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					                                                                                *36056200620100100*
PROPERTY AND CASUALTY COMPANIES—ASSOCIATION EDITION


                                                               ANNUAL STATEMENT
                                                    FOR THE YEAR ENDED DECEMBER 31, 2006
                                                                OF THE CONDITION AND AFFAIRS OF THE
                                                                    NIC Insurance Company
NAIC Group Code           0510                            0510       NAIC Company Code           36056         Employer’s ID Number       13-3536448
                     (Current Period)                (Prior Period)
 Organized under the Laws of                                New York                 , State of Domicile or Port of Entry              New York
 Country of Domicile                                                                   United States
Incorporated/Organized                                 12/01/1988                  Commenced Business                          10/17/1989
Statutory Home Office                               One Penn Plaza - 55th Floor                          ,                      New York, NY 10119-0002
                                                         (Street and Number)                                                (City or Town, State and Zip Code)
Main Administrative Office                          6 International Drive                                    Rye Brook, NY 10573                    914-934-8999
                                                      (Street and Number)                              (City or Town, State and Zip Code)                  (Area Code) (Telephone Number)
Mail Address                        6 International Drive                                    ,                                 Rye Brook, NY 10573
                              (Street and Number or P.O. Box)                                                           (City or Town, State and Zip Code)
Primary Location of Books and Records              6 International Drive                                          Rye Brook, NY 10573                   914-933-6054
                                                                (Street and Number)                            (City or Town, State and Zip Code)              (Area Code) (Telephone Number)
Internet Website Address                                                                           www.navg.com
Statutory Statement Contact                                     Mary Elizabeth Lynn                                              914-933-6054
                                                                      (Name)                                      (Area Code) (Telephone Number) (Extension)
                         mlynn@navg.com                                                                                 914-933-6072
                          (E-mail Address)                                                                              (Fax Number)
Policyowner Relations Contact              6 International Drive                                      Rye Brook, NY 10573                   914-934-8999
                                                        (Street and Number)                        (City or Town, State and Zip Code)               (Area Code) (Telephone Number) (Extension)

                                                                                 OFFICERS
                Name                                        Title                                           Name                                                   Title
       Stanley Adam Galanski              ,           President & CEO                                Paul John Malvasio                         ,     Executive Vice President & CFO
          Elliot Scott Orol               ,   Senior Vice President & Secretary                   Salvatore Alfred Margarella                   ,       Vice President & Treasurer

                                                                          OTHER OFFICERS
      Richard Scott Eisdorfer             ,           Senior Vice President                           Jane Ellen Keller                     ,             Senior Vice President
        Bradley Dale Wiley                ,           Senior Vice President                       Callum McIntosh Duncan                    ,                Vice President
     Ramona Lucinda Eiseman               ,              Vice President                              Jeff Lyle Saunders                     ,                Vice President
    Christopher Mohr Steinbach            ,              Vice President                           Charles Derek Valentine                   ,                Vice President

                                                               DIRECTORS OR TRUSTEES
        Michael Louis Civisca                 Terence Norman Deeks (Chairman)                    Christopher Carmine Duca                              Richard Scott Eisdorfer
       Stanley Adam Galanski                             Noel Higgitt                            Christopher Alban Johnson                              Russell John Johnson
         John Wayne Jones                              Jane Ellen Keller                            Paul John Malvasio                                Salvatore Alfred Margarella
       Gregory Donald Olson                     Richard Charles Fitzgerald Rea                       Jeff Lyle Saunders                                   Bradley Dale Wiley
      State of                    New York

    County of                     New York                           ss


The officers of this reporting entity, being duly sworn, each depose and say that they are the described officers of said reporting entity, and that on the reporting period stated
above, all of the herein described assets were the absolute property of the said reporting entity, free and clear from any liens or claims thereon, except as herein stated, and
that this statement, together with related exhibits, schedules and explanations therein contained, annexed or referred to is a full and true statement of all the assets and
liabilities and of the condition and affairs of the said reporting entity as of the reporting period stated above, and of its income and deductions therefrom for the period ended,
and have been completed in accordance with the NAIC Annual Statement Instructions and Accounting Practices and Procedures Manual except to the extent that: (1) state
law may differ; or, (2) that state rules or regulations require differences in reporting not related to accounting practices and procedures, according to the best of their
information, knowledge and belief, respectively. Furthermore, the scope of this attestation by the described officers also includes the related corresponding electronic filing with
the NAIC, when required, that is an exact copy (except for formatting differences due to electronic filing) of the enclosed statement. The electronic filing may be requested by
various regulators in lieu of or in addition to the enclosed statement.


                 Stanley Adam Galanski                                          Elliot Scott Orol                                               Salvatore Alfred Margarella
                    President & CEO                                    Senior Vice President & Secretary                                        Vice President & Treasurer
                                                                                                                  a. Is this an original filing?                      Yes [ X ] No [   ]
 Subscribed and sworn to before me this                                                                           b. If no,
                     day of         February, 2007                                                                1. State the amendment number
                                                                                                                  2. Date filed
                                                                                                                  3. Number of pages attached
 Agustin R. Cruz, Notary Public, State of New York
 April 30, 2007
 No. 01CR4842898
 Qualified in Queens County
                               ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company



                                                                                 ASSETS
                                                                                                                Current Year                             Prior Year
                                                                                             1                       2                    3                   4

                                                                                                                                  Net Admitted Assets   Net Admitted
                                                                                           Assets            Nonadmitted Assets       (Cols. 1 - 2)       Assets
   1. Bonds (Schedule D)                                                                    105,789,943                                  105,789,943         88,940,625
   2. Stocks (Schedule D):
        2.1 Preferred stocks
        2.2 Common stocks
   3. Mortgage loans on real estate (Schedule B):
        3.1 First liens
        3.2 Other than first liens
   4. Real estate (Schedule A):
        4.1 Properties occupied by the company (less
        $                            encumbrances)
        4.2 Properties held for the production of income
        (less $                              encumbrances)
        4.3 Properties held for sale (less
        $                            encumbrances)
   5. Cash ($                  1,157,072 , Schedule E, Part 1), cash equivalents
                ($                        , Schedule E, Part 2) and short-term
        investments ($                            , Schedule DA)                              1,157,072                                    1,157,072         15,802,640
   6. Contract loans, (including $                              premium notes)
   7. Other invested assets (Schedule BA)
   8. Receivables for securities                                                                    13,155                                    13,155
   9. Aggregate write-ins for invested assets
  10. Subtotals, cash and invested assets (Lines 1 to 9)                                    106,960,170                                  106,960,170        104,743,265
  11. Title plants less $                            charged off (for Title insurers
        only)
  12. Investment income due and accrued                                                          877,285                                      877,285           759,794
  13. Premiums and considerations:
        13.1 Uncollected premiums and agents’ balances in the course of
        collection                                                                           26,505,457                                   26,505,457         18,948,725
        13.2 Deferred premiums, agents’ balances and installments booked but
        deferred and not yet due (including $                             earned
        but unbilled premium)
        13.3 Accrued retrospective premium
  14. Reinsurance:
        14.1 Amounts recoverable from reinsurers
        14.2 Funds held by or deposited with reinsured companies
        14.3 Other amounts receivable under reinsurance contracts
  15. Amounts receivable relating to uninsured plans
  16.1 Current federal and foreign income tax recoverable and interest thereon
  16.2 Net deferred tax asset
  17. Guaranty funds receivable or on deposit
  18. Electronic data processing equipment and software
  19. Furniture and equipment, including health care delivery assets
        ($                           )
  20. Net adjustment in assets and liabilities due to foreign exchange rates
  21. Receivables from parent, subsidiaries and affiliates
  22. Health care ($                              ) and other amounts receivable
  23. Aggregate write-ins for other than invested assets
  24. Total assets excluding Separate Accounts, Segregated Accounts and
        Protected Cell Accounts (Lines 10 to 23)                                            134,342,913                                  134,342,913        124,451,784
  25. From Separate Accounts, Segregated Accounts and Protected
        Cell Accounts
  26. Total (Lines 24 and 25)                                                               134,342,913                                  134,342,913        124,451,784
        DETAILS OF WRITE-INS
0901.
0902.
0903.
0998. Summary of remaining write-ins for Line 9 from overflow page
0999. Totals (Lines 0901 thru 0903 plus 0998)(Line 9 above)
2301.
2302.
2303.
2398. Summary of remaining write-ins for Line 23 from overflow page
2399. Totals (Lines 2301 thru 2303 plus 2398)(Line 23 above)




                                                                                       2
                              ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                    LIABILITIES, SURPLUS AND OTHER FUNDS
                                                                                                                                   1                 2
                                                                                                                              Current Year      Prior Year
   1. Losses (Part 2A, Line 34, Column 8)
   2. Reinsurance payable on paid losses and loss adjustment expenses (Schedule F, Part 1, Column 6)
   3. Loss adjustment expenses (Part 2A, Line 34, Column 9)
   4. Commissions payable, contingent commissions and other similar charges
   5. Other expenses (excluding taxes, licenses and fees)                                                                              51,000           43,000
   6. Taxes, licenses and fees (excluding federal and foreign income taxes)
   7.1Current federal and foreign income taxes (including $                     313,115 on realized capital gains (losses))           894,615        1,008,721
   7.2 Net deferred tax liability
   8. Borrowed money $                                    and interest thereon $
   9. Unearned premiums (Part 1A, Line 37, Column 5)
      (after deducting unearned premiums for ceded reinsurance of $                    113,341,286 and including warranty
      reserves of $                        )
  10. Advance premium
  11. Dividends declared and unpaid:
        11.1 Stockholders
        11.2 Policyholders
  12. Ceded reinsurance premiums payable (net of ceding commissions)                                                               26,505,457       18,948,725
  13. Funds held by company under reinsurance treaties (Schedule F, Part 3, Column 19)
  14. Amounts withheld or retained by company for account of others
  15. Remittances and items not allocated
  16. Provision for reinsurance (Schedule F, Part 7)
  17. Net adjustments in assets and liabilities due to foreign exchange rates
  18. Drafts outstanding
  19. Payable to parent, subsidiaries and affiliates                                                                                  118,899            1,918
  20. Payable for securities                                                                                                                           966,000
  21. Liability for amounts held under uninsured plans
  22. Capital notes $                                and interest thereon $
  23. Aggregate write-ins for liabilities
  24. Total liabilities excluding protected cell liabilities (Lines 1 through 23)                                                  27,569,971       20,968,364
  25. Protected cell liabilities
  26. Total liabilities (Lines 24 and 25)                                                                                          27,569,971       20,968,364
  27. Aggregate write-ins for special surplus funds
  28. Common capital stock                                                                                                          5,000,000        5,000,000
  29. Preferred capital stock
  30. Aggregate write-ins for other than special surplus funds
  31. Surplus notes
  32. Gross paid in and contributed surplus                                                                                        86,000,000       86,000,000
  33. Unassigned funds (surplus)                                                                                                   15,772,942       12,483,420
  34. Less treasury stock, at cost:
        34.1                                shares common (value included in Line 28 $                           )
        34.2                                shares preferred (value included in Line 29 $                        )
  35. Surplus as regards policyholders (Lines 27 to 33, less 34) (Page 4, Line 39)                                                106,772,942      103,483,420
  36. Totals (Page 2, Line 26, Col. 3)                                                                                            134,342,913      124,451,784
        DETAILS OF WRITE-INS
2301.
2302.
2303.
2398. Summary of remaining write-ins for Line 23 from overflow page
2399. Totals (Lines 2301 through 2303 plus 2398) (Line 23 above)
2701.
2702.
2703.
2798. Summary of remaining write-ins for Line 27 from overflow page
2799. Totals (Lines 2701 through 2703 plus 2798) (Line 27 above)
3001.
3002.
3003.
3098. Summary of remaining write-ins for Line 30 from overflow page
3099. Totals (Lines 3001 through 3003 plus 3098) (Line 30 above)




                                                                                            3
                             ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                             STATEMENT OF INCOME
                                                                                                                                         1                  2
                                                                                                                                    Current Year       Prior Year
      UNDERWRITING INCOME
   1. Premiums earned (Part 1, Line 34, Column 4)

         DEDUCTIONS:

   2.   Losses incurred (Part 2, Line 34, Column 7)
   3.   Loss expenses incurred (Part 3, Line 25, Column 1)
   4.   Other underwriting expenses incurred (Part 3, Line 25, Column 2)
   5.   Aggregate write-ins for underwriting deductions
   6.    Total underwriting deductions (Lines 2 through 5)
   7.   Net income of protected cells
   8.   Net underwriting gain (loss) (Line 1 minus Line 6 plus Line 7)

        INVESTMENT INCOME

   9. Net investment income earned (Exhibit of Net Investment Income, Line 17)                                                            5,125,582         2,705,995
  10. Net realized capital gains (losses) less capital gains tax of $          (15,671) (Exhibit of Capital Gains (Losses))                 (29,103)           58,872
  11. Net investment gain (loss) (Lines 9 + 10)                                                                                           5,096,478         2,764,867

        OTHER INCOME

  12. Net gain (loss) from agents' or premium balances charged off (amount recovered $                                amount
       charged off $                          )
  13. Finance and service charges not included in premiums
  14. Aggregate write-ins for miscellaneous income
  15. Total other income (Lines 12 through 14)
  16. Net income before dividends to policyholders, after capital gains tax and before all other federal and foreign income taxes
        (Lines 8 + 11 + 15)                                                                                                               5,096,478         2,764,867
  17. Dividends to policyholders
  18. Net income, after dividends to policyholders, after capital gains tax and before all other federal and foreign income taxes
        (Line 16 minus Line 17)                                                                                                           5,096,478         2,764,867
  19. Federal and foreign income taxes incurred                                                                                           1,785,286           977,021
  20. Net income (Line 18 minus Line 19) (to Line 22)                                                                                     3,311,192         1,787,846

        CAPITAL AND SURPLUS ACCOUNT

  21.   Surplus as regards policyholders, December 31 prior year (Page 4, Line 39, Column 2)                                            103,483,420        51,591,887
  22.   Net income (from Line 20)                                                                                                         3,311,192         1,787,846
  23.   Net transfers (to) from Protected Cell accounts
  24.   Change in net unrealized capital gains or (losses) less capital gains tax of $                                                      (21,671)          103,686
  25.   Change in net unrealized foreign exchange capital gain (loss)
  26.   Change in net deferred income tax
  27.   Change in nonadmitted assets (Exhibit of Nonadmitted Assets, Line 26, Col. 3)
  28.   Change in provision for reinsurance (Page 3, Line 16, Column 2 minus Column 1)
  29.   Change in surplus notes
  30.   Surplus (contributed to) withdrawn from protected cells
  31.   Cumulative effect of changes in accounting principles
  32.   Capital changes:
        32.1. Paid in
        32.2. Transferred from surplus (Stock Dividend)
        32.3. Transferred to surplus
  33.   Surplus adjustments:
        33.1. Paid in                                                                                                                                      50,000,000
        33.2. Transferred to capital (Stock Dividend)
        33.3. Transferred from capital
  34.   Net remittances from or (to) Home Office
  35.   Dividends to stockholders
  36.   Change in treasury stock (Page 3, Lines 34.1 and 34.2, Column 2 minus Column 1)
  37.   Aggregate write-ins for gains and losses in surplus
  38. Change in surplus as regards policyholders for the year (Lines 22 through 37)                                                       3,289,522        51,891,533
  39. Surplus as regards policyholders, December 31 current year (Line 21 plus Line 38) (Page 3, Line 35)                               106,772,942       103,483,420
        DETAILS OF WRITE-INS
0501.
0502.
0503.
0598.   Summary of remaining write-ins for Line 5 from overflow page
0599.   Totals (Lines 0501 through 0503 plus 0598) (Line 5 above)
1401.
1402.
1403.
1498.   Summary of remaining write-ins for Line 14 from overflow page
1499.   Totals (Lines 1401 through 1403 plus 1498) (Line 14 above)
3701.
3702.
3703.
3798.   Summary of remaining write-ins for Line 37 from overflow page
3799.   Totals (Lines 3701 through 3703 plus 3798) (Line 37 above)




                                                                                        4
                           ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                                                                       CASH FLOW
                                                                                                                              1                  2
                                                                                                                         Current Year       Prior Year
                                                         Cash from Operations
 1.   Premiums collected net of reinsurance
 2.   Net investment income                                                                                                    5,231,622         2,663,423
 3.   Miscellaneous income
 4.   Total (Lines 1 through 3)                                                                                                5,231,622         2,663,423
 5.   Benefit and loss related payments
 6.   Net transfers to Separate, Segregated Accounts and Protected Cell Accounts
 7.   Commissions, expenses paid and aggregate write-ins for deductions
 8.   Dividends paid to policyholders
 9.   Federal and foreign income taxes paid (recovered) $               1,899,392 net of tax on capital gains (losses)         1,883,721         1,128,257
10.   Total (Lines 5 through 9)                                                                                                1,883,721         1,128,257
11.   Net cash from operations (Line 4 minus Line 10)                                                                          3,347,901         1,535,166
                                                        Cash from Investments
12.   Proceeds from investments sold, matured or repaid:
      12.1 Bonds                                                                                                              12,161,541        11,538,286
      12.2 Stocks
      12.3 Mortgage loans
      12.4 Real estate
      12.5 Other invested assets
      12.6 Net gains or (losses) on cash, cash equivalents and short-term investments                                             76,728           364,546
      12.7 Miscellaneous proceeds                                                                                                                  735,271
      12.8 Total investment proceeds (Lines 12.1 to 12.7)                                                                     12,238,269        12,638,103
13.   Cost of investments acquired (long-term only):
      13.1 Bonds                                                                                                              29,292,165        56,650,310
      13.2 Stocks
      13.3 Mortgage loans
      13.4 Real estate
      13.5 Other invested assets
      13.6 Miscellaneous applications                                                                                          1,056,553           365,329
      13.7 Total investments acquired (Lines 13.1 to 13.6)                                                                    30,348,718        57,015,639
14.   Net increase (decrease) in contract loans and premium notes
15.   Net cash from investments (Line 12.8 minus Line 13.7 minus Line 14)                                                    (18,110,449)      (44,377,536)
                                          Cash from Financing and Miscellaneous Sources
16.   Cash provided (applied):
      16.1 Surplus notes, capital notes
      16.2 Capital and paid in surplus, less treasury stock                                                                                     50,000,000
      16.3 Borrowed funds
      16.4 Net deposits on deposit-type contracts and other insurance liabilities
      16.5 Dividends to stockholders
      16.6 Other cash provided (applied)                                                                                         116,981             5,852
17.   Net cash from financing and miscellaneous sources (Line 16.1 to Line 16.4 minus Line 16.5 plus Line 16.6)                  116,981        50,005,852
                     RECONCILIATION OF CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
18.   Net change in cash, cash equivalents and short-term investments (Line 11, plus Lines 15 and Line 17)                   (14,645,568)        7,163,482
19.   Cash, cash equivalents and short-term investments:
      19.1 Beginning of year                                                                                                  15,802,640         8,639,158
      19.2 End of year (Line 18 plus Line 19.1)                                                                                1,157,072        15,802,640




                                                                                      5
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




                            Part 1

                        NONE
                           Part 1A

                        NONE




                              6, 7
                               ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                   UNDERWRITING AND INVESTMENT EXHIBIT
                                                              PART 1B - PREMIUMS WRITTEN
                                                1                        Reinsurance Assumed                           Reinsurance Ceded                    6
                                              Direct                    2                   3                        4                    5          Net Premiums
                                             Business               From                  From                     To                    To           Written Cols.
           Line of Business                    (a)                 Affiliates          Non-Affiliates           Affiliates          Non-Affiliates   1+2+3-4-5
   1.      Fire
   2.      Allied lines
   3.      Farmowners multiple peril
   4.      Homeowners multiple peril
   5.      Commercial multiple peril             12,372,347                                                        12,372,347
   6.      Mortgage guaranty
   8.      Ocean marine                             105,117                                                           105,117
   9.      Inland marine
 10.       Financial guaranty
 11.1      Medical malpractice -
            occurrence
 11.2      Medical malpractice -
            claims-made
 12.       Earthquake
 13.       Group accident and health
 14.       Credit accident and health
             (group and individual)
 15.       Other accident and health
 16.       Workers' compensation
 17.1      Other liability - occurrence        199,251,022                                                        199,251,022
 17.2      Other liability - claims-made
                                                 19,989,938                                                        19,989,938
 18.1      Products liability -
             occurrence
 18.2      Products liability -
             claims-made
 19.1,19.2 Private passenger auto
             liability
 19.3,19.4 Commercial auto liability
 21.       Auto physical damage
 22.       Aircraft (all perils)
 23.       Fidelity
 24.       Surety
 26.       Burglary and theft
 27.       Boiler and machinery
 28.       Credit
 29.       International
 30.       Reinsurance -
             Nonproportional Assumed
             Property                           XXX
 31.       Reinsurance -
             Nonproportional Assumed
             Liability                          XXX
 32.       Reinsurance -
             Nonproportional Assumed
             Financial Lines                    XXX
 33.       Aggregate write-ins for
             other
             lines of business
 34.         TOTALS                            231,718,424                                                        231,718,424
           DETAILS OF WRITE-INS
3301.
3302.
3303.
3398.      Summary of remaining
             write-
             ins for Line 33 from
             overflow page
3399.      Totals (Lines 3301 through
             3303 plus 3398) (Line 33
             above)
(a) Does the company’s direct premiums written include premiums recorded on an installment basis?       Yes [   ] No [ X ]
   If yes: 1. The amount of such installment premiums $
         2. Amount at which such installment premiums would have been reported had they been reported on an annualized basis $




                                                                                     8
                                                                               ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                 UNDERWRITING AND INVESTMENT EXHIBIT
                                                                                              PART 2 - LOSSES PAID AND INCURRED
                                                                                                                    Losses Paid Less Salvage                                       5                6               7                      8
                                                                                                  1                  2                    3                    4                                                                 Percentage of Losses
                                                                                                                                                                               Net Losses                                              Incurred
                                                                                                                                                                                Unpaid          Net Losses   Losses Incurred        (Col. 7, Part 2)
                                                                                                                Reinsurance         Reinsurance          Net Payments         Current Year       Unpaid       Current Year       to Premiums Earned
                                                    Line of Business                        Direct Business      Assumed             Recovered          (Cols. 1 + 2 - 3)   (Part 2A, Col. 8)   Prior Year   (Cols. 4 + 5 - 6)      (Col. 4, Part 1)
      1.       Fire
      2.       Allied lines
      3.       Farmowners multiple peril
      4.       Homeowners multiple peril
      5.       Commercial multiple peril                                                               63,127                                  63,127
      6.       Mortgage guaranty
      8.       Ocean marine
      9.       Inland marine
     10.       Financial guaranty
     11.1      Medical malpractice - occurrence
     11.2      Medical malpractice - claims-made
     12.       Earthquake
     13.       Group accident and health
     14.       Credit accident and health (group and individual)
     15.       Other accident and health
     16.       Workers' compensation
     17.1      Other liability - occurrence                                                       13,291,680                             13,291,680
     17.2      Other liability - claims-made                                                       4,974,567                              4,974,567
     18.1      Products liability - occurrence
     18.2      Products liability - claims-made
9




     19.1,19.2 Private passenger auto liability
     19.3,19.4 Commercial auto liability
     21.       Auto physical damage
     22.       Aircraft (all perils)
     23.       Fidelity
     24.       Surety
     26.       Burglary and theft
     27.       Boiler and machinery
     28.       Credit
     29.       International
     30.       Reinsurance - Nonproportional Assumed Property                                    XXX
     31.       Reinsurance - Nonproportional Assumed Liability                                   XXX
     32.       Reinsurance - Nonproportional Assumed Financial Lines                             XXX
     33.       Aggregate write-ins for other lines of business
     34.       TOTALS                                                                             18,329,374                             18,329,374
               DETAILS OF WRITE-INS
    3301.
    3302.
    3303.
    3398.      Summary of remaining write-ins for Line 33 from overflow page
    3399.      Totals (Lines 3301 through 3303 + 3398) (Line 33 above)
                                                                                                 ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                   UNDERWRITING AND INVESTMENT EXHIBIT
                                                                                                     PART 2A - UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES
                                                                                                                             Reported Losses                                                  Incurred But Not Reported                               8                  9
                                                                                                       1                 2                    3                    4              5                       6                    7
                                                                                                                                     Deduct Reinsurance
                                                                                                                                      Recoverable from      Net Losses Excl.
                                                                                                                                       Authorized and         Incurred But                                                                       Net Losses          Unpaid Loss
                                                                                                                    Reinsurance         Unauthorized         Not Reported                           Reinsurance           Reinsurance              Unpaid            Adjustment
                                            Line of Business                                         Direct          Assumed             Companies          (Cols. 1 + 2 - 3)   Direct               Assumed                Ceded            (Cols. 4 + 5 + 6 - 7)    Expenses
         1.       Fire
         2.       Allied lines
         3.       Farmowners multiple peril
         4.       Homeowners multiple peril
         5.       Commercial multiple peril                                                             1,451,707                              1,451,707                           5,680,720                                   5,680,720
         6.       Mortgage guaranty
         8.       Ocean marine                                                                                                                                                           23,404                                    23,404
         9.       Inland marine
       10.        Financial guaranty
       11.1       Medical malpractice - occurrence
       11.2       Medical malpractice - claims-made
       12.        Earthquake
       13.        Group accident and health                                                                                                                                                                                                 (a)
       14.        Credit accident and health (group and individual)
       15.        Other accident and health                                                                                                                                                                                                 (a)
       16.        Workers' compensation
       17.1       Other liability - occurrence                                                         25,932,074                              25,932,074                        200,083,122                                 200,083,122
       17.2       Other liability - claims-made                                                         2,648,861                               2,648,861                         28,121,267                                  28,121,267
       18.1       Products liability - occurrence
       18.2       Products liability - claims-made
10




       19.1,19.2 Private passenger auto liability
       19.3,19.4 Commercial auto liability
       21.        Auto physical damage
       22.        Aircraft (all perils)
       23.        Fidelity
       24.        Surety
       26.        Burglary and theft
       27.        Boiler and machinery
       28.        Credit
       29.        International
       30.        Reinsurance - Nonproportional Assumed Property                                     XXX                                                                        XXX
       31.        Reinsurance - Nonproportional Assumed Liability                                    XXX                                                                        XXX
       32.        Reinsurance - Nonproportional Assumed Financial Lines                              XXX                                                                        XXX
       33.        Aggregate write-ins for other lines of business
       34.          TOTALS                                                                             30,032,641                              30,032,641                        233,908,513                                 233,908,513
                  DETAILS OF WRITE-INS
      3301.
      3302.
      3303.
      3398.       Summary of remaining write-ins for Line 33 from overflow page
      3399.       Totals (Lines 3301 through 3303 + 3398) (Line 33 above)
     (a) Including $                               for present value of life indemnity claims.
                              ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                   UNDERWRITING AND INVESTMENT EXHIBIT
                                                                            PART 3 - EXPENSES
                                                                                             1                    2                   3                4
                                                                                      Loss Adjustment     Other Underwriting     Investment
                                                                                         Expenses             Expenses            Expenses            Total
    1. Claim adjustment services:
         1.1 Direct                                                                         11,874,704                                                 11,874,704
         1.2 Reinsurance assumed
         1.3 Reinsurance ceded                                                              11,874,704                                                 11,874,704
         1.4 Net claim adjustment services (1.1 + 1.2 - 1.3)
    2. Commission and brokerage:
         2.1 Direct, excluding contingent                                                                           38,427,552                         38,427,552
         2.2 Reinsurance assumed, excluding contingent
         2.3 Reinsurance ceded, excluding contingent                                                                38,427,552                         38,427,552
         2.4 Contingent-direct
         2.5 Contingent-reinsurance assumed
         2.6 Contingent-reinsurance ceded
         2.7 Policy and membership fees
         2.8 Net commission and brokerage (2.1 + 2.2 - 2.3 + 2.4 + 2.5 - 2.6 + 2.7)
    3. Allowances to manager and agents
    4. Advertising
    5. Boards, bureaus and associations
    6. Surveys and underwriting reports
    7. Audit of assureds' records
    8. Salary and related items:
         8.1 Salaries
         8.2 Payroll taxes
    9. Employee relations and welfare
   10. Insurance
   11. Directors' fees
   12. Travel and travel items
   13. Rent and rent items
   14. Equipment
   15. Cost or depreciation of EDP equipment and software
   16. Printing and stationery
   17. Postage, telephone and telegraph, exchange and express
   18. Legal and auditing                                                                                                               191,499               191,499
   19. Totals (Lines 3 to 18)                                                                                                           191,499               191,499
   20. Taxes, licenses and fees:
         20.1 State and local insurance taxes deducting guaranty association
           credits of $
         20.2 Insurance department licenses and fees
         20.3 Gross guaranty association assessments
         20.4 All other (excluding federal and foreign income and real estate)
         20.5 Total taxes, licenses and fees (20.1 + 20.2 + 20.3 + 20.4)
   21. Real estate expenses
   22. Real estate taxes
   23. Reimbursements by uninsured plans
   24. Aggregate write-ins for miscellaneous expenses
   25.          Total expenses incurred                                                                                                 191,499 (a)           191,499
   26. Less unpaid expenses - current year                                                                                               51,000               51,000
   27. Add unpaid expenses - prior year                                                                                                  43,000               43,000
   28. Amounts receivable relating to uninsured plans, prior year
   29. Amounts receivable relating to uninsured plans, current year
   30. TOTAL EXPENSES PAID (Lines 25 - 26 + 27 - 28 + 29)                                                                               183,499               183,499
         DETAILS OF WRITE-INS
2401.
2402.
2403.
2498. Summary of remaining write-ins for Line 24 from overflow page
2499. Totals (Lines 2401 through 2403 plus 2498) (Line 24 above)
(a) Includes management fees of $                              to affiliates and $                 to non-affiliates.




                                                                                      11
                           ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                                      EXHIBIT OF NET INVESTMENT INCOME
                                                                                                                                    1                           2
                                                                                                                                Collected                    Earned
                                                                                                                               During Year                 During Year
 1.     U.S. Government bonds                                                                                         (a)                763,089                      765,395
 1.1    Bonds exempt from U.S. tax                                                                                    (a)                  7,840                        3,640
 1.2    Other bonds (unaffiliated)                                                                                    (a)              4,114,742                    4,234,128
 1.3    Bonds of affiliates                                                                                           (a)
 2.1    Preferred stocks (unaffiliated)                                                                               (b)
 2.11   Preferred stocks of affiliates                                                                                (b)
 2.2    Common stocks (unaffiliated)
 2.21   Common stocks of affiliates
 3.     Mortgage loans                                                                                                (c)
 4.     Real estate                                                                                                   (d)
 5.     Contract loans
 6.     Cash, cash equivalents and short-term investments                                                             (e)                313,913                      313,913
 7.     Derivative instruments                                                                                         (f)
 8.     Other invested assets
 9.     Aggregate write-ins for investment income
10.     Total gross investment income                                                                                                  5,199,584                    5,317,076
11.     Investment expenses                                                                                                                         (g)               191,492
12.     Investment taxes, licenses and fees, excluding federal income taxes                                                                         (g)
13.     Interest expense                                                                                                                            (h)
14.     Depreciation on real estate and other invested assets                                                                                        (i)
15.     Aggregate write-ins for deductions from investment income
16.     Total (Lines 11 through 15)                                                                                                                                   191,492
17.     Net Investment Income - (Line 10 minus Line 16)                                                                                                             5,125,584
        DETAILS OF WRITE-INS
0901.
0902.
0903.
0998.   Summary of remaining write-ins for Line 9 from overflow page
0999.   Totals (Lines 0901 through 0903 plus 0998) (Line 9, above)
1501.
1502.
1503.
1598.   Summary of remaining write-ins for Line 15 from overflow page
1599.   Total (Lines 1501 through 1503 plus 1598) (Line 15, above)

(a) Includes $       137,617 accrual of discount less $         353,148 amortization of premium and less $               69,164 paid for accrued interest on purchases.
(b) Includes $                accrual of discount less $                  amortization of premium and less $                     paid for accrued dividends on purchases.
(c) Includes $                accrual of discount less $                  amortization of premium and less $                     paid for accrued interest on purchases.
(d) Includes $                for company’s occupancy of its own buildings; and excludes $                    interest on encumbrances.
(e) Includes $       262,886 accrual of discount less $                   amortization of premium and less $                     paid for accrued interest on purchases.
(f) Includes $                accrual of discount less $                  amortization of premium.
(g) Includes $       191,492 investment expenses and $                       investment taxes, licenses and fees, excluding federal income taxes, attributable to
    segregated and Separate Accounts.
(h) Includes $                interest on surplus notes and $                    interest on capital notes.
(i) Includes $                depreciation on real estate and $                  depreciation on other invested assets.


                                      EXHIBIT OF CAPITAL GAINS (LOSSES)
                                                                                   1                      2                           3                         4
                                                                               Realized                                      Unrealized Increases
                                                                              Gain (Loss)               Other                    (Decreases)
                                                                              On Sales or             Realized                        by
                                                                               Maturity              Adjustments                  Adjustment                  Total
 1.     U.S. Government bonds                                                           (2,163)                                                                          (2,163)
 1.1    Bonds exempt from U.S. tax
 1.2    Other bonds (unaffiliated)                                                     (41,941)                                                                       (41,941)
 1.3    Bonds of affiliates
 2.1    Preferred stocks (unaffiliated)
 2.11   Preferred stocks of affiliates
 2.2    Common stocks (unaffiliated)
 2.21   Common stocks of affiliates
 3.     Mortgage loans
 4.     Real estate
 5.     Contract loans
 6.     Cash, cash equivalents and short-term investments                                   (670)                                                                         (670)
 7.     Derivative instruments
 8.     Other invested assets
 9.     Aggregate write-ins for capital gains (losses)
10.     Total capital gains (losses)                                                   (44,774)                                                                       (44,774)
        DETAILS OF WRITE-INS
0901.
0902.
0903.
0998.   Summary of remaining write-ins for Line 9 from overflow page
0999.   Totals (Lines 0901 through 0903 plus 0998) (Line 9, above)




                                                                                     12
                               ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company



                                               EXHIBIT OF NONADMITTED ASSETS
                                                                                                1                     2                      3
                                                                                                                                    Change in Total
                                                                                         Current Year Total       Prior Year       Nonadmitted Assets
                                                                                        Nonadmitted Assets    Nonadmitted Assets     (Col. 2 - Col. 1)
   1. Bonds (Schedule D)
   2. Stocks (Schedule D):
        2.1 Preferred stocks
        2.2 Common stocks
   3. Mortgage loans on real estate (Schedule B):
        3.1 First liens
        3.2 Other than first liens
   4. Real estate (Schedule A):
        4.1 Properties occupied by the company
        4.2 Properties held for the production of income
        4.3 Properties held for sale
   5. Cash, (Schedule-E, Part 1), cash equivalents (Schedule-E, Part 2) and
        short-term investments (Schedule DA)
   6. Contract loans
   7. Other invested assets (Schedule BA)
   8. Receivables for securities
   9. Aggregate write-ins for invested assets
  10. Subtotals, cash and invested assets (Lines 1 to 9)
  11. Title plants (for Title insurers only)
  12. Investment income due and accrued
  13. Premiums and considerations:




                                                                NONE
        13.1 Uncollected premiums and agents’ balances in the course of
        collection
        13.2 Deferred premiums, agents’ balances and installments booked but deferred
        and not yet due
        13.3 Accrued retrospective premium
  14. Reinsurance:
        14.1 Amounts recoverable from reinsurers
        14.2 Funds held by or deposited with reinsured companies
        14.3 Other amounts receivable under reinsurance contracts
  15. Amounts receivable relating to uninsured plans
  16.1 Current federal and foreign income tax recoverable and interest thereon
  16.2 Net deferred tax asset
  17. Guaranty funds receivable or on deposit
  18. Electronic data processing equipment and software
  19. Furniture and equipment, including health care delivery assets
  20. Net adjustment in assets and liabilities due to foreign exchange rates
  21. Receivables from parent, subsidiaries and affiliates
  22. Health care and other amounts receivable
  23. Aggregate write-ins for other than invested assets
  24. Total assets excluding Separate Accounts, Segregated Accounts and
        Protected Cell Accounts (Lines 10 to 23)
  25. From Separate Accounts, Segregated Accounts and Protected Cell Accounts
  26. Total (Lines 24 and 25)
        DETAILS OF WRITE-INS
0901.
0902.
0903.
0998. Summary of remaining write-ins for Line 9 from overflow page
0999. Totals (Lines 0901 through 0903 plus 0998)(Line 9 above)
2301.
2302.
2303.
2398. Summary of remaining write-ins for Line 23 from overflow page
2399. Totals (Lines 2301 through 2303 plus 2398)(Line 23 above)




                                                                                   13
                 ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                          NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies

   A. Accounting Practices

       The financial statements of NIC Insurance Company are presented on the basis of accounting practices
       prescribed or permitted by the New York Insurance Department.

       The New York Insurance Department recognizes only statutory accounting practices prescribed or permitted by
       the state of New York for determining and reporting the financial condition and results of operations of an
       insurance company for determining its solvency under the New York Insurance Law. The National Association
       of Insurance Commissioners’ (the “NAIC”) Accounting Practices and Procedures Manual (NAIC SAP) has
       been adopted as a component of prescribed or permitted practices by the State of New York.

   B. Use of Estimates in the Preparation of the Financial Statements

       The preparation of financial statements in conformity with Statutory Accounting Principles requires
       management to make estimates and assumptions that affect the reported amounts of assets and liabilities. It also
       requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported
       amounts of revenue and expenses during the period. Actual results could differ from those estimates.

    C. Accounting Policies

       Premiums are earned over the terms of the related insurance policies and reinsurance contracts. Unearned
       premium reserves are established to cover the unexpired portion of premiums written. Such reserves are
       computed by pro rata methods for direct business and are based on reports received from ceding companies for
       reinsurance.

       Expenses incurred in connection with acquiring new insurance business, including such acquisition costs as
       sales commissions, are charged to operations as incurred. Expenses incurred are reduced for ceding allowances
       received or receivable.

       In addition, the company uses the following accounting policies:

       1) Asset values are generally stated as follows: Short-term investments are valued at amortized cost. Bonds
          not backed by other loans, asset and mortgage backed bonds and structured securities are valued at
          amortized cost using the effective interest method; and common stocks in which the Company has an
          interest of less than 20% are valued at market.

       2) Prepayment assumptions for loan backed bonds and structured securities were obtained from broker/dealer
          survey values or from outside investment managers. The assumptions are consistent with the current
          interest rate and economic environment. The retrospective adjustment method is used for these securities.
          Any securities that are permanently impaired are written down to realizable value using factors that
          recognize maintaining the original yield on the bond.

       3) The Company has no mortgage loans or derivatives.

       4) The Company anticipates investment income as a factor in the premium deficiency calculation, in
          accordance with SSAP No. 53, Property Casualty Contracts-Premiums.

       5) Unpaid losses and loss adjustment expenses include an amount determined from individual case estimates
          and loss reports and an amount, based on past experience, for losses incurred but not reported. Such
          liabilities are necessarily based on assumptions and estimates and while management believes the amount
          is adequate, the ultimate liability may be excess of or less than the amount provided. The methods for
          making such estimates and for establishing the resulting liabilities are continually reviewed and any
          adjustments are reflected in the period determined.

2. Accounting Changes and Corrections of Errors - None

3. Business Combinations and Goodwill - None

4. Discontinued Operations – None

5. Investments

   A. Mortgage Loans – None




                                                      14
                 ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                            NOTES TO FINANCIAL STATEMENTS
    B. Debt Restructuring - None

    C. Reverse Mortgages – None

    D. Loan Backed Securities – See item 1.C.2 above.

    E. Repurchase Agreements – None

    F. Real Estate – None

    G. Low-Income Housing Tax Credits - None

6. Joint Ventures, Partnerships and Limited Liability Companies - None

7. Investment Income

    A. Any due and accrued investment income over 90 days past due would be excluded from surplus.

    B. At December 31, 2006, there was no due and accrued investment income excluded from surplus.

8. Derivative Investments - None

9. Income Taxes

    A. There were no DTAs or DTLs recognized in the Company’s Assets, Liabilities, Surplus or Other Funds

    B. Unrecognized Deferred Tax Liabilities - None

    C. The total income tax incurred is current and there were no deferred tax amounts as of December 31, 2006.

    D. Reconciliation of Federal Income Tax Rate to Actual Effective Rate

        The significant items causing a difference between the statutory federal income tax rate and NIC’s
        effective income rate are as follows:

                                                                     Amount             Tax Effec ted
        Inc ome before taxes                                     $    5,080,810     $       1,778,283
        TIPS expense                                                     (21,670)              (7,585)
        Tax exempt interest deduc tion                                    (3,094)              (1,083)
        Total adjustments                                                (24,764)              (8,667)
        Taxable inc ome                                          $    5,056,046     $       1,769,616

    E. Operating Loss and Tax Credit Carry Forwards :

        1) The Company has no operating loss or tax credit carry forwards.

        2) The amount of Federal income tax incurred and available for recoupment in the event of future net losses
           is: current year $1,769,616; first preceding year $1,008,721; second preceding year $708,714.

    F. Federal Income Tax Allocation

        1) The Company’s federal income tax return is consolidated with the following entities:
              The Navigators Group, Inc.
              Navigators Insurance Company
              Navigators Management Company, Inc.
              Navigators Insurance Services of Washington, Inc.
              Navigators California Insurance Services, Inc
              Navigators Insurance Services of Texas, Inc.

        2) The method of allocation between the companies is subject to written agreement, approved by the Board of
           Directors. Allocation is based upon separate return calculations. Intercompany tax balances are settled in
           the first quarter.


10. Information Concerning Parent, Subsidiaries and Affiliates




                                                      14.1
                  ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                          NOTES TO FINANCIAL STATEMENTS
   A. All outstanding shares of NIC Insurance Company are owned by Navigators Insurance Company
      (“Parent”), an insurance company domiciled in the State of New York.

   B. The company received a surplus contribution of $50,000,000 from its parent in October 2005.

   C. The Company ceded $231,718,000 of premiums to Navigators Insurance Company under a reinsurance
      agreement whereby the Company cedes all its business to its Parent. The Company incurred commission
      expense of $18,796,357 under agency agreements with Navigators California Insurance Services, Inc.
      (“NCIS”) and Navigators Management Company, Inc. (“NMC”), insurance agencies owned by The
      Navigators Group, Inc., the Company’s ultimate parent.

   D. The only amounts due between the Company and its affiliates are insurance related items which are settled
      monthly when due.

   E. Guarantees of Contingencies for Related Parties - None

   F. See item 10.C above and Schedule Y contained herein for material arrangements with related parties.

   G. See items 10. A and 10. F above concerning the relationship with other companies under common control.

   H. The Company does not own any shares of its Parent or affiliated companies.

   I.   The Company owns no investment in an SCA.

   J.   The Company owns no investment in an impaired SCA.

   K. The Company owns no investment in a foreign insurance subsidiary.

11. Debt - None

12. Retirement Plans, Deferred Compensation, Postemployment Benefits and Compensated Absences and Other
    Postretirement Benefit Plans

   A. Defined Benefit Plans – None

   B. Defined Contribution Plans – None

   C. Multiemployer Plans – None

   D. Consolidated/Holding Company Plans - The Company participates in a defined contribution Money Purchase
      Plan and a 401(k) Plan sponsored by its Parent. It does not have or participate in any other post retirement
      benefit plans.

   E. Postemployment Benefits and Compensated Absences - The Company has no post employment benefits except
      as disclosed in item 12.D above.

13. Capital and Surplus, Shareholders’ Dividend Restrictions and Quasi-Reorganizations

   1. The Company has 250 common shares authorized, issued and outstanding with a $20,000 par value.

   2. The Company has no preferred stock outstanding.

   3. The maximum amount of dividends which may be paid by State of New York insurance companies to
      shareholders without prior approval of the Insurance Commissioner is subject to restrictions relating to
      statutory surplus and investment income. The maximum dividend which may be paid without prior approval is
      10% of the Company’s statutory surplus.

   4. Subject to 13.3 above, there are no restrictions placed on the portion of profits that may be paid as ordinary
      dividends to the Company’s stockholders.

   5. Subject to 13.3 above, there are no restrictions placed on the Company’s surplus.

   6. The Company is not a mutual.

   7. There is no stock held by the Company for special purposes.

   8. There are no special surplus funds.




                                                    14.2
                   ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                              NOTES TO FINANCIAL STATEMENTS
    9. The unassigned funds (surplus) represented has not been reduced by any cumulative unrealized gains and
       losses.

    10. Surplus Notes – None

    11. Quasi-reorganization - None

14. Contingencies - None other than various lawsuits that have arisen in the normal course of the Company’s business
    which are not considered material in relation to the financial position of the company.

15. Leases – None

16. Financial Instruments with Off-Balance Risk and with Concentration of Credit Risk – None

17. Sale, Transfer and Servicing of Financial Assets and Extinguishments of Liabilities – None

18. Gain or Loss from Uninsured Plans and the Uninsured Portion of Partially Insured Plans – None

19. Direct Premium Written/Produced by Managing General Agents/Third Party Administrators:

                                                                           Type of         Type of          Direct
                                                             Exclus ive    Bus ines s     A uthority       Premium
            Name and A ddres s             FEI Number        Contract       W ritten      Granted*         W ritten
Navigators M anagement Company Inc.
One Penn Plaza                                                                            U, C, CA ,
New York, NY 10119                          13-2771091          No         Liability       R, B, P     $    58,357,494
Navigators CA Ins . Svcs ., Inc.
433 California Street, Suite 820
San Francis co, CA 94104                    94-3105355          No         Liability      U, R, B, P       167,130,146
Navigators Ins . Svcs . of TX, Inc.
Sage Park One                                                                             U, C, CA
2121 Sage, Suite 145                        75-2304692          No         Liability       R, B, P           1,081,843
Navigators Ins . Svcs . of W A , Inc.
2101 Fourth A venue, Suite 910
Seattle, W A 98121                          91-1375993          No         Liability      U, R, B, P         5,148,941


Total                                                                                                  $ 231,718,424

*Type of A uthority Granted: U = Underwriting, C = Claims Payments , CA = Claims A djus ting,
B = Binding A uthority, R = Reins urance, P = Premium Collection

20. September 11 Events:

    The Company has not incurred any losses from the September 11 Events. However, given the uncertainty
    surrounding this event, the estimates may change over time as additional information becomes available.

21. Other Items:

    A. Extraordinary Items – None

    B. Troubled Debt Restructuring – None

    C. Other Disclosures - None

    D. Uncollectible Premiums Receivable - Uncollectible amounts are written off as they are identified.

    E. Business Interruption Insurance Recoveries - None

22. Events Subsequent – On January 4, 2007, the Company changed its name to Navigators Specialty Insurance
    Company.

23. Reinsurance:

    A. Unsecured Reinsurance Recoverables




                                                      14.3
                   ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                             NOTES TO FINANCIAL STATEMENTS
          The Company has unsecured reinsurance receivables for losses, paid and unpaid including IBNR, loss
          adjustment expenses and unearned premium exceeding 3% of policyholders surplus of $393,554,543 with
          Navigators Insurance Company (NAIC Group Code 0510, Federal ID# 13-3138390. NAIC # 42307), its parent
          company.

   B. Reinsurance Recoverables in Dispute – None

   C. Reinsurance Assumed and Ceded:

          1) The following table summarizes ceded and assumed unearned premiums and the related commission equity
             at December 31, 2006.

                            (1)           (2)            (3)            (4)               (5)                (6)
                                 Assumed                        Ceded                             Net
                          Unearned    Commission      Unearned       Commission       Unearned       Commission
                          Premiums       Equity       Premiums         Equity         Premiums          Equity
    a.   Affiliates     $        -    $        -   $ 113,341,286 $ 18,796,357       $ (113,341,286) $ (18,796,357)
    b.   All other               -             -              -               -                -               -
    c.   Total         $         -    $        -   $ 113,341,286 $ 18,796,357       $ (113,341,286) $ (18,796,357)
    d.   Direc t Unearned Premium Reserve $ 113,341,286

          2) The Company has no additional or return commission predicated on loss experience or on any other form
             of profit sharing arrangements in this annual statement as a result of existing contractual arrangements.

   D. Uncollectible Reinsurance – None

   E. Commutation of Ceded Reinsurance – None

   F. Retroactive Reinsurance – None

   G. Reinsurance Accounted for as a Deposit - None

24. Retrospectively Rated Contracts and Contracts Subject to Redetermination - None

25. Changes in Net Incurred Losses and Loss Adjustment Expenses

   The Company has no net incurred losses or loss adjustment expenses as the result of all of its business being ceded
   to its Parent.

26. Intercompany Pooling Arrangements

   Pursuant to a reinsurance agreement, the Company cedes 100% of its gross written premium to its Parent.

27. Structured Settlements – None

28. Health Care receivables – None

29. Participating Accident and Health Policies – None

30. Premium Deficiency Reserves – None

31. High Deductibles – None

32. Discounting of Liabilities for Unpaid Losses and Loss Adjustment Expenses – None

33. Asbestos/Environmental Reserves

   A. Does the Company have on the books, or has it ever written an insured for which you have identified a
      potential for the existence of, a liability due to asbestos losses? Yes (X) No ( )

          All reserves are ceded to the Company's Parent.

   B. There are no ending reserves for Bulk + IBNR included in A (Loss and LAE).

   C. There are no ending reserves for loss adjustment expenses included in A (Case, Bulk + IBNR).

   D. Does the company have on the books, or has it ever written an insured for which you have defined a potential
      for the existence of, a liability due to environmental losses? Yes ( ) No (X)




                                                        14.4
                 ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                          NOTES TO FINANCIAL STATEMENTS

34. Subscriber Savings Accounts - None

35. Multiple Peril Crop Insurance - None




                                            14.5
                              ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




                                          SUMMARY INVESTMENT SCHEDULE
                                                                                                                            Admitted Assets as Reported
                                                                                                   Gross                               in the
                                                                                            Investment Holdings                  Annual Statement
                                                                                        1                     2               3                    4
                                 Investment Categories                                Amount              Percentage        Amount             Percentage
 1. Bonds:
    1.1 U.S. treasury securities                                                          13,269,234              12.340      13,269,234               12.340
    1.2 U.S. government agency obligations (excluding mortgage-backed
         securities):
            1.21 Issued by U.S. government agencies
            1.22 Issued by U.S. government sponsored agencies
    1.3 Foreign government (including Canada, excluding mortgaged-backed
         securities)                                                                         157,849               0.147         157,849                0.147
    1.4 Securities issued by states, territories, and possessions and political
         subdivisions in the U.S.:
            1.41 States, territories and possessions general obligations                     528,875               0.494         528,875                0.494
            1.42 Political subdivisions of states, territories and possessions and
                 political subdivisions general obligations                                  323,302               0.302         323,302                0.302
            1.43 Revenue and assessment obligations                                          815,141               0.762         815,141                0.762
            1.44 Industrial development and similar obligations                            1,341,130               1.254       1,341,130                1.254
    1.5 Mortgage-backed securities (includes residential and commercial
        MBS):
            1.51 Pass-through securities:
                 1.511 Issued or guaranteed by GNMA                                        3,452,353               3.230       3,452,353                3.230
                 1.512 Issued or guaranteed by FNMA and FHLMC                             35,862,047              33.558      35,862,047               33.558
                 1.513 All other
            1.52 CMOs and REMICs:
                 1.521 Issued or guaranteed by GNMA, FNMA, FHLMC or VA                     3,182,282               2.977       3,182,282                2.977
                 1.522 Issued by non-U.S. Government issuers and
                        collateralized by mortgage-backed securities issued or
                        guaranteed by agencies shown in Line 1.521
                 1.523 All other                                                          25,372,443              23.742      25,372,443               23.742
 2. Other debt and other fixed income securities (excluding short-term):
    2.1 Unaffiliated domestic securities (includes credit tenant loans rated by
         the SVO)                                                                         17,798,396              16.655      17,798,396               16.655
    2.2 Unaffiliated foreign securities                                                    3,686,886               3.450       3,686,886                3.450
    2.3 Affiliated securities
 3. Equity interests:
    3.1 Investments in mutual funds
    3.2 Preferred stocks:
            3.21 Affiliated
            3.22 Unaffiliated
    3.3 Publicly traded equity securities (excluding preferred stocks):
            3.31 Affiliated
            3.32 Unaffiliated
    3.4 Other equity securities:
            3.41 Affiliated
            3.42 Unaffiliated
    3.5 Other equity interests including tangible personal property under lease:
            3.51 Affiliated
            3.52 Unaffiliated
 4. Mortgage loans:
    4.1 Construction and land development
    4.2 Agricultural
    4.3 Single family residential properties
    4.4 Multifamily residential properties
    4.5 Commercial loans
    4.6 Mezzanine real estate loans
 5. Real estate investments:
    5.1 Property occupied by the company
    5.2 Property held for the production of income (including
        $                           of property acquired in satisfaction of debt)
    5.3 Property held for sale (including $                            property
         acquired in satisfaction of debt)
 6. Contract loans
 7. Receivables for securities                                                                13,155               0.012          13,155                0.012
 8. Cash, cash equivalents and short-term investments                                      1,157,072               1.082       1,157,072                1.082
 9. Other invested assets
10. Total invested assets                                                                 106,960,165             100.000    106,960,165              100.000




                                                                                     15
                            ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                                                   GENERAL INTERROGATORIES
                                                             PART 1 - COMMON INTERROGATORIES
                                                                                    GENERAL
1.1   Is the reporting entity a member of an Insurance Holding Company System consisting of two or more affiliated persons, one or more of
      which is an insurer?                                                                                                                                       Yes [ X ] No [    ]
1.2   If yes, did the reporting entity register and file with its domiciliary State Insurance Commissioner, Director or Superintendent, or with
      such regulatory official of the state of domicile of the principal insurer in the Holding Company System, a registration statement
      providing disclosure substantially similar to the standards adopted by the National Association of Insurance Commissioners (NAIC) in
      its Model Insurance Holding Company System Regulatory Act and model regulations pertaining thereto, or is the reporting entity subject
      to standards and disclosure requirements substantially similar to those required by such Act and regulations?                                      Yes [ X ] No [   ] NA [   ]
1.3   State Regulating?                                                                                                                                    New York
2.1   Has any change been made during the year of this statement in the charter, by-laws, articles of incorporation, or deed of settlement of the
      reporting entity?                                                                                                                                          Yes [    ] No [ X ]
2.2   If yes, date of change:
3.1   State as of what date the latest financial examination of the reporting entity was made or is being made.                                                           12/31/2004
3.2   State the as of date that the latest financial examination report became available from either the state of domicile or the reporting entity. This
      date should be the date of the examined balance sheet and not the date the report was completed or released.                                                        12/31/2004
3.3   State as of what date the latest financial examination report became available to other states or the public from either the state of domicile or
      the reporting entity. This is the release date or completion date of the examination report and not the date of the examination (balance
      sheet date).                                                                                                                                                        09/22/2006
3.4   By what department or departments? New York State Insurance Department
4.1   During the period covered by this statement, did any agent, broker, sales representative, non-affiliated sales/service organization or any
      combination thereof under common control (other than salaried employees of the reporting entity), receive credit or commissions for or
      control a substantial part (more than 20 percent of any major line of business measured on direct premiums) of:
                                                                                        4.11 sales of new business?                                              Yes [ X ] No [    ]
                                                                                              4.12 renewals?                                                     Yes [ X ] No [    ]
4.2   During the period covered by this statement, did any sales/service organization owned in whole or in part by the reporting entity or an
      affiliate, receive credit or commissions for or control a substantial part (more than 20 percent of any major line of business measured on
      direct premiums) of:
                                                                                          4.21 sales of new business?                                            Yes [ X ] No [    ]
                                                                                              4.22 renewals?                                                     Yes [ X ] No [    ]
5.1   Has the reporting entity been a party to a merger or consolidation during the period covered by this statement?                                            Yes [    ] No [ X ]
5.2   If yes, provide the name of the entity, NAIC Company Code, and state of domicile (use two letter state abbreviation) for any entity that has
      ceased to exist as a result of the merger or consolidation.


