ANNUAL STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 OF THE CONDITION AND AFFAIRS OF THE NGM INSURANCE COMPANY

Transcription

1 PROPERTY AND CASUALTY COMPANIES - ASSOCIATION EDITION ANNUAL STATEMENT FOR THE YEAR ENDED DECEMBER, 07 OF THE CONDITION AND AFFAIRS OF THE NGM INSURANCE COMPANY * * NAIC Group Code 0 0 NAIC Company Code 4788 Employer's ID Number (Current) (Prior) Organized under the Laws of FLORIDA, State of Domicile or Port of Entry FL Country of Domicile United States of America Incorporated/Organized 0/8/9 Commenced Business 07/6/9 Statutory Home Office 460 TOUCHTON ROAD EAST, STE. 400, JACKSONVILLE, FL, US 46 (Street and Number) (City or Town, State, Country and Zip Code) Main Administrative Office 460 TOUCHTON ROAD EAST, STE. 400 (Street and Number) JACKSONVILLE, FL, US 46, (City or Town, State, Country and Zip Code) (Area Code) (Telephone Number) Mail Address 55 WEST STREET, KEENE, NH, US 04 (Street and Number or P.O. Box) (City or Town, State, Country and Zip Code) Primary Location of Books and Records 460 TOUCHTON ROAD EAST, STE. 400 (Street and Number) JACKSONVILLE, FL, US 46, (City or Town, State, Country and Zip Code) (Area Code) (Telephone Number) Internet Website Address Statutory Statement Contact GERARD W. WATERS, (Name) (Area Code) (Telephone Number) WATERSG@MSAGROUP.COM, ( Address) (FAX Number) OFFICERS President THOMAS MARK VAN BERKEL, CEO Treasurer EDWARD JOHN KUHL, Exec VP, CFO Secretary BRUCE ROBERT FOX, VP, General Counsel OTHER DEAN PHILLIP DORMAN, VP, Chief Actuary THOMAS TAYLOR FRAZIER, Sr VP, Chief Investment AMY JOSE FREDERICK, VP, CIO DANIEL JOSEPH GAYNOR, Sr VP, Chief Underwriting NANCY LYNN GIORDANO-RAMOS, VP, Bonds ROBERT THOMAS HETZEL JR., VP, Reinsurance JEFFREY BERNARD KUSCH, Exec VP MICHAEL DAVID LANCASHIRE, Sr VP DAVID SCOT MEDVIDOFSKY, VP, Human Resources JANET MARIE ROOT, VP, Internal Audit JOHN ARTHUR THOMPSON JR., VP DIRECTORS OR TRUSTEES TERRY LAWRENCE BAXTER COTTON MATHER CLEVELAND JOHN ADRIAN DELANEY ROBERT CHRIS DOERR ALBERT HENRY ELFNER III DAVID (NMN) FREEMAN WILLIAM DAWSON GUNTER JR. IDALENE FAY KESNER JAMES EVERITT MORLEY JR. THOMAS MARK VAN BERKEL, CHAIRMAN State of County of FLORIDA DUVAL 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. THOMAS MARK VAN BERKEL BRUCE ROBERT FOX EDWARD JOHN KUHL President Secretary Treasurer a. Is this an original filing? Yes [ X ] No [ ] Subscribed and sworn to before me this b. If no, th day of JANUARY, 08. State the amendment number. Date filed. Number of pages attached LISA K. PENTON NOTARY DECEMBER 7, 09

2 ASSETS Assets Current Year Nonadmitted Assets Net Admitted Assets (Cols. - ) Prior Year 4 Net Admitted Assets. Bonds (Schedule D),566,509,67,566,509,67,486,908,54. Stocks (Schedule D):. Preferred stocks 86,899 86, Common stocks 476,065, ,065,664 75,048,488. Mortgage loans on real estate (Schedule B):. First liens 4,598,40 4,598,40 5,0,569. Other than first liens Real estate (Schedule A): 4. Properties occupied by the company (less $ 0 encumbrances),86,8,86,8 4,0,44 4. Properties held for the production of income (less $ 0 encumbrances) 76,9 76,9 48, Properties held for sale (less $ 0 encumbrances) Cash ($ (9,67,9), Schedule E - Part ), cash equivalents ($ 4,,545, Schedule E - Part ) and short-term investments ($,99,70, Schedule DA) 8,89,054 8,89,054 78,4, Contract loans (including $ premium notes) Derivatives (Schedule DB) Other invested assets (Schedule BA) 0,99,8 5,67,8 96,58,00 0,5,70 9. Receivable for securities 40,57 40, Securities lending reinvested collateral assets (Schedule DL) 0 0. Aggregate write-ins for invested assets Subtotals, cash and invested assets (Lines to ),7,840,0 5,67,8,67,,00,06,50,675. Title plants less $ charged off (for Title insurers only) Investment income due and accrued,57,6,57,6,477,40 5. Premiums and considerations: 5. Uncollected premiums and agents' balances in the course of collection 56,499,840 5,996,698 50,50,4 4,0, Deferred premiums and agents' balances and installments booked but deferred and not yet due (including $ earned but unbilled premiums),50,566,50,566 90,449, Accrued retrospective premiums ($ ) and 6. Reinsurance: contracts subject to redetermination ($ ) Amounts recoverable from reinsurers 4,89,99 4,89,99,78,77 6. Funds held by or deposited with reinsured companies 4,880,49 4,880,49 8,55,04 6. Other amounts receivable under reinsurance contracts Amounts receivable relating to uninsured plans Current federal and foreign income tax recoverable and interest thereon 5,4,867 5,4,867,475,48 8. Net deferred tax asset 86,89,90,040,450 6,85,740 9,065, Guaranty funds receivable or on deposit 8,646 8,646 49, 0. Electronic data processing equipment and software 87,97 87,97 5,9. Furniture and equipment, including health care delivery assets ($ ),806,8,806, Net adjustment in assets and liabilities due to foreign exchange rates 0 0. Receivables from parent, subsidiaries and affiliates 0,,09 4. Health care ($ ) and other amounts receivable Aggregate write-ins for other than invested assets 8,69,708 4,,76 4,507,98 4,8,70 6. Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines to 5),6,769,857 40,59,75,59,77,48,468,0,60 7. From Separate Accounts, Segregated Accounts and Protected Cell Accounts Total (Lines 6 and 7),6,769,857 40,59,75,59,77,48,468,0, DETAILS OF WRITE-INS 98. Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above) CASH SURRENDER VALUE OF LIFE INSURANCE POLICIES 8,609,5 8,609,5 7,56, PREPAID PENSION EXPENSE,0,46,0, TAX CREDITS 6,07,56 6,07,56 6,796, Summary of remaining write-ins for Line 5 from overflow page 0,96,754,00,80 9,86,74 9,9, Totals (Lines 50 thru 50 plus 598)(Line 5 above) 8,69,708 4,,76 4,507,98 4,8,70

