felanders/preprocessed huggingface dataset:
In addition, we may from time to time derive other income from gains on deposit accounted contracts, fees generated from advisory services and fees relating to overrides, profit commissions and the contractual fees upon early termination of contracts.
We believe that our reserves for loss and LAE are sufficient to cover losses that fall within the terms of our policies and agreements with our insured and reinsured customers based on the methodologies used to estimate those reserves. However, we can provide no assurance that actual losses will not (i) be less than or (ii) exceed our total established reserves.
One way that we evaluate the Company’s underwriting performance is through the measurement of net underwriting income (loss). We do not use premiums written as a measure of performance. Net underwriting income (loss) is a performance measure used by management to measure the fundamentals underlying the Company’s underwriting operations. We believe that the use of net underwriting income (loss) enables investors and other users of the Company’s financial information to analyze our performance in a manner similar to how management analyzes performance. Management also believes that this measure follows industry practice and allows the users of financial information to compare the Company’s performance with those of our industry peer group.
Our overall combined ratio was 100.4% for the year ended December 31, 2020, compared to 106.9% during the same period in 2019. Excluding the impacts of prior year development, catastrophe events, and COVID-19, the adjusted combined ratio for the year ended December 31, 2020, was 96.0%, compared to 97.1% in 2019.
We use our restricted cash and cash equivalents for funding trusts and letters of credits issued to our ceding insurers. Our restricted cash increased by $3.3 million, or 0.4%, from $742.1 million as of December 31, 2019, to $745.4 million, as of December 31, 2020, primarily due to a net increase in collateral held in trusts by our ceding insurers.
Greenlight Capital Re is organized as a holding company with no operations of its own. As a holding company, Greenlight Capital Re has minimal continuing cash needs, most of which are related to the payment of administrative expenses and interest expense. All of our underwriting operations are conducted through our wholly-owned reinsurance subsidiaries, Greenlight Re and GRIL, which underwrite property and casualty reinsurance. There are restrictions on each of Greenlight Re’s and GRIL’s ability to pay dividends, which are described in more detail below. It is our current policy to retain earnings to support the growth of our business. We currently do not expect to pay dividends on our ordinary shares.
We recently began offering Medicare services to beneficiaries in Georgia. As of December 31, 2005, total membership was less than 300. In July 2005 we were awarded a Medicaid managed care contract by the Georgia Department of Community Health, or DCH, pursuant to which DCH will transition approximately 1.1 million Medicaid and SCHIP beneficiaries to Medicaid managed care plans. Although DCH has not yet announced any delay in the official launch date of April 1, 2006, we are anticipating a two month delay in the transition date for this new program. We expect to continue to incur administrative expenses in connection with our preparations for the launch of this new program, and any delays in the transition date beyond our current expectations could have a material negative impact on our results of operations in 2006.
Medical benefits expense. For the year ended December 31, 2004, medical benefits expense increased $264.5 million, or 31%, to $1,125.6 million from $861.1 million for the same period last year. The increase in medical benefits expense was primarily due to organic growth in membership as well as through the acquisition of Harmony in June 2004. The methodology used in estimating medical benefits payable was consistent with prior periods. The medical benefits ratio was 80.9% compared to 82.6% for the same period last year. The medical benefits ratio decreased in 2004 primarily as a result of the increased premium rate received for Medicare members and lower overall utilization of services by our members. Additionally, pharmacy and professional costs were reduced by approximately $1.3 million due to the inaccessibility of services as a result of the four hurricanes that affected the State of Florida during the third quarter of 2004.
Medicaid. For the year ended December 31, 2004, Medicare medical benefits expense increased $36.4 million, or 15%, to $275.3 million from $238.9 million for the same period last year. The increase was partially due to the growth in membership, which accounted for $13.2 million of the increase. Increased healthcare costs accounted for $22.1 million of the increase with changes in membership mix resulting in cost increases of $1.2 million. For the year ended December 31, 2004, the Medicare medical benefits ratio was 82.3% compared to 82.9% for the same period last year. The medical benefits ratio decreased as a result of the premium rate increases and lower overall utilization.
The Company had a growing volume of assumed reinsurance between 1999 and 2002. Assumed reinsurance is a line of business with inherent volatility. Ultimate loss experience for the assumed reinsurance operation is based primarily on reports received by the Company from the underlying ceding insurers. Many losses take several years to be reported through the system. The Company relies heavily on the ceding entity’s estimates of ultimate incurred losses, especially those of Lloyd’s syndicates. Ceding entities, representing over 61.5% of the reinsurance assumed business for the 1999 to 2003 underwriting years (based on gross written premiums), submit reports to the Company containing ultimate incurred loss estimates reviewed by independent or internal actuaries of the ceding entities. These reported ultimate incurred losses are the primary basis for the Company’s reserving estimates. In other cases, the Company relies on its own internal estimates determined primarily by experience to date, individual knowledge of the specific reinsurance contract, industry experience and other actuarial techniques to determine reserve requirements.
the financial condition and near-term prospects of the security’s issuer, taking into consideration the economic prospects of the issuers’ industry and geographical region, to the extent that information is publicly available; and
Net loss reserves related to the assumed reinsurance segment declined from $87.8 million at December 31, 2004 to $59.2 million in 2005 as reserves were settled and 2002 and 2003 underwriting years for the London syndicates closed and settlements were made in 2005.
