felanders/preprocessed huggingface dataset:
Total dividends declared were $4,272,067, $803,430 and $821,556, in 2003, 2002 and 2001, respectively. Continuation of quarterly dividend payments is subject to the Board of Directors’ continuing evaluation of our level of surplus compared to our capacity to accept more business. One of our objectives is to build surplus to retain flexibility for future business expansions. We do not have any current plans to declare any more special dividends.
The consolidated financial statements include our established liability for unpaid losses and loss adjustment expenses (“LAE”) for our insurance operations. LAE is determined utilizing both case-basis evaluations and actuarial projections, which together represent an estimate of the ultimate net cost of all unpaid losses and LAE incurred through December 31 of each year. These estimates are subject to the effect of trends in future claim severity and frequency. The estimates are continually reviewed and, as experience develops and new information becomes known, the liability is adjusted as appropriate, and reflected in current financial reports.
Premiums assumed are earned on a pro rata basis over the terms of the underlying policies to which they relate. Premiums assumed relating to the unexpired portion of policies in force at the balance sheet date are recorded as unearned premiums. Pursuant to prior retrocession agreements, charges or credits resulting from adjustments to related provisional retrocession premiums are reflected as adjustments to ceded premiums. Management believes that recorded retrocession premiums ceded represent its best estimate of such amounts; however, as changes in the estimated ultimate losses and loss adjustment expenses applicable to the retrocession layers are determined, the estimated ultimate ceded premiums will also change. As adjustments to these estimates become necessary, such adjustments are reflected in current operations.
AMIG Ltd. classifies their investments as available-for-sale. Accordingly, AMIG Ltd. reports these securities at their estimated fair values with unrealized holding gains and losses being reported as other comprehensive income. Fair value of investments is based on market quotation. Realized gains and losses on sales of investments are accounted for by specifically identifying the cost and are reflected in the income statement in the period of sale.
Medicaid and SCHIP health benefits ratio, or HBR, of 83.2%, SSI HBR of 92.0%, Specialty Services HBR of 78.2%.
Effective January 1, 2006, we acquired US Script, Inc., or US Script, a pharmacy benefits manager (PBM).
Our Medicaid Managed Care segment generates revenues primarily from premiums we receive from the states in which we operate health plans. We receive a fixed premium per member per month pursuant to our state contracts. We generally receive premium payments during the month we provide services and recognize premium revenue during the period in which we are obligated to provide services to our members. Some states enact premium taxes or similar assessments, collectively, premium taxes, and these taxes are recorded as a component of revenue as well as operating expenses. Some contracts allow for additional premium associated with certain supplemental services provided such as maternity deliveries. Revenues are recorded based on membership and eligibility data provided by the states, which may be adjusted by the states for updates to this data. These adjustments have been immaterial in relation to total revenue recorded and are reflected in the period known.
In March 2007, we issued $175 million aggregate principal amount of our 7 ¼% Senior Notes due April 1, 2014, or the Notes. In July 2007, the Notes were registered under the Securities Act of 1933, pursuant to a registration rights agreement with the initial purchasers. The indenture governing the Notes contains non-financial and financial covenants, including requiring a minimum fixed charge coverage ratio. Interest is paid semi-annually in April and October. We used a portion of the net proceeds from the offering to refinance approximately $150.0 million of our existing indebtedness which was outstanding under our revolving credit facility. The additional proceeds will be used for general corporate purposes. As of December 31, 2007, we were in compliance with all covenants.
Our measurement of fair value is based on assumptions used by market participants in pricing the asset or liability, which may include inherent risk, restrictions on the sale or use of an asset or non-performance risk (“NPR”), which would include our own credit risk. Our estimate of an exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability (“exit price”) in the principal market, or the most advantageous market in the absence of a principal market, for that asset or liability, as opposed to the price that would be paid to acquire the asset or receive a liability (“entry price”). Pursuant to the Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards CodificationTM (“ASC”), we categorize our financial instruments carried at fair value into a three-level fair value hierarchy, based on the priority of inputs to the respective valuation technique.
Certain of our variable annuity contracts reported within future contract benefits contain GLB reserves embedded derivatives, a portion of which may be reported in either other assets or other liabilities, and include guaranteed interest and similar contracts, that are carried at fair value on our Consolidated Balance Sheets, which represents approximate exit price including an estimate for our NPR. Certain of
In May 2016, the capital securities due 2066 changed from a 7.00% fixed rate to a floating rate of LIBOR + 236 bps. In April 2017, the capital securities due 2067 changed from a 6.05% fixed rate to a floating rate of LIBOR + 204 bps. To hedge the variability in rates, we purchased forward starting swaps to lock in a fixed rate of approximately 5% over the remaining terms of the capital securities, respectively.
