Thank you, operator. Welcome everyone to HCC’s second quarter conference call.

Joining me today is Chris Williams, our President; Tobin Whamond, our Chief Operating Officer; Craig Kelbel, our CEO of HCC Life; and Brad Irick, our Chief Financial Officer. Mike Schell, our Chief Property and Casualty Insurance Officer is traveling on business today.

We are pleased with our performance during the quarter despite the unprecedented and continued level of catastrophes which began in the first quarter of 2010. And while we are certainly affected by the catastrophes, we continue to do our utmost to protect our balance sheet from outsized losses.

Once again, we accomplished this objective as our after-tax net loss from the 2011 catastrophes amounted to 1.4% of shareholders’ equity as of December 31, 2010. A result we think you will find at the industry’s lower end of the range.

This quarter we included a schedule of our catastrophe experience on our press release to provide you with a historical perspective. We don’t plan to put that in every quarter, but I thought it would be helpful because of the rash catastrophes we had during the past 18 months.

The catastrophe losses themselves added 3.9 points to our GAAP loss ratio of 63.8% for the quarter and 6.6 points to our GAAP loss ratio for the year of 66%. The ex-cat loss ratio of 59.9% for the second quarter compares favorably to the same quarter last year which was not impacted by cats.

That loss ratio was 59% even. Our annualized return on average equity was 8.4% for the quarter and 7.1% year-to-date despite the catastrophes.

Book value per share grew 2.7% in the second quarter to $29.65 reflecting our net earnings as well as an increase in our unrealized gain position. Some important highlights for the quarter include a GAAP combined ratio of 89.2% including a GAAP expense ratio of 25.4% and accident year combined ratio of 86.6% including the catastrophes and 82.6% excluding the catastrophes.

Earned premium was up 4% for the second quarter, an improvement over the first quarter’s flat performance. Gross written and net premium were up 7% and 12% respectively.

Our renewal retention remains strong at 85% in the second quarter for business for which we capture this statistic. The increase in our net written premium is a function of increased gross written premium and our 2010 strategic decision to retain more of our own business.

The majority of the increase in the retaining business was generated by reducing or eliminating historically profitable quota-share reinsurance agreements. Tobin will now review with our financial highlights for the quarter.

Thank you, John. Total revenues increased 3% in the quarter to $584.9 million driven by the increase in earned premiums that John spoke of as well as increased net investment income.

In the second quarter of 2011, net investment income rose 4% year-over-year to $52.4 million compared to $50.2 million in the second quarter of 2010. Year-to-date net investment income rose 5% to $104 million compared to $99.5 million for the first half of 2010.

Book yield of the portfolio declined 10 basis points in the second quarter of 2011 to 3.9% compared to 4% in the first quarter of 2011. The tax equivalent yield of the portfolio in the second quarter of 2011 declined similarly to 4.8% compared to 4.9% in the first quarter of 2011 and 5.1% in the fourth quarter of 2010.

The average combined tax equivalent yield of HCC’s total investments comprised of our long-term fixed income portfolio and short-term investments was 4.5% reflecting the benefits of our continued efforts to deploy cash and short-term investments into the fixed income portfolio. The duration of our fixed income portfolio declined in the second quarter of 2011 to 5.3 years from 5.4 years in the first quarter and 5.5 years at the end of 2010 driven chiefly by shorter average life purchases as well as slightly increased prepayments fees on our Agency MBS portfolio.

The overall duration of our investments including short-term investments declined to 5.1 years at June 30, 2011 compared to 5.2 years at March 31, 2011. The quality of our portfolio remained consistently very high with the weighted average rating of AA plus at June 30, 2011.

Driven by the rally in U.S. dollar rates as well as tighter spreads for some municipal bonds in the second quarter of 2011, the net unrealized gain position of our available-for-sale portfolio increased to $194 million at June 30, 2011 compared to $116.4 million at March 31, 2011.

