investment gains (losses) .................... $ 4,774,875 $ (1,714,576) $ 13,278,669
============ ============ ============
</TABLE>
Net investment income from each major category of investments for the years
indicated is as follows:
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------------------
1997 1996 1995
----------------------------------------------------------
<S> <C> <C> <C>
Fixed maturities ............................................... $ 20,192,031 $ 19,938,840 $ 19,933,777
Short-term investments ......................................... 1,089,128 1,316,992 1,779,497
Equity securities .............................................. 814,341 734,939 678,038
------------ ------------ ------------
Total investment income ...................................... 22,095,500 21,990,771 22,391,312
Investment expenses ............................................ (770,435) (720,577) (732,381)
------------ ------------ ------------
Net investment income ........................................ $ 21,325,065 $ 21,270,194 $ 21,658,931
============ ============ ============
</TABLE>
47
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
(3) Fiduciary Funds:
The Company's insurance agency subsidiaries maintain separate underwriting
accounts which record all the underlying insurance transactions of the insurance
pools which they manage. These transactions primarily include collecting
premiums from the insured, collecting paid recoverables from reinsurers, paying
claims as losses become payable, paying reinsurance premiums to reinsurers and
remitting net account balances to member insurance companies in the pools which
MMO manages. Unremitted amounts to members of the insurance pools are held in a
fiduciary capacity and interest income earned on such funds inure to the benefit
of the members of the insurance pools based on their pro-rata participation in
the pool.
A summary of the underwriting accounts as of December 31, 1997 and 1996 is
as follows:
December 31,
-----------------------------
1997 1996
----------- -----------
Cash and short-term investments ............ $ 3,276,115 $ 3,554,109
Premiums receivable ........................ 41,537,562 50,372,575
Reinsurance and other recoverables ......... 23,942,068 34,366,554
----------- -----------
Total Assets ............................... $68,755,745 $88,293,238
=========== ===========
Due to insurance pool members .............. $27,251,208 $57,991,694
Reinsurance payable ........................ 31,984,380 22,815,569
Funds withheld from reinsurers ............. 5,043,576 2,756,157
Other liabilities .......................... 4,476,581 4,729,818
----------- -----------
Total Liabilities .......................... $68,755,745 $88,293,238
=========== ===========
The underwriting accounts above are not included in the accompanying
consolidated balance sheets.
48
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
(4) Insurance Operations:
Reinsurance Transactions
Approximately 50%, 42% and 47% of the Company's insurance subsidiaries'
direct and assumed gross premiums written for the years ended December 31, 1997,
1996 and 1995, respectively, have been reinsured by the pools with other
companies on both a treaty and a facultative basis.
In the event that all or any of the pool companies might be unable to meet
their obligations to the pools, the remaining companies would be liable for such
defaulted amounts on a pro rata pool participation basis. A contingent liability
also exists with respect to reinsurance ceded since such transactions generally
do not relieve the Company of its primary obligation to the policyholder and
such reinsurance ceded would become a liability of the Company's insurance
subsidiaries in the event that any reinsurer might be unable to meet the
obligations assumed under the reinsurance agreements. All reinsurers must meet
certain minimum standards of financial condition as established by the pools.
The Company's largest reinsurers at December 31, 1997, were Arkwright Mutual
Insurance Company ("Arkwright"), Lloyd's of London ("Lloyd's") and Utica Mutual
Insurance Company ("Utica Mutual"), with aggregate recoverables of $38 million,
$15 million and $14 million, respectively. The 1997 A.M. Best ratings for
Arkwright and Utica Mutual are A+ and A, respectively. Lloyd's of London
maintains a trust fund which was established for the benefit of all United
States ceding companies. Lloyd's has reported substantial losses in recent
years; however, the Company has not experienced difficulty in collecting amounts
due from Lloyd's and the settlement of recoverables due the Company has not
materially impacted its liquidity. In 1996 Equitas was formed to handle the
run-off of years 1992 and prior for Lloyd's. However, given the uncertainty
surrounding the sufficiency of assets in Equitas to meet its ultimate
obligations, there is a reasonable possibility that the Company's collection
efforts relating to its Lloyd's recoverables might be adversely affected in the
future. The Company's exposure to reinsurers, other than Arkwright, Lloyds and
Utica Mutual include reinsurance recoverables collectively from approximately
800 reinsurers or syndicates, and as of December 31, 1997, no single one of
which was liable to the Company for an unsecured amount in excess of
approximately $3.0 million.
Funds withheld and letters of credit obtained under various reinsurance
treaties amounted to approximately $62 million as of December 31, 1997.
Reinsurance receivables as of December 31, 1997 and 1996 included an allowance
for uncollectible reinsurance recoverables of $5,785,000 and $4,075,000
respectively.
49
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
Reinsurance ceded and assumed relating to premiums written were as follows:
Gross Ceded Assumed
(direct) to other from other
Year Ended amount companies companies Net amount
- ---------- ------ --------- --------- ----------
December 31, 1997 $89,396,181 $61,728,408 $34,553,074 $62,220,847
December 31, 1996 113,566,184 64,752,583 41,699,626 90,513,227
December 31, 1995 150,647,712 87,527,861 34,697,354 97,817,205
Reinsurance ceded and assumed relating to premiums earned were as
follows:
<TABLE>
<CAPTION>
Gross Ceded Assumed Percentage
(direct) to other from other of assumed
Year Ended amount companies companies Net amount to net
- ---------- ------ --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
December 31, 1997 $97,920,323 $47,875,999 $37,492,582 $87,536,906 43%
December 31, 1996 128,483,112 71,146,813 39,699,722 97,036,021 41
December 31, 1995 164,713,618 93,730,801 32,478,682 103,461,499 31
</TABLE>
Losses and loss adjustment expenses incurred are net of ceded reinsurance
recoveries amounting to $26,912,355, $62,516,373 and $22,138,211 for the years
ended December 31, 1997, 1996 and 1995, respectively.
Unpaid Losses
Unpaid losses are based on individual case estimates for losses reported
and include a provision for losses incurred but not reported and for loss
adjustment expenses. The following table provides a reconciliation of the
consolidated liability for losses and loss adjustment expenses at the beginning
and end of 1997, 1996 and 1995:
<TABLE>
<CAPTION>
Year ended December 31,
-------------------------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Net liability for losses and loss adjustment (in thousands)
expenses at beginning of year ........................................ $ 227,370 $ 229,916 $ 212,377
--------- --------- ---------
Provision for losses and loss adjustment
expenses occurring in current year .................................... 72,322 71,731 75,618
Decrease in estimated losses and loss
adjustment expenses for claims occurring
in prior years (1) ................................................... (21,874) (12,753) (6,360)
Deferred income-loss portfolio
assumption(2) ........................................................ 320 381 458
--------- --------- ---------
Total losses and loss adjustment expenses incurred ..................... 50,768 59,359 69,716
--------- --------- ---------
Less:
Losses and loss adjustment expense payments
for claims occurring during:
current year ........................................................ 17,029 15,012 10,043
prior years ......................................................... 38,454 46,512 41,676
--------- --------- ---------
55,483 61,524 51,719
Add:
Deferred income-loss portfolio assumption (2) .......................... (320) (381) (458)
--------- --------- ---------
Net Liability for losses and loss adjustment
expenses at year end ................................................. 222,335 227,370 229,916
--------- --------- ---------
Ceded unpaid loss and loss adjustment
expenses .............................................................. 166,067 184,467 187,879
--------- --------- ---------
Gross unpaid losses and loss adjustment
expenses at year end ................................................. $ 388,402 $ 411,837 $ 417,795
========= ========= =========
</TABLE>
50
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
(1)The adjustment to the consolidated liability for losses and loss
adjustment expenses for losses occurring in prior years reflects the net effect
of the resolution of losses for other than full reserve value and subsequent
readjustments of loss values.
(2)Deferred income loss portfolio assumption represents the difference
between cash received and unpaid loss reserves assumed as a result of the buyout
of Pennsylvania National's and Lumber Mutual's net pool obligations which was
initially capitalized and will be amortized over the payout period of the
related losses.
The insurance pools participated in the issuance of umbrella casualty
insurance for various Fortune 1000 companies in the period from 1978 to 1983.
Depending on the accident year, the insurance pools' maximum retention per
occurrence ranged from $250,000 to $500,000. The Company's effective pool
participation on such risks varied from 11% in 1978 to 30% in 1983. At December
31, 1997 and 1996, the Company's gross, ceded and net loss and loss adjustment
expense reserves for Asbestos/Pollution policies amounted to $25.0 million,
$16.0 million and $9.0 million, and $23.5 million, $15.0 million and $8.5
million, respectively. Net paid losses resulting from Asbestos/Pollution losses
during 1997, 1996 and 1995 amounted to $508,000, $811,000 and $545,000,
respectively. As of December 31, 1997, the Company had approximately 430
policies which had at least one claim relating to Asbestos/Pollution exposures.
Unpaid losses and loss adjustment expenses are recorded for reported claims
regarding Asbestos/Pollution exposures, including the cost of litigation
expenses, when sufficient information is present to indicate the involvement of
a specific insurance policy and the Company can reasonably estimate this
liability. The Company believes that the uncertainty surrounding
Asbestos/Pollution exposures, including issues as to insureds' liabilities,
ascertainment of loss date, definitions of occurrence, scope of coverage, policy
limits and application and interpretation of policy terms, including exclusions,
all affect the estimation of ultimate losses. Under such circumstances, it is
difficult to determine the ultimate loss for Asbestos/Pollution related claims.
Given the uncertainty in this area, losses from Asbestos/Pollution related
claims are likely to adversely impact the Company's results from operations in
future years and may vary materially from such reserves reported as of December
31, 1997. However, the Company believes that, in aggregate, the unpaid loss and
loss adjustment expense reserves as of December 31, 1997, allow for an adequate
provision and that the ultimate resolution of the Asbestos/Pollution claims will
not have a material impact on the Company's financial position.
Salvage and Subrogation
Estimates of salvage and subrogation recoveries on paid and unpaid losses
have been recorded as a reduction of unpaid losses amounting to $6,833,720 and
$6,888,733 at December 31, 1997 and 1996, respectively.
Deferred Policy Acquisition Costs
Deferrable acquisition costs amortized to income amounted to $16,582,623,
$18,827,794, and $21,017,503 for the years ended December 31, 1997, 1996 and
1995, respectively.
51
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
(5) Property, Improvements and Equipment, Net:
Property improvements and equipment, net at December 31, 1997 and 1996
include the following.
1997 1996
----------- -----------
Office furniture and equipment ............... $ 1,452,923 $ 1,335,519
Computer equipment ........................... 1,916,493 1,346,960
Leasehold improvements ....................... 2,409,683 2,255,928
----------- -----------
5,779,099 4,938,407
Less: accumulated depreciation
and amortization ......................... (3,413,446) (2,831,320)
----------- -----------
Property, improvements and equipment, net .... $ 2,365,653 $ 2,107,087
=========== ===========
Depreciation and amortization expense for the years ended December 31,
1997, 1996 and 1995 amounted to $582,126, $442,945 and $520,011, respectively.
(6) Income Taxes:
The components of deferred tax assets and liabilities as of December 31,
1997 and 1996 are as follows:
December 31,
---------------------------
1997 1996
---------------------------
Deferred Tax Assets:
Loss reserve discounting ....................... $13,549,308 $14,390,810
Unearned premiums .............................. 2,154,156 3,926,280
State and local income tax carryforward ........ 423,300 68,748
Deferred rent liability ........................ 410,237 446,258
Bad debt reserve ............................... 2,269,750 1,688,750
Other .......................................... 319,945 331,643
----------- -----------
Total deferred tax assets ...................... 19,126,696 20,852,489
----------- -----------
52
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
Deferred Tax Liabilities:
December 31,
--------------------------
1997 1996
--------------------------
Deferred policy acquisition costs .............. 1,948,621 3,816,484
Unrealized appreciation of investments ......... 6,960,037 4,388,952
Deferred income-loss portfolio assumption ...... 240,279 352,409
Discount on accrued salvage and subrogation .... 374,378 376,987
Other .......................................... 1,166,612 786,054
----------- -----------
Total deferred tax liabilities ................. 10,689,927 9,720,886
----------- -----------
Net deferred tax assets ........................ $ 8,436,769 $11,131,603
=========== ===========
The state and local income tax carryforward of $423,300 as of December 31,
1997 can be carried forward against future state and local tax liabilities until
the year 2012.
The Company has no valuation allowance and believes that total deferred tax
assets at December 31, 1997 will more likely than not be fully realized.
Income tax provisions differ from the amounts computed by applying the
Federal statutory rate to income before income taxes as follows:
Year ended December 31
------------------------
1997 1996 1995
---- ---- ----
Income taxes at the Federal statutory rate ....... 35.0% 35.0% 35.0%
Tax exempt interest .............................. (12.5) (12.8) (15.2)
State income taxes ............................... (0.5) 0.2 1.3
Net bond amortization ............................ 1.9 1.8 1.7
Investment income proration ...................... 1.7 1.7 2.1
Effect of change in tax rates .................... -- -- (1.7)
Other, net ....................................... -- (0.9) (0.8)
---- ---- ----
Income tax provisions ............................ 25.6% 25.0% 22.4%
==== ==== ====
53
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
Federal income tax payments amounted to $9,335,632, $7,339,913 and
$4,332,559 for the years ended December 31, 1997, 1996 and 1995, respectively.
Federal income taxes payable at December 31, 1997 and 1996 included in
other liabilities amounted to $386,970 and $640,336, respectively.
(7) Statutory Income and Surplus:
The Company's insurance subsidiaries are limited, based on the lesser of
10% of statutory basis surplus or 100% of net investment income, as defined
under New York Insurance Law, in the amount of dividends they could pay without
regulatory approval. The maximum amount which may be paid to the holding company
out of December 31, 1997 surplus is approximately $18,184,000.
Consolidated statutory net income and surplus of the Company's insurance
subsidiaries were as follows for the periods indicated:
Consolidated Consolidated
Statutory Statutory
net income surplus
------------ ------------
December 31, 1997 $ 36,758,000 $181,844,000
December 31, 1996 26,542,000 160,929,000
December 31, 1995 20,476,000 148,785,000
54
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
(8) Employee Retirement Plans:
The Company maintains two retirement plans for the benefit of employees.
Both plans provide for 100% vesting upon completion of three years of service.
The Money Purchase Plan provides for a contribution equal to 7-1/2% of an
employee's cash compensation, including bonuses, for each year of service during
which the employee has completed 1000 hours of service and is employed on the
last day of the plan year. The Profit Sharing plan does not require any specific
contribution but any contribution made is subject to the restrictions set forth
above for the Money Purchase Plan. Contribution and related administration
expenses for the years ended December 31, 1997, 1996 and 1995 amounted to
$978,997, $991,469 and $1,038,633, respectively.
(9) Debt:
In 1994 the Company and a bank entered into a $10,000,000 credit agreement
which was subsequently amended in 1996 to $25,000,000. The interest rate on the
loan is fixed, at the Company's option, for a period of one to six months. The
Company has elected to pay interest at an effective rate of approximately 6.62%
on the outstanding principal balance of the loan at December 31, 1997 of
$22,458,413. The interest rate was equal to the bank's Adjusted London Interbank
Offered Rate at the time of the interest rate adjustment period, plus .65 of 1%.
Principal repayments are paid quarterly in equal installments of $1,250,000 and
end on June 30, 2002. The Company has the option to prepay amounts in excess of
the required repayments. At the Company's option, the interest rate may be based
on either (a) the higher of the bank's prime rate or the applicable Federal
Funds Rate, plus 1/2 of 1% or (b) the bank's adjusted certificate of deposit
rate, plus .775 of 1%.
The bank loan agreement requires the Company to maintain a minimum net
worth of $125,000,000 plus 50% of net profits earned during each year on a
cumulative basis. In addition, other significant covenants include limitations
on total indebtedness, investment purchases, pledging and sales of assets and
requires the Company's insurance subsidiaries to maintain a certain statutory
surplus, gross and net premiums written to surplus ratios and total liabilities
to surplus ratio. The Company was in compliance with all financial covenants as
stipulated in the bank loan agreement as of December 31, 1997. The credit
agreement provides for a facility fee of .15 of 1% on the outstanding balance.
The Company has an unsecured credit facility with the same bank that allows
the Company to borrow up to $5,000,000. Interest is based on the bank's
international short-term lending rate. The credit facility provides for a
commitment fee of 1/8 of 1% on the average unused available credit balance. No
amounts were outstanding under this credit facility as of December 31, 1997 and
1996, respectively.
Interest paid amounted to $1,464,240, $1,020,737 and $437,653 for the years
ended December 31, 1997, 1996 and 1995.
55
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
(10) Commitments:
The Company maintains various non-cancelable operating leases to occupy
office space. The lease terms expire on various dates through December 30, 2003.
The aggregate minimum annual rental payments under various operating leases
for office facilities as of December 31, 1997 are as follows:
Amount
----------
1998 ................................................ $1,139,247
1999 ................................................ 1,205,122
2000 ................................................ 1,184,832
2001 ................................................ 1,184,832
2002 ................................................ 1,184,832
thereafter .......................................... 1,184,832
----------
Total ............................................... $7,083,697
==========
The operating leases also include provisions for additional payments based
on certain annual cost increases. Rent expense for the years ended December 31,
1997, 1996 and 1995 amounted to $1,049,119, $1,001,295 and $1,017,380.