Glover v. Connecticut General Life Insurance Company and The Lincoln National Life Insurance Company, filed in the U.S. District Court for the District of Connecticut, No. 3:16cv00827, is a putative class action that was served on LNL on June 8, 2016. Plaintiff is the owner of a universal life insurance policy who alleges that LNL charged more for non- guaranteed cost of insurance than permitted by the policy. Plaintiff seeks to represent all universal life and variable universal life policyholders who owned policies containing non-guaranteed cost of insurance provisions that are similar to those of Plaintiff’s policy and seeks damages on behalf of all such policyholders. We are vigorously defending this matter.
The profitability of our homeowners business each year is affected substantially by the extent of catastrophe losses experienced. Homeowners results were unprofitable in 1996 as catastrophe losses, particularly the winter storms, adversely affected results. Homeowners results were profitable in 1995, benefiting from lower catastrophe losses, fewer large losses and a reduction in loss frequency. The
Multiple peril results were unprofitable in each of the past three years due, in large part, to inadequate prices. Results deteriorated in 1996 due primarily to higher catastrophe losses and an increase in the frequency of large losses. Results for this class benefited in 1995 from an absence of catastrophe losses. Results in 1994 were adversely affected by significant catastrophe losses, primarily from the earthquake in California. Catastrophe losses represented 4.8 percentage points of the loss ratio for this class in 1996 compared with 1.0 percentage point in 1995 and 9.7 percentage points in 1994.
Real estate operations resulted in a loss after taxes of $147 million in 1996 compared with income of $6 million in 1995 and a loss of $2 million in 1994. The loss in 1996 reflects the $160 million after tax impairment charge. Excluding this charge, real estate income after taxes was $13 million. Results in 1996 benefited from the sale of several rental properties and a decrease in interest expense caused by lower average interest rates. Results in 1995 benefited from a land sale. Results in both years benefited from increases in earnings from residential sales as well as from lower provisions for possible uncollectible mortgages receivable. In each of the last three years, results were adversely affected by a high proportion of interest costs being charged directly to expense rather than being capitalized.
Sales of equity securities in each of the last three years resulted in realized investment gains due primarily to the significant appreciation in the United States equity markets. In 1995 and 1994, sales of equity securities were in part the result of the redistribution of invested assets from equity securities to fixed maturities. A primary reason for the sale of fixed maturities in each of the last three years has been to improve our after-tax portfolio return without sacrificing quality where market opportunities have existed to do so.
1997: ----- . A gain of $1,870,000 ($1,234,000 or $0.20 per share net of tax) on the sale of the rights to future certain asset-based fee revenues to a client financial institution.
. A $2,106,000 or 76% reduction in wages, commissions and benefits due to termination of the Company's retail sales operations at the end of 1997; and
. Recovery on settlement of legal proceedings for amounts paid on the Marketing Plan as well as expenses incurred on the proposed merger of $500,000 ($322,000 or $0.05 per share net of tax).
The Company announced at the end of 1997 that it would be terminating its retail sales bank programs. Accordingly, the Company has substantially exited from its traditional lines of business. The Company will continue to service and maintain all annuity contracts and mutual fund accounts in place at the end of 1998 in order to maximize the return on those assets.
all services which it has been contracted to provide. Should services from third parties discontinue, whether due to non-compliance with Year 2000 issues or from any natural disaster, the Company plans to continue providing assistance to its customers.
We sponsor certain frozen pension and other post-retirement benefit plans. See Note O. Employee Benefit Plans to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for further information.
On November 17, 2017, we completed our previously announced split-off (the “FNFV Split-Off”) of our former wholly-owned subsidiary Cannae Holdings, Inc. (“Cannae”) which consisted of the businesses, assets and liabilities formerly attributed to our FNF Ventures ("FNFV") Group including Ceridian Holding, LLC, American Blue Ribbon Holdings, LLC and T-System Holding LLC. The FNFV Split-Off was accomplished by the Company's redemption (the “Redemption”) of all of the outstanding shares of FNFV Group common stock, par value $0.0001 per share (“FNFV common stock”) for outstanding shares of common stock of Cannae, par value $0.0001 per share (“Cannae common stock”), amounting to a redemption of each outstanding share of FNFV common stock for one share of Cannae common stock, as of November 17, 2017. As a result of the FNFV Split-Off, Cannae became a separate, publicly-traded company (NYSE: CNNE) as of November 20, 2017. All of the Company’s core title insurance, real estate, technology and mortgage related businesses, assets and liabilities currently attributed to the Company’s FNF common stock that were not held by Cannae remain with the Company. As a result of the FNFV Split-Off, the financial results of FNFV Group have been reclassified to discontinued operations for the years ended December 31, 2017 and 2016.
At December 31, 2018 and 2017, we had $41 million and $40 million of tax credits, respectively. The credits primarily consist of general business credits from historical acquisitions. We anticipate that these credits will be utilized prior to expiration after a valuation allowance of $21 million on the general business credits.
