Form 1120-PC U.S. Property and Casualty Insurance Company OMB No.

1545-1027

Income Tax Return

Department of the Treasury
Internal Revenue Service
For calendar year 2002 or tax year beginning


, 2002, and ending
Instructions are separate. See page 19 for Paperwork Reduction Act Notice.
, 20 2002
Name B Employer identification number

Please type or print

A Check applicable box if
an election has been
made under section(s): Number and street, and room or suite no. (If a P.O. box, see page 6 of Instructions) C Date incorporated

(1) 953(c)(3)(C)
City or town, state, and ZIP code D Check if a consolidated return
(2) 953(d) (Attach Form 851)
E Check if: (1) Final return (2) Name change (3) Address change (4) Amended return
1 Taxable income (Schedule A, line 37) 1
2 Taxable investment income for electing small companies (Schedule B, line 21) 2
3 Check if a member of a controlled group (see sections 1561 and 1563)

Important: Members of a controlled group, see instructions on page 7.
a If the box on line 3 is checked, enter the corporation’s share of the $50,000, $25,000, and $9,925,000 taxable income
brackets (in that order): (1) $ (2) $ (3) $
b Enter the corporation’s share of: (1) additional 5% tax (not to exceed $11,750) $
(2) additional 3% tax (not to exceed $100,000) $
4 Income tax 4
5 Enter amount of tax that a reciprocal must include 5
6 Alternative minimum tax (attach Form 4626) 6
7 Total. Add lines 4 through 6 7
8a Foreign tax credit (attach Form 1118) 8a
b Other credits (see page 8 of instructions) 8b
c General business credit. Check box(es) and indicate which forms are
Tax Computation and Payments

attached:
Form 3800 Form(s) (specify)
8c
d Credit for prior year minimum tax (attach Form 8827) 8d
e Qualified zone academy bond credit (attach Form 8860) 8e
f Total credits. Add lines 8a through 8e 8f
9 Subtract line 8f from line 7 9
10 Foreign corporations—Tax on income not connected with U.S. business 10
11 Personal holding company tax (attach Schedule PH (Form 1120)) 11
12 Other taxes. Check if from: Form 4255 Form 8611 Other (attach schedule) 12
13 Total tax. Add lines 9 through 12 13
14 Payments: a 2001 overpayment credited to 2002 14a
b Prior year(s) special estimated tax payments to be applied 14b
c 2002 estimated tax payments (see instructions) 14c
d 2002 special estimated tax payments (Do not include on line 14f) 14d
e Less 2002 refund applied for on Form 4466 14e ( )
f Enter the total of lines 14a through 14c less line 14e 14f
g Tax deposited with Form 7004 14g
h Credit by reciprocal for tax paid by attorney-in-fact under section 835(d) 14h
i Other credits and payments 14i 14j
15 Estimated tax penalty (see page 9 of instructions). Check if Form 2220 is attached
15
16 Tax due. If line 14j is smaller than the total of lines 13 and 15, enter amount owed 16
17 Overpayment. If line 14j is larger than the total of lines 13 and 15, enter amount overpaid 17
18 Enter amount of line 17 you want: Credited to 2003 estimated tax
$ Refunded
18
Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true,
correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Sign May the IRS discuss this return
Here

Signature of officer Date Title
with the preparer shown below
(see instructions)? Yes No

Date Preparer’s SSN or PTIN
Paid Preparer’s Check if
signature self-employed
Preparer’s


Firm’s name (or EIN
Use Only yours if self-employed),
Phone no. ( )
address, and ZIP code

Cat. No. 64270Q Form 1120-PC (2002)

Form 1120-PC (2002) Page 2
Schedule A Taxable Income—Section 832 (See page 9 of instructions.)
1 Premiums earned (Schedule E, line 7) 1
2 Dividends (Schedule C, line 14) 2
(b) Amortization of
(a) Interest received premium

3a Gross interest

b Interest exempt under section 103

Income

c Subtract line 3b from line 3a

d Taxable interest. Subtract line 3c, column (b) from line 3c, column (a) 3d
4 Gross rents 4
5 Gross royalties 5
6 Capital gain net income (attach Schedule D (Form 1120)) 6
7 Net gain or (loss) (Form 4797, Part II, line 18 (attach Form 4797)) 7
8 Certain mutual fire or flood insurance company premiums (section 832(b)(1)(D)) 8
9 Income on account of special income and deduction accounts 9
10 Income from protection against loss account (see instructions) 10
11 Mutual interinsurers or reciprocal underwriters—decrease in subscriber accounts 11
12 Income from a special loss discount account (attach Form 8816) 12
13 Other income (attach schedule) 13
14 Gross income. Add lines 1 through 13 14
15 Compensation of officers (attach schedule) (see page 10 of instructions) 15
16 Salaries and wages (less employment credits) 16
17 Agency balances and bills receivable that became worthless during the tax year 17
Deductions (See instructions for limitations on deductions.)

