10-Q 1 form10q-q103.txt FORM10Q_Q103 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------------- FORM 10-Q --------------------------------- [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2003 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ --------------------------------- Commission file number 0-27394 --------------------------------- GE Global Insurance Holding Corporation --------------------------------------- (Exact name of registrant as specified in its charter) Delaware 95-3435367 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5200 Metcalf, Overland Park, Kansas 66202 (Address of principal executive offices) (Zip Code) (913) 676-5200 (Registrant's telephone number, including area code) --------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No[ ] At May 2, 2003, 1,600 shares of common stock with a par value of $5,000 per share were outstanding. REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM 10-Q WITH THE REDUCED DISCLOSURE FORMAT.

TABLE OF CONTENTS Page ---- PART I - FINANCIAL INFORMATION. Item 1. Financial Statements.....................................................~~....................~~ 1 Item 2. Management's Discussion and Analysis of Results of Operations............~~....................~~ 86 Item 4. Controls and Procedures..................................................~~....................~~ 148 PART II - OTHER INFORMATION. Item 6. Exhibits and Reports on Form 8-K.........................................~~....................~~ 159 Signatures. .........................................................................~~....................~~ 1610 Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .....................~~........................~~ 1711 INDEX TO EXHIBITS. Exhibit 12. Computation of Ratio of Earnings to Fixed Charges........................~~....................~~ 1913 Exhibit 99.1. Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002............................~~.......................................~~ 2014 Exhibit 99.2. Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002............................~~.......................................~~ 2115

PART I - FINANCIAL INFORMATION Item 1. Financial Statements.

GE GLOBAL INSURANCE HOLDING CORPORATION AND CONSOLIDATED SUBSIDIARIES Condensed, Consolidated Statement of Current and Retained Earnings (Unaudited) ~~Three~~First ~~months~~quarter ended ~~Nine~~March ~~months~~31 ~~ended~~ -------------------------------- ---~~-----------------------------~~ (In millions) ~~Sept.~~2003 ~~28,~~ 2002 ~~Sept. 29, 2001 Sept. 28, 2002 Sept. 29, 2001~~ -------------- -------------- ~~-------------- --------------~~ Revenues Net premiums written $2,~~273~~332 $12,~~110~~119 ~~$6,012 $5,157~~ ====== ====== ~~====== ======~~ Net premiums earned $2,~~116~~364 $1,~~066~~991 ~~$5,826 $5,077~~ Net investment income ~~272~~296 ~~303~~271 ~~815 909~~ Net realized gains (losses) on investments ~~150~~(3) ~~192~~40 ~~208 333~~ Other revenues 3044 6955 ~~106 269~~ ------ ------ ~~------ ------~~ Total revenues 2,~~568~~701 12,~~630~~357 ~~6,955 6,588~~ ------ ------ ~~------ ------~~ Costs and Expenses Claims, claim expenses and policy benefits 21,~~125~~821 1,~~662~~614 ~~5,432 4,929~~ Insurance acquisition costs ~~453~~440 ~~258~~430 ~~1,352 1,226~~ Other operating costs and expenses ~~181~~226 ~~158~~180 ~~544 549~~ Minority interest in net earnings of consolidated subsidiaries 2223 22 ~~66 67~~ ------ ------ ~~------ ------~~ Total costs and expenses 2,~~781~~510 2,~~100~~246 ~~7,394 6,771~~ ------ ------ ~~------~~Earnings ~~------~~ Earnings ~~(loss) Loss~~ before income taxes ~~and~~191 ~~cumulative~~111 ~~effect~~Provision offor ~~change~~income intaxes ~~accounting~~57 ~~principle~~26 ~~(213) (470) (439) (183) Income tax benefit (90) (232) (184) (153)~~ ------ ------ ~~------ ------ Loss before cumulative effect of change in accounting principle (123) (238) (255) (30) Cumulative effect of change in accounting principle - - - (11) ------ ------ ------ ------~~ Net ~~loss~~earnings ~~(123)~~134 ~~(238)~~85 ~~(255) (41)~~ Dividends on preferred stock (2) (2) ~~(6) (6)~~ Retained earnings at beginning of period 43,~~866~~262 5,~~397 5,~~002 ~~5,204~~ ------ ------ ~~------ ------~~ Retained earnings at end of period $43,~~741~~394 $5,~~157~~085 ~~$4,741 $5,157~~ ====== ====== ~~====== ======~~

See Notes to Condensed, Consolidated Financial Statements. 1 Item 1. Financial Statements (Continued).

