Ultimate Parent: CG Investor, LLC COREPOINTE INSURANCE COMPANY 401 S. Old Woodward Avenue, Suite 300, Birmingham, Michigan, United States 48009 Tel: 734-456-5480 Fax: 248-220-5057 AMB#: 000237 NAIC#: 10499 Ultimate Parent#: 055466 FEIN#: 38-1775863 Report Revision Date: 11/04/2011 BEST'S FINANCIAL STRENGTH RATING Based on our opinion of the company's Financial Strength, it is assigned a Best's Financial Strength Rating of A- (Excellent). The company's Financial Size Category is Class VIII. RATING RATIONALE Rating Rationale: The rating reflects CorePointe Insurance Company's (formerly Chrysler Insurance Company) (CIC) solid capitalization level and its effective management of exposures. The rating further acknowledges CIC's favorable, although somewhat variable, operating results that are derived from its underwriting expertise, loss prevention measures and effective distribution systems. These rating strengths are partially offset by the company's current small book of business, which is subject to volatility in underwriting results due to weather-related events. While underwriting results may continue to be impacted due to storm-related losses, management has lowered its retention and increased its CAT loss limits, under its reinsurance programs which it believes will protect overall surplus levels. Although surplus has fluctuated over a five-year period (largely owing to stockholder dividends), management is committed to maintaining excellent capitalization levels and has not paid a dividend since 2007. In the past, the company has benefited from the well-diversified auto dealer network of its parent, Chrysler Financial Services Americas LLC (CFS), that provided it with a highly efficient and effective distribution system, strong operating synergies, market opportunities and strategic value. Going forward, the company will replace this advantageous distribution channel as CIC is no longer related to CFS and CFS is no longer the captive finance provider of Chrysler Group LLC and its dealers. The rating recognizes management's strong underwriting abilities in the dealer inventory insurance and other transportation-related business lines, and the company's exceptional enterprise risk management practices. Historically, the company has been able to assess and analyze risk holistically, identify areas of concern (e.g., underwriting, pricing, reserving) and
proactively develop strategies, internal processes and procedures to mitigate these risks while remaining profitable and complying with regulations. Best's Financial Strength Rating: A- Outlook: Stable FIVE YEAR RATING HISTORY Best's Date FSR 11/04/11 A- 11/01/10 A- 05/01/09 B++u 10/14/08 B++ 05/13/08 B++ 10/29/07 B++ 05/09/07 A g KEY FINANCIAL INDICATORS Statutory Data ($000) Direct Net Pretax Period Premiums Premiums Operating Ending Written Written Income 2006 89,690 80,819 58,026 2007 112,376 114,781 48,299 2008 111,596 121,316 33,307 2009 50,757 55,420 18,574 2010 12,716 14,724 1,633 09/2010 11,692 13,288 5,608 09/2011 15,625 13,727-4,436 Statutory Data ($000) Total Policy- Period Net Admitted holders' Ending Income Assets Surplus 2006 36,568 347,817 184,645 2007 36,882 218,493 76,116 2008 25,475 223,296 104,722 2009 12,977 229,385 129,691 2010 30,805 216,044 132,773 09/2010 5,433 221,345 137,794 09/2011-1,409 205,777 130,142 Profitability Leverage Liquidity
