-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jv7OIOuzyzdT7/+Yp+WWufw1BxcZR11o+DNPabnGnSizl3sCzs3Eu0po18NXt5TU vsYgIGDW9PWt/LjrMFqukQ== 0000950131-02-003138.txt : 20020813 0000950131-02-003138.hdr.sgml : 20020813 20020813152454 ACCESSION NUMBER: 0000950131-02-003138 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERINST INSURANCE GROUP LTD CENTRAL INDEX KEY: 0001065201 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE CARRIERS, NEC [6399] IRS NUMBER: 980207447 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-28249 FILM NUMBER: 02729503 BUSINESS ADDRESS: STREET 1: C/O USA RISK GROUP INC STREET 2: P O BOX 1330 CITY: MONTPELIER STATE: VT ZIP: 05601 BUSINESS PHONE: 8022295042 MAIL ADDRESS: STREET 1: C/O USA RISK GROUP INC STREET 2: P O BOX 1330 CITY: MONTPELIER STATE: VT ZIP: 05601 10-Q 1 d10q.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the Quarterly period ended June 30, 2002. [_] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from __________________ to __________________ Commission file number AMERINST INSURANCE GROUP, LTD. ------------------------------ (Exact Name of Registrant as Specified in its Charter) BERMUDA 98-020-7447 (State or other jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) C/O USA Offshore Management, The Vallis Building, 58 Par-la-Ville Road, PO Box HM 1838, Hamilton HMHX, Bermuda (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (441) 292-4364 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. [X] YES [_] NO Number of shares of common stock outstanding: Number outstanding Class as of August 5, 2002 ----- -------------------- COMMON SHARES, PAR VALUE $1.00 PER SHARE 308,038 Part I, Item 1 AMERINST INSURANCE GROUP, LTD. CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) As of As of June 30, December 31, ASSETS 2002 2001 ----------- ----------- INVESTMENTS Fixed maturity investments, at market value (amortized cost $30,548,406 and $28,529,843) ...................... $31,743,430 $29,529,239 Equity securities, at market value (cost $14,471,788 and $13,972,736) ....................................... 15,431,443 16,556,194 ----------- ----------- TOTAL INVESTMENTS ...................................... 47,174,873 46,085,433 Cash and cash equivalents ............................... 2,725,054 2,855,781 Assumed reinsurance premiums receivable ................. 23,902 1,145,874 Reinsurance balances recoverable ........................ 674,223 674,223 Fund deposit with a reinsurer ........................... 108,000 108,000 Accrued investment income ............................... 416,399 448,786 Deferred policy acquisition costs ....................... 772,926 891,311 Federal income taxes receivable ......................... 0 504,658 Prepaid expenses and other assets ....................... 190,935 130,427 ----------- ----------- TOTAL ASSETS ........................................... $52,086,312 $52,844,493 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Unpaid losses and loss adjustment expenses .............. $30,086,368 $29,242,625 Unearned premiums ....................................... 2,712,023 3,127,409 Reinsurance balances payable ............................ 174,833 174,833 Accrued expenses and other liabilities .................. 562,471 572,407 ----------- ----------- TOTAL LIABILITIES ...................................... 33,535,695 33,117,274 ----------- ----------- STOCKHOLDERS' EQUITY Common shares, $1 par value, 500,000 shares authorized, 2002 and 2001: 331,751 issued and outstanding ......... 331,751 331,751 Additional paid-in capital .............................. 6,801,870 6,801,870 Retained earnings ....................................... 10,073,483 9,747,981 Accumulated other comprehensive income .................. 2,154,679 3,582,854 Treasury Stock (22,071 and 20,388 shares) at cost ....... (811,166) (737,237) ----------- ----------- TOTAL STOCKHOLDERS' EQUITY ............................. 18,550,617 19,727,219 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ............. $52,086,312 $52,844,493 =========== ===========
See the accompanying notes to the condensed consolidated financial statements. 2 AMERINST INSURANCE GROUP, LTD. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (Unaudited)
