felanders/preprocessed huggingface dataset:
(2) Effective January 1, 1993, PXRE adopted the FASB's SFAS No. 113, "Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration Contracts". As a result of such adoption, PXRE effected a December 31, 1992 balance sheet reclassification to assets of $53,314,969 of reinsurance recoverables on losses and loss expense liabilities and $5,529,292 of ceded unearned premiums in 1992, which were previously deducted from liabilities. The adoption of SFAS No. 113 had no effect on PXRE's net income for the years ended December 31, 1993 or 1992.
Gross premiums written for 1996 decreased 26.4% to $114,348,000 from $155,380,000 for 1995. Net premiums earned for the year ended December 31, 1996, decreased 25.1% to $72,796,000 from $97,142,000 in the year-earlier period. Net premiums written for the year ended December 31, 1996, decreased 30.6% to $67,718,000 from $97,636,000 for the corresponding period of 1995. Gross written, net written and net earned premium for 1996 declined from prior-year levels reflecting the increasingly competitive business environment. PXRE continued its planned response to this situation by withdrawing capacity from areas of coverage not offering appropriate compensation for the exposure. Management anticipates that this trend will continue during 1997, although business written by PXRE's newly-established Lloyd's syndicate (PG Butler Syndicate 1224) is expected to partially cushion reductions elsewhere in PXRE's business. Net premiums written and earned were also adversely affected by a $3,798,000 reduction in reinstatement premiums resulting from a reduced level of loss activity in 1996, as well as by $2,522,000 of cessions related to the new retrocessional arrangement with Investors Re.
Other sources of funds available to PXRE include investments retained by PXRE to provide support for debt service on its Senior Notes. Net tax allocation payments by PXRE Reinsurance and Transnational Reinsurance are also expected to be a source of funds available to PXRE.
All amounts classified as reinsurance recoverable at December 31, 1996, are considered by management of PXRE to be collectible in all material respects.
The Company believes that its existing facilities and additional or alternate available space are adequate to meet its needs for the foreseeable future.
During the six months ended June 30, 2002, the Company experienced a reduction in outsourcing services revenue due primarily to a continuing decline in affiliated direct written premium (“DWP”) generated from BIG’s automotive, homeowners, worker’s compensation and commercial lines of insurance business. Effective July 1, 2002, the Company amended the New Service Agreement (as amended, the “Amended New Service
Pursuant to the Original Credit Agreement, interest was payable monthly on amounts outstanding under the Original BIG Loan Credit at an annual rate equal to the Prime Rate (as defined in the Original Credit Agreement”), plus 1.5%. The Original Credit Agreement further provided that the Original BIG loan would expire on February 28, 2002, unless repaid in full prior to such time or otherwise terminated pursuant to the terms of the Credit Agreement. The Original BIG Loan was secured by (i) a first lien security interest in all accounts and contract rights of Bankers Underwriters, Inc., a wholly-owned subsidiary of BIG (“BUI”), with
On March 7, 2005, the Company received notice from Brownsville Surgical Hospital (BSH) that effective April 15, 2005 they would be terminating the claims billing and follow up, early stage patient balance collection, and coding services portions of their accounts receivable management contract with UMC dated October 31, 2000. Per BSH management, the hospital plans to bring these services in house at that time. BSH management indicated their appreciation for UMC's performance over the life of this contract, but believes that the hospital will be able to provide these services more cost effectively in house. UMC will continue to provide bad debt collection services for BSH. The cancelled portions of this contract provided revenue of $662,000, $629,000 and $430,000, which represented 16%, 16% and 13% of total revenue for the years 2004, 2003 and 2002 respectively.
(d) an incentive payment of $500 per calendar year (with no cap or limit) for each FTEE from the 51st and over employed in its Pampa operations center during each of the eight calendar years of the Agreement commencing with the year ending December 31, 2001. UMC recognized $13,500, $15,000 and $13,250 in revenue from this incentive for 2004, 2003 and 2002 respectively.
Accounting principles generally accepted in the United States of America require the use of management's judgments and estimates in addition to the rules and requirements imposed by the accounting pronouncements. More detailed information about UMC's accounting policies is contained in Note B, Summary of Significant Accounting Policies, to the Consolidated Financial Statements. Other accounting policies not discussed here are described there, and readers should review that information carefully. We have summarized below the accounting policies that we believe are most critical to understanding UMC's financial statements.
The Company also leases office space for its Assumed Reinsurance division in Summit, New Jersey, and claims offices in Reston, Virginia, and San Diego, California. During 2001, the Company closed marketing offices in Phoenix, Arizona, Addison, Texas, and Boca Raton, Florida. During 2002, the Company closed its claims offices in Tampa, Florida, and Sacramento, California.