The Internal Revenue Service (“IRS”) has selected us to participate in the Compliance Assurance Program that is a real-time audit. We are currently under audit by the Internal Revenue Service for the 2016 through 2019 tax years. We file income tax returns in various foreign and US state jurisdictions. Our state income tax returns for the 2012 through 2018 tax years remain subject to examination by state jurisdictions.
The discount rate used to determine the benefit obligation as of the years ended December 31, 2018 and 2017 was 3.90% and 3.34%, respectively. As of the years ended December 31, 2018 and 2017 the projected benefit obligation was $150 million and $166 million, respectively, and the fair value of plan assets was $144 million and $162 million, respectively. The net pension liability and net periodic expense included in our financial position and results of operations relating to these plans is not considered material for any period presented.
The National Association of Insurance Commissioners' ("NAIC") risk-based capital ("RBC") formulas determine the amount of capital that an insurance company needs to ensure that it has an acceptable expectation of not becoming financially impaired. At December 31, 1998, the capital ratio of each of AAG's principal insurance subsidiaries was at least 4.8 times its authorized control level RBC.
Approximately 40% of the operating units are currently on target with their internal plans to be completed in the second quarter of 1999. Approximately 50% of the operating units have experienced some delay and their overall projects are running behind schedule on internally established timelines. These groups are expected to be complete in the third quarter of 1999. One important replacement application experienced a significant delay from its original targeted completion date. This project was reorganized and restaffed in the fourth quarter of 1998, and management believes the project has made significant progress. This application is currently involved in testing and is expected to be completed and in operation in the third quarter of 1999.
Net operating earnings per common share (basic) $ 1.77 $ 1.60 $ 1.40
Accounting Subject of Standard - Standard (Year Implemented) Reference (See Note B) SFAS #128 Earnings Per Share (1997) "Earnings Per Share" SFAS #130 Comprehensive Income (1998) "Comprehensive Income" SFAS #131 Segment Information (1998) "Segment Information" SFAS #133 Derivatives (2000) "Derivatives" SOP 98-5 Start-Up Costs (1999) "Start-Up Costs"
AAG's life, accident and health businesses sell various forms of life and supplemental health products in the United States and Puerto Rico. Sales in Puerto Rico accounted for nearly one-half of AAG's life, accident and health premiums in 1998.
Amounts applicable to extraordinary items 0.4 0.8 3.2 Provision for income tax as shown on the Consolidated Income Statement $ 46.0 $ 32.8 $17.4
1998 1997 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value Assets Fixed maturity investments $6,023.1 $6,023.1 $6,375.8 $6,440.0 Equity securities 85.2 85.2 83.0 83.0 Investment in affiliate 15.9 25.6 16.8 43.6
Diluted: Continuing operations $0.59 $0.49 $0.85 $0.30 $2.23 Extraordinary items (0.02) - - - (0.02) Net income $0.57 $0.49 $0.85 $0.30 $2.21
Earnings (loss) per common share: Basic: Continuing operations $0.39 $0.41 $0.38* $0.45 $1.63 Extraordinary items - - (0.03) - (0.03) Net income $0.39 $0.41 $0.35* $0.45 $1.60
Selected Quarterly Financial Data is included in Note Q to the Consolidated Financial Statements.
The information required by this item is found at pages 22-23 in the Annual Report for 1999 under the caption "Selected Consolidated Financial and Operating Data" which section is incorporated herein by reference
The net decrease in net assets for the year ended December 31, 2018 was $48.7 million as compared to a net increase in net assets of $11.3 million for the year ended December 31, 2017.
The Trust’s total outstanding liabilities decreased by $23.6 million from $93.7 million at December 31, 2018, to $70.1 million at December 31, 2019. The decrease was mainly attributable to the expenditure of cash to pay outstanding liabilities related to notes payable and a decrease in maturity liabilities.
As of December 31, 2019, and December 31, 2018, the Trust holds $33.2 million and $33.2 million, respectively, in escrow for future payment of premium obligations. To the extent advanced premiums received from continuing fractional holders are not used for premium payments, they are refunded to the respective continuing fractional holder.
Longevity risk refers to the reasonable possibility that actual mortalities of insureds in the Trust’s portfolio extend over longer periods than are anticipated, resulting in the Trust paying more in premiums and delaying its collection of death benefits. Further, increased longevity may encourage additional continuing fraction holders to default on their premium obligations, increasing the Trust’s positions and its premium payment burden. The Trust management is still evaluating any potential impact; however, such future revisions could have a material impact on the valuation.
