felanders/preprocessed huggingface dataset:
Net Realized Capital Gains (Losses). Net realized capital gains were $50.3 million, $206.7 million and $723.1 million in 2015, 2014 and 2013, respectively. The $50.3 million was comprised of a $94.7 million gain on the sale of a subsidiary and $44.1 million of net gains from sales on our fixed maturity and equity securities, partially offset by $78.8 million of other-than-temporary impairments and $9.6 million of losses from fair value re-measurements on equity securities and other invested assets. Comprising the $206.7 million, there were $251.8 million of gains from fair value re-measurements on fixed maturity, equity securities and other invested assets, partially offset by $38.9 million of other-than-temporary impairments and $6.2 million of losses from sales on our fixed maturity and equity securities. The net realized capital gains of $723.1 million in 2013 were the result of $687.6 million of gains from fair value re-measurements and $35.6 million of net realized capital gains from sales on our fixed maturity and equity securities.
Premiums. Gross written premiums decreased by 15.7% to $1,374.0 million in 2015 compared to $1,630.4 million in 2014, primarily due to the decline in Latin American and Asian business, reductions in premiums related to quota share agreements and the negative impact of approximately $86.8 million from the movement of foreign exchange rates. Net written premiums decreased by 8.1% to $562.7 million in 2015 compared to $612.2 million in 2014. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to varying utilization of reinsurance related to the quota share contracts. Premiums earned decreased 3.3% to $581.2 million in 2015 compared to $601.0 million in 2014. The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
•Fixed maturities securities, which are classified as available-for-sale, are reported at current fair values, rather than at amortized cost, or the lower of amortized cost or market, depending on the specific type of security, as required by SAP.
Net Investment Income. Net investment income for the year ended December 31, 2010 decreased by $1,913, or 4.4%, to $41,395 from $43,308 for the comparable 2009 period. The 2010 decrease primarily resulted from lower short-term interest rates, risk reduction actions related to municipal bonds, and ongoing maintenance of short duration to protect the portfolio from rising interest rates. Net effective annual yield on the investment portfolio decreased to 3.9% for the year ended December 31, 2010 from 4.1% for the comparable 2009 period. Our duration was 3.4 years at December 31, 2010, up slightly from 3.3 years at December 31, 2009.
(2)Other asset-backed securities includes obligations of the U.S. Small Business Administration which totaled $9,553 at amortized cost and $10,307 at estimated fair value at December 31, 2010.
The following tables present information by line of business for our total net reserves and the corresponding retained (i.e. direct less ceded) reserves and assumed reserves as of December 31, 2011 and 2010.
The fair value of stock options used to compute net income and EPS for the years ended December 31, 2011, 2010, and 2009 is the estimated fair value at grant date using the Black-Scholes option-pricing model with the following assumptions:
A summary of the status of non-vested options as of December 31, 2011 is presented below.
As of December 31, 2011, there was $6,528 of unrecognized compensation expense related to non-vested restricted stock awards that is expected to be recognized over a weighted average period of 1.6 years. The total fair value of the shares that were vested and unrestricted during the years ended December 31, 2011, 2010, and 2009 was $3,953, $3,782 and $3,412, respectively. For the years ended December 31, 2011, 2010, and 2009, the Company recorded compensation expense related to restricted stock of $2,870, $2,617 and $2,493, net of income tax benefits of $1,545, $1,409 and $1,342, respectively.
During the year ended December 31, 2011, the Company purchased 1,190 of its common shares on the open market under the program at a cost of $43 resulting in total shares purchased of 1,728,645 at a cost of $55,569 as of December 31, 2011. During the year ended December 31, 2010, the Company purchased 162,907 of its common shares on the open market under the program at a cost of $5,814 resulting in total shares purchased of 1,727,455 at a cost of $55,526 as of December 31, 2010.
•Commercial mortgage-backed securities: overall credit quality, including assessments of the level and variability of credit support and collateral type such as office, retail, or lodging, predictability of cash flows for the deal structure, prevailing economic market conditions.
The Company is an outsourcing company that administers health and other benefit plans for large, self-funded companies and for payors (insurance companies, HMOs, and other risk-takers) that have elected to outsource sales support, distribution, and "back-office" administrative services.
revenues increased to 39.9% in 1997 from 37.3% in 1996. This was primarily due to the full-year impact of the Harrington acquisition and the more labor-intensive nature of the self-funded customers.
