for 2001 include the operations of the combined UWS and BCBSUW entities
membership increase of 275,191 reflects a decrease of 18,474 members in BCBSUW
21.1% decrease in self-funded membership from 298,799 in 1999 to 235,604 in
investment in affiliates decreased to $6.5 million in 2000 from $22.7 million
$10.7 million loss before income taxes on self-funded business. In addition, the 2000 results include the
outstanding line of credit in the amount of $15.0 million as of December
Commissioner of Insurance of the State of Wisconsin (“OCI”) during 2001, 2000
turnover were to occur among insured employers, resulting in an impairment of
expected consistency in the frequency and severity of claims incurred but not
losses from the loss date to the notification date, and expected costs to
process (referred to as a hindsight analysis) and adjusts current year
way the Company conducts business and its ability to access capital from the
affect its financial position, results of operations and cash flows. Factors that could contribute to the loss of
business depends in part on its ability to maintain its information systems and
certain performance requirements or if other events described in the license
and divestiture agreement requires the Foundation to reduce its ownership of
ability to invest in technology and other products and services that it may
affiliated or associated with the Foundation or any shareholder that owns
directors and a majority of all of Cobalt’s directors on all proposals or
Owns 50% or More of the Outstanding Shares of Cobalt Common Stock.
acquisition of Cobalt by means of a merger or consolidation will require the
approval of the Cobalt board of directors and the holders of a majority of the
Management expects Compcare’s significant change in profitability to occur as a
and 2000, respectively, based upon management’s best estimate of the ultimate
disposal is reflected in selling, general, administrative and other expenses in
included in other noncurrent assets and are being amortized over the estimated
in the subsequent year. Any adjustments to prior period estimates are reflected
in the current period. Capitation represents fixed payments on a per member per
deficiency reserves (“PDR”) are recognized when it is probable that the future
revenues are recognized when services are billed. Receivables management revenues are recognized when cash is
and 1999, respectively, and are included in other revenue in the accompanying
shareholders by the weighted average number of common shares outstanding during
available-for-sale, are maintained under an escrow agreement with the BCA and
or amortized cost of $11,269,000 and $3,782,000 and estimated fair value of
in AMSG, a leading provider of small group PPO products and life products. Investment in affiliates for 2000 and 1999
investment in the net assets of affiliates is reported on the change in
approximately 1%, 3% and 3% in 2001, 2000 and 1999, respectively.
the Company recorded a non-cash pre-tax charge of $2,398,000 to reduce the
exposure to loss within its capital resources. The ceding company is
in other current and other noncurrent assets based on the expected settlements.
employs quota share and excess of loss reinsurance with third party reinsurers
estimate incurred claims. Changes in payment patterns and claims trends can
collateral for this LOC. The outstanding LOC balance was $7,850,000 and $0 as
totaling $4,500,000 has been classified in short-term debt on the accompanying
$1,339,000 received prior to Combination in 2001 is included in the
recorded as assets to the extent that management believes it is “more likely
involved in various legal actions occurring in the normal course of business.
the admitted assets and statutory surplus of Compcare is the statutory surplus
establish minimum levels of capital and surplus based upon the insurer’s
maintain certain capital and liquidity levels in conjunction with the licensing
other marketable securities, including 700,000 shares of Cobalt stock, held by
table provides a reconciliation of the funded status of the plans to the
selling, general, administrative and other expenses in 2001, 2000 and 1999 are
common stock are limited to 30% of their contributions exclusive of the Company
281,556 of the SAR’s had a strike price lower than the current market
Black-Scholes option valuation model was developed for use in estimating the