UPCIC’s reinsurance program, runs from June 1 through May 31 of the following year, consists of various forms of catastrophe coverage. Under the 2016-2017 reinsurance program, UPCIC has a net retention of $35 million per catastrophe event for all losses incurred up to a first event loss of $2.487 billion. UPCIC purchases a separate supplemental underlying cover to further reduce its retention for all losses occurring in states outside of Florida. With this cover, UPCIC retains only $5 million under its program in its non-Florida states. In certain circumstances involving a catastrophic event affecting both Florida and other states, UPCIC’s retention could result in pre-tax net liability as low as $5 million - the $35 million net retention under the all states reinsurance program could
Property and liability premiums are recognized as revenue on a pro rata basis over the policy term. The portion of premiums that will be earned in the future are deferred and reported as unearned premiums.
IBNR-Total of Incurred-but-not-reported liabilities plus expected development on reported claims by accident year and
Income taxes recoverable represent amounts due from Federal and state tax jurisdictions and arise when tax payments exceed taxable income. The tax amount due from Federal income taxes of $5.4 million as of December 31, 2015 was settled with a refund received from the Department of Treasury during 2016. The amount of $3.3 million due from both Federal and state tax jurisdictions as of December 31, 2016 represents estimated payments in excess of amounts due.
On April 13, 2016, we declared a cash dividend of $0.14 per share on our outstanding common stock which was paid on July 5, 2016 to shareholders of record at the close of business on June 15, 2016.
Represents change in fair value of available for sale investments, net of tax benefit of $1,486 thousand, $1,369 thousand and $916 thousand in years ended December 31, 2016, 2015 and 2014, respectively.
Recognition of Premium Revenues. The Company recognizes revenue when realized or realizable and earned. Property and liability premiums are recognized as revenue on a pro rata basis over the policy term. The portion of premiums that will be earned in the future is deferred and reported as unearned premiums. The Company believes that its revenue recognition policies conform to GAAP. In the event policyholders cancel their policies, unearned premiums represent amounts that the Insurance Entities would refund policyholders. Accordingly, the Company determines unearned premiums by calculating the pro rata amount that would be due to the policyholders at a given point in time based upon the premiums owed over the life of each policy.
Through UVECF, the Insurance Entities’ parent company, UVE recorded capital contributions for the periods presented (in thousands):
In April 2016, the Company sold 583,771 shares of UVE common stock in a private placement to RenRe Ventures at a price of $17.13 per share for total consideration of $10 million, which was comprised of $2.965 million in cash and $7.035 million in cancellation of outstanding indebtedness, including accrued interest. See “-Note 7 (Long-Term Debt)” for details of the Company’s debt structure.
At each balance sheet date, management assesses the need to establish a valuation allowance that reduces deferred tax assets when it is more likely than not that all, or some portion, of the deferred tax assets will not be realized. A valuation allowance would be based on all available information including the Company’s assessment of uncertain tax positions and projections of future taxable income and capital gain from each tax-paying component in each jurisdiction, principally derived from business plans and available tax planning strategies.
which was the principal impact to reduced profitability offset somewhat by lower expense ratio in 2016 versus 2015. Net income for the fourth quarter of 2016 decreased 53.2%, or $15.5 million, to $13.7 million compared to net income of $29.2 in the fourth quarter of 2015. The primary drivers behind the increases in revenue were increased policy and premium counts year over year driven by organic growth in, and outside of Florida and the elimination of quota-share reinsurance in June 2015.