                                                                  1                                             2                          3
                                                             Name of Entity                             NAIC Company Code          State of Domicile




6.1   Has the reporting entity had any Certificates of Authority, licenses or registrations (including corporate registration, if applicable) suspended
      or revoked by any governmental entity during the reporting period?                                                                                         Yes [    ] No [ X ]
6.2   If yes, give full information
7.1   Does any foreign (non-United States) person or entity directly or indirectly control 10% or more of the reporting entity?                                  Yes [    ] No [ X ]
7.2   If yes,
                          7.21 State the percentage of foreign control;
                          7.22 State the nationality(s) of the foreign person(s) or entity(s) or if the entity is a mutual or reciprocal, the nationality of
                               its manager or attorney in fact; and identify the type of entity(s) (e.g., individual, corporation or government, manager
                               or attorney in fact).

                                                    1                                                                   2
                                               Nationality                                                        Type of Entity




                                                                                          16
                            ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                   GENERAL INTERROGATORIES
8.1   Is the company a subsidiary of a bank holding company regulated by the Federal Reserve Board?                                                                Yes [   ] No [ X ]
8.2   If response to 8.1 is yes, please identify the name of the bank holding company.

8.3   Is the company affiliated with one or more banks, thrifts or securities firms?                                                                               Yes [   ] No [ X ]
8.4   If response to 8.3 is yes, please provide the names and location (city and state of the main office) of any affiliates regulated by a federal
      financial regulatory services agency [i.e. the Federal Reserve Board (FRB), the Office of the Comptroller of the Currency (OCC), the Office
      of Thrift Supervision (OTS), the Federal Deposit Insurance Corporation (FDIC) and the Securities Exchange Commission (SEC) and
      identify the affiliate’s primary federal regulator.]


                                    1                                                     2                            3              4              5             6           7
                                                                                      Location
                             Affiliate Name                                         (City, State)                    FRB            OCC            OTS            FDIC        SEC




 9.   What is the name and address of the independent certified public accountant or accounting firm retained to conduct the annual audit?
       KPMG, 345 Park Avenue, New York, NY 10154
10.   What is the name, address and affiliation (officer/employee of the reporting entity or actuary/consultant associated with an actuarial
         consulting firm) of the individual providing the statement of actuarial opinion/certification?
       Claus S. Metzner, F.S.A., F.C.A.S., M.A.A.A., Aktuar-SAV, Actuary
       Milliman USA, 698 Coldbrook Road, South Glastonbury, CT 06073

11.1 Does the reporting entity own any securities of a real estate holding company or otherwise hold real estate indirectly?                                       Yes [   ] No [ X ]
                                                                                       11.11 Name of real estate holding company
                                                                                       11.12 Number of parcels involved
                                                                                       11.13 Total book/adjusted carrying value                            $
11.2 If yes, provide explanation

12. FOR UNITED STATES BRANCHES OF ALIEN REPORTING ENTITIES ONLY:
12.1 What changes have been made during the year in the United States Manager or the United States Trustees of the reporting entity?

12.2 Does this statement contain all business transacted for the reporting entity through its United States Branch on risks wherever located?                      Yes [ ] No [     ]
12.3 Have there been any changes made to any of the trust indentures during the year?                                                                              Yes [ ] No [     ]
12.4 If answer to (12.3) is yes, has the domiciliary or entry state approved the changes?                                                                 Yes [    ] No [ ] NA [    ]


                                                                        BOARD OF DIRECTORS

13.   Is the purchase or sale of all investments of the reporting entity passed upon either by the board of directors or a subordinate committee
          thereof?                                                                                                                                                 Yes [ X ] No [   ]
14.   Does the reporting entity keep a complete permanent record of the proceedings of its board of directors and all subordinate committees
          thereof?                                                                                                                                                 Yes [ X ] No [   ]
15.   Has the reporting entity an established procedure for disclosure to its board of directors or trustees of any material interest or affiliation on
          the part of any of its officers, directors, trustees or responsible employees that is in conflict or likely to conflict with the official duties of
          such person?                                                                                                                                             Yes [ X ] No [   ]


                                                                                  FINANCIAL

16.1 Total amount loaned during the year (inclusive of Separate Accounts, exclusive of policy loans):           16.11 To directors or other officers       $
                                                                                                                16.12 To stockholders not officers         $
                                                                                                                16.13 Trustees, supreme or grand
                                                                                                                       (Fraternal only)              $
16.2 Total amount of loans outstanding at end of year (inclusive of Separate Accounts, exclusive of
         policy loans):                                                                                   16.21 To directors or other officers       $
                                                                                                          16.22 To stockholders not officers         $
                                                                                                          16.23 Trustees, supreme or grand
                                                                                                                  (Fraternal only)                   $
17.1 Were any of the assets reported in this statement subject to a contractual obligation to transfer to another party without the liability for such
         obligation being reported in this statement?                                                                                                              Yes [   ] No [ X ]
17.2 If yes, state the amount thereof at December 31 of the current year:              17.21 Rented from others                                      $
                                                                                       17.22 Borrowed from others                                    $
                                                                                       17.23 Leased from others                                      $
                                                                                       17.24 Other                                                   $
18.1 Does this statement include payments for assessments as described in the Annual Statement Instructions other than guaranty fund or
         guaranty association assessments?                                                                                                                         Yes [   ] No [ X ]
18.2 If answer is yes,                                                                  18.21 Amount paid as losses or risk adjustment               $
                                                                                        18.22 Amount paid as expenses                                $
                                                                                        18.23 Other amounts paid                                     $
19.1 Does the reporting entity report any amounts due from the parent, subsidiaries or affiliates on Page 2 of this statement?                                     Yes [   ] No [ X ]
19.2 If yes, indicated any amounts receivable from parent included in the Page 2 amount:                                                             $




                                                                                         16.1
                            ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                                                   GENERAL INTERROGATORIES
                                                                            INVESTMENT

20.1 Were all the stocks, bonds and other securities owned December 31 of current year, over which the reporting entity has exclusive control, in
       the actual possession of the reporting entity on said date, except as shown by Schedule E - Part 3 - Special Deposits?                             Yes [     ] No [ X ]
20.2 If no, give full and complete information relating thereto:
       Securities are held in the company's custody account at Brown Brothers Harriman & Co.
21.1 Were any of the stocks, bonds or other assets of the reporting entity owned at December 31 of the current year not exclusively under the
       control of the reporting entity, except as shown on the Schedule E - Part 3 - Special Deposits, or has the reporting entity sold or
       transferred any assets subject to a put option contract that is currently in force? (Exclude securities subject to Interrogatory 17.1)              Yes [    ] No [ X ]
21.2 If yes, state the amount thereof at December 31 of the current year:        21.21   Loaned to others                                         $
                                                                                 21.22   Subject to repurchase agreements                         $
                                                                                 21.23   Subject to reverse repurchase agreements                 $
                                                                                 21.24   Subject to dollar repurchase agreements                  $
                                                                                 21.25   Subject to reverse dollar repurchase agreements          $
                                                                                 21.26   Pledged as collateral                                    $
                                                                                 21.27   Placed under option agreements                           $
                                                                                 21.28   Letter stock or other securities restricted as to sale   $
                                                                                 21.29   Other                                                    $
21.3 For category (21.28) provide the following:


                                        1                                                                  2                                                3
                              Nature of Restriction                                                    Description                                        Amount




22.1 Does the reporting entity have any hedging transactions reported on Schedule DB?                                                                      Yes [    ] No [ X ]

22.2 If yes, has a comprehensive description of the hedging program been made available to the domiciliary state?                                 Yes [    ] No [    ] NA [ X ]
     If no, attach a description with this statement.

23.1 Were any preferred stocks or bonds owned as of December 31 of the current year mandatorily convertible into equity, or, at the option of
     the issuer, convertible into equity?                                                                                                                  Yes [    ] No [ X ]
23.2 If yes, state the amount thereof at December 31 of the current year.                                                                         $




                                                                                  16.2
                             ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                                                    GENERAL INTERROGATORIES
 24.   Excluding items in Schedule E, real estate, mortgage loans and investments held physically in the reporting entity’s offices, vaults or
       safety deposit boxes, were all stocks, bonds and other securities, owned throughout the current year held pursuant to a custodial
       agreement with a qualified bank or trust company in accordance with Part 1 – General, Section IV.H-Custodial or Safekeeping
       Agreements of the NAIC Financial Condition Examiners Handbook?                                                                                            Yes [ X ] No [   ]

24.01 For agreements that comply with the requirements of the NAIC Financial Condition Examiners Handbook, complete the following:

                                                           1                                                            2
                                                  Name of Custodian(s)                                         Custodian’s Address
                               Brown Brothers Harriman & Company                             140 Broadway, New York, NY 10005-1101




24.02 For all agreements that do not comply with the requirements of the NAIC Financial Condition Examiners Handbook, provide the name,
      location and a complete explanation:


                                          1                                               2                                         2
                                        Name(s)                                       Location(s)                         Complete Explanation(s)




24.03 Have there been any changes, including name changes, in the custodian(s) identified in 24.01 during the current year?                                      Yes [   ] No [ X ]
24.04 If yes, give full and complete information relating thereto:


                                    1                                             2                            3                             4
                                                                                                             Date of
                             Old Custodian                                   New Custodian                   Change                      Reason




24.05 Identify all investment advisors, brokers/dealers or individuals acting on behalf of broker/dealers that have access to the investment
      accounts, handle securities and have authority to make investments on behalf of the reporting entity:

                                         1                                                2                                           2
                    Central Registration Depository Number(s)                           Name                                       Address
                    106595                                        Wellington Management Company, LLP              75 State Street, Boston, MA 02109




25.1 Does the reporting entity have any diversified mutual funds reported in Schedule D, Part 2 (diversified according to the Securities and
     Exchange Commission (SEC) in the Investment Company Act of 1940 [Section 5 (b) (1)])?                                                                       Yes [   ] No [ X ]
25.2 If yes, complete the following schedule:


                                1                                                         2                                                         3
                              CUSIP #                                            Name of Mutual Fund                                   Book/Adjusted Carrying Value




25.2999 TOTAL

25.3 For each mutual fund listed in the table above, complete the following schedule:

                                1                                        2                                         3                                    4
                                                                                                      Amount of Mutual Fund’s
                     Name of Mutual Fund                  Name of Significant Holding               Book/Adjusted Carrying Value
                      (from above table)                     Of the Mutual Fund                      Attributable to the Holding                 Date of Valuation




                                                                                          16.3
                              ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                                                  GENERAL INTERROGATORIES
26.   Provide the following information for all short-term and long-term bonds and all preferred stocks. Do not substitute amortized value or
         statement value for fair value.
                                                                         1                                2                           3
                                                                                                                            Excess of Statement
                                                                                                                             over Fair Value (-)
                                                               Statement (Admitted)                                            or Fair Value
                                                                       Value                         Fair Value              over Statement (+)
                       26.1    Bonds                                          105,789,943                         105,150,156                 (639,787)
                       26.2    Preferred stocks
                       26.3    Totals                                         105,789,943                         105,150,156                 (639,787)
26.4 Describe the sources or methods utilized in determining fair values:
      The market value of bonds was based upon the closing prices of publicly traded issues. The market value of other issues was obtained from
         Merrill Lynch Index, Rueters, FT-Interactive, Bloomberg or independent security dealers. Short-terms and Cash Equivalents are valued
         at Amortized Cost.
27.1 Have all the filing requirements of the Purposes and Procedures Manual of the NAIC Securities Valuation Office been followed?                        Yes [ X ] No [   ]
27.2 If no, list the exceptions:


                                                                                OTHER
28.1 Amount of payments to trade associations, service organizations and statistical or rating bureaus, if any?                                 $
28.2 List the name of the organization and the amount paid if any such payment represented 25% or more of the total payments to trade
         associations, service organizations and statistical or rating bureaus during the period covered by this statement.

                                                                         1                                                          2
                                                                       Name                                                     Amount Paid




29.1 Amount of payments for legal expenses, if any?                                                                                              $
29.2 List the name of the firm and the amount paid if any such payment represented 25% or more of the total payments for legal expenses during
         the period covered by this statement.

                                                                         1                                                          2
                                                                       Name                                                     Amount Paid




30.1 Amount of payments for expenditures in connection with matters before legislative bodies, officers or departments of government, if any? $
30.2 List the name of the firm and the amount paid if any such payment represented 25% or more of the total payment expenditures in
         connection with matters before legislative bodies, officers or departments of government during the period covered by this statement.

                                                                         1                                                          2
                                                                       Name                                                     Amount Paid




                                                                                   16.4
                             ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                GENERAL INTERROGATORIES
                                                               (continued)
                                            PART 2 - PROPERTY & CASUALTY INTERROGATORIES
1.1   Does the reporting entity have any direct Medicare Supplement Insurance in force?                                                                    Yes [   ] No [ X ]
1.2   If yes, indicate premium earned on U.S. business only.                                                                                        $
1.3   What portion of Item (1.2) is not reported on the Medicare Supplement Insurance Experience Exhibit?                                           $
           1.31 Reason for excluding


1.4   Indicate amount of earned premium attributable to Canadian and/or Other Alien not included in Item (1.2) above.                               $
1.5   Indicate total incurred claims on all Medicare Supplement insurance.                                                                          $
1.6   Individual policies:
                                                                                           Most current three years:
                                                                                            1.61 Total premium earned                               $
                                                                                            1.62 Total incurred claims                              $
                                                                                            1.63 Number of covered lives
                                                                                           All years prior to most current three years:
                                                                                            1.64 Total premium earned                               $
                                                                                            1.65 Total incurred claims                              $
                                                                                            1.66 Number of covered lives
1.7   Group policies:
                                                                                           Most current three years:
                                                                                            1.71 Total premium earned                               $
                                                                                            1.72 Total incurred claims                              $
                                                                                            1.73 Number of covered lives
                                                                                           All years prior to most current three years:
                                                                                            1.74 Total premium earned                               $
                                                                                            1.75 Total incurred claims                              $
                                                                                            1.76 Number of covered lives

2.    Health Test:

                                                                                                               1                               2
                                                                                                          Current Year                    Prior Year
                                                          2.1    Premium Numerator              $                                $
                                                          2.2    Premium Denominator            $                                $
                                                          2.3    Premium Ratio (2.1/2.2)
                                                          2.4    Reserve Numerator              $                                $
                                                          2.5    Reserve Denominator            $                                $
                                                          2.6    Reserve Ratio (2.4/2.5)


3.1   Does the reporting entity issue both participating and non-participating policies?                                                                  Yes [    ] No [ X ]
3.2   If yes, state the amount of calendar year premiums written on:
                                                                                           3.21 Participating policies                           $
                                                                                           3.22 Non-participating policies                       $

 4.   For Mutual reporting entities and Reciprocal Exchanges only:
4.1   Does the reporting entity issue assessable policies?                                                                                                Yes [    ] No [       ]
4.2   Does the reporting entity issue non-assessable policies?                                                                                            Yes [    ] No [       ]
4.3   If assessable policies are issued, what is the extent of the contingent liability of the policyholders?                                                               %
4.4   Total amount of assessments paid or ordered to be paid during the year on deposit notes or contingent premiums.                           $

 5.   For Reciprocal Exchanges Only:
5.1   Does the exchange appoint local agents?                                                                                                             Yes [    ] No [       ]
5.2   If yes, is the commission paid:
                                                                                      5.21 Out of Attorney's-in-fact compensation                       Yes [ ] No [ ] NA [ ]
                                                                                      5.22 As a direct expense of the exchange                          Yes [ ] No [ ] NA [ ]
5.3   What expenses of the Exchange are not paid out of the compensation of the Attorney-in-fact?

5.4   Has any Attorney-in-fact compensation, contingent on fulfillment of certain conditions, been deferred?                                              Yes [    ] No [       ]
5.5   If yes, give full information




                                                                                       17
                            ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                  GENERAL INTERROGATORIES
                                             PART 2 - PROPERTY & CASUALTY INTERROGATORIES
6.1   What provision has this reporting entity made to protect itself from an excessive loss in the event of a catastrophe under a workers’
      compensation contract issued without limit of loss:
      The Company does not write workers' compensation insurance.
6.2   Describe the method used to estimate this reporting entity’s probable maximum insurance loss, and identify the type of insured exposures
      comprising that probable maximum loss, the locations of concentrations of those exposures and the external resources (such as
      consulting firms or computer software models), if any, used in the estimation process:
      The Company's business is reinsured by its Parent.
6.3   What provision has this reporting entity made (such as a catastrophic reinsurance program) to protect itself from an excessive loss arising
      from the types and concentrations of insured exposures comprising its probable maximum property insurance loss?
      The Company's business is reinsured by its Parent.
6.4   Does the reporting entity carry catastrophe reinsurance protection for at least one reinstatement, in an amount sufficient to cover its
      estimated probable maximum loss attributable to a single loss event or occurrence?                                                                    Yes [    ] No [ X ]
6.5   If no, describe any arrangements or mechanisms employed by the reporting entity to supplement its catastrophe reinsurance program or
      to hedge its exposure to unreinsured catastrophic loss.
      The Company's business is reinsured by its Parent.

7.1   Has the reporting entity reinsured any risk with any other entity under a quota share reinsurance contract that includes a provision that
      would limit the reinsurer's losses below the stated quota share percentage (e.g., a deductible, a loss ratio corridor, a loss cap, an
      aggregate limit or any similar provisions)?                                                                                                           Yes [    ] No [ X ]
7.2   If yes, indicate the number of reinsurance contracts containing such provisions.
7.3   If yes, does the amount of reinsurance credit taken reflect the reduction in quota share coverage caused by any applicable limiting
      provision(s)?                                                                                                                                         Yes [    ] No [    ]
8.1   Has this reporting entity reinsured any risk with any other entity and agreed to release such entity from liability, in whole or in part, from
      any loss that may occur on the risk, or portion thereof, reinsured?                                                                                   Yes [    ] No [ X ]
8.2   If yes, give full information


9.1   Has the reporting entity ceded any risk under any reinsurance contract (or under multiple contracts with the same reinsurer or its affiliates)
      for which during the period covered by the statement: (i) it recorded a positive or negative underwriting result greater than 3% of prior year-
      end surplus as regards policyholders or it reported calendar year written premium ceded or year-end loss and loss expense reserves
      ceded greater than 3% of prior year-end surplus as regards policyholders; (ii) it accounted for that contract as reinsurance and not as a
      deposit; and (iii) the contract(s) contain one or more of the following features or other features that would have similar results:
         (a) A contract term longer than two years and the contract is noncancellable by the reporting entity during the contract term;
         (b) A limited or conditional cancellation provision under which cancellation triggers an obligation by the reporting entity, or an affiliate of
         the reporting entity, to enter into a new reinsurance contract with the reinsurer, or an affiliate of the reinsurer;
         (c) Aggregate stop loss reinsurance coverage;
         (d) An unconditional or unilateral right by either party to commute the reinsurance contract except for such provisions which are only
         triggered by a decline in the credit status of the other party;
         (e) A provision permitting reporting of losses, or payment of losses, less frequently than on a quarterly basis (unless there is no activity
         during the period); or
         (f) Payment schedule, accumulating retentions from multiple years or any features inherently designed to delay timing of the
         reimbursement to the ceding entity.                                                                                                                Yes [    ] No [ X ]
9.2   Has the reporting entity during the period covered by the statement ceded any risk under any reinsurance contract (or under multiple
      contracts with the same reinsurer or its affiliates), excluding cessions to approved pooling agreements or to captive insurance companies
      that are directly or indirectly controlling, controlled by, or under common control with (i) one or more unaffiliated policyholders of the
      reporting entity, or (ii) an association of which one or more unaffiliated policyholders of the reporting entity is a member, where:
          (a) The written premium ceded to the reinsurer by the reporting entity or its affiliates represents fifty percent (50%) or more of the entire
          direct and assumed premium written by the reinsurer based on its most recently available financial statement; or
          (b) Twenty–five percent (25%) or more of the written premium ceded to the reinsurer has been retroceded back to the reporting entity or
          its affiliates.                                                                                                                                   Yes [    ] No [ X ]
9.3   If yes to 9.1 or 9.2, please provide the following information in the Reinsurance Summary Supplemental Filing for General Interrogatory 9:
        (a) The aggregate financial statement impact gross of all such ceded reinsurance contracts on the balance sheet and statement of
        income;
        (b) A summary of the reinsurance contract terms and indicate whether it applies to the contracts meeting the criteria in 9.1 or 9.2; and
        (c) A brief discussion of management's principle objectives in entering into the reinsurance contract including the economic purpose to
        be achieved.
9.4   Except for transactions meeting the requirements of paragraph 30 of SSAP No. 62, Property and Casualty Reinsurance, has the reporting
      entity ceded any risk under any reinsurance contract (or multiple contracts with the same reinsurer or its affiliates) during the period
      covered by the financial statement, and either:
          (a) Accounted for that contract as reinsurance (either prospective or retroactive) under statutory accounting principles (“SAP”) and as a
          deposit under generally accepted accounting principles (“GAAP”); or
          (b) Accounted for that contract as reinsurance under GAAP and as a deposit under SAP?                                                             Yes [    ] No [ X ]
9.5   If yes to 9.4, explain in the Reinsurance Summary Supplemental Filing for General Interrogatory 9 (Section D) why the contract(s) is
      treated differently for GAAP and SAP.

10.  If the reporting entity has assumed risks from another entity, there should be charged on account of such reinsurances a reserve equal to
     that which the original entity would have been required to charge had it retained the risks. Has this been done?                                      Yes [ ] No [ ] N/A [X]
11.1 Has this reporting entity guaranteed policies issued by any other entity and now in force:                                                              Yes [ ] No [ X ]
11.2 If yes, give full information




                                                                                        17.1
                            ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                 GENERAL INTERROGATORIES
                                              PART 2 - PROPERTY & CASUALTY INTERROGATORIES
12.1 If the reporting entity recorded accrued retrospective premiums on insurance contracts on Line 13.3 of the asset schedule, Page 2, state
     the amount of corresponding liabilities recorded for:
                12.11 Unpaid losses                                                                                                                 $
                12.12 Unpaid underwriting expenses (including loss adjustment expenses)                                                             $
12.2 Of the amount on Line 13.3, Page 2, state the amount that is secured by letters of credit, collateral and other funds?                         $
12.3 If the reporting entity underwrites commercial insurance risks, such as workers’ compensation, are premium notes or promissory notes                   Yes [ ] No [ ] NA [X]
     accepted from its insureds covering unpaid premiums and/or unpaid losses?
12.4 If yes, provide the range of interest rates charged under such notes during the period covered by this statement:
                12.41 From                                                                                                                                                     %
                12.42 To                                                                                                                                                       %
12.5 Are letters of credit or collateral and other funds received from insureds being utilized by the reporting entity to secure premium notes or
     promissory notes taken by the reporting entity, or to secure any of the reporting entity’s reported direct unpaid loss reserves, including
     unpaid losses under loss deductible features of commercial policies?                                                                                    Yes [    ] No [ X ]
12.6 If yes, state the amount thereof at December 31 of the current year:
                12.61 Letters of Credit                                                                                                             $
                12.62 Collateral and other funds                                                                                                    $

13.1 Largest net aggregate amount insured in any one risk (excluding workers’ compensation):                                                      $
13.2 Does any reinsurance contract considered in the calculation of this amount include an aggregate limit of recovery without also including a              Yes [    ] No [ X ]
     reinstatement provision?
13.3 State the number of reinsurance contracts (excluding individual facultative risk certificates, but including facultative programs, automatic                              1
     facilities or facultative obligatory contracts) considered in the calculation of the amount.

14.1 Is the company a cedant in a multiple cedant reinsurance contract?
                                                                                                                                                             Yes [    ] No [ X ]
14.2 If yes, please describe the method of allocating and recording reinsurance among the cedants:


14.3 If the answer to 14.1 is yes, are the methods described in item 14.2 entirely contained in the respective multiple cedant reinsurance
     contracts?
                                                                                                                                                             Yes [    ] No [       ]
14.4 If the answer to 14.3 is no, are all the methods described in 14.2 entirely contained in written agreements?
                                                                                                                                                             Yes [    ] No [       ]
14.5 If answer to 14.4 is no, please explain:


15.1 Has the reporting entity guaranteed any financed premium accounts?
                                                                                                                                                             Yes [    ] No [ X ]
15.2 If yes, give full information



16.1 Does the reporting entity write any warranty business?                                                                                                  Yes [   ] No [ X ]
      If yes, disclose the following information for each of the following types of warranty coverage:

                                                         1                          2                           3                        4                           5
                                                  Direct Losses              Direct Losses               Direct Written           Direct Premium              Direct Premium
                                                     Incurred                   Unpaid                     Premium                   Unearned                     Earned
16.11 Home                                $                           $                           $                         $                           $
16.12 Products                            $                           $                           $                         $                           $
16.13 Automobile                          $                           $                           $                         $                           $
16.14 Other*                              $                           $                           $                         $                           $
      * Disclose type of coverage:




                                                                                      17.2
                          ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                               GENERAL INTERROGATORIES
                                          PART 2 - PROPERTY & CASUALTY INTERROGATORIES

17.1 Does the reporting entity include amounts recoverable on unauthorized reinsurance in Schedule F – Part 3 that it excludes from Schedule F      Yes [   ] No [ X ]
     – Part 5.


      Incurred but not reported losses on contracts not in force on July 1, 1984 or subsequently renewed are exempt from inclusion in Schedule F
      – Part 5. Provide the following information for this exemption:
                                                             17.11   Gross amount of unauthorized reinsurance in Schedule F – Part 3           $
                                                                     excluded from Schedule F – Part 5
                                                             17.12   Unfunded portion of Interrogatory 17.11                                   $
                                                             17.13   Paid losses and loss adjustment expenses portion of Interrogatory $
                                                                        17.11
                                                             17.14   Case reserves portion of Interrogatory 17.11                              $
                                                             17.15   Incurred but not reported portion of Interrogatory 17.11                  $
                                                             17.16   Unearned premium portion of Interrogatory 17.11                           $
                                                             17.17   Contingent commission portion of Interrogatory 17.11                      $


      Provide the following information for all other amounts included in Schedule F – Part 3 and excluded from Schedule F – Part 5, not included
      above.
                                                             17.18   Gross amount of unauthorized reinsurance in Schedule F – Part 3           $
                                                                     excluded from Schedule F – Part 5
                                                             17.19   Unfunded portion of Interrogatory 17.18                                   $
                                                             17.20   Paid losses and loss adjustment expenses portion of Interrogatory $
                                                                        17.18
                                                             17.21   Case reserves portion of Interrogatory 17.18                              $
                                                             17.22   Incurred but not reported portion of Interrogatory 17.18                  $
                                                             17.23   Unearned premium portion of Interrogatory 17.18                           $
                                                             17.24   Contingent commission portion of Interrogatory 17.18                      $




                                                                                  17.3
                           ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                   FIVE-YEAR HISTORICAL DATA
                                   Show amounts in whole dollars only, no cents; show percentages to one decimal place, i.e. 17.6.
                                                                 1                    2                    3                       4               5
                                                               2006                 2005                 2004                   2003             2002
   Gross Premiums Written
   (Page 8, Part 1B, Cols. 1, 2 & 3)
 1. Liability lines (Lines 11.1, 11.2, 16, 17.1, 17.2, 18.1,
       18.2, 19.1, 19.2 & 19.3, 19.4)                            219,240,960          176,413,521          140,751,489          120,111,390       68,461,487
 2. Property lines (Lines 1, 2, 9, 12, 21 & 26)
 3. Property and liability combined lines (Lines 3, 4, 5,
       8, 22 & 27)                                                12,477,464
 4. All other lines (Lines 6, 10, 13, 14, 15, 23, 24, 28, 29
       & 33)
 5. Nonproportional reinsurance lines (Lines 30, 31 &
       32)
 6. Total (Line 34)                                              231,718,424          176,413,521          140,751,489          120,111,390       68,461,487
   Net Premiums Written (Page 8, Part 1B, Col. 6)
 7. Liability lines (Lines 11.1, 11.2, 16, 17.1, 17.2, 18.1,
       18.2, 19.1, 19.2 & 19.3, 19.4)
 8. Property lines (Lines 1, 2, 9, 12, 21 & 26)
 9. Property and liability combined lines
       (Lines 3, 4, 5, 8, 22 & 27)
10. All other lines
       (Lines 6, 10, 13, 14, 15, 23, 24, 28, 29 & 33)
11. Nonproportional reinsurance lines
       (Lines 30, 31 & 32)
12. Total (Line 34)
      Statement of Income (Page 4)
13.    Net underwriting gain (loss) (Line 8)
14.    Net investment gain (loss) (Line 11)                        5,096,478            2,764,867            2,369,370            1,265,068             580,701
15.    Total other income (Line 15)                                                                                 44                  894
16.    Dividends to policyholders (Line 17)
17.    Federal and foreign income taxes incurred
         (Line 19)                                                 1,785,286              977,021              708,714                 418,874          192,623
18. Net income (Line 20)                                           3,311,192            1,787,846            1,660,700                 847,088          388,078
   Balance Sheet Lines (Pages 2 and 3)
19. Total admitted assets excluding protected cell
      business (Page 2, Line 24, Col. 3)                         134,342,913          124,451,784           69,848,381           77,328,283       36,267,039
20. Premiums and considerations (Page 2, Col. 3)
    20.1 In course of collection (Line 13.1)                      26,505,457           18,948,725           16,876,257           17,511,607       11,380,238
    20.2 Deferred and not yet due (Line 13.2)
    20.3 Accrued retrospective premiums (Line 13.3)
21. Total liabilities excluding protected cell
      business (Page 3, Line 24)                                  27,569,971           20,968,364           18,256,494           27,397,095       12,182,939
22. Losses (Page 3, Line 1)
23. Loss adjustment expenses (Page 3, Line 3)
24. Unearned premiums (Page 3, Line 9)
25. Capital paid up (Page 3, Lines 28 & 29)                        5,000,000            5,000,000            5,000,000            5,000,000        5,000,000
26. Surplus as regards policyholders (Page 3, Line 35)           106,772,942          103,483,420           51,591,887           49,931,188       24,084,100
   Risk-Based Capital Analysis
27. Total adjusted capital                                       106,772,942          103,483,420           51,591,887           49,931,188       24,084,100
28. Authorized control level risk-based capital                      423,111              265,948              166,306              147,162           65,106
   Percentage Distribution of Cash, Cash
   Equivalents and Invested Assets
    (Page 2, Col. 3)(Item divided by Page 2, Line 10,
      Col. 3) x 100.0
29. Bonds (Line 1)                                                      98.9                 84.9                 83.5                   68.5             89.9
30. Stocks (Lines 2.1 & 2.2)
31. Mortgage loans on real estate (Lines 3.1 and 3.2)
32. Real estate (Lines 4.1, 4.2 & 4.3)
33. Cash, cash equivalents and short-term investments
      (Line 5)                                                           1.1                 15.1                 16.5                   31.5             10.1
34. Contract loans (Line 6)                                                                                                                      XXX
35. Other invested assets (Line 7)
36. Receivables for securities (Line 8)                                  0.0
37. Aggregate write-ins for invested assets (Line 9)
38. Cash, cash equivalents and invested assets (Line
      10)                                                       100.0                100.0                100.0                100.0             100.0
   Investments in Parent, Subsidiaries and Affiliates
39. Affiliated bonds, (Sch. D, Summary, Line 25, Col. 1)

40. Affiliated preferred stocks
       (Sch. D, Summary, Line 39, Col. 1)
41. Affiliated common stocks
       (Sch. D, Summary, Line 53, Col. 2)
42. Affiliated short-term investments (subtotals included
       in Schedule DA, Part 2, Col. 5, Line 11)
43. Affiliated mortgage loans on real estate
44. All other affiliated
45. Total of above Lines 39 to 44
46. Percentage of investments in parent, subsidiaries
      and affiliates to surplus as regards policyholders
      (Line 45 above divided by Page 3, Col. 1, Line 35
      x 100.0)




                                                                                18
                           ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                  FIVE-YEAR HISTORICAL DATA
                                                                                (Continued)
                                                                 1                         2                3             4             5
                                                               2006                      2005             2004          2003          2002
   Capital and Surplus Accounts (Page 4)


47. Net unrealized capital gains (losses) (Line 24)                   (21,671)                  103,686
48. Dividends to stockholders (Line 35)
49. Change in surplus as regards policyholders for the
      year (Line 38)                                             3,289,522                51,891,533        1,660,700    25,847,088          388,078

   Gross Losses Paid (Page 9, Part 2, Cols. 1 & 2)


50. Liability lines (Lines 11.1, 11.2, 16, 17.1, 17.2, 18.1,
      18.2, 19.1, 19.2 & 19.3, 19.4)                            18,266,247                13,886,770        5,160,187     2,241,349     1,011,026
51. Property lines (Lines 1, 2, 9, 12, 21 & 26)
52. Property and liability combined lines
      (Lines 3, 4, 5, 8, 22 & 27)                                      63,127
53. All other lines
       (Lines 6, 10, 13, 14, 15, 23, 24, 28, 29 & 33)
54. Nonproportional reinsurance lines
      (Lines 30, 31 & 32)
55. Total (Line 34)                                             18,329,374                13,886,770        5,160,187     2,241,349     1,011,026

   Net Losses Paid (Page 9, Part 2, Col. 4)


56. Liability lines (Lines 11.1, 11.2, 16, 17.1, 17.2, 18.1,
      18.2, 19.1, 19.2 & 19.3, 19.4)
57. Property lines (Lines 1, 2, 9, 12, 21 & 26)
58. Property and liability combined lines
      (Lines 3, 4, 5, 8, 22 & 27)
59. All other lines
       (Lines 6, 10, 13, 14, 15, 23, 24, 28, 29 & 33)
60. Nonproportional reinsurance lines
      (Lines 30, 31 & 32)
61. Total (Line 34)


   Operating Percentages (Page 4)
   (Item divided by Page 4, Line 1) x 100.0


62. Premiums earned (Line 1)                                   100.0                    100.0             100.0         100.0         100.0
63. Losses incurred (Line 2)
64. Loss expenses incurred (Line 3)
65. Other underwriting expenses incurred (Line 4)
66. Net underwriting gain (loss) (Line 8)


   Other Percentages


67. Other underwriting expenses to net premiums
      written (Page 4, Lines 4 + 5 - 15 divided by
      Page 8, Part 1B, Col. 6, Line 34 x 100.0)
68. Losses and loss expenses incurred to premiums
      earned (Page 4, Lines 2 + 3 divided by
      Page 4, Line 1 x 100.0)
69. Net premiums written to policyholders' surplus
      (Page 8, Part 1B, Col. 6, Line 34 divided by Page
      3, Line 35, Col. 1 x 100.0)


   One Year Loss Development (000 omitted)


70. Development in estimated losses and loss
      expenses incurred prior to current year
      (Schedule P, Part 2 - Summary, Line 12, Col. 11)
71. Percent of development of losses and loss
      expenses incurred to policyholders' surplus of
      prior year end (Line 70 above divided by Page 4,
      Line 21, Col. 1 x 100.0)


   Two Year Loss Development (000 omitted)


72. Development in estimated losses and loss
      expenses incurred 2 years before the current year
      and prior year (Schedule P, Part 2 - Summary,
      Line 12, Col. 12)
73. Percent of development of losses and loss
      expenses incurred to reported policyholders'
      surplus of second prior year end (Line 72 above
      divided by Page 4, Line 21, Col. 2 x 100.0)




                                                                                   19
                                                                                                                                                                                                        *36056200643059100*
                                                                                                 ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company
                                                                                                           EXHIBIT OF PREMIUMS AND LOSSES (Statutory Page 14)
               NAIC Group Code                    0510                            BUSINESS IN THE STATE OF Consolidated                                   DURING THE YEAR 2006                                                                                 NAIC Company Code 36056
                                                                               Gross Premiums, Including Policy and          3              4                  5                 6                 7                  8                  9                10                11                12
                                                                                        Membership Fees
                                                                                    Less Return Premiums and                                                                                                    Direct Defense     Direct Defense    Direct Defense
                                                                                 Premiums on Policies not Taken        Dividends Paid     Direct         Direct Losses                                             and Cost           and Cost          and Cost
                                                                                      1                   2            or Credited to    Unearned             Paid                                               Containment        Containment       Containment      Commissions           Taxes,
                                                                              Direct Premiums     Direct Premiums     Policyholders on   Premium          (deducting        Direct Losses     Direct Losses        Expense            Expense           Expense        and Brokerage      Licenses and
                                     Line of Business                             Written             Earned          Direct Business    Reserves           salvage)           Incurred          Unpaid              Paid             Incurred           Unpaid          Expenses             Fees
         1.    Fire
         2.1   Allied lines
         2.2   Multiple peril crop
         2.3   Federal flood
         3.    Farmowners multiple peril
         4.    Homeowners multiple peril
         5.1   Commercial multiple peril (non-liability portion)                        5,218                2,211                             3,007                                                                                                                           1,044
         5.2   Commercial multiple peril (liability portion)                       12,367,129            7,747,413                         4,619,716               63,127       7,195,554         7,132,427               29,072          629,618           600,546        2,459,537
         6.    Mortgage guaranty
         8.    Ocean marine                                                            105,117               39,740                             65,377                               23,404            23,404                                1,762             1,762             26,279
         9.    Inland marine
        10.    Financial guaranty
        11.    Medical malpractice
        12.    Earthquake
        13.    Group accident and health (b)
        14.    Credit A & H (group and individual)
        15.1   Collectively renewable A & H (b)
        15.2   Non-cancelable A & H (b)
20.GT




        15.3   Guaranteed renewable A & H (b)
        15.4   Non-renewable for stated reasons only (b)
        15.5   Other accident only
        15.6   All other A & H (b)
        15.7   Federal employees health benefits program premium (b)
        16.    Workers' compensation
        17.    Other liability                                                    219,240,960          192,901,308                       108,653,186         18,266,247        72,068,619       256,612,695          8,532,100         22,778,267        26,515,898       35,940,689
        18.    Products liability
        19.1   Private passenger auto no-fault (personal injury protection)
        19.2   Other private passenger auto liability
        19.3   Commercial auto no-fault (personal injury protection)
        19.4   Other commercial auto liability
        21.1   Private passenger auto physical damage
        21.2   Commercial auto physical damage
        22.    Aircraft (all perils)
        23.    Fidelity
        24.    Surety
        26.    Burglary and theft
        27.    Boiler and machinery
        28.    Credit
        33.    Aggregate write-ins for other lines of business
        34.    TOTALS (a)                                                         231,718,424          200,690,672                       113,341,286         18,329,374        79,287,577       263,768,526          8,561,173         23,409,647        27,118,206       38,427,549
               DETAILS OF WRITE-INS
        3301.
        3302.
        3303.
        3398. Summary of remaining write-ins for Line 33 from overflow page
        3399. Totals (Lines 3301 through 3303 plus 3398) (Line 33 above)
          (a) Finance and service charges not included in Lines 1 to 34
        $                                                                                     .
          (b) For health business on indicated lines report: Number of persons insured under PPO managed care products                           and number of persons insured under indemnity only products
                                  ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                          SCHEDULE A - VERIFICATION BETWEEN YEARS
                                                                              Real Estate


 1. Book/adjusted carrying value, December 31, prior year




                                                             NONE
 2. Increase (decrease) by adjustment:
    2.1 Totals, Part 1, Column 11
    2.2 Totals, Part 3, Column 7
 3. Cost of acquired, (Totals, Part 2, Column 6, net of encumbrances (Column 7) and net of additions and permanent improvements (Column 9)
 4. Cost of additions and permanent improvements:
    4.1 Totals, Part 1, Column 14
    4.2 Totals, Part 3, Column 9
 5. Total profit (loss) on sales, Part 3, Column 14
 6. Increase (decrease) by foreign exchange adjustment:
    6.1 Totals, Part 1, Column 12
    6.2 Totals, Part 3, Column 8
 7. Amounts received on sales, Part 3, Column 11 and Part 1, Column 13
 8. Book/adjusted carrying value at end of current period
 9. Total valuation allowance
10. Subtotal (Lines 8 plus 9)
11. Total nonadmitted amounts
12. Statement value, current period (Page 2, real estate lines, Net Admitted Assets column)




                          SCHEDULE B - VERIFICATION BETWEEN YEARS
                                                                           Mortgage Loans




                                                             NONE
 1. Book value/recorded investment excluding accrued interest of mortgages owned, December 31 of prior year
 2. Amount loaned during year:
    2.1 Actual cost at time of acquisitions
    2.2 Additional investment made after acquisitions
 3. Accrual of discount and mortgage interest points and commitment fees
 4. Increase (decrease) by adjustment
 5. Total profit (loss) on sale
 6. Amounts paid on account or in full during the year
 7. Amortization of premium
 8. Increase (decrease) by foreign exchange adjustment
 9. Book value/recorded investment excluding accrued interest on mortgages owned at end of current period
10. Total valuation allowance
11. Subtotal (Lines 9 plus 10)
12. Total nonadmitted amounts
13. Statement value of mortgages owned at end of current period (Page 2, mortgage lines, Net Admitted Assets column)




                       SCHEDULE BA - VERIFICATION BETWEEN YEARS
                                                                      Long-Term Invested Assets




                                                             NONE
 1. Book/adjusted carrying value of long-term invested assets owned, December 31 of prior year
 2. Cost of acquisitions during year:
    2.1 Actual cost at time of acquisitions
    2.2 Additional investment made after acquisitions
 3. Accrual of discount
 4. Increase (decrease) by adjustment
 5. Total profit (loss) on sale
 6. Amounts paid on account or in full during the year
 7. Amortization of premium
 8. Increase (decrease) by foreign exchange adjustment
 9. Book/adjusted carrying value of long-term invested assets at end of current period
10. Total valuation allowance
11. Subtotal (Lines 9 plus 10)
12. Total nonadmitted amounts
13. Statement value of long-term invested assets at end of current period (Page 2, Line 7, Column 3)




                                                                                  21
                                  ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                        SCHEDULE D - SUMMARY BY COUNTRY
                                                    Long-Term Bonds and Stocks OWNED December 31 of Current Year
                                                                                        1                 2                                     3                     4
                                                                                 Book/Adjusted
                                      Description                                Carrying Value      Fair Value                            Actual Cost        Par Value of Bonds
                      BONDS                          1.   United States                            16,721,587            16,565,180             16,806,452            15,686,909
Governments                                          2.   Canada
(Including all obligations guaranteed                3.   Other Countries                             157,850               162,000                157,875               150,000
by governments)                                      4.   Totals                                   16,879,437            16,727,180             16,964,327            15,836,909
States, Territories and Possessions                  5.   United States                               528,875               534,255                524,368               530,000
    (Direct and guaranteed)                          6.   Canada
                                                     7.   Other Countries
                                                     8.   Totals                                     528,875                534,255                 524,368               530,000
Political Subdivisions of States,                    9.   United States                              323,303                337,090                 319,894               325,000
    Territories and Possessions                     10.   Canada
       (Direct and guaranteed)                      11.   Other Countries
                                                    12.   Totals                                     323,303                337,090                 319,894               325,000
Special revenue and special assessment
   obligations and all non-guaranteed               13.   United States                            41,200,601            40,875,038             41,248,927            41,342,471
   obligations of agencies and authorities of       14.   Canada
   governments and their political subdivisions     15.   Other Countries

                                                    16.   Totals                                   41,200,601            40,875,038             41,248,927            41,342,471
Public Utilities (unaffiliated)                     17.   United States                             2,212,219             2,253,165              2,220,199             2,205,000
                                                    18.   Canada
                                                    19.   Other Countries
                                                    20.   Totals                                    2,212,219             2,253,165              2,220,199             2,205,000
Industrial and Miscellaneous and Credit Tenant      21.   United States                            40,958,621            40,751,030             41,196,378            40,487,088
    Loans (unaffiliated)                            22.   Canada                                      643,763               653,644                646,260               635,000
                                                    23.   Other Countries                           3,043,123             3,018,755              3,071,712             2,935,000
                                                    24.   Totals                                   44,645,507            44,423,429             44,914,351            44,057,088
Parent, Subsidiaries and Affiliates                 25.   Totals
                                                    26.   Total Bonds                          105,789,943              105,150,156            106,192,065           104,296,468
              PREFERRED STOCKS                      27.   United States
Public Utilities (unaffiliated)                     28.   Canada
                                                    29.   Other Countries
                                                    30.   Totals
Banks, Trust and Insurance Companies                31.   United States
   (unaffiliated)                                   32.   Canada
                                                    33.   Other Countries
                                                    34.   Totals
Industrial and Miscellaneous (unaffiliated)         35.   United States
                                                    36.   Canada
                                                    37.   Other Countries
                                                    38.   Totals
Parent, Subsidiaries and Affiliates                 39.   Totals
                                                    40.   Total Preferred Stocks
                COMMON STOCKS                       41.   United States
Public Utilities (unaffiliated)                     42.   Canada
                                                    43.   Other Countries
                                                    44.   Totals
 Banks, Trust and Insurance Companies               45.   United States
   (unaffiliated)                                   46.   Canada
                                                    47.   Other Countries
                                                    48.   Totals
Industrial and Miscellaneous (unaffiliated)         49.   United States
                                                    50.   Canada
                                                    51.   Other Countries
                                                    52.   Totals
Parent, Subsidiaries and Affiliates                 53.   Totals
                                                    54.   Total Common Stocks
                                                    55.   Total Stocks
                                                    56.   Total Bonds and Stocks               105,789,943              105,150,156            106,192,065



                                  SCHEDULE D - VERIFICATION BETWEEN YEARS
                                                                               Bonds and Stocks

  1. Book/adjusted carrying value of bonds and stocks, prior
     year                                                                   88,940,625        7.    Amortization of premium                                               353,148
  2. Cost of bonds and stocks acquired, Column 7, Part 3                    29,292,165        8.    Foreign Exchange Adjustment:
  3. Accrual of discount                                                       137,614              8.1 Column 15, Part 1
  4. Increase (decrease) by adjustment:                                                             8.2 Column 19, Part 2, Sec. 1
     4.1 Columns 12 - 14, Part 1                     (21,671)                                       8.3 Column 16, Part 2, Sec. 2
     4.2 Columns 15 - 17, Part 2, Sec. 1                                                            8.4 Column 15, Part 4
     4.3 Column 15, Part 2, Sec. 2                                                         9.       Book/adjusted carrying value at end of current period             105,789,944
     4.4 Columns 11 - 13, Part 4                                              (21,671)    10.       Total valuation allowance
  5. Total gain (loss), Column 19, Part 4                                     (44,104)    11.       Subtotal (Lines 9 plus 10)                                        105,789,944
  6. Deduct consideration for bonds and stocks disposed of                                12.       Total nonadmitted amounts
     Column 7, Part 4                                                       12,161,537    13.       Statement value of bonds and stocks, current period               105,789,944




                                                                                         22
                                                                                     ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                 SCHEDULE D - PART 1A - SECTION 1
                                                                 Quality and Maturity Distribution of All Bonds Owned December 31, at Book/Adjusted Carrying Values by Major Types of Issues and NAIC Designations
                                                    1                    2                      3                    4                  5                   6                     7                     8                9                 10                     11
                                                                Over 1 Year Through Over 5 Years Through       Over 10 Years                                                 Col. 6 as a       Total from Col. 6   % From Col. 7     Total Publicly     Total Privately Placed
     Quality Rating per the NAIC Designation     1 Year or Less       5 Years               10 Years         Through 20 Years    Over 20 Years      Total Current Year     % of Line 10.7         Prior Year        Prior Year          Traded                    (a)
      1. U.S. Governments, Schedules D & DA (Group 1)
       1.1 Class 1                                       3,624,348          3,765,507           5,918,967           430,302            2,982,464           16,721,587                15.7           32,202,109                31.2         16,721,587
       1.2 Class 2
       1.3 Class 3
       1.4 Class 4
       1.5 Class 5
       1.6 Class 6
       1.7 Totals                                        3,624,348          3,765,507           5,918,967           430,302            2,982,464           16,721,587                15.7           32,202,109                31.2         16,721,587
      2. All Other Governments, Schedules D & DA (Group 2)
       2.1 Class 1
       2.2 Class 2                                                                                                                       157,850              157,850                 0.1                                                     157,850
       2.3 Class 3
       2.4 Class 4
       2.5 Class 5
       2.6 Class 6
       2.7 Totals                                                                                                                        157,850              157,850                 0.1                                                     157,850
      3. States, Territories and Possessions etc., Guaranteed, Schedules D & DA (Group 3)
       3.1 Class 1                                                            503,903                                24,972                                   528,875                 0.5              528,214                 0.5            528,875
       3.2 Class 2
       3.3 Class 3
       3.4 Class 4
23




