felanders/preprocessed huggingface dataset:
* Customer response to new products, distribution channels and marketing initiatives.
Policyholders sometimes do not pay premiums, thus causing their policies to lapse. For the years 2001, 2000 and 1999 Standard Life experienced total policy lapses, excluding surrenders, of 3.7%, 5.7% and 3.6% of total policies in force at December 31 of each year, respectively.
Amortization includes 1) amortization related to the present value of polices purchased from acquired insurance business, 2) amortization of deferred acquisition costs related to capitalized costs of insurance business sold and 3) amortization of goodwill and organizational costs and 4) the impact of adopting SFAS No. 133.
Benefits and claims	 (254) 35 (140) Amortization 4,158 2,061 1,158 Commission expenses	 184 12 10 Other operating expenses 3,117 3,031 2,192
Net investment income represents income earned on our corporate assets such as cash, short-term investments and fixed securities. Standard Management International is required to hold a certain level of cash and short-term investments in order to comply with local insurance laws.
Our operating results are affected by many factors, including, competition, lapse rates, interest rates, maintenance of insurance ratings, governmental regulation and general business conditions, many of which are outside its control.
Our invested assets, approximately $966 million, represented approximately 60% of our total assets at December 31, 2001. These investments are subject to customary risks of credit defaults and changes in market values. In addition, the value of our investment portfolio depends in part on the financial condition of the companies in which we have made investments. Factors beyond our control, including interest rate levels, financial market performance, and general economic conditions may have a significant negative impact on our investment income and the value of our investment assets, which would have a material adverse affect on our financial condition.
Membership in our Medicare supplement products has decreased in part due to subscribers opting for competitors' Medicare-risk HMO programs in which medical benefits are at least as comprehensive as benefits for persons eligible to receive benefits under a Medicare supplement program. These Medicare-risk HMO programs have historically been offered at no additional cost to the member. In addition, our new Medicare supplement sales decreased in 2000 as compared to 1999 due to mandated changes by the state of Missouri in the pricing methodologies for these products.
Operating income increased $25.5 million, or 91.1%, to $53.6 million in 2000 from $28.1 million in 1999.
Our effective income tax provision rate was 39.9% and 33.6% for 1999 and 1998, respectively. Our effective tax provision rates for 1999 and 1998 were affected by non-deductible goodwill amortization, among other things. Due to a change in the filing status for the state of Missouri during 1998, our 1999 and 1998 state income tax provisions were favorably impacted.
We lease twenty-three facilities throughout the United States and Puerto Rico. Our corporate headquarters office, containing approximately 75,000 square feet, is located in Rockville, Maryland and accommodates our executive and corporate functions. We also have satellite offices in Alabama, Colorado, Florida, Georgia, Hawaii, Iowa, Michigan, Minnesota, Mississippi, Missouri, Nevada, North Carolina, Ohio, Pennsylvania, Puerto Rico and Texas. We believe all of our facilities are well-maintained and in good operating condition and have adequate capacity to meet our current business needs.
Pharmacy benefit claims payments from our clients are recorded as revenue, and prescription costs to be paid to pharmacies are recorded as direct expenses. Under our network contracts, we generally have an independent obligation to pay pharmacies for the drugs dispensed and, accordingly, have assumed that risk independent of our clients. When we administer pharmacy reimbursement contracts and do not assume a credit risk, we record only our administrative or processing fees as revenue. Rebates earned under arrangements with manufacturers or third party intermediaries are predominately recorded as a reduction of direct expenses. The portion of manufacturer or third party intermediary rebates due to clients is recorded as a reduction of revenue. We refine our rebate estimates each period based on actual collection and payment experiences.
Member co-payments to pharmacies are not recorded as revenue or direct expenses. We incur no obligations for co-payments to pharmacies and have never made such payments. Under our pharmacy agreements, the pharmacy is solely obligated to collect the co-payments from the members. If we had included co-payments in our reported revenue and direct expenses, it would have resulted in an increase in our reported revenue and direct expenses of approximately $1.0 billion, $0.8 billion and $0.8 billion for the years ended December 31, 2010, 2009 and 2008, respectively. Our operating and net income, consolidated balance sheets and statements of cash flows would not have been affected.
