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General Star National Insurance CompanyAmerica.General Re's principal financial service operations are the New England AssetManagement, Inc. (“NEAM”) operations located in the United States (Farmington, Connecticut)and Dublin, Ireland. In January 2002, the Gen Re Financial Products Corporation business wasplaced in long-term runoff, and since that time approximately 99% of underlying contractsoriginated in active years have been terminated.Affiliated Agreements Domestic Management and Cost Sharing Agreementso Effective as of August 1, 2014, the subsidiaries of General Re entered into aMaster Services Agreement wherein the entities provide various services andreporting to each other. The Master Services Agreement superseded the variousindividual service agreements that existed between and among the entities. Feesand expenses are settled based on actual charges and/or allocated in accordancewith methods prescribed in the agreement. Tax Allocation Agreemento Effective for tax years beginning December 31, 2015, the Company entered anAmended and Restated Tax Allocation Agreement with General Re and Berkshireaffiliates. In accordance with the amended agreement, the Company joins with agroup of approximately eight hundred affiliated companies in the filing of aconsolidated federal income tax return by Berkshire.The consolidated taxliability is allocated among affiliates in the ratio that each affiliate’s separatereturn tax liability bears to the sum of the separate return tax liabilities of allaffiliates that are members of the consolidated group.8In addition, a

General Star National Insurance Companycomplementary method is used which results in reimbursement by profitableaffiliates to loss affiliates for tax benefits generated by loss affiliates. Cash Management Agreementso Effective as of January 1, 1989, and amended February 1, 2007, October 1, 2008and July 1, 2009, the Company entered a Joint Asset Agreement with several ofits affiliates. In accordance with the agreement, a pool fund was establishedwhereby each participant contributes cash in excess of general working capital inorder to improve the investment returns on the contributed funds.Eachparticipant jointly owns a percentage of the assets in the pool and the investmentincome derived from the pool. Reinvestments of the pool are made in proportionto each participant’s contributed assets, and each participant jointly shares thesame proportion in the profits or losses, if any, of the pool fund. The agreementappoints GRC as the manager of the pool fund, and any participant may cancel itsparticipation and liquidate or withdraw its contributions on notice to the manager.o Effective as of March 1, 1993, and amended February 1, 2007, October 1, 2008and July 1, 2009, the Company and several affiliates entered a Master LoanAgreement. In accordance with the agreement, an intercompany short-term loanprogram was established to reduce each participant’s level of short-terminvestments yet allow the participants to retain sufficient liquidity to pay currentobligations by borrowing funds as needed. GRC acts as the manager of the shortterm loan facility.It is authorized to make loans by affiliates to affiliatesrequesting such a loan. Material loans require the lending affiliate's specificapproval. Loans are repayable on demand but are anticipated to be outstanding9

General Star National Insurance Companyfor six months or less. Borrowing affiliates may repay the loans at any timewithout penalty. Investment Management Agreemento Effective as of January 1, 2009, and amended October 1, 2012, the Company andits affiliate, New England Asset Management, Inc. ("NEAM"), entered into anInvestment Management Agreement. In accordance with the agreement, NEAMperforms certain investment management services for the Company in return foran annual fee as specified in the agreement. Other – From time to time, the Company participates in various affiliated agreements andtransactions with entities owned or controlled by Berkshire. The principal agreements inplace during the examination period include affiliated reinsurance agreements wherebythe Company cedes insurance risk to Berkshire entities and affiliated investmentcontracts whereby the Company invests in lending agreements and/or securities issued byBerkshire entities.TERRITORY AND PLAN OF OPERATIONThe Company’s direct parent, GRC, is the principal subsidiary of General Re and directlyor indirectly owns the majority of General Re’s domestic and international insurance operatingentities.General Re operates in four principal business segments: North Americanproperty/casualty insurance and reinsurance, international property/casualty reinsurance, globallife/health reinsurance and financial services. GRC’s standalone operations constitute the NorthAmerican property/casualty reinsurance segment. The Company and its affiliates, GSIC andGIC, as standalone operations constitute the North American property/casualty insurancesegment of General Re.10