Our fixed income portfolio increased to $5.6 billion at June 30, 2011 from $5.2 billion at December 31, 2010, an 8% increase year-to-date. The company’s total investments including its fixed income securities and short-term investments increased to $5.8 billion at June 30, 2011.

As a general comment, the global fixed income markets continue to experience uncertainty and increased volatility as a result of concerns over European sovereign debt as well as the potential ratings downgrade of the debt of the U.S. government and its entities.

While we are not immune to these risks, we believe that HCC’s very high-quality bond portfolio is well-positioned on both in absolute and relative basis. In the second quarter of 2011, we experienced net adverse loss development of $13.3 million compared to net favorable development of $2.8 million in the same quarter of 2010.

For the year-to-date 2011, we experienced net adverse loss development of $22.3 million versus $2.2 million in the same period of 2010. $10.8 million of this adverse development related to what is known as club deal litigation involving some of the private equity clients that we ensure in our Professional Liability segment.

The club deal claims are based on allegations of violations of U.S. antitrust laws, this litigation has not been settled and defence cost for our insurance continue at amounts higher than previously estimated.

This adverse development relates to our diversified financial product line which includes private equity professional liability and general partner’s liability among other products. Effective January 1 of this year, we transferred management responsibility for this product line to our U.S.

D&O team in Connecticut. In line with this change, we have now included diversified financial products within the U.S.

D&O line in the Professional Liability segment. The club deal adverse development represented approximately 12 loss ratio points for the U.S.

D&O line in the second quarter of 2011. Operating cash flow for the first half of 2011 was $121.8 million, compared to $139.3 million for the first half of 2010.

Second quarter 2011 cash flow was negatively impacted by commutations in our Exited Lines equal to $33.6 million. HCC’s debt to total capital ratio increased to 10.7% at June 30th, compared to 8.3% at March 31, 2011.

This increase was driven by $95 million of outstanding borrowings under our revolving credit facility as of June 30, 2011 used to fund part of our share repurchases executed in the second quarter of 2011. Liquidity remains strong with approximately $492 million of available capacity on a revolving credit facility and $282 million of short-term investments and unrestricted cash.

Shareholders equity equal to $3.3 billion, total assets were $9.5 billion at June 30, 2011. From the capital management perspective in the second quarter of 2011, we repurchased in additional 5 million shares of our common stock for $161.4 million at an average cost of $32.06 per share.

As of June 30, 2011 the company had repurchased 6.3 million shares for $201.6 million at an average cost of $31.78 per share under the company's $300 million buyback authorization announced on March 14, 2011. Finally, we completed our annual scheduled goodwill impairment testing during the second quarter.

There was no impairment of goodwill for any of our reporting units. With that, I will now turn it back over to John.

Thank you.

Thanks, Tobin. Now I would like to take a few minutes to review with you the quarter by segment.

First, our U.S. Property and Casualty segment, our gross premium and net premium were up 3% and 13% respectively.

That reflects higher retentions of the business as well as business written by our new underwriting teams. Net earned premium was down 7% primarily reflecting the underwriting of our E&O book, which began in the second half of 2009.

Prices for the segment overall were flat. This segment contains our surplus lines component of our portfolio and is therefore experienced a greatest competitive pressures during the soft market.

The aviation loss ratio of 68.9% for the quarter was impacted by 3.5% by the quarter’s tornados. Professional Liability segment was flat with respect to gross written premium and up 8% on a net basis, and down 5% on an earned premium basis.

This book continues to be competitive with overall price reductions of approximately 6% for the quarter. During 2011, we enabled to grow our international book for the first time in several years, that’s thanks to the considerable and concentrated efforts of our Barcelona management and their staff in Barcelona and in London.

Our A&H segment turned another strong performance with gross and net premium growing by 6% and earned premium by 8%. The loss ratio was on plan and we achieved the rate increases 3% ahead of trend.

The U.S. Surety and Credit segment was down single digit across the board.