~~Item 1. Financial Statements (Continued).~~ GE GLOBAL INSURANCE HOLDING CORPORATION AND CONSOLIDATED SUBSIDIARIES Condensed, Consolidated Statement of Financial Position (In millions) ~~September~~March 2831, ~~2002~~2003 December 31, ~~2001~~2002 --------------~~----~~ ----------------- (Unaudited) Assets: Investments: Fixed maturity securities, at fair value $1924,~~090~~779 $1922,~~769~~200 Equity securities, at fair value ~~620~~597 ~~641~~627 Other invested assets 42,~~579~~634 23,~~085~~995 ------- ------- Total investments 2428,~~289~~010 2226,~~495~~822 Cash ~~1,226~~451 ~~470~~911 Premiums receivable 4,~~637~~792 4,~~376~~447 Other receivables 1,~~788~~509 1,~~402~~984 Reinsurance recoverables 10,~~964~~074 10,~~367~~901 Deferred insurance acquisition costs 1,~~755~~888 1,~~615~~882 Other assets 54,~~141~~866 4,~~393~~839 ------- ------- Total assets $4951,~~800~~590 $4551,~~118~~786 ======= ======= Liabilities and equity: Claims and claim expenses $2224,~~813~~453 $2225,~~033~~157 Accumulated contract values 2,~~774~~780 2,~~909~~826 Future policy benefits for life and health contracts 3,~~723~~967 23,~~965~~852 Unearned premiums 3,~~323~~329 23,~~763~~231 Other reinsurance balances 34,~~856~~421 24,~~935~~325 Other liabilities 32,~~912~~833 2,~~313~~839 Long-term borrowings 1,~~655~~656 1,~~655~~656 ------- ------- Total liabilities 4243,~~056~~439 3743,~~573~~886 ------- ------- Minority interest in equity of consolidated subsidiaries 1,~~255~~231 1,~~183~~236 ------- ------- Accumulated non-owner changes in equity: ~~Unrealized~~Accumulated unrealized gains on investment securities - net ~~325~~255 23149 ~~Foreign~~Accumulated foreign currency translation adjustments (~~175~~118) (~~241~~138) Derivatives qualifying as hedges 189 ~~(2)~~11 ------- ------- Total accumulated non-owner changes in equity ~~168~~146 ~~(220)~~22 Preferred stock 150 150 Common stock 58 58 Paid-in capital 13,~~425~~222 13,~~425~~222 Retained earnings 43,~~741~~394 53,~~002~~262 ------- ------- Total stockholder's equity 6,~~489~~920 6,~~362~~664 ------- ------- Total liabilities and equity $4951,~~800~~590 $4551,~~118~~786 ======= ======= ~~See Notes to Condensed, Consolidated Financial Statements.~~

See Notes to Condensed, Consolidated Financial Statements. 2 Item 1. Financial Statements (Continued).

