penn-star insurance company · statement as of march 31, 2003 of the penn-star insurance company 3...

PROPERTY AND CASUALTY COMPANIES - ASSOCIATION EDITION

*10673200320100101*

QUARTERLY STATEMENTAs of March 31, 2003

of the Condition and Affairs of the

PENN-STAR INSURANCE COMPANYNAIC Group Code..... 1218, 1218 NAIC Company Code..... 10673 Employer's ID Number..... 23-2865367 (Current Period) (Prior Period)

Organized under the Laws of PENNSYLVANIA State of Domicile or Port of Entry PENNSYLVANIA Country of Domicile USIncorporated..... November 8, 1996 Commenced Business..... January 8, 1997

Statutory Home Office 420 SOUTH YORK ROAD….. HATBORO ..... PA ..... 19040 (Street and Number) (City or Town, State and Zip Code)Main Administrative Office 420 SOUTH YORK ROAD….. HATBORO ..... PA ..... 19040 215-443-3600 (Street and Number) (City or Town, State and Zip Code) (Area Code) (Telephone Number)Mail Address 420 SOUTH YORK ROAD….. HATBORO ..... PA ..... 19040 (Street and Number or P. O. Box) (City or Town, State and Zip Code)Primary Location of Books and Records 420 SOUTH YORK ROAD….. HATBORO ..... PA ..... 19040 215-443-3600 (Street and Number) (City or Town, State and Zip Code) (Area Code) (Telephone Number)Internet Website Address penn-america.comStatutory Statement Contact Michael Francis Rusas 215-773-7757 (Name) (Area Code) (Telephone Number) (Extension) [email protected] 215-443-3602 (E-Mail Address) (Fax Number)Policyowner Relations Contact 420 SOUTH YORK ROAD….. HATBORO ..... PA ..... 19040 215-443-3635 (Street and Number) (City or Town, State and Zip Code) (Area Code) (Telephone Number) (Extension)

OFFICERSPresident ..... Jon Simeon Saltzman Treasurer ..... Joseph Francis Morris Secretary ..... Garland Paige Pezzuolo

VICE PRESIDENTSJohn Dodd Curry James Ransley Lennon Joseph Francis Morris Garland Paige Pezzuolo Brian Joseph Riley

DIRECTORS OR TRUSTEESIrvin Saltzman Jon Simeon Saltzman Jami Saltzman-Levy Eric Anthony Saltzman Joseph Francis Morris Garland Paige Pezzuolo James Ransley Lennon

State of........ PennsylvaniaCounty of..... Montgomery

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 periodstated 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 asherein stated, and that this statement, together with related exhibits, schedules and explanations therein contained, annexed or referred to, is a full and true statementof 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 deductionstherefrom for the period ended, and have been completed in accordance with the NAIC Annual Statement Instructions and Accounting Practices and Proceduresmanual except to the extent that: (1) state law may differ; or, (2) that state rules or regulations require differences in reporting not related to accounting practices andprocedures, according to the best of their information, knowledge and belief, respectively.

(Signature) (Signature) (Signature)Jon Simeon Saltzman Garland Paige Pezzuolo Joseph Francis Morris (Printed Name) (Printed Name) (Printed Name)President Secretary Treasurer

Subscribed and sworn to before me this

..............day of ............................................................, 2003

...............................................................................................

Statement as of March 31, 2003 of the PENN-STAR INSURANCE COMPANY

2

ASSETSCurrent Statement Date 4

1 2 3Net Admitted December 31

Nonadmitted Assets Prior Year NetAssets Assets (Cols. 1 - 2) Admitted Assets

1. Bonds................................................................................................................................... .................90,544,091 ..................................... .................90,544,091 .................83,846,036

2. Stocks:

2.1 Preferred stocks......................................................................................................... ......................707,100 ..................................... ......................707,100 ......................666,920

2.2 Common stocks......................................................................................................... ..................................... ..................................... .................................0 ......................980,813

3. Mortgage loans on real estate:

3.1 First liens.................................................................................................................... ..................................... ..................................... .................................0 .....................................

3.2 Other than first liens................................................................................................... ..................................... ..................................... .................................0 .....................................

4. Real estate:

4.1 Properties occupied by the company (less $..........0encumbrances).......................................................................................................... ..................................... ..................................... .................................0 .....................................

4.2 Properties held for the production of income (less $..........0encumbrances).......................................................................................................... ..................................... ..................................... .................................0 .....................................

4.3 Properties held for sale (less $..........0 encumbrances)............................................ ..................................... ..................................... .................................0 .....................................

5. Cash ($.....2,000,330) and short-term investments ($..........0)............................................ ...................2,000,330 ..................................... ...................2,000,330 ...................3,771,933

6. Contract loans (including $..........0 premium notes)............................................................ ..................................... ..................................... .................................0 .....................................

7. Other invested assets.......................................................................................................... ..................................... ..................................... .................................0 .....................................

8. Receivable for securities...................................................................................................... ..................................... ..................................... .................................0 .....................................

9. Aggregate write-ins for invested assets............................................................................... .................................0 .................................0 .................................0 .................................0

10. Subtotals, cash and invested assets (Lines 1 to 9)............................................................. .................93,251,521 .................................0 .................93,251,521 .................89,265,702

11. Investment income due and accrued................................................................................... ......................925,281 ..................................... ......................925,281 ...................1,112,365

12. Premiums and considerations:

12.1 Uncollected premiums and agents' balances in course of collection........................ ...................4,837,739 ......................501,164 ...................4,336,575 ...................3,810,874

12.2 Deferred premiums, agents' balances and installments booked but deferred and not yet due (including $.....373,275 earned but unbilled premiums).................. ......................414,750 ........................41,475 ......................373,275 ......................373,275

12.3 Accrued retrospective premiums............................................................................... ..................................... ..................................... .................................0 .....................................

13. Reinsurance:

13.1 Amounts recoverable from reinsurers........................................................................ ......................131,672 ..................................... ......................131,672 .....................................

13.2 Funds held by or deposited with reinsured companies............................................. ..................................... ..................................... .................................0 .....................................

13.3 Other amounts receivable under reinsurance contracts............................................ ..................................... ..................................... .................................0 .....................................

14. Amounts receivable relating to uninsured plans.................................................................. ..................................... ..................................... .................................0 .....................................

15.1 Current federal and foreign income tax recoverable and interest thereon.......................... .................................... .................................... .................................0 ....................................

15.2 Net deferred tax asset.......................................................................................................... ...................3,229,919 ...................1,061,005 ...................2,168,914 ...................2,142,442

16. Guaranty funds receivable or on deposit............................................................................. ..................................... ..................................... .................................0 .....................................

17. Electronic data processing equipment and software........................................................... ..................................... ..................................... .................................0 .....................................

18. Furniture and equipment, including health care delivery assets ($..........0)........................ ..................................... ..................................... .................................0 .....................................

19. Net adjustments in assets and liabilities due to foreign exchange rates............................. ..................................... ..................................... .................................0 .....................................

20. Receivable from parent, subsidiaries and affiliates............................................................. ...................1,008,413 ..................................... ...................1,008,413 ...................2,225,033

21. Health care ($..........0) and other amounts receivable........................................................ ..................................... ..................................... .................................0 .....................................

22. Other assets nonadmitted.................................................................................................... ..................................... ..................................... .................................0 .....................................

23. Aggregate write-ins for other than invested assets............................................................. .................................0 .................................0 .................................0 .................................0

24. Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines 10 through 23).................................................................................... ...............103,799,295 ...................1,603,644 ...............102,195,651 .................98,929,691

25. From Separate Accounts, Segregated Accounts and Protected Cell Accounts................. ..................................... ..................................... .................................0 .....................................

26. TOTALS (Lines 24 and 25).................................................................................................. ...............103,799,295 ...................1,603,644 ...............102,195,651 .................98,929,691

DETAILS OF WRITE-INS

0901. .............................................................................................................................................. ..................................... ..................................... .................................0 .....................................

0902. .............................................................................................................................................. ..................................... ..................................... .................................0 .....................................

0903. .............................................................................................................................................. ..................................... ..................................... .................................0 .....................................

0998. Summary of remaining write-ins for Line 9 from overflow page.......................................... .................................0 .................................0 .................................0 .................................0

0999. Totals (Lines 0901 thru 0903 plus 0998) (Line 9 above)..................................................... .................................0 .................................0 .................................0 .................................0

2301. .............................................................................................................................................. ..................................... ..................................... .................................0 .....................................

2302. .............................................................................................................................................. ..................................... ..................................... .................................0 .....................................

2303. .............................................................................................................................................. ..................................... ..................................... .................................0 .....................................

2398. Summary of remaining write-ins for Line 23 from overflow page........................................ .................................0 .................................0 .................................0 .................................0

2399. Totals (Lines 2301 thru 2303 plus 2398) (Line 23 above)................................................... .................................0 .................................0 .................................0 .................................0


3

LIABILITIES, SURPLUS AND OTHER FUNDS1 2

Current December 31Statement Date Prior Year

1. Losses (current accident year $.....5,335,660)........................................................................................................................... .............................28,900,555 .............................27,540,294

2. Reinsurance payable on paid losses and loss adjustment expenses........................................................................................ ................................................ ................................................

3. Loss adjustment expenses......................................................................................................................................................... .............................11,664,340 .............................11,029,270

4. Commissions payable, contingent commissions and other similar charges.............................................................................. ..................................484,280 ...............................1,155,257

5. Other expenses (excluding taxes, licenses and fees)................................................................................................................ ................................................ ................................................

6. Taxes, licenses and fees (excluding federal and foreign income taxes).................................................................................... ................................................ ................................................

7.1 Current federal and foreign income taxes (including $..........0 on realized capital gains (losses))............................................ ...............................1,086,263 ..................................321,134

7.2 Net deferred tax liability............................................................................................................................................................... ................................................ ................................................

8. Borrowed money $..........0 and interest thereon $..........0......................................................................................................... ................................................ ................................................

9. Unearned premiums (after deducting unearned premiums for ceded reinsurance of $.....14,225,805 and including warranty reserves of $..........0)................................................................................................................................................... .............................19,611,646 .............................19,739,924

10. Advance premium....................................................................................................................................................................... ................................................ ................................................

11. Dividends declared and unpaid:

11.1 Stockholders...................................................................................................................................................................... ................................................ ................................................

11.2 Policyholders...................................................................................................................................................................... ................................................ ................................................

