* * PROPERTY AND CASUALTY COMPANIES - ASSOCIATION EDITION

Transcription

1 * * PROPERTY AND CASUALTY COMPANIES - ASSOCIATION EDITION QUARTERLY STATEMENT AS OF SEPTEMBER 30, 07 OF THE CONDITION AND AFFAIRS OF THE Amica Property and Casualty Insurance Company NAIC Group Code NAIC Company Code 87 Employer's ID Number (Current) (Prior) Organized under the Laws of Rhode Island, State of Domicile or Port of Entry RI Country of Domicile United States of America Incorporated/Organized 05//005 Commenced Business 0/0/006 Statutory Home Office 00 Amica Way, Lincoln, RI, US (Street and Number) (City or Town, State, Country and Zip Code) Main Administrative Office 00 Amica Way (Street and Number) Lincoln, RI, US , (City or Town, State, Country and Zip Code) (Area Code) (Telephone Number) Mail Address P.O. Box 6008, Providence, RI, US (Street and Number or P.O. Box) (City or Town, State, Country and Zip Code) Primary Location of Books and Records 00 Amica Way (Street and Number) Lincoln, RI, US , (City or Town, State, Country and Zip Code) (Area Code) (Telephone Number) Internet Website Address Statutory Statement Contact David Joseph Macedo, (Name) (Area Code) (Telephone Number) dmacedo@amica.com, ( Address) (FAX Number) Chairman, President and Chief Executive Officer Senior Assistant Vice President and Secretary Robert Anthony DiMuccio Suzanne Ellen Casey OFFICERS Senior Vice President, Chief Financial Officer and Treasurer James Parker Loring Jill Holton Andy, Senior Vice President Lisa Maria DeCubellis, Senior Vice President Robert Paul Suglia, Senior Vice President and General Counsel OTHER Robert Karl Benson, Senior Vice President and Chief Investment Officer Peter Ernest Moreau, Senior Vice President & Chief Information Officer Sean Francis Welch, Senior Vice President James Arthur Bussiere, Senior Vice President Theodore Charles Murphy, Chief Operations Officer DIRECTORS OR TRUSTEES Jeffrey Paul Aiken Jill Janice Avery Debra Ann Canales Patricia Walsh Chadwick Edward Francis DeGraan Robert Anthony DiMuccio Barry George Hittner Michael David Jeans Ronald Keith Machtley Richard Alan Plotkin Donald Julian Reaves Cheryl Watkins Snead State of County of Rhode Island Providence SS: The officers of this reporting entity being duly sworn, each depose and say that they are the described officers of said reporting entity, and that on the reporting period stated above, all of the herein described assets were the absolute property of the said reporting entity, free and clear from any liens or claims thereon, except as herein stated, and that this statement, together with related exhibits, schedules and explanations therein contained, annexed or referred to, is a full and true statement of all the assets and liabilities and of the condition and affairs of the said reporting entity as of the reporting period stated above, and of its income and deductions therefrom for the period ended, and have been completed in accordance with the NAIC Annual Statement Instructions and Accounting Practices and Procedures manual except to the extent that: () state law may differ; or, () that state rules or regulations require differences in reporting not related to accounting practices and procedures, according to the best of their information, knowledge and belief, respectively. Furthermore, the scope of this attestation by the described officers also includes the related corresponding electronic filing with the NAIC, when required, that is an exact copy (except for formatting differences due to electronic filing) of the enclosed statement. The electronic filing may be requested by various regulators in lieu of or in addition to the enclosed statement. Robert Anthony DiMuccio Suzanne Ellen Casey James Parker Loring Chairman, President and Chief Executive Officer Senior Assistant Vice President and Secretary Senior Vice President, Chief Financial Officer and Treasurer a. Is this an original filing? Yes [ X ] No [ ] Subscribed and sworn to before me this b. If no, 4th day of November, 07. State the amendment number. Date filed 3. Number of pages attached Ann Marie Octeau Notary Public June 8, 08

2 ASSETS Assets Current Statement Date 4 3 December 3 Net Admitted Assets Prior Year Net Nonadmitted Assets (Cols. - ) Admitted Assets. Bonds 64,09,5 64,09,5 64,000,397. Stocks:. Preferred stocks. Common stocks 3. Mortgage loans on real estate: 3. First liens 95,660 95, Other than first liens 4. Real estate: 4. Properties occupied by the company (less $ encumbrances) 4. Properties held for the production of income (less $ encumbrances) 4.3 Properties held for sale (less $ encumbrances) 5. Cash ($,500 ), cash equivalents ($ 3,696,508 ) and short-term investments ($ 73,573 ) 3,77,58 3,77,58 6,809, Contract loans (including $ premium notes) 7. Derivatives 8. Other invested assets 9. Receivables for securities 0. Securities lending reinvested collateral assets. Aggregate write-ins for invested assets. Subtotals, cash and invested assets (Lines to ) 68,933,49 68,933,49 70,809, Title plants less $ charged off (for Title insurers only) 4. Investment income due and accrued 450, , , Premiums and considerations: 5. Uncollected premiums and agents' balances in the course of collection,54,58 7,583,470,945,84,33 5. Deferred premiums, agents' balances and installments booked but deferred and not yet due (including $ earned but unbilled premiums) 9,50,738 8,009 9,493,79 6,44, Accrued retrospective premiums ($ ) and 6. Reinsurance: contracts subject to redetermination ($ ) 6. Amounts recoverable from reinsurers,99,863,99,863,78,55 6. Funds held by or deposited with reinsured companies 6.3 Other amounts receivable under reinsurance contracts 7. Amounts receivable relating to uninsured plans 8. Current federal and foreign income tax recoverable and interest thereon 8. Net deferred tax asset 433, ,338 33, Guaranty funds receivable or on deposit 0. Electronic data processing equipment and software. Furniture and equipment, including health care delivery assets ($ ). Net adjustment in assets and liabilities due to foreign exchange rates 3. Receivables from parent, subsidiaries and affiliates 4. Health care ($ ) and other amounts receivable 5. Aggregate write-ins for other than invested assets 460, ,049 53, Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines to 5) 83,6,797 79,59 83,54,05 8,954,97 7. From Separate Accounts, Segregated Accounts and Protected Cell Accounts 8. Total (Lines 6 and 7) 83,6,797 79,59 83,54,05 8,954, DETAILS OF WRITE-INS 98. Summary of remaining write-ins for Line from overflow page 99. Totals (Lines 0 through 03 plus 98)(Line above) 50. Receivable for other surcharges 460, ,049 53, Summary of remaining write-ins for Line 5 from overflow page 599. Totals (Lines 50 through 503 plus 598)(Line 5 above) 460, ,049 53,083