Six Months Six Months Three Months Three Months Ended Ended Ended Ended June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001 ------------- ------------- ------------- ------------- Revenue Premiums earned ................................................ $ 3,297,468 $ 3,155,618 $ 1,585,148 $ 1,501,212 Net investment income .......................................... 934,080 1,216,604 500,007 677,766 Net realized capital gain ...................................... 881,868 249,269 588,508 16,718 ----------- ----------- ----------- ----------- Total Revenue ............................................... 5,113,416 4,621,491 2,673,663 2,195,696 Losses And Expenses Losses and loss adjustment expense ............................. 2,967,885 3,149,143 1,426,633 1,577,456 Policy acquisition costs ....................................... 968,600 928,777 462,547 437,597 Operating and management expenses .............................. 447,717 515,827 225,332 250,066 ----------- ----------- ----------- ----------- Total Losses And Expenses ................................... 4,384,202 4,593,747 2,114,512 2,265,119 ----------- ----------- ----------- ----------- Net Income (Loss) ............................................... $ 729,214 $ 27,744 $ 559,151 $ (69,423) ----------- ----------- ----------- ----------- Other Comprehensive Income Net unrealized holding gains (losses) arising during the period ................................... (546,307) 1,334,811 (1,228,341) 962,756 Reclassification adjustment for gains and losses included in net income ...................................... (881,868) (249,269) (588,508) (16,718) ----------- ----------- ----------- ----------- Other Comprehensive Income (loss)................................ (1,428,175) 1,085,542 (1,816,849) 946,038 ----------- ----------- ----------- ----------- Comprehensive Income (Loss) ..................................... $ (698,961) $ 1,113,286 $(1,257,698) $ 876,615 =========== =========== =========== =========== Retained Earnings, Beginning Of Period .......................... $ 9,747,981 $ 9,818,445 $ 9,715,929 $ 9,707,475 Net income (loss) ............................................... 729,214 27,744 559,151 (69,423) Dividends paid .................................................. (403,712) (414,177) (201,597) (206,040) ----------- ----------- ----------- ----------- Retained Earnings, End Of Period ................................ $10,073,483 $ 9,432,012 $10,073,483 $ 9,432,012 =========== =========== =========== =========== Per share amounts Net income (loss) ............................................ $ 2.35 $ 0.09 $ 1.80 $ (0.22) =========== =========== =========== =========== Dividends paid ............................................... $ 1.30 $ 1.30 $ 0.65 $ 0.65 =========== =========== =========== =========== Weighted average number of shares outstanding for the entire period ........................... 310,522 319,088 310,314 317,115 =========== =========== =========== ===========
See the accompanying notes to the condensed consolidated financial statements. 3 AMERINST INSURANCE GROUP, LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Six Months Ended Ended June 30, June 30, 2002 2001 ------------ ----------- OPERATING ACTIVITIES Net Cash Provided by Operating Activities ................................ $ 2,103,122 $ 622,054 ------------ ----------- INVESTING ACTIVITIES Purchases of investments ................................................ (18,375,651) (7,406,624) Proceeds from sales and maturities of investments ....................... 16,619,443 7,226,371 ------------ ----------- Net Cash Used in Investing Activities. ................................... (1,756,208) (180,253) ------------ ----------- FINANCING ACTIVITIES Purchase of Treasury shares ............................................. (73,929) (61,680) Dividends paid .......................................................... (403,712) (414,177) ------------ ----------- Net Cash Used in Financing Activities .................................... (477,641) (475,857) ------------ ----------- DECREASE IN CASH ......................................................... $ (130,727) $ (34,056) ============ ===========
See the accompanying notes to the condensed consolidated financial statements. 4 AMERINST INSURANCE GROUP, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 30, 2002 Basis of Presentation The condensed consolidated financial statements included herein have been prepared by AmerInst Insurance Group, Ltd. (AIG) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments consisting of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of the results of operations for the periods shown. These statements are condensed and do not include all information required by generally accepted accounting principles to be included in a full set of financial statements. It is suggested that these condensed statements be read in conjunction with the consolidated financial statements at and for the year ended December 31, 2001 and notes thereto, included in the Registrant's annual report as of