The Company considers its fixed maturity and equity securities as available-for-sale securities. Available-for-sale securities are available to be sold in response to a number of issues, including the Company’s liquidity needs, changes in market interest rates and investment management strategies, among others. During the fourth quarters of 2002 and 2003, the Company sold significant amounts of its available-for-sale securities to increase surplus for statutory accounting purposes. In late 2001 and 2002, the Company began to shift the character of its investment income to fully taxable in recognition of the Company’s current tax position. Available-for-sale securities are recorded at fair value. The related unrealized gains and losses, net of income tax effects, are excluded from net income and reported as a component of stockholders’ equity.
The Company evaluates the securities in its available-for-sale investment portfolio on at least a quarterly basis for declines in market value below cost for the purpose of determining whether these declines represent other than temporary declines. Some of the factors the Company considers in the evaluation of our investments are:
The underwriting expense ratio increased in 2003 versus 2002 as the 2002 ratio was artificially low due to expensing of previously deferred acquisition costs in 2001 in light of the unprofitability of the non-core business. The underwriting expense ratio changed from 48.2% in 2001 to 20.3% in 2002 and 31.1% in 2003. No acquisition costs related to non-core business were deferred in 2003 or 2002.
GoshawK Re has an A- rating from A.M. Best and the cession of business to GoshawK Re is on a funds withheld basis whereby premiums ceded under the contract are kept in trust to collateralize GoshawK Re’s obligations to the Company.
As of May 28, 1997, the successor entity to ESIF, as described below, became a wholly owned subsidiary to the Company. On such date ESIF completed a conversion from a group self-insurance fund to a stock property and casualty insurance company. Concurrent with this conversion ESIF's name was changed to Bridgefield Employers Insurance Company and Summit, a new holding company, issued $16.4 million of preferred stock to the former policyholders or members of ESIF for the extinguishment of their membership interests. At the same time, in connection with a recapitalization of the Company's corporate structure, all of the capital stock of Summit Holding Corporation ("SHC"), which had been owned by ESIF and one of its subsidiaries prior to the conversion, was acquired by Summit and SHC became a wholly subsidiary of Summit.
Administrative Fees. The Administrative Subsidiaries generate administrative fees primarily through contracts with the Non-affiliated Entities, pursuant to which the Administrative Subsidiaries provide marketing, underwriting, claims administration, loss control and policy administration services. Fees are generally based on a percentage of each Non-affiliated Entities' premiums. For the period beginning on the date of the Acquisition, January 16, 1996, and ended on March 31, 1996, the administrative fees were $7.7 million. For the fiscal year ended March 31, 1997, the administrative fees were $33.3 million. Administrative fees represented 23.0% of total revenue for the fiscal year ended March 31, 1997.
Incorporated by reference from the section entitled Management s Discussion and Analysis of Financial Condition and Results of Operations in the Company s Annual Report to Shareholders for the year ended December 31, 1996.
Catastrophe losses, net of reinsurance, for each of the last three years were:
Specialty Commercial Lines statutory combined ratio for the year 2001 was 90.8%, compared with the 2001 projected statutory combined ratio of 88.9%. The statutory combined ratio was 79.8% and 50.7% for 2000 and 1999, respectively.
The state of New Jersey also requires additional assessments to be paid by insurers and requires insurance companies to write a portion of their business in high risk areas. New Jersey requires assessments to be paid for the New Jersey Unsatisfied Claim and Judgement Fund ("UCJF"). This assessment is based upon estimated future direct premiums written in that state. The Group paid assessments of $4.7 million in 2001, $3.3 million in 2000 and $3.4 million in 1999. Since 1999, New Jersey has also required insurance companies to write a portion of their personal auto premiums in Urban Enterprise Zones ("UEZ"). These zones are generally higher risk urban areas. The Group is required to write one policy in UEZ for every seven policies written outside UEZ. The Group is assigned premiums if it does not write the required quota. In 2001, the Group wrote $8.1 million in UEZ premiums, with $4.3 million in additional assigned premiums in 2001, compared with $6.5 million in UEZ premiums and $4.9 million in additional assigned premiums in 2000. In 1999, the Group wrote $5.7 million in UEZ premiums, with $6.7 million in additional assigned premiums in 1999. The loss ratios on UEZ premiums were 159.3%, 146.3% and 132.1% for 2001, 2000 and 1999, respectively. The loss ratios on the assigned business were 219.6%, 198.5% and 142.9% for 2001, 2000 and 1999, respectively.
The loss estimates for these claims are based on currently available information. However, given the expansion of coverage and liability by the courts and legislatures, there is substantial uncertainty as to the ultimate liability.
National Interstate Corporation (NIC) is a holding company with operations being conducted by subsidiaries.
The underwriting expense ratio for 2004 improved 1.0 point to 24.9% compared to 25.9% for 2003. The improvement resulted from our fixed expenses increasing at a slower rate than the net earned premium growth. Specifically, our employee related expenses grew at a slower rate than our revenue growth because the new positions created during this period were primarily entry-level and we better leveraged existing management as our business grew.