3 LIABILITIES, SURPLUS AND OTHER FUNDS Current Statement Date. Losses (current accident year $ ). Reinsurance payable on paid losses and loss adjustment expenses 3. Loss adjustment expenses 4. Commissions payable, contingent commissions and other similar charges December 3, Prior Year 5. Other expenses (excluding taxes, licenses and fees),, , Taxes, licenses and fees (excluding federal and foreign income taxes) 55, Current federal and foreign income taxes (including $ on realized capital gains (losses)) 33,740 37,8 7. Net deferred tax liability 8. Borrowed money $ and interest thereon $ 9. Unearned premiums (after deducting unearned premiums for ceded reinsurance of $ 4,343,564 and including warranty reserves of $ 0 and accrued accident and health experience rating refunds including $ for medical loss ratio rebate per the Public Health Service Act) 0. Advance premium 48,60 6,585. Dividends declared and unpaid:. Stockholders. Policyholders. Ceded reinsurance premiums payable (net of ceding commissions),98,7,093,59 3. Funds held by company under reinsurance treaties 4. Amounts withheld or retained by company for account of others 6,49 6,3 5. Remittances and items not allocated 6. Provision for reinsurance (including $ certified) 7. Net adjustments in assets and liabilities due to foreign exchange rates 8. Drafts outstanding 9. Payable to parent, subsidiaries and affiliates 596,56 858, Derivatives. Payable for securities 39,65. Payable for securities lending 3. Liability for amounts held under uninsured plans 4. Capital notes $ and interest thereon $ 5. Aggregate write-ins for liabilities 6. Total liabilities excluding protected cell liabilities (Lines through 5) 3,90,68,878, Protected cell liabilities 8. Total liabilities (Lines 6 and 7) 3,90,68,878, Aggregate write-ins for special surplus funds 30. Common capital stock 3,500,000 3,500, Preferred capital stock 3. Aggregate write-ins for other than special surplus funds 33. Surplus notes 34. Gross paid in and contributed surplus 48,0,93 48,0, Unassigned funds (surplus) 8,0,394 7,456, Less treasury stock, at cost: 36. shares common (value included in Line 30 $ ) 36. shares preferred (value included in Line 3 $ ) 37. Surplus as regards policyholders (Lines 9 to 35, less 36) 79,63,587 79,076, Totals (Page, Line 8, Col. 3) 83,54,05 8,954, DETAILS OF WRITE-INS 598. Summary of remaining write-ins for Line 5 from overflow page 599. Totals (Lines 50 through 503 plus 598)(Line 5 above) Summary of remaining write-ins for Line 9 from overflow page 999. Totals (Lines 90 through 903 plus 998)(Line 9 above) Summary of remaining write-ins for Line 3 from overflow page 399. Totals (Lines 30 through 303 plus 398)(Line 3 above) 3

4 STATEMENT OF INCOME Current Year to Date Prior Year to Date 3 Prior Year Ended December 3 UNDERWRITING INCOME. Premiums earned:. Direct (written $ 0,44,78 ) 6,4,03 4,8,875 9,774,950. Assumed (written $ ).3 Ceded (written $ 0,44,78 ) 6,4,03 4,8,875 9,774,950.4 Net (written $ ) DEDUCTIONS:. Losses incurred (current accident year $ ):. Direct,09,703 0,855,93 3,985,44. Assumed.3 Ceded,09,703 0,855,93 3,985,44.4 Net 3. Loss adjustment expenses incurred 4. Other underwriting expenses incurred 67,630 (3,8) (65,64) 5. Aggregate write-ins for underwriting deductions 6. Total underwriting deductions (Lines through 5) 67,630 (3,8) (65,64) 7. Net income of protected cells 8. Net underwriting gain or (loss) (Line minus Line 6 + Line 7) (67,630) 3,8 65,64 INVESTMENT INCOME 9. Net investment income earned,4, 850,378,9,9 0. Net realized capital gains (losses) less capital gains tax of $ (5,94) (48,76) 3,80 8,9. Net investment gain (loss) (Lines 9 + 0),37, ,88,3,03 OTHER INCOME. Net gain or (loss) from agents or premium balances charged off (amount recovered $ 37,55 amount charged off $ 359,309 ) (3,784) (343,39) (48,535) 3. Finance and service charges not included in premiums 69,966 73,795 95,96 4. Aggregate write-ins for miscellaneous income (86) 5. Total other income (Lines through 4) (5,004) (69,444) (386,339) 6. Net income before dividends to policyholders, after capital gains tax and before all other federal and foreign income taxes (Lines ) 853,30 77,87,89, Dividends to policyholders 8. Net income, after dividends to policyholders, after capital gains tax and before all other federal and foreign income taxes (Line 6 minus Line 7) 853,30 77,87,89, Federal and foreign income taxes incurred 47,86 48,755 38,83 0. Net income (Line 8 minus Line 9)(to Line ) 46,05 469,7 807,673 CAPITAL AND SURPLUS ACCOUNT. Surplus as regards policyholders, December 3 prior year 79,076,584 78,34,607 78,34,607. Net income (from Line 0) 46,05 469,7 807, Net transfers (to) from Protected Cell accounts 4. Change in net unrealized capital gains (losses) less capital gains tax of $ 5. Change in net unrealized foreign exchange capital gain (loss) 6. Change in net deferred income tax 0,66 (83,880) (5,54) 7. Change in nonadmitted assets 7,37 46,4 49,88 8. Change in provision for reinsurance 9. Change in surplus notes 30. Surplus (contributed to) withdrawn from protected cells 3. Cumulative effect of changes in accounting principles 3. Capital changes: 3. Paid in 3. Transferred from surplus (Stock Dividend) 3.3 Transferred to surplus 33. Surplus adjustments: 33. Paid in 33. Transferred to capital (Stock Dividend) 33.3 Transferred from capital 34. Net remittances from or (to) Home Office 35. Dividends to stockholders 36. Change in treasury stock 37. Aggregate write-ins for gains and losses in surplus 38. Change in surplus as regards policyholders (Lines through 37) 555,003 63,479 94, Surplus as regards policyholders, as of statement date (Lines plus 38) 79,63,587 78,766,086 79,076,584 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 050 through 0503 plus 0598)(Line 5 above) 40. Penalties of regulatory authorities (86) Summary of remaining write-ins for Line 4 from overflow page 499. Totals (Lines 40 through 403 plus 498)(Line 4 above) (86) 370. Change in Guaranty Fund Summary of remaining write-ins for Line 37 from overflow page Totals (Lines 370 through 3703 plus 3798)(Line 37 above) 4

