felanders/preprocessed huggingface dataset:
Asset/Liability Management and Market Risk. Because the Company's primary assets and liabilities are financial in nature, the Company's financial position and earnings are subject to risks resulting from changes in interest rates. The Company manages this risk by active portfolio management focusing on matching the durations of invested assets and related liabilities to minimize the exposure to fluctuations in interest rates and by the adjustment of the crediting rate on annuity products. In addition, the Company, at times, utilizes exchange-traded futures and option contracts to hedge the interest rate risk associated with anticipated purchases of investments. At December 31, 1998, the Company had no material open derivative positions.
Investment Results. Net investment income for 1999, 1998 and 1997 was $67.7 million, $78.0 million and $74.4 million, respectively. Net investment income decreased $10.3 million in 1999 compared to 1998 due to declining premium volume in 1999 and 1998, continued reduction of the investment portfolio due to the payment of older loss reserves, lower investment yield rates in 1999 and the 1998 repurchase of Company common stock. Net investment income for 1998 increased $3.6 million compared to 1997 due to the inclusion of American Reliance for the full year 1998. The 1998 investment income was partially offset by lower interest rates in 1998 and a reduction of the investment portfolio due to payment of older loss reserves.
The other information called for by this item can be found on Pages 31 through 73 of Trenwick's 1996 Annual Report to Stockholders under the captions "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Financial Statements" and is incorporated herein by reference.
A company's capacity to write insurance policies is dependent on a variety of factors including its net worth or "surplus", the lines of business written, the types of risk insured and its profitability. Since the late 1980's, the industry has generally had excess underwriting capacity. This condition has resulted in depressed premium rates and expanded policy terms, which generally occur in the industry when excess underwriting capacity exists. The Company continues to experience pricing competition in certain segments of its business as the conditions of heightened price competition and impaired underwriting performance continue in the industry as a whole.
Earnings for 1996 were affected by charges totaling $1.5 million for the settlement attributed to legal proceedings and related matters arising from the termination of an underwriting and production contract with the Company's former underwriting manager for a portion of the Company's surety bond program. In addition, legal expenses related to this matter were $441,000 for 1996. The Company's results for 1996 also reflect a charge totaling $1.1 million from an arbitration award that was lower than expected. Legal expenses related to the arbitration award were $527,000 in 1996.
Commissions and fees generated by Network were $148,000 in 1995, $722,000 in 1996 and $435,000 in 1997. Network is a third-party administrator of partially self-insured group accident and health plans. The Company acquired Network in the fourth quarter of 1995. Network's operations were consolidated into a joint venture in the third quarter of 1997. Effective December 31, 1997, Network's participation in the joint venture was terminated and Network no longer functions as a third-party administrator.
The following table sets forth the Company's policy acquisition costs for each of the three years ended December 31, 1995, 1996 and 1997:
The Company manages the composition of its borrowed capital by considering factors such as the ratio of borrowed capital to total capital, future debt requirements, the interest rate environment and other market conditions. Approximately 45% of the Company's corporate debt was issued at fixed interest rates. A hypothetical 10% decrease in market interest rates would cause a corresponding $1.8 million increase in the fair value of the Company's fixed-rate corporate debt at December 31, 1999 as compared to an increase of $2.1 million at December 31, 1998. Because interest expense on the Company's floating-rate corporate debt fluctuates as prevailing interest rates change, changes in market interest rates would not materially affect its fair value.
Reference is made to "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 32-49 of the 1996 Annual Report to Shareholders, which is incorporated herein by reference.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements - an Amendment of ARB No. 51 ("SFAS 160"), which establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 also requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated statement of income, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. SFAS No. 160 also provides guidance when a subsidiary is deconsolidated and requires expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parent's owners and the interests of the noncontrolling owners of a subsidiary. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company is currently evaluating the impact this statement will have on its financial position and results of operations.
Underwriting, acquisition and other insurance expenses increased 26% and 62% in 2001 and 2000, respectively. Lower sales and asset levels in 2001 led to a 39% decease in commissions and purchase credits. Partially offsetting this decline, the company launched a commission promotion program during 2001, which increased commissions as a percentage of new sales. Increased commissions and purchase credits reflect the increase in sales in both 2000 and 1999.
Total assets declined 12% in 2001 as a direct result of the decrease in separate account assets. Separate account assets declined consistent with the drop in the equity market, offset in part by new net sales activity.