The purchase price of inPharmative was largely determined on the basis of management’s expectations of future earnings and cash flows, resulting in the recognition of goodwill. Management’s final allocation of the
Direct Expenses. Direct expenses for the years ended December 31, 2010 and 2009 were approximately $3.5 billion and $2.7 billion, respectively. Direct expenses increased by $0.8 billion over the comparable period in 2009 primarily related to the $0.9 billion increase in revenue. Direct expenses for 2010 and 2009 represented 97.2% and 97.1% of total operating expenses for the respective periods. Rebates earned under arrangements with manufacturers or third party intermediaries are recorded as a reduction of direct expenses. For the year ended December 31, 2010, adjustments made to these rebate receivable estimates from prior periods reduced direct expenses by $4.8 million, or approximately 0.1%.
dividends, capital expenditures and repayment of borrowings under its loan agreements if the Company so determines.
Other long-term investments also include an operating line of credit agreement in the amount of $200,000. On October 15, 2003 BNLAC and EPSI entered into a loan agreement whereby BNLAC will provide EPSI with a $200,000 line of credit maturing October 15, 2004. The line of credit was renewed and extended with interest only payments to August 1, 2005, thereafter EPSI will pay principal and interest over 60 equal monthly installments until paid in full. The line of credit is at prime, 5.25%, with interest payable monthly to BNLAC.
Net investment income was $975,485 in 2004, $970,382 in 2003, and $1,148,225 in 2002, an increase of 1% in 2004, and a decrease of 12% in 2003. The slight increase in 2004 was due to an increase in investment in fixed maturities and an increase in interest rates. The decrease in 2003 was primarily due to the general decline in interest rates.
Amortization of deferred policy acquisition costs was $29,973 in 2004, $30,403 in 2003 and $26,918 in 2002. Amortizaton of deferred policy acquisition costs varies in relation to lapses or surrenders of existing policies.
Equity Security Price Risk - Fair value of equity securities at December 31, 2004 totaled $628,821, or only 2.8% of total investments and cash on a consolidated basis. We do not hedge our equity price risk. As of December 31, 2004, a 20% adverse change in equity prices would result in an approximate $100,000 decrease in the fair value of our equity securities.
The Company’s operational focus since going into runoff has been to: (i) preserve its capital base through various risk management initiatives; (ii) actively manage and negotiate early settlement of its reinsurance liabilities and real estate debt; (iii) seek opportunistic sales of its real estate assets and reinsurance subsidiaries; (iv) prudently return capital to its shareowners over time; and (v) position OPL for liquidation.
Released additional capital for distribution to shareowners which, as noted above, was paid on January 4, 2006; and
The investment portfolio generated income of $2.8 million for the year ended December 31, 2005 compared to income of $2.0 million for the year ended December 31, 2004. The investment income for the year ended December 31, 2005 was affected by the following items:
For the year ended December 31, 2005 the Company incurred a net loss of $49.0 million from discontinued operations pertaining to OPRe, including an operating loss of $22.1 million and the loss on sale of $26.9 million. The operating loss was primarily due to $15 million of reserve strengthening on OPRe’s residual value reinsurance program and a discount of $6.8 million provided to reinsurers for the commutation and settlement of a portion of OPRe’s aviation excess of loss protection.
* Note : All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
Under current Internal Revenue Code provisions, the life insurance subsidiaries are taxed under a single-phase structure incorporating tax rules comparable to other corporate taxpayers. The life insurance subsidiaries are included in the Company's consolidated tax return.
A summary of the status and activity for options and shares granted and exercised under the Plans at December 31, 1995, is as follows:
The Board of Directors previously approved a non-qualified supplemental benefit plan. This unfunded deferred compensation plan is intended to provide pension benefits which would otherwise be provided under the benefit accrual formula applicable to all employees in the Company's qualified Plan, but which are in excess of an annual amount permitted under current tax regulations. Expense ($.1 million in 1995, $.3 million in 1994 and $.9 million in 1993) is being recognized over the remaining service period for the officers presently covered.
We recorded loss and loss adjustment expenses of $26,869 for the year ended December 31, 2010, compared to loss and loss adjustment recoveries of $2,924,184 in 2009. The 2010 recorded expenses resulted from reserves of $32,000 established pursuant to the Reinsurance Agreement offset by favorable development on CAMICO and PDIC. The 2009 recorded recoveries resulted from (1) the reduction in loss reserves related to the CNA treaty following the determination of the ultimate settlement amount after the finalization of the Commutation Agreement, and (2) the recognition of the payment of $500,891 received from VSC in satisfaction of certain recoveries not previously remitted by VSC under retrocession contracts between AMIC Ltd. and VSC for the years 1989-1993. Our loss ratio, calculated as the ratio of losses and loss adjustment expenses to net premium earned was 17.1% in 2010 and (90.4%) in 2009.