The Company had an income tax expense in 2005 and 2004 compared to a benefit in 2003. During the third quarter 2004, the Company settled with the California Franchise Tax Board (FTB) for $4.0 million, an assessment received in 2002. Legislation enacted in California during the third quarter of 2004 restored 80% of a deduction provision under which insurance holding companies had for many years deducted all dividends received from their insurance company subsidiaries. The $4.0 million settlement is included in income taxes and offsets a federal tax benefit for the year of $3.9 million.
Our January 1, 2017 projected single event loss exposures were within our underwriting guidelines. Namely, the projected net impact from any one catastrophe loss event (excluding earthquake) at the 1 in 100 year return period for any one zone did not exceed 35% of our projected shareholders’ equity at December 31, 2016, and the projected net impact from any one earthquake loss event at the 1 in 250 year return period for any zone did not exceed 35% of our projected shareholders’ equity at December 31, 2016.
(2) Losses incurred on other minor loss events for the year ended December 31, 2014 were individually below $1.0 million.
Our reinsurance acquisition costs relating to commissions, brokerage costs, fronting fees and related costs increased during 2016 versus 2015 and 2014, primarily reflecting the higher concentration of earned premium from the Endurance Quota Share Agreement which maintains a higher acquisition cost. Our profit commissions incurred, which fluctuate based on our loss experience, were lower in 2016 compared to 2015 and higher in 2016 compared to 2014 as a result of the loss events impacting our results.
As of December 31, 2016, we had no outstanding borrowings under the 2016 Credit Facility.
Since the Underwriting and Insurance Management Agreement is dependent on our future performance, we are unable to determine the amount of Performance Fees we would expect to pay the Manager in future periods pursuant to this agreement. To date, we have incurred $1.8 million in Performance Fees pursuant to this agreement.
Estimating loss and LAE reserves requires us to make assumptions regarding reporting and development patterns, frequency and severity trends, claims settlement practices, potential changes in legal environments, inflation, loss amplification and other factors. These estimates and judgments are based on numerous considerations and are revised as: (i) we receive changes in loss amounts reported by ceding companies and brokers; (ii) we obtain additional information, experience or other data; (iii) new or improved methodologies and/or relevant data sources are utilized; or (iv) laws change.
d) The revenue from our Hong Kong segment increased significantly. In 2018, the Company became the broker for re-insurance products for Taiwan Life. In this arrangement, the Company earns commissions on sales of insurance products from other insurers to Taiwan Life for risk management. The increase was the result of revenue from commissions from sales of reinsurance products in Hong Kong.
China United Insurance Service, Inc. (“China United”, “CUIS”, or the “Company”) is a Delaware corporation, organized on June 4, 2010 by Yi-Hsiao Mao, a Taiwan citizen, as a listing vehicle for both ZLI Holdings Limited (“CU Hong Kong”) and Action Holdings Financial Limited (“AHFL,” a company incorporated in the British Virgin Islands).
See Note 15 for additional information on current liabilities related to AIA International Limited Taiwan Branch (“AIATW”).
Law Anhou Insurance Agency Co., Limited (“Anhou”) in Nanjing City, PRC is a variable interest entity (VIE) of which the Company is the primary beneficiary. The Company contractually control Anhou through CU Hong Kong.
On July 20, 2016, Anhou entered into a loan agreement (“Loan B”) with an individual third party. The loan agreement provided for approximately $111,976 (RMB 770,000) and $118,345 (RMB 770,000) as of December 31, 2018 and 2017, respectively, loan to the Company. The Loan B bears an interest rate of 8% per annum and interest is payable annually. The principal and the accrued interest will be due on July 20, 2019. As of December 31, 2018, the principal amount was reclassified to current liabilities.
The following table reconciles the Company’s statutory tax rates to effective tax rates for the years ended December 31, 2018 and 2017:
Other investment income consists primarily of income related to investments in unconsolidated affiliates, typically structured as limited liability companies ("LLC's"), accounted for under either the equity method of accounting or the measurement alternative for investments that do not have readily determinable fair values. The measurement alternative method requires investments without readily determinable fair values to be recorded at cost, less impairments, and plus or minus any changes resulting from observable price changes. The Company monitors any events or changes in circumstances that may have had a significant adverse effect on the fair values of these investments and makes any necessary adjustments.