Gains and losses on sales of investments and fair value changes in investments accounted for by the equity method are classified as “realized investment gains (losses)” and recorded as revenue. Capital appreciation and depreciation caused by changes in the market value of investments classified as “available for sale” is recorded in accumulated other comprehensive income. The amount of investment gains and losses that we recognize depends on the amount of and the types of invested assets we own and the market conditions related to those investments. Our cash needs can vary from time to time and could require that we sell invested assets to fund cash needs.
The following table sets forth the maturity profile of our debt securities at December 31, 2018 and 2017. Expected maturities could differ from contractual maturities because borrowers may have the right to call or prepay obligations, with or without penalty.
Selected Quarterly Financial Data for Fiscal Years 2000 and 1999 (Unaudited)............................................... 47
Interest expense paid in cash during 2000, 1999 and 1998 was approximately $444,000, $523,000 and $417,000, respectively.
In years 1990 through 1996, and years 1998 through 2000, MAMSI implemented a non-qualified stock option plan whereby options for the purchase of shares of common stock may be granted to directors, officers and employees of the Company. Unexpired authorized shares under the plans total 11,000,000. Options under the plans generally vest over a three-year period and are exercisable at 100% of the fair market value per share on the date the options are granted. The Company accounts for these stock option grants in accordance with APB 25, and, accordingly, recognizes no compensation expense for these stock option grants. Transactions relating to the plans are summarized as follows:
During 2000 and 1999, the SCT purchased an additional 2,000,000 and 3,000,000 shares, respectively, of the Company's common stock for approximately $28.7 and $31.8 million, respectively. The existing promissory note has been modified to reflect these purchases.
Income tax expense: We incur federal income tax expense on our consolidated statement of operations as well as state income tax expense for our non-insurance underwriting subsidiaries.
Cash and invested assets were $222,314,000 as of December 31, 2020 compared to $231,700,000 as of December 31, 2019. The $9,386,000 decrease in cash and invested assets was primarily attributable to a decrease in operating cash flows for the Year Ended 2020.
The net loss ratio was 61.5% for Year Ended 2020. Despite the significant impact from Tropical Storm Isaias in August, the loss ratio for Year Ended 2020 still improved 9.2 points, from 70.7% in Year Ended 2019. The loss ratio improved due to several factors, including a reduced impact from prior year loss development and an improvement in underlying loss ratio driven by reduced severity.
See discussions above with regard to “Net Loss and LAE”, as to catastrophe losses in the years ended December 31, 2020 and 2019.
Total investment real estate holdings represent approximately 3% of the total assets of the Company net of accumulated depreciation of $58,225 and $251,766 at year-end 2001 and 2000 respectively. The Company owns an office complex in Springfield, Illinois, which houses the primary insurance operations. The office buildings contain 57,000 square feet of office and warehouse space. The properties are carried at $1,992,317. Currently, the facilities occupied by the Company are adequate relative to the Company's present operations.
The following table summarizes the Company's fixed maturities distribution at December 31, 2001 and 2000 by ratings category as issued by Standard and Poor's, a leading ratings analyst.
CONSOLIDATED BALANCE SHEET FIRST COMMONWEALTH CORPORATION CONSOLIDATED BALANCE SHEETS As of December 31, 2001 and 2000
Q. TREASURY SHARES - The Company holds 1,100 and 1,092 shares of common stock as treasury shares with a cost basis of $3,479,400 and $3,478,600 at December 31, 2001 and 2000, respectively.
R. PARTICIPATING INSURANCE - Participating business represents 22% and 23% of the ordinary life insurance in force at December 31, 2001 and 2000, respectively. Premium income from participating business represents 26%, 27%, and 29% of total premiums for the years ended December 31, 2001, 2000 and 1999, respectively. The amount of dividends to be paid is determined annually by the respective insurance subsidiary's Board of Directors. Earnings allocable to participating policyholders are based on legal requirements that vary by state.
2001 2000 ---------------------------------------------------------------------- Estimated Estimated Carrying Fair Carrying Fair Assets Amount Value Amount Value -------------- --------------- --------------- -------------- Fixed maturities $ 75,005,395 $ 77,725,410 $ 121,922,963 $ 122,623,563 Fixed maturities held for sale 98,628,440 98,628,440 43,128,280 43,128,280 Equity securities 3,852,716 3,852,716 5,126,271 5,126,271 Mortgage loans on real estate 23,386,895 23,360,333 32,896,671 32,841,254 Investment in real estate 8,876,298 8,876,298 3,933,357 3,933,357 Policy loans 13,608,456 13,608,456 14,090,900 14,090,900 Short-term investments 550,001 550,001 1,654,567 1,654,567
The Company does not have any short-duration reinsurance contracts. The effect of the Company's long-duration reinsurance contracts on premiums earned in 2001, 2000 and 1999 was as follows:
In November 1998, FCC borrowed $2,608,099 to facilitate the prepayment of principal on its subordinated 10-year debt. The note bears interest at the rate of 7.50%, with interest payments due quarterly and principal due upon maturity of the note on December 31, 2005. In addition, FCC borrowed $6,300,000 to facilitate the prepayment of principal on the existing senior debt. This note bears interest at the rate of 9/16% over the prime rate of interest as published in the Wall Street Journal, with interest payments due quarterly and principal due upon maturity of the note on December 31, 2006. During fiscal year 2001, no principal payments were made on these two notes.