In the second quarter of 1997, the Company entered into an amendment of the terms of its Line of Credit to enable it to pay a quarterly dividend of up to $0.125 per share of the Company's capital stock (up to $0.50 per share on an annualized basis). The Company may increase this dividend by up to $0.05 per share on an annualized basis for each calendar year after 1997, without the consent of the agency bank. For 1997, the Company declared dividends totaling $5.6 million. These dividends were paid on July 14, 1997, October 15, 1997, and January 20, 1998.
• Premiums ceded to reinsurance subsidiaries of certain mortgage lenders and risk sharing arrangements with the GSEs.
Losses incurred increased in 2003 compared to 2002. This increase was principally the result of a higher number of defaults (both bulk and flow) and increases in the estimates regarding how many defaults will eventually result in a claim and how much will be paid on claims.
Summary Sherman balance sheets and income statements at the dates and for the periods indicated appear below.
The Company has a $285 million commercial paper program, which is rated ‘A-1’ by Standard & Poor’s Rating Services and ‘P-1’ by Moody’s Investors Service. At December 31, 2004 and 2003, the Company had $139.5 million and $100.0 million in commercial paper outstanding with a weighted average interest rate of 2.36% and 1.18%, respectively.
Reserves are established for reported insurance losses and loss adjustment expenses based on when notices of default on insured mortgage loans are received. A default is defined as an
If interest rates decline, house prices appreciate or mortgage insurance cancellation requirements change, the length of time that the Company’s policies remain in force could decline and result in declines in Company’s revenue.
• whether Fannie Mae or Freddie Mac will give mortgage lenders an incentive, such as a reduced guaranty fee, to select a mortgage insurer that has a “AAA” claims-paying ability
The accompanying financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America (“GAAP”). In accordance with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
• Other securities which are under pressure due to market constraints or event risk
The Company’s short-term investments consist primarily of money market funds and commercial paper. For purposes of the consolidated statement of cash flows, the Company considers short-term investments to be cash equivalents.
The renovation is nearing completion with tenant improvement work for one of the larger tenants and retainage work remaining. The occupancy of mall shops and outparcel space at the shopping center as of December 31, 1997 was approximately 85 percent. However, the mall shops and outparcel space are approximately 90 percent leased. Leasing and occupancy at the shopping center had been adversely affected by tenant bankruptcies occurring in 1996.
(a) Mortgage notes payable consist of the following at December 31, 1997 and 1996:
In February 1998, 1225 Investment Corporation paid a dividend of $1,100,000 ($19.95 per share) to the shareholders of record as of December 31, 1997.
On March 1, 2012, we began supplying behavioral health services on an at-risk basis to approximately 7,000 members of a Texas health plan that serves Medicaid and CHIP beneficiaries.
appropriateness of our estimates and we maintain a thorough process to review the application of our accounting policies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
In addition, we began providing autism treatment services in 2010 to the members of a health plan for which there was no historical claims data available upon which to base initial pricing. We therefore included cost sharing/cost savings provisions in the agreement with the health plan whereby we share in the additional cost or cost savings when comparing actual claims costs to the estimated claims costs incorporated into the contract’s pricing. Accordingly, we may adjust our monthly revenue periodically as claims data becomes available to permit a comparison of actual claims costs to targeted claims costs. Such adjustments may be the result of unforeseen fluctuations in utilization, among other factors, and in the past have not been material.
Expected dividends No dividends are expected to be paid for the expected life of the instruments, therefore, we assume a dividend rate of zero.
The carrying amounts and estimated fair values of these financial instruments (all are liabilities) at December 30, 2011 and 2010, are as follows (in thousands):
On September 24, 2010, we entered into a consulting agreement with another former officer in conjunction with his resignation effective of the same date requiring payments aggregating $250,000 over the next year for consulting services intended to improve the efficiency of our clinical operations. Both parties had fulfilled the terms of the agreement as of October 2011.
Protective leases administrative space in Birmingham, Alabama; Brentwood, Tennessee; Greenville, South Carolina; Cary, North Carolina; and Oklahoma City, Oklahoma. Substantially all of these offices are rented under leases that run for periods of three to five years. The aggregate monthly rent is approximately $28 thousand.
Protective generally purchases its investments with the intent to hold to maturity by purchasing investments that match future cash flow needs. The sales of investments that have occurred result from portfolio management decisions to maintain proper matching of assets and liabilities.
In July 1993, Protective acquired Wisconsin National Life Insurance Company ("Wisconsin National"). In addition, Protective reinsured a block of universal life policies.
At December 31, 2007, Infinity had $200 million principal of senior notes due 2014, bearing a fixed 5.5% interest rate (the “Senior Notes”) outstanding. Interest payments on the Senior Notes of $5.5 million are due each February and August through maturity in February 2014. (See Note 3 of the Consolidated Financial Statements for more information on the Senior Notes).
