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YORK INSURANCE COMPANYOF MAINEREPORT OF EXAMINATIONAS OFDECEMBER 31, 2006
I hereby certify that the attached report of examination dated February 29, 2008 shows the condition and affairs of YORK INSURANCE COMPANY OF MAINE of South Portland, Maine as of December 31, 2006, and has been filed in the Bureau of Insurance as a public document.
Dated this _____ day of ____________, 2008
TABLE OF CONTENTS SCOPE OF EXAMINATION ...................................................................................................................2 License and Location .......................................................................................2 REINSURANCE ......................................................................................................................................5
February 29, 2008 Honorable Mila Kofman RE: York Insurance Company of Maine Statutory Examination of the Period Ended December 31, 2006 Dear Superintendent: Pursuant to your instructions and in accordance with the provision of 24-A M.R.S.A. §221, the Maine Bureau of Insurance (hereinafter, “Bureau”) conducted an examination, as of December 31, 2006, on the condition and financial affairs of YORK INSURANCE COMPANY OF MAINE The examination of York Insurance Company of Maine, (hereinafter, “Company” or “YICM”), was performed at the home office of the Company’s lead insurance affiliate, OneBeacon Insurance Company, in Canton, Massachusetts. The examination was made in accordance with the standards and procedures established by the Maine Bureau of Insurance and the National Association of Insurance Commissioners (hereinafter, “NAIC”) and for that reason, included tests of the accounting records and other procedures considered necessary under the circumstances. The accompanying financial statements have been prepared pursuant to statutory accounting practices prescribed or permitted by the NAIC and the Bureau. These practices differ in certain respects from generally accepted accounting principles. For purposes of this report, comments on various items may be limited to matters involving departure from laws, rules or regulations, a significant change in the amount of the item, or where an explanation, comment and/or recommendation is warranted. The following report is respectfully submitted. The Company was last examined as of December 31, 2004 by Bureau of Insurance of the State of Maine. This examination of the Company covers the period of January 1, 2005 through December 31, 2006, and was conducted by the Pennsylvania Department of Insurance representing the Maine Bureau of Insurance. This examination covers a two year period in order to coordinate with the examination of the affiliated group. Examined concurrently with the Company were all the affiliated insurance companies in the OneBeacon Group. See the companies in the Affiliated Entities section and the Reinsurance section of this report. The Company writes multiple lines, and is currently licensed in Maine, Massachusetts, New Hampshire and Vermont. The Company is a member of the OneBeacon Group Insurance Companies. The statutory home office is at 707 Sable Oaks Drive, South Portland, Maine. The main administrative office is located at One Beacon Lane, Canton, Massachusetts. The primary location of the Company’s books and records is Canton, Massachusetts. The Company was first chartered in 1987, as York Mutual Insurance Company, subsequent to the demutualization of the former Maine Bar Association Mutual Title Insurance Company. The Company was acquired in 1997 by Commercial Union Insurance Company (a wholly owned subsidiary of CGU Corporation) and changed its name to Commercial Union York Insurance Company. In 2001 CGU Corporation was acquired by White Mountains Insurance Group, Ltd. and the Company’s name was changed to York Insurance Company of Maine. The present entity, YICM, is wholly owned by OneBeacon American Insurance Company, which, in turn, is wholly owned by OneBeacon Insurance Company, and its ultimate parent is White Mountains Insurance Group, Ltd. YICM is affiliated with all the Companies in the White Mountain Insurance Group and shares several services with the group including investment management services, financial statement preparation, reinsurance, federal tax preparation, and general accounting services. The following abbreviated organization chart shows the direct ownership of YICM and its ultimate parent, White Mountains Insurance Group, Ltd.