12. Ceded reinsurance premiums payable (net of ceding commissions)......................................................................................... ...............................1,625,467 ...............................1,787,748

13. Funds held by company under reinsurance treaties.................................................................................................................. ................................................ ................................................

14. Amounts withheld or retained by company for account of others.............................................................................................. ................................................ ................................................

15. Remittances and items not allocated.......................................................................................................................................... ................................................ ................................................

16. Provision for reinsurance............................................................................................................................................................ ................................................ ................................................

17. Net adjustments in assets and liabilities due to foreign exchange rates.................................................................................... ................................................ ................................................

18. Drafts outstanding....................................................................................................................................................................... ................................................ ................................................

19. Payable to parent, subsidiaries and affiliates............................................................................................................................. ................................................ ................................................

20. Payable for securities.................................................................................................................................................................. ................................................ ................................................

21. Liability for amounts held under uninsured accident and health plans....................................................................................... ................................................ ................................................

22. Capital notes $..... and interest thereon $................................................................................................................................... ................................................ ................................................

23. Aggregate write-ins for liabilities................................................................................................................................................. .............................................0 .............................................0

24. Total liabilities excluding protected cell liabilities (Lines 1 through 23)...................................................................................... .............................63,372,551 .............................61,573,627

25. Protected cell liabilities................................................................................................................................................................ ................................................ ................................................

26. Total liabilities (Lines 24 and 25)................................................................................................................................................ .............................63,372,551 .............................61,573,627

27. Aggregate write-ins for special surplus funds............................................................................................................................. .............................................0 .............................................0

28. Common capital stock................................................................................................................................................................. ...............................4,200,000 ...............................4,200,000

29. Preferred capital stock................................................................................................................................................................ ................................................ ................................................

30. Aggregate write-ins for other than special surplus funds.......................................................................................................... .............................................0 .............................................0

31. Surplus notes.............................................................................................................................................................................. ................................................ ................................................

32. Gross paid in and contributed surplus........................................................................................................................................ .............................25,800,000 .............................25,800,000

33. Unassigned funds (surplus)........................................................................................................................................................ ...............................8,823,100 ...............................7,356,064

34. Less treasury stock, at cost:

34.1 ..........0.000 shares common (value included in Line 28 $..........0)................................................................................. ................................................ ................................................

34.2 ..........0.000 shares preferred (value included in Line 29 $..........0)................................................................................ ................................................ ................................................

35. Surplus as regards policyholders (Lines 27 to 33, less 34)........................................................................................................ .............................38,823,100 .............................37,356,064

36. TOTALS...................................................................................................................................................................................... ...........................102,195,651 .............................98,929,691

DETAILS OF WRITE-INS

2301. ..................................................................................................................................................................................................................................................... ................................................

2302. ..................................................................................................................................................................................................................................................... ................................................

2303. ..................................................................................................................................................................................................................................................... ................................................

2398. Summary of remaining write-ins for Line 23 from overflow page............................................................................................... .............................................0 .............................................0

2399. Totals (Lines 2301 thru 2303 plus 2398) (Line 23 above).......................................................................................................... .............................................0 .............................................0

2701. ..................................................................................................................................................................................................................................................... ................................................

2702. ..................................................................................................................................................................................................................................................... ................................................

2703. ..................................................................................................................................................................................................................................................... ................................................



3001. ..................................................................................................................................................................................................................................................... ................................................

3002. ..................................................................................................................................................................................................................................................... ................................................

3003. ..................................................................................................................................................................................................................................................... ................................................




4

STATEMENT OF INCOME1 2 3

Current Year Previous Year Prior Year Endedto Date to Date December 31

UNDERWRITING INCOME1. Premiums earned:

1.1 Direct.............. (written $.....9,068,577).................................................................................................................... ..................8,363,311 ..................3,040,331 ..................2,151,8451.2 Assumed........ (written $.....11,899,336).................................................................................................................. ................12,027,614 ..................8,043,734 ................40,269,3911.3 Ceded............. (written $.....9,068,577).................................................................................................................... ..................8,363,311 ..................3,040,331 ..................2,151,8451.4 Net.................. (written $.....11,899,336).................................................................................................................. ................12,027,614 ..................8,043,734 ................40,269,391DEDUCTIONS:

2. Losses incurred (current accident year $.....5,335,660): 2.1 Direct.......................................................................................................................................................................... ..................1,984,680 ..................1,128,017 ................12,086,6402.2 Assumed.................................................................................................................................................................... ..................5,853,318 ..................4,213,491 ................19,293,3252.3 Ceded......................................................................................................................................................................... ..................1,984,680 ..................1,128,017 ................12,086,6402.4 Net.............................................................................................................................................................................. ..................5,853,318 ..................4,213,491 ................19,293,325

3. Loss expenses incurred................................................................................................................................................... ..................1,850,892 ..................1,142,803 ..................5,746,3644. Other underwriting expenses incurred............................................................................................................................. ..................3,648,792 ..................2,968,728 ................14,640,3425. Aggregate write-ins for underwriting deductions............................................................................................................. ................................0 ................................0 ................................06. Total underwriting deductions (Lines 2 through 5).......................................................................................................... ................11,353,002 ..................8,325,022 ................39,680,0317. Net income of protected cells........................................................................................................................................... ................................... ................................... ...................................8. Net underwriting gain (loss) (Line 1 minus Line 6 + Line 7)............................................................................................ .....................674,612 ....................(281,288) .....................589,360

INVESTMENT INCOME9. Net investment income earned........................................................................................................................................ ..................1,181,747 ..................1,114,417 ..................4,687,299

10. Net realized capital gains (losses)................................................................................................................................... .....................311,815 ................................... .....................738,77811. Net investment gain (loss) (Lines 9 + 10)........................................................................................................................ ..................1,493,562 ..................1,114,417 ..................5,426,077

OTHER INCOME12. Net gain or (loss) from agents' or premium balances charged off

(amount recovered $..........0 amount charged off $..........0)........................................................................................... ................................... ................................... ...................................13. Finance and service charges not included in premiums................................................................................................. ................................... ................................... ...................................14. Aggregate write-ins for miscellaneous income................................................................................................................ ................................0 ................................0 ................................015. Total other income (Lines 12 through 14)........................................................................................................................ ................................0 ................................0 ................................016. Net income before dividends to policyholders and before federal and foreign income taxes (Lines 8 + 11 + 15)......... ..................2,168,174 .....................833,129 ..................6,015,43717. Dividends to policyholders............................................................................................................................................... ................................... ................................... ...................................18. Net income after dividends to policyholders but before federal and foreign income taxes (Line 16 minus 17).............. ..................2,168,174 .....................833,129 ..................6,015,43719. Federal and foreign income taxes incurred..................................................................................................................... .....................765,128 .....................377,245 ..................3,175,49020. Net income (Line 18 minus Line 19) (to Line 22)............................................................................................................. ..................1,403,046 .....................455,884 ..................2,839,947

CAPITAL AND SURPLUS ACCOUNT21. Surplus as regards policyholders, December 31 previous year...................................................................................... ................37,356,064 ................33,389,965 ................33,389,965

GAINS AND (LOSSES) IN SURPLUS22. Net income (from Line 20)............................................................................................................................................... ..................1,403,046 .....................455,884 ..................2,839,94723. Change in net unrealized capital gains or losses............................................................................................................ .......................37,520 ......................(30,607) .....................244,12724. Change in net unrealized foreign exchange capital gain (loss)....................................................................................... ................................... ................................... ...................................25. Change in net deferred income taxes.............................................................................................................................. .......................47,012 .......................57,981 ..................1,150,67326. Change in nonadmitted assets........................................................................................................................................ ......................(20,542) ........................(1,515) ....................(268,648)27. Change in provision for reinsurance................................................................................................................................ ................................... ................................... ...................................28. Change in surplus notes.................................................................................................................................................. ................................... ................................... ...................................29. Surplus (contributed to) withdrawn from protected cells.................................................................................................. ................................... ................................... ...................................30. Cumulative effect of changes in accounting principles.................................................................................................... ................................... ................................... ...................................31. Capital changes:

31.1 Paid in..................................................................................................................................................................... ................................... ................................... ...................................31.2 Transferred from surplus (Stock Dividend)............................................................................................................. ................................... ................................... ...................................31.3 Transferred to surplus............................................................................................................................................. ................................... ................................... ...................................

32. Surplus adjustments: 32.1 Paid in..................................................................................................................................................................... ................................... ................................... ...................................32.2 Transferred to capital (Stock Dividend).................................................................................................................. ................................... ................................... ...................................32.3 Transferred from capital.......................................................................................................................................... ................................... ................................... ...................................

33. Net remittances from or (to) Home Office........................................................................................................................ ................................... ................................... ...................................34. Dividends to stockholders................................................................................................................................................ ................................... ................................... ...................................35. Change in treasury stock................................................................................................................................................. ................................... ................................... ...................................36. Aggregate write-ins for gains and losses in surplus........................................................................................................ ................................0 ................................0 ................................037. Change in surplus as regards policyholders (Lines 22 through 36)................................................................................ ..................1,467,036 .....................481,743 ..................3,966,09938. Surplus as regards policyholders, as of statement date (Lines 21 plus 37).................................................................... ................38,823,100 ................33,871,708 ................37,356,064

DETAILS OF WRITE-INS0501. ............................................................................................................................................................................................................................. ................................... ...................................0502. ............................................................................................................................................................................................................................. ................................... ...................................0503. ............................................................................................................................................................................................................................. ................................... ...................................0598. Summary of remaining write-ins for Line 5 from overflow page...................................................................................... ................................0 ................................0 ................................00599. Totals (Lines 0501 thru 0503 plus 0598) (Line 5 above)................................................................................................. ................................0 ................................0 ................................01401. ............................................................................................................................................................................................................................. ................................... ...................................1402. ............................................................................................................................................................................................................................. ................................... ...................................1403. ............................................................................................................................................................................................................................. ................................... ...................................1498. Summary of remaining write-ins for Line 14 from overflow page.................................................................................... ................................0 ................................0 ................................01499. Totals (Lines 1401 thru 1403 plus 1498) (Line 14 above)............................................................................................... ................................0 ................................0 ................................03601. ............................................................................................................................................................................................................................. ................................... ...................................3602. ............................................................................................................................................................................................................................. ................................... ...................................3603. ............................................................................................................................................................................................................................. ................................... ...................................3698. Summary of remaining write-ins for Line 36 from overflow page.................................................................................... ................................0 ................................0 ................................03699. Totals (Lines 3601 thru 3603 plus 3698) (Line 36 above)............................................................................................... ................................0 ................................0 ................................0


