##### 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, 2009
 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
 Yes
þ No
o
 Yes o No 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
 Yes
o No
þ
 MARKET VALUE
  OUTSTANDING STOCK
  DOCUMENTS INCORPORATED BY REFERENCE




---



##### 



NYMAGIC, INC.
 PAGEPART IForward-looking Statements
    
    iiItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    30Item 1B. Unresolved Staff Comments
    
    
    35Item 2. Properties
    
    
    35Item 3. Legal Proceedings
    
    
    35Item 4. Submission of Matters to a Vote of Security Holders
    
    
    35PART IIItem 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    36Item 6. Selected Financial Data
    
    
    38Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    39Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    58Item 8. Financial Statements and Supplementary Data
    
    
    59Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    59Item 9A. Controls and Procedures
    
    
    59Item 9B. Other Information
    
    
    59PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    60Item 11. Executive Compensation
    
    
    60Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    60Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    60Item 14. Principal Accounting Fees and Services
    
    
    60PART IVItem 15. Exhibits, Financial Statement Schedules
    
    
    61Signatures
    
    
    65Index to Consolidated Financial Statements
    
    
    F-1Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   i




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##### Table of Contents



FORWARD  LOOKING STATEMENTS
   ii




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##### Table of Contents



Part I
 
 Item 1.
    
    Business General
  Insurance Companies
  Insurance Underwriters and Managers
  Investment Interests
  Ratings
   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
 Charters Legal Liability
  - 2 -




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##### Table of Contents



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 -




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##### Table of Contents



Aircraft insurance
  NYMAGIC Gross PremiumsWritten
    
    Year ended December 31,By Segment
    
    2009
    
    
    2008
    
    
    2007(Dollars in thousands)Ocean marine
    
    $
    73,269
    
    
    
    34
    %
    
    $
    82,751
    
    
    
    38
    %
    
    $
    98,689
    
    
    
    43
    %Inland marine/Fire
    
    
    20,306
    
    
    
    10
    %
    
    
    16,128
    
    
    
    7
    %
    
    
    18,625
    
    
    
    8
    %Other liability
    
    
    119,913
    
    
    
    56
    %
    
    
    118,378
    
    
    
    55
    %
    
    
    110,986
    
    
    
    49
    %Subtotal
    
    
    213,488
    
    
    
    100
    %
    
    
    217,257
    
    
    
    100
    %
    
    
    228,300
    
    
    
    100
    %Run off lines (Aircraft)
    
    
    92
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    88
    
    
    
    Total
    
    $
    213,580
    
    
    
    100
    %
    
    $
    217,254
    
    
    
    100
    %
    
    $
    228,388
    
    
    
    100
    %
 NYMAGIC Net PremiumsWritten
    
    Year ended December 31,By Segment
    
    2009
    
    
    2008
    
    
    2007(Dollars in thousands)Ocean marine
    
    $
    49,885
    
    
    
    31
    %
    
    $
    59,200
    
    
    
    36
    %
    
    $
    68,192
    
    
    
    41
    %Inland marine/Fire
    
    
    7,045
    
    
    
    4
    %
    
    
    4,538
    
    
    
    3
    %
    
    
    6,935
    
    
    
    4
    %Other liability
    
    
    105,785
    
    
    
    65
    %
    
    
    101,424
    
    
    
    61
    %
    
    
    92,618
    
    
    
    55
    %Subtotal
    
    
    162,715
    
    
    
    100
    %
    
    
    165,162
    
    
    
    100
    %
    
    
    167,745
    
    
    
    100
    %Run off lines (Aircraft)
    
    
    (68
    )
    
    
    
    
    
    
    222
    
    
    
    
    
    
    
    108
    
    
    
    Total
    
    $
    162,647
    
    
    
    100
    %
    
    $
    165,384
    
    
    
    100
    %
    
    $
    167,853
    
    
    
    100
    %
 Reinsurance Ceded
     - 4 -




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- 5 -




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Reinsurer
    
    Amounts
    
    
    A.M. Best Rating(In millions)Lloyds Syndicates (1)
    
    $
    67.8
    
    
    A (Excellent)Swiss Reinsurance America Corporation
    
    
    9.0
    
    
    A (Excellent)Transatlantic Reinsurance Company
    
    
    7.1
    
    
    A (Excellent)General Reinsurance Corporation
    
    
    5.4
    
    
    A++ (Superior)Platinum Underwriters Reinsurance Company
    
    
    5.4
    
    
    A (Excellent)Munich Reinsurance America
    
    
    5.2
    
    
    A+ (Superior)FM Global (Arkwright)
    
    
    3.3
    
    
    A+ (Superior)Everest Reinsurance
    
    
    3.1
    
    
    A+ (Superior)Liberty Mutual Insurance Company
    
    
    2.9
    
    
    A (Excellent)Total
    
    $
    109.2
 (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, 2009 and 2008, the Company reported total ceded reinsurance payable
of $13.6 million and $23.8 million, respectively.2.
    
    As of December 31, 2009 and 2008, the Company reported total reinsurance receivables
on paid losses of $13.1 million and $28.4 million, respectively.
 3.
    
    As of December 31, 2009 and 2008, the Company reported total reinsurance receivables
on unpaid losses of $205.1 million and $213.9 million, respectively.
 4.
    
    As of December 31, 2009 and 2008, the Company reported prepaid reinsurance premiums of
$19.6 million and $19.2 million, respectively.
     1.
    
    For the years ended December 31, 2009, 2008 and 2007 the Company reported total ceded
premiums earned of $50.5 million, $54.4 million and $68.4 million, respectively.
 2.
    
    For the years ended December 31, 2009, 2008 and 2007 the Company reported ceded
incurred losses and loss adjustment expenses of $29.7 million, $27.0 million and $31.1 million,
respectively.
   1.
    
    The Company made reinsurance premium payments of $61.2 million, $55.1 million and
$78.3 million for the years ended December 31, 2009, 2008 and 2007, respectively.
 2.
    
    The Company received reinsurance collections on paid losses of $53.9 million,
$65.8 million and $75.9 million for the years ended December 31, 2009, 2008 and 2007,
respectively.
   Reserves
    - 7 -




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- 8 -




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##### Table of Contents



Reserve methodology
         Net Loss Retention:
  Shock Losses:
   - 9 -




---



##### Table of Contents



Loss Reporting Tail:
   Frequency of Losses:
  Loss Estimates:
    Catastrophe Losses:
     - 10 -




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Uncertainty in Reserve Estimates
       Gross
    
    
    Net(In thousands)Ocean marine
    
    $
    145,064
    
    
    $
    95,334Inland marine/Fire
    
    
    19,254
    
    
    
    6,580Other liability
    
    
    272,554
    
    
    
    225,010Aircraft
    
    
    118,614
    
    
    
    23,484Total
    
    $
    555,486
    
    
    $
    350,408
  - 11 -




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Asbestos and Environmental Reserves
       - 12 -




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Year ended December 31,2009
    
    
    2008
    
    
    2007(In thousands)Asbestos/EnvironmentalNet unpaid losses and loss adjustment expenses (including IBNR) at
the beginning of the period
    
    $
    11,535
    
    
    $
    10,864
    
    
    $
    12,222Net incurred losses and loss adjustment expenses
    
    
    (1,523
    )
    
    
    3,200
    
    
    
    (43
    )Net paid loss settlements
    
    
    358
    
    
    
    (2,212
    )
    
    
    (766
    )Net loss adjustment expenses payments (cost of administering claims)
    
    
    (62
    )
    
    
    (317
    )
    
    
    (549
    )Net unpaid losses and loss adjustment expenses (including IBNR) at
end of period
    
    $
    10,308
    
    
    $
    11,535
    
    
    $
    10,864
  Year ended December 31,2009
    
    
    2008
    
    
    2007Number of claims pending at beginning of period
    
    
    367
    
    
    
    384
    
    
    
    401Number of claims reported
    
    
    85
    
    
    
    88
    
    
    
    74Number of claims settled/dismissed or otherwise resolved
    
    
    (123
    )
    
    
    (105
    )
    
    
    (91
    )Number of claims pending at end of period
    
    
    329
    
    
    
    367
    
    
    
    384
  Other Reserves
  Loss Reserve Table
   - 13 -




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- 14 -




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Year ended December 31,1999
    
    
    2000
    
    
    2001
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009(Dollars in thousands)Estimated Liability for Net Unpaid Losses and Loss Adjustment Expenses
    
    
    196,865
    
    
    
    199,685
    
    
    
    210,953
    
    
    
    208,979
    
    
    
    242,311
    
    
    
    255,479
    
    
    
    289,217
    
    
    
    292,941
    
    
    
    306,405
    
    
    
    334,843
    
    
    
    350,408Cumulative Amount of Net Losses and Loss Adjustment Expenses Paid as a Percentage of Original Estimate:1 Year Later
    
    
    24
    %
    
    
    28
    %
    
    
    30
    %
    
    
    8
    %
    
    
    18
    %
    
    
    17
    %
    
    
    25
    %
    
    
    22
    %
    
    
    23
    %
    
    
    15
    %2 Years Later
    
    
    39
    %
    
    
    56
    %
    
    
    30
    %
    
    
    24
    %
    
    
    27
    %
    
    
    33
    %
    
    
    38
    %
    
    
    40
    %
    
    
    34
    %3 Years Later
    
    
    53
    %
    
    
    64
    %
    
    
    41
    %
    
    
    32
    %
    
    
    38
    %
    
    
    45
    %
    
    
    53
    %
    
    
    48
    %4 Years Later
    
    
    58
    %
    
    
    70
    %
    
    
    47
    %
    
    
    43
    %
    
    
    49
    %
    
    
    57
    %
    
    
    58
    %5 Years Later
    
    
    63
    %
    
    
    72
    %
    
    
    55
    %
    
    
    53
    %
    
    
    61
    %
    
    
    62
    %6 Years Later
    
    
    64
    %
    
    
    79
    %
    
    
    62
    %
    
    
    65
    %
    
    
    65
    %7 Years Later
    
    
    70
    %
    
    
    84
    %
    
    
    73
    %
    
    
    70
    %8 Years Later
    
    
    74
    %
    
    
    93
    %
    
    
    77
    %9 Years Later
    
    
    82
    %
    
    
    96
    %10 Years Later
    
    
    86
    %Net Liability Re-estimated including Cumulative Net Paid Losses and Loss Adjustment Expenses as a Percentage of Original Estimate:1 Year Later
    
    
    96
    %
    
    
    105
    %
    
    
    102
    %
    
    
    99
    %
    
    
    94
    %
    
    
    95
    %
    
    
    97
    %
    
    
    95
    %
    
    
    101
    %
    
    
    94
    %2 Years Later
    
    
    94
    %
    
    
    108
    %
    
    
    101
    %
    
    
    94
    %
    
    
    89
    %
    
    
    90
    %
    
    
    91
    %
    
    
    96
    %
    
    
    93
    %3 Years Later
    
    
    95
    %
    
    
    104
    %
    
    
    96
    %
    
    
    90
    %
    
    
    86
    %
    
    
    88
    %
    
    
    94
    %
    
    
    89
    %4 Years Later
    
    
    91
    %
    
    
    103
    %
    
    
    94
    %
    
    
    88
    %
    
    
    86
    %
    
    
    94
    %
    
    
    90
    %5 Years Later
    
    
    92
    %
    
    
    102
    %
    
    
    92
    %
    
    
    90
    %
    
    
    94
    %
    
    
    92
    %6 Years Later
    
    
    90
    %
    
    
    102
    %
    
    
    94
    %
    
    
    100
    %
    
    
    93
    %7 Years Later
    
    
    90
    %
    
    
    103
    %
    
    
    104
    %
    
    
    100
    %8 Years Later
    
    
    91
    %
    
    
    114
    %
    
    
    104
    %9 Years Later
    
    
    101
    %
    
    
    114
    %10 Years Later
    
    
    102
    %Net Cumulative Redundancy (Deficiency)
    
    
    (4,626
    )
    
    
    (28,088
    )
    
    
    (8,219
    )
    
    
    87
    
    
    
    16,182
    
    
    
    20,530
    
    
    
    28,113
    
    
    
    31,758
    
    
    
    21,464
    
    
    
    19,990Gross Unpaid Losses and Loss Adjustment Expenses
    
    
    425,469
    
    
    
    411,267
    
    
    
    534,189
    
    
    
    516,002
    
    
    
    518,930
    
    
    
    503,261
    
    
    
    588,865
    
    
    
    579,179
    
    
    
    556,535
    
    
    
    548,750
    
    
    
    555,486Reinsurance Recoverable on Unpaid Losses and Loss Adjustment Expenses
    
    
    228,604
    
    
    
    211,582
    
    
    
    323,236
    
    
    
    307,023
    
    
    
    276,619
    
    
    
    247,782
    
    
    
    299,648
    
    
    
    286,238
    
    
    
    250,130
    
    
    
    213,907
    
    
    
    205,078Reserve Re-estimated Gross
    
    
    490,550
    
    
    
    501,209
    
    
    
    600,436
    
    
    
    533,515
    
    
    
    509,300
    
    
    
    485,852
    
    
    
    595,729
    
    
    
    542,807
    
    
    
    529,400
    
    
    
    534,356Reserve Re-estimated Reinsurance Recoverable
    
    
    289,059
    
    
    
    273,437
    
    
    
    381,263
    
    
    
    324,622
    
    
    
    282,172
    
    
    
    250,902
    
    
    
    334,625
    
    
    
    281,624
    
    
    
    244,458
    
    
    
    219,504Gross Cumulative Redundancy/(Deficiency)
    
