-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LhLXLyc7SZh0rF4HbMxdHPnu4yBRMerW83+tnz95DH9lomKTHm9EDUu6d2Xeyg+L kYopjnjaZLzXyxS1qsfpRA== 0000950129-02-003326.txt : 20020627 0000950129-02-003326.hdr.sgml : 20020627 20020627162748 ACCESSION NUMBER: 0000950129-02-003326 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020627 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HCC INSURANCE HOLDINGS INC/DE/ CENTRAL INDEX KEY: 0000888919 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 760336636 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13790 FILM NUMBER: 02689450 BUSINESS ADDRESS: STREET 1: 13403 NORTHWEST FRWY CITY: HOUSTON STATE: TX ZIP: 77040-6094 BUSINESS PHONE: 7136907300 11-K 1 h97994e11vk.txt HCC INSURANCE HOLDINGS, INC. - DECEMBER 31, 2001 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K (Mark one) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO . COMMISSION FILE NUMBER 0-20766 HCC INSURANCE HOLDINGS 401(k) PLAN HCC INSURANCE HOLDINGS, INC. (Name of Issuer of the securities held pursuant to the Plan) 13403 NORTHWEST FREEWAY HOUSTON, TEXAS 77040 (Address of principal executive office) (713) 690-7300 (Registrant's telephone number, including area code) ---------------------------- REQUIRED INFORMATION 1. Audited Statement of Net Assets Available for Benefits (with Fund Information) as of December 31, 2001 and 2000. Incorporated by reference to the HCC Insurance Holdings 401(k) Plan Financial Statements and Supplemental Schedules attached hereto as Exhibit 99.1. 2. Notes to Financial Statements (with Fund Information). Incorporated by reference to the HCC Insurance Holdings 401(k) Plan Financial Statements and Supplemental Schedules attached hereto as Exhibit 99.1. 3. Schedule I - Schedule of Assets Held for Investment purposes (with Fund Information) as of December 31, 2001. Incorporated by reference to the HCC Insurance Holdings 401(k) Plan Financial Statements and Supplemental Schedules attached hereto as Exhibit 99.1. 4. Schedule II - Schedule of Nonexempt Transactions for year ended December 31, 2001. Incorporated by reference to the HCC Insurance Holdings 401(k) Plan Financial Statements and Supplemental Schedules attached hereto as Exhibit 99.1. EXHIBITS
Exhibit Description ------- ----------- 23.1 Consent of PricewaterhouseCoopers LLP 99.1 HCC Insurance Holdings 401(k) Plan Financial Statements and Supplemental Schedules
SIGNATURES THE PLAN Pursuant to the requirements of the Securities Exchange Act of 1934, the administrator of the HCC Insurance Holdings 401(k) Plan has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized, in the City of Houston, State of Texas, on the 26th day of June, 2002. HCC INSURANCE HOLDINGS 401(k) PLAN By: HCC Insurance Holdings, Inc., Administrator By: /s/ Christopher L. Martin ------------------------------------ Name: Christopher L. Martin ----------------------------------- Title: Executive Vice President ---------------------------------- EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION ------- ----------- 23.1 Consent of PricewaterhouseCoopers LLP 99.1 HCC Insurance Holdings 401(k) Plan Financial Statements and Supplemental Schedules
EX-23.1 3 h97994exv23w1.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-68771) of HCC Insurance Holdings, Inc. of our report dated June 3, 2002 relating to the financial statements of the HCC Insurance Holdings 401(k) Plan, which appears in this Form 11-K. /s/ PricewaterhouseCoopers LLP - ------------------------------ PricewaterhouseCoopers LLP Hartford, Connecticut June 24, 2002 EX-99.1 4 h97994exv99w1.txt 401(K) PLAN FINANCIAL STATEMENTS & SUPPLEMENTAL EXHIBIT 99.1 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of the HCC Insurance Holdings 401(k) Plan In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the HCC Insurance Holdings 401(k) Plan (the "Plan") at December 31, 2001 and 2000, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets (held at end of year) and nonexempt transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ PricewaterhouseCoopers LLP ------------------------------ PricewaterhouseCoopers LLP Hartford, Connecticut June 3, 2002 1 HCC INSURANCE HOLDINGS 401(k) PLAN FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES DECEMBER 31, 2001 AND 2000 HCC INSURANCE HOLDINGS 401(k) PLAN INDEX - --------------------------------------------------------------------------------