As of December 31, 1997, the Company is not involved in any litigation
which would require disclosure in the financial statements or would have a
material effect on the Company's financial statements.
In connection with the formation of MMO UK LTD, in 1997, as corporate
capital for Lloyd's Syndicate 1265, the Company obtained an unsecured letter of
credit from a bank in pounds sterling with a US dollar equivalent of
approximately $17,160,000 as of December 31, 1997.
56
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
(11) Common Stock Repurchase Plan and Shareholders' Equity:
The Company has a common stock repurchase plan which authorizes the
repurchase of up to $55,000,000, at prevailing market prices, of the Company's
issued and outstanding shares of common stock on the open market. As of December
31, 1997, the Company had repurchased a total of 2,115,728 shares of common
stock under this plan at a total cost of $38,562,528 at market prices ranging
from $16.50 to $26.88 per share.
In connection with the acquisition of MMO in 1991, the Company also
acquired 3,215,958 shares of its own common stock available by MMO and recorded
such shares as treasury stock at MMO's original cost of $3,919,129.
A reconciliation of basic and diluted EPS for each of the years ended
December 31, 1997, 1996 and 1995 is as follows:
<TABLE>
<CAPTION>
(In Thousands except for per share amounts)
1997 1996 1995
----------------------------- ----------------------------- ------------------------------
Net Net Net
Income Shares Per Share Income Shares Per Share Income Shares Per Share
------- ------ --------- ------ ------ --------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Basic EPS: $26,368 9,849 $2.68 $22,625 10,499 $2.15 $20,120 11,299 $1.78
Effect of
Dilutive Securities:
Stock Options -- 23 .01 -- 25 -- -- 42 .01
------- ------- ----- ------- ------- ----- ------- ------- -----
Diluted EPS $26,368 9,872 $2.67 $22,625 10,524 $2.15 $20,120 11,341 $1.77
======= ======= ===== ======= ======= ===== ======= ======= =====
</TABLE>
(12) Stock Option Plans:
The Company has two stock option plans.
The first plan, approved by shareholders in 1986, and the second plan,
approved by shareholders in 1991, provide a means whereby the Company, through
the grant of non-qualified stock options to key officers, may attract and retain
persons of ability as officers to exert their best efforts on behalf of the
Company. Each plan authorizes the issuance of options to purchase up to 500,000
shares of the Company's common stock at not less than 95 percent of the fair
market value at the date of grant. Options are exercisable over a period as
determined in each option agreement and expire at a maximum term of ten years.
57
<PAGE>
NYMAGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
A summary of activity under the stock option plans for the years ended
December 31, 1997 1996 and 1995 follows:
<TABLE>
<CAPTION>
1997 1996 1995
----------------------------------------------------------------------------------------------------
Number Option Number Option Number Option
Shares Under of Price of Price of Price
Option Shares Per Share Shares Per Share Shares Per Share
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding,
beginning of
year 373,200 $13.78-$22.92 528,500 $13.00-$22.92 623,400 $13.00-$23.87
Granted -- -- 20,000 $17.22-$17.58 210,500 $15.79
Exercised (79,900) $13.78-$15.79 (162,800) $13.00-$15.56 (1,900) $13.00-$13.78
(Forfeited) (50,200) $15.56-$22.92 (12,500) $15.79-$22.33 (303,500) $22.92-$23.87
------- -------- --------
Outstanding,
end of year 243,100 $13.78-$22.92 373,200 $13.78-$22.92 528,500 $13.00-$22.92
======= ======== ========
Exercisable,
end of year 95,356 $13.78-$22.92 135,389 $13.78-$22.92 240,533 $13.00-$22.92
======= ======== ========
</TABLE>
In 1995, 210,500 options granted in prior years with option prices ranging
from $22.33 to $23.87 were repriced at $15.79. The effect on net income for the
year ended December 31, 1995 was immaterial.
The Company has elected to measure compensation expense for employee stock
options under APB No. 25 as permitted by SFAS 123, "Accounting for Stock Based
Compensation." Under, SFAS 123, the Company is required to disclose the pro
forma effects on net income of applying a fair value method of measuring
compensation expense.
The pro forma effect on the years ended December 31, 1997, 1996 and 1995 is
as follows:
1997 1996 1995
---- ---- ----
Net income - as reported $26,367,740 $22,624,618 $22,119,862
Net income - pro forma $26,261,229 $22,513,184 $20,114,511
Diluted EPS - as reported $2.67 $2.15 $1.77
Diluted EPS - pro forma $2.66 $2.14 $1.77
In determining the pro forma effect on net income, the fair value of
options granted in 1996 and 1995 was estimated at the grant date using the
Black-Scholes option-pricing model with the following weighted average
assumptions in 1996 and 1995, respectively; dividend yield of 2.2% and 2.4%;
expected volatility of 25% and 28%; expected lives of 5 years for each year and
a risk-free interest rate of 6% and 5.38%. There were no options granted in
1997.
The full impact of calculating compensation expense for stock options under
SFAS 123 is not reflected in the pro forma net income amounts presented above
because options granted prior to January 1, 1995 are not considered in the
determination of the compensation expense.
58
<PAGE>
FINANCIAL STATEMENT SCHEDULES
SCHEDULE II-CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NYMAGIC, INC.
Balance Sheets
(Parent Company)
<TABLE>
<CAPTION>
December 31,
-----------------------------------------
1997 1996
-----------------------------------------
<S> <C> <C>
Assets:
Cash ...................................................... $ 205,516 $ 17,000
Short term investments .................................... 6,000,000 5,000,000
Investment in subsidiaries ................................ 218,563,990 201,367,648
Due from subsidiaries ..................................... 2,666,372 2,227,007
Other assets .............................................. 2,663,530 1,829,191
------------- -------------
Total assets .......................................... $ 230,099,408 $ 210,440,846
============= =============
Liabilities:
Notes payable ............................................. $ 22,458,413 $ 20,438,413
Dividends payable ......................................... 966,031 1,014,305
Other liabilities ......................................... 155,621 136,402
------------- -------------
Total Liabilities ....................................... 23,580,065 21,589,120
------------- -------------
Shareholders' equity:
Common stock .............................................. 14,991,992 14,911,992
Paid in capital ........................................... 27,529,877 26,258,259
Unrealized appreciation of
investments (net of deferred income taxes) .............. 12,925,785 8,150,910
Foreign currency adjustment ............................... 6,000 --
Retained earnings ......................................... 193,547,346 171,089,462
Treasury stock ............................................ (42,481,657) (31,558,897)
------------- -------------
Total shareholders' equity ............................ 206,519,343 188,851,726
------------- -------------
Total liabilities and shareholders' equity ............ $ 230,099,408 $ 210,440,846
============= =============
</TABLE>
Statements of Income
(Parent Company)
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Revenues:
Cash dividends from subsidiary .................. $ 17,850,262 $ 12,950,071 $ 12,357,008
Net investment income ........................... 21,070 676 --
------------ ------------ ------------
17,871,332 12,950,747 12,357,008
------------ ------------ ------------
Expenses:
Operating expenses .............................. 2,197,039 1,552,852 2,604,577
Income tax benefit .............................. (754,480) (561,073) (955,981)
------------ ------------ ------------
1,442,559 991,779 1,648,596
------------ ------------ ------------
Income before equity income ..................... 16,428,773 11,958,968 10,708,412
Equity in undistributed earnings
of subsidiaries ................................. 9,938,967 10,665,650 9,411,450
------------ ------------ ------------
Net income ...................................... $ 26,367,740 $ 22,624,618 $ 20,119,862
============ ============ ============
</TABLE>
59
<PAGE>
SCHEDULE II-CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NYMAGIC, INC.
Statements of Cash Flows
(Parent Company)
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income ....................................................... $ 26,367,740 $ 22,624,618 $ 20,119,862
------------ ------------ ------------
Adjustments to reconcile net income
to cash provided by operating activities:
Equity in undistributed earnings of
subsidiaries ................................................ (9,938,967) (10,665,650) (9,411,450)
Increase in other assets ...................................... (834,339) (359,403) (222,715)
(Increase)decrease in due from subsidiaries ................... (439,365) 527,868 (429,902)
(Decrease) Increase in other liabilities ...................... 19,219 (11,312) 6,586
------------ ------------ ------------
Net cash provided by operating activities ........................ 15,174,288 12,116,121 10,062,381
------------ ------------ ------------
Cash flows from investing activities:
Short term investments acquired ............................... (13,800,000) (5,000,000) --
Short term investments matured ................................ 12,800,000 -- --
Investment in subsidiaries .................................... (2,476,500) -- --
------------ ------------ ------------
Net cash used in investing activities ......................... (3,476,500) (5,000,000) --
------------ ------------ ------------
Cash flows from financing activities:
Proceeds from stock options exercised ......................... 1,351,618 2,487,472 199,463
Cash dividends paid to stockholders ........................... (3,958,130) (4,236,947) (4,542,123)
Repurchase of common stock .................................... (10,922,760) (13,080,321) (11,440,936)
Proceeds from borrowings ...................................... 9,520,000 14,211,472 15,118,449
Loan principal payments ....................................... (7,500,000) (6,500,000) (9,411,764)
------------ ------------ ------------
Net cash used in
financing activities .......................................... (11,509,272) (7,118,324) (10,076,911)
------------ ------------ ------------
Net increase (decrease) in cash .................................. 188,516 (2,203) (14,530)
Cash at beginning of period ...................................... 17,000 19,203 33,733
------------ ------------ ------------
Cash at end of period ............................................ $ 205,516 $ 17,000 $ 19,203
============ ============ ============
</TABLE>
60
<PAGE>
NYMAGIC, INC.
SCHEDULE V-VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1997 AND 1996
- --------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- --------------------------------------------------------------------------------
DESCRIPTION Balance at Balance
beginning close of
of period Additions Deductions period
- --------------------------------------------------------------------------------
December 31, 1997:
Allowance for
doubtful accounts... $4,825,000 $1,930,261 $(270,261) $6,485,000
December 31, 1996:
Allowance for
doubtful accounts..... 3,025,000 2,155,271 (355,271) 4,825,000
61
<PAGE>
NYMAGIC, INC.
SCHEDULE VI - SUPPLEMENTARY INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE
OPERATIONS.
(In Thousands)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CLAIMS AND CLAIMS
EXPENSES INCURRED AMORTIZATION
DEFERRED RESERVE FOR RELATED TO OF DEFERRED
AFFILIATION POLICY UNPAID CLAIMS UNEARNED NET NET --------------------- POLICY
WITH ACQUISITION AND CLAIMS PREMIUM EARNED INVESTMENT CURRENT PRIOR ACQUISITION
REGISTRANT COSTS EXPENSES DISCOUNT RESERVE PREMIUMS INCOME YEAR YEAR COSTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1997 $ 5,567 $388,402 -- $55,188 $ 87,537 $21,325 $72,322 ($21,874) $16,583
CONSOLIDATED
SUBSIDIARIES
DECEMBER 31, 1996 10,904 411,837 -- 66,652 97,036 21,270 71,731 (12,753) 18,828
CONSOLIDATED
SUBSIDIARIES
DECEMBER 31, 1995 11,661 417,795 -- 79,569 103,461 21,659 75,618 (6,360) 21,018
CONSOLIDATED
SUBSIDIARIES
<CAPTION>
- ----------------------------------------------
AFFILIATION PAID CLAIMS
WITH AND CLAIMS PREMIUMS
REGISTRANT EXPENSES WRITTEN
- ----------------------------------------------
<S> <C> <C>
DECEMBER 31, 1997 $55,483 $62,221
CONSOLIDATED
SUBSIDIARIES
DECEMBER 31, 1996 61,524 90,513
CONSOLIDATED
SUBSIDIARIES
DECEMBER 31, 1995 51,719 97,817
CONSOLIDATED
SUBSIDIARIES
</TABLE>
62
<PAGE>
NYMAGIC, INC.
FORM 10-K
For Fiscal Year Ended December 31, 1997
Exhibit Index
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description Numbered Page
- ------ ----------- -------------
<S> <C> <C>
3.1 Charter Incorporated herein by reference
3.3 By-laws
4.0 Specimen Certificate of Common Stock Incorporated herein by reference
10.2 Restated Management Agreement dated as of Incorporated herein by reference
January 1, 1986, by and among Mutual
Marine Office, Inc. and Arkwright-Boston
Manufacturers Mutual Insurance Company,
Utica Mutual Insurance Company, Lumber
Mutual Insurance Company, the Registrant
and Pennsylvania National Mutual Casualty
Insurance Company
10.2.2 Amendment to Restated Management Incorporated herein by reference
Agreement, dated as of December 30, 1988,
and among Mutual Marine Office, Inc. and
Arkwright Mutual Insurance Company, Utica
Mutual Insurance Company, Lumber Mutual
Insurance Company, the Registrant and
Pennsylvania National Mutual Casualty
Insurance Company
10.2.3 Amendment to Restated Management Incorporated herein by reference
Agreement, dated as of December 31, 1990,
and among Mutual Marine Office, Inc. and
Arkwright Mutual Insurance Company, Utica
Mutual Insurance Company, the Registrant
and Pennsylvania National Mutual Casualty
Insurance Company
10.4 Restated Management Agreement dated as of Incorporated herein by reference
January 1, 1986, by and among Mutual
Inland Marine Office, Inc. and
Arkwright-Boston Manufacturers Mutual
Insurance Company, Utica Mutual Insurance
Company, Lumber Mutual Insurance Company,
the Registrant and Pennsylvania National
Mutual Casualty Insurance Company
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description Numbered Page
- ------ ----------- -------------
<S> <C> <C>
10.4.2 Amendment to Restated Management Incorporated herein by reference
Agreement, dated as of December 30, 1988,
and among Mutual Inland Marine Office,
Inc. and Arkwright Mutual Insurance
Company, Utica Mutual Insurance Company,
Lumber Mutual Insurance Company, the
Registrant and Pennsylvania National
Mutual Casualty Insurance Company
10.4.3 Amendment to Restated Management Incorporated herein by reference
Agreement, dated as of December 31, 1990,
by and among Mutual Inland Marine Office,
Inc. and Arkwright Mutual Insurance
Company, Utica Mutual Insurance Company,
the Registrant and Pennsylvania National
Mutual Casualty Insurance Company
10.6 Restated Management Agreement dated as of Incorporated herein by reference
January 1, 1986, by and among Mutual
Marine Office of the Midwest, Inc. and
Arkwright-Boston Manufacturers Mutual
Insurance Company, Utica Mutual Insurance
Company, Lumber Mutual Insurance
10.6.2 Amendment to Restated Management Incorporated herein by reference
Agreement dated as of December 30, 1988,
by and among Mutual Marine Office of the
Midwest, Inc. and Arkwright Mutual
Insurance Company, Utica Mutual Insurance
Company, Lumber Mutual Insurance Company,
the Registrant and Pennsylvania National
Mutual Casualty Insurance Company
10.6.3 Amendment to Restated Management Incorporated herein by reference
Agreement dated as of December 31, 1990,
by and among Mutual Marine Office of the
Midwest, Inc. and Arkwright Mutual
Insurance Company, Utica Mutual Insurance
Company, the Registrant and Pennsylvania
National Mutual Casualty Insurance
Company
10.8 Restated Management Agreement dated as of Incorporated herein by reference
January 1, 1986, by and among Pacific
Mutual Marine Office, Inc. and
Arkwright-Boston Manufacturers Mutual
Insurance Company, Lumber Mutual
Insurance Company, Utica Mutual Insurance
Company, the Registrant and Pennsylvania
National Mutual Casualty Insurance
Company
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description Numbered Page
- ------ ----------- -------------
<S> <C> <C>
10.8.2 Amendment to Restated Management Incorporated herein by reference
Agreement dated as of December 30, 1988,
by and among Pacific Mutual Marine
Office, Inc. and Arkwright Mutual
Insurance Company, Lumber Mutual
Insurance Company, Utica Mutual Insurance
Company, the Registrant and Pennsylvania
National Mutual Casualty Insurance
Company.
10.8.3 Amendment to Restated Management Incorporated herein by reference
Agreement dated as of December 31, 1990,
by and among Pacific Mutual Marine
Office, Inc. and Arkwright Mutual
Insurance Company, Utica Mutual Insurance
Company, the Registrant and Pennsylvania
National Mutual Casualty Insurance
Company
21 Subsidiaries of the Registrant.
23 Consent of KPMG Peat Marwick LLP.
28 Schedule P as of December 31, 1997.
</TABLE>
September 10, 1997
BY-LAWS
OF
NYMAGIC, INC.
ARTICLE I
SEAL
The board of directors shall provide a suitable seal for the corporation,
which shall remain in the custody of the secretary. It shall be affixed to all
certificates of the corporation's stock and to other instruments requiring a
seal. If deemed advisable by the board of directors, a duplicate seal may be
kept and used by any other officer of the corporation.