The following table summarizes our long-term contractual obligations as of December 31, 2004:
In May 2003, the Company purchased the outstanding common equity of a business trust that issued mandatorily redeemable preferred capital securities (capital securities). The trust used the proceeds from the issuance of its capital securities and common equity to buy $15,464 aggregate principal amount of debentures issued by the Company. These debentures are the trust’s only assets and mature in 2033. The interest rate is equal to the three-month LIBOR (2.40% at December 31, 2004 and 1.17% at December 31, 2003) plus 420 basis points with interest payments due quarterly. Payments from the debentures finance the distributions paid on the capital securities. The Company has the right to redeem its debentures, in whole or in part, on or after May 23, 2008. In accordance with FASB Interpretation No. 46, Consolidation of Variable Interest Entities, the Company determined that the business trust is a variable interest entity for which it is not the primary beneficiary and therefore, did not consolidate the trust with the Company. To the extent the trust does not have funds available to make payments, as guarantor, the Company unconditionally guarantees payment of required distributions on the capital securities, the redemption price when the capital security is redeemed, and amounts due if the trust is liquidated or terminated. The Company recorded its equity interest in the trust as a common stock investment.
Management has reviewed the recoverability of the deferred tax asset and believes the amount to be recoverable against future earnings.
Transnational Reinsurance paid PXRE an annual basic management fee under the TREX Management Agreement equal to 5% of gross premiums written (including reinstatement premiums less return premiums) by Transnational Reinsurance as reflected in Transnational Reinsurance's statutory quarterly and annual statements filed with state insurance authorities. TREX and Transnational Reinsurance also paid all expenses directly attributable to them.
As reported previously, PXRE and TREX merged on December 11, 1996. Results for 1997 therefore reflect the consolidated operations and business of PXRE and TREX combined, whereas the 1996 results under purchase accounting reflect the historical results of PXRE as reported,
During 1996, PXRE experienced a deficiency of $3,249,000, net, for prior year losses and loss expenses primarily due to Hurricanes Marilyn and Luis. The loss ratio for 1995 was unfavorably affected by increases to reserves of $4,311,000, net, for prior year losses and loss expenses primarily from the 1994 Northridge earthquake.
The net effects of foreign currency exchange fluctuations were gains of $102,000 in 1996 and gains of $235,000 for 1995. See 'Liquidity and Capital Resources' below.
In December 1996, PXRE completed an investment in Lloyd's of London, forming a new syndicate, PG Butler Syndicate 1224, and a presence in London. The new syndicate has an initial capacity to underwrite 'L'35 million in annual premiums ($57.4 million at December 31, 1997 exchange rates). In connection with the capitalization of the syndicate, PXRE has placed on deposit $43,175,000 par value of U.S. government securities as collateral for Lloyd's. In addition, PXRE issued a letter of credit for the benefit of Lloyd's in the amount of $15,355,000, which is collateralized by U.S. government securities in approximately the same amount. In addition, PXRE has provided a 'L'5,000,000 ($8,200,000 at December 31, 1997 exchange rates) line of credit to PXRE Managing Agency for liquidity purposes. There has been no drawdown of these amounts.
Anchor has not paid cash dividends in the past and does not expect to pay cash dividends in the foreseeable future.
142 will not have a material impact on the Company's consolidated results of operations, financial position or cash flows.
CHANGING NATURE OF THE BUSINESS The vast majority of the Company's business is professional liability insurance for physicians written on a claims made and reported basis. The Company believes that the integration of healthcare delivery in recent years, particularly in California, will result in the growing importance of large medical groups and other healthcare entities, and a corresponding change in the entities that make professional liability purchasing decisions. The Company believes that these changes have created a need for the Company to further diversify. As a result, the Company has adopted a strategy for growth that includes expanding the type of products offered by the Company and diversifying geographically by offering products in states other than California. The Company began to implement its strategy in 1994 by offering professional liability insurance to hospitals in California and, in 1995, began offering errors and omissions coverage for managed care organizations.
(1) The rights, duties and obligations under the lease covering this property have been assigned to INSpire by AGIA in connection with the Arrowhead Acquisition.
Depreciation and Amortization. Depreciation and amortization expense was $4.0 million for the year ended December 31, 1997 compared to $787,000 for the year ended December 31, 1996, an increase of $3.2 million or 408%. This increase is primarily attributable to (i) Millers Mutual's capital contribution of approximately $1.3 million in depreciable property and equipment to INSpire in January 1997 and (ii) amortization of goodwill recorded in connection with the SDS Acquisition.
The Company also leases office space in 23 other locations throughout California. The Company anticipates no difficulty in extending these leases or obtaining comparable office facilities in suitable locations.
The personal umbrella program has remained stable over the three-year period ended December 31, 1998, producing approximately $2 million in gross written premiums each year. Underwriting profits for this business can vary significantly with the number of claims which occur infrequently.