Personal auto gross written premiums in Infinity’s 20 targeted Urban Zones grew 10.9% during 2007 compared with 2006,
The following table reconciles the Company’s U.S. Statutory rate and effective tax rate for the periods ending December 31, 2007, 2006 and 2005.
The Company reported a $3.6 million income tax benefit for the year ended December 31, 1995, primarily due to the recognition in the fourth quarter of an additional $4.0 million tax benefit as a result of the Company increasing its deferred tax asset in accordance with Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes". The Company also recorded a $4.0 million increase in its deferred tax asset in the fourth quarter of 1994. (See "
We have audited the accompanying consolidated balance sheets of Maxicare Health Plans, Inc. as of December 31, 1995 and 1994, and the related consolidated statements of operations, shareholders' equity, and cash flows for the two years then ended. Our audits also included the 1995 and 1994 information with respect to the financial statement schedules listed in the index at item 14(a). These financial statements and schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. The financial statements and schedules of Maxicare Health Plans, Inc. for the year ended December 31, 1993 were audited by other auditors whose report dated March 4, 1994, expressed an unqualified opinion on those statements and schedules.
The Company is authorized to issue 40.0 million shares of $.01 par value Common Stock. Under the Reorganization Plan 10.0 million shares of the Company's Common Stock were issued for the benefit of holders of allowed claims, interest and equity claims. An additional 6.6 million shares were issued upon the conversion of Series A Stock in 1994 and 1995, and .4 million shares were issued in connection with the exercise of warrants issued pursuant to the Reorganization Plan. As of December 31, 1995 approximately 17.4 million shares of the Company's Common Stock were outstanding. The Certificate of Incorporation of the Company prohibits the issuance of certain non-voting equity securities as required by the United States Bankruptcy Code.
In July of 1995, the Company approved the 1995 Stock Option Plan (the "1995 Plan"). Under the terms of the 1995 Plan, the Company may issue up to an aggregate of 1,000,000 nonqualified or incentive stock options to directors, officers and other employees. The following table summarizes information with respect to the 1995 Plan:
For weather-related events such as hurricanes, tornados and hailstorms, we conduct an analysis at least annually pursuant to which we input our in-force exposures (vehicle values in all states and property limits in
Our expenses consist primarily of losses and loss adjustment expenses, or “LAE”; commissions and other underwriting expenses; and other operating and general expenses. Losses and LAE are a function of the amount and type of insurance contracts we write and of the loss experience of the underlying risks. We record losses and LAE based on an actuarial analysis of the estimated losses we expect to be reported on contracts written. We seek to establish case reserves at the maximum probable exposure based on our historical claims experience. Our ability to estimate losses and LAE accurately at the time of pricing our contracts is a critical factor in determining our profitability. The amount reported under losses and LAE in any period includes payments in the period net of the change in the value of the reserves for unpaid losses and LAE between the beginning and the end of the period. Commissions and other underwriting expenses consist principally of brokerage and agent commissions that represent a percentage of the premiums on insurance policies and reinsurance contracts written, and vary depending upon the amount and types of contracts written, and to a lesser extent ceding commissions paid to ceding insurers and excise taxes. Other operating and general expenses consist primarily of personnel expenses (including salaries, benefits and certain costs associated with awards under our equity compensation plans) and other general operating expenses. Other than expenses relating to stock options and other equity grants, our personnel expenses are primarily fixed in nature and do not vary with the amount of premiums written. Interest expenses are disclosed separately from operating and general expenses.
2005 compared to 2004. Net realized gains decreased $1.4 million to $0.3 million for 2005 compared to net realized gains of $1.7 million for 2004. The net realized gain in 2005 was partially offset by an
The effective tax rate for 1999 was 33.5% compared with 38.1% for 1998. The change in the effective tax rate relates to the amortization of non-deductible goodwill in relation to pre-tax income.
Net investment income includes investment income and realized gains. Net investment income for 1998 increased 0.6% to $24.2 million from $24.1 million in 1997. Average annual investment yields, excluding realized gains and losses, were 7.3% for the year ended December 31, 1998, compared to 8.3% for the same period in the prior year. Net investment income for 1997 included $1.4 million of mutual fund distributions which were favorably impacted by foreign financial markets in 1997. Investment gains and losses are realized in the normal investment process in response to market opportunities.
Premiums for group health and life policies are recognized ratably over the period that insurance coverage is provided. Other revenue, including administrative fee income from claim processing and other administrative services, is recognized in the period the service is provided.