ARTICLE II
STOCK
Section l. Certificates
Certificates evidencing the ownership of the shares of the corporation
shall be issued to those entitled to them by transfer and otherwise. Each stock
certificate shall bear a distinguishing number, the signature of the chairman of
the board or of the president or a vice president and of the secretary or an
assistant secretary or of the treasurer or an assistant treasurer, the seal of
the corporation, and such recitals as may be required by law. The certificates
for the stock shall be issued in numerical order, and a full record of the issue
of each certificate shall be made in the books usually kept for that purpose or
required by law. Certificates for stock shall be of such tenor and design as the
board of directors may adopt, and the tenor and design thereof may be changed
from time to time by the board.
Section 2. Transfers
The shares of stock may be transferred on the proper books of the
corporation by the registered holders thereof or by their attorneys legally
constituted or their legal representatives, by surrender of the certificates
therefor for cancellation and a written assignment of the shares evidenced
thereby. The board of directors may from time to time appoint such transfer
agents and registrars of stock as it may deem advisable and may define their
powers and duties.
Section 3. Lost Certificates
The board of directors may order a new certificate or certificates of stock
to be issued in place of any certificate or certificates alleged to have been
lost or destroyed, but in every such case the owner of the lost or destroyed
certificate or certificates shall first cause to be given to the corporation a
bond, with surety or sureties satisfactory to the corporation in such sum as the
board may in its discretion deem sufficient, as indemnity against any loss or
liability that the corporation may incur by reason of the issue of such new
certificates; but the board of directors may in its discretion refuse to issue
such new certificates save upon the order of some court having jurisdiction in
such matter.
Section 4. Closing of Transfer Books
The stock transfer books of the corporation may be closed by order of the
board of directors for a period not exceeding thirty days prior to any meeting
of the stockholders, and for a period not exceeding ten days prior to the
payment of any dividend. The times during which the books may be so closed shall
from time to time be fixed by the board of directors.
<PAGE>
Section 5. Dividends, Surplus, etc.
The board of directors may consistently with the law declare dividends from
the divisible surplus of the corporation, whenever, and in such amounts as, in
its opinion, the condition of the affairs of the corporation shall render it
advisable. The board of directors in its discretion may set aside from such
divisible surplus such sum or sums as it, in its absolute discretion, may think
proper, as a reserve fund to meet contingencies, or for equalizing dividends, or
for the purpose of maintaining or increasing the property or business of the
corporation, or for any other purpose it may think conducive to the best
interest of the corporation. All such divisible surplus, until actually declared
in dividends, or used and applied as aforesaid, shall be deemed to have been so
set aside by the board of directors for one or more of said purposes.
ARTICLE III
STOCKHOLDERS' MEETINGS
Section l. Annual Meeting
The Annual Meeting of the stockholders of the corporation shall be held at
the offices of the corporation or at some other convenient place in the State of
New York on the second Tuesday in May of each year for the purpose of electing
directors and for the transaction of such other business as may be brought
before the meeting. Should the day designated fall on a legal holiday, the the
meeting shall be held on the next business day immediately following.
Section 2. Special Meetings
Special meetings of the stockholders shall be called by the secretary or
assistant secretary upon written request of the chairman of the board or the
president or of three directors. No business other than that specified in the
call therefor shall be considered at any special meeting.
Section 3. Notice
Notice of the annual meeting shall be delivered personally, or mailed not
less than twenty (20) nor more than fifty (50) days before the meeting, to each
person who appears on the books of the corporation as a stockholder. If mailed,
it shall be directed to a stockholder at his address as it appears on such
books. No failure to give notice by mail or irregularity in such notice shall
affect the validity of the proceedings taken at such meeting.
Notice of each special meeting stating the purpose thereof, shall be mailed
not less than twenty (20) days nor more than fifty (50) days prior to the date
thereof to each stockholder of record at his last known post office address as
the same appears upon the records of the corporation.
Section 4. Quorum
A majority in amount of the stock issued and outstanding represented by the
holders of record thereof in person or by proxy shall be requisite to consitute
a quorum at any meeting of stockholders, except as otherwise provided by law;
but less than such majority may adjourn the meeting from time to time, and at
any such adjourned meeting any business may be transacted which might have been
transacted if the meeting had been held as originally called.
Section 5. Proxies
Any stockholder entitled to a vote at a meeting of the stockholders may be
represented and vote thereat by proxy, appointed by an instrument in writing
subscribed by such stockholder or by his duly authorized attorney, and submitted
to the secretary or assistant secretary at or before such meeting.
Section 6. Election of Directors
The election of the directors shall be conducted by two inspectors of
election appointed by the chairman of the board or president. The vote in
elections of directors, and, upon demand of a stockholder present in person or
by proxy, th vote on any question, shall be a stock vote and by ballot.
Section 7. Record Date
<PAGE>
For the purpose of determining the stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, or to express
consent to or dissent from any proposal without a meeting, or for the purpose of
determining stockholders entitled to receive payment of any dividend or the
allotment of any rights, or for the purpose of any other action, the board of
directors may fix, in advance, a date as the record date for any such
determination of shareholders. Such date shall not be more than sixty (60) nor
less than ten (l0) days before the date of such meeting, nor more than fifty
(50) days prior to any other action.
When a determination of stockholders of record entitled to notice of or to
vote at any meeting of shareholders has been made as provided in this Section 7,
such determination shall apply to any adjournment thereof, unless the board of
directors fixes a new record date for the adjourned meetings.
ARTICLE IV
DIRECTORS
Section l. Number of Directors
The number of directors shall be not less than thirteen (l3) nor more than
nineteen (l9). The exact number thereof may be established by the stockholders
at each annual meeting, or at a special meeting called for such purpose, or by
the directors at any regular meeting thereof, or any special meeting thereof
called for such purpose. The term of office of directors shall be, in all
respects, as set forth in the declaration and charter of the corporation.
Section 2. Election of Officers
At the first meeting of the board of directors in each year (at which a
quorum shall be present) held next after the annual meeting of the stockholders,
the board of directors shall elect officers of the corporation, designate the
members of the executive committee, audit committee and finance committee (if
any such committee shall be constituted as hereinafter provided), and appoint
such subordinate officers and employees as it shall determine. The board of
directors may elect officers to fill any vacancies at any regular meeting
thereof, or at a special meeting thereof called for such purpose.
Section 3. Regular Meetings
Regular meetings of the board of directors shall be held at such intervals
and on such dates as the board may designate.
Section 4. Special Meetings
Special meetings of the board of directors shall be called by the secretary
or assistant secretary pursuant to the request of the chairman of the board or
president. Special meetings of the board of directors shall also be called by
the secretary or assistant secretary in the event that any five members of the
board of directors request a special meeting.
Section 5. Notice of Meetings
The secretary or assistant secretary shall give notice of each meeting of
the board of directors, whether regular or special, to each member of the board,
by mail or telegraph to his last known post office address. Such notice shall be
given by mailing the same at least twenty days before the meeting or by telegram
or cable sent at least ten days before the meeting. No failure to give notice,
or irregularity in such notice, shall affect the validity of the proceedings
taken at any regular meeting of the board of directors.
Section 6. Quorum
A quorum of any meeting of the board of directors shall consist of a
majority of the total number of members of the board. A majority of such quorum
shall decide any questions that may come before the meeting, unless otherwise
expressly provided by law or by-law duly adopted. Less than a quorum may adjourn
from time to time.
Section 7. Place of Meeting
The board of directors may hold its meetings at such place or places within
or without the State of New York as the board may from time to time determine.
<PAGE>
Members of the board of directors may participate in a meeting of the board
or any committee thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in such
meeting can hear each other, and participating in a meeting pursuant to this
paragraph shall constitute presence in person at such meeting.
Section 8. Compensation
The compensation of directors shall be regulated and determined by the
directors; provided that nothing herein contained shall be construed to preclude
any director from serving the corporation in any other capacity and receiving
compensation or commissions therefore.
Section 9. Resignation and Removal of Directors
Any director may resign his office at any time and the acceptance of his
resignation shall not be required to make the same valid. Any director elected
or appointed by the stockholders may be removed at any time, either with or
without cause, by a vote of the stockholders holding a majority of the stock, at
any special meeting called for such purpose.
ARTICLE V
EXECUTIVE COMMITTEE
Section l.
The board of directors may, by a majority of the whole board, designate
three or more of their number to constitute an executive committee, to hold
office for one year and until their respective successors shall be designated,
which committee shall, between sessions of the board, have all the powers of the
board of directors in the management of the business and affairs of the
corporation, except as prohibited by law, and shall have power to authorize the
seal of the corporation to be affixed to all papers which may require it. The
taking of any action by the executive committee shall be conclusive evidence
that the board of directors was not at the time of such action in session. The
executive committee shall appoint its chairman. The secretary or assistant
secretary or a member of the executive committee shall keep minutes of its
proceedings, and all such proceedings shall be from time to time reported to the
board of directors. A majority of the executive committee shall consitute a
quorum at any meeting. The executive committee may take action without a meeting
on the written approval of such action by all members of the committee. A
majority of the directors may fill vacancies in the executive committee. The
executive committee may, from time to time, subject to the approval of the board
of directors, prescribe rules and regulations for the calling and conduct of
meetings of the committee, and other matters relating to its procedures and the
exercise of its powers.
Meetings of the executive committee shall be called by the secretary or
assistant secretary of the corporation, from time to time, at the direction of
the chairman of the board, the president or any two members of the executive
committee; the notice of any such meeting shall in each instance be given to
each member of the committee at his last known business address, at least
twenty-four hours before the meeting, either orally or in writing delivered
personally or by mail, telegraph or telephone.
Section 2. Audit Committee
The board of directors may, by a majority vote at the first board of
directors meeting next following the Annual Shareholders Meeting, designate at
least three directors to constitute an audit committee to hold office for one
year and until their respective successors shall be designated.
The duties of the committee shall include review of the financial
statements of the Company and the adequacy of the systems of internal accounting
controls and procedures; to meet with the Company's internal auditors, if any,
and with its independent public accountants to review their report on the
examination of the Company's accounts, their comments on the internal controls
and auditing procedures of the Company and the action taken by management with
regard to such comments; to meet with outside or internal financial and legal
personnel in connection with the committee reviews; and to recommend annually to
the board of directors the appointment of the Company's independent public
accountants. The meetings with auditing, financial and legal personnel may be
with or without management representatives being present. The committee shall
also perform such other duties as may be assigned to it from time to time by the
board of directors.
<PAGE>
Section 3. Finance Committee
The board of directors may, by a majority vote at the first board of
directors meeting next following the Annual Shareholders Meeting, designate at
least three directors to constitute a finance committee, to hold office for one
year and until their respective successors shall be designated.
The duties of the committee shall include meeting quarterly, with or
without outside investment counsel in attendance; to review and ratify
investment transactions for the quarter; to review the schedule of funds
available for investment and to determine appropriate investment thereof in
accordance with the Investment Program guidelines; to investigate investment
opportunities; to report their findings and recommendations and propose
resolutions to the board of directors for consideration; and to recommend
annually to the board of directors the appointment of the Company's investment
counsel. The committee shall also perform such other duties as may be assigned
to it from time to time by the board of directors.
Section 4. Other Committees.
The Board of Directors may, by resolution adopted by a majority of the
entire Board of Directors, designate at least three directors to constitute one
ore more other committees to hold office for one year and until their respective
successors shall be designated.
The duties, power and authority and any committee designated by this
Section 4 shall be set forth in the resolution or resolutions of the Board of
Directors designating such committee and, to the extent provided therein and
permissible under the Business Corporation Law and Insurance Law of New York,
shall have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the Corporation.
ARTICLE VI
OFFICERS
Section l. Officers
The officers of this corporation shall be a chairman of the board,
president, one or more vice presidents, one or more secretaries, and such other
officers, if any, including, a vice chairman of the board, a treasurer and one
or more assistant secretaries and assistant treasurers as may be designated by
the board of directors. Any two or more offices may be held by the same person
except that no individual may hold the office of secretary concurrently with the
office of chairman of the board or president. The president shall be a director
of the corporation. The vice president or vice presidents, the secretary or
assistant secretaries, the treasurer or assistant treasurers and other officers,
if any, may, but need not be directors.
Section 2. Chairman of the Board
The chairman of the board shall preside at all meetings of the stockholders
unless the stockholders shall, at least l0 days in advance of the stockholders
meeting, designate a chairman in writing addressed to the chairman of the board
of the corporation; and shall preside as chairman of the board at all meetings
of the directors including meetings of the executive committee of the directors.
The chairman of the board shall have such powers and perform such duties as may
be assigned to him from time to time by the board. He shall always be designated
a member of the executive committee.
Section 3. Vice Chairman of the Board
The vice chairman of the board shall have such powers and perform such
duties as may be assigned to him from time to time by the board.
Section 4. President
The president shall perform the duties of the chairman of the board in his
absence or during his inability to act. Any action taken by the president in the
performance of the duties of the chairman of the board shall be conclusive
evidence of the absence or inability to act of the chairman of the board at the
time such action was taken. The president shall exercise, subject to the control
of the board of directors, the duties of chief executive officer of the
corporation and shall perform such other duties as may be assigned to him from
time to time by the board. He shall always be designated a member of the
executive committee.
<PAGE>
Upon any vacancy in the office of the chairman of the board caused by death
or incapacity or for any reason deemed sufficient by the board, the president
shall succeed to the office of chairman of the board, unless otherwise ordered
by the board.
Section 5. Vice President
The vice president or vice presidents shall perform the duties of the
president in his absence or during his inability to act. Any action taken by the
vice president in the performance of the duties of the president shall be
conclusive evidence of the absence or inability to act of the president at the
time such action was taken. The vice presidents shall also have such other and
further powers and shall perform such other and further duties as may be
assigned to them respectively by the board of directors.
Upon any vacancy in the office of the president caused by death or
incapacity or for any reason deemed sufficient by the board, the vice presidents
in the order of their seniority shall succeed to the office of president, unless
otherwise ordered by the board.
Section 6. Secretary
The secretary shall keep the minutes of all meetings of the board of
directors, and of the stockholders, unless another person be appointed for that
purpose by the stockholders, and also, unless another person be appointed for
that purpose by the executive committee, the minutes of the executive committee,
in books provided for that purpose. He shall give or cause to be given all
notices required by these by-laws or by resolution of the board of directors. He
shall have charge of the stock certificate books, stock transfer books and stock
ledgers, all of which shall at all reasonable hours be open to the examination
of any director; he shall have custody of the seal of the corporation; and he
shall in general perform all the duties usually incident to the office of
secretary, subject to the control of the board of directors. The secretary or
any assistant secretary shall also certify all resolutions and proceedings of
the stockholders,directors, and executive committee.
Section 7. Treasurer
The treasurer shall keep and maintain open to inspection by any director at
all reasonable times, adequate and correct accounts of the properties and
business transactions of the corporation, which shall include all matters
required by law and which shall be in form as required by law. He shall have the
care and custody of the funds and valuables of the corporation and deposit same
in the name of and to the credit of the corporation with such depositaries as
the board of directors may designate, and he shall disburse the funds of the
corporation as he may be ordered by the board, taking proper vouchers for such
disbursements. The treasurer shall render to the chairman of the board and
president and secretary or to the board of directors whenever they may require
it, but in no event less than quarter annually, an account of all his
transactions as treasurer, and a financial statement in form satisfactory to
them, showing the condition of the corporation. He shall have such other powers
and perform such other duties as may be prescribed by the board of directors.
Section 8. Powers and Duties of Other Officers
The other officers of the corporation shall perform such duties as shall be
assigned to them from time to time by the board of directors or by the
president.
ARTICLE VII
SIGNATURE, CARE OF FUNDS AND SECURITIES
Section l. Care of Funds and Securities
It shall be the duty of the board of directors, the executive committee or
the finance committee, when the board is not in session, to take charge of the
cash funds of the corporation, and to invest and loan the same agreeably to the
provisions of the law, and when loaned, to call in and reloan the same as the
interest of the corporation may require; also to consent to the substitution of
new or other security for loans in place of those already held by the
corporation when, in its judgment, the interests of the corporation require such
substitution.
All sales and transfers of securities shall be made by an officer of the
corporation acting under authority granted by a resolution of the board of
directors, the finance committee or the executive committee.
<PAGE>
All moneys received by the corporation shall be deposited to its credit in
such bank or banks as the board of directors, the finance committee or the
executive committee may direct, subject to the order of any person or persons
thereunto authorized by the board of directors, the finance committee or the
executive committee.
Section 2. Signatures
All checks, drafts, notes or other obligations of the corporation shall be
signed by any person or persons thereunto authorized by the board of directors,
the finance committee or the executive committee.
Section 3. Proxies
The finance committee, the executive committee or the board of directors
may authorize from time to time the signature and issue of proxies to vote upon
shares of stock of other corporations owned by and standing in the name of this
corporation. All such proxies shall be signed in the name of the corporation by
the chairman of the board, president, a vice president or the secretary or
assistant secretary.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the corporation shall commence on the first day of
January and end on the thirty-first day of December in each year and all books
and accounts of the corporation shall be balanced as of that day.
