felanders/preprocessed huggingface dataset:
(1) Insurance revenues include only the fees charged for interest-sensitive and administrative services only business and do not include group and credit premium equivalents and cash deposits from interest-sensitive products. Thus, it is necessary to evaluate insurance revenues including premium equivalents. (2) 1995 amounts include a one time unusual gain on the sale of a parcel of property and net investment gains realized related to restructuring the investment portfolio consistent with the Company's investment strategies. (3) On a pro forma basis including the acquisition of Columbia Universal at December 31, 1996, total assets would have been $1,747,610 and life insurance volume in force would have been $22,109,054. (4) Amounts exclude realized investment gains and losses.
(4) Insurance Liabilities: The liabilities for future policy benefits (which represent the excess of the present value of future benefits to be paid on behalf of or to policyholders over the present value of future net premiums, except for interest-sensitive products) are computed by a net level premium method using estimated future investment yields from 3.75% to 8.00%; withdrawals based on Company experience; mortality, and morbidity from recognized morbidity and mortality tables modified for anticipated company experience, with reasonable provisions for possible future adverse experience deviations. Policyholders' account balances represent premiums received plus interest credited during the contract accumulation period, less contract charges for mortality and expenses. For the years ended December 31, 1996 and 1995, the weighted average interest rates credited to the policyholders' account balances were 5.37% and 6.28%, respectively; and the related interest credited to the policyholders'
For the years ended December 31, 1996, 1995 and 1994, net investment income (in thousands) was as follows:
The Company's insurance subsidiaries, like other insurance companies, are currently defendants in lawsuits that involve claims for punitive, exemplary or other extracontractual damages, which are for amounts substantially in excess of the actual damages sought. Management considers such litigation regrettably to be of the type to which insurance companies are usually and customarily subjected in the ordinary course of business, and to date the settlements of such claims of this nature have not been material to the financial position of the Company. In the opinion of management, based on the currently ascertained facts of the pending litigation, which the Company intends to vigorously defend, the ultimate resolution of such litigation should not be material to the financial position of the Company.
We own our main office, located at 933 E. Main Street, Fremont, Michigan, which is a 30,000 square foot brick veneer building constructed in 1981. There is no mortgage indebtedness on the building. Management believes that the building is sufficient for the needs of the Company, both now and in the foreseeable future.
The Company accounts for stock-based compensation in accordance with the provisions of SFAS No. 123R, “Accounting for Stock-Based Compensation”. The Company values stock options issued based upon an option-pricing model and recognizes the fair value as an expense over the period in which the options vest.
In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)” (“Statement 158”). Among other items, Statement 158 requires recognition of the overfunded or underfunded status of an entity’s defined benefit postretirement plan as an asset or liability in the financial statements, requires the measurement of defined benefit postretirement plan assets and obligations as of the end of the employer’s fiscal year, and requires recognition of the funded status of defined benefit postretirement plans in other comprehensive income. Statement 158 was adopted by the Company as of December 31, 2006. The initial recognition of the funded status of the Company’s defined benefit postretirement plan resulted in an increase in stockholders’ equity of $524,978, which was net of tax expense of $270,443. Statement 158 also requires that the funded status of a plan be measured as of the date of the year-end balance sheet date, with limited exceptions. The Company currently measures its funded status as of the date of the Company’s year-end balance sheet.
The cost or amortized cost, gross unrealized gains, gross unrealized losses and estimated fair value of investments at December 31, 2006 and 2005 are as follows:
The excess of loss program is the Company’s primary reinsurance coverage. For all lines of business the Company’s retention on any one risk in 2006 and 2005 was $150,000 and in 2004 the retention was $125,000.
The Company has a defined contribution 401(k) plan covering substantially all employees meeting certain eligibility requirements. The 401(k) plan provides for matching contributions and /or profit sharing contributions as defined by the Board of Directors. Company contributions approximated $117,000 in 2006, $103,000 in 2005, and $74,000 in 2004.
Depreciation and amortization increased by 11.4%, or $.4 million, in 1997 due primarily to amortization of preoperational costs associated with service area and product line expansion. Interest and other expenses decreased by 32.1%, or $.8 million, in 1997 due primarily to retirement of bank debt during the fourth quarter of 1996, and the reduction of the annual interest rate, in February 1997, on the Subordinated Convertible Note.
Medical costs have been rising at a higher rate than that for consumer goods as a whole. The Company believes its premium increases, capitation arrangements and other cost control measures mitigate, but do not wholly offset, the effects of medical cost inflation on its operations and its inability to increase premiums could negatively impact the Company's future earnings.
