felanders/preprocessed huggingface dataset:
Financial Products' net income increased $1 million in 1999 and $24 million in 1998. Excluding net realized capital losses and gains, earnings increased $22 million, or 13%, in 1999 and $35 million, or 26%, in 1998. The increase in earnings primarily reflects increased fee income from higher levels of assets under management and administration.
The portfolio of debt securities at December 31, 1999 and 1998 included $739 million (6.5% of the total debt securities) and $839 million (6.9% of the total debt securities), respectively, of investments that are considered "below investment grade". "Below investment grade" securities are defined to be securities that carry a rating below BBB- and Baa3, by Standard & Poor's and Moody's Investors Services, respectively.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the
On July 1, 1999, HOLDCO contributed IA Holdco to the Company. The primary operating subsidiary of IA Holdco is Aeltus Investment Management, Inc. ("Aeltus") which has two wholly-owned operating subsidiaries: Aeltus Capital, Inc. ("ACI"), a broker dealer, and Aeltus Trust Company ("ATC"), a limited purpose banking entity. Aeltus is a registered investment advisor under the Investment Advisers Act of 1940 and provides investment advisory services to institutional and retail clients on a fee-for-service basis. In addition, Aeltus, through its ACI subsidiary, provides distribution services for certain Aetna mutual funds and other Aetna products. Aeltus' ATC subsidiary provides trustee, administrative, and other fiduciary services to retirement plans requiring or otherwise utilizing a trustee or custodian.
The Company is included in the consolidated federal income tax return, the combined New York return, and Illinois unitary state income tax return of Aetna. Aetna allocates to each member, as permitted under a tax sharing arrangement, an amount approximating the tax it would have incurred were it not a member of the consolidated group, and credits the member for the use of its tax saving attributes in the consolidated federal income tax return.
The Company, in conjunction with Aetna, has a non-qualified pension plan covering certain agents. The plan provides pension benefits based on annual commission earnings. As of the measurement date (September 30), accumulated benefit obligations exceeded fair value of plan assets.
The Medical Stop-Loss segment reported an insignificant amount of income before taxes for the years ended December 31, 2019 and 2018. Amounts recorded for investment income, and benefits, claims and reserves in the Medical Stop-Loss segment represent the activity of the remaining reserves of medical stop-loss business in run-off; and
Premiums by principal product for the years indicated are as follows (in thousands):
The Company classified all of its fixed maturities as available-for-sale. These investments are carried at fair value with unrealized gains and losses reported through other comprehensive income (loss). Fixed maturities available-for-sale totaled $385.0 million and $453.5 million at December 31, 2019 and 2018, respectively. Premiums and discounts on debt securities purchased at other than par value are amortized and accreted, respectively, to interest income in the Consolidated Statements of Income, using the constant yield method over the period to maturity. Equity securities are carried at fair value. Realized gains and losses on fixed maturities available-for-sale and equity securities are computed using the specific identification method and are reported in the Consolidated Statements of Income on the trade date.
Information by business segment for the periods indicated is as follows (in thousands):
Corporate derives its funds principally from: (i) dividends from the Insurance Group; (ii) management fees from its subsidiaries; and (iii) investment income from Corporate liquidity. Regulatory constraints historically have not affected the Company's consolidated liquidity, although state insurance laws have provisions relating to the ability of the parent company to use cash generated by the Insurance Group. The Insurance Group paid cash dividends of $30.0 million and $23.4 million to Corporate in 2019 and 2018, respectively.
The following table summarizes the prior year net favorable amount of policy benefits and claims incurred in 2019 according to the year in which it relates, together with the opening balances of the corresponding liability for policy benefits and claims (net of reinsurance recoverable) (in thousands):
All other lines, primarily life and other individual health products, experienced favorable development of $2.4 million. The favorable development in life reserves is primarily related to the group term life business due to continued improvements in experience and updated assumptions for the Paid-Up Life business.
Our results depend on the adequacy of our product pricing, our underwriting, the accuracy of our reserving methodology, returns on our invested assets, and our ability to manage expenses. We will also need to be diligent with increased rate review scrutiny to effect timely rate changes and will need to stay focused on the management of medical cost drivers in the event medical trend levels cause margin pressures. Factors affecting these items, as well as unemployment and global financial markets, may have a material adverse effect on our results of operations and financial condition.
* premiums on individual life insurance policies * product charges from universal life insurance products and annuities * net investment income and realized investment gains on assets
The per share results for the year ended December 31, 2002 were affected by the increase in the number of FIC's common shares outstanding due to the Merger. As of December 31, 2002, the number of FIC's weighted average common shares outstanding was 9,555,000, as compared to weighted average shares outstanding of 7,824,000 as of December 31, 2001. The December 31, 2001 weighted average shares outstanding takes into account the fact that additional shares were issued on May 18, 2001 due to the Merger and were outstanding only for the period from May 18, 2001 to December 31, 2001. Additionally, net income and earnings per share were affected by the cumulative effect of a change in accounting principle of $10.4 million, as described in "Transactions Affecting Comparability of Results of Operations."