Our Surety business reflects the general economic conditions, while credit pricing was reflective of reduced rates as the overall credit environment both improved and became more competitive. Our International segment grew substantially across all lines again this quarter led by our property treaty and energy businesses.

Price increases were widespread throughout the segment. Unfortunately the segment was once again impacted by the quarter’s cat heading 22% to the quarter’s loss ratio.

The impact of the cash is most severe in our property and treaty book, but also impacted our energy and our property direct and facultative business. During the quarter, we wrote our targeted aggregate for the Gulf of Mexico windstorm and benefited from general price increases in the energy business, which began over a year ago with Deepwater Horizon loss.

Property treaty pricing improved 10% for the quarter and we continue to hold back aggregate for second half opportunities. M&A remains active for smaller strategic opportunity and we continue to execute our announced stock buyback plan.

In conclusion, the world economic environment makes business both interesting and challenging. Our portfolio of business, our strong balance sheet, and our conservative investment philosophy, positions HCC well to deal with what may lie before us and more importantly allows us to take advantage of opportunities as they arise.

Operator, with that I would like to open up the call to questions.

Thank you. Good morning.

A couple of questions, on the reserve development from the club settlement or the club litigation, is that related to credit crisis or it is something totally different?

This is something totally different. This is litigation that started in 2006 before the credit crisis actually even began.

Okay. Do you have a time horizon as to when that’s going to get resolved?

One of the reasons that we went ahead and made the decision we did this quarter is the Plaintiff Attorney just filled their fifth amended complaint and they are usually what files when they are thrown out of the fifth amended complaint probably file our sixth amended complaint. And all of the expenses that we have incurred in this line, we anticipate it going to be legal expenses.

So, we just assume that for the most part the limit that we have in play now have been exhausted.

Okay. Thank you.

And then on the catastrophes is this causing any change I know it seems that you managed them fairly effectively, but is it changing your plans for how you deal with your reinsurance and also is RMS 11 going to have any impact on your reinsurance purchasing?

If we look at we had very little loss to our core property treaty reinsurance program. So, it's had very little impact on that.

That that's not saying that the market as a whole is going to require anniversary higher retentions that it did in 2011, so, won’t know that until we get in to marketplace. But since we really haven’t presented our reinsurance and abundance of loss I think will fair better than most.

As far as RMS 11, we are not completely through our analysis of that. We just got the European windstorm model about a couple of weeks ago.

But based in our evaluation we are not big property writers anyways in the U.S. and we don’t think is going to have a material impact on our P&L at all.

Okay. And then one last question on the Professional Liability market that’s been discussed is being one of the weaker markets in terms of pricing and it sounds like there is not for horizon you don’t see much improvement.

Could we see further reduction and exposures in professional liability from HCC?

Our culture is if we don’t get the price that we want, we don’t write the business. So, we have to take it account by account then added up at the end of every quarter.

I think we will continue to be a leader in the business and I think to the extent that we feel we make an adequate margin on the particular account and the book overall we will continue to write it. Do I think there is some slight downward pressure on the overall book?

Yes, but we still making what we consider to be more than acceptable margins and great return on capital.

Okay. Thank you.

You are welcome Beth.

Hi thanks. Good morning.

Good morning Matt.

Just a couple of questions, first one on the A&H book you mentioned rates 3% above trend if I’m recalling that a little bit of an acceleration versus last quarter and kind of last year. Can you just comment more broadly on what’s going on in that segment, the medical stop loss line that’s allowing you to get increased pricing trend?

This is Craig Kelbel. Last year we were pretty much flat with the trend on the renewing business was this year we are, as John, said 2 or 3 points ahead of it.

I would tell you that seem to be indicative of the market being a little bit better. We have actually grown the premium as you have seen.

So, I think the market it is a little bit improved from our standpoint of where we sit.

Would you attribute that to any change in behavior from the fully insured competitors or is that more just medical stop loss market trend in and of itself?

