To accurately reflect adjustments made for deferred income tax pursuant to SSAP 101, additional quota share reinsurance recoverable and capital

Transcription

1 To accurately reflect adjustments made for deferred income tax pursuant to SSAP 0, additional quota share reinsurance recoverable and capital received.

2 * * PROPERTY AND CASUALTY COMPANIES ASSOCIATION EDITION ANNUAL STATEMENT For the Year Ended December, 0 OF THE CONDITION AND AFFAIRS OF THE NARRAGANSETT BAY INSURANCE COMPANY NAIC Group Code 0497, 0497 NAIC Company Code 400 Employer s ID Number (Current Period) (Prior Period) Organized under the Laws of Rhode Island, State of Domicile or Port of Entry Rhode Island Country of Domicile United States Incorporated/Organized 06/0/98 Commenced Business 04/0/98 Statutory Home Office 5 Maple Street, Pawtucket, RI, (Street and Number) (City or Town, State, Country and Zip Code) Main Administrative Office 5 Maple Street Pawtucket, RI, (Street and Number) (City or Town, State, Country and Zip Code) (Area Code) (Telephone Number) Mail Address P. O. Box 80, Pawtucket, RI, (Street and Number or P.O. Box) (City or Town, State, Country and Zip Code) Primary Location of Books and Records 5 Maple Street Pawtucket, RI, (Street and Number) (City or Town, State, Country and Zip Code) (Area Code) (Telephone Number) Internet Web Site Address Statutory Statement Contact Laura Leigh Colangelo (Name) (Area Code) (Telephone Number) (Extension) NBIC-ComplianceInbox@nbic.com ( Address) (Fax Number) OFFICERS Name Title Name Title Todd Christopher Hart #, Chief Executive Officer Stewart Horner Steffey Jr., Founder & Executive Chairman Sean Fitzgerald Murphy, Treasurer Stephen Donald Zubiago, Secretary OTHER OFFICERS,, DIRECTORS OR TRUSTEES Stewart Horner Steffey Jr. Arnold Larry Chavkin Alex Anatol Fridlyand Srdjan Vukovic Robert Emil Glanville Todd Christopher Hart # Dale Stephen Hammond # State of County of RHODE ISLAND PROVIDENCE ss The officers of this reporting entity, being duly sworn, each depose and say that they are the described officers of said reporting entity, and that on the reporting period stated above, all of the herein described assets were the absolute property of the said reporting entity, free and clear from any liens or claims thereon, except as herein stated, and that this statement, together with related exhibits, schedules and explanations therein contained, annexed or referred to, is a full and true statement of all the assets and liabilities and of the condition and affairs of the said reporting entity as of the reporting period stated above, and of its income and deductions therefrom for the period ended, and have been completed in accordance with the NAIC Annual Statement Instructions and Accounting Practices and Procedures manual except to the extent that: () state law may differ; or, () that state rules or regulations require differences in reporting not related to accounting practices and procedures, according to the best of their information, knowledge and belief, respectively. Furthermore, the scope of this attestation by the described officers also includes the related corresponding electronic filing with the NAIC, when required, that is an exact copy (except for formatting differences due to electronic filing) of the enclosed statement. The electronic filing may be requested by various regulators in lieu of or in addition to the enclosed statement. Todd Christopher Hart Chief Executive Officer Stephen Donald Zubiago Secretary a. Is this an original filing? Yes [ ] No [ X ] Subscribed and sworn to before me b. If no: this day of,. State the amendment number. Date filed. Number of pages attached

3 ANNUAL STATEMENT FOR THE YEAR 0 OF THE NARRAGANSETT BAY INSURANCE COMPANY ASSETS Current Year Prior Year 4 Assets Nonadmitted Assets Net Admitted Assets (Cols. - ) Net Admitted Assets. Bonds (Schedule D) 7,768, ,768,046 60,604,5. Stocks (Schedule D):. Preferred stocks Common stocks 0, ,046 0,57. Mortgage loans on real estate (Schedule B):. First liens Other than first liens Real estate (Schedule A): 4. Properties occupied by the company (less $ encumbrances) Properties held for the production of income (less $ encumbrances) Properties held for sale (less $ encumbrances) Cash ($ 6,5,69, Schedule E-Part ), cash equivalents ($ 0, Schedule E-Part ) and short-term investments ($ 6,77,69, Schedule DA),97,84 0,97,84 9,58, Contract loans (including $ premium notes) Derivatives (Schedule DB) Other invested assets (Schedule BA) Receivables for securities Securities lending reinvested collateral assets (Schedule DL) Aggregate write-ins for invested assets Subtotals, cash and invested assets (Lines to ) 87,67, ,67,475 90,5,9. Title plants less $ charged off (for Title insurers only) Investment income due and accrued 5,48 0 5,48 447,46 5. Premiums and considerations: 5. Uncollected premiums and agents balances in the course of collection,45,46 69,094,66,,86,86 5. Deferred premiums, agents balances and installments booked but deferred and not yet due (including $ earned but unbilled premiums) 4,080,07 0 4,080,07 0,407,9 5. Accrued retrospective premiums Reinsurance: 6. Amounts recoverable from reinsurers 9,655, ,655,687 0,85 6. 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 8,,70 5,5,957,997,4,570, Guaranty funds receivable or on deposit Electronic data processing equipment and software 6,99 0 6,99 7,78. 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 8,48,5,08,70 7,7,605,4,55 4. Health care ($ ) and other amounts receivable Aggregate write-ins for other than invested assets,556, Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines to 5) 4,987,566 6,906,7 5,08,9 8,97, 7. From Separate Accounts, Segregated Accounts and Protected Cell Accounts Total (Lines 6 and 7) 4,987,566 6,906,7 5,08,9 8,97, DETAILS OF WRITE-INS Summary of remaining write-ins for Line from overflow page Totals (Lines 0 through 0 plus 98) (Line above) PREPAID OUTSIDE SERVICE COSTS,556, Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 through 50 plus 598) (Line 5 above),556,

