felanders/preprocessed huggingface dataset:
Management’s narrative addresses the financial condition of PALAC as of December 31, 2012, compared with December 31, 2011, and its results of operations for the years ended December 31, 2012 and 2011.
Total gross profits include both actual experience and estimates of gross profits for future periods. We regularly evaluate and adjust the related DAC and DSI balances with a corresponding charge or credit to current period earnings for the impact of actual gross profits and changes in our assumptions regarding estimated future gross profits on our DAC and DSI amortization rates. Adjustments to the DAC and DSI balances include the impact to our estimate of total gross profits of the annual review of assumptions, our quarterly adjustments for current period experience, and our quarterly adjustments for market performance. Each of these adjustments is further discussed below in “Annual assumptions review and quarterly adjustments.”
The quarterly adjustments for market performance referred to above reflect the impact of changes to our estimate of total gross profits to reflect actual fund performance. A significant portion of gross profits for our variable annuity contracts are dependent upon the total rate of return on assets held in separate account investment options. This rate of return influences the fees we earn, costs we incur associated with the guaranteed minimum
For a discussion of adjustments to the reserves for GMDBs and GMIBs for the years ended December 31, 2012 and 2011, see “-Results of Operations”.
Revenues decreased $243 million, primarily driven by a $155 million decrease in realized investment gains/losses, net, primarily due to an unfavorable variance related to our non-reinsured living benefit features, as discussed above, as well as by lower realized gains on sales of invested assets. Net investment income decreased $28 million as a result of lower average annuity account values in the general account, primarily resulting from net transfers from the fixed-rate option in the general account to the separate accounts relating to favorable markets and the asset transfer feature. Policy charges and fee income decreased $28 million driven by lower fee and asset management income primarily driven by an decrease in average variable annuity asset balances invested in separate accounts, as discussed above, partially offset by a favorable variance from lower market value adjustments paid to contractholders related to the Company’s market value adjusted investments option (“MVA”) option primarily due to differences in market conditions and transfers of assets related to the asset transfer feature. Asset management fees decreased $26 million, primarily due to lower average separate account assets mainly driven by negative net flows.
Pursuant to Instruction I(2)(a) to Form 10-K, the Company elects to omit Management’s Discussion and Analysis of Financial Condition and Results of Operations. Below is an analysis of the results of operations explaining material changes in the Consolidated Statements of Income between the years ended December 31, 2006 and December 31, 2005.
The Company incurred realized losses for other-than-temporary impairments of $0.8 million and $5.5 million for the years ended December 31, 2006 and 2005, respectively. The Company discontinued the accrual of income on all of its holdings for issuers in default. Investment income would have increased by $0.1 million for the year ended December 31, 2006 if these holdings were performing. There was no impact on investment income for the year ended December 31, 2005.
Other operating expenses - remained relatively consistent; were $23.0 million and $23.5 million for the years ended December 31, 2006 and 2005, respectively.
For the year ended December 31, 2006, the Company will file a stand-alone federal income tax return, as it did for years 2005 and 2004. Taxes are computed under SFAS No. 109, "Accounting for Income Taxes." Deferred income taxes are generally recognized when assets and liabilities have different values for financial statement and tax reporting purposes, and for other temporary taxable and deductible differences as defined by SFAS No. 109, "Accounting for Income Taxes." These differences relate primarily from policy reserves, policy acquisition expenses and unrealized gains or losses on investments.
In May of 2005, the FASB issued FASB Statement No. 154, "Accounting Changes and Error Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3" ("SFAS No. 154"). SFAS No. 154 is effective for fiscal years beginning after December 15, 2005. SFAS No. 154 changes the requirements for the accounting and reporting of a change in accounting principle and applies to all voluntary changes in accounting principle. SFAS No. 154 eliminates the requirement in Accounting Principles Board Opinion No. 20 to include the cumulative effect of a change in accounting in the income statement in the period of change and requires retrospective applications to prior periods’ financial statements of changes in accounting principle, unless it is impracticable to determine either the specific period effects or the cumulative effect of the change. SFAS No. applies to changes required by new accounting pronouncements only when the pronouncement does not include specific transition guidance. The adoption of SFAS No. 154 did not have a material impact on the Company’s consolidated financial statements.
Net deferred income tax (liabilities) assets represent the tax effects of temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes. The components of the Company’s deferred tax assets and liabilities as of December 31 were as follows (in 000’s):
The following is a tabulation of the unaudited quarterly results of operations (in 000’s).