ARTICLE IX
AMENDMENTS
All by-laws of the corporation shall be subject to alteration or repeal,
and new by-laws may be made, either by the affirmative vote of holders of record
of a majority of the outstanding stock of the corporation, given at an annual
meeting or at any special meeting, provided notice of the proposed alteration or
repeal or of the proposed new by-laws be included in the notice of such special
meeting, or by the affirmative vote of a majority of the board of directors
given at a regular meeting or a special meeting of the board of directors,
provided notice of the proposed alteration or repeal or of the proposed new
by-laws be included in the notice of such special meeting. By-laws made or
altered by the board of directors shall be subject to alteration or repeal by
the stockholders.
ARTICLE X
WAIVER OF NOTICE
Whenever, under the provisions of these by-laws or of any law, the
stockholders, directors or committees are authorized to hold any meeting after
notice, or after the lapse of any prescribed period of time, such meeting may be
held without notice, or without such lapse of time, by the written waiver of
such notice signed by every person entitled to notice.
ARTICLE XI
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The corporation will indemnify to the fullest extent then permissible under
the Business Corporation Law and Insurance Law of New York each person who shall
serve at any time as director or officer of the corporation.
SUBSIDIARIES
NEW YORK MARINE AND GENERAL INSURANCE COMPANY
GOTHAM INSURANCE COMPANY
MUTUAL MARINE OFFICE, INC.
PACIFIC MUTUAL MARINE OFFICE, INC.
MUTUAL MARINE OFFICE OF THE MIDWEST, INC.
MMO UNDERWRITING AGENCY, LTD.
MMO UK, LTD.
MMO EU, LTD.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
NYMAGIC, INC.:
We consent to incorporation by reference in registration statements (No.
33-10780, 2-94924 and 33-88342) on Form S-8 of NYMAGIC, INC. of our report dated
February 17, 1998 relating to the consolidated balance sheets of NYMAGIC, INC.
and subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of income, shareholders' equity and cash flows for each of the years
in the three-year period ended December 31, 1997, and related schedules, which
report appears in the December 31, 1997 Annual Report on Form 10-K of NYMAGIC,
INC.
KPMG Peat Marwick LLP
New York, New York
March 30, 1998
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<DEBT-HELD-FOR-SALE> 361,250
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 59,258
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 438,591
<CASH> 1,042
<RECOVER-REINSURE> 175,658
<DEFERRED-ACQUISITION> 5,567
<TOTAL-ASSETS> 707,903
<POLICY-LOSSES> 0
<UNEARNED-PREMIUMS> 55,155
<POLICY-OTHER> 388,402
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 22,458
0
0
<COMMON> 14,992
<OTHER-SE> 191,527
<TOTAL-LIABILITY-AND-EQUITY> 707,903
87,537
<INVESTMENT-INCOME> 21,325
<INVESTMENT-GAINS> 10,425
<OTHER-INCOME> 293
<BENEFITS> 50,768
<UNDERWRITING-AMORTIZATION> 16,583
<UNDERWRITING-OTHER> 16,763
<INCOME-PRETAX> 35,455
<INCOME-TAX> 9,087
<INCOME-CONTINUING> 26,368
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26,368
<EPS-PRIMARY> 2.68
<EPS-DILUTED> 2.67
<RESERVE-OPEN> 227,370
<PROVISION-CURRENT> 72,322
<PROVISION-PRIOR> (21,874)
<PAYMENTS-CURRENT> 17,029
<PAYMENTS-PRIOR> 38,454
<RESERVE-CLOSE> 222,335
<CUMULATIVE-DEFICIENCY> (21,874)
</TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE
COMPANY (COMBINED)
SCHEDULE P - ANALYSIS OF LOSSES AND LOSS EXPENSES
SCHEDULE P - PART 1 - SUMMARY
($000 Omitted)
<TABLE>
<CAPTION>
===============================================================================================================
(1) PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS
Years in -------------------------------------------------------------------------------------------
Which (2) (3) (4) LOSS PAYMENTS ALLOCATED LOSS EXPENSE PAYMENTS
Premiums ------------------------------------------------------
Were Earned (5) (6) (7) (8)
and Losses Direct and Net Direct and Direct and
Were Incurred Assumed Ceded (Cols. 2-3) Assumed Ceded Assumed Ceded
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior XXX XXX XXX 738 650 775 234
2. 1988 157,648 86,659 70,989 79,051 44,212 10,764 4,483
3. 1989 165,195 93,434 71,761 181,222 139,158 16,019 7,499
4. 1990 166,056 101,563 64,493 111,775 78,875 12,146 4,432
5. 1991 179,573 115,157 64,416 66,977 40,206 9,643 2,858
6. 1992 161,162 102,887 58,275 69,434 47,322 5,127 1,487
7. 1993 165,180 99,903 65,277 83,090 51,761 4,803 1,909
8. 1994 180,033 100,778 79,255 124,953 94,085 4,929 2,817
9. 1995 197,192 93,731 103,461 49,653 20,981 1,831 487
10. 1996 168,183 71,146 97,037 41,485 14,756 2,126 1,227
11. 1997 135,414 47,877 87,537 31,741 14,932 154 50
- --------------------------------------------------------------------------------------------------------------
12. TOTALS XXX XXX XXX 840,119 546,938 68,317 27,483
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
===========================================================================================
(1) (13)
Years in ---------------------------------
Which UNALLOCATED LOSS EXPENSE PAYMENTS (11) (12) Number of
Premiums --------------------------------- Total Net Claims
Were Earned (9) (10) Salvage and Paid (Cols. Reported -
and Losses Direct and Subrogation 5-6+7-8 Direct and
Were Incurred Assumed Ceded Received +9-10) Assumed
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior 0 0 155 629 XXX
2. 1988 0 0 3,154 41,120 XXX
3. 1989 0 0 2,696 50,584 XXX
4. 1990 0 0 2,680 40,614 XXX
5. 1991 0 0 2,092 33,556 XXX
6. 1992 0 0 803 25,752 XXX
7. 1993 1,799 0 847 36,022 XXX
8. 1994 2,189 0 1,973 35,169 XXX
9. 1995 2,111 0 939 32,127 XXX
10. 1996 2,009 0 695 29,637 XXX
11. 1997 1,863 0 16 18,776 XXX
- ------------------------------------------------------------------------------------------
12. TOTALS 9,971 0 16,050 343,986 XXX
- ------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID UNALLOCATED LOSS EXPENSES UNPAID
-----------------------------------------------------------------------------------------------------------------------------
CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR (22) (23)
--------------------------------------------------------------------------------------------------
(14) (15) (16) (17) (18) (19) (20) (21)
Direct and Direct and Direct and Direct and Direct and
Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 19,031 11,850 7,522 2,563 0 0 434 219 39 0
2. 3,672 1,622 2,004 575 0 0 263 85 61 0
3. 6,418 4,472 4,186 1,455 0 0 441 137 67 0
4. 8,549 4,275 6,172 2,046 0 0 673 190 333 0
5. 7,890 3,606 10,345 3,235 0 0 816 232 302 0
6. 7,502 2,773 10,285 3,450 0 0 1,492 346 108 0
7. 9,245 4,621 11,946 3,683 0 0 1,993 404 368 0
8. 26,465 19,962 18,329 5,315 0 0 3,229 323 229 0
9. 16,022 11,109 25,735 6,611 0 0 4,411 335 254 0
10. 23,368 14,163 33,606 8,547 0 0 5,292 340 1,160 0
11. 36,209 23,019 41,498 10,350 0 0 7,130 342 4,179 0
- ------------------------------------------------------------------------------------------------------------------------------------
12. 164,371 101,472 171,628 47,830 0 0 26,174 2,953 7,100 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
====================================================
(24) (25) (26)
Number of
Total Net Claims
Salvage and Losses and Outstanding -
Subrogation Expenses Direct and
Anticipated Unpaid Assumed
- -----------------------------------------------------
<S> <C> <C> <C>
1. 222 12,394 XXX
2. 99 3,718 XXX
3. 142 5,048 XXX
4. 226 9,216 XXX
5. 214 12,280 XXX
6. 303 12,818 XXX
7. 373 14,844 XXX
8. 724 22,652 XXX
9. 996 28,367 XXX
10. 1,502 40,376 XXX
11. 2,031 55,305 XXX
- ----------------------------------------------------
12. 6,832 217,018 XXX
- ----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
=============================================================================================================================
LOSSES AND LOSS EXPENSES PERCENTAGE NONTABULAR (35)
TOTAL LOSSES AND LOSS EXPENSES INCURRED (Incurred/Premiums Earned) DISCOUNT
-----------------------------------------------------------------------------------------------------
Inter-Company
(27) (28) (29) (30) (31) (32) (33) (34) Pooling
Direct and Direct and Loss Participation
Assumed Ceded Net Assumed Ceded Net Loss Expense Percentage
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. XXX XXX XXX XXX XXX XXX 0 0 XXX
2. 95,815 50,978 44,837 60.8 58.8 63.2 0 0 50.0
3. 208,353 152,720 55,633 126.1 163.5 77.5 0 0 58.9
4. 139,648 89,818 49,830 84.1 88.4 77.3 0 0 66.9
5. 95,973 50,137 45,836 53.4 43.5 71.2 0 0 77.3
6. 93,948 55,378 38,570 58.3 53.8 66.2 0 0 81.5
7. 113,244 62,378 50,866 68.6 62.4 77.9 0 0 84.0
8. 180,323 122,502 57,821 100.2 121.6 73.0 0 0 90.7
9. 100,020 39,527 60,493 50.7 42.2 58.5 0 0 95.0
10. 109,046 39,032 70,014 64.8 54.9 72.2 0 0 95.0
11. 122,774 48,693 74,081 90.7 101.7 84.6 0 0 100.0
- -----------------------------------------------------------------------------------------------------------------------------
12. XXX XXX XXX XXX XXX XXX 0 0 XXX
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
====================================
NET BALANCE SHEET
RESERVES AFTER DISCOUNT
- ------------------------------------
(36) (37)
Losses Loss Expenses
Unpaid Unpaid
- ------------------------------------
<S> <C> <C>
1. 12,140 254
2. 3,479 239
3. 4,677 371
4. 8,400 816
5. 11,394 886
6. 11,564 1,254
7. 12,887 1,957
8. 19,517 3,135
9. 24,037 4,330
10. 34,264 6,112
11. 44,338 10,967
- ------------------------------------
12. 186,697 30,321
- ------------------------------------
</TABLE>
Note: Parts 2 and 4 are gross of all dicounting, including tabular discounting.
Part 1 is gross of only nontabular discounting, which is reported in Columns 33
and 34 of Part 1 The tabular discount, if any, is reported in the Notes to
Financial Statements which will reconcile Part 1 with Parts 2 and 4.
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 197 OF THE NEW YORK MARINE AND GENERAL INSURANCE
COMPANY (COMBINED)
SCHEDULE P - PART 2 - SUMMARY
<TABLE>
<CAPTION>
============================================================================================================================
(1) INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END ($000 OMITTED)
-----------------------------------------------------------------------------------------------------------
Years in Which (2) (3) (4) (5) (6) (7) (8) (9) (10)
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 75,103 71,231 65,322 61,847 57,039 54,379 50,634 49,521 51,252
2. 1988 50,472 48,745 46,671 48,177 47,602 46,244 45,167 44,662 44,942
3. 1989 XXX 53,563 54,047 58,399 59,626 60,030 58,538 58,683 57,273
4. 1990 XXX XXX 50,795 47,279 49,348 49,352 51,990 50,500 50,210
5. 1991 XXX XXX XXX 45,344 43,866 45,953 46,206 45,467 46,135
6. 1992 XXX XXX XXX XXX 48,868 46,024 42,127 40,235 40,098
7. 1993 XXX XXX XXX XXX XXX 54,969 52,929 52,621 50,223
8. 1994 XXX XXX XXX XXX XXX XXX 64,065 63,601 60,317
9. 1995 XXX XXX XXX XXX XXX XXX XXX 75,620 67,489
10. 1996 XXX XXX XXX XXX XXX XXX XXX XXX 71,753
11. 1997 XXX XXX XXX XXX XXX XXX XXX XXX XXX
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
=================================================================
(1) DEVELOPMENT
------------------------------------------------
Years in Which (11) (12) (13)
Losses Were
Incurred 1997 One Year Two Year
- -----------------------------------------------------------------
<S> <C> <C> <C>
1. Prior 51,127 (125) 1,606
2. 1988 44,776 (166) 114
3. 1989 55,566 (1,707) (3,117)
4. 1990 49,497 (713) (1,003)
5. 1991 45,534 (601) 67
6. 1992 38,462 (1,636) (1,773)
7. 1993 48,699 (1,524) (3,922)
8. 1994 55,403 (4,914) (8,198)
9. 1995 58,128 (9,361) (17,492)
10. 1996 66,845 (4,908) XXX
11. 1997 68,039 XXX XXX
- -----------------------------------------------------------------
12. TOTALS (25,655) (33,718)
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
(1) CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED)
-------------------------------------------------------------------------------------------------------------------
Years in Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 000 11,744 18,292 24,844 25,052 29,505 32,829 36,659 38,148 38,776
2. 1988 4,336 11,663 16,855 24,451 28,017 31,112 35,705 38,073 39,943 41,120
3. 1989 XXX 5,299 16,469 23,496 29,398 38,031 44,021 47,018 49,494 50,584
4. 1990 XXX XXX 2,184 8,747 13,360 21,530 29,030 33,343 37,038 40,614
5. 1991 XXX XXX XXX 2,047 5,055 13,818 20,500 24,862 30,416 33,556
6. 1992 XXX XXX XXX XXX 2,756 9,790 14,140 19,226 23,585 25,752
7. 1993 XXX XXX XXX XXX XXX 4,431 17,339 24,714 29,327 34,223
8. 1994 XXX XXX XXX XXX XXX XXX 11,186 21,765 28,937 32,980
9. 1995 XXX XXX XXX XXX XXX XXX XXX 10,044 24,994 30,016
10. 1996 XXX XXX XXX XXX XXX XXX XXX XXX 15,012 27,628
11. 1997 XXX XXX XXX XXX XXX XXX XXX XXX XXX 16,913
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
====================================================
(1) (12) (13)
------------------------------------
Number of Number of
Years in Which Claims Claims Closed
Losses Were Closed With Without
Incurred Loss Payment Loss Payment
- ----------------------------------------------------
<S> <C> <C>
1. Prior XXX XXX
2. 1988 XXX XXX
3. 1989 XXX XXX
4. 1990 XXX XXX
5. 1991 XXX XXX
6. 1992 XXX XXX
7. 1993 XXX XXX
8. 1994 XXX XXX
9. 1995 XXX XXX
10. 1996 XXX XXX
11. 1997 XXX XXX
- ----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
(1) BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES ALLOCATED EXPENSES AT YEAR END ($000 OMITTED)
----------------------------------------------------------------------------------------------------------------------
Years in Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 40,536 30,169 19,754 12,651 8,198 5,412 3,539 3,518 4,696 5,173
2. 1988 35,531 24,459 15,625 10,917 7,873 5,700 3,588 2,698 1,979 1,607
3. 1989 XXX 38,132 24,234 16,024 11,451 8,506 6,589 5,465 4,024 3,035
4. 1990 XXX XXX 39,863 26,182 17,966 13,671 9,935 8,107 5,780 4,609
5. 1991 XXX XXX XXX 34,420 25,773 18,745 14,270 12,104 9,247 7,694
6. 1992 XXX XXX XXX XXX 38,439 26,128 18,334 14,054 10,840 7,981
7. 1993 XXX XXX XXX XXX XXX 39,236 24,199 18,552 13,585 9,852
8. 1994 XXX XXX XXX XXX XXX XXX 43,640 30,938 21,375 15,920
9. 1995 XXX XXX XXX XXX XXX XXX XXX 52,032 35,285 23,200
10. 1996 XXX XXX XXX XXX XXX XXX XXX XXX 45,536 30,011
11. 1997 XXX XXX XXX XXX XXX XXX XXX XXX XXX 37,936
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE
COMPANY (COMBINED)
SCHEDULE P - PART 1C
COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
($000 Omitted)
<TABLE>
<CAPTION>
======================================================================================================================
(1) PREMIUMS EARNED LOSS AND EXPENSE PAYMENTS
Years in --------------------------------------------------------------------------------------------------
Which (2) (3) (4) LOSS PAYMENTS ALLOCATED LOSS EXPENSE PAYMENTS
Premiums -------------------------------------------------------------
Were Earned (5) (6) (7) (8)
and Losses Direct and Net Direct and Direct and
Were Incurred Assumed Ceded (Cols. 2-3) Assumed Ceded Assumed Ceded
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Prior XXX XXX XXX 0 0 0 0
2. 1988 0 0 0 0 0 0 0
3. 1989 0 0 0 0 0 0 0
4. 1990 0 0 0 0 0 0 0
5. 1991 0 0 0 0 0 0 0
6. 1992 0 0 0 0 0 0 0
7. 1993 0 0 0 0 0 0 0
8. 1994 0 0 0 0 0 0 0
9. 1995 36 3 33 13 5 2 1
10. 1996 4 2 2 1 0 1 0
11. 1997 0 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------
12. TOTALS XXX XXX XXX 14 5 3 1
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
==========================================================================================
(1) (13)
Years in --------------------------
Which UNALLOCATED LOSS EXPENSE PAYMENTS (11) (12) Number of
Premiums -------------------------- Total Net Claims
Were Earned (9) (10) Salvage and Paid (Cols. Reported -
and Losses Direct and Subrogation 5-6 Direct and
Were Incurred Assumed Ceded Received +7-8+9-10) Assumed
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 XXX
2. 1988 0 0 0 0 0
3. 1989 0 0 0 0 0
4. 1990 0 0 0 0 0
5. 1991 0 0 0 0 0
6. 1992 0 0 0 0 0
7. 1993 0 0 0 0 0
8. 1994 0 0 0 0 0
9. 1995 0 0 0 9 6
10. 1996 0 0 0 2 1
11. 1997 0 0 0 0 0
- ------------------------------------------------------------------------------------------
12. TOTALS 0 0 0 11 XXX
- ------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID UNALLOCATED LOSS EXPENSES UNPAID
-----------------------------------------------------------------------------------------------------------------------------
CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR (22) (23)
--------------------------------------------------------------------------------------------------
(14) (15) (16) (17) (18) (19) (20) (21)
Direct and Direct and Direct and Direct and Direct and
Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 0 0 0 0 0 0 0 0 0 0
2. 0 0 0 0 0 0 0 0 0 0
3. 0 0 0 0 0 0 0 0 0 0
4. 0 0 0 0 0 0 0 0 0 0
5. 0 0 0 0 0 0 0 0 0 0
6. 0 0 0 0 0 0 0 0 0 0
7. 0 0 0 0 0 0 0 0 0 0
8. 0 0 0 0 0 0 0 0 0 0
9. 0 0 0 0 0 0 0 0 0 0
10. 0 0 0 0 0 0 0 0 0 0
11. 0 0 0 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
12. 0 0 0 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
===============================================
(24) (25) (26)
Number of
Total Net Claims
Salvage and Losses and Outstanding -
Subrogation Expenses Direct and
Anticipated Unpaid Assumed
- -----------------------------------------------
<S> <C> <C> <C>
1. 0 0 0
2. 0 0 0
3. 0 0 0
4. 0 0 0
5. 0 0 0
6. 0 0 0
7. 0 0 0
8. 0 0 0
9. 0 0 0
10. 0 0 0
11. 0 0 0
- -----------------------------------------------
12. 0 0 0
- -----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
============================================================================================================================
LOSSES AND LOSS EXPENSES PERCENTAGE NONTABULAR (35)
TOTAL LOSSES AND LOSS EXPENSES INCURRED (Incurred/Premiums Earned) DISCOUNT
-----------------------------------------------------------------------------------------------------