Although the Company did not write new or renewal earthquake premiums in 1995 through 1998, the Company assumes a small amount of earthquake premium from the California Fair Plan, a state-administered pool of difficult to insure risks in which insurers are required to participate in proportion to their share of direct written homeowners coverage in the state. As indicated previously, the Company recorded additional provisions for the 1994 Northridge Earthquake in 1998, 1997 and 1996 of $40 million, $24.75 million and $40 million, respectively. The Company remains exposed to possible further upward development in the estimated cost to resolve certain Northridge Earthquake claims. Although management believes current reserves are adequate, the outcome of future events could require changes in previous estimates.
The Company's remaining net operating loss carryforward is expected to be fully utilized during 1999 (see Note 5 of the Notes to Consolidated Financial Statements). As a result, income tax payments will increase in 1999 and future years compared to the years 1994 through 1998. To the extent practicable, the Company's investment portfolio is being switched from taxable to nontaxable securities in order to minimize future tax payments.
A summary of the Company's stock option activity and related information follows:
This growth continued in 1997 with variable universal life deposits being 128% of the 1996 deposits. The Company's introduction in 1997 of a corporate-owned (COLI) Variable Universal Life contract together with the addition of nineteen new investment accounts have been positively received. During the same period the separate account assets grew from $668 million to $897 million.
The net loss from U.S. operations in 1997 of $0.8 million compared to a net income in 1996 of $9.1 million was a result of a significant increase in operating costs and expenses in 1997. This was directly attributable to new business strain on dramatically increased variable universal life contract sales for which deposits increased 28% over 1996 levels. The improvement in net income in 1996 compared to 1995 was a result of increased policy fees which more than offset costs associated with increased sales.
The key risks faced by the Company are currency risk, credit, claims, pricing and business risks. The nature of these risks and how they are managed is explained in the following sections.
Manulife Financial provides a claims paying guarantee to the Company's U.S. policyholders.
The Company leases 3,675 square feet of office space at 33 Rock Hill Road, Bala Cynwyd, Pennsylvania 19004 at an annual cost of approximately $64,782, exclusive of sublease income (approximately $7,692) from a single tenant presently occupying approximately 400 square feet of such office space with a month-to-month term. The lease term expires September 30, 1999, provided that the Company may terminate the lease at any time by giving 60 days advance written notice and paying a specified amount of the landlord's cost to improve the space. The Company has not purchased or developed real estate for investment purposes, or made real estate loans. Accordingly, it has no properties arising from such activities.
Mountbatten, Inc. ("Mountbatten") commenced operations on February 1, 1992. Mountbatten acts as a holding company for The Mountbatten Surety Company, Inc. (the "Surety Company"). The Surety Company underwrites performance, payment and other bonds, and is licensed to conduct business in the Commonwealths of Pennsylvania, Virginia, and Kentucky, the States of Delaware, Maryland, New Jersey, New York, Ohio, Tennessee, Indiana, Connecticut, Mississippi, Illinois, South Carolina, and the District of Columbia. The Surety Company distributes bonds in these states through independent agents and brokers. (Mountbatten together with the Surety Company are referred to below as the "Company").
Cash equivalents include highly liquid money market instruments with original maturities of three months or less.
Fixed assets, which are comprised of furniture and fixtures, computer equipment and leasehold improvements, are recorded at cost and are depreciated using the straight line method over their useful lives, which range from three to five years.
The reserve for claims and claim adjustment expenses is based on management's individual case estimates of the ultimate future payments to be made on reported claims and related expenses, and on estimates for incurred but not reported ("IBNR") claims. Claim reserve estimates are revised by management, as information becomes available. Changes in these estimates are charged or credited to income in the period in which they are determined. Claim adjustment expenses include costs associated directly with specific claims paid or in the process of settlement.
Reinsurance receivable of $294,911 at December 31, 1996 includes $324,994 related to unpaid losses, offset by $30,083 received from the reinsurer as an overpayment. Reinsurance receivable of $205,037 at December 31, 1995 includes $129,199 and $75,838 of receivables related to paid and unpaid losses, respectively.
Incurred losses related to: Current year 768,722 407,957 Prior year (249,014) (38,318)
In November 1993 the Company granted non-qualified stock options to selected individuals to purchase 81,000 shares of common stock at an exercise price of $4.50 per share. These options vested immediately, and are exercisable for a ten-year period after the date of grant.
Through our wholesale agency business segment, we offer commercial and personal lines insurance products for our Insurance Company Subsidiaries as well as third-party insurers. We have expanded the wholesale agency business to develop more non-risk revenue streams, and to provide our agents with more insurance product options.
We have changed the calculation to remove wholesale agency operations and corporate headquarters operations to provide a better measure of the underwriting operations’ efficiency. The loss ratio calculation excludes other income from wholesale agency and Corporate. The 2018 ratios have been recast to reflect the new presentation. Refer to Note 17 ~ Segment Information for further details.
The combined ratio is the sum of the loss ratio and the expense ratio. A combined ratio under 100% indicates an underwriting profit. A combined ratio over 100% indicates an underwriting loss.
