Question-and-Answer Session
Operator
Our first question comes from Bob Glasspiegel of Langen McAlenney
Robert Glasspiegel- Langen McAlenney
Do you have level three assets available?
Dwayne Hallman
We are in the process of finalizing our 10Q and right now, on a base of about $4 billion in total investments, about a million or so is level three.
Robert Glasspiegel- Langen McAlenney
A million out of $4 billion?
Dwayne Hallman
Correct.
Robert Glasspiegel- Langen McAlenney
That’s a good number. California and Florida are your two biggest states. There’s some sort of dynamics in pricing in both of them going on. Remind me if California has been put to bed? I know Allstate has just declared a loss on their battle with the state.
Douglas Reynolds
In California we have continued to work with them, and there are some changes in their rating laws that have to be finalized by the middle of this year. Although we are not fully implemented with that, we have reached all the agreements and it is just a matter of finalizing programs and final implementation of those changes.
Robert Glasspiegel- Langen McAlenney
Are there rate cuts as part of the ultimate resolution?
Douglas Reynolds
It was relatively minor, a percent or two and that was it.
Robert Glasspiegel- Langen McAlenney
So that won’t change your top-line trends materially? What about Florida and home owners?
Douglas Reynolds
I think on the Florida side we continue to work with them on a number of issues in trying to recoup the reinsurance cost is the biggest challenge there. We have had some success with that but we really are gearing that more towards the non-renewal program and just reducing the exposure, and giving our agents the right to write through partner companies, of which we now have three, and pretty much have representation around the state. Obviously still some challenges there, but we feel that we are moving along fine with the state.
Robert Glasspiegel- Langen McAlenney
So no discontinuous rate-cuts from Florida homeowners to come/
Doug Reynolds
No, not anything that different from what we did last year with the changes to the FHCF.
Robert Glasspiegel- Langen McAlenney
A cynic might be a little nervous seeing that you are showing year-over-year underlying ex-Cats, ex-reserve improvements. I think your response might be that last years first quarter actually developed favorably over the year. Do you have a developed first quarter 2007 combined ratio as opposed to actual?
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