As of December 31, 2017, the Company had gross state income tax credit carry-forwards of approximately $20 million, which expire from 2018 through 2020.
A deferred tax asset of approximately $16 million (net of federal benefit) has been established related to these state income tax credit carry-forwards, with a valuation allowance of $7 million against such deferred tax asset as of December 31, 2017.
The Company had a gross state net operating loss carry-forward of $39 million, which expires in 2027.
A deferred tax asset of approximately $3 million (net of federal benefit) has been established for the net operating loss carry-forward, with a full valuation allowance as of December 31, 2017.
Other state and foreign net operating loss carry-forwards are separately and cumulatively immaterial to the Company’s deferred tax balances and expire between 2026 and 2036.14.
DEBT Long-term debt consisted of the following:
## Table 0 ##
Credit Facility - In November 2017, the Company terminated its Second Amended and Restated Credit Agreement and entered into a new Credit Agreement (the "Credit Facility") with third-party lenders.
The Credit Facility includes a revolving credit facility of $1,250 million, which may be drawn upon during a period of five years from November 22, 2017.
The revolving credit facility includes a letter of credit subfacility of $500 million.
The revolving credit facility has a variable interest rate on outstanding borrowings based on the London Interbank Offered Rate ("LIBOR") plus a spread based upon the Company's credit rating, which may vary between 1.125% and 1.500%.
The revolving credit facility also has a commitment fee rate on the unutilized balance based on the Company’s leverage ratio.
The commitment fee rate as of December 31, 2017 was 0.25% and may vary between 0.20% and 0.30%.
The Credit Facility contains customary affirmative and negative covenants, as well as a financial covenant based on a maximum total leverage ratio.
Each of the Company's existing and future material wholly owned domestic subsidiaries, except those that are specifically designated as unrestricted subsidiaries, are and will be guarantors under the Credit Facility.
In July 2015, the Company used cash on hand to repay all amounts outstanding under a prior credit facility, including $345 million in principal amount of outstanding term loans.
As of December 31, 2017, $15 million in letters of credit were issued but undrawn, and the remaining $1,235 million of the revolving credit facility was unutilized.
The Company had unamortized debt issuance costs associated with its credit facilities of $11 million and $8 million as of December 31, 2017 and 2016, respectively.
Senior Notes - In December 2017, the Company issued $600 million aggregate principal amount of unregistered 3.483% senior notes with registration rights due December 2027, the net proceeds of which were used to repurchase the Company's 5.000% senior notes due in 2021 in connection with the 2017 redemption described below.
In November 2015, the Company issued $600 million aggregate principal amount of unregistered 5.000% senior notes due November 2025, the net proceeds of which were used to repurchase the Company's 7.125% senior notes due in 2021 in connection with the 2015 tender offer and redemption described below.
Interest on the Company's senior notes is payable semi-annually.
The terms of the 5.000% and 3.483% senior notes limit the Company’s ability and the ability of certain of its subsidiaries to create liens, enter into sale and leaseback transactions, sell assets, and effect consolidations or mergers.
The Company had unamortized debt issuance costs associated with the senior notes of $15 million and $19 million as of December 31, 2017 and 2016, respectively.
From a risk management perspective, the Company endeavors to manage its catastrophe risk profile such that the projected economic loss from its largest 100-year event does not exceed approximately $500 million.
Economic loss is viewed as the gross PML loss reduced by estimated reinstatement premiums to renew coverage and income taxes.
The impact of income taxes on the PML depends on the distribution of the losses by corporate entity, which is also affected by inter-affiliate reinsurance.
Management also monitors its largest PMLs at multiple points along the loss distribution curve, such as loss amounts at the 20, 50, 100, 250, 500 and 1,000 year return periods.
This process enables management to identify exposure accumulations to integrate into enterprise risk, underwriting and capital management processes.
The Company’s catastrophe loss projections, segmented by risk zones, are updated quarterly and reviewed as part of a formal risk management review process.
The table below reflects the Company’s pre-tax PMLs at various return times for its top three zones/perils (as ranked by the largest 1 in 100 year events) based on loss projection data as of January 1, 2007:
## Table 1 ##
The above PML table is both gross and net of retrocessional coverage.
