SELECTED FINANCIAL DATA. - ------- ------------------------ Year ended December 31,* -------------------------------------------- 1993 1992 1991 1990 1989 -------- -------- -------- -------- -------- (In thousands except per share amounts) Insurance premiums earned ...... $156,438 $147,410 $113,419 $101,323 $ 91,728 Investment income, net ......... 20,780 21,540 20,202 19,884 19,309 Realized investment gains ...... 684 384 65 48 257 Other income ................... 259 - - - - -------- -------- -------- -------- -------- Total revenues ............ 178,161 169,334 133,686 121,255 111,294
Effective January 1, 1992, the aggregate participation of the property and casualty insurance subsidiaries was increased to 22 percent from 17 percent. In connection with this change in pool participation, the Company's liabilities increased $31,428,000 and invested assets increased $29,402,000. The Company reimbursed Employers Mutual $2,026,000 for commissions incurred to generate this business.
The Audit Committee of the Board of Directors, composed solely of outside directors, met during the year with management, the Company's internal auditors and the independent certified public accountants to review the scope of the audits, discuss the evaluation of internal accounting controls and discuss financial reporting matters. The independent auditors and internal auditors have free access to the Audit Committee and meet with it, without management present, to discuss any appropriate matters.
The Company files a consolidated Federal income tax return with its subsidiaries. Consolidated income taxes/benefit are allocated among the entities based upon separate tax liabilities.
Employers Mutual voluntarily assumes reinsurance from nonaffiliated insurance companies and cedes 95 percent of this business to the Company's reinsurance subsidiary, exclusive of certain reinsurance contracts. Amounts not ceded to the reinsurance subsidiary have historically been retained by Employers Mutual and have been subject to cession to the pool members. Under the terms of the pooling agreement, the property and casualty insurance subsidiaries had a 22 percent (17 percent in 1991) participation in the amounts assumed from these nonaffiliated companies.
Effective October 31, 1993, Employers Mutual commuted the portion of the quota share agreement that pertains to a voluntary pool that handles large "highly protected" risks. This pool has experienced deteriorating underwriting results over the last several years and Employers Mutual is presently considering whether to continue its participation in the pool beyond 1994. In connection with this change in the quota share agreement, the Company's liabilities decreased $3,827,201 and invested assets decreased $2,619,776. Employers Mutual reimbursed the Company $1,207,425 for commissions incurred to generate this business. No reserve discount was calculated as this business involves short-tail property coverage.
In conjunction with the change in the quota share agreement noted above, the reinsurance subsidiary terminated its catastrophe reinsurance treaty with Employers Mutual. This treaty paid losses in excess of $1,000,000 resulting from any one catastrophe, subject to a maximum loss of $3,000,000. Maximum recovery was limited to $6,000,000. Ceded reinsurance on the books at December 31, 1992 is being allowed to run-off. The reinsurance subsidiary recovered $306,250, $4,125,000 and $485,000 under this treaty and paid reinstatement premiums of $0, $1,033,330 and $47,025 in 1993, 1992 and 1991, respectively. Total premiums paid to Employers Mutual amounted to $0, $2,253,579 and $1,332,957 in 1993, 1992 and 1991, respectively.
Year ended December 31, ------------------------- 1993 1992 1991 ------- ------- ------- Shares available for purchase, beginning of year 955,069 973,901 991,575 Shares purchased under plan ................... (186,187) (18,832) (17,674) ------- ------- ------- Shares available for purchase, end of year ...... 768,882 955,069 973,901 ======= ======= ======= Range of purchase prices ........................ $10.00 $8.00 $8.50 to to to $10.25 $10.25 $9.50
The amortized cost and estimated market value of fixed maturity securities held-to-maturity and equity securities available-for-sale as of December 31, 1992 are as follows:
Retirees ............................................... $ 7,874,628 Fully eligible active plan participants ................ 5,681,430 Other active plan participants ......................... 7,783,183 ----------- Total .............................................. 21,339,241 -----------
Unrecognized net loss from past experience different from that assumed and effects of changes in assumptions .. 447,778 Prior service cost not yet recognized in net periodic postretirement benefit cost .............................. 5,105,109 ----------- Postretirement benefit obligation .................. $15,786,354 ===========
The assumed weighted average annual rate of increase in the per capita cost of covered health care benefits (i.e. the health care cost trend rate) is 12.5 percent for 1994 (compared to 13 percent assumed for 1993) and is assumed to decrease gradually to 6 percent in 2007 and remain at that level thereafter. The health care cost trend rate assumption has a significant effect on the amounts reported. For example, a one-percentage-point increase in the assumed health care cost trend rate for each future year would increase the accumulated postretirement benefit obligation as of December 31, 1993 by $3,269,053 and the aggregate of the service and interest cost components of net periodic postretirement benefit cost for the year ended December 31, 1993 by $281,964. The weighted average discount rate used in determining the accumulated postretirement benefit obligation at December 31, 1993 and January 1, 1993 was 6.75 percent and 7.00 percent, respectively.
Temporary differences between the consolidated financial statement carrying amount and tax basis of assets and liabilities that give rise to significant portions of the deferred tax asset at December 31, 1993 and 1992 relate to the following: