Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

55K characters. Original on sec.gov · Markdown

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Financial Statements, Financial Statement Schedules and Exhibits.
1. Financial Statements
Included in Part II – see Item 8 of this report.
2. Financial Statement Schedules
Page No.
II. Condensed Financial Information of Registrant
As of December 31, 2022 and 2021, and for the years ended December 31, 2022, 2021 and 2020178
III. Supplementary Insurance Information
For the years ended December 31, 2022, 2021 and 2020181
IV. Reinsurance
For the years ended December 31, 2022, 2021 and 2020182
VI. Supplementary Information for Property and Casualty Insurance Underwriters
For the years ended December 31, 2022, 2021 and 2020183

Schedules other than those listed above are omitted for the reason that they are not applicable or the information is provided in Item 8 of this report.

ARCH CAPITAL1722022 FORM 10-K

3. Exhibits

Incorporated by Reference
Exhibit NumberExhibit DescriptionFormOriginal NumberDate FiledFiled Herewith
2.1Memorandum of Association of ACGLS-43.1September 8, 2000
2.2Bye-Laws of ACGL10-Q3August 5, 2016
2.3ACGL Certificate of Deposit of Memorandum of Increase of Share Capital10-K3.3February 28, 2011
3.1Certificate of Designations of Series F Non-Cumulative Preferred Shares8-K4.1August 17, 2017
3.2Certificate of Designations of Series G Non-Cumulative Preferred Shares8-K4.1June 11, 2021
3.3Specimen Common Share Certificate10-K4.1April 2, 2001
3.4Specimen Series F Non-Cumulative Preferred Share Certificate8-K4.2August 17, 2017
3.5Specimen Series G Non-Cumulative Preferred Share Certificate8-K4.2June 11, 2021
4.1Indenture, dated as of May 4, 2004, between ACGL, as issuer, and The Bank of New York Mellon, as successor trustee to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank) (“JPMCB”), as trustee8-K4.1June 30, 2020
4.2First Supplemental Indenture, dated as of May 4, 2004, between ACGL, as issuer, and JPMCB, as trustee8-K99.3May 7, 2004
4.3Second Supplemental Indenture, dated as of June 30, 2020, by and between Arch Capital Group Ltd. and The Bank of New York Mellon (including the form of Global Notes for the Notes).8-K4.2June 30, 2020
4.4.1Indenture, dated as of December 13, 2013, among Arch Capital Group (U.S.) Inc. (“Arch U.S.”), as issuer, ACGL, as guarantor, and The Bank of New York Mellon (“BNYM”), as trustee8-K4.1December 13, 2013
4.4.2First Supplemental Indenture, dated as of December 13, 2013, among Arch U.S., as issuer, ACGL, as guarantor, and BNYM, as trustee8-K4.2December 13, 2013
4.4.3Second Supplemental Indenture, dated as of May 10, 2018, among Arch Capital Finance LLC, as issuer, ACGL, as guarantor, and BNYM, as trustee8-K4.1May 15, 2018
4.5.1Deposit Agreement, dated August 17, 2017, between ACGL, as issuer, and AST, as depositary, registrar and transfer agent and as dividend disbursing agent and redemption agent, and the holders from time to time of the depositary receipts8-K4.3August 17, 2017
4.5.2Deposit Agreement, dated June 11, 2021, between ACGL, as issuer, and AST, as depositary, registrar and transfer agent and as dividend disbursing agent and redemption agent, and the holders from time to time of the depositary receipts8-K4.3June 11, 2021
4.6.1Form of Depositary Receipt, dated August 17, 20178-K4.4August 17, 2017
4.6.2Form of Depositary Receipt, dated June 11, 20218-K4.4June 11, 2021
4.7.1Indenture, dated as of December 8, 2016, among Arch Capital Finance LLC, as issuer, ACGL, as guarantor, and BNYM, as trustee8-K4.1December 9, 2016