    
    (65,080
    )
    
    
    (89,942
    )
    
    
    (66,247
    )
    
    
    (17,512
    )
    
    
    10,630
    
    
    
    17,409
    
    
    
    (6,864
    )
    
    
    36,372
    
    
    
    27,136
    
    
    
    14,393
    - 15 -




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##### Table of Contents



Year ended December 31,2009
    
    
    2008
    
    
    2007(In thousands)Net liability for losses and loss adjustment expenses at beginning
of year
    
    $
    334,843
    
    
    $
    306,405
    
    
    $
    292,941Provision for losses and loss adjustment expenses occurring in
current year
    
    
    95,494
    
    
    
    107,275
    
    
    
    103,664Increase (decrease) in estimated losses and loss adjustment
expenses for claims occurring in prior years (1)
    
    
    (19,990
    )
    
    
    2,683
    
    
    
    (13,820
    )Net loss and loss adjustment expenses incurred
    
    
    75,504
    
    
    
    109,958
    
    
    
    89,844Less:Losses and loss adjustment expense payments for claims occurring
during:Current year
    
    
    8,245
    
    
    
    9,887
    
    
    
    12,136Prior years
    
    
    51,694
    
    
    
    71,633
    
    
    
    64,24459,939
    
    
    
    81,520
    
    
    
    76,380Net liability for losses and loss adjustment expenses at end of year
    
    
    350,408
    
    
    
    334,843
    
    
    
    306,405Ceded unpaid losses and loss adjustment expenses at end of year
    
    
    205,078
    
    
    
    213,907
    
    
    
    250,130Gross unpaid losses and loss adjustment expenses at end of year
    
    $
    555,486
    
    
    $
    548,750
    
    
    $
    556,535
 (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.    - 16 -




---



##### Table of Contents



Year ended December 31,2009
    
    
    2008
    
    
    2007(In thousands)Net liability for losses and loss adjustment expenses reported based on statutory accounting principles
    
    $
    326,829
    
    
    $
    306,673
    
    
    $
    289,912Liability for losses and loss adjustment expenses assumed from two former pool members (excludes $0, $0 and $3,370 at December 31, 2009, 2008 and 2007, accounted for in the statutory liability for losses and loss adjustment expenses)
    
    
    11,864
    
    
    
    13,014
    
    
    
    7,667Other, net
    
    
    11,715
    
    
    
    15,156
    
    
    
    8,826Net liability for losses and loss adjustment expenses reported based on GAAP
    
    
    350,408
    
    
    
    334,843
    
    
    
    306,405Ceded liability for unpaid losses and loss adjustment expenses
    
    
    205,078
    
    
    
    213,907
    
    
    
    250,130Gross liability for unpaid losses and loss adjustment expenses
    
    $
    555,486
    
    
    $
    548,750
    
    
    $
    556,535
 Regulation
    - 17 -




---



##### Table of Contents



Year ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Dollars in thousands)Net premiums written
    
    $
    162,647
    
    
    $
    165,384
    
    
    $
    167,853
    
    
    $
    154,860
    
    
    $
    133,892Policyholders surplus
    
    
    216,783
    
    
    
    189,383
    
    
    
    207,233
    
    
    
    197,289
    
    
    
    186,848Ratio
    
    
    .75 to 1
    
    
    
    .87 to 1
    
    
    
    .81 to 1
    
    
    
    .78 to 1
    
    
    
    .72 to 1
        - 18 -




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##### Table of Contents



Investment Policy
   Liquidity Portfolio:
  - 19 -




---



##### Table of Contents



Fixed Income Portfolio:
 Equity and Alternative Investments (Hedge Funds):
  Liquidity Portfolio:
 Fixed Income Portfolio:
 Equity and Alternative Investments (Hedge Funds):
 Subsidiaries
    - 20 -




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##### Table of Contents



Average
    
    
    
    
    
    
    
    
    
    AverageDecember 31,
    
    
    S&P
    
    
    
    
    
    December 31,
    
    
    S&P2009
    
    
    Rating
    
    Percent
    
    
    2008
    
    
    Rating
    
    PercentFixed maturities held to maturity (amortized cost):Mortgage-backed securities
    
    $
    56,589,704
    
    
    BB
    
    
    8.37
    %
    
    $
    61,246,212
    
    
    AAA
    
    
    11.20
    %Total fixed maturities held to maturity
    
    $
    56,589,704
    
    
    
    
    
    
    
    8.37
    %
    
    $
    61,246,212
    
    
    
    
    
    
    
    11.20
    %Fixed maturities available for sale (fair value):U.S. Treasury securities
    
    $
    385,715,035
    
    
    AAA
    
    
    57.09
    %
    
    $
    40,783,969
    
    
    AAA
    
    
    7.46
    %Municipal obligations
    
    
    804,373
    
    
    AAA
    
    
    0.12
    %
    
    
    90,483,461
    
    
    AA+
    
    
    16.54
    %Corporate securities
    
    
    
    
    
    
    
    
    
    
    
    
    13,710,996
    
    
    A+
    
    
    2.51
    %Total fixed maturities available for sale
    
    $
    386,519,408
    
    
    AAA
    
    
    57.21
    %
    
    $
    144,978,426
    
    
    AAA
    
    
    26.51
    %Fixed maturities trading (fair value):Municipal obligations
    
    $
    
    
    
    
    
    
    
    
    
    $
    17,399,090
    
    
    AA+
    
    
    3.18
    %Total fixed maturities trading
    
    $
    
    
    
    
    
    
    
    
    
    $
    17,399,090
    
    
    AA+
    
    
    3.18
    %Total fixed maturities
    
    $
    443,109,112
    
    
    AA+
    
    
    65.58
    %
    
    $
    223,623,728
    
    
    AAA
    
    
    40.89
    %Equity securities trading (fair value):Common stock
    
    
    117,968
    
    
    N/A
    
    
    0.02
    %
    
    
    
    
    
    
    
    
    Preferred stock
    
    $
    
    
    
    
    
    
    
    
    
    $
    11,822,620
    
    
    A
    
    
    2.16
    %Total equity securities
    
    $
    117,968
    
    
    N/A
    
    
    0.02
    %
    
    $
    11,822,620
    
    
    A
    
    
    2.16
    %Short-term investments (approximating fair value)
    
    
    8,788,718
    
    
    AAA
    
    
    1.30
    %
    
    
    110,249,779
    
    
    AAA
    
    
    20.16
    %Cash and cash equivalents
    
    
    66,755,909
    
    
    
    
    
    
    
    9.88
    %
    
    
    75,672,102
    
    
    
    
    
    
    
    13.83
    %Total fixed maturities, equity securities, cash and short-term investments
    
    $
    518,771,707
    
    
    
    
    
    
    
    76.78
    %
    
    $
    421,368,229
    
    
    
    
    
    
    
    77.04
    %Commercial loans (fair value)
    
    
    5,001,118
    
    
    CCC+
    
    
    0.74
    %
    
    
    2,690,317
    
    
    B-
    
    
    0.49
    %Limited partnership hedge funds (equity)
    
    
    151,891,838
    
    
    
    
    
    
    
    22.48
    %
    
    
    122,927,697
    
    
    
    
    
    
    
    22.47
    %Total investment portfolio
    
    $
    675,664,663
    
    
    
    
    
    
    
    100.00
    %
    
    $
    546,986,243
    
    
    
    
    
    
    
    100.00
    %
  - 21 -




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##### Table of Contents



WeightedAverage
    
    
    AverageLoan to
    
    
    FICO
    
    
    D60+
    
    
    CreditSecurity
    
    
    
    
    
    
    
    
    
    
    
    
    
    Value %
    
    
    Credit
    
    
    Delinquency
    
    
    Support
    
    
    S&P
    
    Moodysdescription
    
    Issue date
    
    
    Amortized cost
    
    
    Fair value
    
    
    (1)
    
    
    Score (2)
    
    
    Rate (3)
    
    
    Level (4)
    
    
    Rating (5)
    
    Rating (5)AHMA 2006-3
    
    
    7/2006
    
    
    $
    11,263,313
    
    
    $
    10,861,225
    
    
    
    85.4
    
    
    
    705
    
    
    
    39.7
    
    
    
    41.4
    
    
    AA
    
    Caa1CWALT 2005-69
    
    
    11/2005
    
    
    
    7,151,818
    
    
    
    6,623,185
    
    
    
    81.8
    
    
    
    698
    
    
    
    50.7
    
    
    
    48.5
    
    
    CCC
    
    Ba3CWALT 2005-76
    
    
    12/2005
    
    
    
    7,059,919
    
    
    
    6,901,220
    
    
    
    82.3
    
    
    
    700
    
    
    
    53.7
    
    
    
    49.1
    
    
    CCC
    
    B2RALI 2005-QO3
    
    
    10/2005
    
    
    
    7,521,769
    
    
    
    6,274,852
    
    
    
    81.1
    
    
    
    704
    
    
    
    42.7
    
    
    
    43.8
    
    
    A-
    
    B1WaMu 2005-AR17
    
    
    12/2005
    
    
    
    6,196,663
    
    
    
    6,193,159
    
    
    
    74.2
    
    
    
    715
    
    
    
    30.7
    
    
    
    50.5
    
    
    AAA
    
    A1WaMu 2006-AR9
    
    
    7/2006
    
    
    
    8,538,522
    
    
    
    11,130,523
    
    
    
    74.8
    
    
    
    730
    
    
    
    33.1
    
    
    
    24.8
    
    
    B
    
    Ba1WaMu 2006-AR13
    
    
    9/2006
    
    
    
    8,857,700
    
    
    
    11,343,649
    
    
    
    75.8
    
    
    
    728
    
    
    
    33.1
    
    
    
    25.5
    
    
    CCC
    
    B3$
    56,589,704
    
    
    $
    59,327,813
 
 (1)
    
    The dollar-weighted average amortized loan-to-original value of the
underlying loans at January 25, 2010.(2)
    
    Average FICO of remaining borrowers in the loan pool at January 25, 2010.(3)
    
    The percentage of the current outstanding principal balance that is more
than 60 days delinquent as of January 25, 2010. This includes loans that
are in foreclosure and real estate owned.(4)
    
    The current credit support provided by subordinate ranking tranches
within the overall security structure at January 25, 2010.(5)
    
    Ratings as of March 5, 2010.    - 22 -




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##### Table of Contents



Relationship with Mariner Partners, Inc.
   - 23 -




---



##### Table of Contents



Voting Agreement
   
    
    Mark W. Blackman, a director of the Company and a son of
our founder and Louise B. Tollefson, is a participating
shareholder in his individual capacity. He was also a
member of our Board of Directors from 1979 until May 2004
and served as our President from 1988 to 1998. He was our
Chief Underwriting Officer from June 2002 until August
2009 and our Executive Vice President from September 2005
until August 2009. Mr. Blackman was re-appointed to our
Board of Directors on March 6, 2009, and he resigned as an
employee and officer of the Company, effective August 11,
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, the late 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
    - 24 -




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##### 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
   
    
    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.
  - 25 -




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##### Table of Contents




    
    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.
 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
     - 26 -




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##### Table of Contents



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
  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).
     - 27 -




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- 28 -




---



##### Table of Contents



Subsidiaries
       Competition
      - 29 -




---



##### Table of Contents



Employees
  Code of Conduct and Corporate Governance Documents
    Available Information
  
 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.
    - 30 -




---



##### Table of Contents



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.
  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.
   - 31 -




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##### Table of Contents



Our industry is highly competitive and we may not be able to compete successfully in the
future.
    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.
    - 32 -




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##### Table of Contents



Our deferred tax asset may require additional valuation allowance.
   Insurance laws and regulations restrict our ability to operate.
    Computer system risks.
   Failure to comply with insurance laws and regulations could have a material adverse
effect on our business.
   - 33 -




---



##### Table of Contents



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.
   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.
   - 34 -




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##### 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
   - 35 -




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##### Table of Contents



PART II
 
 Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
  2009
    
    
    2008High
    
    
    Low
    
    
    High
    
    
    LowFirst Quarter
    
    $
    19.46
    
    
    $
    7.87
    
    
    $
    28.50
    
    
    $
    20.00Second Quarter
    
    
    15.25
    
    
    
    9.38
    
    
    
    24.49
    
    
    
    19.15Third Quarter
    
    
    18.93
    
    
    
    13.45
    
    
    
    29.35
    
    
    
    15.45Fourth Quarter
    
    
    18.89
    
    
    
    14.12
    
    
    
    26.95
    
    
    
    11.04
  Dividend Policy
  Stock Repurchase
   - 36 -




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##### Table of Contents



Total Numberof Shares
    
    
    MaximumPurchased as
    
    
    Dollar Value ofTotal
    
    
    Average
    
    
    Part of
    
    
    Shares that mayNumber
    
    
    Price
    
    
    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.  - 37 -




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##### Table of Contents



Item 6.
    
