UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

|X|  Annual Report Pursuant to Section 13 or 15(d) of
     The Securities Exchange Act of 1934

For the fiscal year ended December 31, 2002

                                       or

| |  Transition Report Pursuant to Section 13 or 15(d) of
     The Securities Exchange Act of 1934

                        Commission file number 333-34088

                         INTEGON RE (BARBADOS), LIMITED
             (Exact name of registrant as specified in its charter)

            Barbados                                          Not Applicable
  (State or other jurisdiction                               (I.R.S. Employer
of incorporation or organization)                         Identification Number)

One Financial Place
Collymore Rock
St. Michael, Barbados, W.I.                                     Not Applicable
(Address of principal executive offices)                          (Zip Code)

Registrant's telephone number, including area code: (246) 436-4895

Securities registered pursuant to Section 12(b) of the Act:  None

                                                            Name of each
   Title of each class                              Exchange on which registered

          None                                                  None

Securities registered pursuant to Section 12(g) of the Act:  None

     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 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  | |

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  |X|

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). YES | |   No  |X|

     Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.

                    Class                         As of March 15, 2003
                    -----                         --------------------
         Common Stock, no-par value                    1,000,000
      Participating Stock, no-par value                   600

     Aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant as of June 28, 2002 was 0.*

     * Based on current offering price of $250.00 per share.

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                                TABLE OF CONTENTS

                                                                            Page

ITEM 1.   BUSINESS.............................................................3
ITEM 2.   PROPERTIES...........................................................9
ITEM 3.   LEGAL PROCEEDINGS....................................................9
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................9
ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
          MATTERS..............................................................9
ITEM 6.   SELECTED FINANCIAL DATA.............................................10
ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS...............................................10
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK...........13
ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.........................13
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE................................................24
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..................24
ITEM 11.  EXECUTIVE COMPENSATION..............................................25
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT......25
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......................25
ITEM 14.  CONTROLS AND PROCEDURES.............................................25
ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K....26


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                         CAUTIONARY STATEMENT REGARDING
                           FORWARD-LOOKING STATEMENTS

This document contains "forward-looking statements" that anticipate results
based on management's plans that are subject to uncertainty. These statements
are made subject to the safe-harbor provisions of the Private Securities
Litigation Reform Act of 1995.

Forward-looking statements do not relate strictly to historical or current facts
and may be identified by their use of words like "plans," "will," "anticipates,"
"estimates," "intends," "believes" and other words with similar meanings. These
statements may address, among other things, our strategy for growth, product
development, regulatory approvals, market position, expenses, financial results
and reserves. Forward-looking statements are based on management's current
expectations of future events. We cannot guarantee that any forward-looking
statement will be accurate. However, we believe that our forward-looking
statements are based on reasonable, current expectations and assumptions.
Whether or not actual results differ materially from forward-looking statements
may depend on numerous foreseeable and unforeseeable risks and uncertainties,
some of which relate particularly to our business, such as our ability to set
adequate premium rates and maintain adequate reserves, our ability to compete
effectively and our ability to grow our business through internal growth as well
as though acquisitions. Other risks and uncertainties may be related to the
insurance industry generally or the overall economy, such as regulatory
developments, industry consolidation and general economic conditions and
interest rates. We assume no obligation to update any forward-looking statements
as a result of new information or future events or developments.

If the expectations or assumptions underlying our forward-looking statements
prove inaccurate or if risks or uncertainties arise, actual results could differ
materially from those predicted in our forward-looking statements.

                                     PART I

ITEM 1. BUSINESS

                                  INTRODUCTION

Integon Re (Barbados), Limited (the "Company") was incorporated in Barbados on
January 10, 2000. The Company became registered in Barbados as an insurer on
March 31, 2000 and commenced reinsurance operations on August 1, 2002.

The business of the Company is the assumption of risks under insurance policies,
including primarily automobile and motorcycle insurance policies, sold through
independent insurance agencies and then reinsured by Motors Insurance
Corporation ("MIC"). The Company only assumes risk on policies that are
reinsured by MIC and are attributable to an Integon Account (the "Policies").
The Policies are issued by subsidiaries or affiliates of Integon Corporation
("Integon"), reinsured by MIC, and retroceded to the Company. Shares of the
Company's Participating Stock (the "Shares") are sold to persons or entities
designated by the insurance agency or agencies with respect to which Integon
maintains an Integon Account. A separate series of Shares is created for each
Integon Account, and a separate "Subsidiary Capital Account" is maintained for
each such series. The financial results of the Company reflect both underwriting
and investment experience, which is allocated among the Subsidiary Capital
Accounts. See "Business--Allocations To Subsidiary Capital Accounts."

                                THE RETROCESSION

The Retroceding Company

MIC, the retroceding company under the Retrocession Agreement described below,
is a stock insurance company organized under the laws of Michigan. All of MIC's
outstanding stock is owned by GMAC Insurance Holdings, Inc., a wholly owned
subsidiary of General Motors Acceptance Corporation which, in turn, is a wholly
owned subsidiary of General Motors. MIC, directly and through its subsidiaries,
offers property and casualty coverages in all 50 states and the District of
Columbia, Canada, Europe, Latin America and Asia Pacific. MIC's A.M. Best
Company's insurance financial rating is currently A + (Superior), one of the
highest possible ratings.


                                       3

<PAGE>

The Retrocession Agreement

The Company entered into a "quota share" retrocession agreement with MIC (the
"Retrocession Agreement") which became effective as of March 31, 2000. Pursuant
to the Retrocession Agreement, MIC retrocedes to the Company, and the Company is
obligated to assume, a portion (the "Retrocession Percentage") of MIC's risks in
respect of automobile and motorcycle insurance policies reinsured by MIC, to the
extent that such policies are attributable to an Integon Account in respect of
which a series of Shares is issued, outstanding and in good standing (the
"Policies"), and such Policies are issued or renewed on or after the effective
date of the Retrocession Agreement. The Retrocession Percentage, which can be
either 20%, 30%, 40% or 50%, is established for each Integon Account with
respect to which a series of Shares is issued, outstanding and in good standing.

In return for the Company assuming risks retroceded to it by MIC under the
Retrocession Agreement, MIC will pay to the Company an amount equal to the
Retrocession Percentage multiplied by the gross premiums MIC receives with
respect to the retroceded business, after cancellations reduced by (i) a ceding
commission of 26.5% of such premiums, reduced by the amount of certain service
fees paid to MIC, (ii) any related agents' and brokers' commissions, and (iii)
any U.S. premium excise taxes imposed on such premiums. Net settlements between
the Company and MIC will be made quarterly and will fluctuate from quarter to
quarter.

The Retrocession Agreement provides that in the event that the Company redeems
or repurchases a series of Shares, no further risks will be retroceded to the
Company with respect to new or renewal Policies attributable to the Integon
Account related to the redeemed or repurchased Shares that become effective on
or after the effective date of redemption or repurchase. In addition, MIC will
recapture, as of that date, the business retroceded to the Company with respect
to the Integon Account related to such Shares. In consideration of that
recapture, the Company will pay a termination premium to MIC in an amount equal
to the unearned premiums and unpaid losses (discounted under applicable U.S. tax
rules) less deferred acquisition costs (the "Termination Premium") on the
recaptured business. This recapture will relieve the Company of any obligations
in respect of risks retroceded to the Company with respect to the Integon
Account related to the Shares before the date of the repurchase or redemption.

The Retrocession Agreement may be terminated as of the beginning of any month by
either party upon not less than 30 days written notice. Upon termination of the
Retrocession Agreement, no further risks will be retroceded to the Company with
respect to new or renewal Policies that become effective on or after the
effective date of termination, and MIC will recapture the retroceded business as
of that date. In consideration of that recapture, the Company will pay a
Termination Premium to MIC on the recaptured business. Termination of the
Retrocession Agreement will relieve the Company of any obligations in respect of
risks retroceded to the Company before the date that the Reinsurance Agreement
terminated.