4.7.2First Supplemental Indenture, dated as of December 8, 2016, among Arch Capital Finance LLC, as issuer, ACGL, as guarantor, and BNYM, as trustee8-K4.2December 9, 2016
4.8Description of Securities10-K4.8February 25, 2022
10.2.1Third Amended and Restated ACGL Incentive Compensation Plan†10-Q10.7August 5, 2016
10.2.2First Amendment to Third Amended and Restated ACGL Incentive Compensation Plan†10-Q10.1May 5, 2017
10.2.3Second Amendment to Third Amended and Restated ACGL Incentive Compensation Plan10-K4.8February 25, 2022
10.3.1ACGL 2007 Long Term Incentive and Share Award Plan†DEF 14AApril 3, 2007
10.3.2ACGL 2012 Long Term Incentive and Share Award Plan†DEF 14AMarch 27, 2012
10.3.3ACGL 2015 Long Term Incentive and Share Award Plan†DEF 14AMarch 26, 2015
10.3.4ACGL 2018 Long Term Incentive and Share Award Plan†DEF 14AMarch 28, 2018
10.3.5ACGL Amended and Restated 2007 Employee Share Purchase Plan†DEF 14AMarch 23, 2016
10.3.6ACGL 2022 Long Term Incentive and Share Award Plan†8-K10.1May 4, 2022
10.4.1Form of Restricted Share Agreement, dated as of May 13, 2015, between ACGL and each of, Marc Grandisson, Nicolas Papadopoulo, Maamoun Rajeh and Louis T. Petrillo†10-Q10.2August 7, 2015
10.4.2Form of Restricted Share Agreement, dated as of May 13, 2016, between ACGL and each of Marc Grandisson, Nicolas Papadopoulo, Maamoun Rajeh and Louis T. Petrillo†10-Q10.2August 5, 2016
10.4.3Form of Restricted Share Agreement, dated as of May 4, 2017, between ACGL and each of the Non-Employee Directors of ACGL†10-Q10.3August 4, 2017
ARCH CAPITAL1732022 FORM 10-K
10.4.4Form of Restricted Share Agreement, dated as of May 8, 2017, between ACGL and each of Marc Grandisson, Nicolas Papadopoulo, Maamoun Rajeh and Louis T. Petrillo†10-Q10.4August 4, 2017
10.4.5Form of Restricted Share Agreement, dated as of September 19, 2017, between ACGL and each of Nicolas Papadopoulo and Maamoun Rajeh†10-K10.4.13February 28, 2018
10.4.6Form of Restricted Share Agreement for Named Executive Officers and certain Executive Officers of ACGL and subsidiaries†10-Q10.3August 8, 2018
10.4.7Form of Restricted Share Agreement between ACGL and each of the Non-Employee Directors of ACGL†10-Q10.6August 8, 2018
10.5Form of Performance Restricted Share Agreement for Named Executive Officers and certain Executive Officers of ACGL and subsidiaries†10-Q10.5August 8, 2018
10.6.1Form of Non-Qualified Stock Option Agreement, dated as of May 13, 2015, between ACGL and each of Marc Grandisson†10-Q10.3August 7, 2015
10.6.2Form of Non-Qualified Stock Option Agreement, dated as of May 13, 2016, between ACGL and each of Marc Grandisson, Nicolas Papadopoulo, Maamoun Rajeh and Louis T. Petrillo†10-Q10.3August 5, 2016
10.6.3Form of Non-Qualified Stock Option Agreement, dated as of May 8, 2017, between ACGL and each of Marc Grandisson, Nicolas Papadopoulo, Maamoun Rajeh and Louis T. Petrillo†10-Q10.5August 4, 2017
10.6.4Non-Qualified Stock Option Agreement, dated as of September 19, 2017, between ACGL and Maamoun Rajeh†10-K10.5.6February 28, 2018
10.6.5Non-Qualified Stock Option Agreement, dated as of September 19, 2017, between ACGL and Nicolas Papadopoulo†10-K10.5.7February 28, 2018
10.6.6Form of Non-Qualified Stock Option Agreement for Named Executive Officers and certain Executive Officers of ACGL and subsidiaries†10-Q10.4August 8, 2018
10.6.7Non-Qualified Stock Option Agreement, dated as of April 9, 2018, between ACGL and Marc Grandisson†10-Q10.5May 9, 2018
10.7.1Form of Share Appreciation Right Agreement, dated as of May 9, 2013, between ACGL and each of Marc Grandisson, Maamoun Rajeh and Louis T. Petrillo†10-Q10.2November 8, 2013