The expense related to the amortization of present value of future profits of acquired businesses was $4.6 million for the year ended December 31, 2002, as compared to $4.6 million at December 31, 2001 and $3.6 million at December 31, 2000. The consolidation of ILCO's amortization expense with FIC's contributed approximately $1 million for the year ended December 31, 2001.
The life insurance subsidiaries of FIC maintain a diversified portfolio of investments which is supervised by an in-house staff. Investment policies and significant individual investments are subject to approval by the board of directors of each of the life insurance subsidiaries, in accordance with applicable state insurance regulatory requirements. Management regularly monitors individual assets and the overall asset mix. In the first quarter of 2003, the Board of Directors of FIC enhanced its oversight responsibilities with respect to portfolio management by establishing an Investment Committee consisting of three independent directors. In addition to its responsibilities with respect to the review of investment guidelines, the FIC Investment Committee monitors internal controls pertaining to the purchase and sale of investments.
Future policy benefits comprise 15% of FIC's total liabilities at December 31, 2002. These liabilities are estimated using actuarial methods based on assumptions about premiums, interest yields, investment returns, expenses, mortality, morbidity, and persistency. These assumptions consider Company experience and industry standards. The assumptions vary by plan, age at issue, year of issue and duration.
In fiscal 2011, we believe the life settlements market suffered even further declines. The 2011 Conning report indicated a market drop from approximately $7.6 billion in face amount transacted in 2009 to approximately $3.8 billion in 2010. While our fiscal 2011 results did not reflect the size of drop suggested in the Conning report for calendar 2010, our fiscal 2011 results were generally weaker than in fiscal 2010. Our fiscal 2011 was also adversely affected in the fourth quarter by a series of news articles critical of our operations and our disclosure of an SEC investigation. These latter events especially affected our licensee network and purchaser base and resulted in significant revenue declines in the fourth quarter of fiscal 2011 and throughout all of fiscal 2012. In the first two quarters of fiscal 2011, our results of operations had held up relatively well despite the industry downturn. Our revenues and net income were relatively stable and the metrics that we use to measure performance, such as average policy face value and revenues per settlement, were also stable. In the third and fourth quarter of fiscal 2011, however, our quarterly revenues fell to $20,159,650 and $17,031,006, respectively, and the quarterly revenues for fiscal 2012 were $9,833,395, $10,811,349, $6,666,795 and $5,610,650, respectively. Net income fell to $3,960,688 in the third quarter and to $3,029,818 in the fourth quarter of fiscal 2011 and we operated with a net loss throughout fiscal 2012. Our number of settlements fell to 37 in the third quarter and 30 in the fourth quarter of fiscal 2011 and totaled 62 for all of fiscal 2012.
X.L. provided the capital to incorporate X.L. Investments Ltd. (X.L.I.) on November 16, 1987 under the laws of Bermuda. X.L.I. in turn provided the capital to incorporate X.L. Investments (Barbados), Inc. (X.L.I.B.) on May 19, 1989 under the laws of Barbados.
The 1997 current paid losses represents, reinsurance treaty losses on the Company's short tail business.
average rate of 6.058%. Total interest expense and facility costs amounted to $7.18 million for the year ended November 30, 1997. As at November 30, 1997, the outstanding balance was $130.0 million and is repayable within the next twelve months.
The Company also has stock plans in place for its non-employee directors. The "Stock and Option Plan", issues non qualified options to the directors 4,000 shares at the commencement of their directorship and 2,000 shares each year thereafter. All options vest immediately on grant date.
X.L.E.'s insurance activities are subject to extensive regulation in the Republic of Ireland, principally under the Irish Acts and Irish Regulations, which impose on insurers headquartered in the Republic of Ireland minimum solvency and reserve standards and auditing and reporting requirements and grant to the Minister for Enterprise and Employment (the "Irish Minister") wide powers to supervise, investigate and intervene in the affairs of such insurers. The Irish Minister's powers and functions are exercised through the medium of the Department of Enterprise and Employment.
FASB issued Statement of Financial Accounting Standards No. 131, ("SFAS 131"), "Disclosures about Segments of an Enterprise and Related Information", which the Company will be required to adopt for fiscal year 1998. This statement established standards for reporting information about operating segments in annual financial statements and requires selected information about operation segments in interim financial reports issued to shareholders. It also established standards for related disclosures about products and services, geographic areas and major customers. Under SFAS 131, operating segments are to be determined consistent with the way that management organizes and evaluates financial information internally for making operating decisions and assessing performance. The Company has not determined the impact of the adoption of this new accounting standard on its consolidated financial statement disclosures.
