* * PROPERTY AND CASUALTY COMPANIES - ASSOCIATION EDITION

Transcription

1 * * PROPERTY AND CASUALTY COMPANIES - ASSOCIATION EDITION ANNUAL STATEMENT FOR THE YEAR ENDED DECEMBER, 06 OF THE CONDITION AND AFFAIRS OF THE ONE ALLIANCE INSURANCE CORPORATION NAIC Group Code 0000 NAIC Company Code 566 Employer's ID Number (Current) (Prior) Organized under the Laws of COMMONWEALTH OF PUERTO RICO, State of Domicile or Port of Entry PR Country of Domicile COMMONWEALTH OF PUERTO RICO Incorporated/Organized /9/0 Commenced Business 0/0/05 Statutory Home Office 70 MUÑOZ RIVERA AVENUE, SAN JUAN,, PRI 0098 (Street Number) (City or Town, State, Country Zip Code) Main Administrative Office 70 MUÑOZ RIVERA AVENUE (Street Number) SAN JUAN,, PRI 0090, (City or Town, State, Country Zip Code) (Area Code) (Telephone Number) Mail Address PO BOX 90968, SAN JUAN,, PRI 0098 (Street Number or P.O. Box) (City or Town, State, Country Zip Code) Primary Location of Books Records 70 MUÑOZ RIVERA AVENUE (Street Number) SAN JUAN,, PRI 0098, (City or Town, State, Country Zip Code) (Area Code) (Telephone Number) Internet Website Address Statutory Statement Contact RAFAEL E BETANCOURT, (Name) (Area Code) (Telephone Number) rafael.betancourt@onealliancepr.com, ( Address) (FAX Number) PRESIDENT FINANCE VICE PRESIDENT VICTOR R RIOS RAFAEL E BETANCOURT OFFICERS CORPORATE SECRETARY JESUS M DEL VALLE OTHER DIRECTORS OR TRUSTEES VICTOR R RIOS OSWALDO KARAM RICARDO BENITEZ JESUS M DEL VALLE RAFAEL E BETANCOURT # State of County of COMMONWEALTH OF PUERTO RICO COMMONWEALTH OF PUERTO RICO SS: The officers of this reporting entity being duly sworn, each depose say that they are the described officers of said reporting entity, that on the reporting period stated above, all of the herein described assets were the absolute property of the said reporting entity, free clear from any liens or claims thereon, except as herein stated, that this statement, together with related exhibits, schedules explanations therein contained, annexed or referred to, is a full true statement of all the assets liabilities of the condition affairs of the said reporting entity as of the reporting period stated above, of its income deductions therefrom for the period ended, have been completed in accordance with the NAIC Annual Statement Instructions Accounting Practices 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 procedures, according to the best of their information, knowledge 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. VICTOR R. RIOS PRESIDENT RAFAEL E. BETANCOURT FINANCE VICE PRESIDENT a. Is this an original filing? Yes [ X ] No [ ] Subscribed sworn to before me this b. If no, day of. State the amendment number. Date filed. Number of pages attached

2 ANNUAL STATEMENT FOR THE YEAR 06 OF THE One Alliance Insurance Corporation ASSETS Assets Current Year Nonadmitted Assets Net Admitted Assets (Cols. - ) Prior Year Net Admitted Assets. Bonds (Schedule D) 9,07,65 9,07,65 9,06,709. Stocks (Schedule D):. Preferred stocks 0 0. Common stocks 0 0. Mortgage loans on real estate (Schedule B):. First liens 0 0. Other than first liens 0 0. Real estate (Schedule A):. Properties occupied by the company (less $,86,69 encumbrances),,89,,89,70,6. Properties held for the production of income (less $ 0 encumbrances) 0 0. Properties held for sale (less $ 0 encumbrances) Cash ($,79, Schedule E - Part ), cash equivalents ($, Schedule E - Part ) short-term investments ($, Schedule DA),79,79 59,57 6. Contract loans (including $ premium notes) Derivatives (Schedule DB) Other invested assets (Schedule BA) Receivable for securities Securities lending reinvested collateral assets (Schedule DL) 0 0. Aggregate write-ins for invested assets Subtotals, cash invested assets (Lines to ),7,0 0,7,0,566,7. Title plants less $ charged off (for Title insurers only) 0 0. Investment income due accrued,7,7 69,66 5. Premiums considerations: 5. Uncollected premiums agents' balances in the course of collection,069,57 7,0 8,97 89, Deferred premiums agents' balances installments booked but deferred not yet due (including $ earned but unbilled premiums) Accrued retrospective premiums ($ ) 6. Reinsurance: contracts subject to redetermination ($ ) Amounts recoverable from reinsurers 7,88 7,88 6,59 6. Funds held by or deposited with reinsured companies Other amounts receivable under reinsurance contracts Amounts receivable relating to uninsured plans Current federal foreign income tax recoverable interest thereon Net deferred tax asset Guaranty funds receivable or on deposit Electronic data processing equipment software 50,787 50,787 9,809. Furniture equipment, including health care delivery assets ($ ),97, Net adjustment in assets liabilities due to foreign exchange rates 0 0. Receivables from parent, subsidiaries affiliates 0,80 50,000 80,80 0. Health care ($ ) other amounts receivable Aggregate write-ins for other than invested assets 70,7 70, Total assets excluding Separate Accounts, Segregated Accounts Protected Cell Accounts (Lines to 5),06,95,,099,765,85,89, From Separate Accounts, Segregated Accounts Protected Cell Accounts Total (Lines 6 7),06,95,,099,765,85,89, DETAILS OF WRITE-INS 98. Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above) Prepaid Items,98, Other Receivable 707,97 707, Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 thru 50 plus 598)(Line 5 above) 70,7 70,7 0 5