3 LIABILITIES, SURPLUS AND OTHER FUNDS Current Year Prior Year. Losses (Part A, Line 5, Column 8) 76,95,9 706,95,. Reinsurance payable on paid losses and loss adjustment expenses (Schedule F, Part, Column 6),95,84 8,907,09. Loss adjustment expenses (Part A, Line 5, Column 9) 9,68,67 7,000, Commissions payable, contingent commissions and other similar charges 0,94,767,49,6 5. Other expenses (excluding taxes, licenses and fees) 7,67,0 7,667,5 6. Taxes, licenses and fees (excluding federal and foreign income taxes) 6,45,998,75,5 7. Current federal and foreign income taxes (including $ on realized capital gains (losses)) 7. Net deferred tax liability 8. Borrowed money $ and interest thereon $ 9. Unearned premiums (Part A, Line 8, Column 5) (after deducting unearned premiums for ceded reinsurance of $ 4,4,000 and including warranty reserves of $ and accrued accident and health experience rating refunds including $ for medical loss ratio rebate per the Public Health Service Act) 560,444,00 498,4,5 0. Advance premium 7,00,98 7,0,4. Dividends declared and unpaid:. Stockholders. Policyholders. Ceded reinsurance premiums payable (net of ceding commissions) (,88),,597. Funds held by company under reinsurance treaties (Schedule F, Part, Column 9),9,55 67, Amounts withheld or retained by company for account of others 5. Remittances and items not allocated 6. Provision for reinsurance (including $ 0 certified) (Schedule F, Part 8) 56,987 4,7 7. Net adjustments in assets and liabilities due to foreign exchange rates 8. Drafts outstanding 9. Payable to parent, subsidiaries and affiliates 67,68 0. Derivatives 0 0. Payable for securities,858,6. Payable for securities lending. Liability for amounts held under uninsured plans 4. Capital notes $ and interest thereon $ 5. Aggregate write-ins for liabilities,749,65 5,798, Total liabilities excluding protected cell liabilities (Lines through 5),567,779,090,48,66, Protected cell liabilities 8. Total liabilities (Lines 6 and 7),567,779,090,48,66, Aggregate write-ins for special surplus funds Common capital stock 5,50,000 5,50,000. Preferred capital stock. Aggregate write-ins for other than special surplus funds 0 0. Surplus notes 00,000,000 00,000, Gross paid in and contributed surplus 69,58,86 69,58,86 5. Unassigned funds (surplus) 850,69, ,68,7 6. Less treasury stock, at cost: 6. shares common (value included in Line 0 $ ) 6. shares preferred (value included in Line $ ) 7. Surplus as regards policyholders (Lines 9 to 5, less 6) (Page 4, Line 9),05,98,9,09,407,06 8. TOTALS (Page, Line 8, Col. ),59,77,48,468,0,60 DETAILS OF WRITE-INS 50. DEFERRED COMPENSATION 0,606,9 9,5, DEPOSITS ON PERPETUAL POLICIES 5,0,966 5,, MISCELLANEOUS ACCOUNTS PAYABLE 6,080,45 0,076, Summary of remaining write-ins for Line 5 from overflow page,040,645,6, Totals (Lines 50 thru 50 plus 598)(Line 5 above),749,65 5,798, Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 90 thru 90 plus 998)(Line 9 above) Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above) 0 0

4 STATEMENT OF INCOME Current Year UNDERWRITING INCOME Prior Year. Premiums earned (Part, Line 5, Column 4),48,74,5,09,58,0 DEDUCTIONS:. Losses incurred (Part, Line 5, Column 7) 69,94,60 606,57,955. Loss adjustment expenses incurred (Part, Line 5, Column ) 40,006,574,80, Other underwriting expenses incurred (Part, Line 5, Column ) 75,74,75 45,54,90 5. Aggregate write-ins for underwriting deductions Total underwriting deductions (Lines through 5),09,69,98,085,,65 7. Net income of protected cells 8. Net underwriting gain or (loss) (Line minus Line 6 plus Line 7) (6,47,407) (55,65,06) INVESTMENT INCOME 9. Net investment income earned (Exhibit of Net Investment Income, Line 7) 4,094,84 4,0,08 0. Net realized capital gains or (losses) less capital gains tax of $ 4,7,906 (Exhibit of Capital Gains (Losses) ),0,46,444,946. Net investment gain (loss) (Lines 9 + 0) 4,5,50 44,746,07 OTHER INCOME. Net gain (loss) from agents or premium balances charged off (amount recovered $ amount charged off $,969,786 ) (,969,786) (,50,769). Finance and service charges not included in premiums 5,650,540 5,807,78 4. Aggregate write-ins for miscellaneous income (,96,944) (969,557) 5. Total other income (Lines through 4) 48,80,5,05 6. Net income before dividends to policyholders, after capital gains tax and before all other federal and foreign income taxes (Lines ) (7,708,47) (9,570,98) 7. Dividends to policyholders 09,65 70,75 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) (7,87,97) (9,64,708) 9. Federal and foreign income taxes incurred (6,56,4) (9,76,64) 0. Net income (Line 8 minus Line 9)(to Line ) (,9,549) 94,656 CAPITAL AND SURPLUS ACCOUNT. Surplus as regards policyholders, December prior year (Page 4, Line 9, Column ),09,407,06,00,68,07. Net income (from Line 0) (,9,549) 94,656. Net transfers (to) from Protected Cell accounts 4. Change in net unrealized capital gains or (losses) less capital gains tax of $ 8,89 6,06,045 8,,74 5. Change in net unrealized foreign exchange capital gain (loss) 6. Change in net deferred income tax (7,879,49),94,80 7. Change in nonadmitted assets (Exhibit of Nonadmitted Assets, Line 8, Col. ) (9,700,460) (6,047,67) 8. Change in provision for reinsurance (Page, Line 6, Column minus Column ) 64,85 7, Change in surplus notes 70,000, Surplus (contributed to) withdrawn from protected cells. Cumulative effect of changes in accounting principles. Capital changes:. Paid in. Transferred from surplus (Stock Dividend). Transferred to surplus. Surplus adjustments:. Paid in 0 0. Transferred to capital (Stock Dividend). Transferred from capital 4. Net remittances from or (to) Home Office 5. Dividends to stockholders (,84,59) (78,48,657) 6. Change in treasury stock (Page, Lines 6. and 6., Column minus Column ) Aggregate write-ins for gains and losses in surplus,06,99,049,08 8. Change in surplus as regards policyholders for the year (Lines through 7) (4,008,67) 8,769,07 9. Surplus as regards policyholders, December current year (Line plus Line 8) (Page, Line 7),05,98,9,09,407,06 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 050 thru 050 plus 0598)(Line 5 above) MISCELLANEOUS INCOME (EXPENSE) (,96,944) (969,557) Summary of remaining write-ins for Line 4 from overflow page Totals (Lines 40 thru 40 plus 498)(Line 4 above) (,96,944) (969,557) 70. CHANGE IN ADDITIONAL MINIMUM PENSION LIABILITY 4,087,769 4,6, CHANGE IN MORTGAGE CONTINGENCY RESERVE LIABILITY (,880,777) (,574,546) Summary of remaining write-ins for Line 7 from overflow page Totals (Lines 70 thru 70 plus 798)(Line 7 above),06,99,049,08 4

