Homeowners Choice Property & Casualty Insurance Company, Inc.

Transcription

1 QUARTERLY STATEMENT OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. 0 4 OF Tampa IN THE STATE OF Florida TO THE INSURANCE DEPARTMENT OF THE STATE OF AS OF JUNE 0, 04 PROPERTY AND CASUALTY 04

2 * * PROPERTY AND CASUALTY COMPANIES ASSOCIATION EDITION QUARTERLY STATEMENT AS OF JUNE 0, 04 OF THE CONDITION AND AFFAIRS OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. NAIC Group Code 0479, 0479 NAIC Company Code 944 Employer s ID Number (Current Period) (Prior Period) Organized under the Laws of Florida, State of Domicile or Port of Entry Florida Country of Domicile United States Incorporated/Organized 0/0/007 Commenced Business 05/0/007 Statutory Home Office 500 West Cypress Street, Suite 00, Tampa, FL, US 607 (Street and Number) (City or Town, State, Country and Zip Code) Main Administrative Office 500 West Cypress Street, Suite 00 Tampa, FL, US (Street and Number) (City or Town, State, Country and Zip Code) (Area Code) (Telephone Number) Mail Address 500 West Cypress Street, Suite 00, Tampa, FL, US 607 (Street and Number or P.O. Box) (City or Town, State, Country and Zip Code) Primary Location of Books and Records 500 West Cypress Street, Suite 00 Tampa, FL, US (Street and Number) (City or Town, State, Country and Zip Code) (Area Code) (Telephone Number) Internet Web Site Address Statutory Statement Contact Suela Bulku (Name) (Area Code) (Telephone Number) (Extension) sbulku@hcpci.com ( Address) (Fax Number) OFFICERS Name Title Name Title Scott Richardson Wallace, President Richard Ralph Allen, Chief Financial Officer Andrew Lloyd Graham, Corporate Secretary Brent Von Horn, Assistant Secretary OTHER OFFICERS,, DIRECTORS OR TRUSTEES Pareshbai Suryakant Patel Anthony Saravanos Gregory Politis Martin Albert Traber Sanjay Madhu State of County of FL Hillsborough ss The officers of this reporting entity being duly sworn, each depose and say that they are the described officers of said reporting entity, and that on the reporting period stated above, all of the herein described assets were the absolute property of the said reporting entity, free and clear from any liens or claims thereon, except as herein stated, and that this statement, together with related exhibits, schedules and explanations therein contained, annexed or referred to, is a full and true statement of all the assets and liabilities and of the condition and affairs of the said reporting entity as of the reporting period stated above, and of its income and deductions therefrom for the period ended, and have been completed in accordance with the NAIC Annual Statement Instructions and Accounting Practices and Procedures manual except to the extent that: () state law may differ; or, () that state rules or regulations require differences in reporting not related to accounting practices and procedures, according to the best of their information, knowledge and belief, respectively. Furthermore, the scope of this attestation by the described officers also includes the related corresponding electronic filing with the NAIC, when required, that is an exact copy (except for formatting differences due to electronic filing) of the enclosed statement. The electronic filing may be requested by various regulators in lieu of or in addition to the enclosed statement. Scott Richardson Wallace Richard Ralph Allen Andrew Lloyd Graham President Chief Financial Officer Corporate Secretary a. Is this an original filing? Yes [X] No [ ] Subscribed and sworn to before me this b. If no: day of,. State the amendment number. Date filed. Number of pages attached,

3 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. ASSETS Assets Current Statement Date 4 Nonadmitted Assets Net Admitted Assets (Cols. - ) December Prior Year Net Admitted Assets. Bonds 0,74, ,74,680 09,679,9. Stocks:. Preferred stocks 0,45, ,45,746,570,9. Common stocks 0,65,7 0 0,65,7 9,648,07. Mortgage loans on real estate:. First liens Other than first liens Real estate: 4. Properties occupied by the company (less $ encumbrances) Properties held for the production of income (less $ encumbrances) Properties held for sale (less $ encumbrances) Cash ($ 6,88,7 ), cash equivalents ($ 0 ) and short-term investments ($ 9,55,8 ) 55,544, ,544,094 54,9,47 6. Contract loans (including $ premium notes) Derivatives Other invested assets 9,75, ,75,686 9,57,57 9. Receivables for securities Securities lending reinvested collateral assets Aggregate write-ins for invested assets Subtotals, cash and invested assets (Lines to ) 06,59,4 0 06,59,4 85,56,4. Title plants less $ charged off (for Title insurers only) Investment income due and accrued,9,5 0,9,5,, Premiums and considerations: 5. Uncollected premiums and agents balances in the course of collection 8,4, ,4,675 4,4, Deferred premiums, agents balances and installments booked but deferred and not yet due (including $ earned but unbilled premiums) 0,48,4 0 0,48,4 0,9,56 5. Accrued retrospective premiums Reinsurance: 6. Amounts recoverable from reinsurers Funds held by or deposited with reinsured companies Other amounts receivable under reinsurance contracts,077,546 0,077,546,088,57 7. Amounts receivable relating to uninsured plans Current federal and foreign income tax recoverable and interest thereon,5,677 0,5, Net deferred tax asset 8,, ,,668 8,444, Guaranty funds receivable or on deposit Electronic data processing equipment and software Furniture and equipment, including health care delivery assets ($ ) Net adjustment in assets and liabilities due to foreign exchange rates Receivables from parent, subsidiaries and affiliates,90,46 0,90,46 697,05 4. Health care ($ ) and other amounts receivable Aggregate write-ins for other-than-invested assets 7,08 55,05 87, Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines to 5) 7,4,40 55,05 70,897,78,44,64 7. From Separate Accounts, Segregated Accounts and Protected Cell Accounts Total (Lines 6 and 7) 7,4,40 55,05 70,897,78,44,64 DETAILS OF WRITE-INS Summary of remaining write-ins for Line from overflow page Totals (Lines 0 through 0 plus 98) (Line above) Prepaid Assets 55,05 55, State Income Tax Recoverable 87, , Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 through 50 plus 598) (Line 5 above) 7,08 55,05 87,08 0 0/9/04 0:9: PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO- nd Qtr

4 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. LIABILITIES, SURPLUS AND OTHER FUNDS Current Statement Date December, Prior Year. Losses (current accident year $ 7,670,67 ) 9,4,004 40,006,77. Reinsurance payable on paid losses and loss adjustment expenses 0 0. Loss adjustment expenses,9,6,678,97 4. Commissions payable, contingent commissions and other similar charges Other expenses (excluding taxes, licenses and fees) 768,49 7, Taxes, licenses and fees (excluding federal and foreign income taxes) 9,8,965,75 7.Current federal and foreign income taxes (including $ on realized capital gains (losses)) 0 4,4,4 7. Net deferred tax liability Borrowed money $ and interest thereon $ Unearned premiums (after deducting unearned premiums for ceded reinsurance of $ 4,689,48 and including warranty reserves of $ and accrued accident and health experience rating refunds including $ for medical loss ratio rebate per the Public Health Service Act) 6,967,704 06,55,77 0. Advance premium 4,87,85 4,50,940. Dividends declared and unpaid:. Stockholders 0 0. Policyholders 0 0. Ceded reinsurance premiums payable (net of ceding commissions) 0,779,46,90,989. Funds held by company under reinsurance treaties Amounts withheld or retained by company for account of others 7,095,750 4,44, Remittances and items not allocated Provision for reinsurance (including $ certified) Net adjustments in assets and liabilities due to foreign exchange rates Drafts outstanding Payable to parent, subsidiaries and affiliates Derivatives 0 0. Payable for securities 0 0. Payable for securities lending 0 0. Liability for amounts held under uninsured plans Capital notes $ and interest thereon $ Aggregate write-ins for liabilities,47,055 5,06, Total liabilities excluding protected cell liabilities (Lines through 5),746,40 04,46,06 7. Protected cell liabilities 0 8. Total liabilities (Lines 6 and 7),746,40 04,46,06 9. Aggregate write-ins for special surplus funds Common capital stock,000,000. Preferred capital stock 0 0. Aggregate write-ins for other than special surplus funds 0 0. Surplus notes 4,000,000 4,000, Gross paid in and contributed surplus 50,470,47 49,57, Unassigned funds (surplus) 8,679,790 6,6,5 6. Less treasury stock, at cost: 6. shares common (value included in Line 0 $ ) shares preferred (value included in Line $ ) Surplus as regards policyholders (Lines 9 to 5, less 6) 8,5,7 6,898,65 8. Totals (Page, Line 8, Col. ) 70,897,78,44,64 DETAILS OF WRITE-INS 50. Assumed Reinsurance Balance Payable 5,97 4,660, 50. Contingent Brokerage Fee,0,9 546, Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 through 50 plus 598) (Line 5 above),47,055 5,06, Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 90 through 90 plus 998) (Line 9 above) Summary of remaining write-ins for Line from overflow page Totals (Lines 0 through 0 plus 98) (Line above) 0 0 0/9/04 0:9:5 PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO- nd Qtr

