As in effect
3/1/61
FORM 10K/A
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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AMENDMENT TO APPLICATION OR REPORT
Filed Pursuant to Sections 12, 13, or 15 (d) of
THE SECURITIES EXCHANGE ACT OF 1934
OLD REPUBLIC INTERNATIONAL CORPORATION
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(Exact name of registrant as specified in charter)
AMENDMENT NO. 5
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The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its ANNUAL REPORT FOR 2001
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on Form 10-K as set forth in the pages attached hereto: (List all such
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items, financial statements, exhibits or other portions amended)
FORM 11-K
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
OLD REPUBLIC INTERNATIONAL CORPORATION
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(Registrant)
Date: April 26, 2002 By: /s/ John S. Adams
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(Signature)
John S. Adams
Senior Vice President and
Chief Financial Officer
Total Pages: 15
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
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ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For The Fiscal Year Ended December 31, 2001
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REPUBLIC MORTGAGE INSURANCE COMPANY AND AFFILIATED COMPANIES
PROFIT SHARING PLAN
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OLD REPUBLIC INTERNATIONAL CORPORATION
307 NORTH MICHIGAN AVENUE
CHICAGO, ILLINOIS 60601
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administration Committee has duly caused this Annual Report to be signed on
behalf of the undersigned, thereunto duly authorized.
THE REPUBLIC MORTGAGE INSURANCE COMPANY AND
AFFILIATED COMPANIES PROFIT SHARING PLAN
(Registrant)
By: /s/ John Gerke
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John Gerke, Member of the Administration Committee
By: /s/ Donna Ball
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Donna Ball, Member of the Administration Committee
May 1, 2002
The Republic Mortgage Insurance Company
and Affiliated Companies
Profit Sharing Plan
Financial Statements and Supplemental Schedules
December 31, 2001
Tax Identification Number: 56-1031043
The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Financial Statements and Supplemental Schedules
December 31, 2001
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Pages
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits
at December 31, 2001 and 2000 2
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 2001 3
Notes to Financial Statements 4 - 7
Supplemental Schedule:
Schedule of Assets Held for Investment Purposes at End of Year 8
Report of Independent Accountants
To the Participants and Administrator of
The Republic Mortgage Insurance Company and
Affiliated Companies Profit Sharing Plan
We were engaged to audit the financial statements and supplemental schedule of
The Republic Mortgage Insurance Company and Affiliated Companies Profit Sharing
Plan (the "Plan") at December 31, 2001 and 2000 and for the year ended December
31, 2001, as listed in the accompanying index. These financial statements and
schedule are the responsibility of the Plan's management.
As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, the plan administrator instructed us not to perform, and
we did not perform, any auditing procedures with respect to the information
summarized in Note 3, which was certified by Massachusetts Mutual Life Insurance
Company, the trustee of the Plan, except for comparing such information with the
related information included in the financial statements and supplemental
schedules. We have been informed by the plan administrator that the trustee
holds the Plan's investment assets and executes investment transactions. The
plan administrator has obtained a certification from the trustee as of December
31, 2001 and 2000 and for the year ended December 31, 2001, that the information
provided to the plan administrator by the trustee is complete and accurate.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the accompanying financial
statements and schedule taken as a whole. The form and content of the
information included in the financial statements and schedule, other than that
derived from the information certified by the trustee, have been audited by us
in accordance with auditing standards generally accepted in the United States of
America and, in our opinion, are presented in compliance with the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974.
/s/ PricewaterhouseCoopers LLP
April 26, 2002
1
The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Statements of Net Assets Available for Benefits
December 31, 2001 and 2000
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2001 2000
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<s> <c> <c>
Assets
Investments, at fair value:
Insurance separate accounts:
Domestic equity $ 6,348,640 $ 5,791,800
Asset allocation 1,891,330 2,543,985
Fixed income 1,012,654 701,359
International equity 477,044 644,719
Flexible equity 191,905 137,799
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9,921,573 9,819,662
ORI common stock pooled account 4,722,627 3,571,017
Insurance company guaranteed interest fund,
at contract value 14,194,942 13,429,161
Participant loans 490,166 563,247
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Total investments 29,329,308 27,383,087
Employer contibutions receivable 3,330,842 2,735,720
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Total assets 32,660,150 30,118,807
Liabilities
Refund of participant contributions 132,589 59,303
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Net assets available for benefits $ 32,527,561 $ 30,059,504
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The accompanying notes are an integral part of these financial statements.
