Metropolitan Property and Casualty Insurance Company ASSETS

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2 ASSETS 2 Current Year Prior Year Net Admitted Nonadmitted Assets Net Assets Assets (Cols. 1-2) Admitted Assets 1. Bonds (Schedule D) ,207,036, ,207,036, ,881,506, Stocks (Schedule D): 2.1 Preferred stocks ,953, ,953, ,322, Common stocks ,144, ,101, ,043, ,206, Mortgage loans on real estate (Schedule B): 3.1 First liens ,269, ,269, Other than first liens Real estate (Schedule A): 4.1 Properties occupied by the company (less $...0 encumbrances) , , , Properties held for the production of income (less $...0 encumbrances) ,839, ,839, ,984, Properties held for sale (less $...0 encumbrances) Cash ($...(115,152,599), Schedule E-Part 1), cash equivalents ($...39,289,743, Schedule E-Part 2) and short-term investments ($...2,499,857, Schedule DA)......(73,362,999) (73,362,999)...(135,724,696) 6. Contract loans (including $...0 premium notes) Derivatives (Schedule DB) ,421, ,421, ,240, Other invested assets (Schedule BA) ,991, ,991, ,555, Receivables for securities , , , Securities lending reinvested collateral assets (Schedule DL) Aggregate write-ins for invested assets , , , Subtotals, cash and invested assets (Lines 1 to 11) ,354,470, ,101, ,353,369, ,916,856, Title plants less $...0 charged off (for Title insurers only) Investment income due and accrued ,055, ,055, ,014, Premiums and considerations: 15.1 Uncollected premiums and agents' balances in the course of collection ,821, ,933, ,888, ,738, Deferred premiums, agents' balances and installments booked but deferred and not yet due (including $...0 earned but unbilled premiums) ,230,529, ,230,529, ,153,431, Accrued retrospective premiums ($...0) and contracts subject to redetermination ($...0) Reinsurance: 16.1 Amounts recoverable from reinsurers ,713, , ,791, ,078, Funds held by or deposited with reinsured companies , , , Other amounts receivable under reinsurance contracts Amounts receivable relating to uninsured plans Current federal and foreign income tax recoverable and interest thereon Net deferred tax asset ,214, ,214, ,463, Guaranty funds receivable or on deposit ,355, ,355, ,119, Electronic data processing equipment and software ,330, ,330, Furniture and equipment, including health care delivery assets ($...0) ,583, ,583, Net adjustment in assets and liabilities due to foreign exchange rates Receivables from parent, subsidiaries and affiliates ,398, ,695, ,702, Health care ($...0) and other amounts receivable Aggregate write-ins for other-than-invested assets ,752, ,277, ,474, ,951, Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines 12 to 25) ,198,274, ,845, ,107,429, ,630,703, From Separate Accounts, Segregated Accounts and Protected Cell Accounts TOTAL (Lines 26 and 27) ,198,274, ,845, ,107,429, ,630,703,169 DETAILS OF WRITE-INS Deposits in connection with investments , , Recoverable on CJV foriegn tax reclaim , Summary of remaining write-ins for Line 11 from overflow page Totals (Lines 1101 through 1103 plus 1198) (Line 11 above) , , , COLI ,483, ,483, ,606, Equities and deposits in pools and associations ,008, ,008, ,390, Deferred expenses ,976, ,976, Summary of remaining write-ins for Line 25 from overflow page ,283, , ,983, ,954, Totals (Lines 2501 through 2503 plus 2598) (Line 25 above) ,752, ,277, ,474, ,951,527

3 LIABILITIES, SURPLUS AND OTHER FUNDS 1 2 Current Year Prior Year 1. Losses (Part 2A, Line 35, Column 8) ,284,505, ,260,657, Reinsurance payable on paid losses and loss adjustment expenses (Schedule F, Part 1, Column 6) , , Loss adjustment expenses (Part 2A, Line 35, Column 9) ,922, ,020, Commissions payable, contingent commissions and other similar charges ,081, ,107, Other expenses (excluding taxes, licenses and fees) ,268, ,244, Taxes, licenses and fees (excluding federal and foreign income taxes) ,349, ,904, Current federal and foreign income taxes (including $...