I think it’s probably a number of things. Clearly the fully insured market is gotten a lot more aggressive with rate increase and reducing compensation to agents, which has been one of the deterrents of what people don’t sell fund from an agent standpoint.

So, there is more agents exploring as an option. I think there is a less people in the market.

So, therefore the market is a little bit better than it was year ago.

Okay, great. And then they should think it is a little bit the international segment particularly the property treaty book, John you mentioned holding back aggregate for the second half.

Are you kind of in the camp of thought that even absent and they sort of further events or see a better Jan 1 environment than we were now or do you think that we need events to happen to get pricing momentum further than here?

Well our opinion is that the property treaty business going to see further increases in pricing. We were almost non-existent player on the Florida book of business.

We want to save that capacity for the second half of the year and if you’ve seen some of the results that’s been coming out of Lloyd’s lately. I think people are going to require price increases to play in the -- not only the property treaty business but I think you will see it on the top property business and top energy business as well.

So, I think – regardless of whether or not we have a wind shell or any other cat at least for the next six months in those lines of business we should see as an industry improved pricing.

Okay, great. Thanks a lot of congrats on nice quarter.

You’re welcome Matt.

Thanks and good morning. Just going back to the discussion on club deal, can you just extend those claims of that litigation related to that portfolio companies or was that related to the private equity sponsors?

That was related to the private equity sponsors. Basically, the story of that was the Department of Justice alleging that two of the firms conspired together to go after a target and agreeing with the other potential acquirers of that target firm that they would not go after the company.

So, that’s the allegation. Nothing has been proved, but when you talk about big private equity firms using a thousand dollar an hour lawyers and going to the fifth amended complain you can see why legal expenses might be extremely high.

Got it and you said that the limits were exhausted. So, there is no….

What I said was the reserves that we put up exhausted the limits of the accounts that we believe that were in play for the club deal.

Got it and there is no reinstatement related to this, right?

No, not at all.

Okay, that’s helpful. The only other question I have is in your opening you talked about adverse development of 13.3 million and then you thought of break it out you said 10.8 related to the private equity.

Can you just touch upon what the remainder of the adverse development was from and was there ups and downs in that moving parts of that number?

It was a combination of a number of different factors none of which was material to the overall. So, it’s just the normal first or second quarter development that HCC typically experiences in the first half of the year.

As you know we do a major true up of our major lines of business in the third and fourth quarter.

Got it. Thanks for that.

You’re welcome Amit.

Hi, good morning. I guess first I wanted to maybe ask Craig on A&H.

You may have covered this before in past conference calls, but is there any impact to in that the first legislation on minimum loss ratios for the insurance or do you not sort of qualify the health insurer by that definition?

We – one of our thought was it’s does not qualify as a health insurer in that market. So, there is top loss the product does not have the loss ratio it can.

Okay, thanks. That’s helpful.

Second point, going to the adverse development. I just – I got a little confused in the story line of part, I guess listening closely enough.

first of all does the group that rode the business, that’s as you know quality, that has nothing to do with the professional liability group of Florida, that had the adverse development a quarter or two to go.

Florida, I am not really sure…

Well there is a – you had some adverse development on sessional liability a couple of quarters ago, and you said you made some changes that got you leadership…

That was miscellaneous C&O.

That was miscellaneous C&O. Just to be clear where the adverse development, it was basically business written in 2006 in PIA and Monakisko (ph).

When we resegmented your business, we looked at our overall operation and we decided the best place to manage that business was the professionals that we had in Connecticut and then we moved that business and again we’re moving that business under their management in the first quarter of 2011. And then in this quarter a quarter since we’ve done that we now included what was called audit before and US D&O under the professional liability line.

But it was not previously anytime we referred to D&O previously it was not included in our comments about D&O.

Okay, so it’s now the premiums in the margins of that segment would now be in the professional liability line?

Correct.

Thanks for polling my question.

You’re welcome Doug.

