SCPIE Holdings Reports Results for 2006 Third Quarter

  
    
  
  
    
      SCPIE Holdings Inc. (NYSE:SKP), a major provider of healthcare liability 
      insurance, reported improved net income for its third quarter and nine 
      months ended September 30, 2006.
    
    
      For the 2006 third quarter, SCPIE reported net income of $3.3 million, 
      or $0.34 per diluted share, on total revenues of $35.1 million. This 
      compares to a net loss in the 2005 third quarter of $3.1 million, or a 
      loss of $0.33 per diluted share, on total revenues of $37.0 million.
    
    
      For the first nine months of this year, SCPIE reported net income of 
      $8.3 million, or $0.86 per diluted share, on revenues of $108.3 million. 
      This compares to net income for the prior-year nine months of $254,000, 
      or $0.03 per diluted share, on revenues of $111.0 million.
    
    
      Core Operating Review
    
    
      The Company has realized improvement in its core business throughout the 
      first nine months of 2006, including the third quarter of 2006. This 
      represents a continuation of the improvement that began early in 2005.
    
    
      In the 2006 third quarter, SCPIE’s core direct 
      healthcare liability operations posted an underwriting profit of $2.8 
      million, compared to $4.4 million in the same period in 2005. In the 
      2005 third quarter, the Company recognized a significant reduction in 
      claims frequency. The favorable trend in claims frequency has continued 
      in 2006, but at a lower rate.
    
    
      Net earned premium for core direct healthcare operations totaled $30.5 
      million for the 2006 third quarter, compared with $32.0 million for the 
      same period a year earlier. Net written premium for the 2006 third 
      quarter was $6.7 million, compared with $6.9 million in the same 
      prior-year period.
    
    
      The combined ratio for SCPIE’s core business 
      in the 2006 third quarter was 90.9%, with a loss ratio of 71.1%. A year 
      ago, the company’s combined ratio for the 
      third quarter was 86.1%, including a loss ratio of 67.0%. The core 
      expense ratio in the 2006 third quarter increased slightly to 19.8% from 
      19.1% in 2005.
    
    
      For the first three quarters of 2006, SCPIE’s 
      core healthcare operations had an underwriting profit of $7.7 million, a 
      26.2% increase over the underwriting profit of $6.1 million in the first 
      nine months of 2005. Net earned premiums for the core business decreased 
      slightly to $93.1 million from $96.5 million a year earlier. Net written 
      premiums totaled $98.8 million, compared with $102.3 million in the 
      first nine months of 2005. The combined ratio for the nine-month 2006 
      period was 91.7%, including a loss ratio of 71.0%. This is improved from 
      a combined ratio for the first nine months of 2005 of 93.7%, with a loss 
      ratio of 72.8%.
    
    
      SCPIE’s retention rate for its core direct 
      healthcare liability business over the past 12 months totaled 95.5%.
    
    
      “This quarter and the full nine months’ 
      results clearly demonstrate the improved financial condition of our 
      company,” said Donald J. Zuk, SCPIE President 
      and Chief Executive Officer. “Our core book 
      has performed very well, and we expect to build on that in the months 
      ahead.”
    
    
      Non-Core Review
    
    
      SCPIE’s continuing run-off of its non-core 
      healthcare liability operations in states other than California and 
      Delaware had minimal impact on the company’s 
      financial results for the third quarter and first nine months of 2006. 
      Net outstanding reserves for this segment declined to $45.3 million from 
      $60.6 million at December 31, 2005. Open claims dropped to 156 from 229 
      at year-end 2005.
    
    
      In the assumed reinsurance area, which is also in run-off, there was an 
      underwriting loss of $2.6 million for the quarter and $8.5 million for 
      the first nine months of 2006, compared to losses of $17.3 million and 
      $22.8 million, respectively, for the same periods in 2005.
    
    
      Financial Summary
    
    
      Revenues for the third quarter of 2006 included net investment income of 
      $5.3 million and realized investment losses of $259,000, compared with 
      net investment income in the 2005 third quarter of $4.6 million and 
      realized investment losses of $264,000. For the first nine months of 
      2006, net investment income totaled $15.5 million and realized 
      investment losses of $423,000. A year earlier, SCPIE reported nine-month 
      net investment income of $13.4 million and realized investment losses of 
      $258,000.
    
    
      The increase in net investment income in 2006 over comparable periods in 
      2005 is attributable to the general rise in shorter-term interest rates 
      during 2006.
    
    
      At September 30, 2006, SCPIE’s balance sheet 
      remained debt-free. Book value at the end of the third quarter was 
      $21.08, compared with $20.05 per share at December 31, 2005.
    
    
      About SCPIE Holdings
    
    
      SCPIE Holdings Inc. is a leading provider of healthcare liability 
      insurance for physicians, oral and maxillofacial surgeons, and other 
      healthcare providers, as well as medical groups and healthcare 
      facilities. Since the company was founded in 1976, it has carved out a 
      significant niche in the insurance industry by providing innovative 
      products and services specifically for the healthcare community.
    
    
      Investor Conference Call
    
    
      An investor conference call to discuss SCPIE’s 
      third-quarter 2006 results will be held today, November 3, 2006, at 9 am 
      PST (12 noon EST). The call will be open to all interested investors 
      through a live audio web broadcast via the Internet at www.scpie.com 
      and www.earnings.com.
    
    
      Rebroadcast over the Internet will be available for one year on both 
      websites. A telephonic playback of the call will be available 
      approximately 11 am PST, Friday, November 3, 2006, to 5 pm PST, Friday, 
      November 10, 2006. Listeners should call 888/286-8010 (domestic) or 
      617/801-6888 (international) and use Reservation Number 55663379.
    
    
      Forward-Looking Statements
    
    
      In addition to historical information, this news release contains 
      forward-looking statements that are based upon the company’s 
      estimates and expectations concerning future events and are subject to 
      certain risks and uncertainties that could cause actual results to 
      differ materially from those reflected in the forward-looking 
      statements. Actuarial estimates of losses and loss expenses and 
      expectations concerning the company’s ability 
      to retain current insureds at profitable levels, successful withdrawal 
      from the assumed reinsurance business, continued solvency of the company’s 
      reinsurers, obtaining rate change regulatory approvals, expansion of 
      liability insurance business in its principal market, and improved 
      performance and profitability are dependent upon a variety of factors, 
      including future economic, competitive and market conditions, frequency 
      and severity of catastrophic events, future legislative and regulatory 
      actions, uncertainties and potential delays in obtaining rate approvals, 
      the level of ratings from recognized rating services, the inherent 
      uncertainty of loss and loss expense estimates in both the core business 
      and discontinued non-core business and the cyclical nature of the 
      property and casualty insurance industry, all of which are difficult or 
      impossible to predict accurately and many of which are beyond the 
      control of the company. The company is also subject to certain 
      structural risks as an insurance holding company, including statutory 
      restrictions on dividends and other intercompany transactions. In light 
      of the significant uncertainties inherent in the forward-looking 
      information herein, the inclusion of such information should not be 
      regarded as representation by the company or any other person that the 
      company’s objectives or plans will be 
      realized.
    