10.7.2Form of Share Appreciation Right Agreement, dated as of May 13, 2014, between ACGL and each of Marc Grandisson, Maamoun Rajeh and Louis T. Petrillo†10-Q10.3August 8, 2014
10.7.3Share Appreciation Right Agreement, dated as of July 1, 2014, between ACGL and Maamoun Rajeh†10-Q10.15November 3, 2017
10.7.4Share Appreciation Right Agreement, dated as of November 6, 2014, between ACGL and Marc Grandisson†10-Q10.2May 8, 2015
10.8.1Employment Agreement, dated as of October 27, 2008, between ACGL and John D. Vollaro†8-K10.1October 28, 2008
10.8.2Amendment to Employment Agreement, dated February 27, 2015, between ACGL and John D. Vollaro†10-Q10.1May 8, 2015
10.8.3Second Amendment to Employment Agreement, dated as of January 1, 2018, between ACGL and John D. Vollaro†10-Q10.1May 9, 2018
10.10Employment Agreement, dated as of September 19, 2017 between ACGL and Maamoun Rajeh†10-Q10.26November 3, 2017
10.11Employment Agreement, dated as of September 19, 2017 between ACGL and Nicholas Papadopoulo†10-Q10.27November 3, 2017
10.12Employment Agreement, dated as of May 25, 2018, between ACGL and François Morin†8-K/A10.1July 26, 2018
10.13Employment Agreement, dated as of April 9, 2018, between ACGL and Marc Grandisson†8-K/A10.1April 11, 2018
10.14Employment Agreement, dated as of November 13, 2018, between Arch Capital Services Inc. and Louis Petrillo†10-K10.16February 28, 2019
10.15Employment Agreement dated as of October 1,2019 between Arch Capital Group Ltd. and David Gansberg †10-K10.16February 28, 2020
10.16Employment Agreement dated as of May 7, 2021 between Arch Capital Group Ltd. and Christine Todd †10-Q10.1August 5, 2021
10.17Arch U.S. Executive Supplemental Non-Qualified Savings and Retirement Plan†10-K10.24March 2, 2009
10.18.1Third Amended and Restated Credit Agreement, dated as of December 17, 2019, by and among ACGL, certain of its subsidiaries as subsidiary borrowers, Bank of America, N.A., as Administrative Agent, Fronting Bank and L/C Administrator, and the lenders party thereto8-K10.1December 18, 2019
10.18.2First Amendment to Third Amended and Restated Credit Agreement, dated as of August 12, 2020 by and among Arch Capital Group Ltd., the other Loan Parties party hereto, the Lenders party hereto, and Bank of America, N.A., as Administrative Agent.10-Q10.1November 4, 2021
ARCH CAPITAL1742022 FORM 10-K
10.18.3The LIBOR Transition Amendment to the Third Amended and Restated Credit Agreement, dated as of September 29, 2021.10-Q10.2November 4, 2021
10.18.4Second Amendment to Third Amended and Restated Credit Agreement, effective as of April 7, 2022, by and among Arch Capital Group Ltd., certain of its subsidiaries, Bank of America, N.A., as Administrative Agent, and the lenders party thereto8-K10.1April 12, 2022
21Subsidiaries of RegistrantX
23Consent of PricewaterhouseCoopers LLPX
24Power of AttorneyX
31.1Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002X
31.2Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002X
32.1Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002X
32.2Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002X
101The following financial information from ACGL’s Annual Report on Form 10-K for the year ended December 31, 2022 formatted in Inline XBRL: (i) Consolidated Balance Sheets at December 31, 2022 and 2021; (ii) Consolidated Statements of Income for the years ended December 31, 2022, 2021 and 2020; (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020; (iv) Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2022, 2021 and 2020; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020; and (vi) Notes to Consolidated Financial StatementsX
104Cove Page Interactive Data File (embedded within the Inline XBRL document)