The Company had a net federal income tax receivable of $6,377,000 and a net federal income tax payable of $620,000 at December 31, 1999 and 1998, respectively. The Company and its subsidiaries have state net business loss carryforwards totaling $59,858,000 at December 31, 1999, which expire in the year 2010. Federal and state income tax payments related to continuing operations, net of refunds, were $1,496,000 in 1999, $710,000 in 1998 and $3,534,000 in 1997.
The federal deferred benefit arising from the deductibility of state deferred tax is included as a component of other federal deferred taxes. The net deferred tax assets and liabilities are included in other assets and liabilities, as applicable in the accompanying balance sheets.
The Company's employees are included in a defined contribution plan (the "Retirement Savings Plan") with profit sharing and discretionary savings provisions covering all eligible salaried and hourly employees. Beginning in 1998, participant contributions up to 6% of the participants' compensation are matched 50% by the Company. Profit sharing contributions to the Retirement Savings Plan are determined annually by the Company. Participants vest in Company contributions over seven years. The Company recognized expense associated with the Retirement Savings Plan of $1,610,000 and $1,449,000 in 1999 and 1998, respectively.
A primary driver of our results is persistency, due to its impact on both renewal earned premiums and the amortization of DAC. Increased persistency means that more of our business is being retained and renewal earned premiums increase as a result. Further, amortization of DAC is based on assumed persistency levels. When actual persistency levels are lower than that assumed in our DAC models, we accelerate the amortization of DAC expense. Annual persistency levels increased throughout 2004 as refinanced activity slowed from levels experienced in 2003, which reduced DAC amortization expense in the current year from that of 2003.
investment portfolio tax-equivalent yield declined to 6.99% at December 31, 2004 from 7.13% at December 31, 2003.
Of the approximate $580,000 of gross unrealized losses at December 31, 2004, no securities had a fair value to cost or amortized cost ratio of less than 80% and none were included in our potentially distressed securities list mentioned above.
During 2003, we wrote down five securities by a total of approximately $779,000. Further details on the significant write-downs in 2003 are as follows:
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Triad Guaranty Inc. as of December 31, 2004 and 2003, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2004 of Triad Guaranty Inc. and our report dated March 10, 2005 expressed an unqualified opinion thereon.
December 23, 2004 - Triad Guaranty Inc. terminated its administrative services agreement (formerly Exhibit 10.3) and entered into a new agreement for administrative and support services.
Chief Executive Officer Sarbanes-Oxley Act Section 302 Certification dated March 11, 2005, for the Triad Guaranty Inc.’s Annual report on Form 10-K for the year ended December 31, 2004
At December 31, 2004 and 2003, investments with an amortized cost of $6,463,000 and $6,556,000, respectively, were on deposit with various state insurance departments to satisfy regulatory requirements.
The Company maintains $125,000,000 of excess of loss reinsurance through non-affiliated reinsurers. The excess of loss reinsurance agreements are designed to protect the Company in the event of a catastrophic level of losses.
Unifax sells and services insurance policies for Crusader. The commissions paid by Crusader to Unifax are eliminated as intercompany transactions and are not reflected as income in the Company’s consolidated financial statements. Policy fee income for the year ended December 31, 2017, decreased $69,623 (4%) as compared to the year ended December 31, 2016. The policy fee income is earned ratably over the life of related insurance policies.
AIB markets health insurance in California through non-affiliated insurance companies for individuals and groups. For these services, AIB receives commission based on the premium that it writes. Commission income for the year ended December 31, 2017, increased $87,783 (9%) compared to the year ended December 31, 2016. The increase in commission income is primarily a result of a cumulative commission correction of $68,971 by the non-affiliated insurance carriers received during the three months ended March 31, 2017.
(2) $500,000 and $600,000 included in fixed maturity investments as of December 31, 2017 and 2016, respectively, and $200,000 and $100,000 included in short-term investments as of December 31, 2017 and 2016, respectively, are statutory deposits assigned to and held by the California State Treasurer and the Insurance Commissioner of the State of Nevada. These deposits are required for writing certain lines of business in California and for admission in states other than California.