Inv. Pretax Overall Oper. Period Comb. Yield ROR NA Inv NPW Net Liq Cash- Ending Ratio (%) (%) Lev to PHS Lev (%) flow (%) 2006 56.8 4.5 62.0 11.4 0.4 1.3 215.3 78.5 2007 69.0 4.7 44.1 29.2 1.5 3.3 158.0 130.4 2008 81.2 4.7 27.4 20.6 1.2 2.3 191.7 110.9 2009 81.4 3.2 30.9 35.4 0.4 1.2 237.0 93.3 2010 114.6 1.4 7.3 3.4 0.1 0.7 268.2 112.8 5-Yr Avg 73.9 3.8 39.3 09/2010 88.0 XX 29.1 XX 0.1 0.7 266.9 118.9 09/2011 138.7 XX -37.8 XX 0.1 0.7 272.2 34.6 (*) Data reflected within all tables of this report has been compiled from the companyfiled statutory statement. Within several financial tables of this report, this company is compared against the Commercial Automobile Composite. BUSINESS REVIEW CorePointe Insurance Company (formerly Chrysler Insurance Company) (CIC) is engaged in offering of automobile dealerships physical damage inventory protection. The company also participates in certain corporate risks of affiliated companies in the Cerberus portfolio. CIC uses multiple distribution channels including direct sales representatives, agencies, brokers and banks. The direct sales representatives operate out of offices in their homes. The company plans to underwrite and sell other insurance products directly or with partners i.e. extended warranties, GAP, dealer garage, property, and other liability coverages. The company has historically been very successful in writing dealer open lot physical damage and automobile liability insurance coverages. CIC recognizes that enterprise risk management (ERM) represents a fundamental shift in the way management must approach risk. As such, it takes a holistic, proactive approach to ERM practices. In response to Sarbanes-Oxley, the company's ERM practices enables it to assess and analyze risk holistically, identifying areas of concerns (e.g. underwriting, pricing, reserving) in advance and proactively develop strategies, internal processes and procedures to comply with regulations. 2010 BUSINESS PRODUCTION AND PROFITABILITY ($000) % of Pure Loss Product Premiums Written Total Loss & LAE Line Direct Net NPW Ratio Reserves Auto Physical 6,710 9,826 66.7 38.3 1,751 Inland Marine 1,268 1,916 13.0 39.3 148
Comm'l Auto Liab 1,894 968 6.6-99.9 24,092 Warranty 953 953 6.5 73.7 375 Surety 897 897 6.1 329.0 2,692 Oth Liab Occur 647 410 2.8 105.0 794 Allied Lines 274 120 0.8 36 All Other 74-365 -2.5-99.9 11,240 Totals 12,716 14,724 100.0 58.2 41,127 Geographical breakdown of direct premium writings ($000): Michigan, $1,774 (14.0%); Indiana, $1,281 (10.1%); Florida, $1,178 (9.3%); Washington, $839 (6.6%); Minnesota, $727 (5.7%); other jurisdictions, $5,750 (45.2%); Canada, $1,167 (9.2%). FINANCIAL PERFORMANCE Overall Earnings: CorePointe Insurance Company (CIC) operating performance has been strong over the last five years. Positively influencing results is the favorable reserve run-off as the Company has focused on its specialty in auto physical damage insurance. Underwriting results have, however, been offset in recent years by higher underwriting expenses due to an increase in paid commissions. Commission expense increased due to higher premium volume with its MGA and a change in its automobile physical damage reinsurance treaty that decreased commissions from its reinsurers. Premiums were significantly lower in 2010 and 2009 versus prior years primarily due to CIC losing to GMAC Insurance its advantageous captive distribution channel with CFS starting in June 2009. Over a five-year period, with the