5 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. STATEMENT OF INCOME Current Year to Date Prior Year to Date Prior Year Ended December UNDERWRITING INCOME. Premiums earned:. Direct (written $,70,75 ) 6,709,78 0,50,47 76,44,58. Assumed (written $ (,08,467) ) 4,88,440 46,545,950 64,075,95. Ceded (written $ 9,75,94 ) 6,788,5 54,45,956 6,90,0.4 Net (written $ 8,56,4 ) 4,749,908,4,4,589,48 DEDUCTIONS:. Losses incurred (current accident year $ 4,649,5 ):. Direct 9,08,0 0,68,59 46,8,467. Assumed,54,79 8,580,87 8,878,050. Ceded 6, Net,4,065 8,849,46 55,96,57. Loss adjustment expenses incurred,5,96 0,44,6 9,68, Other underwriting expenses incurred 5,,55 46,60,00 79,597, Aggregate write-ins for underwriting deductions,48,900,97,65,406, Total underwriting deductions (Lines through 5) 98,59,45 87,80,70 57,884,97 7. Net income of protected cells Net underwriting gain (loss) (Line minus Line 6 + Line 7) 6,0,455 4,44,7 65,705,86 INVESTMENT INCOME 9. Net investment income earned,474,69 85,605,800, Net realized capital gains (losses) less capital gains tax of $ 407, ,948 7,88 5,654. Net investment gain (loss) (Lines 9 + 0),0,640 84,488,854,4 OTHER INCOME. Net gain or (loss) from agents' or premium balances charged off (amount recovered $ 0 amount charged off $,9 ) (,9) (4,0) (9,40). Finance and service charges not included in premiums 40,8 74,40 59, Aggregate write-ins for miscellaneous income Total other income (Lines through 4) 7,999,88 56,5 6. Net income before dividends to policyholders, after capital gains tax and before all other federal and foreign income taxes (Lines ) 9,789,094 5,46,597 69,,75 7. Dividends to policyholders Net income, after dividends to policyholders, after capital gains tax and before all other federal and foreign income taxes (Line 6 minus Line 7) 9,789,094 5,46,597 69,,75 9. Federal and foreign income taxes incurred 0,05,989 5,44,0,99, Net income (Line 8 minus Line 9)(to Line ) 9,77,05 0,7,575 45,7,648 CAPITAL AND SURPLUS ACCOUNT. Surplus as regards policyholders, December prior year 6,898,65 69,777,06 69,777,06. Net income (from Line 0) 9,77,05 0,7,575 45,7,648. Net transfers (to) from Protected Cell accounts Change in net unrealized capital gains or (losses) less capital gains tax of $ 47,6 876,87 9,6 56, Change in net unrealized foreign exchange capital gain (loss) Change in net deferred income tax 49,5 (,674,66) (94,598) 7. Change in nonadmitted assets (509,86) (89,7) 69,45 8. Change in provision for reinsurance Change in surplus notes Surplus (contributed to) withdrawn from protected cells Cumulative effect of changes in accounting principles Capital changes:. Paid in Transferred from surplus (Stock Dividend) Transferred to surplus Surplus adjustments:. Paid in 899,5 7,57,66,5. Transferred to capital (Stock Dividend) Transferred from capital Net remittances from or (to) Home Office Dividends to stockholders Change in treasury stock Aggregate write-ins for gains and losses in surplus Change in surplus as regards policyholders (Lines through 7),5,5 7,0,07 47,,55 9. Surplus as regards policyholders, as of statement date (Lines plus 8) 8,5,7 86,788, 6,898,65 DETAILS OF WRITE-INS 050. Policy Fee Expense,48,900,97,65,406, Summary of remaining write-ins for Line 5 from overflow page TOTALS (Lines 050 through 050 plus 0598) (Line 5 above),48,900,97,65,406, Summary of remaining write-ins for Line 4 from overflow page TOTALS (Lines 40 through 40 plus 498) (Line 4 above) Summary of remaining write-ins for Line 7 from overflow page TOTALS (Lines 70 through 70 plus 798) (Line 7 above) /9/04 0:9:6 PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO- nd Qtr 4

6 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. CASH FLOW Current Year To Date Prior Year To Date Prior Year Ended December Cash from Operations. Premiums collected net of reinsurance 6,774,606,6,48 07,9,79. Net investment income,849,808 9,545,7,07. Miscellaneous income 7,999,88 56,5 4. Total (Lines to ) 9,96,4,656,7 0,065,4 5. Benefit and loss related payments,007,968 5,499,880 5,5,68 6. Net transfers to Separate Accounts, Segregated Accounts and Protected Cell Accounts Commissions, expenses paid and aggregate write-ins for deductions 67,77,08 59,480,0 00,94,94 8. Dividends paid to policyholders Federal and foreign income taxes paid (recovered) net of $ 407,049 tax on capital gains (losses) 7,04,856 4,09,7,07, Total (Lines 5 through 9) 6,8,905 99,89,8 76,77,60. Net cash from operations (Line 4 minus Line 0),9,508,467,5,7,64 Cash from Investments. Proceeds from investments sold, matured or repaid:. Bonds,97,5,0,797 5,8,07. Stocks 5,,5,44,77,6,77. Mortgage loans Real estate Other invested assets Net gains or (losses) on cash, cash equivalents and short-term investments Miscellaneous proceeds 4,8 6,90 0,677.8 Total investment proceeds (Lines. to.7) 7,74,7 5,57,498 8,465,06. Cost of investments acquired (long-term only):. Bonds,67,65 9,06,996 8,550,0. Stocks,4,55,80,77 4,79,87. Mortgage loans Real estate Other invested assets Miscellaneous applications Total investments acquired (Lines. to.6) 45,84,50,587,7 86,89, Net increase (or decrease) in contract loans and premium notes Net cash from investments (Line.8 minus Line.7 and Line 4) (8,567,49) (6,05,4) (78,64,46) Cash from Financing and Miscellaneous Sources 6. Cash provided (applied): 6. Surplus notes, capital notes Capital and paid in surplus, less treasury stock,08 5,6 46,57 6. Borrowed funds Net deposits on deposit-type contracts and other insurance liabilities Dividends to stockholders Other cash provided (applied) (4,080,45),09,68 4,799,50 7. Net cash from financing and miscellaneous sources (Line 6. through Line 6.4 minus Line 6.5 plus Line 6.6) (,949,4),6,5 5,6,09 RECONCILIATION OF CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS 8. Net change in cash, cash equivalents and short-term investments (Line, plus Lines 5 and 7) 6,747 8,7,4 (9,800,80) 9. Cash, cash equivalents and short-term investments: 9. Beginning of year 54,9,47 94,7,57 94,7,57 9. End of period (Line 8 plus Line 9.) 55,544,094 0,45,9 54,9,47 Note: Supplemental disclosures of cash flow information for non-cash transactions: Unvested restricted stock 800,0 98,66 808, /9/04 0:9:8 PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO- nd Qtr 5