AmerInst Insurance Group, Ltd., (“AmerInst” or the “Company”) was formed under the laws of Bermuda in 1998. The Company, through its wholly-owned subsidiary AmerInst Insurance Company, Ltd. (“AMIC Ltd.”) and its predecessor AmerInst Insurance Company, Inc. (“AIIC Inc.”), were engaged in the reinsurance of claims-made insurance policies of participants in an American Institute of Certified Public Accountants (“AICPA”) sponsored insurance program that provides accountants’ professional liability insurance coverage (“AICPA Plan”) through December 31, 2008.
In addition to the patent application, AmerInst has obtained a trademark under which the concept will be marketed.
Corporate debt securities: Comprised of bonds issued by corporations. The fair values of these securities are based on quotes and current market spread relationships, and are included in the Level 2 fair value hierarchy. AmerInst considers that there is a liquid market for the types of securities held. Broker quotes are not used for fair value pricing.
Our ability to price our products at a level that enables us to earn a margin over the cost of providing benefits and the expense of acquiring customers and administering those products;
Partially offsetting the favorable variances in net income was a charge of $108.1 million for the quarterly adjustment for current period experience. The quarterly adjustments for current period experience referred to above reflect the cumulative impact of differences between actual gross profits for the period and the previously estimated expected gross profits for the period, as well as an update for current and future expected claims costs associated with the guaranteed minimum death and income benefit features of our variable annuity products. Net income for 2008 includes charges of $105.5 million relating to these quarterly adjustments, due to less favorable than expected experience, while 2007 includes benefits of $2.6 million due to better than expected experience. Total estimated gross profits, including actual experience and estimates for future periods, are used as the basis for amortizing deferred policy acquisition and other costs. In addition, total estimated revenues and guaranteed benefit claims, which are components of total gross profits, are used for establishing the reserves for the guaranteed minimum death and income benefit features of our variable annuity products. To the extent each period’s actual experience differs from the previous estimate for that period, the assumed level of total gross profits may change, and a cumulative adjustment to previous periods’ costs, referred to as an adjustment for current period experience, may be required. The adjustment for deferred policy acquisition and other costs in 2008 resulted from less favorable than expected gross profits, due primarily to lower than expected fee income. In addition to these drivers, the adjustment for the reserves for the guaranteed minimum death and income benefit features of our variable annuity products in 2008 also reflected higher actual contract guarantee claims costs in 2008, primarily driven by financial market conditions.
The Rights initially attached to our Common Stock and will not be exercisable until a shareholder, or group of shareholders acting together, without the approval of the Board, announce their intent to become a 15% or more owner in our Common Stock. At that time, certificates evidencing the Rights shall be distributed to shareholders (the “Distribution Date”) and the Rights shall detach from the Common Stock and shall become exercisable. When such buyer acquires 15% or more of our Common Stock, all Rights holders, except the non-approved buyer, will be entitled to acquire an amount of the Preferred Fraction at a rate equal to twice the Exercise Price divided by the then market price of the Common Stock. In addition, if we are acquired in a non-approved merger, after such an acquisition, all Rights holders, except the aforementioned 15% or more buyer, will be entitled to acquire stock in the surviving
(D) PREMIUM REVENUES Premiums are recognized as earned using the monthly pro rata method over the contract period.
Fixed maturities with carrying values of approximately $3,890,000 and $5,454,000 were on deposit as required by law or specific escrow agreement at December 31, 1996 and 1995, respectively.
monitor the non-medical counseling program for military service members known as Military Family and Life Consultant Program (MFLC). The total contract is valued at approximately $250 million.
Government contracts revenues increased by $125.7 million, or 5%, for the year ended December 31, 2007 as compared to the same period in 2006. Government contracts costs increased by $73.1 million or 3% for the year ended December 31, 2007 as compared to the same period in 2006. The increase was primarily due to an
Our cash flow from operating activities is impacted by, among other things, the timing of collections on our amounts receivable from our TRICARE contract for the North Region. Health care receivables related to TRICARE are best estimates of payments that are ultimately collectible or payable. The timing of collection of such receivables is impacted by government audit and negotiation and can extend for periods beyond a year. Amounts receivable under government contracts were $190.0 million and $199.6 million as of December 31, 2007 and 2006, respectively. Our cash flow from operating activities is also impacted by the timing of collections on our amounts receivable from CMS. Our receivable from CMS decreased by $64 million from 2006 to 2007, including $121 million decrease related to Medicare Part D. Our payable related to Medicare Part D was approximately $57 million as of December 31, 2007.