4 ANNUAL STATEMENT FOR THE YEAR 0 OF THE NARRAGANSETT BAY INSURANCE COMPANY LIABILITIES, SURPLUS AND OTHER FUNDS Current Year Prior Year. Losses (Part A, Line 5, Column 8) 7,76,0 7,409,975. Reinsurance payable on paid losses and loss adjustment expenses (Schedule F, Part, Column 6) 0. Loss adjustment expenses (Part A, Line 5, Column 9),789,6,56, Commissions payable, contingent commissions and other similar charges,94,665 5,869,68 5. Other expenses (excluding taxes, licenses and fees) 96,64 465,89 6. Taxes, licenses and fees (excluding federal and foreign income taxes),067,04 667,55 7. Current federal and foreign income taxes (including $ on realized capital gains (losses)) Net deferred tax liability Borrowed money $ and interest thereon $ Unearned premiums (Part A, Line 8, Column 5) (after deducting unearned premiums for ceded reinsurance of $ 54,76,76 and including warranty reserves of $ and accrued accident and health experience rating refunds including $ for medical loss ratio rebate per the Public Health Service Act) 4,860,68 4,87, Advance premium,840,77,984,407. Dividends declared and unpaid:. Stockholders 0 0. Policyholders 0 0. Ceded reinsurance premiums payable (net of ceding commissions),46,9,90,6. Funds held by company under reinsurance treaties (Schedule F, Part, Column 9) 6,56, Amounts withheld or retained by company for account of others Remittances and items not allocated,704,64 6. Provision for reinsurance (including $ certified) (Schedule F, Part 8) Net adjustments in assets and liabilities due to foreign exchange rates Drafts outstanding Payable to parent, subsidiaries and affiliates Derivatives 0 0. Payable for securities 0 0. Payable for securities lending 0 0. Liability for amounts held under uninsured plans Capital notes $ and interest thereon $ Aggregate write-ins for liabilities Total liabilities excluding protected cell liabilities (Lines through 5) 9,09,68 74,97,74 7. Protected cell liabilities 0 8. Total liabilities (Lines 6 and 7) 9,09,68 74,97,74 9. Aggregate write-ins for special surplus funds Common capital stock 4,000,000 4,000,000. Preferred capital stock 0 0. Aggregate write-ins for other than special surplus funds 0 0. Surplus notes Gross paid in and contributed surplus 8,007,995 69,507, Unassigned funds (surplus) 6. Less treasury stock, at cost: (54,06,449) (9,45,67) 6. shares common (value included in Line 0 $ ) 0 6. shares preferred (value included in Line $ ) 0 7. Surplus as regards policyholders (Lines 9 to 5, less 6) (Page 4, Line 9),97,546 44,054,78 8. Totals (Page, Line 8, Col. ) 5,08,9 8,97,0 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 through 50 plus 598) (Line 5 above) Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 90 through 90 plus 998) (Line 9 above) Summary of remaining write-ins for Line from overflow page Totals (Lines 0 through 0 plus 98) (Line above) 0 0

5 ANNUAL STATEMENT FOR THE YEAR 0 OF THE NARRAGANSETT BAY INSURANCE COMPANY STATEMENT OF INCOME Current Year Prior Year UNDERWRITING INCOME. Premiums earned (Part, Line 5, Column 4) 58,06,584 59,804,8 DEDUCTIONS:. Losses incurred (Part, Line 5, Column 7) 44,75,59,640,80. Loss adjustment expenses incurred (Part, Line 5, Column ),6,5 6,0, Other underwriting expenses incurred (Part, Line 5, Column ) 7,0,640,765,5 5. Aggregate write-ins for underwriting deductions Total underwriting deductions (Lines through 5) 84,54,5 70,507,50 7. Net income of protected cells 0 8. Net underwriting gain (loss) (Line minus Line 6 plus Line 7) (6,56,568) (0,70,868) INVESTMENT INCOME 9. Net investment income earned (Exhibit of Net Investment Income, Line 7),865,86,54,75 0. Net realized capital gains (losses) less capital gains tax of $ (Exhibit of Capital Gains (Losses)) 74, 84,8. Net investment gain (loss) (Lines 9 + 0),40,048,66,558 OTHER INCOME. Net gain (loss) from agents' or premium balances charged off (amount recovered $ amount charged off $ ) (,799) (,877). Finance and service charges not included in premiums 900,6 60, Aggregate write-ins for miscellaneous income Total other income (Lines through 4) 896,564 96, Net income before dividends to policyholders, after capital gains tax and before all other federal and foreign income taxes (Lines ) (,489,956) (8,779,60) 7. Dividends to policyholders Net income, after dividends to policyholders, after capital gains tax and before all other federal and foreign income taxes (Line 6 minus Line 7) (,489,956) (8,779,60) 9. Federal and foreign income taxes incurred Net income (Line 8 minus Line 9) (to Line ) (,489,956) (8,779,60) CAPITAL AND SURPLUS ACCOUNT. Surplus as regards policyholders, December prior year (Page 4, Line 9, Column ) 44,054,8,50,8. Net income (from Line 0) (,489,956) (8,779,60). Net transfers (to) from Protected Cell accounts 0 4. Change in net unrealized capital gains or (losses) less capital gains tax of $ 0 5. Change in net unrealized foreign exchange capital gain (loss) 0 6. Change in net deferred income tax 8,,485,040,49 7. Change in nonadmitted assets (Exhibit of Nonadmitted Assets, Line 8, Col. ) (9,4,6) (,557,059) 8. Change in provision for reinsurance (Page, Line 6, Column minus Column ) Change in surplus notes 0 0. Surplus (contributed to) withdrawn from protected cells 0. Cumulative effect of changes in accounting principles 0. Capital changes:. Paid in 0. Transferred from surplus (Stock Dividend) 0. Transferred to surplus 0. Surplus adjustments:. Paid in,500,000,000,000. Transferred to capital (Stock Dividend) 0. Transferred from capital 0 4. Net remittances from or (to) Home Office 0 5. Dividends to stockholders 0 6. Change in treasury stock (Page, Lines 6. and 6., Column minus Column ) Aggregate write-ins for gains and losses in surplus Change in surplus as regards policyholders for the year (Lines through 7) (,08,8),70, Surplus as regards policyholders, December current year (Line plus Line 8) (Page, Line 7),97,550 44,054,8 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 050 through 050 plus 0598) (Line 5 above) Summary of remaining write-ins for Line 4 from overflow page Totals (Lines 40 through 40 plus 498) (Line 4 above) Summary of remaining write-ins for Line 7 from overflow page Totals (Lines 70 through 70 plus 798) (Line 7 above) 0 0 4