During 2008 we incurred expenses of $83,165 in professional fees including auditing, database appraisal, legal, accounting, IT services and web design fees.
By comparison on December 31, 2007, the Company had $564,158 in total liabilities. On December 31, 2007 liabilities included $71,271 in accounts payable, $49,065 in accrued interest, $20,259 in accrued expenses and $423,563 in current note payable liabilities. Current note payable included $115,000 in notes payable and $308,563 in notes payable to a related party.
UnitedHealthcare served 575,000 additional people domestically as a result of growth in commercial business and services to seniors, partially offset by the proactive withdrawal from the Iowa medicaid market.
Total revenues and earnings from operations increased as each segment reported increased revenues and earnings from operations as a result of the factors discussed below. Earnings from operations also increased due to productivity and overall cost management initiatives.
Concentrations of credit risk with respect to accounts receivable are limited due to the large number of employer groups and other customers that constitute our client base. As of December 31, 2019, there were no significant concentrations of credit risk.
As of December 31, 2019 and 2018, the Company’s Medicare Part D receivables amounted to $2.3 billion and $0.8 billion, respectively.
The Company leases facilities and equipment under long-term operating leases that are non-cancelable and expire on various dates. At the lease commencement date, lease right-of-use (ROU) assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term, which includes all fixed obligations arising from the lease contract. If an interest rate is not implicit in a lease, the Company utilizes its incremental borrowing rate for a period that closely matches the lease term.
The Company classifies interest and penalties associated with uncertain income tax positions as income taxes within its Consolidated Statements of Operations. During the years ended December 31, 2019, 2018 and 2017, the Company recognized $19 million, $6 million and $14 million of interest and penalties, respectively. The Company had $76 million and $95 million of accrued interest and penalties for uncertain tax positions as of December 31, 2019 and 2018, respectively. These amounts are not included in the reconciliation above. As of December 31, 2019, there were $852 million of unrecognized tax benefits that, if recognized, would affect the effective tax rate.
Stock option activity for the year ended December 31, 2019 is summarized in the table below:
The Company offers a 401(k) plan for its employees. Compensation expense related to this plan was not material for 2019, 2018 and 2017.
Our expenses relate to operating a financial services holding company and a life insurance company.
Management has evaluated subsequent events for recognition and disclosure in the financial statements through March 16, 2017, which is the date the financial statements were available to be issued.
The Company’s fair value hierarchy for those financial instruments measured at fair value on a recurring basis as of December 31, 2016 and 2015 are summarized as follows:
The Company’s subsidiary TRLIC files a separate federal return. At August 1, 2016, TRLIC received it’s Certificate of Authority from the Texas department of insurance. TRLIC has a net operating loss of approximately $0.01 million.
- -------- (a) Includes investment income and net realized investment gains (losses).
UNUM reported increased pretax operating income for the year ended December 31, 1997, as compared with the same period in 1996. The increase was primarily attributable to improvements in pretax operating income for the Disability Insurance and Special Risk Insurance segments. Both segments have experienced strong sales and premium growth during 1997, leading to the improvement in operating earnings. These favorable results were partially offset by the increased pretax operating loss in Corporate, which was driven by a reduction in investment income as UNUM utilized excess capital to repurchase shares of its common stock. See the segment discussions that follow for a more detailed analysis of operating results.
During the second quarter of 1995, UNUM increased the group long term disability ("group LTD") reserves for incurred but not reported ("IBNR") claims and benefits to policyholders reported in the Disability Insurance segment by $38.4 million. IBNR reserves, which are established to fund anticipated reserves for claims which have been incurred but not yet reported to UNUM, are actuarially established based on various factors, including incidence levels and claims severity. The increased IBNR reserves were based on management's judgment that claims incurred but not yet reported would reflect increased levels of claims incidence and severity.
The increase in the Disability Insurance segment's pretax operating earnings in 1997, as compared with 1996, was primarily attributable to improved premium growth, increased investment income and improved operating expense ratios across most lines of business. These favorable factors were partially offset by higher benefit ratios in certain disability businesses including ID and group STD.
- -------- (a) For the definition of pretax operating income see the Consolidated Overview.
Certain 1996 and 1995 amounts have been reclassified in 1997 for comparative purposes.
During fourth quarter 1997, certain reinsurance pools managed by UNUM's wholly-owned subsidiary, Duncanson & Holt Inc. ("D&H"), received new claim information from ceding insurance enterprises about certain
Aggregate maturities of notes payable are as follows: 1998-$126.6 million; 1999-$21.5 million; 2000-$60.0 million; 2001-none; thereafter-$427.7 million.
The unamortized market value of the restricted shares issued under the Incentive Plan has been recorded as deferred compensation and is included as a reduction of stockholders' equity in the Consolidated Balance Sheets.