3 ANNUAL STATEMENT FOR THE YEAR 06 OF THE One Alliance Insurance Corporation LIABILITIES, SURPLUS AND OTHER FUNDS Current Year Prior Year. Losses (Part A, Line 5, Column 8) 0,895 6,7. Reinsurance payable on paid losses loss adjustment expenses (Schedule F, Part, Column 6) 0 0. Loss adjustment expenses (Part A, Line 5, Column 9) 8,98,59. Commissions payable, contingent commissions other similar charges 8,89 5. Other expenses (excluding taxes, licenses fees) 95,050 6, Taxes, licenses fees (excluding federal foreign income taxes) 5, 7. Current federal foreign income taxes (including $ on realized capital gains (losses)) 7. Net deferred tax liability 8. Borrowed money $ interest thereon $,8,57 9. Unearned premiums (Part A, Line 8, Column 5) (after deducting unearned premiums for ceded reinsurance of $ 67,000 including warranty reserves of $ accrued accident health experience rating refunds including $ 0 for medical loss ratio rebate per the Public Health Service Act),6,96 0,89 0. Advance premium 0,550 5,58. Dividends declared unpaid:. Stockholders. Policyholders. reinsurance premiums payable (net of ceding commissions) 55,000 0,000. Funds held by company under reinsurance treaties (Schedule F, Part, Column 9) 0 0. Amounts withheld or retained by company for account of others,97,58 5. Remittances items not allocated 6. Provision for reinsurance (including $ 0 certified) (Schedule F, Part 8) 0 7. Net adjustments in assets liabilities due to foreign exchange rates 8. Drafts outsting 9. Payable to parent, subsidiaries affiliates 0. Derivatives 0 0. Payable for securities. Payable for securities lending. Liability for amounts held under uninsured plans. Capital notes $ interest thereon $ 5. Aggregate write-ins for liabilities 56 6,86 6. Total liabilities excluding protected cell liabilities (Lines through 5) 5,67,550 95,6 7. Protected cell liabilities 8. Total liabilities (Lines 6 7) 5,67,550 95,6 9. Aggregate write-ins for special surplus funds,788,8 0. Common capital stock 9,75,05 9,75,05. Preferred capital stock. Aggregate write-ins for other than special surplus funds 0 0. Surplus notes 0 0. Gross paid in contributed surplus 5,65,000 5,65, Unassigned funds (surplus) 6. Less treasury stock, at cost: 6. shares common (value included in Line 0 $ ) 6. shares preferred (value included in Line $ ) (7,98,5) (,065,88) 7. Surplus as regards policyholders (Lines 9 to 5, less 6) (Page, Line 9) 7,09,0 0,98, TOTALS (Page, Line 8, Col. ),765,85,89,598 DETAILS OF WRITE-INS 50. Accts. Payable Others 56 6, Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 thru 50 plus 598)(Line 5 above) 56 6, Puerto Rico Catastrophic Fund,788, Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 90 thru 90 plus 998)(Line 9 above),788, Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above) 0 0

4 ANNUAL STATEMENT FOR THE YEAR 06 OF THE One Alliance Insurance Corporation STATEMENT OF INCOME Current Year UNDERWRITING INCOME Prior Year. Premiums earned (Part, Line 5, Column ) 859,50 85,75 DEDUCTIONS:. Losses incurred (Part, Line 5, Column 7) 5,07 9,5. Loss adjustment expenses incurred (Part, Line 5, Column ) 7,6,78. Other underwriting expenses incurred (Part, Line 5, Column ),090,88,667,5 5. Aggregate write-ins for underwriting deductions Total underwriting deductions (Lines through 5),6,599,77,0 7. Net income of protected cells 8. Net underwriting gain or (loss) (Line minus Line 6 plus Line 7) (,78,097) (,587,88) INVESTMENT INCOME 9. Net investment income earned (Exhibit of Net Investment Income, Line 7) 5,879 8,9 0. Net realized capital gains or (losses) less capital gains tax of $ 0 (Exhibit of Capital Gains (Losses) ) 56,98,7. Net investment gain (loss) (Lines 9 + 0) 09,077,5 OTHER INCOME. Net gain (loss) from agents or premium balances charged off (amount recovered $ amount charged off $ ) 0 0. Finance service charges not included in premiums 75. Aggregate write-ins for miscellaneous income,59,56 5. Total other income (Lines through ),59,07 6. Net income before dividends to policyholders, after capital gains tax before all other federal foreign income taxes (Lines ) 7. Dividends to policyholders 8. Net income, after dividends to policyholders, after capital gains tax before all other federal foreign income taxes (Line 6 minus Line 7) 9. Federal foreign income taxes incurred (,57,7) (,0,866) (,57,7) (,0,866) 0. Net income (Line 8 minus Line 9)(to Line ) (,57,7) (,0,866) CAPITAL AND SURPLUS ACCOUNT. Surplus as regards policyholders, December prior year (Page, Line 9, Column ) 0,98,965 9,,9. Net income (from Line 0) (,57,7) (,0,866). Net transfers (to) from Protected Cell accounts. Change in net unrealized capital gains or (losses) less capital gains tax of $ 5. Change in net unrealized foreign exchange capital gain (loss) 6. Change in net deferred income tax 7. Change in nonadmitted assets (Exhibit of Nonadmitted Assets, Line 8, Col. ) (7,9) (79,68) 8. Change in provision for reinsurance (Page, Line 6, Column minus Column ) Change in surplus notes 0. Surplus (contributed to) withdrawn from protected cells. Cumulative effect of changes in accounting principles. Capital changes:. Paid in,5,05. Transferred from surplus (Stock Dividend). Transferred to surplus. Surplus adjustments:. Paid in 0,875,000. Transferred to capital (Stock Dividend). Transferred from capital. Net remittances from or (to) Home Office 5. Dividends to stockholders 6. Change in treasury stock (Page, Lines 6. 6., Column minus Column ) Aggregate write-ins for gains losses in surplus 0 9,56 8. Change in surplus as regards policyholders for the year (Lines through 7) (,8,66),85,0 9. Surplus as regards policyholders, December current year (Line plus Line 8) (Page, Line 7) 7,09,0 0,98, 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) Other Income,59, Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above),59, PRIOR YEAR ADJUSTMENTS 9, Summary of remaining write-ins for Line 7 from overflow page Totals (Lines 70 thru 70 plus 798)(Line 7 above) 0 9,56

