DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS ANI ...

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DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS ANI) PROFESSIONAL REGISTRATION

P.O. Box 690, Jefferson City, Mo. 65102-0690

ORDER After full consideration and review of the report of the financial examination of Caterpillar Life Insurance Company for the period ended December 31, 2017, together with any written submissions or rebuttals and any relevant portions of the examiners workpapers, I, Chiora Lindley-Myers, Director of the Missouri Department of Insurance, Financial Institutions and Professional Registration pursuant to section 374.205.3(3)(a), RSMo, adopt such examination report. After my consideration and review of such report, workpapers, and written submissions or rebuttals, I hereby incorporate by reference and deem the following parts of such report to be my findings and conclusions to accompany this order pursuant to section 374.205.3(4), RSMo: summary of significant findings, subsequent events, company history, corporate records, management and control, territory and plan of operation, reinsurance, financial statements, analysis of examination changes, comments on financial statements, and summary of recommendations. Based on such findings and conclusions, I hereby ORDER that the report of the financial examination of Caterpillar Life Insurance Company as of December 31, 20J7 he and is hereby ADOPTED as filed and for Calerpillar Life Insurance Company to take Ihe following action or actions, which I consider necessary to cure any violation of law, regulation or prior order of the Director revealed by such report: (1) account for its financial condition and affairs in a manner consistent with the Director's findings and conclusions. So ordered, signed and official seal affixed this -"--" day of May, 2019.

/ Chlora Lindley-Myers, Dir ctor

Department of Insurance, Financial Institutions and Professional Registration

REPORT OF FINANCIAL EXAMINATION

Caterpillar Life Insurance Company

ASOF

DECEMBER 31, 2017

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IL ED

MAY 2o 2Ujg

STATE OF MISSOURI

DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION

JEFFERSON CITY, MISSOURI

TABLE OF CONTENTS

SCOPE OF EXAMINATION

.1

Period Covered

Procedures

1

Reliance Upon Others

2

SUMMARY OF SIGNIFICANT FINDINGS

2

SUBSEQUENT EVENTS

2

COMPANY HISTORY

2

General

2

Capital and Surplus Contributions

2

Dividends

3

Acquisitions, Mergers and Major Corporate Events

3

CORPORATE RECORDS

3

MANAGEMENT AND CONTROL

3

Board of Directors

3

Officers

4

Committees

4

Holding Company. Subsidiaries and Affiliates

5

Organizational Char

6

Affiliated Transactions

7

TERRITORY AND PLAN OF OPERATIONS

9

REINSURANCE

9

Assumed

9

Ceded

9

FINANCIAL STATEMENTS

9

ASSETS

[0

LIAB[LITIES, SURPLUS AND OTHER FUNDS

10

STATEMENT OF INCOME

11

RECONCILIATION OF SURPLUS

11

ANALYSIS OF EXAMINATION CHANGES

12

COMMENTS ON FINANCIAL STATEMENTS

12

SUMMARY OF RECOMMENDATIONS

12

ACKNOWLEDGEMENT

13

VERIFICATION

13

SUPERVISION

14

February 27, 2019 Jefferson City, MO

Honorable Chiora Lindley-Myers, Director Missouri Department of Insurance, Financial

Institutions and Professional Registration 301 West High Street. Room 530 Jefferson City, Missouri 65] 02

Director Lindley-Myers:

In accordance with your financial examination warrant, a comprehensive financial examination has been made of the records, affairs and financial condition of

Caterpillar Life Insurance Company

hereinafter referred to as "CLIC", or the "Company". The Company's home office is located at 2120 West End Avenue. Nashville. Tennessee; telephone number (615) 341-8147. Examination fieldwork began on October 1,2018. and concluded on the above date.

SCOPE OF EXAMINATION

Period Covered The Missouri Department of Insurance. Financial Institutions and Professional Registration (DIFP) has performed a full-scope examination of Caterpillar Life Insurance Company. The last examination was completed as of December 31, 2013, This examination covers the period from January 1, 2014, through December 31, 2017. The examination of CLIC was conducted concurrently with the examination of its affiliate, Caterpillar Insurance Company (CIC).

This examination also included material transactions or events occurring subsequent to December 31, 2017.

Procedures This examination was conducted in accordance with the National Association of Insurance Commissioners (NAICJ Financial Condition Exanziners Handbook (Handbook) except where practices. procedures and applicable regulations of the DIFP and statutes of the State of Missouri prevailed. The Handbook requires the planning and performance of the examination to evaluate the Companys financial condition, assess corporate governance, identify current and prospective risks of the Company and evaluate system controls and procedures used to mitigate those risks. An examination also includes identifying and evaluating significant risks that could cause an insurer's surplus to be materially misstated both currently and prospectively'.

Caterpillar Life -- 12/31/20 17 Exam All accounts and activities of the Company were considered in accordance with the risk-focused examination approach. This may include assessing significant estimates made by management and evaluating management's compliance with Statutory Accounting Principles. The examination does not attest to the fair presentation of the financial statements included herein. If, during the course of the examination an adjustment is identified, the impact of such adjustment will be documented separately following the Company's financial statements. The following key activities were identified during the examination: Investments. Claims Handling, Reserving, and Taxes.

The examination report includes significant findings of fact and general information about the insurer and its financial condition. There may be other items identified during the examination that, due to their nature, are not communicated within the examination report but separately communicated to other regulators and/or the Company.

Reliance Upon Others The examination relied heavily upon information provided by the Company and its management. Where the examiners have deemed appropriate, this information has been tested or verified with external soLirces. The examiners also relied upon information supplied by the Company's independent auditor, PricewaterhouseCoopers. for its audit covering the period from January 1, 2017 through December 31, 2017.

SUMMARY OF SIGNIFICANT FINDINGS

There were no material adverse findings, significant non-compliance issues, or material changes to the financial statements noted during the examination.

SUBSEQUENT EVENTS

There were no significant subsequent events noted from December 31, 2017, through the date of this report.

COMPANY HISTORY

General The Company was formed when Caterpillar, Inc. (CAT) acquired the shell of Maxicare Life and Health Insurance Company on April 30, 2004, with approval from the DIFP. The name of the Company was changed to Caterpillar Life Insurance Company on May 18, 2004.

Capital and Surplus Contributions No capital or surplus contributions were received during the examination period.

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