-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FALV23wmXjkTYbEhF3K6WNRLQg4B21JY/hLNSGvBB+KvPmrX3+5ckOotfe5zWB8Q 8XozEvQoRqVut05GdSW8mg== 0000893220-02-000952.txt : 20020731 0000893220-02-000952.hdr.sgml : 20020731 20020731161534 ACCESSION NUMBER: 0000893220-02-000952 CONFORMED SUBMISSION TYPE: 35-CERT PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20020731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLUMBIA ENERGY GROUP CENTRAL INDEX KEY: 0000022099 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION & DISTRIBUTION [4923] IRS NUMBER: 131594808 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 35-CERT SEC ACT: 1935 Act SEC FILE NUMBER: 070-08905 FILM NUMBER: 02716279 BUSINESS ADDRESS: STREET 1: 13880 DULLES CORNER LANE STREET 2: SUITE 300 CITY: HENDERON STATE: VA ZIP: 20171-4600 BUSINESS PHONE: 7035616000 MAIL ADDRESS: STREET 1: 13880 DULLES CORNER LANE STREET 2: SUITE 300 CITY: HERNDON STATE: VA ZIP: 20171-4600 FORMER COMPANY: FORMER CONFORMED NAME: COLUMBIA GAS SYSTEM INC DATE OF NAME CHANGE: 19920703 35-CERT 1 w62638e35vcert.txt COLUMBIA INSURANCE CORPORATION, LTD. July 31, 2002 Securities and Exchange Commission Judiciary Plaza 450 Fifth Street, NW Washington, DC USA 20549 INTERIM REPORT AND BUSINESS PLAN AMENDMENT UNDER RULE 24 OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 COLUMBIA INSURANCE CORPORATION, LTD. 801 E. 86TH AVE. MERRILLVILLE, IN 46410 FILE NO. 70-8905 FILE NO. 70-9371 Gentlemen: In compliance with the terms and conditions of Rule 24 under the Public Utility Holding Company Act of 1935, and the Orders of the Commission dated October 25, 1996 (File No. 70-8905) and July 23, 1999 (File No. 70-9371) authorizing the financing transactions and business activities as more fully described in the Joint Application/Declaration, as amended (the "application"), the undersigned hereby submits the following information applicable to Columbia Insurance Corporation, Ltd. ("CICL") for the January 1, 2002 through June 30, 2002 period. 1. Provide a general description of loss exposure/experience for automobile, "all-risk" property, and general liability insurance coverage. CICL was licensed in 1996 to reinsure certain of the "all risks" property, general and automobile liability risks of Columbia Energy Group ("CEG"), its subsidiaries and associates. CEG was acquired by NiSource, Inc. on November 1, 2000 and NiSource individual subsidiaries were added to the CEG insurance programs. CICL continues to write these risks under reinsurance agreements with qualified primary insurance carriers. At July 1, 2001 the General and Automobile Liability reinsurance agreement was renewed at existing terms and conditions. At July 1, 2001 a new All Risks Property reinsurance agreement was negotiated, with retentions remaining the same as in the prior period. At November 1, 2001, "T&D" (property coverage for transmission and distribution lines) was reinsured to CICL and fully reinsured by a third party and secured by a letter of credit. The addition of T&D coverage poses no loss or credit risk to CICL. Details of the coverage and limits reinsured, by line of business and underwriting year, are provided as Exhibit 1. As further discussed under point 2 below, CICL's loss experience under each of the reinsurance agreements continues to fall within the "expected" range, based on the actuarial analysis of its losses. There have been $11,600,431 in paid claims since inception - $1,700,640 (including LTD) for the period under review. 