(877,025) on realized capital gains (losses)) ,074, ,019, Net deferred tax liability Borrowed money $...300,000,000 and interest thereon $...330, ,330, Unearned premiums (Part 1A, Line 38, Column 5) (after deducting unearned premiums for ceded reinsurance of $...20,146,417 and including warranty reserves of $...0 and accrued accident and health experience rating refunds including $...0 for medical loss ratio rebate per the Public Health Service Act) ,696,490, ,662,121, Advance premium ,338, ,652, Dividends declared and unpaid: 11.1 Stockholders , , Policyholders , ,200, Ceded reinsurance premiums payable (net of ceding commissions) ,797, ,262, Funds held by company under reinsurance treaties (Schedule F, Part 3, Column 19) Amounts withheld or retained by company for account of others ,074, ,586, Remittances and items not allocated ,654, ,472, Provision for reinsurance (including $...25,054 certified) (Schedule F, Part 8) , Net adjustments in assets and liabilities due to foreign exchange rates Drafts outstanding Payable to parent, subsidiaries and affiliates ,257, ,884, Derivatives ,722, , Payable for securities ,031, Payable for securities lending ,422, Liability for amounts held under uninsured plans Capital notes $...0 and interest thereon $ Aggregate write-ins for liabilities ,727, ,762, Total liabilities excluding protected cell liabilities (Lines 1 through 25) ,841,902, ,359,613, Protected cell liabilities Total liabilities (Lines 26 and 27) ,841,902, ,359,613, Aggregate write-ins for special surplus funds Common capital stock ,000, ,000, Preferred capital stock ,000, ,000, Aggregate write-ins for other-than-special surplus funds Surplus notes Gross paid in and contributed surplus ,101,058, ,101,058, Unassigned funds (surplus) ,469, ,031, Less treasury stock, at cost: shares common (value included in Line 30 $...0) shares preferred (value included in Line 31 $...0) Surplus as regards policyholders (Lines 29 to 35, less 36) (Page 4, Line 39) ,265,527, ,271,089, TOTAL (Page 2, Line 28, Col. 3) ,107,429, ,630,703,169 DETAILS OF WRITE-INS Voluntary employee benefit liability ,751, ,464, Cash collateral received on derivatives ,911, ,249, Miscellaneous , , Summary of remaining write-ins for Line 25 from overflow page Totals (Lines 2501 through 2503 plus 2598) (Line 25 above) ,727, ,762, Summary of remaining write-ins for Line 29 from overflow page Totals (Lines 2901 through 2903 plus 2998) (Line 29 above) Summary of remaining write-ins for Line 32 from overflow page Totals (Lines 3201 through 3203 plus 3298) (Line 32 above)

4 STATEMENT OF INCOME 1 2 UNDERWRITING INCOME Current Year Prior Year 1. Premiums earned (Part 1, Line 35, Column 4) ,583,268, ,527,710,773 DEDUCTIONS: 2. Losses incurred (Part 2, Line 35, Column 7) ,213,397, ,243,415, Loss adjustment expenses incurred (Part 3, Line 25, Column 1) ,215, ,258, Other underwriting expenses incurred (Part 3, Line 25, Column 2) ,639, ,392, Aggregate write-ins for underwriting deductions Total underwriting deductions (Lines 2 through 5) ,500,251, ,535,066, Net income of protected cells Net underwriting gain (loss) (Line 1 minus Line 6 plus Line 7) ,016,883...(7,355,987) INVESTMENT INCOME 9. Net investment income earned (Exhibit of Net Investment Income, Line 17) ,726, ,422, Net realized capital gains (losses) less capital gains tax of $...1,504,047 (Exhibit of Capital Gains (Losses)) ,136, , Net investment gain (loss) (Lines ) ,862, ,139,875 OTHER INCOME 12. Net gain (loss) from agents' or premium balances charged off (amount recovered $...0 amount charged off $...12,812,930)......(12,812,930)...(10,317,343) 13. Finance and service charges not included in premiums ,430, ,898, Aggregate write-ins for miscellaneous income......(10,629,196)...(8,091,289) 15. Total other income (Lines 12 through 14)......(20,011,553)...(14,510,470) 16. Net income before dividends to policyholders, after capital gains tax and before all other federal and foreign income taxes (Lines ) ,867, ,273, Dividends to policyholders , Net income, after dividends to policyholders, after capital gains tax and before all other federal and foreign income taxes (Line 16 minus Line 17) ,400, ,273, Federal and foreign income taxes incurred ,200, ,011, Net income (Line 18 minus Line 19) (to Line 22) ,200, ,261,633 CAPITAL AND SURPLUS ACCOUNT 21. Surplus as regards policyholders, December 31 prior year (Page 4, Line 39, Column 2) ,271,089, ,335,471, Net income (from Line 20) ,200, ,261, Net transfers (to) from Protected Cell accounts Change in net unrealized capital gains or (losses) less capital gains tax of $...2,018, (3,632,810)...44,827, Change in net unrealized foreign exchange capital gain (loss)......(2,148,129)...1,335, Change in net deferred income tax......(45,866,924)...(5,226,608) 27. Change in nonadmitted assets (Exhibit of Nonadmitted Assets, Line 28, Column 3)......(8,938,902)...(3,641,120) 28. Change in provision for reinsurance (Page 3, Line 16, Column 2 minus Column 1)......