5 Cash from Operations CASH FLOW Current Year To Date Prior Year To Date 3 Prior Year Ended December 3. Premiums collected net of reinsurance (,505,0) (63,793) (637,575). Net investment income,664,445 80,85,79,85 3. Miscellaneous income (79,80) (66,095) (354,878) 4. Total (Lines to 3) (,00,576) (96,037) 87, Benefit and loss related payments,608 (93,07) (6,86) 6. Net transfers to Separate Accounts, Segregated Accounts and Protected Cell Accounts 7. Commissions, expenses paid and aggregate write-ins for deductions (45,05) (8,770) (45,45) 8. Dividends paid to policyholders 9. Federal and foreign income taxes paid (recovered) net of $ tax on capital gains (losses) 405,47 47, , Total (Lines 5 through 9) 38,000 73,047,949. Net cash from operations (Line 4 minus Line 0) (,40,576) (69,084) 64,449 Cash from Investments. Proceeds from investments sold, matured or repaid:. Bonds 3,85,0 4,69,639 6,65,359. Stocks.3 Mortgage loans.4 Real estate.5 Other invested assets.6 Net gains or (losses) on cash, cash equivalents and short-term investments.7 Miscellaneous proceeds 39,653 58,55.8 Total investment proceeds (Lines. to.7) 3,89,763 5,73,794 6,65, Cost of investments acquired (long-term only): 3. Bonds 4,35,356 38,89, 50,378, Stocks 3.3 Mortgage loans 95, Real estate 3.5 Other invested assets 3.6 Miscellaneous applications 3.7 Total investments acquired (Lines 3. to 3.6) 5,305,06 38,89, 50,378, Net increase (or decrease) in contract loans and premium notes 5. Net cash from investments (Line.8 minus Line 3.7 and Line 4) (,43,53) (33,68,47) (43,77,40) 6. Cash provided (applied): 6. Surplus notes, capital notes Cash from Financing and Miscellaneous Sources 6. Capital and paid in surplus, less treasury stock 6.3 Borrowed funds 6.4 Net deposits on deposit-type contracts and other insurance liabilities 6.5 Dividends to stockholders 6.6 Other cash provided (applied) (,930) 35,968 80, Net cash from financing and miscellaneous sources (Line 6. through Line 6.4 minus Line 6.5 plus Line 6.6) (,930) 35,968 80,335 RECONCILIATION OF CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS 8. Net change in cash, cash equivalents and short-term investments (Line, plus Lines 5 and 7) (3,037,759) (33,55,543) (43,38,356) 9. Cash, cash equivalents and short-term investments: 9. Beginning of year 6,809,340 50,9,696 50,9, End of period (Line 8 plus Line 9.) 3,77,58 6,640,53 6,809,340 Note: Supplemental disclosures of cash flow information for non-cash transactions: 5

6 NOTES TO FINANCIAL STATEMENTS Note Summary of Significant Accounting Policies and Going Concern A. Accounting Practices The accompanying financial statements of the Amica Property and Casualty Insurance Company (the Company) have been prepared on the basis of accounting practices prescribed or permitted by the state of Rhode Island. The state of Rhode Island requires insurance companies domiciled in the state of Rhode Island to prepare their statutory financial statements in accordance with the National Association of Insurance Commissioners (NAIC) Accounting Practices and Procedures Manual subject to any deviations prescribed or permitted by the state of Rhode Island Department of Business Regulation Insurance Division. The Company has no state basis statement adjustments to report. A reconciliation of the Company s net income and capital and surplus between NAIC statutory accounting practices (NAIC SAP) and practices prescribed and permitted by the state of Rhode Island as of September 30, 07 and December 3, 06 is shown below: Net Income F/S F/S SSAP # Page Line # 09/30/7 /3/6 () Company state basis (Page 4, Line 0, Columns & ) XXX XXX XXX $46,05 $807,673 () State Prescribed Practices that increase/(decrease) NAIC SAP 0 0 (3) State Permitted Practices that increase/(decrease) NAIC SAP 0 0 (4) NAIC SAP ( 3 = 4) XXX XXX XXX $46,05 $807,673 Surplus (5) Company state basis (Page 3, Line 37, Columns & ) XXX XXX XXX $79,63,587 $79,076,584 (6) State Prescribed Practices that increase/(decrease) NAIC SAP 0 0 (7) State Permitted Practices that increase/(decrease) NAIC SAP 0 0 (8) NAIC SAP (5 6 7 = 8) XXX XXX XXX $79,63,587 $79,076,584 B. Use of Estimates in the Preparation of the Financial Statements C. Accounting Policies -4. No Change. 5. First lien mortgage loans on real estate are reported at the unpaid principal of the loan. 6. Loan-backed bonds and structured securities are valued at amortized cost using the retrospective method (or a method which approximates the retrospective method) No Change. D. Going Concern Management s review of relevant conditions and events, considered in the aggregate, indicate that it is probable that the Company will be able to meet its obligations as they become due within one year after the date that the financial statements are issued. Note Accounting Changes and Correction of Errors Note 3 Business Combinations and Goodwill Note 4 Discontinued Operations Note 5 Investments A. Mortgage Loans, including Mezzanine Real Estate Loans. The Company has invested in four commercial mortgage loans at September 30, 07. The maximum and minimum lending rates were 4.7% and 4.%.. The maximum percentage of any one loan to the value of security at the time of the loan, exclusive of insured or guaranteed or purchase money mortgages, was 64.9%. 3. There were no taxes, assessments or any amounts advanced and not included in the mortgage loan total. 6