As of December 31, 2000, the Partnership's liquid assets consisting of cash, cash equivalents and marketable securities were $15.5 million, a decrease of $1.3 million from December 31, 1999. This decrease was due primarily to distributions to Partners of $22 million, coupled with the investment of available cash in real estate assets. Offsetting these cash outflows was $12.9 million in proceeds received from the sale of one of the Partnership's office properties, $8.2 million in proceeds from the sale of the Partnership's entire investment in ProLogis REIT shares, and net cash flow from property operations. Other sources of liquidity include interest from short-term investments and dividends from REIT shares.
As discussed previously, the Partnership made $22 million in distributions to the Partners during 2000 from excess cash. Additional distributions may be made to the Partners during 2001 based upon the percentage of assets invested in short-term obligations, taking into consideration anticipated cash needs of the Partnership including potential property acquisitions, property dispositions and capital expenditures. Management anticipates that its current liquid assets and ongoing cash flow from operations will satisfy the Partnership's needs over the next twelve months and the foreseeable future.
The following is a brief discussion of the Partnership's results of operations for the years ended December 31, 2000, 1999, and 1998.
(a) Represents the total number of patients admitted (in the facility for a period in excess of 23 hours) to the Company's hospitals and is used by management and certain investors as a general measure of inpatient volume. (b) Equivalent admissions are used by management and certain investors as a general measure of combined inpatient and outpatient volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the sum of gross inpatient revenue and gross outpatient revenue and then dividing the resulting amount by gross inpatient revenue. The equivalent admissions computation "equates"
Net loss was $7.4 million for the year ended December 31, 1999 compared to a loss of $21.8 million for the year ended December 31, 1998. The year ended December 31, 1998 included a $4.1 million after-tax loss from the Company's discontinued home health operations, primarily due to declines in Medicare rates of reimbursement under the Balanced Budget Act and declines in home health visits. The Company's home health operations were divested during 1998.
During the fourth quarter of 1998, the Company decided to sell three hospital facilities that were identified as not compatible with the Company's operating plans based upon management's review of all facilities and giving consideration to current and expected market conditions and the current and expected
The $65 million revolving credit facility is available for working capital and other general corporate purposes, and any outstanding amounts thereunder will be due and payable on November 11, 2004. No amounts were outstanding under this facility as of February 29, 2000.
The Company did not experience any material disruptions or other effects caused by the Year 2000 problem, nor does the Company expect to experience any material disruptions or other effects caused by the Year 2000 problem in the future.
The Company recorded an increase in the loss ratio in the medical stop-loss line of business for 2013 due to an unfavorable reserve development related to business written with a certain producer. We have ceased writing new business with this producer. There was also adverse development on two non-owned MGU programs, both of which have been terminated, one effective September 30, 2013 and the other December 31, 2013.
The Group Disability segment had a favorable development of $4.3 million primarily related to benefits and claims experience related to the 2012 LTD and DBL businesses.
Significant decrease in individual major medical premiums in 2014 as we have exited this line of business, however, we had negative underwriting results on this line of business in 2013 so less premium may improve our underwriting margins although generate decreases in administrative revenues;
Net investment income includes investment income in the form of interest and dividend income and net realized gains from the sale of portfolio securities. Net investment income of $33.2 million in 1997 represents an increase of $15.7 million from 1996, inclusive of a $14.0 million increase in realized gains, net. Realized gains in 1997 include a $5.7 million gain on the sale of company-owned life insurance policies as well as additional 1997 net realized gains from the liquidation of equity securities due to the company's intent to increase its holdings of fixed income securities and the company's decision to repay $15.0 million of its debt.
Under applicable state regulations, certain of the company's subsidiaries are required to retain cash generated from their operations. After giving effect to such restrictions and the surplus notes issued to the company by BlueCHOICE as described in the preceding paragraph, the company had approximately $8.3 million in cash and investments available for general corporate purposes without regulatory approval. The decline in this figure from $48.5 million as of December 31, 1996 is primarily due to the funding requirements of the company's HMO subsidiary related to the MCHCP loss reserve as more fully explained in Note 13 entitled "Contingencies - Litigation with MCHCP" of Part II, Item 8.