(276,163) Change in surplus notes Surplus (contributed to) withdrawn from Protected Cells Cumulative effect of changes in accounting principles Capital changes: 32.1 Paid in Transferred from surplus (Stock Dividend) Transferred to surplus Surplus adjustments: 33.1 Paid in Transferred to capital (Stock Dividend) Transferred from capital Net remittances from or (to) Home Office Dividends to stockholders......(190,899,985)...(232,939,139) 36. Change in treasury stock (Page 3, Lines 36.1 and 36.2, Column 2 minus Column 1) Aggregate write-ins for gains and losses in surplus Change in surplus as regards policyholders for the year (Lines 22 through 37)......(5,562,025)...(64,381,938) 39. Surplus as regards policyholders, December 31 current year (Line 21 plus Line 38) (Page 3, Line 37) ,265,527, ,271,089,276 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 0501 through 0503 plus 0598) (Line 5 above) Cash surrender value of COLI ,517, ,238, Miscellaneous......(88,340)...(28,725) Restated quota share - dividends, write-offs, payment fees......(19,058,156)...(16,300,663) Summary of remaining write-ins for Line 14 from overflow page Totals (Lines 1401 through 1403 plus 1498) (Line 14 above)......(10,629,196)...(8,091,289) Summary of remaining write-ins for Line 37 from overflow page Totals (Lines 3701 through 3703 plus 3798) (Line 37 above)

5 CASH FROM OPERATIONS CASH FLOW 1 2 Current Year Prior Year 1. Premiums collected net of reinsurance ,514,885, ,481,922, Net investment income ,101, ,761, Miscellaneous income......(20,011,553)...(14,510,470) 4. Total (Lines 1 through 3) ,723,975, ,628,173, Benefit and loss related payments ,181,846, ,190,023, Net transfers to Separate Accounts, Segregated Accounts and Protected Cell Accounts Commissions, expenses paid and aggregate write-ins for deductions ,274,528, ,289,092, Dividends paid to policyholders , Federal and foreign income taxes paid (recovered) net of $...0 tax on capital gains (losses) ,649,770...(2,771,074) 10. Total (Lines 5 through 9) ,498,991, ,476,344, Net cash from operations (Line 4 minus Line 10) ,983, ,828,691 CASH FROM INVESTMENTS 12. Proceeds from investments sold, matured or repaid: 12.1 Bonds ,937, ,238, Stocks , ,250, Mortgage loans , Real estate , Other invested assets ,117, ,177, Net gains or (losses) on cash, cash equivalents and short-term investments......(80,485)...(123,463) 12.7 Miscellaneous proceeds ,763, Total investment proceeds (Lines 12.1 to 12.7) ,152, ,545, Cost of investments acquired (long-term only): 13.1 Bonds ,185,575, ,819, Stocks ,270, ,814, Mortgage loans ,286, Real estate , , Other invested assets ,493, ,806, Miscellaneous applications , ,841, Total investments acquired (Lines 13.1 to 13.6) ,295,730, ,323, Net increase (decrease) in contract loans and premium notes Net cash from investments (Line 12.8 minus Lines 13.7 minus Line 14)......(312,578,072)...49,222, Cash provided (applied): CASH FROM FINANCING AND MISCELLANEOUS SOURCES 16.1 Surplus notes, capital notes Capital and paid in surplus, less treasury stock Borrowed funds ,000, Net deposits on deposit-type contracts and other insurance liabilities Dividends to stockholders ,724, ,834, Other cash provided (applied) ,680,959...(11,163,133) 17. Net cash from financing and miscellaneous sources (Lines 16.1 to 16.4 minus Line 16.5 plus Line 16.6) ,956,263...(243,997,622) RECONCILIATION OF CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS 18. Net change in cash, cash equivalents and short-term investments (Line 11, plus Lines 15 and 17) ,361,696...(42,946,511) 19. Cash, cash equivalents and short-term investments: 19.1 Beginning of year......(135,724,695)...(92,778,185) 19.2 End of year (Line 18 plus Line 19.1)......(73,362,999)...(135,724,695) Note: Supplemental disclosures of cash flow information for non-cash transactions: Security exchanges ,870, Hyatt Legal Services - written premium ,911, Hyatt Legal Services - professional services provided ,217, Hyatt Legal Services - paid losses ,536, Capitalized interest on bonds ,