A reconciliation of income taxes computed by applying the federal income tax rate to income before income taxes and the consolidated income tax expense charged to operations follows:
Commissions. Commission expense decreased in 2013 and 2012 compared to 2011 as agents are compensated based upon month-to-month route premium growth that has been impacted by increased policy lapses. This results in a lower commission to premium relationship as compensation is reduced. In addition, we consolidated some collection routes in 2012, which resulted in elimination of one district office and its related staffing thereby also reducing some commission expense.
Other General Expenses. The expenses are allocated by segment based upon an annual expense study performed by the Company. Overall expenses were up in 2013 due to an increase in employee health claims, as we are self insured and due to temporary employee labor costs as we have added staffing to assist with operations projects. In 2013, we also settled litigation in the amount of $0.2 million which was filed in the aftermath of Hurricane Katrina by the Louisiana Attorney General against all insurers writing homeowner policies in Louisiana.
(2) Includes $226.6 million and $292.6 million of securities guaranteed by third parties for the years ended December 31, 2013 and 2012, respectively.
The financial statements have been prepared on the basis of U.S. generally accepted accounting principles ("GAAP"), which vary from reporting practices prescribed or permitted by regulatory authorities.
2001 2000 1999 ---- ---- ---- Interest: Fixed maturities $1,790,992 $2,014,883 $2,123,671 Policy and student loans 468,904 505,319 579,774 Short-term investments 1,105,434 937,077 859,699 Mortgage loans 206,212 190,068 25,759 Rental income 304,879 278,302 319,758
Current $ -- $ 57,471 Deferred 895,437 500,605 -------- -------- Total $895,437 $558,076 ======== ========
The Company received for the years ended December 31, 2001 and 2000, $132,141 and $182,248 respectively, as rental income from Security National for a lease of office space in the Company's building under the terms of the Administrative Services Agreement.
JP Life owns its home office consisting of a 20-story building and an adjacent 17-story building in downtown Greensboro, NC. These buildings house insurance operations and provide space for commercial leasing. JP Life also owns a supply and printing facility, a parking deck and a computer center, all located on nearby properties. Operations in Lexington, KY for the KCL business assumed were moved to Greensboro in 2001.
The Benefit Partners segment offers group non-medical products such as term life, disability and dental insurance to the employer marketplace. These products are marketed primarily through a national distribution system of regional group offices. These offices develop business through employee benefit brokers, third party administrators and other employee benefit firms. The Benefit Partners segment was created in January 2000
Cash provided by operations in 2002, 2001 and 2000 was $428, $801 and $501. The primary reason for the large swings was approximately $208 of single premiums that were received pending policy issuance in late 2001 and reported as cash received from operations in that year. In 2002 those policies were issued and the premiums were reported as a decrease in cash from operations in 2002 and an increase in policyholder deposits.
We monitor those securities that are rated below investment grade as to individual exposures and in comparison to the entire portfolio, as an additional credit risk management strategy.
- $19.6 write down on debt of WorldCom, Inc., which filed for bankruptcy in July. This issuer had specific problems with accounting restatements and potentially questionable business practices. The entire telecommunications sector has been under pressure due to overcapacity. We then sold these securities in 2002. We specifically looked at other creditors in this sector including several on our potentially distressed security list and determined that at this point, the unrealized losses on securities we hold of other material creditors are temporary.
Information about gross realized gains and losses including other than temporary impairments on available for sale securities transactions follows:
We have pleasure in submitting the sixty-second Annual Report and Accounts for the year 1925.
In the Personal Accident Department we are feeling to a greater extent the effects of motor accidents; the results of the past year, although still satisfactory, have been unfavourably influenced by this factor.
All foreign currencies, both as regards the Profit and Loss Account and the Balance Sheet, have been converted into Swiss francs at tbe average rates of exchange ruling for December 1925.
The Profit & Loss Account closes with a profit of . . Frs. 4,142,205.51 which the Board of Directors propose to distribute as follows: Special Reserve Fund Frs. 800,000.— Staff" Life Insurance and Pension Fund ...... „ 250,000.— Dividend Frs. 75.— per sbare ........ „ 2,250,000.— Directors and Management „ 687,500.— Carried forward .......... . • • » 154,705.51
Annuity Fund . . . . . . . ..... . . 4,744,203. — Reserve for unsettled Claims . . . . . . . 711,688.- 62,512,702
Board of Directors E. Hürlimann, Honorary Chairman M. E. Eisenring, Chairman Paul Keller, Deputy Chairman Karl Brunner Paul Ruegger Hans Schindler Max H. Schneebeli Max Petitpierre Werner Ahegg
In the year under review the management expenses in­ creased relatively little, on the one hand because double the annual quota was charged to certain expense catego­ ries in the previous 18-month business year and on the other because the number of employees remained practi­ cally unchanged despite the mounting volume of business and of work involved. The adverse business experience, particularly in the USA, resulted in a decrease in the tax liability in Switzerland and abroad; the total tax requirement fell from Sw. frs. 8.6 million to Sw. frs. 5.5 million.
