ORDER ADOPTING REPORT OF EXAMINATION
I, Andrew N. Mais, Insurance Commissioner of the State of Connecticut, having fully considered and reviewed the Examination Report (the "Report") of The Travelers Reinsurance Pool ( the "Company") as of December 31, 2019, do hereby adopt the findings and recommendations contained therein based on the following findings and conclusions. TO WIT:
1. I, Andrew N. Mais, Insurance Commissioner of the State of Connecticut and as such is charged with the duty of administering and enforcing the provisions of Title 38a of the Connecticut General Statutes ("C.G.S.").
2. The Company is a domestic insurer authorized to transact the business of insurance in the State of Connecticut.
3. On May 5, 2021 , the verified Report of the Company was filed with the Connecticut Insurance Department (the "Department").
4. In accordance with C.G.S. §38a-14(e)(3), the Company was afforded a period of thirty (30) days within which to submit to the Department a written submission or rebuttal with respect to any matters contained in the Report.
5. On June 3, 2021, the Company notified the Department of certain responses and comments on certain items contained in the Report.
6. Following review of the Report, it was deemed necessary and appropriate to modify the Report. A copy of the Report is attached hereto and incorporated herein as Exhibit A. NOW, THEREFORE, it is ordered as follows:
1. That the Report of the Company is hereby adopted as filed with the Department.
2. That the Company shall comply with the recommendations set forth in the Report, and that failure by the Company to so comply shall result in sanctions or administrative action as provided by Title 38a of the C.G.S.
3. Section 38a-14(e)(4)(A) of the CGS requires that:
"The secretary of the Board of Directors or similar governing body of the entity shall provide a copy of the report or summary to each director and shall certify to the Commissioner, in writing, that a copy of the report or summary has been provided to each director."
Please address the certification to the Commissioner but send said certification to the care/attention of Mark Murphy, Supervising Examiner, of the Financial Regulation Division.
4. Section 38a-14(e)(4)(B) of the CGS requires that:
"Not later than one hundred twenty days after receiving the report or summary the chief executive officer or the chief financial officer of the entity examined shall present the report of summary to the entity's Board of Directors or similar governing body at a regular or special meeting."
This will be verified by the Insurance Department either through analysis or examination follow-up.
Dated at Hartford, Connecticut, this 15th day of June, 2021. -~g"-/} I ___. - Andrew N. Mais Insurance Commissioner Exhibit A
MULTI-ENTITY EXAMINATION REPORT OF:
NAIC# NAIC# 25658 The Travelers Indemnity Company 25674 Travelers Property Casualty Company of America 19038 Travelers Casualty and Surety Company 36161 Travelers Property Casualty Insurance Company 25623 The Phoenix Insurance Company 28188 TravCo Insurance Company 19070 The Standard Fire Insurance Company 29696 Travelers Excess and Surplus Lines Company 25887 United States Fidelity and Guaranty Company 27998 The Travelers Home and Marine Insurance Company 19046 Travelers Casualty Insurance Company of America 36145 Travelers Personal Security Insurance Company 41483 Farmington Casualty Company 38130 Travelers Personal Insurance Company 19062 The Automobile Insurance Company of Hartford, CT 36463 Discover Property & Casualty Insurance Company 25682 The Travelers Indemnity Company of Connecticut 10213 Discover Specialty Insurance Company 25615 The Charter Oak Fire Insurance Company 24031 Northland Casualty Company 24015 Northland Insurance Company 10819 American Equity Specialty Insurance Company 25666 The Travelers Indemnity Company of America 24767 St. Paul Fire and Marine Insurance Company 19224 St. Paul Protective Insurance Company 24791 St. Paul Mercury Insurance Company 36170 Travelers Casualty Company of Connecticut 41769 The Travelers Casualty Company 40282 Travelers Commercial Casualty Company 41750 Travelers Constitution State Insurance Company 36137 Travelers Commercial Insurance Company 24775 St. Paul Guardian Insurance Company 42811 Gulf Underwriters Insurance Company
(collectively defined as The Travelers Reinsurance Pool and its 100% reinsured affiliates)
AS OF DECEMBER 31, 2019
BY THE
CONNECTICUT INSURANCE DEPARTMENT TABLE OF CONTENTS Page
Salutation 1
Scope of Examination 1
Organizational Structure 3
History 4
Organizational Chart 11
Management and Control 12
Significant Related Party Agreements 14
Territory and Plan of Operation 15
Reinsurance 16
Information Technology Controls 20
Accounts and Records 20
Financial Statements 21
Losses and Loss Adjustment Expenses 21
Growth of Company 21
Subsequent Events 21
Conclusion 22
Signature 23
Appendix A 24 Assets 24 Liabilities 29 Statement of Income 34
Appendix B 39 Growth of the Company 39 April 7, 2021
The Honorable Andrew N. Mais Commissioner of Insurance State of Connecticut Insurance Department 153 Market Street Hartford, Connecticut 06103
Dear Commissioner Mais:
In compliance with your instructions and pursuant to the requirements of Section 38a-14 of the General Statutes of the State of Connecticut (COS), the undersigned has made a financial examination of the condition and affairs of the Connecticut companies within the
TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
(hereinafter referred to as the Company or TRY Pool) incorporated under the laws of the State of Connecticut and having its statutory home office and its main administrative office located at One Tower Square, Hartford, Connecticut. The report on such examination is submitted herewith.
SCOPE OF EXAMINATION
The previous examination of the Company was conducted by the Financial Regulation Division of the Connecticut Insurance Department (Department), as of December 31, 2014. The current examination, which covers the period from January 1, 2015 to December 31, 2019, was conducted virtually and at the statutory home office of the Company.
Concurrent examinations were performed for the following Connecticut and non-Connecticut domestic property and casualty companies within The Travelers Companies, Inc. (TRY), collectively referred to as TRY Pool:
St. Paul Fire and Marine Insurance Company Travelers Casualty and Surety Company The Travelers Indemnity Company (IND or TINDY) The Phoenix Insurance Company The Standard Fire Insurance Company United States Fidelity and Guaranty Company Travelers Casualty Insurance Company of America Farmington Casualty Company The Automobile Insurance Company of Hartford, Connecticut The Travelers Indemnity Company of Connecticut The Charter Oak Fire Insurance Company Northland Insurance Company *St. Paul Surplus Lines Insurance Company St. Paul Protective Insurance Company The Travelers Indemnity Company of America *Northfield Insurance Company Travelers Casualty Company of Connecticut Travelers Commercial Casualty Company Travelers Commercial Insurance Company St. Paul Mercury Insurance Company Travelers Property Casualty Company of America The Travelers Casualty Company Travelers Property Casualty Insurance Company TravCo Insurance Company Travelers Constitution State Insurance Company Northland Casualty Company Travelers Excess and Surplus Lines Company Travelers Personal Insurance Company The Travelers Home and Marine Insurance Company St. Paul Guardian Insurance Company Travelers Personal Security Insurance Company Discover Specialty Insurance Company *Fidelity and Guaranty Insurance Underwriters, Inc. American Equity Specialty Insurance Company TRAVELERS REINSURANCE POOL AND ITS 100% REIN SURED AFFILIATES
Discover Property & Casualty Insurance Company *Non Connecticut domestic
In addition, concurrent examinations of the following entities which cede 100% of their direct business to the TRY Pool were conducted: - *American Equity Insurance Company Gulf Underwriters Insurance Company *Select Insurance Company *Fidelity and Guaranty Insurance Company *The Travelers Lloyds Insurance Company *Travelers Lloyds of Texas Insurance Company
*Non Connecticut domestic Arizona, Delaware, Iowa, Texas, and Wisconsin, which regulate companies that share in the underwriting results of the TRY Pool, or cede 100% of their direct business to the TRY Pool, participated in this examination with an objective of aligning their examinations with Connecticut.
The Department also performed a concurrent examination of Travelers Casualty and Surety Company of America (TCSA), a Connecticut domestic insurer.
Additionally, the Florida Office of Insurance Regulation concurrently conducted a financial examination of First Floridian Home and Auto Insurance Company.
As part of the examination planning procedures, the Department reviewed the following materials submitted by the Company:
• Board of Director (Board) and other committee minutes (through the latest 2020 minutes); • statutory audit reports completed by the Company's independent certified public accountants, KPMG LLP (KPMG): • Management's Discussion and Analysis; • Statements of Actuarial Opinion; • documentation supporting Section 404 of the Sarbanes-Oxley Act of 2002; • Annual Statements filed with the Department; and • reports of the Company's Internal Audit Department.
A comprehensive review was made of the financial analysis files and documents submitted to the Financial Analysis Unit of the Department, reports from the National Association of Insurance Commissioners (NAIC) database, as well as the independent audit reports which indicated no material concerns with respect to financial condition or regulatory compliance issues.
Work papers prepared by KPMG in connection with its annual statutory audit were reviewed and relied upon to the extent deemed appropriate.
2 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
Risk & Regulatory Consulting, LLC (RRC) was engaged by the Department to conduct an evaluation of the Information Technology (IT) controls.
Milliman was engaged by the Department to conduct an evaluation of the Company's reserving, reinsurance and pricing/underwriting processes.
We conducted our examination in accordance with the NAIC Financial Condition Examiners Handbook (the Handbook). The Handbook requires that we plan and perform the examination to evaluate the financial condition, assess corporate governance, identify current and prospective risks of the company and evaluate system controls and procedures used to mitigate those risks. An examination also includes identifying and evaluating significant risks that could cause an insurer's surplus to be materially misstated both currently and prospectively.
All accounts and activities of the company were considered in accordance with the risk-focused examination process. This may include assessing significant estimates made by management and evaluating management's compliance with Statutory Accounting Principles. The examination does not attest to the fair presentation of the financial statements included herein. If, during the course of the examination an adjustment is identified, the impact of such adjustment will be documented separately following the Company's financial statements.
This examination report includes significant findings of fact and general information about the insurer and its financial condition. There may be other items identified during the examination that, due to their nature (e.g., subjective conclusions, proprietary information, etc.), are not included within the examination report but separately communicated to other regulators and/or the company.
Failure of items in this report to add to totals or for totals to agree with captioned amounts is due to rounding.
ORGANIZATIONAL STRUCTURE
The majority of the Company's United States business, except for the bond and surety products, is primarily written through entities that participate in the TRV Pool.
The TRV Pool provides a wide range of property-casualty insurance products and services to business, government units and individuals. There are thirty-five (35) entities participating in the TRV Pool, where all direct business written and assumed by each participant is ceded to TINDY. TINDY, which acts as the lead insurer, retro-cedes all its total and assumed business (net of external reinsurance) to each inter-company pool participant based upon each participant's respective participation percentage. An additional six (6) entities ceded 100% of their direct business to the TRV Pool but do not assume any business from the TRV Pool.
3 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
HISTORY
The Travelers Indemnity Company IND derives its corporate existence and powers from a charter granted and approved by a Special Act of the General Assembly of the State of Connecticut on March 25 , 1903. IND commenced business on May 12, 1906.
In January 1996, Travelers Insurance Group Holdings Inc. (TIGHI) was formed to hold Travelers Property Casualty Corporation's (TPC) property and casualty insurance subsidiaries. In April 1996, TIGHI purchased from Aetna Services, Inc. (Aetna) all of Aetna's significant property and casualty insurance subsidiaries for approximately $4.2 billion in cash.
On October 8, 1998, Citigroup merged with and into a newly formed wholly owned subsidiary of Travelers Group Inc. (Travelers Group). Also, on this date, Travelers Group changed its name to Citigroup Inc. (Citigroup).
On August 20, 2002, Citigroup made to its stockholders, a tax-free distribution of a portion of its ownership interest in TPC which, together with the shares issued in an initial public offering in March 2002, represented more than 90% of TPC' s ownership. TPC became the ultimate holding controlling entity.
On November 16, 2003, TPC and subsidiaries entered into an agreement and plan of merger with The St. Paul Companies, Inc. (SPC). Under the terms of the merger agreement, each share of TPC's Class A and Class B common stock was exchanged for 0.4334 shares of SPC's common stock. On March 3, 2004, the merger was approved by the Commissioner of the State of Connecticut Insurance Department (Commissioner) and became effective on April 1, 2004, forming the St. Paul Travelers Companies, Inc. (St. Paul Travelers).
On July 1, 2005, TPC combined the St. Paul Insurance Pool with the Travelers Property Casualty Pool to form the St. Paul Travelers Reinsurance Pool, retroactive to January 1, 2005. The St. Paul Travelers Reinsurance Pool changed its name to the TRY Pool on February 16, 2007.
On February 16, 2007, St. Paul Travelers changed its name to The Travelers Companies, Inc. (TRY) and began trading on the New York Stock Exchange under the new symbol "TRY". The principal executive offices of the Company are in New York City, but executive offices are maintained in Hartford, Connecticut and St. Paul, Minnesota.
On October 1, 2013, First Trenton Indemnity Company (FTI), a Connecticut domiciled insurance entity was merged with and into IND. As a result, FTI's business is included in the TRY Pool.