6 UNDERWRITING AND INVESTMENT EXHIBIT PART 1 - PREMIUMS EARNED Unearned Premiums Unearned Premiums Net December 31 December 31 Premiums Premiums Prior Year- Current Year- Earned Written per per Col. 3, per Col. 5, During Year Line of Business Column 6, Part 1B Last Year's Part 1 Part 1A (Cols ) 1. Fire ,737, ,542, ,405, ,875, Allied lines......(68,144)...(33,561)...(31,870)...(69,834) 3. Farmowners multiple peril Homeowners multiple peril ,079,238, ,005, ,924, ,096,318, Commercial multiple peril ,757, ,623, ,708, ,673, Mortgage guaranty Ocean marine Inland marine ,111, ,202, ,511, ,802, Financial guaranty Medical professional liability - occurrence Medical professional liability - claims-made Earthquake ,584, ,417, ,053, ,948, Group accident and health Credit accident and health (group and individual) Other accident and health ,884, ,669, ,988, ,565, Workers' compensation Other liability - occurrence ,056, ,821, ,417, ,460, Other liability - claims-made Excess workers' compensation Products liability - occurrence Products liability - claims-made , 19.2 Private passenger auto liability ,378,580, ,461, ,781, ,349,261, , 19.4 Commercial auto liability ,625, , ,630, ,934, Auto physical damage ,016,128, ,471, ,100, ,002,498, Aircraft (all perils) Fidelity Surety Burglary and theft Boiler and machinery Credit International Warranty Reinsurance - nonproportional assumed property Reinsurance - nonproportional assumed liability Reinsurance - nonproportional assumed financial lines Aggregate write-ins for other lines of business TOTALS ,617,637, ,662,121, ,696,490, ,583,268,564 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 34 from overflow page Totals (Lines 3401 through 3403 plus 3498) (Line 34 above)

7 UNDERWRITING AND INVESTMENT EXHIBIT PART 1A - RECAPITULATION OF ALL PREMIUMS Reserve for Amount Unearned Amount Unearned Rate Credits Total Reserve (Running One Year (Running More Than and Retrospective for Unearned or Less from Date One Year from Earned But Adjustments Based Premiums Line of Business of Policy) (a) Date of Policy) (a) Unbilled Premium on Experience Cols Fire ,405, ,405, Allied lines......(31,870) (31,870) 3. Farmowners multiple peril Homeowners multiple peril ,924, ,924, Commercial multiple peril ,708, ,708, Mortgage guaranty Ocean marine Inland marine ,511, ,511, Financial guaranty Medical professional liability - occurrence Medical professional liability - claims-made Earthquake ,053, ,053, Group accident and health Credit accident and health (group and individual) Other accident and health ,988, ,988, Workers' compensation Other liability - occurrence ,375, , ,417, Other liability - claims-made Excess workers' compensation Products liability - occurrence Products liability - claims-made , 19.2 Private passenger auto liability ,781, ,781, , 19.4 Commercial auto liability ,630, ,630, Auto physical damage ,100, ,100, Aircraft (all perils) Fidelity Surety Burglary and theft Boiler and machinery Credit International Warranty Reinsurance - nonproportional assumed property Reinsurance - nonproportional assumed liability Reinsurance - nonproportional assumed financial lines Aggregate write-ins for other lines of business TOTALS ,696,448, , ,696,490, Accrued retrospective premiums based on experience Earned but unbilled premiums Balance (sum of Lines 35 through 37) ,696,490,690 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 34 from overflow page Totals (Lines 3401 through 3403 plus 3498) (Line 34 above) (a) State here basis of computation used in each case: 7

8 UNDERWRITING AND INVESTMENT EXHIBIT PART 1B - PREMIUMS WRITTEN 1 Reinsurance Assumed Reinsurance Ceded Net Premiums Direct Written Business From From To To (Cols Line of Business (a) Affiliates Non-Affiliates Affiliates Non-Affiliates - 4-5) 1. Fire ,862, , ,286, ,737, Allied lines ,181, , ,647,593...(68,144) 3. Farmowners multiple peril Homeowners multiple peril ,643, ,705, ,111, ,079,238, Commercial multiple peril ,201, ,678, , ,757, Mortgage guaranty Ocean marine Inland marine ,832, ,687, , ,111, Financial guaranty Medical professional liability - occurrence Medical professional liability - claims-made Earthquake ,053, ,744, , ,584, Group accident and health Credit accident and health (group and individual) Other accident and health ,884, ,884, Workers' compensation Other liability - occurrence ,929, ,953, , ,056, Other liability - claims-made Excess workers' compensation Products liability - occurrence Products liability - claims-made , 19.2 Private passenger auto liability ,410, ,014,288, ,939, ,057, ,378,580, , 19.4 Commercial auto liability ,891, ,737, , ,625, Auto physical damage ,912, ,297, ,081, ,016,128, Aircraft (all perils) Fidelity Surety Burglary and theft Boiler and machinery Credit International Warranty Reinsurance - nonproportional assumed property......xxx Reinsurance - nonproportional assumed liability......xxx Reinsurance - nonproportional assumed financial lines......xxx Aggregate write-ins for other lines of business TOTALS ,455,804, ,216,653, ,939, ,760, ,617,637,758 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 34 from overflow page Totals (Lines 3401 through 3403 plus 3498) (Line 34 above) (a) Does the company's direct premiums written include premiums recorded on an installment basis? Yes [ ] No [ X ] If yes: 1. The amount of such installment premiums $ Amount at which such installment premiums would have been reported had they been recorded on an annualized basis $

9 9 Annual Statement for the year 2017 of the UNDERWRITING AND INVESTMENT EXHIBIT PART 2 - LOSSES PAID AND INCURRED Losses Paid Less Salvage Percentage of Net Losses Losses Losses Incurred Unpaid Net Losses Incurred (Col. 7, Part 2) Direct Reinsurance Reinsurance Net Payments Current Year Unpaid Current Year to Premiums Earned Line of Business Business Assumed Recovered (Cols ) (Part 2A, Col. 8) Prior Year (Cols ) (Col. 4, Part 1) 1. Fire ,289, , ,003, ,507, ,644, ,866, Allied lines ,333, , ,485,905...(119,540)...143, ,113...(131,697) Farmowners multiple peril Homeowners multiple peril ,087, ,569, ,419, ,238, ,208, ,200, ,246, Commercial multiple peril ,626, ,599, ,226, ,164, ,275, ,115, Mortgage guaranty Ocean marine Inland marine ,391, ,290, , ,676, ,482, ,280, ,879, Financial guaranty Medical professional liability - occurrence Medical professional liability - claims-made Earthquake , , , Group accident and health Credit accident and health (group and individual) Other accident and health ,532, ,532, ,677, ,405, ,805, Workers' compensation Other liability - occurrence ,673, ,420, , ,214, ,587, ,880, ,921, Other liability - claims-made Excess workers' compensation Products liability - occurrence Products liability - claims-made , 19.2 Private passenger auto liability ,241, ,672, ,556, ,357, ,362, ,413, ,306, , 19.4 Commercial auto liability ,465, , ,356, ,274, , ,484, Auto physical damage ,974, ,304, ,486, ,791, ,881, , ,427, Aircraft (all perils) Fidelity Surety Burglary and theft Boiler and machinery Credit International Warranty Reinsurance - nonproportional assumed property......xxx Reinsurance - nonproportional assumed liability......xxx , , ,360, ,274, , Reinsurance - nonproportional assumed financial lines......xxx Aggregate write-ins for other lines of business TOTALS ,615, ,400,767, ,833, ,189,549, ,284,505, ,260,657, ,213,397, DETAILS OF WRITE-INS Summary of remaining write-ins for Line 34 from overflow page xxx Totals (Lines 3401 through 3403 plus 3498) (Line 34 above)

10 10 Annual Statement for the year 2017 of the UNDERWRITING AND INVESTMENT EXHIBIT PART 2A - UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES Reported Losses Incurred But Not Reported Net Losses Excluding Net Incurred but Net Losses Unpaid Loss Reinsurance Deduct Reinsurance not Reported Reinsurance Reinsurance Unpaid Adjustment Line of Business Direct Assumed Recoverable (Cols ) Direct Assumed Ceded (Cols ) Expenses 1. Fire ,268, , ,295, , , ,507, , Allied lines ,938, , ,871, , , , , Farmowners multiple peril Homeowners multiple peril ,164, ,368, ,926, ,606, ,246, ,663, , ,208, ,783, Commercial multiple peril ,173, , ,517, ,612, ,034, ,164, ,654, Mortgage guaranty Ocean marine Inland marine , , , ,485, ,121, , , ,482, , Financial guaranty Medical professional liability - occurrence Medical professional liability - claims-made Earthquake , , , , Group accident and health (a) Credit accident and health (group and individual) Other accident and health ,677, ,677, (a)...2,677, Workers' compensation Other liability - occurrence ,992, ,315, , ,246, ,115, ,358, , ,587, ,607, Other liability - claims-made Excess workers' compensation Products liability - occurrence Products liability - claims-made , 19.2 Private passenger auto liability ,020, ,736, ,167, ,589, ,019, ,206, , ,362, ,281, , 19.4 Commercial auto liability , , ,247, , , ,274, , Auto physical damage ,626, ,511, , ,342,322...(19,438,737)...(27,157,531)...(135,050)...16,881, ,165, Aircraft (all perils) Fidelity Surety Burglary and theft Boiler and machinery Credit International Warranty Reinsurance - nonproportional assumed property......xxx xxx Reinsurance - nonproportional assumed liability......xxx ,160, ,160,747...xxx , ,360, , Reinsurance - nonproportional assumed financial lines......xxx xxx Aggregate write-ins for other lines of business TOTALS ,538, ,626, ,841, ,105,322, ,874, ,077, , ,284,505, ,922,016 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 34 from overflow page Totals (Lines 3401 through 3403 plus 3498) (Line 34 above) (a) Including $...0 for present value of life indemnity claims.