Government premiums rose $553 million or 34 percent to $2.2 billion for the year ended September 30, 1995 from $1.6 billion in 1994. Enrollment gains, predominantly in the Secure Horizons programs, accounted for $492 million or 89 percent of the increase. In fiscal 1996, the government membership growth rate is expected to be less than the 32 percent increase experienced in 1995. The remainder of the premium increase is attributable to incremental acquisitions and premium rate increases averaging one percent. In November 1995, the Company was advised by HCFA that effective January 1996, its HMOs will receive a weighted average premium rate increase of approximately 5.6 percent. Because pending federal legislation may change Medicare reimbursement rates, there can be no assurance that these rate increases will be received.
Capitalized leases relate to equipment included in the accompanying consolidated balance sheets at a cost of $18.4 million and $17.5 million at September 30, 1995 and 1994, respectively. Accumulated amortization related to this equipment totaled $12.8 million and $8.2 million at September 30, 1995 and 1994, respectively. These leases require future payments including interest totaling $8.4 million at September 30, 1995 through the end of the lease terms.
The provision for income taxes for the years ended September 30, 1995, 1994 and 1993, consists of the following components:
Grants under the 1985 Plan and 1989 Director Plan were suspended. The total number of shares of common stock which may be granted as incentive stock options, non-qualified stock options ("NQSOs"), stock appreciation rights ("SARs") and stock payments under the 1989 Employee Plan is approximately 653,500. Options may be granted for a term of up to ten years at a price not less than 100 percent of the fair market value of the common stock at the time of grant.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of PacifiCare Health Systems, Inc. as of September 30, 1995 and 1994, and the consolidated results of its operations and its cash flows for each of the three years in the period ended September 30, 1995 in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
OFFICE PARK IN FLINT, MICHIGAN This investment consists of twelve single-story buildings located in an office park in Flint, Michigan. The property contains 113,393 rentable square feet. It is currently 89% occupied by 50 tenants.
Rental income at the Morristown office building increased by approximately $139,000 in 1994 due to a retroactive rent adjustment for Midlantic Bank and scheduled rent step-ups and the ending of free rent periods for various tenants.
Beginning July 1, 1994, the Partnership is receiving all of the revenue from the property related to the foreclosed Flint mortgage loan. This amounted to approximately $675,000 for the last six months of 1994.
During 1994, the Partnership sold its 50% interest in the two Unit warehouses located in Atlanta and the ones located in Desoto, TX; Fort Worth, TX; Shreveport, LA; Bedford Park, IL; and Normal, IL. The proceeds, net of related costs, were approximately $19,020,000, resulting in a realized loss of approximately $1,237,000. Realized loss is the difference between net sales proceeds and the cost of the properties. The Partnership had already recognized decreases in the properties' market values in prior periods, so the net sales proceeds actually exceeded the values at which the properties were carried on the sale date by approximately $445,000. The proceeds from the sale are expected to be reinvested during 1995. The Partnership still owns a 50% interest in the four warehouses located in Jacksonville, FL. These are not currently being marketed for sale.
Total revenue increased 28% to $1.6 billion in 2005 and 36% to $1.3 billion in 2004, driven by significant growth in net earned premium and investment income, which more than offset the expected decrease in fee and commission income in 2005. Approximately 6% of the increase in 2005 revenue and 16% of the increase in 2004 revenue was due to the acquisition of subsidiaries. We expect total revenue to continue to grow in 2006.
Aviation - The 2005 hurricanes increased the net loss ratio 5.0% and the 2004 hurricanes increased the net loss ratio 6.5%. The 2005 net loss ratio also includes the positive impact from the release of redundant reserves related to the 2004 hurricanes. Excluding the impact of the hurricanes, 2005 had worse than expected underwriting experience due to some unusually large international losses.
The following table details the characteristics and major actuarial assumptions by major products within our lines of business utilized by our actuaries in the determination of actuarial point estimates and ranges. We considered all major lines of business written by the insurance industry when determining the relative characteristics of claims duration, speed of loss reporting and reserve volatility. Other companies may classify their own insurance products in different lines of business or utilize different actuarial assumptions.
The reserves for reported losses related to our primary business and certain reinsurance assumed are initially set by our claims personnel or independent claims adjusters we retain. The reserves are subject to our review, with a goal of setting them at the ultimate expected loss amount as soon as possible when the information becomes available. Reserves for reported losses related to other reinsurance assumed are recorded based on information supplied to us by the ceding company. Our claims personnel monitor these reinsurance assumed reserves on a current basis and audit ceding companies’ claims to ascertain that claims are being recorded currently and that net reserves are being set at levels that properly reflect the liability related to the claims.