On January 1, 2018, The Premier Insurance Company of Massachusetts, a Connecticut domiciled insurance entity, was merged with and into its parent, IND, with IND being the surviving entity.
On January 1, 2019, Jupiter Holdings, Inc. (Jupiter), a subsidiary of IND, was dissolved in accordance with Minnesota Statutes Chapter 302A and its corporate existence was terminated. In accordance with Statements of Statutory Accounting Principles No. 68, Business Combinations
4 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES and Goodwill, the statutory merger method was utilized, canceling the equity of Jupiter, without the issuance of new equity and incorporating the assets and liabilities of Jupiter directly within IND's financial statements. Following the dissolution, American Equity Insurance Company and Northland Insurance Company became direct subsidiaries of IND.
IND is a wholly owned subsidiary of TIGHI, a non-insurance holding company which is a wholly owned subsidiary of TPC, a non-insurance holding company. TPC is a wholly owned subsidiary of TRV, a publicly traded holding company.
IND is the lead company of the TRV Pool. Under the terms of the intercompany pooling arrangement, the property-casualty underwriting risks for substantially all lines of business of the intercompany pool participants are reinsured with IND. The pool of net underwriting risks remaining after reinsurance is transacted with third parties by IND is then retroceded to the pool participants based on pool participation percentages.
Travelers Casualty and Surety Company (TCS) In May 1907, TCS commenced business under the laws of the State of Connecticut as The Accident and Liability Company, succeeding The Aetna Accident Insurance Company, which was formed in 1883 as Hartford Equitable Indemnity Company (subsequently Hartford Equitable and Indemnity Company). The name was changed to The Aetna Casualty and Surety Company in 1917. The present name became effective July 1, 1997. TCS is a wholly owned subsidiary of TIGHI.
The Phoenix Insurance Company (PHX) PHX derives its corporate existence and powers from a charter that was granted in the 1850 session of the General Assembly of the State of Connecticut. PHX was incorporated in June 1850 and commenced business in July 1850. PHX is a wholly owned subsidiary of IND.
The Standard Fire Insurance Company (STD) STD received its charter on July 6, 1905, from the General Assembly of the State of Connecticut. It commenced business on March 26, 1910. STD is a wholly owned subsidiary of TIGHI.
United States Fidelity and Guaranty Company (USFG) USFG was incorporated as a property and casualty insurance company under the laws of Maryland on March 19, 1896, and commenced business on August 1, 1896.
Until January 25, 1999, USFG was a wholly owned subsidiary of USF&G Corporation, a publicly traded insurance holding company incorporated in the State of Maryland.
In April 1998, SPC purchased USF&G Corporation. As a result, USF&G Corporation became a wholly owned subsidiary of SPC. Effective January 25, 1999, USF&G Corporation merged with and into St. Paul Fire and Marine Insurance Company (FM), with FM as the surviving company. As a result of this transaction, USF&G Corporation ceased to exist, and all direct and indirect subsidiaries of USF&G Corporation, including USFG, became subsidiaries of FM.
5 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
On April 1, 2004, USFG's ultimate parent, SPC, completed a merger with TPC forming The St. Paul Travelers Companies, Inc.
On December 15, 2009, USFG redomesticated from Maryland to Connecticut. USFG is a wholly owned subsidiary of FM.
Travelers Casualty Insurance Company of America (TLL) TLL, formerly Travelers Casualty and Surety Company of Illinois and Aetna Casualty and Surety Company of Illinois, was incorporated under the laws of the State of Illinois on August 12, 1971, and commenced business on October 18, 1971. Effective January 1, 2004, TLL redomesticated to Connecticut and the present name was adopted. TLL is a wholly owned subsidiary of TCS.
Farmington Casualty Company (FAR) FAR was incorporated on August 24, 1982, under Section 33-286 of the CGS, by a certificate of formation issued by the Commissioner. It commenced business on October 1, 1982. FAR is a wholly owned subsidiary of TCS.
The Automobile Insurance Company of Hartford, Connecticut (AUT) The Connecticut General Assembly granted AUT a charter on June 25, 1965, and commenced business on August 9, 1968. AUT is a wholly owned subsidiary of STD.
The Travelers Indemnity Company of Connecticut (ICT) ICT was originally known as The Travelers Indemnity Company of Rhode Island. ICT was incorporated in May 1859, by an Act of the General Assembly of the State of Rhode Island. It commenced business in September 1860. Effective December 31 , 1994, ICT redomesticated to Connecticut and simultaneously changed its name to the current name. ICT is a wholly owned subsidiary of PHX.
The Charter Oak Fire Insurance Company (OAK) OAK was incorporated on April 29, 1931 , by a Special Act of the General Assembly of the State of Connecticut and commenced business on October 14, 1935. OAK is a wholly owned subsidiary of IND.
Northland Insurance Company (NLI) NLI was incorporated on January 16, 1948, and commenced business on March 1, 1948. In 1969, NLI's former parent, Industrial Credit Company, was sold and its name was changed to Northland Securities Corporation (NSC). NSC was liquidated on March 10, 1970, and all assets and liabilities were transferred to The Northland Company (TNC). On December 31, 1993, Northland Insurance Holding Company (NIHC), a Minnesota corporation and insurance holding company wholly owned by TNC, acquired all stock of NLI. In 1994, NIHC was renamed Jupiter Holding, Inc. (JHI). NLI redomesticated from Minnesota to Connecticut on December 15, 2010. NLI is a wholly owned subsidiary of JHI. On January 1, 2019, JHI was dissolved in accordance with Minnesota Statutes Chapter 302A, and its corporate existence was terminated. Following this dissolution, NLI is now a direct subsidiary of IND.
6 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
The Travelers Indemnity Company of America (AMR) AMR was incorporated on January 2, 1946, under the laws of Georgia and commenced business on May 1, 1946. AMR conducted business under the name of Standard National Insurance Company until November 1, 1971, when the present name was adopted. AMR redomesticated from Georgia to Connecticut effective July 1, 1997. AMR is a wholly owned subsidiary of PHX.
St. Paul Protective Insurance Company (PROT) PROT was incorporated on December 30, 1931, as the Allstate Fire Insurance Company (AFIC), under the laws of the State of Illinois and commenced business on February 2, 1932. PROT was organized by interests identified with Sears, Roebuck and Co. and operated as a wholly owned subsidiary of Allstate Insurance Company (AIC).
On March 18, 1996, AIC contributed all issued and outstanding stock of its three wholly owned insurance subsidiaries of the Northbrook Companies to Northbrook Holding, Inc. (NHI) in consideration of 75,800 shares of common stock of NHL NHI became a subsidiary of AIC, and the Northbrook Companies (Northland Property and Casualty Insurance Company (NPC), Northbrook Indemnity Company and Northbrook National Insurance Company (NNIC)) became wholly owned subsidiaries of NHL
AFIC changed its name to NPC effective July 30, 1996. On July 31, 1996, AIC sold its investment in NHI to FM. The name was changed to its present one by charter amendment on April 29, 2003. On December 1, 2013, PROT redomesticated from Illinois to Connecticut. PROT is a wholly owned subsidiary of NHL
Travelers Casualty Company of Connecticut (TCT) Pursuant to Section 33-286 of the CGS, on January 3, 1990, TCT was issued a certificate of incorporation in the name of Aetna Casualty Company of Connecticut. TCT commenced business on January 12, 1990. The present name became effective on July 1, 1997. TCT is a wholly owned subsidiary of TCS.
Travelers Commercial Casualty Company (TCC) TCC was incorporated under the laws of Delaware on May 20, 1981, as Penn Casualty Insurance Company and commenced business on July 1, 1981. On December 24, 1991, TCC redomesticated to Missouri and changed its name to The Travelers Indemnity Company of Missouri. Effective October 1, 2001 , TCC redomesticated to Connecticut and the present name was adopted. TCC is a wholly owned subsidiary of IND.
Travelers Commercial Insurance Company (TCI) Pursuant to Section 33-286 of the CGS, on January 3, 1990, TCI was issued a certificate of incorporation in the name of Aetna Commercial Insurance Company and commenced business on January 12, 1990. The present name became effective on July 1, 1997. TCI is a wholly owned subsidiary of TCS.
Travelers Property Casualty Company of America (ILL) ILL was incorporated under the laws of Illinois on July 29, 1971, as The Travelers Indemnity Company of Illinois. It commenced business on August 4, 1971 . Effective January 1, 2004, ILL
7 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES redomesticated to Connecticut and the present name was adopted. ILL is a wholly owned subsidiary of PHX.
Travelers Property Casualty Insurance Company (TIN) Pursuant to Section 33-286 of the CGS, on January 3, 1990, TIN was issued a certificate of incorporation in the name of Aetna Insurance Company and commenced business on January 12, 1990. The present name became effective on July 1, 1997. TIN is a wholly owned subsidiary of STD.
TravCo Insurance Company (TVC) TVC was incorporated under the laws of Indiana on July 24, 1991, and commenced business on June 2, 1992. Effective January 1, 1999, TVC redomesticated from Indiana to Connecticut. TVC is a wholly owned subsidiary of IND.
Travelers Excess and Surplus Lines Company (TES) TES was formed to write business on a non-admitted excess and surplus basis on May 22, 1987, as Aetna Excess and Surplus Lines Company. TES commenced business on June 5, 1987, and its present name became effective on July 1, 1997. TES is a wholly owned subsidiary of TCS.
The Travelers Home and Marine Insurance Company (THM) THM was incorporated under the laws of Indiana on July 24, 1991, and commenced business on June 2, 1992. Effective January 1, 1999, THM redomesticated from Indiana to Connecticut. THM is a wholly owned subsidiary of IND.
Travelers Personal Security Insurance Company (TPS) Pursuant to Section 33-286 of the CGS, on January 3, 1990, TPS was issued a certificate of incorporation in the name of Aetna Personal Security Insurance Company and commenced business on January 12, 1990. The present name became effective on July 1, 1997. TPS is a wholly owned subsidiary of STD.
Travelers Personal Insurance Company (PLL) PLL, formerly Aetna Insurance Company of Illinois and Travelers Property Casualty Insurance Company of Illinois, was incorporated under the laws of Illinois on April 10, 1990, and commenced business on April 26, 1990. PLL redomesticated from Illinois to Connecticut on January 1, 2004, and the present name was adopted. PLL is a wholly owned subsidiary of STD.
Discover Property & Casualty Insurance Company (DIPR) DIPR was incorporated on December 20, 1978, as NNIC and commenced business on December 29, 1978, as a wholly owned subsidiary of AIC. On March 18, 1996, AIC contributed all issued and outstanding stock of NNIC to NHI. NHI became a subsidiary of AIC and the Northbrook Companies became wholly owned subsidiaries ofNHI. On July 31, 1996, AIC sold its investment in NHI to FM. Effective April 16, 1999, NNIC changed its name to DIPR. On December 1, 2013, DIPR redomesticated from Illinois to Connecticut. DIPR is a wholly owned subsidiary of NHI.
8 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
Discover Specialty Insurance Company (DISP) DISP was incorporated on April 28, 1995, as USF&G Insurance Company of Illinois (USFGIL). It commenced business on May 5, 1995, under the USF&G umbrella to transact business in Illinois only. FM purchased USF&G Corporation, including USFGIL in April 1998. On April 16, 1999, USFGIL changed its name to DISP. On December 1, 2013, DISP redomesticated from Illinois to Connecticut. DISP is a wholly owned subsidiary of FM.
Northland Casualty Company (NCC) NCC was incorporated on May 18, 1959, under the laws of the State of California under the name Transamerica Insurance Company (TIC) and commenced business on July 2, 1959. TIC was purchased by NLI in 1968. Pursuant to an amendment of the Company's Articles of Incorporation, TIC's name was changed to NCC effective April 1, 1981. In 1994, NCC redomesticated from California to Minnesota and is a wholly owned subsidiary of JHI. On December 15, 2010, NCC redomesticated from Minnesota to Connecticut.
American Equity Specialty Insurance Company (AES) AES was incorporated on January 29, 1997, under the laws of the State of California and commenced business on September 1, 1997. On July 31, 2007, AES redomesticated from California to Connecticut. AES is a wholly owned subsidiary of American Equity Insurance Company, an Arizona company.
St. Paul Fire and Marine Insurance Company FM and certain of its affiliates were incorporated in the years shown in the following table:
Date of COMPANY incorporation St. Paul Fire and Marine Insurance Company 1925 St. Paul Mercurv Insurance Company 1964 St. Paul Guardian Insurance Company 1970 The Travelers Casualty Company (f/k/a Athena Assurance 1982 Company) Travelers Constitution State Insurance Company (f/k/a St. Paul 1982 Medical Liability Insurance Company)
St. Paul Guardian Insurance Company, St. Paul Mercury Insurance Company, The Travelers Casualty Company and Travelers Constitution State Insurance Company are direct subsidiaries of FM. FM is a direct subsidiary of TRY.