Inter-Company
(27) (28) (29) (30) (31) (32) (33) (34) Pooling
Direct and Direct and Loss Participation
Assumed Ceded Net Assumed Ceded Net Loss Expense Percentage
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. XXX XXX XXX XXX XXX XXX 0 0 XXX
2. 0 0 0 0.0 0.0 0.0 0 0 0.0
3. 0 0 0 0.0 0.0 0.0 0 0 0.0
4. 0 0 0 0.0 0.0 0.0 0 0 0.0
5. 0 0 0 0.0 0.0 0.0 0 0 0.0
6. 0 0 0 0.0 0.0 0.0 0 0 0.0
7. 0 0 0 0.0 0.0 0.0 0 0 0.0
8. 0 0 0 0.0 0.0 0.0 0 0 0.0
9. 15 6 9 41.7 200.0 27.3 0 0 100.0
10. 2 0 2 50.0 0.0 100.0 0 0 100.0
11. 0 0 0 0.0 0.0 0.0 0 0 100.0
12. XXX XXX XXX XXX XXX XXX 0 0 XXX
<CAPTION>
==============================
NET BALANCE SHEET
RESERVES AFTER DISCOUNT
- ------------------------------
(36) (37)
Losses Loss Expenses
Unpaid Unpaid
- ------------------------------
<S> <C> <C>
1. 0 0
2. 0 0
3. 0 0
4. 0 0
5. 0 0
6. 0 0
7. 0 0
8. 0 0
9. 0 0
10. 0 0
11. 0 0
- ------------------------------
12. 0 0
- ------------------------------
</TABLE>
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE
COMPANY (COMBINED)
SCHEDULE P - PART 1G - SPECIAL LIABILITY
(OCEAN, MARINE, AIRCRAFT (ALL PERILS),
BOILER AND MACHINERY)
($000 Omitted)
<TABLE>
<CAPTION>
==============================================================================================================
(1) PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS
Years in ------------------------------------------------------------------------------------------
Which (2) (3) (4) LOSS PAYMENTS ALLOCATED LOSS EXPENSE PAYMENTS
Premiums -----------------------------------------------------
Were Earned (5) (6) (7) (8)
and Losses Direct and Net Direct and Direct and
Were Incurred Assumed Ceded (Cols. 2-3) Assumed Ceded Assumed Ceded
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior XXX XXX XXX 81 218 101 29
2. 1988 97,175 52,950 44,225 53,360 30,148 3,493 1,094
3. 1989 90,050 50,496 39,554 119,211 91,312 5,946 2,699
4. 1990 83,386 54,096 29,290 68,761 49,598 3,397 1,325
5. 1991 105,852 76,884 28,968 48,925 35,682 3,072 1,615
6. 1992 102,056 72,237 29,819 45,118 30,901 2,152 929
7. 1993 112,791 71,326 41,465 47,775 26,106 1,892 886
8. 1994 131,909 69,343 62,566 54,072 31,290 1,247 508
9. 1995 161,865 78,258 83,607 32,491 14,945 990 330
10. 1996 154,620 66,721 87,899 38,436 13,759 1,799 1,177
11. 1997 129,376 46,826 82,550 31,681 14,933 134 48
- --------------------------------------------------------------------------------------------------------------
12. TOTALS XXX XXX XXX 539,911 338,892 24,223 10,640
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
===============================================================================================
(1) (13)
Years in -------------------------------------
Which UNALLOCATED LOSS EXPENSE PAYMENTS (11) (12) Number of
Premiums ------------------------------------- Total Claims
Were Earned (9) (10) Salvage and Net Paid Reported -
and Losses Direct and Subrogation (Cols.5-6 Direct and
Were Incurred Assumed Ceded Received +7-8+9-10) Assumed
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior 0 0 116 (65) XXX
2. 1988 0 0 2,165 25,611 XXX
3. 1989 0 0 1,681 31,146 XXX
4. 1990 0 0 1,365 21,235 XXX
5. 1991 0 0 1,523 14,700 XXX
6. 1992 0 0 632 15,440 XXX
7. 1993 1,282 0 661 23,957 XXX
8. 1994 1,823 0 1,753 25,344 XXX
9. 1995 1,882 0 734 20,088 XXX
10. 1996 1,967 0 618 27,266 XXX
11. 1997 1,780 0 4 18,614 XXX
- ------------------------------------------------------------------------------------------------
12. TOTALS 8,734 0 11,252 223,336 XXX
- ------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID UNALLOCATED LOSS EXPENSES UNPAID
-----------------------------------------------------------------------------------------------------------------------------
CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR (22) (23)
--------------------------------------------------------------------------------------------------
(14) (15) (16) (17) (18) (19) (20) (21)
Direct and Direct and Direct and Direct and Direct and
Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 2,182 411 1,088 187 0 0 75 40 3 0
2. 1,700 974 494 145 0 0 43 3 15 0
3. 5,106 3,810 788 235 0 0 93 1 24 0
4. 4,181 2,503 1,237 372 0 0 182 1 27 0
5. 3,201 2,434 1,678 443 0 0 254 9 14 0
6. 4,872 2,557 2,603 731 0 0 652 27 47 0
7. 2,488 1,493 5,743 1,563 0 0 780 1 136 0
8. 13,807 10,220 12,068 3,243 0 0 1,850 41 155 0
9. 14,448 11,027 20,638 5,372 0 0 3,291 176 208 0
10. 21,199 13,900 29,566 7,969 0 0 4,536 271 1,001 0
11. 35,525 22,883 37,712 9,917 0 0 6,133 251 3,108 0
- ------------------------------------------------------------------------------------------------------------------------------------
12. 108,709 72,212 113,615 30,177 0 0 17,889 821 4,738 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
===============================================
(24) (25) (26)
Number of
Total Net Claims
Salvage and Losses and Outstanding -
Subrogation Expenses Direct and
Anticipated Unpaid Assumed
- -----------------------------------------------
<S> <C> <C> <C>
1. 132 2,710 453
2. 58 1,130 143
3. 104 1,965 163
4. 141 2,751 101
5. 105 2,261 140
6. 217 4,859 184
7. 268 6,090 271
8. 630 14,376 445
9. 915 22,010 581
10. 1,410 34,162 922
11. 1,984 49,427 745
- -----------------------------------------------
12. 5,964 141,741 4,148
- -----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
============================================================================================================================
LOSS AND LOSS EXPENSES PERCENTAGE NONTABULAR (35)
TOTAL LOSSES AND LOSS EXPENSES INCURRED (Incurred/Premiums Earned) DISCOUNT
-----------------------------------------------------------------------------------------------------
Inter-Company
(27) (28) (29) (30) (31) (32) (33) (34) Pooling
Direct and Direct and Loss Participation
Assumed Ceded Net Assumed Ceded Net Loss Expense Percentage
- ----------------------------------------------------------------------------------------------------------------------------
1. XXX XXX XXX XXX XXX XXX 0 0 XXX
2. 59,105 32,365 26,740 60.8 61.1 60.5 0 0 50.0
3. 131,168 98,056 33,112 145.7 194.2 83.7 0 0 58.9
4. 77,785 53,799 23,986 93.3 99.5 81.9 0 0 66.9
5. 57,144 40,183 16,961 54.0 52.3 58.6 0 0 69.7
6. 55,444 35,145 20,299 54.3 48.7 68.1 0 0 71.5
7. 60,096 30,049 30,047 53.3 42.1 72.5 0 0 76.5
8. 85,022 45,302 39,720 64.5 65.3 63.5 0 0 85.7
9. 73,948 31,850 42,098 45.7 40.7 50.4 0 0 90.0
10. 98,504 37,076 61,428 63.7 55.6 69.9 0 0 90.0
11. 116,073 48,032 68,041 89.7 102.6 82.4 0 0 100.0
- ----------------------------------------------------------------------------------------------------------------------------
12. XXX XXX XXX XXX XXX XXX 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
==============================
NET BALANCE SHEET
RESERVES AFTER DISCOUNT
- ------------------------------
(36) (37)
Losses Loss Expenses
Unpaid Unpaid
- ------------------------------
<S> <C> <C>
1. 2,672 38
2. 1,075 55
3. 1,849 116
4. 2,543 208
5. 2,002 259
6. 4,187 672
7. 5,175 915
8. 12,412 1,964
9. 18,687 3,323
10. 28,896 5,266
11. 40,437 8,990
- ------------------------------
12. 119,935 21,806
- ------------------------------
</TABLE>
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE
COMPANY (COMBINED)
SCHEDULE P - PART 1H - SECTION 1
OTHER LIABILITY - OCCURRENCE
($000 Omitted)
<TABLE>
<CAPTION>
============================================================================================================
(1) PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS
Years in ----------------------------------------------------------------------------------------
Which (2) (3) (4) LOSS PAYMENTS ALLOCATED LOSS EXPENSE PAYMENTS
Premiums ---------------------------------------------------
Were Earned (5) (6) (7) (8)
and Losses Direct and Net Direct and Direct and
Were Incurred Assumed Ceded (Cols. 2-3) Assumed Ceded Assumed Ceded
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior XXX XXX XXX 551 56 603 181
2. 1988 22,264 10,018 12,246 10,751 4,169 5,662 2,298
3. 1989 30,497 14,177 16,320 14,006 6,406 4,866 1,405
4. 1990 29,819 10,899 18,920 14,150 5,329 6,100 1,683
5. 1991 25,877 5,962 19,915 14,203 2,971 5,715 796
6. 1992 17,471 2,251 15,220 5,327 345 1,945 82
7. 1993 12,003 1,329 10,674 3,818 315 1,478 118
8. 1994 7,739 857 6,882 1,971 66 779 64
9. 1995 4,517 224 4,293 786 3 251 8
10. 1996 3,305 92 3,213 82 0 20 0
11. 1997 2,053 36 2,017 41 0 3 0
- ------------------------------------------------------------------------------------------------------------
12. TOTALS XXX XXX XXX 65,686 19,660 27,422 6,635
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
==========================================================================================
(1) (13)
Years in -----------------------------------
Which UNALLOCATED LOSS EXPENSE PAYMENTS (11) (12) Number of
Premiums ----------------------------------- Total Claims
Were Earned (9) (10) Salvage and Net Paid Reported -
and Losses Direct and Subrogation (Cols.5-6 Direct and
Were Incurred Assumed Ceded Received +7-8+9-10) Assumed
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior 0 0 14 917 XXX
2. 1988 0 0 386 9,946 744
3. 1989 0 0 333 11,061 781
4. 1990 0 0 279 13,238 792
5. 1991 0 0 286 16,151 811
6. 1992 0 0 163 6,845 535
7. 1993 56 0 54 4,919 307
8. 1994 112 0 33 2,732 219
9. 1995 13 0 7 1,039 103
10. 1996 12 0 12 114 64
11. 1997 30 0 7 74 22
- ------------------------------------------------------------------------------------------
12. TOTALS 223 0 1,574 67,036 XXX
- ------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID UNALLOCATED LOSS EXPENSES UNPAID
-----------------------------------------------------------------------------------------------------------------------------
CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR (22) (23)
--------------------------------------------------------------------------------------------------
(14) (15) (16) (17) (18) (19) (20) (21)
Direct and Direct and Direct and Direct and Direct and
Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 13,535 9,769 6,253 2,267 0 0 352 175 31 0
2. 1,309 424 757 140 0 0 149 55 39 0
3. 600 213 1,626 309 0 0 235 84 35 0
4. 1,818 556 2,783 586 0 0 358 129 243 0
5. 3,504 624 6,199 1,622 0 0 405 150 118 0
6. 2,535 200 5,263 1,549 0 0 478 133 49 0
7. 2,954 252 3,825 1,155 0 0 769 199 175 0
8. 2,692 208 3,309 1,000 0 0 887 205 59 0
9. 1,346 26 2,240 552 0 0 437 101 21 0
10. 464 0 2,083 215 0 0 416 38 86 0
11. 211 0 2,000 205 0 0 676 62 708 0
- ------------------------------------------------------------------------------------------------------------------------------------
12. 30,968 12,272 36,338 9,600 0 0 5,162 1,331 1,564 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
===============================================
(24) (25) (26)
Number of
Total Net Claims
Salvage and Losses and Outstanding -
Subrogation Expenses Direct and
Anticipated Unpaid Assumed
- -----------------------------------------------
<S> <C> <C> <C>
1. 73 7,960 769
2. 17 1,635 61
3. 17 1,890 45
4. 37 3,931 74
5. 83 7,830 85
6. 69 6,443 78
7. 61 6,117 104
8. 55 5,534 85
9. 35 3,365 37
10. 27 2,796 25
11. 23 3,328 18
- -----------------------------------------------
12. 497 50,829 1,381
- -----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
============================================================================================================================
LOSS AND LOSS EXPENSES PERCENTAGE NONTABULAR (35)
TOTAL LOSSES AND LOSS EXPENSES INCURRED (Incurred/Premiums Earned) DISCOUNT
-----------------------------------------------------------------------------------------------------
Inter-Company
(27) (28) (29) (30) (31) (32) (33) (34) Pooling
Direct and Direct and Loss Participation
Assumed Ceded Net Assumed Ceded Net Loss Expense Percentage
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. XXX XXX XXX XXX XXX XXX 0 0 XXX
2. 18,667 7,086 11,581 83.3 70.7 94.6 0 0 50.0
3. 21,368 8,417 12,951 70.1 59.4 79.4 0 0 58.7
4. 25,452 8,283 17,169 85.4 76.0 90.7 0 0 66.9
5. 30,144 6,163 23,981 116.5 103.4 120.4 0 0 89.7
6. 15,597 2,309 13,288 89.3 102.6 87.3 0 0 91.5
7. 13,075 2,039 11,036 108.9 153.4 103.4 0 0 91.5
8. 9,809 1,543 8,266 126.7 180.0 120.1 0 0 95.7
9. 5,094 691 4,403 112.8 308.5 102.6 0 0 100.0
10. 3,163 252 2,911 95.7 273.9 90.6 0 0 100.0
11. 3,669 267 3,402 178.7 741.7 168.7 0 0 100.0
- ----------------------------------------------------------------------------------------------------------------------------
12. XXX XXX XXX XXX XXX XXX 0 0 XXX
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
=====================================
NET BALANCE SHEET
RESERVES AFTER DISCOUNT
- -------------------------------------
(36) (37)
Losses Loss Expenses
Unpaid Unpaid
- -------------------------------------
<S> <C> <C>
1. 7,752 208
2. 1,502 133
3. 1,704 186
4. 3,459 472
5. 7,457 373
6. 6,049 394
7. 5,372 745
8. 4,793 741
9. 3,008 357
10. 2,332 464
11. 2,006 1,322
- -------------------------------------
12. 45,434 5,395
- -------------------------------------
</TABLE>
<PAGE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE
COMPANY (COMBINED)
SCHEDULE P - PART 1H - SECTION 2
OTHER LIABILTY -V CLAIMS-MADE
($000 Omitted)
<TABLE>
<CAPTION>
============================================================================================================
(1) PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS
Years in ----------------------------------------------------------------------------------------
Which (2) (3) (4) LOSS PAYMENTS ALLOCATED LOSS EXPENSE PAYMENTS
Premiums ---------------------------------------------------
Were Earned (5) (6) (7) (8)
and Losses Direct and Net Direct and Direct and
Were Incurred Assumed Ceded (Cols. 2-3) Assumed Ceded Assumed Ceded
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior XXX XXX XXX 0 0 22 (3)
2. 1988 13,920 6,561 7,359 4,167 2,714 1,013 649
3. 1989 16,090 6,692 9,398 1,809 643 3,704 2,075
4. 1990 15,300 5,893 9,407 2,431 809 1,959 832
5. 1991 12,415 3,201 9,214 2,334 304 540 188
6. 1992 8,205 993 7,212 675 67 544 53
7. 1993 6,218 422 5,796 1,038 92 390 35
8. 1994 4,583 262 4,321 1,401 120 569 47
9. 1995 3,933 204 3,729 61 6 76 1
10. 1996 3,194 52 3,142 51 0 145 0
11. 1997 2,347 36 2,311 0 0 2 1
- -----------------------------------------------------------------------------------------------------------
12. TOTALS XXX XXX XXX 13,967 4,755 8,964 3,878
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
===============================================================================================
(1) (13)
Years in -----------------------------------
Which UNALLOCATED LOSS EXPENSE PAYMENTS (11) (12) Number of
Premiums ----------------------------------- Total Claims
Were Earned (9) (10) Salvage and Net Paid Reported -
and Losses Direct and Subrogation (Cols.5-6 Direct and
Were Incurred Assumed Ceded Received +7-8+9-10) Assumed
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 25 XXX
2. 1988 0 0 296 1,817 106
3. 1989 0 0 2 2,795 112
4. 1990 0 0 701 2,749 154
5. 1991 0 0 200 2,382 113
6. 1992 0 0 5 1,099 71
7. 1993 23 0 64 1,324 57
8. 1994 18 0 173 1,821 39
9. 1995 18 0 44 148 47
10. 1996 10 0 4 206 19
11. 1997 31 0 0 32 19
- ---------------------------------------------------------------------------------------------
12. TOTALS 100 0 1,489 14,398 XXX
- ---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID UNALLOCATED LOSS EXPENSES UNPAID
-----------------------------------------------------------------------------------------------------------------------------
CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR (22) (23)
--------------------------------------------------------------------------------------------------
(14) (15) (16) (17) (18) (19) (20) (21)
Direct and Direct and Direct and Direct and Direct and
Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 2,128 954 46 27 0 0 7 4 0 0
2. 526 232 617 215 0 0 41 13 4 0
3. 187 67 957 425 0 0 60 25 0 0
4. 956 266 1,288 572 0 0 74 31 49 0
5. 552 53 2,043 942 0 0 105 47 164 0
6. 71 8 2,176 1,036 0 0 273 141 9 0
7. 314 25 1,787 610 0 0 179 71 44 0
8. 427 37 1,542 274 0 0 94 8 0 0
9. 114 1 1,546 218 0 0 241 22 5 0
10. 264 1 1,463 149 0 0 243 22 41 0
11. 213 13 1,619 164 0 0 282 25 258 0
- ------------------------------------------------------------------------------------------------------------------------------------
12. 5,752 1,657 15,084 4,632 0 0 1,599 409 574 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
===============================================
(24) (25) (26)
Number of
Total Net Claims
Salvage and Losses and Outstanding -
Subrogation Expenses Direct and
Anticipated Unpaid Assumed
- -----------------------------------------------
<S> <C> <C> <C>
1. 0 1,196 22
2. 17 728 9
3. 6 687 11
4. 14 1,498 12
5. 15 1,822 6
6. 12 1,344 5
7. 14 1,618 15
8. 17 1,744 11
9. 14 1,665 16
10. 15 1,839 7
11. 16 2,170 14
- -----------------------------------------------
12. 140 16,311 128
- -----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
============================================================================================================================
LOSS AND LOSS EXPENSES PERCENTAGE NONTABULAR (35)
TOTAL LOSSES AND LOSS EXPENSES INCURRED (Incurred/Premiums Earned) DISCOUNT
-----------------------------------------------------------------------------------------------------
Inter-Company
(27) (28) (29) (30) (31) (32) (33) (34) Pooling
Direct and Direct and Loss Participation
Assumed Ceded Net Assumed Ceded Net Loss Expense Percentage
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. XXX XXX XXX XXX XXX XXX 0 0 XXX
2. 6,368 3,823 2,545 45.7 58.3 34.6 0 0 50.0
3. 6,717 3,235 3,482 41.7 48.3 37.1 0 0 58.9
4. 6,757 2,510 4,247 44.2 42.6 45.1 0 0 66.9
5. 5,738 1,534 4,204 46.2 47.9 45.6 0 0 89.7
6. 3,748 1,305 2,443 45.7 131.4 33.9 0 0 91.5
7. 3,775 833 2,942 60.7 197.4 50.8 0 0 91.5
8. 4,051 486 3,565 88.4 185.5 82.5 0 0 95.7
9. 2,061 248 1,813 52.4 121.6 48.6 0 0 100.0
10. 2,217 172 2,045 69.4 330.8 65.1 0 0 100.0
11. 2,405 203 2,202 102.5 563.9 95.3 0 0 100.0
- ----------------------------------------------------------------------------------------------------------------------------