Reallocation of Insurance Losses; Retention of Insurance Losses by MIC

The Company's Articles of Incorporation provide that losses the Company incurs
on the business the Company reinsures that are attributable to an Integon
Account will be allocated to the Subsidiary Capital Account for the Shares
issued with respect to that Integon Account and therefore will reduce the value
of such Shares. However, in certain situations, losses on the business will not
be allocated in this manner. Under the Company's Articles of Incorporation, to
the extent that the allocation of losses incurred under the Agreement would
result in a "Combined Ratio" for a Subsidiary Capital Account in excess of 108%
for any calendar year, such losses will be reallocated among the other
Subsidiary Capital Accounts ("Unrelated Accounts"), pro rata, based on relative
earned premium. The Combined Ratio for a Subsidiary Capital Account is equal to
the sum of losses incurred, commission expense, ceding fee and U.S. premium
excise taxes divided by earned premium, to the extent that such amounts are
attributable to the business allocated to the Subsidiary Capital Account. In the
event that the Combined Ratio for each Subsidiary Capital Account for each
series of Shares issued and outstanding is 108% after reallocation of losses,
any additional losses will be reallocated to the Subsidiary Capital Account for
the Common Stock. The Agreement provides that MIC will retain losses that would
otherwise be reallocated to an Unrelated Account pursuant to such reallocation
provisions to the extent that the reallocation of losses would increase the
Combined Ratio for the Unrelated Account for any calendar year by more than 5
percentage points.


                                       4

<PAGE>

Types of Risks Subject to Retrocession

Risks assumed under the Agreement are limited to insurance policies issued by
subsidiaries or affiliates of Integon and reinsured by MIC. These policies
provide liability, physical damage, and/or other types of insurance coverage
that a consumer may elect.

                                INVESTMENT INCOME

A major source of income to an insurance company is income earned on the
investment of amounts not currently required to meet losses or expenses. The
principal funds available for investment by the Company will come from
accumulated capital and the cumulative excess of premiums collected over losses
and operating expenses paid.

The Company's funds are invested in a manner consistent with investment
guidelines established by the Board of Directors of the Company (the "Board").
The Company is currently permitted to invest in U.S. Treasury and agency
securities, agency and non-agency mortgage-backed securities, obligations of
domestic and foreign corporations, asset-backed securities, municipal securities
and money market instruments. The Board reviews on a regular basis and, where
appropriate, revises the investment objectives and guidelines for management of
the Company's funds. There can be no assurance, however, as to whether a
particular investment objective, once adopted, can be achieved or that adverse
factors would not cause a decrease in the overall value of the Company's
investment portfolio.

Effective February 8, 2000, the Company entered into an investment management
agreement with BlackRock International, Ltd. ("BlackRock") pursuant to which
BlackRock manages the investment and reinvestment of the Company's fixed income
portfolio in accordance with the Company's investment guidelines. BlackRock is a
subsidiary of BlackRock, Inc. which had approximately $273 billion of assets
under management as of December 31, 2002. BlackRock, Inc. manages assets on
behalf of institutions and individuals through a variety of equity, fixed
income, liquidity and alternative investment, and mutual fund products. Under
the terms of the investment management agreement, BlackRock charges the Company
a management fee calculated as a percentage of the net asset value of the
Company's portfolio managed by BlackRock. The applicable percentage is based on
the aggregate amount of assets managed by BlackRock on behalf of the Company and
certain other related entities. The applicable percentage on the first $50
million of assets under management on behalf of the foregoing entities is higher
than the percentage that is applicable on assets in excess of $50 million.

                   ALLOCATIONS TO SUBSIDIARY CAPITAL ACCOUNTS

The Company has established a Subsidiary Capital Account with respect to the
Common Stock as a class, and will establish such an account with respect to each
series of Shares at the time a series is issued. Subsidiary Capital Accounts are
maintained solely for the purpose of the allocations described below, and do not
serve any other legal or accounting function. None of the Company's assets are
segregated or earmarked with respect to those accounts.

The consideration received by the Company upon the issuance of a particular
series of Shares and the Common Stock as a class, including any interest earned
on funds while held in the escrow account is allocated to the particular
Subsidiary Capital Account for that series or class. Except as otherwise set
forth below, items of income and expense, and losses, attributable to insurance
underwriting activities are determined and allocated to the Subsidiary Capital
Accounts as of the end of each quarter. Investment experience, and other items
of income and expense, gains and losses and distributions with respect to the
Shares and the Common Stock (collectively, "Capital Stock"), are determined and
allocated to the Subsidiary Capital Accounts as of the end of each quarter.

For purposes of the following discussion, items shall be "related" to the
Subsidiary Capital Account for the series identified with the Integon Account to
which such items can be attributed.

(1)  Allocations with respect to underwriting activities are made as follows:

     (a)  With respect to premiums ceded to the Company, 100% to the related
          Subsidiary Capital Account.


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<PAGE>

     (b)  With respect to any agents' or brokers' commissions, ceding fees and
          commissions, commissions recaptured, unearned premiums, reinsurance
          premiums ceded, and any United States excise tax, 100% to the related
          Subsidiary Capital Account.

     (c)  With respect to losses incurred and any amount of losses recovered
          through salvage, subrogation, reinsurance recoveries, reimbursement or
          otherwise, 100% to the related Subsidiary Capital Account.

     (d)  With respect to return premiums, 100% to the related Subsidiary
          Capital Account.

     (e)  With respect to any recapture premium or termination premium paid by
          the Company to MIC upon partial or complete termination of the
          Retrocession Agreement, and with respect to any fees, expenses, or
          losses recaptured in connection with such termination, 100% shall be
          allocated to the related Subsidiary Capital Account.

     (f)  Notwithstanding the foregoing, for any calendar year for which a
          Subsidiary Capital Account has any earned premium, the amount of
          losses incurred on the business retroceded to the Company under the
          Retrocession Agreement (the "Business") which losses would otherwise
          be allocable to the Subsidiary Capital Account in accordance with the
          preceding paragraphs for such calendar year shall be allocated, or
          reallocated, to other Subsidiary Capital Accounts in accordance with
          the terms of this paragraph so as to prevent the Combined Ratio for
          such Subsidiary Capital Account for such year from exceeding 108%. Any
          losses incurred on the Business that would otherwise be allocable to a
          Subsidiary Capital Account for a calendar year and would result in a
          Combined Ratio for such Subsidiary Capital Account in excess of 108%
          shall be allocated to other Subsidiary Capital Accounts, pro rata,
          based upon the relative earned premiums of each Subsidiary Capital
          Account for the calendar year; provided, however, that only those
          Subsidiary Capital Accounts for Shares that each have a Combined Ratio
          of less than 108% for the year without regard to this paragraph will
          be taken into account for this purpose. If, as a result of an
          allocation of losses incurred on the Business as described in the
          preceding sentence, a Combined Ratio in excess of 108% otherwise would
          be created in one or more Subsidiary Capital Accounts, then the losses
          incurred on the Business above a 108% Combined Ratio will be
          reallocated in the manner provided in the preceding sentence until all
          losses incurred on the Business for the year have been allocated to
          Subsidiary Capital Accounts for the Shares or until each Subsidiary
          Capital Account for the Shares has a Combined Ratio for the year of
          108%. In the event that the Combined Ratio of each Subsidiary Capital
          for the Shares is 108% after the application of the preceding
          sentences of this paragraph, the losses incurred on the Business for
          the calendar year above a Combined Ratio of 108% will be allocated to
          the Subsidiary Capital Account for the Common Stock. No adjustments
          will be made to the Subsidiary Capital Accounts rendered for prior
          quarters during the calendar year to reflect any allocation of losses
          required pursuant to this provision, and any such allocation shall be
          taken into account solely through entries to the Subsidiary Capital
          Accounts for the final quarter of the calendar year. All allocations
          and reallocations pursuant to this paragraph shall be made without
          giving effect to any allocations made pursuant to paragraph (g).