11 1. Claim adjustment services: UNDERWRITING AND INVESTMENT EXHIBIT PART 3 - EXPENSES Other Loss Adjustment Underwriting Investment Expenses Expenses Expenses Total 1.1 Direct ,903, ,903, Reinsurance assumed ,160, ,160, Reinsurance ceded ,054, ,054, Net claim adjustment services ( ) ,009, ,009, Commission and brokerage: 2.1 Direct, excluding contingent ,313, ,313, Reinsurance assumed, excluding contingent ,479, ,479, Reinsurance ceded, excluding contingent ,774, ,774, Contingent - direct ,936, ,936, Contingent - reinsurance assumed ,425, ,425, Contingent - reinsurance ceded Policy and membership fees Net commission and brokerage ( ) ,381, ,381, Allowances to manager and agents Advertising , ,329, ,433, Boards, bureaus and associations ,637, ,547, ,184, Surveys and underwriting reports , ,276, ,297, Audit of assureds' records Salary and related items: 8.1 Salaries ,710, ,638, ,756, ,105, Payroll taxes ,303, ,734, , ,137, Employee relations and welfare ,334, ,000, , ,737, Insurance (28,319) (28,164) 11. Directors' fees Travel and travel items ,848, ,312, , ,234, Rent and rent items ,114, ,153, , ,645, Equipment ,386, ,302, , ,759, Cost or depreciation of EDP equipment and software ,219, ,361, , ,778, Printing and stationery ,021, , , ,961, Postage, telephone and telegraph, exchange and express ,062, ,550, , ,712, Legal and auditing ,132, , , ,016, Totals (Lines 3 to 18) ,896, ,806, ,272, ,975, Taxes, licenses and fees: 20.1 State and local insurance taxes deducting guaranty association credits of $...23, ,464, ,464, Insurance department licenses and fees ,422, ,422, Gross guaranty association assessments ,095, ,095, All other (excluding federal and foreign income and real estate) ,740, ,740, Total taxes, licenses and fees ( ) ,723, ,723, Real estate expenses , , Real estate taxes , , Reimbursements by uninsured plans Aggregate write-ins for miscellaneous expenses ,309, ,587, ,557, ,453, Total expenses incurred ,215, ,639, ,829,730 (a)...1,291,684, Less unpaid expenses - current year ,922, ,699, ,621, Add unpaid expenses - prior year ,020, ,776, ,797, Amounts receivable relating to uninsured plans, prior year Amounts receivable relating to uninsured plans, current year TOTAL EXPENSES PAID (Lines ) ,314, ,715, ,829, ,291,859,739 DETAILS OF WRITE-INS Outside services ,048, ,326, ,294, ,670, Miscellaneous ,160, ,445, , ,868, LAD service fees/ outside services ,021, ,021, Summary of remaining write-ins for Line 24 from overflow page......(899,936)...(6,205,957) (7,105,893) Totals (Lines 2401 through 2403 plus 2498) (Line 24 above) ,309, ,587, ,557, ,453,752 (a) Includes management fees of $...402,988,553 to affiliates and $...46,591,284 to non-affiliates. 11

12 EXHIBIT OF NET INVESTMENT INCOME 1 2 Collected Earned During Year During Year 1. U.S. government bonds... (a)...(35,147)...809, Bonds exempt from U.S. tax... (a)...101,337, ,697, Other bonds (unaffiliated)... (a)...31,188, ,823, Bonds of affiliates... (a) Preferred stocks (unaffiliated)... (b)...2,033, ,059, Preferred stocks of affiliates... (b) Common stocks (unaffiliated) Common stocks of affiliates ,000, ,000, Mortgage loans... (c)...283, , Real estate... (d)...1,368, ,367, Contract loans Cash, cash equivalents and short-term investments... (e)...436, , Derivative instruments... (f)...461, , Other invested assets ,111, ,111, Aggregate write-ins for investment income ,891, ,891, Total gross investment income ,076, ,117, Investment expenses... (g)...4,829, Investment taxes, licenses and fees, excluding federal income taxes... (g) Interest expense... (h)...331, Depreciation on real estate and other invested assets... (i)...229, Aggregate write-ins for deductions from investment income Total deductions (Lines 11 through 15) ,390, Net investment income (Line 10 minus Line 16) ,726,644 DETAILS OF WRITE-INS Interest received - Involuntary Pools and Assocaitions ,689, ,689, Miscellaneous , , Make whole provision , , Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 0901 through 0903 plus 0998) (Line 9 above) ,891, ,891, Summary of remaining write-ins for Line 15 from overflow page Totals (Lines 1501 through 1503 plus 1598) (Line 15 above) (a) Includes $...7,929,388 accrual of discount less $...11,751,280 amortization of premium and less $...4,229,461 paid for accrued interest on