5 CASH FLOW Current Year Prior Year Cash from Operations. Premiums collected net of reinsurance,59,5,876,045,579,67. Net investment income 50,6,50 5,564,6. Miscellaneous income 48,80,5,05 4. Total (Lines through ),0,44,06,00,479,44 5. Benefit and loss related payments 65,568,647 58,88,69 6. Net transfers to Separate Accounts, Segregated Accounts and Protected Cell Accounts Commissions, expenses paid and aggregate write-ins for deductions 50,0,95 459,759,44 8. Dividends paid to policyholders 09,65 77,08 9. Federal and foreign income taxes paid (recovered) net of $ 5,87,56 tax on capital gains (losses),4,868,657,46 0. Total (Lines 5 through 9),47,,45 99,,47. Net cash from operations (Line 4 minus Line 0) 6,,60 09,57,97 Cash from Investments. Proceeds from investments sold, matured or repaid:. Bonds 96,00,797 55,7,488. Stocks 4,76,70 6,75,74. Mortgage loans 44,8 40,07.4 Real estate Other invested assets 4,88,44 4,060,697.6 Net gains or (losses) on cash, cash equivalents and short-term investments (4,047) 0.7 Miscellaneous proceeds,858,6 8,57,89.8 Total investment proceeds (Lines. to.7) 546,7,95 70,868,8. Cost of investments acquired (long-term only):. Bonds 476,99,690 64,58,69. Stocks 9,8,580 40,456,055. Mortgage loans Real estate 500,5 488,7.5 Other invested assets 7,508,45 8,48,649.6 Miscellaneous applications 400,994 5,79,874.7 Total investments acquired (Lines. to.6) 687,448,46 709,569,44 4. Net increase (decrease) in contract loans and premium notes Net cash from investments (Line.8 minus Line.7 minus Line 4) (4,0,0) (6,700,60) Cash from Financing and Miscellaneous Sources 6. Cash provided (applied): 6. Surplus notes, capital notes 0 70,000, Capital and paid in surplus, less treasury stock Borrowed funds Net deposits on deposit-type contracts and other insurance liabilities Dividends to stockholders,84,59 78,48, Other cash provided (applied),408,469 (,90,687) 7. Net cash from financing and miscellaneous sources (Lines 6. to 6.4 minus Line 6.5 plus Line 6.6) 8,59,876 (9,87,44) 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) (69,04,85) 6,584, 9. Cash, cash equivalents and short-term investments: 9. Beginning of year 78,4,907 5,559, End of period (Line 8 plus Line 9.) 8,89,054 78,4,907 Note: Supplemental disclosures of cash flow information for non-cash transactions: Non-Cash Transactions - Bonds,667,66 8,95, Non-Cash Transactions - Stocks 9,0,47 4,970,77 5

6 UNDERWRITING AND INVESTMENT EXHIBIT Line of Business PART - PREMIUMS EARNED Net Premiums Written per Column 6, Part B Unearned Premiums Dec. Prior Year - per Col., Last Year s Part Unearned Premiums Dec. Current Year - per Col. 5 Part A 4 Premiums Earned During Year (Cols. + - ). Fire,88,6,88,5 5,088,055 0,08,96. Allied lines 6,9,750,50,690,79,40 6,47,00. Farmowners multiple peril 40,05 40,05 4. Homeowners multiple peril,48,886 57,8,898 6,54,84 05,95, Commercial multiple peril,57,54 60,58,7 6,90,049,0,96 6. Mortgage guaranty 5,76, ,76, Ocean marine Inland marine,4,08,489,5,799,6,,86 0. Financial guaranty Medical professional liability - occurrence Medical professional liability - claims-made Earthquake,68,659 47,67 5,046,690,980. Group accident and health Credit accident and health (group and individual) Other accident and health Workers' compensation 86,857,95 4,69,040 9,44,6 89,5,6 7. Other liability - occurrence 4,4,55,454,688 5,879,554 0,909, Other liability - claims-made 0 () () 0 7. Excess workers' compensation Products liability - occurrence 4,,7,694,5,50,59,757,0 8. Products liability - claims-made , 9. Private passenger auto liability 7,099,56 9,8,46,07,66 49,09,786 9., 9.4 Commercial auto liability 9,74,756 48,449,47 57,58,09 0,04,084. Auto physical damage 7,948,4 6,76,97 8,64,5 5,960,954. Aircraft (all perils) Fidelity,69,0 94,45 96,8,,46 4. Surety 6,0,08 5,6,747 5,708,76 5,957,9 6. Burglary and theft,46 07,68 06,76, Boiler and machinery 0 () () 0 8. Credit International Warranty Reinsurance - nonproportional assumed property 7,89,806 86,97 0 7,906,7. Reinsurance - nonproportional assumed liability Reinsurance - nonproportional assumed financial lines Aggregate write-ins for other lines of business TOTALS,0,97,09 498,4,5 560,444,0,48,74,5 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 4 from overflow page Totals (Lines 40 thru 40 plus 498)(Line 4 above)