Our premiums are presented below for the years ended December 31, 2018 and 2017 (dollars in thousands):
Financing Activities. Cash provided by financing activities for the years ended December 31, 2019 and 2018, were $6.3 million and $3.7 million, respectively. The $2.6 million increase in 2019 compared to 2018 was largely due to a $5.0 million issuance of common stock in 2019, and no issuance of common stock in 2018.
In addition to DAC, we also recognize assets for deferred sales inducements. The deferred sales inducements are recognized and are amortized over the anticipated life of the policy using the same methodology and assumptions used to amortize deferred policy acquisition costs. For additional information about our deferred sales inducements, see Note 7 to the Consolidated Financial Statements. Deferred sales inducements are also subject to recoverability testing at the end of each reporting period to ensure that the capitalized amounts do not exceed the present value of anticipated gross profits.
Total liabilities increased by $7.907 billion, from $28.268 billion at December 31, 2008 to $36.175 billion at December 30, 2009, primarily due to an increase in separate account liabilities of $7.588 billion, driven mainly by the improvement in equity markets. Policyholder account balances increased $473 million, from $6.322 billion at December 31, 2008 to $6.795 billion at December 31, 2009, primarily driven by transfers from the Company’s separate account to its general account, due to the automatic rebalancing feature on certain variable annuity contracts and continued growth in universal life in force. Future policy benefits and other policyholder liabilities decreased by $372 million, from $3.518 billion at December 31, 2008 to $3.146 billion at December 31, 2009 primarily driven by a decrease in the liability for living benefit embedded derivatives due to the impact of the change in non-performance risk in the valuation of embedded derivatives, partially offset by increases to life reserves associated with term life in force growth.
In December 2006, the IRS completed all fieldwork with regards to its examination of the consolidated federal income tax returns for tax years 2002 and 2003. The final report was initially submitted to the Joint Committee on Taxation for their review in April 2007. The final report was resubmitted in March 2008 and again in April 2008. The Joint Committee returned the report to the IRS for additional review of the industry issue regarding the methodology for calculating the DRD related to variable life insurance and annuity contracts. The IRS completed its review of the issue and proposed an adjustment with respect to the calculation of the DRD. In order to expedite receipt of an income tax refund related to the 2002 and 2003 years, we have agreed to such adjustment. Nevertheless, we believe that our return position is technically correct. Therefore, we intend to file a protective refund claim to recover the taxes associated with the agreed upon adjustment and to pursue such other actions as appropriate. The report, with the adjustment, was submitted to the Joint Committee on Taxation in October 2008. We were advised on January 2, 2009 that the Joint Committee completed its consideration of the report and has taken no exception to the conclusions reached by the IRS. Accordingly, the final report was processed and a refund was received. The statute of limitations for these years closed on December 31, 2009. These activities had no impact on our 2007 or 2008 results.
Net income for 1997 increased 54.0% to $17.2 million compared to $11.2 million in 1996. This improvement was primarily attributable to a 55.8% increase in earned premiums, a 14.5% increase in net investment income, and an improved combined loss and expense ratio.
Consolidated invested assets were $177.3 million at December 31, 1998, compared to $119.9 million at December 31, 1997. This increase is attributable to the investment of proceeds of the $35.0 million debt offering and operating cash flow. Through investment of a portion of the net proceeds of the note offering, the Company has increased its investments in higher yielding non-investment grade securities to approximately 8% of its consolidated investment portfolio, up from approximately 3% at December 31, 1997. Net unrealized investment gains were $2.5 million on equity securities and $3.5 million on fixed maturity securities at December 31, 1998. Fixed maturity securities and equity securities, all of which are classified as available for sale, totaled $171.4 million at December 31, 1998. Based upon book value, the fixed maturity portfolio at December 31, 1998, consisted of approximately 70% municipal securities, 24% corporate securities, 5% U.S. government obligations, and 1% mortgage-backed bonds.
Revenues decreased $119 million from $328 million in 2015 to $209 million in 2016, primarily driven by a decline in policy charges and fee income, and asset administration fees of $155 million reflecting the impact of the Variable Annuities Recapture. Premiums decreased $50 million primarily due to the consideration transferred to Prudential Insurance as part of the Variable Annuities Recapture, partially offset by an increase in realized investment gains (losses) of $83 million as described above.
The hedging strategy is periodically recalibrated in response to changing market conditions. The Framework accommodates periodic volatility within ranges that are deemed acceptable, while also providing for additional potential sources of capital, including on-balance sheet capital, derivatives, and contingent sources of capital. Although Prudential Financial continues to enhance its approach, we believe we currently have access to sufficient resources, either directly, or indirectly through Prudential Financial, to maintain adequate capitalization and a competitive RBC ratio under a range of potential stress scenarios.