    Selected Financial Data
   Year ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(In thousands, except per share amounts)Revenues:Net premiums earned
    
    $
    156,971
    
    
    $
    167,073
    
    
    $
    166,096
    
    
    $
    151,834
    
    
    $
    134,557Net investment income (loss)
    
    
    41,668
    
    
    
    (63,503
    )
    
    
    35,489
    
    
    
    47,897
    
    
    
    36,060Commission income
    
    
    260
    
    
    
    154
    
    
    
    414
    
    
    
    542
    
    
    
    1,198Total other-than-temporary impairments
    
    
    (479
    )
    
    
    (46,233
    )
    
    
    (6,682
    )
    
    
    (371
    )
    
    
    (678
    )Portion of loss recognized in OCI (before taxes)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net impairment loss recognized in earnings
    
    
    (479
    )
    
    
    (46,233
    )
    
    
    (6,682
    )
    
    
    (371
    )
    
    
    (678
    )Net realized investment gains (losses)
    
    
    15,733
    
    
    
    (1,432
    )
    
    
    (221
    )
    
    
    (32
    )
    
    
    (127
    )Other income (loss), net
    
    
    3,342
    
    
    
    122
    
    
    
    (4,659
    )
    
    
    597
    
    
    
    334Total revenues
    
    $
    217,495
    
    
    $
    56,181
    
    
    $
    190,437
    
    
    $
    200,467
    
    
    $
    171,344Expenses:Net losses and loss adjustment expenses incurred
    
    $
    75,504
    
    
    $
    109,958
    
    
    $
    89,844
    
    
    $
    86,136
    
    
    $
    92,290Policy acquisition expenses
    
    
    36,853
    
    
    
    38,670
    
    
    
    37,695
    
    
    
    31,336
    
    
    
    30,491General and administrative expenses
    
    
    42,552
    
    
    
    38,612
    
    
    
    36,018
    
    
    
    31,402
    
    
    
    27,183Interest expense
    
    
    6,731
    
    
    
    6,716
    
    
    
    6,726
    
    
    
    6,712
    
    
    
    6,679Total expenses
    
    $
    161,640
    
    
    $
    193,956
    
    
    $
    170,283
    
    
    $
    155,586
    
    
    $
    156,643Income (loss) before income taxes
    
    $
    55,855
    
    
    $
    (137,775
    )
    
    $
    20,154
    
    
    $
    44,881
    
    
    $
    14,701Income taxes expense (benefit)Current
    
    
    7,358
    
    
    
    (14,026
    )
    
    
    10,509
    
    
    
    16,777
    
    
    
    6,152Deferred
    
    
    3,034
    
    
    
    (19,414
    )
    
    
    (3,727
    )
    
    
    (1,746
    )
    
    
    (1,152
    )10,392
    
    
    
    (33,440
    )
    
    
    6,782
    
    
    
    15,031
    
    
    
    5,000Net income (loss)
    
    $
    45,463
    
    
    $
    (104,335
    )
    
    $
    13,372
    
    
    $
    29,850
    
    
    $
    9,701BASIC (LOSS) EARNINGS PER SHARE:Weighted average shares outstanding
    
    
    8,428
    
    
    
    8,534
    
    
    
    8,896
    
    
    
    8,807
    
    
    
    8,734Basic (loss) earnings per share
    
    $
    5.39
    
    
    $
    (12.23
    )
    
    $
    1.50
    
    
    $
    3.39
    
    
    $
    1.11DILUTED (LOSS) EARNINGS PER SHARE:Weighted average shares outstanding
    
    
    8,637
    
    
    
    8,534
    
    
    
    9,190
    
    
    
    9,177
    
    
    
    8,918Diluted (loss) earnings per share
    
    $
    5.26
    
    
    $
    (12.23
    )
    
    $
    1.46
    
    
    $
    3.25
    
    
    $
    1.09Dividends declared per share
    
    $
    .20
    
    
    $
    .32
    
    
    $
    .32
    
    
    $
    .30
    
    
    $
    .24
  - 38 -




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##### Table of Contents



December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(In thousands)Total cash and investments
    
    $
    675,665
    
    
    $
    546,986
    
    
    $
    701,127
    
    
    $
    664,872
    
    
    $
    622,404Total assets
    
    
    1,010,209
    
    
    
    946,476
    
    
    
    1,107,977
    
    
    
    1,119,296
    
    
    
    1,090,419Unpaid losses and loss adjustment expenses
    
    
    555,486
    
    
    
    548,750
    
    
    
    556,535
    
    
    
    579,179
    
    
    
    588,865Notes payable
    
    
    100,000
    
    
    
    100,000
    
    
    
    100,000
    
    
    
    100,000
    
    
    
    100,000Total shareholders equity
    
    
    216,010
    
    
    
    164,073
    
    
    
    279,446
    
    
    
    270,700
    
    
    
    239,284Book value per share
    
    $
    24.84
    
    
    $
    19.11
    
    
    $
    31.56
    
    
    $
    29.14
    
    
    $
    26.44
  
 Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Executive Overview and Highlights-2009 year
 
    
    Net income of $45.5 million or $5.26 per diluted share
    
    Total shareholders equity of $216.0 million, or $24.84 per diluted share
    
    Gross and net premiums written each down 2% from 2008
    
    Favorable net loss reserve development reported on prior year loss reserves of $20.0 million
    
    Combined ratio of 98.7%
    
    Net investment income of $41.7 million
    
    Net realized investment gains of $15.3 million
    
    Total cash and invested assets of $675.7 million at year end 2009
    
    A.M. Best Rating of A (excellent) for New York Marine and Gotham
 Results of Operations
   NYMAGIC Gross PremiumsWritten
    
    Year ended December 31,By Segment
    
    2009
    
    
    2008
    
    
    2007(Dollars in thousands)Ocean Marine
    
    $
    73,269
    
    
    
    34
    %
    
    $
    82,751
    
    
    
    38
    %
    
    $
    98,689
    
    
    
    43
    %Inland Marine/Fire
    
    
    20,306
    
    
    
    10
    %
    
    
    16,128
    
    
    
    7
    %
    
    
    18,625
    
    
    
    8
    %Other Liability
    
    
    119,913
    
    
    
    56
    %
    
    
    118,378
    
    
    
    55
    %
    
    
    110,986
    
    
    
    49
    %Subtotal
    
    
    213,488
    
    
    
    100
    %
    
    
    217,257
    
    
    
    100
    %
    
    
    228,300
    
    
    
    100
    %Run off lines (Aircraft)
    
    
    92
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    88
    
    
    
    Total
    
    $
    213,580
    
    
    
    100
    %
    
    $
    217,254
    
    
    
    100
    %
    
    $
    228,388
    
    
    
    100
    %
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NYMAGIC Net PremiumsWritten
    
    Year ended December 31,By Segment
    
    2009
    
    
    2008
    
    
    2007(Dollars in thousands)Ocean Marine
    
    $
    49,885
    
    
    
    31
    %
    
    $
    59,200
    
    
    
    36
    %
    
    $
    68,192
    
    
    
    41
    %Inland Marine/Fire
    
    
    7,045
    
    
    
    4
    %
    
    
    4,538
    
    
    
    3
    %
    
    
    6,935
    
    
    
    4
    %Other Liability
    
    
    105,785
    
    
    
    65
    %
    
    
    101,424
    
    
    
    61
    %
    
    
    92,618
    
    
    
    55
    %Subtotal
    
    
    162,715
    
    
    
    100
    %
    
    
    165,162
    
    
    
    100
    %
    
    
    167,745
    
    
    
    100
    %Run off lines (Aircraft)
    
    
    (68
    )
    
    
    
    
    
    
    222
    
    
    
    
    
    
    
    108
    
    
    
    Total
    
    $
    162,647
    
    
    
    100
    %
    
    $
    165,384
    
    
    
    100
    %
    
    $
    167,853
    
    
    
    100
    %
 NYMAGIC Net PremiumsEarned
    
    Year ended December 31,By Segment
    
    2009
    
    
    2008
    
    
    2007(Dollars in thousands)Ocean Marine
    
    $
    51,682
    
    
    
    33
    %
    
    $
    64,713
    
    
    
    39
    %
    
    $
    71,637
    
    
    
    43
    %Inland Marine/Fire
    
    
    5,733
    
    
    
    4
    %
    
    
    5,710
    
    
    
    3
    %
    
    
    6,978
    
    
    
    4
    %Other Liability
    
    
    99,624
    
    
    
    63
    %
    
    
    96,428
    
    
    
    58
    %
    
    
    87,373
    
    
    
    53
    %Subtotal
    
    
    157,039
    
    
    
    100
    %
    
    
    166,851
    
    
    
    100
    %
    
    
    165,988
    
    
    
    100
    %Run off lines (Aircraft)
    
    
    (68
    )
    
    
    
    
    
    
    222
    
    
    
    
    
    
    
    108
    
    
    
    Total
    
    $
    156,971
    
    
    
    100
    %
    
    $
    167,073
    
    
    
    100
    %
    
    $
    166,096
    
    
    
    100
    %
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Year Ended December 31, 2009 as Compared to Year Ended December 31, 2008
        Year ended December 31,2009
    
    
    2008
    
    
    Change(Dollars in thousands)Marine liability
    
    $
    41,005
    
    
    $
    41,421
    
    
    
    (1
    %)Energy
    
    
    12,249
    
    
    
    11,396
    
    
    
    8
    %Hull
    
    
    6,773
    
    
    
    7,224
    
    
    
    (6
    %)Cargo
    
    
    5,705
    
    
    
    15,387
    
    
    
    (63
    %)War
    
    
    4,221
    
    
    
    5,130
    
    
    
    (18
    %)Other marine
    
    
    3,316
    
    
    
    2,193
    
    
    
    51
    %Total
    
    $
    73,269
    
    
    $
    82,751
    
    
    
    (11
    %)
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Year ended December 31,2009
    
    
    2008
    
    
    Change(Dollars in thousands)Fire and inland marine
    
    $
    17,939
    
    
    $
    14,706
    
    
    
    22
    %Surety
    
    
    2,367
    
    
    
    1,422
    
    
    
    66
    %Total
    
    $
    20,306
    
    
    $
    16,128
    
    
    
    26
    %
   Year ended December 31,2009
    
    
    2008
    
    
    Change(Dollars in thousands)Automobile liability
    
    $
    7,627
    
    
    $
    7,312
    
    
    
    4
    %Professional liability
    
    
    52,767
    
    
    
    50,443
    
    
    
    5
    %General casualty
    
    
    26,161
    
    
    
    24,585
    
    
    
    6
    %Excess Workers Compensation
    
    
    33,358
    
    
    
    36,038
    
    
    
    (7
    %)Total
    
    $
    119,913
    
    
    $
    118,378
    
    
    
    1
    %
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Years ended December 31,2009
    
    
    2008(In millions)Fixed maturities held to maturity
    
    $
    1.9
    
    
    $
    0.8Fixed maturities available for sale
    
    
    8.7
    
    
    
    7.4Trading securities
    
    
    4.5
    
    
    
    (42.3
    )Commercial loans
    
    
    1.9
    
    
    
    (1.5
    )Equity in (loss) earnings of limited partnerships
    
    
    26.7
    
    
    
    (26.8
    )Short-term investments
    
    
    0.3
    
    
    
    3.0Total investment (loss) income
    
    
    44.0
    
    
    
    (59.4
    )Investment expenses
    
    
    (2.3
    )
    
    
    (4.1
    )Net investment (loss) income
    
    $
    41.7
    
    
    $
    (63.5
    )
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Year Ended December 31, 2008 as Compared to Year Ended December 31, 2007
       - 45 -




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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
    %)
     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
    %)
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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
    %
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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
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Liquidity and Capital Resources
       - 50 -




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Description
    
    Amounts in thousandsCash
    
    $
    23,576Commercial loans
    
    
    1,097RMBS
    
    
    1,827Common stocks
    
    
    118Limited partnership hedge funds: Tiptree Financial
    
    
    35,039Mariner Voyager
    
    
    1,877Total investments
    
    $
    63,534
        Incentive Compensation
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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
    
    
    $
    
    
    
    $
    
    
    
    $
    100,000
    
    
    $
    Interest on debt obligations
    
    
    29,250
    
    
    
    6,500
    
    
    
    13,000
    
    
    
    9,750
    
    
    
    Losses and loss expenses (1)
    
    
    555,486
    
    
    
    119,454
    
    
    
    146,511
    
    
    
    82,208
    
    
    
    207,313Operating lease obligations
    
    
    28,049
    
    
    
    4,209
    
    
    
    8,407
    
    
    
    8,625
    
    
    
    6,808Total
    
    $
    712,785
    
    
    $
    130,163
    
    
    $
    167,918
    
    
    $
    200,583
    
    
    $
    214,121
 
 (1)
    
    Represents an estimated payout based upon historical paid loss development patterns. Critical accounting policies
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Recognition and Presentation of
Other-Than-Temporary Impairments
    Fair value measurements
  Level 1
   Level 2
  - 54 -




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Level 3
   Effect of recent accounting pronouncements
 Adoption of new accounting pronouncements:
     - 55 -




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Future adoption of new accounting pronouncements:
 Transfers and Servicing
 Amendments to FASB Interpretation No. 46
 Improving Disclosures about Fair Value
Measurements. Fair Value Measurements and
Disclosures
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Impact of Inflation
   
 Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    Future cash flows of expected principal amounts(Dollars in millions)TotalThere-
    
    
    
    
    
    
    Fair2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    after
    
    
    Total
    
    
    ValueTax-exempts
    
    $
    
    
    
    $
    
    
    
    $
    0.5
    
    
    $
    
    
    
    $
    
    
    
    $
    0.2
    
    
    $
    0.7
    
    
    $
    0.8Average interest rate
    
    
    
    
    
    
    
    
    
    
    5.25
    %
    
    
    
    
    
    
    
    
    
    
    5.00
    %
    
    
    
    
    
    
    Taxables
    
    $
    0.2
    
    
    $
    210.7
    
    
    $
    0.1
    
    
    $
    2.3
    
    
    $
    
    
    
    $
    171.4
    
    
    $
    384.7
    
    
    $
    385.7Average interest rate
    
    
    1.50
    %
    
    
    1.10
    %
    
    
    4.63
    %
    
    
    3.13
    %
    
    
    
    
    