Thank you. Hey, John just a quick question if I could on the medical stock loss book.

I think so many say that the people are leaving that market now. is there a – was rates higher and kind of it seems like a nice continuing business.

Why would people be exiting that market now?

Well, I think it’s a pretty clinical business. And I think everybody should leave it right now.

Mike I think really the difference in that business is because everybody think they can do it, but it’s a very expense heavy business and we build Craig did the model when he joined us over a decade ago it’s a scalable model and that we find our when we buy books of business like when we thought on it and we’re able to put that book of business on our books for about a third or whatever people have to spend to get it on their books. So, they might be having a 99 or a 100% combined ratio.

We can do it for something in the mid to high 80s. And since the business doesn’t have a lot of investment income on any way there is really no sense of driving at an 100% without any real investment income.

So, I think the reason that you’ll see people leave that business is because people are rushing their capital today. And I see the return that most people get on – return they get on that capital is not the most attractive of businesses and therefore they exited it and we hope they continue to do so.

Great, thank you guys and thanks a lot. And then obviously you talked a little bit about D&O trends pricing trends in the U.S.

that lines coming in a bit. And then outside of the US you’re seeing D&O rise.

Is all of the international D&O written on – is that business written on outside the US as well so in other words underlying is outside the US or is some of that here or what’s causing that alternative.

Two things. One, all the business that we write in Barcelona and London is non-US business.

Got it, okay.

But it could have ADRs. Okay, so they could trade ADRs in the US.

The other thing that is written in the international is you have US and multinational corporation is I’d say German policy. We will issue from our international operation that policy covering the directors and officers in Germany or any other country.

We won that few D&O carriers that has the international flexibility to be able to respond to multinational clients needs.

I see got it. And then the last one is I could, in terms of the property cat business or the property treaty business you talked about.

I think you said before that you see that growing to maybe 2 to 300 million, is anything happening now on the pricing side that would cause you to say hey maybe that we can make that bigger or maybe we later see growth elsewhere. Thank you for answering all my questions.

Thanks Mike. When I was talking about 200 to 300 million, I was talking about when Chris became the CEO.

But in reality, really what we’re doing is we’re building our portfolio of business and what I think I was referring to that I think it would be reasonable to say at some point in the future that property treaty business could be 10% of the overall portfolio.

That’s what it was, yes.

Yeah, and 2 to 300 million. I would think this year we’re somewhere in the 115 to 120 million.

And well our property treaty underwriters initially ask us from our aggregate which we decided not to get one, but we want to see what was second place in the market. We’re happy with where we are right now.

We just wanted to write the same amount of aggregate in 2011 for more premium. We’ll look 2012 and go for the budget cycle.

Great, great. Thank you very much.

Welcome Mike.

Thanks good morning. In the professional lines, what’s your I guess appetite in this financial service lines and there is still a lot of macro risk, what’s your appetite and what’s the rate life in the US financial services area?

We still like the financial lines, we like it a lot. A lot of what we do in the financial lines is (side A) only.

As far as rating, obviously the rates are down, but they are within single-digits for the most part and last you are talking about a company that in 2008 and maybe 2009 was rated severely up, because they were anticipated to have serious credit exposure and the credit exposure never materialized in the form of a lawsuit or at least a successful lawsuit. So, we have a particular expertise in that line and we continue to pick and choose what we want to write and we are happy with our position.

And what was the development for 2010 in Professional Liability?

I don’t have that in front of me, sorry.

Okay, we can follow-up. In the U.S.

P&C segment, obviously of some different business, but on average what’s the rate level you are seeing right now?

Could you repeat that again on the Professional, I am sorry?

In the U.S. P&C segment, what’s your average rates you are getting or giving for that segment?

Well, there is multiple products that are involved in the U.S. P&C segment, but overall, the rates were flat, the business that’s more surplus lines was more in the minus 2% which is actually an improvement over previous quarters.