7 NOTES TO FINANCIAL STATEMENTS 4. Age Analysis of Mortgage Loans: A. Current Year. Recorded Inv estment (All) Residential Commercial Farm Insured All Other Insured All Other Mezzanine Total (a) Current $0 $0 $0 $0 $95,660 $0 $95,660 (b) Day s Past Due (c) Day s Past Due (d) Day s Past Due (e) 80+ Day s Past Due Accruing Interest Day s Past Due (a) Recorded Inv estment (b) Interest Accrued Accruing Interest 80+ Day s Past Due (a) Recorded Inv estment (b) Interest Accrued Interest Reduced (a) Recorded Inv estment (b) Number of Loans (c) Percent Reduced B. Prior Year. Recorded Inv estment (All) (a) Current (b) Day s Past Due (c) Day s Past Due (d) Day s Past Due (e) 80+ Day s Past Due Accruing Interest Day s Past Due (a) Recorded Inv estment (b) Interest Accrued Accruing Interest 80+ Day s Past Due (a) Recorded Inv estment (b) Interest Accrued Interest Reduced (a) Recorded Inv estment (b) Number of Loans (c) Percent Reduced There were no impaired mortgage loans, mortgage loans derecognized as a result of foreclosure or allowances for credit losses on mortgage loans. B. Debt Restructuring C. Reverse Mortgages D. Loan-Backed Securities. Prepayment assumptions for single class and multi-class mortgage-backed and asset-backed securities were obtained from broker dealer survey values, nationally recognized data services or internal estimates. The Company used Hub Data, Inc. to determine the market value of its loan-backed securities. In 07, there have been no changes from retrospective to prospective methodologies. -3. The Company did not write down any loan-backed securities during the period. 6.

8 NOTES TO FINANCIAL STATEMENTS 4. All impaired securities (fair value is less than amortized cost) for which an other-than-temporary impairment has not been recognized in earnings as a realized loss (including securities with a recognized other-than-temporary impairment for noninterest related declines when a non-recognized interest related impairment remains): a. The aggregate amount of unrealized losses:. Less than Months $ 58,90. Months or Longer $ 7,559 b. The aggregate related fair v alue of securities w ith unrealized losses:. Less than Months $ 4,655,. Months or Longer $,834, All loan-backed and structured securities in an unrealized loss position were reviewed to determine whether other-thantemporary impairments should be recognized. The Company asserts that it has the intent and ability to hold these securities long enough to allow the cost basis of these securities to be recovered. These conclusions are supported by an analysis of the underlying credit of each security. Unrealized losses are primarily attributable to higher interest rates and modestly wider spread levels. It is possible that the Company could recognize other-than-temporary impairments in the future on some of the securities, if future events, information and the passage of time cause it to conclude that declines in the value are other-thantemporary. E. Repurchase Agreements and/or Securities Lending Transactions The Company has no open repurchase agreements or securities lending transactions. F. Real Estate G. Investments in Low-Income Housing Tax Credits (LIHTC) H. Restricted Assets I. Working Capital Finance Investments The Company has no working capital finance investments. J. Offsetting and Netting of Assets and Liabilities The Company does not offset or net assets and liabilities. K. Structured Notes L. 5* Securities M. Short Sales The Company does not engage in short sale transactions. N. Prepayment Penalty and Acceleration Fees General Account. Number of CUSIPs 5. Aggregate Amount of Inv estment Income $,734 Note 6 Joint Ventures, Partnerships and Limited Liability Companies Note 7 Investment Income Note 8 Derivative Instruments 6.

9 NOTES TO FINANCIAL STATEMENTS Note 9 Income Taxes A. Deferred Tax Asset/(Liability). Components of Net Deferred Tax Assets (DTAs) and Net Deferred Liabilities (DTLs) 09/30/7 () () (3) (Col +) Ordinary Capital Total (a) Gross deferred tax assets $445,593 $0 $445,593 (b) Statutory v aluation allow ance adjustment (c) Adjusted gross deferred tax assets (a-b) 445, ,593 (d) Deferred tax assets nonadmitted (e) Subtotal net admitted deferred tax asset (c-d) 445, ,593 (f) Deferred tax liabilities,55 0,55 (g) Net admitted deferred tax asset/(net deferred tax liability ) (e-f) $433,338 $0 $433,338 (4) (5) (6) (Col 4+5) /3/6 Ordinary Capital Total (a) Gross deferred tax assets $338,69 $0 $338,69 (b) Statutory v aluation allow ance adjustment (c) Adjusted gross deferred tax assets (a-b) 338, ,69 (d) Deferred tax assets nonadmitted (e) Subtotal net admitted deferred tax asset (c-d) 338, ,69 (f) Deferred tax liabilities 7,04 0 7,04 (g) Net admitted deferred tax asset/(net deferred tax liability ) (e-f) $33,677 $0 $33,677 (7) (8) (9) (Col -4) (Col -5) (Col 7+8) Change Ordinary Capital Total (a) Gross deferred tax assets $06,90 $0 $06,90 (b) Statutory v aluation allow ance adjustment (c) Adjusted gross deferred tax assets (a-b) 06, ,90 (d) Deferred tax assets nonadmitted (e) Subtotal net admitted deferred tax asset (c-d) 06, ,90 (f) Deferred tax liabilities 5,4 0 5,4 (g) Net admitted deferred tax asset/(net deferred tax liability ) (e-f) $0,66 $0 $0,66 6.3