5

CASH FLOW1 2

Current Year Prior Year Endedto Date December 31

CASH FROM OPERATIONS 1. Premiums collected net of reinsurance................................................................................................................................................ ........................11,211,354 ........................47,974,3632. Net investment income......................................................................................................................................................................... ..........................1,417,664 ..........................4,238,8903. Miscellaneous income.......................................................................................................................................................................... ............................................ ............................................4. Total (Lines 1 through 3)....................................................................................................................................................................... ........................12,629,018 ........................52,213,2535. Benefit and loss related payments....................................................................................................................................................... ..........................4,624,729 ........................15,379,3256. Net transfers to Separate, Segregated Accounts and Protected Cell Accounts.................................................................................. ............................................ ............................................7. Commissions, expenses paid and aggregate write-ins for deductions................................................................................................ ..........................5,535,591 ........................14,079,0838. Dividends paid to policyholders............................................................................................................................................................ ............................................ ............................................9. Federal and foreign income taxes paid (recovered) $..........0 net tax on capital gains (losses).......................................................... ............................................ ..........................3,098,431

10. Total (Lines 5 through 9)....................................................................................................................................................................... ........................10,160,320 ........................32,556,83911. Net cash from operations (Line 4 minus Line 10)................................................................................................................................. ..........................2,468,698 ........................19,656,414

CASH FROM INVESTMENTS 12. Proceeds from investments sold, matured or repaid:

12.1 Bonds.......................................................................................................................................................................................... ..........................8,663,152 ........................23,832,60912.2 Stocks......................................................................................................................................................................................... .............................889,232 ..........................1,090,92712.3 Mortgage loans........................................................................................................................................................................... ............................................ ............................................12.4 Real estate.................................................................................................................................................................................. ............................................ ............................................12.5 Other invested assets................................................................................................................................................................. ............................................ ............................................12.6 Net gains or (losses) on cash and short-term investments........................................................................................................ ............................................ ............................................12.7 Miscellaneous proceeds............................................................................................................................................................. ............................................ ............................................12.8 Total investment proceeds (Lines 12.1 to 12.7)......................................................................................................................... ..........................9,552,384 ........................24,923,536

13. Cost of investments acquired (long-term only): 13.1 Bonds.......................................................................................................................................................................................... ........................15,009,306 ........................44,577,34713.2 Stocks......................................................................................................................................................................................... ............................................ ............................................13.3 Mortgage loans........................................................................................................................................................................... ............................................ ............................................13.4 Real estate.................................................................................................................................................................................. ............................................ ............................................13.5 Other invested assets................................................................................................................................................................. ............................................ ............................................13.6 Miscellaneous applications......................................................................................................................................................... ............................................ ............................................13.7 Total investments acquired (Lines 13.1 to 13.6)........................................................................................................................ ........................15,009,306 ........................44,577,347

14. Net increase (decrease) in policy loans and premium notes............................................................................................................... ............................................ ............................................15. Net cash from investments (Line 12.8 minus Lines 13.7 and 14)........................................................................................................ .........................(5,456,921) .......................(19,653,811)

CASH FROM FINANCING AND MISCELLANEOUS SOURCES 16. Cash provided (applied):

16.1 Surplus notes, capital notes....................................................................................................................................................... ............................................ ............................................16.2 Capital and paid in surplus, less treasury stock......................................................................................................................... ............................................ ............................................16.3 Borrowed funds received............................................................................................................................................................ ............................................ ............................................16.4 Net deposits on deposit-type contracts and other insurance liabilities...................................................................................... ............................................ ............................................16.5 Dividends to stockholders........................................................................................................................................................... ............................................ ............................................16.6 Other cash provided (applied).................................................................................................................................................... ..........................1,216,620 .............................533,312

17. Net cash from financing and miscellaneous sources (Lines 16.1 to 16.4 minus Line 16.5 plus Line 16.6)........................................ ..........................1,216,620 .............................533,312

RECONCILIATION OF CASH AND SHORT-TERM INVESTMENTS 18. Net change in cash and short-term investments (Line 11 plus Line 15 plus Line 17)......................................................................... .........................(1,771,603) .............................535,91519. Cash and short-term investments:

19.1 Beginning of year........................................................................................................................................................................ ..........................3,771,933 ..........................3,236,01819.2 End of period (Line 18 plus Line 19.1)....................................................................................................................................... ..........................2,000,330 ..........................3,771,933


6

17 C. Wash Sales - None

NOTES TO FINANCIAL STATEMENTS


7

GENERAL INTERROGATORIES (Responses to these interrogatories should be based on changes that have occurred since prior year end unless otherwise noted)

PART 1 - COMMON INTERROGATORIES GENERAL

1.1 Did the reporting entity implement any significant accounting policy changes which would require disclosure in the Notes to the Financial Statements? Yes [ ] No [ X ]

1.2 If yes, explain:....

2.1 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 ]

2.2 If yes, has the report been filed with the domiciliary state? Yes [ ] No [ ]

3.1 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 ]

3.2 If yes, date of change: ..........................................If not previously filed, furnish herewith a certified copy of the instrument as amended.

4. Have there been any substantial changes in the organizational chart since the prior quarter end? Yes [ ] No [ X ]If yes, attach an organizational chart.

5.1 Has the reporting entity been a party to a merger or consolidation during the period covered by this statement? Yes [ ] No [ X ]5.2 If yes, provide name of entity, NAIC Company Code, and state of domicile (use two letter state abbreviation) for any entity that ceased to exist

as a result of the merger or consolidation. 1 2 3

NAIC State ofName of Entity Company Code Domicile

6. If the reporting entity is subject to a management agreement, including third-party administrator(s), managing general agent(s), attorney-in-fact, or similar agreement, have there been any significant changes regarding the terms of the agreement or principals involved? Yes [ ] No [ X ] N/A [ ]If yes, attach an explanation.

7.1 State as of what date the latest financial examination of the reporting entity was made or is being made. ..........12/31/1998..............

7.2 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. ..........12/31/1998..............

7.3 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). ..........12/15/1999..............

7.4 By what department or departments?....................................... Commonwealth of Pennsylvania Insurance Department

8.1 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? (You need not report an action, either formal or informal, if a confidentiality clause is part of the agreement.) Yes [ ] No [ X ]

8.2 If yes, give full information:

9.1 Is the company a subsidiary of a bank holding company regulated by the Federal Reserve Board? Yes [ ] No [ X ]

9.2 If response to 9.1 is yes, please identify the name of the bank holding company.

9.3 Is the company affiliated with one or more banks, thrifts or securities firms? Yes [ ] No [ X ]9.4 If the response to 9.3 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 Office of Thrift Supervision (OTS), the Federal Deposit Insurance Corporation (FDIC) and the Securities Exchange Commission (SEC)] and identify the affiliate's primary federal regulator].

1 2 3 4 5 6 7Affiliate Name Location (City, State) FRB OCC OTS FDIC SEC

..................................................................... .................................. .................................. .......................... .......................... .......................... ..........................................


8

GENERAL INTERROGATORIES (continued) (Responses to these interrogatories should be based on changes that have occurred since prior year end unless otherwise noted)

INVESTMENT 10.1 Has there been any change in the reporting entity's own preferred or common stock? Yes [ ] No [ X ]10.2 If yes, explain:....

11.1 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.) Yes [ ] No [ X ]

11.2 If yes, give full and complete information relating thereto:

12. Amount of real estate and mortgages held in other invested assets in Schedule BA: ..........................................

13. Amount of real estate and mortgages held in short-term investments: ..........................................

14.1 Does the reporting entity have any investments in parent, subsidiaries and affiliates? Yes [ ] No [ X ]14.2 If yes, please complete the following: 1 2

Prior Year-End Current QuarterStatement Value Statement Value

14.21 Bonds...................................................................................................................................................... ...................................................... ......................................................................14.22 Preferred Stock....................................................................................................................................... ...................................................... ......................................................................14.23 Common Stock....................................................................................................................................... ...................................................... ......................................................................14.24 Short-Term Investments......................................................................................................................... ...................................................... ......................................................................14.25 Mortgages, Loans or Real Estate........................................................................................................... ...................................................... ......................................................................14.26 All Other.................................................................................................................................................. ...................................................... ......................................................................14.27 Total Investment in Parent, Subsidiaries and Affiliates (Subtotal Lines 14.21 to 14.26)....................... $.................................................0 $.................................................................014.28 Total Investment in Parent included in Lines 14.21 to 14.26 above .................................................. ...................................................... ......................................................................14.29 Receivable from Parent not included in Lines 14.21 to 14.26 above..................................................... ...................................................... ......................................................................

15.1 Has the reporting entity entered into any hedging transactions reported on Schedule DB? Yes [ ] No [ X ]15.2 If yes, has a comprehensive description of the hedging program been made available to the domiciliary state? Yes [ ] No [ X ]

If no, attach a description with this statement.

16. Excluding items in Schedule E, 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 Part 1-General, Section IV. H-Custodial or Safekeeping Agreements of the NAIC Financial Condition Examiners Handbook? Yes [ X ] No [ ]16.1 For all agreements that comply with the requirements of the NAIC Financial Condition Examiners Handbook,

complete the following: 1 2

Name of Custodian(s) Custodian AddressPNC Bank N.A 620 Liberty Avenue, Pittsburgh, PA 15222

16.2 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.

1 2 3Name(s) Location(s) Complete Explanation(s)

16.3 Have there been any changes, including name changes, in the custodian(s) identified in 16.1 during the current quarter? Yes [ ] No [ X ]16.4 If yes, give full and complete information relating thereto:

1 2 3 4Old Custodian New Custodian Date of Change Reason

16.5 Identify all investment advisors, brokers/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:

1 2 3Central Registration Depository Name(s) Address

IARD/CRD Number - 105900 General Re New England Asset Mgt. 76 Batterson Rd. Farmington CT 06032


9

GENERAL INTERROGATORIES (continued) PART 2

PROPERTY & CASUALTY INTERROGATORIES 1. If the reporting entity is a member of a pooling arrangement, did the agreement or the reporting entity's participation change? Yes [ ] No [ X ] N/A [ ]

If yes, attach an explanation.