GE GLOBAL INSURANCE HOLDING CORPORATION AND CONSOLIDATED SUBSIDIARIES Condensed, Consolidated Statement of Cash Flows (Unaudited) ~~Nine~~First ~~months~~quarter ended March 31 --------------------------------------- (In millions) ~~Sept.~~2003 ~~28,~~ 2002 ~~Sept.~~-------------- ~~29, 2001~~ -------------- Cash Flows From Operating Activities Net earnings $ 134 $ 85 Adjustments to reconcile net earnings to cash from (used for) operating activities: Claims and claims expenses (705) (284) Reinsurance recoverables 827 (16) Other operating activities (392) 496 ------- ------- Cash from (used for) operating activities $ ~~809~~(136) $ ~~244~~281 ------- ------- Cash ~~flows~~Flows ~~from~~From ~~investing~~Investing ~~activities~~Activities Fixed maturity securities: Purchases (105,~~408~~904) (113,~~408~~413) Sales 102,~~256~~904 112,~~618~~759 Maturities ~~1,943~~800 ~~712~~556 Equity securities: Purchases (~~459~~116) (~~310~~199) Sales ~~442~~77 ~~177~~282 Net ~~purchases~~sales of short-term investments (21,~~056)~~359 ~~(906)~~29 ~~Net cash paid for acquisitions and in-force reinsurance transactions (25) -~~ Other investing activities ~~402~~252 43(85) ------- ------- Cash ~~from (~~used for) investing activities 95(628) (7471) ------- ------- Cash ~~flows~~Flows ~~from~~From ~~financing~~Financing ~~activities~~Activities Change in contract deposits (2014) ~~(13)~~15 Net contract accumulation payments (~~135~~46) (6123) Net proceeds under related party credit facility 461 108 Proceeds from short-term borrowings ~~259~~- 8733 Principal payments on short-term borrowings (~~156~~80) (~~187~~20) ~~Capital contribution received - 400 Proceeds from issuance of subsidiary preferred stock 70 -~~ Dividends paid (62) (62) ------- ------- Cash from financing activities 12319 ~~220~~111 ------- ------- Effect of exchange rate changes on cash (~~160~~15) 4201 ------- ------- Increase (decrease) in cash ~~756~~(460) ~~394~~522 Cash at beginning of period 911 470 ~~196~~ ------- ------- Cash at end of period $ ~~1,226~~451 $ ~~590~~992 ======= =======

See Notes to Condensed, Consolidated Financial Statements. 3 Item 1. Financial Statements (Continued). GE GLOBAL INSURANCE HOLDING CORPORATION AND CONSOLIDATED SUBSIDIARIES Notes to Condensed, Consolidated Financial Statements (Unaudited) 1. The accompanying condensed, consolidated quarterly financial statements of GE Global Insurance Holding Corporation ("GE Global Insurance") include the accounts and operations, after intercompany eliminations, of GE Global Insurance, Employers Reinsurance Corporation, GE Reinsurance Corporation, Medical Protective Corporation and CORE Insurance Holdings. These statements have been prepared on the basis of accounting principles generally accepted in the United States of America ("GAAP"). GE Global Insurance is collectively referred to as "we", "us" or "our" in this document unless the context otherwise requires. 2. The condensed, consolidated quarterly financial statements are unaudited. These statements include all adjustments (consisting of normal recurring accruals) that we considered necessary to present a fair statement of the results of operations, financial position and cash flows. We label our quarterly information using a calendar convention, that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30, and third quarter as ending on September 30. It is our longstanding practice to establish actual interim closing dates using a "fiscal" calendar, which requires our businesses to close their books on a Saturday in order to normalize the potentially disruptive effects of quarterly closings on business processes. The effects of this practice are modest and only exist within a reporting year. The results reported in these condensed, consolidated quarterly financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. 3. In January 2003, the Financial Accounting Standards Board ("FASB") issued Interpretation No. ("FIN") 46, Consolidation of Variable Interest Entities, which we intend to adopt on July 1, 2003. FIN 46's consolidation criteria are based on analysis of risks and rewards, not control, and represent a significant and complex modification of previous accounting principles. FIN 46 represents an accounting change, not a change in the underlying economics of asset sales. Under its provisions, certain assets previously sold to special purpose entities ("SPE's") could be consolidated and, if consolidated, any assets and liabilities now on the books related to those SPE's would be removed. We do not believe adoption of this interpretation will materially impact our financial position or future operating results. In April 2003, the FASB finalized SFAS 133 Implementation Issue No. B36, "Modified Coinsurance Arrangements and Debt Instruments that Incorporate Credit Risk Exposures that are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under those Instruments." In summary, the FASB determined that modified coinsurance arrangements where the ceding insurer withholds funds may include an embedded derivative that must be bifurcated from the host instrument if it is not clearly and closely related to such host instrument. This situation often arises when the ceding interest rate on the funds held balance is linked to the actual performance of a specified pool of assets. This guidance is effective on the first day of the first fiscal quarter beginning after September 15, 2003. We are currently evaluating the effect that this guidance may have on our financial statements; however, based on preliminary analysis performed, we do not believe it will materially impact our financial position or future operating results. 4 4. Changes in stockholder's equity that did not result directly from transactions with the share owner were as follows:

~~Three~~First ~~months~~quarter ended ~~Nine~~March ~~months~~31 ~~ended~~ -------------------------------- ------~~--------------------------~~ (In millions) ~~Sept.~~2003 ~~28,~~ 2002 ~~Sept. 29, 2001 Sept. 28, 2002 Sept. 29, 2001~~ -------------- -------------- ~~--------------~~Net ~~--------------~~earnings ~~Loss before cumulative effect of change in accounting principle~~ $~~(123)~~ ~~$(238)~~134 $~~(255)~~ ~~$(30)~~85 ~~=====~~Net ~~=====~~unrealized ~~=====~~gains ~~==== Earnings~~ (~~loss~~losses) ~~before~~on ~~cumulative~~investment ~~effect~~securities of106 ~~change in accounting principle, excluding 2001 goodwill amortization $~~(~~123~~109) ~~$(220)~~Foreign ~~$(255)~~currency $translation 22adjustments ~~=====~~20 ~~===== ===== ==== Net loss $~~(~~123~~5) ~~$(238)~~Derivatives ~~$(255)~~qualifying ~~$(41)~~as ~~=====~~hedges ~~===== ===== ==== Net earnings~~ (~~loss~~2), ~~excluding~~5 ~~2001~~----- ~~goodwill~~---- ~~amortization~~Total $~~(123)~~ ~~$(220)~~258 $(~~255~~24) ~~$ 11~~ ===== ====~~= ===== ====~~

5. Our operating segment activity is summarized as follows:

AtFirst ~~September~~quarter ~~28,~~ended ~~2002~~March ~~At December~~ 31, ~~2001~~ ----------------------------- ---------~~-------------------~~ (In millions) ~~Gross~~2003 ~~Gross~~2002 ~~Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization~~ -------- ------ ------ -------- Revenues Property and Casualty $1,878 $1,710 Life 823 647 ------ ------ ~~Intangibles~~Total ~~Subject~~revenues to$2,701 ~~Amortization~~$2,357 ~~Present~~====== ~~value~~====== ofEarnings ~~future~~before ~~profits~~income ~~("PVFP")~~taxes ~~$505~~Property ~~$(122)~~and ~~$267~~Casualty $~~(102)~~ ~~Capitalized~~156 ~~software~~$ ~~188~~66 ~~(61)~~Life ~~185~~35 ~~(43)~~45 ~~All other 11 (4) 136 (29)~~ ---- --~~---~~ ---- --~~---~~ Total ~~$704~~earnings ~~$(187)~~before income taxes $~~588~~ 191 $~~(174)~~ ~~====~~111 ===== =~~===~~ ======