2. Provide an analysis by subsidiary or associate company of auto liability, general liability, property and LTD losses and expenses incurred during the six-month period as compared to premiums paid. For the period under review CICL's incurred loss to earned premium ratios for the policies which incepted at 7/1/01 were as follows: EARNED PREMIUM INCURRED LOSS COVERAGE LINE (12/31-6/30) (INCL. IBNR) LOSS RATIO - ------------------------------------------------------------------------------- All Risk Property $1,290,000 $1,706,000 132.25% T&D $16,150 $0 0.00 General/ Auto Liability $1,400,000 $1,188,000 84.86% Long-Term Disability $1,148,742 $1,080,740 94.08% - ------------------------------------------------------------------------------- Totals $3,854,894 $3,974,740 103.11% The above ratios reflect a conservative reserving position, as is appropriate for a company the size of Columbia Insurance Corporation, Ltd.. 3. Provide an analysis by subsidiary or associate companies of claims paid by CICL on behalf of such subsidiary or associate company and include the lead-in reserve available to CICL and end-of-period reserve balance. Reported beginning-of-period loss reserves and end-of-period loss reserves on CICL's property and liability programs as at December 31, 2001 and June 30, 2002, were $17,306,791 and $19,102,496 respectively. Detail of incurred and paid losses, by line of business and underwriting year, is provided in Exhibit 2. At June 30, 2002, CICL also had a reserve for long term disability (LTD) risks assumed under portfolio transfer agreements with two unrelated insurers and a new policy issued effective 7/1/01. Qualified actuaries have estimated the LTD reserve to be approximately $10,567,080 as of December 31, 2001. Loss reserves as of June 30, 2002 are $11,045,474. Prior to assuming this risk, CICL applied for, and was granted, a Prohibited Transaction Exemption by the Department of Labor, having shown in their application that the reinsurance of the LTD risks of employees of CEG by CICL would allow CEG to improve the LTD benefits provided. In order to provide this employee benefit reinsurance program, CICL formed a Vermont branch of their Bermuda captive, exclusively for the purpose of reinsuring ERISA risks. CICL also changed its license class to allow it to underwrite Long Term risks. 4. Provide a listing that illustrates the increases and decreases to premiums for each subsidiary or associate company as a result of the operations of CICL and loss experience of each subsidiary as a result of operations of CICL. CICL employs a premium allocation model based on exposure and experience of each subsidiary. Exhibit 3 highlights the model which uses an 80%/20% weighting for experience/exposure to derive premium. Premiums were essentially unchanged since the 7/1/00 renewal. The net premium for the LTD risks assumed by the captive during the period under review represents a 6 month (12/31/01-6/30/02) period for LTD premium charged by the commercial insurer which issued the policies, less insurer expenses. It is anticipated that using CICL to reinsure this risk will allow NiSource to continue to provide the expanded employee benefit coverage, without a commensurate increase in rates. 5. Provide a copy of CICL's income statement and balance sheet, including any notes thereto. CICL's income statement and balance sheet including any notes are attached. We look forward to your response and further discussion regarding our business plan amendment. Very truly yours, COLUMBIA INSURANCE CORPORATION, LTD. By: /s/ J.W. Grossman ----------------- J. W. Grossman, President EX-1 3 w62638exv1.txt INTERIM REPORT EXHIBIT 1 COLUMBIA INSURANCE CORPORATION LTD. INTERIM REPORT RULE 24 FILE NO. 70-8905 DESCRIPTION OF CURRENT BUSINESS WRITTEN TRHOUGH: 6/30/02