12. XXX XXX XXX XXX XXX XXX 0 0 XXX
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
==============================
NET BALANCE SHEET
RESERVES AFTER DISCOUNT
- ------------------------------
(36) (37)
Losses Loss Expenses
Unpaid Unpaid
- ------------------------------
<S> <C> <C>
1. 1,193 3
2. 696 32
3. 652 35
4. 1,406 92
5. 1,600 222
6. 1,203 141
7. 1,466 152
8. 1,658 86
9. 1,441 224
10. 1,577 262
11. 1,655 515
- ------------------------------
12. 14,547 1,764
- ------------------------------
</TABLE>
<PAGE>
ANNUAL STATEMENT FOR THE TEAR 1997 OF THE NEW YORK MARINE AND GENERAL
INSURANCE COMPANY (COMBINED)
SCHEDULE P - PART 1I - SPECIAL PROPERTY (FIRE, ALLIED
LINES, INLAND MARINE, EARTHQUAKE, BURGLARY & THEFT)
($000 omitted)
<TABLE>
<CAPTION>
===================================================================================================================
(1) PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS
Years in -----------------------------------------------------------------------------------------------
Which (2) (3) (4) LOSS PAYMENTS ALLOCATED LOSS EXPENSE PAYMENTS
Premiums ----------------------------------------------------------
Were Earned (5) (6) (7) (8)
and Losses Direct and Net Direct and Direct and
Were Incurred Assumed Ceded (Cols. 2-3) Assumed Ceded Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior XXX XXX XXX 5,003 5,079 453 340
2. 1996 6,778 4,277 2,501 2,915 997 161 50
3. 1997 1,594 979 615 19 (1) 15 1
- ---------------------------------------------------------------------------------------------------------------
4. TOTALS XXX XXX XXX 7,937 6,075 629 391
- ---------------------------------------------------------------------------------------------------------------
<CAPTION>
===============================================================================================
(1) (13)
Years in --------------------------------
Which UNALLOCATED LOSS EXPENSE PAYMENTS (11) (12) Number of
Premiums -------------------------------- Total Net Claims
Were Earned (9) (10) Salvage and Paid (Cols. Reported -
and Losses Direct and Subrogation 5-6+7-8 Direct and
Were Incurred Assumed Ceded Received +9-10) Assumed
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior 0 0 197 37 XXX
2. 1996 20 0 61 2,049 XXX
3. 1997 22 0 5 56 XXX
- ----------------------------------------------------------------------------------------------
4. TOTALS 42 0 263 2,142 XXX
- ----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID UNALLOCATED LOSS EXPENSES UNPAID
-----------------------------------------------------------------------------------------------------------------------------
CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR (22) (23)
--------------------------------------------------------------------------------------------------
(14) (15) (16) (17) (18) (19) (20) (21)
Direct and Direct and Direct and Direct and Direct and
Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 17,241 14,947 5,930 3,143 0 0 1,388 379 87 0
2. 1,441 262 494 214 0 0 97 9 32 0
3. 260 123 167 64 0 0 39 4 105 0
- ------------------------------------------------------------------------------------------------------------------------------------
4. 18,942 15,332 6,591 3,421 0 0 1,524 392 224 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
==============================================
(24) (25) (26)
Number of
Total Net Claims
Salvage and Losses and Outstanding -
Subrogation Expenses Direct and
Anticipated Unpaid Assumed
- ----------------------------------------------
<S> <C> <C> <C>
1. 173 6,177 656
2. 50 1,579 15
3. 8 380 5
- ----------------------------------------------
4. 231 8,136 676
- -----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
LOSS AND LOSS EXPENSES PERCENTAGE NONTABULAR (35)
TOTAL LOSSES AND LOSS EXPENSES INCURRED (Incurred/Premiums Earned) DISCOUNT
-------------------------------------------------------------------------------------------------------
Inter-Company
(27) (28) (29) (30) (31) (32) (33) (34) Pooling
Direct and Direct and Loss Participation
Assumed Ceded Net Assumed Ceded Net Loss Expense Percentage
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. XXX XXX XXX XXX XXX XXX 0 0 XXX
2. 5,160 1,532 3,628 76.1 35.8 145.1 0 0 100.0
3. 627 191 436 39.3 19.5 70.9 0 0 100.0
- ------------------------------------------------------------------------------------------------------------------------------------
4. XXX XXX XXX XXX XXX XXX 0 0 XXX
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
==============================
NET BALANCE SHEET
RESERVES AFTER DISCOUNT
-------------------------
(36) (37)
Losses Loss Expenses
Unpaid Unpaid
- ------------------------------
<S> <C> <C>
1. 5,081 1,096
2. 1,459 120
3. 240 140
- ------------------------------
4. 6,780 1,356
- ------------------------------
</TABLE>
<PAGE>
ANNUAL STATEMENT FOR THE TEAR 1997 OF THE NEW YORK MARINE AND GENERAL
INSURANCE COMPANY (COMBINED)
SCHEDULE P - PART 1J - AUTO PHYSICAL DAMAGE
($000 omitted)
<TABLE>
<CAPTION>
===================================================================================================================
(1) PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS
Years in -----------------------------------------------------------------------------------------------
Which (2) (3) (4) LOSS PAYMENTS ALLOCATED LOSS EXPENSE PAYMENTS
Premiums ----------------------------------------------------------
Were Earned (5) (6) (7) (8)
and Losses Direct and Net Direct and Direct and
Were Incurred Assumed Ceded (Cols. 2-3) Assumed Ceded Assumed Ceded
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior XXX XXX XXX 0 0 0 0
2. 1996 0 0 0 0 0 0 0
3. 1997 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------
4. TOTALS XXX XXX XXX 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------
<CAPTION>
========================================================================================
(1) (13)
Years in --------------------------
Which UNALLOCATED LOSS EXPENSE PAYMENTS (11) (12) Number of
Premiums -------------------------- Total Net Claims
Were Earned (9) (10) Salvage and Paid (Cols. Reported -
and Losses Direct and Subrogation 5-6+7-8 Direct and
Were Incurred Assumed Ceded Received +9-10) Assumed
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 XXX
2. 1996 0 0 0 0 0
3. 1997 0 0 0 0 0
- ----------------------------------------------------------------------------------------
4. TOTALS 0 0 0 0 XXX
- ----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID UNALLOCATED LOSS EXPENSES UNPAID
-----------------------------------------------------------------------------------------------------------------------------
CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR (22) (23)
--------------------------------------------------------------------------------------------------
(14) (15) (16) (17) (18) (19) (20) (21)
Direct and Direct and Direct and Direct and Direct and
Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 0 0 0 0 0 0 0 0 0 0
2. 0 0 0 0 0 0 0 0 0 0
3. 0 0 0 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
4. 0 0 0 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
==============================================
(24) (25) (26)
Number of
Total Net Claims
Salvage and Losses and Outstanding -
Subrogation Expenses Direct and
Anticipated Unpaid Assumed
- ----------------------------------------------
<S> <C> <C> <C>
1. 0 0 0
2. 0 0 0
3. 0 0 0
- ----------------------------------------------
4. 0 0 0
- -----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
LOSS AND LOSS EXPENSES PERCENTAGE NONTABULAR (35)
TOTAL LOSSES AND LOSS EXPENSES INCURRED (Incurred/Premiums Earned) DISCOUNT
-----------------------------------------------------------------------------------------------------
Inter-Company
(27) (28) (29) (30) (31) (32) (33) (34) Pooling
Direct and Direct and Loss Participation
Assumed Ceded Net Assumed Ceded Net Loss Expense Percentage
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. XXX XXX XXX XXX XXX XXX 0 0 XXX
2. 0 0 0 0.0 0.0 0.0 0 0 100.0
3. 0 0 0 0.0 0.0 0.0 0 0 100.0
- -----------------------------------------------------------------------------------------------------------------------------------
4. XXX XXX XXX XXX XXX XXX 0 0 XXX
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
==============================
NET BALANCE SHEET
RESERVES AFTER DISCOUNT
-------------------------
(36) (37)
Losses Loss Expenses
Unpaid Unpaid
- ------------------------------
<S> <C> <C>
1. 0 0
2. 0 0
3. 0 0
- ------------------------------
4. 0 0
- ------------------------------
</TABLE>
<PAGE>
ANNUAL STATEMENT FOR THE TEAR 1997 OF THE NEW YORK MARINE AND GENERAL
INSURANCE COMPANY (COMBINED)
SCHEDULE P - PART 1N - REINSURANCE A
Nonproportional Assumed Property ($000 omitted)
<TABLE>
<CAPTION>
====================================================================================================================
(1) PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS
Years in ------------------------------------------------------------------------------------------------
Which (2) (3) (4) LOSS PAYMENTS ALLOCATED LOSS EXPENSE PAYMENTS
Premiums -----------------------------------------------------------
Were Earned (5) (6) (7) (8)
and Losses Direct and Net Direct and Direct and
Were Incurred Assumed Ceded (Cols. 2-3) Assumed Ceded Assumed Ceded
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Prior XXX XXX XXX 0 0 0 0
2. 1988 0 0 0 0 0 0 0
3. 1989 0 0 0 0 0 0 0
4. 1990 0 0 0 0 0 0 0
5. 1991 0 0 0 0 0 0 0
6. 1992 0 0 0 0 0 0 0
7. 1993 0 0 0 0 0 0 0
8. 1994 25 0 25 0 0 0 0
9. 1995 110 1 109 0 0 0 0
10. 1996 282 2 280 0 0 0 0
11. 1997 44 0 44 0 0 0 0
- -------------------------------------------------------------------------------------------------------------
12. TOTALS XXX XXX XXX 0 0 0 0
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
================================================================================================
(1) (13)
Years in -------------------------------
Which UNALLOCATED LOSS EXPENSE PAYMENTS (11) (12) Number of
Premiums ------------------------------- Total Net Claims
Were Earned (9) (10) Salvage and Paid (Cols. Reported -
and Losses Direct and Subrogation 5-6 Direct and
Were Incurred Assumed Ceded Received +7-8+9-10) Assumed
- --------------------------------------- -------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 XXX
2. 1988 0 0 0 0 XXX
3. 1989 0 0 0 0 XXX
4. 1990 0 0 0 0 XXX
5. 1991 0 0 0 0 XXX
6. 1992 0 0 0 0 XXX
7. 1993 0 0 0 0 XXX
8. 1994 0 0 0 0 XXX
9. 1995 0 0 0 0 XXX
10. 1996 0 0 0 0 XXX
11. 1997 0 0 0 0 XXX
- --------------------------------------- -------------------------------------------------------
12. TOTALS 0 0 0 0 XXX
- --------------------------------------- -------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID UNALLOCATED LOSS EXPENSES UNPAID
-----------------------------------------------------------------------------------------------------------------------------
CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR (22) (23)
--------------------------------------------------------------------------------------------------
(14) (15) (16) (17) (18) (19) (20) (21)
Direct and Direct and Direct and Direct and Direct and
Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded Assumed Ceded
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 0 0 0 0 0 0 0 0 0 0
2. 0 0 0 0 0 0 0 0 0 0
3. 0 0 0 0 0 0 0 0 0 0
4. 0 0 0 0 0 0 0 0 0 0
5. 0 0 0 0 0 0 0 0 0 0
6. 0 0 0 0 0 0 0 0 0 0
7. 0 0 0 0 0 0 0 0 0 0
8. 0 0 0 0 0 0 0 0 0 0
9. 0 0 0 0 0 0 0 0 0 0
10. 0 0 0 0 0 0 0 0 0 0
11. 0 0 0 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
12. 0 0 0 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
===============================================
(24) (25) (26)
Number of
Total Net Claims
Salvage and Losses and Outstanding -
Subrogation Expenses Direct and
Anticipated Unpaid Assumed
- -----------------------------------------------
<S> <C> <C> <C>
1. 0 0 XXX
2. 0 0 XXX
3. 0 0 XXX
4. 0 0 XXX
5. 0 0 XXX
6. 0 0 XXX
7. 0 0 XXX
8. 0 0 XXX
9. 0 0 XXX
10. 0 0 XXX
11. 0 0 XXX
- -----------------------------------------------
12. 0 0 XXX
- -----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
LOSS AND LOSS EXPENSES PERCENTAGE NONTABULAR (35)
TOTAL LOSSES AND LOSS EXPENSES INCURRED (Incurred/Premiums Earned) DISCOUNT
-----------------------------------------------------------------------------------------------------
Inter-Company
(27) (28) (29) (30) (31) (32) (33) (34) Pooling
Direct and Direct and Loss Participation
Assumed Ceded Net Assumed Ceded Net Loss Expense Percentage
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. XXX XXX XXX XXX XXX XXX 0 0 XXX
2. 0 0 0 0.0 0.0 0.0 0 0 0.0
3. 0 0 0 0.0 0.0 0.0 0 0 0.0
4. 0 0 0 0.0 0.0 0.0 0 0 0.0
5. 0 0 0 0.0 0.0 0.0 0 0 0.0
6. 0 0 0 0.0 0.0 0.0 0 0 0.0
7. 0 0 0 0.0 0.0 0.0 0 0 0.0
8. 0 0 0 0.0 0.0 0.0 0 0 0.0
9. 0 0 0 0.0 0.0 0.0 0 0 100.0
10. 0 0 0 0.0 0.0 0.0 0 0 100.0
11. 0 0 0 0.0 0.0 0.0 0 0 100.0
- ------------------------------------------------------------------------------------------------------------------------------------
12. XXX XXX XXX XXX XXX XXX 0 0 XXX
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
==============================
NET BALANCE SHEET
RESERVES AFTER DISCOUNT
- ------------------------------
(36) (37)
Losses Loss Expenses
Unpaid Unpaid
- ------------------------------
<S> <C> <C>
1. 0 0
2. 0 0
3. 0 0
4. 0 0
5. 0 0
6. 0 0
7. 0 0
8. 0 0
9. 0 0
10. 0 0
11. 0 0
- ------------------------------
12. 0 0
- ------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 2A -- HOMEOWNERS/FARMOWNERS
<CAPTION>
====================================================================================================================================
(1) INCURRED LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED) Development
Years in --------------------------------------------------------------------------------------- ------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 One Year Two Year
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 N O N E 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
12. TOTALS 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 2B
PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 N O N E 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
12. TOTALS 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 2D
COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 37 24 9 (15) (28)
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 2 2 0 X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
12. TOTALS (15) (28)
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 2D -- WORKER'S COMPENSATION
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 N O N E 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
12. TOTALS 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 2E -- COMMERCIAL MULTIPLE PERIL
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 N O N E 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
12. TOTALS 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 2F -- SECTION 1
MEDICAL MALPRACTICE -- OCCURRENCE
<CAPTION>
====================================================================================================================================
(1) INCURRED PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED) Development
Years in --------------------------------------------------------------------------------------- ------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 One Year Two Year
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 N O N E 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
12. TOTALS 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 2F -- SECTION 2
MEDICAL MALPRACTICE -- CLAIMS--MADE
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 N O N E 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
12. TOTALS 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 2G -- SPECIAL LIABILITY
(OCEAN MARINE, AIRCRAFT (ALL PERILS),
BOILER AND MACHINERY)
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 53,105 50,897 48,120 47,328 44,002 40,750 36,533 34,628 33,629 32,343 (1,286) (2,285)
2. 1988 29,417 28,783 28,755 28,726 28,548 28,179 26,708 26,460 26,679 26,725 46 265
3. 1989 X X X 27,432 28,864 32,921 33,399 34,410 33,157 33,756 33,640 33,088 (552) (668)
4. 1990 X X X X X X 23,560 22,663 25,224 25,219 25,952 24,621 24,769 23,959 (810) (662)
5. 1991 X X X X X X X X X 20,396 20,130 21,867 19,201 17,859 17,226 16,947 (279) (912)
6. 1992 X X X X X X X X X X X X 24,000 23,447 21,007 20,515 20,509 20,252 (257) (263)
7. 1993 X X X X X X X X X X X X X X X 34,720 32,498 32,593 30,094 28,629 (1,465) (3,964)
8. 1994 X X X X X X X X X X X X X X X X X X 45,604 44,788 41,388 37,742 (3,646) (7,046)
9. 1995 X X X X X X X X X X X X X X X X X X X X X 56,863 48,119 40,008 (8,111) (16,855)
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 63,413 58,460 (4,953) X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 63,153 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
12. TOTALS (21,313) (32,390)
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 2H -- SECTION 1
OTHER LIABILITY -- OCCURRENCE
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 9,123 8,522 8,532 6,719 6,807 7,440 8,553 9,185 12,093 12,825 732 3,640
2. 1988 7,589 7,935 9,442 10,940 10,998 11,034 11,249 11,278 11,503 11,542 39 264
3. 1989 X X X 13,135 12,692 12,877 13,859 14,138 14,888 14,792 14,000 12,916 (1,084) (1,876)
4. 1990 X X X X X X 13,267 13,545 14,918 16,148 17,082 16,932 16,848 16,926 78 (6)
5. 1991 X X X X X X X X X 15,891 17,084 18,229 21,968 23,002 23,999 23,863 (136) 861
6. 1992 X X X X X X X X X X X X 14,934 13,605 13,214 13,269 14,177 13,239 (938) (30)
7. 1993 X X X X X X X X X X X X X X X 10,653 9,823 9,759 10,811 10,805 (6) 1,046
8. 1994 X X X X X X X X X X X X X X X X X X 6,665 6,850 8,053 8,095 42 1,245
9. 1995 X X X X X X X X X X X X X X X X X X X X X 4,956 4,470 4,369 (101) (587)