exception of the realized gain on the Verisk Stock, net investment income has decreased on lower bond interest earnings related to the low interest rate environment. Two outstanding loans to its parent of approximately $48.8 million dollars were paid off in December 2010. In 2010, the company recorded a gain on the sale of its Verisk stock of approximately $38 million, before taxes. In 2007, the company's invested assets declined following senior management's decision to dividend more than $145 million of its assets due to lower capital requirements. Return measures on invested assets at year-end 2007 remained relatively unchanged compared to prior year while invested assets declined by 41% of the same period. With the dismal investment income partly offset by a significant realized capital loss, return measures declined at year-end 2008 markedly. Despite a significant reduction in premiums benefiting from reserve takedowns related to changes in the law regarding vicarious liability and other favorable claims settlements, operating results remained profitable through the year-end 2009 with a small underwriting loss in 2010; Further impacting results was the decline in the group's
interest income largely related to a drop in investment yield and a desire for extra liquidity. Underwriting results and overall return measures rebounded favorably at yearend 2006, and continued favorable through second quarter June 30 2010. PROFITABILITY ANALYSIS Company Industry Composite Pretax Return Pretax Return Period ROR on Comb. Oper. ROR on Comb. Oper. Ending (%) PHS(%) Ratio Ratio (%) PHS(%) Ratio Ratio 2006 62.0 24.3 56.8 41.0 16.6 13.5 91.9 83.3 2007 44.1 24.7 69.0 58.4 14.2 8.4 97.3 87.9 2008 27.4 27.9 81.2 74.1 12.9-6.7 98.7 89.1 2009 30.9 23.1 81.4 70.8 15.2 12.7 96.9 86.8 2010 7.3 4.5 114.6 102.2 14.4 11.8 96.9 87.0 5-Yr Avg 39.3 20.7 73.9 63.0 14.7 8.0 96.2 86.8 09/2010 29.1 XX 88.0 76.3 XX XX XX XX 09/2011-37.8 XX 138.7 131.4 XX XX XX XX UNDERWRITING EXPERIENCE Net Undrw Loss Ratios Expense Ratios Income Pure Loss & Net Other Total Div. Comb Year ($000) Loss LAE LAE Comm Exp. Exp. Pol. Ratio 2006 43,030 28.5 7.7 36.1 4.1 16.6 20.7 56.8 2007 32,700 42.7 3.6 46.4 13.1 9.6 22.6 69.0 2008 22,867 53.1 6.4 59.4 15.1 6.7 21.8 81.2 2009 12,578 38.7 13.3 52.0 14.7 14.8 29.5 81.4 2010-274 58.2 16.8 74.9 8.9 30.7 39.7 114.6 5-Yr Avg 42.8 7.5 50.3 11.9 11.7 23.6 73.9 09/2010 4,485 34.0 17.8 51.7 XX XX 36.3 88.0 09/2011-5,328 69.4 29.7 99.1 XX XX 39.6 138.7 INVESTMENT INCOME ANALYSIS ($000) Company Net Realized Unrealized Inv Capital Capital Year Income Gains Gains 2006 14,757 699 8,932
2007 11,554 11,655-4,688 2008 8,688-3,547-243 2009 6,375 40 14,091 2010 2,769 25,523-24,965 09/2010 2,253 543 318 09/2011 857 1,387-151 Company Industry Composite_ Inv Inc Inv Total Inv Inc Inv Growth Yield Return Growth Yield Year (%) (%) (%) (%) (%) 2006 10.5 4.5 7.5 25.1 4.2 2007-21.7 4.7 7.6 9.1 4.2 2008-24.8 4.7 2.6-1.8 4.2 2009-26.6 3.2 10.8-2.6 4.0 2010-56.6 1.4 1.6-14.9 3.4 5-Yr Avg -19.3 3.8 6.2 1.8 4.0 09/2010 XX XX 1.5 XX XX 09/2011 XX XX 1.1 XX XX INVESTMENT PORTFOLIO ANALYSIS 2010 Inv Asset Assets _ % of Invested Assets _ Annual Class ($000) 2010 2009 % Chg Long-Term bonds 52,893 25.9 25.9-1.8 Stocks 3,724 1.8 20.1-91.1 Affiliated Investments 23.4-99.9 Other Inv Assets 147,423 72.3 30.6 131.8 Total 204,040 100.0 100.0-1.9 2010 BOND PORTFOLIO ANALYSIS % of Mkt Val Avg. Class Class Struc. Struc. Asset Total to Stmt Maturity 1-2 3-6 Secur. Secur. Class Bonds Val(%) (Yrs) (%) (%) (%) (% of PHS) Governments 78.4 6.0 1.0 100.0 States, terr & poss 0.1 0.6 0.5 100.0 Corporates 21.5 12.1 7.8 88.3 11.7 8.9 2.6 Total all bonds 100.0 10.5 2.4 97.5 2.5 1.9 2.6