We believe that existing cash and investment balances, when combined with anticipated cash flows generated from operations, will be adequate to meet our expected liquidity needs in both the short term and the reasonably foreseeable future. Our growth strategy includes possible acquisitions. Any acquisitions or other growth opportunities may require external financing, and we may from time to time seek to obtain external financing. We
cannot assure you that additional sources of financing will be available to us or that any such financing would not negatively impact our results of operations.
In December 2004, the FASB issued SFAS No. 123 (Revised), “Share Based Payment,” (“SFAS No. 123(R).” SFAS No. 123(R), which replaces SFAS No. 123, “Accounting for Stock-Based Compensation,” supersedes Accounting Procedures Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and amends SFAS No. 95, “Statement of Cash Flows.” Generally, the approach in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values (i.e., pro forma disclosure is no longer an alternative to financial statement recognition). SFAS No. 123(R) is effective for public companies at the beginning of the first annual period beginning after June 15, 2005. Effective July 1, 2003, we adopted the provisions of SFAS No. 148 “Accounting for Stock-Based Compensation - Transition and Disclosure” in 2004 and use the fair value method for expensing stock-based compensation. However, we continue to analyze the expected impact of SFAS No. 123(R).
During the year ended June 30, 2003, in accordance with the terms of the Plan, the Company’s Board of Directors granted to another employee an option to purchase 250 shares of common stock of the Company at an exercise price of $3.00 per share. The option expires on November 30, 2012. The aggregate market value of the securities underlying the employee’s options at the grant date was approximately $1,068. Amortization of stock-based compensation for the year ended June 30, 2003 was $346.
A summary of the status of the Company’s 2002 Long Term Incentive Plan as of June 30, 2005 and 2004 and changes during the years then ended is presented below:
The only material accounting method prescribed or permitted by state insurance departments for either USAuto Insurance or Village that differs from NAIC statutory accounting practices, relates to a reduction in the statutory capital and surplus of USAuto Insurance at June 30, 2005 of $1,122 for investments on deposit with various insurance departments, in states where the company is licensed, but is not yet transacting business.
Management believes that, for the two months ended June 30, 2004, there was no change in the estimate of unpaid loss and loss adjustment expense for losses and loss adjustment expenses incurred prior to the April 30, 2004 acquisition date of USAuto.
Profit for the financial year 949.2 +4.8% 905.8 421.2 367.2 410.3
The provision for unearned premiums, life assurance provision, provisions for outstanding claims, provisions for bonuses and rebates and other technical provisions are entered as liabilities according to the information provided by the ceding companies.
Hannover Insurance-Linked Securities GmbH & Co. KG 2, Hannover / Germany 100.00 EUR 20,388 53
holds 53.00% of the shares in: Svedea AB 1, Stockholm / Sweden SEK 6,119 626 holds 48.98% of the shares in: b2b protect GmbH 1, Hannover / Germany EUR 378 (361)
Hannover Finance (UK) Limited, London / United Kingdom 100.00 GBP 2,703 (18)
Hannover Re Real Estate Holdings, Inc., Orlando / USA 86.50 USD 654,438 8,864 holds 99.90% of the shares in: GLL HRE CORE Properties L.P., Wilmington / USA USD 557,316 (310)
The difference between the discounting of the pension obligations with the average market interest rate of the last ten years compared to discounting with the average market interest rate of the last seven years was EUR 10.3 million.
On 9 November 2016 the Executive Board and Supervisory Board of Hannover Rück SE submitted an updated Declaration of Conformity pursuant to § 161 of the Stock Corporation Act (AktG) regarding compliance with the German Corporate Governance Code and made it permanently accessible on the company’s website (www.hannover-re.com / 200801 / declaration-of-conformity).
The portfolio contains derivatives associated with the technical account in a nominal volume of EUR 33.3 million which relate to earthquake risks in Japan. The risks are offset by countertrade transactions.
Auditors’ report We have audited the annual financial statements – comprising the balance sheet, the profit and loss account and the notes to the financial statements – together with the bookkeeping system of Hannover Rück SE, Hannover, and the combined management report of the company and the Group for the business year from 1 January to 31 December 2016. The maintenance of the books and records and the preparation of the annual financial statements and combined management report in accordance with German commercial law and supplementary provisions of the articles of association are the responsibility of the Company’s management. Our responsibility is to express an opinion on the annual financial statements, together with the bookkeeping system, and the combined management report based on our audit.
Management overview. During fiscal 2010, our total revenues were $307.1 million, representing an approximately 7% increase over the $287.0 million in total revenues for fiscal 2009. The increase in revenue for the year ended December 31, 2010 was primarily attributable to increased production in our Personal Segment due to geographic expansion, increased retention of business in our Specialty Commercial Segment and gains realized on our investment portfolio. These increases in revenue were partially offset by reduced earned premium in our Standard Commercial Segment due to the deterioration of the general economic environment in our major markets and lower commission and fees in our Specialty Commercial Segment due primarily to the shift from a third party agency structure to an insurance underwriting structure.