10 NOTES TO FINANCIAL STATEMENTS. Admission Calculation Components () () (3) (Col +) Ordinary Capital Total 09/30/7 (a) Federal income tax es paid in prior y ears recov erable through loss carry backs $445,593 $0 $445,593 (b) Adjusted gross deferred tax assets ex pected to be realized (ex cluding the amount of deferred tax assets from (a) abov e) after application of the threshold limitation. (The lesser of (b) and (b) below ) Adjusted gross deferred tax assets ex pected to be realized follow ing the balance sheet date Adjusted gross deferred tax assets allow ed per limitation threshold XXX XXX,879,737 (c) Adjusted gross deferred tax assets (Ex cluding the amount of deferred tax assets from (a) and (b) abov e) offset by gross deferred tax liabilities (d) Deferred tax assets admitted as the result of application of SSAP No. 0 $445,593 $0 $445,593 (4) (5) (6) (Col 4+5) /3/6 Ordinary Capital Total (a) Federal income tax es paid in prior y ears recov erable through loss carry backs $338,69 $0 $338,69 (b) Adjusted gross deferred tax assets ex pected to be realized (ex cluding the amount of deferred tax assets from (a) abov e) after application of the threshold limitation. (The lesser of (b) and (b) below ) Adjusted gross deferred tax assets ex pected to be realized follow ing the balance sheet date Adjusted gross deferred tax assets allow ed per limitation threshold XXX XXX,8,736 (c) Adjusted gross deferred tax assets (Ex cluding the amount of deferred tax assets from (a) and (b) abov e) offset by gross deferred tax liabilities (d) Deferred tax assets admitted as the result of application of SSAP No. 0 $338,69 $0 $338,69 (7) (8) (9) (Col -4) (Col -5) (Col 7+8) Change Ordinary Capital Total (a) Federal income tax es paid in prior y ears recov erable through loss carry backs $06,90 $0 $06,90 (b) Adjusted gross deferred tax assets ex pected to be realized (ex cluding the amount of deferred tax assets from (a) abov e) after application of the threshold limitation. (The lesser of (b) and (b) below ) Adjusted gross deferred tax assets ex pected to be realized follow ing the balance sheet date Adjusted gross deferred tax assets allow ed per limitation threshold XXX XXX 68,00 (c) Adjusted gross deferred tax assets (Ex cluding the amount of deferred tax assets from (a) and (b) abov e) offset by gross deferred tax liabilities (d) Deferred tax assets admitted as the result of application of SSAP No. 0 $06,90 $0 $06,90 3. Other Admissibility Criteria (a) Ratio used to determine recov ery period and threshold limitations amount 39487% 396% (b) Amount of adjusted capital and surplus used to determine recov ery period and threshold limitation in (b) abov e $79,98,49 $78,744,

11 NOTES TO FINANCIAL STATEMENTS 4. Impact of Tax Planning Strategies (a) Determination of adjusted gross deferred tax assets and net admitted deferred tax assets, by tax character, as a percentage.. Adjusted gross DTAs amount from 09/30/7 /3/6 Change () () (3) (4) (5) (6) (Col -3) (Col -4) Ordinary Capital Ordinary Capital Ordinary Capital Note 9A(c). $445,593 $0 $338,69 $0 $06,90 $0. Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies. 0% 0% 0% 0% 0% 0% 3. Net admitted adjusted gross DTAs amount from Note 9A(e). $445,593 $0 $338,69 $0 $06,90 $0 4. Percentage of net admitted adjusted gross DTAs by tax character admitted because of the impact of tax planning strategies. 0% 0% 0% 0% 0% 0% (b) Does the Company 's tax -planning strategies include the use of reinsurance? Yes [ ] No [X] B. Deferred Tax Liabilities Not Recognized There are no temporary differences for which deferred tax liabilities are not recognized. C. Current and Deferred Income Taxes. Current Income Tax () () (3) (Col -) 09/30/7 /3/6 Change (a) Federal $47,86 $38,83 $45,003 (b) Foreign (c) Subtotal 47,86 38,83 45,003 (d) Federal income tax on net capital gains (5,94) 0,84 (36,5) (e) Utilization of capital loss carry -forw ards (f) Other (g) Federal and foreign income tax es incurred $40,345 $39,467 $8,

12 NOTES TO FINANCIAL STATEMENTS. Deferred Tax Assets (a) Ordinary : () () (3) (Col -) 09/30/7 /3/6 Change () Discounting of unpaid losses $0 $0 $0 () Unearned premium reserv e 3,37,86,50 (3) Policy holder reserv es (4) Inv estments (5) Deferred acquisition costs (6) Policy holder div idends accrual (7) Fix ed assets (8) Compensation and benefits accrual (9) Pension accrual (0) Receiv ables - nonadmitted 7,857 3,48 4,609 () Net operating loss carry -forw ard () Tax credit carry -forw ard (3) Other (including items <5% of total ordinary tax assets) 44,365 33,58 00,783 (99) Subtotal 445, ,69 06,90 (b) Statutory v aluation allow ance adjustment (c) Nonadmitted (d) Admitted ordinary deferred tax assets (a99-b-c) 445, ,69 06,90 (e) Capital: () Inv estments $0 $0 $0 () Net capital loss carry -forw ard (3) Real estate (4) Other (including items <5% of total capital tax assets) (99) Subtotal (f) Statutory v aluation allow ance adjustment (g) Nonadmitted (h) Admitted capital deferred tax assets (e99-f-g) (i) Admitted deferred tax assets (d + h) $445,593 $338,69 $06,90 3. Deferred Tax Liabilities (a) Ordinary : () () (3) (Col -) 09/30/7 /3/6 Change () Inv estments $,55 $7,04 $5,4 () Fix ed assets (3) Deferred and uncollected premium (4) Policy holder reserv es (5) Other ( including items <5% of total ordinary tax liabilities) (99) Subtotal,55 7,04 5,4 (b) Capital: () Inv estments $0 $0 $0 () Real estate (3) Other ( including items <5% of total ordinary tax liabilities) (99) Subtotal (c) Deferred tax liabilities (3a99 + 3b99) $,55 $7,04 $5,4 4. Net Deferred Tax Assets/(Liabilities) () () (3) (Col -) 09/30/7 /3/6 Change Net deferred tax assets/(liabilities) (i - 3c) $433,338 $33,677 $0,66 6.6