5 ANNUAL STATEMENT FOR THE YEAR 06 OF THE One Alliance Insurance Corporation CASH FLOW Current Year Prior Year Cash from Operations. Premiums collected net of reinsurance,08, 579,0. Net investment income 0,0 66,8. Miscellaneous income,59,07. Total (Lines through ),59, ,55 5. Benefit loss related payments 89, 5, Net transfers to Separate Accounts, Segregated Accounts Protected Cell Accounts Commissions, expenses paid aggregate write-ins for deductions,,87,90,9 8. Dividends paid to policyholders Federal foreign income taxes paid (recovered) net of $ tax on capital gains (losses) Total (Lines 5 through 9),5,060,5,7. Net cash from operations (Line minus Line 0) (,99,075) (,85,86) Cash from Investments. Proceeds from investments sold, matured or repaid:. Bonds,98,658,5,57. Stocks 68,0 8,6,6. Mortgage loans 0 0. Real estate Other invested assets Net gains or (losses) on cash, cash equivalents short-term investments Miscellaneous proceeds Total investment proceeds (Lines. to.7) 5,6,68,99,58. Cost of investments acquired (long-term only):. Bonds 5,08,9 6,5,68. Stocks 68,0 8,6,6. Mortgage loans 0 0. Real estate 0 8,98.5 Other invested assets Miscellaneous applications Total investments acquired (Lines. to.6) 5,766, 5,,789. Net increase (decrease) in contract loans premium notes Net cash from investments (Line.8 minus Line.7 minus Line ) (,760) (,8,06) Cash from Financing Miscellaneous Sources 6. Cash provided (applied): 6. Surplus notes, capital notes Capital paid in surplus, less treasury stock 0 5,000,05 6. Borrowed funds,8, Net deposits on deposit-type contracts other insurance liabilities Dividends to stockholders Other cash provided (applied) 58,5 (60,0) 7. Net cash from financing miscellaneous sources (Lines 6. to 6. minus Line 6.5 plus Line 6.6),80,058,89,8 RECONCILIATION OF CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS 8. Net change in cash, cash equivalents short-term investments (Line, plus Lines 5 7) 5, (97,) 9. Cash, cash equivalents short-term investments: 9. Beginning of year 59,57 56,78 9. End of period (Line 8 plus Line 9.),79 59,57 Note: Supplemental disclosures of cash flow information for non-cash transactions: 5

6 ANNUAL STATEMENT FOR THE YEAR 06 OF THE One Alliance Insurance Corporation 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 Premiums Earned During Year (Cols. + - ). Fire 0,05,9 5,95 (9,95). Allied lines 85,06,85 88,0 (7). Farmowners multiple peril Homeowners multiple peril Commercial multiple peril,787,8 5,98,508,95 5,77 6. Mortgage guaranty Ocean marine Inl marine 5,9,79,8,88 0. Financial guaranty Medical professional liability - occurrence Medical professional liability - claims-made Earthquake 6,789,90 7,90 (8,797). Group accident health Credit accident health (group individual) Other accident health Workers' compensation Other liability - occurrence 8,99,89 70,707 8,78 7. Other liability - claims-made Excess workers' compensation Products liability - occurrence 5,688,50 9,08 (,98) 8. Products liability - claims-made , 9. Private passenger auto liability 95,0 9,59 56,605 8,90 9., 9. Commercial auto liability 76,90,5 9,75,60. Auto physical damage 5,76 5,09 59,05 8,690. Aircraft (all perils) Fidelity Surety Burglary theft Boiler machinery Credit International Warranty Reinsurance - nonproportional assumed property Reinsurance - nonproportional assumed liability Reinsurance - nonproportional assumed financial lines Aggregate write-ins for other lines of business TOTALS,89,907 0,89,6,96 859, DETAILS OF WRITE-INS 98. Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above)