18 Rents 18
19 Taxes and licenses 19
20a Interest
b Less tax-exempt interest exp.
c Bal.
20c
21 Charitable contributions (see page 11 of instructions for 10% limitation) 21
22 Depreciation (attach Form 4562) 22
23 Depletion 23
24 Pension, profit-sharing, etc., plans 24
25 Employee benefit programs 25
26 Losses incurred (Schedule F, line 14) 26
27 Additional deduction (attach Form 8816) 27
28 Other capital losses (Schedule G, line 12, column (g)) 28
29 Dividends to policyholders 29
30 Mutual interinsurers or reciprocal underwriters—increase in subscriber accounts 30
31 Other deductions (see page 13 of instructions) (attach schedule) 31
32 Total deductions. Add lines 15 through 31 32
33 Subtotal. Subtract line 32 from line 14 33

34a Special deduction for section 833 organizations (Schedule H,

line 6) 34a
b Deduction on account of special income and deduction accounts 34b
c Total. Add lines 34a and 34b 34c
35 Subtotal. Subtract line 34c from line 33 35
36a Dividends-received deduction (Schedule C, line 25) 36a
b Net operating loss deduction 36b
c Total. Add lines 36a and 36b 36c

37 Taxable income (subtract line 36c from line 35). Enter here and on page 1, line 1 37
Form 1120-PC (2002)
Form 1120-PC (2002) 3 Page
Schedule B Part I—Taxable Investment Income of Electing Small Companies—Section 834 (See page 14 of
instructions.)
(b) Amortization of
(a) Interest received premium

1a Gross interest

b Interest exempt under section 103

Income

c Subtract line 1b from line 1a

d Taxable interest. Subtract line 1c, column (b) from line 1c, column (a) 1d
2 Dividends (Schedule C, line 14) 2
3 Gross rents 3
4 Gross royalties 4
5 Gross income from a trade or business, other than an insurance business, and from Form 4797 5
6 Income from leases described in sections 834(b)(1)(B) and 834(b)(1)(C) 6
7 Gain from Schedule D (Form 1120), line 14 7
8 Gross investment income. Add lines 1d through 7 8
9 Real estate taxes 9
10 Other real estate expenses 10
11 Depreciation (attach Form 4562) 11
12 Depletion 12
13 Trade or business deductions as provided in section 834(c)(8) (attach schedule) 13
Deductions

14 Interest 14
15 Other capital losses (Schedule G, line 12, column (g)) 15
16 Total. Add lines 9 through 15 16
17 Investment expenses (attach schedule) 17
18 Total deductions. Add lines 16 and 17 18
19 Subtract line 18 from line 8 19
20 Dividends-received deduction (Schedule C, line 25) 20

21 Taxable investment income. Subtract line 20 from line 19. Enter here and on page 1, line 2 21
Part II—Invested Assets Book Values
(Complete only if claiming a deduction for general expenses allocated to investment income.)
(a) Beginning of tax year (b) End of tax year

22 Real estate 22
23 Mortgage loans 23
24 Collateral loans 24
25 Policy loans, including premium notes 25
26 Bonds of domestic corporations 26
27 Stock of domestic corporations 27
28 Government obligations, etc. 28
29 Bank deposits bearing interest 29
30 Other interest-bearing assets (attach schedule) 30
31 Total. Add lines 22 through 30 31
32 Add columns (a) and (b), line 31 32
33 Mean of invested assets for the tax year. Enter one-half of line 32 33
34 Multiply line 33 by .0025 34
35 Income base. Line 1b, column (a) plus line 8 less the sum of line 1b, column
(b) and line 16 35
36 Multiply line 33 by .0375 36
37 Subtract line 36 from line 35. Do not enter less than zero 37
38 Multiply line 37 by .25 38

