##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 1-11238.
 NYMAGIC, INC.
  New York
    
    13-3534162(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)919 Third Avenue, New York, NY
    
    10022(Address of principal executive offices)
    
    (Zip Code)
  Securities registered pursuant to Section 12(b) of the Act:
 Title of each class:
    
    Name of each exchange on which registered:Common Stock, $1.00 par value
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act:
 Yes o No þ
 Yes o No þ
 þ o
 o
  Large Accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller
reporting company)
    
    Smaller reporting company o
 o þ
 MARKET VALUE
  OUTSTANDING STOCK
  DOCUMENTS INCORPORATED BY REFERENCE




---



##### 



NYMAGIC, INC.
 PAGEPART IForward-looking Statements
    
    iiItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    33Item 1B. Unresolved Staff Comments
    
    
    39Item 2. Properties
    
    
    39Item 3. Legal Proceedings
    
    
    39Item 4. Submission of Matters to a Vote of Security Holders
    
    
    39PART IIItem 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    40Item 6. Selected Financial Data
    
    
    42Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    43Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    62Item 8. Financial Statements and Supplementary Data
    
    
    64Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    64Item 9A. Controls and Procedures
    
    
    64Item 9B. Other Information
    
    
    64PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    65Item 11. Executive Compensation
    
    
    65Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    65Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    65Item 14. Principal Accounting Fees and Services
    
    
    65PART IVItem 15. Exhibits, Financial Statement Schedules
    
    
    66Signatures
    
    
    71Index to Consolidated Financial Statements
    
    
    F-1Exhibit 10.68Exhibit 10.69Exhibit 10.70Exhibit 10.71Exhibit 10.72Exhibit 21.1Exhibit 23.1Exhibit 23.2Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   i




---



##### Table of Contents



FORWARD  LOOKING STATEMENTS
   ii




---



##### Table of Contents



Part I
 
 Item 1. Business General
  Insurance Companies and Lloyds Corporate Capital Vehicle:
  Insurance Underwriters and Managers:
  Investment Interests:
     The Pools
   1




---



##### Table of Contents



Segments
   Ocean marine insurance
 Hull and Machinery Insurance
 Hull and Machinery War Risk Insurance
 Cargo Insurance
 Cargo War Risk Insurance
 Protection and Indemnity
  2




---



##### Table of Contents



Charters Legal Liability
 Shoreline Marine Liability Exposures
 Marine Contractors Liability
 Maritime Employers Liability (Jones Act)
 Marine Umbrella (Bumbershoot) Liability
 Onshore and Offshore Oil and Gas Exploration and Production Exposures
 Energy Umbrella (Bumbershoot) Liability
 Petroleum and Bulk Liquid Cargo
 Inland marine/Fire insurance
 Contractors Equipment
 Motor Truck Cargo
 Transit Floaters
 Commercial Property
 Surety
  Non-marine liability insurance
  Accountants Professional Liability
 Lawyers Professional Liability
 Miscellaneous Professional Errors & Omissions
  Contractors Liability
 Commercial and Habitational Liability
 Products Liability
  Excess Workers Compensation
 Commercial Automobile
 Employment Practices Liability
  3




---



##### Table of Contents



Aircraft insurance
  NYMAGIC Gross Premiums Written
    
    Year ended December 31,By Segment
    
    2008
    
    
    2007
    
    
    2006(Dollars in thousands)Ocean marine
    
    $
    82,751
    
    
    
    38
    %
    
    $
    98,689
    
    
    
    43
    %
    
    $
    104,876
    
    
    
    43
    %Inland marine/Fire
    
    
    16,128
    
    
    
    7
    %
    
    
    18,625
    
    
    
    8
    %
    
    
    21,595
    
    
    
    9
    %Other liability
    
    
    118,378
    
    
    
    55
    %
    
    
    110,986
    
    
    
    49
    %
    
    
    114,754
    
    
    
    48
    %Subtotal
    
    
    217,257
    
    
    
    100
    %
    
    
    228,300
    
    
    
    100
    %
    
    
    241,225
    
    
    
    100
    %Run off lines (Aircraft)
    
    
    (3
    )
    
    
    
    
    
    
    88
    
    
    
    
    
    
    
    84
    
    
    
    Total
    
    $
    217,254
    
    
    
    100
    %
    
    $
    228,388
    
    
    
    100
    %
    
    $
    241,309
    
    
    
    100
    %
 NYMAGIC Net Premiums Written
    
    Year ended December 31,By Segment
    
    2008
    
    
    2007
    
    
    2006(Dollars in thousands)Ocean marine
    
    $
    59,200
    
    
    
    36
    %
    
    $
    68,192
    
    
    
    41
    %
    
    $
    75,243
    
    
    
    49
    %Inland marine/Fire
    
    
    4,538
    
    
    
    3
    %
    
    
    6,935
    
    
    
    4
    %
    
    
    7,097
    
    
    
    4
    %Other liability
    
    
    101,424
    
    
    
    61
    %
    
    
    92,618
    
    
    
    55
    %
    
    
    72,231
    
    
    
    47
    %Subtotal
    
    
    165,162
    
    
    
    100
    %
    
    
    167,745
    
    
    
    100
    %
    
    
    154,571
    
    
    
    100
    %Run off lines (Aircraft)
    
    
    222
    
    
    
    
    
    
    
    108
    
    
    
    
    
    
    
    289
    
    
    
    Total
    
    $
    165,384
    
    
    
    100
    %
    
    $
    167,853
    
    
    
    100
    %
    
    $
    154,860
    
    
    
    100
    %
 Reinsurance Ceded
     4




---



##### Table of Contents



5




---



##### Table of Contents



Reinsurer
    
    Amounts
    
    
    A.M. Best Rating(In millions)Lloyds Syndicates (1)
    
    $
    57.2
    
    
    A (Excellent)Swiss Reinsurance America Corporation
    
    
    15.0
    
    
    A (Excellent)Transatlantic Reinsurance Company
    
    
    7.9
    
    
    A (Excellent)Platinum Underwriters Reinsurance Company
    
    
    7.3
    
    
    A (Excellent)FM Global (Arkwright)
    
    
    4.3
    
    
    A+ (Superior)XL Reinsurance America Inc.
    
    
    4.2
    
    
    A (Excellent)Munich Reinsurance America
    
    
    4.0
    
    
    A+ (Superior)White Mountains Reinsurance Company of
America
    
    
    3.9
    
    
    A- (Excellent)General Reinsurance Corporation
    
    
    3.8
    
    
    A++ (Superior)Liberty Mutual Insurance Company
    
    
    3.7
    
    
    A (Excellent)Berkley Insurance Company
    
    
    2.9
    
    
    A+ (Superior)Allianz Global Corporate & Specialty
    
    
    2.4
    
    
    A+ (Superior)Everest Reinsurance
    
    
    2.0
    
    
    A+ (Superior)Total
    
    $
    118.6
 (1)
    
    Lloyds maintains a trust fund, which was established for the benefit of all United States
ceding companies. Lloyds receivables represent amounts due from approximately 100 different
Lloyds syndicates.     6




---



##### Table of Contents



1.
    
    As of December 31, 2008 and 2007, the Company reported total ceded
reinsurance payable of $23.8 million and $27.1 million, respectively.2.
    
    As of December 31, 2008 and 2007, the Company reported total
reinsurance receivables on paid losses of $28.4 million and $38.8
million, respectively.3.
    
    As of December 31, 2008 and 2007, the Company reported total
reinsurance receivables on unpaid losses of $213.9 million and $250.1
million, respectively.4.
    
    As of December 31, 2008 and 2007, the Company reported prepaid
reinsurance premiums of $19.2 million and $21.7 million, respectively.
     1.
    
    For the years ended December 31, 2008, 2007 and 2006 the Company
reported total ceded premiums earned of $54.4 million, $68.4 million
and $79.1 million, respectively.2.
    
    For the years ended December 31, 2008, 2007 and 2006 the Company
reported ceded incurred losses and loss adjustment expenses of $27.0
million, $31.1 million and $63.3 million, respectively.
    1.
    
    The Company made reinsurance premium payments of $55.1 million, $78.3
million and $77.4 million for the years ended December 31, 2008, 2007
and 2006, respectively.2.
    
    The Company received reinsurance collections on paid losses of $65.8
million, $75.9 million and $57.2 million for the years ended December
31, 2008, 2007 and 2006, respectively.
  7




---



##### Table of Contents



Reserves
          8




---



##### Table of Contents



9




---



##### Table of Contents



Net Loss Retention:
  Shock Losses:
    Loss Reporting Tail:
   Frequency of Losses:
   10




---



##### Table of Contents



Loss Estimates:
    Catastrophe Losses:
   Uncertainty in Reserve Estimates
      11




---



##### Table of Contents



Gross
    
    
    Net(In thousands)Ocean marine
    
    $
    169,478
    
    
    $
    101,830Inland marine/Fire
    
    
    21,057
    
    
    
    8,971Other liability
    
    
    239,026
    
    
    
    197,658Aircraft
    
    
    119,189
    
    
    
    26,384Total
    
    $
    548,750
    
    
    $
    334,843
      12




---



##### Table of Contents



Asbestos and Environmental Reserves
       Year ended December 31,2008
    
    
    2007
    
    
    2006(In thousands)Asbestos/EnvironmentalNet unpaid losses and loss adjustment expenses (including IBNR) at
the beginning of the period
    
    $
    10,864
    
    
    $
    12,222
    
    
    $
    12,960Net incurred losses and loss adjustment expenses
    
    
    3,200
    
    
    
    (43
    )
    
    
    576Net paid loss settlements
    
    
    (2,212
    )
    
    
    (766
    )
    
    
    (945
    )Net loss adjustment expenses payments (cost of administering claims)
    
    
    (317
    )
    
    
    (549
    )
    
    
    (369
    )Net unpaid losses and loss adjustment expenses (including IBNR) at
end of period
    
    $
    11,535
    
    
    $
    10,864
    
    
    $
    12,222
  13




---



##### Table of Contents



Year ended December 31,2008
    
    
    2007
    
    
    2006Number of claims pending at beginning of period
    
    
    384
    
    
    
    401
    
    
    
    469Number of claims reported
    
    
    88
    
    
    
    74
    
    
    
    80Number of claims settled/dismissed or otherwise resolved
    
    
    (105
    )
    
    
    (91
    )
    
    
    (148
    )Number of claims pending at end of period
    
    
    367
    
    
    
    384
    
    
    
    401
  Other Reserves
  Loss Reserve Table
        14




---



##### Table of Contents



15




---



##### Table of Contents



Year ended December 31,1998
    
    
    1999
    
    
    2000
    
    
    2001
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008(Dollars in thousands)Estimated Liability for
Net Unpaid Losses and
Loss Adjustment Expenses
    
    
    213,589
    
    
    
    196,865
    
    
    
    199,685
    
    
    
    210,953
    
    
    
    208,979
    
    
    
    242,311
    
    
    
    255,479
    
    
    
    289,217
    
    
    
    292,941
    
    
    
    306,405
    
    
    
    334,843Cumulative Amount of Net
Losses and Loss Adjustment
Expenses Paid as a
Percentage of Original
Estimate:1 Year Later
    
    
    20
    %
    
    
    24
    %
    
    
    28
    %
    
    
    30
    %
    
    
    8
    %
    
    
    18
    %
    
    
    17
    %
    
    
    25
    %
    
    
    22
    %
    
    
    23
    %2 Years Later
    
    
    35
    %
    
    
    39
    %
    
    
    56
    %
    
    
    30
    %
    
    
    24
    %
    
    
    27
    %
    
    
    33
    %
    
    
    38
    %
    
    
    40
    %3 Years Later
    
    
    43
    %
    
    
    53
    %
    
    
    64
    %
    
    
    41
    %
    
    
    32
    %
    
    
    38
    %
    
    
    45
    %
    
    
    53
    %4 Years Later
    
    
    51
    %
    
    
    58
    %
    
    
    70
    %
    
    
    47
    %
    
    
    43
    %
    
    
    49
    %
    
    
    57
    %5 Years Later
    
    
    55
    %
    
    
    63
    %
    
    
    72
    %
    
    
    55
    %
    
    
    53
    %
    
    
    61
    %6 Years Later
    
    
    59
    %
    
    
    64
    %
    
    
    79
    %
    
    
    62
    %
    
    
    65
    %7 Years Later
    
    
    60
    %
    
    
    70
    %
    
    
    84
    %
    
    
    73
    %8 Years Later
    
    
    65
    %
    
    
    74
    %
    
    
    93
    %9 Years Later
    
    
    68
    %
    
    
    82
    %10 Years Later
    
    
    75
    %Net Liability Re-estimated
including Cumulative Net
Paid Losses and Loss
Adjustment Expenses as a
Percentage of Original
Estimate:1 Year Later
    
    
    94
    %
    
    
    96
    %
    
    
    105
    %
    
    
    102
    %
    
    
    99
    %
    
    
    94
    %
    
    
    95
    %
    
    
    97
    %
    
    
    95
    %
    
    
    101
    %2 Years Later
    
    
    87
    %
    
    
    94
    %
    
    
    108
    %
    
    
    101
    %
    
    
    94
    %
    
    
    89
    %
    
    
    90
    %
    
    
    91
    %
    
    
    96
    %3 Years Later
    
    
    84
    %
    
    
    95
    %
    
    
    104
    %
    
    
    96
    %
    
    
    90
    %
    
    
    86
    %
    
    
    88
    %
    
    
    94
    %4 Years Later
    
    
    85
    %
    
    
    91
    %
    
    
    103
    %
    
    
    94
    %
    
    
    88
    %
    
    
    86
    %
    
    
    94
    %5 Years Later
    
    
    82
    %
    
    
    92
    %
    
    
    102
    %
    
    
    92
    %
    
    
    90
    %
    
    
    94
    %6 Years Later
    
    
    83
    %
    
    
    90
    %
    
    
    102
    %
    
    
    94
    %
    
    
    100
    %7 Years Later
    
    
    82
    %
    
    
    90
    %
    
    
    103
    %
    
    
    104
    %8 Years Later
    
    
    82
    %
    
    
    91
    %
    
    
    114
    %9 Years Later
    
    
    82
    %
    
    
    101
    %10 Years Later
    
    
    91
    %Net Cumulative Redundancy
(Deficiency)
    
    
    19,304
    
    
    
    (1,753
    )
    
    
    (27,050
    )
    
    
    (7,748
    )
    
    
    17
    
    
    
    14,841
    
    
    
    15,423
    
    
    
    16,814
    
    
    
    13,045
    
    
    
    (2,683
    )Gross Unpaid Losses and
Loss Adjustment Expenses
    
    
    401,584
    
    
    
    425,469
    
    
    
    411,267
    
    
    
    534,189
    
    
    
    516,002
    
    
    
    518,930
    
    
    
    503,261
    
    
    
    588,865
    
    
    
    579,179
    
    
    
    556,535
    
    
    
    548,750Reinsurance Recoverable
on Unpaid Losses and Loss
Adjustment Expenses
    
    
    187,995
    
    
    
    228,604
    
    
    
    211,582
    
    
    
    323,236
    
    
    
    307,023
    
    
    
    276,619
    
    
    
    247,782
    
    
    
    299,648
    
    
    
    286,238
    
    
    
    250,130
    
    
    
    213,907Reserve Re-estimated Gross
    
    
    467,711
    
    
    
    481,504
    
    
    
    492,667
    
    
    
    591,467
    
    
    
    524,751
    
    
    
    499,950
    
    
    
    482,702
    
    
    
    600,690
    
    
    
    554,917
    
    
    
    549,380Reserve Re-estimated
Reinsurance Recoverable
    
    
    273,426
    
    
    
    282,886
    
    
    
    265,932
    
    
    
    372,766
    
    
    
    315,789
    
    
    
    272,480
    
    
    
    242,646
    
    
    
    328,287
    
    
    
    275,021
    
    
    
    240,291Gross Cumulative
Redundancy/(Deficiency)
    
    
    (66,127
    )
    
    
    (56,035
    )
    
    
    (81,400
    )
    
    
    (57,278
    )
    
    
    (8,749
    )
    
    
    18,979
    
    
    
    20,559
    
    
    
    (11,825
    )
    
    
    24,261
    
    
    
    7,155
   16




---



##### Table of Contents



Year ended December 31,2008
    
    
    2007
    
    
    2006(In thousands)Net liability for losses and loss adjustment expenses at beginning of year
    
    $
    306,405
    
    
    $
    292,941
    
    
    $
    289,217Provision for losses and loss adjustment expenses occurring in current year
    
    
    107,275
    
    
    
    103,664
    
    
    
    93,803Increase (decrease) in estimated losses and loss adjustment expenses for
claims occurring in prior years (1)
    
    
    2,683
    
    
    
    (13,820
    )
    
    
    (7,667
    )Net loss and loss adjustment expenses incurred
    
    
    109,958
    
    
    
    89,844
    
    
    
    86,136Less:Losses and loss adjustment expense payments for claims occurring during:Current year
    
    
    9,887
    
    
    
    12,136
    
    
    
    9,641Prior years
    
    
    71,633
    
    
    
    64,244
    
    
    
    72,77181,520
    
    
    
    76,380
    
    
    
    82,412Net liability for losses and loss adjustment expenses at end of year
    
    
    334,843
    
    
    
    306,405
    
    
    
    292,941Ceded unpaid losses and loss adjustment expenses at end of year
    
    
    213,907
    
    
    
    250,130
    
    
    
    286,238Gross unpaid losses and loss adjustment expenses at end of year
    
    $
    548,750
    
    
    $
    556,535
    
    
    $
    579,179
 
 (1)
    
    The adjustment to the consolidated liability for losses and loss
adjustment expenses for losses occurring in prior years reflects the
net effect of the resolution of losses for other than full reserve
value and subsequent readjustments of loss values.  17




---



##### Table of Contents



18




---



##### Table of Contents



Year ended December 31,2008
    
    
    2007
    
    
    2006(In thousands)Net liability for losses and loss adjustment expenses reported based on
statutory accounting principles
    
    $
    306,673
    
    
    $
    289,912
    
    
    $
    275,296Liability for losses and loss adjustment expenses assumed from two former
pool members (excludes $0, $3,370 and $3,379 at December 31, 2008, 2007 and
2006, accounted for in the statutory liability for losses and loss
adjustment expenses)
    
    
    13,014
    
    
    
    7,667
    
    
    
    9,438Other, net
    
    
    15,156
    
    
    
    8,826
    
    
    
    8,207Net liability for losses and loss adjustment expenses reported based on GAAP
    
    
    334,843
    
    
    
    306,405
    
    
    
    292,941Ceded liability for unpaid losses and loss adjustment expenses
    
    
    213,907
    
    
    
    250,130
    
    
    
    286,238Gross liability for unpaid losses and loss adjustment expenses
    
    $
    548,750
    
    
    $
    556,535
    
    
    $
    579,179
 Regulation
       19




---



##### Table of Contents



Year ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(Dollars in thousands)Net premiums written
    
    $
    165,384
    
    
    $
    167,853
    
    
    $
    154,860
    
    
    $
    133,892
    
    
    $
    137,128Policyholders surplus
    
    
    189,383
    
    
    