purchases. (b) Includes $...0 accrual of discount less $...0 amortization of premium and less $...0 paid for accrued dividends on purchases. (c) Includes $...1,297 accrual of discount less $...0 amortization of premium and less $...0 paid for accrued interest on purchases. (d) Includes $...0 for company's occupancy of its own buildings; and excludes $...0 interest on encumbrances. (e) Includes $...392,651 accrual of discount less $...0 amortization of premium and less $...0 paid for accrued interest on purchases. (f) Includes $...0 accrual of discount less $...0 amortization of premium. (g) Includes $...0 investment expenses and $...0 investment taxes, licenses and fees, excluding federal income taxes, attributable to segregated and Separate Accounts. (h) Includes $...0 interest on surplus notes and $...0 interest on capital notes. (i) Includes $...229,932 depreciation on real estate and $...0 depreciation on other invested assets. EXHIBIT OF CAPITAL GAINS (LOSSES) Realized Change in Gain (Loss) Other Total Realized Change in Unrealized on Sales Realized Capital Gain (Loss) Unrealized Foreign Exchange or Maturity Adjustments (Columns 1 + 2) Capital Gain (Loss) Capital Gain (Loss) 1. U.S. government bonds......(192,584) (192,584) Bonds exempt from U.S. tax ,953, ,953, , Other bonds (unaffiliated) ,498...(287,316)...204,182...(15,422)...4,395, Bonds of affiliates Preferred stocks (unaffiliated) ,072, Preferred stocks of affiliates Common stocks (unaffiliated)......(7,113) (7,113) Common stocks of affiliates (17,540,523) Mortgage loans Real estate Contract loans Cash, cash equivalents and short-term investments......(80,485) (80,485) Derivative instruments ,117, ,117, ,450...(6,851,191) 8. Other invested assets ,663...(88,802)...587, ,163, , Aggregate write-ins for capital gains (losses) ,056, ,056, Total capital gains (losses) ,959, , ,640,072...(1,613,822)...(2,148,128) DETAILS OF WRITE-INS Gain on initial exchange (net) ,327, ,327, Miscellanous (271,349)...(271,349) Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 0901 through 0903 plus 0998) (Line 9 above) ,056, ,056,

13 EXHIBIT OF NONADMITTED ASSETS Current Year Prior Year Change in Total Total Total Nonadmitted Assets Nonadmitted Assets Nonadmitted Assets (Col. 2 - Col. 1) 1. Bonds (Schedule D) Stocks (Schedule D): 2.1 Preferred stocks Common stocks ,101, ,170, , Mortgage loans on real estate (Schedule B): 3.1 First liens Other than first liens Real estate (Schedule A): 4.1 Properties occupied by the company Properties held for the production of income Properties held for sale Cash (Schedule E-Part 1), cash equivalents (Schedule E-Part 2) and short-term investments (Schedule DA) Contract loans Derivatives (Schedule DB) Other invested assets (Schedule BA) Receivables for securities Securities lending reinvested collateral assets (Schedule DL) Aggregate write-ins for invested assets Subtotals, cash and invested assets (Lines 1 to 11) ,101, ,170, , Title plants (for Title insurers only) Investment income due and accrued , , Premiums and considerations: 15.1 Uncollected premiums and agents' balances in the course of collection ,933, ,119, ,185, Deferred premiums, agents' balances and installments booked but deferred and not yet due Accrued retrospective premiums and contracts subject to redetermination Reinsurance: 16.1 Amounts recoverable from reinsurers , ,254...(134,217) 16.2 Funds held by or deposited with reinsured companies Other amounts receivable under reinsurance contracts Amounts receivable relating to uninsured plans Current federal and foreign income tax recoverable and interest thereon Net deferred tax asset ,636, ,636, Guaranty funds receivable or on deposit Electronic data processing equipment and software ,330, ,963,721...(15,366,921) 21. Furniture and equipment, including health care delivery assets ,583, ,894, , Net adjustment in assets and liabilities due to foreign exchange rates Receivables from parent, subsidiaries and affiliates ,695, (2,695,740) 24. Health care and other amounts receivable Aggregate write-ins for other-than-invested assets ,277, ,291, ,014, Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines 12 through 25) ,845, ,906,142...(8,938,902) 27. From Separate Accounts, Segregated Accounts and Protected Cell Accounts TOTALS (Lines 26 and 27) ,845, ,906,142...(8,938,902) DETAILS OF WRITE-INS Summary of remaining write-ins for Line 11 from overflow page Totals (Lines 1101 through 1103 plus 1198) (Line 11 above) Deferred expenses ,976, ,191, ,214, Miscellaneous , ,000...(200,392) Summary of remaining write-ins for Line 25 from overflow page Totals (Lines 2501 through 2503 plus 2598) (Line 25 above) ,277, ,291, ,014,281 13

