Mortgage services contract originations increased by $1.7 billion, or 50 percent, during 1998 and by $2.0 billion, or 133 percent, during 1997. We have continued to expand our home equity retail origination network.
Annuities include traditional fixed-rate annuities, market value-adjusted annuities, equity-indexed annuities and variable annuities sold through both career agents and professional independent producers.
(b) These ratios are included to assist the reader in analyzing the impact of interest expense on debt related to finance receivables and other investments (which is generally offset by interest earned on finance receivables and other investments financed by such debt). Such ratios are not intended to, and do not, represent the following ratios prepared in accordance with GAAP: the ratio of earnings to fixed charges; and the ratio of earnings to fixed charges, preferred dividends and distributions on Company-obligated mandatorily redeemable preferred securities of subsidiary trusts.
At December 31, 1998, we have $4.0 billion in master repurchase agreements, subject to the availability of eligible collateral, with various investment banking firms for the purpose of financing our contract and commercial finance loan production. The master repurchase agreements generally provide for annual terms which are extended each quarter by mutual agreement of the parties for an additional annual term based upon receipt of updated quarterly financial information. At December 31, 1998, we had $780.6 million borrowed under the repurchase agreements. In addition, we have a $700 million line of credit secured by our interest-only securities. This line of credit matures on February 12, 2000 with an option to extend for an additional one year term. As of December 31, 1998, we had borrowed $300.0 million under this facility.
We are also assessing what contingency plans will be needed if any of our critical systems or those of external business relationships are not year-2000 ready at year-end 1999. We do not currently anticipate such a situation, but our consideration of contingency plans will continue to evolve as new information becomes available.
Separate accounts are funds on which investment income and gains or losses accrue directly to certain policyholders. The assets of these accounts are legally segregated. They are not subject to the claims that may arise out of any other business of Conseco. We report separate account assets at market value; the underlying investment risks are assumed by the contract holders. We record the related liabilities at amounts equal to the market value of the underlying assets.
We evaluate servicing rights for impairment on an ongoing basis, stratified by product type and origination period. To the extent that the recorded amount exceeds the fair value, we establish a valuation allowance through a charge to earnings. If we determine, upon subsequent measurement of the fair value of these servicing rights, that the fair value equals or exceeds the amortized cost, all or a portion of the previously recorded valuation allowance would be deemed unnecessary and restored to earnings.
At December 31, 1998, the mortgage loan balance was primarily comprised of commercial loans. Approximately 9 percent, 8 percent, 8 percent, 7 percent and 7 percent of the mortgage loan balance were on properties located in Texas, New York, Florida, Ohio and California, respectively. No other state comprised greater than 5 percent of the mortgage loan balance. Less than 1 percent of the mortgage loan balance was noncurrent at December 31, 1998. At December 31, 1998, our allowance for loss on mortgage loans was $9.2 million.
During 1998, 1997 and 1996, the Company sold $13.4 billion, $10.7 billion and $8.4 billion, respectively, of finance receivables in various securitized transactions and recognized gains of $745.0 million, $779.0 million and $400.6 million, respectively. The 1996 gain reflects a charge of $200 million as a result of adjustments necessary to fully consider the effects of partial prepayments on projected future interest collections and the impact of changes in projected future interest due to investors. Such adjustments were calculated using the cash out method to measure the period of time for which projected cash flows related to securitizations should be discounted.
The Company provides certain pension, health care and life insurance benefits for certain eligible retired employees under partially funded and unfunded plans in existence at the date on which such subsidiaries were acquired. Certain postretirement benefit plans are contributory, with participants' contributions adjusted annually. Amounts related to the pension and postretirement benefit plans were as follows:
State insurance laws generally restrict the ability of insurance companies to pay dividends or make other distributions. Net assets of the Company's wholly owned life insurance subsidiaries, determined in accordance with GAAP, aggregated approximately $8.4 billion at December 31, 1998. After deducting $205.1 million, $170.6 million and $140.5 million of fees and interest paid to Conseco or non-life insurance subsidiaries in 1998, 1997 and 1996, respectively, the remaining statutory operating earnings of our life insurance subsidiaries were $276.0 million, $243.4 million and $215.0 million in 1998, 1997 and 1996, respectively. Of such earnings, $202.5 million may be distributed to Conseco in 1999 without the permission of state regulatory authorities.
Finance segment. Our finance segment provides a variety of finance products including: loans for the purchase of manufactured housing, home improvements and various consumer products; private label credit card programs; and commercial loans such as revolving credit agreements, asset-based lending and equipment financing. These products are primarily marketed through intermediary channels such as dealers, vendors, contractors and retailers.