ANNUAL STATEMENT For the Year Ended DECEMBER 31, 2016 OF THE CONDITION AND AFFAIRS OF THE Anchor Property & Casualty Insurance Company

Transcription

1 PROPERTY AND CASUALTY COMPANIES ASSOCIATION EDITION ANNUAL STATEMENT For the Year Ended DECEMBER 31, 2016 CONDITION AND AFFAIRS Anchor Property & Casualty Insurance Company Document Code: 201 NAIC Group Code 4823, 4823 NAIC Company Code Employer's ID Number (Current Period) (Prior Period) Organized under the Laws of Florida, State of Domicile or Port of Entry FL Country of Domicile United States of America Incorporated/Organized 10/28/2014 Commenced Business 01/13/2015 Statutory Home Office 5959 Central Avenue, Suite 200, St. Petersburg, FL, US (Street and Number) (City or Town, State, Country and Zip Code) Main Administrative Office 5959 Central Avenue, Suite 200 (Street and Number) St Petersburg, FL, US (727) (City or Town, State, Country and Zip Code) (Area Code) (Telephone Number) Mail Address 5959 Central Ave, Suite 200, St. Petersburg, FL, US (Street and Number or P.O. Box) (City or Town, State, Country and Zip Code) Primary Location of Books and Records 5959 Central Avenue, Suite 200 (Street and Number) St. Petersburg, FL, US (727) (City or Town, State, Country and Zip Code) (Area Code) (Telephone Number) Internet Website Address Statutory Statement Contact Michael Hugh Terry (727) (Name) (Area Code)(Telephone Number)(Extension) (727) ( Address) (Fax Number) OFFICERS Varnavas Louis Zagaris Pramod Datta Kerkar Daniel Shawn Bowman Name Joseph John Wortman Kevin Francis Pawlowski Title President Chief Operating Officer OTHERS DIRECTORS OR TRUSTEES Brendan Keilty Moeller Richard Alan Roberts State of Florida County of Pinellas ss The officers of this reporting entity being duly sworn, each depose and say that they are the described officers of the 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: (1) state law may differ; or, (2) that state rules or regulations require differences in reporting not related to accounting practices and procedures, according to the best of their information, knowledge and belief, respectively. 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. (Signature) (Signature) (Signature) Joseph John Wortman Kevin Francis Pawlowski (Printed Name) (Printed Name) (Printed Name) President Chief Operating Officer (Title) (Title) (Title) Subscribed and sworn to before me this a. Is this an original filing? Yes[X] No[ ] day of, 2017 b. If no, 1. State the amendment number 2. Date filed 02/27/ Number of pages attached (Notary Public Signature)

2 2 ASSETS Current Year Prior Year Net Admitted Nonadmitted Assets Net Admitted Assets Assets (Cols.12) Assets 1. Bonds (Schedule D) 40,025, ,025, ,157, Stocks (Schedule D): 2.1 Preferred stocks 909, ,818 1,149, Common Stocks. 1,970, ,970,957 1,165, Mortgage loans on real estate (Schedule B): 3.1 First liens Other than first liens 4. Real estate (Schedule A): 4.1 Properties occupied by the company (less...0 encumbrances)... 3,612, ,612,451 3,700, Properties held for the production of income (less...0 encumbrances). 4.3 Properties held for sale (less...0 encumbrances) Cash (...8,689,341, Schedule E Part 1), cash equivalents (...3,066,507, Schedule E Part 2) and shortterm investments (...107,562, Schedule DA).. 11,863, ,863, ,228, Contract loans (including...0 premium notes).. 7. Derivatives (Schedule DB). 8. Other invested assets (Schedule BA) 2,078, ,078,190 2,000, Receivables for securities 3, Securities Lending Reinvested Collateral Assets (Schedule DL) 11. Aggregate writeins for invested assets. 12. Subtotals, cash and invested assets (Lines 1 to 11).. 60,459, ,459, ,403, Title plants less...0 charged off (for Title insurers only) 14. Investment income due and accrued , , , Premiums and considerations: 15.1 Uncollected premiums and agents' balances in the course of collection , , , Deferred premiums, agents' balances and installments booked but deferred and not yet due (Including...0 earned but unbilled premiums)... 3,682, ,682,332 2,606, Accrued retrospective premiums (...0) and contracts subject to redetermination (...0). 16. Reinsurance: 16.1 Amounts recoverable from reinsurers Funds held by or deposited with reinsured companies Other amounts receivable under reinsurance contracts Amounts receivable relating to uninsured plans Current federal and foreign income tax recoverable and interest thereon... 1,350, ,350, Net deferred tax asset.... 3,492, ,255 3,025,536 1,850, Guaranty funds receivable or on deposit 20. Electronic data processing equipment and software. 601, , Furniture and equipment, including health care delivery assets (...0) Net adjustment in assets and liabilities due to foreign exchange rates Receivables from parent, subsidiaries and affiliates... 1,457, ,457, Health care (...0) and other amounts receivable Aggregate writeins for other than invested assets , , , , TOTAL Assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines 12 to 25) 73,018, , ,399, ,107, From Separate Accounts, Segregated Accounts and Protected Cell Accounts TOTAL (Lines 26 and 27)... 73,018, , ,399, ,107,377 DETAILS OF WRITEINS Summary of remaining writeins for Line 11 from overflow page TOTALS (Lines 1101 through 1103 plus 1198) (Line 11 above) Prepaid Expenses.. 82, , Prepaid Insurance.. 69, , Other Receivable.. 577, , , Summary of remaining writeins for Line 25 from overflow page TOTALS (Lines 2501 through 2503 plus 2598) (Line 25 above).. 729, , , ,491