6. There is a high degree of uncertainty inherent in the estimates of ultimate losses underlying the liability for unpaid claims and claim expenses. This inherent uncertainty is particularly significant for liability-related exposures, including latent claim issues (such as asbestos and environmental related coverage disputes) due to the extended period, often many years, that transpires between a loss event, receipt of related claims data from policyholders and/or primary insurers and ultimate settlement of the claim. This situation is then further exacerbated for reinsurance entities (as opposed to primary insurers) due to lags in receiving current claims data. Because reinsurance protection is often provided on an "excess-of-loss" basis whereby the reinsurer is only obligated to pay losses in excess of pre-established limits, notification is only required to be provided to the reinsurer when the claim is assessed as having a reasonable possibility of exceeding the primary insurer's retention thresholds. This notification can often be years after the loss event was initially reported to the primary insurer. We continually update loss estimates using both quantitative information from our reserving actuaries and qualitative information from other sources. While detailed analysis is performed on a quarterly basis to assess the overall adequacy of recorded claim reserves, a more comprehensive evaluation is undertaken on an annual basis. Historically, this more comprehensive review is completed during the fourth quarter of each year using both reported and paid claims activity as of September 30. Adjustments to recorded reserves resulting from these reviews are accounted for as changes in estimates and included in current operations. 5 Item 2. Management's Discussion and Analysis of Results of Operations. Overview Net earnings for the first three months of 2003 was $134 million, a $49 million increase from the first three months of 2002. The increase in reported profitability reflects the improved underwriting results within the property and casualty insurance/reinsurance segment resulting from the recent hardening of premium pricing. Partially offsetting the improved underwriting results was a decrease in total investment-related revenues (including net investment income and net realized gains/losses on investments) as a result of higher levels of other-than-temporary impairment charges recognized in 2003 and an increase in other operating costs and expenses. Although the movement in certain foreign currency exchange rates during 2003 and 2002 had an impact on the individual revenue and expense categories, the overall impact on net earnings was not significant. Specifically, most of the major European currencies strengthened relative to the U.S. dollar during the first quarter of 2003 as compared to the first quarter of 2002 and, accordingly, this has contributed to an increase in most of the individual revenue and expense line items in the accompanying earnings statement. Our two business segments are (1) property and casualty insurance/reinsurance and (2) life reinsurance. Business is conducted throughout the world utilizing our network of local offices. Our operating segment activity is summarized as follows:

~~Three~~First ~~months~~quarter ended March 31 --------------------------------------- (In millions) ~~Sept.~~2003 ~~28,~~ 2002 ~~Sept. 29, 2001~~ -------------- -------------- ~~Net~~Revenues ~~loss~~Property and Casualty $~~(123)~~1,878 $~~(238)~~1,710 ~~Net~~Life ~~unrealized~~823 ~~gains~~647 on------ ~~investment~~------ ~~securities~~Total ~~225~~revenues 25$2,701 ~~Foreign~~$2,357 ~~currency~~====== ~~translation~~====== ~~adjustments~~Earnings ~~(59)~~before 42income ~~Derivatives~~taxes ~~qualifying~~Property asand ~~hedges-net~~Casualty ~~changes~~$ in156 ~~value~~$ 766 9Life 35 45 ------ ------ Total earnings before income taxes $ 50191 $~~(162)~~ 111 ====== ======