2. Has the reporting entity reinsured any risk with any other 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.

3.1 Have any of the reporting entity's primary reinsurance contracts been canceled? Yes [ ] No [ X ]3.2 If yes, give full and complete information thereto:

4.1 Are any of the liabilities for unpaid losses and loss adjustment expenses other than certain workers' compensation liabilities 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 ]

4.2 If yes, complete the following schedule: 1 2 3 Total Discount Discount Taken During Period

4 5 6 7 8 9 10 11Maximum Disc. Unpaid Unpaid Unpaid Unpaid

Line of Business Interest Rate Losses LAE IBNR Total Losses LAE IBNR Total.............................................. ................... ....................... ....................... ....................... ....................... ....................0 ....................... ....................... ....................... ....................0Total...................................... ....XXX....... ........XXX........ ....................0 ....................0 ....................0 ....................0 ....................0 ....................0 ....................0 ....................0


10

SCHEDULE A - VERIFICATION1 2

Prior Year EndedYear to Date December 31

1. Book/adjusted carrying value, December 31 of prior year.................................................................................... .........................................................0 ............................................................2. Increase (decrease) by adjustment....................................................................................................................... ............................................................ ............................................................3. Cost of acquired..................................................................................................................................................... ............................................................ ............................................................4. Cost of additions to and permanent improvements............................................................................................... ............................................................ ............................................................5. Total profit (loss) on sales...................................................................................................................................... ............................................................ ............................................................6. Increase (decrease) by foreign exchange adjustment.......................................................................................... ............................................................ ............................................................7. Amount received on sales..................................................................................................................................... ............................................................ ............................................................8. Book/adjusted carrying value at end of current period.......................................................................................... .........................................................0 .........................................................09. Total valuation allowance...................................................................................................................................... ............................................................ ............................................................

10. Subtotal (Lines 8 plus 9)........................................................................................................................................ .........................................................0 .........................................................011. Total nonadmitted amounts................................................................................................................................... ............................................................ ............................................................12. Statement value, current period (Page 2, real estate lines, current period).......................................................... .........................................................0 .........................................................0

SCHEDULE B - VERIFICATION1 2


1. Book value/recorded investment excluding accrued interest on mortgages owned, December 31 of prior year...................................................................................................... .........................................................0 ............................................................

2. Amount loaned during period: 2.1 Actual cost at time of acquisitions.................................................................................................................. ............................................................ ............................................................2.2 Additional investment made after acquisitions............................................................................................... ............................................................ ............................................................

3. Accrual of discount and mortgage interest points and commitment fees.............................................................. ............................................................ ............................................................4. Increase (decrease) by adjustment....................................................................................................................... ............................................................ ............................................................5. Total profit (loss) on sale........................................................................................................................................ ............................................................ ............................................................6. Amounts paid on account or in full during the period............................................................................................ ............................................................ ............................................................7. Amortization of premium........................................................................................................................................ ............................................................ ............................................................8. Increase (decrease) by foreign exchange adjustment.......................................................................................... ............................................................ ............................................................9. Book value/recorded investment excluding accrued interest on

mortgages owned at end of current period............................................................................................................ .........................................................0 .........................................................010. Total valuation allowance...................................................................................................................................... ............................................................ ............................................................11. Subtotal (Lines 9 plus 10)...................................................................................................................................... .........................................................0 .........................................................012. Total nonadmitted amounts................................................................................................................................... ............................................................ ............................................................13. Statement value of mortgages owned at end of current period............................................................................ .........................................................0 .........................................................0

SCHEDULE BA - VERIFICATIONOther Invested Assets Included in Schedule BA

1 2Prior Year Ended

Year to Date December 311. Book/adjusted carrying value of long-term invested assets

owned, December 31 of prior year........................................................................................................................ .........................................................0 ............................................................2. Cost of acquisitions during period:

2.1 Actual cost at time of acquisitions.................................................................................................................. ............................................................ ............................................................2.2 Additional investment made after acquisitions............................................................................................... ............................................................ ............................................................

3. Accrual of discount................................................................................................................................................. ............................................................ ............................................................4. Increase (decrease) by adjustment....................................................................................................................... ............................................................ ............................................................5. Total profit (loss) on sale........................................................................................................................................ ............................................................ ............................................................6. Amounts paid on account or in full during the period............................................................................................ ............................................................ ............................................................7. Amortization of premium........................................................................................................................................ ............................................................ ............................................................8. Increase (decrease) by foreign exchange adjustment.......................................................................................... ............................................................ ............................................................9. Book/adjusted carrying value of long-term invested assets

at end of current period.......................................................................................................................................... .........................................................0 .........................................................010. Total valuation allowance...................................................................................................................................... ............................................................ ............................................................11. Subtotal (Lines 9 plus 10)...................................................................................................................................... .........................................................0 .........................................................012. Total nonadmitted amounts................................................................................................................................... ............................................................ ............................................................13. Statement value of long-term invested assets at end of current period................................................................ .........................................................0 .........................................................0

SCHEDULE D - VERIFICATION1 2


1. Book/adjusted carrying value of bonds and stocks, December 31 of prior year................................................... .........................................85,493,769 .........................................64,694,7332. Cost of bonds and stocks acquired....................................................................................................................... .........................................15,009,307 .........................................44,577,3473. Accrual of discount................................................................................................................................................. ................................................76,052 ...........................................................4. Increase (decrease) by adjustment....................................................................................................................... ................................................37,521 .............................................(136,105)5. Increase (decrease) by foreign exchange adjustment.......................................................................................... ............................................................ ............................................................6. Total profit (loss) on disposal................................................................................................................................. ..............................................311,815 ...........................................1,281,3297. Consideration for bonds and stocks disposed of................................................................................................... ...........................................9,552,386 .........................................24,923,5368. Amortization of premium........................................................................................................................................ ..............................................124,887 ...........................................................9. Book/adjusted carrying value, current period........................................................................................................ .........................................91,251,191 .........................................85,493,769

10. Total valuation allowance...................................................................................................................................... ............................................................ ............................................................11. Subtotal (Lines 9 plus 10)...................................................................................................................................... .........................................91,251,191 .........................................85,493,76912. Total nonadmitted amounts................................................................................................................................... ............................................................ ............................................................13. Statement value (Lines 11 minus 12).................................................................................................................... .........................................91,251,191 .........................................85,493,769

Statement as of March 31, 2003 of thePENN-STAR INSURANCE COMPANY

11

SCHEDULE D - PART 1BShowing the Acquisitions, Dispositions and Non-Trading Activity

During the Current Quarter for all Bonds and Preferred Stock by Rating Class1 2 3 4 5 6 7 8

Book/Adjusted Carrying Acquisitions Dispositions Non-Trading Activity Book/Adjusted Carrying Book/Adjusted Carrying Book/Adjusted Carrying Book/Adjusted Carrying Value Beginning During During During Value End of Value End of Value End of Value December 31

of Current Quarter Current Quarter Current Quarter Current Quarter First Quarter Second Quarter Third Quarter Prior Year

BONDS

1. Class 1............................................................................................................. ........................70,539,662 ........................15,009,307 ..........................8,261,076 ..............................(41,380) ........................77,246,513 .......................................... .......................................... ........................70,539,662

2. Class 2............................................................................................................. ........................11,411,375 .......................................... ......................................... ...............................(8,796) ........................11,402,579 .......................................... .......................................... ........................11,411,375

3. Class 3............................................................................................................. .............................965,000 .......................................... ......................................... .......................................... .............................965,000 .......................................... .......................................... .............................965,000

4. Class 4............................................................................................................. .............................930,000 .......................................... ......................................... .......................................... .............................930,000 .......................................... .......................................... .............................930,000

5. Class 5............................................................................................................. .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... ..........................................

6. Class 6............................................................................................................. .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... ..........................................

7. Total Bonds....................................................................................................... ........................83,846,036 ........................15,009,307 ..........................8,261,076 ..............................(50,176) ........................90,544,091 .......................................0 .......................................0 ........................83,846,036

PREFERRED STOCK

8. Class 1............................................................................................................. .............................497,000 .......................................... .......................................... .................................9,700 .............................506,700 .......................................... .......................................... ..........................................

9. Class 2............................................................................................................. .............................169,920 .......................................... .......................................... ...............................30,480 .............................200,400 .......................................... .......................................... ..........................................

10. Class 3............................................................................................................. .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... ..........................................

11. Class 4............................................................................................................. .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... ..........................................

12. Class 5............................................................................................................. .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... ..........................................

13. Class 6............................................................................................................. .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... ..........................................

14. Total Preferred Stock......................................................................................... .............................666,920 .......................................0 .......................................0 ...............................40,180 .............................707,100 .......................................0 .......................................0 .......................................0

15. Total Bonds and Preferred Stock....................................................................... ........................84,512,956 ........................15,009,307 ..........................8,261,076 ...............................(9,996) ........................91,251,191 .......................................0 .......................................0 ........................83,846,036


12, 13, 14, 15

Sch. DA-Part 1NONE

Sch. DA-Part 2-VerificationNONE

Sch. DB-Part F-Section 1NONE

Sch. DB-Part F-Section 2NONE

Sch. FNONE


16

SCHEDULE T - EXHIBIT OF PREMIUMS WRITTENCurrent Year to Date - Allocated by States and Territories

1 Direct Premiums Written Direct Losses Paid (Deducting Salvage) Direct Losses UnpaidIs Insurer 2 3 4 5 6 7Licensed? Current Year Prior Year Current Year Prior Year Current Year Prior Year

States, Etc. (Yes or No) to Date to Date to Date to Date to Date to Date1. Alabama.................................AL .......NO........ ..................166,323 ..................308,848 ....................20,225 ....................31,833 ..................242,044 ..................141,0932. Alaska...................................AK .......NO........ ....................31,407 ......................4,210 ....................29,000 ................................ ....................12,283 ......................1,0343. Arizona..................................AZ .......NO........ ..................159,459 ..................103,667 ............................... ................................ ..................139,926 ....................61,9644. Arkansas...............................AR .......NO........ ..................370,676 ..................161,846 ....................12,704 ....................10,717 ..................231,298 ....................74,8985. California...............................CA .......NO........ ..................100,570 .....................(3,614) ..................117,022 ....................70,317 ....................99,657 ..................179,4956. Colorado...............................CO .......NO........ ..................465,974 ..................141,696 ......................8,525 ......................2,552 ..................475,294 ....................77,5247. Connecticut...........................CT .......NO........ ................................ ................................ ............................... ................................ ............................... ................................8. Delaware...............................DE .......NO........ ....................86,509 ....................64,550 ............................... .........................371 ....................54,637 ....................18,2139. District of Columbia...............DC .......NO........ ................................ ................................ ............................... ................................ ............................... ................................

