The $4.8 million of adverse reserve development in 2001 includes approximately $1 million of adverse development for the Company's discontinued insurance agent E&O product. The remainder is primarily related to increased claim frequency in the small and specialty contract business. In addition to the $4.8 million of net unfavorable loss reserve development during 2001, the 2001 loss ratio includes approximately $7.8 million pertaining to the Company's exposure to Enron Corporation. Gross incurred loss and loss adjustment expenses for the year ended December 31, 2001 reflect $78 million for this exposure.
For the year ended December 31, 2002, net investment income was $27.8 million compared to net investment income for the years ended December 31, 2001 and 2000 of $29.5 million and $29.9 million, respectively. The annualized pretax yield was 4.8%, 5.3% and 5.6% for the years ended December 31, 2002, 2001 and 2000, respectively. The annualized after-tax yield was 3.8%, 4.0% and 4.3% for the years ended December 31, 2002, 2001 and 2000, respectively. The decrease in investment income for the year ended December 31, 2002 is attributable to the impact of lower investment yields. The decrease in investment income for the year ended December 31, 2001 is attributable to the impact of lower investment yields and reduced invested assets primarily associated with increased dividend payments to shareholders and the retirement of debt.
The interest rate on borrowings under the 2002 Credit Facility may be fixed, at CNA Surety's option, for a period of one, two, three, or six months and is based on, among other rates, the London Interbank Offered Rate ("LIBOR"), plus the applicable margin. The margin, including a facility fee and utilization fee on the 2002 Credit Facility, was 0.625% at December 31, 2002 and can vary based on CNA Surety's leverage ratio (debt to total capitalization) from 0.48% to 0.80%. As of December 31, 2002, the weighted average interest rate was 1.9% on the $60 million of outstanding borrowings. As of December 31, 2001, the weighted average interest rate on the 1997 Credit Facility was 2.5% on the $75.0 million of outstanding borrowings.
In connection with the changes in the Company's 2002 reinsurance program, CNA Surety purchased extended discovery coverage, available under the excess of loss reinsurance coverage in place in 2001, at a cost of approximately $8.5 million. This covers losses on surety bonds written prior to January 1, 2002 and discovered in the two years after January 1, 2002. The limit of this extended discovery coverage is the unused
At December 31, 2002 the future minimum commitment under operating leases was as follows: 2003 -- $2.2 million; 2004 -- $1.9 million; 2005 -- $1.7 million, 2006 -- $1.5 million and 2007 and thereafter -- $5.8 million. Total rental expense for the years ended December 31, 2002, 2001 and 2000 was $4.0 million, $4.4 million and $3.5 million, respectively.
The Company was charged $5.2 million, $5.7 million, and $5.9 million for the years ended December 31, 2002, 2001 and 2000, respectively, for rents and services provided under a previous Administrative Services Agreement. In addition, the Company was charged $1.0 million, $2.1 million and $1.9 million for direct costs incurred by CCC on the Company's behalf during 2002, 2001 and 2000, respectively. The Company owed $0.5 million which was reflected in other liabilities in the Company's Consolidated Balance Sheet at December 31, 2002.