ASI » Topics » PART IV

These excerpts taken from the ASI 10-K filed Apr 30, 2009.

Part IV

 

Item 15.

Exhibits and Financial Statement Schedules.

 

 

(a)

Financial Statements, Schedules and Exhibits

 

 

1.

Financial Statements

 

 

None

 

 

2.

Financial Statement Schedules

 

 

None

 

 

3.

Exhibits

 

 

The following is a list of exhibits filed with this report:

 

 

Exhibit

 

 

Number

Title

 

 

31.1

Certification of Chief Executive Officer

 

 

31.2

Certification of Chief Financial Officer (Interim)

 

 



 

 

Part IV



 










Item 15.



Exhibits and Financial Statement Schedules.




 












 



(a)



Financial Statements, Schedules and Exhibits




 












 



1.



Financial Statements




 




















 



None



 



 



2.



Financial Statement Schedules




 










 



None




 












 



3.



Exhibits




 










 



The following is a list of exhibits filed with this report:




 






























 



Exhibit



 



 



Number



Title








 












 



31.1



Certification of Chief Executive Officer




 












 



31.2



Certification of Chief Financial Officer (Interim)




 



 









 



 





These excerpts taken from the ASI 10-K filed Mar 16, 2009.

PART I

 

Item 1.

Business

1

Item 1A.

Risk Factors

28

Item 1B.

Unresolved Staff Comments

39

Item 2.

Properties

39

Item 3.

Legal Proceedings

39

Item 4.

Submission of Matters to a Vote of Security Holders

39

 

PART I



 





















































Item 1.



Business



1



Item 1A.



Risk Factors



28



Item 1B.



Unresolved Staff Comments



39



Item 2.



Properties



39



Item 3.



Legal Proceedings



39



Item 4.



Submission of Matters to a Vote of Security Holders



39





 



PART II

 

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities

 

 

41

Item 6.

Selected Financial Data

43

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

46

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

71

Item 8.

Financial Statements and Supplementary Data

72

Item 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

 

 

72

Item 9A.

Control and Procedures

72

Item 9B.

Other Information

72

 

PART II



 





































































Item 5.



Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities



 



 



41



Item 6.



Selected Financial Data



43



Item 7.



Management’s Discussion and Analysis of Financial Condition and Results of Operations



 



 



46



Item 7A.



Quantitative and Qualitative Disclosures About Market Risk



71



Item 8.



Financial Statements and Supplementary Data



72



Item 9



Changes in and Disagreements with Accountants on Accounting and Financial Disclosures



 



 



72



Item 9A.



Control and Procedures



72



Item 9B.



Other Information



72





 



PART III

 

Item 10.

Directors, Executive Officers and Corporate Governance of Registrant

 

 

74

Item 11.

Executive Compensation

74

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

74

Item 13.

Certain Relationships and Related Transactions, and Director Independence

 

 

74

Item 14.

Principal Accountant Fees and Services

74

 

PART III



 













































Item 10.



Directors, Executive Officers and Corporate Governance of Registrant



 



 



74



Item 11.



Executive Compensation



74



Item 12.



Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters



 



74



Item 13.



Certain Relationships and Related Transactions, and Director Independence



 



 



74



Item 14.



Principal Accountant Fees and Services



74





 



PART IV

 

Item 15.

Exhibits and Financial Statements and Schedules

75

 

 


PART I

Item 1.

Business

 

In this Report,the terms “we,” “our,” “us,” “Company” and “American Safety Insurance” refer to American Safety Insurance Holdings, Ltd. and, unless the context requires otherwise, includes our subsidiaries and non-subsidiary affiliates.

 

We maintain a web site at www.amsafety.com that contains additional information regarding the Company. Under the caption “Investor Relations - SEC Filings” on our website, we provide access, free of charge, to our filings with the Securities and Exchange Commission (“SEC”), including Forms 3, 4 and 5 filed by our officers and directors as soon as reasonably practical after electronically filing such material with the SEC.

