SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------- FORM 11-K ------------- [X] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 2005 or [ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________ to ______________ Commission File Number: 001-10607 --------- ------------- THE REPUBLIC MORTGAGE INSURANCE COMPANY AND AFFILIATED COMPANIES PROFIT SHARING PLAN ------------- OLD REPUBLIC INTERNATIONAL CORPORATION 307 NORTH MICHIGAN AVENUE CHICAGO, ILLINOIS 60601 Total Pages: 13 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Administration Committee has duly caused this Annual Report to be signed on behalf of the undersigned, thereunto duly authorized. THE REPUBLIC MORTGAGE INSURANCE COMPANY AND AFFILIATED COMPANIES PROFIT SHARING PLAN (Registrant) By: /s/ John E. Gerke ----------------------------------------------------- John E. Gerke, Member of the Administration Committee By: /s/ Donna W. Ball ----------------------------------------------------- Donna W. Ball, Member of the Administration Committee Date: June 12, 2006 The Republic Mortgage Insurance Company and Affiliated Companies Profit Sharing Plan Financial Statements and Supplemental Schedule December 31, 2005 and 2004 Tax Identification Number: 56-1031043 The Republic Mortgage Insurance Company and Affiliated Companies Profit Sharing Plan Index December 31, 2005 and 2004 -------------------------------------------------------------------------------- Page(s) Report of Independent Registered Public Accounting Firm.....................1 Financial Statements Statements of Net Assets Available for Benefits December 31, 2005 and 2004..................................................2 Statement of Changes in Net Assets Available for Benefits Year Ended December 31, 2005................................................3 Notes to Financial Statements..............................................4-7 Supplemental Schedule Schedule H, line 4i - Schedule of Assets (Held at End of Year) December 31, 2005...........................................................8 Report of Independent Registered Public Accounting Firm To the Participants and Administrator of The Republic Mortgage Insurance Company and Affiliated Companies Profit Sharing Plan In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Republic Mortgage Insurance Company and Affiliated Companies Profit Sharing Plan (the "Plan") at December 31, 2005 and 2004, and the changes in net assets available for benefits for the year ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of Schedule H, Line 4i - Schedule of Assets (Held at End of Year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ PricewaterhouseCoopers, LLP Charlotte, NC June 12, 2006 The Republic Mortgage Insurance Company and Affiliated Companies Profit Sharing Plan Statements of Net Assets Available for Benefits December 31, 2005 and 2004 -------------------------------------------------------------------------------- 2005 2004 Assets Investments, at fair value Insurance company pooled separate accounts Domestic equity $ 12,683,291 $ 11,425,741 Asset allocation 2,854,256 2,837,425 Fixed income 1,496,435 1,339,471 International equity 2,009,226 1,159,433 Flexible equity 1,608,814 1,533,871 ------------- ------------- 20,652,022 18,295,941 Parent company common stock pooled account 7,880,866 6,487,026 Participant loans 971,124 1,097,476 Insurance company guaranteed interest fund, at contract value 20,021,266 22,612,408 ------------- ------------- Total investments 49,525,278 48,492,851 Employer contributions receivable 3,421,417 3,563,142 ------------- ------------- Total assets 52,946,695 52,055,993 Liabilities Refund of excess participant contributions 52,437 100,669 ------------- ------------- Net assets available for benefits $ 52,894,258 $ 51,955,324 ============= ============= The accompanying notes are an integral part of these financial statements. 2 The Republic Mortgage Insurance Company and Affiliated Companies Profit Sharing Plan Statement of Changes in Net Assets Available for Benefits Year Ended December 31, 2005 -------------------------------------------------------------------------------- Additions to net assets attributed to Investment income Net appreciation in fair value of investments $ 1,216,379 Interest, guaranteed interest fund 913,800 Dividends and net appreciation, common stock pooled account 752,442 Interest, participant loans 46,270 ------------- Investment income 2,928,891 ------------- Contributions Employer 3,421,417 Participants 968,735 ------------- 4,390,152 ------------- Total additions 7,319,043 ------------- Deductions from net assets attributed to Benefits and withdrawals 6,375,949 Administrative expenses 4,159 ------------- Total deductions 6,380,108 ------------- Net increase 938,935 Net assets available for benefits Beginning of year 51,955,324 ------------- End of year $ 52,894,258 ============= The accompanying notes are an integral part of these financial statements. 