The following table sets forth information with respect to the principal facilities used in our operations, all of which are leased.
Administrative service fee revenue. Administrative service fee revenue consists of fees we charge our clients for the administration of their benefit programs and are earned when services are rendered. These revenues are included in our renewal revenue line on our consolidated income statement.
In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the purchase method of accounting be used for all business combinations and also includes guidance on the initial recognition and measurement of goodwill and other intangible assets arising from business combinations completed after June 30, 2001. SFAS No. 142 eliminates the amortization of goodwill and intangible assets with indefinite useful lives and requires that these assets be reviewed for impairment at least annually. Intangible assets with determinable lives will continue to be amortized over their estimated useful lives.
effect of a change in accounting principle in the first quarter of 2002. We perform our annual goodwill impairment analysis in the fourth quarter of each year. No additional impairment was recorded in 2002.
FIA, Stabilizer and MCG: We also issue certain products that contain embedded derivatives that are measured at estimated fair value separately from the host contracts. These products include fixed indexed annuities ("FIAs") and Stabilizer. The managed custody guarantee product ("MCG") is a stand-alone derivative and is measured in its entirety at estimated fair value.
Account balances for fixed annuities and payout contracts without life contingencies are equal to cumulative deposits, less charges and withdrawals, plus credited interest thereon. Credited interest rates vary by product and ranged up to 4.8% for the years 2016, 2015 and 2014. Account balances for group immediate annuities without life contingent payouts are equal to the discounted value of the payment at the implied break-even rate.
The Company holds certain VIEs for investment purposes. VIEs may be in the form of private placement securities, structured securities, securitization transactions, or limited partnerships. The Company has reviewed each of its holdings and determined that consolidation of these investments in the Company's financial statements is not required, as the Company is not the primary beneficiary, because the Company does not have both the power to direct the activities that most significantly impact the entity's economic performance and the obligation or right to potentially significant losses or benefits, for any of its investments in VIEs. The Company did not provide any non-contractual financial support and its carrying value represents the Company's exposure to loss. The carrying value of the investments in VIEs was $347.8 and $0.4 as of December 31, 2016 and 2015, respectively; these investments are included in Limited partnerships/corporations on the Consolidated Balance Sheets. Income and losses recognized on these investments are reported in Net investment income in the Consolidated Statements of Operations.
The aggregate fair value of fixed income securities and equity securities, including mutual funds, supporting separate accounts with additional insurance benefits and minimum investment return guarantees as of December 31, 2016 and 2015 was $8.0 billion and $7.8 billion, respectively.
During the years ended December 31, 2016 and 2015, DSL did not pay any dividends to VRIAC, its parent.
In 2017, the Company is expected to contribute $6.0 to the SERPs and Agents Non-Qualified Plan. Future expected benefit payments related to the SERPs and Agents Non-Qualified Plan, for the years ended December 31, 2017 through 2021 and thereafter through 2026, are estimated to be $6.0, $7.3, $5.8, $6.2, $6.0 and $27.8, respectively.
COVID-19 has not slowed our continued expansion of the lines of business and forms of reinsurance on which we focus. This expansion includes lines of business and forms of reinsurance with increased risk profiles, where we believe the higher expected margins adequately compensate us for the increased risk. As we expand our underwriting focus into higher expected margin property and specialty lines of reinsurance business as well as excess casualty and professional liability insurance, we expect to deliver attractive equity returns to our shareholders with a more balanced contribution to net income from underwriting and investments with lower volatility of our results.
During the first quarter of 2020, the rapid spread of COVID-19 around the globe resulted in significant volatility in the financial markets unseen since the 2008 financial crisis. During March 2020, credit markets experienced their biggest dislocation since 2008 as investment grade spreads widened significantly. As a result, we determined we would invest in a more opportunistic credit portfolio to take advantage of these dislocations in the credit market brought on by the COVID-19 pandemic. During the first quarter, we invested approximately $220 million into corporate debt from liquid, high quality issuers as well as a portfolio of non-investment grade structured credit securities, primarily in residential mortgage-backed securities and consumer loans.
See “Segment Results - Property and Casualty Reinsurance” below for additional details.
(2)Refer to “Non-GAAP Financial Measures and Other Financial Metrics” for a description of the net investment return on investments managed by Third Point LLC.