2
The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2001
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<s> <c>
Additions to net assets attributed to:
Investment income:
Net depreciation in fair value of investments $ (863,911)
Interest - guaranteed interest account 908,299
Interest - participant loans 42,392
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Investment income 86,780
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Contributions:
Employer 3,330,842
Participants 563,317
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3,894,159
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Total additions 3,980,939
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Deductions from net assets attributed to:
Benefits paid 1,508,579
Administrative expenses 4,303
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Total deductions 1,512,882
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Net increase 2,468,057
Net assets available for benefits:
Beginning of year 30,059,504
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End of year $ 32,527,561
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The accompanying notes are an integral part of these financial statements.
3
The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Notes to Financial Statements
December 31, 2001
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1. Description of Plan
The following description of The Republic Mortgage Insurance Company and
Affiliated Companies Profit Sharing Plan (the "Plan") is a defined
contribution plan covering all employees of Republic Mortgage Insurance
Company, RMIC Corporation, and Republic Mortgage Insurance Company of
North Carolina (the "Company"). Employees are eligible for coverage at
the start of their employment and must elect to enroll in the plan. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
See the Summary Plan Description for additional information regarding
the Plan.
Contributions
The Company makes contributions to the Plan at the discretion of the
Company's Board of Directors at a sum determined by the Board without
regard to current and accumulated profits for the taxable year, for
years ending with or within such Plan year. Participants may contribute
up to 10% of their compensation for any Plan year. Contributions are
subject to certain limitations as prescribed by ERISA. Refunds resulting
from qualification testing totaled $132,589 and $59,303 for the years
ended December 31, 2001 and 2000, respectively.
Vesting
Participant's account balances provided by Company contributions and
related allocated earnings become 40% vested after one year of service.
Vesting percentages increase by 10% for each additional year, with full
vesting after seven years of service.
Account balances provided by participant contributions and allocated
Plan earnings are always fully vested.
Participant Accounts
A separate account balance is maintained for each participant and is
credited with participant contributions and allocations of Company
contributions, Plan earnings, and forfeitures of terminated
participants' nonvested accounts. Allocations of Plan earnings are based
on participants' daily account balances. Company contributions and
forfeitures are allocated based on annual compensation of participants.
Unallocated forfeitures totalled $378,477 at December 31, 2001.
Payment of Benefits
In the event of retirement, disability, or death, accumulated benefits
become vested and are distributed to participants or designated
beneficiaries by lump-sum payment, or through various annuity options.
In the event of termination of employment, participants have the option
of receiving vested accumulated benefits through lump-sum distributions,
leaving the vested value of their accounts in the Plan until retirement,
or transferring amounts into an individual retirement account.
Participants may withdraw their voluntary contributions at anytime.
Participants may elect to take early withdrawals of employer
contributions if they have participated in the Plan for at least five
years. Such early withdrawals will not result in suspension of
allocations of Company contributions.
4
The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Notes to Financial Statements
December 31, 2001
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Participant Loans
Participants may borrow a minimum of $1,000 from their accounts up to a
maximum equal to the lesser of $50,000 or 50% of their account balance.
Participants may have no more than two loans outstanding at one time.
Loans plus interest must be repaid within five years through payroll
deductions. These loans bear interest at the prevailing prime rate at
the loan inception date. The loans are secured by the vested balance in
the participant's account.
2. Summary of Significant Accounting Policies
General
The Plan prepares its financial statements under accounting principles
generally accepted in the United States of America.
Investment Valuation and Income Recognition
The Plan's guaranteed interest account is valued at contract value.
Insurance separate accounts are reported by Massachusetts Mutual Life
Insurance Company (the "Trustee") at the fair value of the underlying
investments. The pooled account invests solely in the common stock of
Old Republic International ("ORI"), the ultimate parent of the company.
The common stock is reported at quoted market value. Participant loans
are valued at principal balance, which approximates fair value. Net
appreciation (depreciation) in fair value of investments includes
unrealized and realized gains and losses. Interest income is recorded on
the accrual basis.
Payment of Benefits
Benefits are recorded when paid. At December 31, 2001 and 2000, there
were no significant amounts owed to participants.
Income Taxes
The Plan obtained its latest determination letter on April 3, 1995, in
which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since receiving the
determination letter. However, the plan administrator believes that the
Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code.
Use of Estimates
The presentation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ from
those estimates.