    
    4.50
    %
    
    
    
    
    
    
    Total
    
    $
    0.2
    
    
    $
    210.7
    
    
    $
    0.6
    
    
    $
    2.3
    
    
    $
    
    
    
    $
    171.6
    
    
    $
    385.4
    
    
    $
    386.5
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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
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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
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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).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).
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+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).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).
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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).+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).
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##### Table of Contents



+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. (Filed as Exhibit 10.68 of the Registrants Annual Report on
Form 10-K for the year ended December 31, 2008, (Commission File no. 1-11238) and
incorporated herein by reference).+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.
(Filed as Exhibit 10.69 of the Registrants Annual Report on Form 10-K for the year
ended December 31, 2008, (Commission File no. 1-11238) and incorporated herein
by reference).+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.
(Filed as Exhibit 10.70 of the Registrants Annual Report on Form 10-K for the
year ended December 31, 2008, (Commission File no. 1-11238) and incorporated
herein by reference).10.71
    
    
    2007 financial statements
of Tricadia CDO Fund, L.P.
(Filed as Exhibit 10.71 of the Registrants Annual Report on Form 10-K for the year
ended December 31, 2008, (Commission File no. 1-11238) and incorporated herein
by reference).+10.72
    
    
    Employment Agreement, dated as of April 7, 2008, by and between Glenn R. Yanoff and NYMAGIC, INC.
(Filed as Exhibit 10.72 of the Registrants Annual Report on Form 10-K for the
year ended December 31, 2008, (Commission File no. 1-11238) and incorporated herein
by reference).+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.)+10.74
    
    
    Separation Release and Consulting Agreement by and between Mark W. Blackman and NYMAGIC, INC. dated September
10, 2009 (files as Exhibit 10.1 to the Registrants Current Report on Form 8-K File No. 1-11238) filed on
September 23, 2009 and incorporated herein by reference.*21.1
    
    
    Subsidiaries of the Registrant.*23.1
    
    
    Consent of KPMG 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.  - 64 -




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SIGNATURES
  NYMAGIC, INC.
(Registrant)By:
    /s/ A. George KallopA. George KallopPresident and Chief Executive Officer   Name
    
    Title
    
    Date/s/ John R. Anderson

John R. Anderson
    
    Director
    
    March 10, 2010/s/ Glenn J. Angiolillo

Glenn J. Angiolillo
    
    Director
    
    March 10, 2010/s/ Ronald J. Artinian

Ronald J. Artinian
    
    Director
    
    March 10, 2010/s/ John T. Baily

John T. Baily
    
    Director
    
    March 10, 2010/s/ Mark W. Blackman

Mark W. Blackman
    
    Director
    
    March 10, 2010/s/ Dennis Ferro

Dennis Ferro
    
    Director
    
    March 10, 2010/s/ David E. Hoffman

David E. Hoffman
    
    Director
    
    March 10, 2010/s/ A. George Kallop

A. George Kallop
    
    Director and President and 
Chief Executive Officer
    
    March 10, 2010/s/ William J. Michaelcheck

William J. Michaelcheck
    
    Director
    
    March 10, 2010/s/ William D. Shaw, Jr.

William D. Shaw, Jr.
    
    Director
    
    March 10, 2010/s/ Robert G. Simses

Robert G. Simses
    
    Director and Chairman
    
    March 10, 2010/s/ George R. Trumbull, III

George R. Trumbull, III
    
    Director and Senior Executive 
Vice President
    
    March 12, 2010/s/ David W. Young

David W. Young
    
    Director
    
    March 10, 2010/s/ Thomas J. Iacopelli

Thomas J. Iacopelli
    
    Principal Accounting Officer and
Chief
Financial Officer
    
    March 10, 2010
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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-42Financial Statement Schedule III
    
    
    F-45Financial Statement Schedule V
    
    
    F-46Financial Statement Schedule VI
    
    
    F-47
  F-1




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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




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
             F-3




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
            F-4




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##### Table of Contents



NYMAGIC, INC.
 
 CONSOLIDATED BALANCE SHEETS
 December 31,2009
    
    
    2008ASSETSInvestments:Fixed maturities:Held to maturity at amortized cost (fair value $59,327,813 and
$42,329,432)
    
    $
    56,589,704
    
    
    $
    61,246,212Available for sale at fair value (amortized cost $385,378,334 and
$149,402,001)
    
    
    386,519,408
    
    
    
    144,978,426Trading at fair value (amortized cost $0 and $22,203,883)
    
    
    
    
    
    
    17,399,090Equity securities available for sale at fair value (cost $117,968 and $0)
    
    
    117,968
    
    
    
    Equity securities trading at fair value (cost $0 and $15,159,200)
    
    
    
    
    
    
    11,822,620Commercial loans at fair value (amortized cost $7,738,677 and $6,907,368)
    
    
    5,001,118
    
    
    
    2,690,317Limited partnerships at equity (cost $127,379,526 and $98,101,553)
    
    
    151,891,838
    
    
    
    122,927,697Short-term investments
    
    
    8,788,718
    
    
    
    110,249,779Cash and cash equivalents
    
    
    66,755,909
    
    
    
    75,672,102Total cash and investments
    
    
    675,664,663
    
    
    
    546,986,243Accrued investment income
    
    
    3,365,535
    
    
    
    4,978,920Premiums and other receivables, net
    
    
    24,753,976
    
    
    
    23,426,525Receivable for investments disposed
    
    
    4,221,356
    
    
    
    25,415,261Reinsurance receivables on unpaid losses, net
    
    
    205,077,080
    
    
    
    213,906,569Reinsurance receivables on paid losses, net
    
    
    13,116,607
    
    
    
    28,429,945Deferred policy acquisition costs
    
    
    16,438,088
    
    
    
    14,663,710Prepaid reinsurance premiums
    
    
    19,643,170
    
    
    
    19,225,185Deferred income taxes
    
    
    29,251,550
    
    
    
    35,514,597Property, improvements and equipment, net
    
    
    14,602,141
    
    
    
    10,033,489Other assets
    
    
    4,074,424
    
    
    
    23,895,902Total assets
    
    $
    1,010,208,590
    
    
    $
    946,476,346LIABILITIESUnpaid losses and loss adjustment expenses
    
    $
    555,485,502
    
    
    $
    548,749,589Reserve for unearned premiums
    
    
    89,458,244
    
    
    
    83,364,396Ceded reinsurance payable
    
    
    13,580,535
    
    
    
    23,809,871Notes payable
    
    
    100,000,000
    
    
    
    100,000,000Dividends payable
    
    
    737,308
    
    
    
    671,059Other liabilities
    
    
    34,937,369
    
    
    
    25,808,669Total liabilities
    
    
    794,198,958
    
    
    
    782,403,584SHAREHOLDERS EQUITYCommon stock
    
    
    15,796,465
    
    
    
    15,742,215Paid-in capital
    
    
    51,699,572
    
    
    
    49,539,886Accumulated other comprehensive (loss)
    
    
    (22,977,781
    )
    
    
    (2,875,317
    )Retained earnings
    
    
    259,527,967
    
    
    
    189,702,569304,046,223
    
    
    
    252,109,353Treasury stock, at cost, 7,333,977 and 7,333,977 shares
    
    
    (88,036,591
    )
    
    
    (88,036,591
    )Total shareholders equity
    
    
    216,009,632
    
    
    
    164,072,762Total liabilities and shareholders equity
    
    $
    1,010,208,590
    
    
    $
    946,476,346
   F-5




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##### Table of Contents



NYMAGIC, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Year ended December 31,2009
    
    
    2008
    
    
    2007Revenues:Net premiums earned
    
    $
    156,971,059
    
    
    $
    167,072,696
    
    
    $
    166,095,871Net investment income (loss)
    
    
    41,667,912
    
    
    
    (63,502,847
    )
    
    
    35,489,369Total other-than-temporary impairments
    
    
    (478,407
    )
    
    
    (46,233,319
    )
    
    
    (6,681,566
    )Portion of loss recognized in OCI (before taxes)
    
    
    
    
    
    
    
    
    
    
    Net impairment loss recognized in earnings
    
    
    (478,407
    )
    
    
    (46,233,319
    )
    
    
    (6,681,566
    )Net realized investment gains (losses)
    
    
    15,733,104
    
    
    
    (1,431,447
    )
    
    
    (221,286
    )Commission and other income (loss), net
    
    
    3,601,823
    
    
    
    275,836
    
    
    
    (4,245,541
    )Total revenues
    
    
    217,495,491
    
    
    
    56,180,919
    
    
    
    190,436,847Expenses:Net losses and loss adjustment expenses incurred
    
    
    75,504,427
    
    
    
    109,958,363
    
    
    
    89,844,108Policy acquisition expenses
    
    
    36,852,771
    
    
    
    38,669,739
    
    
    
    37,694,535General and administrative expenses
    
    
    42,552,353
    
    
    
    38,611,754
    
    
    
    36,018,289Interest expense
    
    
    6,730,562
    
    
    
    6,716,208
    
    
    
    6,725,542Total expenses
    
    
    161,640,113
    
    
    
    193,956,064
    
    
    
    170,282,474Income (loss) before income taxes
    
    
    55,855,378
    
    
    
    (137,775,145
    )
    
    
    20,154,373Income tax provision:Current
    
    
    7,357,794
    
    
    
    (14,026,280
    )
    
    
    10,508,537Deferred
    
    
    3,034,301
    
    
    
    (19,413,786
    )
    
    
    (3,726,514
    )Total income tax expense (benefit)
    
    
    10,392,095
    
    
    
    (33,440,066
    )
    
    
    6,782,023Net income (loss)
    
    $
    45,463,283
    
    
    $
    (104,335,079
    )
    
    $
    13,372,350Weighted average number of shares of common stock outstanding-basic
    
    
    8,427,554
    
    
    
    8,533,924
    
    
    
    8,895,729Basic (loss) earnings per share
    
    $
    5.39
    
    
    $
    (12.23
    )
    
    $
    1.50Weighted average number of shares of common stock outstanding-diluted
    
    
    8,636,673
    
    
    
    8,533,924
    
    
    
    9,190,228Diluted (loss) earnings per share
    
    $
    5.26
    
    
    $
    (12.23
    )
    
    $
    1.46
   F-6




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##### Table of Contents



NYMAGIC, INC.
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 Year ended December 31,2009
    
    
    2008
    
    
    2007Common stock:Balance, beginning of year
    
    $
    15,742,215
    
    
    $
    15,672,090
    
    
    $
    15,505,815Shares issued
    
    
    54,250
    
    
    
    70,125
    
    
    
    166,275Balance, end of year
    
    
    15,796,465
    
    
    
    15,742,215
    
    
    
    15,672,090Paid-in capital:Balance, beginning of year
    
    $
    49,539,886
    
    
    $
    47,313,015
    
    
    $
    42,219,900Shares issued and other
    
    
    2,159,686
    
    
    
    2,226,871
    
    
    
    5,093,115Balance, end of year
    
    
    51,699,572
    
    
    
    49,539,886
    
    
    
    47,313,015Accumulated other comprehensive (loss) income:Balance, beginning of year
    
    $
    (2,875,317
    )
    
    $
    202,196
    
    
    $
    87,432Cumulative effect of adjustment due to
adoption of other-than-temporary
impairment guidance under ASC 320, net of
deferred tax effect of $14,053,147, $0
and $0
    
    
    (26,098,701
    )
    
    
    
    
    
    
    Non-credit portion of
other-than-temporary impairment losses
recognized in other comprehensive income,
net of deferred tax effect of $0, $0 and
$0
    
    
    478,407
    
    
    
    
    
    
    
    Other net unrealized gains (losses) on
investment securities, net of deferred
tax of $3,228,743, $(1,657,136) and $61,799
    
    
    5,517,830
    
    
    
    (3,077,513
    )
    
    
    114,764Balance, end of year
    
    
    (22,977,781
    )
    
    
    (2,875,317
    )
    
    
    202,196Retained earnings:Balance, beginning of year
    
    $
    189,702,569
    
    
    $
    296,641,235
    
    
    $
    286,147,400Net income (loss)
    
    
    45,463,283
    
    
    
    (104,335,079
    )
    
    
    13,372,350Cumulative
effect of adjustment due to adoption of other-than-temporary
impairment guidance under ASC 320, net of deferred tax effect of
$14,053,147, $0 and $0
    
    
    26,098,701
    
    
    
    
    
    
    
    Dividends declared
    
    
    (1,736,586
    )
    
    
    (2,603,587
    )
    
    
    (2,878,515
    )Balance, end of year
    
    
    259,527,967
    
    
    
    189,702,569
    
    
    
    296,641,235Treasury stock, at cost:Balance, beginning of year
    
    $
    (88,036,591
    )
    
    $
    (80,382,989
    )
    
    $
    (73,261,001
    )Net purchase of treasury shares
    
    
    
    
    
    
    (7,653,602
    )
    
    
    (7,121,988
    )Balance, end of year
    
    
    (88,036,591
    )
    
    
    (88,036,591
    )
    
    
    (80,382,989
    )Total Shareholders Equity
    
    
    216,009,632
    
    
    
    164,072,762
    
    
    
    279,445,547Comprehensive (loss) income:Net income (loss)
    
    $
    45,463,283
    
    
    $
    (104,335,079
    )
    
    $
    13,372,350Other comprehensive (loss) income
    
    
    5,996,237
    
    
    
    (3,077,513
    )
    
    
    114,764Comprehensive (loss) income
    
    
    51,459,520
    
    
    
    (107,412,592
    )
    
    
    13,487,114Number of SharesCommon stock, par value $1 each:Issued, beginning of year
    
