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MEDOMAK 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 December 29, 2005 shows the condition and affairs of MEDOMAK MUTUAL FIRE INSURANCE COMPANY, Waldoboro, 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

December 29, 2005

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

MEDOMAK MUTUAL FIRE INSURANCE COMPANY

at its Secretary/Treasurer’s office in Waldoboro, 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, 1995 to the close of business on December 31, 1999. This examination is a limited scope examination and covers the period January 1, 2000 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

Medomak Mutual Fire Insurance Company was incorporated in 1894 for the purpose of insuring real and personal property against loss by fire or lightning. The Company is tax-exempt under IRS Code Section 501 (c) (15).

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

Dennis Bowden Harold Moody
James Clark Greg Peabody
Gilbert Collamore Gordon Scott
Cyrus Holmes Parker Simmonds
Edwin Mank  

Officers

Dennis Bowden President
Parker Simmonds Vice President
Denise Philbrook 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 $2,880,000
Reinsurance In-Force $2,158,000
Premium Notes $1,440,000

UNDERWRITING RULES AND PRACTICES

The Company issues fire and lightning policies for a four-year period under an assessment plan and requires a promissory note for each policy. The amount of the note is 5% of the insured amount. The Company charges a premium of $6.00 per thousand of the insured amount.

The amount of insurance that the Company may retain is limited by the Bylaws at $10,000 per risk. The Company participates in a facultative reinsurance program and cedes all risk over the retention level of $10,000. 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) $ 206,279
Stocks (Note 2) $ 20,941
Total Assets $ 227,220
   
Liabilities and Surplus  
   
Unearned Premium Reserve $ 4,208
Total Liabilities $ 4,208
   
Surplus as Regards to Policyholders $ 223,012
Total Liabilities and Surplus $ 227,220

STATEMENT OF INCOME

December 31, 2004

Income  
   
Net Assessment Income $ 7,909
Policy Fee Income 505
Interest & Dividend Income 4,467
Total Income $ 12,881
   
Expenses  
   
Policy Fees Retained by Agents $ 40
Salaries 280
General Office Maintenance 585
Taxes, Licenses and Fees 514
Bookkeeping Services 1,200
Legal Expenses 240
Miscellaneous 371
Total Expenses $ 3,230
   
Net Income $ 9,651

NOTES TO FINANCIAL STATEMENTS

Note 1 - Cash and Certificates of Deposit $ 206,279

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.

Note 2 – Stocks $ 20,941

Stock ownership and valuation was verified by obtaining confirmations from the depositories for these securities held under custodial agreements. Stocks are reported at market value.

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

MEDOMAK MUTUAL FIRE INSURANCE COMPANY

of Waldoboro, 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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