       3.5 Class 5
       3.6 Class 6
       3.7 Totals                                                             503,903                                24,972                                   528,875                 0.5              528,214                 0.5            528,875
      4. Political Subdivisions of States, Territories and Possessions, Guaranteed, Schedules D & DA (Group 4)
       4.1 Class 1                                                            323,303                                                                         323,303                 0.3              322,750                 0.3            323,303
       4.2 Class 2
       4.3 Class 3
       4.4 Class 4
       4.5 Class 5
       4.6 Class 6
       4.7 Totals                                                             323,303                                                                         323,303                 0.3              322,750                 0.3            323,303
      5. Special Revenue & Special Assessment Obligations etc., Non-Guaranteed, Schedules D & DA (Group 5)
       5.1 Class 1                                       6,313,572         17,658,800          11,976,757         4,660,341              591,131           41,200,601                39.0           32,445,602                31.6         41,200,601
       5.2 Class 2
       5.3 Class 3
       5.4 Class 4
       5.5 Class 5
       5.6 Class 6
       5.7 Totals                                        6,313,572         17,658,800          11,976,757         4,660,341              591,131           41,200,601                39.0           32,445,602                31.6         41,200,601
                                                                                     ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                    SCHEDULE D - PART 1A - SECTION 1 (continued)
                                                                     Quality and Maturity Distribution of All Bonds Owned December 31, at Book/Adjusted Carrying Values by Major Types of Issues and NAIC Designations
                                                        1                    2                      3                    4                  5                   6                     7                     8                9                  10                     11
                                                                    Over 1 Year Through Over 5 Years Through       Over 10 Years                                                 Col. 6 as a       Total from Col. 6   % From Col. 7      Total Publicly     Total Privately Placed
     Quality Rating per the NAIC Designation      1 Year or Less          5 Years               10 Years         Through 20 Years    Over 20 Years      Total Current Year     % of Line 10.7         Prior Year        Prior Year           Traded                    (a)
      6. Public Utilities (Unaffiliated), Schedules D & DA (Group 6)
       6.1 Class 1                                          124,905           1,159,834                651,998                                                   1,936,737                    1.8            1,732,025              1.8          1,833,690                103,047
       6.2 Class 2                                                                                     151,276                                 124,206             275,482                    0.3              380,465              0.4            275,482
       6.3 Class 3
       6.4 Class 4
       6.5 Class 5
       6.6 Class 6
       6.7 Totals                                           124,905           1,159,834                803,274                                 124,206           2,212,219                    2.1            2,112,490              2.2          2,109,172                103,047
      7. Industrial & Miscellaneous (Unaffiliated), Schedules D & DA (Group 7)
       7.1 Class 1                                       5,005,902           16,251,522            13,698,348               482,548          1,266,406          36,704,727                   34.7          29,896,850              27.2         33,035,206              3,669,521
       7.2 Class 2                                          126,238           2,892,614              3,574,361              394,011            953,557           7,940,780                    7.5            6,244,154              7.0          7,593,667                347,113
       7.3 Class 3
       7.4 Class 4
       7.5 Class 5
       7.6 Class 6
       7.7 Totals                                        5,132,140           19,144,136            17,272,708               876,559          2,219,963          44,645,507                   42.2          36,141,004              34.2         40,628,873              4,016,635
      8. Credit Tenant Loans, Schedules D & DA (Group 8)
       8.1 Class 1
       8.2 Class 2
       8.3 Class 3
       8.4 Class 4
24




       8.5 Class 5
       8.6 Class 6
       8.7 Totals
      9. Parent, Subsidiaries and Affiliates, Schedules D & DA (Group 9)
       9.1 Class 1
       9.2 Class 2
       9.3 Class 3
       9.4 Class 4
       9.5 Class 5
       9.6 Class 6
       9.7 Totals
                                                                                              ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                             SCHEDULE D - PART 1A - SECTION 1 (continued)
                                                                       Quality and Maturity Distribution of All Bonds Owned December 31, at Book/Adjusted Carrying Values by Major Types of Issues and NAIC Designations
                                                         1                     2                      3                    4                  5                   6                     7                     8                9                                           10                     11
                                                                      Over 1 Year Through Over 5 Years Through       Over 10 Years                                                 Col. 6 as a       Total from Col. 6   % From Col. 7                               Total Publicly     Total Privately Placed
     Quality Rating per the NAIC Designation           1 Year or Less       5 Years               10 Years         Through 20 Years    Over 20 Years      Total Current Year     % of Line 10.7         Prior Year        Prior Year                                    Traded                    (a)
        10. Total Bonds Current Year
       10.1 Class 1                                           15,068,728                39,662,869              32,246,070              5,598,163          4,840,001            97,415,831                     92.1             XXX                   XXX                    93,643,263              3,772,568
       10.2 Class 2                                              126,238                 2,892,614               3,725,637                394,011          1,235,612             8,374,112                      7.9             XXX                   XXX                     8,026,999                347,113
       10.3 Class 3                                                                                                                                                                                                             XXX                   XXX
       10.4 Class 4                                                                                                                                                                                                             XXX                   XXX
                                                                                                                                                                       (c)
       10.5 Class 5                                                                                                                                                                                                             XXX                   XXX
                                                                                                                                                                       (c)
       10.6 Class 6                                                                                                                                                                                                             XXX                   XXX
       10.7 Totals                                            15,194,966                42,555,483              35,971,707              5,992,174          6,075,614 (b)       105,789,943                    100.0             XXX                   XXX                   101,670,262              4,119,681
       10.8 Line 10.7 as a % of Col. 6                               14.4                      40.2                    34.0                   5.7                 5.7                100.0             XXX                      XXX                   XXX                          96.1                    3.9
        11. Total Bonds Prior Year
       11.1 Class 1                                           21,099,594                27,039,329              27,561,281             12,504,940          8,922,406           XXX                     XXX                       97,127,549                   92.6           94,043,264              3,084,285
       11.2 Class 2                                                                      1,454,421               4,722,382                129,094            318,721           XXX                     XXX                        6,624,618                    7.4            5,758,750                865,868
       11.3 Class 3                                                                                                                                                            XXX                     XXX
       11.4 Class 4                                                                                                                                                            XXX                     XXX
                                                                                                                                                                                                                      (c)
       11.5 Class 5                                                                                                                                                            XXX                     XXX
                                                                                                                                                                                                                      (c)
       11.6 Class 6                                                                                                                                                            XXX                     XXX
       11.7 Totals                                                                                                                                                                                                    (b)
                                                              21,099,594                28,493,750              32,283,663             12,634,034          9,241,127           XXX                     XXX                     103,752,168                   100.0           99,802,014              3,950,154
       11.8 Line 11.7 as a % of Col. 8                               20.3                      27.5                    31.1                  12.2                 8.9          XXX                     XXX                            100.0           XXX                          96.2                    3.8
        12. Total Publicly Traded Bonds
       12.1 Class 1                                           14,078,398                39,237,890              30,328,284              5,365,402          4,633,289            93,643,263                     88.5              94,043,264                   88.6           93,643,263            XXX
       12.2 Class 2                                              126,238                 2,794,801               3,476,336                394,011          1,235,612             8,026,999                      7.6               5,758,750                    6.9            8,026,999            XXX
       12.3 Class 3                                                                                                                                                                                                                                                                                XXX
       12.4 Class 4                                                                                                                                                                                                                                                                                XXX
       12.5 Class 5                                                                                                                                                                                                                                                                                XXX
25




       12.6 Class 6                                                                                                                                                                                                                                                                                XXX
       12.7 Totals                                            14,204,636                42,032,691              33,804,620              5,759,413          5,868,902           101,670,262                     96.1              99,802,014                   95.5          101,670,262            XXX
       12.8 Line 12.7 as a % of Col. 6                               14.0                      41.3                    33.2                   5.7                 5.8                100.0             XXX                      XXX                   XXX                         100.0            XXX
       12.9 Line 12.7 as a % of Line 10.7,
                Col. 6, Section 10                                   13.4                      39.7                    32.0                   5.4                 5.6                 96.1             XXX                      XXX                   XXX                          96.1            XXX
        13. Total Privately Placed Bonds
       13.1 Class 1                                              990,330                   424,979               1,917,785                232,761            206,712             3,772,567                      3.6               3,084,285                    4.0          XXX                      3,772,568
       13.2 Class 2                                                                         97,812                 249,301                                                         347,113                      0.3                 865,868                    0.5          XXX                        347,113
       13.3 Class 3                                                                                                                                                                                                                                                         XXX
       13.4 Class 4                                                                                                                                                                                                                                                         XXX
       13.5 Class 5                                                                                                                                                                                                                                                         XXX
       13.6 Class 6                                                                                                                                                                                                                                                         XXX
       13.7 Totals                                               990,330                   522,792               2,167,086                232,761            206,712             4,119,680                      3.9               3,950,154                    4.5          XXX                      4,119,681
       13.8 Line 13.7 as a % of Col. 6                               24.0                      12.7                    52.6                   5.7                 5.0                100.0             XXX                      XXX                   XXX                   XXX                          100.0
       13.9 Line 13.7 as a % of Line 10.7,
                Col. 6, Section 10                                    0.9                       0.5                     2.0                   0.2                 0.2                  3.9             XXX                      XXX                   XXX                   XXX                            3.9
     (a) Includes $              2,974,010 freely tradable under SEC Rule 144 or qualified for resale under SEC Rule 144A.
     (b) Includes $                                                                                                                                            , current year,                        prior year of bonds with Z* designations. The letter “Z” means the NAIC designation was not assigned by
                                                current year, $                              prior year of bonds with Z designations and $                    $                                      the
          Securities Valuation Office (SVO) at the date of the statement. “Z*” means the SVO could not evaluate the obligation because valuation procedures for the security class is under regulatory review.
     (c) Includes $                                                                          prior year of bonds with 5* designations and                      , current year,
                                                current year, $                             $                                                                 $                                       prior year of bonds with 6* designations. “5*” means the NAIC designation was assigned by the SVO in
     reliance on the insurer’s certification that the issuer is current in all principal and interest payments. “6*” means the NAIC designation was assigned by the SVO due to inadequate certification of principal and interest payments.
                                                                                                  ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                                SCHEDULE D - PART 1A - SECTION 2
                                                                                         Maturity Distribution of All Bonds Owned December 31, at Book/Adjusted Carrying Values by Major Type and Subtype of Issues
                                                                                               1                    2                3                  4                 5                 6                 7                8                9               10                11
                                                                                                               Over 1 Year      Over 5 Years      Over 10 Years                                        Col. 6 as a %   Total from Col 6   % From Col. 7   Total Publicly    Total Privately
                                 Distribution by Type                                    1 Year or Less      Through 5 Years  Through 10 Years Through 20 Years     Over 20 Years   Total Current Year of Line 10.7       Prior Year       Prior Year        Traded            Placed
     1. U.S. Governments, Schedules D & DA (Group 1)
      1.1 Issuer Obligations                                                                     3,008,913        2,229,652         5,092,721                            2,937,949         13,269,235           12.5         27,936,497           26.9         13,269,235
      1.2 Single Class Mortgage-Backed/Asset-Backed Securities                                     615,434        1,535,855           826,247            430,302            44,515          3,452,353            3.3          4,265,612            4.1          3,452,353
      1.7 Totals                                                                                 3,624,348        3,765,507         5,918,968            430,302         2,982,464         16,721,588           15.7         32,202,109           31.0         16,721,588
     2. All Other Governments, Schedules D & DA (Group 2)
      2.1 Issuer Obligations                                                                                                                                               157,850            157,850            0.1                                              157,850
      2.2 Single Class Mortgage-Backed/Asset-Backed Securities
          MULTI-CLASS RESIDENTIAL MORTGAGE-BACKED SECURITIES
      2.3 Defined
      2.4 Other
          MULTI-CLASS COMMERCIAL MORTGAGE-BACKED/ASSET-
          BACKED SECURITIES
      2.5 Defined
      2.6 Other
      2.7 Totals                                                                                                                                                           157,850            157,850            0.1                                              157,850
     3. States, Territories, and Possessions Guaranteed, Schedules D & DA (Group 3)
      3.1 Issuer Obligations                                                                                       503,903                                24,972                              528,875            0.5            528,214            0.5            528,875
      3.2 Single Class Mortgage-Backed/Asset-Backed Securities
          MULTI-CLASS RESIDENTIAL MORTGAGE-BACKED SECURITIES
      3.3 Defined
      3.4 Other
          MULTI-CLASS COMMERCIAL MORTGAGE-BACKED/ASSET-
          BACKED SECURITIES
      3.5 Defined
      3.6 Other
26




      3.7 Totals                                                                                                   503,903                                24,972                              528,875            0.5            528,214            0.5            528,875
     4. Political Subdivisions of States, Territories and Possessions, Guaranteed, Schedules D & DA (Group 4)
      4.1 Issuer Obligations                                                                                       323,303                                                                    323,303            0.3            322,750            0.3            323,303
      4.2 Single Class Mortgage-Backed/Asset-Backed Securities
          MULTI-CLASS RESIDENTIAL MORTGAGE-BACKED SECURITIES
      4.3 Defined
      4.4 Other
          MULTI-CLASS COMMERCIAL MORTGAGE-BACKED/ASSET-
          BACKED SECURITIES
      4.5 Defined
      4.6 Other
      4.7 Totals                                                                                                   323,303                                                                    323,303            0.3            322,750            0.3            323,303
     5. Special Revenue & Special Assessment Obligations etc., Non-Guaranteed, Schedules D & DA (Group 5)
      5.1 Issuer Obligations                                                                       152,349                          1,188,782                                               1,341,131            1.3          1,497,371            1.5          1,341,131
      5.2 Single Class Mortgage-Backed/Asset-Backed Securities                                   5,585,537       15,866,850         9,410,392          4,408,137           591,131         35,862,047           33.9         27,277,182           26.5         35,862,047
          MULTI-CLASS RESIDENTIAL MORTGAGE-BACKED SECURITIES
      5.3 Defined                                                                                  485,247        1,256,424           107,675                                               1,849,346            1.7          3,671,049            1.1          1,849,346
      5.4 Other
          MULTI-CLASS COMMERCIAL MORTGAGE-BACKED/ASSET-
          BACKED SECURITIES
      5.5 Defined                                                                                   90,440         535,525          1,269,908            252,204                            2,148,077            2.0                               2.4          2,148,077
      5.6 Other
      5.7 Totals                                                                                 6,313,572       17,658,800        11,976,757          4,660,341           591,131         41,200,601           39.0         32,445,602           31.6         41,200,601
                                                                                          ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                         SCHEDULE D - PART 1A - SECTION 2 (continued)
                                                                                  Maturity Distribution of All Bonds Owned December 31, at Book/Adjusted Carrying Values by Major Type and Subtype of Issues
                                                                   1                       2                      3                  4                   5                    6                 7                  8                 9               10                 11
                                                                                  Over 1 Year Through       Over 5 Years       Over 10 Years                                               Col. 6 as a    Total from Col. 6    % From Col. 7   Total Publicly     Total Privately
                       Distribution by Type                   1 Year or Less            5 Years           Through 10 Years   Through 20 Years      Over 20 Years      Total Current Year % of Line 10.7      Prior Year         Prior Year        Traded             Placed
     6. Public Utilities (Unaffiliated), Schedules D & DA (Group 6)
        6.1 Issuer Obligations                                          124,905            1,159,834              803,274                                   124,206            2,212,219            2.1            2,112,490            2.2           2,109,172             103,047
        6.2 Single Class Mortgage-Backed/Asset-Based
            Securities
            MULTI-CLASS RESIDENTIAL MORTGAGE-
            BACKED SECURITIES
        6.3 Defined
        6.4 Other
            MULTI-CLASS COMMERCIAL MORTGAGE-
            BACKED/ASSET-BACKED SECURITIES
        6.5 Defined
        6.6 Other
        6.7 Totals                                                      124,905            1,159,834              803,274                                   124,206            2,212,219            2.1            2,112,490            2.2           2,109,172             103,047
     7. Industrial & Miscellaneous (Unaffiliated), Schedules D & DA (Group 7)
        7.1 Issuer Obligations                                          352,755            7,141,108            8,682,678              876,559            2,219,963           19,273,064           18.2           18,253,287           17.0          16,880,675          2,392,389
        7.2 Single Class Mortgage-Backed/Asset-Based
            Securities                                                                                                                                                                                               159,854
            MULTI-CLASS RESIDENTIAL MORTGAGE-
            BACKED SECURITIES
        7.3 Defined                                                  2,271,528             5,197,581              332,316                                                      7,801,424            7.4            3,802,019            4.8           7,801,424
        7.4 Other                                                                                                                                                                                                                       0.1
            MULTI-CLASS COMMERCIAL MORTGAGE-
27




            BACKED/ASSET-BACKED SECURITIES
        7.5 Defined                                                      25,016            1,549,324            6,678,418                                                      8,252,758            7.8            9,452,007            8.1           8,252,758
        7.6 Other                                                    2,482,842             5,256,122            1,579,297                                                      9,318,261            8.8            4,473,837            4.3           7,694,016          1,624,246
        7.7 Totals                                                   5,132,140            19,144,136           17,272,708              876,559            2,219,963           44,645,507           42.2           36,141,004           34.2          40,628,873          4,016,635
     8. Credit Tenant Loans, Schedules D & DA (Group 8)
        8.1 Issuer Obligations
        8.7 Totals
     9. Parents, Subsidiaries and Affiliates, Schedules D & DA (Group 9)
        9.1 Issuer Obligations
        9.2 Single Class Mortgage-Backed/Asset-Based
            Securities
            MULTI-CLASS RESIDENTIAL MORTGAGE-
            BACKED SECURITIES
        9.3 Defined
        9.4 Other
            MULTI-CLASS COMMERCIAL MORTGAGE-
            BACKED/ASSET-BACKED SECURITIES
        9.5 Defined
        9.6 Other
        9.7 Totals
                                                                       ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                     SCHEDULE D - PART 1A - SECTION 2 (continued)
                                                              Maturity Distribution of All Bonds Owned December 31, at Book/Adjusted Carrying Values by Major Type and Subtype of Issues
                                                                                       1               2               3               4               5                6                7              8               9                 10               11
                                                                                                  Over 1 Year    Over 5 Years    Over 10 Years                        Total       Col. 6 as a % Total From Col. 6 % From Col. 7     Total Publicly   Total Privately
                                        Distribution by Type                    1 Year or Less Through 5 Years Through 10 Years Through 20 Years Over 20 Years    Current Year     of Line 10.7    Prior Year      Prior Year          Traded           Placed
     10. Total Bonds Current Year
      10.1 Issuer Obligations                                                      3,638,923       11,357,800       15,767,455          901,531       5,439,968       37,105,677             35.0      XXX             XXX             34,610,241         2,495,436
      10.2 Single Class Mortgage-Backed/Asset-Backed Securities                    6,200,971       17,402,705       10,236,639        4,838,439         635,646       39,314,400             37.2      XXX             XXX             39,314,400
            MULTI-CLASS RESIDENTIAL MORTGAGE-BACKED SECURITIES
      10.3 Defined                                                                 2,756,775        6,454,005          439,991                                         9,650,771             9.1       XXX             XXX              9,650,771
      10.4 Other                                                                                                                                                                                       XXX             XXX
            MULTI-CLASS COMMERCIAL MORTGAGE-BACKED/ASSET-BACKED SECURITIES
      10.5 Defined                                                                   115,456        2,084,850        7,948,325          252,204                       10,400,835           9.8         XXX             XXX             10,400,835
      10.6 Other                                                                   2,482,842        5,256,122        1,579,297                                         9,318,261           8.8         XXX             XXX              7,694,016         1,624,246
      10.7 Totals                                                                 15,194,966       42,555,482       35,971,707        5,992,174       6,075,614      105,789,944         100.0         XXX             XXX            101,670,263         4,119,682
      10.8 Line 10.7 as a % of Col. 6                                                   14.4             40.2             34.0              5.7             5.7            100.0       XXX             XXX             XXX                   96.1               3.9
     11. Total Bonds Prior Year
      11.1 Issuer Obligations                                                     15,289,650       10,830,401       16,649,655        4,218,443       3,662,458         XXX            XXX            50,650,607             48.5      47,680,301         2,970,308
      11.2 Single Class Mortgage-Backed/Asset-Backed Securities                    3,409,726        9,912,793        7,030,621        6,770,417       4,579,090         XXX            XXX            31,702,648             30.7      31,702,648
            MULTI-CLASS RESIDENTIAL MORTGAGE-BACKED SECURITIES
      11.3 Defined                                                                 1,221,421        2,597,450        1,009,448        1,645,171         999,579         XXX            XXX             7,473,068             6.0        7,473,068
      11.4 Other                                                                                                                                                        XXX            XXX                                   0.1
            MULTI-CLASS COMMERCIAL MORTGAGE-BACKED/ASSET-BACKED SECURITIES
      11.5 Defined                                                                   546,172        1,625,964        7,279,870                2                         XXX            XXX             9,452,007           10.5         9,452,007
      11.6 Other                                                                     632,623        3,527,143          314,070                                          XXX            XXX             4,473,837            4.3         3,493,991           979,846
      11.7 Totals                                                                 21,099,592       28,493,750       32,283,663       12,634,034       9,241,127         XXX            XXX           103,752,167         100.0         99,802,015         3,950,154
      11.8 Line 11.7 as a % of Col. 8                                                   20.3             27.5             31.1             12.2             8.9         XXX            XXX                 100.0       XXX                   96.2               3.8
     12. Total Publicly Traded Bonds
      12.1 Issuer Obligations                                                      3,638,923       10,848,660       14,220,632          668,770       5,233,256       34,610,241             32.7     47,680,301             45.9      34,610,241          XXX
28




      12.2 Single Class Mortgage-Backed/Asset-Backed Securities                    6,200,971       17,402,705       10,236,639        4,838,439         635,646       39,314,400             37.2     31,702,648             30.7      39,314,400          XXX
            MULTI-CLASS RESIDENTIAL MORTGAGE-BACKED SECURITIES
      12.3 Defined                                                                 2,756,775        6,454,005          439,991                                         9,650,771             9.1       7,473,068             6.0        9,650,771          XXX
      12.4 Other                                                                                                                                                                                                             0.1                           XXX
            MULTI-CLASS COMMERCIAL MORTGAGE-BACKED/ASSET-BACKED SECURITIES
      12.5 Defined                                                                   115,456        2,084,850        7,948,325          252,204                       10,400,835              9.8      9,452,007             10.5      10,400,835          XXX
      12.6 Other                                                                   1,492,512        5,242,471          959,033                                         7,694,016              7.3      3,493,991              2.3       7,694,016          XXX
      12.7 Totals                                                                 14,204,636       42,032,691       33,804,620        5,759,413       5,868,902      101,670,263             96.1     99,802,015             95.5     101,670,263          XXX
      12.8 Line 12.7 as a % of Col. 6                                                   14.0             41.3             33.2              5.7             5.8            100.0       XXX              XXX            XXX                  100.0          XXX
      12.9 Line 12.7 as a % of Line 10.7, Col. 6, Section 10                            13.4             39.7             32.0              5.4             5.6             96.1       XXX              XXX            XXX                   96.1          XXX
     13. Total Privately Placed Bonds
      13.1 Issuer Obligations                                                                         509,140        1,546,822          232,761         206,712        2,495,435             2.4       2,970,308             2.5         XXX              2,495,435
      13.2 Single Class Mortgage-Backed/Asset-Backed Securities                                                                                                                                                                          XXX
            MULTI-CLASS RESIDENTIAL MORTGAGE-BACKED SECURITIES
      13.3 Defined                                                                                                                                                                                                                       XXX
      13.4 Other                                                                                                                                                                                                                         XXX
            MULTI-CLASS COMMERCIAL MORTGAGE-BACKED/ASSET-BACKED SECURITIES
      13.5 Defined                                                                                                                                                                                                                       XXX
      13.6 Other                                                                     990,330           13,651          620,264                                         1,624,246             1.5         979,846             2.0         XXX              1,624,246
      13.7 Totals                                                                    990,330          522,792        2,167,086          232,761         206,712        4,119,681             3.9       3,950,154             4.5         XXX              4,119,681
      13.8 Line 13.7 as a % of Col. 6                                                   24.0             12.7             52.6              5.7             5.0            100.0       XXX              XXX            XXX               XXX                  100.0
      13.9 Line 13.7 as a % of Line 10.7, Col. 6, Section 10                             0.9              0.5              2.0              0.2             0.2              3.9       XXX              XXX            XXX               XXX                    3.9
                                                                                               ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company



                                                                                 SCHEDULE DA - PART 2 - VERIFICATION BETWEEN YEARS
                                                                                                                       Short-Term Investments
                                                                                                                                                 1                    2                      3                   4                         5

                                                                                                                                                                                                          Other Short-term      Investments in Parent,
                                                                                                                                                Total               Bonds              Mortgage Loans   Investment Assets(a)   Subsidiaries and Affiliates

         1. Book/adjusted carrying value, prior year                                                                                                 13,952,065           13,952,065

         2. Cost of short-term investments acquired                                                                                                     4,937,981         4,937,981

         3. Increase (decrease) by adjustment                                                                                                             76,878             76,878

         4. Increase (decrease) by foreign exchange adjustment

         5. Total profit (loss) on disposal of short-term investments                                                                                       (150)              (150)

         6. Consideration received on disposal of short-term investments                                                                             18,966,775           18,966,775

         7. Book/adjusted carrying value, current year

         8. Total valuation allowance
29




         9. Subtotal (Lines 7 plus 8)

        10. Total nonadmitted amounts

        11. Statement value (Lines 9 minus 10)

        12. Income collected during year                                                                                                                  76,878             76,878

        13. Income earned during year                                                                                                                     76,878             76,878

     (a) Indicate the category of such assets, for example, joint ventures, transportation equipment:
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




                 Schedule DB - Part A - VBY

                         NONE
                 Schedule DB - Part B - VBY

                         NONE
                 Schedule DB - Part C - VBY

                         NONE
                 Schedule DB - Part D - VBY

                         NONE
                 Schedule DB - Part E - VBY

                         NONE
              Schedule DB - Part F - Section 1

                         NONE
              Schedule DB - Part F - Section 2

                         NONE
                     Schedule F - Part 1

                         NONE
                     Schedule F - Part 2

                         NONE




                      30, 31, 32, 33, 34, 35
                                                                                               ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                                                 SCHEDULE F - PART 3
                                                                                                                        Ceded Reinsurance as of December 31, Current Year (000 Omitted)
          1              2                                3                                4               5            6                                              Reinsurance Recoverable On                                                   Reinsurance Payable         18          19
                                                                                                     Reinsurance                   7            8          9           10           11         12              13           14           15           16          17
                                                                                                      Contracts                                                                                                                                                             Net Amount
                                                                                                     Ceding 75%                                                                                                                                                             Recoverable Funds Held
                                                                                                      or More of                                                                                                                                                   Other        From     By Company
       Federal         NAIC                                                                             Direct   Reinsurance                               Known Case Known Case                                         Contingent     Cols.        Ceded        Amounts    Reinsurers     Under
          ID         Company                                                          Domiciliary     Premiums    Premiums          Paid          Paid        Loss       LAE     IBNR Loss     IBNR LAE     Unearned      Commis-     7 thru 14     Balances       Due to    Cols. 15 - Reinsurance
       Number          Code                      Name of Reinsurer                    Jurisdiction     Written     Ceded           Losses         LAE       Reserves   Reserves   Reserves      Reserves    Premiums       sions       Totals       Payable      Reinsurers   [16 + 17]    Treaties
     13-3138390         42307   Navigators Insurance Company                               NY             2          231,718                                    30,033    14,911    233,909        27,867      113,341                    420,060       26,505                   393,555
       0299999 -   Authorized - Affiliates - U.S. Non-Pool                                                           231,718                                    30,033    14,911    233,909        27,867      113,341                    420,060       26,505                   393,555
       0499999 -   Total - Authorized - Affiliates                                                                   231,718                                    30,033    14,911    233,909        27,867      113,341                    420,060       26,505                   393,555
       0599998 -   Other U.S. Unaffil Insurers (Under $100,000)
       0899998 -   Authorized - Other Non-U.S. Insurers (Under $100,000)
       0999999 -   Total - Authorized                                                                                  231,718                                 30,033      14,911    233,909       27,867      113,341                   420,060        26,505                  393,555
       1399999 -   Total - Unauthorized - Affiliates
       1499998 -   Unauthorized - Other U.S. Unaffiliated Insurers (Under $100,000)
       1799998 -   Unauthorized - Other Non-U.S. Insurers (Under $100,000)
       1899999 -   Total - Unauthorized
       1999999 -   Total - Authorized and Unauthorized                                                                 231,718                                 30,033      14,911    233,909       27,867      113,341                   420,060        26,505                  393,555
       2099999 -   Total - Protected Cells
36




      9999999 Totals                                                                                                   231,718                                 30,033      14,911    233,909       27,867      113,341                   420,060        26,505                  393,555

     NOTE:         Report the five largest provisional commission rates included in the cedant’s reinsurance treaties. The commission rate to be reported is
              A.   by contract with ceded premium in excess of $50,000:
                                                                 1                                                         2                      3
                                                         Name of Reinsurer                                          Commission Rate       Ceded Premium
              1.
              2.
              3.
              4.
              5.
                 Report the five largest reinsurance recoverables reported in Column 15, due from any one reinsurer (based on the total recoverables, Line 9999999, Column 15),
              B. the amount of ceded premium, and indicate whether the recoverables are due from an affiliated insurer.
                                                               1                                                        2                     3                        4
                                                       Name of Reinsurer                                      Total Recoverables      Ceded Premiums              Affiliated
              1. Navigators Insurance Company                                                                      420,060,000.000            231,718,000     Yes [ X ] No [ ]
              2.                                                                                                                                              Yes [ ] No [ ]
              3.                                                                                                                                              Yes [ ] No [ ]
              4.                                                                                                                                              Yes [ ] No [ ]
              5.                                                                                                                                              Yes [ ] No [ ]
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




                     Schedule F - Part 4

                        NONE
                     Schedule F - Part 5

                        NONE
                     Schedule F - Part 6

                        NONE
                     Schedule F - Part 7

                        NONE




                         37, 38, 39, 40
                                 ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                                                               SCHEDULE F - PART 8
                                                     Restatement of Balance Sheet to Identify Net Credit for Reinsurance
                                                                                                                    1                       2                       3
                                                                                                              As Reported              Restatement              Restated
                                                                                                             (Net of Ceded)            Adjustments          (Gross of Ceded)

         ASSETS (Page 2, Col. 3)



     1. Cash and invested assets (Line 10)                                                                          106,960,170                                   106,960,170


     2. Premiums and considerations (Line 13)                                                                        26,505,457                                    26,505,457


     3. Reinsurance recoverable on loss and loss adjustment expense payments (Line 14.1)



     4   Funds held by or deposited with reinsured companies (Line 14.2)



     5. Other assets                                                                                                     877,285                                      877,285


     6. Net amount recoverable from reinsurers                                                                                             393,554,758            393,554,758


     7. Protected cell assets (Line 25)



     8. Totals (Line 26)                                                                                            134,342,913            393,554,758            527,897,671


         LIABILITIES (Page 3)



     9. Losses and loss adjustment expenses (Lines 1 through 3)                                                                            306,718,930            306,718,930


   10. Taxes, expenses, and other obligations (Lines 4 through 8)                                                        945,615                                      945,615


   11. Unearned premiums (Line 9)                                                                                                          113,341,286            113,341,286


   12. Advance Premiums (Line 10)



   13. Dividends declared and unpaid (Line 11.1 and 11.2)



   14. Ceded reinsurance premiums payable (net of ceded commissions) (Line 12)                                       26,505,457            (26,505,457)


   15. Funds held by company under reinsurance treaties (Line 13)



   16. Amounts withheld or retained by company for account of others (Line 14)



   17. Provision for reinsurance (Line 16)



   18. Other liabilities                                                                                                 118,899                                      118,899


   19. Total liabilities excluding protected cell business (Line 24)                                                 27,569,971            393,554,758            421,124,729


   20. Protected cell liabilities (Line 25)



   21. Surplus as regards policyholders (Line 35)                                                                   106,772,942            XXX                    106,772,942


   22. Totals (Line 36)                                                                                             134,342,913            393,554,758            527,897,671

NOTE: Is the restatement of this exhibit the result of grossing up balances ceded to affiliates under 100 percent reinsurance or pooling arrangements?    Yes [ X ] No [ ]
If yes, give full explanation:
NIC is party to a reinsurance agreement with Navigators Insurance Company, its parent, whereby 100% of NIC's written premium is ceded to Navigators.




                                                                                      41
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




                     Schedule H - Part 1

                        NONE
                     Schedule H - Part 2

                        NONE
                     Schedule H - Part 3

                        NONE
                     Schedule H - Part 4

                        NONE
                     Schedule H - Part 5

                        NONE




                           42, 43, 44
                                ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

             SCHEDULE P - ANALYSIS OF LOSSES AND LOSS EXPENSES
                       SCHEDULE P - PART 1 - SUMMARY
                                                                                              ($000 Omitted)
                            Premiums Earned                                                             Loss and Loss Expense Payments                                                                12
   Years in           1            2                  3                                            Defense and Cost       Adjusting and Other                               10           11
    Which                                                           Loss Payments                Containment Payments          Payments                                                            Number of
  Premiums                                                          4          5                     6           7          8            9                             Salvage     Total Net        Claims
Were Earned                                                                                                                                                              and      Paid (Cols.      Reported -
 and Losses      Direct and                       Net       Direct and                             Direct and                          Direct and                     Subrogation 4 - 5 + 6 -      Direct and
Were Incurred    Assumed           Ceded      (Cols. 1 - 2) Assumed                 Ceded          Assumed              Ceded          Assumed          Ceded          Received    7 + 8 - 9)      Assumed
    1. Prior        XXX            XXX              XXX                                                    775                775             330              330                                    XXX
    2. 1997          14,086          6,746            7,340         10,087              5,821             1,119               742              70              10                         4,703       XXX
    3. 1998          12,053          6,950            5,103         13,024              9,878             1,322              1,119             93              47                         3,395       XXX
    4. 1999           2,680          2,680                                771               771            912                912              36              36                                     XXX
    5. 2000           3,224          3,224                           3,124              3,124             1,719              1,719             92              92                                     XXX
    6. 2001           8,685          8,685                           4,446              4,446             3,013              3,013            333              333                                    XXX
    7. 2002          42,993         42,993                           7,271              7,271             6,103              6,103            539              539                                    XXX
    8. 2003          95,621         95,621                           7,003              7,003             3,778              3,778            899              899                                    XXX
    9. 2004         135,582        135,582                          12,945              12,945            5,979              5,979           1,317         1,317                                      XXX
   10. 2005         158,328        158,328                           4,399              4,399              901                901             613              613                                    XXX
   11. 2006         200,691        200,691                                550               550            242                242             243              243                                    XXX
   12. Totals       XXX            XXX              XXX             63,620              56,208        25,863             25,283              4,565         4,459                          8,098       XXX




                                                                                                                                              Adjusting and Other                23           24       25
                               Losses Unpaid                                      Defense and Cost Containment Unpaid                               Unpaid
                      Case Basis           Bulk + IBNR                             Case Basis            Bulk + IBNR                            21          22                           Total  Number of
                     13        14        15          16                           17         18         19         20                                                       Salvage       Net    Claims
                                                                                                                                                                              and       Losses  Outstand-
                                                                                                                                                                            Subrog-      and       ing -
                 Direct and                  Direct and                    Direct and                       Direct and                       Direct and                       ation    Expenses Direct and
                 Assumed          Ceded      Assumed            Ceded      Assumed            Ceded         Assumed            Ceded         Assumed        Ceded          Anticipated Unpaid   Assumed
    1.                    250        250                                                1             1                                                7               7                              XXX
    2.                    50          50                                                                                                              19              19                              XXX
    3.                                                75            75                                                  5               5             11              11                              XXX
    4.                                               294            294                 9             9                 18             18             17              17                              XXX
    5.                    275        275             418            418             252             252                 25             25            132             132                              XXX
    6.                    715        715           2,296          2,296             293             293             138               138            581             581                              XXX
    7.               3,835          3,835         16,911         16,911           1,246           1,246           1,001              1,001       1,600          1,600                                 XXX
    8.               3,441          3,441         28,315         28,315           1,296           1,296           1,654              1,654       2,246          2,246                                 XXX
    9.               6,450          6,450         35,233         35,233           2,896           2,896           2,026              2,026       3,548          3,548                                 XXX
   10.               8,251          8,251         58,124         58,124           1,608           1,608           3,273              3,273       4,505          4,505                                 XXX
   11.               6,593          6,593         92,241         92,241           1,911           1,911           5,182              5,182       7,448          7,448                                 XXX
   12. Totals       29,860         29,860         233,907       233,907           9,512           9,512           13,322         13,322         20,114         20,114                                 XXX




                                  Total                                 Loss and Loss Expense Percentage                                                                  34            Net Balance Sheet
                    Losses and Loss Expenses Incurred                      (Incurred/Premiums Earned)                                Nontabular Discount                Inter-        Reserves After Discount
                      26           27           28                        29            30          31                                32            33                Company            35            36
                                                                                                                                                                       Pooling                        Loss
                  Direct and                                         Direct and                                                                       Loss           Participation     Losses      Expenses
                  Assumed           Ceded                 Net        Assumed                Ceded                 Net                Loss            Expense         Percentage        Unpaid        Unpaid
    1.               XXX             XXX                  XXX             XXX                 XXX                 XXX                                                      XXX
    2.                 11,345             6,642             4,703               80.5              98.5               64.1
    3.                 14,530          11,135               3,395               120.6             160.2              66.5
    4.                    2,057           2,057                                 76.8              76.8
    5.                    6,037           6,037                                 187.3             187.3
    6.                 11,815          11,815                                   136.0             136.0
    7.                 38,506          38,506                                   89.6              89.6
    8.                 48,632          48,632                                   50.9              50.9
    9.                 70,394          70,394                                   51.9              51.9
   10.                 81,674          81,674                                   51.6              51.6
   11.               114,410          114,410                                   57.0              57.0
   12. Totals        XXX             XXX                  XXX             XXX                 XXX                 XXX                                                      XXX
Note: Parts 2 and 4 are gross of all discounting, including tabular discounting. Part 1 is gross of only nontabular discounting, which is reported in Columns 32 and 33 of Part 1.
The tabular discount, if any, is reported in the Notes to Financial Statements which will reconcile Part 1 with Parts 2 and 4.




                                                                                                      45
                            ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                          SCHEDULE P - PART 2 - SUMMARY
                         INCURRED NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END
                                                            ($000 OMITTED)                                                                 DEVELOPMENT
Years in Which     1            2         3        4          5         6       7         8         9       10                             11       12
 Losses Were
   Incurred       1997          1998           1999         2000       2001        2002      2003     2004     2005         2006      One Year   Two Year

    1. Prior        9,218        8,900          8,903        8,903         8,903     8,903    8,903    8,903    8,903        8,903
    2. 1997         4,618        4,642          4,643        4,643         4,643     4,643    4,643    4,643    4,643        4,643
    3. 1998       XXX            3,332          3,349        3,349         3,349     3,349    3,349    3,349    3,349        3,349
    4. 1999       XXX           XXX

    5. 2000       XXX           XXX            XXX

    6. 2001       XXX           XXX            XXX          XXX

    7. 2002       XXX           XXX            XXX          XXX        XXX

    8. 2003       XXX           XXX            XXX          XXX        XXX          XXX

    9. 2004       XXX           XXX            XXX          XXX        XXX          XXX      XXX

  10. 2005        XXX           XXX            XXX          XXX        XXX          XXX      XXX      XXX                                          XXX

  11. 2006        XXX           XXX            XXX          XXX        XXX          XXX      XXX      XXX      XXX                         XXX     XXX

                                                                                                                        12. Totals




                                          SCHEDULE P - PART 3 - SUMMARY
                 CUMULATIVE PAID NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END ($000                           11        12
                                                             OMITTED)                                                                            Number of
                   1         2          3         4        5          6        7        8        9         10                         Number of    Claims
                                                                                                                                        Claims     Closed
Years in Which                                                                                                                       Closed With  Without
 Losses Were                                                                                                                             Loss       Loss
   Incurred       1997          1998           1999         2000       2001        2002      2003     2004     2005         2006       Payment    Payment

    1. Prior      000            2,564          8,903        8,903         8,903     8,903    8,903    8,903    8,903        8,903         XXX     XXX

    2. 1997         1,118        2,334          4,643        4,643         4,643     4,643    4,643    4,643    4,643        4,643         XXX     XXX

    3. 1998       XXX              601          3,349        3,349         3,349     3,349    3,349    3,349    3,349        3,349         XXX     XXX

    4. 1999       XXX           XXX                                                                                                        XXX     XXX

    5. 2000       XXX           XXX            XXX                                                                                         XXX     XXX

    6. 2001       XXX           XXX            XXX          XXX                                                                            XXX     XXX

    7. 2002       XXX           XXX            XXX          XXX        XXX                                                                 XXX     XXX

    8. 2003       XXX           XXX            XXX          XXX        XXX          XXX                                                    XXX     XXX

    9. 2004       XXX           XXX            XXX          XXX        XXX          XXX      XXX                                           XXX     XXX

  10. 2005        XXX           XXX            XXX          XXX        XXX          XXX      XXX      XXX                                  XXX     XXX

  11. 2006        XXX           XXX            XXX          XXX        XXX          XXX      XXX      XXX      XXX                         XXX     XXX




                                          SCHEDULE P - PART 4 - SUMMARY
Years in Which   BULK AND IBNR RESERVES ON NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END ($000 OMITTED)
 Losses Were         1           2           3           4          5          6           7          8           9           10
   Incurred        1997        1998        1999        2000       2001       2002        2003       2004        2005         2006

    1. Prior            4,507          3,225
    2. 1997             2,490          1,234
    3. 1998        XXX                 1,934
    4. 1999        XXX             XXX

    5. 2000        XXX             XXX                XXX

    6. 2001        XXX             XXX                XXX            XXX

    7. 2002        XXX             XXX                XXX            XXX           XXX

    8. 2003        XXX             XXX                XXX            XXX           XXX        XXX

    9. 2004        XXX             XXX                XXX            XXX           XXX        XXX       XXX

  10. 2005         XXX             XXX                XXX            XXX           XXX        XXX       XXX           XXX

  11. 2006         XXX             XXX                XXX            XXX           XXX        XXX       XXX           XXX            XXX




                                                                                   46
                                     ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                        SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS
                                                                                            ($000 Omitted)
  Years in                Premiums Earned                                                             Loss and Loss Expense Payments                                                    12
   Which            1            2                   3                                           Defense and Cost        Adjusting and Other                10           11
 Premiums                                                             Loss Payments           Containment Payments           Payments
    Were                                                              4           5               6            7           8             9                              Total       Number of
   Earned                                                                                                                                              Salvage        Net Paid       Claims
and Losses                                                                                                                                               and         (Cols. 4 - 5   Reported -
    Were        Direct and                        Net            Direct and                  Direct and                     Direct and                Subrogation      +6-7         Direct and
  Incurred      Assumed         Ceded         (Cols. 1 - 2)      Assumed          Ceded      Assumed             Ceded      Assumed        Ceded       Received        + 8 - 9)     Assumed

 1. Prior          XXX              XXX           XXX                                                                                                                                 XXX
 2. 1997                 21               1               20                  9                        1                                                                       10
 3. 1998                 27                               27              14                           1                                                                       15
 4. 1999

 5. 2000

 6. 2001

 7. 2002

 8. 2003

 9. 2004

10. 2005

11. 2006

12. Totals         XXX              XXX           XXX                     23                           2                                                                       25     XXX




                                                                                                                               Adjusting and Other          23            24            25
                         Losses Unpaid                                      Defense and Cost Containment Unpaid                      Unpaid
              Case Basis              Bulk + IBNR                           Case Basis              Bulk + IBNR                 21            22                                    Number of
            13          14          15           16                       17          18           19          20                                                    Total            Claims
                                                                                                                                                        Salvage    Net Losses        Outstand-
                                                                                                                                                          and         and           ing - Direct
      Direct and                     Direct and                      Direct and                 Direct and                    Direct and               Subrogation Expenses             and
      Assumed           Ceded        Assumed             Ceded       Assumed        Ceded       Assumed           Ceded       Assumed         Ceded    Anticipated  Unpaid           Assumed

 1.

 2.

 3.

 4.

 5.

 6.

 7.

 8.

 9.

10.

11.

12.




                           Total                                    Loss and Loss Expense Percentage                                                  34              Net Balance Sheet
             Losses and Loss Expenses Incurred                         (Incurred/Premiums Earned)                    Nontabular Discount            Inter-          Reserves After Discount
              26            27             28                       29              30            31                  32             33           Company             35              36
                                                                                                                                                   Pooling                           Loss
       Direct and                                                Direct and                                                          Loss        Participation      Losses         Expenses
       Assumed               Ceded             Net               Assumed          Ceded            Net               Loss           Expense      Percentage         Unpaid          Unpaid

 1.          XXX              XXX              XXX                  XXX             XXX            XXX                                                XXX
 2.                10                                    10             47.6                              50.0
 3.                15                                    15             55.6                              55.6
 4.

 5.

 6.

 7.

 8.

 9.

10.

11.

12.          XXX              XXX              XXX                  XXX             XXX            XXX                                                XXX




                                                                                                  47
                                     ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                         SCHEDULE P - PART 1B - PRIVATE PASSENGER AUTO
                                        LIABILITY/MEDICAL
                                                                                            ($000 Omitted)
  Years in                Premiums Earned                                                             Loss and Loss Expense Payments                                                    12
   Which            1            2                  3                                            Defense and Cost        Adjusting and Other                10           11
 Premiums                                                             Loss Payments           Containment Payments           Payments
    Were                                                              4           5               6            7           8             9                              Total       Number of
   Earned                                                                                                                                              Salvage        Net Paid       Claims
and Losses                                                                                                                                               and         (Cols. 4 - 5   Reported -
    Were        Direct and                       Net             Direct and                  Direct and                     Direct and                Subrogation      +6-7         Direct and
  Incurred      Assumed         Ceded        (Cols. 1 - 2)       Assumed          Ceded      Assumed             Ceded      Assumed        Ceded       Received        + 8 - 9)     Assumed

 1. Prior          XXX              XXX           XXX                                                                                                                                 XXX
 2. 1997                  2                                  2                1                                                                                                1
 3. 1998                  1                                  1                1                                                                                                1
 4. 1999

 5. 2000

 6. 2001

 7. 2002

 8. 2003

 9. 2004

10. 2005

11. 2006

12. Totals         XXX              XXX           XXX                         2                                                                                                2      XXX




                                                                                                                               Adjusting and Other          23            24            25
                         Losses Unpaid                                      Defense and Cost Containment Unpaid                      Unpaid
              Case Basis              Bulk + IBNR                           Case Basis              Bulk + IBNR                 21            22                                    Number of
            13          14          15           16                       17          18           19          20                                                    Total            Claims
                                                                                                                                                        Salvage    Net Losses        Outstand-
                                                                                                                                                          and         and           ing - Direct
      Direct and                     Direct and                      Direct and                 Direct and                    Direct and               Subrogation Expenses             and
      Assumed           Ceded        Assumed            Ceded        Assumed        Ceded       Assumed           Ceded       Assumed         Ceded    Anticipated  Unpaid           Assumed

 1.

 2.

 3.

 4.

 5.

 6.

 7.

 8.

 9.

10.

11.

12.




                           Total                                    Loss and Loss Expense Percentage                                                  34              Net Balance Sheet
             Losses and Loss Expenses Incurred                         (Incurred/Premiums Earned)                    Nontabular Discount            Inter-          Reserves After Discount
              26            27             28                       29              30            31                  32             33           Company             35              36
                                                                                                                                                   Pooling                           Loss
       Direct and                                                Direct and                                                          Loss        Participation      Losses         Expenses
       Assumed               Ceded            Net                Assumed          Ceded            Net               Loss           Expense      Percentage         Unpaid          Unpaid

 1.          XXX              XXX             XXX                   XXX             XXX            XXX                                                XXX
 2.                 1                                    1              50.0                              50.0
 3.                 1                                    1             100.0                           100.0
 4.

 5.

 6.

 7.

 8.

 9.

10.

11.

12.          XXX              XXX             XXX                   XXX             XXX            XXX                                                XXX




                                                                                                  48
                                     ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                         SCHEDULE P - PART 1C - COMMERCIAL AUTO/TRUCK
                                       LIABILITY/MEDICAL
                                                                                           ($000 Omitted)
  Years in                Premiums Earned                                                            Loss and Loss Expense Payments                                                  12
   Which            1            2                  3                                           Defense and Cost        Adjusting and Other             10            11
 Premiums                                                            Loss Payments           Containment Payments           Payments
    Were                                                             4           5               6            7           8             9                            Total       Number of
   Earned                                                                                                                                           Salvage        Net Paid       Claims
and Losses                                                                                                                                            and         (Cols. 4 - 5   Reported -
    Were        Direct and                       Net            Direct and                  Direct and                  Direct and                 Subrogation      +6-7         Direct and
  Incurred      Assumed         Ceded        (Cols. 1 - 2)      Assumed          Ceded      Assumed         Ceded       Assumed        Ceded        Received        + 8 - 9)     Assumed

 1. Prior          XXX              XXX           XXX                                                                                                                              XXX
 2. 1997

 3. 1998

 4. 1999

 5. 2000

 6. 2001

 7. 2002

 8. 2003

 9. 2004

10. 2005

11. 2006

12. Totals         XXX              XXX           XXX                                                                                                                              XXX




                                                                                                                           Adjusting and Other           23            24            25
                         Losses Unpaid                                     Defense and Cost Containment Unpaid                   Unpaid
              Case Basis              Bulk + IBNR                          Case Basis              Bulk + IBNR              21            22                                     Number of
            13          14          15           16                      17          18           19          20                                                  Total            Claims
                                                                                                                                                     Salvage    Net Losses        Outstand-
                                                                                                                                                       and         and           ing - Direct
      Direct and                     Direct and                     Direct and                 Direct and                 Direct and                Subrogation Expenses             and
      Assumed           Ceded        Assumed            Ceded       Assumed        Ceded       Assumed       Ceded        Assumed         Ceded     Anticipated  Unpaid           Assumed

 1.

 2.

 3.

 4.

 5.

 6.

 7.

 8.

 9.

10.

11.

12.




                           Total                                   Loss and Loss Expense Percentage                                                34              Net Balance Sheet
             Losses and Loss Expenses Incurred                        (Incurred/Premiums Earned)                 Nontabular Discount             Inter-          Reserves After Discount
              26            27             28                      29              30            31               32             33            Company             35              36
                                                                                                                                                Pooling                           Loss
       Direct and                                               Direct and                                                       Loss         Participation      Losses         Expenses
       Assumed               Ceded            Net               Assumed          Ceded            Net            Loss           Expense       Percentage         Unpaid          Unpaid

 1.          XXX              XXX             XXX                  XXX             XXX            XXX                                             XXX
 2.

 3.

 4.

 5.

 6.

 7.

 8.

 9.

10.

11.

12.          XXX              XXX             XXX                  XXX             XXX            XXX                                             XXX




                                                                                                 49
                                     ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                         SCHEDULE P - PART 1D - WORKERS' COMPENSATION
                                                                                           ($000 Omitted)
  Years in                Premiums Earned                                                            Loss and Loss Expense Payments                                                  12
   Which            1            2                  3                                           Defense and Cost        Adjusting and Other             10            11
 Premiums                                                            Loss Payments           Containment Payments           Payments
    Were                                                             4           5               6            7           8             9                            Total       Number of
   Earned                                                                                                                                           Salvage        Net Paid       Claims
and Losses                                                                                                                                            and         (Cols. 4 - 5   Reported -




                                                                             NONE
    Were        Direct and                       Net            Direct and                  Direct and                  Direct and                 Subrogation      +6-7         Direct and
  Incurred      Assumed         Ceded        (Cols. 1 - 2)      Assumed          Ceded      Assumed         Ceded       Assumed        Ceded        Received        + 8 - 9)     Assumed

 1. Prior          XXX              XXX           XXX                                                                                                                              XXX
 2. 1997

 3. 1998

 4. 1999

 5. 2000

 6. 2001

 7. 2002

 8. 2003

 9. 2004

10. 2005

11. 2006

12. Totals         XXX              XXX           XXX                                                                                                                              XXX




                                                                                                                           Adjusting and Other           23            24            25
                         Losses Unpaid                                     Defense and Cost Containment Unpaid                   Unpaid
              Case Basis              Bulk + IBNR                          Case Basis              Bulk + IBNR              21            22                                     Number of
            13          14          15           16                      17          18           19          20                                                  Total            Claims
                                                                                                                                                     Salvage    Net Losses        Outstand-
                                                                                                                                                       and         and           ing - Direct
      Direct and                     Direct and                     Direct and                 Direct and                 Direct and                Subrogation Expenses             and




                                                                             NONE
      Assumed           Ceded        Assumed            Ceded       Assumed        Ceded       Assumed       Ceded        Assumed         Ceded     Anticipated  Unpaid           Assumed

 1.

 2.

 3.

 4.

 5.

 6.

 7.

 8.

 9.

10.

11.

12.




                           Total                                   Loss and Loss Expense Percentage                                                34              Net Balance Sheet
             Losses and Loss Expenses Incurred                        (Incurred/Premiums Earned)                 Nontabular Discount             Inter-          Reserves After Discount
              26            27             28                      29              30            31               32             33            Company             35              36
                                                                                                                                                Pooling                           Loss
       Direct and                                               Direct and                                                       Loss         Participation      Losses         Expenses
       Assumed               Ceded            Net               Assumed          Ceded            Net            Loss           Expense       Percentage         Unpaid          Unpaid




                                                                             NONE
 1.          XXX              XXX             XXX                  XXX             XXX            XXX                                             XXX
 2.