10. Florida....................................FL .......NO........ ................................ ................................ ............................... ................................ ............................... ................................11. Georgia.................................GA .......YES...... ....................18,461 ....................21,446 ......................6,565 ....................38,331 ..................111,918 ...............1,143,53112. Hawaii....................................HI .......NO........ ....................79,824 ....................31,617 ............................... ................................ ....................40,062 ......................8,91813. Idaho......................................ID .......NO........ ....................44,236 ....................35,402 ......................2,338 ................................ ....................40,383 ....................12,06314. Illinois......................................IL .......NO........ ...............1,478,973 ..................260,520 ..................203,576 ....................16,815 ..................786,581 ..................101,21715. Indiana...................................IN .......NO........ ..................203,743 ..................215,040 ....................17,096 ....................29,808 ..................492,744 ....................78,15316. Iowa........................................IA .......NO........ ....................29,904 ....................69,765 ............................... ................................ ....................32,806 ....................24,98017. Kansas..................................KS .......NO........ ..................265,433 ....................96,878 ....................39,855 ......................2,862 ..................424,486 ....................74,13418. Kentucky...............................KY .......NO........ ..................748,780 ..................439,828 ....................40,850 ..................116,638 ..................805,746 ..................378,37719. Louisiana...............................LA .......NO........ ................................ ................................ ............................... ................................ ............................... ................................20. Maine....................................ME .......NO........ ................................ ................................ ............................... ................................ ............................... ................................21. Maryland...............................MD .......YES...... ....................41,956 ....................47,238 ......................6,783 ......................5,402 ....................50,020 ....................45,68222. Massachusetts......................MA .......NO........ ................................ ................................ ............................... ................................ ............................... ................................23. Michigan.................................MI .......NO........ ..................157,929 ..................115,258 ......................6,020 ................................ ..................206,858 ....................41,50924. Minnesota.............................MN .......NO........ ..................305,637 ..................186,947 ..................509,113 ................................ ..................249,951 ....................64,83825. Mississippi............................MS .......NO........ ..................168,172 ..................137,884 ......................7,773 ....................49,341 ..................230,809 ..................133,61526. Missouri................................MO .......NO........ ..................413,953 ..................596,611 ....................34,077 ..................107,158 ..................297,443 ..................137,02127. Montana................................MT .......NO........ ....................55,204 ....................22,376 ............................... ......................1,909 ....................15,681 ......................4,62428. Nebraska...............................NE .......NO........ ....................84,943 ....................47,774 ............................... ................................ ....................66,232 ....................30,54729. Nevada..................................NV .......NO........ ..................415,485 ....................11,673 ....................35,071 ................................ ..................123,513 ....................11,20930. New Hampshire.....................NH .......NO........ ................................ ................................ ............................... ................................ ............................... ................................31. New Jersey............................NJ .......NO........ ................................ ................................ ............................... ................................ ............................... ................................32. New Mexico..........................NM .......NO........ ....................83,048 ..................240,819 ..................500,440 .........................453 ..................380,415 ..................194,46833. New York..............................NY .......NO........ ..................979,222 ..................340,862 ....................47,338 ....................12,983 ..................904,722 ..................112,27434. North Carolina.......................NC .......NO........ ..........................(44) .........................460 ............................... ................................ ......................1,294 ......................3,99235. North Dakota.........................ND .......NO........ ....................20,256 ......................7,748 ............................... ................................ ....................19,817 ....................11,81636. Ohio......................................OH .......NO........ ..................589,962 ..................214,242 ....................99,359 ......................1,735 ..................354,496 ..................418,65337. Oklahoma..............................OK .......YES...... ......................2,241 ........................(461) ............................... ................................ ......................6,109 .........................44538. Oregon..................................OR .......NO........ ....................28,486 ....................37,736 ............................... ................................ ....................64,689 ....................28,41339. Pennsylvania.........................PA .......YES...... ......................2,744 ......................2,877 ............................... ................................ ......................9,287 ......................2,11940. Rhode Island..........................RI .......NO........ ................................ ................................ ............................... ................................ ............................... ................................41. South Carolina.......................SC .......YES...... .....................(1,138) ......................1,729 ............................... ................................ ........................(589) ......................4,99842. South Dakota.........................SD .......NO........ ......................1,514 .....................(1,943) ............................... ................................ .........................769 ......................2,02343. Tennessee.............................TN .......NO........ ..................718,660 ..................820,516 ..................128,070 ..................216,108 ...............1,435,008 ..................699,00444. Texas....................................TX .......YES...... ................................ ................................ ............................... ................................ ............................... ................................45. Utah......................................UT .......NO........ ..................172,942 ....................62,933 ......................1,500 ......................3,500 ....................84,078 ....................28,89846. Vermont.................................VT .......NO........ ................................ ................................ ............................... ................................ ............................... ................................47. Virginia..................................VA .......NO........ ........................(259) ......................7,066 ............................... ................................ ......................1,422 ......................1,92148. Washington...........................WA .......NO........ ..................370,303 ..................156,008 ....................16,114 ....................27,212 ..................299,551 ..................108,60649. West Virginia........................WV .......NO........ ................................ .....................(2,013) ............................... ................................ ............................... ........................(642)50. Wisconsin..............................WI .......NO........ ..................141,961 ....................92,033 ....................12,302 ......................1,221 ..................237,706 ....................22,50751. Wyoming..............................WY .......YES...... ....................65,040 ....................50,748 ............................... ................................ ....................27,076 ....................21,88352. American Samoa...................AS .......NO........ ................................ ................................ ................................ ................................ ................................ ................................53. Guam....................................GU .......NO........ ................................ ................................ ................................ ................................ ................................ ................................54. Puerto Rico...........................PR .......NO........ ................................ ................................ ................................ ................................ ................................ ................................55. US Virgin Islands.....................VI .......NO........ ................................ ................................ ................................ ................................ ................................ ................................56. Canada.................................CN .......NO........ ................................ ................................ ................................ ................................ ................................ ................................57. Aggregate Other Alien............OT .......XXX...... .............................0 .............................0 .............................0 .............................0 .............................0 .............................058. Totals......................................... (a).............7 ...............9,068,489 ...............5,148,820 ...............1,901,715 ..................747,266 ...............9,056,222 ...............4,506,017

DETAILS OF WRITE-INS5701. .................................................. .......XXX...... ................................ ................................ ................................ ................................ ................................ ................................5702. .................................................. .......XXX...... ................................ ................................ ................................ ................................ ................................ ................................5703. .................................................. .......XXX...... ................................ ................................ ................................ ................................ ................................ ................................5798. Summary of remaining write-ins

for Line 57 from overflow page.... .......XXX...... .............................0 .............................0 .............................0 .............................0 .............................0 .............................05799. Totals (Lines 5701 thru 5703 +

Line 5798) (Line 57 above)......... .......XXX...... .............................0 .............................0 .............................0 .............................0 .............................0 .............................0(a) Insert the number of yes responses except for Canada and Other Alien.


17

SCHEDULE Y – INFORMATION CONCERNING ACTIVITIES OF INSURER MEMBERS OF A HOLDING COMPANY GROUPPART 1 – ORGANIZATIONAL CHART


18

PART 1 - LOSS EXPERIENCECurrent Year to Date 4

1 2 3 Prior Year to DateDirect Premiums Direct Losses Direct Direct Loss

Lines of Business Earned Incurred Loss Percentage Percentage1. Fire.......................................................................................................... ...........................423,316 ............................(38,115) ..............................(9.0) .............................48.52. Allied lines............................................................................................... ...........................153,961 .............................90,317 .............................58.7 .............................36.93. Farmowners multiple peril........................................................................ ......................................... ......................................... ...............................0.0 .....................................4. Homeowners multiple peril....................................................................... ......................................... ......................................... ...............................0.0 .....................................5. Commercial multiple peril......................................................................... ........................5,649,368 ........................1,292,502 .............................22.9 .............................38.46. Mortgage guaranty................................................................................... ......................................... ......................................... ...............................0.0 .....................................8. Ocean marine.......................................................................................... ......................................... ......................................... ...............................0.0 .....................................9. Inland marine........................................................................................... ...........................142,585 ...........................134,189 .............................94.1 .............................66.3

10. Financial guaranty.................................................................................... ......................................... ......................................... ...............................0.0 .....................................11.1. Medical malpractice-occurrence............................................................... ......................................... ......................................... ...............................0.0 .....................................11.2. Medical malpractice-claims made............................................................. ......................................... ......................................... ...............................0.0 .....................................

12. Earthquake.............................................................................................. ......................................... ......................................... ...............................0.0 .....................................13. Group accident and health........................................................................ ......................................... ......................................... ...............................0.0 .....................................14. Credit accident and health........................................................................ ......................................... ......................................... ...............................0.0 .....................................15. Other accident and health........................................................................ ......................................... ......................................... ...............................0.0 .....................................16. Workers' compensation............................................................................ ......................................... ......................................... ...............................0.0 .....................................

17.1 Other liability-occurrence.......................................................................... ........................1,862,316 ...........................460,715 .............................24.7 .............................19.917.2 Other liability-claims made....................................................................... ......................................... ......................................... ...............................0.0 .....................................18.1 Products liability-occurrence..................................................................... ...........................118,060 ...........................102,107 .............................86.5 ...........................108.818.2 Products liability-claims made.................................................................. ......................................... ......................................... ...............................0.0 .....................................