    
      
        
          SCPIE Holdings Inc. and Subsidiaries
        
      
      
        
          Consolidated Balance Sheets
        
      
      
        
          (Dollars in Thousands)
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          September 30, 2006
        
        
        
        
          December 31, 2005
        
      
      
        
          ASSETS
        
        
        
        
        
        
        
        
        
      
      
        
          Securities available-for-sale:
        
        
        
        
        
        
        
        
        
      
      
        
          Fixed maturities investments, at fair value (amortized cost 2006 - 
          $424,653; 2005 - $469,350)
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          $
        
        
          416,517 
        
        
        
        
          $
        
        
          461,480 
        
      
      
        
          Equity investments, at fair value (cost 2006 - $1,779; 2005 - $1,934)
        
        
        
        
        
        
        
        
        
      
      
        
        
        
           
        
        
          2,030 
        
        
        
        
           
        
        
          2,095 
        
      
      
        
          Total securities available-for-sale
        
        
        
        
        
        
          418,547 
        
        
        
        
        
        
          463,575 
        
      
      
        
          Cash and cash equivalents
        
        
        
        
           
        
        
          114,224 
        
        
        
        
           
        
        
          68,783 
        
      
      
        
          Total investments
        
        
        
        
        
        
          532,771 
        
        
        
        
        
        
          532,358 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Accrued investment income
        
        
        
        
        
        
          5,038 
        
        
        
        
        
        
          5,874 
        
      
      
        
          Premiums receivable
        
        
        
        
        
        
          23,510 
        
        
        
        
        
        
          18,731 
        
      
      
        
          Assumed Reinsurance Receivables
        
        
        
        
        
        
          16,817 
        
        
        
        
        
        
          6,960 
        
      
      
        
          Reinsurance recoverable
        
        
        
        
        
        
          50,807 
        
        
        
        
        
        
          55,933 
        
      
      
        
          Deferred policy acquisition costs
        
        
        
        
        
        
          8,815 
        
        
        
        
        
        
          7,120 
        
      
      
        
          Deferred federal income taxes, net
        
        
        
        
        
        
          47,874 
        
        
        
        
        
        
          51,214 
        
      
      
        
          Property and equipment, net
        
        
        
        
        
        
          1,913 
        
        
        
        
        
        
          2,449 
        
      
      
        
          Other assets
        
        
        
        
           
        
        
          6,671 
        
        
        
        
           
        
        
          6,325 
        
      
      
        
          Total assets
        
        
        
        
          $
        
        
          694,216 
        
        
        
        
          $
        
        
          686,964 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          LIABILITIES
        
        
        
        
        
        
        
        
        
      
      
        
          Reserves:
        
        
        
        
        
        
        
        
        
      
      
        
          Loss and loss adjustment expenses
        
        
        
        
          $
        
        
          422,374 
        
        
        
        
          $
        
        
          429,315 
        
      
      
        
          Unearned premiums
        
        
        
        
           
        
        
          47,396 
        
        
        
        
           
        
        
          41,705 
        
      
      
        
          Total reserves
        
        
        
        
        
        
          469,770 
        
        
        
        
        
        
          471,020 
        
      
      
        
          Amounts held for reinsurance
        
        
        
        
        
        
          7,005 
        
        
        
        
        
        
          4,818 
        
      
      
        
          Other liabilities
        
        
        
        
           
        
        
          16,350 
        
        
        
        
           
        
        
          20,333 
        
      
      
        
          Total liabilities
        
        
        
        
        
        
          493,125 
        
        
        
        
        
        
          496,171 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Commitments and contingencies
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          STOCKHOLDERS' EQUITY
        
        
        
        
        
        
        
        
        
      
      
        
          Preferred stock - par value $1.00, 5,000,000 shares authorized, no 
          shares issued or outstanding
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          - 
        
        
        
        
        
        
          - 
        
      
      
        
          Common stock - par value $.0001, 30,000,000 shares authorized, 
          12,792,091 shares issued, 2006 - 9,541,303 shares outstanding 2005 - 
          9,456,916 shares outstanding
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          1 
        
        
        
        
        
        
          1 
        
      
      
        
          Additional paid-in capital
        
        
        
        
        
        
          37,127 
        
        
        
        
        
        
          37,127 
        
      
      
        
          Retained earnings
        
        
        
        
        
        
          267,942 
        
        
        
        
        
        
          259,645 
        
      
      
        
          Treasury stock, at cost (2006 - 2,750,788 shares and 2005 - 
          2,835,175 shares)
        
        
        
        
        
        
          (95,227)
        
        
        
        
        
        
          (97,063)
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Subscription notes receivable
        
        
        
        
        
        
          (2,347)
        
        
        
        
        
        
          (2,649)
        
      
      
        
          Accumulated other comprehensive income
        
        
        
        
           
        
        
          (6,405)
        
        
        
        
           
        
        
          (6,268)
        
      
      
        
          Total stockholders' equity
        
        
        
        
           
        
        
          201,091 
        
        
        
        
           
        
        
          190,793 
        
      
      
        
          Total liabilities and stockholders' equity
        
        
        
        
          $
        
        
          694,216 
        
        
        
        
          $
        
        
          686,964 
        
      
    
    
      
        
          SCPIE Holdings Inc. and Subsidiaries
        
      
      
        
          Consolidated Statements of Operations
        
      
      
        
          (Dollars in Thousands, except per-share data)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          Nine Months Ended
        
        
        
        
          Three Months Ended
        
      
      
        
        
        
        
        
          September 30, 2006
        
        
           
        
        
          September 30, 2005
        
        
        
        
          September 30, 2006
        
        
           
        
        
          September 30, 2005
        
      
      
        
          Revenues:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Net premiums earned
        
        
        
        
          $
        
        
          93,245 
        
        
        
        
          $
        
        
          96,408 
        
        
        
        
          $
        
        
          30,163 
        
        
        
        
          $
        
        
          31,371 
        
      
      
        
          Net investment income
        
        
        
        
        
        
          15,476 
        
        
        