Segment information. The following is additional business segment information for the years ended December 31, 2010 and 2009 (in thousands):
Standard Commercial Segment. Gross premiums written for the Standard Commercial Segment were $67.8 million for the year ended December 31, 2010, which was $4.7 million, or approximately 6%, less than the $72.5 million reported for the same period in 2009. Net premiums written were $63.6 million for the year ended December 31, 2010 as compared to $68.1 million reported for the same period in 2009. The decrease in premium volume was predominately due to the deterioration of the general economic environment, particularly in the construction industry, reducing the available insured exposures.
As a result of the Company's decision to reduce its exposure to investment partnerships and decreased income from operating partnerships, total net investment income decreased $1.8 million. The annualized return on investments of the Insurance Group was 6.4% for 2003 and 7.1% in 2002.
Equity loss on AMIC amounted to $1.9 million in 2002, with no comparable amount for 2001. The Company purchased a 19.9% equity interest in AMIC on July 30, 2002 and accordingly recorded 19.9% of AMIC's losses from July 30, 2002 to December 31, 2002 under the equity method of accounting. This loss primarily relates to the wind-down of AMIC's previous Internet operations.
Due to its strong capital ratios, broad licensing and excellent asset quality and credit-worthiness, the Insurance Group remains well positioned to increase or diversify its current activities. It is anticipated that future acquisitions or other expansion of operations will be funded internally from existing capital and surplus and parent company liquidity. In the event additional funds are required, it is expected that they would be borrowed or raised in the public or private capital markets to the extent determined to be necessary or desirable. In March and December 2003, the Company borrowed $10 million and $12 million, respectively, in pooled trust preferred issuances. In September 2003, the Company entered into a $12.5 million line of credit, all of which was drawn down upon. The cash proceeds of the trust preferred securities and the new line of credit were used to repay the existing debt and for general corporate purposes. (See Note 10 of the Notes to Consolidated Financial Statements in Item 8.)
Additionally, the Company has an investment partnership agreement under which $5.3 million is subject to capital call upon 7 days prior written notice. (See Note 8 of the Notes to Consolidated Financial Statements in Item 8.) The Company also has contractual obligations pursuant to its $281.8 million of funds on deposit.
The Company has increased its average retention on Medical Stop-Loss written by Standard Life and Madison Life from 28% in 2002 to 30% in 2003. Average retention for 2004 is projected to be 36%. The Company made the decision to increase its retention largely because of its greater control over the MGUs that are producing and administering the business. The majority of the Company's Medical Stop-Loss business is underwritten by MGUs in which the Company or its affiliates have significant equity interests. In addition, the Company exerts great influence over its other MGUs through its high retention of risk and by working with only a selected group of reinsurers that share IHC's commitment to underwriting excellence. For all of its MGUs, Standard Life and Madison Life regularly audit the MGUs' compliance with the Company's underwriting, claims and policy issuance guidelines.
The Company's Loss Reserves are Based on an Estimate of Its Future Liability, and if Actual Claims Prove to be Greater Than The Company's Reserves, Its Results of Operations and Financial Condition May Be Adversely Affected
To the Stockholders of Motors Mechanical Reinsurance Company, Limited Financial Services Centre Bishops Court Hill St. Michael, Barbados
MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED STATEMENTS OF INCOME AND RETAINED EARNINGS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
The Company has received an undertaking from the Barbados Government exempting it from all local income, profits and capital gains taxes for a period ending December 31, 2016.
Prior claim years (109,160) (63,724) (134,249) _________ ________ _________ Total 19,431,032 14,830,166 10,912,683 __________ __________ __________
On August 13, 1996, the Company hired a Director of Sales and Marketing to spearhead the Company's sales and marketing efforts and provide a foundation for building a direct selling organization. In addition to selling the Company's traditional claims management and UMClaimPros services, the Director of Sales and Marketing will lead UMC's efforts to enter the bad debt collection business.
UMC's total revenues from Puerto Rican operations during 1996 were $298,555, expenses totalled $204,492, and operating margin was $94,063.
The table above shows that gross written premiums increased to $864.9 million in 1999 from $759.4 million in 1998, consistent with the Company's strategy of increasing its share of the business written by the Octavian syndicates. In 1999, the Company's share of capacity increased to 77% from 60% in 1998. For the 2000 underwriting year, the Company has approximately 90% of Octavian's capacity.
When the eleven participating EMU countries adopted the euro as their national currency, the European Central Bank (ECB) established a fixed conversion rate between each participant's existing currency and the euro as from that date. The euro is now traded on foreign currency exchanges and fluctuates in value against currencies of non-participating countries. The euro can be used for non-cash transactions throughout the three year transition period which ends on December 31, 2001. On January 1, 2002, the ECB will begin to issue bills and coins denominated in euro for use in cash transactions.
The Company declared and paid dividends according to the following table:
Consolidated Statements of Cash Flows Year Ended December 31, (dollars in thousands)
The managing agent does not participate directly in the profit or loss on underwriting of its syndicates. It is incentivized by earning a commission on syndicate profits.
The Company has contingent liabilities regarding undrawn letters of credit supporting certain reinsurance business written by the Company in the U.S. of $97,420,004 and $106,105,003 at December 31, 1999 and 1998, respectively. The Company has deposited cash and investments with a carrying value of $105,812,403 (including $812,403 of restricted cash) and $158,018,677 (including $1,018,677 of restricted cash) at December 31, 1999 and 1998, respectively, as collateral against these amounts.
(e) At December 31, 1999, the Company's portfolio by rating category, determined by recognized rating agencies, was:
Terra Nova maintains a supplemental pension plan which provides pension benefits for nominated employees above amounts allowed under tax qualified plans, through a funded money purchase plan.
The Company has changed its basis of segmentation from that used in the 1998 Annual Report on Form 10-K. Management believes the new basis of segmentation most accurately reflects the Company's operating segments under the definition provided by SFAS No.131. The four segments reported in the 1998 Form 10-K were: (a) Marine & Aviation; (b) Non-Marine; (c) Agency; and (d) Corporate.
The Company’s ability to meet the indicated outlook is subject to the factors described in the introduction section immediately above.
The variable rate note payable is tied to 1-year U.S. libor rates with annual resets and had an interest rate of 4.95% as of December 31, 2002. During 2002, total interest paid on the variable rate note payable was $0.1 million.
NAIC Designations are assigned no less frequently than annually. Some designations for securities shown have been assigned to securities not yet assigned an NAIC Designation in a manner approximating equivalent public rating categories.
On other claims asserted by the CenTra Group, the jury found in favor of the Company and/or the individual defendants. The jury also found in favor of NAICO and its affiliate NAICO Indemnity (Cayman), Ltd. on their counterclaims for CenTra's failure to pay insurance premiums in the sum of $788,625 and further upheld a resolution adopted by the Chandler Board of Directors in August 1992 pursuant to Article XI of the Company's Articles of Association preventing CenTra and its affiliates from voting their Chandler stock as a result of purchases made by the CenTra Group in July 1992 as part of its efforts to acquire control of Chandler.
NAICO participates in various mandatory Pools covering workers compensation for insureds who were unable to purchase this coverage from an insurance company on a voluntary basis. In addition, NAICO receives assignments to write workers compensation for such insureds in certain states in lieu of participation in related Pools. Net premiums earned from these direct assignments and participation in related Pools were $8.0 million in 1994 and $6.8 million in both 1995 and 1996. The decline in 1995 was attributable to shrinkage of the involuntary market and NAICO's share of the voluntary market in that year.
The Company is a holding company receiving cash principally through equity sales, borrowings and subsidiary dividends, subject to various regulatory restrictions described in Notes to Consolidated Financial Statements. The capacity of insurance and reinsurance companies to underwrite insurance and reinsurance is based on maintaining liquidity and capital resources sufficient to pay claims and expenses as they become due. The primary sources of liquidity for the Company's subsidiaries are funds generated from insurance and reinsurance premiums, investment income, capital contributions from the Company and proceeds from sales and maturities of portfolio investments. The principal expenditures are payment of losses and loss adjustment expenses, insurance operating expenses and commissions.
Chandler Barbados is required as a foreign reinsurer to secure reserves for unpaid losses and loss adjustment expenses and unearned premiums for the benefit of the primary insurer ceding such amounts. Chandler Barbados secures such amounts by trust arrangements whereby securities are deposited into a trust account for the benefit of the primary insurer. NAICO is required to deposit securities with regulatory agencies in several states in which it is licensed as a condition of conducting operations in the state. NAICO also has deposited funds pursuant to a trust arrangement securing reinsurance obligations it has assumed from an unrelated primary carrier. At December 31, 1996, the total amount of cash and investments restricted for Chandler Barbados and NAICO as a result of these arrangements was $19.4 million and $10.5 million, respectively.