3 3 LIABILITIES, SURPLUS AND OTHER FUNDS 1 2 Current Year Prior Year 1. Losses (Part 2A, Line 35, Column 8)... 14,645,657 5,531, Reinsurance payable on paid losses and loss adjustment expenses (Schedule F, Part 1, Column 6) Loss adjustment expenses (Part 2A, Line 35, Column 9) 2,739, , Commissions payable, contingent commissions and other similar charges Other expenses (excluding taxes, licenses and fees)... 52, , Taxes, licenses and fees (excluding federal and foreign income taxes). 373, , Current federal and foreign income taxes (including...0 on realized capital gains (losses)) , Net deferred tax liability.. 8. Borrowed money...93,934 and interest thereon , Unearned premiums (Part 1A, Line 38, Column 5) (after deducting unearned premiums for ceded reinsurance of...19,523,609 and including warranty reserves of...0 and accrued accident and health experience rating refunds including...0 for medical loss ratio rebate per the Public Health Service Act) ,199, ,383, Advance premiums. 1,385, , Dividends declared and unpaid: 11.1 Stockholders Policyholders Ceded reinsurance premiums payable (net of ceding commissions). 15,574,174 4,147, Funds held by company under reinsurance treaties (Schedule F, Part 3, Column 19) Amounts withheld or retained by company for account of others Remittances and items not allocated... 13, Provision for reinsurance (including (...0 certified)) (Schedule F, Part 8) Net adjustments in assets and liabilities due to foreign exchange rates Drafts outstanding Payable to parent, subsidiaries and affiliates... 1,248, Derivatives Payable for securities Payable for securities lending Liability for amounts held under uninsured plans Capital notes...0 and interest thereon Aggregate writeins for liabilities ,655 1,001, TOTAL Liabilities excluding protected cell liabilities (Lines 1 through 25) 49,203, ,468, Protected cell liabilities TOTAL Liabilities (Lines 26 and 27) ,203, ,468, Aggregate writeins for special surplus funds. 30. Common capital stock.. 2,500,000 2,500, Preferred capital stock Aggregate writeins for other than special surplus funds Surplus notes... 3,000, Gross paid in and contributed surplus.. 22,500, ,500, Unassigned funds (surplus)... (4,804,140) 1,638, Less treasury stock, at cost: shares common (value included in Line ) shares preferred (value included in Line ) Surplus as regards policyholders (Lines 29 to 35, minus 36) (Page 4, Line 39)... 23,195, ,638, TOTALS (Page 2, Line 28, Column 3) ,399, ,107,377 DETAILS OF WRITEINS Payable to Florida Citizens for Late Opt Outs... 41, , Premium Refunds Payable. 84, , Summary of remaining writeins for Line 25 from overflow page TOTALS (Lines 2501 through 2503 plus 2598) (Line 25 above) 125,655 1,001, Summary of remaining writeins for Line 29 from overflow page TOTALS (Lines 2901 through 2903 plus 2998) (Line 29 above) Summary of remaining writeins for Line 32 from overflow page TOTALS (Lines 3201 through 3203 plus 3298) (Line 32 above)...

4 4 STATEMENT OF INCOME 1 2 Current Prior Year Year UNDERWRITING INCOME 1. Premiums earned (Part 1, Line 35, Column 4)... 36,066, ,597,437 DEDUCTIONS 2. Losses incurred (Part 2, Line 35, Column 7). 23,699,064 9,969, Loss adjustment expenses incurred (Part 3, Line 25, Column 1).. 11,463,756 4,946, Other underwriting expenses incurred (Part 3, Line 25, Column 2) ,133, ,740, Aggregate writeins for underwriting deductions TOTAL Underwriting Deductions (Lines 2 through 5). 46,296, ,656, Net income of protected cells. 8. Net underwriting gain or (loss) (Line 1 minus Line 6 plus Line 7).... (10,230,057) 1,941,265 INVESTMENT INCOME 9. Net investment income earned (Exhibit of Net Investment Income, Line 17).. 837, , Net realized capital gains (losses) less capital gains tax of...(3,971) (Exhibit of Capital Gains (Losses)).. (7,708).. (20,116) 11. Net investment gain or (loss) (Lines ) 829, ,824 OTHER INCOME 12. Net gain or (loss) from agents' or premium balances charged off (amount recovered...0 amount charged off...49,043). (49,047).. (13,918) 13. Finance and service charges not included in premiums Aggregate writeins for miscellaneous income.. 518, TOTAL Other Income (Lines 12 through 14). 469,141.. (13,918) 16. Net income before dividends to policyholders, after capital gains tax and before all other federal and foreign income taxes (Lines )... (8,930,932) 2,607, Dividends to policyholders 18. Net income, after dividends to policyholders, after capital gains tax and before all other federal and foreign income taxes (Line 16 minus Line 17).. (8,930,932) 2,607, Federal and foreign income taxes incurred. (1,086,757) 2,687, Net income (Line 18 minus Line 19) (to Line 22) (7,844,175).. (79,966) CAPITAL AND SURPLUS ACCOUNT 21. Surplus as regards policyholders, December 31 prior year (Page 4, Line 39, Column 2)... 26,638, ,723, Net income (from Line 20). (7,844,175).. (79,966) 23. Net transfers (to) from Protected Cell accounts 24. Change in net unrealized capital gains or (losses) less capital gains tax of...82, ,423. 1, Change in net unrealized foreign exchange capital gain (loss). 26. Change in net deferred income tax... 1,724,170 1,851, Change in nonadmitted assets (Exhibit of Nonadmitted Assets Line 28, Column 3). (482,422) , Change in provision for reinsurance (Page 3, Line 16, Column 2 minus Column 1). 29. Change in surplus notes. 3,000, Surplus (contributed to) withdrawn from protected cells 31. Cumulative effect of changes in accounting principles Capital changes: 32.1 Paid in Transferred from surplus (Stock Dividend) Transferred to surplus. 33. Surplus adjustments: 33.1 Paid in Transferred to capital (Stock Dividend) 33.3 Transferred from capital Net remittances from or (to) Home Office Dividends to stockholders. 36. Change in treasury stock (Page 3, Line 36.1 and 36.2, Column 2 minus Column 1) 37. Aggregate writeins for gains and losses in surplus 38. Change in surplus as regards policyholders for the year (Lines 22 through 37)... (3,443,004) 1,915, Surplus as regards policyholders, December 31 current year (Line 21 plus Line 38) (Page 3, Line 37). 23,195, ,638,863 DETAILS OF WRITEINS Summary of remaining writeins for Line 5 from overflow page TOTALS (Lines 0501 through 0503 plus 0598) (Line 5 above) Rental Income. 518, Summary of remaining writeins for Line 14 from overflow page TOTALS (Lines 1401 through 1403 plus 1498) (Line 14 above). 518, Summary of remaining writeins for Line 37 from overflow page TOTALS (Lines 3701 through 3703 plus 3798) (Lines 37 above)...