The increased net earned premiums were primarily attributable to higher net premiums written in our Specialty Commercial Segment and the favorable impact of increased retention under a quota share reinsurance agreement in our Personal Segment effective October 1, 2014, partially offset by the adverse impact on the Standard Commercial Segment of ceding substantially all unearned workers’ compensation premiums effective July 1, 2015.
Our Standard Commercial Segment reported pre-tax income of $8.9 million for the year ended December 31, 2016 which was $2.2 million higher than the $6.7 million reported for the same period of 2015. Lower loss and LAE of $5.9 million was the primary driver for the higher pre-tax income, as well as lower operating expenses of $1.2 million, partially offset by the decreased revenue discussed above.
Total revenue for Corporate decreased by $1.8 million for the year ended December 31, 2016 as compared to the same period the prior year. This decrease in total revenue was due to net realized losses recognized on our investment portfolio of $0.4 million for the year ended December 31, 2016 as compared to the net realized gains of $2.5 million for the same period of 2015, partially offset by higher net investment income of $1.1 million.
Gross premiums written for the Specialty Commercial Segment were $351.0 million for the year ended December 31, 2015, which was $26.5 million, or 8%, more than the $324.5 million reported for the same period in 2014. Net premiums written were $241.8 million for the year ended December 31, 2015 as compared to $230.6 million reported for the same period in 2014. The increase in gross and net premiums written was due to increased premium production in both our MGA Commercial Products and Specialty Commercial operating units, including our specialty programs.
The Company's underwriting agency operations underwrite aviation, medical stop-loss, occupational accident and workers' compensation insurance and and a variety of accident and health related reinsurance products.
lease costs of office space made redundant by the plan. The following table provides a detailed analysis of the accruals:
Financial Statements: Page No. -------------------- ------- Report of Independent Auditors 33
Non-cash stock grant compensation expense represents the expense required to be recorded under Accounting Principles Board Opinion (APB) No. 25, “Accounting for Stock Issued to Employees,” relating to our stock performance plan, which is more fully described in Note 11 of the Notes to Consolidated Financial Statements.
Total revenues in 2005 increased $85.5 million to $127.1 million, a 205.5% increase over 2004. Of this increase, approximately $73.3 million related to core commissions and fees revenue from acquisitions for which there were no comparable revenues in 2004. The majority of this acquired revenue was from the March 1, 2005 acquisition of Hull & Company, which represented the largest acquisition in our history. Commissions and fees revenue of Hull & Company for the twelve months preceding March 1, 2005 was approximately $63.0 million. The Brokerage Division’s net internal growth rate for core commissions and fees revenue in 2005 was 24.9%, excluding core commissions and fees revenue recognized in 2005 from new acquisitions. The strong net internal growth rate was generated primarily from two of our operations, one of which focuses on property accounts in the southeastern United States, and the other which focuses on construction accounts in the western part of the United States. In addition to the increase in net new business, both of these markets experienced increases in insurance premium rates during 2005.
In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 141, “Business Combinations” (SFAS No. 141), which requires all business combinations initiated after June 30, 2001 to be accounted for using the purchase method. SFAS No. 141 also includes guidance on the initial recognition and measurement of goodwill and other intangible assets arising from such business combinations. The excess of the purchase price of an acquisition over the fair value of the identifiable tangible and amortizable intangible assets is assigned to goodwill.
Amortizable intangible assets are stated at cost, less accumulated amortization, and consist of purchased customer accounts and noncompete agreements. Purchased customer accounts and noncompete agreements are being amortized on a straight-line basis over the related estimated lives and contract periods, which range from five to 15 years. Purchased customer accounts primarily consist of records and files that contain information about insurance policies and the related insured parties that are essential to policy renewals.
Amortization expense recorded for other amortizable intangible assets for the years ended December 31, 2005, 2004 and 2003 was $33,245,000, $22,146,000 and $17,470,000, respectively.
The Registrant leases offices at approximately 304 locations. The average term for all such leases is approximately six years. The leases expire from 1997 to 2006. The Registrant believes it will not have any difficulty obtaining renewals of leases as they expire or, alternatively, leasing comparable property. The aggregate annual rental expense under all leases was approximately $18,586,000.
We provide private MI through our wholly owned insurance subsidiaries NMIC and Re One. NMIC and Re One are domiciled in Wisconsin and principally regulated by the Wisconsin OCI. NMIC is our primary insurance subsidiary, and is approved as an MI provider by the GSEs and is licensed to write coverage in all 50 states and D.C. Re One provides statutorily required reinsurance to NMIC on insured loans with coverage levels in excess of 25% after giving effect to third-party reinsurance. Our subsidiary, NMIS, provides outsourced loan review services to mortgage loan originators.
MI protects lenders and investors from default-related losses on a portion of the unpaid principal balance of a covered mortgage. MI plays a critical role in the U.S. housing market by mitigating mortgage credit risk and facilitating the secondary market sale of high-LTV (i.e. above 80%) residential loans to the GSEs, who are otherwise restricted by their charters from purchasing or guaranteeing high-LTV mortgages that are not covered by certain credit protections. Such credit protection and secondary market sales allow lenders to increase their capacity for mortgage commitments and expand financing access to existing and prospective homeowners.