While the Company considers purchasing corporate level retrocessional protection by evaluating the underlying exposures in comparison to the availability of cost-effective protection, there was no retrocessional coverage in place at January 1, 2007.
The Company continues to evaluate the availability and cost of various retrocessional products and less mitigation approaches in the marketplace.
The projected economic losses for the three highest 1 in 100 PML losses in the above table are as follows: for the Southeast U. S.  wind storm, $471 million; for the European windstorm, $462 million and for California earthquake, $350 million.
The projection for the Southeast windstorm does not consider any impacts from the recently enacted Florida insurance reform that increases insurers’ access to the Florida Hurricane Catastrophe Fund, thus potentially reducing the amount of reinsurance purchased from the private reinsurance markets.
The Company is unable to predict if this will reduce future reinsurance coverage in Florida and correspondingly reduce the PML for a Southeast windstorm.
The Company believes that its methods of monitoring, analyzing and managing catastrophe exposures provide a credible risk management framework, which can be integrated with its underwriting business and capital management activities.
However, there is much uncertainty and imprecision inherent in the models, risk management framework and underlying exposures.
As a result, there can be no assurance that the Company will not experience losses from individual events that exceed the PML or other return period projections, perhaps by a material amount.
Nor can there be assurance that the Company will not experience events impacting multiple zones, or multiple severe events that could, in the aggregate, exceed the Company’s PML expectations by a significant amount.
Terrorism Risk.
The Company does not have significant exposure to losses from terrorism risk.
While the Company writes some reinsurance contracts covering terrorists’ events, the Company’s risk management philosophy is to limit the amount of coverage provided and specifically not provide terrorism coverage for properties or in areas that may be considered a target for terrorists.
Although providing terrorism coverage on reinsurance contracts is negotiable, most insurance policies mandate inclusion of terrorism coverage.
As a result, the Company is exposed to losses from terrorism on its U. S.  insurance book of business, particularly its workers’ compensation policies; however, the Company generally does not insure the large corporations or corporate locations that would result in a large concentration of risk.
As a result of its limited exposure, the Company does not believe the U. S.  Terrorism Risk Insurance Act of 2002 that was signed into law November 2002 and amended in December 2005 has had or will have a significant impact on its operations.
Retrocession Arrangements.
The Company considers retrocessional agreements to reduce its exposure on specific business written and potential accumulations of exposures across some or all of the Company’s operations.
Where reinsurance is purchased, the agreements provide for recovery of a portion of losses and loss adjustment expenses from retrocessionaires.
The level of retrocessional coverage varies over time, reflecting the underwriter’s and/or Company’s view of the changing dynamics of both the underlying exposure and the reinsurance markets.
All retrocessional purchasing decisions consider both the potential coverage and market conditions with respect to the pricing, terms, conditions and availability of such coverage, with the aim of securing cost-effective protection.
No assurance can be given that the Company will seek or be able to obtain retrocessional coverage in the future similar to that in place currently or in the past.
Prior to January 1, 2002, the compensation cost for the Company’s share-based compensation plans was determined based on APB 25.
If the fair value at the grant dates for awards granted under those plans prior to January 1, 2002 was calculated consistent with the method of FAS 123, the Company’s net loss and earnings per share for 2005 would have been impacted as indicated below.
There is no difference after 2005.
## Table 2 ##
The fair value of each option grant accounted for in accordance with APB 25 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: (i) dividend yields ranging from 0.5% to 0.9%, (ii) expected volatility ranging from 32.9% to 45.8%, (iii) risk-free interest rates ranging from 4.7% to 7.0% and (iv) expected lives of 7.3 to 7.5 years.
O.  Policyholder Dividends.
The Company issues certain insurance policies with dividend payment features.
These policyholders share in the operating results of their respective policies in the form of dividends declared.
Dividends to policyholders are accrued during the period in which the related premiums are earned and are determined based on the terms of the individual policies.
P.  Application of N ew Accounting S tandards.
In November 2005, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) FAS 115-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments” (“FAS 115-1”), which was effective for reporting periods beginning after December 15, 2005.
FAS 115-1 addresses the determination of when an investment is considered impaired, whether the impairment is other than temporary and the measurement of an impairment loss.
An other than temporary impairment loss is recorded as a net realized capital loss in the consolidated statements of operations and comprehensive income (loss) in the period in which it is impaired.
