We have a policy and process in place to identify securities that could potentially have an impairment that is other-than-temporary. The assessment of whether impairments have occurred is based on a case-by-case evaluation of underlying reasons for the decline in fair value. We consider severity of impairment, duration of impairment, forecasted recovery period, industry outlook, financial condition of the issuer, issuer credit ratings and whether we intend to sell a security, or it is more likely than not that we would be required to sell a security, prior to the recovery of the amortized cost.
The recognition of other-than-temporary impairment losses on debt securities is dependent on the facts and circumstances related to the specific security. If we intend to sell a security or it is more likely than not that we would be required to sell a security prior to recovery of the amortized cost, the difference between amortized cost and fair value is recognized in the income statement as an other-than-temporary impairment. As it relates to debt securities, if we do not expect to recover the amortized basis, do not plan to sell the security and if it is not more likely than not that we would be required to sell a security before the recovery of its amortized cost, the other-than-temporary impairment would be recognized. We would recognize the credit loss portion through earnings in the income statement and the noncredit loss portion in accumulated other comprehensive loss.
On May 23, 2017 the Company entered into a definitive merger agreement with NPCC. The Merger closed on July 31, 2017. NPCC shareholders received .5841 shares of USAC Common Stock for each share of NPCC stock owned. USAC issued 1,644,458 shares of USAC Common Stock to holders of NPCC shares.
Investment income, net of expenses: The components of net investment income for the years ended December 31, 2017 and 2016 are as follows:
Expenses. Expenses for the year ended December 31, 2017 and 2016 are summarized in the table below.
Death claims: Death benefits were $823,545 in the year ended December 31, 2017 compared to $475,815 in 2016, an increase of $347,730. This increase is attributable to the growth of our in-force block of life insurance policies. The majority of death claims paid from inception have been on pre-need policies. We expect these claims to grow as we continue to increase the size of our in-force pre-need business.
Salaries and benefits: Salaries and benefits were $990,076 for the year ended December 31, 2017, compared to $752,534 in 2016, an increase of $237,542. The increase is primarily attributable to additional staff as a result of our merger with NPCC.
Other expenses: Other operating expenses were $1,316,162 in the year ended December 31, 2017, compared to $1,209,115 in 2016, an increase of $107,047. The increase is driven by marketing costs and professional fees associated with our growing business.
Net Loss: Our net loss was $1,049,032 in the year ended December 31, 2017 compared to net loss of $1,285,773 in the same period of 2016, a decrease of $236,741. This decrease is attributable to growth in our invested assets and our reinsurance agreement with ALSC offset by our increased operating expenses. Our net loss per share decreased to $0.18 from $0.24 in 2016, basic and diluted.
Assets. Assets have increased to $38,988,337 as of December 31, 2017, an increase of $19,191,989 from December 31, 2016. This is primarily the result of the growth of our available for sale assets.
Available for sale equity securities: As of December 31, 2017, we had available for sale equity assets of $10,663,515, an increase of $5,520,011 from the December 31, 2016 balance of $5,143,504. This growth is driven by our Merger with NPCC and our reinsurance agreement with ALSC.
Reinsurance related assets: As of December 31, 2017, our reinsurance related assets were $249,879 compared to $31,390 as of December 31, 2016. This increase is the result of the growth of our reinsured business.
Deferred acquisition costs, net: As of December 31, 2017, our deferred acquisition costs were $2,963,057 compared to $153,792 as of December 31, 2016. The growth is the result of the cost of reinsurance deferred on our coinsurance agreement with ALSC in the amount of $2,861,450.
Property, equipment and software, net: As of December 31, 2017 our property, equipment and software assets were $221,077, a decrease of $23,772 from the December 31, 2016 balance of $244,849. This decrease is a result of normal amortization during the period. We did purchase additional office furniture and equipment in 2017.
Policy liabilities: Our total policy liabilities as of December 31, 2017 were $24,945,377 compared to $7,740,329 as of December 31, 2016, an increase of $17,205,048. This increase is the result of our acquisition of DCLIC, our coinsurance agreement with ALSC, new policy sales and the growth of our in-force policies.
Shareholders’ Equity. Our shareholders’ equity was $13,935,702 as of December 31, 2017, an increase of $2,554,719 from our December 31, 2016 shareholders’ equity of $11,380,983. The growth in shareholders’ equity was driven by our Merger with NPCC, the issuance of new shares of stock, and the growth of accumulated other comprehensive income. This was partially offset by our net loss during the year.
Reflecting the high quality of securities maintained by us, 97.9% of all fixed maturity securities were investment grade as of December 31, 2017. As of December 31, 2016, 98.1% of all fixed maturity securities were investment grade. The increase in non-investment grade securities was driven by the purchase of a non-rated privately placed security.
At December 31, 2017, we had cash and cash equivalents totaling $651,809. We believe that our existing cash and cash equivalents along with our cash flow from operations will be sufficient to fund the anticipated operating expenses and capital expenditures through at least 2018. We have based this estimate upon assumptions that may prove to be wrong and we could use our capital resources sooner than we currently expect. The growth of USALSC and DCLIC, our insurance subsidiaries, is uncertain and will require additional capital if they continues to grow.