Provision (Benefit) for Claims: The provision (benefit) for claims as a percentage of net premiums written was 2.4%, (0.2)% and 2.4% in 2019, 2018 and 2017, respectively. The increase in the provision (benefit) for claims in 2019, compared with 2018, was due to less favorable loss development and higher incurred claims in the current year period. A benefit for claims was recorded in 2018, primarily due to favorable loss experience, which resulted in the decrease in the provision (benefit) for claims in 2018, compared with 2017.
Purchase of Company Stock: On November 9, 2015, the Board of Directors of the Company approved the purchase of an additional 163,335 shares pursuant to the Company’s repurchase plan, such that there was authority remaining under the plan to purchase up to an aggregate of 500,000 shares of the Company’s common stock pursuant to the plan immediately after this approval. Unless terminated earlier by resolution of the Board of Directors, the plan will expire when all shares authorized for purchase under the plan have been purchased. Pursuant to the Company’s ongoing purchase program, the Company purchased 109 shares in the twelve months ended December 31, 2019, 149 shares in the twelve months ended December 31, 2018, and 1,333 shares in the twelve months ended December 31, 2017, at average per share prices of $165.08, $195.87 and $183.67, respectively. The Company anticipates making further purchases under this plan from time to time in the future, depending on such factors as the prevailing market price of the Company’s common stock, the Company’s available cash and then existing alternative uses for such cash.
In accounting for uncertainty in income taxes, the Company is required to recognize in its financial statements the impact of a tax position if that position is more likely than not of being sustained on an audit, based on the technical merits of the position. In this regard, an uncertain tax position represents the Company’s expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for financial reporting purposes. There were no unrecognized tax benefits or liabilities as of December 31, 2019.
Leases with an initial term of twelve months or less are not recorded on the Consolidated Balance Sheets.
In addition to the regulatory oversight of NAICO, Chandler Insurance is also subject to regulation under the laws of the Cayman Islands and Chandler USA and all of its affiliates are also subject to regulation under the Oklahoma Insurance Code. The Oklahoma Insurance Code contains certain reporting requirements including those requiring Chandler Insurance, as the ultimate parent company, to file information relating to its capital structure, ownership and financial condition and general business operations of its insurance subsidiaries. The Oklahoma Insurance Code contains special reporting and prior approval requirements with respect to transactions among affiliates. The Oklahoma Insurance Code also imposes certain requirements upon any person controlling or seeking to control an insurance company domiciled in Oklahoma. Control is generally presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote or holds proxies representing 10% or more of the voting securities of the insurance company or of any other person or entity controlling the insurance company. The 10% presumption is not conclusive and control may be found to exist at less than 10%. Persons owning any securities of Chandler USA or Chandler Insurance must comply with the Oklahoma Insurance Code. See "BUSINESS - Regulation."
The following tables summarize the net premiums earned and the financial year (losses incurred and recognized by Chandler USA regardless of the year in which the claim occurred) and accident year (losses incurred by Chandler USA for a particular year regardless of the period in which Chandler USA recognizes the costs) loss ratios (computed by dividing losses and loss adjustment expenses by net premiums earned) in each of the years presented. The first table is summarized by major insurance program and includes all lines of insurance written in each program. The second table is summarized by line of insurance written and includes all net premiums earned and net losses and loss adjustment expenses incurred from all insurance programs for that particular line:
During 1999 and 2000, Chandler USA provided $5.2 million and $10.7 million, respectively, in cash from operations. During 2001, Chandler USA used $27.8 million in cash from operations due primarily to decreases in unpaid losses and loss adjustment expenses, unearned premiums and premiums payable that resulted from the decrease in written premiums in 2001.
Cash flows from financing activities are affected by the level of activity related to transactions with affiliates and bank borrowings. In February 1998, Chandler USA entered into a five-year loan agreement with a bank having a principal amount of $2.3 million. In March 1998, Chandler USA borrowed an additional $6.2 million under an existing loan agreement with a bank. In July 1999, both bank notes were repaid from the proceeds of the debenture offering.
Interest expense for the twelve months ending December 31, 2009 was $39,219 resulting in a net loss from continuing operations of $246,073. By comparison, interest expense for the twelve months ending December 31, 2008 was $41,869 resulting in a net loss from continuing operations of $284,294.
In the September quarter 2009, the company revised our database amortization schedule from 15 years to 5 years. The expense with this amortization schedule is now $21,510 per quarter.
The strength of our business plan has provided support for operating capital for us to maintain minimal operations until our offering can be approved and completed.
Healthsource Provident also maintains sales offices in 20 cities in leased facilities.
Total SG&A expenses increased to $123 million from $63 million due to acquisitions and the development of existing and new business. As a percent of total revenue, SG&A decreased to 21.0% from 21.7%.