Net cash used in financing activities increased by $203.7 million primarily due to $254 million used to repurchase our common stock as discussed in the “-Capital Structure” below.
nonpayment of certain amounts due by us or certain of our subsidiaries under the financing facility documentation (if not cured within the related time period set forth therein);
Reserves for claims and other settlements include reserves for claims (incurred but not reported claims (IBNR) and received but unprocessed claims), and other liabilities including capitation payable, shared risk settlements, provider disputes, provider incentives and other reserves. As of December 31, 2007, 65% of reserves for claims and other settlements were attributed to claims reserves. See Note 16 to our consolidated financial statements for a reconciliation of changes in the reserve for claims.
We perform our annual impairment test on our recorded goodwill and intangible assets not subject to amortization as of June 30 or more frequently if events or changes in circumstances indicate that we might not recover the carrying value of these assets for each of our reporting units. Health Plans Services is our only
The following discussion and analysis contains forward-looking statements and involves numerous risks and uncertainties, including those described under the heading “Risk Factors.” Actual results may differ materially from those contained in any forward-looking statements. You should read this discussion and analysis together with our audited consolidated financial statements and related notes included elsewhere in this Form 10-K.
The ratio of net written premiums to gross written premiums is referred to as our net premium retention. Our net premium retention by segment is as follows:
In connection with the adoption of ASU 2016-13 on January 1, 2020, the Company elected the fair value option in accounting for its portfolio of bank loan participations. Under the fair value option, bank loan participations are measured at fair value, and changes in unrealized gains and losses in bank loan participations are reported in our income statement as net realized and unrealized gains (losses) on investments. Investment income on bank loan participations included in net investment income was $12.2 million during the year ended December 31, 2020. Net realized and unrealized gains (losses) on investments includes gains of $1.3 million related to changes in unrealized gains and losses on bank loans participations for the year ended December 31, 2020.
We use catastrophe modeling software to analyze the risk of severe losses from hurricanes and earthquakes on our exposure. We utilize the model in our risk selection, pricing, and to manage our overall portfolio probable maximum loss (“PML”) accumulations. A PML is an estimate of the amount we would expect to pay in any one catastrophe event within a given annual probability of occurrence (i.e. a return period or loss exceedance probability).
Effective January 1, 2020, we purchased an additional $10.0 million in claims made coverage for excess policy limits and extra contractual obligations exposures above the clash and contingency treaty for the period 2014 to present. This treaty has one reinstatement.
The Company has ongoing exposure to estimated losses and expenses on these contracts growing at a faster pace than growth in our collateral balances. In addition, we have credit exposure if our estimates of future losses and loss adjustment expenses and other amounts recoverable, which are the basis for establishing collateral balances, are lower than actual amounts paid or payable. The amount of our credit exposure in any of these instances could be material. To mitigate these risks, we closely and frequently monitor our exposure compared to our collateral held, and we request additional collateral when our analysis indicates that we have uncollateralized exposure.
TRH's fixed maturity investments, approximately 80.4% of total investments as of December 31, 2000, are predominantly investment grade, liquid securities, approximately 50% of which will mature in less than 10 years. Also as of that date, approximately 13.4% of total investments were in common and nonredeemable preferred stocks, approximately 5.5% of total investments were in other invested assets, including investments in partnerships, and the remaining 0.7% consisted of short-term investments. Based on the foregoing, TRH considers its liquidity to be adequate through the end of 2001 and thereafter for a period the length of which is difficult to predict, but which TRH believes will be at least one year.
Also in June 1997, the FASB adopted SFAS No. 131, 'Disclosure about Segments of an Enterprise and Related Information.' This statement established standards for the way that public business enterprises report information about operating segments in annual and interim financial statements and required presentation of a measure of profit or loss, certain specific revenue and expense items and segment assets. Generally, financial information is required to be reported on the basis that is used internally for evaluating segment performance and deciding how to allocate resources to segments. The standard also establishes guidance for related disclosures about products and services, geographic areas and major customers, superseding most of SFAS No. 14, 'Financial Reporting for Segments of a Business Enterprise.' In accordance with SFAS No. 131, TRH implemented the standard for the 1998 annual financial statements.
SFAS No. 133, 'Accounting for Derivative Instruments and Hedging Activities,' issued by the FASB in June 1998, as amended by SFAS No. 137 and SFAS No. 138 in June 1999 and June 2000, respectively, established accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. All derivatives must be recognized as either assets or liabilities in the balance sheet and measured at fair value. The accounting recognition for the change in the fair value of a derivative depends on a number of factors, including the intended use of the derivative. These standards are effective for TRH on January 1, 2001 and may not be applied retroactively. As of December 31, 2000, TRH had no derivative instruments.