Income tax expense as a percentage of pre-tax income was 26% in 1993. In 1992 the tax provision was a benefit due to the re-estimation of deferred tax liabilities based upon the accumulation of identified temporary differences and applying the current effective tax rates with the resulting reduction in such deferred tax amounts being recorded in 1992 operations.
The Company has invested and deferred approximately $859,000 in option fees and costs of various regulatory studies, including environmental, water, and archaeological studies. The Company is seeking approval from the federal government and the California Cemetery Board to operate a cemetery. The development of the cemetery will be financed internally as well as through a private offering. Initial development of 35 acres to operate as a cemetery would cost approximately $500,000.
The Company's realized gains and losses in investments and provisions for losses are summarized as follows:
Net investment income includes net investment income earned by the restricted assets of the cemeteries and mortuaries of approximately $515,000, $426,000 and $520,000 for 1994, 1993, and 1992, respectively.
A portion of the life insurance subsidiaries income earned prior to 1984 was not subject to current taxation but was accumulated for tax purposes, in a "policyholders' surplus account." Under provisions of the Internal Revenue Code, the policyholders' surplus account was frozen at its December 31, 1983 balance and will be taxed generally only when distributed. As of December 31, 1994, the policyholders' surplus accounts approximated $650,000 for Security National Life Insurance Company and $3,365,000.
On December 10, 1992, the Company's Board of Directors elected to make a Tender Offer to all shareholders of the Company's Class A and Class C Common Stock with less than twenty-five shares and ninety-five shares respectively. The offering price was $2.38 cash for Class A Common Stock and $.48 cash for Class C Common Stock for shareholders' of record on January 15, 1993. The purpose of the Tender Offer was to reduce the high cost of servicing small shareholders and enable such shareholders to dispose of their shares without incurring odd lot transaction costs. The transaction has been reflected in the balance sheet as of December 31, 1992.
Board of Directors E. Hürlimann, Honorary Chairman Paul Keller, Chairman fHans Sulzer, Deputy Chairman Max Huber C. J. Abegg Paul Ruegger R. S. Hegner Ernst Froelich Hans Schindler
Managers G. de Bardel K. Hasler F. Niquille V. Tisi H. Wüst
In view of the constant expansion of our operations the Board considered that an extension of our General Manage­ ment was called for. With effect from the 1st July 1958 Mr. M. Eisenring was appointed General Manager.
New York - 28,000 square feet Chicago - 3,500 square feet San Francisco - 2,000 square feet
the substantial losses in the insurance industry arising from the events of September 11, 2001 caused rates in the insurance industry to rise. However, new capital has since flowed into the insurance industry. To the extent that more capital is available, there may be downward pressure on premium rates as a result of increased supply. These factors affecting rates for the industry in general impact the rates we are able to charge. Any significant decrease in the rates for property and casualty insurance could reduce our net income. While rates impact our net income, there is not necessarily a direct correlation between the level of rate increases or decreases and net income because other factors, such as the amount of catastrophe losses and the amount of expenses, also affect net income.
Net income for the year ended December 31, 2004 was $14.6 million or $1.48 per diluted share, as compared to $17.1 million, or $1.74 per diluted share, for the year ended December 31, 2003. The decrease in net income in 2004 compared to 2003 was primarily attributable to lower investment yields, primarily from limited partnerships, an increase in interest expense arising from the Company's issuance of $100 million of 6.5% senior notes on March 11, 2004 and the expenses incurred by the Company in connection with compliance with section 404 of the Sarbanes-Oxley Act.
Other liabilities increased to $26.6 million as of December 31, 2004 from $15.4 million for 2003 due in large part to increases in funds received from reinsurers and interest expense payable on the Company's 6.5% senior notes.
Reserves, Fire, Marine and Accident Dep*-: for unexpired risks , outstanding losses ... ... ..
Benefits for 1994 decreased as a percentage of premium to 92.1% from 94.7% in 1993. The decrease in benefits was due to a decrease in accident and health insurance benefits incurred by Loyal of approximately $0.9 million. In addition, life insurance benefits at Loyal decreased by approximately $0.7 million due to improved claims experience.
Benefits for 1992 decreased as a percentage of premium from 95.9% in 1991 to 90.4% in 1992. The decrease in benefits was due primarily to lower levels of death and health claims in 1992 as compared to 1991.
derivative instruments. For instance, the Company has not owned such mortgage-backed instruments as interest only, principal only, or inverse floaters.