7 ANNUAL STATEMENT FOR THE YEAR 06 OF THE One Alliance Insurance Corporation 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 Reserve for Rate Credits Retrospective Adjustments Based on Experience 5 Total Reserve for Unearned Premiums Cols Fire 5,95 5,95. Allied lines 88,0 88,0. Farmowners multiple peril 0. Homeowners multiple peril 0 5. Commercial multiple peril,508,95,508,95 6. Mortgage guaranty 0 8. Ocean marine 0 9. Inl marine,8,8 0. Financial guaranty 0. Medical professional liability - occurrence 0. Medical professional liability - claims-made 0. Earthquake 7,90 7,90. Group accident health 0. Credit accident health (group individual) 0 5. Other accident health 0 6. Workers' compensation 0 7. Other liability - occurrence 70,707 70, Other liability - claims-made 0 7. Excess workers' compensation 0 8. Products liability - occurrence 9,08 9,08 8. Products liability - claims-made 0 9., 9. Private passenger auto liability 56,605 56,605 9., 9. Commercial auto liability 9,75 9,75. Auto physical damage 59,05 59,05. Aircraft (all perils) 0. Fidelity 0. Surety 0 6. Burglary theft 0 7. Boiler machinery 0 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. Aggregate write-ins for other lines of business TOTALS,6, ,6,96 6. Accrued retrospective premiums based on experience 7. Earned but unbilled premiums 8. Balance (Sum of Line 5 through 7),6, DETAILS OF WRITE-INS 98. Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above) (a) State here basis of computation used in each case 7

8 ANNUAL STATEMENT FOR THE YEAR 06 OF THE One Alliance Insurance Corporation UNDERWRITING AND INVESTMENT EXHIBIT PART B - PREMIUMS WRITTEN Line of Business Reinsurance Reinsurance 6 5 Net Premiums Written Business (a) From Affiliates From Non-Affiliates To Affiliates To Non-Affiliates Cols Fire 06,07 95,995 0,05. Allied lines 9,557 09,95 85,06. Farmowners multiple peril 0 0. Homeowners multiple peril Commercial multiple peril,7,6,60,6,787,8 6. Mortgage guaranty Ocean marine Inl marine 5,7 0,0 5,9 0. Financial guaranty 0 0. Medical professional liability - occurrence 0. Medical professional liability - claims-made 0. Earthquake 79,5 6,66 6,789. Group accident health 0 0. Credit accident health (group individual) Other accident health Workers' compensation Other liability - occurrence 9,0 7,05 8,99 7. Other liability - claims-made Excess workers' compensation Products liability - occurrence 05,0 99,56 5, Products liability - claims-made 0 9., 9. Private passenger auto liability,0 7,899 95,0 9., 9. Commercial auto liability 0,6 5, 76,90. Auto physical damage 59,6 55,90 5,76. Aircraft (all perils) 0 0. Fidelity 0 0. Surety Burglary theft Boiler machinery Credit International 0 0. Warranty 0 0. Reinsurance - nonproportional assumed property XXX 0. Reinsurance - nonproportional assumed liability XXX 0. Reinsurance - nonproportional assumed financial lines XXX 0. Aggregate write-ins for other lines of business TOTALS 5,95, ,60,775,89, DETAILS OF WRITE-INS 98. Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above) (a) Does the company's direct premiums written include premiums recorded on an installment basis? Yes [ ] No [ ] 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 ANNUAL STATEMENT FOR THE YEAR 06 OF THE One Alliance Insurance Corporation 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., Part ) Reinsurance Reinsurance Net Payments Net Losses Unpaid Line of Business Business Recovered (Cols. + - ) Prior Year. Fire (6) 0.5. Allied lines,675,675 7, ,65 (,0.). Farmowners multiple peril Homeowners multiple peril Commercial multiple peril 97,5 5,999 7,5 7,8 5, 08, Mortgage guaranty Ocean marine Inl marine 5 5,7, Financial guaranty Medical professional liability - occurrence Medical professional liability - claims-made Earthquake (59) 0.7. Group accident health Credit accident health (group individual) Other accident health Workers' compensation Other liability - occurrence, 7, 7, 67,8,58 6,.7 7. Other liability - claims-made 0 0 (,60) (,60) Excess workers' compensation Products liability - occurrence 0,65 5,60 (.8) 8. Products liability - claims-made , 9. Private passenger auto liability 8,97,98,99 6,76,8 8, , 9. Commercial auto liability 8, 9, 9,0 8,757 5,89, Auto physical damage 05,7 5,856 5,856 7,5 8,08 9, Aircraft (all perils) Fidelity Surety Burglary theft Boiler machinery Credit International Warranty Reinsurance - nonproportional assumed property XXX Reinsurance - nonproportional assumed liability XXX Reinsurance - nonproportional assumed financial lines XXX Aggregate write-ins for other lines of business TOTALS 87,9 0 9,95 67,95 0,895 6,7 5,07 6. DETAILS OF WRITE-INS Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above)

10 0 ANNUAL STATEMENT FOR THE YEAR 06 OF THE One Alliance Insurance Corporation 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 (Cols ). Fire 0 8,70 8, Allied lines 7,050 7,050,88,79 7,059. Farmowners multiple peril 0 0. Homeowners multiple peril Commercial multiple peril,5 5,07 69,008 68,0 6,99 7,8 6, Mortgage guaranty Ocean marine Inl marine 0 7,77 6,60,7 0. Financial guaranty 0 0. Medical professional liability - occurrence 0 0. Medical professional liability - claims-made 0 0. Earthquake 0,66, Group accident health 0 (a) 0. Credit accident health (group individual) Other accident health 0 (a) 0 6. Workers' compensation Other liability - occurrence ,78 5,86 67,8 7. Other liability - claims-made 0,60 (,60) 7. Excess workers' compensation Products liability - occurrence 0,65,65 8. Products liability - claims-made , 9. Private passenger auto liability 8,000,000,000 8,6 (,65) 6, , 9. Commercial auto liability 6,000,000,000 9,68,9 8, Auto physical damage,50,65,65,90 9, 7,5,8. Aircraft (all perils) 0 0. Fidelity 0 0. Surety Burglary theft Boiler machinery Credit International Warranty 0 0. Reinsurance - nonproportional assumed property XXX 0 XXX 0. Reinsurance - nonproportional assumed liability XXX 0 XXX 0. Reinsurance - nonproportional assumed financial lines XXX 0 XXX 0. Aggregate write-ins for other lines of business TOTALS 86,05 0 8,08 0,9 95, ,05 0,895 8,98 DETAILS OF WRITE-INS Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above) (a) Including $ for present value of life indemnity claims.