On December 15, 2010, FM, St. Paul Mercury Insurance Company and St. Paul Guardian Insurance Company redomesticated from Minnesota to Connecticut.
On December 1, 2010, Athena Assurance Company changed its name to The Travelers Casualty Company and St. Paul Medical Liability Insurance Company changed its name to Travelers Constitution State Insurance Company. Also, on December 15, 2010, both companies redomesticated from Minnesota to Connecticut.
9 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
Gulf Underwriters Insurance Company Gulf Underwriters Insurance Company (GULF) was incorporated under the laws of North Carolina on May 23, 1983, as Voyager Protection Insurance Company (Voyager) and commenced business on June 20, 1983. On January 1, 1991, Voyager was sold to Gulf Insurance Company (GIC). Voyager changed its name to GULF effective December 31 , 1990. On October 12, 1995, GULF redomesticated from North Carolina to Missouri and on October 1, 2001, redomesticated to Connecticut.
On June 30, 2004, GULF's ultimate parent, The St. Paul Travelers Companies, Inc. completed its purchase of the minority interest in the Company. On June 30, 2004, an amendment to the TRV Pool's intercompany pooling arrangement limited GIC's immediate parent retrocession to GULF and other pool participants.
Effective April 8, 2005, GULF's indirect parent, Commercial Insurance Resources, Inc. was dissolved. As a result, GIC became a direct wholly owned subsidiary of IND.
Effective May 6, 2005, operations of GIC, GULF and Select Insurance Company were integrated into the current St. Paul Travelers Specialty Commercial Organization on a national basis. GULF was put into runoff.
Effective July 7, 2005, GIC merged with and into IND. As a result of the merger, GULF is now a direct subsidiary of IND and cedes 100% of its premiums, losses and loss adjustment expense to IND under a 100% reinsurance agreement.
10 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
ORGANIZATIONAL CHART
The following is an organizational chart of the Company and its parent, subsidiaries and affiliated companies as of December 31, 2019:
Company State of Domicile The Travelers Companies, Inc. Minnesota St. Paul Fire and Marine Insurance Company Connecticut St. Paul Mercury Insurance Company Connecticut St. Paul Guardian Insurance Company Connecticut St. Paul Surplus Lines Insurance Company Delaware The Travelers Casualty Company Connecticut Travelers Constitution State Insurance Company Connecticut Discover Property and Casualty Insurance Company Connecticut St Paul Protective Insurance Company Connecticut Discover Specialty Insurance Company Connecticut United States Fidelity and Guaranty Company Connecticut Fidelity and Guaranty Insurance Underwriters, Inc. Wisconsin Fidelity and Guaranty Insurance Company Iowa Travelers Property Casualty Corp. Connecticut Travelers Insurance Group Holding Inc. Delaware The Standard Fire Insurance Company Connecticut The Automobile Insurance Company of Harford, CT Connecticut Travelers Personal Security Insurance Company Connecticut Travelers Property Casualty Insurance Company Connecticut Travelers Personal Insurance Company Connecticut Travelers Casualty and Surety Company Connecticut Farmington Casualty Company Connecticut Travelers Casualty and Surety Company of America Connecticut Travelers Casualty Insurance Company of America Connecticut Travelers Casualty Company of Connecticut Connecticut Travelers Commercial Insurance Company Connecticut Travelers Excess and Surplus Lines Company Connecticut Travelers Lloyds of Texas Insurance Company Texas The Travelers Indemnity Company Connecticut The Charter Oak Fire Insurance Company Connecticut First Floridian Auto and Home Insurance Company Florida Gulf Underwriters Insurance Company Connecticut Select Insurance Company Texas American Equity Insurance Company Arizona American Equity Specialty Insurance Company Connecticut Northland Insurance Company Connecticut Northfield Insurance Company Iowa Northland Casualty Company Connecticut The Phoenix Insurance Company Connecticut The Travelers Indemnity Company of America Connecticut The Travelers Indemnity Company of Connecticut Connecticut Travelers Property Casualty Company of America Connecticut TravCo Insurance Company Connecticut Travelers Commercial Casualty Company Connecticut The Travelers Home and Marine Insurance Company Connecticut The Travelers Lloyds Insurance Company Texas
11 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
MANAGEMENT AND CONTROL
The members of the TRV Pool operate under an intercompany pooling agreement. These companies have the same directors and principal officers, occupy the same home office and share accounting systems and personnel. Pursuant to various agreements, services such as financial management, operational management, accounting, payroll, internal audit, human resources management, tax, legal, investment advisory, and data processing are provided for or by the members of the TRV Pool.
The Company's bylaws provide that an annual meeting of the shareholders shall be held at such time and place as the Board may appoint. Special meetings of the shareholders may be called at any time by the chairman of the board (Chairman) or the president or by a majority of directors.
Regular meetings of the Board shall be held at such place and time as the directors may designate by vote. Special meetings of the Board may be called at any time by the Chairman or the president or by any three directors. At the annual meeting, the Board shall elect from its members a Chairman and may elect a president and one or more vice chairmen. The Chairman shall be the chief executive officer (CEO), charged with the management of the business property and affairs of the Company under the direction of the BOD.
The Board, by resolution, shall annually appoint from among its members or otherwise, an investment committee and an audit committee. The Board may also appoint and prescribe the duties and authority of other committees.
Members of the Board serving the Company at December 31, 2019, were as follows:
Director Title and Principal Business Affiliation Daniel Stephen Frey Executive Vice President and Chief Financial Officer, The Travelers Companies, Inc. William Herbert Heyman Vice Chairman and Chairman of the Investment Policy Committee, The Travelers Companies, Inc. Christine Kucera Kalla Executive Vice President and General Counsel, The Travelers Companies, Inc. Nicholas Seminara Executive Vice President and Chief Claim Officer, The Travelers Companies, Inc.
Gregory Cheshire Toczydlowski Executive Vice President and President, Business Insurance, The Travelers Companies, Inc.
12 TRAVELERS REINSURANCE POOL AND ITS 100% REIN SURED AFFILIATES
The executive officers serving the Company at December 31, 2019, were as follows:
Name Title Nicholas Serninara President Jay Steven Benet Vice Chairman William Herbert Heyman Vice Chairman A vrohom Y aakov Kess Vice Chairman and Chief Legal Officer Andy Francis Bessette Executive Vice President and Chief Administrative Officer Daniel Stephen Frey Executive Vice President and Chief Financial Officer Bruce Richard Jones Executive Vice President, Enterprise Risk Management and Chief Risk Officer Christine Kucera Kalla Executive Vice President and General Counsel Mojgan Mehdian Lefebvre Executive Vice President and Chief Technology and Operations Officer David Donnay Rowland Executive Vice President and Co-Chief Investment Officer Daniel Tei-Hwa Yin Executive Vice President and Co-Chief Investment Officer Douglas Keith Bell Senior Vice President, Accounting Policy Douglas Kenneth Russell Senior Vice President, Treasurer and Corporate Controller Scott William Rynda Senior Vice President, Corporate Tax Wendy Constance Skjerven Vice President, Corporate Secretary and Group General Counsel Julie Marie Joyce Vice President and Chief Corporate Actuary
TRV BOARD OF DIRECTORS COMMITTEES
The Audit Committee is to assist the Board in exercising its oversight of: (i) the Company's accounting and financial reporting processes; (ii) audits of the Company's financial statements; (iii) the Company's compliance with legal and regulatory requirements; (iv) the independent auditor's qualifications and independence; and (v) the performance of the Company's internal audit function and independent auditors.
The Risk Committee is to assist the Board in exercising its oversight of the operational activities of the Company and the identification and review of those risks that could have a material impact on the Company.
The Investment and Capital Market Committee is to assist the Board in exercising its oversight of management's investment of the Company's investment portfolio and to review and monitor the financial affairs of the Company.
13 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
The Compensation Committee is responsible for compensation of the Chairman and CEO and the CEO's direct reports, development of compensation policies, and production of an annual report for inclusion in the Company's proxy statement.
The Nominating and Governance Committee is responsible for: identifying and selecting (or recommending to the Board selection of) individuals qualified to become members of the Board and its committees; developing and recommending a set of corporate governance principles; developing and recommending the committee structure to the Board; advising the Board on matters pertaining to director compensation; reviewing succession plans of the CEO and the CEO's direct reports; and overseeing the annual evaluation of the Board's performance.
The Executive Committee is to act on behalf of the Board during intervals between meetings of the Board in order to provide a degree of flexibility and ability to respond to time-sensitive business and legal matters.
SIGNIFICANT RELATED PARTY AGREEMENTS
Amended and Restated Expense Allocation Agreement The Company is party to an Amended and Restated Expense Allocation Agreement whereas IND provides certain services in the ordinary course of business. The expenses are then allocated based on the services provided and IND is reimbursed for the amount due.
Amended Reinsurance Allocation Agreement The Company is party to an Amended Reinsurance Allocation Agreement which sets forth the allocation of external reinsurance ceded premiums and losses between IND on behalf of itself and the members of the TRV Pool and non-member insurers.
Amended and Restated Services Expense Reimbursement Agreement TINDY is party to an Amended and Restated Services Expense Reimbursement Agreement whereas TRV furnishes to or on behalf of TINDY various services. TRV and TINDY are reimbursed for all expenses incurred in connection with providing these services.
Money Market Liquidity Pool Agreement TRV maintains a private short-term investment pool known as the Travelers Money Market Liquidity Pool (MMLP), in which affiliated companies may participate. The MMLP is managed by IND. Each company may convert its position in the MMLP into cash at any time and may also use its position in the MMLP to settle transactions with other affiliated participants. The position of each company in the MMLP is calculated and adjusted daily. Each participating company carries its share in MMLP as a short-term investment.
Tax Allocation Agreement The Company is party to a tax allocation agreement that sets forth the. manner in which total consolidated federal income tax is allocated among companies included in the consolidated return. Member companies are allocated taxes annually based upon their separate taxable income. Companies with a current federal income tax receivable will receive settlement to the extent that
14 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES such receivables are for tax benefits that have been utilized in the consolidated federal income tax return.
TERRITORY AND PLAN OF OPERATION
The companies in the TRY Pool are licensed to write property-casualty coverages in various states and jurisdictions which encompass all 50 states, the District of Columbia, Guam, Puerto Rico, the U.S. Virgin Islands and Canada. The TRY Pool operations are organized into three business segments: Business Insurance; Bond and Specialty Insurance; and Personal Insurance.
BUSINESS INSURANCE The Business Insurance segment offers a broad array of property and casualty insurance and insurance-related services to its clients primarily in the United States. Business Insurance is organized as follows:
Select Accounts - provides small businesses with property and casualty insurance products and services, including commercial multi-peril, workers' compensation, commercial automobile, general liability and commercial property.
Middle Market - provides businesses with property and casualty insurance products and services, including workers' compensation, general liability, commercial multi-peril, commercial automobile and commercial property, as well as risk management, claims handling and other services.
National Accounts - provides large companies with casualty insurance products and services, including workers' compensation, commercial automobile and general liability, generally utilizing loss-sensitive products on both a bundled and unbundled basis, as well as risk management, claims administration and other insurance-related services.
National Property and Other - provides traditional and customized commercial property insurance programs to large and mid-sized customers, including commercial trucking, agribusiness and other specialty classes of commercial business.
Business Insurance also includes the Strategic Resolution Group which manages the Company's asbestos and environmental liabilities and assumed reinsurance and certain other runoff operations.
The Business Insurance segment distributes its products through thousands of independent agencies and brokers that are serviced by 92 field offices that are supported by customer service centers and centralized business centers.
BOND AND SPECIALTY INSURANCE The Bond and Specialty Insurance segment provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to its customers in the United States utilizing various degrees of financially based underwriting approaches.
15 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
The Bond and Specialty segment markets and distributes the vast majority of its products in the United States through many of the same independent agencies and brokers that distribute Business Insurance.
PERSONAL INSURANCE The Personal Insurance segment writes a broad range of property and casualty insurance covering individuals' personal risks. The primary products are automobile and homeowners' insurance which are complemented by a broad suite of related coverages.
Personal Insurance products are marketed and distributed primarily through thousands of active independent agencies located throughout the United States, supported by personnel in eight sales regions. In addition, sales and service are provided to customers through five contact centers.
REINSURANCE
SIGNIFICANT AFFILIATED REINSURANCE
Reinsurance Pool - IND is the lead company of the TRY Pool. Under the terms of the Quota Share Reinsurance Agreement effective January 1, 2005 (and amended on February 26, 2007 and January 1, 2020), the property-casualty underwriting risks for substantially all lines of business of the intercompany pool participants are reinsured with IND. The pool of underwriting risks remaining after reinsurance is transacted with third parties and is then retroceded to the TRY Pool participants based on participation percentages.