General Star National Insurance CompanyThe Company is licensed to write property and casualty insurance in all fifty states, theDistrict of Columbia and Puerto Rico. The Company provides commercial casualty insurance ona primary and excess basis, primarily for small and midsized commercial entities. Business iswritten through wholesale brokers and appointed agents. The Company’s business is producedthrough two operating divisions. The Brokerage Division writes business in several states andwithin the New York Free Trade Zone. The Delegated Division includes an entertainmentoriented book of business produced by a single producer and errors and omissions liabilityprograms for professionals produced by various Program Administrators. The Company retainsclaims authority for the program business, but delegates marketing, underwriting, pricing andpolicy issuance to Program Administrators.The Company receives administrative services from affiliates General Star ManagementCompany (“GSM”) and Genesis Management and Insurance Services Corporation (“GMIS”).GSM and GMIS are licensed insurance agencies that provide services to the Company inaccordance with an affiliated Master Services Agreement. Services provided may include:business services, business development, claims administration, underwriting services andenterprise risk management. The Company and its affiliates have branch offices in Atlanta,Georgia; Chicago, Illinois; Los Angeles, California; and New York, New York.REINSURANCEThe Company utilizes reinsurance agreements to reduce its exposure to large losses. TheCompany’s ceded reinsurance program is primarily concentrated with two Berkshire affiliates asfurther described as follows. Effective January 1, 2005, the Company (and affiliates: GRC,GSIC and GIC) entered into a loss portfolio transfer reinsurance contract (the “loss portfolio”)and a quota share reinsurance contract (the “quota share”) with two other Berkshire affiliates,11

General Star National Insurance CompanyNational Indemnity Company and Columbia Insurance Company. Both agreements cover themajority of the North American property/casualty business. The loss portfolio provides for a50% reinsurance cover on existing net losses as of December 31, 2004, subject to an overallaggregate limit of 11,155 million. The quota share provides 50% reinsurance cover on netlosses occurring after January 1, 2005.The following is a summary of the Company’s gross written premium, ceded premiumand net written premium for the year ended December 31, 2016:Direct premium writtenPremiumWritten andCeded 20,681,029% of WrittenPremium100.0%Ceded to affiliatesCeded to non-affiliatesTotal ceded10,332,300104,725 10,437,02550.0%0.5%50.5%Net written premium 10,244,00449.5%As of December 31, 2016, the Company’s ceded reinsurance in-force consists primarilyof affiliated reinsurance as demonstrated by the following summary of reported credits forreinsurance:(In Thousands)AffiliatedReinsurers 1,95713,28371,4794,994 91,713Paid losses and loss adjustment expensesKnown case loss and loss adjustment expensesIncurred but not reportedUnearned premiums and Contingent commissionsTotal Reinsurance Recoverables12UnaffiliatedReinsurers 135321663 633Total as of12/31/2016 1,95813,63671,6955,057 92,346

General Star National Insurance CompanyFINANCIAL STATEMENTSThe following financial statements are based on the statutory financial statements filed bythe Company with the Department and present the financial condition of the Company for theperiod ending December 31, 2016: Statement of AssetsStatement of Liabilities, Capital and SurplusStatement of IncomeReconciliation of Capital and Surplus13

General Star National Insurance CompanyStatement of AssetsAs of December 31, 2016BondsPreferred stocksCommon stocksCash - Schedule E - Part 1Cash equivalent - Schedule E - Part 2Short-term investments - Schedule DAInvestment income due and accruedUncollected premiums and agents' balancesDeferred premiums, agents' balances and installmentsbooked but deferred and not yet dueAmounts recoverable from reinsurersAggregate write-ins for other than invested assetsTotal assetsLedger Assets 649,539562,9121,873,702Assets NotAdmitted 22,245Net AdmittedAssets 18232,7941,957,685355,571 14234,141,369 39,663 234,101,706Notes1211

General Star National Insurance CompanyStatement of Liabilities, Capital and SurplusAs of December 31, 2016LossesLoss adjustment expensesCommissions payable, contingent commissions and other similar chargesCurrent federal and foreign income taxesNet deferred tax liabilityUnearned premiumsCeded reinsurance premiums payableAmounts withheld or retained by company for account of othersRemittances and items not allocatedPayable to parent, subsidiaries and affiliatesPayable for securitiesAggregate write-ins for liabilities ,07314,8386,374774,4841,57679,785Total liabilities 55,985,002Common capital stockGross paid in and contributed surplusUnassigned funds (surplus) 4,000,00060,107,585114,009,119Total capital and surplus 178,116,704Total liabilities, capital and surplus 234,101,70615Notes33