PAGE Financial Statements: Report of Independent Accountants 1 Statements of Net Assets Available for Benefits as of December 31, 2001 and 2000 2 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2001 and 2000 3 Notes to Financial Statements 4-10 Supplemental Schedules*: Schedule I - Schedule of Assets (Held at End of Year) 11-12 Schedule II - Schedule of Nonexempt Transactions 13
* Other supplemental schedules required by Section 2520-103.1 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 ("ERISA") have been omitted because they are not applicable. HCC INSURANCE HOLDINGS 401(k) PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS - --------------------------------------------------------------------------------
DECEMBER 31, 2001 2000 ASSETS Investments, at fair value $ 28,994,400 $ 28,701,018 Receivables: Employer contributions 158,618 -- Employee contributions 120,280 -- ------------ ------------ 278,898 -- ------------ ------------ Net assets available for benefits $ 29,273,298 $ 28,701,018 ============ ============
The accompanying notes are an integral part of these financial statements. 2 HCC INSURANCE HOLDINGS 401(k) PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 2001 2000 ADDITIONS TO NET ASSETS ATTRIBUTED TO: Investment income: Interest $ 582,362 $ 563,080 Dividends 14,920 15,608 Net depreciation in fair value of investments (2,680,273) (1,284,122) ------------ ------------ (2,082,991) (705,434) ------------ ------------ Contributions: Employer 1,900,018 2,087,704 Employee 3,398,992 5,357,672 ------------ ------------ 5,299,010 7,445,376 ------------ ------------ Total additions 3,216,019 6,739,942 ------------ ------------ DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Benefit payments 2,471,991 6,105,160 Transaction charge 46,314 57,763 Participant loans terminated due to withdrawal of participants 90,343 106,648 ------------ ------------ Total deductions 2,608,648 6,269,571 Change in forfeiture reserve, net (35,091) (35,601) ------------ ------------ Net increase prior to plan merger 572,280 434,770 Transfer of assets due to plan merger -- 9,324,977 ------------ ------------ Net increase 572,280 9,759,747 Net assets available for benefits at beginning of year 28,701,018 18,941,271 ------------ ------------ Net assets available for benefits at end of year $ 29,273,298 $ 28,701,018 ============ ============
The accompanying notes are an integral part of these financial statements. 3 HCC INSURANCE HOLDINGS 401(k) PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. DESCRIPTION OF PLAN The following description of the HCC Insurance Holdings 401(k) Plan (the "Plan"), as in effect as of December 31, 2001, provides only general information. As a result of the merger of several other qualified plans of acquired companies, the Plan has been amended to include certain specific provisions applicable only to merged participants. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. GENERAL The Plan is a defined contribution plan established effective January 1, 1992 and most recently amended and restated May 17, 1999, retroactively effective January 1, 1999. Non-union, full time employees of HCC Insurance Holdings, Inc. (the "Company") generally become eligible to participate on the later of their employment date or upon attaining the age of 21 and are eligible to make deferral contributions on the first day of the month following such eligibility date. All eligible employees must also complete one year of service to become eligible for employer matching contributions. The Plan is subject to the provisions of ERISA. CONTRIBUTIONS Participants may contribute an amount equal to not less than two percent nor more than 15 percent of their compensation for the contribution period. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers a general account, various pooled separate accounts and Company common stock as investment options for participants. Employee contributions are recorded in the period during which the Company makes payroll deductions from the participant's earnings. The Company may make a matching contribution in a discretionary amount for each $1.00 contributed by a participant, up to a maximum of six percent of the participant's compensation. The Company may also make discretionary non-elective contributions. Matching Company contributions are recorded monthly. Discretionary non-elective contributions, none of which