3 The Republic Mortgage Insurance Company and Affiliated Companies Profit Sharing Plan Notes to Financial Statements December 31, 2005 and 2004 -------------------------------------------------------------------------------- 1. Description of Plan The following description of The Republic Mortgage Insurance Company and Affiliated Companies Profit Sharing Plan (the "Plan") is provided for general information purposes only. Participants should refer to the Summary Plan Description or the Plan document for more complete information. The Plan is a qualified defined contribution plan covering all employees of Republic Mortgage Insurance Company, RMIC Corporation, and Republic Mortgage Insurance Company of North Carolina (the "Sponsor"). Employees are eligible for coverage at the start of their employment and must elect to enroll in the plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Contributions The Sponsor makes contributions to the Plan at the discretion of the Sponsor's Board of Directors at a sum determined by the Board without regard to current and accumulated profits for the taxable year, for years ending with or within such Plan year. Participants may contribute up to 25% of their compensation pre-tax and 25% after-tax for a combined maximum of 50% of compensation any Plan year. Contributions are subject to certain limitations as prescribed by the Internal Revenue Service. Excess contributions to be returned to participants based on qualification testing totaled $52,437 and $100,669 for the years ended December 31, 2005 and 2004, respectively. Vesting Participant account balances provided by Sponsor contributions and related allocated earnings become 40% vested after one year of service. Vesting percentages increase by 10% for each additional year, with full vesting after seven years of service. Account balances provided by participant contributions and allocated Plan earnings are always fully vested. Participant Accounts A separate account balance is maintained for each participant and is credited with participant contributions and allocations of Sponsor contributions, Plan earnings, and forfeitures of terminated participants' nonvested accounts. Allocations of Plan earnings are based on participants' daily account balances. Sponsor contributions and forfeitures of nonvested accounts are allocated based on annual compensation of participants. Unallocated forfeitures totaled $607,445 at December 31, 2005, and of the total, $253,679 will be allocated in 2006. Payment of Benefits In the event of retirement, disability, or death, accumulated benefits become vested and are distributed to participants or designated beneficiaries by lump-sum payment or through various annuity options. In the event of termination of employment, participants have the option of receiving vested accumulated benefits through lump-sum distributions, leaving the vested value of their accounts in the Plan until retirement, or transferring amounts into an individual retirement account. Participants may withdraw their voluntary contributions at any time. 4 The Republic Mortgage Insurance Company and Affiliated Companies Profit Sharing Plan Notes to Financial Statements December 31, 2005 and 2004 -------------------------------------------------------------------------------- Participants may elect to take early withdrawals of employer contributions if they have participated in the Plan for at least five years. Such early withdrawals will not result in suspension of allocations of Sponsor contributions. Participant Loans Participants may borrow a minimum of $1,000 from their accounts up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Participants may have no more than two loans outstanding at one time. Loans plus interest must be repaid within five years through payroll deductions. These loans bear interest at the prevailing prime rate at the loan inception date. The loans are collateralized by the vested balance in the participant's account. 2. Summary of Significant Accounting Policies General The Plan prepares its financial statements under accounting principles generally accepted in the United States of America. Investment Valuation and Income Recognition The Plan's guaranteed interest account is valued at contract value. Insurance company pooled separate accounts are reported by Massachusetts Mutual Life Insurance Company (the "Trustee") at the fair value of the underlying investments. The parent company common stock pooled account invests solely in the common stock of Old Republic International ("ORI"), the ultimate parent of the Sponsor. The value of the pooled ORI common stock account is based on the underlying quoted market value of the ORI common stock. Participant loans are valued at unpaid principal balance, which approximates fair value. Net appreciation (depreciation) in fair value of investments includes unrealized and realized gains and losses. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Benefits and Withdrawals Benefits and withdrawals are recorded when paid. At December 31, 2005 and 2004, there were no significant amounts due but unpaid to participants. Income Tax Status The Plan obtained its latest determination letter on April 3, 1995, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Use of Estimates The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. 