13 NOTES TO FINANCIAL STATEMENTS The change in net deferred income taxes is comprised of the following (this analysis is exclusive of nonadmitted assets as the Change in Nonadmitted Assets is reported separately from the Change in Net Deferred Income Taxes in the surplus section of the Annual Statement): 09/30/7 /3/6 Change Total deferred tax assets $445,593 $338,69 $06,90 Total deferred tax liabilities,55 7,04 5,4 Net deferred tax assets/(liabilities) 433,338 33,677 0,66 Statutory v aluation allow ance adjustment Net deferred tax assets/(liabilities) after SVA 433,338 33,677 0,66 Tax effect of unrealized gains (losses) Statutory v aluation allow ance adjustment allocation to unrealized Change in net deferred tax $433,338 $33,677 $0,66 D. Reconciliation of Federal Income Tax Rate to Actual Effective Rate The provision for Federal income taxes incurred is different from that which would be obtained by applying the statutory Federal income tax rate to income before taxes. Among the more significant book to tax adjustments were the following: 09/30/7 /3/6 Effective Effective Amount Tax Rate Amount Tax Rate Income before tax es $89, % $40, % Change in non-admitted assets 9,564.% 87, % Other % % Total $99, % $507,99 4.3% Federal income tax es incurred $47,86 5.6% $38,83 3.9% Tax on capital gains (losses) (5,94) -3.% 0,84 0.8% Change in net deferred tax es (0,66) -.3% 5,54 9.6% Total statutory income tax es $99, % $507,99 4.3% E. Operating Loss and Tax Credit Carryforwards and Protective Tax Deposits. At September 30, 07, the Company did not have any unused operating loss carryforwards available to offset against future taxable income.. The amounts of Federal income taxes incurred and available for recoupment in the event of future net losses are: Year Total 06 $39, $,86,49 3. The Company did not have any protective tax deposits under Section 6603 of the Internal Revenue Code. F. Consolidated Federal Income Tax Return. For 07, the Company's Federal income tax return is consolidated with the following entities: a. Amica Mutual Insurance Company b. Amica General Agency, LLC c. Amica Life Insurance Company. The method of allocation between the companies is contained in a written agreement approved by the Board of Directors. Allocation is made in accordance with Section 55(a)() of the Internal Revenue Code based upon separate return calculations with current credit for net losses. Intercompany estimated tax balances are settled at least quarterly during the tax year with a final settlement during the month following the filing of the consolidated income tax return. G. Federal or Foreign Federal Income Tax Loss Contingencies Note 0 Information Concerning Parent, Subsidiaries, Affiliates and Other Related Parties A. Nature of Relationships B. Detail of Transactions Greater than ½% of Admitted Assets C. Changes in Terms of Intercompany Arrangements 6.7

14 NOTES TO FINANCIAL STATEMENTS The Consolidated Federal Income Tax Agreement between Amica Mutual Insurance Company (the Parent) and affiliates was amended in 07 to include Amica Life Insurance Company. See note 9F for further information. D. Amounts Due (to) or from Related Parties The Company reported $596,56 and $858,989 due to Amica Mutual Insurance Company at September 30, 07 and December 3, 06, respectively. The amounts due to or from Amica Mutual Insurance Company are settled on a monthly basis. E. Guarantees or Undertakings for Related Parties F. Management, Service Contracts, Cost Sharing Arrangements G. Nature of Relationships that Could Affect Operations H. Amount Deducted for Investment in Upstream Company I. Detail of Investments in Affiliates Greater than 0% of Admitted Assets J. Writedowns for Impairment of Investments in Affiliates K. Foreign Insurance Subsidiary Valued Using CARVM L. Downstream Holding Company Valued Using Look-Through Method M. All Subsidiary, Controlled and Affiliated (SCA) Investments N. Investment in Insurance SCAs Note Debt Not applicable. Note Retirement Plans, Deferred Compensation, Postemployment Benefits and Compensated Absences and Other Postretirement Benefit Plans The Company has no employees. Management and other services are provided by its ultimate parent, Amica Mutual Insurance Company. Note 3 Capital and Surplus, Shareholders Dividend Restrictions and Quasi-Reorganizations Note 4 Liabilities, Contingencies and Assessments Note 5 Leases Note 6 Information About Financial Instruments With Off-Balance Sheet Risk And With Concentrations of Credit Risk Note 7 Sale, Transfer and Servicing of Financial Assets and Extinguishments of Liabilities A. Transfers of Receivables Reported as Sales B. Transfer and Servicing of Financial Assets The Company did not transfer or service financial assets in 07 or 06. C. Wash Sales The Company did not have any wash sales during 07 or 06. Note 8 Gain or Loss to the Reporting Entity from Uninsured Plans and the Uninsured Portion of Partially Insured Plans 6.8