Typically, the underwriting performance of property and casualty business is measured in terms of a combined ratio and earnings before income taxes. The combined ratio is the sum of the loss ratio and the underwriting expense ratio. For the first three months of 2003, the property and casualty combined ratio was 100.5%, compared to 108.1% for the same period in 2002. The lower combined ratio in 2003 primarily reflects the recent hardening of pricing within the overall property and casualty insurance industry and, to a lesser extent, lower average acquisition costs. Earnings before income taxes from property and casualty operations increased $90 million in the first three months of 2003, primarily attributable to the more favorable premium pricing environment that existed in the current period. The life reinsurance segment typically measures performance based on revenues and earnings before income taxes. Revenues consist of net premiums earned, net investment income, net realized gains on investments and other revenues, including fees generated from investment-related life reinsurance products and financial reinsurance transactions. For the first three months of 2003, the life operations generated revenues and earnings before income taxes of $823 million and $35 million, respectively, compared to $647 million and $45 million, respectively, for the same period in 2002. The increase in revenues is principally related to the acquisition of a block of life reinsurance business in the second half of 2002 (the "AUL acquisition") and the impact of changes in foreign exchange rates applicable to the first quarter of 2003 versus the first quarter of 2002. The decrease in earnings is primarily attributable to the combination of increased claim activity in the current quarter as compared to the same period in 2002 with respect to mortality and certain health-related products and lower levels of net realized gains on investments. 6 Operating Results Net premiums written and net premiums earned increased $213 million (10%) and $373 million (19%), respectively. These increases are primarily attributable to the recent hardening of pricing within the overall property and casualty industry, additional premiums resulting from the AUL acquisition completed in the second half of 2002 and the impact of changes in foreign exchange rates. In addition, we had volume growth in certain business sectors. However, this growth was offset by decreases in other business sectors resulting from the adherence to stricter underwriting discipline and intentional actions taken to exit certain product lines, policies, contracts and specific customers for which, given the risk, acceptable future levels of profit did not seem achievable. Net investment income increased $25 million or 9% in 2003, principally as a result of higher levels of invested assets. The increase in invested assets includes the impact of a $1.8 billion capital contribution received in the fourth quarter of 2002. Net realized gains on investments decreased $43 million in 2003, primarily attributable to a higher level of other-than-temporary impairment charges recognized during the current year. Other revenues decreased $11 million or 20% in 2003, primarily attributable to decreases in fee-related income within the life reinsurance segment. Claims, claim expenses and policy benefits increased $207 million or 13% in 2003, principally resulting from the AUL acquisition discussed above and the impact of changes in foreign exchange rates. Insurance acquisition costs increased $10 million or 2% in 2003, primarily attributable to the increase in net earned premiums discussed above, somewhat offset by a decrease in contingent commissions as compared to 2002. Other operating costs and expenses increased $46 million or 26% in 2003, primarily resulting from: (1) an increase in average employee salaries and related benefits costs; (2) the AUL acquisition discussed above; and (3) the impact of changes in foreign exchange rates. Provision for income taxes was $57 million for the first three months of 2003 (an effective tax rate of 30%), compared to $26 million for the first three months of 2002 (an effective tax rate of 23%). The slightly higher effective tax rate in 2003 primarily reflects a lower proportion of tax-exempt investment income. Other Considerations Our investment portfolio consists primarily of investment grade debt securities and was $28.0 billion, including gross unrealized gains and losses of $646 million and $261 million, respectively, at March 31, 2003, compared with $26.8 billion, including gross unrealized gains and losses of $558 million and $263 million, respectively, as of December 31, 2002. Investment securities are regularly reviewed for impairment based on criteria that include the extent to which cost exceeds market value, the duration of that market decline and the financial health and specific prospects for the issuer. Of those securities whose carrying amount exceeded fair value at March 31, 2003, approximately $115 million is at risk of being charged to earnings in the next 12 months. Investments in entities in the telecommunication and cable industries approximated $298 million as of March 31, 2003. These investments have been entered into subject to strict risk criteria and are diversified. Recently, during declines in the values of these investments, the positions have been routinely reviewed for impairment losses, and actions have been taken to mitigate exposures. Future losses will depend upon business and economic developments as well as the success of risk mitigation actions. During the quarter ended March 31, 2003, Standard & Poor's Rating Services ("S&P") reaffirmed the counterparty credit and financial strength ratings on Employers Reinsurance Corporation and its wholly owned subsidiaries. Additionally, S&P also affirmed the counterparty credit and senior debt ratings on GE Global Insurance Holding Corporation. All ratings were removed from CreditWatch where they had initially been placed on September 30, 2002. 7 Forward Looking Statements This document includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in global economic, business, competitive market and regulatory factors. Item 4. Controls and Procedures Within the 90-day period prior to the filing of this report, we, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of the company's disclosure controls and procedures as defined in Exchange Act Rule 13a-14(c). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the date of that evaluation. There have been no significant changes in internal controls, or in factors that could significantly affect internal controls, subsequent to the date the Chief Executive Officer and Chief Financial Officer completed their evaluation. 8 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. a. Exhibits. Exhibit 12. Computation of ratio of earnings to fixed charges. Exhibit 99.1. Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Exhibit 99.2. Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. b. Reports on Form 8-K. None. 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GE GLOBAL INSURANCE HOLDING CORPORATION --------------------------------------- (Registrant) Date: May 2, 2003 By: /s/ Marc A. Meiches ------------------------------------------------ Marc A. Meiches Senior Vice President and Chief Financial Officer (Principal Financial Officer) Date: May 2, 2003 By: /s/ William J. Steilen ------------------------------------------------ William J. Steilen Vice President and Controller (Principal Accounting Officer) 10 GE GLOBAL INSURANCE HOLDING CORPORATION AND CONSOLIDATED SUBSIDIARIES CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATION ------------- I, Ronald R. Pressman, certify that: 1. I have reviewed this quarterly report on Form 10-Q of GE Global Insurance Holding Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 2, 2003 /s/ Ronald R. Pressman ---------------------- Ronald R. Pressman Chief Executive Officer 11 GE GLOBAL INSURANCE HOLDING CORPORATION AND CONSOLIDATED SUBSIDIARIES CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATION ------------- I, Marc A. Meiches, certify that: 1. I have reviewed this quarterly report on Form 10-Q of GE Global Insurance Holding Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 2, 2003 /s/ Marc A. Meiches --------------------- Marc A. Meiches Chief Financial Officer 12