ALL RISK PROPERTY PERIOD PER OCC/ AGGREGATE DEDUCTIBLE FRONTING CARRIER 6/30/96-97 $500,000-$650,000/$3MM $100,000-250,000 Arkwright 6/30/97-98 $500,000-$650,000/$3MM $100,000-250,000 Arkwright 6/30/98-99 $500,000-$650,000/$3MM $100,000-250,000 Hartford Steam Boiler 6/30/99-7/1/00 $500,000-$650,000/$3MM $100,000-250,000 Hartford Steam Boiler 7/1/00-01 $500,000-$650,000/$3MM $100,000-250,000 Hartford Steam Boiler 7/1/01-02 $500,000-$650,000/$3MM $100,000-250,000 AEGIS GENERAL/AUTO LIABILITY LAYER/PER OCC/AGG LIMIT ATTACHMENT FRONTING CARRIER 7/1/96-97 Primary US$800,000/3,000,000 $200,000 AEGIS Excess US$1,000,000/1,000,000 $1,000,000 AEGIS 7/1/97-98 Primary US$800,000/3,800,000* $200,000 AEGIS Excess US$1,000,000/1,500,000* $1,000,000 AEGIS 7/1/98-99 Primary US$800,000/3,000,000 $200,000 AEGIS Excess US$1,000,000/1,000,000 $1,000,000 AEGIS 7/1/99-00 Primary US$800,000/3,000,000 $200,000 AEGIS Excess US$1,000,000/1,000,000 $1,000,000 AEGIS 7/1/00-01 Primary US$800,000/3,000,000 $200,000 AEGIS Excess US$1,000,000/1,000,000 $1,000,000 AEGIS 7/1/01-02 Primary US$800,000/3,000,000 $200,000 AEGIS Excess US$1,000,000/1,000,000 $1,000,000 AEGIS LONG-TERM DISABILITY PERIOD PER OCC/ AGGREGATE DEDUCTIBLE FRONTING CARRIER 1/1/99-00 Unlimited/$7.0MM $0 Wausau 1/1/00-01 Unlimited/$10.2MM $0 Liberty Mutual 1/1/01-7/1/01 Unlimited/$4.6MM $0 Liberty Mutual 7/1/01-02 Unlimited/$2.78MM $0 UNUM/Provident
* Limits for the 1997/98 reinsurance were changed retroactively. There was no change in 1998-99 limits. EX-2 4 w62638exv2.txt INTERIM REPORT COLUMBIA INSURANCE CORPORATION LTD. INTERIM REPORT RULE 24 FILE NO. 70-8905 EXHIBIT 2 INCURRED AND PAID LOSSES FOR THE PERIOD 1/01/02 - 6/30/02
LEAD-IN LOSS PAID LOSSES OSLR AT IBNR AT CLOSING UPDATED MOVEMENT POLICY YEAR COVERAGE RESERVES IN PERIOD 6/30/02 06/30/02 RESERVE INCURRED FROM 12/31/01 7/1/96-97 General Liability 902,387 - - 902,387 902,387 902,387 - 7/1/97-98 General Liability 1,911,243 - 710,000 1,201,243 1,911,243 1,911,243 - 7/1/98-99 General Liability 1,392,000 - 210,000 1,182,000 1,392,000 1,392,000 - 7/1/99-00 General Liability 3,546,161 889,314 765,126 1,891,721 2,656,847 3,546,161 - 7/1/00-01 General Liability 4,000,000 208,981 1,825,000 1,966,019 3,791,019 4,000,000 - 7/1/01-02 General Liability 2,812,000 - 800,000 3,200,000 4,000,000 4,000,000 1,188,000 6/30/96-97 All Risk - - - - - - - 6/30/97-98 All Risk - - - - - - - 6/30/98-99 All Risk 593,000 - 799,000 - 799,000 799,000 206,000 6/30/99-7/1/00 All Risk - - - - - - - 7/1/00-01 All Risk 650,000 - 650,000 - 650,000 650,000 - 7/1/01-02 All Risk 1,500,000 - 1,760,000 1,240,000 3,000,000 3,000,000 1,500,000 - ----------------------------------------------------------------------------------------------------------------------------------- Subtotal 17,306,791 1,098,295 7,519,126 11,583,370 19,102,496 20,200,791 2,894,000 - ----------------------------------------------------------------------------------------------------------------------------------- 1/1/99-00 LTD 4,085,676 197,122 3,287,674 600,879 3,888,553 4,085,676 - 1/1/00-7/1/01 LTD 5,402,288 393,247 4,023,620 985,421 5,009,041 5,402,288 - 7/1/01-02 LTD 1,079,116 11,976 289,311 1,858,569 2,147,880 2,159,856 1,080,740 - ----------------------------------------------------------------------------------------------------------------------------------- Subtotal 10,567,079 602,345 7,600,605 3,444,869 11,045,474 11,647,819 1,080,740 - ----------------------------------------------------------------------------------------------------------------------------------- 27,873,870 1,700,640 15,119,731 15,028,239 30,147,970 31,848,610 3,974,740 ===========================================================================================