15 NOTES TO FINANCIAL STATEMENTS Note 9 Direct Premiums Written / Produced by Managing General Agents / Third Party Administrators Note 0 Fair Value Measurement A. Assets and Liabilities Measured at Fair Value. Fair Value Measurements at September 30, 07: The Company s valuation techniques are based on observable and unobservable pricing inputs. Observable inputs reflect market data obtained from independent sources based on trades of securities, while unobservable inputs reflect the Company s market assumptions. These inputs comprise the following fair value hierarchy: Level Observable inputs in the form of quoted prices for identical instruments in active markets. Level - Observable inputs other than Level prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be derived from observable market data for substantially the full term of the assets or liabilities. Level 3 One or more unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets and liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using internal models, as well as instruments for which the determination of fair value requires significant management judgment or estimation. The Company had no financial instruments carried at fair value as of September 30, 07.. Rollforward of Level 3 Items As of September 30, 07, the Company did not hold any investments with a Level 3 fair value measurement. There were no purchases, sales, or settlements of Level 3 assets during Policy on Transfers Into and out of Level 3 The Company recognizes transfers between levels at the end of the reporting period. 4. Inputs and Techniques Used for Level and Level 3 Fair Values As of September 30, 07, the Company did not hold any investments with a Level fair value measurement. There were no purchases, sales, or settlements of Level assets during Derivative Fair Values The Company did not hold derivative assets or liabilities at September 30, 07. B. Other Fair Value Disclosures Not applicable. C. Fair Value Measurements for All Financial Instruments at September 30, 07: Not Practicable Aggregate Admitted (Carrying Type of Financial Instrument Fair Value Assets Level Level Level 3 Value) Bonds: U.S. gov ernments $8,770,89 $8,466,658 $3,7,9 $5,64,898 $0 $0 Municipal bonds 3,377,838 3,737,06 0 3,377, U.S. special rev enue and assessments 33,384 3, , Industrial and miscellaneous,70,337,684,56 0,70, Total bonds 64,9,748 64,09,5 3,7,9 6,064, Mortgage loans: Commercial mortgages 976,36 95, , Total mortgage loans 976,36 95, , Cash equiv alents and short-term inv estments: Ex empt money market mutual funds 73,573 73, , Commercial paper 3,696,508 3,696, ,696, Total cash equiv alents and short-term inv estments 3,770,08 3,770,08 0 3,770, Total assets $68,937,965 $68,93,99 $3,7,9 $65,80,674 $0 $0 D. Not Practicable to Estimate Fair Value The Company does not have any securities for which it is not practicable to estimate fair value. Note Other Items 6.9

16 NOTES TO FINANCIAL STATEMENTS Note Events Subsequent Type II Nonrecognized Subsequent Events Subsequent events have been considered through November 4, 07 for the statutory statement issued on November 4, 07. Subsequent to September 30, 07, the Company was licensed to write auto business in Maine and Washington. As with its current book of business, the Company will cede 00% of all premiums, losses and loss expenses to Amica Mutual Insurance Company under the quota share contract. There were no other events occurring subsequent to the end of the year that merited recognition or disclosure in these statements. Note 3 Reinsurance Note 4 Retrospectively Rated Contracts and Contracts Subject to Redetermination The Company does not have any retrospectively rated contracts or contracts subject to redetermination. Note 5 Changes in Incurred Losses and Loss Adjustment Expenses As the result of the 00% quota share reinsurance agreement in the current and prior year, loss and loss adjusting reserves are $0 as of September 30, 07. Consequently, there was no development of loss or loss adjusting reserves in the current year. Note 6 Intercompany Pooling Arrangements Note 7 Structured Settlements Note 8 Health Care Receivables Note 9 Participating Policies Note 30 Premium Deficiency Reserves Note 3 High Deductibles Note 3 Discounting of Liabilities for Unpaid Losses or Unpaid Loss Adjustment Expenses Note 33 Asbestos and Environmental Reserves Note 34 Subscriber Savings Accounts Note 35 Multiple Peril Crop Insurance Note 36 Financial Guaranty Insurance The Company does not write financial guaranty insurance. 6.0

17 GENERAL INTERROGATORIES PART - COMMON INTERROGATORIES GENERAL. Did the reporting entity experience any material transactions requiring the filing of Disclosure of Material Transactions with the State of Domicile, as required by the Model Act? Yes [ ] No [ X ]. If yes, has the report been filed with the domiciliary state? Yes [ ] No [ ]. Has any change been made during the year of this statement in the charter, by-laws, articles of incorporation, or deed of settlement of the reporting entity? Yes [ ] No [ X ]. If yes, date of change: 3. Is the reporting entity a member of an Insurance Holding Company System consisting of two or more affiliated persons, one or more of which is an insurer? Yes [ X ] No [ ] If yes, complete Schedule Y, Parts and A. 3. Have there been any substantial changes in the organizational chart since the prior quarter end? Yes [ ] No [ X ] 3.3 If the response to 3. is yes, provide a brief description of those changes. 4. Has the reporting entity been a party to a merger or consolidation during the period covered by this statement? Yes [ ] No [ X ] 4. If yes, provide the name of the entity, NAIC Company Code, and state of domicile (use two letter state abbreviation) for any entity that has ceased to exist as a result of the merger or consolidation. Name of Entity NAIC Company Code 3 State of Domicile 5. If the reporting entity is subject to a management agreement, including third-party administrator(s), managing general agent(s), attorneyin-fact, or similar agreement, have there been any significant changes regarding the terms of the agreement or principals involved? Yes [ ] No [ X ] N/A [ ] If yes, attach an explanation. 6. State as of what date the latest financial examination of the reporting entity was made or is being made. /3/04 6. State the as of date that the latest financial examination report became available from either the state of domicile or the reporting entity. This date should be the date of the examined balance sheet and not the date the report was completed or released. /3/ State as of what date the latest financial examination report became available to other states or the public from either the state of domicile or the reporting entity. This is the release date or completion date of the examination report and not the date of the examination (balance sheet date). 06/0/ By what department or departments? 6.5 Have all financial statement adjustments within the latest financial examination report been accounted for in a subsequent financial statement filed with Departments? Yes [ ] No [ ] N/A [ X ] 6.6 Have all of the recommendations within the latest financial examination report been complied with? Yes [ X ] No [ ] N/A [ ] 7. Has this reporting entity had any Certificates of Authority, licenses or registrations (including corporate registration, if applicable) suspended or revoked by any governmental entity during the reporting period? Yes [ ] No [ X ] 7. If yes, give full information: 8. Is the company a subsidiary of a bank holding company regulated by the Federal Reserve Board? Yes [ ] No [ X ] 8. If response to 8. is yes, please identify the name of the bank holding company. 8.3 Is the company affiliated with one or more banks, thrifts or securities firms? Yes [ ] No [ X ] 8.4 If response to 8.3 is yes, please provide below the names and location (city and state of the main office) of any affiliates regulated by a federal regulatory services agency [i.e. the Federal Reserve Board (FRB), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Securities Exchange Commission (SEC)] and identify the affiliate's primary federal regulator. Affiliate Name Location (City, State) 3 FRB 4 OCC 5 FDIC 6 SEC 7