 

Cautionary Statement Regarding Forward-looking Statements

 

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the United States securities laws. In some cases, these statements can be identified by the use of forward-looking words such as “may”, “should”, “could”, “anticipate”, “estimate”, “expect”, “plan”, “believe”, “predict”, “potential”, and “intend”. Forward-looking statements contained in this report include information regarding our expectations with respect to pricing and other market conditions, our growth prospects, the amount of our acquisition costs, the amount of our net losses and loss reserves, the projected amount of our capital expenditures, managing interest rate risks, valuations of potential interest rate shifts and measurements of potential losses in fair market values of our investment portfolio. Forward-looking statements only reflect our expectations and are not guarantees of performance. These statements involve risks, uncertainties and assumptions. Actual events or results may differ materially from our expectations. Important factors that could cause actual events or results to be materially different from our expectations include (1) actual claims exceeding our loss reserves, (2) the failure of any of the loss limitation methods we employ, (3) the effects of emerging claims and coverage issues, (4) inability to collect reinsurance recoverables, (5) the loss of one or more key executives, (6) a decline in our ratings with rating agencies, (7) loss of business provided to us by our major brokers, (8) changes in governmental regulations or tax laws, (9) increased competition, (10) general economic conditions, (11) changes in the political environment of certain countries in which we operate or underwrite business, and (12) the other matters set fort under Item 1A, “Risk Factors” included in this report. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Who We Are

 

We are a Bermuda-based specialty insurance and reinsurance company that provides customized products and solutions to small and medium-sized businesses in industries that we believe are underserved by the standard market. For over twenty years we have developed specialized coverages and alternative risk transfer products not generally available to our customers in the standard market because of the unique characteristics of the risks involved and the associated needs of the insureds. We specialize in underwriting these products for insureds with certain environmental, products liability, construction, healthcare and property risks, as well as developing programs for other specialty classes of risks and providing third party reinsurance. See Part II – Other Information, Item 1A for risks facing the Company.

 

We were formed in 1986 as a captive insurance company in Bermuda and began our operations providing insurance solutions to environmental remediation businesses in the U.S. at a time when insurance coverage for these risks was virtually unavailable in the standard market. Since then, we have continued to identify opportunities in other industry sectors underserved by the standard carriers where we believe we can achieve favorable returns on equity. We capitalize on these opportunities by (i) leveraging our strong

 

1

 

 


relationships with agents and brokers, which we refer to as producers, who we believe have a recognized commitment to the specialty market, (ii) charging adequate premium for the risks we underwrite and the services we offer due to the limited availability of coverages for these risks and (iii) mitigating our loss exposure through customized policy terms, specialized underwriting and proactive loss control and claims management.

 

In Bermuda, we assume third party and intercompany reinsurance premiums through our reinsurance subsidiary, American Safety Reinsurance, Ltd. (“American Safety Re”). American Safety Assurance, Ltd. (“American Safety Assurance”) is our Bermuda-based segregated account captive, which serves as a risk sharing vehicle for program managers and insureds by allowing them to assume a portion of their underwriting risks. During 2007, we acquired Ordinance Holdings, Limited, a Bermuda corporation, further diversifying our operations to provide actuarial consulting and brokerage services. Our Bermuda subsidiaries also facilitate the allocation of risk among our insurance subsidiaries and provide us with greater flexibility in managing our capital.

 

In the U.S. we insure and place risks through our two insurance subsidiaries, American Safety Casualty Insurance Company (“American Safety Casualty”) and American Safety Indemnity Company (“American Safety Indemnity”), as well as through American Safety Assurance (Vermont), Inc. (“ASA(VT))”, a sponsored captive insurance company, and American Safety Risk Retention Group, Inc. (“American Safety RRG”), a non-subsidiary affiliate that is a variable interest entity consolidated in our financial statements in accordance with generally accepted accounting principles (GAAP). The Company acquired the LTC Group of companies in February, 2008, now known as ASI Healthcare, which provides insurance and risk management solutions for the long-term care industry. Our subsidiaries, American Safety Insurance Services, Inc. (“ASI Services”) and American Safety Administrative Services, Inc. (“ASAS”) provide a range of insurance management and administrative services for our operations and our subsidiary American Safety Claims Services, Inc. (“ASCS”) provides claims services for American Safety Casualty, American Safety Indemnity and American Safety RRG.

 

PART IV



 













Item 15.



Exhibits and Financial Statements and Schedules



75





 



 








PART I











Item 1.



Business





 



In this Report,the terms “we,” “our,” “us,” “Company” and “American Safety Insurance” refer to American Safety Insurance Holdings, Ltd. and, unless the context requires otherwise, includes our subsidiaries and non-subsidiary affiliates.