6 ANNUAL STATEMENT FOR THE YEAR 0 OF THE NARRAGANSETT BAY INSURANCE COMPANY CASH FLOW Current Year Prior Year Cash from Operations. Premiums collected net of reinsurance 65,64,4 78,0,6. Net investment income,44,806,754,059. Miscellaneous income 896,564 96, Total (Lines through ) 68,78,7 80,54,00 5. Benefit and loss related payments 5,658,964 7,06, Net transfers to Separate Accounts, Segregated Accounts and Protected Cell Accounts Commissions, expenses paid and aggregate write-ins for deductions 7,75,49 5,,00 8. Dividends paid to policyholders Federal and foreign income taxes paid (recovered) net of $ tax on capital gains (losses) Total (Lines 5 through 9) 9,94, 6,69,908. Net cash from operations (Line 4 minus Line 0) (,6,500) 7,74,0 Cash from Investments. Proceeds from investments sold, matured or repaid:. Bonds,40,884 4,997,077. Stocks 0,9 87. Mortgage loans Real estate Other invested assets Net gains or (losses) on cash, cash equivalents and short-term investments Miscellaneous proceeds Total investment proceeds (Lines. to.7),505,49 4,997,666. Cost of investments acquired (long-term only):. Bonds 5,757,97 0,07,854. Stocks 0,08 4. Mortgage loans Real estate Other invested assets Miscellaneous applications 0.7 Total investments acquired (Lines. to.6) 5,859,480 0,07, Net increase (decrease) in contract loans and premium notes Net cash from investments (Line.8 minus Line.7 minus Line 4) (,54,04) (5,0,9) Cash from Financing and Miscellaneous Sources 6. Cash provided (applied): 6. Surplus notes, capital notes Capital and paid in surplus, less treasury stock,500,000,000, Borrowed funds Net deposits on deposit-type contracts and other insurance liabilities Dividends to stockholders Other cash provided (applied) 6,44,48 86,0 7. Net cash from financing and miscellaneous sources (Lines 6. to 6.4 minus Line 6.5 plus Line 6.6) 9,744,48,86,0 RECONCILIATION OF CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS 8. Net change in cash, cash equivalents and short-term investments (Line, plus Lines 5 and 7) (6,,059) 4,60, Cash, cash equivalents and short-term investments: 9. Beginning of year 9,58,44 4,908,40 9. End of year (Line 8 plus Line 9.),97,8 9,58,44 5

7 ANNUAL STATEMENT FOR THE YEAR 0 OF THE NARRAGANSETT BAY INSURANCE COMPANY UNDERWRITING AND INVESTMENT EXHIBIT Line of Business PART - PREMIUMS EARNED Net Premiums Written per Column 6, Part B Unearned Premiums Dec. Prior Year - per Col., Last Year s Part Unearned Premiums Dec. Current Year - per Col. 5 Part A 4 Premiums Earned During Year (Cols. + - ). Fire 607,646 56,4 448,88 695,8. Allied lines 5,48 80,066 5,775 79,77. Farmowners multiple peril Homeowners multiple peril 48,,77 4,00,5,64,8 55,87,74 5. Commercial multiple peril Mortgage guaranty Ocean marine Inland marine 6,4 5,074 44,7 79,06 0. Financial guaranty Medical professional liability-occurrence Medical professional liability-claims-made Earthquake 68,84 60,59 50,8 78,8. Group accident and health Credit accident and health (group and individual) Other accident and health Workers' compensation Other liability - occurrence,60 46,869 50,69 7,85 7. Other liability - claims-made Excess workers compensation Products liability-occurrence Products liability-claims-made ,9. Private passenger auto liability ,9.4 Commercial auto liability Auto physical damage Aircraft (all perils) Fidelity Surety Burglary and theft Boiler and machinery Credit International Warranty Reinsurance-nonproportional assumed property Reinsurance-nonproportional assumed liability Reinsurance-nonproportional assumed financial lines Aggregate write-ins for other lines of business TOTALS 50,005,658 4,87,544 4,860,68 58,06,584 DETAILS OF WRITE-INS Sum. of remaining write-ins for Line 4 from overflow page Totals (Lines 40 through 40 plus 498) (Line 4 above)