    207,233
    
    
    
    197,289
    
    
    
    186,848
    
    
    
    181,633Ratio
    
    
    .87 to 1
    
    
    
    .81 to 1
    
    
    
    .78 to 1
    
    
    
    .72 to 1
    
    
    
    .75 to 1
        20




---



##### Table of Contents



Investment Policy
   Liquidity Portfolio:
 Fixed Income Portfolio:
 Equity and Alternative Investments (Hedge Funds):
  21




---



##### Table of Contents



Liquidity Portfolio:
 Fixed Income Portfolio:
 Equity and Alternative Investments (Hedge Funds):
 Subsidiaries
    22




---



##### Table of Contents



Average
    
    
    
    
    
    
    
    
    
    AverageS&P
    
    
    
    
    
    
    
    
    
    S&PDecember 31, 2008
    
    
    Rating
    
    Percent
    
    
    December 31, 2007
    
    
    Rating
    
    PercentFixed maturities held to maturity (amortized
cost):Mortgage-backed securities
    
    $
    61,246,212
    
    
    AAA
    
    
    11.20
    %
    
    $
    
    
    
    
    
    
    Total fixed maturities held to maturity
    
    $
    61,246,212
    
    
    
    
    
    11.20
    %
    
    $
    
    
    
    
    
    
    Fixed maturities available for sale (fair value):U.S. Treasury securities
    
    $
    40,783,969
    
    
    AAA
    
    
    7.46
    %
    
    $
    14,335,541
    
    
    AAA
    
    
    2.04
    %Municipal obligations
    
    
    90,483,461
    
    
    AA+
    
    
    16.54
    %
    
    
    7,810,318
    
    
    A1
    
    
    1.11
    %Corporate securities
    
    
    13,710,996
    
    
    A+
    
    
    2.51
    %
    
    
    5,853,942
    
    
    BB+
    
    
    0.83
    %Mortgage-backed securities
    
    
    
    
    
    
    
    
    
    
    
    
    134,890,799
    
    
    AAA
    
    
    19.25
    %Total fixed maturities available for sale
    
    $
    144,978,426
    
    
    AAA
    
    
    26.51
    %
    
    $
    162,890,600
    
    
    AAA
    
    
    23.23
    %Fixed maturities trading (fair value):Municipal obligations
    
    $
    17,399,090
    
    
    AA+
    
    
    3.18
    %
    
    $
    70,243,560
    
    
    AA+
    
    
    10.02
    %Commercial middle market debt
    
    
    
    
    
    
    
    
    
    
    
    
    8,293,725
    
    
    B+
    
    
    1.18
    %Total fixed maturities trading
    
    $
    17,399,090
    
    
    AA+
    
    
    3.18
    %
    
    $
    78,537,285
    
    
    AA+
    
    
    11.20
    %Total fixed maturities
    
    $
    223,623,728
    
    
    AAA
    
    
    40.89
    %
    
    $
    241,427,885
    
    
    AA+
    
    
    34.43
    %Equity securities trading (fair value):Preferred stock
    
    $
    11,822,620
    
    
    A-
    
    
    2.16
    %
    
    $
    66,325,265
    
    
    AA-
    
    
    9.46
    %Total equity securities
    
    $
    11,822,620
    
    
    A-
    
    
    2.16
    %
    
    $
    66,325,265
    
    
    AA-
    
    
    9.46
    %Short-term investments (approximating fair value)
    
    
    110,249,779
    
    
    AAA
    
    
    20.16
    %
    
    
    165,000
    
    
    AAA
    
    
    0.02
    %Cash
    
    
    75,672,102
    
    
    
    
    
    13.83
    %
    
    
    204,913,343
    
    
    
    
    
    29.23
    %Total fixed maturities, equity securities, cash
and short-term investments
    
    $
    421,368,229
    
    
    
    
    
    77.04
    %
    
    $
    512,831,493
    
    
    
    
    
    73.14
    %Commercial loans (fair value)
    
    
    2,690,317
    
    
    B-
    
    
    0.49
    %
    
    
    
    
    
    
    
    
    Limited partnership hedge funds (equity)
    
    
    122,927,697
    
    
    
    
    
    22.47
    %
    
    
    188,295,547
    
    
    
    
    
    26.86
    %Total investment portfolio
    
    $
    546,986,243
    
    
    
    
    
    100.00
    %
    
    $
    701,127,040
    
    
    
    
    
    100.00
    %
  23




---



##### Table of Contents



Weighted
    
    
    AverageAverage
    
    
    FICO
    
    
    D60+
    
    
    CreditLoan to
    
    
    Credit
    
    
    Delinquency
    
    
    Support
    
    
    S&P
    
    
    MoodysSecurity description
    
    Issue date
    
    
    Amortized cost
    
    
    Fair value
    
    
    Value % (1)
    
    
    Score (2)
    
    
    Rate (3)
    
    
    Level (4)
    
    
    Rating
    
    
    RatingAHMA 2006-3
    
    
    7/2006
    
    
    $
    12,213,748
    
    
    $
    8,511,737
    
    
    
    85.9
    
    
    
    704
    
    
    
    31.6
    
    
    
    45.2
    
    
    AAA
    
    AaaCWALT 2005-69
    
    
    11/2005
    
    
    
    7,900,234
    
    
    
    6,051,403
    
    
    
    82.0
    
    
    
    697
    
    
    
    39.7
    
    
    
    49.4
    
    
    AAA
    
    AaaCWALT 2005-76
    
    
    12/2005
    
    
    
    7,865,446
    
    
    
    5,944,599
    
    
    
    82.8
    
    
    
    700
    
    
    
    41.5
    
    
    
    50.5
    
    
    AAA
    
    AaaRALI 2005-QO3
    
    
    10/2005
    
    
    
    7,921,593
    
    
    
    5,528,142
    
    
    
    82.1
    
    
    
    704
    
    
    
    35.3
    
    
    
    48.8
    
    
    AAA
    
    AaaWaMu 2005-AR17
    
    
    12/2005
    
    
    
    6,746,777
    
    
    
    4,639,000
    
    
    
    75.4
    
    
    
    714
    
    
    
    19.7
    
    
    
    47.2
    
    
    AAA
    
    AaaWaMu 2006-AR9
    
    
    7/2006
    
    
    
    9,170,145
    
    
    
    6,229,337
    
    
    
    75.8
    
    
    
    730
    
    
    
    21.4
    
    
    
    27.1
    
    
    AAA
    
    AaaWaMu 2006-AR13
    
    
    9/2006
    
    
    
    9,428,269
    
    
    
    5,425,214
    
    
    
    76.5
    
    
    
    728
    
    
    
    19.2
    
    
    
    27.8
    
    
    AAA
    
    Aaa$
    61,246,212
    
    
    $
    42,329,432
 
 (1)
    
    The dollar-weighted average amortized loan-to-original value of the underlying loans at February 25 2009.(2)
    
    Average FICO of remaining borrowers in the loan pool at February 25, 2009.(3)
    
    The sum of the percentage of loans that are grouped within the 60 days delinquent, 90 days delinquent, foreclosure and real
estate owned categories at February 25, 2009.(4)
    
    The current credit support provided by subordinate ranking tranches within the overall security structure at February 25, 2009.    24




---



##### Table of Contents



Relationship with Mariner Partners, Inc.
     25




---



##### Table of Contents



Voting Agreement
   
    
    Mark W. Blackman, a son of our founder and Louise B. Tollefson, is a
participating shareholder in his individual capacity. He was a member
of our Board of Directors from 1979 until May 2004 and served as our
President from 1988 to 1998. He has been our Chief Underwriting
Officer since June 2002 and our Executive Vice President since
September 2005. Mr. Blackman was re-appointed to our Board of
Directors on March 6, 2009.
    
    John N. Blackman, Jr., a son of our founder and Louise B. Tollefson,
acts as a participating shareholder in his dual capacity as
controlling member of Lionshead Investments LLC and co-trustee of the
Blackman Charitable Remainder Trust dated April 1, 2001. He was a
member of our Board of Directors from 1975 until May 2004 and served
as Chairman of the Board from 1988 to 1998.
    
    Robert G. Simses acts as a participating shareholder in his capacity
as sole trustee of the Louise B. Tollefson 2000 Florida Intangible Tax
Trust dated December 12, 2000 and the Louise B. Blackman Tollefson
Family Foundation dated March 24, 1998. We refer to these trusts and
foundations as the Tollefson trusts. The settlor of these trusts,
Louise B. Tollefson, is the former wife of our founder and was a
member of our Board of Directors from 1986 to 2001. Mr. Simses has
been a member of our Board of Directors since 2001 and has been
Chairman since 2008. He is also Managing Partner of the law firm of
Simses & Associates and President and Chief Operating Officer of The
William H. Pitt Foundation Inc. Mr. Simses serves on the board of
directors of Tiptree Financial, a limited partnership in which
Tricadia Capital, which is associated with Mariner, is the general
partner.
 Amendments to the Voting Agreement
    26




---



##### Table of Contents



Voting Rights of Mariner
  
    
    the merger or consolidation of NYMAGIC into or with another corporation;
    
    the sale by NYMAGIC of all or substantially all of its assets;
    
    the dissolution and/or liquidation of NYMAGIC; or
    
    any recapitalization or stock offering of NYMAGIC.
 Election of Directors
  Nomination of Directors
   27




---



##### Table of Contents




    
    Prior to the 2005 amendment and restatement of the voting agreement,
Mariner was entitled to nominate three candidates to the Board.
Following the amendment and restatement of the voting agreement,
Mariner is entitled to nominate four candidates for election to the
Board. The four current directors who were nominated by Mariner are
William J. Michaelcheck, George R. Trumbull, III, William D. Shaw,
Jr., who serves as our Vice Chairman and A. George Kallop, the
President and Chief Executive Officer of the Company.
    
    Prior to the 2005 amendment and restatement of the voting agreement,
each participating shareholder was entitled to nominate one candidate
to the Board. Following the 2005 amendment and restatement of the
voting agreement, each of Mark W. Blackman and Lionshead Investments,
LLC is entitled to nominate one candidate for election to the Board
and Robert G. Simses is entitled to nominate two candidates to the
Board, provided that the candidates nominated by Mark W. Blackman and
Lionshead Investments, LLC and one of the candidates nominated by Mr.
Simses shall qualify as independent directors under the rules of the
New York Stock Exchange and all other applicable laws and regulations.
The two current directors nominated by Mark W. Blackman and Lionshead
Investments, LLC are Glenn Angiolillo and John R. Anderson, and the
two current directors nominated by Robert G. Simses are Robert G.
Simses and Ronald J. Artinian.
    
    Prior to the 2005 amendment and restatement of the voting agreement,
our Chief Executive Officer was entitled to nominate three candidates
to the Board. Following the 2005 amendment and restatement of the
voting agreement, our Chief Executive Officer is entitled to nominate
three candidates for election to the Board, all of whom shall qualify
as independent directors under the rules of the New York Stock
Exchange and all other applicable laws and regulations. The three
current directors who were nominated by Mr. Kallop are David W. Young,
John T. Baily and David E. Hoffman.
  Termination Provisions
  
    
    December 31, 2010;
    
    the merger or consolidation of NYMAGIC into another corporation, the sale of all or
substantially all its assets or its dissolution and/or its liquidation;
    
    immediately upon the resignation of Mariner as an advisor to NYMAGIC, INC.; or
    
    upon written notice of such termination to Mariner from all of the participating shareholders.
  28




---



##### Table of Contents



Mariner Stock Option
  
    
    Mark W. Blackman
    
    225,000 shares
    
    Lionshead Investments, LLC
    
    225,000 shares
    
    Robert G. Simses, as trustee of the Tollefson trusts
    
    900,000 shares
    Transferability of the Option
  
    
    Mariner is permitted to assign the option, in whole or in part, to any
one or more of William J. Michaelcheck, William D. Shaw, Jr., George
R. Trumbull and A. George Kallop or any other individual employed by
or acting as a consultant for Mariner in connection with NYMAGIC.
    
    With the written consent of at least two participating shareholders,
Mariner or any assignee as described above is permitted to assign the
option, in whole or in part, to any one or more other persons.
  Consideration to Mariner
  Transferability of NYMAGIC Shares
   29




---



##### Table of Contents



Mariner Investment Management Arrangement
  
    
    the liquidity portfolio (cash management);
    
    the fixed-income portfolio (fixed-income investments); and,
    
    the hedge fund and equity portfolio (alternative investment vehicles and common and preferred equities).
       30




---



##### Table of Contents



Subsidiaries
         31




---



##### Table of Contents



Competition
     Employees
  Code of Conduct and Corporate Governance Documents
    Available Information
 Form 10-K.
  32




---



##### Table of Contents



Item 1A. Risk Factors.
  Our inability to assess underwriting risk accurately could reduce our net income.
  Exposure to catastrophe or severity losses in loss reserves.
  Decreases in rates or changes in terms for property and casualty insurance could reduce our net
income.
  If rating agencies downgrade their ratings of our insurance company subsidiaries, our future
prospects for growth and profitability could be significantly and adversely affected.
  Our reinsurers may not satisfy their obligations to us.
   33




---



##### Table of Contents



If we are unable to purchase reinsurance and transfer risk to reinsurers or if the cost of
reinsurance increases, our net income could be reduced or we could incur a loss.
  Our business is concentrated in ocean marine, excess and surplus lines property, casualty and
professional liability, and excess workers compensation lines of insurance, and if market
conditions change adversely or we experience large losses in these lines, it could have a material
adverse effect on our business.
  If we are not successful in developing our new specialty lines, we could experience losses.
  Our industry is highly competitive and we may not be able to compete successfully in the future.
     34




---



##### Table of Contents



We are dependent on our key personnel.
  If Mariner terminates its relationship with us, our business could be adversely affected.
  The value of our investment portfolio and the investment income we receive from that portfolio
could decline as a result of market fluctuations and economic conditions.
      35




---



##### Table of Contents



Our deferred tax asset may required additional valuation allowance.
   Insurance laws and regulations restrict our ability to operate.
    36




---



##### Table of Contents



Computer system risks.
  Failure to comply with insurance laws and regulations could have a material adverse effect on our
business.
  Our holding company structure involves significant risks.
  Because of the concentration of the ownership of, and the thin trading in, our common stock, you
may have difficulties in selling shares of our common stock.
  Trading in our common stock has the potential to be volatile.
    37




---



##### Table of Contents



Because part of our outstanding stock is subject to a voting agreement, our other shareholders have
limited ability to impact voting decisions.
  The voting agreement and the concentration of our stock ownership in the hands of a few
shareholders could impede a change of control and could make it more difficult to effect a change
in our management.
   38




---



##### Table of Contents



Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  
  
 Item 3. Legal Proceedings
   
 Item 4. Submission of Matters to a Vote of Security Holders
   39




---



##### Table of Contents



PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
  2008
    
    
    2007High
    
    
    Low
    
    
    High
    
    
    LowFirst Quarter
    
    $
    28.50
    
    
    $
    20.00
    
    
    $
    42.22
    
    
    $
    35.60Second Quarter
    
    
    24.49
    
    
    
    19.15
    
    
    
    44.95
    
    
    
    39.15Third Quarter
    
    
    29.35
    
    
    
    15.45
    
    
    
    42.02
    
    
    
    25.56Fourth Quarter
    
    
    26.95
    
    
    
    11.04
    
    
    
    31.59
    
    
    
    19.66
  Dividend Policy
  Stock Repurchase
   40




---



##### Table of Contents



Total Number
    
    
    Maximumof Shares
    
    
    Dollar Value ofAverage
    
    
    Purchased as
    
    
    Shares that mayTotal Number
    
    
    Price
    
    
    Part of Publicly
    
    
    yet be Purchasedof Shares
    
    
    Paid Per
    
    
    Announced
    
    
    Under thePeriod:
    
    Purchased
    
    
    Share
    
    
    Program
    
    
    Program (1) (2)January 1  January 31, 2008
    
    
    
    
    
    $
    
    
    
    
    February 1  February 29, 2008
    
    
    
    
    
    
    
    
    
    
    March 1  March 31, 2008
    
    
    20,300
    
    
    
    22.97
    
    
    
    20,300Total first quarter
    
    
    20,300
    
    
    $
    22.97
    
    
    
    20,300
    
    
    $
    19,331,884April 1  April 30, 2008
    
    
    29,900
    
    
    $
    22.73
    
    
    
    29,900May 1  May 31, 2008
    
    
    40,900
    
    
    
    22.19
    
    
    
    40,900June 1  June 30, 2008
    
    
    137,100
    
    
    
    21.04
    
    
    
    137,100Total second quarter
    
    
    207,900
    
    
    $
    21.51
    
    
    
    207,900
    
    
    $
    14,859,701July 1  July 31, 2008
    
    
    108,700
    
    
    $
    18.99
    
    
    
    108,700August 1  August 31, 2008
    
    
    23,400
    
    
    
    19.71
    
    
    
    23,400September 1  September 30, 2008
    
    
    8,600
    
    
    
    22.03
    
    
    
    8,600Total third quarter
    
    
    140,700
    
    
    $
    19.30
    
    
    
    140,700
    
    
    $
    12,144,662October 1  October 31, 2008
    
    
    
    
    
    $
    
    
    
    
    November 1  November 30, 2008
    
    
    
    
    
    
    
    
    
    
    December 1  December 31, 2008
    
    
    
    
    
    
    
    
    
    
    Total fourth quarter
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    12,144,662Year ended December 31, 2008
    
    
    368,900
    
    
    $
    20.75
    
    
    
    368,900
 
 (1)
    
    Balance as of end of quarter indicated.(2)
    
    Balance as of end of quarter indicated Amounts are shown gross of treasury stock reissued.  41




---



##### Table of Contents



Item 6. Selected Financial Data
   Year ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(In thousands, except per share amounts)Revenues:Net premiums earned
    
    $
    167,073
    
    
    $
    166,096
    
    
    $
    151,834
    
    
    $
    134,557
    
    
    $
    116,333Net investment (loss) income
    
    
    (63,503
    )
    
    
    35,489
    
    
    
    47,897
    
    
    
    36,060
    
    
    
    23,679Commission income
    
    
    154
    
    
    
    414
    
    
    
    542
    
    
    
    1,198
    
    
    
    461Net realized investment (losses) gains
    
    
    (47,665
    )
    
    
    (6,903
    )
    
    
    (403
    )
    
    
    (805
    )
    
    
    678Other income (loss), net
    
    
    122
    
    
    
    (4,659
    )
    
    
    597
    
    
    
    334
    
    
    
    1,790Total revenues
    
    $
    56,181
    
    
    $
    190,437
    
    
    $
    200,467
    
    
    $
    171,344
    
    
    $
    142,941Expenses:Net losses and loss adjustment
expenses incurred
    
    $
    109,958
    
    
    $
    89,844
    
    
    $
    86,136
    
    
    $
    92,290
    
    
    $
    66,558Policy acquisition expenses
    
    
    38,670
    
    
    
    37,695
    
    
    
    31,336
    
    
    
    30,491
    
    
    
    25,166General and administrative expenses
    
    
    38,612
    
    
    
    36,018
    
    
    
    31,402
    
    
    