39 Limitation on deduction for investment expenses. Add lines 34 and 38 39

Form 1120-PC (2002)
Form 1120-PC (2002) Page 4
Schedule C Dividends and Special Deductions Dividends-Received
(See page 15 of instructions.) (a) Subject to section (b) Total dividends-
832(b)(5)(B) received
Income
1 Dividends from less-than-20%-owned domestic corporations (other than
debt-financed stock) 1

2 Dividends from 20%-or-more-owned domestic corporations (other than

debt-financed stock) 2

3 Dividends on debt-financed stock of domestic and foreign corporations 3

4 Dividends on certain preferred stock of less-than-20%-owned public utilities 4

5 Dividends on certain preferred stock of 20%-or-more-owned public utilities 5

6 Dividends on stock of certain less-than-20%-owned foreign corporations and certain

FSCs 6

7 Dividends on stock of certain 20%-or-more-owned foreign corporations and certain

FSCs 7

8 Dividends on stock of wholly owned foreign subsidiaries and FSCs 8

9 Dividends from affiliated companies 9

10 Other dividends from foreign corporations not included on lines 6, 7, and 8 10

11 Income from controlled foreign corporations under subpart F (attach Forms 5471) 11

12 Foreign dividend gross-up (section 78) 12

13 Other dividends (attach schedule) 13

14 Total dividends. Add lines 1 through 13. Enter here and on Schedule A, line 2, or
Schedule B, line 2, whichever applies 14

Dividends-Received Deduction

(a) Subject to section (b) Total dividends-

Deduction 832(b)(5)(B) received deduction

15 Multiply line 1 by 70% 15

16 Multiply line 2 by 80% 16
17 Deduction for line 3 (see page 16 of instructions) 17
18 Multiply line 4 by 42% 18
19 Multiply line 5 by 48% 19
20 Multiply line 6 by 70% 20
21 Multiply line 7 by 80% 21
22 Enter the amount from line 8 22
23 Total. Add lines 15 through 22. (See page 16 of instructions for limitation.) 23

24 Total. Add line 23, column (a), and line 9, column (a). Enter here and on Schedule
F, line 10 24
25 Total deductions. Add line 23, column (b), and line 9, column (b). Enter here and on Schedule A, line 36a,
or Schedule B, line 20, whichever applies 25
Form 1120-PC (2002)
Form 1120-PC (2002) Page 5
Schedule E Premiums Earned—Section 832 (See page 16 of instructions.)

1 Net premiums written 1

2 Unearned premiums on outstanding business at the end of the preceding tax year:
a Enter 100% of life insurance reserves included in unearned premiums (section
832(b)(7)(A)) and all unearned premiums of section 833 organizations 2a
b Enter 90% of unearned premiums attributable to insuring certain securities 2b
c Discounted unearned premiums attributable to title insurance 2c
d Enter 80% of all other unearned premiums 2d
e Total. Add lines 2a through 2d 2e
3 Total. Add lines 1 and 2e 3
4 Unearned premiums on outstanding business at the end of the current tax year:
a Enter 100% of life insurance reserves included in unearned premiums (section
832(b)(7)(A)) and all unearned premiums of section 833 organizations 4a
b Enter 90% of unearned premiums attributable to insuring certain securities 4b
c Discounted unearned premiums attributable to title insurance 4c
d Enter 80% of all other unearned premiums 4d
e Total. Add lines 4a through 4d 4e
5 Subtract line 4e from line 3 5
6 Transitional adjustments under section 832(b)(7)(D). (See page 16 of instructions.) 6

7 Premiums earned. Add lines 5 and 6. Enter here and on Schedule A, line 1 7

Schedule F Losses Incurred—Section 832 (See page 17 of instructions.)