8 ANNUAL STATEMENT FOR THE YEAR 0 OF THE NARRAGANSETT BAY INSURANCE COMPANY Line of Business UNDERWRITING AND INVESTMENT EXHIBIT PART A - RECAPITULATION OF ALL PREMIUMS Amount Unearned (Running One Year or Less from Date of Policy) (a) Amount Unearned (Running More Than One Year from Date of Policy) (a) Earned but Unbilled Premium 4 Reserve for Rate Credits and Retrospective Adjustments Based on Experience 5 Total Reserve for Unearned Premiums Cols Fire 448, ,88. Allied lines 5, ,775. Farmowners multiple peril Homeowners multiple peril,64, ,64,8 5. Commercial multiple peril Mortgage guaranty Ocean marine Inland marine 44, ,7 0. Financial guaranty Medical professional liability-occurrence Medical professional liability-claims-made Earthquake 50, ,8. Group accident and health Credit accident and health (group and individual) Other accident and health Workers' compensation Other liability-occurrence 50, ,69 7. Other liability-claims-made Excess workers compensation Products liability-occurrence Products liability-claims-made ,9.Private passenger auto liability ,9.4Commercial auto liability Auto physical damage Aircraft (all perils) Fidelity Surety Burglary and theft Boiler and machinery Credit International Warranty Reinsurance-nonproportional assumed property Reinsurance-nonproportional assumed liability Reinsurance-nonproportional assumed financial lines Aggregate write-ins for other lines of business TOTALS 4,860, ,860,68 6. Accrued retrospective premiums based on experience 7. Earned but unbilled premiums 8. Balance (Sum of Lines 5 through 7) 4,860,68 DETAILS OF WRITE-INS Sum. of remaining write-ins for Line 4 from overflow page Totals (Lines 40 through 40 plus 498) (Line 4 above) (a) State here basis of computation used in each case. 7

9 ANNUAL STATEMENT FOR THE YEAR 0 OF THE NARRAGANSETT BAY INSURANCE COMPANY UNDERWRITING AND INVESTMENT EXHIBIT PART B - PREMIUMS WRITTEN Line of Business Reinsurance Assumed Reinsurance Ceded From From To To Affiliates Non-Affiliates Affiliates Non-Affiliates Direct Business (a) Net Premiums Written Cols Fire,8, ,50, ,646. Allied lines 85, ,98 5,48. Farmowners multiple peril Homeowners multiple peril 65,6, ,497,90 48,,77 5. Commercial multiple peril Mortgage guaranty Ocean marine Inland marine,6, ,50,9 6,4 0. Financial guaranty Medical professional liability-occurrence Medical professional liability-claims-made Earthquake 40, ,7 68,84. Group accident and health Credit accident and health (group and individual) Other accident and health Workers' compensation Other liability-occurrence,78, ,470,07,60 7. Other liability-claims-made Excess workers compensation Products liability-occurrence Products liability-claimsmade ,9. Private passenger auto liability ,9.4 Commercial auto liability Auto physical damage Aircraft (all perils) Fidelity Surety Burglary and theft Boiler and machinery Credit International Warranty Reinsurancenonproportional assumed property XXX Reinsurancenonproportional assumed liability XXX Reinsurancenonproportional assumed financial lines XXX Aggregate write-ins for other lines of business TOTALS 7,769, ,76,67 50,005,658 DETAILS OF WRITE-INS Sum. of remaining writeins for Line 4 from overflow page Totals (Lines 40 through 40 plus 498) (Line 4 above) (a) Does the company s direct premiums written include premiums recorded on an installment basis? Yes [ ] No [ X ] If yes:. The amount of such installment premiums $. Amount at which such installment premiums would have been reported had they been recorded on an annualized basis $ 8

10 ANNUAL STATEMENT FOR THE YEAR 0 OF THE NARRAGANSETT BAY INSURANCE COMPANY 9 UNDERWRITING AND INVESTMENT EXHIBIT PART - LOSSES PAID AND INCURRED Losses Paid Less Salvage Net Losses Unpaid Net Losses Losses Incurred Reinsurance Net Payments Current Year Unpaid Current Year Recovered (Cols. + - ) (Part A, Col. 8) Prior Year (Cols ) Percentage of Losses Incurred (Col. 7, Part ) to Premiums Earned (Col. 4, Part ) Reinsurance Line of Business Direct Business Assumed. Fire 48, ,4 99,648,00 0 0, Allied lines 88,87 0 8,984 04,888 4,000 5,000, Farmowners multiple peril Homeowners multiple peril 80,4, ,7,907 4,940,779 7,40,54 7,64,75 4,06, Commercial multiple peril Mortgage guaranty Ocean marine Inland marine 657, ,58 475,5 47,04 4, , Financial guaranty Medical professional liability-occurrence Medical professional liability-claims-made Earthquake Group accident and health Credit accident and health (group and individual) Other accident and health Workers' compensation Other liability-occurrence,75 0 0,75 9,74 96,000 6, Other liability-claims-made Excess workers compensation Products liability-occurrence Products liability-claims-made ,9. Private passenger auto liability ,9.4 Commercial auto liability Auto physical damage Aircraft (all perils) Fidelity Surety Burglary and theft Boiler and machinery Credit International Warranty Reinsurance-nonproportional assumed property XXX Reinsurance-nonproportional assumed liability XXX Reinsurance-nonproportional assumed financial lines XXX Aggregate write-ins for other lines of business TOTALS 8,79,57 0 7,768,470 44,04,0 7,76,0 7,409,975 44,75, DETAILS OF WRITE-INS Sum. of remaining write-ins for Line 4 from overflow page Totals (Lines 40 through ) (Line 4 above)