† Management contract or compensatory plan or arrangement.

ARCH CAPITAL1752022 FORM 10-K

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ARCH CAPITAL GROUP LTD. (Registrant)
By:/s/ Marc Grandisson
Name:Marc Grandisson
Title:Chief Executive Officer (Principal Executive Officer)

February 24, 2023

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

NameTitleDate
/s/ Marc Grandisson
Marc GrandissonChief Executive Officer (Principal Executive Officer)February 24, 2023
/s/ François Morin
François MorinExecutive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and TreasurerFebruary 24, 2023
*
John M. PasquesiChairman of the BoardFebruary 24, 2023
*
John L. Bunce, Jr.DirectorFebruary 24, 2023
*
Eric W. DoppstadtDirectorFebruary 24, 2023
*
Francis EbongDirectorFebruary 24, 2023
*
Laurie S. GoodmanDirectorFebruary 24, 2023
ARCH CAPITAL1762022 FORM 10-K
NameTitleDate
*
Moira KilcoyneDirectorFebruary 24, 2023
*
Eileen MalleschDirectorFebruary 24, 2023
*
Louis J. PagliaDirectorFebruary 24, 2023
*
Brian S. PosnerDirectorFebruary 24, 2023
*
Eugene S. SunshineDirectorFebruary 24, 2023
*
John D. VollaroDirectorFebruary 24, 2023
*
Thomas R. WatjenDirectorFebruary 24, 2023

  • By François Morin, as attorney-in-fact and agent, pursuant to a power of attorney, a copy of which has been filed with the Securities and Exchange Commission as Exhibit 24 to this report.
/s/ François Morin
Name:François Morin Attorney-in-Fact
ARCH CAPITAL1772022 FORM 10-K

SCHEDULE II

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(U.S. dollars in thousands)

Balance Sheet

(Parent Company Only)

December 31,
20222021
Assets
Total investments$7,282$2,038
Cash11,39316,317
Investments in subsidiaries14,191,18814,822,024
Investment in operating affiliates5,2596,877
Due from subsidiaries and affiliates1,55411
Other assets17,2039,604
Total assets$14,233,879$14,856,871
Liabilities
Senior notes$1,286,567$1,286,208
Other liabilities37,23924,767
Total liabilities1,323,8061,310,975
Shareholders' Equity
Non-cumulative preferred shares830,000830,000
Common shares ($0.0011 par, shares issued: 588,250,762 and 583,289,850)654648
Additional paid-in capital2,211,4442,085,075
Retained earnings15,892,06514,455,868
Accumulated other comprehensive income (loss), net of deferred income tax(1,646,170)(64,600)
Common shares held in treasury, at cost (shares: 217,904,765 and 204,365,956)(4,377,920)(3,761,095)
Total shareholders' equity$12,910,073$13,545,896
Total liabilities and shareholders' equity$14,233,879$14,856,871

The financial information for the parent company (Arch Capital Group Ltd.) should be read in conjunction with the Consolidated Financial Statements and Notes thereto.