were made during 2001 and 2000, are recorded at the end of the Plan year. Effective January 3, 2000, the CIGNA Large Cap Value/John A. Levin & Co. Fund (formerly "CIGNA Charter Large Company Stock - Value I Fund"), the CIGNA Small Cap Value/Berger(R) Fund (formerly "CIGNA Charter Small Company Stock - Value I Fund") and the CIGNA Small Cap Growth/TimesSquare Fund (formerly "CIGNA Charter Small Company Stock - Growth Fund") were added to the Plan's investment options. Effective April 3, 2000, the CIGNA Charter Guaranteed Government Securities Account and the CIGNA Warburg Pincus Emerging Growth Fund (Advisor Shares) were eliminated as investment options. 4 HCC INSURANCE HOLDINGS 401(k) PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- Effective April 1, 2001, the CIGNA Lifetime20 Fund, CIGNA Lifetime30 Fund, CIGNA Lifetime40 Fund, CIGNA Lifetime50 Fund, CIGNA Lifetime60 Fund and CIGNA Janus Advisor Growth Fund were added to the Plan's investment options. Effective April 1, 2001, the CIGNA Dreyfus Founders Balanced Fund and the CIGNA Fidelity Advisor Growth Opportunities Fund were placed in an inactive status and no new contributions to these fund may be made. After April 1, 2001, any contributions allocated to these funds by employees were directed to the CIGNA Guaranteed Long-Term Account (formerly "CIGNA Charter Guaranteed Long-Term Account"). PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contribution and allocation of the Company's contribution and Plan earnings. Earnings are allocated by fund based on the ratio of a participant's account invested in a particular fund to all participants' investments in that fund. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. VESTING Participants are immediately vested in their own voluntary contributions plus actual earnings thereon. The balance of vesting in the participants' accounts is based on years of service. A participant becomes 20 percent vested after two years of service, 40 percent after three years of service, 60 percent after four years of service, 80 percent after five years of service and 100 percent vested after six years of service. However, if an active participant dies or terminates due to disability prior to attaining the normal retirement age, the participant's account becomes 100 percent vested. BENEFIT PAYMENTS On termination of service, a participant may elect to receive either a lump-sum amount equal to the value of the vested portion of their account, a distribution in the form of an annuity, a combination of lump sum and annuity, or a qualified joint and survivor annuity. Distributions are subject to the applicable provisions of the Plan agreement. Benefit claims are recorded as expenses when they have been approved for payment and paid by the Plan. PARTICIPANT LOANS Participants may borrow up to a maximum of $50,000 or 50 percent of the vested portion of their account balance, whichever is less. Loans are calculated on a fully amortized basis. A loan is collateralized by the balance in the participant's account and bears interest at a rate commensurate with market rates for similar loans, as defined (7.50% to 10.00% and 7.75% to 10.00% for the years ended December 31, 2001 and 2000, respectively). CASH EQUIVALENTS Contributions received prior to year end awaiting investment in the appropriate investment option at December 31, 2000 are invested in the CIGNA Charter Guaranteed Short-Term Account, which is stated at fair value. 5 HCC INSURANCE HOLDINGS 401(k) PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 2. SUMMARY OF ACCOUNTING POLICIES METHOD OF ACCOUNTING The Plan's financial statements are prepared on the accrual basis of accounting. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein. Actual results could differ from those estimates. Certain reclassifications have been made to the 2000 amounts to conform with current year presentation. INVESTMENT VALUATION Investments in the general accounts are non-fully benefit responsive and are stated at fair value. Investments in pooled separate accounts are stated at fair value, as determined by the unit value reported by Connecticut General Life Insurance Company ("CG Life"). Participant loans are stated at fair value. The Company common stock is valued at its quoted market price. 3. INVESTMENTS Investments that represent five percent or more of the Plan's net assets are separately identified below.