Net realized investment gains increased by $6.9 million, or 579%, to $8.1 million for the year ended December 31, 2020, as compared to $1.2 million for the year ended December 31, 2019. The increase was attributed to the company harvesting gains from the increase in value of its bond portfolio in 2020. The Company also experienced gains in its equity securities with the market increasing in value during the second half of 2020. Some of these equity gains were realized upon sale.
For the year ended December 31, 2020, the Company reported $6,000 of current federal income tax expense and $0 of current state income tax expense. The Company reported a deferred tax benefit of $0 and $940,000 for the years ended December 31, 2020 and 2019, respectively. The deferred tax benefit in 2019 was a result of the change in the net deferred tax asset valuation allowance related to the changes in unrealized gains. No such impact occurred in 2020. The Company in 2020 had $808,000 of taxable income, which was fully offset by the utilization of the net operating losses carried forward from previous years.
Financing Activities. Cash provided by financing activities for the years ended December 31, 2020 and 2019, was $5.1 million and $6.3 million, respectively. The decrease of $1.2 million in 2020 of cash provided by financing activities was due to no issuance of common stock in 2020, and $5.0 million issuance of common stock in 2019. This decrease was offset by an increase in borrowings from the Company’s line of credit.
Refer to Note 1 ~ Summary of Significant Accounting Policies: Recently Issued Accounting Guidance of the Notes to the Consolidated Financial Statements for detailed information.
Fireside occupies 34 leased facilities with an aggregate square footage of approximately 181,000 in 7 states (including consumer finance branches and main office buildings). The latest expiration date of the existing leases is in November 2011.
NET INCOME The following table sets forth net income for the periods shown:
o Other long-term investments -- at a variety of methods similar to those listed above, as deemed appropriate for the specific investment.
Protective uses interest rate swap contracts to convert certain investments from a variable to a fixed rate of interest. At December 31, 1997, related open interest rate swap contracts with a notional amount of $95.3 million were in a $0.1 million net unrealized loss position. At December 31, 1996, related open interest rate swap contracts with a notional amount of $150.3 million were in a $0.7 million net unrealized loss position.
The reconciliations of net income and stockholder's equity prepared in conformity with statutory reporting practices to that reported in the accompanying consolidated financial statements are as follows:
In 1997, gross gains on the sale of investments available for sale (fixed maturities, equity securities and short-term investments) were $21.3 million and gross losses were $23.5 million. In 1996, gross gains were $6.9 million and gross losses were $11.8 million. In 1995, gross gains were $18.0 million and gross losses were $11.8 million.
The amortized cost and estimated market values of Protective's investments classified as available for sale at December 31 are as follows:
On August 6, 1990, PLC announced that its Board of Directors approved the formation of an Employee Stock Ownership Plan ("ESOP"). On December 1, 1990, Protective transferred to the ESOP 520,000 shares of PLC's common stock held by it in exchange for a note. The outstanding balance of the note, $5.4 million at December 31, 1997, is accounted for as a reduction to stockholder's equity. The stock will be used to match employee contributions to PLC's existing 401(k) Plan. The ESOP shares are dividend paying. Dividends on the shares are used to pay the ESOP's note to Protective.
GUARANTEED INVESTMENT CONTRACTS DIVISION. The Guaranteed Investment Contracts ("GIC") Division markets GICs to 401(k) and other qualified retirement savings plans. The Division also offers related products, including guaranteed funding agreements offered to the trustees of municipal bond proceeds, floating rate contracts offered to trust departments, and long-term annuity contracts offered to fund certain state obligations.
(d) Diluted book value per share is a non-GAAP measure based on total shareholders’ equity divided by the number of common shares and common share equivalents outstanding at the end of the period, using the treasury stock method. Common share equivalents include options and warrants which are dilutive when the market price of the Company’s shares exceeds the exercise price of the options or warrants. Diluted shares outstanding were 72,172,980 at December 31, 2005, 66,729,185 at December 31, 2004, 68,444,576 at December 31, 2003, 56,016,679 at December 31, 2002 and 60,000,000 at December 31, 2001. Common shares outstanding include 274,036 vested restricted share units for purposes of the December 31, 2005 book value per share calculation. We believe that this is an effective measure of the per share value of the Company as it takes into account the effect of all outstanding dilutive securities.
The section of our 2005 Annual Report to Shareholders entitled ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ is incorporated herein by reference and is filed as Exhibit 13.1 to this Form 10-K.
