Re:
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Old Republic International Corporation
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Form 10-K, for the Fiscal Year Ended December 31, 2012
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Filed March 1, 2013
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File No. 001-10607
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1.
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Please provide us proposed disclosure to be included in future filings that states the amount of statutory capital and surplus necessary to satisfy regulatory requirements, if significant in relation to the entity’s statutory capital and surplus, or state that such amount is not significant. Refer to ASC 944-505-1b.
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Shareholders' Equity
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Net Income (Loss)
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|||||||||||||||||||
December 31,
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Years Ended December 31,
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|||||||||||||||||||
2012
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2011
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2012
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2011
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2010
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||||||||||||||||
Statutory totals of insurance
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||||||||||||||||||||
company subsidiaries(b):
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||||||||||||||||||||
General
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$
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2,905.9
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$
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2,849.7
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$ 225.5
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$
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292.5
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$
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255.6
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(a)
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||||||||||
Title
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358.1
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236.6
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70.3
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46.7
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14.6
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|||||||||||||||
RFIG Run-off
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149.2
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113.6
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(285.0
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)
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(422.6
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)
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(196.3
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)
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||||||||||||
Life & Health
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71.9
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70.1
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3.0
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4.8
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4.3
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|||||||||||||||
Sub-total
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3,485.1
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3,270.0
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13.8
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(78.6
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)
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78.2
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||||||||||||||
GAAP totals of non-insurance company
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||||||||||||||||||||
subsidiaries and consolidation adjustments
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(111.6
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)
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140.9
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(64.2
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)
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(38.7
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)
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(41.2
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)
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|||||||||||
Unadjusted totals
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3,374.0
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3,411.1
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(50.4
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)
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(117.4
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)
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36.8
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|||||||||||||
Adjustments to conform to GAAP statements:
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||||||||||||||||||||
Deferred policy acquisition costs
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161.7
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193.3
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(33.3
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)
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(30.6
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)
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(19.8
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)
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||||||||||||
Fair value of fixed maturity securities
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552.7
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468.8
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—
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—
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—
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|||||||||||||||
Non-admitted assets
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78.2
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99.0
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—
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—
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—
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|||||||||||||||
Deferred income taxes
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(113.9
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)
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(93.8
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)
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35.7
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73.4
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49.8
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|||||||||||||
Mortgage contingency and deferred
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||||||||||||||||||||
payment obligation reserves
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(296.9
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)
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8.2
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—
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—
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—
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||||||||||||||
Title unearned premiums
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390.4
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360.4
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30.0
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14.6
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6.7
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|||||||||||||||
Loss reserves
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(360.7
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)
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(290.4
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)
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(70.4
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)
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(49.6
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)
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(21.7
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)
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||||||||||
Surplus notes
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(202.5
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)
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(365.0
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)
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—
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—
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—
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|||||||||||||
Sundry adjustments
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13.0
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(19.5
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)
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19.4
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(30.9
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)
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(21.6
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)
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||||||||||||
Total adjustments
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222.3
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361.4
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(18.2
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)
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(23.1
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)
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(6.6
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)
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||||||||||||
Consolidated GAAP totals
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$
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3,596.2
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$
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3,772.5
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$
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(68.6
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)
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$
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(140.5
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)
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$
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30.1
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__________
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(a)
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Includes the effect of PMA Capital Corporation's statutory results from the date of acquisition through year-end, excluding adjustments to conform to Old Republic's accounting policies.
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(b)
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The insurance laws of the respective states in which the Company’s insurance subsidiaries are incorporated prescribe minimum capital and surplus requirements for the lines of business they are licensed to write. For domestic property and casualty and life and health insurance companies the National Association of Insurance Commissioners also prescribes risk-based capital (RBC) requirements. The RBC is a measure of statutory capital in relationship to a formula driven definition of risk relative to a company’s balance sheet and mix of business. The combined RBC ratio of our primary General insurance subsidiaries was 711% and 721% of the company action level RBC at December 31, 2012 and 2011, respectively. The minimum capital requirements for the Company’s Title Insurance subsidiaries are established by statute in the respective states of domicile. The minimum regulatory capital requirement is not significant in relationship to the recorded statutory capital of the Company’s Title and Life & Health insurance subsidiaries. At December 31, 2012 and 2011 each of the Company’s General, Title, and Life and Health insurance subsidiaries exceeded the minimum statutory capital and surplus requirements. Refer to Note 1 (s) Regulatory Matters for a discussion regarding the RFIG Run-off group.
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·
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The Company is responsible for the adequacy and accuracy of the disclosure in the filings;
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·
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Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
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·
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The Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
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cc: A.C. Zucaro,
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