    27,183
    
    
    
    23,247Interest expense
    
    
    6,716
    
    
    
    6,726
    
    
    
    6,712
    
    
    
    6,679
    
    
    
    5,353Total expenses
    
    $
    193,956
    
    
    $
    170,283
    
    
    $
    155,586
    
    
    $
    156,643
    
    
    $
    120,324(Loss) income before income taxes
    
    $
    (137,775
    )
    
    $
    20,154
    
    
    $
    44,881
    
    
    $
    14,701
    
    
    $
    22,617Income taxes (benefit) expenseCurrent
    
    
    (14,026
    )
    
    
    10,509
    
    
    
    16,777
    
    
    
    6,152
    
    
    
    3,835Deferred
    
    
    (19,414
    )
    
    
    (3,727
    )
    
    
    (1,746
    )
    
    
    (1,152
    )
    
    
    4,151(33,440
    )
    
    
    6,782
    
    
    
    15,031
    
    
    
    5,000
    
    
    
    7,986Net (loss) income
    
    $
    (104,335
    )
    
    $
    13,372
    
    
    $
    29,850
    
    
    $
    9,701
    
    
    $
    14,631BASIC (LOSS) EARNINGS PER SHARE:Weighted average shares outstanding
    
    
    8,534
    
    
    
    8,896
    
    
    
    8,807
    
    
    
    8,734
    
    
    
    9,736Basic (loss) earnings per share
    
    $
    (12.23
    )
    
    $
    1.50
    
    
    $
    3.39
    
    
    $
    1.11
    
    
    $
    1.50DILUTED (LOSS) EARNINGS PER SHARE:Weighted average shares outstanding
    
    
    8,534
    
    
    
    9,190
    
    
    
    9,177
    
    
    
    8,918
    
    
    
    9,916Diluted (loss) earnings per share
    
    $
    (12.23
    )
    
    $
    1.46
    
    
    $
    3.25
    
    
    $
    1.09
    
    
    $
    1.48Dividends declared per share
    
    $
    .32
    
    
    $
    .32
    
    
    $
    .30
    
    
    $
    .24
    
    
    $
    .24
  42




---



##### Table of Contents



December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(In thousands)Total cash and investments
    
    $
    546,986
    
    
    $
    701,127
    
    
    $
    664,872
    
    
    $
    622,404
    
    
    $
    630,872Total assets
    
    
    946,476
    
    
    
    1,107,977
    
    
    
    1,119,296
    
    
    
    1,090,419
    
    
    
    997,094Unpaid losses and loss
adjustment expenses
    
    
    548,750
    
    
    
    556,535
    
    
    
    579,179
    
    
    
    588,865
    
    
    
    503,261Notes payable
    
    
    100,000
    
    
    
    100,000
    
    
    
    100,000
    
    
    
    100,000
    
    
    
    100,000Total shareholders equity
    
    
    164,073
    
    
    
    279,446
    
    
    
    270,700
    
    
    
    239,284
    
    
    
    258,118Book value per share
    
    $
    19.11
    
    
    $
    31.56
    
    
    $
    29.14
    
    
    $
    26.44
    
    
    $
    25.91
  
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Executive Overview and Highlights-2008 year
 
    
    Net loss of $(104.3) million or $(12.23) per diluted share
    
    Total shareholders equity of $164.1 million, or $19.11 per diluted share
    
    Net premiums written down 1% from 2007
    
    Adverse net loss reserve development reported on prior year loss reserves of $2.7 million
    
    Loss ratio of 65.8%
    
    Net investment loss of $(63.5) million
    
    Realized investment losses of $(47.7) million
    
    Total cash and invested assets of $547.0 million at year end 2008
    
    A.M. Best Rating of A (excellent) for New York Marine and Gotham
 Results of Operations
   NYMAGIC Gross Premiums Written
    
    Year ended December 31,By Segment
    
    2008
    
    
    2007
    
    
    2006(Dollars in thousands)Ocean Marine
    
    $
    82,751
    
    
    
    38
    %
    
    $
    98,689
    
    
    
    43
    %
    
    $
    104,876
    
    
    
    43
    %Inland Marine/Fire
    
    
    16,128
    
    
    
    7
    %
    
    
    18,625
    
    
    
    8
    %
    
    
    21,595
    
    
    
    9
    %Other Liability
    
    
    118,378
    
    
    
    55
    %
    
    
    110,986
    
    
    
    49
    %
    
    
    114,754
    
    
    
    48
    %Subtotal
    
    
    217,257
    
    
    
    100
    %
    
    
    228,300
    
    
    
    100
    %
    
    
    241,225
    
    
    
    100
    %Run off lines (Aircraft)
    
    
    (3
    )
    
    
    
    
    
    
    88
    
    
    
    
    
    
    
    84
    
    
    
    Total
    
    $
    217,254
    
    
    
    100
    %
    
    $
    228,388
    
    
    
    100
    %
    
    $
    241,309
    
    
    
    100
    %
  43




---



##### Table of Contents



NYMAGIC Net Premiums Written
    
    Year ended December 31,By Segment
    
    2008
    
    
    2007
    
    
    2006(Dollars in thousands)Ocean Marine
    
    $
    59,200
    
    
    
    36
    %
    
    $
    68,192
    
    
    
    41
    %
    
    $
    75,243
    
    
    
    49
    %Inland Marine/Fire
    
    
    4,538
    
    
    
    3
    %
    
    
    6,935
    
    
    
    4
    %
    
    
    7,097
    
    
    
    4
    %Other Liability
    
    
    101,424
    
    
    
    61
    %
    
    
    92,618
    
    
    
    55
    %
    
    
    72,231
    
    
    
    47
    %Subtotal
    
    
    165,162
    
    
    
    100
    %
    
    
    167,745
    
    
    
    100
    %
    
    
    154,571
    
    
    
    100
    %Run off lines (Aircraft)
    
    
    222
    
    
    
    
    
    
    
    108
    
    
    
    
    
    
    
    289
    
    
    
    Total
    
    $
    165,384
    
    
    
    100
    %
    
    $
    167,853
    
    
    
    100
    %
    
    $
    154,860
    
    
    
    100
    %
 NYMAGIC Net Premiums Earned
    
    Year ended December 31,By Segment
    
    2008
    
    
    2007
    
    
    2006(Dollars in thousands)Ocean Marine
    
    $
    64,713
    
    
    
    39
    %
    
    $
    71,637
    
    
    
    43
    %
    
    $
    78,350
    
    
    
    52
    %Inland Marine/Fire
    
    
    5,710
    
    
    
    3
    %
    
    
    6,978
    
    
    
    4
    %
    
    
    7,793
    
    
    
    5
    %Other Liability
    
    
    96,428
    
    
    
    58
    %
    
    
    87,373
    
    
    
    53
    %
    
    
    65,402
    
    
    
    43
    %Subtotal
    
    
    166,851
    
    
    
    100
    %
    
    
    165,988
    
    
    
    100
    %
    
    
    151,545
    
    
    
    100
    %Run off lines (Aircraft)
    
    
    222
    
    
    
    
    
    
    
    108
    
    
    
    
    
    
    
    289
    
    
    
    Total
    
    $
    167,073
    
    
    
    100
    %
    
    $
    166,096
    
    
    
    100
    %
    
    $
    151,834
    
    
    
    100
    %
       44




---



##### Table of Contents



Year Ended December 31, 2008 as Compared to Year Ended December 31, 2007
        Year ended December 31,2008
    
    
    2007
    
    
    Change(Dollars in thousands)Marine liability
    
    $
    41,421
    
    
    $
    41,826
    
    
    
    (1
    %)Energy
    
    
    11,396
    
    
    
    12,959
    
    
    
    (12
    %)Hull
    
    
    7,224
    
    
    
    9,154
    
    
    
    (21
    %)Cargo
    
    
    15,387
    
    
    
    25,686
    
    
    
    (40
    %)War
    
    
    5,130
    
    
    
    6,515
    
    
    
    (21
    %)Other marine
    
    
    2,193
    
    
    
    2,549
    
    
    
    (13
    %)Total
    
    $
    82,751
    
    
    $
    98,689
    
    
    
    (16
    %)
     45




---



##### Table of Contents



Year ended December 31,2008
    
    
    2007
    
    
    Change(Dollars in thousands)Fire and inland marine
    
    $
    14,706
    
    
    $
    16,581
    
    
    
    (11
    %)Surety
    
    
    1,422
    
    
    
    2,044
    
    
    
    (30
    %)Total
    
    $
    16,128
    
    
    $
    18,625
    
    
    
    (13
    %)
   Year ended December 31,2008
    
    
    2007
    
    
    Change(Dollars in thousands)Automobile liability
    
    $
    7,312
    
    
    $
    8,349
    
    
    
    (12
    %)Professional liability
    
    
    50,443
    
    
    
    49,491
    
    
    
    2
    %General casualty
    
    
    24,585
    
    
    
    20,652
    
    
    
    19
    %Excess Workers Compensation
    
    
    36,038
    
    
    
    32,494
    
    
    
    11
    %Total
    
    $
    118,378
    
    
    $
    110,986
    
    
    
    7
    %
       46




---



##### Table of Contents



47




---



##### Table of Contents



Years ended December 31,2008
    
    
    2007(In millions)Fixed maturities held to maturity
    
    $
    0.8
    
    
    $
    Fixed maturities available for sale
    
    
    7.4
    
    
    
    13.9Trading securities
    
    
    (42.3
    )
    
    
    2.3Commercial loans
    
    
    (1.5
    )
    
    
    Equity in (loss) earnings of limited partnerships
    
    
    (26.8
    )
    
    
    13.0Short-term investments
    
    
    3.0
    
    
    
    8.7Total investment (loss) income
    
    
    (59.4
    )
    
    
    37.9Investment expenses
    
    
    (4.1
    )
    
    
    (2.4
    )Net investment (loss) income
    
    $
    (63.5
    )
    
    $
    35.5
      48




---



##### Table of Contents



49




---



##### Table of Contents



Year Ended December 31, 2007 as Compared to Year Ended December 31, 2006
             50




---



##### Table of Contents



51




---



##### Table of Contents



Years ended December 31,2007
    
    
    2006(In millions)Fixed maturities, available for sale
    
    $
    13.9
    
    
    $
    11.8Trading securities
    
    
    2.3
    
    
    
    15.8Equity in earnings of limited partnerships
    
    
    13.0
    
    
    
    16.5Short-term investments
    
    
    8.7
    
    
    
    7.8Total investment income
    
    
    37.9
    
    
    
    51.9Investment expenses
    
    
    (2.4
    )
    
    
    (4.0
    )Net investment income
    
    $
    35.5
    
    
    $
    47.9
    Accounting for the Impairment or Disposal of Long-Lived
Assets.
      52




---



##### Table of Contents



Liquidity and Capital Resources
     53




---



##### Table of Contents



th
   54




---



##### Table of Contents



Description
    
    Amounts in thousandsCash
    
    $
    10,852U.S. Treasury securities
    
    
    3,933RMBS
    
    
    2,029Limited
partnership hedge funds: Altrion
    
    
    33,800Mariner Voyager
    
    
    3,618Receivables
    
    
    8,720Total investments
    
    $
    62,952
       55




---



##### Table of Contents



Off-Balance Sheet Arrangements
  Contractual Obligations
  Payments Due by PeriodLess Than
    
    
    
    
    
    
    
    
    
    
    More ThanTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 Years(in thousands)Long-term debt obligations
    
    $
    100,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    100,000Interest on debt obligations
    
    
    35,750
    
    
    
    6,500
    
    
    
    13,000
    
    
    
    13,000
    
    
    
    3,250Losses and loss expenses (1)
    
    
    548,750
    
    
    
    123,122
    
    
    
    147,690
    
    
    
    87,620
    
    
    
    190,318Operating lease obligations
    
    
    32,331
    
    
    
    4,282
    
    
    
    8,392
    
    
    
    8,550
    
    
    
    11,107Total
    
    $
    716,831
    
    
    $
    133,904
    
    
    $
    169,082
    
    
    $
    109,170
    
    
    $
    304,675
 
 (1)
    
    Represents an estimated payout based upon historical paid loss development patterns.  56




---



##### Table of Contents



Critical accounting policies
      57




---



##### Table of Contents



58




---



##### Table of Contents



Fair value measurements
  Level 1
   Level 2
   Level 3
   59




---



##### Table of Contents



Effect of recent accounting pronouncements
 Adoption of new accounting pronouncements:
 Fair Value
Measurements
 The Fair Value Option
for Financial Assets and Financial Liabilities
 Accounting for
Income Tax Benefits of Dividends on Share-Based Payment Awards
 Determining the Fair Value of a Financial Asset
When the Market for That Asset Is Not Active Fair
Value Accounting
Changes and Error Corrections
  60




---



##### Table of Contents



Amendments to
the Impairment Guidance of EITF Issue No. 99-20 Accounting for Certain Investments in Debt and
Equity Securities,
 Future adoption of new accounting pronouncements:
 Business
Combinations
 Non-controlling
Interests in Consolidated Financial Statements
 Effective Date of FASB Statement No. 157 Fair Value Measurements
 Disclosures
about Derivative Instruments and Hedging Activities, an Amendment of FASB Statement No. 133
 The Hierarchy of
Generally Accepted Accounting Principles The Meaning of Present
Fairly in Conformity with Generally Accepted Accounting Principles
 Accounting for
Financial Guarantee Insurance Contracts Accounting and Reporting by Insurance Enterprise,
 Determining
Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities 03-6-1.
  61




---



##### Table of Contents



Impact of Inflation
   
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    Future cash flows of expected principal amounts(Dollars in millions)TotalThere-
    
    
    
    
    
    
    Fair2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    after
    
    
    Total
    
    
    ValueTax-exempts
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    0.5
    
    
    $
    4.0
    
    
    $
    92.4
    
    
    $
    96.9
    
    
    $
    90.5Average interest rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.25
    %
    
    
    5.25
    %
    
    
    5.18
    %
    
    
    
    
    
    
    Taxables
    
    $
    0.1
    
    
    $
    22.2
    
    
    $
    11.6
    
    
    $
    0.1
    
    
    $
    14.9
    
    
    $
    3.5
    
    
    $
    52.4
    
    
    $
    54.5Average interest rate
    
    
    8.59
    %
    
    
    2.74
    %
    
    
    4.25
    %
    
    
    4.63
    %
    
    
    7.58
    %
    
    
    4.69
    %
    
    
    
    
    
    
    Total
    
    $
    0.1
    
    
    $
    22.2
    
    
    $
    11.6
    
    
    $
    0.6
    
    
    $
    18.9
    
    
    $
    95.9
    
    
    $
    149.3
    
    
    $
    145.0
     62




---



##### Table of Contents



63




---



##### Table of Contents



Item 8. Financial Statements and Supplementary Data
  
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Managements Report on Internal Control over Financial Reporting
  Changes in Internal Controls
  
 Item 9B. Other Information
   64




---



##### Table of Contents



PART III
 
 Item 10. Directors and Executive Officers of the Registrant
   
 Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence
  
 Item 14. Principal Accounting Fees and Services
   65




---



##### Table of Contents



PART IV
 
 Item 15. Exhibits, Financial Statement Schedules
 (a) 1.
    
    Financial StatementsThe list of financial statements appears in the accompanying index on page F-1.2.
    
    Financial Statement SchedulesThe list of financial statement schedules appears in the accompanying index on page F-1.3.
    
    Exhibits3.1
    
    Charter of NYMAGIC, INC. (Filed as Exhibit 99.1 to the Registrants Current Report on
Form 8-K filed on December 16, 2003 (Commission File No. 1-11238) and incorporated
herein by reference).3.2
    
    Amended and Restated By-Laws. (Filed as Exhibit 3.3 of the Registrants Annual Report
on Form 10-K for the fiscal year ended December 31, 1999 (Commission File No. 1-11238)
and incorporated herein by reference).4.0
    
    Specimen Certificate of common stock (Filed as Exhibit 4.0 of Amendment No. 2 to the
Registrants Registration Statement No. 33-27665) and incorporated herein by
reference).10.1
    
    Restated Management Agreement dated as of January 1, 1986, by and among Mutual Marine
Office, Inc. and Arkwright-Boston Manufacturers Mutual Insurance Company, Utica Mutual
Insurance Company, Lumber Mutual Insurance Company, the Registrant and Pennsylvania
National Mutual Casualty Insurance Company (Filed as Exhibit 10.2 of the Registrants
Annual Report on Form 10-K for the fiscal year ended December 31, 1986 (Commission File
No. 2-88552) and incorporated herein by reference).10.2
    
    Amendment No. 2 to the Restated Management Agreement, dated as of December 30, 1988, by
and among Mutual Marine Office, Inc. and Arkwright Mutual Insurance Company, Utica
Mutual Insurance Company, Lumber Mutual Insurance Company, the Registrant and
Pennsylvania National Mutual Casualty Insurance Company (Filed as Exhibit 10.2.2. of
the Registrants Current Report on Form 8-K dated January 6, 1989 (Commission File
No. 2-88552) and incorporated herein by reference).10.3
    
    Amendment No. 3 to the Restated Management Agreement, dated as of December 31, 1990 by
and among Mutual Marine Office, Inc. and Arkwright Mutual Insurance Company, Utica
Mutual Insurance Company, the Registrant and Pennsylvania National Mutual Casualty
Insurance Company (Filed as Exhibit 10.2.3. of the Registrants Annual Report on
Form 10-K for the fiscal year ended December 31, 1990 (Commission File No. 3-27665) and
incorporated herein by reference).10.4
    
    Restated Management Agreement dated as of January 1, 1986, by and among Mutual Inland
Marine Office, Inc. and Arkwright-Boston Manufacturers Mutual Insurance Company, Utica
Mutual Insurance Company, Lumber Mutual Insurance Company, the Registrant and
Pennsylvania National Mutual Casualty Insurance Company (Filed as Exhibit 10.4 of the
Registrants Annual Report on Form 10-K for the fiscal year ended December 31, 1986
(Commission File No. 2-88552) and incorporated herein by reference).10.5
    
    Amendment No. 2 to the Restated Management Agreement, dated as of December 30, 1988, by
and among Mutual Inland Marine Office, Inc. and Arkwright Mutual Insurance Company,
Utica Mutual Insurance Company, Lumber Mutual Insurance Company, the Registrant and
Pennsylvania National Mutual Casualty Insurance Company (Filed as Exhibit 10.4.2 of the
Registrants Current Report on Form 8-K, dated January 6, 1989 (Commission File
No. 2-88552) and incorporated herein by reference).10.6
    
    Amendment No. 3 to the Restated Management Agreement, dated as of December 31, 1990, by
and among Mutual Inland Marine Office, Inc. and Arkwright Mutual Insurance Company,
Utica Mutual Insurance Company, the Registrant and Pennsylvania National Mutual
Casualty Insurance Company (Filed as Exhibit 10.4.3. of the Registrants Annual Report
on Form 10-K for the fiscal year ended December 31, 1990 (Commission File No. 3-27665)
and incorporated herein by reference).10.7
    