        
        
        
          13,355 
        
        
        
        
        
        
          5,265 
        
        
        
        
        
        
          4,556 
        
      
      
        
          Realized investment gains/(losses)
        
        
        
        
        
        
          (423)
        
        
        
        
        
        
          (258)
        
        
        
        
        
        
          (259)
        
        
        
        
        
        
          (264)
        
      
      
        
          Other revenue
        
        
        
        
           
        
        
          18 
        
        
        
        
           
        
        
          1,522 
        
        
        
        
           
        
        
          (41)
        
        
        
        
           
        
        
          1,348 
        
      
      
        
          Total revenues
        
        
        
        
        
        
          108,316 
        
        
        
        
        
        
          111,027 
        
        
        
        
        
        
          35,128 
        
        
        
        
        
        
          37,011 
        
      
      
        
          Expenses:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Losses & loss adjustment expenses incurred
        
        
        
        
        
        
          74,584 
        
        
        
        
        
        
          86,016 
        
        
        
        
        
        
          23,678 
        
        
        
        
        
        
          32,958 
        
      
      
        
          Other operating expenses
        
        
        
        
           
        
        
          21,071 
        
        
        
        
           
        
        
          24,501 
        
        
        
        
           
        
        
          6,334 
        
        
        
        
           
        
        
          8,782 
        
      
      
        
          Total expenses
        
        
        
        
           
        
        
          95,655 
        
        
        
        
           
        
        
          110,517 
        
        
        
        
           
        
        
          30,012 
        
        
        
        
           
        
        
          41,740 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income before federal income taxes
        
        
        
        
        
        
          12,661 
        
        
        
        
        
        
          510 
        
        
        
        
        
        
          5,116 
        
        
        
        
        
        
          (4,729)
        
      
      
        
          Income tax expenses
        
        
        
        
           
        
        
          4,364 
        
        
        
        
           
        
        
          256 
        
        
        
        
           
        
        
          1,833 
        
        
        
        
           
        
        
          (1,607)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income
        
        
        
        
          $
        
        
          8,297 
        
        
        
        
          $
        
        
          254 
        
        
        
        
          $
        
        
          3,283 
        
        
        
        
          $
        
        
          (3,122)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Basic earnings per share of common stock
        
        
        
        
          $
        
        
          0.87 
        
        
        
        
          $
        
        
          0.03 
        
        
        
        
          $
        
        
          0.35 
        
        
        
        
          $
        
        
          (0.33)
        
      
      
        
          Diluted earnings per share of common stock
        
        
        
        
          $
        
        
          0.86 
        
        
        
        
          $
        
        
          0.03 
        
        
        
        
          $
        
        
          0.34 
        
        
        
        
          $
        
        
          (0.33)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Average number of shares outstanding-basic
        
        
        
        
        
        
          9,504,992 
        
        
        
        
        
        
          9,416,827 
        
        
        
        
        
        
          9,506,208 
        
        
        
        
        
        
          9,429,052 
        
      
      
        
          Average number of shares outstanding-diluted
        
        
        
        
        
        
          9,619,165 
        
        
        
        
        
        
          9,593,713 
        
        
        
        
        
        
          9,620,381 
        
        
        
        
        
        
          9,605,938 
        
      
    
    
      
        
          SCPIE Holdings Inc. and Subsidiaries
        
      
      
        
          Supplemental Financial Data
        
      
      
        
          (Dollars in Thousands)
        
      
      
        
           
        
      
      
        
        
        
        
        
          
            Nine Months Ended September 30, 2006
          
        
        
        
        
          
            Nine Months Ended September 30, 2005
          
        
      
      
        
        
        
        
        
          Direct Healthcare Liability
        
        
        
        
          Assumed
        
        
        
        
        
        
        
        
        
        
        
        
          Direct Healthcare Liability
        
        
        
        
          Assumed
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
          
            Core(2)
          
        
        
        
        
          
            Non-Core
          
          
            (3)(4)
          
        
        
        
        
          
            Reinsurance
          
          
            (4)(5)
          
        
        
        
        
          
            Other(7)
          
        
        
        
        
          
            Total(6)
          
        
        
        
        
          
            Core(2)
          
        
        
        
        
          
            Non-Core
          
          
            (3)(4)
          
        
        
        
        
          
            Reinsurance
          
          
            (4)(5)
          
        
        
        
        
          
            Other
          
        
        
        
        
          
            Total(6)
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            Net written premium(1)
          
        
        
        
        
          $
        
        
          98,757 
        
        
        
        
          $
        
        
          - 
        
        
        
        
          $
        
        
          179 
        
        
        
        
        
        
        
        
          $
        
        
          98,936 
        
        
        
        
          $
        
        
          102,287 
        
        
        
        
          $
        
        
          56 
        
        
        
        
          $
        
        
          (1,524)
        
        
        
        
        
        
        
        
          $
        
        
          100,819 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net earned premium
        
        
        
        
          $
        
        
          93,066 
        
        
        
        
          $
        
        
          - 
        
        
        
        
          $
        
        
          179 
        
        
        
        
        
        
        
        
          $
        
        
          93,245 
        
        
        
        
          $
        
        
          96,474 
        
        
        
        
          $
        
        
          73 
        
        
        
        
          $
        
        
          (139)
        
        
        
        
        
        
        
        
          $
        
        
          96,408 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net investment income
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          15,476 
        
        
        
        
        
        
          15,476 
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          13,355 
        
        
        
        
        
        
          13,355 
        
      
      
        
          Realized investment losses
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          (423)
        
        
        
        
        
        
          (423)
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          (258)
        
        
        
        
        
        
          (258)
        
      
      
        
          Other revenue
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
          18 
        
        
        
        
           
        
        
          18 
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
          1,522 
        
        
        
        
           
        
        
          1,522 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total revenue
        
        
        
        
        
        
          93,066 
        
        
        
        
        
        
          - 
        
        
        
        
        
        
          179 
        
        
        
        
        
        
          15,071 
        
        
        
        
        
        
          108,316 
        
        
        
        
        
        
          96,474 
        
        
        
        
        
        
          73 
        
        
        
        
        
        
          (139)
        
        
        
        
        
        
          14,619 
        
        
        
        
        
        
          111,027 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Incurred loss and LAE
        
        
        
        
        
        
          66,083 
        
        
        
        
        
        
          - 
        
        
        
        
        
        
          8,501 
        
        
        
        
        
        
        
        
        
        
          74,584 
        
        
        
        
        
        
          70,229 
        
        
        
        
        
        
          (2,612)
        
        
        
        
        
