-----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, CXSv00kN2zkAvf686kI4l30daONROrDaBM15bkr7EK53Uv9ApfcHr2C7zzpFyIrx 4eAsiYnMXBJHi8n0VAMnVw== /in/edgar/work/20000731/0000893220-00-000908/0000893220-00-000908.txt : 20000921 0000893220-00-000908.hdr.sgml : 20000921 ACCESSION NUMBER: 0000893220-00-000908 CONFORMED SUBMISSION TYPE: 35-CERT PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20000731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLUMBIA ENERGY GROUP CENTRAL INDEX KEY: 0000022099 STANDARD INDUSTRIAL CLASSIFICATION: [4923 ] IRS NUMBER: 131594808 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 35-CERT SEC ACT: SEC FILE NUMBER: 070-08905 FILM NUMBER: 682569 BUSINESS ADDRESS: STREET 1: 13880 DULLES CORNER LANE STREET 2: SUITE 300 CITY: HENDERON STATE: VA ZIP: 20171-4600 BUSINESS PHONE: 7035616000 MAIL ADDRESS: STREET 1: 13880 DULLES CORNER LANE STREET 2: SUITE 300 CITY: HERNDON STATE: VA ZIP: 20171-4600 FORMER COMPANY: FORMER CONFORMED NAME: COLUMBIA GAS SYSTEM INC DATE OF NAME CHANGE: 19920703 35-CERT 1 e35-cert.txt COLUMBIA INSURANCE CORPORATION, LTD RULE 24 1 July 31, 2000 Securities and Exchange Commission Judiciary Plaza 450 Fifth Street, NW Washington, DC USA 20549 Interim Report Under Rule 24 of the Public Utility Holding Company Act of 1935 Columbia Insurance Corporation, Ltd. 13880 Dulles Corner Lane Herndon, VA 20171-4600 File No. 70-8905 File No. 70-9371 Gentlemen: In compliance with the terms and conditions of Rule 24 under the Public Utility Holding Company Act of 1935, and the Order of the Commission dated October 25, 1996 authorizing the financing transactions and business activities as more fully described in the Joint Application/Declaration, as amended (the "application"), the undersigned hereby submits the following information applicable to Columbia Insurance Corporation, Ltd. ("CICL") for the January 1, 2000 through June 30, 2000 period. 1. Provide a general description of loss exposure/experience for automobile, "all-risk" property, and general liability insurance coverage. CICL was licensed in 1996 to reinsure certain of the "all risks" property, general and automobile liability risks at Columbia Energy Group ("Columbia"), its subsidiaries and associates. It continues to write these risks under reinsurance agreements with qualified primary insurance carriers. At June 30, 1999 the General and Automobile Liability reinsurance agreement was renewed at existing terms and conditions. At July 1, 1999 a new All Risks Property reinsurance agreement was negotiated, with retentions remaining the same as in the prior period. Details of the coverages and limits reinsured, by line of business and underwriting year, are provided as Exhibit 1. As further discussed under point 2 below, CICL's loss experience under each of the reinsurance agreements continues to fall within the "expected" range, based on the actuarial analysis of its losses. There have been 19 losses reported and $4,619,387 in paid claims since inception - $1,614,938 for the period under review. 2 2. Provide an analysis by subsidiary or associate company of auto liability, general liability, and property losses and expenses incurred during the six-month period as compared to premiums paid. For the period under review CICL's incurred loss to earned premium ratios were as follows: Earned Premium Incurred Loss Ratio (incl. IBNR) All Risk Property US $1,200,000 $ 952,072 79% General/ Auto Liability US $1,520,000 $2,000,000 132% The above ratios reflect a conservative reserving position, as is appropriate for a company in its early years of writing business. 