7 UNDERWRITING AND INVESTMENT EXHIBIT Line of Business PART A - RECAPITULATION OF ALL PREMIUMS Amount Unearned (Running One Year or Less from Date of Policy) (a) Amount Unearned (Running More Than One Year from Date of Policy) (a) Earned But Unbilled Premium 4 Reserve for Rate Credits and Retrospective Adjustments Based on Experience 5 Total Reserve for Unearned Premiums Cols Fire 5,088,055 5,088,055. Allied lines,79,40,79,40. Farmowners multiple peril 4. Homeowners multiple peril 6,54,84 6,54,84 5. Commercial multiple peril 6,90,049 6,90, Mortgage guaranty 0 8. Ocean marine 0 9. Inland marine,799,6,799,6 0. Financial guaranty 0. Medical professional liability - occurrence 0. Medical professional liability - claims-made 0. Earthquake 5,046 5,046. Group accident and health 0 4. Credit accident and health (group and individual) 0 5. Other accident and health 0 6. Workers' compensation 9,44,6 9,44,6 7. Other liability - occurrence 5,879,554 5,879, Other liability - claims-made () () 7. Excess workers' compensation 0 8. Products liability - occurrence,50,59,50,59 8. Products liability - claims-made 0 9., 9. Private passenger auto liability,07,66,07,66 9., 9.4 Commercial auto liability 57,58,09 57,58,09. Auto physical damage 8,64,5 8,64,5. Aircraft (all perils) 0. Fidelity 4,008 99,0 96,8 4. Surety 5,67,977 0,080,759 5,708,76 6. Burglary and theft 06,76 06,76 7. Boiler and machinery () () 8. Credit 0 9. International 0 0. Warranty 0. Reinsurance - nonproportional assumed property 0. Reinsurance - nonproportional assumed liability 0. Reinsurance - nonproportional assumed financial lines 0 4. Aggregate write-ins for other lines of business TOTALS 549,44,9,000, ,444,0 6. Accrued retrospective premiums based on experience 7. Earned but unbilled premiums 8. Balance (Sum of Line 5 through 7) 560,444, DETAILS OF WRITE-INS 498. Summary of remaining write-ins for Line 4 from overflow page Totals (Lines 40 thru 40 plus 498)(Line 4 above) (a) State here basis of computation used in each case Daily Pro Rata 7

8 UNDERWRITING AND INVESTMENT EXHIBIT PART B - PREMIUMS WRITTEN Line of Business Reinsurance Assumed Reinsurance Ceded Net Premiums Written Direct Business (a) From Affiliates From Non-Affiliates To Affiliates To Non-Affiliates Cols Fire,644,94 4,57,444 4,750,66 49,85,88,6. Allied lines 7,605,69 7,44,90 8,6 8,98,40 6,9,750. Farmowners multiple peril 0 40,05 40,05 4. Homeowners multiple peril 8,659,50,69,78,06, 7,66,6,48, Commercial multiple peril 9,77,0,998,567 4,848,675 4,0,000,57,54 6. Mortgage guaranty 0 5,76,556 5,76, Ocean marine Inland marine,54,,50,760,706 86,759,4,08 0. Financial guaranty 0 0. Medical professional liability - occurrence 0. Medical professional liability - claims-made 0. Earthquake 0 45,8,999, ,48,68,659. Group accident and health Credit accident and health (group and individual) Other accident and health Workers' compensation 9,94,58 46,96,55 4,594,75 4,6,0 86,857,95 7. Other liability - occurrence 6,690,6 0,607,6 7,70,555 68,806 4,4,55 7. Other liability - claims-made Excess workers' compensation Products liability - occurrence 8,85 4,99,0 94,664 4,,7 8. Products liability - claims-made 0 9., 9. Private passenger auto liability 9,678,6 0,77,899 0,48,706,96,060 7,099,56 9., 9.4 Commercial auto liability 74,7,5,89,055,645,80,087,7 9,74,756. Auto physical damage 64,07,664 85,058,656 5,4,46 7,504 7,948,4. Aircraft (all perils) 0 0. Fidelity,5,6 4,04,69,0 4. Surety 7,08,76,9,5,000,805 6,0,08 6. Burglary and theft 5,587 75,87 6,78,46 7. Boiler and machinery Credit International 0 0. Warranty 0 0. Reinsurance - nonproportional assumed property XXX 7,8,900,48 4,7,850 7,89,806. Reinsurance - nonproportional assumed liability XXX 0. Reinsurance - nonproportional assumed financial lines XXX 0 4. Aggregate write-ins for other lines of business TOTALS 68,45,04 67,96,558 44,47,7 0 74,67,,0,97, DETAILS OF WRITE-INS 498. Summary of remaining write-ins for Line 4 from overflow page Totals (Lines 40 thru 40 plus 498)(Line 4 above) (a) Does the company's direct premiums written include premiums recorded on an installment basis? Yes [ ] No [ X ] If yes:. The amount of such installment premiums $. Amount at which such installment premiums would have been reported had they been reported on an annualized basis $ 8

9 9 UNDERWRITING AND INVESTMENT EXHIBIT PART - LOSSES PAID AND INCURRED Losses Paid Less Salvage Net Losses Unpaid Current Year (Part A, Col. 8) Losses Incurred Current Year (Cols ) Percentage of Losses Incurred (Col. 7, Part ) to Premiums Earned (Col. 4, Part ) Reinsurance Reinsurance Net Payments Net Losses Unpaid Line of Business Direct Business Assumed Recovered (Cols. + - ) Prior Year. Fire,40,69,7,705 4,68,96,86,7,6,84 4,45, Allied lines,70,576,978,57 9,45,5 6,00,58,44,47,987,546 5,458, Farmowners multiple peril 0 98,798 98, ,484 66,86 6, Homeowners multiple peril 7,89,87,4,98 0,405 59,,447 7,95,8 9,605,60 57,554, Commercial multiple peril,87,0 60,84,6 4,447,55 69,574,8,6,04 87,84,66 9,5, Mortgage guaranty 0 8,4 8,4 5,607 44, Ocean marine Inland marine 5,7 898,994,4,67 0,8,9,05, 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 Workers' compensation 7,5,757 0,6,608,658,08 45,00,84 59,74,498 58,50,45 46,05, Other liability - occurrence 4,5,858 8,09,044,095,947,66,955 7,68,,7,495 7,6, Other liability - claims-made Excess workers' compensation Products liability - occurrence 60,90 60,90 (79,40) 48,7 (66,77) (.8) 8. Products liability - claims-made , 9. Private passenger auto liability 8,869,7 48,404,87 6,400 77,7,64 7,58,57 06,5,589 88,60, , 9.4 Commercial auto liability 48,46,57 4,740,09,760,678 6,6,0 97,47,86 86,589,879 7,00, Auto physical damage,905,80 6,608,740 95,54,570 8,55,080 8,677,904 95,87, Aircraft (all perils) Fidelity 4,008 (0,074) (6,066) 80,06 88,7 (4,077) (.) 4. Surety 4,7,47 6,48,598,0,775,689,95,85,000,78,690, Burglary and theft 0 6,88 6,88 76,00 76,50 5, Boiler and machinery 0 (9,89) (9,89) (,0) (0,84) Credit International Warranty Reinsurance - nonproportional assumed property XXX 4,6,97 4,6,97 6,578, ,849 0,8,97.. Reinsurance - nonproportional assumed liability XXX 0 0 5,77 (5,77) 0.0. Reinsurance - nonproportional assumed financial lines XXX Aggregate write-ins for other lines of business TOTALS 98,865,4 460,58,4,44,54 66,978,94 76,95,9 706,95, 69,94, DETAILS OF WRITE-INS Summary of remaining write-ins for Line 4 from overflow page Totals (Lines 40 thru 40 plus 498)(Line 4 above)

