varies from year to year, from agent to agent and between regions of the country. During 2006, we experienced an average delay between closing and reporting by agents of approximately 110 days. The delay in notification by agents defers revenue recognition and may also create a lag between changes in general real estate activity and the impact of such changes on the portion of our Title Operations segment revenue attributable to agents.
Operating revenue from agency title operations increased by $23.7 million, or 1.2 percent, in 2006 compared to 2005. This increase was due to growth in the agency business, particularly in certain southeastern and southwestern markets, partially offset by declines in midwest markets. An additional factor is the timing in the reporting of transactions by agents. The timing of policy reporting, and therefore revenue reporting by agents, varies from year to year, from agent to agent and between regions of the country.
Operating revenue in Corporate and Other increased by approximately $48.9 million, or 92.3 percent, from 2005 over 2004. Acquisitions completed during 2005 and 2004 contributed approximately $28.3 million to the increase in operating revenue in 2005. Before the impact of these acquisitions, operating revenue increased due to stronger volume in the home warranty, commercial appraisal and assessment businesses.
Lender Services - Lender Services personnel costs tend to increase during periods of increased sales volume and decrease when sales volume is lower. This is the case because a significant amount of work is required to set up new accounts. Once accounts are established, monitoring and maintenance activities are less labor intensive. Salaries and employee benefit expenses in the Lender Services segment increased $7.0 million, or 7.7 percent in 2006. Before the impact of acquisitions, salaries and employee benefit expenses increased to $91.6 million, or 0.2 percent, in 2006 due to compensation increases partially offset by decreased FTEs in the loan servicing business of 3.1 percent. Taking into account the impact of acquisitions, FTE counts increased to 1,628 in 2006 from 1,543 in 2005, an increase of 5.5 percent. Salaries and employee benefit expenses increased $14.7 million, or 19.2 percent in 2005 over 2004 due to acquisitions made in 2004 and early 2005.
In June 2006, we completed the process of redomesticating our three principal title insurance subsidiaries, Commonwealth Land Title Insurance Company, Lawyers Title Insurance Corporation and Transnation Title Insurance Company from the States of Pennsylvania, Virginia and Arizona, respectively, to the state of Nebraska. The redomestication of these title insurance subsidiaries is expected to result in streamlined regulatory, tax and statutory accounting functions derived from having these subsidiaries subject to the same laws and regulations. Under Nebraska insurance laws and regulations, $237.0 million of 2006 net assets of our three principal insurance subsidiaries are available during 2007 for ordinary dividends, loans or advances to us. The redomestication of these subsidiaries is expected to increase the cumulative amount of surplus that is available to pay dividends to us by the aggregate amount that these subsidiaries’ total statutory claims reserves exceed GAAP claims reserves after income taxes, subject to certain annual limitations and any approval that may be required by the Nebraska Department of Insurance. We anticipate that any such additional dividends will be used for general corporate purposes, including but not limited to the repayment of debt, acquisitions and the repurchase of our common stock. As of December 31, 2006, statutory claims reserve exceeded GAAP claims reserves by $160.7 million before income taxes.
Short-term investments consist primarily of securities purchased under agreements to resell, commercial paper and money market instruments and have an original maturity of one year or less.
Title plants consist of title records relating to a particular region and are generally stated at cost. Expenses associated with current maintenance, such as salaries and supplies, are charged to expense in the year incurred. The costs of acquired title plants and the building of new title plants, prior to the time that a plant is put into operation, are capitalized. Properly maintained title plants are not amortized or depreciated because there is no indication of decline in their value.
in the accompanying balance sheet as deferred service arrangements in accordance with Staff Accounting Bulletin No. 104, Revenue Recognition in Financial Statements. The amortization period is evaluated quarterly to determine if there have been changes in the estimated life of the loan and/or changes in the number and/or timing of prepayments.
The proceeds and gross realized gains (losses) from the sale of investments, net of calls or maturities, during the years ended December 31, 2006, 2005 and 2004 were as follows:
The aggregate amount of time deposits in denominations of $100,000 or more was $476.2 million at December 31, 2006 and $334.7 million at December 31, 2005.
Provisions for title losses as a percentage of title operating revenues from the Title Operations segment were 6.1 percent for 2006, 5.2 percent for 2005, and 4.3 percent for 2004. The increase in the loss percentage in 2006 compared to 2005 reflects upward development primarily in the 2003 and 2004 policy years. The loss percentage increase in 2005 compared to the loss percentage in 2004 reflects a higher estimated loss rate for the 2005 policy year and the negative impact of two large claims totaling approximately $15.6 million, partially offset by a favorable adjustment to prior year loss reserves. In 2004, the loss percentage reflected lower than expected payment levels on policies issued in prior years that included a high proportion of refinance business.
A valuation allowance is established for any portion of a deferred tax asset that we believe may not be realized. We recorded a valuation allowance of $1.0 million at December 31, 2006 which represented the net operating loss carryforwards generated by foreign subsidiaries where it is more likely than not that realization will not occur. These net operating loss carryforwards could fully expire after 2013. At December 31, 2005, no valuation allowance was provided.
Effective January 1, 2005, the Plan was amended to comply with the safe harbor provisions of Sections 401(k)(12) and 401(m)(11) of the Internal Revenue Code of 1986, as amended. The amendment provides immediate vesting on all matching contributions made after January 1, 2005, removes the one-year waiting period for new participants to receive matching contributions and increases the matching contributions made to employee accounts under the plan.
For 2007, it is estimated net periodic benefit cost will include recognition of $6.0 million ($3.8 million, net of tax) of net actuarial loss and $0.3 million ($0.2 million, net of tax) of prior service cost.
Effective October 2005, LandAmerica Tax & Flood, one of our wholly-owned subsidiaries in our Lender Services segment, ceased providing a portion of future tax services to one of its largest tax customers. As a result of the loss of business, we conducted an impairment test of LandAmerica Tax & Flood’s long-lived assets in accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, using estimated future cash flows. We determined that LandAmerica Tax & Flood’s customer relationship intangible was impaired by $37.6 million and this impairment was reflected in our results of operations for the year ended December 31, 2005. We also conducted an impairment test of LandAmerica Tax & Flood’s goodwill intangible in accordance with Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, using cash flow analysis which projects the future cash flows produced by the reporting unit and discounts those cash flows to the present value. We determined that LandAmerica Tax & Flood’s goodwill balance of $188.0 million was not impaired. Also in 2005, we determined that a non-competition intangible in the Title Operations segment was impaired and we recorded an impairment loss of $1.5 million.