that date. Part I, Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OPERATIONS Three months ended June 30, 2002 compared to three months ended June 30, 2001: A net income of $559,151 was recorded for the second quarter of 2002 in comparison to a net loss of $(69,423) for the same period of 2001. The more favorable results are due to an increase in the net realized capital gain for the period and a decrease in incurred losses. Earned premiums for the second quarter of 2002 amounted to $1,585,148 as compared to $1,501,212 for the second quarter of 2001, an increase of $83,936 or 5.6%. Premiums written for the three months ended June 30, 2002 were $1,078,017, as compared to $957,017 for the second quarter of 2001, an increase of $121,000 or 12.6%. The loss ratio for the second quarter of 2002 was 90% for the current treaty, as compared to 105% for the same period of 2001. The loss ratio of 90% represents management's current estimated effective loss rate selected in consultation with the Company's independent consulting actuary to apply to current premiums assumed and earned. The Company's overall loss ratio for the year ended December 31, 2001 was 94.7%. 5 AMERINST INSURANCE GROUP, LTD. OPERATIONS--(Continued) Policy acquisition costs of $462,547 were expensed in the second quarter of 2002 as compared to $437,597 for the same period of 2001, an increase of $24,950 or 5.7%. Such costs as a percentage of premiums earned are 29.2% and 29.1% for the quarters ended June 30, 2002 and 2001, respectively. Policy acquisition costs result from ceding commissions paid to ceding companies determined contractually pursuant to reinsurance agreements and federal excise taxes paid on premiums written to ceding companies. These fluctuations in premiums, losses and expenses combined to result in a net underwriting loss of $(529,364)for the second quarter of 2002 as compared to $(763,907) for the same period of 2001, an improvement of $234,543 or 30.7%. The improvement is due to a decrease in the recorded losses and other operating and management expenses. Investment yield for the second quarter of 2002 was 4.0%, consisting of interest and dividend income, and represents a decrease from the 5.6% return earned in the second quarter of 2001. Sales of securities during the second quarter of 2002 resulted in realized capital gains of $588,508, as compared to gains of $16,718 in the second quarter of 2001. Gains recorded in the second quarter of 2002 primarily related to sales of equities. Proceeds from these sales were subsequently reinvested in other equity securities. Six months ended June 30, 2002 compared to six months ended June 30, 2001: Net income of $729,214 was recorded for the six months ended June 30, 2002 in comparison to a net income of $27,744 for the six months ended June 30, 2001. The improved results are due to an increase in net realized capital gain, a decrease of incurred losses and other operating and management expenses. Sales of securities during the six months ended June 30, 2002 resulted in realized capital gains of $881,868 as compared to $249,269 in the same period of 2001. Gains recorded in 2002 primarily related to sales of equities, which were reinvested in other equity securities. Net investment income through June 30, 2002 was $934,080 compared to $1,216,604 for the same period of 2001. Investment yield for the six months period of 2002 was approximately 3.8% as compared to 5.0% for the first six months of 2001. Earned premiums for the first six months of 2002 amounted to $3,297,468 as compared to $3,155,618 for 2001. The change of $141,850 represents a 4.5% increase. The increase in earned premiums is attributable to the increase in the number of policies written under the current treaty compared to the same period in 2001. Premiums written in the six months ended June 30, 2002 were $2,882,082 as compared to $2,942,548 for the same period in 2001. The decrease of $60,466 is due to additional premium of $194,137 included in the first six months of 2001, relating to 2000. Without the adjustment, premium written in the first six months of 2002 was higher by 4.9%, in comparison to premium written in the first six months of 2001. The increase is due to the continued growth of the AICPA Professional Liability Insurance Plan ("AICPA Plan"), an increase in the number of insureds under the AICPA Plan, and certain rate increases associated with a "step plan" that was initiated during 1995. Under the step plan, insureds are offered discounted premium rates for favorable loss experience. However, as these insureds experience losses their premiums are "stepped up" accordingly. Because of the use of claims-made policies, as the number of years of coverage provided increases, CNA's (and AIG's) exposure increases. This additional exposure results in an increase in premiums charged. The loss ratio through the first six months of 2002 was 90% as compared to 99.8% for the same period of 2001. The loss ratio of 90% represents management's current estimated effective loss ratio selected in consultation with the Company's independent consulting actuary. 