     (g)  With respect to any recovery or offset for losses retained by MIC
          pursuant to the terms of the Retrocession Agreement, 100% shall be
          allocated to the related Subsidiary Capital Account.

(2)  Any expenses or liabilities attributable to the Company's day-to-day
     operations, excluding any United States Federal income taxes, are allocated
     among all Subsidiary Capital Accounts for the Shares pro rata in accordance
     with the relative earned premiums allocated to those accounts for the
     fiscal quarter in which the expense or liability is incurred, provided that
     for purposes of such allocation, series of Shares issued at any time during
     the twelve calendar months preceding the end of the fiscal quarter in which
     the expense or liability is incurred and series with respect to which the
     unearned premium is zero as of such fiscal quarter end, shall be excluded.
     The allocations set forth here will not be made for a period of up to
     twelve months after the Company first issues Shares because Integon has
     agreed to bear all of the expenses identified in this paragraph for the
     period from the date that Shares are first issued (the "Issue Date") until
     the last day of the Company's fiscal quarter that immediately precedes the
     twelve month anniversary of the Issue Date.


                                       6
<PAGE>

(3)  Any United States Federal income tax liability (and any interest thereon or
     any penalties related thereto) is allocated among the Subsidiary Capital
     Accounts based upon the relative contribution of each of those accounts to
     the Company's taxable income upon which the tax (or any interest or
     penalties) is imposed.

(4)  Any expenses or liabilities attributable to the sale and issuance of
     Shares, including but not limited to the costs of compliance with
     regulations and requirements of the U.S. Securities and Exchange Commission
     and state securities laws (but not including ongoing periodic reporting
     costs), are allocated to the Subsidiary Capital Account for the Common
     Stock; however, Integon may undertake to pay such expenses.

(5)  Any of the Company's expenses or liabilities not allocable in the manner
     described in paragraphs 2 through 4 above are allocated among the
     Subsidiary Capital Accounts on the basis of the relative amount of capital
     and surplus attributable to those accounts as of the end of the quarter
     preceding the date on which the expense or liability is incurred, provided
     that for purposes of such allocation, Subsidiary Capital Accounts with
     balances that are less than zero as of the end of the preceding quarter
     shall be excluded.

(6)

     (a)  Investment income, net of any direct investment expense, is allocated
          among the Subsidiary Capital Accounts, pro rata, based upon the
          relative Investment Asset Balance (as defined in subparagraph (b)
          below), provided that for purposes of such allocation, Subsidiary
          Capital Accounts with Investment Asset Balances that are less than
          zero shall be excluded. For purposes of these allocations, net
          investment income includes realized (but not unrealized) gains and
          losses.

     (b)  The Investment Asset Balance of each Subsidiary Capital Account is
          equal to the sum of the beginning cash balance in a Subsidiary Capital
          Account and the ending cash balance (excluding allocation of any
          investment income for the quarter then ending) in such account for a
          quarter divided by two. The cash balance in a Subsidiary Capital
          Account is equal to the sum of the loss reserves, unearned premium
          reserves and capital and surplus less deferred expenses.

(7)

     (a)  Dividends, payments upon redemption or liquidation (described below),
          and any other distributions with respect to the Capital Stock are
          allocated to the Subsidiary Capital Account for the class or series
          with respect to which the dividend, payment or distribution was made.

     (b)  Where all Shares of a series are redeemed in accordance with our
          procedures for redemption, any deficit in the Subsidiary Capital
          Account for that series is allocated first to the Subsidiary Capital
          Account for the Common Shares and then, any remaining unallocated
          deficit is allocated among the Subsidiary Capital Accounts for Shares
          with positive balances, pro rata, based upon such balances.

     (c)  Where all Shares of a series are repurchased by the Company pursuant
          to its right of first refusal or redeemed in accordance with our
          procedures for redemption, the Subsidiary Capital Account for that
          series is terminated and the business previously allocated to the
          Subsidiary Capital Account is recaptured by MIC pursuant to the terms
          of the Retrocession Agreement.

(8)  The Company's Articles of Incorporation also provide that if the Company is
     liquidated, any deficit existing in any Subsidiary Capital Account is
     allocated first to the Subsidiary Capital Account for the Common Stock and
     then, any remaining unallocated deficit is allocated among the Subsidiary
     Capital Accounts for Shares with positive balances, pro rata, based upon
     such balances.

The allocations of income and expense, gains and losses, and distributions
described above are subject to approval by the Company's Board, and when finally
so approved are considered final and conclusive and will be binding on all
holders of Shares for all purposes including without limitation any redemption
of Shares pursuant to our procedures for redemption.


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<PAGE>

The Company's Board is authorized to interpret and apply the above allocation
provisions and to adopt additional rules and guidelines as the Board deems
appropriate to carry out the intent of these provisions. The Board's
interpretations and any additional rules and guidelines adopted will also be
binding on all shareholders.

Barbados insurance law requires that the Company maintain certain levels of net
assets, which for this purpose are calculated without taking into account
unrealized gains or losses. The Company is currently in compliance with these
requirements. However, in the event that the Company is unable to comply with
such requirements in the future, it has the right to reduce the business related
to a Subsidiary Capital Account by retrocession or any other means to the extent
necessary to permit the Subsidiary Capital Account to meet its pro rata share of
the Company's required capital and surplus.

                                    EMPLOYEES

The Company does not have any full-time employees. Rather, the Company relies on
Aon Insurance Managers (Barbados) Ltd. (the "Manager") to handle its day-to-day
operations. (See "Business of the Company-- Insurance Management Agreement,"
below.) In addition, corporate secretarial services for the Company are provided
by Colybrand Company Services Limited of St. Michael, Barbados. The Company's
Board and the committees thereof, however, remain responsible for the management
of the business and affairs of the Company.

                                   COMPETITION

The business of insuring automobile and motorcycle risks is highly competitive,
with many companies seeking to underwrite automobile and motorcycle insurance.
All of the Company's business is currently derived from its retrocession
agreement with MIC. Under this agreement, the Company reinsures insurance
policies issued by subsidiaries and affiliates of Integon. Accordingly, the
volume of the Company's business is dependent on the ability of those companies
to market insurance products. Integon, through its subsidiaries and affiliates,
competes with both large national writers and smaller regional companies in each
state in which they operate. Some of these competitors have, from time to time,
decreased prices in order to gain market share.

                         INSURANCE MANAGEMENT AGREEMENT

The Company has entered into an Insurance Management Agreement (the "Management
Agreement") with the Manager, pursuant to which the Manager collects and
disburses funds on behalf of the Company, provides accounting, clerical,
telephone, facsimile, information management and other services for the Company,
and advises and consults with the Company in regard to all aspects of the
Company's retrocession activities. The current Management Agreement is for a
continuous term subject to termination by either party upon 90 days advance
written notice.

Pursuant to the Management Agreement, the Manager has undertaken to maintain an
office in Barbados to perform its duties. Further, during the term of the
Management Agreement and for a period of one year thereafter, the Manager has
agreed not to provide management or accounting services for any other company
which, by the nature of its operations, is offering, insuring or reinsuring
automobile insurance policies on a multi-state basis in the United States. Under
the terms of the Management Agreement, the Company is to pay the Manager a fixed
annual fee plus a monthly variable fee based on the number of outstanding series
of Shares at each calendar month end. The Company and the Manager agreed that
until the Company became operational, the Company would pay the Manager on an
hourly basis for services performed on behalf of the Company. For the year ended
December 31, 2002, the Company incurred fees payable to the Manager in the
amount of $30,404.

The Manager is responsible for the payment of the salaries of its officers and
employees and all office and staff overhead and other costs attributable to the
services it provides on the Company's behalf. However, out-of-pocket expenses,
such as telephone, facsimile, postage, courier delivery, travel and other items
are borne by the Company on an expense reimbursement basis.