TRANSATLANTIC HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2000 AND 1999
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) certain exceptions. Adoption of the new requirements on their effective dates has not had and is not expected to have a material impact on TRH's results of operations, financial position or cash flows.
The most significant assumptions involved in the estimation of future gross profits are future net separate accounts performance, surrender rates, and mortality rates. For variable annuities, Merrill Lynch Life generally establishes a long-term rate of net separate accounts growth. The long-term rate may be adjusted if Merrill Lynch Life’s long-term expectations change. Using the mean reversion technique, Merrill Lynch Life modifies the rate of net variable annuity separate accounts growth over the near term, based on recent historical returns. The result is that the long-term rate is assumed to be realized over a period of approximately ten years. For variable life, Merrill Lynch Life generally assumes a level long-term rate of net variable life separate accounts growth for all future years. The long-term rate may be adjusted if Merrill Lynch Life’s long-term expectations change. Additionally, Merrill Lynch Life may modify the rate of net separate accounts growth over the short
Merrill Lynch Life uses the asset and liability method in providing income taxes on all transactions that have been recognized in the financial statements. The asset and liability method requires that deferred taxes be adjusted to reflect the tax rates at which future taxable amounts will be settled or realized. Merrill Lynch Life provides for federal income taxes based on amounts Merrill Lynch Life believes it will ultimately owe. Inherent in the provision for federal income taxes are estimates regarding the realization of certain tax deductions and credits.
Merrill Lynch Life recorded earnings before change in accounting principle of $92.7 million and $41.4 million for 2004 and 2003, respectively.
Loss ratio. The loss ratio is defined as benefits, claims and settlement expenses as a percentage of earned premiums (excludes former Life Insurance Division).
Realized gains, net increased by $3.4 million over prior year. During 2010 unrealized gains related to our portfolio increased and the Company sold a substantial portion of its municipal investments to reduce its exposure, which generated realized gains.
Insphere and its agents distribute insurance products underwritten by the Company’s insurance subsidiaries, as well as third-party insurance products underwritten by non-affiliated insurance companies. The Company earns commissions for third-party insurance products sold by Insphere agents. The majority of our commission revenue is derived from insurance policies and association memberships that are billed monthly. The Company also receives a small percentage of commission revenue based on quarterly, semi-annual, and annual billing modes. For all billing modes, the commission revenue is recognized as earned on a monthly basis beginning with the effective date of the insurance policy and continues as long as the policy continues to pay premium. For single premium annuity commission revenue, and other commissions that are received on a one-time basis, commission revenues are recognized as of the effective date of the insurance policy or the date on which the policy premium is billed to the customer, whichever is later. Subsequent commission adjustments are recognized upon our receipt of notification concerning matters necessitating such adjustments from the insurance companies. Production bonuses, volume overrides and contingent commissions are recognized when determinable, either (i) when such commissions are received from insurance companies, (ii) when we receive formal notification of the amount of such payments or (iii) when the amounts of such payments can be reasonably estimated.
Even if a derivative qualifies for hedge accounting treatment, there may be an element of ineffectiveness of the hedge. The ineffective portion of a hedging relationship subject to hedge accounting is recognized in Net realized capital gains (losses) in the Consolidated Statements of Operations.
The Company engages in securities lending whereby the initial collateral is required at a rate of 102% of the market value of the loaned securities. The lending agent retains the collateral and invests it in high quality liquid assets on behalf of the Company. The market value of the loaned securities is monitored on a daily basis with additional collateral obtained or refunded as the market value of the loaned securities fluctuates. The lending agent indemnifies the Company against losses resulting from the failure of a counterparty to return securities pledged where collateral is insufficient to cover the loss. As of December 31, 2020 and 2019, the fair value of loaned securities was $143 and $715, respectively, and is included in Securities pledged on the Consolidated Balance Sheets.
The following table presents a rollforward of the allowance for credit losses on available-for-sale fixed maturity securities for the period presented:
•The Producers' Deferred Compensation Plan, which allows participants to defer up to a specified portion of their eligible compensation on a pre-tax basis.
VFP acts as a distributor of insurance products issued by its affiliates, which may in turn invest in mutual funds products issued by certain of its affiliates. For each of the years ended December 31, 2020, 2019 and 2018, distribution revenues received by VFP related to affiliated mutual fund products were $26, $27, and $27.
