Net realized investment gains in 1996 increased to $13.0 million from $12.9 million in 1995. Net realized investment gains in 1995 increased to $12.9 million from $1.6 million in 1994. Investment gains are realized in the normal investment process in response to market opportunities. During 1996, securities were sold as funds were transferred from United Wisconsin Insurance Company (UWIC) to United Wisconsin Life Insurance Company (UWLIC) associated with the transfer of claim reserves on AMS' small group managed care business and to effect capital contributions totaling $70.0 million from the Company to UWLIC to provide UWLIC with sufficient capital to support the transfer from UWIC to UWLIC of the small group managed care business sold by AMS. The transfer
As a holding company, the Company relies on dividends from its subsidiaries to meet its cash flow needs. Dividends paid by the subsidiaries to the Company totaled $20.7 million, $81.9 million and $2.9 million in 1996, 1995 and 1994, respectively. Dividends are limited by state insurance regulations as discussed in Note 15 to Notes to Consolidated Financial Statements. Based upon the financial statements of the Company's insurance subsidiaries as of December 31, 1996, as filed with the insurance regulators, the aggregate amount available for dividends in 1997 without regulatory approval is $8.8 million.
REVENUE RECOGNITION - Premium revenues are earned on a pro-rata basis over the terms of the policies, which are generally monthly.
EARNINGS PER COMMON SHARE - Earnings per common share are computed by dividing net income by the weighted average number of common shares outstanding. Weighted average common shares outstanding were 12,892,431, 12,550,601 and 11,601,355 in 1996, 1995 and 1994, respectively.
In 1995, the Company granted an executive officer of the Company an option to purchase 7,113 shares of common stock of AMSG owned by the Company at $703 per share. In 1996, upon the merger of AMSG and the Company, these stock options were converted into options to purchase 275,833 shares of the Company's common stock at $18.13 per share. Upon conversion, the Company recorded compensation expense of $2,137,000.
Stocks: Gross realized gains $16,315 $14,934 $ 3,849 Gross realized losses (3,546) (3,634) (2,412)
Paid related to: Current year (436,494) (336,567) (224,470) Prior years (81,347) (66,744) (38,285) --------- --------- --------- Total paid (517,841) (403,311) (262,755) --------- --------- --------- Net balance at December 31 177,773 104,962 67,172 Plus: HMO benefits payable 44,276 39,087 31,503 Reinsurance recoverables 18,289 101,069 64,258 --------- --------- --------- Balance at December 31 $240,338 $245,118 $162,933 --------- --------- --------- --------- --------- ---------
Certain officers and directors of the Company are also officers and directors of BCBSUW.
Prior to July 1, 1994, the Company and participating subsidiaries received an allocation of pension credit based on their proportionate share of employee compensation. Effective July 1, 1994, the pension credit for the Company and participating subsidiaries was calculated based upon its segregated assets and liabilities.
The components of the pension credit, which is included in administrative expenses, are as follows:
The weighted average discount rate used in determining the accumulated post- retirement benefit obligation was 8% in 1996 and 1995. In 1994, the health care cost trend rate assumed was 10.8% graded down to 6% in 1998 for medical benefits and 6% for all years for dental benefits. In 1995 and 1996, the health care cost trend rate assumed was 9.2% for 1995 and 7.8% for 1996 graded down to 5% in 1998 and subsequent years for medical benefits and 5% for all years for dental benefits. A one percentage point increase in the assumed health care cost trend rate would have increased the accumulated benefit obligation by $125,000 at December 31, 1996 and the aggregate service and interest cost components of net periodic post-retirement benefit cost for 1996 by $15,000.
Certain subsidiaries sponsor other defined contribution or 401(k) plans. Expenses related to all of these plans, after giving effect to all administrative expense allocations between the Company and BCBSUW, totaled $505,000, $545,000 and $361,000 in 1996, 1995 and 1994, respectively.
1995: ----- Total revenues $243,094 $253,195 $267,921 $274,107 $1,038,317 Income (loss) before income tax expense 6,557 (8,645) 9,790 1,652 9,354 Net income (loss) 4,165 (5,678) 6,296 1,590 6,373 Earnings (loss) per common share (1) 0.33 (0.45) 0.50 0.13 0.50