7 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc.. Summary of Significant Accounting Policies A. Accounting Practices NOTES TO FINANCIAL STATEMENTS The accompanying financial statements of Homeowners Choice Property & Casualty Insurance Company, Inc. ( Company ) have been prepared in conformity with the Accounting Practices and Procedures as prescribed by the National Association of Insurance Commissioners ( NAIC ). The State of Florida requires insurance companies domiciled in the state of Florida to prepare their statutory financial statements in accordance with the NAIC Accounting Practices and Procedure Manual subject to any deviations prescribed or permitted by the Florida Department of Financial Services. The differences between Florida prescribed practices and NAIC statutory accounting practices had no effect in Company's statutory surplus or net income. B. Use of Estimates The preparation of financial statements is in conformity with the Annual Statement Instructions and the Accounting Practices and Procedures Manual which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. It also requires estimates in the disclosure of contingent assets and liabilities. Actual results could differ from these estimates. C. Accounting Policies Premiums are earned over the term of the related policies and contracts. Premiums include policy fees collected on behalf of our managing general agent. Unearned premiums are established to cover the unexpired portion of the premiums written. Such reserves are computed using the daily pro rata method for direct business. Advance Premiums are premiums collected in advance of the policy effective date. Expenses incurred in connection with acquiring new insurance business including acquisition costs, such as sales commissions, are charged to operations as incurred. In addition, the Company uses the following accounting policies: Short-term investments are stated at amortized cost. Investment grade long-term bonds are reported at amortized cost. Amortized cost on these securities is computed using the interest method. Non-investment grade bonds are stated at the lower of amortized cost or fair value. Common stocks are stated at fair value. Investment grade redeemable preferred stocks are stated at amortized cost. Investment grade perpetual preferred stocks are stated at fair value. Non-investment grade preferred stocks are stated at the lower of amortized cost or fair value. Mortgage loans on real estate None. Investment grade loan-backed securities are stated at amortized value. The retrospective adjustment method is used to value all loan-backed securities. Investments in subsidiary and affiliated companies consist of a non-insurance subsidiary and is stated at GAAP equity value. Investments in joint ventures, partnerships and limited liability companies - None. Derivatives - None. The Company does not anticipate investment income when evaluating the need for premium deficiency reserves. Unpaid losses and loss adjustment expenses include an amount determined from individual case estimates and loss reports and an amount, based on past experience, for losses incurred but not reported. Such liabilities are necessarily based on assumptions and estimates and while management believes the amount is adequate, the ultimate liability may be in excess of or less than the amount provided. The methods for making such estimates and for establishing the resulting liability is continually reviewed and any adjustments are reflected in the period determined. Capitalization Policy Not applicable. Pharmaceutical Rebate Receivables Not applicable.. Accounting Changes and Corrections of Errors - Not applicable. Business Combinations and Goodwill A. Statutory Purchase Method - Not applicable B. Statutory Merger - Not applicable C. Impairment Loss - Not applicable 4. Discontinued Operations Not applicable 5. Investments A. Mortgage Loans, including Mezzanine Real Estate Loans Not applicable B. Debt Restructuring Not applicable C. Reverse Mortgages Not applicable D. Loan-Backed and Structured Securities () Prepayment assumptions for loan-backed and structured securities were obtained from broker dealer values. () The Company had no other-than-temporary impairments for loan-backed and structured securities recorded as of June 0, 04. () The Company had no other-than-temporary impairments for loan-backed and structured securities held at June 0, 04. (4) The following table summarizes unrealized losses on loan backed and structured securities by the length of time that the securities have continuously been in unrealized loss positions. a. The aggregate amount of unrealized losses:. Less than Months $ (,407). Months or Longer $ (,87) b. The aggregate related fair value of securities with unrealized losses:. Less than Months $ 69,568. Months or Longer $,96, (5) Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. Consideration is given to () the length of time and the extent to which the fair value has been less than cost, () the financial condition and near-term prospects of the issuer, and () the intent and ability of the Company to hold its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. The unrealized losses on all other investment securities were caused by interest rate changes or market conditions. It is expected that the securities would not be settled at a price less than the par value of the investments. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company has the ability and intent to hold these investments until a market price recovery or maturity, these investments are not considered other-than-temporarily impaired. It is possible that the Company could recognize other-than-temporary impairments in the future if events, information and the passage of time causes the Company to conclude that declines in value are other-than-temporary. E. Repurchase Agreements and/or Securities Lending Transactions - Not applicable F. Real Estate - Not applicable G. Low-income Housing Tax Credits - Not applicable H. Restricted Asstes () Restricted Assets (including Pledged) 0/9/04 0:9: PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO- nd Qtr 6

8 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. NOTES TO FINANCIAL STATEMENTS Gross Restricted 8 Percentage Current Year G/A Supporting Protected Cell Account Activity (a) Total Protected Cell Account Restricted Assets Protected Cell Account Assets Supporting G/A Activity (b) Increase/ (Decrease) (5 minus 6) Total Current Year Admitted Restricted Admitted Restricted to Total Admitted Assets Restricted Asset Category Total General Account (G/A) Total ( plus ) Total From Prior Year Gross Restricted to Total Assets a. Subject to contractual obligation for which liability is not shown $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ % 0.0 % b. Collateral held under security lending agreements c. Subject to repurchase agreements d. Subject to reverse repurchase agreements e. Subject to dollar repurchase agreements f. Subject to dollar reverse repurchase agreements g. Placed under option contracts h. Letter stock or securities restricted as to sale i. On deposit with states 00, ,000 00, , j. On deposit with other regulatory bodies k. Pledged as collateral not captured in other categories l. Other restricted assets m. Total Restricted Assets $ 00,000 $ 0 $ 0 $ 0 $ 00,000 $ 00,000 $ 0 $ 00, % 0.0% () Detail of Assets Pledged as Collateral Not Captured in Other Categories (Contracts that Share Similar Characteristics, Such as Reinsurance and Derivatives, Are Reported in the Aggregate) Not applicable () Detail of Other Restricted Assets (Contracts that Share Similar Characteristics, Such as Reinsurance and Derivatives, Are Reported in the Aggregate) Not applicable 6. Joint Ventures, Partnerships and Limited Liability Companies. A. Detail for those greater than 0% of admitted assets - None B. Writedowns for impairment of joint ventures, partnerships, LLCs None 7. Investment Income A. Accrued Investment Income The Company nonadmits investment income due and accrued if amounts are over ninety days past due. B. Amounts Nonadmitted - None 8. Derivative Investments - Not applicable 9. Income Taxes A.-G. No significant change 0. Information Concerning Parent, Subsidiaries, Affiliates and Other Related Parties A. Nature of Relationships The Company is a wholly owned subsidiary of HCI Group, Inc. (the "Parent"), a corporation incorporated in the state of Florida. The Company is the sole member of HCPCI Holdings, LLC ( Holdings ), a Florida limited liability company formed in April 00 for the purpose of holding real estate purchased to be the home office of the Parent and affiliates including the Company which Holdings purchased for $7,00,000. On June, 00, the Company contributed capital of $9,000,000 to this wholly owned affiliate. In 0, there was $,0 contributed as a result of employee restricted stock grants and $5,906 forfeited, ending in a ($0,677) net effect of additional paid in capital. In 04, there was $4,675 contributed as a result of employee restricted stock grants. Homeowners Choice Assurance Company, Inc., Homeowners Choice Managers, Inc., Southern Administration, Inc., Claddaugh Casualty Insurance Company, Ltd., Cypress Property Management Services, Inc., Cypress Claims Services, Inc., Greenleaf Capital, LLC, HCI Technical Resources, Inc., Omega Insurance Agency, Inc., Cypress Tech Development Company, Inc., and Exzeo USA, Inc., affiliates of the Company, are wholly owned subsidiaries of the Parent. Greenleaf Capital, LLC is the parent company of TV Investment Holdings, LLC, Gators on the Pass Holdings, LLC, John s Pass Marina Investment Holdings, LLC, JP Beach Holdings, LLC, Pass Investment Holdings, LLC, Treasure Island Restaurant Company, Inc., TI Marina Company, Inc., and Silver Springs Property Investments, LLC. HCI Technical Resources, Inc. is the parent company of Unthink Technologies Private Ltd. Cypress Tech Development Company, Inc. is the parent company of Exzeo Software Private Limited. B. Detail of Transactions Greater than ½% of Admitted Assets As of June 0, 04, the Company incurred management fees equal to $55,97,567 from its affiliate Homeowners Choice Managers, Inc. As of June 0, 04, the Company ceded premium, loss and loss adjustment expenses paid, and loss and loss adjustment expense reserves to Claddaugh in the amounts of $4,557,05, $90, and $0,85, respectively, for its overall participation in our catastrophe excess of loss reinsurance and quota share treaties. C. Change in Terms of Intercompany Arrangements - None D. Amounts Due to or from Related Parties At June 0, 04, the Company reflects the following balances with parent and affiliates: Affiliate Balance Due From (To) Purpose Homeowners Choice Managers, Inc. $,879,5 Administration Services HCPCI Holdings, LLC 4,06 Intercompany Accounts Receivable HCI Group, Inc. (0,76) Intercompany Accounts Payable 0/9/04 0:9: PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO- nd Qtr 6.

