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JEFFERSON FARMERS MUTUAL FIRE INSURANCE COMPANY

REPORT OF EXAMINATION
AS OF
DECEMBER 31, 2004

TABLE OF CONTENTS

SCOPE OF EXAMINATION
HISTORY AND ORGANIZATION
MANAGEMENT
LINES OF BUSINESS AND TERRITORY
SCHEDULE OF PREMIUM NOTES & POLICIES IN-FORCE
UNDERWRITING RULES AND PRACTICES
FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS

I hereby certify that the attached report of examination dated January 17, 2006 shows the condition and affairs of JEFFERSON FARMERS MUTUAL FIRE INSURANCE COMPANY, Jefferson, Maine as of December 31, 2004 and has been filed in the Bureau of Insurance as a public document.

 

This report has been reviewed.


_______________________
James C. Williams, CPA, CFE
Director of Financial Affairs and Solvency

Dated this ____ day of ____________, 2006

January 17, 2006

Alessandro A. Iuppa, Superintendent
State of Maine
Bureau of Insurance
34 State House Station
Augusta, ME 04333

Dear Sir:

In accordance with your instructions and pursuant to statutory provisions, an examination has been made on the conditions and financial affairs of

JEFFERSON FARMERS MUTUAL FIRE INSURANCE COMPANY

at its Secretary/Treasurer’s home in Jefferson, Maine, hereinafter referred to as the “Company”. The following report is respectfully submitted.

SCOPE OF EXAMINATION

The prior full scope examination covered the period January 1, 1996 to the close of business on December 31, 2000. This examination is a limited scope examination and covers the period January 1, 2001 through December 31, 2004.

A limited scope examination consists of confirming of all cash and investments, review of corporate records, and an analytical review and reasonableness testing of relevant Annual Statement line items. Only those adjustments considered material to the financial statements are being addressed in this Report of Examination. Other findings will be communicated to Company management in the form of a Management Comment Letter.

HISTORY AND ORGANIZATION

The Jefferson Farmers Mutual Fire Insurance Company was incorporated in 1891 for the purpose of insuring real and personal property against loss by fire or lightning.

MANAGEMENT

Management of the Company is vested in a Board of Directors. The following are the duly elected members of the Board of Directors and the Officers serving as of December 31, 2004.

Board of Directors

Clifton Bond Errol Clark
Robert Clark Paul Daniels
Raymond Flagg Jr. Richard Johnston
Lincoln Orft  

Officers

Richard Johnston President
Raymond Flagg, Jr. Vice President
Robert Clark Secretary/Treasurer

LINES OF BUSINESS AND TERRITORY

The Company issues fire and lightning policies in the State of Maine.

SCHEDULE OF PREMIUM NOTES & POLICIES IN-FORCE

Balances at 12/31/04

Insurance In-Force $126,000
Premium Notes $ 13,755

UNDERWRITING RULES AND PRACTICES

The Company issues fire and lightning policies for a three-year period under an assessment plan and requires a promissory note for each policy. The amount of the note is 10% or 12.5% of the insured amount. The Company charges a premium equal to 10% of the note.

The amount of insurance that the Company may retain is limited by the Bylaws at $5,000 per risk. The amount of risk retained by the Company is in compliance with the State of Maine’s prescribed percentage of surplus and outstanding notes.

FINANCIAL STATEMENTS

The following financial statements show the results of the Company’s operations for the year ending December 31, 2004 as determined by this examination.

BALANCE SHEET

December 31, 2004

Assets  
   
Cash and Certificates of Deposits (Note 1) $ 159,090
Total Assets $ 159,090
   
Liabilities and Surplus  
   
Unearned Premium Reserve $ 271
Other liabilities 646
Total Liabilities $ 917
   
Surplus as Regards to Policyholders $ 158,173
Total Liabilities and Surplus $ 159,090

STATEMENT OF INCOME

December 31, 2004

Income  
   
Net Assessment Income $ 541
Policy Fee Income 26
Interest & Dividend Income 3,646
Total Income $ 4,213
   
Expenses  
   
Agents' compensation $ 326
Salaries 1,000
Taxes, Licenses and Fees 80
Insurance 354
Miscellaneous 9
Total Expenses $ 1,769
   
Net Income $ 2,444

NOTES TO FINANCIAL STATEMENTS

Note 1 - Cash and Certificates of Deposit $ 159,090

Bank balances were confirmed directly from the Company’s various depositories and reconciled to the Company’s book balances. The Company includes cash and certificates of deposit as Deposits in Trust Companies and Banks.

STATE OF MAINE
COUNTY OF KENNEBEC, SS

Michael R. Nadeau, CPA, CFE, CISA, AES, being duly sworn according to law, deposes and says that in accordance with the authority vested in him by Alessandro A. Iuppa, Superintendent of Insurance, pursuant to the Insurance Laws of the State of Maine, he has made an examination on the conditions and affairs of

JEFFERSON FARMERS MUTUAL FIRE INSURANCE COMPANY

of Jefferson, Maine as of December 31, 2004 and that the foregoing report of examination subscribed to by him is true to the best of his knowledge and belief. The following examiners from the Bureau of Insurance assisted:

Margaret S. Boghosian, CPA, CFE

__________________________
Michael R. Nadeau, CPA, CFE, CISA, AES
Examiner-In-Charge

Subscribed and sworn to before me

This _____ day of ___________, 2006

_________________________
Notary Public
My Commission Expires:

 

Last Updated: October 22, 2013

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