5 The Republic Mortgage Insurance Company and Affiliated Companies Profit Sharing Plan Notes to Financial Statements December 31, 2005 and 2004 -------------------------------------------------------------------------------- 3. Investments The Plan is invested in a group annuity contract with the Trustee. The contract allows for a participant-directed investment program in commingled subaccounts sponsored by the Trustee. Investment options include fixed income, asset allocation, domestic equity, flexible equity, and international equity subaccount options and a guaranteed interest fund. In addition to the investment options offered through the Trustee, participants may also invest in a pooled account that invests solely in common stock of the Sponsor's parent, ORI. 2005 2004 Investments at fair value Insurance company separate accounts Domestic equity subaccounts Large Cap Value $ 3,904,534 * $ 3,330,726 * Small Cap Equity 2,518,187 * 2,657,733 * Indexed Equity 2,672,805 * 2,477,347 * Small Cap Growth 1,244,282 1,006,588 Mid Cap Value 1,800,409 1,579,096 Mid Cap Growth 103,693 - Large Cap Growth 439,381 404,251 ------------- ------------- 12,683,291 11,425,741 ------------- ------------- Asset allocation subaccounts Balanced 2,854,256 * 2,837,425 * Fixed income subaccount Bond 1,496,435 1,339,471 Flexible equity subaccount Growth and Income 1,608,814 1,533,871 International equity subaccount 2,009,226 1,159,433 ORI common stock pooled account 7,880,866 * 6,487,026 * ------------- ------------- $ 28,532,888 $ 24,782,967 ============= ============= Investment at contract value Guaranteed Interest Fund $ 20,021,266 * $ 22,612,408 * *Exceeds 5% of net Plan assets at December 31, 2005 and 2004. The net appreciation in fair value of the Plan's insurance company pooled separate accounts for the year ended December 31, 2005, was $1,216,379. 6 The Republic Mortgage Insurance Company and Affiliated Companies Profit Sharing Plan Notes to Financial Statements December 31, 2005 and 2004 -------------------------------------------------------------------------------- 4. Guaranteed Interest Fund The Plan holds an investment contract with Massachusetts Mutual Life Insurance Company. Massachusetts Mutual Life Insurance Company maintains the contributions in a pooled account. The account is credited with earnings on the underlying investments, charges for Plan withdrawals, and a proportionate share of administrative expense charges by Massachusetts Mutual Life Insurance Company. The contract is included in the financial statements at contract value, which represents contributions made under the contract, plus earnings, less withdrawals and administrative expenses, because it is considered fully benefit-responsive. For example, participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. There are no reserves against contract value for credit risk of the contract issuer or otherwise. The contract value of the investment contract at December 31, 2005 and 2004 was $20,021,266 and $22,612,408, respectively. The average yield and crediting rates ranged from 4.0% to 4.7% for 2005 and 2004. The crediting rate is adjusted every six months with the issuer, but cannot be less than 3%. 5. Related Party Transactions Certain Plan investments are insurance separate accounts sponsored by Massachusetts Mutual Life Insurance Company. Massachusetts Mutual Life Insurance Company is the Trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. Fees paid by the Sponsor on behalf of the Plan for the investment management services amounted to $77,693 for the year ended December 31, 2005. 6. Plan Termination Although it has not expressed any intent to do so, the Sponsor has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants would become 100% vested in their employer contributions. 7. Reconciliation to Form 5500 There are no reconciling items from these financial statements to the Plan's Form 5500 for the year ended December 31, 2005. 7 Supplemental Schedule Republic Mortgage Insurance Company and Affiliated Companies Profit Sharing Plan Schedule H, line 4i - Schedule of Assets (Held at End of Year) December 31, 2005 Schedule I -------------------------------------------------------------------------------- (a) (b) (c) (d) (e) Description of Investment Including Identity of Issue, Borrower, Number of Units Current Lessor, or Similar Party and Rate of Interest Cost Value Insurance separate accounts * Domestic equity subaccount Large Cap Value 22,577 $ 3,904,534 Small Cap Equity 2,562 2,518,187 Indexed Equity 8,142 2,672,805 Small Cap Growth 7,384 1,244,282 Mid Cap Value 8,476 1,800,409 Mid Cap Growth 492 103,693 Large Cap Growth 2,860 439,381 ------------- 12,683,291 * Asset allocation subaccount Balanced 22,133 2,854,256 * Fixed income subaccount Bond 1,289 1,496,435 * Flexible equity subaccount Growth and Income 22,795 1,608,814 * International Equity Subaccount 7,658 2,009,226 * ORI Common Stock Pooled Account 251,005 7,880,866 * Guaranteed Interest Fund 188,209 20,021,266 Participants loans 4.0% to 7.25% 971,124 ------------- $ 49,525,278 ============= Note: Historical cost not provided by the recordkeeper. * Indicates an assets which is a party-in-interest to the Plan. 8