ARCH CAPITAL1782022 FORM 10-K

SCHEDULE II

(continued)

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(U.S. dollars in thousands)

Statement of Income

(Parent Company Only)

Year Ended
December 31,
202220212020
Revenues
Net investment income$2,058$1,524$53
Net realized gains (losses)29—(2,110)
Total revenues2,0871,524(2,057)
Expenses
Corporate expenses85,99771,81865,566
Interest expense58,75958,74140,445
Net foreign exchange (gains) losses(1)73
Total expenses144,755130,566106,014
Income (loss) before income taxes and income (loss) from operating affiliates(142,668)(129,042)(108,071)
Income (loss) from operating affiliates(1,047)(590)(437)
Income (loss) before equity in net income of subsidiaries(143,715)(129,632)(108,508)
Equity in net income of subsidiaries1,592,9292,286,4811,514,029
Net income available to Arch1,449,2142,156,8491,405,521
Preferred dividends(40,736)(48,343)(41,612)
Loss on redemption of preferred shares—(15,101)—
Net income available to Arch common shareholders$1,408,478$2,093,405$1,363,909

The financial information for the parent company (Arch Capital Group Ltd.) should be read in conjunction with the Consolidated Financial Statements and Notes thereto.

ARCH CAPITAL1792022 FORM 10-K

SCHEDULE II

(continued)

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(U.S. dollars in thousands)

Statement of Cash Flows

(Parent Company Only)

Year Ended
December 31,
202220212020
Operating Activities:
Net Cash Provided By Operating Activities$621,307$1,727,529$124,751
Investing Activities:
Net (purchases) sales of short-term investments(4,838)(1,866)(130)
Capital contributed to subsidiaries—(487,161)(988,975)
Purchase of fixed assets(22)(783)(15)
Other(1,462)——
Net Cash Used For Investing Activities(6,322)(489,810)(989,120)
Financing Activities:
Purchases of common shares under share repurchase program(585,823)(1,234,294)(83,472)
Proceeds from common shares issued, net6,6606,4181,876
Proceeds from issuance of preferred shares, net—485,821—
Redemption of preferred shares—(450,000)—
Proceeds from borrowings——988,393
Preferred dividends paid(40,736)(48,280)(41,612)
Net Cash Used For Financing Activities(619,899)(1,240,335)865,185
Increase (decrease) in cash and restricted cash(4,914)(2,616)816
Cash and restricted cash, beginning of year16,34418,96018,144
Cash and restricted cash, end of period$11,430$16,344$18,960

The financial information for the parent company (Arch Capital Group Ltd.) should be read in conjunction with the Consolidated Financial Statements and Notes thereto.

ARCH CAPITAL1802022 FORM 10-K

SCHEDULE III

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

SUPPLEMENTARY INSURANCE INFORMATION

(U.S. dollars in thousands)

Deferred Acquisition CostsReserves for Losses and Loss Adjustment ExpensesUnearned PremiumsNet Premiums EarnedNet Investment Income (1)Net Losses and Loss Adjustment Expenses IncurredAmortization of Deferred Acquisition CostsOther Operating Expenses (2)Net Premiums Written
December 31, 2022
Insurance$301,398$11,017,327$3,381,810$4,559,335NM$2,782,945$885,866$665,472$5,020,642
Reinsurance992,3398,305,8543,206,2843,959,381NM2,568,843813,555267,5314,923,976
Mortgage(29,867)708,762748,9081,159,361NM(324,271)40,159195,1721,132,571
Other
Total$1,263,870$20,031,943$7,337,002$9,678,077NM$5,027,517$1,739,580$1,128,175$11,077,189
December 31, 2021
Insurance$378,265$9,810,622$2,937,664$3,626,468NM$2,344,365$606,265$558,906$4,148,193
Reinsurance424,3906,878,7212,263,2642,840,443NM1,924,719536,754212,8103,254,374
Mortgage99,1861,067,813811,0141,283,419NM56,67797,418194,0101,261,068
Other331,968NM259,04262,74132,869354,702
Total$901,841$17,757,156$6,011,942$8,082,298NM$4,584,803$1,303,178$998,595$9,018,337
December 31, 2020
Insurance$254,833$8,989,930$2,334,225$2,871,420NM$2,092,453$418,483$489,153$3,162,907
Reinsurance278,4225,027,7421,356,9832,162,229NM1,628,320354,048168,0112,457,370
Mortgage203,748976,673740,0431,397,935NM528,344134,240162,2021,279,850
Other53,7051,519,583407,714560,351NM440,48298,07155,810537,589
Total$790,708$16,513,928$4,838,965$6,991,935NM$4,689,599$1,004,842$875,176$7,437,716