        
          18,399 
        
        
        
        
        
        
        
        
        
        
          86,016 
        
      
      
        
          Other expenses
        
        
        
        
           
        
        
          19,294 
        
        
        
        
           
        
        
          - 
        
        
        
        
           
        
        
          168 
        
        
        
        
           
        
        
          1,609 
        
        
        
        
           
        
        
          21,071 
        
        
        
        
           
        
        
          20,161 
        
        
        
        
           
        
        
          50 
        
        
        
        
           
        
        
          4,290 
        
        
        
        
           
        
        
          - 
        
        
        
        
           
        
        
          24,501 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            Net underwriting income/(loss)
          
        
        
        
        
          $
        
        
          7,689 
        
        
        
        
          $
        
        
          - 
        
        
        
        
          $
        
        
          (8,490)
        
        
        
        
        
        
        
        
        
        
          (801)
        
        
        
        
          $
        
        
          6,084 
        
        
        
        
          $
        
        
          2,635 
        
        
        
        
          $
        
        
          (22,828)
        
        
        
        
        
        
        
        
        
        
          (14,109)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net investment income, other revenue & expense
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          13,462 
        
        
        
        
           
        
        
          13,462 
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          14,619 
        
        
        
        
           
        
        
          14,619 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income before federal Income taxes
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          12,661 
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          510 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            Net cash provided/(used) in operating activities
          
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          2,350 
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          (35,818)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Loss ratio
        
        
        
        
        
        
          71.0%
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          72.8%
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Expense ratio
        
        
        
        
           
        
        
          20.7%
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
        
          20.9%
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Combined ratio (GAAP)
        
        
        
        
           
        
        
          91.7%
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
        
          93.7%
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
    
    
      
        
          1) Net written premium is a non-GAAP financial measure which 
          represents the premiums charged on policies issued during a fiscal 
          period less any reinsurance. Net written premium is a statutory 
          measure of production levels. Net earned premium, a comparable GAAP 
          measure, represents the portion of premiums written that is 
          recognized as income in the financial statements for the periods 
          presented and earned on a pro-rata basis over the term of the 
          policies. A reconciliation of net written premium to net earned 
          premium is provided herein.
        
      
      
        
           
        
      
      
        
          2) Core Direct Healthcare Liability Business represents California 
          and Delaware excluding discontinued dental and hospital programs.
        
      
      
        
           
        
      
      
        
          3) Non-Core Direct Healthcare Liability Business represents other 
          state business and dental and hospital programs in California.
        
      
      
        
           
        
      
      
        
          4) Ratios are not shown for the Non-Core Healthcare Liability and 
          Assumed Reinsurance columns, because their run-off status produces 
          ratios which are not meaningful.
        
      
      
        
           
        
      
      
        
          5) The expense component for the Assumed Reinsurance segment 
          includes the effect of the retrospective accounting treatment 
          required by Financial Accounting Standards Board No. 113, more fully 
          described in SCPIE's 2005 Annual Filing in Form 10K, page 41.
        
      
      
        
           
        
      
      
        
          6) Ratios are not shown for the Total column, because inclusion of 
          the discontinued Non-Core Healthcare Liability and Assumed 
          Reinsurance results produce ratios which are no longer meaningful.
        
      
      
        
           
        
      
      
        
          7) Other expenses in column relate to a proxy challenge instituted 
          in January 2006.
        
      
    
    
    
    
      
        
          SCPIE Holdings Inc. and Subsidiaries
        
      
      
        
          Supplemental Financial Data
        
      
      
        
          (Dollars in Thousands)
        
      
      
        
           
        
      
      
        
        
        
        
        
          
            Three Months Ended September 30, 2006
          
        
        
        
        
          
            Three Months Ended September 30, 2005
          
        
      
      
        
        
        
        
        
          Direct Healthcare Liability
        
        
        
        
          Assumed
        
        
        
        
        
        
        
        
        
        
        
        
          Direct Healthcare Liability
        
        
        
        
          Assumed
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
          
            Core(2)
          
        
        
        
        
          
            Non-Core
          
          
            (3)(4)
          
        
        
        
        
          
            Reinsurance
          
          
            (4)(5)
          
        
        
        
        
          
            Other(7)
          
        
        
        
        
          
            Total(6)
          
        
        
        
        
          
            Core(2)
          
        
        
        
        
          
            Non-Core
          
          
            (3)(4)
          
        
        
        
        
          
            Reinsurance
          
          
            (4)(5)
          
        
        
        
        
          Other
        
        
        
        
          
            Total(6)
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            Net written premium(1)
          
        
        
        
        
          $
        
        
          6,703 
        
        
        
        
          $
        
        
          - 
        
        
        
        
          $
        
        
          (331)
        
        
        
        
        
        
        
        
          $
        
        
          6,372 
        
        
        
        
          $
        
        
          6,911 
        
        
        
        
          $
        
        
          (102)
        
        
        
        
          $
        
        
          (675)
        
        
        
        
        
        
        
        
          $
        
        
          6,134 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net earned premium
        
        
        
        
          $
        
        
          30,494 
        
        
        
        
          $
        
        
          - 
        
        
        
        
          $
        
        
          (331)
        
        
        
        
        
        
        
        
          $
        
        
          30,163 
        
        
        
        
          $
        
        
          32,017 
        
        
        
        
          $
        
        
          (97)
        
        
        
        
          $
        
        
          (549)
        
        
        
        
        
        
        
        
          $
        
        
          31,371 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net investment income
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          5,265 
        
        
        
        
        
        
          5,265 
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          4,556 
        
        
        
        
        
        
          4,556 
        
      
      
        
          Realized investment losses
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          (259)
        
        
        
        
        
        
          (259)
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          (264)
        
        
        
        
        
        
          (264)
        
      
      
        
          Other revenue/(loss)
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
          - 
        
        
        
        
           
        
        
          (41)
        
        
        
        
           
        
        
          (41)
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
          1,347 
        
        
        
        
           
        
        
          1,347 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total revenue
        
        
        
        
        
        
          30,494 
        
        
        
        
        
        
          - 
        
        
        
        
        
        
          (331)
        
        
        
        
        
        
          4,965 
        
        
        
        
        
        
          35,128 
        
        
        
        
        
        
          32,017 
        
        
        
        
        
        
          (97)
        
        
        
        
        
        
          (549)
        
        
        
        
        
        
          5,639 
        
        
        
        
        
        
          37,010 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Incurred loss and LAE
        
        
        
        
        
        
          21,679 
        
        
        
        
        
        
          - 
        
        
        
        
        