 3.

 4.

 5.

 6.

 7.

 8.

 9.

10.

11.

12.          XXX              XXX             XXX                  XXX             XXX            XXX                                             XXX




                                                                                                 50
                                       ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                         SCHEDULE P - PART 1E - COMMERCIAL MULTIPLE PERIL
                                                                                                           ($000 Omitted)
  Years in                   Premiums Earned                                                                         Loss and Loss Expense Payments                                                                  12
   Which             1              2                      3                                                    Defense and Cost        Adjusting and Other                              10           11
 Premiums                                                                    Loss Payments                   Containment Payments           Payments
    Were                                                                     4           5                       6            7           8             9                                            Total       Number of
   Earned                                                                                                                                                                           Salvage        Net Paid       Claims
and Losses                                                                                                                                                                            and         (Cols. 4 - 5   Reported -
    Were        Direct and                              Net             Direct and                              Direct and                            Direct and                   Subrogation      +6-7         Direct and
  Incurred      Assumed            Ceded            (Cols. 1 - 2)       Assumed               Ceded             Assumed             Ceded             Assumed        Ceded          Received        + 8 - 9)     Assumed

 1. Prior            XXX               XXX               XXX                                                                                                                                                       XXX
 2. 1997                  471                445                26                139             120                   13                  11                                                              21
 3. 1998                  711                631                80                382             315                   27                  23                                                              71
 4. 1999

 5. 2000

 6. 2001

 7. 2002

 8. 2003

 9. 2004

10. 2005                                                                                                                25                  25                 3             3                                            10
11. 2006                 7,749          7,749                                     63                  63                 4                  4                 19             19                                           84
12. Totals           XXX               XXX               XXX                      584             498                   69                  63                22             22                             92     XXX




                                                                                                                                                         Adjusting and Other             23            24            25
                         Losses Unpaid                                              Defense and Cost Containment Unpaid                                        Unpaid
              Case Basis              Bulk + IBNR                                   Case Basis              Bulk + IBNR                                   21            22                                       Number of
            13          14          15           16                               17          18           19          20                                                                         Total            Claims
                                                                                                                                                                                     Salvage    Net Losses        Outstand-
                                                                                                                                                                                       and         and           ing - Direct
      Direct and                        Direct and                           Direct and                           Direct and                            Direct and                  Subrogation Expenses             and
      Assumed             Ceded         Assumed                Ceded         Assumed            Ceded             Assumed            Ceded              Assumed         Ceded       Anticipated  Unpaid           Assumed

 1.

 2.

 3.

 4.

 5.

 6.

 7.

 8.

 9.

10.            355               355               971               971                70                 70                37                  37            127           127                                           9
11.          1,097           1,097             4,709                4,709               103            103                   177             177               594           594                                          78
12.          1,452           1,452             5,680                5,680               173            173                   214             214               721           721                                          87



                           Total                                            Loss and Loss Expense Percentage                                                                    34                 Net Balance Sheet
             Losses and Loss Expenses Incurred                                 (Incurred/Premiums Earned)                               Nontabular Discount                   Inter-             Reserves After Discount
              26            27             28                               29              30            31                             32             33                  Company                35              36
                                                                                                                                                                             Pooling                              Loss
       Direct and                                                      Direct and                                                                              Loss        Participation         Losses         Expenses
       Assumed               Ceded                   Net               Assumed                Ceded                   Net               Loss                  Expense      Percentage            Unpaid          Unpaid

 1.          XXX                 XXX                 XXX                    XXX                 XXX                   XXX                                                          XXX
 2.                152                 131                     21              32.3                   29.4                   80.8
 3.                409                 338                     71              57.5                   53.6                   88.8
 4.

 5.

 6.

 7.

 8.

 9.

10.            1,588               1,588
11.            6,766               6,766                                       87.3                   87.3
12.          XXX                 XXX                 XXX                    XXX                 XXX                   XXX                                                          XXX




                                                                                                                    51
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




         Schedule P - Part 1F - Medical Mal Occur

                        NONE
         Schedule P - Part 1F - Medical Mal Claim

                        NONE




                             52, 53
                                      ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


              SCHEDULE P - PART 1G - SPECIAL LIABILITY (OCEAN MARINE,
                  AIRCRAFT (ALL PERILS), BOILER AND MACHINERY)
                                                                                               ($000 Omitted)
  Years in                  Premiums Earned                                                              Loss and Loss Expense Payments                                                               12
   Which            1              2                    3                                           Defense and Cost        Adjusting and Other                           10           11
 Premiums                                                                Loss Payments           Containment Payments           Payments
    Were                                                                 4           5               6            7           8             9                                         Total       Number of
   Earned                                                                                                                                                            Salvage        Net Paid       Claims
and Losses                                                                                                                                                             and         (Cols. 4 - 5   Reported -
    Were        Direct and                           Net            Direct and                      Direct and                        Direct and                    Subrogation      +6-7         Direct and
  Incurred      Assumed           Ceded          (Cols. 1 - 2)      Assumed          Ceded          Assumed             Ceded         Assumed          Ceded         Received        + 8 - 9)     Assumed
 1. Prior          XXX                XXX             XXX                                                                                                                                           XXX
 2. 1997                9,177          5,017            4,160             6,289        3,617               345              191               36                                         2,862      XXX
 3. 1998                8,340          5,249            3,091             8,999        6,951               478              359               41                                         2,208      XXX
 4. 1999                                                                                                                                                                                            XXX
 5. 2000                                                                                                                                                                                            XXX
 6. 2001                                                                                                                                                                                            XXX
 7. 2002                                                                                                                                                                                            XXX
 8. 2003                                                                                                                                                                                            XXX
 9. 2004                                                                                                                                                                                            XXX
10. 2005                                                                                                                                                                                            XXX
11. 2006                  40                40                                                                                                                                                      XXX
12. Totals         XXX                XXX             XXX                15,288       10,568               823              550               77                                         5,070      XXX




                                                                                                                                         Adjusting and Other              23            24            25
                         Losses Unpaid                                         Defense and Cost Containment Unpaid                             Unpaid
              Case Basis              Bulk + IBNR                              Case Basis              Bulk + IBNR                        21            22                                        Number of
            13          14          15           16                          17          18           19          20                                                               Total            Claims
                                                                                                                                                                      Salvage    Net Losses        Outstand-
                                                                                                                                                                        and         and           ing - Direct
      Direct and                       Direct and                       Direct and                    Direct and                        Direct and                   Subrogation Expenses             and
      Assumed            Ceded         Assumed              Ceded       Assumed        Ceded          Assumed            Ceded          Assumed         Ceded        Anticipated  Unpaid           Assumed
 1.

 2.

 3.

 4.

 5.

 6.

 7.

 8.

 9.

10.

11.                                              23              23                                               1               1                1            1
12.                                              23              23                                               1               1                1            1



                           Total                                       Loss and Loss Expense Percentage                                                         34                  Net Balance Sheet
             Losses and Loss Expenses Incurred                            (Incurred/Premiums Earned)                        Nontabular Discount               Inter-              Reserves After Discount
              26            27             28                          29              30            31                      32             33              Company                 35              36
                                                                                                                                                             Pooling                               Loss
       Direct and                                                   Direct and                                                                 Loss        Participation          Losses         Expenses
       Assumed               Ceded                Net               Assumed          Ceded                Net               Loss              Expense      Percentage             Unpaid          Unpaid
 1.          XXX                XXX               XXX                  XXX             XXX                XXX                                                       XXX
 2.            6,670              3,808               2,862                72.7              75.9                68.8
 3.            9,518              7,310               2,208               114.1          139.3                   71.4
 4.

 5.

 6.

 7.

 8.

 9.

10.

11.                25                  25                                  62.5              62.5
12.          XXX                XXX               XXX                  XXX             XXX                XXX                                                       XXX




                                                                                                        54
                                       ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


SCHEDULE P - PART 1H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
                                                                                                       ($000 Omitted)
  Years in                  Premiums Earned                                                                      Loss and Loss Expense Payments                                                                         12
   Which              1            2                     3                                                  Defense and Cost        Adjusting and Other                                    10           11
 Premiums                                                                  Loss Payments                 Containment Payments           Payments
    Were                                                                   4           5                     6            7           8             9                                                  Total        Number of
   Earned                                                                                                                                                                             Salvage        Net Paid        Claims
and Losses                                                                                                                                                                              and         (Cols. 4 - 5    Reported -
    Were        Direct and                            Net             Direct and                            Direct and                            Direct and                         Subrogation      +6-7          Direct and
  Incurred      Assumed            Ceded          (Cols. 1 - 2)       Assumed               Ceded           Assumed             Ceded             Assumed           Ceded             Received        + 8 - 9)      Assumed

 1. Prior            XXX               XXX             XXX                                                         775              775                  330            330                                           XXX
 2. 1997               1,778               730           1,048              1,678             1,150                561              457                   12                10                                634            111
 3. 1998               1,712               436           1,276              1,938             1,225                649              593                   48                47                                770            54
 4. 1999               2,651            2,651                                   771             771                912              912                   36                36                                               102
 5. 2000               3,224            3,224                               3,124             3,124              1,719            1,719                   92                92                                               137
 6. 2001               8,663            8,663                               4,446             4,446              3,013            3,013                  333            333                                                  441
 7. 2002             35,920            35,920                               7,266             7,266              6,039            6,039                  525            525                                              1,083
 8. 2003             75,722            75,722                               6,259             6,259              3,443            3,443                  791            791                                                  996
 9. 2004             109,512           109,512                              9,567             9,567              4,128            4,128                  983            983                                                  936
10. 2005             131,973           131,973                              2,623             2,623                550              550                  325            325                                                  857
11. 2006             168,260           168,260                                  443             443                 26                  26                64                64                                               366
12. Totals           XXX               XXX             XXX                 38,115            36,874             21,815           21,655                3,539          3,536                               1,404       XXX




                                                                                                                                                     Adjusting and Other                   23            24             25
                         Losses Unpaid                                            Defense and Cost Containment Unpaid                                      Unpaid
              Case Basis              Bulk + IBNR                                 Case Basis              Bulk + IBNR                                 21            22                                              Number of
            13          14          15           16                             17          18           19          20                                                                             Total             Claims
                                                                                                                                                                                       Salvage    Net Losses         Outstand-
                                                                                                                                                                                         and         and            ing - Direct
      Direct and                        Direct and                         Direct and                         Direct and                            Direct and                        Subrogation Expenses              and
      Assumed             Ceded         Assumed              Ceded         Assumed            Ceded           Assumed            Ceded              Assumed          Ceded            Anticipated  Unpaid            Assumed

 1.            250             250                                                     1               1                                                       7                 7                                            2
 2.             50                50                                                                                                                           19            19                                               6
 3.                                              75                  75                                                   5                  5                 11            11                                               2
 4.                                              294              294                  9               9                 18                  18                17            17                                               5
 5.            275             275               418              418                 252            252                 25                  25            132              132                                              11
 6.            715             715            2,296            2,296                  293            293                 138             138               581              581                                              31
 7.          3,835           3,835           16,146           16,146             1,246              1,246                972             972             1,570         1,570                                                 82
 8.          2,983           2,983           26,061           26,061             1,029              1,029          1,569            1,569                2,091         2,091                                                 114
 9.          5,508           5,508           30,989           30,989             1,615              1,615          1,866            1,866                3,055         3,055                                                 174
10.          7,508           7,508           48,059           48,059             1,070              1,070          2,894            2,894                3,684         3,684                                                 191
11.          4,635           4,635           75,745           75,745                  972            972           4,561            4,561                5,670         5,670                                                 235
12.         25,759         25,759            200,083         200,083             6,487              6,487         12,048           12,048              16,837         16,837                                                 853



                           Total                                          Loss and Loss Expense Percentage                                                                   34                      Net Balance Sheet
             Losses and Loss Expenses Incurred                               (Incurred/Premiums Earned)                             Nontabular Discount                    Inter-                  Reserves After Discount
              26            27             28                             29              30            31                           32             33                   Company                     35              36
                                                                                                                                                                          Pooling                                   Loss
       Direct and                                                    Direct and                                                                            Loss         Participation              Losses         Expenses
       Assumed               Ceded                 Net               Assumed                Ceded                 Net               Loss                  Expense       Percentage                 Unpaid          Unpaid

 1.          XXX               XXX                 XXX                    XXX                 XXX                 XXX                                                                XXX
 2.            2,320               1,686                 634                130.5               231.0                    60.5
 3.            2,726               1,956                 770                159.2               448.6                    60.3
 4.            2,057               2,057                                     77.6                   77.6
 5.            6,037               6,037                                    187.3               187.3
 6.           11,815              11,815                                    136.4               136.4
 7.           37,599              37,599                                    104.7               104.7
 8.           44,226              44,226                                     58.4                   58.4
 9.           57,711              57,711                                     52.7                   52.7
10.           66,713              66,713                                     50.6                   50.6
11.           92,116              92,116                                     54.7                   54.7
12.          XXX               XXX                 XXX                    XXX                 XXX                 XXX                                                                XXX




                                                                                                                55
                                       ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


SCHEDULE P - PART 1H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
                                                                                                          ($000 Omitted)
  Years in                   Premiums Earned                                                                        Loss and Loss Expense Payments                                                                  12
   Which             1              2                     3                                                    Defense and Cost        Adjusting and Other                              10           11
 Premiums                                                                  Loss Payments                    Containment Payments           Payments
    Were                                                                   4           5                        6            7           8             9                                            Total       Number of
   Earned                                                                                                                                                                          Salvage        Net Paid       Claims
and Losses                                                                                                                                                                           and         (Cols. 4 - 5   Reported -
    Were        Direct and                             Net            Direct and                             Direct and                           Direct and                      Subrogation      +6-7         Direct and
  Incurred      Assumed            Ceded           (Cols. 1 - 2)      Assumed                Ceded           Assumed            Ceded             Assumed           Ceded          Received        + 8 - 9)     Assumed

 1. Prior            XXX               XXX              XXX                                                                                                                                                       XXX
 2. 1997

 3. 1998

 4. 1999

 5. 2000

 6. 2001                   22                22
 7. 2002                 7,073          7,073                                      5                  5              64                 64                14                14                                           19
 8. 2003             19,899            19,899                                  744               744                335             335                  108            108                                              67
 9. 2004             26,070            26,070                               3,378              3,378              1,851           1,851                  334            334                                              93
10. 2005             26,355            26,355                               1,776              1,776                326             326                  285            285                                              182
11. 2006             24,642            24,642                                  44                    44             212             212                  160            160                                              193
12. Totals           XXX               XXX              XXX                 5,947              5,947              2,788           2,788                  901            901                                       XXX




                                                                                                                                                     Adjusting and Other                23            24            25
                         Losses Unpaid                                           Defense and Cost Containment Unpaid                                       Unpaid
              Case Basis              Bulk + IBNR                                Case Basis              Bulk + IBNR                                  21            22                                          Number of
            13          14          15           16                            17          18           19          20                                                                           Total            Claims
                                                                                                                                                                                    Salvage    Net Losses        Outstand-
                                                                                                                                                                                      and         and           ing - Direct
      Direct and                        Direct and                        Direct and                           Direct and                           Direct and                     Subrogation Expenses             and
      Assumed             Ceded         Assumed               Ceded       Assumed              Ceded           Assumed           Ceded              Assumed          Ceded         Anticipated  Unpaid           Assumed

 1.

 2.

 3.

 4.

 5.

 6.

 7.                                               765              765                                                    29                 29                30            30
 8.            458               458          2,254             2,254                  267            267                 85                 85            155              155                                          18
 9.            942               942          4,244             4,244           1,281                1,281                160            160               493              493                                          44
10.            388               388          9,094             9,094                  468            468                 342            342               694              694                                          71
11.            861               861         11,764            11,764                  836            836                 443            443             1,183         1,183                                             162
12.          2,649           2,649           28,121            28,121           2,852                2,852          1,059           1,059                2,555         2,555                                             295



                           Total                                         Loss and Loss Expense Percentage                                                                    34                   Net Balance Sheet
             Losses and Loss Expenses Incurred                              (Incurred/Premiums Earned)                              Nontabular Discount                    Inter-               Reserves After Discount
              26            27             28                            29              30            31                            32             33                   Company                  35              36
                                                                                                                                                                          Pooling                                Loss
       Direct and                                                     Direct and                                                                           Loss         Participation           Losses         Expenses
       Assumed               Ceded                  Net               Assumed                Ceded                 Net              Loss                  Expense       Percentage              Unpaid          Unpaid

 1.          XXX                 XXX                XXX                  XXX                   XXX                 XXX                                                            XXX
 2.

 3.

 4.

 5.

 6.

 7.                907                 907                                   12.8                    12.8
 8.            4,406               4,406                                     22.1                    22.1
 9.           12,683              12,683                                     48.6                    48.6
10.           13,373              13,373                                     50.7                    50.7
11.           15,503              15,503                                     62.9                    62.9
12.          XXX                 XXX                XXX                  XXX                   XXX                 XXX                                                            XXX




                                                                                                                 56
                                     ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company



       SCHEDULE P - PART 1I - SPECIAL PROPERTY (FIRE, ALLIED LINES,
          INLAND MARINE, EARTHQUAKE, BURGLARY AND THEFT)
                                                                                           ($000 Omitted)
  Years in                Premiums Earned                                                            Loss and Loss Expense Payments                                                  12
   Which            1            2                  3                                           Defense and Cost        Adjusting and Other             10            11
 Premiums                                                            Loss Payments           Containment Payments           Payments
    Were                                                             4           5               6            7           8             9                            Total       Number of
   Earned                                                                                                                                           Salvage        Net Paid       Claims
and Losses                                                                                                                                            and         (Cols. 4 - 5   Reported -
    Were        Direct and                       Net            Direct and                  Direct and                  Direct and                 Subrogation      +6-7         Direct and
  Incurred      Assumed         Ceded        (Cols. 1 - 2)      Assumed          Ceded      Assumed         Ceded       Assumed        Ceded        Received        + 8 - 9)     Assumed



 1. Prior          XXX              XXX           XXX                                                                                                                               XXX


 2. 2005                                                                                                                                                                            XXX


 3. 2006                                                                                                                                                                            XXX



 4. Totals         XXX              XXX           XXX                                                                                                                               XXX




                                                                                                                           Adjusting and Other           23            24            25
                         Losses Unpaid                                     Defense and Cost Containment Unpaid                   Unpaid
              Case Basis              Bulk + IBNR                          Case Basis              Bulk + IBNR              21            22                                     Number of
            13          14          15           16                      17          18           19          20                                                  Total            Claims
                                                                                                                                                     Salvage    Net Losses        Outstand-
                                                                                                                                                       and         and           ing - Direct
      Direct and                     Direct and                     Direct and                 Direct and                 Direct and                Subrogation Expenses             and
      Assumed           Ceded        Assumed            Ceded       Assumed        Ceded       Assumed       Ceded        Assumed         Ceded     Anticipated  Unpaid           Assumed



 1.



 2.



 3.



 4.




                           Total                                   Loss and Loss Expense Percentage                                                34              Net Balance Sheet
             Losses and Loss Expenses Incurred                        (Incurred/Premiums Earned)                 Nontabular Discount             Inter-          Reserves After Discount
              26            27             28                      29              30            31               32             33            Company             35              36
                                                                                                                                                Pooling                           Loss
       Direct and                                               Direct and                                                       Loss         Participation      Losses         Expenses
       Assumed               Ceded            Net               Assumed          Ceded            Net            Loss           Expense       Percentage         Unpaid          Unpaid



 1.          XXX              XXX             XXX                  XXX             XXX            XXX                                             XXX


 2.



 3.



 4.          XXX              XXX             XXX                  XXX             XXX            XXX                                             XXX




                                                                                                 57
                                     ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company



                              SCHEDULE P - PART 1J - AUTO PHYSICAL DAMAGE
                                                                                           ($000 Omitted)
  Years in                Premiums Earned                                                            Loss and Loss Expense Payments                                                  12
   Which            1            2                  3                                           Defense and Cost        Adjusting and Other             10            11
 Premiums                                                            Loss Payments           Containment Payments           Payments
    Were                                                             4           5               6            7           8             9                            Total       Number of
   Earned                                                                                                                                           Salvage        Net Paid       Claims
and Losses                                                                                                                                            and         (Cols. 4 - 5   Reported -
    Were        Direct and                       Net            Direct and                  Direct and                  Direct and                 Subrogation      +6-7         Direct and
  Incurred      Assumed         Ceded        (Cols. 1 - 2)      Assumed          Ceded      Assumed         Ceded       Assumed        Ceded        Received        + 8 - 9)     Assumed


 1. Prior          XXX              XXX           XXX                                                                                                                               XXX


 2. 2005


 3. 2006



 4. Totals         XXX              XXX           XXX                                                                                                                               XXX




                                                                                                                           Adjusting and Other           23            24            25
                         Losses Unpaid                                     Defense and Cost Containment Unpaid                   Unpaid
              Case Basis              Bulk + IBNR                          Case Basis              Bulk + IBNR              21            22                                     Number of
            13          14          15           16                      17          18           19          20                                                  Total            Claims
                                                                                                                                                     Salvage    Net Losses        Outstand-
                                                                                                                                                       and         and           ing - Direct
      Direct and                     Direct and                     Direct and                 Direct and                 Direct and                Subrogation Expenses             and
      Assumed           Ceded        Assumed            Ceded       Assumed        Ceded       Assumed       Ceded        Assumed         Ceded     Anticipated  Unpaid           Assumed


 1.


 2.


 3.



 4.




                           Total                                   Loss and Loss Expense Percentage                                                34              Net Balance Sheet
             Losses and Loss Expenses Incurred                        (Incurred/Premiums Earned)                 Nontabular Discount             Inter-          Reserves After Discount
              26            27             28                      29              30            31               32             33            Company             35              36
                                                                                                                                                Pooling                           Loss
       Direct and                                               Direct and                                                       Loss         Participation      Losses         Expenses
       Assumed               Ceded            Net               Assumed          Ceded            Net            Loss           Expense       Percentage         Unpaid          Unpaid


 1.          XXX              XXX             XXX                  XXX             XXX            XXX                                             XXX


 2.


 3.



 4.          XXX              XXX             XXX                  XXX             XXX            XXX                                             XXX




                                                                                                 58
                                     ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company



                                          SCHEDULE P - PART 1K - FIDELITY/SURETY
                                                                                           ($000 Omitted)
  Years in                Premiums Earned                                                            Loss and Loss Expense Payments                                                  12
   Which            1            2                  3                                           Defense and Cost        Adjusting and Other             10            11
 Premiums                                                            Loss Payments           Containment Payments           Payments
    Were                                                             4           5               6            7           8             9                            Total       Number of
   Earned                                                                                                                                           Salvage        Net Paid       Claims
and Losses                                                                                                                                            and         (Cols. 4 - 5   Reported -
    Were        Direct and                       Net            Direct and                  Direct and                  Direct and                 Subrogation      +6-7         Direct and
  Incurred      Assumed         Ceded        (Cols. 1 - 2)      Assumed          Ceded      Assumed         Ceded       Assumed        Ceded        Received        + 8 - 9)     Assumed



 1. Prior          XXX              XXX           XXX                                                                                                                               XXX


 2. 2005                                                                                                                                                                            XXX


 3. 2006                                                                                                                                                                            XXX



 4. Totals         XXX              XXX           XXX                                                                                                                               XXX




                                                                                                                           Adjusting and Other           23            24            25
                         Losses Unpaid                                     Defense and Cost Containment Unpaid                   Unpaid
              Case Basis              Bulk + IBNR                          Case Basis              Bulk + IBNR              21            22                                     Number of
            13          14          15           16                      17          18           19          20                                                  Total            Claims
                                                                                                                                                     Salvage    Net Losses        Outstand-
                                                                                                                                                       and         and           ing - Direct
      Direct and                     Direct and                     Direct and                 Direct and                 Direct and                Subrogation Expenses             and
      Assumed           Ceded        Assumed            Ceded       Assumed        Ceded       Assumed       Ceded        Assumed         Ceded     Anticipated  Unpaid           Assumed



 1.



 2.



 3.



 4.




                           Total                                   Loss and Loss Expense Percentage                                                34              Net Balance Sheet
             Losses and Loss Expenses Incurred                        (Incurred/Premiums Earned)                 Nontabular Discount             Inter-          Reserves After Discount
              26            27             28                      29              30            31               32             33            Company             35              36
                                                                                                                                                Pooling                           Loss
       Direct and                                               Direct and                                                       Loss         Participation      Losses         Expenses
       Assumed               Ceded            Net               Assumed          Ceded            Net            Loss           Expense       Percentage         Unpaid          Unpaid



 1.          XXX              XXX             XXX                  XXX             XXX            XXX                                             XXX


 2.



 3.



 4.          XXX              XXX             XXX                  XXX             XXX            XXX                                             XXX




                                                                                                 59
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




                Schedule P - Part 1L - Other

                        NONE
            Schedule P - Part 1M - International

                        NONE




                             60, 61
                                     ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


              SCHEDULE P - PART 1N - REINSURANCE - NONPROPORTIONAL
                               ASSUMED PROPERTY
                                                                                             ($000 Omitted)
  Years in                Premiums Earned                                                              Loss and Loss Expense Payments                                                    12
   Which            1            2                    3                                           Defense and Cost        Adjusting and Other                10           11
 Premiums                                                              Loss Payments           Containment Payments           Payments
    Were                                                               4           5               6            7           8             9                              Total       Number of
   Earned                                                                                                                                               Salvage        Net Paid       Claims
and Losses                                                                                                                                                and         (Cols. 4 - 5   Reported -
    Were        Direct and                         Net            Direct and                  Direct and                     Direct and                Subrogation      +6-7         Direct and
  Incurred      Assumed         Ceded          (Cols. 1 - 2)      Assumed          Ceded      Assumed             Ceded      Assumed        Ceded       Received        + 8 - 9)     Assumed
 1. Prior          XXX              XXX            XXX                                                                                                                                  XXX
 2. 1997                237               14               223             91                           2                             2                                         95      XXX
 3. 1998                 26               3                23                                                                                                                           XXX
 4. 1999                                                                                                                                                                                XXX
 5. 2000                                                                                                                                                                                XXX
 6. 2001                                                                                                                                                                                XXX
 7. 2002                                                                                                                                                                                XXX
 8. 2003                                                                                                                                                                                XXX
 9. 2004                                                                                                                                                                                XXX
10. 2005                                                                                                                                                                                XXX
11. 2006                                                                                                                                                                                XXX
12. Totals         XXX              XXX            XXX                     91                           2                             2                                         95      XXX




                                                                                                                                Adjusting and Other          23            24            25
                         Losses Unpaid                                       Defense and Cost Containment Unpaid                      Unpaid
              Case Basis              Bulk + IBNR                            Case Basis              Bulk + IBNR                 21            22                                    Number of
            13          14          15           16                        17          18           19          20                                                    Total            Claims
                                                                                                                                                         Salvage    Net Losses        Outstand-
                                                                                                                                                           and         and           ing - Direct
      Direct and                     Direct and                       Direct and                 Direct and                    Direct and               Subrogation Expenses             and
      Assumed           Ceded        Assumed              Ceded       Assumed        Ceded       Assumed           Ceded       Assumed         Ceded    Anticipated  Unpaid           Assumed
 1.                                                                                                                                                                                     XXX
 2.                                                                                                                                                                                     XXX
 3.                                                                                                                                                                                     XXX
 4.                                                                                                                                                                                     XXX
 5.                                                                                                                                                                                     XXX
 6.                                                                                                                                                                                     XXX
 7.                                                                                                                                                                                     XXX
 8.                                                                                                                                                                                     XXX
 9.                                                                                                                                                                                     XXX
10.                                                                                                                                                                                     XXX
11.                                                                                                                                                                                     XXX
12.                                                                                                                                                                                     XXX




                           Total                                     Loss and Loss Expense Percentage                                                  34              Net Balance Sheet
             Losses and Loss Expenses Incurred                          (Incurred/Premiums Earned)                    Nontabular Discount            Inter-          Reserves After Discount
              26            27             28                        29              30            31                  32             33           Company             35              36
                                                                                                                                                    Pooling                           Loss
       Direct and                                                 Direct and                                                          Loss        Participation      Losses         Expenses
       Assumed               Ceded              Net               Assumed          Ceded            Net               Loss           Expense      Percentage         Unpaid          Unpaid
 1.          XXX              XXX               XXX                  XXX             XXX            XXX                                                XXX
 2.                95                                     95             40.1                              42.6
 3.
 4.
 5.
 6.
 7.
 8.
 9.
10.
11.

12.          XXX              XXX               XXX                  XXX             XXX            XXX                                                XXX




                                                                                                   62
                                     ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


             SCHEDULE P - PART 1O - REINSURANCE - NONPROPORTIONAL
                               ASSUMED LIABILITY
                                                                                            ($000 Omitted)
  Years in                Premiums Earned                                                             Loss and Loss Expense Payments                                                    12
   Which            1            2                   3                                           Defense and Cost        Adjusting and Other                10           11
 Premiums                                                             Loss Payments           Containment Payments           Payments
    Were                                                              4           5               6            7           8             9                              Total       Number of
   Earned                                                                                                                                              Salvage        Net Paid       Claims
and Losses                                                                                                                                               and         (Cols. 4 - 5   Reported -
    Were        Direct and                        Net            Direct and                  Direct and                     Direct and                Subrogation      +6-7         Direct and
  Incurred      Assumed         Ceded         (Cols. 1 - 2)      Assumed          Ceded      Assumed             Ceded      Assumed        Ceded       Received        + 8 - 9)     Assumed
 1. Prior          XXX              XXX           XXX                                                                                                                                  XXX
 2. 1997                105               5               100             28                           2                             1                                         31      XXX
 3. 1998                                                                                                                                                                               XXX
 4. 1999                                                                                                                                                                               XXX
 5. 2000                                                                                                                                                                               XXX
 6. 2001                                                                                                                                                                               XXX
 7. 2002                                                                                                                                                                               XXX
 8. 2003                                                                                                                                                                               XXX
 9. 2004                                                                                                                                                                               XXX
10. 2005                                                                                                                                                                               XXX
11. 2006                                                                                                                                                                               XXX
12. Totals         XXX              XXX           XXX                     28                           2                             1                                         31      XXX




                                                                                                                               Adjusting and Other          23            24            25
                         Losses Unpaid                                      Defense and Cost Containment Unpaid                      Unpaid
              Case Basis              Bulk + IBNR                           Case Basis              Bulk + IBNR                 21            22                                    Number of
            13          14          15           16                       17          18           19          20                                                    Total            Claims
                                                                                                                                                        Salvage    Net Losses        Outstand-
                                                                                                                                                          and         and           ing - Direct
      Direct and                     Direct and                      Direct and                 Direct and                    Direct and               Subrogation Expenses             and
      Assumed           Ceded        Assumed             Ceded       Assumed        Ceded       Assumed           Ceded       Assumed         Ceded    Anticipated  Unpaid           Assumed
 1.                                                                                                                                                                                    XXX
 2.                                                                                                                                                                                    XXX
 3.                                                                                                                                                                                    XXX
 4.                                                                                                                                                                                    XXX
 5.                                                                                                                                                                                    XXX
 6.                                                                                                                                                                                    XXX
 7.                                                                                                                                                                                    XXX
 8.                                                                                                                                                                                    XXX
 9.                                                                                                                                                                                    XXX
10.                                                                                                                                                                                    XXX
11.                                                                                                                                                                                    XXX
12.                                                                                                                                                                                    XXX




                           Total                                    Loss and Loss Expense Percentage                                                  34              Net Balance Sheet
             Losses and Loss Expenses Incurred                         (Incurred/Premiums Earned)                    Nontabular Discount            Inter-          Reserves After Discount
              26            27             28                       29              30            31                  32             33           Company             35              36
                                                                                                                                                   Pooling                           Loss
       Direct and                                                Direct and                                                          Loss        Participation      Losses         Expenses
       Assumed               Ceded             Net               Assumed          Ceded            Net               Loss           Expense      Percentage         Unpaid          Unpaid
 1.          XXX              XXX              XXX                  XXX             XXX            XXX                                                XXX
 2.                31                                    31             29.5                              31.0
 3.
 4.
 5.
 6.
 7.
 8.
 9.
10.
11.

12.          XXX              XXX              XXX                  XXX             XXX            XXX                                                XXX




                                                                                                  63
                                     ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


              SCHEDULE P - PART 1P - REINSURANCE - NONPROPORTIONAL
                             ASSUMED FINANCIAL LINES
                                                                                             ($000 Omitted)
  Years in                Premiums Earned                                                              Loss and Loss Expense Payments                                                    12
   Which            1            2                   3                                            Defense and Cost        Adjusting and Other                10           11
 Premiums                                                              Loss Payments           Containment Payments           Payments
    Were                                                               4           5               6            7           8             9                              Total       Number of
   Earned                                                                                                                                               Salvage        Net Paid       Claims
and Losses                                                                                                                                                and         (Cols. 4 - 5   Reported -
    Were        Direct and                        Net             Direct and                  Direct and                     Direct and                Subrogation      +6-7         Direct and
  Incurred      Assumed         Ceded         (Cols. 1 - 2)       Assumed          Ceded      Assumed             Ceded      Assumed        Ceded       Received        + 8 - 9)     Assumed
 1. Prior          XXX              XXX           XXX                                                                                                                                   XXX
 2. 1997                 12               1               11                   5                                                                                                5       XXX
 3. 1998                  7                                   7                                                                                                                         XXX
 4. 1999                                                                                                                                                                                XXX
 5. 2000                                                                                                                                                                                XXX
 6. 2001                                                                                                                                                                                XXX
 7. 2002                                                                                                                                                                                XXX
 8. 2003                                                                                                                                                                                XXX
 9. 2004                                                                                                                                                                                XXX
10. 2005                                                                                                                                                                                XXX
11. 2006                                                                                                                                                                                XXX
12. Totals         XXX              XXX           XXX                          5                                                                                                5       XXX




                                                                                                                                Adjusting and Other          23            24            25
                         Losses Unpaid                                       Defense and Cost Containment Unpaid                      Unpaid
              Case Basis              Bulk + IBNR                            Case Basis              Bulk + IBNR                 21            22                                    Number of
            13          14          15           16                        17          18           19          20                                                    Total            Claims
                                                                                                                                                         Salvage    Net Losses        Outstand-
                                                                                                                                                           and         and           ing - Direct
      Direct and                     Direct and                       Direct and                 Direct and                    Direct and               Subrogation Expenses             and
      Assumed           Ceded        Assumed             Ceded        Assumed        Ceded       Assumed           Ceded       Assumed         Ceded    Anticipated  Unpaid           Assumed
 1.                                                                                                                                                                                     XXX
 2.                                                                                                                                                                                     XXX
 3.                                                                                                                                                                                     XXX
 4.                                                                                                                                                                                     XXX
 5.                                                                                                                                                                                     XXX
 6.                                                                                                                                                                                     XXX
 7.                                                                                                                                                                                     XXX
 8.                                                                                                                                                                                     XXX
 9.                                                                                                                                                                                     XXX
10.                                                                                                                                                                                     XXX
11.                                                                                                                                                                                     XXX
12.                                                                                                                                                                                     XXX




                           Total                                     Loss and Loss Expense Percentage                                                  34              Net Balance Sheet
             Losses and Loss Expenses Incurred                          (Incurred/Premiums Earned)                    Nontabular Discount            Inter-          Reserves After Discount
              26            27             28                        29              30            31                  32             33           Company             35              36
                                                                                                                                                    Pooling                           Loss
       Direct and                                                 Direct and                                                          Loss        Participation      Losses         Expenses
       Assumed               Ceded             Net                Assumed          Ceded            Net               Loss           Expense      Percentage         Unpaid          Unpaid
 1.          XXX              XXX              XXX                   XXX             XXX            XXX                                                XXX
 2.                 5                                     5              41.7                              45.5
 3.
 4.
 5.
 6.
 7.
 8.
 9.
10.
11.

12.          XXX              XXX              XXX                   XXX             XXX            XXX                                                XXX




                                                                                                   64
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




          Schedule P - Part 1R - Prod Liab Occur

                        NONE
          Schedule P - Part 1R - Prod Liab Claims

                        NONE
          Schedule P - Part 1S-Fin./Mtg. Guaranty

                        NONE




                           65, 66, 67
                           ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                      SCHEDULE P - PART 2A - HOMEOWNERS/FARMOWNERS
               INCURRED NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END ($000 OMITTED)                        DEVELOPMENT
Years in Which      1        2         3         4         5       6         7        8          9          10                           11      12
 Losses Were
   Incurred       1997     1998      1999      2000      2001    2002      2003     2004       2005        2006                       One Year   Two Year
    1. Prior           89       67        65        65        65      65        65       65         65          65
    2. 1997            18       10        10        10        10      10        10       10         10          10
    3. 1998       XXX           15        15        15        15      15        15       15         15          15
    4. 1999       XXX      XXX
    5. 2000       XXX      XXX       XXX
    6. 2001       XXX      XXX       XXX       XXX
    7. 2002       XXX      XXX       XXX       XXX       XXX
    8. 2003       XXX      XXX       XXX       XXX       XXX      XXX
    9. 2004       XXX      XXX       XXX       XXX       XXX      XXX      XXX
   10. 2005       XXX      XXX       XXX       XXX       XXX      XXX      XXX      XXX                                                            XXX
   11. 2006       XXX      XXX       XXX       XXX       XXX      XXX      XXX      XXX        XXX                                      XXX        XXX
                                                                                                       12. Totals




        SCHEDULE P - PART 2B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
   1.   Prior         12           10         11         11         11         11         11         11         11            11
   2.   1997                                   1          1          1          1          1          1          1             1
   3.   1998    XXX                            1          1          1          1          1          1          1             1
   4.   1999    XXX          XXX
   5.   2000    XXX          XXX        XXX
   6.   2001    XXX          XXX        XXX        XXX
   7.   2002    XXX          XXX        XXX        XXX        XXX
   8.   2003    XXX          XXX        XXX        XXX        XXX        XXX
   9.   2004    XXX          XXX        XXX        XXX        XXX        XXX        XXX
  10.   2005    XXX          XXX        XXX        XXX        XXX        XXX        XXX        XXX                                                 XXX
  11.   2006    XXX          XXX        XXX        XXX        XXX        XXX        XXX        XXX        XXX                           XXX        XXX
                                                                                                                     12. Totals




        SCHEDULE P - PART 2C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
   1.   Prior         9            2          2          2          2          2          2          2          2                 2
   2.   1997
   3.   1998    XXX
   4.   1999    XXX          XXX
   5.   2000    XXX          XXX        XXX
   6.   2001    XXX          XXX        XXX        XXX
   7.   2002    XXX          XXX        XXX        XXX        XXX
   8.   2003    XXX          XXX        XXX        XXX        XXX        XXX
   9.   2004    XXX          XXX        XXX        XXX        XXX        XXX        XXX
  10.   2005    XXX          XXX        XXX        XXX        XXX        XXX        XXX        XXX                                                 XXX
  11.   2006    XXX          XXX        XXX        XXX        XXX        XXX        XXX        XXX        XXX                           XXX        XXX
                                                                                                                     12. Totals




                           SCHEDULE P - PART 2D- WORKERS’ COMPENSATION
   1.   Prior




                                                     NONE
   2.   1997
   3.   1998    XXX
   4.   1999    XXX          XXX
   5.   2000    XXX          XXX        XXX
   6.   2001    XXX          XXX        XXX        XXX
   7.   2002    XXX          XXX        XXX        XXX        XXX
   8.   2003    XXX          XXX        XXX        XXX        XXX        XXX
   9.   2004    XXX          XXX        XXX        XXX        XXX        XXX        XXX
  10.   2005    XXX          XXX        XXX        XXX        XXX        XXX        XXX        XXX                                                 XXX
  11.   2006    XXX          XXX        XXX        XXX        XXX        XXX        XXX        XXX        XXX                           XXX        XXX
                                                                                                                     12. Totals




                       SCHEDULE P - PART 2E- COMMERCIAL MULTIPLE PERIL
   1.   Prior     819          782        781        781        781           781     781        781        781             781
   2.   1997       21           22         21         21         21            21      21         21         21              21
   3.   1998    XXX             72         71         71         71            71      71         71         71              71
   4.   1999    XXX          XXX
   5.   2000    XXX          XXX        XXX
   6.   2001    XXX          XXX        XXX        XXX
   7.   2002    XXX          XXX        XXX        XXX        XXX
   8.   2003    XXX          XXX        XXX        XXX        XXX        XXX
   9.   2004    XXX          XXX        XXX        XXX        XXX        XXX        XXX
  10.   2005    XXX          XXX        XXX        XXX        XXX        XXX        XXX        XXX                                                 XXX
  11.   2006    XXX          XXX        XXX        XXX        XXX        XXX        XXX        XXX        XXX                           XXX        XXX
                                                                                                                     12. Totals




                                                                         68
                             ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

 SCHEDULE P - PART 2F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
                 INCURRED NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END ($000 OMITTED)        DEVELOPMENT




                                                    NONE
Years in Which       1         2        3         4         5        6         7        8         9         10             11      12
 Losses Were
   Incurred        1997        1998     1999     2000     2001      2002       2003     2004      2005        2006      One Year   Two Year
   1.   Prior
   2.   1997
   3.   1998       XXX
   4.   1999       XXX         XXX
   5.   2000       XXX         XXX      XXX
   6.   2001       XXX         XXX      XXX      XXX
   7.   2002       XXX         XXX      XXX      XXX       XXX
   8.   2003       XXX         XXX      XXX      XXX       XXX       XXX
   9.   2004       XXX         XXX      XXX      XXX       XXX       XXX       XXX
  10.   2005       XXX         XXX      XXX      XXX       XXX       XXX       XXX      XXX                                          XXX
  11.   2006       XXX         XXX      XXX      XXX       XXX       XXX       XXX      XXX       XXX                     XXX        XXX
                                                                                                           12. Totals




 SCHEDULE P - PART 2F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
   1.   Prior




                                                    NONE
   2.   1997
   3.   1998       XXX
   4.   1999       XXX         XXX
   5.   2000       XXX         XXX      XXX
   6.   2001       XXX         XXX      XXX      XXX
   7.   2002       XXX         XXX      XXX      XXX       XXX
   8.   2003       XXX         XXX      XXX      XXX       XXX       XXX
   9.   2004       XXX         XXX      XXX      XXX       XXX       XXX       XXX
  10.   2005       XXX         XXX      XXX      XXX       XXX       XXX       XXX      XXX                                          XXX
  11.   2006       XXX         XXX      XXX      XXX       XXX       XXX       XXX      XXX       XXX                     XXX        XXX
                                                                                                           12. Totals




                     SCHEDULE P - PART 2G - SPECIAL LIABILITY
            (OCEAN MARINE, AIRCRAFT (ALL PERILS), BOILER AND MACHINERY)
   1.   Prior        6,406      6,214    6,215    6,215     6,215     6,215     6,215     6,215    6,215        6,215
   2.   1997         2,853      2,826    2,826    2,826     2,826     2,826     2,826     2,826    2,826        2,826
   3.   1998       XXX          2,148    2,167    2,167     2,167     2,167     2,167     2,167    2,167        2,167
   4.   1999       XXX         XXX
   5.   2000       XXX         XXX      XXX
   6.   2001       XXX         XXX      XXX      XXX
   7.   2002       XXX         XXX      XXX      XXX       XXX
   8.   2003       XXX         XXX      XXX      XXX       XXX       XXX
   9.   2004       XXX         XXX      XXX      XXX       XXX       XXX       XXX
  10.   2005       XXX         XXX      XXX      XXX       XXX       XXX       XXX      XXX                                          XXX
  11.   2006       XXX         XXX      XXX      XXX       XXX       XXX       XXX      XXX       XXX                     XXX        XXX
                                                                                                           12. Totals




         SCHEDULE P - PART 2H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
   1.   Prior         553         552      551      551       551        551      551      551       551          551
   2.   1997          643         632      632      632       632        632      632      632       632          632
   3.   1998       XXX            770      769      769       769        769      769      769       769          769
   4.   1999       XXX         XXX
   5.   2000       XXX         XXX      XXX
   6.   2001       XXX         XXX      XXX      XXX
   7.   2002       XXX         XXX      XXX      XXX       XXX
   8.   2003       XXX         XXX      XXX      XXX       XXX       XXX
   9.   2004       XXX         XXX      XXX      XXX       XXX       XXX       XXX
  10.   2005       XXX         XXX      XXX      XXX       XXX       XXX       XXX      XXX                                          XXX
  11.   2006       XXX         XXX      XXX      XXX       XXX       XXX       XXX      XXX       XXX                     XXX        XXX
                                                                                                           12. Totals




         SCHEDULE P - PART 2H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
   1.   Prior
   2.   1997
   3.   1998       XXX
   4.   1999       XXX         XXX
   5.   2000       XXX         XXX      XXX
   6.   2001       XXX         XXX      XXX      XXX
   7.   2002       XXX         XXX      XXX      XXX       XXX
   8.   2003       XXX         XXX      XXX      XXX       XXX       XXX
   9.   2004       XXX         XXX      XXX      XXX       XXX       XXX       XXX
  10.   2005       XXX         XXX      XXX      XXX       XXX       XXX       XXX      XXX                                          XXX
  11.   2006       XXX         XXX      XXX      XXX       XXX       XXX       XXX      XXX       XXX                     XXX        XXX
                                                                                                           12. Totals




                                                                    69
                          ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

     SCHEDULE P - PART 2I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND
               MARINE, EARTHQUAKE, BURGLARY, AND THEFT)
                 INCURRED NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END ($000 OMITTED)      DEVELOPMENT
Years in Which       1         2        3         4         5        6         7        8         9         10           11      12
 Losses Were
   Incurred        1997      1998      1999      2000     2001      2002      2003      2004      2005      2006      One Year   Two Year

    1. Prior       XXX       XXX       XXX       XXX       XXX       XXX      XXX

    2. 2005        XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX                                        XXX

    3. 2006        XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX       XXX                   XXX        XXX

                                                                                                          4. Totals




                            SCHEDULE P - PART 2J - AUTO PHYSICAL DAMAGE
    1. Prior       XXX       XXX       XXX       XXX       XXX       XXX      XXX

    2. 2005        XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX                                        XXX

    3. 2006        XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX       XXX                   XXX        XXX

                                                                                                          4. Totals




                                    SCHEDULE P - PART 2K - FIDELITY, SURETY
    1. Prior       XXX       XXX       XXX       XXX       XXX       XXX      XXX

    2. 2005        XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX                                        XXX

    3. 2006        XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX       XXX                   XXX        XXX

                                                                                                          4. Totals




                                      SCHEDULE P - PART 2L - OTHER
                                (INCLUDING CREDIT, ACCIDENT AND HEALTH)


                                                    NONE
    1. Prior       XXX       XXX       XXX       XXX       XXX       XXX      XXX

    2. 2005        XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX                                        XXX

    3. 2006        XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX       XXX                   XXX        XXX

                                                                                                          4. Totals




                                    SCHEDULE P - PART 2M - INTERNATIONAL
    1. Prior

    2. 1997




                                                    NONE
    3. 1998        XXX

    4. 1999        XXX       XXX

    5. 2000        XXX       XXX       XXX

    6. 2001        XXX       XXX       XXX       XXX

    7. 2002        XXX       XXX       XXX       XXX       XXX

    8. 2003        XXX       XXX       XXX       XXX       XXX       XXX

    9. 2004        XXX       XXX       XXX       XXX       XXX       XXX      XXX

  10. 2005         XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX                                        XXX

  11. 2006         XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX       XXX                   XXX        XXX

                                                                                                         12. Totals




                                                                    70
                          ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                       SCHEDULE P - PART 2N - REINSURANCE
                                                   Nonproportional Assumed Property
               INCURRED NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END ($000 OMITTED)                          DEVELOPMENT
Years in Which      1        2         3         4         5       6         7        8          9        10                               11      12
 Losses Were
   Incurred       1997     1998      1999      2000      2001    2002      2003     2004       2005      2006                           One Year   Two Year

   1. Prior       411         444         446          446        446           446     446        446        446             446

   2. 1997        148             94          93           93         93         93         93         93         93            93

   3. 1998     XXX

   4. 1999     XXX          XXX

   5. 2000     XXX          XXX         XXX

   6. 2001     XXX          XXX         XXX          XXX

   7. 2002     XXX          XXX         XXX          XXX        XXX

   8. 2003     XXX          XXX         XXX          XXX        XXX        XXX

   9. 2004     XXX          XXX         XXX          XXX        XXX        XXX        XXX

  10. 2005     XXX          XXX         XXX          XXX        XXX        XXX        XXX        XXX                                                 XXX

  11. 2006     XXX          XXX         XXX          XXX        XXX        XXX        XXX        XXX        XXX                           XXX        XXX

                                                                                                                       12. Totals




                                       SCHEDULE P - PART 2O - REINSURANCE
                                                   Nonproportional Assumed Liability
   1. Prior       322         352         353          353        353           353     353        353        353             353

   2. 1997           53           30          30           30         30         30         30         30         30            30

   3. 1998     XXX

   4. 1999     XXX          XXX

   5. 2000     XXX          XXX         XXX

   6. 2001     XXX          XXX         XXX          XXX

   7. 2002     XXX          XXX         XXX          XXX        XXX

   8. 2003     XXX          XXX         XXX          XXX        XXX        XXX

   9. 2004     XXX          XXX         XXX          XXX        XXX        XXX        XXX

  10. 2005     XXX          XXX         XXX          XXX        XXX        XXX        XXX        XXX                                                 XXX

  11. 2006     XXX          XXX         XXX          XXX        XXX        XXX        XXX        XXX        XXX                           XXX        XXX

                                                                                                                       12. Totals




                                       SCHEDULE P - PART 2P - REINSURANCE
                                         Nonproportional Assumed Financial Lines
   1. Prior          50           77          77           77         77         77         77         77         77            77

   2. 1997           7            5           5            5          5          5          5          5          5                 5

   3. 1998     XXX

   4. 1999     XXX          XXX

   5. 2000     XXX          XXX         XXX

   6. 2001     XXX          XXX         XXX          XXX

   7. 2002     XXX          XXX         XXX          XXX        XXX

   8. 2003     XXX          XXX         XXX          XXX        XXX        XXX

   9. 2004     XXX          XXX         XXX          XXX        XXX        XXX        XXX

  10. 2005     XXX          XXX         XXX          XXX        XXX        XXX        XXX        XXX                                                 XXX

  11. 2006     XXX          XXX         XXX          XXX        XXX        XXX        XXX        XXX        XXX                           XXX        XXX

                                                                                                                       12. Totals




                                                                           71
                          ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

    SCHEDULE P - PART 2R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
                 INCURRED NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END ($000 OMITTED)      DEVELOPMENT
Years in Which       1         2        3         4         5        6         7        8         9         10           11      12
 Losses Were
   Incurred        1997      1998      1999      2000     2001      2002      2003      2004      2005      2006      One Year   Two Year

    1. Prior

    2. 1997

    3. 1998

    4. 1999

    5. 2000
                   XXX

                   XXX

                   XXX
                             XXX

                             XXX       XXX
                                                       NONE
    6. 2001        XXX       XXX       XXX       XXX

    7. 2002        XXX       XXX       XXX       XXX       XXX

    8. 2003        XXX       XXX       XXX       XXX       XXX       XXX

    9. 2004        XXX       XXX       XXX       XXX       XXX       XXX      XXX

  10. 2005         XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX                                        XXX

  11. 2006         XXX       XXX       XXX       XXX       XXX      XXX       XXX       XXX       XXX                   XXX        XXX

                                                                                                         12. Totals




    SCHEDULE P - PART 2R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
    1. Prior

    2. 1997




                                                       NONE
    3. 1998        XXX

    4. 1999        XXX       XXX

    5. 2000        XXX       XXX       XXX

    6. 2001        XXX       XXX       XXX       XXX

    7. 2002        XXX       XXX       XXX       XXX       XXX

    8. 2003        XXX       XXX       XXX       XXX       XXX       XXX

    9. 2004        XXX       XXX       XXX       XXX       XXX       XXX      XXX

  10. 2005         XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX                                        XXX

  11. 2006         XXX       XXX       XXX       XXX       XXX      XXX       XXX       XXX       XXX                   XXX        XXX

                                                                                                         12. Totals




       SCHEDULE P - PART 2S - FINANCIAL GUARANTY/MORTGAGE GUARANTY


                                                       NONE
    1. Prior       XXX       XXX       XXX       XXX       XXX       XXX      XXX

    2. 2005        XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX                                        XXX

    3. 2006        XXX       XXX       XXX       XXX       XXX      XXX       XXX       XXX       XXX                   XXX        XXX