The Manager performs services similar to those performed for the Company for
several other entities. The Manager has thirteen employees. In addition, the
Manager may draw upon the resources of its affiliates as needed to provide


                                       8
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the services contemplated under the Management Agreement. No employee of the
Manager devotes all of his or her time to the business of the Company. However,
the Manager is obligated to devote all employee time necessary to ensure the
performance of the Manager's duties under the Management Agreement. The Manager
is subject to the control and direction of the Company's Board.

The Manager was incorporated in Barbados in 1984, and is an affiliate of the Aon
Group of Companies ("Aon"), an international insurance brokerage and insurance
consulting firm. Aon, through its subsidiaries, offers and insures motor vehicle
mechanical service agreements, extended warranty and related coverages with
respect to vehicles sold by automobile dealerships in the United States. Under
the terms of the Management Agreement, the Manager will treat all information
concerning the business of the Company as confidential and will not disclose
such information to Aon or any Aon affiliate without consent of the Company.

                          BARBADOS REGULATION AND TAXES

The Company's business is subject to regulation under the Barbados Exempt
Insurance Act, 1983, as amended (the "Exempt Insurance Act"). The principal
requirements of the Exempt Insurance Act require the Company to maintain its
principal office in Barbados, appoint various professional advisors, and to meet
certain capitalization and annual reporting requirements with respect to its
operating activities and solvency requirements.

Under the Exempt Insurance Act, no income tax, capital gains tax or other direct
tax or impost is levied in Barbados on the results of the Company's operations
(except as noted below), or on transfers of securities or assets of the Company
to any person who is not a resident of Barbados. The Company has received a
guarantee from the Minister of Finance of Barbados that such benefits and
exemptions will be available until at least December 31, 2029. Until December
31, 2014 the Company will be required to pay an annual licensing fee, which is
currently $2,500, to obtain such guarantee. Thereafter, the Company will be
subject to tax at a rate of 2% on its taxable income provided that the amount of
such tax will not exceed $2,500 per annum.

                  FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS

During the last three fiscal years, we have depended entirely on revenue from
sources located in the United States.

ITEM 2. PROPERTIES

The Company does not own any office space or facilities. Rather, the business
office for the Company is provided by the Manager and is located at One
Financial Place, Collymore Rock, St. Michael, Barbados. The Company believes
that these facilities are adequate for its current and anticipated future needs.
In addition, the Manager supplies all equipment for the Company.

ITEM 3. LEGAL PROCEEDINGS

The Company is not currently involved in any legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders during the quarter
ended December 31, 2002.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a)  There is no public market for the Shares or the shares of the Capital Stock
     of the Company, and none is expected to develop. Transfer of the Shares is
     restricted by the terms of a Stock Purchase Agreement and requires approval
     by the Supervisor of Insurance in Barbados.


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<PAGE>

(b)  All of the Common Stock of the Company is held by Integon. As of March 15,
     2003, 600 Shares had been issued, with 6 holders of Shares, representing 6
     series of Shares.

(c)  Under the Articles of Incorporation, the holders of Shares are entitled to
     receive minimum dividends equal to their pro-rata share of 20% of net
     income attributable to their associated Subsidiary Capital Account provided
     (i) the Company meets the Barbados regulatory requirements without regard
     to any letter of credit or guarantee, and (ii) the related Subsidiary
     Capital Account would also meet those requirements after giving effect to
     the dividend. As of March 15, 2003, the Company has not declared any
     dividends.

(d)  In determining the amount of dividends to pay, the Board considers the
     minimum regulatory capital requirement, fluctuations in the value of the
     Company's investment portfolio and adverse development of loss experience
     to determine an appropriate minimum capital level. The Board's objective is
     to maintain adequate capital to provide capacity for growth in premium so
     that dividends may be paid annually. There can be no assurance that any
     dividends will be paid in the future.

ITEM 6. SELECTED FINANCIAL DATA

The following selected financial data for the years ended December 31, 2002 and
December 31, 2001, and the period from March 20, 2000 (date of incorporation) to
December 31, 2000 have been derived from the Company's audited financial
statements.


                                      December 31,
                        ---------------------------------------------
                        2002             2001              2000
Interest                $     9,357      $    32,595      $    43,667
                        -----------      -----------      -----------
Net Income              $    23,409      $    32,595      $    43,667
                        ===========      ===========      ===========
Total Assets            $ 1,722,546      $ 1,076,262      $ 1,043,667
Shareholders' Equity      1,249,671        1,076,262        1,043,667
Dividends Paid                    0                0                0


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Critical Accounting Policies

The Company's financial statements have been prepared in accordance with
accounting principles generally accepted in the United States ("GAAP"). The
preparation of our financial statements in conformity with GAAP requires us to
make estimates and assumptions that affect the amounts of assets and liabilities
and disclosures of assets and liabilities reported by us at the date of the
financial statements and the revenues and expenses reported during the reporting
period. As additional information becomes available or actual amounts become
determinable, the recorded estimates may be revised and reflected in operating
results. Actual results could differ from those estimates. Accounts that, in our
judgment, are most critical to the preparation of our financial statements
include policy liabilities and accruals, deferred policy acquisition costs,
valuation of certain investments and deferred taxes.

The liability for losses and loss expenses represents the accumulation of
estimates for reported losses and a provision for losses incurred but not
reported. For purposes of establishing loss reserves, the Company relies upon
the advice of Integon. Loss reserve projections are used to estimate loss
reporting patterns, loss payment patterns and ultimate claim costs. An inherent
assumption in such projections is that historical patterns can be used to


                                       10
<PAGE>

predict future patterns with reasonable accuracy. Because many variables can
affect past and future loss patterns, the effect of changes in such variables on
the results of loss projections must be carefully evaluated. The evaluation of
these factors involves complex, subjective judgments, which may significantly
impact the financial statements. Insurance liabilities are, therefore,
necessarily based on estimates, and the ultimate liability may vary from such
estimates. Establishing reserves is an uncertain process, and it is possible
that actual claims will materially exceed reserves and have a material adverse
effect on our results of operations and financial condition. These estimates are
regularly reviewed by management and adjustments to such estimates are included
in income on a current basis.

Insurance premiums are earned over the terms of the policies. The portion of
premiums written applicable to the unexpired term of policies is recorded as
unearned premiums.

Commissions paid to independent agents writing policies are deferred and
amortized over the term of the related policies on the same basis as premiums
are earned.

The Company provides for unsettled, reported losses based on estimates of the
final settlement, with an experience factor added to provide for losses
incurred, but not reported. The final settlement may be greater or lesser than
the amounts provided. Any such differences when they become known are recognised
in current operations and can potentially be significant to the financial
statements.

The Company has received an undertaking from the Barbados Government exempting
it from all local income, profits and gains taxes for a period of fifteen (15)
years from the date of incorporation. Thereafter, for a further fifteen (15)
years, the Company will be subject to tax at a rate of 2% on its taxable income,
but the amount of such tax will not exceed $2,500 per annum.

Liquidity

The Company was incorporated on March 20, 2000 and commenced operations on
August 1, 2002. The Company's liquidity requirements are related to payment of
insurance losses, administrative expenses, and dividends. Premiums generated by
the Company's reinsurance business, combined with investment earnings plus
proceeds from the sale of the Company's Shares, are its principal sources of
funds. The Company believes that such funds will be sufficient to meet its
liquidity requirements in 2003 and in future years to which its reinsurance
liabilities will extend. No significant capital expenditures are expected during
the next few years.

The Company had unearned premium reserves of $398,793 as of December 31, 2002,
compared to $0 as of December 31, 2001. Unearned premium amounts are
attributable to the difference in timing between premiums assumed and premiums
earned. Premiums are earned over the term of a policy, usually six or twelve
months. The increase in unearned premiums reserves reflects that we commenced
our reinsurance operations on August 1, 2002.