9 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. NOTES TO FINANCIAL STATEMENTS E. Guarantees or undertakings for Related Parties Not applicable F Management, Service Contracts, Cost Sharing Arrangements The Company has an approved Managing General Agency Agreement with its affiliate, Homeowners Choice Managers, Inc. to provide management services including but not limited to policy administration, claims administration, underwriting and marketing. Claddaugh Casualty Insurance Co., Ltd. (Bermuda), an affiliate, participates in the Company s excess / catastrophe reinsurance program. On behalf of its affiliates, HCI Group, Inc. has a lease for office space owned by Holdings. G. Nature of Relationships that could affect operations All outstanding shares of the Company are owned by HCI Group, Inc. H. Amount Deducted for Investment in Upstream Company Not applicable I. Detail of Investments in Affiliates Greater than 0% of Admitted Assets Not applicable J. Write-down for Impairments of Investments in Subsidiary, Controlled or Affiliated Companies Not applicable K. Foreign Subsidiary Valued Using CARVM Not applicable. Debt L. Investment in Downstream Noninsurance Holding Company As of June 0, 04, Homeowners Choice Property & Casualty Insurance Company, Inc. has no debt. The Company owns 00% of HCPCI Holdings, LLC, which was formed in April of 00 for the purpose of holding the real estate purchased to be the Home. Retirement Plans, Deferred Compensation, Postemployment Benefits and Compensated Absences and Other Postretirement Office building of the parent and affiliates. The property is located in Tampa, FL. This entity is carried at GAAP net book value in the statutory financial statements. There are no Benefit Plans unrecorded contingencies in the financial statements of this affiliate. A. Defined Benefit Plans Not applicable B. Description of Investment Policies Not applicable C. Fair Value of Plan Assets Not applicable D. Rate of Return Assumptions Not applicable E. Defined Contribution Plans Not applicable F. Multiemployer Plans - Not applicable G. Consolidated/Holding Company Plans - Not applicable H. Postemployment Benefits and Compensated Absences - Not applicable I. Impact of Medicare Modernization Act on Postretirement Benefits - Not applicable. Capital and Surplus, Dividend Restrictions and Quasi-Reorganizations A. Outstanding Shares The Company has,000 shares of $.00 par value common stock outstanding and issued to HCI Group, Inc., the Company's Parent. There are 0,000 shares authorized. B. Preferred Stock The Company has no preferred stock authorized, issued or outstanding. C., D., E. and F. Dividend Restrictions Under Florida law, a domestic insurer may not pay any dividend or distribute cash or other property to its stockholders except out of that part of its available and accumulated capital and surplus funds which is derived from realized net operating profits on its business and net realized capital gains. A Florida domestic insurer may not make dividend payments or distributions to stockholders without prior approval of the Florida Office of Insurance Regulation if the dividend or distribution would exceed the larger of () the lesser of (a) 0.0% of its capital surplus or (b) net income, not including realized capital gains, plus a two year carry forward, () 0.0% of capital surplus with dividends payable constrained to unassigned funds minus 5% of unrealized capital gains or () the lesser of (a) 0.0% of capital surplus or (b) net investment income plus a three year carry forward with dividends payable constrained to unassigned funds minus 5% of unrealized capital gains. No dividends were paid as of June 0, 04. G. Mutual surplus advances Not applicable H. Company stock held for special purposes Not applicable I. Changes in special surplus funds - Not applicable J. Changes in unassigned funds The portion of unassigned funds (surplus) represented by cumulative unrealized capital gains is $,5,670 less applicable deferred taxes of $784,978, for a net balance of $,40,69. K. The Company has the following surplus debentures outstanding as of June 0, 04: Par Value (Face Interest And/Or Carrying Value of Principal Paid Current Total Interest And/Or Principal Unapproved Interest Date Issued Interest Rate Amount of Notes) Note Year Paid And/Or Principal 09/7/0 % $ 4,000,000 $ 4,000,000 $ 60,000 $ 00,000 $ 0 The surplus debenture totaling $4,000,000, as illustrated above, was made in the form of cash between the Company and HCI Group, Inc., the parent and holder of the note. The debenture has been approved by the Florida Office of Insurance Regulation pursuant to and in compliance with Section 68.40, Florida Statutes. Each payment of principal and interest may be made only with the prior approval of the Florida Office of Insurance Regulation and only to the extent the Company is in compliance with the Florida Insurance Code. In the event of reorganization, dissolution, 00% reinsurance or liquidation of the Company after the retirement of all its outstanding obligations other than Subordinated Debentures, the holders of Subordinated Debentures remaining unpaid shall be entitled to preferential right in the remaining assets of the Company equal to the unpaid principal balance, plus accrued interest, before any distribution of such assets to shareholders or other owners pursuant to Section 6.7, Florida Statutes. L., M. Quasi-reorganizations Not applicable 4. Contingencies A. Contingent Commitments - Not applicable B. Guaranty Fund and Other Assessments - No significant change C. Gain Contingencies - Not applicable D. Extra contractual obilgation and bad faith losses - Not applicable The Company paid the following amounts in the reporting period to settle claims related to extra contractual obligations or bad faith claims stemming from lawsuits. Claims related ECO and bad faith losses paid during the reporting period $ 0 Number of claims where amounts were paid to settle claims related to extra contractual obligations or bad faith claims resulting from lawsuits during the reporting period. 0-5 Claims 6-50 Claims 5-00 Claims Claims More than 500 Claims X Indicate whether claim count information is disclosed per claim or per claimant. Per Claim [ X ] Per Claimant [ ] 6.

