The following sets forth the components of consolidated commission income, fees and managing general agent revenue earned for the years ended December 31, 2014, 2013 and 2012 (in thousands):
The following table presents the development of reserves for unpaid losses and loss adjustment expenses from 2005 through 2014 for our insurance company subsidiaries, net of reinsurance recoveries or recoverables. The first line of the table presents the reserves at December 31 for each indicated year. This represents the estimated amounts of losses and loss adjustment expenses for claims arising in that year and all prior years that are unpaid at the balance sheet date, including losses incurred but not reported to us. The upper portion of the table presents the cumulative amounts subsequently paid as of successive years with respect to those claims. The lower portion of the table presents an update of the estimated amount of the previously recorded reserves based upon the experience as of the end of each succeeding year. The estimates are revised as more information becomes known about the payments, frequency and severity of claims for individual years. A redundancy (deficiency) exists when the reestimated reserves at each December 31 is less (greater) than the prior reserve estimate. The cumulative redundancy (deficiency) depicted in the table, for any particular calendar year, represents the aggregate change in the initial estimates over all subsequent calendar years.
Our recent history of recurring losses from operations, our failure to comply with certain financial covenants in our senior secured and subordinated credit facilities, our need to meet debt repayment requirements and our failure to comply with the Illinois Department of Insurance minimum risk-based capital requirements raise substantial doubt about the Company’s ability to continue as a going concern.
Other Intangible Assets, Net • Other intangible assets with indefinite useful lives are tested for impairment annually as of September 30 or more frequently if events or changes in circumstances indicate that the assets might be impaired.
Variable Interest Entities • Affirmative Insurance Holdings Statutory Trust I (“Trust I”), is an unconsolidated trust subsidiary established for the sole purpose of issuing $30.0 million trust preferred securities in 2004. Trust I used the proceeds from the sale of these securities and the Company’s initial capital contribution to purchase $30.9 million of subordinated debt securities from the Company. The debt securities are the sole assets of Trust I, and the payments under the debt securities are the sole revenues of Trust I. The Company’s initial capital contribution consisted of the purchase of 928,000 common securities issued by Trust I for $928,000, which represented 3% of the total dollar amount of subordinated debentures issued.
The following table summarizes the Company’s available-for-sale securities in an unrealized loss position at December 31, 2014 and 2013, the estimated fair value and amount of gross unrealized losses, aggregated by investment category and length of time those securities have been continuously in an unrealized loss position (in thousands):
The table below presents the total amount of receivables due from reinsurers as of December 31, 2014 and 2013 (in thousands):
The Company’s long-term debt instruments and balances outstanding at December 31, 2014 and 2013 were as follows (in thousands):
Stock Options • There were no stock option awards granted during 2014. In prior years, the Company used the modified Black-Scholes model to estimate the fair value of employee stock options on the date of grant utilizing the assumptions noted below. The risk-free rate is based on the U.S. Treasury bill yield curve in effect at the time of grant for the expected term of the option. The
Restricted Stock Awards • The Company recognized compensation expense related to the restricted stock awards of $381,000 in 2014, $0 in 2013 and $4,000 during 2012. Compensation expense is included in selling, general and administrative expenses in the consolidated statements of operations. As of December 31, 2014, there was $0.9 million of unrecognized compensation cost related to unvested restricted stock awards.