Each participant in the TRY Pool agrees to cede to IND and IND accepts and reinsures 100% of the liability of the pool participants for all non-bond business. After IND places external ceded reinsurance, IND cedes to each of the other participants and each participant accepts and reinsures its respective quota share percentage of IND' s net liability for all non-bond business written by the parties of the quota share reinsurance agreement. Each cedent and reinsurer is liable to the other for its respective quota share of written premiums, unearned premiums, paid losses, loss reserves and loss expenses, commissions, other underwriting expenses and premium, and other underwriting taxes resulting from business assumed from and ceded to the other.
Accounts between and among IND and the other TRY Pool members are settled daily through cash or the MMLP. Any items open at the end of the month are settled in the following month.
The names and intercompany pool percentages of the companies participating in the TRY Pool are as follows:
Pool Pool Participant Participation St. Paul Fire and Marine Insurance Company 24.79% The Travelers Indemnity Company 23.29% Travelers Casualty and Surety Company 20.36% The Phoenix Insurance Company 5.00% The Standard Fire Insurance Company 4.84%
16 TRAVELERS REINSURANCE POOL AND ITS 100% REIN SURED AFFILIATES
United States Fidelity and Guaranty Company 4.41% Travelers Casualty Insurance Company of America 2.73% Farmington Casualty Company 1.48% The Automobile Insurance Company of Hartford, Connecticut 1.37% The Travelers Indemnity Company of Connecticut 1.37% The Charter Oak Fire Insurance Company 1.27% Northland Insurance Company 1.22% St. Paul Surplus Lines Insurance Company 0.88% The Travelers Indemnity Company of America 0.77% St. Paul Protective Insurance Company 0.58% Northfield Insurance Company 0.52% Travelers Casualty Company of Connecticut 0.47% Travelers Commercial Casualty Company 0.47% Travelers Commercial Insurance Company 0.47% St. Paul Mercury Insurance Company 0.40% Travelers Property Casualty Company of America 0.36% Travelers Property Casualty Insurance Company 0.30% The Travelers Casualty Company 0.29% Travelers Constitution State Insurance Company 0.29% TravCo Insurance Company 0.27% Travelers Excess and Surplus Lines Company 0.27% The Travelers Home and Marine Insurance Company 0.27% Travelers Personal Security Insurance Company 0.27% Travelers Personal Insurance Company 0.27% Discover Property & Casualty Insurance Company 0.14% Discover Specialty Insurance Company 0.14% Northland Casualty Company 0.14% American Equity Specialty Insurance Company 0.10% Fidelity and Guaranty Insurance Underwriters, Inc. 0.10% St. Paul Guardian Insurance Company 0.10% TRV Pool Total 100.00%
IND also has the following affiliated reinsurance agreements effective with TCSA:
Cross-Business Reinsurance Agreement-The TRY Pool members cede bond business to TCSA. TCSA cedes non-bond business to TINDY and TINDY retrocedes this business (after external reinsurance has been placed) to the TRY Pool participants.
Per Bond Excess Reinsurance Agreement - The Company is a party to a Per Bond Excess Reinsurance Agreement with TCSA. Under and during the terms of this agreement, TCSA reinsures with the IND business classified as surety, written or assumed for losses in excess of its single risk limitation authorized by the U.S . Treasury on a per bond basis.
Per Principal Excess Reinsurance Agreement - The Company is a party to a Per Principal Excess Reinsurance Agreement with certain other property-casualty insurance subsidiaries of TRY. Under and during the terms of this agreement, TCSA reinsures with IND business classified as
17 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
surety, written or assumed for losses in excess of its single risk limitation authorized by the U.S. Treasury, under all bonds written for each principal.
EXTERNAL REINSURANCE
Catastrophe Coverages The following summarizes the Company' s coverage under its various catastrophe treaties as of December 31, 2019:
Corporate Catastrophe Excess-of-Loss Reinsurance Treaty - For the period January 1, 2020 through and including December 31, 2020, the Company entered into a reinsurance agreement that provides for the recovery of 75% of the dollar amount of each qualifying loss in excess of $3 billion retention up to a maximum amount of qualifying loss of $2 billion (resulting in a potential maximum recovery of $1.5 billion). Qualifying losses for each occurrence are in excess of a $100 million deductible. The treaty covers all the Company's exposures in North America and the waters contiguous thereto.
Underlying Property Aggregate Catastrophe Excess-ofLoss Reinsurance Treaty - This treaty covers the accumulation of certain property losses arising from one or multiple occurrences for the period January 1, 2020 through and including December 31, 2020. The treaty provides for up to $280 million part of $500 million of coverage, subject to a $1.55 billion retention (i.e., for every dollar of loss between $1.55 billion and $2.05 billion this treaty provides for 56 cents of coverage) of aggregate qualifying losses. Qualifying losses are subject to a $5 million franchise deductible per occurrence, so that qualifying catastrophic events at or greater than $5 million count toward the aggregate retention from dollar one. Coverage for, and contributions to the $1.55 billion retention from hurricanes and/or tropical storms and earthquakes are limited to $250 million per event. The treaty covers property perils for PCS events in North America and all waters contiguous thereto.
Catastrophe Bonds - The Company has catastrophe protection through an indemnity reinsurance agreement with Long Point Re III Ltd. (Long Point Re III), an independent Cayman Islands company. In connection with the reinsurance agreement, Long Point Re III issued notes (generally referred to as "catastrophe bonds") to investors in amounts equal to the full coverage provided under the reinsurance agreement as described below. The proceeds were deposited in a reinsurance trust account. The businesses covered by this reinsurance agreement are subsets of the Company' s overall insurance portfolio, comprising specified property coverages spread across the following geographic locations: Connecticut; Delaware; District of Columbia; Maine; Maryland; Massachusetts; New Hampshire; New Jersey; New York; Pennsylvania; Rhode Island; Virginia and Vermont.
The reinsurance agreement provides coverage of up to $500 million to the Company through May 24, 2022, for certain losses from tropical cyclones, earthquakes, severe thunderstorms, or winter storms in the locations listed above. The attachment point and maximum limit under this agreement are reset annually to adjust the expected loss of the layer within a predetermined range. Until and including May 24, 2020, the Company is entitled to begin recovering amounts under this reinsurance agreement if the covered losses in the covered area for a single occurrence reach an
18 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES initial attachment amount of $1.79 billion. The full $500 million coverage amount is available until such covered losses reach a maximum $2.29 billion. The coverage under the reinsurance agreement is limited to specified property coverage written in Personal Insurance; Select Accounts, Middle Market (excluding Excess Casualty and Boiler & Machinery) and National Property and Other in Business Insurance; and Bond & Specialty Insurance Other in Bond & Specialty Insurance.
Under the terms of the reinsurance agreement, the Company is obligated to pay annual reinsurance premiums to Long Point Re III for the reinsurance coverage. Amounts payable to the Company under the reinsurance agreement with respect to any covered event cannot exceed the Company's actual losses from such event. The principal amount of the catastrophe bonds will be reduced by any amounts paid to the Company under the reinsurance agreement.
The Company has not incurred any losses that have resulted or are expected to result in a recovery under the Long Point Re III agreements since their inception.
Northeast Property Catastrophe Excess-of Loss Reinsurance Treaty - This treaty provides up to $600 million part of $850 million of coverage, subject to a $2.25 billion retention (i.e. for every dollar of loss between $2.25 billion and $3.10 billion, this treaty provides 71 cents of coverage), for losses arising from a single occurrence, subject to one reinstatement. Coverage is provided on an all-perils basis, including but not limited to hurricanes, tornadoes, hailstorms, earthquakes, and winter storms and/or freeze losses from Virginia to Maine for the period July 1, 2019 through and including June 30, 2020. Losses from a covered event anywhere in the United States, Canada, the Caribbean and Mexico, and waters contiguous thereto may be used to satisfy the retention. Recoveries under the catastrophe bonds (if any) would be first applied to reduce losses subject to this treaty.
Middle Market Earthquake Catastrophe Excess-of-Loss Reinsurance Treaty - This treaty provides for up to $225 million part of $250 million of coverage, subject to a $100 million retention (i.e. for every dollar of loss between $100 million and $350 million, this treaty provides 90 cents of coverage), for losses arising from an earthquake, including fire following and sprinkler leakage incurred under policies written by Technology, Public Sector Services and Commercial Accounts in Business Insurance for the period July 1, 2019 through and including June 30, 2020. The treaty covers the United States and Canada, their territories, possessions and waters contiguous thereto.
Personal Insurance Earthquake Catastrophe Excess-of-Loss Reinsurance Treaty - This treaty provides for up to $200 million of coverage, subject to a $150 million retention, for losses arising from an earthquake, including fire following and sprinkler leakage incurred under policies written by Personal Insurance for the period January 1, 2020 through and including December 31 , 2020. This treaty also provides up to an additional $50 million of coverage for an earthquake in California only, subject to a $100 million retention. The treaty covers the United States, its territories, possessions and waters contiguous thereto.
19 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
Besides the aforementioned catastrophe treaties, the TRV Pool also utilizes a variety of other reinsurance treaties to reinsure property and casualty risks remain within their corporate risk appetite.
INFORMATION TECHNOLOGY CONTROLS
RRC performed a risk-based assessment and review of the Company's ITGCs in accordance with NAIC requirements as outlined in the Handbook. The guidance and direction used to perform the review of the Company's ITGCs was derived from Exhibit C Part 1 - Information Technology Planning Questionnaire (ITPQ) and Exhibit C Part 2 - Information Technology Work Program (collectively Exhibit C). The Company's responses to the ITPQ were evaluated, and certain controls within the IT control environment were tested to assess whether the selected controls were designed effectively and were functioning properly.
RRC' s objectives were to obtain reasonable assurance about whether: • the Company had a process in place to effectively identify, mitigate and manage its IT risks; • the Company' s control structure policies and procedures were suitably designed to achieve the control objectives specified in Exhibit C; and • the Company's policies and procedures were in place during the examination period.
The objectives above were achieved through a combination of reviewing the Company's policies and procedures, testing in key areas related to Exhibit C, interviewing the Company's IT senior management, and reviewing IT risk assessment processes.
In accordance with the Handbook, specific areas of review included: • IT governance and organization structure; • strategic planning, systems architecture and project oversight; • IT risk management; • vendor management; • development and maintenance of policies; • physical and logical security; • business continuity and disaster recovery planning; • end user or business developed applications; and • cybersecurity and incident response.
Based upon the risk-based assessment and review, the Company's ITGCs were determined to be effective.
ACCOUNTS AND RECORDS
The Financial Accounting Comprehensive Tool Suite general ledger feeds accounting data to the Hyperion Financial Management (HFM) consolidation system. HFM then feeds The Complete Package by Booke, the statutory statement preparation software package used by the Company to prepare the quarterly and annual statutory financial statements for each legal entity.
General ledger account balances were reconciled and traced to the amounts reported in the annual
20 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES statement for 2019. Further detailed analyses were performed on the individual accounts throughout the examination.
FINANCIAL STATEMENTS
The financial statements in Appendix A reflect the Companies financial positions, as filed by the Companies as of December 31, 2019. No adjustments were made to surplus as a result of the examination.
LOSSES AND LOSS ADJUSTMENT EXPENSES (LAE)
Milliman's review of the Companies losses and LAE reserves was conducted in accordance with the Risk Focused Approach as detailed in the Handbook. The scope of the review included assisting with the assessment of reserve risk, pricing risk, and liquidity risk for the TRV Pool.
Based on the scope of work conducted, the Department did not identify any material concerns that affected the TRV Pool's ability to manage its reserving, pricing and underwriting and liquidity risks.
GROWTH OF COMPANY
The reconciliation of the policyholders' surplus during the period under examination is reflected in Appendix B. Changes reflected in the Company's policyholder surplus over the exam period were largely due to results from operations and the payment of ordinary dividends.
SUBSEQUENT EVENTS
• The COVID-19 pandemic has continued to develop throughout 2020 and 2021 , with significant uncertainty remaining regarding the full effect of COVID-19 on the U.S . and global insurance and reinsurance industry. At the time of releasing this report, the Department's review of the Company noted that there has not been a significant impact to the Company. The Department has been in communication with the Company regarding the impact of COVID-19 on its business operations and financial position. The Department continues to closely monitor the impact of the pandemic on the Company and will take necessary action if a solvency concern arises.