    
    15,742,215
    
    
    
    15,672,090
    
    
    
    15,505,815Shares issued
    
    
    54,250
    
    
    
    70,125
    
    
    
    166,275Issued, end of year
    
    
    15,796,465
    
    
    
    15,742,215
    
    
    
    15,672,090Common stock, authorized shares, par value $1 each
    
    
    30,000,000
    
    
    
    30,000,000
    
    
    
    30,000,000Common stock, shares outstanding, end of year
    
    
    8,462,488
    
    
    
    8,408,238
    
    
    
    8,707,013Dividends declared per share
    
    $
    .20
    
    
    $
    .32
    
    
    $
    .32
   F-7




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##### Table of Contents



NYMAGIC, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Year ended December 31,2009
    
    
    2008
    
    
    2007Cash flows from operating activities:Net income(loss)
    
    $
    45,463,283
    
    
    $
    (104,335,079
    )
    
    $
    13,372,350Adjustments to reconcile net income to net cash provided by
(used in) operating activities:Provision for deferred taxes
    
    
    3,034,301
    
    
    
    (19,413,786
    )
    
    
    (3,726,514
    )Net realized investment (gain) loss
    
    
    (15,733,104
    )
    
    
    1,431,447
    
    
    
    221,286Net impairment loss recognized in earnings
    
    
    478,407
    
    
    
    46,233,319
    
    
    
    6,681,566Equity in (earnings) loss of limited partnerships
    
    
    (26,662,449
    )
    
    
    26,805,322
    
    
    
    (12,985,185
    )Net amortization from bonds and commercial loans
    
    
    1,045,888
    
    
    
    487,334
    
    
    
    141,774Depreciation and other, net
    
    
    1,493,929
    
    
    
    1,414,538
    
    
    
    1,295,852Trading portfolio activities
    
    
    29,217,974
    
    
    
    78,614,981
    
    
    
    (116,177,935
    )Commercial loan activities
    
    
    (2,315,763
    )
    
    
    5,609,915
    
    
    
    Loss on abandonment of computer equipment and software
    
    
    
    
    
    
    
    
    
    
    5,315,965Changes in:Premiums and other receivables
    
    
    (1,327,451
    )
    
    
    2,848,552
    
    
    
    2,991,276Reinsurance receivables paid and unpaid, net
    
    
    24,142,827
    
    
    
    46,597,048
    
    
    
    44,852,353Ceded reinsurance payable
    
    
    (10,229,336
    )
    
    
    (3,261,307
    )
    
    
    (17,721,643
    )Accrued investment income
    
    
    1,613,385
    
    
    
    (2,388,256
    )
    
    
    (556,719
    )Deferred policy acquisition costs
    
    
    (1,774,378
    )
    
    
    325,875
    
    
    
    (1,617,953
    )Prepaid reinsurance premiums
    
    
    (417,985
    )
    
    
    2,524,478
    
    
    
    7,829,765Other assets
    
    
    19,821,478
    
    
    
    (13,731,345
    )
    
    
    (3,311,785
    )Unpaid losses and loss adjustment expenses
    
    
    6,735,913
    
    
    
    (7,785,755
    )
    
    
    (22,643,290
    )Reserve for unearned premiums
    
    
    6,093,848
    
    
    
    (4,213,101
    )
    
    
    (6,072,330
    )Other liabilities
    
    
    9,128,700
    
    
    
    (133,227
    )
    
    
    (4,244,598
    )Total adjustments
    
    
    44,346,184
    
    
    
    161,966,032
    
    
    
    (119,728,115
    )Net cash provided by (used in) operating activities
    
    
    89,809,467
    
    
    
    57,630,953
    
    
    
    (106,355,765
    )Cash flows from investing activities:Held to maturity fixed maturities matured, repaid and redeemed
    
    
    8,908,629
    
    
    
    1,713,687
    
    
    
    Available for sale fixed maturities acquired
    
    
    (1,128,121,330
    )
    
    
    (172,844,616
    )
    
    
    (23,946,795
    )Available for sale fixed maturities sold
    
    
    905,906,646
    
    
    
    58,699,634
    
    
    
    179,432,179Available for sale fixed maturities matured, repaid and redeemed
    
    
    
    
    
    
    17,651,152
    
    
    
    2,081,000Available for sale common stocks acquired
    
    
    (117,968
    )
    
    
    
    
    
    
    Capital contributed to limited partnerships
    
    
    (62,891,682
    )
    
    
    (46,459,990
    )
    
    
    (43,750,000
    )Distributions and redemptions from limited partnerships
    
    
    60,589,990
    
    
    
    85,022,517
    
    
    
    50,763,951Net sale (purchase) of short-term investments
    
    
    101,325,133
    
    
    
    (111,478,461
    )
    
    
    136,671,984Receivable for investments disposed and not yet settled
    
    
    21,193,905
    
    
    
    (2,529,338
    )
    
    
    (4,080,290
    )Acquisition of property & equipment, net
    
    
    (6,062,581
    )
    
    
    (6,631,191
    )
    
    
    (1,478,683
    )Net cash (used in) provided by investing activities
    
    
    (99,269,258
    )
    
    
    (176,856,606
    )
    
    
    295,693,346Cash flows from financing activities:Proceeds from stock issuance and other
    
    
    2,213,936
    
    
    
    2,296,996
    
    
    
    5,259,390Cash dividends paid to stockholders
    
    
    (1,670,338
    )
    
    
    (2,747,795
    )
    
    
    (2,852,228
    )Net purchase of treasury stock
    
    
    
    
    
    
    (7,653,602
    )
    
    
    (7,121,988
    )Payable for treasury stock purchased and not yet settled
    
    
    
    
    
    
    (1,911,187
    )
    
    
    1,911,187Net cash provided by (used in) financing activities
    
    
    543,598
    
    
    
    (10,015,588
    )
    
    
    (2,803,639
    )Net (decrease) increase in cash and cash equivalents
    
    
    (8,916,193
    )
    
    
    (129,241,241
    )
    
    
    186,533,942Cash and cash equivalents at beginning of year
    
    
    75,672,102
    
    
    
    204,913,343
    
    
    
    18,379,401Cash and cash equivalents at end of year
    
    $
    66,755,909
    
    
    $
    75,672,102
    
    
    $
    204,913,343
   F-8




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##### Table of Contents



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




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##### Table of Contents



Recognition and Presentation of Other-Than-Temporary
Impairments
 Derivatives
  Premium and policy acquisition cost recognition
  Revenue recognition
  Reinsurance
    F-10




---



##### Table of Contents



Depreciation
  Income taxes
  Fair values of financial instruments
   Incurred losses
  Debt issuance costs
  Share-based compensation
  Basic and diluted earnings per share
  Reclassification
   F-11




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##### Table of Contents



Effects of recent accounting pronouncements
 Adoption of new accounting pronouncements:
         F-12




---



##### Table of Contents



F-13




---



##### Table of Contents



Future adoption of new accounting pronouncements:
 Transfers and Servicing
 Amendments to FASB Interpretation No. 46
 Improving Disclosures about Fair Value
Measurements. Fair Value Measurements and
Disclosures
  F-14




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##### Table of Contents



(2) Investments:
  December 31,
    
    
    
    
    
    
    December 31,2009
    
    
    Percent
    
    
    2008
    
    
    PercentFixed maturities held to maturity (amortized cost):RMBS
    
    $
    56,589,704
    
    
    
    8.37
    %
    
    $
    61,246,212
    
    
    
    11.20
    %Total fixed maturities held to maturity
    
    $
    56,589,704
    
    
    
    8.37
    %
    
    $
    61,246,212
    
    
    
    11.20
    %Fixed maturities available for sale (fair value):U.S. Treasury securities
    
    $
    385,715,035
    
    
    
    57.09
    %
    
    $
    40,783,969
    
    
    
    7.46
    %Municipal obligations
    
    
    804,373
    
    
    
    0.12
    %
    
    
    90,483,461
    
    
    
    16.54
    %Corporate securities
    
    
    
    
    
    
    
    
    
    
    13,710,996
    
    
    
    2.51
    %Total fixed maturities available for sale
    
    $
    386,519,408
    
    
    
    57.21
    %
    
    $
    144,978,426
    
    
    
    26.51
    %Fixed maturities trading (fair value):Municipal obligations
    
    $
    
    
    
    
    
    
    
    $
    17,399,090
    
    
    
    3.18
    %Total fixed maturities trading
    
    $
    
    
    
    
    
    
    
    $
    17,399,090
    
    
    
    3.18
    %Total fixed maturities
    
    $
    443,109,112
    
    
    
    65.58
    %
    
    $
    223,623,728
    
    
    
    40.89
    %Equity securities trading (fair value):Common stock
    
    $
    117,968
    
    
    
    0.02
    %
    
    $
    
    
    
    
    Preferred stock
    
    
    
    
    
    
    
    
    
    
    11,822,620
    
    
    
    2.16
    %Total equity securities
    
    $
    117,968
    
    
    
    0.02
    %
    
    $
    11,822,620
    
    
    
    2.16
    %Cash, cash equivalents and short-term investments
    
    
    75,544,627
    
    
    
    11.18
    %
    
    
    185,921,881
    
    
    
    33.99
    %Total fixed maturities, equity securities, cash,
cash equivalents and short-term investments
    
    $
    518,771,707
    
    
    
    76.78
    %
    
    $
    421,368,229
    
    
    
    77.04
    %Commercial loans (fair value)
    
    
    5,001,118
    
    
    
    0.74
    %
    
    
    2,690,317
    
    
    
    0.49
    %Limited partnership hedge funds (equity)
    
    
    151,891,838
    
    
    
    22.48
    %
    
    
    122,927,697
    
    
    
    22.47
    %Total investment portfolio
    
    $
    675,664,663
    
    
    
    100.00
    %
    
    $
    546,986,243
    
    
    
    100.00
    %
 
   F-15




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##### Table of Contents



WeightedAverage
    
    
    AverageLoan to
    
    
    FICO
    
    
    D60+
    
    
    CreditSecurity
    
    
    
    
    
    
    
    
    
    
    
    
    
    Value %
    
    
    Credit
    
    
    Delinquency
    
    
    Support
    
    
    S&P
    
    Moodysdescription
    
    Issue date
    
    
    Amortized cost
    
    
    Fair value
    
    
    (1)
    
    
    Score (2)
    
    
    Rate (3)
    
    
    Level (4)
    
    
    Rating
    
    RatingAHMA 2006-3
    
    
    7/2006
    
    
    $
    11,263,313
    
    
    $
    10,861,225
    
    
    
    85.4
    
    
    
    705
    
    
    
    39.7
    
    
    
    41.4
    
    
    AA
    
    Caa1CWALT 2005-69
    
    
    11/2005
    
    
    
    7,151,818
    
    
    
    6,623,185
    
    
    
    81.8
    
    
    
    698
    
    
    
    50.7
    
    
    
    48.5
    
    
    CCC
    
    Ba3CWALT 2005-76
    
    
    12/2005
    
    
    
    7,059,919
    
    
    
    6,901,220
    
    
    
    82.3
    
    
    
    700
    
    
    
    53.7
    
    
    
    49.1
    
    
    CCC
    
    B2RALI 2005-QO3
    
    
    10/2005
    
    
    
    7,521,769
    
    
    
    6,274,852
    
    
    
    81.1
    
    
    
    704
    
    
    
    42.7
    
    
    
    43.8
    
    
    A-
    
    B1WaMu 2005-AR17
    
    
    12/2005
    
    
    
    6,196,663
    
    
    
    6,193,159
    
    
    
    74.2
    
    
    
    715
    
    
    
    30.7
    
    
    
    50.5
    
    
    AAA
    
    A1WaMu 2006-AR9
    
    
    7/2006
    
    
    
    8,538,522
    
    
    
    11,130,523
    
    
    
    74.8
    
    
    
    730
    
    
    
    33.1
    
    
    
    24.8
    
    
    B
    
    Ba1WaMu 2006-AR13
    
    
    9/2006
    
    
    
    8,857,700
    
    
    
    11,343,649
    
    
    
    75.8
    
    
    
    728
    
    
    
    33.1
    
    
    
    25.5
    
    
    CCC
    
    B3$
    56,589,704
    
    
    $
    59,327,813
 
 (1)
    
    The dollar-weighted average amortized loan-to-original value of the
underlying loans at January 25, 2010.(2)
    
    Average FICO of remaining borrowers in the loan pool at January 25, 2010.(3)
    
    The percentage of the current outstanding principal balance that is more
than 60 days delinquent as of January 25, 2010. This includes loans that
are in foreclosure and real estate owned.(4)
    
    The current credit support provided by subordinate ranking tranches
within the overall security structure at January 25, 2010.     F-16




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##### Table of Contents



December 31, 2009OTTI
    
    
    Amortized
    
    
    Gross
    
    
    GrossAmortized
    
    
    Recognized
    
    
    Cost after
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    In OCI (a)
    
    
    OTTI
    
    
    Gains
    
    
    Losses
    
    
    ValueRMBS
    
    $
    93,081,210
    
    
    $
    (36,491,506
    )
    
    $
    56,589,704
    
    
    $
    5,077,950
    
    
    $
    (2,339,841
    )
    
    $
    59,327,813U.S. Treasury
securities
available for sale
    
    
    384,638,048
    
    
    
    
    
    
    
    384,638,048
    
    
    
    1,317,809
    
    
    
    (240,822
    )
    
    
    385,715,035Municipal
obligations
available for sale
    
    
    740,286
    
    
    
    
    
    
    
    740,286
    
    
    
    64,087
    
    
    
