-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, nyqTs45FaErL4vAygnHFxPqjWgK8GbaDNeOd8v1f0RcRDs7Nyiq7AA67Z3OtHGCU ArTZvYMSGMUcQiFwVU4c/g== 0000077098-94-000003.txt : 19940330 0000077098-94-000003.hdr.sgml : 19940330 ACCESSION NUMBER: 0000077098-94-000003 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940329 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN PREMIER UNDERWRITERS INC CENTRAL INDEX KEY: 0000077098 STANDARD INDUSTRIAL CLASSIFICATION: 6331 IRS NUMBER: 236000765 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 001-01569 FILM NUMBER: 94518500 BUSINESS ADDRESS: STREET 1: ONE EAST FOURTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5135796600 MAIL ADDRESS: STREET 1: ONE EAST FOURTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 FORMER COMPANY: FORMER CONFORMED NAME: PENNSYLVANIA NEW YORK CENTRAL TRANSPORTA DATE OF NAME CHANGE: 19690429 FORMER COMPANY: FORMER CONFORMED NAME: NEW YORK CENTRAL RAILROAD CO DATE OF NAME CHANGE: 19680618 10-K 1 ANNUAL REPORT ON FORM 10-K - ----------------------------------------------------------------- - ----------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1993 Commission file number 1-1569
or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 AMERICAN PREMIER UNDERWRITERS, INC. (Exact name of registrant as specified in its charter) Pennsylvania 23-6000765 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One East Fourth Street Cincinnati, Ohio 45202 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (513) 579-6600
Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered ------------------- ------------------------ Common Stock, $1 par value . . . . . . . New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None (Title of class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No___ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] At March 15, 1994, the aggregate market value of the regist- rant's voting stock held by non-affiliates was $670 million. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practica- ble date. Class Outstanding at March 15, 1994 ----- ----------------------------- Common Stock, $1 par value 46,092,718 shares* The following documents have been incorporated by reference into the Parts of this Report indicated: (1) Certain parts of the 1993 Annual Report to Shareholders, as indicated herein (Parts I and II) (2) Proxy statement involving the election of directors which the registrant intends to file with the Commission within 120 days after December 31, 1993 (Part III) __________________________ * As of March 15, 1994, 1,376,948 additional shares of Common Stock remained to be distributed pursuant to the registr- ant's 1978 Plan of Reorganization. - ----------------------------------------------------------------- - ----------------------------------------------------------------- PAGE TABLE OF CONTENTS Page PART I ITEM 1. BUSINESS. . . . . . . . . . . . . . . . . . . . 1 Introduction. . . . . . . . . . . . . . . . . . 1 Description of Businesses . . . . . . . . . . . 2 Insurance . . . . . . . . . . . . . . . . 2 Non-Insurance Operations. . . . . . . . . 12 General . . . . . . . . . . . . . . . . . . . . 14 Employees . . . . . . . . . . . . . . . . . . . 14 ITEM 2. PROPERTIES. . . . . . . . . . . . . . . . . . . 14 ITEM 3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . 15 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . . . . . . . . . . . . . . 16 EXECUTIVE OFFICERS OF THE REGISTRANT. . . . . . . . . . . . 16 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS . . . . . . . . . 18 ITEM 6. SELECTED FINANCIAL DATA . . . . . . . . . . . . 18 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . . . . 18 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . 18 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE . . . . . 18 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. . . . . . . . . . . . . . . . . . 18 ITEM 11. EXECUTIVE COMPENSATION. . . . . . . . . . . . . 18 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. . . . . . . . . . . . . . . . 18 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . . . . . . . . . . . . . 18 PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K . . . . . . . . . . . . . 19 PAGE PART I ITEM 1. BUSINESS INTRODUCTION American Premier Underwriters, Inc. (the "Company"), the Registrant, was incorporated in the Commonwealth of Pennsylvania in 1846. Effective March 25, 1994, the Company changed its corporate name from The Penn Central Corporation to American Premier Underwriters, Inc. in order to better reflect its new identity as a property and casualty insurance specialist. Formerly a diversified company, the Company has reoriented its corporate focus on specialty property and casualty insurance through a number of strategic acquisitions and divestitures. Its principal operations are conducted by a group of non-standard private passenger automobile insurance companies (the "NSA Group") that were purchased in 1990 and by Republic Indemnity Company of America ("Republic Indemnity"), a California workers' compensation insurance company that the Company purchased in 1989. See "Description of Businesses--Insurance". In furtherance of its acquisition strategy, on February 10, 1994, the Company announced that it is considering a proposal from American Financial Corporation ("AFC") for the purchase by the Company of the personal lines insurance businesses owned by Great American Insurance Company ("GAI"), a wholly owned subsid- iary of AFC, for a proposed purchase price of approximately $380 million in cash. GAI's personal lines businesses reported net earned premiums of $342 million in 1993 and $322 million in 1992. Approximately 70% of these premiums came from standard private passenger automobile insurance, 25% from multiperil homeowners' insurance and 5% from other lines. GAI has advised the Company that separate income statements for the personal lines businesses are not available because these lines have been included with GAI's other insurance lines for financial reporting purposes. However, GAI estimates that on a stand-alone basis the personal lines businesses had pro forma accident year statutory combined ratios of 99.0% in 1993 and 99.1% in 1992. AFC's proposal for the sale of the personal lines businesses to the Company would include the transfer by GAI of an investment portfolio of securities with a market value of approximately $450 million, consisting principally of investment grade bonds. GAI estimates that the generally accepted accounting principles ("GAAP") net book value of the businesses that would be trans- ferred at closing would be approximately $200 million. The Company's Board of Directors (the "Board") has at this stage concluded that the proposed acquisition merits serious consideration, in part because it could further the Company's strategy of achieving higher returns by investing its substantial cash resources in profitable property and casualty insurance businesses. The Board also concluded that the proposed acquisi- tion is potentially attractive in that it could provide the Company with the opportunity to become a full-service provider of private passenger automobile insurance on a nationwide basis that can take advantage of the Company's existing auto insurance management and underwriting skills. The Board has appointed a special committee of its outside directors to review the proposal. The special committee is empowered to negotiate all aspects of the proposed transaction, including the purchase price proposed by AFC. Completion of a transaction would be subject to certain conditions, including approval by the special committee, receipt by the Company of an appropriate fairness opinion from an investment banking firm and any required regulatory approvals. AFC owns 40.5% of the Com- pany's Common Stock and AFC's principal shareholder, Carl H. Lindner, is Chairman of the Board and Chief Executive Officer of the Company. On May 20, 1993, the Company purchased Leader National Insurance Company ("Leader National") from The Dyson-Kissner- Moran Corporation for $38 million in cash. Leader National writes non-standard private passenger automobile insurance and, to a lesser extent, non-standard commercial automobile insur- ance. The Company continues to seek acquisitions and investment opportunities, primarily in the property and casualty insurance area. At December 31, 1993, the Company had $611.2 million of cash, temporary investments and marketable securities (other than those held by its insurance operations) that could be available for such purposes. It is not possible to predict the nature or impact on the Company of any other acquisition or investment that might be made. In furtherance of its strategy to sell all of its wholly owned non-insurance operating subsidiaries, the Company sold in August 1993 the defense services operations conducted by Vitro Corporation for approximately $94 million and also sold in 1993 and the first quarter of 1994 units that install satellite commu- nications networks, provide engineering services to the nuclear energy industry and provide rail testing services, respectively, for an aggregate of approximately $17.8 million. During 1993, the Company, in underwritten public offerings, sold its 19.3% position in the common shares of Tejas Gas Corpo- ration for net proceeds of $106.6 million (resulting in a pre-tax gain to the Company of $80.0 million) and sold its 20% position in the limited partnership units of Buckeye Partners, L.P. for net proceeds of $71.6 million (resulting in a pre-tax gain of $18.5 million). In December 1993, the Company signed an agreement in princi- ple with the Metropolitan Transportation Authority of the State of New York (the "MTA") that provides for an extension of the end of the Company's lease to the MTA of Grand Central Terminal ("GCT") and the Harlem and Hudson commuter rail lines from the year 2032 to 2274. It also provides for the grant of an option to the MTA to purchase the leased property in 25 years. In return, the Company would receive consideration having an esti- mated present value of $55 million, principally in the form of increased future lease rental payments. See "Description of Businesses--Non-Insurance Operations--Other--GCT and Related Development Rights". The Company has reported, as of the beginning of its 1993 tax year, an aggregate consolidated net operating loss carry- forward for Federal income tax purposes of $825 million and an aggregate capital loss carryforward of $384 million. The 1993 consolidated Federal income tax return will report a remaining net operating loss carryforward currently estimated at $610 million, which will expire at the end of 1996 unless previously utilized, and a remaining capital loss carryforward estimated at $262 million, which will expire at the end of 1997 unless previ- ously utilized. See Note 7 of the Notes to Financial Statements of the Company and its subsidiaries ("Notes to Financial State- ments") that are incorporated herein by reference to the Com- pany's 1993 Annual Report to Shareholders. DESCRIPTION OF BUSINESSES Set forth below is a narrative description of the business operations of the Company's Insurance segment, which is the only reportable industry segment for which financial information is presented in the financial statements referred to in Item 8 of this Report. In addition, information is presented with respect to the Company's "Non-Insurance Operations". INSURANCE Introduction ------------ The Company's principal operations are conducted through specialty property and casualty insurance subsidiaries that underwrite and market non-standard automobile and workers' compensation insurance. The Company's primary objective in its insurance operations is to achieve underwriting profitability, in addition to earning income from investment of premiums. The Company has met this objective in each of the four full years that it has owned its insurance operations. In 1993, these operations had an overall GAAP combined ratio of 96.2% (representing a 3.8% underwriting profit). On a statutory basis, the combined ratio was 94.0%, as compared with a property and casualty statutory insurance average of 109.2% (as estimated by A.M. Best). The Company experienced net earned premium growth of 27.5% in 1993 while maintaining underwriting profitability. Management's philosophy is to refrain from writing business that is not expected to produce an underwriting profit even if it is necessary to limit premium growth to do so. 2 The overall profitability of the Company's insurance busi- ness is a function of both its underwriting profitability and the performance of its investment portfolio. See "Liquidity and Capital Resources--Investing and Financing Activity" and "Analy- sis of Continuing Operations--Insurance" in "Management's Discus- sion and Analysis of Financial Condition and Results of Operations" ("Management's Discussion and Analysis") that is incorporated herein by reference to the Company's 1993 Annual Report to Shareholders and Note 3 of the Notes to Financial Statements for information regarding investments and investment income of the Company's Insurance segment. In October 1993, the Clinton Administration introduced in Congress proposed legislation called the Health Security Act (the "HSA"), which would guarantee all Americans access to comprehen- sive health care services provided through health plans. If the HSA were enacted, health plans would provide medical treatment for injuries sustained in the workplace or in an automobile accident. Workers' compensation and automobile insurers would continue to be responsible for the costs of treatment covered by their policies and would reimburse health plans for services provided. The HSA also would create a Commission on Integration of Health Benefits, which would study the feasibility and appro- priateness of transferring to health plans financial responsi- bility for all medical benefits covered under workers' compensa- tion and automobile insurance and would submit a report to the President by July 1, 1995 that would provide a detailed plan for integration if integration is recommended. The Company is unable to predict whether or in what form the HSA will be enacted or, if enacted, what effect it would have on the Company's insurance operations. However, depending on its actual terms, the HSA, and any subsequent legislation mandating such integration, could potentially have a material adverse effect on the Company's future insurance operations. Non-Standard Automobile Insurance --------------------------------- General. The NSA Group is engaged in the writing of insur- ance coverage on private passenger automobile physical damage and liability policies for "non-standard risks". The NSA Group has four principal operating units comprised of Atlanta Casualty Company, Windsor Insurance Company, Infinity Insurance Company and Leader National Insurance Company and their respective subsidiaries ("Atlanta Casualty", "Windsor", "Infinity" and "Leader National", respectively) and includes a total of ten insurance companies. Atlanta Casualty, Windsor, Infinity and Leader National are rated A+ (Superior), A+ (Superior), A (Excellent) and A- (Excellent), respectively, by A.M. Best, which rates insurance companies based upon factors of concern to policyholders. Non-standard risks are those individuals who are unable to obtain insurance through standard market carriers due to factors such as age, record of prior accidents, driving violations, particular occupation or type of vehicle. Premium rates for non-standard risks are generally higher than for standard risks. Total private passenger automobile insurance premiums written by insurance carriers in the United States in 1993 have been esti- mated by A.M. Best to be approximately $93 billion. Since it can be viewed as a residual market, the size of the non-standard private passenger automobile insurance market changes with the insurance environment and grows when standard coverage becomes more restrictive. Although this factor, as well as industry differences in the criteria which distinguish standard from non- standard insurance, make it difficult to make estimates of non-standard market size, NSA Group management believes that the voluntary non-standard market has accounted for approximately 10% to 15% of total private passenger automobile insurance premiums written in recent years. State "assigned risk" plans also service this market as an alternative to voluntary private insurance. The NSA Group's net written premiums increased from $660 million in 1992 to $902 million in 1993. The NSA Group attrib- utes its premium growth in recent years primarily to entry into new states, increased market penetration in its existing states, overall growth in the non-standard market and the inclusion of $46.2 million of net written premiums following the May 1993 purchase of Leader National. Management of the Company believes the non-standard market has experienced significant growth in recent years as standard insurers have become more restrictive in the types of risks they will write. The NSA Group writes busi- ness in 38 states and holds licenses to write policies in 45 states and the District of Columbia. 3 The geographic distribution of the NSA Group gross written premiums in 1993, including Leader National's gross written premiums from its May 20, 1993 date of acquisition by the Compa- ny, compared to 1992 was as follows:
Years Ended December 31, --------------------------------- 1993 1992 ----------- ----------- (Dollars in millions) Florida ................... $121.1 13.3% $131.7 19.8% Georgia ................... 110.7 12.2 90.8 13.7 Texas ..................... 96.5 10.6 37.1 5.6 California ................ 54.0 5.9 52.2 7.9 Arizona ................... 53.7 5.9 39.2 5.9 Tennessee ................. 41.3 4.6 31.0 4.7 Alabama ................... 34.2 3.8 27.4 4.1 Connecticut ............... 33.5 3.7 23.4 3.5 Missouri .................. 31.2 3.4 14.8 2.2 Indiana ................... 29.3 3.2 22.6 3.4 All Other ................. 302.9 33.4 193.9 29.2 ----- ---- ----- ---- TOTAL...................... $908.4 100.0% $664.1 100.0% ------ ------ ------ ------ ------ ------ ------ ------
In early 1993, the Company acquired 51% of the stock of a start- up insurance company in the United Kingdom which specializes in non-standard automobile insurance. During 1993, this company had gross written premiums of $23.7 million, of which $9.8 million was reinsured by one of the Company's wholly owned insurance subsidiaries. Underwriting results of insurance companies are frequently measured by their combined ratios. Underwriting results are generally considered profitable when the combined ratio is under 100%. The following table sets forth information with respect to the combined ratios for the NSA Group and the total private passenger automobile insurance industry for the periods shown:
Years Ended December 31, ------------------------ 1993 1992 1991 NSA Group GAAP Loss and Loss Adjustment Expense ("LAE") Ratio... 71.6% 69.7% 69.9% Underwriting Expense Ratio 25.4 26.4 25.2 ----- ----- ----- Combined Ratio............ 97.0% 96.1% 95.1% ----- ----- ----- ----- ----- ----- Statutory Loss and LAE Ratio........ 72.5% 69.7% 70.5% Underwriting Expense Ratio 24.4 26.1 26.5 ----- ----- ----- Combined Ratio ........... 96.9% 95.8% 97.0% ----- ----- ----- Total Private Passenger Automobile Insurance Industry Statutory Combined Ratio(1) ..........102.0% (Est.) 102.0% 104.7% - ---------------------
(1) Industry information was derived from Best's Insurance Management Reports Property/Casualty Supplement (January 3, 1994 edition). The comparison shown is to the private 4 passenger automobile insurance industry. Although the Com- pany believes that there is no reliable regularly published combined ratio data for the non-standard automobile insurance industry, the Company believes that such a com- bined ratio would present a less favorable comparison in that it would be lower than the private passenger automobile industry average shown above. The increase in the combined ratio for 1993 was primarily caused by rate adjustments which more favorably affected 1992 underwrit- ing results and an increase in losses in the 1993 first quarter resulting from a more severe winter than in 1992. A decrease in the underwriting expense ratio due to growth in earned premiums which outpaced associated expenses partially offset such factors. The NSA Group management believes that it has achieved underwriting profits over the past several years as a result of refinement of various risk profiles, thereby dividing the consum- er market into more defined segments which can either be excluded from coverage or surcharged adequately. Effective cost control measures, both in the underwriting and claims handling areas, have further contributed to the underwriting profitability of the NSA Group. In addition, the NSA Group generally writes policies of short duration, allowing more frequent evaluation of the rates on individual risks. Marketing. Each of the four principal units in the NSA Group is responsible for its own marketing, sales, underwriting and claims processing. Sales efforts are primarily directed toward independent agents to convince them to select an NSA Group insurance company for their customers. These units each write policies through approximately 5,000 to 20,000 independent agents. Of the approximately 920,000 NSA Group policies in force at December 31, 1993, fewer than 6% had policy limits in excess of $50,000 per occurrence. Most NSA Group policies are written for policy periods of six months or less, and some are as short as one month. Reinsurance. Due in part to the limited exposure on indi- vidual policies, none of the insurance carriers in the NSA Group is involved to a material degree in reinsuring risks with third party insurance companies. Risks written by NSA Group companies in excess of certain limits are in some cases reinsured with a major reinsurance company. In general, the risk retained by the NSA Group companies ranges from $100,000 to $500,000 of ultimate net loss for each occurrence and certain portions of ultimate net losses in excess of such limits. Reinsurance premiums paid by the NSA Group in 1993 amounted to less than 1% of net written premi- ums of the NSA Group for the period. See Notes 3 and 17 of the Notes to Financial Statements for further information regarding reinsurance. Competition. A large number of national, regional and local insurers write non-standard private passenger automobile insur- ance coverage. Insurers in this market generally compete on the basis of price (including differentiation on liability limits, variety of coverages offered and deductibles), geographic avail- ability and ease of enrollment and, to a lesser extent, reputa- tion for claims handling, financial stability and customer service. NSA Group management believes that sophisticated data analysis for refinement of risk profiles has helped the NSA Group to compete successfully on the basis of price without negatively affecting underwriting profitability. The NSA Group attempts to provide selected pricing for a wider spectrum of risks and with a greater variety of payment options, deductibles and limits of liability than are offered by many of its competitors. The NSA Group does not issue any participating policies and does not pay dividends to policyholders, except for Leader National, which paid policyholders $107,000 in dividends in 1993 pursuant to certain commercial vehicle programs. Regulation. Like all insurance companies, including Republic Indemnity discussed below under "Workers' Compensation Insurance", the NSA Group insurance companies are subject to regulation in the jurisdictions in which they do business. In general, the insurance laws of the various states establish regulatory agencies with broad administrative powers governing, among other things, premium rates, solvency standards, licensing of insurers, agents and brokers, trade practices, forms of poli- cies, maintenance of specified reserves and capital for the protection of policyholders, deposits of securities for the benefit of policyholders, investment activities and relationships between insurance subsidiaries and their parents and affiliates. Material transactions between insurance subsidiaries and their parents andaffiliates generally must be disclosed and prior approval of the applicableinsurance regulatory authorities generally is required for any such transaction which may be deemed to be extraordinary. In addition, while regulations differ from state to state, they typically restrict the maximum amount of dividends that may be paid by an insurer to its share- holders in any twelve-month period without advance regulatory 5 approval. Such limitations are generally based on earnings or statutory surplus. Under applicable restrictions, the maximum amount of dividends that may be paid by the NSA Group to the Company during 1994 without seeking regulatory clearance is $32.8 million. Most states have created insurance guarantee associations to provide for the payment of claims for which insolvent insurers are liable but which cannot be paid out of such insolvent in- surers' assets. In applicable states, insurance companies, including the NSA Group companies, are subject to assessment by such associations, generally to the extent of such companies' pro rata share of such claims based on premiums written in the particular line of business in the year preceding the assessment, and subject to certain ceilings on the amount of such assessments in any year. In 1993, the NSA Group companies paid assessments to such associations aggregating approximately $1.2 million. In addition, many states have created "assigned risk" plans, jointunderwriting associations and other similar arrangements to provide state mandated minimum levels of automobile liability coverage to drivers whose driving records or other relevant characteristics make it difficult for them to obtain insurance in the voluntary market. Automobile liability insurers in those states are required to sell such coverage to a proportionate number (generally based on the insurer's share of the automobile liability insurance market in such state) of those drivers applying for placement as assigned risks. Assigned risks account- ed for less than 1% of net written premiums of the NSA Group companies in 1993. Premium rates for assigned risk business are established by the regulators of the particular state plan and are frequently inadequate in relation to the risks insured, resulting in underwriting losses. In 1993, the NSA Group received approximately $54.0 million in net written premiums from California. Prior to 1989, automo- bile insurance rates in California, other than assigned risk rates discussed above, were not subject to approval by any governmental agency and generally were determined by competitive market forces. In November 1988, Proposition 103 was approved by the California voters. It mandated important changes in the California insurance market, including the requirement that insurance companies roll back automobile insurance rates to 80% of the November 1987 levels, maintain those rates for one year and obtain prior approval of rates beginning in 1989. The Company's acquisition of the NSA Group in 1990 was structured to protect the Company against the consequences of any rate rollback applied to the acquired operations. As for the prior approval requirements, the company through which the NSA Group obtains its net written premiums in California increased its rates in August 1989; disposition of its applications for additional rate increases had, as with other companies, been suspended pending adoption of regulations implementing Proposition 103. However, recent legislation in California generally provides that applica- tions for rate increases made on or after July 1, 1993 will be deemed approved after 180 days unless disapproved by the Depart- ment of Insurance. The Company is unable to predict whether or at what level future rate increases, when applied for, may be approved. Over time, the failure to receive appropriate rate increases could result in reduced underwriting profitability in California for the NSA Group. In addition, the Company could experience loss of premium volume in California as a result of actions it would take to maintain such profitability. The operations of the NSA Group are dependent on the laws and regulations of the states in which its insurance companies are domiciled or licensed or otherwise conduct business, and changes in those laws and regulations have the potential to materially affect the revenues and expenses of the NSA Group. The Company is unable to predict whether or when Proposition 103-type initiatives or similar laws or regulations may be adopted or enacted in other states or what the impact of such developments would be on the future operations and revenues of its insurance businesses in such states. Workers' Compensation Insurance ------------------------------- General. Republic Indemnity is engaged in the sale of workers' compensation insurance in California. In 1993, it also began writing in Arizona. Republic Indemnity is currently rated A+ (Superior) by A.M. Best. Workers' compensation insurance policies provide coverage for workers' compensation and employer's liability. The workers' compensation portion of the coverage provides for statutorily prescribed benefits that employers are required to pay to employ- ees who are injured in the course of employment including, among 6 other things, temporary or permanent disability benefits, death benefits, medical and hospital expenses and expenses of vocation- al rehabilitation. The benefits payable and the duration of such benefits are set by statute, and vary with the nature and severi- ty of the injury or disease and the wages, occupation and age of the employee. The employer's liability portion of the coverage provides protection to an employer for its liability for losses suffered by its employees which are not included within the statutorily prescribed workers' compensation coverage. Republic Indemnity generally ssues policies for one-year periods. Workers' compensation insurance operations are affected by employment trends in their markets, the incidence of litigation activities, legal and medical costs, the use of vocational reha- bilitation programs and the filing of traditionally non-occupa- tional injuries, such as stress and trauma claims. While higher claims costs are ultimately reflected in premium rates, there historically has been a time lag of varying periods between the incurrence of higher claims costs and premium rate adjustments, which may unfavorably affect underwriting results. In California, minimum premium rates for workers' compensa- tion insurance are determined by the California Insurance Commis- sioner (the "Insurance Commissioner") based in part upon recom- mendations of the Workers' Compensation Insurance Rating Bureau of California (the "Bureau"). Such rates are set for over 400 categories of employment and generally are applied to the policy- holder's payroll. The Bureau proposed a 12.6% rate increase for new and renewal policies entered into on and after January 1, 1993, but the Insurance Commissioner did not grant any increase. Moreover, as discussed under "--Regulation" below, on July 16, 1993, the California legislature enacted legislation reducing workers' compensation insurance minimum premium rates by 7% with immediate effect and, on July 28, 1993, enacted legislation repealing the minimum rate law effective January 1, 1995. In addition, on December 1, 1993, the Insurance Commissioner ordered a 12.7% minimum premium rate decrease effective January 1, 1994 for new and renewal policies entered into on and after January 1, 1994. The following table sets forth information with respect to the combined ratios for Republic Indemnity and the total workers' compensation industry for the periods shown:
Years Ended December 31, ------------------------------- 1993 1992 1991 ---- ---- ---- Republic Indemnity GAAP Loss and LAE Ratio ............. 59.0% 66.4% 66.4% Underwriting Expense Ratio ..... 15.4 16.1 16.4 ----- ----- ----- Total Loss and Expense Ratio ... 74.4 82.5 82.8 Policyholder Dividend Ratio ... 20.3 17.1 16.7 ----- ----- ----- Combined Ratio ................ 94.7% 99.6% 99.5% ----- ----- ----- ----- ----- ----- Statutory Loss and LAE Ratio ............. 59.0% 69.1% 66.5% Underwriting Expense Ratio ..... 15.4 16.0 16.2 ----- ----- ----- Total Loss and Expense Ratio ... 74.4 85.1 82.7 Policyholder Dividend Ratio ... 13.7 11.6 17.7 ----- ----- ----- Combined Ratio ................ 88.1% 96.7% 100.4% ----- ----- ------ ----- ----- ------ Total Workers' Compensation Industry Statutory Combined Ratio(1) ...... 111.5%(Est.) 121.5% 122.6% - ------------------
(1) Industry information was derived from Best's Insurance Management Reports Property/Casualty Supplement (January 3, 1994 edition). 7 The decrease in the combined ratio for 1993 was primarily caused by a decrease in the frequency of losses, in part due to a reduction in fraudulent claims, and a lower underwriting expense ratio as compared with 1992. Management believes that the sum of Republic Indemnity's loss and LAE and underwriting expense ratios (together, its "loss and expense ratio") has been relatively low compared to that of other companies writing workers' compensation in California. As a result of its lower loss and expense ratio, Republic Indemnity has been able to pay policyholder dividends which are higher than those paid by most of its competitors. Management believes that Republic Indemnity's favorable loss and expense ratio record has been attributable to strict under- writing standards, loss control services, a disciplined claims philosophy and expense containment. Management believes that these factors, as well as Republic Indemnity's favorable reputa- tion with insureds for paying policyholder dividends, have contributed to a high policy renewal rate. From 1991 through 1993, the percentage of Republic Indemnity's policies renewed increased from 72.8% to 83.9% and the percentage of premiums represented by policy renewals increased from 77.2% to 89.2% of the premiums eligible for renewal. In recent years, the California market has been adversely affected by recessionary economic conditions, resulting in lower payrolls of California employers that form the basis of premium assessments. Nevertheless, Republic Indemnity experienced a 17.3% growth in net written premiums in 1993 over 1992. A con- tributing factor to Republic Indemnity's 1993 premium growth was the withdrawal from the Southern California market by several large workers' compensation carriers due to continuing underwrit- ing losses. Marketing. Republic Indemnity writes insurance through approximately 550 independent property and casualty insurance brokers. In 1993, none of these produced more than 4.6% of total premiums. The largest three of these produced approximately 10% of total premiums. Republic Indemnity has in excess of 11,300 policies in force, the largest of which represents less than 1% of net premiums written. Reinsurance. In its normal course of business and in accordance with industry practice, Republic Indemnity reinsures a portion of its exposure with other insurance companies so as to limit its maximum loss arising out of any one occurrence. Rein- surance does not legally discharge the original insurer from primary liability. Republic Indemnity retains the first $1.5 million of each loss, the next $1.5 million of each loss is reinsured with a major reinsurance company, the next $2 million of each loss is shared equally by Republic Indemnity and the reinsurance company and the remaining $120 million of each loss is covered by reinsurance provided by a group of more than 50 reinsurance companies. Premiums for reinsurance ceded by Republic Indemnity in 1993 were 1.0% of net written premiums for the period. Republic Indemnity does not assume reinsurance, except as an accommodation to policyholders who have a small percentage of their employees outside the state of California. See Notes 3 and 17 of the Notes to Financial Statements for further information on reinsurance. Competition. Republic Indemnity competes with both the California State Compensation Insurance Fund (the "State Fund") and over 300 other companies writing workers' compensation insurance in California. In 1992, the State Fund wrote approxi- mately $1.8 billion in direct written premiums, which was approx- imately 20.6% of the insured workers' compensation market in California. In addition, many employers are self-insured. According to published sources, no other company wrote in excess of $470 million in direct written premiums in 1992. Republic Indemnity wrote $401 million in statutory direct written premiums in 1992. With a market share of approximately 4.7% in 1992, not including risks self-insured by employers, Republic Indemnity believes that it is currently the third largest writer of workers' compensation insurance in California, including the State Fund. Approximately 95% of net premiums written by Republic Indemnity in 1993 were from the sale of policies that provide for the discretionary payment of dividends to policyholders as a refund of premiums paid when Republic Indemnity's experience with such policyholders has been more favorable than certain specified levels and Republic Indemnity has had favorable financial results. Because companies may not set workers' compensation premiums at rates lower than those approved by the Insurance Commissioner, competition is based primarily on an insurer's reputation for 8 paying dividends to policyholders. Management believes that Republic Indemnity's record and reputation for paying relatively high policyholder dividends have enhanced its competitive posi- tion. Moreover, the Company believes that its position was favorably impacted by the State Fund's reduction of its policy- holder dividends during 1992 which made the State Fund program less attractive to the market. Other competitive factors include loss control services, claims service, service to brokers and commission schedules. While many companies, including certain of the largest writers, specialize in the writing of California workers' compensation insurance, Republic Indemnity believes it has a competitive advantage over certain other companies offering all lines of insurance in that its specialization in the workers' compensation field enables it to concentrate on that business with a favorable effect upon operations. Republic Indemnity may be at a competitive disadvantage when businesses that purchase general property and casualty insurance are encouraged by other insurers to place their workers' compensation insurance as part of an overall insurance package. Although Republic Indemnity is one of the largest writers of workers' compensation insurance in California, certain of its competitors are larger and/or have greater resources than Republic Indemnity. Regulation. Republic Indemnity's insurance activities are regulated by the California Department of Insurance for the benefit of policyholders. The Department of Insurance has broad regulatory, supervisory and administrative powers along the lines of those promulgated by most states relating to the activities of their domestically incorporated insurers and the conduct of all insurance business within their respective jurisdictions, as described more fully under "Non-Standard Automobile Insurance" above. As indicated above, minimum premium rates for workers' compensation insurance are determined by the Insurance Commis- sioner based in part upon recommendations of the Bureau. On July 16, 1993, California enacted legislation effecting an overall 7% reduction in workers' compensation insurance premium rates with immediate effect, increasing statutory wor- kers' compensation benefits for temporary and permanent disabili- ty commencing initially July 1, 1994 and increasing again in 1995 and 1996, expanding the rights of employers under workers' compensation insurance policies to obtain access to insurance company files and introducing several reforms intended to reduce workers' compensation costs. The reforms include a tightening of the standards for job-related stress and post-termination claims, introducing measures designed to curb medical costs, limiting the frequency of medical-legal evaluations, capping the amount of compensable vocational rehabilitation expenses and strengthening penalties for fraudulent claims. The legislation authorizes the Insurance Commissioner to approve further reductions in premium rates so long as the further reduced rates are "adequate". It also prohibits the Insurance Commissioner, prior to January 1, 1995, from approving any premium rate that is greater than the reduced rates effected by the legislation. On July 28, 1993, California enacted further legislation that will replace the workers' compensation insurance minimum rate law, effective January 1, 1995, with a procedure permitting insurers to use any rate within 30 days after filing it with the Insurance Commissioner unless the rate is disapproved by the Insurance Commissioner. On December 1, 1993, the Insurance Commissioner ordered an additional 12.7% minimum premium rate decrease effec- tive January 1, 1994 for new and renewal policies entered into on and after January 1, 1994. The legislation also provides for the licensing of "managed" health care organizations to provide care for injuries covered by workers' compensation and generally permits employers to require employees to obtain medical services for their work-related injuries for a certain period of time from a health care organization selected by the employer, unless the employee chooses to be treated by a physician designated by the employee prior to the injury. If the workers' compensation cost savings resulting from the new legislation are inadequate to offset the impact of premium rate reductions, increased benefits and expanded employers' rights, the profitability of Republic Indemnity's workers' compensation insurance operations could be adversely affected. Management believes that this effect may be mitigated by Republic Indemnity's ability to reduce its relatively high policyholder dividends, although a reduction in dividends could affect premium volume. Greater price competition is expected to result when the repeal of the minimum premium rates that now govern all workers' compensation insurers becomes effective, and Republic Indemnity's operations could be affected adversely. The Company believes that the legislation's provisions relating to "managed" health care organizations will probably result in certain workers' compensation insurers seeking affiliation, contractual or other- wise, with one or more health care organizations. The Company 9 continues to evaluate the implications of these provisions but is unable to predict whether their ultimate impact on its workers' compensation insurance operations will be positive or adverse. While Republic Indemnity has continued to operate on a profitable basis, no assurance can be given that it could continue to do so in the face of adverse regulatory developments. Shareholder dividends paid within any twelve-month period from a California property and casualty insurance company to its parent without regulatory approval cannot exceed the greater of 10% of the insurer's statutory policyholders' surplus as of the preceding December 31, or 100% of its net income for the preced- ing calendar year, a limitation during 1994 of $61.6 million in the aggregate for Republic Indemnity. Due to the existence of the State Fund, California does not require licensed insurers to participate in any involuntary pools or assigned risk plans for workers' compensation insurance. California has guarantee regulations to protect policyholders of insolvent insurance companies. In California, an insurer cannot be assessed an amount greater than 1% of its premiums written in the preceding year, and the full amount is required to be recov- ered through a mandated surcharge to policyholders. Premiums written under workers' compensation policies are subject to assessment only with respect to covered losses incurred by the insolvent insurer under workers' compensation policies. There were no such assessments for policy year 1993. Proposition 103, which is described more fully under "Non- Standard Automobile Insurance" above, does not affect workers' compensation insurance as directly as other lines of business principally because its rate rollback feature does not apply to workers' compensation insurance. Reinsurance Subsidiary ---------------------- Penn Central Reinsurance Company, a subsidiary of the Company, commenced the writing of reinsurance in 1990. Earned premiums in 1993 and 1992 were approximately $10.7 million and $9.8 million, respectively. Liability for Property-Casualty Losses and Loss Adjustment Expenses ------------------------------------------------------------------- The consolidated financial statements of the Company and its subsidiaries that are incorporated herein by reference include the estimated liability for unpaid losses and LAE of the Com- pany's insurance subsidiaries. The liabilities for losses and LAE are determined using actuarial and statistical procedures and represent undiscounted estimates of the ultimate net cost of all unpaid losses and LAE incurred through December 31 of each year. These estimates do not represent an exact calculation of liabili- ties but rather involve actuarial projections at a given time of what the Company expects the ultimate settlement and administra- tion of claims will cost based on facts and circumstances then known, estimates of incurred but not reported losses, predictions of future events, estimates of future trends in claims' severity and judicial theories of liability as well as other factors such as inflation and are subject to the effect of future trends on claim settlement. These estimates are continually reviewed and adjusted as experience develops and new information becomes known. In light of present facts and current legal interpreta- tions, management believes that adequate provision has been made for loss and LAE reserves. However, establishment of appropriate reserves is an inherently uncertain process, and there can be no certainty that currently established reserves will prove adequate in light of subsequent actual experience. Future loss develop- ment could require reserves for prior periods to be increased, which would adversely impact earnings in future periods. Increases in claim payments are caused by a number of factors that vary with the individual types of policies written. Future costs of claims are projected based on historical trends adjusted for changes in underwriting standards, policy provi- sions, the anticipated effect of inflation and general economic trends. These anticipated trends are monitored based on actual development and are reflected in estimates of ultimate claim costs. The following table provides an analysis of changes in the estimated liability for losses and LAE over the past three years, net of all reinsurance activity, in accordance with GAAP: 10
1993 1992 1991 ---- ---- ---- (Dollars in millions) Balance at beginning of year.............. $763.5 $663.9 $601.7 ------ ------ ------ Provision for losses and LAE occurring in the current year........... 914.7 706.8 601.0 Net increase (decrease) in provision for claims occurring in prior years..... (57.8) (20.2) (21.7) ------- ------- ------- 856.9 686.6 579.3 ------- ------- ------- Payments for losses and LAE occurring during: Current year............................ 413.0 294.7 257.7 Prior years ............................ 345.1 292.3 259.4 ------ ------ ------ 758.1 587.0 517.1 ------ ------ ------ Loss and LAE reserves of subsidiaries purchased .............................. 54.0 -- -- ------ ------ ------ Balance at end of year.................... 916.3 763.5 663.9 Reinsurance receivable on unpaid losses and LAE at end of year (1)....... 45.1 -- -- ------ ------ ------ Balance at end of period, gross of reinsurance receivable (1) ............. $961.4 $763.5 $663.9 ------ ------ ------ ------ ------ ------ - ---------------------
(1) New accounting rules effective in 1993 require that insurance liabilities be reported without deducting reinsurance amounts. See Note 1 of Notes to Financial Statements. The decreases in the provision for claims occurring in prior years results from reductions in the estimated ultimate losses and LAE related to such claims. The difference between the liability for losses and LAE reported in the annual statements filed with the state insurance departments in accordance with statutory accounting principles and that reported in the consolidated financial statements that are incorporated herein by reference in accordance with GAAP is $45.1 million at December 31, 1993, which is equal to the reinsurance receivable on unpaid losses and LAE at December 31, 1993. The following table presents the development of the liabil- ity for losses and LAE net of reinsurance for 1989 (the year the Company acquired its first insurance subsidiary) through 1993. The top line of the table shows the estimated liability for unpaid losses and LAE recorded at the end of the indicated years. The remainder of the table presents development as percentages of the estimated liability. The development results from additional information and experience in subsequent years. The middle line shows a cumulative redundancy which represents the aggregate percentage decrease in the liability initially estimated. The lower portion of the table indicates the cumulative amounts paid as of successive periods as a percentage of the original liability.