5 5 CASH FLOW 1 2 Current Year Prior Year Cash from Operations 1. Premiums collected net of reinsurance... 36,054, ,983, Net investment income.... 1,163, , Miscellaneous income ,141.. (13,918) 4. TOTAL (Lines 1 through 3).. 37,687, ,591, Benefit and loss related payments... 14,585,075 4,437, Net transfers to Separate Accounts, Segregated Accounts and Protected Cell Accounts 7. Commissions, expenses paid and aggregate writeins for deductions. 20,604, ,647, Dividends paid to policyholders 9. Federal and foreign income taxes paid (recovered) net of...0 tax on capital gains (losses) ,584 1,988, TOTAL (Lines 5 through 9).. 36,138, ,074, Net cash from operations (Line 4 minus Line 10).. 1,549, ,517,707 Cash from Investments 12. Proceeds from investments sold, matured or repaid: 12.1 Bonds.... 6,876,796 4,927, Stocks. 300, , Mortgage loans Real estate Other invested assets.... 1,025, Net gains or (losses) on cash, cash equivalents and shortterm investments Miscellaneous proceeds 90, TOTAL Investment proceeds (Lines 12.1 to 12.7). 8,292,883 5,152, Cost of investments acquired (longterm only): 13.1 Bonds.... 9,108, ,299, Stocks. 742,609 2,542, Mortgage loans Real estate. 3,700, Other invested assets.... 1,000,000 2,000, Miscellaneous applications. 17, TOTAL Investments acquired (Lines 13.1 to 13.6) ,851, ,559, Net increase (decrease) in contract loans and premium notes Net cash from investments (Line 12.8 minus Line 13.7 minus Line 14).... (2,558,369).. (46,406,589) Cash from Financing and Miscellaneous Sources 16. Cash provided (applied): 16.1 Surplus notes, capital notes.. 3,000, Capital and paid in surplus, less treasury stock 16.3 Borrowed funds. 93, Net deposits on deposittype contracts and other insurance liabilities Dividends to stockholders Other cash provided (applied).. (4,449,595) 1,469, Net cash from financing and miscellaneous sources (Lines 16.1 to 16.4 minus Line 16.5 plus Line 16.6).. (1,355,661) 1,469,719 RECONCILIATION OF CASH, CASH EQUIVALENTS AND SHORTTERM INVESTMENTS 18. Net change in cash, cash equivalents and shortterm investments (Line 11, plus Lines 15 and 17) (2,364,713).. (10,419,162) 19. Cash, cash equivalents and shortterm investments: 19.1 Beginning of year... 14,228, ,647, End of year (Line 18 plus Line 19.1). 11,863, ,228,124 Note: Supplemental Disclosures of Cash Flow Information for NonCash Transactions:

6 6 UNDERWRITING AND INVESTMENT EXHIBIT PART 1 PREMIUMS EARNED Net Unearned Unearned Premiums Premiums Premiums Premiums Earned Written Per Dec. 31 Prior Year Dec. 31 During Year Column 6, per Column 3, Current Year per (Columns Line of Business Part 1B Last Year's Part 1 Column 5, Part 1A ) 1. Fire , , ,873 1,021, Allied lines... 4,443,547 5,392,425 2,545,798 7,290, Farmowners multiple peril.. 4. Homeowners multiple peril.. 19,725, ,235, ,209, ,751, Commercial multiple peril , ,228. 2, Mortgage guaranty. 8. Ocean marine. 9. Inland marine Financial guaranty Medical professional liability occurrence Medical professional liability claimsmade. 12. Earthquake 13. Group accident and health. 14. Credit accident and health (group and individual) Other accident and health Workers' compensation 17.1 Other liability occurrence Other liability claimsmade 17.3 Excess Workers' Compensation 18.1 Products liability occurrence Products liability claimsmade Private passenger auto liability Commercial auto liability Auto physical damage Aircraft (all perils) Fidelity 24. Surety. 26. Burglary and theft Boiler and machinery Credit International Warranty ReinsuranceNonproportional Assumed Property ReinsuranceNonproportional Assumed Liability 33. ReinsuranceNonproportional Assumed Financial Lines 34. Aggregate writeins for other lines of business TOTALS 24,882, ,383, ,199, ,066,330 DETAILS OF WRITEINS Summary of remaining writeins for Line 34 from overflow page TOTALS (Lines 3401 through 3403 plus 3498) (Line 34 above).