10 0 UNDERWRITING AND INVESTMENT EXHIBIT PART A - UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES Reported Losses Incurred But Not Reported Deduct Reinsurance Recoverable Net Losses Excl. Incurred But Not Reported (Cols. + - ) Net Unpaid Loss Adjustment Expenses Reinsurance Reinsurance Reinsurance Net Losses Unpaid Line of Business Direct Assumed Direct Assumed Ceded (Cols ). Fire 70,84 45,96 5,008,4, 77, ,4 90,48,86,7 59,066. Allied lines 55,57,5,99 57,707,4,80 9,585,405 60,,44,47 78,650. Farmowners multiple peril 4,58 4,58 5, ,484,40 4. Homeowners multiple peril 8,446,85 4,60,84,4,58 0,96, 6,7,84,57,69 06,84 7,95,8,70, Commercial multiple peril 6,47,50 74,6,077 9,9,7 8,69,875 99,556,984 0,945,40 60,958,6,04 76,7, Mortgage guaranty 0 5,607 5, Ocean marine Inland marine,000 5,8 8,87 66,65,69 6,000 90,48 0,8 6,9 0. Financial guaranty 0 0. Medical professional liability - occurrence 0 0. Medical professional liability - claims-made 0 0. Earthquake 0 0. Group accident and health 0 (a) 0 4. Credit accident and health (group and individual) Other accident and health 0 (a) 0 6. Workers' compensation 47,86,96 5,889,559 4,86,968 76,9,887,09,07 60,97,75 75,80 59,74,498,455,44 7. Other liability - occurrence 0,6,97 5,8,06 4,45,90,806,74 5,68,847 0,49,47 506,74 7,68, 4,7, Other liability - claims-made Excess workers' compensation Products liability - occurrence (80,000) (79,40) (,500) 8. Products liability - claims-made , 9. Private passenger auto liability 8,60,40 65,76,099 70,64 8,607,65,84,59 0,84,554,04,8 7,58,57,6,869 9., 9.4 Commercial auto liability 4,095,67 7,49,5,94,89 56,646,46 6,57,0 5,40,707,0,47 97,47,86 7,69,798. Auto physical damage,4,5 5,56,069 97,56 6,600, ,0,57,949 4,7 8,55,080,9,555. Aircraft (all perils) 0 0. Fidelity ,509 (4,000),8 80,06 79, Surety 96,578 50,04 5,04,5,46,975,46 44,688 76,8,95,85,94,66 6. Burglary and theft 76,00 76,00 76,00 7. Boiler and machinery 5,07 (,0) (,0) 8. Credit International Warranty 0 0. Reinsurance - nonproportional assumed property XXX,4,845,4,845 XXX 4,6,959 6,578,804. Reinsurance - nonproportional assumed liability XXX 0 XXX 0. Reinsurance - nonproportional assumed financial lines XXX 0 XXX 0 4. Aggregate write-ins for other lines of business TOTALS 46,08,567,69,05 4,865,487 4,5,05 98,86,9 6,790,976 5,0,489 76,95,9 9,68,67 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 4 from overflow page Totals (Lines 40 thru 40 plus 498)(Line 4 above) (a) Including $ for present value of life indemnity claims.

11 UNDERWRITING AND INVESTMENT EXHIBIT PART - EXPENSES 4. Claim adjustment services: Loss Adjustment Expenses Other Underwriting Expenses Investment Expenses. Direct 7,684,885 7,684,885. Reinsurance assumed 56,97,888 56,97,888. Reinsurance ceded,9,940,9,940.4 Net claim adjustment service ( ) 7,09, ,09,8. Commission and brokerage:. Direct excluding contingent 68,6,6 68,6,6. Reinsurance assumed, excluding contingent 65,4,755 65,4,755. Reinsurance ceded, excluding contingent,4,50,4,50.4 Contingent - direct,550,96,550,96.5 Contingent - reinsurance assumed 40,78 40,78.6 Contingent - reinsurance ceded 0.7 Policy and membership fees 0.8 Net commission and brokerage ( ) 0 5,5,95 0 5,5,95. Allowances to managers and agents,4,50,4,50 4. Advertising 70,4 70,4 5. Boards, bureaus and associations 787,8 6,59,07 6,946, Surveys and underwriting reports 8,95,988 8,95, Audit of assureds records,4,48,4,48 8. Salary and related items: 8. Salaries,76,7 5,09,75 789,585 86,058,57 8. Payroll taxes,994,965,986,667 5,98,6 9. Employee relations and welfare 6,676,49,845,75 07,04 8,88, Insurance 850, ,590. Directors fees 67,70 64,96 5,060,9,74. Travel and travel items,,9,40,55,855,649,509. Rent and rent items,765,00 5,058,46,0 7,846,87 4. Equipment 5,00,699 7,604,89 4,,6,75 5. Cost or depreciation of EDP equipment and software 88,8,4,698,947,065,78 6. Printing and stationery 587,4,497,8 7,8,56,57 7. Postage, telephone and telegraph, exchange and express,57,607,79,99 45,68 7,76, Legal and auditing 64,40 899,8 4,5,98, Totals (Lines to 8) 58,550,9 09,44,969,697,58 69,49, Taxes, licenses and fees: 0. State and local insurance taxes deducting guaranty association credits of $ 4,,94 4,,94 0. Insurance department licenses and fees,078,08,078,08 0. Gross guaranty association assessments 8,944 8, All other (excluding federal and foreign income and real estate) 7,9 7,9 0.5 Total taxes, licenses and fees ( ) 0 6,56,09 0 6,56,09. Real estate expenses,9,888,9,888. Real estate taxes 556,68 556,68. Reimbursements by uninsured plans 0 4. Aggregate write-ins for miscellaneous expenses 9,46,4 4,844,59,0,99 5,9, Total expenses incurred 40,006,574 75,74,75 6,847,96 (a) 5,596,89 6. Less unpaid expenses - current year 9,68,67 55,0,967 84,695, Add unpaid expenses - prior year 7,000,840 5,9,8 79,9, 8. Amounts receivable relating to uninsured plans, prior year 0 9. Amounts receivable relating to uninsured plans, current year 0 0. TOTAL EXPENSES PAID (Lines ) 7,5,74 7,640,066 6,847,96 57,8,770 DETAILS OF WRITE-INS 40. Miscellaneous Expenses 9,46,4 4,844,59,0,99 5,9, Summary of remaining write-ins for Line 4 from overflow page Totals (Lines 40 thru 40 plus 498)(Line 4 above) 9,46,4 4,844,59,0,99 5,9,890 (a) Includes management fees of $ 0 to affiliates and $ 0 to non-affiliates. Total