FAS 115-1 also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses not recognized as other-than-temporary impairments.
The Company adopted FAS 115-1 prospectively effective January 1, 2006.
The Company believes that all unrealized losses in its investment portfolio are temporary in nature as of December 31, 2007.
In July 2006, FASB released FASB Interpretation No.48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No.109” (“FIN 48”), which is effective for fiscal years beginning after December 15, 2006.
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No.109, “Accounting for Income Taxes” (“FAS 109”).
FIN 48 prescribes the financial statement recognition and measurement criteria for tax positions taken or expected to be taken in a tax return.
Further, FIN 48 expands the required disclosures associated with uncertain tax positions.
As a result of the implementation of FIN 48, the Company recorded no adjustment in the liability for unrecognized income tax benefits and no adjustment to beginning retained earnings.
In September 2006, the FASB issued FAS No.157 “Fair Value Measurements” (“FAS 157”).
FAS 157 defines fair value, establishes a framework for measuring fair value consistently in GAAP and expands disclosures about fair value measurements.
The Company adopted FAS 157 as of January 1, 2007.
In September 2006, the FASB issued FAS No.158 “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (“FAS 158”), which is effective for employers with publicly traded equity securities as of the end of the fiscal year ending after December 15, 2006.
FAS 158 requires an employer to (a) recognize in its financial statements an asset for a plan’s over funded status or a liability for a plan’s under funded status, (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year and (c) recognize changes in the funded status of a defined benefit post-retirement plan in the year in which the changes occur as other comprehensive income.
The Company adopted FAS 158 for the reporting period ended December 31, 2006.
International.
The following table presents the underwriting results and ratios for the International segment for the periods indicated.
## Table 3 ##
(NM, not meaningful) (Some amounts may not reconcile due to rounding. )
Premiums.
Gross written premiums increased by 10.1% to $805.9 million for 2007 from $731.7 million for 2006.
Approximately half of this increase was attributable to the impact of other currencies strengthening against the U. S.  dollar.
We wrote reinsurance contracts in multiple currencies and as these currencies strengthened and were converted to U. S.  dollars for financial reporting, they converted to higher dollar values.
Business written through the Miami and New Jersey offices increased by $35.0 million (8.0%), business written through the Asian branch increased by $22.3 million (15.6%) and business written through the Canadian branch increased by $17.9 million (11.8%).
We have experienced strong fundamental growth in geographic areas where economic growth and demand for reinsurance is strong.
Net written premiums increased by 10.3% to $806.0 million for 2007 compared to $730.7 million for 2006, principally as a result of the increase in gross written premiums.
Net premiums earned increased 11.7% to $803.8 million for 2007 compared to $719.5 million for 2006, consistent with the increase in net written premiums.
Gross written premiums increased by 3.6% to $731.7 million for 2006 from $706.6 million for 2005.  Business written through the Miami and New Jersey offices increased by $47.1 million (12.1%) and business written through the Canadian branch increased by $22.8 million (17.7%).
These increases were partially offset by a decrease of $44.1 million (23.5%) in premiums written through the Asian branch.
Net written premiums increased by 3.7% to $730.7 million for 2006 compared to $704.9 million for 2005, in line with the increase in gross written premiums.
Net premiums earned increased by 5.3% to $719.5 million for 2006 compared to $683.4 million for 2005, consistent with the increase in net written premiums.