Capital Resources

The Company's capitalization on December 31, 2002, 2001, and 2000 consisted of
paid-in capital with respect to the Common Stock of $1,000,000, and earnings
retained for use in its business in the amount of $99,671 and $76,262 and
43,667, respectively. The Company's capitalization also includes paid-in capital
with respect to the Participating Shares of $$150,000 (compared with $0 as of
December 31, 2001 and 2000). The increase in the amount of pain-in capital with
respect to the Participating Shares is attributable to the issuance of six
series of Participating Shares. Barbados insurance law requires that the Company
maintain a minimum capitalization of $125,000 and, in addition, that the
recorded value of the Company's assets exceed its liabilities by: (a) $125,000
where the Company's earned premium in the preceding financial year did not
exceed $750,000; (b) an amount equal to 20% of the Company's earned premium for
the preceding financial year, where such income exceeded $750,000 but did not
exceed $5,000,000; and (c) an amount equal to the aggregate of $1,000,000 and
10% of the amount by which the Company's earned premium for the preceding
financial year exceeded $5,000,000. If the Company's net assets are less than
mandated by Barbados law, the Company has the right to reduce the business
related to a Subsidiary Capital Account by retrocession or any other means to
the extent necessary to permit the Subsidiary Capital Account to meet its pro
rata share of the Company's required capital and surplus. Currently, the
Company's net assets are not less than the amount mandated by Barbados law.


                                       11
<PAGE>

Results of Operation

For the year ended December 31, 2002, the Company had net income of $23,409,
down from $32,595 in 2001. The decrease in net income is attributable to reduced
investment income due to lower interest rates prevailing during the year ended
December 31, 2002 compared to the prior period, partially offset by underwriting
gains. During 2002, the first year of the Company's reinsurance operations, the
Company earned premiums of $213,536, incurred losses of $121,624, and incurred
other expenses of $77,859 for an underwriting gain of $14,052. The incurred loss
ratio for the year was 57%. Total premiums assumed by the Company were $612,329.

Under the terms of the Stock Purchase Agreement between Integon Corporation and
the Company, Integon has agreed to bear (i) all organizational expenses and
liabilities of the Company, (ii) expenses attributable to the registration of
the Shares and initial compliance with federal and state securities and
insurance laws, and (iii) all operational expenses and liabilities attributable
to the Company's day-to day operations for the first year after Shares are first
issued. As of December 31, 2002, the total amount of such expenses borne by
Integon has totaled $681,092.

Reserves for Unpaid Losses

Loss reserves are balance sheet liabilities representing estimates of amounts
needed in the future to pay claims under Policies with respect to insured events
which have occurred as of the balance sheet dates.

For purposes of establishing loss reserves, the Company relies upon the advice
of Integon. Loss reserves are established after periodic actuarial reviews,
based on historical claim experience, industry statistics and other factors.
Consequently, the determination of loss reserves is an estimate and a process
inherently subject to a number of highly variable factors. Consequently,
ultimate losses could exceed loss reserves and cause us to have to adjust our
loss reserves. Any adjustments to reserves are reflected in the operating
results for the periods in which they become known.

The Company's incurred loss ratios (losses incurred as a percentage of net
premium earned) on all business for the year ended December 31, 2002 was 57%. At
December 31, 2002, the reserves for unpaid losses was $74,082.

Recently Issued Accounting Standards

SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities", issued in July 2002, addresses financial accounting and reporting
for costs associated with exit or disposal activities and nullifies EITF Issue
No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." The principal difference between Statement 146 and Issue 94-3
relates to Statement 146's requirements for recognition of a liability for a
cost associated with an exit or disposal activity. Statement 146 requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred. Under Issue 94-3, a liability for an exit costs
as generally defined in Issue 94-3 was recognized at the date of an entity's
commitment to an exit plan. Therefore, this Statement eliminates the definition
and requirements for recognition of exit costs in Issue 94-3. This Statement
also established that fair value is the objective for initial measurement of the
liability. The provisions of this Statement are effective for exit or disposal
activities that are initiated after December 31, 2002, with early application
encouraged. The adoption of this statement did not have a material impact on our
results of operations or financial position.

FASB Interpretation No. 45, "Guarantor Accounting," will significantly change
current practice in the accounting for, and disclosure of, guarantees. Most
guarantees are to be recognized and initially measured at fair value, which is a
change from current practice. In addition, guarantors will be required to make
significant new disclosures, even when the likelihood of the guarantor making
payments under the guarantee is remote. In general, the Interpretation applies
to contracts or indemnification agreements that contingently require the
guarantor to make payments to the guaranteed party based on changes in an
underlying that is related to an asset, liability, or an equity security of the
guaranteed party. The Interpretation's disclosure requirements are effective for
financial statements of interim or annual periods ending after December 15,
2002, while the initial recognition and initial measurement provisions are
applicable on a prospective basis to guarantees issued or modified after
December 31, 2002. The adoption of this statement did not have a material impact
on our results of operations or financial position.


                                       12
<PAGE>

ITEM 7A.       QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

As of December 31, 2002, all of the Company's assets were in the form of U.S.
dollar cash deposits and accordingly, the Company's exposure to risk of loss
from changes in exchange rates, interest rates or equity prices was not
material.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                                              Page

1.   Independent Auditors' Report                              14

2.   Balance Sheets, December 31, 2002 and 2001                15

3.   Statements of Operations and Retained
     Earnings for the years ended December
     31, 2002, 2001 and 2000                                   16

4.   Statement of Changes in Stockholders'
     Equity for the years ended December
     31, 2002, 2001 and 2000                                   17

5.   Statements of Cash Flows for the years
     ended December 31, 2002, 2001 and
     2000                                                      18

6.   Notes to Financial Statements                             19


                                       13
<PAGE>


                          INDEPENDENT AUDITORS' REPORT



To the Shareholders of
INTEGON RE (BARBADOS), LIMITED
One Financial Place
Collymore Rock
St. Michael, Barbados

We have audited the accompanying balance sheets of Integon Re (Barbados),
Limited (the "Company") as of December 31, 2002 and 2001 and the related
statements of operations and retained earnings, changes in shareholders' equity
and cash flows for each of the two years in the period ended December 31, 2002
and for the period March 20, 2000 (commencement of operations) to December 31,
2000.  These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance that the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, these financial statements present fairly, in all material
respects, the financial position of Integon Re (Barbados), Limited as of
December 31, 2002 and 2001 and the results of its operations, changes in
shareholders' equity and cash flows for each of the two years in the period
ended December 31, 2002 and for the period March 20, 2000 (commencement of
operations) to December 31, 2000 in conformity with accounting principles
generally accepted in the United States of America.




                                                CHARTERED ACCOUNTANTS


Deloitte & Touche LLP
Bridgetown, Barbados
March 4, 2003


                                       14
<PAGE>


                         INTEGON RE (BARBADOS), LIMITED

                                 BALANCE SHEETS

                           DECEMBER 31, 2002 AND 2001

                      (Expressed in United States dollars)


<TABLE>
<CAPTION>
                                                        Note       2002          2001
                                                        ----       ----          ----
ASSETS
------
<S>                                                     <C>      <C>           <C>
    Cash and cash equivalents                                    $1,261,920    $1,012,372
    Due from shareholder (Note 3)                        3           97,784        63,804
    Due from Motors Insurance Corporation (Note 3)       3          221,477             -
    Deferred acquisition costs                                      140,982             -
    Accrued interest                                                    383            86
                                                                 ----------    ----------
    Total assets                                                  1,722,546     1,076,262
                                                                 ==========    ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

    LIABILITIES
    Unearned premium                                     4          398,793             -
    Reserves for unpaid losses                           5           74,082             -
                                                                 ----------    ----------
                                                                    472,875             -
                                                                 ----------    ----------

    STOCKHOLDERS' EQUITY
     Share capital                                       6
       Common shares - no par value;
       Authorized - an unlimited number of shares;
         Issued and outstanding 1,000,000 shares at
           December 31, 2002 and 2001                             1,000,000     1,000,000
     Participating shares - no par value;
     Authorized - 30,000 shares
     Issued and Outstanding - no shares at
     December 31, 2001 and 600 at December 31, 2002                 150,000             -
                                                                 ----------    ----------
                                                                  1,150,000     1,000,000
     Retained earnings                                               99,671        76,262
                                                                 ----------    ----------
                                                                  1,249,671     1,076,262
                                                                 ----------    ----------
     Total Shareholder's Equity                                  $1,722,546    $1,076,262
                                                                 ==========    ==========
</TABLE>

See accompanying notes to the financial statements.