Certification of Trustee
All amounts in Note 3 were obtained from data that has been prepared and
certified as complete and accurate by the Plan's Trustee.
5
The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Notes to Financial Statements
December 31, 2001
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3. Investments
The Plan is invested in a group annuity contract with the Trustee. The
contract allows for a participant-directed investment program in
commingled subaccounts sponsored by the Trustee. Investment options
include fixed income, asset allocation, domestic equity, flexible
equity, international equity subaccount option and a guaranteed interest
account. In addition to the investment options offered through the
Trustee, participants may also invest in a pooled account that invests
solely in common stock of the Company's parent, Old Republic
International.
2001 2000
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<s> <c> <c>
Investments at fair value:
Insurance separate accounts:
Domestic equity subaccounts:
Core equity $ - $ 2,143,575*
Small cap equity 2,005,208* 1,677,643*
Indexed equity 1,628,715* 1,616,761*
Large cap value 2,167,184* 269,465
Small cap growth 547,533 84,356
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6,348,640 5,791,800
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Asset allocation subaccounts:
Balanced - 1,486,532
Destiny moderate 1,400,325 411,764
Destiny aggressive 491,005 645,689
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1,891,330 2,543,985
Fixed income subaccounts:
Core bond 1,012,654 701,359
Flexible equity subaccounts:
Emerging growth 191,905 137,799
International equity subaccounts 477,044 644,719
ORI common stock pooled account 4,722,627* 3,571,017*
Participant loans 490,166 563,247
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$ 15,134,366 $ 13,953,926
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Investment at contract value:
Guranteed interest $ 14,194,942* $ 13,429,161*
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*Exceeds 5% of Plan assets at December 31, 2001 and 2000.
6
The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Notes to Financial Statements
December 31, 2001
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The net depreciation in fair value of the Plan's investments for the
year ended December 31, 2001, was $863,911.
4. Guaranteed Interest Account
In 2001, the Plan entered into an investment contract with Massachusetts
Mutual Life Insurance Company. Massachusetts Mutual Life Insurance
Company maintains the contributions in a pooled account. The account is
credited with earnings on the underlying investments and charges for
Plan withdrawals and administrative expenses charges by Massachusetts
Mutual Life Insurance Company. The contract is included in the financial
statements at contract value, (which represents contributions made under
the contract, plus earnings, less withdrawals and administrative
expenses) because it is considered fully benefit-responsive. For
example, participants may ordinarily direct the withdrawal or transfer
of all or a portion of their investment at contract value. There are no
reserves against contract value for credit risk of the contract issuer
or otherwise. The contract value of the investment contract at December
31, 2001 and 2000 was $14,194,942 and $13,429,161, respectively. The
average yield and crediting interest rates ranged from 6.75% to 7.15%
for 2001 and 2000. The crediting interest rate is based on an
agreed-upon formula with the issuer, but cannot be less than five
percent.
5. Related Party Transactions
Certain Plan investments are insurance separate accounts sponsored by
Massachusetts Mutual Life Insurance Company. Massachusetts Mutual Life
Insurance Company is the Trustee as defined by the Plan and, therefore,
these transactions qualify as party-in-interest transactions. Fees paid
by the Company on behalf of the Plan for the investment management
services amounted to $68,556 for the year ended December 31, 2001.
Expenses incurred in the administration of the Plan are also paid by the
Company.
6. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
In the event of Plan termination, participants would become 100% vested
in their employer contributions.
7. Reconciliation to Form 5500
There are no reconciling items from these financial statements to the
Plan's Form 5500 for the year ended December 31, 2001.
7
Supplemental Schedule
The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2001
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Number
of units Value
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<s> <c> <c>
Insurance separate accounts:
Domestic equity subaccounts:
Small cap equity 2,739 $ 2,005,208
Indexed equity 5,687 1,628,715
Large cap value 16,735 2,167,184
Small cap growth 4,430 547,533
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6,348,640
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Asset allocation subaccounts:
Destiny moderate 8,031 1,400,325
Destiny aggressive 2,882 491,005
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1,891,330
Fixed income subaccounts:
Core bond 887 1,012,654
Flexible equity subaccounts:
Emerging growth 2,084 191,905
International equity subaccounts 1,850 477,044
Guaranteed interest account 162,847 14,194,942
ORI common stock pooled account 224,148 4,722,627
Participant loans 490,166
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$ 29,329,308
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8