SELECTED FINANCIAL DATA Selected financial data of the Corporation on pages 32 and 33 of the 1996 Annual Report to Shareholders is incorporated herein by reference.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's Discussion and Analysis on pages 14 through 31 of the 1996 Annual Report to Shareholders is incorporated herein by reference.
The Company holds net reserves (including retrospective reserves ceded under the Rosemont Re treaty of $7.1 million) of $59.2 million as of December 31, 2005. The net reserves consist of the following (in thousands):
LOSS FROM OPERATIONS. We had an operating loss of ($241,011) for fiscal year 2011 as compared to an operating loss of ($168,337) for fiscal 2010, primarily due to decreased revenues partially offset by lower operating expenses as described above.
(a) At December 31, 2010 this vehicle and the related notes payable were disposed of.
information about the assumptions, inputs and methodologies used in pricing those securities, and corroborate it against documented pricing methodologies. Validation procedures are in place to determine completeness and accuracy of pricing information, including, but not limited to: (i) review of exception reports that (a) identify any zero or un-priced securities; (b) identify securities with no price change; and (c) identify securities with significant price changes; (ii) performance of trend analyses; (iii) periodic comparison of pricing to alternative pricing sources; and (iv) comparison of pricing changes to expectations based on rating changes, benchmarks or control groups. In certain circumstances, pricing is unavailable from the vendor and broker pricing information is used to determine fair value. In these instances, management will assess the quality of the data sources, the underlying assumptions and the reasonableness of the broker quotes based on the current market information available. To determine if an exception represents an error, management will often have to exercise judgment. Procedures to resolve an exception vary depending on the significance of the security and its related class, the frequency of the exception, the risk of material misstatement, and the availability of information for the security. These procedures include, but are not limited to: (i) a price challenge process with the vendor; (ii) pricing from a different vendor; (iii) a reasonableness review; and (iv) a change in price based on better information, such as an actual market trade, among other things. Management considers all facts and relevant information obtained during the above procedures to determine the proper classification of each security in the Fair Value Hierarchy.
Total net investment income decreased $5.8 million. The overall annualized investment yields were 3.3% and 3.8% in 2014 and 2013, respectively. The overall decrease was primarily a result of a decrease in investment income on bonds, equities and short-term investments due to the transfer of $215.1 million of invested assets in the second quarter of 2013 related to a coinsurance treaty and lower income from partnerships. The annualized investment yields on bonds, equities and short-term investments were 3.2% and 3.5% in 2014 and 2013, respectively. IHC has approximately $149.4 million in highly rated shorter duration securities earning on average 1.4% at December 31, 2014. A portfolio that is shorter in duration enables us, if we deem prudent, the flexibility to reinvest in much higher yielding longer-term securities, which would significantly increase investment income.
The number of Trust Interests outstanding at December 31, 2007 and 2006 was 260,655,407, and 276,904,422, respectively. The decrease of 16,249,015 in the number of Trust Interests is primarily attributable to net Trust Interests redeemed and Trust Interests withdrawn. Net assets of the Trust consist solely of Trust Shares and will increase or decrease depending upon, among other things, the movement of Trust Shares into or out of the Trust as directed by the Beneficiaries.
We have audited the accompanying statements of assets and liabilities of the MetLife Policyholder Trust (the “Trust”) as of December 31, 2007 and 2006, and related statements of operations and changes in net assets for each of the three years in the period ended December 31, 2007. These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
HRM's principal corporate offices consist currently of approximately 142,500 square feet in a building in Minneapolis, MN with a lease expiring in or by 2009, 31,000 square feet in Kalamazoo, MI with a lease expiring in or by 2001, 28,000 square feet in Philadelphia, PA with a lease expiring in or by 2004 and 4,000 square feet in Sacramento, CA with a lease expiring in or by 1999. All of the Company's facilities are used exclusively by the Company for office space or computer operations and are anticipated to be adequate, but will be expanded as business needs require.
Income before income taxes increased by $1,918,000 (25%) to $9,637,000 in 1998 from $7,719,000 in 1997. The increase in operating result was due to increased net premiums earned, investment income and a decreased combined ratio.
As of, or for the years ended December 31, ------------------------------- 1999 1998 1997 ---- ---- ---- Average cash and cash equivalents and invested assets(1) $ 91,097 $ 85,191 $ 76,534
The following information presented for CNA Surety is for the years ended December 31, 2000, 1999 and 1998 and the period from September 30, 1997 (date of inception) through December 31, 1997 and as of December 31, 2000, 1999, 1998 and 1997. Selected financial data of the Predecessor is presented on the following page.