                                            APPROVED ON BEHALF OF THE BOARD



                                                /s/ Peter R. P. Evelyn
                                                ----------------------
                                                         Director


                                       15
<PAGE>

                         INTEGON RE (BARBADOS), LIMITED

                 STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

                FOR THE YEARS ENDED DECEMBER 31, 2002, 2001, AND

           FOR THE PERIOD MARCH 20, 2000 (COMMENCEMENT OF OPERATIONS)

                              TO DECEMBER 31, 2000

                      (Expressed in United States dollars)


                                                 2002       2001         2000
                                                 ----       ----         ----
INCOME
Reinsurance premiums assumed                   $612,329    $      -    $     -
Increase in unearned premiums                  (398,793)          -          -
                                              ----------  ----------  ---------
Premiums earned                                 213,536           -          -
                                              ----------  ----------  ---------

Investment income                                 9,357      32,595     43,667
                                              ----------  ----------  ---------

TOTAL INCOME                                    222,892      32,595     43,667
                                              ----------  ----------  ---------

EXPENSES
   Acquisition and other underwriting            77,859           -          -
   Losses                                       121,624           -          -
                                              ----------  ----------  ---------
                                                199,483           -          -
                                              ----------  ----------  ---------

NET INCOME for the year/period                   23,409      32,595     43,667

RETAINED EARNINGS, beginning of year/period      76,262      43,667          -
                                              ----------  ----------  ---------

RETAINED EARNINGS, end of year/period           $99,671     $76,262    $43,667
                                              ==========  ==========  =========


See accompanying notes to the financial statements.


                                       16
<PAGE>



                         INTEGON RE (BARBADOS), LIMITED

                  STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

                 FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND

           FOR THE PERIOD MARCH 20, 2000 (COMMENCEMENT OF OPERATIONS)

                              TO DECEMBER 31, 2000

                      (Expressed in United States dollars)


                                 Total
                             Shareholders'  Retained     Common    Participating
                                 Equity     Earnings     Shares        Shares
                             -------------  ---------  ----------  -------------
BALANCE,
  at December 31, 2000         $1,043,667    $43,667   $1,000,000    $      -

Net income for the year            32,595     32,595            -           -
                               ----------   ---------  ----------    ---------

BALANCE,
  at December 31, 2001          1,076,262     76,262    1,000,000           -

Participating shares issued       150,000          -            -     150,000

Net Income for the year            23,409     23,409            -           -
                               ----------   ---------  ----------    ---------

BALANCE,
  at December 31, 2002         $1,249,671    $99,671   $1,000,000    $150,000
                               ==========   =========  ==========    =========


See accompanying notes to the financial statements.


                                       17
<PAGE>


                         INTEGON RE (BARBADOS), LIMITED

                            STATEMENTS OF CASH FLOWS

                 FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND

           FOR THE PERIOD MARCH 20, 2000 (COMMENCEMENT OF OPERATIONS)

                              TO DECEMBER 31, 2000

                      (Expressed in United States dollars)



<TABLE>
<CAPTION>
                                                           2002          2001           2000
                                                           ----          ----           ----
<S>                                                    <C>           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Reinsurance premiums collected                      $   124,469   $ -            $        -
   Interest income received                                  9,059       32,999         43,177
   Expenses paid and recoverable                           (33,980)     (26,128)       (37,676)
                                                       ------------  -----------    -----------
   Net cash provided by operating activities                99,548        6,871          5,501
                                                       ------------  -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common shares                                        -            -      1,000,000
Issuance of participating shares                           150,000            -              -
                                                       ------------  -----------    -----------
Net cash received from financing activities                150,000            -      1,000,000
                                                       ------------  -----------    -----------

INCREASE IN CASH AND CASH EQUIVALENTS                      249,548        6,871      1,005,501

CASH AND CASH EQUIVALENTS,
beginning of year/period                                 1,015,372    1,005,501              -
                                                       ------------  -----------    -----------

CASH AND CASH EQUIVALENTS, end of year/period          $ 1,264,920   $1,012,372     $1,005,501
                                                       ============  ===========    ===========

RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:

Net income                                                 $23,409      $32,595        $43,667
Changes in:
Accrued interest                                              (296)         404           (490)
Due from shareholder                                       (33,980)     (26,128)       (37,676)
Due from Motors Insurance Corporation                     (221,477)           -              -
Deferred acquisition costs                                (140,982)           -              -
Unearned premiums                                          398,793            -              -
Reserves for unpaid losses                                  74,082            -              -
                                                       ------------  -----------    -----------

NET CASH PROVIDED BY
OPERATING ACTIVITIES                                   $    99,549   $    6,871     $    5,501
                                                       ============  ===========    ===========
</TABLE>


See accompanying notes to the financial statements.



                                       18
<PAGE>

                         INTEGON RE (BARBADOS), LIMITED

                        NOTES TO THE FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND

           FOR THE PERIOD MARCH 20, 2000 (COMMENCEMENT OF OPERATIONS)

                              TO DECEMBER 31, 2000

                      (Expressed in United States dollars)


Note 1.   NATURE OF BUSINESS

          The Company was incorporated on January 10, 2000 under the Laws of
          Barbados and is licensed under the Barbados Exempt Insurance Act. The
          Company's principal activity is the assumption of risks with respect
          to property and casualty insurance policies (primarily automobile and
          motorcycle) sold to consumers in the United States through independent
          insurance agencies. The policies are reinsured by Motors Insurance
          Corporation (MIC) and attributable to MIC subsidiary accounts in
          respect of which shares of participating stock are issued and
          outstanding. All premiums received were assumed by MIC. The Company
          commenced its reinsurance operations in the third quarter ending
          September 30, 2002.

          All of the common shares of the Company are owned by Integon
          Corporation (Integon). Integon is an indirect wholly-owned subsidiary
          of General Motors Corporation.

Note 2.   SIGNIFICANT ACCOUNTING POLICIES

          Basis of Presentation

          These financial statements are stated in United States dollars and
          prepared in conformity with accounting principles generally accepted
          in the United States of America.

          Revenue and Income Recognition

          Insurance premiums are earned over the terms of the policies. The
          portion of premiums written applicable to the unexpired terms of
          policies is recorded as unearned premiums.

          Deferred Acquisition Costs

          Commissions paid to independent agents writing policies are deferred
          and amortized over the terms of the related policies on the same basis
          as premiums are earned.

          Use of Estimates

          The preparation of financial statements requires management to make
          estimates and assumptions that affect the reported amounts of assets
          and liabilities and disclosure of contingent assets and liabilities at
          the date of the financial statements and the reported amounts of
          revenues and expenses during the reporting period. Actual results
          could differ from these estimates.


                                       19
<PAGE>


                         INTEGON RE (BARBADOS), LIMITED

                        NOTES TO THE FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND

           FOR THE PERIOD MARCH 20, 2000 (COMMENCEMENT OF OPERATIONS)

                              TO DECEMBER 31, 2000

                      (Expressed in United States dollars)

          Reserves for Unpaid Losses

          The Company provides for unsettled, reported losses based on estimates
          of the final settlement, with an experience factor added to provide
          for losses incurred, but not reported. The final settlement may be
          greater or lesser than the amounts provided. Any such differences when
          they become known are recognised in current operations and can
          potentially be significant to the financial statements.

          Taxation

          The Company has received an undertaking from the Barbados Government
          exempting it from all local income, profits and gains taxes for a
          period of fifteen (15) years from the date of incorporation.
          Thereafter, for a further fifteen (15) years, the Company will be
          subject to tax at a rate of 2% on its taxable income, but the amount
          of such tax will not exceed $2,500 per annum.