The Company's 1998 statutory composite ratio was adversely affected during the second half of the year by underwriting results from the Company's satellite business, casualty reinsurance provided by the Company on business produced by a certain managing underwriting agency, and a property loss on a finite risk treaty, as set forth below (dollars in millions):
Nebraska insurance laws provide that, without prior approval of the Nebraska Director, Risk Capital Reinsurance cannot pay a dividend or make a distribution (together with other dividends or distributions paid during the preceding 12 months) that exceeds the greater of (i) 10% of statutory surplus as of the preceding December 31 or (ii) statutory net income from operations from the preceding calendar year not including realized capital gains. Net income (exclusive of realized capital gains) not previously distributed or paid as dividends from the preceding two calendar years may be carried forward for dividends and distribution purposes. Any proposed dividend or distribution in excess of such amount is called an "extraordinary" dividend or distribution and may not be paid until either it has been approved, or a 30-day waiting period has passed during which it has not been disapproved, by the Nebraska Director. Notwithstanding the foregoing, Nebraska insurance laws provide that any distribution that is a dividend may be paid by Risk Capital Reinsurance only out of earned surplus arising from its business, which is defined as unassigned funds (surplus) as reported in the statutory financial statement filed by Risk Capital Reinsurance with the Nebraska Insurance Department for the most recent year. In addition, Nebraska insurance laws also provide that any distribution that is a dividend and that is in excess of Risk Capital Reinsurance's unassigned funds, exclusive of any surplus arising from unrealized capital gains or revaluation of assets, will be deemed an "extraordinary" dividend subject to the foregoing requirements. See "Business--Insurance Regulation--Regulation of Dividends and Other Payments from Insurance Subsidiaries" and Note 10 of the accompanying Notes to the Consolidated Financial Statements of the Company.
The Company does not currently have any material commitments for any capital expenditures over the next 12 months other than in connection with the further development of the Company's infrastructure. The Company expects that its financing and operational needs for the foreseeable future will be met by the Company's balance of cash and short-term investments, as well as by funds generated from operations. However, no assurance can be given that the Company will be successful in the implementation of its business strategy.
In December 1997, the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants issued Statement of Position 97-3, "Accounting by Insurance and Other Enterprises for Insurance-Related Assessments" (SOP 97-3). SOP 97-3 provides guidance for determining when an entity should recognize a liability for guaranty-fund and other insurance-related assessments, how to measure that liability, and when an asset may be recognized for the recovery of such assessments through premium tax offsets or policy surcharges. This SOP is effective for financial statements for fiscal years beginning after December 15, 1998, and the effect of initial adoption is to be reported as a cumulative catch-up adjustment. Restatement of previously issued financial statements is not allowed. The Company plans to implement SOP 97-3 in the first quarter of 1999 and expects there to be no material impact on the Company's financial condition, results of operations or liquidity.
Most leasing functions for TIGI and its subsidiaries are administered by TAP. In 1996, TAP assumed the obligations for several leases. Rent expense related to all leases are shared by the companies on a cost allocation method based generally on estimated usage by department. Rent expense was $18 million, $15 million, and $24 million in 1998, 1997 and 1996, respectively.
The net deferred tax liabilities at December 31, 1998 and 1997 were comprised of the tax effects of temporary differences related to the following assets and liabilities:
In September 1998, effective August 31, 1998, CHF was sold for $17.75 million, comprised of cash and $15.75 million in buyer's notes. On August 16, 1999, the Company was paid $8.5 million, the remaining principal balance of the notes and accrued interest, net of a $0.25 million discount to induce the buyer to prepay the notes. All proceeds were used to reduce the Company's bank indebtedness.
2002, OmniCare-TN's total enrollment was approximately 120,000 members, compared to 55,000 at July 1, 2001.
Depreciation and amortization decreased $0.2 million (10%) to $1.8 million in the fiscal year ended June 30, 2002 from $2.0 million in the fiscal year ended June 30, 2001.
Net cash used in operating activities was $3.7 million in fiscal 2002 compared to net cash provided of $17.9 million in fiscal 2001. Investing activities in fiscal 2002 included the purchase of
Accounts receivable increased by $1.9 million at June 30, 2002 compared to June 30, 2001, primarily due to money due from the State of Tennessee.
Pursuant to an agreement between TennCare and OmniCare-TN in October 2002, TennCare further agreed to pay additional funds to OmniCare-TN if future certified actuarial data confirm they are needed by OmniCare-TN to meet its statutory net worth requirement as of June 30, 2002. The ultimate settlement of medical claims may vary from the estimated amounts reflected in the accrual.
The Order beneficially relieved the Company from further funding OmniCare-MI's capital deficiencies through unsecured loans and forgiving earned management fees. The Order required the Company to continue performing all services under its OmniCare-MI management agreement, which it will continue doing through October 31, 2002. That agreement will terminate November 1, 2002 pursuant to notice received from OmniCare-MI in accordance with its amended rehabilitation plan, which a State circuit court judge approved on July 29, 2002.
SFAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." The Company plans on adopting SFAS No. 146 during fiscal year 2003, and management is in the process of determining the impact, if any, of adopting SFAS No. 146.
In the Life Department the figure of total sums reassured remained almost un­ changed, the shrinkage caused by the depreciation of the French Franc being nearly compensated by the volume of new business, notwithstanding an increase in the number of surrenders. Mortality experience was again very satisfactory and the profit exceeds that of the previous year. The continued fall in the yield on investments has rendered the problem of adjusting premiums to the changed level of interest return more pressing than ever. Our extensive organisation for underwriting substandard risks was further developed during the past year.
Our reserves for loss and DCC expenses are estimated using case-by-case valuations based on our estimate of the most likely outcome of the claim at that time. In addition to these case reserves, we establish reserves on an aggregate basis that have been incurred but not reported, or IBNR. Our IBNR reserves are also intended to provide for aggregate changes in case incurred amounts as well as for recently reported claims which an initial case reserve has not been established. The third component of our reserves for loss and loss adjustment expenses is our AO reserve. Our AO reserve is established for those future claims administration costs that cannot be allocated directly to individual claims. The final component of our reserves for loss and loss adjustment expenses is the reserve for mandatory pooling arrangements.
Net Premiums Written. Net premiums written for 2019 were $324.5 million, compared to $342.4 million for 2018, a decrease of 5.2%. The decrease was primarily attributable to the decrease in gross premiums written. As a percentage of gross premiums earned, ceded premiums were 2.6% for 2019 and 2018.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 25, 2020 expressed an unqualified opinion thereon.
The Company is authorized to issue 10,000,000 shares of preferred stock, par value $0.01 per share. At December 31, 2019, there were no shares of preferred stock outstanding.
The Company recognized no compensation expense in 2019 and $12,000 in 2018 and $56,000 in 2017, related to awards made under the 2005 Incentive Plan.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Cadre maintains its principal executive office at 905 Marconi Avenue, Ronkonkoma, New York 11779. The Company owns the office building. It consists of approximately 15,000 square feet of office space and storage.
The principal source of liquidity for Old Guard Group, Inc. (OGGI) will be dividend payments and other fees received its subsidiaries. OGGI's insurance subsidiaries are restricted by the insurance laws of the state of domicile as to the amount of dividends or other distributions they may pay to the OGGI without the prior approval of the state regulatory authority. Under Pennsylvania law, the maximum amount that may generally be paid by an insurance company during any twelve-month period after notice to, but without prior approval of, the Department cannot exceed the greater of 10% of the insurance company's statutory surplus as reported on the most recent annual statement filed with the Department, or the net income of the insurance company for the period covered by such annual statement. However, the Old Guard Insurance Companies are further restricted as to the amount of dividends that may be paid to OGGI. These restrictions do not allow the Insurance Companies to pay a dividend to OGGI without prior approval of the Department for a 36-month period following the Conversion.
We have audited the accompanying consolidated balance sheets of Old Guard Group, Inc. and subsidiaries, as of December 31, 1997 and 1996, and the related consolidated statements of income, shareholders' equity and cash flows for the years ended December 31, 1997, 1996 and 1995. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
The amortized cost and estimated fair value of fixed income securities at December 31, 1997 by contractual maturity are shown below:
Exercise Prices $10 $19 $22 Outstanding at December 31, 1997 237,286 5,000 5,000 Weighted-average remaining contractual life (in years) 9.1 9.6 9.6 Options exercisable at December 31, 1997 237,286 5,000 5,000
Neffsville and New Castle are provided management services by OGIM for a fee as determined under a management agreement. Management fees recognized by OGIM under the aforementioned management agreements are as follows:
However, at the direction of the trial judge, the Group, the Insurance Companies and the individual defendants expect to file a motion for summary judgment with respect to the constitutional claims on or before June 1, 1998. The Group cannot predict the outcome of any such summary judgment motion. If the motion for summary judgment is not granted, then, absent settlement, the case would proceed to trial.
After-tax operating income (loss), net of realized investment gains and losses $ 915 $ (436) $ 650 $ 820
Pursuant to the certificate of authority we received from the TDI, we are required to deposit securities with the State of Texas. These securities consist of cash in the amount of $300 as well as various fixed income securities listed in the table above having an amortized cost basis of $1,701 and an estimated fair value of $1,692 as of December 31, 2016.
Unearned premium reserves increased $2,379 to $25,821 as of December 31, 2016 compared to $23,442 as of December 31, 2015. The following table outlines the change in unearned premium reserves by line of business.