        
          1,999 
        
        
        
        
        
        
        
        
        
        
          23,678 
        
        
        
        
        
        
          21,467 
        
        
        
        
        
        
          (2,604)
        
        
        
        
        
        
          14,095 
        
        
        
        
        
        
        
        
        
        
          32,958 
        
      
      
        
          Other expenses
        
        
        
        
           
        
        
          6,031 
        
        
        
        
           
        
        
          - 
        
        
        
        
           
        
        
          260 
        
        
        
        
           
        
        
          43 
        
        
        
        
           
        
        
          6,334 
        
        
        
        
           
        
        
          6,131 
        
        
        
        
           
        
        
          (27)
        
        
        
        
           
        
        
          2,678 
        
        
        
        
           
        
        
          - 
        
        
        
        
           
        
        
          8,782 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            Net underwriting income/(loss)
          
        
        
        
        
          $
        
        
          2,784 
        
        
        
        
          $
        
        
          - 
        
        
        
        
          $
        
        
          (2,590)
        
        
        
        
        
        
        
        
        
        
          194 
        
        
        
        
          $
        
        
          4,419 
        
        
        
        
          $
        
        
          2,534 
        
        
        
        
          $
        
        
          (17,322)
        
        
        
        
        
        
        
        
        
        
          (10,369)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net investment income, other revenue & expense
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          4,922 
        
        
        
        
           
        
        
          4,922 
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          5,639 
        
        
        
        
           
        
        
          5,639 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income (loss) before federal Income taxes
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          5,116 
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          (4,730)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            Net cash provided/(used) in operating activities
          
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          3,747 
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          (941)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Loss ratio
        
        
        
        
        
        
          71.1%
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          67.0%
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Expense ratio
        
        
        
        
           
        
        
          19.8%
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
        
          19.1%
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Combined ratio (GAAP)
        
        
        
        
           
        
        
          90.9%
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
        
          86.1%
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
    
    
      
        
          1) Net written premium is a non-GAAP financial measure which 
          represents the premiums charged on policies issued during a fiscal 
          period less any reinsurance. Net written premium is a statutory 
          measure of production levels. Net earned premium, a comparable GAAP 
          measure, represents the portion of premiums written that is 
          recognized as income in the financial statements for the periods 
          presented and earned on a pro-rata basis over the term of the 
          policies. A reconciliation of net written premium to net earned 
          premium is provided herein.
        
      
      
        
           
        
      
      
        
          2) Core Direct Healthcare Liability Business represents California 
          and Delaware excluding discontinued dental and hospital programs.
        
      
      
        
           
        
      
      
        
          3) Non-Core Direct Healthcare Liability Business represents other 
          state business and dental and hospital programs in California.
        
      
      
        
           
        
      
      
        
          4) Ratios are not shown for the Non-Core Healthcare Liability and 
          Assumed Reinsurance columns, because their run-off status produces 
          ratios which are not meaningful.
        
      
      
        
           
        
      
      
        
          5) The expense component for the Assumed Reinsurance segment 
          includes the effect of the retrospective accounting treatment 
          required by Financial Accounting Standards Board No. 113, more fully 
          described in SCPIE's 2005 Annual Filing in Form 10K, page 41.
        
      
      
        
           
        
      
      
        
          6) Ratios are not shown for the Total column, because inclusion of 
          the discontinued Non-Core Healthcare Liability and Assumed 
          Reinsurance results produce ratios which are not meaningful.
        
      
      
        
           
        
      
      
        
          7) Other expenses in column relate to a proxy challenge instituted 
          in January 2006.
        
      
    
    
    
    
      
        
          SCPIE Holdings Inc. and Subsidiaries
        
      
      
        
          Supplemental Financial Data
        
      
      
        
          (Dollars in Thousands)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
          9/30/2006 
        
      
      
        
          Fixed-maturity portfolio
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          U.S. government & agencies
        
        
        
        
          $
        
        
          175,219 
        
        
        
        
          42.1%
        
      
      
        
          Mortgage & asset-backed
        
        
        
        
        
        
          74,691 
        
        
        
        
          17.9%
        
      
      
        
          Corporate
        
        
        
        
           
        
        
          166,607 
        
        
           
        
        
          40.0%
        
      
      
        
          Total
        
        
        
        
          $
        
        
          416,517 
        
        
        
        
          100.0%
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Average quality
        
        
        
        
        
        
        
        
          AAA 
        
      
      
        
          Effective duration
        
        
        
        
        
        
        
        
          3.0 
        
      
      
        
          Yield to maturity
        
        
        
        
        
        
        
        
          4.5%
        
      
      
        
          Weighted average combined maturity
        
        
        
        
        
        
        
        
          3.8 
        
      
    
    
      
        
        
        
        
        
          Nine Months Ended
        
        
        
        
          Three Months Ended
        
      
      
        
        
        
        
        
          
            September 30,2006
          
        
        
        
        
          
            September 30,2005
          
        
        
        
        
          
            September 30,2006
          
        
        
        
        
          
            September 30,2005
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total premiums
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Net written premium
        
        
        
        
          $ 98,936 
        
        
        
        
          $ 100,819 
        
        
        
        
          $ 6,372 
        
        
        
        
          $ 6,134 
        
      
      
        
          Change in unearned premium
        
        
        
        
          (5,691)
        
        
        
        
          (4,411)
        
        
        
        
          23,791 
        
        
        
        
          25,237 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net earned premium
        
        
        
        
          $ 93,245 
        
        
        
        
          $ 96,408 
        
        
        
        
          $ 30,163 
        
        
        
        
          $ 31,371 
        
      
    
  
SCPIE Holdings Inc. (NYSE:SKP), a major provider of healthcare
liability insurance, reported improved net income for its third
quarter and nine months ended September 30, 2006.

   For the 2006 third quarter, SCPIE reported net income of $3.3
million, or $0.34 per diluted share, on total revenues of $35.1
million. This compares to a net loss in the 2005 third quarter of $3.1
million, or a loss of $0.33 per diluted share, on total revenues of
$37.0 million.

   For the first nine months of this year, SCPIE reported net income
of $8.3 million, or $0.86 per diluted share, on revenues of $108.3
million. This compares to net income for the prior-year nine months of
$254,000, or $0.03 per diluted share, on revenues of $111.0 million.

   Core Operating Review

   The Company has realized improvement in its core business
throughout the first nine months of 2006, including the third quarter
of 2006. This represents a continuation of the improvement that began
early in 2005.

