For further information on our business and strategy, please see Item 1, "Business" in this Form 10-K.
A reconciliation of shareholders' net income to adjusted income from operations follows:
•Mail order pharmacy revenues increased in both 2015 and 2014 driven by greater volume, primarily for specialty medications (injectables) due to our higher customer base and home delivery utilization.
We maintain liquidity at two levels: the subsidiary level and the parent company level.
We expect, based on the parent company's current cash position, current projections for subsidiary dividends, and the ability to refinance its commercial paper borrowing, to have sufficient liquidity to meet the obligations discussed above.
If the December 31, 2015 fair values of domestic qualified plan assets decreased by 10%, the accrued pension benefit liability would increase by approximately $395 million as of December 31, 2015 resulting in an after-tax decrease to shareholders' equity of approximately $255 million.
Medical care ratios. The Commercial medical care ratio decreased slightly in 2015 compared with 2014 primarily due to improved performance in our stop loss business. In 2014, the commercial medical care ratio decreased slightly compared with 2013 due to rate increases to cover new taxes and fees mandated by Health Care Reform and improved performance in our specialty business, partially offset by a higher medical care ratio in the U.S. Individual business and our exit from the limited benefits business.
Operating revenues were higher in both 2015 and 2014 compared with each prior year, primarily attributable to new sales, particularly in South Korea and the U.S. reflecting both customer growth and sales of higher premium products. The increase in 2015 was partially offset by the unfavorable impact of foreign currency movements.
In 2014, the increase in operating revenues compared with 2013 largely reflects the absence of $39 million in losses recorded in 2013 associated with a dynamic hedge program for the run-off reinsurance business that was discontinued with the effective exit from the GMDB and GMIB business. This impact is partially offset by a decrease in net investment income due to selling or reallocating investment assets in 2013 as a result of the reinsurance transaction with Berkshire.
Variable interest entities. As of December 31, 2015 and 2014, the Company determined it was not a primary beneficiary in any material variable interest entities.
Premiums, accounts and notes receivable and reinsurance recoverables are reported net of allowances for doubtful accounts and unrecoverable reinsurance of $78 million as of December 31, 2015 and $105 million as of December 31, 2014. The Company estimates these allowances for doubtful accounts and unrecoverable reinsurance using management's best estimates of collectability, taking into consideration the age of the outstanding amounts, historical collection patterns and other economic factors.
Goodwill is primarily reported in the Global Health Care segment ($5.7 billion) and, to a lesser extent, the Global Supplemental Benefits segment ($0.3 billion).
The Society of Actuaries mortality table and projection scale published in the fourth quarter of 2014 was adopted for the Company's defined benefit pension and other postretirement plans as of December 31, 2014. We used the updated table because the Company's mortality experience over the past several years closely matched the updated mortality table based on a study conducted in 2014. In the fourth quarter of 2015, the Society of Actuaries published an updated improvement scale based on two additional years of experience. The Company adopted the updated improvement scale as of December 31, 2015 after reviewing its experience compared with the updated improvement scale.
Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement. Unobservable inputs reflect the Company's best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date.
(1)The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company.
The following table summarizes the changes in separate account assets reported in Level 3 for the years ended December 31, 2015 and 2014.
(1)Included in this amount were gains of $95 million attributable to instruments still held at December 31, 2015 and gains of $85 million attributable to instruments still held at December 31, 2014.
• the Company's intent to sell or the likelihood of a required sale prior to recovery. The table below summarizes fixed maturities with a decline in fair value from amortized cost as of December 31, 2015 but with no indicative impairment loss based on the criteria listed above. These fixed maturities are primarily corporate securities with a decline in fair value that reflects an increase in market yields since purchase.
As of and for the years ended December 31, 2015 and 2014, the effects of these derivative instruments on the Consolidated Financial Statements were not material.
Sales information for available-for-sale fixed maturities and equity securities for the years ended December 31 were as follows:
State insurance departments and foreign jurisdictions that regulate certain of the Company's subsidiaries prescribe accounting practices (differing in some respects from GAAP) to determine statutory net income and surplus. The Company's life insurance and HMO company subsidiaries are regulated by such statutory requirements. The statutory net income of the Company's life insurance and HMO subsidiaries for the years ended, and their statutory surplus as of December 31, were as follows:
Amara cash balance pension plan litigation. In December, 2001, Janice Amara filed a class action lawsuit in the U.S. District Court for the District of Connecticut against Cigna Corporation and the Cigna Pension Plan (the "Plan") on behalf of herself and other similarly situated Plan participants affected by the 1998 conversion to a cash balance formula. The plaintiffs allege various violations of the Employee Retirement Income Security Act of 1974 ("ERISA"), including that the Plan's cash balance formula discriminates against older employees; that the conversion resulted in a wear-away period (when the pre-conversion accrued benefit exceeded the post-conversion benefit); and that the Plan communications contained inaccurate or inadequate disclosures about these conditions.
The following unaudited quarterly financial data is presented on a consolidated basis for each of the years ended December 31, 2015 and December 31, 2014. Quarterly financial results necessarily rely heavily on estimates. This and certain other factors, such as the seasonal nature of portions of the insurance business, suggest the need to exercise caution in drawing specific conclusions from quarterly consolidated results.