Unless redeemed earlier by the Company as discussed below, with the written consent of the holders of the majority of the Preferred Shares then outstanding, the Company will be required to redeem the Preferred Shares then outstanding on February 24, 2020 (the “Mandatory Redemption Date”), for a redemption amount equal to twenty five dollars per share outstanding plus all accrued and unpaid dividends on such shares. The Company has the option to redeem the Preferred Shares prior to the Mandatory Redemption Date immediately prior to the consummation of any change in control of the Company that may occur.
As of December 31, 2016, the Company had the following amounts due under its operating leases for facilities in Baton Rouge, Louisiana, and Tampa, Florida.
The following table shows our gross premiums written by line of business for the years ended December 31, 2016 and 2015.
Net investment income for the years ended December 31, 2016 and 2015 is as follows:
On December 1, 2016 we participated TWIA’s inaugural depopulation program whereby Maison assumed policies for wind and hail only exposures along the Gulf Coast area of Texas. The depopulation program was structured such that Maison reinsures TWIA under a 100% quota share agreement. As of December 31, 2016, we have written $186 in assumed premiums on approximately 1,300 policies through the TWIA quota share agreement.
A reconciliation of the net incurred and paid loss development tables to the liability for loss and loss adjustment expenses on the balance sheet is as follows.
See Note 20 - Subsequent Events, for additional statutory requirements regarding the certificate of authority granted to Maison from the Florida Office of Insurance Regulation.
The persistent depression in the rates of interest in many countries and further currency depreciations reduced the yield on investments. If we are none the less able to show a higher figure of interest earned, this is due to the notable increase in interest bearing assets resulting from the expansion in business written.
Net investment income ..................... $ 84,915 $ 91,803 $ 82,483 -------- -------- -------- Net realized gains (losses) - Fixed maturities ........................ (27) 4,515 3,232 Equity securities ....................... 3,464 4,963 435 -------- -------- -------- 3,437 9,478 3,667 -------- -------- -------- Net unrealized appreciation (depreciation) - Fixed maturities ........................ (92,325) 21,556 11,954 Equity securities ....................... (18,827) 16,468 22,584 -------- -------- -------- (111,152) 38,024 34,538 -------- -------- -------- $(22,800) $139,305 $120,688 ======== ======== ========
The Company maintains a number of incentive plans for key employees. Under the Company's 1982 Long-Term Performance Incentive Plan, shares of restricted stock as well as stock options may be granted by Orion. Orion granted 70,015, 5,688 and 66,016 shares of restricted stock to key employees during 1994, 1993 and 1992, respectively. Restricted stock is considered issued and outstanding when awarded, and is recorded as deferred compensation. There are restrictions as to its transferability, which restrictions lapse proportionately from the second to the fifth anniversaries of grant date. As of December 31, 1994, the restrictions have not lapsed on 148,459 shares of restricted stock. All stock options granted by Orion, at fair market value at date of grant, are intended to qualify as incentive stock options becoming exercisable from the first through fourth anniversaries of the date of grant, expiring ten years after the date of grant. As of December 31, 1994, the number of shares of stock reserved under all plans is 530,011 of which 348,802 are for outstanding stock options and 173,064 of these stock options are exercisable. A summary of the option transactions is as follows:
The Company has issued shares of its common stock on a number of occasions without offering preemptive rights to existing Shareholders or procuring waivers of their preemptive rights. No Shareholder has alleged any damage resulting to him as a result of the sale of shares of Common Stock by the Company without offering preemptive rights. The amount of damages incurred by Shareholders by reason of the failure to offer preemptive right, if any, is not ascertainable with any degree of accuracy. The Company believes that if any such claims were asserted, the Company may have valid defenses.
During 2000 and 1999, the Company focused its resources on the growth of the entertainment and technology segment, which, during that time, was the most efficient and cost-effective strategy for the Company to maximize revenue. Although resources and capital remain limited, the Company has begun directing efforts toward reestablishing a foothold in the film industry. The Company expects to continue recognizing growth in revenues from the sale of film licenses in 2000.
Although the Company's resources and capital remain limited, the Company has begun directing its efforts toward resources in an area of high technology, and to provide customer support servicing for DSL, cable internet, VOIP and wireless IP providers. This decision has elicited an emphasis on providing broadband connectivity services to residential and business customers. As a result, the Company obtained a growth in this segment totalling $240,000 in 2000, and $137,000 in 1999. The Company expects to continue to recognize growth in revenue.
Net realized capital losses were $15.7 million in 2001, reflecting realized capital losses on the Company's investments of $45.5 million, which includes $16.7 million relating to write-downs in the value of securities deemed to be impaired on an other than temporary basis, partially offset by $29.8 million of realized capital gains, compared to realized capital gains of $0.3 million in 2000. The net realized capital gains in 2000 reflected realized capital gains of $30.3 million, which were partially offset by $30.0 million of realized capital losses.