    Restated Management Agreement dated as of January 1, 1986, by and among Mutual Marine
Office of the Midwest, Inc. and Arkwright-Boston Manufacturers Mutual Insurance
Company, Utica Mutual Insurance Company, Lumber Mutual Insurance Company, the
Registrant and Pennsylvania National Mutual Casualty Insurance Company (Filed as
Exhibit 10.6 of the Registrants Annual Report on Form 10-K for the fiscal year ended
December 31, 1986 (Commission File No. 2-88552) and incorporated herein by reference).10.8
    
    Amendment No. 2 to the Restated Management Agreement dated as of December 30, 1988, by
and among Mutual Marine Office of the Midwest, Inc. and Arkwright Mutual Insurance
Company, Utica Mutual Insurance Company, Lumber Mutual Insurance Company, the
Registrant and Pennsylvania National Mutual Casualty Insurance Company (Filed as
Exhibit 10.6.2 of the Registrants Current Report on Form 8-K, dated January 6, 1989
(Commission File No. 2-88552) and incorporated herein by reference).10.9
    
    Amendment No. 3 to the Restated Management Agreement dated as of December 31, 1990, by
and among Mutual Marine Office of the Midwest, Inc. and Arkwright Mutual Insurance
Company, Utica Mutual Insurance Company, the Registrant and Pennsylvania National
Mutual Casualty Insurance Company (Filed as Exhibit 10.6.3. of the Registrants Annual
Report on Form 10-K for the fiscal year ended December 31, 1990 (Commission File
No. 3-27665) and incorporated herein by reference).10.10
    
    Restated Management Agreement dated as of January 1, 1986, by and among Pacific Mutual
Marine Office, Inc. and Arkwright-Boston Manufacturers Mutual Insurance Company, Lumber
Mutual Insurance Company, Utica Mutual Insurance Company, the Registrant and
Pennsylvania National Mutual Casualty Insurance Company (Filed as Exhibit 10.8 of the
Registrants Annual Report on Form 10-K for the fiscal year ended December 31, 1986
(Commission File No. 2-88552) and incorporated herein by reference).
  66




---



##### Table of Contents



10.11
    
    Amendment No. 2 to the Restated Management Agreement dated as of December 30, 1988, by
and among Pacific Mutual Marine Office, Inc. and Arkwright Mutual Insurance Company,
Lumber Mutual Insurance Company, Utica Mutual Insurance Company, the Registrant and
Pennsylvania National Mutual Casualty Insurance Company (Filed as Exhibit 10.8.2 of the
Registrants Current Report on Form 8-K, dated January 6, 1989 (Commission File
No. 2-88552) and incorporated herein by reference).10.12
    
    Amendment to Restated Management Agreement dated as of December 31, 1990, by and among
Pacific Mutual Marine Office, Inc. and Arkwright Mutual Insurance Company, Utica Mutual
Insurance Company, the Registrant and Pennsylvania National Mutual Casualty Insurance
Company (Filed as Exhibit 10.8.3. of the Registrants Annual Report on Form 10-K for
the fiscal year ended December 31, 1992 (Commission File No. 1-11238) and incorporated
herein by reference).+10.13
    
    1991 Stock Option Plan (Filed as Exhibit A to the Registrants Proxy Statement for its
1991 Annual Meeting of Shareholders (Commission File No. 1-11238) and incorporated
herein by reference).10.14
    
    Form of Indemnification Agreement (Filed as Exhibit 10.10 of the Registrants Annual
Report on Form 10-K for the fiscal year ended December 31, 1999 (Commission File
No. 1-11238) and incorporated herein by reference).+10.15
    
    1999 NYMAGIC, INC. Phantom Stock Plan (Filed as Exhibit 10.11 of the Registrants
Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (Commission File
No. 1-11238) and incorporated herein by reference).+10.16
    
    Severance Agreement dated as of December 31, 2001 by and between NYMAGIC, INC. and
Thomas J. Iacopelli (Filed as Exhibit 10.2 of the Registrants Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002 (Commission File No. 1-11238) and
incorporated herein by reference).+10.17
    
    Severance Agreement dated as of July 9, 2002 by and between NYMAGIC, INC. and Paul
Hart. Filed as Exhibit 10.17 of the Registrants Annual Report on Form 10-K for the
year ended December 31, 2003 (Commission File No. 1-11238) and incorporated herein by
reference.+10.18
    
    NYMAGIC, INC. 2002 Nonqualified Stock Option Plan (Filed as Exhibit 10.2 of the
Registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2002
(Commission File No. 1-11238) and incorporated herein by reference).+10.19
    
    NYMAGIC, INC. Amended and Restated 2004 Long-Term Incentive Plan (Filed as
Exhibit 10.19 to the Registrants Annual Report on Form 10-K for the year ended
December 31, 2004 (Commission File No. 1-11238) and incorporated herein by reference).+10.20
    
    NYMAGIC, INC. Employee Stock Purchase Plan (Filed as Appendix C to the Registrants
Proxy Statement for its 2004 Annual Meeting of Stockholders (Commission File
No. 1-11238) and incorporated herein by reference).+10.21
    
    Forms of Election for Deferred Compensation Program (Filed as Exhibit 10.21 to the
Registrants Annual Report on Form 10-K for the year ended December 31, 2004
(Commission File No. 1-11238) and incorporated herein by reference).10.22
    
    Voting Agreement among Mariner Partners, Inc. and certain stockholders of the Company
dated as of February 20, 2002, as amended March 1, 2002 (Filed as Exhibit 99.1 to the
Schedule 13D filed by Mariner Partners, Inc. and the other reporting persons named
therein on March 4, 2002 (Commission File No. 5-40907) and incorporated herein by
reference).10.23
    
    Amendment No. 2 dated as of January 27, 2003 to Voting Agreement among Mariner
Partners, Inc. and certain stockholders of the Company (Filed as Exhibit 99.2 to the
Schedule 13D/A filed by Mariner Partners, Inc. and the other reporting persons named
therein on April 10, 2003 (Commission File No. 5-40907) and incorporated herein by
reference).10.24
    
    Amendment No. 3 dated as of March 12, 2003 to Voting Agreement among Mariner Partners,
Inc. and certain stockholders of the Company (Filed as Exhibit 99.3 to the
Schedule 13D/A filed by Mariner Partners, Inc. and the other reporting person named
therein on April 10, 2003 (Commission File No. 5-40907) and incorporated herein by
reference).10.25
    
    Amendment No. 4 dated as of February 24, 2004 to Voting Agreement among Mariner
Partners, Inc. and certain stockholders of the Company. (Filed as Exhibit 10.22 of the
Registrants Annual Report on Form 10-K for the year ended December 31, 2003
(Commission File No. 1-11238) and incorporated herein by reference).10.26
    
    Resolutions of the Board of Directors of the Companys subsidiary, New York Marine And
General Insurance Company, adopted July 18, 2002, committing not to pay dividends to
the Company without the consent of the New York State Department of Insurance prior to
July 31, 2004 (Filed as Exhibit 10.1 to the Registrants original Form 10-Q for the
quarter ended June 30, 2003 (Commission File No. 1-11238) and incorporated herein by
reference).10.27
    
    Resolutions of the Board of Directors of the Companys subsidiary, Gotham Insurance
Company, adopted July 18, 2002, committing not to pay dividends to the Company without
the consent of the New York State Department of Insurance prior to July 31, 2004 (Filed
as Exhibit 10.2 to the Registrants original Form 10-Q for the quarter ended June 30,
2003 (Commission File No. 1-11238) and incorporated herein by reference).10.28
    
    Amended and Restated Investment Management Agreement between Mariner Partners, Inc. and
NYMAGIC, Inc. and New York Marine And General Insurance Company and Gotham Insurance
Company, dated as of December 6, 2002 (Filed as Exhibit 10.6 of the Registrants
amended Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 (Commission
File No. 1-11238) and incorporated herein by reference).10.29
    
    Limited Partnership Agreement of Mariner Tiptree (CDO) Fund I, L.P. dated as of May 1,
2003 (Filed as Exhibit 10.1 of the Registrants Quarterly Report on Form 10-Q for the
quarter ended June 20, 2004 (Commission File No. 1-11238) and incorporated herein by
reference).10.30
    
    Securities Purchase Agreement dated as of January 31, 2003 by and between NYMAGIC, Inc.
and Conning Capital Partners VI, L.P. (Filed as Exhibit 99.1 of the Registrants
Current Report on Form 8-K dated January 31, 2003 (Commission File No. 1-11238) and
incorporated herein by reference).
  67




---



##### Table of Contents



10.31
    
    Registration Rights Agreement dated as of January 31, 2003 by and between NYMAGIC, Inc.
and Conning Capital Partners VI, L.P. (Filed as Exhibit 99.2 of the Registrants
Current Report on Form 8-K dated January 31, 2003 (Commission File No. 1-11238) and
incorporated herein by reference).10.32
    
    Option Certificate dated as of January 31, 2003 by and between NYMAGIC, INC. and
Conning Capital Partners VI, L.P. (Filed as Exhibit 99.3 of the Registrants Current
Report on Form 8-K dated January 31, 2003 (Commission File No. 1-11238) and
incorporated herein by reference).10.33
    
    Registration Rights Agreement dated as of March 11, 2004 by and among NYMAGIC, INC. and
Keefe, Bruyette and Woods, Inc. and the other initial purchasers referred to therein.
(Filed as Exhibit 10.31 of the Registrants Annual Report on Form 10-K for the year
ended December 31, 2003 (Commission File No. 1-11238) and incorporated herein by
reference).10.34
    
    Indenture dated as of March 11, 2004 by and between NYMAGIC, INC. and Wilmington Trust
Company, as trustee related to the Companys 6.50% Senior Notes due 2014. (Filed as
Exhibit 10.32 of the Registrants Annual Report on Form 10-K for the year ended
December 31, 2003 (Commission File No. 1-11238) and incorporated herein by reference).10.35
    
    First Supplemental Indenture dated as of March 11, 2004 by and between NYMAGIC, INC.
and Wilmington Trust Company, as trustee. (Filed as Exhibit 10.33 of the Registrants
Annual Report on Form 10-K for the year ended December 31, 2003 (Commission File
No. 1-11238) and incorporated herein by reference).10.36
    
    Sublease dated as of December 12, 2002 by and between BNP Paribas and New York Marine
And General Insurance Company (Filed as Exhibit 10.20 of the Registrants Annual Report
on Form 10-K for the fiscal year ended December 31, 2002 (Commission File No. 1-11238)
and incorporated herein by reference).10.37
    
    Stock Purchase Agreement, dated as of January 7, 2005, by and among the Company and the
sellers named therein (Filed as Exhibit 10.1 of the Registrants Current Report on
Form 8-K dated January 10, 2005 (Commission File No. 1-11238) and incorporated herein
by reference).+10.38
    
    Consulting Agreement, dated as of April 6, 2005, by and between the Company and William
D. Shaw, Jr. (Filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K
(File No. 1-11238) filed on April 6, 2005 and incorporated herein by reference).+10.39
    
    Form of Unrestricted Share Award Agreement. (Filed as Exhibit 10.1 to the Registrants
Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (Commission File
No. 1-11238) and incorporated herein by reference).10.40
    
    Amended and Restated Voting Agreement dated as of October 12, 2005, by and among Mark
W. Blackman, Lionshead Investments, LLC, Robert G. Simses, and Mariner Partners, Inc.
(Filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K (File
No. 1-11238) filed on October 14, 2005, and incorporated herein by reference).10.41
    
    Sale and Purchase Agreement dated August 31, 2005 by and among the Robertson Group
Limited and the Edinburgh Woollen Mill (Group) Limited and MMO EU Limited. (Filed as
Exhibit 10.1 to the Registrants Quarterly Report on Form 10-Q for the quarter ended
September 30, 2005 (Commission File No. 1-11238) and incorporated herein by reference).10.42
    
    Taxation Deed. (Filed as Exhibit 10.2 to the Registrants Quarterly Report on Form 10-Q
for the quarter ended September 30, 2005 (Commission File No. 1-11238) and incorporated
herein by reference).+10.43
    
    Form of Restricted Share Award Agreement. (Filed as Exhibit 10.3 to the Registrants
Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 (Commission File
No. 1-11238) and incorporated herein by reference).10.44
    
    Letter Agreement dated as of March 22, 2006 by and between NYMAGIC, INC. and Conning
Capital Partners VI, L.P. (Filed as Exhibit 99.1 to the Registrants Current Report on
Form 8-K (File No. 1-11238) filed on March 28, 2006 and incorporated herein by
reference).10.45
    
    Amended and Restated Option Certificate dated as of March 22, 2006 by and between
NYMAGIC, INC. and Conning Capital Partners VI, L.P (Filed as Exhibit 99.1 to the
Registrants Current Report on Form 8-K (File No. 1-11238) filed on March 28, 2006 and
incorporated herein by reference).+10.46
    
    Consulting Agreement, dated as of March 30, 2006, by and between William D. Shaw, Jr.
and NYMAGIC, INC.( (Filed as Exhibit 10.1 to the Registrants Current Report on
Form 8-K (File No. 1-11238) filed on March 31, 2006 and incorporated herein by
reference).+10.47
    
    Employment Agreement, dated as of April 17, 2006, by and between A. George Kallop and
NYMAGIC, INC. (Filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K
(File No. 1-11238) filed on April 20, 2006 and incorporated herein by reference).+10.48
    
    Performance Share Award Agreement, dated as of April 17, 2006, by and between A. George
Kallop and NYMAGIC, INC. (Exhibits omitted. Will be provided to the
SEC upon request.) (Filed as Exhibit 10.2 to the Registrants Current Report on Form 8-K (File
No. 1-11238) filed on April 20, 2006 and incorporated herein by reference).+10.49
    
    Employment Agreement, dated as of April 18, 2006, by and between George R. Trumbull,
III and NYMAGIC, INC. (Filed as Exhibit 10.3 to the Registrants Current Report on
Form 8-K (File No. 1-11238) filed on April 20, 2006 and incorporated herein by
reference).+10.50
    
    Performance Share Award Agreement, dated as of April 18, 2006, by and between George R.
Trumbull, III and NYMAGIC, INC. (Filed as Exhibit 10.4 to the Registrants Current
Report on Form 8-K (File No. 1-11238) filed on April 20, 2006 and incorporated herein
by reference).10.51
    
    Amended and Restated Limited Partnership Agreement by and between NYMAGIC, INC.,
Tricadia CDO Fund, L.P., as general partner, and the limited partners named therein,
dated as of August 1, 2006. (Filed as Exhibit 99.1 to the Registrants Current Report
on Form 8-K (File No. 1-11238) filed on August 23, 2006 and incorporated herein by
reference).
  68




---



##### Table of Contents



+10.52
    
    Employment Agreement, dated January 9, 2007, by and between George R. Trumbull, III and
NYMAGIC, INC. (Filed as Exhibit 10.52 of the Registrants Annual Report on Form 10-K
for the year ended December 31, 2006, (Commission File no. 1-11238) and incorporated
herein by reference).+10.53
    
    2004 Amended and Restated Long-Term Incentive Plan Award Agreement, dated January 9,
2007, by and between NYMAGIC, INC. and George R. Trumbull, III. (Filed as Exhibit 10.53
of the Registrants Annual Report on Form 10-K for the year ended December 31, 2006,
(Commission File no. 1-11238) and incorporated herein by reference).+10.54
    
    Amendment to Employment Agreement, dated January 9, 2007, by and between A. George
Kallop and NYMAGIC, INC. (Filed as Exhibit 10.54 of the Registrants Annual Report on
Form 10-K for the year ended December 31, 2006, (Commission File no. 1-11238) and
incorporated herein by reference).+10.55
    
    2004 Amended and Restated Long-Term Incentive Plan Award Agreement, dated January 9,
2007, by and between NYMAGIC, INC. and A. George Kallop. (Filed as Exhibit 10.55 of the
Registrants Annual Report on Form 10-K for the year ended December 31, 2006,
(Commission File no. 1-11238) and incorporated herein by reference.+10.56
    
    Consulting Agreement, dated as of March 22, 2007 by and between William D. Shaw, Jr.
and NYMAGIC, INC. (Filed as Exhibit 10.5 to the Registrants Quarterly Report on Form
10-Q for the quarter ended March 31, 2007 (Commission File no. 1-11238) and
incorporated herein by reference).+10.57
    
    2004 Amended and Restated Long-term Incentive Plan Award Agreement, dated January 9,
2008, between A. George Kallop and NYMAGIC, INC. (Filed as Exhibit 10.57 of the
Registrants Annual Report on Form 10-K for the year ended December 31, 2007,
(Commission File no. 1-11238) and incorporated herein by reference).+10.58
    
    2004 Amended and Restated Long-term Incentive Plan Award Agreement, dated January 10,
2008, between George R. Trumbull, III and NYMAGIC, INC. (Filed as Exhibit 10.58 of the
Registrants Annual Report on Form 10-K for the year ended December 31, 2007,
(Commission File no. 1-11238) and incorporated herein by reference).+10.59
    
    Employment Agreement, dated January 10, 2008, between NYMAGIC, INC. and George R.
Trumbull, III. (Filed as Exhibit 10.53 of the Registrants Annual Report on Form 10-K
for the year ended December 31, 2006, (Commission File no. 1-11238) and incorporated
herein by reference. (Filed as Exhibit 10.59 of the Registrants Annual Report on Form
10-K for the year ended December 31, 2007, (Commission File no. 1-11238) and
incorporated herein by reference).+10.60
    
    Severance Agreement, dated February 15, 2007, between Mutual Marine Office, Inc and
Craig Lowenthal. (Filed as Exhibit 10.60 of the Registrants Annual Report on Form 10-K
for the year ended December 31, 2007, (Commission File no. 1-11238) and incorporated
herein by reference).10.61
    
    Lease, dated June 5, 2007 by and between Metropolitan 919 Third Avenue LLC and New York
Marine And General Insurance Company. (Filed as Exhibit 10.61 of the Registrants
Annual Report on Form 10-K for the year ended December 31, 2007, (Commission File
no. 1-11238) and incorporated herein by reference).+10.62
    
    Consulting Agreement, effective January 1, 2008 and entered into April 4, 2008 between
William D. Shaw, Jr. and NYMAGIC, INC. (Filed as Exhibit 10.1 to the Registrants
Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 (Commission File
no. 1-11238) and incorporated herein by reference.+10.63
    
    Consulting Agreement, effective May 21, 2008 and entered into June 16, 2008 between
George R. Trumbull, III and NYMAGIC, INC. (Filed as Exhibit 10.1 to the Registrants
Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (Commission File
no. 1-11238) and incorporated herein by reference.+10.64
    
    Engagement Agreement, effective May 21, 2008 and entered into July 8, 2008 between
Robert G. Simses and NYMAGIC, INC. (Filed as Exhibit 10.2 to the Registrants Quarterly
Report on Form 10-Q for the quarter ended June 30, 2008 (Commission File no. 1-11238)
and incorporated herein by reference.+10.65
    
    NYMAGIC, INC. 2004 Amended and Restated Long-Term Incentive Plan, as amended May 21,
2008. (Filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K File No.
1-11238) filed on May 28, 2008 and incorporated herein by reference).+10.66
    