 



We maintain a web site at www.amsafety.com that contains additional information regarding the Company. Under the caption “Investor Relations - SEC Filings” on our website, we provide access, free of charge, to our filings with the Securities and Exchange Commission (“SEC”), including Forms 3, 4 and 5 filed by
our officers and directors as soon as reasonably practical after electronically filing such material with the SEC.



 



Cautionary Statement Regarding Forward-looking Statements



 



This Annual Report on Form 10-K contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the United States securities laws. In some cases, these statements can be identified by the use of forward-looking words such as
“may”, “should”, “could”, “anticipate”, “estimate”, “expect”, “plan”, “believe”, “predict”, “potential”, and “intend”. Forward-looking statements contained in this report include information regarding our expectations with respect to pricing and other market conditions, our growth prospects, the amount of our acquisition costs, the amount of our net losses
and loss reserves, the projected amount of our capital expenditures, managing interest rate risks, valuations of potential interest rate shifts and measurements of potential losses in fair market values of our investment portfolio. Forward-looking statements only reflect our expectations and are not guarantees of performance. These statements involve risks, uncertainties and assumptions. Actual events or results may differ materially from our expectations. Important factors that could
cause actual events or results to be materially different from our expectations include (1) actual claims exceeding our loss reserves, (2) the failure of any of the loss limitation methods we employ, (3) the effects of emerging claims and coverage issues, (4) inability to collect reinsurance recoverables, (5) the loss of one or more key executives, (6) a decline in our ratings with rating agencies, (7) loss of business provided to us by our major brokers, (8) changes in governmental
regulations or tax laws, (9) increased competition, (10) general economic conditions, (11) changes in the political environment of certain countries in which we operate or underwrite business, and (12) the other matters set fort under Item 1A, “Risk Factors” included in this report. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.



 



Who We Are



 



We are a Bermuda-based specialty insurance and reinsurance company that provides customized products and solutions to small and medium-sized businesses in industries that we believe are underserved by the standard market. For over twenty years we have developed specialized coverages and alternative risk transfer products not generally available to our customers in the standard market
because of the unique characteristics of the risks involved and the associated needs of the insureds. We specialize in underwriting these products for insureds with certain environmental, products liability, construction, healthcare and property risks, as well as developing programs for other specialty classes of risks and providing third party reinsurance. See Part II – Other Information, Item 1A for risks facing the Company.



 



We were formed in 1986 as a captive insurance company in Bermuda and began our operations providing insurance solutions to environmental remediation businesses in the U.S. at a time when insurance coverage for these risks was virtually unavailable in the standard market. Since then, we have continued to identify opportunities in other industry sectors underserved by the standard
carriers where we believe we can achieve favorable returns on equity. We capitalize on these opportunities by (i) leveraging our strong



 






1



 






 








relationships with agents and brokers, which we refer to as producers, who we believe have a recognized commitment to the specialty market, (ii) charging adequate premium for the risks we underwrite and the services we offer due to the limited availability of coverages for these risks and (iii) mitigating our loss exposure through customized policy terms, specialized underwriting and proactive loss
control and claims management.



 



In Bermuda, we assume third party and intercompany reinsurance premiums through our reinsurance subsidiary, American Safety Reinsurance, Ltd. (“American Safety Re”). American Safety Assurance, Ltd. (“American Safety Assurance”) is our Bermuda-based segregated account captive, which serves as a risk sharing vehicle for program managers and insureds by allowing them to assume a
portion of their underwriting risks. During 2007, we acquired Ordinance Holdings, Limited, a Bermuda corporation, further diversifying our operations to provide actuarial consulting and brokerage services. Our Bermuda subsidiaries also facilitate the allocation of risk among our insurance subsidiaries and provide us with greater flexibility in managing our capital.