Note 3.   RELATED PARTY TRANSACTIONS

          Total costs incurred on the formation of the Company and other
          operating expenses were paid by Integon Corporation and totaled
          $681,092 (2002 - $176,224, 2001-$104,493 and 2000-$400,375). The
          Company is not obligated to repay these amounts to Integon
          Corporation. The amount due from Motor Insurance Corporation relates
          to premiums ceded to the Company.

Note 4.   UNEARNED PREMIUMS

Activity in the unearned premiums is summarized below:

                                                      2002          2001
                                                      ----          ----

             Balance at January 1,                $     -         $     -
             Assumed premiums                        612,328            -
             Revenue earned                         (213,535)           -
                                                  -----------     ---------

             Balance at December 31,                $398,793      $     -
                                                  ===========     =========


                                       20
<PAGE>

                         INTEGON RE (BARBADOS), LIMITED

                        NOTES TO THE FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND

           FOR THE PERIOD MARCH 20, 2000 (COMMENCEMENT OF OPERATIONS)

                              TO DECEMBER 31, 2000

                      (Expressed in United States dollars)

Note 5.   RESERVES FOR UNPAID LOSSES

          The following table sets forth an analysis of changes in the reserves
          for unpaid losses for the years ended December 31, 2002 and 2001.

                                                              2002     2001

           Beginning balance of reserves for losses         $  -      $     -
                                                            --------  -------

           Add provision for losses incurred related to:
              Current claim year                             121,624        -
                                                            --------  -------
           Total                                             121,624        -
                                                            --------  -------
           Deduct paid losses attributable to:
              Current claim year                              47,842        -
                                                            --------  -------
           Ending balance in reserves for losses             $74,082  $     -
                                                            ========  =======

Note 6.   SHAREHOLDERS' CAPITAL

          All of the common shares of the Company are owned by Integon
          Corporation (Integon).

          The Company is authorized to issue an unlimited number of shares of
          one class without par value to be designated common shares and 30,000
          shares of one class without par value to be designated participating
          shares. During 2002, the Company issued 600 shares to six individuals
          for $150,000.

          During the year 2002, the Company issued six series of 100
          Participating Shares each for aggregate consideration of $150,000 as
          compared to nil for the year ended December 31, 2001.

          The holder of the common shares shall be entitled to elect five
          directors of the Company, one of whom must be a resident citizen in
          Barbados. The holders of the participating shares shall be entitled to
          elect one director of the Company.

Note 7.   SIGNIFICANT AGREEMENTS

          Retrocession Agreement

          Motors Insurance Corporation (MIC) and the Company are related
          parties. All of the common shares of the Company are owned by Integon.
          Integon and MIC are both wholly owned subsidiaries of GMAC Insurance
          Holdings, Inc., which is a wholly owned subsidiary of General Motors
          Acceptance Corporation (GMAC).

          Under the Retrocession Agreement, MIC retrocedes to the Company, a
          portion (the "Retrocession Percentage") of MIC's risk in respect of
          certain property and casualty insurance policies that are reinsured by
          MIC. The amount of the Company's liability for any loss paid on a
          policy is equal to the Retrocession Percentage multiplied by the
          amount of the loss. The Retrocession Percentage, which can


                                       21
<PAGE>

                         INTEGON RE (BARBADOS), LIMITED

                        NOTES TO THE FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND

           FOR THE PERIOD MARCH 20, 2000 (COMMENCEMENT OF OPERATIONS)

                              TO DECEMBER 31, 2000

                      (Expressed in United States dollars)

          be either 20%, 30%, 40% or 50%, is established for each Integon
          account with respect to which a series of participating shares are
          issued, outstanding and in good standing. In return for the Company
          assuming the risk retroceded to the Company by MIC under the
          Retrocession Agreement, MIC pays the Company an amount equal to the
          Retrocession Percentage multiplied by the gross premiums MIC receives
          with respect to the retroceded business, after cancellations, reduced
          by:

               (i)   a ceding commission which is equal to the amount of such
                     premiums multiplied by 26.5%, reduced by the amount of
                     certain service fees paid to MIC;

               (ii)  any related agents' or brokers' commissions; and

               (iii) any U.S. premium excise tax imposed on such premiums.

          The Retrocession Agreement may be terminated as of the beginning of
          any month by either party upon not less than 30 days written notice.

          Generally, liquidation of the Company requires approval by at least
          75% of the participating shares issued and outstanding.

          The Company believes that the Retrocession Agreement contains terms
          that are no less favorable to the Company than would be obtained in an
          arms-length transaction. The Retrocession Agreement provides that
          business will be ceded to the company by MIC on a proportional basis
          subject to a ceding commission of 26.5% which the Company believes is
          commercially reasonable.

          The components of the ceding fee are the following:

               (iv)  3.5% for premium taxes;

               (v)   11.9% for loss adjustment expenses;

               (vi)  10.0% for other operating expenses;

               (vii) 1.1% for cash flow adjustments.

          Investment Management Agreement

          The Company has entered into an investment management agreement with
          BlackRock International, Ltd. ("BlackRock"). The management agreement
          provides that BlackRock will charge a management fee calculated as a
          percentage of the net asset value of the Company's portfolio managed
          by BlackRock with the applicable percentage based on the aggregate
          amount of assets managed by BlackRock on behalf of the Company and
          certain other related entities. The applicable percentage is tiered on
          the first $50 million of aggregate assets under management and lower
          on all assets in excess of $50 million.

          Insurance Management Agreement

          The Company has entered into an Insurance Management Agreement (the
          "Management Agreement") with Aon Insurance Managers (Barbados) Ltd.
          (the "Manager").


                                       22
<PAGE>


                         INTEGON RE (BARBADOS), LIMITED

                        NOTES TO THE FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND

           FOR THE PERIOD MARCH 20, 2000 (COMMENCEMENT OF OPERATIONS)

                              TO DECEMBER 31, 2000

                      (Expressed in United States dollars)

Note 7.   SIGNIFICANT AGREEMENTS (CONTINUED)

          Under the Management Agreement, the Manager collects and disburses
          funds on the Company's behalf, provides accounting, clerical,
          telephone, facsimile, information management and other services for
          the Company and advises and consults with the Company about all
          aspects of the Company's reinsurance activities. Under the terms of
          the Management Agreement, the Company will pay the Manager a fixed
          annual fee of $70,000 and a variable monthly fee of approximately $44
          per series of Shares outstanding. The Manager is responsible for the
          payment of the salaries of its officers and employees and all office
          and staff overhead and other costs attributable to its services on the
          Company's behalf. However, the Company will pay all out-of-pocket
          expenses, such as telephone, facsimile, postage, travel and other
          items on an expense reimbursement basis. The Management Agreement may
          be terminated by either party upon 90 days advance written notice.


                                       23
<PAGE>

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE.

None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following is a list of our current officers and directors:

<TABLE>
<CAPTION>
                                                            POSITION WITH US (AND OTHER
          NAME                   AGE                     EMPLOYMENT DURING PAST FIVE YEARS)
<S>                              <C>       <C>
Gary Y. Kusumi.................   56       Chairman and Chief Executive Officer, President and Director
                                           (Director, Integon, March 1998; President Windsor Insurance,
                                           1996-1998; President Leader National Insurance, 1993-1996).

Bernard J. Buselmeier..........   47       Vice-President and Director (Executive Vice-President and Chief
                                           Financial Officer, Integon, April 1998; Vice-President and
                                           Treasurer, MIC, 1993-1998, Treasurer, MIC 1989-1993).

Kenneth J. Jakubowski..........   46       Vice-President and Director (Vice-President, Integon, May 1997;
                                           Assistant Treasurer, Alexander & Alexander 1992-1997).

Peter R. P. Evelyn.............   61       Director (Attorney, Evelyn, Gittens & Farmer, a Barbados law firm,
                                           1987).