19.1, 19.2 Private passenger auto liability......................................................... ......................................... .....................................(6) ...............................0.0 .....................................19.3, 19.4 Commercial auto liability.................................................................. .............................10,884 ............................(55,783) ..........................(512.5) ..........................(526.9)

21. Auto physical damage.............................................................................. ...............................2,821 ..............................(1,246) ............................(44.2) .......................(2,290.0)22. Aircraft (all perils)..................................................................................... ......................................... ......................................... ...............................0.0 .....................................23. Fidelity..................................................................................................... ......................................... ......................................... ...............................0.0 .....................................24. Surety...................................................................................................... ......................................... ......................................... ...............................0.0 .....................................26. Burglary and theft..................................................................................... ......................................... ......................................... ...............................0.0 .....................................27. Boiler and machinery................................................................................ ......................................... ......................................... ...............................0.0 .....................................28. Credit...................................................................................................... ......................................... ......................................... ...............................0.0 .....................................29. International............................................................................................. ......................................... ......................................... ...............................0.0 .....................................30. Reinsurance-nonproportional assumed property....................................... ...................XXX............... ...................XXX............... ...................XXX........... ...................XXX...........31. Reinsurance-nonproportional assumed liability.......................................... ...................XXX............... ...................XXX............... ...................XXX........... ...................XXX...........32. Reinsurance-nonproportional assumed financial lines............................... ...................XXX............... ...................XXX............... ...................XXX........... ...................XXX...........33. Aggregate write-ins for other lines of business.......................................... ......................................0 ......................................0 ...............................0.0 ...............................0.034. Totals...................................................................................................... ........................8,363,311 ........................1,984,680 .............................23.7 .............................37.1

DETAILS OF WRITE-INS3301. ................................................................................................................ ......................................... ......................................... ...............................0.0 .....................................3302. ................................................................................................................ ......................................... ......................................... ...............................0.0 .....................................3303. ................................................................................................................ ......................................... ......................................... ...............................0.0 .....................................3398. Sum. of remaining write-ins for Line 33 from overflow page....................... ......................................0 ......................................0 ...............................0.0 ...............................0.03399. Totals (Lines 3301 thru 3303 plus 3398) (Line 33)..................................... ......................................0 ......................................0 ...............................0.0 ...............................0.0

PART 2 - DIRECT PREMIUMS WRITTEN1 2 3

Current Current Prior YearQuarter Year to Date Year to Date

1. Fire.......................................................................................................... ..........................................461,416 ..........................................461,416 ..........................................270,5662. Allied lines............................................................................................... ..........................................152,127 ..........................................152,127 ..........................................109,4663. Farmowners multiple peril........................................................................ ....................................................... ....................................................... .......................................................4. Homeowners multiple peril....................................................................... ....................................................... ....................................................... .......................................................5. Commercial multiple peril......................................................................... .......................................6,026,249 .......................................6,026,249 .......................................3,333,0626. Mortgage guaranty................................................................................... ....................................................... ....................................................... .......................................................8. Ocean marine.......................................................................................... ....................................................... ....................................................... .......................................................9. Inland marine........................................................................................... ..........................................115,839 ..........................................115,839 ...........................................24,935

10. Financial guaranty.................................................................................... ....................................................... ....................................................... .......................................................11.1. Medical malpractice-occurrence............................................................... ....................................................... ....................................................... .......................................................11.2. Medical malpractice-claims made............................................................. ....................................................... ....................................................... .......................................................

12. Earthquake.............................................................................................. ....................................................... ....................................................... .......................................................13. Group accident and health........................................................................ ....................................................... ....................................................... .......................................................14. Credit accident and health........................................................................ ....................................................... ....................................................... .......................................................15. Other accident and health........................................................................ ....................................................... ....................................................... .......................................................16. Workers' compensation............................................................................ ....................................................... ....................................................... .......................................................

17.1. Other liability-occurrence.......................................................................... .......................................2,171,596 .......................................2,171,596 .......................................1,346,82817.2. Other liability-claims made....................................................................... ....................................................... ....................................................... .......................................................18.1. Products liability-occurrence..................................................................... ..........................................139,939 ..........................................139,939 ...........................................86,46118.2. Products liability-claims made.................................................................. ....................................................... ....................................................... .......................................................19.1, 19.2 Private passenger auto liability......................................................... ....................................................... ....................................................... .......................................................19.3, 19.4 Commercial auto liability.................................................................. .............................................1,411 .............................................1,411 ..........................................(22,498)

21. Auto physical damage.............................................................................. ....................................................... ....................................................... .......................................................22. Aircraft (all perils)..................................................................................... ....................................................... ....................................................... .......................................................23. Fidelity..................................................................................................... ....................................................... ....................................................... .......................................................24. Surety...................................................................................................... ....................................................... ....................................................... .......................................................26. Burglary and theft..................................................................................... ....................................................... ....................................................... .......................................................27. Boiler and machinery................................................................................ ....................................................... ....................................................... .......................................................28. Credit...................................................................................................... ....................................................... ....................................................... .......................................................29. International............................................................................................. ....................................................... ....................................................... .......................................................30. Reinsurance-nonproportional assumed property....................................... .........................XXX....................... .........................XXX....................... .........................XXX.......................31. Reinsurance-nonproportional assumed liability.......................................... .........................XXX....................... .........................XXX....................... .........................XXX.......................32. Reinsurance-nonproportional assumed financial lines............................... .........................XXX....................... .........................XXX....................... .........................XXX.......................33. Aggregate write-ins for other lines of business.......................................... ....................................................0 ....................................................0 ....................................................034. Totals...................................................................................................... .......................................9,068,577 .......................................9,068,577 .......................................5,148,820

DETAILS OF WRITE-INS3301. ................................................................................................................ ....................................................... ....................................................... .......................................................3302. ................................................................................................................ ....................................................... ....................................................... .......................................................3303. ................................................................................................................ ....................................................... ....................................................... .......................................................3398. Sum. of remaining write-ins for Line 33 from overflow page....................... ....................................................0 ....................................................0 ....................................................03399. Totals (Lines 3301 thru 3303 plus 3398) (Line 33)..................................... ....................................................0 ....................................................0 ....................................................0


19

PART 3 (000 omitted)LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES SCHEDULE

1 2 3 4 5 6 7 8 9 10 11 12 13Q.S. Date Known Q.S. Date Known Prior Year-End Known Prior Year-End Prior Year-End

Total Prior 2003 2003 Case Loss and Case Loss and LAE Total Q.S. Case Loss and LAE IBNR Loss and LAE Total Loss and LAEPrior Year-End Prior Year-End Year-End Loss and Loss and LAE Loss and LAE Total 2003 LAE Reserves on Reserves on Claims Q.S. Date Loss and LAE Reserves Developed Reserves Developed Reserves Developed

Years in Which Known Case IBNR LAE Reserves Payments on Claims Payments on Claims Loss and Claims Reported and Reported or Reopened IBNR Reserves (Savings)/Deficiency (Savings)/Deficiency (Savings)/DeficiencyLosses Loss and LAE Loss and LAE (a) Reported as of Prior Unreported as of LAE Payments Open as of Prior Subsequent to Loss and LAE (b) (Cols. 4 + 7 (Cols. 5 + 8 + 9 (c)

Occurred Reserves Reserves (Cols. 1 + 2) Year-End Prior Year-End (Cols. 4 + 5) Year-End Prior Year-End Reserves (Cols. 7 + 8 + 9) minus Col. 1) minus Col. 2) (Cols. 11 + 12)

1. 2000 + Prior ......................4,733 ......................7,466 ....................12,199 .......................2,085 .............................9 ......................2,094 .......................3,980 .............................98 ......................6,638 ....................10,716 .........................1,332 .........................(721) ..........................611

2. 2001 ......................2,160 ......................6,781 ......................8,941 ..........................740 .............................4 .........................744 .......................1,903 ............................112 ......................6,233 ......................8,248 ............................483 .........................(432) ............................51

3. Subtotals2001 + Prior ......................6,893 ....................14,247 ....................21,140 .......................2,825 ............................13 ......................2,838 .......................5,883 ............................210 ....................12,871 ....................18,964 .........................1,815 ......................(1,153) ..........................662

4. 2002 ......................4,191 ....................13,239 ....................17,430 .......................2,038 ..........................163 ......................2,201 .......................3,296 ............................375 ....................11,008 ....................14,679 .........................1,143 ......................(1,693) .........................(550)

5. Subtotals2002 + Prior ....................11,084 ....................27,486 ....................38,570 .......................4,863 ..........................176 ......................5,039 .......................9,179 ............................585 ....................23,879 ....................33,643 .........................2,958 ......................(2,846) ..........................112

6. 2003 ...............XXX.......... ...............XXX.......... ...............XXX.......... ...............XXX........... ..........................670 .........................670 ...............XXX........... .........................1,717 ......................5,205 ......................6,922 ...............XXX............. ...............XXX........... ...............XXX...........

7. Totals ....................11,084 ....................27,486 ....................38,570 .......................4,863 ..........................846 ......................5,709 .......................9,179 .........................2,302 ....................29,084 ....................40,565 .........................2,958 ......................(2,846) ..........................112

8. Prior Year- Col. 11, Line 7 Col. 12, Line 7 Col. 13, Line 7End's Surplus As % of Col. 1, As % of Col. 2, As % of Col. 3,As Regards Line 7 Line 7 Line 7Policyholders ....................37,356

1. ...................26.7 % 2. .................(10.4)% 3. ....................0.3 %

Col. 13, Line 7Line 8

4. ....................0.3 %

(a) Should equal prior year-end Annual Statement; Page 3, Col. 1, Lines 1 + 3. (b) Should equal Q.S. Page 3, Col.1, Lines 1 and 3. (c) Should also equal Cols. 6 + 10 less Col. 3 for Lines 1 through 5 only.


20

SUPPLEMENTAL EXHIBITS AND SCHEDULES INTERROGATORIESThe following supplemental reports are required to be filed as part of your statement filing. However, in the event that your company does not transact the type of business for which the special report must be filed, your response of NO to the specific interrogatory will be accepted in lieu of filing a "NONE" report and a bar code will be printed below. If the supplement is required of your company but is not being filed for whatever reason, enter SEE EXPLANATION and provide an explanation following the interrogatory questions.