    Employment Agreement, dated as of January 1, 2009, by and between A. George Kallop and
NYMAGIC, INC. (Filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K
(File No. 1-11238) filed on February 4, 2009 and incorporated herein by reference).+10.67
    
    Performance Share Award Agreement,
dated as of January 1, 2009, by and between A. George
Kallop and NYMAGIC, INC. (Exhibit omitted. Will be provided to the SEC upon request.)*+10.68
    
    Form of Indemnification Agreement by and between NYMAGIC, INC. and members of its Board
of Directors, approved as of December 3, 2008.*+10.69
    
    Amended and Restated Voting Agreement by and among Mark W. Blackman, Lionshead
Investments, LLC and Robert G. Simses, Trustee, and Mariner Partners, Inc. dated
October 15, 2008.*+10.70
    
    Letter Agreement by and among Mariner Partners, Inc. and Mark W. Blackman, Lionshead
Investments, LLC and Robert G. Simses, Trustee, and Mariner Partners, Inc. dated
October 15, 2008.*10.71
    
    2007 financial statements of Tricadia CDO Fund, L.P.*+10.72
    
    Employment Agreement, dated as of
April 7, 2008, by and between Glenn R. Yanoff and NYMAGIC, INC.+10.73
    
    Performance Share Award Agreement,
dated as of April 7, 2008, by and between Glenn R. Yanoff and
NYMAGIC INC. (Exhibit omitted. Will be provided to the SEC upon
request.)*21.1
    
    Subsidiaries of the Registrant.*23.1
    
    Consent of KPMG LLP.*23.2
    
    Consent of Grant Thornton LLP.
  69




---



##### Table of Contents



*31.1
    
    Certification of A. George Kallop, President and Chief Executive Officer, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of Thomas J. Iacopelli, Chief Financial Officer, as adopted pursuant to
section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification of A. George Kallop, President and Chief Executive Officer, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.*32.2
    
    Certification of Thomas J. Iacopelli, Chief Financial Officer, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith.+
    
    Represents a management contract or compensatory plan or arrangement. 70




---



##### Table of Contents



SIGNATURES
  NYMAGIC, INC.
(Registrant)By:
    /s/ A. George KallopA. George KallopPresident and Chief Executive Officer   Name
    
    Title
    
    Date/s/ John R. Anderson
    
    Director
    
    March 12, 2009John R. Anderson/s/ Glenn J. Angiolillo
    
    Director
    
    March 12, 2009Glenn J. Angiolillo/s/ Ronald J. Artinian
    
    Director
    
    March 12, 2009Ronald J. Artinian/s/ John T. Baily
    
    Director
    
    March 12, 2009John T. Baily/s/ David E. Hoffman
    
    Director
    
    March 12, 2009David E. Hoffman/s/ A. George Kallop
    
    Director and President and
    
    March 12, 2009A. George Kallop
    
    Chief Executive Officer/s/ William J. Michaelcheck
    
    Director
    
    March 12, 2009William J. Michaelcheck/s/ William D. Shaw, Jr.
    
    Director
    
    March 12, 2009William D. Shaw, Jr./s/ Robert G. Simses
    
    Director and Chairman
    
    March 12, 2009Robert G. Simses/s/ George R. Trumbull, III
    
    Director
    
    March 12, 2009George R. Trumbull, III/s/ David W. Young
    
    Director
    
    March 12, 2009David W. Young/s/ Thomas J. Iacopelli
    
    Principal Accounting Officer and
    
    March 12, 2009Thomas J. Iacopelli
    
    Chief Financial Officer
  71




---



##### Table of Contents



NYMAGIC, INC.
 
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 Managements Report on Internal Control Over Financial Reporting
    
    F-2Report of Independent Registered Public Accounting Firm
    
    F-3Report of Independent Registered Public Accounting Firm
    
    F-4Consolidated Balance Sheets
    
    F-5Consolidated Statements of Operations
    
    F-6Consolidated Statements of Shareholders Equity
    
    F-7Consolidated Statements of Cash Flows
    
    F-8Notes to Consolidated Financial Statements
    
    F-9Financial Statement Schedule II
    
    F-41Financial Statement Schedule III
    
    F-44Financial Statement Schedule V
    
    F-45Financial Statement Schedule VI
    
    F-45
  F-1




---



##### Table of Contents



MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
     A. George Kallop,President and
    
    Thomas J. Iacopelli,Chief Executive Officer
    
    Chief Financial Officer
  F-2




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
         
  F-3




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
       
  F-4




---



##### Table of Contents



NYMAGIC, INC.
 
 CONSOLIDATED BALANCE SHEETS
 December 31,2008
    
    
    2007ASSETSInvestments:Fixed maturities:Held to maturity at amortized cost (fair value $42,329,432 and $0)
    
    $
    61,246,212
    
    
    $
    Available for sale at fair value (amortized cost $149,402,001 and $162,579,526)
    
    
    144,978,426
    
    
    
    162,890,600Trading at fair value (amortized cost $22,203,883 and $80,671,102)
    
    
    17,399,090
    
    
    
    78,537,285Equity securities trading at fair value (cost $15,159,200 and $65,001,440)
    
    
    11,822,620
    
    
    
    66,325,265Commercial loans at fair value (amortized cost $6,907,368 and $0)
    
    
    2,690,317
    
    
    
    Limited partnerships at equity (cost $98,101,553 and $148,915,402)
    
    
    122,927,697
    
    
    
    188,295,547Short-term investments
    
    
    110,249,779
    
    
    
    165,000Cash and cash equivalents
    
    
    75,672,102
    
    
    
    204,913,343Total cash and investments
    
    
    546,986,243
    
    
    
    701,127,040Accrued investment income
    
    
    4,978,920
    
    
    
    2,590,664Premiums and other receivables, net
    
    
    23,426,525
    
    
    
    26,275,077Receivable for investments disposed
    
    
    25,415,261
    
    
    
    22,885,923Reinsurance receivables on unpaid losses, net
    
    
    213,906,569
    
    
    
    250,129,540Reinsurance receivables on paid losses, net
    
    
    28,429,945
    
    
    
    38,804,022Deferred policy acquisition costs
    
    
    14,663,710
    
    
    
    14,989,585Prepaid reinsurance premiums
    
    
    19,225,185
    
    
    
    21,749,663Deferred income taxes
    
    
    35,514,597
    
    
    
    14,443,675Property, improvements and equipment, net
    
    
    10,033,489
    
    
    
    4,816,836Other assets
    
    
    23,895,902
    
    
    
    10,164,557Total assets
    
    $
    946,476,346
    
    
    $
    1,107,976,582LIABILITIESUnpaid losses and loss adjustment expenses
    
    $
    548,749,589
    
    
    $
    556,535,344Reserve for unearned premiums
    
    
    83,364,396
    
    
    
    87,577,497Ceded reinsurance payable
    
    
    23,809,871
    
    
    
    27,071,178Notes payable
    
    
    100,000,000
    
    
    
    100,000,000Payable for investments acquired
    
    
    
    
    
    
    28,678,666Dividends payable
    
    
    671,059
    
    
    
    815,267Other liabilities
    
    
    25,808,669
    
    
    
    27,853,083Total liabilities
    
    
    782,403,584
    
    
    
    828,531,035SHAREHOLDERS EQUITYCommon stock
    
    
    15,742,215
    
    
    
    15,672,090Paid-in capital
    
    
    49,539,886
    
    
    
    47,313,015Accumulated other comprehensive (loss) income
    
    
    (2,875,317
    )
    
    
    202,196Retained earnings
    
    
    189,702,569
    
    
    
    296,641,235252,109,353
    
    
    
    359,828,536Treasury stock, at cost, 7,333,977 and 6,965,077 shares
    
    
    (88,036,591
    )
    
    
    (80,382,989
    )Total shareholders equity
    
    
    164,072,762
    
    
    
    279,445,547Total liabilities and shareholders equity
    
    $
    946,476,346
    
    
    $
    1,107,976,582
   F-5




---



##### Table of Contents



NYMAGIC, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATONS
 Year ended December 31,2008
    
    
    2007
    
    
    2006Revenues:Net premiums earned
    
    $
    167,072,696
    
    
    $
    166,095,871
    
    
    $
    151,834,141Net investment (loss) income
    
    
    (63,502,847
    )
    
    
    35,489,369
    
    
    
    47,897,224Net realized investment losses
    
    
    (47,664,766
    )
    
    
    (6,902,852
    )
    
    
    (402,554
    )Commission and other income (loss), net
    
    
    275,836
    
    
    
    (4,245,541
    )
    
    
    1,137,873Total revenues
    
    
    56,180,919
    
    
    
    190,436,847
    
    
    
    200,466,684Expenses:Net losses and loss adjustment expenses incurred
    
    
    109,958,363
    
    
    
    89,844,108
    
    
    
    86,135,655Policy acquisition expenses
    
    
    38,669,739
    
    
    
    37,694,535
    
    
    
    31,336,186General and administrative expenses
    
    
    38,611,754
    
    
    
    36,018,289
    
    
    
    31,401,429Interest expense
    
    
    6,716,208
    
    
    
    6,725,542
    
    
    
    6,712,064Total expenses
    
    
    193,956,064
    
    
    
    170,282,474
    
    
    
    155,585,334(Loss) income before income taxes
    
    
    (137,775,145
    )
    
    
    20,154,373
    
    
    
    44,881,350Income tax provision:Current
    
    
    (14,026,280
    )
    
    
    10,508,537
    
    
    
    16,776,694Deferred
    
    
    (19,413,786
    )
    
    
    (3,726,514
    )
    
    
    (1,745,824
    )Total income tax (benefit) expense
    
    
    (33,440,066
    )
    
    
    6,782,023
    
    
    
    15,030,870Net (loss) income
    
    $
    (104,335,079
    )
    
    $
    13,372,350
    
    
    $
    29,850,480Weighted average number of shares of common
stock outstanding-basic
    
    
    8,533,924
    
    
    
    8,895,729
    
    
    
    8,806,928Basic (loss) earnings per share
    
    $
    (12.23
    )
    
    $
    1.50
    
    
    $
    3.39Weighted average number of shares of common
stock outstanding-diluted
    
    
    8,533,924
    
    
    
    9,190,228
    
    
    
    9,177,284Diluted (loss) earnings per share
    
    $
    (12.23
    )
    
    $
    1.46
    
    
    $
    3.25
   F-6




---



##### Table of Contents



NYMAGIC, INC.
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 Year ended December 31,2008
    
    
    2007
    
    
    2006Common stock:Balance, beginning of year
    
    $
    15,672,090
    
    
    $
    15,505,815
    
    
    $
    15,415,790Shares issued
    
    
    70,125
    
    
    
    166,275
    
    
    
    90,025Balance, end of year
    
    
    15,742,215
    
    
    
    15,672,090
    
    
    
    15,505,815Paid-in capital:Balance, beginning of year
    
    $
    47,313,015
    
    
    $
    42,219,900
    
    
    $
    38,683,462Shares issued and other
    
    
    2,226,871
    
    
    
    5,093,115
    
    
    
    3,536,438Balance, end of year
    
    
    49,539,886
    
    
    
    47,313,015
    
    
    
    42,219,900Accumulated other comprehensive (loss) income:Balance, beginning of year
    
    $
    202,196
    
    
    $
    87,432
    
    
    $
    (569,153
    )Unrealized (loss) gain on securities, net of
reclassification adjustment
    
    
    (3,077,513
    )
    
    
    114,764
    
    
    
    656,585Other comprehensive (loss) income
    
    
    (3,077,513
    )
    
    
    114,764
    
    
    
    656,585Balance, end of year
    
    
    (2,875,317
    )
    
    
    202,196
    
    
    
    87,432Retained earnings:Balance, beginning of year
    
    $
    296,641,235
    
    
    $
    286,147,400
    
    
    $
    259,015,028Net (loss) income
    
    
    (104,335,079
    )
    
    
    13,372,350
    
    
    
    29,850,480Dividends declared
    
    
    (2,603,587
    )
    
    
    (2,878,515
    )
    
    
    (2,718,108
    )Balance, end of year
    
    
    189,702,569
    
    
    
    296,641,235
    
    
    
    286,147,400Treasury stock, at cost:Balance, beginning of year
    
    $
    (80,382,989
    )
    
    $
    (73,261,001
    )
    
    $
    (73,261,001
    )Net purchase of treasury shares
    
    
    (7,653,602
    )
    
    
    (7,121,988
    )
    
    
    Balance, end of year
    
    
    (88,036,591
    )
    
    
    (80,382,989
    )
    
    
    (73,261,001
    )Total Shareholders Equity
    
    
    164,072,762
    
    
    
    279,445,547
    
    
    
    270,699,546Comprehensive (loss) income:Net (loss) income
    
    $
    (104,335,079
    )
    
    $
    13,372,350
    
    
    $
    29,850,480Other comprehensive (loss) income
    
    
    (3,077,513
    )
    
    
    114,764
    
    
    
    656,585Comprehensive (loss) income
    
    
    (107,412,592
    )
    
    
    13,487,114
    
    
    
    30,507,065Number of SharesCommon stock, par value $1 each:Issued, beginning of year
    
    
    15,672,090
    
    
    
    15,505,815
    
    
    
    15,415,790Shares issued
    
    
    70,125
    
    
    
    166,275
    
    
    
    90,025Issued, end of year
    
    
    15,742,215
    
    
    
    15,672,090
    
    
    
    15,505,815Common stock, authorized shares, par value $1 each
    
    
    30,000,000
    
    
    
    30,000,000
    
    
    
    30,000,000Common stock, shares outstanding, end of year
    
    
    8,408,238
    
    
    
    8,707,013
    
    
    
    8,858,438Dividends declared per share
    
    $
    .32
    
    
    $
    .32
    
    
    $
    .30
   F-7




---



##### Table of Contents



NYMAGIC, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Year ended December 31,2008
    
    
    2007
    
    
    2006Cash flows from operating activities:Net (loss) income
    
    $
    (104,335,079
    )
    
    $
    13,372,350
    
    
    $
    29,850,480Adjustments to reconcile net income to net cash (used in) provided
by operating activities:Provision for deferred taxes
    
    
    (19,413,786
    )
    
    
    (3,726,514
    )
    
    
    (1,745,824
    )Net realized investment losses
    
    
    47,664,766
    
    
    
    6,902,852
    
    
    
    402,554Equity in loss (earnings) of limited partnerships
    
    
    26,805,322
    
    
    
    (12,985,185
    )
    
    
    (16,474,693
    )Net amortization from bonds and commercial loans
    
    
    487,334
    
    
    
    141,774
    
    
    
    200,614Depreciation and other, net
    
    
    1,414,538
    
    
    
    1,295,852
    
    
    
    968,818Trading portfolio activities
    
    
    78,614,981
    
    
    
    (116,177,935
    )
    
    
    109,763,613Commercial loan activities
    
    
    5,609,915
    
    
    
    
    
    
    
    Loss on abandonment of computer equipment and software
    
    
    
    
    
    
    5,315,965
    
    
    
    Changes in:Premiums and other receivables
    
    
    2,848,552
    
    
    
    2,991,276
    
    
    
    (3,933,720
    )Reinsurance receivables paid and unpaid, net
    
    
    46,597,048
    
    
    
    44,852,353
    
    
    
    (6,098,829
    )Ceded reinsurance payable
    
    
    (3,261,307
    )
    
    
    (17,721,643
    )
    
    
    9,064,476Accrued investment income
    
    
    (2,388,256
    )
    
    
    (556,719
    )
    
    
    792,120Deferred policy acquisition costs
    
    
    325,875
    
    
    
    (1,617,953
    )
    
    
    (1,379,904
    )Prepaid reinsurance premiums
    
    
    2,524,478
    
    
    
    7,829,765
    
    
    
    (7,386,000
    )Other assets
    
    
    (13,731,345
    )
    
    
    (3,311,785
    )
    
    
    (1,343,180
    )Unpaid losses and loss adjustment expenses
    
    
    (7,785,755
    )
    
    
    (22,643,290
    )
    
    
    (9,686,515
    )Reserve for unearned premiums
    
    
    (4,213,101
    )
    
    
    (6,072,330
    )
    
    
    10,411,836Other liabilities
    
    
    (133,227
    )
    
    
    (4,244,598
    )
    
    
    (2,832,280
    )Total adjustments
    
    
    161,966,032
    
    
    
    (119,728,115
    )
    
    
    80,723,086Net cash provided by (used in) operating activities
    
    
    57,630,953
    
    
    
    (106,355,765
    )
    
    
    110,573,566Cash flows from investing activities:Held to maturity fixed maturities matured, repaid and redeemed
    
    
    1,713,687
    
    
    
    
    
    
    
    Available for sale fixed maturities acquired
    
    
    (172,844,616
    )
    
    
    (23,946,795
    )
    
    
    (313,966,624
    )Available for sale fixed maturities sold
    
    
    58,699,634
    
    
    
    179,432,179
    
    
    
    220,876,103Available for sale fixed maturities matured, repaid and redeemed
    
    
    17,651,152
    
    
    
    2,081,000
    
    
    
    15,845,000Capital contributed to limited partnerships
    
    
    (46,459,990
    )
    
    
    (43,750,000
    )
    
    
    (55,570,000
    )Distributions and redemptions from limited partnerships
    
    
    85,022,517
    
    
    
    50,763,951
    
    
    
    55,905,244Net (purchase) sale of short-term investments
    
    
    (111,478,461
    )
    
    
    136,671,984
    
    
    
    (56,575,517
    )Receivable for investments disposed and not yet settled
    
    
    (2,529,338
    )
    
    
    (4,080,290
    )
    
    
    34,206,452Acquisition of property & equipment, net
    
    
    (6,631,191
    )
    
    
    (1,478,683
    )
    
    
    (2,660,398
    )Payable for investments acquired and not yet settled
    
    
    
    
    
    
    
    
    
    
    (9,000,000
    )Deconsolidation of investment in Altrion limited partnership
    
    
    
    
    
    
    
    
    
    
    (6,940,528
    )Net cash (used in) provided by investing activities
    
    
    (176,856,606
    )
    
    
    295,693,346
    
    
    
    (117,880,268
    )Cash flows from financing activities:Proceeds from stock issuance and other
    
    
    2,296,996
    
    
    
    5,259,390
    
    
    
    3,626,463Cash dividends paid to stockholders
    
    
    (2,747,795
    )
    
    
    (2,852,228
    )
    
    
    (2,465,648
    )Net purchase of treasury stock
    
    
    (7,653,602
    )
    
    
    (7,121,988
    )
    
    
    Payable for treasury stock purchased and not yet settled
    
    
    (1,911,187
    )
    
    
    1,911,187
    
    
    
    Net cash (used in) provided by financing activities
    
    
    (10,015,588
    )
    
    
    (2,803,639
    )
    
    
    1,160,815Net (decrease) increase in cash and cash equivalents
    
    
    (129,241,241
    )
    
    
    186,533,942
    
    
    
    (6,145,887
    )Cash and cash equivalents at beginning of year
    
    
    204,913,343
    
    
    
    18,379,401
    
    
    