   In the 2006 third quarter, SCPIE's core direct healthcare
liability operations posted an underwriting profit of $2.8 million,
compared to $4.4 million in the same period in 2005. In the 2005 third
quarter, the Company recognized a significant reduction in claims
frequency. The favorable trend in claims frequency has continued in
2006, but at a lower rate.

   Net earned premium for core direct healthcare operations totaled
$30.5 million for the 2006 third quarter, compared with $32.0 million
for the same period a year earlier. Net written premium for the 2006
third quarter was $6.7 million, compared with $6.9 million in the same
prior-year period.

   The combined ratio for SCPIE's core business in the 2006 third
quarter was 90.9%, with a loss ratio of 71.1%. A year ago, the
company's combined ratio for the third quarter was 86.1%, including a
loss ratio of 67.0%. The core expense ratio in the 2006 third quarter
increased slightly to 19.8% from 19.1% in 2005.

   For the first three quarters of 2006, SCPIE's core healthcare
operations had an underwriting profit of $7.7 million, a 26.2%
increase over the underwriting profit of $6.1 million in the first
nine months of 2005. Net earned premiums for the core business
decreased slightly to $93.1 million from $96.5 million a year earlier.
Net written premiums totaled $98.8 million, compared with $102.3
million in the first nine months of 2005. The combined ratio for the
nine-month 2006 period was 91.7%, including a loss ratio of 71.0%.
This is improved from a combined ratio for the first nine months of
2005 of 93.7%, with a loss ratio of 72.8%.

   SCPIE's retention rate for its core direct healthcare liability
business over the past 12 months totaled 95.5%.

   "This quarter and the full nine months' results clearly
demonstrate the improved financial condition of our company," said
Donald J. Zuk, SCPIE President and Chief Executive Officer. "Our core
book has performed very well, and we expect to build on that in the
months ahead."

   Non-Core Review

   SCPIE's continuing run-off of its non-core healthcare liability
operations in states other than California and Delaware had minimal
impact on the company's financial results for the third quarter and
first nine months of 2006. Net outstanding reserves for this segment
declined to $45.3 million from $60.6 million at December 31, 2005.
Open claims dropped to 156 from 229 at year-end 2005.

   In the assumed reinsurance area, which is also in run-off, there
was an underwriting loss of $2.6 million for the quarter and $8.5
million for the first nine months of 2006, compared to losses of $17.3
million and $22.8 million, respectively, for the same periods in 2005.

   Financial Summary

   Revenues for the third quarter of 2006 included net investment
income of $5.3 million and realized investment losses of $259,000,
compared with net investment income in the 2005 third quarter of $4.6
million and realized investment losses of $264,000. For the first nine
months of 2006, net investment income totaled $15.5 million and
realized investment losses of $423,000. A year earlier, SCPIE reported
nine-month net investment income of $13.4 million and realized
investment losses of $258,000.

   The increase in net investment income in 2006 over comparable
periods in 2005 is attributable to the general rise in shorter-term
interest rates during 2006.

   At September 30, 2006, SCPIE's balance sheet remained debt-free.
Book value at the end of the third quarter was $21.08, compared with
$20.05 per share at December 31, 2005.

   About SCPIE Holdings

   SCPIE Holdings Inc. is a leading provider of healthcare liability
insurance for physicians, oral and maxillofacial surgeons, and other
healthcare providers, as well as medical groups and healthcare
facilities. Since the company was founded in 1976, it has carved out a
significant niche in the insurance industry by providing innovative
products and services specifically for the healthcare community.

   Investor Conference Call

   An investor conference call to discuss SCPIE's third-quarter 2006
results will be held today, November 3, 2006, at 9 am PST (12 noon
EST). The call will be open to all interested investors through a live
audio web broadcast via the Internet at www.scpie.com and
www.earnings.com.

   Rebroadcast over the Internet will be available for one year on
both websites. A telephonic playback of the call will be available
approximately 11 am PST, Friday, November 3, 2006, to 5 pm PST,
Friday, November 10, 2006. Listeners should call 888/286-8010
(domestic) or 617/801-6888 (international) and use Reservation Number
55663379.

   Forward-Looking Statements

   In addition to historical information, this news release contains
forward-looking statements that are based upon the company's estimates
and expectations concerning future events and are subject to certain
risks and uncertainties that could cause actual results to differ
materially from those reflected in the forward-looking statements.
Actuarial estimates of losses and loss expenses and expectations
concerning the company's ability to retain current insureds at
profitable levels, successful withdrawal from the assumed reinsurance
business, continued solvency of the company's reinsurers, obtaining
rate change regulatory approvals, expansion of liability insurance
business in its principal market, and improved performance and
profitability are dependent upon a variety of factors, including
future economic, competitive and market conditions, frequency and
severity of catastrophic events, future legislative and regulatory
actions, uncertainties and potential delays in obtaining rate
approvals, the level of ratings from recognized rating services, the
inherent uncertainty of loss and loss expense estimates in both the
core business and discontinued non-core business and the cyclical
nature of the property and casualty insurance industry, all of which
are difficult or impossible to predict accurately and many of which
are beyond the control of the company. The company is also subject to
certain structural risks as an insurance holding company, including
statutory restrictions on dividends and other intercompany
transactions. In light of the significant uncertainties inherent in
the forward-looking information herein, the inclusion of such
information should not be regarded as representation by the company or
any other person that the company's objectives or plans will be
realized.

-0-
*T
                 SCPIE Holdings Inc. and Subsidiaries
                     Consolidated Balance Sheets
                        (Dollars in Thousands)

                                  September 30, 2006 December 31, 2005
                                  ------------------ -----------------
             ASSETS
Securities available-for-sale:
   Fixed maturities investments,
    at fair value (amortized cost
    2006 - $424,653; 2005 -
    $469,350)                     $         416,517  $        461,480
   Equity investments, at fair
    value (cost 2006 - $1,779;
    2005 - $1,934)                            2,030             2,095
                                  ------------------ -----------------
      Total securities available-
       for-sale                             418,547           463,575
Cash and cash equivalents                   114,224            68,783
                                  ------------------ -----------------
      Total investments                     532,771           532,358

Accrued investment income                     5,038             5,874
Premiums receivable                          23,510            18,731
Assumed Reinsurance Receivables              16,817             6,960
Reinsurance recoverable                      50,807            55,933
Deferred policy acquisition costs             8,815             7,120
Deferred federal income taxes,
 net                                         47,874            51,214
Property and equipment, net                   1,913             2,449
Other assets                                  6,671             6,325
                                  ------------------ -----------------
      Total assets                $         694,216  $        686,964
                                  ================== =================