• Effective January 1, 2020, after receiving all required approvals, the TRV Pool was amended whereby the percent of participation changed for the participants as indicated below:
Pool Pool Participant Participation The Travelers Indemnity Company *25.20% St. Paul Fire and Marine Insurance Company 24.79% Travelers Casualty and Surety Company 20.36% The Phoenix Insurance Company 5.00% The Standard Fire Insurance Company 4.84%
21 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
United States Fidelity and Guaranty Company 4.41% Travelers Casualty Insurance Company of America 2.73% Farmington Casualty Company 1.48% The Automobile Insurance Company of Hartford, Connecticut 1.37% The Travelers Indemnity Company of Connecticut 1.37% The Charter Oak Fire Insurance Company 1.27% Northland Insurance Company 1.22% The Travelers Indemnity Company of America 0.77% St. Paul Protective Insurance Company 0.58% Travelers Casualty Company of Connecticut 0.47% Travelers Commercial Casualty Company 0.47% Travelers Commercial Insurance Company 0.47% St. Paul Mercury Insurance Company 0.40% Travelers Property Casualty Company of America 0.36% Travelers Property Casualty Insurance Company 0.30% The Travelers Casualty Company 0.29% Travelers Constitution State Insurance Company 0.29% TravCo Insurance Company 0.27% The Travelers Home and Marine Insurance Company 0.27% Travelers Personal Security Insurance Company 0.27% Travelers Personal Insurance Company 0.27% Discover Property & Casualty Insurance Company 0.14% Northland Casualty Company 0.14% Fidelity and Guaranty Insurance Underwriters, Inc. 0.10% St Paul Guardian Insurance Company 0.10% American Equity Specialty Company *0.00% Discover Specialty Insurance Company *0.00% Northfield Insurance Company *0.00% St. Paul Surplus Lines Insurance Company *0.00% Travelers Excess and Surplus Lines Company *0.00% TRV Pool Total 100.00%
*Pool participation changed effective January 1, 2020
CONCLUSION
As a result of the examination, there were no adjustments made to surplus.
22 TRAVELERS REINSURANCE POOL AND ITS 100% REIN SURED AFFILIATES
SIGNATURE
In addition to the undersigned, the following members of the Department participated in the examination: Edna Bosley; Mark Murphy, CFE; Kenneth Roulier, AFE, CISA, AES; Michael Daniels, CFE; Cecilia Arnold, CFE; Dawn Cormier, CPA; Sharon Altieri, CPA; Joseph Marcantonio, AFE, CISA, AES; Ronald Jankoski, CFE; Keith Kleindienst, CFE; W anchin Chou, FCAS, MAAA; Qing He, FSA, MAAA; and the professional services finns ofRRC and Milliman.
I, Michael Shanahan, CFE, do solemnly swear that the foregoing report on examination is hereby represented to be a full and true statement of the condition and affairs of the subject insurer as of December 31 , 2019, to the best ofmy information, knowledge and belief.
Respectfully submitted,
Michael Shanahan, CFE Examiner-In-Charge State of Connecticut Insurance Department
State of Connecticut ss.
County of Hartford
Subscribed and sworn to before me, T ~~ vr.p ku Notary Public on this £-rt! day of:= [2021.
JANE J. MURPHY NOTARY PUBLIC MY COMMISSION EXPIRES JULY 31, 2023
23 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
APPENDIX A
I.AC,.- ~ 1 2 3 4 5 6 7 St. Paul fire The Travelers Traveler1 The Phoenix The S1andard United States Travelers and Marine In,. Indemnity Casualty and Insurance Fire Insurance Fide1ity and Casualty Int, Net Admitted Assets Comoanv Comoanv Suretv Comoanv Comoanv Comoanv Guaranrv Co. Co. of America Bonds $13,221.004,233 $13,503.700.424 $9.839,717,155 $2,756,934 ,240 Sl,521.459,271 $2,827,022,292 $1 ,715.099.120 Preferred stocks 1.195,000 23.208,363 27,275,625 Common stocks 2,027,327,433 3,159,264.472 4.084.738 ,457 968,254,121 515.476,150 First liens • mortgage loans on real estate Propenits occupied by the company 27,529,883 336,361 ,432 Propeniu held ro, the production of income 838,301 ,569 Cash 47.718,093 (618,266,643) (318,265) 50 ,205 Cash equivalents Short-term inv&stments 520,158,566 1,343,445.102 759,048.172 32,007,761 135,905,013 55,846.393 17,003,646 OCher i1r..-e1ted assets 620,803,887 786,399,393 1,327,484,125 83,692.123 183,075,823 1 51 ,787,505 Receivabh15 for s,curities 1,399,802 4,951 54,037 2,739,300 Securities lending reinvested collateral assets 159,327,902 71 ,203,592 55,101 ,840 7,482 ,955 23 ,587,923 17,915,217 9,540,291 Aggregate writeMins for imested assets (87,365) (383,886) Subtotals~cash and invested assets 17,464,679,002 18,604,937,199 16,093,047 ,109 3,848,371 ,202 3,379,558,217 2.900,834,108 1,796,169,862 Investment income due and accrued 11 9,808,834 122,392,202 88,303,158 27 ,232,018 23,042,842 26,425,029 17,619,665 Uncollected premiums and agents· batances 751 ,208,639 474 ,301,792 605,865,671 92,117,418 72,473,2.79 136,038,381 40,878,523 Oefe,red premiums.: agents· balances and installments 1.305,026,772 1,225 ,809 ,.846 1,069,962,704 262 ,760,978 254 ,352,62.7 231 ,755,183 143,467,494 Accrued relfospectiw premiums 20,364,606 19,132,379 16,725,429 4,107,424 3,975,986 3,622,748 2,242,653 Amounts recoverable from reinsurers 39,378,028 1,329,706,172 38,291 ,441 65,598,966 165,986,305 6,637,451 63,146,337 funds held by or deposited with reinsured comparues 4,193,740 1,146,510 995,271 25,807 Cu,rent federal and foreign income lax ,eccwerable Net deferred tax anal 214 ,896,070 302,773,235 132,418.508 42 ,331 ,290 40 ,654 ,476 25,432,078 14,396,989 Guaranty funds re ceivable or on deposit 19,480 446,532 731 ,351 1,350,832 1,008.710 136,197 568,918 Electronic data p(ocening equipment and aoflware 12.814 62,308,921 8,334 ,057 Receivables from parent : sub11idiaries and affiliates 63,025.228 72,004 ,179 2,314,967 36,990,680 6,093.208 AqqreQate w,ite·ins for other-than-invested assets 107,508 559 360,827,648 86,262,514 14,965,574 21 ,380,268 12 540 070 8,854 740 Total assets excludina Seoarate Accounts 20,090,121 ,772 22 503_782,436 18.204,607 ,336 4,361 ,150,669 4,007757,646 3,343.447,051 2.095,438,391
Total 12a oao J~J zzz iZZ ~ga ZUZ j~~ ~J§ z~ 5gz J~~ M~§l J5Q ~3 i:l ccz z~z ail§ JJ ;liJ ddZ O~l &z as5 ~Ja aaJ
24 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES
APPENDIX A
IAt..,.. : ~ 8 9 10 11 12 13 14 The Travelers Farmingto n Ca,ualty Indemnity Company of The Automobile Insurance The Chane, Oak Fire Northland Insurance The Travelers Indemnity St. Paul Protective Net Admllted A...,11 Comoanv Connecticut Comoanv of Hartford CT Insurance Comoanv Comoanv Comoanv of America Insurance Comoanv Bonds $918,595.741 $907,029,309 $902.284,706 $762,589,178 $904,157,934 $461,722.792 $467,603 ,283 Preferred stocks 2,596,800 1,041,710 Common stocks 159,286,632 First liens - mort gage loans on real estate Prnperties occupied by the company P1ope r1 ies held to, the production of income Cash (25 ,669) (17,767 ,325) Cash equivalents Short -t erm investments 7,295.497 9,652,362 16.208,506 25 ,944 ,239 64,327,366 64 ,042 .160 11,705,024 Other invested assets 15,900.025 12,970 ,034 240,320 4,752,767 12,346,572 1,293.855 Receiva~es foe securities 110,430 239,376 Securities lending reinvested collateral assets 25,665,254 9,360,160 5,950,255 1,014 ,565 550,265 Aggregate write--ins for invested asset, 0 0 Subtotals; cnh and invested assets 970 ,053,316 938,986.196 924 ,794,217 793,286 ,184 1,124,646,829 527,058 .807 479,858,572 Investment income due and accrued 8,836,972 9,339.552 9,508,304 8,571 ,697 9,458,669 6,895 ,697 4,633,377 Uncollected pretl'ltums and igents' balances 35.049.804 20 ,514.131 20,514,131 19,016.749 18,268,057 11,529.84 0 8,684 ,815 Defe,red premiums; agents· balances and installments 77 ,777.250 71 ,996.508 71 .996,508 66,741 .289 64,113,679 40,465 .191 30,480,274 Accrued retrospective pramiums 1,215.797 1,125,434 1,125.434 1,043 .286 1,002,211 632.543 476,461 Amounts· racovera~e from reinsurefl 11 .027.905 65,589,203 23,892,801 71 ,548.553 31,944.598 68 ,325.745 62,369,168 Funds lleld by Of deposited with reinsured companies Current federal and foreign income tax recoverable Net deterred tax asset 12,363,817 11 ,339.903 11,440,057 10,604 ,925 10,761,644 3,784 ,286 4,844,749 Guaranty funds receivable or on deposit 726,121 508.476 26,779 714,861 23,638 1,349.083 17,650 Electronic data processing equipment and software 841,994 Rece!Vables from parent; subsidiane s and affiliates 703,799 21,950.085 9.811,863 8,012,72 1 34,519,957 Aoareoate write-ins for other-than-invested assets 4.206,689 5 315 366 3 175 031 5 744.565 5,513 438 4 660.585 1,500,969 Total assets 1xcludino Seo.arate Accounts 1121,961,470 1,147,506.849 1,076 285 125 985 284 .829 1,300,252 ,722 664 701,779 592,866.035
Total iimmHll U lH5Will:1~ ~az~2§5 m 1~~5 Zfl:i §Z:i il J'2D ZSZ Z22 Ill~ ZDl ZZ:i ~
25 TRAVELERS REINSURANCE POOL AND ITS 100% REIN SURED AFFILIATES
APPENDIX A
'"~ ~ 15 16 11 18 19 20 21
Trovelel$ Property Trovelel$ Property Travelers Constitution Travel&!$ Casualty Travelers Commercial Traveler& Commercial St. Paul Mercury Casualty Company of Casualty Insurance State Insurance Net Admitted Anetw Comoanv of Connecticut Casual!¥ Comoanv Insurance Company Insurance Comoanv America Comoanv Company Bonds $290.516.772 $291,819.246 $275,934,283 $286,936,526 $554 .581,869 $177,085,433 $181 ,528.658 Praferr&d stocks Common stocks Flfsl liens - mortgage loans on ,eal estate Properties occupied by the company Properties held for the l)foduction of income Cash Cash equivalenls Short-term investments 6,802,997 8,853,097 26,504,507 6,659,392 9,350,436 18,313,984 8,036,431 Other invested assets 232,760 10.748.197 12,860,313 Rec:eivabdes for securities S&eurities lending reinvested coUateral assets 513,672 521,456 10,749,170 Aggregate write-ins for invested assets Subtotals; cash and imested assets 298,066,201 301.193.799 313.187,960 293,595.918 574 ,680,502 208,259.730 189,565,089 lnveslment income due and accrued 2,685,460 2,932,694 3.553,800 2,794,909 8,678,920 3,540,446 1,844,981 Uncollected premiums and agents' baJances 12,924,299 13,452,473 7,037,695 9,116,374 5,390,575 4,492,147 8,917,317 Oefened premiums ; agen1s· balances and installments 24 ,699,532 24,699,532 24 ,699,532 21.020.878 18,918,791 15,765.659 15,240,137 Accrued retrospecttve premiums 386,098 386,098 386,098 328,594 295,735 246,445 238,231 Amounts recoverable from reinsu,ers 1,193,587 1,026,511 52,672,275 1,677.499 219,343,921 54 ,260,194 (465) Funds held by or deposited wilh ,einsurad companies 1,856 Cunent federal and foreign income tax reccwerable Net defe«ed tax asset 3,923,863 3,923,511 4,056,425 3,340,062 3,032,631 2,506,356 2,420,868 Guatanty funds receivable or on deposit 120,432 5,200 11 ,610 7,433 1,538,836 8,476 6,357 Eleclronic data processing equipment and softwatt Receivat>,es from parent ; subsidiaries and affiliates 201 ,802 1,077,353 1,017,078 1,620,960 42,932,219 7,738,599 IAtvareQala