    24,525,288Cash and cash equivalents at end of year
    
    $
    75,672,102
    
    
    $
    204,913,343
    
    
    $
    18,379,401
   F-8




---



##### Table of Contents



NYMAGIC, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Summary Of Significant Accounting Policies:
 Nature of operations
   Basis of reporting
   Consolidation
    F-9




---



##### Table of Contents



Investments
        Derivatives
  Premium and policy acquisition cost recognition
   F-10




---



##### Table of Contents



Revenue recognition
  Reinsurance
     Depreciation
  Income taxes
  Fair values of financial instruments
  Incurred losses
  Debt issuance costs
   F-11




---



##### Table of Contents



Share-based compensation
 Share-Based Payment
 Basic and diluted earnings per share
  Reclassification
  Effects of recent accounting pronouncements
 Adoption of new accounting pronouncements:
 Fair Value
Measurements
 The Fair Value Option
for Financial Assets and Financial Liabilities
 Accounting for
Income Tax Benefits of Dividends on Share-Based Payment Awards
 Determining the Fair Value of a Financial Asset
When the Market for That Asset Is Not Active Fair
Value Accounting
Changes and Error Corrections
  F-12




---



##### Table of Contents



Amendments to
the Impairment Guidance of EITF Issue No. 99-20 Accounting for Certain Investments in Debt and
Equity Securities,
 The Hierarchy of
Generally Accepted Accounting Principles
 Future adoption of new accounting pronouncements:
 Business
Combinations
 Non-controlling
Interests in Consolidated Financial Statements
 Effective Date of FASB Statement No. 157 Fair Value Measurements
 Disclosures
about Derivative Instruments and Hedging Activities, an Amendment of FASB Statement No. 133
 Accounting for
Financial Guarantee Insurance Contracts Accounting and Reporting by Insurance Enterprise,
 Determining
Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities EITF 03-6-1.
  F-13




---



##### Table of Contents



(2) Investments:
  December 31, 2008
    
    
    Percent
    
    
    December 31, 2007
    
    
    PercentFixed maturities held to maturity (amortized
cost):Mortgage-backed securities (2)
    
    $
    61,246,212
    
    
    
    11.20
    %
    
    $
    
    
    
    
    Total fixed maturities held to maturity
    
    $
    61,246,212
    
    
    
    11.20
    %
    
    $
    
    
    
    
    Fixed maturities available for sale (fair value):U.S. Treasury securities
    
    $
    40,783,969
    
    
    
    7.46
    %
    
    $
    14,335,541
    
    
    
    2.04
    %Municipal obligations
    
    
    90,483,461
    
    
    
    16.54
    %
    
    
    7,810,318
    
    
    
    1.11
    %Corporate securities
    
    
    13,710,996
    
    
    
    2.51
    %
    
    
    5,853,942
    
    
    
    0.83
    %Mortgage-backed securities (2)
    
    
    
    
    
    
    
    
    
    
    134,890,799
    
    
    
    19.25
    %Total fixed maturities available for sale
    
    $
    144,978,426
    
    
    
    26.51
    %
    
    $
    162,890,600
    
    
    
    23.23
    %Fixed maturities trading (fair value):Municipal obligations
    
    $
    17,399,090
    
    
    
    3.18
    %
    
    $
    70,243,560
    
    
    
    10.02
    %Commercial middle market debt (1)
    
    
    
    
    
    
    
    
    
    
    8,293,725
    
    
    
    1.18
    %Total fixed maturities trading
    
    $
    17,399,090
    
    
    
    3.18
    %
    
    $
    78,537,285
    
    
    
    11.20
    %Total fixed maturities
    
    $
    223,623,728
    
    
    
    40.89
    %
    
    $
    241,427,885
    
    
    
    34.43
    %Equity securities trading (fair value):Preferred stock
    
    $
    11,822,620
    
    
    
    2.16
    %
    
    $
    66,325,265
    
    
    
    9.46
    %Total equity securities
    
    $
    11,822,620
    
    
    
    2.16
    %
    
    $
    66,325,265
    
    
    
    9.46
    %Cash and short-term investments
    
    
    185,921,881
    
    
    
    33.99
    %
    
    
    205,078,343
    
    
    
    29.25
    %Total fixed maturities, equity securities, cash
and short-term investments
    
    $
    421,368,229
    
    
    
    77.04
    %
    
    $
    512,831,493
    
    
    
    73.14
    %Commercial loans (fair value) (1)
    
    
    2,690,317
    
    
    
    0.49
    %
    
    
    
    
    
    
    Limited partnership hedge funds (equity)
    
    
    122,927,697
    
    
    
    22.47
    %
    
    
    188,295,547
    
    
    
    26.86
    %Total investment portfolio
    
    $
    546,986,243
    
    
    
    100.00
    %
    
    $
    701,127,040
    
    
    
    100.00
    %
 
 (1)
    
    See Note 1 discussion under Effects of recent accounting pronouncements caption.(2)
    
    See Note 1 discussion under Investments caption.   F-14




---



##### Table of Contents



Weighted
    
    
    AverageAverage
    
    
    FICO
    
    
    D60+
    
    
    CreditLoan to
    
    
    Credit
    
    
    Delinquency
    
    
    Support
    
    
    S&P
    
    
    MoodysSecurity description
    
    Issue date
    
    
    Amortized cost
    
    
    Fair value
    
    
    Value % (1)
    
    
    Score (2)
    
    
    Rate (3)
    
    
    Level (4)
    
    
    Rating
    
    
    RatingAHMA 2006-3
    
    
    7/2006
    
    
    $
    12,213,748
    
    
    $
    8,511,737
    
    
    
    85.9
    
    
    
    704
    
    
    
    31.6
    
    
    
    45.2
    
    
    AAA
    
    AaaCWALT 2005-69
    
    
    11/2005
    
    
    
    7,900,234
    
    
    
    6,051,403
    
    
    
    82.0
    
    
    
    697
    
    
    
    39.7
    
    
    
    49.4
    
    
    AAA
    
    AaaCWALT 2005-76
    
    
    12/2005
    
    
    
    7,865,446
    
    
    
    5,944,599
    
    
    
    82.8
    
    
    
    700
    
    
    
    41.5
    
    
    
    50.5
    
    
    AAA
    
    AaaRALI 2005-QO3
    
    
    10/2005
    
    
    
    7,921,593
    
    
    
    5,528,142
    
    
    
    82.1
    
    
    
    704
    
    
    
    35.3
    
    
    
    48.8
    
    
    AAA
    
    AaaWaMu 2005-AR17
    
    
    12/2005
    
    
    
    6,746,777
    
    
    
    4,639,000
    
    
    
    75.4
    
    
    
    714
    
    
    
    19.7
    
    
    
    47.2
    
    
    AAA
    
    AaaWaMu 2006-AR9
    
    
    7/2006
    
    
    
    9,170,145
    
    
    
    6,229,337
    
    
    
    75.8
    
    
    
    730
    
    
    
    21.4
    
    
    
    27.1
    
    
    AAA
    
    AaaWaMu 2006-AR13
    
    
    9/2006
    
    
    
    9,428,269
    
    
    
    5,425,214
    
    
    
    76.5
    
    
    
    728
    
    
    
    19.2
    
    
    
    27.8
    
    
    AAA
    
    Aaa$
    61,246,212
    
    
    $
    42,329,432
 
 (1)
    
    The dollar-weighted average amortized loan-to-original value of the underlying loans at February 25 2009.(2)
    
    Average FICO of remaining borrowers in the loan pool at February 25, 2009.(3)
    
    The sum of the percentage of loans that are grouped within the 60 days delinquent, 90 days delinquent, foreclosure and real
estate owned categories at February 25, 2009.(4)
    
    The current credit support provided by subordinate ranking tranches within the overall security structure at February 25, 2009.    F-15




---



##### Table of Contents



2008Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueMortgage-backed securities held to maturity
    
    $
    61,246,212
    
    
    $
    
    
    
    $
    (18,916,780
    )
    
    $
    42,329,432U.S. Treasury securities available for sale
    
    
    38,917,878
    
    
    
    1,866,091
    
    
    
    
    
    
    
    40,783,969Municipal obligations available for sale
    
    
    97,166,677
    
    
    
    220,718
    
    
    
    (6,903,934
    )
    
    
    90,483,461Corporate securities available for sale
    
    
    13,317,446
    
    
    
    395,344
    
    
    
    (1,794
    )
    
    
    13,710,996Totals
    
    $
    210,648,213
    
    
    $
    2,482,153
    
    
    $
    (25,822,508
    )
    
    $
    187,307,858
 2007Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueU.S. Treasury securities available for sale
    
    $
    13,938,993
    
    
    $
    408,146
    
    
    $
    (11,598
    )
    
    $
    14,335,541Municipal obligations available for sale
    
    
    7,792,131
    
    
    
    18,187
    
    
    
    
    
    
    
    7,810,318Corporate securities available for sale
    
    
    5,957,603
    
    
    
    59,441
    
    
    
    (163,102
    )
    
    
    5,853,942Mortgage-backed securities available for sale
    
    
    134,890,799
    
    
    
    
    
    
    
    
    
    
    
    134,890,799Totals
    
    $
    162,579,526
    
    
    $
    485,774
    
    
    $
    (174,700
    )
    
    $
    162,890,600
  F-16




---



##### Table of Contents



2008Less than 12 months
    
    
    12 months or longer
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossMortgage-backed securities held to maturity
    
    $
    42,329,432
    
    
    $
    (18,916,780
    )
    
    $
    
    
    
    $
    
    
    
    $
    42,329,432
    
    
    $
    (18,916,780
    )Municipal obligations available for sale
    
    
    79,343,141
    
    
    
    (6,903,934
    )
    
    
    
    
    
    
    
    
    
    
    79,343,141
    
    
    
    (6,903,934
    )Corporate securities available for sale
    
    
    100,068
    
    
    
    (1,794
    )
    
    
    
    
    
    
    
    
    
    
    100,068
    
    
    
    (1,794
    )Total temporarily impaired securities
    
    $
    121,772,641
    
    
    $
    (25,822,508
    )
    
    $
    
    
    
    $
    
    
    
    $
    121,772,641
    
    
    $
    (25,822,508
    )
 2007Less than 12 months
    
    
    12 months or longer
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossU.S. Treasury securities available for sale
    
    $
    
    
    
    $
    
    
    
    $
    3,829,008
    
    
    $
    (11,598
    )
    
    $
    3,829,008
    
    
    $
    (11,598
    )Corporate securities available for sale
    
    
    103,957
    
    
    
    (320
    )
    
    
    4,071,690
    
    
    
    (162,782
    )
    
    
    4,175,647
    
    
    
    (163,102
    )Total temporarily impaired securities
    
    $
    103,957
    
    
    $
    (320
    )
    
    $
    7,900,698
    
    
    $
    (174,380
    )
    
    $
    8,004,655
    
    
    $
    (174,700
    )
   Amortized
    
    
    FairCost
    
    
    ValueDue in one year or less
    
    $
    113,578
    
    
    $
    137,831Due after one year through five years
    
    
    49,272,481
    
    
    
    51,363,514Due after five years through ten years
    
    
    96,368,319
    
    
    
    90,700,355Due after ten years
    
    
    3,647,623
    
    
    
    2,776,726149,402,001
    
    
    
    144,978,426Mortgage-backed securities
    
    
    61,246,212
    
    
    
    42,329,432Totals
    
    $
    210,648,213
    
    
    $
    187,307,858
    F-17




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006(unaudited)
    
    
    (audited)
    
    
    (audited)Total assets
    
    $
    34,046,145
    
    
    $
    44,409,665
    
    
    $
    28,978,975Total liabilities
    
    $
    89,270
    
    
    $
    147,307
    
    
    $
    152,686Total partners capital
    
    $
    33,956,875
    
    
    $
    44,262,358
    
    
    $
    28,826,289Total revenue
    
    $
    725,135
    
    
    $
    10,033,567
    
    
    $
    5,478,485Net income
    
    $
    427,188
    
    
    $
    8,749,649
    
    
    $
    4,739,308
    OwnershipAmount
    
    
    %Alpha Energy Partners Class C
    
    $
    359,265
    
    
    
    4.67Altrion Capital, L.P. (1)
    
    
    33,799,883
    
    
    
    99.41Alydar QP Fund
    
    
    3,015,576
    
    
    
    0.72Brocade Fund, L.P.
    
    
    2,454,966
    
    
    
    3.66Caspian Capital Partners, L.P. (1)
    
    
    3,527,690
    
    
    
    1.89Caspian Select Credit Fund, L.P. (1)
    
    
    4,428,591
    
    
    
    2.09Dolphin Limited Partnership  A
    
    
    1,141,250
    
    
    
    3.94Element Capital US Feeder Fund LLC
    
    
    12,229,772
    
    
    
    14.91Five Mile Capital SIF
    
    
    1,894,243
    
    
    
    3.15Horizon Portfolio, L.P.
    
    
    2,911,066
    
    
    
    2.53Ivory Flagship Fund L.P.
    
    
    2,359,641
    
    
    
    0.72Loeb Arbitrage Fund
    
    
    3,873,392
    
    
    
    1.27Lubben Fund, L.P.
    
    
    2,440,923
    
    
    
    2.03Mariner  CRA Relative Fund (1)
    
    
    551,141
    
    
    
    10.81Mariner Dolphin Special Opportunities Fund (1)
    
    
    2,917,248
    
    
    
    18.23Mariner Opportunities Fund (1)
    
    
    3,702,221
    
    
    
    1.88Mariner Silvermine (1)
    
    
    10,568,554
    
    
    
    38.29Mariner Voyager LP (1)
    
    
    3,618,393
    
    
    
    10.02MKP Credit II, L.P.
    
    
    5,460,447
    
    
    
    1.88Newsmith Credit Fund, LP
    
    
    1,435,786
    
    
    
    8.97Riva Ridge Capital Partners, L.P.
    
    
    7,102,171
    
    
    
    7.48Rockwood Partners, L.P.
    
    
    3,911,453
    
    
    
    3.23SLS Investors
    
    
    1,352,179
    
    
    
    1.59Taconic Opportunity Fund, L.P.
    
    
    1,578,748
    
    
    
    0.08TAMI Macro Fund, L.P.
    
    
    1,348,742
    
    
    
    5.00Wexford Spectrum Fund I, LP
    
    
    4,944,356
    
    
    
    0.53Total limited partnership and limited liability company hedge funds
    
    $
    122,927,697
 
 (1)
    
    Indicates limited partnership or limited liability company hedge fund
directly managed by Mariner Partners, Inc. (Mariner). As of
December 31, 2008, the aggregate net asset value of these investments
was $63,113,721.  F-18




---



##### Table of Contents



Year ended December 31,2008
    
    
    2007
    
    
    2006Realized (losses) gains on investments:Fixed maturities
    
    $
    (46,531,390
    )
    
    $
    (7,138,381
    )
    
    $
    (384,878
    )Short-term investments
    
    
    (1,133,376
    )
    
    
    235,529
    
    
    
    (17,676
    )Net realized investment losses
    
    $
    (47,664,766
    )
    
    $
    (6,902,852
    )
    
    
    (402,554
    )
  Year ended December 31,2008
    
    
    2007
    
    
    2006Unrealized (depreciation) appreciation on fixed maturities
    
    $
    (4,734,649
    )
    
    $
    176,563
    
    
    $
    1,010,131Deferred income tax benefit (expense)
    
    
    1,657,136
    
    
    
    (61,799
    )
    
    
    (353,546
    )Change in unrealized investment (losses) gains, net of
deferred income taxes
    
    $
    (3,077,513
    )
    
    $
    114,764
    
    
    
    656,585
  F-19




---



##### Table of Contents



Year ended December 31,2008
    
    
    2007
    
    
    2006Fixed maturities held to maturity
    
    $
    819,596
    
    
    $
    
    
    
    $
    Fixed maturities available for sale
    
    
    7,390,001
    
    
    
    13,944,630
    
    
    
    11,793,544Trading securities
    
    
    (42,265,670
    )
    
    
    2,302,469
    
    
    
    15,785,074Commercial loans
    
    
    (1,556,937
    )
    
    
    
    
    
    
    Equity in (loss) earnings of limited partnerships
    
    
    (26,805,322
    )
    
    
    12,985,185
    
    
    
    16,474,691Short-term investments
    
    
    2,990,597
    
    
    
    8,687,536
    
    
    
    7,816,937Total investment (loss) income
    
    
    (59,427,735
    )
    
    
    37,919,820
    
    
    
    51,870,246Investment expenses (see note 18)
    
    
    (4,075,112
    )
    
    
    (2,430,451
    )
    
    
    (3,973,022
    )Net investment (loss) income
    
    $
    (63,502,847
    )
    
    $
    35,489,369
    
    
    $
    47,897,224
  Year ended December 31,2008
    
    
    2007
    
    
    2006Interest and dividends earned on trading securities
    
    $
    8,212,419
    
    
    $
    2,932,968
    
    
    $
    5,518,455Net realized (losses) gains on trading securities
    
    
    (40,390,174
    )
    
    
    603,636
    
    
    
    7,384,967Net unrealized depreciation on trading securities
    
    
    (9,020,155
    )
    
    
    (809,992
    )
    
    
    (217,604
    )Other, net
    
    
    (1,067,760
    )
    
    
    (424,143
    )
    
    
    3,099,256Total investment (loss) income from trading activities
    
    $
    (42,265,670
    )
    
    $
    2,302,469
    
    
    $
    15,785,074
 Securities Lending
  General
     F-20




---



##### Table of Contents



(3) Fair Value Measurements:
  Level 1
   Level 2
   Level 3
   F-21




---



##### Table of Contents



Level 1:QuotedPrices in
    
    
    Level 2:Active
    
    
    Significant
    
    
    Level 3:Markets for
    
    
    Other
    
    
    Significant
    
    
    Total atIdentical
    
    
    Observable
    
    
    Unobservable
    
    
    December 31,Assets
    
    
    Inputs
    
    
    Inputs
    
    
    2008Fixed maturities available for sale
    
    $
    40,783,969
    
    
    $
    104,194,457
    
    
    $
    
    
    
    $
    144,978,426Fixed maturities trading
    
    
    
    
    
    
    17,399,090
    
    
    
    
    
    
    
    17,399,090Equity securities trading
    
    
    11,822,620
    
    
    
    
    
    
    
    
    
    
    
    11,822,620Commercial loans
    
    
    
    
    
    
    
    
    
    
    2,690,317
    
    
    
    2,690,317Total
    
    $
    52,606,589
    
    
    $
    121,593,547
    
    
    $
    2,690,317
    
    
    $
    176,890,453
  Year ended December 31, 2008CommercialRMBS
    
    
    Loans
    
    
    TotalBeginning balance
    
    $
    
    
    
    $
    
    
    
    $
    Total gains or losses (realized/unrealized):Included in earnings (or changes in net assets)
    
    
    
    
    
    
    
    
    
    
    Included in other comprehensive income
    
    
    
    
    
    
    
    
    
    
    Purchases, sales, maturities, repayments,
redemptions and amortization
    
    
    
    
    
    
    
    
    
    
    Transfers from Level 3
    
    
    (62,285,058
    )
    
    
    
    
    
    
    (62,285,058
    )Transfers to Level 3
    
    
    62,285,058
    
    
    
    2,690,317
    
    
    
    64,975,375Ending balance
    
    $
    
    
    
    $
    2,690,317
    
    
    $
    2,690,317
  F-22




---



##### Table of Contents



(4) Fiduciary Funds:
   2008
    
    
    2007(unaudited)Cash and short-term investments
    
    $
    38,242
    
    
    $
    7,690,777Premiums receivable
    
    
    20,584,595
    
    
    
    23,646,503Reinsurance and other receivables
    
    
    92,473,524
    
    
    
    95,577,799Total assets
    
    $
    113,096,361
    
    
    $
    126,915,079Due to insurance pool members
    
    
    54,053,792
    
    
    
    66,215,850Reinsurance payable
    
    
    23,667,084
    
    
    
    27,299,729Funds withheld from reinsurers
    
    
    29,205,424
    
    
    
    30,487,673Other liabilities
    
    
    6,170,061
    
    
    
    2,911,827Total liabilities
    
    $
    113,096,361
    
    
    $
    126,915,079
   F-23




---



##### Table of Contents



(5) Insurance Operations:
 Reinsurance transactions
      Reinsurer
    
    Amounts
    
    
    A.M. Best Rating(in millions)Lloyds Syndicates (1)
    
    $
    57.2
    
    
    A (Excellent)Swiss Reinsurance America Corporation
    
    
    15.0
    
    
    A (Excellent)Transatlantic Reinsurance Company
    
    
    7.9
    
    
    A (Excellent)Platinum Underwriters Reinsurance Company
    
    
    7.3
    
    
    A (Excellent)FM Global (Arkwright)
    
    
    4.3
    
    
    A+ (Superior)XL Reinsurance America Inc.
    