Investment Income (less Interest on Life Assurance and Annuity Funds and other technical reserves) 65,312,689 85,107,351
The basic and dilutive earnings per common share calculations reflect the effect of the reverse stock split and have been adjusted retroactively as of April 30, 2009 and as of and for the year ended April 30, 2010. See Note No. 2.
During the years ended April 30, 2011 and 2010, the Company received proceeds from the issuance of warrants to purchase common stock of the Company of $40,000 and $90,000, respectively.
As of April 30, 2011, the Company does not anticipate any additional liability related to the conveyance of Quick Pay.
As of April 30, 2011, the Company had a federal net operating loss carryforward of $748,315, which expires through 2031. This carryforward is limited due to the change in control that took place in the year ended April 30, 2008 and maybe further limited in the future upon change(s) in control of the Company in accordance with the provisions under Internal Revenue Code Section 381.
General insurance expenses in 1994 decreased by $13,733 compared to a decrease of $8,792 in 1993 and an increase of $10,527 in 1992. The 1994 change resulted from decreases in expenses for legal fees, group insurance and printing. Actuarial fees rose as regulatory certification requirements increased in 1994. Between 1993 and 1992, the decrease in expenses resulted from lower expenditures for salaries, group insurance, printing, equipment repair and computer programs. Loan expense increased $5,489 from additional loans made in 1994 and 1993. The Company continues to have difficulty developing sales programs and computer programs, because of the growing work load and expense involved in maintaining separate accounting and reporting processes for Federal and State Regulators. Although the rate of inflation has eased over the past few years, the Company was still adversely affected by modest declines in the purchasing power of the dollar since it cannot increase the premiums on present in-force policies. Taxes, licenses and fees decreased in 1994 as assessment by state guarantee funds were lower.
(c) Future Policy Benefits Liabilities for future life policy benefits and expenses have been computed by a net level premium method based upon estimated future investment yield, mortality and withdrawals.
(d) Depreciation Furniture and equipment are depreciated over estimated useful lives of 5 to 10 years. Provision for depreciation is computed using the straight-line and accelerated methods.
For federal income tax purposes, the Company and C I Agency at December 31, 1994 had net operating loss carryforwards of approximately $343,000 available to offset future taxable income. These carryforwards expire as follows: $9,500 in 2003, $56,300 in 2004, $48,600 in 2005, $45,000 in 2006, $73,600 in 2007, $77,000 in 2008 and $33,000 in 2009.
Total benefits and expenses were $26,806,000 for 1997, which constituted 94% of the Company's total revenues, as compared to $28,546,000, or 95% of the Company's total revenues for 1996.
The Company attempts to match the duration of invested assets with its policyholder and cemetery and mortuary liabilities. The Company may sell investments other than those held-to-maturity in the portfolio to help in this
If market conditions were to cause interest rates to change, the market value of the fixed maturity security portfolio (approximately $75,467,000) could change by the following amounts based on the respective basis point swing (the change in the market values were calculated using a modeling technique):
The Company is subject to risk based capital guidelines established by statutory regulators requiring minimum capital levels based on the perceived risk of assets, liabilities, disintermediation, and business risk. At December 31, 1998 and 1997, the life subsidiaries exceeded the regulatory criteria.
Fixed maturity and equity securities available for sale - at fair value, which is based upon quoted trading prices. Changes in fair values net of income taxes are
earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding during the year plus the incremental shares that would have been outstanding under certain deferred compensation plans.
Net investment income includes net investment income earned by the restricted assets of the cemeteries and mortuaries of approximately $683,000, $609,000 and $655,000 for 1998, 1997, and 1996, respectively.
Significant components of the Company's deferred tax assets and liabilities at December 31 are approximately as follows:
The Company paid no income taxes in 1998, 1997 and 1996. The Company's income tax expense is summarized as follows:
Interest income for the year ended December 31, 1995 primarily represents income earned on the Account's investment in the participation in a mortgage loan (Riverpoint Shopping Center). Income generated from participation in the mortgage loan remained relatively unchanged compared to the corresponding period in 1994. Interest income for the year ended December 31, 1994 also included interest earned on short-term investments of approximately $21,000.
The Account, through N/S Associates, owns an interest in an existing enclosed super regional shopping center in Milwaukee, Wisconsin, known as Northridge Mall. The mall shops and four adjacent department stores comprising the shopping center contain approximately 1,053,000 square feet of gross leasable area, of which N/S Associates owns approximately 399,000 square feet consisting of mall shops (approximately 388,000 square feet) and storage space (approximately 11,000 square feet). The remaining 654,000 square feet of gross leasable area are occupied by four department stores, three of which own their own stores and a portion of the parking area. The fourth department store leases its space from an unaffiliated third party.