14 NOTES TO THE FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies and Going Concern A. Accounting Practices (the Company ) presents the accompanying financial statements on the basis of accounting practices prescribed or permitted ( RI SAP ) by the State of Rhode Island ( RI ) Department of Business Regulation, Insurance Division (the Department or RIDBR ). The Department recognizes only the statutory accounting practices prescribed or permitted by Rhode Island in determining and reporting the financial condition and results of operations of an insurance company, in determining its solvency under the Rhode Island Insurance Law. In 2001, the National Association of Insurance Commissioners ( NAIC ) Accounting Practices and Procedures Manual ( NAIC SAP ) was adopted as the basis of RI SAP. Rhode Island has not adopted any prescribed accounting practices that differ from those found in NAIC SAP. A reconciliation of the Company s net income and capital and surplus between RI SAP and NAIC SAP is as follows (in whole dollars): SSAP Number (1) Financial Statement Page Financial Statement Line Number For the Year Ended December 31, 2017 For the Year Ended December 31, 2016 Net income, RI SAP $ 246,200,888 $ 131,261,633 State prescribed practices: NONE State permitted practices: NONE Net income, NAIC SAP $ 246,200,888 $ 131,261,633 December 31, 2017 December 31, 2016 Statutory capital and surplus, RI SAP $ 2,265,527,251 $ 2,271,089,276 State prescribed practices: NONE State permitted practices: NONE Statutory capital and surplus, NAIC SAP $ 2,265,527,251 $ 2,271,089,276 (1) Statement of Statutory Accounting Principles ( SSAP ) The Company s risk-based capital ( RBC ) would not have triggered a regulatory event without the use of the state prescribed practices. B. Use of Estimates in the Preparation of the Financial Statements The preparation of financial statements in conformity with statutory accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. It also requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. All references to realized and unrealized net capital gains (losses), including other than temporary impairments ( OTTI ) and impairments, are pre-tax unless otherwise noted. C. Accounting Policy Premiums are generally recognized as revenue on a pro rata basis over the policy term. The portion of the premiums written applicable to the unexpired terms of the policies is recorded as unearned premiums. In addition, the Company uses the following accounting policies: (1) Short-term investments are stated in the same manner as comparable longer-term investments described below. (2) Bonds not backed by other loans are generally stated at amortized cost unless they have a NAIC rating designation of 3, 4, 5 or 6, which are stated at the lower of amortized cost or fair value. Bonds not backed by other loans are amortized using the scientific method. (3) Common stocks of nonaffiliates are stated at fair value. (4) Redeemable preferred stocks are generally stated at cost or amortized cost unless they have a NAIC rating designation of 3, 4, 5 or 6, in which case such stocks are stated at the lower of cost, amortized cost or fair value. Perpetual preferred stocks are generally stated at fair value unless they have a NAIC rating designation of 3, 4, 5 or 6, in which case such stocks are stated at the lower of cost or fair value. (5) Mortgage loans on real estate are principally stated at amortized cost, net of valuation allowances. (6) Mortgage-backed bonds, included in bonds, are generally stated at amortized cost using the scientific method unless they have a NAIC rating designation of 3, 4, 5, or 6, which are stated at the lower of amortized cost or fair value. Amortization of the discount or premium from the purchase of these securities considers the estimated timing and amount of prepayments of the underlying mortgage loans. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the 14