3. Provide an analysis by subsidiary or associate company of claims paid by CICL on behalf of such subsidiary or associate company and include the lead-in reserve available to CICL and end-of-period reserve balance. Reported beginning-of-period loss reserves and end-of-period loss reserves on CICL's programs as at December 31, 1999 and June 30, 2000 were $15,334,004 and $16,542,134, respectively. Detail of incurred and paid losses, by line of business and underwriting year, is provided in Exhibit 2. 4. Provide a listing that illustrates the increases and decreases to premiums for each subsidiary or associate company as a result of the operations of CICL and loss experience of each subsidiary as a result of operations of CICL. As of the latest renewal, CICL has implemented a premium allocation model based on exposure and experience of each subsidiary. Exhibit 3 highlights the model which uses an 80%/20% weighting for experience/exposure to derive premium. The GL premium paid to CICL was reduced by 4.7% for the 1999/00 period based on positive experience through the first policy periods. The all-risk premium was increased by 22% due to an increased loss activity. The model is presented in Exhibit 4. 5. Provide a statement of actual savings achieved by Columbia as a result of the operations of CICL. Exhibit 5 gives the estimated cost of purchasing guaranteed cost (commercial) coverage for the layers of insurance reinsured to CICL for 1996/97, 1997/98, 1998/99 and 1999/2000, compared to the actual premium paid to CICL, for the period from its incorporation to June 30, 2000. The comparison is made using market quotes obtained for commercial coverage. As shown in the exhibit, in the current period Columbia has realized immediate pre-tax savings of approximately 13% by reinsuring certain of the risks to CICL. Cumulatively, taking into account investment income earned on reserves, savings could be as high as 14%. 3 6. Provide a copy of CICL's income statement and balance sheet, including any notes thereto. CICL's income statement and balance sheet including any notes are attached. Very truly yours, COLUMBIA INSURANCE CORPORATION, LTD. By: /s/ N. A. Parillo ---------------------------- N. A. Parillo, President 4 EXHIBIT 1 COLUMBIA INSURANCE CORPORATION, LTD. INTERIM REPORT RULE 24 - FILE NO. 70-8905 DESCRIPTION OF CURRENT BUSINESS WRITTEN THROUGH: 6/30/00
ALL RISK PROPERTY LIMITS FRONT PERIOD PER OCC/ AGGREGATE DEDUCTIBLE FRONTER COMPANY 6/30/96-97 $500,000-$650,000/$3MM $100,000-250,000 Arkwright 6/30/97-98 $5000,000-$650,000,000/$3MM $100,000-250,000 Arkwright 6/30/98-99 $500,000-$650,000/$3MM $100,000-250,000 Hartford Steam Boiler 6/30/99-00 $500,000-$650,000/$3MM $100,000-250,000 Hartford Steam Boiler GENERAL/AUTO LIABILITY LAYER PER OCC/AGG LIMIT ATTACHMENT FRONTER 7/1/96-97 Primary US$800,000/3,000,000 $200,000 AEGIS Excess US$1,000,000/1,000,000 $1,000,000 AEGIS 7/1/97-98 Primary US$800,000/3,800,000* $200,000 AEGIS Excess US$1,000,000/1,500,000* $1,000,000 AEGIS 7/1/98-99 Primary US$800,000/3,000,000 $200,000 AEGIS Excess US$1,000,000/1,000,000 $1,000,000 AEGIS 7/1/99-00 Primary US$800,000/3,000,000 $200,000 AEGIS Excess US$1,000,000/1,000,000 $1,000,000 AEGIS
* Limits for the 1997/98 reinsurance were changed retroactively. There was no change in 1998-99 limits. 5 COLUMBIA INSURANCE CORPORATION LTD. INTERIM REPORT RULE 24 FILE NO. 70-8905 EXHIBIT 2 INCURRED AND PAID LOSSES FOR THE PERIOD 1/1/00 - 6/30/00