1989 1990 1991 1992 1993 ---- ---- ---- ---- ---- (Dollars in millions) Liability for unpaid losses and LAE ...... $369.1 $601.7 $663.9 $763.5 $916.3 Liability re-estimated as of: One year later ......... 97.0% 96.5% 97.0% 92.4% Two years later ........ 89.7% 93.0% 93.4% Three years later ...... 85.7% 91.0% Four years later ....... 85.5% Cumulative Redundancy..... 14.5% 9.0% 6.6% 7.6% N/A ------ ------ ------ ------ ----- ------ ------ ------ ------ ----- Cumulative paid as of: One year later ......... 19.5% 43.0% 44.1% 40.6% Two years later ........ 49.1% 64.4% 64.5% Three years later ...... 64.6% 75.2% Four years later ....... 71.4%
11 The preceding table does not present accident or policy year development data. As indicated in the preceding table, the Company has developed redundancies for all periods presented. These redundancies were offset, in part, by deficiencies related to workers' compensation in the 1990 and 1991 accident years. Furthermore, in evaluating the re-estimated liability and cumula- tive redundancy, it should be noted that each percentage includes the effects of changes in amounts for prior periods. For exam- ple, a redundancy related to losses settled in 1993, but incurred in 1989, would be included in the re-estimated liability and cumulative redundancy percentage for each of the years 1989 through 1992. Conditions and trends that have affected develop- ment of the liability in the past may not necessarily exist in the future. Accordingly, it is not appropriate to extrapolate future redundancies based on this table. NON-INSURANCE OPERATIONS Businesses Divested and to be Divested -------------------------------------- On December 10, 1992, the Company announced its intention to pursue the divestiture of all of its wholly owned non-insurance subsidiaries, consisting of its defense services operations and five smaller diversified industrial businesses. On August 25, 1993, the Company sold its defense services operations, which provide diverse technology and engineering support to government agencies worldwide and manufacture various technical products, to Tracor, Inc. for approximately $94 million in cash, subject to post-closing working capital adjustments. On July 13, 1993, the Company sold its Engineering and Technical Services unit, which principally designs, engineers and installs satellite and microwave communications networks, for cash and notes approximating its $7 million book value. On September 22, 1993, the Company sold its NES unit, which provides consulting, engineering, systems design and other services to the nuclear energy and hazardous waste industries, for cash and notes appro- ximating its $1 million book value. On March 11, 1994, the Company sold its Sperry Rail unit, which provides track testing services for the railroad industry, for approximately $9.8 million in cash. The Company also is pursuing the sale of the following two businesses: The Company's Apparatus unit manufactures aerial lift trucks and utility bodies (mobile tools) under the Telsta and Holan product names for the telecommunications, electric utility and cable television industries which are used for installing and maintaining aerial cable. This unit also manufactures telecommunications cable pressurization and safety equipment under the Puregas and Mopeco product names for the telecommunications and power utility industries. The Company's Marathon Power Technologies Company unit manufactures vented-cell nickel-cadmium batteries which are used primarily for private, commercial and military aircraft and other heavy-duty starting applications and also as a standby power source. This unit also manufactures sealed- cell nickel-cadmium batteries, as well as static inverters for aircraft electrical systems. The Company has reached agreements in principle for the sale of these two businesses for an aggregate of approximately $36 million. See Note 2 of Notes to Financial Statements for information with respect to the revenues, operating income and carrying value of the businesses sold and to be sold. Other ----- Contract Drilling. The Company owns approximately 53.9% of the common stock of DI Industries, Inc. ("DI"), which is engaged primarily in the business of providing onshore contract drilling and well workover services to firms in the oil and gas industry. DI owns or operates 97 drilling and workover rigs located in 12 states, four rigs in Argentina and one rig in Guatemala. Drill- ing operations are conducted primarily in Texas, Louisiana, Oklahoma, Arkansas, Ohio, western Pennsylvania, New York, Michi- gan, Argentina and Guatemala. Well workover services are provid- ed in Montana, Utah, North Dakota and Colorado. Customers include large and small independent producers and major oil companies. DI also engages in commercial drilling activities, generally consisting of drilling shafts for underground tunneling projects and caissons for highway and bridge projects, and heavy equipment sales and repair. DI also engages in oil and gas exploration, production and development, primarily in Oklahoma, Texas and Louisiana. 12 Oil and Gas Properties. The Company owns certain oil and gas properties, located primarily in Oklahoma and Texas. Coal Properties. The Company and a subsidiary own fee interests in coal properties in Illinois, Ohio and Pennsylvania. Most of these properties are leased at various royalty rates to coal mining companies under long-term arrangements, including fixed-term leases with renewal options and exhaustion leases. The Company does not produce, prepare or sell coal or conduct mining operations. Eight mines operated by lessees of the leased coal proper- ties, and carried at approximately $3.4 million, supply steam coal for electrical utilities or industrial customers. The future level of royalties above certain minimum and advance royalties from the reserves presently under lease will depend upon the rate of mining, the change in certain price indices and, in some instances, the sales price of the coal. During 1993, the leased coal properties produced royalties of $6.7 million. GCT and Related Development Rights. Subsidiaries of the Company own GCT in New York City and rights (the "Development Rights") to develop or transfer approximately 1.7 million square feet of floor space in the GCT area. The Development Rights are derived from such subsidiaries' ownership of the land upon which GCT is constructed. Utilization or transfer of such rights requires the approval of certain New York City agencies. If required governmental approvals are obtained, the floor space may be developed on the GCT site, contiguous sites or certain parcels of land in the vicinity, in each case subject to the requirements of applicable law. In 1972, the Company leased GCT (but not the Development Rights) and its related Harlem and Hudson rail lines to the MTA for an initial term expiring in 2032, which is subject to renewal options. In December 1993, the Company reached an agreement in principle with the MTA that provides for an extension of the end of the Company's lease to the MTA of GCT and the Harlem and Hudson commuter rail lines from the year 2032 to 2274. It also provides for the grant of an option to the MTA to purchase the leased property in 25 years. In return, the Company would receive consideration having an estimated present value of $55 million, consisting principally of a $5 million cash payment and an increase in future lease rental payments to the Company of approximately $2 million per year. The agreement in principle also calls for the Company to relinquish its right to construct an office building over GCT. However, the Company will retain its rights to transfer the Development Rights from GCT to other sites in the surrounding area. In November 1983, the Company and two of its subsidiaries entered into an agreement (the "Agreement") with a partnership controlled by The First Boston Corporation (the "Partnership") for the sale by the two subsidiaries to the Partnership of 1.5 million square feet of Development Rights for use on one or more sites neighboring GCT. If a closing were to occur under the Agreement, the purchase price to be received by the two subsid- iaries and the consideration to be received by the Company for release of its leasehold interest in the Development Rights could, under the applicable contractual formula, exceed $95 million. Consummation of the transaction is conditioned on receipt by the Partnership of a special permit from the New York City Planning Commission (the "CPC") to transfer at least a majority of the Development Rights under contract to a site owned by the Partnership in the vicinity of GCT. In August 1989, the CPC denied the Partnership's application for such a permit, whereupon the Partnership brought a lawsuit in New York State Supreme Court challenging the denial. In August 1991, the Court dismissed the lawsuit on a summary judgment motion. In May 1993, the Appellate Division of the New York State Supreme Court af- firmed the dismissal. The New York State Court of Appeals refused to grant leave for further appeal. In February 1994, the Partnership petitioned the U.S. Supreme Court for a writ of certiorari to review the case. It is not possible at this time to predict whether the Partnership's lawsuit will be successful. The Agreement terminates by its terms one year after final resolution of the lawsuit if a special permit for the transfer of Development Rights to the Partnership's site has not theretofore been issued by the CPC. Real Estate Operations. Subsidiaries of the Company own certain land and rights associated with the potential development of areas adjacent to, and above, certain rail lines in the New York City and Westchester County, New York areas. Scarsdale, New York has designated a subsidiary of the Company as preferred developer for the construction of a residential and retail use project adjacent to the Scarsdale commuter railroad station. The agreement in principle with the MTA discussed above under "GCT and Related Development Rights" would transfer all such develop- ment rights to the MTA, except those related to the proposed Scarsdale project. 13 The Company also has a program for the sale of real estate assets that relate to its former rail operations and other surplus land and manufacturing facilities. Management Company. Buckeye Management Company, a subsid- iary of the Company, manages as the sole general partner of, and owns a 1% interest in, Buckeye Partners, L.P., which owns and operates refined petroleum products and crude oil pipelines in the northeast and midwestern United States. GENERAL Compliance with federal, state and local environmental protection laws during 1993 had no material effect upon the Company's capital expenditures, earnings or competitive position, and management anticipates no such material effects resulting from compliance during 1994. However, certain claims are pending against the Company and certain of its subsidiaries relating to the generation, disposal or release into the environment of allegedly hazardous substances, as described below under Item 3--"Legal Proceedings". EMPLOYEES As of December 31, 1993, the approximate number of employees of the Company and its consolidated subsidiaries was: Insurance ....................................... 3,000 Non-Insurance Operations ........................ 2,300 Corporate........................................ 100 ----- Total ........................................... 5,400 ----- ----- Approximately 550 of these employees, all in the Non-Insur- ance Operations, are covered by collective bargaining agreements. ITEM 2. PROPERTIES The Company's operations are conducted principally within the United States, and the Company believes that its principal facilities, all of which are owned unless otherwise noted, are maintained in good operating condition and are adequate for the present needs of its operations. The principal facilities by reportable industry segment and other operations are as follows: INSURANCE Non-Standard Automobile ----------------------- The NSA Group's principal offices are leased facilities located in Birmingham, Alabama (57,000 square feet), Atlanta (78,000 square feet) and Norcross (58,000 square feet), Georgia and Independence, Ohio (29,000 square feet). These leases expire in January 1995, May 1998, August 2000 and March 1998, respec- tively. Workers' Compensation --------------------- Republic Indemnity leases office space in Encino (72,000 square feet), San Francisco (43,000 square feet), San Diego (11,000 square feet) and Sacramento (9,000 square feet), Califor- nia, and Phoenix, Arizona (2,000 square feet) under agreements expiring in May 1996, March 2001, December 1998, July 1996 and September 1994, respectively. NON-INSURANCE OPERATIONS Businesses to be Divested ------------------------- The Company's Apparatus unit operates four plants in four states, which have an aggregate floor space of approximately 301,000 square feet. Two of these four plants (aggregating 41,000 square feet) are leased under leases expiring in July 1996 and January 1997, respectively, and both have renewal options. 14 Power Tech owns 50 acres in Waco, Texas on which it has a 200,000 square-foot battery manufacturing facility and a 15,000 square-foot office facility. Contract Drilling ----------------- At March 15, 1994, DI's contract oil and gas well drilling fleet consisted of 60 rigs (21 active) based in Texas, Louisiana, Oklahoma, Arkansas, Ohio, western Pennsylvania, New York, Michi- gan, Argentina and Guatemala. At March 15, 1994, the well workover service rig fleet totaled 24 rigs (18 active) based in Montana, Utah, North Dakota and Colorado. In addition, at March 15, 1994, DI owned 3 and operated 13 commercial drilling rigs under a cash flow sharing agreement, 6 of which were active. Also, at March 15, 1994, 2 rigs were held for resale. Oil and Gas Properties ---------------------- All of the Company's oil and gas properties are located in the United States. As of December 31, 1993, the Company had interests in 73 gross (36 net) producing oil wells and 4 gross (1 net) producing gas wells and 6,160 gross (2,965 net) developed and 23,246 gross (5,601 net) undeveloped acres. As of March 31, 1993, DI had interests in 238 gross (9 net) producing oil wells and 574 gross (14.7 net) producing gas wells and 179,539 gross (5,648 net) developed and 335 net undeveloped acres. Coal Properties --------------- The Company and a subsidiary own fee interests in approxi- mately 161,000 acres of coal properties in Illinois, Ohio and Pennsylvania. Approximately 105,000 acres of these properties remain leased at various royalty rates to coal mining companies under long-term arrangements, including fixed-term leases with renewal options and exhaustion leases. GCT and Related Development Rights ---------------------------------- Subsidiaries of the Company own GCT and rights to develop floor space in the Grand Central Terminal area of New York City, as discussed under Item 1--"Description of Businesses--Non- Insurance Operations--GCT and Related Development Rights". Real Estate Operations ---------------------- The Company's real estate inventory at December 31,1993 included approximately 20,000 acres of real estate (including approximately 80 acres with surplus manufacturing facilities) spread throughout 13 states. ITEM 3. LEGAL PROCEEDINGS The U.S. Government and other parties have asserted claims against the Company as a potentially responsible party for clean-up costs ("Clean-up Costs") under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") at a Superfund site at the Paoli, Pennsylvania railyard ("Paoli Yard"), formerly owned and operated by the Company's prede- cessor, Penn Central Transportation Company ("PCTC"). A Record of Decision was issued by the U.S. Environmental Protection Agency on July 21, 1992 presenting a final selected remedial action for the Paoli Yard in accordance with CERCLA having an estimated cost of approximately $28.3 million. This figure is an estimate of the cost to remediate the entire yard and off-site property to a level acceptable to the U.S. EPA. In March 1992, the Company filed a lawsuit in the Special Court created by the Regional Rail Reorganization Act (the "Rail Act") seeking to enjoin the U.S. Government, Consolidated Rail Corporation ("Con- rail") and other parties from prosecuting claims against the Company for the Clean-up Costs on the grounds that the Paoli Yard environmental claims are barred by: (1) the terms by which the Paoli Yard was transferred by PCTC to Conrail "as is" in 1976 pursuant to the Rail Act; (2) the 1980 settlement of the Valua- tion Case proceedings to determine compensation to be paid by the U.S. Government for the railroad properties transferred by PCTC pursuant to the Rail Act; and (3) the U.S. Constitution. On February 9, 1993, the Special Court denied the U.S. Government's motion to dismiss the Company's complaint for lack of subject matter jurisdiction, holding that it had exclusive jurisdiction to decide these issues. On April 30, 1993, the U.S. Government's separate action in U.S. District Court to recover Clean-up Costs from the Company was stayed pending final judgment by the Special Court in the lawsuit filed by the Company. The parties have filed cross motions for summary judgment, which were argued to 15 the Special Court on February 23, 1994 and are now under submis- sion. In addition to the Special Court litigation, the Company believes that it has other substantial defenses to claims for Clean-up Costs at the Paoli Yard, including its position that other parties are responsible for substantial percentages of such Clean-up Costs by virtue of their operation of electrified rail- road cars at the Paoli Yard that discharged PCB's at higher levels than discharged by cars operated by PCTC. The Company also intends to make claims against certain insurance carriers for reimbursement of any Clean-up Costs that the Company may incur. The Company has not established any accrual for potential liability for Clean-up Costs at the Paoli Yard. There are certain other claims involving the Company and certain of its subsidiaries, including claims relating to the generation, disposal or release into the environment of allegedly hazardous substances and pre-reorganization personal injury claims, that allege or involve amounts that are potentially substantial in the aggregate. The Paoli Yard litigation and the preponderance of the other claims arose out of railroad operations disposed of by PCTC prior to its 1978 reorganization and, accordingly, any ultimate liabil- ity resulting therefrom in excess of previously established loss accruals would be attributable to such pre-reorganization events and circumstances. In accordance with the Company's reorganiza- tion accounting policy, any such ultimate liability will reduce the Company's capital surplus and shareholders' equity, but will not be charged to income. The Company believes that its maximum aggregate potential exposure at December 31, 1993 with respect to the foregoing environmental claims (other than Paoli Yard), net of related loss accruals, was approximately $15 million for claims arising out of pre-reorganization operations and in the range of $1 million to $4 million for claims arising out of post-reorganization opera- tions (which range depends upon the method of remediation, if any, required). The Company believes that it has meritorious defenses in such matters, including its position that other parties are responsible for substantial percentages of such amounts claimed and, in the case of the post-reorganization matter referred to above, its belief that the relevant regulatory authority will permit remediation to be deferred until there is a change in the use of the facility which the Company believes is unlikely. In management's opinion, the outcome of the foregoing claims will not, individually or in the aggregate, have a material adverse effect on the financial condition or results of opera- tions of the Company. In making this assessment, management has taken into account previously established loss accruals in its financial statements and probable recoveries from insurance carriers and other third parties. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. EXECUTIVE OFFICERS OF THE REGISTRANT The persons named below are executive officers of the Company who have been elected to serve in the capacities indicat- ed at the pleasure of the Company's Board of Directors. NAME, AGE AND PRINCIPAL BUSINESS AFFILIATIONS POSITIONS WITH THE COMPANY DURING PAST FIVE YEARS - -------------------------- ------------------------------- Carl H. Lindner, 74 Mr. Lindner has been Chairman Chairman of the Board and of the Board and Chief Execu- Chief Executive Officer tive Officer of the Company for more than five years. During the past five years, Mr. Lindner has been Chairman of the Board and Chief Executive Officer of American Financial Corporation, a diversified financial ser- vices company. He is also a director of American Annuity Group, Inc., American Financial Enterprises, Inc., Chiquita Brands International, Inc., General Cable Corporation and Great American Communications Company. Mr. Lindner is Carl H. Lindner III's father. 16 NAME, AGE AND PRINCIPAL BUSINESS AFFILIATIONS POSITIONS WITH THE COMPANY DURING PAST FIVE YEARS - -------------------------- ------------------------------- Carl H. Lindner III, 40 Mr. Lindner was elected Presi- President and Chief Operating dent and Chief Operating Officer and a Director Officer of the Company in February 1992. Prior thereto, he had served as Vice Chairman of the Board of the Company since October 1991. During the past five years, Mr. Lindner has been President of Great American Insurance Company, a property and casualty insurance company owned by American Financial Corporation. Richard M. Haverland, 53 Mr. Haverland was elected Executive Vice President-- Executive Vice President-- Insurance Group and a Insurance Group of the Company Director in February 1991. Prior thereto, Mr. Haverland was Executive Vice President of Great American Holding Corpora- tion, a holding company subsid- iary of American Financial Corporation, a diversified financial services company (April 1984 to February 1991). Neil M. Hahl, 45 Mr. Hahl has been Senior Vice Senior Vice President President of the Company for and a Director more than five years. Mr. Hahl is a director of Buckeye Management Company. Robert W. Olson, 48 Mr. Olson has been Senior Vice Senior Vice President, President, General Counsel and General Counsel and Secretary of the Company for Secretary and a Director more than five years. Mr. Olson is a director of DI Industries, Inc. Robert F. Amory, 48 Mr. Amory was elected Vice Vice President and Controller President of the Company in December 1989 and Controller in September 1986. R. Bruce Brumbaugh, 41 Mr. Brumbaugh was elected Vice Vice President -- Risk President -- Risk Management of Management the Company in February 1990. Prior thereto, Mr. Brumbaugh was Staff Vice President--Risk Management (June 1987 to February 1990). Richard A. Carlson, 42 Mr. Carlson was elected Vice Vice President and President in February 1994 and, Assistant General Counsel prior thereto, had been Staff Vice President since January 1990 and Assistant General Counsel since April 1988. Michael L. Cioffi, 41 Mr. Cioffi was elected Vice Vice President and President in February 1993 and, Assistant General Counsel prior thereto, had been Staff Vice President since January 1990 and Assistant General Counsel since February 1988. Robert E. Gill, 47 Mr. Gill was elected Vice Vice President--Taxes President--Taxes of the Company in February 1990. Prior thereto, Mr. Gill was Staff Vice President--Taxes (July 1986 to February 1990). Philip A. Hagel, 49 Mr. Hagel was elected Vice Vice President and Treasurer President of the Company in February 1990 and Treasurer in January 1988. Mr. Hagel is a director of DI Industries, Inc. Michael D. Mauer, 41 Mr. Mauer was elected Vice Vice President President of the Company in February 1990. Prior thereto, he was Staff Vice President-- General Auditor and Adminis- trative Services (January 1987 to February 1990). 17 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS "Dividend Policy and Stock Market Prices" on page 47 of the Company's 1993 Annual Report to Shareholders is incorporated herein by reference. ITEM 6. SELECTED FINANCIAL DATA "Selected Consolidated Financial Data" on page 25 of the Company's 1993 Annual Report to Shareholders is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 15 through 24 of the Company's 1993 Annual Report to Shareholders is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The consolidated financial statements of the Company and its subsidiaries, included on pages 26 through 44 of the Company's 1993 Annual Report to Shareholders, and "Quarterly Financial Data", included on page 46 of such Annual Report, are incorporated herein by refer- ence. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Except to the extent included in Part I under the caption "Executive Officers of the Registrant", the information called for by Item 10 is incorporated by reference to the definitive proxy statement involving the election of directors which the Company intends to file with the Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 not later than 120 days after December 31, 1993. ITEM 11. EXECUTIVE COMPENSATION The information called for by Item 11 is incorporated by reference to the definitive proxy statement involv- ing the election of directors which the Company intends to file with the Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 not later than 120 days after December 31, 1993. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information called for by Item 12 is incorporated by reference to the definitive proxy statement involv- ing the election of directors which the Company intends to file with the Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 not later than 120 days after December 31, 1993. American Financial Corporation ("AFC") beneficially owns approximately 41% of the outstanding Common Stock of the Company and has substantial influence over the management and operations of the Company. Carl H. Lindner, Chairman of the Board and Chief Executive Officer of the Company, is Chairman of the Board and Chief Executive Officer of AFC. All of AFC's out- standing Common Stock is owned by Mr. Lindner, members of his family and trusts for their benefit. AFC and Mr. Lindner may be deemed to be controlling persons of the Company. See "Executive Officers of the Regis- trant" in Part I. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information called for by Item 13 is incorporated by reference to the definitive proxy statement involv- ing the election of directors which the Company intends to file with the Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 not later than 120 days after December 31, 1993. 18 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) The following documents are filed as a part of this report: (1) and (2) Financial Statements and Financial State- ment Schedules--see Index to Financial Statements and Financial Statement Schedules appearing on Page F-1. (3) Exhibits: EXHIBIT NUMBER (REFERENCED TO ITEM 601 OF REGULATION S-K) --------------- (3) (i) ---Amended and Restated Articles of Incor- poration of the Company, as amended effec- tive March 25, 1994. (ii) ---By-Laws of the Company, as amended * July 30, 1992, incorporated by reference to Exhibit (3)(iii) to the Company's Annual Report on Form 10-K for 1992. (4)(i) ---Order No. 3708 of the United States * District Court for the Eastern District of Pennsylvania in In the Matter of Penn Central Transportation Company, Debtor, Bankruptcy No. 70-347 dated August 17, 1978 directing the consummation of the Plan of Reorganization for Penn Central Transportation Company, incorporated by reference to Exhibit 4 to Form 8-K Current Report of Penn Central Transportation Company for August 1978. (4)(ii) (a) ---Certain instruments with respect to long-term debt of subsidiaries of the Company which do not relate to debt exceeding 10% of the total assets of the Company and its consolidated sub- sidiaries are omitted pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, 17 C.F.R. Section 229.601. The Company hereby agrees to furnish supplementally to the Securities and Exchange Commission a copy of each such instrument upon request. (b) ---(i) Indenture dated as of August 1, * 1989 between the Company and Morgan Guaranty Trust Company of New York, as Trustee, regarding the Company's Sub- ordinated Debt Securities (the "Indenture"), incorporated by reference to Exhibit 4.1 to the Company's Form 8-K Current Report dated August 10, 1989. ---(ii) Instrument of Resignation of Trustee * and Appointment and Acceptance of Successor Trustee and Appointment of Agent dated as of November 15, 1991 among the Company, Morgan Guaranty Trust Company of New York as Resigning Trustee and Star Bank, N.A. as Successor Trustee, incorporated by reference to Exhibit (4)(ii)(d)(ii) to the Company's Annual Report on Form 10-K for 1991. ---(iii) Officer's Certificate Pursuant to * Sections 102 and 301 of the Indenture relating to authentication and designation of the Company's 9-3/4% Subordinated Notes due August 1, 1999, to which is attached the Form of Note, incorporated by reference to Exhibit 4.2 to the Company's Form 8-K Current Report dated August 10, 1989. - --------------- * Asterisk indicates an exhibit previously filed with the Securities and Exchange Commission incorporated herein by reference. 19 EXHIBIT NUMBER (REFERENCED TO ITEM 601 OF REGULATION S-K) --------------- ---(iv) Officer's Certificate Pursuant to * Sections 102 and 301 of the Indenture relating to authentication and designation of the Company's 10-5/8% Subordinated Notes due April 15, 2000, to which is attached the Form of Note, incorporated by reference to Exhibit 4.1 to the Company's Form 8-K Current Report dated April 19, 1990. ---(v) Officer's Certificate Pursuant to * Sections 102 and 301 of the Indenture relating to authentication and designation of the Company's 10-7/8% Subordinated Notes due May 1, 2011, to which is attached the Form of Note, incorporated by reference to Exhibit 4.1 to the Company's Form 8 amendment dated May 8, 1991 to the Com- pany's Form 8-K Current Report dated May 7, 1991. (10)(i) (a) ---(i) Intercompany Agreement, dated June 9, * 1992, by and between the Company and General Cable Corporation, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 9, 1992. ---(ii) Subordinated Promissory Note of * General Cable Corporation due 2007 in the principal amount of $255,000,000 payable to the Company, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 30, 1992. (b) ---Stock Purchase Agreement, dated as of * June 10, 1993, among the Company, PCC Technical Industries, Inc. and Tracor, Inc., incorporated by reference to Exhibit (99) to the Company's Current Report on Form 8-K dated May 26, 1993. The following Exhibits (10)(iii)(a) through (10)(iii)(g) are compensatory plans and arrangements in which directors or execu- tive officers participate: (iii) (a) ---(i) The Company's Stock Option Plan, as * amended March 25, 1992, incorporated by reference to Exhibit (10)(iii)(a)(i) to the Company's Annual Report on Form 10-K for 1992. ---(ii) Amendment to the Company's Stock * Option Plan adopted by the Company's Board of Directors on March 24, 1993, incorporated by reference to Exhibit (10)(iii)(a)(ii) to the Company's Annual Report on Form 10-K for 1992. ---(iii) Forms of stock option agreements * used to evidence options granted under the Company's Stock Option Plan to officers and directors of the Company, incorporated by reference to Exhibit (10)(iii)(a)(iii) to the Company's Annual Report on Form 10-K for 1992. ---(iv) The Company's Stock Option Loan * Program, as amended February 8, 1991, incorporated by reference to Exhibit (10)(iii)(a)(v) to the Company's Annual Report on Form 10-K for 1990. ---(v) The Company's 1992 Spin-Off Stock * Option Plan adopted by the Company's Board of Directors on March 25, 1992, incorporated by reference to Exhibit (10)(iii)(a)(vi) to the Company's Annual Report on Form 10-K for 1991. - --------------- * Asterisk indicates an exhibit previously filed with the Securities and Exchange Commission and incorporated herein by reference. 20 EXHIBIT NUMBER (REFERENCED TO ITEM 601 OF REGULATION S-K) --------------- (b) ---The Company's Annual Incentive Compen- * sation Plan, as amended February 12, 1992, incorporated by reference to Exhibit (10)(iii)(b) to the Company's Annual Report on Form 10-K for 1991. (c) ---Description of the Company's retirement * program for outside directors, as adopted by the Company's Board of Directors on March 23, 1983, incorporated by reference to Exhibit (10)(iii)(i) to the Company's Annual Report on Form 10-K for 1982. (d) ---The Company's Employee Stock Redemption * Program, as adopted by the Company's Board of Directors on March 28, 1985, incorporated by reference to Exhibit (10)(iii)(j) to the Company's Annual Report on Form 10-K for 1984. (e) ---(i) Severance Agreement dated March 29, * 1987 between the Company and Alfred W. Martinelli, a director of the Company, incorporated by reference to Exhibit (10)(iii)(a)(i) to the Company's Form 10-Q Quarterly Report for the Quarter Ended March 31, 1987. ---(ii) Consulting Agreement dated as of * March 29, 1987 between the Company and Alfred W. Martinelli, incorporated by reference to Exhibit (10)(iii)(a)(ii) to the Company's Form 10-Q Quarterly Report for the Quarter Ended March 31, 1987. ---(iii) Letter agreement amending the fore- * going Consulting and Severance Agreements dated December 9, 1991 between the Company and Alfred W. Martinelli, incorporated by reference to Exhibit (10)(iii)(e)(iii) to the Company's Annual Report on Form 10-K for 1991. (f) ---Letters dated April 9, 1987 from the * Company to each of Neil M. Hahl and Robert W. Olson, officers of the Company, with respect to severance arrangements, as supplemented by letters dated June 26, 1987 to each such officer, incorporated by reference to Exhibit (10)(iii)(a) to the Company's Form 10-Q Quarterly Report for the Quarter Ended June 30, 1987. (g) ---(i) Excess of Loss Agreement, effective * March 31, 1988, between Republic Indemnity Company of America and Great American Insurance Company, incorporated by refer- ence to Exhibit (g)(1) to Amendment No. 1 to Schedule 13E-3, dated January 17, 1989, relating to Republic American Corporation filed by Republic American Corporation, the Company, RAWC Acquisition Corp., American Financial Corporation and Carl H. Lindner (the "Schedule 13E-3 Amendment"). ---(ii) First Amendment to Excess of Loss * Agreement, effective March 31, 1988, between Republic Indemnity Company of America and Great American Insurance Company, incorporated by reference to Exhibit (g)(2) to the Schedule 13E-3 Amendment. (h) ---(i) Business Assumption Agreement, * effective as of December 31, 1990, between Stonewall Insurance Company and Dixie Insurance Company, incorporated by reference to Exhibit (10)(iii)(o)(i) to the Company's Annual Report on Form 10-K for 1990. - --------------- * Asterisk indicates an exhibit previously filed with the Securities and Exchange Commission and incorporated herein by reference. 21 EXHIBIT NUMBER (REFERENCED TO ITEM 601 OF REGULATION S-K) --------------- ---(ii) Quota Share Agreements, effective * December 31, 1990, between Stonewall Insurance Company and Dixie Insurance Company, incorporated by reference to Exhibit (10)(iii)(o)(ii) to the Company's Annual Report on Form 10-K for 1990. ---(iii) Management Agreement, effective as * of January 1, 1991, by and between Dixie Insurance Company and Stonewall Insurance Company, incorporated by reference to Exhibit (10)(iii)(o)(iii) to the Company's Annual Report on Form 10-K for 1990. (i) ---Excess of Loss Agreements, effective * December 31, 1990, between Great American Insurance Company and each of Atlanta Casualty Company, Dixie Insurance Company and Windsor Insurance Company, incorporated by reference to Exhibit (10)(iii)(p) to the Company's Annual Report on Form 10-K for 1990. (j) ---Premium Payment Agreement, effective as * of January 1, 1991, by and between Great American Insurance Company and the Company, incorporated by reference to Exhibit (10)(iii)(q) to the Company's Annual Report on Form 10-K for 1990. (11) ---Supplemental information regarding computa- tions of net income per share amounts. (12) ---Calculation of ratio of earnings to fixed charges. (13) ---Portions of the Company's 1993 Annual Report to Shareholders. (21) ---List of subsidiaries of the Company. (23) ---Consent of Deloitte & Touche. (28) ---Information from reports provided to state regulatory authorities. (b) Reports on Form 8-K filed during the quarter ended December 31, 1993: None - --------------- * Asterisk indicates an exhibit previously filed with the Securities and Exchange Commission and incorporated herein by reference. 22 For the purposes of complying with the amendments to the rules governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned registrant hereby under- takes as follows, which undertaking shall be incorporated by reference into registrant's Registration Statement on Form S-8 No. 2-81422 (filed January 20, 1983), registrant's Post- Effective Amendment No. 1 to Registration Statement on Form S-8 No. 2-72453 (filed December 23, 1983), registrant's Registration Statement on Form S-8 No. 33-34871 (filed May 11, 1990) and registrant's Registration Statement on Form S-8 No. 33-48700 (filed June 17, 1992): Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to direc- tors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or contro- lling person in connection with the securities being regis- tered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling prece- dent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 23 SIGNATURES PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THERE- UNTO DULY AUTHORIZED. AMERICAN PREMIER UNDERWRITERS, INC. (Registrant) By Carl H. Lindner --------------------------------- Carl H. Lindner Chairman of the Board and Chief Executive Officer Date: March 29, 1994 PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED. Date: March 29, 1994 By Hugh F. Culverhouse -------------------------------- Hugh F. Culverhouse Director Date: March 29, 1994 By Theodore H. Emmerich ------------------------------ Theodore H. Emmerich Director Date: March 29, 1994 By James E. Evans -------------------------------- James E. Evans Director Date: March 29, 1994 By Neil M. Hahl -------------------------------- Neil M. Hahl Senior Vice President and a Director (Principal Financial Officer) Date: March 29, 1994 By Richard M. Haverland -------------------------------- Richard M. Haverland Director Date: March 29, 1994 By Thomas M. Hunt -------------------------------- Thomas M. Hunt Director 24 PAGE Date: March 29, 1994 By Carl H. Lindner -------------------------------- Carl H. Lindner Chairman of the Board and Chief Executive Officer and a Director Date: March 29, 1994 By Carl H. Lindner III -------------------------------- Carl H. Lindner III Director Date: March 29, 1994 By S. Craig Lindner -------------------------------- S. Craig Lindner Director Date: March 29, 1994 By Alfred W. Martinelli -------------------------------- Alfred W. Martinelli Director Date: March 29, 1994 By Robert W. Olson -------------------------------- Robert W. Olson Director Date: March 29, 1994 By Robert F. Amory -------------------------------- Robert F. Amory Vice President and Controller (Principal Accounting Officer) 25 AMERICAN PREMIER UNDERWRITERS, INC. INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES PAGE NUMBER ----------- Independent Auditors' Report............................... F-2 American Premier Underwriters, Inc. and Consolidated Subsidiaries: Statement of Income--For the years ended December 31, 1993, 1992 and 1991............................ * Balance Sheet--December 31, 1993 and 1992............ * Statement of Cash Flows--For the years ended December 31, 1993, 1992 and 1991................... * Notes to Financial Statements........................ * Schedule II--Amounts Receivable from Related Parties and Underwriters, Promoters and Employees Other than Related Parties......................... S-1 Schedule III--Condensed Financial Information of Registrant......................................... S-3 Schedule VII--Guarantees of Securities and Other Obligations of Other Issuers....................... S-5 Schedule VIII--Valuation and Qualifying Accounts........................................... S-5 Schedule X--Supplemental Information Concerning Property-Casualty Insurance Operations............. S-6 Schedules other than those listed above are omitted because they are either not applicable or not required or the information required is included in the consolidated financial statements or notes thereto. - ------------------- * Incorporated by reference to the Company's 1993 Annual Report to Shareholders. F-1 INDEPENDENT AUDITORS' REPORT American Premier Underwriters, Inc.: We have audited the financial statements and the financial statement schedules of American Premier Underwriters, Inc. and Consolidated Subsidiaries listed in the accompanying Index to Financial Statements and Financial Statement Schedules. These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and finan- cial statement schedules based on our audits. We conducted our audits in accordance with generally accept- ed auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of American Premier Underwriters, Inc. and Consolidated Subsidiaries at December 31, 1993 and 1992 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1993 in conformity with generally accepted accounting princi- ples. Also, in our opinion, such financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information shown therein. As discussed in Note 1 to the financial statements, in 1992 the Company changed its method of accounting for income taxes to conform with Statement of Financial Accounting Standards No. 109. Deloitte & Touche Cincinnati, Ohio February 16, 1994 (March 25, 1994 with respect to the change of the Company's name as discussed in Note 1 to the financial statements) F-2 SCHEDULE II AMERICAN PREMIER UNDERWRITERS, INC. AND CONSOLIDATED SUBSIDIARIES Amounts Receivable from Related Parties and Underwriters, Promoters and Employees Other than Related Parties For the Years Ended December 31, 1993, 1992 and 1991 (Dollars in Thousands)
Balance at Beginning of Deductions End of Period Period Amounts Amounts Name of Debtor Current Noncurrent Additions Collected Written-Off Other Current Noncurrent Year ended December 31, 1993: Officers and employees of the Company or its Subsidiaries and related parties: American Annuity Group, Inc. (a) $ 1,835 $ 724 $ 1,000 $ 1,559 General Cable Corporation (b)... $255,000 $255,000 General Cable Corporation (c)... 36,900 36,900 0 General Cable Corporation (d)... 31,812 31,812 R.E. Gill (e)................... 117 117 N.M. Hahl (e)................... 123 161 284 J.M. Kampf (f).................. 332 332 0 A.W. Martinelli (g)............. 8,906 8,906 R.W. Olson (e).................. 260 215 32 443 S.Stavenhagen (h)............... 100 100 0 Year ended December 31, 1992: Officers and employees of the Company or its Subsidiaries and related parties: American Annuity Group, Inc. (a) $ 1,231 $ 1,104 $ 500 $ 1,835 M.A. Cramer, Jr. (i)............ 489 489 $ 0 General Cable Corporation (b)... 255,000 255,000 General Cable Corporation (c)... 36,900 36,900 R.E. Gill (e)................... 117 117 N.M. Hahl (e)................... 123 123 J.M. Kampf (j).................. 403 734 805 332 A.W. Martinelli (e,g,k)......... 9,697 1,842 2,633 8,906 R.W. Olson (e).................. 170 118 28 260 S.Stavenhagen (h)............... 101 1 100 S-1 Year ended December 31, 1991: Officers and employees of the Company or its Subsidiaries and related parties: R.F. Amory (h,l)................ $ 293 $ 2 $ 291 $ 0 J.A. Anderson (h,l)............. 358 2 356 0 R.B. Brumbaugh (h,l)............ 181 2 179 0 R.W. Bubak (h,l)................ 168 168 0 M.A. Cramer, Jr. (i)............ $ 489 489 R.E. Gill (h,l)................. 415 3 412 0 P.A. Hagel (h,l)................ 247 2 245 0 N.M. Hahl (h,l)................. 558 4 554 0 F.R. Holt (h,l)................. 334 2 332 0 J.M. Kampf (i).................. 403 403 G.B. Kenny (h,l)................ 473 2 471 0 A.W. Martinelli (e,g)........... 9,649 48 9,697 M.D. Mauer (h,l)................ 147 147 0 P.S. Meyers (h)................. 174 174 0 R.W. Olson (e,h,l).............. 402 14 51 195 170 R.J. Siverd (h,l)............... 346 2 344 0 W.J. Smith (h,l)................ 103 1 102 0 S.Stavenhagen (h)............... 102 1 101 D.H. Street (h,l)............... 593 4 589 0 N.G. Tsacalis (h,l)............. 154 1 153 0 A.N. Watson (h,l)............... 123 1 122 0
__________ (a) Non-interest bearing amounts due to the Company, representing payments made by the Company on behalf of the successor of a previously spun-off subsidiary of the Company. (b) Subordinated note of previously spun-off company, bearing interest at 9.98 percent per annum, due September 30, 2007 (see Note 2 of Notes to Financial Statements). (c) Short-term note of previously spun-off company. (d) Interest notes received in lieu of cash interest payments on the subordinated note referred to in (b) above, paid in full on February 14, 1994. (e) Promissory notes of participants in the Company's Stock Option Loan Program delivered in payment of up to 95 percent of the purchase price for the Company's Common Stock purchased upon the exercise of stock options, secured by the stock purchased, bearing interest at rates ranging from 3.65 to 7.06 percent per annum. (f) Individual ceased to be an employee or a related party during the year. (g) Includes recourse promissory notes of participants in the Company's Career Share Purchase Plan delivered in payment of up to 95 percent of the purchase price for Career Shares (see Note 9 of Notes to Financial Statements), secured by the Career Shares purchased, bearing interest at 9 percent per annum and payable not later than ten years after the purchase date. (h) Mortgage notes receivable, incidental to employees' relocations, secured by homesites. Principal and interest are payable monthly based on amortization schedules which range from 15 to 30 years and carry annual interest rates ranging from 9 1/2 to 9 3/4 percent. (i) Non-interest bearing temporary home loans, incidental to employees' relocations, payable within one year of the date of the loans. (j) Note receivable, incidental to employee relocation, bearing interest at 6.49 percent per annum. Principal and interest are payable on or before June 30, 2000. (k) Promissory notes referred to in (e) above were collected during 1992. (l) Mortgage note referred to in (h) above was sold during 1991 in the secondary market. S-2 SCHEDULE III AMERICAN PREMIER UNDERWRITERS, INC. Condensed Financial Information of Registrant (Note 1) (In Millions) COMBINED CONDENSED INCOME STATEMENT
For the Years Ended December 31, REVENUES 1993 1992 1991 Equity in earnings of subsidiaries $178.1 $146.2 $159.2 Interest and dividend income 52.4 45.0 34.2 Net sales 16.8 17.3 15.2 Net realized gains (losses) 92.9 (3.3) (9.7) 340.2 205.2 198.9 EXPENSES Corporate and administrative expenses 20.2 20.2 25.8 Interest and debt expense 62.6 69.0 63.0 Provision for loss on sale of subsidiaries and asset impairment 37.9 - - Other (income) expense, net 30.3 32.3 30.5 151.0 121.5 119.3 Income from continuing operations before income taxes 189.2 83.7 79.6 Income tax (expense) benefit 53.5 (32.8) (29.4) Income from continuing operations 242.7 50.9 50.2 DISCONTINUED OPERATIONS Equity in earnings (losses) of subsidiaries 2.8 1.7 (47.6) Loss from disposal of businesses (13.5) - - Cumulative effect of accounting change - 252.8 - NET INCOME $232.0 $305.4 $ 2.6
COMBINED CONDENSED BALANCE SHEET
As of December 31, 1993 1992 ASSETS Investments $ 927.4 $ 782.2 Receivables from subsidiaries 293.5 332.7 Investments in subsidiaries 1,231.7 972.3 Net assets of discontinued operations 9.8 111.5 Deferred tax asset 295.8 245.4 Other assets 120.8 116.1 $2,879.0 $2,560.2 LIABILITIES AND CAPITAL Accounts payable, accrued expenses and other liabilities $ 196.2 $ 128.5 Payables to subsidiaries 440.9 276.1 Long-term debt 519.6 652.8 Other capital 1,722.3 1,502.8 $2,879.0 $2,560.2
S-3 SCHEDULE III (continued) AMERICAN PREMIER UNDERWRITERS, INC. Condensed Financial Information of Registrant (Note 1) (In Millions) COMBINED CONDENSED STATEMENT OF CASH FLOWS
For the Years Ended December 31, CASH FLOWS FROM OPERATING ACTIVITIES: 1993 1992 1991 Income from continuing operations $ 242.7 $ 50.9 $ 50.2 Adjustments Equity in earnings of subsidiaries (178.1) (146.2) (159.2) Deduction in lieu of current Federal income tax - - 24.3 Deferred Federal income tax (57.9) 28.9 - Net (gain) loss on disposal of businesses, investments and PP&E (54.5) 4.1 11.4 Cash received from subsidiaries 231.2 122.2 89.6 Litigation settlement 15.6 - - Other, net (35.7) (24.0) (15.0) Cash flows from operating activities 163.3 35.9 1.3 CASH FLOWS FROM INVESTING ACTIVITIES: Net (increase) decrease in temporary investments (179.3) 214.8 (114.1) Purchases of investments (158.3) (290.5) (23.1) Sales and maturities of investments 372.1 142.8 62.4 Acquisitions of businesses, net of cash acquired (57.3) - - Other, net (.7) (2.4) 20.5 Cash flows from investing activities (23.5) 64.7 (54.3) CASH FLOWS FROM FINANCING ACTIVITIES: Purchases of Company Common Stock (1.9) (36.8) (142.7) Issuance of debt - - 148.7 Repayment of debt (133.7) - - Common Stock dividends (38.2) (36.8) (32.3) Other, net 23.3 13.2 11.3 Cash flows from financing activities (150.5) (60.4) (15.0) Net cash flows from continuing operations (10.7) 40.2 (68.0) Net cash (to) from discontinued operations 8.3 (36.6) 68.1 Increase (decrease) in cash (2.4) 3.6 .1 Cash - beginning of year 6.2 2.6 2.5 Cash - end of year $ 3.8 $ 6.2 $ 2.6 Cash dividends received from equity method accounting investees $ 2.5 $ 3.9 $ 3.8 Cash dividends received from consolidated subsidiaries $ 36.2 $ 53.1 $ 37.2
Note 1: For purposes of preparing the combined condensed financial statements included in this Schedule III, the accounts of the Company ("Registrant") have been combined with the accounts of Pennsylvania Company ("Pennco"). Pennco is a wholly owned direct subsidiary of the Registrant, and is itself a holding company. At December 31, 1993, approximately 61% of Investments and substantially all Investments in Subsidiaries as reported on the Combined Condensed Balance Sheet were owned by Pennco. Pennco has no debt obligations and there are no restrictions affecting transfers of funds between Pennco and the Registrant. Accordingly, management believes that the financial resources held at Pennco as well as Pennco's cash flow are available, if necessary, to service the obligations of the Registrant. S-4 SCHEDULE VII AMERICAN PREMIER UNDERWRITERS, INC. AND CONSOLIDATED SUBSIDIARIES Guarantees of Securities and Other Obligations of Other Issuers December 31, 1993 (Dollars In Millions)
Total Amount Name of Issuer of Title of Issue Guaranteed Securities Guaranteed of Each Class and Nature of by Registrant Guaranteed Outstanding Guarantee Gulf Energy Development Industrial Revenue Bond, $2.2 Principal Corporation 6%, dated December 1984 and Interest Republic Indemnity Company Employee Stock Ownership $1.3 Principal of America Plan Debt and Interest
SCHEDULE VIII AMERICAN PREMIER UNDERWRITERS, INC. AND CONSOLIDATED SUBSIDIARIES Valuation and Qualifying Accounts For the Years Ended December 31, 1993, 1992 and 1991 (Dollars In Millions)
Additions Balance at Charged Charged Balance beginning to costs to other at end of Description of period and expenses accounts Deductions period Year ended December 31, 1993: Allowance for uncollectible accounts - trade and other receivables $ 9.9 $ 6.4 $ .6(a) $ .5(b)(c) $16.4 Allowance for uncollectible notes receivable 12.9 - - 12.9(d) - Miscellaneous reserves for losses - other asset categories 6.3 15.4 (9.3)(e) 5.7(c) 6.7 Year ended December 31, 1992: Allowance for uncollectible accounts - trade and other receivables 6.9 2.0 1.8(f) .8(b)(c) 9.9 Allowance for uncollectible notes receivable 15.2 - - 2.3(d) 12.9 Miscellaneous reserves for losses - other asset categories 36.9 3.5 (17.0)(e) 17.1(b)(f) 6.3 Year ended December 31, 1991: Allowance for uncollectible accounts - trade and other receivables 7.3 .4 - .8(c) 6.9 Allowance for uncollectible notes receivable 30.3 - - 15.1(d) 15.2 Miscellaneous reserves for losses - other asset categories 39.4 14.9 - 17.4(c)(e) 36.9
(a) Includes additions for businesses acquired. (b) Includes reductions for divested businesses. (c) Includes reductions of valuation accounts for actual charges incurred. (d) Includes a reduction in reserves for uncollectibility of notes which resulted from the prior sale of certain offshore drilling rigs, to reflect the receipt of significant principal and interest payments. (e) Includes changes in unrealized gains and/or losses on securities. (f) Includes transfers to/from other reserve accounts. S-5 SCHEDULE X AMERICAN PREMIER UNDERWRITERS, INC. AND CONSOLIDATED SUBSIDIARIES Supplemental Information Concerning Property - Casualty Insurance Operations For The Years Ended December 31, 1993, 1992 and 1991 (Dollars in Millions)