The following table provides a reconciliation of the beginning and ending reserve balances for primary insurance claims and claims expenses.
In March 2017, Moody's Investors Service (Moody's) upgraded its financial strength rating from "Ba2" to "Ba1" for NMIC. At that time, Moody's also upgraded its rating of NMIH's $150 million Term Loan from "B2" to "B1." In August 2017, Moody's re-affirmed its "Ba1" financial strength rating for NMIC and its B1 rating of NMIH's $150 million Term Loan and upgraded the outlook for both ratings from "stable" to "positive." In July 2017, S&P re-affirmed its "BBB-" financial strength and long-term counter-party credit ratings on NMIC and its "BB-" long-term counter-party credit rating on NMIH and upgraded the outlook for both ratings to "positive."
our significant unearned premium balance which represents future revenue to be earned over the policies' lives;
We concluded that we are not the primary beneficiary of Oaktown Re and that consolidation is not required, as we do not have significant economic exposure in the entity.
The effect of our reinsurance agreements on premiums written and earned is as follows:
For the year ended December 31, 2015, we recorded income tax expense of $0.0 due to the recognition of a valuation allowance against our federal and state net deferred tax assets.
The Company has no off balance sheet transactions. The following table reflects our current contractual commitments as of December 31, 2001:
Our recent acquistion of Catalyst is important to achieving the scale and operating leverage necessary to compete in this segment. Should we fail to integrate these operations and realize the expected opportunities our prospects could be damaged.
Our supplemental health membership growth is increasingly dependent on telemarketing - --------------------------------------------------------------------------
Complex laws, rules and regulations of each of the 50 states and the District of Columbia pertaining to insurance impose strict and substantial requirements on insurance coverage sold to consumers and businesses. Compliance with these laws, rules and regulations can be arduous and imposes significant costs. The underwriter of the insurance benefits included in HealthExtras programs is responsible for obtaining and maintaining regulatory approvals for those benefits. If the appropriate regulatory approvals for the insurance benefits included in our programs are not maintained, we would have to stop including those benefits. An independent licensed insurance agency is responsible for the solicitation of insurance benefits involved in HealthExtras programs.
Acquisition costs relating to disposed lines of business (group term life, group disability, group dental and group vision) consist primarily of compensation to sales representatives. Such costs are deferred and amortized over the estimated terms of the underlying contracts.
In the ordinary course of business, we are involved in both the assumption and cession of reinsurance with non-affiliated companies. The following table provides details of the reinsurance recoverables balance as of December 31, 2020 and 2019:
We utilize reinsurance for loss protection and capital management, business dispositions and, in Global Lifestyle and Global Housing, client risk and profit sharing. See also Notes 2, 5 and 18 to the Consolidated Financial Statements included elsewhere in this Report, “Item 1A - Risk Factors - Financial Risks - Reinsurance may not be adequate or available to protect us against losses, and we are subject to the credit risk of reinsurers” and “
Gross Premiums Earned for the year ended December 31, 2009 were $110.0 million and reflect the revenue from policies assumed from Citizens in connection with the seven assumption transactions through December 2009 and the revenue on the renewal of these policies. Gross premiums earned for the year ended December 31, 2008 were $61.9 million and reflect the revenue from policies assumed from Citizens in connection with the six assumption transactions through December 2008 and the revenue on the renewal of these policies.
Net Premiums Earned for the years ended December 31, 2009 and 2008 were $65.3 million and $47.3 million, respectively, and reflect the gross premiums earned less the appropriate reinsurance costs as described above. Net premiums earned increased by $18.1 million in 2009 as compared to 2008 as a result of the $48.1 million increase in gross premiums earned offset by the increase of $30.0 million in premiums ceded.
The results of the reserve calculations using these methods were similar, and therefore, we relied on an average of the four methods.
Investments in Fixed Maturity Securities. Securities may be classified as either trading, held to maturity or available for sale. Those fixed maturity securities that the Company has the ability and positive intent to hold to maturity are classified as held-to-maturity and carried at amortized cost. The Company’s available-for-sale fixed maturity securities are carried at fair value. Temporary changes in the fair value of available-for-sale fixed maturity securities are reported in stockholders’ equity as a component of accumulated other comprehensive loss, net of deferred income taxes. Realized investment gains and losses are determined using the specific identification method. Investment income is recognized as earned and the discount or premium arising from the purchase of fixed maturity securities is amortized using the interest method over the estimated remaining term of the security.
The Company has had no historical pattern of option exercises and, therefore, could not identify any patterns in the exercise of options. As such, the Company used the guidance in Staff Accounting Bulletin No. 107 issued by the Securities and Exchange Commission to determine the estimated life of options issued. For options granted in 2008, the expected volatility was based on historical volatility of the similar sized insurance company’s common stock. Expected volatility applicable to future option grants will be determined based on the Company’s own historical volatility beginning with the July 31, 2008 initial public offering. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve at the time of grant. The dividend yield assumption is based on the Company’s history and expectation of dividend payments.