DECEMBER 31, 2001 2000 CIGNA Guaranteed Long-Term Account $ 11,868,746 $ 9,786,434 interest rates, 5.45%; 5.70% CIGNA Fidelity Advisor Growth Opportunities Fund 1,668,335 2,563,131 units, 29,739; 38,777 CIGNA INVESCO Dynamics Fund 1,541,548 2,329,769 units, 66,503; 67,451 CIGNA Janus Worldwide Fund 1,950,840 2,691,797 units, 34,005; 36,190 CIGNA S&P 500(R) Index Fund(1) 4,687,361 5,425,709 units, 74,699; 75,990 HCC Insurance Holdings, Inc. Common Stock 1,571,489 1,704,357 shares, 57,041; 63,265
(1) formerly "CIGNA Charter Large Company Stock Index Fund" 6 HCC INSURANCE HOLDINGS 401(k) PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- INVESTMENT PERFORMANCE During the years ended December 31, 2001 and 2000, the Plan's investments (including interest, dividends, realized gains and losses on investments bought and sold and unrealized gains and losses on investments held during the year) appreciated (depreciated) in value as follows:
YEARS ENDED DECEMBER 31, 2001 2000 General Accounts: CIGNA Guaranteed Long-Term Account $ 550,134 $ 504,667 CIGNA Charter Guaranteed Government Securities Account -- 20,325 ------------ ------------ 550,134 524,992 Pooled Separate Accounts: CIGNA Dreyfus Founders Balanced Fund (30,954) (33,797) CIGNA Dreyfus Founders Growth Fund (318,355) (429,162) CIGNA Fidelity Advisor Growth Opportunities Fund (376,055) (587,054) CIGNA INVESCO Dynamics Fund (754,622) (325,582) CIGNA Janus Advisor Growth Fund (18,907) -- CIGNA Janus Worldwide Fund (607,566) (557,844) CIGNA Large Cap Value/John A. Levin & Co. Fund (44,789) 31,431 CIGNA Lifetime20 Fund 87 -- CIGNA Lifetime30 Fund 352 -- CIGNA Lifetime40 Fund 1,026 -- CIGNA Lifetime50 Fund 53 -- CIGNA Lifetime60 Fund (18) -- CIGNA S&P 500(R) Index Fund (659,915) (472,665) CIGNA Small Cap Growth/TimesSquare Fund (68,988) (5,510) CIGNA Small Cap Value/Berger(R) Fund 125,967 27,937 CIGNA Templeton Foreign Fund (22,697) 6,484 CIGNA TimesSquare Corporate Bond Fund(2) 54,862 15,858 CIGNA Warburg Pincus Emerging Growth Fund (Advisor Shares) -- 8,061 ------------ ------------ (2,720,519) (2,321,843) Company Common Stock: HCC Insurance Holdings, Inc. Common Stock 55,166 1,053,329 Participant loans 32,228 38,088 ------------ ------------ Net decrease $ (2,082,991) $ (705,434) ============ ============
(2) formerly "CIGNA Charter Corporate Bond Fund" 7 HCC INSURANCE HOLDINGS 401(k) PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 4. INVESTMENT CONTRACTS WITH INSURANCE COMPANY The Plan participates in contracts with CG Life via investments in the CIGNA Guaranteed Long-Term Account and the CIGNA Charter Guaranteed Government Securities Account. CG Life commingles the assets of the CIGNA Guaranteed Long-Term Account with other assets. For the Plan's investment in the CIGNA Guaranteed Long-Term Account, the Plan is credited with interest at the interest rates specified in the contract which ranged from 5.70% to 5.45% and was 5.70% for the years ended December 31, 2001 and 2000, respectively, net of asset charges. CG Life prospectively guaranteed the interest rates credited for the CIGNA Guaranteed Long-Term Account for six months. For the Plan's investment in the CIGNA Charter Guaranteed Government Securities Account, the Plan was credited with interest at a yield which averaged 4.75% for the period January 1, 2000 through April 3, 2000, net of asset charges. As discussed in Note 1, the CIGNA Charter Guaranteed Government Securities Account was eliminated as an investment option effective April 3, 2000. As discussed in Note 2, the CIGNA Guaranteed Long-Term Account and the CIGNA Charter Guaranteed Government Securities Account are included in the financial statements at fair value which, principally because of the periodic interest rate reset process, approximates contract value. 5. RELATED-PARTY TRANSACTIONS Plan assets include investments in funds managed by CG Life, an indirect wholly-owned subsidiary of CIGNA. CG Life is the Plan's trustee and as such, transactions with the trustee qualify as party-in-interest transactions. Personnel and facilities of the Company have been used to perform administrative functions for the Plan at no charge to the Plan. In addition, the Plan holds shares of HCC Insurance Holdings, Inc., the Plan sponsor, which also qualifies as a party-in-interest. 6. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their accounts. 7. TAX STATUS The Internal Revenue Service has determined and informed the Company by a letter dated September 27, 1999, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code ("IRC"). The Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plans financial statements. 8 HCC INSURANCE HOLDINGS 401(k) PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 8. RECONCILIATION OF PLAN FINANCIAL STATEMENTS TO THE FORM 5500 The Annual Return/Report of Employee Benefit Plan (the "Form 5500") is prepared on the modified cash basis. Accordingly, certain balances included on Schedule H (Part I and II) of the Form 5500 differ from those included in these financial statements. Contributions in the statement of changes in net assets available for benefits differ from contributions in the Form 5500 by the change in the amount of contributions accrued at December 31. The ending net asset balances are reconciled as follows:
DECEMBER 31, 2001 Net assets, reflected on Form 5500 $ 28,994,400 Add: Employer contributions receivable 158,618 Employee contributions receivable 120,280 ------------ Net assets, reflected in the financial statements $ 29,273,298 ============
9. PLAN MERGERS During March 2000, assets of the LDG Management Company Incorporated Cash or Deferred Profit Sharing Plan were merged into the Plan. Participants had become eligible to participate in the Plan effective January 1, 1998, subject to the provisions of the Plan agreement. 10. FORFEITURES The net change in forfeiture reserve represents the net change in the available forfeiture reserve balance from the prior year plus the current year forfeitures generated net of forfeitures used. Forfeitures result from non-vested Company contributions remaining in the Plan for all terminated employees. Upon reaching the break-in-service requirement, as defined in the Plan agreement, forfeitures generated are added to the forfeiture reserve balance. The forfeiture reserve of $462,045 and $360,861 at December 31, 2001 and 2000, respectively, is available to offset Company contributions or pay Plan expenses, which would be otherwise payable by the Company, in accordance with the Plan agreement. In 2001 and 2000, Company cash contributions were offset by $736 and $22,755, respectively, from forfeited non-vested accounts. In 2001 and 2000, Plan expenses were offset by $53,514 and $29,539, respectively, from forfeited non-vested accounts. 9 HCC INSURANCE HOLDINGS 401(k) PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 11. PROHIBITED TRANSACTION Management has determined that one nonexempt transaction occurred during 2001. This violation involved the submission of employee contributions for one semi-monthly pay period to the Plan on a date later than the latest date permitted by Department of Labor Regulations. Management is pursuing the necessary corrective action by making a contribution to the Plan for lost earnings in the amount of $1,478 ($1,419 of which had accrued as of December 31, 2001). Management calculated the lost earnings using an interest rate of 7.00%. 12. SUBSEQUENT EVENTS Effective January 1, 2002 the Plan was amended and restated in its entirety. Management has determined that a nonexempt transaction occurred during 2002. This violation involved the submission of employee contributions to the Plan on a date later than the latest date permitted by Department of Labor Regulations. Management is taking the necessary corrective action by contributing $207 in lost earnings (computed using the interest rate of 7.00%) to the Plan. 10 HCC INSURANCE HOLDINGS SUPPLEMENTAL SCHEDULE 401(K) PLAN SCHEDULE I SCHEDULE H (LINE 4i) FORM 5500 - SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2001 - ---------------------------------------------------------------------------------------------------------------------------