write·ins for other·lhan.invested assets 1694,694 1,207,815 1,112 159 1,086,585 7,303,592 727,250 666 198 Tola! assets excludin Total IJII~ m :lliZ I~~ ~g§ fi:IZ ~QZ ZJII ~Jl ia:w 5a~ m laDZ ll5ZZZ IZ~Z ~5 JQZ izia a~a m 26 TRAVELERS REINSURANCE POOL AND ITS 100% REIN SURED AFFILIATES APPENDIX A ,<-. ' 22 23 24 25 26 27 28 The Travelera Home The Travelen Casualty TroYelert Excess and Tre velen Personal Security Travco Insurance and Mari ne Insurance Trevelers Personal Northland C11ualry Net Admlned Aneta Comnenv Surolut Lines Comoanv Insurance Comoanv Comnanv Company ln1u rance Comoanv Comnonv Bonds $186.088.652 $180.768.702 $174.712.263 $181.004.269 $176.084 .683 $174.775.984 $94 ,505 .905 Prefetred stocks Common stocks Fir,t liens ~ mortgage loans on real estate Properties occupied by I/le company Properties held for the production of income Cash Cash equivalents Short-term investments 3.341 .968 2.170,708 8.487.902 4.673.997 36.116,865 5,913.863 5,923.095 Other invest·ed assets 3.128,951 160.345 ReceMlbles for securities Securities lending reinvested collaletal :assets 647.617 2.534.074 2.843,407 665.221 103.054 Aggregate write-ins for invested assets Subtotals~cash and invested assets 189,430,620 183 .587,028 185.734.240 188,521 ,672 215.330,499 181 ,355.068 100,692.399 lnwstment income due and acc,ued 1,906,493 1.91 3,735 1.638,256 1.788,082 3,543,557 1,551.109 867,788 Uncollect&d premiums and agents' balances 8,920,661 4.042,931 4,042,931 4.042,931 4.042 ,931 4.042 .931 3.929.,462 Oafeoed p,emiums ; agents' balances and installments 15.240.137 14.189.093 14.189,093 14.189,093 14,189,093 14,189.093 7,357.307 Accrued retrospective pemiums 238.231 221 .801 221 ,801 221 .801 221 .801 221 .801 115,008 Amounts racowrabfe tom r,insutars 3.730 10,008.238 13,988.373 15.514,055 122,338,660 48,310.071 92,020 Fonds held by°' deposited with reinsured companies Cunent federal and fufeign income tax recOYerablt Net deferred tax asset 2,421 ,327 2.254 ,272 2.256,478 2,253,983 2,255,911 2,253.983 1.176,606 Guaranty kinda rtteehtable Of on deposit 6,532 9 16,436 31 ,529 464,104 295 965 Etect,onic data p,ocessing equipment and software Recej,..,at>,e.1 i'om parent; subsidiaries and affiUates 6,654 ,386 1,527,311 8.882.244 13.706,902 32,995 ,403 492,515 Annreoate write-ins for other-thanaim-ealed asset, 666 439 620,253 1,650 338 620.253 10.392.132 1,889.624 323.451 Total assets excludino Seoa.,ate Accounts 218.834 170 223.491.746 225.265.257 236.065,644 386,485.589 286,809 379 115.047 .520 Total IZJD §2' lig ~ ~ iZJ§ C~" ~~ IJU§ ~U2 ~D3 IZD§ aa~ JZ~ ~ 27 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES APPENDIX A ASSEIS 29 30 31 32 Discover Property & American Equity Discover Specialty Casualty Insurance St. Paul Guardian Specialty Insurance Net Admitted Assets Insurance Comoanv Comoanv Insurance Comoanv Comoanv Bonds $96,826,334 $124,358,629 $65,715,601 $69,530,868 Preferred st.ocks Common stocks First liens - mortgage loans on real estate Properties occupied by the company Properties held for the production of income Cash Cash equivalents Short-term investments 2,284,342 1,355.149 1,621 ,174 2,183,270 Other invested assets Receivables for securities Securities lending reinvested collateral assets Aggregate write-ins for invested assets Subtotals; cash and invested assets 99,110,676 125,713,779 67,336,775 71,714 ,138 Investment income due and accrued 1,020,861 1,420,713 565,559 711 ,358 Uncollected premiums and agents' balances 4,294,62.5 4,376,332 3,000,831 3,067,870 Deferred premiums; agents· balances and installments 7,357,307 7,357,307 5,255,220 5,255,220 Accrued retrospective premiums 115,008 115,008 82,149 82,149 Amounts recoverable from reinsurers 1,552,497 1,147,054 Funds held by or deposited with reinsured companies Current federal and foreign income tax recoverable Net deferred tax asset 1,182,518 1.179,850 834 ,899 835,142 Guaranty funds receivable or on deposit 21 ,043 154,227 1,053 Electronic data processing equipment and software Receivables from parent; subsidiaries and affiliates 300,216 Aooreoate write-ins for other-than-invested assets 321 ,613 419,918 301.173 229,724 Total assets excludino Separate Accounts 113,702,824 142.156,447 78 ,677,887 81 ,896,653 Total illHDZ §Zoi il~Z m~z na fiZZ aaz m a~fill~J 28 TRAVELERS REINSURANCE POOL AND ITS 100% REIN SURED AFFILIATES APPENDIX A I IABII II IE S SIIBfl IIS Al!IID 0 Il:lfB EI HlS 1 2 1 4 5 6 7 St. Paul Fire The Travelers Travelers The r.-nix Tho Slandwd Unilod SlatH Traveler• and Marine Ina. Indemnity C•sualty- lnawance Fire 1Mur61'lee Fidelity ond CAaually Ins. Current Year Liabilities Cnmnanv Cnmnanu Surely Cnmnanu Comnanu c~ Guaranty Co. Co. of Amef'ica loi:ses $8. a),307 .671 $7.537.156,873 $6.58(022.4,. ft61>.!l01.384 $l565.1>0.5-40 Sl.426. ll7.020 $882.828.156 Reins.....-ance p&y«Jle on peid lo.se.t ~ loss~. e,ql. 356.445."7 t354.!D;.214 293.6111.Sll 71.:lJ0.757 69.551,840 63.386.420 42.51S.074 t..o.. odiu>lmenl ._.,... tB91.172,384 t71>.5S4.343 t4S8.7S2.977 368.072.929 356.2S4.597 324,640.325 200,967,820 Cotrw-huions ~e; oonl:ingeN. commiuions 1S7 ,804 .069 1114.539.287 1>0.957.684 39,527.920 38.263,025 ...863 .624 2t582.244 Dhar expenses (exd. taxes, lic:cnsu andfeea) 156,505.(123 140,638,174 126.620.581 30,806.473 30.062.461 27.235.579 1>.9'.028 T•xes . liec,nsaa aid fees fexei. Fd and fr. inc. taxes) 76.203.062 68.1S6.m 61,062.633 14.995.736 14.515,871 13.226.238 8.1117.671 Cu-rent federal Mld f«eigl income t.xes 4.(£9.927 14,873,762 12.777-459 2.147.2ll 3.915.587 3.5-4t921 2.1111~ BorrOY*I monoy SO and i...,...t thetoon SO 8.759 Lne«ned premiuns 2.928.406.693 2.720.767.5-40 2.378.477.435 58<1.ffi.461 565.414.18; 515.18t01> 311,921,582 Advance pr6ml.ffl 81.205.335 tm Poli~deu (ci¥iden:ls declared and ...-.,.id) 14.739.11:U 13,847.953 12.ll5.810 2.9n.S40 2.877.806 2.622.133 1.623.225 Ceded reinsu ance premiuns pay.,t:)le 67.604.132 6t63t357 52.751.4'3 12.954.677 123.479,865 11.426,025 27.079.462 FI.A'ds hetd by~ l..l"ld« tairtst.nnce tre«ies 740.856 66.423.847 Amot.n:s witht-iiad o, retained by~ for eccou,t 2t636.184 955.464.576 8,051.259 tS86.644 l 923,073 2.1)2.223 Ul84.708 Aemti.nu, and itemo not allocolod 111.5-46.900 36t207.840 917.095 ...184 864.750 38,886 36.1111 Provision to, reinsurance {inctuding SO certified) 5.&242 35.t18.S48 Net aciustmenl$ in a.Heb and liabilitie.s dJe lo fr. E)Cch. 66,899.779 Pay.able to parent; nbsichriea and affilial:ec: 305.913.4n 7.520.666 Payable fot iecuitieo 6. ..2.256 2.405.000 77.552.500 t 4S8.125 Payable N>< securibes lending 159.327.902 7t203.592 55.llt840 7.482.955 23.587.923 17.915.217 9.540.291 Aggeg.11:e wrile·im for liabilities 59.452.702 JJZ.877.015 18.579.2371 (2.125.3341 (2.057.3241 11.050.354 fl.1>0.432 Totel liablilies 14 .22t396. 740 15.794.97t!Ol 11.314.240.684 2.751.793.915 2.795.352.226 2.460.857.647 t532.327.641 Aweg.tte Wfile·ins for spacial suplus fU'ds 12.052.615 11.323.333 9.8S8.799 2.430.S43 2.353.153 2.144.092 1.327.295 Common copital .tock 20.000.000 ll.790.700 25.000.000 ll.000.000 5.000.000 35.214.075 6.000.000 Gross paid in M'ld conltibt..ied IU'ph...s 3.238.382.533 4~.154.921 2.829.824.585 126.369.748 623.472.070 236.805.261 125.632.050 Lno.. ig,odfcnds(su-plus) 2,452.5-41.582 4.225.643.267 U70.556.063 581.580.198 608,425.976 430,151.405 &.,plus as rogards policsA-,oldeu 6.708.811.536 6.8!JJ.366.651 1.609.356.754 1.212.405.420 882,589.404 563.l1l.749 :~ •• nn· ;,:,;:· . C' 4. C' ..,_ Total -~= ~~ · .. •= ~"" 29 TRAVELERS REINSURANCE POOL AND ITS 100% REIN SURED AFFILIATES APPENDIX A llltMII 1, ...... ,111.11#1 IIC. Al.In (JIM ... U rt111111..: 8 9 10 11 12 13 14 The Travelen The Automobile lnwrance Farmington Casualty Indemnity Company of Company of Hartford, The Charter Oak Fire Northland Insurance The Travelers Indemnity SL Paul Protective Current Year Liabtllliea ComDanv Connecllcut Connecticut Insurance Company Comoanv Company of America 1nsurance Company Losses $478,602,810 $443,030,979 $443,030,979 $410,692,951 $394,523,937 $249,002,813 $187,560,561 Reinsurance payable on pa;d losses and loss adj, exp. 21 ,267,909 19,687,184 19,687,184 18,250,163 17,531 ,655 19,006,929 8,334,711 Loss adjustment expenses 108,949,587 100,851 ,984 100,851 ,984 93,490,525 89,809,795 56,683,232 42,696.461 Commissions piiyable; contingent commissions 11.700.264 10,830,649 10,830,650 10,040,091 9,644 ,812 6,087.300 4,585,238 Other expenses (excL taxes, licenses and fees) 9,162., 194 8.481 ,937 8,466,182 7,843,482 7,571 ,298 4,768.702 3,597,970 Taxes , licenses and fee s (excl. Fd . and fr. inc. taxes) 4,438,737 4,108,831 4,108,831 3,808,916 3,658,960 2,309,342 1.739,505 Current federal and fo,eign income taxes 1,323,138 698 ,512 1,608,268 519,881 1,100,654 2,401 ,103 407 ,059 Borrowed money $0 and interest thereon $0 Unearned premiums 172,895,217 160,044 ,896 160,044,896 148,362,787 142,521.733 89,952,241 67,756,234 Advance premtum Policyholders (dividends daclartd and unpaid} 879,990 814 ,585 814,585 755 ,127 725 ,397 457,833 344,861 Ceded rein$u,ance premiums payable 3,834.584 62,826,812 13,638,089 57,158,342 12,701 ,630 40,929,654 11 ,440 ,419 Funds held by company under reinsurance treaties Amounts withheld or retained by company to, account 588,048 544 ,344 544,344 504 ,610 32,340,257 305,944 230.454 RemiUancu and items not allocated 74 ,557 47,814 47 ,276,451 39,067 PrCMsion for reinsurance (including $0 certified) Net ~juslments in assets and liabilities due to Ii' Exch. Payable to pa.rent; subs idiaries and affiliates 5,472.561 42,838,823 Payable for securities Payable for securitiea lending 25,665.254 9,360,160 5,950,255 1,014 ,565 550.265 b..nn,anata wntt ·ins for liabilities 1629,099) 1582.342 1582,3421 1539,835 1,044 ,744 1327,3021 1246,539 Total liabtlities 838,678,634 820,773,091 768,993,906 750,934,854 761 ,465,889 477,089,420 371.836,022 Aggregate wnte·int for special surpfus Nods 719,559 666,078 666,078 617.459 593,150 374 ,365 281 ,989 Common capital stock 6,000,000 5,000,000 6,000,000 4,200,000 3,500,000 5,250,000 4,200,000 Gross paid in and contributed t urplus 126,174,589 4,862,470 98,351 ,325 80,200,080 167,835,993 47AOO,OOO 201 ,201 ,337 Unassiooed funds lsurDlus, 150 388,688 316,205,209 202.273.815 149,332.436 366,857,690 134.587 ,995 15 346,686 SurDlus as reoards oolicvtiolders 283 282,836 326,733.758 307,291.219 234.349.975 538,786,833 187,612,360 221 ,030,013 Total u -t?1 cu:::1 ,Hn • 17 30 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES APPENDIX A II~ .. I< 15 16 17 18 19 20 21 Travelef'I Property Travele1t P,operty T ravelen Caaualty Travelers Commercial Trevelen: Commercial SL Paul Mercury Casualty Company of Catuolty Insurance T ravelera Constitution Current Year Llabilltiea Comoanv of ConnectJcut Catualrv Comoanv Insurance Comoanv Insurance Comoanv America Comoanv State Insurance Comoanv Losses $151.988.729 $151.988,729 $151,988,729 $129,352.111 $116.416.900 597,014 ,083 $93.780,281 Reinsurance payable on paid losses and lou adj. exp. 6.753,987 6,755,621 6.753,987 5,748,072 6.206,864 4,311,050 4,167,348 Lon adjostment expenses 34,598,855 34,598,855 34 ,598,855 29.445,833 26.,501 ,250 22,08,1,376 21 ,348,230 Commissions payable ; contingent commissions 3.715.624 3,715.624 3.715,624 3,162,234 2.846,009 2,371 .676 2,292,619 Other expensas (excl , taxes , licenses and fees) 2,901 .957 2,901 .957 2.900,456 2.475,490 2.292,225 1,863,596 1,790,432 Taxes, ltCensea and fees (axcl. Fd. and h. inc. taxea} 1,409.600 1,409.600 1.409.600 1,199,658 1.079,693 899.744 869.752 Current federal and foreign income taxes 224.258 325,026 298,034 293,834 1,270.067 319,397 118,007 Borrowtd money SO and interest theteon SO Unearned premiums 54,905,913 54,905,913 54,905.913 46.728.437 42,055.593 35,046,328 33.878. 