The table above illustrates, for example, that an instantaneous 200 basis point increase in market interest rates at December 31, 2002 would reduce the estimated fair value of the Company's fixed-maturity investments by approximately $2.3 million at that date. At December 31, 2001, and based on the fair value of fixed-maturity investments of $19.0 million, an instantaneous 200 basis point increase in market interest rates would have reduced the estimated fair value of the Company's fixed-maturity investments by approximately $2.5 million at that date. The Company's decreased sensitivity to rising interest rates is due to the $2.9 million decrease in fixed-maturity investments at December 31, 2002 of $16.1 million from $19.0 million at December 31, 2001. The definitive extent of the interest rate risk is not quantifiable or predictable due to the variability of future interest rates, but the Company does not believe such risk is material.
Total New Associate Year Memberships Memberships Ratio ---- ----------- ----------- ----- 1998 391,827 69,890 17.8% 1999 525,352 85,219 16.2% 2000 670,118 90,684 13.5% 2001 728,295 103,515 14.2% 2002 773,767 119,326 15.4%
Other revenue increased 11%, from $3.2 million to $3.6 million primarily due to the increase in Membership enrollment fees.
Commissions to associates increased 15% to $111.1 million for 2001 compared to $96.6 million for 2000, and represented 42% and 46% of Membership fees for such years. These amounts were reduced by $2.2 million and $1.8 million, respectively, representing Membership lapse fees. These fees are determined by applying the prime interest rate to the unearned advance commission balance pertaining to lapsed Memberships. The Company realizes and recognizes this fee only when the amount of the calculated fee is collected by withholding from cash commissions due the associate, because the Company's ability to recover fees in excess of current payments is primarily dependent on the associate selling new Memberships which qualify for advance commission payments. These fees were no longer applicable after March 1, 2002. Commissions to associates are primarily dependent on the number of new memberships sold during a period. New memberships sold during 2001 totaled 728,295, a 9% increase from the 670,118 sold during 2000.
Net cash used in financing activities of continuing operations was $34.4 million, $27.4 million and $13.7 million for 2002, 2001 and 2000, respectively. This $7.0 million change during 2002 was primarily comprised of the $21.9 million increase in purchases of treasury stock offset by $4.1 million increase in proceeds from sale of common stock on exercise of options and a $12.3 increase in proceeds from issuance of debt.
The Company may not be able to grow memberships and earnings at the same rate as it has historically experienced. The Company's year end active memberships have increased 11%, 17% and 29% in the years ended December 31, 2002, 2001 and 2000, respectively. Net income applicable to common stockholders for the same three years has increased 33%, 32% and 59%, respectively. However, in the fourth quarter of 2002, the Company experienced its first decline in new memberships sold and associates recruited compared to the comparable quarter of the prior year. The Company's ability to grow memberships and earnings is substantially dependent upon its ability to expand or enhance the productivity of its sales force, develop additional legal expense products, develop alternative marketing methods or expand geographically. There is no assurance that the Company will be able to achieve increases in membership and earnings growth comparable to its historical growth rates.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Pre-Paid Legal Services, Inc. and subsidiaries as of December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America.
In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections that, among other things, rescinded SFAS No. 4, Reporting Gains and Losses from Extinguishment of Debt. With the rescission of SFAS No. 4, the early extinguishment of debt generally will no longer be classified as an extraordinary item for financial statement presentation purposes. The provision is effective for fiscal years beginning after May 15, 2002. The Company does not anticipate that the adoption of SFAS No. 145 will have a material effect on its financial position or results of operations.