Nine months ended --------------------------------------- (In millions) Sept. 28, 2002 Sept. 29, 2001 -------------- -------------- Net loss $(255) $(41) Net unrealized gains on investment securities 302 24 Foreign currency translation adjustments 66 82 Derivatives qualifying as hedges-net changes in value 20 1 ----- ---- Total $ 133 $ 66 ===== ====

Three months ended --------------------------------------- (In millions) Sept. 28, 2002 Sept. 29, 2001 -------------- -------------- Revenues Property/Casualty $1,774 $1,007 Life 794 623 ------ ------ Total revenues $2,568 $1,630 ====== ====== Earnings (loss) before income taxes and cumulative effect of change in accounting principle (1) Property/Casualty $ (237) $ (518) Life 24 70 ------ ------ Total loss before income taxes and cumulative effect of change in accounting principle $ (213) $ (448) ====== ======

Nine months ended --------------------------------------- (In millions) Sept. 28, 2002 Sept. 29, 2001 -------------- -------------- Revenues Property/Casualty $4,917 $4,835 Life 2,038 1,753 ------ ------ Total revenues $6,955 $6,588 ====== ====== Earnings (loss) before income taxes and cumulative effect of change in accounting principle (1) Property/Casualty $ (520) $ (341) Life 81 222 ------ ------ Total loss before income taxes and cumulative effect of change in accounting principle $ (439) $ (119) ====== ======

Third quarter ended ---------------------------------------- (In millions) Sept. 28, 2002 Sept. 29, 2001 --------------- -------------- Revenues Property/Casualty $1,774 $1,007 Life 794 623 ------ ------ Total revenues $2,568 $1,630 ====== ====== Earnings (loss) before income taxes and cumulative effect of change in accounting principle (1) Property/Casualty $ (237) $ (518) Life 24 70 ------ ------ Total loss before income taxes and cumulative effect of change in accounting principle $ (213) $ (448) ====== ======

Nine months ended --------------------------------------- (In millions) Sept. 28, 2002 Sept. 29, 2001 -------------- -------------- Revenues Property/Casualty $4,917 $4,835 Life 2,038 1,753 ------ ------ Total revenues $6,955 $6,588 ====== ====== Earnings (loss) before income taxes and cumulative effect of change in accounting principles (1) Property/Casualty $ (520) $ (341) Life 81 222 ------ ----- Total loss before income taxes and cumulative effect of change in accounting principles $ (439) $ (119) ====== ======

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