11 ANNUAL STATEMENT FOR THE YEAR 0 OF THE NARRAGANSETT BAY INSURANCE COMPANY 0 UNDERWRITING AND INVESTMENT EXHIBIT PART A - UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES Reported Losses Incurred But Not Reported Deduct Reinsurance Recoverable from Net Losses Excl. Authorized and Incurred But Net Losses Unauthorized Not Reported Reinsurance Reinsurance Unpaid Companies (Cols. + - ) Direct Assumed Ceded (Cols ) Net Unpaid Loss Adjustment Expenses Reinsurance Line of Business Direct Assumed. Fire 6, ,800,00, Allied lines 55,000 0,000 4,000 4,000 7,00. Farmowners multiple peril Homeowners multiple peril 8,06, ,8,49,967,6 8,04,60,670,998 7,40,54,750, Commercial multiple peril Mortgage guaranty Ocean marine Inland marine 99, ,7 47,04 47,04 4,90 0. Financial guaranty Medical professional liability-occurrence Medical professional liability-claims-made Earthquake Group accident and health (a) 0 4. Credit accident and health (group and individual) Other accident and health (a) 0 6. Workers' compensation Other liability-occurrence 445,4 0 70,750 74,74 98,000 98,000 9,74 6,54 7. Other liability-claims-made Excess workers compensation Products liability-occurrence Products liability-claims-made ,9. Private passenger auto liability ,9.4 Commercial auto liability Auto physical damage Aircraft (all perils) Fidelity Surety Burglary and theft Boiler and machinery Credit International Warranty Reinsurance-nonproportional assumed property XXX XXX 0. Reinsurance-nonproportional assumed liability XXX XXX 0. Reinsurance-nonproportional assumed financial lines XXX XXX 0 4. Aggregate write-ins for other lines of business TOTALS 8,0, ,678,6,4,40 9,06,60 0 4,608,998 7,76,0,789,6 DETAILS OF WRITE-INS Sum. of remaining write-ins for Line 4 from overflow page Totals (Lines 40 through ) (Line 4 above) (a) Including $ for present value of life indemnity claims.

12 ANNUAL STATEMENT FOR THE YEAR 0 OF THE NARRAGANSETT BAY INSURANCE COMPANY. Claim adjustment services: UNDERWRITING AND INVESTMENT EXHIBIT PART - EXPENSES Loss Adjustment Expenses Other Underwriting Expenses Investment Expenses. Direct 9,59,55 9,59,55. Reinsurance assumed 0 0. Reinsurance ceded,89,6,89,6.4 Net claim adjustment services ( ) 8,50, ,50,74. Commission and brokerage:. Direct, excluding contingent 8,896,90 8,896,90. Reinsurance assumed, excluding contingent 0 0. Reinsurance ceded, excluding contingent 8,884, 8,884,.4 Contingent-direct,54,74,54,74.5 Contingent-reinsurance assumed Contingent-reinsurance ceded,0,685,0,685.7 Policy and membership fees Net commission and brokerage ( ) 0 (549,64) 0 (549,64). Allowances to manager and agents 0 4. Advertising 49,645 49, Boards, bureaus and associations 5,458 5, Surveys and underwriting reports 5,56,060 5,56, Audit of assureds' records 0 8. Salary and related items: 8. Salaries,967,066 6,,40 8,078,06 8. Payroll taxes 7,98 96,88 54,06 9. Employee relations and welfare 96, ,479,8,7 0. Insurance 4,580 70,8,898. Directors' fees 0. Travel and travel items 95,45 50,76 446,. Rent and rent items 0 4. Equipment 90,4 6,6 45, Cost or depreciation of EDP equipment and software 565,578,6,,87, Printing and stationery 70, ,57 78,95 7. Postage, telephone and telegraph, exchange and express 7, ,657 66,4 8. Legal and auditing 06,448 44,95 0,84 5,40 9. Totals (Lines to 8),74,57 8,00,74 0,84,747, Taxes, licenses and fees: 0. State and local insurance taxes deducting guaranty association credits of $ 4,00,78 4,00,78 0. Insurance department licenses and fees 6,86 69,065 6,86 0, Gross guaranty association assessments 5,67 5, All other (excluding federal and foreign income and real estate) Total taxes, licenses and fees ( ) 6,86 5,00,659 6,86 5,05,8. Real estate expenses,99 9,594 6,99. Real estate taxes 598,9,99. Reimbursements by uninsured plans 0 4. Aggregate write-ins for miscellaneous expenses,0,748 4,444,984 55,85 5,80, Total expenses incurred,6,5 7,0,640 8,57 (a) 40,45,50 6. Less unpaid expenses-current year,789,6,97,0 7,76,95 7. Add unpaid expenses-prior year,56,694 7,00,7 0 8,59,46 8. Amounts receivable relating to uninsured plans, prior year Amounts receivable relating to uninsured plans, current year 0 0. TOTAL EXPENSES PAID (Lines ) 0,60,45 0,06,04 8,57 40,947,984 DETAILS OF WRITE-INS 40. CONSULTING SERVICES,05,84 4,047,57 5,099, MISCELLANEOUS EXPENSES 49,907 97,4 7,940 50, INVESTMENT FEES 8,875 8, Summary of remaining write-ins for Line 4 from overflow page Totals (Lines 40 through 40 plus 498) (Line 4 above),0,748 4,444,984 55,85 5,80,547 (a) Includes management fees of $,596,9 to affiliates and $ to non-affiliates. 4 Total