    
    
    
    
    804,373Totals
    
    $
    478,459,544
    
    
    $
    (36,491,506
    )
    
    $
    441,968,038
    
    
    $
    6,459,846
    
    
    $
    (2,580,663
    )
    
    $
    445,847,221
  F-17




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##### Table of Contents



December 31, 2008Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Fair
    
    
    CarryingCost
    
    
    Gains
    
    
    Losses
    
    
    Value
    
    
    ValueRMBS
    
    $
    61,246,212
    
    
    $
    
    
    
    $
    (18,916,780
    )
    
    $
    42,329,432
    
    
    $
    61,246,212U.S. Treasury
securities
available for sale
    
    
    38,917,878
    
    
    
    1,866,091
    
    
    
    
    
    
    
    40,783,969
    
    
    
    40,783,969Municipal
obligations
available for sale
    
    
    97,166,677
    
    
    
    220,718
    
    
    
    (6,903,934
    )
    
    
    90,483,461
    
    
    
    90,483,461Corporate
securities
available for sale
    
    
    13,317,446
    
    
    
    395,344
    
    
    
    (1,794
    )
    
    
    13,710,996
    
    
    
    13,710,996Totals
    
    $
    210,648,213
    
    
    $
    2,482,153
    
    
    $
    (25,822,508
    )
    
    $
    187,307,858
    
    
    $
    206,224,638
 (a)
    
    As discussed in Note(1), effective April 1, 2009, the Company adopted a new accounting standard
resulting in a reclassification in the amount of $40.1 million of non-credit
investment impairment losses previously recognized on the Companys RMBS holdings that
are currently being held to maturity. These securities are categorized as non-credit
based on the Companys impairment analysis. The Company will accrete from OCI to the
amortized cost of the RMBS over their remaining life in a prospective manner on the basis
of the amount and timing of future cash flows. The amount of the accretion since April 1,
2009 was $3.7 million.  2009Less than 12 months
    
    
    12 months or longer
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Loss
    
    
    Value
    
    
    Loss (1)
    
    
    Value
    
    
    Loss (1)Residential
mortgage-backed
securities held to
maturity
    
    $
    
    
    
    $
    
    
    
    $
    59,327,813
    
    
    $
    (33,753,397
    )
    
    $
    59,327,813
    
    
    $
    (33,753,397
    )U.S. Treasury Securities
    
    
    198,588,058
    
    
    
    (240,822
    )
    
    
    
    
    
    
    
    
    
    
    198,588,058
    
    
    
    (240,822
    )Total temporarily
impaired securities
    
    $
    198,588,058
    
    
    
    (240,822
    )
    
    $
    59,327,813
    
    
    $
    (33,753,397
    )
    
    $
    257,915,871
    
    
    $
    (33,994,219
    )
 2008Less than 12 months
    
    
    12 months or longer
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossResidential
mortgage-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
    )
  F-18




---



##### Table of Contents



(1)
    
    Includes gross unrecognized losses of approximately $33.8 million resulting from
non-credit investment impairment losses on the Companys RMBS
holdings currently held to maturity for the 12 months or greater category.   Amortized
    
    
    FairCost
    
    
    ValueDue in one year or less
    
    $
    199,909
    
    
    $
    201,781Due after one year through five years
    
    
    213,015,517
    
    
    
    213,028,879Due after five years through ten years
    
    
    481,193
    
    
    
    513,655Due after ten years
    
    
    171,681,715
    
    
    
    172,775,093385,378,334
    
    
    
    386,519,408RMBS
    
    
    56,589,704
    
    
    
    59,327,813Totals
    
    $
    441,968,038
    
    
    $
    445,847,221
   OwnershipAmount
    
    
    %Alydar QP Fund
    
    
    3,230,181
    
    
    
    0.62Caspian Capital Partners, L.P. (1)
    
    
    3,903,562
    
    
    
    3.06Caspian Select Credit Fund, L.P. (1)
    
    
    5,780,599
    
    
    
    1.51Dolphin Limited Partnership  A
    
    
    405,308
    
    
    
    3.68Element Capital US Feeder Fund LLC
    
    
    23,489,567
    
    
    
    34.34Horizon Portfolio, L.P.
    
    
    3,060,689
    
    
    
    3.03Ivory Flagship Fund L.P.
    
    
    2,760,140
    
    
    
    0.50Latigo SPV II, LTD.
    
    
    56,617
    
    
    
    1.32Loeb Arbitrage Fund
    
    
    4,603,130
    
    
    
    1.33Lubben Fund, L.P.
    
    
    1,764,444
    
    
    
    5.88Mariner  CRA Relative Fund (1)
    
    
    2,622
    
    
    
    0.37Mariner Dolphin Special Opportunities Fund (1)
    
    
    2,120,361
    
    
    
    8.48Mariner Opportunities Fund (1)
    
    
    4,068,191
    
    
    
    2.96Mariner Silvermine (1)
    
    
    31,680,214
    
    
    
    60.00Mariner Voyager LP (1)
    
    
    1,877,279
    
    
    
    8.90MKP Credit II, L.P.
    
    
    4,470,769
    
    
    
    1.37MV Credit, L.P.
    
    
    428,300
    
    
    
    1.73Riva Ridge Capital Partners, L.P.
    
    
    8,640,395
    
    
    
    7.85Rockwood Partners, L.P.
    
    
    5,530,848
    
    
    
    4.22Silver Point C & I Opportunity Fund, L.P.
    
    
    1,817,337
    
    
    
    4.54SLS Investors, L.P.
    
    
    6,837
    
    
    
    0.01Taconic Opportunity Fund, L.P.
    
    
    1,899,012
    
    
    
    0.08TAMI Macro Fund, L.P.
    
    
    1,347,407
    
    
    
    4.35Triage Management B, L.P.
    
    
    94,145
    
    
    
    9.41Tiptree Financial Partners, L.P.
    
    
    35,038,682
    
    
    
    21.28Wexford Spectrum Fund I, LP
    
    
    3,815,202
    
    
    
    0.35Total limited partnership and limited liability company hedge funds
    
    $
    151,891,838
 (1)
    
    Indicates limited partnership or limited liability company hedge
fund directly managed by Mariner Partners, Inc. (Mariner). As
of December 31, 2009, the aggregate net asset value of these
investments was $84,471,510.  F-19




---



##### Table of Contents



2009
    
    
    2008(unaudited)
    
    
    (audited)Total assets
    
    $
    71,301,259
    
    
    $
    91,441,051Total liabilities
    
    $
    2,500,072
    
    
    $
    9,188,794Total partners capital
    
    $
    68,801,187
    
    
    $
    82,252,257Total revenue
    
    $
    46,714,094
    
    
    $
    26,899,676Net income
    
    $
    30,812,850
    
    
    $
    25,103,685
  Year ended December 31,2009
    
    
    2008
    
    
    2007Realized gains (losses) on investments before impairments:Fixed maturities gains
    
    $
    18,453,525
    
    
    $
    11,872,358
    
    
    $
    252,149Fixed maturities losses
    
    
    (2,584,494
    )
    
    
    (12,170,429
    )
    
    
    (708,964
    )Short-term investments
    
    
    (135,927
    )
    
    
    (1,133,376
    )
    
    
    235,529Net realized investment gains (losses) before impairments
    
    
    15,733,104
    
    
    
    (1,431,447
    )
    
    
    (221,286
    )Fixed maturities impairments
    
    
    (478,407
    )
    
    
    (46,233,319
    )
    
    
    (6,681,566
    )Net realized investment gains (losses) after impairments
    
    $
    15,254,697
    
    
    $
    (47,664,766
    )
    
    $
    (6,902,852
    )
  Recognition and Presentation of
Other-Than-Temporary Impairments
  F-20




---



##### Table of Contents



Year ended December 31,2009
    
    
    2008
    
    
    2007Fixed maturities held to maturity
    
    $
    1,861,352
    
    
    $
    819,596
    
    
    $
    Fixed maturities available for sale
    
    
    8,737,267
    
    
    
    7,390,001
    
    
    
    13,944,630Trading securities
    
    
    4,538,603
    
    
    
    (42,265,670
    )
    
    
    2,302,469Commercial loans
    
    
    1,856,615
    
    
    
    (1,556,937
    )
    
    
    Equity in (loss) earnings of limited partnerships
    
    
    26,662,450
    
    
    
    (26,805,322
    )
    
    
    12,985,185Short-term investments
    
    
    359,183
    
    
    
    2,990,597
    
    
    
    8,687,536Total investment (loss) income
    
    
    44,015,471
    
    
    
    (59,427,735
    )
    
    
    37,919,820Investment expenses (see note 18)
    
    
    (2,347,558
    )
    
    
    (4,075,112
    )
    
    
    (2,430,451
    )Net investment (loss) income
    
    $
    41,667,912
    
    
    $
    (63,502,847
    )
    
    $
    35,489,369
  Year ended December 31,2009
    
    
    2008
    
    
    2007Interest and dividends earned
    
    $
    1,095,879
    
    
    $
    9,245,387
    
    
    $
    2,932,998Net realized (losses) gains
    
    
    (984,947
    )
    
    
    (41,519,563
    )
    
    
    179,463Net unrealized appreciation (depreciation)
    
    
    6,284,286
    
    
    
    (11,548,431
    )
    
    
    (809,992
    )Total investment income (loss)
    
    $
    6,395,218
    
    
    $
    (43,822,607
    )
    
    $
    2,302,469
 Securities Lending
  General
     F-21




---



##### Table of Contents



(3) Fair Value Measurements:
  Level 1
   Level 2
   Level 3
    F-22




---



##### Table of Contents



Year Ended December 31, 2009Level 1:QuotedPrices in
    
    
    Level 2:Active
    
    
    Significant
    
    
    Level 3:Markets for
    
    
    Other
    
    
    Significant
    
    
    Total atIdentical
    
    
    Observable
    
    
    Unobservable
    
    
    December 31,Assets
    
    
    Inputs
    
    
    Inputs
    
    
    2009Fixed maturities available for sale
    
    $
    385,715,035
    
    
    $
    804,373
    
    
    $
    
    
    
    $
    386,519,408Commercial loans
    
    
    
    
    
    
    
    
    
    
    5,001,118
    
    
    
    5,001,118Common stock
    
    
    
    
    
    
    
    
    
    
    117,968
    
    
    
    117,968Total
    
    $
    385,715,035
    
    
    $
    804,373
    
    
    $
    5,119,086
    
    
    $
    391,638,494
 Year Ended December 31, 2008Level 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, 2009Commercial
    
    
    CommonLoans
    
    
    Stocks
    
    
    TotalBeginning balance
    
    $
    2,690,317
    
    
    $
    
    
    
    $
    2,690,317Total gains or losses (realized/unrealized):Included in earnings (or changes in net assets)
    
    
    1,479,492
    
    
    
    
    
    
    
    1,479,492Included in other comprehensive income
    
    
    
    
    
    
    
    
    
    
    Purchases, sales, maturities, repayments,
redemptions and amortization
    
    
    831,309
    
    
    
    117,968
    
    
    
    949,277Transfers from Level 3
    
    
    
    
    
    
    
    
    
    
    Transfers to Level 3
    
    
    
    
    
    
    
    
    
    
    Ending balance
    
    $
    5,001,118
    
    
    $
    117,968
    
    
    $
    5,119,086
  F-23




---



##### Table of Contents



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
      (4) Fiduciary Funds:
   F-24




---



##### Table of Contents



2009
    
    
    2008(unaudited)Cash and short-term investments
    
    $
    610,272
    
    
    $
    38,242Premiums receivable
    
    
    21,329,979
    
    
    
    20,584,595Reinsurance and other receivables
    
    
    51,962,112
    
    
    
    92,473,524Total assets
    
    $
    73,902,363
    
    
    $
    113,096,361Due to insurance pool members
    
    
    28,900,345
    
    
    
    54,053,792Reinsurance payable
    
    
    13,480,165
    
    
    
    23,667,084Funds withheld from reinsurers
    
    
    28,136,456
    
    
    
    29,205,424Other liabilities
    
    
    3,385,397
    
    
    
    6,170,061Total liabilities
    
    $
    73,902,363
    
    
    $
    113,096,361
  (5) Insurance Operations:
 Reinsurance transactions
      Reinsurer
    
    Amounts
    
    
    A.M. Best Rating(In millions)Lloyds Syndicates (1)
    
    $
    67.8
    
    
    A (Excellent)Swiss Reinsurance America Corporation
    
    
    9.0
    
    
    A (Excellent)Transatlantic Reinsurance Company
    
    
    7.1
    
    
    A (Excellent)General Reinsurance Corporation
    
    
    5.4
    
    
    A++ (Superior)Platinum Underwriters Reinsurance Company
    
    
    5.4
    
    
    A (Excellent)Munich Reinsurance America
    
    
    5.2
    
    
    A+ (Superior)FM Global (Arkwright)
    
    
    3.3
    
    
    A+ (Superior)Everest Reinsurance
    
    
    3.1
    
    
    A+ (Superior)Liberty Mutual Insurance Company
    
    
    2.9
    
    
    A (Excellent)Total
    
    $
    109.2
 (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-25




---



##### Table of Contents



Gross
    
    
    Ceded
    
    
    Assumed
    
    
    
    
    
    
    Percentage(direct)
    
    
    to other
    
    
    from other
    
    
    
    
    
    
    of AssumedYear ended
    
    Amount
    
    
    Companies
    
    
    Companies
    
    
    Net amount
    
    
    to NetDecember 31, 2009
    
    $
    209,227,202
    
    
    $
    50,932,803
    
    
    $
    4,352,521
    
    
    $
    162,646,920
    
    
    