Consolidated Statements of Cash Flows for the three years ended October 31, 2001
$.40 47,967 1.51 $0.40 47,967 $0.40 1.3125- 1.9688 72,000 3.80 1.58 72,000 1.58 4.00-6.00 565,434 5.84 4.77 531,234 4.74 6.75-9.313 39,800 6.30 7.54 27,600 7.69
Rent expense totaled approximately $666,000, $650,000 and $636,000 for the years ended October 31, 2001, 2000 and 1999, respectively.
Basic EPS Net loss attributable to common shares $ (252,985) 4,096,877 $(.06)
Investment income in 1996, including a contribution from AFI of $400,000 for the final month of the year, was $70.2 million, compared with $63.0 million in 1995. The after-tax yield on average investments of $975.1 million, including AFI, (fixed maturities at cost, equities at market) was 6.50%, compared with 6.89% on average investments of $827.9 million in 1995. The effective tax rate on investment income was 9.7% in 1996, compared with 9.4% in 1995. The effective tax rate was increased and the effective after-tax yield was reduced slightly by
As of December 31, 1996, the Company had no material commitments for capital expenditures.
Company's investment portfolio in comparison to recent yields, as well as the cyclical and competitive nature of the property and casualty insurance industry and general uncertainties regarding loss reserve estimates and legislative and regulatory changes. Such risks and uncertainties and other factors are discussed above and in periodic filings with the Securities and Exchange Commission.
The amortized cost and estimated market values of investments in fixed maturities available for sale as of December 31, 1996 are as follows:
Management’s discussion and analysis of financial condition and results of operations of First SunAmerica Life Insurance Company (the “Company”) for the years ended December 31, 2004 (“2004”), 2003 (“2003”) and 2002 (“2002”) follows. Certain prior period amounts have been reclassified to conform to the current period’s presentation.
At December 31, 2004, the Bond Portfolio included $108.0 million of bonds that were not investment grade. These non-investment-grade bonds accounted for approximately 2.4% of the Company’s total assets and approximately 2.8% of its invested assets. Non-investment-grade securities generally provide higher yields and involve greater risks than investment-grade securities because their issuers typically are more highly leveraged and more vulnerable to adverse economic conditions than investment-grade issuers. In addition, the trading market for these securities is usually more limited than for investment-grade securities. An economic downturn could produce higher than average issuer defaults on the non-investment-grade securities, which could cause the Company’s investment returns and net income to decline. At December 31, 2004, the Company’s non-investment-grade portfolio consisted of 49 issues with two issuers representing more than 10% of the total non-investment-grade bond portfolio. These non-investment-grade securities are comprised of bonds spanning 10 industries with 31%, 19%, 13% and 12% concentrated in telecommunications, cyclical consumer products, transportation, and financial service industries, respectively. No other industry concentration constituted more than 10% of these assets.
At December 31, 2007 and 2006, fixed maturities with fair values of $13.9 and $11.2, respectively, were on deposit as required by regulatory authorities.
The Company invests in various categories of collateralized mortgage obligations (“CMOs”) that are subject to different degrees of risk from changes in interest rates and, for CMOs that are not agency-backed, defaults. The principal risks inherent in holding CMOs are prepayment and extension risks related to dramatic decreases and increases in interest rates resulting in the prepayment of principal from the underlying mortgages, either earlier or later than originally anticipated. At December 31, 2007 and 2006, approximately 11.3% and 8.4%, respectively, of the Company’s CMO holdings were invested in those types of CMOs which are subject to more prepayment and extension risk than traditional CMOs, such as interest-only or principal-only strips.
Investment contract liabilities (included in Future policy benefits and claim reserves):
Valuation allowances are provided when it is considered unlikely that deferred tax assets will be realized. As of December 31, 2007, the Company had a $6.4 valuation allowance related to unrealized capital losses on investments, which is included in Accumulated other comprehensive income (loss). The Company had no valuation allowance as of December 31, 2006.
Services agreement between ILIAC and its U.S. insurance company affiliates dated January 1, 2001, and amended effective January 1, 2002 and December 31, 2007. For the years ended December 31, 2007, 2006, and 2005, net expenses related to the agreement were incurred in the amount of $21.7, $12.4, and $17.8, respectively.
At December 31, 2007, the Company had reinsurance treaties with 8 unaffiliated reinsurers covering a significant portion of the mortality risks and guaranteed death benefits under its variable contracts. At December 31, 2007, the Company did not have any outstanding cessions under any reinsurance treaties with affiliated reinsurers. The Company remains liable to the extent its reinsurers do not meet their obligations under the reinsurance agreements.
Shareholder’s equity included the following components of Accumulated other comprehensive income (loss) as of December 31, 2007, 2006, and 2005.