Benefit Plans AFC provides retirement benefits to qualified employees of participating companies through contributory and noncontributory defined contribution plans. Contributions to benefit plans are charged against earnings in the year for which they are declared. Prior to 1997, both AFC and American Premier had contributory employee savings plans and noncontributory Employee Stock Ownership Retirement Plans ("ESORP"). Effective January 1, 1997, these ESORP plans were combined into a new retirement and savings plan. Under the retirement portion of the plan, company contributions (approximately 6% of covered compensation in 1997) are invested primarily in securities of AFG and affiliates. Under the savings portion of the plan, AFC matches a specific portion of employee contributions.
Significant retirements of long-term debt since January 1, 1996, have been as follows (in millions): Year Principal Cost
In December 1997, AFC retired all shares of its Series F and G Preferred Stock in exchange for approximately $244 million in cash and 2,886,161 million shares of the Series J Preferred Stock. AFC recognized a charge to retained earnings of $153.3 million representing the excess of total consideration paid over the stated value of the preferred stock retired.
December 31, Assets: 1997 1996 Cash and short-term investments $ 10,793 $ 46,493 Investment in securities 908 100,871 Receivables from affiliates 577,661 606,416 Investment in subsidiaries 1,960,328 1,494,447 Investment in investees 22,680 22,647 Other assets 9,550 7,807
AMERICAN FINANCIAL CORPORATION AND SUBSIDIARIES SCHEDULE V - SUPPLEMENTAL INFORMATION CONCERNING PROPERTY-CASUALTY INSURANCE OPERATIONS THREE YEARS ENDED DECEMBER 31, 1997 (IN MILLIONS)
s/Carl H. Lindner, III Director March 26, 1998 Carl H. Lindner, III
Buckeye In March 1996, American Premier sold Buckeye Management Company to Buckeye's management (including an AFG director who resigned in March 1996) and employees for $60 million in cash, net of transaction costs. AFC recognized a $33.9 million pretax gain on the sale.
In the fourth quarter of 1997, AFC increased California workers' compensation reserves by approximately $25 million due to increased claims severity related to business written in 1996 and 1997. The fourth quarter of 1997 also includes income of $46.3 million (included in "other income") from the sale of development rights in New York City partially offset by a $9.0 million charge related to insurance recoverables of American Premier's prior railroad business. In the third quarter of 1996, AFC increased A&E reserves by recording a non-cash pretax charge of $80 million and recorded losses due to Hurricane Fran of approximately $30 million.
In general, members are required to use our network, except in cases of emergencies, transition of care or when network providers are unavailable to meet their medical needs, and generally must receive a referral from their PCP in order to receive health care from specialists, such as surgeons or neurologists. Members do not pay any premiums, deductibles or co-payments for most of our Medicaid plans.
Investment and other income amounted to $8.7 million in 2011 compared to $10.0 million in 2010. The decrease was due to lower volumes of specialty prescription drugs sold to non-members, partially offset by an increase in investment income resulting from higher average investment balances.
Included in 2011 financing activities are the repurchase of the subordinated notes in full which approximated $101.7 million, as well as funds held for the benefit of members, which increased approximately $129.6 million in 2011. These funds represent certain subsidies funded by CMS in connection with the Medicare Part D program for which we assume no risk. This activity is partially offset with the $147.4 million of proceeds from the issuance of the term loan, net of issuance costs.
At December 31, 2011, we did not have any off-balance sheet financing arrangements except for operating leases as described in the table below.
In the ordinary course of business, we make a number of estimates and assumptions relating to the reporting of our results of operations and financial condition in conformity with accounting principles generally accepted in the United States (“GAAP”). We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe that the accounting estimates relating to premium revenue recognition, medical benefits expense and medical benefits payable, and goodwill and intangible assets are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Prescription drug benefits under Part D are provided on both a stand-alone basis and also in connection with our MA plans. Annually, we provide written bids to CMS for our PDPs, which reflect the estimated costs of providing prescription drug benefits over the plan year. Substantially all of the premium for this insurance is paid by the federal government, and the balance is due from the enrolled beneficiaries. The recognition of the premium and subsidy components under Part D is described below:
Interest Expense. Interest expense increased 11.5% from $407,696 in 1994 to $454,497 in 1995. This increase was due to higher borrowing levels on the Company's revolving credit line and increases in the prime rate.
Claims Administration. Claims administration income generated by BCIS Services accounted for $154,523 of the increase in revenues for 1993 and $521,171 in 1994. The wholly-owned subsidiary commenced business operations in California during the third quarter of 1993.
Statutory Combined Ratios. The change in the statutory combined ratio from 80.6% in 1993 to 95.7% in 1994 was attributable to higher general and administrative expenses and higher loss and loss adjustment expense experience, together with marginal increases in premium rates.