Excluding the losses described above, AMS net income was $16 in 1995 as compared with $23 in 1994. Although 1995 results were below the historic high of 1994, management does not expect this trend to continue.
CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See Index to Consolidated Financial Statements and Schedules.
Consolidated Statements of Operations - Year Ended December 3l, 1998, 1997 and 1996
The financial statements and supplementary data in the 1998 Annual Report to Shareholders are incorporated herein by reference.
The information required by this Item 6 is incorporated by reference from page 19 of Alleghany's Annual Report to Stockholders for the year 1994, filed as Exhibit 13 hereto.
The information required by this Item 7 is incorporated by reference from pages 2 through 4, from pages 6 through 15, and from pages 20 and 21, of Alleghany's Annual Report to Stockholders for the year 1994, filed as Exhibit 13 hereto.
We own our principal office in Austin, Texas, consisting of an 80,000 square foot office building and approximately one acre of land nearby that house storage facilities. Approximately 50,000 square feet is occupied or reserved for our operations. We also own a training facility at Lake Buchanan, Texas. In addition, we own other properties in Texas, Arkansas and Louisiana that are incidental to our operations.
Following is a discussion and analysis of the financial statements and other statistical data that management believes will enhance the understanding of AAG's financial condition and results of operations. This discussion should be read in conjunction with the financial statements beginning on page.
Net investment income for the Partnership’s office properties was approximately $3.4 million for the year ended December 31, 2006, an increase of approximately $0.3 million from the prior year. The increase was primarily due to (a) increased rents and lower expenses at the office property in Lisle, Illinois; (b) stabilized occupancy and increased rents at the office properties in Brentwood, Tennessee; and (c) increased rents and higher occupancy at the office property in Beaverton, Oregon. Partially offsetting this increase was the loss of income from the Oakbrook Terrace, Illinois office property that was sold on June 8, 2005.
Net investment income for the Partnership’s apartment properties was $1.1 million for the year ended December 31, 2006, a decrease of approximately $0.9 million from the prior year. The decrease was primarily due to the loss of income on the Salem, Oregon, Gresham, Oregon and Jacksonville, Florida apartment properties that were sold on March 10, 2005, August 10, 2005 and November 30, 2005, respectively, and increased operating expenses at the apartment property in Raleigh, North Carolina. Partially offsetting the decrease was an increase in net investment income for the apartment property in Atlanta, Georgia due to increased rents, reduced operating expenses and lowered rental concessions.
Management overview. During fiscal 2012, our total revenues were $341.8 million, representing an approximately 6% increase over the $322.8 million in total revenues for fiscal 2011. The growth in revenue was primarily attributable to increased premium production and resulting earned premium driven largely from our E&S Commercial business unit and from the acquisition of our Workers Compensation business unit during the third quarter of 2011. The increase in revenue was partially offset by an adverse profit share commission revenue adjustment in our Standard Commercial P&C business unit, combined with lower finance charges and earned premium in our Personal Segment due mostly to the impact of a reduction of premium written in underperforming states and products exited over the past twelve months. Further offsetting the increase in revenue was lower net realized gains for the period ended December 31, 2012.
Comparison of Years Ended December 31, 2012 and December 31, 2011
Premiums and policy fees: Life insurance $ 774,294 $ 565,130 $ 198,832 $ 407,996 48.7% Accident/health insurance 181,509 122,747 58,762 0.0% Property and liability insurance 158,890 83,274 76,295 151,911 50.2% ------------ ------------ ----------- ----------- TOTAL $ 1,114,693 $ 771,151 $ 275,127 $ 618,669 ============ ============ =========== =========== Year Ended December 31, 2000: Life insurance in force $153,371,754 $128,374,583 $17,050,342 $42,047,513 40.6% ============ ============ =========== =========== ===== Premiums and policy fees: Life insurance $ 670,113 $ 493,793 $ 112,668 $ 288,988 39.0% Accident/health insurance 203,430 128,520 17,164 92,074 18.6% Property and liability insurance 159,354 63,795 13,169 108,728 12.1% ------------ ------------ ----------- ----------- TOTAL $ 1,032,897 $ 686,108 $ 143,001 $ 489,790 ============ ============ =========== =========== Year Ended December 31, 1999: Life insurance in force $112,726,959 $ 92,566,755 $17,089,627 $37,249,831 45.9% ============ ============ =========== =========== =====
Collected premiums on interest sensitive and annuity products including the Acquisitions increased by $51.8 million from $287.3 million 1996 to $339.1 million in 1997. This increase in collected premiums is not reflected in premiums and policy revenues because generally accepted accounting principles require that premiums collected on these types of products be treated as deposit liabilities rather than revenues.