7 7 UNDERWRITING AND INVESTMENT EXHIBIT PART 1A RECAPITULATION OF ALL PREMIUMS Amount Unearned Amount Unearned Reserve for Total (Running One (Running More Rate Credits Reserve Year or Less Than One Year Earned and Retrospective For Unearned From Date From Date But Adjustments Premiums of Policy) of Policy) Unbilled Based on Columns Line of Business (a) (a) Premium Experience Fire 394, , Allied lines 2,545,798. 2,545, Farmowners multiple peril.. 4. Homeowners multiple peril ,209, ,209, Commercial multiple peril. 49,228 49, Mortgage guaranty. 8. Ocean marine.. 9. Inland marine Financial guaranty Medical professional liability occurrence Medical professional liability claimsmade Earthquake 13. Group accident and health Credit accident and health (group and individual) 15. Other accident and health Workers' compensation 17.1 Other liability occurrence Other liability claimsmade 17.3 Excess Workers' Compensation 18.1 Products liability occurrence Products liability claimsmade Private passenger auto liability Commercial auto liability Auto physical damage Aircraft (all perils) Fidelity 24. Surety. 26. Burglary and theft Boiler and machinery Credit International Warranty ReinsuranceNonproportional Assumed Property ReinsuranceNonproportional Assumed Liability. 33. ReinsuranceNonproportional Assumed Financial Lines 34. Aggregate writeins for other lines of business TOTALS.. 14,199, ,199, Accrued retrospective premiums based on experience Earned but unbilled premiums Balance (Sum of Lines 35 through 37) ,199,410 DETAILS OF WRITEINS Summary of remaining writeins for Line 34 from overflow page TOTALS (Lines 3401 through 3403 plus 3498) (Line 34 above).. (a) State here basis of computation used in each case:

8 8 UNDERWRITING AND INVESTMENT EXHIBIT PART 1B PREMIUMS WRITTEN 1 Reinsurance Assumed Reinsurance Ceded Net Premiums Direct Written Business From From To To Columns Line of Business (a) Affiliates NonAffiliates Affiliates NonAffiliates Fire.... 1,483, , , , Allied lines... 10,176, , ,425,190 4,443, Farmowners multiple peril 4. Homeowners multiple peril ,802, ,398,653 27,475, ,725, Commercial multiple peril.. 51, , Mortgage guaranty Ocean marine Inland marine 10. Financial guaranty Medical professional liability occurrence Medical professional liability claimsmade. 12. Earthquake Group accident and health Credit accident and health (group and individual) Other accident and health 16. Workers' compensation Other liability occurrence 17.2 Other liability claimsmade Excess Workers' Compensation Products liability occurrence 18.2 Products liability claimsmade Private passenger auto liability Commercial auto liability 21. Auto physical damage Aircraft (all perils) 23. Fidelity Surety Burglary and theft 27. Boiler and machinery. 28. Credit International Warranty. 31. ReinsuranceNonproportional Assumed Property. X X X ReinsuranceNonproportional Assumed Liability.. X X X ReinsuranceNonproportional Assumed Financial Lines... X X X Aggregate writeins for other lines of business TOTALS.. 57,514, ,177,894 34,810, ,882,450 DETAILS OF WRITEINS Summary of remaining writeins for Line 34 from overflow page TOTALS (Lines 3401 through 3403 plus 3498) (Line 34 above).. (a) Does the company's direct premiums written include premiums recorded on an installment basis? If yes, (1) The amount of such installment premiums...0. (2) Amount at which such installment premiums would have been reported had they been recorded on an annualized basis...0

9 9 UNDERWRITING AND INVESTMENT EXHIBIT PART 2 LOSSES PAID AND INCURRED Losses Paid Less Salvage Net Losses Losses Percentage of Net Unpaid Net Incurred Losses Incurred Payments Current Year Losses Current Year (Column 7, Part 2) Direct Reinsurance Reinsurance (Columns (Part 2A, Unpaid (Columns to Premiums Earned Line of Business Business Assumed Recovered ) Column 8) Prior Year ) (Column 4, Part 1) 1. Fire ,105 58, , , , , Allied lines... 1,333, , ,183,454. 2,598, ,696. 3,905, Farmowners multiple peril. 4. Homeowners multiple peril. 7,284,196. 4,822, ,106,868 11,085,395. 3,881,369 19,310, Commercial multiple peril Mortgage guaranty Ocean marine Inland marine 10. Financial guaranty 11.1 Medical professional liability occurrence Medical professional liability claimsmade Earthquake Group accident and health 14. Credit accident and health (group and individual) 15. Other accident and health. 16. Workers' compensation Other liability occurrence 17.2 Other liability claimsmade Excess Workers' Compensation Products liability occurrence Products liability claims made Private passenger auto liability Commercial auto liability. 21. Auto physical damage. 22. Aircraft (all perils). 23. Fidelity Surety Burglary and theft 27. Boiler and machinery Credit International. 30. Warranty 31. ReinsuranceNonproportional Assumed Property ReinsuranceNonproportional Assumed Liability. 33. ReinsuranceNonproportional Assumed Financial Lines Aggregate writeins for other lines of business TOTALS.. 8,853,917. 5,731, ,585,075 14,645,657. 5,531,668 23,699, DETAILS OF WRITEINS Summary of remaining writeins for Line 34 from overflow page TOTALS (Lines 3401 through 3403 plus 3498) (Line 34 above)