12 EXHIBIT OF NET INVESTMENT INCOME Collected During Year Earned During Year. U.S. Government bonds (a),86,787,89,64. Bonds exempt from U.S. tax (a) 6,6,48 5,9,7. Other bonds (unaffiliated) (a) 40,078,06 4,7,005. Bonds of affiliates (a). Preferred stocks (unaffiliated) (b),577,577. Preferred stocks of affiliates (b). Common stocks (unaffiliated),590,6,494,5. Common stocks of affiliates. Mortgage loans (c) 584, 579,94 4. Real estate (d),4,6,4,6 5 Contract loans 6 Cash, cash equivalents and short-term investments (e),9 7,584 7 Derivative instruments (f) 8. Other invested assets (,8,476) (,8,476) 9. Aggregate write-ins for investment income Total gross investment income 56,65,558 56,748,40. Investment expenses (g) 6,9,5. Investment taxes, licenses and fees, excluding federal income taxes (g) 556,68. Interest expense (h) 7,5,9 4. Depreciation on real estate and other invested assets (i) 5. Aggregate write-ins for deductions from investment income 8, Total deductions (Lines through 5) 4,65, Net investment income (Line 0 minus Line 6) 4,094,84 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 090 thru 090 plus 0998) (Line 9, above) Miscellaneous Expense 8, Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 thru 50 plus 598) (Line 5, above) 8,496 (a) Includes $ 74,0 accrual of discount less $ 7,84,7 amortization of premium and less $,09,6 paid for accrued interest on purchases. (b) Includes $ accrual of discount less $ amortization of premium and less $ paid for accrued dividends on purchases. (c) Includes $ accrual of discount less $ amortization of premium and less $ paid for accrued interest on purchases. (d) Includes $,69,0 for company s occupancy of its own buildings; and excludes $ interest on encumbrances. (e) Includes $ 8,88 accrual of discount less $ 0 amortization of premium and less $,66 paid for accrued interest on purchases. (f) Includes $ accrual of discount less $ amortization of premium. (g) Includes $ investment expenses and $ investment taxes, licenses and fees, excluding federal income taxes, attributable to segregated and Separate Accounts. (h) Includes $ 7,4,000 interest on surplus notes and $ interest on capital notes. (i) Includes $ depreciation on real estate and $ depreciation on other invested assets. EXHIBIT OF CAPITAL GAINS (LOSSES) 4 5 Total Realized Capital Gain (Loss) (Columns + ) Change in Unrealized Capital Gain (Loss) Change in Unrealized Foreign Exchange Capital Gain (Loss) Realized Gain (Loss) On Sales or Maturity Other Realized Adjustments. U.S. Government bonds (6,554) 0 (6,554) 0 0. Bonds exempt from U.S. tax 486, , Other bonds (unaffiliated),8,8 (0,7),70,607,55, Bonds of affiliates Preferred stocks (unaffiliated) (88) 0. Preferred stocks of affiliates Common stocks (unaffiliated) 0,76, 0 0,76, 7,996,96 0. Common stocks of affiliates ,65,79 0. Mortgage loans Real estate Contract loans 0 6. Cash, cash equivalents and short-term investments (4,047) 0 (4,047) Derivative instruments 0 8. Other invested assets (9,67,08) (8,689,665) (8,6,69),807, Aggregate write-ins for capital gains (losses) Total capital gains (losses) 4,65,8 (8,809,89) 5,84,46 6,44,877 0 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 090 thru 090 plus 0998) (Line 9, above)

13 EXHIBIT OF NON-ADMITTED ASSETS Current Year Total Nonadmitted Assets Prior Year Total Nonadmitted Assets Change in Total Nonadmitted Assets (Col. - Col. ). Bonds (Schedule D) 0. Stocks (Schedule D):. Preferred stocks 0. Common stocks 0. Mortgage loans on real estate (Schedule B):. First liens 0. Other than first liens 0 4. Real estate (Schedule A): 4. Properties occupied by the company 0 4. Properties held for the production of income 0 4. Properties held for sale 0 5. Cash (Schedule E - Part ), cash equivalents (Schedule E - Part ) and short-term investments (Schedule DA) 0 6. Contract loans 0 7. Derivatives (Schedule DB) 0 8. Other invested assets (Schedule BA) 5,67,8 5,000,000 (67,8) 9. Receivables for securities 0 0. Securities lending reinvested collateral assets (Schedule DL) 0. Aggregate write-ins for invested assets Subtotals, cash and invested assets (Lines to ) 5,67,8 5,000,000 (67,8). Title plants (for Title insurers only) 0 4. Investment income due and accrued 0 5. Premiums and considerations: 5. Uncollected premiums and agents' balances in the course of collection 5,996,698 9,044,80,048, 5. Deferred premiums, agents' balances and installments booked but deferred and not yet due 0 5. Accrued retrospective premiums and contracts subject to redetermination 0 6. Reinsurance: 6. Amounts recoverable from reinsurers 0 6. Funds held by or deposited with reinsured companies 0 6. Other amounts receivable under reinsurance contracts 0 7. Amounts receivable relating to uninsured plans 0 8. Current federal and foreign income tax recoverable and interest thereon 0 8. Net deferred tax asset,040,450,85,44 (9,5,008) 9. Guaranty funds receivable or on deposit 0 0. Electronic data processing equipment and software 0. Furniture and equipment, including health care delivery assets,806,8,999, 9,98. Net adjustment in assets and liabilities due to foreign exchange rates 0. Receivables from parent, subsidiaries and affiliates 0 4. Health care and other amounts receivable 0 5. Aggregate write-ins for other than invested assets 4,,76,0, (,09,404) 6. Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines to 5) 40,59,75 0,89,95 (9,700,460) 7. From Separate Accounts, Segregated Accounts and Protected Cell Accounts 0 8. Total (Lines 6 and 7) 40,59,75 0,89,95 (9,700,460) DETAILS OF WRITE-INS 98. Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above) CASH SURRENDER VALUE OF LIFE INSURANCE POLICIES PREPAID PENSION EXPENSE,0,46 5,0 (,978,6) 50. TAX CREDITS Summary of remaining write-ins for Line 5 from overflow page,00,80 969, (,68) 599. Totals (Lines 50 thru 50 plus 598)(Line 5 above) 4,,76,0, (,09,404)