Column A Column B Column C Column D Column E Column F Reserves for Deferred Unpaid Claims Affiliation Policy and Claim Discount with Acquisition Adjustment Deducted in Unearned Earned Registrant Costs Expenses Column C Premiums Premiums CONSOLIDATED PROPERTY AND CASUALTY ENTITIES 1993 $77.4 $961.4(1) $0 $352.3 $1,273.6 1992 $50.4 $763.5 $0 $224.3 $ 998.7 1991 $34.6 $663.9 $0 $156.1 $ 845.6
SCHEDULE X (continued) AMERICAN PREMIER UNDERWRITERS, INC. AND CONSOLIDATED SUBSIDIARIES Supplemental Information Concerning Property - Casualty Insurance Operations For The Years Ended December 31, 1993, 1992 and 1991 (Dollars in Millions)
Column G Column H Column I Column J Column K Claims and Claim Amortization Paid Adjustment Expenses of Deferred Claims Net Incurred Related to Policy and Claim Investment Current Prior Acquisition Adjustment Premiums Income Year Years Costs Expenses Written CONSOLIDATED PROPERTY AND CASUALTY ENTITIES $114.7 $914.7 $(57.8) $243.8 $758.1 $1,378.9 $105.0 $706.8 $(20.2) $195.9 $587.0 $1,067.3 $ 97.9 $601.0 $(21.6) $121.7 $517.1 $ 864.6
(1) Gross of ceded reinsurance receivable of $45.1 million. S-6 EX-99 2 EXHIBITS TO ANNUAL REPORT ON FORM 10-K EXHIBIT INDEX EXHIBIT NUMBER (REFERENCED TO ITEM 601 OF REGULATION S-K) --------------- (3) (i) ---Amended and Restated Articles of Incor- poration of the Company, as amended effec- tive March 25, 1994. (ii) ---By-Laws of the Company, as amended * July 30, 1992, incorporated by reference to Exhibit (3)(iii) to the Company's Annual Report on Form 10-K for 1992. (4)(i) ---Order No. 3708 of the United States * District Court for the Eastern District of Pennsylvania in In the Matter of Penn Central Transportation Company, Debtor, Bankruptcy No. 70-347 dated August 17, 1978 directing the consummation of the Plan of Reorganization for Penn Central Transportation Company, incorporated by reference to Exhibit 4 to Form 8-K Current Report of Penn Central Transportation Company for August 1978. (4)(ii) (a) ---Certain instruments with respect to long-term debt of subsidiaries of the Company which do not relate to debt exceeding 10% of the total assets of the Company and its consolidated sub- sidiaries are omitted pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, 17 C.F.R. 229.601. The Company hereby agrees to furnish supplementally to the Securities and Exchange Commission a copy of each such instrument upon request. (b) ---(i) Indenture dated as of August 1, * 1989 between the Company and Morgan Guaranty Trust Company of New York, as Trustee, regarding the Company's Sub- ordinated Debt Securities (the "Indenture"), incorporated by reference to Exhibit 4.1 - --------------- * Asterisk indicates an exhibit previously filed with the Securities and Exchange Commission and incorporated herein by reference. EXHIBIT NUMBER (REFERENCED TO ITEM 601 OF REGULATION S-K) --------------- to the Company's Form 8-K Current Report dated August 10, 1989. ---(ii) Instrument of Resignation of Trustee * and Appointment and Acceptance of Successor Trustee and Appointment of Agent dated as of November 15, 1991 among the Company, Morgan Guaranty Trust Company of New York as Resigning Trustee and Star Bank, N.A. as as Successor Trustee, incorporated by reference to Exhibit (4)(ii)(d)(ii) to the Company's Annual Report on Form 10-K for 1991. ---(iii) Officer's Certificate Pursuant to * Sections 102 and 301 of the Indenture relating to authentication and designation of the Company's 9-3/4% Subordinated Notes due August 1, 1999, to which is attached the Form of Note, incorporated by reference to Exhibit 4.2 to the Company's Form 8-K Current Report dated August 10, 1989. ---(iv) Officer's Certificate Pursuant to * Sections 102 and 301 of the Indenture relating to authentication and designation of the Company's 10-5/8% Subordinated Notes due April 15, 2000, to which is attached the Form of Note, incorporated by reference to Exhibit 4.1 to the Company's Form 8-K Current Report dated April 19, 1990. ---(v) Officer's Certificate Pursuant to * Sections 102 and 301 of the Indenture relating to authentication and designation of the Company's 10-7/8% Subordinated Notes due May 1, 2011, to which is attached the Form of Note, incorporated by reference to Exhibit 4.1 to the Company's Form 8 amendment dated May 8, 1991 to the Com- pany's Form 8-K Current Report dated May 7, 1991. - --------------- * Asterisk indicates an exhibit previously filed with the Securities and Exchange Commission and incorporated herein by reference. EXHIBIT NUMBER (REFERENCED TO ITEM 601 OF REGULATION S-K) --------------- (10)(i) (a) ---(i) Intercompany Agreement, dated June 9, * 1992, by and between the Company and General Cable Corporation, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 9, 1992. ---(ii) Subordinated Promissory Note of * General Cable Corporation due 2007 in the principal amount of $255,000,000 payable to the Company, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 30, 1992. (b) ---Stock Purchase Agreement, dated as of * June 10, 1993, among the Company, PCC Technical Industries, Inc. and Tracor, Inc., incorporated by reference to Exhibit (99) to the Company's Current Report on Form 8-K dated May 26, 1993. The following Exhibits (10)(iii)(a) through (10)(iii)(g) are compensatory plans and arrangements in which directors or execu- tive officers participate: (iii) (a) ---(i) The Company's Stock Option Plan, as * amended March 25, 1992, incorporated by reference to Exhibit (10)(iii)(a)(i) to the Company's Annual Report on Form 10-K for 1992. ---(ii) Amendment to the Company's Stock * Option Plan adopted by the Company's Board of Directors on March 24, 1993, incorporated by reference to Exhibit (10)(iii)(a)(ii) to the Company's Annual Report on Form 10-K for 1992. ---(iii) Forms of stock option agreements * used to evidence options granted under the Company's Stock Option Plan to officers - --------------- * Asterisk indicates an exhibit previously filed with the Securities and Exchange Commission and incorporated herein by reference. EXHIBIT NUMBER (REFERENCED TO ITEM 601 OF REGULATION S-K) --------------- and directors of the Company, incorporated by reference to Exhibit (10)(iii)(a)(iii) to the Company's Annual Report on Form 10-K for 1992. ---(iv) The Company's Stock Option Loan * Program, as amended February 8, 1991, incorporated by reference to Exhibit (10)(iii)(a)(v) to the Company's Annual Report on Form 10-K for 1990. ---(v) The Company's 1992 Spin-Off Stock * Option Plan adopted by the Company's Board of Directors on March 25, 1992, incorporated by reference to Exhibit (10)(iii)(a)(vi) to the Company's Annual Report on Form 10-K for 1991. (b) ---The Company's Annual Incentive Compen- * sation Plan, as amended February 12, 1992, incorporated by reference to Exhibit (10)(iii)(b) to the Company's Annual Report on Form 10-K for 1991. (c) ---Description of the Company's retirement * program for outside directors, as adopted by the Company's Board of Directors on March 23, 1983, incorporated by reference to Exhibit (10)(iii)(i) to the Company's Annual Report on Form 10-K for 1982. (d) ---The Company's Employee Stock Redemption * Program, as adopted by the Company's Board of Directors on March 28, 1985, incorporated by reference to Exhibit (10)(iii)(j) to the Company's Annual Report on Form 10-K for 1984. (e) ---(i) Severance Agreement dated March 29, * 1987 between the Company and Alfred W. Martinelli, a director of the Company, - --------------- * Asterisk indicates an exhibit previously filed with the Securities and Exchange Commission and incorporated herein by reference. EXHIBIT NUMBER (REFERENCED TO ITEM 601 OF REGULATION S-K) --------------- incorporated by reference to Exhibit (10)(iii)(a)(i) to the Company's Form 10-Q Quarterly Report for the Quarter Ended March 31, 1987. ---(ii) Consulting Agreement dated as of * March 29, 1987 between the Company and Alfred W. Martinelli, incorporated by reference to Exhibit (10)(iii)(a)(ii) to the Company's Form 10-Q Quarterly Report for the Quarter Ended March 31, 1987. ---(iii) Letter agreement amending the fore- * going Consulting and Severance Agreements dated December 9, 1991 between the Company and Alfred W. Martinelli, incorporated by reference to Exhibit (10)(iii)(e)(iii) to the Company's Annual Report on Form 10-K for 1991. (f) ---Letters dated April 9, 1987 from the * Company to each of Neil M. Hahl and Robert W. Olson, officers of the Company, with respect to severance arrangements, as supplemented by letters dated June 26, 1987 to each such officer, incorporated by reference to Exhibit (10)(iii)(a) to the Company's Form 10-Q Quarterly Report for the Quarter Ended June 30, 1987. (g) ---(i) Excess of Loss Agreement, effective * March 31, 1988, between Republic Indemnity Company of America and Great American Insurance Company, incorporated by refer- ence to Exhibit (g)(1) to Amendment No. 1 to Schedule 13E-3, dated January 17, 1989, relating to Republic American Corporation filed by Republic American Corporation, the Company, RAWC Acquisition Corp., American Financial Corporation and Carl H. Lindner (the "Schedule 13E-3 Amendment"). - --------------- * Asterisk indicates an exhibit previously filed with the Securities and Exchange Commission and incorporated herein by reference. EXHIBIT NUMBER (REFERENCED TO ITEM 601 OF REGULATION S-K) --------------- ---(ii) First Amendment to Excess of Loss * Agreement, effective March 31, 1988, between Republic Indemnity Company of America and Great American Insurance Company, incorporated by reference to Exhibit (g)(2) to the Schedule 13E-3 Amendment. (h) ---(i) Business Assumption Agreement, * effective as of December 31, 1990, between Stonewall Insurance Company and Dixie Insurance Company, incorporated by reference to Exhibit (10)(iii)(o)(i) to the Company's Annual Report on Form 10-K for 1990. ---(ii) Quota Share Agreements, effective * December 31, 1990, between Stonewall Insurance Company and Dixie Insurance Company, incorporated by reference to Exhibit (10)(iii)(o)(ii) to the Company's Annual Report on Form 10-K for 1990. ---(iii) Management Agreement, effective as * of January 1, 1991, by and between Dixie Insurance Company and Stonewall Insurance Company, incorporated by reference to Exhibit (10)(iii)(o)(iii) to the Company's Annual Report on Form 10-K for 1990. (i) ---Excess of Loss Agreements, effective * December 31, 1990, between Great American Insurance Company and each of Atlanta Casualty Company, Dixie Insurance Company and Windsor Insurance Company, incorporated by reference to Exhibit (10)(iii)(p) to the Company's Annual Report on Form 10-K for 1990. (j) ---Premium Payment Agreement, effective as * of January 1, 1991, by and between Great American Insurance Company and the Company, - --------------- * Asterisk indicates an exhibit previously filed with the Securities and Exchange Commission and incorporated herein by reference. EXHIBIT NUMBER (REFERENCED TO ITEM 601 OF REGULATION S-K) --------------- incorporated by reference to Exhibit (10)(iii)(q) to the Company's Annual Report on Form 10-K for 1990. (11) ---Supplemental information regarding computa- tions of net income per share amounts. (12) ---Calculation of ratio of earnings to fixed charges. (13) ---Portions of the Company's 1993 Annual Report to Shareholders. (21) ---List of subsidiaries of the Company. (23) ---Consent of Deloitte & Touche. (28) ---Information from reports provided to state regulatory authorities. EXHIBIT (3)(i) AMENDED AND RESTATED ARTICLES OF INCORPORATION OF AMERICAN PREMIER UNDERWRITERS, INC. (A Pennsylvania Corporation) FIRST. Corporate Name. The name of the corporation is American Premier Underwriters, Inc. (hereinafter referred to as the "Corporation"). SECOND. Registered Office. The location and post office address of the registered office of the Corporation in the Commonwealth of Pennsylvania is 1635 Market Street, Philadelphia, Pennsylvania 19103, c/o CT Corporation System. THIRD. Corporate Purposes. The purposes for which the Corporation is incorporated under the Business Corporation Law of the Commonwealth of Pennsylvania are to engage in, and to do any lawful act concerning, any or all lawful business for which corporations may be incorporated under said Business Corporation Law, including, but not limited to, manufacturing, processing, owning, using and dealing in personal property of every class and description, engaging in research and development, furnishing services, and acquiring, owning, using and disposing of real property of any nature whatsoever. FOURTH. Corporate Existence. The term of existence of the Corporation is perpetual. FIFTH. Capital Stock. The aggregate number of shares of stock which the Corporation shall have authority to issue is two hundred twenty-three million ninety thousand two hundred and seventy-four (223,090,274) shares which shall be divided into two classes, consisting of: (a) twenty-three million ninety thousand two hundred and seventy-four (23,090,274) shares of preference stock (hereinafter referred to as "Preference Stock") without par value; and (b) two hundred million (200,000,000) shares of common stock (hereinafter referred to as "Common Stock") with a par value of $1 per share. SIXTH. Preference Stock. (a) The Board of Directors of the Corporation (the "Board of Directors") shall have the full authority permitted by law to fix by resolution full, limited, multiple or fractional or no voting rights, and such designations, preferences, qualifications, privileges, limitations, restrictions, options, conversion rights, and other special or relative rights of the Preference Stock or any series of the Preference Stock that may be desired and which have not been fixed in these Articles. (b) Unless otherwise provided in any resolution hereafter adopted by the Board of Directors pursuant to this Article Sixth and filed in the manner provided by law, the number of shares of any series of the Preference Stock established and designated in this restatement, or in any resolution hereafter adopted by the Board of Directors pursuant to this Article Sixth and filed in the manner provided by law, may be increased (within the then total authorized amount of Preference Stock of all series) or decreased (but not below the number of shares thereof then outstanding) by a statement filed pursuant to law setting forth a resolution adopted by the Board of Directors increasing or decreasing the authorized number of shares of such series. In like manner, unless otherwise provided in this Article Sixth or in any such resolution, the Board of Directors may from time to time, within the then total authorized amount of Preference Stock of all series, establish and designate any reacquired or unissued shares of Preference Stock (whether or not theretofore established and designated as a part of any existing series) as shares of Preference Stock of one of more existing or additional series and fix and determine the relative rights and preferences thereof. (c) Five series of such Preference Stock shall be as follows: SECTION 1. Designation. (A) 71,400 shares designated as the "$3.47 Convertible Preference Stock, Second Series", the shares of which shall be entitled to cumulative cash dividends at the annual rate of $3.47 per share and which shall be convertible into Common Stock at the initial rate of 3.2198 shares of Common Stock for each share of Preference Stock; (B) 40,000 shares designated as the "$3.50 Convertible Preference Stock, Third Series", the shares of which shall be entitled to cumulative cash dividends at the annual rate of $3.50 per share and which shall be convertible into Common Stock at the initial rate of 2.2516 shares of Common Stock for each share of Preference Stock; (C) 162,962 shares designated as the "$3.40 Convertible Preference Stock, Fourth Series", the shares of which shall be entitled to cumulative cash dividends at the annual rate of $3.40 per share and which shall be convertible into Common Stock at the initial rate of 2.1618 shares of Common Stock for each share of Preference Stock; (D) 124,720 shares designated as the "$3.76 Convertible Preference Stock, Fifth Series", the shares of which shall be entitled to cumulative cash dividends at the annual rate of $3.76 per share and which shall be convertible into Common Stock at the initial rate of 1.8434 shares of Common Stock for each share of Preference Stock; and (E) 204,426 shares designated as the "$4.20 Convertible Preference Stock, Sixth Series", the shares of which shall be entitled to cumulative cash dividends at the annual rate of $4.20 per share and which shall be convertible into Common Stock at the initial rate of 1.9508 shares of Common Stock for each share of Preference Stock. SECTION 2. General Terms. (A) The series of Preference Stock designated in Section 1, and any series of Preference Stock whose voting rights, designations, preferences, qualifications, privileges, limitations, restrictions, options, conversion rights, and other special or relative rights may hereafter be fixed by resolution of the Board of Directors by reference to this paragraph (c) of this Article Sixth, will be referred to hereinafter collectively as Career Share Series and any shares of any thereof as Career Shares. Except as to designation, annual dividend rate and initial conversion rate, the terms of the shares of any Career Share Series shall be identical to the terms of the shares of each other Career Share Series. The terms on which Career Shares may be converted into Common Stock and the payment of dividends at the rate specified in Section 1 shall be subject to, and terms of the Career Shares generally shall be as set forth in, the remaining Sections of this paragraph (c) of this Article Sixth. (B) Nothing herein shall be deemed to constitute a limitation on the authority of the Board of Directors to designate by resolution, out of the authorized Preference Stock, series of Preference Stock not governed by the terms of this paragraph (c) of this Article Sixth. SECTION 3. Dividend Rights. Holders of record of shares of Career Share Series shall be entitled to receive, as and if declared by the Board of Directors, out of assets legally available therefor, cumulative cash dividends at the annual rate set forth in Section 1 or in the resolution establishing such series. Dividends on such Career Shares will accrue from the respective dates of original issuance of such shares and, with respect to each such share, will be payable quarterly on February 15, May 15, August 15 and November 15 in each year commencing on the later of August 15, 1983 or the first of such dates occurring more than 30 days after the date of issuance of such share. In the event that full cumulative dividends on outstanding shares of any Career Share Series have not been paid when scheduled, no dividends shall be declared or paid on, and no amounts shall be set aside or applied to the redemption or purchase of, any shares of Common Stock of the Corporation or any other shares of capital stock of the Corporation ranking subordinate to such Career Share Series with respect to the payment of dividends (other than a dividend in capital stock ranking subordinate to such Career Share Series as to dividends), and, in such event, all dividends declared on the Career Shares and any other series of capital stock of the Corporation ranking on a parity as to dividends with such Career Share Series shall be declared pro rata among each such series. SECTION 4. Subordination. The rights of any Career Share Series with respect to dividends shall be subordinate to any shares of capital stock of the Corporation which are by their terms superior to the rights of such Career Share Series with respect to dividends. The rights of the Common Stock of the Corporation shall be subordinate to Career Shares with respect to the dividend rights set forth in Section 3. SECTION 5. Conversion Privilege and Price. Career Shares shall be convertible into shares of Common Stock at any time and from time to time, at the option of the holder thereof, provided, however, that such conversion privilege shall be subject to any contractual agreements between the Corporation and the holder thereof regarding such privilege for so long as such holder continues to hold shares of such Career Share Series. The rate at which shares of Common Stock shall be delivered upon conversion shall initially be as set forth in Section 1 or in the resolution establishing such series. All conversions of Career Shares into shares of Common Stock shall be subject to the following terms and conditions: (A) The Corporation shall make no payment or adjustment on account of any dividends declared but unpaid on the Common Stock issuable upon conversion. (B) The number of shares of Common Stock into which Career Shares are convertible shall be subject to adjustment from time to time as follows except that no adjustment need be made unless, by reason of the happening of any one or more of the events specified in this Section 5(B), the conversion rate then in effect shall be changed by 1% or more, but any adjustment of less than 1% that would otherwise be required then to be made shall be carried forward and shall be made at the time of and together with any subsequent adjustment which, together with any adjustment or adjustments so carried forward, amounts to 1% or more, provided that such adjustment shall be made in all events (regardless of whether or not the amount thereof or the cumulative amount thereof amounts to 1% or more) after a period of three years from the date of happening of an event requiring adjustment as specified in this Section 5(B): (i) In case the Corporation shall issue rights or warrants to holders of shares of Common Stock entitling them (for a period expiring within 90 days after the record date mentioned below) to subscribe for or purchase shares of Common Stock at a price less than the current market price per share of Common Stock (as determined pursuant to Subsection 5(B)(vi) on the record date mentioned below), the conversion rate (such rate being initially as set forth in Section 1 or in the resolution establishing such series) shall be adjusted so that the conversion rate shall equal the rate determined by multiplying the conversion rate in effect immediately prior to the date of issuance of such rights or warrants by a fraction whose numerator shall be the number of shares of Common Stock outstanding on the date of issuance of such rights or warrants plus the number of shares which the aggregate exercise price of the shares of Common Stock called for by all rights or warrants issued would purchase at such current market price, and whose denominator shall be the number of shares of Common Stock outstanding on the date of issuance of such rights or warrants plus the number of additional shares of Common Stock called for by such rights or warrants. Such adjustment shall be made whenever such rights or warrants are issued and shall be retroactively effective as of immediately after the record date for the determination of holders of Common Stock entitled to receive such rights or warrants. (ii) In case the Corporation shall at any time or times (1) pay a dividend on the Common Stock in shares of capital stock, (2) subdivide its outstanding shares of Common Stock into a greater number of shares, (3) combine its outstanding shares of Common Stock into a smaller number of shares or (4) issue by reclassification of its shares of Common Stock, or any recapitalization or reorganization of the Corporation, any shares of capital stock of the Corporation (other than a change from par value to no par value), then, in each such case, the conversion rate (such rate being initially as set forth in Section 1 or in the resolution establishing such series) in effect immediately prior thereto shall be adjusted so that the holder of any Career Shares thereafter surrendered for conversion shall be entitled to receive the number and kinds of shares of capital stock which he would have owned or would have been entitled to receive immediately after the happening of any of the events described above had such Career Shares been converted immediately prior to the happening of such event. An adjustment made pursuant to this Subsection 5(B) (ii) shall become effective as of immediately after the record date in those cases specified in clause (1) of this Subsection 5(B)(ii) and shall become effective as of immediately after the effective date in those cases specified in clauses (2), (3) and (4) of this Subsection 5(B)(ii). (iii) In case the Corporation shall distribute to holders of its Common Stock evidences of its indebtedness or assets or rights to subscribe for or warrants to purchase (excluding those referred to in Subsection 5(B)(i)) shares of Common Stock or any other security, or shall make a capital distribution on its shares of Common Stock, then in each such case the conversion rate shall be adjusted so that the conversion rate (such rate being initially as set forth in Section 1 or in the resolution establishing such series) shall equal the rate determined by multiplying the conversion rate in effect immediately prior to the date of such distribution by a fraction whose numerator shall be the current market price per share of Common Stock (determined as provided in Subsection 5(B)(vi)) on the effective date of distribution minus the then fair market value (as determined by the Board of Directors, whose determination shall be conclusive and evidenced by a Board resolution) of the portion of the assets or evidences of indebtedness so distributed or of such subscription rights or warrants, or of the capital distribution, applicable to one share of Common Stock and whose denominator shall be such current market price per share of the Common Stock. Such adjustment shall be made whenever any such distribution is made and shall be retroactively effective as of immediately after the record date for the determination of holders of Common Stock entitled to receive such distribution. (iv) In case the Corporation shall issue to holders of shares of Common Stock shares of Common Stock pursuant to any dividend reinvestment plan at a price less than the current market price per share of Common Stock (determined as provided in Subsection 5(B)(vi) below) on the date of issuance of such shares pursuant to such dividend reinvestment plan, then in each such case the conversion rate (such rate being initially as set forth in Section 1 or in the resolution establishing such series) shall equal the rate determined by multiplying the conversion rate in effect immediately prior to the date of issuance of such shares by a fraction whose numerator shall be the number of shares of Common Stock outstanding on the date of issuance of such shares plus the number of shares of Common Stock which the aggregate purchase price for shares being purchased on such date of issuance pursuant to any such dividend reinvestment plan would purchase at such current market price, and whose denominator shall be the number of shares of Common Stock outstanding on such date of issuance plus the number of additional shares of Common Stock issued pursuant to any such dividend reinvestment plan. Such adjustment shall be made whenever such shares are issued and shall be retroactively effective as of immediately after such date of issuance. (v) If any capital reorganization or reclassification of the capital stock of the Corporation, or consolidation or merger of the Corporation with another corporation, or the sale of all or substantially all of its assets to another corporation, shall be effected in such a way that holders of shares of Common Stock shall be entitled to receive stock, securities or assets with respect to or in exchange for shares of Common Stock, then, as a condition of such reorganization, reclassification, consolidation, merger or sale, the Corporation or such successor or purchasing corporation, as the case may be, shall make provision that the holder of each Career Share shall have the right thereafter to convert such share into the kind and amount of stock, securities or assets receivable upon such reorganization, reclassification, consolidation, merger or sale by a holder of the number of shares of Common Stock into which such share might have been converted immediately prior to such reorganization, reclassification, consolidation, merger or sale, subject to adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5(B). (vi) For the purpose of any computation of current market price per share of Common Stock under this Section 5(B), the current market price per share of Common Stock on any date shall be deemed to be the average of the daily closing prices for the 10 consecutive business days commencing 15 business days before the day in question. The closing price for each day shall be the last reported sales price regular way or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices regular way, in either case on the New York Stock Exchange, or, if the Common Stock is not listed or admitted to trading on such Exchange, on the principal national securities exchange on which the Common Stock is listed or admitted to trading, or, if not listed or admitted to trading on any national securities exchange, the average of the closing bid and asked prices in the over-the-counter market, as furnished by any New York Stock Exchange firm selected from time to time by the Corporation for that purpose. For purposes of this Subsection 5(B)(vi), the term business day shall not include any day on which securities are not traded on such exchange or in such market. (vii) The Corporation shall not be required to issue fractional shares of Common Stock upon conversion of Career Shares. If more than one share of any Career Share series shall be surrendered for conversion at one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares so surrendered. If any fractional interest in a share of Common Stock would be deliverable upon the conversion of any Career Shares, the Corporation, in lieu of delivering the fractional share therefor, shall make an adjustment therefor in cash at the market value thereof. For the purpose of making a cash adjustment in lieu of delivering fractional shares, the market value of a share of Common Stock shall be the last reported sales price regular way or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices regular way, in either case on the New York Stock Exchange on the last business day prior to the conversion date, or, if the Common Stock is not then listed or admitted to trading on such Exchange, on the principal national securities exchange on which the Common Stock is listed or admitted to trading, or, if not listed or admitted to trading on any national securities exchange, the average of the closing bid and asked prices in the over-the-counter market as furnished by any New York Stock Exchange firm selected from time to time by the Corporation for that purpose. For purposes of this Subsection 5(B)(vii), the term business day shall not include any day on which securities are not traded on such exchange or in such market. (viii) Whenever any event occurs which would cause an adjustment of the securities or other assets into which any Career Shares would be converted, as herein provided, the Corporation shall promptly file with the transfer agent or agents for such Career Share Series (and with any conversion agent other than the transfer agent or agents) a report prepared by the Corporation accompanied by an opinion of a firm of independent public accountants selected by the Board of Directors (who may be the accountants regularly employed by the Corporation) setting forth the conversion rate applicable after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Such report and opinion shall be conclusive evidence of the correctness of such adjustment and neither the transfer agent or agents nor any conversion agent shall be under any duty or responsibility with respect to any such report or opinion except to exhibit the same from time to time to any holder of any Career Share desiring an inspection thereof. Promptly after filing such report and opinion, the Corporation shall cause notice to be mailed specifying such adjustment to each holder of record of shares of such Career Share Series at his last address appearing on the books of the Corporation. Neither the transfer agent or agents nor any conversion agent shall at any time be under any duty or responsibility to any such holder to determine whether any facts exist which may require any adjustment of the conversion rate, or with respect to the nature and extent of any such adjustment when made, or with respect to the method employed in making the same. (C) The Corporation shall at all times reserve and keep available, out of its authorized but unissued shares of Common Stock or out of shares of Common Stock held in its treasury, the full number of shares of Common Stock into which all Career Shares from time to time outstanding are convertible. (D) The issuance of stock certificates on conversions of Career Shares into shares of Common Stock shall be without charge to the converting stockholders for any issue tax. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock in any name other than that of the registered holder of the Career Shares converted, and the Corporation shall not be required to issue or deliver any such stock certificate unless and until the person or persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. (E) Any holder of Career Shares who shall choose to convert Career Shares held by him pursuant to this Section 5 shall, as a condition of conversion, present the certificates for such Career Shares (which certificate or certificates, if the Corporation shall so require, shall be duly endorsed or accompanied by appropriate instruments of transfer satisfactory to the Corporation) at the office of the transfer agent or agents for such Career Shares, or at such other office as may be designated by the Corporation, and shall give written notice to the Corporation at said office that such holder elects to convert the same or part thereof and shall state in writing therein the name or names in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. The Corporation will, as soon as practicable thereafter, issue and deliver at said office to such holder, or to the designee of such holder, certificates for the number of full shares of Common Stock to which such holder or its designee shall be entitled as aforesaid, together with cash in lieu of any fraction of a share as hereinabove provided and certificates for the Career Shares, if any, not converted. Career Shares shall be deemed to have been converted as of the close of business on the date of the presentation of such shares for conversion as provided above, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such time and date. SECTION 6. Voting. (A) The holders of Career Shares shall not be entitled to vote at any meeting of the shareholders of the Corporation or on any other occasion where shareholders are entitled to vote, except as otherwise expressly provided in this Section 6. The holders of shares of any Career Share Series shall vote as a single or separate class with the holders of all other series of Preference Stock, or as a single or separate series of Preference Stock, as and to the extent provided in Subsection 6(B) and by Pennsylvania law. (B) The Corporation may, in the manner provided by Article Ninth of the Articles and as permitted by Pennsylvania law, from time to time alter or change the voting rights, preferences, qualifications, privileges, limitations, restrictions, options, conversion rights or other special or relative rights of any Career Share Series; provided, however, that without the affirmative vote of the holders of at least two-thirds of the outstanding shares of all series of Preference Stock, the Corporation shall not amend, alter, change, add or insert any provision in the Articles which, or authorize the merger or consolidation of the Corporation with any other corporation if the plan of such merger or consolidation contains any provision which if contained in the Articles, would (i) make any adverse change in the voting rights, preferences, qualifications, privileges, limitations, restrictions, options, conversion rights or special or relative rights of Preference Stock, (ii) authorize a new class of stock senior or superior to Preference Stock, or (iii) increase the number of authorized shares of a senior or superior class of stock, and, without the affirmative vote of the holders of at least a majority of the outstanding shares of all series of Preference Stock, the Corporation shall not amend, alter, change, add or insert any provision in the Articles which, or authorize the merger or consolidation of the Corporation with any other corporation if the plan of such merger or consolidation contains any provision which if contained in the Articles, would increase the authorized number of shares of Preference Stock. Without the affirmative vote of the holders of at least two-thirds of the outstanding shares of any Career Share Series, the Corporation shall not amend, alter, change, add or insert any provision in the Articles which, or authorize the merger or consolidation of the Corporation with any other corporation if the plan of such merger or consolidation contains any provision which if contained in the Articles, would adversely affect such Career Share Series but would not adversely affect each other series of Preference Stock. Nothing in this Section 6 shall require a class vote or consent in connection with the authorization, designation, increase or issuance of any shares of any class or series of capital stock which is subordinate to shares of any Career Share Series as to dividends, or in connection with the authorization, designation, increase or issuance of any bonds, mortgages, debentures or other obligations of the Corporation, or because of any adjustment in the provisions of any Career Share Series made pursuant to Section 5(B). SECTION 7. No Liquidation Preference. The holders of Career Shares shall not be entitled to any payment out of the assets of the Corporation in the event of a voluntary or involuntary liquidation, dissolution or winding up of the Corporation, which is preferential to the rights of the holders of Common Stock. SEVENTH. Cumulative Voting. At each meeting of shareholders at which directors are to be elected, all shareholders entitled to vote in such election shall have the right of cumulative voting. Cumulative voting, as used in this Article Seventh, shall mean the right of each shareholder entitled to vote for the election of directors to multiply the number of votes, or fraction thereof, to which he may be entitled by the total number of directors to be elected in the same election and to cast the whole number of such votes (including any fraction thereof) for one candidate or to distribute the number of such votes among any two or more candidates. EIGHTH. Board of Directors. (a) The Board of Directors shall consist of such number of directors as shall be fixed from time to time by resolution adopted by a majority of all the directors then in office. (b) There shall be only one class of directors, each of whom shall be elected for a term of one year by cumulative voting as provided in Article Seventh hereof. Notwithstanding any other provision of this Article Eighth, the terms of the Preference Stock may provide that, in the event of a default in the payment of dividends or the making of any mandatory payment to a purchase or redemption fund, the holders of such class as to which a default has occurred and is continuing may vote as a separate class to elect not more than two directors of the Corporation, who may be in addition to any directors then in office. (c) Unless otherwise required by law, the Board of Directors shall act by the vote of a majority of the directors present and acting (so long as a quorum is present) in all cases, except as provided in paragraph (a) of this Article Eighth. NINTH. Amendment to Articles of Incorporation. The Corporation shall have the right to amend, alter, change or repeal any provision contained in these Articles or any provision that may be added or inserted in these Articles, provided that: (a) Such amendment, alteration, change, repeal, addition or insertion is consistent with law and is accomplished in the manner now or hereafter prescribed by statute or these Articles; (b) Any provision of these Articles which requires, or the change of which requires, the vote or consent of all or a specific number or percentage of the holders of shares of any class or series shall not be amended, altered, changed or repealed by any lesser amount, number or percentage of votes or consents of such class or series; and (c) Article Seventh and Article Eighth may not be amended, altered, changed or replaced without the affirmative vote or consent of the holders of an aggregate of two-thirds of the total number of votes which could be cast by the holders of all shares of stock of the Corporation. Any rights at any time conferred upon the shareholders of the Corporation are granted subject to the provisions of this Article. Every amendment to the Articles shall be proposed by either the Board of Directors by the adoption of a resolution setting forth the proposed amendment or by petition of shareholders entitled to cast at least ten percent of the votes which all shareholders are entitled to cast thereon, setting forth the proposed amendment, which petition shall be directed to, and filed with, the Board of Directors. The preceding sentence shall be interpreted in the same manner as the first sentence of section 802 of the Business Corporation Law of 1933, as amended by the act of August 27, 1963 (P.L.1355, No.534). TENTH. By-Laws. By-Laws of the Corporation may be adopted, amended or repealed by the Board of Directors to the full extent permitted by law. ELEVENTH. (a) Directors and Officers as Fiduciaries. A director or officer of the Corporation shall stand in a fiduciary relation to the Corporation and shall perform his duties as a director or officer, including his duties as a member of any committee of the Board upon which he may serve, in good faith, in a manner he reasonably believes to be in the best interests of the Corporation, and with such care, including reasonable inquiry, skill and diligence, as a person of ordinary prudence would use under similar circumstances. In performing his duties, a director or officer shall be entitled to rely in good faith on information, opinions, reports or statements, including financial statements and other financial data, in each case prepared or presented by: one or more officers or employees of the Corporation whom the director or officer reasonably believes to be reliable and competent with respect to the matters presented; counsel, public accountants or other persons as to matters that the director or officer reasonably believes to be within the professional or expert competence of such person; or a committee of the Board of Directors upon which the director or officer does not serve, duly designated in accordance with law, as to matters within its designated authority, which committee the director or officer reasonably believes to merit confidence. A director or officer shall not be considered to be acting in good faith if he has knowledge concerning the matter in question that would cause his reliance to be unwarranted. Absent breach of fiduciary duty, lack of good faith or self-dealing, actions taken as a director or officer of the Corporation or any failure to take any action shall be presumed to be in the best interests of the Corporation. (b) Personal Liability of Directors. A director of the Corporation shall not be personally liable, as such, for monetary damages (including, without limitation, any judgment, amount paid in settlement, penalty, punitive damages or expense of any nature (including, without limitation, attorneys' fees and disbursements)) for any action taken, or any failure to take any action, unless the director has breached or failed to perform the duties of his office under these Articles, the By-laws or applicable provisions of law, and the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. (c) Personal Liability of Officers. An officer of the Corporation shall not be personally liable, as such, to the Corporation or its shareholders, for monetary damages (including, without limitation, any judgment, amount paid in settlement, penalty, punitive damages or expense of any nature (including, without limitation, attorneys' fees and disbursements)) for any action taken, or any failure to take any action, unless the officer has breached or failed to perform the duties of his office under these Articles, the By-laws or applicable provisions of law, and the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. (d) Interpretation of Article. The provisions of paragraphs (b) and (c) of this Article Eleventh shall not apply to the responsibility or liability of a director or officer, as such, pursuant to any criminal statute or for the payment of taxes pursuant to local, state or federal law. The provisions of this Article Eleventh have been adopted pursuant to the authority of section 204A (10) of the Pennsylvania Business Corporation Law, shall be effective as to any act or failure to act occurring on or after May 14, 1987, shall be deemed to be a contract with each director or officer of the Corporation who serves as such at any time while this Article is in effect, and are cumulative of and shall be in addition to and independent of any and all other limitations on the liabilities of directors or officers of the Corporation, as such, or rights of indemnification by the Corporation, to which a director or officer of the Corporation may be entitled, whether such limitations or rights arise under or are created by any statute, rule of law, by-law, agreement, vote of shareholders or directors or otherwise. Each person who serves as a director or officer of the Corporation while this Article Eleventh is in effect shall be deemed to be doing so in reliance on the provisions of this Article. No amendment to or repeal of this Article Eleventh, nor the adoption of any provision of these Articles inconsistent with this Article, shall apply to or have any effect on the liability or alleged liability of any director or officer of the Corporation for or with respect to any acts or omissions of such director or officer occurring prior to such amendment, repeal or adoption of an inconsistent provision. In any action, suit or proceeding involving the application of the provisions of this Article Eleventh, the party or parties challenging the right of a director or officer to the benefits of this Article shall have the burden of proof. TWELFTH. Headings. Any headings preceding the text of the several Articles, parts and paragraphs hereof are solely for the convenience of reference and shall not constitute a part of these Articles or affect their meaning, construction or effect. THIRTEENTH. Special Meetings of Shareholders. Special meetings of the shareholders may be called at any time by the president, or the Board of Directors, or shareholders entitled to cast at least one-fifth of the votes which all shareholders are entitled to cast at the particular meeting, or by such other officers or persons as may be provided in the Articles or Bylaws. The preceding sentence shall be interpreted in the same manner as the first sentence of subsection C of section 501 of the Business Corporation Law of 1933, as amended by the act of August 27, 1963 (P.L.1355, No.534). EXHIBIT (11) AMERICAN PREMIER UNDERWRITERS, INC. AND CONSOLIDATED SUBSIDIARIES Net Income Per Share of Common Stock For the Years Ended December 31, 1993, 1992 and 1991 (In Millions, Except Per Share Amounts)
Year Ended December 31, 1993 1992 1991 Income from continuing operations......................... $242.7 $ 50.9 $ 50.2 Income (loss) from discontinued operations................ (10.7) 1.7 (47.6) Cumulative effect of accounting change.................... - 252.8 - Net income.......................................... $232.0 $305.4 $ 2.6 Weighted average number of common shares.................. 47.0 47.2 48.7 Primary: Additional shares to be issued upon assumed exercise of stock options or conversion of Career Shares, reduced by the number of common shares which could have been purchased with the proceeds from exercise of such options or the conversion of such Career Shares.............. 1.2 .7 .7 Weighted average number of common shares as adjusted.......................................... 48.2 47.9 49.4 Net income (loss) per share of Common Stock as adjusted Continuing operations............................. $ 5.03 $ 1.06 $ 1.02 Discontinued operations........................... (.22) .04 (.97) Cumulative effect of accounting change............ - 5.28 - $ 4.81 $ 6.38 $ .05 Fully Diluted: Additional shares to be issued upon assumed exercise of stock options or conversion of Career Shares, reduced by the number of common shares which could have been purchased with the proceeds from exercise of such options or the conversion of such Career Shares.............. 1.1 .7 .7 Weighted average number of common shares as adjusted.......................................... 48.1 47.9 49.4 Net income (loss) per share of Common Stock as adjusted Continuing operations............................. $ 5.05 $ 1.06 $ 1.02 Discontinued operations........................... (.22) .04 (.97) Cumulative effect of accounting change............ - 5.28 - $ 4.83 $ 6.38 $ .05
EXHIBIT (12) AMERICAN PREMIER UNDERWRITERS, INC. AND CONSOLIDATED SUBSIDIARIES Calculation of Ratios of Earnings to Fixed Charges (Dollars in Millions)
Year Ended December 31, 1993 1992 1991 1990 1989 Tax rate.......................... 38% 39% 37% 34% 34% Income from continuing operations before income taxes......... $190.1 $ 84.1 $ 79.4 $ 95.6 $141.0 Interest and debt expense......... 62.8 69.6 65.3 50.8 27.7 Rent expense...................... 4.4 4.4 3.7 2.4 1.9 Preferred stock dividend require- ments of majority-owned subsidiaries................ - - - - .2 Earnings before fixed charges..... $257.3 $158.1 $148.4 $148.8 $170.8 Interest and debt expense......... $ 62.8 $ 69.6 $ 65.3 $ 50.8 $ 27.7 Capitalized interest.............. - - - - - Rent expense...................... 4.4 4.4 3.7 2.4 1.9 Pre-tax preferred stock dividend requirements of majority-owned subsidiaries................ - - - - .3 Fixed charges..................... $ 67.2 $ 74.0 $ 69.0 $ 53.2 $ 29.9 Ratio of Earnings to Fixed Charges..................... 3.8 2.1 2.2 2.8 5.7
As indicated in Note 14 of Notes to Financial Statements included in the Company's 1993 Annual Report to Shareholders and on Schedule VII of the Financial Statements Schedules, the Company guarantees payment of certain debt and other obligations of other issuers. To date, the Company has not been required to make any payments under the terms of such commitments and no payments under such commitments have been included in the above calculation. Exhibit 13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's Discussion and Analysis discusses the Company's financial condition and results of operations for each of the three years in the period ended December 31, 1993. The following is a description of the Company's Insurance segment and other operations. Amounts presented in the discussion and analysis relate only to continuing operations unless otherwise indicated. INSURANCE The Insurance segment consists primarily of a group of non-standard private passenger automobile insurance companies (the "NSA Group") and a business which sells workers' compensation insurance in California ("Republic Indemnity"). On May 20, 1993, the Company purchased Leader National Insurance Company ("Leader National"), a writer of non-standard automobile insurance, for $38.0 million. The non-standard automobile insurance companies insure risks not typically accepted for standard automobile insurance coverage because of the applicant's driving record, type of vehicle, age or other criteria. Also, a subsidiary of the Company is engaged in the writing of reinsurance. NON-INSURANCE OPERATIONS These operations include the manufacture of a variety of industrial products and the providing of other industrial services as well as energy and real estate operations. In connection with the Company's previously announced divestiture effort, two industrial businesses were sold during 1993 and one unit was sold in March of 1994. The sales of the other two companies are pending. These businesses do not comprise reportable industry segments of the Company and, accordingly, are not reportable as discontinued operations. LIQUIDITY AND CAPITAL RESOURCES The Company's management believes the following information may be useful in understanding the liquidity and capital resources of the Company.