10 10 UNDERWRITING AND INVESTMENT EXHIBIT PART 2A UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES Reported Losses Incurred But Not Reported Net Losses Excluding Net Net Deduct Incurred But Not Losses Unpaid Unpaid Loss Reinsurance Reinsurance Reported Reinsurance Reinsurance (Columns Adjustment Line of Business Direct Assumed Recoverable (Columns ) Direct Assumed Ceded ) Expenses 1. Fire. 106, , , , , ,753 61, Allied Lines.. 603, , ,280. 1,176, , ,598, , Farmowners multiple peril. 4. Homeowners multiple peril.. 4,423,322. 1,571, ,994,839. 3,875,671. 1,214, ,085,395. 2,237, Commercial multiple peril , Mortgage guaranty Ocean marine Inland marine 10. Financial guaranty 11.1 Medical professional liability occurrence 11.2 Medical professional liability claimsmade Earthquake Group accident & health. (a) Credit accident & health (group & individual). 15. Other accident & health.. (a) Workers' compensation Other liability occurrence Other liability claimsmade Excess Workers' Compensation 18.1 Products liability occurrence Products liability claimsmade Private passenger auto liability Commercial auto liability Auto physical damage 22. Aircraft (all perils). 23. Fidelity Surety Burglary and theft 27. Boiler and machinery. 28. Credit International. 30. Warranty 31. ReinsuranceNonproportional Assumed Property ReinsuranceNonproportional Assumed Liability ReinsuranceNonproportional Assumed Financial Lines Aggregate writeins for other lines of business TOTALS.... 5,132,860. 2,193, ,326,372. 5,264,232. 2,055, ,645,657. 2,739,247 DETAILS OF WRITEINS Summary of remaining writeins for Line 34 from overflow page TOTALS (Lines 3401 through 3403 plus 3498) (Line 34 above).... (a) Including...0 for present value of life indemnity claims.

11 11 UNDERWRITING AND INVESTMENT EXHIBIT PART 3 EXPENSES Loss Other Adjustment Underwriting Investment Expenses Expenses Expenses Total 1. Claim adjustment services: 1.1 Direct... 4,088,967. 4,088, Reinsurance assumed.. 4,085,210. 4,085, Reinsurance ceded Net claim adjustment services ( )... 8,174,177. 8,174, Commission and brokerage: 2.1 Direct, excluding contingent.... 6,035, ,035, Reinsurance assumed, excluding contingent. 108, , Reinsurance ceded, excluding contingent.. 2,742, ,742, Contingent direct 2.5 Contingent reinsurance assumed. 2.6 Contingent reinsurance ceded Policy and membership fees. 917, , Net commission and brokerage ( ).. 4,318, ,318, Allowances to manager and agents.. 293, , Advertising , , , Boards, bureaus and associations... 3, , , Surveys and underwriting reports.. 143, , , Audit of assureds' records 8. Salary and related items: 8.1 Salaries 1,857,798 2,993, ,851, Payroll taxes.. 125, , , Employee relations and welfare , , , Insurance. 22, , , Directors' fees 12. Travel and travel items 65, , , Rent and rent items , , , Equipment , , , Cost or depreciation of EDP equipment and software , , , , Printing and stationery 326, , , Postage, telephone and telegraph, exchange and express.. 27, , , Legal and auditing. 49,335. (353,315) ,608. (224,372) 19. TOTALS (Lines 3 to 18) 3,289,579 5,658, ,610 9,141, Taxes, licenses and fees: 20.1 State and local insurance taxes deducting guaranty association credits of , , Insurance department licenses and fees... 38, , Gross guaranty association assessments All other (excluding federal and foreign income and real estate) 20.5 TOTAL taxes, licenses and fees ( ) 1,011, ,011, Real estate expenses , , Real estate taxes 41, , Reimbursements by uninsured plans Aggregate writeins for miscellaneous expenses TOTAL expenses incurred 11,463, ,133, ,610 (a) 22,790, Less unpaid expenses current year.... 2,739, , ,165, Add unpaid expenses prior year. 798, , ,039, Amounts receivable relating to uninsured plans, prior year. 29. Amounts receivable relating to uninsured plans, current year TOTAL EXPENSES PAID (Lines ).... 9,522, ,948, , ,664,854 DETAILS OF WRITEINS Summary of remaining writeins for Line 24 from overflow page TOTALS (Lines 2401 through 2403 plus 2498) (Line 24 above).... (a) Includes management fees of...13,477,200 to affiliates and...0 to nonaffiliates.

12 12 EXHIBIT OF NET INVESTMENT INCOME 1 2 Collected Earned During Year During Year 1. U.S. Government bonds (a). 21, , Bonds exempt from U.S. tax (a). 87, , Other bonds (unaffiliated)... (a) , , Bonds of affiliates.. (a) Preferred stocks (unaffiliated)... (b). 62, , Preferred stocks of affiliates (b) Common stocks (unaffiliated).. 45, , Common stocks of affiliates.. 3. Mortgage loans (c).. 4. Real estate (d).. 5. Contract loans Cash, cash equivalents and shortterm investments. (e) , , Derivative instruments.. (f) Other invested assets. 48, , Aggregate writeins for investment income 10. TOTAL Gross investment income. 990,203 1,031, Investment expenses.... (g). 79, Investment taxes, licenses and fees, excluding federal income taxes. (g) Interest expense (h) Depreciation on real estate and other invested assets.... (i) 114, Aggregate writeins for deductions from investment income 16. TOTAL Deductions (Lines 11 through 15).. 193, Net Investment income (Line 10 minus Line 16) ,692 DETAILS OF WRITEINS Summary of remaining writeins for Line 9 from overflow page TOTALS (Lines 0901 through 0903 plus 0998) (Line 9 above) Summary of remaining writeins for Line 15 from overflow page TOTALS (Lines 1501 through 1503 plus 1598) (Line 15 above) (a) Includes accrual of discount less...367,685 amortization of premium and less...12,255 paid for accrued interest on purchases. (b) Includes...0 accrual of discount less...0 amortization of premium and less...0 paid for accrued dividends on purchases. (c) Includes...0 accrual of discount less...0 amortization of premium and less...0 paid for accrued interest on purchases. (d) Includes...0 for company's occupancy of its own buildings; and excludes...0 interest on encumbrances. (e) Includes...0 accrual of discount less...0 amortization of premium and less...0 paid for accrued interest on purchases. (f) Includes...0 accrual of discount less...0 amortization of premium. (g) Includes...0 investment expenses and...0 investment taxes, licenses and fees, excluding federal income taxes, attributable to segregated and Separate Accounts. (h) Includes...0 interest on surplus notes and...0 interest on capital notes. (i) Includes...114,002 depreciation on real estate and...0 depreciation on other invested assets. EXHIBIT OF CAPITAL GAINS (LOSSES) Total Realized Change in Realized Gain Capital Gain Change in Unrealized Foreign (Loss) on Sales Other Realized (Loss) Unrealized Capital Exchange Capital or Maturity Adjustments (Columns 1 + 2) Gain (Loss) Gain (Loss) 1. U.S. Government bonds Bonds exempt from U.S. tax... 5, , Other bonds (unaffiliated).... (2,012) (2,012) Bonds of affiliates Preferred stocks (unaffiliated) (8,241) (8,241).. (26,488) Preferred stocks of affiliates Common stocks (unaffiliated) (6,777) (6,777).. 164, Common stocks of affiliates 3. Mortgage loans 4. Real estate 5. Contract loans. 6. Cash, cash equivalents and shortterm investments. 7. Derivative instruments. 8. Other invested assets 103, Aggregate writeins for capital gains (losses) TOTAL Capital gains (losses)... (11,679).... (11,679).. 241,550.. DETAILS OF WRITEINS Summary of remaining writeins for Line 9 from overflow page TOTALS (Lines 0901 through 0903 plus 0998) (Line 9 above)..