11 ANNUAL STATEMENT FOR THE YEAR 06 OF THE One Alliance Insurance Corporation UNDERWRITING AND INVESTMENT EXHIBIT PART - EXPENSES. Claim adjustment services: Loss Adjustment Expenses Other Underwriting Expenses Investment Expenses.,9,9. Reinsurance assumed 0. Reinsurance ceded 5,68 5,68. Net claim adjustment service ( ) 7, ,6. Commission brokerage:. excluding contingent,0,7,0,7. Reinsurance assumed, excluding contingent 0. Reinsurance ceded, excluding contingent 69,08 69,08. Contingent - direct 0.5 Contingent - reinsurance assumed 0.6 Contingent - reinsurance ceded 0.7 Policy membership fees 0.8 Net commission brokerage ( ) 0,00,909 0,00,909. Allowances to managers agents 0. Advertising 7, 7, 5. Boards, bureaus associations 77,0 77,0 6. Surveys underwriting reports 0 7. Audit of assureds records 0 8. Salary related items: 8. Salaries 97,7 97,7 8. Payroll taxes 55,806 55, Employee relations welfare 75,0 75,0 0. Insurance 5,8 5,8. ors fees 0. Travel travel items 7,956 7,956. Rent rent items 7,9 7,9. Equipment 60,60 60,60 5. Cost or depreciation of EDP equipment software,975, Printing stationery,860, Postage, telephone telegraph, exchange express 57, 57, 8. Legal auditing 0,950 0, Totals (Lines to 8) 0,758,56 0,758,56 0. Taxes, licenses fees: 0. State local insurance taxes deducting guaranty association credits of $ 56,78 56,78 0. Insurance department licenses fees 5,000 5, Gross guaranty association assessments 0 0. All other (excluding federal foreign income real estate) Total taxes, licenses fees ( ) 0 6,78 0 6,78. Real estate expenses 08,97 08,97. Real estate taxes 9,78 9,78. Reimbursements by uninsured plans 0. Aggregate write-ins for miscellaneous expenses 0 8,90,878 8,88 5. Total expenses incurred 7,6,090,88,878 (a),,70 6. Less unpaid expenses - current year 8,98 95,050 50,0 7. Add unpaid expenses - prior year,59 67, 7,85 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 ),0,86,07,878,879,7 DETAILS OF WRITE-INS 0. Miscellaneous Expenses 8,90,878 8, Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above) 0 8,90,878 8,88 (a) Includes management fees of $ to affiliates $ to non-affiliates. Total