14 NOTES TO THE FINANCIAL STATEMENTS Summary of Significant Accounting Policies:NGM A. The accompanying financial statements of the Company have been prepared in conformity with the NAIC Annual Statement Instructions and Accounting Practices and Procedures manuals. F/S Page F/S Line # SSAP # Net Income: ) Company state basis (Page 4 Line 0, Columns & ) XXX XXX XXX (,9,549) 94,656 ) State Prescribed Practices that (increase)/decrease NAIC SAP ) State Permitted Practices that (increase)/decrease NAIC SAP ) NAIC SAP (--=4) XXX XXX XXX (,9,549) 94,656 Surplus: 5) Company state basis (Page Line 7, Columns & ) XXX XXX XXX,05,98,9,09,407,06 6) State Prescribed Practices that (increase)/decrease NAIC SAP ) State Permitted Practices that (increase)/decrease NAIC SAP ) NAIC SAP (5-6-7=8) XXX XXX XXX,05,98,9,09,407,06 B. 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 period. Actual results could differ from those estimates. C. Premiums are earned over the terms of the related insurance policies and reinsurance contracts. Unearned premium reserves are established to cover the unexpired portion of premiums written. Such reserves are computed by the daily pro rata method for direct business and are based on reports received from ceding companies for reinsurance. Expenses incurred in connection with acquiring new insurance business, including such acquisition costs as sales commissions, are charged to operations as incurred. Expenses incurred are reduced for ceding allowances received or receivable. ) Short-term investments include investments with remaining maturities of one year or less at the time of acquisition and are principally stated at amortized cost. ) Bonds not backed by other loans are stated at amortized cost using the scientific method. ) Common Stocks are stated at market value except that investments in stocks of uncombined subsidiaries and affiliates in which the Company has an interest of 0% or more are carried on the equity basis. 4) Preferred Stocks are stated at market value except Sinking Fund Preferred Stocks, which are carried at amortized cost. 5) Mortgage loans are reported at unpaid principal balances, less allowance for impairment. 6) Single class and multi-class mortgage-backed/asset-backed securities are valued at the lower of amortized cost using the interest method including anticipated prepayments or fair market value. Prepayment assumptions are obtained from The Asset Backed Securities Group and are based on the current interest rate and economic environment. The retrospective adjustment method is used to value all such securities. 7) The Company s insurance subsidiaries are reported at their underlying statutory equity. Noninsurance subsidiaries, which have significant ongoing operations other than for the Company, are reported at GAAP equity. The net change in the subsidiaries equity is included in the change in net unrealized capital gains or losses. 8) Partnerships and Limited Liability Companies are carried at GAAP equity value. 9) All derivatives are stated at fair value. 0) The Company anticipates investment income as a factor in the premium deficiency calculation, in accordance with SSAP No. 5, Property-Casualty Contracts Premiums. ) Loss and loss adjustment expense reserves represents management s best estimate of the ultimate net cost of all reported and unreported losses incurred through December. The Group does not discount loss and loss adjustment expense reserves except for certain permanent long-term disability claims related to worker s compensation coverage s. The reserves for unpaid losses and loss adjustment expenses are estimated using individual case-basis valuations and statistical analyses. Those estimates are subject to the effects of trends in loss severity and frequency. Although considerable variability is inherent in such estimates, management believes the reserves for losses and loss adjustment expenses are adequate. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known; such adjustments are included in current operations. ) The Company has not modified its capitalization policy from the prior period. ) The Company does not estimate pharmaceutical rebate receivables. D. Going Concern: Based upon its evaluation of relevant conditions and events, management does not have substantial doubt about the Company s ability to continue as a going concern. Accounting Changes and Corrections of Errors: None. Business Combinations and Goodwill: None 4 Discontinued Operations: None 5 Investments: A. Mortgage Loans, including Mezzanine Real Estate Loans ) The maximum and minimum lending rates for new mortgage loans during 07 were: None. ) The maximum percentage of any one loan to the value of security at the time of the loan, exclusive of insured or guaranteed for purchase money mortgage was 94%. ) Taxes, assessments and any amounts advanced and not included in the mortgage loan total: None 4) Age analysis of mortgage loans and identification of mortgage loans in which the insurer is a participant or co-lender in a mortgage loan agreement: Residential Commercial Farm Insured All Other Insured All Other Mezzanine Total a. Current Year. Recorded Investment (All) (a) Current $4,598,40 $4,598,40 (b) 0-59 Days Past Due (c) Days Past Due (d) Days Past Due (e) 80+ Days Past Due. Accruing Interest Days Past Due (a) Recorded Investment (b) Interest Accrued. Accruing Interest 80+ Days Past Due (a) Recorded Investment (b) Interest Reduced 4. Interest Reduced (a) Recorded Investment (b) Number of Loans (c)percent Reduced 4