I think we have seen a withdrawal of some of the players that have come in, in the last three or four years. And I think that’s begun to tighten up the pricing a little bit, but that remains to be seen, let’s see what happens in the second half of the year.

Okay. And then again, I know there are couple of different lines there, but what’s the claim trend, is that – what’s the claim trend in the U.S.

P&C line?

The frequency is up slightly. The size of the claims are relatively the same and the severity is relatively the same as we had in the past.

But you are talking about relative, for the most part, you are talking about relatively small policies if you look at, but we included within that is aviation. Included in that is professional athlete.

So, it is a very mixed bag and very hard to characterize the rating policy by policy or line of business by line of business. Even some of those lines when we talk about disability, we can go anything from entertainers to professional football players to hedge fund managers.

So, it’s a pretty diverse book of business.

Okay, thank you very much.

You’re welcome.

Good morning and thanks for taking my call. I have a couple of follow-ups on medical top losses and I was wondering if you were able to comment at all on the Mackenzie study that came out back in June.

They did a survey of 1300 employers and they said just that the 30% would drop in player sponsor and coverage after 2014. So, just any comment that you’d be able to make on how you might be able to respond if employers end up dropping more coverage than was initially expected when healthcare reform came out?

This is Craig. Couple of comments I will make.

One is if you look at the study it’s really the people that it would – would labelled might drop coverage or generally the smaller segment of the market less than 50 lives, which is not the market that we are in. Our average size case is close to 500 lives.

There has been lots of studies, there was a Mercer study that recently was released of about 900 employers and it said less than 2% might consider dropping their coverage. So, there is a lot of variation of what might happen and this is a long way away in 2014.

I think our view would be or my view would be it has minimal impact in the market that we currently operate, which is the larger segment.

Great. Thanks Craig.

And if could have one follow-up on the same line, SIMETRA recently announced a deal where they would grow by up to a third and they must be one of your largest competitors, so I was wondering if you could make any comment on the deal or how it might change the competitive landscape in medical stop loss? Thanks.

Yeah. SIMETRA announced an acquisition of about $130 million of business that’s involved with.

Lot of that business will go to market and SIMETRA would obviously keep some of it. We probably will write some of it.

So, I don’t think it necessarily has a big impact too. I think SIMETRA has been around in this market for a long time and it is, I would tell you if it consolidates to somebody who has experience in the market, it probably improves the market, because it will be properly underwritten.

So, we don’t think it really has any kind of impact other than improving it, because there will be less competition because there will be less people in the market.

That’s helpful. And I heard from SIMETRA and yourself that loss cost trends are rising about 20% per year.

So, if loss cost trends are rising 20% you’re getting that little bit above that in pricing. I would expect your premiums to be growing faster.

So, I am wondering where the policies are going that aren't that our people just increasing the deductibles or our people just dropping the coverage, what’s the bridge between the rate increase and the premium increase.

Well we talk about the effective rate increase such as rate plus change in policy terms. So, if you looked at peer rate, our average rate is closer to a 9% increase.

So, it’s not as dramatic as their second rate which is probably 22%. Our actual policy count is increasing year-over-year, that’s really people are buying higher deductibles, people are I would say not necessarily dropping the coverage, but they’re changing their coverage to fit their price appetite.

So, we don’t really see they’re being much disconnect or we don’t really – whatever case John has said before we’re an underwriting company so if someone is unwilling to pay our price in our terms that coverage doesn’t get renewed it also gets renewed in someone else’s portfolio. So, we’re pretty happy with our selection of our business and looking forward it actually has a little bit of improvement year-over-year.

Terrific, thanks again for taking my questions and congratulations on a great quarter.

Thank you.

Good morning.

Good morning Ken.

I wanted to ask just a portfolio question for you. So, if you would fit in the duration of 5.3 years, can you just remind us what the liability duration is on the blended book?

The liability duration is roughly 2.7 years 2.8 years, but remember when you look at that you have to remember that we got we have close to $3 billion worth of capital we’re investing to as well as a relatively moderate tail book of business.