In December 1993, the NAIC adopted a Risk-Based Capital (“RBC”) Model Law for property and casualty companies. The RBC Model Law is intended to provide standards for calculating a variable regulatory capital requirement related to a company’s current operations and its risk exposures (asset risk, underwriting risk, credit risk and off-balance sheet risk). These standards are intended to serve as a diagnostic solvency tool for regulators that establishes uniform capital levels and specific authority levels for regulatory intervention when an insurer falls below minimum capital levels. The RBC Model Law specifies four distinct action levels at which a regulator can intervene with increasing degrees of authority over a domestic insurer if its RBC is equal to or less than 200% of its computed authorized control level RBC. A company’s RBC is required to be disclosed in its statutory annual statement. The RBC is not intended to be used as a rating or ranking tool nor is it to be used in premium rate making or approval. Crusader’s adjusted capital at December 31, 2017, was 716% of authorized control level RBC.
legislative or regulatory proposals or changes, including the changes in law and regulation implemented under the Sarbanes-Oxley Act of 2002;
We analyze loss reserves in two categories: (1) reserves relating to all claims other than asbestos and toxic waste claims and (2) reserves relating to asbestos and toxic waste claims.
In the third quarter of 2002, our actuaries and claim personnel, together with our outside actuarial consultants, commenced their periodic ground-up exposure-based analysis of our asbestos related exposures. As part of this analysis, they considered the following adverse trends:
Estimates of the ultimate liabilities for traditional asbestos defendants had increased as the number of claims had surged over the past few years. The notable increase in claimants as well as potential future claimants had resulted in large settlements of asbestos related litigation. As a result, it appeared more likely that many of these traditional defendants would access higher excess layers of insurance coverage as well as more years of coverage than previously anticipated.
Under the federal “Superfund” law and similar state statutes, when potentially responsible parties (PRPs) fail to handle the clean-up at a hazardous waste site, regulators have the work done and then attempt to establish legal liability against the PRPs. Most sites have multiple PRPs.
In June 2003, a shelf registration statement that the Corporation filed in March 2003 was declared effective by the Securities and Exchange Commission. Under the registration statement, up to $2.5 billion of various types of securities may be issued. At December 31, 2004, the Corporation had approximately $650 million remaining under the shelf registration statement.
In July 1998, the Board of Directors authorized the repurchase of up to 12,500,000 shares of the Corporation’s common stock. In June 2001, the Board of Directors authorized the repurchase of up to an additional 16,000,000 shares. The 1998 authorization has no expiration; the 2001 authorization expired on June 30, 2003. As of December 31, 2004, 3,287,100 shares remained under the 1998 share repurchase authorization. The Corporation made no share repurchases during 2004 and 2003. The Corporation repurchased 1,500,000 shares in open-market transactions in 2002 at a cost of $99 million.
The Company also owns several parcels and one building adjacent to the Company's facility.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
The Company maintains cash accounts with a number of financial institutions in the PRC. As of December 31, 2010, the Company has cash concentration risk of $5,077,370 which held by two financial institutions in the PRC as follow:
Management believes, based on the discounted cash flows using current interest rates, the fair value of loans receivable approximates the carrying value at December 31, 2010.
Under the current BVI law, LTL is not subject to tax on income.
CCG is registered and operates in Shenzhen City, the PRC and is recognized as “Enterprise Located in Special Economic Zone”. Hence, the Company is entitled to Corporate Income Taxes (“CIT”) at a preferential tax rate of 15%. For the years ended December 31, 2010 and 2009, the Company has established various provincial and municipal branches, as well as representative offices in the PRC, which are generally subject to the statutory tax rate of 25%. Under a transitional policy under the CIT Law, the Company will continue to enjoy the unexpired tax holiday in a special economic zone in Shenzhen City and its applicable tax rate will be increased progressively to 25% over a 5-years’ period, starting from January 1, 2008.
The following table includes the loss development history of loss and loss adjustment expense reserves of Specialty Underwriters’ Alliance, Inc. for business generated subsequent to its acquisition of Potomac Insurance Company of Illinois on November 23, 2004. The Company did not commence its operations until 2005.
Specialty Risk Solutions, LLC, or SRS, specializes in providing general liability to the public entity segment including schools, municipalities and special districts. SRS signed a partner agent program agreement with us in May 2005. Total written premiums for the year ended December 31, 2005 were $7.0 million all within California and Florida.
Our direct loss and loss adjustment expense ratios by statutory line of business were as follows:
We are organized as a holding company and, as such, have no direct operations of our own. Our assets consist primarily of investments in our subsidiary, through which we conduct substantially all of our insurance operations.
Net premiums written consists of direct premiums written less ceded premiums. The components of net premiums written are recognized as revenue over the period that coverage is provided. When premium rates increase, the effect of those increases will not immediately affect earned premium. Rather, those increases will be recognized ratably over the period of coverage. Unearned premiums and prepaid reinsurance premiums, which are recorded on the balance sheets, will represent that portion of premiums written that are applicable to the unexpired terms of policies in force. Certain policies are subject to adjustment based on changes in exposure units over the period of coverage, such as payroll increases/decreases and changes in risk
classifications and therefore the direct written premiums are estimated during the policies term until final audit of the policy occurs.