    3
    %December 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
    %
  Gross
    
    
    Ceded
    
    
    Assumed
    
    
    
    
    
    
    Percentage(direct)
    
    
    to other
    
    
    from other
    
    
    
    
    
    
    of AssumedYear ended
    
    Amount
    
    
    Companies
    
    
    Companies
    
    
    Net amount
    
    
    to NetDecember 31, 2009
    
    $
    201,263,767
    
    
    $
    50,504,582
    
    
    $
    6,211,874
    
    
    $
    156,971,059
    
    
    
    4
    %December 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
    %
   F-26




---



##### Table of Contents



Unpaid losses
  Year ended December 31,2009
    
    
    2008
    
    
    2007(In thousands)Net liability for losses and loss adjustment expenses at beginning
of year
    
    $
    334,843
    
    
    $
    306,405
    
    
    $
    292,941Provision for losses and loss adjustment expenses occurring in
current year
    
    
    95,494
    
    
    
    107,275
    
    
    
    103,664Increase (decrease) in estimated losses and loss adjustment
expenses for claims occurring in prior years (1)
    
    
    (19,990
    )
    
    
    2,683
    
    
    
    (13,820
    )Net loss and loss adjustment expenses incurred
    
    
    75,504
    
    
    
    109,958
    
    
    
    89,844Less:Losses and loss adjustment expense payments for claims occurring
during:Current year
    
    
    8,245
    
    
    
    9,887
    
    
    
    12,136Prior years
    
    
    51,694
    
    
    
    71,633
    
    
    
    64,24459,939
    
    
    
    81,520
    
    
    
    76,380Net liability for losses and loss adjustment expenses at end of year
    
    
    350,408
    
    
    
    334,843
    
    
    
    306,405Ceded unpaid losses and loss adjustment expenses at end of year
    
    
    205,078
    
    
    
    213,907
    
    
    
    250,130Gross unpaid losses and loss adjustment expenses at end of year
    
    $
    555,486
    
    
    $
    548,750
    
    
    $
    556,535
 
 (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-27




---



##### Table of Contents



F-28




---



##### Table of Contents



Salvage and subrogation
  Deferred policy acquisition costs
  (6)
    
    Property, Improvements and Equipment, Net:
  2009
    
    
    2008Office furniture and equipment
    
    $
    2,185,778
    
    
    $
    2,401,612Computer equipment
    
    
    2,068,345
    
    
    
    2,105,196Computer software
    
    
    9,828,644
    
    
    
    4,440,945Leasehold improvements
    
    
    5,667,596
    
    
    
    5,795,38219,750,363
    
    
    
    14,743,135Less: accumulated depreciation and amortization
    
    
    (5,148,222
    )
    
    
    (4,709,646
    )Property, improvements and equipment, net
    
    $
    14,602,141
    
    
    $
    10,033,489
  Accounting for the Impairment or Disposal of Long-Lived
Assets.
  F-29




---



##### Table of Contents



(7) Income Taxes:
  December 31,
    
    
    December 31,2009
    
    
    2008Deferred Tax Assets:Loss reserves
    
    $
    13,813,095
    
    
    $
    13,557,347Unearned premiums
    
    
    4,887,055
    
    
    
    4,489,745Net operating loss carryforwards
    
    
    7,375,687
    
    
    
    5,880,130Capital loss carryforwards
    
    
    6,514,608
    
    
    
    12,530,316Bad debt reserve
    
    
    2,050,720
    
    
    
    1,986,752Unrealized depreciation of investments
    
    
    13,343,882
    
    
    
    20,418,996Hedge fund loss
    
    
    3,384,488
    
    
    
    3,862,875Deferred compensation
    
    
    3,227,595
    
    
    
    2,187,622Deferred tax assets
    
    
    54,597,130
    
    
    
    64,913,783Less: Valuation allowance
    
    
    18,968,457
    
    
    
    23,527,654Total deferred tax assets
    
    
    35,628,673
    
    
    
    41,386,129Deferred Tax Liabilities:Deferred policy acquisition costs
    
    
    5,753,331
    
    
    
    5,132,299Accrued salvage and subrogation
    
    
    193,263
    
    
    
    208,408Other
    
    
    430,529
    
    
    
    530,825Total deferred tax liabilities
    
    
    6,377,123
    
    
    
    5,871,532Net deferred tax assets
    
    $
    29,251,550
    
    
    $
    35,514,597
   December 31,
    
    
    December 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2007Balance, beginning of year
    
    $
    23,527,654
    
    
    $
    4,998,520
    
    
    $
    4,193,440Change in valuation allowance
    
    
    (4,559,197
    )
    
    
    18,529,134
    
    
    
    805,080Balance, end of period
    
    $
    18,968,457
    
    
    $
    23,527,654
    
    
    $
    4,998,520
   F-30




---



##### Table of Contents



Year ended December 31,2009
    
    
    2008
    
    
    2007Income taxes at the federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Tax exempt interest
    
    
    (3.7
    )
    
    
    1.4
    
    
    
    (1.1
    )Valuation allowance
    
    
    (8.2
    )
    
    
    (13.5
    )
    
    
    4.0State taxes
    
    
    (2.9
    )
    
    
    0.7
    
    
    
    (4.1
    )Life insurance income
    
    
    (2.0
    )
    
    
    
    
    
    
    Other, net
    
    
    0.4
    
    
    
    0.7
    
    
    
    (0.1
    )Income tax provisions
    
    
    18.6
    %
    
    
    24.3
    %
    
    
    33.7
    %
      (8) Statutory Income and Surplus:
   Combined
    
    
    Combined
    
    
    DividendsStatutory
    
    
    Statutory
    
    
    DeclaredYear ended
    
    Net (Loss) Income
    
    
    Surplus
    
    
    To ParentDecember 31, 2009 (unaudited)
    
    $
    26,985,000
    
    
    $
    216,783,000
    
    
    $
    10,850,000December 31, 2008
    
    $
    (38,487,000
    )
    
    $
    189,383,000
    
    
    $
    December 31, 2007
    
    $
    25,654,000
    
    
    $
    207,233,000
    
    
    $
    15,745,000
     F-31




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##### Table of Contents



(9) Employee Retirement Plans:
  (10) Debt:
    (11) Commitments:
   Amount2010
    
    
    4,209,1292011
    
    
    4,182,9232012
    
    
    4,224,4712013
    
    
    4,325,7422014
    
    
    4,299,644Thereafter
    
    
    6,807,769Total
    
    $
    28,049,678
    F-32




---



##### Table of Contents



(12) Comprehensive Income:
  Year ended December 31,2009
    
    
    2008
    
    
    2007Net income (loss)
    
    $
    45,463,283
    
    
    $
    (104,335,079
    )
    
    $
    13,372,350Other comprehensive (loss) income, net of deferred taxes:Unrealized holding gains (losses) on securities, net of
deferred tax expense (benefit) of 1,271,059,
$(5,809,488) and $(2,354,199)
    
    
    19,548,276
    
    
    
    (46,589,927
    )
    
    
    (4,372,090
    )Accretion of noncredit portion of impairment on
held-to-maturity, net of deferred tax expense of
$1,281,119, $0 and $0
    
    
    2,379,222
    
    
    
    
    
    
    
    Less: reclassification adjustment for gains
(losses) realized in net income, net of tax (benefit) of
$(676,564), $(501,006) and $(77,450)
    
    
    16,409,668
    
    
    
    (930,441
    )
    
    
    (143,836
    )Less: reclassification adjustment for impairment
(losses) recognized in net income, net of tax
(benefit) of 0, $(3,651,346) and $(2,338,548)
    
    
    (478,407
    )
    
    
    (42,581,973
    )
    
    
    (4,343,018
    )Other comprehensive (loss) income
    
    
    5,996,237
    
    
    
    (3,077,513
    )
    
    
    114,764Comprehensive income (loss)
    
    $
    51,459,520
    
    
    $
    (107,412,592
    )
    
    $
    13,487,114
  F-33




---



##### Table of Contents



(13) Common Stock Repurchase Plan and Shareholders Equity:
     (14) Earnings per share:
  December 31, 2009
    
    
    December 31, 2008
    
    
    December 31, 2007Weighted
    
    
    
    
    
    
    
    
    
    
    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
    
    $
    45,463
    
    
    
    8,428
    
    
    $
    5.39
    
    
    $
    (104,335
    )
    
    
    8,534
    
    
    $
    (12.23
    )
    
    $
    13,372
    
    
    
    8,896
    
    
    $
    1.50Effect of dilutive
securities:Equity awards and
purchased options
    
    
    
    
    
    
    209
    
    
    $
    (.13
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    294
    
    
    $
    (.04
    )Diluted EPS
    
    $
    45,463
    
    
    
    8,637
    
    
    $
    5.26
    
    
    $
    (104,335
    )
    
    
    8,534
    
    
    $
    (12.23
    )
    
    $
    13,372
    
    
    
    9,190
    
    
    $
    1.46
 (15) Incentive Compensation:
 Share-based Plans:
    F-34




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##### Table of Contents



1991 and 2002 Stock Option Plans
   December 31, 2009
    
    
    December 31, 2008
    
    
    December 31, 2007Expected volatility
    
    
    42.0%-67.0
    %
    
    
    31.0
    %
    
    
    N/AExpected dividends
    
    
    1.21%-1.62
    %
    
    
    1.35%-1.46
    %
    
    
    N/AExpected term (in years)
    
    
    3-7
    
    
    
    4
    
    
    
    N/ARisk-free rate
    
    
    1.34%-2.84
    %
    
    
    2.32%-2.89
    %
    
    
    N/A
   December 31, 2009
    
    
    December 31, 2008
    
    
    December 31, 2007Weighted
    
    
    
    
    
    
    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
    
    
    185,950
    
    
    $
    16.48
    
    
    
    195,825
    
    
    $
    15.69
    
    
    
    333,200
    
    
    $
    15.43Granted
    
    
    140,000
    
    
    $
    14.70
    
    
    
    20,000
    
    
    $
    22.82
    
    
    
    
    
    
    
    Exercised
    
    
    (5,000
    )
    
    $
    12.59
    
    
    
    (29,875
    )
    
    $
    15.58
    
    
    
    (136,725
    )
    
    $
    15.07Forfeited
    
    
    (6,000
    )
    
    $
    14.47
    
    
    
    
    
    
    
    
    
    
    
    (650
    )
    
    $
    14.47Outstanding, end of year
    
    
    314,950
    
    
    $
    15.76
    
    
    
    185,950
    
    
    $
    16.48
    
    
    
    195,825
    
    
    $
    15.69Exercisable, end of year
    
    
    159,950
    
    
    $
    16.03
    
    
    
    165,950
    
    
    $
    15.71
    
    
    
    193,325
    
    
    $
    15.56
  2004 Long-Term Incentive Plan
   F-35




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##### Table of Contents



December 31, 2009
    
    
    December 31, 2008
    
    
    December 31, 2007Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageGrant
    
    
    
    
    
    
    Grant
    
    
    
    
    
    
    GrantDate Fair
    
    
    
    
    
    
    Date Fair
    
    
    
    
    
    
    Date FairNumber of
    
    
    Value
    
    
    Number of
    
    
    Value
    
    
    Number of
    
    
    ValueRSUs and DSUs
    
    Shares
    
    
    Per Share
    
    
    Shares
    
    
    Per Share
    
    
    Shares
    
    
    Per ShareNonvested, beginning of year
    
    
    136,900
    
    
    $
    27.14
    
    
    
    133,200
    
    
    $
    29.84
    
    
    
    136,600
    
    
    $
    26.10Granted
    
    
    68,692
    
    
    $
    16.50
    
    
    
    73,059
    
    
    $
    22.42
    
    
    
    51,365
    
    
    $
    39.47Vested
    
    
    (92,300
    )
    
    $
    22.48
    
    
    
    (69,359
    )
    
    $
    27.63
    
    
    
    (54,765
    )
    
    $
    29.52Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Nonvested, end of year
    
    
    113,292
    
    
    $
    24.49
    
    
    
    136,900
    
    
    $
    27.14
    
    
    
    133,200
    
    
    $
    29.84
  December 31, 2009
    
    
    December 31, 2008
    
    
    December 31, 2007Expected volatility
    
    
    79.6
    %
    
    
    25.3
    %
    
    
    25.3
    %Expected dividends
    
    
    1.67
    %
    
    
    0.84
    %
    
    
    0.84
    %Expected term (in years)
    
    
    3
    
    
    
    2.7
    
    
    
    2.7Risk-free rate
    
    
    0.37
    %
    
    
    4.85
    %
    
    
    4.85
    %
   F-36




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##### Table of Contents



Other Plans:
 Employee Stock Purchase Plan
  Phantom Stock Plan
  Executive Compensation Agreements:
    F-37




---



##### Table of Contents



(16) Segment Information:
    Year ended December 31,2009
    
    
    2008
    
    
    2007(in thousands)Income
    
    
    
    
    
    
    Income
    
    
    
    
    
    
    IncomeSegments
    
    Revenues
    
    
    (Loss)
    
    
    Revenues
    
    
    (Loss)
    
    
    Revenues
    
    
    (Loss)Ocean marine
    
    $
    51,866
    
    
    $
    26,440
    
    
    $
    64,861
    
    
    $
    29,712
    
    
    $
    71,998
    
    
    $
    29,141Inland marine/Fire
    
    
    5,733
    
    
    
    2,522
    
    
    
    5,714
    
    
    
    (381
    )
    
    
    7,016
    
    
    
    1,084Other liability
    
    
    99,700
    
    
    