           LIABILITIES
Reserves:
   Loss and loss adjustment
    expenses                      $         422,374  $        429,315
   Unearned premiums                         47,396            41,705
                                  ------------------ -----------------
      Total reserves                        469,770           471,020
Amounts held for reinsurance                  7,005             4,818
Other liabilities                            16,350            20,333
                                  ------------------ -----------------
      Total liabilities                     493,125           496,171

Commitments and contingencies

      STOCKHOLDERS' EQUITY
Preferred stock - par value
 $1.00, 5,000,000 shares
 authorized, no shares issued or
 outstanding                                      -                 -
Common stock - par value $.0001,
 30,000,000 shares authorized,
 12,792,091 shares issued, 2006 -
 9,541,303 shares outstanding
 2005 - 9,456,916 shares
 outstanding                                      1                 1
Additional paid-in capital                   37,127            37,127
Retained earnings                           267,942           259,645
Treasury stock, at cost (2006 -             (95,227)          (97,063)
 2,750,788 shares and 2005 -
 2,835,175 shares)
Subscription notes receivable                (2,347)           (2,649)
Accumulated other comprehensive
 income                                      (6,405)           (6,268)
                                  ------------------ -----------------
       Total stockholders' equity           201,091           190,793
                                  ------------------ -----------------
       Total liabilities and
        stockholders' equity      $         694,216  $        686,964
                                  ================== =================
*T

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*T
                 SCPIE Holdings Inc. and Subsidiaries
                Consolidated Statements of Operations
            (Dollars in Thousands, except per-share data)

                          Nine Months Ended      Three Months Ended
                       ----------------------- -----------------------
                       September   September   September   September
                         30, 2006    30, 2005    30, 2006    30, 2005
                       ----------------------- -----------------------
Revenues:
 Net premiums earned   $   93,245  $   96,408  $   30,163  $   31,371
 Net investment income     15,476      13,355       5,265       4,556
 Realized investment
  gains/(losses)             (423)       (258)       (259)       (264)
 Other revenue                 18       1,522         (41)      1,348
                       ----------- ----------- ----------- -----------
  Total revenues          108,316     111,027      35,128      37,011
Expenses:
 Losses & loss
  adjustment expenses
  incurred                 74,584      86,016      23,678      32,958
 Other operating
  expenses                 21,071      24,501       6,334       8,782
                       ----------- ----------- ----------- -----------
  Total expenses           95,655     110,517      30,012      41,740
                       ----------- ----------- ----------- -----------

Income before federal
 income taxes              12,661         510       5,116      (4,729)
Income tax expenses         4,364         256       1,833      (1,607)
                       ----------- ----------- ----------- -----------

 Net income            $    8,297  $      254  $    3,283  $   (3,122)
                       =========== =========== =========== ===========

Basic earnings per
 share of common stock $     0.87  $     0.03  $     0.35  $    (0.33)
                       =========== =========== =========== ===========
Diluted earnings per
 share of common stock $     0.86  $     0.03  $     0.34  $    (0.33)
                       =========== =========== =========== ===========

Average number of
 shares outstanding-
 basic                  9,504,992   9,416,827   9,506,208   9,429,052
Average number of
 shares outstanding-
 diluted                9,619,165   9,593,713   9,620,381   9,605,938
*T

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*T
                 SCPIE Holdings Inc. and Subsidiaries
                     Supplemental Financial Data
                        (Dollars in Thousands)


                         Nine Months Ended September 30, 2006
                  ---------------------------------------------------
                   Direct Healthcare
                       Liability        Assumed
                  ------------------
                            Non-Core  Reinsurance
                   Core(2)  (3)(4)      (4)(5)     Other(7)  Total(6)
                  -------- --------- ------------ --------- ---------

Net written
 premium(1)       $98,757  $      -  $       179            $ 98,936


Net earned
 premium          $93,066  $      -  $       179            $ 93,245

 Net investment
  income                                          $ 15,476    15,476
 Realized
  investment
  losses                                              (423)     (423)
 Other revenue                                          18        18
                  -------- --------- ------------ --------- ---------

 Total revenue     93,066         -          179    15,071   108,316

Incurred loss and
 LAE               66,083         -        8,501              74,584
Other expenses     19,294         -          168     1,609    21,071
                  -------- --------- ------------ --------- ---------

Net underwriting
 income/(loss)    $ 7,689  $      -  $    (8,490)               (801)
                  ======== ========= ============

Net investment
 income, other
 revenue &
 expense                                          $ 13,462    13,462
                                                  ========= ---------

Income before
 federal Income
 taxes                                                      $ 12,661
                                                            =========

Net cash
 provided/(used)
 in operating
 activities                                                 $  2,350
                                                            =========

Loss ratio           71.0%
Expense ratio        20.7%
                  --------

Combined ratio
 (GAAP)              91.7%
                  ========

                          Nine Months Ended September 30, 2005
                  ----------------------------------------------------
                   Direct Healthcare
                        Liability         Assumed
                  --------------------
                             Non-Core   Reinsurance
                   Core(2)    (3)(4)      (4)(5)      Other   Total(6)
                  --------- ---------- ------------ -------- ---------

Net written
 premium(1)       $102,287  $      56  $    (1,524)          $100,819


Net earned
 premium          $ 96,474  $      73  $      (139)          $ 96,408

 Net investment
  income                                            $13,355    13,355
 Realized
  investment
  losses                                               (258)     (258)
 Other revenue                                        1,522     1,522
                  --------- ---------- ------------ -------- ---------

 Total revenue      96,474         73         (139)  14,619   111,027

Incurred loss and
 LAE                70,229     (2,612)      18,399             86,016
Other expenses      20,161         50        4,290        -    24,501
                  --------- ---------- ------------ -------- ---------

Net underwriting
 income/(loss)    $  6,084  $   2,635  $   (22,828)           (14,109)
                  ========= ========== ============

Net investment
 income, other
 revenue &
 expense                                            $14,619    14,619
                                                    ======== ---------

Income before
 federal Income
 taxes                                                       $    510
                                                             =========

Net cash
 provided/(used)
 in operating
 activities                                                  $(35,818)
                                                             =========

Loss ratio            72.8%
Expense ratio         20.9%
                  ---------

Combined ratio
 (GAAP)               93.7%
                  =========
*T

-0-
*T
1) Net written premium is a non-GAAP financial measure which
 represents the premiums charged on policies issued during a fiscal
 period less any reinsurance. Net written premium is a statutory
 measure of production levels. Net earned premium, a comparable GAAP
 measure, represents the portion of premiums written that is
 recognized as income in the financial statements for the periods
 presented and earned on a pro-rata basis over the term of the
 policies. A reconciliation of net written premium to net earned
 premium is provided herein.