We establish an asset for deferred policy acquisition costs such as up-front commissions, premium taxes and other variable costs incurred in connection with writing our lines of business. Deferred policy acquisition costs will be amortized over the period of coverage of the policies written. We assess the recoverability of deferred policy acquisition costs. The loss and loss adjustment expense ratio we use to estimate the recoverability of deferred costs is based primarily on the assumption that the future loss and loss adjustment expense ratio will include consideration of the recent experience. Such adjustments, if any, are recorded through operations in the period identified. Actual results could differ materially from such estimates, requiring future adjustments to the recorded deferred policy acquisition cost asset.
Total mortgage originations in 2018 declined for the second consecutive year as refinancing lending decreased 29% in 2018 compared to 2017. However, Fannie Mae forecasts total mortgage originations to stabilize in 2019 with purchase lending expected to modestly increase 2%, offsetting the forecasted 8% further decline in refinancing lending. Compared to the prior year, 2018 new home sales remained flat, while 2018 existing home sales declined 3% influenced by higher mortgage interest rates and increased home prices. For the three years ended December 31, 2018, average monthly mortgage interest rates (30-year, fixed-rate) have risen from a low of 3.44% in July 2016 to a high of 4.87% in November 2018. For the year 2019, Fannie Mae projects the 30-year mortgage rate to average at 4.5%, comparable to 2018, and new and existing home sales volumes to remain similar to 2018 volumes.
Cash and cash equivalents held at the parent company totaled $24.8 million at December 31, 2018. As a holding company, the parent company is funded principally by cash from its subsidiaries in the form of dividends, operating and other administrative expense reimbursements and pursuant to intercompany tax sharing agreements. The expense reimbursements are paid in accordance with management agreements, approved by the Texas Department of Insurance (TDI), among us and our subsidiaries. In addition to funding operating expenses, cash held at the parent company is used for dividend payments to common stockholders and for stock repurchases, if any. To the extent such uses exceed cash available, the parent company is dependent on distributions from its regulated title insurance underwriter, Stewart Title Guaranty Company (Guaranty).
Investment income in 2002 was $6,368,353 compared to $6,150,764 and $4,808,908 for the years ended December 31, 2001 and 2000, respectively. The small increase in investment income during 2002 compared to 2001 is primarily attributable to gains realized on the sale of investment securities, which was attributable to the positive impact of lower interest rates on the value of the Company's fixed income securities. The increase in investment income during 2001 compared to 2000 arose primarily as a result of gains realized on the sale of investment securities. Such gains were largely attributable to the positive impact of lower interest rates on the value of the Company's fixed income securities.
The Company's investment in the Fund was reviewed using the applicable criteria described above and such review also included the following procedures to determine whether any charge for other than temporary impairment was necessary:
The following table sets forth an analysis of changes in the reserves for unpaid losses for the years ended December 31, 2002, 2001, and 2000:
Under the provisions of the retrocession agreement, the Company will assume future additional premiums of $27,827,390 ($29,878,041 at December 31, 2001) relating to premiums written by Motors
ii) the related subsidiary capital account meets those requirements after giving effect to the dividend.
During 2002, the Company entered a recapture agreement with MIC for one series of Participating Stock. Under the agreement MIC recaptured premiums of $1,635,656, which represents unearned premiums and an amount equal to $57,426 for losses incurred, but unpaid with respect to the recaptured business as of June 30, 2002. Additionally, MIC has paid the Company a recapture commission of $391,954 and a refund of U.S. Federal Excise Tax of $16,357, which represents the deferred portion of the ceding commissions and taxes previously paid by the Company. Upon recapturing these shares, such amounts were transferred into a new series of Participating Stock of another mechanical service contract reinsurance company that assumes business from MIC.
In accordance with Article 30 of the Artic­ les of Association, the Board of Directors propose that the General Meeting should allocate the net profit as follows: 5 % Statutory Dividend Staff Life Assurance and Pension Fund Directors' Remuneration
Reinsurances Reinsurances Own Own Assumed Ceded Account Account a b a—b
Net investment income increased as a result of growth in the amount of invested assets from positive cash flows over the past year combined with capital contributions totaling $52.5 million. Net invested assets increased to $640.5 million as of December 31, 2004 compared to $473.0 million and $309.3 million as of December 31, 2003 and 2002, respectively
The Company monitors its consolidated credit risk. The Company reviews credit risk from a variety of sources: credit risk from financial institutions; investment risk; counter-party risk from reinsurers; premium receivables; notes receivable and long-term investment assets; loss sensitive underwriting accounts; and key vendor relationships.