13 13 EXHIBIT OF NONADMITTED ASSETS Change in Total Current Year Total Prior Year Total Nonadmitted Assets Nonadmitted Assets Nonadmitted Assets (Col. 2 Col. 1) 1. Bonds (Schedule D) 2. Stocks (Schedule D): 2.1 Preferred stocks Common stocks 3. Mortgage loans on real estate (Schedule B): 3.1 First liens Other than first liens 4. Real estate (Schedule A): 4.1 Properties occupied by the company 4.2 Properties held for the production of income 4.3 Properties held for sale. 5. Cash (Schedule EPart 1), cash equivalents (Schedule EPart 2) and shortterm investments (Schedule DA). 6. Contract loans.. 7. Derivatives (Schedule DB).. 8. Other invested assets (Schedule BA) Receivables for securities Securities lending reinvested collateral assets (Schedule DL) Aggregate writeins for invested assets Subtotals, cash and invested assets (Lines 1 to 11). 13. Title plants (for Title insurers only) Invested income due and accrued Premium and considerations: 15.1 Uncollected premiums and agents' balances in the course of collection Deferred premiums, agents' balances and installments booked but deferred and not yet due Accrued retrospective premiums and contracts subject to redetermination Reinsurance: 16.1 Amounts recoverable from reinsurers Funds held by or deposited with reinsured companies Other amounts receivable under reinsurance contracts Amounts receivable relating to uninsured plans Current federal and foreign income tax recoverable and interest thereon Net deferred tax asset. 467, (467,255) 19. Guaranty funds receivable or on deposit. 20. Electronic data processing equipment and software. 21. Furniture and equipment, including health care delivery assets Net adjustment in assets and liabilities due to foreign exchange rates Receivables from parent, subsidiaries and affiliates. 24. Health care and other amounts receivable Aggregate writeins for other than invested assets.. 151, ,355.. (15,167) 26. TOTAL Assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines 12 to 25). 618, ,355. (482,422) 27. From Separate Accounts, Segregated Accounts and Protected Cell Accounts TOTAL (Lines 26 and 27). 618, ,355. (482,422) DETAILS OF WRITEINS Summary of remaining writeins for Line 11 from overflow page TOTALS (Lines 1101 through 1103 plus 1198) (Line 11 above) Prepaid Expenses. 82, , , Prepaid Insurance. 69, ,076.. (58,946) Summary of remaining writeins for Line 25 from overflow page TOTALS (Lines 2501 through 2503 plus 2598) (Line 25 above). 151, ,355.. (15,167)