INCEPTION TO DATE PAID LOSSES 7/1/96-97 General Liability 726,613 7/1/97-98 General Liability 1,837,757 7/1/98-99 General Liability - 7/1/99-00 General Liability 1,343,153 7/1/00-01 General Liability 208,981 7/1/01-02 General Liability - 6/30/96-97 All Risk - 6/30/97-98 All Risk 1,423,776 6/30/98-99 All Risk 1,303,140 6/30/99-7/1/00 All Risk 2,168,952 7/1/00-01 All Risk 664,511 7/1/01-02 All Risk - 1/1/99-00 LTD 820,671 1/1/00-7/1/01 LTD 1,090,901 7/1/01-02 LTD 11,976 --------------- Total 11,600,431 =============== EX-3 5 w62638exv3.txt INTERIM REPORT COLUMBIA INSURANCE CORPORATION, LTD. EXHIBIT 3 INTERIM REPORT RULE FILE NO. 70-8905 PREMIUM ALLOCATION M1/01/02R-T6/30/02OD TOTAL CICL PREMIUM ALLOCATION Line of Business Liability All-Risk Total ---------------------------------------------- Premium Account 2,800,000 2,580,000 5,380,000 ---------------------------------------------- Weighting Weighting ----------------------------------- Exposure 80.00% 80.00% Loss 20.00% 20.00%
LIABILITY ALL-RISK TOTAL KEY OPERATING COMPANY PREMIUM PREMIUM PREMIUM ======================================================================================================================= CKY Columbia Gas of Kentucky, Inc. $ 55,988 $ 3,851 $ 59,839 CMD Columbia Gas of Maryland, Inc. $ 13,428 $ 1,270 $ 14,698 COH Columbia Gas of Ohio, Inc. $ 463,321 $ 45,307 $ 508,628 COS Columbia Gas of Virginia $ 85,820 $ 7,726 $ 93,546 CPA Columbia Gas of Pennsylvania $ 176,683 $ 11,539 $ 188,222 TCO Columbia Gas Transmission Corp $ 474,311 $ 722,741 $ 1,197,052 CGT Columbia Gulf Transmission Co $ 92,907 $ 206,998 $ 299,905 CNR Columbia Energy Resources, Inc. $ 33,994 $ 546 $ 34,540 CES Columbia Energy Services $ - $ - $ - PLP Columbia Propane Corporation LP $ - $ - $ - CPC Columbia Propane Corporation $ 2,240 $ 28,603 $ 30,843 PET Columbia Petroleum Corporation $ - $ - $ - CLG Columbia LNG Corporation $ - $ - $ - CNS Columbia Network Services $ 2,240 $ - $ 2,240 CAT Columbia Atlantic Trading Corporation $ 2,240 $ - $ 2,240 CPL Columbia Pipeline Corp $ 2,240 $ - $ 2,240 CFC Columbia Finance Corp $ 2,240 $ - $ 2,240 CEC Columbia Electric Corporation $ - $ - $ - CS Columbia Energy Group Service $ - $ - $ - CG Columbia Energy Group - Parent $ 2,240 $ - $ 2,240 TCC Columbia Energy Group Capital $ 2,240 $ - $ 2,240 CTC Columbia Transmission Comm Co $ - $ 21,552 $ 21,552 CTL Columbia Transcom $ 2,240 $ - $ 2,240 CNS Columbia Microwave $ - $ 3,280 $ 3,280 NCS NiSource Corporate Services $ 54,057 $ 17,192 $ 71,249 NSI NiSource Inc. $ 2,240 $ - $ 2,240 NIP NIPSCO - Electric Merchant $ 329,870 $ 815,071 $ 1,144,941 NIP NIPSCO - Electric Distribution $ 162,218 $ 226,303 $ 388,521 NIP NIPSCO - Gas Distribution $ 466,215 $ 157,467 $ 623,682 NDC NiSource Development $ 2,240 $ 5,915 $ 8,155 NES NI Energy Services $ 2,303 $ - $ 2,303 NET NiSource Energy Technologies $ 2,240 $ - $ 2,240 KGF Kokomo Gas $ 23,870 $ 4,084 $ 27,954 NIF NO. IN. Fuel & Light $ 25,735 $ 800 $ 26,535 BSG Bay State Gas $ 285,092 $ 28,149 $ 313,241 NPG NiSource Pipeline Group $ 12,133 $ 2,110 $ 14,243 EUS Energy USA $ 9,152 $ 5,348 $ 14,500 PEI Primary Energy $ 8,261 $ 150,677 $ 158,938 IWC IWC Resource $ - $ 113,471 $ 113,471 ------------------------------------------------------- $ 2,800,000 $ 2,580,000 $ 5,380,000 =======================================================
EX-4 6 w62638exv4.txt INTERIM REPORT COLUMBIA INSURANCE CORPORATION LTD. INTERIM REPORT RULE 24 FILE NO. 70-8905 EXHIBIT 4 ALL-RISK/GL/AL PREMIUM ALLOCATION FOR THE PERIOD 1/01/02 - 6/30/02 Property GL/AL Total -------------------------------------- Allocated Premium Amount: 2,580,000 2,800,000 5,380,000 -------------------------------------- Actual Premium Amount: 2,580,000 2,800,000 5,380,000 -------------------------------------- Weighting Factors ------------ Exposure 80.00% ------------ Loss 20.00%