Direct premiums written decreased for the year ended December 31, 1996 when compared to the year ended December 31, 1995 by 21.6% due primarily to the termination of two significant customers with extremely poor loss experience, premium rate competition and the lead paint exclusion placed on First Central Insurance's general liability and commercial multiple peril policies for eight months during 1996. Direct premiums written increased from 1994 to 1995, by 10.2% primarily due to the expansion of First Central Insurance's markets and concentrated efforts by First Central Insurance's marketing department.
GAAP and SEC Staff Accounting Bulletin No. 59 require the portion of the unrealized loss of an individual security to be recognized as a realized loss in the accounting period when the holder determines that such portion of the decline in the market value is other than temporary. Temporary
The year to year estimation and re-estimation of loss and loss adjustment expense reserve requirements is an inexact science. Reserves do not represent an exact calculation of liability, but rather are estimates involving actuarial and statistical projections at a given time of First Central Insurance's expectations of the ultimate costs of the settlement and administration of claims based on facts and circumstances then known, predictions of future events, estimates of future trends in claims frequency and severity and other variable factors such as inflation and new theories of liability. It is First Central Insurance's practice to maintain reserves at or near the middle point of an "actuarial reasonableness range" established by its independent actuary to evaluate the adequacy of reserves. To the extent that future changes in known data do not take place precisely in accordance with an insurer's historically developed loss reserving assumptions, such reserves, when viewed as of a particular point in time, most likely will be either deficient, i.e., lower than the amount needed to cover known loss and loss adjustment expenses, or redundant, i.e., greater than the amount required with respect thereto. See "Business -- Loss and Loss Adjustment Expense Reserves."
For First Central Insurance, taxes payable increased due to a requirement of the 1990 Tax Act to reduce deductions for paid and unpaid losses by the estimated salvage and subrogation recoverable on those losses. That change was effective for First Central Insurance's 1990 tax year, but the 1990 Tax Act provided a fresh-start adjustment that permits 87% of the estimated salvage and subrogation recoverable as of December 31, 1990 to be excluded from taxable income.
Net Investment Income and Net Realized (Losses) Gains on Investment -
At December 31, 2002, the percentage, based on estimated fair value, of total public and private placement fixed maturity securities that were investment grade (NAIC Designation 1 or 2) was 84.1% compared to 87.2% for December 31, 2001. At December 31, 2002, the fixed maturity securities portfolio was comprised, based on estimated fair value, of 53.6% in public fixed maturity securities, and 46.4% in private fixed maturity securities, compared to 44.3% in public fixed maturity securities and 55.7% in private fixed maturity securities at December 31, 2001.
The Company’s portfolio of fixed maturity securities is comprised of public and private securities. Public securities are those that are registered with the Securities and Exchange Commission (“SEC”). Private securities are issued under an exemption from registration under the Securities Act of 1933. It is generally recognized that publicly traded securities are more liquid than privately traded securities. The Company classifies all of its investments in fixed maturity securities as “available for sale”. Accordingly, the carrying value of such securities reflects their fair value at the balance sheet date. Fair value for public securities is based on sales prices or bid-and-asked quotations currently available on a securities exchange registered with the Commission or in the over-the-counter market, provided that those prices or quotations for the over-the-counter market are publicly reported by the National Association of Securities Dealers Automated Quotations system (“NASDAQ”). Fair value for private securities is generally determined by discounting their prospective cash flows at a discount rate. The discount rate for each issue is the sum of two rates. The first component is the yield to maturity of a U.S. Treasury security with a maturity comparable to the average life of the issue being priced. The second component is a credit spread assigned from a matrix based on credit rating and average life. This matrix is created monthly based on data from two major broker dealers. The quality ratings on the issues being priced are reviewed and updated quarterly.
Management, having the authority to approve the action, commits the organization to a plan to sell the property.
The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity dates (excluding scheduled sinking funds) as of December 31, 2002 are as follows:
During 2002, 2001 and 2000, the Company recognized $0.3 million, $0.5 million, and $0.7 million, respectively, of interest income on impaired loans.
The estimated fair values of the Company’s financial instruments approximate their carrying amounts except for mortgage loans, long-term debt and investment-type contracts. The methods and assumptions utilized in estimating the fair values of the Company’s financial instruments are summarized as follows:
As of December 31, 2002 and 2001, the mortgage loan portfolio by property type is as follows:
During 1999, Swiss Re successfully completed several Administrative ReinsuranceSM (Admin Re) transactions in the US. Admin Re involves the acquisition of closed blocks of in-force life and health business. Admin Re activity during 1999 included transactions involving Lone Star Life, Royal Maccabees Life and Allied Life.