PAID MOVEMENT LEAD-IN LOSS LOSSES IN OSLR AT IBNR AT TOTAL TOTAL FROM POLICY YEAR COVERAGE RESERVES PERIOD 6/30/00 6/30/00 RESERVE INCURRED 12/31/99 7/1/96-97 General Liability 2,056,000 726,613 - 1,329,387 1,329,387 2,056,000 - 7/1/97-98 General Liability 3,989,000 271,136 550,000 3,167,864 3,717,864 3,989,000 - 7/1/98-99 General Liability 3,751,000 - 800,000 3,200,000 4,000,000 4,000,000 249,000 7/1/99-00 General Liability 2,000,000 - 1,450,000 2,550,000 4,000,000 4,000,000 2,000,000 6/30/96-97 All Risk 650,000 - - - - - (650,000) 6/30/97-98 All Risk 462,000 - 1,017,000 - 1,017,000 1,017,000 555,000 6/30/98-99 All Risk 926,004 - 593,000 50,000 643,000 643,000 (283,004) 6/30/99-00 All Risk 1,500,000 617,189 1,784,883 50,000 1,834,883 2,452,072 952,072 ----------------------------------------------------------------------------------------- 15,334,004 1,614,938 6,194,883 10,347,251 16,542,134 18,157,072 2,823,068 =========================================================================================
INCEPTION TO DATE PAID LOSSES 7/1/96-97 General Liability 726,613 7/1/97-98 General Liability 1,571,136 7/1/98-99 General Liability - 7/1/99-00 General Liability - 6/30/96-97 All Risk - 6/30/97-98 All Risk 401,309 6/30/98-99 All Risk 1,303,140 6/30/99-00 All Risk 617,189 --------------- - 4,619,387 =============== 6 COLUMBIA INSURANCE CORPORATION, LTD. EXHIBIT 3 INTERIM REPORT RULE 24 FILE NO. 70-8905 PREMIUM ALLOCATION MODEL FOR THE PERIOD 1/1/00 -6/30/00 TOTAL CICL PREMIUM ALLOCATION Line of Business Liability All-Risk Total ------------------------------------- Premium Account 3,041,000 2,400,000 5,441,000 ------------------------------------- Weighting Weighting -------------------------- Exposure 80.00% 80.00% Loss 20.00% 20.00%
LIABILITY ALL-RISK TOTAL CODE OPERATING COMPANY PREMIUM PREMIUM PREMIUM - ---------------------------------------------------------------------------------------------------------------- 12 COLUMBIA ENERGY GROUP SERVICE CORP. 23,955 46,235 70,190 14 COLUMBIA GULF TRANSMISSION 161,880 517,772 679,652 15 COLUMBIA ENERGY SERVICES CORPORATION 304,955 26,897 331,852 16 ATLANTIC ENERGY, INC. - 11,730 11,730 16 COLUMBIA PROPANE CORPORATION 310,476 126,383 436,859 17 COLUMBIA ELECTRIC CORPORATION 2,888 213,107 215,995 18 COLUMBIA LNG CORPORATION 4,074 190,607 194,681 20 COLUMBIA NETWORK SERVICES 2,433 172 2,605 32 COLUMBIA GAS OF KENTUCKY, INC. 89,699 5,782 95,481 34 COLUMBIA GAS OF OHIO, INC. 918,205 90,993 1,009,198 35 COLUMBIA GAS OF MARYLAND, INC. 21,253 1,935 23,188 37 COLUMBIA GAS OF PENNSYLVANIA, INC. 502,894 19,976 522,870 38 COLUMBIA GAS OF VIRGINIA, INC. 119,006 13,298 132,304 51 COLUMBIA GAS TRANSMISSION 546,685 1,132,860 1,679,545 53 COLUMBIA NATURAL RESOURCES 27,731 2,253 29,984 11 COLUMBIA ENERGY GROUP 2,433 - 2,433 CTC 2,433 - 2,433 - ---------------------------------------------------------------------------------------------------------------- 3,041,000 2,400,000 5,441,000 ================================================================================================================
7 COLUMBIA INSURANCE CORPORATION LTD. INTERIM REPORT RULE 24 FILE NO. 70-8905 EXHIBIT 4 ALL-RISK PREMIUM ALLOCATION FOR THE PERIOD 1/00 -6/30/00 ------------- Allocated Premium Amount: 2,400,000 ------------- Actual Premium Amount: 2,400,000 ------------- Weighting Factors ------------ Exposure 80.00% ------------ Loss 20.00%