                                                                                                          4. Totals




                                                                    72
                         ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                        SCHEDULE P - PART 3A - HOMEOWNERS/FARMOWNERS
                  CUMULATIVE PAID NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END                                11          12
                                                         ($000 OMITTED)                                                                            Number of
                  1         2          3        4          5         6       7        8         9         10                            Number of    Claims
                                                                                                                                          Claims     Closed
Years in Which                                                                                                                         Closed With Without
 Losses Were                                                                                                                               Loss       Loss
   Incurred      1997      1998        1999        2000        2001        2002        2003        2004        2005        2006          Payment    Payment
   1.   Prior    000              11          65          65          65          65          65          65          65          65
   2.   1997                                  10          10          10          10          10          10          10          10
   3.   1998     XXX                          15          15          15          15          15          15          15          15
   4.   1999     XXX       XXX
   5.   2000     XXX       XXX         XXX
   6.   2001     XXX       XXX         XXX         XXX
   7.   2002     XXX       XXX         XXX         XXX         XXX
   8.   2003     XXX       XXX         XXX         XXX         XXX         XXX
   9.   2004     XXX       XXX         XXX         XXX         XXX         XXX         XXX
  10.   2005     XXX       XXX         XXX         XXX         XXX         XXX         XXX         XXX
  11.   2006     XXX       XXX         XXX         XXX         XXX         XXX         XXX         XXX         XXX




        SCHEDULE P - PART 3B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
   1.   Prior    000              4           11          11          11          11          11          11          11          11
   2.   1997                                   1           1           1           1           1           1           1           1
   3.   1998     XXX                           1           1           1           1           1           1           1           1
   4.   1999     XXX       XXX
   5.   2000     XXX       XXX         XXX
   6.   2001     XXX       XXX         XXX         XXX
   7.   2002     XXX       XXX         XXX         XXX         XXX
   8.   2003     XXX       XXX         XXX         XXX         XXX         XXX
   9.   2004     XXX       XXX         XXX         XXX         XXX         XXX         XXX
  10.   2005     XXX       XXX         XXX         XXX         XXX         XXX         XXX         XXX
  11.   2006     XXX       XXX         XXX         XXX         XXX         XXX         XXX         XXX         XXX




        SCHEDULE P - PART 3C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
   1.   Prior    000                          2           2           2           2           2           2           2           2
   2.   1997
   3.   1998     XXX
   4.   1999     XXX       XXX
   5.   2000     XXX       XXX         XXX
   6.   2001     XXX       XXX         XXX         XXX
   7.   2002     XXX       XXX         XXX         XXX         XXX
   8.   2003     XXX       XXX         XXX         XXX         XXX         XXX
   9.   2004     XXX       XXX         XXX         XXX         XXX         XXX         XXX
  10.   2005     XXX       XXX         XXX         XXX         XXX         XXX         XXX         XXX
  11.   2006     XXX       XXX         XXX         XXX         XXX         XXX         XXX         XXX         XXX




                         SCHEDULE P - PART 3D - WORKERS’ COMPENSATION
   1.   Prior    000




                                                      NONE
   2.   1997
   3.   1998     XXX
   4.   1999     XXX       XXX
   5.   2000     XXX       XXX         XXX
   6.   2001     XXX       XXX         XXX         XXX
   7.   2002     XXX       XXX         XXX         XXX         XXX
   8.   2003     XXX       XXX         XXX         XXX         XXX         XXX
   9.   2004     XXX       XXX         XXX         XXX         XXX         XXX         XXX
  10.   2005     XXX       XXX         XXX         XXX         XXX         XXX         XXX         XXX
  11.   2006     XXX       XXX         XXX         XXX         XXX         XXX         XXX         XXX         XXX




                        SCHEDULE P - PART 3E - COMMERCIAL MULTIPLE PERIL
   1.   Prior    000          279         781         781         781           781       781         781         781         781
   2.   1997                               21          21          21            21        21          21          21          21
   3.   1998     XXX              6        71          71          71            71        71          71          71          71
   4.   1999     XXX       XXX
   5.   2000     XXX       XXX         XXX
   6.   2001     XXX       XXX         XXX         XXX
   7.   2002     XXX       XXX         XXX         XXX         XXX
   8.   2003     XXX       XXX         XXX         XXX         XXX         XXX
   9.   2004     XXX       XXX         XXX         XXX         XXX         XXX         XXX
  10.   2005     XXX       XXX         XXX         XXX         XXX         XXX         XXX         XXX                                                    1
  11.   2006     XXX       XXX         XXX         XXX         XXX         XXX         XXX         XXX         XXX                              6




                                                                           73
                             ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

 SCHEDULE P - PART 3F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
                  CUMULATIVE PAID NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END              11          12
                                                         ($000 OMITTED)                                                          Number of
                  1         2          3        4          5         6       7        8         9         10          Number of    Claims




                                                    NONE
                                                                                                                        Claims     Closed
Years in Which                                                                                                       Closed With Without
 Losses Were                                                                                                             Loss       Loss
   Incurred      1997          1998     1999     2000     2001     2002       2003     2004     2005     2006          Payment    Payment
   1.   Prior    000
   2.   1997
   3.   1998     XXX
   4.   1999     XXX           XXX
   5.   2000     XXX           XXX      XXX
   6.   2001     XXX           XXX      XXX      XXX
   7.   2002     XXX           XXX      XXX      XXX      XXX
   8.   2003     XXX           XXX      XXX      XXX      XXX      XXX
   9.   2004     XXX           XXX      XXX      XXX      XXX      XXX        XXX
  10.   2005     XXX           XXX      XXX      XXX      XXX      XXX        XXX      XXX
  11.   2006     XXX           XXX      XXX      XXX      XXX      XXX        XXX      XXX      XXX




 SCHEDULE P - PART 3F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
   1.   Prior    000




                                                    NONE
   2.   1997
   3.   1998     XXX
   4.   1999     XXX           XXX
   5.   2000     XXX           XXX      XXX
   6.   2001     XXX           XXX      XXX      XXX
   7.   2002     XXX           XXX      XXX      XXX      XXX
   8.   2003     XXX           XXX      XXX      XXX      XXX      XXX
   9.   2004     XXX           XXX      XXX      XXX      XXX      XXX        XXX
  10.   2005     XXX           XXX      XXX      XXX      XXX      XXX        XXX      XXX
  11.   2006     XXX           XXX      XXX      XXX      XXX      XXX        XXX      XXX      XXX




                     SCHEDULE P - PART 3G - SPECIAL LIABILITY
            (OCEAN MARINE, AIRCRAFT (ALL PERILS), BOILER AND MACHINERY)
   1.   Prior    000            1,491    6,215    6,215    6,215    6,215      6,215    6,215    6,215    6,215         XXX         XXX
   2.   1997           633      1,362    2,826    2,826    2,826    2,826      2,826    2,826    2,826    2,826         XXX         XXX
   3.   1998     XXX              526    2,167    2,167    2,167    2,167      2,167    2,167    2,167    2,167         XXX         XXX
   4.   1999     XXX           XXX                                                                                      XXX         XXX
   5.   2000     XXX           XXX      XXX                                                                             XXX         XXX
   6.   2001     XXX           XXX      XXX      XXX                                                                    XXX         XXX
   7.   2002     XXX           XXX      XXX      XXX      XXX                                                           XXX         XXX
   8.   2003     XXX           XXX      XXX      XXX      XXX      XXX                                                  XXX         XXX
   9.   2004     XXX           XXX      XXX      XXX      XXX      XXX        XXX                                       XXX         XXX
  10.   2005     XXX           XXX      XXX      XXX      XXX      XXX        XXX      XXX                              XXX         XXX
  11.   2006     XXX           XXX      XXX      XXX      XXX      XXX        XXX      XXX      XXX                     XXX         XXX




         SCHEDULE P - PART 3H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
   1.   Prior    000              187      551      551      551        551      551      551      551         551             37       22
   2.   1997            34        157      632      632      632        632      632      632      632         632             59       46
   3.   1998     XXX               16      769      769      769        769      769      769      769         769             32       20
   4.   1999     XXX           XXX                                                                                             57       40
   5.   2000     XXX           XXX      XXX                                                                                    81       45
   6.   2001     XXX           XXX      XXX      XXX                                                                          272      138
   7.   2002     XXX           XXX      XXX      XXX      XXX                                                                 672      329
   8.   2003     XXX           XXX      XXX      XXX      XXX      XXX                                                        593      289
   9.   2004     XXX           XXX      XXX      XXX      XXX      XXX        XXX                                             453      309
  10.   2005     XXX           XXX      XXX      XXX      XXX      XXX        XXX      XXX                                    234      432
  11.   2006     XXX           XXX      XXX      XXX      XXX      XXX        XXX      XXX      XXX                            41       90



         SCHEDULE P - PART 3H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
   1.   Prior    000
   2.   1997
   3.   1998     XXX
   4.   1999     XXX           XXX
   5.   2000     XXX           XXX      XXX
   6.   2001     XXX           XXX      XXX      XXX
   7.   2002     XXX           XXX      XXX      XXX      XXX                                                                 13         6
   8.   2003     XXX           XXX      XXX      XXX      XXX      XXX                                                        13        36
   9.   2004     XXX           XXX      XXX      XXX      XXX      XXX        XXX                                              3        46
  10.   2005     XXX           XXX      XXX      XXX      XXX      XXX        XXX      XXX                                     5       106
  11.   2006     XXX           XXX      XXX      XXX      XXX      XXX        XXX      XXX      XXX                            5        26




                                                                   74
                        ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                  SCHEDULE P - PART 3I - SPECIAL PROPERTY
 (FIRE, ALLIED LINES, INLAND MARINE, EARTHQUAKE, BURGLARY, AND THEFT)
                  CUMULATIVE PAID NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END         11          12
                                                         ($000 OMITTED)                                                     Number of
                  1         2          3        4          5         6       7        8         9         10     Number of    Claims
                                                                                                                   Claims     Closed
Years in Which                                                                                                  Closed With Without
 Losses Were                                                                                                        Loss       Loss
   Incurred      1997     1998      1999      2000      2001     2002      2003      2004      2005      2006     Payment    Payment

    1. Prior     XXX      XXX       XXX       XXX       XXX       XXX       XXX       000                          XXX        XXX

    2. 2005      XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX                           XXX        XXX

    3. 2006      XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX                 XXX        XXX




                         SCHEDULE P - PART 3J - AUTO PHYSICAL DAMAGE
    1. Prior     XXX      XXX       XXX       XXX       XXX       XXX       XXX       000

    2. 2005      XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX

    3. 2006      XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX




                                 SCHEDULE P - PART 3K - FIDELITY/SURETY
    1. Prior     XXX      XXX       XXX       XXX       XXX       XXX       XXX       000                          XXX        XXX

    2. 2005      XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX                           XXX        XXX

    3. 2006      XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX                 XXX        XXX




 SCHEDULE P - PART 3L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)


                                                 NONE
    1. Prior     XXX      XXX       XXX       XXX       XXX       XXX       XXX       000                          XXX        XXX

    2. 2005      XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX                           XXX        XXX

    3. 2006      XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX                 XXX        XXX




                                 SCHEDULE P - PART 3M - INTERNATIONAL
    1. Prior     000                                                                                               XXX        XXX

    2. 1997                                                                                                        XXX        XXX

    3. 1998

    4. 1999

    5. 2000
                 XXX

                 XXX

                 XXX
                          XXX

                          XXX       XXX
                                                 NONE                                                              XXX

                                                                                                                   XXX

                                                                                                                   XXX
                                                                                                                              XXX

                                                                                                                              XXX

                                                                                                                              XXX

    6. 2001      XXX      XXX       XXX       XXX                                                                  XXX        XXX

    7. 2002      XXX      XXX       XXX       XXX       XXX                                                        XXX        XXX

    8. 2003      XXX      XXX       XXX       XXX       XXX       XXX                                              XXX        XXX

    9. 2004      XXX      XXX       XXX       XXX       XXX       XXX       XXX                                    XXX        XXX

  10. 2005       XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX                           XXX        XXX

  11. 2006       XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX                 XXX        XXX




                                                                 75
                             ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                           SCHEDULE P - PART 3N - REINSURANCE
                                                        Nonproportional Assumed Property
                  CUMULATIVE PAID NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END                                       11          12
                                                         ($000 OMITTED)                                                                                   Number of
                  1         2          3        4          5         6       7        8         9         10                                   Number of    Claims
                                                                                                                                                 Claims     Closed
Years in Which                                                                                                                                Closed With Without
 Losses Were                                                                                                                                      Loss       Loss
   Incurred      1997          1998         1999          2000        2001        2002        2003        2004        2005        2006          Payment    Payment

    1. Prior     000              226          446           446         446           446       446         446         446         446         XXX        XXX

    2. 1997             33            63           93            93          93          93          93          93          93          93      XXX        XXX

    3. 1998      XXX                                                                                                                             XXX        XXX

    4. 1999      XXX           XXX                                                                                                               XXX        XXX

    5. 2000      XXX           XXX          XXX                                                                                                  XXX        XXX

    6. 2001      XXX           XXX          XXX           XXX                                                                                    XXX        XXX

    7. 2002      XXX           XXX          XXX           XXX         XXX                                                                        XXX        XXX

    8. 2003      XXX           XXX          XXX           XXX         XXX         XXX                                                            XXX        XXX

    9. 2004      XXX           XXX          XXX           XXX         XXX         XXX         XXX                                                XXX        XXX

  10. 2005       XXX           XXX          XXX           XXX         XXX         XXX         XXX         XXX                                    XXX        XXX

  11. 2006       XXX           XXX          XXX           XXX         XXX         XXX         XXX         XXX         XXX                        XXX        XXX




                                           SCHEDULE P - PART 3O - REINSURANCE
                                                        Nonproportional Assumed Liability
    1. Prior     000              129          353           353         353           353       353         353         353         353         XXX        XXX

    2. 1997             14            16           30            30          30          30          30          30          30          30      XXX        XXX

    3. 1998      XXX                                                                                                                             XXX        XXX

    4. 1999      XXX           XXX                                                                                                               XXX        XXX

    5. 2000      XXX           XXX          XXX                                                                                                  XXX        XXX

    6. 2001      XXX           XXX          XXX           XXX                                                                                    XXX        XXX

    7. 2002      XXX           XXX          XXX           XXX         XXX                                                                        XXX        XXX

    8. 2003      XXX           XXX          XXX           XXX         XXX         XXX                                                            XXX        XXX

    9. 2004      XXX           XXX          XXX           XXX         XXX         XXX         XXX                                                XXX        XXX

  10. 2005       XXX           XXX          XXX           XXX         XXX         XXX         XXX         XXX                                    XXX        XXX

  11. 2006       XXX           XXX          XXX           XXX         XXX         XXX         XXX         XXX         XXX                        XXX        XXX




                                           SCHEDULE P - PART 3P - REINSURANCE
                                             Nonproportional Assumed Financial Lines
    1. Prior     000                  19           77            77          77          77          77          77          77          77      XXX        XXX

    2. 1997                           3            5             5           5           5           5           5           5           5       XXX        XXX

    3. 1998      XXX                                                                                                                             XXX        XXX

    4. 1999      XXX           XXX                                                                                                               XXX        XXX

    5. 2000      XXX           XXX          XXX                                                                                                  XXX        XXX

    6. 2001      XXX           XXX          XXX           XXX                                                                                    XXX        XXX

    7. 2002      XXX           XXX          XXX           XXX         XXX                                                                        XXX        XXX

    8. 2003      XXX           XXX          XXX           XXX         XXX         XXX                                                            XXX        XXX

    9. 2004      XXX           XXX          XXX           XXX         XXX         XXX         XXX                                                XXX        XXX

  10. 2005       XXX           XXX          XXX           XXX         XXX         XXX         XXX         XXX                                    XXX        XXX

  11. 2006       XXX           XXX          XXX           XXX         XXX         XXX         XXX         XXX         XXX                        XXX        XXX




                                                                                  76
                        ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

    SCHEDULE P - PART 3R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
                  CUMULATIVE PAID NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END         11          12
                                                         ($000 OMITTED)                                                     Number of
                  1         2          3        4          5         6       7        8         9         10     Number of    Claims
                                                                                                                   Claims     Closed
Years in Which                                                                                                  Closed With Without
 Losses Were                                                                                                        Loss       Loss
   Incurred      1997     1998      1999      2000      2001     2002      2003      2004      2005      2006     Payment    Payment




                                                 NONE
    1. Prior     000

    2. 1997

    3. 1998      XXX

    4. 1999      XXX      XXX

    5. 2000      XXX      XXX       XXX

    6. 2001      XXX      XXX       XXX       XXX

    7. 2002      XXX      XXX       XXX       XXX       XXX

    8. 2003      XXX      XXX       XXX       XXX       XXX       XXX

    9. 2004      XXX      XXX       XXX       XXX       XXX       XXX       XXX

  10. 2005       XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX

  11. 2006       XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX




   SCHEDULE P - PART 3R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
    1. Prior     000

    2. 1997

    3. 1998

    4. 1999

    5. 2000
                 XXX

                 XXX

                 XXX
                          XXX

                          XXX       XXX
                                                 NONE
    6. 2001      XXX      XXX       XXX       XXX

    7. 2002      XXX      XXX       XXX       XXX       XXX

    8. 2003      XXX      XXX       XXX       XXX       XXX       XXX

    9. 2004      XXX      XXX       XXX       XXX       XXX       XXX       XXX

  10. 2005       XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX

  11. 2006       XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX




       SCHEDULE P - PART 3S - FINANCIAL GUARANTY/MORTGAGE GUARANTY


                                                 NONE
    1. Prior     XXX      XXX       XXX       XXX       XXX       XXX       XXX       000                          XXX        XXX

    2. 2005      XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX                           XXX        XXX

    3. 2006      XXX      XXX       XXX       XXX       XXX       XXX       XXX      XXX       XXX                 XXX        XXX




                                                                 77
                           ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                          SCHEDULE P - PART 4A - HOMEOWNERS/FARMOWNERS
                 BULK AND IBNR RESERVES ON NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END ($000 OMITTED)
Years in Which      1            2          3           4          5           6          7          8           9            10
 Losses Were
   Incurred        1997         1998        1999      2000        2001       2002        2003        2004        2005        2006
   1.   Prior             82           51
   2.   1997              18           10
   3.   1998       XXX                 15
   4.   1999       XXX          XXX
   5.   2000       XXX          XXX         XXX
   6.   2001       XXX          XXX         XXX       XXX
   7.   2002       XXX          XXX         XXX       XXX         XXX
   8.   2003       XXX          XXX         XXX       XXX         XXX         XXX
   9.   2004       XXX          XXX         XXX       XXX         XXX         XXX         XXX
  10.   2005       XXX          XXX         XXX       XXX         XXX         XXX         XXX         XXX
  11.   2006       XXX          XXX         XXX       XXX         XXX         XXX         XXX         XXX        XXX




        SCHEDULE P - PART 4B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
   1.   Prior             10           3
   2.   1997
   3.   1998       XXX
   4.   1999       XXX          XXX
   5.   2000       XXX          XXX         XXX
   6.   2001       XXX          XXX         XXX       XXX
   7.   2002       XXX          XXX         XXX       XXX         XXX
   8.   2003       XXX          XXX         XXX       XXX         XXX         XXX
   9.   2004       XXX          XXX         XXX       XXX         XXX         XXX         XXX
  10.   2005       XXX          XXX         XXX       XXX         XXX         XXX         XXX         XXX
  11.   2006       XXX          XXX         XXX       XXX         XXX         XXX         XXX         XXX        XXX




        SCHEDULE P - PART 4C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
   1.   Prior              7
   2.   1997
   3.   1998       XXX
   4.   1999       XXX          XXX
   5.   2000       XXX          XXX         XXX
   6.   2001       XXX          XXX         XXX       XXX
   7.   2002       XXX          XXX         XXX       XXX         XXX
   8.   2003       XXX          XXX         XXX       XXX         XXX         XXX
   9.   2004       XXX          XXX         XXX       XXX         XXX         XXX         XXX
  10.   2005       XXX          XXX         XXX       XXX         XXX         XXX         XXX         XXX
  11.   2006       XXX          XXX         XXX       XXX         XXX         XXX         XXX         XXX        XXX




                           SCHEDULE P - PART 4D - WORKERS’ COMPENSATION
   1.   Prior




                                                   NONE
   2.   1997
   3.   1998       XXX
   4.   1999       XXX          XXX
   5.   2000       XXX          XXX         XXX
   6.   2001       XXX          XXX         XXX       XXX
   7.   2002       XXX          XXX         XXX       XXX         XXX
   8.   2003       XXX          XXX         XXX       XXX         XXX         XXX
   9.   2004       XXX          XXX         XXX       XXX         XXX         XXX         XXX
  10.   2005       XXX          XXX         XXX       XXX         XXX         XXX         XXX         XXX
  11.   2006       XXX          XXX         XXX       XXX         XXX         XXX         XXX         XXX        XXX




                          SCHEDULE P - PART 4E - COMMERCIAL MULTIPLE PERIL
   1.   Prior             110          71
   2.   1997               18          20
   3.   1998       XXX                 25
   4.   1999       XXX          XXX
   5.   2000       XXX          XXX         XXX
   6.   2001       XXX          XXX         XXX       XXX
   7.   2002       XXX          XXX         XXX       XXX         XXX
   8.   2003       XXX          XXX         XXX       XXX         XXX         XXX
   9.   2004       XXX          XXX         XXX       XXX         XXX         XXX         XXX
  10.   2005       XXX          XXX         XXX       XXX         XXX         XXX         XXX         XXX
  11.   2006       XXX          XXX         XXX       XXX         XXX         XXX         XXX         XXX        XXX




                                                                   78
                           ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

 SCHEDULE P - PART 4F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
                 BULK AND IBNR RESERVES ON NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END ($000 OMITTED)




                                                    NONE
Years in Which      1            2          3           4          5           6          7          8           9            10
 Losses Were
   Incurred        1997         1998         1999     2000        2001       2002        2003        2004        2005        2006
   1.   Prior
   2.   1997
   3.   1998       XXX
   4.   1999       XXX          XXX
   5.   2000       XXX          XXX          XXX
   6.   2001       XXX          XXX          XXX      XXX
   7.   2002       XXX          XXX          XXX      XXX         XXX
   8.   2003       XXX          XXX          XXX      XXX         XXX         XXX
   9.   2004       XXX          XXX          XXX      XXX         XXX         XXX         XXX
  10.   2005       XXX          XXX          XXX      XXX         XXX         XXX         XXX         XXX
  11.   2006       XXX          XXX          XXX      XXX         XXX         XXX         XXX         XXX        XXX




 SCHEDULE P - PART 4F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
   1.   Prior




                                                    NONE
   2.   1997
   3.   1998       XXX
   4.   1999       XXX          XXX
   5.   2000       XXX          XXX          XXX
   6.   2001       XXX          XXX          XXX      XXX
   7.   2002       XXX          XXX          XXX      XXX         XXX
   8.   2003       XXX          XXX          XXX      XXX         XXX         XXX
   9.   2004       XXX          XXX          XXX      XXX         XXX         XXX         XXX
  10.   2005       XXX          XXX          XXX      XXX         XXX         XXX         XXX         XXX
  11.   2006       XXX          XXX          XXX      XXX         XXX         XXX         XXX         XXX        XXX




                     SCHEDULE P - PART 4G - SPECIAL LIABILITY
            (OCEAN MARINE, AIRCRAFT (ALL PERILS), BOILER AND MACHINERY)
   1.   Prior        3,578        2,694
   2.   1997         1,604          770
   3.   1998       XXX            1,100
   4.   1999       XXX          XXX
   5.   2000       XXX          XXX          XXX
   6.   2001       XXX          XXX          XXX      XXX
   7.   2002       XXX          XXX          XXX      XXX         XXX
   8.   2003       XXX          XXX          XXX      XXX         XXX         XXX
   9.   2004       XXX          XXX          XXX      XXX         XXX         XXX         XXX
  10.   2005       XXX          XXX          XXX      XXX         XXX         XXX         XXX         XXX
  11.   2006       XXX          XXX          XXX      XXX         XXX         XXX         XXX         XXX        XXX




         SCHEDULE P - PART 4H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
   1.   Prior             304          254
   2.   1997              504          355
   3.   1998       XXX                 703
   4.   1999       XXX          XXX
   5.   2000       XXX          XXX          XXX
   6.   2001       XXX          XXX          XXX      XXX
   7.   2002       XXX          XXX          XXX      XXX         XXX
   8.   2003       XXX          XXX          XXX      XXX         XXX         XXX
   9.   2004       XXX          XXX          XXX      XXX         XXX         XXX         XXX
  10.   2005       XXX          XXX          XXX      XXX         XXX         XXX         XXX         XXX
  11.   2006       XXX          XXX          XXX      XXX         XXX         XXX         XXX         XXX        XXX




         SCHEDULE P - PART 4H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
   1.   Prior
   2.   1997
   3.   1998       XXX
   4.   1999       XXX          XXX
   5.   2000       XXX          XXX          XXX
   6.   2001       XXX          XXX          XXX      XXX
   7.   2002       XXX          XXX          XXX      XXX         XXX
   8.   2003       XXX          XXX          XXX      XXX         XXX         XXX
   9.   2004       XXX          XXX          XXX      XXX         XXX         XXX         XXX
  10.   2005       XXX          XXX          XXX      XXX         XXX         XXX         XXX         XXX
  11.   2006       XXX          XXX          XXX      XXX         XXX         XXX         XXX         XXX        XXX




                                                                   79
                          ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                 SCHEDULE P - PART 4I - SPECIAL PROPERTY
 (FIRE, ALLIED LINES, INLAND MARINE, EARTHQUAKE, BURGLARY AND THEFT)
                 BULK AND IBNR RESERVES ON NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END ($000 OMITTED)
Years in Which      1            2          3           4          5           5          7          8           9            10
 Losses Were
   Incurred        1997       1998        1999        2000        2001       2002        2003        2004        2005        2006

    1. Prior       XXX         XXX         XXX        XXX         XXX         XXX         XXX

    2. 2005        XXX         XXX         XXX        XXX         XXX         XXX         XXX         XXX

    3. 2006        XXX         XXX         XXX        XXX         XXX         XXX         XXX         XXX        XXX




                           SCHEDULE P - PART 4J - AUTO PHYSICAL DAMAGE
    1. Prior       XXX         XXX         XXX        XXX         XXX         XXX         XXX

    2. 2005        XXX         XXX         XXX        XXX         XXX         XXX         XXX         XXX

    3. 2006        XXX         XXX         XXX        XXX         XXX         XXX         XXX         XXX        XXX




                                 SCHEDULE P - PART 4K - FIDELITY/SURETY
    1. Prior       XXX         XXX         XXX        XXX         XXX         XXX         XXX

    2. 2005        XXX         XXX         XXX        XXX         XXX         XXX         XXX         XXX

    3. 2006        XXX         XXX         XXX        XXX         XXX         XXX         XXX         XXX        XXX




 SCHEDULE P - PART 4L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)


                                                   NONE
    1. Prior       XXX         XXX         XXX        XXX         XXX         XXX         XXX

    2. 2005        XXX         XXX         XXX        XXX         XXX         XXX         XXX         XXX

    3. 2006        XXX         XXX         XXX        XXX         XXX         XXX         XXX         XXX        XXX




                                  SCHEDULE P - PART 4M - INTERNATIONAL
    1. Prior

    2. 1997

    3. 1998

    4. 1999

    5. 2000
                   XXX

                   XXX

                   XXX
                               XXX

                               XXX         XXX
                                                   NONE
    6. 2001        XXX         XXX         XXX        XXX

    7. 2002        XXX         XXX         XXX        XXX         XXX

    8. 2003        XXX         XXX         XXX        XXX         XXX         XXX

    9. 2004        XXX         XXX         XXX        XXX         XXX         XXX         XXX

  10. 2005         XXX         XXX         XXX        XXX         XXX         XXX         XXX         XXX

  11. 2006         XXX         XXX         XXX        XXX         XXX         XXX         XXX         XXX        XXX




                                                                   80
                           ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                       SCHEDULE P - PART 4N - REINSURANCE
                                               Nonproportional Assumed Property
                 BULK AND IBNR RESERVES ON NET LOSSES AND DEFENSE AND COST CONTAINMENT EXPENSES REPORTED AT YEAR END ($000 OMITTED)
Years in Which      1            2          3           4          5           6          7          8           9            10
 Losses Were
   Incurred        1997         1998        1999         2000     2001       2002        2003        2004        2005        2006

    1. Prior              189          69

    2. 1997               108          22

    3. 1998        XXX

    4. 1999        XXX          XXX

    5. 2000        XXX          XXX          XXX

    6. 2001        XXX          XXX          XXX         XXX

    7. 2002        XXX          XXX          XXX         XXX      XXX

    8. 2003        XXX          XXX          XXX         XXX      XXX         XXX

    9. 2004        XXX          XXX          XXX         XXX      XXX         XXX         XXX

    9. 2005        XXX          XXX          XXX         XXX      XXX         XXX         XXX         XXX

  11. 2006         XXX          XXX          XXX         XXX      XXX         XXX         XXX         XXX        XXX




                                       SCHEDULE P - PART 4O - REINSURANCE
                                                   Nonproportional Assumed Liability
    1. Prior              91           39

    2. 1997               35           11

    3. 1998        XXX

    4. 1999        XXX          XXX

    5. 2000        XXX          XXX          XXX

    6. 2001        XXX          XXX          XXX         XXX

    7. 2002        XXX          XXX          XXX         XXX      XXX

    8. 2003        XXX          XXX          XXX         XXX      XXX         XXX

    9. 2004        XXX          XXX          XXX         XXX      XXX         XXX         XXX

    9. 2005        XXX          XXX          XXX         XXX      XXX         XXX         XXX         XXX

  11. 2006         XXX          XXX          XXX         XXX      XXX         XXX         XXX         XXX        XXX




                                       SCHEDULE P - PART 4P - REINSURANCE
                                            Nonproportional Assumed Financial Lines
    1. Prior              20           8

    2. 1997                6

    3. 1998        XXX

    4. 1999        XXX          XXX

    5. 2000        XXX          XXX          XXX

    6. 2001        XXX          XXX          XXX         XXX

    7. 2002        XXX          XXX          XXX         XXX      XXX

    8. 2003        XXX          XXX          XXX         XXX      XXX         XXX

    9. 2004        XXX          XXX          XXX         XXX      XXX         XXX         XXX

    9. 2005        XXX          XXX          XXX         XXX      XXX         XXX         XXX         XXX

  11. 2006         XXX          XXX          XXX         XXX      XXX         XXX         XXX         XXX        XXX




                                                                   81
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




          Schedule P - Part 4R - Prod Liab Occur

                        NONE
          Schedule P - Part 4R - Prod Liab Claims

                        NONE
                    Schedule P - Part 4S

                        NONE
                 Schedule P - Part 5A- SN1

                        NONE
                 Schedule P - Part 5A- SN2

                        NONE
                 Schedule P - Part 5A- SN3

                        NONE
                 Schedule P - Part 5B- SN1

                        NONE
                 Schedule P - Part 5B- SN2

                        NONE
                 Schedule P - Part 5B- SN3

                        NONE
                 Schedule P - Part 5C- SN1

                        NONE
                 Schedule P - Part 5C- SN2

                        NONE




                         82, 83, 84, 85
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




                 Schedule P - Part 5C- SN3

                        NONE
                 Schedule P - Part 5D- SN1

                        NONE
                 Schedule P - Part 5D- SN2

                        NONE
                 Schedule P - Part 5D- SN3

                        NONE




                             85, 86
                        ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                SCHEDULE P - PART 5E - COMMERCIAL MULTIPLE PERIL
                                                           SECTION 1
                             CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END
   Years in       1          2           3          4           5           6          7           8           9     10
    Which
  Premiums
Were Earned
 and Losses
Were Incurred    1997       1998       1999        2000       2001        2002        2003       2004        2005   2006

   1. Prior

   2. 1997

   3. 1998        XXX

   4. 1999        XXX       XXX

   5. 2000        XXX       XXX         XXX
   6. 2001        XXX       XXX         XXX        XXX
   7. 2002        XXX       XXX         XXX        XXX         XXX
   8. 2003        XXX       XXX         XXX        XXX         XXX        XXX
   9. 2004        XXX       XXX         XXX        XXX         XXX        XXX         XXX

  10. 2005        XXX       XXX         XXX        XXX         XXX        XXX         XXX         XXX

  11. 2006        XXX       XXX         XXX        XXX         XXX        XXX         XXX         XXX        XXX           6




                                                           SECTION 2
                                        NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END
   Years in       1          2          3          4           5           6          7           8           9      10
    Which
  Premiums
Were Earned
 and Losses
Were Incurred    1997       1998       1999        2000       2001        2002        2003       2004        2005   2006

   1. Prior

   2. 1997

   3. 1998        XXX
   4. 1999        XXX       XXX
   5. 2000        XXX       XXX         XXX

   6. 2001        XXX       XXX         XXX        XXX
   7. 2002        XXX       XXX         XXX        XXX         XXX
   8. 2003        XXX       XXX         XXX        XXX         XXX        XXX

   9. 2004        XXX       XXX         XXX        XXX         XXX        XXX         XXX
  10. 2005        XXX       XXX         XXX        XXX         XXX        XXX         XXX         XXX                      9
  11. 2006        XXX       XXX         XXX        XXX         XXX        XXX         XXX         XXX        XXX           78




                                                           SECTION 3
                                    CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END
   Years in       1          2         3           4           5           6          7           8           9      10
    Which
  Premiums
Were Earned
 and Losses
Were Incurred    1997       1998       1999        2000       2001        2002        2003       2004        2005   2006

   1. Prior

   2. 1997

   3. 1998        XXX
   4. 1999        XXX       XXX
   5. 2000        XXX       XXX         XXX

   6. 2001        XXX       XXX         XXX        XXX
   7. 2002        XXX       XXX         XXX        XXX         XXX
   8. 2003        XXX       XXX         XXX        XXX         XXX        XXX
   9. 2004        XXX       XXX         XXX        XXX         XXX        XXX         XXX

  10. 2005        XXX       XXX         XXX        XXX         XXX        XXX         XXX         XXX                      10
  11. 2006        XXX       XXX         XXX        XXX         XXX        XXX         XXX         XXX        XXX           84




                                                               87
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




                Schedule P - Part 5F- SN1A

                        NONE
                Schedule P - Part 5F- SN2A

                        NONE
                Schedule P - Part 5F- SN3A

                        NONE
                Schedule P - Part 5F- SN1B

                        NONE
                Schedule P - Part 5F- SN2B

                        NONE
                Schedule P - Part 5F- SN3B

                        NONE




                             88, 89
                       ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

           SCHEDULE P - PART 5H - OTHER LIABILITY - OCCURRENCE
                                                         SECTION 1A
                            CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END
   Years in      1          2           3          4           5           6          7           8           9               10
    Which
  Premiums
Were Earned
 and Losses
Were Incurred   1997       1998       1999        2000       2001        2002         2003         2004         2005         2006

   1. Prior                                                                     15           13            5            4
   2. 1997                                                                      23           44           50           57           59
   3. 1998      XXX                                                              8           19           26           31           32
   4. 1999      XXX        XXX                                                  28           41           48           53           57
   5. 2000      XXX        XXX         XXX                                      22           52           70           78           81
   6. 2001      XXX        XXX         XXX        XXX                           49           148          212          266          272
   7. 2002      XXX        XXX         XXX        XXX         XXX               40           281          478          636          672
   8. 2003      XXX        XXX         XXX        XXX         XXX        XXX                 84           351          545          593
   9. 2004      XXX        XXX         XXX        XXX         XXX        XXX          XXX                 157          384          453
  10. 2005      XXX        XXX         XXX        XXX         XXX        XXX          XXX          XXX                 143          234
  11. 2006      XXX        XXX         XXX        XXX         XXX        XXX          XXX          XXX          XXX                 41




                                                         SECTION 2A
                                       NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END
   Years in      1          2          3          4           5           6          7           8               9            10
    Which
  Premiums
Were Earned
 and Losses
Were Incurred   1997       1998       1999        2000       2001        2002         2003         2004         2005         2006

   1. Prior                                                                     10            8            2            2            2
   2. 1997                                                                      12           16            5            5            6
   3. 1998      XXX                                                             21            8            5            6            2
   4. 1999      XXX        XXX                                                  40            8            5            7            5
   5. 2000      XXX        XXX         XXX                                      26           19            9            9           11
   6. 2001      XXX        XXX         XXX        XXX                           61           95           41           46           31
   7. 2002      XXX        XXX         XXX        XXX         XXX               85           316          129          175          82
   8. 2003      XXX        XXX         XXX        XXX         XXX        XXX                 189          154          238          114
   9. 2004      XXX        XXX         XXX        XXX         XXX        XXX          XXX                 213          319          174
  10. 2005      XXX        XXX         XXX        XXX         XXX        XXX          XXX          XXX                 189          191
  11. 2006      XXX        XXX         XXX        XXX         XXX        XXX          XXX          XXX          XXX                 235




                                                         SECTION 3A
                                   CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END
   Years in      1          2         3           4           5           6          7           8               9            10
    Which
  Premiums
Were Earned
 and Losses
Were Incurred   1997       1998       1999        2000       2001        2002         2003         2004         2005         2006

   1. Prior                                                                     33           18           (1)           9            2
   2. 1997                                                                      59           99           94           105          111
   3. 1998      XXX                                                             38           40           44           52           54
   4. 1999      XXX        XXX                                                  83           74           78           89           102
   5. 2000      XXX        XXX         XXX                                      62           101          109          123          137
   6. 2001      XXX        XXX         XXX        XXX                           140          317          327          418          441
   7. 2002      XXX        XXX         XXX        XXX         XXX               142          737          747        1,036     1,083
   8. 2003      XXX        XXX         XXX        XXX         XXX        XXX                 301          533          921          996
   9. 2004      XXX        XXX         XXX        XXX         XXX        XXX          XXX                 370          856          936
  10. 2005      XXX        XXX         XXX        XXX         XXX        XXX          XXX          XXX                 533          857
  11. 2006      XXX        XXX         XXX        XXX         XXX        XXX          XXX          XXX          XXX                 366




                                                              90
                       ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

              SCHEDULE P - PART 5H - OTHER LIABILITY - CLAIMS-MADE
                                                         SECTION 1B
                            CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END
   Years in      1          2           3          4           5           6          7           8           9            10
    Which
  Premiums
Were Earned
 and Losses
Were Incurred   1997       1998       1999        2000       2001        2002        2003        2004        2005         2006

   1. Prior

   2. 1997

   3. 1998       XXX

   4. 1999       XXX       XXX

   5. 2000       XXX       XXX         XXX
   6. 2001       XXX       XXX         XXX        XXX
   7. 2002       XXX       XXX         XXX        XXX         XXX                           13          13          13           13
   8. 2003       XXX       XXX         XXX        XXX         XXX        XXX                3           11          11           13
   9. 2004       XXX       XXX         XXX        XXX         XXX        XXX         XXX                1            1            3
  10. 2005       XXX       XXX         XXX        XXX         XXX        XXX         XXX         XXX                              5
  11. 2006       XXX       XXX         XXX        XXX         XXX        XXX         XXX         XXX         XXX                  5




                                                         SECTION 2B
                                       NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END
   Years in      1          2          3          4           5           6          7           8            9            10
    Which
  Premiums
Were Earned
 and Losses
Were Incurred   1997       1998       1999        2000       2001        2002        2003        2004        2005         2006

   1. Prior

   2. 1997

   3. 1998       XXX
   4. 1999       XXX       XXX
   5. 2000       XXX       XXX         XXX

   6. 2001       XXX       XXX         XXX        XXX
   7. 2002       XXX       XXX         XXX        XXX         XXX               2                       1
   8. 2003       XXX       XXX         XXX        XXX         XXX        XXX                55          40          28           18
   9. 2004       XXX       XXX         XXX        XXX         XXX        XXX         XXX                71          88           44
  10. 2005       XXX       XXX         XXX        XXX         XXX        XXX         XXX         XXX                118          71
  11. 2006       XXX       XXX         XXX        XXX         XXX        XXX         XXX         XXX         XXX                 162




                                                         SECTION 3B
                                   CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END
   Years in      1          2         3           4           5           6          7           8            9            10
    Which
  Premiums
Were Earned
 and Losses
Were Incurred   1997       1998       1999        2000       2001        2002        2003        2004        2005         2006

   1. Prior

   2. 1997

   3. 1998       XXX
   4. 1999       XXX       XXX
   5. 2000       XXX       XXX         XXX

   6. 2001       XXX       XXX         XXX        XXX
   7. 2002       XXX       XXX         XXX        XXX         XXX               3           15          16          18           19
   8. 2003       XXX       XXX         XXX        XXX         XXX        XXX                72          70          59           67
   9. 2004       XXX       XXX         XXX        XXX         XXX        XXX         XXX                76          105          93
  10. 2005       XXX       XXX         XXX        XXX         XXX        XXX         XXX         XXX                158          182
  11. 2006       XXX       XXX         XXX        XXX         XXX        XXX         XXX         XXX         XXX                 193




                                                              91
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




                Schedule P - Part 5R- SN1A

                        NONE
                Schedule P - Part 5R- SN2A

                        NONE
                Schedule P - Part 5R- SN3A

                        NONE
                Schedule P - Part 5R- SN1B

                        NONE
                Schedule P - Part 5R- SN2B

                        NONE
                Schedule P - Part 5R- SN3B

                        NONE




                             92, 93
                       ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                SCHEDULE P - PART 6C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
                                                           SECTION 1
                                CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)              11
  Years in Which       1       2         3         4         5          6         7          8         9     10     Current
  Premiums Were                                                                                                      Year
Earned and Losses                                                                                                  Premiums
   Were Incurred      1997    1998     1999       2000      2001       2002      2003      2004      2005   2006    Earned
 1. Prior
 2. 1997
 3. 1998              XXX
 4. 1999              XXX      XXX
 5. 2000              XXX      XXX      XXX
 6. 2001              XXX      XXX      XXX       XXX
 7. 2002              XXX      XXX      XXX       XXX       XXX
 8. 2003              XXX      XXX      XXX       XXX       XXX        XXX
 9. 2004              XXX      XXX      XXX       XXX       XXX        XXX       XXX
10. 2005              XXX      XXX      XXX       XXX       XXX        XXX       XXX       XXX
11. 2006              XXX      XXX      XXX       XXX       XXX        XXX       XXX       XXX       XXX
12. Total             XXX      XXX      XXX       XXX       XXX        XXX       XXX       XXX       XXX    XXX
13. Earned
    Premiums
    (Sch P, Part 1)                                                                                                  XXX



                                                           SECTION 2
                                      CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)                     11
  Years in Which       1       2         3         4         5        6          7           8         9     10     Current
  Premiums Were                                                                                                      Year
Earned and Losses                                                                                                  Premiums
   Were Incurred      1997    1998     1999       2000      2001       2002      2003      2004      2005   2006    Earned
 1. Prior
 2. 1997
 3. 1998              XXX
 4. 1999              XXX      XXX
 5. 2000              XXX      XXX      XXX
 6. 2001              XXX      XXX      XXX       XXX
 7. 2002              XXX      XXX      XXX       XXX       XXX
 8. 2003              XXX      XXX      XXX       XXX       XXX        XXX
 9. 2004              XXX      XXX      XXX       XXX       XXX        XXX       XXX
10. 2005              XXX      XXX      XXX       XXX       XXX        XXX       XXX       XXX
11. 2006              XXX      XXX      XXX       XXX       XXX        XXX       XXX       XXX       XXX
12. Total             XXX      XXX      XXX       XXX       XXX        XXX       XXX       XXX       XXX    XXX
13. Earned
    Premiums
    (Sch P, Part 1)                                                                                                  XXX



                             SCHEDULE P - PART 6D - WORKERS' COMPENSATION
                                                           SECTION 1
                                CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)              11
  Years in Which       1       2         3         4         5          6         7          8         9     10     Current




                                               NONE
  Premiums Were                                                                                                      Year
Earned and Losses                                                                                                  Premiums
   Were Incurred      1997    1998     1999       2000      2001       2002      2003      2004      2005   2006    Earned
 1. Prior
 2. 1997
 3. 1998              XXX
 4. 1999              XXX      XXX
 5. 2000              XXX      XXX      XXX
 6. 2001              XXX      XXX      XXX       XXX
 7. 2002              XXX      XXX      XXX       XXX       XXX
 8. 2003              XXX      XXX      XXX       XXX       XXX        XXX
 9. 2004              XXX      XXX      XXX       XXX       XXX        XXX       XXX
10. 2005              XXX      XXX      XXX       XXX       XXX        XXX       XXX       XXX
11. 2006              XXX      XXX      XXX       XXX       XXX        XXX       XXX       XXX       XXX
12. Total             XXX      XXX      XXX       XXX       XXX        XXX       XXX       XXX       XXX    XXX
13. Earned
    Premiums
    (Sch P, Part 1)                                                                                                  XXX



                                                           SECTION 2
                                      CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)                     11
  Years in Which       1       2         3         4         5        6          7           8         9     10     Current




                                               NONE
  Premiums Were                                                                                                      Year
Earned and Losses                                                                                                  Premiums
   Were Incurred      1997    1998     1999       2000      2001       2002      2003      2004      2005   2006    Earned
 1. Prior
 2. 1997
 3. 1998              XXX
 4. 1999              XXX      XXX
 5. 2000              XXX      XXX      XXX
 6. 2001              XXX      XXX      XXX       XXX
 7. 2002              XXX      XXX      XXX       XXX       XXX
 8. 2003              XXX      XXX      XXX       XXX       XXX        XXX
 9. 2004              XXX      XXX      XXX       XXX       XXX        XXX       XXX
10. 2005              XXX      XXX      XXX       XXX       XXX        XXX       XXX       XXX
11. 2006              XXX      XXX      XXX       XXX       XXX        XXX       XXX       XXX       XXX
12. Total             XXX      XXX      XXX       XXX       XXX        XXX       XXX       XXX       XXX    XXX
13. Earned
    Premiums
    (Sch P, Part 1)                                                                                                  XXX




                                                               94
                       ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                             SCHEDULE P - PART 6E - COMMERCIAL MULTIPLE PERIL
                                                                  SECTION 1
                                   CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)                            11
  Years in Which       1          2         3         4         5          6         7          8         9              10          Current
  Premiums Were                                                                                                                       Year
Earned and Losses                                                                                                                   Premiums
   Were Incurred      1997       1998        1999       2000       2001        2002      2003      2004      2005       2006         Earned
 1. Prior                  118
 2. 1997                   353        354        354       354        354         354       354       354         354         354
 3. 1998              XXX             710        710       710        710         710       710       710         710         710
 4. 1999              XXX        XXX
 5. 2000              XXX        XXX          XXX
 6. 2001              XXX        XXX          XXX       XXX
 7. 2002              XXX        XXX          XXX       XXX         XXX
 8. 2003              XXX        XXX          XXX       XXX         XXX        XXX
 9. 2004              XXX        XXX          XXX       XXX         XXX        XXX       XXX
10. 2005              XXX        XXX          XXX       XXX         XXX        XXX       XXX       XXX
11. 2006              XXX        XXX          XXX       XXX         XXX        XXX       XXX       XXX       XXX          7,749         7,749
12. Total             XXX        XXX          XXX       XXX         XXX        XXX       XXX       XXX       XXX        XXX             7,749
13. Earned
    Premiums
    (Sch P, Part 1)        471        711                                                                                 7,749       XXX



                                                                  SECTION 2
                                            CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)                                11
  Years in Which       1          2            3         4         5        6          7           8          9          10          Current
  Premiums Were                                                                                                                       Year
Earned and Losses                                                                                                                   Premiums
   Were Incurred      1997       1998        1999       2000       2001        2002      2003      2004      2005       2006         Earned
 1. Prior
 2. 1997                   445        445        445       445        445         445       445       445         445         445
 3. 1998              XXX             631        631       631        631         631       631       631         631         631
 4. 1999              XXX        XXX
 5. 2000              XXX        XXX          XXX
 6. 2001              XXX        XXX          XXX       XXX
 7. 2002              XXX        XXX          XXX       XXX         XXX
 8. 2003              XXX        XXX          XXX       XXX         XXX        XXX
 9. 2004              XXX        XXX          XXX       XXX         XXX        XXX       XXX
10. 2005              XXX        XXX          XXX       XXX         XXX        XXX       XXX       XXX
11. 2006              XXX        XXX          XXX       XXX         XXX        XXX       XXX       XXX       XXX          7,749         7,749
12. Total             XXX        XXX          XXX       XXX         XXX        XXX       XXX       XXX       XXX        XXX             7,749
13. Earned
    Premiums
    (Sch P, Part 1)        445        631                                                                                 7,749       XXX



                           SCHEDULE P - PART 6H - OTHER LIABILITY - OCCURRENCE
                                                                  SECTION 1A
                                   CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)                            11
  Years in Which       1          2         3         4         5          6         7          8         9              10          Current
  Premiums Were                                                                                                                       Year
Earned and Losses                                                                                                                   Premiums
   Were Incurred      1997       1998        1999       2000       2001        2002      2003      2004      2005       2006         Earned
 1. Prior                 444
 2. 1997                1,334     1,334        1,334      1,334      1,334       1,334     1,334     1,334     1,334      1,334
 3. 1998              XXX         1,712        1,712      1,712      1,712       1,712     1,712     1,712     1,712      1,712
 4. 1999              XXX        XXX           2,651      2,651      2,689       2,680     2,680     2,680     2,680      2,680
 5. 2000              XXX        XXX          XXX         3,224      3,356       3,361     3,362     3,369     3,359      3,359
 6. 2001              XXX        XXX          XXX       XXX          8,493       8,963     9,101     9,081     9,070      9,070
 7. 2002              XXX        XXX          XXX       XXX         XXX         35,454    36,336    36,760    36,735     36,739             4
 8. 2003              XXX        XXX          XXX       XXX         XXX        XXX        74,701    76,038    76,878     76,927            49
 9. 2004              XXX        XXX          XXX       XXX         XXX        XXX       XXX       107,764   110,569    112,659         2,090
10. 2005              XXX        XXX          XXX       XXX         XXX        XXX       XXX       XXX       128,374    129,814         1,440
11. 2006              XXX        XXX          XXX       XXX         XXX        XXX       XXX       XXX       XXX        164,677       164,677
12. Total             XXX        XXX          XXX       XXX         XXX        XXX       XXX       XXX       XXX        XXX           168,260
13. Earned
    Premiums
    (Sch P, Part 1)     1,778     1,712        2,651      3,224      8,663      35,920    75,722   109,512   131,973    168,260       XXX



                                                                  SECTION 2A
                                            CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)                                11
  Years in Which       1          2            3         4         5        6          7           8          9          10          Current
  Premiums Were                                                                                                                       Year
Earned and Losses                                                                                                                   Premiums
   Were Incurred      1997       1998        1999       2000       2001        2002      2003      2004      2005       2006         Earned
 1. Prior
 2. 1997                   730        730        730        730        730         730       730       730       730        730
 3. 1998              XXX             436        436        436        436         436       436       436       436        436
 4. 1999              XXX        XXX           2,651      2,651      2,689       2,680     2,680     2,680     2,680      2,680
 5. 2000              XXX        XXX          XXX         3,224      3,356       3,361     3,362     3,369     3,359      3,359
 6. 2001              XXX        XXX          XXX       XXX          8,493       8,963     9,101     9,081     9,070      9,070
 7. 2002              XXX        XXX          XXX       XXX         XXX         35,454    36,336    36,760    36,735     36,739             4
 8. 2003              XXX        XXX          XXX       XXX         XXX        XXX        74,701    76,038    76,878     76,927            49
 9. 2004              XXX        XXX          XXX       XXX         XXX        XXX       XXX       107,764   110,569    112,659         2,090
10. 2005              XXX        XXX          XXX       XXX         XXX        XXX       XXX       XXX       128,374    129,814         1,440
11. 2006              XXX        XXX          XXX       XXX         XXX        XXX       XXX       XXX       XXX        164,677       164,677
12. Total             XXX        XXX          XXX       XXX         XXX        XXX       XXX       XXX       XXX        XXX           168,260
13. Earned
    Premiums
    (Sch P, Part 1)        730        436      2,651      3,224      8,663      35,920    75,722   109,512   131,973    168,260       XXX




                                                                      95
                       ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                           SCHEDULE P - PART 6H - OTHER LIABILITY - CLAIMS-MADE
                                                            SECTION 1B
                                 CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)                      11
  Years in Which       1        2         3         4         5          6         7          8         9          10        Current
  Premiums Were                                                                                                               Year
Earned and Losses                                                                                                           Premiums
   Were Incurred      1997     1998      1999       2000      2001        2002      2003      2004      2005      2006       Earned
 1. Prior
 2. 1997
 3. 1998              XXX
 4. 1999              XXX      XXX
 5. 2000              XXX      XXX        XXX
 6. 2001              XXX      XXX        XXX       XXX              22        22        22        23        23        23
 7. 2002              XXX      XXX        XXX       XXX       XXX           7,073     7,681     7,707     7,707     7,707
 8. 2003              XXX      XXX        XXX       XXX       XXX         XXX        19,291    19,237    19,257    19,257
 9. 2004              XXX      XXX        XXX       XXX       XXX         XXX       XXX        26,097    26,084    26,105          21
10. 2005              XXX      XXX        XXX       XXX       XXX         XXX       XXX       XXX        26,348    26,403          55
11. 2006              XXX      XXX        XXX       XXX       XXX         XXX       XXX       XXX       XXX        24,566      24,566
12. Total             XXX      XXX        XXX       XXX       XXX         XXX       XXX       XXX       XXX       XXX          24,642
13. Earned
    Premiums
    (Sch P, Part 1)                                                  22     7,073    19,899    26,070    26,355    24,642     XXX