Ronald W. Jones................   50       Vice-President, Finance (Managing Director, Aon Insurance Managers
                                           (Barbados) Ltd. (previously Alexander Insurance Managers), 1987).

Michael R. Boyce...............   63       Secretary (Principal, Colybrand Company Services, Limited, Barbados,
                                           1993; previously principal, Price Waterhouse, Eastern Caribbean).

Mitchell F. White..............   36       Director (Vice President and Chief Marketing Officer, Integon,
                                           October 1999; Vice President, Atlanta Casualty Group 1996-1999).
</TABLE>

The directors and officers named above will serve in those capacities until the
annual meeting of shareholders scheduled for May 2003. Prior to such meeting,
the directors named above may, but are not obligated to, select an


                                       24
<PAGE>

additional director from among the holders of Shares. Thereafter, all directors
will serve until the annual meeting of shareholders following their election.

ITEM 11.  EXECUTIVE COMPENSATION

No director or officer of the Company is compensated directly for services as
such. However, each director and officer of the Company is reimbursed for
expenses incurred for attendance at Board, committee, and shareholder meetings.
In addition, Mr. Jones is an officer of the Manager. The Manager receives
management fees and compensation for financial and administrative services that
it provides to the Company. Mr. Evelyn is a member of the law firm of Evelyn,
Gittens & Farmer, which serves as the Company's Barbados counsel; and Mr. Boyce
is affiliated with Colybrand Company Services Limited, St. Michael, Barbados,
which receives compensation for corporate secretarial services provided to the
Company.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Certain Beneficial Owners

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
                     Name And Address Of         Amount And Nature Of
   Title Of Class     Beneficial Owner           Beneficial Ownership      Percent Of Class
---------------------------------------------------------------------------------------------

<S>                   <C>                          <C>                           <C>
Common Stock          Integon Corporation          1,000,000 shares              100%
                      500 West Fifth Street
                      Winston-Salem, NC  27152
---------------------------------------------------------------------------------------------
</TABLE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See ITEM 1, THE RETROCESSION, INSURANCE MANAGEMENT AGREEMENT and ITEM 11,
EXECUTIVE COMPENSATION.

ITEM 14.  CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures designed to ensure that
information required to be disclosed in reports filed under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the specified time periods. In designing and evaluating the
disclosure controls and procedures, management recognizes that any controls and
procedures, no matter how well designed and executed, can provide only
reasonable assurance of achieving the desired control objectives. Within the 90
days prior to the date of this report, the Company's Chief Executive Officer and
Chief Financial Officer evaluated, with the participation of the Company's
management, the effectiveness of the Company's disclosure controls and
procedures. Based on that evaluation, which disclosed no significant
deficiencies or material weakness, the Company's Chief Executive Officer and
Chief Financial Officer concluded that he Company's disclosure controls and
procedures are effective. There were no significant changes in the Company's
internal controls or in other factors that could significantly affect internal
controls subsequent to the evaluation.


                                       25
<PAGE>

                                     PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

          (a)  Index to Document List

               (1)   Financial Statements

                     The following are included in Item 8:

                     (i)   Independent Auditors' Report.

                     (ii)  Balance Sheets, December 31, 2002 and 2001.

                     (iii) Statements of Income and Retained Earnings for the
                           years ended December 31, 2002 and December 31, 2001
                           and the period from March 20, 2000 to December 31,
                           2000.

                     (iv)  Statements of Cash Flows for the years ended December
                           31, 2002 and December 31, 2001 and the period March
                           20, 2000 to December 31, 2000.

                     (v)   Statement of Changes in Shareholders' Equity for the
                           years ended December 31, 2002 and December 31, 2001
                           and the period from March 20, 2000 to December 31,
                           2000.

                     (vi)  Notes to Financial Statements.

               (2)   Financial Statement Schedules. Schedules are omitted
                     because of the absence of the conditions under which they
                     are required or because the information required is
                     presented in the financial statements or related notes.

               (3)   Exhibits. The following exhibits are included in response
                     to Item 15(c):

               3(a)  Articles of Incorporation.*

               3(b)  By-Laws.

               4     Instruments defining rights of security holders. See
                     Exhibits 3(a), 3(b) and 10(c).

               10(a) Retrocession Agreement between Motors Insurance Corporation
                     and Registrant.*

               10(c) Specimen Stock Purchase Agreement.*


                                       26
<PAGE>

               10(d) Stock Purchase Agreement between Registrant and Integon
                     Corporation.*

               10(e) Insurance Management Agreement between Registrant and Aon
                     Insurance Managers (Barbados) Ltd.*

               10(f) Investment Management Agreement between Registrant and
                     BlackRock International, Ltd.*

               99(a) Certification of Gary Y. Kusumi pursuant to Section 906 of
                     the Sarbanes-Oxley Act of 2002.

               99(b) Certification of Ronald W. Jones pursuant to Section 906 of
                     the Sarbanes-Oxley Act of 2002.

               99(c) Guarantee issued by the Minister of Finance of Barbados.

               *     Previously filed as an exhibit to the Registrant's
                     Registration Statement on Form S-1, File No. 333-34088.

          (b)  Reports on Form 8-K. No reports on Form 8-K for the quarter ended
               December 31, 2002 have been filed.


                                       27
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

                                       INTEGON RE (Barbados), LIMITED
                                                (Registrant)

                                         By:  /s/Ronald W. Jones
                                              ----------------------------
                                              Ronald W. Jones
                                              Vice-President, Finance
                                         Date:  March 31, 2003


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated.

Signature                  Title                                  Date
---------                  -----                                  ----
/s/Gary Y. Kusumi          Chairman, Chief Executive Officer,     March 31, 2003
-------------------------  President and Director
  Gary Y.  Kusumi

                           Executive Vice-President and Director
-------------------------
  Bernard J. Buselmeier

/s/Kenneth J. Jakubowski   Vice-President and Director            March 31, 2003
-------------------------
  Kenneth J. Jakubowski

/s/Peter R. P. Evelyn      Director                               March 31, 2003
-------------------------
  Peter R. P. Evelyn

/s/Ronald W. Jones         Vice-President Finance, Principal      March 31, 2003
-------------------------- Financial and Accounting Officer
  Ronald W. Jones

/s/Mitchell F. White       Director                               March 31, 2003
--------------------------
  Mitchell F. White


<PAGE>


         SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, BY THE
REGISTRANT WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

         No annual report with respect to 2001 was distributed to shareholders.
No proxy solicitation materials were sent to shareholders prior to the filing of
this report. The Registrant does not intend to send an annual report with
respect to 2002 to shareholders and the Registrant has not sent proxy
solicitation materials with respect to the Registrant's annual meeting to be
held May 19, 2003, as of the filing of this report.


<PAGE>


                                 CERTIFICATIONS


I, Gary Y. Kusumi, Chief Executive Officer of Integon Re (Barbados), Limited,
certify that:

1.   I have reviewed this annual report on Form 10-K of Integon Re (Barbados),
     Limited;

2.   Based on my knowledge, this annual 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 annual 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 annual 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 we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidate subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual 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 annual report out 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 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
     annual report whether or not 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 correction actions with regard to significant deficiencies and material
     weaknesses.

Date:  March 31, 2003                         /s/Gary Y. Kusumi
                                              ------------------------------
                                              Gary Y. Kusumi
                                              Chairman, Chief Executive Officer,
                                              President and Director


<PAGE>

     I, Ronald W. Jones, Principal Financial Officer of Integon Re (Barbados),
     Limited, certify that:

1.   I have reviewed this annual report on Form 10-K of Integon Re (Barbados),
     Limited;

2.   Based on my knowledge, this annual 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 annual 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 annual 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 we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidate subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual 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 annual report out 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 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
     annual report whether or not 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 correction actions with regard to significant deficiencies and material
     weaknesses.

Date: March 31, 2003                     /s/Ronald W. Jones
                                         -----------------------------
                                         Ronald W. Jones
                                         Vice President, Finance and
                                         Principal Financial Officer