Reinsurance Recoverables. Reinsurance recoverables recorded with respect to insurance losses ceded to reinsurers under reinsurance contracts are also subject to estimation error. Ceding ratios are determined using actuarial assumptions, and therefore, are subject to the same uncertainties as reserves for losses and loss adjustment expenses. Additionally, estimates of reinsurance recoverables may prove uncollectible if the reinsurer is unable or unwilling to perform under the contract. The ceding of insurance does not legally discharge the ceding company from its primary liability for the full amount of the policies, and the ceding company is required to pay the loss and bear collection risk if the reinsurer fails to meet its obligation under the reinsurance agreement. The Company evaluates the balances due from reinsurance companies for collectibility, and when indicated, in management’s opinion, issues of collectibility exist, establish an allowance for doubtful accounts.
Our life insurance segment establishes, and carries as liabilities, actuarially determined amounts that are calculated to meet its policy obligations when a policy matures or surrenders, an insured dies or becomes disabled or upon the occurrence of other covered events. A significant portion of the estimated obligation for future policy benefits to be paid included in this table considers contracts under which we are currently not making payments and will not make payments until the occurrence of an insurable event not under our control, such as death, illness, or the surrender of a policy. We have estimated the timing of the cash flows related to these contracts based on historical experience as well as expectations of future payment patterns. The amounts presented in the table above represent the estimated cash payments for benefits under such contracts based on assumptions related to the receipt of future premiums and assumptions related to mortality, morbidity, policy lapses, renewals, retirements, disability incidence and other contingent events as appropriate for the respective product type. All estimated cash payments included in this table are not discounted to present value nor do they take into account estimated future premiums on policies in-force as of December 31, 2012 and are gross of any reinsurance recoverable. The $301.8 million total estimated cash flows for all years in the table is different from the liability of future policy benefits of $276.6 million included in our audited consolidated financial statements principally due to the time value of money. Actual cash payments to policyholders could differ significantly from the estimated cash payments as presented in this table due to differences between actual experience and the assumptions used in the estimation of these payments.
To operate in Puerto Rico, insurance companies, such as our insurance subsidiaries, are required to participate in guarantee associations, which are organized to pay policyholders contractual benefits on behalf of insurers declared to be insolvent. These associations levy assessments, up to prescribed limits, on a proportional basis, to all member insurers in the line of business in which the insolvent insurer was engaged. During the years ended December 31, 2012, 2011 and 2010, no assessment or payment was made in connection with insurance companies declared insolvent. It is the opinion of management that any possible future guarantee association assessments will not have a material effect on our operating results and/or cash flows, although there is no ceiling on these payment obligations.
Claim liabilities by segment as of December 31, 2012 were as follows:
Management expects that substantially all of the development of the 2012 estimate of medical claims payable will be known during 2013 and that the variance of the total incurred claims on a retrospective basis when compared to reported incurred claims will be similar to the prior years.
The above table has been restated to reflect the adoption of Statement of Financial Accounting Standards No. 113 "Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration Contracts" in 1993 and for the sale of the Company's investment banking group and certain other operations in 1990.
the prior year, while interest expense decreased $.1 million due to lower interest rates. Selling, general and administrative expenses increased $.9 million reflecting an increase in minority interest of $.3 million due to higher net income and an increase of $.6 million in general expenses due to the higher sales volume.
State insurance laws restrict the Insurance Group's ability to make dividend payments to the parent company [see Note 19 of Notes to Consolidated Financial Statements]. Regulatory constraints have historically not affected IHC's consolidated liquidity, although they have limited the ability of the parent company to use cash generated by the Insurance Group to fund operating expenses, interest and dividend payments at Corporate.
Loss ratio is calculated by dividing the provision for losses and loss adjustment expenses ("LAE") by net premiums earned.
We also offer mortgage-related insurance and reinsurance through our wholly-owned Bermuda-based subsidiary, Essent Reinsurance Ltd., which we refer to as "Essent Re." As of December 31, 2017, Essent Re provided insurance or reinsurance relating to the risk in force on loans in reference pools acquired by Freddie Mac and Fannie Mae covering approximately $538.9 million of risk, including in connection with Freddie Mac's Agency Credit Insurance Structure ("ACIS") and Fannie Mae's Credit Insurance Risk Transfer ("CIRT") programs. Essent Re has also reinsured 25% of Essent Guaranty, Inc.'s GSE-eligible mortgage insurance NIW originated since July 1, 2014 under a quota share reinsurance agreement. The insurer financial strength rating of Essent Re is BBB+ with a stable outlook by S&P.