Other operating expenses. Other operating expenses increased to $56.7 million in 1996 from $47.1 million in 1995. The increase in other operating expenses primarily resulted from increased expenses associated with servicing the policies related to the Acquisitions. Other operating expenses also increased in 1996 as a result of increased product development and marketing expenses, partly in connection with marketing alliances with Ohio Life and Fremont Life.
The Company uses the asset and liability method of accounting for income taxes. Deferred income taxes are provided for cumulative temporary differences between balances of assets and liabilities determined under GAAP and balances determined using tax bases.
Management has evaluated subsequent events for recognition and disclosure in the financial statements through the date the financial statements were available to be issued.
In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”). ASU 2018-02 was issued to address the income tax accounting treatment of the stranded tax effects within other comprehensive income due to the prohibition of backward tracing due to an income tax rate change that was initially recorded in other comprehensive income. This issue came about from the enactment of the Tax Cuts and Jobs Act on December 22, 2017 that changed the Company’s income tax rate from 35% to 21%. The ASU changed current accounting whereby an entity may elect to reclassify the stranded tax effect from accumulated other comprehensive income to retained earnings. The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company is evaluating the effects of the enactment of the Tax Cuts and Jobs Act and ASU 2018-02, but does not expect a material impact on the Company’s financial condition or results of operations from the adoption of this guidance.
(B) The Board of Directors declared special stock dividends in December 1999 (5%), 1998 (10%), 1997 (5%), 1996 (6%), and 1995 (6%); in August 1997 the Board declared a two-for-one stock split. All Net income per share and Total capital per share data on this page has been restated as if the dividends and the stock split had been declared on January 1, 1995. Additionally, treasury stock is excluded from the date of acquisition for purposes of determining the weighted average number of shares outstanding used in the computation of net income per share of common stock.
Loss ratios in both years reflect improvement of loss development in prior years coverage. See Note 6 of the Notes to Consolidated Financial Statements for additional information concerning losses.
Refer to the consolidated financial statements and supplementary data included on pages 33 through 65, and on page 71, of the 2010 Financial Report to Shareholders, attached as Exhibit 13 and incorporated by reference herein. (See also Index to Financial Statement Schedules on page 50).
In 2000 and 1999, the Company expensed a total of $63 million and $73.9 million, respectively, for graduate medical education and a total of $38.9 million and $41.9 million, respectively, for hospital bad debt and charity care. See "Liquidity and Capital Resources".
During 2006, the Company experienced favorable development in its commercial package and general liability products amounting to $3,701,000 related to accident years prior to 2002, due to lower than anticipated incurred loss development. The Company has made no changes to its procedures for processing or reserving for commercial package and general liability claims and is not aware of any changes to its business that might have caused a change in loss development patterns.
Regulatory guidelines suggest that the ratio of a property and casualty insurer’s annual net premiums written to its statutory surplus should not exceed 3 to 1. The Company has consistently followed a business
The National Association of Insurance Commissioners ("NAIC") has adopted a model law enacting risk-based capital ("RBC") formulas and setting thresholds for regulatory action. At December 31, 1994 and 1993, GALIC's capital ratios significantly exceeded RBC requirements.
As discussed in Note A to the consolidated financial statements, the Company made certain accounting changes in 1994, 1993 and 1992.
Fixed Equity Tax 1994 MaturitiesSecurities Effects Total Realized ($ 2.1) $ 2.0 $ 0.0 ($ 0.1) Change in Unrealized (485.3) (2.1) 170.6 (316.8)
In 1994, AAG recorded a $4.0 million pretax charge for discontinued operations, primarily related to environmental liabilities. The loss from discontinued operations in 1993 included charges for employee related obligations of approximately $9.7 million resulting primarily from a decrease in the discount rate used to calculate pension obligations. The remaining charges reflected additional write-downs and other estimated expenses associated with the Company's former manufacturing properties.
In 1992, AAG sold its capacitor and thick film network businesses for approximately $130 million in cash, notes and property. The Company recorded provisions of $42.6 million related to the anticipated sales of these operations during 1991.