On August 31, 1993, the Company acquired 40.0% of Healthsource New York, Inc. (formerly CNY Patient's Network, Inc.), the parent company of HSNY for $1.0 million.
Losses incurred can be further broken down into losses paid and changes in loss and loss adjustment expense reserves as follows:
Verdant is incorporated in Delaware and, therefore, is subject to taxes in accordance with the U.S. federal rates and regulations prescribed by the Internal Revenue Service. Verdant’s future taxable income is expected to be taxed at a rate of 21% (2016: 35%).
Financial contracts payable as of December 31, 2017 increased by $20.0 million, or 893.4%, compared to December 31, 2016, primarily due to acquisition of total return equity swap contracts during the period that were in a payable position as of December 31, 2017.
does not include transactional costs such as brokerage, collateral costs and federal excise tax.
Our sources of funds consist primarily of premium receipts (net of brokerage and ceding commissions), investment income (net of advisory compensation and investment expenses), including realized gains, and other income. We use cash from our operations to pay losses and loss adjustment expenses, profit commissions and general and administrative expenses. Substantially all of our funds, including shareholders’ capital, net of funds required for business operations, are invested by DME Advisors in accordance with our investment guidelines. As of December 31, 2017, approximately 94% (December 31, 2016: 94%) of our long investments were comprised of publicly-traded equity securities and other holdings which can be readily liquidated to meet current and future liabilities. Given our value-oriented long and short investment strategy, if markets are distressed, we would expect the liability of the short portfolio to decline. Any reduction in the liability would cause our need for restricted cash to decrease and thereby free up cash to be used for any purpose. Additionally, since the majority of our invested assets can be readily liquidated, even in distressed markets, we believe sufficient securities can be readily sold or covered in a timely manner to generate cash to pay claims. Since we classify our investments as “trading,” we book all gains and losses (including unrealized gains and losses) on all our investments (including derivatives) as net investment income or loss in our consolidated statements of income for each reporting period.
Senior Indenture, dated as of November 3, 2003, between The PMI Group, Inc. and The Bank of New York Mellon Trust Company, N.A., formerly known as The Bank of New York Trust Company, N.A., as successor Trustee thereunder to The Bank of New York (incorporated by reference to exhibit 10.30 to the registrant’s annual report on Form 10-K for the year ended December 31, 2003, filed on March 15, 2004 (File No. 001-13664)).
The PMI Group, Inc. 2005 Directors’ Deferred Compensation Plan (September 20, 2007 Restatement) (incorporated by reference to exhibit 10.6 to the registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2007, filed on November 7, 2007 (File No. 001-13664)).
Pre-2008 Form of Change of Control Employment Agreement (incorporated by reference to
Form of Stock Option Agreement for Section 16 Officers (incorporated by reference to exhibit 10.1 to the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2010, filed on April 26, 2010 (File No. 001-13664)).
Revised Form of Stock Unit Agreement for Non-Employee Directors, effective January 15, 2009 (incorporated by reference to exhibit 10.13b to the registrant’s annual report on Form 10-K for the year ended December 31, 2008, filed on March 16, 2009 (File No. 001-13664)).
• The Company developed a new Final Expense product, distribution and reinsurance agreement for 2005 introduction in an effort to create an opportunity for growth.
DAC is also subject to periodic recoverability and loss recognition testing. These tests ensure that the present value of future contract-related cash flows will support the capitalized DAC balance to be amortized in the future. The present value of these cash flows, less the benefit reserve, is compared with the unamortized DAC balance and if the DAC balance is greater, the deficiency is charged to expense as a component of amortization and the asset balance is
Information regarding Dental profitability is included below. The “contribution margin” shown below is a direct margin without allocable investment income and general expense.
The Company has completed a strategic review of its products and operations. A key element of this initiative is mitigating the significant losses incurred on the Preneed Life business segment and strengthening future profitability in the Broker Life, Home Service Life and Dental segments by increasing premiums, strengthening underwriting policies, modifying commissions, and where possible, lowering interest crediting or policy growth rates.
The scheduled maturity dates for fixed income securities in an unrealized loss position at December 31, 2007 are shown below. Actual maturities may differ from those scheduled as a result of prepayments by the issuers.
Standard & Poor's and A.M. Best, respectively, at December 31, 2007. There were no changes to these ratings during 2007.
Investment income consists of interest and is recognized on an accrual basis using the effective yield method. Interest income on asset-backed securities, mortgage-backed securities and commercial mortgage-backed securities is determined considering estimated principal repayments obtained from widely accepted third party data sources and internal estimates. Accrual of income is suspended for fixed income securities that are in default or when the receipt of interest payments is in doubt.