14 2016 Anchor Property Casualty Insurance Company Notes to Financial Statements 1. Summary of Significant Accounting Practices Accounting practices The accompanying financial statements of Anchor Property and Casualty Insurance Company ("the Company") have been prepared in accordance with statutory accounting practices prescribed or permitted by the Florida Office of Insurance Regulation ("FLOIR"). The state of Florida requires insurance companies domiciled in the state of Florida to prepare their statutory financial statements in accordance with the National Association of Insurance Commissioners' (NAIC) Accounting Practices and Procedures Manual (SAP) subject to any deviations prescribed or permitted by the Florida Office of Insurance Regulation. There are no differences between the Company's net profit as reported in the accompanying statutorybasis financial statements and prescribed methods under NAIC SAP. State of Domicile NET INCOME FL (1) ANCHOR PROPERTY AND CASUALTY INSURANCE COMPANY state basis (Page 4, Line 20, Columns 1 & 2) (7,844,175) (79,966) (7,844,175) (79,966) 23,195,860 26,638,863 23,195,860 26,638,863 (2) State Prescribed Practices that increase/(decrease) NAIC SAP (3) State Permitted Practices that increase/(decrease) NAIC SAP (4) NAIC SAP (123=4) SURPLUS FL (1) ANCHOR PROPERTY AND CASUALTY INSURANCE COMPANY state basis (Page 3, Line 37, Columns 1 & 2) (2) State Prescribed Practices that increase/(decrease) NAIC SAP (3) State Permitted Practices that increase/(decrease) NAIC SAP (4) NAIC SAP (123=4) Use of estimates The preparation of statutory financial statements in conformity with the Annual Statement instructions and Accounting Practices and Procedures Manual requires management to make estimates and assumptions that affect the reported amounts in these financial statements and notes. Actual results could differ from these estimates. C. Accounting policies Premiums are earned over the term of the related policies and reinsurance contracts. Unearned premiums are established to cover the unexpired portion of premiums written. Such reserves are computed using the daily pro rata method for direct business. Expenses incurred in connection with acquiring new insurance business, including acquisition costs such as sales commissions, are charged to operations as incurred. Expenses incurred are reduced for ceding allowances received or receivable. Net investment income earned consists primarily of interest and dividend income reduced by investment related expenses. Interest is recognized on an accrual basis and dividends are recognized on a receipt basis. Net realized capital gains (losses) are recognized on a specific identification basis when securities are sold, redeemed or otherwise disposed. Real estate investements are classified in the balance sheet as properties occupied by the Company and are carried at depreciated cost less encumbrances. In addition, the Company uses the following significant accounting policies: 1) Shortterm investments are stated at amortized cost. 2) Investment grade longterm bonds not backed by other loans are stated at amortized value using the interest method. 3) Common stocks are stated at fair value. 4) Investment grade redeemable preferred stocks are stated at amortized value and investment grade perpetual preferred stocks are stated at fair value. 5) Mortgage loans not applicable. 6) Investment grade loanbacked securities are stated at amortized cost. The prospective adjustment method is used to determine amortized value for all loanbacked securities. 7) Investments in subsidiaries and affiliates not applicable. 8) Investments in joint ventures and partnerships are stated at the underlying audited GAAP equity value. Investments in real estate properties occupied by the Company are stated at depreciated cost less encumbrances. 9) Derivatives not applicable. 10) The Company does not anticipate investment income when evaluating the need for premium deficiency reserve calculations. 11) Unpaid losses and loss adjustment expenses include an amount determined from individual case estimates and loss reports and an amount, based on industry experience, for losses incurred but not reported. Such liabilities are based on assumptions and estimates, and while management believes the amount is adequate, the ultimate liability may be in excess of or less than the amount provided. The methods for making such estimates and for establishing the resulting liabilities are continually reviewed and any adjustments are reflected in the current period. 12) The Company s capitalization policy is to capitalize all prepaid expenses and those purchases of items, such as, electronic data processing equipment, software, furniture, vehicles, other equipment and leasehold improvements that exceed 1, ) Capitalization policy not applicable. D. Going concern not applicable. 2. Accounting Changes and Correction of Errors 3. Business Combinations and Goodwill Statutory purchase method Statutory mergers C. Writedowns for impairment of investments in affiliates Discontinued Operations 5. Investments Dates and effects on financial statements. Mortgage loans, including mezzanine real estate loans Troubled debt restructuring for creditors C. Reverse mortgages D. Loanbacked securities... 1) Prepayment assumptions for MortgageBacked Securities, Collateralized Mortgage Obligations and Other Structured Securities were generated using a purchased prepayment model. The prepayment model uses a number of factors to estimate prepayment activity including the time of year (seasonality), current levels of interest rates (refinancing incentive), economic activity (including housing turnover) and term and age of the underlying collateral (burnout, seasoning). On an ongoing basis, we monitor the rate of prepayment and calibrate the model to reflect actual experience, market factors, and viewpoint. 2) The Company has no other than temporary impairment (OTTI) due to the intent to sell or inability or lack of intent to hold any securities which had a fair value lower than its carrying value. 3) As of December 31, 2016, there are no loanbacked or structured securities held by the Company for which an OTTI loss is recorded. OTTI is measured as the difference between amortized cost and estimated present value of projected cash flows to be collected. 4) All impaired securities (fair value is less than cost or amortized cost) for which an otherthantemporary impairment has not been recognized in earnings as realized loss (including securities with a recognized otherthantermporary impairment for noninterest related declines when a nonrecognized interest related impairment remains): a. The aggregate amount of unrealized losses b. The aggregate related fair value of securities with unrealized losses 1 Less than 12 Months 2 12 Months or longer 1 Less than 12 Months 2 12 Months or longer 38,850 16,416 3,233, ,447 E. Repurchase agreements and/or securities lending transactions F. Writedowns for impairments of real estate, real estate sales, retail land sales operations and real estate with participating mortgage loan features G. Low income housing credits H. Resticted assets.... I. Working capital finance investments. J. Offsets and netting of assets and liabilities K. Structured notes.. 6. Joint Venture, Partnerships and Limited Liability Companies Details for those greater that 10% of admitted assets Writedowns for impairments of joint ventures, partnerships, LLCs.. 7. Investment Income Accrued investment income Amounts nonadmitted The company nonadmits investment income due and accrued over 90 days past due.. 8. Derivative Instruments Purpose, risks, accounting. 14.0