117 Aafance p,ell'Uum Policyholders (dividends declared and unpaid) 279.456 279.456 279.456 237.835 214 ,052 178,376 172.430 Cede 31 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES APPENDIX A I fAQfl 1"1"1~11. C:l1uu1 11r Aa.Jn ,ur. "unc 22 23 24 25 26 27 28 The Travelers Home The Travelers Casualty Travelers Excess and Travelers Personal Security Travco Insurance and Marine Insurance Travelen Personal Northland Casualty Current Year Liablllties Comoanv Surolus Lines Comoanv Insurance Comoanv Comoanv Company Insurance Comoanv Comnanv Losses 593.780,281 $87,312,675 $87,312.675 587,312.675 $87,312,675 $87,312,675 $45,273 ,239 Reinsurance payable on paid tosses and loss adj , exp . 4,167,348 3,879.943 3.879,943 3,879.943 3,879.,943 3,879,943 2,011 ,814 Loss adjustment expenses 21,348,230 19,875.938 19.875,938 19.875.938 19,875.,938 19,875,938 10,306,042 Commissions· payable; contingent commissions 2,292.619 2,134,508 2,134.508 2.134,508 2,134.508 2,134,508 1,106,782 Other expenses (exct taxes . licenses and fees} 1,190,432 1,669 014 1,667 ,363 1,667.363 1,678,317 1,667,363 867,188 Taxes; licenses and faas (excl. fd. and fr. inc . taxes) 869.752 809.770 809,770 809.770 809.770 809,770 419,880 Current federal and foreign income taxes 192.317 175,493 184 ,257 189,638 184.037 196,381 179,042 Borrowed money $0 and interest thereon SO Unearned premiums 33,878,117 31 ,541 ,696 31 ,541 ,696 31 ,541,696 31 ,541 ,696 31.541 ,696 16,354 ,953 Advance premium Policyholders (dMdends declared and unpoid) 172.430 160,539 160,539 160.539 160,539 160,539 83,242 Ceded reinsu,ance premiums payable 751 ,371 13,093 ,248 10,975,702 18,530.421 127,184,226 73,653,463 362,731 funds held by company under reinsurance treaties Amounts withheld or ,etained by company for account 115.232 107,283 107,283 107,283 107,283 107,183 215 ,976 Remittances and items not allocat~ Pr 32 TRAVELERS REINSURANCE POOL AND ITS 100% REIN SURED AFFILIATES APPENDIX A 11 IARII ITIFS c.11001 11c. um np.u::o cm.ans 29 30 31 32 Discover Property & American Equity Discover Specialty Casualty Insurance St. Paul Guardian Specialty Insurance Current Year Liabilities Insurance Comoanv Comnanv Insurance Comoanv Comoanv losses $45,273,239 $45 ,.273,239 $32,338,028 $32,338,028 Reinsurance payable on paid losses and loss adj. exp. 2,011 ,814 2,011 ,814 1,437,006 1,437,006 loss adjustment expenses 10,306,042 10,306,042 7,361 .459 7,361.459 Commissions payable: contingent commissions 1,106.782 1,106.782 790,559 790,559 Other expenses (excl. taxes , licenses and fees) 865,688 870,339 618 ,048 618,048 Taxes , licenses and fees (excl. Fd. and fr. inc . taxes) 419,880 419,880 299,914 299,914 Current federal and foreign income taxes 96,048 94.484 66,427 78,504 Borrowed money SO and interest thereon SO Unearned premiums 16,354,953 16,354,953 11 ,682,109 11 ,682,109 Advance premium Policyholders (dividends declared and unpaid) 83,242 83,242 59,459 59,459 Ceded reinsurance premiums payable 362,731 362.731 259,094 259,094 Funds held by company under reinsurance treaties Amounts withheld or retained by company for account 55 ,631 55 ,631 39,739 39,739 Remittances and items not allocated 203 Pr 33 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES APPENDIX A STATEMEMI QE IMCQME 1 2 3 4 5 6 7 St. Paul Fire The Travelers Travelers The Phoenix The Standard United States Travelers and Marine Ins. Indemnity Casualty and Insurance Fire Insurance Fidelity and Casualty Ins. Current Year Income Company Comoanv Suretv Comoanv Comoanv Company Guarantv Co. Co. of America Premiums earned $6,189,075,663 $5.737,049,640 $5,015 ,284,938 $1 ,232,051 ,676 $1 ,192,238,861 $1 ,086,315,720 $672,481 ,160 losses incurred 3,598,196,447 3,338,399,109 2,918,012,129 716,604,157 693,672,824 632,044,866 391 ,265,870 Loss adjustment expenses incurred 642,914,503 601 ,724,911 525,229,151 128,985,559 124,858,007 113,765,247 70,426,100 Other underwriting expenses incurred 1,805,087,245 1,672,662,786 1,462, 144,398 359,072,809 347,582,456 316,702,188 196,053,731 Total underwriting deductions 6,046.198, 194 5,612.786,806 4,905,385,678 1,204,662,525 1,166,113,286 1,062,512,302 657.745,701 Net underwriting gain {loss) 142,877,469 124 .262, 834 109,899,260 27,389.151 26.125,574 23,803,418 14 ,735,459 Net investment income earned 813,768,521 801 ,552,120 1,023,372.977 139.321 ,318 135,885.165 96,684,988 73 ,693,541 Net realized capital gains (losses) less capital gains (2,889,926) (15,525,005) {5,326.473) 2,589,137 (14 ,810.121) 6,079,044 1,290,839 Net investment gain (loss) 810,878.594 786,027,115 1,018,046,505 141 ,910,455 121 .075,044 102,764,032 74,984,380 Net gain (loss) from agents' or premium balances (13,689,623) (12,861 ,288) (11 ,243,273) (2,761 ,118) (2,672,762) (2,435,306) (1 ,507,570) Finance and service charges not included in prem. 22,603,074 21 ,235,401 18,563,880 4,558,910 4,413,024 4,020,958 2,489,165 Aggregate write-ins for miscellaneous income 3,079,677 40,543,885 1,355,014 1,360,644 574,373 (264,276) 1,455,830 Tot.al other income 11 ,993,127 48,917,999 8,675,621 3,158,435 2,314 ,635 1,321 ,376 2,437,425 Net income before cfl'lidends to policyholders; after c. 965,749.190 959,207,948 1,136,621 ,386 172,458,042 149,515,253 127,888,827 92,157,263 DMdends to policyholders 10,267,464 9,646,197 8,432,657 2,070,888 2,004,620 1,826,523 1,130,705 Net income; after dil,;dends to policyholders; after c. 955,481 ,726 949,561,751 1,128,188,729 170,387, 153 147,510,634 126,062,303 91 ,026,558 Federal and foreign income taxes incurred 133.174,664 124,455,888 99,899,716 23,012,806 25,491 ,161 20,690,920 17,095,942 Net income m,aazm im ia~a~ ii a2amm im JZ~ a:iz m2ai~m imm aaa m~Jam 34 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES APPENDIX A STATEMENT OF INCOME 8 9 10 11 12 13 14 The Automobile The TrBvelers lnsuronce The Charter The TrBvelers St. Paul Farmington Indemnity Company of Oak Fire Northland Indemnity Protective Casualty Company of Hartford, Insurance Insurance Company of Insurance Current Year Income Company Connecticut Connecticut Company Company America Company Premiums earned $364,569,541 $337,472,230 $337,472,230 $312,839,221 $300,522,716 $189,674 ,173 $142,971.455 Losses incurred 212,114,830 196,349,539 196,349,539 182,017,456 174 ,851,414 110,357,040 83,126,082 Loss adjustment. expenses incurred 38,179,712 35,342,029 35,342,029 32,762,319 31,472,466 19,863,763 14 ,962,310 Other underwriting expenses incurred 106,285,532 98,385,931 98,385,931 91 ,204,469 87,613,743 55,297,193 41 ,652,426 Total underwriting deductions 356,580,074 330,077,499 330,077,499 305,984,244 293,937,623 185,517,996 139,740,819 Net underwrit.ing gain (loss) 7,989,467 7,394,732 7,394,732 6,854,977 6,585,093 4,156,178 3,230,637 Net investment income earned 29,176,063 28,777,333 29,829,688 24,586,016 41,424,903 25,285,404 14.430,773 Net realized capital gains (losses) less capital gains 845,828 {7,913,522) 1,951 ,234 755,867 458,746 (3 ,691 ,969} 483,068 Net investment gain (loss) 30,021,891 20,863,811 31 ,780,922 25,341 ,883 41 ,883,649 21 ,593,435 14 ,913,841 Net gain (loss) from agents· or p,emium balances {817,291) (756,546) (756,546) (701 ,324) (673,713) (425,212) (320,290) Finance and sef\/ice charges not included in prem. 1,349,437 1,249,141 1,249,141 1,157,963 1,112,374 702,072 528,834 Aggregate write-ins for miscellaneous income 2,133,398 (644,428) (461 ,501) 4,318,608 {62,809) 1,847,936 (196,322) Total other income 2,665,545 (151 ,833) 31 ,094 4,775,247 375,852 2,124 ,796 12,222 Net income before dividends to policyholders; after c. 40,676,902 28,106,710 39,206,748 36,972,107 48,844,594 27 ,874,409 18,156,699 Dividends to policyholders 612,983 567,423 567,423 526,006 505,297 318,917 240,223 Net income; after dividends to policyholders; after c. 40,063,919 27,539,286 38,639,325 36,446,101 48,339,297 27,555,492 17,916,476 Federal and foreign income taxes incurred 7,140,906 5,762,572 6,326.323 5,441.436 5,350,414 2,947,336 2,703,738 Net income iJ~ ~~J gJ~ i~l ZZ!i ZJ~ liJZ JlJ gg~ iJl g~ !ills I ~z ~aa aaJ i~~ figa J~s :m ~lZZJ§ 35 TRAVELERS REINSURANCE POOL AND ITS 100% REIN SURED AFFILIATES APPENDIX A STATEMENT OF INCOME 15 16 17 18 19 20 21 Tr111velers Travelers Tr111velers Tr111velers Tr111velers St. Paul Property Property Constitution Casu111lty Travelers Commercial Mercury Casualty Casu111lty State Company of Commercial Insurance Insurance Company of Insurance Insurance Current Year Income Connecticut Casualty Company Company Companv America Comoanv Comoanv Premiums earned $115,775,145 $115,775,145 $115,775,145 $98,532,038 $88,678,834 $73,899,029 $71 ,435,728 Losses incurred 67,360,791 67,360.791 67,360,791 57,328,332 51 ,595.499 42,996,249 41 ,563,041 Loss adjustment expenses incurred 12,124,628 12.124,628 12,124.628 10,318,829 9,286,947 7.739,119 7,481 ,148 Other underwriting expenses incurred 33,752,823 33,752,823 33,752,823 28,725,803 2.5,853,221 21 ,544,347 20,826,200 Total underwriting deductions 113,238,241 113,238,241 113,238,241 96,372,964 86,735,667 72,279,716 69,870,389 Net underwriting gain (loss) 2,536,904 2,536,904 2,536,904 2,159,074 1,943,167 1,619,313 1,565,338 Net investment income earned 9,255.263 9,205,292 7,898,782 9,033,830 16,179,325 4,998,559 5,512,233 Net realized capital gains (losses) less capital gains 202,740 136,433 112,754 104 ,684 580,854 57,564 180,099 Net investment gain (loss) 9,458,003 9,341,725 8,011 ,536 9,138,514 16,760,179 5,056,123 5,692,332 Net gain (loss) from agents' or p Net income llD 562 ZlD ~la c55 a,a ~a 5,a 5l5 ia 5la aza ~l5 55Q ZJ5 ~5 ,al JZ5 ~5 lZU5Z 36 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES STATEMENT OE INCOME 22 23 24 25 26 n 28 Travelers The Travelers Personal Home and Travelers The Travelers Travelers Excess Security Travco Marine Personal Northland Casualty and