(Dollars in Millions, Except Per Share Amounts) As of and for the years ended December 31, 1993 1992 1991 Cash, Parent Company short-term investments and Parent Company fixed maturity securities $669.2 $498.8 $562.7 Deduct items not readily available for corporate purposes: Cash held by the insurance operations (23.2) (26.8) (8.4) Securities held in bank escrow accounts (20.2) (65.5) (15.6) Private placement notes (14.6) (11.4) (1.4) Cash, temporary investments and marketable securities $611.2 $395.1 $537.3 Total debt as a percentage of total capital 23% 30% 31% Book value per share of Common Stock $36.30 $32.40 $31.23 Net cash provided by continuing operating activities $304.1 $217.9 $130.6
The Company's Federal income tax loss carryforward is available to offset taxable income and, as a result, the Company's requirement to currently pay Federal income tax is substantially eliminated. It is expected that the 1993 consolidated Federal income tax return will report a remaining net operating loss carryforward currently estimated at approximately $610 million, which will expire at the end of 1996 unless previously utilized. The $216.1 million increase during 1993 in the cash, temporary investments and marketable securities included in the preceding table was principally attributable to the Company's sale of its shares of the common stock of Tejas Gas Corporation ("Tejas") for net proceeds of $106.6 million, the sale of the Company's defense services operations for $94.0 million in cash, subject to a post- closing working capital adjustment, and the Company's sale of its limited 15 partnership units of Buckeye Partners L. P. ("Buckeye Units") previously held in the Parent Company investment portfolio (but not included in the aggregate of cash, temporary investments and marketable securities) for approximately $60.9 million. The Company also received $39.2 million in cash, including accrued interest, from the payment by General Cable Corporation ("General Cable") of its $36.9 million short-term note issued in connection with the Company's 1992 spin-off to its shareholders of substantially all of the Company's General Cable stock (the "Spin-off") and $26.0 million from payment of a note plus accrued interest relating to the prior sale of an offshore drilling rig. These increases in cash, temporary investments and marketable securities were partially offset by the Company's redemption of all of its outstanding 11 percent subordinated debentures due December 15, 1997 for $133.3 million plus accrued interest. Net Cash Provided by Continuing Operating Activities During each of the three years in the period ended December 31, 1993, the Company's continuing operations provided significant financial resources and sufficient cash flow to meet its operating requirements. Management expects that the Company's operating cash flow and financial resources will continue to be adequate to meet its operating needs in the short-term and long-term (i.e., more than twelve months) future. Cash flows of the Company may be influenced by a variety of factors, including changes in the property and casualty insurance industry, the insurance regulatory environment and general economic conditions. Operating cash flow of the insurance operations is dependent primarily on the growth of written premiums, the requirements for claim payments and the rate of return achieved on the insurance investment portfolio. Operating cash flow from the Company's other operations is primarily dependent on pre-tax income, adjusted for non-cash charges such as depreciation and amortization, and the operating working capital requirements of the businesses. Net Cash Provided by Continuing Operating Activities (continued) Cash provided by continuing operating activities in 1993 was $86.2 million higher than in 1992. This increase resulted primarily from an increase in the insurance operations' operating cash flow at Republic Indemnity and, to a lesser extent, at the NSA Group. While the NSA Group and Republic Indemnity experienced strong written premium growth during 1993, the favorable impact of such growth on the operating cash flow of the NSA Group has been partially offset by an increase in claims payments resulting from business expansion in previous periods. The payment of a note relating to the prior sale of an offshore drilling rig, the net proceeds resulting from the settlement of certain litigation relating to a previously owned subsidiary which was included in the General Cable Spin-off and lower interest payments due to the redemption of the Company's 11 percent subordinated debentures in July 1993 also contributed to the improved operating cash flow. These favorable variances were partially offset by a settlement payment resulting from the termination of a reinsurance contract, lower operating cash flow from the Company's industrial operations and lower interest receipts on the Parent Company investment portfolio. During 1993, the insurance operations generated $327.8 million of operating cash flow, approximately 66 percent of which was retained by the insurance companies and primarily used to purchase investments, principally marketable debt securities, and for the acquisition of Leader National. The remainder of the cash provided by the insurance operations was paid to the Parent Company principally through intercorporate tax allocation payments. The Company's insurance subsidiaries are restricted as to the amount of stockholder dividends they can pay to the Company without prior regulatory approval. Under these restrictions, the maximum amount of dividends which can be paid to the Company during 1994 by these subsidiaries is $96.5 million. Cash provided by continuing operating activities in 1992 was $87.3 million higher than in 1991. This increase resulted primarily from strong growth in written premiums at the NSA Group and, to a lesser extent, at Republic Indemnity. Cash provided by continuing operating activities was also favorably affected by increased operating results at operations which installed satellite ground station electronic equipment and by lower administrative costs. These favorable variances were partially offset by lower operating results at operations that manufacture aerial lift trucks and mobile tools, higher interest payments resulting from a full year of interest on the 10 7/8 percent subordinated notes issued in May 1991, and lower interest receipts on the Parent Company investment portfolio in the 1992 period versus 1991. 16 Investing and Financing Activity During 1993, sales of the Parent Company's Tejas shares and Buckeye Units, sales of the Company's defense services operations and two of the Company's industrial businesses and payment by General Cable of its short-term note provided approximately $294 million in the aggregate. In addition, the Company received $24.0 million from the sale of shares of Company Common Stock pursuant to the exercise of stock options. During this same period, the Company used $133.3 million to redeem all of its outstanding 11 percent subordinated debentures, $52.8 million for the payment of the purchase price contingency relating to the acquisition of the NSA Group, including $12.8 million of interest and $40 million of securities deposited by the Company at the end of 1992 in a bank escrow account, and $38.0 million in cash to acquire Leader National. The Company also used $38.2 million for the payment of Common Stock dividends, $17.5 million for capital expenditures and $4.5 million for the purchase of an investment in an insurance company located in the United Kingdom. The Company's insurance operations made net purchases of investments of $179.9 million during 1993 and the Company used approximately $165.5 million for net purchases of investments for the Parent Company investment portfolio. On February 10, 1994, the Company announced that it is considering a proposal from American Financial Corporation ("AFC") for the purchase by the Company of the personal lines insurance businesses owned by Great American Insurance Company ("GAIC") for a proposed purchase price of approximately $380 million in cash. GAIC's personal lines insurance businesses principally provide standard private passenger automobile insurance and multiperil homeowners' insurance. GAIC is a wholly-owned subsidiary of AFC. Completion of a transaction would be subject to certain conditions, including approval by a special committee of the Company's directors which has been empowered to negotiate all aspects of the proposed acquisition, including the proposed purchase price, receipt by the Company of an appropriate fairness opinion from an independent investment banking firm and any required regulatory approvals. AFC beneficially owned 40.5 percent of the Company's outstanding common shares at December 31, 1993 and AFC's Chairman, Chief Executive Officer and principal shareholder is Chairman and Chief Executive Officer of the Company. AFC's proposal would include the transfer by GAIC of an investment portfolio consisting principally of investment grade bonds with a market value of approximately $450 million. GAIC's personal lines businesses reported net earned premiums of $342 million and $322 million for 1993 and 1992, respectively. GAIC estimates that on a stand-alone basis the personal lines businesses had pro forma accident year statutory combined ratios of 99.0 percent and 99.1 percent for 1993 and 1992, respectively. GAIC also estimates that the net book value of the businesses that would be transferred at closing would be approximately $200 million. As part of the General Cable Spin-off, the Company retained a $255.0 million 9.98% subordinated note due 2007 issued by General Cable (the "General Cable Note"). Interest due prior to 1998 on the General Cable Note may be paid with additional 9.98% subordinated notes ("Interest Notes") in lieu of cash if certain earnings levels are not achieved by General Cable. During 1993, General Cable paid 100 percent, or $31.8 million, of the interest due on the General Cable Note with Interest Notes in lieu of cash. On February 14, 1994, General Cable delivered to the Company cash and promissory notes issued by a subsidiary of Rowan Companies, Inc. ("Rowan") totalling $52.1 million as a partial payment of the General Cable notes. The cash portion of the payment was $10.4 million. The Rowan notes, which are guaranteed by Rowan, have a face value of $41.7 million, an interest rate of 7 percent and are due in 1999. Quarterly interest payments are payable in cash beginning March 31, 1994. The cash and Rowan notes resulted from the sale by General Cable of its Marathon LeTourneau unit to Rowan. As a result of these receipts, the Company credited General Cable with $48.1 million of principal and interest payments on the General Cable notes which resulted in the payment in full of the $31.8 million of Interest Notes and reduced the principal amount of the General Cable Note to $241.4 million from $255.0 million at December 31, 1993. Under the terms of General Cable's revolving credit and letter of credit facility with certain commercial banks, General Cable is required to exercise its option, if available, to pay interest on the General Cable Note with Interest Notes in lieu of cash. In view of General Cable's consolidated net losses of $57.6 million for the twelve months ended December 31, 1993, the Company expects 17 that General Cable will pay approximately $12.0 million of interest due on March 31, 1994 with an Interest Note. See Note 2 of Notes to Financial Statements for a discussion of the recoverability of the General Cable Note and Interest Notes. On February 16, 1994, the Company called for redemption on March 25, 1994 all of the outstanding $16.2 million principal amount of its 9 1/2 percent subordinated debentures due August 1, 2002 at the redemption price of 100 percent of the principal amount plus accrued and unpaid interest through the redemption date. The Company plans to fund the redemption with internal cash resources and proceeds from the sale of a portion of the Parent Company's short-term investments. At December 31, 1993, the Parent Company investment portfolio held unrated or less than investment grade corporate debt securities, excluding the General Cable notes, with carrying values of $19.9 million. At that date, the Company's insurance operations held $117.9 million of such unrated or less than investment grade debt securities and preferred stocks. As a group, unrated or less than investment grade investments may be expected to generate higher average yields than investment grade securities. However, the risk of loss from default by the borrower may be greater with respect to such securities because these issuers usually have higher levels of indebtedness and may be more sensitive to adverse economic conditions than are investment grade issuers. In addition, there is only a thinly traded secondary market for such securities and market quotations are available from a limited number of dealers. In order to manage its risk associated with these investments, the Company limits its investment in unrated or less than investment grade securities of any one issuer and regularly monitors the condition of the issuers and their industries. At December 31, 1993, the largest investment of the Company and its insurance operations in such securities of any one issuer, excluding the General Cable notes, totaled $13.3 million. At December 31, 1993, management remained authorized by the Board of Directors to effect purchases of up to an additional 4.5 million shares of the Company's Common Stock, at market prices, through privately negotiated transactions or on the open market. The Company's principal source of cash from investing and financing activities during 1992 was maturities of the Parent Company investment portfolio (net of purchases of investments) which provided $113.2 million. In addition to $25 million transferred to General Cable as part of the Spin-off, the Company used cash of $36.8 million for Common Stock dividends, $36.8 million for purchases of shares of Company Common Stock, $14.6 million for capital expenditures and $13.1 million for the repayment of debt. The Company's insurance operations made net purchases of investments totaling $164.3 million. During 1991, the Company's principal source of cash from investing and financing activities was $148.7 million from the May issuance of its 10 7/8 percent subordinated notes. Also, the sale of the Company's interests in certain oil and gas properties generated approximately $26 million in cash. The principal uses of cash during 1991 were $142.7 million to acquire shares of the Company's Common Stock and $72.4 million of net purchases of investments for the Parent Company investment portfolio. In addition, the Company's insurance operations made net purchases of investments totaling $94.7 million, excluding intercorporate investment transactions. During each of the three years in the period ended December 31, 1993, the Company's continuing operations did not have large capital spending requirements. The Company presently has no plans or commitments for material capital expenditures. Borrowing Facilities and Debt Obligations Because of the Company's balances of cash and temporary investments and its positive cash flow from operating activities, the current borrowing requirements for the Company's existing businesses are not significant. At December 31, 1993, the Company's total debt to total capital ratio decreased to 23 percent from 30 percent at year-end 1992. The decrease was primarily due to the 1993 redemption of the Company's 11 percent subordinated debentures. Total capital as defined for this ratio consists of debt, minority interests in subsidiaries and common shareholders' equity. On the basis of this ratio and other relevant factors, management believes that the Company has additional borrowing capacity which may be available to expand its current businesses or for acquisitions. The Company is in compliance with all of its debt covenants, none of which are materially restrictive. Adjustments of Estimated Pre-reorganization Liabilities During 1993 and 1992, the Company increased its accruals for its net probable liability for claims and contingencies arising from events and circumstances preceding the Company's 1978 18 reorganization. In 1993, the Company accrued $14.0 million for pre- reorganization environmental claims and related expenses. In 1992, the Company accrued $15.0 million for pre-reorganization personal injury and environmental claims and related expenses. Consistent with the Company's reorganization accounting policy, such amounts were charged to capital surplus rather than income. See Notes 1, 11 and 12 of Notes to Financial Statements. In management's opinion, the outcome of these claims and contingencies will not, individually or in the aggregate, have a material adverse effect on the Company's financial condition or results of operations. Net Cash (to) from Discontinued Operations During 1993, discontinued operations, which consisted of the Company's defense services operations, provided $8.3 million of cash. During the period from January 1, 1992 until the July 1, 1992 date of the General Cable Spin-off, the General Cable businesses required $36.9 million, principally to fund their working capital requirements. Also included in cash provided to discontinued operations for 1992 is $1.3 million to fund expenses related to the General Cable Spin-off and $1.6 million received from the defense services operations. During 1991, cash from discontinued operations totaled $68.1 million. RESULTS OF OPERATIONS Analysis of Continuing Operations Income from continuing operations was $242.7 million, or $5.03 per share, for 1993 as compared with $50.9 million, or $1.08 per share, for 1992. Results for 1993 include tax benefits of $132 million, or $2.74 per share, attributable to increases in the Company's net deferred tax asset. Exclusive of the deferred tax asset adjustment, income from continuing operations for 1993 was $110.7 million, or $2.29 per share. Income from continuing operations before income taxes for 1993 increased to $190.1 million from $84.1 million for the 1992 period. The increase was principally due to pre-tax gains of approximately $80.0 million and $18.5 million, respectively, from the sale of the Company's Tejas shares and Buckeye Units, improved operating results in the Company's Insurance segment and higher interest and dividend income generated from the Parent Company investment portfolio, partially offset by provisions for expected losses associated with the intended divestitures of the Company's non-insurance operations. In 1993 and 1992, the Company recognized approximately $25.4 million and $12.7 million, respectively, of interest on the General Cable Note, of which $31.8 million in Interest Notes was paid in full by General Cable on February 14, 1994. For further information, see "Liquidity and Capital Resources - Investing and Financing Activity". Such interest, which is a component of interest and dividend income, was approximately 13 percent and 15 percent, respectively, of the Company's 1993 and 1992 income from continuing operations before income taxes. The 1992 income from continuing operations of $50.9 million increased from $50.2 million reported in 1991, principally due to higher interest and dividend income generated from the Parent Company's investments and lower general and administrative expenses, partially offset by higher interest expense, a provision for an environmental claim settlement and slightly lower operating results. An increase in income per share from continuing operations occurred during 1992, as compared with 1991, largely because fewer average shares were outstanding during 1992, as compared with the prior year. Income from continuing operations in 1991 included restructuring provisions related to certain non-insurance businesses and write-downs in the carrying value of certain Parent Company equity investments, totaling $12.6 million net of tax, or $.26 per share. INSURANCE Revenues in the Insurance segment increased to $1,405.8 million in 1993 as compared with $1,127.3 million for 1992. The increase was primarily due to an increase in earned premiums at both the NSA Group and Republic Indemnity. Investment income before realized gains and losses on sales of investments also increased due to higher average investment balances primarily due to increased premiums, partially offset by a decrease in the average yield on the insurance operations' investment portfolio. Operating income in 1993 increased to $167.4 million as compared with $143.5 million in 1992, primarily due to improved underwriting results at Republic Indemnity and higher investment income, partially offset by lower net realized gains. Net realized gains from sales of investment securities in the insurance operations' portfolio totaled $17.5 million for 1993 compared with $23.6 million for 1992. See Note 3 of Notes to Financial Statements for further information regarding gross realized and unrealized investment gains and losses. 19 Revenues in the Insurance segment increased during 1992, as compared with 1991, primarily due to an increase in earned premiums at both the NSA Group and Republic Indemnity. Investment income before realized gains and losses on sales of investments also increased due to higher average investment balances. Operating income decreased, as compared with 1991, principally due to lower net gains on sales of investments and the inclusion in 1991 results of certain one-time purchase accounting benefits. Net realized gains from sales of investment securities in the insurance operations' portfolio totaled $23.6 million for 1992 compared with $26.5 million in 1991. Underwriting profitability of the insurance operations is measured by the combined ratio which, according to generally accepted accounting principles ("GAAP"), is calculated as the quotient of (a) the sum of insurance losses and loss adjustment expenses ("LAE"), policyholder dividends and commissions and other insurance expenses, excluding amortization of cost in excess of net assets acquired, divided by (b) premiums earned, as reflected in the accompanying financial statements. Underwriting results are generally considered profitable when the combined ratio is under 100 percent. The GAAP combined ratio for the Insurance segment was 96.2 percent in 1993, 97.5 percent in 1992 and 97.0 percent in 1991, excluding the unusual purchase accounting benefit. In October 1993, the Clinton Administration introduced in Congress proposed legislation called the Health Security Act (the "HSA"), which would guarantee all Americans access to comprehensive health care services provided through health plans. If the HSA were enacted, health plans would provide medical treatment for injuries sustained in the workplace or in an automobile accident. Workers' compensation and automobile insurers would continue to be responsible for the costs of treatment covered by their policies and would reimburse health plans for services provided. The HSA also would create a Commission on Integration of Health Benefits, which would study the feasibility and appropriateness of transferring to health plans financial responsibility for all medical benefits covered under workers' compensation and automobile insurance and would submit a report to the President by July 1, 1995 that would provide a detailed plan for integration if integration is recommended. The Company is unable to predict whether or in what form the HSA will be enacted or, if enacted, what effect it will have on the Company's insurance operations. However, depending on its actual terms, the HSA, and any subsequent legislation mandating such integration, could potentially have a material adverse effect on the Company's future insurance operations. NSA Group In general, automobile coverage written by the NSA Group is sold to drivers who have not been accepted for coverage by a writer of standard risks due to driving history, type of automobile, age of insured or other factors. Because it can be viewed as a residual market, the size of the non-standard private passenger automobile insurance market changes with the insurance environment. Management of the Company believes the non-standard market has experienced significant growth in recent years as standard insurers have become more restrictive in the types of risks they will write. During the past three years, the NSA Group continued to obtain new licenses to write business in additional jurisdictions. Total licenses held by the NSA Group have grown by approximately 56 percent during this time period. Entering additional states, increased market penetration in its existing states and the purchase of Leader National have contributed to the significant premium growth achieved by the NSA Group during the last three years. Competitive pressures in the Company's non-standard automobile insurance markets may increase in 1994 and there can be no assurance that the annual increases in written and earned premiums achieved over the past three years can be sustained in 1994 or beyond. The NSA Group management believes it has achieved underwriting success over the past several years due, in part, to the refinement of various risk profiles, thereby dividing the consumer market into more defined segments which can either be excluded from coverage or surcharged adequately. Highly effective cost control measures, both in the underwriting and claims handling areas, further contribute to the underwriting profitability of the NSA Group. In addition, the NSA Group generally writes policies of short duration which allow more frequent rating evaluations of individual risks, providing management greater flexibility in the ongoing assessment of the business. The following table presents certain information with respect to the NSA Group's insurance operations. The 1991 data excludes the unusual purchase accounting benefit of $5.4 million. 20
(Dollars in Millions) Years Ended December 31, 1993 1992 1991 Net Written Premiums $901.9 $660.4 $509.8 Net Earned Premiums $804.4 $594.8 $492.3 Loss and LAE 575.8 414.8 343.9 Underwriting Expenses 204.4 156.7 124.5 Underwriting Profit $ 24.2 $ 23.3 $ 23.9 GAAP Ratios: Loss and LAE Ratio 71.6% 69.7% 69.9% Underwriting Expense Ratio 25.4 26.4 25.2 Combined Ratio 97.0% 96.1% 95.1% Statutory Ratios: Loss and LAE Ratio 72.5% 69.7% 70.5% Underwriting Expense Ratio 24.4 26.1 26.5 Combined Ratio 96.9% 95.8% 97.0% Total Private Passenger Automobile Insurance Industry Statutory Combined Ratio(1) 102.0%(Est.)102.0% 104.7%
(1) Industry information was derived from Best's Insurance Management Reports Property/Casualty Supplement (January 3, 1994 edition). The comparison shown is to the private passenger automobile insurance industry. Although the Company believes that there is no reliable regularly published combined ratio data for the non-standard automobile insurance industry, the Company believes that such a combined ratio would present a less favorable comparison in that it would be lower than the private passenger automobile industry average shown above. The NSA Group reported earned premiums of $804.4 million and underwriting profit of $24.2 million for 1993 as compared with 1992 amounts of $594.8 million and $23.3 million, respectively. The growth in both earned premiums and net written premiums of over 35 percent during 1993 was principally due to the pursuit of business in new markets and the trend over recent years whereby the standard insurers have become more restrictive in the types of risks they are willing to write. The acquisition of Leader National in the second quarter of 1993 also contributed to the premium growth. The combined ratio for the NSA Group was 97.0 percent compared with 96.1 percent for 1992. The increase in the combined ratio for 1993 was primarily caused by rate adjustments which more favorably affected 1992 underwriting results and an increase in losses in the 1993 first quarter resulting from a more severe winter than in the prior period. Partially offsetting these factors was a decrease in the underwriting expense ratio as growth in earned premiums outpaced associated expenses. The NSA Group reported earned premiums of $594.8 million and underwriting profit of $23.3 million for 1992, as compared with 1991 amounts of $492.3 million and $29.3 million, respectively. The 1991 underwriting results for the NSA Group include the above mentioned one-time purchase accounting benefit of $5.4 million. The NSA Group's 1992 combined ratio was 96.1 percent compared with 95.1 percent for 1991, excluding the unusual benefit. In addition, 1991 was favorably affected by differences between the actual 1991 profitability of the unearned premiums purchased as part of the acquisition of the NSA Group and estimates thereof made in the allocation of the purchase price. Excluding the effects of these differences and the unusual purchase accounting benefit, the 1991 combined ratio of the NSA Group was approximately 97 percent. Republic Indemnity Republic Indemnity's workers' compensation insurance operations are highly regulated by California state authorities. In addition, these insurance operations are affected by employment trends in their markets, litigation activities, legal and medical costs, use of vocational rehabilitation programs and the filing of traditionally non-occupational injuries, such as stress and trauma claims. While higher claims costs are ultimately reflected in premium rates, there historically has been a time lag of varying periods between the incurrence of higher claims costs and premium rate adjustments, which may result in periods of unfavorable underwriting results. Management believes that Republic Indemnity's stringent underwriting standards, disciplined claims philosophy, expense containment and reputation with insureds have combined to produce superior underwriting results as compared to the industry in general. 21 The following table presents certain information with respect to Republic Indemnity's insurance operations.
(Dollars in Millions) Years Ended December 31, 1993 1992 1991 Net Written Premiums $465.8 $397.0 $353.1 Net Earned Premiums $458.5 $394.1 $351.6 Loss and LAE 270.2 261.8 233.7 Underwriting Expenses 70.6 63.3 57.6 Policyholder Dividends 93.2 67.5 58.9 Underwriting Profit $ 24.5 $ 1.5 $ 1.4 GAAP Ratios: Loss and LAE Ratio 59.0% 66.4% 66.4% Underwriting Expense Ratio 15.4 16.1 16.4 Policyholder Dividend Ratio 20.3 17.1 16.7 Combined Ratio 94.7% 99.6% 99.5% Statutory Ratios: Loss and LAE Ratio 59.0% 69.1% 66.5% Underwriting Expense Ratio 15.4 16.0 16.2 Total Loss and Expense Ratio 74.4 85.1 82.7 Policyholder Dividend Ratio 13.7 11.6 17.7 Combined Ratio 88.1% 96.7% 100.4% Total Workers' Compensation Industry Statutory Combined Ratio(1) 111.5%(Est.)121.5% 122.6%
(1) Industry information was derived from Best's Insurance Management Reports Property/Casualty Supplement (January 3, 1994 edition). Republic Indemnity reported earned premiums of $458.5 million for 1993 compared with $394.1 million in 1992. An underwriting profit of $24.5 million was reported for 1993 as compared with an underwriting profit of $1.5 million for 1992. The increase in both earned premiums and net written premiums of approximately 17 percent for 1993 was primarily due to improvement in the Company's relative competitive position in the industry resulting in part from the withdrawal of several workers' compensation carriers from the Los Angeles, California market. In addition, the California State Fund, the largest writer of workers' compensation insurance in California, reduced its policyholder dividends during 1992 making its program less attractive to the market. During 1993, Republic Indemnity's underwriting results benefited from a decrease in the frequency and severity of losses, in part due to a reduction in fraudulent claims, and a lower underwriting expense ratio as compared with the prior year. Republic Indemnity had a combined ratio of 94.7 percent and 99.6 percent for 1993 and 1992, respectively. In July 1993, California enacted legislation (the "Reform Legislation") effecting significant changes in the workers' compensation insurance system. The Reform Legislation effected an immediate overall 7 percent reduction in workers' compensation insurance premium rates; authorized the Insurance Commissioner to approve further reductions in premium rates so long as the further reduced rates are "adequate"; prohibited the Insurance Commissioner, prior to January 1, 1995, from approving any premium rate that is greater than the reduced rates effected by the Reform Legislation; and replaced the workers' compensation insurance minimum rate law, effective January 1, 1995, with a procedure permitting insurers to use any rate within 30 days after filing it with the Insurance Commissioner unless the rate is disapproved by the Insurance Commissioner. On December 1, 1993, the Insurance Commissioner ordered an additional 12.7 percent minimum premium rate decrease effective January 1, 1994 for new and renewal policies entered into on and after January 1, 1994. The Reform Legislation also increased statutory workers' compensation benefits for temporary and permanent disability commencing July 1, 1994 and increasing in 1995 and 1996, expanded the rights of employers under workers' compensation insurance policies and introduced several reforms intended to reduce workers' compensation costs. The reforms include a tightening of the standards for job-related stress and post-termination claims, introducing measures designed to curb medical costs, limiting the frequency of medical-legal evaluations, capping the amount of compensable vocational rehabilitation expenses and strengthening penalties for fraudulent claims. The Reform Legislation also provides for the licensing of "managed" health care organizations to provide care for injuries covered by workers' compensation and generally permits employers to require employees to obtain medical services for 22 their work-related injuries for a certain period of time from a health care organization selected by the employer, unless the employee chooses to be treated by a physician designated by the employee prior to the injury. If the workers' compensation cost savings resulting from the Reform Legislation are inadequate to offset the impact of premium rate reductions, increased benefits and expanded employers' rights, the profitability of the Company's workers' compensation insurance operations could be adversely affected. Management believes that this effect may be mitigated by Republic Indemnity's ability to reduce its relatively high policyholder dividends, although a reduction in dividends could affect premium volume. In addition, greater price competition is expected to result when the repeal of the minimum premium rates that now govern all workers' compensation insurers becomes effective, and Republic Indemnity's operations could be affected adversely. The Company believes that the Reform Legislation's provisions relating to "managed" health care organizations will probably result in certain workers' compensation insurers seeking affiliation, contractual or otherwise, with one or more health care organizations. The Company continues to evaluate the implications of these provisions but is unable to predict whether their ultimate impact on its workers' compensation insurance operations will be positive or adverse. While Republic Indemnity has continued to operate on a profitable basis, no assurances can be given that it could continue to do so in the face of adverse regulatory developments. Republic Indemnity reported earned premiums of $394.1 million for 1992, a 12 percent increase over 1991 earned premiums of $351.6 million. Underwriting results remained favorable for these operations as evidenced by the 1992 combined ratio of 99.6 percent as compared to 99.5 percent for the 1991 period. Interest and Dividend Income Interest and dividend income of the Parent Company investments increased $7.9 million in 1993, as compared with 1992, due primarily to a $14.6 million increase in interest income on the General Cable notes largely attributable to the inclusion of a full year of interest in 1993 as compared with 1992. The interest income on the General Cable notes in 1993 consisted of $25.4 million on the General Cable Note, all of which was paid or is payable with Interest Notes, $1.2 million of interest on the short-term note (the full principal and accrued interest of which was paid in cash on July 2, 1993) and $1.8 million of interest on the Interest Notes (payable in cash). For a discussion of the recoverability of the General Cable Note and Interest Notes and for more information regarding the payment in full by General Cable of the Interest Notes and accrued interest, see Note 2 of Notes to Financial Statements and "Liquidity and Capital Resources - Investing and Financing Activity", respectively. The increase in interest income due to the General Cable notes was partially offset by lower interest income on the Parent Company investment portfolio attributable to a decrease in average yields, partially offset by higher average investment balances, as compared with 1992. Interest and dividend income of the Parent Company investments for 1992 and 1991 was $45.5 million and $35.5 million, respectively. The increase in interest and dividend income for 1992, as compared with 1991, was due to 1992 interest income of $13.8 million on the General Cable notes (consisting of $12.7 million of interest on the General Cable Note paid with an Interest Note and $1.1 million of interest on the short-term note paid in cash), partially offset by reduced average yields on investments during 1992 as compared with 1991. Also, the 1991 results include net realized losses of $4.3 million on sales of debt securities in the Parent Company investment portfolio. General Cable may elect to pay interest on the General Cable Note with Interest Notes if certain earnings levels are not achieved by General Cable. The recognition of interest income on the General Cable notes by the Company is subject to periodic evaluations of General Cable's financial position, cash flows and operating results by the Company's management. Interest and Debt Expense Interest and debt expense for 1993 decreased $6.8 million compared with 1992 due primarily to the Company's July 30, 1993 redemption of all of its 11 percent subordinated debentures. Interest and debt expense increased to $69.6 million in 1992 from $65.3 million in 1991, due primarily to the incurrence of interest expense for the full year of 1992 on the $150.0 million principal amount of the Company's 10 7/8 percent subordinated notes which were issued in May 1991. 23 Other Expense (Income) - Net Other expense (income) - net consists of the following:
(In Millions) For the Years Ended December 31, 1993 1992 1991 Settlement of claims and contingencies, net $ 6.3 $ 6.5 $ (3.2) Minority interests in earnings of consolidated subsidiaries (1.5) (1.4) (.6) Taxes other than income 6.7 6.7 6.2 Other 4.1 4.3 2.7 Total $ 15.6 $ 16.1 $ 5.1