On December 29, 2004, VIAC issued a surplus note in the principal amount of $175 (the "Note") scheduled to mature on December 29, 2034, to VRIAC. The Note bears interest at a rate of 6.26% per year. Interest is scheduled to be paid semi-annually in arrears on June 29 and December 29 of each year, commencing on June 29, 2005. For the year ended December 31, 2020 and 2019, the Company earned no affiliate interest income on this Note. Interest income was $5 for the years ended December 31, 2018. As of June 1, 2018, VIAC ceased to be an affiliate of the Company following the closing of the 2018 Transaction as disclosed in the Business, Basis of Presentation and Significant Accounting Policies Note to these Consolidated Financial Statements. The investment in surplus notes is reported in Fixed maturities, available-for-sale on the Company's Consolidated Balance Sheet as of December 31, 2020 and 2019.
(3) The loss ratio is the ratio of losses and loss adjustment expenses to net earned premiums. The expense ratio, when calculated on a statutory accounting basis, is the ratio of underwriting expenses to net written premiums, and when calculated on a GAAP basis is the ratio of underwriting expense to net earned premiums. The combined ratio is the sum of the loss ratio and the expense ratio. Please refer to page 41 for a discussion on the comparison of the above statutory insurance ratios to our GAAP ratios.
could have on our direct minus ceded loss and LAE reserves and net income for the year ended December 31, 2005. In evaluating the information in the table, it should be noted that a 1 percentage-point change in a single assumption would change estimated reserves by 1 percentage-point. A 1 percentage-point change in both our key assumptions would change estimated reserves within a range of plus or minus 2 percentage-points.
have a reasonable possible range of plus or minus 5 percentage-points for each estimation. The following sensitivity table presents information of the effect each 1 percentage-point change in our assumptions on our share of reserves for CAR and other residual markets could have on our assumed loss and LAE reserves and net income for the year ended December 31, 2005. In evaluating the information in the table, it should be noted that a 1 percentage-point change in our assumptions would change estimated reserves by 1 percentage-point.
The decrease in prior year reserves during the 2005 period resulted from re-estimations of prior year ultimate loss and LAE liabilities and is composed primarily of a reduction of $22,162 in CAR assumed reserves and a reduction of $14,600 in the Company’s automobile reserves. The decrease in prior year reserves during the 2004 period is composed primarily of a reduction of $6,854 in CAR assumed reserves, a reduction of $2,523 in our homeowners line of business, and an increase of $2,928 in the Company’s automobile reserves. The increase in prior year reserves during the 2003 period is composed primarily of a reduction of $1,894 in our automobile reserves, and an increase of $1,915 in CAR assumed reserves. It is not appropriate to extrapolate future favorable or unfavorable development of reserves from this past experience.
Net Realized Gains on Investments. Net realized gains on investments decreased to $305 for the year ended December 31, 2005 from $1,274 for 2004.
No employee compensation cost related to stock options is reflected in net income, as all options granted under this plan had an exercise price equal to the market value of the underlying common stock on the date of grant.
The range of exercise prices on stock options outstanding under the Incentive Plan was $12.00 to $35.23 at December 31, 2005 and $12.00 to $21.40 at December 31, 2004.
The Company also occupies leased office space located at 3755 Capitol of Texas Highway South, Austin, Texas 78704. The two leases related to this office space expire in May 2002 and May 2003, respectively.
The Company's discussion and analysis of its financial condition and results of operations are based on its consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles. The preparation of these financial statements requires the Company to make certain judgements and estimates that affect the amounts reported in the financial statements and in the notes thereto. These judgements and estimates are based on the best information available to the Company at the time and are often based on historical experience of the Company. However, actual results will often differ from these estimates. The revision of estimates can have a significant impact on the reported results of operations for a period.
The Company adopted Statement of Financial Accounting Standards ("SFAS') No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended by SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities - an Amendment of FASB Statement No. 133", on January 1, 2001. In accordance with the transition provisions of SFAS No. 133, the Company recorded a net-of-tax cumulative-effect-type gain of $0.8 million in earnings to record all of its derivatives on the balance sheet at fair value.