12 ANNUAL STATEMENT FOR THE YEAR 06 OF THE One Alliance Insurance Corporation EXHIBIT OF NET INVESTMENT INCOME Collected During Year Earned During Year. U.S. Government bonds (a),9 9,8. Bonds exempt from U.S. tax (a) 70,688,7. Other bonds (unaffiliated) (a) 0,5 0,69. Bonds of affiliates (a). Preferred stocks (unaffiliated) (b). Preferred stocks of affiliates (b). Common stocks (unaffiliated). Common stocks of affiliates. Mortgage loans (c). Real estate (d) 5 Contract loans 6 Cash, cash equivalents short-term investments (e) 7 Derivative instruments (f) 8. Other invested assets 9. Aggregate write-ins for investment income Total gross investment income 9,950 55,757. Investment expenses (g),878. Investment taxes, licenses fees, excluding federal income taxes (g) 0. Interest expense (h). Depreciation on real estate other invested assets (i) 5. Aggregate write-ins for deductions from investment income 0 6. Total deductions (Lines through 5), Net investment income (Line 0 minus Line 6) 5,879 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) Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 thru 50 plus 598) (Line 5, above) 0 (a) Includes $ 8,8 accrual of discount less $ 7,56 amortization of premium less $,69 paid for accrued interest on purchases. (b) Includes $ accrual of discount less $ amortization of premium less $ paid for accrued dividends on purchases. (c) Includes $ accrual of discount less $ amortization of premium less $ paid for accrued interest on purchases. (d) Includes $ for company s occupancy of its own buildings; excludes $ interest on encumbrances. (e) Includes $ accrual of discount less $ amortization of premium less $ paid for accrued interest on purchases. (f) Includes $ accrual of discount less $ amortization of premium. (g) Includes $ investment expenses $ investment taxes, licenses fees, excluding federal income taxes, attributable to segregated Separate Accounts. (h) Includes $ interest on surplus notes $ interest on capital notes. (i) Includes $ depreciation on real estate $ depreciation on other invested assets. EXHIBIT OF CAPITAL GAINS (LOSSES) 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 Bonds exempt from U.S. tax 0. Other bonds (unaffiliated) 56, , Bonds of affiliates Preferred stocks (unaffiliated) Preferred stocks of affiliates Common stocks (unaffiliated) Common stocks of affiliates Mortgage loans Real estate Contract loans 0 6. Cash, cash equivalents short-term investments 0 7. Derivative instruments 0 8. Other invested assets Aggregate write-ins for capital gains (losses) Total capital gains (losses) 56, , 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 ANNUAL STATEMENT FOR THE YEAR 06 OF THE One Alliance Insurance Corporation 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. Real estate (Schedule A):. Properties occupied by the company 0. Properties held for the production of income 0. Properties held for sale 0 5. Cash (Schedule E - Part ), cash equivalents (Schedule E - Part ) short-term investments (Schedule DA) 0 6. Contract loans 0 7. Derivatives (Schedule DB) 0 8. Other invested assets (Schedule BA) 0 9. Receivables for securities 0 0. Securities lending reinvested collateral assets (Schedule DL) 0. Aggregate write-ins for invested assets Subtotals, cash invested assets (Lines to ) Title plants (for Title insurers only) 0. Investment income due accrued 0 5. Premiums considerations: 5. Uncollected premiums agents' balances in the course of collection 7,0 9,76 (7,69) 5. Deferred premiums, agents' balances installments booked but deferred not yet due 0 5. Accrued retrospective premiums 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 foreign income tax recoverable interest thereon 0 8. Net deferred tax asset 0 9. Guaranty funds receivable or on deposit 0 0. Electronic data processing equipment software 0. Furniture equipment, including health care delivery assets,97 6,565 9,68. Net adjustment in assets liabilities due to foreign exchange rates 0. Receivables from parent, subsidiaries affiliates 50,000 78,77 8,77. Health care other amounts receivable 0 5. Aggregate write-ins for other than invested assets 70,7 97,8 (,60) 6. Total assets excluding Separate Accounts, Segregated Accounts Protected Cell Accounts (Lines to 5),,099,068,907 (7,9) 7. From Separate Accounts, Segregated Accounts Protected Cell Accounts 0 8. Total (Lines 6 7),,099,068,907 (7,9) DETAILS OF WRITE-INS 98. Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above) PREPAID ITEMS,98 5,85,7 50. OTHER RECEIVABLES 707,97 8,007 (5,967) Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 thru 50 plus 598)(Line 5 above) 70,7 97,8 (,60)

14 NOTES TO FINANCIAL STATEMENTS Note - Summary of Significant Accounting Policies A. Accounting Practices, Impact of NAIC/State Differences The accompanying financial statements of One Alliance Insurance Corporation (OAIC or the Company) have been prepared on the basis of accounting practices prescribed or permitted by the Commissioner of Insurance of the Commonwealth of Puerto Rico (the Commissioner of Insurance). The Commissioner of requires insurance companies domiciled in the Commonwealth of Puerto Rico to prepare their statutory financial statements in accordance with the National Association of Insurance Commissioners' (NAIC) Accounting Practices Procedures Manual subject to any deviations prescribed or permitted by the Commissioner of Insurance. The Commissioner has adopted certain prescribed accounting practices that differ from those found in NAIC SAP. One such difference relates to the treatment of certain deferred tax items. The Commissioner prescribed the recognition of the deferred tax liability resulting from the contributions made over the years to the catastrophic reserve fund that would otherwise have resulted under NAIC SAP. The Company segregate as special surplus fund the amount of $, for the Puerto Rico a catastrophic reserve. Section 59 of the Puerto Rico Insurance code permits new domestic insurers during the first five natural years of its operations maintain unearned premiums reserves in the following proportion of otherwise required reserves: st year 50%, nd year 60%, rd year 70%, th year 80%, 5th year 90%. Accordingly, OAIC booked $0.00 related to the section 59 adjustment during the year. Reconciliations of net income policyholders surplus between the amounts reported in the accompanying financial statements (PR basis) NAIC SAP are as follows: Description State //06 //05 () Net income, state basis PR ($,57,7) ($,0,866) () Effect of state prescribed practices () Effect of state permitted practices Unearned Adjustment pursuant section 5.9 PR () Net income, NAIC SAP basis ($,57,7) ($,0,866) Description State 06/0/06 //05 (5) Policyholders surplus, state basis PR $7,7,090 $0,9,786 (6) Effect of state prescribed practices PR (,788) (,8) (7) Effect of state permitted practices Unearned Adjustment pursuant section 5.9 PR (8) Policyholders surplus, NAIC SAP basis $7,09,0 $0,98,965 B. Use of Estimates in the Preparation of the Financial Statements The preparation of financial statements in conformity with statutory accounting practices requires management to make estimates assumptions that affect the reported amounts of admitted assets liabilities disclosure of contingent assets liabilities at the date of the statutory-basis financial statements the reported amounts of revenues expenses during the reporting period. Actual results could differ from those estimates. C. Accounting Policies Insurance premiums are earned pro rata over the terms of the related insurance policies. Unearned premiums reserves are established to cover the unexpired portion of premiums written are transferred to premiums revenue as earned. Such reserves are computed by pro rata methods for direct business. In addition, the company uses the following accounting policies:. Short-term investments are stated at amortized value using the interest method. Non-investment grade short-term investments are stated at the lower of amortized value or fair value.