The Company is governed by at least a seven (7), but not more than twenty-one (21) member Board of Directors. The following are the duly elected members of the Board of Directors and the Officers serving at December 31, 2006: Directors
Officers
Each Director and Officer of the Company is required to complete a conflict of interest statement annually to disclose any material interest or affiliation which is likely to be in conflict with his/her official duties and responsibilities to the Company. The Company is in substantial compliance with its conflict of interest policy. Reviews of the Company’s Articles of Incorporation, Bylaws, and Minutes of the Board of Directors’ meetings held from the period January 1, 2004 to the completion of field work were performed. The reviews indicated that the Company is conducting its affairs substantially in compliance with its Articles of Incorporation and Bylaws. The following table presents selected comparative data that YICM reported for the period under examination:
As of December 31, 2006, the Company had adequate coverage under a Dishonesty Bond in compliance with 24-A M.R.S.A. §3359 (2)(F). The policy is issued to the parent company and includes subsidiaries. The aggregate limit of liability is $20,000,000. Territory and Plan of Operation The Company operates as a stock property and casualty insurance company providing multiple lines of insurance products, and is currently licensed in Maine, Massachusetts, New Hampshire and Vermont. Account and records were reviewed and tested in order to assess their impact on financial condition and conformity with related laws. The Company participates in an inter-company reinsurance agreement with an affiliate, OneBeacon Insurance Company, a Pennsylvania corporation, under a written reinsurance agreement and cedes 100% of its business to the affiliate. The Company does not assume business from either affiliates or non-affiliates. The accompanying financial statements fairly present in all material respects, the Company’s statutory financial position as of December 31, 2006, and statutory results of operations for the period then ended. The financial statements as of December 31, 2005 are unexamined and are presented for comparative purposes only. STATUTORY STATEMENT OF ADMITTED ASSETS, LIABILITIES, AND CAPITAL
STATUTORY STATEMENT OF OPERATIONS
STATEMENT OF STATUTORY CAPITAL AND SURPLUS
NOTES TO THE FINANCIAL STATEMENTS Note 1 – Accounting Practices YICM reports its financial statements in the Annual Statement in accordance with the Statement of Statutory Accounting Principles as required by the State of Maine. Note 2 - Bonds Bonds are stated at amortized value using the scientific interest method as required by the Statements of Statutory Accounting Principles (hereinafter, “SSAP”) No. 26.
Pursuant to 24-A M.R.S.A. §412 YICM has maintained the required security deposit with the Treasurer of Maine. Note 3 – Cash, Cash Equivalents, and Short-term Investment Cash, cash equivalents, and short-term investments consist entirely of U.S. Treasury bills and money market accounts. Note 4 – Affiliates YICM cedes 100% of its written premium to an affiliate under a written reinsurance agreement; see the reinsurance section. Pursuant to this agreement, the reinsuring affiliate performs all insurance operations for YICM. YICM also has an investment management agreement with an affiliate, White Mountains Advisors LLC, a Delaware limited liability company. Pursuant to this agreement, the affiliate manages all investments and performs all recording and reporting of investment transactions for YICM. Note 5 – Federal and Foreign Income Taxes YICM is party to an inter-company Tax Allocation Agreement with all of its insurance company affiliates. Current federal and foreign income tax recoverable or payable is based upon separate return calculations. The deferred tax asset was determined to be substantially in compliance with SSAP No. 10. The Company’s financial condition is reflected in statements and supporting exhibits contained in this report. The basis of preparation of such statements conforms to the laws, rules and regulations prescribed and/or permitted by the Maine Bureau of Insurance. Acknowledgement of cooperation and assistance extended by the examiners to all Company personnel is hereby expressed.
STATE OF MAINE COUNTY OF KENNEBEC, SS Kendra L. Godbout, CPA, CFE, being duly sworn according to law, deposes and says that in accordance with the authority vested in her by Mila Kofman, Superintendent of Insurance, pursuant to the Insurance Laws of the State of Maine, she has made an examination on the conditions and affairs of the YORK INSURANCE COMPANY OF MAINE of South Portland, Maine as of December 31, 2006 and that the foregoing report of examination, subscribed to by her, is true to the best of her knowledge and belief. The following examiners from the Bureau of Insurance assisted: Graham S. Payne ______________________________
Subscribed and sworn to before me This ____ day of July, 2008
_____________________________
Last Updated: June 24, 2009 |
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