1 Losses paid during the tax year (attach schedule) 1

2 Balance outstanding at the end of the current tax year for:
a Unpaid losses on life insurance contracts 2a
b Discounted unpaid losses 2b
c Total. Add lines 2a and 2b 2c
3 Add lines 1 and 2c 3
4 Balance outstanding at the end of the preceding tax year for:
a Unpaid losses on life insurance contracts 4a
b Discounted unpaid losses 4b
c Total. Add lines 4a and 4b 4c
5 Subtract line 4c from line 3 5
6 Estimated salvage and reinsurance recoverable at the end of the preceding tax year 6
7 Estimated salvage and reinsurance recoverable at the end of the current tax year 7
8 Losses incurred (line 5 plus line 6 less line 7) 8
9 Tax-exempt interest subject to section 832(b)(5)(B) 9

10 Dividends-received deduction subject to section 832(b)(5)(B) (Schedule C,

line 24) 10

11 The increase in policy cash value of section 264(f) policies as defined in section
805(a)(4)(F) 11
12 Total. Add lines 9, 10, and 11 12
13 Reduction of deduction under section 832(b)(5)(B). Multiply line 12 by .15 13
14 Losses incurred deductible under section 832(c)(4). Subtract line 13 from line 8. Enter here and on
Schedule A, line 26 14
Form 1120-PC (2002)
Form 1120-PC (2002) Page 6
Schedule G Other Capital Losses (See page 17 of instructions.)
(Capital assets sold or exchanged to meet abnormal insurance losses and to pay dividends and similar
distributions to policyholders.)
1 Dividends and similar distributions paid to policyholders 1
2 Losses paid 2
3 Expenses paid 3
4 Total. Add lines 1, 2, and 3 4
Note. Adjust lines 5 through 8 to cash method if necessary.
5 Interest received 5
6 Dividends-received (Schedule C, line 14) 6

7 Gross rents, gross royalties, lease income, etc., and gross income from a trade
or business other than an insurance business including income from Form
4797 (include gains for invested assets only) 7
8 Net premiums received 8
9 Total. Add lines 5 through 8 9

10 Limitation on gross receipts from sales of capital assets. Line 4 less line 9. If zero or less, enter -0- 10
(a) Description of capital (b) Date (c) Gross (d) Cost or (e) Expense (g) Loss
(f) Depreciation allowed
sales price other basis ((d) plus (e) less
asset acquired of sale (or allowable) the sum of (c) and (f))
11

12 Totals—column (c) must not be more

than line 10. (Enter amount from
column (g) in Schedule A, line 28, or
Schedule B, line 15, whichever
applies)
Schedule H Special Deduction And Ending Adjusted Surplus for Section 833 Organizations
(See page 17 of instructions.)
1 Health care claims incurred during the tax year and liabilities incurred during the tax year under cost-plus
contracts 1
2 Expenses incurred during the tax year in connection with the administration, adjustment, or settlement of
health care claims or in connection with the administration of cost-plus contracts 2
3 Total. Add lines 1 and 2 3
4 Multiply line 3 by .25 4
5 Beginning adjusted surplus 5

6 Special deduction. Subtract line 5 from line 4. If zero or less, enter -0-. Enter here and on Schedule A, line
34a. (See page 18 of instructions for limitation.) 6
7 Net operating loss deduction (Schedule A, line 36b) 7
8 Net exempt income:
a Adjusted tax-exempt income 8a
b Adjusted dividends-received deduction 8b
9 Taxable income (Schedule A, line 37) 9

10 Ending adjusted surplus. Add lines 5 through 9 10

Form 1120-PC (2002)
Form 1120-PC (2002) Page 7
Schedule I Other Information (See page 18 of instructions.)
Yes No Yes No
1 Check method of accounting: (c) The corporation may have to file Form 5472,
a Cash Information Return of a 25% Foreign-Owned U.S.
Corporation or a Foreign Corporation Engaged in
b Accrual
a U.S. Trade or Business. Enter number of Forms
c Other (specify)
5472 attached

2 Check box for kind of company:
a Mutual
7 Has the corporation elected to use its own payout
b Stock pattern for discounting unpaid losses and unpaid
loss adjustment expenses?
3 At the end of the tax year, did the corporation own,
directly or indirectly, 50% or more of the voting 8a Enter the total unpaid losses shown on the
stock of a domestic corporation? (For rules of corporation’s annual statement:
attribution, see section 267(c).) (1) for the current tax year: $
If “Yes,” attach a schedule showing: (2) for the previous tax year: $
(a) name and employer identification number (EIN);
b Enter the total unpaid loss adjustment expenses
(b) percentage owned; and (c) taxable income or
shown on the corporation’s annual statement:
(loss) before NOL and special deductions of such
corporation for the tax year ending with or within (1) for the current tax year: $
your tax year. (2) for the previous tax year: $
4 Is the corporation a subsidiary in an affiliated group 9 Does the corporation discount any of the loss
or a parent-subsidiary controlled group? reserves shown on its annual statement?
If “Yes,” enter name and EIN of the parent 10 Enter the amount of tax-exempt interest received or
corporation
accrued during the tax year
$