<table><tr><td></td><td>December 31</td></tr><tr><td>($ in millions)</td><td>2017</td><td>2016</td></tr><tr><td>Senior notes due December 15, 2021, 5.000%</td><td>—</td><td>600</td></tr><tr><td>Senior notes due November 15, 2025, 5.000%</td><td>600</td><td>600</td></tr><tr><td>Senior notes due December 1, 2027, 3.483%</td><td>600</td><td>—</td></tr><tr><td>Mississippi economic development revenue bonds due May 1, 2024, 7.81%</td><td>84</td><td>84</td></tr><tr><td>Gulf opportunity zone industrial development revenue bonds due December 1, 2028, 4.55%</td><td>21</td><td>21</td></tr><tr><td>Less unamortized debt issuance costs</td><td>-26</td><td>-27</td></tr><tr><td>Total long-term debt</td><td>1,279</td><td>1,278</td></tr></table>
<table><tr><td>Return Periods (in years)</td><td>1 in 20</td><td>1 in 50</td><td>1 in 100</td><td>1 in 250</td><td>1 in 500</td><td>1 in 1,000</td></tr><tr><td>Exceeding Probability</td><td>5.0%</td><td>2.0%</td><td>1.0%</td><td>0.4%</td><td>0.2%</td><td>0.1%</td></tr><tr><td>Zone/Area, Peril</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Southeast U.S., Wind</td><td>$368</td><td>$575</td><td>$777</td><td>$1,045</td><td>$1,227</td><td>$1,296</td></tr><tr><td>Europe, Wind</td><td>288</td><td>539</td><td>702</td><td>809</td><td>915</td><td>952</td></tr><tr><td>California, Earthquake</td><td>235</td><td>410</td><td>532</td><td>686</td><td>872</td><td>1,045</td></tr></table>
<table><tr><td>(Dollars in thousands, except per share amounts)</td><td></td><td>2005</td></tr><tr><td>Net loss</td><td>As reported</td><td>$ -218,667</td></tr><tr><td></td><td>Pro forma</td><td>$ -219,052</td></tr><tr><td>Earnings per share - basic</td><td>As reported</td><td>$ -3.79</td></tr><tr><td></td><td>Pro forma</td><td>$ -3.80</td></tr><tr><td>Earnings per share - diluted</td><td>As reported</td><td>$ -3.79</td></tr><tr><td></td><td>Pro forma</td><td>$ -3.80</td></tr></table>
<table><tr><td></td><td colspan="3">Years Ended December 31,</td><td colspan="2">2007/2006</td><td colspan="2">2006/2005</td></tr><tr><td>(Dollars in millions)</td><td>2007</td><td>2006</td><td>2005</td><td>Variance</td><td>% Change</td><td>Variance</td><td>% Change</td></tr><tr><td>Gross written premiums</td><td>$ 805.9</td><td>$ 731.7</td><td>$ 706.6</td><td>$ 74.2</td><td>10.1%</td><td>$ 25.1</td><td>3.6%</td></tr><tr><td>Net written premiums</td><td>806.0</td><td>730.7</td><td>704.9</td><td>75.3</td><td>10.3%</td><td>25.8</td><td>3.7%</td></tr><tr><td>Premiums earned</td><td>$ 803.8</td><td>$ 719.5</td><td>$ 683.4</td><td>$ 84.3</td><td>11.7%</td><td>$ 36.1</td><td>5.3%</td></tr><tr><td>Incurred losses and LAE</td><td>501.9</td><td>382.8</td><td>574.7</td><td>119.1</td><td>31.1%</td><td>-191.9</td><td>-33.4%</td></tr><tr><td>Commission and brokerage</td><td>199.5</td><td>180.5</td><td>167.0</td><td>19.0</td><td>10.5%</td><td>13.5</td><td>8.1%</td></tr><tr><td>Other underwriting expenses</td><td>18.6</td><td>13.8</td><td>12.6</td><td>4.8</td><td>34.8%</td><td>1.2</td><td>9.5%</td></tr><tr><td>Underwriting gain (loss)</td><td>$ 83.8</td><td>$ 142.3</td><td>$ -70.8</td><td>$ -58.5</td><td>-41.1%</td><td>$ 213.1</td><td>NM</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td>Point Chg</td><td></td><td>Point Chg</td></tr><tr><td>Loss ratio</td><td>62.4%</td><td>53.2%</td><td>84.1%</td><td></td><td>9.2</td><td></td><td>-30.9</td></tr><tr><td>Commission and brokerage ratio</td><td>24.8%</td><td>25.1%</td><td>24.5%</td><td></td><td>-0.3</td><td></td><td>0.6</td></tr><tr><td>Other underwriting expense ratio</td><td>2.4%</td><td>1.9%</td><td>1.8%</td><td></td><td>0.5</td><td></td><td>0.1</td></tr><tr><td>Combined ratio</td><td>89.6%</td><td>80.2%</td><td>110.4%</td><td></td><td>9.4</td><td></td><td>-30.2</td></tr><tr><td>(NM, not meaningful)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="2">(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>

Question: What is the growing rate of Other underwriting expenses in the years with the least Net written premiums?