CAPITALIZATION Capital Generation: Surplus has fluctuated over a five-year period due to stockholder dividends and shifts in operating results. Over a five-year period ending December 31, 2010, CIC has paid $229 million in stockholder dividends. In 2010 surplus increased due to net earnings, including the realized gain from the sale of its holdings in Verisk Analytics. At year-end 2006, surplus declined 2.8% or $5.4 million, again, due to a $55 million stockholder dividend payout. In 2007 following Cerberus 80.1% acquisition of its parent, the company upstreamed more than $145 million stockholder dividends to its parent, which led to a 41.1% drop on invested assets and 58.8% drop in surplus, as well. The group's overall capitalization remains favorable and exhibits a proven track record of internally generating capital. CAPITAL GENERATION ANALYSIS ($000) Source of Surplus Growth Pretax Total Net Operating Inv. Contrib. Year Income Gains Capital 2006 58,026 9,631-55,000 2007 48,299 6,967-149,000 2008 33,307-3,791 2009 18,574 14,131 2010 1,633 558 5-Yr Total 159,840 27,497-204,000 09/2010 5,608 861 09/2011-4,436 1,236 192 Source of Surplus Growth Other, Change PHS Net of in Growth Year Tax PHS (%) 2006-18,030-5,373-2.8 2007-14,796-108,530-58.8 2008-910 28,606 37.6 2009-7,737 24,969 23.8 2010 891 3,082 2.4 5-Yr Total -40,582-57,246 09/2010 1,634 8,103 6.2 09/2011 378-2,631-2.0 Overall Capitalization: CIC's overall capitalization remains favorable as measured by Best's Capital Adequacy Ratio (BCAR) and is supportive of the current rating. This
capital position is reflective of the company's conservative underwriting leverage and embedded economic value in loss reserves somewhat offset by affiliated investment leverage. Surplus was positively affected by an increase in the unrealized investment gain of Verisk Analytics (formerly ISO) as the result of a 2009 IPO. QUALITY OF SURPLUS ($000) % of PHS Dividend Requirements Year- Cap Stk/ Un- Stock- Div to Div to End Contrib. assigned holder POI Net Inc. Year PHS Cap. Other Surplus Divs (%) (%) 2006 184,645 13.5 86.5-55,000 94.8 150.4 2007 76,116 32.8 67.2-149,000 308.5 404.0 2008 104,722 23.9 76.1 2009 129,691 19.3 80.7 2010 132,773 18.8 81.2 09/2010 137,794 18.1 81.9 09/2011 130,142 19.4 80.6 Underwriting Leverage: Leverage spiked up in 2007 due to a large dividend upstreamed to CIC's parent coupled with a significant increase in net premium written. Other leverage measures increased due to the dividend. LEVERAGE ANALYSIS Company Industry Composite NPW to Reserves Net Gross NPW to Reserves Net Gross Year PHS to PHS Lev Lev PHS to PHS Lev Lev 2006 0.4 0.4 1.3 1.9 1.0 0.9 2.7 3.6 2007 1.5 0.9 3.3 4.1 1.0 0.9 2.7 3.6 2008 1.2 0.6 2.3 2.8 1.0 1.1 2.8 3.5 2009 0.4 0.3 1.2 1.5 0.8 1.0 2.4 2.9 2010 0.1 0.3 0.7 0.9 0.7 1.0 2.3 2.7 09/2010 0.1 0.3 0.7 XX XX XX XX XX 09/2011 0.1 0.3 0.7 XX XX XX XX XX Current BCAR: 470.2 PREMIUM COMPOSITION & GROWTH ANALYSIS Period DPW GPW Ending ($000) (% Chg) ($000) (% Chg) 2006 89,690-40.2 100,660-38.0 2007 112,376 25.3 133,867 33.0