15 NOTES TO THE FINANCIAL STATEMENTS 5. Participant or Co-lender in a mgt loan agreement (a) Recorded Investment b. Prior Year. Recorded Investment (a) Current $5,0,569 $5,0,569 (b)0-59 Days Past Due (c) Days Past Due (d) Days Past Due (e) 80+ Days Past Due. Accruing Interest Days Past Due (a) Recorded Investment (b) Interest Accrual. Accruing Interest 80+ Days Past Due (a) Recorded Investment (b) Interest Accrued (4) Interest Reduced (a) Recorded Investment (b) Number of Loans (c) Percent Reduced (5) Participant or Co-lender in a mgt loan agreement (a) Recorded Investment (5) (9) There were no impaired mortgage loans or allowances for credit losses on mortgage loans. B. Debt Restructuring: None C. Reverse Mortgages: None D. Loan-Backed Securities: ) Prepayment assumptions for mortgage-backed/loan-backed and structured securities were obtained from Moody s and the Mortgage Industry Advisory Corporation. ) There are no recognized other-than-temporary impairments. ) There are no current-period other-than-temporary impairments. 4) All impaired securities (fair value is less than cost or 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 non-interest related declines when a non-recognized interest related impairment remains): a. The aggregate amount of unrealized losses:. Less than Months $,48,760. Months or Longer $,705,79 b. The aggregate related fair value of securities with unrealized losses:. Less than Months $88,695,78. Months or Longer $0,874,95 5) Bonds in an unrealized loss position are regularly reviewed for other-than temporary declines in value. Factors considered in determining whether a decline is other-than-temporary include the length of time a bond has been in an unrealized loss position and the reasons for the decline in value. Assessments include judgments about an obligor's or guarantor's current and projected financial position, projected ability to service and repay its debt obligations, the existence of, and realizable value for, any collateral backing the obligations, and the macro-economic and micro-economic outlooks for specific industries and issuers. Estimating the future cash flows of loan-backed securities also involves assumptions regarding the underlying collateral such as prepayment rates, default and recovery rates, existence of subordinated classes capable of absorbing losses, and third-party servicing abilities. E. Dollar Repurchase Agreements and/or Securities Lending Transactions: None F. Repurchase Agreements Transactions Accounted for as Secured Borrowing: None G. Reverse Repurchase Agreements Transactions Accounted for as Secured Borrowing: None H. Repurchase Agreements Transactions Accounted for as a Sale: None I. Reverse Repurchase Agreements Transactions Accounted for as Sale: None J. Real Estate: None impaired K. Investments in low-income housing tax credits (LIHTC): None L. Restricted Assets:. Restricted Assets (Including Pledged) Gross (Admitted & Nonadmitted) Restricted Restricted Asset Category a. Subject to contractual obligation for which liability is not shown b. Collateral held under security lending agreements c. Subject to repurchase agreements d. Subject to reverse repurchase agreements e. Subject to dollar repurchase agreements f. Subject to dollar reverse repurchase agreements Total General Account G/A G/A Supporting Protected Cell Account Activity (a) Current Year Protected Total Cell Protected Account Cell Assets Account Supporting Restricted Assets G/A Activity (b) Total ( plus ) Total From Prior Year 7 Increase/ (Decrease) (5 minus 6) g. Placed under option contracts h. Letter stock or securities restricted as to sale excl. FHLB cap. stock i. FHLB capital stock j. On deposit with states 8,5,87 8,5,87 8,9,5 (,98) k. On deposit with other regulatory bodies l. Pledged as collateral to FHLB (including assets backing funding agreements) m. Pledged as collateral not captured in other categories 5,70,084 5,70,084,09,579,66,505 n. Other restricted assets o. Total restricted assets 4,88,9 4,88,9 40,78,84,660,07 4.

16 a. Subject to contractual obligation for which liability is not shown c. Subject to repurchase agreements d. Subject to reverse repurchase agreements e. Subject to dollar repurchase agreements f. Subject to dollar reverse repurchase agreements NOTES TO THE FINANCIAL STATEMENTS 8 Total Nonadmitted Restricted Current Year 9 Total Admitted Restricted (5 minus 8) Percentage 0 Gross (Admitted & Nonadmitted) Restricted to Total Assets (c) Admitted Restricted to Total Admitted Assets (d) g. Placed under option contracts h. Letter stock or securities restricted as to sale excl. FHLB cap. stock i. FHLB capital stock j. On deposit with states 8,5,87 0.% 0.% k. On deposit with other regulatory bodies l. Pledged as collateral to FHLB (including assets backing funding agreements) m. Pledged as collateral not captured in other categories 5,70,084.6%.8% n. Other restricted assets o. Total restricted assets 4,88,9.66%.69% (c) Column 5 divided by Asset Page, Column, Line 8 (d) Column 9 divided by Asset Page, Column, Line 8 G/A Supporting Protected Cell Account Gross (Admitted & Nonadmitted) Restricted 8 Current Year Total Protected Protected Cell cell Account Account Assets Restricteing Support- G/A Total Total Total General From Increase/ Current Description of Assets Account G/A Activity (a) Assets Activity (b) Total ( + ) Prior Year (Decrease) (5-6) admitted Restricted Assets Reinsurance 5,70, ,70,084,09,579,66,505 5,70,084.6%.8%. Detail of Assets Pledged as Collateral Not Captured in Other Categories (Contracts that share similar characteristics, such as Reinsurance and Derivatives, are reported in the aggregate) (a) Subset of column (b) Subset of column (c)total line for Columns through 7 should equal 5L()m Columns through 7 respectively and Total Line for columns 8 through 0 should equal 5L()m columns 9 through respectively.. Detail of other restricted assets (contracts that share similar characteristics, such as Reinsurance and Derivatives, are reported in the aggregate): None 4. Collateral Received and Reflected as Assets within the Reporting Entity s Financial Statements: None M. Working Capital Finance Investments: None N. Offsetting and Netting of Assets and Liabilities: None O. Structured Notes: Mortgage- Referenced Security (Yes/No) CUSIP Identification Actual Cost Fair Value Book/Adjusted Carrying Value 0674T6U6 5,000,000 6,595,450 5,000,000 NO 0674TZX8 5,000,000 6,945,400 5,000,000 NO 74P46,000,000,65,800,000,000 NO 547W4X8 5,000,000 8,04,550 5,000,000 NO 95000EU 5,000,000 4,950,000 5,000,000 NO Total,000,000 0,,00,000,000 P. 5* Securities: None Q. Short Sales: None R. Prepayment Penalty and Acceleration Fees: None Percentage 9 0 Gross (Admitted & Nonadmittted) Restricted to Total 6 Joint Ventures, Partnerships and Limited Liability Companies: A. None exceed 0% of admitted assets. B. The Company invests in limited liability companies that generate federal and state tax credits available for the Company s use. The Company recognized $8,689,668 of impairment losses on these investments based on the audited equity balances of the investees. 7. Investment Income due and accrued: None nonadmitted. 8. Derivative Instruments: None 9. Income Taxes: A. Deferred Tax Assets and Liabilities:. Components of Net Deferred Tax Asset/Liability December, 07 December, 06 Ordinary Capital Total Ordinary Capital Total Gross deferred tax assets 00,05,85 87,78 00,887,90 9,66,0,59,99,0,04 Statutory valuation allowance adjustment Adjusted gross deferred tax assets 00,05,85 87,78 00,887,90 9,66,0,59,99,0,04 Deferred tax assets nonadmitted,040,450 -,040,450,85,44 -,85,44 Subtotal net deferred tax assets/(net deferred tax liability) 76,974,75 87,78 77,847,45 05,80,66,59,99 07,404,600 Deferred tax liabilities,45,4,544,9,995,7,46,97,876,56 6,9,5 Net admitted deferred tax assets/(net deferred tax liability) 74,5, (0,67,57) 6,85,740 0,47,689 (,8,6) 9,065,067 Admitte Restricte to Tota Admitte Assets Total 5,70, ,70,084,09,579,66,505 5,70,084.6%.8% 4.