Even though the transition was successful, Hurricane Bonnie resulted in a high level of losses and claims activity that significantly affected the Company's financial results and commercial lines performance. It should be noted that the methodology of earning premiums associated with a transition to retaining risk tends to negatively impact results in the short term due to the timing of earned premium versus underwriting expenses. In addition, Seibels Bruce was heavily reinsured for large catastrophes, which absorbed a great deal of the Company's premium base. At April 1, 1999 Seibels Bruce is looking to take advantage of a more efficient reinsurance market to provide similar coverage. Because Seibels Bruce understands the importance of a complete product line and the benefits it receives from having commercial operations beyond simply premium volume, the Company remains committed to its commercial lines of business. As mentioned earlier, Seibels Bruce is examining ways to reduce its catastrophe risk exposure more efficiently through a long-term strategic alliance with a quality reinsurance organization. The Company expects to realize the benefit of this agreement in first quarter 1999.
award of two statewide windstorm contracts, a strong indication of Seibels Bruce's growing presence in the catastrophe claims adjusting market. The Company's flood products are supported by other lines of insurance in several markets.
The preceding Year 2000 compliance statement contains various forward-looking statements which represent the Company's beliefs or expectations regarding future events. When used in the Year 2000 compliance discussion the words "believes" "anticipates" and "expects" and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, without limitation, the Company's expectations as to when it will complete the remediation and testing phases of its Year 2000 program and those of its third party vendors; its estimated cost of achieving Year 2000 compliance; and the Company's belief that its internal systems and equipment will be Year 2000 compliant in a timely manner. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the projected results. Factors that may cause these differences include, but are not limited to, the availability of qualified personnel and other information technology resources; the ability to identify and remediate all the date sensitive lines of computer code or to replace embedded computer chips in affected systems of equipment; and the actions of third parties with respect to Year 2000 compliance.
The fair values of debt securities and equity securities were determined in accordance with methods prescribed by the National Association of Insurance Commissioners ("NAIC") which do not differ materially from nationally quoted market prices. The fair market value of certain municipal bonds is assumed to be equal to amortized cost where no market quotations exist.
The years of expiration of the tax carryforwards are as follows:
All grants made under the Plan have exercise prices no lower than the market price at the date of grant. At December 31, 1998, 1,388,435 shares of the Company's common stock have been reserved for