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 3,093 2,813 (280) X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 2,664 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
12. TOTALS (1,654) 4,557
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 2H -- SECTION 2
OTHER LIABILITY -- CLAIMS--MADE
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 3,469 3,766 2,734 2,314 1,413 1,364 1,480 1,420 1,343 2,168 825 748
2. 1988 7,922 7,225 4,740 3,978 3,735 2,933 3,031 2,878 2,756 2,541 (215) (337)
3. 1989 X X X 7,069 5,706 5,760 5,683 4,556 3,979 3,857 3,637 3,482 (155) (375)
4. 1990 X X X X X X 7,126 5,868 4,697 3,768 4,788 4,558 4,221 4,198 (23) (360)
5. 1991 X X X X X X X X X 6,302 4,570 4,179 3,734 3,726 4,194 4,040 (154) 314
6. 1992 X X X X X X X X X X X X 5,206 4,867 4,423 3,536 2,730 2,434 (296) (1,102)
7. 1993 X X X X X X X X X X X X X X X 3,314 3,578 3,366 3,024 2,875 (149) (491)
8. 1994 X X X X X X X X X X X X X X X X X X 2,877 3,530 3,979 3,547 (432) 17
9. 1995 X X X X X X X X X X X X X X X X X X X X X 2,820 2,176 1,790 (386) (1,030)
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 2,591 1,994 (597) X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 1,913 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
12. TOTALS (1,582) (2,616)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 2I -- SPECIAL PROPERTY (FIRE,
ALLIED LINES, INLAND MARINE, EARTHQUAKE,
GLASS, BURGLARY, AND THEFT)
<CAPTION>
====================================================================================================================================
(1) INCURRED PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED) Development
Years in --------------------------------------------------------------------------------------- ------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 One Year Two Year
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X X X X X X X X X X 17,640 16,417 14,408 (2,009) (3,232)
2. 1996 X X X X X X X X X X X X X X X N O N E X X X X X X 2,654 3,576 922 X X X
3. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 309 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
4. TOTALS (1,087) (3,232)
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 2J -- AUTO PHYSICAL DAMAGE
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
2. 1996 X X X X X X X X X X X X X X X N O N E X X X X X X 0 0 0 X X X
3. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
4. TOTALS 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 2K - FIDELITY, SURETY
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
2. 1996 X X X X X X X X X X X X X X X N O N E X X X X X X 0 0 0 X X X
3. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
4. TOTALS 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 2L -- OTHER
(INCLUDING CREDIT, ACCIDENT AND HEALTH)
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
2. 1996 X X X X X X X X X X X X X X X N O N E X X X X X X 0 0 0 X X X
3. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
4. TOTALS 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 2M -- INTERNATIONAL
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 N O N E 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
12. TOTALS 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 2N -- REINSURANCE A
Nonproportional Assumed Property
<CAPTION>
====================================================================================================================================
(1) INCURRED PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED) Development
Years in --------------------------------------------------------------------------------------- ------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 One Year Two Year
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
12. TOTALS 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 2O -- REINSURANCE B
Nonproportional Assumed Liability
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 N O N E 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
12. TOTALS 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 2P -- REINSURANCE C
Nonproportional Assumed Financial Lines
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 N O N E 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
12. TOTALS 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 3A -- HOMEOWNERS/FARMOWNERS
<CAPTION>
====================================================================================================================================
CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED) (12) (13)
(1) --------------------------------------------------------------------------------------- --------------------------
Years in Number of Number of
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) Claims Claims
Losses Were Closed With Without
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Loss Payment Loss Payment
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 N O N E 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 3 3
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 1 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 3B
PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 N O N E 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 3D
COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 9 9 9 3 1
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 2 2 1 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 3D -- WORKER'S COMPENSATION
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 N O N E 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 3E -- COMMERCIAL MULTIPLE PERIL
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 N O N E 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 3F -- SECTION 1
MEDICAL MALPRACTICE -- OCCURRENCE
<CAPTION>
====================================================================================================================================
CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED) (12) (13)
(1) --------------------------------------------------------------------------------------- --------------------------
Years in Number of Number of
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) Claims Claims
Losses Were Closed With Without
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Loss Payment Loss Payment
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 3F -- SECTION 2
MEDICAL MALPRACTICE -- CLAIMS MADE
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 3G -- SPECIAL LIABILITY
(OCEAN MARINE, AIRCRAFT (ALL PERILS),
BOILER AND MACHINERY)
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 9,724 15,261 21,290 22,163 25,081 27,044 29,451 29,704 29,638 X X X X X X
2. 1988 4,257 10,158 14,543 18,316 19,873 21,003 23,224 24,184 25,194 25,611 X X X X X X
3. 1989 X X X 4,687 13,043 18,129 21,312 25,434 27,928 29,299 30,676 31,146 X X X X X X
4. 1990 X X X X X X 1,188 6,363 10,243 14,125 18,219 19,797 20,804 21,235 X X X X X X
5. 1991 X X X X X X X X X 1,933 4,862 9,849 11,471 12,863 14,249 14,700 X X X X X X
6. 1992 X X X X X X X X X X X X 1,781 6,642 9,583 12,285 14,372 15,440 X X X X X X
7. 1993 X X X X X X X X X X X X X X X 4,093 12,546 17,525 20,223 22,675 X X X X X X
8. 1994 X X X X X X X X X X X X X X X X X X 7,897 16,212 20,381 23,521 X X X X X X
9. 1995 X X X X X X X X X X X X X X X X X X X X X 6,667 13,978 18,206 X X X X X X
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 13,287 25,299 X X X X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 16,834 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 3H -- SECTION 1
OTHER LIABILITY -- OCCURRENCE
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 281 511 852 (84) 866 1,963 3,061 3,980 4,897 0 0
2. 1988 12 735 1,117 3,301 4,082 5,432 7,151 8,797 9,286 9,946 0 0
3. 1989 X X X 39 222 1,101 1,733 4,631 7,689 9,440 10,555 11,061 449 287
4. 1990 X X X X X X 41 332 313 3,833 6,630 8,410 10,244 13,238 334 384
5. 1991 X X X X X X X X X 56 (215) 2,985 7,392 10,285 14,191 16,151 343 383
6. 1992 X X X X X X X X X X X X (100) 712 1,282 3,597 5,827 6,845 195 262
7. 1993 X X X X X X X X X X X X X X X 20 169 841 2,637 4,863 109 94
8. 1994 X X X X X X X X X X X X X X X X X X 42 175 1,654 2,620 60 74
9. 1995 X X X X X X X X X X X X X X X X X X X X X 438 674 1,026 49 17
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 18 102 16 23
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 44 3 1
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 3H -- SECTION 2
OTHER LIABILITY -- CLAIMS MADE
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 251 303 339 502 662 713 920 947 972 0 0
2. 1988 1 2 137 796 1,408 1,604 1,774 1,531 1,800 1,817 0 0
3. 1989 X X X 0 45 573 2,094 2,486 2,764 2,788 2,794 2,795 41 60
4. 1990 X X X X X X 13 81 401 920 1,058 1,762 2,502 2,749 38 104
5. 1991 X X X X X X X X X 4 175 621 1,259 1,397 1,654 2,382 33 74
6. 1992 X X X X X X X X X X X X 55 349 974 1,016 1,052 1,099 25 41
7. 1993 X X X X X X X X X X X X X X X 9 456 997 1,095 1,301 29 13
8. 1994 X X X X X X X X X X X X X X X X X X 8 513 1,609 1,803 14 14
9. 1995 X X X X X X X X X X X X X X X X X X X X X 30 80 130 7 24
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 125 196 3 9
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 1 0 5
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 3I -- SPECIAL PROPERTY (FIRE,
ALLIED LINES, INLAND MARINE, EARTHQUAKE,
GLASS, BURGLARY, AND THEFT)
<CAPTION>
====================================================================================================================================
CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED) (12) (13)
(1) --------------------------------------------------------------------------------------- --------------------------
Years in Number of Number of
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) Claims Claims
Losses Were Closed With Without
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Loss Payment Loss Payment
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X X X X X X X X X X 0 0 0 8,277 8,314 X X X X X X
2. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 1,580 2,029 X X X X X X
3. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 34 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 3J -- AUTO PHYSICAL DAMAGE
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0 0 0
2. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
3. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 3K - FIDELITY/SURETY
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X X X X X X X X X X 0 0 0 0 0 X X X X X X
2. 1996 X X X X X X X X X X X X X X X N O N E X X X X X X 0 0 X X X X X X
3. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 3L -- OTHER
(INCLUDING CREDIT, ACCIDENT AND HEALTH)
<CAPTION>
====================================================================================================================================
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X X X X
2. 1996 X X X X X X X X X X X X X X X N O N E X X X X X X 0 0 X X X X X X
3. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 3M -- INTERNATIONAL
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0 X X X X X X
2. 1988 0 0 0 0 0 0 0 0 0 0 X X X X X X
3. 1989 X X X 0 0 0 0 0 0 0 0 0 X X X X X X
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 X X X X X X
5. 1991 X X X X X X X X X 0 0 N O N E 0 0 0 0 X X X X X X
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 X X X X X X
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 X X X X X X
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 X X X X X X
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X X X X
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 X X X X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 3N -- REINSURANCE A
Nonproportional Assumed Property
<CAPTION>
====================================================================================================================================
CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED) (12) (13)
(1) --------------------------------------------------------------------------------------- --------------------------
Years in Number of Number of
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) Claims Claims
Losses Were Closed With Without
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Loss Payment Loss Payment
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0 X X X X X X
2. 1988 0 0 0 0 0 0 0 0 0 0 X X X X X X
3. 1989 X X X 0 0 0 0 0 0 0 0 0 X X X X X X
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 X X X X X X
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 X X X X X X
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 X X X X X X
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 X X X X X X
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 X X X X X X
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X X X X
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 X X X X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 3O -- REINSURANCE B
Nonproportional Assumed Liability
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0 X X X X X X
2. 1988 0 0 0 0 0 0 0 0 0 0 X X X X X X
3. 1989 X X X 0 0 0 0 0 0 0 0 0 X X X X X X
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 X X X X X X
5. 1991 X X X X X X X X X 0 0 N O N E 0 0 0 0 X X X X X X
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 X X X X X X
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 X X X X X X
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 X X X X X X
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X X X X
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 X X X X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 3P -- REINSURANCE C
Nonproportional Assumed Financial Lines
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0 X X X X X X
2. 1988 0 0 0 0 0 0 0 0 0 0 X X X X X X
3. 1989 X X X 0 0 0 0 0 0 0 0 0 X X X X X X
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 X X X X X X
5. 1991 X X X X X X X X X 0 0 N O N E 0 0 0 0 X X X X X X
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 X X X X X X
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 X X X X X X
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 X X X X X X
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 X X X X X X
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 X X X X X X
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 4A -- HOMEOWNERS/FARMOWNERS
<CAPTION>
====================================================================================================================
(1) BULK AND INCURRED BUT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED)
Years in ----------------------------------------------------------------------------------------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 N O N E 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- --------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 4B
PRIVATE PASSENGER AUTO LIABILITIES/MEDICAL
<CAPTION>
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 N O N E 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 4D
COMMERCIAL AUTO/TRUCK LIABILITIES/MEDICAL
<CAPTION>
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 25 15 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 4D -- WORKER'S COMPENSATION
<CAPTION>
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 N O N E 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 4E -- COMMERCIAL MULTIPLE PERIL
<CAPTION>
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 N O N E 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 4F -- SECTION 1
MEDICAL MALPRACTICE -- OCCURRENCE
<CAPTION>
===================================================================================================================
(1) BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED)
Years in ------------------------------------------------------------------------------------------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 4F -- SECTION 2
MEDICAL MALPRACTICE -- CLAIMS MADE
<CAPTION>
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 4G -- SPECIAL LIABILITY
(OCEAN MARINE, AIRCRAFT (ALL PERILS),
BOILER AND MACHINERY)
<CAPTION>
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 24,649 16,438 10,507 6,693 4,114 2,460 975 802 879 935
2. 1988 17,241 10,033 5,446 3,382 2,108 1,374 781 499 348 389
3. 1989 X X X 16,022 8,493 4,840 3,132 2,089 1,349 982 746 645
4. 1990 X X X X X X 16,059 8,978 5,512 3,984 2,382 1,707 1,199 1,046
5. 1991 X X X X X X X X X 12,294 9,238 6,650 4,330 3,028 2,099 1,480
6. 1992 X X X X X X X X X X X X 18,114 11,250 7,551 5,441 3,691 2,497
7. 1993 X X X X X X X X X X X X X X X 23,771 14,120 10,131 7,170 4,959
8. 1994 X X X X X X X X X X X X X X X X X X 30,864 21,693 14,830 10,634
9. 1995 X X X X X X X X X X X X X X X X X X X X X 42,478 29,027 18,381
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 39,947 25,862
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 33,677
- -------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 4H -- SECTION 1
OTHER LIABILITY -- OCCURRENCE
<CAPTION>
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 6,924 6,097 5,205 3,200 2,635 2,032 2,082 2,292 3,485 4,163
2. 1988 6,824 5,023 5,353 3,901 3,644 2,965 1,944 1,401 1,068 711
3. 1989 X X X 11,967 9,390 6,440 5,509 4,456 3,769 3,182 2,290 1,468
4. 1990 X X X X X X 12,350 10,020 8,344 6,754 5,495 4,734 3,403 2,426
5. 1991 X X X X X X X X X 14,040 11,686 8,350 7,474 7,263 5,864 4,832
6. 1992 X X X X X X X X X X X X 13,717 10,061 7,397 6,087 5,415 4,059
7. 1993 X X X X X X X X X X X X X X X 9,575 6,742 5,858 4,511 3,240
8. 1994 X X X X X X X X X X X X X X X X X X 6,240 4,489 3,493 2,991
9. 1995 X X X X X X X X X X X X X X X X X X X X X 3,917 2,609 2,024
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 2,923 2,246
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 2,409
- -------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 4H -- SECTION 2
OTHER LIABILITY -- CLAIMS -- MADE
<CAPTION>
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 3,314 2,999 1,737 1,022 586 379 234 237 189 22
2. 1988 7,398 6,500 3,278 2,318 1,326 842 533 533 388 430
3. 1989 X X X 6,541 4,189 3,326 1,904 1,317 855 847 621 567
4. 1990 X X X X X X 6,600 5,006 2,866 2,002 1,317 1,117 792 759
