RGA Canada's operations are conducted from approximately 12,480 square feet of office space located in Montreal, Canada. The lease with respect to such space expires in 2010. Rental expenses paid by RGA Canada under the lease during 2000 were approximately $289,000. RGA Canada also sub-leased approximately 800 square feet of space in Montreal, Canada. The sub-lease expired in 2000. The rental expenses paid by RGA Canada under the sub-lease during 2000 were approximately $10,000. RGA Canada also leases approximately 5,900 square feet of space in Toronto, Canada. This lease expires in 2005. The rental expenses paid by RGA Canada under the Toronto lease during 2000 were approximately $155,000. RGA International conducts operations from approximately 9,800 square feet of office space located in Toronto, Canada. The lease with respect to such space expires in 2007. The rental expenses paid by RGA International under the lease during 2000 were approximately $285,000.
Canadian marketing and insurance holding company for RGA's Canadian operations; RGA Sudamerica, S.A., a Chilean holding company; RGA Holdings Limited ("RGA UK"), a United Kingdom holding company; General American Argentina Seguros de Vida, S.A. ("GA Argentina"), an Argentine life insurance company; RGA South African Holdings (Pty) Ltd. ("RGA South Africa"), a South African holding company; Benefit Resource Life Insurance Company (Bermuda) Ltd. ("RGA Bermuda"); RGA Americas Reinsurance Company, Ltd.; and Triad Re, Ltd. In addition, the consolidated financial statements include the subsidiaries of RCM, Australian Holdings, RGA International, RGA UK, RGA Sudamerica, S.A., and RGA South Africa subject to an ownership position of fifty percent or more (collectively, the "Company"). During 2000, the Company sold its interest in RGA Sudamerica, S.A. and its subsidiaries, and RGA Bermuda.
The Company derives revenues primarily from renewal premiums from existing reinsurance treaties, new business premiums from existing or new reinsurance treaties, and income earned on invested assets.
The Company's profitability primarily depends on the volume and amount of death claims incurred. While death claims are reasonably predictable over a period of many years, claims become less predictable over shorter periods and are subject to fluctuation from quarter to quarter and year to year. A significant fluctuation from period to period could adversely affect the results of operations. The Company has catastrophe insurance coverage issued by 6 insurers rated "A" or higher by A.M. Best as of December 31, 2000, that provides benefits of up to $100.0 million per occurrence for claims involving three or more deaths in a single accident, with a deductible of $1.5 million per occurrence. This coverage is terminable annually as of August 13 with 90 days prior notice. The Company believes such catastrophe insurance coverage adequately protects it from risks associated with multiple deaths in a single accident of reinsured lives. Additionally, through December 31, 2000, the Company retained a maximum of $2.5 million of coverage per individual life. Effective January 1, 2001, the Company increased its retention to $4.0 million of coverage per individual life.
Other operating expenses increased 9.7% and 44.6% in 2000 and 1999, respectively. As a percentage of net premiums, other operating expenses were 2.4%, 2.4%, and 2.2% in 2000, 1999, and 1998, respectively. The increase was primarily due to increases in costs associated with the growth of the business.
The consolidated financial statements include the assets, liabilities, and results of operations of RGA; Reinsurance Company of Missouri, Incorporated ("RCM"); RGA Australian Holdings PTY, Limited ("Australian Holdings"); RGA Reinsurance Company (Barbados) Ltd. ("RGA Barbados"); RGA International, Ltd. ("RGA International"), a New Brunswick company that serves as a Canadian marketing and insurance holding company for RGA's Canadian operations; RGA Sudamerica, S.A., a Chilean holding company; RGA Holdings Limited ("RGA UK"), a United Kingdom holding company; General American Argentina Seguros de Vida, S.A. ("GA Argentina"), an Argentine life insurance company; RGA South African Holdings (Pty) Ltd. ("RGA South Africa"), a South African holding company; Benefit Resource Life Insurance Company (Bermuda) Ltd. ("RGA Bermuda"); RGA Americas Reinsurance Company, Ltd.; and Triad Re, Ltd. In addition, the consolidated financial statements include the subsidiaries of RCM, Australian Holdings, RGA International, RGA UK, RGA Sudamerica, S.A., and RGA South Africa subject to an ownership position of fifty percent or more (collectively, the "Company"). In 2000, the Company sold its interest in RGA Sudamerica, S.A. and its subsidiaries, and RGA Bermuda.
The amortized cost, gross unrealized gains and losses, and estimated fair values of investments in fixed maturity securities at December 31, 2000 and 1999 are as follows (in thousands):
On March 19, 1996, RGA issued 7 1/4% Senior Notes with a face value of $100.0 million in accordance with Rule 144A of the Securities Act of 1933, as amended. The net proceeds from the offering were approximately $98.9 million and interest is payable semiannually on April 1 and October 1, with the principal amount due April 1, 2006.