At December 31, 2000, the Company holds a $156,000 mortgage loan from a real estate limited partnership in which the Company also has a 20% equity interest. The mortgage loan, maturing March 31, 2002, permits revolving credit advances,
Redemption of Citizens Security preferred stock as necessary, with such redemption also requiring approval by the Kentucky Department of Insurance
the market value of the Company's investments, including stock market performance and prevailing interest rate levels (see the Cash Flow and Liquidity section of Item 7);
Nature of Operations. The Company engages primarily in the business of life insurance, annuities and accident and health insurance through Citizens Security and United Liberty ("the Life Insurance Subsidiaries"). The Life Insurance Subsidiaries offer life, fixed-rate annuity and accident and health insurance products to individuals and groups through independent agents. Kentucky Insurance was acquired during 1999 (see Note 2) and is licensed as a property and casualty insurer in four states. The Company is planning to offer home service fire and casualty insurance coverage; however, Kentucky Insurance currently has no business inforce. Corporate Realty manages the Company's real estate along with two other properties affiliated with the Company's Chairman.
Investments. The Company classifies fixed maturities and equity securities as "available-for-sale". Available-for-sale securities are carried at fair value, with unrealized gains and losses included in accumulated other comprehensive income (loss) , net of applicable deferred taxes and adjustments to related deferred policy acquisition costs.
Cash and cash equivalents consist of highly liquid investments with maturities of three months or less at the date of purchase and are also carried at cost which approximates fair value.
Comprehensive Income. As of January 1, 1998, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income". SFAS No. 130 establishes new rules for the reporting and display of comprehensive income and its components; however, the adoption of this Statement had no impact on the Company's net income or total shareholders' equity. SFAS No. 130 requires unrealized gains or losses on the Company's available-for-sale securities to be included in other comprehensive income.
The cost and fair value of investments in fixed maturities and equity securities are shown below. The cost amounts are adjusted for amortization of premium and accretion of discount on fixed maturities and for write-downs of securities whose decline in value is believed to be other than temporary.
Revenue: Home Service Life $ 9,036,005 $ 8,745,144 $ 8,315,665 Broker Life 6,090,607 6,003,025 5,341,104 Preneed Life 5,584,207 3,614,758 2,099,584 Dental 7,933,598 7,141,409 6,435,680 Other Health 1,469,316 1,383,437 1,409,483 - --------------------------------------------------------------------------- Segment Totals 30,113,733 26,887,773 23,601,516 Net realized investment gains, 1,180,879 9,375,339 3,675,489 net of expenses - --------------------------------------------------------------------------- Total Revenue $31,294,612 $36,263,112 $27,277,005 - ---------------------------------------------------------------------------
Premiums: Life insurance .$ 13,300,690 $ 914,541 $ 57,236 $ 12,443,385 0.5% Accident & health insurance 8,539,338 137,895 --- 8,401,443 0.0% - -------------------------------------------------------------------------------- Total ..........$ 21,840,028 $ 1,052,436 $ 57,236 $ 20,844,828 0.3% - --------------------------------------------------------------------------------