Crusader's direct earned premium, earned ceded premium, and ceding com`mission are as follows:
The accurate establishment of loss and loss adjustment expense reserves is a difficult process, as there are many factors that can ultimately affect the final settlement of a claim and, therefore, the reserve that is needed. Estimates are based on a variety of industry data and on the Company's current and historical accident year claims data, including but not limited to reported claim counts, open claim counts, closed claim counts, closed claim counts with payments, paid losses, paid loss adjustment expenses, case loss reserves, case loss adjustment expense reserves, earned premiums and policy exposures, salvage and subrogation, and unallocated loss adjustment expenses paid. Many other factors, including changes in reinsurance, changes in pricing, changes in policy forms and coverage, changes in underwriting and risk selection, legislative changes, results of litigation and inflation are also taken into account.
Page Number ------ Report of Independent Registered Public Accounting Firm 39
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Unico American Corporation and subsidiaries as of December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles.
(2) Included in short-term investments for the year ended December 31, 2005 is a deposit assigned and held by Travis County. The deposit was filed with the superior courts in lieu of a bond in order to stay execution of judgments and to allow the Company to appeal the judgment in these matters.
Concentration of Risks - ---------------------- In 2006 100% of Crusader's gross premium written was derived from California. In 2006 approximately 69% of the $1,136,306 commission and fee income from the Company's health and life insurance program was from CIGNA HealthCare medical and dental plan programs.
Year ended December 31 ---------------------- 2006 2005 ---- ---- Premiums and commission receivable $2,177,694 $2,690,402 Premium finance notes receivable 3,669,606 4,057,137 --------- --------- Total premiums and notes receivable 5,847,300 6,747,539 Less allowance for doubtful accounts 5,551 6,746 --------- --------- Net premiums and notes receivable $5,841,749 $6,740,793 ========= =========
NOTE 9 - ACCRUED EXPENSES AND OTHER LIABILITIES -------------------------------------- Accrued expenses and other liabilities consist of the following:
The changes in the number of common shares under option are summarized as follows: Weighted Average Options Exercise Price ------- -------------- Outstanding at December 31, 2003 277,000 $5.216 Options granted - - Options exercised (2,500) 3.110 Options terminated (2,500) 3.110 ------- Outstanding at December 31, 2004 272,000 5.254 Options granted - - Options exercised (4,000) 3.110 Options terminated - - ------- Outstanding at December 31, 2005 268,000 5.286 Options granted - - Options exercised (95,750) 3.270 Options terminated - - ------- Outstanding at December 31, 2006 172,250 $6.407 =======