15 NOTES TO FINANCIAL STATEMENTS. Investment grade non-loan-backed bonds with NAIC designations or are stated at amortized value using the interest method. Non-investment grade non-loan-backed bonds with NAIC designations of through 6 are stated at the lower of amortized value or fair value. See paragraph 6 for loan-backed structured securities.. Common stocks are reported at fair value under NAIC guidelines. The change in the fair value along with any adjustment for income taxes is recorded as a change in net unrealized capital gains (losses), a component of unassigned surplus.. Preferred stocks are stated at cost, at the lower of cost or amortized cost, or at market values under NAIC guidelines, depending on the assigned credit rating whether the preferred stock has matory sinking fund provisions. 5. Mortgage Loans - Not Applicable 6. Mortgage-backed Securities - Mortgage-backed securities are valued at amortized cost using the effective interest method including anticipated prepayments. Prepayment assumptions are obtained from dealer surveys or internal estimates are based on the current interest rate economic environment. The retrospective adjustment method is used to value all such securities, except principal-only interest-only securities which are valued using the prospective method. 7. Investment's in subsidiaries, controlled or affiliated companies - Not Applicable 8. Ownership interests in joint ventures, partnerships or limited liability companies - Not Applicable 9. Derivatives - Not Applicable 0. The Company does not anticipate investment income when evaluating the need for premium deficiency reserves.. Unpaid losses loss adjustment expenses include an amount determined from individual case estimates loss reports an amount, based on past experience, for losses incurred but not reported. Such liabilities are necessarily based on assumptions estimates while management believes the amounts are adequate, the ultimate liabilities may be in excess of or less than the amount provided. The methods for making such estimates for establishing the resulting liabilities are continually reviewed any adjustments are reflected in the period determined.. The Company has a written capitalization policy for prepaid expenses purchases of items such as electronic data processing equipment, software, furniture, vehicles, other equipment leasehold improvements. The predefined capitalization thresholds under this policy have not changed from those of the prior year.. Not applicable as the Company does not write major medical insurance with prescription drug coverage. Note - Summary of Significant Accounting Policies Not Applicable Note - Business Combinations Goodwill A. Statutory Purchase Method Not Applicable B. Statutory Mergers Not Applicable C. Write-downs for Impairment of Investments in Affiliates Not Applicable Note - Discontinued Operations Not Applicable Note 5 - Investments Investment income consists primarily of interest dividends. Interest is recognized on the accrual basis dividends are recorded as earned at the dividend date. Accrual of income is suspended for bonds that are in default or when the receipt of interest payments is in doubt. Realized capital gains losses are determined under the specific identification basis are recorded in earnings..

16 NOTES TO FINANCIAL STATEMENTS A. Mortgage Loans Not Applicable B. Troubled Debt Restructuring for Creditors Not applicable C. Reverse Mortgages Not applicable D. Loan-Backed Structured Securities () Prepayment assumptions for single class multi-class mortgage-backed/asset-backed securities were obtained from broker dealer survey values or internal estimates. () No other-than-temporary impairment for loan-backed securities recorded during the year. () The Company does not have any loan backed security that were in a continuous unrealized loss position during the current period. () Not applicable as the Company does not have any loan-backed securities in unrealized loss position at year-end. E. Repurchase Agreements /or Securities Lending Transactions Not applicable F. Write-downs for Impairments of Real Estate, Real Estate Sales, Retail L Sales Operations Real Estate with Participating Mortgage Loan Features Not applicable G. Low Income Housing Tax Credits Not applicable H. Restricted Assets Not applicable I. Working Capital Finance Investments Not applicable J. Offsetting Netting of Assets Liabilities Not applicable K. Structured Notes Not applicable Note 6 - Joint Ventures, Partnerships Limited Liability Companies A. Detail for Those Greater than 0% of Admitted Assets Not applicable B. Write-downs for Impairment of Joint Ventures, Partnerships LLCs Not applicable Note 7 - Investment Income A. Accrued Investment Income The Company includes all of its investment income due accrued in the financial statements..

17 NOTES TO FINANCIAL STATEMENTS B. Amounts Nonadmitted Not applicable Note 8 - Derivative Instruments Not applicable Note 9 - Income Taxes Insurance companies are taxed based on statutory income in Puerto Rico. Also, income from operations is subject to an alternative minimum income tax that is calculated based on a formula established by existing tax laws. Income before income taxes differs from taxable income principally due to tax-exempt investment income. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets liabilities for financial reporting purposes the amounts used for income tax purposes. In assessing the reliability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryforward periods), projected future taxable income tax planning strategies in making this assessment. Based upon the level of historical taxable income projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely-than-not that the Company will realize the benefits of these deductible differences. SSAP No. 0R allows companies to admit deferred tax assets up to the amount that they are expected to be realized within up to three years of balance sheet date or 0% or 5% of adjusted capital surplus, if certain risk-based-capital ("RBC") ratio requirements are met. During 0, the Company met the established RBC requirements that allowed it to admit those deferred tax assets that are expected to be realized within three years of the balance sheet date. A. Deferred Tax Asset/(Liability) Not Applicable B. Deferred Tax Liabilities Not Recognized Not applicable C. Current Deferred Income Taxes Not Applicable D. Reconciliation of Federal Income Tax Rate to Actual Effective Rate Not Applicable E. Operating Loss Tax Credit Carryforwards Protective Tax Deposits Not Applicable F. Consolidated Federal Income Tax Return Not Applicable G. Federal or Foreign Federal Income Tax Loss Contingencies The Company does not have any tax loss contingencies for which it is reasonably possible that the total liability will significantly increase within twelve months of the reporting date. Note 0 - Information Concerning Parent, Subsidiaries, Affiliates Other Related Parties A. Nature of Relationships Not Applicable.