The component, "Settlement of claims and contingencies, net", in the above table includes expense in 1993 which was primarily attributable to a $2 million provision for environmental costs relating to the Company's previously-owned petroleum products pipeline operations and to certain litigation settlements, none of which are individually, or in the aggregate, material to the Company's results of operations. The expense reported in such component in 1992 was primarily attributable to a $4 million provision recorded in connection with an agreement with the U.S. Environmental Protection Agency for the settlement of post-reorganization environmental claims relating to the clean-up of cadmium contamination at a previously-owned battery manufacturing facility. The income reported in such component in 1991 was almost entirely due to the favorable resolutions of certain contingencies related to the 1986 sale of the Company's petroleum products pipeline operations. Income Taxes For 1993, the Company recorded an income tax benefit of $52.6 million as compared with income tax expense of $33.2 million and $29.2 million for 1992 and 1991, respectively. The 1993 benefit is attributable to an increase of $132.0 million in the Company's net deferred tax asset due to revisions to the estimated future taxable income during the Company's tax loss carryforward period. For more information concerning these adjustments, see Note 7 of Notes to Financial Statements. As of December 31, 1993, the Company's gross deferred tax asset was $491.0 million, which after a valuation allowance of $195.2 million resulted in a net deferred tax asset of $295.8 million. The net deferred tax asset represents the portion of the gross deferred tax asset which management believes is more likely than not to be realized consistent with the recognition criteria as set forth in Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". Management believes that it is more likely than not that the net deferred tax asset at December 31, 1993 will be realized primarily through the generation of taxable income during the loss carryforward period. This belief derives from an analysis of estimated future taxable income based on certain assumptions concerning future events during the loss carryforward period. The estimate of future taxable income used in determining the net deferred tax asset is not necessarily indicative of the Company's future results of operations. As is the case with any estimate of future results, there will be differences between assumed and actual economic and business conditions of future periods. Moreover, the estimate may also be affected by unpredictable future events, including but not necessarily limited to changes in the Company's capital structure and future acquisitions and dispositions. Therefore, the analysis of estimated future taxable income will be reviewed and updated periodically, and any required adjustments, which may increase or decrease the net deferred tax asset, will be made in the period in which the developments on which they are based become known. Management believes that any future adjustments in the net deferred tax asset will not be as significant as those reported in 1993. The increase in income tax expense in 1992, as compared with 1991, is primarily due to a higher 1992 effective tax rate coupled with an increase in the Company's 1992 pre-tax income. Income tax expense for 1991 also includes a $2.0 million benefit from adjustments to the Company's provision for deferred state taxes. 24 AMERICAN PREMIER UNDERWRITERS, INC. AND CONSOLIDATED SUBSIDIARIES SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Millions, Except Per Share Amounts and Ratios) 1993 1992 1991 1990 1989 Income Statement Data:(1) Net Written Premiums $1,378.9 $1,067.3 $ 864.6 $ 345.1 $ 220.9 Insurance Revenues: Premiums Earned $1,273.6 $ 998.7 $ 845.6 $ 342.0 $ 231.1 Net Investment Income 114.7 105.0 97.9 51.6 36.8 Net Realized Gains (Losses) 17.5 23.6 26.5 (9.0) 3.1 Other Revenues 357.5 297.6 305.4 395.3 400.0 Total Revenues $1,763.3 $1,424.9 $1,275.4 $ 779.9 $ 671.0 Income from Continuing Operations before Income Taxes: Insurance Operations $ 167.4 $ 143.5 $ 144.5 $ 36.8 $ 37.4 Other Operations 22.7 (59.4) (65.1) 58.8 103.6 $ 190.1 $ 84.1 $ 79.4 $ 95.6 $ 141.0 Income from Continuing Operations(2) $ 242.7 $ 50.9 $ 50.2 $ 62.9 $ 92.6 Income from Continuing Operations Per Share(2) $ 5.03 $ 1.08 $ 1.03 $ 1.03 $ 1.32 Balance Sheet Data (at year-end):(1) Investments Held by Insurance Operations $1,602.7 $1,304.2 $1,121.9 $ 997.2 $ 488.3 Cash, Temporary Investments and Marketable Securities Other Than Those of Insurance Operations 611.2 395.1 537.3 458.6 1,146.7 Total Assets 4,049.6 3,486.2 3,330.0 3,280.1 2,962.9 Unpaid Losses and Loss Adjustment Expenses, Policyholder Dividends and Unearned Premiums 1,425.5 1,069.0 889.5 823.4 457.5 Debt 523.2 656.1 665.9 516.2 374.0 Common Shareholders' Equity 1,722.3 1,502.8 1,479.0 1,634.2 1,826.8 Book Value Per Share of Common Stock 36.30 32.40 31.23 31.00 27.84 Total Debt to Total Capital 23% 30% 31% 24% 17% Certain Financial Ratios and Other Data: Cash Dividends Declared Per Share of Common Stock $ .85 $ .81 $ .71 $ .53 $ .42 Statutory Surplus of Insurance Operations $ 567.3 $ 453.6 $ 392.9 $ 345.0 $ 157.7 Statutory Net Written Premiums to Statutory Surplus(3) 2.4x 2.3x 2.3x 2.2x 2.0x GAAP Combined Ratio 96.2% 97.5% 97.0% 99.9% 101.6% Statutory Combined Ratio 94.0% 96.5% 98.5% 100.1% 98.1% Industry Statutory Combined Ratio for Property and Casualty Insurers(4) 109.2% 115.8% 108.8% 109.6% 109.2%
(1) The Company's principal insurance operations were acquired on March 31, 1989 and December 31, 1990 in business acquisitions accounted for as purchases. Results of operations of the acquired businesses are included from the effective dates of the acquisitions and the net assets of the acquired companies are included as of the effective dates. Year-to-year comparisons are also affected by business dispositions and by restructuring provisions and certain unusual charges. See Note 2 of Notes to Financial Statements and "Management's Discussion and Analysis - Results of Operations" for further information. (2) The 1993 results include a $132 million, or $2.74 per share, tax benefit attributable to an increase in the Company's net deferred tax asset. See Note 7 of Notes to Financial Statements and "Management's Discussion and Analysis - Results of Operations". (3) For 1989 and 1990, the writings to surplus ratio is based on statutory surplus of Republic Indemnity only, excluding the statutory surplus of the NSA Group, which was acquired on December 31, 1990 and a reinsurance subsidiary which had insignificant written premiums in both years. (4) Ratios for 1989 and 1990 are derived from A.M. Best's Aggregates and Averages Property/Casualty (1992 edition). The ratios for 1991 and 1992 and the ratio estimate for 1993 are derived from Best's Insurance Management Reports Property/Casualty Supplement (January 3, 1994 edition). 25 AMERICAN PREMIER UNDERWRITERS, INC. AND CONSOLIDATED SUBSIDIARIES
INCOME STATEMENT For the years ended December 31, (In Millions, Except Per Share Amounts) 1993 1992 1991 Revenues Insurance operations Premiums earned $1,273.6 $ 998.7 $ 845.6 Net investment income 114.7 105.0 97.9 Net realized gains 17.5 23.6 26.5 Other operations Net sales 198.3 255.4 279.7 Interest and dividend income 53.4 45.5 35.5 Net realized gains (losses) 105.8 (3.3) (9.8) 1,763.3 1,424.9 1,275.4 Expenses Insurance operations Losses 726.9 579.5 488.9 Loss adjustment expenses 130.0 107.1 90.4 Commissions and other insurance expenses 288.3 229.7 187.3 Policyholder dividends 93.2 67.5 58.9 Other operations Cost of sales 88.9 143.8 157.6 Operating expenses 105.7 107.3 105.9 Corporate and administrative expenses 20.2 20.2 25.8 Interest and debt expense 62.8 69.6 65.3 Gain on issuance of common stock by a subsidiary - - (.2) Provision for loss on sale of subsidiaries and asset impairment 41.6 - 11.0 Other expense (income), net 15.6 16.1 5.1 1,573.2 1,340.8 1,196.0 Income from continuing operations before income taxes 190.1 84.1 79.4 Income tax (expense) benefit 52.6 (33.2) (29.2) Income from continuing operations 242.7 50.9 50.2 Discontinued operations: Income (loss) from discontinued operations 2.8 1.7 (47.6) Loss on disposal (13.5) - - Cumulative effect of accounting change - 252.8 - Net income $ 232.0 $ 305.4 $ 2.6 Earnings per share data: Continuing operations $ 5.03 $ 1.08 $ 1.03 Discontinued operations (.22) .04 (.98) Cumulative effect of accounting change - 5.36 - $ 4.81 $ 6.48 $ .05 Weighted average number of common shares 48.2 47.2 48.7
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 26 AMERICAN PREMIER UNDERWRITERS, INC. AND CONSOLIDATED SUBSIDIARIES
BALANCE SHEET (In Millions, Except Share Data) December 31, 1993 1992 Assets Investments held by insurance operations Fixed maturity securities Held for investment-stated at amortized cost (market $1,173.0 and $951.2) $1,113.0 $ 924.2 Available for sale-stated at market (cost $408.7 and $310.1) 432.8 325.8 Short-term investments 56.9 44.1 Equity in affiliates - 10.1 1,602.7 1,304.2 Parent Company investments Fixed maturity securities Held for investment-stated at amortized cost (market $251.7 and $252.7) 248.9 250.8 Short-term investments 387.9 211.8 General Cable Corporation notes 286.8 255.0 Equity in affiliates 20.1 83.7 943.7 801.3 Cash 32.4 36.2 Accrued investment income 43.4 41.9 Agents' balances and premiums receivable 289.9 198.4 Reinsurance receivable 47.6 - Other receivables 51.4 57.4 Deferred policy acquisition costs 77.4 50.4 Property, plant and equipment 95.2 97.6 Cost in excess of net assets acquired 406.8 368.4 Deferred tax asset 295.8 245.4 Net assets of discontinued operations 9.8 111.5 Other assets 153.5 173.5 Total $4,049.6 $3,486.2 Liabilities And Common Shareholders' Equity Unpaid losses and loss adjustment expenses $ 961.4 $ 763.5 Policyholder dividends 111.8 81.2 Unearned premiums 352.3 224.3 Debt 523.2 656.1 Minority interests in subsidiaries 15.1 16.6 Accounts payable and other liabilities 363.5 241.7 Total liabilities 2,327.3 1,983.4 Common Stock, $1.00 par value - outstanding or issuable 47,446,094 and 46,382,170 shares 47.4 46.4 Capital surplus 746.2 738.9 Retained earnings (from October 25, 1978) 912.3 707.0 Net unrealized gains on investments 16.4 10.5 Total common shareholders' equity 1,722.3 1,502.8 Total $4,049.6 $3,486.2
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 27
AMERICAN PREMIER UNDERWRITERS, INC. AND CONSOLIDATED SUBSIDIARIES STATEMENT OF CASH FLOWS For the years ended December 31, (In Millions) 1993 1992 1991 Cash flows of operating activities: Income from continuing operations $ 242.7 $ 50.9 $ 50.2 Adjustments to reconcile income from continuing operations to net cash provided by continuing activities Deduction in lieu of current Federal income tax - - 24.3 Deferred Federal income tax (57.9) 28.9 - Depreciation, depletion and amortization 32.8 33.5 34.2 Net gain on disposals of businesses, investments and property, plant and equipment (80.6) (19.2) (10.9) Changes in assets and liabilities, excluding effects of acquisitions and divestitures of businesses Increase in receivables (96.9) (47.2) (5.7) (Increase) decrease in other assets 6.7 8.3 (33.5) Increase (decrease) in accounts payable and other liabilities 12.7 (16.9) (.4) Increase in unpaid losses and loss adjustment expenses 94.8 99.6 62.2 Increase (decrease) in policyholder dividends 30.4 11.7 (3.1) Increase in unearned premiums 105.7 68.6 19.0 Litigation settlement 15.6 - - Other, net (1.9) (.3) (5.7) Net cash flows of operating activities 304.1 217.9 130.6 Cash flows of investing activities: Purchases of investments (735.5) (1,009.2) (1,014.3) Sales and maturities of investments 734.3 712.5 904.5 Net (increase) decrease in temporary investments (139.8) 220.6 (87.3) Acquisitions of businesses, net of cash acquired (95.3) - (2.3) Capital expenditures (17.5) (14.6) (19.7) Sales of businesses 89.7 - - Other, net (1.4) 2.0 22.2 Net cash flows of investing activities (165.5) (88.7) (196.9) Cash flows of financing activities: Repayment of debt (135.1) (13.1) (4.5) Common Stock dividends (38.2) (36.8) (32.3) Exercise of stock options and conversion of Career Shares 24.0 12.6 11.6 Purchases of Company Common Stock (1.9) (36.8) (142.7) Issuance of debt 1.8 3.1 151.8 Other, net (1.3) .2 (1.0) Net cash flows of financing activities (150.7) (70.8) (17.1) Net cash flows from continuing operations (12.1) 58.4 (83.4) Net cash (to) from discontinued operations 8.3 (36.6) 68.1 Increase (decrease) in cash (3.8) 21.8 (15.3) Cash - beginning of year 36.2 14.4 29.7 Cash - end of year $ 32.4 $ 36.2 $ 14.4
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 AMERICAN PREMIER UNDERWRITERS, INC. AND CONSOLIDATED SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Effective March 25, 1994, the Company changed its corporate name from The Penn Central Corporation to American Premier Underwriters, Inc. in order to better reflect its new identity as a property and casualty insurance specialist. Principles of Consolidation All majority-owned subsidiaries are consolidated, with the exception of the Company's defense services operations sold in August, 1993 and those businesses included in the 1992 Spin-off to the Company's shareholders of the Company's principal manufacturing operations which have been classified as discontinued operations. Intercompany transactions and balances are eliminated. Certain amounts in the consolidated financial statements for years prior to 1993 have been reclassified to conform to the current presentation. Revenue Recognition Premiums are earned ratably over the terms of the insurance policies, net of reinsurance ceded. Income Taxes Effective January 1, 1992, the Company elected to adopt Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes". Prior years' financial statements have not been restated to apply the provisions of this pronouncement. In periods prior to January 1, 1992, to the extent that no Federal income tax was payable because of the pre-reorganization net operating loss carryforward or tax losses attributable to disposition of pre- reorganization assets and liabilities, a deduction in lieu of current Federal income tax (which was not accruable or payable) was made from income and credited to capital surplus. Due to the Company's adoption of SFAS No. 109, this presentation has been discontinued. Refer to Note 7 for further explanation of the adoption of SFAS No. 109 and the cumulative effect of the accounting change. Investments During 1992, the Company revised its accounting policy for all investments in fixed maturity securities. Such securities which will be held for indefinite periods of time are classified as available for sale and are stated at market value, with net unrealized gains or losses (net of deferred income taxes) credited or charged to shareholders' equity. Investments in fixed maturity securities which the Company has both the intent and the ability to hold to maturity are stated at cost, adjusted for amortization of discount or premium unless there is an impairment of value which is determined to be other than temporary, in which case they are carried at estimated net realizable value. In certain limited circumstances, such as individual issuer credit deterioration, a major business combination or disposition or if required by insurance or other regulators, the Company may dispose of such investments prior to their scheduled maturities. The Company is not aware of any such circumstances which would be likely to cause a material amount of fixed maturity securities currently classified as held for investment to be sold prior to maturity. Short-term investments are carried at amortized cost which approximates market value. The Company uses the "specific identification" method of determining the cost of investments sold. For further information, see Notes 3 and 4. Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is provided principally using the straight-line method over the expected useful lives of the assets. Upon sale or retirement of significant assets, the cost and related accumulated depreciation are eliminated from the accounts, as applicable, and the resulting gain or loss is included in income. Cost in Excess of Net Assets Acquired The excess of the acquisition cost over the net assets of businesses acquired is being amortized using the straight-line method over periods not exceeding 40 years. At December 31, 1993 and 1992, accumulated amortization of cost in excess of net assets acquired totaled $42.9 million and $37.5 million, respectively. Deferred Policy Acquisition Costs Deferred policy acquisition costs applicable to unearned premiums are computed on a basis which gives recognition to underwriting expenses (commissions, premium taxes and certain other underwriting costs), loss, loss adjustment expense and policyholder dividend ratios and the anticipated expenses necessary to maintain policies in force. The deferred costs are limited to the difference between unearned premiums and expected related losses, loss 29 adjustment expenses and policyholder dividends, with subsequent amortization to income occurring ratably over the terms of the related policies. Limits on deferred costs are calculated separately for significant lines of business without any consideration for anticipated investment income. Unpaid Losses and Loss Adjustment Expenses The net liabilities stated for unpaid losses and loss adjustment expenses are based on (a) the accumulation of case estimates for losses reported on the direct business written; (b) estimates received from ceding reinsurers and insurance pools and associations; (c) estimates of unreported losses based on past experience, and (d) estimates of expenses for investigating and adjusting claims based on experience. These liabilities are subject to the impact of changes in claim amounts and frequency and other factors. In spite of the variability inherent in such estimates, management believes that the recorded liabilities for unpaid losses and loss adjustment expenses are adequate. Changes in estimates of the liabilities for unpaid losses and loss adjustment expenses are included in income in the period in which determined. Policyholder Dividends Dividends payable to policyholders represent management's estimate of amounts payable on participating policies which share in favorable underwriting results. The estimate is accrued during the period in which the related premium is earned. Changes in estimates are included in income in the period determined. Policyholder dividends do not become legal liabilities unless and until declared by the boards of directors of the insurance companies. Unearned Premiums Unearned premiums represent that portion of premiums written which is applicable to the unexpired terms of policies in force, generally computed by the application of daily pro rata fractions. On reinsurance assumed, unearned premiums are based on reports received from the ceding reinsurers and insurance pools and associations. Reinsurance Portions of the Company's policy coverages are reinsured under contracts with various reinsurers. The more significant contracts represent excess of loss treaties designed to limit the Company's potential liability on significant policy coverages. Reinsurance contracts do not relieve the Company from its obligations to policyholders. Effective January 1, 1993, the Company adopted SFAS No. 113, "Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration Contracts". This statement requires ceding insurers to (a) report separately as assets estimated reinsurance receivables arising from reinsurance contracts and amounts paid to reinsurers relating to the unexpired portions of such contracts and (b) include corresponding amounts in unpaid losses and loss adjustment expenses on a gross basis. Prior to the adoption of SFAS No. 113, assets related to reinsurance activities were recorded as reductions to the liabilities stated for unpaid losses and loss adjustment expenses and unearned premiums. Financial statements of prior periods have not been restated to reflect the provisions of this statement. Income on reinsurance contracts is recognized based on reports received from ceding reinsurers and insurance pools and associations. Capital Surplus Adjustments to claims and contingencies arising from events or circumstances preceding the Company's 1978 reorganization are reflected in capital surplus if the adjustments are not clearly attributable to post-reorganization events or circumstances. Such pre-reorganization claims and contingencies consist principally of personal injury claims by former employees of the Company's predecessor and claims relating to the generation, disposal or release into the environment of allegedly hazardous substances arising out of railroad operations disposed of prior to the 1978 reorganization. In periods prior to January 1, 1992, the deduction in lieu of current Federal income tax was credited to capital surplus. Fair Value of Financial Instruments Financial instruments are defined as cash, evidence of an ownership interest in an entity, or contracts relating to the receipt, delivery or exchange of financial instruments. The estimated fair value amounts of the Company's financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgement is necessarily required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in current market transactions. 30 The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. In addition, the fair value estimates presented herein are based on pertinent information available to management as of December 31, 1993. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and, therefore, current estimates of fair value may differ significantly from the amounts presented herein. The terms "fair value" and "market value" are used interchangeably in the financial statements and the notes thereto. Unless otherwise denoted, stated values of financial instruments approximate fair value. New Accounting Pronouncements In May 1993, the Financial Accounting Standards Board ("FASB") issued SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities", which the Company is required to adopt no later than 1994. The Company's planned adoption of SFAS No. 115 during 1994 is not expected to have a material effect on the Company's financial position or results of operations. In November 1992, the FASB issued SFAS No. 112, "Employers' Accounting for Postemployment Benefits", which the Company is required to adopt no later than 1994. An actuarial evaluation of the Company's postemployment benefits has been prepared. Based on this evaluation, the Company's planned adoption of SFAS No. 112 during 1994 is not expected to have a material effect on the Company's financial position or results of operations. 2. ACQUISITIONS AND DIVESTITURES On February 10, 1994, the Company announced that it is considering a proposal from American Financial Corporation ("AFC") for the purchase by the Company of the personal lines insurance businesses owned by Great American Insurance Company ("GAIC") for a proposed purchase price of approximately $380 million in cash. GAIC's personal lines insurance businesses principally provide standard private passenger automobile insurance and multiperil homeowners' insurance. GAIC is a wholly-owned subsidiary of AFC. Completion of a transaction would be subject to certain conditions, including approval by a special committee of the Company's directors which has been empowered to negotiate all aspects of the proposed acquisition, including the proposed purchase price, receipt by the Company of an appropriate fairness opinion from an independent investment banking firm, and any required regulatory approvals. AFC beneficially owned 40.5 percent of the Company's outstanding common shares at December 31, 1993 and AFC's Chairman, Chief Executive Officer and principal shareholder is Chairman and Chief Executive Officer of the Company. AFC's proposal would include the transfer by GAIC of an investment portfolio consisting principally of investment grade bonds with a market value of approximately $450 million. GAIC's personal lines businesses reported net earned premiums of $342 million and $322 million for 1993 and 1992, respectively. GAIC estimates that on a stand-alone basis the personal lines businesses had pro forma accident year statutory combined ratios of 99.0 percent and 99.1 percent for 1993 and 1992, respectively. GAIC also estimates that the net book value of the businesses that would be transferred at closing would be approximately $200 million. Leader National On May 20, 1993, the Company purchased Leader National Insurance Company ("Leader National") for $38 million in cash. Leader National writes non-standard private passenger automobile insurance and, to a lesser extent, non-standard commercial automobile insurance. The acquisition was accounted for as a purchase and the purchase price was allocated to the identifiable net assets of Leader National based upon an estimate of their fair values. The purchase price was approximately equal to the fair value of the net assets acquired. Leader National's assets, liabilities and results of operations are included with those of the Company's other private passenger automobile insurance companies as of the purchase date. Sale of Non-insurance Businesses On November 9, 1993, the Company sold all of its 1,982,646 shares of the common stock of Tejas Gas Corporation ("Tejas") in an underwritten public offering for net proceeds of $106.6 million. The Company's pre-tax gain from the sale was approximately $80.0 million. On August 25, 1993, the Company sold its defense services operations, excluding certain real estate being retained for sale by the Company, to Tracor, Inc. for $94 million in cash, subject to a post-closing working capital adjust 31 ment. As a result of the sale, the Federal Systems segment has been classified as discontinued operations for all periods presented. On May 25, 1993, the Company sold all of its 2,308,900 limited partnership units of Buckeye Partners, L.P. ("Buckeye Units") in an underwritten public offering for net proceeds of $71.6 million, of which $10.7 million was related to Buckeye Units held in the insurance operations' investment portfolio and $60.9 million was attributable to Buckeye Units held in the Parent Company investment portfolio. The Company's pre-tax gain from the sale was approximately $18.5 million. Of this amount, $2.8 million is related to the insurance operations' investments and accordingly, is included in "net realized gains" from insurance investments. The balance of $15.7 million, attributable to the Parent Company investments, is included in "net realized gains (losses)". The intended divestitures of businesses announced in December 1992 included five small diversified industrial companies, two of which were sold during 1993 for cash and notes aggregating $8 million. For 1993, the operations sold and to be sold had aggregate sales of $107.2 million and operated at break-even. At December 31, 1993, the aggregate book value of the three businesses remaining to be sold was $36.1 million, net of a provision recorded in 1993 to adjust such book value to net realizable value. In December 1992, the Company sold G&H Technology, Inc. for a note of approximately $11.0 million. Spin-off of Principal Manufacturing Operations On July 1, 1992, substantially all of the stock of the Company's subsidiary, General Cable Corporation ("General Cable"), which had been formed to own the Company's wire and cable, materials handling machinery and equipment and marine equipment manufacturing businesses (the "General Cable Businesses"), was spun off to the Company's shareholders (the "Spin-off"). As a result of the Spin- off, the General Cable Businesses have been classified as discontinued operations for all periods presented. As part of the Spin-off, the Company retained a $255 million 9.98 percent subordinated note due 2007 issued by General Cable (the "General Cable Note"), and also retained approximately 11.6 percent of the General Cable shares ("Retained Shares") for satisfaction of General Cable options granted by the Company to holders of Company stock options and Career Shares and for distribution from time to time under the Company's 1978 Plan of Reorganization. At December 31, 1993, AFC owned 44.6 percent of the outstanding shares of General Cable, excluding the Company's Retained Shares. Interest due prior to 1998 on the General Cable Note may be paid with additional notes ("Interest Notes") in lieu of cash if certain earnings levels are not achieved by General Cable. Specifically, if General Cable's consolidated net income for the twelve-month period ending on June 30 or December 31, as the case may be, immediately preceding any interest payment date is less than $5.0 million, General Cable may elect to pay up to 50 percent of such interest with additional notes. If General Cable has a consolidated net loss exceeding $2.5 million for such twelve-month period, it may elect to pay up to 100 percent of such interest with additional notes. During 1993, General Cable paid 100 percent, or $31.8 million, of the interest due on the General Cable Note with Interest Notes in lieu of cash. On February 14, 1994, General Cable delivered to the Company cash and promissory notes issued by a subsidiary of Rowan Companies, Inc. ("Rowan") totalling $52.1 million as a partial payment of the General Cable notes. The cash portion of the payment was $10.4 million. The Rowan notes, which are guaranteed by Rowan, have a face value of $41.7 million, an interest rate of 7 percent and are due in 1999. Quarterly interest payments are payable in cash beginning March 31, 1994. The cash and Rowan notes resulted from the sale by General Cable of its Marathon LeTourneau unit to Rowan. As a result of these receipts, the Company credited General Cable with $48.1 million of principal and interest payments on the General Cable notes which resulted in the payment in full of the $31.8 million of Interest Notes and reduced the principal amount of the General Cable Note to $241.4 million from $255.0 million at December 31, 1993. Under the terms of General Cable's revolving credit and letter of credit facility with certain commercial banks, General Cable is required to exercise its option, if available, to pay interest on the General Cable Note with Interest Notes in lieu of cash. In view of General Cable's consolidated net losses of $57.6 million for the twelve months ended December 31,1993, the Company expects that General Cable will pay approximately $12.0 million of interest due on 32 March 31, 1994 with an Interest Note. One-third of the principal amount of each Interest Note, plus accrued interest, is due and payable on each of the fourth, fifth and sixth anniversary dates of its issuance. The principal of the General Cable Note is scheduled to be repaid as follows: $12.75 million on September 30, 1998 and September 30, 1999; $25.5 million on September 30 in each of the years 2000 through 2006; and the remaining unpaid balance on September 30, 2007. Management has been unable to obtain sufficient objective information required to reliably estimate the fair value of the General Cable Note and the Interest Notes (collectively the "Notes") at December 31, 1993. In particular, General Cable does not have any outstanding publicly traded debt instruments, nor does General Cable have a public debt rating. In addition, the cash flow required by the provisions of the General Cable Note can not be accurately projected, and there are no readily available comparable instruments actively trading in the public debt markets. Accordingly, management concluded that determination of the estimated fair value of the Notes is impracticable at December 31, 1993. The Company's management has evaluated the recoverability of the Notes held at December 31, 1993 and does not believe, based on available evidence, that it is probable that the Notes are impaired. In arriving at this conclusion, the Company considered, among other things, the following data as reported by General Cable at December 31, 1993: its debt to capital ratio; its cash and net working capital position and its cash flow and liquidity since the date of the Spin-off; its property, plant and equipment, net of accumulated depreciation; its tangible net assets, before deducting the amount of the Notes and its operating results. Under the terms of an intercompany agreement between the Company and General Cable, the net advances from the Company to the General Cable Businesses between January 1, 1992 and the date of the Spin-off, aggregating $36.9 million, were converted into a short- term note ("Short-Term Note"), payable to the Company in full on or before June 30, 1993, including interest. In July 1993, General Cable entered into a three-year $65 million revolving credit and letter of credit facility with certain commercial banks which enabled General Cable to repay in full to the Company the Short-Term Note and accrued interest thereon in the amount of $39.2 million on July 2, 1993. The principal pro forma effect on the Company's 1992 pre-tax income from continuing operations, assuming the Spin-off had occurred on January 1, 1991, is the inclusion of interest income attributable to the General Cable Note and Short-Term Note for the six months ended June 30, 1992. Assuming a prime rate of 6 percent per annum for the Short-Term Note, such income would have added $13.8 million, or $.18 per share, for 1992 and $27.7 million, or $.40 per share, for 1991. Discontinued Operations Discontinued operations includes the following:
Years Ended December 31, 1993 1992 1991 Revenues: Federal Systems $274.8 $414.0 $ 419.7 General Cable Businesses - 469.3 1,024.5 $274.8 $883.3 $1,444.2 Pre-tax Income (Loss): Federal Systems $ 4.8 $ 18.9 $ 19.7 General Cable Businesses - (19.5) (91.2) $ 4.8 $ (.6) $ (71.5) Income (Loss) from Discontinued Operations: Federal Systems $(10.7) $ 11.2 $ 13.2 General Cable Businesses - (9.5) (60.8) $(10.7) $ 1.7 $ (47.6) Income (Loss) Per Share from Discontinued Operations: Federal Systems $ (.22) $ .24 $ .27 General Cable Businesses - (.20) (1.25) $ (.22) $ .04 $ (.98)
The loss from discontinued operations in 1993 includes a loss on disposal of the former Federal Systems segment of $13.5 million, or $.28 per share, primarily attributable to a reduction of deferred tax assets. For 1992, results of the General Cable Businesses were for the six months ended June 30, 1992, up to the Spin-off date. The loss from discontinued operations in 1991 includes provisions for restructuring and consolidation of facilities and the write-down of goodwill within the wire and cable operations of the General Cable Businesses totaling $57.7 million, or $1.18 per share. 33 3. INSURANCE OPERATIONS Investments of Insurance Operations Amortized cost, gross unrealized gains and losses and market values of the insurance operations' investments in fixed maturity securities at December 31, 1993 and 1992 are presented in the tables below. Included at December 31, 1993 are unrated or less than investment grade corporate securities with a carrying value of $117.9 million (market value $122.4 million). Investments of insurance operations also include a net receivable for securities sold but not settled of $.1 million at December 31, 1993 and a net payable for securities purchased but not settled of $3.8 million at December 31, 1992.
Gross Gross Amortized Unrealized Unrealized Market December 31, 1993 Cost Gains Losses Value (In Millions) Held for investment Corporate securities $ 826.7 $ 50.8 $ 2.6 $ 874.9 Public utilities 192.1 7.5 .5 199.1 Mortgage-backed securities 85.9 3.6 - 89.5 State and local obligations 8.3 1.2 - 9.5 Total held for investment 1,113.0 63.1 3.1 1,173.0 Available for sale Corporate securities 267.2 17.4 1.8 282.8 Public utilities 22.1 1.1 .2 23.0 Mortgage-backed securities 62.1 4.2 .1 66.2 U.S. government securities 51.5 3.3 - 54.8 State and local obligations 5.7 .2 - 5.9 Total available for sale 408.6 26.2 2.1 432.7 Total fixed maturity securities $1,521.6 $ 89.3 $ 5.2 $1,605.7 Gross Gross Amortized Unrealized Unrealized Market December 31, 1992 Cost Gains Losses Value (In Millions) Held for investment Corporate securities $ 635.8 $ 22.7 $ 3.0 $ 655.5 Public utilities 184.3 5.4 .2 189.5 Mortgage-backed securities 95.0 1.6 .6 96.0 State and local obligations 9.1 1.1 - 10.2 Total held for investment 924.2 30.8 3.8 951.2 Available for sale Corporate securities 192.0 9.2 .4 200.8 Public utilities 16.9 .6 - 17.5 Mortgage-backed securities 60.9 3.4 - 64.3 U.S. government securities 44.1 2.9 - 47.0 Total available for sale 313.9 16.1 .4 329.6 Total fixed maturity securities $1,238.1 $ 46.9 $ 4.2 $1,280.8
34 The amortized cost and market value of the insurance operations' investments in fixed maturity securities at December 31, 1993 are shown below by contractual maturity. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations.
(In Millions) Amortized Market Cost Value Due in one year or less $ 14.4 $ 14.7 Due after one year through five years 224.6 239.2 Due after five years through ten years 884.5 930.3 Due after ten years 250.1 265.8 1,373.6 1,450.0 Mortgage-backed securities 148.0 155.7 Total $1,521.6 $1,605.7
At December 31, 1993 and 1992, short-term investments principally consisted of U.S. Treasury securities and commercial paper. Investment Income of Insurance Operations Investment income consists of the following:
(In Millions) Years Ended December 31, 1993 1992 1991 Income from fixed maturity securities $117.4 $105.6 $ 97.8 Income from equity securities .5 2.1 2.3 Gross investment income 117.9 107.7 100.1 Investment expenses (3.2) (2.7) (2.2) Net investment income $114.7 $105.0 $ 97.9 Realized gains (losses) consist of the following: (In Millions) Years Ended December 31, 1993 1992 1991 Gross realized gains on: Fixed maturity securities $ 15.6 $ 23.3 $ 22.5 Equity securities 2.8 1.5 8.6 Gross realized losses on: Fixed maturity securities (.9) (1.2) (2.3) Equity securities - - (2.3) Net realized gains (losses) $ 17.5 $ 23.6 $ 26.5
Income from fixed maturity securities includes income from short-term investments. Proceeds from sales of investments in fixed maturity securities during 1993, 1992 and 1991, excluding proceeds from sales at or near maturity, totaled $155.9 million, $409.4 million and $564.3 million, respectively. Restrictions on Transfers of Funds and Assets The Company's insurance operations are subject to state regulations which limit, by reference to specified measures of statutory operating results and policyholders' surplus, the dividends that can be paid to the Company without prior regulatory approval. Under these restrictions, the maximum amount of dividends which can be paid to the Company during 1994 by these subsidiaries is $96.5 million. At December 31, 1993 and 1992, statutory capital and surplus totaled $567.3 million and $453.6 million, respectively. Reinsurance The insurance operations assume and cede a portion of their written business with other insurance companies in the normal course of business. To the extent that any reinsuring companies are unable to meet their obligations under agreements covering reinsurance ceded, the Company's insurance subsidiaries would remain liable. Amounts deducted from insurance losses and loss adjustment expenses and net written and earned premiums in connection with reinsurance ceded to affiliates and non-affiliated companies, as well as amounts included in net written and earned premiums for reinsurance assumed from affiliates and non-affiliated companies, were as follows:
(In Millions) December 31, 1993 1992 Reinsurance ceded: Reserves for unpaid loss and loss adjustment expenses Affiliates $ 14.0 $18.9 Non-affiliates 29.1 25.5
35 (In Millions) Years Ended December 31, 1993 1992 1991 Reinsurance ceded: Premiums written Non-affiliates $ 9.3 $ 5.9 $ 2.1 Premiums earned Non-affiliates 8.9 6.4 6.1 Incurred losses and loss adjustment expenses Affiliates (2.5) (8.8) (12.6) Non-affiliates 3.8 4.4 4.8 Reinsurance assumed: Premiums written Affiliates 101.2 56.0 62.8 Non-affiliates 74.4 46.1 17.9 Premiums earned Affiliates 78.2 56.1 62.8 Non-affiliates 60.1 36.4 15.5
The allowance for uncollectible reinsurance was $1.9 million and $1.5 million, respectively, at December 31, 1993 and 1992. Other Statutory net income for 1993, 1992 and 1991 was $93.0 million, $81.6 million and $75.1 million, respectively. Deferred policy acquisition costs amortized to income were $243.8 million, $195.9 million and $121.2 million for 1993, 1992 and 1991, respectively. Additionally during 1991, insurance in-force of approximately $11.0 million was amortized to expense. At December 31, 1993 and 1992, reserves for uncollectible premium receivable were $5.6 million and $3.5 million, respectively. Substantially all of the policies written in the workers' compensation insurance operations during 1993, 1992 and 1991 were eligible for policyholder dividend consideration. 4. PARENT COMPANY INVESTMENTS Amortized cost, gross unrealized gains and losses and market values of the Parent Company investments in fixed maturity securities held for investment, other than the General Cable Notes, at December 31, 1993 and 1992 are presented in the tables below. At December 31, 1993 the carrying value of unrated or less than investment grade corporate securities, other than the General Cable Notes, totaled $19.9 million of which $5.4 million had readily available market values equal to their carrying values.
Gross Gross Amortized Unrealized Unrealized Market December 31, 1993 Cost Gains Losses Value (In Millions) Corporate securities $ 175.1 $ 3.1 $ .3 $ 177.9 Public utilities 31.6 - - 31.6 U.S. government securities 26.5 - - 26.5 Mortgage-backed securities 1.2 - - 1.2 Other debt securities 14.5 - - 14.5 Total fixed maturity securities $ 248.9 $ 3.1 $ .3 $ 251.7 Gross Gross Amortized Unrealized Unrealized Market December 31, 1992 Cost Gains Losses Value (In Millions) Corporate securities $ 149.0 $ 1.5 $ .2 $ 150.3 U.S. government securities 86.4 .6 - 87.0 Mortgage-backed securities 3.1 - - 3.1 Other debt securities 12.3 - - 12.3 Total fixed maturity securities $ 250.8 $ 2.1 $ .2 $ 252.7
36 Proceeds from sales of Parent Company investments during 1992 and 1991, excluding proceeds from sales at or near maturity totaled $5.3 million and $29.3 million, respectively. No gains or losses were realized on such securities in 1992. Gross realized gains and gross realized losses included in interest and dividend income from such sales of investments in 1991 totaled $.2 million and $4.5 million, respectively. Amortized cost and market value of Parent Company investments in fixed maturity securities, other than the General Cable Notes, at December 31, 1993 are shown below by contractual maturity. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations.