The Company receives distribution services from Allstate Financial Services, LLC ("AFS"), an affiliated broker-dealer company, for certain variable annuity and variable life insurance contracts sold by Allstate exclusive agencies. For these services, the Company incurred $25.5 million, $42.7 million and $44.6 million of commission and other distribution expenses for the years ended December 31, 2007, 2006 and 2005, respectively, that were ceded to ALIC under the terms of the reinsurance agreements.
Direct $1,038,671 $ 944,823 $ 840,691 Assumed 9,132 10,238 6,572 Ceded: Affiliate (623,102) (546,554) (461,496) Non-affiliate (424,701) (408,507) (385,767) ---------- --------- --------- Premiums and contract charges, net of reinsurance $ -- $ -- $ -- ========== ========= =========
($ IN THOUSANDS) 2007 2006 2005 ----------- ----------- ----------- INTEREST CREDITED TO CONTRACTHOLDER FUNDS, CONTRACT BENEFITS AND EXPENSES Direct $ 1,964,326 $ 1,972,975 $ 1,959,229 Assumed 10,473 9,762 7,658 Ceded: Affiliate (1,421,831) (1,487,799) (1,483,707) Non-affiliate (552,968) (494,938) (483,180) ----------- ----------- ----------- Interest credited to contractholder funds, contract benefits and expenses, net of reinsurance $ -- $ -- $ -- =========== =========== =========== 8. COMMITMENTS, GUARANTEES AND CONTINGENT LIABILITIES
Calendar year losses incurred for ECO losses, gross and net of reinsurance, over the past five calendar years have ranged from $0.8 million to $4.2 million, averaging $2.1 million per year. Losses for 2015, 2014 and 2013 have been $2.4 million, $4.2 million and $1.3 million, respectively.
These tables do not present accident or policy year development data. Furthermore, in evaluating the re-estimated liability and cumulative deficiency (redundancy), note that each percentage includes the effects of changes in amounts for prior periods. Conditions and trends that have affected development of the liability in the past may not necessarily exist in the future. Accordingly, it is not appropriate to extrapolate future redundancies or deficiencies based on these tables.
The $2.9 million unfavorable reserve development during the twelve months ended December 31, 2013, was primarily due to increases in severity estimates in bodily injury coverages in California and personal injury protection coverages in Florida, all related to accident year 2012.
Our Board of Directors previously authorized a share and debt repurchase program. On November 4, 2014, our Board of Directors increased the authority to a total of $75 million and extended the date to execute the program from December 31, 2014, to December 31, 2016. During 2015 we repurchased 361,749 shares at an average cost, excluding commissions, of $79.32 per share. As of December 31, 2015, we had $45.4 million of authority remaining under this program.
Our contractual obligations and those of our insurance subsidiaries as of December 31, 2015, were ($ in thousands):
At December 31, 2015, we had $275 million principal outstanding of senior notes. These notes carry a coupon rate of 5.0% and require no principal payment until maturity in September 2022. Refer to Note 4 - Long-Term Debt of the Notes to Consolidated Financial Statements for additional information on the 5.0% Senior Notes.
Our insurance subsidiaries enter into ceded reinsurance contracts from time to time to protect their businesses from losses due to concentration of risk and to limit losses arising from catastrophic events. The majority of such reinsurance contracts are executed through excess-of-loss treaties and catastrophe contracts under which a third party reinsurer indemnifies our insurance subsidiaries for a
Compensation of our senior management team, including our named executive officers, consists primarily of three components: base salary, annual bonus and long-term incentive awards. Base salaries have been capped at $400,000. Annual bonus targets for all senior executives are 50% of base salary with their payout potential ranging from 0% to 200% of target depending on performance against established goals. Long-term incentives for senior executives have in the past been comprised of performance shares and/or performance units. Under these instruments, payouts are explicitly tied to White Mountains', OBIG's or OneBeacon's performance over a three-year period and are highly variable (the actual number of shares/units paid out at the end of the cycle will range from 0% to 200% of target depending on performance against established goals). See Note 10-"Employee Share-Based Incentive Compensation Plans" of the accompanying consolidated financial statements.
(1)Includes $15.4 million and $2.1 million, respectively, of net investment income for assets held in trust for the years ended December 31, 2007 and 2006.
We purchase commercial and residential mortgage-backed securities to maximize our fixed income portfolio's risk adjusted returns and diversify the portfolio risk from primarily corporate credit risk to a mix of credit and cash flow risk. We are not an originator of residential mortgage loans and did not hold any mortgage-backed securities categorized as sub-prime as of December 31, 2007. In addition, our investments in hedge funds, limited partnerships and private equity interests contain negligible amounts of sub-prime mortgage-backed securities as of December 31, 2007. We consider sub-prime mortgage-backed securities to be those that are issued from dedicated sub-prime shelves, dedicated second-lien shelves (i.e., we consider investments backed primarily by second-liens to be a sub-prime risk regardless of credit score or other metrics) or otherwise have underlying loan pools that exhibit weak credit characteristics.