Premiums and policy revenues. Premiums and policy revenues totaled $220.7 million in 2000 compared to $224.9 million in 1999. Excluding the effect of the payroll-deduction business, premiums and policy revenues increased $11.0 million from 1999 to 2000. Premiums from traditional life insurance business increased $10.3 million. First year premiums on life insurance sold in the preneed market increased $14.7 million in 2000 compared to 1999. Sales in this market began in the fourth quarter of 1999. The increase in the preneed market was offset by a decrease in premiums from the remainder of the Company's inforce traditional life insurance business. Policy revenues from interest-sensitive life and annuity products increased $0.7 million from 1999 to 2000. This increase was primarily due to (i) a $2.7 million increase in surrender charges from the Company's asset accumulation business, (ii) a $1.0 million increase in surrender charges related to a closed block of annuity business, offset by (iii) a $3.9 million decrease in administration charges on the Company's universal life insurance business.
Canadian policies written under the Renewal Rights Agreement. The retention of existing customers in 2007 remained strong.
Benefits and Expenses. Policyholder benefits and expenses were $1,178.2 million in 2006 as compared to $1,018.8 million in 2005, an increase of 16%. This increase primarily reflects the increase in premiums from the Company’s group employee benefit products discussed above, and also reflects additions to reserves for prior years’ claims and claim expenses in the amount of $36.0 million due to adverse loss experience, primarily arising from the Company’s excess workers’ compensation line, due principally to moderately increased claim frequency, relative to prior periods, relating to policies written during the period from 1997 to 2003. In 2005, the Company recognized an additional provision of $32.9 million, which arose primarily from adverse loss experience in the Company’s excess workers’ compensation line, principally due to moderately increased claim frequency, relative to prior periods, relating to policies written during the competitive market cycle years from 1997 to 2001. If this experience trend were to continue in the future, absent favorable loss experience in other policy years, the Company’s results of operations could be materially adversely affected. The combined ratio (loss ratio plus expense ratio) for the Company’s group employee benefits products decreased to 93.2% in 2006 from 94.1% in 2005. The weighted average annual crediting rate on the Company’s asset accumulation products, which reflects the effects of the first year bonus crediting rate on certain newly issued products, was 4.5% and 4.6% in 2006 and 2005, respectively.
Interest Expense. Interest expense was $25.4 million in 2006 as compared to $20.5 million in 2005, an increase of $4.9 million. This increase primarily resulted from the increases in the weighted average borrowings under the Company’s revolving credit facility, as well as in the weighted average borrowing rate due to increases in the levels of short-term interest indices referenced under such facility, during 2006 as compared to 2005.
$9.9 million at December 31, 2006. Because interest expense on the Company’s floating-rate corporate debt that was outstanding at December 31, 2007 would have fluctuated as prevailing interest rates changed, changes in market interest rates would not have materially affected its fair value.
Strength of the insurance market or particular lines of business. We generate the majority of our revenues through commissions, which are calculated as a percentage of the total insurance policy premium. A softening of the insurance market or the particular lines of business that are our focus, characterized by a period of declining premium rates, could negatively impact our profitability.
score of 7 or 8 are called Passives, and a 9 or 10 are Promoters. NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. For example, if 50% of respondents were Promoters and 10% were Detractors, NPS is a 40. NPS is a useful gauge of the loyalty of client relationships and can be compared across companies and industries.
Adjusted EBITDA Margin is Adjusted EBITDA as defined above, divided by total revenue excluding other non-operating items. Adjusted EBITDA Margin is helpful in measuring profitability of operations on a consolidated level.
Commissions and agency fees consist of new business commissions, renewal commissions, agency fees, and contingent commissions generated from the corporate channel, as well as contingent commissions generated from the franchise channel.
We have managed our historical liquidity and capital requirements primarily through the receipt of revenues from our Corporate Channel and our Franchise Channel. Our primary cash flow activities involve: (1) generating cash
Term Loan”) used to refinance the Credit Agreement, working capital needs and general corporate purposes. The Company has the right, subject to approval by the administrative agent and each issuing bank, to increase the commitments under the credit facilities an additional $50.0 million.
In connection with the Offering, both Goosehead Management, LLC (“GM”) and Texas Wasatch Insurance Holdings Group LLC (“TWIHG”) became wholly owned indirect subsidiaries of GF. Both GM and TWIHG are non-operating holding companies created to receive management fees from the operating entities TWIS and GIA.
In connection with the Offering, the Company incurred costs which were recorded in other assets on the consolidated balance sheets. Upon completion of the Offering, these deferred costs were charged against the proceeds from the Offering with a corresponding reduction to additional paid-in capital. There were $0 and $170 thousand of IPO related costs included in other assets at December 31, 2018 and 2017, respectively.