The Board of Directors have authorised a second share-repurchase programme of up to CHF 1 billion, subject to market conditions. In 1999 no shares were repurchased under this programme. Swiss Re started buying shares in February 2000 and has so far repurchased 72 650 shares for CHF 195.3 million. Subject to approval by the Annual General Meeting, the share capital will be reduced and the appropriate number of shares cancelled.
In 1999, the industry’s loss burden increased dramatically because of an extraordinary number of both natural catastrophes and large man-made claims. An unprecedented sequence of big and costly natural disasters made the year – in terms of insured catastrophe losses – the second-worst in history for the world-wide insurance and reinsurance market and the worst for Swiss Re Group.
Innovation was also evident in a private equity transaction, whereby Swiss Re New Markets combined insurance principles with financial market instruments to provide principal protection for a private equity bond, opening up this asset class to new investors. New protections of embedded value for life insurers and structured financing solutions for global insurers have been introduced, helping them to improve their capital management, particularly in mergers and acquisitions, and in the run-off of discontinued businesses.
3 exchangeable for shares of Swiss Re, Credit Suisse Group or Novartis at investors’ discretion
I Investments 1. Land and buildings 2. Investments in subsidiaries and affiliated companies 3. Loans to subsidiaries and affiliated companies 4. Shares 5. Fixed income securities and registered debt instruments 6. Loans 7. Mortgages 8. Time deposits 9. Deposits with ceding companies
Based on the information at our disposal, Credit Suisse Group owned 1 251 093 registered shares of Swiss Reinsurance Company on 5 May 2000, representing 8.49% of the total share capital.
Current investment income Realised gains/losses Unrealised gains/losses Investment management charges Investment result
Independence Holding Company, a Delaware corporation ("IHC"), is a holding company engaged principally in the life and health insurance business through its wholly-owned subsidiaries, Standard Security Life Insurance Company of New York ("Standard Life"), Madison National Life Insurance Company, Inc. ("Madison Life") and First Standard Security Insurance Company ("First Standard") and their subsidiaries (collectively, the "Insurance Group"). IHC and its subsidiaries (including the Insurance Group) are collectively referred to as the "Company." All remaining income, principally income from parent company liquidity and expense items associated with parent company activities (including the Company's remaining real estate holdings) are included in Corporate (see Item 1 for a discussion of the business).
Amortization of deferred policy acquisition costs and general and administrative expenses for the Insurance Group increased $4.8 million. Madison Life's expenses increased $3.8 million. Standard Life's expenses increased $.6 million and IndependenceCare's expenses increased $.4 million due to start-up costs. The increase at Madison Life is primarily due to $.9 million in general expenses from the MGU in which Madison Life acquired a controlling interest effective December 31, 1997 and an increase in net commission expense of $2.3 million due to acquisitions; a $.1 million increase in general expenses; and an increase of $.5 million in premium taxes due to the increase in premiums. The increase at Standard Life is primarily due to: a $.2 million increase in net commission expense; and a $.7 million increase in general expenses due to an increase in salary and consulting expense as a result of expansion into new products. Such decreases were partially offset by: a $.3 million reduction in premium taxes due to lower rates and a reduction in premiums.
Operating income for the year ended December 31, 1998 decreased $1.1 million to a loss of $.6 million as compared to income of $.5 million for the year ended December 31, 1997. Operating income includes realized and unrealized losses of $.1 million in 1998. Included in the 1997 results of Corporate is the $1.0 million gain from the real estate sale. Excluding realized and unrealized gains and the real estate gain, Corporate had a loss of $.5 million in both 1998 and 1997. Investment income decreased $.2 million from 1997 due to lower returns on certain hedged equity investments in 1998. Other income increased $.2 million as a result of fee income earned from the termination of the guarantee of certain subordinated indebtedness of Zimmerman. Selling, general and administrative expenses remained constant.
The analysis of our results of operations is based upon our financial statements, which have been prepared in accordance with GAAP. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
We account for income taxes in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, or SFAS 109. The deferred income tax assets and/or liabilities are determined by multiplying the differences between the financial reporting and tax reporting bases for assets and liabilities by the enacted tax rates expected to be in effect when such differences are recovered or settled. The effect on deferred income taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances on deferred income tax assets are estimated based on our assessment of the realizability of such amounts.
The following table presents certain information with respect to our gross unrealized losses related to our investments in general account debt securities. Applicable deferred policy acquisition costs and deferred income taxes reduce the effect of these losses on our comprehensive income.