The Insurance Subsidiaries had consolidated revenues of approximately $46.6 million, $51.1 million and $49.3 million for the years ended December 31, 1995, 1996, and 1997, respectively, representing 93%, 95% and 96%, of the Company's total revenues for each period, respectively. Although American Progressive, domiciled in New York, primarily sells its products in New York and the northeastern United States, American Pioneer, domiciled in Florida, primarily sells its products in Florida and the southeastern United States and American Exchange, domiciled in Texas, exclusively sells its products in Texas, one or more of the Insurance Subsidiaries is licensed in 45 states and in the District of Columbia.
Specialty Reinsurance and Program Insurance Premium. The reinsurance business was produced and managed by one of the Somerset Companies. This reinsurance premium consisted primarily of excess of loss and quota share property, surety, and other specialty reinsurance lines. Navigators Insurance did not renew this reinsurance business after 1995 except for a few specialty treaties. The program insurance, which began in 1995, was reduced for 1997, and currently consists of one managing general agent writing primarily general liability for contractors.
Refer to the Selected Financial Data on pages 86 through 87 of the Annual Report to Shareholders for the year ended December 31, 2002 attached in Exhibit 13.
Surrenders increased from the year ended December 31, 1997 to the year ended December 31, 1998 by $3.1 million. This increase in surrenders was offset by a corresponding change in the increase in future policy benefits. Surrenders generally have little impact on current year operations due to the fact that surrender benefits are fully reserved and as surrender benefits are paid the reserve for future policy benefits is reduced by a corresponding amount. The more significant effect on operations occurs in future years when we lose future investment earnings on the business surrendered.
Fixed assets increased approximately $400,000 from $1.2 million at December 31, 1998 to $1.6 million at December 31, 1999, due to ongoing development and modifications to our software systems.
Many of these items are not directly quantifiable, particularly on a prospective basis. Reserve estimates are refined as experience develops. Adjustments to reserves, both positive and negative, are reflected in the statement of operations of the period in which such estimates are updated. Because the establishment of reserves is an inherently uncertain process involving estimates of future losses, there can be no certainty that ultimate losses will not exceed existing claims reserves. Future loss development could require reserves to be increased, which could have a material adverse effect on our earnings in the periods in which such increases are made.
The current interest rate environment with low yields for investments with the credit quality we prefer presents a strong headwind to restoring our investment spread to our 3.00% target rate. With our portfolio yield under pressure from lower yields on benchmark U.S. Treasury securities and narrower credit spreads, further adjustments to new and renewal crediting rates will be considered. We have on average 0.63% of room to reduce rates before we would reach minimum guaranteed rates on our entire December 31, 2014 in force book of business. We also implemented modest reductions in certain new money rates in October 2014 and will be reducing new money rates more extensively in early March 2015. These are the first adjustments to new money rates since the third quarter of 2013 when we increased rates in response to rising investment yields at that time. We were reluctant to reduce new money rates during 2014 for competitive reasons. However, we remain aware of our spread and return on average equity objectives and will make further adjustments to new money rates based upon changes in investing and market conditions.
In 2013, we retired $184 million aggregate principal amount of three issues of convertible notes. The loss on retirement was $32.5 million ($21.7 million after income taxes). In connection with the retirement of the 2015 notes, we entered into early termination agreements for a corresponding amount of the related 2015 notes hedges and the 2015 warrants. The impact of the partial unwinds decreased the change in fair value of derivatives and net income for the year ended December 31, 2013 by $5.8 million and $3.4 million, respectively (see Note 5 to our audited consolidated financial statements).
In 2012, we established an estimated litigation liability of $17.5 million ($9.6 million after offsets for income taxes and adjustments to deferred policy acquisition costs and deferred sales inducements) based upon developments in mediation discussions concerning potential settlement terms of a purported class action lawsuit. See Note 13 to our audited consolidated financial statements.
Our Heath XS Operating Unit is located at 59 South Finley Avenue, Basking Ridge, New Jersey. The suite is located in a low-rise office building and contains 2,285 square feet of space. The rent is currently $3,606 per month pursuant to a lease which expires April 30, 2013.
Total expenses ................. 90.4 % 102.8 % 84.3 % ------ ------- ------ Income (loss) before interest expense, equity in loss of joint venture, and income taxes ..................... 9.6 % (2.8)% 15.7 %
Policyholder benefits decreased by $2 million, or 4.3%, from $47 million for the year ended December 31, 2002, to $45 million for the year ended December 31, 2003. The decrease was driven by favorable development in disability claims and lower claims volume due to the reduction in group life net earned premiums. In addition, during the third quarter of 2003, we completed reserve studies for the group life, group dental and group disability products, which concluded that, in the aggregate, these reserves were redundant. Adjustments were made to reserves to reflect current mortality and morbidity experience. In addition, the reserve discount rate on all claims was changed to reflect the continuing low interest rate environment. The net impact of these adjustments was a reduction in reserves of approximately $0.2 million.
- Recent prices (i.e., discount rates used in determining valuations) paid by others to acquire or recapture similar blocks of business.
of Financial Accounting Standards No. 97 ("SFAS No. 97"). "Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses on the Sale of Investments". Under SFAS No. 97, a benefit reserve is established at the time of policy issuance in an amount equal to the deposits received. Thereafter, the benefit reserve is adjusted for any additional deposits, interest credited and partial or complete withdrawals. Revenues for annuities and universal and interest-sensitive life policies, other than certain non-interest sensitive annuities, consist of policy charges for surrenders and partial withdrawals, mortality and administration, and investment income earned. Such revenues do not include the annuity and universal and interest-sensitive life policy deposits. Expenses related to these products include interest credited to policyowner account balances, operating costs for policy administration, amortization of DAC and mortality costs in excess of account balances.
In February 1996, Standard Management instituted a program to repurchase from time to time up to 300,000 shares of its Class S Preferred Stock in the open market or privately negotiated transactions. As of December 31, 1996, Standard Management had repurchased and retired 140,111 shares of its Class S Preferred Stock for $949,000.
income of Shelby Life was $1,660,855 for the year ended December 31, 1995 and $851,472 for the ten months ended October 31, 1996.
During the second quarter of 2017, we recognized a pre-tax charge of $2 million, reflecting a change in our estimate of reinsurance cash flows associated with universal life products as well as a change in our method of reflecting these cash flows in the financial statements. Under our previous method of accounting, with the exception of recoveries pertaining to no-lapse guarantees, we generally recognized reinsurance cash flows (e.g., premiums and recoveries) as they occurred. Under our new method, the expected reinsurance cash flows are recognized more ratably over the life of the underlying reinsured policies. In conjunction with this change, we revised how reinsurance is reflected in estimated gross profits used for the amortization of URR and DAC. The change represents a change in accounting estimate effected by a change in accounting principle and is included within our annual reviews and update of assumptions and other refinements. The change in accounting estimate reflected insights gained from revised cashflow modeling enabled by a systems conversion, which prompted the change to a preferable accounting method. We view this new methodology as preferable as we believe it better reflects the economics of our reinsurance transactions by aligning the results of our reinsurance activity more closely to the underlying direct insurance activity and by better reflecting the profit pattern of this business for purposes of the amortization of the balances noted above. See Note 2 to the Consolidated Financial Statements for more information.
Estimating future loss payments is difficult and our assumptions are subject to change. Claims, by their very nature, are complex and involve uncertainties as to the dollar amount and timing of individual payments. Our experience has been that most policy claims and claim payments are made in the first six years after the policy has been issued, although claims are incurred and paid many years later.
In our REI segment, total employee costs for 2007 decreased $2.8 million, or 5.5%, from 2006 primarily due to the sale of our mapping and aerial photography businesses and also in our Section 1031 tax-deferred exchange business. Employee costs in this segment were comparable between 2006 and 2005.
The Company's and PMA Re's headquarters are located in 78,000 square feet of leased space in center city Philadelphia, Pennsylvania. The PMA Insurance Group's headquarters are located in a four story, 110,000 square foot building in Blue Bell, Pennsylvania. Caliber One's headquarters are located in 10,000 square feet of leased office space in Langhorne, Pennsylvania.
Management's Discussion and Analysis of Financial Condition and Results of Operations on pages 28 through 49 of the Annual Report is incorporated herein by reference.
Premiums. Gross written premiums decreased by 1.0% to $2,125.8 million in 2016 from $2,147.9 million in 2015, primarily due to a decrease in treaty property business, partially offset by an increase in treaty casualty business. Net written premiums increased by 3.4% to $930.2 million in 2016 compared to $899.9 million in 2015. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to the assumption of the crop business due to the sale of Heartland and a concurrent new crop reinsurance contract. Premiums earned increased 4.1% to $990.1 million in 2016 compared to $951.5 million in 2015. The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). Preparation of financial statements in accordance with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related notes. Management believes that the following critical accounting policies, among others, affect the more significant judgments and estimates used in the preparation of the consolidated financial statements. Actual results may differ from these estimates under different assumptions or conditions.
Net investment income increased to $20.4 million for 2006 from $17.8 million in 2005 and $19.2 million in 2004. The changes in net investment income are primarily related to changes in short-term interest rates between periods, as the portfolio is very short in duration.
The consolidated financial statements required in response to this Item are submitted as part of Item 14 (a) of this report.
The primary uses of net cash from investing activities for the twelve months ended December 31, 2001 were $1,524,469 for the purchase of the Novaeon Assets and purchases of new systems and computer equipment of $525,796.
The information with respect to Management's discussion and analysis of financial condition and results of operations is contained under the caption "Management's Discussion and Analysis of Results of Operations and Financial Condition" on pages 21 through 32 of the Annual Report and is incorporated herein by reference thereto in response to this item.
See the information in 'Reliance Group Holdings, Inc. & Subsidiaries Selected Financial Data' on pages 21 and 22 of the Reliance Group Holdings 1996 Annual Report, which information is incorporated herein by reference.
The following information should be read in conjunction with, and is qualified in its entirety by reference to, the Consolidated Financial Statements of the Company and the notes thereto appearing elsewhere in this Form 10-K.
Item 6. CONSOLIDATED SELECTED FINANCIAL DATA (In Thousands, Except Per Share Data)
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of AmerInst Insurance Group, Ltd. and subsidiaries as at December 31, 2004 and 2003 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2004 in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
Consolidated Balance Sheets as of December 31, 2001 and 2002 36-37
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2000, 2001 and 2002 39
Fire and Marine owns our corporate headquarters buildings, located at 385 Washington Street and 130 West Sixth Street, St. Paul, MN. These buildings are adjacent to one another and consist of approximately 1.1 million square feet of gross floor space. Fire and Marine also owns property in Woodbury, MN where its Administrative Services Building and off-site computer processing operations are located. Fire and Marine also owns the former USF&G headquarters campus known as Mount Washington Center, located in Baltimore, MD. The campus currently houses offices for certain executives of The St. Paul, as well as offices for certain underwriting, legal and claim personnel. A training and development center also resides on the Mount Washington campus. Fire and Marine has leased a substantial portion of one of the buildings on the campus to an outside party.
In addition, the Company had notes payable outstanding consisting of $0.3 million of debentures and $1.0 million of subordinated surplus certificates (collectively "the Surplus Notes"). The Surplus Notes bear interest at the rate of eight percent per annum, have no maturity date, and principal and interest are repayable only with the approval of the Insurance Department of the State of New York. Interest expense incurred by the Company on the Surplus Notes for the years ended December 31, 1997, 1996 and 1995 was $102,000, $167,000 and $216,000, respectively. The Company has received conditional approval from the Insurance Department of the State of New York to redeem all of the Surplus Notes outstanding, and plans to do so effective April 1, 1998. Principal and accrued interest on the Surplus Notes as of April 1, 1998 will be approximately $1.4 million.
As of December 31, 2017 and 2016, the Trust holds $30.2 million and $25.8 million, respectively in escrow for future payment of the continuing fractional holders’ premium obligations. To the extent that these funds are not used for premium payments, they are refundable to the respective continuing fractional holder.
Other income consists primarily of fees charged to policyholders by the Company for services outside of the premium charge, such as installment billings or policy issuance costs. Commission income is also received by the Company’s insurance agencies for writing policies for third party insurance companies. Other income increased by $527,000, or 33.3%, to $2.1 million for the year ended December 31, 2019, as compared to $1.6 million in 2018. The increase in other income was primarily due to additional commission income in the Agency operations as well as increased fees charged on existing business.
• The Company has evaluated the pre-need line of business and decided to minimize marketing efforts directed at that line to allow for more focused efforts at line of business with more potential for profitability.
earning a statutory operating profit for all segments (see page 23 of this Management Discussion and Analysis and Note 7 to the Consolidated Financial Statements for a discussion of statutory accounting practices)
Shown below are the Company's four largest holdings in non-investment grade bonds by a single issuer as of December 31, 2004.
Sub-Managers : E. Andreoli H, Grossmann E. Froelich A. Hollinger J. Gailloud R. Secretan 0. Wiesmann
Production of new business in the Life department reflects, in as far as Continental business is concerned, the still unsettled state of Europe; to this may also he attributed the relatively large proportion of surrenders. Our American Life business continues to develop very satisfactorily. The Mortality experience has again been favourable. All acquisition costs have as usual been completely written off.
The percentage of losses and loss adjustment expenses to net premiums earned was 68.5%, 62.3% and 59.8% in 1994, 1995 and 1996, respectively. The decrease in the loss ratio from 1994 to 1995 is primarily due to two reasons. First, the amount of losses and loss adjustment expenses recorded in 1994 that was attributable to prior years was $1.1 million (1.4% of net premiums earned). In 1995, the Company's reserve for loss and loss adjustment expenses reflected a $432,000 redundancy in the reserve established at December 31, 1994 which reduced the 1995 loss ratio by 0.5 percentage points. Second, the Company increased the estimated ultimate loss ratio of a substantial portion of the surety bond program in 1994 which increased the loss ratio by 5.8 percentage points. This increase was offset by corresponding adjustments to policy acquisition costs. In 1996, the Company decreased the estimated ultimate loss ratio of a substantial portion of the surety bond program which decreased the loss ratio by 3.1 percentage points. This decrease was offset by corresponding adjustments to policy acquisition costs. In addition, the loss commutations discussed above decreased the 1994, 1995 and 1996 loss ratios by 0.6, 1.8 and 0.5 percentage points, respectively.
Selected quarterly financial data for 2014 and 2013 are shown in the following table. The quarterly financial data includes, in the opinion of management, all recurring adjustments necessary for a fair presentation of the results of operations for the interim periods (dollars in thousands, except per share amounts).
Premium Revenue and Risk Transfer. We record premiums revenue as earned pro-rata over the terms of the reinsurance agreements and the unearned portion at the balance sheet date is recorded as unearned premiums reserve. A reserve is made for estimated premium deficiencies to the extent that estimated losses and loss adjustment expenses exceed related unearned premiums. Investment income is not considered in determining whether or not a deficiency exists.
Celite extracted, through surface mining, a total of approximately 136,000 tons of diatomaceous earth from the Quincy property in 2004 and, on average, has extracted a total of approximately 100,000 tons of diatomaceous earth from this property each year for the past three years, or approximately 15.0 percent of its total diatomaceous earth production. This diatomaceous earth is processed at the Quincy production facility which has approximately 60,941 square feet of space and has a rated capacity in excess of 85,000 tons annually. The plant and equipment are maintained by a full-time maintenance department and operate on regular replacement and repair cycles. The power sources of the mining operations are natural gas and electricity.
OGGI's insurance subsidiaries have geographic exposure to catastrophic losses in certain Mid Atlantic states. Catastrophes can be caused by various events including hurricanes, windstorms, earthquakes, hail, explosions, severe weather and fires, and the incidence and severity of catastrophes are inherently unpredictable. The extent of losses from a catastrophe is a function of both the total amount of insured exposure in the area affected by the event and the severity of the event. Most catastrophes are restricted to small geographic areas; however, hurricanes and earthquakes may produce significant damage in large, heavily populated areas. OGGI's insurance subsidiaries generally seek to reduce their exposure to catastrophe through individual risk selection and the purchase of catastrophe reinsurance.
On February 10, 1997, OGGI, Old Guard, Old Guard Fire, First Patriot (the Insurance Companies) and each of their respective directors were served with an eleven count combination class action and derivative lawsuit, filed in the United States District Court for the Eastern District of Pennsylvania by four policyholders. By filing the class action portion of the lawsuit, these four policyholders purport to represent all 141,000 policyholders of the Insurance Companies. Seven of the eleven counts challenge the constitutionality of the Pennsylvania Insurance Company Mutual to Stock Conversion Act (Act), which permitted the Insurance Companies plan of demutualization (Plan) in 1997. The plaintiffs are contending that the Plan violated the rights of the plaintiffs and members of the class under the United States and Pennsylvania Constitutions and that the Act is unconstitutional as applied by the Plan. The remainder of the class action claims assert theories regarding purported violations of the Act, principally relating to the description of the Plan in the proxy statement approved by the Insurance Department of the Commonwealth of Pennsylvania (Department) and mailed to policyholders. The derivative claim was brought against the directors of the Insurance Companies, purportedly on behalf of the Insurance Companies, alleging breach of the fiduciary duty of care in approving and implementing the Plan and the fiduciary duty of loyalty, presumably in approving the stock-based compensation plans which were contemplated by the Plan. The stock-based compensation plans are expressly permitted by the Act, were approved by the Department and have subsequently been approved by shareholders. The suit seeks such compensatory damages as may be allowed by law, a declaration that the Plan violates the Act and the United States and Pennsylvania Constitutions and the rights of the plaintiffs thereunder, and such other relief as the court deems appropriate.