5. 1991 X X X X X X X X X 5,743 3,288 2,627 1,721 1,403 1,029 1,159
6. 1992 X X X X X X X X X X X X 4,680 3,340 2,400 2,012 1,414 1,272
7. 1993 X X X X X X X X X X X X X X X 3,213 2,137 1,744 1,350 1,285
8. 1994 X X X X X X X X X X X X X X X X X X 2,213 1,816 1,491 1,354
9. 1995 X X X X X X X X X X X X X X X X X X X X X 2,465 1,906 1,547
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 2,090 1,535
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 1,712
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 4I -- SPECIAL PROPERTY (FIRE,
ALLIED LINES, INLAND MARINE, EARTHQUAKE,
GLASS, BURGLARY, AND THEFT)
<CAPTION>
===================================================================================================================
(1) BULK AND INCURRED NOT BUT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED)
Years in ------------------------------------------------------------------------------------------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X X X X X X X X X X 6,788 5,489 3,796
2. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 576 368
3. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 138
- -------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 4J -- AUTO PHYSICAL DAMAGE
<CAPTION>
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X X X X X X X X X X 0 0 0
2. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0
3. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 4K - FIDELITY, SURETY
<CAPTION>
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X X X X X X X X X X 0 0
2. 1996 X X X X X X X X X X X X N O N E X X X X X X X X X 0 0
3. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 4L -- OTHER
(INCLUDING CREDIT, ACCIDENT AND HEALTH)
<CAPTION>
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior X X X X X X X X X X X X X X X X X X X X X 0 0 0
2. 1996 X X X X X X X X X X X X N O N E X X X X X X X X X 0 0
3. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 4M -- INTERNATIONAL
<CAPTION>
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 N O N E 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 4N -- REINSURANCE A
Nonproportional Assumed Property
<CAPTION>
===================================================================================================================
(1) BULK AND INCURRED BUT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED)
Years in ---------------------------------------------------------------------------------------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 4O -- REINSURANCE B
Nonproportional Assumed Liability
<CAPTION>
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 N O N E 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 4P -- REINSURANCE C
Nonproportional Assumed Financial Lines
<CAPTION>
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 N O N E 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 5C -- COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
SECTION 1
<CAPTION>
=======================================================================================================
(1) CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END
Years in ---------------------------------------------------------------------------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned
and
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 3 3 3
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 1 1
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
SECTION 2
<CAPTION>
=======================================================================================================
(1) NUMBER OF CLAIMS OUTSTANDING AND ASSUMED AT YEAR END
Years in ---------------------------------------------------------------------------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned
and
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 2 2 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
SECTION 3
<CAPTION>
=======================================================================================================
(1) CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED YEAR END
Years in ---------------------------------------------------------------------------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned
and
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 6 6 6
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 1 1
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 5H -- OTHER LIABILITY -- OCCUERRENCE
SECTION 1A
<CAPTION>
=======================================================================================================
(1) CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END
Years in ---------------------------------------------------------------------------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned
and
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 4 27 133 208 291 363 380 421 449
4. 1990 X X X X X X 3 22 78 157 241 257 289 334
5. 1991 X X X X X X X X X 1 29 91 160 206 281 343
6. 1992 X X X X X X X X X X X X 2 25 64 111 161 195
7. 1993 X X X X X X X X X X X X X X X 0 9 36 64 109
8. 1994 X X X X X X X X X X X X X X X X X X 2 12 32 60
9. 1995 X X X X X X X X X X X X X X X X X X X X X 24 36 49
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 3 16
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 3
- -------------------------------------------------------------------------------------------------------
SECTION 2A
<CAPTION>
=======================================================================================================
(1) NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END
Years in ---------------------------------------------------------------------------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned
and
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 3,478 3,414 3,296 3,102 2,985 2,926 2,546 2,501 2,181 769
2. 1988 193 391 447 357 365 250 175 168 80 61
3. 1989 X X X 214 435 437 469 312 225 178 84 45
4. 1990 X X X X X X 150 330 385 318 252 184 113 74
5. 1991 X X X X X X X X X 171 350 324 323 265 152 85
6. 1992 X X X X X X X X X X X X 144 217 235 194 120 78
7. 1993 X X X X X X X X X X X X X X X 82 160 161 151 104
8. 1994 X X X X X X X X X X X X X X X X X X 44 110 113 85
9. 1995 X X X X X X X X X X X X X X X X X X X X X 27 53 37
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 32 25
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 18
- -------------------------------------------------------------------------------------------------------
SECTION 3A
<CAPTION>
=======================================================================================================
(1) CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED YEAR END
Years in ---------------------------------------------------------------------------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned
and
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 240 507 638 749 751 767 774 781 781
4. 1990 X X X X X X 171 407 530 642 703 705 769 792
5. 1991 X X X X X X X X X 187 448 565 663 786 811 811
6. 1992 X X X X X X X X X X X X 154 326 408 504 535 535
7. 1993 X X X X X X X X X X X X X X X 89 192 241 296 307
8. 1994 X X X X X X X X X X X X X X X X X X 46 122 193 219
9. 1995 X X X X X X X X X X X X X X X X X X X X X 51 97 103
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 37 64
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 22
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 5H -- OTHER LIABILITY -- CLAIMS-MADE
SECTION 1B
<CAPTION>
=======================================================================================================
(1) CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END
Years in ---------------------------------------------------------------------------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned
and
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 1 3 12 17 25 29 36 41
4. 1990 X X X X X X 0 1 8 16 23 31 36 38
5. 1991 X X X X X X X X X 0 3 10 15 21 26 33
6. 1992 X X X X X X X X X X X X 2 4 11 16 20 25
7. 1993 X X X X X X X X X X X X 0 0 9 18 23 29
8. 1994 X X X X X X X X X X X X X X X X X X 2 7 10 14
9. 1995 X X X X X X X X X X X X X X X X X X X X X 1 5 7
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 1 3
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
- -------------------------------------------------------------------------------------------------------
SECTION 2B
<CAPTION>
=======================================================================================================
(1) NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END
Years in ---------------------------------------------------------------------------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned
and
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 81 87 99 113 121 131 108 105 89 15
2. 1988 40 51 56 61 70 73 39 32 31 9
3. 1989 X X X 52 61 68 61 65 49 39 21 11
4. 1990 X X X X X X 46 59 59 53 44 36 23 12
5. 1991 X X X X X X X X X 28 47 45 38 31 20 6
6. 1992 X X X X X X X X X X X X 27 46 36 30 21 5
7. 1993 X X X X X X X X X X X X X X X 23 32 30 23 15
8. 1994 X X X X X X X X X X X X X X X X X X 19 20 16 11
9. 1995 X X X X X X X X X X X X X X X X X X X X X 21 26 16
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 11 7
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 14
- -------------------------------------------------------------------------------------------------------
SECTION 3B
<CAPTION>
=======================================================================================================
(1) CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED YEAR END
Years in ---------------------------------------------------------------------------------------
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned
and
Losses Were
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 52 62 71 73 82 91 101 112 112
4. 1990 X X X X X X 46 60 67 69 73 109 152 154
5. 1991 X X X X X X X X X 28 50 55 57 89 113 113
6. 1992 X X X X X X X X X X X X 29 50 53 70 70 71
7. 1993 X X X X X X X X X X X X X X X 24 44 54 55 57
8. 1994 X X X X X X X X X X X X X X X X X X 22 29 37 39
9. 1995 X X X X X X X X X X X X X X X X X X X X X 22 39 47
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 12 19
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 19
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 6C -- COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
SECTION 1
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 36 40 40 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
13. Earned
Premiums
(Sch P-Pt 1) 0 0 0 0 0 0 0 36 4 0 X X X
- --------------------------------------------------------------------------------------------------------------------
SECTION 2
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 3 5 5 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
13. Earned
Premiums
(Sch P-Pt 1) 0 0 0 0 0 0 0 3 2 0 X X X
- --------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 6D-- WORKER'S COMPENSATION
SECTION 1
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X N O N E X X X 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
13. Earned
Premiums
(Sch P-Pt 1) 0 0 0 0 0 0 0 0 0 0 X X X
- --------------------------------------------------------------------------------------------------------------------
SECTION 2
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X N O N E X X X 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
13. Earned
Premiums
(Sch P-Pt 1) 0 0 0 0 0 0 0 0 0 0 X X X
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARINE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 6E-- COMMERCIAL MULTIPLE PERIL
SECTION 1
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X N O N E X X X 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
13. Earned
Premiums
(Sch P-Pt 1) 0 0 0 0 0 0 0 0 0 0 X X X
- --------------------------------------------------------------------------------------------------------------------
SECTION 2
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X N O N E X X X 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
13. Earned
Premiums
(Sch P-Pt 1) 0 0 0 0 0 0 0 0 0 0 X X X
- --------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 6H -- OTHER LIABILITY -- OCCURRENCE
SECTION 1A
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 (4)
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 165
7. 1993 X X X X X X X X X X X X X X X 4,979 9,435 9,960 9,722 9,722 0
8. 1994 X X X X X X X X X X X X X X X X X X 3,532 6,104 6,239 6,239 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 1,450 3,066 3,124 58
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 1,427 2,425 988
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 836 836
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 2,053
13. Earned
Premiums
(Sch P-Pt 1) 22,264 30,497 29,819 25,877 17,471 12,003 7,739 4,517 3,305 2,053 X X X
- --------------------------------------------------------------------------------------------------------------------
SECTION 2A
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 15
7. 1993 X X X X X X X X X X X X X X X 549 1,422 1,415 1,422 1,422 0
8. 1994 X X X X X X X X X X X X X X X X X X 392 33 35 35 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 38 106 106 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 5 26 21
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 36
13. Earned
Premiums
(Sch P-Pt 1) 10,018 14,177 10,899 5,962 2,251 1,329 857 224 92 36 X X X
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARNE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 6H -- OTHER LIABILITY -- CLAIMS-MADE
SECTION 1B
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 7
7. 1993 X X X X X X X X X X X X X X X 2,926 5,355 5,403 5,431 5,442 11
8. 1994 X X X X X X X X X X X X X X X X X X 2,045 4,085 4,151 4,151 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 1,820 3,482 3,543 61
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 1,415 2,523 1,108
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 1,160 1,160
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 2,347
13. Earned
Premiums
(Sch P-Pt 1) 13,920 16,090 15,300 12,415 8,205 6,218 4,583 3,933 3,194 2,347 X X X
- --------------------------------------------------------------------------------------------------------------------
SECTION 2B
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 (1)
7. 1993 X X X X X X X X X X X X X X X 250 457 455 462 462 0
8. 1994 X X X X X X X X X X X X X X X X X X 143 191 193 194 1
9. 1995 X X X X X X X X X X X X X X X X X X X X X 35 39 18 (21)
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 32 35 3
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 54 54
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 36
13. Earned
Premiums
(Sch P-Pt 1) 6,561 6,692 5,893 3,201 993 422 262 204 52 36 X X X
- --------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 6M-- INTERNATIONAL
SECTION 1
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X N O N E X X X 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
13. Earned
Premiums
(Sch P-Pt 1) 0 0 0 0 0 0 0 0 0 0 X X X
- --------------------------------------------------------------------------------------------------------------------
SECTION 2
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X N O N E X X X 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
13. Earned
Premiums
(Sch P-Pt 1) 0 0 0 0 0 0 0 0 0 0 X X X
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
ANNUAL STATEMENT FOR THE YEAR 1997 OF THE NEW YORK MARNE AND GENERAL INSURANCE COMPANY (COMBINED)
SCHEDULE P -- PART 6N-- REINSURANCE B
Nonproportional Assumed Liability
SECTION 1
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 25 24 24 24 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 111 136 136 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 257 267 10
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 34 34
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 44
13. Earned
Premiums
(Sch P-Pt 1) 0 0 0 0 0 0 25 110 282 44 X X X
- --------------------------------------------------------------------------------------------------------------------
SECTION 2
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X X X X X X X 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 2 2 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
13. Earned
Premiums
(Sch P-Pt 1) 0 0 0 0 0 0 0 1 2 0 X X X
- --------------------------------------------------------------------------------------------------------------------
SCHEDULE P -- PART 6O-- REINSURANCE B
Nonproportional Assumed Liability
SECTION 1
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X N O N E X X X 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
13. Earned
Premiums
(Sch P-Pt 1) 0 0 0 0 0 0 0 0 0 0 X X X
- --------------------------------------------------------------------------------------------------------------------
SECTION 2
<CAPTION>
====================================================================================================================
(1) CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)
Years in --------------------------------------------------------------------------------------- (12)
Which (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Premiums
Were Earned Current
and Year
Losses Were Premiums
Incurred 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Earned
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Prior 0 0 0 0 0 0 0 0 0 0 0
2. 1988 0 0 0 0 0 0 0 0 0 0 0
3. 1989 X X X 0 0 0 0 0 0 0 0 0 0
4. 1990 X X X X X X 0 0 0 0 0 0 0 0 0
5. 1991 X X X X X X X X X 0 0 0 0 0 0 0 0
6. 1992 X X X X X X X X X X X X 0 0 0 0 0 0 0
7. 1993 X X X X X X X X X X X X X X X 0 0 0 0 0 0
8. 1994 X X X X X X X X X X X X N O N E X X X 0 0 0 0 0
9. 1995 X X X X X X X X X X X X X X X X X X X X X 0 0 0 0
10. 1996 X X X X X X X X X X X X X X X X X X X X X X X X 0 0 0
11. 1997 X X X X X X X X X X X X X X X X X X X X X X X X X X X 0 0
12. Total X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 0
13. Earned
Premiums
(Sch P-Pt 1) 0 0 0 0 0 0 0 0 0 0 X X X
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
130