PROPERTY GL/AL EXPOSURE/LOSS EXPOSURE/LOSS SELECTED ALLOCATION ALLOCATION W/AVG CODE OPERATING COMPANY FACTOR FACTOR PREMIUM =============================================================================================================================== CKY Columbia Gas of Kentucky, Inc. 0.15% 2.00% 59,870 CMD Columbia Gas of Maryland, Inc. 0.05% 0.48% 14,730 COH Columbia Gas of Ohio, Inc. 1.76% 16.55% 508,808 COS Columbia Gas of Virginia 0.30% 3.07% 93,700 CPA Columbia Gas of Pennsylvania 0.45% 6.31% 188,290 TCO Columbia Gas Transmission Corp 28.01% 16.94% 1,196,978 CGT Columbia Gulf Transmission Co 8.02% 3.32% 299,876 CNR Columbia Energy Resources, Inc. 0.02% 1.21% 34,396 CES Columbia Energy Services 0.00% 0.00% - PLP Columbia Propane Corporation LP 0.00% 0.00% - CPC Columbia Propane Corporation 1.11% 0.08% 30,878 PET Columbia Petroleum Corporation 0.00% 0.00% - CLG Columbia LNG Corporation 0.00% 0.00% - CNS Columbia Network Services 0.00% 0.08% 2,240 CAT Columbia Atlantic Trading Corporation 0.00% 0.08% 2,240 CPL Columbia Pipeline Corp 0.00% 0.08% 2,240 CFC Columbia Finance Corp 0.00% 0.08% 2,240 CEC Columbia Electric Corporation 0.00% 0.08% 2,240 CS Columbia Energy Group Service 0.00% 0.08% 2,240 CG Columbia Energy Group - Parent 0.00% 0.08% 2,240 TCC Columbia Energy Group Capital 0.00% 0.08% 2,240 CTC Columbia Transmission Comm Co 0.84% 0.00% 21,672 CTL Columbia Transcom 0.00% 0.08% 2,240 CNS Columbia Microwave 0.13% 0.00% 3,354 NCS NiSource Corporate Services 0.67% 1.93% 71,326 NSI NiSource Inc. 0.00% 0.08% 2,240 NIP NIPSCO - Electric Merchant 31.58% 11.78% 1,144,604 NIP NIPSCO - Electric Distribution 8.77% 5.79% 388,386 NIP NIPSCO - Gas Distribution 6.10% 16.65% 623,580 NDC NiSource Development 0.23% 0.08% 8,174 NES NI Energy Services 0.00% 0.08% 2,240 NET NiSource Energy Technologies 0.00% 0.08% 2,240 KGF Kokomo Gas 0.16% 0.85% 27,928 NIF NO. IN. Fuel & Light 0.03% 0.92% 26,534 BSG Bay State Gas 1.09% 10.02% 308,682 NPG NiSource Pipeline Group 0.08% 0.43% 14,104 EUS Energy USA 0.21% 0.33% 14,658 PEI Primary Energy 5.84% 0.30% 159,072 IWC IWC Resource 4.40% 0.00% 113,520 -------------------------------------------------- 100.00% 100.00% 5,380,000 ==================================================
EX-5 7 w62638exv5.txt FINANCIAL STATEMENTS Columbia Insurance Corporation, LTD Balance Sheet As of June 30, 2002 ($000) ASSETS Investment and other assets 11,349 ---------- Current Assets Cash and temporary cash investments 22,542 Accounts receivable, net Intercompany 4 Other 197 Prepayments 2,619 ---------- Total Current Assets 25,362 ---------- Deferred Charges 1,527 ---------- TOTAL ASSETS 38,237 ========== CAPITALIZATION AND LIABILITIES Capitalization Common Stock Equity Common stock 370 Additional paid-in capital 1,142 Unrealized gain/(loss) on investments 172 Retained earnings 4,102 ---------- Total Capitalization 5,787 ---------- Current Liabilities Accounts and drafts payable 77 Intercompany accounts payable - Accrued taxes 1,711 Other 516 ---------- Total Current Liabilities 2,303 ---------- Other Liabilities and Deferred Credits 30,148 ---------- TOTAL CAPITALIZATION AND LIABILITIES 38,237 ========== Columbia Insurance Corporation, LTD Income Statement Year-to-Date, June 30, 2002 ($000) Operating Revenues 3,855 Operating Expenses 4,361 ------------ Operating Income (506) ------------ Other Income (Deductions) Interest income and other, net 461 ------------ Total Other Income (Deductions) 461 ------------ Income Before Income Taxes (45) Income Taxes (16) ------------ Net Income (29) ============ -----END PRIVACY-ENHANCED MESSAGE-----