Operating Expense. Operating expense consists of commission expense, other insurance operating expense, amortization of deferred policy acquisition costs and general and administrative expenses. Operating expense increased 95.3% from $3,734,776 in 1992 to $7,295,811 in 1993. The increase in operating expense was primarily attributable to a 101.6% increase in 1993 in other insurance operating expense. Policy fees paid to the general agent in connection with administration of Automobile Physical Damage Insurance policies increased from $931,100 in 1992 to $2,285,575 in 1993 due to expansion of the program. Legal expenses increased from $62,561 in 1992 to $666,084 in 1993 as a result of legal matters. Management believes the foregoing legal proceedings will not have a material effect on the Company's financial condition or results of operations and that the related reserve for potential losses and legal proceedings are adequate. See Note 19 to the Notes to Consolidated Financial Statements and Part I, Item 3. Legal Proceedings. Operating expense also increased as a result of recognition of amortized deferred policy acquisition costs that increased from $118,130 in 1992 to $535,233 in 1993 due to the expansion of the Automobile Physical Damage program. Other insurance operating expenses also increased by $455,761 for start-up costs related to the commencement of business by BCIS Services, Inc. during 1993 and non-deferred commission expenses increased from $1,295,625 in 1992 to $1,956,733 in 1993 resulting from increased policies written on the Company's product lines.
/s/ Coopers & Lybrand L.L.P. ------------------------ Columbus, Ohio February 23, 1996
Fair values are based upon quoted market prices or dealer quotes for comparable securities.
The provision for federal income taxes at December 31, consists of the following:
On January 1, 1996, the Company implemented the Ohio Indemnity Company Employee 401(K) and Profit Sharing Plan (the "401(K) Plan"). The 401(K) Plan is available to full-time employees who meet the 401(K) Plan's eligibility requirements. Under the 401(K) Plan, the Company matches 50% of the qualified employee's contribution up to 6%. Concurrent with this implementation, the Company merged the Profit Sharing Plan, Note 7, into the Company's 401(K) Plan.
The selection of a 100 basis point immediate increase or decrease in interest rates at all points on the yield curve is a hypothetical rate scenario used to demonstrate potential risk. While a 100 basis point immediate increase or decrease of this type does not represent our view of future market changes, it is a hypothetical near-term change that illustrates the potential effect of such events. Although these fair value measurements provide a representation of interest rate sensitivity, they are based on our portfolio exposures at a point in time and may not be representative of future market results. These exposures will change as a result of on-going portfolio transactions in response to new business, management’s assessment of changing market conditions and available investment opportunities.
On May 4, 2009, our ultimate parent company informed Fitch Ratings Ltd. that, due to its expense management initiatives, it would no longer provide non-public information to the agency and would cease paying annual rating fees.
Properties. - -------------------- The Company's corporate headquarters is located in a two story office building in Lake Mary, Florida, which is owned by the Company. The Company occupies approximately one-half of the second floor of the building. Approximately 38% of the remaining rentable space is leased as of December 31, 2000.
Assets 2000 1999 Investments (note 3): Fixed maturities held-to-maturity (fair value, $5,273,032 and $3,985,336 at December 31, 2000 and 1999, respectively) $5,374,204 $3,978,871 Securities available-for-sale, at fair value: Fixed maturities (cost of $23,419,358 at December 31, 2000 and $24,789,267 at December 31, 1999) 23,367,483 23,951,111 Equity securities (cost, $327,674 and $225,980 at December 31, 2000 and 1999, respectively) 358,932 378,440 Mortgage loans 2,298,163 1,497,688 Policy and student loans 8,220,736 8,458,972 Short-term investments (note 11) 7,814,813 8,595,093 ----------- ----------- 47,434,331 46,860,175
The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the year, plus the common stock equivalents that would arise from the exercise of stock options outstanding, using the treasury stock method and the average market price per share during the year. There were no common stock equivalents outstanding during the years ended December 31, 2000 and 1999. Common stock equivalents are not included in the diluted earnings (loss) per share calculation when their effect is antidilutive.
b. The liability for future policy benefits and expenses is based on reasonable estimates of expected mortality, morbidity, interest, withdrawals and future maintenance and settlement expenses, rather than on statutory rates for mortality and interest.
Mortgage-backed securities 64,836 71 -- 64,907 ----------- -------- -------- ----------- 23,419,358 136,987 188,862 23,367,483 ----------- -------- -------- ----------- $28,793,562 $224,691 $377,738 $28,640,515 =========== ======== ========= ===========
Amortized Estimated Cost Fair value Due in 2001 $ 1,502,062 $1,504,375 Due in 2002 through 2005 -- -- Due in 2006 through 2010 1,331,825 1,176,383 Due after 2010 1,755,960 1,797,958 ----------- ------------ 4,589,847 4,478,716 Mortgage-backed securities 784,357 794,316 ----------- ----------- $ 5,374,204 $ 5,273,032 =========== ===========
Certain of these assets, totaling approximately $850,000 for each of the years ended December 31, 2000 and 1999, are restricted for the future benefit of policyholders in a particular state.