2008 111,596-0.7 142,947 6.8 2009 50,757-54.5 69,754-51.2 2010 12,716-74.9 17,096-75.5 5-Yr CAGR -39.0-36.3 5-Yr Change -91.5-89.5 09/2010 11,692-74.0 16,170-74.0 09/2011 15,625 33.6 15,566-3.7 Period NPW NPE Ending ($000) (% Chg) ($000) (% Chg) 2006 80,819-27.0 93,552-15.0 2007 114,781 42.0 109,406 16.9 2008 121,316 5.7 121,535 11.1 2009 55,420-54.3 60,163-50.5 2010 14,724-73.4 22,222-63.1 5-Yr CAGR -33.2-27.4 5-Yr Change -86.7-79.8 09/2010 13,288-74.7 19,281-65.3 09/2011 13,727 3.3 11,731-39.2 Reserve Quality: Calendar and accident year loss reserves have developed favorably over the last five years. Reserve redundancies have been incurred in all other accident years and reserve take downs have generally boosted underwriting results since 2001. LOSS & ALAE RESERVE DEVELOPMENT: CALENDAR YEAR ($000) Original Developed Develop. Develop. Develop. Unpaid Unpaid Calendar Loss Reserves to to to Reserves Resrv. to Year Reserves Thru 2010 Orig.(%) PHS (%) NPE (%) @12/2010 Dev.(%) 2005 114,366 47,656-58.3-35.1 43.3 16,709 35.1 2006 66,972 35,040-47.7-17.3 37.5 22,024 62.9 2007 58,988 35,497-39.8-30.9 32.4 26,647 75.1 2008 57,026 41,313-27.6-15.0 34.0 31,601 76.5 2009 36,290 39,493 8.8 2.5 65.6 34,609 87.6 2010 39,184 39,184 176.3 39,184 100.0 LOSS & ALAE RESERVE DEVELOPMENT: ACCIDENT YEAR ($000) Original Developed Develop. Unpaid Acc Yr. Acc Yr. Accident Loss Reserves to Reserves Loss Comb Year Reserves Thru 2010 Orig.(%) @12/2010 Ratio Ratio 2005 31,472 8,033-74.5 1,127 63.4 76.4 2006 15,816 12,035-23.9 5,315 71.8 92.5
2007 19,153 12,575-34.3 4,623 56.9 79.5 2008 16,412 10,919-33.5 4,954 66.4 88.2 2009 9,520 5,741-39.7 3,008 76.5 105.9 2010 4,575 4,575 4,575 79.6 119.2 Reinsurance Utilization: Chrysler Insurance maintains moderate reinsurance utilization as demonstrated by a business retention ratio of 86% and reinsurance recoverable leverage of 12% at year-end 2010. Reinsurance is primarily utilized on an excess of loss basis as well as for catastrophe protection. While the business retention is somewhat higher than the commercial automobile composite, its recoverable leverage (reinsurance recoverable/ policyholder surplus) has been trailing behind this composite. Ceded leverage increased in 2007 due to significant recoverables related to its Katrina losses. The majority of the company's reinsurers are U.S. based and of high quality. CEDED REINSURANCE ANALYSIS ($000) Company Industry Composite Ceded Business Rein Rec Ceded Business Rein Rec Ceded Reins Retention to PHS Reins to Retention to PHS Reins to Year Total (%) (%) PHS (%) (%) (%) PHS(%) 2006 105,900 80.3 46.6 57.4 63.2 49.4 86.0 2007 59,397 85.7 53.0 78.0 59.7 49.5 86.5 2008 56,831 84.9 33.6 54.3 61.1 47.3 73.6 2009 41,796 79.5 21.2 32.2 67.6 26.1 41.4 2010 18,845 86.1 12.4 14.2 68.6 28.1 47.1 2010 REINSURANCE RECOVERABLES ($000) Paid & Total Unpaid Unearned Other Reins Losses IBNR Premiums Recov* Recov US Insurers 13,563 2,037 702 16,302 Other Non-US 25 63 83 171 Total (ex US Affils) 13,588 2,100 785 16,473 Grand Total 13,588 2,100 785 16,473 * Includes Commissions less Funds Withheld Investment Leverage: The majority of CIC's assets are invested in cash, cash equivalents, and high quality fixed income securities, with a focus on high quality corporate bonds. Included in the company's bond holdings are agency and non-agency backed collateralized mortgage obligations (CMOs) and other asset-backed securities. These investments are mostly planned amortization types and are well diversified. The company currently holds no high risk CMOs.