                                                            SECTION 2B
                                        CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)                            11
  Years in Which       1        2          3         4         5        6          7           8         9         10        Current
  Premiums Were                                                                                                               Year
Earned and Losses                                                                                                           Premiums
   Were Incurred      1997     1998      1999       2000      2001        2002      2003      2004      2005      2006       Earned
 1. Prior
 2. 1997
 3. 1998              XXX
 4. 1999              XXX      XXX
 5. 2000              XXX      XXX        XXX
 6. 2001              XXX      XXX        XXX       XXX              22        22        22        23        23        23
 7. 2002              XXX      XXX        XXX       XXX       XXX           7,073     7,681     7,707     7,707     7,707
 8. 2003              XXX      XXX        XXX       XXX       XXX         XXX        19,291    19,237    19,257    19,257
 9. 2004              XXX      XXX        XXX       XXX       XXX         XXX       XXX        26,097    26,084    26,105          21
10. 2005              XXX      XXX        XXX       XXX       XXX         XXX       XXX       XXX        26,348    26,403          55
11. 2006              XXX      XXX        XXX       XXX       XXX         XXX       XXX       XXX       XXX        24,566      24,566
12. Total             XXX      XXX        XXX       XXX       XXX         XXX       XXX       XXX       XXX       XXX          24,642
13. Earned
    Premiums
    (Sch P, Part 1)                                                  22     7,073    19,899    26,070    26,355    24,642     XXX



                                      SCHEDULE P - PART 6M - INTERNATIONAL
                                                             SECTION 1
                                 CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)                      11
  Years in Which       1        2         3         4         5          6         7          8         9          10        Current




                                                 NONE
  Premiums Were                                                                                                               Year
Earned and Losses                                                                                                           Premiums
   Were Incurred      1997     1998      1999       2000      2001        2002      2003      2004      2005      2006       Earned
 1. Prior
 2. 1997
 3. 1998              XXX
 4. 1999              XXX      XXX
 5. 2000              XXX      XXX        XXX
 6. 2001              XXX      XXX        XXX       XXX
 7. 2002              XXX      XXX        XXX       XXX       XXX
 8. 2003              XXX      XXX        XXX       XXX       XXX         XXX
 9. 2004              XXX      XXX        XXX       XXX       XXX         XXX       XXX
10. 2005              XXX      XXX        XXX       XXX       XXX         XXX       XXX       XXX
11. 2006              XXX      XXX        XXX       XXX       XXX         XXX       XXX       XXX       XXX
12. Total             XXX      XXX        XXX       XXX       XXX         XXX       XXX       XXX       XXX       XXX
13. Earned
    Premiums
    (Sch P, Part 1)                                                                                                           XXX



                                                             SECTION 2
                                        CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)                            11
  Years in Which       1        2          3         4         5        6          7           8         9         10        Current




                                                 NONE
  Premiums Were                                                                                                               Year
Earned and Losses                                                                                                           Premiums
   Were Incurred      1997     1998      1999       2000      2001        2002      2003      2004      2005      2006       Earned
 1. Prior
 2. 1997
 3. 1998              XXX
 4. 1999              XXX      XXX
 5. 2000              XXX      XXX        XXX
 6. 2001              XXX      XXX        XXX       XXX
 7. 2002              XXX      XXX        XXX       XXX       XXX
 8. 2003              XXX      XXX        XXX       XXX       XXX         XXX
 9. 2004              XXX      XXX        XXX       XXX       XXX         XXX       XXX
10. 2005              XXX      XXX        XXX       XXX       XXX         XXX       XXX       XXX
11. 2006              XXX      XXX        XXX       XXX       XXX         XXX       XXX       XXX       XXX
12. Total             XXX      XXX        XXX       XXX       XXX         XXX       XXX       XXX       XXX       XXX
13. Earned
    Premiums
    (Sch P, Part 1)                                                                                                           XXX




                                                                 96
                       ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

     SCHEDULE P - PART 6N - REINSURANCE - NONPROPORTIONAL ASSUMED PROPERTY
                                                          SECTION 1
                               CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)                              11
  Years in Which       1      2         3         4         5          6         7          8         9                10          Current
  Premiums Were                                                                                                                     Year
Earned and Losses                                                                                                                 Premiums
   Were Incurred      1997   1998     1999       2000      2001       2002        2003        2004        2005        2006         Earned
 1. Prior                                                    2,866
 2. 1997                                                       263       263         263         263           263          263
 3. 1998              XXX
 4. 1999              XXX    XXX
 5. 2000              XXX    XXX       XXX
 6. 2001              XXX    XXX       XXX       XXX
 7. 2002              XXX    XXX       XXX       XXX       XXX
 8. 2003              XXX    XXX       XXX       XXX       XXX        XXX
 9. 2004              XXX    XXX       XXX       XXX       XXX        XXX         XXX
10. 2005              XXX    XXX       XXX       XXX       XXX        XXX         XXX         XXX
11. 2006              XXX    XXX       XXX       XXX       XXX        XXX         XXX         XXX         XXX
12. Total             XXX    XXX       XXX       XXX       XXX        XXX         XXX         XXX         XXX         XXX
13. Earned
    Premiums
    (Sch P, Part 1)                                                                                                                 XXX



                                                          SECTION 2
                                     CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)                                     11
  Years in Which       1      2         3         4         5        6          7           8              9           10          Current
  Premiums Were                                                                                                                     Year
Earned and Losses                                                                                                                 Premiums
   Were Incurred      1997   1998     1999       2000      2001       2002        2003        2004        2005        2006         Earned
 1. Prior                                                     324
 2. 1997                                                       17            17          17          17          17          17
 3. 1998              XXX
 4. 1999              XXX    XXX
 5. 2000              XXX    XXX       XXX
 6. 2001              XXX    XXX       XXX       XXX
 7. 2002              XXX    XXX       XXX       XXX       XXX
 8. 2003              XXX    XXX       XXX       XXX       XXX        XXX
 9. 2004              XXX    XXX       XXX       XXX       XXX        XXX         XXX
10. 2005              XXX    XXX       XXX       XXX       XXX        XXX         XXX         XXX
11. 2006              XXX    XXX       XXX       XXX       XXX        XXX         XXX         XXX         XXX
12. Total             XXX    XXX       XXX       XXX       XXX        XXX         XXX         XXX         XXX         XXX
13. Earned
    Premiums
    (Sch P, Part 1)                                                                                                                 XXX



    SCHEDULE P - PART 6O - REINSURANCE B - NONPROPORTIONAL ASSUMED LIABILITY
                                                          SECTION 1
                               CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEAR END ($000 OMITTED)                              11
  Years in Which       1      2         3         4         5          6         7          8         9                10          Current
  Premiums Were                                                                                                                     Year
Earned and Losses                                                                                                                 Premiums
   Were Incurred      1997   1998     1999       2000      2001       2002        2003        2004        2005        2006         Earned
 1. Prior                                                    1,150
 2. 1997                                                       105       105         105         105           105          105
 3. 1998              XXX
 4. 1999              XXX    XXX
 5. 2000              XXX    XXX       XXX
 6. 2001              XXX    XXX       XXX       XXX
 7. 2002              XXX    XXX       XXX       XXX       XXX
 8. 2003              XXX    XXX       XXX       XXX       XXX        XXX
 9. 2004              XXX    XXX       XXX       XXX       XXX        XXX         XXX
10. 2005              XXX    XXX       XXX       XXX       XXX        XXX         XXX         XXX
11. 2006              XXX    XXX       XXX       XXX       XXX        XXX         XXX         XXX         XXX
12. Total             XXX    XXX       XXX       XXX       XXX        XXX         XXX         XXX         XXX         XXX
13. Earned
    Premiums
    (Sch P, Part 1)                                                                                                                 XXX



                                                          SECTION 2
                                     CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END ($000 OMITTED)                                     11
  Years in Which       1      2         3         4         5        6          7           8              9           10          Current
  Premiums Were                                                                                                                     Year
Earned and Losses                                                                                                                 Premiums
   Were Incurred      1997   1998     1999       2000      2001       2002        2003        2004        2005        2006         Earned
 1. Prior                                                     114
 2. 1997                                                        5            5           5           5           5           5
 3. 1998              XXX
 4. 1999              XXX    XXX
 5. 2000              XXX    XXX       XXX
 6. 2001              XXX    XXX       XXX       XXX
 7. 2002              XXX    XXX       XXX       XXX       XXX
 8. 2003              XXX    XXX       XXX       XXX       XXX        XXX
 9. 2004              XXX    XXX       XXX       XXX       XXX        XXX         XXX
10. 2005              XXX    XXX       XXX       XXX       XXX        XXX         XXX         XXX
11. 2006              XXX    XXX       XXX       XXX       XXX        XXX         XXX         XXX         XXX
12. Total             XXX    XXX       XXX       XXX       XXX        XXX         XXX         XXX         XXX         XXX
13. Earned
    Premiums
    (Sch P, Part 1)                                                                                                                 XXX




                                                              97
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




                Schedule P - Part 6R - SN1A

                        NONE
                Schedule P - Part 6R - SN2A

                        NONE
                Schedule P - Part 6R - SN1B

                        NONE
                Schedule P - Part 6R - SN2B

                        NONE
              Schedule P - Part 7A - Section 1

                        NONE
              Schedule P - Part 7A - Section 2

                        NONE
              Schedule P - Part 7A - Section 3

                        NONE
              Schedule P - Part 7A - Section 4

                        NONE
              Schedule P - Part 7A - Section 5

                        NONE
              Schedule P - Part 7B - Section 1

                        NONE
              Schedule P - Part 7B - Section 2

                        NONE




                        98, 99, 100, 101
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




              Schedule P - Part 7B - Section 3

                        NONE
              Schedule P - Part 7B - Section 4

                        NONE
              Schedule P - Part 7B - Section 5

                        NONE
              Schedule P - Part 7B - Section 6

                        NONE
              Schedule P - Part 7B - Section 7

                        NONE




                            101, 102
                            ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                              SCHEDULE P INTERROGATORIES
  1. What is the extended loss and expense reserve - direct and assumed - for the following classes? An example of an extended loss and expense reserve is the actuarial
     reserve for the free-tail coverage arising upon death, disability or retirement in most medical malpractice policies. Such a liability is to be reported here even if it was not
     reported elsewhere in Schedule P, but otherwise reported as a liability item on Page 3. Show the full reserve amount, not just the change during the current year.

                                 Years in which premiums were earned                                                   1                       2                        3
                                       and losses were incurred                                               Medical Malpractice        Other Liability         Products Liability
1.01   Prior
1.02   1997
1.03   1998
1.04   1999
1.05   2000
1.06   2001
1.07   2002
1.08   2003
1.09   2004
1.10   2005
1.11   2006
1.12   Totals

  2. The definition of allocated loss adjustment expenses (ALAE) and, therefore, unallocated loss adjustment expenses (ULAE) was changed
     effective January 1, 1998. This change in definition applies to both paid and unpaid expenses. Are these expenses (now reported as
     “Defense and Cost Containment” and “Adjusting and Other”) reported in compliance with these definitions in this statement?                                 Yes [ X ] No [          ]

  3. The Adjusting and Other expense payments and reserves should be allocated to the years in which the losses were incurred based on the
     number of claims reported, closed and outstanding in those years. When allocating Adjusting and Other expense between companies in a
     group or a pool, the Adjusting and Other expense should be allocated in the same percentage used for the loss amounts and the claim
     counts. For reinsurers, Adjusting and Other expense assumed should be reported according to the reinsurance contract. For Adjusting
     and Other expense incurred by reinsurers, or in those situations where suitable claim count information is not available, Adjusting and
     Other expense should be allocated by a reasonable method determined by the company and described in Interrogatory 7, below. Are they
     so reported in this Statement? Answer:                                                                                                                     Yes [ X ] No [          ]

  4. Do any lines in Schedule P include reserves that are reported gross of any discount to present value of future payments, and that are
     reported net of such discounts on Page 10?                                                                                                                 Yes [     ] No [ X ]

       If Yes, proper disclosure must be made in the Notes to Financial Statements, as specified in the Instructions. Also, the discounts must be
       reported in Schedule P - Part 1, Columns 32 and 33.

       Schedule P must be completed gross of non-tabular discounting. Work papers relating to discount calculations must be available for
       examination upon request.

       Discounting is allowed only if expressly permitted by the state insurance department to which this Annual Statement is being filed.

  5. What were the net premiums in force at the end of the year for:
     (in thousands of dollars)
                                                                                                                                      5.1 Fidelity

                                                                                                                                      5.2 Surety

  6. Claim count information is reported per claim or per claimant (Indicate which)                                                                                            CLAIM
     If not the same in all years, explain in Interrogatory 7.

7.1    The information provided in Schedule P will be used by many persons to estimate the adequacy of the current loss and expense reserves,
       among other things. Are there any especially significant events, coverage, retention or accounting changes that have occurred that must
       be considered when making such analyses?                                                                                                                 Yes [ X ] No [          ]

7.2    An extended statement may be attached.
       In 1999 the Company entered into a reinsurance agreement with Navigators Insurance Company, whereby all business written by
       the Company is ceded to Navigators Insurance Company.




                                                                                      103
                            ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                            SCHEDULE T - EXHIBIT OF PREMIUMS WRITTEN
                                                                  Allocated by States and Territories
                                           1      Gross Premiums, Including         4               5           6             7                  8               9
                                                 Policy and Membership Fees                                                                                   Direct
                                                  Less Return Premiums and                                                                                   Premium
                                                   Premiums on Policies Not     Dividends                                                                   Written for
                                                            Taken                  Paid                                                     Finance and      Federal
                                           Is          2              3       or Credited to Direct Losses                                     Service     Purchasing
                                        Insurer      Direct        Direct     Policyholders       Paid                                      Charges Not       Groups
                                      Licensed?    Premiums      Premiums       on Direct     (Deducting Direct Losses Direct Losses         Included in   (Included in
              States, etc.           (Yes or No)    Written       Earned        Business        Salvage)    Incurred      Unpaid              Premiums        Col. 2)
    1. Alabama                  AL        No           648,881       643,737                                   228,458       404,005
    2. Alaska                   AK        No            44,727          7,768                                  (21,213)         3,257
    3. Arizona                  AZ        No        7,632,332      5,166,879                       499,963   2,557,399     3,653,356
    4. Arkansas                 AR        No            12,454          5,174                                     2,939         3,290
    5. California               CA        No      154,630,936 144,371,442                       16,162,490  52,477,884 216,401,757
    6. Colorado                 CO        No        2,563,868      1,194,173                       132,500     517,914       667,440
    7. Connecticut              CT        No           833,086       722,445                                   503,087       643,702
    8. Delaware                 DE        No            54,717        84,396                                   (45,669)      128,332
    9. District of Columbia     DC        No           370,335       181,574                       116,250     140,890       113,550
   10. Florida                  FL        No        6,366,168      6,118,634                       767,379   4,037,637     4,445,423
   11. Georgia                  GA        No        1,416,559      1,741,267                        11,500     948,769     1,635,503
   12. Hawaii                   HI        No           781,557       560,117                                   367,819       522,960
   13. Idaho                    ID        No            31,185       147,318                                   434,289       574,213
   14. Illinois                 IL        No        3,631,789      1,748,031                                   655,456     1,091,187
   15. Indiana                  IN        No           653,216       513,689                                   261,457       376,175
   16. Iowa                     IA        No           148,840       167,905                        57,793     (65,358)      428,098
   17. Kansas                   KS        No           104,949        75,069                                      1,718       33,459
   18. Kentucky                 KY        No           371,710       301,348                          1,510    130,432       263,524
   19. Louisiana                LA        No        5,979,088      5,133,092                       109,043   1,774,212     7,412,442
   20. Maine                    ME        No            67,736        52,954                                    33,661        45,870
   21. Maryland                 MD        No        1,033,154        494,969                                    97,400       380,202
   22. Massachusetts            MA        No        1,263,474        880,868                       200,000     423,120       929,490
   23. Michigan                 MI        No           705,494     1,542,279                        23,510     483,776     1,490,397
   24. Minnesota                MN        No           198,647        42,549                                    23,867        23,867
   25. Mississippi              MS        No            48,813        15,633                                      9,491       11,384
   26. Missouri                 MO        No           732,947       309,238                                   187,876       245,175
   27. Montana                  MT        No           894,147       570,291                                   296,830       409,199
   28. Nebraska                 NE        No           126,951        78,551                                    46,372        75,673
   29. Nevada                   NV        No        9,459,464      5,860,785                       123,778   1,803,942     3,271,853
   30. New Hampshire            NH        No           218,007       160,777                                   121,637       183,327
   31. New Jersey               NJ        No        3,858,823      2,746,996                        (2,019)  1,654,084     2,551,939
   32. New Mexico               NM        No
   33. New York                 NY        Yes
   34. North Carolina           NC        No           910,485       914,751                          3,289    411,108       939,295
   35. North Dakota             ND        No           114,680        93,968                                    62,615        95,979
   36. Ohio                     OH        No        1,146,738        902,821                                   305,796       759,640
   37. Oklahoma                 OK        No            24,604          2,090                                     2,385         2,385
   38. Oregon                   OR        No        1,526,587        897,279                                   351,216       451,520
   39. Pennsylvania             PA        No        2,346,467      1,928,111                        18,587   1,683,904     2,057,064
   40. Rhode Island             RI        No           183,364       180,408                                   123,343       147,178
   41. South Carolina           SC        No           245,761       158,437                                    79,417       122,593
   42. South Dakota             SD        No           159,844       128,472                                    41,535       107,756
   43. Tennessee                TN        No           716,887       679,528                            721    529,144       661,990
   44. Texas                    TX        No        9,560,098      5,868,706                        78,370   3,045,327     4,342,008
   45. Utah                     UT        No           958,185       361,004                                   145,464       215,034
   46. Vermont                  VT        No            13,360          3,481                                     2,548         2,548
   47. Virginia                 VA        No        1,448,664      1,528,659                        22,000     993,066     1,565,641
   48. Washington               WA        No        6,367,338      4,856,123                          2,710  1,837,164     2,939,397
   49. West Virginia            WV        No           176,669       125,516                                   106,239       110,654
   50. Wisconsin                WI        No           802,648       340,155                                   159,521       289,624
   51. Wyoming                  WY        No            98,083        73,518                                    81,473       160,810
   52. American Samoa           AS        No
   53. Guam                     GU        No
   54. Puerto Rico              PR        No
   55. U.S. Virgin Islands      VI        No
   56. Northern Mariana
       Islands                  MP
   57. Canada                   CN          No
   58. Aggregate other alien    OT         XXX           33,911             7,697                                 (763,862)      377,363
   59. Totals                        (a)         1   231,718,424    200,690,672                   18,329,374     79,287,577   263,768,526

      DETAILS OF WRITE-INS
5801. Alien(01)                            XXX           33,911             7,697                                 (763,862)      377,363
5802.                                      XXX
5803.                                      XXX
5898. Summary of remaining
      write-ins for Line 58 from
      overflow page                        XXX
5899. Totals (Lines 5801 through
      5803 + 5898) (Line 58 above)         XXX           33,911             7,697                                 (763,862)      377,363
(a) Insert the number of yes responses except for Canada and Other Alien.

                                                      Explanation of basis of allocation of premiums by states, etc.




                                                                                    104
                           ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                              SCHEDULE T – PART 2
                                INTERSTATE COMPACT – EXHIBIT OF PREMIUMS WRITTEN
                                                      Allocated by States and Territories
                                                                                                Direct Business Only
                                                  1                    2                      3                      4             5           6
                                                                                          Disability
                                                 Life                                      Income            Long-Term Care
                                             (Group and         Annuities (Group        (Group and             (Group and     Deposit-Type
                      States, Etc.            Individual)        and Individual)         Individual)            Individual)    Contracts     Totals
 1. Alabama                             AL
 2. Alaska                              AK
 3. Arizona                             AZ
 4. Arkansas                            AR
 5. California                          CA
 6. Colorado                            CO
 7. Connecticut                         CT
 8. Delaware                            DE
 9. District of Columbia                DC
10. Florida                             FL
11. Georgia                             GA
12. Hawaii                              HI
13. Idaho                               ID
14. Illinois                            IL
15. Indiana                             IN
16. Iowa                                IA
17. Kansas                              KS
18. Kentucky                            KY
19. Louisiana                           LA
20. Maine                               ME




                                              NONE
21. Maryland                            MD
22. Massachusetts                       MA
23. Michigan                            MI
24. Minnesota                           MN
25. Mississippi                         MS
26. Missouri                            MO
27. Montana                             MT
28. Nebraska                            NE
29. Nevada                              NV
30. New Hampshire                       NH
31. New Jersey                          NJ
32. New Mexico                          NM
33. New York                            NY
34. North Carolina                      NC
35. North Dakota                        ND
36. Ohio                                OH
37. Oklahoma                            OK
38. Oregon                              OR
39. Pennsylvania                        PA
40. Rhode Island                        RI
41. South Carolina                      SC
42. South Dakota                        SD
43. Tennessee                           TN
44. Texas                               TX
45. Utah                                UT
46. Vermont                             VT
47. Virginia                            VA
48. Washington                          WA
49. West Virginia                       WV
50. Wisconsin                           WI
51. Wyoming                             WY
52. American Samoa                      AS
53. Guam                                GU
54. Puerto Rico                         PR
55. U.S. Virgin Islands                 VI
56. Northern Mariana Islands            MP
57. Canada                              CN
58. Aggregate Other Alien               OT
59. Totals




                                                                     105
                                                             ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

      SCHEDULE Y - INFORMATION CONCERNING ACTIVITIES OF INSURER MEMBERS OF A HOLDING COMPANY GROUP
                                                                    PART 1 - ORGANIZATIONAL CHART


                                20%
                     Terence N. Deeks                                                                                                                            80%
                           and Family                                     The Navigators Group, Inc.                                               Public Stockholders
                                                                                (Delaware Corporation)

                                                                                                               13-3138397




                Navigators Insurance Company
                     (New York Corporation)        42307                Navigators Management Company, Inc.                                         Navigators Holdings (UK) Ltd.
                                                13-3138390                        (New York Corporation)       13-2771091                              (United Kingdom Corporation)
                Navigators Insurance Company
                   United Kingdom Branch                             Navigators Insurance Services of Texas, Inc.
106




                                                                                    (Texas Corporation)        75-2304692                       Navigators Underwriting Agency Ltd.
             NIC Insurance Company                 36056                                                                                               (United Kingdom Corporation)
                (New York Corporation)          13-3536448                   Navigators Special Risk, Inc.
            (Effective January 4, 2007, name changed to:                            (Texas Corporation)        76-0657371
              Navigators Specialty Insurance Company
                                                                     Navigators California Insurance Services, Inc.         Millennium Underwriting Ltd.                       Navigators Underwriting Ltd.
                                                                                   (California Corporation)    94-3105355     (United Kingdom Corporation)                           (United Kingdom Corporation)


                                                                   Navigators Insurance Services of Washington, Inc.
                                                                                 (Washington Corporation)      91-1375993                                    Navigators N.V.
                                                                                                                                                             (Belgian Corporation)
                                                                           Navigators Management (UK) Ltd.
                                                                                (United Kingdom Corporation)
                                                                                                                                              Navigators Corporate Underwriters Ltd.
                                                                                                                                                       (United Kingdom Corporation)


          Note: All direct and indirect subsidiaries of The Navigators Group, Inc. are 100% owned.
                                                                                          ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                                                                                 SCHEDULE Y
                                                       PART 2 - SUMMARY OF INSURER’S TRANSACTIONS WITH ANY AFFILIATES
                                                                                                                                                               7                                                                                                  13
              1         2                                         3                                   4              5                    6                Income/              8                  9           10            11              12
                                                                                                                                                      (Disbursements)
                                                                                                                                  Purchases, Sales or    Incurred in                                                                                         Reinsurance
                                                                                                                                     Exchanges of     Connection with                                                                                       Recoverable/
                                                                                                                                   Loans, Securities,  Guarantees or                             Income/             Any Other Material                      (Payable) on
                                                                                                                                          Real        Undertakings for                       (Disbursements)         Activity Not in the                    Losses and/or
        NAIC                                                                                                                       Estate, Mortgage          the           Management         Incurred Under         Ordinary Course of                        Reserve
       Company      Federal ID                                                                    Shareholder     Capital           Loans or Other     Benefit of any    Agreements and        Reinsurance              the Insurer’s                           Credit
        Code         Number            Names of Insurers and Parent, Subsidiaries or Affiliates    Dividends    Contributions         Investments        Affiliate(s)    Service Contracts      Agreements      *         Business         Totals          Taken/(Liability)
      42307       13-3138390     Navigators Insurance Company                                                      100,000,000                                                (55,949,180)                                                  44,050,820         (393,554,543)
      36056       13-3536448     NIC Insurance Company                                                                                                                                                                                                          393,554,543
      00510       13-3138397     The Navigators Group, Inc.                                                       (100,000,000)                                                                                                            (100,000,000)
                  13-2771091     Navigators Management Company, Inc.                                                                                                           19,113,963                                                    19,113,963
                  75-2304692     Navigators Insurance Services of Texas, Inc.                                                                                                   2,617,946                                                     2,617,946
                  91-1375993     Navigators Insurance Services of Washington, Inc.                                                                                              2,209,121                                                     2,209,121
                  94-3105355     Navigators California Insurance Services, Inc.                                                                                                21,309,787                                                    21,309,787
                                 Navigators Management (U.K.) Limited                                                                                                          10,698,363                                                    10,698,363
107




        9999999 Control Totals                                                                                                                                                                                 XXX
                             ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

        SUPPLEMENTAL EXHIBITS AND SCHEDULES INTERROGATORIES

        The following supplemental reports are required to be filed as part of your statement filing unless specifically waived by the domiciliary state.
        However, in the event that your domiciliary state waives the filing requirement, your response of WAIVED to the specific interrogatory will be
        accepted in lieu of filing a "NONE" report and a bar code will be printed below. If the supplement is required of your company but is not
        being filed for whatever reason enter SEE EXPLANATION and provide an explanation following the interrogatory questions.




                                                                        MARCH FILING                                                                        RESPONSES
  1.    Will an actuarial opinion be filed by March 1?                                                                                                         YES


  2.    Will the Supplemental Compensation Exhibit be filed with the state of domicile by March 1?                                                             YES


  3.    Will the Risk-based Capital Report be filed with the NAIC by March 1?                                                                                  YES


  4.    Will the Risk-based Capital Report be filed with the state of domicile, if required, by March 1?                                                       YES


  5.    Will the Reinsurance Attestation Supplement be filed with the state of domicile and the NAIC by March 1?                                               YES


                                                                         APRIL FILING
  6.    Will the Insurance Expense Exhibit be filed with the state of domicile and the NAIC by April 1?                                                        YES


  7.    Will Management’s Discussion and Analysis be filed by April 1?                                                                                         YES


  8.    Will the Supplemental Investment Risk Interrogatories be filed by April 1?                                                                             YES


                                                                          MAY FILING
  9.    Will this company be included in a combined annual statement which is filed with the NAIC by May 1?                                                    YES


                                                                          JUNE FILING
  10.   Will an audited financial report be filed by June 1?                                                                                                   YES

        The following supplemental reports are required to be filed as part of your statement filing. However, in the event that your company does
        not transact the type of business for which the special report must be filed, your response of NO to the specific interrogatory will be accepted
        in lieu of filing a "NONE" report and a bar code will be printed below. If the supplement is required of your company but is not being filed for
        whatever reason enter SEE EXPLANATION and provide an explanation following the interrogatory questions.




                                                                        MARCH FILING
  11.   Will Schedule SIS (Stockholder Information Supplement) be filed with the state of domicile by March 1?                                                 NO


  12.   Will the Financial Guaranty Insurance Exhibit be filed March 1?                                                                                        NO


  13.   Will the Medicare Supplement Insurance Experience Exhibit be filed with the state of domicile and the NAIC by March 1?                                 NO


  14.   Will Supplement A to Schedule T (Medical Malpractice Supplement) be filed by March 1?                                                                  NO


  15.   Will the Trusteed Surplus Statement be filed with the state of domicile and the NAIC by March 1?                                                       NO


  16.   Will the Premiums Attributed to Protected Cells Exhibit be filed by March 1?                                                                           NO


  17.   Will the Reinsurance Summary Supplemental Filing for General Interrogatory 9 be filed with the state of domicile and the NAIC by March 1?              NO


  18.   Will the Medicare Part D Coverage Supplement be filed with the state of domicile and the NAIC by March 1?                                              NO


  19.   Will the Actuarial Opinion Summary be filed with the state of domicile, if required by March 15 (or the date otherwise specified)?                     YES


                                                                         APRIL FILING
  20.   Will the Credit Insurance Experience Exhibit be filed with the state of domicile and the NAIC by April 1?                                              NO


  21.   Will the Long-term Care Experience Reporting Forms be filed with the state of domicile and the NAIC by April 1?                                        NO


  22.   Will the Accident and Health Policy Experience Exhibit be filed by April 1?                                                                            NO



Explanation:


11.


12.


13.


14.




                                                                                        108
               ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

        SUPPLEMENTAL EXHIBITS AND SCHEDULES INTERROGATORIES
15.


16.


17.


18.


20.


21.


22.



Bar Code:




  11.
        *36056200642000000*
  12.
        *36056200624000000*
  13.
        *36056200636059000*
  14.
        *36056200645000000*
  15.
        *36056200649000000*
  16.
        *36056200638500000*
  17.
        *36056200640100000*
  18.
        *36056200636559000*
  20.
        *36056200623059000*
  21.
        *36056200633059000*
  22.
        *36056200621000000*




                                            108.1
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




                     Schedule A - Part 1

                        NONE
                     Schedule A - Part 2

                        NONE
                     Schedule A - Part 3

                        NONE
                     Schedule B - Part 1

                        NONE
                     Schedule B - Part 2

                        NONE
                    Schedule BA - Part 1

                        NONE
                    Schedule BA - Part 2

                        NONE




               E01, E02, E03, E04, E05, E06, E07
                                                                                                                   ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                                                                     SCHEDULE D - PART 1
                                                                                                                                              Showing all Long-Term BONDS Owned December 31 of Current Year
            1                            2                          Codes                  6           7                   Fair Value                10               11                         Change in Book Adjusted Carrying Value                                                    Interest                                           Dates
                                                               3    4     5                                            8                9                                             12                   13                 14                  15           16           17              18                19            20           21           22
                                                                    F
                                                                    o
                                                                    r                                                                                                                                                       Current Year’s
                                                                    e                                                                                                              Unrealized                                Other Than      Total Foreign
                                                                    i                                              Rate Used                                                        Valuation         Current Year’s         Temporary        Exchange                                                     Admitted   Gross Amt.
         CUSIP                                                      g   Bond           NAIC                        to Obtain                                     Book/Adjusted      Increase/         (Amortization)/        Impairment       Change in                  Effective                       Amount Due & Rec. During
      Identification                Description                *    n   CHAR         Designation   Actual Cost     Fair Value    Fair Value       Par Value      Carrying Value    (Decrease)           Accretion            Recognized       B./A.C.V.      Rate of     Rate of         How Paid          Accrued       Year         Acquired     Maturity
      912810-DX-3        UNITED STATES TREASURY BONDS                                       1          2,553,547      121.5150      2,521,436        2,075,000        2,514,618                                  (34,218)                                        7.500           4.780              MN             20,205   155,625   11/09/2005   11/15/2016
      912810-FE-3        UNITED STATES TREASURY BONDS                                       1          2,946,327      108.0300      2,943,845        2,725,000        2,937,949                                   (5,149)                                        5.500           4.900              FA             56,610   130,625   03/09/2006   08/15/2028
      912827-2J-0        UNITED STATES TREASURY NOTES                                       1          1,504,922      100.1360      1,502,040        1,500,000        1,500,111                                     (890)                                        6.250           6.180              FA             35,411    93,750   07/24/2000   02/15/2007
                         UNITED STATES TREASURY INFL INDEX
      912827-4Y-5        NOTES                                                3             1            732,702      126.4320        726,989          575,000          737,602            (6,778)               (14,356)                                        4.768           1.800              JJ             12,665    27,201   07/18/2005   01/15/2009
      912828-AC-4        UNITED STATES TREASURY NOTES                                       1          1,599,083       99.7500      1,496,250        1,500,000        1,508,802                                  (23,425)                                        4.375           2.760              MN              8,520    65,625   12/20/2002   05/15/2007
                         UNITED STATES TREASURY INFL INDEX
      912828-BD-1        NOTES                                                3             1            486,470      106.1480        493,589          465,000          514,052            (7,495)                  (446)                                        2.060           1.870              JJ              4,425     9,504   03/23/2005   07/15/2013
      912828-CJ-7        UNITED STATES TREASURY NOTES                                       1          2,075,132      100.2570      2,005,140        2,000,000        2,064,050                                   (7,280)                                        4.750           4.230              MN             12,334    95,000   08/03/2005   05/15/2014
                         UNITED STATES TREASURY INFL INDEX
      912828-CZ-1        NOTES                                                3             1            714,514      100.9870         732,157         725,000           751,389           (7,398)                 6,139                                         0.932         1.790                AO           1,448        6,733   07/18/2005   04/15/2010
      912828-DZ-0        UNITED STATES TREASURY NOTES                                       1            739,063       97.3500         725,265         745,000           740,661                                   1,121                                         3.875         4.050                JJ          13,336       28,869   07/25/2005   07/15/2010
        0199999 -   Total Bonds - U.S. Government - Issuer Obligations                                13,351,759       XXX          13,146,710      12,310,000        13,269,233           (21,671)              (78,504)                                      XXX          XXX             XXX                164,956      612,933      XXX          XXX
      36200F-MD-7        GOVERNMENT NATL MTG ASSOC #599856                                  1            283,415       99.6410         275,636         276,629           283,415                                  (2,025)                                        5.500         4.640              MON            1,268       15,215   02/12/2003   02/15/2033
      36200J-Q8-6        GOVERNMENT NATL MTG ASSOC #602679                                  1              6,415      101.4690           6,219           6,129             6,415                                     (66)                                        6.000         3.800              MON               31          368   05/13/2003   01/15/2033
      36201U-V5-0        GOVERNMENT NATL MTG ASSOC #593836                                  1            340,353      101.5300         335,296         330,240           340,353                                  (2,764)                                        6.000         4.780              MON            1,651       19,814   09/16/2002   10/15/2032
      36202T-6D-3        GOVERNMENT NATL MTG ASSOC #609368                                  1            171,747      101.4690         166,517         164,106           171,747                                  (1,159)                                        6.000         3.640              MON              821        9,846   05/13/2003   03/15/2033
      36205R-WN-3        GOVERNMENT NATL MTG ASSOC #398553                                  1             82,781      101.7110          82,565          81,176            82,557                                    (296)                                        6.000         5.460              MON              406        4,871   10/20/2005   04/15/2026
      36208V-QL-2        GOVERNMENT NATL MTG ASSOC #462259                                  1             96,441      101.5940          96,080          94,572            96,165                                    (312)                                        6.000         5.490              MON              473        5,674   10/20/2005   11/15/2028
      36213F-MH-3        GOVERNMENT NATL MTG ASSOC #553060                                  1            182,502       99.6410         177,493         178,133           182,502                                  (1,082)                                        5.500         4.760              MON              816        9,797   02/12/2003   02/15/2033
      36241K-J6-6        GOVERNMENT NATL MTG ASSOC #782085                                  1             48,148      103.4410          48,108          46,507            48,097                                    (300)                                        7.000         5.470              MON              271        1,899   05/11/2006   11/15/2033
E08




      36290S-QB-0        GOVERNMENT NATL MTG ASSOC #616150                                  1            348,605      101.4690         346,870         341,848           348,605                                  (1,434)                                        6.000         5.420              MON            1,709       20,511   10/20/2005   12/15/2033
      36290V-ZR-8        GOVERNMENT NATL MTG ASSOC #619152                                  1            516,054      101.4050         513,166         506,051           516,054                                  (2,401)                                        6.000         5.320              MON            2,530       30,363   10/20/2005   11/15/2034
      36291C-DQ-5        GOVERNMENT NATL MTG ASSOC #623911                                  1            134,211      101.4050         133,460         131,610           134,211                                    (782)                                        6.000         5.390              MON              658        7,897   10/20/2005   09/15/2034
      36291G-SB-3        GOVERNMENT NATL MTG ASSOC #627914                                  1            408,531      101.4050         406,246         400,613           408,531                                  (2,425)                                        6.000         5.370              MON            2,003       24,037   10/20/2005   02/15/2034
      36291L-J4-8        GOVERNMENT NATL MTG ASSOC #631283                                  1            437,738      101.4050         435,289         429,254           436,439                                  (1,419)                                        6.000         5.490              MON            2,146       25,755   10/20/2005   07/15/2035
      36291R-AC-6        GOVERNMENT NATL MTG ASSOC #635503                                  1             14,136      101.4050          14,057          13,862            14,136                                     (98)                                        6.000         5.280              MON               69          832   10/20/2005   09/15/2034
      36291S-RN-2        GOVERNMENT NATL MTG ASSOC #636893                                  1            383,614      101.4050         381,468         376,179           383,124                                  (2,225)                                        6.000         5.460              MON            1,881       22,571   10/20/2005   01/15/2035
        0299999 -   Total Bonds - U.S. Government - Single Class Mortgage-Backed/Asset-Backed
                        Securities                                                                     3,454,692       XXX           3,418,469       3,376,909         3,452,353                                 (18,789)                                      XXX          XXX             XXX                 16,734      199,449      XXX          XXX
        0399999 -   Total - U.S. Government Bonds                                                     16,806,452       XXX          16,565,180      15,686,909        16,721,586           (21,671)              (97,293)                                      XXX          XXX             XXX                181,690      812,382      XXX          XXX
      91086Q-AS-7        UNITED MEXICAN STATES                       F                     2FE           157,875      108.0000         162,000         150,000           157,850                                     (25)                                        6.750         6.340                MS           2,644        5,063   08/18/2006   09/27/2034
        0499999 -   Total Bonds - All Other Government - Issuer Obligations                              157,875       XXX             162,000         150,000           157,850                                     (25)                                      XXX          XXX             XXX                  2,644        5,063      XXX          XXX
        1099999 -   Total - All Other Government Bonds                                                   157,875       XXX             162,000         150,000           157,850                                     (25)                                      XXX          XXX             XXX                  2,644        5,063      XXX          XXX
      452151-LE-1        ILLINOIS ST                                                       1FE            24,968       95.6480          23,912          25,000            24,972                                       2                                         4.950         4.960                JD             103        1,238   06/06/2003   06/01/2023
      649787-LE-6        NEW YORK ST                                                       1FE           499,400      101.0580         510,343         505,000           503,903                                     660                                         6.000         6.150                JJ          13,972       30,300   07/15/1998   07/15/2008
        1199999 -   Total Bonds - States, Territories and Possessions - Issuer Obligations               524,368       XXX             534,255         530,000           528,875                                     662                                       XXX          XXX             XXX                 14,075       31,538      XXX          XXX
        1799999 -   Total - States, Territories and Possessions                                          524,368       XXX             534,255         530,000           528,875                                     662                                       XXX          XXX             XXX                 14,075       31,538      XXX          XXX
      771690-N2-6        ROCHESTER NY                                                      1FE           319,894      103.7200         337,090         325,000           323,303                                     553                                         6.700         6.910                MS           6,412       21,775   06/23/1999   09/15/2009
        1899999 -   Total Bonds - Political Subdivisions - Issuer Obligations                            319,894       XXX             337,090         325,000           323,303                                     553                                       XXX          XXX             XXX                  6,412       21,775      XXX          XXX
        2499999 -   Total - Political Subdivisions Bonds                                                 319,894       XXX             337,090         325,000           323,303                                     553                                       XXX          XXX             XXX                  6,412       21,775      XXX          XXX
      167673-BH-4        CHICAGO IL PUB BLDG COMMN SPL                                     1FE         1,039,550      108.1980       1,081,980       1,000,000         1,028,782                                  (2,342)                                        6.500         6.080                JJ          32,500       65,000   08/17/2001   01/01/2016
      796825-AM-9        SAN BERNARDINO CNTY CA FING                                       1FE           158,453      100.8160         151,224         150,000           152,349                                  (3,898)                                        6.810         4.060                FA           4,256       10,215   05/26/2005   08/01/2007
      796839-AK-4        SAN BERNARDINO CNTY CA                                            1FE           160,000      100.9810         161,570         160,000           160,000                                                                                 5.520         5.520                FA           3,680        8,832   06/10/2004   08/01/2014
        2599999 -   Total Bonds - Special Revenue - Issuer Obligations                                 1,358,003       XXX           1,394,774       1,310,000         1,341,131                                  (6,240)                                      XXX          XXX             XXX                 40,436       84,047      XXX          XXX
      3128JR-JE-7        FEDERAL HOME LN MTG CORP #847461                                   1            743,190       98.7990         742,623         751,646           743,343                                   2,162                                         4.617         4.810              MON            5,832       31,880   11/21/2005   08/01/2035
      3128K0-QC-0        FEDERAL HOME LN MTG CORP #A40451                                   1            528,262       96.4840         526,257         545,435           528,971                                   1,884                                         5.000         5.550              MON            2,273       22,726   01/10/2006   12/01/2035
      3128K1-3U-3        FEDERAL HOME LN MTG CORP #A41711                                   1            279,841       96.4840         278,779         288,938           280,572                                     881                                         5.000         5.540              MON            1,204       12,039   01/10/2006   01/01/2036
      3128K1-TJ-0        FEDERAL HOME LN MTG CORP #A41453                                   1            278,837       96.4840         277,779         287,902           279,582                                     873                                         5.000         5.550              MON            1,200       11,996   01/10/2006   01/01/2036
      3128K2-6A-2        FEDERAL HOME LN MTG CORP #A42665                                   1            957,242       96.4840         953,610         988,360           959,809                                   3,346                                         5.000         5.550              MON            4,118       41,186   01/10/2006   02/01/2036
      3128K2-BL-2        FEDERAL HOME LN MTG CORP #A41843                                   1            183,092       96.4840         182,398         189,044           183,227                                     697                                         5.000         5.600              MON              788        7,877   01/10/2006   01/01/2036
      3128K2-C2-3        FEDERAL HOME LN MTG CORP #A41889                                   1            197,574       96.4840         196,824         203,997           198,102                                     633                                         5.000         5.570              MON              850        8,500   01/10/2006   01/01/2036
      3128PB-LT-9        FEDERAL HOME LN MTG CORP #J00338                                   1          4,472,964       96.3590       4,429,137       4,596,495         4,484,816                                  20,404                                         4.500         5.060              MON           17,237      206,842   10/20/2005   11/01/2020
      31296S-D3-7        FEDERAL HOME LN MTG CORP #A17322                                   1          2,146,367       98.9840       2,103,037       2,124,623         2,146,367                                  (3,791)                                        5.500         5.200              MON            9,738      116,854   12/24/2003   01/01/2034
      31297U-SZ-4        FEDERAL HOME LN MTG CORP #A38636                                   1            368,888       96.5000         367,549         380,879           369,566                                   1,241                                         5.000         5.560              MON            1,587       15,870   01/10/2006   10/01/2035
      31371K-2T-7        FEDERAL NATIONAL MTG ASSOC #254686                                 1             50,242      100.1250          48,652          48,591            50,242                                    (260)                                        5.500         4.350              MON              223        2,672   12/24/2003   04/01/2018
                                                                                                                      ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                                                                          SCHEDULE D - PART 1
                                                                                                                                                   Showing all Long-Term BONDS Owned December 31 of Current Year
              1                          2                          Codes                 6               7                     Fair Value                10               11                        Change in Book Adjusted Carrying Value                                                     Interest                                             Dates
                                                              3     4     5                                               8                  9                                             12                  13                 14                   15           16           17              18               19            20             21            22
                                                                    F
                                                                    o
                                                                    r                                                                                                                                                            Current Year’s
                                                                    e                                                                                                                   Unrealized                                Other Than      Total Foreign
                                                                    i                                                 Rate Used                                                          Valuation       Current Year’s           Temporary        Exchange                                                    Admitted   Gross Amt.
           CUSIP                                                    g   Bond          NAIC                            to Obtain                                       Book/Adjusted      Increase/       (Amortization)/          Impairment       Change in                  Effective                      Amount Due & Rec. During
        Identification              Description                *    n   CHAR        Designation       Actual Cost     Fair Value      Fair Value       Par Value      Carrying Value    (Decrease)         Accretion              Recognized       B./A.C.V.      Rate of     Rate of         How Paid         Accrued       Year           Acquired     Maturity
        31371K-4F-5      FEDERAL NATIONAL MTG ASSOC #254722                                1                 51,795      100.1250           50,155           50,092           51,795                                   (248)                                          5.500           4.370            MON                230      2,755    12/24/2003   05/01/2018
        31371L-SD-2      FEDERAL NATIONAL MTG ASSOC #255316                                1                432,533       98.3910          429,229          436,248          432,644                                    674                                           5.000           5.130            MON              1,818     21,812    10/20/2005   07/01/2019
        31371L-TP-4      FEDERAL NATIONAL MTG ASSOC #255358                                1                450,881       98.3910          447,437          454,754          450,997                                    671                                           5.000           5.130            MON              1,895     22,738    10/20/2005   09/01/2019
        31371L-WN-5      FEDERAL NATIONAL MTG ASSOC #255453                                1                306,080       98.3910          303,742          308,709          306,134                                    506                                           5.000           5.130            MON              1,286     15,435    10/20/2005   11/01/2019
        31376K-UH-7      FEDERAL NATIONAL MTG ASSOC #357984                                1                347,361       98.2960          344,378          350,345          347,466                                    541                                           5.000           5.120            MON              1,460     17,517    10/20/2005   08/01/2020
        31377R-UR-9      FEDERAL NATIONAL MTG ASSOC #384992                                1                264,856      102.7050          258,376          251,570          260,562                                 (4,179)                                          5.950           3.920            MON              1,289     15,176    10/20/2005   04/01/2012
        31377S-PR-3      FEDERAL NATIONAL MTG ASSOC #385732                                1                487,486       98.5630          464,621          471,392          475,917                                 (6,150)                                          4.670           3.580            MON              1,896     22,318    12/29/2003   01/01/2010
        31377S-S5-8      FEDERAL NATIONAL MTG ASSOC #385840                                1                194,723       98.5770          186,880          189,576          191,471                                 (1,753)                                          4.880           4.220            MON                797      9,379    02/12/2003   01/01/2013
        31377T-FV-3      FEDERAL NATIONAL MTG ASSOC #386380                                1                259,435       95.2460          258,314          271,204          261,469                                  2,039                                           4.210           5.190            MON                983     11,576    10/20/2005   07/01/2013
        31385H-4D-1      FEDERAL NATIONAL MTG ASSOC #545420                                1                192,609      101.4540          180,284          177,699          185,317                                 (3,114)                                          5.626           3.910            MON                861     10,135    02/12/2003   12/01/2011
        31385J-BQ-0      FEDERAL NATIONAL MTG ASSOC #545547                                1                308,662      103.3320          279,876          270,849          291,790                                (26,224)                                          6.047           1.930            MON              1,410     25,996    03/18/2004   03/01/2012
        31385W-WH-8      FEDERAL NATIONAL MTG ASSOC #555148                                1              1,025,738       98.9100        1,012,037        1,023,180        1,025,232                                   (806)                                          4.964           4.800            MON              4,374     51,528    10/20/2005   01/01/2013
        31385W-YS-2      FEDERAL NATIONAL MTG ASSOC #555221                                1                177,148      103.8550          162,701          156,660          165,231                                 (5,841)                                          6.350           3.100            MON                857     10,086    02/12/2003   04/01/2011
        31385X-N3-7      FEDERAL NATIONAL MTG ASSOC #555810                                1                 46,334      100.1880           44,895           44,811           46,334                                   (236)                                          5.500           4.330            MON                205      2,465    12/24/2003   04/01/2018
        31385X-Q9-1      FEDERAL NATIONAL MTG ASSOC #555880                                1                534,588       99.0780          522,556          527,419          534,588                                 (1,074)                                          5.500           5.080            MON              2,417     29,008    12/12/2003   11/01/2033
        31389B-KN-0      FEDERAL NATIONAL MTG ASSOC #620501                                1                133,756      100.1880          129,603          129,360          132,762                                   (892)                                          5.500           4.540            MON                593      7,115    12/24/2003   03/01/2017
        31390V-LA-0      FEDERAL NATIONAL MTG ASSOC #657421                                1                 83,769      100.1880           81,168           81,016           83,769                                   (362)                                          5.500           4.240            MON                371      4,456    12/24/2003   09/01/2017
        31391D-NX-7      FEDERAL NATIONAL MTG ASSOC #663806                                1                 49,989      100.1880           48,437           48,346           49,912                                   (250)                                          5.500           4.420            MON                222      2,659    12/24/2003   10/01/2017
        31391W-GQ-8      FEDERAL NATIONAL MTG ASSOC #678907                                1              4,952,061       99.0780        4,907,554        4,953,222        4,952,170                                    109                                           5.500           5.420            MON             22,702               12/04/2006   01/01/2033
        31400D-EU-2      FEDERAL NATIONAL MTG ASSOC #684247                                1                 67,230      100.1880           65,142           65,020           67,230                                   (477)                                          5.500           4.310            MON                298      3,576    12/24/2003   01/01/2018
E08.1