Realized investment losses amounted to approximately $65.1 million in fiscal 2001, as compared to approximately $8.5 million of losses in fiscal 2000 and gains of approximately $2.8 million in fiscal 1999. Realized investment losses for years ended December 31, 2001 and 2000 and gains for the year ended December 31, 1999 include realized investment losses of approximately $50.7 million, $22.8 million and $14.8 million, respectively, attributable to writedowns of certain securities contained in the Company's investment portfolio. Realized investment gains (losses) result from sales of certain equities and convertible securities, and calls and sales of fixed maturity investments in the Company's investment portfolio. There can be no assurance that the Company's investment portfolio will yield comparable investment results in future periods.
In July 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that all business combinations be accounted for under the purchase method only and that certain acquired intangible assets in a business combination be recognized as assets apart from goodwill. SFAS No. 142 requires that ratable amortization of goodwill be replaced with periodic tests of the goodwill's impairment and identifiable intangible assets other that goodwill be amortized over their useful lives. SFAS No. 141 is effective for which the date of acquisition is after June 30, 2001. The provisions of SFAS No. 142 will be effective for fiscal years beginning after December 15, 2001. Adoption of SFAS 141 and SFAS 142 is not expected to have a material impact on the Company's consolidated financial statements.
Consolidated Statements of Stockholders' Equity - December 31, 1998, 1997 and
Net income decreased to $18.5 million for the year ended December 31, 1998, from $26.4 million for the prior year. Diluted earnings per share decreased to $1.91 in 1998 as compared to $2.67 in 1997. Operating income, which excludes realized investment gains, was $12.9 million in 1998 compared to $19.6 million in 1997. Operating earnings per share on a diluted basis was $1.33 in 1998 compared with $1.98 in 1997.
Taxables ............... 15 3 16 -- 9 48 91 93 Average interest rate 7.0% 7.8% 6.8% -- 5.4% 7.1% -- -- ---- ---- ---- ---- ---------- ---- ----- Total .................. $ 30 $ 14 $ 31 $ 18 $ 41 $209 $343 $353
The consolidated financial statements required in response to this item are included as part of Item 14(a) of this report.
The amount of the total other-than-temporary impairment related to other factors is recognized in other comprehensive income (“OCI”), net of impacts to DAC, DSIC, unearned revenue, benefit reserves, reinsurance recoverables and income taxes. For Available-for-Sale securities that have recognized an other-than-temporary impairment through earnings, the difference between the amortized cost and the cash flows expected to be collected is accreted as interest income if through subsequent evaluation there is a sustained increase in the cash flow expected. Subsequent increases and decreases in the fair value of Available-for-Sale securities are included in OCI.
Freestanding derivative instruments are recorded at fair value and are reflected in other assets or other liabilities. The Company’s policy is to not offset fair value amounts recognized for derivatives and collateral arrangements executed with the same counterparty under the same master netting arrangement. The accounting for changes in the fair value of a derivative instrument depends on its intended use and the resulting hedge designation, if any. The Company primarily uses derivatives as economic hedges that are not designated as accounting hedges or do not qualify for hedge accounting treatment. The Company occasionally designates derivatives as (i) hedges of changes in the fair value of assets, liabilities, or firm commitments (“fair value hedges”) or (ii) hedges of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedges”).
at cost on the balance sheet and requires entities to use the exit price notion when measuring the fair value of financial instruments. The standard is effective for interim and annual periods beginning after December 15, 2017. The Company adopted the standard on January 1, 2018 using a modified retrospective approach. The adoption of the standard did not have a material impact on the consolidated financial condition or results of operations.
On December 22, 2017, the Tax Act was signed into law. The provision for income taxes for the year ended December 31, 2017 includes an expense of $140 million due to the enactment of the Tax Act. The $140 million expense includes a $136 million expense for the remeasurement of deferred tax assets and liabilities to the Tax Act’s statutory rate of 21% and a $4 million expense for the remeasurement of tax contingencies, specifically state tax contingencies and interest accrued for tax contingencies.
Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of $9 million, net of federal benefit, which will expire beginning December 31, 2018. Based on analysis of the Company’s tax position, management believes it is more likely than not that the Company will not realize certain state deferred tax assets, primarily state net operating losses and therefore a valuation allowance of $11 million has been established.
For the year ended April 30, 2008, the Company leased office space for the ATM division, under a non-cancelable operating lease. The lease requires minimum monthly payments of approximately $550 per month and expires in January 31, 2010. For the year ended April 30, 2008, the rent expense was $7,476. This lease obligation was part of the divestiture of the Company’s assets on October 31, 2008.