During 2007, we reported net decreases in our loss and LAE reserves and reinsurance recoverables on paid and unpaid losses, primarily due to the decline of our business exposures related to run-off.
As part of our previously described actuarial review process, we review A&E activity each quarter and compare that activity to what was assumed in the original internal study. As of December 31, 2007, we estimated that the range of reasonable outcomes around our best estimate was $1.7 billion to $2.4 billion.
•the risks discussed beginning on page 26 of this Form 10-K;
Regan Holding Corp. is a holding company whose primary operating subsidiary is Legacy Marketing Group.
Legacy Marketing has marketing agreements with certain insurance carriers. Under the terms of the marketing agreements, Legacy Marketing is responsible for appointing Producers, who have contracted with Legacy Marketing to sell fixed annuity products, with various states’ departments of insurance and the applicable insurance carriers. For these services, the insurance carriers pay Legacy Marketing commissions and marketing allowances.
Administrative fees decreased $2.1 million (28%) in 2007 compared to 2006 primarily due to the termination of administrative agreements with Washington National, American National, Investors Insurance, Americom and Transamerica effective October 17, 2007, as the result of an agreement with a subsidiary of Perot Systems, whereby we agreed to transfer our third party administration services function and the employees who provide these services to Perot Systems in exchange for Perot Systems assumption of such administrative service functions. As a result of this transaction, Legacy Marketing recognized a non-cash internal use software impairment charge of approximately $1.2 million in the fourth quarter of 2007. In addition, the administrative agreement with IL Annuity expired on April 30, 2006. The termination and expiration of the administrative agreements does not affect the commissions earned by Legacy Marketing on additional premium received or assets under management with respect to the underlying insurance contracts.
The Company accounts for derivative financial instruments in accordance with the provisions of Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”). SFAS 133 requires the Company to measure all derivatives at fair value and to recognize them in the balance sheet as an asset or liability. For derivatives designated as cash flow hedges, changes in fair value of the derivative are reported as other comprehensive income and are subsequently reclassified into earnings when the hedged transaction affects earnings. Changes in fair value of derivative instruments not considered hedging instruments and ineffective portions of hedges are recognized in earnings in the current period.
As the Company incurred net losses in the years ended December 31, 2007, 2006 and 2005, options to purchase 3.2 million, 4.3 million and 6.0 million shares of the Company’s common stock were excluded from the computation of diluted net loss per share for those periods, as the effect would have been antidilutive.
Barbados law requires that the Company maintain a minimum margin of solvency based generally on the amount of premiums earned in the preceding year. At January 1, 2002, the Company's required minimum stockholders' equity computed in accordance with Barbados law was approximately $5,841,257.
In connection with the financial reporting as of and for the year ended December 31, 2001, certain adjustments were made to reduce net income and shareholders’ equity as of January 1, 2001 by $1.0 million.
As more fully described above under “- Critical Accounting Policies - Investment Accounting Policy - Impairment”, in accordance with the guidance of paragraph 16 of SFAS 115, should an other-than-temporary impairment be determined, we recognize such loss on the income statement and we write down the value of the security and treat the adjusted value as the new cost basis of the security.
Our losses and loss adjustment expenses increased by 30.3% to $4,683,409 in 2016 from $3,593,663 in 2015. The increase in the 2016 amount is mainly attributable to the increase in current year losses and loss adjustment expenses under the Reinsurance Agreement due to increased cessions from C&F, as discussed above. Our loss ratio under the Reinsurance Agreement, calculated as the ratio of losses and loss adjustment expenses to net premiums earned, was 65.7% in 2016 and 66.3% in 2015. The decrease in this loss ratio was primarily the result of losses during the year ended December 31, 2016 continued to emerge at levels consistent with expectations, as discussed in more detail on page 25 under the caption “Losses and Loss Adjustment Expenses.”
As of December 31, 2016, our total investments were $26,527,965, an increase of $4,133,934 or 18.5%, from $22,394,031 at December 31, 2015. This increase was primarily due to the increase in the fair value of certain equity securities as a result of favorable market conditions and to the purchase of additional equity securities and fixed income securities with net premiums received under the Reinsurance Agreement. The cash and cash equivalents balance increased from $3,073,747 at December 31, 2015 to $4,631,709 at December 31, 2016, an increase of $1,557,962 or 50.7%. The amount of cash and cash equivalents varies depending on the
Prepaid expenses and other assets were $1,398,739 at December 31, 2016, an increase of 34.2% from December 31, 2015. The balance primarily relates to (1) prepaid directors’ and officers’ liability insurance costs, (2) the prepaid directors’ retainer, (3) prepaid professional fees and (4) premiums due to APSL under the Agency Agreement. The increase in the balance was attributable to an increase in premiums due to APSL under the Agency Agreement. This balance fluctuates due to the timing of the prepayments and to the timing of the premium receipts by APSL.