11 If the corporation has an NOL for the tax year

and is electing to forgo the carryback period,
5 At the end of the tax year, did any individual, check here

partnership, corporation, estate, or trust own, directly
or indirectly, 50% or more of the corporation’s voting
stock? (For rules of attribution, see section 267(c).) If the corporation is filing a consolidated return,
If “Yes,” attach a schedule showing name and the statement required by Regulations section
identifying number. (Do not include any information 1.1502-21(b)(3)(i) or (ii) must be attached or the
already entered in 4 above.) election will not be valid.

Enter percentage owned

12 Enter the available NOL carryover from prior tax
6 At any time during the tax year, did one foreign
years. (Do not reduce it by any deduction on
person own, directly or indirectly, at least 25% of:
line 36b, Schedule A.)
$
(a) the total voting power of all classes of stock of
the corporation entitled to vote, or (b) the total value
of all classes of stock of the corporation? If “Yes,”
enter:

(a) Percentage owned
and (b) Owner’s

country

Note: If the corporation, at any time during the tax year, had assets or operated a business in a foreign country or U.S. possession, it may be
required to attach Schedule N (Form 1120), Foreign Operations of U.S. Corporations, to this return. See Schedule N for details.
Form 1120-PC (2002)
Form 1120-PC (2002) Page 8
Schedule L Balance Sheets per Books (All filers are required to complete this schedule.)
Beginning of tax year End of tax year
Assets (a) (b) (c) (d)

1 Cash
2a Trade notes and accounts receivable
b Less allowance for bad debts ( ) ( )
3 Inventories
4 U.S. government obligations
5 Tax-exempt securities (see page 18 of instructions)
6 Other current assets (attach schedule)
7 Loans to shareholders
8 Mortgage and real estate loans
9 Other investments (attach schedule)
10a Buildings and other depreciable assets
b Less accumulated depreciation ( ) ( )
11a Depletable assets
b Less accumulated depletion ( ) ( )
12 Land (net of any amortization)
13a Intangible assets (amortizable only)
b Less accumulated amortization ( ) ( )
14 Other assets (attach schedule)
15 Total assets
Liabilities and Shareholders’ Equity
16 Accounts payable
17 Mortgages, notes, bonds payable in less than 1 year
18 Insurance liabilities (See page 18 of instructions)
19 Other current liabilities (attach schedule)
20 Loans from shareholders
21 Mortgages, notes, bonds payable in 1 year or more
22 Other liabilities (attach schedule)
23 Capital stock: a Preferred stock
b Common stock
24 Additional paid-in capital
25 Retained earnings—Appropriated (attach schedule)
26 Retained earnings—Unappropriated
27 Adjustments to shareholders’ equity (attach schedule)
28 Less cost of treasury stock ( ) ( )
29 Total liabilities and shareholders’ equity
Schedule M-1 Reconciliation of Income (Loss) per Books with Income per Return (See page 19 of instructions.)
(The corporation is not required to complete Schedules M-1 and M-2 below if the total assets on line 15, column (d), of Schedule L are less than $25,000.)
1 Net income (loss) per books 7 Income recorded on books this year
2 Federal income tax per books not included in this return (itemize)
3 Excess of capital losses over capital gains a Tax-exempt interest $
4 Income subject to tax not recorded on books
this year (itemize) 8 Deductions in this tax return not charged
5 Expenses recorded on books this year not against book income this year (itemize)
deducted in this return (itemize) a Depreciation $
a Depreciation $ b Charitable contributions $
b Charitable contributions $
c Travel and entertainment $ 9 Add lines 7 and 8
10 Income (Schedule A, line 35)—
6 Add lines 1 through 5 subtract line 9 from line 6
Schedule M-2 Analysis of Unappropriated Retained Earnings per Books (line 26, Schedule L)
1 Balance at beginning of year 5 Distributions: a Cash
2 Net income (loss) per books b Stock
3 Other increases (itemize) c Property
6 Other decreases (itemize)
7 Add lines 5 and 6
8 Balance at end of year (subtract line
4 Add lines 1, 2, and 3 7 from line 4)
Form 1120-PC (2002)