10 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. NOTES TO FINANCIAL STATEMENTS E. Product Warranties - Not applicable F. Other Contingencies As of June 0, 04, the Company had $8,570,789 in admitted premiums receivable due from policyholders. There are no uncollectible premiums receivable expected as of June 0, 04, therefore, no additional provision for uncollectible amounts has been recorded. The Company routinely assesses the collectability of these receivables. 5. Leases In September 0, the Company received a notice of intent to make audit adjustments from the Florida Department of Revenue ("FDR") in connection with the Department s audit of the Company s premium tax returns for the three-year period ended December, 0. The auditor s proposed adjustments primarily relate to the disallowance of the entire amount of $,754 in Florida salary credits applicable to that period. The proposed adjustment, which includes interest through September 0, 0, approximates $,9. Management has held discussions with the FDR staff and continues working with the Department to resolve this matter. The Company is confident in the merits of its position in claiming the Florida salary credits and intends to vigorously defend its position. As such, and based on the current status of and likelihood of final resolution, the Company has no amount accrued as of June 0, 04 related to this contingency. A. Lessee Operating Lease - Not applicable B. Lessor Leases - No significant change 6. Information About Financial Instruments With Off-Balance-Sheet Risk And Financial Instruments With Concentrations of Credit Risk A. Face or Contract Amounts - Not applicable B. Nature and Terms - Not applicable C. D. Exposure to Credit-Related Losses - Not applicable Collateral Policy Not applicable 7. Sale, Transfer and Servicing of Financial Assets and Extinguishments of Liabilities A. Transfers of Receivables Reported as Sales - Not applicable B. C. Transfers and Servicing of Financial Assets - Not applicable Wash Sales Not applicable 8. Gain or Loss to the Reporting Entity from Uninsured Plans and the Uninsured Portion of Partially Insured Plans A. ASO Plans Not applicable B. C. ASC Plans Not applicable Medicare or Other Similarly Structured Cost Based Reimbursement Contracts Not applicable 9. Direct Premium Written/Produced by Managing General Agents/Third Party Administrators A. All direct written premiums are written through Homeowners Choice Managers, Inc., an affiliated company, under a managing general agent contract (MGA). Name and Address of Managing General Agent or Third Party Administration FEIN Number Exclusive Contract Types of Business Written Types of Authority Granted Total Direct Premium Written/ Produced By Homeowners Choice Managers, Inc. Tampa, FL Yes Personal Lines Property C,CU, R, B, P, U $,70,75 0. Fair Value Measurements A. Inputs Used for Assets and Liabilities Measured at Fair Value () Fair Value Measurements at Reporting Date by Levels, and The company has categorized its assets that are measured at fair value into the three-level fair value hierarchy as reflected in the table below. The company has no liabilities that are measured at fair value. The three-level fair value hierarchy is based on the degree of subjectivity inherent in the valuation method by which fair value was determined. The three levels are defined as follows. Level - Quoted Prices in Active Markets for Identical Assets and Liabilities: This category, for items measured at fair value on a recurring basis, includes exchangetraded preferred and common stocks. The estimated fair value of the equity securities and derivatives within this category are based on quoted prices in the active markets and are thus classified as Level. Level Significant Other Observable Inputs: The Company has no assets or liabilities measured at fair value in this category. Level Significant Unobservable Inputs: The Company has no assets or liabilities measured at fair value in this category. Description for each class of asset or liability (Level ) (Level ) (Level ) Total a. Assets at fair value Preferred stocks - Perpetual $ 6,,5 $ 0 $ 0 $ 6,,5 Commom Stocks - Industrial and miscellaneous $,084,86 $ 0 $ 0 $,084,86 Common Stocks - Mutual Funds $ 9,080,6 $ 0 $ 0 $ 9,080,6 Total assets at fair value $ 6,98,578 $ 0 $ 0 $ 6,98,578 At the end of each reporting period, the Company evaluates whether or not any event has occurred or circumstances have changed that would cause an instrument to be transferred between Levels and. This policy also applies to transfers into or out of Level as stated in paragraph below. () Rollforward of Level Items The Company has no assets or liabilities measured at fair value in the Level category. () Policy on Transfers Into and Out of Level At the end of each reporting period, the Company evaluates whether or not any event has occurred or circumstances have changed that would cause an instrument to be transferred into or out of Level. During the current year, no transfers into or out of Level were required. (4) Inputs and Techniques Used for level and Level Fair Values The company has no assets or liabilities measured at fair values in the Levels and categories. (5) Derivative Fair Values Not applicable B. Other Fair Value Disclosures Not applicable 0/9/04 0:9: PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO- nd Qtr 6.

11 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. C. Fair Values for All Financial Instruments by Levels, and NOTES TO FINANCIAL STATEMENTS The table below reflect the fair values and admitted values of all admitted assets and liabilities that are financial instruments excluding those accounted for under the equity method (subsidiaries, joint ventures and ventures). The fair values are also categorized into the three-level fair value hierarchy as described above in Note 0A. Type of Financial Instrument Aggregate Fair Value Admitted Assets (Level ) (Level ) (Level ) Not Practicable (Carrying Value) Bonds $ 5,077,79 $ 0,74,680 $ 8,4,75 $ 86,645,076 $ 0 $ 0 Preferred stocks $ 0,599,44 $ 0,45,746 $ 0,599,44 $ 0 $ 0 $ 0 Common stocks $ 0,65,7 $ 0,65,7 $ 0,65,7 $ 0 $ 0 $ 0 Cash, cash equivalents and short-term investments $ 55,544,094 $ 55,544,094 $ 55,544,094 $ 0 $ 0 $ 0 Totals $... 0,86,56 $...96,876,747 $...4,74,460 $...86,645,076 $...0 $...0 D. Not Practicable to Estimate Fair Value - None. Other Items A. B. C. Extraordinary Items - None Troubled Debt Restructuring for Debtors Not applicable Other Disclosures () Agents Balances Certification, Florida Statute 65.0(5) All premiums, excluding commissions payable thereon, due from a controlled or controlling person, shall not be allowed as an asset to the extent that they are not placed in a trust account, covered by a letter of credit, or secured by a financial guaranty bond. In addition, if a financial evaluation of the controlled or controlling person indicates they are unlikely to have the ability to pay such premiums, those premiums shall not be admitted.. As of June 0, 04, Homeowners Choice Property & Casualty Insurance Company reported $8,4,675 as the total agents' balances or uncollected premiums in the course of collection. Homeowners Choice Property & Casualty Insurance Company, Inc. has no premiums due from "controlled" or "controlling" persons and has no amounts to report with regards to a Trust Fund, Letter of Credit, or a Financial Guaranty Bond. () Special Disability Trust Fund, Florida Statute The Company did not take any credits for Special Disability Trust Fund recoveries in the determination of its loss reserves for the June 0, 04 reporting period. D. Business Interruption Insurance Recoveries Not applicable E. State Transferable and Non-transferable Tax Credits - Not applicable F. G. H. Subprime Mortgage Related Risk Exposure - Not applicable Offsetting and Netting of Assets and Liabilities - Not applicable Joint and Several Liabilities - Not applicable. Events Subsequent A. Subsequent events have been considered through August, 04 for these statutory financial statements which are to be issued August 4, 04. There were no events occurring subsequent to the end of the quarter that merited recognition or disclosure in these statements.. Reinsurance () Assumed Reinsurance Ceded Reinsurance Net Premium Reserve Commission Equity Premium Reserve Commission Equity Premium Reserve Commission Equity a. Affiliates $ 0 $ 0 $ 4,5,79 $ 0 $ (4,5,79) $ 0 b. All Other $ 4,007,75 $ 0 $ 8,55,768 $ 0 $ (4,546,0) $ 0 c. TOTAL $ 4,007,75 $ 0 $ 4,689,47 $ 0 $ (8,68,4) $ 0 d. Direct Unearned Premium Reserve $ 0,649,6 () Certain ceded reinsurance contracts provide for return commissions based on a percentage of premium ceded amounts. There were no amounts accrued at the end of the current quarter. () The Company does not use protected cells as an alternative to traditional reinsurance. D. Uncollectible Reinsurance - None E. Commutation of Ceded Reinsurance The Company has not commuted any reinsurance treaties. F. Retroactive Reinsurance Not applicable G. H. I. Reinsurance Accounted for as a Deposit Not applicable Run-off Agreements Not applicable Certified Reinsurer Rating Downgraded or Status Subject to Revocation - Not applicable 4. Retrospectively Rated Contracts & Contracts Subject to Redetermination A. B. C. D. Method Used to Estimate Not applicable Method Used to Record Not applicable Amount and Percent of Net Retrospective Premiums Not applicable Medical Loss Ratio Rebates required pursuant to the Public Health Service Act Not applicable E. Calculation of Nonadmitted Accrued Retrospective Premiums Not applicable 5. Changes in Incurred Losses and Loss Adjustment Expenses Reserves for Loss and Loss Adjustment Expenses as of December, 0 were $4.7 million. As of June 0, 04, $8.8 million has been paid for losses and loss adjustment expenses attributable to insured events of prior years. Reserves remaining for prior years are $4. million as a result of the re-estimation of unpaid claims and loss adjustment expenses. Therefore, the estimated cost of losses and adjustment expenses attributable to insured events of prior years has decreased by $0.6 million. Increases and decreases of this nature occur as a result of claim settlements during the current year, and as additional information becomes known regarding individual claims, causing changes from the original estimates of the cost of these claims. The Company has no claims or loss development on retrospectively rated policies. 6. Intercompany Pooling Arrangements A. Not applicable 7. Structured Settlements A. Reserves Released Due to Purchase of Annuities - Not applicable B. Annuity Insurers with Balances Due Greater than % of Policyholders Surplus - Not applicable 0/9/04 0:9: PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO- nd Qtr 6.4