6 AMERINST INSURANCE GROUP, LTD. OPERATIONS--(Continued) Losses recorded through June 30, 2002 do not reflect any development of prior year reserves. Management expects to make a determination in the fourth quarter whether an adjustment to reserves for prior years is appropriate. However, based on information to date, Management believes that no such adjustment is required as of June 30, 2002. Policy acquisition costs of $968,600 were expensed in the first six months of 2002 as compared to $928,777 for the same period of 2001, an increase of 4.3%. Such costs as a percentage of premiums earned are 29.4% for both the six-month periods ended June 30, 2002 and 2001. Policy acquisition costs result from ceding commissions paid to ceding companies which are determined contractually pursuant to reinsurance agreements and federal excise taxes paid on premiums written to ceding companies. These fluctuations combined to result in a net underwriting loss of $(1,086,734) for the six month period as compared to $(1,438,129) for the same period in 2001, an improvement of $351,395. The more favorable underwriting results in 2002 are due to the loss ratio of 90% in 2002, compared to 99.8% in 2001. FINANCIAL CONDITION AND LIQUIDITY As of June 30, 2002, total invested assets amounted to $49,899,927, an increase of $958,713 or 2.0% from $48,941,214 at December 31, 2001. Cash and cash equivalents balances decreased from $2,855,781 at December 31, 2001 to $2,725,054 at June 30, 2002, a decrease of $130,727, or 4.6%. The amount of cash and cash equivalents varies depending on the maturities of fixed term investments and on the level of funds invested in money market mutual funds. The ratio of cash and invested assets to total liabilities at June 30, 2002 was 1.49:1, compared to a ratio of 1.49:1 at June 30, 2001. Assumed reinsurance premiums receivable represents current assumed premiums receivable less commissions payable to the fronting carriers. This balance was $1,145,874 at December 31, 2001 and $23,902 at June 30, 2002. This balance fluctuates due to the timing of renewal premiums written. Reinsurance balances payable represents AIG's estimate of the premiums due to the Company's reinsurer under the retrocession agreements described above, and amounts currently due for losses and loss adjustment expenses payable. At December 31, 2001 and at June 30, 2002 the balance was $174,833. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Inflation The Company does not believe its operations have been materially affected by inflation. The potential adverse impacts of inflation include: (a) a decline in the market value of the company's fixed maturity investment portfolio; (b) an increase in the ultimate cost of settling claims which remain unresolved for a significant period of time; and (c) an increase in the Company's operating expenses. However, the Company generally holds its fixed maturity investments to maturity and currently believes that the yield is adequate to compensate the Company for the risk of inflation. In addition, the Company anticipates any increase from inflation in the ultimate cost of settling unpaid claims generally will be offset by investment income earned during the period that the claim is outstanding. Finally, the increase in operating expenses resulting from inflation should generally be matched by similar inflationary increases in the premium rates. 7 Market Sensitive Instruments Market risk generally represents the risk of loss that may result from potential change in the value of a financial instrument due to a variety of market conditions. The Company's exposure to market risk is generally limited to potential losses arising from changes in the level of interest rates on market values of fixed term holdings and changes in the market values of equity securities. The Company does not hold or issue derivative financial instruments for either trading or hedging purposes. a) Interest Rate Risk. Interest rate risk results from the Company's holdings in interest-rate-sensitive instruments. The Company is exposed to potential losses arising from changes in the level of interest rates on fixed rate instruments held. The Company is also exposed to credit spread risk