In August 1989, IDS Life, on behalf of the Account, acquired a 244-unit garden apartment complex known as West Springfield Terrace Apartments, which is located in Fairfax County, Virginia.
Contingent rent (based on sales by property tenants) from the retail investments included in rental income is $578,000, $1,058,000 and $1,010,000 in 1996, 1995 and 1994, respectively.
1225 Investment Corporation had entered into a management agreement with JMB Properties Company. During December 1994, JMB Properties Company assigned the management agreement to Heitman Washington D.C. Properties, Ltd. ("Office Manager"). The Office Manager is entitled to receive a fee of 2.5% of gross receipts from the operations of the Property. Management fees earned by the Office Manager are included in property operating expenses and aggregated approximately $188,000 and $175,000 for the years ended December 31, 1996 and 1995, respectively.
We are principally a retailer, servicer and underwriter of non-standard personal automobile insurance. We also own two tracts of land in San Antonio, Texas that are held for sale. Non-standard personal automobile insurance is made available to individuals who are categorized as “non-standard” because of their inability or unwillingness to obtain standard insurance coverage due to various factors, including payment history, payment preference, failure in the past to maintain continuous insurance coverage, driving record and/or vehicle type.
The expense ratio was 26.7% for the year ended December 31, 2012, compared with 29.4% for the year ended December 31, 2011. Excluding the severance and related benefits charges noted above, the expense ratio for the year ended December 31, 2011 was 28.6%.
During the years ended June 30, 2011 and 2010, the Company incurred charges of $1.7 million and $0.2 million, respectively, for severance for former employees of the Company. The fiscal year 2011 charge was comprised of $1.3 million in accrued severance and benefits and $0.4 million in non-cash charges related to the vesting of certain unvested stock options and restricted common stock. Severance and benefits charges are included in insurance operating expenses and the non-cash charges related to the vesting of stock options and restricted common stock are included within stock-based compensation expense in the consolidated statements of operations and comprehensive income (loss). The insurance operations segment includes the accrued severance and benefits charges, and the real estate and corporate segment includes the accelerated vesting charges.
The Company's corporate headquarters is located in a two story office building in Lake Mary, Florida which is owned by the Company. The Company occupies the entire second floor of the building. The remaining rentable space is fully leased as of December 31, 1997.
New business written was $82, $122 and $124 million in face value for 1997, 1996 and 1995, respectively. The Company's new market is known as the final expense market. This product is a traditional endowment policy designed to help offset the financial burdens associated with the death of a family member and targets the needs of senior citizens. 57% of the policies written in 1997 represent this new product. Recruiting new field sales representatives is directed at this new plan. Policies issued in this market are of a lesser face value than those of the Universal Life market. That being the case, the face amount of insurance appears to have declined, however the actual number of policies issued increased. In 1996 and 1997, the Company issued approximately 2,700 new policies.
Premium and policy charges for 1997 was $7.5 million, 1996 was $7.7 million, 1995 at $7.9 million. While policy production was up for 1997 and 1996, premium and policy charges went down.
A reconciliation of net income (loss) for the years ended December 31, 1997, 1996 and 1995 and shareholders' equity as of December 31, 1997 and 1996 between the amounts reported on a statutory basis and the related amounts presented on the basis of generally accepted accounting principles is as follows:
For the years ended December 31, 1997, 1996 and 1995, the Company ceded premiums to MEGA of $481,585, $582,346 and $675,770, included in reinsurance ceded, and received recoveries of $503,159, $367,295 and $459,090, included in annuity, death and other benefits, respectively. The funds held by reinsurance treaties with reinsurer of $1,339,927 and $1,193,366 represent the 18% share of policy loans ceded to the reinsurer at December 31, 1997 and 1996, respectively.
Following is an analysis of the potential effects of changes in currency exchange and interest rates using so-called "shock" tests that model effects of shifts in rates. These are not forecasts.
Other matters that provide additional context for considering our liquidity position are discussed below.
GE Global Insurance's ability to meet future obligations, including debt service and operating expenses, and to pay dividends to its shareholder, depends primarily upon the receipt of sufficient funds from its insurance businesses. The payment of dividends by our U.S. domiciled subsidiaries is subject to restrictions set forth in the insurance laws of their respective states of domicile as well as other restrictions. The payment of dividends by our foreign domiciled insurance companies is dependent on the laws and regulations of the countries in which they are located and operate. Historically, our liquidity requirements have been met by funds provided from operations and from the maturity and sales of investments. In the recent past (such as in 2002 in response to the significant fourth quarter charge taken for adverse development and in 2001 in response to the events of September 11), capital contributions from our ultimate parent--GE Company--have been a liquidity source. However, there are no contractual capital
support agreements in place and, accordingly, there can be no assurances as to the level of any future capital contributions.