    13,957
    
    
    
    96,430
    
    
    
    (7,493
    )
    
    
    87,388
    
    
    
    11,971Aircraft
    
    
    (68
    )
    
    
    1,955
    
    
    
    222
    
    
    
    (3,239
    )
    
    
    108
    
    
    
    (3,225
    )Subtotal
    
    
    157,231
    
    
    
    44,874
    
    
    
    167,227
    
    
    
    18,599
    
    
    
    166,510
    
    
    
    38,971Net investment (loss) income
    
    
    41,668
    
    
    
    41,668
    
    
    
    (63,503
    )
    
    
    (63,503
    )
    
    
    35,489
    
    
    
    35,489Total
other-than-temporary
impairments
    
    
    (479
    )
    
    
    (479
    )
    
    
    (46,233
    )
    
    
    (46,233
    )
    
    
    (6,682
    )
    
    
    (6,682
    )Portion of
loss recognized in
OCI (before taxes)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net impairment loss recognized in
earnings
    
    
    (479
    )
    
    
    (479
    )
    
    
    (46,233
    )
    
    
    (46,233
    )
    
    
    (6,682
    )
    
    
    (6,682
    )Net realized investment gains
(losses)
    
    
    15,733
    
    
    
    15,733
    
    
    
    (1,432
    )
    
    
    (1,432
    )
    
    
    (221
    )
    
    
    (221
    )Other income (loss), net
    
    
    3,342
    
    
    
    3,342
    
    
    
    122
    
    
    
    122
    
    
    
    (4,659
    )
    
    
    (4,659
    )General and administrative expenses
    
    
    
    
    
    
    (42,552
    )
    
    
    
    
    
    
    (38,612
    )
    
    
    
    
    
    
    (36,018
    )Interest expense
    
    
    
    
    
    
    (6,731
    )
    
    
    
    
    
    
    (6,716
    )
    
    
    
    
    
    
    (6,726
    )Income tax benefit (expense)
    
    
    
    
    
    
    (10,392
    )
    
    
    
    
    
    
    33,440
    
    
    
    
    
    
    
    (6,782
    )Total
    
    $
    217,495
    
    
    $
    45,463
    
    
    $
    56,181
    
    
    $
    (104,335
    )
    
    $
    190,437
    
    
    $
    13,372
  F-38




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##### Table of Contents



2009
    
    
    2008
    
    
    2007(in thousands)United States
    
    $
    201,060
    
    
    $
    204,769
    
    
    $
    216,417Europe
    
    
    7,341
    
    
    
    3,096
    
    
    
    5,659Asia
    
    
    2,575
    
    
    
    1,161
    
    
    
    1,751Latin America
    
    
    495
    
    
    
    388
    
    
    
    313Other
    
    
    2,109
    
    
    
    7,840
    
    
    
    4,248Total Gross Written Premiums
    
    $
    213,580
    
    
    $
    217,254
    
    
    $
    228,388
 (17) Quarterly Financial Data (unaudited):
  Three Months EndedMarch 31,
    
    
    June 30,
    
    
    Sept. 30,
    
    
    Dec. 31,2009
    
    
    2009
    
    
    2009
    
    
    2009(in thousands, except per share data)Total revenues
    
    $
    46,270
    
    
    $
    54,067
    
    
    $
    56,942
    
    
    $
    60,217Income before income taxes
    
    $
    4,567
    
    
    $
    16,090
    
    
    $
    15,955
    
    
    $
    19,243Net income
    
    $
    3,478
    
    
    $
    14,204
    
    
    $
    14,575
    
    
    $
    13,206Basic earnings per share
    
    $
    0.41
    
    
    $
    1.69
    
    
    $
    1.73
    
    
    $
    1.57Diluted earnings per share
    
    $
    0.40
    
    
    $
    1.65
    
    
    $
    1.68
    
    
    $
    1.53
 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
    )
 (18) Related Party Transactions:
    F-39




---



##### Table of Contents



F-40




---



##### Table of Contents



(19) Legal Proceedings:
   (20) Subsequent Event:
    F-41




---



##### Table of Contents



FINANCIAL STATEMENT SCHEDULES
 
 SCHEDULE II  CONDENSED FINANCIAL INFORMATION OF REGISTRANT  NYMAGIC, INC.  Balance Sheets
  December 31,
    
    
    December 31,2009
    
    
    2008Assets:Cash
    
    $
    23,576,250
    
    
    $
    10,851,532Investments
    
    
    39,957,950
    
    
    
    43,380,057Total cash and investments
    
    
    63,534,200
    
    
    
    54,231,589Investment in subsidiaries
    
    
    218,859,622
    
    
    
    179,150,176Due from subsidiaries
    
    
    21,808,685
    
    
    
    13,531,308Premiums receivable
    
    
    2,866,428
    
    
    
    6,099,930Receivable for investments disposed
    
    
    
    
    
    
    2,620,394Computer software
    
    
    8,829,133
    
    
    
    3,133,069Other assets
    
    
    3,527,786
    
    
    
    7,753,800Total assets
    
    $
    319,425,854
    
    
    $
    266,520,266Liabilities:Notes payable
    
    $
    100,000,000
    
    
    $
    100,000,000Dividend payable
    
    
    737,308
    
    
    
    671,059Other liabilities
    
    
    2,678,914
    
    
    
    1,776,445Total liabilities
    
    
    103,416,222
    
    
    
    102,447,504Shareholders equity:Common stock
    
    
    15,796,465
    
    
    
    15,742,215Paid-in capital
    
    
    51,699,572
    
    
    
    49,539,886Accumulated other comprehensive (loss) income
    
    
    (22,977,781
    )
    
    
    (2,875,317
    )Retained earnings
    
    
    259,527,967
    
    
    
    189,702,569Treasury stock
    
    
    (88,036,591
    )
    
    
    (88,036,591
    )Total shareholders equity
    
    
    216,009,632
    
    
    
    164,072,762Total liabilities and shareholders equity
    
    $
    319,425,854
    
    
    $
    266,520,266
  F-42




---



##### Table of Contents



FINANCIAL STATEMENT SCHEDULES
SCHEDULE II  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NYMAGIC, INC.
Statements of Operations
 Year ended December 31,2009
    
    
    2008
    
    
    2007Revenues:Cash dividends from subsidiaries
    
    $
    10,850,000
    
    
    $
    
    
    
    $
    15,745,000Net investment and other (loss) income
    
    
    12,996,620
    
    
    
    (9,086,940
    )
    
    
    12,241,488Total Revenues
    
    
    23,846,620
    
    
    
    (9,086,940
    )
    
    
    27,986,488Expenses:General and administrative expenses
    
    
    4,103,745
    
    
    
    5,206,095
    
    
    
    6,023,143Interest expense
    
    
    6,729,918
    
    
    
    6,715,354
    
    
    
    6,701,711Income tax (benefit) expense
    
    
    1,332,101
    
    
    
    (4,434,736
    )
    
    
    453,140Total Expenses
    
    
    12,165,764
    
    
    
    7,486,713
    
    
    
    13,177,994(Loss) income before equity income
    
    
    11,680,856
    
    
    
    (16,573,653
    )
    
    
    14,808,494Equity in undistributed (loss) earning of subsidiaries
    
    
    33,782,427
    
    
    
    (87,761,426
    )
    
    
    (1,436,144
    )Net (loss) income
    
    $
    45,463,283
    
    
    $
    (104,335,079
    )
    
    $
    13,372,350
  F-43




---



##### Table of Contents



FINANCIAL STATEMENT SCHEDULES
SCHEDULE II  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NYMAGIC, INC.
Statements of Cash Flows
 Year ended December 31,2009
    
    
    2008
    
    
    2007Cash flows from operating activities:Net income (loss)
    
    $
    45,463,283
    
    
    $
    (104,335,079
    )
    
    $
    13,372,350Adjustments to net income to cash provided by operating activities:Equity in undistributed (earnings) loss of subsidiaries
    
    
    (33,782,427
    )
    
    
    87,761,426
    
    
    
    1,436,144Equity in loss (earnings) of limited partnerships
    
    
    18,857,522
    
    
    
    226,352
    
    
    
    (9,032,711
    )(Increase) decrease in due from subsidiaries
    
    
    (8,277,377
    )
    
    
    5,169,598
    
    
    
    2,282,876Decrease (increase) in premiums receivable
    
    
    3,233,502
    
    
    
    (6,099,930
    )
    
    
    Decrease (increase) in other assets
    
    
    4,226,014
    
    
    
    (1,330,281
    )
    
    
    634,200Increase (decrease) in other liabilities
    
    
    971,688
    
    
    
    971,618
    
    
    
    (863,124
    )Net cash provided by (used in) operating activities
    
    
    30,692,205
    
    
    
    (17,636,296
    )
    
    
    7,829,735Cash flows from investing activities:Net sale (purchase) of other investments
    
    
    2,919,789
    
    
    
    (1,811,776
    )
    
    
    65,941,989Limited partnerships (acquired) sold
    
    
    (18,355,204
    )
    
    
    12,971,623
    
    
    
    (6,250,000
    )Decrease (increase) in receivable for investments disposed
    
    
    2,620,394
    
    
    
    (2,620,394
    )
    
    
    Acquisition of computer software
    
    
    (5,696,064
    )
    
    
    (3,133,069
    )
    
    
    Investment in subsidiary
    
    
    
    
    
    
    (32,500,000
    )
    
    
    Net cash (used in) provided by investing activities
    
    
    (18,511,085
    )
    
    
    (27,093,616
    )
    
    
    59,691,989Cash flows in financing activities:Proceeds from stock issuance and other
    
    
    2,213,936
    
    
    
    2,296,996
    
    
    
    5,259,390Cash dividends paid to stockholders
    
    
    (1,670,338
    )
    
    
    (2,747,795
    )
    
    
    (2,852,228
    )Net purchase of treasury stock
    
    
    
    
    
    
    (7,653,602
    )
    
    
    (7,121,988
    )(Decrease) increase in payable for treasury stock purchased
    
    
    
    
    
    
    (1,911,187
    )
    
    
    1,911,187Net cash provided by (used in) financing activities
    
    
    543,598
    
    
    
    (10,015,588
    )
    
    
    (2,803,639
    )Net increase (decrease) in cash
    
    
    12,724,718
    
    
    
    (54,745,500
    )
    
    
    64,718,085Cash at beginning of period
    
    
    10,851,532
    
    
    
    65,597,032
    
    
    
    878,947Cash at end of period
    
    $
    23,576,250
    
    
    $
    10,851,532
    
    
    $
    65,597,032
   F-44




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##### 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)2009
    
    Ocean marine
    
    $
    3,733
    
    
    $
    145,064
    
    
    $
    26,652
    
    
    
    
    
    
    $
    51,682Inland marine/Fire
    
    
    528
    
    
    
    19,254
    
    
    
    8,492
    
    
    
    
    
    
    
    5,733Other liability
    
    
    12,177
    
    
    
    272,554
    
    
    
    54,314
    
    
    
    
    
    
    
    99,624Aircraft
    
    
    
    
    
    
    118,614
    
    
    
    
    
    
    
    
    
    
    
    (68
    )Total
    
    $
    16,438
    
    
    $
    555,486
    
    
    $
    89,458
    
    
    $
    
    
    
    $
    156,9712008
    
    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
    
    
    $
    
    
    
    $
    166,096
 Column A
    
    Column G
    
    
    Column H
    
    
    Column I
    
    
    Column J
    
    
    Column KBENEFITS,CLAIMS,
    
    
    AMORTIZATIONNET
    
    
    LOSSES
    
    
    OF DEFERREDINVESTMENT
    
    
    AND
    
    
    POLICY
    
    
    OTHER(LOSS)
    
    
    SETTLEMENT
    
    
    ACQUISITION
    
    
    OPERATING
    
    
    PREMIUMSSEGMENTS
    
    INCOME
    
    
    EXPENSES
    
    
    COSTS
    
    
    EXPENSES
    
    
    WRITTEN(caption 2)
    
    
    (caption 4)2009
    
    Ocean marine
    
    
    
    
    
    $
    14,738
    
    
    $
    10,688
    
    
    
    
    
    
    $
    49,885Inland marine/Fire
    
    
    
    
    
    
    2,381
    
    
    
    830
    
    
    
    
    
    
    
    7,045Other liability
    
    
    
    
    
    
    60,421
    
    
    
    25,322
    
    
    
    
    
    
    
    105,785Aircraft
    
    
    
    
    
    
    (2,036
    )
    
    
    13
    
    
    
    
    
    
    
    (68
    )Total
    
    $
    41,668
    
    
    $
    75,504
    
    
    $
    36,853
    
    
    $
    42,552
    
    
    $
    162,6472008
    
    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
    
    
    $
    167,853
 
  F-45




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##### 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, 2009
Allowance for doubtful accounts
    
    $
    21,683,114
    
    
    $
    1,366,479
    
    
    $
    (5,173,502
    )
    
    $
    17,876,091December 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
    )
    
    $
    14,366,923
   F-46




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##### Table of Contents



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, 2009
CONSOLIDATED
SUBSIDIARIES
    
    $
    16,438
    
    
    $
    555,486
    
    
    $
    
    
    
    $
    89,458
    
    
    $
    156,971
    
    
    $
    32,025DECEMBER 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
    
    
    $
    22,852
 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, 2009
CONSOLIDATED
SUBSIDIARIES
    
    $
    95,494
    
    
    $
    (19,990
    )
    
    $
    36,853
    
    
    $
    59,939
    
    
    $
    162,647DECEMBER 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
    
    
    $
    167,853
  F-47