In October, 2001, independent insurance industry monitoring and rating agency A.M. Best reaffirmed the A- (Excellent) rating assigned to Princeton Insurance Company in each of the past 8 years. A favorable rating from A.M. Best has always been important, but the downgrading of some of our competitors, has thrust this factor to the forefront of many insurance shoppers' minds. Maintaining our Excellent rating is a public testament to the confidence this prestigious third party places in our ability to adequately set reserves and rate risks, ensuring our ability to meet the future claim obligations of our policyholders.

Princeton's affiliation with doctor-owned Medical Liability Mutual Insurance Company (MLMIC) provides an additional level of comfort for doctors seeking a reliable, financially sound insurer. MLMIC is rated A (Excellent) by A.M. Best and is the largest medical professional liability insurer in the nation.

TABLE OF CONTENTS

Cover Page

Letter to Policyholders

A Year of Market Turmoil

Princeton's Legacy Continues

2001 Financial Statements

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