    
    4.2
    
    
    A (Excellent)Munich Reinsurance America
    
    
    4.0
    
    
    A+ (Superior)White Mountains Reinsurance Company of America
    
    
    3.9
    
    
    A- (Excellent)General Reinsurance Corporation
    
    
    3.8
    
    
    A++ (Superior)Liberty Mutual Insurance Company
    
    
    3.7
    
    
    A (Excellent)Berkley Insurance Company
    
    
    2.9
    
    
    A+ (Superior)Allianz Global Corporate & Specialty
    
    
    2.4
    
    
    A+ (Superior)Everest Reinsurance
    
    
    2.0
    
    
    A+ (Superior)Total
    
    $
    118.6
 (1)
    
    Lloyds maintains a trust fund, which was established for the benefit of all United States
ceding companies. Lloyds receivables represent amounts due from approximately 100 different
Lloyds syndicates.      F-24




---



##### Table of Contents



Gross
    
    
    Ceded
    
    
    Assumed
    
    
    
    
    
    
    Percentage(direct)
    
    
    to other
    
    
    from other
    
    
    
    
    
    
    of AssumedYear ended
    
    Amount
    
    
    Companies
    
    
    Companies
    
    
    Net amount
    
    
    to NetDecember 31, 2008
    
    $
    209,078,072
    
    
    $
    51,869,681
    
    
    $
    8,175,680
    
    
    $
    165,384,071
    
    
    
    5
    %December 31, 2007
    
    
    219,599,494
    
    
    
    60,534,715
    
    
    
    8,788,527
    
    
    
    167,853,306
    
    
    
    5
    %December 31, 2006
    
    
    230,779,540
    
    
    
    86,449,224
    
    
    
    10,529,662
    
    
    
    154,859,978
    
    
    
    7
    %
  Gross
    
    
    Ceded
    
    
    Assumed
    
    
    
    
    
    
    Percentage(direct)
    
    
    to other
    
    
    from other
    
    
    
    
    
    
    of AssumedYear ended
    
    Amount
    
    
    Companies
    
    
    Companies
    
    
    Net amount
    
    
    to NetDecember 31, 2008
    
    $
    215,121,723
    
    
    $
    54,404,393
    
    
    $
    6,355,366
    
    
    $
    167,072,696
    
    
    
    4
    %December 31, 2007
    
    
    225,002,917
    
    
    
    68,364,479
    
    
    
    9,457,433
    
    
    
    166,095,871
    
    
    
    6
    %December 31, 2006
    
    
    216,737,670
    
    
    
    79,063,222
    
    
    
    14,159,693
    
    
    
    151,834,141
    
    
    
    9
    %
  Unpaid losses
  Year ended December 31,2008
    
    
    2007
    
    
    2006(In thousands)Net liability for losses and loss adjustment expenses at beginning of year
    
    $
    306,405
    
    
    $
    292,941
    
    
    $
    289,217Provision for losses and loss adjustment expenses occurring in current year
    
    
    107,275
    
    
    
    103,664
    
    
    
    93,803Increase (decrease) in estimated losses and loss adjustment expenses for
claims occurring in prior years (1)
    
    
    2,683
    
    
    
    (13,820
    )
    
    
    (7,667
    )Net loss and loss adjustment expenses incurred
    
    
    109,958
    
    
    
    89,844
    
    
    
    86,136Less:Losses and loss adjustment expense payments for claims occurring during:Current year
    
    
    9,887
    
    
    
    12,136
    
    
    
    9,641Prior years
    
    
    71,633
    
    
    
    64,244
    
    
    
    72,77181,520
    
    
    
    76,380
    
    
    
    82,412Net liability for losses and loss adjustment expenses at end of year
    
    
    334,843
    
    
    
    306,405
    
    
    
    292,941Ceded unpaid losses and loss adjustment expenses at end of year
    
    
    213,907
    
    
    
    250,130
    
    
    
    286,238Gross unpaid losses and loss adjustment expenses at end of year
    
    $
    548,750
    
    
    $
    556,535
    
    
    $
    579,179
 
 (1)
    
    The adjustment to the consolidated liability for losses and loss
adjustment expenses for losses occurring in prior years reflects the
net effect of the resolution of losses for other than full reserve
value and subsequent readjustments of loss values.  F-25




---



##### Table of Contents



F-26




---



##### Table of Contents



Salvage and subrogation
  Deferred policy acquisition costs
  (6) Property, Improvements and Equipment, Net:
  2008
    
    
    2007Office furniture and equipment
    
    $
    2,401,612
    
    
    $
    1,706,122Computer equipment
    
    
    2,105,196
    
    
    
    1,604,437Computer software
    
    
    4,440,945
    
    
    
    1,245,014Leasehold improvements
    
    
    5,795,382
    
    
    
    3,695,76414,743,135
    
    
    
    8,251,337Less: accumulated depreciation and amortization
    
    
    (4,709,646
    )
    
    
    (3,434,501
    )Property, improvements and equipment, net
    
    $
    10,033,489
    
    
    $
    4,816,836
  Accounting for the Impairment or Disposal of Long-Lived Assets.
  F-27




---



##### Table of Contents



(7) Income Taxes:
  December 31, 2008
    
    
    December 31, 2007Deferred Tax Assets:Loss reserves
    
    $
    13,557,347
    
    
    $
    13,106,353Unearned premiums
    
    
    4,489,745
    
    
    
    4,607,948Net operating loss carryforwards
    
    
    5,880,130
    
    
    
    4,589,456Capital loss carryforwards
    
    
    12,530,316
    
    
    
    Bad debt reserve
    
    
    1,986,752
    
    
    
    564,356Unrealized depreciation of investments
    
    
    20,418,996
    
    
    
    2,531,762Hedge fund loss
    
    
    3,862,875
    
    
    
    Deferred compensation
    
    
    2,187,622
    
    
    
    3,058,090Other
    
    
    
    
    
    
    251,237Deferred tax assets
    
    
    64,913,783
    
    
    
    28,709,202Less: Valuation allowance
    
    
    23,527,654
    
    
    
    4,998,520Total deferred tax assets
    
    
    41,386,129
    
    
    
    23,710,682Deferred Tax Liabilities:Deferred policy acquisition costs
    
    
    5,132,299
    
    
    
    5,246,355Hedge fund income
    
    
    
    
    
    
    3,339,644Accrued salvage and subrogation
    
    
    208,408
    
    
    
    238,882Other
    
    
    530,825
    
    
    
    442,126Total deferred tax liabilities
    
    
    5,871,532
    
    
    
    9,267,007Net deferred tax assets
    
    $
    35,514,597
    
    
    $
    14,443,675
   December 31, 2008
    
    
    December 31, 2007
    
    
    December 31, 2006Balance, beginning of year
    
    $
    4,998,520
    
    
    $
    4,193,440
    
    
    $
    4,176,558Change in valuation allowance
    
    
    18,529,134
    
    
    
    805,080
    
    
    
    16,882Balance, end of period
    
    $
    23,527,654
    
    
    $
    4,998,520
    
    
    $
    4,193,440
   F-28




---



##### Table of Contents



Year ended December 31,2007
    
    
    2007
    
    
    2006Income taxes at the federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Tax exempt interest and dividend received deduction
    
    
    1.4
    
    
    
    (1.1
    )
    
    
    (0.2
    )Valuation allowance
    
    
    (13.5
    )
    
    
    4.0
    
    
    
    0.0State taxes
    
    
    0.7
    
    
    
    (4.1
    )
    
    
    (1.0
    )Other, net
    
    
    0.7
    
    
    
    (0.1
    )
    
    
    (0.3
    )Income tax provisions
    
    
    24.3
    %
    
    
    33.7
    %
    
    
    33.5
    %
      (8) Statutory Income and Surplus:
   Combined
    
    
    Combined
    
    
    DividendsStatutory
    
    
    Statutory
    
    
    DeclaredYear ended
    
    Net (Loss) Income
    
    
    Surplus
    
    
    To ParentDecember 31, 2008 (unaudited)
    
    $
    (38,487,000
    )
    
    $
    189,383,000
    
    
    $
    December 31, 2007
    
    $
    25,654,000
    
    
    $
    207,233,000
    
    
    $
    15,745,000December 31, 2006
    
    $
    28,880,000
    
    
    $
    197,289,000
    
    
    $
    17,600,000
     F-29




---



##### Table of Contents



(9) Employee Retirement Plans:
  (10) Debt:
     (11) Commitments:
   Amount2009
    
    
    4,281,8162010
    
    
    4,209,1292011
    
    
    4,182,9232012
    
    
    4,224,4712013
    
    
    4,325,742Thereafter
    
    
    11,107,413Total
    
    $
    32,331,494
     F-30




---



##### Table of Contents



(12) Comprehensive Income:
  Year ended December 31,2008
    
    
    2007
    
    
    2006Net (loss) income
    
    $
    (104,335,079
    )
    
    $
    13,372,350
    
    
    $
    29,850,480Other comprehensive (loss) income, net of deferred taxes:Unrealized holding (losses) gains on securities, net
of deferred tax (benefit) expense of $(5,809,488),
$(2,354,199) and $212,652
    
    
    (46,589,927
    )
    
    
    (4,372,090
    )
    
    
    394,925Less: reclassification adjustment for losses
realized in net income, net of tax benefit of
$4,152,352, $2,415,998 and $140,894
    
    
    (43,512,414
    )
    
    
    (4,486,854
    )
    
    
    (261,660
    )Other comprehensive (loss) income
    
    
    (3,077,513
    )
    
    
    114,764
    
    
    
    656,585Comprehensive (loss) income
    
    $
    (107,412,592
    )
    
    $
    13,487,114
    
    
    $
    30,507,065
  (13) Common Stock Repurchase Plan and Shareholders Equity:
      F-31




---



##### Table of Contents



(14) Earnings per share:
  December 31, 2008
    
    
    December 31, 2007
    
    
    December 31, 2006Weighted
    
    
    
    
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    AverageNet
    
    
    Shares
    
    
    
    
    
    
    Net
    
    
    Shares
    
    
    
    
    
    
    Net
    
    
    SharesLoss
    
    
    Outstanding
    
    
    Per
    
    
    Income
    
    
    Outstanding
    
    
    Per
    
    
    Income
    
    
    Outstanding
    
    
    Per(Numerator)
    
    
    (Denominator)
    
    
    Share
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    Share
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    Share(In thousands, except for per share data)Basic EPS
    
    $
    (104,335
    )
    
    
    8,534
    
    
    $
    (12.23
    )
    
    $
    13,372
    
    
    
    8,896
    
    
    $
    1.50
    
    
    $
    29,850
    
    
    
    8,807
    
    
    $
    3.39Effect of dilutive
securities:Equity awards and
purchased options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    294
    
    
    $
    (.04
    )
    
    
    
    
    
    
    370
    
    
    $
    (.14
    )Diluted EPS
    
    $
    (104,335
    )
    
    
    8,534
    
    
    $
    (12.23
    )
    
    $
    13,372
    
    
    
    9,190
    
    
    $
    1.46
    
    
    $
    29,850
    
    
    
    9,177
    
    
    $
    3.25
 (15) Incentive Compensation:
 Share-based Plans:
 Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
  2004 Long-Term Incentive Plan
    F-32




---



##### Table of Contents



December 31, 2008
    
    
    December 31, 2007
    
    
    December 31, 2006Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage Grant
    
    
    
    
    
    
    Average Grant
    
    
    
    
    
    
    Average GrantDate Fair
    
    
    
    
    
    
    Date Fair
    
    
    
    
    
    
    Date FairNumber of
    
    
    Value
    
    
    Number of
    
    
    Value
    
    
    Number of
    
    
    ValueRSUs and DSUs
    
    Shares
    
    
    Per Share
    
    
    Shares
    
    
    Per Share
    
    
    Shares
    
    
    Per ShareOutstanding, beginning
of year
    
    
    212,924
    
    
    $
    28.68
    
    
    
    180,959
    
    
    $
    25.73
    
    
    
    144,236
    
    
    $
    24.31Granted
    
    
    73,059
    
    
    $
    22.42
    
    
    
    51,365
    
    
    $
    39.47
    
    
    
    55,123
    
    
    $
    30.03Vested and Converted to
Shares of Common Stock
    
    
    (28,250
    )
    
    $
    30.46
    
    
    
    (19,400
    )
    
    $
    29.74
    
    
    
    (18,400
    )
    
    $
    27.49Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding, end of year
    
    
    257,733
    
    
    $
    26.71
    
    
    
    212,924
    
    
    $
    28.68
    
    
    
    180,959
    
    
    $
    25.73Nonvested, end of year
    
    
    136,900
    
    
    $
    27.14
    
    
    
    133,200
    
    
    $
    29.84
    
    
    
    136,600
    
    
    $
    26.10
    F-33




---



##### Table of Contents



1991 and 2002 Stock Option Plans
    December 31, 2008
    
    
    December 31, 2007
    
    
    December 31, 2006Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseNumber of
    
    
    Price
    
    
    Number of
    
    
    Price
    
    
    Number of
    
    
    PriceShares Under Option
    
    Shares
    
    
    Per Share
    
    
    Shares
    
    
    Per Share
    
    
    Shares
    
    
    Per ShareOutstanding, beginning
of year
    
    
    195,825
    
    
    $
    15.69
    
    
    
    333,200
    
    
    $
    15.43
    
    
    
    407,850
    
    
    $
    15.26Granted
    
    
    20,000
    
    
    $
    22.82
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (29,875
    )
    
    $
    15.58
    
    
    
    (136,725
    )
    
    $
    15.07
    
    
    
    (72,025
    )
    
    $
    14.46Forfeited
    
    
    
    
    
    
    
    
    
    
    (650
    )
    
    $
    14.47
    
    
    
    (2,625
    )
    
    $
    14.47Outstanding, end of year
    
    
    185,950
    
    
    $
    16.48
    
    
    
    195,825
    
    
    $
    15.69
    
    
    
    333,200
    
    
    $
    15.43Exercisable, end of year
    
    
    165,950
    
    
    $
    15.71
    
    
    
    193,325
    
    
    $
    15.56
    
    
    
    323,200
    
    
    $
    15.22
  Other Plans:
 Employee Stock Purchase Plan
   F-34




---



##### Table of Contents



Phantom Stock Plan
  Executive Compensation Agreements:
   (16) Segment Information:
    F-35




---



##### Table of Contents



Year ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Income
    
    
    
    
    
    
    Income
    
    
    
    
    
    
    IncomeSegments
    
    Revenues
    
    
    (Loss)
    
    
    Revenues
    
    
    (Loss)
    
    
    Revenues
    
    
    (Loss)Ocean marine
    
    $
    64,861
    
    
    $
    29,712
    
    
    $
    71,998
    
    
    $
    29,141
    
    
    $
    78,898
    
    
    $
    31,691Inland marine/Fire
    
    
    5,714
    
    
    
    (381
    )
    
    
    7,016
    
    
    
    1,084
    
    
    
    7,792
    
    
    
    (53
    )Other liability
    
    
    96,430
    
    
    
    (7,493
    )
    
    
    87,388
    
    
    
    11,971
    
    
    
    65,402
    
    
    
    3,721Aircraft
    
    
    222
    
    
    
    (3,239
    )
    
    
    108
    
    
    
    (3,225
    )
    
    
    284
    
    
    
    (455
    )Subtotal
    
    
    167,227
    
    
    
    18,599
    
    
    
    166,510
    
    
    
    38,971
    
    
    
    152,376
    
    
    
    34,904Other income (loss), net
    
    
    122
    
    
    
    122
    
    
    
    (4,659
    )
    
    
    (4,659
    )
    
    
    596
    
    
    
    596Net investment (loss) income
    
    
    (63,503
    )
    
    
    (63,503
    )
    
    
    35,489
    
    
    
    35,489
    
    
    
    47,897
    
    
    
    47,897Net realized investment
losses
    
    
    (47,665
    )
    
    
    (47,665
    )
    
    
    (6,903
    )
    
    
    (6,903
    )
    
    
    (403
    )
    
    
    (403
    )General and administrative
expenses
    
    
    
    
    
    
    (38,612
    )
    
    
    
    
    
    
    (36,018
    )
    
    
    
    
    
    
    (31,401
    )Interest expense
    
    
    
    
    
    
    (6,716
    )
    
    
    
    
    
    
    (6,726
    )
    
    
    
    
    
    
    (6,712
    )Income tax benefit (expense)
    
    
    
    
    
    
    33,440
    
    
    
    
    
    
    
    (6,782
    )
    
    
    
    
    
    
    (15,031
    )Total
    
    $
    56,181
    
    
    $
    (104,335
    )
    
    $
    190,437
    
    
    $
    13,372
    
    
    $
    200,466
    
    
    $
    29,850
  2008
    
    
    2007
    
    
    2006(in thousands)United States
    
    $
    204,769
    
    
    $
    216,417
    
    
    $
    226,352Europe
    
    
    3,096
    
    
    
    5,659
    
    
    
    9,084Asia
    
    
    1,161
    
    
    
    1,751
    
    
    
    2,647Latin America
    
    
    388
    
    
    
    313
    
    
    
    479Other
    
    
    7,840
    
    
    
    4,248
    
    
    
    2,747Total Gross Written Premiums
    
    $
    217,254
    
    
    $
    228,388
    
    
    $
    241,309
  F-36




---



##### Table of Contents



(17) Quarterly Financial Data (unaudited):
  Three Months EndedMarch 31,
    
    
    June 30,
    
    
    Sept. 30,
    
    
    Dec. 31,2008
    
    
    2008
    
    
    2008
    
    
    2008(in thousands, except per share data)Total revenues
    
    $
    (300
    )
    