------------- EXPOSURE EXPOSURE LOSS SELECTED BASE EXPOSURE BASED LOSS BASED W/AVG CODE OPERATING COMPANY FACTOR % PREMIUM % PREMIUM PREMIUM - --------------------------------------------------------------------------------------------------------------------------------- 12 COLUMBIA ENERGY GROUP SERVICE CORP. 90,463 2.56% 61,469 0.00% - 46,235 14 COLUMBIA GULF TRANSMISSION 680,635 19.27% 462,483 37.65% 903,573 517,772 15 COLUMBIA ENERGY SERVICES CORPORATION 52,627 1.49% 35,759 0.00% - 26,897 16 ATLANTIC ENERGY, INC. 22,951 0.65% 15,595 0.00% - 11,730 16 COLUMBIA PROPANE CORPORATION 122,489 3.47% 83,230 0.00% - 126,383 17 COLUMBIA ELECTRIC CORPORATION 200,879 5.69% 136,495 24.47% 587,322 213,107 18 COLUMBIA LNG CORPORATION 372,944 10.56% 253,411 0.00% - 190,607 20 COLUMBIA NETWORK SERVICES 337 0.01% 229 0.00% - 172 32 COLUMBIA GAS OF KENTUCKY, INC. 11,314 0.32% 7,687 0.00% - 5,782 34 COLUMBIA GAS OF OHIO, INC. 178,038 5.04% 120,975 0.00% - 90,993 35 COLUMBIA GAS OF MARYLAND, INC. 3,787 0.11% 2,573 0.00% - 1,935 37 COLUMBIA GAS OF PENNSYLVANIA, INC. 39,085 1.11% 26,557 0.00% - 19,976 38 COLUMBIA GAS OF VIRGINIA, INC. 26,018 0.74% 17,679 0.00% - 13,298 51 COLUMBIA GAS TRANSMISSION 1,726,096 48.87% 1,172,861 37.88% 909,105 1,132,860 53 COLUMBIA NATURAL RESOURCES 4,409 0.12% 2,996 0.00% - 2,253 ------------------------------------------------------------------------------------------------------ Total Exposure Base 3,532,072 100.00% 2,400,000 100.00% 2,400,000 2,400,000 ======================================================================================================
8 COLUMBIA INSURANCE CORPORATION, LTD. INTERIM REPORT RULE 24 EXHIBIT 5 ESTIMATED SAVINGS - CAPTIVE COMPARED TO COMMERCIAL INSURANCE
CICL OPTION POLICY PERIOD 1996-97 1997-98 1998-99 1999-00 CUM PREMIUM - -------------------------------------------------------------------------------------------------------------------- GL/AL $ 3,250,672 $ 3,949,662 $ 3,190,770 $ 3,041,000 All-Risk $ 1,397,203 $ 1,618,057 $ 1,960,760 $ 2,400,000 ----------------------------------------------------------------------- Total $ 4,647,875 $ 5,567,719 $ 5,151,530 $ 5,441,000 $ 20,808,124 Investment Income (1,500,000) Pre-tax saving $ 602,125 $ 179,511 $ 79,149 $ 784,100 Total Cost 19,308,124
GUARANTEED COST OPTION POLICY PERIOD 1996-97 1997-98 1998-99 1999-00 - -------------------------------------------------------------------------------------------------------------------- GL/AL $ 2,750,000 $ 3,159,730 $ 2,552,616 $ 3,345,100 All-risk $ 2,500,000 $ 2,587,500 $ 2,678,063 $ 2,880,000 ----------------------------------------------------------------------- Total $ 5,250,000 $ 5,747,230 $ 5,230,679 $ 6,225,100 $ 22,453,009 ANNUAL SAVINGS 11% 3% 2% 13% CUMULATIVE SAVINGS 14% (INCL. INVESTMENT INCOME)
9 Columbia Insurance Corporation, LTD Income Statement Year-to-Date, June 30, 2000 ($000) Operating Revenues 2,721 ------ Operating Expenses Operation & maintenance 3,067 Other taxes -- ------ Total Operating Expenses 3,067 ------ Operating Income (Loss) (346) ------ Other Income (Deductions) Interest income and other, net 506 Interest expense and related charges -- ------ Total Other Income (Deductions) 506 ------ Income (Loss) Before Income Taxes 160 Income Taxes 56 ------ Net Income (Loss) 104 ======
10 Columbia Insurance Corporation, LTD Balance Sheet As of June 30, 2000 ($000) ASSETS Investment and other assets 11,464 ------- Current Assets Cash and temporary cash investments 4,797 Accounts receivable, net Customers -- Intercompany 291 Other 202 Prepayments 41 Other -- ------- Total Current Assets 5,331 ------- Deferred Charges 1,081 ------- TOTAL ASSETS 17,876 ======= CAPITALIZATION AND LIABILITIES Capitalization Common Stock Equity Common stock, $25 par value (4,800 shares outstanding) 120 Additional paid-in capital 880 Retained earnings 248 ------- Total Capitalization 1,248 ------- Current Liabilities Accounts and drafts payable 20 Intercompany accounts payable 264 Accrued taxes (198) Other -- ------- Total Current Liabilities 86 ------- Other Liabilities and Deferred Credits 16,542 ------- TOTAL CAPITALIZATION AND LIABILITIES 17,876 =======
-----END PRIVACY-ENHANCED MESSAGE-----