12 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. NOTES TO FINANCIAL STATEMENTS 8. Health Care Receivables A. Pharmaceutical Rebate Receivables Not applicable B. Risk Sharing Receivables Not applicable 9. Participating Policies A. Not applicable 0. Premium Deficiency Reserves A. The Company evaluated the need to record a premioum deficiency reserve as of June 0, 04 and no reserve was required for its property and casualty business. This evaluation was completed on July 8, 04. The Company does not anticipate investment income when evaluating the need for premium deficiency reserve.. Liability carried for premium deficiency reserves $ 0. Date of the most recent evaluation of this liability 7/8/04. Was anticipated investment income utilized in the calculation? Yes [ ] No [ X ]. High Deductibles A. Not applicable. Discounting of Liabilities for Unpaid Losses or Unpaid Loss Adjustment Expenses A. Tabular Discounts Not applicable B. Non-Tabular Discounts Not applicable C. Changes in Discount Assumptions - Not applicable. Asbestos/Environmental Reserves A. Not applicable B. Not applicable C. Not applicable D. Not applicable E. Not applicable F. Not applicable 4. Subscriber Savings Accounts A. Not applicable 5. Multiple Peril Crop Insurance A. Not applicable 6. Financial Guaranty Insurance A. B. Not applicable Not applicable 0/9/04 0:9: PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO- nd Qtr 6.5

13 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. GENERAL INTERROGATORIES PART - COMMON INTERROGATORIES GENERAL. Did the reporting entity experience any material transactions requiring the filing of Disclosure of Material Transactions with the State of Domicile, as required by the Model Act? Yes [ ] No [X]. If yes, has the report been filed with the domiciliary state? Yes [ ] No [ ]. Has any change been made during the year of this statement in the charter, by-laws, articles of incorporation, or deed of settlement of the reporting entity? Yes [ ] No [X]. If yes, date of change:. Is the reporting entity a member of an Insurance Holding Company System consisting of two or more affiliated persons, one or more of which is an insurer? Yes [X] No [ ] If yes, complete Schedule Y, Parts and A.. Have there been any substantial changes in the organizational chart since the prior quarter end? Yes [ ] No [X]. If the response to. is yes, provide a brief description of those changes. 4. Has the reporting entity been a party to a merger or consolidation during the period covered by this statement? Yes [ ] No [X] 4. If yes, provide the name of entity, NAIC Company Code, and state of domicile (use two letter state abbreviation) for any entity that has ceased to exist as a result of the merger or consolidation. Name of Entity NAIC Company Code State of Domicile 5. If the reporting entity is subject to a management agreement, including third-party administrator(s), managing general agent(s), attorney-infact, or similar agreement, have there been any significant changes regarding the terms of the agreement or principals involved? Yes [ ] No [X] NA [ ] If yes, attach an explanation. 6. State as of what date the latest financial examination of the reporting entity was made or is being made. //00 6. State the as of date that the latest financial examination report became available from either the state of domicile or the reporting entity. This date should be the date of the examined balance sheet and not the date the report was completed or released. //00 6. State as of what date the latest financial examination report became available to other states or the public from either the state of domicile or the reporting entity. This is the release date or completion date of the examination report and not the date of the examination (balance sheet date). 06/4/0 6.4 By what department or departments? Florida Department of Insurance Regulation 6.5 Have all financial statement adjustments within the latest financial examination report been accounted for in a subsequent financial statement filed with Departments? Yes [ ] No [ ] NA [X] 6.6 Have all of the recommendations within the latest financial examination report been complied with? Yes [X] No [ ] NA [ ] 7. Has this reporting entity had any Certificates of Authority, licenses or registrations (including corporate registration, if applicable) suspended or revoked by any governmental entity during the reporting period? Yes [ ] No [X] 7. If yes, give full information: 8. Is the company a subsidiary of a bank holding company regulated by the Federal Reserve Board? Yes [ ] No [X] 8. If response to 8. is yes, please identify the name of the bank holding company. 8. Is the company affiliated with one or more banks, thrifts or securities firms? Yes [ ] No [X] 8.4 If response to 8. is yes, please provide below the names and location (city and state of the main office) of any affiliates regulated by a federal regulatory services agency [i.e. the Federal Reserve Board (FRB), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Securities Exchange Commission (SEC)] and identify the affiliate s primary federal regulator.] Affiliate Name Location (City, State) FRB 4 OCC 5 FDIC 6 SEC 0/9/04 0:9:6 PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO- nd Qtr 7

14 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. GENERAL INTERROGATORIES 9. Are the senior officers (principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions) of the reporting entity subject to a code of ethics, which includes the following standards? Yes [X] No [ ] (a) Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (b) Full, fair, accurate, timely and understandable disclosure in the periodic reports required to be filed by the reporting entity; (c) Compliance with applicable governmental laws, rules and regulations; (d) The prompt internal reporting of violations to an appropriate person or persons identified in the code; and (e) Accountability for adherence to the code. 9. If the response to 9. is No, please explain: 9. Has the code of ethics for senior managers been amended? Yes [ ] No [X] 9. If the response to 9. is Yes, provide information related to amendment(s). 9. Have any provisions of the code of ethics been waived for any of the specified officers? Yes [ ] No [X] 9. If the response to 9. is Yes, provide the nature of any waiver(s). FINANCIAL 0. Does the reporting entity report any amounts due from parent, subsidiaries or affiliates on Page of this statement? Yes [X] No [ ] 0. If yes, indicate any amounts receivable from parent included in the Page amount: $ 0 INVESTMENT. Were any of the stocks, bonds, or other assets of the reporting entity loaned, placed under option agreement, or otherwise made available for use by another person? (Exclude securities under securities lending agreements.). If yes, give full and complete information relating thereto: Yes [ ] No [X]. Amount of real estate and mortgages held in other invested assets in Schedule BA: $ 0. Amount of real estate and mortgages held in short-term investments: $ 0 4. Does the reporting entity have any investments in parent, subsidiaries and affiliates? Yes [X] No [ ] 4. If yes, please complete the following: Prior Year-End Book/Adjusted Carrying Value Current Quarter Book/Adjusted Carrying Value 4. Bonds $ 0 $ 0 4. Preferred Stock $ 0 $ 0 4. Common Stock $ 0 $ Short-Term Investments $ 0 $ Mortgage Loans on Real Estate $ 0 $ All Other $ 9,57,57 $ 9,75, Total Investment in Parent, Subsidiaries and Affiliates (Subtotal Lines 4. to 4.6) $ 9,57,57 $ 9,75, Total Investment in Parent included in Lines 4. to 4.6 above $ 0 $ 0 5. Has the reporting entity entered into any hedging transactions reported on Schedule DB? Yes [ ] No [X] 5. If yes, has a comprehensive description of the hedging program been made available to the domiciliary state? Yes [ ] No [ ] If no, attach a description with this statement. 0/9/04 0:9:8 PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO- nd Qtr 7.