13 ANNUAL STATEMENT FOR THE YEAR 0 OF THE NARRAGANSETT BAY INSURANCE COMPANY EXHIBIT OF NET INVESTMENT INCOME Collected During Year Earned During Year. U.S. Government bonds (a) 8,59 8,44. Bonds exempt from U.S. tax (a) (7,40) 4,660. Other bonds (unaffiliated) (a),808,757,86,75. Bonds of affiliates (a) 0. Preferred stocks (unaffiliated) (b) 0. Preferred stocks of affiliates (b) 0. Common stocks (unaffiliated) 0 7. Common stocks of affiliates 0. Mortgage loans (c) 4. Real estate (d) 5. Contract loans 6. Cash, cash equivalents and short-term investments (e) 5,75 5,46 7. Derivative instruments (f) 8. Other invested assets 9. Aggregate write-ins for investment income Total gross investment income,06,8,49,. Investment expenses (g) 8,57. Investment taxes, licenses and fees, excluding federal income taxes (g). Interest expense (h) 4. Depreciation on real estate and other invested assets (i) 5. Aggregate write-ins for deductions from investment income 0 6. Total deductions (Lines through 5) 8,57 7. Net investment income (Line 0 minus Line 6),865,86 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 090 through 090) plus 0998 (Line 9 above) Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 through 50) plus 598 (Line 5 above) 0 (a) Includes $ 5,866 accrual of discount less $ 57,9 amortization of premium and less $,47 paid for accrued interest on purchases. (b) Includes $ accrual of discount less $ 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 $ paid for accrued interest on purchases. (d) Includes $ for company s occupancy of its own buildings; and excludes $ interest on encumbrances. (e) Includes $,68 accrual of discount less $ 0 amortization of premium and less $ paid for accrued interest on purchases. (f) Includes $ accrual of discount less $ amortization of premium. (g) Includes $ investment expenses and $ investment taxes, licenses and fees, excluding federal income taxes, attributable to segregated and Separate Accounts. (h) Includes $ interest on surplus notes and $ interest on capital notes. (i) Includes $ depreciation on real estate and $ depreciation on other invested assets. EXHIBIT OF CAPITAL GAINS (LOSSES) Realized Gain (Loss) On Sales or Maturity Other Realized Adjustments Total Realized Capital Gain (Loss) (Columns + ) 4 Change in Unrealized Capital Gain (Loss) 5 Change in Unrealized Foreign Exchange Capital Gain (Loss). U.S. Government bonds 69,948 69,948. Bonds exempt from U.S. tax 0. Other bonds (unaffiliated) 04,0 04,0. 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 and short-term investments Derivative instruments 0 8. Other invested assets Aggregate write-ins for capital gains (losses) Total capital gains (losses) 74, 0 74, 0 0 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 090 through 090) plus 0998 (Line 9 above)

14 ANNUAL STATEMENT FOR THE YEAR 0 OF THE NARRAGANSETT BAY INSURANCE COMPANY EXHIBIT OF NONADMITTED ASSETS Current Year Total Nonadmitted Assets Prior Year Total Nonadmitted Assets Change in Total Nonadmitted Assets (Col. - Col. ). Bonds (Schedule D) Stocks (Schedule D):. Preferred stocks Common stocks Mortgage loans on real estate (Schedule B):. First liens Other than first liens Real estate (Schedule A): 4. Properties occupied by the company Properties held for the production of income Properties held for sale Cash (Schedule E-Part ), cash equivalents (Schedule E-Part ) and short-term investments (Schedule DA) Contract loans Derivatives (Schedule DB) Other invested assets (Schedule BA) Receivables for securities Securities lending reinvested collateral assets (Schedule DL) Aggregate write-ins for invested assets Subtotals, cash and invested assets (Lines to ) Title plants (for Title insurers only) Investment income due and accrued Premiums and considerations: 5. Uncollected premiums and agents balances in the course of collection 69,094 7,068, Deferred premiums, agents balances and installments booked but deferred and not yet due Accrued retrospective premiums Reinsurance: 6. 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 5,5,957 7,50,908 (7,795,049) 9. Guaranty funds receivable or on deposit Electronic data processing equipment and software Furniture and equipment, including health care delivery assets Net adjustment in assets and liabilities due to foreign exchange rates Receivables from parent, subsidiaries and affiliates,08,70 0 (,08,70) 4. Health care and other amounts receivable Aggregate write-ins for other than invested assets,556 0 (,556) 6. Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines to 5) 6,906,7 7,59,976 (9,4,6) 7. From Separate Accounts, Segregated Accounts and Protected Cell Accounts Total (Lines 6 and 7) 6,906,7 7,59,976 (9,4,6) DETAILS OF WRITE-INS Summary of remaining write-ins for Line from overflow page Totals (Lines 0 through 0 plus 98) (Line above) PREPAID OUTSIDE SERVICE COSTS,556 0 (,556) Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 through 50 plus 598) (Line 5 above),556 0 (,556)

15 . Summary of Significant Accounting Practices A. Accounting Practices The accompanying financial statements of Narragansett Bay Insurance Company (the Company or NBIC ) are presented on the basis of accounting practices prescribed or permitted by the Rhode Island Insurance Department. The Rhode Island Insurance Department recognizes only statutory accounting practices prescribed or permitted by the State of Rhode Island for determining and reporting the financial condition and results of operations of an insurance company, and for determining its solvency under the Rhode Island Insurance Law. The National Association of Insurance Commissioners' ( NAIC ) Accounting Practices and Procedures Manual ( NAIC SAP ) has been adopted as a component of prescribed or permitted practices by the State of Rhode Island. B. Use of Estimates in the Preparation of the Financial Statements The preparation of financial statements in conformity with Statutory Accounting Principles ( SAP ) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. It also requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. C. Accounting Policy Premiums are earned over the terms of the related insurance policies and reinsurance contracts. Unearned premium reserves are established to cover the unexpired portion of premiums written. Such reserves are computed by pro rata methods for direct business and are based on reports received from ceding companies for reinsurance assumed and contract terms for reinsurance ceded. Expenses incurred in connection with acquiring new insurance business, including such acquisition costs as sales commissions, are charged to operations as incurred. Expenses incurred are reduced for ceding allowances received or receivable. In addition, the company uses the following accounting policies: () Short-term investments are stated at amortized costs. () Bonds not backed by other loans are stated at amortized cost using the scientific amortization method. () Unaffiliated common stocks are stated at market value. (4) Preferred stocks (5) Mortgage loans on real estate (6) Loan-backed securities are stated at amortized cost. The retrospective amortization adjustment method is used to value all loan-backed securities. (7) Investments in uncombined subsidiaries controlled and affiliated companies in which the Company had an interest of 0% or more are carried on the equity basis. (8) Investments in joint ventures, partnerships and limited liability companies (9) Derivatives (0) () Unpaid losses and loss adjustment expenses include an amount determined from individual case estimates and loss reports and an amount, based on past experience, for losses incurred but not reported. Such liabilities are necessarily 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 period determined. () The Company has not modified its capitalization policy from the prior period. () Method used to estimate pharmaceutical rebate receivables. Accounting Changes and Corrections of Errors. Business Combinations and Goodwill A. Statutory Purchase Method B. Statutory Merger 4