RESPONSE

1. Will the SVO Compliance Certification be filed with this statement? YES

2. Will the Trusteed Surplus Statement be filed with the State of Domicile and the NAIC with this statement? NO

3. Will Supplement A to Schedule T (Medical Malpractice Supplement) be filed with this statement? NO

EXPLANATIONS:

BAR CODE:

*10673200349000001*

*10673200345000001*


21, E01, E02, E03

Overflow PageNONE

Sch. A-Part 2NONE

Sch. A-Part 3NONE

Sch. B-Part 1NONE

Sch. B-Part 2NONE

Sch. BA-Part 1NONE

Sch. BA-Part 2NONE


E04

SCHEDULE D - PART 3Show all Long-Term Bonds and Stock Acquired by the Company During the Current Quarter

1 2 3 4 5 6 7 8 9CUSIP Date Number of Paid for Accrued NAIC

Identification Description Acquired Name of Vendor Shares of Stock Actual Cost Par Value Interest and Dividends Designation (a)Bonds - Public Utilities United States250847-DS-6......... DETROIT EDISON COMPANY 6.125 10/01/2010................................................. ......03/24/2003...... BLAYLOCK & PARTNERS, L.P.................................................................. ........................................ .........................826,748 .........................750,000 ...........................22,458 1......................69351U-AB-9......... PPL ELECTRIC UTILITIES 6.250 08/15/2009....................................................... ......03/27/2003...... BONDS DIRECT / JEFFRIES.................................................................... ........................................ .........................556,905 .........................500,000 .............................3,993 1PE.................

United States........................................................................................................................................ ............................................................................................................................................................ ......................1,383,653 ......................1,250,000 ...........................26,451 ..........XXX.......3899999. Total - Bonds - Public Utilities............................................................................................................... ............................................................................................................................................................ ......................1,383,653 ......................1,250,000 ...........................26,451 ..........XXX.......

Bonds - Industrial and Miscellaneous United States053611-AC-3......... AVERY DENNISON CORPORAT 4.875 01/15/2013.............................................. ......03/25/2003...... BONDS DIRECT / JEFFRIES.................................................................... ........................................ .........................907,407 .........................900,000 .............................8,653 1......................06423E-PM-1........ BANK ONE NA 3.700 01/15/2008.............................................................. ......01/07/2003...... BANC ONE CAPITAL MARKETS, INC....................................................... ........................................ .........................498,890 .........................500,000 ...................................... 1......................07274R-BZ-6......... BAYERISCHE LANDESBANK G 5.875 12/01/2008................................................ ......01/13/2003...... MERRILL LYNCH...................................................................................... ........................................ .........................658,746 .........................600,000 .............................4,406 1PE.................134429-AR-0......... CAMPBELL SOUP COMPANY 5.000 12/03/2012................................................ ......03/20/2003...... BEAR STEARNS....................................................................................... ........................................ .........................764,025 .........................750,000 ...........................11,771 1PE.................17305E-BM-6........ CITIBANK CREDIT CARD IS 3.100 03/10/2008.................................................... ......03/04/2003...... LEHMAN BROTHERS............................................................................... ........................................ .........................499,885 .........................500,000 ...................................... 1PE.................17305E-BR-5......... CITIBANK CREDIT CARD IS 2.500 04/07/2006.................................................... ......03/26/2003...... SALOMON SMITH BARNEY, INC.............................................................. ........................................ .........................997,813 ......................1,000,000 ...................................... 1PE.................208251-AD-0......... CONOCO INC 6.350 04/15/2009.............................................................. ......01/07/2003...... UBS WARBURG........................................................................................ ........................................ .........................558,745 .........................500,000 .............................7,497 1......................22541N-S5-9......... CSFB MTG SECS CORP 03 C 3.006 01/01/2008.................................................. ......03/27/2003...... CREDIT SUISSE FIRST BOSTON............................................................. ........................................ ......................1,095,000 ......................1,095,000 .............................1,189 1Z...................251529-AE-3......... DEUTSCHE BANK FINANCIAL 6.700 12/13/2006................................................. ......01/09/2003...... UBS WARBURG........................................................................................ ........................................ .........................606,551 .........................550,000 .............................3,173 1PE.................36228C-PS-6......... GS MTG SECS CORP II 03 3.590 03/01/2008...................................................... ......03/13/2003...... GOLDMAN SACHS................................................................................... ........................................ ......................1,004,982 ......................1,000,000 .............................1,695 1Z...................52108H-PL-2......... LB-UBS COMM MTG TR 03 C 3.323 01/11/2009................................................... ......03/11/2003...... LEHMAN BROTHERS............................................................................... ........................................ ......................1,004,975 ......................1,000,000 ................................831 1Z...................571748-AD-4......... MARSH & MCLENNAN COS IN 5.375 03/15/2007................................................ ......03/18/2003...... BONDS DIRECT / JEFFRIES.................................................................... ........................................ .........................790,612 .........................730,000 ................................654 1......................695629-CG-8......... PAINE WEBBER GROUP INC 7.625 12/01/2009.................................................. ......03/18/2003...... BARCLAYS CAPITAL................................................................................ ........................................ .........................609,985 .........................500,000 ...........................11,649 1......................80311T-BR-2......... SARA LEE CORPORATION 6.300 11/07/2005................................................... ......03/24/2003...... BLAYLOCK & PARTNERS, L.P.................................................................. ........................................ .........................543,075 .........................500,000 .............................1,050 1PE.................929227-G6-7......... WASHINGTON MUTUAL 03 AR 3.927 01/01/2008................................................ ......03/06/2003...... BEAR STEARNS....................................................................................... ........................................ .........................505,938 .........................500,000 .............................1,473 1PE.................949746-EX-5......... WELLS FARGO & COMPANY 3.500 04/04/2008................................................. ......03/18/2003...... BEAR STEARNS....................................................................................... ........................................ .........................998,940 ......................1,000,000 ...................................... 1......................

United States........................................................................................................................................ ............................................................................................................................................................ ....................12,045,569 ....................11,625,000 ...........................54,041 ..........XXX....... Foreign25243Y-AF-6......... DIAGEO CAPITAL PLC 3.375 03/20/2008........................................................ ......03/18/2003...... DEUTSCHE BANK.................................................................................... ........................................ .........................992,500 ......................1,000,000 ...................................... 1PE.................638539-AH-9......... NATIONAL WESTMINSTER BA 7.375 10/01/2009................................................ ......01/13/2003...... JP MORGAN SECURITIES INC................................................................ ........................................ .........................587,585 .........................500,000 ...........................10,755 1......................

Foreign................................................................................................................................................. ............................................................................................................................................................ ......................1,580,085 ......................1,500,000 ...........................10,755 ..........XXX.......4599999. Total - Bonds - Industrial & Miscellaneous............................................................................................. ............................................................................................................................................................ ....................13,625,654 ....................13,125,000 ...........................64,796 ..........XXX.......6099997. Total - Bonds - Part 3............................................................................................................................ ............................................................................................................................................................ ....................15,009,307 ....................14,375,000 ...........................91,247 ..........XXX.......6099999. Total - Bonds........................................................................................................................................ ............................................................................................................................................................ ....................15,009,307 ....................14,375,000 ...........................91,247 ..........XXX.......7299999. Total - Bonds, Preferred and Common Stocks....................................................................................... ............................................................................................................................................................ ....................15,009,307 ................XXX................ ...........................91,247 ..........XXX.......

(a) For all common stock bearing the NAIC designation "U" provide: the number of such issues:...............0.


E05

SCHEDULE D - PART 4Show All Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of by the Company During the Current Quarter

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17Increase

Book/Adjusted (Decrease) Foreign Interest DividendsNumber of Carrying Increase by Foreign Exchange Realized Total on Bonds on Stocks NAIC

CUSIP Disposal Shares of Value At (Decrease) Exchange Gain (Loss) Gain (Loss) Gain (Loss) Received Received DesignationIdentification Description Date Name of Purchaser Stock Consideration Par Value Actual Cost Disposal Date by Adjustment Adjustment on Disposal on Disposal on Disposal During Year During Year (a)

Bonds - U.S. Government912827-J7-8.... UNITED STATES TREASURY 6.250 02/15/2003 02/15/2003 MATURITY............................................... ......................... ..........685,000 ..........685,000 ..........693,937 ..........685,341 ............(341) .................... .................... .................... ...................0 ..........18,753 ...................... 1PE..........

0399999. Total - Bonds - U.S. Government......................................................................................................................................... ..........685,000 ..........685,000 ..........693,937 ..........685,341 ............(341) .................0 .................0 .................0 ...................0 ..........18,753 ...................0 ......XXX...Bonds - Special Revenue and Special Assessment United States31293M-LR-1... FEDERAL HOME LN MTG COR 6.000 04/01/202903/01/2003 PAYDOWN............................................... ......................... ..........324,406 ..........324,406 ..........297,338 ..........323,302 ..........1,104 .................... .................... .................... ...................0 ............2,641 ...................... 1..............31293S-PH-6... FEDERAL HOME LN MTG COR 7.000 08/01/202903/01/2003 PAYDOWN............................................... ......................... ............92,384 ............92,384 ............89,266 ............92,378 .................6 .................... .................... .................... ...................0 ...............589 ...................... 1..............31339N-VR-4... FEDERAL HOME LN MTG COR 5.500 10/01/200603/01/2003 PAYDOWN............................................... ......................... ..........229,314 ..........229,314 ..........229,457 ..........229,341 ..............(27) .................... .................... .................... ...................0 ............1,981 ...................... 1PE..........31387F-FR-0... FEDERAL NATIONAL MTG AS 6.000 05/01/2031 03/01/2003 PAYDOWN............................................... ......................... ..........283,824 ..........283,824 ..........276,019 ..........283,357 .............467 .................... .................... .................... ...................0 ............3,012 ...................... 1..............31390V-K3-7.... FEDERAL NATIONAL MTG AS 5.500 10/01/2017 03/01/2003 PAYDOWN............................................... ......................... ............55,881 ............55,881 ............57,837 ............55,917 ..............(36) .................... .................... .................... ...................0 ...............509 ...................... 1..............

U.S..................................................................................................................................................................................... ..........985,809 ..........985,809 ..........949,917 ..........984,295 ..........1,514 .................0 .................0 .................0 ...................0 ............8,732 ...................0 ......XXX...United States....................................................................................................................................................................... ..........985,809 ..........985,809 ..........949,917 ..........984,295 ..........1,514 .................0 .................0 .................0 ...................0 ............8,732 ...................0 ......XXX...

3199999. Total - Bonds - Special Revenue & Assessment................................................................................................................... ..........985,809 ..........985,809 ..........949,917 ..........984,295 ..........1,514 .................0 .................0 .................0 ...................0 ............8,732 ...................0 ......XXX...Bonds - Public Utilities United States100599-BJ-7.... BOSTON EDISON COMPANY 6.800 03/15/2003 03/15/2003 MATURITY............................................... ......................... .......2,000,000 .......2,000,000 .......1,985,720 .......1,999,038 .............962 .................... .................... .................... ...................0 ..........68,000 ...................... 1PE..........

