Net cash used in investing activities was $49.2 million for the year ended December 31, 2013, as compared to net cash provided by investing activities of $0.6 million and net cash used in investing activities of $36.2 million for the years ended December 31, 2012 and 2011, respectively. This $49.8 million increase in cash used by investing activities in 2013, as compared to 2012, was primarily driven by reinvesting funds in excess of cash requirements into fixed maturity and dividend yielding equity securities throughout 2013, whereas in 2012 investment securities that were sold or matured were used to fund the one-time special $2.00 per share dividend, which is reflected in our 2012 financing activities. Contributing to the $49.8 million increase in cash used in investing activities was a $25.5 million increase in the purchase of equity securities. The increase in the purchases of equity securities during 2013 was primarily attributable to reinvesting the proceeds from matured and redeemed fixed maturity securities into dividend yielding common and preferred stocks. Sales of fixed maturity securities and equity securities decreased $21.7 million and $9.8 million, respectively, compared to 2012 primarily as a result of increased sales activity in 2012 to help fund the December 2012 special dividend. Proceeds from maturities and redemptions of fixed maturities increased $19.3 million in 2013 compared to 2012 primarily due to an increase in scheduled maturities. Also, partially offsetting the change in cash used in investing activities was a $6.2 million decrease in the purchases of other investments, which are comprised of limited partnership investments. The $36.8 million increase in cash provided by investing activities in 2012, as compared to 2011, was primarily driven by funding our one-time special $2.00 per share dividend payment in December 2012, as we generated cash for the dividend from matured or sold investments versus reinvesting the cash in other investment securities. Among the significant changes in net cash provided by investing activities in 2012 compared to 2011 were decreases in purchases of fixed maturity investments and equity securities of $200.1 million and $16.6 million, respectively, partially offset by a $113.5 million decrease in the proceeds from maturities and redemptions of fixed maturity investments and a $66.7 million decrease in the proceeds from sales of fixed maturities. In addition to providing liquidity to fund our one-time special dividend, the decreases in investment activity in 2012 were due to a large number of securities obtained as part of the Vanliner acquisition maturing and being subsequently reinvested in 2011. The net purchases of fixed maturities during the year ended December 31, 2012 were primarily concentrated in state and local government obligations and commercial MBS, while the net sales of equity securities during the period were primarily concentrated in exchange traded funds and common stocks.
Contractual Obligations. The following table summarizes our long-term contractual obligations as of December 31, 2013:
In accordance with accounting guidance for other-than-temporary impairments, if management can assert that it does not intend to sell an impaired fixed maturity security and it is not more likely than not that it will be required to sell the security before
The amortized cost and fair value of fixed maturities at December 31, 2013, by contractual maturity, are shown below. Other debt obligations, which are primarily comprised of asset-backed securities other than mortgage-backed securities are categorized based on their average maturity.
Pre-tax net realized gains of $4.5 million during 2011 were primarily generated from net realized gains associated with the sales or redemptions of securities of $7.4 million. The gains on equity and fixed maturity securities were primarily due to favorable market conditions that increased the value of the securities over book value. Offsetting these gains were net losses associated with equity partnership investments of $0.8 million and other-than-temporary impairment charges of $2.1 million. The other-than-temporary impairment charges of $2.1 million are primarily due to a $1.6 million charge on one common stock security due to uncertainty surrounding the timing of recovery as well as the length and extent to which the security had been in an unrealized loss position. The remaining other-than-temporary impairment is due to $0.2 million charges on common stock securities that are likely to be sold in the near future and had unrealized losses prior to the write-down and a $0.3 million credit impairment charge on one mortgage-backed security for which full principal payment is no longer expected.
The statutory capital and surplus of VIC, NIIC-HI and TCC is included in the statutory capital and surplus of NIIC for reporting purposes.
NIIC paid dividends of $10.0 million, $60.0 million and 10.0 million to the Company in 2013, 2012 and 2011, respectively. Of the $60.0 million dividend paid in 2012, $39.0 million was in the form of an extraordinary dividend for which NIIC was required to receive regulatory approval by the State of Ohio. Also, in accordance with statutory restrictions each of the insurance companies’ subsidiaries must meet minimum Risk-Based Capital (“RBC”) levels. At December 31, 2013 NIIC, VIC, NIIC-HI and TCC exceeded the minimum RBC levels and are well in excess of minimum capital requirements set forth by the companies’ respective states of domicile.