Total revenues in 2004 decreased $1.8 million to $26.8 million, a 6.2% decrease from 2003. Of this decrease, approximately $6.6 million related to commissions and fees from medical third-party administration (TPA) business units sold in 2004 and 2003. These operations were sold because their respective operating profit margins were not expected to exceed the 10%-12% range, and as such, were not acceptable returns in our culture. Services Division’s internal growth rate for core commissions and fees was 16.6% in 2004, excluding the 2003 commissions and fees from divested business. The net internal growth rate for core commissions and fees for the Services Division in 2003 and 2002 was 7.9% and 11.4%, respectively. The positive internal growth rates from commissions and fees from 2002 through 2004 primarily reflect the strong net new business growth from our workers’ compensation and public risk TPA businesses.
Income before income taxes in 2003 increased $1.2 million to $5.5 million, a 27.1% increase over 2002, primarily due to strong net new business growth and the elimination of the lower margin medical TPA business sold in 2003.
Effective January 1, 2002, Brown & Brown adopted SFAS No. 142, which provides for the non-amortization of goodwill. Goodwill is now subject to at least an annual assessment for impairment by applying a fair-value-based test. Brown & Brown completed its most recent annual assessment as of November 30, 2004 and identified no impairment as a result of the evaluation.
To hedge the risk of increasing interest rates fromJanuary 2, 2002 through the remaining six years of its seven-year $90 million term loan, Brown & Brown entered into an interest rate swap agreement that effectively converted the floating rate LIBOR-based interest payments to fixed interest rate payments at 4.53%. This agreement did not affect the required 0.50% to 1.00% credit risk spread portion of the term loan. In accordance with SFAS No. 133, as amended, the fair value of the interest rate swap of approximately $455,000 and $1,344,000, net of related income taxes of approximately $267,000 and $824,000, was recorded in other liabilities as of December 31, 2004 and 2003, respectively, with the related change in fair value reflected as other comprehensive income. Brown & Brown has designated and assessed the derivative as a highly effective cash flow hedge.
At December 31, 2004, Brown & Brown had a net operating loss carryforward of $9,214,000 for income tax reporting purposes, portions of which expire in the years 2011 through 2022. This carryforward was derived from agencies acquired by Brown & Brown in 2001 and 1998, and the operating results of certain profit centers for state income tax purposes.
In March 2002, Brown & Brown completed a follow on stock offering of 5,000,000 shares of common stock at a price of $31.50 per share. The net proceeds of the offering were $149,400,000 and have been used, and are intended to continue to be used, for acquisitions and for other general corporate purposes, including working capital and capital expenditures.
During the fourth quarter of 2001, the Company incurred a $5.9 million impairment charge for intangible assets, incurred primarily as a result of the impact to operations of the terrorist acts that occurred on September 11, 2001, the response by the United States since October 7, 2001, and the resulting negative impact these events have had on domestic and international air travel, and the travel industry in general.
At December 31, 2002 and 2001, the Company had unrealized foreign currency gains (losses) associated with these financial instruments of approximately $1.6 million, and $(0.5) million, respectively.
Consolidated Financial Statements: See Part III, Item 15 of this Form 10-K.
Pursuant to a Shareholder's Agreement with Lynda Regan, Chief Executive Officer of the Company and Chairman of the Company's Board of Directors, and certain other individuals, in the event of the death of Ms. Regan, the Company shall repurchase from Ms. Regan's estate all of the shares of the Company's common stock that were owned by Ms. Regan at the time of her death, or that were transferred by her to one or more trusts prior to her death. The purchase price to be paid by the Company shall be equal to 125% of the fair market value of the shares. The Company has purchased a life insurance policy with a face amount of $14.0 million for the purpose of funding this obligation in the event of Ms. Regan's death. Any excess of the obligation over the insurance proceeds are expected to be funded with cash and investments and, if necessary, through external financing.
Results of Operations--LMG's net income decreased approximately $2.1 million in 1999 from 1998 due primarily to increases in expenses, as discussed below. In 1998, however, LMG's net income increased approximately $6.9 million from 1997 to 1998 due primarily to increases in revenue, which is also discussed below.
interest rates by expected maturity dates for fixed income investments held at December 31, 1999 and 1998. Actual cash flows could differ from expected amounts.