    $
    48,981
    
    
    $
    (13,953
    )
    
    $
    21,453Loss before income taxes
    
    $
    (46,599
    )
    
    $
    (8,750
    )
    
    $
    (63,470
    )
    
    $
    (18,955
    )Net loss
    
    $
    (29,748
    )
    
    $
    (4,746
    )
    
    $
    (50,074
    )
    
    $
    (19,767
    )Basic loss per share
    
    $
    (3.42
    )
    
    $
    (.55
    )
    
    $
    (5.96
    )
    
    $
    (2.36
    )Diluted loss per share
    
    $
    (3.42
    )
    
    $
    (.55
    )
    
    $
    (5.96
    )
    
    $
    (2.36
    )
 Three Months EndedMarch 31,
    
    
    June 30,
    
    
    Sept. 30,
    
    
    Dec. 31,2007
    
    
    2007
    
    
    2007
    
    
    2007(in thousands, except per share data)Total revenues
    
    $
    52,101
    
    
    $
    52,558
    
    
    $
    48,963
    
    
    $
    36,815Income (loss) before income taxes
    
    $
    11,556
    
    
    $
    15,904
    
    
    $
    5,751
    
    
    $
    (13,056
    )Net income (loss)
    
    $
    7,519
    
    
    $
    10,325
    
    
    $
    3,799
    
    
    $
    (8,270
    )Basic earnings (loss) per share
    
    $
    .85
    
    
    $
    1.16
    
    
    $
    .43
    
    
    $
    (.93
    )Diluted earnings (loss) per share
    
    $
    .82
    
    
    $
    1.12
    
    
    $
    .41
    
    
    $
    (.93
    )
 (18) Related Party Transactions:
     F-37




---



##### Table of Contents



F-38




---



##### Table of Contents



(19) Legal Proceedings:
    F-39




---



##### Table of Contents



(20) Subsequent Event:
    F-40




---



##### Table of Contents



FINANCIAL STATEMENT SCHEDULES
 
 SCHEDULE II  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
 NYMAGIC, INC.
 Balance Sheets
  December 31,
    
    
    December 31,2008
    
    
    2007Assets:Cash
    
    $
    10,851,532
    
    
    $
    65,597,032Investments
    
    
    43,380,057
    
    
    
    54,766,256Total cash and investments
    
    
    54,231,589
    
    
    
    120,363,288Investment in subsidiaries
    
    
    179,150,176
    
    
    
    237,489,115Due from subsidiaries
    
    
    13,531,308
    
    
    
    18,700,906Premiums receivable
    
    
    6,099,930
    
    
    
    Receivable for investments disposed
    
    
    2,620,394
    
    
    
    Computer software
    
    
    3,133,069
    
    
    
    Other assets
    
    
    7,753,800
    
    
    
    6,423,519Total assets
    
    $
    266,520,266
    
    
    $
    382,976,828Liabilities:Notes payable
    
    $
    100,000,000
    
    
    $
    100,000,000Dividend payable
    
    
    671,059
    
    
    
    815,267Other liabilities
    
    
    1,776,445
    
    
    
    2,716,014Total liabilities
    
    
    102,447,504
    
    
    
    103,531,281Shareholders equity:Common stock
    
    
    15,742,215
    
    
    
    15,672,090Paid-in capital
    
    
    49,539,886
    
    
    
    47,313,015Accumulated other comprehensive (loss) income
    
    
    (2,875,317
    )
    
    
    202,196Retained earnings
    
    
    189,702,569
    
    
    
    296,641,235Treasury stock
    
    
    (88,036,591
    )
    
    
    (80,382,989
    )Total shareholders equity
    
    
    164,072,762
    
    
    
    279,445,547Total liabilities and shareholders equity
    
    $
    266,520,266
    
    
    $
    382,976,828
  F-41




---



##### Table of Contents



FINANCIAL STATEMENT SCHEDULES
SCHEDULE II  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NYMAGIC, INC.
Statements of Operations
 Year ended December 31,2008
    
    
    2007
    
    
    2006Revenues:Cash dividends from subsidiaries
    
    $
    
    
    
    $
    15,745,000
    
    
    $
    18,500,000Net investment and other (loss) income
    
    
    (9,086,940
    )
    
    
    12,241,488
    
    
    
    7,763,602(9,086,940
    )
    
    
    27,986,488
    
    
    
    26,263,602Expenses:General and administrative expenses
    
    
    5,206,095
    
    
    
    6,023,143
    
    
    
    3,686,841Interest expense
    
    
    6,715,354
    
    
    
    6,701,711
    
    
    
    6,688,932Income tax (benefit) expense
    
    
    (4,434,736
    )
    
    
    453,140
    
    
    
    (608,232
    )7,486,713
    
    
    
    13,177,994
    
    
    
    9,767,541(Loss) income before equity income
    
    
    (16,573,653
    )
    
    
    14,808,494
    
    
    
    16,496,061Equity in undistributed (loss)
earning of subsidiaries
    
    
    (87,761,426
    )
    
    
    (1,436,144
    )
    
    
    13,354,419Net (loss) income
    
    $
    (104,335,079
    )
    
    $
    13,372,350
    
    
    $
    29,850,480
  F-42




---



##### Table of Contents



FINANCIAL STATEMENT SCHEDULES
SCHEDULE II  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NYMAGIC, INC.
Statements of Cash Flows
 Year ended December 31,2008
    
    
    2007
    
    
    2006Cash flows from operating activities:Net (loss) income
    
    $
    (104,335,079
    )
    
    $
    13,372,350
    
    
    $
    29,850,480Adjustments to net income to cash provided by operating
activities:Equity in undistributed loss (earnings) of subsidiaries
    
    
    87,761,426
    
    
    
    1,436,144
    
    
    
    (13,354,419
    )Equity in loss (earnings) of limited partnerships
    
    
    226,352
    
    
    
    (9,032,711
    )
    
    
    (4,986,865
    )(Increase) decrease in due from subsidiaries
    
    
    5,169,598
    
    
    
    2,282,876
    
    
    
    (5,229,654
    )(Increase) in premiums receivable
    
    
    (6,099,930
    )
    
    
    
    
    
    
    (Increase) decrease in other assets
    
    
    (1,330,281
    )
    
    
    634,200
    
    
    
    (988,934
    )Increase (decrease) in other liabilities
    
    
    971,618
    
    
    
    (863,124
    )
    
    
    (124,569
    )Net cash (used in) provided by operating activities
    
    
    (17,636,296
    )
    
    
    7,829,735
    
    
    
    5,166,039Cash flows from investing activities:Net (purchase) sale of other investments
    
    
    (1,811,776
    )
    
    
    65,941,989
    
    
    
    (2,326,169
    )Limited partnerships sold (acquired)
    
    
    12,971,623
    
    
    
    (6,250,000
    )
    
    
    (40,029,555
    )(Increase) decrease in receivable for investments disposed
    
    
    (2,620,394
    )
    
    
    
    
    
    
    34,735,775Acquisition of computer software
    
    
    (3,133,069
    )
    
    
    
    
    
    
    Investment in subsidiary
    
    
    (32,500,000
    )
    
    
    
    
    
    
    1,607,582Net cash (used in) provided by investing activities
    
    
    (27,093,616
    )
    
    
    59,691,989
    
    
    
    (6,012,367
    )Cash flows in financing activities:Proceeds from stock issuance and other
    
    
    2,296,996
    
    
    
    5,259,390
    
    
    
    3,626,463Cash dividends paid to stockholders
    
    
    (2,747,795
    )
    
    
    (2,852,228
    )
    
    
    (2,465,648
    )Net purchase of treasury stock
    
    
    (7,653,602
    )
    
    
    (7,121,988
    )
    
    
    (Decrease) increase in payable for treasury stock purchased
    
    
    (1,911,187
    )
    
    
    1,911,187
    
    
    
    Net cash (used in) provided by financing activities
    
    
    (10,015,588
    )
    
    
    (2,803,639
    )
    
    
    1,160,815Net (decrease) increase in cash
    
    
    (54,745,500
    )
    
    
    64,718,085
    
    
    
    314,487Cash at beginning of period
    
    
    65,597,032
    
    
    
    878,947
    
    
    
    564,460Cash at end of period
    
    $
    10,851,532
    
    
    $
    65,597,032
    
    
    $
    878,947
   F-43




---



##### Table of Contents



NYMAGIC, INC.
 
 SCHEDULE III  SUPPLEMENTARY INSURANCE INFORMATION
  Column A
    
    
    Column B
    
    
    Column C
    
    
    Column D
    
    
    Column E
    
    
    Column FOTHERFUTURE POLICY
    
    
    
    
    
    
    POLICYDEFERRED
    
    
    BENEFITS,
    
    
    
    
    
    
    CLAIMSPOLICY
    
    
    LOSSES
    
    
    
    
    
    
    ANDACQUISITION
    
    
    CLAIMS AND
    
    
    UNEARNED
    
    
    BENEFITS
    
    
    PREMIUMSEGMENTS
    
    
    COST
    
    
    LOSS EXPENSES
    
    
    PREMIUMS
    
    
    PAYABLE
    
    
    REVENUE(caption 7)
    
    
    (caption 13-a-1)
    
    
    (caption 13-a-2)
    
    
    (caption 13-a-3)
    
    
    (caption 1)2008
    
    Ocean marine
    
    $
    3,948
    
    
    $
    169,478
    
    
    $
    27,966
    
    
    
    
    
    
    $
    64,713Inland marine/Fire
    
    
    227
    
    
    
    21,057
    
    
    
    6,396
    
    
    
    
    
    
    
    5,710Other liability
    
    
    10,489
    
    
    
    239,026
    
    
    
    49,002
    
    
    
    
    
    
    
    96,428Aircraft
    
    
    
    
    
    
    119,189
    
    
    
    
    
    
    
    
    
    
    
    222Total
    
    $
    14,664
    
    
    $
    548,750
    
    
    $
    83,364
    
    
    $
    
    
    
    $
    167,0732007
    
    Ocean marine
    
    $
    5,370
    
    
    $
    197,511
    
    
    $
    34,985
    
    
    
    
    
    
    $
    71,637Inland marine/Fire
    
    
    521
    
    
    
    22,693
    
    
    
    8,512
    
    
    
    
    
    
    
    6,978Other liability
    
    
    9,099
    
    
    
    211,182
    
    
    
    44,080
    
    
    
    
    
    
    
    87,373Aircraft
    
    
    
    
    
    
    125,149
    
    
    
    
    
    
    
    
    
    
    
    108Total
    
    $
    14,990
    
    
    $
    556,535
    
    
    $
    87,577
    
    
    $
    
    
    
    $
    166,0962006
    
    Ocean marine
    
    $
    5,907
    
    
    $
    212,581
    
    
    $
    38,760
    
    
    
    
    
    
    $
    78,350Inland marine/Fire
    
    
    363
    
    
    
    26,038
    
    
    
    9,514
    
    
    
    
    
    
    
    7,793Other liability
    
    
    7,102
    
    
    
    204,600
    
    
    
    45,376
    
    
    
    
    
    
    
    65,402Aircraft
    
    
    
    
    
    
    135,960
    
    
    
    
    
    
    
    
    
    
    
    289Total
    
    $
    13,372
    
    
    $
    579,179
    
    
    $
    93,650
    
    
    $
    
    
    
    $
    151,834
 Column A
    
    
    Column G
    
    
    Column H
    
    
    Column I
    
    
    Column J
    
    
    Column KBENEFITS,
    
    
    AMORTIZATIONCLAIMS,
    
    
    OFLOSSES
    
    
    DEFERREDNET
    
    
    AND
    
    
    POLICY
    
    
    OTHERINVESTMENT
    
    
    SETTLEMENT
    
    
    ACQUISITION
    
    
    OPERATING
    
    
    PREMIUMSSEGMENTS
    
    
    (LOSS) INCOME
    
    
    EXPENSES
    
    
    COSTS
    
    
    EXPENSES
    
    
    WRITTEN(caption 2)
    
    
    (caption 4)2008
    
    Ocean marine
    
    
    
    
    
    $
    21,823
    
    
    $
    13,326
    
    
    
    
    
    
    $
    59,200Inland marine/Fire
    
    
    
    
    
    
    5,096
    
    
    
    999
    
    
    
    
    
    
    
    4,538Other liability
    
    
    
    
    
    
    79,583
    
    
    
    24,340
    
    
    
    
    
    
    
    101,424Aircraft
    
    
    
    
    
    
    3,456
    
    
    
    5
    
    
    
    
    
    
    
    222Total
    
    $
    (63,503
    )
    
    $
    109,958
    
    
    $
    38,670
    
    
    $
    38,612
    
    
    $
    165,3842007
    
    Ocean marine
    
    
    
    
    
    $
    27,723
    
    
    $
    15,134
    
    
    
    
    
    
    $
    68,192Inland marine/Fire
    
    
    
    
    
    
    4,810
    
    
    
    1,122
    
    
    
    
    
    
    
    6,935Other liability
    
    
    
    
    
    
    53,988
    
    
    
    21,429
    
    
    
    
    
    
    
    92,618Aircraft
    
    
    
    
    
    
    3,323
    
    
    
    10
    
    
    
    
    
    
    
    108Total
    
    $
    35,489
    
    
    $
    89,844
    
    
    $
    37,695
    
    
    $
    36,018
    
    
    $
    167,8532006
    
    Ocean marine
    
    
    
    
    
    $
    31,065
    
    
    $
    16,142
    
    
    
    
    
    
    $
    75,243Inland marine/Fire
    
    
    
    
    
    
    7,036
    
    
    
    809
    
    
    
    
    
    
    
    7,097Other liability
    
    
    
    
    
    
    47,304
    
    
    
    14,377
    
    
    
    
    
    
    
    72,231Aircraft
    
    
    
    
    
    
    731
    
    
    
    8
    
    
    
    
    
    
    
    289Total
    
    $
    47,897
    
    
    $
    86,136
    
    
    $
    31,336
    
    
    $
    31,401
    
    
    $
    154,860
  F-44




---



##### Table of Contents



NYMAGIC, INC.
 
 SCHEDULE V  VALUATION AND QUALIFYING ACCOUNTS
 COLUMN A
    
    COLUMN B
    
    
    COLUMN C
    
    
    COLUMN D
    
    
    COLUMN EBalance at
    
    
    
    
    
    
    
    
    
    
    Balance atbeginning
    
    
    
    
    
    
    
    
    
    
    close ofDESCRIPTION
    
    of period
    
    
    Additions
    
    
    Deductions
    
    
    PeriodDecember 31, 2008
Allowance for
doubtful accounts
    
    $
    14,366,923
    
    
    $
    15,647,193
    
    
    $
    (8,331,002
    )
    
    $
    21,683,114December 31, 2007
Allowance for
doubtful accounts
    
    $
    14,151,028
    
    
    $
    3,679,854
    
    
    $
    (3,463,959
    )
    
    $
    14,366,923December 31, 2006
Allowance for
doubtful accounts
    
    $
    17,016,018
    
    
    $
    2,958,349
    
    
    $
    (5,823,339
    )
    
    $
    14,151,028
  NYMAGIC, INC.
 
 SCHEDULE VI  SUPPLEMENTARY INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS
 (In thousands)RESERVE FORDEFERRED
    
    
    UNPAIDAFFILIATION
    
    POLICY
    
    
    CLAIMS
    
    
    
    
    
    
    UNEARNED
    
    
    NET
    
    
    NETWITH
    
    ACQUISITION
    
    
    AND CLAIMS
    
    
    
    
    
    
    PREMIUM
    
    
    EARNED
    
    
    INVESTMENTREGISTRANT
    
    COSTS
    
    
    EXPENSES
    
    
    DISCOUNT
    
    
    RESERVE
    
    
    PREMIUMS
    
    
    (LOSS) INCOMEDECEMBER 31, 2008
CONSOLIDATED
SUBSIDIARIES
    
    $
    14,664
    
    
    $
    548,750
    
    
    $
    
    
    
    $
    83,364
    
    
    $
    167,073
    
    
    $
    (56,106
    )DECEMBER 31, 2007
CONSOLIDATED
SUBSIDIARIES
    
    $
    14,990
    
    
    $
    556,535
    
    
    $
    
    
    
    $
    87,577
    
    
    $
    166,096
    
    
    $
    22,852DECEMBER 31, 2006
CONSOLIDATED
SUBSIDIARIES
    
    $
    13,372
    
    
    $
    579,179
    
    
    $
    
    
    
    $
    93,650
    
    
    $
    151,834
    
    
    $
    40,204
 CLAIMS AND CLAIMS
    
    
    AMORTIZATIONEXPENSES INCURRED
    
    
    OF DEFERREDAFFILIATION
    
    RELATED TO
    
    
    POLICY
    
    
    PAID CLAIMS
    
    
    NETWITH
    
    CURRENT
    
    
    PRIOR
    
    
    ACQUISITION
    
    
    AND CLAIMS
    
    
    PREMIUMSREGISTRANT
    
    YEAR
    
    
    YEARS
    
    
    COSTS
    
    
    EXPENSES
    
    
    WRITTENDECEMBER 31, 2008
CONSOLIDATED
SUBSIDIARIES
    
    $
    107,276
    
    
    $
    2,683
    
    
    $
    38,670
    
    
    $
    81,521
    
    
    $
    165,384DECEMBER 31, 2007
CONSOLIDATED
SUBSIDIARIES
    
    $
    103,664
    
    
    $
    (13,820
    )
    
    $
    37,695
    
    
    $
    76,380
    
    
    $
    167,853DECEMBER 31, 2006
CONSOLIDATED
SUBSIDIARIES
    
    $
    93,803
    
    
    $
    (7,667
    )
    
    $
    31,336
    
    
    $
    82,412
    
    
    $
    154,860
  F-45




---



##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description*+10.68
    
    Form of Indemnification Agreement by and between NYMAGIC, INC. and
members of its Board of Directors, approved as of December 3,
2008.*+10.69
    
    Amended and Restated Voting Agreement by and among Mark W.
Blackman, Lionshead Investments, LLC and Robert G. Simses,
Trustee, and Mariner Partners, Inc. dated October 15, 2008.*+10.70
    
    Letter Agreement by and among Mariner Partners, Inc. and Mark W.
Blackman, Lionshead Investments, LLC and Robert G. Simses,
Trustee, and Mariner Partners, Inc. dated October 15, 2008.*10.71
    
    2007 financial statements of Tricadia CDO Fund, L.P.*+10.72
    

Employment
Agreement, dated as of April 7, 2008, by and between Glenn R. Yanoff
and NYMAGIC, INC.*21.1
    
    Subsidiaries of the Registrant.*23.1
    
    Consent of KPMG LLP.*23.2
    

Consent
of Grant Thornton LLP.*31.1
    
    Certification of A. George Kallop, President and Chief Executive
Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.*31.2
    
    Certification of Thomas J. Iacopelli, Chief Financial Officer, as
adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification of A. George Kallop, President and Chief Executive
Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of Thomas J. Iacopelli, Chief Financial Officer,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith.+
    
    Represents a management contract or compensatory plan or arrangement.