        31400D-ZH-8      FEDERAL NATIONAL MTG ASSOC #684844                                1                 64,619      100.1250           62,574           62,495           64,619                                   (221)                                          5.500           4.200            MON                286      3,437    12/24/2003   02/01/2018
        31400E-GL-8      FEDERAL NATIONAL MTG ASSOC #685203                                1              1,509,785      100.1250        1,461,987        1,460,162        1,508,283                                 (7,101)                                          5.500           4.420            MON              6,692     80,309    12/24/2003   04/01/2018
        31400H-KM-4      FEDERAL NATIONAL MTG ASSOC #688000                                1                410,525      100.1250          397,528          397,032          410,525                                 (2,172)                                          5.500           4.400            MON              1,820     21,837    12/24/2003   03/01/2018
        31400S-BV-0      FEDERAL NATIONAL MTG ASSOC #695852                                1                175,417       98.4840          168,853          171,452          175,417                                   (278)                                          5.000           4.260            MON                714      8,573    12/12/2003   05/01/2018
        31401J-C2-2      FEDERAL NATIONAL MTG ASSOC #709389                                1                 49,246      100.1250           47,687           47,628           49,246                                   (527)                                          5.500           4.160            MON                218      2,620    12/24/2003   07/01/2018
        31401W-JR-1      FEDERAL NATIONAL MTG ASSOC #720372                                1                191,613       98.4840          184,443          187,282          191,194                                   (777)                                          5.000           4.320            MON                780      9,364    12/12/2003   06/01/2018
        31402D-D9-8      FEDERAL NATIONAL MTG ASSOC #725628                                1                472,362       97.1880          464,617          478,058          475,330                                  1,776                                           3.887           4.210            MON              1,600     18,837    07/09/2004   06/01/2009
        31402D-EV-8      FEDERAL NATIONAL MTG ASSOC #725648                                1                151,811       98.3910          150,652          153,115          151,840                                    247                                           5.000           5.130            MON                638      7,656    10/20/2005   07/01/2019
        31402K-VX-9      FEDERAL NATIONAL MTG ASSOC #731530                                1                 69,323      100.1250           67,128           67,044           69,323                                   (358)                                          5.500           4.420            MON                307      3,687    12/24/2003   07/01/2018
        31402R-TJ-8      FEDERAL NATIONAL MTG ASSOC #735953                                1                543,238       98.6930          534,679          541,756          543,238                                   (651)                                          5.034           4.850            MON              2,348     37,502    10/20/2005   08/01/2015
        31403L-KG-5      FEDERAL NATIONAL MTG ASSOC #751895                                1                 22,406       98.4840           22,255           22,598           22,406                                     44                                           5.000           5.150            MON                 94      1,130    10/20/2005   12/01/2018
        31403N-TY-3      FEDERAL NATIONAL MTG ASSOC #753967                                1                168,794       98.4840          162,478          164,979          168,794                                   (667)                                          5.000           4.270            MON                687      8,249    12/12/2003   12/01/2018
        31404D-YR-3      FEDERAL NATIONAL MTG ASSOC #765820                                1                666,629       98.3910          661,536          672,355          666,629                                  1,018                                           5.000           5.140            MON              2,801     33,618    10/20/2005   02/01/2019
        31404K-PE-6      FEDERAL NATIONAL MTG ASSOC #770921                                1                361,585       98.3910          358,822          364,690          361,670                                    583                                           5.000           5.130            MON              1,520     18,234    10/20/2005   04/01/2019
        31406W-ZW-7      FEDERAL NATIONAL MTG ASSOC #822557                                1                207,477       98.2960          205,695          209,259          207,565                                    258                                           5.000           5.120            MON                872     10,463    10/20/2005   11/01/2020
        31407F-J9-2      FEDERAL NATIONAL MTG ASSOC #829288                                1              4,880,565       98.8590        4,875,152        4,931,420        4,880,785                                    567                                           5.500           5.630            MON             22,602     22,602    11/02/2006   09/01/2035
        31407J-7J-5      FEDERAL NATIONAL MTG ASSOC #832597                                1              2,370,306      100.6710        2,357,138        2,341,404        2,370,306                                 (6,534)                                          6.000           5.520            MON             11,707    140,484    10/20/2005   09/01/2035
        31407V-NA-9      FEDERAL NATIONAL MTG ASSOC #841985                                1                418,687       98.2960          415,091          422,283          418,878                                    538                                           5.000           5.120            MON              1,760     21,114    10/20/2005   10/01/2020
        31407X-QW-4      FEDERAL NATIONAL MTG ASSOC #843869                                1                517,798       98.2960          513,351          522,245          518,049                                    691                                           5.000           5.120            MON              2,176     26,112    10/20/2005   11/01/2020
        31408A-AJ-9      FEDERAL NATIONAL MTG ASSOC #845209                                1              1,869,844       96.5610        1,862,300        1,928,606        1,874,820                                  6,738                                           5.000           5.480            MON              8,036     96,430    10/20/2005   11/01/2035
        31408E-VQ-2      FEDERAL NATIONAL MTG ASSOC #849423                                1                195,645       98.2960          193,965          197,326          195,745                                    276                                           5.000           5.120            MON                822      9,866    10/20/2005   11/01/2020
          2699999 - Total Bonds - Special Revenue - Single Class Mortgage-Backed/Asset-Backed
                        Securities                                                                       35,891,212       XXX            35,451,966      36,010,575        35,862,047                               (25,549)                                        XXX          XXX             XXX               159,494      1,346,298      XXX          XXX
        31340Y-CS-6      FEDERAL HOME LOAN MTG CORP 10 E                     1             1                 65,959      100.0000            58,307          58,307            58,307                                (3,130)                                         10.000         6.720              MON             757          5,831   02/19/1993   07/15/2019
        31392B-NQ-5      FEDERAL NATIONAL MTG ASSOC 01 81 PE                               1                267,586      100.0010           271,922         271,919           270,046                                (1,541)                                          6.000         6.380              MON           1,360         16,315   02/08/2002   05/25/2030
        31393R-ZN-3      FEDERAL HOME LOAN MTG CORP 2627 BG                  1             1                180,076       93.9980           176,437         187,702           181,127                                 1,835                                           3.250         4.480              MON             508          6,100   04/21/2005   06/15/2017
        31393V-A6-8      FEDERAL HOME LOAN MTG CORP 2634 TA                  1             1                341,256       95.3820           338,897         355,301           343,109                                 3,444                                           3.500         4.720              MON           1,036         12,436   04/12/2005   07/15/2017
        31395N-GR-2      FEDERAL NATIONAL MTG ASSOC 06 53 PA                               1                996,758       99.5400           995,404       1,000,000           996,758                                                                                 5.500         5.480              MON           4,583         32,083   05/05/2006   12/25/2026
          2799999 - Total Bonds - Special Revenue - Defined Multi-Class Residential Mortgage-Backed
                        Securities                                                                        1,851,635       XXX            1,840,967        1,873,229        1,849,346                                       608                                      XXX          XXX             XXX                   8,245      72,765       XXX          XXX
        38373M-AN-0      GOVERNMENT NATL MTG ASSOC 01 34 B                   1             1                815,141      101.6320          828,444          815,141          815,141                                                                                  6.403         6.340              MON             4,350      53,337    06/27/2001   10/16/2020
        38373M-AW-0      GOVERNMENT NATL MTG ASSOC 01 44 C                   1             1              1,000,000      102.1170        1,021,170        1,000,000        1,000,000                                                                                  6.380         6.350              MON             5,317      63,800    09/05/2001   01/16/2025
        38373M-BY-5      GOVERNMENT NATL MTG ASSOC 02 35 C                   1             1                332,936      101.2570          337,718          333,526          332,936                                 (5,550)                                          5.886         5.910              MON             1,639      20,766    04/15/2002   10/16/2023
          2999999 - Total Bonds - Special Revenue - Defined Multi-Class Commercial Mortgage-Backed
                        Securities                                                                        2,148,077       XXX             2,187,332       2,148,667         2,148,077                                (5,550)                                        XXX          XXX             XXX                11,305        137,902      XXX           XXX
          3199999 - Total - Special Revenue Bonds                                                        41,248,927       XXX            40,875,038      41,342,471        41,200,601                               (36,731)                                        XXX          XXX             XXX               219,480      1,641,012      XXX           XXX
                                                                                                            ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                                                              SCHEDULE D - PART 1
                                                                                                                                       Showing all Long-Term BONDS Owned December 31 of Current Year
              1                          2                         Codes          6             7                   Fair Value                10               11                       Change in Book Adjusted Carrying Value                                                 Interest                                           Dates
                                                              3    4     5                                      8                9                                            12                  13                 14                 15           16           17            18                19            20           21           22
                                                                   F
                                                                   o
                                                                   r                                                                                                                                              Current Year’s
                                                                   e                                                                                                       Unrealized                              Other Than      Total Foreign
                                                                   i                                        Rate Used                                                       Valuation       Current Year’s         Temporary        Exchange                                                   Admitted   Gross Amt.
           CUSIP                                                   g   Bond     NAIC                        to Obtain                                     Book/Adjusted     Increase/       (Amortization)/        Impairment       Change in                  Effective                     Amount Due & Rec. During
        Identification             Description                 *   n   CHAR   Designation   Actual Cost     Fair Value    Fair Value       Par Value      Carrying Value   (Decrease)         Accretion            Recognized       B./A.C.V.      Rate of     Rate of       How Paid          Accrued       Year         Acquired     Maturity
        202795-GU-8      COMMONWEALTH EDISON COMPANY                              1FE              60,937      102.9340         56,614           55,000           57,861                                (1,989)                                        8.000         4.060              MN                562     4,400   06/03/2005   05/15/2008
        373334-GA-3      GEORGIA POWER COMPANY                            1       1FE             299,346       98.8870        296,661          300,000          299,405                                    57                                         5.250         5.270              JD                700    16,144   11/30/2005   12/15/2015
        69351U-AA-1      PPL ELECTRIC UTILITIES                           1       1FE             124,221      100.2470        125,309          125,000          124,905                                   144                                         5.875         6.000              FA              2,774     7,344   08/16/2001   08/15/2007
        797440-BG-8      SAN DIEGO GAS & ELECTRIC                         1       1FE             249,503       99.3080        248,272          250,000          249,545                                    38                                         5.300         5.320              MN              1,693    13,176   11/14/2005   11/15/2015
        806860-AA-0      SCHLUMBERGER TECH CORP                           1       1FE             104,980      105.1060        105,106          100,000          103,047                                  (479)                                        6.500         5.820              AO              1,372     6,500   07/09/2002   04/15/2012
        837004-BQ-2      SOUTH CAROLINA ELECTRIC & GAS                    1       1FE             997,530      104.6500      1,046,508        1,000,000          998,783                                   227                                         6.700         6.730              FA             27,917    67,000   01/19/2001   02/01/2011
        842400-ES-8      SOUTHERN CALIFORNIA EDISON                       1       2FE             124,174      101.9530        127,441          125,000          124,206                                    11                                         6.000         6.040              JJ              3,458     7,500   01/07/2004   01/15/2034
        927804-EW-0      VIRGINIA ELECTRIC & POWER COMPANY                1       2FE             151,586       97.8320        146,749          150,000          151,276                                  (112)                                        5.250         5.130              JD                350     7,875   12/29/2003   12/15/2015
        976826-BB-2      WISCONSIN POWER & LIGHT COMPANY                          1FE             107,923      100.5030        100,504          100,000          103,189                                (1,692)                                        5.700         3.830              AO              1,203     5,700   02/03/2004   10/15/2008
          3299999 - Total Bonds - Public Utilities - Issuer Obligations                         2,220,199       XXX          2,253,165        2,205,000        2,212,219                                (3,796)                                      XXX          XXX           XXX                    40,030   135,639      XXX          XXX
          3899999 - Total - Public Utilities Bonds                                              2,220,199       XXX          2,253,165        2,205,000        2,212,219                                (3,796)                                      XXX          XXX           XXX                    40,030   135,639      XXX          XXX
        00163X-AL-4      AMB PROPERTY LP                                  1       2FE             159,851      100.1530        160,245          160,000          159,883                                    29                                         5.450         5.470              JD                727     8,962   11/14/2005   12/01/2010
        00184A-AE-5      AOL TIME WARNER INC                              1       2FE             136,836      100.1850        125,232          125,000          126,238                                (3,648)                                        6.150         3.130              MN              1,281     7,688   12/29/2003   05/01/2007
        00209A-AF-3      AT&T WIRELESS SERVICES INC                       1       2FE             197,913      129.9550        194,934          150,000          196,966                                  (812)                                        8.750         6.220              MS              4,375    13,125   10/20/2005   03/01/2031
        007634-AA-6      AEGON FUNDING CORP                               1       1FE             249,775      101.0720        252,682          250,000          249,787                                    11                                         5.750         5.750              JD                639    14,495   12/05/2005   12/15/2020
        013817-AD-3      ALCOA INC                                        1       1FE             505,535      104.3770        521,885          500,000          502,894                                  (552)                                        6.500         6.340              JD              2,708    32,500   06/14/2001   06/01/2011
        020012-AE-0      ALLSTATE FINL GLOBAL FND                                 1FE              85,178      104.7460         78,560           75,000           81,542                                (1,306)                                        6.500         4.320              JD                230     4,875   02/03/2004   06/14/2011
        02209S-AA-1      ALTRIA GROUP INC                                         2FE             188,494      108.6510        190,139          175,000          186,913                                (1,383)                                        7.000         5.780              MN              1,940    12,250   11/03/2005   11/04/2013
        026351-BC-9      AMERICAN GENERAL FINANCE CORP                            1FE              92,540      107.2990         85,839           80,000           86,326                                (1,559)                                        7.500         5.070              FA              2,333     6,000   08/29/2002   08/11/2010
        054937-AC-1      BB&T CORPORATION                                         1FE             109,397      104.8460        104,846          100,000          105,357                                (1,011)                                        6.500         5.170              FA              2,708     6,500   08/21/2002   08/01/2011
E08.2




        060505-AG-9      BANK OF AMERICA CORPORATION                              1FE             450,165      107.7090        430,836          400,000          434,031                                (7,439)                                        7.400         5.040              JJ             13,649    29,600   10/20/2005   01/15/2011
        06406H-AY-5      BANK OF NEW YORK CO INC                                  1FE             299,328       99.0160        297,051          300,000          299,468                                   140                                         4.950         4.990              JJ              6,889     8,704   12/08/2005   01/14/2011
        079860-AJ-1      BELLSOUTH CORPORATION                            1       1FE             109,732       96.5020        106,152          110,000          109,793                                    30                                         4.750         4.780              MN                668     5,225   11/08/2004   11/15/2012
        084423-AM-4      BERKLEY (WR) CORP                                1       2FE              84,935       98.2900         83,547           85,000           84,944                                     5                                         5.600         5.610              MN                608     4,760   05/04/2005   05/15/2015
        097014-AD-6      BOEING CAPITAL CORP                                      1FE             108,108      103.3100        103,311          100,000          105,063                                (1,075)                                        6.100         4.740              MS              2,033     6,100   01/07/2004   03/01/2011
        125581-AA-6      CIT GROUP INC                                            1FE             106,787      100.4710        100,472          100,000          100,419                                (1,613)                                        7.375         5.660              AO              1,823     7,375   08/29/2002   04/02/2007
        126650-AV-2      CVS CORP                                         1       2FE              39,662       95.5860         38,234           40,000           39,724                                    29                                         4.875         4.980              MS                574     1,950   11/22/2004   09/15/2014
        141781-AR-5      CARGILL INC                                      1       1FE             259,083       94.2530        259,198          275,000          260,956                                 1,799                                         4.375         5.320              JD              1,003    12,031   12/13/2005   06/01/2013
        149123-BN-0      CATERPILLAR INC                                  1       1FE             189,345      102.9330        195,573          190,000          189,350                                     6                                         6.050         6.070              FA              4,566             08/03/2006   08/15/2036
        152312-AG-9      CENTEX CORPORATION                               1       2FE             108,921      107.8030        107,803          100,000          104,869                                (1,011)                                        7.875         6.490              FA              3,281     7,875   07/09/2002   02/01/2011
        172062-AF-8      CINCINNATI FINANCIAL CORP                                1FE             169,154      110.6810        166,022          150,000          168,466                                  (423)                                        6.920         5.890              MN              1,326    10,380   04/29/2005   05/15/2028
        172967-CQ-2      CITIGROUP INC                                            1FE             422,181       97.6390        425,706          436,000          424,303                                 1,187                                         5.000         5.420              MS              6,419    21,800   10/20/2005   09/15/2014
        20029P-AL-3      COMCAST CABLE COMMUNICATIONS                     1       2FE             323,908      104.7780        314,334          300,000          316,952                                (3,642)                                        6.750         5.180              JJ              8,494    20,250   10/20/2005   01/30/2011
        22237L-NR-9      COUNTRYWIDE HOME LOANS INC                               1FE             147,686       97.2160        145,824          150,000          149,229                                   532                                         3.250         3.630              MN                542     4,875   12/29/2003   05/21/2008
        224044-BD-8      COX COMMUNICATIONS INC                           1       2FE             112,919      104.5410        104,541          100,000          108,075                                (1,703)                                        6.750         4.610              MS              1,988     6,750   01/06/2004   03/15/2011
        224044-BE-6      COX COMMUNICATIONS INC                           1       2FE             134,878      106.6060        133,258          125,000          133,457                                (1,207)                                        7.125         5.720              AO              2,227     8,906   10/20/2005   10/01/2012
        233835-AW-7      DAIMLERCHRYSLER NA HOLDINGS                              2FE             313,782      102.6690        308,010          300,000          312,142                                (1,403)                                        6.500         5.770              MN              2,492    19,500   10/20/2005   11/15/2013
        244217-BK-0      DEERE (JOHN) CAPITAL CORPORATION                         1FE             128,108       98.2520        122,815          125,000          127,221                                  (311)                                        5.100         4.750              JJ              2,940     6,375   12/29/2003   01/15/2013
        24422E-PX-1      DEERE (JOHN) CAPITAL CORPORATION                         1FE             139,642       98.2540        137,557          140,000          139,718                                    65                                         4.875         4.930              AO              1,441     6,635   10/20/2005   10/15/2010
        25179S-AC-4      DEVON FINANCING CORP ULC                         1       2FE             111,630      105.7400        105,741          100,000          107,283                                (1,327)                                        6.875         5.120              MS              1,738     6,875   12/29/2003   09/30/2011
        268766-BU-5      EOP OPERATING LP                                 1       2FE             105,253      108.2170        108,217          100,000          103,007                                  (557)                                        7.000         6.220              JJ              3,228     7,000   07/09/2002   07/15/2011
        26882P-AT-9      ERAC USA FINANCE COMPANY                         1       2FE             249,235      101.0400        252,600          250,000          249,301                                    58                                         5.900         5.940              MN              1,885    14,750   11/07/2005   11/15/2015
        26884A-AU-7      ERP OPERATING LP                                 1       2FE             273,661       98.9540        272,124          275,000          273,661                                                                               5.375         5.430              FA              6,159     7,883   01/11/2006   08/01/2016
        29452P-AB-2      EQUITABLE LIFE ASSURANCE SOCIETY                         1FE             242,034      113.7350        227,471          200,000          233,989                                (2,917)                                        7.700         5.280              JD              1,283    15,400   02/03/2004   12/01/2015
        33738M-AE-1      FIRST UNION NATIONAL BANK NC                             1FE             234,357      107.5650        215,130          200,000          218,913                                (4,669)                                        7.800         4.910              FA              5,763    15,600   12/29/2003   08/18/2010
        343254-AJ-7      FLORIDA WINDSTORM UNDER                          1       1FE             237,960      114.6340        229,268          200,000          232,761                                (1,883)                                        7.125         5.280              FA              4,988    14,250   02/03/2004   02/25/2019
        368710-AG-4      GENENTECH INC                                    1       1FE             124,921       95.7330        119,666          125,000          124,935                                     8                                         4.750         4.750              JJ              2,738     5,888   11/21/2005   07/15/2015
        36962G-ZY-3      GENERAL ELECTRIC CAPITAL CORPORATION                     1FE             235,431      100.9560        227,151          225,000          232,457                                (1,041)                                        5.450         4.810              JJ              5,654    12,263   12/29/2003   01/15/2013
        37247X-AD-4      GENWORTH GLOBAL FUNDING                                  1FE             249,723      102.0860        255,215          250,000          249,761                                    38                                         5.750         5.760              JD                639     8,306   05/11/2006   05/15/2013
        38141G-BU-7      GOLDMAN SACHS GROUP INC                          1       1FE             187,058      105.7140        185,001          175,000          182,877                                (1,340)                                        6.600         5.540              JJ              5,326    11,550   12/29/2003   01/15/2012
        382388-AM-8      GOODRICH CORP                                    1       2FE             182,499      101.8420        178,225          175,000          180,206                                (2,011)                                        6.600         5.240              MN              1,476    11,550   11/04/2005   05/15/2009
        406216-AH-4      HALLIBURTON COMPANY                                      2FE             265,144      125.2610        250,523          200,000          265,144                                                                               8.750         5.530              FA              6,611    17,500   01/20/2006   02/15/2021
        416515-AR-5      HARTFORD FINANCIAL SERVICES GROUP                1       1FE              84,842       99.9320         84,942           85,000           84,846                                     4                                         5.500         5.520              AO              1,143             09/28/2006   10/15/2016
        444859-AU-6      HUMANA INC                                               2FE             129,344      100.7280        125,911          125,000          128,867                                  (227)                                        6.300         5.920              FA              3,281     7,875   10/01/2004   08/01/2018
        46625H-AJ-9      JP MORGAN CHASE & COMPANY                                1FE             215,666      105.1300        210,262          200,000          212,509                                (2,691)                                        6.750         5.030              FA              5,625    13,500   10/20/2005   02/01/2011
        46625H-AP-5      JP MORGAN CHASE & COMPANY                                1FE             133,601       99.9910        124,989          125,000          126,097                                (2,598)                                        5.250         3.090              MN                565     6,563   01/06/2004   05/30/2007
                                                                                                               ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                                                                     SCHEDULE D - PART 1
                                                                                                                                             Showing all Long-Term BONDS Owned December 31 of Current Year
              1                          2                          Codes          6             7                     Fair Value                    10               11                       Change in Book Adjusted Carrying Value                                                   Interest                                           Dates
                                                                3   4     5                                        8                9                                                12                  13                 14                 15           16           17              18                19            20           21           22
                                                                    F
                                                                    o
                                                                    r                                                                                                                                                    Current Year’s
                                                                    e                                                                                                             Unrealized                              Other Than      Total Foreign
                                                                    i                                          Rate Used                                                           Valuation       Current Year’s         Temporary        Exchange                                                     Admitted   Gross Amt.
           CUSIP                                                    g   Bond     NAIC                          to Obtain                                         Book/Adjusted     Increase/       (Amortization)/        Impairment       Change in                  Effective                       Amount Due & Rec. During
        Identification              Description                 *   n   CHAR   Designation   Actual Cost       Fair Value    Fair Value           Par Value      Carrying Value   (Decrease)         Accretion            Recognized       B./A.C.V.      Rate of     Rate of         How Paid          Accrued       Year         Acquired     Maturity
        494368-AR-4      KIMBERLY CLARK CORPORATION                      1         1FE               495,730      101.6680              508,340        500,000          497,514                                   397                                         5.625           5.730              FA             10,625    28,125   02/05/2002   02/15/2012
        49446Q-BD-2      KIMCO REALTY CORP                               1         2FE               145,066      100.1460              145,212        145,000          145,058                                    (6)                                        5.584           5.570              AO              2,024     7,335   11/16/2005   11/23/2015
        50075N-AH-7      KRAFT FOODS INC                                           2FE               109,395      103.8790              103,880        100,000          106,496                                (1,025)                                        6.250           4.870              JD                521     6,250   01/07/2004   06/01/2012
        501044-CC-3      KROGER CO                                       1         2FE               110,344      104.9310              104,931        100,000          106,836                                (1,096)                                        6.750           5.250              AO              1,425     6,750   12/29/2003   04/15/2012
        577778-BN-2      MAY DEPARTMENT STORES COMPANY (THE)             1         2FE               196,971      109.7340              192,035        175,000          193,782                                (2,806)                                        8.000           5.710              JJ              6,456    14,000   11/03/2005   07/15/2012
        590188-JP-4      MERRILL LYNCH & COMPANY INC                               1FE               186,806      101.6270              177,849        175,000          179,869                                (2,142)                                        6.000           4.600              FA              3,908    10,500   12/29/2003   02/17/2009
        59156R-AN-8      METLIFE INC                                     1         1FE               149,955       96.9870              145,481        150,000          149,959                                     4                                         5.000           5.000              JD                333     7,500   06/21/2005   06/15/2015
                         MORGAN STANLEY DEAN WITTER
        617446-GM-5      CORPORATION                                     1         1FE               322,630      105.6970              317,091        300,000          316,545                                (3,358)                                        6.750           5.290              AO             4,275     20,250   10/20/2005   04/15/2011
        61980A-AA-1      MOTIVA ENTERPRISES LLC                          1         1FE                69,780       98.7460               69,122         70,000           69,860                                    21                                         5.200           5.240              MS             1,072      3,640   09/18/2002   09/15/2012
        63538W-AA-6      NATIONAL CITY BANK OF PENNSYLVANIA                        1FE               176,871      108.5740              162,862        150,000          167,816                                (3,256)                                        7.250           4.470              AO             2,115     10,875   02/03/2004   10/21/2011
        637432-DC-6      NATIONAL RURAL UTILITIES COOPERATIVE            1         1FE               199,934       96.4750              192,952        200,000          199,951                                     6                                         4.750           4.750              MS             3,167      9,500   02/18/2004   03/01/2014
        64952W-AB-9      NEW YORK LIFE GLOBAL FUNDING                              1FE               149,933       97.3100              145,966        150,000          149,971                                    13                                         3.875           3.880              JJ             2,680      5,813   01/05/2004   01/15/2009
        652482-BD-1      NEWS AMERICA INC                                          2FE               128,053       98.3340              122,918        125,000          126,699                                  (468)                                        4.750           4.290              MS             1,748      5,938   01/06/2004   03/15/2010
        652482-BL-3      NEWS AMERICA INC                                1         2FE               149,745       99.3430              149,015        150,000          149,745                                                                               6.400           6.410              JD               427      9,387   12/20/2005   12/15/2035
        655844-AP-3      NORFOLK SOUTHERN CORPORATION                    1         2FE               215,988      105.1660              210,332        200,000          212,790                                (2,723)                                        6.750           5.010              FA             5,100     13,500   10/20/2005   02/15/2011
        681919-AS-5      OMNICOM GROUP INC                               1         2FE               199,020      101.0560              202,112        200,000          199,083                                    63                                         5.900           5.960              AO             2,491      6,424   03/24/2006   04/15/2016
        69347U-AC-4      PNC FUNDING CORP                                          1FE               299,883       99.4150              298,245        300,000          299,905                                    21                                         5.125           5.130              JD               726     15,375   12/07/2005   12/14/2010
        6944P0-AA-3      PACIFIC LIFE GLOBAL FUNDING                               1FE               179,570       97.2800              175,106        180,000          179,815                                    86                                         3.750           3.800              JJ             3,113      6,750   01/08/2004   01/15/2009
        706451-AA-9      PEMEX PROJECT FUNDING MASTER TR                           2FE               115,250      103.0000              103,000        100,000          104,428                                (3,771)                                        8.500           4.400              FA             3,211      8,500   12/29/2003   02/15/2008
E08.3




        724477-AF-1      PITNEY BOWES CREDIT CORP                                  1FE               231,642      103.5510              207,103        200,000          206,716                                (5,657)                                        8.625           5.490              FA             6,517     17,250   02/11/2002   02/15/2008
        74251V-AA-0      PRINCIPAL FINANCIAL GROU                        1         1FE                64,573      102.3650               66,538         65,000           64,574                                     1                                         6.050           6.090              AO               819              10/11/2006   10/15/2036
        74432Q-AB-1      PRUDENTIAL FINANCIAL INC                                  1FE               141,221       95.2900              142,935        150,000          143,225                                   846                                         4.500           5.320              JJ             3,113      6,750   07/12/2004   07/15/2013
        74834L-AK-6      QUEST DIAGNOSTIC INC                            1         2FE               199,624       98.4760              196,954        200,000          199,704                                    69                                         5.125           5.160              MN             1,708     10,278   10/25/2005   11/01/2010
        75884R-AP-8      REGENCY CENTERS LP                              1         2FE                64,910       96.9520               63,019         65,000           64,925                                     9                                         5.250           5.260              FA             1,422      3,536   11/01/2005   08/01/2015
        758940-AG-5      REGIONS FINANCIAL CORPORATION                             1FE               110,535      104.5250              104,525        100,000          107,772                                (1,244)                                        6.375           4.720              MN               815      6,375   09/10/2004   05/15/2012
        78387G-AP-8      SBC COMMUNICATIONS INC                          1         1FE               124,864       97.0940              121,368        125,000          124,882                                    12                                         5.100           5.110              MS             1,877      6,375   10/27/2004   09/15/2014
        828807-BM-8      SIMON PROPERTY GROUP LP                         1         2FE               194,396       97.2570              194,514        200,000          194,952                                   459                                         5.100           5.470              JD               453     10,200   10/20/2005   06/15/2015
        844741-AY-4      SOUTHWEST AIRLINES CO                           1         2FE               149,301       97.9940              146,992        150,000          149,304                                     3                                         5.750           5.810              JD               407              12/11/2006   12/15/2016
        852060-AJ-1      SPRINT CAPITAL CORPORATION                      1         2FE               221,566      107.0700              214,140        200,000          217,234                                (3,691)                                        7.625           5.250              JJ             6,397     15,250   10/20/2005   01/30/2011
        87612E-AF-3      TARGET CORPORATION                              1         1FE               114,655      115.6640              115,664        100,000          113,955                                  (248)                                        7.000           5.910              JJ             3,228      7,000   12/29/2003   07/15/2031
        902984-AD-5      USA INTERACTIVE                                 1         2FE               110,926      103.5590              103,560        100,000          107,874                                (1,074)                                        7.000           5.450              JJ             3,228      7,000   12/29/2003   01/15/2013
        90520G-AA-4      UNION BANK OF CALIFORNIA                                  1FE               298,818      102.4860              307,458        300,000          298,875                                    57                                         5.950           6.000              MN             2,479      8,925   05/08/2006   05/11/2016
        91324P-AH-5      UNITEDHEALTH GROUP INC                          1         1FE               123,834       95.9680              119,960        125,000          124,116                                   102                                         4.750           4.860              FA             2,326      5,938   02/05/2004   02/10/2014
        91913Y-AD-2      VALERO ENERGY CORP                              1         2FE               239,002      105.7310              237,895        225,000          236,189                                (1,783)                                        6.875           5.760              AO             3,266     15,469   10/22/2005   04/15/2012
        925524-AQ-3      VIACOM INC                                      1         2FE               104,982      103.2860              103,286        100,000          104,047                                  (797)                                        6.625           5.560              MN               847      6,625   10/20/2005   05/15/2011
        925524-BB-5      VIACOM INC                                      1         2FE               275,784       99.3070              275,080        277,000          275,862                                    78                                         6.250           6.300              AO             2,934      9,522   04/05/2006   04/30/2016
        94973V-AJ-6      WELLPOINT INC                                   1         2FE               204,658       98.7790              202,497        205,000          204,658                                                                               5.000           5.030              JJ             4,726      5,267   01/05/2006   01/15/2011
        949746-EX-5      WELLS FARGO & COMPANY                                     1FE               125,554       97.9290              122,411        125,000          125,174                                  (133)                                        3.500           3.380              AO             1,057      4,375   01/06/2004   04/04/2008
        960402-AQ-8      WESTINGHOUSE ELECTRIC                                     2FE               112,500      111.9230              106,327         95,000          108,987                                (2,086)                                        8.625           5.520              FA             3,414      8,194   04/06/2005   08/01/2012
        962166-BA-1      WEYERHAEUSER COMPANY                            1         2FE                57,207      100.7990               53,423         53,000           54,704                                  (878)                                        5.950           4.110              MN               526      3,154   01/07/2004   11/01/2008
        983024-AA-8      WYETH                                           16        1FE               128,093      100.6470              125,809        125,000          127,252                                  (301)                                        5.500           5.150              MS             2,024      6,875   01/07/2004   03/15/2013
        98385X-AA-4      XTO ENERGY INC                                  1         2FE               166,995      108.6440              162,967        150,000          164,379                                (2,289)                                        7.500           5.390              AO             2,375     11,250   11/03/2005   04/15/2012
        013716-AP-0      ALCAN INC                                  F    1         2FE               105,753      103.5070              103,507        100,000          103,137                                  (645)                                        6.450           5.600              MS             1,899      6,450   07/09/2002   03/15/2011
        136375-BE-1      CANADIAN NATIONAL RAILWAY COMPANY          F              1FE               267,445      112.4300              281,075        250,000          267,352                                   (93)                                        6.712           6.190              JJ             7,737              07/07/2006   07/15/2036
        136385-AE-1      CANADIAN NATL RESOURCES                    F    1         2FE                44,767      100.0600               45,027         45,000           44,774                                    (8)                                        6.450           6.490              JD             1,459      1,451   09/09/2002   06/30/2033
        60871N-AC-3      MOLSON COORS CAPITAL FIN                   F    1         2FE                14,999       97.9970               14,700         15,000           15,000                                                                               4.850           4.840              MS               200        728   12/05/2005   09/22/2010
        611688-AA-0      MONSANTO CO CANADA                         F    1         2FE               213,296       93.0370              209,335        225,000          213,501                                   156                                         5.500           5.860              JJ             5,191     12,891   11/03/2005   07/30/2035
        00873N-AA-1      AIFUL CORPORATION                          F    1         2FE                97,064       95.9130               95,913        100,000           97,812                                   632                                         4.450           5.210              FA             1,669      3,034   10/20/2005   02/16/2010
        111021-AD-3      BRITISH TELECOMMUNICATIONS PLC             F    16        2FE               121,717      111.6000              111,601        100,000          113,235                                (2,981)                                        8.375           4.670              JD               372      8,375   01/06/2004   12/15/2010
        21987B-AJ-7      CODELCO INC                                F              1FE               123,103       95.0660              118,833        125,000          123,440                                   161                                         4.750           4.940              AO             1,253      5,938   10/21/2004   10/15/2014
        25156P-AC-7      DEUTSCHE TELEKOM INTL FINANCE              F    6         1FE               125,968      122.9330              122,934        100,000          125,357                                  (472)                                        8.250           6.180              JD               367      8,250   10/20/2005   06/15/2030
        25156P-AE-3      DEUTSCHE TELEKOM INTL FINANCE              F    1         1FE               125,740       97.8720              122,340        125,000          125,269                                  (165)                                        3.875           3.730              JJ             2,139      4,844   01/12/2004   07/22/2008
        25244S-AC-5      DIAGEO FINANCE BV                          F              1FE               199,570       97.9720              195,944        200,000          199,610                                    34                                         5.300           5.320              AO             1,855     10,600   10/25/2005   10/28/2015
        35177P-AL-1      FRANCE TELECOM                             F    16        1FE               133,290      131.2720              131,272        100,000          130,640                                (1,656)                                        8.500           6.060              MS             2,833      8,500   01/06/2004   03/01/2031
        4041A2-AF-1      HBOS PLC                                   F              1FE               206,832      102.2120              204,426        200,000          206,712                                  (103)                                        6.000           5.750              MN             2,000     12,000   10/26/2005   11/01/2033
        404280-AA-7      HSBC HOLDINGS PLC                          F              1FE               175,355      105.3870              158,081        150,000          162,366                                (4,536)                                        7.500           4.050              JJ             5,188     11,250   01/06/2004   07/15/2009
                                                                                                                    ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                                                                          SCHEDULE D - PART 1
                                                                                                                                                  Showing all Long-Term BONDS Owned December 31 of Current Year
              1                          2                         Codes                 6            7                     Fair Value                    10               11                        Change in Book Adjusted Carrying Value                                                     Interest                                             Dates
                                                              3    4     5                                              8                9                                                 12                  13                 14                   15           16           17              18                19            20             21           22
                                                                   F
                                                                   o
                                                                   r                                                                                                                                                             Current Year’s
                                                                   e                                                                                                                    Unrealized                                Other Than      Total Foreign
                                                                   i                                                Rate Used                                                            Valuation       Current Year’s           Temporary        Exchange                                                     Admitted   Gross Amt.
           CUSIP                                                   g   Bond          NAIC                           to Obtain                                         Book/Adjusted      Increase/       (Amortization)/          Impairment       Change in                  Effective                       Amount Due & Rec. During
        Identification             Description                *    n   CHAR        Designation    Actual Cost       Fair Value    Fair Value           Par Value      Carrying Value    (Decrease)         Accretion              Recognized       B./A.C.V.      Rate of     Rate of         How Paid          Accrued       Year           Acquired     Maturity
        606866-AA-9      MIZUHO FINANCIAL GROUP CAYMAN               F                    1FE           257,700        100.5860         251,465             250,000           256,823                                  (745)                                          5.790         5.330                AO           3,056        14,475    10/20/2005   04/15/2014
        826200-AC-1      SIEMENS FINANCIERINGSMAT                    F       1            1FE           249,365        101.3490         253,372             250,000           249,407                                    42                                           5.750         5.780                AO           5,391                  08/09/2006   10/17/2016
        87927V-AL-2      TELECOM ITALIA CAPITAL                      F       1            2FE           239,353         92.6430         231,610             250,000           240,493                                   965                                           4.950         5.560                MS           3,128        12,375    10/20/2005   09/30/2014
        87938W-AC-7      TELEFONICA EMISIONES SAU                    F       1            2FE           150,000        106.2160         159,324             150,000           150,000                                                                                 7.045         7.040                JD             323         5,284    06/09/2006   06/20/2036
        902118-AY-4      TYCO INTERNATIONAL GROUP SA                 F       1            2FE           260,843        105.4400         263,600             250,000           258,892                                (1,845)                                          6.750         5.760                FA           6,375        16,875    12/05/2005   02/15/2011
        902671-AA-4      UFJ FINANCE ARUBA AEC                       F                    1FE           272,668        106.7160         266,790             250,000           269,782                                (2,468)                                          6.750         5.300                JJ           7,781        16,875    10/20/2005   07/15/2013
        92857W-AF-7      VODAFONE GROUP PLC                          F       1            1FE           134,579         96.6490         130,476             135,000           134,714                                    34                                           5.000         5.030                JD             281         6,750    12/29/2003   12/16/2013
        947075-AB-3      WEATHERFORD INTL INC                        F       1            2FE           198,568        100.3870         200,774             200,000           198,572                                     4                                           6.500         6.550                FA           5,200                  08/02/2006   08/01/2036
          3999999 - Total Bonds - Industrial, Misc. - Issuer Obligations                             19,520,732         XXX          19,160,316          18,626,000        19,273,064                               (99,695)                                        XXX          XXX             XXX                315,074      1,011,199      XXX          XXX
        12668B-EG-4      COUNTRYWIDE ALT LN TR 05 85CB 2A2                   1            1FE         1,734,238        100.1230       1,736,726           1,734,577         1,734,238                                    43                                           5.500         5.390              MON            7,950         79,501   02/07/2006   02/25/2036
        126694-VM-7      COUNTRYWIDE HOME LOANS 05 HY10 3A1A                 1            1FE           813,472         99.4540         809,032             813,472           813,472                                                                                 5.402         5.280              MON            3,662         44,110   12/08/2005   02/20/2036
        12669G-HY-0      COUNTRYWIDE HOME LOANS 04 29 1A1                    1            1FE            22,912        100.0520          22,924              22,912            22,912                                                                                 5.620         5.610              MON               21          1,256   12/17/2004   02/25/2035
        12669G-NL-1      COUNTRYWIDE HOME LOANS 05 7 1A1                     1            1FE            47,484        100.1250          47,543              47,484            47,484                                                                                 5.620         5.580              MON               52          2,552   01/13/2005   03/25/2035
        36185M-BJ-0      GMAC MTG CORP LN TR 05 AR6 2A1                      1            1FE           844,860         99.5030         842,243             846,447           844,860                                      196                                        5.221         5.180              MON            3,683         44,301   11/28/2005   11/19/2035
        45254N-ML-8      IMPAC CMB TR 05 1 1A1                               1            1FE            83,698        100.2510          83,908              83,698            83,698                                                                                 5.610         5.600              MON               78          4,497   01/25/2005   04/25/2035
        59020U-2H-7      MERRILL LYNCH MTG INV INC 05 A9 2A1E                1            1FE           803,960         99.0000         800,803             808,889           804,354                                      914                                        5.161         5.260              MON            3,479         41,860   12/14/2005   12/25/2035
        59020U-NZ-4      MLCC MTG INVEST INC 04 G A1                         1            1FE            42,468         99.9310          42,439              42,468            42,468                                                                                 5.630         5.620              MON               40          2,248   12/09/2004   01/25/2030
        59020U-QC-2      MERRILL LYNCH MTG INV INC 05 A1 1A                  1            1FE           250,827         99.3620         251,628             253,241           251,413                                 1,195                                           4.296         4.710              MON              907         10,834   11/18/2005   12/25/2034
        59020U-TB-1      MLCC MTG INVEST INC 05 A A1                         1            1FE           104,165        100.0610         104,230             104,165           104,165                                                                                 5.580         5.570              MON               97          5,478   02/15/2005   03/25/2030
        61913P-AP-7      MORTGAGEIT TRUST 05 1 1A1                           1            1FE            62,987        100.2100          63,061              62,928            62,985                                        4                                        5.670         5.610              MON               59          3,366   04/20/2005   02/25/2035
E08.4




        61913P-AR-3      MORTGAGEIT TRUST 05 1 2A                            1            1FE           193,865         97.4950         191,645             196,568           193,960                                      246                                        4.250         4.840              MON              696          8,354   09/21/2005   02/25/2035
        81744F-FJ-1      SEQUOIA MORTGAGE TRUST 04 11 A1                     1            1FE            30,072        100.0520          30,088              30,072            30,072                                                                                 5.650         5.640              MON               52          1,597   11/17/2004   12/20/2034
        81744F-FY-8      SEQUOIA MORTGAGE TRUST 04 12 A1                     1            1FE            34,840        100.0670          34,864              34,840            34,840                                                                                 5.620         5.610              MON               60          1,839   12/10/2004   01/20/2035
        81744F-GM-3      SEQUOIA MORTGAGE TRUST 05 1 A1                      1            1FE            76,160         99.8650          76,057              76,160            76,160                                                                                 5.580         5.570              MON              130          3,992   01/20/2005   02/20/2035
        939336-Z4-8      WASHINGTON MUTUAL 05 AR3 A2                         1            1FE         1,322,775         98.6010       1,329,202           1,348,051         1,325,974                                 5,624                                           4.640         5.320              MON            5,214         46,961   03/22/2006   03/25/2035
                         WELLS FARGO MTG BKD SECS TR 05 AR4
        94981N-AH-8      2A2                                                 1            1FE         1,324,120        98.1660       1,330,075            1,354,924        1,328,369                                  7,023                                           4.523           5.370            MON              5,107      46,019    03/23/2006   04/25/2035
          4199999 - Total Bonds - Industrial, Misc. - Defined Multi-Class Residential Mortgage-
                        Backed Securities                                                             7,792,903         XXX          7,796,465            7,860,895        7,801,424                                 15,246                                         XXX          XXX             XXX                    31,288    348,765       XXX          XXX
        045424-FG-8      ASSET SECURITIZATION CORP 97 D5 A1D                 1            1FE           853,031        104.2400        833,928              800,000          839,680                                (13,055)                                          6.850         4.860              MON               3,044     57,107    12/15/2005   02/14/2043
        07383F-5K-0      BEAR STEARNS COMM MTG SECS 05 T18 A4                1            1FE           295,781         97.4560        292,368              300,000          296,166                                    327                                           4.933         5.100              MON               1,233     14,799    10/24/2005   02/13/2042
                         BEAR STEARNS COMM MTG SECS 04 PWR6
        07383F-X5-2      A6                                                  1            1FE             499,863      96.7910               483,955        500,000          499,863                                        44                                        4.825           4.810            MON              2,010      24,125    01/07/2005   11/11/2041
        07383F-XN-3      BEAR STEARNS COMM MTG SECS 03 T12 A4                1            1FE             497,539      96.8490               484,250        500,000          498,003                                       154                                        4.680           4.720            MON              1,950      23,400    12/29/2003   08/13/2039
                         CITIGROUP/DEUTSCHE BK COMM MTG 05
        12513E-AG-9      CD1 A4                                              1            1FE             907,559       99.7710              897,939        900,000          906,188                                 (1,349)                                          5.225           5.080            MON              3,919      47,683    12/16/2005   07/15/2044
        126171-AF-4      COMMERCIAL MTG PT CERT 05 C6 A5A                    1            1FE             801,500       98.5930              788,744        800,000          801,258                                   (205)                                          5.116           5.070            MON              3,411      40,928    10/21/2005   06/10/2044
        201730-AC-2      COMMERCIAL MTG ASSET TR 99 C1 A3                    1            1FE             564,297      102.4680              512,340        500,000          526,545                                (12,323)                                          6.640           3.510            MON              1,844      33,200    12/29/2003   01/17/2032
        36158Y-EQ-8      GE CAPITAL COMM MTG SVCS 02 1A A3                   1            1FE             503,594      104.4770              522,390        500,000          501,792                                   (422)                                          6.269           6.120            MON              2,612      31,345    04/18/2002   12/10/2035
        396789-ES-4      GREENWICH CAP COMM FDG CORP 03 C2 A4                1            1FE             503,887       97.9910              489,960        500,000          502,781                                   (374)                                          4.915           4.790            MON              2,048      24,575    12/29/2003   01/05/2036
        52108H-6W-9      LB-UBS COMM MTG TR 05 C5 A4                         1            1FE             789,469       97.5300              780,248        800,000          790,474                                    851                                           4.954           5.120            MON              2,202      39,632    10/24/2005   09/15/2030
        59022H-JL-7      MERRILL LYNCH MTG TR 05 CIP1 A4                     1            1FE             796,094       98.0710              784,568        800,000          796,359                                    226                                           5.047           5.090            MON              3,365      40,376    10/21/2005   07/12/2038
        74432G-AB-3      PRUDENTIAL COMM MTG 03 PWR1 A2                      1            1FE             490,918       96.0630              480,315        500,000          493,349                                    793                                           4.493           4.740            MON              1,872      22,465    12/30/2003   02/11/2036
        929766-4Q-3      WACHOVIA BK COMM MTG TR 05 C20 A7                   1            1FE             800,500       98.3900              787,120        800,000          800,302                                   (167)                                          5.118           5.080            MON              3,412      40,944    10/21/2005   07/15/2042
          4399999 - Total Bonds - Industrial, Misc. - Defined Multi-Class Commercial Mortgage-
                        Backed Securities                                                             8,304,031         XXX          8,138,125            8,200,000        8,252,758                                (25,499)                                        XXX          XXX             XXX                    32,923    440,579       XXX          XXX
        03061N-HX-0      AMERICREDIT AUTO RECV TR 05 AX A4                   1            1FE           836,384         98.4720        841,936              855,000          843,407                                  5,801                                           3.930         4.750              MON               2,333     33,602    10/26/2005   10/06/2011
        07387B-FS-7      BEAR STEARNS COMM MTG SECS 06 T22 A4                1            1FE           896,900        101.8210        916,389              900,000          896,900                                                                                  5.466         5.490              MON               4,100     33,301    04/07/2006   04/12/2038
        126694-WE-4      COUNTRYWIDE HOME LOANS 06 HYB1 1A1                  1            1FE         1,244,490         99.4150      1,244,608            1,251,923        1,245,002                                  1,596                                           5.384         5.540              MON               5,618     45,063    04/05/2006   03/20/2036
                         CABELAS MASTER CREDIT CARD TR 05 1A
        126802-AC-1      A1                                                  1            1FE             499,908      100.0040              500,024        500,000          499,918                                        8                                         4.970           4.970            MON              1,104      24,850    10/31/2005   10/15/2013
                         CAPITAL ONE MULTI-ASSET EXEC TR 03
        14041N-AW-1      A4 A4                                               1            1FE           114,789        97.5950         112,234              115,000          114,923                                        43                                        3.650           3.690            MON                187       4,197    09/19/2003   07/15/2011
        17307G-6K-9      CITIGROUP MTG LN TR INC 06 AR2 1A1                  1            1FE         1,356,293        99.7940       1,355,942            1,358,734        1,356,293                                       231                                        5.632           5.550            MON              6,377      51,048    04/05/2006   03/25/2036
        36159G-BB-2      GE BUSINESS LN TR 05 1A A2                          1            1FE           133,997        98.8720         132,488              134,000          133,997                                         1                                        4.378           4.370            MON                261       5,867    06/22/2005   06/15/2033
        44328F-AM-1      HOUSEHOLD AUTOMOTIVE TR 05 3 A4                     1            1FE           959,909        99.6220         956,371              960,000          959,933                                        18                                        4.940           4.940            MON              1,844      47,424    10/27/2005   11/19/2012
        590219-AE-1      MLCC MTG INVEST INC 06 2 2A                         1            1FE           931,147        99.5810         934,180              938,109          931,645                                       901                                        5.501           5.650            MON              4,301      30,130    05/03/2006   05/25/2036
                                                                                                                        ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                                                                                SCHEDULE D - PART 1
                                                                                                                                                        Showing all Long-Term BONDS Owned December 31 of Current Year
              1                              2                         Codes                  6           7                       Fair Value                    10               11                         Change in Book Adjusted Carrying Value                                                     Interest                                             Dates
                                                                  3    4     5                                              8                  9                                                 12                   13                 14                  15           16           17               18               19            20             21            22
                                                                       F
                                                                       o
                                                                       r                                                                                                                                                               Current Year’s
                                                                       e                                                                                                                      Unrealized                                Other Than      Total Foreign
                                                                       i                                                Rate Used                                                              Valuation         Current Year’s         Temporary        Exchange                                                     Admitted   Gross Amt.
           CUSIP                                                       g   Bond           NAIC                          to Obtain                                           Book/Adjusted      Increase/         (Amortization)/        Impairment       Change in                  Effective                       Amount Due & Rec. During
        Identification                 Description                *    n   CHAR         Designation   Actual Cost       Fair Value      Fair Value           Par Value      Carrying Value    (Decrease)           Accretion            Recognized       B./A.C.V.      Rate of     Rate of          How Paid         Accrued       Year           Acquired     Maturity
        74408A-AS-9          PROVIDIAN GATEWAY MASTR TR 04 FA A                  1            1FE             978,008      98.6890                 986,897      1,000,000          990,330                                   10,485                                         3.650            4.840            MON             1,622      36,500    10/26/2005   11/15/2011
                             WELLS FARGO MTG BKD SECS TR 06 AR8
        94983V-AF-2          2A1                                                 1            1FE         1,342,896        99.2640         1,345,528            1,355,498        1,343,985                                    2,368                                         5.240            5.490            MON             5,920      47,341    04/03/2006   04/25/2036
        96683M-AD-5          WHOLE AUTO LOAN TRUST 02 1 A4                       1            1FE             1,965        99.9110             1,926                1,928            1,929                                       (7)                                        3.040            2.360            MON                 3          59    02/20/2003   04/15/2009
          4499999 -     Total Bonds - Industrial, Misc. - Other Multi-Class Commercial Mortgage-
                            Backed/Asset-Backed Securities                                                9,296,685         XXX             9,328,523           9,370,193         9,318,261                                  21,444                                       XXX          XXX              XXX                33,670        359,381      XXX           XXX
          4599999   -   Total - Industrial and Miscellaneous Bonds                                       44,914,351         XXX            44,423,429          44,057,088        44,645,507                                 (88,504)                                      XXX          XXX              XXX               412,955      2,159,925      XXX           XXX
          5499999   -   Total - Issuer Obligations                                                       37,452,830         XXX            36,988,310          35,456,000        37,105,675           (21,671)             (187,045)                                      XXX          XXX              XXX               583,627      1,902,194      XXX           XXX
          5599999   -   Total - Single Class Mortgage-Backed/Asset-Backed Securities                     39,345,904         XXX            38,870,435          39,387,484        39,314,400                                 (44,338)                                      XXX          XXX              XXX               176,228      1,545,747      XXX           XXX
          5699999   -   Total - Defined Multi-Class Residential Mortgage-Backed Securities                9,644,538         XXX             9,637,432           9,734,124         9,650,771                                  15,854                                       XXX          XXX              XXX                39,532        421,530      XXX           XXX
          5799999   -   Total - Other Multi-Class Residential Mortgage-Backed Securities                                    XXX                                                                                                                                           XXX          XXX              XXX                                           XXX           XXX
          5899999   -   Total - Defined Multi-Class Commercial Mortgage-Backed Securities                10,452,108         XXX            10,325,457          10,348,667        10,400,835                                 (31,049)                                      XXX          XXX              XXX                   44,228    578,482       XXX           XXX
          5999999   -   Total - Other Multi-Class Commercial Mortgage-Backed Securities                   9,296,685         XXX             9,328,523           9,370,193         9,318,261                                  21,444                                       XXX          XXX              XXX                   33,670    359,381       XXX           XXX
E08.5




          6099999 Totals                                                                                106,192,065        XXX            105,150,156         104,296,468       105,789,943           (21,671)             (225,135)                                      XXX          XXX             XXX                877,285      4,807,333      XXX           XXX
                                                                                         ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                    SCHEDULE D - PART 2 - SECTION 1
                                                                                                         Showing ALL PREFERRED STOCKS Owned December 31 of Current Year
            1                            2          Codes         5       6       7         8              Fair Value         11                   Dividends                                   Change in Book/ Adjusted Carrying Value                           20        21
                                                3           4                                          9               10               12         13              14           15             16                  17                    18            19
                                                                                                    Rate Per                                                                                                                                          Total
                                                                                                     Share                                                                                                    Current Year’s           Total         Foreign
                                                                          Par             Book/     Used to                                      Amount        Nonadmitted   Unrealized      Current           Other Than             Change        Exchange
                                                                Number   Value   Rate    Adjusted    Obtain                           Declared   Received       Declared      Valuation      Year’s            Temporary                 In          Change     NAIC
         CUSIP                                                    Of      Per     Per    Carrying     Fair            Fair   Actual     But       During           But        Increase/   (Amortization)       Impairment            B./A.C.V.          In      Desig-     Date
      Identification             Description   Code Foreign     Shares   Share   Share    Value      Value           Value    Cost     Unpaid      Year          Unpaid      (Decrease)     Accretion          Recognized          (15 + 16 - 17)   B./A.C.V.   nation   Acquired
E09




      6599999 Total - Preferred Stocks                                                                 XXX                                                                                                                                                        XXX       XXX
                                                                                                           ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                                         SCHEDULE D - PART 2 - SECTION 2
                                                                                                                                  Showing all COMMON STOCKS Owned December 31 of Current Year
             1                           2                              Codes                5               6                    Fair Value                    9                                    Dividends                                Change in Book / Adjusted Carrying Value                      17         18
                                                                   3            4                                             7                8                                   10                    11           12            13               14                   15                  16
                                                                                                                          Rate per                                                                                                             Current Year’s
                                                                                                                         Share Used                                                                                             Unrealized       Other Than              Total           Total Foreign     NAIC
                                                                                                       Book / Adjusted    To Obtain                                                                  Amount       Nonadmitted    Valuation       Temporary            Change in           Exchange        Market
          CUSIP                                                                         Number of         Carrying           Fair             Fair           Actual            Declared              Received       Declared     Increase /      Impairment           B./A.C.V.           Change in      Indicator     Date
       Identification               Description                  Code       Foreign      Shares            Value           Value             Value            Cost            But Unpaid            During Year    But Unpaid   (Decrease)      Recognized             (13 - 14)          B. /A.C.V.        (a)      Acquired
E10