16 C. Impairment Loss 4. Discontinued Operations 5. Investments A. Mortgage Loans, including Mezzanine Real Estate Loans B. Debt Restructuring C. Reverse Mortgages D. Loan-Backed Securities () Prepayments assumptions for Mortgage-Backed 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 or interest rates (refinancing incentive), economic activity (including housing turnover) and term and age of the underlying collateral (burnout, seasoning). () () (4) All impaired securities (fair value is less than cost or amortized cost) for which an other-than-temporary impairment has not been recognized in earnings as a realized loss: a. The aggregate amount of unrealized losses:. Less than Months $ (4,696). Months or Longer $ - b. The aggregate related fair value of securities with unrealized losses:. Less than Months $ 4,74,7. Months or Longer $ - (4) All impaired securities (fair value is less than cost or amortized cost) are evaluated by management, based on specific criteria to determine if the impairments should be considered other than temporary. Factors considered in determining that other than temporary impairment charges are warranted include: management s consideration of current and near term liquidity needs and retrospective review of length of loss over credit quality of investment and general market conditions. There were no securities with unrealized losses at December, 0. E. Repurchase Agreements and/or Securities Lending Transactions F. Real Estate G. Low Income Housing Tax Credits 6. Joint Ventures, Partnerships and Limited Liability Companies A. Detail for Those Greater than 0% of Admitted Assets B. Write-downs for Impairments 7. Investment Income A. Due and Accrued Investment Income The Company non-admits investment income due and accrued if amounts are over 90 days past due. B. Amounts Non-Admitted No investment income due and accrued was excluded from surplus as of December, Derivative Instruments 4.

17 9. Income Taxes A. The components of the net deferred tax asset (liability) at December are as follows: //0 //0 Change () () () (4) (5) (6) (7) (8) (9) Ordinary Capital (Col +) Total Ordinary Capital (Col 4+5) Total (Col -4) Ordinary (Col -5) Capital (Col 7+8) Total (a) Gross Deferred Tax Assets 8,4,950 98,40 8,,70 9,975,744 6,4 0,09,885 8,9,06 (7,7) 8,,485 (b) Statutory Valuation Allowance Adjustments (c ) Adjusted Gross Deferred Tax Assets (a-b) 8,4,950 98,40 8,,70 9,975,744 6,4 0,09,885 8,9,06 (7,7) 8,,485 (d) Deferred Tax Assets Nonadmitted 5,7,57 98,40 5,5,957 7,50, ,50,908 7,696,69 98,40 7,795,049 (e) Subtotal Net Admitted Deferred Tax Asset (c-d),997,4 0,997,4,454,86 6,4,570,977 54,577 (6,4) 46,46 (f) Deferred Tax Liabilities (g) Net Admitted Deferred Tax Assets/ (Net Deferred Tax Liabilities) (e-f),997,4 0,997,4,454,86 6,4,570,977 54,577 (6,4) 46,46 //0 //0 Change () () () () () () (7) (8) (9) Ordinary Capital (Col +) Total Ordinary Capital (Col 4+5) Total (Col -4) Ordinary (Col -5) Capital (Col 7+8) Total Admission Calculation Components SSAP No. 0: (a) Federal Income Taxes Paid In Prior Years Recoverable Through Loss Carrybacks (b) Adjusted Gross Deferred Tax Assets Expected To Be Realized (Excluding The Amount Of Deferred Tax Assets From (a) above) After Application of the Threshold Limitation. (The Lesser of (b)and (b) Below) Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date. 4,65,60 4,65,60. Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold.,997,4 0,997,4,454,86 6,4,570,977 54,577 (6,4) 46,46 (c ) Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From (a) and (b) above) Offset by Gross Deferrred Tax Liabilities (d) Deferred Tax Assets Admitted as the result of application of SSAP No. 0 Total ((a)+(b)+(c )),997,4 0,997,4,454,86 6,4,570,977 54,577 (6,4) 46,46 (a) Ratio Percentage Used to Determine Recovery Period And Threshold Limitation Amount % 0% (b) Amount of Adjusted Captial And Surplus Used To Determine Recovery Period And Threshold Limitation In (b) Above 9,974, 5,709,76 //0 //0 Change () () () () () () (7) (8) (9) 4 Ordinary Percent Capital Percent (Col +) Total Percent Ordinary Percent Capital Percent (Col 4+5) Total Percent (Col -4) Ordinary Percent (Col -5) Capital Percent (Col 7+8) Total Percent Impact of Tax-Planning Strategies (a) Adjusted Gross DTAs (%of Total Adjusted Gross DTAs) (b) Net Admitted Adjusted Gross DTAs (%of Total Net Admitted Adjusted Gross DTAs) (c ) Does the Company's tax-planning strategies include the use of reinsurance? Yes No X B. Deferred tax liabilities are not recognized for the following amounts: C. Current Tax and Change in Deferred Tax 4.