Yes, correct. When looking at the interest rate environment obviously the current expectation could be that a lot of you guys were preparing for interest rates to rise, that maybe it happens a little bit more aggressively than you have initially in fact if you can just talk about what your strategy is given just the current market conditions and where interest rates could be moving?

Our view of it was we haven’t viewed that interest rates going to rise dramatically. And we still think that interest rates will not rise dramatically.

We might be talking – we might be talking worst cases of 50 to 75 basis points change, but we think it’s going to be a more gradual increase in the overall interest rate structure, Tobin do you have anything to add to that.

No, I agree with that and I think we would say that kind of we are always looking at our portfolio duration and the impact of potential interest rate moves. We’re comfortable based on the combination where our duration is and our investment leverage at it is interest rate moved common.

They will come at some point than they were that we are well positioned. We also keep in mind a question we’re buying all the investors consistently.

So, that’s our general view.

Even if there were a more aggressive rise in rates very similar to 2009, do you obviously have the ability to hold on assets in the investment practice.

Absolutely.

Absolutely

Not counting dividends we can get from insurance companies. Our total mentioned what our liquidity was at this time point in time.

So, and we’re fortunate that if you had our paid losses and our paid loss ratio and our expense ratio again we’re still making cash margin and our underwriting business which a lot of our peer companies are not being able to achieve that. So, we still continue to make positive cash flow from underwriting plus reimbursement income.

I would add one other thing.

Sure.

You know we got about a 7 year weighted average life. So, our portfolio reprises assuming it’s going to amount at reprises every year.

So, I wonder if higher rates come, that portion of portfolio could be couponed at higher rates.

Great. We were in a calculation of 10-k.

If there were to be a 100 basis point movement with probably about 6% or less impact of book value per share that’s roughly in line with your calculation?

I would have to confirm that, but that’s what the line is.

Okay, very good. Last question I have was an income statement question.

Could you just talk about I know a little bit specific the other income line was $7.1 million and kind of what’s in there and some predictability standpoint.

The largest piece of that is really related to fee income from our agencies and the only thing I wound point out is its down, but sold the subsidiary last year. There is a little bit of earnings coming off that in through the second quarter of last year and that we don’t have that this year.

So, that’s a lot of the decrease you see.

You saw last year (indiscernible).

I didn’t hear the question Ken sorry.

We didn’t hear the follow-up question.

I was just trying to verify you said that, that it was in the second quarter of last year you sold the subsidiary?

I mean in the first quarter of last year and 10.

Third quarter of ‘09.

Third quarter of ‘09, actually. So, it was just income that was continuing to come down from 2009 to 2010 it was right at MacKenzie.

Okay. And then what we are seeing for this quarter, this is kind of more of a normalized run rate?

I think we would say this is pretty close to normalize run rate, but you can have different items that will come through there. We have last year you had the average transaction, which added to that line item as well.

So, there can be one off transactions on a particular quarter that would make move that and make it fluctuate (indiscernible).

Very good. Thank you for taking my questions.

Thanks Ken.

Thanks. Just one quick follow-up in the past few days we have seen some discussion regarding SEC and others looking at that these Chinese companies and there have been class action lawsuits against some of the U.S.

listed Chinese companies. I was just wondering if you had any thoughts in bad and I’m not sure if you are right in that market and if you would have any exposures to that.

If you can comment on that, that would be very helpful? Thanks.

I can tell you as of the end of the second quarter that we saw a number of reversed IPOs from China we wrote none to my knowledge. We quoted one in the first quarter and we didn’t get the order.

So, we are very aware what’s involved in the Chinese IPO business that’s been come in to the U.S. We are not a major player.

We are not even a minor player in it.

Okay. That’s actually quite helpful.

Thanks.

You are welcome.

Thanks everybody. Thanks for your attention.

We appreciate you are being on the call and we look forward to talking to you in another three months. Have a great day.