 



In the U.S. we insure and place risks through our two insurance subsidiaries, American Safety Casualty Insurance Company (“American Safety Casualty”) and American Safety Indemnity Company (“American Safety Indemnity”), as well as through American Safety Assurance (Vermont), Inc. (“ASA(VT))”, a sponsored captive insurance company, and American Safety Risk Retention
Group, Inc. (“American Safety RRG”), a non-subsidiary affiliate that is a variable interest entity consolidated in our financial statements in accordance with generally accepted accounting principles (GAAP). The Company acquired the LTC Group of companies in February, 2008, now known as ASI Healthcare, which provides insurance and risk management solutions for the long-term care industry. Our subsidiaries, American Safety Insurance Services, Inc. (“ASI Services”)
and American Safety Administrative Services, Inc. (“ASAS”) provide a range of insurance management and administrative services for our operations and our subsidiary American Safety Claims Services, Inc. (“ASCS”) provides claims services for American Safety Casualty, American Safety Indemnity and American Safety RRG.



 



PART III

 

Item 10.

Directors, Executive Officers and Corporate Governance of the Registrant

 

The information required by this Item 10 regarding directors and executive officers of the Company will be set forth in the Company’s 2009 Proxy Statement which will be filed with the Securities and Exchange Commission pursuant to applicable regulations, and is hereby incorporated by this reference. Additional information required by this Item 10 with respect to executive officers is set forth in Item 4 of this Report.

 

The information set forth in the second paragraph of Item 1 of this Report is incorporated herein by reference. The code of business conduct and ethics referenced therein applies to our principal executive officers, principal financial officer, principal and senior accounting officers or controller, or persons performing similar functions.

 

Item 11.

Executive Compensation

 

The information required by this Item 11 regarding executive compensation will be set forth in the Company’s 2009 Proxy Statement which will be filed with the Securities and Exchange Commission pursuant to applicable regulations, and is hereby incorporated by this reference.

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related

 

Stockholder Matters

 

The information required by this Item 12 regarding security ownership of certain beneficial owners and management of the Company will be set forth in the Company’s 2009 Proxy Statement which will be filed with the Securities and Exchange Commission pursuant to applicable regulations, and is hereby incorporated by this reference.

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence

 

The information required by this Item 13 regarding certain relationships and related transactions of the Company will be set forth in the Company’s 2009 Proxy Statement which will be filed with the Securities and Exchange Commission pursuant to applicable regulations, and is hereby incorporated by this reference.

 

Item 14.

Principal Accountant Fees and Services

 

The information required by this Item 14 regarding principal accountant fees and services will be set forth in the Company’s 2009 Proxy Statement which will be filed with the Securities and Exchange Commission pursuant to applicable regulations, and is hereby incorporated by reference.

 

 

74

 

 


PART III



 











Item 10.



Directors, Executive Officers and Corporate Governance of the Registrant





 



The information required by this Item 10 regarding directors and executive officers of the Company will be set forth in the Company’s 2009 Proxy Statement which will be filed with the Securities and Exchange Commission pursuant to applicable regulations, and is hereby incorporated by this reference. Additional information required by this Item 10 with respect to executive officers is set forth in
Item 4 of this Report.



 



The information set forth in the second paragraph of Item 1 of this Report is incorporated herein by reference. The code of business conduct and ethics referenced therein applies to our principal executive officers, principal financial officer, principal and senior accounting officers or controller, or persons performing similar functions.



 











Item 11.



Executive Compensation





 



The information required by this Item 11 regarding executive compensation will be set forth in the Company’s 2009 Proxy Statement which will be filed with the Securities and Exchange Commission pursuant to applicable regulations, and is hereby incorporated by this reference.



 











Item 12.



Security Ownership of Certain Beneficial Owners and Management and Related













 



Stockholder Matters





 



The information required by this Item 12 regarding security ownership of certain beneficial owners and management of the Company will be set forth in the Company’s 2009 Proxy Statement which will be filed with the Securities and Exchange Commission pursuant to applicable regulations, and is hereby incorporated by this reference.



 











Item 13.



Certain Relationships and Related Transactions, and Director Independence





 



The information required by this Item 13 regarding certain relationships and related transactions of the Company will be set forth in the Company’s 2009 Proxy Statement which will be filed with the Securities and Exchange Commission pursuant to applicable regulations, and is hereby incorporated by this reference.



 











Item 14.



Principal Accountant Fees and Services





 



The information required by this Item 14 regarding principal accountant fees and services will be set forth in the Company’s 2009 Proxy Statement which will be filed with the Securities and Exchange Commission pursuant to applicable regulations, and is hereby incorporated by reference.



 



 






74



 






 










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