AMIC Ltd. has received the BMA’s approval for the utilization of its investment in Investco as a relevant asset up to an aggregate amount sufficient to meet and maintain the minimum liquidity ratio.
(7) Investments as of December 31, 1998, 1997, 1996 and 1995 are reflected at market value. As of December 31, 1994 a portion of the portfolio was classified as held to maturity and was therefore reflected at amortized cost and the remaining portfolio was shown at market value. The changes in portfolio valuation reflect the adoption of Statement of Financial Accounting Standard No. 115, effective for fiscal years following December 15, 1993.
Underwriting and general and administrative expenses, excluding policyholder dividends and a loss on the termination of a financing transaction with a related party reinsurer, increased $3.6 million or 10.4% to $37.7 million for the year ended December 31, 1997, as compared to the same period in 1996. This increase primarily resulted from the SPCC acquisition. Excluding the one-time expense of $5.3 million for the cancellation in 1996 of a reinsurance contract, underwriting expenses for 1997 increased $8.9 million or 30.9%. Our expense ratio decreased to 26.7% from 38.5% for the year ended December 31, 1997, as compared to 1996. The decrease in the expense ratio from 1997 to 1996 is due to the 1996 expense of $5.3 million in connection with a negotiated settlement of a reinsurance contract with Centre Re, and an increase in premium without a corresponding increase in expense resulting from the SPCC acquisition.
SNIG, as a holding company, depends on dividends and intercompany tax allocation payments from its operating subsidiaries for its net cash flow requirements, which consist primarily of periodic payments on its outstanding debt obligations. Absent other sources of cash flow, SNIG cannot expend funds materially in excess of the amount of dividends or tax allocation payments that could be paid to SNIG by SNIC, SPCC, CalComp, CBIC, and CCIC. Further, insurance companies are subject to restrictions affecting the amount of shareholder dividends and advances that may be paid within any year without the prior approval of the DOI. The California Insurance Code provides that amounts may be paid as dividends on an annual noncumulative basis (generally up to the greater of (i) net income for the preceding year and (ii) 10% of statutory surplus as regards policyholders as of the preceding December 31) without prior notice to, or approval by, the DOI. CCIC is regulated by the State of New York. Dividends may only be paid out of "earned surplus" as defined in the California Insurance Code. Prior to the sale of BICO, BICO paid a $35.0 million dividend to SNIG via BIG. In addition, SNIC and SPCC paid $8.2 million and $0.3 million, respectively, to SNIG for their current income taxes.
While we do not presently foresee any expenditures during the next twelve months other than those arising in the normal course of business, we may seek to expand market share without deviating from our pricing strategy, by seeking strategic alliances, investment opportunities or acquisitions. However there can be no assurances any such opportunities will be realized.
DIRECT EXPENSES. Direct expense for the year ended December 31, 2002 of $209.5 million consisted of $168.0 million in direct costs associated with the PBM segment and $41.5 million attributable to benefit costs and compensation to our distributors for supplemental benefits products. Direct expenses for the year ended 2001 were $87.5 million, consisting of approximately $43.6 million and $43.9 million attributable to the pharmacy benefit management services and supplemental benefits segments, respectively. The PBM increase is principally due to the Catalyst acquisition, which increased direct expenses by $106.6 million from 2001 to 2002. Of the $106.6 million, $45.6 million is attributed to new business for Catalyst in 2002. The direct expenses of $209.5 million and $87.5 million for the years ended 2002 and 2001, represent 85.5% and 69.5% of operating expenses for the respective periods.
If we fail to comply with all of the various and complex laws and regulations governing our products and marketing techniques, including any use of the Internet regarding products and marketing, we could be subject to fines, additional licensing requirements or the inability to market in particular jurisdictions -------------------------------------------------------------------------------
We caution readers that the following factors, in addition to other factors mentioned from time to time could cause actual results to differ materially from those contemplated by the forward-looking statements:
percentage decline in value and the length of time during which the decline has occurred
The following table presents the 10 largest unrealized loss positions in our portfolio as of December 31, 2005.
Aflac Japan's deferred policy acquisition costs decreased 4.9% (7.7% increase in yen). The weaker yen at year-end decreased reported deferred policy acquisition costs by $482 million. At December 31, 2005, deferred policy acquisition costs of Aflac U.S. increased 10.3%. The increase in deferred policy acquisition costs was primarily driven by increases in total new annualized premium sales.
Cash flows for Aflac U.S. and Other Operations were impacted by the January 2005 return of cash collateral from the security lending activities of Aflac U.S. at the end of 2004 (approximately $2.6 billion).