Through its wholly-owned broker-dealer subsidiary, Legacy Financial Services, Inc. ("LFS"), the Company engages in the offering and sale of variable annuity and life insurance products, mutual funds and debt and equity securities on a fully disclosed basis. LFS has entered into agreements (the "Agreements") with various entities pursuant to which LFS has a non-exclusive right to solicit sales of investment products offered by such entities through its network of independent representatives and to provide certain marketing and administrative services in order to facilitate sales of such products. Under the Agreements, the Company is compensated based upon pre-
For purposes of estimating the fair value of the Employee Options for the pro-forma amounts listed above, the Company applied the minimum value method, as proscribed in SFAS No. 123, with risk-free rate interest rate assumptions ranging from 4.7% to 6.3% and expected life assumptions ranging from five to
Although the Company markets and administers several annuity and life insurance products on behalf of the Carriers, the Company's revenues are derived primarily from sales and administration of certain annuity products, especially the VisionMark(TM) annuity offered by IL Annuity. During 1999, 1998, and 1997, 56.2%, 70.6% and 52.4%, respectively, of the Company's consolidated revenue resulted from sales of the VisionMark(TM) annuity.
On October 24, 2018, Reliance Holdings and the Company entered into a Bill of Sale agreement to transfer all of the outstanding membership interest in EBS LLC and USBA LLC. In exchange for the membership interest, the Board of Directors of the Company authorized and issued 191,333 shares of restricted common stock of the Company for all the membership interest of USBA LLC and EBS LLC.
The operating results of the acquired business has been included in the Company’s Consolidated Statement of Operations from the date of acquisition through December 31, 2019. The revenues of the acquired business for the period from April 1, 2019 to December 31, 2019 was $1,036,154 and the net loss was $23,104. The revenues and net income for the acquired business as a standalone entity per ASC 805 from January 1, 2019 to December 31, 2019 were $1,381,991 and $30,805. The revenues of the acquired business for the year ending December 31, 2020 was $1,493,431 and the net loss was $66,623.
The Company earns additional revenue including contingent commissions, profit-sharing, override and bonuses based on meeting certain revenue or profit targets established periodically by the carriers (collectively the Contingent Commissions). The Contingent Commissions are earned when the Company achieves the targets established by the insurance carries. The insurance carriers notify the company when it has achieved the target. The Company only recognizes revenue to the extent that it is probable that a significant reversal of the revenue will not occur.
Investors-NA owns an office building located at 206 West Pearl Street, Jackson, Mississippi. This building is 66 years old and contains approximately 85,000 square feet of office space. Investors-NA currently occupies a nominal portion of the space in this property and leases space to various commercial tenants.
Income before equity in net earnings of affiliates, extraordinary items and cumulative effect of change in accounting principle of affiliate 7,145 7,966 8,264 8,587 8,831
The Company has a contributory savings & thrift plan covering the majority of its employees. Company contributions are at the discretion of the Company's Board of Directors and may not exceed the maximum amount deductible for federal income tax purposes. The Company contributed $1,035,000, $879,000, and $773,000 in 1995, 1994 and 1993, respectively.
Due to changes in the U.S. federal income tax laws, effective in 1994, the Company began providing for U.S. income taxes on the undistributed earnings of its foreign subsidiaries. Prior to 1994, the Company did not provide for U.S. income taxes on the undistributed earnings ($19,200,000 at December 31, 1995) of certain foreign subsidiaries which are considered permanently invested outside of the U.S. The amount of unrecognized deferred tax liability on these undistributed earnings is $5,000,000.
/s/ Michael J. Cloherty ------------------------------------- Michael J. Cloherty Chief Financial Officer
Due to the additions of Integrail and the mail order facility along with Centrus for the full twelve months in the fiscal year ended June 30, 2003, the Company's expenses increased $4.4 million for expenditures related to increases in compensation and benefits, primarily associated with new employees including senior management. Some of this increase was also related to the replacement of resources from related parties with full time employees (see below). In addition, the Company incurred the following additional expenses in the twelve months ended June 30, 2003: 1) approximately $400,000 of expenses incurred related to two acquisitions which the Company did not complete, 2) approximately $127,000 related to a settlement of a New York State sales tax audit, and 3) the payment of $100,000 related to a terminated consulting agreement.
Fiscal Year Ended June 30, 2002 Compared to Fiscal Year Ended June 30, 2001
In connection with the PPP Acquisition, several members of PPP's management team have joined the Company as employees, and have been granted stock options to purchase an aggregate of 150,000 shares of Common Stock, under the Company's 1999 Stock Option Plan, as amended. As of August 1, 2003, the Company's wholly-owned subsidiary, Ascend Specialty Pharmacy Services, Inc. ("Ascend") assumed all of the shares of PPP. Each of PRXA and PPRX continues to operate under their respective names, as subsidiaries of Ascend, in the state of Maine. The Company intends to position Ascend as a preferred provider with PPP's target markets while focusing on the extension of their specialty services to the Company's PBM division.
Health Card's discussion and analysis of its financial condition and results of operations are based upon Health Card's Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires Health Card to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses; these estimates and judgments also effect related disclosure of contingent assets and liabilities. On an on-going basis, Health Card evaluates its estimates, including those related to rebate income, bad debt, intangible assets, income taxes and financing operations. Health Card bases its estimates on experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.