15 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. GENERAL INTERROGATORIES 6 For the reporting entity s security lending program, state the amount of the following as of the current statement date: 6. Total fair value of reinvested collateral assets reported on Schedule DL, Parts and $ 0 6. Total book adjusted/carrying value of reinvested collateral assets reported on Schedule DL, Parts and $ 0 6. Total payable for securities lending reported on the liability page $ 0 7. Excluding items in Schedule E Part Special Deposits, real estate, mortgage loans and investments held physically in the reporting entity s offices, vaults or safety deposit boxes, were all stocks, bonds and other securities, owned throughout the current year held pursuant to a custodial agreement with a qualified bank or trust company in accordance with Section, III General Examination Considerations, F. Outsourcing of Critical Functions, Custodial or Safekeeping Agreements of the NAIC Financial Condition Examiners Handbook? Yes [X] No [ ] 7. For all agreements that comply with the requirements of the NAIC Financial Condition Examiners Handbook, complete the following: Name of Custodian(s) Custodian Address The Bank of New York Mellon Trust Company, N.A. 06 Centurion Parkway, Jacksonville, FL 56 Wells Fargo Bank, N.A. 00 South Ashley Dr. Suite 980, Tampa, FL For all agreements that do not comply with the requirements of the NAIC Financial Condition Examiners Handbook, provide the name, location and a complete explanation: Name(s) Location(s) Complete Explanation(s) 7. Have there been any changes, including name changes, in the custodian(s) identified in 7. during the current quarter? Yes [ ] No [X] 7.4 If yes, give full and complete information relating thereto: Old Custodian New Custodian Date of Change 4 Reason 7.5 Identify all investment advisors, broker/dealers or individuals acting on behalf of broker/dealers that have access to the investment accounts, handle securities and have authority to make investments on behalf of the reporting entity: Central Registration Depository Name(s) Address 55 Market St 0th Floor, San Francisco, 0497 Wells Captial Management, Inc. CA Frisch Financial Group, Inc. 445 Broad Hollow Road, Suite 5, Melville, NY 747 The Bank of New York Mellon Trust Company, N.A. 06 Centurion Parkway, Jacksonville, FL Franklin Avenue, Suite 00A, Garden 657 Hilton Capital Management, LLC City, NY Alliance Bernstein L.P. 45 Avenue of the Americas, 9th Floor, New York, NY Have all the filing requirements of the Purposes and Procedures Manual of the NAIC Securities Valuation Office been followed? Yes [X] No [ ] 8. If no, list exceptions: 0/9/04 0:9:8 PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO- nd Qtr 7.

16 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. GENERAL INTERROGATORIES PART - PROPERTY & CASUALTY INTERROGATORIES. If the reporting entity is a member of a pooling arrangement, did the agreement or the reporting entity's participation change? Yes [ ] No [ ] NA [X] If yes, attach an explanation.. Has the reporting entity reinsured any risk with any other reporting entity and agreed to release such entity from liability, in whole or in part, from any loss that may occur on the risk, or portion thereof, reinsured? Yes [ ] No [X] If yes, attach an explanation.. Have any of the reporting entity's primary reinsurance contracts been canceled? Yes [ ] No [X]. If yes, give full and complete information thereto. 4. Are any of the liabilities for unpaid losses and loss adjustment expenses other than certain workers' compensation tabular reserves (see Annual Statement Instructions pertaining to disclosure of discounting for definition of tabular reserves, ) discounted at a rate of interest greater than zero? Yes [ ] No [X] 4. If yes, complete the following schedule: Line of Business Maximum Interest Discount Rate 4 Unpaid Losses TOTAL DISCOUNT 5 6 Unpaid LAE IBNR 7 TOTAL DISCOUNT TAKEN DURING PERIOD Unpaid Unpaid Losses LAE IBNR TOTAL TOTAL Operating Percentages: 5. A&H loss percent 0.0 % 5. A&H cost containment percent 0.0 % 5. A&H expense percent excluding cost containment expenses 0.0 % 6. Do you act as a custodian for health savings accounts? Yes [ ] No [X] 6. If yes, please provide the amount of custodial funds held as of the reporting date. $ Do you act as an administrator for health savings accounts? Yes [ ] No [X] 6.4 If yes, please provide the balance of the funds administered as of the reporting date. $ 0.0 0/9/04 0:9:4 PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO- nd Qtr 8

17 NAIC Company Code STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. SCHEDULE F - CEDED REINSURANCE Showing All New Reinsurance Treaties - Current Year to Date Certified Reinsurer Rating ( through 6) 7 Effective Date of Certified Reinsurer Rating ID Number Name of Reinsurer Domiciliary Jurisdiction Type of Reinsurer PROPERTY/CASUALTY AFFILIATES PROPERTY/CASUALTY U.S. INSURERS EVEREST REINS CO DE Authorized SWISS REINS AMER CORP NY Authorized PROPERTY/CASUALTY POOLS AND ASSOCIATIONS PROPERTY/CASUALTY ALL OTHER INSURERS AA-0075 LLOYD'S SYNDICATE NUMBER 400 GBR Authorized AA-9400 MS FRONTIER REINS LTD BMU Certified 06// OXBRIDGE REINSURANCE LIMITED CYM Unauthorized 9 0/9/04 0:9:4 PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO-nd Qtr

18 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. States, etc. SCHEDULE T - EXHIBIT OF PREMIUMS WRITTEN Current Year to Date - Allocated by States and Territories Direct Premiums Written Direct Losses Paid (Deducting Salvage) Direct Losses Unpaid Active Status Current Year To Date Prior Year To Date Current Year To Date Prior Year To Date Current Year To Date Prior Year To Date. Alabama AL Alaska AK Arizona AZ Arkansas AR California CA Colorado CO Connecticut CT Delaware DE Dist. Columbia DC Florida FL L,70,75 05,969,7 8,508,987 7,8,7 4,5,97 0,66,45. Georgia GA Hawaii HI Idaho ID Illinois IL Indiana IN Iowa IA Kansas KS Kentucky KY Louisiana LA Maine ME Maryland MD Massachusetts MA Michigan MI Minnesota MN Mississippi MS Missouri MO Montana MT Nebraska NE Nevada NV New Hampshire NH New Jersey NJ New Mexico NM New York NY No. Carolina NC No. Dakota ND Ohio OH Oklahoma OK Oregon OR Pennsylvania PA Rhode Island RI So. Carolina SC So. Dakota SD Tennessee TN Texas TX Utah UT Vermont VT Virginia VA Washington WA West Virginia WV Wisconsin WI Wyoming WY American Samoa AS Guam GU Puerto Rico PR U.S. Virgin Islands VI Northern Mariana Islands MP Canada CAN Aggregate Other Alien OT XXX Totals (a),70,75 05,969,7 8,508,987 7,8,7 4,5,97 0,66,45 DETAILS OF WRITE-INS XXX XXX XXX Summary of remaining writeins for Line 58 from overflow page XXX TOTALS (Lines 5800 through 5800 plus 58998) (Line 58 above) XXX (L) Licensed or Chartered - Licensed Insurance Carrier or Domiciled RRG; (R) Registered - Non-domiciled RRGs; (Q) Qualified - Qualified or Accredited Reinsurer; (E) Eligible - Reporting Entities eligible or approved to write Surplus Lines in the state; (N) None of the above - Not allowed to write business in the state. (a) Insert the number of L responses except for Canada and Other Alien. 0/9/04 0:9:50 PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO- nd Qtr 0