resulting from possible changes in the issuer's credit rating. To manage its exposure to interest rate risk the Company attempts to select investments with characteristics that match the characteristics of the related insurance liabilities. Additionally, the Company generally only invests in higher-grade interest bearing instruments. b) Foreign Exchange Risk. The Company only invests in U.S. dollar denominated financial instruments and does not believe it has any exposure to foreign exchange risk. c) Equity Price Risk Equity price risk arises from fluctuations in the value of securities held. The Company invests in equity securities in order to diversify its investment portfolio, which Management believes will assist the Company to achieve its goal of long-term growth of capital and surplus. Management has adopted investment guidelines that set out rate of return and asset allocation targets, as well as degree of risk and equity investment restrictions to minimize exposure to material risk from changes in equity prices. The tables below provide information about the Company's available for sale investments that are sensitive to change in interest rates at June 30, 2002 and December 31, 2001 respectively. Market Value Market Value 06/30/2002 12/31/2001 ----------- ----------- Fixed Income Portfolio - ---------------------- Due in 1 year or less $ 1,527,092 $ 2,034,652 Due after 1 year through 5 years 3,741,440 3,724,912 Due after 5 years through 10 years 2,653,051 4,435,397 Due after ten years 1,464,775 1,419,268 ----------- ----------- Sub-total $ 9,386,358 $11,614,229 Mortgage backed securities and Obligations of U.S. government Corporations and agencies $22,357,072 $17,915,010 ----------- ----------- Total Fixed-Income $31,743,430 $29,529,239 =========== =========== Total Equities $15,431,443 $16,556,194 =========== =========== 8 FINANCIAL CONDITION AND LIQUIDITY On June 1, 2000, the Board of Directors of Investco, which holds almost all of the Company's investment portfolio, authorized Investco to spend up to $1 million to purchase outstanding Common Shares of the Company. On September 8, 2000, the Bermuda Monetary Authority authorized the purchase of up to 15,000 Common Shares pursuant to the June 1 Board authorization. Such purchases are effected through privately negotiated transactions and are in addition to Investco's practice of redeeming the shares of individuals who have died or retired from the practice of public accounting. Subsequently, on July 19, 2002, the Bermuda Monetary Authority authorized blanket permission for Investco to purchase Common Shares from individuals who have died or retired from the practice of public accounting and on a negotiated case-by-case basis without limit. To date, Investco has purchased 13,022 Common Shares for a purchase price of $402,771. In addition, to date Investco has purchased 10,691 Common Shares of individuals who have died or retired for a purchase price of $468,393. The Company paid its twenty-eighth consecutive quarterly dividend of $0.65 per share during the second quarter of 2002. Part II, Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. On May 30, 2002, the Company held its Annual General Meeting of Shareholders. At the meeting, the following matters were approved by a majority of the shareholders: 1. The proposal to elect Jeffrey I. Gillman, Irvin F. Diamond and Jerrell A. Atkinson as directors of the Company to serve for a term expiring at the 2005 Annual General Meeting of Shareholders and to elect Stuart Grayston as director of the Company to serve for a term expiring at the 2004 Annual General Meeting of Shareholders; and 2. The proposal to re-appoint Deloitte & Touche as the Company's independent auditors. The following table provides the number of votes cast for or against, as well as the number of abstentions, as to each matter submitted to a vote of stockholders at the meeting. Matter For Against Abstain - ------ ----- ------- ------- Election of each of the following individuals as directors of the Company: Jeffry I. Gillman 121,795 0 6,179 Irvin F. Diamond 121,737 58 6,179 Jerrell A. Atkinson 121,767 28 6,179 Stuart Grayston 120,856 939 6,179 Appointment of Deloitte & Touche as the Company's independent auditors 118,286 6,538 3,150 Part II, Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits See Index to Exhibits immediately following the signature page. (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended June 30, 2002 9 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERINST INSURANCE GROUP, LTD. ------------------------------ (Registrant) August 14, 2002 /s/ Richard Lowther -------------------------------- Richard Lowther (Vice President and Chief Financial Officer, duly authorized to sign this Report in such capacity and on behalf of the Registrant.) 