18 GENERAL INTERROGATORIES 9. Are the senior officers (principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions) of the reporting entity subject to a code of ethics, which includes the following standards? Yes [ X ] No [ ] (a) Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (b) Full, fair, accurate, timely and understandable disclosure in the periodic reports required to be filed by the reporting entity; (c) Compliance with applicable governmental laws, rules and regulations; (d) The prompt internal reporting of violations to an appropriate person or persons identified in the code; and (e) Accountability for adherence to the code. 9. If the response to 9. is No, please explain: 9. Has the code of ethics for senior managers been amended? Yes [ ] No [ X ] 9. If the response to 9. is Yes, provide information related to amendment(s). 9.3 Have any provisions of the code of ethics been waived for any of the specified officers? Yes [ ] No [ X ] 9.3 If the response to 9.3 is Yes, provide the nature of any waiver(s). FINANCIAL 0. Does the reporting entity report any amounts due from parent, subsidiaries or affiliates on Page of this statement? Yes [ ] No [ X ] 0. If yes, indicate any amounts receivable from parent included in the Page amount: $ INVESTMENT. Were any of the stocks, bonds, or other assets of the reporting entity loaned, placed under option agreement, or otherwise made available for use by another person? (Exclude securities under securities lending agreements.) Yes [ ] No [ X ]. If yes, give full and complete information relating thereto:. Amount of real estate and mortgages held in other invested assets in Schedule BA: $ 3. Amount of real estate and mortgages held in short-term investments: $ 4. Does the reporting entity have any investments in parent, subsidiaries and affiliates? Yes [ ] No [ X ] 4. If yes, please complete the following: Prior Year-End Book/Adjusted Carrying Value 4. Bonds $ $ 4. Preferred Stock $ $ 4.3 Common Stock $ $ 4.4 Short-Term Investments $ $ 4.5 Mortgage Loans on Real Estate $ $ 4.6 All Other $ $ 4.7 Total Investment in Parent, Subsidiaries and Affiliates (Subtotal Lines 4. to 4.6) $ $ 4.8 Total Investment in Parent included in Lines 4. to 4.6 above $ $ Current Quarter Book/Adjusted Carrying Value 5. Has the reporting entity entered into any hedging transactions reported on Schedule DB? Yes [ ] No [ X ] 5. If yes, has a comprehensive description of the hedging program been made available to the domiciliary state? Yes [ ] No [ ] If no, attach a description with this statement. 7.

19 GENERAL INTERROGATORIES 6. For the reporting entity s security lending program, state the amount of the following as of the current statement date: 6. Total fair value of reinvested collateral assets reported on Schedule DL, Parts and. $ 6. Total book adjusted/carrying value of reinvested collateral assets reported on Schedule DL, Parts and $ 6.3 Total payable for securities lending reported on the liability page. $ 7. Excluding items in Schedule E - Part 3 - Special Deposits, real estate, mortgage loans and investments held physically in the reporting entity s offices, vaults or safety deposit boxes, were all stocks, bonds and other securities, owned throughout the current year held pursuant to a custodial agreement with a qualified bank or trust company in accordance with Section, III - General Examination Considerations, F. Outsourcing of Critical Functions, Custodial or Safekeeping Agreements of the NAIC Financial Condition Examiners Handbook? Yes [ X ] No [ ] 7. For all agreements that comply with the requirements of the NAIC Financial Condition Examiners Handbook, complete the following: Name of Custodian(s) Custodian Address State Street Bank and Trust Company 80 Pennsylvania Avenue, Kansas City, MO For all agreements that do not comply with the requirements of the NAIC Financial Condition Examiners Handbook, provide the name, location and a complete explanation: Name(s) Location(s) 3 Complete Explanation(s) 7.3 Have there been any changes, including name changes, in the custodian(s) identified in 7. during the current quarter? Yes [ ] No [ X ] 7.4 If yes, give full information relating thereto: Old Custodian New Custodian 3 Date of Change 4 Reason 7.5 Investment management Identify all investment advisors, investment managers, broker/dealers, including individuals that have the authority to make investment decisions on behalf of the reporting entity. For assets that are managed internally by employees of the reporting entity, note as such. ["Cthat have access to the investment accounts"; "Chandle securities"] Name of Firm or Individual Robert K. Benson, Senior Vice President and Chief Investment Officer I Affiliation For those firms/individuals listed in the table for Question 7.5, do any firms/individuals unaffiliated with the reporting entity (i.e. designated with a "U") manage more than 0% of the reporting entity s assets? Yes [ ] No [ ] For firms/individuals unaffiliated with the reporting entity (i.e. designated with a "U") listed in the table for Question 7.5, does the total assets under management aggregate to more than 50% of the reporting entity s assets? Yes [ ] No [ ] 7.6 For those firms or individuals listed in the table for 7.5 with an affiliation code of "A" (affiliated) or "U" (unaffiliated), provide the information for the table below. Central Registration Depository Number Name of Firm or Individual 3 Legal Entity Identifier (LEI) 4 Registered With 5 Investment Management Agreement (IMA) Filed 8. Have all the filing requirements of the Purposes and Procedures Manual of the NAIC Investment Analysis Office been followed? Yes [ X ] No [ ] 8. If no, list exceptions: 7.