18 () () () //0 //0 Col - Change Current Income Tax (a) Federal (b) Foreign (c ) Subtotal (d) Federal income tax on net capital gains (e) Utilization of capital loss carry-forwards (f) Other (g) Federal and foreign income taxes incurred Deferred Tax Assets: (a) Ordinary () Discounting of unpaid losses () Unearned premium reserve.,440,4,00,008 (560,765) () Policyholder reserves 58,005 4,77 6,88 (4) Investments (5) Deferred acquisition costs (6) Policyholder dividends accrual (7) Fixed assets 6,895 6,075 0,80 (8) Compensation and benefits accrual (9) Pension accrual (0) Receivables - nonadmitted () Net operating loss carry-forward 5,469,76 6,75,59 8,754,60 () Tax credit carry-forward () Other (including items <5% of total ordinary tax assets) 0,046,6 7,70 (99) Subtotal 8,4,950 9,975,745 8,9,05 (b) Statutory valuation allowance adjustment (c ) Non admitted 5,7,57 7,50,908 7,696,69 (d) Admitted ordinary deferred tax assets (a99-b-c),997,4,454,87 54,576 (e) Capital: () Investments 98,40 98,40 0 () Net capital loss carry-forward 0 7,70 (7,70) () Real estate (4) Other (including items <5% of total capital tax assets) (99) Subtotal 98,40 6,40 (7,70) (f) Statutory valuation allowance adjustment (g) Non admitted 98, ,40 (h) Admitted capital deferred tax assets (e99-f-g) 0 6,40 (6,40) (i) Admitted deferred tax assets (d+h),997,4,570,977 46,46 Deferred Tax Liabilities: (a) (b) Ordinary () Investments () Fixed assets () Deferred and uncollected premium (4) Policyholder reserves (5) Other (including items <5% of total ordinary tax liabilities) (99) Subtotal Capital: () Investments () Real estate () Other (including items <5% of total capital tax liabilities) (99) Subtotal (c ) Deferred tax liabilities (a99+b99) Net deferred tax assets/liabilities (i-c),997,4,570,977 46,46 4.

19 D. Among the more significant book to tax adjustments were the following: // // Net unearned premium reserve adjustment (769,674) 68,986 Reserve discount 6,60 5,46 E. At December, 0, the Company had $44,99,6 of operating loss carryforwards originating in 005 through 0, which expire, if unused, in 06 through 0. F. Consolidated Federal Income Tax Return () The Company s 0 federal income tax return will be consolidated with the following entities: NBIC Holdings, Inc., NBIC Financial Holdings, Inc., NBIC Service Company, Inc., and Pawtucket Insurance Company. () Allocation is based upon separate return calculations. G. Federal or foreign income tax loss contingencies 0. Information Concerning Parent, Subsidiaries, Affiliates and Other Related Parties A.- C. The Company had been capitalized through a $00 million funding agreement between Blackstone Financial Group, Inc. ( BFG ) (ultimate parent company of the group) and an outside investment group. During 008, Blackstone Financial Group, Inc. changed its name to NBIC Financial Holdings, Inc. and later to NBIC Holdings, Inc. The Company received additional capital contributions from NBIC Financial Holdings, Inc. in the form of cash in the amount of $.0 million, $.0 million, $0.0 million and $9.0 million during 0, 0, 00 and 009, respectively. In addition, $.5 million was recorded in the December, 0 balance sheet as receivable from parent, subsidiaries and affiliates. The amount was recorded in the December, 0 statutory balance sheet as gross paid in and contributed surplus. The Company received the $.5 million capital contribution in 0 from NBIC Financial Holdings, Inc. in the form of cash. This capital contribution was part of a plan contemplated in 0 to restore the Company s capital position following Hurricane Sandy. D. As of December, 0, the Company was due $8,48,5 from affiliates. NBIC Service Company, Inc. owed the Company $5,86,95 and NBIC Holdings Inc. owed the Company $65,400. These amounts relate to an expense sharing agreement between the Company, Pawtucket Insurance Company ( PIC ), NBIC Service Company, Inc. and NBIC Holdings Inc. The expense sharing arrangements require that intercompany balances be settled quarterly. In addition, the Company was due $.5 million from NBIC Financial Holdings Inc. related to the capital contribution received in 0. E. Guarantees or Contingencies for Related Parties F. Management, Service Contracts, Cost Sharing Arrangements The Company has an Administrative Services arrangement with NBIC Service Company Inc., NBIC Holdings Inc. and PIC. The Company reimburses these affiliated entities for costs directly related to the business of the Company. The allocation policies were designed to be fair and equitable to all parties. G. See Note 0 A., B., & C. and 0 I. H. Value of an Upstream Intermediate Entity I. Investment in an SCA that exceeds 0% of admitted assets In accordance with NAIC SAP, NBIC has reported the investment in its 00% owned insurance subsidiary, PIC, at the statutory surplus value of that subsidiary. However, effective September 0, 006, PIC, with the explicit permission of the Rhode Island Insurance Department, records its buildings and land at fair market value instead of at depreciated cost required by NAIC SAP. This permitted practice, however, does not extend to the value of PIC as recorded by NBIC. NBIC, therefore, continues to record its investment in PIC as an amount equal to PIC s surplus on an NAIC SAP basis. J. Write down for Impairment of Investments in SCA Entities K. Investment in Foreign Insurance Subsidiary L. Investment in Downstream Non Insurance Holding Company. Debt. Retirement Plans, Deferred Compensation, Postemployment Benefits and Compensated Absences and Other Post Retirement Benefit Plans 4.4