10 AMERINST INSURANCE GROUP, LTD. INDEX TO EXHIBITS Quarterly Period Ended June 30, 2002 Exhibit Number Description - ------- ----------- 3(i) Memorandum of Association of the Company (1) 3(ii) Bye-laws of the Company (1) 4.1 Section 47 of the Company's Bye-laws -- included in Exhibit 3(ii) above 4.2 Statement of Share Ownership Policy, as Amended (9) 10.1 Reinsurance Treaty between AIIC and Virginia Surety Company, Inc. (2) 10.2 Agreement between Country Club Bank and AIIC (2) 10.3 Agreement between Country Club Bank and AIIG (2) 10.4 Reinsurance Treaty between AIIC and CNA Insurance Companies (3), 1994 placement slip (4), 1995 placement slip (5), 1996 placement slip (6), 1997 placement slip (9), and 1998 placement slip (10) and Endorsement No. 1 to the Treaty effective July 1, 1999 (11) 10.5 Revised Management Agreement between Vermont Insurance Management, Inc. and AIIC dated May 1, 1997 (7), Addenda to Management Agreement dated July 1, 1997 (8), Addenda to Management Agreement dated July 1, 1998 (10), Management Agreement between USA Offshore Management, Ltd. and AmerInst Insurance Company Ltd. dated as of December 2, 1999 (12) and Addenda to Agreement between AmerInst Insurance Company Ltd. and USA Offshore Management, Ltd. dated June 2, 2000 (12). 10.6 Escrow Agreement among AIIC, United States Fire Insurance Company and Harris Trust and Savings Bank dated March 7, 1995 (5) 10.7 Security Trust Agreement among AIIC, Harris Trust and Savings Bank and Virginia Surety Company, Inc. dated March 9, 1995 (5) 10.8 Investment Advisory Agreement For Discretionary Accounts between Amerinst Insurance Company and Harris Associates L.P. dated as of January 22, 1996, as amended by the Amendment to Investment Advisory Agreement for Discretionary Accounts dated as of April 2, 1996 (10) 10.9 Exchange Agreement between the Company the AIG Ltd., dated as of January 20, 1999 (1) 10.10 Reinsurance Treaty between AIC Ltd. and CNA Insurance Companies, effective December 1, 1999 (11) 10.11 Value Plan Reinsurance Treaty between AIC Ltd. and CNA Insurance Companies, effective December 1, 1999 (11) 10.12 Trust Agreement among AIC Ltd., Continental Casualty Company and Chase Manhattan Bank dated as of December 21, 2000 (13) 10.13 Investment Counsel Agreement between AIC Ltd. and Northwest Investment Management, Inc. dated August 1, 2000 (13) 10.14 Registrar and Transfer Agent Agreement between AIC Ltd. and Butterfield Corporate Services Limited dated as of January 1, 2001 (14) 10.15 Reinsurance Treaty between AIC Ltd. and CNA Insurance Companies, effective January 1, 2002 (15) 10.16 Value Plan Reinsurance Treaty between AIC Ltd. and CNA Insurance Companies, effective January 1, 2002 (15) 21 Subsidiaries of the Registrant (1) - --------------------------- (1) Filed with the Company's Registration Statement on Form S-4, Registration No. 333-64929 and incorporated herein by reference. (2) Filed with the AIIG's Annual Report on Form 10-K for the year ended December 31, 1992 and incorporated herein by reference. (3) Filed with the AIIG's Annual Report on Form 10-K for the year ended December 31, 1993 and incorporated herein by reference. (4) Filed with the AIIG's Annual Report on Form 10-K for the year ended December 31, 1994 and incorporated herein by reference. (5) Filed with the AIIG's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995 and incorporated herein by reference. (6) Filed with the AIIG's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996 and incorporated herein by reference. (7) Filed with the AIIG's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 and incorporated herein by reference. (8) Filed with the AIIG's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997 and incorporated herein by reference. (9) Filed with AIIG's Annual Report on Form 10-K for the year ended December 31, 1996 and incorporated herein by reference. (10) Filed with AIIG's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 and incorporated herein by reference. (11) Filed with the Company's Annual Report on Form 10-K for the year ended December 31, 1999. (12) Filed with AIIG's Quarterly Report on Form 10-Q for the quarter ended June 30, 2000 and incorporated herein by reference. (13) Filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2000 and incorporated herein by reference. (14) Filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2001. (15) Filed with the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2002 and incorporated herein by reference. -----END PRIVACY-ENHANCED MESSAGE-----