During the third quarter of 2017, certain regions of the U.S. experienced hurricanes which have impacted our insured portfolio’s performance. Specifically, on August 26, 2017, Hurricane Harvey made landfall in southeastern Texas and on September 10, 2017, Hurricane Irma made landfall in southern Florida and caused property damage in certain counties. Loans in default increased by 3,026 in the year ended December 31, 2017, including 2,288 defaults we identified as hurricane-related defaults. Based on prior industry experience, we expect the ultimate number of hurricane-related defaults that result in claims will be less than the default-to-claim experience of non-hurricane-related defaults. In addition, under our master policy, our
As of December 31, 2017, our combined net risk in force for our U.S. insurance companies was $21.6 billion and our combined statutory capital was $1.5 billion, resulting in a risk-to-capital ratio of 14.2:1. The amount of capital required varies
For the year ended December 31, 2017, we reported net income of $379.7 million, compared to net income of $222.6 million for the year ended December 31, 2016. The increase in our operating results in 2017 over 2016 was primarily due to the increase in net premiums earned associated with the growth of our IIF, the increase in net investment income and the decrease in income taxes due largely to an $85.1 million income tax benefit associated with the one-time impact of the reduced U.S. corporate income tax rate on the company's net deferred tax liability position. These increases were partially offset by increases in other underwriting and operating expenses, the provision for losses and loss adjustment expenses and interest expense.
In August 2017, Essent Group completed the sale of 5.0 million Common Shares in a public offering at a price of $39.90 per share. The total net proceeds from this offering were approximately $197.7 million after deducting underwriting discounts, commissions and other offering expenses.
The Agreement also provides that the parties will cooperate in good faith to develop an alternative rate dispute resolution process within 90 days of the execution of the Agreement or such later date as the parties agree. As of the date of the filing of this Annual Report on Form 10-K, the parties have not reached an agreement with respect to such an alternative rate dispute resolution process. There can be no assurance that the parties will ultimately reach such an agreement, and if they are unable to do so, future rate disputes will be handled through the process currently in effect. See "-Recent Developments" for additional information.
In addition to the beneficiaries that we service under the T-3 contract, we administer contracts with the U.S. Department of Veterans Affairs to manage community-based outpatient clinics in seven states covering approximately 14,000 enrollees and provide behavioral health services to military families under the Department of Defense sponsored MFLC program.
Goodwill and other intangible assets arise primarily as a result of various business acquisitions. Goodwill consists of the excess of the cost of acquisitions over the tangible and intangible assets acquired and liabilities assumed. Other intangible assets consist of identifiable intangible assets acquired and the value of employer group contracts, provider networks and customer relationships, which are all subject to amortization.
is probable certain positions will be challenged by taxing authorities, and we may not prevail on the positions as filed. Accordingly, we maintain a liability for the estimated amount of contingent tax challenges by taxing authorities upon examination. We analyze the amount at which each tax position meets a “more likely than not” standard for sustainability upon examination by taxing authorities. Only tax benefit amounts meeting or exceeding this standard will be reflected in tax provision expense and deferred tax asset balances. Any differences between the amounts of tax benefits reported on tax returns and tax benefits reported in the financial statements is recorded in a liability for unrecognized tax benefits. The liability for unrecognized tax benefits is reported separately from deferred tax assets and liabilities and classified as current or noncurrent based upon the expected period of payment.
after January 1, 1995. The agreement applies to only that portion of the face amount of the policy which is less than $200,000; face amounts of $200,000 or more are reinsured by Family Life with a third party reinsurer. In 1996, Investors-NA entered into a reinsurance agreement with Family Life, pertaining to annuity contracts written by Family Life. The agreement applies to contracts written on or after January 1, 1996. These reinsurance arrangements reflect management's plan to develop universal life and annuity business at Investors-NA, with Family Life concentrating on the writing of term life insurance products.
expects that the cost of implementing and completing the Plan will result in an after-tax expense of approximately $587,000 for the three-year (1997 - 1999) conversion period. For the twelve month period ended December 31, 1998, the Company has incurred an after tax expense of approximately $158,000 in connection with the completion of the Plan. Between January 1, 1997 and December 31, 1998, the Company has expended approximately 50.7% of the three-year expected after-tax cost discussed above. In the event that the Plan does not achieve full compliance by the target dates, or if unforeseen matters involving Y2K appear before or after January 1, 2000, the Company will utilize the staff of FIC Computer Services, Inc. to identify and resolve such issues as and if they arise.