(1) The Company does not manage its assets by segment and, accordingly, net investment income is not allocated to each underwriting segment. See note 4, “Segment Information,” to our consolidated financial statements in Item 8 for information related to the ‘other’ segment.

(2) Certain other operating expenses relate to the Company’s corporate segment. Such amounts are not reflected in the table above. See note 4, “Segment Information,” to our consolidated financial statements in Item 8 for information related to the corporate segment.

ARCH CAPITAL1812022 FORM 10-K

SCHEDULE IV

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

REINSURANCE

(U.S. dollars in thousands)

Gross AmountCeded to Other Companies (1)Assumed From Other Companies (1)Net AmountPercentage of Amount Assumed to Net
Year Ended December 31, 2022
Premiums Written:
Insurance$6,889,358$(1,910,222)$41,506$5,020,6420.8%
Reinsurance395,063(2,024,462)6,553,3754,923,976133.1%
Mortgage1,256,366(322,400)198,6051,132,57117.5%
Total$8,540,787$(4,249,258)$6,785,660$11,077,18961.3%
Year Ended December 31, 2021
Premiums Written:
Insurance$5,833,873$(1,719,541)$33,861$4,148,1930.8%
Reinsurance408,520(1,839,556)4,685,4103,254,374144.0%
Mortgage1,213,333(246,757)294,4921,261,06823.4%
Other251,106(102,763)206,359354,70258.2%
Total$7,706,832$(3,734,150)$5,045,655$9,018,33755.9%
Year Ended December 31, 2020
Premiums Written:
Insurance$4,659,416$(1,525,655)$29,146$3,162,9070.9%
Reinsurance305,435(1,014,716)3,166,6512,457,370128.9%
Mortgage1,192,316(194,149)281,6831,279,85022.0%
Other396,743(190,957)331,803537,58961.7%
Total$6,553,910$(2,650,352)$3,534,158$7,437,71647.5%

(1) Certain amounts included in the gross premiums written of each segment are related to intersegment transactions and are included in the gross premiums written of each segment. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.

ARCH CAPITAL1822022 FORM 10-K

SCHEDULE VI

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

SUPPLEMENTARY INFORMATION FOR PROPERTY AND CASUALTY INSURANCE UNDERWRITERS

(U.S. dollars in thousands)

Column AColumn BColumn CColumn DColumn EColumn FColumn GColumn HColumn IColumn JColumn K
Affiliation with RegistrantDeferred Acquisition CostsReserves for Losses and Loss Adjustment ExpensesDiscount, if any, deducted in Column CUnearned PremiumsNet Premiums EarnedNet Investment IncomeNet Losses and Loss Adjustment Expenses Incurred Related toAmortization of Deferred Acquisition CostsNet Paid Losses and Loss Adjustment ExpensesNet Premiums Written
(a) Current Year(b) Prior Years
Consolidated Subsidiaries
2022$1,263,870$20,031,943$60,536$7,337,002$9,678,077$496,547$5,798,528$(771,011)$1,739,580$3,141,948$11,077,189
2021901,84117,757,15655,5756,011,9428,082,298389,1184,940,987(356,184)1,303,1782,826,5519,018,337
2020790,70816,513,92923,3264,838,9656,991,935519,6084,851,051(161,452)1,004,8422,661,1177,437,716

Previous: Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES · Next: Item 16. FORM 10-K SUMMARY