18 NOTES TO FINANCIAL STATEMENTS B. Detail of Transactions Greater than ½% of Admitted Assets Not Applicable C. Change in Terms of Intercompany Arrangements The terms of intercompany management service arrangements were not changed during the year. D. Amounts Due to or from Related Parties Due from related Parties $0,80.00 E. Guarantees or Undertakings for Related Parties Not applicable F. Management, Service Contracts, Cost Sharing Arrangements Not Applicable G. Nature of Relationships that Could Affect Operations All outsting shares of the Company are owned by Parent. H. Amount Deducted for Investment in Upstream Company Not applicable I. Detail of Investments in Affiliates Greater than 0% of Admitted Assets Not applicable J. Write-downs for Impairment of Investments in Affiliates Not applicable K. Downstream Holding Company Valued Using Look-Through Method Note - Debt Not applicable Not applicable Note - Retirement Plans, Deferred Compensation, Postemployment Benefits Compensated Absences Other Postretirement Benefit Plans Not applicable Note - Capital Surplus, Dividend Restrictions Quasi-Reorganizations () Outsting Shares The Company has,000,000 authorized shares of $5 par value common stock authorized,875,005 shares issued outsting. The Company has no preferred stock authorized, issued or outsting. () Dividend Rate of Preferred Stock Not applicable () Dividend Restrictions Stockholder dividends are accrued charged to unassigned funds based on the declaration date as approved by the Board of ors of the Company. Under the insurance regulations of Puerto Rico, the maximum amount of ordinary dividends that the Company may pay to shareholders without approval of the Commissioner of Insurance is restricted to statutory surplus limitations..

19 NOTES TO FINANCIAL STATEMENTS () Dates Amounts of Dividends Paid No shareholders' dividends were declared paid during the current year or the prior year. (5) Amount of Ordinary Dividends That May Be Paid Other than the limitations described above in paragraph, there are no other limitations on the amount of ordinary dividends that may be paid other than the general restriction under the insurance regulations of Puerto Rico that no dividend (ordinary or extraordinary) may be declared or paid from any source other than unassigned funds without approval of the Commissioner of Insurance of Puerto Rico. (6) Restrictions on Unassigned Funds There are no restrictions on the unassigned funds of the Company other than those described above in paragraphs 5 these unassigned funds are held for the benefit of the owner policyholders. (7) Mutual Surplus Advances Not applicable (8) Company Stock Held for Special Purposes Not applicable (9) Changes in Special Surplus Funds Not applicable Change in Unassigned Funds Not applicable (0) Surplus Notes Not applicable ( Impact Dates of Quasi Reorganizations Not applicable Note Liabilities, Contingencies Assessments A. Contingent Commitments Pursuant to Chapter 5 of Puerto Rico Insurance Code, the Company is required to create a trust fund exclusively to pay catastrophe losses covered under property other certain policies written in Puerto Rico. On 05 OAIC, established the catastrophic reserve in the amount of $, Also, pursuant to Chapter of the Puerto Rico Insurance Code Rule No. 56 of the insurance regulations of the Commonwealth of Puerto Rico, property liability insurance companies are members of the Sindicato de Aseguradores para la Suscripción Conjunta de Seguros de Responsabilidad de Profesional Médico-Hospitalaria "SIMED". This syndicate was created for the purpose of underwriting medical-hospital professional liability insurance. As a member, the Company shares risks with other member companies, accordingly, is contingently liable in the event that this syndicate cannot meet its obligations. B. Assessments Not applicable C. Gain Contingencies Not applicable D. Extra Contractual Obligation Bad Faith Losses Not applicable E. Product Warranties Not applicable.5

20 NOTES TO FINANCIAL STATEMENTS F. Joint Several Liabilities Not applicable G. Other Contingencies Lawsuits arise against the Company in the normal course of business. Contingent liabilities arising from litigation, income taxes other matters are not considered material in relation to the financial position of the Company. Note 5 - Leases A. Lessee Leasing Arrangements Not Applicable B. Lessor Leasing Arrangements Not Applicable Note 6 - Information about Financial Instruments with Off-Balance Sheet Risk Not Applicable Note 7 - Sale, Transfer Servicing of Financial Assets Extinguishments of Liabilities A. Transfers of Receivables Reported as Sales Not applicable B. Transfers Servicing of Financial Assets Not applicable C. Wash Sales Not applicable Note 8 - Gain or Loss from Uninsured Plans Uninsured Portion of Partially Insured Plans A. Administrative Services Only (ASO) Plans Not applicable B. Administrative Services Contract (ASC) Plans Not applicable C. Medicare or Other Similarly Structured Cost Based Reimbursement Contracts Not applicable Note 9 - Premium Written / Produced by Managing General Agents / Third Party Administrators The Company uses general agencies to write administer all property casualty lines of business. The General Agency Contract give the agency authority issue collected the premiums under these agreements. Note 0 Fair Value Measurements A. Inputs Used for Assets Liabilities Measured Reported at Fair Value () Items Measured Reported at Fair Value by Levels, The Company has categorized its assets liabilities that are reported on the balance sheet at fair value into the three-level fair value hierarchy as reflected in the table below. The three-level fair value hierarchy is based on the degree of subjectivity inherent in the valuation method by which fair value was determined..6