Commissions and Other Acquisition Expenses Commissions and other acquisition costs increased by $84.2 million, or 237%, for the year ended December 31, 2008 compared to the period from May 31 (inception) December 31, 2007. The increase was the result of the increase in gross premiums. Acquisition costs as a percentage of net premiums earned were 28.5% for the year ended December 31, 2008 compared to 32.2% for the period May 31 (inception) to December 31, 2007. This decrease was due to the acquisition costs relating to the GMAC RE business being lower than the rate on the Amtrust Quota Share.
General and Administrative Expenses General and administrative expenses increased by $12.0 million, or 400.0%, for the year ended December 31, 2008 compared to the period from May 31 (inception) to December 31, 2007. The increase primarily is due to the GMAC Acquisition in November 2008 and a full year of operations in 2008.
• Salary and employee welfare costs increased approximately $6.7 million due to our staff count increasing to 127 as of December 31, 2008 from 6 as of December 31, 2007. The increase in staff count includes 120 employees of Maiden Re located in the U.S. The increase also included a non-recurring expense of $1.0 million for the reimbursement of forfeited compensation for new executives and increased share compensation costs of $0.6 million for all offices.
insurers domiciled in the United States in order for U.S. ceding companies to obtain credit on their U.S. statutory financial statements with respect to insurance liabilities ceded to them. Under applicable statutory provisions, the security arrangements may be in the form of letters of credit, reinsurance trusts maintained by trustees or funds-withheld arrangements where assets are held by the ceding company.
Cash flows from operations for the year ended December 31, 2008 were $589.4 million compared to $124.5 million for the period from May 31 (inception) to December 31, 2007. The increase in cash flows from operations for the year ended December 31, 2008 compared to the period from May 31 (inception) to December 31, 2007 was primarily due to the GMAC Acquisition and the related unearned premium and loss portfolio transfers.
The principal executive offices of the Company are located in the Old Republic Building in Chicago, Illinois. This Company owned building contains 151,000 square feet of floor space of which approximately 50% is occupied by Old Republic, and the remainder is leased to others. In addition to the Company-owned principal executive offices, a subsidiary of the Title Insurance Group partially occupies its headquarters building. This building contains 110,000 square feet of floor space of which approximately 62% is occupied by the Old Republic National Title Insurance Company. The remainder of the building is leased to others. Nine smaller buildings are owned by Old Republic and its subsidiaries in various parts of the country and are primarily used for its business. The carrying value of all buildings and related land at December 31, 1993 was approximately $12.6 million, and mortgages thereagainst aggregated $.4 million as of the same date.
certain costs which vary with and are primarily related to the production of business. Deferred costs consist principally of commissions, premium taxes, marketing, and policy issuance expenses. With respect to most coverages, defer- red acquisition costs are amortized on the same basis as the related premiums are earned or, alternatively, over the periods during which premiums will be paid or underwriting and claim services performed. The following table summarizes deferred policy acquisition costs and related data for the years shown:
A summary of deferred income taxes applicable to the following years:
Certain subsidiaries of the Company have sold various accounts receivable to a finance company subsidiary of the Mutual. Total receivables sold as of December 31, 1993 and 1992 amounted to approximately $8.5 and $12.6, respectively.
Standard Commercial Segment. The Standard Commercial Segment includes the standard lines commercial property/casualty insurance products and services handled by our AHIS Operating Unit which is comprised of our American Hallmark Insurance Services and ECM subsidiaries.
The net loss ratio is calculated as incurred losses and LAE divided by net premiums earned, each determined in accordance with GAAP. The net expense ratio is calculated as underwriting expenses of our insurance company subsidiaries (which include provisional ceding commissions, direct agent commissions, premium taxes and assessments, professional fees, other general underwriting expenses and allocated overhead expenses) and offset by agency income, divided by net premiums earned, each determined in accordance with GAAP. Net combined ratio is calculated as the sum of the net loss ratio and the net expense ratio.
On a consolidated basis, our cash and investments, excluding restricted cash and investments, at December 31, 2008 were $352.7 million compared to $411.7 million at December 31, 2007. Settlement of receivables and payables for securities during the first quarter of 2008, as well as a decline in market value for the period, contributed to this decrease in our cash and investments.