Surplus Lines Insur.a nee Insurance Insurance Insurance Casualty Current Year Income Company Company Company Company Company Company Company Premiums earned $71,435,728 $66,509,126 $66,509,126 $66,509.126 $66,509,126 $66,509,126 $34,486,213 Losses incurred 41 ,563.041 38,696,624 38,696,624 38,696,624 38,696,624 38,696,624 20,064,917 Loss adjustment expenses incurred 7,481 ,148 6,965,206 6,965,206 6,965,206 6,965,206 6,965,206 3,611 ,580 Other underwriting expenses incurred 20,826,200 19,389,907 19,389,907 19,389,907 19,389,907 19,389,907 10,054,014 Total underwriting deductions 69,870,389 65,051 ,738 65 ,051 ,738 65 ,051 ,738 65,051,738 65,051 ,738 33,730,511 Net underwriting gain {loss) 1,565,338 1,457,388 1,457,388 1,457,388 1,457,388 1,457,388 755,703 Net investment income earned 5,514,296 5,661 ,612 5,282,983 5,435,176 6,864,516 5,292,120 2,856,497 Net realized capital gains (losses) less capital gains 201,375 178,436 188,648 163,402 328,260 61 ,255 39,642 Net investment gain (loss) 5,715,671 5,840,048 5,471 ,631 5,598,578 7,192,776 5,353,375 2,896,139 Net gain (loss) from agents' or premium balances (160,145) (149,100) (149,100) (149,100) (149,100) (149,100) (77,311) Finance and service charges not included in prem. 264,417 246,181 246,181 246,181 246,181 246,181 127,649 Aggregate· write-ins for miscellaneous income (17,517) (192,704) (92,738) (256,299) (1 ,315,110) (342,379) (8,457) Total other income 86,755 (95 ,623) 4,342 (159,219) (1 ,218,030) (245,298) 41 ,882 Net income before d1vidends to policyholders; after c. 7,367,764 7,201 ,813 6,933,361 6,896.747 7,432,135 6,565,464 3,693,723 Dividends to policyholders 120,112 111 ,828 111 ,828 111 ,828 111 ,828 111 ,828 57,985 Net income; after dividends to policyholders; after c. 7,247,653 7,089,985 6,821 ,533 6,784,919 7,320,307 6,453,636 3,635,738 Federal and foreign income taxes incurred 1,089,633 1,047,372 1,125,896 1,061 ,596 700,442 1,102,459 380,670 Net income $6 j5B G2Q $6 042 613 S5 695 63Z S5123 323 S6 6m Bli:4 S5 35j HZ 13 255 06B 37 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES APPENDIX A STATEMENT OF INCOME 29 30 31 32 Discover Property & American Equity Discover Specialty Casualty Insurance St. Poul Guardian Specialty Insurance Current Year Income Insurance Company Company Insurance Company Company Premiums earned $34,486,213 $34,486,213 $24,633,010 $24 ,633,010 Losses incurred 20,064,917 20,064,917 14,332,083 14,332,083 Loss adjustment expenses incurred 3,611 ,580 3,611 ,580 2,579,696 2,579,696 Other underwriting expenses incurred 10,054,014 10,054 ,014 7,181,435 7,181,435 Total underwriting deductions 33,730,511 33,730,511 24,093,214 24,093,214 Net underwriting gain (loss) 755,703 755,703 539.796 539,796 Net investment income earned 2,973,003 3,725,579 1,954.287 2,135,576 Net realized capital gains (losses) less capital gains 53,948 37,761 5,060 9,245 Net investment gain (loss) 3,026,951 3,763,340 1,959,346 2,144,821 Net gain (loss) from agents' or premium balances (77,311) cn.J11i (55,222) (55,222) Finance and service charges not included in prem. 127,649 127,649 91 ,178 91 ,178 Aggregate write-ins for miscellaneous income (8,457) (145) (10,912) (6,040) Total other income 41 ,882 50,193 25,044 29,915 Net income before dividends to policyholders; after c. 3,824,535 4,569,236 2,524,186 2,714,532 Dividends to policyholders 57,985 57,985 41.418 41 ,418 Net income; after dividends to policyholders; after c. 3,766,550 4,511 ,251 2,482,769 2,673.114 Federal and foreign income taxes incurred 532,483 609,611 412,736 367,520 Net income iJ ,J4 g~a iJ aaJ Iida i, QZQ QJJ i, JQ5 5a4 38 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES APPENDIXB Growth of the Comnonv 1 2 3 4 5 6 1 St. Poul Fire The Travelers Travelers The Phoenix The Standard United States Travelers and Morine Ins. Indemnity Casualty and Insurance Fire Insurance Fidelity and Casualty Ins. Surplus Company Company Surety Company Company Company Guaranty Co. Co. of America Surplus as regards policyholders , December 31 , 2014 $5,994,070,231 $6,633,406,196 $6,469,470,525 $1,739,387,453 $1 ,215,172,062 $2,466,231 ,987 $566,182,898 Net lncome/(Net Loss) 4,565,014,179 4,825,389,015 5,280,423,190 981 ,793,261 821 ,887.175 694,416,990 362,797,245 Change in net unrealized capital gain (loss) (827.996.185) (117,636,370) 76,031 ,060 (123,675,454) (22.212,645) (17,949,060) (2,439,220) Change in net unrealized foreign exchange capital gain {loss) (5 ,313.169) (2,917 ,347) (6,372,790) 1,136 1,050 957 590 Change in net deferred income tax (182,335,664) (444 ,471,799) (160,228,949) {36,890,249) (35,295,848) (50,283,873) (15,975,375) Change in nonadmitted assets (25,766,514) 341 ,109,232 98,043,615 18,740,607 42,853,626 (1 ,261 ,899) 1,744 ,611 Change in provision for reinsurance 25,052,154 47,926,942 Cumulatiw effect of changes in accounting principles Capital adjustment - return of capital (1 ,275,000,000) Dividends to stockholders (3,674,000,000) (4,574,000,000) (4,867,000,000) (970,000,000) (810,000,000) (933,565,698) (349,200,000) Change in aggregate write-ins for gains and losses in surplus 4,667 Surplus as regards policyholders. December 31 , 2019 :i!i a!iu z,~ 032 ~6 ZQB alQ !iJ6 ~§ uao J§§ §~J ~j 6Qa J5ti ZM :tiJ ZlZ~Q5~g ~882 saa ~l!A i~g;J lJD 1~9 39 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES APPENDIX B <:.rn\lilth nf •h- r--n•nu 8 9 10 11 12 13 14 The Automobile The Travelers Insurance The Charter The Travelers St. Paul Farmington Indemnity Company of Oak Fire Northland Indemnity Protective Casualty Company of Hartford, Insurance Insurance Company of Insurance Surplus Company Connecticut Connecticut Comoanv Comoanv America Comoanv Surplus as regards policyholders, December 31 . 2014 $287,654,145 $383,067,297 $320,782,357 $253 ,648,349 $538,940,363 $202,800,166 $226,222,759 Net lncome/(Net Loss) 166,484,267 166,252,521 160,311 ,812 147,617 ,869 241 ,425,640 101,601 ,099 78,612.123 Change in net unrealized capital gain (loss) 6,362,079 (17,324 ,348) 3,294,340 (328,346) (2,334 ,619) 273,142 28,013 Change in net unrealized foreign exchange capital gain (loss) 321 297 (272,983) 275 265 167 126 Change in net deferred income tax (7,600,878) (5,208,873) (9,865,113) (4 ,604,885) (8 ,443,396) (3,912.104) (3,206.112) Change in nonadmitted assets 4,082,902 (5 ,453.137) 12,740,805 (1 ,183,288) 8,598,581 (1 ,350.109) 1,073.103 Change in prO'llision for reinsurance Cumulative effect of changes in accounting principles Surplus adjustments paid in Dividends lo stockholders (173,700,000) (194 ,600,000) (179,700,000) (160,800,000} (239 ,400,000) (111 ,800.000) (81,700,000) Change in aggregate write-ins for gains and losses in surplus Surplus as regards policyholders, December 31 , 2019 iZl!J zaz m iJZliZJJ m 11czm m IZa:I a:13 3Z5 i5Ja ZD!i DJJ im lilZJliC iZZl gJg ClJ 40 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES APPENDIX B f:r-•• .... nf thA r~mn•nu 15 16 17 18 19 20 21 Travelers Travelers Travelers Travelers Travelers St. Paul Property Property Constitution Casualty Travelers Commercial Mercury C111ualty Casualty State Company of Commercial Insurance Insurance Company of Insurance Insurance Sumlus Connecticut Casualty Company Company Comoanv America Comoanv Comoanv Surplus as regards policyholders. December 31 , 2014 $92,761 .432 $96,439,841 $94,348,252 $130,248,926 $505,005,950 $70,911 ,453 $63,427,810 Net lncome/(Net Loss) 52,303 .242 53 ,670,453 47,614 ,510 58,270.269 80,650.334 34,003 ,031 31.971 ,298 Change in net unrealized capital gain (loss) 62,994 (505,012} Change in net unrealized foreign exchange capital gain (loss) 102 102 102 87 78 65 63 Change in net deferred income tax (2,029,877) (2,439,239) (2,485,594) (2,422,675) (2,171 ,540) (1,659,898) (1,772,095) Change in nonadmitted assets 301 .319 799,018 979,350 1,023,824 120,755 614 ,637 640 ,856 Change in provision for reinsurance Cumulative effect of changes in accounting principles Surplus adjustments paid in Dividends to st.ockholders (56,000,000) (57,300,000) (43 ,900 ,000) (72,000,000) (129,200,000) (24 ,800,000) (34 ,600,000) Change in aggregate write-ins for gains and losses in surplus Surplus as regards policyholders, December 31 , 2019 iaz Jsa ,:1, i~l :lZQ lZ6 i3~ 556 §,Q m~ ~,a~Ja ~5J SQQ ~§6 1z3 m ,as iS3!i!iZ m 41 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES APPENDIX B r_,M ...... nf '"'- r-----•• 22 23 24 25 26 21 28 Travelers The Travelers Personal Home and Travelers The Travelers Travelers Exceu Security Travco Marine Personal Northland Casualty and Surplus Lines Insurance Insurance Insurance Insurance Casualty Surplus Company Company Company Comoanv Comoanv Company Comoanv Surplus as regards policyholders, December 31 , 2014 $63,156,579 $65,340,232 $66,849,795 $70.169,071 $137,293.770 $64 ,865 ,692 $35.409.151 Net lncome/(Net Loss) 32,570,921 31 ,189,706 30,393,839 29,400,629 36,054 ,342 28 ,996,143 16,985,604 Change in net unrealized capital gain {loss) 13,989 13,989 13,989 (2,225) Change in net unrealized foreign exchange capital gain (loss) 63 59 59 59 59 59 30 Change in net deferred income tax (1,766,270) (1 ,629,445) (1 ,673.168) (1 ,403,689) (1 ,481 ,204) (1 ,502.753} (1 ,288,264) Change in nonadmitted assets 627,773 584,248 611 ,760 461 ,161 450,468 560,225 718,791 Change in provision for reinsurance Cumulative effect of changes in accounting principles Surplus adjustments paid in Dividends to stockholders (35,000,000) (33,300,000) {32,000,000) (31 ,500,000) (60 ,600,000) (28,000,000) (14 ,000,000) Change in aggregate write-ins for gains and losses in surplus Surplus as regards policyholders, December 31 , 2019 153 5aaQ§5 162 m zaa ~~ 39§225 l§Z l,Z 2Jl llJl ZJl ~~ i~ srn J§Z iJz a2J DO§ 42 TRAVELERS REINSURANCE POOL AND ITS 100% REINSURED AFFILIATES APPENDIX B r.rn\Uth nf •h~ r ------29 30 31 32 Discover Property & American Equity Discover Specialty Casualty Insurance St. Paul Guardian Specialty Insurance Surplus Insurance Company Company Insurance Company Company Surplus as regards policyholders, December 31 , 2014 $38,674 ,331 $64,062,846 S26,126 ,263 $28 ,547,591 Net lncome/(Net Loss) 17,300,657 19,516,819 12,642,894 13,074,798 Change in net unrealized capital gain (loss) 178,851 113,883 0 0 Change in net unrealized foreign exchange capital gain (loss) 30 30 21 20 Change in net deferred income tax (701 .139) (648.755) (618,525) (568,787) Change in nonadmitted assets 273,554 199,314 269.445 .219,536 Change in prO\.'ision for reinsurance Cumulative effect of changes in accounting principles Surplus adjustments paid in Dividends to stockholders (18,900,000) (20,300,000) (15,700,000) (14,300,000) Change in aggregate write-ins for gains and losses in surplus Surplus as regards policyholders. December 31 , 2019 ~!i a,!i ,a4 l!iZ W lJ5 122 zza aaz ~Z!i azJ l5a 43