General Star National Insurance CompanyStatement of IncomeFor the Year Ended December 31, 2016UNDERWRITING INCOMEPremiums earned 10,138,971Losses incurredLoss adjustment expenses incurredOther underwriting expenses incurredTotal underwriting deductions Net underwriting gain (loss)INVESTMENT INCOMENet investment incomeNet realized capital gains (losses)Total net investment gain (loss) 1,480,4481,234,5214,662,4527,377,421 2,761,550 2,752,430(78)2,752,352 OTHER INCOMENet gain (loss) from agents' or premium balances charged offAggregate write-ins for miscellaneous incomeTotal other income (3,496)4,148652Net gain from operations before federal income tax 5,514,554 Federal and foreign income taxes incurred (benefit)Net income (loss)1,189,254 164,325,300

General Star National Insurance CompanyReconciliation of Capital and Surplusfor the Period from the Prior ExaminationDecember 31, 2012 to December 31, 2016Balance at December 31, 20122013 Net income2013 Changes in unassigned funds - other2013 Dividends to stockholdersBalance at December 31, 20132014 Net income2014 Changes in unassigned funds - other2014 Dividends to stockholdersBalance at December 31, 20142015 Net income2015 Changes in unassigned funds - other2015 Dividends to stockholdersBalance at December 31, 20152016 Net income2016 Changes in unassigned funds - other2016 Dividends to stockholdersBalance at December 31, 2016(1)(1)(1)(1)CommonCapitalStock 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000Gross Paid-in &ContributedSurplus 60,107,585 60,107,585 60,107,585 60,107,585 60,107,585Unassigned FundsSurplus 117,082,39313,238,9303,616,773 133,938,0962,341,6182,901,262(19,000,000) 120,180,9761,461,075(1,330,557)(18,000,000) 102,311,4944,325,3007,372,325 114,009,119 8,116,704(1): Changes in unassigned funds - other for each year include: change in net unrealized capital gain/loss, change innet deferred income tax and changes in non-admitted assets.17

General Star National Insurance CompanyANALYSIS OF CHANGES IN FINANCIAL STATEMENTS RESULTING FROM THEEXAMINATIONThere were no adjustments to the Company’s financial statements as a result of theexamination.COMMENTS ON FINANCIAL STATEMENT ITEMSNote 1:Schedule D – Part 1 - BondsSchedule DA – Part 1 – Short-term InvestmentsSchedule E – Part 2 – Cash equivalents 16,598,936135,649,53913,663,481As of December 31, 2016, total bonds were comprised of the following based on NAICAnnual Statement classification:Book ValueSchedule DA - Short-term Investments:United States - Treasury BillsOtherSub-total Schedule DASchedule E - Part 2 - Cash Equivalents:General Re - Affiliated Cash Pool* Schedule D - Bonds:U.S. Government Bonds - Issuer ObligationsIndustrial and Miscellaneous - Issuer ObligationsU.S. Special Revenue & Assessment - Issuer ObligationsResidential Mortgage Backed SecuritiesU.S. Territory - Issuer ObligationsSub-total Schedule D - BondsTotal Bonds*: Conists primarily of United States Treasury Bills18% of Total BondBook Value 134,921,426728,113135,649,53981.3%0.44%81.8% 13,663,4818.2% 2.9%3.0%3.8%0.1%0.2%10.0% 165,911,956100%

General Star National Insurance CompanyOf the Company’s total bond holdings, all were categorized as Class 1 with respect toNAIC credit quality standards. As of December 31, 2016, bond maturities were structured with91.4%, 5.5%, and 3.1% maturing in less than one year, one to five years and five to ten years,respectively. Of the total bond holdings, all were publicly traded securities.Note 2:Schedule D – Part 2 – Section 2 – Common Stock 51,950,376As of December 31, 2016, the Company reported total unaffiliated common stockinvestments on Schedule D – Part 2 – Section 2 with book/fair market values in the amount of 52.0 million and actual cost of 23.2 million. The following as a summary of the Company’scommon stock holdings as of December 31, 2016.Book/Fair 83 51,950,376Wells Fargo & CompanyBank of America Corp - WarrantGoldman Sachs Group Inc.Apple, IncGeneral Electric CoTotal Common Stocks Note: 3LossesLoss Adjustment ExpenseActual Cost5,976,5022,800,0008,589,3254,950,864862,917 23,179,608 28,998,1678,805,995INS Consultants, Inc. (“Consulting Actuary”) assisted in review of the inherent risks,management oversight and other mitigating controls over the Company’s actuar

General Star National Insurance Company 6 Insurance Holding Company System The Company is a member of an insurance holding company system as defined under 18 Del. C. §5001 of the Delaware Insurance Code. General Re indirectly owns 100% of the Company. General Re is a wholly owned subsidiary of Berkshire Hathaway Inc. ("Berkshire"),