(Refer to Note 1- Significant Reporting and Accounting Policies to the Consolidated Financial Statements.)
As compared with loss and LAE reserves held at December 31, 2016, our best estimate of reserve ranges using indicated results from utilized estimates of loss and LAE could range from a deficiency of 8%, or $54.6 million, to a redundancy of 11%, or $71.4
of development from both periods, the statutory combined ratio increased by 1.3 points for the twelve months ended December 31, 2015, compared with 2014.
Consolidated Statements of Cash Flows: Years ended December 31, 2016, 2015, and 2014
Direct premiums written were reduced by specific reinsurance cessions (1997, 1996 and 1995), the 50 percent AmRe Quota Share Reinsurance Agreement for the Company's Florida workers' compensation business (1997, 1996 and 1995), and the 65 percent Chartwell Quota Share Reinsurance Agreement (effective October 1, 1996 for business written primarily outside the state of Florida), which decreased to 60 percent effective January 1, 1997.
* The tax equivalent yield was computed using a 35% tax rate, which represents the effective statutory tax rate for the Company
Since January 1999, the Company has been testing its system using Y2K dates and has not experienced any difficulties or problems. Any policy written with an annual collection of premium has been successfully processed since January 1999, with no interruption of services.
The Company consists of the Insurers and a non-insurer parent company, Penn Treaty American Corporation ("the Parent"). The Parent directly or indirectly controls 100% of the voting stock of the subsidiary insurers. In the event the Parent is unable to meet its financial obligations, becomes insolvent, or discontinues operations, the Insurers' financial condition and results of operations could be materially affected.
The Company's continued growth is dependent upon its ability to (i) continue marketing efforts to expand its historical markets, (ii) continue to expand its network of agents and effectively market its products in states where its insurance subsidiaries are currently licensed and (iii) fund such marketing and expansion while at the same time maintaining minimum statutory levels of capital and surplus required to support such growth. Management believes that the funds necessary to accomplish the foregoing, including funds required to maintain adequate levels of statutory surplus in the Company's insurance subsidiaries can be met through 1999 by funds generated from its most recent stock offering, the Company's issuance of convertible subordinated debt and from operations. The Company's expects future capital market activities will be necessary to support an ongoing growth.
At December 31, 1998, the accumulated earnings of the Company for Federal income tax purposes included $1,453 of "Policyholders' Surplus", a special memorandum tax account. This memorandum account balance has not been currently taxed, but income taxes computed at then-current rates will become payable if surplus is distributed. Provisions of the Deficit Reduction Act of 1984 do not permit further additions to the "Policyholders' Surplus" account. "Shareholders' Surplus" represents an accumulation of taxable income (net of tax thereon) plus the dividends received deduction, tax-exempt interest, and certain other special deductions as provided by such Act. At
Effective January 1994, PTNA entered into a reinsurance agreement to cede 100% of certain life, accident and health and Medicare supplement insurance to a third party insurer. Total reserve credits taken related to this agreement as of December 31, 1998 and 1997 were approximately $533 and $569, respectively.
See Note 3 of our Consolidated Financial Statements for more information pertaining to this transaction.
Additional information on A&E can be found in the section entitled, “Asbestos and Environmental and Other Run-Off Liabilities”.
Consistent with an available-for-sale designation, we report all investments in our portfolio at fair value with changes in fair value reflected in shareholders’ equity as a separate component of accumulated other comprehensive income. Fair value is determined using the quoted market price of these securities provided by either independent pricing services, or when such prices are not available, by reference to broker or underwriter bid indications. We regularly review our impaired investments (i.e., those debt securities in which fair value is below amortized cost or those equity securities in which fair value is below cost) for a possible other-than-temporary impairment. If we believe a decline in the value of a particular investment is temporary, we record the decline as an unrealized loss in our shareholders’ equity. If we believe the decline is “other than temporary”, we write down the carrying value of the investment and record a realized loss in our consolidated statement of operations. An impairment is considered other-than-temporary unless we have the ability and intent to hold the investment to recovery of fair value up to the cost of the investment, and evidence indicating the cost of the investment is recoverable within a reasonable period outweighs evidence to the contrary. The determination as to whether or not the decline is “other than temporary” principally requires the following critical judgments: i) the circumstances that require management to make a specific assessment as to whether or not the decline is “other than temporary”, such as the time period an investment has been in a loss position and the significance of the decline; and