Aflac is rated AA by both Standard & Poor's and Fitch Ratings and Aa2 (Excellent) by Moody's for financial strength. A.M. Best assigned Aflac an A+ (Superior) rating for financial strength and operating performance. Aflac Incorporated's senior debt and Samurai notes are rated A by Standard & Poor's, A+ by Fitch Ratings, and A2 by Moody's.
The carrying values and estimated fair values of the Company's financial instruments as of December 31 were as follows:
The aggregate contractual maturities of notes payable during each of the years after December 31, 2005, are as follows:
During 2005, the valuation allowance for deferred tax assets decreased by $34 million primarily due to utilization of non-life losses. During 2004, the valuation allowance for deferred tax assets decreased by $113 million primarily due to changes in carryforwards of alternative minimum tax credits as noted above. For current U.S. income tax purposes, alternative minimum tax credit carryforwards of $204 million and foreign tax credit carryforwards of $31 million were available at December 31, 2005.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Aflac Incorporated and subsidiaries as of December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.
The following table presents 2013 and 2012 claim count and payment amount information for workers’ compensation. Workers’ compensation losses primarily consist of indemnity and medical costs for injured workers.
Atlantic States is a member of the FHLB of Pittsburgh. Through its membership, Atlantic States has the ability to issue debt to the FHLB of Pittsburgh in exchange for cash advances. During 2013, Atlantic States issued secured debt in the principal amount of $15.0 million to the FHLB of Pittsburgh in exchange for cash advances in the amount of $15.0 million. Atlantic States then loaned $15.0 million to us. We used the proceeds of our loan from Atlantic States to fund our prepayment of our subordinated debentures, as we discuss below. The interest rate on the advances was .26% at December 31, 2013. Atlantic States had no outstanding borrowings with the FHLB of Pittsburgh at December 31, 2012. The table below presents the amount of FHLB of Pittsburgh stock Atlantic States purchased, collateral pledged and assets related to Atlantic States’ membership in the FHLB of Pittsburgh at December 31, 2013.
reinsurers provided coverage on any one treaty with no reinsurer taking more than 30.0% of any one treaty. The amount of coverage provided under each of these types of reinsurance depends upon the amount, nature, size and location of the risks being reinsured. Donegal Mutual and our insurance subsidiaries also purchased facultative reinsurance to cover exposures from losses that exceeded the limits provided by the treaty reinsurance Donegal Mutual and our insurance subsidiaries purchased. In order to write automobile insurance in the State of Michigan, MICO is required to be a member of the Michigan Catastrophic Claims Association (“MCCA”). The MCCA provides reinsurance to MICO for personal automobile and commercial automobile personal injury claims in the State of Michigan over a set retention.
Net investment income. Net investment income increased 6.3% to $10.3 million for 2000 from $9.7 million for 1999. Average invested assets decreased to $146.8 million for 2000 from $160.8 million for 1999. The Company's average yield on its portfolio was 7.0% in 2000 and 6.0% in 1999. The 2000 average yield is skewed by the increase in the Company's investment portfolio in January 2000. The increase in the portfolio early in the year understated the Company's average total invested assets for 2000. The actual yield in 2000 is closer to historical levels.
Where necessary, prior years' information has been reclassified to conform to the 2000 presentation.
Comprehensive loss includes all changes in equity during a period except those resulting from investments by stockholders and distributions to stockholders. The Company's only component of other comprehensive loss relates to unrealized gains and losses on investments. The Company has included consolidated statements of comprehensive loss in the accompanying consolidated financial statements.
Effective March 1, 1998, the company discontinued its Medicaid product in an 18-county central Missouri region. The decision to discontinue was made due to what the company believes were unacceptable terms proposed by the State of Missouri. As of December 31, 1997, the company had approximately 5,100 members enrolled in its Medicaid product.
In addition, the company's Credit Agreement described elsewhere herein provides that the company's subsidiaries, including BlueCHOICE, may not issue surplus notes to the company in an aggregate principal amount in excess of $40 million. As the aggregate principal amount of surplus notes issued by such subsidiaries to the company currently approximates $40 million, any additional funding required by any subsidiaries of the company, including BlueCHOICE, as a result of additional losses or reserves associated with the MCHCP contract, or otherwise, must, absent approval of the lenders under the Credit Agreement, be funded from sources other than surplus notes.
In addition to internal Year 2000 implementation activities, some of the company's computer systems and business operations are provided by outside suppliers. As part of the program, the company is asking for the readiness status of its critical vendors, providers and suppliers. There can be no assurance that there will not be an adverse effect on the company if critical vendors, suppliers and providers, such as major health care providers, third parties performing delegated services or utility companies do not convert their systems in a timely manner and in a way that is compatible with the company's systems.