to meet its dividend payment requirements depends on the performance of the investment vehicles of the independent investment manager with which it invests its assets and the frequency with which the LLC can withdraw its investments in such vehicles. The investment managers' general strategy categories include, among others, diversified hedging, hedged equity, common stock/specialized trading, short selling, risk arbitrage, distressed securities, futures and commodities and foreign securities investing. The managers primarily invest in a variety of marketable securities and other liquid assets. The Company has invested, and the LLC also invests, in the investment vehicles of the managers, which are generally in the form of a corporation or other limited liability entity, or through managed accounts in which the manager invests directly on behalf of the Company or the LLC, as applicable. The investments in substantially all of these investment vehicles can be redeemed on at least an annual basis with many of the managers providing quarterly or more frequent liquidity.
The Company's Subordinated Notes were issued at a fixed interest rate. A hypothetical 10% decrease in market interest rates would cause a corresponding $2.1 million increase in the fair value of the Company's fixed rate corporate debt as compared to an increase of $1.9 million at December 31, 1998.
The Year 2000 issue relates to whether computer systems will properly recognize date-sensitive information in years subsequent to 1999. All of the Company's computer related systems are furnished by its third party administrative services provider, a substantial and reputable firm which provides similar services to other Bermuda based insurance companies. Computer systems of third parties may also have a significant impact on the Company's operations, such as those of investment managers and ceding insurers. The Company has not experienced any significant disruptions of business operations related to the Year 2000 issue to date and believes that the risk of any such disruption in the future is low, although no assurance can be given in this regard. It is possible, however, that Year 2000 problems that are not currently apparent may arise in the future. No material costs relating to the Year 2000 issue were incurred by the Company.
In connection with and because it desires to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company cautions its readers regarding certain forward-looking statements in the foregoing discussions and elsewhere in this Form 10-K and in any other statement made by, or on behalf of, the Company, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Some forward-looking statements may be identified by the use of terms such as "expects," "believes," "anticipates," "intends," or "judgment." Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control and many of which, with respect to future business decisions, are subject to change. Examples of such uncertainties and contingencies include changes in global economic and financial conditions and markets, the Company's investment strategy and implementation thereof, the performance of the Company's investment portfolio, competitive conditions in the global reinsurance markets, the ability of the Company to generate new business opportunities and submissions and changes in insurance or other laws and regulations or governmental interpretations thereof. These uncertainties can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company. The Company disclaims any obligation to update forward-looking information.