INVESTMENT LEVERAGE ANALYSIS (% OF PHS) Company Industry Composite Class Real Other Non-Affl Class 3-6 Estate/ Invested Common Inv. Affil 3-6 Common Year Bonds Mtg. Assets Stocks Lev. Inv. Bonds Stocks 2006 5.5 5.9 11.4 43.8 2.0 45.0 2007 11.0 18.1 29.2 77.4 2.5 48.0 2008 6.0 14.6 20.6 56.3 8.8 33.4 2009 5.0 30.4 35.4 37.6 10.7 33.7 2010 3.4 3.4 12.0 37.6 LIQUIDITY Overall Liquidity: Current and overall liquidity measures fell precipitously in 2007 as a large dividend was paid to CIC's parent. In 2009 all liquidity measures were well above industry averages. LIQUIDITY ANALYSIS Company Industry Composite Gross Gross Quick Current Overall Agents Agents Quick Current Overall Bal Bal Year Liq (%) Liq (%) Liq (%) to PHS(%) Liq (%) Liq (%) Liq (%) to PHS(%) 2006 26.4 148.9 215.3 2.3 60.1 130.4 159.0 9.1 2007 47.8 93.9 158.0 16.9 56.1 129.1 157.4 8.9 2008 68.5 114.7 191.7 9.5 51.4 126.7 154.5 9.7 2009 106.0 165.1 237.0 2.9 59.4 134.1 160.3 7.8 2010 193.4 253.3 268.2 0.2 61.8 139.0 165.1 6.2 09/2010 XX 192.6 266.9 0.7 XX XX XX XX 09/2011 XX 249.8 272.2 1.7 XX XX XX XX CASH FLOW ANALYSIS ($000) Company Industry Composite_ Underw Oper Net Underw Oper Underw Oper Cash Cash Cash Cash Cash Cash Cash Year Flow Flow Flow Flow (%) Flow (%) Flow (%) Flow (%) 2006-17,457-27,653-12,994 82.9 78.5 126.4 129.8 2007 35,630 29,708 32,699 148.2 130.4 106.8 113.9 2008 16,123 13,253 18,256 115.0 110.9 105.5 110.9
2009-3,714-5,162 1,163 94.5 93.3 112.2 118.3 2010 1,156 2,808 84,249 105.7 112.8 94.2 101.4 09/2010 2,358 3,170-589 115.5 118.9 XX XX 09/2011-15,067-20,633-52,691 39.8 34.6 XX XX HISTORY This company was incorporated on December 30, 1964 under the laws of Michigan as and began business the following day. Operations were conducted under the name CAR City Insurance Company until November 8, 1972 when the name was changed to Chrysler Insurance Company. On July 1, 2001, the name was changed to DaimlerChrysler Insurance Company. The current name was adopted in March,2011. Paid up capital of $5,000,000 consists of 1,000,000 common shares at $5 par value each. All shares are issued and outstanding. MANAGEMENT All of the outstanding stock of CorePointe Insurance Company is owned by CGI Holding LLC, formerly, Chrysler Holding LLC. Overall operations are directed by James S. Haan, President and CEO. Officers: Chairman of the Board, Leland Wilson; President and Chief Executive Officer, James S. Haan; Chief Operating Officer, Richard Young; Secretary and General Counsel, Thomas O'Brien. Directors: James S. Haan, Mark Neporent, Scott Plattus, Lenard Tessler, Leland F. Wilson. REGULATORY An examination of the financial condition was made as of December 31, 2009, by the insurance department of Michigan. The 2010 annual independent audit of the company was conducted by KPMG, LLP. The annual statement of actuarial opinion is provided by Jeremy P. Pecora, FCAS, MAAA, Towers Watson. TERRITORY The company is licensed in the District of Columbia and all states. It is also licensed in Canada. REINSURANCE
Reinsurance protection for auto physical damage is on an excess of loss, per location basis above $ 2.0 million, with excess of loss in two layers. The first layer is $2 million excess of $3 million and the second layer is $5 million excess of $5 million. Catastrophe protection is $ 30 million excess of $ 3.5 million in four excess layers. CIC decreased its retention s on its CAT program in 2010.. Despite hurricane/storm losses in 2005, the company did not exhaust its reinsurance protection limits. Excess of loss coverage for casualty risks provides $4.5 million excess of $500,000 for auto liability and $4.5 million excess of $500,000 for garage keeper's liability (GKLL). In addition, $9.5 million excess of $500,000 is provided for workers compensation. Property coverage is now an occurrence limit of $24.5 million xs $500,000. Principal reinsurers include Munich American Re, Hanover Re, Lloyd's of London, Liberty Mutual and SCOR Re. BALANCE SHEET ($000) ADMITTED ASSETS 12/31/2010 12/31/2009 2010 % 2009 % Bonds 52,893 53,852 24.5 23.5 Preferred stock 3,724 2,404 1.7 1.0 Common stock 39,424 17.2 Cash & short-term invest 147,008 62,758 68.0 27.4 Investments in affiliates 48,716 21.2 Total invested assets 203,624 207,155 94.3 90.3 Premium balances 3,957 9,248 1.8 4.0 Accrued interest 416 831 0.2 0.4 All other assets 8,047 12,151 3.7 5.3 Total assets 216,044 229,385 100.0 100.0 LIABILITIES & SURPLUS 12/31/2010 12/31/2009 2010 % 2009 % Loss & LAE reserves 41,127 43,141 19.0 18.8 Unearned premiums 16,541 24,039 7.7 10.5 Conditional reserve funds 2,706 2,911 1.3 1.3 All other liabilities 22,898 29,603 10.6 12.9 Total liabilities 83,271 99,694 38.5 43.5 Capital & assigned surplus 25,000 25,000 11.6 10.9 Unassigned surplus 107,773 104,691 49.9 45.6 Total policyholders' surplus 132,773 129,691 61.5 56.5
Total liabilities & surplus 216,044 229,385 100.0 100.0 SUMMARY OF 2010 OPERATIONS ($000) FUNDS PROVIDED STATEMENT OF INCOME 12/31/2010 FROM OPERATIONS 12/31/2010 Premiums earned 22,222 Premiums collected 21,312 Losses incurred 12,923 Benefit & loss related pmts 9,283 LAE incurred 3,732 Undrw expenses LAE & undrw 5,842 incurred expenses paid 10,872 Net underwriting income -274 Undrw cash flow 1,156 Net investment income 2,769 Investment income 3,327 Other income/expense -862 Other income/expense 100 Pre-tax oper income 1,633 Pre-tax cash operations 4,583 Realized capital gains 25,523 Income taxes incurred -3,650 Income taxes pd (recov) 1,775 Net income 30,805 Net oper cash flow 2,808 INTERIM BALANCE SHEET ($000) ADMITTED ASSETS 03/31/2011 06/30/2011 09/30/2011 Cash & short term invest 141,027 131,498 94,316 Bonds 51,507 52,401 84,430 Preferred stock 3,820 4,345 4,232 Common stock 68 66 5,014 Other investments 208 Total investments 196,423 188,310 188,200 Premium balances 4,077 4,818 8,463 Reinsurance funds 135 123 124 Accrued interest 493 408 636 All other assets 7,954 9,673 8,354 Total assets 209,082 203,332 205,777 LIABILITIES & SURPLUS 03/31/2011 06/30/2011 09/30/2011
Loss & LAE reserves 38,571 36,656 34,459 Unearned premiums 15,353 15,366 18,537 Conditional reserve funds 681 136 37 All other liabilities 16,409 18,173 22,603 Total liabilities 71,014 70,330 75,635 Capital & assigned surp 25,000 25,192 25,192 Unassigned surplus 113,068 107,809 104,950 Policyholders' surplus 138,068 133,001 130,142 Total liabilities & surplus 209,082 203,332 205,777 INTERIM INCOME STATEMENT ($000) Period Ended Period Ended Increase/ 09/30/2011 09/30/2010 Decrease Premiums earned 11,731 19,281-7,550 Losses incurred 8,145 6,546 1,599 LAE incurred 3,482 3,423 59 Underwriters expenses incurred 5,433 4,828 606 Net underwriting income -5,328 4,485-9,813 Net investment income 857 2,253-1,397 Other income/expenses 35-1,130 1,165 Pre-tax operating income -4,436 5,608-10,044 Realized capital gains 1,387 543 844 Income taxes incurred -1,640 718-2,359 Net income -1,409 5,433-6,842 INTERIM CASH FLOW($000) Period Ended Period Ended Increase/ 09/30/2011 09/30/2010 Decrease Premiums collected 9,968 17,559-7,591 Benefit & loss related pmts 16,220 7,475 8,745 Undrw expenses paid 8,816 7,726 1,090 Underwriting cash flow -15,067 2,358-17,425
Investment income 866 2,260-1,393 Other income/expense 79 82-3 Pre-tax cash operations -14,121 4,700-18,821 Income taxes pd (recov) 6,512 1,529 4,982 Net oper cash flow -20,633 3,170-23,803