      7299999 Total - Common Stocks                                                                                         XXX                                                                                                                                                                            XXX         XXX
      7399999 Total - Preferred and Common Stocks                                                                           XXX                                                                                                                                                                            XXX         XXX
      (a) For all common stocks bearing the NAIC market indicator “U” provide: the number of such issues                                       , the total $ value (included in Column 8) of all such issues $
                                                                              ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                         SCHEDULE D - PART 3
                                                                                               Showing All Long-Term Bonds and Stocks ACQUIRED During Current Year
             1                                       2                3                4                                            5                                      6             7                   8                            9

           CUSIP                                                                                                                                                       Number of       Actual                                      Paid for Accrued
       Identification                            Description        Foreign      Date Acquired                                  Name of Vendor                       Shares of Stock    Cost              Par Value             Interest and Dividends
         36241K-J6-6       GOVERNMENT NATL MTG ASSOC #782085                      05/11/2006       GOLDMAN SACHS                                                                                 55,997                54,089                        179
         912810-FE-3       UNITED STATES TREASURY BONDS                           03/09/2006       BEAR STEARNS                                                                                 758,516               700,000                      2,446
        0399999 - Total   - Bonds - U.S. Government                                                                                                                                             814,513               754,089                      2,625
         91086Q-AS-7       UNITED MEXICAN STATES                       F          08/18/2006       UBS WARBURG                                                                                  157,875               150,000                      4,106
        1099999 - Total   - Bonds - All Other Government                                                                                                                                        157,875               150,000                      4,106
         3128K0-QC-0       FEDERAL HOME LN MTG CORP #A40451                       01/10/2006       GREENWICH CAPITAL                                                                            566,457               584,872                        975
         3128K1-3U-3       FEDERAL HOME LN MTG CORP #A41711                       01/10/2006       GREENWICH CAPITAL                                                                            284,672               293,926                        490
         3128K1-TJ-0       FEDERAL HOME LN MTG CORP #A41453                       01/10/2006       GREENWICH CAPITAL                                                                            282,968               292,167                        487
         3128K2-6A-2       FEDERAL HOME LN MTG CORP #A42665                       01/10/2006       GREENWICH CAPITAL                                                                            982,504             1,014,443                      1,691
         3128K2-BL-2       FEDERAL HOME LN MTG CORP #A41843                       01/10/2006       GREENWICH CAPITAL                                                                            201,214               207,755                        346
         3128K2-C2-3       FEDERAL HOME LN MTG CORP #A41889                       01/10/2006       GREENWICH CAPITAL                                                                            200,941               207,473                        346
         31297U-SZ-4       FEDERAL HOME LN MTG CORP #A38636                       01/10/2006       GREENWICH CAPITAL                                                                            387,080               399,664                        666
         31391W-GQ-8       FEDERAL NATIONAL MTG ASSOC #678907                     12/04/2006       GOLDMAN SACHS                                                                              4,952,061             4,953,222                      8,324
         31395N-GR-2       FEDERAL NATIONAL MTG ASSOC 06 53 PA                    05/05/2006       BANK OF AMERICA                                                                              996,758             1,000,000                      4,431
         31407F-J9-2       FEDERAL NATIONAL MTG ASSOC #829288                     11/02/2006       BARCLAYS CAPITAL                                                                           4,913,922             4,965,125                      9,103
        3199999 - Total   - Bonds - Special Revenue                                                                                                                                          13,768,578            13,918,646                     26,858
         07387B-FS-7       BEAR STEARNS COMM MTG SECS 06 T22 A4                   04/07/2006       BEAR STEARNS                                                                                 896,900               900,000                      2,597
         12668B-EG-4       COUNTRYWIDE ALT LN TR 05 85CB 2A2                      02/07/2006       CITIGROUP GLOBAL MARKETS                                                                   1,967,892             1,968,276                      2,706
         126694-WE-4       COUNTRYWIDE HOME LOANS 06 HYB1 1A1                     04/05/2006       GOLDMAN SACHS                                                                              1,442,032             1,450,645                      1,966
         149123-BN-0       CATERPILLAR INC                                        08/03/2006       CITIGROUP GLOBAL MARKETS                                                                     189,345               190,000
         17307G-6K-9       CITIGROUP MTG LN TR INC 06 AR2 1A1                     04/05/2006       CITIGROUP GLOBAL MARKETS                                                                   1,491,497             1,494,182                     2,106
         26884A-AU-7       ERP OPERATING LP                                       01/11/2006       JP MORGAN SECURITIES INC.                                                                    273,661               275,000
         37247X-AD-4       GENWORTH GLOBAL FUNDING                                05/11/2006       CREDIT SUISSE FIRST BOSTON                                                                   249,723               250,000
         406216-AH-4       HALLIBURTON COMPANY                                    01/20/2006       GOLDMAN SACHS                                                                                265,144               200,000                     7,778
         416515-AR-5       HARTFORD FINANCIAL SERVICES GROUP                      09/28/2006       WACHOVIA CAPITAL MARKETS                                                                      84,842                85,000
E11




         590219-AE-1       MLCC MTG INVEST INC 06 2 2A                            05/03/2006       MERRILL LYNCH                                                                                987,008               994,388                     1,065
         681919-AS-5       OMNICOM GROUP INC                                      03/24/2006       CITIGROUP GLOBAL MARKETS                                                                     199,020               200,000
         74251V-AA-0       PRINCIPAL FINANCIAL GROU                               10/11/2006       GOLDMAN SACHS                                                                                 64,573                65,000
         844741-AY-4       SOUTHWEST AIRLINES CO                                  12/11/2006       CITIGROUP GLOBAL MARKETS                                                                     149,301               150,000
         90520G-AA-4       UNION BANK OF CALIFORNIA                               05/08/2006       MERRILL LYNCH                                                                                298,818               300,000
         925524-BB-5       VIACOM INC                                             04/05/2006       BANK OF AMERICA                                                                              275,784               277,000
         939336-Z4-8       WASHINGTON MUTUAL 05 AR3 A2                            03/22/2006       MERRILL LYNCH                                                                              1,457,009             1,484,850                     5,753
         94973V-AJ-6       WELLPOINT INC                                          01/05/2006       BANK OF AMERICA                                                                              204,658               205,000
         94981N-AH-8       WELLS FARGO MTG BKD SECS TR 05 AR4 2A2                 03/23/2006       BEAR STEARNS                                                                               1,453,462             1,487,274                     5,615
         94983V-AF-2       WELLS FARGO MTG BKD SECS TR 06 AR8 2A1                 04/03/2006       CREDIT SUISSE FIRST BOSTON                                                                 1,486,055             1,500,000                     5,895
         136375-BE-1       CANADIAN NATIONAL RAILWAY COMPANY           F          07/07/2006       GOLDMAN SACHS                                                                                267,445               250,000                        93
         826200-AC-1       SIEMENS FINANCIERINGSMAT                    F          08/09/2006       DEUTSCHE BANK                                                                                249,365               250,000
         87938W-AC-7       TELEFONICA EMISIONES SAU                    F          06/09/2006       CITIGROUP GLOBAL MARKETS                                                                     150,000               150,000
         947075-AB-3       WEATHERFORD INTL INC                        F          08/02/2006       MORGAN STANLEY & CO                                                                          198,568               200,000
        4599999 - Total   - Bonds - Industrial, Misc.                                                                                                                                        14,302,100            14,326,615                    35,575
        6099997 - Total   - Bonds - Part 3                                                                                                                                                   29,043,065            29,149,350                    69,164
        6099998 - Total   - Bonds - Part 5                                                                                                                                                      249,100               250,000
        6099999 - Total   - Bonds                                                                                                                                                            29,292,165            29,399,350                    69,164
        6599998 - Total   - Preferred Stocks - Part 5                                                                                                                                                        XXX
        6599999 - Total   - Preferred Stocks                                                                                                                                                                 XXX
        7299998 - Total   - Common Stocks - Part 5                                                                                                                                                           XXX
        7299999 - Total   - Common Stocks                                                                                                                                                                    XXX
        7399999 - Total   - Preferred and Common Stocks                                                                                                                                                      XXX
      7499999 Totals                                                                                                                                                                         29,292,165      XXX                                 69,164
                                                                                                                ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                                                                 SCHEDULE D - PART 4
                                                                                                                Showing all Long-Term Bonds and Stocks SOLD, REDEEMED or Otherwise DISPOSED OF During Current Year
           1                          2                     3      4                     5              6              7             8              9              10                         Change in Book/Adjusted Carrying Value                              16             17             18                19                20               21

                                                            F                                                                                                                    11             12               13              14               15
                                                            o
                                                            r                                                                                                                                               Current Year’s                                       Book/                                                             Bond
                                                            e                                                                                                  Prior Year     Unrealized                     Other Than                      Total Foreign     Adjusted        Foreign                                        Interest/Stock
        CUSIP                                               i                                       Number of                                                 Book/Adjusted    Valuation    Current Year     Temporary     Total Change in    Exchange       Carrying Value Exchange Gain Realized Gain        Total Gain       Dividends
         Identi-                                            g   Disposal                            Shares of                                                   Carrying       Increase/   (Amortization)/   Impairment       B/A. C.V.       Change in            at         (Loss) on     (Loss) on          (Loss) on         Received         Maturity
        fication                  Description               n     Date          Name of Purchaser     Stock      Consideration   Par Value     Actual Cost       Value        (Decrease)     Accretion       Recognized     (11 + 12 - 13)    B/A. C.V.      Disposal Date     Disposal     Disposal            Disposal       During Year          Date
      36200F-MD-7     GOVERNMENT NATL MTG ASSOC #599856         12/01/2006   PAYDOWN                                    89,545        89,545         91,742          89,836                           (290)                            (290)                          89,545                                                            2,432     06/01/2032
      36200J-Q8-6     GOVERNMENT NATL MTG ASSOC #602679         12/01/2006   PAYDOWN                                     1,501         1,501          1,571           1,502                             (1)                              (1)                           1,501                                                               10     12/01/2032
      36201U-V5-0     GOVERNMENT NATL MTG ASSOC #593836         12/01/2006   PAYDOWN                                    95,073        95,073         97,985          95,389                           (316)                            (316)                          95,073                                                            2,242     06/01/2032
      36202T-6D-3     GOVERNMENT NATL MTG ASSOC #609368         12/01/2006   PAYDOWN                                    20,909        20,909         21,882          20,946                            (38)                             (38)                          20,909                                                              726     02/01/2033
      36205R-WN-3     GOVERNMENT NATL MTG ASSOC #398553         12/01/2006   PAYDOWN                                     4,112         4,112          4,193           4,116                             (4)                              (4)                           4,112                                                              118     05/01/2023
      36208L-RS-8     GOVERNMENT NATL MTG ASSOC #454197         05/11/2006   VARIOUS                                    14,073        13,601         14,168          14,164                             (1)                              (1)                          14,163                         (91)                (91)             435     04/01/2026
      36208V-QL-2     GOVERNMENT NATL MTG ASSOC #462259         12/01/2006   PAYDOWN                                     2,116         2,116          2,157           2,117                             (2)                              (2)                           2,116                                                               70     05/01/2028
      36209M-T5-3     GOVERNMENT NATL MTG ASSOC #475872         05/11/2006   VARIOUS                                    58,965        57,072         55,806          55,785                             87                               87                           55,872                       3,093              3,093             1,759     07/01/2027
      36210N-N4-7     GOVERNMENT NATL MTG ASSOC #497311         03/22/2006   VARIOUS                                     8,447         8,099          8,437           8,451                            (17)                             (17)                           8,434                          14                  14              177     05/01/2021
      36213F-MH-3     GOVERNMENT NATL MTG ASSOC #553060         12/01/2006   PAYDOWN                                    47,574        47,574         48,741          47,702                           (128)                            (128)                          47,574                                                            1,290     05/01/2032
      36241K-J6-6     GOVERNMENT NATL MTG ASSOC #782085         12/01/2006   PAYDOWN                                     7,582         7,582          7,849           7,600                            (18)                             (18)                           7,582                                                              168     07/01/2028
      36290S-QB-0     GOVERNMENT NATL MTG ASSOC #616150         12/01/2006   PAYDOWN                                    80,587        80,587         82,180          80,732                           (145)                            (145)                          80,587                                                            2,115     04/01/2033
      36290V-ZR-8     GOVERNMENT NATL MTG ASSOC #619152         12/01/2006   PAYDOWN                                   123,723       123,723        126,169         123,747                            (24)                             (24)                         123,723                                                            2,556     05/01/2034
      36291C-DQ-5     GOVERNMENT NATL MTG ASSOC #623911         12/01/2006   PAYDOWN                                    46,512        46,512         47,431          46,643                           (131)                            (131)                          46,512                                                            1,391     06/01/2034
      36291G-SB-3     GOVERNMENT NATL MTG ASSOC #627914         12/01/2006   PAYDOWN                                   139,336       139,336        142,090         139,647                           (311)                            (311)                         139,336                                                            2,372     11/01/2033
      36291L-J4-8     GOVERNMENT NATL MTG ASSOC #631283         12/01/2006   PAYDOWN                                     7,353         7,353          7,499           7,365                            (11)                             (11)                           7,353                                                              236     12/01/2034
      36291R-AC-6     GOVERNMENT NATL MTG ASSOC #635503         12/01/2006   PAYDOWN                                     5,779         5,779          5,893           5,794                            (15)                             (15)                           5,779                                                              165     01/01/2034
      36291S-RN-2     GOVERNMENT NATL MTG ASSOC #636893         12/01/2006   PAYDOWN                                    98,730        98,730        100,682          98,931                           (201)                            (201)                          98,730                                                            3,791     08/01/2034
                      UNITED STATES TREASURY INFL INDEX
      912828-BD-1     NOTES                                     03/31/2006   VARIOUS                                   970,126       925,000        975,662         973,558                            (279)                            (279)                       973,279                          (3,154)           (3,154)           13,288   07/15/2013
      912828-DS-6     UNITED STATES TREASURY NOTES              12/12/2006   GOLDMAN SACHS                             397,969       400,000        399,969         399,980                              14                               14                        399,994                          (2,025)           (2,025)           16,182   04/30/2007
        0399999 -   Bonds - U.S. Governments                                                                         2,220,011     2,174,204      2,242,106       2,224,004                          (1,831)                          (1,831)                     2,222,174                          (2,163)           (2,163)           51,524      XXX
      3128JR-JE-7     FEDERAL HOME LN MTG CORP #847461          12/15/2006   VARIOUS                                   202,238       202,238        199,963         201,999                             239                              239                        202,238                                                               4,556   12/01/2034
      3128K0-QC-0     FEDERAL HOME LN MTG CORP #A40451          12/01/2006   PAYDOWN                                    39,437        39,437         38,196          39,371                              66                               66                         39,437                                                                 889   08/01/2035
      3128K1-3U-3     FEDERAL HOME LN MTG CORP #A41711          12/01/2006   PAYDOWN                                     4,988         4,988          4,831           4,981                               7                                7                          4,988                                                                 131   10/01/2035
E12




      3128K1-TJ-0     FEDERAL HOME LN MTG CORP #A41453          12/01/2006   PAYDOWN                                     4,265         4,265          4,131           4,260                               5                                5                          4,265                                                                  97   04/01/2033
      3128K2-6A-2     FEDERAL HOME LN MTG CORP #A42665          12/01/2006   PAYDOWN                                    26,083        26,083         25,261          26,041                              42                               42                         26,083                                                                 783   11/01/2035
      3128K2-BL-2     FEDERAL HOME LN MTG CORP #A41843          12/01/2006   PAYDOWN                                    18,710        18,710         18,121          18,683                              27                               27                         18,710                                                                 532   11/01/2035
      3128K2-C2-3     FEDERAL HOME LN MTG CORP #A41889          12/01/2006   PAYDOWN                                     3,477         3,477          3,367           3,472                               4                                4                          3,477                                                                  81   08/01/2035
      3128PB-LT-9     FEDERAL HOME LN MTG CORP #J00338          12/01/2006   PAYDOWN                                   378,113       378,113        367,951         377,163                             950                              950                        378,113                                                               9,895   08/01/2020
      31296S-D3-7     FEDERAL HOME LN MTG CORP #A17322          12/01/2006   PAYDOWN                                   394,934       394,934        398,976         395,249                            (316)                            (316)                       394,934                                                              11,656   04/01/2033
      31297U-SZ-4     FEDERAL HOME LN MTG CORP #A38636          12/01/2006   PAYDOWN                                    18,784        18,784         18,193          18,756                              29                               29                         18,784                                                                 450   07/01/2035
      31340Y-CS-6     FEDERAL HOME LOAN MTG CORP 10 E           12/15/2006   VARIOUS                                    15,594        15,594         17,641          16,337                            (743)                            (743)                        15,594                                                                 803   01/15/2007
      31371K-2T-7     FEDERAL NATIONAL MTG ASSOC #254686        12/01/2006   PAYDOWN                                    10,686        10,686         11,049          10,704                             (18)                             (18)                        10,686                                                                 313   09/01/2017
      31371K-4F-5     FEDERAL NATIONAL MTG ASSOC #254722        12/01/2006   PAYDOWN                                    10,424        10,424         10,778          10,439                             (15)                             (15)                        10,424                                                                 313   10/01/2017
      31371L-SD-2     FEDERAL NATIONAL MTG ASSOC #255316        12/01/2006   PAYDOWN                                    76,209        76,209         75,560          76,119                              91                               91                         76,209                                                               2,012   02/01/2019
      31371L-TP-4     FEDERAL NATIONAL MTG ASSOC #255358        12/01/2006   PAYDOWN                                    78,171        78,171         77,505          78,080                              90                               90                         78,171                                                               2,083   04/01/2019
      31371L-WN-5     FEDERAL NATIONAL MTG ASSOC #255453        12/01/2006   PAYDOWN                                    64,897        64,897         64,345          64,810                              87                               87                         64,897                                                               1,743   06/01/2019
      31376K-UH-7     FEDERAL NATIONAL MTG ASSOC #357984        12/01/2006   PAYDOWN                                    62,328        62,328         61,797          62,248                              80                               80                         62,328                                                               1,727   04/01/2020
      31377R-UR-9     FEDERAL NATIONAL MTG ASSOC #384992        12/01/2006   PAYDOWN                                     3,269         3,269          3,441           3,284                             (15)                             (15)                         3,269                                                                 107   04/01/2012
      31377S-PR-3     FEDERAL NATIONAL MTG ASSOC #385732        12/01/2006   PAYDOWN                                     7,879         7,879          8,148           7,901                             (22)                             (22)                         7,879                                                                 203   01/01/2010
      31377S-S5-8     FEDERAL NATIONAL MTG ASSOC #385840        12/01/2006   PAYDOWN                                     2,891         2,891          2,970           2,895                              (4)                              (4)                         2,891                                                                  78   01/01/2013
      31377T-FV-3     FEDERAL NATIONAL MTG ASSOC #386380        12/01/2006   PAYDOWN                                     4,324         4,324          4,137           4,310                              15                               15                          4,324                                                                 100   07/01/2013
      31377U-QZ-9     FEDERAL NATIONAL MTG ASSOC #387572        10/01/2006   PAYDOWN                                   348,794       348,794        338,766         338,873                           9,921                            9,921                        348,794                                                              13,476   10/01/2006
      31385H-4D-1     FEDERAL NATIONAL MTG ASSOC #545420        12/01/2006   PAYDOWN                                     2,714         2,714          2,942           2,745                             (31)                             (31)                         2,714                                                                  84   12/01/2011
      31385J-BQ-0     FEDERAL NATIONAL MTG ASSOC #545547        12/01/2006   PAYDOWN                                   190,395       190,395        216,976         193,372                          (2,976)                          (2,976)                       190,395                                                               8,057   02/01/2012
      31385W-WH-8     FEDERAL NATIONAL MTG ASSOC #555148        12/01/2006   PAYDOWN                                   151,155       151,155        151,532         151,185                             (30)                             (30)                       151,155                                                               4,935   01/01/2013
      31385W-YS-2     FEDERAL NATIONAL MTG ASSOC #555221        12/01/2006   PAYDOWN                                     2,161         2,161          2,443           2,164                              (3)                              (3)                         2,161                                                                  76   04/01/2011
      31385X-N3-7     FEDERAL NATIONAL MTG ASSOC #555810        12/01/2006   PAYDOWN                                     9,858         9,858         10,193           9,874                             (16)                             (16)                         9,858                                                                 287   01/01/2017
      31385X-Q9-1     FEDERAL NATIONAL MTG ASSOC #555880        12/01/2006   PAYDOWN                                    83,436        83,436         84,570          83,513                             (77)                             (77)                        83,436                                                               2,376   09/01/2032
      31389B-KN-0     FEDERAL NATIONAL MTG ASSOC #620501        12/01/2006   PAYDOWN                                     9,770         9,770         10,102           9,802                             (32)                             (32)                         9,770                                                                 294   11/01/2016
      31390V-LA-0     FEDERAL NATIONAL MTG ASSOC #657421        12/01/2006   PAYDOWN                                    15,865        15,865         16,404          15,885                             (20)                             (20)                        15,865                                                                 443   02/01/2017
      31391D-NX-7     FEDERAL NATIONAL MTG ASSOC #663806        12/01/2006   PAYDOWN                                     9,816         9,816         10,150           9,825                              (9)                              (9)                         9,816                                                                 240   06/01/2017
      31392B-NQ-5     FEDERAL NATIONAL MTG ASSOC 01 81 PE       12/01/2006   PAYDOWN                                   195,444       195,444        192,329         192,173                           3,271                            3,271                        195,444                                                               5,949   10/01/2008
      31393R-ZN-3     FEDERAL HOME LOAN MTG CORP 2627 BG        12/01/2006   PAYDOWN                                    36,278        36,278         34,804          36,049                             229                              229                         36,278                                                                 629   03/01/2014
      31393V-A6-8     FEDERAL HOME LOAN MTG CORP 2634 TA        12/01/2006   PAYDOWN                                    76,018        76,018         73,013          75,584                             434                              434                         76,018                                                               1,415   03/01/2014
      31400D-EU-2     FEDERAL NATIONAL MTG ASSOC #684247        12/01/2006   PAYDOWN                                    19,862        19,862         20,537          19,907                             (45)                             (45)                        19,862                                                                 542   06/01/2017
      31400D-ZH-8     FEDERAL NATIONAL MTG ASSOC #684844        12/01/2006   PAYDOWN                                     8,828         8,828          9,128           8,836                              (8)                              (8)                         8,828                                                                 259   10/01/2017
      31400E-GL-8     FEDERAL NATIONAL MTG ASSOC #685203        12/01/2006   PAYDOWN                                   266,448       266,448        275,503         266,696                            (248)                            (248)                       266,448                                                               8,219   09/01/2017
      31400H-KM-4     FEDERAL NATIONAL MTG ASSOC #688000        12/01/2006   PAYDOWN                                    83,736        83,736         86,582          83,886                            (151)                            (151)                        83,736                                                               2,593   10/01/2017
      31400S-BV-0     FEDERAL NATIONAL MTG ASSOC #695852        12/01/2006   PAYDOWN                                    24,699        24,699         25,270          24,699                                                                                          24,699                                                                 688   12/01/2017
      31401J-C2-2     FEDERAL NATIONAL MTG ASSOC #709389        12/01/2006   PAYDOWN                                    17,554        17,554         18,150          17,625                            (72)                             (72)                         17,554                                                                 462   12/01/2017
      31401W-JR-1     FEDERAL NATIONAL MTG ASSOC #720372        12/01/2006   PAYDOWN                                    33,642        33,642         34,420          33,685                            (44)                             (44)                         33,642                                                                 908   12/01/2017
      31402D-D9-8     FEDERAL NATIONAL MTG ASSOC #725628        12/01/2006   PAYDOWN                                     8,869         8,869          8,763           8,819                             49                               49                           8,869                                                                 190   06/01/2009
      31402D-EV-8     FEDERAL NATIONAL MTG ASSOC #725648        12/01/2006   PAYDOWN                                    31,344        31,344         31,077          31,303                             41                               41                          31,344                                                                 821   01/01/2019
      31402K-VX-9     FEDERAL NATIONAL MTG ASSOC #731530        12/01/2006   PAYDOWN                                    14,094        14,094         14,573          14,118                            (23)                             (23)                         14,094                                                                 427   01/01/2018
      31402R-TJ-8     FEDERAL NATIONAL MTG ASSOC #735953        12/01/2006   PAYDOWN                                   255,521       255,521        256,220         255,519                              3                                3                         255,521                                                               2,455   08/01/2015
                                                                                                                      ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                                                                       SCHEDULE D - PART 4
                                                                                                                      Showing all Long-Term Bonds and Stocks SOLD, REDEEMED or Otherwise DISPOSED OF During Current Year
             1                          2                    3      4                       5                 6              7             8              9              10                         Change in Book/Adjusted Carrying Value                              16             17             18                19               20               21

                                                             F                                                                                                                         11             12               13              14               15
                                                             o
                                                             r                                                                                                                                                    Current Year’s                                       Book/                                                            Bond
                                                             e                                                                                                       Prior Year     Unrealized                     Other Than                      Total Foreign     Adjusted        Foreign                                       Interest/Stock
          CUSIP                                              i                                            Number of                                                 Book/Adjusted    Valuation    Current Year     Temporary     Total Change in    Exchange       Carrying Value Exchange Gain Realized Gain        Total Gain      Dividends
           Identi-                                           g   Disposal                                 Shares of                                                   Carrying       Increase/   (Amortization)/   Impairment       B/A. C.V.       Change in            at         (Loss) on     (Loss) on          (Loss) on        Received         Maturity
          fication                Description                n     Date          Name of Purchaser          Stock      Consideration   Par Value     Actual Cost       Value        (Decrease)     Accretion       Recognized     (11 + 12 - 13)    B/A. C.V.      Disposal Date     Disposal     Disposal            Disposal      During Year          Date
        31403L-KG-5 FEDERAL NATIONAL MTG ASSOC #751895           12/01/2006   PAYDOWN                                          6,660         6,660          6,603           6,648                             11                               11                            6,660                                                             115     08/01/2018
        31403N-TY-3 FEDERAL NATIONAL MTG ASSOC #753967           12/01/2006   PAYDOWN                                         38,202        38,202         39,085          38,249                            (48)                             (48)                          38,202                                                           1,027     06/01/2018
        31404D-YR-3 FEDERAL NATIONAL MTG ASSOC #765820           12/01/2006   PAYDOWN                                        135,703       135,703        134,548         135,597                            106                              106                          135,703                                                           4,317     08/01/2018
        31404K-PE-6 FEDERAL NATIONAL MTG ASSOC #770921           12/01/2006   PAYDOWN                                         67,389        67,389         66,815          67,329                             60                               60                           67,389                                                           1,794     02/01/2019
        31406W-ZW-7 FEDERAL NATIONAL MTG ASSOC #822557           12/01/2006   PAYDOWN                                         23,230        23,230         23,032          23,210                             20                               20                           23,230                                                             570     09/01/2020
        31407F-J9-2 FEDERAL NATIONAL MTG ASSOC #829288           12/01/2006   PAYDOWN                                         33,705        33,705         33,358          33,705                                                                                           33,705                                                             154     06/01/2035
        31407J-7J-5 FEDERAL NATIONAL MTG ASSOC #832597           12/01/2006   PAYDOWN                                        655,890       655,890        663,986         657,366                          (1,476)                          (1,476)                        655,890                                                          26,629     07/01/2035
        31407V-NA-9 FEDERAL NATIONAL MTG ASSOC #841985           12/01/2006   PAYDOWN                                         54,220        54,220         53,758          54,122                              98                               98                          54,220                                                           1,551     07/01/2020
        31407X-QW-4 FEDERAL NATIONAL MTG ASSOC #843869           12/01/2006   PAYDOWN                                         60,604        60,604         60,088          60,549                              55                               55                          60,604                                                           1,912     08/01/2020
        31408A-AJ-9 FEDERAL NATIONAL MTG ASSOC #845209           12/01/2006   PAYDOWN                                         67,231        67,231         65,183          67,098                             133                              133                          67,231                                                           1,925     08/01/2035
        31408E-VQ-2 FEDERAL NATIONAL MTG ASSOC #849423           12/01/2006   PAYDOWN                                         24,463        24,463         24,254          24,438                              24                               24                          24,463                                                             805     10/01/2020
        38373M-AN-0 GOVERNMENT NATL MTG ASSOC 01 34 B            12/01/2006   PAYDOWN                                        184,859       184,859        184,859         184,859                                                                                          184,859                                                           7,559     10/01/2015
        38373M-BY-5 GOVERNMENT NATL MTG ASSOC 02 35 C            12/01/2006   PAYDOWN                                        166,474       166,474        166,180         160,440                          6,034                            6,034                          166,474                                                           5,087     01/01/2018
        575633-GT-3 MASSACHUSETTS ED LN AUTH ED LN               07/01/2006   VARIOUS                                        150,000       150,000        150,000         150,000                                                                                          150,000                                                           7,840     07/01/2006
          3199999 - Bonds - Special Revenues                                                                               4,992,631     4,992,631      5,012,557       4,976,848                          15,783                           15,783                       4,992,631                                                         155,665        XXX
        06423E-NM-3 BANK ONE NA ILLINOIS                         12/12/2006   BNP PARIBAS                                    100,039       100,000        107,754         103,069                          (2,343)                          (2,343)                        100,726                        (687)              (687)           6,585     03/26/2007
        12668B-EG-4 COUNTRYWIDE ALT LN TR 05 85CB 2A2            12/01/2006   PAYDOWN                                        233,699       233,699        233,654         233,697                               3                                3                         233,699                                                           5,891     03/01/2013
        126694-VM-7 COUNTRYWIDE HOME LOANS 05 HY10 3A1A          12/01/2006   PAYDOWN                                        171,528       171,528        171,528         171,528                                                                                          171,528                                                           5,245     06/01/2011
        126694-WE-4 COUNTRYWIDE HOME LOANS 06 HYB1 1A1           12/01/2006   PAYDOWN                                        198,722       198,722        197,542         198,626                             95                               95                          198,722                                                           4,215     03/01/2011
        12669G-HY-0 COUNTRYWIDE HOME LOANS 04 29 1A1             12/25/2006   PAYDOWN                                         46,817        46,817         46,817          46,817                                                                                           46,817                                                           1,044     09/25/2007
        12669G-NL-1 COUNTRYWIDE HOME LOANS 05 7 1A1              12/25/2006   PAYDOWN                                        110,340       110,340        110,340         110,340                                                                                          110,340                                                           2,502     09/25/2007
        139732-CS-8 CAPITAL AUTO RECV ASSET TR 02 3 A3           02/15/2006   PAYDOWN                                          7,973         7,973          8,237           7,986                            (14)                             (14)                           7,973                                                              35     02/15/2006
                      CHASE MANHATTAN AUTO OWNER TRU 02-B
        161581-CP-6 A4                                           02/15/2006   PAYDOWN                                         43,824        43,824         45,783         44,287                            (463)                            (463)                           43,824                                                             296    02/15/2006
E12.1




                      CITIBANK CREDIT CARD ISS TR 03 A2
        17305E-BH-7 A2                                           01/15/2006   PAYDOWN                                        100,000       100,000        100,891         100,013                             (13)                             (13)                       100,000                                                              1,350   01/15/2006
        17307G-6K-9 CITIGROUP MTG LN TR INC 06 AR2 1A1           12/01/2006   PAYDOWN                                        135,448       135,448        135,205         135,436                              12                               12                        135,448                                                              3,023   07/01/2011
        17307G-JX-7 CITIGROUP MTG LN TR INC 04 HYB3 1A           12/12/2006   VARIOUS                                        527,416       527,904        520,975         521,186                           2,780                            2,780                        523,966                           3,451             3,451           18,664   01/01/2009
        184502-AP-7 CLEAR CHANNEL COMMUNICATIONS                 10/25/2006   JP MORGAN SECURITIES INC.                      187,196       200,000        194,858         194,980                             491                              491                        195,471                          (8,275)           (8,275)          14,854   01/15/2013
        22541L-AA-1 CREDIT SUISSE FB USA INC                     08/01/2006   MATURITY                                       225,000       225,000        238,841         227,895                          (2,895)                          (2,895)                       225,000                                                             13,219   08/01/2006
        23383V-BW-9 DAIMLER CHRYSLER AUTO TR 02 C A4             08/08/2006   PAYDOWN                                         76,741        76,741         78,296          77,010                            (269)                            (269)                        76,741                                                              1,156   08/08/2006
        33901H-BJ-1 FLEET CREDIT CARD MASTER TR 03 A A           01/15/2006   PAYDOWN                                         60,000        60,000         59,985          60,000                                                                                          60,000                                                                120   01/15/2006
        36185M-BJ-0 GMAC MTG CORP LN TR 05 AR6 2A1               12/01/2006   PAYDOWN                                        131,610       131,610        131,363         131,520                             90                               90                         131,610                                                              3,781   06/01/2011
                      HARLEY DAVIDSON MOTORCYCLE TR 02 1
        41283A-AP-4 A2                                           11/15/2006   PAYDOWN                                         47,388        47,388         49,784         48,264                            (875)                            (875)                           47,388                                                           1,499    11/15/2006
                      HERTZ VEHICLE FINANCING LLC 04 1A
        42805R-AB-5 A2                                           12/12/2006   BANK OF AMERICA                                397,000       400,000        399,897         399,957                             33                               33                         399,990                          (2,990)           (2,990)          9,176    05/25/2007
        44943Q-AB-6 IDS FINANCIAL                                02/15/2006   MATURITY                                       100,000       100,000        105,791         100,214                           (214)                            (214)                        100,000                                                             3,313    02/15/2006
        45254N-ML-8 IMPAC CMB TR 05 1 1A1                        12/25/2006   PAYDOWN                                         39,867        39,867         39,867          39,867                                                                                          39,867                                                               919    12/25/2008
        524908-FD-7 LEHMAN BROTHERS HOLDINGS INC                 12/12/2006   HSBC SECURITIES USA INC.                       123,525       125,000        127,450         126,292                           (584)                            (584)                        125,709                          (2,184)           (2,184)          6,944    01/22/2008
                      LONG BEACH MORTGAGE LOAN TRUST 05-1
        542514-JW-5 2A1                                          04/25/2006   PAYDOWN                                         63,548        63,548         63,548          63,548                                                                                          63,548                                                               532    04/25/2006
        571748-AC-6 MARSH & MCLENNAN COS INC                     01/12/2006   BANK OF AMERICA                                105,772       100,000        108,696         104,756                            (60)                             (60)                        104,696                          1,076             1,076              653    06/15/2009
                      MERRILL LYNCH MTG INV INC 05 A9
        59020U-2H-7 2A1E                                         12/01/2006   PAYDOWN                                         91,111        91,111         90,555          91,075                             35                               35                          91,111                                                             2,644    07/01/2011
        59020U-NZ-4 MLCC MTG INVEST INC 04 G A1                  12/25/2006   PAYDOWN                                         54,781        54,781         54,781          54,781                                                                                          54,781                                                             1,411    01/25/2008
        59020U-QC-2 MERRILL LYNCH MTG INV INC 05 A1 1A           12/01/2006   PAYDOWN                                         92,912        92,912         92,027          92,764                            149                              149                          92,912                                                             1,896    01/01/2009
        59020U-TB-1 MLCC MTG INVEST INC 05 A A1                  12/25/2006   PAYDOWN                                        129,044       129,044        129,044         129,044                                                                                         129,044                                                             3,370    02/25/2008
        590219-AE-1 MLCC MTG INVEST INC 06 2 2A                  12/01/2006   PAYDOWN                                         56,279        56,279         55,861          56,264                             15                               15                          56,279                                                             1,083    08/01/2012
        61913P-AP-7 MORTGAGEIT TRUST 05 1 1A1                    12/25/2006   PAYDOWN                                         17,996        17,996         18,013          17,993                              3                                3                          17,996                                                               463    07/25/2009
        61913P-AR-3 MORTGAGEIT TRUST 05 1 2A                     12/01/2006   PAYDOWN                                         31,359        31,359         30,927          31,333                             26                               26                          31,359                                                               699    01/01/2010
                                                                              KEEFE BRUYETTE AND WOOD
        740587-GL-8     PREMIUM ASSET 2004-04                    11/17/2006   INC.                                            82,500       100,000         99,933          99,956                             12                               12                          99,967                       (17,467)          (17,467)            4,927    03/12/2009
        81744F-FJ-1     SEQUOIA MORTGAGE TRUST 04 11 A1          12/20/2006   PAYDOWN                                         25,900        25,900         25,900          25,900                                                                                          25,900                                                               570    07/20/2008
        81744F-FY-8     SEQUOIA MORTGAGE TRUST 04 12 A1          12/20/2006   PAYDOWN                                         33,286        33,286         33,286          33,286                                                                                          33,286                                                               770    02/20/2008
        81744F-GM-3     SEQUOIA MORTGAGE TRUST 05 1 A1           12/20/2006   PAYDOWN                                         68,049        68,049         68,049          68,049                                                                                          68,049                                                             1,554    03/20/2008
        902494-AM-5     TYSON FOODS INC                          09/26/2006   LEHMAN BROTHERS                                 70,052        65,000         72,805          70,397                           (591)                            (591)                         69,806                            246               246            5,333    10/01/2011
        92926E-AD-9     WFS FINANCIAL OWNER TR 02 3 A4           08/20/2006   PAYDOWN                                         61,649        61,649         63,055          62,000                           (351)                            (351)                         61,649                                                             1,135    08/20/2006
        939336-Z4-8     WASHINGTON MUTUAL 05 AR3 A2              12/01/2006   VARIOUS                                        136,799       136,799        134,234         136,659                            140                              140                         136,799                                                             2,377    10/01/2010
                        WELLS FARGO MTG BKD SECS TR 05 AR4
        94981N-AH-8     2A2                                      12/01/2006   PAYDOWN                                        132,350       132,350        129,341         132,116                            235                              235                         132,350                                                             2,673    08/01/2010
                        WELLS FARGO MTG BKD SECS TR 06 AR8
        94983V-AF-2     2A1                                      12/01/2006   VARIOUS                                        144,502       144,502        143,158         144,438                              64                               64                        144,502                                                            2,544     01/01/2011
        96683M-AD-5     WHOLE AUTO LOAN TRUST 02 1 A4            12/15/2006   PAYDOWN                                         12,651        12,651         12,892          12,685                             (34)                             (34)                        12,651                                                              173     01/15/2007
        98152D-AY-7     WORLD OMNI AUTO RECV TR 03 A A4          11/15/2006   PAYDOWN                                         70,000        70,000         69,995          69,999                               1                                1                         70,000                                                            1,307     12/15/2006
        00873N-AA-1     AIFUL CORPORATION                    F   02/02/2006   GOLDMAN SACHS                                  168,735       175,000        169,862         170,065                             111                              111                        170,176                        (1,441)           (1,441)           5,115     02/16/2010
          4599999 -   Bonds - Industrial and Miscellaneous                                                                 4,713,407     4,744,076      4,770,821       4,746,089                          (4,410)                          (4,410)                     4,741,679                       (28,272)          (28,272)         145,059        XXX
                                                                                                         ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                                                          SCHEDULE D - PART 4
                                                                                                         Showing all Long-Term Bonds and Stocks SOLD, REDEEMED or Otherwise DISPOSED OF During Current Year
           1                          2                   3      4              5                6              7             8             9             10                         Change in Book/Adjusted Carrying Value                               16             17             18              19                20            21

                                                          F                                                                                                             11             12              13               14                15
                                                          o
                                                          r                                                                                                                                       Current Year’s                                         Book/                                                           Bond
                                                          e                                                                                           Prior Year     Unrealized                    Other Than                        Total Foreign     Adjusted        Foreign                                      Interest/Stock
        CUSIP                                             i                                  Number of                                               Book/Adjusted    Valuation    Current Year    Temporary     Total Change in      Exchange       Carrying Value Exchange Gain Realized Gain      Total Gain       Dividends
         Identi-                                          g   Disposal                       Shares of                                                 Carrying       Increase/   (Amortization)/  Impairment       B/A. C.V.         Change in            at         (Loss) on     (Loss) on        (Loss) on         Received       Maturity
        fication                  Description             n     Date     Name of Purchaser     Stock      Consideration   Par Value     Actual Cost     Value        (Decrease)     Accretion      Recognized     (11 + 12 - 13)      B/A. C.V.      Disposal Date     Disposal     Disposal          Disposal       During Year       Date
        6099997 -   Bonds - Part 4                                                                           11,926,049    11,910,910     12,025,484    11,946,941                          9,543                           9,543                         11,956,484                     (30,435)          (30,435)         352,248     XXX
        6099998 -   Bonds - Part 5                                                                              235,488       250,000        249,100       249,100                             57                              57                            249,157                     (13,670)          (13,670)          10,787     XXX
        6099999 -   Total - Bonds                                                                            12,161,537    12,160,910     12,274,584    12,196,041                          9,600                           9,600                         12,205,641                     (44,104)          (44,104)         363,035     XXX
        6599998 -   Preferred Stocks - Part 5                                                                                XXX                                                                                                                                                                                                        XXX
        6599999 -   Total - Preferred Stocks                                                                                 XXX                                                                                                                                                                                                        XXX
        7299998 -   Common Stocks - Part 5                                                                                   XXX                                                                                                                                                                                                        XXX
        7299999 -   Total - Common Stocks                                                                                    XXX                                                                                                                                                                                                        XXX
        7399999 -   Total - Preferred and Common Stocks                                                                      XXX                                                                                                                                                                                                        XXX
E12.2




        7499999 Totals                                                                                       12,161,537      XXX          12,274,584    12,196,041                          9,600                            9,600                       12,205,641                       (44,104)         (44,104)         363,035     XXX
                                                                                                              ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                                                                                                             SCHEDULE D - PART 5
                                                                                                                      Showing all Long-Term Bonds and Stocks ACQUIRED During Year and Fully DISPOSED OF During Current Year
           1                        2                     3       4                   5             6                 7                 8          9           10          11                        Change in Book/Adjusted Carrying Value                                         17               18               19               20               21
                                                                                                                                                                                         12           13             14               15                            16
                                                          F
                                                          o
                                                          r                                                                        Par Value                                       Book/                                    Current Year’s                                                                                                            Paid for
                                                          e                                                                        (Bonds) or                                    Adjusted      Unrealized                    Other Than      Total Change      Total Foreign      Foreign                                          Interest and       Accrued
                                                          i                                                                        Number of                                      Carrying      Valuation   Current Year’s   Temporary             In           Exchange         Exchange       Realized Gain        Total          Dividends         Interest
         CUSIP                                            g     Date                             Disposal                            Shares                                       Value at      Increase/   (Amortization)/  Impairment        B./A. C.V.       Change in      Gain (Loss) on     (Loss) on       Gain (Loss)       Received            and
      Identification           Description                n   Acquired          Name of Vendor     Date        Name of Purchaser    (Stocks)    Actual Cost   Consideration    Disposal Date   (Decrease)     Accretion      Recognized      (12 + 13 - 14)     B./A. C.V.       Disposal         Disposal        on Disposal      During Year       Dividends
       349631-AL-5 FORTUNE BRANDS INC                         01/05/2006   BARCLAYS CAPITAL      10/27/2006 MERRILL LYNCH              250,000      249,100          235,488         249,157                             57                               57                                           (13,670)         (13,670)           10,787
         4599999 - Bonds - Industrial and Miscellaneous                                                                                 250,000     249,100          235,488         249,157                             57                               57                                           (13,670)         (13,670)           10,787
         6099998 - Subtotal Bonds                                                                                                       250,000     249,100          235,488         249,157                             57                               57                                           (13,670)         (13,670)           10,787
         7399999 - Subtotal-Stocks
E13




        7499999 Totals                                                                                                                              249,100          235,488         249,157                            57                               57                                            (13,670)         (13,670)            10,787
                                ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                              SCHEDULE D - PART 6 - SECTION 1
                                                     Valuation of Shares of Subsidiary, Controlled or Affiliated Companies
        1                           2                       3         4            5             6                7                8         Stock of Such Company Owned
                                                                                                                                              by Insurer on Statement Date
                                                                                           Do Insurer’s                                               9             10
                                                                                             Admitted
                                                                                              Assets
                                                                                   NAIC       Include
                                                                     NAIC        Valuation  Intangible
                                                                   Company        Method      Assets
                                                                    Code or     (See SVO Connected
                                                                     Alien       Purposes with Holding
                                Description                         Insurer        and       of Such      Total Amount of
   CUSIP             Name of Subsidiary, Controlled or           Identification Procedures Company’s      Such Intangible    Book / Adjusted                    % of
Identification             Affiliated Company            Foreign    Number       Manual)      Stock?          Assets         Carrying Value Number of Shares Outstanding




                                                                  NONE

  1999999 Totals                                                                                                                                      XXX          XXX
1. Amount of insurer's capital and surplus from the prior period’s statutory statement reduced by any admitted EDP, goodwill and net deferred tax
     assets included therein:                                                                                                                             $
2. Total amount of intangible assets nonadmitted                                                                                                          $




                                              SCHEDULE D - PART 6 - SECTION 2
             1                                 2                                          3                              4                  Stock in Lower-Tier Company
                                                                                                                  Total Amount of           Owned Indirectly by Insurer on
                                                                                                                 Intangible Assets                 Statement Date
                                                                                                                Included in Amount                 5                  6
          CUSIP                                                       Name of Company Listed in Section 1 Which Shown in Column 7,                                  % of
       Identification            Name of Lower-Tier Company                 Controls Lower-Tier Company              Section 1             Number of Shares Outstanding




                                                                  NONE

     0399999 Total                                                                                                                                  XXX            XXX




                                                                                     E14
                                                                                         ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                                                                                                                      SCHEDULE DA - PART 1
                                                                                                          Showing all SHORT-TERM INVESTMENTS Owned December 31 of Current Year
                    1                          Codes           4             5             6          7                Change In Book/Adjusted Carrying Value            12           13                                              Interest                                      20
                                           2           3                                                          8             9             10              11                                    14             15           16               17       18           19

                                                                                                                                              Current                                           Amount Due
                                                                                                                              Current         Year’s        Total                               And Accrued
                                                                                                    Book/     Unrealized      Year’s        Other Than     Foreign                               Dec. 31 of
                                                                                                   Adjusted    Valuation   (Amortization)   Temporary     Exchange                              Current Year   Non-Admitted                                                       Paid for
                                                              Date                      Maturity   Carrying    Increase/         /          Impairment    Change in                             On Bond Not      Due and                    Effective              Gross Amount   Accrued
                Description                Code   Foreign   Acquired   Name of Vendor    Date       Value     (Decrease)     Accretion      Recognized    B./A.C.V.   Par Value   Actual Cost    In Default      Accrued      Rate of       Rate of     How Paid     Received     Interest
      5499999 - Total - Issuer Obligations                                                                                                                                                                                     XXX             XXX        XXX
E15




      8299999 Totals                                                                                                                                                     XXX                                                    XXX              XXX      XXX
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




              Schedule DB - Part A - Section 1

                        NONE
              Schedule DB - Part A - Section 2

                        NONE
              Schedule DB - Part A - Section 3

                        NONE
              Schedule DB - Part B - Section 1

                        NONE
              Schedule DB - Part B - Section 2

                        NONE
              Schedule DB - Part B - Section 3

                        NONE
              Schedule DB - Part C - Section 1

                        NONE
              Schedule DB - Part C - Section 2

                        NONE
              Schedule DB - Part C - Section 3

                        NONE
              Schedule DB - Part D - Section 1

                        NONE
              Schedule DB - Part D - Section 2

                        NONE




                  E16, E17, E18, E19, E20, E21
ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company




              Schedule DB - Part D - Section 3

                        NONE
              Schedule DB - Part E - Section 1

                        NONE




                           E21, E22
                            ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company


                                                    SCHEDULE E - PART 1 - CASH
                                            1                                                2        3               4                  5               6          7

                                                                                                              Amount of Interest Amount of Interest
                                                                                                                 Received            Accrued
                                                                                                   Rate of        During          December 31 of
                                       Depository                                           Code   Interest        Year            Current Year       Balance       *
BBH Money Market Fund                                                                                                    51,027                          1,156,795 XXX
                                                                                                                                                                   XXX
Brown Brothers Harriman                                                                                                                                        277 XXX
  0199998 Deposits in                               depositories which do not exceed the
           allowable limit in any one depository (See Instructions) - open depositories     XXX      XXX                                                           XXX
 0199999 Totals - Open Depositories                                                         XXX      XXX                  51,027                         1,157,072 XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
                                                                                                                                                                   XXX
0399999 Total Cash on Deposit                                                               XXX      XXX                 51,027                          1,157,072 XXX
0499999 Cash in Company’s Office                                                            XXX      XXX               XXX                XXX                      XXX
0599999 Total Cash                                                                          XXX      XXX                 51,027                          1,157,072 XXX


                               TOTALS OF DEPOSITORY BALANCES ON THE LAST DAY OF EACH MONTH DURING THE CURRENT YEAR
1. January                           (229) 4. April                   236 7. July                 542,182 10. October                                          835,802
2. February                        21,685 5. May                    1,231 8. August             1,367,647 11. November                                       1,375,645
3. March                        2,937,905 6. June                 330,818 9. September          1,254,208 12. December                                       1,157,072




                                                                                      E23
                                                      ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                       SCHEDULE E - PART 2 CASH EQUIVALENTS
                                                                        Showing Investments owned December 31 of current year
            1                               2            3          4                      5                             6               7                  8                      9




         CUSIP                                                                                                                     Book/Adjusted    Amount of Interest
      Identification                    Description     Code   Date Acquired         Rate of Interest              Maturity Date   Carrying Value    Due & Accrued       Gross Investment Income
E24




       0199999 Total Cash Equivalents
                              ANNUAL STATEMENT FOR THE YEAR 2006 OF THE NIC Insurance Company

                                                     SCHEDULE E PART 3 - SPECIAL DEPOSITS
                                                                                             Deposits with the State of Domicile For
                                                1                          2                     The Benefit of All Policyholders               All Other Special Deposits
                                                                                                    3                        4                  5                       6
                                             Type of                  Purpose of             Book/Adjusted                  Fair         Book/Adjusted                Fair
               States, Etc.                  Deposits                  Deposits              Carrying Value                Value         Carrying Value              Value
    1. Alabama                     AL
    2. Alaska                      AK
    3. Arizona                     AZ
    4. Arkansas                    AR
    5. California                  CA
    6. Colorado                    CO
    7. Connecticut                 CT
    8. Delaware                    DE
    9. District of Columbia        DC
   10. Florida                     FL
   11. Georgia                     GA
   12. Hawaii                      HI
   13. Idaho                       ID
   14. Illinois                    IL
   15. Indiana                     IN
   16. Iowa                        IA
   17. Kansas                      KS
   18. Kentucky                    KY
                                                        In trust for the security of the
                                                        policyholders in the State of
   19. Louisiana                   LA           B       Louisiana                                                                                 100,007                100,136
   20. Maine                       ME
   21. Maryland                    MD
                                                        In trust for the security of the
                                                        policyholders in the State of
   22. Massachusetts               MA           B       Massachusetts                                                                             811,131                810,232
   23. Michigan                    MI
   24. Minnesota                   MN
   25. Mississippi                 MS
   26. Missouri                    MO
   27. Montana                     MT
   28. Nebraska                    NE
   29. Nevada                      NV
                                                        In trust for the security of the
                                                        policyholders in the State of New
   30. New Hampshire               NH                   Hampshire                                                                                 533,551                540,155
   31. New Jersey                  NJ
   32. New Mexico                  NM           B
                                                        In trust for the security of all
   33. New York                    NY           B       policyholders                               2,623,178                2,627,078
   34. North Carolina              NC
   35. North Dakota                ND
   36. Ohio                        OH
   37. Oklahoma                    OK
   38. Oregon                      OR
   39. Pennsylvania                PA
   40. Rhode Island                RI
   41. South Carolina              SC
   42. South Dakota                SD
   43. Tennessee                   TN
   44. Texas                       TX
   45. Utah                        UT
   46. Vermont                     VT
   47. Virginia                    VA
   48. Washington                  WA
   49. West Virginia               WV
   50. Wisconsin                   WI
   51. Wyoming                     WY
   52. American Samoa              AS
   53. Guam                        GU
   54. Puerto Rico                 PR
   55. US Virgin Islands           VI
   56. Northern Mariana Islands    MP
   57. Canada                      CN
   58. Aggregate Other Alien       OT          XXX                        XXX
   59. Total                                   XXX                        XXX                       2,623,178                2,627,078          1,444,689              1,450,523
        DETAILS OF WRITE-INS
5801.
5802.
5803.
5898.   Summary of remaining write-ins for
        Line 58 from overflow page             XXX                        XXX
5899.   Totals (Lines 5801 through 5803 +
        5898)(Line 58 above)                   XXX                        XXX




                                                                                       E25

				
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