15 2016 Anchor Property Casualty Insurance Company Notes to Financial Statements 9. Income Taxes Deferred Tax Asset/(Liability) 1) Components of Net Deferred Tax Asset/(Liability) December 31, 2016 Ordinary (a)gross deferred tax assets 3,561,725 Capital December 31, 2015 Total Ordinary 3,561,725 Change Capital 1,851,749 Total Ordinary 1,851,749 Capital 1,709,976 Total 1,709,976 (b)statutory valuation adjustment (c)adjusted gross deferred tax asset 3,561,725 (d)deferred tax assets non admitted 3,094,470 (f)deferred Tax Liabilities (g)net Admitted Deferred Tax Assets 3,561, ,255 3,094,470 1,851, ,255 (e)subtotal net admitted deferred tax asset 68,933 3,094,470 2) Admission Calculation Components 1,851,749 68,933 (68,933) 3,025,537 Capital 1,851, ,255 1,851,749 1,242,721 1,001 1,851,749 December 31, 2016 Ordinary 1,709,976 1,001 (1,001) 1,850,748 1,242,721 Ordinary 1,242,721 67,932 December 31, 2015 Total 1,709, , ,932 (67,932) 1,174,789 Change Capital Total Ordinary Capital Total a) Federal income tax paid in prior year recoverable through loss carrybacks b) Adjusted gross deferred tax asset expected to be realized after application of threshold limitation 3,094,470 (68,933) 3,025,537 1,851,749 3,094,470 (68,933) 3,025,537 3,025,548 1,851,749 1,242,721 1,851,749 1,851,749 1,242,721 3,718,217 3,718,217 (68,933) 1,173,788 i Adjusted gross deferred tax assets expected to be realized following balance 1,242,721 sheet date ii Adjusted gross deferred tax asset allowed per threshold 3,025,548 (692,669) (692,669) c) Adjusted gross deferred tax assets offset by gross deferred tax liabilities d) Deferred tax assets admitted as the result of application of SSAP 101 3,094,470 (68,933) 3,025,537 1,851,749 1,851,749 1,242,721 (68,933) 1,173,788 3) Other Admissibility Criteria a) Ratio percentage used to determine recovery period and threshold limitation amount 529% 806% b) Amount of adjusted capital and surplus used to determine recovery period and threshold limitation in 2(b) 20,170,323 24,788,115 c) The company's taxplanning strategies did not include the use of reinsurancerelated tax planning strategies 4) Impact of Tax Planning Strategies December 31, 2016 Ordinary a) Adjusted Gross DTAs (% Total Adjusted Gross DTAs) b) Net Admitted Adjusted Gross DTAs (%of Total Net Admitted Adjusted 3,094,470 0% Capital 0% 3,094,470 0% December 31, 2015 Total (68,933) 0% 3,025,537 Total (1,001) 0% 1,851,749 0% Change Capital 1,851,749 0% (68,933) 0% Ordinary 3,025,537 0% (1,001) 0% Gross DTAs) c) Does the companies tax planning strategies include the use of reinsurance Deferred Tax Liability Not Recognized This in C. Current Tax and Change in Deferred Income Tax Yes [ 2016 ] No [ X ] 2015 Change 1) Current Income Tax a) Federal (1,342,717) 2,687,137 (4,029,854) (1,342,717) 2,687,137 (4,029,854) b) Foreign c) Subtotal d) Federal income tax on net capital gains (3,971) (10,363) 6,392 e) Utilization of capital loss carryforwards f) Other Federal and foreign income taxes incurred 259,931 (1,086,757) 259,931 2,676,774 (3,763,531) 2) Deferred Tax Assets a) Ordinary (1) Discounting unpaid losses (2) Unearned premium reserve 155, ,686 1,059,759 1,726,064 29,947 (666,305) (3) Policyholder reserves (4) Investments (5) Deferred acquisition costs (6) Policyholder dividends accrual (7) Fixed assets (8) Compensation and benefits accrual (9) Pension accrual (10) Receivables nonadmitted (11) Net operating loss carryforward 2,346,333 2,346,333 (12) Tax credit carryforward (13) Other b) Statutory valuation allowance adjustment c) Nonadmitted (467,255) d) Admitted ordinary deferred tax assets 3,094,470 (467,255) 1,851,749 1,242,721 e) Capital (1) Investments (99) Subtotal f) Statutory valuation allowance adjustment g) Nonadmitted h) Admitted capital deferred tax assets (2e992f2g) i) Admitted deferred tax assets (2d+2h) 3) Deferred Tax Liabilities Change a) Ordinary (1) Investments (2) Fixed assets (3) Other (including items <5% of total ordinary tax liabilities (99) Subtotal b) Capital (1) Investments (83,128) (2) Net capital loss carry forward (99) Subtotal 0 (68,933) c) Deferred tax liabilities (3a99=3b99) (1,001) (68,933) 4) Net Deferred Tax Assets D. (1,001) 14,195 3,025,537 (1,001) 1,850,748 (82,127) 14,195 (67,932) (67,932) 1,174,789 Reconciliation of Federal Income Tax Rate to Actual Effective Rate The significant items causing a difference between the statutory federal income tax and the Company's effective income tax rate Effective 2016 Provision calculated at statutory rate (8,934,904) 34.00% Dividend Received Deduction (22,154) 0.25% Tax Exempt Interest (44,552) 0.50% Accrual adjustment prior year 259, % 29, % Other Total (2,814,899) 31.50% Federal and foreign income tax incurred (1,086,757) 12.16% Realized capital loss tax Change in net deferred income tax Total statutory income taxes E. Tax Rate (3,037,867) (3,971) 0.04% (1,724,171) 19.30% (2,814,899) 31.50% Operating Loss and Tax Credit Carry forwards and Protective Tax Deposits F Consolidated Federal Income Tax Return (1) The Company's federal income tax return is consolidated with the following entities: Anchor Insurance Holdings, Inc. (FL) Anchor Insurance Managers, Inc. (FL) Anchor Specialty Insurance Company (TX) Southeast Surplus Underwriters General Agency, Inc. (TX) Spindletop Premium Finance, Inc. (TX) Anchor Realty Partners, LLC (FL) Grappling Hook Investments, Inc. (FL) Lozano Insurance Adjusters, Inc. (FL) (2) The method of allocation among companies is subject to a written agreement, approved by the Board of Directors, whereby allocation is made primarily on a separate return basis with current credit for any net operating losses or other items utilized in the consolidated tax return. G. Federal or Foreign Federal Income Tax Loss Contingencies The Company has no tax loss contingencies for which it is reasonably possible that the total liability will significantly increase within twelve months of the reporting date ,850,748 Ordinary 1,242,721 0% 0% 1,850,748 1,242,721 0% 0% Capital (67,932) 0% (67,932) 0% Total 1,174,789 0% 1,174,789 0%