Comparison of Years Ended December 31, 2008 and December 31, 2007
Consolidated Statements of Cash Flows for the Years Ended December 31, 2001, 2000 and 1999
Forward looking statements in this report reflected as expectations, plans, anticipations, prospects or future estimates are subject to the risks and the uncertainties present in the Company's business and the competitive healthcare marketplace including, but not limited to clients and vendors commonly experiencing mergers or acquisitions, use of estimates for incurred but not yet reported claims including medical services payable, use of estimates of bonus accruals including accounts receivable, reconciliations, volume fluctuations, provider relations and contracting, participant enrollment fluctuations, changes in member mix or utilization levels, fixed price contracts, contract disputes, contract modifications, contract renewals and non-renewals, regulatory issues and requirements, various business reasons for delaying contract closings, and the operational challenges of matching case volume with optimum staffing, having fully trained staff, having computer and telephonic supported operations and managing turnover of key employees and outsourced services to performance standards. While occurrences of these risks, and others periodically detailed in the Company's SEC reports, cannot be predicted exactly, such occurrences can be expected to have an impact on the HRM's anticipated level of revenue growth or profitability.
During the first half of fiscal 2001, management became concerned by the slow progress being made by its warrantysuperstore.com business. Accordingly, alternative strategies for the Company were evaluated by the Board of Directors, including the acquisition of new business operations. As a result, on January 7, 2002 the Company entered into the StrandTek Transaction as previously reported. Consummation of the StrandTek Transaction was conditioned upon certain closing conditions, including the Company obtaining financing via an equity private placement, which ultimately could not be met and as a result in June 2002, the Exchange Agreement was formally terminated by written agreement between the Company and StrandTek. In June 2002, management also determined, in light of continuing operating losses, to discontinue its warranty and service contract business and to seek new business opportunities for the Company.
Interest Expense was approximately $465,000 for the year ended December 31, 2012, an increase of approximately $436,000, from approximately $29,000 for the year ended December 31, 2011. The increase is primarily due to the factoring fees in 2012 along with interest on outstanding debt obligations and a $300,000 non-cash expense related to the amortization of a $300,000 beneficial conversion feature which was expensed during the year ended December 31, 2012. Additionally, de minimus other income offset interest expense in the above captioned account "Other expense, net".
A factoring facility with a finance company whereby, under the terms of the agreement, the Company, at its discretion, assigns the collection rights of its receivables to the finance company in exchange for an advance rate of 85% of face value. The assignments are transacted with recourse in the event of non-payment. During 2012, the Company had factored approximately $3,850,000 of accounts receivable and had received cash advances of approximately $3,272,000 with a balance due to factor of approximately $827,000 at December 31, 2012.
As of December 31, 2012 the Company has a cash balance of approximately $894,000, of which $815,000 was received from new loans in December 2012. In January and February 2013, the Company received an additional $1,220,000 in loan proceeds from various investors.
Amortization of assets held under capital leases is included with depreciation expense and is approximately $9,000 and $0 for the year ended December 2012 and 2011, respectively.
Most of the premiums written under our personal lines are also subject to our catastrophe treaty. An increase in our personal lines business gives rise to more property exposure, which increases our exposure to catastrophe risk; therefore, our premiums for catastrophe insurance will increase. This results in an increase in premiums ceded under our catastrophe treaty, which reduces net written premiums. In 2017, our catastrophe reinsurance premiums increased by $1,508,000 over the comparable ceded premiums for 2016. The increase was due to an increase in our catastrophe coverage and an increase in premiums subject to catastrophe reinsurance, partially offset by more favorable reinsurance rates in 2017
The ratio of Core other underwriting expenses to Core net premiums earned was 22.2% in 2017 compared to 23.4% in 2016, a decrease of 1.3 percentage points.
The overall increase of 2.5 percentage points in the net underwriting expense ratio was impacted by the change in our quota share ceding rates and its impact on provisional ceding commission revenue as a result of the additional retention resulting from the Cut-off to our quota share treaties on July 1, 2017. The increase to the net underwriting expense ratio was impacted more by reductions in the reinsurance ceding commission revenue components than it was to changes in the commission expense and other underwriting expense components, each of which declined as a ratio to net premiums earned.
Net cash used in investing activities was $47,626,000 in 2017 compared to $19,516,000 used in 2016. The $28,110,000 increase in cash used in investing activities is the result of a $14,028,000 increase in acquisitions of invested assets, a $9,584,000 decrease in sales or maturities of invested assets and a $2,248,000 increase in the amount of fixed asset acquisitions in 2017.
The following table provides summary information with respect to each reinsurer that accounted for more than 10% of our reinsurance recoverables on paid and unpaid losses and loss adjustment expenses as of December 31, 2017:
Management's Discussion and Analysis of Financial Condition and Results of Operations is contained on pages 28-36 of The Liberty Corporation Annual Report to Shareholders and is filed as Exhibit 13 on pages 30-39 of this report and is incorporated in this Item 7 by reference.