(In Millions) Amortized Market Cost Value Due in one year or less $ 35.6 $ 35.8 Due after one year through five years 145.3 145.2 Due after five years through ten years 59.6 62.2 Due after ten years 7.2 7.3 247.7 250.5 Mortgage-backed securities 1.2 1.2 Total $ 248.9 $ 251.7
At December 31, 1993 and 1992, short-term investments principally consisted of U.S. Treasury securities and commercial paper. 5. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following:
(In Millions) December 31, 1993 1992 Land $ 14.6 $ 14.8 Buildings and leasehold improvements 20.1 19.8 Machinery, equipment and office furnishings 132.8 124.5 Oil and gas properties 34.3 33.7 Construction in progress 1.2 .7 203.0 193.5 Less - Accumulated depreciation 107.8 95.9 Total $ 95.2 $ 97.6
6. DEBT Debt consists of the following:
(In Millions) 1993 1992 Estimated Estimated Carrying Fair Carrying Fair December 31, Amount Value Amount Value Subordinated notes, 10 7/8%, due 2011 (net of unamortized debt issue costs of $1.1 and $1.2, respectively) $148.9 $189.0 $148.8 $155.7 Subordinated notes, 10 5/8%, due 2000 (net of unamortized debt issue costs of $1.0 and $1.2, respectively) 149.0 175.5 148.8 156.7 Subordinated notes, 9 3/4%, due 1999 (net of unamortized debt issue costs of $.8 and $.9, respectively) 199.2 226.0 199.1 200.0 Subordinated debentures, 11%, due 1997 - - 133.3 133.3 Subordinated debentures, 9 1/2%, due 2002 16.2 16.2 16.2 16.2 Other 9.9 9.9 9.9 9.9 Total $523.2 $616.6 $656.1 $671.8
37 On July 30, 1993, the Company redeemed all $133.3 million principal amount of its outstanding 11 percent subordinated debentures due December 15, 1997 at the redemption price of 100 percent of the principal amount of each debenture plus accrued and unpaid interest to the redemption date. During May 1991, the Company publicly issued $150.0 million principal amount of 10 7/8 percent subordinated notes due May 1, 2011, and during April 1990, the Company publicly issued $150.0 million principal amount of 10 5/8 percent subordinated notes due April 15, 2000. Certain loan agreements contain several covenants and restrictions, none of which significantly impacted the Company's operations at December 31, 1993. The 10 7/8, 10 5/8 and 9 3/4 percent notes and the 9 1/2 percent debentures are subordinated in right of payment to all debt of the Company outstanding at any time, except for debt which is by its terms not superior to the notes and debentures. On February 16, 1994, the Company called for redemption on March 25, 1994 all of the outstanding $16.2 million principal amount of its 9 1/2 percent subordinated debentures, plus accrued interest. Annual maturities of debt outstanding at December 31, 1993, are as follows: (In Millions) 1994 $ 3.0 1995 .3 1996 .1 1997 .1 1998 .1 After 1998 519.6 At December 31, 1993, the Company had unutilized letter of credit facilities totaling $56.9 million which, if drawn, will bear interest at rates which approximate the prime rates offered by various banks. Estimated fair values for debt issues that are not quoted on an exchange were calculated using interest rates that are currently available to the Company for issuance of debt with similar terms and remaining maturities. 7. INCOME TAXES The Company has reported as of the beginning of its 1993 tax year, an aggregate consolidated net operating loss carryforward for Federal income tax purposes of $825 million and an aggregate capital loss carryforward of $384 million. The 1993 consolidated Federal income tax return will report a remaining net operating loss carryforward currently estimated at $610 million, which will expire at the end of 1996 unless previously utilized, and a remaining capital loss carryforward estimated at $262 million which will expire at the end of 1997, unless previously utilized. Also, as of December 31, 1993, the Company has investment tax credit carryforwards totaling approximately $9.6 million (which will expire in various amounts between 1994 and 2000 unless previously used), and alternative minimum tax credit ("AMT") carryforwards of approximately $13.6 million. During 1992, the Company elected to adopt SFAS No. 109, effective January 1, 1992, without restating prior years' financial statements. SFAS No. 109 changes the methods of accounting for income taxes and the criteria for recognition of deferred tax assets. More specifically, a deferred tax asset is recognized for those carryforwards and temporary differences which will provide future tax benefits. A deferred tax liability is recognized for temporary differences which will result in taxable amounts in future years. The cumulative effect resulting from adopting SFAS No. 109 as of January 1, 1992 was income of $252.8 million, or $5.36 per share for continuing operations. As a result of adopting SFAS No. 109, common shareholders' equity increased $300.8 million, or $6.38 per share, which amount includes $48.0 million, or $1.02 per share, attributable to the tax effect of the pre-reorganization net operating loss carryforward, as well as the cumulative effect of accounting change. The Company has calculated its provision for income taxes for 1993 and 1992 in accordance with SFAS No. 109. For periods prior to 1992, to the extent that no Federal income tax was payable because of the pre-reorganization net operating loss carryforward or tax losses attributable to disposition of pre-reorganization assets and liabilities, a deduction in lieu of current Federal income tax was deducted from income and credited to capital surplus. Components of the 1993 and 1992 provisions for income tax benefit (expense) were as follows: 38
(In Millions) Years Ended December 31, 1993 1992 Current Federal $(4.4) $ (2.8) Foreign, state & local (.9) (1.5) Total current (5.3) (4.3) Deferred Federal 59.4 (28.9) Foreign, state & local (1.5) - Total deferred 57.9 (28.9) Total $52.6 $(33.2)
The provision for income taxes for 1991 consists primarily of the deduction in lieu of current Federal income tax. Consolidated income tax expense differs from the amount computed using the United States statutory income tax rate for the reasons set forth in the following table:
(In Millions) Years Ended December 31, 1993 1992 Income before income taxes $190.1 $ 84.1 Expected tax at U.S. statutory income tax rate $(66.5) $(28.6) Amortization of goodwill (3.8) (3.5) Revision to valuation allowance 132.0 - Loss disallowance (6.9) - Other, net (2.2) (1.1) Consolidated income tax $ 52.6 $(33.2)
The Company's substantial tax loss carryforwards and temporary differences give rise to deferred tax assets. Based on an analysis of the likelihood of realizing the Company's gross deferred tax asset (taking into consideration applicable statutory carryforward periods), the Company determined that the recognition criteria set forth in SFAS No. 109 are not met for the entire gross deferred tax asset and, accordingly, the gross deferred tax asset is reduced by a valuation allowance. The analysis of the likelihood of realizing the gross deferred tax asset is reviewed and updated periodically. Any required adjustments to the valuation allowance are made in the period in which the developments on which they are based become known. Results for 1993 include tax benefits of $132 million attributable to such adjustments. Approximately $30 million of the adjustments is attributable to three transactions occurring during the second quarter of 1993, specifically (a) the sale of the Buckeye Units, (b) the call for redemption of the 11 percent subordinated debentures and (c) the acquisition of Leader National. Approximately $33 million is attributable to the sale of the Company's Tejas shares. The balance is principally due to the effect on the estimated future taxable income during the Company's loss carryforward period of better 1993 operating results than previously estimated as well as the effect of the increase in the statutory income tax rate. Carryforwards and temporary differences which give rise to the deferred tax asset are as follows:
(In Millions) Amount of Deferred Tax Assets at Current Tax Rates December 31, 1993 1992 Net operating loss carryforward $213.5 $278.4 Capital loss carryforwards 93.3 80.6 Insurance claims and reserves 114.0 78.8 Other, net 70.2 81.9 Gross deferred tax asset 491.0 519.7 Valuation allowance (195.2) (274.3) Net deferred tax asset $295.8 $245.4
8. PENSION PLANS AND OTHER RETIREMENT BENEFITS The Company provides retirement benefits, primarily through contributory and noncontributory defined contribution plans, for the majority of its regular full-time employees except those covered by certain labor contracts. Company contributions under the defined contribution plans sponsored by the Company approximate, on average, five percent of each eligible employee's covered compensation. In addition, the Company sponsors employee savings plans under which the Company matches a specified portion of contributions made by eligible employees. Expense related to defined contribution plans for 1993, 1992 and 1991 totaled $5.5 million, $6.0 million and $4.9 million, respectively. The Company also provides defined benefit pension plan retirement benefits for certain employees. The related amounts included in the accompanying financial statements are not material to the Company's financial condition. 39 9. EMPLOYEE STOCK OPTION AND PURCHASE PLANS Under the Company's Stock Option Plan, options to purchase shares of Common Stock may be granted to officers and other key employees, and to non-employee directors of the Company. The exercise price may not be less than the fair market value of the Common Stock at the date of the grant. The options granted to officers and key employees generally become exercisable to the extent of 20 percent of the shares covered each year, beginning one year from the date of grant, and expire ten years from the date of grant. The options granted to non-employee directors of the Company generally become fully exercisable upon grant and expire approximately ten years from the date of grant. Under the now terminated Career Share Purchase Plan (the "Career Share Plan"), officers and other key employees of the Company purchased shares of the Company's Preference Stock (designated Career Shares). Outstanding Career Shares are convertible, at the holder's option, into a specified number of shares of Common Stock determined by reference to the fair market value (as defined) of a share of Common Stock as of the date the Career Shares were offered for purchase. Career Shares are generally not entitled to vote; are entitled to cumulative annual cash dividends per share (if declared by the Board of Directors) equal to 9.3 percent of their purchase price per share; are superior to the rights of holders of shares of Common Stock with respect to dividends; and have no preference to the rights of holders of shares of Common Stock in the event of liquidation. Under certain conditions, holders of Career Shares issued under the Career Share Plan are entitled to sell to the Company any or all of their shares and the Company is entitled to repurchase all outstanding Career Shares. The number of common shares available with respect to the Company's Stock Option and Career Share Plans and activity under these Plans are as follows:
Common Stock Equivalents Available Exercise or Under Conversion Plans Outstanding Prices Per Share Balance at December 31, 1992 531,709 4,967,802 $15.80 - $25.12 Activity during 1993: Additional authorization 2,000,000 Stock options granted (441,000) 441,000 Stock options exercised (1,072,397) $15.80 - $25.12 Stock options terminated 7,964 (7,964) Balance at December 31, 1993 2,098,673 4,328,441 $15.80 - $31.38 Exercisable or convertible (vested) at December 31, 1993 2,918,116 $15.80 - $31.38
The Company's Employee Stock Purchase Plan ("ESPP") provides eligible employees with the opportunity to purchase from the Company, through regular payroll deductions, shares of the Company's Common Stock at 85 percent of its fair market value on the purchase date. A maximum of 3,000,000 common shares can be purchased under the ESPP, and through December 31, 1993, employees had purchased 265,420 shares. 10. CAPITAL STOCK The Company is authorized to issue 22,699,464 shares of Preference Stock, without par value, in one or more series. At December 31, 1993 and 1992 there were 212,698 shares of Preference Stock outstanding, all of which are designated Career Shares. The Company is authorized to issue 200,000,000 shares of Common Stock. At December 31, 1993, there were 47,446,094 shares of Common Stock outstanding or issuable, including 1,377,932 shares set aside for issuance to certain pre-reorganization creditors and other claimants. Holders of Common Stock have one vote per share. During 1993, the Company purchased 45,522 shares of its Common Stock for $1.3 million paid or to be paid in cash. During 1992, the Company purchased 1,471,002 shares of its Common Stock for $30.2 million paid or to be paid in cash. 40 During 1991, the Company purchased 6,188,150 shares of its Common Stock for $149.9 million, including approximately 5,071,000 shares for approximately $121.7 million pursuant to the Company's January 4, 1991 offer to purchase shares for $24.00 per share. AFC, which beneficially owned approximately 42 percent of the Company's outstanding common shares before the purchase, did not tender any of its shares pursuant to the offer. At December 31, 1993, the Company had reserved 6,427,114 shares of Common Stock for issuance in connection with the Company's Stock Option Plan and Career Share Plan. If all stock options outstanding at December 31, 1993 were exercised (whether or not then exercisable) and all Career Shares outstanding at December 31, 1993 were converted, the total number of shares of Common Stock outstanding or issuable at December 31, 1993 would increase from 47,446,094 to 51,774,535. 11. CONTINGENCIES Claims are pending against the Company for reimbursement of clean-up costs under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") for alleged contamination caused by release of polychlorinated biphenyls at the Paoli, Pennsylvania railyard ("Paoli Yard") formerly owned by the Company's railroad predecessor, Penn Central Transportation Company ("PCTC"). A Record of Decision was issued by the U.S. Environmental Protection Agency on July 21, 1992 presenting a final selected remedial action for the Paoli Yard in accordance with CERCLA having an estimated cost of approximately $28.3 million. In March 1992, the Company filed a lawsuit seeking to enjoin the U.S. Government, Consolidated Rail Corporation ("Conrail") and other parties from prosecuting claims against the Company for such clean-up costs on the grounds that the Paoli Yard environmental claims are barred by: (1) the terms by which the Paoli Yard was transferred by PCTC to Conrail "as is" in 1976 pursuant to the Regional Rail Reorganization Act of 1973 (the "Rail Act"); (2) the 1980 settlement of the Valuation Case proceedings to determine compensation to be paid by the U.S. Government for the railroad properties transferred by PCTC pursuant to the Rail Act; and (3) the U.S. Constitution. In addition, the Company believes that it has other substantial defenses to claims for clean-up costs at the Paoli Yard, including its position that other parties are responsible for substantial percentages of such clean-up costs, and the Company intends to make claims against certain insurance carriers for reimbursement of any clean-up costs that the Company may incur. The Company has not established any accrual for potential liability for clean-up costs at the Paoli Yard. There are certain other claims involving the Company and certain of its subsidiaries, including claims relating to the generation, disposal or release into the environment of allegedly hazardous substances and pre-reorganization personal injury claims, that allege or involve amounts that are potentially substantial in the aggregate. The Paoli Yard litigation and the preponderance of the other claims arose out of railroad operations disposed of by PCTC prior to its 1978 reorganization and, accordingly, any ultimate liability resulting therefrom in excess of previously established loss accruals would be attributable to such pre-reorganization events and circumstances. In accordance with the Company's reorganization accounting policy, any such ultimate liability will reduce the Company's capital surplus and shareholders' equity, but will not be charged to income. See Notes 1 and 12. The Company believes that its maximum aggregate potential exposure at December 31, 1993 with respect to the foregoing environmental claims (other than Paoli Yard), net of related loss accruals, was approximately $15 million for claims arising out of pre-reorganization operations and in the range of $1 million to $4 million for claims arising out of post-reorganization operations (which range depends upon the method of remediation, if any, required). The Company believes that it has meritorious defenses in such matters, including its position that other parties are responsible for substantial percentages of such amounts claimed and, in the case of the post-reoganization matter referred to above, its belief that the relevant regulatory authority will permit remediation to be deferred until there is a change in the use of the facility which the Company believes is unlikely. In management's opinion, the outcome of the foregoing claims will not, individually or in the aggregate, have a material adverse effect on the financial condition or results of operations of the Company. In making this assessment, management has taken into account previously established loss accruals in its financial statements and probable recoveries from insurance carriers and other third parties. 41 12. CHANGES IN COMMON SHAREHOLDERS' EQUITY
Unrealized Gains Common Stock Capital Retained (Losses) On (Dollars in Millions) Shares Amount Surplus Earnings Investments Total Balance, December 31, 1990 52,711,265 $52.7 $ 860.7 $736.3 $(15.5) $1,634.2 Increase equal to deduction in lieu of current Federal income tax, which is not accruable or payable .8 .8 Net income 2.6 2.6 Dividends declared on Common Stock (33.8) (33.8) Exercise of stock options and conversion of Career Shares 745,128 .8 15.6 16.4 Purchases of Company Common Stock (6,188,150) (6.2) (143.7) (149.9) Issuance of Common Stock under ESPP 92,713 .1 2.4 2.5 Adjustment of estimated pre- reorganization liabilities (8.0) (8.0) Change in net unrealized gains (losses) on investments 14.5 14.5 Other, net (.3) (.3) Balance, December 31, 1991 47,360,956 $47.4 $ 727.5 $705.1 $ (1.0) $1,479.0 Portion of deferred tax asset attributable to pre-reorganization net operating loss carryforward 48.0 48.0 Net income 305.4 305.4 Dividends declared on Common Stock (38.1) (38.1) Exercise of stock options and conversion of Career Shares 397,015 .4 5.6 6.0 Purchases of Company Common Stock (1,472,495) (1.5) (28.7) (30.2) Issuance of Common Stock under ESPP 96,694 .1 1.9 2.0 Adjustment of estimated pre- reorganization liabilities (15.0) (15.0) Distribution of equity to shareholders from spin-off of General Cable Corporation (264.5) (264.5) Change in net unrealized gains (losses) on investments 11.5 11.5 Other, net (.4) (.9) (1.3) Balance, December 31, 1992 46,382,170 $46.4 $ 738.9 $707.0 $ 10.5 $1,502.8 Net income 232.0 232.0 Dividends declared on Common Stock (40.0) (40.0) Exercise of stock options and conversion of Career Shares 1,072,397 1.1 21.8 22.9 Purchases of Company Common Stock (45,522) (1.3) (1.3) Issuance of Common Stock under ESPP 37,049 1.1 1.1 Adjustment of estimated pre- reorganization liabilities (14.0) (14.0) Adjustment to the distribution of equity to shareholders from spin-off of General Cable Corporation 13.3 13.3 Change in net unrealized gains (losses) on investments 5.9 5.9 Other, net (.1) (.3) (.4) Balance, December 31, 1993 47,446,094 $47.4 $ 746.2 $912.3 $ 16.4 $1,722.3
42 During 1993, the Company settled a lawsuit it had brought against the former owner of a business that was acquired by the Company in 1990 and was included in the General Cable Businesses spun-off to shareholders in July 1992. After the General Cable Spin-off, the Company retained the right to receive any amounts recovered in the lawsuit. The net amount of cash received by the Company in the settlement (net of a provision for certain obligations and associated litigation expense) has been accounted for as an adjustment to the distribution of equity to shareholders resulting from the General Cable Spin-off. 13. EARNINGS PER SHARE Earnings per share are calculated on the basis of the weighted average number of shares of common stock outstanding during the period and the dilutive effect, if material, of assumed conversion of common stock equivalents (stock options and Career Shares). For the year ended December 31, 1993, the potential dilution represented by shares issuable from the exercise of outstanding stock options and conversion of outstanding Career Shares, using the treasury stock method, assuming the proceeds from such issuance would be used to repurchase common stock at the average market price during the period, approximated three percent, the applicable threshold specified by the Accounting Principles Board Opinion No. 15. For 1992 and 1991, such dilution was less than three percent and is therefore not reflected in the earnings per share presentation for such periods. 14. COMMITMENTS The Company has agreed to guarantee several third party obligations which are not material individually or in the aggregate. The Company has also entered into various operating lease agreements related principally to certain administrative and manufacturing facilities and transportation equipment. Future minimum rental payments required under noncancelable lease agreements at December 31, 1993 were as follows: 1994--$18.3 million, 1995--$17.5 million, 1996--$13.5 million, 1997--$5.8 million, 1998--$3.7 million and $4.8 million thereafter, before deduction of minimum sublease income of $19.4 million, in the aggregate, from January 1, 1994 through the expiration of the leases. Rental expense recorded under operating leases was $13.3 million in 1993 and 1992 and $11.1 million in 1991. 15. SEGMENT INFORMATION The Company's only industry segment is specialty property and casualty insurance. 16. STATEMENT OF CASH FLOWS For purposes of this Statement, the Company considers only cash on hand or in banks to be cash or cash equivalents. For the years ended December 31, 1993, 1992 and 1991, income taxes paid were $4.8 million, $5.5 million and $6.2 million, respectively. For the same periods interest paid totaled $62.7 million, $68.9 million and $62.1 million, respectively. On March 31, 1993, and September 30, 1993 General Cable elected to pay 100 percent, or $31.8 million in the aggregate, of the interest due on those dates on the General Cable Note with Interest Notes in lieu of cash. These non-cash transactions, which increased the Parent Company investments and decreased accrued investment income, are not included in the Statement of Cash Flows. In December 1992, the Company received a note for approximately $11.0 million in consideration of the sale of G & H Technology, Inc. This transaction was a non-cash investing transaction which is not included in the Statement of Cash Flows. On June 30, 1992, in consideration of the transfer of the General Cable Businesses and the advance of $25.0 million in cash, the Company received the $255.0 million, 9.98 percent subordinated note of General Cable. To the extent of $230.0 million, this transaction was a non-cash investing transaction which is not included in the Statement of Cash Flows. In September 1991, a previously consolidated majority-owned subsidiary redeemed all of the stock held by the Company in exchange for a percentage of the subsidiary's net assets equal to the Company's percentage ownership of such stock. As a consequence of the transaction, the Company's minority interest of $14.3 million was eliminated and certain other asset and liability accounts were reduced by a corresponding amount in the aggregate. 43 17. RELATED PARTY TRANSACTIONS During 1990, the Company acquired the NSA Group which was a related party of AFC. The purchase price was subject to adjustment in 1995, based on 1991-1994 pre-tax earnings of the NSA Group, by a reduction of up to $20.0 million or an increase of up to $40.0 million, in each case plus interest. In December 1993, the Company, having concluded based on the NSA Group's pre-tax earnings subsequent to 1990 that it was highly probable that the maximum $40.0 million purchase price adjustment would be payable by the Company, paid $40.0 million, plus $12.8 million of interest, to GAIC, a wholly- owned insurance subsidiary of AFC, in full settlement of the purchase price contingency in order to cut off the accrual of interest at the relatively high rate prescribed by the acquisition agreement. Also, as part of the agreement for the purchase of the NSA Group, AFC, through GAIC, provides stop-loss protection to the Company which, in effect, guarantees the adequacy of unpaid loss and allocated loss adjustment expense reserves of the NSA Group (net of reinsurance and salvage and subrogation recoveries) related to periods prior to 1991 under policies written and assumed by the NSA Group. In 1988, the Company's workers' compensation insurance operations ("Republic Indemnity") entered into a reinsurance contract with GAIC to cover the aggregate losses on workers' compensation coverage for the accident years 1980-1987, inclusive. The contract provides for coverage by GAIC of net aggregate paid losses of Republic Indemnity in excess of $440 million, up to a maximum of $35.1 million. Cumulative paid losses at December 31, 1993 pertaining to claims during this period totaled $435.8 million. In addition, GAIC has agreed to reimburse Republic Indemnity for its loss adjustment expenses pertaining to this period up to a maximum of $4.9 million. The Chairman, Chief Executive Officer and principal shareholder of AFC, which beneficially owned approximately 40.5 percent of the Company's outstanding common shares at December 31, 1993, is also the Chairman and Chief Executive Officer of the Company. 44 Responsibility for Financial Reporting The financial statements of American Premier Underwriters, Inc. and Consolidated Subsidiaries are the responsibility of the Company's management, and have been prepared in accordance with generally accepted accounting principles. To help insure the accuracy and integrity of its financial data, the Company maintains a strong system of internal controls designed to provide reasonable assurances that assets are safeguarded and that transactions are properly executed and recorded. The internal control system and compliance therewith are monitored by the Company's internal audit department. The financial statements have been audited by the Company's independent auditors, Deloitte & Touche. Their report is shown on this page. The independent auditors, whose appointment by the Board of Directors was ratified by the Company's shareholders, express their opinion on the Company's financial statements based on procedures which they consider to be sufficient to form their opinion. The Audit Committee of the Board of Directors meets periodically with representatives of Deloitte & Touche and the Company's internal audit department and financial management to review accounting, internal control, auditing and financial reporting matters. INDEPENDENT AUDITORS' REPORT American Premier Underwriters, Inc. We have audited the accompanying balance sheets of American Premier Underwriters, Inc. and Consolidated Subsidiaries as of December 31, 1993 and 1992 and the related statements of income and cash flows for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of American Premier Underwriters, Inc. and Consolidated Subsidiaries at December 31, 1993 and 1992, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1993 in conformity with generally accepted accounting principles. As discussed in Note 1 to the financial statements, in 1992 the Company changed its method of accounting for income taxes to conform with Statement of Financial Accounting Standards No. 109. Deloitte & Touche Cincinnati, Ohio February 16, 1994 (March 25, 1994 with respect to the change of the Company's name as discussed in Note 1 to the financial statements) 45 Quarterly Financial Data (Unaudited) Summarized quarterly financial data for 1993 and 1992 are set forth below. Quarterly results have been influenced by acquisitions and divestitures and by seasonal factors inherent in the Company's businesses. The 1993 results include tax benefits of $15.0 million ($.32 per share), $45.0 million ($.96 per share) and $65.0 million ($1.33 per share) for the first, second and third quarters, respectively, attributable to increases in the Company's net deferred tax asset. In addition, the table below gives effect to the classification of certain businesses as discontinued operations.
(In Millions, Except Per 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Share Amounts) 1993 1992 1993 1992 1993 1992 1993 1992 1993 1992 Revenues $370.2 $332.6 $426.6 $350.6 $443.7 $363.9 $522.8 $377.8 $1,763.3 $1,424.9 Income from continuing operations 31.1 10.4 75.0 11.2 86.2 11.3 50.4 18.0 242.7 50.9 Cumulative effect of accounting change - 252.8 - - - - - - - 252.8 Net income 33.9 260.0 75.0 11.0 82.1 14.1 41.0 20.3 232.0 305.4 Income per share from continuing operations .67 .22 1.60 .23 1.77 .24 1.03 .38 5.03 1.08 Cumulative effect of accounting change per share - 5.33 - - - - - - - 5.36 Net income per share .73 5.48 1.60 .23 1.68 .30 .84 .43 4.81 6.48
46 DIVIDEND POLICY AND STOCK MARKET PRICES American Premier Underwriters, Inc. Common Stock is listed and traded principally on the New York Stock Exchange. On March 10, 1994, there were approximately 13,563 holders of record of Common Stock. During each of the first three quarters of 1992, the Board of Directors declared dividends of $.20 per share, and during the fourth quarter of 1992 declared a dividend of $.21 per share. The Board declared dividends of $.21 per share in each of the first three quarters of 1993, and $.22 per share in the fourth quarter of 1993, the latter of which was paid in January 1994. The following table sets forth the high and low stock prices of the Company's Common Stock for the last two years, as reported on the New York Stock Exchange Composite Tape.
1993 1992 High Low High Low First Quarter $28 5/8 $23 1/2 $27 1/8 $22 5/8 Second Quarter 33 7/8 25 1/2 23 7/8 19 5/8 Third Quarter 39 3/4 30 3/8 20 3/8 18 1/4 Fourth Quarter 34 1/8 29 24 7/8 18
47 EXHIBIT (21) AMERICAN PREMIER UNDERWRITERS, INC. SUBSIDIARIES OF THE REGISTRANT The following table lists each subsidiary of American Premier Underwriters, Inc. (the "Company") (indented under the name of its immediate parent) included in the Company's continu- ing operations and its jurisdiction of incorporation. The names of certain subsidiaries which, considered in the aggregate, would not constitute a significant subsidiary have been omitted. Except where noted, each subsidiary listed does business under its corporate name. Jurisdiction of Incorporation ------------- PENNSYLVANIA COMPANY Delaware Atlanta Casualty Company (1) Illinois American Premier Insurance Company Indiana Mr. Agency of Georgia, Inc. Georgia Atlanta Casualty General Agency, Inc. Texas Atlanta Insurance Brokers, Inc. Georgia Treaty House, Ltd. (d/b/a Mr. Budget) Nevada Buckeye Management Company Delaware Buckeye Pipe Line Company Delaware DI Industries, Inc. (53.9% owned) Texas DI Drilling, Inc. Delaware Butler-Johnson, Inc. Delaware Cubby Drilling, Inc. Delaware Western Oil Well Service Co. Montana Willis Drilling Co., Inc. Texas DI Energy, Inc. Texas DI International, Inc. Texas DI/Perfensa Inc. Texas Drillers International C.A. Venezuela Drillers International S.A. Argentina DI Services, Inc. Texas Drillers, Inc. Texas Drillers Inc. of Florida Florida Great Southwest Corporation Delaware World Houston, Inc. Delaware Holan Manufacturing, Inc. Delaware Infinity Insurance Company Florida Infinity Agency of Texas, Inc. Texas The Infinity Group, Inc. Indiana Infinity Select Insurance Company Indiana Infinity Southern Insurance Corporation Alabama Leader National Insurance Company Ohio Budget Insurance Premiums, Inc. Ohio Leader National Agency, Inc. Ohio Leader National Insurance Agency of Arizona Arizona Leader Specialty Insurance Company Indiana PCC Hotel, Inc. Delaware PCC-N26LB, Inc. Delaware [3/29/94] Jurisdiction of Incorporation ------------- PCC Technical Industries, Inc. California ESC, Inc. California Marathon Manufacturing Companies, Inc. Delaware Marathon Battery Company Delaware Marathon Manufacturing Company Delaware Marathon Flite-Tronics Company Delware Marathon Power Technologies Company Delaware Marathon Power Technologies Limited United Kingdom Marathon Batteries Limited United Kingdom Penn Central Holdings Limited United Kingdom PCC Maryland Realty Corp. Maryland Penn Camarillo Realty Corp. California PCC-340, Inc. Delaware Penn Central Reinsurance Company Ohio Penn Central UK Limited United Kingdom Insurance (GB) Limited (51% owned) United Kingdom Putnam Holdings, Inc. Delaware Putnam Sub, Inc. Delaware Republic Indemnity Company of America California Republic Indemnity Company of California California Risico Management Corporation Delaware Telsta Network Services, Inc. Delaware Windsor Insurance Company (1) Indiana American Deposit Insurance Company Oklahoma Granite Finance Co., Inc. Texas Coventry Insurance Company Ohio Moore Group Inc. Georgia Casualty Underwriters, Inc. (51% owned) Georgia Dudley L. Moore Insurance, Inc. Louisiana Hallmark General Insurance Agency, Inc. Oklahoma Middle Tennessee Underwriters, Inc. Tennessee Insurance Finance Company Tennessee Windsor Group, Inc. Georgia Regal Insurance Company Indiana Texas Windsor Group, Inc. Texas PCC REAL ESTATE, INC. New York PCC Billboard Realty Corp. New York PCC Chicago Realty Corp. New York PCC Fordham Realty Corp. New York PCC Gun Hill Realty Corp. New York PCC Irvington Realty Corp. New York PCC Michigan Realty, Inc. Michigan PCC Scarsdale Realty Corp. New York PCC Tuckahoe Realty Corp. New York PENN CENTRAL ENERGY MANAGEMENT COMPANY Delaware ______________ (1) 90.05% owned by Pennsylvania Company and 9.95% owned by Republic Indemnity Company of America. - 2 - The following table lists each subsidiary of the Company whose operations have been discontinued and its jurisdiction of incorporation. The names of certain subsidiaries which, consid- ered in the aggregate, would not constitute a significant subsid- iary have been omitted. Each subsidiary listed does business under its corporate name. Jurisdiction of Incorporation The Ann Arbor Railroad Company Michigan The Associates of the Jersey Company New Jersey Delbay Corporation Delaware Detroit Manufacturers Railroad Company (82% owned) Michigan The Indianapolis Union Railway Company Indiana Lehigh Valley Railroad Company Pennsylvania The Michigan Central Railroad Company Michigan The New York and Harlem Railroad Company (97% owned) New York The Owasco River Railway, Inc. New York Penn Central Properties, Inc. Pennsylvania Pennsylvania-Reading Seashore Lines (66-2/3% owned) New Jersey Penn Towers, Inc. Pennsylvania Pittsburgh and Cross Creek Railroad Company (83% owned) Pennsylvania Terminal Realty Penn Co. District of Columbia United Railroad Corp. Delaware Waynesburg Southern Railroad Company Pennsylvania - 3 - EXHIBIT (23) DELOITTE & TOUCHE 250 East Fifth Street P.O. Box 5340 Cincinnati, Ohio 45201-5340 Telephone: (513) 784-7100 INDEPENDENT AUDITORS' CONSENT American Premier Underwriters, Inc.: We consent to the incorporation by reference in Registration Statement No. 33-48700 on Form S-8, Registration Statement No. 33-34871 on Form S-8, Amendment No. 1 to Registration Statement No. 33-25726 on Form S-3, Registration Statement No. 2-81422 on Form S-8 and Post-Effective Amendment No. 1 to Registration Statement No. 2-72453 on Form S-8 of our report dated February 16, 1994, appearing in this Annual Report on Form 10-K of American Premier Underwriters, Inc. for the year ended December 31, 1993. Deloitte & Touche March 29, 1994 Exhibit (28) INFORMATION FROM REPORTS FURNISHED TO STATE INSURANCE REGULATORY AUTHORITIES Schedule P of Annual Statements A. CONSOLIDATED PROPERTY AND CASUALTY ENTITIES - See Attached Schedules Schedule P prepared in accordance with the rules prescribed by the National Association of Insurance Commissioners includes the reserves of the Company's consolidated property and casualty insurance subsidiaries. The following is a summary of Schedule P reserves and a reconciliation to reserves as presented in item 1 - Business In Millions Schedule P - Part 1 Summary - col. 33 $739.9 - col. 34 176.4 Statutory Loss and Loss Adjustment Expense Reserves $916.3 B. UNCONSOLIDATED SUBSIDIARIES None C. 50% OR LESS OWNED PROPERTY AND CASUALTY INVESTEES N/A AMERICAN PREMIER UNDERWRITERS, INC. INSURANCE GROUP SCHEDULE P - ANALYSIS OF LOSSES AND LOSS EXPENSES NOTES TO SCHEDULE P 1. THE PARTS OF SCHEDULE P: PART 1 - DETAILED INFORMATION ON LOSSES AND LOSS EXPENSES. PART 2 - HISTORY OF INCURRED LOSSES AND ALLOCATED EXPENSES. PART 3 - HISTORY OF LOSS AND ALLOCATED EXPENSE PAYMENTS. PART 4 - HISTORY OF BULK AND INCURRED-BUT-NOT-REPORTED RESERVES. SCHEDULE P INTERROGATORIES. 