19 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. SCHEDULE Y -INFORMATION CONCERNING ACTIVITIES OF INSURER MEMBERS OF A HOLDING COMPANY GROUP PART - ORGANIZATIONAL CHART HCI Group, Inc. Domiciled: Florida FEIN: Cypress Tech Development Company, Inc. Greenleaf Capital, LLC Domiciled: Florida Domiciled: Florida FEIN: FEIN: Homeowners Choice Property & Casualty Insurance Homeowners Choice Managers, Inc. 00% Owned by HCI Group, Inc. 00% Owned by HCI Group, Inc. Company, Inc. Managing General Agent (MGA) Domiciled: Florida Domiciled: Florida FEIN: ; NAIC: 944; Group Code: 479 FEIN: Exzeo Software Private Limited TV Investment Holdings, LLC 00% Owned by HCI Group, Inc. 00% Owned by HCI Group, Inc. Domiciled: India Domiciled: Florida FEIN: % Owned by Greenleaf Capital, LLC Southern Administration, Inc. HCPCI Holdings, LLC Domiciled: Florida Gators on the Pass Holdings, LLC Domiciled: Florida FEIN: Domiciled: Florida FEIN: FEIN: % Owned by HCI Group, Inc. 00% Owned by Greenleaf Capital, LLC 00% Owned by Homeowners Choice Property & Casualty Exzeo USA, Inc. HCI Technical Resources, Inc. Insurance Company, Inc. Claddaugh Casualty Insurance Domiciled: Florida John s Pass Marina Investment Holdings, LLC Company, Ltd. FEIN: Domiciled: Florida Domiciled: Florida FEIN: Domiciled: Bermuda 00% Owned by HCI Group, Inc. FEIN: % Owned by Greenleaf Capital, LLC FEIN: % Owned by HCI Group, Inc. 00% Owned by HCI Group, Inc. JP Beach Holdings, LLC Homeowners Choice Assurance Company, Inc. Domiciled: Florida FEIN: Domiciled: Alabama Cypress Property Management Unthink Technologies Private Limited 00% Owned by Greenleaf Capital, LLC FEIN: ; NAIC: 589; Group Code: 479 Services, Inc. Domiciled: India 00% Owned by HCI Group, Inc. Domiciled: Florida 00% Owned by HCI Technical Resources, Inc Pass Investment Holdings, LLC FEIN: Domiciled: Florida FEIN: % Owned by HCI Group, Inc. 00% Owned by Greenleaf Capital, LLC Cypress Claims Services, Inc. Treasure Island Restaurant Company, Inc. Domiciled: Florida Domiciled: Florida FEIN: FEIN: % Owned by Greenleaf Capital, LLC 00% Owned by HCI Group, Inc. 00% Owned by Cypress Tech Development Company, Inc. TI Marina Company, Inc. Domiciled: Florida FEIN: Omega Insurance Agency, Inc. 00% Owned by Greenleaf Capital, LLC Domiciled: Florida FEIN: Silver Springs Property Investments, LLC 00% Owned by HCI Group, Inc. Domiciled: Florida FEIN: % Owned by Greenleaf Capital, LLC

20 STATEMENT AS OF JUNE 0, 04 OF THE Homeowners Choice Property & Casualty Insurance Company, Inc. SCHEDULE Y PART A DETAIL OF INSURANCE HOLDING COMPANY SYSTEM Group Code Group Name NAIC Company Code 4 Federal ID Number 5 Federal RSSD 6 CIK 7 Name of Securities Exchange if Publicly Traded (U.S. or International) Name of Parent Subsidiaries or Affiliates Homeowners Choice Property & 8 9 Domiciliary Location 0 Relationship to Reporting Entity Directly Controlled by (Name of Entity/Person) Type of Control (Ownership, Board, Management, Attorney-in-Fact, Influence, Other) 0479 HCI Grp Inc Casualty Insurance Company, Inc FL HCI Group, Inc. Ownership 00.0 HCI Group, Inc. 0 New York Stock Board of Exchange HCI Group, Inc. FL UDP Directors 0.0 Public 0 Homeowners Choice Assurance 0479 HCI Grp Inc Company, Inc. AL IA HCI Group, Inc. Ownership 00.0 HCI Group, Inc. 0 Homeowners Choice Property & Casualty Insurance Company, HCPCI Holdings, LLC FL DS Inc Ownership 00.0 HCI Group, Inc Homeowners Choice Managers, Inc. FL NIA HCI Group, Inc. Ownership 00.0 HCI Group, Inc Southern Administration, Inc. FL NIA HCI Group, Inc. Ownership 00.0 HCI Group, Inc Claddaugh Casualty Insurance Company, Ltd. BMU IA HCI Group, Inc. Ownership 00.0 HCI Group, Inc. 0 If Control is Ownership Provide Percentage 4 Ultimate Controlling Entity(ies)/ Person(s) Cypress Property Management Services, Inc FL NIA HCI Group, Inc. Ownership 00.0 HCI Group, Inc Cypress Claims Services, Inc. FL NIA HCI Group, Inc. Ownership 00.0 HCI Group, Inc Greenleaf Capital, LLC FL NIA HCI Group, Inc. Ownership 00.0 HCI Group, Inc TV Investment Holdings LLC FL NIA Greenleaf Capital, LLC Ownership 00.0 HCI Group, Inc Gators on the Pass Holdings, LLC FL NIA Greenleaf Capital, LLC Ownership 00.0 HCI Group, Inc John's Pass Marina Investment Holdings, LLC FL NIA Greenleaf Capital, LLC Ownership 00.0 HCI Group, Inc JP Beach Holdings, LLC FL NIA Greenleaf Capital, LLC Ownership 00.0 HCI Group, Inc Pass Investment Holdings, LLC FL NIA Greenleaf Capital, LLC Ownership 00.0 HCI Group, Inc. 0 Treasure Island Restaurant Company, Inc. FL NIA Greenleaf Capital, LLC Ownership 00.0 HCI Group, Inc TI Marina Company, Inc. FL NIA Greenleaf Capital, LLC Ownership 00.0 HCI Group, Inc Unthink Technologies Private Limited IND NIA HCI Technical Resources, Inc. Ownership 00.0 HCI Group, Inc HCI Technical Resources, Inc. FL NIA HCI Group, Inc. Ownership 00.0 HCI Group, Inc Omega Insurance Agency, Inc. FL NIA HCI Group, Inc. Ownership 00.0 HCI Group, Inc Cypress Tech Development Company, Inc. FL NIA HCI Group, Inc. Ownership 00.0 HCI Group, Inc. 0 Cypress Tech Development Exzeo Software Private Limited IND NIA Company, Inc. Ownership 00.0 HCI Group, Inc Exzeo USA, Inc. FL NIA HCI Group, Inc. Ownership 00.0 HCI Group, Inc Silver Springs Property Investments, LLC FL NIA Greenleaf Capital, LLC Ownership 00.0 HCI Group, Inc. 0 5 * Asterisk Explanation 0/9/04 0:9:5 PM Statement Name: 04 Quarterly HOMEOWNERS CHOICE PROP & CAS INS CO-nd Qtr