(c) (b) DESCRIPTION OF INVESTMENT INCLUDING (e) IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, (d) CURRENT (a) LESSOR, OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE * Connecticut General Life CIGNA Guaranteed Long-Term Account N/A** $ 11,868,746 Insurance Company * Connecticut General Life CIGNA Dreyfus Founders Balanced Fund N/A** 194,378 Insurance Company * Connecticut General Life CIGNA Dreyfus Founders Growth Fund N/A** 917,444 Insurance Company * Connecticut General Life CIGNA Fidelity Advisor Growth N/A** 1,668,335 Insurance Company Opportunities Fund * Connecticut General Life CIGNA INVESCO Dynamics Fund N/A** 1,541,548 Insurance Company * Connecticut General Life CIGNA Janus Advisor Growth Fund N/A** 163,096 Insurance Company * Connecticut General Life CIGNA Janus Worldwide Fund N/A** 1,950,840 Insurance Company * Connecticut General Life CIGNA Large Cap Value/John A. Levin N/A** 650,293 Insurance Company & Co. Fund * Connecticut General Life CIGNA Lifetime20 Fund N/A** 10,968 Insurance Company * Connecticut General Life CIGNA Lifetime30 Fund N/A** 24,934 Insurance Company
* Indicates an identified person known to be a party-in-interest to the Plan. ** Cost information has been omitted for participant directed investments. 11 HCC INSURANCE HOLDINGS SUPPLEMENTAL SCHEDULE 401(K) PLAN SCHEDULE I SCHEDULE H (LINE 4i) FORM 5500 - SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2001 (CONTINUED) - ---------------------------------------------------------------------------------------------------------------------------
(c) (b) DESCRIPTION OF INVESTMENT INCLUDING (e) IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, (d) CURRENT (a) LESSOR, OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE * Connecticut General Life CIGNA Lifetime40 Fund N/A** $ 40,326 Insurance Company * Connecticut General Life CIGNA Lifetime50 Fund N/A** 27,844 Insurance Company * Connecticut General Life CIGNA Lifetime60 Fund N/A** 2,455 Insurance Company * Connecticut General Life CIGNA S&P 500(R) Index Fund N/A** 4,687,361 Insurance Company * Connecticut General Life CIGNA Small Cap Growth/TimesSquare N/A** 673,955 Insurance Company Fund * Connecticut General Life CIGNA Small Cap Value/Berger(R) Fund N/A** 1,445,940 Insurance Company * Connecticut General Life CIGNA Templeton Foreign Fund N/A** 260,503 Insurance Company * Connecticut General Life CIGNA TimesSquare Corporate Bond N/A** 933,956 Insurance Company Fund * National Financial HCC Insurance Holdings, Inc. Company N/A** 1,571,489 Services Corporation Common Stock * Plan Participants Participant Loans N/A** 359,989 ------------ Total $ 28,994,400 ============
* Indicates an identified person known to be a party-in-interest to the Plan. ** Cost information has been omitted for participant directed investments. 12 HCC INSURANCE HOLDINGS SUPPLEMENTAL SCHEDULE 401(K) PLAN SCHEDULE II SCHEDULE G (PART III) FORM 5500 - SCHEDULE OF NONEXEMPT TRANSACTIONS YEAR ENDED DECEMBER 31, 2001 - ---------------------------------------------------------------------------------------------------------------------------------
(b) (g) RELATIONSHIP (c) EXPENSES (j) TO PLAN, DESCRIPTION OF INCURRED NET GAIN EMPLOYER, TRANSACTIONS INCLUDING IN (i) OR (LOSS) (a) OR OTHER MATURITY DATE, RATE OF (d) (e) (f) CONNECTION (h) CURRENT ON IDENTITY OF PARTY-IN- INTEREST, COLLATERAL, PURCHASE SELLING LEASE WITH COST OF VALUE OF EACH PARTY INVOLVED INTEREST PAR OR MATURITY VALUE PRICE PRICE RENTAL TRANSACTION ASSET ASSET TRANSACTION HCC Insurance Plan Sponsor Loan to employer in N/A N/A N/A N/A N/A $ 1,478 -* Holdings, Inc. the form of a late deposit of employee 401(k) deferrals at a rate of 7.00%
* Department of Labor Reg. 2510.3-102 requires that employee contribution, loan repayments and loan interest be remitted to the Plan no later than the earliest day on which such contributions could reasonably be segregated from the employer's general assets, however, in no event later than the 15th business day of the month following the month of being withheld from compensation. Failure to remit employee contributions into the Plan on a timely basis is considered a nonexempt transaction with a party-in-interest. 13 -----END PRIVACY-ENHANCED MESSAGE-----