United States...................................................................................................................................................................... .......2,000,000 .......2,000,000 .......1,985,720 .......1,999,038 .............962 .................0 .................0 .................0 ...................0 ..........68,000 ...................0 ......XXX...3899999. Total - Bonds - Public Utilities.............................................................................................................................................. .......2,000,000 .......2,000,000 .......1,985,720 .......1,999,038 .............962 .................0 .................0 .................0 ...................0 ..........68,000 ...................0 ......XXX...

Bonds - Industrial and Miscellaneous United States065913-AE-5.... BANKBOSTON CORPORATION 6.500 12/19/200703/14/2003 JP MORGAN SECURITIES INC................ ......................... ..........563,315 ..........500,000 ..........495,660 ..........497,494 ...............94 .................... .................... ........65,727 ..........65,727 ............8,125 ...................... 1..............20033T-AD-7... COMED TRANSITIONAL FDG 5.390 06/25/2003 03/25/2003 PAYDOWN............................................... ......................... ..........210,847 ..........210,847 ..........200,848 ..........209,533 ..........1,314 .................... .................... .................... ...................0 ............2,841 ...................... 1..............22540V-3Q-3... HOME EQUITY MTG TR 02 1 5.355 03/01/2012. 03/01/2003 PAYDOWN............................................... ......................... ..........324,586 ..........324,586 ..........324,586 ..........324,586 .................... .................... .................... .................... ...................0 ............2,971 ...................... 1PE..........294754-AD-8... EQUITY ONE ABS INC 01 2 5.417 12/01/2006... 03/01/2003 PAYDOWN............................................... ......................... ............56,756 ............56,756 ............56,756 ............56,756 .................... .................... .................... .................... ...................0 ...............729 ...................... 1PE..........337366-AA-6.... FIRST UNION CHASE COMM 6.363 01/01/2008 03/01/2003 PAYDOWN............................................... ......................... ............26,296 ............26,296 ............25,627 ............26,281 ...............15 .................... .................... .................... ...................0 ...............326 ...................... 1..............478366-AH-0... JOHNSON CONTROLS INC 6.300 02/01/2008 03/14/2003 BLAYLOCK & PARTNERS, L.P................. ......................... .......1,134,780 .......1,000,000 .......1,066,341 .......1,040,154 .........(1,502) .................... .................... ........96,128 ..........96,128 ..........39,900 ...................... 1PE..........590188-HX-9... MERRILL LYNCH & COMPANY 6.560 12/16/2007 03/14/2003 JP MORGAN SECURITIES INC................ ......................... ..........567,100 ..........500,000 ..........501,810 ..........501,044 ..............(39) .................... .................... ........66,095 ..........66,095 ............8,473 ...................... 1..............61746W-GM-6. MORGAN STANLEY DWC 01 P 6.269 03/07/2011 03/07/2003 PAYDOWN............................................... ......................... ............21,626 ............21,626 ............22,165 ............21,635 ................(9) .................... .................... .................... ...................0 ...............254 ...................... 1..............79548K-UT-3... SALOMON BROS MTG SECS V 7.750 09/01/202503/01/2003 PAYDOWN............................................... ......................... ..........169,880 ..........169,880 ..........163,191 ..........169,773 .............107 .................... .................... .................... ...................0 ............1,723 ...................... 1PE..........79548K-ZL-5.... SALOMON BROS MTG SECS V 7.000 05/01/202803/01/2003 PAYDOWN............................................... ......................... ..............5,978 ..............5,978 ..............5,863 ..............5,977 .................1 .................... .................... .................... ...................0 .................69 ...................... 1PE..........84604C-AC-1... SOVEREIGN BANK HE LN TR 7.110 01/01/2004 03/01/2003 PAYDOWN............................................... ......................... ..........687,859 ..........687,859 ..........687,859 ..........687,859 .................... .................... .................... .................... ...................0 ............7,469 ...................... 1PE..........86358R-DX-2... STRUCTURED ASSET SECS C 3.375 08/01/202803/01/2003 PAYDOWN............................................... ......................... ............21,181 ............21,181 ............18,215 ............21,155 ...............26 .................... .................... .................... ...................0 ...............129 ...................... 1PE..........867914-AH-6... SUNTRUST BANKS INC 6.000 02/15/2026... 03/14/2003 SPEAR, LEEDS & KELLOG...................... ......................... ..........273,815 ..........250,000 ..........237,895 ..........238,563 ...............48 .................... .................... ........35,204 ..........35,204 ............8,917 ...................... 1PE..........

United States...................................................................................................................................................................... .......4,064,019 .......3,775,009 .......3,806,816 .......3,800,810 ...............55 .................0 .................0 ......263,154 ........263,154 ..........81,926 ...................0 ......XXX... Foreign597433-AC-5... MIDLAND BANK PLC 7.650 05/01/2025...... 03/14/2003 UBS WARBURG....................................... ......................... ..........861,665 ..........700,000 ..........747,796 ..........725,179 .........(1,095) .................... .................... ......137,581 ........137,581 ..........20,528 ...................... 1PE..........706448-AN-7... PEMEX FINANCE LTD 6.125 11/15/2003..... 02/15/2003 SINKING FUND REDEMPTION................ ......................... ............66,660 ............66,660 ............65,537 ............66,414 .............246 .................... .................... .................... ...................0 ............1,021 ...................... 1..............

Foreign............................................................................................................................................................................... ..........928,325 ..........766,660 ..........813,333 ..........791,593 ............(849) .................0 .................0 ......137,581 ........137,581 ..........21,549 ...................0 ......XXX...4599999. Total - Bonds - Industrial & Miscellaneous............................................................................................................................ .......4,992,344 .......4,541,669 .......4,620,149 .......4,592,403 ............(794) .................0 .................0 ......400,735 ........400,735 ........103,475 ...................0 ......XXX...6099997. Total - Bonds - Part 4........................................................................................................................................................... .......8,663,153 .......8,212,478 .......8,249,723 .......8,261,077 ..........1,341 .................0 .................0 ......400,735 ........400,735 ........198,960 ...................0 ......XXX...6099999. Total - Bonds....................................................................................................................................................................... .......8,663,153 .......8,212,478 .......8,249,723 .......8,261,077 ..........1,341 .................0 .................0 ......400,735 ........400,735 ........198,960 ...................0 ......XXX...

Common Stocks - Industrial and MiscellaneousUnited States464287-80-4.... ISHARES S&P SMALLCAP 600.......................... 03/13/2003 SALOMON SMITH BARNEY..................... .........5,900.000 ..........512,382 ....................... ..........601,918 ..........574,955 ........26,963 .................... .................... .......(89,536) .........(89,536) ...................... ...............859 L..............78462F-10-3.... S & P 500 DEPOSITARY RECEIPTS.................. 03/13/2003 SALOMON SMITH BARNEY..................... .........4,600.000 ..........376,851 ....................... ..........497,674 ..........405,858 .......(29,624) .................... .................... .............617 ...............617 ...................... ............2,005 L..............

United States...................................................................................................................................................................... ..........889,233 ........XXX......... .......1,099,592 ..........980,813 .........(2,661) .................0 .................0 .......(88,919) .........(88,919) ...................0 ............2,864 ......XXX...6899999. Total - Common Stocks - Industrial & Miscellaneous............................................................................................................ ..........889,233 ........XXX......... .......1,099,592 ..........980,813 .........(2,661) .................0 .................0 .......(88,919) .........(88,919) ...................0 ............2,864 ......XXX...7099997. Total - Common Stocks - Part 4........................................................................................................................................... ..........889,233 ........XXX......... .......1,099,592 ..........980,813 .........(2,661) .................0 .................0 .......(88,919) .........(88,919) ...................0 ............2,864 ......XXX...7099999. Total - Common Stocks....................................................................................................................................................... ..........889,233 ........XXX......... .......1,099,592 ..........980,813 .........(2,661) .................0 .................0 .......(88,919) .........(88,919) ...................0 ............2,864 ......XXX...7199999. Total - Preferred and Common Stocks.................................................................................................................................. ..........889,233 ........XXX......... .......1,099,592 ..........980,813 .........(2,661) .................0 .................0 .......(88,919) .........(88,919) ...................0 ............2,864 ......XXX...7299999. Total - Bonds, Preferred and Common Stocks...................................................................................................................... .......9,552,386 ........XXX......... .......9,349,315 .......9,241,890 .........(1,320) .................0 .................0 ......311,816 ........311,816 ........198,960 ............2,864 ......XXX...


E05.1

SCHEDULE D - PART 4Show All Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of by the Company During the Current Quarter

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17Increase

Book/Adjusted (Decrease) Foreign Interest DividendsNumber of Carrying Increase by Foreign Exchange Realized Total on Bonds on Stocks NAIC

CUSIP Disposal Shares of Value At (Decrease) Exchange Gain (Loss) Gain (Loss) Gain (Loss) Received Received DesignationIdentification Description Date Name of Purchaser Stock Consideration Par Value Actual Cost Disposal Date by Adjustment Adjustment on Disposal on Disposal on Disposal During Year During Year (a)

(a) For all common stock bearing the NAIC designation "U" provide: the number of such issues:...............0.


E06, E07

Sch. DB-Part A-Section 1NONE

Sch. DB-Part B-Section 1NONE

Sch. DB-Part C-Section 1NONE

Sch. DB-Part D-Section 1NONE


E08

SCHEDULE E - PART 1 - CASHMonth End Depository Balances

1 2 3 4 Book Balance at End of Each 8Amount of Amount of Month During Current Quarter

Rate Interest Interest Accrued 5 6 7of Received During at Current

Depository Interest Current Quarter Statement Date First Month Second Month Third Month *Open DepositoriesPNC Bank.............................................................. .............................................................. .................. ..............5,252 ........................ .....2,132,093 .....4,092,046 .....2,000,330 XXX0199999. Total Open Depositories......................................................................................... ......XXX..... ..............5,252 .....................0 .....2,132,093 .....4,092,046 .....2,000,330 XXX0399999. Total Cash on Deposit............................................................................................. ......XXX..... ..............5,252 .....................0 .....2,132,093 .....4,092,046 .....2,000,330 XXX0599999. Total Cash............................................................................................................... ......XXX..... ..............5,252 .....................0 .....2,132,093 .....4,092,046 .....2,000,330 XXX

penn-star insurance company · statement as of march 31, 2003 of the penn-star insurance company 3...

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