2. LINES OF BUSINESS A THROUGH M AND R ARE GROUPINGS OF THE LINES OF BUSINESS USED ON PAGE 14, THE STATE PAGE. 3. REINSURANCE A, B, C, AND D (LINES N TO Q) ARE: REINSURANCE A = NONPROPORTIONAL PROPERTY (1988 AND SUBSEQUENT) REINSURANCE B = NONPROPORTIONAL LIABILITY (1988 AND SUBSEQUENT) REINSURANCE C = FINANCIAL LINES (1988 AND SUBSEQUENT) REINSURANCE D = OLD SCHEDULE O LINE 30 (1987 AND PRIOR) 4. THE INSTRUCTIONS TO SCHEDULE P CONTAINS DIRECTIONS NECESSARY FOR FILLING OUT SCHEDULE P. SCHEDULE P - PART 1 - SUMMARY (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 2,508 1,281 327 02 1984 297,748 68,954 228,794 222,129 52,392 20,199 03 1985 326,682 80,298 246,384 228,022 61,644 19,705 04 1986 366,284 63,991 302,293 207,111 36,787 18,246 05 1987 438,180 32,269 405,911 228,964 8,637 19,861 06 1988 514,000 25,803 488,197 268,961 7,472 22,662 07 1989 579,153 7,563 571,590 306,247 7,088 22,803 08 1990 707,618 8,005 699,613 404,090 20,330 27,360 09 1991 928,291 8,528 919,763 476,518 645 29,823 10 1992 1,094,468 9,706 1,084,762 462,032 391 21,439 11 1993 1,313,597 9,772 1,303,825 366,297 743 11,062 12 TOTAL XXX XXX XXX 3,172,879 197,411 213,488 SCHEDULE P - PART 1 - SUMMARY 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 325 22 145 1,373 XXX 10,598 02 1984 3,088 3,860 9,977 196,825 XXX 3,563 03 1985 2,365 3,322 12,030 195,748 XXX 2,164 04 1986 2,757 3,510 14,674 200,487 XXX 4,271 05 1987 640 3,755 19,998 259,547 XXX 6,686 06 1988 1,075 5,516 24,491 307,567 XXX 10,629 07 1989 1,212 9,009 28,265 349,015 XXX 20,746 08 1990 -375 12,688 34,218 445,714 XXX 40,181 09 1991 197 15,104 47,815 553,314 XXX 76,908 10 1992 9 15,276 48,568 531,639 XXX 132,666 11 1993 2 9,620 42,735 419,348 XXX 307,386 12 TOTAL 11,295 81,683 282,915 3,460,577 XXX 615,797 SCHEDULE P - PART 1 - SUMMARY 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 6,835 8,426 6,056 647 391 1,199 02 1984 2,097 3,001 1,845 279 172 422 03 1985 1,307 32 0 45 7 272 04 1986 2,427 46 0 53 16 585 05 1987 5,105 120 0 112 6 937 06 1988 640 248 0 126 52 1,483 07 1989 2,888 557 2 256 98 2,930 08 1990 6,493 1,458 70 932 535 5,325 09 1991 634 4,021 296 2,002 0 10,065 10 1992 183 35,837 817 6,783 0 18,033 11 1993 2,277 111,787 1,520 19,805 0 41,885 12 TOTAL 30,887 165,535 10,606 31,040 1,277 83,136 SCHEDULE P - PART 1 - SUMMARY 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 360 0 406 7,633 XXX XXX 02 1984 244 0 127 3,034 XXX 260,261 03 1985 162 4 105 1,142 XXX 263,001 04 1986 295 5 262 2,479 XXX 245,927 05 1987 577 52 415 2,582 XXX 277,093 06 1988 26 342 662 12,430 XXX 329,260 07 1989 77 761 1,306 22,729 XXX 383,109 08 1990 116 1,800 2,561 43,242 XXX 516,129 09 1991 53 3,705 4,903 96,916 XXX 652,053 10 1992 74 7,252 11,505 203,751 XXX 736,865 11 1993 201 16,552 43,435 520,300 XXX 944,392 12 TOTAL 2,185 30,474 65,687 916,239 XXX XXX SCHEDULE P - PART 1 - SUMMARY 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 60,402 199,859 87.410 87.598 87.353 0 03 1985 66,111 196,890 80.507 82.332 79.912 0 04 1986 42,962 202,965 67.141 67.138 67.142 0 05 1987 14,965 262,128 63.237 46.376 64.578 0 06 1988 9,265 319,995 64.058 35.907 65.546 0 07 1989 11,366 371,743 66.150 150.284 65.037 0 08 1990 27,169 488,960 72.939 339.400 69.890 0 09 1991 1,823 650,230 70.242 21.377 70.695 0 10 1992 1,474 735,391 67.326 15.186 67.793 0 11 1993 4,744 939,648 71.894 48.547 72.069 0 12 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1 - SUMMARY 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 6,132 1,501 02 1984 0 .000 2,622 412 03 1985 0 .000 889 253 04 1986 0 .000 1,890 589 05 1987 0 .000 1,701 881 06 1988 0 .000 10,237 2,193 07 1989 0 .000 18,412 4,317 08 1990 0 .000 35,075 8,167 09 1991 0 .000 80,000 16,916 10 1992 0 .000 167,504 36,247 11 1993 0 .000 415,376 104,924 12 TOTAL 0 XXX 739,839 176,400 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 2 - SUMMARY 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 81,988 74,866 72,894 74,379 83,463 84,646 02 1984 170,537 186,690 184,112 189,743 186,729 188,364 03 1985 XXX 170,393 180,169 184,402 179,871 182,285 04 1986 XXX XXX 186,803 191,827 189,586 190,822 05 1987 XXX XXX XXX 256,247 255,238 253,746 06 1988 XXX XXX XXX XXX 322,891 315,088 07 1989 XXX XXX XXX XXX XXX 359,913 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX 12 TOTAL SCHEDULE P - PART 2 - SUMMARY 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR 85,348 84,833 86,030 88,671 2,641 3,838 02 1984 187,870 188,162 188,447 189,754 1,307 1,592 03 1985 181,499 183,357 183,839 184,752 913 1,395 04 1986 186,391 187,858 187,423 188,030 607 172 05 1987 242,595 240,878 242,219 241,716 - -503 838 06 1988 314,643 302,239 296,629 294,846 - -1,783 -7,393 07 1989 366,775 354,722 346,765 342,173 - -4,592 -12,549 08 1990 452,122 464,616 459,714 452,179 - -7,535 -12,437 09 1991 XXX 594,417 601,258 597,512 - -3,746 3,095 10 1992 XXX XXX 703,151 675,318 - -27,833 XXX 11 1993 XXX XXX XXX 853,478 XXX XXX 12 TOTAL - -40,524 -21,449 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 3 - SUMMARY 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 -35,086 46,417 56,057 62,502 73,014 02 1984 86,314 99,046 161,562 173,843 180,266 185,626 03 1985 XXX 73,037 124,385 150,176 165,407 173,455 04 1986 XXX XXX 64,895 111,967 143,731 162,310 05 1987 XXX XXX XXX 90,687 157,436 192,000 06 1988 XXX XXX XXX XXX 115,062 189,817 07 1989 XXX XXX XXX XXX XXX 131,085 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3 - SUMMARY 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR 76,215 78,462 80,209 81,448 XXX XXX 02 1984 185,436 185,989 186,474 186,847 XXX XXX 03 1985 178,487 180,976 183,113 183,718 XXX XXX 04 1986 174,409 181,079 183,901 185,812 XXX XXX 05 1987 216,127 228,930 235,718 239,549 XXX XXX 06 1988 234,130 262,654 276,385 283,077 XXX XXX 07 1989 221,177 280,575 310,407 320,750 XXX XXX 08 1990 142,613 293,651 368,412 411,496 XXX XXX 09 1991 XXX 254,246 424,930 505,505 XXX XXX 10 1992 XXX XXX 288,624 483,070 XXX XXX 11 1993 XXX XXX XXX 376,610 XXX XXX NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 4 - SUMMARY 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 18,596 11,136 2,676 4,580 3,898 2,017 02 1984 22,077 12,585 2,927 4,970 3,073 2,063 03 1985 XXX 23,798 7,230 7,837 3,697 2,607 04 1986 XXX XXX 26,253 15,927 10,441 8,056 05 1987 XXX XXX XXX 45,813 15,838 12,632 06 1988 XXX XXX XXX XXX 62,554 21,872 07 1989 XXX XXX XXX XXX XXX 68,378 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4 - SUMMARY 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 1,480 1,491 2,102 3,209 02 1984 1,577 1,630 1,185 1,334 03 1985 1,194 760 446 142 04 1986 3,016 1,646 836 336 05 1987 7,033 2,572 1,767 480 06 1988 15,346 7,481 3,825 1,706 07 1989 25,809 13,835 7,993 3,408 08 1990 85,367 30,004 15,852 6,596 09 1991 XXX 87,948 30,255 13,738 10 1992 XXX XXX 118,189 52,980 11 1993 XXX XXX XXX 151,952 SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 0 0 0 02 1984 354 178 176 244 122 17 03 1985 492 246 246 588 294 30 04 1986 450 225 225 291 174 20 05 1987 66 33 33 6 3 0 06 1988 0 0 0 0 0 0 07 1989 41 1 40 0 0 0 08 1990 75 2 73 1 0 0 09 1991 92 3 89 1 0 0 10 1992 122 6 116 26 0 1 11 1993 73 2 71 2 0 0 12 TOTAL XXX XXX XXX 1,159 593 68 SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 0 0 0 0 XXX 0 02 1984 8 0 2 133 30 0 03 1985 20 0 2 306 76 0 04 1986 17 0 3 123 37 0 05 1987 0 0 0 3 2 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 1 2 0 09 1991 0 0 0 1 2 0 10 1992 0 0 2 29 1 0 11 1993 0 0 0 2 1 0 12 TOTAL 45 0 9 598 XXX 0 SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 1 0 0 0 0 10 1992 0 1 0 0 0 0 11 1993 0 5 0 0 0 1 12 TOTAL 0 7 0 0 0 1 SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 XXX 02 1984 0 0 0 0 0 263 03 1985 0 0 0 0 0 620 04 1986 0 0 0 0 0 314 05 1987 0 0 0 0 0 6 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 1 09 1991 0 0 0 1 0 2 10 1992 0 0 0 1 0 30 11 1993 0 0 0 6 0 8 12 TOTAL 0 0 0 8 0 XXX SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 130 133 74.294 73.034 75.568 0 03 1985 314 306 126.016 127.642 124.390 0 04 1986 191 123 69.778 84.889 54.667 0 05 1987 3 3 9.091 9.091 9.091 0 06 1988 0 0 .000 .000 .000 0 07 1989 0 0 .000 .000 .000 0 08 1990 0 1 1.333 .000 1.370 0 09 1991 0 2 2.174 .000 2.247 0 10 1992 0 30 24.590 .000 25.862 0 11 1993 0 8 10.959 .000 11.268 0 12 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 0 0 02 1984 0 .000 0 0 03 1985 0 .000 0 0 04 1986 0 .000 0 0 05 1987 0 .000 0 0 06 1988 0 .000 0 0 07 1989 0 .000 0 0 08 1990 0 .000 0 0 09 1991 0 .000 1 0 10 1992 0 .000 1 0 11 1993 0 .000 5 1 12 TOTAL 0 XXX 7 1 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 1,354 1,104 -6 02 1984 140,764 42,252 98,512 111,025 30,435 11,455 03 1985 128,150 47,242 80,908 102,393 37,644 9,310 04 1986 109,853 34,443 75,410 73,903 23,120 5,290 05 1987 130,567 10,249 120,318 85,465 4,429 6,879 06 1988 169,135 12,255 156,880 106,908 4,864 8,789 07 1989 183,206 942 182,264 120,534 6,200 9,499 08 1990 241,121 1,486 239,635 171,223 17,966 11,417 09 1991 383,992 1,952 382,040 231,733 358 11,866 10 1992 467,165 1,810 465,355 244,192 391 9,172 11 1993 569,477 3,046 566,431 173,669 743 4,789 12 TOTAL XXX XXX XXX 1,422,399 127,254 88,460 SCHEDULE P - PART 1B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 74 4 79 249 XXX 233 02 1984 1,012 485 3,885 94,918 49,898 33 03 1985 1,674 658 3,879 76,264 41,420 704 04 1986 1,755 637 3,273 57,591 48,919 229 05 1987 407 824 5,016 92,524 51,557 299 06 1988 847 1,253 6,926 116,912 65,765 611 07 1989 1,080 2,010 9,108 131,861 80,559 1,146 08 1990 -477 3,030 11,544 176,695 105,177 5,248 09 1991 176 4,295 21,674 264,739 139,538 13,861 10 1992 0 4,455 23,148 276,121 162,504 40,327 11 1993 0 2,365 19,134 196,849 177,693 142,099 12 TOTAL 6,548 20,016 107,666 1,484,723 XXX 204,790 SCHEDULE P - PART 1B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 3 2 0 32 - -48 3 02 1984 12 1 0 1 1 3 03 1985 267 16 0 45 7 60 04 1986 71 0 0 54 16 0 05 1987 22 3 0 111 5 7 06 1988 206 11 0 124 49 9 07 1989 488 96 0 254 96 36 08 1990 3,234 257 0 912 472 151 09 1991 30 1,581 0 1,977 0 620 10 1992 49 11,355 0 6,720 0 3,575 11 1993 545 61,146 234 17,394 0 10,591 12 TOTAL 4,927 74,468 234 27,624 598 15,055 SCHEDULE P - PART 1B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 13 328 29 XXX 02 1984 0 0 2 27 13 126,762 03 1985 17 0 23 557 16 116,810 04 1986 0 0 14 210 12 83,210 05 1987 0 2 20 413 264 97,803 06 1988 0 16 34 534 2,390 123,410 07 1989 0 42 77 1,025 323 140,747 08 1990 0 117 367 3,229 660 201,101 09 1991 0 691 869 18,878 1,460 284,173 10 1992 0 2,697 2,913 64,841 5,235 341,402 11 1993 0 5,255 13,674 244,125 34,212 442,494 12 TOTAL 17 8,820 18,006 334,167 44,614 XXX SCHEDULE P - PART 1B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 31,813 94,949 90.053 75.293 96.383 0 03 1985 39,985 76,825 91.151 84.639 94.954 0 04 1986 25,409 57,801 75.747 73.771 76.649 0 05 1987 4,863 92,940 74.906 47.449 77.245 0 06 1988 5,966 117,444 72.965 48.682 74.862 0 07 1989 7,865 132,882 76.824 834.926 72.906 0 08 1990 21,194 179,907 83.403 1,426.245 75.075 0 09 1991 564 283,609 74.005 28.893 74.235 0 10 1992 440 340,962 73.080 24.309 73.269 0 11 1993 1,522 440,972 77.702 49.967 77.851 0 12 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 232 96 02 1984 0 .000 22 5 03 1985 0 .000 453 104 04 1986 0 .000 158 52 05 1987 0 .000 280 133 06 1988 0 .000 416 118 07 1989 0 .000 754 271 08 1990 0 .000 2,271 958 09 1991 0 .000 15,412 3,466 10 1992 0 .000 51,633 13,208 11 1993 0 .000 202,466 41,659 12 TOTAL 0 XXX 274,097 60,070 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 30 2 0 02 1984 6,397 3,440 2,957 6,358 3,921 707 03 1985 6,191 3,707 2,484 6,500 4,986 344 04 1986 3,632 1,438 2,194 2,692 1,718 474 05 1987 7,747 1,525 6,222 4,272 1,615 458 06 1988 9,378 2,007 7,371 4,890 957 907 07 1989 10,882 2,070 8,812 5,361 706 724 08 1990 11,958 1,703 10,255 7,487 1,843 909 09 1991 12,263 2,354 9,909 5,717 286 499 10 1992 13,097 3,206 9,891 3,073 0 216 11 1993 13,654 1,984 11,670 1,932 0 102 12 TOTAL XXX XXX XXX 48,312 16,034 5,340 SCHEDULE P - PART 1C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR -10 1 1 39 XXX 0 02 1984 329 7 113 2,928 481 0 03 1985 66 6 160 1,952 923 0 04 1986 355 700 161 1,254 330 0 05 1987 146 1 314 3,283 699 0 06 1988 192 50 324 4,972 905 120 07 1989 34 43 408 5,753 1,112 369 08 1990 221 66 561 6,893 1,453 2,346 09 1991 21 41 517 6,426 1,806 1,671 10 1992 9 64 428 3,708 1,893 2,370 11 1993 2 16 372 2,404 1,790 5,979 12 TOTAL 1,365 995 3,359 39,612 XXX 12,855 SCHEDULE P - PART 1C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR -1 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 35 5 0 0 0 14 07 1989 25 31 2 0 0 47 08 1990 1,286 153 70 0 0 297 09 1991 352 568 296 1 0 312 10 1992 134 1,755 817 3 0 658 11 1993 952 2,746 286 13 0 1,262 12 TOTAL 2,783 5,258 1,471 17 0 2,590 SCHEDULE P - PART 1C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 0 1 0 XXX 02 1984 0 0 0 0 0 7,240 03 1985 0 0 0 0 0 7,024 04 1986 0 0 0 0 0 3,342 05 1987 0 0 0 0 0 5,045 06 1988 3 0 4 105 4 6,264 07 1989 2 0 13 431 17 6,953 08 1990 105 0 84 1,419 27 11,837 09 1991 50 0 89 1,943 55 9,374 10 1992 74 19 185 3,946 132 8,688 11 1993 96 39 360 9,026 517 12,766 12 TOTAL 330 58 735 16,871 752 XXX SCHEDULE P - PART 1C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 4,312 2,928 113.178 125.349 99.019 0 03 1985 5,071 1,953 113.455 136.795 78.623 0 04 1986 2,088 1,254 92.015 145.202 57.156 0 05 1987 1,761 3,284 65.122 115.475 52.780 0 06 1988 1,187 5,077 66.795 59.143 68.878 0 07 1989 769 6,184 63.895 37.150 70.177 0 08 1990 3,525 8,312 98.988 206.988 81.053 0 09 1991 1,005 8,369 76.441 42.693 84.459 0 10 1992 1,034 7,654 66.336 32.252 77.383 0 11 1993 1,336 11,430 93.496 67.339 97.943 0 12 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 1 0 02 1984 0 .000 0 0 03 1985 0 .000 0 0 04 1986 0 .000 0 0 05 1987 0 .000 0 0 06 1988 0 .000 90 15 07 1989 0 .000 373 58 08 1990 0 .000 1,143 276 09 1991 0 .000 1,591 352 10 1992 0 .000 3,174 772 11 1993 0 .000 7,487 1,539 12 TOTAL 0 XXX 13,859 3,012 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1D - WORKERS' COMPENSATION (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 1,080 536 272 02 1984 84,846 1,826 83,020 51,663 2,605 4,684 03 1985 125,637 3,982 121,655 73,183 1,468 8,070 04 1986 189,815 7,735 182,080 97,948 867 11,034 05 1987 233,967 14,258 219,709 107,883 741 11,269 06 1988 257,276 6,103 251,173 111,919 0 11,146 07 1989 300,377 4,024 296,353 133,232 221 10,778 08 1990 340,583 4,099 336,484 166,813 0 12,766 09 1991 352,547 3,924 348,623 148,407 0 13,759 10 1992 398,609 4,553 394,056 99,027 0 8,176 11 1993 463,151 4,695 458,456 48,968 0 2,351 12 TOTAL XXX XXX XXX 1,040,123 6,438 94,305 SCHEDULE P - PART 1D - WORKERS' COMPENSATION 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 40 0 65 841 XXX 5,560 02 1984 138 0 5,096 58,700 21,709 829 03 1985 56 0 7,109 86,838 26,816 1,459 04 1986 125 0 10,238 118,228 32,894 4,042 05 1987 23 0 12,959 131,347 35,187 6,378 06 1988 0 0 14,996 138,061 34,316 9,909 07 1989 36 1,699 15,685 159,438 37,734 19,268 08 1990 0 2,285 18,886 198,465 42,898 32,663 09 1991 0 1,085 18,638 180,804 39,859 61,538 10 1992 0 408 16,806 124,009 38,995 90,131 11 1993 0 124 13,551 64,870 37,497 145,015 12 TOTAL 418 5,601 134,029 1,261,601 XXX 376,792 SCHEDULE P - PART 1D - WORKERS' COMPENSATION 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 3,690 0 0 0 0 796 02 1984 425 0 0 0 0 119 03 1985 1,039 16 0 0 0 212 04 1986 2,357 45 0 0 0 585 05 1987 5,077 117 0 0 0 930 06 1988 404 232 0 0 0 1,459 07 1989 2,376 397 0 0 0 2,842 08 1990 2,031 977 0 0 0 4,867 09 1991 252 1,714 0 0 0 9,108 10 1992 0 20,874 0 0 0 13,512 11 1993 780 35,391 1,000 0 0 28,001 12 TOTAL 18,431 59,763 1,000 0 0 62,431 SCHEDULE P - PART 1D - WORKERS' COMPENSATION 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 97 0 318 2,887 30 XXX 02 1984 59 0 50 514 56 62,441 03 1985 145 4 82 585 97 90,131 04 1986 295 5 247 2,267 209 124,139 05 1987 577 45 394 2,165 353 139,930 06 1988 23 289 624 11,797 559 150,285 07 1989 75 621 1,215 21,271 908 183,417 08 1990 11 1,468 2,105 38,570 1,988 239,077 09 1991 3 2,299 3,934 76,039 3,796 257,098 10 1992 0 2,620 8,302 132,819 4,743 256,828 11 1993 105 3,248 27,435 233,957 11,759 300,712 12 TOTAL 1,390 10,599 44,706 522,871 24,498 XXX SCHEDULE P - PART 1D - WORKERS' COMPENSATION 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 3,227 59,214 73.593 176.725 71.325 0 03 1985 2,708 87,423 71.739 68.006 71.861 0 04 1986 3,644 120,495 65.400 47.111 66.177 0 05 1987 6,418 133,512 59.808 45.013 60.768 0 06 1988 427 149,858 58.414 6.997 59.663 0 07 1989 2,708 180,709 61.062 67.296 60.978 0 08 1990 2,042 237,035 70.196 49.817 70.445 0 09 1991 255 256,843 72.926 6.498 73.674 0 10 1992 0 256,828 64.431 .000 65.176 0 11 1993 1,885 298,827 64.927 40.149 65.181 0 12 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1D - WORKERS' COMPENSATION 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 1,870 1,017 02 1984 0 .000 404 110 03 1985 0 .000 436 149 04 1986 0 .000 1,730 537 05 1987 0 .000 1,418 747 06 1988 0 .000 9,737 2,060 07 1989 0 .000 17,289 3,982 08 1990 0 .000 31,609 6,961 09 1991 0 .000 63,000 13,039 10 1992 0 .000 111,005 21,814 11 1993 0 .000 178,626 55,331 12 TOTAL 0 XXX 417,124 105,747 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1E - COMMERICAL MULTIPLE PERIL (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX -1 - -124 21 02 1984 -4 0 -4 1 0 0 03 1985 1 0 1 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL XXX XXX XXX 0 - -124 21 SCHEDULE P - PART 1E - COMMERICAL MULTIPLE PERIL 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 51 0 0 93 XXX 145 02 1984 0 0 0 1 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 51 0 0 94 XXX 145 SCHEDULE P - PART 1E - COMMERICAL MULTIPLE PERIL 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 145 0 0 60 69 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 145 0 0 60 69 0 SCHEDULE P - PART 1E - COMMERICAL MULTIPLE PERIL 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 0 -9 4 XXX 02 1984 0 0 0 0 0 1 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 -9 4 XXX SCHEDULE P - PART 1E - COMMERICAL MULTIPLE PERIL 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 0 1 -25.000 .000 - -25.000 0 03 1985 0 0 .000 .000 .000 0 04 1986 0 0 .000 .000 .000 0 05 1987 0 0 .000 .000 .000 0 06 1988 0 0 .000 .000 .000 0 07 1989 0 0 .000 .000 .000 0 08 1990 0 0 .000 .000 .000 0 09 1991 0 0 .000 .000 .000 0 10 1992 0 0 .000 .000 .000 0 11 1993 0 0 .000 .000 .000 0 12 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1E - COMMERICAL MULTIPLE PERIL 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 0 -9 02 1984 0 .000 0 0 03 1985 0 .000 0 0 04 1986 0 .000 0 0 05 1987 0 .000 0 0 06 1988 0 .000 0 0 07 1989 0 .000 0 0 08 1990 0 .000 0 0 09 1991 0 .000 0 0 10 1992 0 .000 0 0 11 1993 0 .000 0 0 12 TOTAL 0 XXX 0 -9 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 0 0 0 02 1984 19 0 19 0 0 0 03 1985 6 0 6 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL XXX XXX XXX 0 0 0 SCHEDULE P - PART 1F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 0 0 0 0 XXX 0 02 1984 0 0 2 2 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 2 2 XXX 0 SCHEDULE P - PART 1F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 0 0 SCHEDULE P - PART 1F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 XXX 02 1984 0 0 0 0 0 2 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 0 XXX SCHEDULE P - PART 1F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 0 2 10.526 .000 10.526 0 03 1985 0 0 .000 .000 .000 0 04 1986 0 0 .000 .000 .000 0 05 1987 0 0 .000 .000 .000 0 06 1988 0 0 .000 .000 .000 0 07 1989 0 0 .000 .000 .000 0 08 1990 0 0 .000 .000 .000 0 09 1991 0 0 .000 .000 .000 0 10 1992 0 0 .000 .000 .000 0 11 1993 0 0 .000 .000 .000 0 12 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 0 0 02 1984 0 .000 0 0 03 1985 0 .000 0 0 04 1986 0 .000 0 0 05 1987 0 .000 0 0 06 1988 0 .000 0 0 07 1989 0 .000 0 0 08 1990 0 .000 0 0 09 1991 0 .000 0 0 10 1992 0 .000 0 0 11 1993 0 .000 0 0 12 TOTAL 0 XXX 0 0 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS MADE (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL XXX XXX XXX 0 0 0 SCHEDULE P - PART 1F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS MADE 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 0 0 0 0 XXX 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 XXX 0 SCHEDULE P - PART 1F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS MADE 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 0 0 SCHEDULE P - PART 1F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS MADE 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 XXX 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 0 XXX SCHEDULE P - PART 1F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS MADE 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 0 0 .000 .000 .000 0 03 1985 0 0 .000 .000 .000 0 04 1986 0 0 .000 .000 .000 0 05 1987 0 0 .000 .000 .000 0 06 1988 0 0 .000 .000 .000 0 07 1989 0 0 .000 .000 .000 0 08 1990 0 0 .000 .000 .000 0 09 1991 0 0 .000 .000 .000 0 10 1992 0 0 .000 .000 .000 0 11 1993 0 0 .000 .000 .000 0 12 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS MADE 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 0 0 02 1984 0 .000 0 0 03 1985 0 .000 0 0 04 1986 0 .000 0 0 05 1987 0 .000 0 0 06 1988 0 .000 0 0 07 1989 0 .000 0 0 08 1990 0 .000 0 0 09 1991 0 .000 0 0 10 1992 0 .000 0 0 11 1993 0 .000 0 0 12 TOTAL 0 XXX 0 0 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1G - SPECIAL LIABILITY (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 0 0 0 02 1984 43 -15 58 53 1 12 03 1985 -2 0 -2 0 0 0 04 1986 5 1 4 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 94 4 90 29 0 3 08 1990 197 13 184 73 0 6 09 1991 307 20 287 112 0 14 10 1992 446 46 400 277 0 38 11 1993 550 45 505 162 0 27 12 TOTAL XXX XXX XXX 706 1 100 SCHEDULE P - PART 1G - SPECIAL LIABILITY 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 0 0 0 0 XXX 0 02 1984 0 0 12 76 XXX 0 03 1985 0 0 0 0 XXX 0 04 1986 0 0 0 0 XXX 0 05 1987 0 0 0 0 XXX 0 06 1988 0 0 0 0 XXX 0 07 1989 0 1 21 53 XXX 0 08 1990 0 1 6 85 XXX 0 09 1991 0 1 9 135 XXX 0 10 1992 0 0 18 333 XXX 0 11 1993 0 1 19 208 XXX 44 12 TOTAL 0 4 85 890 XXX 44 SCHEDULE P - PART 1G - SPECIAL LIABILITY 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 4 0 0 0 1 11 1993 0 40 0 0 0 14 12 TOTAL 0 44 0 0 0 15 SCHEDULE P - PART 1G - SPECIAL LIABILITY 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 XXX 02 1984 0 0 0 0 0 77 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 53 08 1990 0 0 0 0 0 85 09 1991 0 0 0 0 0 135 10 1992 0 0 0 5 0 338 11 1993 0 0 4 102 17 310 12 TOTAL 0 0 4 107 17 XXX SCHEDULE P - PART 1G - SPECIAL LIABILITY 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 1 76 179.070 -6.667 131.034 0 03 1985 0 0 .000 .000 .000 0 04 1986 0 0 .000 .000 .000 0 05 1987 0 0 .000 .000 .000 0 06 1988 0 0 .000 .000 .000 0 07 1989 0 53 56.383 .000 58.889 0 08 1990 0 85 43.147 .000 46.196 0 09 1991 0 135 43.974 .000 47.038 0 10 1992 0 338 75.785 .000 84.500 0 11 1993 0 310 56.364 .000 61.386 0 12 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1G - SPECIAL LIABILITY 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 0 0 02 1984 0 .000 0 0 03 1985 0 .000 0 0 04 1986 0 .000 0 0 05 1987 0 .000 0 0 06 1988 0 .000 0 0 07 1989 0 .000 0 0 08 1990 0 .000 0 0 09 1991 0 .000 0 0 10 1992 0 .000 4 1 11 1993 0 .000 84 18 12 TOTAL 0 XXX 88 19 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1H - SECTION 1 - OTHER LIABILITY - OCCURRENCE (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 60 - -253 36 02 1984 1,854 1,735 119 5,727 4,653 1,795 03 1985 2,477 1,194 1,283 2,070 1,010 156 04 1986 6,460 2,404 4,056 2,345 290 133 05 1987 3,601 1,474 2,127 1,632 177 93 06 1988 1,788 682 1,106 837 0 49 07 1989 920 372 548 388 3 21 08 1990 752 340 412 348 0 20 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL XXX XXX XXX 13,407 5,880 2,303 SCHEDULE P - PART 1H - SECTION 1 - OTHER LIABILITY - OCCURRENCE 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 164 66 1 186 XXX 4,658 02 1984 1,311 39 16 1,574 190 2,701 03 1985 82 0 10 1,144 52 0 04 1986 3 0 35 2,220 0 0 05 1987 0 0 27 1,575 0 0 06 1988 0 0 18 904 0 0 07 1989 0 0 13 419 1 0 08 1990 0 0 9 377 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 1,560 105 129 8,399 XXX 7,359 SCHEDULE P - PART 1H - SECTION 1 - OTHER LIABILITY - OCCURRENCE 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 3,009 8,422 6,056 555 371 400 02 1984 1,661 3,000 1,845 278 171 300 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 4,670 11,422 7,901 833 542 700 SCHEDULE P - PART 1H - SECTION 1 - OTHER LIABILITY - OCCURRENCE 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 263 0 75 4,411 87 XXX 02 1984 185 0 75 2,492 70 13,892 03 1985 0 0 0 0 0 2,236 04 1986 0 0 0 0 0 2,513 05 1987 0 0 0 0 0 1,752 06 1988 0 0 0 0 0 904 07 1989 0 0 0 0 0 422 08 1990 0 0 0 0 0 377 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 448 0 150 6,903 157 XXX SCHEDULE P - PART 1H - SECTION 1 - OTHER LIABILITY - OCCURRENCE 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 9,826 4,066 749.299 566.340 3,416.807 0 03 1985 1,092 1,144 90.270 91.457 89.166 0 04 1986 293 2,220 38.901 12.188 54.734 0 05 1987 177 1,575 48.653 12.008 74.048 0 06 1988 0 904 50.559 .000 81.736 0 07 1989 3 419 45.870 .806 76.460 0 08 1990 0 377 50.133 .000 91.505 0 09 1991 0 0 .000 .000 .000 0 10 1992 0 0 .000 .000 .000 0 11 1993 0 0 .000 .000 .000 0 12 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1H - SECTION 1 - OTHER LIABILITY - OCCURRENCE 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 4,015 396 02 1984 0 .000 2,195 297 03 1985 0 .000 0 0 04 1986 0 .000 0 0 05 1987 0 .000 0 0 06 1988 0 .000 0 0 07 1989 0 .000 0 0 08 1990 0 .000 0 0 09 1991 0 .000 0 0 10 1992 0 .000 0 0 11 1993 0 .000 0 0 12 TOTAL 0 XXX 6,210 693 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1H - SECTION 2 - OTHER LIABILITY - CLAIMS MADE (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL XXX XXX XXX 0 0 0 SCHEDULE P - PART 1H - SECTION 2 - OTHER LIABILITY - CLAIMS MADE 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 0 0 0 0 XXX 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 XXX 0 SCHEDULE P - PART 1H - SECTION 2 - OTHER LIABILITY - CLAIMS MADE 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 0 0 SCHEDULE P - PART 1H - SECTION 2 - OTHER LIABILITY - CLAIMS MADE 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 XXX 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 0 XXX SCHEDULE P - PART 1H - SECTION 2 - OTHER LIABILITY - CLAIMS MADE 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 0 0 .000 .000 .000 0 03 1985 0 0 .000 .000 .000 0 04 1986 0 0 .000 .000 .000 0 05 1987 0 0 .000 .000 .000 0 06 1988 0 0 .000 .000 .000 0 07 1989 0 0 .000 .000 .000 0 08 1990 0 0 .000 .000 .000 0 09 1991 0 0 .000 .000 .000 0 10 1992 0 0 .000 .000 .000 0 11 1993 0 0 .000 .000 .000 0 12 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1H - SECTION 2 - OTHER LIABILITY - CLAIMS MADE 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 0 0 02 1984 0 .000 0 0 03 1985 0 .000 0 0 04 1986 0 .000 0 0 05 1987 0 .000 0 0 06 1988 0 .000 0 0 07 1989 0 .000 0 0 08 1990 0 .000 0 0 09 1991 0 .000 0 0 10 1992 0 .000 0 0 11 1993 0 .000 0 0 12 TOTAL 0 XXX 0 0 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1I - SPECIAL PROPERTY (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 0 0 0 02 1992 0 0 0 0 0 0 03 1993 0 0 0 0 0 0 04 TOTAL XXX XXX XXX 0 0 0 SCHEDULE P - PART 1I - SPECIAL PROPERTY 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 0 0 0 0 XXX 0 02 1992 0 0 0 0 XXX 0 03 1993 0 0 0 0 XXX 0 04 TOTAL 0 0 0 0 XXX 0 SCHEDULE P - PART 1I - SPECIAL PROPERTY 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 0 02 1992 0 0 0 0 0 0 03 1993 0 0 0 0 0 0 04 TOTAL 0 0 0 0 0 0 SCHEDULE P - PART 1I - SPECIAL PROPERTY 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 XXX 02 1992 0 0 0 0 0 0 03 1993 0 0 0 0 0 0 04 TOTAL 0 0 0 0 0 XXX SCHEDULE P - PART 1I - SPECIAL PROPERTY 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1992 0 0 .000 .000 .000 0 03 1993 0 0 .000 .000 .000 0 04 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1I - SPECIAL PROPERTY 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 0 0 02 1992 0 .000 0 0 03 1993 0 .000 0 0 04 TOTAL 0 XXX 0 0 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1J - AUTO PHYSICAL DAMAGE (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX -855 - -532 890 02 1992 205,072 85 204,987 105,429 0 3,836 03 1993 256,132 0 256,132 132,458 0 3,792 04 TOTAL XXX XXX XXX 237,033 - -532 8,519 SCHEDULE P - PART 1J - AUTO PHYSICAL DAMAGE 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR -140 1,174 3 710 XXX -274 02 1992 0 10,350 8,166 117,432 93,691 -161 03 1993 0 7,116 9,659 145,910 111,040 14,248 04 TOTAL -140 18,639 17,828 264,051 XXX 13,813 SCHEDULE P - PART 1J - AUTO PHYSICAL DAMAGE 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR -70 261 0 48 68 40 02 1992 0 1,713 0 60 0 288 03 1993 0 10,973 0 2,398 0 2,015 04 TOTAL -70 12,947 0 2,506 68 2,343 SCHEDULE P - PART 1J - AUTO PHYSICAL DAMAGE 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 1,069 21 98 132 XXX 02 1992 0 1,916 103 2,002 112 119,434 03 1993 0 8,011 1,964 31,597 6,901 177,507 04 TOTAL 0 10,997 2,087 33,698 7,145 XXX SCHEDULE P - PART 1J - AUTO PHYSICAL DAMAGE 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1992 0 119,434 58.240 .000 58.264 0 03 1993 0 177,507 69.303 .000 69.303 0 04 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1J - AUTO PHYSICAL DAMAGE 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 57 41 02 1992 0 .000 1,552 451 03 1993 0 .000 25,221 6,376 04 TOTAL 0 XXX 26,830 6,868 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAG (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX -3 0 0 02 1992 23 0 23 1 0 0 03 1993 15 0 15 0 0 0 04 TOTAL XXX XXX XXX -2 0 0 SCHEDULE P - PART 1K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAG 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 0 0 0 -3 XXX 0 02 1992 0 0 1 2 XXX 0 03 1993 0 0 0 0 XXX 0 04 TOTAL 0 0 1 -1 XXX 0 SCHEDULE P - PART 1K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAG 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 0 02 1992 0 0 0 0 0 0 03 1993 0 5 0 0 0 0 04 TOTAL 0 5 0 0 0 0 SCHEDULE P - PART 1K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAG 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 XXX 02 1992 0 0 0 0 0 2 03 1993 0 0 1 6 0 6 04 TOTAL 0 0 1 6 0 XXX SCHEDULE P - PART 1K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAG 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1992 0 2 8.696 .000 8.696 0 03 1993 0 6 40.000 .000 40.000 0 04 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAG 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 0 0 02 1992 0 .000 0 0 03 1993 0 .000 5 1 04 TOTAL 0 XXX 5 1 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH) (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 0 0 0 02 1992 0 0 0 0 0 0 03 1993 0 0 0 0 0 0 04 TOTAL XXX XXX XXX 0 0 0 SCHEDULE P - PART 1L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH) 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 0 0 0 0 XXX 0 02 1992 0 0 0 0 XXX 0 03 1993 0 0 0 0 XXX 0 04 TOTAL 0 0 0 0 XXX 0 SCHEDULE P - PART 1L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH) 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 0 02 1992 0 0 0 0 0 0 03 1993 0 0 0 0 0 0 04 TOTAL 0 0 0 0 0 0 SCHEDULE P - PART 1L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH) 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 XXX 02 1992 0 0 0 0 0 0 03 1993 0 0 0 0 0 0 04 TOTAL 0 0 0 0 0 XXX SCHEDULE P - PART 1L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH) 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1992 0 0 .000 .000 .000 0 03 1993 0 0 .000 .000 .000 0 04 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH) 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 0 0 02 1992 0 .000 0 0 03 1993 0 .000 0 0 04 TOTAL 0 XXX 0 0 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1M - INTERNATIONAL (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 0 0 0 02 1984 -8 0 -8 0 0 0 03 1985 -10 -2 -8 0 0 0 04 1986 -22 -1 -21 0 0 0 05 1987 15 0 15 0 0 0 06 1988 16 1 15 0 0 0 07 1989 -1 0 -1 0 0 0 08 1990 -1 0 -1 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL XXX XXX XXX 0 0 0 SCHEDULE P - PART 1M - INTERNATIONAL 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 0 0 0 0 XXX 0 02 1984 0 0 0 0 XXX 0 03 1985 0 0 0 0 XXX 0 04 1986 0 0 0 0 XXX 0 05 1987 0 0 0 0 XXX 0 06 1988 0 0 0 0 XXX 0 07 1989 0 0 0 0 XXX 0 08 1990 0 0 0 0 XXX 0 09 1991 0 0 0 0 XXX 0 10 1992 0 0 0 0 XXX 0 11 1993 0 0 0 0 XXX 0 12 TOTAL 0 0 0 0 XXX 0 SCHEDULE P - PART 1M - INTERNATIONAL 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 0 0 SCHEDULE P - PART 1M - INTERNATIONAL 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 XXX 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 0 XXX SCHEDULE P - PART 1M - INTERNATIONAL 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 0 0 .000 .000 .000 0 03 1985 0 0 .000 .000 .000 0 04 1986 0 0 .000 .000 .000 0 05 1987 0 0 .000 .000 .000 0 06 1988 0 0 .000 .000 .000 0 07 1989 0 0 .000 .000 .000 0 08 1990 0 0 .000 .000 .000 0 09 1991 0 0 .000 .000 .000 0 10 1992 0 0 .000 .000 .000 0 11 1993 0 0 .000 .000 .000 0 12 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1M - INTERNATIONAL 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 0 0 02 1984 0 .000 0 0 03 1985 0 .000 0 0 04 1986 0 .000 0 0 05 1987 0 .000 0 0 06 1988 0 .000 0 0 07 1989 0 .000 0 0 08 1990 0 .000 0 0 09 1991 0 .000 0 0 10 1992 0 .000 0 0 11 1993 0 .000 0 0 12 TOTAL 0 XXX 0 0 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1N - REINSURANCE A (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 1988 0 0 0 0 0 0 02 1989 0 0 0 0 0 0 03 1990 0 0 0 0 0 0 04 1991 0 0 0 0 0 0 05 1992 8,635 0 8,635 8,659 0 0 06 1993 9,111 0 9,111 7,665 0 0 07 TOTAL XXX XXX XXX 16,324 0 0 SCHEDULE P - PART 1N - REINSURANCE A 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 1988 0 0 0 0 XXX 0 02 1989 0 0 0 0 XXX 0 03 1990 0 0 0 0 XXX 0 04 1991 0 0 0 0 XXX 0 05 1992 0 0 0 8,659 XXX 0 06 1993 0 0 0 7,665 XXX 0 07 TOTAL 0 0 0 16,324 XXX 0 SCHEDULE P - PART 1N - REINSURANCE A 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 1988 0 0 0 0 0 0 02 1989 0 0 0 0 0 0 03 1990 0 0 0 0 0 0 04 1991 0 0 0 0 0 0 05 1992 0 135 0 0 0 0 06 1993 0 1,482 0 0 0 0 07 TOTAL 0 1,617 0 0 0 0 SCHEDULE P - PART 1N - REINSURANCE A 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 1988 0 0 0 0 XXX 0 02 1989 0 0 0 0 XXX 0 03 1990 0 0 0 0 XXX 0 04 1991 0 0 0 0 XXX 0 05 1992 0 0 0 135 XXX 8,794 06 1993 0 0 0 1,482 XXX 9,147 07 TOTAL 0 0 0 1,617 XXX XXX SCHEDULE P - PART 1N - REINSURANCE A 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 1988 0 0 .000 .000 .000 0 02 1989 0 0 .000 .000 .000 0 03 1990 0 0 .000 .000 .000 0 04 1991 0 0 .000 .000 .000 0 05 1992 0 8,794 .000 .000 .000 0 06 1993 0 9,147 .000 .000 .000 0 07 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1N - REINSURANCE A 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 1988 0 .000 0 0 02 1989 0 .000 0 0 03 1990 0 .000 0 0 04 1991 0 .000 0 0 05 1992 0 .000 135 0 06 1993 0 .000 1,482 0 07 TOTAL 0 XXX 1,617 0 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1O - REINSURANCE B (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 1988 61 0 61 0 0 0 02 1989 21 0 21 0 0 0 03 1990 860 0 860 953 0 0 04 1991 1,665 0 1,665 1,794 0 0 05 1992 1,297 0 1,297 1,348 0 0 06 1993 1,433 0 1,433 1,437 0 0 07 TOTAL XXX XXX XXX 5,532 0 0 SCHEDULE P - PART 1O - REINSURANCE B 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 1988 0 0 0 0 XXX 0 02 1989 0 0 0 0 XXX 0 03 1990 0 0 0 953 XXX 0 04 1991 0 0 0 1,794 XXX 0 05 1992 0 0 0 1,348 XXX 0 06 1993 0 0 0 1,437 XXX 0 07 TOTAL 0 0 0 5,532 XXX 0 SCHEDULE P - PART 1O - REINSURANCE B 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 1988 0 0 0 0 0 0 02 1989 0 0 0 0 0 0 03 1990 0 0 0 0 0 0 04 1991 0 0 0 0 0 0 05 1992 0 0 0 0 0 0 06 1993 0 0 0 0 0 0 07 TOTAL 0 0 0 0 0 0 SCHEDULE P - PART 1O - REINSURANCE B 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 1988 0 0 0 0 XXX 0 02 1989 0 0 0 0 XXX 0 03 1990 0 0 0 0 XXX 953 04 1991 0 0 0 0 XXX 1,794 05 1992 0 0 0 0 XXX 1,348 06 1993 0 0 0 0 XXX 1,437 07 TOTAL 0 0 0 0 XXX XXX SCHEDULE P - PART 1O - REINSURANCE B 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 1988 0 0 .000 .000 .000 0 02 1989 0 0 .000 .000 .000 0 03 1990 0 953 .000 .000 .000 0 04 1991 0 1,794 .000 .000 .000 0 05 1992 0 1,348 .000 .000 .000 0 06 1993 0 1,437 .000 .000 .000 0 07 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1O - REINSURANCE B 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 1988 0 .000 0 0 02 1989 0 .000 0 0 03 1990 0 .000 0 0 04 1991 0 .000 0 0 05 1992 0 .000 0 0 06 1993 0 .000 0 0 07 TOTAL 0 XXX 0 0 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1P - REINSURANCE C (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 1988 0 0 0 0 0 0 02 1989 0 0 0 0 0 0 03 1990 0 0 0 0 0 0 04 1991 0 0 0 0 0 0 05 1992 0 0 0 0 0 0 06 1993 0 0 0 0 0 0 07 TOTAL XXX XXX XXX 0 0 0 SCHEDULE P - PART 1P - REINSURANCE C 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 1988 0 0 0 0 XXX 0 02 1989 0 0 0 0 XXX 0 03 1990 0 0 0 0 XXX 0 04 1991 0 0 0 0 XXX 0 05 1992 0 0 0 0 XXX 0 06 1993 0 0 0 0 XXX 0 07 TOTAL 0 0 0 0 XXX 0 SCHEDULE P - PART 1P - REINSURANCE C 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 1988 0 0 0 0 0 0 02 1989 0 0 0 0 0 0 03 1990 0 0 0 0 0 0 04 1991 0 0 0 0 0 0 05 1992 0 0 0 0 0 0 06 1993 0 0 0 0 0 0 07 TOTAL 0 0 0 0 0 0 SCHEDULE P - PART 1P - REINSURANCE C 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 1988 0 0 0 0 XXX 0 02 1989 0 0 0 0 XXX 0 03 1990 0 0 0 0 XXX 0 04 1991 0 0 0 0 XXX 0 05 1992 0 0 0 0 XXX 0 06 1993 0 0 0 0 XXX 0 07 TOTAL 0 0 0 0 XXX XXX SCHEDULE P - PART 1P - REINSURANCE C 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 1988 0 0 .000 .000 .000 0 02 1989 0 0 .000 .000 .000 0 03 1990 0 0 .000 .000 .000 0 04 1991 0 0 .000 .000 .000 0 05 1992 0 0 .000 .000 .000 0 06 1993 0 0 .000 .000 .000 0 07 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1P - REINSURANCE C 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 1988 0 .000 0 0 02 1989 0 .000 0 0 03 1990 0 .000 0 0 04 1991 0 .000 0 0 05 1992 0 .000 0 0 06 1993 0 .000 0 0 07 TOTAL 0 XXX 0 0 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1Q - REINSURANCE D (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 0 0 0 02 1984 0 0 0 0 0 0 03 1985 110 0 110 216 0 0 04 1986 199 0 199 293 0 0 05 1987 6 0 6 6 0 0 06 TOTAL XXX XXX XXX 515 0 0 SCHEDULE P - PART 1Q - REINSURANCE D 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 0 0 0 0 XXX 0 02 1984 0 0 0 0 XXX 0 03 1985 0 0 0 216 XXX 0 04 1986 0 0 0 293 XXX 0 05 1987 0 0 0 6 XXX 0 06 TOTAL 0 0 0 515 XXX 0 SCHEDULE P - PART 1Q - REINSURANCE D 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 TOTAL 0 0 0 0 0 0 SCHEDULE P - PART 1Q - REINSURANCE D 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 0 0 XXX XXX 02 1984 0 0 0 0 XXX 0 03 1985 0 0 0 0 XXX 216 04 1986 0 0 0 0 XXX 293 05 1987 0 0 0 0 XXX 6 06 TOTAL 0 0 0 0 XXX XXX SCHEDULE P - PART 1Q - REINSURANCE D 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 0 0 .000 .000 .000 0 03 1985 0 216 .000 .000 .000 0 04 1986 0 293 .000 .000 .000 0 05 1987 0 6 .000 .000 .000 0 06 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1Q - REINSURANCE D 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 0 0 02 1984 0 .000 0 0 03 1985 0 .000 0 0 04 1986 0 .000 0 0 05 1987 0 .000 0 0 06 TOTAL 0 XXX 0 0 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 0 0 0 02 1984 11 6 5 136 31 9 03 1985 481 205 276 901 558 21 04 1986 1,632 612 1,020 1,230 557 41 05 1987 1,159 479 680 407 3 23 06 1988 656 251 405 251 0 18 07 1989 323 131 192 172 16 12 08 1990 318 151 167 81 0 5 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL XXX XXX XXX 3,178 1,165 129 SCHEDULE P - PART 1R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 0 0 0 0 XXX 0 02 1984 1 0 2 115 5 0 03 1985 2 0 16 378 25 0 04 1986 1 0 12 725 9 0 05 1987 0 0 9 436 4 0 06 1988 0 0 7 276 0 0 07 1989 0 0 3 171 0 0 08 1990 0 0 6 92 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 4 0 55 2,193 XXX 0 SCHEDULE P - PART 1R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 0 0 SCHEDULE P - PART 1R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 XXX 02 1984 0 0 0 0 0 147 03 1985 0 0 0 0 0 938 04 1986 0 0 0 0 0 1,283 05 1987 0 0 0 0 0 439 06 1988 0 0 0 0 0 276 07 1989 0 0 0 0 0 187 08 1990 0 0 0 0 0 92 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 0 XXX SCHEDULE P - PART 1R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 32 115 1,336.364 533.333 2,300.000 0 03 1985 560 378 195.010 273.171 136.957 0 04 1986 558 725 78.615 91.176 71.078 0 05 1987 3 436 37.877 .626 64.118 0 06 1988 0 276 42.073 .000 68.148 0 07 1989 16 171 57.895 12.214 89.063 0 08 1990 0 92 28.931 .000 55.090 0 09 1991 0 0 .000 .000 .000 0 10 1992 0 0 .000 .000 .000 0 11 1993 0 0 .000 .000 .000 0 12 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 0 0 02 1984 0 .000 0 0 03 1985 0 .000 0 0 04 1986 0 .000 0 0 05 1987 0 .000 0 0 06 1988 0 .000 0 0 07 1989 0 .000 0 0 08 1990 0 .000 0 0 09 1991 0 .000 0 0 10 1992 0 .000 0 0 11 1993 0 .000 0 0 12 TOTAL 0 XXX 0 0 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 1R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS MADE (000 OMITTED) 1 PREMIUMS EARNED LOSS AND LOSS EXPENSE PAYMENTS YEARS IN 2 3 4 ALLOCATED LOSS WHICH PRE- LOSS PAYMENTS EXP PAYMENTS MIUMS WERE DIRECT NET 5 6 7 EARNED AND AND CEDED (2 - 3) DIRECT DIRECT LOSSES ASSUMED AND CEDED AND WERE INC ASSUMED ASSUMED 01 PRIOR XXX XXX XXX 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL XXX XXX XXX 0 0 0 SCHEDULE P - PART 1R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS MADE 1 LOSS AND LOSS EXPENSE PAYMENTS LOSSES UNPAID YEARS IN ALLOC LOSS 9 10 11 12 CASE BASIS WHICH PRE- EXPENSE NUMBER OF MIUMS WERE PAYMENTS SALVAGE UNALLOCATED TOTAL CLAIMS 13 EARNED AND 8 AND LOSS NET PAID REPORTED - - DIRECT LOSSES CEDED SUBROGATION EXPENSE (5 - 6 + 7 DIRECT AND AND WERE INC RECEIVED PAYMENTS - 8 + 10) ASSUMED ASSUMED 01 PRIOR 0 0 0 0 XXX 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 XXX 0 SCHEDULE P - PART 1R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS MADE 1 LOSSES UNPAID ALLOCATED LOSS EXPENSES UNPAID YEARS IN CASE BASIS BULK + IBNR CASE BASIS BULK + IBNR WHICH PRE- MIUMS WERE 14 15 16 17 18 19 EARNED AND DIRECT DIRECT DIRECT LOSSES CEDED AND CEDED AND CEDED AND WERE INC ASSUMED ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 0 0 SCHEDULE P - PART 1R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS MADE 1 21 22 23 24 TOTAL LOSSES YEARS IN BULK + IBNR & LOSS EXP WHICH PRE- NUMBER OF INCURRED MIUMS WERE 20 SALVAGE UNALLOCATED TOTAL CLAIMS 25 EARNED AND AND LOSS NET LOSSES OUTSTANDING DIRECT LOSSES CEDED SUBROGATION EXPENSES & EXPENSES DIRECT AND AND WERE INC ANTICIPATED UNPAID UNPAID ASSUMED ASSUMED 01 PRIOR 0 0 0 0 0 XXX 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 0 0 0 0 0 0 10 1992 0 0 0 0 0 0 11 1993 0 0 0 0 0 0 12 TOTAL 0 0 0 0 0 XXX SCHEDULE P - PART 1R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS MADE 1 TOTAL LOSSES AND LOSS LOSS AND LOSS EXPENSE PERCENTAGE DISCOUNT FOR YEARS IN EXPENSES INCURRED (INCURRED/PREMIUMS EARNED) TIME VALUE WHICH PRE- OF MONEY MIUMS WERE 26 27 28 29 30 31 EARNED AND DIRECT LOSSES CEDED NET* AND CEDED NET LOSS WERE INC ASSUMED 01 PRIOR XXX XXX XXX XXX XXX 0 02 1984 0 0 .000 .000 .000 0 03 1985 0 0 .000 .000 .000 0 04 1986 0 0 .000 .000 .000 0 05 1987 0 0 .000 .000 .000 0 06 1988 0 0 .000 .000 .000 0 07 1989 0 0 .000 .000 .000 0 08 1990 0 0 .000 .000 .000 0 09 1991 0 0 .000 .000 .000 0 10 1992 0 0 .000 .000 .000 0 11 1993 0 0 .000 .000 .000 0 12 TOTAL XXX XXX XXX XXX XXX 0 SCHEDULE P - PART 1R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS MADE 1 DISCOUNT FOR 33 NET BALANCE SHEET YEARS IN TIME VALUE RESERVES AFTER DISCOUNT WHICH PRE- OF MONEY INTER- MIUMS WERE 32 COMPANY 34 35 EARNED AND POOLING LOSS LOSSES LOSS PARTICIPATION LOSSES EXPENSES WERE INC EXPENSE PERCENTAGE UNPAID UNPAID 01 PRIOR 0 XXX 0 0 02 1984 0 .000 0 0 03 1985 0 .000 0 0 04 1986 0 .000 0 0 05 1987 0 .000 0 0 06 1988 0 .000 0 0 07 1989 0 .000 0 0 08 1990 0 .000 0 0 09 1991 0 .000 0 0 10 1992 0 .000 0 0 11 1993 0 .000 0 0 12 TOTAL 0 XXX 0 0 NOTE: FOR "PRIOR," REPORT AMOUNTS PAID OR RECEIVED IN CURRENT YEAR ONLY. REPORT CUMULATIVE AMOUNTS PAID OR RECEIVED FOR SPECIFIC YEARS. REPORT LOSS PAYMENTS NET OF SALVAGE AND SUBROGATION RECEIVED. *NET = (25 - 26) = (11 + 23) SCHEDULE P - PART 2A - HOMEOWNERS/FARMOWNERS 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 150 130 135 130 130 130 03 1985 XXX 244 307 304 304 304 04 1986 XXX XXX 185 119 119 119 05 1987 XXX XXX XXX 3 3 3 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX 12 TOTAL SCHEDULE P - PART 2A - HOMEOWNERS/FARMOWNERS 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR -3 -3 -3 -3 0 0 02 1984 131 131 131 131 0 0 03 1985 304 304 304 304 0 0 04 1986 120 120 120 120 0 0 05 1987 3 3 3 3 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 2 1 1 1 0 0 09 1991 XXX 6 2 2 0 -4 10 1992 XXX XXX 36 28 - -8 XXX 11 1993 XXX XXX XXX 8 XXX XXX 12 TOTAL - -8 -4 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 14,016 21,432 24,275 29,362 29,756 27,603 02 1984 70,588 83,887 87,356 91,948 91,442 91,177 03 1985 XXX 68,304 67,846 71,888 72,012 72,073 04 1986 XXX XXX 54,814 54,727 55,383 55,016 05 1987 XXX XXX XXX 83,852 87,722 88,023 06 1988 XXX XXX XXX XXX 110,344 108,534 07 1989 XXX XXX XXX XXX XXX 129,439 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX 12 TOTAL SCHEDULE P - PART 2B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR 27,433 27,523 27,500 27,747 247 224 02 1984 91,127 91,011 91,058 91,059 1 48 03 1985 72,196 72,344 72,213 72,920 707 576 04 1986 54,532 54,648 54,546 54,512 - -34 -136 05 1987 87,658 87,724 88,042 87,901 - -141 177 06 1988 110,588 110,806 110,622 110,487 - -135 -319 07 1989 123,399 125,356 124,035 123,699 - -336 -1,657 08 1990 170,948 164,705 167,405 168,013 608 3,308 09 1991 XXX 273,134 260,998 261,075 77 -12,059 10 1992 XXX XXX 330,177 314,900 - -15,277 XXX 11 1993 XXX XXX XXX 408,167 XXX XXX 12 TOTAL - -14,283 -9,838 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 1,505 1,734 1,805 1,862 1,892 1,962 02 1984 2,871 3,472 3,507 3,830 3,811 2,892 03 1985 XXX 2,855 2,790 3,019 3,023 1,894 04 1986 XXX XXX 1,782 1,953 1,899 1,146 05 1987 XXX XXX XXX 4,798 4,756 3,141 06 1988 XXX XXX XXX XXX 5,899 4,575 07 1989 XXX XXX XXX XXX XXX 5,395 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX 12 TOTAL SCHEDULE P - PART 2C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR 2,743 2,737 2,803 2,759 - -44 22 02 1984 2,912 2,835 2,838 2,815 - -23 -20 03 1985 1,923 1,793 1,792 1,792 0 -1 04 1986 1,070 1,379 1,101 1,093 - -8 -286 05 1987 3,249 3,000 2,978 2,970 - -8 -30 06 1988 4,968 4,846 4,726 4,749 23 -97 07 1989 5,408 5,529 5,527 5,763 236 234 08 1990 7,540 6,848 7,144 7,664 520 816 09 1991 XXX 7,084 7,639 7,763 124 679 10 1992 XXX XXX 7,696 7,041 - -655 XXX 11 1993 XXX XXX XXX 10,699 XXX XXX 12 TOTAL 165 1,317 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2D - WORKERS' COMPENSATION 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 62,094 46,310 40,660 36,844 39,151 41,252 02 1984 57,716 60,438 54,382 54,372 50,561 53,647 03 1985 XXX 69,310 80,175 80,250 75,611 78,612 04 1986 XXX XXX 104,600 111,647 108,666 111,982 05 1987 XXX XXX XXX 145,390 131,617 131,679 06 1988 XXX XXX XXX XXX 160,365 156,541 07 1989 XXX XXX XXX XXX XXX 172,326 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX 12 TOTAL SCHEDULE P - PART 2D - WORKERS' COMPENSATION 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR 41,764 40,908 40,904 41,653 749 745 02 1984 53,279 53,464 54,030 54,068 38 604 03 1985 77,518 79,339 80,023 80,232 209 893 04 1986 108,309 109,352 109,354 110,011 657 659 05 1987 120,814 119,364 120,494 120,159 - -335 795 06 1988 153,615 141,133 136,082 134,238 - -1,844 -6,895 07 1989 187,969 174,457 168,268 163,809 - -4,459 -10,648 08 1990 209,512 232,976 224,789 216,044 - -8,745 -16,932 09 1991 XXX 211,992 238,574 234,271 - -4,303 22,279 10 1992 XXX XXX 234,957 231,720 - -3,237 XXX 11 1993 XXX XXX XXX 257,841 XXX XXX 12 TOTAL - -21,270 -8,500 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2E - COMMERICAL MULTIPLE PERIL 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 673 909 1,141 885 943 997 02 1984 1 1 1 1 1 1 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX 12 TOTAL SCHEDULE P - PART 2E - COMMERICAL MULTIPLE PERIL 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR 1,054 1,070 1,206 1,061 - -145 -9 02 1984 1 1 1 1 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 XXX 11 1993 XXX XXX XXX 0 XXX XXX 12 TOTAL - -145 -9 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 13 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX 12 TOTAL SCHEDULE P - PART 2F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 XXX 11 1993 XXX XXX XXX 0 XXX XXX 12 TOTAL 0 0 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS MADE 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX 12 TOTAL SCHEDULE P - PART 2F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS MADE 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 XXX 11 1993 XXX XXX XXX 0 XXX XXX 12 TOTAL 0 0 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2G - SPECIAL LIABILITY 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 267 352 341 360 345 319 02 1984 81 67 69 73 72 63 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 33 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX 12 TOTAL SCHEDULE P - PART 2G - SPECIAL LIABILITY 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR 321 321 321 321 0 0 02 1984 64 64 64 64 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 32 32 32 32 0 0 08 1990 75 88 79 76 - -3 -12 09 1991 XXX 154 127 126 - -1 -28 10 1992 XXX XXX 400 320 0 XXX 11 1993 XXX XXX XXX 287 XXX XXX 12 TOTAL - -4 -40 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2H - SECTION 1 - OTHER LIABILITY - OCCURRENCE 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 1,948 3,388 3,882 3,931 4,890 5,130 02 1984 552 1,109 1,071 1,807 3,095 2,666 03 1985 XXX 874 837 931 811 1,071 04 1986 XXX XXX 3,472 3,139 3,079 2,289 05 1987 XXX XXX XXX 1,668 1,692 1,648 06 1988 XXX XXX XXX XXX 862 854 07 1989 XXX XXX XXX XXX XXX 408 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX 12 TOTAL SCHEDULE P - PART 2H - SECTION 1 - OTHER LIABILITY - OCCURRENCE 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR 5,140 5,409 6,448 8,242 1,794 2,833 02 1984 2,679 2,991 2,683 3,975 1,292 984 03 1985 1,134 1,134 1,134 1,134 0 0 04 1986 2,185 2,185 2,185 2,185 0 0 05 1987 1,548 1,548 1,548 1,548 0 0 06 1988 886 886 886 886 0 0 07 1989 406 406 406 406 0 0 08 1990 368 368 368 368 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 XXX 11 1993 XXX XXX XXX 0 XXX XXX 12 TOTAL 3,086 3,817 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2H - SECTION 2 - OTHER LIABILITY - CLAIMS MADE 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX 12 TOTAL SCHEDULE P - PART 2H - SECTION 2 - OTHER LIABILITY - CLAIMS MADE 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 XXX 11 1993 XXX XXX XXX 0 XXX XXX 12 TOTAL 0 0 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2I - SPECIAL PROPERTY 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR XXX XXX XXX XXX XXX XXX 02 1992 XXX XXX XXX XXX XXX XXX 03 1993 XXX XXX XXX XXX XXX XXX 04 TOTAL SCHEDULE P - PART 2I - SPECIAL PROPERTY 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR XXX 0 0 0 0 0 02 1992 XXX XXX 0 0 0 XXX 03 1993 XXX XXX XXX 0 XXX XXX 04 TOTAL 0 0 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2J - AUTO PHYSICAL DAMAGE 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR XXX XXX XXX XXX XXX XXX 02 1992 XXX XXX XXX XXX XXX XXX 03 1993 XXX XXX XXX XXX XXX XXX 04 TOTAL SCHEDULE P - PART 2J - AUTO PHYSICAL DAMAGE 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR XXX 15,957 7,171 6,605 - -566 -9,352 02 1992 XXX XXX 119,828 111,165 - -8,663 XXX 03 1993 XXX XXX XXX 165,885 XXX XXX 04 TOTAL - -9,229 -9,352 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAG 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR XXX XXX XXX XXX XXX XXX 02 1992 XXX XXX XXX XXX XXX XXX 03 1993 XXX XXX XXX XXX XXX XXX 04 TOTAL SCHEDULE P - PART 2K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAG 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR XXX 23 11 8 - -3 -15 02 1992 XXX XXX 9 1 - -8 XXX 03 1993 XXX XXX XXX 5 XXX XXX 04 TOTAL - -11 -15 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH) 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR XXX XXX XXX XXX XXX XXX 02 1992 XXX XXX XXX XXX XXX XXX 03 1993 XXX XXX XXX XXX XXX XXX 04 TOTAL SCHEDULE P - PART 2L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH) 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR XXX 0 0 0 0 0 02 1992 XXX XXX 0 0 0 XXX 03 1993 XXX XXX XXX 0 XXX XXX 04 TOTAL 0 0 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2M - INTERNATIONAL 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 180 229 233 249 302 340 02 1984 0 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX 12 TOTAL SCHEDULE P - PART 2M - INTERNATIONAL 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR 352 352 352 352 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 XXX 11 1993 XXX XXX XXX 0 XXX XXX 12 TOTAL 0 0 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2N - REINSURANCE A 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 1988 XXX XXX XXX XXX 0 0 02 1989 XXX XXX XXX XXX XXX 0 03 1990 XXX XXX XXX XXX XXX XXX 04 1991 XXX XXX XXX XXX XXX XXX 05 1992 XXX XXX XXX XXX XXX XXX 06 1993 XXX XXX XXX XXX XXX XXX 07 TOTAL SCHEDULE P - PART 2N - REINSURANCE A 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 1988 0 0 0 0 0 0 02 1989 0 0 0 0 0 0 03 1990 0 0 0 0 0 0 04 1991 XXX 0 0 0 0 0 05 1992 XXX XXX 8,744 8,794 0 XXX 06 1993 XXX XXX XXX 9,147 XXX XXX 07 TOTAL 0 0 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2O - REINSURANCE B 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 1988 XXX XXX XXX XXX 0 0 02 1989 XXX XXX XXX XXX XXX 0 03 1990 XXX XXX XXX XXX XXX XXX 04 1991 XXX XXX XXX XXX XXX XXX 05 1992 XXX XXX XXX XXX XXX XXX 06 1993 XXX XXX XXX XXX XXX XXX 07 TOTAL SCHEDULE P - PART 2O - REINSURANCE B 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 1988 0 0 0 0 0 0 02 1989 0 0 0 0 0 0 03 1990 851 851 928 953 0 102 04 1991 XXX 1,734 1,747 1,794 0 60 05 1992 XXX XXX 1,305 1,348 0 XXX 06 1993 XXX XXX XXX 1,437 XXX XXX 07 TOTAL 0 162 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2P - REINSURANCE C 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 1988 XXX XXX XXX XXX 0 0 02 1989 XXX XXX XXX XXX XXX 0 03 1990 XXX XXX XXX XXX XXX XXX 04 1991 XXX XXX XXX XXX XXX XXX 05 1992 XXX XXX XXX XXX XXX XXX 06 1993 XXX XXX XXX XXX XXX XXX 07 TOTAL SCHEDULE P - PART 2P - REINSURANCE C 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 1988 0 0 0 0 0 0 02 1989 0 0 0 0 0 0 03 1990 0 0 0 0 0 0 04 1991 XXX 0 0 0 0 0 05 1992 XXX XXX 0 0 0 XXX 06 1993 XXX XXX XXX 0 XXX XXX 07 TOTAL 0 0 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2Q - REINSURANCE D 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 41 55 53 121 124 151 02 1984 0 0 0 0 0 0 03 1985 XXX 105 105 120 174 213 04 1986 XXX XXX 189 179 263 282 05 1987 XXX XXX XXX 0 0 0 06 TOTAL SCHEDULE P - PART 2Q - REINSURANCE D 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR 162 162 162 162 0 0 02 1984 0 0 0 0 0 0 03 1985 216 216 216 216 0 0 04 1986 293 293 293 293 0 0 05 1987 6 6 6 6 0 0 06 TOTAL 0 0 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 280 397 443 558 627 823 02 1984 12 12 1 5 56 138 03 1985 XXX 150 139 112 157 330 04 1986 XXX XXX 811 834 858 799 05 1987 XXX XXX XXX 440 421 423 06 1988 XXX XXX XXX XXX 253 268 07 1989 XXX XXX XXX XXX XXX 145 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX 12 TOTAL SCHEDULE P - PART 2R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR 919 919 919 919 0 0 02 1984 113 113 113 113 0 0 03 1985 362 362 362 362 0 0 04 1986 713 713 713 713 0 0 05 1987 427 427 427 427 0 0 06 1988 269 269 269 269 0 0 07 1989 168 168 168 168 0 0 08 1990 86 86 86 86 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 XXX 11 1993 XXX XXX XXX 0 XXX XXX 12 TOTAL 0 0 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 2R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS MADE 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX 12 TOTAL SCHEDULE P - PART 2R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS MADE 1 INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 ONE YEAR TWO YEAR LOSSES WERE DEVELOPMENT DEVELOPMENT INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 XXX 11 1993 XXX XXX XXX 0 XXX XXX 12 TOTAL 0 0 *REPORT RESERVES ONLY. SUBSEQUENT DEVELOPMENT RELATES ONLY TO SUBSEQUENT PAYMENTS AND RESERVES. **CURRENT YEAR LESS FIRST OR SECOND PRIOR YEAR, SHOWING (REDUNDANT) OR ADVERSE. SCHEDULE P - PART 3A - HOMEOWNERS/FARMOWNERS 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 123 126 130 130 130 130 03 1985 XXX 150 271 304 304 304 04 1986 XXX XXX 113 119 119 119 05 1987 XXX XXX XXX 3 3 3 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3A - HOMEOWNERS/FARMOWNERS 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR -3 -3 -3 -3 0 0 02 1984 131 131 131 131 21 9 03 1985 304 304 304 304 57 19 04 1986 120 120 120 120 21 16 05 1987 3 3 3 3 2 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 1 1 1 1 0 09 1991 XXX 1 1 1 1 0 10 1992 XXX XXX 27 27 1 0 11 1993 XXX XXX XXX 2 1 0 NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 14,721 21,665 25,049 26,729 27,127 02 1984 37,323 69,362 80,969 86,585 89,004 90,768 03 1985 XXX 32,418 55,242 64,517 68,759 71,055 04 1986 XXX XXX 24,042 41,537 49,775 52,715 05 1987 XXX XXX XXX 39,731 69,965 79,722 06 1988 XXX XXX XXX XXX 50,453 85,918 07 1989 XXX XXX XXX XXX XXX 56,777 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR 26,864 26,956 27,268 27,439 45 0 02 1984 90,841 90,928 91,004 91,034 39,732 10,153 03 1985 71,572 71,897 72,438 72,387 30,514 10,890 04 1986 53,523 53,989 54,198 54,318 33,929 14,978 05 1987 83,527 86,126 87,110 87,508 35,995 15,298 06 1988 99,310 106,834 109,758 109,985 45,285 18,090 07 1989 94,788 114,903 123,062 122,753 56,878 23,358 08 1990 45,255 121,756 150,292 165,153 73,297 31,220 09 1991 XXX 117,608 211,621 243,065 94,106 43,972 10 1992 XXX XXX 138,609 252,973 105,725 51,544 11 1993 XXX XXX XXX 177,716 91,522 51,959 NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 272 398 455 479 2,692 02 1984 1,378 2,723 3,185 3,491 3,639 2,840 03 1985 XXX 1,363 2,201 2,550 2,764 1,832 04 1986 XXX XXX 565 1,118 1,400 857 05 1987 XXX XXX XXX 1,528 3,028 2,294 06 1988 XXX XXX XXX XXX 1,834 2,092 07 1989 XXX XXX XXX XXX XXX 1,052 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR 2,706 2,707 2,720 2,758 0 0 02 1984 2,871 2,815 2,815 2,815 436 45 03 1985 1,867 1,771 1,792 1,792 839 84 04 1986 971 1,229 1,039 1,093 299 31 05 1987 2,742 2,947 2,949 2,970 631 68 06 1988 3,247 4,391 4,573 4,648 800 101 07 1989 2,763 4,575 5,168 5,345 953 142 08 1990 1,975 3,374 5,457 6,332 1,098 328 09 1991 XXX 1,692 3,900 5,909 1,201 550 10 1992 XXX XXX 1,986 3,280 1,233 528 11 1993 XXX XXX XXX 2,033 900 373 NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3D - WORKERS' COMPENSATION 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 -51,507 22,235 27,474 31,179 33,203 02 1984 13,161 -11,621 38,697 44,952 48,590 50,907 03 1985 XXX 14,574 38,720 54,836 65,326 71,907 04 1986 XXX XXX 22,442 49,581 72,810 89,028 05 1987 XXX XXX XXX 23,579 55,383 81,025 06 1988 XXX XXX XXX XXX 23,996 57,813 07 1989 XXX XXX XXX XXX XXX 29,877 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3D - WORKERS' COMPENSATION 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR 35,082 37,004 38,308 39,084 17,217 1,382 02 1984 52,333 52,847 53,244 53,604 20,037 1,616 03 1985 75,370 77,428 79,010 79,729 24,553 2,166 04 1986 97,446 103,399 106,196 107,990 29,977 2,708 05 1987 99,029 109,070 114,895 118,388 31,921 2,913 06 1988 86,412 106,183 116,766 123,065 31,045 2,712 07 1989 74,974 112,077 133,238 143,753 33,789 3,037 08 1990 43,713 109,469 153,929 179,579 36,599 4,311 09 1991 XXX 49,706 116,989 162,166 32,487 3,576 10 1992 XXX XXX 47,277 107,203 30,993 3,259 11 1993 XXX XXX XXX 51,319 23,421 2,317 NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3E - COMMERICAL MULTIPLE PERIL 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 321 511 608 682 743 02 1984 1 1 1 1 1 1 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3E - COMMERICAL MULTIPLE PERIL 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR 801 904 976 1,069 0 0 02 1984 1 1 1 1 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 0 11 1993 XXX XXX XXX 0 0 0 NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 0 11 1993 XXX XXX XXX 0 0 0 NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS MADE 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS MADE 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 0 11 1993 XXX XXX XXX 0 0 0 NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3G - SPECIAL LIABILITY 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 185 231 277 287 289 02 1984 17 28 37 43 46 47 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 22 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3G - SPECIAL LIABILITY 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR 321 321 321 321 XXX XXX 02 1984 64 64 64 64 XXX XXX 03 1985 0 0 0 0 XXX XXX 04 1986 0 0 0 0 XXX XXX 05 1987 0 0 0 0 XXX XXX 06 1988 0 0 0 0 XXX XXX 07 1989 32 32 32 32 XXX XXX 08 1990 59 76 79 79 XXX XXX 09 1991 XXX 115 126 126 XXX XXX 10 1992 XXX XXX 189 315 XXX XXX 11 1993 XXX XXX XXX 189 XXX XXX NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3H - SECTION 1 - OTHER LIABILITY - OCCURRENCE 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 665 1,004 1,696 2,412 2,802 02 1984 395 851 952 1,043 1,283 1,364 03 1985 XXX 20 60 122 394 478 04 1986 XXX XXX 0 79 169 238 05 1987 XXX XXX XXX 0 0 120 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3H - SECTION 1 - OTHER LIABILITY - OCCURRENCE 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR 3,564 3,702 3,719 3,904 35 15 02 1984 1,520 1,539 1,554 1,558 120 0 03 1985 1,134 1,134 1,134 1,134 52 0 04 1986 2,185 2,185 2,185 2,185 0 0 05 1987 1,548 1,548 1,548 1,548 0 0 06 1988 886 886 886 886 0 0 07 1989 406 406 406 406 0 1 08 1990 368 368 368 368 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 0 11 1993 XXX XXX XXX 0 0 0 NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3H - SECTION 2 - OTHER LIABILITY - CLAIMS MADE 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3H - SECTION 2 - OTHER LIABILITY - CLAIMS MADE 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 0 11 1993 XXX XXX XXX 0 0 0 NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3I - SPECIAL PROPERTY 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR XXX XXX XXX XXX XXX XXX 02 1992 XXX XXX XXX XXX XXX XXX 03 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3I - SPECIAL PROPERTY 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR XXX 0 0 0 XXX XXX 02 1992 XXX XXX 0 0 XXX XXX 03 1993 XXX XXX XXX 0 XXX XXX NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3J - AUTO PHYSICAL DAMAGE 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR XXX XXX XXX XXX XXX XXX 02 1992 XXX XXX XXX XXX XXX XXX 03 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3J - AUTO PHYSICAL DAMAGE 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR XXX 0 5,817 6,525 173,623 60,092 02 1992 XXX XXX 100,536 109,266 65,965 27,614 03 1993 XXX XXX XXX 136,250 73,992 30,147 NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAG 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR XXX XXX XXX XXX XXX XXX 02 1992 XXX XXX XXX XXX XXX XXX 03 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAG 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR XXX 0 11 8 XXX XXX 02 1992 XXX XXX 1 1 XXX XXX 03 1993 XXX XXX XXX 0 XXX XXX NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH) 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR XXX XXX XXX XXX XXX XXX 02 1992 XXX XXX XXX XXX XXX XXX 03 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH) 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR XXX 0 0 0 XXX XXX 02 1992 XXX XXX 0 0 XXX XXX 03 1993 XXX XXX XXX 0 XXX XXX NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3M - INTERNATIONAL 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 62 80 87 126 168 02 1984 0 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3M - INTERNATIONAL 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR 352 352 352 352 XXX XXX 02 1984 0 0 0 0 XXX XXX 03 1985 0 0 0 0 XXX XXX 04 1986 0 0 0 0 XXX XXX 05 1987 0 0 0 0 XXX XXX 06 1988 0 0 0 0 XXX XXX 07 1989 0 0 0 0 XXX XXX 08 1990 0 0 0 0 XXX XXX 09 1991 XXX 0 0 0 XXX XXX 10 1992 XXX XXX 0 0 XXX XXX 11 1993 XXX XXX XXX 0 XXX XXX NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3N - REINSURANCE A 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 1988 XXX XXX XXX XXX 0 0 02 1989 XXX XXX XXX XXX XXX 0 03 1990 XXX XXX XXX XXX XXX XXX 04 1991 XXX XXX XXX XXX XXX XXX 05 1992 XXX XXX XXX XXX XXX XXX 06 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3N - REINSURANCE A 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 1988 0 0 0 0 XXX XXX 02 1989 0 0 0 0 XXX XXX 03 1990 0 0 0 0 XXX XXX 04 1991 XXX 0 0 0 XXX XXX 05 1992 XXX XXX 0 8,659 XXX XXX 06 1993 XXX XXX XXX 7,665 XXX XXX NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3O - REINSURANCE B 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 1988 XXX XXX XXX XXX 0 0 02 1989 XXX XXX XXX XXX XXX 0 03 1990 XXX XXX XXX XXX XXX XXX 04 1991 XXX XXX XXX XXX XXX XXX 05 1992 XXX XXX XXX XXX XXX XXX 06 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3O - REINSURANCE B 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 1988 0 0 0 0 XXX XXX 02 1989 0 0 0 0 XXX XXX 03 1990 0 0 0 953 XXX XXX 04 1991 XXX 0 0 1,794 XXX XXX 05 1992 XXX XXX 0 1,348 XXX XXX 06 1993 XXX XXX XXX 1,437 XXX XXX NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3P - REINSURANCE C 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 1988 XXX XXX XXX XXX 0 0 02 1989 XXX XXX XXX XXX XXX 0 03 1990 XXX XXX XXX XXX XXX XXX 04 1991 XXX XXX XXX XXX XXX XXX 05 1992 XXX XXX XXX XXX XXX XXX 06 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3P - REINSURANCE C 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 1988 0 0 0 0 XXX XXX 02 1989 0 0 0 0 XXX XXX 03 1990 0 0 0 0 XXX XXX 04 1991 XXX 0 0 0 XXX XXX 05 1992 XXX XXX 0 0 XXX XXX 06 1993 XXX XXX XXX 0 XXX XXX NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3Q - REINSURANCE D 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 8 13 18 19 31 02 1984 0 0 0 0 0 0 03 1985 XXX 0 19 46 62 81 04 1986 XXX XXX 0 29 44 63 05 1987 XXX XXX XXX 0 0 0 SCHEDULE P - PART 3Q - REINSURANCE D 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR 162 162 162 162 XXX XXX 02 1984 0 0 0 0 XXX XXX 03 1985 216 216 216 216 XXX XXX 04 1986 293 293 293 293 XXX XXX 05 1987 6 6 6 6 XXX XXX NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 178 252 342 425 504 02 1984 0 0 -3 -1 0 1 03 1985 XXX 0 -23 9 20 29 04 1986 XXX XXX 0 0 9 69 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 2 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR 919 919 919 919 0 0 02 1984 113 113 113 113 0 0 03 1985 362 362 362 362 0 0 04 1986 713 713 713 713 0 0 05 1987 427 427 427 427 0 0 06 1988 269 269 269 269 0 0 07 1989 168 168 168 168 0 0 08 1990 86 86 86 86 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 0 11 1993 XXX XXX XXX 0 0 0 NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 3R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS MADE 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 3R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS MADE 1 CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 12 13 IN WHICH 1990 1991 1992 1993 NUMBER OF NUMBER OF LOSSES WERE CLMS CLOSED CLMS CLOSED INCURRED WITH LOSS WITHOUT LOSS PAYMENT PAYMENT 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 0 0 0 0 0 0 04 1986 0 0 0 0 0 0 05 1987 0 0 0 0 0 0 06 1988 0 0 0 0 0 0 07 1989 0 0 0 0 0 0 08 1990 0 0 0 0 0 0 09 1991 XXX 0 0 0 0 0 10 1992 XXX XXX 0 0 0 0 11 1993 XXX XXX XXX 0 0 0 NOTE: NET OF SALVAGE AND SUBROGATION RECEIVED. SCHEDULE P - PART 4A - HOMEOWNERS/FARMOWNERS 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 21 0 0 0 0 0 03 1985 XXX 59 0 0 0 0 04 1986 XXX XXX 63 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4A - HOMEOWNERS/FARMOWNERS 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 02 1984 0 0 0 0 03 1985 0 0 0 0 04 1986 0 0 0 0 05 1987 0 0 0 0 06 1988 0 0 0 0 07 1989 0 0 0 0 08 1990 0 0 0 0 09 1991 XXX 5 1 1 10 1992 XXX XXX 9 1 11 1993 XXX XXX XXX 6 SCHEDULE P - PART 4B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 235 1,243 115 2,365 2,497 54 02 1984 7,722 3,867 730 2,694 1,052 29 03 1985 XXX 10,082 1,386 2,545 1,083 35 04 1986 XXX XXX 7,855 1,665 1,060 263 05 1987 XXX XXX XXX 12,485 4,147 1,847 06 1988 XXX XXX XXX XXX 20,331 3,309 07 1989 XXX XXX XXX XXX XXX 24,960 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 14 8 4 5 02 1984 14 7 3 4 03 1985 24 3 6 76 04 1986 35 14 3 0 05 1987 384 45 35 10 06 1988 1,349 544 127 19 07 1989 3,310 1,364 533 132 08 1990 41,254 7,072 1,712 408 09 1991 XXX 46,323 10,056 2,202 10 1992 XXX XXX 59,410 14,930 11 1993 XXX XXX XXX 71,504 SCHEDULE P - PART 4C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 3 23 4 64 71 7 02 1984 1,365 100 22 84 33 15 03 1985 XXX 542 140 256 116 26 04 1986 XXX XXX 424 263 188 134 05 1987 XXX XXX XXX 776 486 306 06 1988 XXX XXX XXX XXX 711 699 07 1989 XXX XXX XXX XXX XXX 1,664 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 2 2 6 0 02 1984 20 0 0 0 03 1985 42 0 0 0 04 1986 32 52 15 0 05 1987 318 17 4 0 06 1988 464 113 35 16 07 1989 837 414 109 74 08 1990 2,222 1,083 537 275 09 1991 XXX 1,861 1,344 534 10 1992 XXX XXX 2,381 1,522 11 1993 XXX XXX XXX 3,626 SCHEDULE P - PART 4D - WORKERS' COMPENSATION 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 17,823 9,230 2,085 1,805 628 739 02 1984 11,781 8,483 2,108 1,616 941 1,031 03 1985 XXX 11,243 5,058 4,561 2,186 1,897 04 1986 XXX XXX 12,033 10,362 5,668 5,262 05 1987 XXX XXX XXX 29,130 9,394 8,735 06 1988 XXX XXX XXX XXX 37,532 16,490 07 1989 XXX XXX XXX XXX XXX 37,036 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4D - WORKERS' COMPENSATION 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 929 639 291 699 02 1984 637 300 131 60 03 1985 1,128 757 440 83 04 1986 2,947 1,580 818 336 05 1987 6,276 2,508 1,728 470 06 1988 13,231 6,679 3,653 1,668 07 1989 21,197 11,753 7,114 3,164 08 1990 34,825 20,600 12,258 5,833 09 1991 XXX 31,028 17,469 10,819 10 1992 XXX XXX 44,120 34,386 11 1993 XXX XXX XXX 62,287 SCHEDULE P - PART 4E - COMMERICAL MULTIPLE PERIL 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4E - COMMERICAL MULTIPLE PERIL 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 02 1984 0 0 0 0 03 1985 0 0 0 0 04 1986 0 0 0 0 05 1987 0 0 0 0 06 1988 0 0 0 0 07 1989 0 0 0 0 08 1990 0 0 0 0 09 1991 XXX 0 0 0 10 1992 XXX XXX 0 0 11 1993 XXX XXX XXX 0 SCHEDULE P - PART 4F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 13 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 02 1984 0 0 0 0 03 1985 0 0 0 0 04 1986 0 0 0 0 05 1987 0 0 0 0 06 1988 0 0 0 0 07 1989 0 0 0 0 08 1990 0 0 0 0 09 1991 XXX 0 0 0 10 1992 XXX XXX 0 0 11 1993 XXX XXX XXX 0 SCHEDULE P - PART 4F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS MADE 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS MADE 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 02 1984 0 0 0 0 03 1985 0 0 0 0 04 1986 0 0 0 0 05 1987 0 0 0 0 06 1988 0 0 0 0 07 1989 0 0 0 0 08 1990 0 0 0 0 09 1991 XXX 0 0 0 10 1992 XXX XXX 0 0 11 1993 XXX XXX XXX 0 SCHEDULE P - PART 4G - SPECIAL LIABILITY 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 15 53 31 25 47 20 02 1984 28 10 16 11 15 5 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4G - SPECIAL LIABILITY 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 02 1984 0 0 0 0 03 1985 0 0 0 0 04 1986 0 0 0 0 05 1987 0 0 0 0 06 1988 0 0 0 0 07 1989 0 0 0 0 08 1990 2 2 0 0 09 1991 XXX 21 1 0 10 1992 XXX XXX 57 5 11 1993 XXX XXX XXX 54 SCHEDULE P - PART 4H - SECTION 1 - OTHER LIABILITY - OCCURRENCE 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 401 438 310 274 584 1,024 02 1984 98 108 51 562 1,023 943 03 1985 XXX 651 444 392 239 496 04 1986 XXX XXX 3,294 2,796 2,650 1,782 05 1987 XXX XXX XXX 1,621 1,446 1,350 06 1988 XXX XXX XXX XXX 861 854 07 1989 XXX XXX XXX XXX XXX 408 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4H - SECTION 1 - OTHER LIABILITY - OCCURRENCE 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 535 842 1,801 2,503 02 1984 906 1,323 1,051 1,270 03 1985 0 0 0 0 04 1986 0 0 0 0 05 1987 0 0 0 0 06 1988 0 0 0 0 07 1989 0 0 0 0 08 1990 0 0 0 0 09 1991 XXX 0 0 0 10 1992 XXX XXX 0 0 11 1993 XXX XXX XXX 0 SCHEDULE P - PART 4H - SECTION 2 - OTHER LIABILITY - CLAIMS MADE 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4H - SECTION 2 - OTHER LIABILITY - CLAIMS MADE 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 02 1984 0 0 0 0 03 1985 0 0 0 0 04 1986 0 0 0 0 05 1987 0 0 0 0 06 1988 0 0 0 0 07 1989 0 0 0 0 08 1990 0 0 0 0 09 1991 XXX 0 0 0 10 1992 XXX XXX 0 0 11 1993 XXX XXX XXX 0 SCHEDULE P - PART 4I - SPECIAL PROPERTY 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR XXX XXX XXX XXX XXX XXX 02 1992 XXX XXX XXX XXX XXX XXX 03 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4I - SPECIAL PROPERTY 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR XXX 0 0 0 02 1992 XXX XXX 0 0 03 1993 XXX XXX XXX 0 SCHEDULE P - PART 4J - AUTO PHYSICAL DAMAGE 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR XXX XXX XXX XXX XXX XXX 02 1992 XXX XXX XXX XXX XXX XXX 03 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4J - AUTO PHYSICAL DAMAGE 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR XXX 8,104 588 302 02 1992 XXX XXX 8,704 2,001 03 1993 XXX XXX XXX 12,988 SCHEDULE P - PART 4K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAG 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR XXX XXX XXX XXX XXX XXX 02 1992 XXX XXX XXX XXX XXX XXX 03 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4K - FIDELITY, SURETY, FINANCIAL GUARANTY, MORTGAG 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR XXX 7 0 0 02 1992 XXX XXX 8 0 03 1993 XXX XXX XXX 5 SCHEDULE P - PART 4L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH) 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR XXX XXX XXX XXX XXX XXX 02 1992 XXX XXX XXX XXX XXX XXX 03 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH) 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR XXX 0 0 0 02 1992 XXX XXX 0 0 03 1993 XXX XXX XXX 0 SCHEDULE P - PART 4M - INTERNATIONAL 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 9 35 14 3 3 3 02 1984 0 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4M - INTERNATIONAL 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 02 1984 0 0 0 0 03 1985 0 0 0 0 04 1986 0 0 0 0 05 1987 0 0 0 0 06 1988 0 0 0 0 07 1989 0 0 0 0 08 1990 0 0 0 0 09 1991 XXX 0 0 0 10 1992 XXX XXX 0 0 11 1993 XXX XXX XXX 0 SCHEDULE P - PART 4N - REINSURANCE A 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 1988 XXX XXX XXX XXX 0 0 02 1989 XXX XXX XXX XXX XXX 0 03 1990 XXX XXX XXX XXX XXX XXX 04 1991 XXX XXX XXX XXX XXX XXX 05 1992 XXX XXX XXX XXX XXX XXX 06 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4N - REINSURANCE A 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 1988 0 0 0 0 02 1989 0 0 0 0 03 1990 851 851 928 0 04 1991 XXX 1,447 1,460 0 05 1992 XXX XXX 3,501 135 06 1993 XXX XXX XXX 1,482 SCHEDULE P - PART 4O - REINSURANCE B 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 1988 XXX XXX XXX XXX 0 0 02 1989 XXX XXX XXX XXX XXX 0 03 1990 XXX XXX XXX XXX XXX XXX 04 1991 XXX XXX XXX XXX XXX XXX 05 1992 XXX XXX XXX XXX XXX XXX 06 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4O - REINSURANCE B 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 1988 0 0 0 0 02 1989 0 0 0 0 03 1990 0 0 0 0 04 1991 XXX 0 0 0 05 1992 XXX XXX 0 0 06 1993 XXX XXX XXX 0 SCHEDULE P - PART 4P - REINSURANCE C 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 1988 XXX XXX XXX XXX 0 0 02 1989 XXX XXX XXX XXX XXX 0 03 1990 XXX XXX XXX XXX XXX XXX 04 1991 XXX XXX XXX XXX XXX XXX 05 1992 XXX XXX XXX XXX XXX XXX 06 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4P - REINSURANCE C 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 1988 0 0 0 0 02 1989 0 0 0 0 03 1990 0 0 0 0 04 1991 XXX 0 0 0 05 1992 XXX XXX 0 0 06 1993 XXX XXX XXX 0 SCHEDULE P - PART 4Q - REINSURANCE D 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 6 7 6 25 25 27 02 1984 0 0 0 0 0 0 03 1985 XXX 86 15 0 0 0 04 1986 XXX XXX 150 93 99 96 05 1987 XXX XXX XXX 0 0 0 SCHEDULE P - PART 4Q - REINSURANCE D 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 02 1984 0 0 0 0 03 1985 0 0 0 0 04 1986 0 0 0 0 05 1987 0 0 0 0 SCHEDULE P - PART 4R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 91 99 16 21 44 141 02 1984 12 12 0 3 8 40 03 1985 XXX 149 107 89 69 153 04 1986 XXX XXX 807 756 765 519 05 1987 XXX XXX XXX 439 417 398 06 1988 XXX XXX XXX XXX 248 257 07 1989 XXX XXX XXX XXX XXX 120 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 02 1984 0 0 0 0 03 1985 0 0 0 0 04 1986 0 0 0 0 05 1987 0 0 0 0 06 1988 0 0 0 0 07 1989 0 0 0 0 08 1990 0 0 0 0 09 1991 XXX 0 0 0 10 1992 XXX XXX 0 0 11 1993 XXX XXX XXX 0 SCHEDULE P - PART 4R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS MADE 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 2 3 4 5 6 7 IN WHICH 1984 1985 1986 1987 1988 1989 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 0 0 02 1984 0 0 0 0 0 0 03 1985 XXX 0 0 0 0 0 04 1986 XXX XXX 0 0 0 0 05 1987 XXX XXX XXX 0 0 0 06 1988 XXX XXX XXX XXX 0 0 07 1989 XXX XXX XXX XXX XXX 0 08 1990 XXX XXX XXX XXX XXX XXX 09 1991 XXX XXX XXX XXX XXX XXX 10 1992 XXX XXX XXX XXX XXX XXX 11 1993 XXX XXX XXX XXX XXX XXX SCHEDULE P - PART 4R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS MADE 1 BULK & INCURRED BUT NOT REPORTED RESERVES ON LOSSES & ALLOCATED EXPENSES AT YEAR END (000 OMITTED) YEARS 8 9 10 11 IN WHICH 1990 1991 1992 1993 LOSSES WERE INCURRED 01 PRIOR 0 0 0 0 02 1984 0 0 0 0 03 1985 0 0 0 0 04 1986 0 0 0 0 05 1987 0 0 0 0 06 1988 0 0 0 0 07 1989 0 0 0 0 08 1990 0 0 0 0 09 1991 XXX 0 0 0 10 1992 XXX XXX 0 0 11 1993 XXX XXX XXX 0 SCHEDULE P INTERROGATORIES 1. COMPUTATION OF EXCESS STATUTORY RESERVES OVER STATEMENT RESERVES. (A) AUTO LIABILITY (PRIVATE PASSENGER AND COMMERCIAL) 1993 0 60.000% 1992 0 60.000% 1991 0 60.000% TOTAL 0 (B) OTHER LIABILITY AND PRODUCTS LIABILITY 1993 0 .000% 1992 0 .000% 1991 0 .000% TOTAL 0 (C) MEDICAL MALPRACTICE 1993 0 .000% 1992 0 .000% 1991 0 .000% TOTAL 0 (D) WORKERS' COMPENSATION 1993 0 .000% 1992 0 .000% 1991 0 .000% TOTAL 0 (E) CREDIT TOTAL 0 (F) ALL LINES TOTAL TOTAL 0 2. WHAT IS THE EXTENDED LOSS AND EXPENSE RESERVE - DIRECT AND ASSUMED? YEARS IN WHICH 1 2 3 PREMIUMS WERE MEDICAL OTHER PRODUCTS EARNED AND MALPRACTICE LIABILITY LIABILITY LOSSES INCURRED (A) 1987 0 0 0 (B) 1988 0 0 0 (C) 1989 0 0 0 (D) 1990 0 0 0 (E) 1991 0 0 0 (F) 1992 0 0 0 (G) 1993 0 0 0 (H) TOTALS 0 0 0 3. THE TERM "LOSS EXPENSE" INCLUDES ALL PAYMENTS FOR LEGAL EXPENSES, INCLUDING ATTORNEY'S AND WITNESS FEES AND COURT COSTS, SALARIES AND EXPENSES OF INVESTIGATORS, ADJUSTORS AND FIELD MEN, RENTS, STATIONERY, TELEGRAPH AND TELEPHONE CHARGES, POSTAGE, SALARIES AND EXPENSES OF OFFICE EMPLOYEES, HOME OFFICE EXPENSES AND ALL OTHER PAYMENTS UNDER OR ON ACCOUNT OF SUCH INJURIES, WHETHER THE PAYMENTS ARE ALLOCATED TO SPECIFIC CLAIMS OR ARE UNALLOCATED. ARE THEY SO REPORTED IN THIS STATEMENT? ANSWER: YES (X) NO ( ) 4. THE UNALLOCATED LOSS EXPENSE PAYMENTS PAID DURING THE MOST RECENT CALENDAR YEAR SHOULD BE DISTRIBUTED TO THE VARIOUS YEARS IN WHICH LOSSES WERE INCURRED AS FOLLOWS: (1) 45% TO THE MOST RECENT YEAR, (2) 5% TO THE NEXT MOST RECENT YEAR, AND (3) THE BALANCE TO ALL YEARS, INCLUDING THE MOST RECENT, IN PROPORTION TO THE AMOUNT OF LOSS PAYMENTS PAID FOR EACH YEAR DURING THE MOST RECENT CALENDAR YEAR. IF THE DISTRIBUTION IN (1) OR (2) PRODUCES AN ACCUMULATED DISTRIBUTION TO SUCH YEAR IN EXCESS OF 10% OF THE PREMIUMS EARNED FOR SUCH YEAR, DISREGARDING ALL DISTRIBUTIONS MADE UNDER (3), SUCH ACCUMULATED DISTRIBUTION SHOULD BE LIMITED TO 10% OF PREMIUMS EARNED AND THE BALANCE DISTRIBUTED IN ACCORDANCE WITH (3). ARE THEY SO REPORTED IN THIS STATEMENT? ANSWER: YES (X) NO ( ) 5. DO ANY LINES IN SCHEDULE P INCLUDE RESERVES WHICH ARE REPORTED GROSS OF ANY DISCOUNT TO PRESENT VALUE OF FUTURE PAYMENTS, BUT ARE REPORTED NET OF SUCH DISCOUNTS ON PAGE 10? YES ( ) NO (X) IF YES, PROPER REPORTING MUST BE MADE IN THE NOTES TO FINANCIAL STATEMENTS, AS SPECIFIED IN THE INSTRUCTIONS. ALSO, THE DISCOUNTS MUST BE REPORTED IN SCHEDULE P - PART 1, COLUMNS 31 AND 32. SCHEDULE P MUST BE COMPLETED GROSS OF NON-TABULAR DISCOUNTING. WORK PAPERS RELATING TO DISCOUNT CALCULATIONS MUST BE AVAILABLE FOR EXAMINATION UPON REQUEST. DISCOUNTING IS ALLOWED ONLY IF EXPRESSLY PERMITTED BY THE STATE INSURANCE DEPARTMENT TO WHICH THIS ANNUAL STATEMENT IS BEING FILED. 6. WHAT WERE THE NET PREMIUMS IN FORCE AT THE END OF THE YEAR FOR: (IN THOUSANDS OF DOLLARS) (A) FIDELITY 0 (B) SURETY 2 7. CLAIM COUNT INFORMATION IS REPORTED (CHECK ONE). (A) PER CLAIM X IF NOT THE SAME IN ALL YEARS, EXPLAIN IN QUESTION 8. (B) PER CLAIMANT X 8. THE INFORMATION PROVIDED IN SCHEDULE P WILL BE USED BY MANY PERSONS TO ESTIMATE THE ADEQUACY OF THE CURRENT LOSS AND EXPENSE RESERVES, AMONG OTHER THINGS. ARE THERE ANY ESPECIALLY SIGNIFICANT EVENTS, COVERAGE, RETENTION OR ACCOUNTING CHANGES WHICH HAVE OCCURRED WHICH MUST BE CONSIDERED WHEN MAKING SUCH ANALYSES (AN EXTENDED STATEMEMT MAY BE ATTACHED). Not applicable -----END PRIVACY-ENHANCED MESSAGE-----