2) Core Direct Healthcare Liability Business represents California and
 Delaware excluding discontinued dental and hospital programs.

3) Non-Core Direct Healthcare Liability Business represents other
 state business and dental and hospital programs in California.

4) Ratios are not shown for the Non-Core Healthcare Liability and
 Assumed Reinsurance columns, because their run-off status produces
 ratios which are not meaningful.

5) The expense component for the Assumed Reinsurance segment includes
 the effect of the retrospective accounting treatment required by
 Financial Accounting Standards Board No. 113, more fully described in
 SCPIE's 2005 Annual Filing in Form 10K, page 41.

6) Ratios are not shown for the Total column, because inclusion of the
 discontinued Non-Core Healthcare Liability and Assumed Reinsurance
 results produce ratios which are no longer meaningful.

7) Other expenses in column relate to a proxy challenge instituted in
 January 2006.
*T

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*T
                 SCPIE Holdings Inc. and Subsidiaries
                     Supplemental Financial Data
                        (Dollars in Thousands)


                        Three Months Ended September 30, 2006
                 ----------------------------------------------------
                  Direct Healthcare
                       Liability        Assumed
                 -------------------
                            Non-Core  Reinsurance
                  Core(2)   (3)(4)      (4)(5)     Other(7)  Total(6)
                 --------- --------- ------------ --------- ---------

Net written
 premium(1)      $  6,703  $      -  $      (331)           $  6,372


Net earned
 premium         $ 30,494  $      -  $      (331)           $ 30,163

 Net investment
  income                                          $  5,265     5,265
 Realized
  investment
  losses                                              (259)     (259)
 Other
  revenue/(loss)                               -       (41)      (41)
                 --------- --------- ------------ --------- ---------

 Total revenue     30,494         -         (331)    4,965    35,128

Incurred loss
 and LAE           21,679         -        1,999              23,678
Other expenses      6,031         -          260        43     6,334
                 --------- --------- ------------ --------- ---------

Net underwriting
 income/(loss)   $  2,784  $      -  $    (2,590)                194
                 ========= ========= ============

Net investment
 income, other
 revenue &
 expense                                          $  4,922     4,922
                                                  ========= ---------

Income (loss)
 before federal
 Income taxes                                               $  5,116
                                                            =========

Net cash
 provided/(used)
 in operating
 activities                                                 $  3,747
                                                            =========

Loss ratio           71.1%
Expense ratio        19.8%
                 ---------

Combined ratio
 (GAAP)              90.9%
                 =========

                         Three Months Ended September 30, 2005
                  ----------------------------------------------------
                    Direct Healthcare
                         Liability         Assumed
                  ---------------------
                              Non-Core   Reinsurance
                   Core(2)    (3)(4)       (4)(5)     Other   Total(6)
                  --------- ----------- ------------ ------- ---------

Net written
 premium(1)       $  6,911  $     (102) $      (675)         $  6,134


Net earned
 premium          $ 32,017  $      (97) $      (549)         $ 31,371

 Net investment
  income                                             $4,556     4,556
 Realized
  investment
  losses                                               (264)     (264)
 Other
  revenue/(loss)                                      1,347     1,347
                  --------- ----------- ------------ ------- ---------

 Total revenue      32,017         (97)        (549)  5,639    37,010

Incurred loss and
 LAE                21,467      (2,604)      14,095            32,958
Other expenses       6,131         (27)       2,678       -     8,782
                  --------- ----------- ------------ ------- ---------

Net underwriting
 income/(loss)    $  4,419  $    2,534  $   (17,322)          (10,369)
                  ========= =========== ============

Net investment
 income, other
 revenue &
 expense                                             $5,639     5,639
                                                     ======= ---------

Income (loss)
 before federal
 Income taxes                                                $ (4,730)
                                                             =========

Net cash
 provided/(used)
 in operating
 activities                                                  $   (941)
                                                             =========

Loss ratio            67.0%
Expense ratio         19.1%
                  ---------

Combined ratio
 (GAAP)               86.1%
                  =========
*T

-0-
*T
1) Net written premium is a non-GAAP financial measure which
 represents the premiums charged on policies issued during a fiscal
 period less any reinsurance. Net written premium is a statutory
 measure of production levels. Net earned premium, a comparable GAAP
 measure, represents the portion of premiums written that is
 recognized as income in the financial statements for the periods
 presented and earned on a pro-rata basis over the term of the
 policies. A reconciliation of net written premium to net earned
 premium is provided herein.

2) Core Direct Healthcare Liability Business represents California and
 Delaware excluding discontinued dental and hospital programs.

3) Non-Core Direct Healthcare Liability Business represents other
 state business and dental and hospital programs in California.

4) Ratios are not shown for the Non-Core Healthcare Liability and
 Assumed Reinsurance columns, because their run-off status produces
 ratios which are not meaningful.

5) The expense component for the Assumed Reinsurance segment includes
 the effect of the retrospective accounting treatment required by
 Financial Accounting Standards Board No. 113, more fully described in
 SCPIE's 2005 Annual Filing in Form 10K, page 41.

6) Ratios are not shown for the Total column, because inclusion of the
 discontinued Non-Core Healthcare Liability and Assumed Reinsurance
 results produce ratios which are not meaningful.

7) Other expenses in column relate to a proxy challenge instituted in
 January 2006.
*T

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*T
                 SCPIE Holdings Inc. and Subsidiaries
                     Supplemental Financial Data
                        (Dollars in Thousands)


                                                 9/30/2006
                                       -------------------------------
       Fixed-maturity portfolio
--------------------------------------

U.S. government & agencies             $       175,219           42.1%
Mortgage & asset-backed                         74,691           17.9%
Corporate                                      166,607           40.0%
                                       -------------------------------
Total                                  $       416,517          100.0%

Average quality                                                   AAA
Effective duration                                                3.0
Yield to maturity                                                 4.5%
Weighted average combined maturity                                3.8
*T

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*T
                    Nine Months Ended          Three Months Ended
               --------------------------- ---------------------------
               September 30, September 30, September 30, September 30,
                   2006          2005          2006          2005
               ------------- ------------- ------------- -------------

Total premiums
--------------
 Net written
  premium           $98,936      $100,819        $6,372        $6,134
 Change in
  unearned
  premium            (5,691)       (4,411)       23,791        25,237
               ------------- ------------- ------------- -------------

 Net earned
  premium           $93,245       $96,408       $30,163       $31,371
               ============= ============= ============= =============
*T